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The number is mind-boggling: $14 billion. That’s how much Ant Financial, the payments and financial services affiliate of Chinese e-commerce giant Alibaba, raised in a private financing that included a who’s who of non-Chinese investors such as Silver Lake, General Atlantic, Temasek, and Carlyle.
The word “Alibaba” doesn’t appear in Ant’s news release, a curious omission given that Alibaba and its managers control the company. Alibaba agreed earlier in the year to convert certain profit-sharing rights into a one-third ownership in Ant, paving the way, along with this fundraising, for an eventual initial public offering of Ant.
But back to the startling size of the offering. It make total sense considering the scope of Ant’s potential. The company’s Alipay digital payments system and other financial services claim 870 million annual active users globally and a financial relationship with 15 million Chinese small businesses. The vast majority of Ant’s business is in China, but it will use the fresh capital for global expansion. Already it has branched into several countries in Southeast and South Asia. Alipay even is accepted in New York City cabs—a nod to the explosion of Chinese tourists.
What makes Ant’s success even more astounding is that it faces a fierce foe at home. Tencent’s WeChat Pay has gained a large chunk of online payments in China, a market Alipay once had more or less to itself. Yet the market is so big and growing so quickly that Ant can raise $14 billion in one gulp.
It’s an important sign of China’s power. Once content to exploit the lucrative domestic market—one protected from foreign competition—its Internet champions are branching out. And they’re carrying plenty of cash in their pockets.
Changing of the guard. Telecom giant Verizon said CEO Lowell McAdam will step down on August 1, seven years after he took over, and become chairman of the board. Moving into McAdam’s corner office will be Hans Vestberg, the former CEO of Ericsson who joined Verizon last year to oversee its 5G efforts. On McAdam’s watch, Verizon bought out its wireless partner, Vodafone, for $130 billion and started to get into the digital publishing business by buying AOL and Yahoo for about $9 billion. Vestberg left Ericsson, where he had worked for 25 years, amid a sharp drop in revenue and profit margins at the telecom equipment maker.
Won’t hurt a bit. After stirring controversy inside and out, Google released a set of principles to govern its work in artificial intelligence. Among the list of promises, Google said it would not design or deploy AI that is likely to cause overall harm or be used for surveillance “violating internationally accepted norms.” Meanwhile lawmakers continue to keep the company in their sights. Some senators plan to criticize the company for its work with Chinese phone maker Huawei.
Smashing success. Shares of newly-public cybersecurity firm Zscaler jumped on Thursday after it said quarterly revenue increased 49% to $49 million and projected total fiscal 2018 revenue of $185 million, both better than Wall Street expected. After going public in March at $16, the shares closed at $37.79 on Thursday.
Unbelievers. Two well known bitcoin skeptics reiterated their skepticism on Thursday. In a joint interview on CNBC, Berkshire Hathaway CEO Warren Buffett and J.P. Morgan CEO Jamie Dimon were asked who hates bitcoin more. “I set a high standard,” Buffett answered. “I don’t know whether Jamie can top me or not.” “I don’t want to be a Bitcoin spokesman,” Dimon added. “Just beware.”
Another one. Scandal du juor for Facebook? A software bug switched the default privacy settings for 14 millions users to “public” for all new posts. “We have fixed this issue and starting today we are letting everyone affected know and asking them to review any posts they made during that time,” chief privacy officer Erin Egan said.
Talk to me. With the audience of cord cutters growing more rapidly than ever, Amazon introduced a revamped video streaming box, dubbed the Fire TV Cube, that also integrates the company’s popular Alexa digital assistant. The 4K-capable device goes on sale June 21 for $120, or $90 for Prime members.
Nailed. The crazy fast, almost impossible microprocessor demo by Intel earlier this week wasn’t quite what it seemed. Intel did not disclose that its 28-core, 5 GHz chip was overclocked to run at a speed much faster than it will run typically, thanks to the use of a massive (and hidden off stage) water cooling device, the web site Tom’s Hardware reported. Intel blamed an accidental oversight for the failure to disclose the overclocking.
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across this week that may be suitable for your weekend reading pleasure.
The Odd Reality of Life Under China’s All-Seeing Credit Score System (Wired)
It might sound like a futuristic dystopian nightmare but the system is already a reality. Social credit is preventing people from buying airline and train tickets, stopping social gatherings from happening, and blocking people from going on certain dating websites. Meanwhile, those viewed kindly are rewarded with discounted energy bills and similar perks.
After the Miracle (The California Sunday Magazine)
For a generation, Americans have been outsourcing work to India, where companies like Infosys grew bigger than Facebook and Google combined and created a new middle class. It seemed as though the boom would last forever.
Behind the Messy, Expensive Split Between Facebook and WhatsApp’s Founders (Wall Street Journal)
How ugly was the breakup between Facebook Inc. and the two founders of WhatsApp, its biggest acquisition? The creators of the popular messaging service are walking away leaving about $1.3 billion on the table.
Tax-Free Storage Wars (Longreads)
Kenneth Cayre, a wealthy real estate developer, and Tom Sapienza, an accountant who’d worked for years in art shipping and handling, were planning their own entrée into the fine art storage business. But instead of operating in the luxury tax haven of Luxembourg, they would open their storage facility in a place not known for its low taxes: New York City.
7 Futuristic Things To Do With Your Body When You Die (Futurism)
Perhaps there’s a way to spice up the traditional burial in our newfound future. Now, we’re not trying to judge anyone’s final wishes. There’s just something so plainly old-fashioned about having your body end up six feed under in a coffin.
FOOD FOR THOUGHT
What if the science-fiction television show Colony is correct and the first aliens we encounter aren’t creatures but some form of artificial intelligence? Some scientists have actually been pondering that possibility for real. Caleb Scharf, director of astrobiology at Columbia University, has written a piece for Aeon considering “what if ET is an AI?” The idea was first raised, Scharf says, by famed mathematician John von Neumann in the 1940s. But an alien AI might be too sophisticated for humans to even identify:
IN CASE YOU MISSED IT
Kevin Hartz Is Stepping Down as Partner at Founders Fund By Polina Marinova
Google’s Free Wi-Fi Project Is Now Powering 400 India Railway Stations By Jonathan Vanian
Every Apple Watch Has This ‘Defect,’ Class Action Lawsuit Says By Don Reisinger
BEFORE YOU GO
Speaking of extraterrestrial life, NASA says its Curiosity rover has found new possible evidence of life on Mars. While examining some three billion year old rocks, Curiosity discovered organic molecules containing carbon and hydrogen and possibly other key elements. Such molecules are produced by all living things, though they can also be created in non-biological processes, the space agency warns. Wonder if they’ll ever know, they’re in the best selling show?