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  • ๐Ÿ‘— Amazon Rivals Shein in Fashion / ๐Ÿš— Tesla Targets 5M Cars in Texas / ๐Ÿค– Musk's X.AI Secures $1B Funding

๐Ÿ‘— Amazon Rivals Shein in Fashion / ๐Ÿš— Tesla Targets 5M Cars in Texas / ๐Ÿค– Musk's X.AI Secures $1B Funding

Amazon plans to slash seller fees for clothing items priced below $20, initiating a price competition with Chinese fast-fashion brand, Shein.

Welcome to our December 6th tech briefing!

Today's top stories include Amazon's competitive move against Shein, Tesla's ambitious production plans in Texas, and ByteDance's massive buyback.

  • Fashion Faceoff - Amazon challenges Shein with reduced fees.

  • Tesla's Texas Plan - Aiming for 5 million revolutionary $25K cars.

  • Twitch's Korean Exit - Departing due to high internet costs.

  • ByteDance Buyback - A colossal $268 billion repurchase strategy.

  • Uber's Pickup Perk - Enhancing holiday shopping with store pickup.

  • Musk's AI Move - X.AI secures a whopping $1 billion in funding.

  • ChatGPT Upgrade - Offering extended output for a premium.

  • Labor Market Equilibrium - Balancing growth with inflation concerns.

  • ARR Growth Trend - Net new ARR showing signs of rebound.

  • PlayStation Ban Puzzle - Unexpected bans reversed, creating confusion.

  • and moreโ€ฆ

Read on to keep your finger on the pulse of the tech world!

Tech Companies

Amazon plans to slash seller fees for clothing items priced below $20, initiating a price competition with Chinese fast-fashion brand, Shein. Starting in January, merchandise under $15 will have associated fees reduced to 5%, while those priced between $15 to $20 will see fees lowered to 10%. The strategic move intensifies Amazon's appeal to merchants offering low-cost apparel, widely dominated by Shein.

๐Ÿ’ก Why this matters: This move by Amazon indicates a strategic shift towards winning over budget-conscious consumers and suggests a potential escalation in competition within the low-price apparel market. Additionally, it also poses challenges for other online marketplaces and fast fashion brands that rely on competitive pricing.

Tesla is on the brink of producing a $25,000 car, otherwise known as the robotaxi, aimed to redefine the automotive market. These next-generation vehicles are to be produced at an unprecedented scale, with recently revealed plans of producing 5 million units annually. Initiation of the production has been redirected from Giga Mexico to Giga Texas due to logistical improvements. The new car technology emerges from Tesla's Gen-3 platform and its production is expected to commence in the next 12 to 18 months.

Twitch, a well-known video streaming service, has announced its withdrawal from South Korea due to exorbitant network fees. Despite efforts to mitigate costs, including employing a peer-to-peer model and lowering streaming quality, the Amazon-owned platform reported operating at a significant loss with no sustainable future prospects. South Korea's high internet costs have been a point of contention, with Netflix also previously falling foul of the region's usage charges.

ByteDance Ltd., TikTok's parent company, has offered to buy back up to $5 billion from investors at a valuation of $268 billion, a figure 11% lower than its 2022 valuation. The firm, in the face of increasing scrutiny and setbacks, has remained one of the world's most valuable start-ups, with a broad international user base despite withdrawal from ventures outside its core business.

Uber has introduced a "Store Pickup" feature, allowing customers to arrange for couriers to collect purchases for delivery to a recipient. Accessible via the Uber Connect feature, customers must upload proof of purchase, and items must be under $200, weigh less than 30 lbs, and comply with restrictions. The service is available in 1,500 locations.

AI Corner

Elon Musk's artificial intelligence startup, X.AI, aims to secure $1 billion in an equity offering, after successfully amassing nearly $135 million from four investors. The firm, which seeks to understand the universe, recently unveiled Grok, a chatbot with advanced features that competes head-on with other AI systems such as OpenAI's ChatGPT, Google's Bard, and Anthropic's Claude. The company's team consists of individuals from renowned tech giants such as DeepMind, OpenAI, Google Research, Microsoft Research, Twitter, and Tesla.

Programmer Theia Vogel revealed that the AI model, ChatGPT, produces longer responses when offered a monetary tip. Through several tests, Vogel discovered a correlation between the promised tip amount and the length of the chatbot's response, with a $200 tip receiving 11% longer responses. Critics cast doubt on the effectiveness of this strategy, but this discovery highlights the unique learning opportunities provided by large internet-based datasets used for training AI models.

Microsoft's Copilot is scheduled to adopt OpenAI's latest models, GPT-4 Turbo and an improved DALL-E 3, promoting better understanding of queries and improved responses. The forthcoming features also include a new code interpreter that aids in precise calculations and data analysis, along with deep search functionality in Bing that enables optimized search results for complex topics.

Markets & Money

Shares in Asana Inc. plummeted over 12% despite recording higher-than-expected earnings and revenue for its fiscal third quarter. The decline was prompted by the company's warning about macroeconomic difficulties ahead. Despite reporting an adjusted net loss of $8.2 million, Asana's revenue increased by 18% to $166.5 million, led by robust growth among enterprise customers. However, the company cautioned that ongoing market headwinds are affecting its renewal base and extending deal cycles.

The U.S. labor market is showing signs of healthy rebalancing after pandemic-induced extremes. New data reveals a drop in job vacancies in October with minimal impact on layoffs, pointing to a steady recovery. The rate of job openings to unemployed workers eased to 1.3 from a peak of 1.2 pre-pandemic, showing steady market balancing. Concurrently, the services sector showed steady growth with the Institute for Supply Management's index marking a 52.7% expansion in November.

ByteDance Ltd., the owner of TikTok, plans to buy back up to $5 billion from investors at a $268 billion valuation. Despite 11% lower than their previous offer, this would still rank ByteDance among 40 most valuable public companies globally, and third in China. However, plans for an IPO have faced setbacks, including a crackdown on internet firms in China, overseas scrutiny, and a ban in India.

Apple's $3 trillion market cap exemplifies its agility amid slightly slower growth and looming challenges. Despite projecting no annual revenue growth for the December quarter, forthcoming product launches, including the Vision Pro virtual reality headset, remain promising.

Insights & Analysis

Net New ARR growth is rebounding, indicating that software headwinds may have bottomed out. Amazon and Snowflake suggest that Cloud Optimizations are giving way to net new workload growth as customers grow tired of diminishing returns from cost optimizations and start to prepare for the integration of new technologies such as AI and ML.

๐Ÿ’ก Why this matters: The rebound in net new ARR growth suggests a revival in the software industry's momentum. Recent comments from Amazon and Snowflake hint businesses are now focusing less on cost optimization and increasingly on new workload, including AI and ML technologies, potentially reshaping market strategies.

Apps & Gadgets

Anker's Qi2-compatible wireless chargers are set to provide 15W fast charging for new iPhone devices. These chargers have the same max rate as Appleโ€™s own MagSafe gear but no Qi2 certified products are available yet.

Messaging startup Beeper has launched an app that allows Android devices to use Apple's iMessage. Beeper Mini's direct iMessage sending improves security and integrates seamlessly with text conversations.

Unexplained permanent suspensions hit PlayStation Network accounts recently, yet were mysteriously restored by Tuesday. Notably, Sony has not commented on these occurrences.

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