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Issue #24

UK fund managers overpaid by £1.5 billion, Apple becomes first $3.5 trillion company, AI virus emails itself to spread, and more.

News from July 4 - July 11, 2024

Microsoft and Apple Leave OpenAI’s Board

Microsoft has stepped down from its observer role on OpenAI's board amid increasing regulatory scrutiny. Despite investing $13 billion in OpenAI, Microsoft believes its board presence is no longer necessary, citing significant progress under the new board led by CFO Sarah Friar. Apple also declined an observer role. 

Instead, OpenAI will hold regular meetings with key partners, including Microsoft and Apple. The move comes as antitrust authorities in the EU and US examine Microsoft's partnership with OpenAI. 

Market experts say Microsoft’s investment has been crucial to OpenAI’s success, providing computing power and cloud storage worth billions of dollars. 


UK Fund Managers Overpaid By £1.5 Billion  

According to a recent analysis, UK pension plans are overpaying £1.5bn annually in fees to fund managers. The study revealed extreme fee disparities, with some plans paying up to 14 times more for identical products. Chris Sier, ClearGlass CEO: "Some clients are being treated bloody unfairly." 

Analysts estimate schemes could save £700mn to £1.5bn annually by securing better deals. 

Mick McAteer, Financial Inclusion Centre: "Some pensions funds were being 'ripped off.'" 

The FCA and The Pensions Regulator emphasize the need for increased transparency and regulatory oversight.


Coffee Prices Set to Increase

The price of coffee is set to rise due to climate change, shipping disruptions, and new EU regulations. Prices have surged by 70% in the past year, with London coffee futures reaching record highs. Italian coffee giant Lavazza predicts coffee prices on UK shelves could increase by another 10% by next year. 

Factors include poor harvests in Vietnam and Indonesia, speculative trading, and higher shipping costs. New EU regulations on deforestation will also push prices up, forcing European roasters to source beans primarily from Brazil, impacting millions of coffee farmers.

Giuseppe Lavazza, chair of Lavazza Group: “Coffee prices are not going to go down, [they’re] going to stay very high.”


Bulletin Board

  • AI Virus Emails Itself to Spread. Two researchers created a highly deceptive virus that changes its code to evade antivirus detection and sends convincing, AI-generated emails with infected attachments. Alan Woodward, cybersecurity expert: "There are various ways we already know that LLMs can be abused." The study highlights the potential risks of AI in cybersecurity, emphasizing the urgent need for further research into intelligent malware and defensive measures. Source 
  • Apple Becomes First $3.5 Trillion Company. Apple shares hit an all-time high on Tuesday, closing at nearly $229 and pushing its market capitalization to over $3.5 trillion, the highest any company has ever achieved. The surge follows the June unveiling of Apple Intelligence, an AI initiative with OpenAI to integrate ChatGPT into its devices. Despite a rocky start to the year, Apple has caught up to and surpassed Microsoft in market value. Analysts predict Apple, Nvidia, and Microsoft could each reach $4 trillion in market cap within a year.  Source 
  • Saudis Threaten to Sell European Bonds. Saudi Arabia announced it might sell European debt holdings if the G-7 confiscated Russia's frozen assets. Initially, the EU approved using profits from Russian assets to support Ukraine, reversing a plan to seize $300 billion in Russian assets as Ukraine had wanted. Saudi Arabia communicated its opposition to G-7 counterparts, specifically mentioning French debt. This situation highlights Saudi Arabia’s growing geopolitical influence and complicates the G-7's efforts to gain support from Global South nations for Ukraine. This move recalls Saudi's 2016 indication to liquidate US Treasuries, demonstrating their ongoing strategic leverage. Source
  • AirBNB Sued For Cameras In Apartments. A lawsuit revealed that a woman was secretly recorded at an Airbnb rental by an alleged voyeur. Airbnb, often settling such cases quietly, disclosed having tens of thousands of surveillance-related support tickets in the past decade. The company typically doesn't notify law enforcement about hidden camera complaints. This incident highlights Airbnb's ongoing struggle with guest safety and privacy. Despite public assurances, hidden cameras remain a persistent issue. Airbnb's internal policies and legal strategies often aim to minimize public exposure and regulatory oversight.  Source 
  • Shein Launches €200 Million Waste Fund. Shein, the online fast-fashion giant, is launching a €200 million “circularity fund” to address fashion waste, targeting startups and established businesses in the UK and Europe. This move aligns with Shein's plans to list its shares in London. Donald Tang, Shein’s executive chair: “Our financial resources, our scale and leverage [means] we can be, and we will be, a significant guinea pig or applicator of these technology or processes.” Amid US-China tensions and allegations of forced labor, Shein is also considering a listing in Hong Kong. Source

Disclaimer: This blog offers insights into international business and global events for informational purposes only. It is not intended as investment or business advice. WeavePay is not liable for any decisions made based on the content provided.

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