OpenAI science chief's breakaway company raises $1.5b

Good morning. Here's what happened overnight and what you need to know today.

1.

Sutskever’s AI: Superintelligence (SSI), co-founded by OpenAI’s former chief scientist Ilya Sutskever, has raised USD1 billion ($1.49 billion) to develop advanced AI beyond human limits but aligned with human values. Sutskever left OpenAI in May after the controversial firing and re-hiring of Sam Altman, and co-founded SSI in June alongside Daniel Gross, who formerly led AI projects at Apple, and Daniel Levy, a former OpenAI researcher. The firm is already valued at around USD5 billion, Reuters said, citing unnamed sources. Investors participating in the founding round included Andreessen Horowitz, Sequoia Capital, DST Global, SV Angel and NFDG, an investment partnership run by former GitHub CEO Nat Friedman and Gross, SSI said on its website. (Capital Brief)

2.

Cyber grip: Draft cybersecurity laws have landed on Home Affairs Minister Tony Burke’s desk, with the government likely to tweak proposed powers over critical infrastructure, Capital Brief reported citing sources. Developed by the Department of Home Affairs, the laws focus on updating the Security of Critical Infrastructure Act 2018 (SOCI) and introducing a Cyber Security Act. The SOCI draft is expected to face further revisions, particularly to the contentious consequence management powers, which would give federal authorities the power to force operators of critical infrastructure to comply with their directions after a cyberattack. The Cyber Security Act would require businesses to disclose ransomware payments or face penalties. The bill’s progress had slowed under Burke’s leadership after a cabinet reshuffle, with opposition members warning that time is running out to pass it before the next election. (Capital Brief)

3.

Elon’s U-Turn: Starlink has backtracked on its initial refusal to comply with an order from Brazil’s Supreme Court, now agreeing to block X, Elon Musk's social media platform, after the court froze its assets. The legal action stems from fines imposed on X for hosting accounts accused of spreading hate speech. Starlink, which serves about 250,000 customers in Brazil, including in remote areas, notified the regulator over the weekend it would ignore the orders until its bank accounts were unfrozen. But late on Tuesday the company reversed its stance, citing the need to protect its customers while continuing to challenge the ruling. SpaceX has also reportedly evacuated non-Brazilian employees from the country and advised against travelling there. (WSJ)(Reuters)

4.

Hiring slump: The US Bureau of Labur Statistics said job openings dropped to a 3.5-year low in July, falling to a lower than expected 7.673 million from a revised 7.91 million in June and signalling a labour market slowdown. Economists polled by Reuters had expected 8.1 million job openings. The JOLTS report also showed layoffs rose to 1.762 million, the highest since March 2023, and the quits rate edged up to 2.1%. Job hires increased slightly to 5.521 million. The numbers coincide with recent data showing the labour market is softening amid a slowdown in activity, reviving fears of a potential recession. It also fuelled speculation about the size of the Federal Reserve's rate cut at its September meeting, as traders raised bets on a steep cut and Treasury yields fell. (Capital Brief)(BLS)

5.

EV stall: Volvo Cars scrapped its goal to sell only electric vehicles (EVs) by 2030, citing a slowdown in global EV demand due to concerns about costs and charging infrastructure. The Swedish automaker, majority-owned by China's Geely, now plans for plug-in hybrids and battery-only vehicles to make up 90-100% of sales by 2030, with mild hybrids accounting for up to 10%. The shift follows a decline in sales, particularly in Europe, where countries like Germany have cut EV subsidies. Volvo’s shares fell on the news. “It is clear that the transition to electrification will not be linear, and customers and markets are moving at different speeds of adoption,” CEO Jim Rowan said. “We are pragmatic and flexible… (and) we are resolute in our belief that our future is electric.” (Volvo)(Capital Brief)

6.

India workaround: Russia has been acquiring sensitive goods like electronics and server equipment in India using rupee reserves from oil sales to bypass western sanctions, The Financial Times reported citing Russian state correspondence. Moscow's trade ministry targeted dual-use technologies, essential for its defence industry through Indian intermediaries, the paper said. Russian officials planned to spend approximately USD1 billion ($1.49 billion) on securing these components in 2022 through channels hidden from western governments, working with entities connected to the Russian security services, the report said. That came despite Modi’s growing ties with the US. (The Financial Times)

7.

Trudeau disbanded: Canadian Prime Minister Justin Trudeau’s minority Liberal government suffered an unexpected blow as key ally Jagmeet Singh, leader of the New Democratic Party (NDP), withdrew his support. Singh’s small party was helping keep Trudeau in power. But on Wednesday he pulled out of the 2022 power-sharing deal – initially set to last until June 2025 – criticising Trudeau for failing to stand up for the middle class and accusing the Liberals of being too weak to stop Conservative leader Pierre Poilievre. Without the NDP’s backing, Trudeau will need to negotiate with opposition parties on a case-by-case basis to avoid triggering an early election over a possible confidence vote. It comes as recent polls show the Liberals trailing the Conservatives by 15 to 20 points, according to Bloomberg. (Bloomberg)(Reuters)

8.

Frontier in play: Verizon is in advanced talks to acquire Frontier Communications and strengthen its fibre network amidst growing competition from AT&T and cable-TV providers, The Wall Street Journal reported, citing sources. The deal, which the sources said could be announced this week if no last-minute hurdles emerge, would likely exceed Frontier’s USD7 billion ($10.41 billion) market value before the potential deal was reported. Frontier shares rose 37.95% following the reports. Verizon is facing slowing wireless growth and has been expanding its home internet services. Frontier filed for Chapter 11 bankruptcy in 2020 and has since restructured to focus on fibre upgrades. It comes as Frontier’s private-equity backers Ares and Cerberus are pushing for a strategic review. (WSJ)