🎵 Fake Drake, real problems
Hey Snackers,
Move over, Great Pacific Garbage Patch. There's a new ocean blob in town: 13M tons of floating sargassum (think: gassy seaweed) threatens to stink up Florida and Caribbean beach vacays this summer. Don't forget to pack the nose plugs.
The Nasdaq slipped yesterday, weighed down by a 10% drop in Tesla after disappointing earnings. Meanwhile, underwhelming midsize-bank earnings tugged down the banking sector.
An AI-generated “Drake” song raises alarm bells for labels like Universal Music
Nice for bot… ICYMI: an AI-generated song featuring the voices of Drake and The Weeknd went viral this week. “Heart on My Sleeve,” posted on TikTok by a bed-sheet-clad user called Ghostwriter977, racked up millions of streams across YouTube, Spotify, Apple Music, and other platforms. The ghostwriter said they wrote and produced the verses for the AI-generated vocals. Then came the takedowns:
Universal Music Group, the world’s largest label, which reps Drake and The Weeknd, had the song removed from platforms.
Legal verse: Universal said “the training of generative AI using our artists’ music” violates copyright law and that “we will not hesitate to take steps to protect our rights and those of our artists.”
Fake Drake(s) aren’t the only problem… Universal was quick to act, but now another Drake fake (“Winter’s Cold”) has hit the internet. Labels like UMG, Warner Music Group, and Sony Music have been effective in aggressively protecting their music (think: YouTube videos and Insta stories being taken down or demonetized). Platforms like YouTube scan videos to see whether they contain copyrighted content, so identification is nearly instant. But AI tracks could be harder to spot. For consumers, it’s also tough to know if a track is authentic because Auto-Tune (used to synthetically improve tracks) is so prevalent.
It may be endless Whac-A-Mole… until hard rules are established for AI-generated content. Copyright issues will likely keep popping up, and not just for the music industry: media publishers are said to be gearing up for a showdown with Microsoft, Google, and OpenAI, demanding compensation for use of their articles. Meanwhile, AI-art lawsuits could set precedents for bots trained on copyrighted artwork.
As the home-furnishing boom fades, Ikea’s splurging $2B to take over American living rooms
Meatballs and measuring tape… Yesterday Ikea said it would invest $2.2B to build up its US biz — its biggest investment ever in a single country. Over the next three years, it plans to roll out 17 new stores, creating 2K+ US jobs. The Swedish sofa king also plans to bulk up its fulfillment centers. It notched record sales last year and has slowly grown its market share in the US (its second-largest market by sales after Germany). Now Ikea’s hoping its trendy “low cost, high quality” furniture will turn the US into its top market.
- DIY: Ikea’s planning to open nine "plan and order points," studios where shoppers can meet with specialists to design their dream home (but have the furniture delivered).
The great home retreat… (not the relaxing kind). Home-furnishing spend has plunged since the pandemic as people ditch home-office builds for Cabo trips. Furniture-store sales generally dipped 2.4% in March from a year ago. The slowdown is starting to nail some of Ikea’s rivals: last quarter, Home Depot missed its sales expectations for the first time since 2019. TJX's HomeGoods saw a 4% sales dip, and Bed Bath & Beyond is reportedly days from filing for bankruptcy. Online furniture retailer Wayfair lost 5M customers last year and posted a $1.3B loss.
One brand’s loss is another brand’s opportunity… Ikea’s US biz alone racked up nearly $6B in sales last year, attracting some 70M shoppers in stores and about 500M visits online as it kept prices stable compared to rivals. Now, as competitors like Wayfair cut jobs and scale back, Ikea’s doubling down to grow its market share.
The Crypto Catch-Up…
📜 Policy… European lawmakers approved sweeping crypto regs (meet: MiCA) that are expected to take effect this summer. The rules will allow registered companies to operate across the EU, and have been hailed by crypto cos. About that…
🌶️ Spicy… Coinbase's CEO said the biz might exit the US in search of greener regulatory pastures, and that a move to the UK is "on the table." The exod-US isn't all bluster: Coinbase reportedly plans to launch an offshore exchange.
🧳 Movin'… Kraken's been hit with the travel bug too. The exchange, which earlier this year agreed to a $30M SEC settlement and killed its staking program, scored a license to operate in Ireland.
What else we’re Snackin’
Setback: SpaceX's uncrewed Starship rocket (the most powerful ever built) exploded minutes after liftoff, failing to reach orbit. Employees still cheered that it cleared the launchpad.
Charged: Footage appearing to show an electric Ford F-150 on fire has reignited worries about the hotter, longer blazes that EV batteries can cause. Extinguishing the flames can take hours and may require new methods.
AI-xpense: ChatGPT may cost OpenAI up to $700K/day to run thanks to the colossal computing power and pricey servers needed to keep it writing essays. To cut costs, Microsoft is developing an in-house AI chip.
Scraping: SL Green, NYC’s largest office-property owner, has struggled with hybrid-work norms and reported 10% less cash flow than expected. To keep spaces full, it’s offered new tenants almost five months rent-free.
Pivot: BuzzFeed said it would lay off 15% of staff and shut down BuzzFeed News, while Insider announced a 10% cut. A shrinking ad market has rocked the media industry.
Friday
- Earnings expected from Procter & Gamble
Authors of this Snacks own shares of: Apple, Google, Microsoft, and Warner Music Group