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The Morning Download: NYC Venture Seed Funding Falls; Intel Pay Cuts |
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Good Morning, CIOs. From New York City, a hub for tech startups, comes the latest sign that the pullback in tech stocks and later-stage startups is wending its way down to earlier-stage companies, says the WSJ's Isabelle Bousquette. Seed funding deals for startups fell 30% and total amount of seed dollars fell 48% between the third and fourth quarters, according to a report by VC fund Primary Venture Partners. |
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Cryptocurrency, Web3 and healthcare tech were among sectors where funding fell most from the third quarter, Mr. Svrluga said. Enterprise tech? Mostly ok, says another VC. Jonathan Lehr, co-founder and general partner at enterprise tech VC firm Work-Bench, said he has seen minimal impact on the region's enterprise IT funding landscape with demand high for startups offering developer tools, incident-management software and cybersecurity. Other areas of enterprise tech are vulnerable to cutbacks. |
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Another take. Matt Turck, a partner at venture firm FirstMark Capital said enterprise tech startups are likely to grow at slower rates. “Many will fail or get acquired,” he said. “Sadly, this is just starting, and the moment of reckoning hasn’t even really started.” Read the story. |
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| Intel is targeting $3 billion in cost cuts this year. PHOTO: DAVID PAUL MORRIS/BLOOMBERG |
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Intel CEO takes pay cut. Days after Intel Corp. posted disappointing quarterly earnings, the company said Pat Gelsinger will see his base pay reduced by 25%. Members of the executive team will see base-pay hits of 15% while senior managers will see 10% cuts and midlevel managers 5%. The company also said it was trimming matching contributions to 401(k) plans. Cost-cutting. Intel is targeting $3 billion in cost cuts this year, increasing to as much as $10 billion of annual cost reductions and efficiency gains by the end of 2025, including layoffs. AMD’s profit plunges amid weaker PC sales. The Santa Clara, Calif.-based chip maker reported Tuesday a 98% decline in net income for the fourth quarter. Advanced Micro Devices Inc. said the decline was mostly linked to its acquisition of semiconductor company Xilinx Inc. Revenue for its client segment dropped 51% to $903 million due to weaker demand in the PC market. Revenue from its gaming segment declined 7% to $1.6 billion. Looking ahead, the company said revenue for the first three months of the year is expected to decline about 10% as sales across its client and gaming segments are expected to continue falling. |
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| PagerDuty CEO Jennifer Tejada celebrated her company’s first day of trading on the floor of the New York Stock Exchange in April 2019. PHOTO: RICHARD DREW/ASSOCIATED PRESS |
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CEO who quoted MLK Jr. in layoff email apologizes. “There are a number of things I would do differently if I could,” Jennifer Tejada, CEO of cloud company PagerDuty Inc. wrote in a follow-up email Friday night, three days after she told staff via email that she was cutting 7% of employees. Workday announces layoffs. The cloud software company in a note to employees Tuesday said it will layoff 3% of its employees. CNBC reports that the cuts would affect about 525 people. NetApp to cut 8% of workforce. The cloud data management firm said Tuesday it will cut 960 jobs, some 8% of its workforce, Reuters reports. PayPal to lay off 2,000. The cuts, impacting around 7% of the workforce, will take place in the coming weeks, Bloomberg reports. |
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| OpenAI, which launched ChatGPT in November, recently announced a multibillion-dollar partnership with Microsoft. PHOTO: GABBY JONES/BLOOMBERG NEWS |
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OpenAI releases tool to detect AI-generated text. But there's a catch. The startup behind the viral chatbot ChatGPT admitted that the new tool fails to detect bot-written text nearly three quarters of the time. The company called it a “work-in-progress,” the Journal reports. Tesla confirms DOJ request for Autopilot documents. The Department of Justice and the Securities and Exchange Commission are investigating whether the automaker misled customers and investors about how Autopilot performed. The system, which helps drivers with steering and maintaining a safe distance from other vehicles, is also being investigated by the National Highway Traffic Safety Administration after a series of crashes involving Tesla Inc. vehicles and first-responder vehicles. Elon Musk warned about incoming EU social-media law. Thierry Breton, the EU’s commissioner for the internal market, told Mr. Musk that there were only a few months left before major online platforms like Twitter Inc. will have to be fully compliant with the Digital Services Act. About the DSA. The DSA requires major social-media platforms and search engines to swiftly address illegal content and conduct regular risk assessments. The law carries hefty fines for noncompliance Why the concern. Officials in Europe raised questions last year about how Twitter Inc. could comply with the law after widespread layoffs and departures thinned the ranks of staffers responsible for content moderation. China rule could dent U.S. solar ambitions. Beijing is looking to add advanced technology used in the production of solar panels to a list of technologies that are subject to export controls, the Journal reports. Chinese companies control an estimated 80% of the global supply chain for solar manufacturing and produce nearly half of all the equipment needed to manufacture solar panels. |
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| Everything Else You Need to Know |
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Lackluster earnings reports from some of the biggest companies in the U.S. haven’t put a damper on the stock market’s bounceback. (The Wall Street Journal) A tiny capsule containing radioactive material that sparked a search over hundreds of miles of highway in the Australian Outback has been found, authorities said Wednesday. (The Wall Street Journal) Russia has violated the New START treaty cutting long-range nuclear arms by refusing to allow on-site inspections and rebuffing Washington’s requests to meet to discuss its compliance concerns, the U.S. State Department said in a report sent to Congress on Tuesday. (The Wall Street Journal) |
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