This week in tech: Netflix wows with big subscriber numbers; OpenAI CEO

© Reuters.

By Louis Juricic and Sarina Isaacs – Here’s your weekly pro recap of last week’s tech headlines on everyone’s lips: solid Netflix subscriber numbers; Elon Musk’s publicity U-turn; accelerated merger talks between Western Digital and Kioxia Holdings; Disturbing Testimony by OpenAI Chief Before Senate; And Alibaba ‘s below-average earnings.

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Netflix reports strong ad-supported subscriber numbers

Netflix (NASDAQ:) announced Wednesday that its new $7-per-month ad-supported tier has reached nearly 5 million monthly active users, a significant increase compared to the roughly 1 million reported by third parties.

The announcement was part of a larger management presentation, leading analysts to take a more positive view of the company. Oppenheimer praised the “progress of the ad tier” and Evercore reiterated its “Outperform” rating as new updates show that the ad-supported tier is “steadily gaining traction.”

Netflix also stated that the ad tier now accounts for 25% of new subscribers in each region. The company’s management told advertisers that its viewers are four times more likely to engage with an ad on Netflix than on the other streaming platforms.

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Shares are up 7.2% this week to $365.36.

Tesla’s Elon Musk thinks about advertising

In real time, during Tesla’s (NASDAQ:) annual shareholder meeting, Musk appeared to have decided to advertise his vehicles after years of resisting the idea. An investor inquired about a possible advertising campaign at the meeting to learn more about it full TSLA storyto which Musk replied that Tesla would try “a little advertising.”

In response, Wedbush said:

We see this as a major benefit for Tesla as many parts of the Tesla product portfolio are undervalued by the street…many in the general public are unaware of the affordability and performance of TSLA products. …We were very pleased with the change in attitude towards advertising at Musk and in general.

Tesla shares are up 7.5% this week at $180.14.


Western Digital intensifies merger talks

According to Reuters, Western Digital (NASDAQ:) and Kioxia Holdings Corp are accelerating merger talks and discussing a deal structure as both companies remain under pressure from a slowdown in demand for storage products.

Excess inventories amid weak demand in the memory market hit both companies hard and they believe a single company would be better positioned to compete with peers like Samsung Electronics (OTC:).

The combined company would be 43% owned by Kioxia, 37% owned by Western Digital and the remainder owned by the companies’ existing shareholders, Reuters added.

Benchmark reiterated Western Digital’s Hold rating, stating, “While the devil is in the details, given the current weak storage market, we see modest near-term upside potential in such a deal as most of the value comes from the HDD unit originates.” spin out.”

Shares are up 7.3% this week to $38.32.

OpenAI boss “nervous” about AI interference in elections

Microsoft (NASDAQ:)-backed OpenAI CEO Sam Altman said he was “nervous” about the possibility that artificial intelligence could disrupt elections at a Senate panel on Tuesday — and said the US should think about rules, licensing and… Think about test requirements AI development.

Senator Cory Booker (D) said of AI: “There’s no way you can put this genie in the bottle. This is exploding worldwide.”

In response to Sen. Mazie Hirono (D) mentioning an AI-generated video of former President Trump’s arrest, Altman said that creators should clarify when an image is generated and not factual.

Altman also said companies should be able to protect their data from being used for AI training – but public materials on the web should remain open for these purposes.

Microsoft shares rose 3% this week to $318.34.

Alibaba reports disappointing earnings

Hong Kong-listed shares of e-commerce giant Alibaba Group (NYSE:) (HK:) fell on Friday as a slowing economic recovery and growing competition in China, its largest market, boosted the stock.

The company reported revenue of RMB208.20 billion (US$1=RMB7.04) for the three months ended March 31, below analyst estimates of RMB210.3 billion. Annual revenue through March 31 also rose just 2% to RMB868.69 billion, the weakest pace of growth since the company went public in 2014.

Alibaba’s Chinese direct sales, which accounts for the bulk of its sales, fell 1% in the quarter as consumer spending in China continued to struggle despite the lifting of anti-COVID measures.

Alibaba’s New York-traded ADRs fell 3.7% this week to $83.98. Shares traded in Hong Kong fell 1.6%.

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Senad Karaahmetovic, Michael Elkins, and Ambar Warrick contributed to this report.

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