Good morning. Who’s up and who’s down in Southeast Asia?
According to our second-annual Fortune Southeast Asia 500 list, commodities king Trafigura Group remains on top, electronics maker Flex slips to No. 10, and telcos Singtel and Telekom Indonesia slide two places each.
Meanwhile consumer internet company Sea leaps five spots to No. 15, ride-hailer Grab soars to No. 128 from No. 152 (far ahead of rival GoTo), and—further down our ranking of companies by annual revenue—Malaysian electronics maker NationGate splashes onto the list at No. 243 thanks to a contract with a little company called Nvidia.
With so much in flux in the global economy, all I can say is: Watch this space. Today’s tech news below. —Andrew Nusca
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WhatsApp is finally getting ads
They said “move fast and break things,” but they didn’t say one of those things would be promises. (OK, a bit harsh.)
Meta said Monday that it will start showing ads inside WhatsApp for the very first time, specifically in the area called Updates.
The company “will collect some data on users to target the ads,” but exclude message and recipient data, per the New York Times.
(Meta has no plans to place ads in messages themselves, so worry not: Your NBA Finals group chat is safe for now.)
The decision is a big deal because when Meta—then called Facebook—bought WhatsApp for $19 billion in 2014, it said it wasn’t interested in stuffing the mobile messaging service with ads like it had done with its namesake platform.
“I don’t personally think that ads are the right way of monetizing messaging services,” Meta CEO Mark Zuckerberg said on an investor call in 2014. “Advertising is not going to serve as the right thing to do,” WhatsApp CEO Jan Koum added.
But 11 years is a long time for the company to see through its professed strategy to grow WhatsApp—and if current estimates are to be believed, the service has grown its user base by 6X to nearly 3 billion users.
In other words: It’s time to crank the monetization dial. —AN
OpenAI and Microsoft are apparently on the outs
Trouble in AI paradise?
The tensions between OpenAI and Microsoft have reportedly escalated as the companies find themselves at odds over the future of the relationship.
The Wall Street Journal reports that “OpenAI wants to loosen Microsoft’s grip on its AI products and computing resources” as it seeks its partner’s required blessing to convert into a for-profit company.
Meanwhile Microsoft seeks a larger stake in the new, for-profit company “than OpenAI is willing to give,” the report adds. (OpenAI reportedly wants Microsoft to take a 33% stake and fewer rights over future profits.)
Awk.
A recent flashpoint in the relationship is apparently OpenAI’s $3 billion deal to acquire Windsurf, once known as Codeium, which makes an AI coding tool that competes with another offered by Microsoft-owned GitHub.
Under the current Microsoft-OpenAI arrangement, Microsoft enjoys access to Windsurf intellectual property. OpenAI is reportedly not keen on it.
Tools aside, OpenAI is in a race to make its for-profit conversion by the end of this year or risk losing $20 billion in recent investor funding contingent on the move.
And, of course, figure out what role one of the most powerful tech companies on the planet will play in its future. —AN
Intel plans to cut upwards of 20% of foundry staff
The hits keep coming at Intel.
The chipmaker plans to lay off up to one-fifth of its factory workers as it tries to address “affordability challenges” and the “current financial position of the company,” according to an internal memo obtained by the Oregonian.
Intel expects to begin layoffs in July. It had announced in April that it would make cuts to its chip manufacturing business, but didn’t say how deep they’d be.
Intel is reportedly “planning major cuts in other parts of its business, too,” but mum’s the word on that for now.
Still, the cuts would likely number in the thousands. Those would come on top of the 15,000 cuts Intel made last year as the company engages in a protracted turnaround that has it fighting for its life.
CEO Lip-Bu Tan, who had served on Intel’s board prior to his appointment to the top job, has stressed a need to slim and focus the company. “There are no quick fixes,” he said during his first earnings call.
Intel shares have hovered around $20 for the last 10 months, well below where they’ve been for the last decade. —AN
More tech
—OpenAI enlists, winning a $200 million U.S. Department of Defense contract for AI for “warfighting and enterprise domains.”
—Dark web drug market goes…dark. A pan-European crackdown effort has knocked out Archetyp Market.
—U.S. Tesla sales slip 16% in April, casting a pall over the country’s EV market.
—Bitcoin mining costs rise. It now costs $70,000 to mine a single Bitcoin thanks to energy and network prices.
—Social media has overtaken TV as the top news source in the U.S.
—Sign o’ the times: New York state now asks companies to disclose when AI drives layoffs.
—U.S. mulls bigger chip credits. A Senate bill would raise the CHIPS Act's tax credit for domestic semiconductor factories from 25% to 30% through 2026.
—Tron to go public. Crypto billionaire Justin Sun’s digital asset platform will the leap via a reverse merger with Nasdaq-listed SRM Entertainment.
—Inside the rise of Whatnot, the wildly-entertaining, FOMO-inducing, $5 billion shopping app you’ve never heard of.
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