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| Hello Insiders!! Today’s Business newsletter covers: - 💰 Amazon invests $4B in AI startup
- ☕ Deep Dive: Coffee industry faces existential threats
- 👟 Nike falls on consumer spending, China concerns
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading for Quick Hits and the Knowledge Hub. Thank you!! Shriram
p/Shriram | |
| 1 | | Amazon plans to invest up to $4B in the AI firm Anthropic to improve its position in generative artificial intelligence. In this agreement, Anthropic will relocate its software to Amazon Web Services (AWS) data centers and utilize AWS's chips for AI model training, marking one of Amazon's most significant initiatives in its AWS business and addressing its apparent shortfall in generative AI capabilities. More: - Anthropic, a company created by former employees of OpenAI, specializes in developing safer chatbots and AI systems and has already raised over $1B.
- Anthropic focuses on generative AI, which has the potential to automate tasks and change the economy by producing text and images that resemble human beings.
- The collaboration will use Anthropic's AI models and AWS's cloud computing capabilities to improve consumer experiences.
- Following the announcement, Amazon stock rose 1.6%.
Q: Would this strategic investment make Amazon more competitive with Google and Microsoft in generative AI? Join the conversation here. |     | |
| 2 | | 
What the numbers say: One in 10 Americans, or 31.4 million, are active users of the company's U.S. Starbucks Rewards program. It wants to increase the number of its global locations from 37,000 to 45,000 by 2025 and 55,000 by 2030, with a particular emphasis on China. Chinese local rivals like Luckin Coffee and Cotti Coffee have multiplied; Luckin has about 11,000 outlets. Relevance: Starbucks confronts fierce competition from domestic and foreign businesses in the fiercely competitive coffee market, notably in China. Starbucks' growth aspirations are focused on entering China, but it faces competition from established brands like McDonald's and KFC and upstarts like Luckin Coffee and Cotti Coffee. More data: Starbucks investors have seen impressive returns over the previous 40 years, increasing their money by almost 300 times. As the number of coffee shops in China is expected to surpass that in the U.S. by 2025, Luckin Coffee and Cotti Coffee have been opening them at an astounding rate. The market for coffee in China is increasing quickly for well-known companies, including Starbucks, KFC, Pizza Hut, McDonald's, and Tim Hortons. | | | |
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| 3 | | Jefferies analysts have downgraded Nike stocks due to concerns about a potential squeeze on U.S. consumer spending and continued problems in China. A recent internal survey revealed that almost 90% of respondents with student loan debt expressed concerns about their ability to pay their monthly bills, potentially leading to spending cuts on various items, including clothing, footwear, accessories, dining out, and large-ticket items. More: - Jefferies downgraded Nike, Foot Locker, and Urban Outfitters from "buy" to "hold."
- According to Oxford Economics, U.S. consumers could see a drop in spending of up to $9B in October due to the return of student loan payments.
- Analysts also emphasized difficulties in China, where sales patterns may remain ambiguous.
- As a result of the news, Nike's shares fell 0.3%, marking a fall of seven trading periods in a row.
- Michael Wilson of Morgan Stanley issued a cautionary statement, stating that risks could soon become more significant for consumer companies, which have been performing well.
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| 4 | | Sierra Space, a subsidiary of Sierra Nevada Corporation, is close to completing a funding round of nearly $300M, placing its valuation at around $5B. CNBC reported that the round will be officially announced shortly, with crucial participation from Japanese investors MUFG, Kanematsu, and Tokio Marine, as well as previous investors and insiders. More: - Two years ago, with a valuation of $4.5B, Sierra Space successfully raised $1.4B in financing.
- The business is concentrating on developing the Dream Chaser spacecraft, intended for personnel and cargo journeys to low Earth orbit.
- Delays in the development of the Vulcan rocket by United Launch Alliance have impacted the launch schedule for Dream Chaser.
- In addition, Sierra Space is working on commercial space station projects and has 2026 set aside for a demonstration voyage of its LIFE habitat.
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| 5 | | Nissan's CEO, Makoto Uchida, emphasized its strong commitment to electric mobility by announcing that all its future European models will be electric and stating the company's intent to sell only EVs in Europe by 2030. One of the two new EV models announced for Europe will be produced at the U.K.'s Sunderland facility, although questions linger regarding potential 10% tariffs on EU-U.K. EV trade due to Brexit laws. More: - By the fiscal year ending March 31, 2027, Nissan wants 98% of its European sales to be electrified (fully electric or hybrid).
- As Chinese automakers compete with Nissan in the market for electric vehicles, Nissan is constantly attempting to cut costs.
- Nissan intends to deploy 19 new electric vehicle models by 2030; however, the exact dates remain unknown.
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| 6 | | Inceptio Technology, a Chinese startup, has advanced autonomous long-distance trucking by traveling more than 50 million kilometers without a mishap. Their vehicles use radar, lidar, cameras, and in-cabin technology to achieve Level 3 assisted driving, which reduces driver fatigue by 35%, saves fuel (2–3 liters per 100 kilometers), and enables one driver to handle routes that formerly required two. More: - Nestle, Budweiser, and China Post are just a few of the companies for which Inceptio has built a statewide freight network in China.
- Although the logistics sector offers prospects for autonomous driving, it also creates difficulties because of the larger vehicles and greater stopping distances.
- To develop its trucks, the company collaborates with the manufacturers Dongfeng Commercial Vehicle and China National Heavy Duty Truck Group.
- JD Logistics, Meituan, and Sequoia Capital China have all invested in Inceptio.
- By 2025, Inceptio hopes to turn a profit, and during the next five years, it plans to develop Level 4 autonomous truck driving.
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- Amazon is opening two new facilities in Virginia Beach, including a robotics fulfillment center set to launch in 2025 and a delivery station ready for the 2024 holiday season, with plans to employ over 1,000 people.
- In August, new home sales in the U.S. declined by 8.7% compared to July, reaching a seasonally adjusted annualized rate of 675,000 units, as reported by the U.S. Census Bureau.
- The Tennis Channel and the Professional Pickleball Association have teamed up to promote pickleball, with The Tennis Channel acquiring broadcast rights and establishing a 24/7 streaming channel.
- According to Anu Aiyengar, global head of mergers and acquisitions at JPMorgan Chase & Co., investors have about $2T available for investments, with $100B to $150B designated for India.
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Term of the Day Influencer marketing: Influencer marketing utilizes social media personalities, bloggers, vloggers, and other content creators to promote a brand or product. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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