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The Morning Download: Intel, Boeing and the U.S. Manufacturing Crisis
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What's up. AI startup Perplexity in funding talks to more than double it valuation; SF loves self-driving; Uncle Sam wants CIOs to serve.
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Boeing has been hobbled by investigations and production delays. Photo: jason redmond/Agence France-Presse/Getty Images
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Good morning, CIOs. When it comes to making the world’s most innovative products, the U.S. is losing it, a situation with far reaching economic and geopolitical implications. At the end of 1999, four of the 10 most valuable U.S. companies were manufacturers, The Wall Street Journal’s WSJ Columnist Greg Ip writes. Today, none.
Much of the situation is self-inflicted. Consider Intel and Boeing, once gold standards in manufacturing, Ip writes.
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Neither fell prey to cheap foreign competition, but their own mistakes. Their culture evolved to prioritize financial performance over engineering excellence, which also brought down another manufacturing icon, General Electric.
Intel passed on making the chips for Apple’s first iPhone, thinking it wouldn’t be profitable enough. It was late to adopt the latest technology for etching the tiniest circuits, and it missed the boom in artificial intelligence.
Boeing thought it would be cheaper and faster to add more efficient engines to its bestselling 737 with the help of software rather than completely redesign or replace the plane.
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Since their problems are of their own making, it is tempting to leave them to their fates. But the loss of either company would have industrywide repercussions.
Boeing “is also one of the most engineering-intensive companies in the world, so it is a large R&D spender,” Rob Atkinson, president of the Information Technology and Innovation Foundation, tells Ip. And Intel’s failure would deal a body blow to U.S. efforts to shore up the semiconductor ecosystem.
Each supports a multilayered ecosystem of talent and suppliers. "Once that ecosystem moves offshore, it is almost impossible to bring back,” Ip writes. Read the story.
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Content from: DELOITTE
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Tokenization: From Proof of Concept to Scalable Opportunity
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Despite complex challenges, some financial services executives see the potentially transformative benefits of tokenization to open new investment avenues and streamline back-office processes. Read More
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Perplexity has offices in San Francisco. Photo: Carolyn Fong for WSJ
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AI startup Perplexity in funding talks to more than double valuation to $8 billion. Perplexity has told investors it is looking to raise about $500 million in a new funding round, according to people familiar with the matter, the WSJ'sBerber Jin and Tom Dotan report.
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AI search. Founded two years ago, Perplexity is a combination search engine and AI chatbot that currently earns money by selling premium subscriptions to consumers. It recently launched an enterprise version for corporate customers that searches their internal files.
Activity draws accusations. Perplexity scours the web for current information like Google and provides answers to questions like ChatGPT. A host of web publishers have accused Perplexity of using their material without permission to generate AI search results. The New York Times recently sent the startup a “cease and desist” notice demanding the startup stop accessing its content.
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