Category: Technology

Comtech Telecommunications (CMTL) – A Proxy Fight?

Posted on by cpereira@noblefcm.com


Monday, September 23, 2024

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. The Telecommunications Transmission segment provides satellite earth station equipment and systems, over-the-horizon microwave systems, and forward error correction technology, which are used in various commercial and government applications, including backhaul of wireless and cellular traffic, broadcasting (including HDTV), IP-based communications traffic, long distance telephony, and secure defense applications. The Mobile Data Communications segment provides mobile satellite transceivers, and computers and satellite earth station network gateways and associated installation, training, and maintenance services; supplies and operates satellite packet data networks, including arranging and providing satellite capacity; and offers microsatellites and related components. The RF Microwave Amplifiers segment designs, develops, manufactures, and markets satellite earth station traveling wave tube amplifiers (TWTA) and broadband amplifiers. Its amplifiers are used in broadcast and broadband satellite communication; defense applications, such as telecommunications systems and electronic warfare systems; and commercial applications comprising oncology treatment systems, as well as to amplify signals carrying voice, video, or data for air-to-satellite-to-ground communications. The company serves satellite systems integrators, wireless and other communication service providers, broadcasters, defense contractors, military, governments, and oil companies. Comtech markets its products through independent representatives and value-added resellers. The company was founded in 1967 and is headquartered in Melville, New York.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

13D Filing. On Friday after the market closed, the SEC released a 13D filing filed by a group including former Comtech CEOs Michael Porcelain and Fred Kornberg. As part of the filing, the Group noted that on September 13th Mr. Porcelain delivered a letter to Comtech nominating a slate of eight highly qualified director candidates for election to the Board at Comtech’s 2024 annual meeting of stockholders, generally held in mid-December. The Group has engaged, and intends to continue to engage, in discussions with management and the Board of Comtech, as well as Comtech stockholders and others about the Company.

Details. According to the 13D, in addition to Mr. Porcelain and Mr. Kornberg, the group includes Oleg Timoshenko, founder of UHP Networks, and Jay Whitehurst, former President of Comtech’s Trusted Location product line. In aggregate, the Group reported ownership of 2,179,897 CMTL shares, or about 7.6% of the outstanding.


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Three Mile Island’s Revival: Constellation Energy Taps Nuclear Power for AI Data Centers

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– Constellation Energy will restart Three Mile Island’s Unit 1 reactor.
– Microsoft will purchase carbon-free power from the plant under a 20-year agreement.
– The energy demand from data centers and AI drives a growing interest in nuclear energy from tech companies.

In a groundbreaking development for clean energy, Constellation Energy has announced plans to restart the Unit 1 reactor at the Three Mile Island nuclear plant, selling the power to Microsoft to support its AI-driven data centers. This collaboration highlights the immense energy demand from tech companies as they scale AI infrastructure, while maintaining carbon-neutral goals. The restart, set for 2028, marks a significant shift in the role of nuclear power in supporting the energy needs of the tech industry, especially as the demand for data center electricity surges.

Three Mile Island’s Revival: Constellation Energy Taps Nuclear Power for AI Data Centers

In a strategic move signaling the resurgence of nuclear energy in the U.S., Constellation Energy has announced plans to restart the Unit 1 reactor at the Three Mile Island nuclear plant. The Pennsylvania-based reactor, inactive since 2019, will be powering Microsoft’s AI data centers under a 20-year power purchase agreement. This deal represents a significant partnership between the tech and energy sectors, underscoring the growing demand for reliable and sustainable energy sources to support the expansion of artificial intelligence (AI) and data infrastructure.

The deal between Constellation and Microsoft is the largest power purchase agreement for the nuclear plant operator and highlights a growing trend among tech giants looking to secure carbon-free energy sources for their operations. As the demand for AI and other energy-intensive technologies surges, companies are under pressure to balance the growing electricity needs with their climate goals. Nuclear energy, with its carbon-neutral output, offers an attractive solution.

Nuclear Energy’s Role in AI Development

With AI technology advancing at breakneck speed, the associated energy requirements are escalating. Data centers, which are central to AI processing, require vast amounts of electricity to power servers, storage systems, and cooling infrastructure. According to forecasts from Goldman Sachs, data centers will account for 8% of the U.S. electricity demand by 2030, up from 3% currently. This dramatic increase is pushing tech companies to seek reliable, scalable, and environmentally sustainable energy solutions.

In this context, the collaboration between Constellation and Microsoft is a powerful example of how nuclear energy can provide a stable and carbon-free energy source. The restart of Three Mile Island’s Unit 1 reactor, set for 2028, will help Microsoft meet the power needs of its AI data centers while adhering to its sustainability goals. The deal not only addresses Microsoft’s current needs but also aligns with broader energy trends, where nuclear energy is seen as a crucial player in the shift toward clean energy.

Investment and Future Prospects

Constellation Energy’s decision to restart the Three Mile Island Unit 1 reactor involves a substantial investment of $1.6 billion, with the company also planning to apply for an operational extension until 2054. The project represents the second time a nuclear plant has been restarted in U.S. history, with the Palisades nuclear plant in Michigan being the first, set to come online by 2025.

The move to revive Three Mile Island is part of a broader trend to bolster the nuclear energy sector in response to growing electricity demand, especially from high-growth sectors like AI, electric vehicles, and domestic manufacturing. Additionally, bipartisan support for nuclear energy is growing, with policymakers seeing it as an essential part of the nation’s clean energy future.

Tech and Energy Sectors Unite for a Sustainable Future

This partnership marks a key moment in the growing synergy between the tech and energy sectors. As tech companies like Microsoft and Amazon Web Services look to nuclear power to meet their increasing electricity demands, nuclear energy could play a central role in powering the digital future. In March 2024, Amazon Web Services struck a similar deal with Talen Energy to purchase power from the Susquehanna nuclear plant, and Oracle is currently designing a data center powered by small modular nuclear reactors.

In conclusion, Constellation Energy’s restart of the Three Mile Island reactor is a bold step that showcases nuclear power’s role in meeting the surging energy needs of the tech industry, particularly for AI applications. This development represents a pivotal moment for both the energy and tech sectors, as they collaborate to fuel innovation while staying true to sustainability commitments.

Trump Family Unveils Crypto Project Details: Who Can Buy World Liberty Financial Tokens?

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– 63% of World Liberty Financial tokens will be available to the public.
– The platform will offer decentralized finance services like lending and investing.
– Concerns arise over the project’s viability amid the Trump family’s limited crypto experience.

The Trump family has finally revealed key details about their latest venture in the digital currency space: World Liberty Financial, a crypto project designed to reshape how people interact with decentralized finance (DeFi). At an event held on X (formerly Twitter), the team behind the project disclosed who can buy the platform’s tokens and how those tokens will be allocated, offering greater transparency on a project that has generated significant interest over the past few weeks.

Token Distribution and Public Availability

According to founder Zak Folkman, 63% of the total tokens from World Liberty Financial (WLFI) will be made available for public purchase, while 20% will be reserved for the founding team, which includes members of the Trump family. An additional 17% will be set aside for user rewards, meant to incentivize active participation on the platform. Folkman assured listeners that there will be no pre-sales or early access for insiders, aiming to keep the token launch fair and accessible to all potential investors.

This announcement has garnered attention due to earlier leaked reports that suggested a 70% founder allocation, which raised concerns about the transparency and fairness of the project. The revised structure has slightly alleviated some of those concerns, although skepticism remains about whether the Trump family can successfully navigate the complex and volatile cryptocurrency market.

Trump’s Shift Toward Crypto

During the event, Donald Trump took center stage, offering insights into his evolving stance on cryptocurrency. Initially, the former president admitted he had little interest in digital currencies, but his involvement grew after witnessing the success of his own NFT collections. These collections, sold to supporters and collectors, were paid for using cryptocurrency, which he said helped change his perception of the digital finance world.

Trump remarked, “Crypto is something we have to do, whether we like it or not.” He also criticized the Securities and Exchange Commission (SEC) for what he perceives as an overly aggressive stance toward the industry. This sentiment reflects ongoing frustration among crypto entrepreneurs, many of whom feel that the SEC has stifled innovation through a regulatory approach focused on enforcement rather than clear guidelines.

Lofty Goals for World Liberty Financial

The Trump family and their business partner, Steve Witkoff, are aiming to create more than just a cryptocurrency token. They envision World Liberty Financial as a comprehensive DeFi platform, offering services that would allow users to borrow, lend, and invest in digital assets. Witkoff, who has traditionally worked in real estate, spoke about his excitement in helping to build a platform focused on “frictionless finance,” designed to provide opportunities for individuals who have limited access to traditional credit or banking services.

Despite these ambitious goals, the project has faced criticism and skepticism, with questions arising about the Trumps’ limited experience in the cryptocurrency sector. While the Trump brand brings name recognition, the complex nature of blockchain technology and DeFi operations may pose challenges for the team as they seek to gain credibility in the space.

Potential Risks and Challenges

Launching this crypto platform during a heated presidential campaign adds further intrigue. Trump’s increasing support for cryptocurrency on the campaign trail could appeal to a niche group of crypto-friendly voters, but it also raises the stakes for this project. Should World Liberty Financial stumble, it could tarnish Trump’s image among both supporters and investors.

Moreover, the cryptocurrency market is notoriously volatile, and new projects like World Liberty Financial often face significant obstacles to achieving long-term success. Investors and enthusiasts will be closely watching how this project unfolds, particularly given the Trumps’ high-profile involvement.

Moving Forward

The team behind World Liberty Financial has promised to release more updates on the project’s progress via official social media channels in the coming months. Meanwhile, potential investors have been urged to stay alert to possible scams, as the project has already attracted significant public interest.

As the Trump family forges ahead in the world of crypto, many remain curious—and cautious—about whether World Liberty Financial can live up to its promises or whether it will become another footnote in the rapidly evolving cryptocurrency landscape.

Release – Comtech Launches New Digital Common Ground Modem Product Line for DoD and Coalition Customers

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on CMTL

U.S. sovereign designed DCG modems enable warfighters and military assets to easily roam across commercial and purpose-built networks

CHANDLER, Ariz. – Sept. 11, 2024–Comtech (NASDAQ: CMTL) (“the Company”), a global technology leader, today announced the launch of the Company’s new Digital Common Ground (“DCG”) portfolio of modems. Comtech’s DCG product line is designed to enable the U.S. Department of Defense (“DoD”) and coalition partners to move to digitized, hybrid satellite network architectures, which will bring forward a new era of secure, resilient, interoperable, and ubiquitous connectivity across all domains.

Built on the proven success of Comtech’s extensive satellite communications (“SATCOM”) modem portfolio, the Company’s DCG modems are designed and built at Comtech’s headquarters in Chandler, AZ and support commercial and government satellite operations on a single common platform that can be reconfigured rapidly to address changing operational needs. Comtech’s DCG portfolio is also designed to evolve over time to incorporate new capabilities and keep pace with the upgrade cycle of new innovative satellite constellations-significantly reducing overall lifecycle costs for customers while also delivering industry leading performance and efficiency.

“As a leading provider of U.S. sovereign developed and manufactured communications solutions, Comtech’s software defined DCG product line provides the building blocks needed to enable the trusted, all-digital communications systems of the future,” said John Ratigan, Interim CEO of Comtech. “DCG represents a transition away from stovepipes and siloed communication systems toward an open-standard and truly flexible architecture. Comtech’s DCG product line reduces total cost of ownership for satellite operators while also enabling an all-digital, software defined infrastructure that can rapidly adapt at the speed of relevance.”

Customer Value and Operational Benefits:

  • Digital Transformation: Comtech’s DCG product line is designed to align with digital transformation and modernization initiatives to support the evolution of SATCOM infrastructures across commercial and government markets-enabling significantly enhanced flexibility, interoperability, and ease of operation while also reducing cost and removing complexity of operations.
  • Security: Comtech incorporates modern cybersecurity design principles at every level across its DCG product line-ranging from a trusted supply chain to a thoughtful software upgrade lifecycle, including in-field updates. The DCG product line also offers secure over-the-air communications through multi-stream Federal Information Protection Standards 140-3 Level 2 certified Transmission Security.
  • Superior Performance: Comtech’s DCG product line offers customers industry leading performance compared to other products available in the market today-offering multi-gigabit throughput at launch.
  • Enhanced Situational Awareness: The data-centric infrastructureof the DCG product line enables enhanced data exchange and facilitates a shared understanding of the battlespace, crucial for informed decision-making.
  • Multi-Orbit Capability & Improved Interoperability: Comtech’s DCG portfolio is one of the first product lines on the market today offering robust access to multi-orbit capabilities across commercial and purpose-built networks.The DCG product line is also one of the first to be Digital Intermediate Frequency Interoperability (“DIFI”) compliant-adhering to DoD and coalition communications standards to enable seamless information flow between services, a key tenet of Combined Joint All Domain Command and Control (“CJADC2”).
  • Waveform Flexibility: The DCG product line currently supports a variety of critical waveforms including DVB-S2X, DSSS, EBEM, and other protected waveforms. With a software defined core, Comtech’s DCG product line can easily add waveforms and integrate new capabilities tailored to specific mission needs.

Availability:

Comtech is currently accepting orders for its DCG product line. For more information, please visit our webpage: https://comtech.com/capability/dcgmodems/

About Comtech

Comtech Telecommunications Corp. is a leading global technology company providing terrestrial and wireless network solutions, next-generation 9-1-1 emergency services, satellite and space communications technologies, and cloud native capabilities to commercial and government customers around the world. Our unique culture of innovation and employee empowerment unleashes a relentless passion for customer success. With multiple facilities located in technology corridors throughout the United States and around the world, Comtech leverages our global presence, technology leadership, and decades of experience to create the world’s most innovative communications solutions.For more information, please visit www.comtech.com.

Forward-Looking Statements

Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results and performance could differ materially from such forward-looking information. The Company’s Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such Securities and Exchange Commission filings.

PCMTL

Investor Relations

Maria Ceriello

631-962-7115

Maria.Ceriello@comtech.com

Media Contact

Jamie Clegg

480-532-2523

jamie.clegg@comtech.com

Apple Kicks Off iPhone 16 AI Event: What Investors Should Watch For

Posted on by slightbourne@noblecapitalmarkets.com

Apple’s much-anticipated iPhone 16 event has begun, unveiling new Watches, AirPods, and a suite of AI-focused upgrades to its latest smartphone. At the Steve Jobs Theater in Cupertino, California, Apple CEO Tim Cook introduced the new Series 10 Watch, AirPods 4, and teased the AI-powered iPhone 16, which marks Apple’s first smartphone designed around artificial intelligence. While the product launch showcased exciting innovations, the event holds significant weight for investors who are closely watching how Apple navigates a slowing market and fierce competition.

With Apple’s share price remaining largely unchanged during the event, the unveiling signals that while new products are always welcome, the critical question for investors is whether this AI push will translate into meaningful revenue growth. Apple’s AI initiative, Apple Intelligence, aims to improve the user experience with advanced text, image, and content generation features. The company is betting on this technology to help boost sales, especially as iPhone revenues, which accounted for over half of Apple’s $383 billion in sales last year, have faced slower growth in recent quarters.

This AI-driven upgrade comes at a pivotal moment. Apple’s competitors, particularly in China, are aggressively expanding their AI capabilities. Notably, Huawei pre-empted Apple’s launch with its own tri-fold smartphone announcement, boasting over 3 million pre-orders. Huawei’s ability to navigate U.S. sanctions and its dominance in the Chinese market puts additional pressure on Apple, which has struggled in the region due to increasing competition and government restrictions. For investors, Apple’s performance in China remains a critical factor, as AI features will take longer to roll out in that market, further delaying potential growth.

The release of the iPhone 16 with Apple Intelligence is expected to drive upgrades, but the rollout of key AI features will be gradual. Apple plans to introduce these updates in the U.S. this fall, with a wider Siri upgrade slated for early 2025. However, investors will be keen to see whether Apple’s AI features can spur a major upgrade cycle, particularly as Google and other competitors are accelerating their own AI integrations.

Investors are not just looking at consumer interest but also the broader AI battle in the tech industry. Google, which has already showcased advanced AI features, such as Gemini Live, is also vying for dominance in the smartphone market. Google’s push into AI further intensifies competition in a segment where Apple has long reigned supreme.

Apple’s stock performance and future growth will be closely tied to how well the iPhone 16 and its AI capabilities resonate with consumers. The company is relying on this new technology to entice customers to upgrade, but it’s also worth noting that economic uncertainty and evolving tech regulations could influence both customer demand and the company’s bottom line.

This event comes on the heels of Apple’s recent AI-focused updates at its developer conference in June, where it laid the groundwork for the Apple Intelligence platform. With global demand for AI-driven features rising, particularly in markets like China, Apple is positioning itself for what could be the next major growth frontier. However, investors will need to watch for signs that this new strategy can deliver in the short term, especially as competition from companies like Huawei and Google heats up.

For investors, the big takeaway is whether Apple’s AI push will be enough to spur demand in a weakening smartphone market. The success of the iPhone 16 and its AI features could define Apple’s trajectory in the coming quarters, particularly as it faces increased competition and slowing sales in key markets.

Google Faces Antitrust Showdown Over Online Ad Dominance in Landmark Trial

Posted on by slightbourne@noblecapitalmarkets.com

Alphabet’s Google is set to battle U.S. antitrust prosecutors in a highly anticipated trial starting today in Alexandria, Virginia. The Justice Department aims to prove that Google has unlawfully monopolized the online advertising technology space, stifling competition and manipulating ad auctions to its advantage. This trial marks the tech giant’s second major antitrust clash with the government in recent years, underscoring ongoing efforts by U.S. enforcers to challenge Big Tech monopolies.

At the heart of the case is Google’s dominance over the digital infrastructure that powers more than 150,000 online ad sales per second, a crucial revenue source for countless websites. The Justice Department alleges that Google achieved its powerful position through strategic acquisitions, restrictive practices, and auction manipulation, allowing it to dominate online ad markets. These practices, prosecutors argue, have given Google an unfair advantage over competitors and harmed both publishers and advertisers, leading to higher costs and reduced choice in the digital advertising ecosystem.

Google, however, denies these allegations, asserting that its efforts to innovate and expand its advertising technology were both legal and necessary to better serve its customers. The company argues that the government is mischaracterizing its actions and overlooking the competitive nature of the digital advertising industry. According to Google, the advertising landscape has changed dramatically, particularly with the rise of connected TV and mobile app ads, where competition is fierce.

If the U.S. District Court finds that Google violated antitrust laws, the consequences could be severe for the tech giant. One of the potential outcomes is that Google may be forced to sell off its Google Ad Manager platform, which includes its publisher ad server and ad exchange. Such a move would be a significant blow to Google’s ad tech business, which generated $20 billion in 2020, accounting for 11% of its total revenue that year. A ruling against Google could reshape the digital advertising landscape and open the door for more competition in the ad tech space.

Both Google and the government have assembled high-powered legal teams to argue their cases. Google’s defense is led by Karen Dunn, a prominent lawyer from Paul, Weiss, known for her role in preparing high-profile Democrats for debates. The government’s legal team is headed by Julia Tarver Wood, a veteran trial attorney who joined the Justice Department last year. Witnesses from across the digital advertising industry are expected to testify, including representatives from competitors like The Trade Desk and Comcast, as well as publishers such as News Corp and Gannett, who claim to have been negatively impacted by Google’s practices.

This case is part of a broader wave of antitrust actions aimed at reining in the power of Big Tech companies. Just last month, the Justice Department secured a ruling against Google in a separate case involving its dominance in online search. The U.S. Federal Trade Commission is also pursuing legal actions against other tech giants, including Meta and Amazon, as part of a concerted effort to challenge what the government sees as monopolistic practices in the tech industry.

The outcome of the Google trial could have far-reaching consequences not only for the future of digital advertising but also for other ongoing antitrust actions. A decision in favor of the government could embolden regulators to pursue more aggressive actions against other tech companies, while a ruling in Google’s favor might signal a more hands-off approach to tech industry regulation in the future.

This antitrust case is closely tied to previous allegations and rulings involving Big Tech companies, including a recent decision involving Google’s dominance in online search.

Release – ISG Secures Patent for AI-Powered Contracting Technology

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on III

Comprehensive approach to automating contract generation and negotiation wins patent protection

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group ( ISG ) (Nasdaq: III ), a leading global technology research and advisory firm, today announced it has secured a U.S. patent for its proprietary AI-powered contracting technology.

The automated intelligent contracting solution is offered as part of the ISG GovernX ® vendor compliance and risk management platform to simplify contract generation, negotiation and management, including renewals of existing contracts.

ISG said the solution also has future application for ISG Tango ™, the firm’s groundbreaking sourcing platform launched earlier this year that digitizes all elements of ISG’s market-leading sourcing transactions business to better serve clients, improve transaction speed and efficiency, and allow ISG to expand into other market segments. It would be used initially, ISG said, to support the sourcing transaction needs of midmarket companies—a new market segment and growth area for ISG—and later for larger, more complex contracts as the AI model that powers the solution grows in capability and sophistication.

The newly awarded patent, #12,067,060, issued on August 21, 2024, covers a solution that uses AI to analyze and understand the preferences of all parties to a contract and suggest tailored terms for any contract scenario. It builds on U.S. patent #10,936,672, which was awarded to ISG in 2021 for a system that leverages machine learning and AI to generate documents based on historical contracts and data sets.

A third invention, currently patent pending, leverages machine learning and AI across the entire contract generation, pricing and negotiation process with a chatbot-like interaction for multiple parties involved in creating a contract.

“We can now offer our clients exclusive access to automation technology that can build tailored contracts, increase compliance and compress negotiation timeframes,” said Todd Dreger, partner and president, ISG GovernX. “We are delighted to have received patent recognition for our distinctive and important inventions of AI-powered, automated document generation capabilities.”

The patents include methods for training models on historical documents to understand and predict the best language to include in a new contract. This involves determining associations between different document sections and optimizing the document generation process.

Users can input their preferences, view ranked candidate documents, and interact with the system to refine the final document. The interface can emphasize selected sections and provide feedback based on a scoring mechanism. The system also facilitates automated negotiation by adjusting document sections in real-time based on the preferences and priorities of multiple parties, reducing the need for manual negotiation.

“Our AI-driven contract automation inventions will help our clients improve their business operations and the management of their supplier ecosystems while lowering operational costs,” Dreger said. “As the field of AI continues to evolve, we’re confident the technologies covered by these patents will drive meaningful value for our clients by meeting their needs for fast, accurate, compliant contracting.”

The patents bolster the market-leading ISG GovernX platform, which currently has more than $65 billion of annual contact value under management across more than 13,000 client contracts. GovernX automates the management of the entire contract lifecycle and provides a complete, customized view of the user’s contract and supplier ecosystem to improve supplier performance, decrease spend and reduce third-party risk.

For more information about ISG GovernX, visit this webpage .

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com .

Source: Information Services Group, Inc.

AI Surge Shakes Up Venture Capital as Tech Titans Dominate Investments

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– Tech giants like Microsoft and Amazon are outpacing traditional VC firms in AI funding.
– Venture-backed IPOs remain scarce despite AI’s rise.
– VC investments shift to less capital-intensive application-level startups.

The venture capital (VC) landscape is undergoing a seismic shift as tech behemoths like Microsoft, Amazon, and Nvidia pour billions into artificial intelligence (AI) startups. This trend has significantly altered the dynamics in an industry already reeling from an extended dry spell in initial public offerings (IPOs), which is approaching three years.

Unlike previous tech booms, where venture capitalists (VCs) held a central role, the current AI wave is being driven by the deep pockets of these tech giants. This shift has left traditional VC firms scrambling to adapt, as startups like OpenAI, Anthropic, and CoreWeave attract massive investments from these corporate titans, bypassing the need for public funding.

While many AI startups have earned sky-high valuations, they are not yet ready to go public or show the profitability metrics that public investors typically seek. As a result, VCs face a bottleneck in generating returns for their limited partners. Venture-backed IPOs are projected to hit their lowest level since 2016, with U.S. VC exit value in 2024 expected to drop 86% from its peak in 2021, according to PitchBook data.

One of the primary reasons for this market distortion is that tech giants are not only offering capital but also tangible benefits such as cloud credits and strategic business partnerships—resources that traditional VCs cannot easily match. According to S&P Global Market Intelligence, many AI startups are still seeing overwhelming investor interest despite the broader downturn in venture markets.

With the landscape dominated by mega-companies, venture firms have been forced to adjust their investment strategies. Chip Hazard, co-founder of Flybridge Capital Partners, noted that VC dollars are now shifting “up the stack,” meaning that traditional VCs are investing in companies that are building applications on top of existing AI infrastructure. These companies require far less capital than the infrastructure startups that are driving the AI boom, such as those building chips or training AI models.

The generative AI frenzy shows no signs of slowing. In 2024 alone, investors funneled $26.8 billion into 498 AI deals, continuing a trend that saw AI fundraising increase more than 200% between 2022 and 2023, per PitchBook. AI now accounts for 27% of total fundraising in the private market, up from 12% in 2023. This increase highlights how central AI has become in the broader venture ecosystem.

Despite the optimism surrounding AI, the broader venture capital industry continues to face significant headwinds. The IPO market remains stagnant, leaving venture-backed companies with limited options for exits. Even for companies that do go public, valuations are often far lower than in the pre-2022 era, when tech stocks soared and interest rates remained low.

Some traditional VCs, like Menlo Ventures, are attempting to carve out their piece of the AI pie by forming special purpose vehicles (SPVs) to participate in high-profile funding rounds. Menlo, for example, has invested in Anthropic’s $750 million round, valuing the startup at over $18 billion. Cohere, another AI company focused on enterprise solutions, also raised $500 million through an SPV organized by Inovia Capital.

In this new landscape, VCs are increasingly forced to take a backseat as tech giants drive the AI revolution. The real question now is how venture firms will adapt to this new reality where exits are fewer, returns are slower, and competition for promising startups is fiercer than ever.

Release – Conduent to Modernize Government Benefits Disbursement System for American Samoa Recipients

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

September 05, 2024

Government

With Conduent, American Samoa will convert its paper voucher system to EBT cards and offer online and mobile access capabilities

FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, has been selected by the American Samoa Department of Human and Social Services (DHSS) to modernize and convert the U.S. territory’s legacy American Samoa Nutrition Assistance Program (ASNAP) system.

As of 2024, nearly 5,000 needy, elderly, blind or disabled individuals in American Samoa receive ASNAP benefits from the government. These benefits provide essential food assistance to supplement their nutritional needs. Supported by Conduent, ASNAP recipients will be able to receive their benefits through safer and more secure Electronic Benefits Transfer (EBT) cards.

Rather than waiting for paper vouchers to use their benefits, ASNAP recipients will now be able to buy groceries and other items with electronic EBT cards. The conversion to cards will eliminate the risk of losing funds if paper vouchers are lost. Recipients will be able to track and manage their benefits through an online portal, and a new mobile application will allow users to access their benefits information and customer service support directly from their smartphones. The department will also be able to utilize the portal to access information about recipient management and card issuance and comply with federal reporting requirements.

“We are very excited to have selected an experienced company who can provide comprehensive and reliable EBT solutions for the ASNAP, and who can serve as a true partner over the life of the contract,” said DHSS Director Muavaefa’atasi John E. Suisala. “With over 25 years of government payment card experience and secure and reliable technology, we are confident that Conduent will meet all cardholder and retailer needs, along with our expectations for improved services for our clients through the use of EBT cards and mobile apps to improve their shopping experience. This project will also eliminate the need for clients to physically pick up benefits each month and is very timely, as we celebrate 30 years of ASNAP in American Samoa.”

“We recognize the importance of being able to provide secure, reliable disbursement solutions that deliver important benefits to individuals who rely on them daily, and we are proud to now deliver those same assurances to the government and people of American Samoa,” said Wade Fairey, General Manager, Payments and Child Support Solutions at Conduent. “By leveraging Conduent’s proven solutions to streamline benefits delivery and management, we are improving efficiency, making it easier and more convenient for people to access their benefits, and enhancing the overall well-being and security of the agencies we serve.”

Conduent’s Government Solutions provide U.S. agencies with solutions for healthcare claims administration, government benefit payments, eligibility and enrollment, and child support. Conduent is a leader in government payment disbursements, delivering electronic payments for services in 37 states and supporting critical, federally sponsored programs like the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).

About Conduent
Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 55,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com.

Note: To receive RSS news feeds, visit www.news.conduent.com. For open commentary, industry perspectives and views, visit http://twitter.com/Conduent, http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent.

Trademarks
Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.

Media Contacts

Neil Franz

Conduent

neil.franz@conduent.com

+1-240-687-0127

Giles Goodburn

Conduent

ir@conduent.com

+1-203-216-3546

Release – Conduent Completes Sale of Its Casualty Claims Solutions Business to MedRisk

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

September 04, 2024

Corporate Workers Compensation

Sale aligns with Conduent’s strategy to streamline its portfolio, focusing on core capabilities and advancing synergistic growth.

FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, today announced that it has completed the sale of its Casualty Claims Solutions Business to MedRisk , the nation’s largest managed care organization dedicated to the physical rehabilitation of workers’ compensation patients. The transaction was initially announced on May 3, 2024.

“This completed divestiture is the third in our portfolio optimization plan, allowing us to further improve our balance sheet and advance our capital allocation strategy,” said Cliff Skelton, President and Chief Executive Officer at Conduent. “Our priority now is to ensure a seamless transition for our teammates and our clients.”

MedRisk is acquiring Conduent’s workers’ compensation and auto casualty bill review solutions and services, inclusive of the Strataware portfolio of products and technology.

Conduent will continue to provide mailroom services for casualty claim clients and will now serve MedRisk as one of its clients.

Additional details of the transaction are outlined in Conduent’s 8-K filed with the U.S. Securities and Exchange Commission (SEC) today.

About Conduent

Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 59,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com .

Forward-Looking Statements

This press release, any exhibits or attachments to this release, and other public statements we make may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” “continue to,” “endeavor,” “if,” “growing,” “projected,” “potential,” “likely,” “see,” “ahead,” “further,” “going forward,” “on the horizon,” “strategy,” and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact included in this press release or any attachment to this press release are forward-looking statements, including, but not limited to, statements regarding the sale of Conduent’s Casualty Claims Solutions business to MedRisk, such as Conduent’s focus on continuing to provide a seamless transition for team members and clients while advancing its goals for deployable capital and Conduent’s strategy to streamline its portfolio, focus on core capabilities and advance synergistic growth, as well as to streamline its business portfolio, enhance its focus on core capabilities and increase agility. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this press release, any exhibits to this press release and other public statements we make.

Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: Conduent’s ability to realize the benefits anticipated from the sale of its Casualty Claims Solutions Business; unexpected cost, liabilities or delays in connection with the transaction; the significant transaction costs associated with the transaction; negative effects of the consummation of the transaction on the market price of our common stock or operating results, including as a result of changes in key customer, supplier, employee or other business relationships; the risk of litigation or regulatory actions; our inability to retain and hire key personnel; the risk that certain contractual restrictions contained in the definitive transaction agreement could adversely affect our ability to pursue business opportunities or strategic transactions; and other factors that are set forth in the “Risk Factors” and other sections of our Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this release speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether because of new information, subsequent events or otherwise, except as required by law.

Note: To receive RSS news feeds, visit www.news.conduent.com . For open commentary, industry perspectives and views, visit http://twitter.com/Conduent , http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent .

Trademarks

Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.

Media Contacts

Sean Collins

Conduent

Sean.Collins2@conduent.com

+1-310-497-9205

Giles Goodburn

Conduent

ir@conduent.com

+1-203-216-3546

Release – GoHealth Acquiring e-TeleQuote, Strengthening Position as Leading Medicare Insurance Marketplace

Posted on by aweinsoff@channelchek.com

Research News and Market Data on GOCO

Sep 04, 2024 at 7:00 AM EDT

Investment further expands industry-leading shopping, enrollment, and engagement platform, delivering a differentiated experience and driving high quality outcomes while ensuring peace of mind in Medicare consumers’ healthcare decisions.

CHICAGO and CLEARWATER, Fla., Sept. 04, 2024 (GLOBE NEWSWIRE) — GoHealth, Inc. (Nasdaq: GOCO), a leading health insurance marketplace, today announced that it entered into a purchase and subscription agreement which will ultimately lead to the acquisition of e-TeleQuote Insurance, Inc., a distinguished name in the Medicare insurance marketplace. The transaction is expected to close on September 30, 2024. This strategic move represents a significant milestone in GoHealth’s mission to deliver unparalleled consumer-centric solutions while reinforcing the companies’ shared values of integrity, empathy, and accountability.

The investment in e-TeleQuote aligns seamlessly with GoHealth’s strategic vision and commitment to enhancing consumer experiences through innovation and operational excellence. Both companies bring to the table a deep reservoir of industry expertise and a complementary set of strengths that will drive mutual growth and deliver even greater value to consumers, especially as the upcoming benefit season expects to bring significant disruption and high demand for a high-quality shopping experience for Medicare consumers.

Complementary Attributes for Enhanced Value
GoHealth and e-TeleQuote share a dedication to putting consumers at the center of their operations. “GoHealth’s scale, proprietary technology and operational excellence combined with e-TeleQuote’s established talent and high-quality track record will create a mutually accretive relationship poised to drive better outcomes for and meet the evolving needs of our Medicare consumers,” said Vijay Kotte, CEO of GoHealth.

Consumer-First Orientation
“At the heart of this transaction is a shared commitment to a consumer-first approach. Both GoHealth and e-TeleQuote have consistently demonstrated a deep understanding of and responsiveness to consumer needs. We are excited to tap into the power of the proprietary technology at GoHealth, including the PlanFit Checkup, which will better serve our consumers while driving increased efficiency and effectiveness in choosing the Medicare plan that best meets their needs. By combining our resources and expertise, we are poised to collectively elevate our consumer experience and deliver even better tailored solutions that prioritize the well-being of our consumers,” said Craig Uchytil, CEO of e-TeleQuote.

Looking Ahead
“As we embark on this exciting new chapter, we remain committed to a seamless integration process that prioritizes the interests of our customers, team members, and stakeholders. We are confident that this acquisition will not only strengthen our market position but also enhance our ability to deliver exceptional value and service not only in this upcoming Annual Enrollment Period but for years to come,” said Kotte.

Learn more at www.GoHealth.com

About GoHealth, Inc.
GoHealth is a leading health insurance marketplace and Medicare-focused digital health company. Enrolling in a health insurance plan can be confusing for customers, and the seemingly small differences between plans can lead to significant out-of-pocket costs or lack of access to critical medicines and even providers. GoHealth combines cutting-edge technology, data science and deep industry expertise to build trusted relationships with consumers and match them with the healthcare policy and carrier that is right for them. Since its inception, GoHealth has enrolled millions of people in Medicare plans and individual and family plans. For more information, visit https://www.gohealth.com.

About e-TeleQuote Insurance, Inc.
e-TeleQuote is a Medicare Insurance Marketplace which specializes in helping Medicare Beneficiaries compare Medicare Advantage and Medicare Supplement plans from top carriers and enroll in the plan that’s right for them.

Forward-Looking Statements
This release contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding our expected growth, investment plans and business transformation are forward-looking statements.

In some cases, you can identify forward-looking statements by terms, such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

These forward-looking statements speak only as of the date of this release and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including important factors described in the section titled “Risk Factors” in our 2023 Form 10-K, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and in our other filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Media Inquiries
pressinquiries@gohealth.com

Investor Relations
jshave@gohealth.com

This press release was published by a CLEAR® Verified individual.

OpenAI Co-founder Ilya Sutskever’s New AI Venture SSI Raises $1 Billion to Ensure Safe Superintelligence

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– SSI, co-founded by Ilya Sutskever, raises $1 billion, valuing the startup at $5 billion.
– The company focuses on developing safe AI that surpasses human capabilities.
– Top investors like Andreessen Horowitz and Sequoia Capital back the project.

Safe Superintelligence (SSI), the latest venture from OpenAI’s former chief scientist Ilya Sutskever, has made a significant splash in the AI world by securing $1 billion in funding just three months after its inception. With a valuation of $5 billion, SSI aims to develop artificial intelligence systems that are not only more powerful than current models but are also designed with safety and ethical considerations at the forefront.

SSI’s funding round saw participation from top-tier venture capital firms such as Andreessen Horowitz, Sequoia Capital, DST Global, and SV Angel. The company’s focus on AI safety—a hotly debated topic in the industry—has attracted significant interest, especially as concerns grow about the potential for rogue AI systems to cause harm. Sutskever’s new venture promises to prioritize safe AI development, a move that aligns with the increasing regulatory scrutiny faced by AI companies worldwide.

The startup, which currently operates with a small team split between Palo Alto, California, and Tel Aviv, Israel, plans to use the newly acquired funds to build its computing power and recruit top-tier talent. This strategic approach underscores SSI’s commitment to creating a team of highly trusted and skilled researchers and engineers who share the company’s mission of developing safe AI.

Sutskever’s decision to leave OpenAI and start SSI was driven by his vision to tackle a different aspect of AI development—one that diverges from the path he was previously on. His departure from OpenAI earlier this year followed a series of internal conflicts, including the controversial removal and subsequent reinstatement of OpenAI CEO Sam Altman. This turn of events diminished Sutskever’s role at OpenAI, leading to his departure and the eventual formation of SSI.

Unlike OpenAI’s unconventional corporate structure, which was designed with AI safety in mind but also led to internal turmoil, SSI operates as a traditional for-profit company. This structure allows SSI to focus more on its mission without the complications that arise from a more complex corporate governance system.

SSI’s CEO Daniel Gross, along with Sutskever and Daniel Levy, a former OpenAI researcher, are steering the company toward becoming a leader in AI safety. The team is committed to building AI systems that not only advance the technology but also ensure that these systems remain aligned with human values. This focus on ethics and safety is becoming increasingly important as AI systems continue to evolve and integrate into more aspects of everyday life.

SSI’s approach to AI development includes rigorous vetting of potential hires to ensure they align with the company’s values. Gross emphasized the importance of recruiting individuals with “good character” who are motivated by the work rather than the hype surrounding AI.

As the AI industry continues to grow, SSI’s emphasis on safety could set it apart from other AI startups. The company plans to partner with cloud providers and chip manufacturers to meet its computing needs, but it has yet to announce specific partnerships. Sutskever’s early advocacy for scaling AI models laid the groundwork for many of the advances seen today, and his new approach at SSI suggests a continuation of this innovative mindset—albeit with a different focus.

With $1 billion in funding and the backing of some of the most prominent venture capitalists, SSI is poised to make a significant impact in the AI industry. The company’s focus on safe superintelligence could pave the way for new advancements that are not only powerful but also ethically sound.

Nvidia Leads Chip Stocks Lower as Market Takes a Downturn

Posted on by slightbourne@noblecapitalmarkets.com

Nvidia’s stock tumbled nearly 8% on Tuesday, leading a broad decline in semiconductor stocks and contributing to a rough start for the market this month. The S&P 500 experienced a drop of over 1% amid a broader market slump, exacerbated by disappointing data from the ISM manufacturing index. This data raised concerns about the strength of the economy and the potential for the Federal Reserve to cut interest rates, which in turn impacted investor sentiment across various sectors.

The semiconductor sector, which has been a high-flyer over the past year thanks to the AI boom, saw significant losses. Nvidia, a dominant player in AI data center chips, saw its stock fall dramatically. Other major chipmakers also experienced declines, with Intel and Marvell down 8%, Broadcom falling around 6%, and AMD and Qualcomm each dropping 6%. The SMH, an index tracking semiconductor stocks, was down 6%, marking its biggest one-day loss in a month.

The optimism driving chip stocks had been fueled by the belief that the artificial intelligence revolution would lead to increased demand for semiconductors and memory. Nvidia, in particular, has seen its stock rise nearly 129% so far in 2024, bolstered by its leading position in AI data center chips. However, some investors were unsettled by Nvidia’s recent forecast, which suggested a potential slowdown in growth despite reporting impressive quarterly earnings of $30 billion and a 154% year-on-year increase in data center revenue.

Nvidia’s recent performance highlights the volatility in the semiconductor sector. The company’s stock had recently surged nearly 25% in three weeks following a global market sell-off, but Tuesday’s drop brought it to its lowest level since mid-August. The decline was attributed not only to the broader market downturn but also to concerns over Nvidia’s gross margins, which are expected to decrease slightly into the end of the year.

Meanwhile, other chipmakers are striving to capture investor attention with their AI products. Intel unveiled new laptop processors capable of running AI programs on-device, and Broadcom, which collaborates with major companies to develop custom AI chips, is set to report its third-quarter earnings on Thursday. Qualcomm continues to promote its chips as optimal for AI applications on Android phones.

Despite the challenges faced by Nvidia and other chipmakers, Wall Street remains largely optimistic about the sector’s long-term prospects. Analysts from Stifel reiterated their Buy rating on Nvidia, maintaining a $165 price target. They remain confident in Nvidia’s role as a primary beneficiary of the ongoing modernization of data center computing.

As Nvidia prepares to ramp up production of its next-generation Blackwell chip later this year, analysts expect the stock to potentially recover and continue its upward trajectory, provided the new products meet market expectations.