OpenAI’s Sam Altman denies exec exits linked to restructure

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

---

1.

OpenAI rejig: OpenAI CEO Sam Altman denied the departure of three senior executives had any link to the company's planned restructuring, telling a conference in Italy the personnel changes were unrelated. Chief technology officer Mira Murati and two senior research executives Barret Zoph and Bob McGrew announced their departures on Wednesday (Thursday Sydney time), the same day Reuters reported the ChatGPT maker was working on a plan to restructure its core business into a for-profit benefit corporation no longer controlled by its non-profit board. Speaking at the Italian Tech Week conference on Thursday, Altman addressed the report, saying "some stuff" reported around the executives' departures was inaccurate. "A lot of the stuff I saw was also just totally wrong, but we have been thinking about that (restructuring), our board has, for almost a year, independently, as we think about what it takes to get to our next stage," he said. The restructuring plans are still under negotiation, with no confirmed timeline for completion, Reuters reported. (Reuters)

2.

All in: Chinese leaders pledged “necessary fiscal spending” to meet the country’s 5% growth target, raising expectations for fresh stimulus on top of recent measures. The 24-member Politburo vowed to stabilise the property sector and support fiscal spending to counter the slowdown in the world’s second-largest economy. Authorities also promised “strong” interest rate cuts, targeted aid for low-income groups and increased bond issuances for investment. Coming just two days after the central bank unveiled its surprise stimulus package, the Politburo’s statement is seen as a shift toward a more coordinated and aggressive stimulus strategy to prevent further economic decline, even if it didn’t provide details. Reuters reported plans for a 2 trillion yuan ($410 billion) special sovereign bond issue to boost consumption and address local government debt, while Bloomberg said China may inject up to 1 trillion yuan into its major state banks to bolster economic support, primarily by issuing new special sovereign bonds. (Capital Brief)

3.

NYC scandal: New York City Mayor Eric Adams was indicted on five federal charges accusing him of bribery, wire fraud and soliciting illegal foreign donations, which he claims he did not commit. The unsealed indictment, led by Damian Williams, US attorney for the Southern District of New York, alleges Adams accepted luxury travel and gifts valued at over USD100,000 ($145,160) from wealthy businesspeople and at least one Turkish government official. In return, Adams is accused of providing favourable treatment, including pressuring the Fire Department to approve a Turkish consulate. Adams, defiant and surrounded by supporters at a press conference that was interrupted by protesters demanding his resignation, insisted he's innocent and said he would not resign, urging the public to hear his defence. Governor Kathy Hochul, who has the power to remove Adams, said she was reviewing the situation, but CNN reported she is not considering removing him. Adams could also be removed through an “inability committee,” according to the City Charter. (Capital Brief)

4.

Nuclear plunge: China's newest nuclear-powered attack submarine sank at a shipyard near Wuhan in late May or early June, in a blow to China's efforts to expand its navy, The Wall Street Journal reported citing US officials. The vessel, known as the Zhou-class, was the first of its kind with a distinct X-shaped stern. After sinking, large floating cranes arrived to salvage it from the Yangtze River bed, the paper said. China State Shipbuilding, a state-owned entity, built the sub, which was undergoing final equipping in May. Beijing has not publicly acknowledged the incident, and it’s unclear if the sub carried nuclear fuel, but experts said it was likely. US officials also do not know if any personnel were killed. “The sinking of a new nuclear sub that was produced at a new yard will slow China’s plans to grow its nuclear submarine fleet,” Brent Sadler, a research and retired US Navy nuclear submarine officer, told the paper. “This is significant.” (WSJ)

5.

Chip upgrade: Micron Technology shares surged almost 20% after its first-quarter revenue forecast exceeded Wall Street expectations, signalling robust demand and pricing for high-bandwidth memory (HBM) chips, crucial for generative AI technology. After the close on Wednesday, the company reported its best quarterly revenue growth in a decade, adding over USD14 billion ($20.29 billion) to its market capitalisation. The bullish outlook allayed fears over weakening HBM pricing due to rising supply, which had impacted Micron’s stock. The company’s adjusted gross margin reached 36.5% in Q4 and expects that to reach 39.5% in Q1 of 2025. Micron’s intraday surge was the biggest in 13 years, pushing other chip firms like Nvidia, Intel and Qualcomm higher initially. All pared gains after the WSJ reported the DOJ is probing Super Micro Computer, a major chip customer. (Reuters)

6.

Macro bounce: The US economy grew more strongly than estimated in recent years, with consumer spending driving much of the gains, according to revised data in an annual update from the Bureau of Economic Analysis. Second-quarter GDP increased at a previously estimated annualised 3% rate, while first-quarter growth was revised upwards to 1.6%, up from 1.4%. Revised data showed GDP expanded 5.2% from Q2 2020 through Q1 2024, up from 4.9%. Gross domestic income (GDI), an alternative measure of economic growth, surged to 3.4% in Q2 from an earlier estimate of 1.3%, narrowing the gap with the more traditional GDP gauge. The annual update included revisions covering 2019 through Q1 2024, showing the US economy rebounded more strongly from the pandemic than previously thought. (Capital Brief)

7.

Layoff calm: US jobless claims in the week ended 21 September fell unexpectedly to a seasonally adjusted 218,000, hitting a four-month low. The 4,000 decline from the already lower-than-expected previous week number was also far from forecasts by Bloomberg and Reuters surveys of economists, which projected between 223,000–225,000 claims. Continuing claims rose by 13,000 to 1.83 million, the Labor Department data showed. Despite slower hiring and an uptick in the unemployment rate to 4.2% in August, layoffs have remained subdued. However, various large companies have recently announced or implemented plans to scale back their workforces. Boeing's ongoing machinist strike has resulted in furloughs, while layoffs at firms like Paramount Global, General Motors and others could push claims up in the weeks ahead. (Capital Brief)

8.

US-Israel package: Israel secured an USD8.7 billion ($12.61 billion) US aid package, including USD3.5 billion for wartime procurement and USD5.2 billion for air defence systems like Iron Dome, David's Sling and an advanced laser. The deal underlines the strong US-Israel partnership amid security threats from Iran-backed military group Hezbollah and Hamas. Meanwhile, Israel rejected global and US-backed calls for a ceasefire with Hezbollah, ignoring its biggest ally and continuing airstrikes in Lebanon that have killed hundreds. A top air force Hezbollah commander was killed in one strike on Thursday. Prime Minister Benjamin Netanyahu arrived in New York for the UN General Assembly while the military is preparing for potential ground operations, targeting arms transfers from Iran and aiming to return 70,000 evacuated citizens to their homes. The US, France, Australia and others are still pushing for a 21-day ceasefire, warning of the risk of all-out war. (Reuters)(Time)