šŸ‘€ Warren Buffett spooks the economy

PLUS: OpenAIā€™s top brass are heading for the exits.; X Sues Major Companies for Boycott.

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TOP STORY
šŸ‘€ Warren Buffett spooks the economy

šŸ“ø Inc. Magazine / Getty Images

Warren Buffett seems to be extremely bearish on the economy right now.

  • Last week, Buffett's ā€œBerkshire Hathawayā€ announced it had sold over half of its stake in Apple.

  • Buffett dumped 55.8% of Berkshire's holdings of Apple stock in the first six months of 2024.

  • Since the end of 2023, Berkshire has sold 505 million Apple shares ā€” 115 million in the first quarter and another 390 million in the second quarter.

Going on a selling spree, I see.

First of all, poor Apple; second of all, thatā€™s a whole lotta cash to be sitting on.

šŸ“‰ Apple ($AAPL) is -7.90% this month.

šŸ’¬ Berkshire sold a net $75.5 billion in stocks in the three months through June, increasing its cash stockpile to a record $276.94 billion.

šŸ“ø CNBC

After hearing this much of a selloff, the first thought that comes to mind is that he thinks Apple stock is just overvalued, which isnā€™t odd at all.

However, the concern for the U.S. economy bulls is that Buffett seems to be bracing for the worst.

  • Today, we found out Berkshire holds more in Treasury bills than the U.S. Federal Reserve.

  • By the end of Q2, Berkshire had over $234.6 billion in short-term Treasury bills, plus over $42 billion in cash and short-term T-bills.

  • In comparison, the Fed owned $195.3 billion in T-bills as of July 31ā€”which are rookie numbers, clearly.

This selling trend isnā€™t new for Buffett; this is the seventh straight quarter in which Berkshire has been trimming its stock holdings.

Uh oh, that doesnā€™t seem promising.

šŸ’¬ Short-term T-bills are government bonds that need to be paid back within a year or less.

Before you run to the bank, though, stocking up on T-bills isnā€™t inherently a sign everything is going to sh*t; they are just a safe place to put money.

But, with Buffett stacking up Mā€™s Bā€™s like Drake for almost two years now and continuing to sell stock like hotcakes, itā€™s no wonder people think this is a very bearish sign for the economy.

šŸ“ˆ Berkshire Hathaway ($BRK) stock is up 17.81% this year.

ARTIFICIAL INTELLIGENCE
šŸšŖ OpenAIā€™s top brass are heading for the exits

šŸ“ø New York Post

Three key leaders at OpenAIā€”co-founder John Schulman, co-founder Greg Brockman, and Peter Dengā€”have all announced this week their intent to permanently leave or take a leave of absence from the company.

If this sounds familiar, itā€™s because OpenAIā€™s top execs have been dropping like flies in the past few months.

Damn, Sam, get a grip.

šŸ“ø Greg Brockman and the Open AI team

Thankfully, OpenAI got to enjoy a couple of months off before being bombarded by resignations again this week. So now, letā€™s meet the new batch running for the hills.

Hereā€™s some background on each šŸ‘‡

John Schulman, co-founder and a key leader at OpenAI.

  • At OpenAI, Schulman was pivotal in developing several foundational AI models.

  • New Destination: Joining rival AI startup Anthropic ā€” one of OpenAIā€™s biggest competitors.

Greg Brockman, OpenAI's president and co-founder.

  • Before OpenAI, he was Stripe's CTO, where he built the company's technical infrastructure.

  • At OpenAI, Brockmanā€™s leadership shaped its direction and goals, with Brockman advocating for responsible AI to help society.

  • New Destination: Taking an extended leave of absence until the end of the year.

Peter Deng, a product leader who joined Meta last year, has reportedly also departed.

The mass exodus is definitely not the best look for any company, especially a startup like OpenAI, but the good news is that they might be hiring.

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LAWSUIT
X Sues Major Companies for Boycott

šŸ“ø Mashable India

Elon Musk seems just as interested in colonizing the courtroom as he is in colonizing Mars.

Earlier this week, Musk and X announced a lawsuit against the Global Alliance for Responsible Media (GARM), a coalition of brands and agencies that includes Unilever, Mars, and CVS.

šŸ’¬ GARM is a cross-industry initiative established in 2019 by the World Federation of Advertisers to ā€œhelp the industry address the challenge of illegal or harmful content on digital media platforms and its monetization via advertisingā€

What did these big, bad brands do wrong? The lawsuit follows a report claiming that GARM and its members conspired to boycott Twitter after Musk acquired the company, violating antitrust laws.

  • GARM's co-founder, Rob Rakowitz, denied the reportā€™s claims, arguing that brands can choose where to advertise.

  • So, he's not denying that they boycotted the platform; he's just saying theyā€™ll be advertising wherever they go, darn, please.

But Musk and X definitely didnā€™t like that answer.

šŸ’¬ ā€œThe consequenceā€”perhaps the intentā€”of this boycott was to seek to deprive Xā€™s users, be they sports fans, gamers, journalists, activists, parents, or political and corporate leaders, of the Global Town Square.ā€

Linda Yaccarino, X CEO.

But it's not just GARM; many companies don't want to advertise on X with Musk at the helm.

Shortly after Musk took over Twitter in 2022, dozens of major advertisers, including Apple, Disney, IBM, Comcast, and Warner Bros., cut their spending on X, causing a 50% drop in ad revenue.

Donā€™t worry, Mr. Musk; I still love using your platform.

šŸ’¬ X is on track to generate $2 billion in ad revenue this year, down from $4.5 billion in its last full year as a public company in 2021.

Axios

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