Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

Shinsegae Group chair Chung Yong-jin has issued a personal public apology after Starbucks Korea faced mounting criticism over a marketing campaign accused of mocking South Korea’s pro-democracy history. The retailer's subsidiary E-Mart owns the coffee chain in South Korea. The controversy centered on a May 18th “Tank Day” promotion tied to Starbucks tumblers, which critics said referenced the military crackdown during the 1980 Gwangju Democratic Uprising. The campaign also used wording linked to the torture death of student activist Park Jong-chul, a pivotal moment in South Korea’s democracy movement. Chung said the company had “hurt the hearts” of citizens and accepted full responsibility for the incident. The backlash intensified after Starbucks Korea chief executive Sohn Jeong-hyun was dismissed on the day the promotion launched, with critics accusing management of attempting to deflect blame. Shinsegae said an internal investigation has not found evidence that employees intentionally mocked the democracy movement, although the company warned any staff found to have acted deliberately would be dismissed. The retailer also acknowledged that sales have fallen sharply since the controversy erupted.

 

Korea JoongAng Daily

Bloomberg

South China Morning Post

Speaking virtually at a Commonwealth Bank of Australia (CBA) conference in Sydney, OpenAI CEO Sam Altman said he was initially concerned about the impact AI would have on global employment ​levels, but believed the rapid development ‌and adoption of the technology would not lead to a global "jobs apocalypse." Altman said his executive team had been "roughly right" on the technological predictions made by OpenAI when it launched ​ChatGPT in 2022, but were "pretty wrong" on the social and economic implications. "I'm delighted to ⁠be wrong about this, I thought there would have been more impact on entry-level white-collar jobs being eliminated by now than ​has actually happened," Altman said, adding that he didn't think the human interaction required in ⁠many jobs ​would be replaced by AI. "I don't think we're going to have the kind ​of jobs apocalypse that some of the companies in our space advocate or talk about."

 

Reuters

Software tools that remove safety protections from AI models developed by tech giants are being used to create thousands of altered versions stripped of their original controls, according to tests.

 

Financial Times

Costco has asked a U.S. federal judge to dismiss a proposed class action alleging the retailer should refund customers for higher prices charged before the Supreme Court struck down import tariffs imposed by President Donald Trump. Costco argued the lawsuit was speculative and that customers voluntarily paid advertised prices, while stating it has not yet received any tariff refunds from the government and has not determined how any future refunds would be shared with members.

 

Reuters

Japanese drugmaker Takeda Pharmaceutical engaged in an antitrust scheme to delay a generic version of its ‌constipation drug Amitiza, a U.S. jury has found. Jurors in federal court in Boston sided with wholesalers, insurers, health funds and retailers including CVS and Walgreens, who claimed the delay forced them to overpay for the drug. Takeda denied wrongdoing during the five-week trial and said it would "vigorously pursue" an appeal.

 

Reuters

The Venezuelan government will set royalty and tax rates for private and foreign investors in ‌oil and gas projects on a project-by-project basis under draft ‌rules of a new hydrocarbons law seen by Reuters, which notes that the proposed strategy has raised skepticism over ​whether Caracas intended to ‌reduce significantly the state's take - historically one of ​the highest in Latin America.

 

U.S. News

Russian President Vladimir Putin has signed a law which allows him to deploy the military to overseas countries to aid Russian citizens who have been detained or face prosecution. Bloomberg says it’s not immediately clear in what circumstances the Kremlin would invoke the law, but its adoption comes as Western governments step up efforts to curb Russia’s so-called shadow fleet carrying crude oil. 

 

Bloomberg

Bloomberg reports that countries at the United Nations are rewriting international tax rules to tax technology giants based on where their users are located rather than where they are headquartered. A draft tax proposal seen by Bloomberg could significantly increase how much tax companies pay, and where. The draft contains some protections to ensure jurisdictions where companies are headquartered continue to receive some revenue, and it proposes a cap on the share a source country can tax, and has safeguards to ensure companies are not double taxed.

 

Bloomberg

Walmart is undergoing a reshuffle in its executive ranks as two senior executives, Sam's Club chief operating officer Tom Ward, and Cedric Clark, head of store operations for Walmart US, are leaving the company following the appointment of new chief executive John Furner. Mr. Ward is retiring after nearly two decades, with his departure effective at month-end, while Mr. Clark's replacement will be announced shortly. Mr. Furner is focused on maintaining sales growth through enhanced online services and addressing the concerns of lower-income shoppers amid rising fuel costs, which have negatively impacted Walmart's stock.

 

Wall Street Journal

The Conference Board's U.S. Leading Economic Index rose 0.1% to 97.4 in April, reversing part of the 0.6% decline recorded in March as stronger stock prices and higher building permits supported the improvement. The Conference Board said the index declined 0.7% over the six months to April, an improvement on the 1% contraction seen in the previous six-month period. Senior manager Justyna Zabinska-La Monica said investment in AI infrastructure, data centers and energy production could support economic growth, although higher fuel and energy costs alongside weak hiring conditions are expected to weigh on household spending power in the months ahead.

 

Market Screener

RTT News

Supply disruptions and escalating costs due to instability in the Middle East are prompting European companies in China to revise their sourcing and production strategies. A recent survey by the EU Chamber of Commerce in China revealed that over 25% of European firms in China have altered their supply chain approaches in response to the U.S.-Israeli conflict with Iran. Notably, 81% of these companies are struggling to source Middle Eastern inputs, with two-thirds experiencing longer delivery times and increased transport costs. The automotive sector has been particularly affected, with 62% of companies reporting a decline in demand.

 

South China Morning Post

Pope Leo XIV has issued an encyclical titled "Magnifica Humanitas," which addresses the need for regulation of artificial intelligence to ensure it serves humanity rather than profit. He criticizes the "culture of power" driving AI advancements, particularly in warfare, saying: "It is not permissible to entrust irreversible, lethal decisions to AI systems." The pope called for robust legal frameworks and independent oversight to protect vulnerable populations, urging developers to prioritize ethical considerations. Taylor Black, a Microsoft AI executive and director of Catholic University of America's AI institute, said the document would prompt people “at the forefront of these tools” to ask questions such as “What does it mean to be human?”

 

Chicago Sun Times

Forbes

Los Angeles Times