Axios

If you can't beat em', join em.

That's the attitude some retailers competing against Amazon are taking, as to the Financial Times reports that following Amazon's acquisition of Whole Foods, investment bankers are hearing an upsurge in requests from clients to pitch their companies as acquisition targets for the ecommerce giant. "All these desperate retail companies think that the solution to their problems will be solved by Bezos . . . they are all praying for a new Amazonian era of retail . . . in which they are members of the [Bezos] club," one banker tells the FT.

Why it matters: A significant portion of Amazon's success comes from its willingness to accept razor-thin or non-existent profit margins in return for higher market share. In such a competitive landscape, shareholders are better off accepting the premium typically offered when one company buys out another (a 27% mark-up in the case of Whole Foods), than trying to compete with Amazon on price.

Vitamin World, the nutritional supplement chain with nearly 350 stores, plans to file for Chapter 11 bankruptcy as soon as this month, per Reuters.

• The reasoning: The company wants to be able to escape some of its most expensive lease agreements, which are hurting Vitamin's World bottom line.
• Why it matters: Brick-and-mortar specialty stores like Vitamin World are increasingly becoming obsolete as online stores allow consumers to compare and purchase their products with ease.

American business executives expect artificial intelligence to have a large impact on their companies, but few are actually doing anything with AI, according to a new MIT- Boston Consulting Group survey.

Key takeaways, per co-author and BCG senior partner Martin Reeves:

1. Nearly 85% of the 3,000-plus executives surveyed expect AI will give them a competitive advantage.
2. But their adoption of AI isn't matching up: just 1 in 5 of the companies use AI in some way, and only 1 in 20 incorporate it extensively. "Less than 39% of all companies have an AI strategy in place," they wrote.
3. The barriers for adoption include: access to data to train algorithms, an understanding of benefits to their business, a shortage of talent, competing investment priorities, security concerns, and a lack of support among leaders.

One big question: Where does competitive advantage reside in an AI world? "There is a difference between efficiency and competitive advantage. I may be able to do something 10 times faster, but if everyone else can do it 10 times faster or 10 times more accurately, then actually all I've done is increase my cost of doing business. I haven't actually created a competitive advantage," says Reeves.What it means: The survey found "cautious optimism" about how AI will affect employment. Most don't expect AI to reduce their work force in the next five years, but say it will require employees to acquire new skills. Quoting MIT professor Erik Brynjolfsson, co-author of The Second Machine Age, the report says: "AI won't be able to replace most jobs anytime soon. But in almost every industry, people using AI are starting to replace people who don't use AI, and that trend will only accelerate."

Is a gig economy driver an employee or a contractor? That's the question at the center of a bench trial (meaning, without jury) that kicked off on Tuesday in San Francisco federal court as a former driver for GrubHub faces off against the meal ordering company. At the first hearing, both sides mainly spent their time outlining their arguments.

Why it matters: This question has yet to be answered despite several high-profile lawsuits against gig economy companies, including Uber and Lyft. And because this one focuses on the plaintiff's experience as a driver for GrubHub, it may not settle the question either beyond just his own situation.

Russia is widely thought of as an oligarchy run by President Vladimir Putin and a handful of billionaire cronies whose main accomplishment is looking out for their own financial interests. In a new paper, three economists say forensic evidence bears that out.

Economists Thomas Piketty, Filip Novokmet, and Gabriel Zucman found that income inequality is as great in Russia as the United States, with the top 1% of earners garnering upwards of 25% of national income, well above China and other former communist countries like the Czech Republic.

An offshore treasure trove: Piketty and Zucman have studied rising income and wealth inequality all over the world, and what makes Russia unique is how much cash is held offshore. They estimate that nearly $1 trillion in Russian assets is held outside the country, likely by a handful of oligarchs, most of which doesn't show up in official statistics.

Microsoft-owned LinkedIn is launching LinkedIn Audience Network, an advertising feature that will let marketers promote native ads to certain audiences on sites and apps other than LinkedIn. Previously, advertisers could only reach LinkedIn's audience of professionals on Linkedin's platform — mainly within its version of a news feed. Now, they can reach them by targeting ads to certain demographics or behavioral groups with data from Linkedin, wherever they may be on the web.

Why it matters: Some of Microsoft's biggest advertising competitors, like Google, Facebook and Twitter, rely on this type of marketing solution to generate large chunks of advertising revenue, particularly on mobile.

Facebook's artificial intelligence lab has developed an animated bot capable of mimicking human responses to conversation by training it using footage from hours of Skype conversations, per New Scientist.

• One big problem: AI's biggest hurdle has been the uncanny valley, a state in which robots read to humans as almost realistic but still undeniably artificial.
• Facebook's researchers plotted 68 different facial reactions that take place during a conversation into the bot, which eventually learned the "correct" ways to respond to conversational cues. Volunteers judged the bot and a human to be equally natural during conversation.
• Why it matters: The bot is only still approximating — through repeated machine learning — what it thinks a conversational response should be, rather than holding a genuine conversation. Science still has a long way to go until such technologies can develop their own personalities or be tailored to response to specific situations.

Texas is helping to lead the charge to deport illegal immigrants, but with some 200,000 homes needing work or complete reconstruction after Hurricane Harvey, the state faces a potential crisis because of a shortage of construction workers, per the Washington Post.

President Trump's decision today to end DACA, the so-called Dreamers program that shielded the children of illegal immigrants from deportation, could exacerbate the shortages. Texas is losing not only a spine of its blue-collar work force — between a quarter and half of Houston's construction workers are illegal immigrants — but, because of low salaries, the state is unlikely to be a magnet for unemployed Americans.

Verizon has started a new program called Verizon Up, in which customers' data is exchanged for rewards, according to the Wall Street Journal.

How it works: Up credit is earned when a customer spends $300 on their Verizon bill. The credits can be exchanged for things like concert tickets, free months of Apple Music or Uber rides. In exchange, Verizon gets the customer's interests, visited websites, location, and more. The exchange is made "clear during the sign-up process."

Why it matters: Telecom providers like Verizon and AT&T want to compete with online platforms like Google and Facebook for a bigger slice of the digital advertising market. That means they need to collect more data about users to attract those advertisers. So they are offering more content and perks rather than simply powering the internet connections to deliver other companies' services.

President Trump and his allies in Congress are pushing to limit both legal and illegal immigration to the U.S., but more important than politics are powerful demographic and economic factors that will shrink future low-skill immigration to the U.S. in coming years, according to new research from economists at the University of California.

Bottom line: Between 2007 and 2014, the population of undocumented immigrants fell by 160,000 persons annually, and the authors argue that this is only partly the result of the Great Recession. Other factors driving the decline include:

• The end of the Latin American baby boom — the average fertility rate in Latin American countries has fallen from more than 5 children per woman in 1970 to just more than 2 today.
• Many Latin American economies have made significant gains in per capita income relative to the U.S., decreasing the economic benefit of emigrating.

Sinclair Broadcasting Group's bid to swallow up Tribune Media faces a new wave of opposition from competitors and consumer advocates who say the mega media merger puts too much control in the hands of a single media company.

Why it matters: If approved, the deal would bring together more than 200 stations that reach about 72% of U.S. TV households in 81 markets. The combined company would have at least one station in each of the nation's top five media markets: New York, Los Angeles, Chicago, Philadelphia and Dallas.

The other side: Sinclair says merging will bring financial stability to local broadcasters, who increasingly have to compete with online streaming services and other new sources of content.