Tag Archives: Microsoft Corp

ChatGPT maker OpenAI launches tool to detect text written by AI

Sam Altman, CEO of OpenAI, walks from lunch during the Allen & Company Sun Valley Conference on July 6, 2022, in Sun Valley, Idaho.

Kevin Dietsch | Getty Images News | Getty Images

Artificial intelligence research startup OpenAI on Tuesday introduced a tool that’s designed to figure out if text is human-generated or written by a computer.

The release comes two months after OpenAI captured the public’s attention when it introduced ChatGPT, a chatbot that generates text that might seem to have been written by a person in response to a person’s prompt. Following the wave of attention, last week Microsoft announced a multibillion-dollar investment in OpenAI and said it would incorporate the startup’s AI models into its products for consumers and businesses.

Schools were quick to limit ChatGPT’s use over concerns the software could hurt learning. Sam Altman, OpenAI’s CEO, said education has changed in the past after technology such as calculators has emerged, but he also said there could be ways for the company to help teachers spot text written by AI.

OpenAI’s new tool can make mistakes and is a work in progress, company employees Jan Hendrik Kirchner, Lama Ahmad, Scott Aaronson and Jan Leike wrote in a blog post, noting that OpenAI would like feedback on the classifier from parents and teachers.

“In our evaluations on a ‘challenge set’ of English texts, our classifier correctly identifies 26% of AI-written text (true positives) as ‘likely AI-written,’ while incorrectly labeling human-written text as AI-written 9% of the time (false positives),” the OpenAI employees wrote.

This isn’t the first effort to figure out if text came from a machine. Princeton University student Edward Tian earlier this month announced a tool called GPTZero, noting on the tool’s website that it was made for educators. OpenAI itself issued a detector in 2019 alngside a large language model, or LLM, that’s less sophisticated than what’s at the core of ChatGPT. The new version is more prepared to handle text from recent AI systems, the employees wrote.

The new tool is not strong at analyzing inputs containing fewer than 1,000 characters, and OpenAI doesn’t recommend using it on languages other than English. Plus, text from AI can be updated slightly to keep the classifier from correctly determining that it’s not mainly the work of a human, the employees wrote.

Even back in 2019, OpenAI made clear that identifying synthetic text is no easy task. It intends to keep pursuing the challenge.

“Our work on the detection of AI-generated text will continue, and we hope to share improved methods in the future,” Hendrik Kirchner, Ahmad, Aaronson and Leike wrote.

WATCH: China’s Baidu developing AI-powered chatbot to rival OpenAI, report says

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Microsoft investigating Teams and Outlook outage as users report issues

The Microsoft logo is seen at the Microsoft store in New York City.

Mike Segar | Reuters

Microsoft said it is investigating issues with several of its products, including Teams and Outlook.

The U.S. technology giant said that users may not be able to access multiple Microsoft 365 services.

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“We’ve identified a potential networking issue and are reviewing telemetry to determine the next troubleshooting steps,” the company said.

Downdetector, a service where people can log problems and outages with websites and apps, saw a spike in users reporting issues with Microsoft products, including Outlook, Teams and the company’s cloud product Azure, at around 3 a.m. ET.

Microsoft said that at around 7:05 UTC — 2:05 ET — customers may “experience issues with networking connectivity, manifesting as network latency and/or timeouts when attempting to connect to Azure resources in multiple regions, as well as other Microsoft services.”

The company updated on Twitter at 9:26 GMT — 4:26 ET — that it has “rolled back a network change that we believe is causing impact. We’re monitoring the service as the rollback takes effect.”

The Microsoft outage comes just hours after it reported better-than-expected earnings for the October-December quarter. But the company saw a slowdown in revenue from cloud computing products, including Azure, and gave gloomy guidance for the current quarter.



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Google CEO defends layoff process in heated town hall Monday

Sundar Pichai, CEO, Alphabet

Lluis Gene | AFP | Getty Images

Days after Google announced the largest round of layoffs in the company’s 25-year history, executives defended the job cuts and took questions from a concerned workforce during a town hall meeting on Monday.

Google CEO Sundar Pichai led the companywide meeting and told employees that executives will see their bonuses cut. He pleaded with staffers to remain motivated as Google faces heightened competition in areas like artificial intelligence, while also trying to explain why employees who lost their jobs were removed from the internal system without warning.

“I understand you are worried about what comes next for your work,” Pichai said. “Also very sad for the loss of some really good colleagues across the company. For those of you outside the U.S., the delay in being able to make and communicate decisions about roles in your region is undoubtedly causing anxiety.”

CNBC listened to audio of the meeting, which followed the company’s announcement Friday that it’s eliminating 12,000 jobs, or roughly 6% of the full-time workforce. While employees had been bracing for a potential layoff, they wanted answers regarding the criteria that was used to determine who would stay and who would go. Some of the laid-off staffers had long tenures and were recently promoted.

Pichai opened Monday’s town hall meeting acknowledging the Lunar New Year mass shooting in Southern California Saturday night that killed 11 people and injured at least nine others.

“Many of us are still grappling with the violence in L.A. over the weekend and the tragic loss in life,” Pichai said. “I know more details are yet to come out, but it’s definitely hit our Asian-American community in a deep way, especially during the moment of Lunar New Year and we’re all thinking of them.”

‘We have over 30,000 managers’

After moving the conversation to job cuts, Pichai offered some explanation for how he and the executive team made its decisions.

Pichai said he consulted with the founders and controlling shareholders Sergey Brin and Larry Page as well as the board of directors.

Pichai said 2021 marked “one of the strongest years we’ve ever had in the history of the company,” with 41% revenue growth. Google expanded headcount to match that expansion, and Pichai said the company was assuming growth would persist.

“In that context, we made a set of decisions that might have been right if the trends continued,” he said. “You have to remember if the trend had continued and we had not hired to keep pace, we would fall behind in many areas as a company.”

Google and Alphabet finance chief Ruth Porat responded to a couple employee questions in Monday’s town hall that addressed its recent layoff.

Executives said 750 senior leaders were involved in the process, adding that it took a few weeks to determine who would be laid off.

“We have over 30,000 managers at Google and to consult with all of them would have made this an open process where it would have taken additional weeks or even months to come to a decision,” said Fiona Cicconi, Google’s chief people officer, at the meeting. “We wanted to get certainty sooner.”

Regarding the criteria for cuts, Cicconi said execs looked at areas where the work was necessary, but the company had too many people as well as places where the work itself wasn’t critical. Cicconi said the company considered “skill set, time in role where experience or relationships are relevant and matter, productivity indicators like sales quotas and performance history.”

Pichai indicated there would be executive compensation cuts but provided limited details. He said all senior vice presidents “will see a very significant reduction in their annual bonus” this year.

“The more senior you are, the more your compensation is tied to performance,” he said. “You can reduce your equity grants if performance is not great.”

Prior to the job cuts, Google had made the decision to pay out 80% of bonuses this month with the rest expected in March or April. In prior years, the full bonus was paid in January.

Thomas Kurian, the CEO of Google Cloud, offered some perspective on the areas that saw cuts. Google’s cloud unit has been one of the fastest-growing areas for headcount expansion as the company tries to catch Amazon and Microsoft.

“Our engineering hiring is being much more targeted in areas where we need to fill out a product portfolio,” Kurian said. “We are adding sales and customer engineers in very specific countries and industries.”

Kurian said that starting in July, the cloud unit’s aim was to focus hiring “in response to generative AI across our portfolio.”

Like with other all-hands meetings, Google executives took questions from the company’s internal forum called Dory. Employees can post questions there, and they bubble up to the top when their co-workers give them an upvote.

For Monday’s meeting, some of the top-rated questions had to do with the process and communication around the layoffs. One comment said that employees are “playing a game of ping-and-hope-to-hear-back to figure out who lost their job. Can you speak to the communication strategy?”

Rick Osterloh, senior vice president of devices and services, said the company “deliberately didn’t share out of respect for people’s privacy.”

“We know this can be frustrating for people who are still here,” Osterloh said. “But losing your job without any choice in it is very difficult and it’s very personal and many people don’t want their names to be on a list that’s distributed to everyone.”

Looking ahead to A.I.

Another commenter on Dory wrote, “We severed access for 12k employees without the chance to perform knowledge transfers or even let them say goodbye to their colleagues. This is what we do to people who get fired.”

Then came the question: “What’s the message for those of us who are left?”

Royal Hansen, vice president of Security at Google, chimed in to describe “an unusual set of risks that frankly we’re not that well-practiced at managing.” He said there were “tradeoffs.”

“When you think about our users and how critical they’ve become in people’s lives — all the products and services, the sensitive data they’ve trusted us with — even though it might have been a very low likelihood, we had to plan for the possibility that something could go terribly wrong,” Hansen said. “The best option was to close corporate access the way you described,” he said, referring to the abrupt shutdown.

In response to a question asking how employees who had been with the company for 15-plus years were targeted for cuts, Brian Glaser, vice president and chief talent and learning officer said, “we all know that no one is immune to change in our careers.”

Pichai reminded staffers that the company has important work ahead, in particular with respect to rapid progress in AI. Last month, Google employees asked executives at an all-hands meeting whether the AI chatbot ChatGPT represents a “missed opportunity” for Google.”

Pichai said on Monday that “it will be an important year given the rapid advancements in AI,” which will have an impact across the company.

“There’s a paradigm shift with AI and I think, with the concentration of talent we have and work we will do here, will be a big draw and I hope it will continue to be,” Pichai added. “We have to keep earning it.”

He closed the town hall by bringing the discussion back to the topic at hand.

It’s evident, Pichai said, “how much you all care about your colleagues and the company.” He added, “I know it will take a lot more time to process this moment and what you heard today as well.”

WATCH: Google becoming leaner

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Cramer says these 6 ‘positives’ could lift stocks in earnings season

CNBC’s Jim Cramer on Monday said that several elements could help propel stocks higher, even during what could be an ugly earnings season.

Tuesday kicks off a new earnings season featuring some of the biggest companies in technology, retail and consumer goods. Companies like Microsoft, IBM and ServiceNow are slated to report their quarterly financial results this week.

Here are the six factors that could help stocks as companies report earnings, according to Cramer:

  1. More firms are implementing layoffs. Companies including Microsoft, Salesforce and Wayfair recently announced head count cuts, and their stocks popped.
  2. The U.S. dollar and interest rates peaked last fall. Cyclical, more economically sensitive stocks have since bounced, as many companies conduct a large portion of their business overseas.
  3. The Federal Reserve could almost be done raising interest rates. That’s according to a Wall Street Journal report, and could mean that bad loan worries – and possible ensuing damage to banks – could be over.
  4. China’s economy is reopening. The return of the world’s second-largest economy is great news for companies, particularly those in entertainment, travel and consumer goods.
  5. The government is poised to spend big on infrastructure. Cash from the bipartisan infrastructure bill and the Inflation Reduction Act provide a “safety net” for companies that build roads, bridges or tunnels.
  6. Analysts are upgrading chip stocks. Barclays on Monday upgraded Advanced Micro Devices and Qualcomm to overweight. “Remember, the [semiconductor chips] inventory glut included everything from cellphones to desktops to high-performance computers. This is a very big deal,” Cramer said.

Cramer cautioned that while earnings season may still not be smooth sailing, any dips in stock price aren’t necessarily unwelcome.

“At the moment of the first print, when we see the numbers, I still expect to see some vicious declines. The difference from 2022? Those declines, they might be buyable,” he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Advanced Micro Devices, Qualcomm, Salesforce and Microsoft.

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Market is getting rid of ‘weak-handed investors’

CNBC’s Jim Cramer on Wednesday warned investors that stocks could continue to fall — at least in the near future.

“I think we have a … period of consolidation, as we get rid of the weak-handed investors. And we certainly wash out those who got carried away and committed personal fouls, like buying bitcoin above $20,000 or fooling around in meme stocks,” he said.

Stocks tumbled on Wednesday after December retail sales data heightened fears of a recession and investors took profits on gains from earlier this month. The S&P 500 closed at its lowest level since Dec. 15, and the Nasdaq Composite fell, breaking a seven-day win streak.

“Right now, the market’s working off one of the most overbought conditions we’ve had in ages. In the last two weeks, we simply rallied too far, too fast. It’s not that everything’s horrible,” Cramer said.

He pointed out that while Microsoft said that it’s laying off 10,000 employees, other industries have stayed much more resilient. Many companies, including United Airlines recently, have reported great quarters so far this earnings season, he added.

“Vast swaths of the economy are holding up just fine. The problem lies in tech, as I’ve been telling you for months on end,” he said.

However, that won’t stop the market from enduring more pain, at least in the short term, Cramer warned. “The bears — they will be out in full force tomorrow.”

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Job cuts in tech sector spread, Microsoft lays off 10,000

Microsoft is cutting 10,000 workers, almost 5% of its workforce, joining other tech companies that have scaled back their pandemic-era expansions.

The company said in a regulatory filing Wednesday that the layoffs were a response to “macroeconomic conditions and changing customer priorities.”

The Redmond, Washington-based software giant said it will also be making changes to its hardware portfolio and consolidating its leased office locations.

Microsoft is cutting far fewer jobs than it had added during the COVID-19 pandemic as it responded to a boom in demand for its workplace software and cloud computing services with so many people working and studying from home.

“A big part of this is just overexuberance in hiring,” said Joshua White, a finance professor at Vanderbilt University.

Microsoft’s workforce expanded by about 36% in the two fiscal years following the emergence of the pandemic, growing from 163,000 workers at the end of June 2020, to 221,000 in June 2022.

The layoffs represent “less than 5 percent of our total employee base, with some notifications happening today,” CEO Satya Nadella said in an email to employees.

“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella said. He emphasized the importance of building a “new computer platform” using advances in artificial intelligence.

He said customers that were accelerating their spending on digital technology during the pandemic are now trying to “optimize their digital spend to do more with less.”

“We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” Nadella wrote.

Other tech companies have also been trimming jobs amid concerns about an economic slowdown.

Amazon and business software maker Salesforce earlier this month announced major job cuts as they prune payrolls that rapidly expanded during the pandemic lockdown.

Amazon said that it will be cutting about 18,000 positions. It’s the largest set of layoffs in the Seattle company’s history, although just a fraction of its 1.5 million global workforce.

Facebook parent Meta is laying off 11,000 people, about 13% of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce.

Nadella made no direct mention of the layoffs on Wednesday when he put in an appearance at the World Economic Forum’s annual meeting happening this week in Davos, Switzerland.

When asked by the forum’s founder Klaus Schwab on what tech layoffs meant for the industry’s business model, Nadella said companies that boomed during the COVID-19 pandemic are now seeing “normalization” of that demand.

“Quite frankly, we in the tech industry will also have to get efficient, right?” Nadella said. “It’s not about everyone else doing more with less. We will have to do more with less. So we will have to show our own productivity gains with our own sort of technology.”

Microsoft declined to answer questions about where the layoffs and office closures would be concentrated. The company sent notice to Washington state employment officials Wednesday that it was cutting 878 workers at its offices in Redmond and the nearby cities of Bellevue and Issaquah.

As of June, it had 122,000 workers in the U.S. and 99,000 elsewhere.

White, the Vanderbilt professor, said all industries are looking to cut costs ahead of a possible recession but tech companies could be particularly sensitive to the rapid rise in interest rates, a tool that has been used aggressively in recent months by the Federal Reserve in its fight against inflation.

“This hits tech companies a little harder than it does industrials or consumer staples because a huge portion of Microsoft’s value is on projects with cash flows that won’t pay off for several years,” he said.

Among the projects that have been attracting attention recently is Microsoft’s investment in its San Francisco startup partner OpenAI, maker of the writing tool ChatGPT and other AI systems that can generate readable text, images and computer code.

Microsoft, which owns the Xbox game business, also faces regulatory uncertainty in the U.S. and Europe delaying its planned $68.7 billion takeover of video game company Activision Blizzard, which had about 9,800 employees as of a year ago.

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AP Business Writer Kelvin Chan contributed to this story from London.

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Ubisoft (UBI) stock tanks 21% after guidance cut, games cancelled

In this photo illustration, the Ubisoft video game company logo seen displayed on a smartphone.

Igor Golovniov | SOPA Images | LightRocket via Getty Images

Ubisoft shares plunged 21% on Thursday after the French video game maker reduced revenue guidance, cancelled three titles and pushed back the release of its upcoming Skull and Bones game.

The company’s share price slumped as low as 18.80 euros apiece shortly after the market opened, hitting its lowest level in more than seven years. The stock has since pared losses slightly and was last trading at around 20 euros, down 16% from the Wednesday close.

In a trading update on Wednesday, Ubisoft lowered net bookings guidance for the third quarter of 2022 to 725 million euros, down from an earlier target of 830 million euros. The company forecast full-year net bookings would likely fall 10% after an earlier projection called for an increase of 10%.

The company, which is best known as the publisher of hit franchises including Assassin’s Creed and Far Cry, cited poor performance of its Mario + Rabbids Sparks of Hope and Just Dance 2023 titles, as well as a challenging economic environment.

“There’s a fair amount of “battening down the hatches” going on globally as it relates to the games industry,” Lewis Ward, research director of gaming at IDC, told CNBC.

“There were huge 20-30% revenue surges when COVID hit, and in 2023 we’re dealing with ongoing denouement of the COVID-induced spending spike, plus concerns about a potential recession and ongoing inflationary and supply chain challenges in North America and Europe especially, plus, of course, the ongoing fallout of Russia’s invasion of Ukraine.”

Consumers are cutting back on discretionary purchases in response to higher prices and borrowing costs. Gaming has especially come under pressure. The industry was expected to contract 4.4% year-on-year to $182 billion, according to a November forecast from market research firm Ampere Analysis.

Ubisoft is the third gaming firm this week to issue a disappointing trading update. Devolver Digital and Frontier Developments posted profit warnings on Monday, citing a weak trading environment in December.

“This reveals that the macro-economic environment is having an impact on premium games sales to an extent,” Piers Harding-Rolls, research director for games at Ampere Analysis, told CNBC via email.

“However, I think it is likely that the economic backdrop will impact some companies more than others,” he added. “For example, we’ve already noted how the biggest AAA console releases have sold well — FIFA, God of War, CoD [Call of Duty] — so I think it’s too early to assume all major publishers will be in the same position as these three companies.”

The gaming industry seeing increased consolidation, including Microsoft’s mega acquisition of Call of Duty publisher Activision Blizzard and Sony’s purchase of Destiny developer Bungie. Analysts view Ubisoft as a potential takeover target. Its share price sank more than 38% in 2022, wiping off 3 billion euros from the company’s market value.

In September, Tencent upped its stake in the company in a deal that made the Chinese tech giant Ubisoft’s largest shareholder. The purchase gave Tencent an overall stake of 11%, including indirect ownership, and an option to increase its interest further to up to 17%.

Analysts at the time said that the stake purchase had dampened hopes of a takeover. As part of the deal, Tencent won’t be able to sell its shares for five years and can’t increase its direct stake in Ubisoft beyond 9.99% for a period of eight years. 

Ubisoft said Wednesday that it would depreciate around 500 million euros of capitalized research and development and narrow its focus to fewer titles. It shelved three unannounced game projects and delayed the release of its upcoming Skull and Bones pirate game until a period between early 2023 to 2024.

The company hopes to cut costs by about 200 million euros through a mix of targeted restructuring, divestment of “non-core” assets, and employee attrition. It has about 1.4 billion euros of cash and non-cash equivalence on its balance sheet.

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Microsoft responds to FTC attempt to block Activision Blizzard deal

Microsoft on Thursday filed its response to U.S. regulators’ antitrust case attempting to block the software maker from buying video-game publisher Activision Blizzard.

The Federal Trade Commission’s challenge to the proposed $68.7 billion acquisition stands out as the biggest government pushback Microsoft has dealt with on home turf since facing off against the Justice Department two decades ago over the dominance of Windows in the operating system market.

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Under President Donald Trump, Google’s umbrella company Alphabet, Apple, Amazon and Facebook parent Meta all faced inquiries from U.S. competition officials. That left Microsoft to go about its business and continue expanding with acquisitions through the election of President Joe Biden, even after Biden’s appointee, technology critic Lina Khan, took over at the FTC. But then Microsoft revealed its plan to buy Activision Blizzard. On Dec. 8 the FTC argued that the transaction would violate federal law.

“Even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers, and workers in the tech sector,” Brad Smith, Microsoft’s president and vice chair, said in a statement provided to CNBC. “As we’ve learned from our lawsuits in the past, the door never closes on the opportunity to find an agreement that can benefit everyone.”

To relieve government opposition to the deal, Microsoft has offered concessions.

In October Phil Spencer, CEO of Microsoft’s gaming unit, said Microsoft had committed to bringing Activision Blizzard’s Call of Duty games to Nintendo consoles for a decade and keeping the games on Valve’s Steam game store. Microsoft has also offered to sign a 10-year agreement with Sony to release Call of Duty games on PlayStation consoles on the same day they reach Microsoft Xbox consoles. “Sony refuses to deal,” Microsoft said in its filing.

Activision Blizzard has not made its new games available through subscription services such as Microsoft’s Game Pass, and the acquisition would make playing Activision Blizzard’s games more affordable, Microsoft said.

“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry,” Microsoft said in its response. “That is particularly so when the manufacturer has made clear it will not withhold the game. The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers.”

Microsoft said that after taking almost a year to investigate the deal and examining millions of documents from Activision Blizzard and Microsoft, the FTC has not shown evidence that Microsoft is looking to yank the game series from PlayStation. Ensuring the games will be widely available is good for business, the company said.

Outside the U.S., Brazil gave the OK for the deal to proceed, while the United Kingdom has been scrutinizing it.

Microsoft pushed back on the FTC’s assertions.

For example, the FTC said in its lawsuit that Microsoft had promised the European Commission that it wouldn’t have a motivation to prevent people from playing games from ZeniMax, a game publisher Microsoft acquired in 2021, on consoles other than the Xbox, but after receiving approval for the ZeniMax deal from the European Commission, the company said it would be making some ZeniMax games exclusive.

“The European Commission agrees it was not misled, stating publicly the day after the complaint that Microsoft did not make any ‘commitments’ to the European Commission,” Microsoft said, “nor did the European Commission ‘rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax’s games.'”

Members of the public sent more than 2,100 emails to the UK’s Competition and Markets Authority in response to a statement from the agency describing three ways the deal could lessen competition. Around 75% of the emails expressed support for the acquisition, the agency said on Wednesday.

If the deal does close, Microsoft would be “the world’s number three gaming company by revenue, behind Tencent and Sony,” Spencer said on a conference call on the day of the deal announcement.

In the months since then, two groups of Activision Blizzard employees have voted to form unions. Microsoft has said it’s committed to efforts that would make it easier for employees to decide on whether to join or start a union.

This is breaking news. Please check back for updates.

WATCH: Gaming to benefit from being largely platform agnostic, says Cowen’s Doug Creutz

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Apple, Amazon, Microsoft and Google will fuel the next rally

Satya Nadella, chief executive officer of Microsoft Corp., during the company’s Ignite Spotlight event in Seoul, South Korea, on Tuesday, Nov. 15, 2022. Nadella gave a keynote speech at an event hosted by the company’s Korean unit.

SeongJoon Cho | Bloomberg | Getty Images

To build a fire — but not destroy the market by doing so.

That’s the goal right now. It’s not as easy as in the famous Jack London short story (“Too Build a Fire”) where in the end the survivors profit rather than freeze to death in their sleep. 

In the early part of this decade, we saw the rise of Robinhood (HOOD) and the distribution of investments from the serious to the ephemeral. These days, Robinhood has the appearance of one gigantic bonfire of young peoples’ money. The gamification concept was real and the exodus of investors was noisy — culminating with the ridiculous self-immolation of GameStop (GME), AMC Entertainment (AMC) and the meme stocks. Those who fought this trend abandoned Twitter, hired bodyguards and tried to hide from the angry mob that was attempting to will stocks higher by savaging the sellers. No tinder from these clowns. 

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FTC sues to block Microsoft-Activision Blizzard $69B merger

The Federal Trade Commission on Thursday sued to block Microsoft’s planned $69 billion takeover of video game company Activision Blizzard, saying it could suppress competitors to Microsoft’s Xbox game console and its growing games subscription business.

The FTC’s challenge could be a test case for President Joe Biden’s mandate to scrutinize big tech mergers. The commission voted 3-1 to issue the complaint after a closed-door meeting, with the three Democratic commissioners voting in favor and the sole Republican voting against.

The complaint points to Microsoft’s previous game acquisitions, especially of well-known developer Bethesda Softworks and its parent company ZeniMax, as an example of where Microsoft is making some upcoming game titles exclusive to Xbox despite assuring European regulators it had no intention to do so.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said a prepared statement from Holly Vedova, director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

The FTC said it was filing the complaint through its administrative process rather than taking the case to a federal court. An administrative law judge it set to hear evidence but not until August 2023, according to the complaint.

Microsoft’s president, Brad Smith, signaled in a statement Thursday that the company is likely to challenge the FTC’s action.

“While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court,” Smith said.

The company had been ramping up its public defense of the deal in recent days as it awaited a decision. Smith said Microsoft has been committed to addressing competition concerns and brought proposed concessions to the FTC earlier this week.

“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Smith said.

Microsoft announced the merger deal in January but has faced months of resistance from Sony, which makes the competing PlayStation console and has raised concerns with antitrust watchdogs around the world about losing access to popular Activision Blizzard game franchises such as the military shooter game Call of Duty.

Antitrust regulators under Biden “have staked out the view that for decades merger policy has been too weak and they’ve said, repeatedly, ‘We’re changing that,’” said William Kovacic, a former chair of the FTC.

That has put pressure on the FTC to fulfill its bold promises to “not allow dodgy deals and not accept weak settlements,” said Kovacic, who was a Republican commissioner appointed in 2006 by then-President George W. Bush. But he said Microsoft has a good chance of winning its legal challenge.

“It’s evident that the company has been making a number of concessions,” he said. “Microsoft would likely raise them in court and say the FTC is being incorrigibly stubborn about this.”

Microsoft announced its latest promise Wednesday, saying it would make Call of Duty available on Nintendo devices for 10 years should its acquisition go through. It has said it tried to offer the same commitment to Sony.

In an appeal to Biden administration priorities, Microsoft had also sought to characterize its deal as worker-friendly after announcing a “labor neutrality agreement” in June with the Communications Workers of America that would allow workers to unionize after the acquisition closes. The union’s president, Chris Shelton, wrote an opinion column in The Hill this week calling on the FTC to “seal the deal, not blow it up.”

The deal is also under close scrutiny in the European Union and the United Kingdom, where investigations aren’t due to be completed until next year.

FTC’s decision to send the complaint to its in-house judge instead of seeking an urgent federal court injunction to halt the merger could drag the case out for months and give more “confidence to authorities outside the U.S. to take a swing at the deal on their own,” said Kovacic, who is now a professor at George Washington University Law School.

Activision Blizzard CEO Bobby Kotick said in a message to employees Thursday that the FTC’s action “sounds alarming, so I want to reinforce my confidence that this deal will close.”

“The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,” Kotick wrote.

Kotick said the deal will be good for players, employees, competition and the industry.

“We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry,” he said.

Led by FTC Chair Lina Khan, a legal scholar who’s advocated for tougher antitrust enforcement, the commission is made up of three Democrats and one Republican after a second Republican stepped down earlier this year and left an open seat on the panel.

Democratic U.S. Sen. Elizabeth Warren tweeted Thursday that she welcomed the FTC action, noting that she had urged Khan to scrutinize the proposed merger.

“Corporate monopolies have had free rein to hike prices and harm workers, but now the Biden admin is committed to promoting competition,” Warren said.

Both the Justice Department and the FTC this year have looked at strengthening merger guidelines to better detect and prevent illegal and anticompetitive deals.

Federal regulators also on Thursday opened their campaign to block Facebook parent Meta’s acquisition of a virtual-reality company Thursday in a San Jose, California, courtroom.

In that case, the FTC sued to prevent Meta’s acquisition of Within Unlimited and its fitness app Supernatural, asserting it would hurt competition and violate antitrust laws.

Microsoft in recent years has largely escaped the more intense regulatory backlash its tech rivals such as Amazon, Google and Meta have endured. But the sheer size of the Activision Blizzard acquisition — which could be the priciest in tech industry history — has drawn attention.

Microsoft’s last big antitrust battle occurred more than two decades ago when a federal judge ordered its breakup following the company’s anticompetitive actions related to its dominant Windows software. That verdict was overturned on appeal, although the court imposed other, less drastic, penalties on the company.

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