Saturday, 31 August 2024

Welcome to credit card points mania

Photo illustration of a credit card.
When played right, credit card rewards can unlock a world of luxury. But it comes at a cost.
  • If you've gotten really into credit card rewards in recent years, you're not alone.
  • Some Americans go to great lengths to maximize points, sign-up bonuses, and cashback.
  • It's a way to buy a life of luxury — as long as you don't dig yourself too far into debt.

Aaryan Desai picked up a hobby during quarantine: researching credit card rewards.

The 20-year-old swipes as much as he can. Right now he's banking points for a concert in October and a big trip after he graduates from Georgia Tech.

Desai is part of a new generation of credit card users: young, perks-focused, and ready to maximize. Today's credit cards, he said, are like the coupon books of yore. The perks might not always be the right fit, but, if you figure out a good configuration, you can find some big savings.

For Desai and other rewards hounds, the realization that they can perform a sort of points arbitrage was a real hook.

"Just using the money that I would be using otherwise or just getting together with friends and that, 'hey, I can just put it on my card and you can Venmo me later,' opening the door to getting 80,000 points from Chase or 175,000 from American Express — it was a new opportunity," he said, adding: "That's what got me into it."

If it seems like the whole country suddenly has credit card point mania, you would be correct: An Ipsos poll of 1,081 adults conducted from April 31 to May 1 found that 71% of respondents have a rewards or cashback credit card, and 68% said that they prefer using their credit card because of the rewards and points that they can earn.

The poll found that a fifth of Americans ages 18 to 34 use their rewards to pay for things they wouldn't be able to afford otherwise. Younger Americans are flocking to previously fancy cards like American Express, willing to shell out hefty annual fees in exchange for perks like exclusive access to Coachella tickets.

The rewards are a big reason credit cards have become a cultural juggernaut among young Americans. As costs rise and the millennial subsidy fades, credit card rewards help a new generation live lifestyles they may not otherwise be able to afford: first-class flights, hotel rooms, and VIP concert experiences. It doesn't hurt that social media is full of videos and blogs that offer the tantalizing promise of free trips, luxury lounges, and fancy restaurants — if you can cobble together the right puzzle of points and cards without digging yourself into too much debt.

Living the high life on credit card perks

At first, 29-year-old Willem Van Eck thought the rewards game was a snake oil salesman's gambit. Cut to: He's stretched out in a first-class seat, a glass of bubbly in hand.

"Wow," he thought, "this actually is a scheme that you can leverage with the right flexibility and with the right research," Van Eck, a software engineer in the Bay Area, said.

Credit card rewards work as an incentive to get customers to swipe more. They can come in the form of cashback — which means you get a partial refund for a given purchase in the form of a credit on your bill or a transfer to another account. Or they come as points, which are more nebulous but can typically be used as currency for future purchases. And then there are other perks like hotel credits, airline miles, gift cards, and upgrades like Van Eck's.

For instance, the Platinum Card from American Express — often considered one of the top cards for rewards — will cost you $695 in annual fees. In return, you'll get five points for every dollar spent on flights and a point for every other dollar spent. On average, per BI's calculations, an Amex point is worth 1.8 cents. Say you spend $5,000, $2,500 of which went toward flights; you'd net 15,000 points, which could equal around $270 — a significant chunk of the annual fee.

In addition, many cards will also offer substantial sign-up rewards. The Platinum Card offers 80,000 points for spending $8,000 in the first six months of holding the card. Those 80,000 points alone could be worth twice as much as the annual fee.

Taking advantage of this system requires diligence and restraint to avoid paying more in interest and fees than you gain in rewards. According to a paper looking at who this system hurts and benefits, borrowers who carry balances and businesses — which pay a fee on each credit card transaction — subsidize the fun for the rest of us.

Pre-pandemic, Van Eck was chasing cards with high sign-up bonuses, like the Chase Sapphire Preferred card, because they allowed him to transfer points to airlines so he could book business or first-class seats. During the pandemic, he took note of the beefed-up bonuses and short-term benefits that companies were offering in an attempt to lure customers; his Delta card offered a $15-a-month dining credit, for instance. That's when Van Eck noticed that more of his Gen Z and millennial friends starting to become adept at navigating their benefits.

Van Eck is very cautious of lifestyle creep and ensuring that cards are worth his while, especially amid high interest rates, inflation, and recessionary fears.

"I've seen most of my peers, including me, reevaluate the value proposition of the cards," he said. Every year, he goes through his list of cards to see which ones paid for themselves without him changing his behavior. If one doesn't, he'll cancel it.

But not everyone is as prudent as Van Eck. In the high-paying tech industry where he works, Van Eck still sees people changing their habits to maximize rewards, which he doesn't think is smart.

This could be why delinquencies have been on the rise in recent years, with the youngest borrowers leading the pack. After all, credit cards are fun to use. No, really. Contrary to the belief that we overconsume with credit cards because they ease the pain of spending, research finds that their bigger appeal is that they make our brains feel like we're getting a reward. All that stands between you and access to that first-class airport lounge are a few taps or swipes.

Nothing good lasts

Credit card companies aren't just giving away rewards for free.

As Lulu Wang, an assistant professor of finance at Northwestern's Kellogg School of Management finds, many businesses will pass on their costs to customers. For example, say you use a 1% cash back rewards credit card at your favorite local coffee shop on $100 worth of coffee for you and your friends. The shop pays a 2% fee on the transaction — $2 — to your card issuer. Then, your card issuer would use some of that 2% fee to give you your 1% back. To cover their fee, the shop might raise their prices.

"In some sense, when you benefit from those rewards, you're taking that money from some mix of the merchant and other cash and debit card consumers out there in the economy who are then not benefiting from those rewards," Wang said.

Perks aren't always a great deal for everyone. Will Springer, a 41-year-old in Indiana, uses his Chase Sapphire Preferred and Amex Platinum cards primarily for perks like travel insurance and car rentals. Since he lives in a more rural area, an Equinox gym membership benefit is moot, and he can't really use the Uber benefit offered — he sometimes converts it into food delivery credit for Uber Eats.

Other loyal credit card point users say you can't bank on your favorite perks sticking around. Brandon Zemel, a 32-year-old music producer in Las Vegas, puts pretty much everything on a credit card. He has two cards, the Chase Sapphire Reserved with a higher annual fee that's more travel-catered, and the Chase Freedom Unlimited, which has a fairly flat return on points. He said his travel card shaves hundreds of dollars off of his expenses, and he loves to use his points to get himself onto seat upgrade lists.

But Zemel recently lost a hugely useful travel benefit: a "priority pass" that could be converted into a $28 dining credit for both him and a guest.

"It seems to be a thing these days that every year, two years, three years, these companies devalue their product or their perks provided by their product," Zemel said. "And I guess to some extent it's to be expected, but it does kind of remind you that the things that you currently enjoy are not necessarily going to be here long term."

As Zemel has seen during his time as a cardholder, the rewards craze has basically "grown exponentially," propelled by popular blogs and TikTokers. That can also dim the appeal of previously exclusive perks, like overcrowded airport lounges.

"People got really used to anyone with a pulse basically having some kind of access to the lounge at the airports," he said. Now, Delta has recognized that it had too many elite cardholders — leading it, in some cases, to restrict access to lounges to higher spenders.

It's what Wang says is an example of "skyboxification" — an increasing stratification of life among haves and have-nots, like a baseball stadium that's divided between crowds in the stands and richer fans in box seats.

"I can totally understand this looming dread that society is getting splintered into those who have access to this kind of stuff and those who don't," Wang said.

I can relate to this sentiment. At a music festival this summer, I learned that my Chase Sapphire credit card would let me skip the line and access an air-conditioned tent with free water.

However, when I arrived I learned a hard truth: I actually needed the card one tier above mine to get in. For one brief moment, as I gazed at the sparse crowd inside, I thought about applying on the spot. But I ultimately decided it wasn't in my best interest to incur a higher annual fee and open another line of credit.

And yet, as I stood among the packed and sweaty masses, waiting nearly an hour to get food and water, I felt haunted by the skybox appeal. Would a new credit card do anything positive for my finances? Most likely not. Would it make me feel like a VIP at this event? Definitely. Maybe I'll try to get the Sapphire Reserve before next year's festival.

Are you passionate about your credit card rewards? Have you gotten into debt trying to play the points game? Contact this reporter at jkaplan@businessinsider.com.

Read the original article on Business Insider


from Business Insider https://ift.tt/sKSi9Pn

Supersized seed rounds: The earliest stage of the startup market is getting out of control

Money
Some seed rounds are getting bigger due to an investor gold rush by larger multi-stage firms.
  • An investor gold rush is driving larger seed rounds, with more surpassing $5 million.
  • Multi-stage VC firms are inflating seed round sizes by offering bigger checks.
  • More investors want to write the first check with the hope of that turning into a huge return.

There's been an investor gold rush to find the hottest new startup, causing a new dynamic: larger seed rounds.

In some cases, the seed round is getting out of control. While most seed rounds still hover between $1 million and $5 million, a larger chunk of rounds have crept past that $5 million mark in the past three years or so. Recent data suggests this phenomenon might be becoming a new normal.

In the second quarter, the percentage of pre-seed and seed deals below $1 million hit the lowest point since 2015, according to PitchBook's Q2 Venture Monitor report. On the flip side, the share of pre-seed and seed deals at or above $10 million was the highest level ever in PitchBook's dataset.

There are a few reasons for this. Tier one multi-stage firms have decided to allocate more resources to investing at the seed stage, according to several traditional seed investors who Business Insider spoke to.

Firms like Sequoia doubled down on seed investing with a new $195 million fund in 2023 and planned to host more batches of its accelerator program, Arc. Last October, Greylock unveiled a $1 billion early-stage fund and a new initiative called Greylock Edge aimed at helping founders at the pre-idea, pre-seed, and seed stages.

By doing so and adding more demand, they've also caused the seed round size to inflate and can write bigger early-stage checks to founders with established track records. Let's also not forget that the AI startup hype is partially to blame for this as well.

My colleague Sri Muppidi has reported on these supersized seed rounds in AI startups throughout the summer. Felicis Ventures led a $10 million first round into the AI startup MemGPT. Other supersized seed rounds this year include a $10.5 million round by Swedish legal AI startup Leya, and Gameplay Galaxy recently announced a $24 million seed round for its Web3 gaming platform.

Investing in later-stage startups has also not proved as lucrative lately, with firms not able to jockey for enough of a stake to make it worthwhile. These startups are also staying private longer, waiting for a better IPO market, and focusing on improving their financial metrics.

Ed Sim, founder of the seed-stage firm Boldstart Ventures who ranked first on Business Insider's Seed 100 list this year, thinks this rush to invest at the earlier stages started happening more after Instacart's IPO last September. Many of his investor peers caught whiff of the better returns at the earlier funding stages.

Sim said many people looked at where investors bought in at each round and saw that the only investors who were in the money at the IPO were the earlier-stage investors like Sequoia, Khosla Ventures, and Canaan Partners.

Sim postured that many investors thought: "Well, this really says to me that probably being first is the best place to be in the cap table."

Take, for instance, Sequoia, which bought Instacart shares at 24 cents apiece in the company's Series A, The Information reported. The firm's stake at Instacart's $30 IPO price was worth over $1.5 billion.

For those investors that bought Instacart shares after its Series F round, which priced at just under $30, their investments were likely underwater.

Things are pretty much playing out as Sim predicted back in October when he wrote in his Substack newsletter about "the new race to be first" and a novel way to define this stage of check-writing called "inception investing."

For Sim, this first stage of investing can be broken down into three round types: the "discovery" round — typically less than $2 million and reserved for first-time startup founders; a "classic" round of funding ranging from $3 million to $5 million for first-and second-time founders; and then the "jumbo" round, usually over $6 million for repeat founders (this stage is where the larger multi-stage firms tend to get more involved, Sim said).

Shruti Gandhi, a seed investor and founder of Array Ventures who was also featured in this year's Seed 100, says this merging of pre-seed and seed rounds for certain startups isn't necessarily a good thing for the companies.

"If you raise 1.5 [million] and if you raise 5 [million], your growth in like one to two years is not any different," she said. "So then, when you go back out to market, you're screwed."

That's because if a founder raises more money, there's a higher investor bar of metrics and valuation multiples they'll have to meet to raise their next round of funding. Founders also risk diluting more of their stake as a result.

How this larger early-stage round plays out for founders in the next few years remains to be seen.

"I don't think this is going away," Sim said.

Read the original article on Business Insider


from Business Insider https://ift.tt/fPDatli

Friday, 30 August 2024

4 lessons on how to handle being interrupted that we can learn from Kamala Harris

Kama moves a red speech bubble layered over a blue speech bubble.
Selena Rezvani says Vice President Kamala Harris is a master of the "broken record technique."
  • Selena Rezvani says VP Kamala Harris uses 4 strategies to handle interruptions and regain authority.
  • Her techniques include pointed eye contact, body language signals, and firm verbal responses.
  • These methods can help anyone maintain their presence and control in disruptive situations.

This as-told-to essay is based on a conversation with Selena Rezvani, a 46-year-old confidence expert and speaker based in Philadelphia. It's been edited for length and clarity.

Whether at a high-stakes boardroom meeting or bustling networking event, it can be tricky to reclaim attention after being spoken over or interrupted. Your inclination may be to shy away from confrontation and internalize the message that your thought was unimportant.

As a leadership speaker and expert on workplace confidence, I've spent decades analyzing the best techniques for garnering attention and communicating effectively. Vice President Kamala Harris is one of my strongest examples of someone who commands a room with equal parts power and composure.

Harris first grabbed my attention with her masterful handling of interruptions from Mike Pence during the 2020 Vice Presidential debate. Since then, she's continued to be a powerful force on the campaign trail, using her skills to mitigate disruptions and maintain authority.

These are four lessons for how to manage being talked over that we can learn from Harris.

Pointed eye contact can force the interrupter to acknowledge you

When interrupted by Mike Pence during the 2020 Vice Presidential debate, Harris turned her attention to Pence and made pointed eye contact with him. She didn't shrink away from the interaction or internalize his disruption; rather her eye contact demonstrated authority, confidence, and control over the situation.

Making eye contact with someone who's been dismissive of you demands their attention and forces them to acknowledge you. Eye contact can also create a moment of discomfort for the other person, which may incentivize them to stop talking or at least reconsider their behavior.

A body language warning can stop someone from continuing to talk over you

Many people respond to interruption by physically shrinking or questioning themselves. However, Harris stands strong when she's disrupted by using a clear, non-verbal signal that shows she's not done talking. Her go-to, a stop sign hand signal, is an expansive gesture that proves she will continue to claim her full bubble of space in terms of her body language and verbal communication.

I often advise people to continue talking when they're being interrupted, but sometimes a calm, yet assertive gesture like a stop sign or index finger can deescalate an emotional situation and recenter the conversation.

You don't need permission to continue speaking

Harris often responds to disruption by cooly, yet firmly stating "I'm speaking." This short statement conveys that she intends to finish her thought before allowing someone else to take over.

Rather than yielding to the other person by asking "Can I please finish," she stays calm and maintains the focus of her message. It's important to remember that you don't need to ask for permission to continue speaking when someone interrupts you.

The broken record technique is great for reasserting boundaries

A technique that works particularly well with pushy communicators and domineering types is the "broken record technique" which means repeating your phrase, like Harris' "I'm speaking," until you regain control. Harris uses this strategic repetition to highlight just how many times she's been interrupted or disrespected. This technique also reasserts her boundaries and shows she will not back down. Try using this technique with a pushy coworker who isn't hearing or respecting your boundaries the first time around.

The bottom line

No matter who you are, you're sure to come in contact with people who think they're entitled to more space, attention, words, or time than you. The key we can learn from Harris is to not internalize that message and let it diminish your presence.

Stay grounded in the core message you intend to share and don't be afraid to reclaim space. And remember: these tips don't need to be tested out in some high-stakes boardroom meeting. Try testing the waters in low-stakes work or social environments and build your confidence.

If you're an expert with helpful tips that can be used in the workplace and want to share your advice, email Tess Martinelli at tmartinelli@businessinsider.com.

Read the original article on Business Insider


from Business Insider https://ift.tt/nErb7qG

My kindergartner went missing on the first day of school. An AirTag helped bring him home safely.

Shannon Stoker and her family posing for a photo
Shannon Stoker's youngest child was mistaken by another boy in school, his AirTag on his backpack helped the family find him.
  • Shannon Stoker's son Stevie, 6, started kindergarten this year.
  • She put him on the bus, but in the afternoon school said he'd never arrived.
  • Police used an AirTag on Stevie's backpack to track him.

This as-told-to essay is based on a conversation with Shannon Stoker. It has been edited for length and clarity.

My 6-year-old son Stevie and I were both nervous about him starting kindergarten this year. Stevie is autistic and has limited verbal abilities, so I was extra concerned.

We did what we could to prepare. All summer, we worked on Stevie responding with his name when someone asked for it. The Friday before school started, we met with his teacher and special education coordinator.

Sunday night, the eve of the first day, I put paperwork in Stevie's backpack. That's when I remembered I had extra AirTags we'd purchased over the summer to track my older son while he rode his bike.

I grabbed an extra AirTag and slipped one into Stevie's backpack. It was a whim, but it ended up being critically important.

The school couldn't tell me what bus Stevie was on that afternoon

On the first day of school, Stevie was excited. I took his back-to-school photo, and he got on the bus. I checked his AirTag a few times that day, and it showed him at school. I pictured him having a great first day. That's what I was hoping for.

Our plan was for Stevie to take the bus directly to therapy after school. But his online student profile hadn't been updated, so I was worried he might be bused home. I tried to call the transportation company but couldn't get through. Finally, I got through to the school, where someone told me Stevie was on a bus — they just didn't know which.

At 3:45, I stared at the AirTag, trying to figure out where my son was. Stevie rides a special needs bus with four other kids, but I thought the school might have mistakenly put him on the main bus. So, my older son and I walked to the neighborhood bus stop.

When the school said Stevie had been absent, I called 911

That's when the school called again and told me Stevie hadn't been there all day. I went into a total panic. I hung up and called 911. The school called back and confirmed they had checked every kindergarten and special ed class — no Stevie.

Stevie's AirTag had been at school, but terrible things went through my head. I worried that his backpack had somehow arrived, but my child didn't. I even wondered if I'd put him on a real bus that morning. It was sheer terror. The 911 operator could tell. She stayed on the phone with me until an officer arrived at my house.

My husband and the police used the tag to track Stevie

The officer was immediately interested in the AirTag data, and he radioed the tag's location to other officers. I would have chased it myself, but he had told me not to leave. I was in no state to drive.

My husband Andy arrived home from work early, and he didn't even have time to get out of the car before I sent him to chase the AirTag.

Still, I was worried that we were focused too much on the device. The AirTag wasn't actually on Stevie, and if we were chasing a backpack instead of a boy, my son could already be across state lines.

Andy followed the AirTag location and found a bus for people with special needs. He, along with two police officers, pulled up to the bus. The driver told Andy that Stevie wasn't on board. Luckily, Andy peeked in the windows and said, "My son is right there."

The school had mistaken my child for another boy

I was relieved to know Stevie was with Andy. I still get teary thinking about it. They got home at about 4:45 p.m. — the whole incident had lasted about an hour.

Around 5:30 p.m., I heard from the school again. They explained that when Stevie got off the bus, they asked if he was another boy. Stevie didn't answer, so they assumed he was that other boy. The other boy was marked present when he wasn't at school, and Stevie was marked absent.

Stevie was moved to a different school, and for now, Andy and I are driving Stevie to and from kindergarten. He's having a difficult transition to kindergarten, but after this experience, I think that's understandable.

Both Stevie and now his older brother have AirTags in their backpacks for peace of mind.

Editor's Note — DeKalb Community Unit School District 428 provided the following statement to Business Insider:

"The District office was informed of an incident involving a misidentified kindergarten student at Founders Elementary on Monday, August 19. The child was mistaken for another child when getting off the bus in the morning and placed in the other child's classroom. The child was under classroom supervision during the day, and we are thankful the child was located on the bus route home and is safe.

Although we are aware that information is being shared on social media, as a District, we cannot disclose any additional information or details to protect the privacy of the child, family, and staff involved as we work to resolve this incident.

We are deeply sorry for the concern this caused the family and we are conducting a full investigation of the events of the day. Ensuring that each and every child is safe on their routes to and from school, along with their day at school, is our critical priority, and we will continue to evaluate and make adjustments to our procedures to that end."

Read the original article on Business Insider


from Business Insider https://ift.tt/eXJcw5N

Thursday, 29 August 2024

United executive explains why the airline hasn't bought Boeing's newest widebody plane

People watching the 777X at an airshow.
United executive said the Boeing 777X is too big for its multi-hub network in the US.
  • So far, no US airline has purchased Boeing's yet-to-be-certified 777X widebody.
  • A United Airlines executive told BI the jet is too big for the airline's multi-hub network.
  • He said the 777X better suits carriers with one central hub, like Emirates and British Airways.

Despite 481 orders from airlines around the world, Boeing can't sell US carriers on its new widebody jetliner.

A United Airlines executive says that's because the upcoming 777X — the world's largest twin-engine plane in production — is simply too big for what the airline needs.

"We think the 777X will be a very good airplane, but it is a very big airplane," SVP of global network planning and alliances, Patrick Quayle, told Business Insider. "Given our hub structure, we find a smaller widebody is actually better."

United has seven hubs across the US, including Chicago, Houston, Washington DC, San Francisco, Los Angeles, Denver, and Newark, New Jersey, Quayle explained.

Such a wide network allows the airline to split its passenger traffic by serving the same destination from multiple hub cities instead of shuttling them all through one central airport, he said.

Boeing 787-10 Dreamliner, from United Airlines company, taking off from Barcelona airport, in Barcelona on 28th March 2023.
United has placed huge bets on the Boeing 787, which comes in different sizes and ranges.

Quayle pointed to its London and Syndey service, saying the British capital is served 22 times a day from all seven United hubs, while Sydney has flights from San Francisco, Los Angeles, and Houston.

"We're not taking people from the west coast, flying them to the east coast, and then flying to London," he said. "We're flying nonstop from the West Coast, nonstop from the mountain region, nonstop from Houston and Chicago, and nonstop from the East Coast."

United's widebody fleet consists of the Boeing 767, the classic 777, and the Boeing 787 Dreamliner. Since 2022, the airline has amassed a record 150-strong 787 order book to replace its 767s and some 777s.

United already flies more than 70 Dreamliners across all three variants, which come in small, medium, and large, and have varying ranges — giving United added route and capacity flexibility.

The 777X is better for United's central hubs

The 777X is intended to replace Boeing's aging 747 and the Airbus A380 as a more efficient, high-capacity long-haul jetliner.

Quayle said the 777X's immense size is better suited for airlines with one giant central hub, like Emirates in Dubai, Qatar Airways in Doha, Cathay Pacific in Hong Kong, and British Airways in London Heathrow. All of these airlines have ordered the 777X.

"Everything is out, and everything is back, and it's all through these massive connecting complexes," Quayle said. "The reason American, Delta, and United didn't order the 747-8 or the A380 is for this very situation in that the traffic is fragmented and splintered."

Two Emirates A380s parked at Dubai airport.
Emirates has made the mammoth Airbus A380 work because of its central hub structure and is expected to do the same with its 205-strong 777X order.

It's unclear if the other Big 3 US carriers will order the 777X. Neither American nor Delta have confirmed any orders.

American recently ordered 260 new Airbus, Boeing, and Embraer planes, which did not include any widebodies to complement its existing 787 and classic 777 fleets. It's currently overhauling its 777 cabins as well.

Delta retired its classic 777s during the pandemic and is currently flying the 767, old and new A330 variants, and the 777X's competitor, the Airbus A350.

Delta purchased the A350-900 — which holds more than 100 fewer people in two cabins compared to the 426-seater 777X — in 2014 as a replacement for its larger widebodies, including the Boeing 747-400.

Boeing's 777X is in certification limbo

While there is a lot of stake in the future 777X, Boeing is struggling to get it certified.

The jet is already at least five years behind schedule, $1 billion over budget, and certification testing was paused in August over a structural issue.

Inside the 777X test jet in January with blue seats and orange wires.
In January, BI toured one of Boeing's 777X test jets at the Wings Airshow in India.

"During scheduled maintenance, we identified a component that did not perform as designed," Boeing previously told Business Insider. "Our team is replacing the part and capturing any learnings from the component and will resume flight testing when ready."

Qatar and Emirates have previously said they are expecting a 2026 delivery for their respective first 777X planes.

Once the 777X is finally certified, airlines can take advantage of its revolutionary folding wingtips, and passengers can expect onboard upgrades like a more spacious cabin and unique lighting that resembles the sunset or the northern lights.

Read the original article on Business Insider


from Business Insider https://ift.tt/znMUIKv

Wednesday, 28 August 2024

Russia feels unfamiliar pain as Ukraine hobbles its air defenses, forcing tough choices

Two Russian S-400 air defense systems on the back of trucks are parked in a snowy field with some trees around them.
S-400 defense systems, sent by Russia, at the Brestsky training ground near Brest, Belarus.
  • Russia's air defenses are being stretched, forcing it to choose where to send protection.
  • Experts say Ukraine's increased attacks on Russia have exposed and created gaps in its coverage.
  • Russia has long had the upper hand with defenses, but Ukraine is finding new opportunities.

Russia's air defenses are being stretched, putting the country in a position where it has to decide what to protect.

Air defenses have been one of the most crucial pieces of weaponry in Russia's invasion of Ukraine, and both sides have been using them to defend against drone and missile attacks and to stop each others' aircraft from flying into their air space.

But because of Ukraine's successful strikes and recent tactics, Russia now has to decide where to put its air defenses.

And that's giving Ukraine new opportunities to target weaker areas, warfare experts told Business Insider.

Russia's defenses are eroded

Last month, analysts at the Institute for the Study of War, a US think tank, said in their war update that Russia did not appear to have enough air defenses to protect everything it needed to — even in supposedly secure areas.

George Barros, a Russia analyst at the ISW, told BI that Russia has arranged its defenses to protect the areas that are most under threat, which means that other areas are then exposed.

A rocket launches from a S-400 missile system against a dark blue sky.
An interceptor launches from a S-400 missile system in southern Russia.

If Ukraine can get past that first line of defense, then it can get deeper into Russia, where the country is "not adequately protected," he said.

Ukraine said it destroyed 59 Russian air defense systems in June, its second-highest monthly total in the war (after 73 in July 2023).

Those figures are not independently confirmed, and there is no objective figure for the number of Russian air defense systems that have been damaged or destroyed.

But Ukraine has been observed destroying a host of systems, including many of Russia's most advanced ones.

Ukraine is hitting Russia more

Ukraine is forcing Russia to consider where to defend by hitting more and more sites in Russia, the experts said.

Western allies recently gave Ukraine permission to use their weapons to hit some military targets in Russia, whereas before, it was limited only to targets in Russian-held territory in Ukraine.

Ukraine has also escalated its drone campaign, hitting airfields and oil facilities, sometimes hundreds of miles inside Russia.

Justin Bronk, an airpower expert at UK think tank Royal United Services Institute, said in June that Ukraine appeared to be pursuing a clear strategy to force Russia's air force "to either vacate its bases within several hundred miles of Ukraine's borders or dedicate an inordinate quantity of air defense systems to defending them."

The ISW's update last month said Ukraine's increasing drone attacks had stretched Russia's capabilities, and that the strikes "continue to pressure Russia's air defense umbrella and force the Russian military command to prioritize allocating limited air defense assets to cover what it deems to be high-value targets."

An image purporting to show a destroyed Russian S-400 launcher.
An image purporting to show a destroyed Russian S-400 launcher.

It added that satellite imagery from May suggested Russia had concentrated some systems around Russian President Vladimir Putin's residence in Valdai, Leningrad Oblast.

Riley Bailey, a Russia analyst at the ISW, told BI that Ukraine's escalating, near-daily strikes put more pressure than ever on Russia's military command.

Michael Clarke, a Russia and Ukraine expert at RUSI and King's College London, who's also a UK national security advisor, said Russia had never anticipated being in a war where drones would feature as heavily as they have in this one.

The head of the Russian region of Tatarstan said in April that Russian companies and local authorities must defend themselves against Ukrainian drone strikes instead of relying on the state's defenses after targets in the region were struck.

The ISW called that "a clear acknowledgment and admonition of the Russian Ministry of Defense's (MoD) failure to defend Russian cities and critical infrastructure from Ukrainian drone strikes."

Ukrainian soldiers operating a drone during training of the 22nd brigade in Donetsk oblast, Ukraine
Ukrainian soldiers operating a drone.

Bailey said this was happening "because Russia doesn't have enough assets to widely cover Western Russia against these regular drone strikes."

The problem is heightened in Crimea

Ukraine has specifically targeted Crimea, the peninsula that Russia annexed in 2014.

Bailey said Ukraine has conducted a "pretty consistent" campaign to target Russia's air defenses in Crimea and strain Russian air defenses.

The UK Ministry of Defense said in April that the cumulative effect of Ukraine's attacks on defenses in the peninsula hurt Russia's ability to defend the Crimea airspace.

Clarke, the Russia and Ukraine expert at RUSI and King's College, said Ukraine has been "quite successful, particularly in Crimea, in destroying some of the Russian radars and antiaircraft systems."

He described Ukraine as attacking Russia's air defense network "and then using the holes in the network that they created to go through and attack the air bases, or in some cases, Sevastopol, the naval base."

He also said Russia's defenses have become more stretched than ever as, with the frontline static, Ukraine has increasingly focused on hitting into Russia's occupied territories and into Russia itself.

A Russian airfield near Sevastopol, Crimea on Mar. 10, 2023.
A Russian airfield near Sevastopol, Crimea, in March 2023.

Ukraine's repeated strikes have resulted in reports that the Russian military has had to constantly move systems in Crimea, making it harder to continue using the peninsula as a military logistic hub and staging ground, Bailey said.

And Ukraine's attacks elsewhere in Russia appear to be making it harder for Russia's presence in Crimea.

Ukrainian partisan group ATESH said in June that Russia moved defenses from the peninsula to the Russian region of Belgorod, where Ukraine was attacking.

It's an air defense war

Analysts point to the current conflict as one that has become largely an air defense war — and one where Russia still has the upper hand.

Ukraine's air defenses are much smaller, and it frequently runs low on equipment.

A Patriot air defense system firing an interceptor missile in Greece with flame erupting out of the launcher.
A Patriot missile battery, like the ones Ukraine has been given by allies, fires an interceptor missile in Greece.

Meanwhile, Russia's air defense arsenal remains formidable.

Ukraine is also at a disadvantage, warfare experts said, because the US will not let it use the long-range weapons it has given to hit deep into Russia, where Russia keeps many of the aircraft it uses to launch attacks on Ukraine.

Getting that permission and more aircraft would create a more even playing field.

And being able to hit more targets in Russia would allow Ukraine to stop more attacks at their source — likely forcing Russia to make even more decisions about where to put its air defenses, and what areas to leave vulnerable to Ukrainian attacks.

Read the original article on Business Insider


from Business Insider https://ift.tt/IcBS1gP

Google now uses AI to moderate internal town halls. Some employees say it lets leaders dodge tougher questions.

Google CEO Sundar Pichai
  • Google introduced a new AI tool that combines and summarizes employee questions in its town halls.
  • Some staff say it's censoring tough questions by making them less pointed.
  • A Google spokesperson said the new tool was rolled out in response to feedback from employees.

Google isn't just shipping AI products to customers as fast as it can; it's also building AI into its internal workplace tools — even its monthly company all-hands meetings.

Google has started using AI this year to process and summarize questions asked by staff at its monthly town halls, known as TGIF (Thank God It's Friday). The tool often softens tough questions and removes some elements, letting leaders avoid more pointed questions in an open forum, according to some employees, whose identities Business Insider confirmed and who asked to remain anonymous because they were not permitted to talk to the press.

For years, Googlers could submit questions through an internal system known as "Dory." Staff could also "upvote" questions in the list, and CEO Sundar Pichai and other executives would usually address the ones that received the most votes.

In April, Google replaced Dory with a new tool called "Ask" that consolidates similar questions together and summarizes them – often in a more polite way that omits some employees' pointed and more direct comments.

Googlers can still click on an AI summary and see the individual questions that it summarized, but staff can only vote on the AI summaries, one employee said.

"They're just trying to dodge damaging context and questions from being seen by a larger audience and avoid engaging with any specifics asked in one particular question," said another employee.

Another Googler said TGIF had become "much less interesting" since the tool's introduction.

"Googlers don't love it because they feel it removes the raw or direct element of the question," that person said. "The AI words the questions very politely whereas Googlers were never shy about being snarky or direct."

A Google spokesperson said the new tool was rolled out in response to feedback from employees who wanted leaders to address more questions across a broader range of topics during all-hands meetings.

Google's TGIF meetings were once a weekly blow-out event where leaders spoke frankly with rank and file about internal projects, and staffers could raise concerns about the workplace or the company strategy.

As Google swelled in size, the meetings became every other week. Then, in 2019, after a bout of company protests and increased tensions between leadership and employees, Pichai announced TGIF would be a monthly affair and more limited in the scope of the conversation.

Some employees said the meetings have become increasingly pointless, and the new "Ask" tool is another way to let executives avoid answering difficult questions. Several staffers told BI that they rarely, if ever attend TGIF, let alone ask questions.

The data seems to prove that. In 2023, fewer than 1% of Googlers asked a question in the company's Q&A tool for TGIF, the spokesperson said.

The spokesperson also said that since the introduction of "Ask," twice as many Googlers have asked and voted on questions. They said the company was taking feedback from employees and would continue to iterate on the tool.

"If we're being honest, the way the questions are worded doesn't matter," one of the employees who spoke to BI said. "Execs have been dodging questions or giving very vague answers at TGIF for years now."

Are you a current or former Google employee with more insight to share? Got a tip? You can contact this reporter securely on Signal at hughlangley.01 or email at hlangley@businessinsider.com. Use a non-work device.

Read the original article on Business Insider


from Business Insider https://ift.tt/iEIA4RO

A timeline of the controversy surrounding Francis Ford Coppola's $120 million-movie 'Megalopolis'

A man with black hair and an unbuttoned black shirt holds a light above his head while standing in front of kaleidoscopic mirrors.
Adam Driver as Caesar on the "Megalopolis" poster.
  • A trailer for Francis Ford Coppola's "Megalopolis" was pulled because it used fake quotes.
  • Coppola also came under fire when videos of him kissing extras on the set surfaced online.
  • Coppola funded the science-fiction drama himself, and it cost him $120 million to make.

Francis Ford Coppola's science-fiction drama "Megalopolis" has become mired in controversy in the run-up to its scheduled September release.

Set in a dystopian future, the film sees an architect named Caesar (Adam Driver) and the mayor of the imagined US city, New Rome, fight over how to rebuild it following a disaster.

It's a passion project that Coppola has been trying to make since 1983. However, the scale and ambition of the movie, which features a technologically advanced city and its lead character controlling time, has made it difficult for the director to persuade studios to provide the huge budget necessary to pull it off.

Their reluctance could be surprising considering Coppola has made some of the best movies of all time, including "The Godfather" and "Apocalypse Now." However, the skepticism could partly stem from the fact that his recent projects, including "Twixt" and "Tetro," failed to ignite the box office. Studios may fear Coppola doesn't have his finger on the pulse like he once did.

Coppola took it upon himself to fund the movie himself, including selling his vineyards in Sonoma County, California, in July 2021 for an undisclosed amount. Robert Nicholson, an expert in West Coast wine assets, estimated in an interview with North Bay Business Journal that the sale could have fetched between $500 million and $1 billion.

Vanity Fair reported the director used this money to make "Megalopolis" for $120 million.

Here's a complete timeline of the drama surrounding "Megalopolis."

May 2024: Crewmembers claim Coppola was unprofessional and unprepared during filming.
A blurry man in a black suit holds a spyglass, while a woman with dark hair in a black dress and a brown belt is in focus in the background. A cityscape is behind them.
Adam Driver as Caesar and Nathalie Emmanuel as Julia in "Megalopolis."

In a lengthy feature published in May, The Guardian explained how difficult it was for Coppola to get "Megalopolis" made, and also reported that he was unprofessional and unorganized when filming started in November 2022.

An anonymous crewmember told the outlet: "He would often show up in the mornings before these big sequences and because no plan had been put in place, and because he wouldn't allow his collaborators to put a plan in place, he would often just sit in his trailer for hours on end, wouldn't talk to anybody, was often smoking marijuana … And hours and hours would go by without anything being filmed."

Anonymous crewmembers also alleged Coppola was unprofessional toward women, with the Guardian writing that he "tried to kiss some of the topless and scantily clad female extras." He claimed it was an attempt to "get them in the mood" for a debauched nightclub scene, the outlet reported.

July 2024: Footage appears to show Coppola kissing extras on the "Megalopolis" set.
Francis Ford Coppola attends the "Megalopolis" Red Carpet at the 77th annual Cannes Film Festival at Palais des Festivals on May 16, 2024 in Cannes, France.
Francis Ford Coppola has self-funded "Megalopolis."

Variety published exclusive videos from the "Megalopolis" set in July 2024, which appeared to show Coppola kissing an extra in the nightclub scene.

A crew member told Variety that Coppola told the set: "Sorry, if I come up to you and kiss you. Just know it's solely for my pleasure."

Executive producer Darren Demetre said in a statement to Variety via Coppola's team: "There were two days when we shot a celebratory Studio 54-esque club scene where Francis walked around the set to establish the spirit of the scene by giving kind hugs and kisses on the cheek to the cast and background players.

"It was his way to help inspire and establish the club atmosphere, which was so important to the film. I was never aware of any complaints of harassment or ill behavior during the course of the project."

August 2024: Lionsgate pulls a trailer because it used fake quotes.
A woman in a glittery black dress rides a plastic unicorn surrounded by partygoers in a nightclub.
Nathalie Emmanuel as Julia in "Megalopolis."

On August 21, Lionsgate released a new "Megalopolis" trailer.

It started with quotes from bad reviews of Coppola's previous movies including "The Godfather," in an apparent attempt to show how critics were wrong about his iconic films, and would eat their words with "Megalopolis," too.

However, Vulture quickly discovered that some of these quotes were faked, and The Independent reported that one was taken from Roger Egbert's review of 1989's "Batman," not of "Bram Stoker's Dracula," which Coppola directed in 1992.

Lionsgate pulled the trailer (although it can be still seen on YouTube).

Lionsgate said in a statement to Variety on Thursday: "Lionsgate is immediately recalling our trailer for 'Megalopolis.' We offer our sincere apologies to the critics involved and to Francis Ford Coppola and American Zoetrope for this inexcusable error in our vetting process. We screwed up. We are sorry."

Lionsgate and Coppola's representatives didn't immediately respond to a request for comment from Business Insider.

August 2024: Coppola confirms he kissed 'young women' on the 'Megalopolis' set.
An older man with gray hair and a gray bears in a cream shirt and brown jacket.
Francis Ford Coppola at the Cannes Film Festival 2024.

Speaking to Rolling Stone in August, Coppola responded to The Guardian article about the "Megalopolis" production, and claims that he sexually harassed extras during the nightclub scene.

The director called the article "totally untrue," before saying that he knew the women who he kissed.

"The young women I kissed on the cheek, in regards to the New Year's scene, they were young women I knew," he said.

"It's all so ridiculous. Look at the timing of that article. It's right before we're about to premiere the film at Cannes. They're just trying to damage the picture."

Representatives for the Guardian did not immediately respond to Business Insider's request for comment.

August 2024: Coppola says he didn't want the film to be a "woke Hollywood production."
An older man with gray hair in a black suit and a white shirt. His blue tie has the US Pledge of Allegiance written in small white writing across it.
Jon Voight at the "Reagan" premiere in Los Angeles.

Rolling Stone also asked Coppola about casting Jon Voight as Hamilton Crassus III in the film. The actor has been outspoken about his support for Donald Trump.

When discussing Voight and his political views, Coppola said that he intentionally cast people who had been "canceled."

"What I didn't want to happen is that we're deemed some woke Hollywood production that's simply lecturing viewers. The cast features people who were canceled at one point or another," he said.

He added: "There were people who are archconservatives and others who are extremely politically progressive. But we were all working on one film together. That was interesting, I thought."

Read the original article on Business Insider


from Business Insider https://ift.tt/NqYw9j3

Tuesday, 27 August 2024

My daughter and I grew apart as she got older. Taylor Swift's music brought us together again.

Taylor Swift fans at a concert hold a sign that says, "16 years of eras with you".
  • My daughter and I started listening to Taylor Swift's music when she was young.
  • As she grew older, she pulled away from me and Swift's music.
  • She's now an adult and the Eras Tour helped us reconnect again.

We decorated the minivan with chalk paint and wrote "We <3 Taylor Swift" on the windows. It was 2011, and my 9-year-old daughter sported a cute bob haircut, glasses, a cowboy hat, and a glow stick necklace.

It was the Speak Now tour, otherwise known to me as "too much money for a 9-year-old, but it made a great Christmas morning gift concert." With binoculars in tow, we joined a few other mom-daughter duos and headed to McDonald's for Happy Meals. We tailgated in the parking lot, eating chicken McNuggets while listening to Taylor Swift. The moms came prepared with our pre-mixed cocktails.

We made our way to our seats and were almost in the very last row in the section dead center to the main stage. As Taylor Swift made her appearance, I watched my daughter peer through the binoculars and scream. She and her cousin would scream, then look at each other excitedly, then look back through their binoculars and scream some more.

Mom and daughter at Speak Now tour
The author took her daughter to her first Taylor Swift concert when she was 9 years old.

She was laser-focused on the stage, and I was just as focused on watching her. Her pure bliss when seeing her favorite singer in person gave me that distinctive feeling a parent gets when they share a special moment with their child. It was as if I was experiencing it for the first time, too. I remember wishing I could freeze it in my brain because I knew there would never be another first concert with her.

As my daughter moved through adolescence, it became increasingly difficult to connect with her until Taylor Swift's Eras tour gave us another chance.

As she grew older, I struggled to connect with her

It wasn't that long ago I was preparing to talk to my daughter about getting her period. Unlike my own mother, I wanted to be proactive. I put together feminine hygiene supplies and an age-appropriate book into a shoebox. I think I put some "fun" things in the box, too, like hair ties and lip gloss. That's something I would do because I either read about it in a magazine or a book.

When I sat on her bed with her, I told her that I wanted to give this to her because, unlike my mom, who didn't talk to me about such things, I wanted to talk to her. She responded by tossing the box on the ground, saying, "I wish you were more like your mom." It felt like she punched me.

I didn't know how to respond, so I left her room feeling deflated. When I shared this exchange with other moms, I recall getting responses like, "Don't take it personally. This is how they are at this age." But it felt pretty damn personal.

I carried on and didn't give up because that's what moms do.

We went to more Taylor Swift concerts together

After that first concert, we saw Taylor Swift two more times when my daughter was 11 and 13 at the Red and 1989 tours.

Although a part of me couldn't believe I was spending this much money on my young daughter's birthday or Christmas present, there was another part of me that knew this was a chance for connection between us. During those years, she started wearing contact lenses, grew her hair long, began shaving her legs, made the duck face in photos, and was changing as young teenage girls do. And it felt like it all happened overnight. When I look at photos from these two concerts, I can see the changes. She goes from looking cute to pretty and from silly to self-aware.

Taylor Swift's Reputation Tour in 2018 happened around my daughter's sophomore year of high school and three years since the last tour. When I asked her if she wanted to get tickets, she said she didn't like the album. Again, things were changing. I don't know why she didn't like the new album. She was broadening her musical taste, perhaps. She preferred going to concerts featuring Wiz Khalifa, Travis Scott, and the Chainsmokers. And she most definitely didn't want to go with me.

I missed my Taylor Swift-loving daughter

I longed for my Taylor Swift-loving girl and wondered how I would ever find a connection with who she was becoming. There were smaller, cheaper ways to connect with my daughter. I read the same books she did or watched the same shows. But as she tumbled through those years and acquired the bumps and bruises of disappointing friendships and heartaches, I was not the person she wanted to bandage her wounds.

Our fights were mostly about her wanting to do something that I didn't think she was ready to do. Whether it was a concert or a party, I was rarely ready to say "yes," and she was always halfway out the door.

I remember a time she wanted to go to a friend's house. For some reason I can't recall, I didn't want her to go. I told her no and she told me she was going anyway. When she moved to walk past me, I found myself physically blocking her from going down our stairs. I stood folding my arms across my chest and my legs spread wider than my hips, knees slightly bent. She tried to get around me again and I moved in front of her. My heart was racing, and I couldn't believe my own behavior. I eventually turned around and walked away. I can't remember if she went or not. What I do remember vividly is how I felt when it was over. I had this horrible feeling of having lost control and having said or yelled unkind things while at the same time feeling justified in saying no.

Mom and daughter posing for photo
The author and her daughter reconnected thanks to Taylor Swift and her music.

Although tiring, it shouldn't have been surprising. My daughter always had an independent streak since she was very young. My husband and I still laugh about how she, at 5 years old, would raise her hand and say, "Excuse me," to get our server's attention in a restaurant so that she could change something in her order. It got to the point that if we needed our server, we would ask our young child to get their attention. She was better at it than we were.

I loved and hated, in equal measure, her self-sufficient nature.

The Eras Tour brought us together again

Fast forward to a month before the ErasTour in 2023, and we had tickets. My daughter, now 21, had just completed her junior year of college and was moving to a big city the day after the concert.

I would have to make the seven-hour drive, move her into her apartment, and help her get acclimated to a new place. And it filled me with trepidation because long car rides with her were very quiet and lonely. I would drive, and she would be looking at her phone or sleeping. If I tried to make conversation, it usually didn't go any further than, "Who did you see last night?" and she would reply, "I don't know. Some friends." Gone were the days of Happy Meals and glow sticks.

We packed the car and left around 9 a.m. She had grown into her independence. And to my surprise, our drive was not only better than I expected, but I felt something shifting. Susie drove, we played Taylor Swift, and we talked about the show the night before. Together, we could appreciate the more mature and nuanced songs that Swift was singing.

We smiled and sang to our old favorites, "Mean" and "Never Ever Getting Back Together." Those songs felt like old friends visiting us after a long time away.

I learned that "Mr. Perfectly Fine" is one of her favorite songs from many albums ago. This was new information. Did it remind her of a past crush? I had so many questions, but I decided not to ask so that we could keep talking. Nothing killed our conversations more than me asking a bunch of questions. She continued to share stories about her college life and her friends, and I savored every bit of it.

We've all grown

I thought about how Taylor Swift had grown, too. Like my relationship with my daughter, she was shifting into a more mature performer. She didn't throw her head around like she did 12 years ago. She still bounces her blonde hair back and forth, but her moves are sophisticated. Like us, she also used expletives more, too.

Parenting my daughter has been a lot harder than I thought it would be. Finding a connection helped, and still does, get us through the tough times. Now that she is 22, I can see some of my mistakes more clearly. I can also see the correctness of some of my decisions.

One of those decisions was taking her to Taylor Swift concerts. In March, when she turned 22, she didn't wince or tell me to turn it off when I blasted the song "22" and sang a bit too loudly. I think she may have even smiled at me.

Maybe Taylor Swift will continue to be part of our journey. Maybe she won't. But when Swift's latest album dropped, I did get a text from my daughter asking me what I thought of it. That's not nothing.

Read the original article on Business Insider


from Business Insider https://ift.tt/TyE8VIP

Monday, 26 August 2024

Internal Amazon sales guidelines spread doubt about OpenAI capabilities, while bad-mouthing Microsoft and Google

AWS, OpenAI and Microsoft logo.
  • The guidelines show AWS wants to address customer questions about OpenAI, Microsoft, and Google.
  • AWS salespeople are instructed to question OpenAI's security and customer support in pitches.
  • AWS highlights its AI infrastructure, enterprise security, and cost efficiency over rivals.

OpenAI lacks advanced security and customer support. It's just a research company, not an established cloud provider. The ChatGPT-maker is not focused enough on corporate customers.

These are just some of the talking points Amazon Web Services' salespeople are told to follow when dealing with customers using, or close to buying, OpenAI's products, according to internal sales guidelines obtained by Business Insider.

Other talking points from the documents include OpenAI's lack of access to third-party AI models and weak enterprise-level contracts. AWS salespeople should dispel the hype around AI chatbots like ChatGPT, and steer the conversation toward AWS's strength of running the cloud infrastructure behind popular AI services, the guidelines added.

"For generative AI workloads, AWS will compete most often w/ Microsoft's Azure OpenAI Service, OpenAI (directly), and Google Cloud's Generative AI on Vertex AI," one of the documents stated. "Move beyond the hype with AI chatbots, and focus on the [Foundation Models] that power them and the cloud infrastructure needed to help enterprise customers safely create, integrate, deploy, and manage their own generative AI applications using their own data."

The guideline documents are from late 2023 through to spring 2024. They reflect Amazon's urgency to aggressively counter the growth of AI rivals, especially OpenAI. The viral success of ChatGPT put OpenAI at the forefront of the AI pack, even though Amazon has been working on this technology for years.

The effort to criticize OpenAI is also unusual for Amazon, which often says it's so customer-obsessed that it pays little attention to competitors.

This is the latest sign that suggests Amazon knows it has work to do to catch up in the AI race. OpenAI, Microsoft, and Google have taken an early lead and could become the main platforms where developers build new AI products and tools.

Though Amazon created a new AGI team last year, the company's existing AI models are considered less powerful than those made by its biggest competitors. Instead, Amazon has prioritized selling AI tools like Bedrock, which gives customers access to third-party AI models. AWS also offers cloud access to in-house AI chips that compete with Nvidia GPUs, with mixed results so far.

AI growth

Amazon's spokesperson told BI that AWS is the "leader in cloud" with projected revenue of more than $100 billion this year. Much of the growth has come from its new AI services, which are on pace to generate "multi-billion dollars" in revenue this year, the spokesperson added. AWS has announced more than twice the number of AI features than the next 3 closest competitors combined since 2023, the spokesperson noted.

"It's still early days for generative AI, and with so many companies offering varied services, we work to equip our sales teammates with the information they need to help customers understand why AWS is the best, easiest, most performant place to build generative AI applications. To parse the language as anything more than that or mischaracterize our leadership position is misguided speculation," the spokesperson wrote in an email.

OpenAI's spokesperson declined to comment.

Sam Altman presenting onstage with the OpenAI logo behind him.
OpenAI CEO Sam Altman.

'Important moment'

The documents appear to acknowledge that Amazon is playing catch-up to OpenAI. Many AWS customers got started on AI projects with OpenAI technology, like ChatGPT and its GPT models, because of the startup's "timing in the market, ease of use, and overall model intelligence capabilities," Amazon explained in one of the guidelines.

But now is a good time to go after those customers to convert them to AWS services, particularly Bedrock, a tool that has partnerships with AI model providers including Anthropic, Meta, and Cohere, the document said. It also claimed that Anthropic's Claude model, in particular, had surpassed OpenAI's GPT models in terms of "intelligence, accuracy, speed, and cost."

The customers most likely to migrate to AWS are the ones who are already "All In" on AWS for the majority of their cloud-computing needs, but "who chose to evaluate OpenAI for their first generative AI workloads," it added.

"This is an important moment for the field to take action on," one of the documents said. "Amazon, in partnership with various foundation model providers, has now created a stronger value proposition for customers that should not only inspire them to migrate their generative AI workloads onto AWS, but also, choose AWS for their next GenAI projects."

Switching to AWS

Some of those efforts are starting to pay off, according to Amazon's spokesperson. They cited 4 AWS customers — HUDstats, Arcanum AI, Forcura, and Experian — that initially used OpenAI's products, but switched to AWS's AI services after facing "limitations with flexibility and scalability."

"In Q2 2024, AWS had its biggest quarter over quarter increase in revenue since Q2 2022, and much of this growth is being fueled by customer adoption of generative AI," Amazon's spokesperson said. "Ultimately, customers are choosing AWS because we continue to be the significant leader in operational excellence, security, reliability, and the overall breadth and depth of our services."

Microsoft and Google

It's not just OpenAI that AWS is going after. The sales guidelines also share how AWS sales reps should respond to customer questions about Microsoft and Google.

satya standing
Microsoft CEO Satya Nadella

If a customer talks about Microsoft and Google's AI infrastructure and chips, AWS salespeople should say Amazon has more than 5 years of experience investing in its own silicon processors, including its AI chips, Trainium and Inferentia, the documents advised.

The guidelines also highlight AWS's better cost and energy efficiency compared to competing products, and note the limited availability of Microsoft's Maia AI chip. One of the guidelines also points out Google's limitations in the number of foundation models offered.

"We're flattered they're worried about us, but fiction doesn't become fact just because it's in talking points," Google spokesperson Atle Erlingsson told BI. "Not only do we offer more than 150 first, third and open-source models via Vertex AI, our AI infrastructure offers best overall performance, best cost performance, as well as uptime and security."

Microsoft's spokesperson declined to comment.

"Cut through the hype"

For customers who say Microsoft and OpenAI are at the "cutting edge" of generative AI, AWS wants its salespeople to "cut through the hype," and ensure customers understand how AWS has solutions "across the entire stack" of generative AI technology, from the bottom infrastructure to the AI applications used by end customers, it said.

In situations where Microsoft pitches its AI-powered analytics software Fabric to customers, AWS salespeople are instructed to say, "Microsoft Fabric is a new (unproven) offering." It says Fabric doesn't offer many integration points with Azure's Generative AI services, and AWS's own analytics services "offer superior functionality" across diverse workloads.

Microsoft previously said 67% of Fortune 500 companies use Fabric.

'Misleading FUD'

The documents also share AWS "value propositions" that should be emphasized during sales pitches. They include AWS's ease of use, including "enterprise-grade security and privacy," and the ability to customize AI models using the customer's own data. It also stresses AWS's price efficiency and broad set of AI chips offered, as well as its own AI-powered applications, like Amazon Q.

Customers typically consider the following 9 criteria before choosing an AI model and service provider, one of the documents said. They are customization; personalization; accuracy; security; monitoring; cost; ease of use; responsible AI; and innovation.

Despite the competitive tone of the guidelines, AWS also tells salespeople to use caution and clarity when discussing what data its rivals use for model training. OpenAI, for example, publicly said that it may use customer data to train the consumer version of ChatGPT, but not the business data shared through its enterprise product.

"The APIs and the Enterprise chatbots from Microsoft, Google, and OpenAI all declare product terms specifying that customer data is not used for model training," one of the documents said. "Be careful to not use misleading FUD (Fear, Uncertainty, Doubt) by conflating competitors' enterprise solutions with consumer services."

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email (ekim@businessinsider.com). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

Read the original article on Business Insider


from Business Insider https://ift.tt/D69JuOQ

A risky corner of the ETF market has boomed this year as YOLO traders chase the rally

A fund that tracks Nvidia stock is one of the most popular leveraged ETFs. Slaven Vlasic/Getty Images for The New York Times; Chelsea Jia F...