Several large U.S. banks have deposited $30B in First Republic Bank to provide liquidity and ease concerns that it would collapse like Silicon Valley Bank. According to sources, JPMorgan, Citigroup, Bank of America, and Wells Fargo were in talks to deposit $5B each of their own funds into First Republic. More: - 11 U.S. banks contributed to the $30B that was eventually deposited to First Republic.
- Other banks who contributed total include Morgan Stanley, Goldman Sachs, U.S. Bancorp, PNC Financial, and Truist Financial.
- Amid panic over the collapse of SVB, big banks got an influx of billions of dollars in deposits from midsize lenders, including First Republic.
- According to sources, the $30B deposit could be structured so that the banks would effectively be giving back some of the money they received from First Republic depositors.
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The Biden Administration has asked TikTok’s parent company ByteDance to sell its stake in the video-sharing app or risk the popular social media app being banned in the U.S. ByteDance is a Chinese company based in Beijing. The request comes amid growing concerns that TikTok poses a national security risk to the U.S. and its U.S. users. More: - According to sources, the Committee on Foreign Investment in the U.S. (Cfius) made the sale demand recently.
- Responding to the sale demand, TikTok said selling stakes in the company would not address the perceived security risk.
- TikTok CEO Shou Zi Chew said divesting the company from its Chinese owners would not offer any more protection than the multibillion-dollar plan it has already proposed.
- The plan includes storing U.S. users’ data in the U.S. and protecting U.S. users from Chinese government access or influence on content shown on the app.
- Chew is a Singaporean military-officer reservist and former Goldman Sachs banker.
- He is expected to appear before the U.S. Congress next week.
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The European Central Bank raised its benchmark interest rate by 50 basis points on Thursday, bringing it to 3%. The increase comes despite recent turmoil and volatility in the global banking system following the collapse of Silicon Valley Bank and concerns over Credit Suisse. More: - ECB President Christine Lagarde signaled that some council members wanted to stop increasing rates until there was more clarity on the current situation.
- The majority of the council still voted for the planned 0.5% increase to show confidence in the eurozone banking system.
- The ECB said that eurozone banks were resilient and had strong capital and liquidity positions.
- The central bank added that it had the tools to provide financial support if needed.
- The U.S. Federal Reserve is expected to meet next week.
- Fed Chair Jerome Powell had previously signaled future rate hikes following the Jan. 31-Feb.1 meeting.
- Last month, the U.S. central raised rates by 0.25%., bringing its benchmark interest rate to 4.5% to 4.75%.
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MindGeek, the parent company of Pornhub, is being acquired by Ethical Capital Partners, a new private equity firm in Ottawa, Canada. Ethical Capital was formed in 2022 and is led by cannabis entrepreneur Rocco Meliambro and criminal lawyer Fady Mansour, who is listed as managing partner. The terms of the deal were not disclosed. More: - According to traffic analytics firm Similarweb, Pornhub was the 12th most visited website in the world in 2022.
- PornHub’s parent company MindGeek is legally headquartered in Luxembourg but runs most of its operations in Montreal, Canada.
- MindGeek is facing multiple lawsuits over sexually explicit videos of minors found on its YouTube-esque tube sites, which rely on user-uploaded content.
- In August, Visa and Mastercard announced they would stop working with MindGeek after a court ruling said the payment companies could be liable for illegal content on Pornhub.
- In its most recent published financial results from 2018, MindGeek generated about $460M in revenue with profit margins near 50%.
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The U.K. unveiled its Spring Budget on Wednesday with several tax and spending pledges for the next five years. U.K. Finance Minister Jeremy Hunt announced that the nation’s independent Office for Budget Responsibility does not expect the U.K. to enter a recession in 2023 as previously predicted. More: - The new budget has provisions that impact various sectors of the U.K. economy, including the labor market, pensions, childcare, defense, and business investment.
- The U.K. government aims to revitalize the country’s stagnating economic growth prospects.
- Inflation in the U.K. is expected to fall from 10.7% in Q4 2022 to about 2.9% by the end of 2023.
- Despite the changes, the living standards in the U.K. are expected to fall over the two years to the end of March 2024.
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Microsoft plans to include OpenAI’s generative artificial intelligence technologies in its Microsoft Office 365 suite products. Last month the tech giant launched a new version of its Bing search platform with a chatbot powered by OpenAI’s GPT-4 language technology. More: - The new AI feature, Copilot, will be included in several Microsoft business apps, including Word, PowerPoint, and Excel.
- Copilot is built on a type of AI software known as a large language model, or LLM.
- Microsoft said the new Copilot in Word would give users a first draft to edit and iterate, saving hours in writing, sourcing, and editing time.
- On Tuesday, OpenAI released the latest version of its primary large language model, GPT-4.
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- On Thursday, French President Emmanuel Macron’s government bypassed Parliament and invoked special constitutional powers to increase the country’s retirement age from 62 years old to 64 years old.
- Google plans to increase the price of its YouTube TV product from $65 a month to $73 a month, citing rising content costs. The new price goes into effect in April.
- According to bankruptcy court filings, FTX co-founder and former CEO Sam Bankman-Fried withdrew more than $2B from FTX. Bankman-Fried and five members of his inner circle transferred $3.2B to their personal accounts.
- The six largest Wall Street banks have lost nearly $165B in market value this month, representing about 13% of their combined value. The sell-off comes following the collapse of SVB and Signature and concerns of a contagion that could spiral out of control.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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