Connect with us

Published

on

Tech might not be the first thing that comes to mind when one pictures Phoenix. The city is better known for its golf courses, Major League Baseball’s Spring Training, retirement appeal and scorching heat. 

But its growth into an innovation hub has been quietly playing out over several decades. Arizona’s largest city has, for a variety of reasons, become the epicenter for semiconductor manufacturing, and testing self-driving cars and drones.

“If we look at cities that really do end up becoming these, you know, important technology hubs, there are really four things that we usually see, and Phoenix really has all of them going,” said Anne Hoecker, global head of technology at Bain Global. “The first is a favorable business environment. The second really is that ecosystem of other companies. The next is really close proximity to a university that has a strong engineering program. And then finally it is that availability of talent.”

Technology companies have flocked to the city to capitalize on those perks. Taiwan Semiconductor Manufacturing Company, or TSMC, is among the biggest.

TSMC makes the most advanced chips in the world, and has pledged to invest $65 billion in the greater Phoenix area. The chipmaker initially held discussions with the city of Phoenix in 2016, when it was looking to grow its advanced chip manufacturing beyond Taiwan. In order to secure the bid, the Greater Phoenix Economic Council spent three years conceptualizing a science and technology park to meet the needs of the company. The project, once complete, expects to bring in about 62,000 jobs surrounding and including TSMC.

“They’re basically duplicating the science park concept that was pioneered in Taiwan,” said Rick Cassidy, chairman of TSMC Arizona. “It solves lots of problems for our smaller suppliers. They can actually rent space and just plug in.”

Self-driving cars are another hallmark of the city’s tech scene. Uber, Cruise and Alphabet‘s Waymo have all tested autonomous vehicles in the city. The infrastructure in Phoenix, with its gridded streets and consistent weather, made it an “optimal” place to roll these out, according to Bain’s Hoecker.

Arizona’s policy has been welcoming to self-driving technology. Former Arizona Governor Doug Ducey enacted several executive orders to reduce barriers for autonomous testing. Waymo began testing in Phoenix in 2017 and is the biggest player in the market. The company’s robotaxi service now operates across 315 square miles in the city.

Drones have been another technology putting the city on the map. In November, Amazon received regulatory approval to launch its Prime Air drone program in Tolleson, a suburb in west Phoenix. The plan is to scale the program to 500 million deliveries per year, according to Amazon. The company says thousands of packages have been delivered so far. 

“It’s about scaling around the U.S. and around the world, said David Carbon, vice president and general manager of Amazon Prime Air, adding that more is coming in 2025. “This is just the beginning.”

Watch the video as CNBC’s Kate Rooney gets a behind-the-scenes look at Amazon’s cutting-edge drone operation and explores how Phoenix became a hot spot for tech.

Continue Reading

Technology

Anduril in talks to raise money at $28 billion valuation as defense-tech booms

Published

on

By

Anduril in talks to raise money at  billion valuation as defense-tech booms

Anduril reportedly in talks to raise new funding round that could double valuation

Anduril, the defense-tech startup founded by Palmer Luckey, has signed a term sheet to raise capital at a $28 billion valuation, according to people familiar with the matter.

The company is planning to raise up to $2.5 billion in the round, said the people who asked not to be named because the details are confidential. The latest funding would double Anduril’s valuation from August.

Anduril, the three-time CNBC Disruptor 50 company that ranked No. 2 in 2024, aims to disrupt traditional defense contractors like Lockheed Martin, Raytheon and Northrop Grumman by developing its own products and selling them to clients, in contrast to the traditional military process of contracting and then building.

An Anduril spokesperson declined to comment.

Luckey, who sold virtual reality company Oculus to Facebook for $2 billion in 2014, has been a public supporter of Donald Trump since long before the president’s return to the White House.

“I’ve been on the tech-for-Trump train for longer than just about anyone,” Luckey, who started the company in 2017, told CNBC’s “Closing Bell Overtime” on Nov. 6, right after Trump’s election victory. “The idea that we need to be the strongest military in the world is really non-partisan.”

In December, Anduril announced a partnership with artificial intelligence startup OpenAI, allowing the defense tech company to deploy advanced AI systems for “national security missions.”

It’s part of a broader and controversial trend of AI companies walking back bans on military use of their products and entering into partnerships with defense companies and the U.S. Department of Defense. In December, Anthropic and Palantir announced a partnership with Amazon Web Services to “provide U.S. intelligence and defense agencies access” to Anthropic’s AI models.

While Anduril is still privately held, Palantir, which sells software and services to defense agencies, is publicly traded and has been one of the best performers on the stock market in the past year, jumping 370% over that stretch, lifting its market cap past $250 billion. The company reported in its latest earnings report this week that government revenue jumped 45% from a year earlier to $343 million.

Peter Thiel’s Founders Fund is leading the latest Anduril financing, with a $1 billion commitment, sources said, the largest check ever for the firm. Thiel, who was a major Trump supporter in the 2016 campaign, is one of Palantir’s co-founders. Trae Stephens, a partner at Founders Fund, is an Anduril co-founder.

Anduril’s revenue in 2024 doubled to about $1 billion and annual contract value reached $1.5 billion, the people said.

In 2023, Anduril launched several new drones that rely on its Lattice AI-powered command and control software used by the U.S. military and allies to direct human-assisted robotics systems to perform complex missions. 

WATCH: Anduril co-founder Palmer Luckey talks what a Trump White House means for defense tech

Anduril Co-Founder Palmer Lucky talks what a Trump White House means for defense

Continue Reading

Technology

Hims & Hers faces scrutiny from lawmakers over ‘misleading’ Super Bowl ad

Published

on

By

Hims & Hers faces scrutiny from lawmakers over 'misleading' Super Bowl ad

The New York Stock Exchange with a Hims & Hers Health banner is pictured in the Manhattan borough of New York City.

Carlo Allegri | Reuters

Hims & Hers is facing scrutiny from lawmakers over what they claim is a “misleading” advertisement for its weight loss offerings that’s slated to run during the Super Bowl on Sunday.

Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) wrote a letter to the U.S. Food and Drug Administration on Friday expressing concerns over an “upcoming advertisement” that “risks misleading patients by omitting any safety or side effect information when promoting a specific type of weight loss medication.”

The Hims & Hers ad, which the company released online in late January, is called “Sick of the System” and sharply criticizes the $160 billion dollar weight loss industry. It shows visuals of existing weight loss medications known as GLP-1s, including injection pens that look like Novo Nordisk’s blockbuster diabetes drug Ozempic.

The ad claims those drugs are “priced for profits, not patients,” and points to Hims & Hers’ weight loss medications as “affordable” and “doctor-trusted” alternatives.

“We are complying with existing law and are happy to continue working with Congress and the new Administration to fix the broken health system and ensure that patients have choices for quality, safe, and affordable healthcare,” a Hims & Hers spokesperson told CNBC in a statement.

The senators do not mention Hims & Hers by name in their letter, but they do reference some of the visuals in the ad, including “imagery of an injection pen with distinctive characteristics reflective of an existing brand-name medication.”

“Nowhere in this promotion is there any side effect disclosure, risk, or safety information as would be typically required in a pharmaceutical advertisement,” the senators wrote. “Further, for only three seconds during the minute-long commercial does the screen flash in small, barely legible font, that these products are not FDA-approved.”

Hims & Hers began offering compounded semaglutide through its platform in May after launching a new weight loss program in late 2023. Semaglutide is the active ingredient in Ozempic and Wegovy, which can each cost around $1,000 a month without insurance.

Shares of Hims & Hers jumped over 170% last year, thanks to soaring demand for GLP-1s. They rose another 8% on Friday, lifting the company’s market cap to about $9.5 billion.

Compounded GLP-1s are typically much cheaper and can serve as an alternative for patients that are navigating complex supply hurdles and spotty insurance coverage. Hims & Hers sells compounded semaglutide for under $200 a month.

The FDA doesn’t review the safety and efficacy of compounded products, which are custom-made alternatives to brand drugs designed to meet a specific patient’s needs. Compounded products can also be produced when brand-name treatments are in shortage.

Semaglutide is currently in shortage, according to the FDA.

Sens. Durbin and Marshall said that advertisements for brand-name GLP-1 medications include “significant risk disclosures to patients about side effects and contraindications, including warnings about potential gallbladder, pancreas, vomiting, diarrhea, and other implications.”

A release on Durbin’s website says that the ad in question appears to exploit a loophole “regarding promotions of compounded drugs by telehealth companies.”

The senators said they believe the FDA may have the authority to take enforcement actions against marketing that could mislead patients, and they plan to introduce new legislation to address regulatory loopholes.

WATCH: New study reveals why patients stop taking GLP-1 obesity drugs

New study reveals why patients stop taking GLP-1 obesity drugs

Continue Reading

Technology

Trump delays cancellation of de minimis trade exemption targeting China imports

Published

on

By

Trump delays cancellation of de minimis trade exemption targeting China imports

Employees package and sort express parcels at an e-commerce company on Nov. 1, 2024, around the Double 11 Shopping Festival in Lianyungang, Jiangsu Province of China.

Vcg | Visual China Group | Getty Images

President Donald Trump signed an executive order on Friday that puts a pause on his closing of the de minimis trade exemption, a provision commonly used by Chinese e-commerce companies Temu and Shein.

The order states that de minimis will be restored for small packages shipped from China, “but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue” on those items.

Trump on Saturday suspended the exemption as part of new tariffs that include an additional 10% tax on Chinese goods. The nearly century-old exception, known as de minimis, has been used by many e-commerce companies to send goods worth less than $800 into the U.S. duty-free, creating a competitive advantage.

It was predicted that its removal could overwhelm U.S. Customs and Border Protection employees, as the mountain of low-value shipments already making their way into the U.S. would suddenly require formal processing.

De minimis has helped fuel an explosion in cheap goods being shipped from China into the U.S. CBP has said it processed more than 1.3 billion de minimis shipments in 2024. A 2023 report from the House Select Committee on the Chinese Communist Party found that Temu and Shein are “likely responsible” for more than 30% of de minimis shipments into the U.S., and “likely nearly half” of all de minimis shipments originate from China.

Critics of the de minimis provision say it’s provided an unfair advantage to Chinese e-commerce companies, and created an influx of packages that are “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.

The Biden administration proposed a new rule last September to curb the “overuse and abuse” of de minimis. The rule proposes to strengthen the CBP’s information collection requirements for de minimis shipments.

Continue Reading

Trending