President Trump is eager to claim credit for Apple’s moves, but it’s a bit more complicated.

THE TICKER

President Trump took a bold announcement by Apple on Wednesday and made an even bolder claim about it. 

The electronics giant touted a massive new investment in the U.S. economy, pledging to contribute $350 billion to it over the next five years, with $30 billion of that sum coming in the form of capital spending, including for a new campus. And the tech company said it will create 20,000 new jobs in the United States. The president seized on the news as validation of the Republican tax package:

The issue: It’s not clear how much the new tax regime contributed to Apple’s decision, if at all. 

In a 1,093-word statement detailing the move, the company noted it is handing the Treasury a $38 billion one-time payment. That meets a requirement under the new law that corporations pay previously deferred taxes on their foreign profits. The law set up that provision as a sort of compromise: Companies are being forced to fork over a portion of those overseas stashes to Uncle Sam, but they are being charged a deeply discounted rate (15.5 percent for cash and 8 percent for less liquid assets.) Apple says it is counting the $38 billion it’s paying toward the $350 billion total it advertised Wednesday.

The law gives companies the flexibility to spread what they owe under the levy over five years. But the payment is mandatory — and not, as Trump suggested in his tweet, itself a vote of confidence in the brightening business climate at home.

Beyond that, the company doesn’t chalk up anything else in its announcement to the tax law. The Wall Street Journal’s Tripp Mickle does a careful job parsing the company’s statement: 

The company previously said it planned $16 billion in capital expenditures world-wide in the fiscal year that ends this September, up from $14.9 billion the previous year. However, Apple doesn’t break out its spending in the U.S., making it difficult to gauge how much of the $30 billion over five years it announced Wednesday is new.

Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., said Apple’s plans are in line with Trump administration goals, but that it isn’t clear how much of the commitments are new. And he said the company could deliver on those commitments with existing cash flow — without needing to tap cash holdings.

“It’s a nice number and puts a foot forward in line with where the administration wants to go with adding jobs and building in the U.S.,” he said. But he added, “It’s not clear these investments were impacted in any way by tax reform.”

Separately, Bloomberg News’s Mark Gurman reported Wednesday, the company is awarding most of its employees worldwide a $2,500 bonus in stock grants in the months ahead. For that, beneficiaries can thank the tax cuts. 

But the announcement of Apple’s multibillion-dollar investments carried significantly more weight for Trump and other Republicans eager to find signs the tax package is supplying a big boost of momentum to broader economic growth. Another entrant in the parade of companies handing out bonuses may be nice. What the GOP would prefer, however, is evidence that corporate giants are plowing their windfalls into the kind of spending that will trickle down to workers. 

“Certainly higher wages and bonuses are good news,” Tax Foundation senior analyst Scott Greenberg says. “But if the tax bill is going to have a large economic effect, it’s likely going to take some time to show up, because will take some time for companies to respond to the incentives offered by the new tax provisions.” And, he cautioned, “it’s difficult to separate causality from companies looking for gestures of public goodwill.”

Apple isn’t likely to fact-check Trump’s claims.

The announcement appeared designed to win the company some good-citizen points, with Apple CEO Tim Cook declaring in a statement that his company “could only have happened in America, and we are proud to build on our long history of support for the US economy.”

Recall that the tech titan came in for special abuse from Trump during the 2016 campaign. The candidate promised to make Apple “start building their damn computers and things in this country instead of in other countries,” at one point urged a boycott of Apple products, and said he would “come down so hard” on Cook that “his head would be spinning all of the way back to Silicon Valley.”

But Apple isn’t the only corporate giant that has been coy about pledging to use its tax gains for investments and wage hikes rather than, say, stock buybacks and dividend payments.

A CNBC survey of the 100 biggest companies by market cap found only nine with “specific plans to use some of the money saved from the corporate tax cuts to boost worker pay or invest in facilities or charitable causes.”

In other news, the sun rose today. Can we say for sure it would have but for the corporate tax cut?

MARKET MOVERS

— DOW 26,000. CNBC’s Fred Imbert: “Stocks traded higher on Wednesday following the release of stronger-than-expected quarterly results from some of the biggest U.S. companies. The Dow Jones industrial average rose 322.79 points, closing above 26,000 for the first time. The index first broke above the milestone mark on Tuesday. The S&P 500 gained 0.9 percent to finish at 2,802.56, with staples and tech rising more than 1 percent. The index also posted a record close.Tech stocks got a boost from Apple, which erased losses after announcing plans to repatriate billions in overseas cash. The stock closed 1.7 percent higher. The Nasdaq composite rose 1 percent to finish at 7,298.28, a record.”

It broke the record in record time. CNN Money’s Matt Egan: “The latest rush to buy stocks left the average up almost 8,000 points since… Trump’s 2016 election.The rally on Wednesday gave the Dow its best percentage gain since November. And it showed that the upward trend remains intact despite a big reversal the day before… But the velocity of the rally is raising eyebrows. It took just seven trading days for the Dow to climb from 25,000 to 26,000. While that is just a 4% advance, it’s part of a broader surge that has carried the Dow 42% during the Trump era. And the market rise has come with virtually no breaks.”

U.S. Industrial Production Rose 0.9% in December

U.S. industrial production rose sharply in December, boosted by gains in utilities output as cold weather swept across the nation and increased demand for heating.

WSJ

MONEY ON THE HILL

Shutdown showdown. The Post’s Mike DeBonis, Ed O’Keefe, and Erica Werner: “Bitter divisions in both parties threatened Wednesday to derail Congress’s effort to keep the federal government fully operating past the end of the week. The shutdown threat emerged on two fronts: Republican defense hawks in the House said a short-term spending plan the party introduced late Tuesday did not devote enough money to the military. Meanwhile, Democrats, whose support would be critical for passage in the Senate, began lining up in opposition amid pressure from immigration activists to use the budget talks as leverage to legalize many young immigrants known as ‘dreamers.’ By Wednesday evening, the short-term bill was on the cusp of failure…

House Republicans unveiled a bill Tuesday that would extend funding for four weeks, allowing time for further negotiations toward deals on long-term spending and immigration. To entice Democrats, GOP leaders attached a six-year extension of the popular Children’s Health Insurance Program, as well as the delay of two unpopular health-care taxes. But few, if any, Democrats have been swayed by the overture.”

Tax bill fails to crack majority. Politico’s Toby Eckert: “Support for the Republican tax plan has ticked up slightly since [Trump] signed it into law, but it still hasn’t drawn the backing of a majority of voters, according to a new POLITICO/Morning Consult poll.

The GOP’s top selling point for the plan recently — a spate of employee bonuses and wage increases — was a wash in the poll. The tracking poll, conducted Jan. 11-16, found that a 45 percent plurality of voters backed the plan based on what they knew about it, up from 42 percent in a similar poll before the legislation was enacted on Dec. 22. Opposition in the new poll came in at 34 percent, down from 39 percent. Twenty percent of respondents were undecided, up from 18 percent. After respondents were told about the major provisions of the bill, support rose to 47 percent, opposition remained at 34 percent.”

ICI reverses itself on fund rules. Politico’s Zachary Warmbrodt: “A prominent investment industry group is lobbying to keep in place major money market mutual fund regulations that it resisted only a few years ago. The issue will come to a head this week as the House Financial Services Committee votes on bipartisan legislation that would roll back regulations intended to prevent the kind of investor runs on money market funds that exacerbated the 2008 financial crisis. The Investment Company Institute, which represents money managers, did not support many of the safeguards the SEC enacted in 2014 but told senior lawmakers in a letter Friday that it now opposes the House bill that would defang the rules.”

GOP Senator to Block Two Trump Nominees Over Trade Concerns

A GOP senator with concerns about President Trump’s trade policy said Wednesday he would block two of the president’s nominees, saying the Trump administration hasn’t been responsive to his concerns on the issue.

WSJ

TRUMP TRACKER

Trump threatens NAFTA. Reuters’s Jeff Mason and David Lawder: “Trump on Wednesday said that terminating the North American Free Trade Agreement would result in the ‘best deal’ to revamp the 24-year-old trade pact with Canada and Mexico in favor of U.S. interests. Lawmakers as well as agricultural and industrial groups have warned Trump not to quit NAFTA, but he said that may be the outcome.

‘We’re renegotiating NAFTA now. We’ll see what happens. I may terminate NAFTA,’ Trump said in an interview with Reuters. ‘A lot of people are going to be unhappy if I terminate NAFTA. A lot of people don’t realize how good it would be to terminate NAFTA because the way you’re going to make the best deal is to terminate NAFTA. But people would like to see me not do that,’ he said. Trump’s comments come less than a week before trade negotiators from the United States, Canada and Mexico meet in Montreal for the sixth of seven scheduled rounds of negotiations to update NAFTA.”

Considers big “fine” against China. More from Reuters: “Trump and his economic adviser Gary Cohn said China had forced U.S. companies to transfer their intellectual property to China as a cost of doing business there. The United States has started a trade investigation into the issue, and Cohn said the United States Trade Representative would be making recommendations about it soon. ‘We have a very big intellectual property potential fine going, which is going to come out soon,’ Trump said in the interview. While Trump did not specify what he meant by a ‘fine’ against China, the 1974 trade law that authorized an investigation into China’s alleged theft of U.S. intellectual property allows him to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies.”

Fed overhaul hits snags. The Post’s Heather Long: “In less than three weeks, the Federal Reserve, which is widely credited with playing a major role in leading the United States out of the Great Recession, will be under new leadership. Current Fed chair Janet L. Yellen is leaving, and Jerome Powell is President Trump’s nominee to take her place. But Trump’s efforts to remake the Federal Reserve will soon face key tests. The first hurdle will be the Senate. All of Trump’s appointees to the Fed require Senate approval, which has been slow in coming. Trump nominated Powell on Nov. 2, but the Senate didn’t act on his appointment before the end of the year, forcing the president to renominate Powell in 2018… Trump has made his priorities clear for a Powell-led Fed: He wants the stock market to keep soaring and the economy to grow faster. To make that happen, Trump would like interest rates to stay low and fewer restrictions on Wall Street banks. But Powell has been clear to stress the Fed’s independence — from Congress and the White House — in public appearances since his nomination.”

Powell says he’ll hold Deutsche Banke accountable. Bloomberg’s Jesse Hamilton: “Donald Trump’s pick to run the Federal Reserve, responding to a key lawmaker’s concerns over the president’s ties to Deutsche Bank AG, said the agency will hold the German lender to the same standards as the rest of the industry. Fed Governor Jerome Powell answered a letter from Senate Banking Committee member Chris Van Hollen ahead of the panel’s vote on his nomination to become chairman, telling the Maryland Democrat that he’s committed to supervising banks “in an independent manner.” Powell’s nomination was advanced by the committee on Wednesday, with Van Hollen voting in favor.”

Replacing Dudley. Reuters’s Jonathan Spicer: “Unions and groups advocating for retirees, teachers, housing, and workers’ benefits are among those visiting the ornate conference rooms of the Federal Reserve Bank of New York to lobby for a less conventional candidate to serve as its next president. New York Fed directors leading the search for a successor to chief William Dudley, seen as the second most influential policymaker at the U.S. central bank, invited the guests to last week’s meeting to seek their advice. According to attendees and others familiar with the search, the directors are close to a “long list” of candidates and appear set to begin formal interviews within weeks. Until then, directors Sara Horowitz and Glenn Hutchins are taking steps intended to head off any criticisms of opacity and lack of diversity that, in recent years, have stung presidential searches at other district Fed banks. The afternoon meeting with 11 advocacy groups last week marked what one attendee called an unprecedented gesture of public outreach.”

RUSSIA WATCH: 

Bannon agrees to Mueller interview. The Post’s Roz Helderman and Karoun Demirjian: “Former top White House adviser and Trump campaign strategist Stephen K. Bannon has agreed to an interview for special counsel Robert S. Mueller III’s Russia investigation likely to take place later this month, but his lawyer is pushing back against House investigators’ demands for an audience Thursday afternoon, arguing there is ‘no conceivable way’ Bannon will be ready for an interview on the panel’s terms. House Intelligence Committee members K. Michael Conaway (R-Tex.), who is leading the Russia investigation, and Adam B. Schiff (D-Calif.), the panel’s ranking member, sent a letter Wednesday to Bannon’s lawyer, William Burck, insisting that Bannon return to Capitol Hill on Thursday at 2 p.m. to comply with a subpoena they issued Tuesday after Bannon refused to answer questions, citing orders from the White House.”

Probe could collide with midterms. Politico’s Darren Sameulsohn: “Robert Mueller’s Russia probe isn’t ending any time soon, and that’s bad news for President Donald Trump and congressional Republicans already bracing for a possible 2018 Democratic midterm wave. While many Republicans insist the Trump-Russia saga is overblown, they worry headlines about federal indictments, high profile trials—and a potential blockbuster meeting between Mueller and Trump himself—could obscure their positive message ahead of November elections and threaten their House and Senate majorities. In an ominous development for Republicans, a federal judge overseeing the upcoming trial of former Trump campaign manager Paul Manafort and his deputy Rick Gates rejected Mueller’s request to begin in May and instead outlined a scheduled start as soon as September or October — peak election season.”

Wonkblog

Eric Trump’s 401(k) is up by 35 percent, but half of American families don’t even have one

“I didn’t think retirement was possible, and now it is,” he told Hannity.

Christopher Ingraham

POCKET CHANGE

Goldman’s losing money. NYT’s Emily Flitter: “Goldman Sachs used to seem invincible. In the fourth quarter, it lost money. The Wall Street firm on Wednesday reported its first quarterly loss since 2011. It was the result of a one-time $4.4 billion charge stemming from the new tax law. But even ignoring that unusual event, Goldman’s weak core results showed how far the firm has fallen. The bank’s per-share earnings and revenue were both higher compared with a year earlier without the tax charge. But the results announced on Wednesday also revealed a decline in Goldman’s trading might, which has been drained by a potent combination of placid markets and quiet clients. Revenue in its business of buying and selling bonds, commodities and currencies — historically an engine of Goldman’s results — sank to $1 billion in the fourth quarter, half of what it was during the same period in 2016. For the year, net revenue in that business fell 30 percent. The drop sent Goldman’s shares down 3 percent on Wednesday.”

CRYPTO BITS: 

Treasury sees a threat. Bloomberg’s Saleha Mohsin: “The U.S. Treasury views virtual currencies such as Bitcoin as an “evolving threat” and is examining dealers to make sure they aren’t being used to finance illegal activities, the undersecretary for terrorism and financial intelligence said. Treasury is working with the Internal Revenue Service examiners to review 100 registered digital currency providers as well as others that have not registered, Sigal Mandelker said in prepared testimony to the Senate Banking Committee on Wednesday. The department is also working with the Justice Department to pursue money laundering cases.”

Bitcoin falls below $10,000. CNN Money’s Nathaniel Meyersohn: “Bitcoin keeps tumbling. The price of the volatile digital currency briefly dipped below $10,000 around 7 a.m. ET on Wednesday, its lowest level since late November, according to data from CoinDesk.com. Bitcoin has dropped nearly 30% this week and has lost almost half of its $19,343 peak value on December 16. Bitcoin approached its record as it launched on futures exchanges in the United States. But it has since fallen sharply. Other popular cryptocurrencies ethereum and ripple also have posted double-digit losses. One virtual currency exchange, Bitconnect, dived 93% late Monday. It’s unclear why bitcoin has had a rough week. Cryptocurrency is a murky market with frequent swings.”

Ripple founder loses $44 billion. CNBC’s Evelyn Cheng: “The digital currency plunge has wiped billions from the paper fortune of a cryptocurrency billionaire in just a few weeks. Ripple’s XRP coin has fallen 74 percent from an all-time high of $3.84 hit on Jan. 4, erasing $44 billion from the holdings of Chris Larsen, co-founder and executive chairman of Ripple. With XRP trading near $1 Wednesday, Larsen now holds the equivalent of just $15.8 billion, according to CNBC calculations using figures from Forbes. Citing sources at Ripple, Forbes said earlier this month that Larsen has 5.19 billion of XRP and a 17 percent stake in the start-up. Ripple holds 61.3 billion of the 100 billion XRP coins in existence. At XRP’s peak on Jan. 4, Larsen was worth $59.9 billion. That made him one of the five richest people in the U.S. and wealthier than Google’s founders, based on Forbes’ rich list.”

Stock market endangered? CNBC’s Stephanie Landsman: “A sustained sell-off in the cryptocurrency market will hit the stock market where it hurts, one major Wall Street firm warns. It’s a scenario investors are underestimating, according to Wells Fargo Securities’ Christopher Harvey. ‘We see a lot of froth in that market. If and when it comes out, it will spill over to equities,’ the firm’s head of equity strategy said Tuesday… ‘I don’t think people are really ready for that.'”

Goldman’s No. 2 Allegedly Swindled Out of $1.2 Million of Wine by Assistant

A former personal assistant to Goldman Sachs Group Inc. Co-President David Solomon faces federal charges that he stole more than $1.2 million of rare wine from his boss.

Bloomberg

BlackRock Lets Its Hair Down by Offering Unlimited Time Off

BlackRock Inc., taking a page from Silicon Valley where ping-pong tables and on-site gyms are common perks, is offering unlimited time off.

Bloomberg

THE REGULATORS

Fannie, Freddie regulator: Take them private. Bloomberg’s Joe Light: “Fannie Mae and Freddie Mac’s regulator is throwing its voice into the debate about what to do with the two companies at the center of the U.S. mortgage system. In a proposal obtained by Bloomberg News, Federal Housing Finance Agency Director Mel Watt wrote that he and agency staff believe the mortgage market should be supported by shareholder-owned utilities with regulated rates of return and an explicit government guarantee of mortgage bonds. Watt sent the document, titled ‘Federal Housing Finance Agency Perspectives on Housing Finance Reform’ along with a letter dated Tuesday to Senate Banking Chairman Michael Crapo, an Idaho Republican, and Senator Sherrod Brown of Ohio, the panel’s top Democrat. By sharing the perspectives now, ‘we seek to provide our views independently and transparently to those who have requested them while continuing to provide technical assistance to the committee and its members on other proposals that may be introduced,’ Watt wrote.”

Mulvaney moves to overhaul CFPB. LA Times’s Jim Puzzanghera: “On Wednesday, Mulvaney announced he was launching a review of the entire operation of the consumer watchdog agency created in the wake of the 2008 financial crisis. The bureau has provided Americans with billions of dollars in refunds and debt relief, often at banks’ expense. Republicans and many financial firms have complained that it has been too aggressive… The bureau said it would formally request public input about whether it is ‘fulfilling its proper and appropriate functions to best protect consumers.’ It will seek comment on its enforcement of consumer protection laws, drafting of regulations, oversight of financial firms, monitoring of the marketplace and public education. The first function to be examined: how the bureau demands information from financial firms during investigations.”

Asks financial firms for complaints. The Hill’s Sylvan Lane: The CFPB “is asking the firms its regulates to submit complaints about the agency’s core actions. The CFPB announced Wednesday that the agency will ask ‘for evidence to ensure the bureau is fulfilling its proper and appropriate functions to best protect consumers.’ The request is the latest step forward in acting Director Mick Mulvaney’s effort to draw back the bureau’s aggressive regulatory and enforcement actions. Mulvaney said in a Wednesday statement that it’s ‘natural for the Bureau to critically examine its policies and practices to ensure they align with the Bureau’s statutory mandate.'”

Cordray blasts. More from The Hill: “The former director of the… CFPB blasted his successor in a series of tweets Wednesday for attempting to unwind the agency’s rule on payday lending. Richard Cordray, the bureau’s first director, panned the CFPB’s plans as ‘truly shameful action by the interim pseudo-leaders’ of the bureau.” … ‘Let’s see the case be made, with full debate, on whether the zealots and toadies can justify repealing a rule to protect consumers against extortionate payday loans,’ Cordray continued.”

Hoenig criticizes banking bill. Reuters’s Pete Schroeder: “A top official at a leading U.S. bank regulator is airing concerns about a Senate bill that would ease banking rules, saying parts of it could “significantly weaken” critical protections. Thomas Hoenig, the vice chair of the Federal Deposit Insurance Corporation, warned lawmakers that efforts to ease new rules around leverage and proprietary trading could encourage banks to take on excessive amounts of risk, and put the stability of the financial system at risk. Hoenig said he was broadly supportive of the bill primarily aimed at easing rules for smaller banks, crafted by Republicans and moderate Democrats on the Senate Banking Committee, but has concerns about a pair of key sections. In particular, Hoenig warned Congress’s attempts to relax burdens around the Volcker Rule and the supplementary leverage ratio would do more harm than good.”

SCOTUS considers overtime rule. Washington Examiner’s Sean Higgins: “Looking under the hood and figuring out what is wrong is a popular cliche, but on Wednesday, the Supreme Court examined whether the workers who actually do that should be guaranteed overtime pay. The justices heard oral arguments in Encino Motorcars v. Navarro, a case involving whether the Fair Labor Standards Act’s overtime rules extend to “service advisers” at auto dealerships. It is the second time it has heard the case. Service advisers are the dealership employees who tell customers what repairs or other work their cars need. Congress exempted them from the overtime regulation in 1966, but in 2011, the Obama administration changed the rule and said service advisers should be able to claim overtime pay.”

New late trading method gets SEC ok. Bloomberg’s Annie Massa: “Cboe Global Markets Inc. got regulators’ permission to challenge its chief rivals in U.S. equities, the New York Stock Exchange and Nasdaq Stock Market, during their crucial end-of-day auctions. The U.S. Securities and Exchange Commission will let the company begin Cboe Market Close, which the company says is a lower-cost way to carry out certain closing trades that may otherwise be completed at markets owned by NYSE Group and Nasdaq Inc. NYSE and Nasdaq had argued against approval, saying Cboe’s offering could tarnish the critical role played by auctions that set closing levels for thousands of U.S. stocks. NYSE and Nasdaq both stand to lose volume from any mechanism threatening their closing auctions. Cboe countered that their concerns were overblown, since some brokers already provide a similar function for customers. The SEC came down in favor of Cboe, according to a filing Wednesday.”

CHART TOPPER

From Axios’s Chris Canipe and Steve LeVine: “Manufacturing jobs are up sharply from the recession:”

DAYBOOK

Today

  • The American Enterprise Institute holds an event on “New thinking about poverty and economic mobility.”
  • The Cato Institute Policy Perspectives 2018 hosts a discussion on “A Fiscal Rule to Tame Federal Debt?”

Coming Up

  • The SEC-NYU Dialogue on Securities Markets – Shareholder Engagement will be held in New York on Friday. 

THE FUNNIES

From The Post’s Tom Toles: 

BULL SESSION

Sen. Lindsey Graham tells lawmakers: “Stop the s-show and grow up:” 

Here’s an ongoing list of White House staff, Cabinet members, and federal appointees who quit or were fired under Trump:

Here’s how tech companies are using algorithms to prevent extremist content:

Stephen Colbert talks about how “Fire and Fury” author Michael Wolff got access to the White House: 

Apple pledges to invest $350 billion and produce 20,000 jobs towards the U.S. within next 5 years

stated Wednesday that it’ll spend $350 billion on development and make 20,000 jobs within the U . s . States within the next 5 years, outlining the very first time the way it invested within the U.S. economy following a new tax law passed late this past year.

Apple stated that as needed through the new law, it’ll pay $38 billion in taxes on its massive cash holdings overseas. The main one-time payment may be the largest announced as an effect of the tax law, experts stated.

“On the main one hands, this can be a record payment. However, it shows how effective they have been at gaming the system” all over the world, stated Edward Kleinbard, legislation professor in the College of Los Angeles.

Because of the new corporate tax rate of 15.five percent on overseas cash, that signifies Apple is coming back around $245 billion in cash towards the U . s . States. In the last earnings report, the organization reported it held $252 billion in cash overseas.

Apple has for a long time faced scrutiny and critique all over the world because of its tax policies. The organization lately decided to pay greater than $100 million (81 million pounds) in taxes to British government bodies after an audit.

It’s also lobbied for that U . s . States to ease tax rates on foreign profits introduced to the nation, stating that such changes allows the organization to take a position more freely within the U.S. economy.

“We believe deeply in the strength of American resourcefulness, and we’re focusing our investments in places that we may have a direct effect on job creation and job readiness,” Apple leader Tim Prepare stated inside a statement. “We possess a deep feeling of responsibility to provide to our country and those who help to make our success possible.”

That echoes statements Prepare made this past year, as he told the brand new You are able to Occasions that companies possess a “moral responsibility” to grow the economy within the U . s . States.

The White-colored House applauded Apple’s announcement. “Just because the President guaranteed, making our companies more competitive worldwide is converting straight into benefits for that American worker, through elevated wages, better benefits, and new jobs,” Lindsay Walters, a deputy White-colored House press secretary, stated inside a statement. Others, including AT&T, American Airlines and Walmart,  also have linked worker bonuses to the brand new law.

Additionally towards the tax payment, Apple stated that more than the following couple of years it’ll considerably increase the 84,000 employees it’s within the U . s . States. The brand new jobs can come from hiring at Apple’s current locations and from the new campus centered on tech support team for purchasers. Apple will announce its location later this season. Additionally, it stated it intends to build several new data centers within the U . s . States — including formerly announced projects in New York and Iowa — and stated it broke ground on the new facility Wednesday in Reno, Nev. Overall, Apple will expend $10 billion on building data centers included in a $30 billion purchase of capital expenses.

It isn’t obvious the amount of a big change this really is from what the organization is presently spending. Apple has spent between $12 billion and $15 billion on projects for example facilities or land globally previously couple of years, although it hasn’t stated the amount of that visited U.S. projects.

The organization didn’t say the amount of its investments announced Wednesday were already planned.

Apple has faced repeated critique from U.S. lawmakers because of not generating of their products, like the iPhone, the iPad and Mac computers, within the U . s . States. Apple does have hardware within the U . s . States, but many of their goods are created and put together in China. The organization has recently centered on building more facilities within the U.S.

It’s also growing how big a formerly announced manufacturing fund to aid its network of suppliers for parts which go into its devices. That fund increases from $1 billion to $5 billion. This fund has bankrolled initiatives in Kentucky and Texas Apple didn’t offer further information on where it might purchase U.S. manufacturing later on.

Further investment may also get into coding and application-development education initiatives.

Analysts stated that overall this news will reflect well on Apple. “We believe 80% of Apple’s motivation associated with today’s news is perfect for economic reasons, 20% for political reasons, and both are great for the organization lengthy-term,” stated Gene Munster, a longtime Apple analyst and managing partner of Loup Ventures, stated inside a note to investors.

Apple’s stock closed up 1.65 % to $179.10 on Wednesday.

Find out more:

Walmart stated it’s giving its employees an increase. After which it closed 63 stores.

Firms that tie bulletins to goverment tax bill earn goodwill with Trump

Apple states it’ll pay $38bn in foreign cash taxes and make 20,000 US jobs

  • Tech giant states it’ll repatriate some overseas cash holdings
  • Apple has faced sustained critique for tax evasion policies

Apple chief executive Tim Cook said: ‘We have a deep sense of responsibility to give back to our country.’ Apple leader Tim Prepare stated: ‘We possess a deep feeling of responsibility to provide to our country.’ Photograph: John Forces/APApple stated on Wednesday it might create a one-time payment of $38bn to repatriate a number of its vast overseas cash holdings.

the Wall Street Journal that Apple’s ceo, Tim Prepare, had guaranteed to construct three “big, big, big” plants in america included in attorney at law about tax reform.

The organization may be the latest to announce a 1-off payment because of recent changes to all of us tax law, which enables companies to pay for a levy of 15.5% on overseas cash holdings which are repatriated towards the US.

Commenting around the company’s plans, Prepare stated: “We possess a deep feeling of responsibility to provide to our country and those who help to make our success possible.”

Apple hasn’t specified the amount of its cash pile it promises to repatriate.

In 2013, a Senate committee accused Apple of utilizing a “highly questionable” web of offshore vehicles to prevent having to pay taxes in america. Senator John McCain stated his constituents were “mad as hell” to understand the world’s greatest company was having to pay tax rates which were sometimes less than 1%.

“I’ve never witnessed anything such as this,” he stated.

Based on the Paradise Papers, a leak of 13.4m files from offshore providers and tax havens’ company registries printed through the Protector along with other worldwide media, within the wake of america and EU’s criticisms Apple secretly shifted areas of its empire to Jersey included in an intricate rearrangement to help keep its low tax rates.

In December, the Irish government was made to start collecting $15bn the Eu states Apple has unfairly prevented in taxes. Apple is fighting the choice.

Apple to Pay $38 Billion in Taxes on Offshore Cash: DealBook Briefing:

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Good Wednesday. Here’s what we’re watching:

• Apple will pay $38 billion in repatriation tax.

• Could antitrust law fell the tech giants?

•Bank of America reported $2.4 billion in fourth-quarter profit, as well as a $2.9 billion charge tied to the new tax law.

• Goldman Sachs reported a $1.9 billion loss, and a $4.4 billion tax charge.

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Apple will pay $38 billion in repatriation tax.

The tech giant said it will pay $38 billion in taxes to repatriate its overseas cash because of the new law.

As of late September, Apple held about $252 billion in cash offshore.

Under the new tax law, foreign earnings sitting offshore would be considered to be automatically repatriated and taxed at reduced rates.

The iPhone maker also said it expects to invest over $30 billion in capital expenditures in the United States over the next five years.

Could antitrust law fell the tech giants?

That’s the provocative question posed by Greg Ip of the WSJ. And it reflects governments’ growing wariness toward the tech industry.

Google, Amazon and Facebook aren’t like the Standard Oil or AT&T of old, gouging consumers on price. (Indeed, many of their services are free.) But if the question is “Are consumers better off?” then could there be an opening for regulatory action?

More from Mr. Ip:

If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department’s Antitrust Division under Barack Obama.

Where tech has support: In its efforts to keep net neutrality regulations, with a lawsuit against the F.C.C. by 22 state attorneys general and a bill by Senate Democrats to undo the repeal using the Congressional Review Act.

Goldman posts first quarterly loss in six years.

Goldman once seemed invincible. Its trading business was a profit machine.

This morning it posted a quarterly loss in part because of the poor performance in its trading unit.

The numbers:

• $1.9 billion. Goldman’s fourth-quarter loss.

• $4.4 billion. The charge Goldman took related to the new tax law, which wiped out nearly half of Goldman’s earnings for the year, according to the WSJ.

• $5.68. The Wall Street firm’s profit per share excluding the tax-related charge, beating the consensus estimate of $4.90 from Wall Street analysts.

•$7.8 billion. Goldman’s revenue for the quarter, down 4 percent. Goldman is the only big bank to report a decline in revenue so far.

• $2.37 billion. Goldman’s trading revenue for the fourth quarter, down 34 percent from a year ago. That was the steepest decline of any of banks reporting so far. Citigroup, JPMorgan and Bank of America have reported declines in trading revenue of 19 percent, 17 percent and 9 percent.

• $1 billion. Goldman’s revenue from buying and selling bonds, commodities and currencies, half of what it generated a year ago. To put that in perspective: Goldman’s fixed-income division at its peak churned out nearly a billion dollars every two weeks.

In unrelated Goldman news…

Federal prosecutors in Manhattan unsealed an indictment charging Nicolas De-Meyer, 40, with stealing $1.2 million worth of rare wine from a former employer. The former employer in question was Mr. Solomon, who employed Mr. De-Meyer as a personal assistant, according to two sources familiar with the matter.

According to the indictment, the wine was stolen from around October 2014 to around October 2016, when Mr. De-Meyer had been asked to transport it from his former employer’s Manhattan apartment to his wine cellar in East Hampton, N.Y.

Mr. De-Meyer was arrested in Los Angeles on Tuesday, according to a spokesman for the Los Angeles federal prosecutor’s office. He could not immediately be reached for comment.

“The theft was discovered in the fall of 2016 and reported to law enforcement at that time,” a Goldman spokesman said.

Excluding tax hit, BofA posts biggest profit in more than a decade.

Bank of America reported $2.4 billion in fourth-quarter profit, after taking a $2.9 billion charge tied to the new tax law.

The numbers:

• $5.3 billion, or 47 cents a share. BofA’s profit in the fourth quarter excluding the tax-related charge. Analysts had expected the bank to report earnings of 44 cents per share.

• $21.1 billion. BofA’s earnings for 2017, excluding the tax-related charge. That matches its biggest annual profit since 2006.

•$20.4 billion. The bank’s revenue for the fourth quarter, up from $19.99 billion a year ago.

•$2.66 billion. BofA’s fourth-quarter trading revenue, down about 9 percent from a year ago.

• $11.46 billion. The bank’s net-interest income, up 11 percent.

CreditTimothy A. Clary/Agence France-Presse — Getty Images

The new tax code and banks: short-term pain, long-term gain

Let’s recount the hits that U.S. banks took from the tax overhaul:

• Citigroup: $22 billion

• JPMorgan Chase: $2.4 billion

• Goldman Sachs: $4.4 billion

We’ll ignore Wells Fargo for now (it gained). The bigger point is that, thanks to lower corporate rates and preferential treatment for pass-through entities, financial institutions are some of the new code’s biggest winners.

More from Jim Tankersley of the NYT:

“The good news is that tax reform has produced both current and future benefits for our shareholders,” PNC’s president and chief executive, Bill Demchak, told analysts on Friday. He said the bank’s preference would be to divert the tax savings “toward dividend” — which is to say, to return a higher dividend to shareholders.

CreditRichard Drew/Associated Press

G.E.’s problems have investors thinking ‘breakup’

The conglomerate itself isn’t planning on going that far just yet.

Here’s John Flannery, its chief, on a conference call yesterday:

“We are looking aggressively at the best structure or structures for our portfolio to maximize the potential of our businesses. Our results, over the past several years, including 2017 and the insurance charge, only further my belief that we need to continue to move with purpose to reshape G.E.”

The context

Mr. Flannery didn’t say anything out of line with his past remarks. It’s just that he said it as G.E. announced an unrelated $6.2 billion charge connected to its legacy insurance portfolio.

Other conglomerates, from Honeywell to United Technologies to Tyco, have explored restructuring to varying degrees, as Wall Street analysts question the viability of the model.

G.E. and its advisers are still thinking about how to reshape the 125-year-old group, whose complexity may mask yet more problems. The company promises an update in spring, and is unlikely to announce something that only fiddles around the edges. But don’t expect plans for it to become three or four fully separate companies.

Critics demand more boldness

• Lex writes, “Once a paragon of management acumen, it is now a rolling train wreck of unexpected and expensive blunders.” (FT)

• Brook Sutherland writes, “The reasons for keeping G.E. together — shared resources and technology — look increasingly tenuous.” (Gadfly)

• Justin Lahart and Spencer Jakab write, “The problem is that G.E.’s parts might be worth a lot less than even the company’s sharply diminished value today.” (Heard on the Street)

CreditT.J. Kirkpatrick for The New York Times

Government shutdown forecast: cloudy

The deadline: 12:01 a.m. Eastern on Saturday

The issues

• Immigration, of course: President Trump still insists on funding for a border wall and Democrats are fuming over his comments on African countries.

• Republicans are weighing whether to use funding for the Children’s Health Insurance Program as a carrot — or stick — for Democrats to join a stopgap funding measure.

The state of play

Red-state Democrats are uneasy about allowing a shutdown in an election year. Some Republicans are irked by a stream of temporary funding resolutions, rather than a full agreement that would permit more military spending.

House Speaker Paul Ryan’s proposal for a continuing resolution — which includes delays to several health care taxes in addition to CHIP funding — has support among many, but not all, Republicans. It has little among House Democrats.

The politics flyaround

• Steve Bannon has been subpoenaed by both Robert Mueller and the House Intelligence Committee. (NYT)

• The C.F.P.B. will reconsider rules on high-interest payday loans, in a potential win for the industry. (WSJ)

• N.Y. Governor Andrew Cuomo unveiled a state budget meant to counter the tax-code changes that hurt high-tax states: “Washington hit a button and launched an economic missile and it says ‘New York’ on it, and it’s headed our way.” (NYT)

• Support for the new tax code has grown, according to a SurveyMonkey poll. (NYT)

• G.M.’s chief, Mary Barra, urged Mr. Trump to be cautious about withdrawing from Nafta. (NYT)

• How Michael Wolff got into the White House. (Bloomberg)

CreditPhoto illustration by Delcan & Company

Forget the Bitcoin frenzy

The biggest thing about virtual currencies isn’t how much their prices rise (or fall). It’s the technology that makes them work, argues Steven Johnson in the NYT Magazine.

More from Mr. Johnson:

What Nakamoto ushered into the world was a way of agreeing on the contents of a database without anyone being “in charge” of the database, and a way of compensating people for helping make that database more valuable, without those people being on an official payroll or owning shares in a corporate entity.

We’ll count him as a skeptic: Dick Kovacevich, the former Wells Fargo C.E.O., told CNBC that he thinks Bitcoin is “a pyramid scheme” that “makes no sense.”

Beware cryptoheists: North Korea looks to be using the same malware found in the Sony Pictures hack and the Wannacry assault against digital currency investors.

Virtual currency quote of the day, from Bloomberg:

“I have a Zen philosophy that you just go with the flow,” said George Tasick, a part-time cryptocurrency trader in Hong Kong whose day job is making fireworks. “I’m not really changing my behavior in any way.”

The issues in selling the Weinstein Company

Issue one: Some potential buyers may want to pick up the troubled studio through the bankruptcy process, to cleanse it of legal liabilities.

Issue two: Advocates for women who have brought allegations against Harvey Weinstein worry that could deny them justice.

More from Jonathan Randles and Peg Brickley of the WSJ:

A Chapter 11 filing would halt lawsuits brought by women against the studio, forcing them to line up with low-ranking creditors to await their fate. Once the money from a sale comes in, bankruptcy law dictates who gets paid first — the banks that kept Weinstein Co. in business — and who gets paid last — women claiming that Weinstein Co. was part of Mr. Weinstein’s pattern of alleged sexual misconduct.

But it’s complicated. A bankruptcy filing could provide legal structures for Mr. Weinstein’s accusers, like a judge’s supervision of sales and settlements.

A suitor from the past: Among the bidders is the previous studio founded by the Weinstein brothers, Miramax, according to Bloomberg.

What about RICO? DealBook’s White Collar Watch takes a look at using the racketeering law against Mr. Weinstein and his company:

RICO lawsuits are tempting. They allow a plaintiff to sue a variety of defendants by claiming that they acted together and seek an award of triple damages, a bonanza in some business disputes that can run into millions of dollars. But these cases should also come with a bright red warning sign: Tread lightly or see your case thrown out of court before it even gets started.

CreditTony Cenicola/The New York Times

The M. & A. flyaround

• Nestlé finally struck a deal to sell its U.S. confectionary business, with Ferrero paying $2.8 billion. Gadfly asks if Hershey should jump on the deal bandwagon. (NYT, Gadfly)

• Qualcomm had a busy deal day yesterday. It made its case against Broadcom’s $105 billion hostile bid, as its own $38.5 billion offer for NXP Semiconductor was rejected by the money manager Ramius. (Qualcomm, Ramius)

• Silver Lake put up a hefty $1.7 billion equity check as part of its $3.5 billion bid for Blackhawk Network. (NYT)

• Celgene is in talks to buy Juno Therapeutics, maker of a cancer treatment, according to unidentified people. (WSJ)

The Speed Read

• Bill Miller, the value investor who beat the S. & P. 500 15 years running (and whose faith in banks was mocked in the movie “The Big Short”), has donated $75 million to the philosophy department of Johns Hopkins University. (NYT)

• YouTube said it had altered the threshold at which videos could accept advertisements and pledged more oversight of top-tier videos. It’s said similar things before. (NYT)

• Amazon has advertised for an expert in health privacy regulations, suggesting it plans to work with outside partners that manage personal health information. (CNBC)

• A federal judge indicated he would approve a $290 million settlement by Pershing Square Capital Management and Valeant Pharmaceuticals with Allergan shareholders who accused them of profiting improperly from a failed takeover bid. (WSJ)

• Informa, which owns the shipping journal Lloyd’s List, is in talks to buy the exhibitions and events company UBM, creating a company worth more than 9 billion pounds, or about $12.4 billion. (FT)

• The National Retail Federation’s annual trade show is starting to look more like CES. (NYT)

• Joseph A. Rice, who fought a hostile takeover of the Irving Bank Corporation as its chairman and chief executive in the 1980s, died on Jan. 8 at 93. (NYT)

• Greenlight Capital’s David Einhorn is betting on Twitter, saying revenue should grow after user-experience improvements. (Bloomberg)

• Melrose Industries, which specializes in turning around manufacturers, has made a hostile public bid worth about $10 billion for GKN, a British maker of aerospace and automotive parts that could face trading issues as Brexit looms. (Bloomberg)

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You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback. Please email thoughts and suggestions to [email protected].

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Tencent, the $500bn Chinese tech firm you might never have come across

It’s surpassed Facebook, bought stakes in Snapchat, Tesla and Hollywood films, and it has silently risen to rival Google and Netflix

WeChat mascots at Tencent office in Guangzhou, China. WeChat mascots at Tencent office in Guangzhou, China. Photograph: Bobby Yip/ReutersIt is China’s web giant and it has a string of high-profile investments spanning Snapchat, Spotify, Tesla and Hollywood film and television. It’s a sprawling corporate giant which has lately surpassed Facebook to get the world’s fifth best listed company – but couple of, in the western world a minimum of, will have come across Tencent, though it may be worth half a trillion dollars and rising.

China may be the world’s most populous digital market and also the protection afforded by condition censorship with the so-known as great firewall – that has meant no competition from Facebook, Google, Twitter and Netflix – helps Tencent flourish because it launched nearly 2 decades ago in Shenzhen. However in the this past year the shares happen to be supercharged – climbing from under HK$200 (£18) at the outset of 2017 to HK$442 now – and the need for the organization has soared.

You will find three cornerstones of Tencent’s business – its messaging application WeChat the greatest mobile gaming franchises on the planet as well as an ecosystem built around its 1 billion users that apes most of the services provided through the Plastic Valley firms that don’t be employed in China.

Their Netflix-style Tencent Video service – the greatest in China with exclusive content including National football league games and Cinemax series for example Bet on Thrones – greater than bending in dimensions within the this past year, attracting greater than 40 million having to pay subscribers.

“They link of mutual benefit using the Chinese condition,” states Jamie McEwan, an analyst at Enders. “They happen to be permitted to develop and massively diversify their companies without the amount of scrutiny or competition you may see in western countries.”

WeChat app icon. WeChat application icon. Photograph: Reuters File Photo/Reuters

Late this past year, Tencent grew to become the very first Chinese firm to pass through the $500bn stock exchange valuation mark, supplanting Facebook because the world’s fifth greatest firm, a bittersweet moment for company co-founder Ma Huateng, 46, also referred to as “Pony” Ma.

In 2014, Tencent have been around the edge of purchasing What’sApp, which may make it a worldwide power player overnight. The organization was near to an offer when talks needed to be delayed to ensure that Ma could undergo back surgery. A panicked Mark Zuckerberg got wind from the move and swooped, tabling a massive $19bn rival bid – undoubtedly Facebook’s greatest deal and most two times the sale produced by Tencent – to determine from the threat.

Thwarted but undeterred, late this past year Ma required a 12% holding in Snapchat (he’d designed a small purchase of 2013) inside a busy year which incorporated buying 5% of Elon Musk’s electric vehicle firm Tesla and swapping minority stakes in the music streaming business with Spotify.

Tencent Music, which dwarfs efforts by Apple and Spotify in China, is anticipated to create a $10bn stock exchange listing this season.

Tencent also started up its domination of mobile gaming, paying $8.6bn for that Finnish company Supercell, maker of two greatest games on the planet, Clash of Clans and Clash Royale. Gamers play ‘World of Warcraft’ in Cologne, Germany. Gamers play ‘World of Warcraft’ in Perfume, Germany. Photograph: Oliver Berg/AFP/Getty Images

Additionally, it owns the la game-maker Riot, behind the large Lol franchise, and it has stakes in Gears of War maker Epic and Activision Blizzard, the place to find Cod, Wow and Chocolate Crush Saga.

Tencent also owns probably the most lucrative game on the planet, Honor of Nobleman, making about $1bn one fourth and it has 200 million monthly players.

It’s demonstrated so addictive in games-mad China the government cautioned Tencent within an article within the condition-owned People’s Daily this past year saying it had been “poison” along with a “drug” that harms kids.

The chance of a government attack on a single (or even more) of Tencent’s golden other poultry – the organization depends on gaming in excess of 40% of total revenues – spurred jittery investors to wipe almost $18bn off its stock exchange value. Tencent quickly introduced one-hour deadlines for less than-12s and 2 hrs for 12- to 18-year-olds.

Analysts estimate that Tencent digital services are utilized by greater than two-thirds from the Chinese population. Chinese users with each other spend 1.7bn hrs each day around the company’s apps.

The company began in cramped Shenzhen offices within the late 1990s, quickly creating a bad status for cloning e-books for that Chinese market, however it was the launch of WeChat this year that supercharged their strategy.

The WeChat eco-product is so broad it’s similar to moving the majority of the apps on the typical western user’s cell phone into one.

“It is when compared with What’s Application or Facebook messenger but it’s not necessarily,” states Xiaofeng Wang, a Singapore-based analyst with Forrester. “It has payment systems, smart city choices like the capability to schedule appointments in a bank, a physician, pay traffic fines or make visa applications and e-commerce.”

Tencent’s ambition to become a crucial part of digital daily existence means it holds a dizzyingly diverse selection of interests including in Didi, China’s response to Uber, the nation’s second greatest e-tailer JD.com and Hike, a messaging service famous India. In December, it also did an Amazon . com, that has gone real-world buying store Whole-foods, going for a stake in a single of China’s largest supermarket chains, Yonghui Superstores.

Tencent was a backer of the film Kong: Skull Island. Tencent would be a backer from the film Kong: Skull Island. Photograph: AP

Additionally, it includes a stake in Hollywood film distributor STX Entertainment, behind movies for example Bad Moms and all sorts of Money on the planet, while movie arm Tencent Pictures would be a backer of blockbuster Kong: Skull Island.

“The ultimate objective of all of their investments would be to boost the services they have developed, to aid the eco-system,” states Ruomeng Wang, senior analyst at IHS Markit.

The protected market problems that have permitted Tencent to flourish, and also the vast variations between Chinese and foreign internet users’ web habits, has witnessed the organization struggle abroad. Seven years after launching WeChat it’s yet to interrupt into every other market, even though it has earmarked Malaysia.

Analysts believe a vital focus is going to be on individuals huge figures of Chinese diaspora and vacationers by looking into making WeChat features like payment available overseas, instead of make and try the application a completely-fledged Facebook rival. The payment product is already obtainable in places like Harrods and Selfridges.

“WeChat and Tencent attempted strongly expanding into worldwide markets like South Usa, Europe as well as the united states however it didn’t exercise very well in mainstream western markets where existing players like What’s Application are extremely established,” states Forrester’s Wang. “Their global expansion will occasionally target Chinese vacationers, with various strategies in emerging markets like East Asia.” Tencent co-founder Ma Huateng aka Pony Ma. Tencent co-founder Ma Huateng also known as Pony Ma. Photograph: ChinaFotoPress/Getty Images

Tencent details

It’s ironic that the company worth over $500bn is actually known as Tencent, which means British as “soaring information”.

Co-founder Ma Huateng, nickname Pony Ma, may be the 14th wealthiest person on the planet having a fortune of just about $50bn, one place below Google co-founder Sergey Brin.

Suitable for its status like a global tech giant the organization is aping its Plastic Valley rivals with a brand new $600m twin skyscraper headquarters.

Tencent is among three Chinese internet behemoths, including Baidu and Alibaba, known with each other as BAT. China’s response to Plastic Valley’s power club referred to as FANGs – Facebook, Amazon . com, Netflix and Google.

Every year every Tencent worker, over fifty percent who operate in research and style, is offered the opportunity to take part in a business-wide singing competition and also to “shine brightly on stage”.

Pony Ma is deputy from the National People’s Congress, China’s legislative branch of presidency, politically helpful inside a country famous for cracking lower on companies that will get offside with Beijing.•Follow Protector Business on Twitter at @BusinessDesk, or join the daily Business Today email here.

Big Bets on the.I. Open a brand new Frontier for Nick Start-Ups, Too

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Bay Area — For a long time, tech industry financiers demonstrated little curiosity about start-up firms that made computer chips.

How possibly could a start-up contend with a goliath like Apple, which made the chips that ran greater than 80 % from the world’s pcs? Even just in areas where Apple didn’t dominate, like smartphones and gaming devices, there have been the likes of Qualcomm and Nvidia that may squash an upstart.

However came the tech industry’s latest big factor — artificial intelligence. A.I., it switched out, works more effectively with new types of computer chips. All of a sudden, vc’s didn’t remember all individuals forbidding roadblocks to success for any youthful nick company.

Today, a minimum of 45 start-ups will work on chips that may power tasks like speech and self-driving cars, and a minimum of five of these have elevated greater than $100 million from investors. Vc’s invested greater than $1.5 billion in nick start-ups this past year, nearly doubling the investments made 2 yrs ago, based on the research firm CB Insights.

The explosion is similar to the sudden proliferation of PC and difficult-drive makers within the 1980s. While they are businesses, and never all can survive, they’ve the ability to fuel a time period of rapid technological change.

It’s doubtful that the companies fantasize about challenging Apple mind-up with their very own nick factories, which could take vast amounts of dollars to construct. (The beginning-ups hire others to create their chips.) However in designing chips that may supply the particular type of computing power required by machines finding out how to do increasingly more things, these start-ups are racing toward 1 of 2 goals: Look for a lucrative niche or get acquired. Fast.

“Machine learning along with a.I. has reopened questions around building computers,” stated Bill Coughran, who helped oversee the worldwide infrastructure at Google for quite some time and it is now someone at Sequoia, the Plastic Valley investment capital firm. Sequoia has committed to Graphcore, an english start-up that lately became a member of the $100 million club.

Through the summer time of 2016, the modification was apparent. Google, Microsoft along with other internet giants were building apps that may instantly identify faces in photos and recognize instructions spoken into smartphones by utilizing algorithms, referred to as neural systems, that may learn tasks by identifying patterns in considerable amounts of information.

Nvidia was most widely known to make graphics processing units, or G.P.U.s, that have been made to help render complex images for games along with other software — also it switched out they labored very well for neural systems, too. Nvidia offered $143 million in chips for that massive data centers operated by the likes of Google around prior to that summer time — double the prior year.

Apple scrambled to trap up. It acquired Nervana, a 50-worker Plastic Valley start-up which had began building a b.I. nick on your own, for $400 million, based on a study in the tech news site Recode.

Next, another Plastic Valley start-up, Cerebras, grabbed five Nervana engineers because it, too, developed a nick for one.I.

By early 2018, based on a study by Forbes, Cerebras had elevated greater than $100 million in funding. So had four other firms: Graphcore another Plastic Valley outfit, Wave Computing and 2 Beijing companies, Horizon Robotics and Cambricon, that is supported by china government.

Raising profit 2015 and early 2016 would be a nightmare, stated Mike Henry, leader in the A.I. nick start-up Mythic. But “with the large, aquisition-hungry tech companies all barreling toward semiconductors,” which has altered, he stated.

China has proven a specific curiosity about developing new A.I. chips. Another Beijing nick start-up, DeePhi, has elevated $40 million, and also the country’s Secretary of state for Science has clearly known as for producing Chinese chips that challenge Nvidia’s.

Because it’s a brand new market — and since there’s such want this latest type of processing power — many believe this is among individuals rare possibilities when start-ups are able against entrenched giants.

The very first big change will likely are available in the information center, where the likes of Graphcore and Cerebras, that has been quiet about its plans, aspire to accelerate the development of new types of A.I. One of the goals are bots that may keep on conversations and systems that may instantly generate video and virtual reality.

Researchers at places like Microsoft and Google, that has built its very own nick for one.I., “train” neural systems by extreme learning from mistakes, testing the algorithms across vast figures of chips for hrs as well as days on finish. They frequently spend time at their laptops, looking at graphs that demonstrate the progress of those algorithms because they study from data. Nick designers wish to streamline this method, packing everything learning from mistakes right into a couple of minutes.

Today, Nvidia’s G.P.U.s can efficiently execute all of the small calculations which go into training neural systems, but shuttling data between these chips continues to be inefficient, stated Scott Grey, who had been an engineer at Nervana before joining OpenAI, a man-made intelligence lab whose founder include Tesla’s leader, Elon Musk.

So additionally to building chips particularly for neural systems, start-ups are rethinking the hardware that surrounds them.

Graphcore, for instance, is building chips which include more built-in memory so they do not need to transmit just as much data backwards and forwards. Other medication is searching at methods for widening the pipes between chips to ensure that data exchange happens faster.

“This isn’t just about building chips but searching at just how these chips are connected together and just how they speak with all of those other system,” Mr. Coughran, of Sequoia, stated.

However this is just area of the change. Once neural systems are trained for any task, additional gear needs to execute that task. At Toyota, autonomous vehicle prototypes are utilizing neural systems as a means of identifying pedestrians, signs along with other objects on the highway. After training a neural network within the data center, the organization runs this formula on chips placed on the vehicle.

Numerous nick makers — including start-ups like Mythic, DeePhi and Horizon Robotics — are tackling this issue too, pushing A.I. chips into devices varying from phones to cars.

It’s still unclear how good these new chips works. Designing and creating a nick takes about 24 several weeks, meaning the first viable hardware counting on them won’t arrive until this season. And also the nick start-ups will face competition from Nvidia, Apple, Google along with other industry giants.

But everybody is beginning from comparable place: the start of a brand new market.

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Perspective: He retooled a battling furniture factory right into a lean machine

I’m fascinated with individuals who buy troubled companies, then fix them making them lucrative.

Gaston “Gat” Caperton’s story is compelling because Caperton, the boy of the former governor, fixed a sickly furniture company in little (population 610) Berkeley Springs, W.Veterans administration., 2 decades ago and runs it even today.

He didn’t market it to XYZ Corporation or perhaps a private-equity firm. He didn’t break up and liquidate the various components.

Caperton has owned Gat Creek furniture, which manufactures beds, tables and chairs from Appalachian cherry trees and transmits them across the nation, since 1996.

“There’s very few people crazy enough to fabricate pine wood furniture within this country nowadays,” Caperton stated. “We’re just a little crazy and also have enjoyed the majority of the ride.”

His next new career found him on the stretcher — and today it’s a $400 million business]

It required him all an hour or so to decide to purchase the ailing furniture factory.

It had been spring 1995, and Caperton, wanting to test his business chops, was touring the Tom Seely Furniture company in Berkeley Springs.

“I made the decision I wished to buy a small company next within my existence,” stated Caperton, now 50. At that time, he was analyzing companies legitimate estate tycoon Mike Zell in Chicago while focusing on a master’s running a business administration during the night. “I thought manufacturing was various and awesome. I needed to locate a small manufacturing business I possibly could buy.”

Enter Tom Seely Furniture. It had been a $ten million-a-year business founded with a 75-year-old former airman with World War II’s Flying Tigers. Also it needed rescuing.

“The manufacturing process would be a disaster,” Caperton stated. “The factory wasn’t clean. There is lots of sawdust around. However it was dirty both in senses. Inventory was all around the floor. Stuff wasn’t organized. There have been piles of works-in-progress throughout.”

Caperton was an hour or so in to the tour as he had his diagnosis.

“If you can fix the manufacturing within this operation, allow it to be leaner and much more efficient, you can generate lots of cash to pay for lower your debt and also have a lucrative business,” Caperton stated later.

The prospective was $3 million within the half-built, unsold furniture and recycleables laying round the factory. Reducing that by half and ensure that is stays this way would mess up $1.5 million in cash that might be accustomed to lessen the debt.

In the finish from the tour, he switched to Seely and stated he would proceed to the city and run the company in a manner that Seely would are proud of.

Caperton had another demand: He wanted Seely to invest in the $4 million purchase cost.

“One, I did not are able to afford,” he stated. “And two, if he’d not finance me, I’d think the company would be a ticking time explosive device. I’d leave.”

Seely decided to a 5-year promissory note for around $3 million. Caperton lent and set in the own money to finance all of those other purchase. He grew to become who owns Gat Creek furniture in The month of january 1996. The name originated from a back-yard creek he along with a brother splashed around in throughout their childhood in Charleston.

Caperton began clearing up the company. He implemented an exercise known as “lean manufacturing” which was popularized running a business circles through the Japanese.

“In lean manufacturing, you attempt to get rid of everything your customer doesn’t pay out for,” he stated.

Quite simply, result in the stuff as efficiently as you possibly can and obtain it out of the door towards the customers.

Electrical costs were shaved.

Floors were taken, and so the sawdust was utilized to power the home heating.

New clamps were bought to chop in 50 % of time it required to create some pieces.

He modernized the store with spray booths and baking ovens. He installed dust collectors that stored the environment clean.

Furniture was built one piece at any given time on order in order that it didn’t sit around, awaiting a purchaser.

“If you are able to build stuff individually as efficiently as 10 at any given time, you eliminate inventory and be much more cost-competitive,” Caperton stated.

Inside a year, he saved his $1.5 million and tried on the extender to pay for lower his debt. Almost exactly based on plan. The organization was soon growing 10 % annually and turning an income.

Gat Creek now employs 140 workers at $20 an hour or so, including healthcare, a 401(k) match, holidays and vacation. Gat Creek sells $18 million price of tables, chairs and beds yearly.

The factory turns a six-figure profit. Caperton stated he adopts an income along with a dividend in the profit. He owns 75 % of the organization. The remainder is a member of a brother who resides in California.

“We make a little bit of money,” Caperton stated. “It’s not Apple.”

Caperton is fanatical about keeping costs lower and keeping production lean. He attempts to keep only $200,000 in money on the total amount sheet so he isn’t squandering sources.

The organization sells nothing online. It features a network of 200 traditional furniture retailers (that’s the way i heard about them).

Gat Creek manufactures furniture products for brands for example Room & Board. Another big chunk is perfect for niche customers like the Hershey Hotel, that Gat Creek builds 60 to 70 rooms of furniture every year.

Gat Creek’s gross profit is 15-20 percent.

“We build something for $500 then sell it for $600,” Caperton stated. About 95 % of sales are bed room and dining-room furniture.

Caperton increased up in business family. His father is Gaston Caperton III, who built a effective family-owned insurance provider right into a national business. Caperton III offered the company and joined politics, serving two terms as governor of West Virginia from 1989 to The month of january 1997.

Youthful Caperton’s mother was the late Ella Dee “Dee” Caperton, an old Miss West Virginia and unsuccessful candidate for West Virginia condition treasurer. After divorcing the governor, Dee Caperton gone to live in France, where she ran a little hotel.

Gaston Caperton IV attended Davidson College in New York, graduating in 1990 having a degree in financial aspects before you go to work with Zell, who’d designed a fortune in tangible estate and exchanging companies.

“Sam likes to take those who are smart and hungry and throw them right into a pool and find out whether they can go swimming,” Caperton stated.

A lot of his six years with Zell involved dealing with his portfolio of producing companies.

“I spent considerable time on the highway going interior and exterior these businesses,” Caperton stated. “They made building products, electrical products, nuts-and-bolts manufacturing. I acquired to determine lots of different companies and just how they ran.” He saw the proper way to do things and the wrong manner.

His application towards the College of Chicago foreshadowed his ambition. It incorporated an essay entitled “I Wish to Own My Very Own Business and make Jobs in West Virginia.”

His father, the governor, were built with a suggestion.

“My father stated, ‘I is at Berkeley Springs years back after i was campaigning, and experienced a furniture factory. The man who owned it had been old, why don’t he has a phone call?’”

Youthful Caperton phoned Seely at the begining of 1995. The factory owner mistook the boy for his father, the governor.

“I stated, ‘I’m and not the governor, but as i have you ever at risk, allow me to introduce myself,’ ” Caperton remembered.

He setup a scheduled appointment, required each day removed from his job with Zell making sure he was without a company school class your evening. Caperton travelled to Washington and drove two hrs west. He met Seely after lunch for any factory tour.

And that’s how he found save the small furniture business in Berkeley Springs, W.Veterans administration., and also the 140 approximately families whose livelihoods rely on it.

Jaguar Land Rover to spread out first European R&D center in Ireland

Jaguar Land Rover intends to open its first European development and research base in Ireland so that they can take advantage of the country’s growing tech sector.

Britain’s greatest vehicle maker would be to recruit 150 engineers for any new team to focus on software for autonomous and electrified cars.

The move comes on the top of JLR’s announcement in June it required to hire 5,000 engineers and technical staff – a significant recruitment drive seen as an boost towards the United kingdom economy in front of its departure in the Eu.

The organization stated it’d selected Shannon, in western Ireland, for that new information center since it is seen as worldwide hub for software engineering. Microchip giant Apple, also is racing to create motorists obselete, has already established an investigation facility in Shannon since 2000.

JLR leader Ralf Speth has stated the business’s R&D attempts are dedicated to the UK  Credit: Bloomberg

Ireland more broadly has attracted US tech giants recently using its regulations and tax breaks and easily available property.  Google, Twitter and facebook established bases in the past few years, cementing the country’s status like a magnet for skilled programmers. 

Ralf Speth, leader of JLR, has stated that despite Brexit, their R&D efforts will stay within the United kingdom, citing their “Britishness” among its key selling points, although the organization is expanding its manufacturing bases worldwide.

The organization is presently creating a plant in Slovakia, and already has factories in South america and China to go with the 3 United kingdom plants which presently produce greater than 500,000 cars from the 620,000 vehicles JLR sells yearly.

Nick Rogers, JLR’s chief engineer, stated: “The heart in our business will be within the United kingdom. The development of a group in Shannon strengthens our worldwide engineering abilities and complements our existing team in excess of 10,000 engineers located in the United kingdom.”

Ireland’s development agency helps fund a few of the research study, which is carried out in Shannon, although no information on how big an investment received.

Pizza Hut strongly states driverless delivery will really create more jobs

Now, Pizza Hut unveiled intends to launch a number of driverless delivery vans — an indication that automation has arrived at the field of greasy comfort food. Then your chain did something pizza makers rarely do: It offered a fiscal theory on Twitter.

Following a user noticed that driverless cars could destroy the requirement for motorists, Pizza Hut stated we’ve got the technology could boost interest in human workers.

“It really could create more jobs by opening the swimming pool of ‘drivers’ to individuals who don’t own vehicles,” Pizza Hut tweeted Tuesday. “They might act more as servers, concentrating on hospitality.”

This statement from the brand account touches on the subject economists happen to be debating since robots began altering the way you work: Will machines steal our jobs, or can they release other employment options?

“It’s difficult to forecast exactly what will happen,” stated David Beede, an economist in the Commerce Department. “Workers in jobs that deliver products or services, like pizza delivery people — individuals kinds of work activities are most vulnerable to displacement by self-driving vehicles.”

It’s too soon to be aware what such displacement could seem like, he stated. Delivery motorists could face mass layoffs, or some could transition into roles the Pizza Hut brand account hinted at on Twitter.

“Instead of driving, they might do more customer support work,” he stated, for example monitoring the vehicles, ensuring they’re running properly and answering customer questions about the status of the pizza delivery.

Although Ford, Vehicle, Google, Apple and other companies have all put major sources into driverless cars, the designs include a lengthy approach to take before they ton American roads.

“These technologies do not work perfectly yet,” stated Michael Chui, someone in the McKinsey Global Institute, the talking to group’s financial aspects research arm. “They’re not great while it is raining or snow. You will find issues when lane markings aren’t obvious.”

Pizza Hut didn’t react to The Post’s request comment. The short-casual giant has openly announced a partnership with Toyota, that is now developing the “e-Palette,” a driverless vehicle that appears just like a mix from a bullet train along with a van. (Amazon . com and Uber also have agreed to use we’ve got the technology.)

Regardless of the hype now, Toyota stated the idea is “envisioned to be used within the 2030s” and declined to discuss the way it may help create jobs or other potential economic impacts.

“Our plans moving forward include practicality testing, using the timing along with other details still being considered at the moment,” stated Ming-Jou Chen, a security technology communications manager for Toyota Motor The United States.

Still, the federal government predicts we’ve got the technology will reshape a “wide range” of jobs held by 1 in 9 American workers, based on a 2017 report by Beede and the fellow economists in the Commerce Department.

About 3.8 million people drive trucks, taxis, ambulances along with other vehicles for paychecks, and they’re apt to be “displaced” through the coming wave of automation, Beede found. They didn’t say how, exactly, they’d be displaced.

The Commerce Department didn’t study the opportunity of job creation, either.

Tom Davenport, a company professor at Babson College in Massachusetts and co-author of “Only Humans Need Apply: Winners and Losers in age Smart Machines,” predicted a bleaker future for delivery motorists.

“Human motorists tend to be more costly and fewer reliable,” he stated, “and the short food delivery workforce is fairly transient: It’s challenging them, and it is hard to ensure that they’re.”

The likes of Pizza Hut, he stated, could be more motivated to improve productivity and cut costs. They might increase the customer support workers, but that’s prone to happen only if it benefits the conclusion.

On the other hand, customers may be miffed should they have just to walk outdoors to have their pizzas.

“Some companies could contend with delivery motorists like a luxury factor,” Davenport stated, “and offer to create hot food to the doorstep.”

Find out more:

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FBI chief calls file encryption a ‘major public safety issue,’ seeks the aid of tech companies

NEW You are able to — FBI Director Christopher A. Wray on Tuesday restored a phone call for tech companies to assist police get access to encrypted smartphones, describing it as being a “major public safety issue.”

Wray stated the bureau was not able to get into the information of seven,775 devices in fiscal 2017 — over fifty percent of all of the smartphones it attempted to hack for the reason that period of time — despite getting a warrant from the judge.

“Being not able to gain access to nearly 7,800 devices in one year is really a major public safety issue,” he stated, taking on a style which was a signature issue of his predecessor, James B. Comey.

“We’re uninterested within the countless devices every day citizens,” he stated in New You are able to at Fordham University’s Worldwide Conference on Cyber Security. “We’re thinking about individuals devices which have been accustomed to plan or execute terrorist or criminal activities.”

He stated: “We have to interact, the federal government and also the private sector, to find away out forward, and discover a way forward rapidly.”

Attorney General Shaun Sessions on Thursday accused technology companies of neglecting to adequately help federal investigators access encrypted communications, saying this past year the FBI was blocked from being able to access nearly 7,500 cellular devices. (Reuters)

The bureau has highlighted this concern to the investigative work, so it calls “Going Dark,” for over a decade. However the issue is continuing to grow more pressing, it states, using the creation of phones that does not even companies can unlock as they do not contain the file encryption key.

The Justice Department visited court in 2016 to pressure Apple to plot a method to help it to get access to a defunct attacker’s iPhone following a mass shooting in San Bernardino, Calif. That fight ended once the FBI compensated a 3rd party to compromise the telephone.

Deputy Attorney General Fishing rod J. Rosenstein last fall hinted the Trump administration would take more aggressive steps when the companies can’t develop “responsible encryption” that provides police force access following a warrant is acquired.

To illustrate a potential compromise, Wray reported a situation from New You are able to in the past. Four major banks, he stated, were utilizing a chat messaging platform known as Symphony, that was marketed as offering “guaranteed data deletion.” Condition financial regulators grew to become concerned the chat platform would hamper investigations of Wall Street.

“In response,” Wray stated, “the four banks arrived at a contract using the regulators to make sure responsible use” of Symphony. They decided to make a copy of the communications sent with the application for seven many to keep duplicate copies of the file encryption keys with independent custodians not controlled through the banks, he stated.

“So within the finish, the information was secure — still encrypted, but additionally available to regulators,” he stated.

Privacy advocate Amie Stepanovich, however, stated such solutions might not be suitable for the typical Web surfer and threaten the user’s digital security.

The FBI finds a means into San Bernardino Syed Farook’s iPhone, and it is now shedding bids to pressure Apple to assist them to crack in to the phone. See all of the latest developments within the situation, and why the situation is not over yet. (Jhaan Elker/The Washington Publish)

“They create new targets for data breaches plus they complicate user security in a manner that could be compromised by bad actors,’’ stated Stepanovich, U.S. policy manager at Access Now, an advocacy group.

Wray acknowledged the answer isn’t “clear cut.” He stated “it’s likely to need a thoughtful but sensible approach’’ that “may vary across business models and various technologies.”

He added: “I just don’t buy the declare that it’s impossible.”