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| Here's your daily business briefing. - 🖥️ Hewlett Packard Enterprise acquires Juniper for $14B
- 🛍️ Holiday shopping embraces thrift trend
- 🤖 OpenAI debuts custom AI chatbot store
Thanks for reading!! Shriram
p/Shriram | |
| 1 | | Hewlett Packard Enterprise ($HPE) announced the acquisition of Juniper Networks ($JNPR) in a $14B deal, with HPE offering $40 per share in cash, a 32% premium over Juniper's pre-report stock price. The transaction is anticipated to be financed through $14B in commitments from Citigroup, JPMorgan, and Mizuho, with a portion replaced by new debt, preferred securities, and cash from HPE's balance sheet. More: - Through the acquisition, cloud services company HPE hopes to grow its networking business twofold and solidify its edge-to-cloud strategy.
- Based in Sunnyvale, California, Juniper offers equipment and communications-network services, such as switches and routers, and runs an artificial intelligence company called Mist AI.
- The Palo Alto-based firm anticipates the acquisition will boost HPE's networking division revenue from 18% in 2023 to around 31%.
- Although there will likely be more tech M&A activity in 2024, this deal is among the first notable deals of the year.
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What the numbers say: A total of 124 fashion brands offering resale programs in the U.S. in 2022, 30 times more than in 2018. About 85% of U.S. shoppers bought or sold secondhand items in the past year, with nearly a third doing so for the first time, and global secondhand apparel is expected to reach 10% by next year. Relevance: The acceptance of secondhand gifts is growing due to environmental concerns and budget-friendly options, with thrift stores expanding online and offline. Major fashion brands like Patagonia are establishing profitable resale platforms. This action contributes to the expectation that resale by brands and third parties will surpass traditional thrift sales and donations in the U.S., reaching 60% of a $70B total by 2027. More data: Fashion brands, like H&M and Zara, are pushing resale as a sustainable alternative to combat the industry's up to 8% contribution to global emissions. Based on Salesforce data, around 17% of presents this Christmas season are anticipated to be used goods. As this trend expands, brands focus on controlling distribution, maintaining shopper trust, and addressing operational challenges for profitable resale scaling, presenting an opportunity for a significant impact in this space for retailers. | | | |
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| 3 | | OpenAI has introduced the GPT Store, a marketplace for AI chatbot apps using models like GPT-4 and DALL-E 3, accessible through the ChatGPT web client. Subscribers to premium plans like ChatGPT Plus, Enterprise, or Team can access GPTs developed by OpenAI's partners and the broader developer community, covering lifestyle, writing, research, programming, and education categories. More: - Using OpenAI's GPT Builder tool, developers can design GPTs without coding knowledge by describing required features in simple terms.
- An AllTrails trail recommender, a Khan Academy code teacher, and a Canva content creator are some of the GPTs that will be accessible at launch.
- Although OpenAI intends to launch a "GPT builder revenue program" in Q1, enabling American builders to get paid based on user engagement, GPT developers are initially not allowed to charge for their work.
- OpenAI has implemented a review system, combining human and automated processes to uphold GPT compliance with terms of use and ensure user safety.
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| 4 | | Alphabet quantum spin-out SandboxAQ, an AI and quantum company, has completed the acquisition of Good Chemistry for approximately $75M in cash and stock. The move aligns with SandboxAQ's focus on commercial applications of quantum technology and AI, particularly in molecular simulations. More: - Based in Vancouver, Good Chemistry is a spinoff of 1QBit, employing quantum technology and machine learning to predict and simulate chemical properties.
- Arman Zaribafiyan, the CEO of Good Chemistry, will take a position as head of product for AI simulation systems at SandboxAQ.
- Through the agreement, SandboxAQ will serve a more extensive clientele and incorporate Good Chemistry's product into its line of enterprise applications.
- The acquisition highlights a mutual commitment to leveraging quantum computing for simulating material behavior at the molecular level, especially in drug discovery and material development.
- Good Chemistry is SandboxAQ's second acquisition after it acquired cybersecurity and encryption startup Cryptosense in 2022.
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| 5 | | Honda ($HMC) plans to introduce the "Honda 0 Series," a new electric vehicle lineup, beginning in 2026, aligning with the company's goal of an all-EV and fuel-cell vehicle portfolio by 2040. The announcement was made at CES, where Honda revealed two concept models under the 0 Series with plans for a global rollout, emphasizing the North American market. More: - By 2040, Honda wants all its new automobile sales to come from battery- and fuel-cell-powered vehicles.
- Approximately 11,000 battery-powered vehicles were sold in the first nine months of 2023, representing less than 0.5% of Honda's global sales.
- The new EV line is part of Honda's larger aim to launch 30 battery-powered cars and generate 2 million EVs annually by 2030.
- According to CEO Toshihiro Mibe, Honda is considering constructing a nearly $14B electric car plant in Canada in addition to the new EV series.
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| 6 | | News startup The Messenger, co-founded by Jimmy Finkelstein, seeks a $20M cash infusion due to financial challenges since its May launch. Initially planning ambitious hiring and revenue goals for 2024, the company now targets profitability through cost-saving measures, including cutting 40 positions and implementing 15 employee furloughs. More: - With profitability expectations, the prediction predicts a spike in advertising income from $3.8M in 2023 to over $55M in 2024.
- In November and December, The Messenger received 88 million and 100 million page views, respectively, indicating a 30% monthly growth in traffic.
- The business, which had $667,000 at the end of December and anticipates going into negative cash territory by the end of January, admits to having severe cash flow issues.
- Messenger intends to develop Messenger TV, which will require 19 more personnel, and maintain high expenditure levels across the board despite the financial difficulties.
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- In a speech in Boston, Treasury Secretary Janet Yellen pointed out the 28% drop in TV prices from their peak, an 11% decrease in used cars and trucks, and a nearly $2 per gallon reduction in gasoline since June 2022.
- Amazon is cutting hundreds of jobs in its film and TV studio and Twitch streaming platform to control costs.
- The Fed's preferred inflation measure, the PCE price index, at 2.6% annually in November, is expected to take two more years to reach the targeted 2%, according to the latest projections.
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 | 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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