It also comes just 5 days after the company agreed to pay $54 million to settle a massive employment discrimination and equal pay lawsuit filed by the state of California.

In a memo to employees, Phil Spencer, head of Microsoft’s video game division that oversees Activision Blizzard, said, “I’d like to thank Bobby—for his invaluable contributions to this industry, his partnership in closing the Activision Blizzard acquisition and his collaboration following the close—and I wish him and his family the very best in his next chapter.”

Spencer also said the company’s leadership will largerly remain in place. In a seperate letter to employees, Kotick praised Spencer and wrote nostalgically about his history with the company.

Kotick first joined Activision as CEO in 1991, and remained in the role after the company merged with Vivendi, parent company of, among other things, “World of Warcraft” maker Blizzard, to form Activision Blizzard in 2008.

At the time of the merger, Activision was already the leader in first person shooter games thanks to the “Call of Duty” series, and also counted the “Guitar Hero” franchise among its other huge hits. Blizzard meanwhile dominated online gaming with “Warcraft” and also launched the popular “Diablo” and “Starcraft” franchises, and that’s in addition to Vivendi’s roster of other successful video game publishers.

The combined company was by 2018 the most successful video game conglomerate in the U.S. and Europe.

But in the California lawsuit, filed in July 2021, Activision Blizzard was likened to a “Frat House.” Among other things, the lawsuit revealed a corporate environment rife with sexual harassment, gender discrimination and accusations of sexual assault going back years.

Activision Blizzard initially deflected, calling the claims “distorted, and in many cases false,” and it insisted that all such incidents happened in “Blizzard’s past.” Following internal uproar and heavy public criticism, Kotick later apologized for what he said was the company’s “tone Deaf” response and vowed to review how the company handled such complaints.

But in November of that year, the Wall Street Journal reported that Kotick had known about these problems for years but had hidden much of it from the company’s board of directors — including multiple women who reported being raped.

Despite this, the company’s board stood by him. This resulted in a shareholder revolt in early 2022, as investors defied the board and ordered the company to issue an annual report on sexual misconduct and make that report public. Nevertheless, Kotick remained in his position, leading the company through its acquisition by Microsoft.

Activision Blizzard finally reached a $54 million settlement with the state of California just 5 days ago, on Dec. 15.

The post Embattled Activision Blizzard CEO Bobby Kotick to Resign Dec. 29 appeared first on TheWrap.

Prediction #1: AI is the headline story, and nothing else comes close

Talk of AI will continue to dominate, as it should given the immense transformation we will see AI take in our industry from this point forward. AI is poised to disrupt lives across the creative community – which means disruption to the meaning of art itself. 

Expect a sobering breakthrough on the path to artificial general intelligence (AGI). There’s a reason why OpenAI’s cautious board members ousted CEO Sam Altman, only to have him returned by the company’s “no holds barred” VC investors. And once AGI gets real, it will upend our entire media and creative ecosystem, not to mention all of our systems period.

Until then, artists and creators will begin to experiment with generative AI in earnest. So will the major studios and streamers, and you can bet that SAG-AFTRA and the WGA will be watching. Few traditional motion picture and television industry jobs will be lost at the artificial hands of AI in 2024, but that will begin to change in the years ahead, even as new AI-born jobs arise.

Look to media-focused companies like Flawless to begin enabling AI-dubbing, which will mitigate the need for subtitling to reach global audiences. At the same time, AI-enabled pre-visualization will become a “thing” in its early stages. And 2024 will be the first full year we will see how consumers respond to AI-infused creative works both their dollars and emotions. Will those works “connect” at a human level?

Big Tech companies, meanwhile, will do their best to skirt any limitations on their AI development and AI’s power. Alphabet (the company formerly known as Google) will promote its new “nice” sounding SynthID system and claim to be a “white knight” for enabling automatic detection of copyrighted works used to train AI systems. But, at the same time, Google and others will look to invest in companies like Character.AI which enables users to create chatbots that impersonate humans like musician Billie Eilish, with or without either license or consent (the company indicates it is up to users to do what is needed).

AI-powered music will increasingly flood our streaming world. Skeptical of Google and other Big Tech players, expect the major labels to turn to new “forensic AI” companies to both track AI fingerprints and enable new ways to pay the artists whose works and identities have been stolen.

Prediction #2: AI regulation is coming to the U.S. (it’s already in the EU)

Congress and regulators will do their best to control AI’s otherwise unbridled rise by developing guardrails to promote transparency, identify content provenance, and protect against the theft of names, images, voices and likenesses for profit, some of which will be necessary and sensible – but several that may not be. Once again, as in the case of social media, they will follow the EU, which just recently passed sweeping groundbreaking measures to regulate AI. The push for a national “right of publicity” will gain steam. 

Ultimately, dollars will decide how this all plays out, since no copyright and content exclusivity (the ability to monetize) come from AI-only generated works, and no one knows how consumers will react to creative works that are increasingly “synthetic.” Copyright remains the most powerful guardrail bar none. Dollars matter and the profit motive is strong, young Skywalker.

As I wrote in my last column, expect the courts to flesh out this fundamental copyright guardrail with critical AI-focused rulings on the issue of what constitutes copyright infringement both on the “input” training and “output” sides of the equation. We can already read the tea leaves of where it’s all heading based on early decisions. Judges have ruled that even full-scale copying of massive numbers of copyrighted works can be acceptable transformative “fair uses.” 

Prediction #3: TikTok encroaches on Netflix’s turf, as streamers continue content belt-tightening

Our collective obsession with TikTok will only deepen, even as Congress continues to threaten to pull the plug. The courts will strike down Montana-like “shut-it-all-down” laws, and younger voters will rebel against any serious “teeth.” The social media platform’s increasing dominance of our attention, not to mention its increasing focus on longer form content, will also begin to eat into our “Netflix and chill” time, and the streaming giant will begin to feel the pain.

Meanwhile, streaming content budgets will continue to fall back to Earth due to basic business realities of costs outpacing revenues. Expect all major streamers including Netflix to do more with less content. Gone are the days of continuous billion-dollar content budget increases. 

Call it the “Barbie Effect,” as all major streamers smartly focus more on evergreen, ever-reprogrammable franchise content. Disney is the gold standard here with its Marvel, Pixar, Star Wars and Disney Princesses brands. But tech-first streamers like Netflix will also begin to quietly experiment with AI to further cut costs and generate new content with better economics.

So-called FAST channels (free ad supported television) will continue their surprising assault on paid subscriptions, especially internationally — critical territories for U.S. SVOD expansion. Remember, 40% of the world’s 8 billion population is still offline, most of whom are economically challenged mobile-first eyeballs to capture.

Prediction #4: Social media’s influence and Musk’s madness accelerate

Speaking of TikTok’s and social media’s increasing hold on our attention, Elon Musk will continue to drive X/Twitter’s downward spiral as advertisers continue their mass exodus and billions are shed from the company’s valuation. Musk will turn to his far out, far-right friends to fill his emotional and financial void and excoriate detractors in the name of “free speech.” Unfortunately, we won’t be able to escape how his basest instincts play out, especially in this election year. 

That will be no laughing matter, as the world begins to realize how much power one brilliant, yet increasingly off-kilter man, holds over all of us on this planet, including in the world of global defense communications where Musk can decide when and where to turn on and off his Starlink satellite system.

Prediction #5: A “deep-fake” election year where cable news relevance continues to wane

AI-supercharged social media will fuel divisive flames at a level never before seen. Watch for “deep fakes” and serious danger to democracy around every corner. Being a Presidential election year, 2024 means that politicians will preen, posture and play to their respective bases as pundits pontificate. That means there will be a never-ending stream of it all by a less-disciplined media that is pressed for profits as we watch more TikTok and less cable for our news. 

The resulting mud that is slung will be increasingly dirty, and generative AI will be the shiny new toy used by the most ruthless and unhinged conspiracy fueled campaigns and influencers. 

Prediction #6: The M&A fuse will be lit and spark more consolidation

Not all change in 2024 will be divisive, of course. After a relative pause in 2023, and due to continuing tech-driven headwinds, Hollywood pairing via M&A will reignite in 2024. Disney has openly teased its dealmaking appetite during this past year. Now real deals dipped in cheese will follow as the magic kingdom tries to reclaim its spot as the happiest place on Wall Street amongst other major traditional media companies. Disney will buy out Comcast’s remaining 33% stake in Hulu for more than $8 billion and pay that bill by spinning out its linear channels. Meanwhile, former CNN topper Jeff Zucker will resurface to buy and reimagine the U.K.’s right-leaning The Telegraph.

For their part, Big Tech behemoths will continue to eye increasingly vulnerable traditional media players a la Amazon buying MGM. Paramount, Warner Bros. Discovery and Comcast’s NBCUniversal are all in their lines of sight. Those storied studios give these Silicon Valley-infused streamers the franchise content they covet to capture and retain our attention to drive sales of their underlying core products. Content becomes marketing first and foremost.

Prediction #7: Zuckerberg trades his metaverse dreams for AI

Mark Zuckerberg, Big Tech’s “Dr. Evil” before Musk, continues his rehabilitation tour both for himself and his company Meta by continuing to jettison the billions he previously spent on his metaverse dreams and redeploy them on AI (notice a theme here?). And for the most part, we all let him off the hook because our focus is now on other more pressing matters.

In fact, talk of the metaverse — which dominated Big Tech discussions just one year ago pre-ChatGPT — now finds itself constrained to the smallest conference rooms across the entertainment industry. As a result, Apple’s VR headset, launched earlier this year, will continue to serve as a niche product asterisk in 2024. That doesn’t mean it doesn’t have power. It simply means that a mass-market appetite doesn’t yet exist and won’t for quite some time.

Prediction #8: Live “immersive” experiences will grow in numbers and importance

Although immersive tech in the form of VR headsets finds itself largely relegated to the back burner for now, that doesn’t mean that immersive tech and experiences are not powerful. In fact, tech-enhanced live, experiential entertainment in all of its forms — concerts, festivals, sporting events — will continue to both expand and attract. In fact, such experiences will be increasingly important to escape the surrounding “noise” and connect with our families and friends in the real world to create shared, joyful, lasting experiences and memories.

Just look at what Taylor Swift and the MSG Sphere in Las Vegas did this year. Taylor’s tour generated more money than the economies of several countries (it’s the first to gross over $1 billion), while the Sphere re-imagined what out-of-home entertainment can look, sound and feel like. Bob Iger and Disney’s plans to dramatically increase investment in their theme parks are a smart and savvy sign of the times.

Prediction #9: Gaming will outpace other entertainment, as music keeps growing

Through it all, the nearly $300 billion gaming industry — which is expected to more than double to $650 billion by 2030 — will continue to obsess us as it massively outpaces the rest of the media and entertainment industry. The appellate courts will uphold Google’s game-changing loss in court to Epic Games regarding the excessive toll it takes for purchases in its Play Store (the equivalent to Apple’s App Store). Google will be forced to significantly cut its “take,” and game developers will cheer the significant extra money in their pockets. Ultimately, Apple will follow suit (one way or another).

For its part, the music industry will continue to lift our spirits no matter what the world throws at us. That means TikTok first and foremost, of course (see above). It also means that Spotify will both continue its impressive growth and its search for elusive profitability. Hence its recent mega-layoffs. Music catalog sales will soar despite the current Hipgnosis meltdown (a cautionary tale) since we listen to music in good times and in bad, as reflected in Goldman Sachs’s most recent music industry report which, once again, revised its global music industry numbers upward to about $50 billion by 2030.

Prediction #10: Web3 will be down but not completely out

Web3 in all of its forms – including so-called digital tokens or digital tickets – will continue to hold promise for creating direct lines of communication, shared value and monetization between creators and their audiences. These are worthy goals for a younger generation intent on creating new opportunities and new rules of the game.

But that promise will be lost for now amidst the rest of the industry noise, not to mention continuing skepticism by the older crowd of blockchain-based tech in general. FTX CEO Sam Bankman-Fried’s conviction for wire fraud, conspiracy and money laundering  is still too fresh and Web3 is guilty by association, even if digital tokens have no real relation to him and crypto-currency in the first place.

Daunting forces await in 2024, but so do transformational and exciting new opportunities. It’s the unanticipated and unexpected twists and turns that frequently change our lives more than anything else. Case in point: the launch of ChatGPT just over one year ago. No one anticipated generative AI’s commercial launch and cataclysmic global impact prior to Nov. 30, 2022 — and look at us now. 

The trick is to be stoic about it all and take fearless action to control what you can as we usher in the new year — all with a sense of hope, possibility and a willingness to pass a meaningful part of the torch to fresh young talent with constructive and creative new ideas and ideals.

Cheers to 2024 — and to a bold, inspired, kind, generous, joyful and positive new year! 

For those of you interested in learning more, visit Peter’s firm Creative Media at creativemedia.biz and follow him on Twitter @pcsathy.

The post 10 Predictions for Media, Entertainment and Tech in 2024 appeared first on TheWrap.

After ceding much of the early generative AI boom to Nvidia, these competitors are releasing — and proving the value of — chips that can run large language models in a similar fashion. Tech giants like Alphabet, Amazon, and Microsoft are designing their own AI chips and training models on them. Rival chipmakers like AMD and Intel are producing AI-optimized chips themselves. And amid a supply crunch, startups are willing to try alternatives. Now, after a recent spate of releases, Nvidia’s easy times are ending.

“It’s the law of competition,” David Trainer, CEO of research firm New Constructs, told me. “People are going after this space because there’s an enormous amount of money to be made in it.”

First among Nvidia’s challengers are fellow trillion-dollar companies Amazon, Google, and Microsoft. It went largely unnoticed last week, but Google’s announcement of its Gemini AI model left Nvidia out entirely. Google trained Gemini on its own chips, called Tensor Processor Units, or TPUs, not Nvidia’s H100s, leaving industry insiders buzzing. 

While virtually no one in the industry thinks Nvidia will lose its advantage overnight, the narrative that AI can’t function without it is coming apart.

By developing their own chips, these tech giants — who are also major Nvidia customers and partners — get more customization, better supply access, custom chips built for their use cases, and some cost relief. That’s why Amazon, Google, and Microsoft are on record about using or building alternatives. And why OpenAI, a key Nvidia customer, is reportedly exploring its own chips as well.

“They’re seeking to reduce costs internally,” Insider analyst Jacob Bourne told me. “That puts pressure on Nvidia to keep providing the best hardware, but also to potentially lower the costs.” 

The tech giants also offer AI services through their cloud divisions, and they can sell training, inference, and other AI services on their own chips, even as they partner with Nvidia. Google’s already made its TPUs available for customer use. Microsoft will use its chips underneath its AI subscription service. And Amazon has announced that Anthropic, the AI research lab it invested more than $1 billion in, will use its chips through AWS. “They’re public cloud providers,” said Bourne. “They have an extensive data center footprint, and extensive data center infrastructure. They could potentially rely more on their own hardware.” 

Meanwhile, professional chipmakers, including Intel and AMD, are also jumping in. They see that demand for AI chips can sometimes surpass Nvidia’s ability to deliver them, and view the high cost of H100s as an opportunity to undercut their rival.

On Thursday, Intel announced a new chip, called Gaudi3, which competes with Nvidia’s H100. Intel CEO Pat Gelsinger told me that he’s looking to capitalize on the moment in an interview on Big Technology Podcast this week.  “Customers are looking for alternatives,” Gelsinger said. “All of a sudden, customers are saying, huh, they’re showing up winning some of the benchmarks, I want an alternative, and Nvidia’s short on supply. And I’m getting a much better total cost of ownership from Intel. Hey, let’s go start testing this.”

Last week, AMD introduced new MI300 chips that are purpose-built for AI training and inference. The chips, said Insider’s Bourne, can be swapped with Nvidia’s chips without too much disruption to AI operations. After AMD’s announcement, Nvidia shot back with a blog post claiming its chips were twice as fast. That may be true, but it showed its rival had caught its attention. 

Even with growing competition, Nvidia isn’t likely to fade anytime soon. It has a multi-year lead on research and development after its focus on gaming — which requires similar computing — proved extremely fortunate. Its GPU chips are still more powerful for AI training than its rivals’ accelerators. It’s building more chips than its competitors. And startup founders like that Nvidia’s software allows them to train and run AI models more easily. 

“At least next year, Nvidia is going to maintain very strong AI market share,” Tristan Gerra, a senior research analyst at Baird, told me. “We’re looking 81, 82% market share in AI this year, going to 78% next year, so that’s pretty minimal decline.”

Still, over time, Nvidia won’t have the AI chip industry to itself. And as the industry moves to smaller AI models, which require less computing power, that may accelerate the shift. The company will still be a fact of life — and the likely leader — in AI chips for years. But it’ll have to work harder for every customer and dollar now that its competitors have arrived in force.

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“Today, the board of directors of The Arena Group Holdings, Inc. (NYSE American: AREN) met and took actions to improve the operational efficiency and revenue of the company,” a statement from the publisher read. “The board terminated the employment of CEO Ross Levinsohn, and named Manoj Bhargava as interim Chief Executive Officer, both effective today.”

In a statement posted to LinkedIn on Monday, Levinsohn wrote, “After 4 1/2 years, today is my last day at The Arena Group.” He did not address the AI scandal, but stated that “the company is positioned well for the future.”

Bhargava owns a majority stake in the Arena Group. The company also fired three top executives last week: COO Andrew Kraft, media president Rob Barrett and corporate counsel Julie Fenster.

Kraft joined the company in 2018 as chief revenue officer. Barrett, a veteran of Hearst Newspapers and Yahoo News, was named Arena Group president in 2021. According to the company’s still-online bio of Fenster, she had been with the group since January 2022.

The company claimed the reports and fake profiles of the “writers” associated with them were licensed content from a third party company called AdVon Commerce, who had reassured them that the authors were humans.

Three weeks ago, Levinsohn was touting The Arena Group’s “strong” third quarter on LinkedIn. Per The company’s financial site, The Street, its year-over-year revenue growth was up 11% and it had lowered operating expenses by 4%.

Prior to becoming CEO of The Arena Group, Levinsohn held senior roles at Yahoo, Fox Interactive and Tribune Publishing.

He also served as publisher of the Los Angeles Times for five months in 2018. He stepped down after NPR reported that he had been hit with two sexual harassment lawsuits for his “frat-boy” behavior. An investigation by Tribune Publishing Company, then known as “Tronc,” cleared Levinsohn of wrongdoing at the time.

Levinsohn became the CEO of Sports Illustrated in October 2019 and CEO of The Arena Group in August 2020.

The use of AI in media has been a hot button issue for several publishers, with several, including News Corp., which owns and operates the New York Post and The Wall Street Journal, embracing the seemingly inevitable technology.

Gizmodo ran an AI-generated “Star Wars” list in July that was riddled with errors. Deputy editor James Whitbrook, who said he was only notified of the article 10 minutes before it was published, blasted it as “f—king dogs—t.”

The Arena Group also owns Parade and Men’s Journal and is in the process of combining with Bridge Media Networks.

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In a viral video demonstrating Gemini’s capabilities, Google took significant artistic license. It showed a user speaking with Gemini, but it was actually representing a text conversation. It showed a moving video, but was feeding Gemini still images. It showed fast responses, but sped those up. It showed tight model outputs, but shortened them “for brevity.” It showed brief prompts eliciting terrific answers, but listed longer prompts in a blog post.

Exaggerating in tech demos isn’t novel, but Google’s Gemini video felt different. As it circulated among developers and industry watchers this week, the sentiment was near universal: Google, whose research made the generative AI era possible, was pressing.

“It’s a little bit shocking that Google, the undisputed pioneer in generative AI, would feel it necessary to juice the results of their demo just to try and one up Microsoft/OpenAI,” said Malcolm Ethridge, an executive vice president at CIC Wealth. “But it also speaks to just how important it is to be seen as a legitimate competitor — let alone be the eventual winner of this arms race in AI.”

Google’s had a weird year. Microsoft used technology it developed  — the transformer model — to build a marquee offering with OpenAI. Meta used it to build credibility in the open-source AI movement. NVIDIA used it to add more than $500 billion to its market cap. All these efforts threaten Google’s long-term dominance in search. 

Gemini, arriving on the heels of OpenAI’s chaos, was Google’s long-awaited answer. But the pressure to deliver something revolutionary seemed to build, and its marketing lost touch with reality. The unforced error spoke loudly.

Google made the video to “inspire developers,” said Oriol Vinyals, a Deepmind vice president. But it may have had the opposite effect for some. Developers on the tech forum Hacker News kept the video on its front page throughout Thursday, and were not happy about it. “I was fooled,” wrote one user. “It’s one thing to release a hype video with what-ifs and quite another to claim that your new multi-modal model is king of the hill then game all the benchmarks and fake all the demos.”

Vinyals said the prompts and outputs in the video were real, with some shortened. And he posted a video that showed some of the brief prompts working exactly like the longer, more detailed ones in the blog post. But his response didn’t seem to satisfy the masses. “Ah, the age-old art of deceptive demos,” said IBM Fellow Grady Booch, quoting Vinyals. “Dear Google: you should have made this abundantly clear.”

Gemini remains an impressive product. While it won’t roll out fully until next year, it’ll have an advantage serving customers on Google Cloud Platform, many of whom already have their data in the service, as Margins’ Ranjan Roy said in Wednesday’s edition of The Panel. For Google, it’s good to finally have Gemini in the wild. 

As for the marketing, while it flopped with developers and the company’s closest watchers, one important constituency seems to have bought in. Alphabet stock jumped 5% following the announcement.

The post Google’s Gemini Marketing Trick appeared first on TheWrap.

And the duo appeared on stage at the 2023 Video Game Awards to unveil the first trailer, which you can watch at the top of the page right now.

But first, before you start expecting “Nope,” the game, the press release is here to let the air out of your tires by making it clear that Jordan is just “one of several talented storytellers nvolved with the project.” So, manage your expectations accordingly.

That caveat out of the way, here’s what we know after watching the trailer: The game is called “OD,” it’s an Xbox exclusive title, and it stars Sophia Lillis (“Dungeons & Dragons: Honor Among Thieves”), Hunter Schafer (“Euphoria”) and the great Udo Kier (too many amazing things to list here).

For those who can’t watch yet, the trailer is just extreme close ups of the three lead actors as they recite the phonetic pangram, “the hungry purple dinosaur ate the kind, zingy fox, the jabbering crab, and the mad whale and started vending and quacking.” As the trailer goes on, the three appear to become more and more terrified.

Now, here’s what we don’t know: Anything else about it, like, at all. Fortunately, while announcing “OD” Kojima helpfully explained that it’s “a game, don’t get me wrong, but it’s at the same time a movie, but at the same time a new form of media.”

Given the apparent stable of writers involved, is this an anthology tale? A game of narrative round robin? And who are the other creators? The press release doesn’t say, but it does explain that the game “explores the concept of testing your fear threshold, and what it means to OD on fear – while blurring the boundaries of gaming and film.”

The game is very much in development and there’s still no release date. So let’s all regroup once Microsoft lets us know when it comes out.

The post Hideo Kojima Enlists Jordan Peele for His Xbox Exclusive Game ‘OD’ – Watch the Trailer | Video appeared first on TheWrap.

The embattled owner of the social media platform was attempting to put the Disney CEO on blast Thursday because after suspending ad buys with X over swirling antisemitic rhetoric and ad placements, the studio continues advertising with Meta despite an incendiary lawsuit filed against the studio on Wednesday.

“Bob Eiger thinks it’s cool to advertise next to child exploitation material,” Musk first tweeted Thursday. “Real stand up guy.”

This message came with a retweet of a CNBC report about New Mexico’s Wednesday lawsuit against Meta Platforms and Mark Zuckerberg “alleging that the company’s platforms enabled child sexual abuse material to be distributed” and that it “failed to identify alleged predator networks,” according to CNBC.

“Why no advertiser boycott, Bob Eiger?” Musk tweeted 10 minutes later with a direct link to the CNBC story. You are endorsing this material!”

The billionaire didn’t tag Iger, but other users are in response to the news of the investigation and lawsuit.

“Bob Iger only boycotts platforms that promote free speech,” another user wrote in response to Musk’s second tweet. “If he’s not boycotting you then you’ve got a problem.”

Another user played off of the Disney CEO’s first name.

“How about a Bobcott??” David Milsner tweeted. “Asking for a friend”

The surname snafu was largely ignored by Musk’s followers, who appeared to propagate the incorrect spelling in their responses to his tweets. Many took Musk’s side in the argument, while others inserted their own opinions or criticized the tech mogul for being a hypocrite.

“My dude. Your platform literally shares this stuff and much worse next to ads,” one user wrote.

“Wait until you find out about the sexist and racist posts on Twitter!” another tweeted.

Musk responded to a comment asking why Disney hadn’t fired Iger yet, saying that he “should be fired immediately.”

“Walt Disney is turning in his grave over what Bob has done to his company,” Musk added.

Read up more of the discourse below:

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The Stockholm, Sweden-based company says about 1,500 workers will be affected. They follow a January reduction of 600 workers from its podcast division, and another 200 in June.

“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business – one designed to achieve our goal of being the world’s leading audio company and one that will consistently drive profitability and growth into the future,” Ek wrote. “While we’ve made worthy strides, as I’ve shared many times, we still have work to do. Economic growth has slowed dramatically and capital has become more expensive. Spotify is not an exception to these realities.”

The latest cuts signal that Spotify is doubling down on its push to profitability, after reporting an operating profit and strong subscriber gains last month. The service reported 226 million premium subscribers in October, up from 220 million in mid-summer, shooting past even its own lofty expectations.

“I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance,” Ek wrote. “We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.”

Ek detailed a robust, five-month severance package for departing employees, including continuing health insurance coverage and “immigration support” for employees who relocated outside their home countries.

He acknowledged the company’s sprint forward in 2020 and 2021, when “we took advantage of the opportunity presented by lower-cost capital and invested significantly in team expansion, content enhancement, marketing and new verticals.”

“These investments generally worked,” he continued, but “we now find ourselves in a very different environment. And despite our efforts to reduce costs this past year, our cost structure for where we need to be is still too big.”

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Anthropic is now in prime position to take advantage of OpenAI’s misstep, but it has its own untraditional board structure to contend with. The company is a Public Benefit Corporation, with a board that serves its shareholders. But a separate, Long-Term Benefit Trust (LTBT) will select most of its board members over time, with a mandate to focus on AI safety. The Trust has no direct authority over the CEO, but it can influence the company’s direction, setting up another novel governance structure in an industry now painfully aware of them. 

“The LTBT could not remove the CEO or President (or any other employee of Anthropic),” an Anthropic spokesperson told me. “The LTBT elects a subset of the board (presently one of five seats). Even once the LTBT’s authority has fully phased in, and it has appointed three of five director seats, the LTBT would not be able to terminate employees.”

Several OpenAI employees left in late 2020 to start Anthropic. With serious technical ability, and concern about the dangers of AI, the group raised $7 billion, expanded to around 300 employees, and built Claude, an AI chatbot and underlying large language model. Anthropic now works with 70% of the largest banks and insurance companies in the U.S. and has high-profile clients including LexisNexis, Slack, and Pfizer. It’s announced billion-dollar investments from Google and Amazon this fall.

The founders of Anthropic claim to be even more concerned with safety than OpenAI, but were aware of the pitfalls of their ex-employer’s board structure. So they created a traditional board responsible to shareholders and installed the LTBT to pick board members — a departure from OpenAI’s non-profit model. 

The Trust consists of “five financially disinterested members” there to help “align our corporate governance with our mission of developing and maintaining advanced AI for the long-term benefit of humanity,” the company said. Effectively, it’s an effort to sync Anthropic’s governance with its mission but insulate the company from dogmatic chaos. 

“Stability is a key,” said Gillian Hadfield, a University of Toronto law professor and ex-OpenAI policy advisor who spoke with Anthropic as it was structuring the Trust. “They don’t want their company to fall apart.”

The Trust is not risk-free. Board members will have responsibilities to shareholders, but they won’t easily forget those who nominated them and why they did it. They’ll have to find a way to balance the two. The structure should make Anthropic more stable than OpenAI but not entirely immune to a repeat of the Altman situation.

“Could you see it happened with Antropic? Yes, I think we could,” Hadfield said. “I’m proud and supportive of the fact that these companies are thinking deeply and structurally about the potential risks. And they’re thinking about how would we distribute the benefits.”

Anthropic’s leadership is also close to the Effective Altruism movement, which has ties to ex-FTX CEO Sam Bankman-Fried along with some of the board members who ousted Altman two weeks ago. The Long-Term Benefit Trust has at least two members connected to Effective Altruism. Paul Christiano, the founder of the Alignment Research Center, is a prolific writer on EA forums. Zach Robinson, the interim CEO of Effective Ventures US, runs a firm tied directly to the movement.

Many Effective Altruists ascribe to a philosophy called Longtermism, which holds that the lives of people deep in the future are as valuable as lives today. So they tend to proceed with AI development with exceptional caution. The theory sounds righteous on the surface, but its critics contend that it’s hard to predict the state of the world generations from now, leading longtermists to sometimes act rashly.

Yale Law School’s John Morley, who helped architect the Trust’s structure, declined to comment. Amazon declined to comment. Google didn’t respond to a request to comment. Amy Simmerman, a partner at Wilson Sonsini Goodrich & Rosati who also worked on developing the Trust, didn’t respond.

Anthropic’s governance should be stable enough to make customers feel comfortable working with the company, at least in the coming years. That’s a significant benefit after OpenAI’s chaos showed the risks of betting on a single model. And those betting on the company seem to be aware of its structure and happy it’s in place, even if it adds some uncertainty.

“This long-term benefit trust is a little bit different. My sense is there’s some level of security in implementing something like that,” said Paul Rubillo, an investor who participated in Anthropic’s Series C round in May. “We’re in uncharted waters, right?”

The post After OpenAI’s Chaos, Anthropic Has An Opportunity (And Its Own Untraditional Board) appeared first on TheWrap.

The tech mogul and X owner also apologized for the antisemitic tweet during the New York Times DealBook summit, saying that he “handed a loaded gun to those who hate me, and arguably to those who are antisemitic. For that I’m quite sorry. That was not my intention.”

“I should in retrospect not have replied to that particular post,” he continued.

Musk added that his recent trip to Israel and meeting with Prime Minister Benjamin Netanyahu was not “an apology tour” for the post and other widely publicized instances of antisemitism at X.

On Nov. 15, Musk endorsed a verified account named @breakingbaht, which wrote, “Jewish communities have been pushing the exact kind of dialectical hatred against whites that they claim to want people to stop using against them.” He responded to the post, writing, “You have said the actual truth.”

Addressing the incident Wednesday in conversation with journalist Andrew Ross Sorkin, Musk maintained that his agreement was largely taken out of context and “subsequently clarified in replies, but those clarifications were ignored by the media.”

The “actual truth” tweet came in conjunction with a Media Matters report that found X not adhering to agreed-upon brand safety measures for advertisers’ content. It found the social media platform placing its ads alongside content that “touts Adolf Hitler and his Nazi Party,” which led to a suspension of advertisements en masse by companies including Disney, Warner Bros., Paramount, Sony, Lionsgate, Apple and IBM.

X CEO Linda Yaccarino responded to the controversy on Nov. 16, tweeting that “X’s point of view has always been very clear that discrimination by everyone should stop across the board — I think that’s something we can and should all agree on.”

“When it comes to this platform — X has also been extremely clear about our efforts to combat antisemitism and discrimination. There’s no place for it anywhere in the world — it’s ugly and wrong,” she wrote. “Full stop.”

The following day, Musk called advertisers the “greatest oppressors of your right to free speech.”

Asked again Wednesday about the recent advertising exodus at X, Musk responded that he didn’t care if they left the social media platform.

“If somebody’s going to try to blackmail me with advertising, blackmail me with money,” Musk said. “Go f–k yourself.”

“Is that clear?” the billionaire quipped. “That’s how I feel.”

Watch the interview (and the comments in question) below:

Watch my conversation with @ElonMusk: https://t.co/YedkELVhFn

— Andrew Ross Sorkin (@andrewrsorkin) November 29, 2023

Elon Musk in response to advertisers like Disney pulling their ads on Twitter/X:

“Don’t advertise…go fuck yourself. Go. Fuck. Yourself. Is that clear?“ pic.twitter.com/p5FRQlBcAj

— Yashar Ali (@yashar) November 29, 2023

Musk’s incendiary comments came after he filed a lawsuit against Media Matters on Nov. 20.

At Wednesday’s New York Times event, the embattled tech mogul wore a tag around his neck given to him by the families of one of the hostages held in Gaza, which Musk shared reads “Bring Them Home.”

The post Elon Musk Tells X Advertisers to ‘Go F—k Yourself’  appeared first on TheWrap.