Axios

Apple on Thursday reported quarterly sales fell narrowly from a year ago, though a strong services business helped the iPhone maker top earnings expectations.

Why it matters: Apple's results come as the company is gearing up to introduce new iPhones in the coming weeks and its mixed-reality Vision Pro headset early next year.

The Legend of Zelda: Tears of the Kingdom has shipped more than 18.5 million copies since its May 12 launch, selling 15.7 million to consumers in its first eight weeks of release, Nintendo announced this week.

Why it matters: It was one of several data points released Tuesday showing a surge for the games industry this spring.

Elon Musk is singing "Bye Bye Birdie" with the chaotic rebrand of Twitter.

Why it matters: At the heart of every rebrand is a shift in corporate strategy — and Twitter has seen drastic change since Musk took over in October 2022.

Venture capitalists valued virtual events company Hopin at around $7.6 billion in mid-2021, believing that the pandemic had permanently changed the nature of live gatherings.

Fast forward: Those investors are now getting some of their money back, as Hopin moves to a new model at a much lower valuation, Axios has learned from multiple sources.

Driving the news: RingCentral, a publicly traded rival to Zoom, on Wednesday said it's agreed to buy Hopin's events management platform and interactive engagement tools.

• No financial terms were disclosed. [Update: A subsequent regulatory filing from RingCentral puts the price at upwards of $50 million]

Behind the scenes: Hopin plans to use some of the proceeds, plus existing cash, to provide partial liquidity for its venture capital backers, who invested more than $1 billion. Specifically, those participating in the Series B round and beyond can expect to recoup around half of their outlays.

• They'd also remain shareholders in the remaining company, which is pivoting to focus on a video streaming product called StreamYard (based on a 2021 acquisition). There might even be a rebrand in the future.
• Among the changes will be the departure of Hopin CEO Johnny Boufarhat, who netted nearly $200 million via a secondary tied to the 2021 venture round.
• Not all investors, however, seem interested in sticking around for what's effectively a new company, revalued closer to $400 million, and are expected to effectively exit. Likely parties here are crossover firms like Altimeter Capital Management.
• The new valuation should help Hopin attract new employees, as the prior price made hiring difficult.

Neither Hopin nor Altimeter returned requests for comment.

A group of school superintendents, educators and education technology vendors will meet at the White House Monday to discuss the growing number of cyberattacks targeting schools, a White House official told Axios.

Why it matters: Ransomware continues to pummel school districts across the United States, from major cities to small towns.

The power sector isn't immune from rising levels of cyberattacks, and utilities face "serious difficulties" finding and retaining workers to defend against them, a new analysis finds, Ben writes.

The big picture: A new International Energy Agency commentary notes that power companies have become increasingly digital.

As AI makes computers better at talking and behaving like human beings, humans are choosing — or being forced — to behave more like machines.

Why it matters: AI optimists believe the technology will relieve people from drudgery, allowing them to be more human than ever before. But marketplace pressures and cultural forces are both capable of pushing in the opposite direction, slotting humanity in as one more gear in a giant mechanism.

Facebook parent Meta on Wednesday released the code and model weights for several AI tools designed to create sound from text-based prompts.

Why it matters: The use of generative AI could make it easier for those looking to build video games or digital worlds to add background audio as well as visuals.

The serious people in crypto are building relationships in Washington.

Driving the news: New hire announcements for policy chiefs, corporate strategists, legal counsel and compliance directors have been coming in hot lately — folks who do facetime with government officials, regulators and policymakers.

North American banks are winning a global race to transform banking into an AI-first industry, according to a new report from banking data provider Evident.

• J.P. Morgan Chase leads in AI research, Capital One in AI patents, and Wells Fargo in AI investments. Other top performers include Royal Bank of Canada, TD Bank, Goldman Sachs, and First Citizens (successor to Silicon Valley Bank).
• North American banks published 80% of all bank AI research and made 60% of all bank AI-related investments in 2022, while filing 99% of all the AI-related bank patents in 2021.

Why it matters: Banks and smaller fintech competitors that don't have a centralized AI innovation strategy are falling behind their big bank competitors.

• AI research, patents and partnerships can all help a bank set itself apart with new products and processes.

What's happening: Top banks are using AI to be more competitive in markets such as high-frequency trading and payments and to improve performance in fields from fraud detection to marketing.

• Many banks have developed AI labs or, in the case of BBVA, an "AI factory." But the report authors say only six banks — all in the U.S. or Canada — are pursuing patent registration strategically, including in unexpected areas such as marketing.
• It's a huge challenge for a bank to use AI to harness its data, from sourcing computing resources to structuring data and choosing when to build and when to buy models, while ensuring these investments support new products.

By the numbers: The surveyed banks employ 650 AI researchers, making them players in the fight for AI talent. J.P. Morgan Chase hired more than 40 in 2022, per the report.

• Some banks are actively investing in AI startups, from incubation to scaling — sometimes aiming to generate client returns, other times looking for their own direct access to AI innovations.

Zoom out: Many experts are expecting a wave of consolidation in the banking sector, which could be intensified and accelerated by AI.

• Smaller banks and credit unions, which often rely on premium customer service as a differentiator, are already behind in AI development and deployment. As those experiences become increasingly driven by AI, smaller players could struggle, per McKinsey.

Yes, but: Top U.S. banks have a large lead over global competitors, though it's shrinking in some areas.

• European banks are better positioned on early-stage investments in AI companies, with six of the top 10 pre-seed and seed investors coming from Europe.
• U.S. banks as a group published the most AI research papers compared to banks in other regions. But China-based Ant Financial has overtaken J.P. Morgan Chase as the financial institution publishing the most papers.
• A May report from analytics firm LeadGenius and Punks & Pinstripes, a network of Fortune 500 executives, concluded that while big banks have ramped up AI recruitment, they're also often losing people to tech companies.

What they're saying: “Maintaining a ‘wait and see’ approach to AI innovation looks increasingly risky given the pace at which the leaders are accelerating away from the rest of the field,” Annabel Ayles, co-founder and COO of Evident, said by email.

• "While AI innovation comes at a cost, it is cheap if measured as the cost for survival," Ayles said.

As every other big name in tech has jumped on the generative AI bandwagon, Apple — while not entirely ignoring the technology — has stayed largely aloof.

Driving the news: With Microsoft, Google, Meta and Amazon all staking out their turf, Apple's relative silence on the subject is likely to be challenged by analysts when the company reports earnings Thursday.

Commerce Secretary Gina Raimondo wants to remake the image of manufacturing for younger workers.

Why it matters: Raimondo has been instrumental in driving public and political support for the CHIPS Act, which is expected to create an explosion of new jobs in the semiconductor industry that will need to be filled.