Musk's mission to Cannes
Some of the biggest names in advertising descended on the south of France this week for the Cannes Lions festival — the annual rosé-filled industry extravaganza — but their biggest guest was the person who rudely told many of them to get out.
Elon Musk and his top executive, Linda Yaccarino, were on the scene trying to convince brands to return to X in an effort to shore up the company's struggling advertising business, but it's unclear whether their efforts were successful.
Musk has since amended his expletive-filled comments from November. Remember: At the DealBook Summit, he slammed advertisers who pulled out of X after it endorsed anti-Semitic conspiracy theories.
When advertising giant WPP CEO Mark Read asked Musk about the incident on stage on Wednesday, the X owner said: all Advertisers have the right to advertise next to content they believe is appropriate for their brand. “It's no good trying to say there can't be content on your platform that you don't agree with,” Musk said. (He added, “Sometimes you shoot yourself in the foot, but at least you know it's real and not a PR department thing.”)
Musk then met with top advertising industry executives. Those reportedly include the NFL, L'Oreal, Qualcomm, and Target. Yaccarino also spoke about X's efforts, including partnering with NBCUniversal to stream events from the Paris Olympics and airing more sports documentary series.
Some things worked in Musk's favor. A recent study by marketing network Stagwell made waves: it found that ads placed next to content about politics, inflation and crime performed just as well as ads placed next to business or entertainment news. In other words, concerns about “brand safety” may be overblown.
Musk also touted X's ability to use artificial intelligence to make advertising more effective, including better matching users with relevant ads. He also said his social network will remain at the center of discussions around live events, saying, “If you want to reach the most influential people in the world, you go to X.”
What's at stake: Yaccarino recently told employees at X that the company is winning back advertisers, but that larger players are still shying away from it, and that the company's heavily indebted finances are under pressure.
The verdict on Musk and Yaccarino's efforts is still out. Thousands of people flocked to the WPP event to hear Musk speak, and Read said he seemed to demonstrate an understanding of brand safety.
But anonymous advertising executives told Ad Age they remain wary, given Musk's hostility toward social issues they care about.
Others were put off by his thoughts on AI, which he suggested could do the jobs of marketing executives better than they could. “Your job is to inspire people, not tell them they're going to lose their jobs,” Reid said.
What's going on?
The Bank of England kept interest rates unchanged at 5.25%. The move was widely expected just two weeks before the UK general election, and comes as consumer prices remain under pressure despite inflation falling to the central bank's 2% target. The decision was announced after the Swiss National Bank this morning cut its prime lending rate for the second time this year.
Cyber ​​attacks stall US auto sales. CDK Global, which provides software to thousands of dealerships across the country, said on Wednesday it had to shut down its systems for several hours after an incident. The company did not say what caused it, but it follows a series of large-scale cyberattacks against businesses in recent weeks.
Instagram is said to promote inappropriate content to children. Despite executives at the photo-sharing app saying it provides age-appropriate content for teens, a new academic study has found that the app has shared sexually explicit videos with kids as young as 13, according to The Wall Street Journal. The news comes as some researchers push back against U.S. Surgeon General Dr. Vivek Murthy's call for warning labels on social media for its potential negative effects on children's mental health.
Golden Goose blames economic and political uncertainty in Europe for IPO delay The Italian luxury shoe brand said the results of the French and European elections had caused a “significant deterioration” in market conditions, exacerbated by the backlash from Francesco Pascalizi, an executive at private equity giant Permira and one of Golden Goose's biggest backers, the Financial Times reported.
Heat rising, interest cooling
A record heat wave battering the Midwest and Northeast is expected to continue into early next week, with temperatures reaching triple digits in some cities and prompting health warnings as power grids are expected to be tested.
The pre-summer heatwave, with the summer solstice arriving Thursday, coincides with a new report that found emissions of planet-warming greenhouse gases hit a record high last year despite increased investment in renewable energy. It also comes at a time when Wall Street's sustainable investing efforts are under pressure due to a backlash from Republican-leaning states and a retreat by climate investors.
Note: Last year was the hottest in recent memory. Temperatures are rising steadily, and heat waves are getting hotter, longer, deadlier, and more expensive. The U.S. spends about $1 billion each summer on medical costs related to heatstroke.
But climate issues are increasingly being pushed to the back burner. The economy, immigration and social issues top voters' concerns (though Donald Trump is likely to further lower these issues as priorities if re-elected).
Wall Street is no longer as happy about the issue as it once was. Big finance has largely withdrawn from international climate treaties and is seeking to relax rules on climate disclosure, writes The Times' Lydia DePilis.
What explains this apparent disconnect? In some cases, it's a classic Prisoner's Dilemma: if companies collectively transition to cleaner energy, a cooler climate in the future will be more beneficial for everyone. But in the short term, each company has its own incentive to profit from fossil fuels, making the transition much harder to achieve.
And the financial industry is trying hard to understand what a warming future means for avoiding climate damage to its own operations.
Some investors are pulling out. Climate-related shareholder proposals have been losing investor support in recent years, according to a recent research report from RBC Capital Markets, even before energy giant Exxon Mobil sued two activist investors in January over a shareholder proposal to speed up plans to reduce carbon emissions (the proposal was later withdrawn by the investors).
The AI ​​boom and AI safety
Investor enthusiasm for artificial intelligence remains strong, as do questions about how the technology will be deployed. After months of speculation, Ilya Sutskever, a leading researcher who left OpenAI last month, announced a new safety-first AI startup on Wednesday.
This comes shortly after Nvidia, which dominates the AI ​​chip market, became the world's most valuable publicly traded company.
There has been talk of Sutskever's future after leaving OpenAI. He is a co-founder of OpenAI, but helped oust Sam Altman as CEO last year over concerns that Altman could not be trusted to run a company working to develop machines with superior human intelligence.
Although Sutskever later supported Altman's return, Sutskever's own departure was probably inevitable.
The new company's goal is to safely build AI systems that are more intelligent than humans. But Sutskever told Bloomberg that his new venture, Safe Superintelligence, exists as a research lab and has no plans to sell any services or products.
“It will be completely insulated from the external pressures of having to deal with large, complex products and being involved in competitive situations,” he said.
How to achieve that is less clear. Sutskever declined to disclose who funded it or how much it raised. Its co-founders are Daniel Gross, who worked on AI at Apple and is now a tech investor, and Daniel Levy, who worked with Sutskever at OpenAI. Gross was also a partner at Y Combinator, the tech incubator run by Altman.
The founding principles of Safe Superintelligence are well known. OpenAI was founded with a similar goal, but it has raised billions of dollars and partnered with the likes of Microsoft, in part because it needed money and access to the data of big tech companies to build its AI.
It's unclear how Safe Superintelligence will address the same challenges as OpenAI.
The founders' reputation may be enough to attract investors. The sector's top players are driving the broader market rally: Nvidia's market capitalization has soared roughly eightfold to $3 trillion in less than two years, surpassing the likes of Microsoft and Apple.
And startups from OpenAI to France's Mistral are raising huge amounts of money at huge valuations.
Some companies are fighting back. Forbes has threatened legal action against AI search unicorn Perplexity for stealing text and images without permission, Axios reports. Perplexity's CEO defended the company's chatbot as a “rough” product. But a Wired investigation suggests Perplexity's problems go beyond simple glitches.
(The New York Times sued OpenAI and its partner Microsoft, alleging copyright infringement of news content about training AI systems.)
Speed ​​Read
Bargain Deals
Elections, politics, policies
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A new poll shows President Biden leading President Donald Trump. It also shows that Biden's approval rating for his economic policies has reached its highest level since January 2021, albeit at just 32%. (Fox News)
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Robert Kennedy Jr.'s presidential campaign raised just $2.6 million last month, revealing its reliance on his wealthy running mate, lawyer Nicole Shanahan. (NYT)
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Christy Goldsmith Romero, the White House nominee to head the FDIC, appears to have the votes to win Senate confirmation, but Republicans are likely to delay her confirmation. (Reuters)
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Learn more about David O'Toole, the college dropout and labor economist who now influences White House economic policy and views on the societal impact of AI. (WSJ)
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