Musk’s mission to Cannes
As advertising moguls traveled to southern France this week for the Cannes Lions festival — an annual rosé-filled celebration of their industry — the biggest guest was someone who had crudely told many of them to get lost.
Elon Musk and his top lieutenant, Linda Yaccarino, were on hand to persuade brands to return to X in a bid to bolster their beleaguered ad business. But it’s unclear if their efforts worked.
Musk massaged his expletive-filled comments from November. A reminder: At the DealBook Summit, he lashed out at advertisers who had pulled back from X after he had endorsed an antisemitic conspiracy theory.
When Mark Read, the C.E.O. of the ad giant WPP, asked Musk about the incident onstage on Wednesday, the X owner responded that he wasn’t referring to all advertisers. “Advertisers have a right to appear next to content that they find compatible with their brands,” Musk said. “What is not cool is insisting that there can be no content that they disagree with on the platform.” (He added, “I do shoot myself in the foot from time to time, but at least you know it is genuine, not from the P.R. department.”)
Musk met with top ad executives afterward, reportedly including those from the N.F.L., L’Oreal, Qualcomm and Target. Separately, Yaccarino talked up X initiatives including partnering with NBCUniversal to stream events from the Paris Olympics and showing more sports docuseries.
Some things were working in Musk’s favor. The talk of the town was a recent study by the marketing network Stagwell, which found that ads appearing next to content about politics, inflation and crime perform as well as those shown next to business and entertainment news. In other words, fears about “brand safety” may be overblown.
Musk also touted X’s ability to use artificial intelligence to make advertising more effective, including by better matching users with relevant ads. And he said that his social network remains the hub for discussion of live events: “If you want to reach the most influential people in the world,” X is where to go, he said.
What’s at stake: Yaccarino recently told X employees the company was winning back advertisers, but big ones were still staying away. That’s putting pressure on the company’s finances, as it labors under a big debt load.
The verdict on Musk and Yaccarino’s efforts is still out. Thousands flocked to the WPP event to hear from Musk. And Read said that the X chief appeared to show an understanding of brand safety.
But unnamed ad executives told Ad Age they remained wary, given Musk’s antagonism toward social issues they cared about.
Others felt bummed after hearing his thoughts on A.I., which he suggested could do marketing executives’ jobs better than they can. “You’re supposed to inspire people, not tell them they’re not going to have a job,” Read said.
HERE’S WHAT’S HAPPENING
The Bank of England leaves interest rates at 5.25 percent. The move was widely expected just two weeks before Britain’s general election, and with consumer prices remaining under pressure despite inflation falling to the central bank’s 2 percent target. The decision was announced after the Swiss National Bank this morning lowered its prime lending rate for the second time this year.
A cyberattack stalls U.S. car sales. CDK Global, a software provider to thousands of dealerships nationwide, reported on Wednesday that it had to shut down its systems for hours after an incident. The company did not disclose the cause, but there have been a series of high profile cyberattacks on businesses in recent weeks.
Instagram is said to recommend inappropriate content to children. New academic research found that the photo-sharing app shared sexual videos with 13-year-olds, The Wall Street Journal reports, despite executives having said that the service would give teens more age-appropriate content. The news comes as some researchers pushed back at calls by Dr. Vivek Murthy, the U.S. surgeon general, to impose a warning label on social media over its potential for adverse effects on children’s mental health.
Golden Goose blames Europe’s economic and political uncertainty for delaying its I.P.O. The Italian luxury footwear brand said snap elections in France and the results of European Parliament elections had caused a “significant deterioration” in market conditions. It probably didn’t help that Francesco Pascalizi, an executive at the private equity giant Permira and one of Golden Goose’s biggest backers, got cold feet, The Financial Times reports.
Rising heat, cooling interest
The record-setting heat wave that’s been scorching the Midwest and the Northeast is expected to linger into early next week, triggering health warnings as triple-digit temperatures bake some cities and are expected to test the electricity grid.
The presummer blast — the solstice arrives on Thursday — coincides with a new report that planet-warming greenhouse gas emissions hit a record last year, despite growing investment in renewable energy. It also comes as Wall Street’s commitment to sustainable investing has come under strain amid a red-state pushback and pullback by climate investors.
A reminder: Last year was the hottest globally in modern times. Rising temperatures have been anything but gradual, with heat waves getting hotter, longer, deadlier and costlier. Each summer, the U.S. spends roughly $1 billion on heat-related health care costs.
Yet climate is increasingly sitting on the back burner. The economy, immigration and social issues are topping voters’ lists of concerns. (If re-elected, Donald Trump would likely demote it even further as a priority.)
Wall Street isn’t embracing the issue as much as it used to. Finance giants have largely withdrawn from international climate treaties and sought to water down rules around climate disclosure, The Times’s Lydia DePillis writes:
What explains this apparent disconnect? In some cases, it’s a classic prisoner’s dilemma: If firms collectively shift to cleaner energy, a cooler climate benefits everyone more in the future. But in the short term, each firm has an individual incentive to cash in on fossil fuels, making the transition much harder to achieve.
And when it comes to avoiding climate damage to their own operations, the financial industry is genuinely struggling to comprehend what a warming future will mean.
Some investors are backing off, too. Climate-related shareholder proposals have been losing investor support in recent years, according to a recent RBC Capital Markets research note. That was true even before Exxon Mobil sued two activist investors in January over their shareholder proposal that called on the energy giant to accelerate its carbon emission reduction plans. (The investors withdrew their initiative.)
A.I. boom vs. A.I. safety
Investor enthusiasm for artificial intelligence isn’t abating. Neither are questions about how the technology will be deployed. After months of speculation, Ilya Sutskever, a top researcher who left OpenAI last month, unveiled a new safety-first A.I. start-up on Wednesday.
That comes just after Nvidia, which dominates the market for A.I. chips, became the world’s most valuable public company.
Sutskever’s post-OpenAI future had been a talking point. He co-founded OpenAI, but helped oust Sam Altman as C.E.O. last year over concerns that Altman couldn’t be trusted to run a company that’s working to create a machine that could supersede human intelligence.
Sutskever later backed Altman’s return, but Sutskever’s own exit was probably inevitable.
The new company’s goal is to safely create an A.I. system that is more intelligent than humans. But Sutskever told Bloomberg that his new venture, Safe Superintelligence, exists as a research lab and has no plans to sell its services or products.
“It will be fully insulated from the outside pressures of having to deal with a large and complicated product and having to be stuck in a competitive rat race,” he said.
How to achieve that is less clear. Sutskever didn’t reveal his financial backers or how much he’s raised. His co-founders are Daniel Gross, who worked on A.I. at Apple and is now a tech investor, and Daniel Levy, who worked with Sutskever at OpenAI. Gross was also a partner at Y Combinator, the tech incubator that Altman ran.
Safe Superintelligence’s founding principles sound familiar. OpenAI was started with similar aims, but the company went on to raise billions and partnered with Microsoft and others, partly because it needed the money and access to Big Tech’s data to build its A.I.
It’s unclear how Safe Superintelligence will confront the same challenges that OpenAI did.
The founders’ reputation may be enough to attract investors. Companies that are seen as leading in the field are powering a wide market rally. Nvidia’s market value has soared roughly eightfold to $3 trillion in less than two years, propelling it past Microsoft and Apple.
And Start-ups, from OpenAI to France’s Mistral, are raising huge amounts of money at massive valuations.
Some businesses are fighting back. Forbes has threatened legal action against Perplexity, accusing the A.I. search unicorn of stealing text and images without permission, Axios reports. Perplexity’s C.E.O. defended its chatbot as a product that has some “rough edges.” But a Wired investigation suggests that Perplexity’s problems are more than a glitch.
(The New York Times has sued OpenAI and its partner, Microsoft, claiming copyright infringement of news content related to training A.I. systems.)
THE SPEED READ
Deals
Elections, politics and policy
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A new poll found President Biden leads Donald Trump. It also shows approval levels on Biden’s handling of the economy reaching their highest level since January 2021 — albeit at just 32 percent. (Fox News)
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The presidential campaign of Robert Kennedy Jr. raised just $2.6 million last month, showing his reliance on his wealthy running mate, the lawyer Nicole Shanahan. (NYT)
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The White House’s pick to lead the F.D.I.C., Christy Goldsmith Romero, appears to have the votes to win Senate confirmation — but Republicans are likely to slow down her approval. (Reuters)
Best of the rest
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A close look at David Autour, the college dropout turned labor economist who’s now influencing White House economic policy and its views on A.I.’s social impact. (WSJ)
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Who’s behind Trump’s mysterious DJT crypto token? The “pharma bro” and convicted fraudster Martin Shkreli is claiming credit — and says Trump’s youngest son, Barron, is involved. (MarketWatch)
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Why ‘Baby Reindeer’ and Other ‘True Story’ Netflix Shows Keep Landing in Legal Trouble” (Variety)
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