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May 08, 2025
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Happy Thursday! OpenAI has hired Instacart CEO Fidji Simo to oversee some parts of the company in a major leadership restructuring. President Trump is planning to rescind a Biden-era plan to restrict exports of advanced AI chips. Disney reports solid ad revenue growth thanks to live sports.
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OpenAI has hired Instacart CEO Fidji Simo to oversee some parts of the company in a major leadership restructuring at the artificial intelligence firm. Simo and OpenAI CEO Sam Altman announced the news after The Information on Wednesday reported that OpenAI was planning to hire a senior executive for a major leadership role. Altman said in a post on X that Simo’s role will be “CEO of applications” and that she will report to him. Altman will continue overseeing research and infrastructure teams that are core to AI development, while leaving much of the rest of the company to Simo. Simo said in her letter to staff posted on Instacart’s website that her new role at OpenAI will involve “leading the product, business, and other company functions.” In recent months, Altman has expressed his lack of interest in running the entire company, The Information earlier
reported. Simo’s experience in running an e-commerce and advertising business could benefit OpenAI as it plans to expand its revenue beyond ChatGPT.
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President Donald Trump is planning to rescind a Biden-era plan to restrict exports of advanced artificial intelligence chips to countries around the world, the Commerce Department told Bloomberg. Nvidia and other chip firms said the plan, an executive order issued by President Joe Biden in January that was set to take effect May 15, would hurt their businesses. The regulation aimed to keep more AI chips inside the U.S. or its closest allies while capping the percentage of Nvidia chips that could be sold elsewhere, from Malaysia to India. Critics of the rules, including Nvidia, said they might encourage foreign companies or governments to use chips made by U.S. adversaries, such as China, to develop AI. (Trump has increased restrictions on the sale of U.S. AI chips to China.) The Trump administration said it is
considering introducing a “simpler” rule that “unleashes American innovation and ensures American AI dominance,” according to a statement the Commerce Department provided to Bloomberg. That would be welcome news for small cloud providers such as Oracle, which were concerned the Biden executive order would greatly impact their global data center plans.
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The ad market is healthy if you have live sports—at least according to Disney leadership during the company’s fiscal second-quarter earnings call on Wednesday. Disney said domestic ad revenue for ESPN, its sports segment, grew 29% year over year, driven by airing more NFL and college football playoff games during the three months ending in March. Disney is preparing to launch a new, all-streaming version of ESPN later this year. Disney CEO Bob Iger said ESPN chairman Jimmy Pitaro will unveil the name of the streaming service and its pricing next week. Disney CFO Hugh Johnston said the company continues to see “robust” interest from advertisers heading into this year’s TV upfronts, when advertisers negotiate billions of dollars in ad-spending deals for the coming year. Restaurants and healthcare advertisers
are continuing to spend, though some of that demand is offset by there being more streaming ad inventory available in the market, he said. Disney expects its overall ads business to grow by more than 3% this year, he added. Disney’s entertainment streaming business also continues to see momentum, ending the company’s fiscal second-quarter with $6.1 billion in revenue and a profit of $336 million—the latter up from $47 million during the same quarter last year. The increase in revenue and profits were driven in part by price increases to Disney+ and its other streaming services, the company said. Disney+ ended the quarter with 126 million global subscribers, up 1% from the previous quarter. Disney’s domestic Hulu subscription service (excluding its live, cable-TV like service) surpassed 50 million subscribers.
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Google on Tuesday cut around 200 employees across its global business organization, the unit responsible for sales and partnerships, according to a person with direct knowledge of the situation. A Google spokesperson said that the company was “making a small number of changes across our teams to drive greater collaboration and expand our ability to quickly and effectively serve our customers.” The cuts follow Google’s layoff last month of hundreds of employees across its platforms and devices unit, which
builds Android and Chrome, in addition to a voluntary buyout program in that department. Over the past 18 months, Google has made a series of job cuts across the company, often at the scale of “hundreds” of job cuts, in contrast to its layoffs of 12,000 people in 2023 that sparked an internal backlash. Tuesday’s cuts impacted less than 1% of the global business organization, according to the person with direct knowledge. Alphabet, Google’s parent company, had around 185,000 employees at the end of last quarter. In the company’s most recent earnings call, chief financial officer Anat Askenazi said that the company intended to increase headcount in “key investment areas” but also noted that the company had announced “consolidation of teams which helps not just with cost but with velocity and speed.”
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Mobile app ad firm AppLovin’s business continued to soar in the first quarter of 2025, with revenue rocketing 40% from the first quarter last year to $1.48 billion. The overall revenue number was better than AppLovin’s own projections. AppLovin stock jumped 14% in after-hours trading. The advertising company’s business and stock have been on a tear since late last year, when the company began pivoting into ecommerce advertising, a departure from the company’s core gaming business. Free cash flow was $826 million in the first quarter, a nearly 19% rise since the fourth quarter of last
year. In the first quarter ad revenue rocketed 71%, although that growth was offset by a 14% decline in its apps revenue. AppLovin executives noted on a call with investors on Wednesday that ecommerce ad revenue remains a small minority of its total ad business. AppLovin’s gaming apps business has shown more volatility than advertising. The app business suffered a drop in revenue in 2023 before stabilizing last year. AppLovin has said it has been finetuning its portfolio of apps, including by cutting marketing spending, to reduce costs. In February it announced it had tentatively reached a deal to sell its mobile gaming business for $900 million in cash and stock although today the company detailed revised terms for the sale involving less cash in what it called a “definitive agreement.” The ad business has continued growing quickly despite a number of Wall
Street short seller reports earlier this year which questioned the effectiveness of its advertising technology. The company has hired a law firm to investigate the short sellers.
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OpenAI said Wednesday it is planning to build data centers for artificial intelligence in countries other than the U.S. through its Stargate joint venture with SoftBank, which aims to develop $500 billion worth of facilities over the next four years. The move is notable because OpenAI said other companies, not just OpenAI, would use the data center capacity it develops overseas. OpenAI also might make investments in AI developers that use the facilities. OpenAI said in a blog post it will partner with other countries “in coordination with the U.S. government” so that other nations can develop “democratic AI” with data that does not leave their borders. The first phase would involve 10 countries that would also commit to funding the new facilities. OpenAI didn’t name them. OpenAI has special ambitions to expand its business in large countries such as India, and previously said it would develop products with SoftBank specifically for Japanese customers. “This is a moment when we need to act to support countries around the world that would prefer to build on democratic AI rails, and provide a clear alternative to authoritarian versions of AI that would deploy it to consolidate power,” OpenAI said in a statement, which didn’t specifically reference geopolitical adversaries such as China.
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