Meta, Amazon Ad Market Woes 😰

📝 Update 2023-04-21

What’s in today’s Business Edge update?

📉🔍 In today's top news, TSMC faces its first revenue decline in four years amid economic uncertainty, while Meta and Amazon proceed with layoffs in a tough advertising market. Stability AI also launches a new open-source text generation tool 🚀

💡 In other stories, Zuckerberg hints at more Meta layoffs, Tesla's Q1 sales surge but profit drops, Microsoft ditches Twitter support on its ad platform, and Musk threatens legal action. Stay tuned for these exciting updates! 🌟

Let’s get started 👇

🌍 Impact level: Global

News events that affects multiple industries, triggers significant regulatory changes, and impacts the economy worldwide.

“Today's tech news failed to shake up the world stage. Looks like the global impact is taking a day off” - Business Edge

📈 Impact level: Industry

News that can affect entire industries or multiple sectors, major technology advancements, and influence market leaders

TSMC Experiences First Revenue Decline in Four Years Amid Economic Uncertainty

TSMC, the world's largest semiconductor contract manufacturer, has reported a 4.8% YoY revenue decline to $16.72 billion for Q1 2023, marking its first dip in four years. The company attributed the decline to weakening macroeconomic conditions and decreasing end-market demand, which impacted customers' inventory adjustments.

More:

• Q1 net income increased 2.1% YoY but dropped 30% compared to Q4 2022

• Advanced technologies (7nm or smaller) accounted for 51% of total wafer revenue

• Q2 revenue is expected to fall from $15.2 billion to $16 billion

• TSMC seeks up to $15 billion in CHIPS Act funding but is concerned about the attached conditions

Read more about it at —> (read time: 4 minutes)

📝 Impact insight: We classify this news as having an industry-wide impact as it affects the semiconductor industry and has implications for technology production and supply chains. TSMC's revenue decline showcases how economic uncertainty and demand shifts can influence key industry players.

Meta and Amazon Proceed with Layoffs Amid Tough Advertising Market

Meta Platforms and Amazon are continuing with their planned layoffs due to a challenging advertising market. A review of Q1 advertising spending indicates that companies are seeking better returns on their ad spending as economic uncertainty persists.

More:

• Meta's 'Paid Social' segment, including Facebook and Instagram, saw a 25% drop in advertising spending from the previous quarter

• Meta plans to cut 10,000 jobs after laying off 11,000 employees in November

• Amazon's 'Retail Media' segment experienced a 14% decline in advertising spending from the previous quarter

• Amazon began layoffs in its advertising unit to control costs

Read more about it at —> (read time: 4 minutes)

📝 Impact insight: We classify this news as having an industry-wide impact, affecting major tech companies, Meta and Amazon, and the advertising industry. The job cuts and advertising spending decline demonstrate the challenges faced by these tech giants amidst economic uncertainty.

🏭 Impact level: Market

News wich broadly affects multiple sectors, reshapes market dynamics, and influences consumer behavior.

Microsoft Drops Twitter Support from Ad Platform, Musk Threatens Legal Action

Microsoft Advertising will cease support for its Twitter integration starting April 25, according to an updated support page. The platform allows advertisers to manage campaigns, create posts, and view engagement data on multiple social sites, but Twitter will no longer be among them.

More:

• Microsoft Advertising will still support Facebook, Instagram Business, and LinkedIn

• The change occurs shortly before Twitter deprecates old API tiers

• The new Enterprise tier, required for Microsoft to maintain the same service level, costs between $42,000 and $210,000 per month

• Twitter CEO Elon Musk claims Microsoft "illegally" used Twitter data for AI training and plans legal action

Read more about it at —> (read time: 3 minutes)

📝 Impact insight: We classify this news as having market impact. Microsoft's decision to drop Twitter support from its ad platform affects a specific market segment within the tech industry. Elon Musk's allegations and potential legal action could further impact the competitive dynamics between the two companies.

Tesla Sees Q1 Sales Boost, But Profit Drops Due to Price Cuts

Tesla's first-quarter sales increased, yet profit slumped by 24% due to the price cuts implemented across its model lineup to stimulate sales. The company's strategy of reducing prices and relying on future revenue from "Full Self-Driving" (FSD) technology raises concerns among analysts. CEO Elon Musk hinted that further price cuts might occur as Tesla aims to produce the maximum number of vehicles possible.

More:

• Tesla made $2.51 billion in Q1, down from $3.32 billion a year ago

• Revenue rose 24% to $23.33 billion

• The operating profit margin dropped from 19.2% to 11.4%

• Tesla produced nearly 18,000 more vehicles than it sold in Q1

• U.S. safety regulators are scrutinizing Tesla's partially automated driving systems

Read more about it at —> (read time: 4 minutes)

📝 Impact insight: We classify this news as having a market impact since it affects a specific segment within the automotive industry. Tesla's price cuts and strategies have implications for the electric vehicle market and consumer behavior.

Stability AI Launches Open Source Text Generation Tool After Success in Image Generation

Stability AI, known for its open source image generation model Stable Diffusion, is moving into text generation with the introduction of StableLM. The new models offer a transparent and accessible alternative to proprietary AI solutions from tech giants like Microsoft and Google. StableLM models can generate text and code, powering a range of downstream applications.

More:

• StableLM models in Alpha stage can be used for chit-chat, formal writing, creative writing, and writing code

• Offers a transparent alternative to proprietary AI solutions

• StableLM uses 3 to 7 billion parameters, compared to Microsoft's GPT-3, which uses 175 billion parameters

• Collaboration with EleutherAI in open-sourcing earlier language models

Read more about it at —> (read time: 4 minutes)

📝 Impact insight: We classify this news as having Market Impact, as Stability AI's open-source text generation model, StableLM, offers a new option for AI enthusiasts and developers in the text generation market segment, potentially influencing consumer behavior and trends within the market.

🏢 Impact level: Company

News that affects individual companies, influences corporate strategies, impacts stock prices.

Zuckerberg Hints at More Layoffs and Slower Hiring at Meta

Meta CEO Mark Zuckerberg reportedly said the company might not be finished with layoffs as it undergoes its current round of 4,000 job cuts this week and prepares for another wave in May. The tech giant is also likely to slow down its hiring process significantly.

More:

• Meta, the parent company of Facebook and Instagram, previously announced plans to slash 21,000 jobs

• Zuckerberg addressed the situation in a virtual Q&A session during a town hall on Thursday

• Meta will announce quarterly results on Wednesday next week

• Zuckerberg warned that workforce reductions may not be over due to the company's uncertain future

Read more about it at —> (read time: 2 minutes)

📝 Impact insight: We classify this news as having a company impact, as it specifically concerns Meta's workforce strategy, including potential layoffs and a slower hiring process. The uncertainty highlighted by Zuckerberg may lead to further changes in the company's future operations.

🏘️ Impact level: Local

News with limited effect, concerns niche topics, affects a small audience.

“Nothing much happening today, but we'll keep you posted” - Business Edge