Tech
GM Beats Second-Quarter Expectations, Raises Forecast Again
General Motors (GM) reported impressive second-quarter profit and revenue on Tuesday, surpassing Wall Street’s expectations. The company raised its annual profit forecast for the second time this year, driven by strong pricing and high demand for gas-powered trucks.
The Michigan automaker continues to see robust profits from its gasoline-engine offerings while preparing for a gradual transition to electric vehicles (EVs). GM executives confirmed that the company is on track to meet its ambitious EV production goals.
“We’re encouraged by the early results we’re seeing in EVs now that we can build at scale,” CFO Paul Jacobson said in a call with reporters.
In response to these positive results, GM’s shares rose over 4% in premarket trading. The company updated its adjusted pre-tax profit projection for the year to $13 billion to $15 billion, up from the previous range of $12.5 billion to $14.5 billion.
GM reported adjusted earnings per share of $3.06, beating Wall Street’s average estimate of $2.75. The company also achieved $48 billion in revenue for the quarter, surpassing analysts’ consensus of $45.5 billion.
GM provided an update on its Cruise self-driving unit, announcing a focus on developing a next-generation Chevrolet Bolt rather than the futuristic Origin vehicle without human controls.
Despite a cyberattack that affected auto dealerships across the U.S. last month, GM’s quarterly results remained strong, with a 14% increase in net income over the previous year to $2.9 billion.
GM’s stock has performed exceptionally well in 2024, increasing by 38% and outperforming its rivals and the S&P 500. In comparison, Ford Motor has seen an 18% increase, while Stellantis has experienced an 11% decline.
Additionally, GM received significant financial support from the U.S. government this summer to bolster its EV ambitions.
Tech
Meta Forms Data-Sharing Alliance with UK Banks to Combat Fraud
Meta, the parent company of Facebook, announced a new collaboration with two major UK banks, NatWest and Metro Bank, to tackle the rising issue of online scams. This initiative, part of Meta’s Fraud Intelligence Reciprocal Exchange (FIPE), aims to enhance fraud detection by allowing UK banks to share vital data directly with Meta. The goal is to identify and dismantle accounts involved in fraudulent activities.
The system has already seen significant success. For example, Meta claims it shut down 20,000 scam accounts linked to a network selling fake concert tickets in both the UK and the U.S., thanks to data provided by British banks.
Meta’s head of counter-fraud, Nathaniel Gleicher, emphasized the importance of collaboration between financial institutions and social media platforms, noting that such partnerships enable faster detection and removal of scam accounts.
Meta’s existing policies already prohibit the promotion of financial fraud, including deceptive schemes such as loan scams and fake investment promises. However, this new collaboration represents a significant step in the ongoing fight against online financial crimes. Additional banks are expected to join the program soon, further expanding its reach.
Tech
Goldman-backed Starling Bank hit with $38.5 million fine for financial crime prevention failures
Starling Bank, the British digital lender backed by Goldman Sachs, has been fined £29 million ($38.5 million) by the U.K.’s Financial Conduct Authority (FCA) for failing to adequately address financial crime risks. The penalty was imposed due to weaknesses in Starling’s financial sanctions screening system and for repeatedly breaching rules related to opening accounts for high-risk customers.
Between 2017 and 2023, Starling grew from 43,000 to 3.6 million customers, but its internal controls to combat financial crimes did not keep pace with this rapid expansion. Despite agreeing to stop opening accounts for high-risk customers during the investigation, Starling still opened 54,000 accounts for 49,000 high-risk individuals between September 2021 and November 2023, violating FCA guidelines.
In response, Starling Bank acknowledged the failings and emphasized steps taken to strengthen its risk management systems. David Sproul, chairman of Starling Bank, apologized and assured that the bank had learned from its past mistakes. He noted the company’s efforts to improve governance and controls, which he believes will support the bank’s ongoing growth.
The FCA concluded its investigation in 14 months, significantly faster than its typical 42-month average for similar cases.
Tech
OpenAI CTO Mira Murati Announces Departure After 6 Years
OpenAI’s Chief Technology Officer, Mira Murati, has announced her departure from the company after six and a half years. In a memo shared on X, Murati expressed that she had made the “difficult decision” to step away from OpenAI, citing her desire for personal exploration and reflection.
“There’s never an ideal time to step away from a place one cherishes, yet this moment feels right,” Murati wrote, emphasizing her commitment to ensuring a smooth transition for the company during this critical time.
Her exit follows other high-profile departures from the company, including co-founder Ilya Sutskever and former safety leader Jan Leike in May, as well as co-founder John Schulman, who left last month to join rival company Anthropic.
Murati’s departure comes at a time when OpenAI is pursuing a new funding round, potentially valuing the company at over $150 billion, with significant investments anticipated from major players like Thrive Capital, Microsoft, and Nvidia. OpenAI, the company behind ChatGPT, has seen rapid growth since 2022 but has also faced internal controversies and employee turnover, sparking concerns about its ability to scale safely.
Murati became a public figure when she was appointed interim CEO last November after the abrupt ousting of CEO Sam Altman. Despite her departure, she remains focused on supporting OpenAI’s momentum in the coming months.
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