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| Welcome to today's Inside Tech! Here are your top headlines for the day: - Tesla faces a lawsuit for allegedly exaggerating EV ranges.
- Chip design giant Arm is targeting an up to $70B valuation in its September IPO.
- Zelda game and Mario movie drove Nintendo's Q1 revenue to a record high.
- The IRS is planning paperless tax processing by 2025.
Beth
p/beth-duckett | |
| 1 | | Tesla faces a class action lawsuit related to the alleged exaggeration of its electric vehicle range. The lawsuit comes after a Reuters report exposed Tesla's alleged practice of suppressing complaints about its EV performance. Background: - The report claims Tesla altered EV ranges a decade ago, making the ranges look better when fully charged but becoming more accurate under a 50% charge.
- According to Reuters, Tesla used a secret "Diversion Team" to head off complaints about the range.
- The team allegedly sought to silence customers' complaints, attributing range issues to battery degradation and EPA ranges being only predictions.
- It's unclear if Tesla still uses the alleged exaggerations.
Lawsuit: - On Wednesday, three California owners filed a lawsuit, claiming their Teslas fell short of estimated ranges.
- The complaint alleges breach of vehicle warranties, fraud, and unfair competition.
- The plaintiffs are seeking class-action status for all California purchasers of Tesla Model 3, Model S, Model X, and Model Y.
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| 2 | | The new: British chip designer Arm is targeting an IPO valuation of $60B to 70B as early as September, riding the wave of hype surrounding AI chips, according to Bloomberg. The Softbank-owned company aims to raise $8B to 10B through an IPO on Nasdaq, possibly becoming one of the largest tech IPOs of all time, trailing only Alibaba and Meta. Background: Arm's designs are used in almost every smartphone in the world, playing a critical role in chip manufacturing for major semiconductor companies such as Intel, AMD, Nvidia, and Qualcomm. The IPO comes during economic uncertainty and the war in Ukraine, which has led to a dry spell for IPOs. Why it matters: The IPO could be a significant funding boost for Arm, allowing it to expand further into advanced computing, AI applications, and the automotive sector, where it has experienced revenue growth. A successful listing is also important for SoftBank, which acquired Arm for $32B seven years ago and has been facing its own financial challenges. 
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| 3 | | Nintendo reported a record-breaking Q1 profit, driven by the success of "The Super Mario Bros. Movie" and "The Legend of Zelda: Tears of the Kingdom" game. The latter contributed to strong sales of the Switch console in the April-June quarter, with sales of 3.91 million units. More: - Nintendo's net sales in Q1 reached $3.22B, a 50% increase YoY.
- Software sales rose by 26.1%.
- "The Legend of Zelda: Tears of the Kingdom" has sold 18.5 million units and achieved universal acclaim with a score of 96 out of 100 on Metacritic.
- Meanwhile, The Super Mario Bros. Movie has earned $1.35B in revenue and attracted 168.1 million viewers so far.
- Nintendo's strategic use of its intellectual property, including movies and theme parks, resulted in IP- and mobile-related sales tripling.
Zoom out: - The aging Switch still remains popular with a steady stream of hit games. Despite the success, investors are awaiting news about a successor, as the current model has been on the market for seven years.
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| 4 | | The IRS plans to go paperless by 2025, allowing digital submissions of tax returns and other documents. Funded by last year's Inflation Reduction Act (IRA), the "paperless processing" program is expected to cut processing times in half and speed up refunds by several weeks. It's also expected to save up to 200 million pieces of paper annually. More: - In 2024, most taxpayers will be able to submit everything except their tax returns digitally.
- After piloting a new electronic free file tax return system next year, the IRS aims to process everything, including tax returns, digitally by 2025.
- By then an estimated 94% of individual filers won't need to mail tax forms or documents, though they can still submit documents by paper.
- The IRS will also digitize the estimated 1 billion historical documents in its catalog, costing around $40M a year to store.
Zoom out: - The funding comes from an $80B infusion from last year's IRA for the IRS over 10 years, though some money is being cut back.
- Treasury Secretary Janet Yellen said the funding will help reduce the federal deficit by $2.6 trillion over the next decade.
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| 5 | | Phone chip maker Qualcomm's stock plunged by as much as 11% after reporting a lackluster sales forecast and expected layoffs. Qualcomm and other chipmakers have experienced a sharp decline in orders from handset manufacturers during the smartphone market slowdown. The reduced spending on phone components and electronics is expected to continue this year. By the numbers: - In fiscal Q3, Qualcomm's revenue fell 23% to $8.45B.
- Profit fell by more than half to $1.8B.
- Handset chip sales declined 25% YoY to $5.26B.
- The company projects fiscal Q4 sales of $8.1B to $8.9B, versus the $8.79B average analyst estimate.
Zoom out: - Qualcomm makes chips for Android phones and iPhones.
- The world's largest smartphone processor maker is taking steps to cut expenses, increase sales in other areas, and invest in new AI-driven products for phones.
- The current slowdown is particularly evident in China, the biggest market for phones, where demand has not reached forecasts.
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| 6 | | AI helped to detect 20% more breast cancer cases from mammograms compared to screenings by only radiologists, according to early results from a large-scale study. The research, conducted in Sweden with over 80,000 women, also showed that AI lowered radiologist workloads by nearly half. More: - AI analyzed half of the women's scans before being reviewed by radiologists, while the other half were examined by two radiologists alone.
- The AI-assisted group had a 20% higher cancer detection rate (6 per 1,000) than the standard approach (5 per 1,000).
- The AI system had no increase in false positives, suggesting it's safe for breast cancer detection.
- The use of AI also led to a 44% reduction in radiologists' mammogram reading workload.
Zoom out: - Despite a shortage of radiologists globally, the study's lead author still stressed the need for further trials and evaluations before rolling out AI widely.
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- Waymo is expanding its driverless ride-hailing service to Austin, Texas, making it the fourth city after Phoenix, San Francisco, and Los Angeles to receive Waymo One.
- A Moscow court fined Apple 400,000 roubles ($4,274) for failing to remove "inaccurate" content about the Russia-Ukraine war.
- The White House has launched a plan to combat the IT security workforce shortage by partnering with the private sector to boost cyber skills training.
- Microsoft accidentally leaked its internal "StagingTool" app for employees to activate hidden Windows 11 features. The installer is being shared online, functioning similarly to third-party apps like ViveTool, to uncover unreleased features in the OS preview builds.
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 | AI and technology writer | | Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. | | This newsletter was edited by NO ACCOUNT ASSOCIATED WITH THE EDITOR | |
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