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GM Loses $500 Million on Cruise in Second Quarter as It Begins Charging for Rides

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By Reuters | Updated: 27 July 2022

General Motors has lost nearly $5 billion (roughly Rs. 40,000 crore) since 2018 trying to build a robotaxi business in San Francisco, and now as the automaker’s Cruise unit starts charging for rides, the losses are accelerating.

GM said on Tuesday it lost $500 million (roughly Rs. 4,000 crore) on Cruise during the second quarter – more than $5 million (roughly Rs. 40 crore) a day – as it began charging for rides in a limited area of San Francisco.

Cruise’s costly effort to transform autonomous driving technology from a long-term research project to a profit-spinning business comes as investors are backing away from riskier bets on technology, and reassessing how soon robot vehicles of any kind will be deployed in large scale on public roads.

Shares of autonomous vehicle technology company Aurora Innovation Inc, for example, are down 80 percent for the year to date. Shares of robo-trucking company TuSimple Holdings have lost more than 70 percent of their value. Some automakers, including Ford Motor, have scaled back investments in automated vehicle units, or taken on partners to share the costs.

Tesla Inc has missed deadlines to deploy software to enable what it calls “full self driving” capability as regulators investigate accidents involving its Autopilot assisted driving system.

Cruise’s losses for the first six months of the year deepened to $900 million (roughly Rs. 7,200 crore) from $600 million (roughly Rs. 4,800 crore) during the same period in 2021 – when Cruise was not charging for rides. Higher compensation costs to keep staff on board after putting aside plans for an IPO were one factor in the results, GM executives said.

Chief Executive Mary Barra said on Tuesday she is still bullish on Cruise, and reaffirmed a forecast that the unit could generate $50 billion (roughly Rs. 3,99,420 crore) a year in revenue from automated vehicle services and technology by 2030.

But turning the losses around will depend on some factors GM cannot control, including winning approval from California regulators to greatly expand Cruise’s hours of operation, and widening the territory covered by its automated taxis.

GM said in an investor presentation the permit from San Francisco was “a major event” in pursuing the $50 billion (roughly Rs. 3,99,420 crore) target.

Cruise in February petitioned US auto safety regulators to grant exemptions to deploy up to 2,500 self-driving vehicles without human controls like steering wheels and brake pedals. The National Highway Traffic Safety Administration (NHTSA) last week published the petition and opened it for public comment for 30 days.

Scaling up

GM wants to deploy the Origin, a vehicle with subway-like doors and no steering wheels, for both rideshare and delivery operations.

Reports of accidents involving Cruise automated cabs and brief traffic tie-ups caused by Cruise-operated Chevy Bolt electric cars could complicate that effort, as will opposition from San Francisco transit unions. NHTSA said earlier this month it opened a special investigation into a recent crash of a Cruise self-driving vehicle in California that resulted in minor injuries.

During a call with analysts on Tuesday, Barra and Cruise’s chief executive, Kyle Vogt, portrayed the losses at Cruise as investments in scaling up a business with enormous growth potential.

“When you’ve got the opportunity to go after a trillon-dollar market, you don’t casually wade into that,” Vogt said. “Aggressively pursuing the market is a competitive advantage.”

Barra said Cruise and GM plan to offer a more detailed explanation of the strategy to turn a profit at an event in San Francisco in September.

But some analysts were skeptical.

“Can this unit (or any other AV/robotaxi effort) scale without exacerbating the losses?” Morgan Stanley analyst Adam Jonas asked in a note. “We are fans of autonomy with a 10- to 20-year view, but believe investor expectations are due for a major reset. “

Cruise is not in immediate need of cash. GM said the robotaxi unit has $3.7 billion (roughly Rs. 29,600 crore), and a $5 billion (roughly Rs. 40,000 crore) credit facility from GM’s financial arm dedicated to buying automated Cruise Origin electric vehicles from the automaker.

However, that cash would run out in less than two years if Cruise keeps burning money at the current rate.

Asked whether Cruise could consume even more cash as it tries to grow next year, Barra told analysts they will have to wait for an answer until a Goldman Sachs conference in September.

“I would say we are going to make sure we fund Cruise and the spending is done in such a way that we can gain share and have a leadership position,” Barra said. “We have plans that we’re taking cost out as well, as the technology matures.”

© Thomson Reuters 2022

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Apple’s App Store Missing From List Mobile Storefronts Submitting Filings to China’s CAC Under New Rules

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A total of 26 app stores operated by companies including Tencent, Huawei, Baidu, Xiaomi and Samsung have submitted filings to the authority.
By Reuters | Updated: 27 September 2023

China’s cyberspace regulator released on Wednesday names of the first batch of mobile app stores that have completed filing business details to regulators, signalling it has begun to enforce new rules that expand its oversight of mobile apps.

A total of 26 app stores operated by companies including Tencent, Huawei, Ant Group, Baidu, Xiaomi and Samsung have submitted filings to the authority, according to the Cyberspace Administration of China (CAC).

Apple’s App Store is not among the app stores on the list. Apple did not immediately respond to Reuters’ request for comment.

China’s cyberspace regulator released on Wednesday names of the first batch of mobile app stores that have completed filing business details to regulators, signalling it has begun to enforce new rules that expand its oversight of mobile apps.

A total of 26 app stores operated by companies including Tencent, Huawei, Ant Group, Baidu, Xiaomi and Samsung have submitted filings to the authority, according to the Cyberspace Administration of China (CAC).

Apple’s App Store is not among the app stores on the list. Apple did not immediately respond to Reuters’ request for comment.

In August this year, the Ministry of Industry and Information Technology published another notice requiring mobile apps to complete filing by the end of March.

Earlier this month, Reuters reported that app stores operated by companies including Tencent and Huawei have started demanding apps on their app stores comply with the new rules.

Apple has not disclosed how its app store in China will comply with Beijing’s new rules. Experts said Apple’s compliance could lead to tens of thousands of apps being removed from Apple’s App Store in China.


© Thomson Reuters 2023

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JPMorgan’s UK Bank Chase to Ban Crypto Transactions After Increase in Scams

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JPMorgan has attracted more than 1.6 million customers to its Chase retail bank since launching the mobile app-based service in Britain two years ago.
By Reuters | Updated: 27 September 2023

JPMorgan’s British retail bank Chase will ban crypto transactions made by customers from October 16 due to an increase in fraud and scams, the company said on Tuesday.

“We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account,” a spokesperson for the bank said.

Chase has become the latest lender in the UK to restrict customers’ access to crypto amid long-running concerns over its use in online scams run by criminals.

JPMorgan has attracted more than 1.6 million customers to its Chase retail bank since launching the mobile app-based service in Britain two years ago, and plans to roll out the consumer bank in other international markets over time.

Chase informed customers of its planned policy change by email on Tuesday morning, the bank confirmed. Crypto media outlet Coindesk reported the move earlier on Tuesday.

In March, NatWest (NWG.L) imposed new limits on the daily and monthly amount customers can send to crypto exchanges, seeking to protect consumers from “crypto-criminals.”

Spain’s Santander said last year it would block UK customers from sending real-time payments to crypto exchanges as part of measures to protect customers from scams.

Last month, payments giant PayPal announced that it would stop allowing UK customers to buy cryptocurrencies through its platform from October as it worked to comply with new rules on crypto promotions.

Britain’s financial regulator is due to bring in tougher rules to limit how crypto is advertised to British consumers, including requiring crypto firms to carry warnings about the risk and scrapping “refer a friend” bonuses.

© Thomson Reuters 2023

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Chipmaker ASML to set up base in Japan’s Hokkaido to support new Rapidus plant

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Chipmaker ASML to set up base in Japan's Hokkaido to support new Rapidus plant
By Reuters | Updated: 26 September 2023

TOKYO, Sept 26 (Reuters) – Dutch semiconductor equipment maker ASML (ASML.AS) plans to set up a base in Japan’s northern island of Hokkaido to support production at a chip plant for Japanese startup Rapidus, the company said on Tuesday.

An ASML spokesperson said the company will have a customer support team for Rapidus, but could not immediately confirm staff numbers. Nikkei, which first reported the news, said that 50 ASML engineers will install an ASML “EUV” machine on a prototype line in Chitose City, Hokkaido.

“We always have engineers that support our systems in our customers’ fabs,” the ASML spokesperson said, referring to customers’ factories.

Rapidus, which broke ground on its plant in Chitose City on Sept. 1, is receiving billions of yen in funding from the Japanese government as it seeks to break into the market for manufacturing custom-made, leading-edge microchips.

Rapidus is aiming to manufacture chips at the 2 nanometre process node, which will require using ASML’s most advanced EUV, or extreme ultraviolet, lithography tools to help create the circuitry of chips.

TSMC, Samsung, Intel and memory chip specialists SK Hynix and Micron currently manufacture using ASML’s EUV tools.

The Nikkei report said ASML is also expanding its existing support base for TSMC, which is building a major plant in Kumamoto in Japan.

© Thomson Reuters 2023

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Israeli tech firms raised $1.7 bln in Q3 in sign of stabilisation -report

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Israeli tech firms raised $1.7 bln in Q3 in sign of stabilisation -report
By Reuters | Updated: 26 September 2023

JERUSALEM, Sept 26 (Reuters) – Israeli high-tech firms raised $1.7 billion in the third quarter, preliminary data showed on Tuesday, in a sign that investment in startups is stabilising.

The amount raised in the third quarter was down 38% over the same period in 2022 but only 14% lower from the second quarter, the IVC Research Center and LeumiTech said in a report.

It noted that full quarterly data will be issued in October.

Israeli tech companies have raised $5.3 billion so far this year, with $1.9 billion coming in the second quarter. In all of 2022, tech firms raised nearly $16 billion, mainly in the first half before the global economic slowdown, higher interest rates and weak stock markets hit.

The Israeli government’s plan to overhaul the country’s judiciary has also harmed fundraising, with many investors wary and vocal about the country’s democratic health.

“We continue to see in the third quarter data the first signs of stabilisation in the amount and scope of fundraising, data that bring us back to the levels of 2018-19,” said LeumiTech CEO Maya Eisen Zafrir.

“In addition, we recognise a stabilisation in the rate of follow-on investments, an indication that the companies are beginning to adjust their value to the new interest rate environment.”

© Thomson Reuters 2023

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Mexico eyes US energy exports from solar farm, chip supply chain role

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By Reuters | Updated: 26 September 2023

TAIPEI, Sept 26 (Reuters) – Mexico’s northern state of Sonora wants to export clean energy to California and Arizona from a massive new solar farm project and play a role in the chip supply chain given TSMC’s (2330.TW) $40 billion investment in Arizona, Sonora’s governor said.

The first phase of the Puerto Penasco solar plant in the sprawling border state, which boasts some of the highest temperatures in the country, was inaugurated in February as part of Mexican President Andres Manuel Lopez Obrador’s flagship solar push, which officials have said could boast four additional plants.

During a visit to Taiwan, Sonora Governor Alfonso Durazo said the “Plan Sonora” solar energy project would not only help improve domestic connectivity to the national grid, but also to export to the United States.

“Not only Arizona, but also California. It’s part of its objective,” he told Reuters on Monday. “We want to convert our state into an exporter of clean energy, particularly for semiconductor and electric vehicle industries.”

Durazo said he would be meeting major Apple (AAPL.O) supplier Foxconn (2317.TW) while he was in Taipei to discuss possible investment in his state, though was not planning to meet TSMC.

Foxconn, which has made electric vehicles a major part of its future development strategy, has large operations in Mexico but no plants in Sonora.

“Our interest in Foxconn is in establishing semiconductor plants, and also, eventually, factories of some or all the stages of e-mobility,” added Durazo, who is only visiting Taiwan on this overseas trip.

Durazo said he would like a TSMC chip plant in his state, and that he would be visiting the Hsinchu Science Park, where the chipmaker does much of its manufacturing in Taiwan.

“Assuming as a natural complement of all these processes of relocation of investment in Arizona, we also see TSMC as an obvious option for Sonora state,” he said.

Foxconn and TSMC both declined to comment.

Sonora also boasts major lithium deposits, which Lopez Obrador formally nationalised in Mexico earlier this year.

Mexico has yet to begin production of the metal, which is a key component for EV batteries.

To facilitate production, Durazo underlined that private investors would be able to partner up with the incipient national lithium company LitioMx on the condition they established supply chains in Sonora.

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OpenAI’s ChatGPT will ‘see, hear and speak’ in major update

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OpenAI's ChatGPT will 'see, hear and speak' in major update
By Reuters | Updated: 26 September 2023

Sept 25 (Reuters) – OpenAI’s ChatGPT is getting a major update that will enable the viral chatbot to have voice conversations with users and interact using images, moving it closer to popular artificial intelligence (AI) assistants like Apple’s (AAPL.O) Siri.

The voice feature “opens doors to many creative and accessibility-focused applications”, OpenAI said in a blog post on Monday.

Similar AI services like Siri, Google (GOOGL.O) voice assistant and Amazon.com’s (AMZN.O) Alexa are integrated with the devices they run on and are often used to set alarms and reminders, and deliver information off the internet.

Since its debut last year, ChatGPT has been adopted by companies for a wide range of tasks from summarizing documents to writing computer code, setting off a race amongst Big Tech companies to launch their own offerings based on generative AI.

ChatGPT’s new voice feature can also narrate bedtime stories, settle debates at the dinner table, and speak out loud text input from users.

The technology behind it is being used by Spotify (SPOT.N) for the platform’s podcasters to translate their content in different languages, OpenAI said.

With images support, users can take pictures of things around them and ask the chatbot to “troubleshoot why your grill won’t start, explore the contents of your fridge to plan a meal, or analyze a complex graph for work-related data”.

Alphabet’s Google Lens is currently the popular choice to gain information on images.

The new ChatGPT features will be released for subscribers of its Plus and Enterprise plans over the next two weeks.

© Thomson Reuters 2023

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