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Elon Musk is leaving the board of OpenAI

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A prominent tech nonprofit called OpenAI announced that Tesla CEO Elon Musk, a co-founder and occasional A.I. fearmonger, is leaving its board.

Musk said in 2014 that AI is “potentially more dangerous than nukes,” and when OpenAI was introduced in December 2015, Musk and other organizers played up the organization’s intent to develop technology that could help people and focus on safety.

“As Tesla continues to become more focused on AI, this will eliminate a potential future conflict for Elon,” OpenAI wrote in a blog post. The organization said that Musk will continue to advise and donate to the nonprofit.

Researchers affiliated with the organization regularly publish AI research papers and release source code for other people to use. Unlike Tesla — and companies like Facebook and Google that conduct extensive AI research — OpenAI doesn’t sell any products.

Elon Musk is known for taking on one world-changing tech challenge after another. Besides serving as the CEO of both SpaceX and Tesla, he also co-founded Hyperloop, which develops super fast tube-transportation systems, the Boring Company which digs tunnels, and the brain science venture, Neuralink.

It may come as a relief to investors that he is taking back the two percent of his time that he previously said he spent on OpenAI, to focus on things like launching re-usable rockets, and getting all the electric — and autonomous — vehicles he’s promised into customers’ hands.

In the fall of 2016, Elon Musk promised prospective customers and investors that vehicles with Tesla’s “Hardware 2” (HW 2.0) sensors would be capable of fully autonomous driving with software upgrades in 2019. So far, the company has not come close to delivering a level 5 self-driving system. Nobody has.

Tesla has also made tweaks to the hardware that enables its advanced driver-assistive features.

The EV maker is also seen as lagging the competition — especially Alphabet-owned Waymo and GM-owned Cruise — when it comes to real-world test drives of its self-driving cars in its home state of California. However, Tesla has stated that it is conducting test drives out of state, at closed tracks and via simulation, instead.

In June Tesla hired a prominent AI researcher, Andrej Karpathy, away from OpenAI and made him its head of AI and Autopilot vision. In December Karpathy was present when Musk talked publicly for the first time about Tesla’s plans for special chips that are designed to handle AI workloads. Google and Intel have also developed AI chips.

Musk has also invested in other AI companies, DeepMind and Vicarious.

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Hasbro, Mattel monitor China shipping delays as holiday season nears

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A shopper wearing a face mask due to the coronavirus disease (COVID-19) pandemic browses toys at a Target store in King of Prussia, Pennsylvania, November 20, 2020.

Mark Makela | Reuters

There may be fewer boxes under the tree this holiday season, as toymakers grapple with the possibility of a massive shortage in everything from dolls and action figures to vehicles and puzzles.

The coronavirus pandemic created a bottleneck in the global transportation pipeline, which was later worsened by the blockage of the Suez Canal in March. These shipping delays have hit almost every industry, including electronics, apparel and food.

Exacerbating these troubles is a fresh wave of Covid outbreaks in China. All the while, inventory continues to pile up, leading to manufacturing delays. With shipping containers scarce — or worse, more than double pre-pandemic prices — toymakers are faced with tough decisions ahead of the industry’s most important sales season.

“We’re not seeing any panic yet about the flow of holiday goods,” said Jefferies analyst Stephanie Wissink.

She noted that toy companies are just entering the ramp-up period of production for products that ship in September and October for the holidays.

“If we see persistent constraints into late-summer, then we will start to worry a bit more,” Wissink said.

Currently, the industry is seeing delays of two to three weeks, Wissink said. This is consistent with a report from Davidson analyst Linda Bolton Weiser that was published Friday, although Weiser said delays could be as long as a month.

Weiser told CNBC that the toy industry has faced shipping challenges in the past and persevered. She noted that several years ago, there was a workers strike at the Port of Los Angeles that threatened holiday sales.

“Toy stocks tanked, but [Christmas] went off without a hitch,” she said. “Toy companies were able to get their toys loaded on the tops of freighters and unloaded the fastest.”

Weiser said her most recent chat with Mattel a few days ago indicated the company was “still quite confident about their sales growth for the year.”

Representatives for Hasbro and Mattel did not immediately respond to CNBC’s request for comment.

Toy companies are keeping a careful eye on developments overseas, hoping that pressure on the ports will loosen as vaccines are more widely distributed globally, outbreaks are more isolated and more air traffic routes reopen.

For now, toy companies have not passed on additional shipping costs to the customer, Wissink said. However, there is always a possibility that this could change if the shipping situation does not alleviate.

“We note that holiday purchases are very much oriented toward gifting so price sensitivity is somewhat less,” she said. “That said, consumers will notice if there’s a dramatic increase in prices, but we don’t expect that at this stage.”

Both Mattel and Habro shares were recently trading down more than 1% on Friday. Mattel’s stock has gained nearly 9% since January, putting its market value at $6.64 billion. Hasbro’s stock is down 3% year to date, which puts its market value at $12.5 billion.

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How influencers fit into Twitter’s plans to double revenue

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Twitter CEO and Co Founder, Jack Dorsey addresses students at the Indian Institute of Technology (IIT), on November 12, 2018 in New Delhi, India.

Amal KS | Hindustan Times | Getty Images

Twitter’s been on a creator-focused tear.

The company announced its first subscription service earlier this month, called Twitter Blue. It now lets people tip select users through the app, and the company acquired newsletter platform Revue to allow creators to publish and monetize newsletters. It’s also rumored to be close to launching its Super Follows feature, which would allow some users to charge others for select content.

All of this comes after the company set an ambitious goal to double its revenue by the end of 2023 and grow its user base to 315 million daily active users. But it appears creator cuts won’t make a material impact on the company’s revenue anytime soon.

All of Twitter’s current bets in the creator space can be thought of as a type of insurance or a hedge, in case there is a smart way to make money through creator cuts (aside from advertising), Laundry Service head Jordan Fox told CNBC.

“Every platform CEO thinks: what if direct, platform-facilitated creator monetization explodes as a market? What if it goes from a niche offering to a massive revenue driver comparable to or larger than advertising is today? What if we miss it?” Fox later added in an email. “Putting fee structures around this stuff now is the hedge against that scenario.”

Look to Instagram. The social media company said it would temporarily waive fees on its creator monetization products. However, Fox said there’s a reason it wasn’t framed as a free product.

“What if the market becomes huge, and Instagram wants or needs to participate economically? They need to be ready for that, unlikely as it may seem today,” Fox said. Currently, more than 50 million people globally consider themselves creators, according to a report from venture firm SignalFire, and it’s the fastest-growing small business segment.

It’s a creator’s world

Every social media giant has started making bets on creators.

Instagram chief Adam Mosseri recently told CNBC that its parent company, Facebook, wants to have millions of creators making a living through its family of apps. Snapchat will allow users to tip some of its most popular creators, and the company regularly pays people for posting popular content on its short-form video service. Pinterest also introduced a creator fund for a small group of users.

Despite the subscription business model serving as one way to diversify Twitter’s revenue streams, the company still makes most of its money from ads. According to its first-quarter earnings report, advertising makes up more than 86% of Twitter’s revenue.

“Twitter’s core revenue stream will remain its ads business for the foreseeable future. Any money made from creator cuts will be supplementary income for the company,” Jasmine Enberg, eMarketer senior analyst at Insider Intelligence, told CNBC in an email.

EMarketer said it expects Twitter’s worldwide ad revenue to grow 28.7% to $4.03 billion in 2021, after traffic acquisition costs. A social media company’s ad inventory only has value when people voluntarily spend hours a day on the platform. And people do that, mainly, to view content posted by creators.

“Twitter’s value proposition to advertisers is its highly engaged user base. Creators are major drivers of user engagement on social media, and Twitter’s new creator-focused features can help the company attract and retain creators. The end goal is to boost user engagement in order to incentivize advertisers to invest more in the platform, thus increasing Twitter’s ad revenues,” Enberg added.

Social media companies still need creators. And they need them more than the artists need the social media companies.

“You see a lot of experimentation right now where the platforms are flirting with trying to directly monetize creators, but they also don’t want to overstep and alienate them,” Fox said.

That means that while these social media companies want to bring in supplemental revenue through creator cuts, they have to tread carefully. If a company, for example, takes too much of a cut, a creator could decide to focus their time on other apps. The social media company could then, in turn, lose that person’s stream of content and not make a cut of revenue and miss out on advertising dollars.

“For creators whose stock in trade are words and ideas, Twitter has always been the center of the universe, and they’re making smart strategic decisions to keep it that way,” Fox added.

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10% to 20% correction may be underway due to inflation: Mark Zandi

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Moody’s Analytics Mark Zandi has a message for investors: Brace for a significant market correction.

The firm’s chief economist expects a more hawkish Federal Reserve will spark a 10% to 20% pullback.

And, unlike the sharp drops over the past several years, Zandi anticipates a quick recovery won’t be in the cards particularly because the market is richly valued. He estimates it could take a year to return to break even.

“The headwinds are building for the equity market,” Zandi told CNBC’s “Trading Nation” on Friday. “The Federal Reserve has got to switch gears here because the economy is so strong.”

He suggests the correction may already be underway because investors are starting to get spooked.

The Dow just saw its biggest weekly loss since October 2020, tumbling 3.45%.The broader S&P 500 saw its worst week since late February. The tech-heavy Nasdaq also had a losing week, but it’s just 1.28% off its all-time high.

Despite his market warning, Zandi believes the economy will avert a recession because the downturn is more about risk asset prices getting overextended than a serious fundamental issue.

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“The economy is going to be rip-roaring,” he said. “Unemployment is going to be low. Wage growth is going to be strong.”

Zandi has been ringing the alarm on inflation for months.

On “Trading Nation” in early March, Zandi asserted inflation was “dead ahead” and investors weren’t fully grasping the risks. According to Zandi, it’s still a problem affecting stock market and bond investors. Zandi sees little chance the benchmark 10-year Treasury Note yield will keep falling.

“I wouldn’t count on rates staying at 1.5% for very long given what’s going on,” he added.

Stocks and bonds aren’t the only risk assets catching his attention. Zandi also sees more trouble brewing in the commodities and cryptocurrency sell-offs. Plus, he’s worried about the sustainability of a strong housing market amid higher mortgage rates.

“Inflation is going to be higher than it was pre-pandemic,” Zandi said. “The Fed has been struggling for at least a quarter of a century to get inflation up, and I think they’ll be able to get that.”

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