Good morning, unless you’re Shein CEO Chris Xu, whose newly public company debuted in Hong Kong with a thud.
Shares of the China-founded company fell by as much as 10%, to about 44 Hong Kong dollars, in early trading Tuesday as long-running investor concerns about the sustainability (hey, a fast fashion joke!) of Shein’s business materialized.
Shein is now worth about $24 billion, or a couple of ticks more than Ralph Lauren.
Shein’s debut particularly stings since other Chinese companies recently arrived to market with such fanfare. The memory chipmaker CXMT and humanoid robotics firm Unitree both enjoyed record debuts in Shanghai this summer; CXMT surged 466% in mainland China’s second-largest IPO and Unitree spiked by some 629% on its first day of trading.
If only the company had been Shein.ai, eh?
More tech news follows. —Andrew Nusca
P.S. Tim Cook bids adieu to Apple as its chief executive: “We have made it possible to leave our ‘dent in the universe,’ as Steve once described it, because of who we are and what we believe, because of what we value and how we see the world. How fortunate we are. How fortunate I am.”
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22 states sue Amazon for alleged overcharging
Did Amazon “secretly and systematically” overcharge advertisers on its platform?
The Federal Trade Commission sure thinks so. The U.S. agency on Monday sued the No. 1 company on the Fortune 500 for allegedly manipulating its pricing and auction systems to generate more than $20 billion.
The FTC was joined by 22 state attorneys general in the lawsuit, which points to “hidden surcharges” going back to 2019.
“Amazon has millions of advertising customers who were misled into paying significantly higher prices,” FTC chairman Andrew Ferguson said in a statement. “These higher costs were largely passed on to American consumers.”
Amazon refuted the allegations. The FTC “fundamentally misunderstands how advertisers operate,” the megaretailer wrote in a formal response, adding: “Advertisers paid the same and got more as we meaningfully improved ad relevancy and therefore performance.”
Though it’s not the business the company is famous for, Amazon has the world’s third-largest digital advertising operation, behind only Google and Meta. It was worth about $68 billion last year; most of those sales are from sponsored product ads.
The FTC alleges Amazon’s 2019 auction rules change added an undisclosed surcharge called a “soft reserve price” that led to higher ad prices. Amazon uses a “second-price” auction system promising advertisers that they need only pay “the least bid amount needed in order to win.”
The complaint cites internal Amazon communications discussing the use of an “invented auction participant” to raise prices—a “deceptive and unfair” practice that the FTC says violates federal and state consumer protection laws. —AN
Nissan and Honda to jointly develop software for vehicles
Nissan and Honda will partner to develop computer parts and software for vehicles in an attempt to speed up the development cycles for in-vehicle tech.
The two Japanese automakers said Monday that they’ll share common core electronic control units and software. The fruits of their collaboration are planned for 2029.
Nissan (global market share: about 4%) and Honda (global market share: 5%) have been working together since 2024 on electric and autonomous vehicle technology.
But this latest arrangement is squarely about the “software-defined vehicle,” as it’s come to be called—the car-shaped technology, versus technology-infused cars, that have emerged in the last decade or so from challenger brands including Tesla, BYD, NIO, and XPeng.
With economic unease and uneven demand, global new vehicle sales are expected to remain close to flat this year, leading to stiffer than usual competition.
Why not cut costs, then?
As they’ve long done with mechanical parts like engines and transmissions—you can find the same four-cylinder engine in an Alfa Romeo, Dodge, and Jeep, for example—carmakers are looking for gains and efficiencies by using common digital components, too.
BMW, Mercedes-Benz, Stellantis, and VW are working on a shared operating system; ditto Toyota (ergo Lexus), Mazda, and Subaru. —AN
EU designates ChatGPT as a very large online search engine
As media entities the world over fret about the shift from a search-driven world to an AI chatbot-driven one, one bloc decided to call a spade a spade by calling ‘em the same thing.
The EU’s executive arm, the European Commission, on Monday said it had designated OpenAI’s ChatGPT a “very large online search engine” that would therefore be subject to regulation under the bloc’s Digital Services Act, or DSA.
“ChatGPT is an Artificial Intelligence (AI) system that can engage with and respond to users' prompts and queries, including by searching the web,” the EC wrote. “Hence, ChatGPT is a hybrid service that qualifies as an online search engine under the DSA.”
The EC also took steps to designate Reddit and Roblox “very large online platforms” for similar regulatory purposes.
The decision gives the companies four months—that is, January 2027—to comply with the additional obligations for those designations, among them mitigation of the dissemination of illegal content, negative effects on minors, and adverse electoral effects.
It also brings the EC’s total designated “very large” digital entities to 28. Though many of OpenAI’s rivals (Meta; X) are already in the group, only two are listed as search engines: Google and Microsoft. One that isn’t listed at all? Anthropic.
Tech companies that are out of compliance with the DSA could ultimately be fined up to 6% of their total worldwide annual sales. —AN
More tech
—Eddy Cue’s star rises as Apple CEO John Ternus takes the helm.
—“The risks associated with frontier AI will not respect national borders,” warns the governor of the Bank of England.
—OpenAI touts $1 billion ARR for its ad business.
—Trump says communities that reject data centers will end up “backwards and poor.”
—Polymarket is reportedly fundraising $1 billion at a $21 billion valuation.
—Uber COO: “Nobody’s going to own a car” in 15 to 20 years thanks to autonomous and multimodal transportation.
—China’s CXMT begins producing HBM3E, the fastest and highest-capacity high-bandwidth memory on the market for AI use.