Alibaba Group plans to split itself into six independent businesses. The Chinese e-commerce giant made the announcement a day after its founder, Jack Ma, was spotted in mainland China for the first time in over a year. Each new business unit will have the ability to raise outside funding and go public. More: - In a statement, Alibaba said the move is designed to unlock shareholder value and foster market competitiveness.
- Following the announcement, Alibaba shares jumped more than 9% in pre-market trading.
- The six business groups are: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group.
- Each business unit will have its own CEO and board of directors.
- Taobao Tmall Commerce Group will remain wholly owned by Alibaba.
- Alibaba was once valued at more than $800B at its peak in October 2020. The company now has a market cap of about $250B.
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FTX co-founder Sam Bankman-Fried now faces a bribery charge in addition to the dozen other charges levied against him by the DOJ. Bankman-Fried is accused of paying at least $40M in cryptocurrency bribes to at least one Chinese government official to influence them to unfreeze some accounts owned by Bankman-Fried’s hedge fund, Alameda Research. More: - A new indictment containing the bribery charge was unsealed Tuesday.
- Alameda Research was the target of a freezing order by the Chinese police in November 2021.
- The frozen accounts are alleged to have contained about $1B worth of cryptocurrency.
- Alameda Research used the unfrozen assets to continue to fund its loss-generating trades.
- FTX and Alameda collapsed in November 2022 after concerns about their balance sheet triggered a sort of bank run on the crypto exchange.
- Bankman-Fried faces a federal indictment and civil charges from both the SEC and the Commodity Futures Trading Commission (CFTC).
In related news: - Earlier Tuesday, Bankman-Fried’s lawyers said they had reached an agreement on Monday with prosecutors for revised bail terms.
- Under the new agreement, he would have use of a cell phone with no internet capability and a laptop computer with limited functions and monitoring software.
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French authorities raided several banks in Paris on Tuesday as part of the “Cum-Ex” tax evasion scandal. The banks searched included BNP Paribas, Société Générale, HSBC, and Natixis, as well as BNP Paribas’s brokerage firm Exane. More: - The raids are connected to five preliminary investigations launched in 2021 on alleged money laundering and tax fraud charges related to dividend payments.
- There have also been raids and investigations in Germany connected to the Cum-Ex scandal.
- The Cum-Ex scandal was a dividend arbitrage scheme where shareholders transferred stock for a short period to investors based abroad to avoid a dividend tax.
- Investors then held the shares during the period when dividends were paid out and either weren’t taxed or taxes were refunded.
- Investors then sold the securities back to the original owner, and the amount saved was split between the parties.
- The Cum-Ex tax evasion scheme is estimated to have cost EU taxpayers at least €55B (~$60B).
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Several multinational companies, including U.S.-based Intel and Raytheon Technologies, Germany’s BASF SE and Siemens, Japan’s Panasonic, and U.K.-based AstraZeneca, signed a letter addressed to the European Commission warning about the bloc’s new rules for reporting foreign subsidies. The firms warned that the requirements of the new foreign subsidy rules are onerous and could disrupt mergers and acquisitions and hamper public offerings. More: - The companies noted that they supported the general goal of the rules but stressed that the commission underestimated the amount of work required to comply with them.
- The foreign subsidy rules give EU regulators new tools to prohibit companies from making certain acquisitions or winning large public contracts if they previously benefited from government aid that the commission believes was distortive.
- It’s part of a broader effort by the EU to protect its economic interests.
- EU lawmakers also recently reached an agreement on another tool to address economic coercion.
- The tool would make it easier for the bloc to retaliate against countries that try to use trade or investment restrictions as a pressure tactic.
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FTC Chair Lina Khan has promised to protect competition in the budding market for artificial intelligence tools. Khan, while speaking at the 2023 Annual Antitrust Enforcers Summit on Monday, said it is often during times of technological transition that large incumbent firms start to panic and resort to anticompetitive tactics to protect their dominance. More: - Khan said U.S. regulators and enforcers need to be vigilant to ensure this doesn’t become another opportunity for big companies to become bigger and suppress rivals.
- DOJ antitrust chief Jonathan Kanter expressed the same sentiments as Khan, noting it is important to ensure competition in the AI market.
- The Annual Antitrust Enforcers Summit is a daylong forum co-hosted by the FTC and the DOJ.
- Both agencies share authority to enforce U.S. antitrust laws.
- San Francisco-based research firm OpenAI kicked off the recent interest in AI tools after it released its image-generation tool called Dall-E 2 and, more recently, its chatbot ChatGPT.
- In January, Microsoft made a multiyear, multibillion-dollar investment in OpenAI and has added the firm’s AI tools to its relaunched Bing search engine.
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Lyft announced on Monday that the company’s co-founders, CEO Logan Green and president John Zimmer, would step down from their executive management positions effective April 17. Green and Zimmer will transition to the roles of chair and vice chair, respectively, of the company’s board effective June 30. More: - Former Amazon head of U.S. retail David Risher will succeed Green as CEO on April 17.
- Lyft’s current board chair Sean Aggarwal will step down from the role but remain on the board.
- Green and Zimmer founded Lyft in 2012 and took the company public in 2019.
- Following news of the changes, Lyft shares rose more than 4% during extended trading on Monday.
- Lyft shares have declined more than 70% in the last year.
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- According to sources, Beyoncé and Adidas have ended their partnership after years of lower-than-expected sales for her Ivy Park apparel line.
- Chipotle Mexican Grill has agreed to pay $240,000 to former employees at an Augusta, Maine, location. The restaurant is accused of closing the location when workers tried to unionize.
- According to a recent study by researchers at the University of Pennsylvania and OpenAI, about 20% of the U.S. workforce could be impacted by the capabilities of generative artificial intelligence.
- Russian President Vladimir Putin plans to station tactical nuclear weapons in neighboring Belarus.
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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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