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U.S. electrical systems are struggling to keep up with the power needs of AI technology, leading data center businesses to bypass utilities and seek alternative power sources. Layers of regulations, permitting processes, and legal fights have slowed new power projects, posing a threat to profits for traditional power companies. The delays have prompted data center developer Aligned to pursue power supplies independently. Power companies also face challenges in meeting the electricity needs of companies supporting AI technology. Slow regulatory processes and the demand for renewable energy further hinder the expansion of regulated power utilities. However, some power companies hope that the surge in demand by big technology companies will help their own growth.

 

Reuters

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Toronto-Dominion Bank is facing shareholder questions and frustration from managers due to the lack of an heir apparent. The bank's annual shareholders meeting comes as it deals with an investigation into its anti-money-laundering controls. The uncertainty surrounding the future leadership of the bank has exacerbated frustrations among senior executives. The bank's attempt to acquire First Horizon was called off, leaving its U.S. growth strategy in limbo. With no clear successor lined up, the bank is under pressure to satisfy investors and employees. The stock has fallen almost 9% this year. Leo Salom and Riaz Ahmed are seen as potential CEO candidates, but the anti-money-laundering probe and their age could impact their chances. Ray Chun is another contender, having been named to run the Canadian personal-banking business. The succession question will be top of mind for the bank's new chair, Alan MacGibbon. Despite the uncertainty, some market watchers see upside in Toronto-Dominion's shares.

 

Bloomberg

Microsoft's $13bn investment in OpenAI could potentially face an EU antitrust investigation. Regulators are considering the case. The European Union antitrust regulator has decided not to investigate the partnership under EU merger rules, but Microsoft may still face an antitrust investigation. The investigation would focus on whether the partnership restricts competition within the EU market or if Microsoft's market power distorts the market through certain practices. The European Commission is leaning towards the latter angle. No decision has been made yet, as the EU competition enforcer is still gathering evidence. Microsoft has a non-voting position on the OpenAI board and claims to not own any portion of the ChatGPT maker. The Commission is checking whether Microsoft's investment in OpenAI is reviewable under the EU Merger Regulation. A spokesperson stated that the Commission needs to conclude that there has been a change of control on a lasting basis to look into potential competition concerns.

 

Reuters

U.S. banking regulators are planning to revive a proposal that would require big banks to defer executive compensation and claw back more of their bonuses if losses pile up. Six agencies, including the Federal Deposit Insurance Corp (FDIC) and the Office of the Comptroller of the Currency (OCC), are involved in developing the plan.

 

Reuters

Nike plans to lay off 740 employees at its Beavertown, Oregon headquarters before June 28th, the company has told state officials. In a notice mandated by the Worker Adjustment and Retraining Notification Act, the company said it "will be permanently reducing its workforce at its World Headquarters" in a "second phase of impacts". The reductions are part of a three-year plan to cut $2bn in costs Nike announced in December.

 

USA Today

The Oregonian

Banks must be cautious about the risks associated with using artificial intelligence (AI) and machine learning (ML) in their operations, according to Bank of Spain Governor Pablo Hernandez de Cos, who chairs the international Basel Committee on Banking Supervision. The use of AI and ML in banking raises important challenges for financial stability, and if left unchecked, these models could potentially amplify future banking crises, de Cos said. Digital innovation will further increase financial interconnections, necessitating collaboration among central banks and regulators to establish appropriate regulations. Banks need to anticipate and manage the risks and challenges posed by AI and ML in their day-to-day risk management and governance arrangements. The Basel Committee will soon release a comprehensive report on the digitalization of finance and its implications for regulation and supervision.

 

Reuters

Chinese government-linked hackers have infiltrated U.S. critical infrastructure and are waiting for the right moment to cause significant damage, according to FBI Director Christopher Wray. The hacking campaign, known as Volt Typhoon, has targeted American companies in sectors such as telecommunications, energy, and water, with a particular focus on pipeline operators. Wray expressed concern over China's ability to disrupt U.S. infrastructure and induce panic. He also highlighted the difficulty in determining the intent behind the cyber pre-positioning.

 

The Guardian

The House has passed legislation that would ban TikTok in the United States if its China-based owner, ByteDance Ltd., doesn't sell its stake within a year. The bill, which fast-tracked the ban after an earlier version stalled in the Senate, reflects concerns about national security and Chinese threats. TikTok has lobbied against the legislation, but lawmakers are worried about Chinese authorities accessing American user data. The company has indicated it would likely go to court to block the law if it passes. The bill's quick path through Congress is extraordinary, as lawmakers have historically taken a hands-off approach to tech regulation. TikTok has seen success in previous legal fights over its operations in the U.S. Since mid-March, TikTok has spent $5m on TV ads opposing the legislation. Some lawmakers have received profanity-laced calls from TikTok users. The ban bill has faced criticism for being too restrictive and threatening free speech. The legislation's impact on content creators and the U.S. economy is a concern.

 

Los Angeles Times

BlackRock, the world's largest asset manager, has spent nearly $800,000 on security for its CEO, Larry Fink. The company has faced a backlash over its ESG investment push but also for its perceived lack of action on decarbonisation, prompting the increased security measures. The expenses included $564,000 for upgrading security systems at Fink's home and $217,000 for bodyguards.

 

Financial Times

The Daily Telegraph

A Florida jury has ruled that Johnson & Johnson's New Tab baby powder talc product did not cause the ovarian cancer of a Florida woman who died in 2019. The lawsuit was brought by family members of Patricia Matthey, who used Johnson's baby powder daily for over 50 years. Johnson & Johnson's Worldwide Vice President of Litigation, Erik Haas, stated that the jury's decision vindicates the company and aligns with decades of scientific research. However, the Matthey family's attorney, Leigh O'Dell, maintains that there is a link between genital talc use and ovarian cancer. The family alleged that Johnson & Johnson knew about the potential contamination of its talc products with carcinogenic asbestos fibers. Johnson & Johnson faces over 50,000 lawsuits related to talc, with most involving women with ovarian cancer. The company has attempted to reach a settlement through bankruptcy but has been unsuccessful so far. Trials in talc cases have had mixed outcomes, with some major plaintiff wins. Johnson & Johnson has settled some cases involving plaintiffs with mesothelioma.

 

Reuters

The United Auto Workers (UAW) union has achieved a significant victory at a Volkswagen plant in Tennessee, winning 73% of the vote. This win marks the UAW's first success in a Southern assembly plant owned by a foreign automaker. The UAW hopes to build on this success and expand its presence in the South, which is the least unionized part of the country. However, the union is likely to face a tougher challenge in representing workers at two Mercedes-Benz plants in Alabama. The UAW has accused Mercedes of violating labor laws with anti-union tactics. President Joe Biden congratulated the UAW on its win and praised the role of unions in raising wages and building the middle class. The UAW's win is seen as demonstrating that organizing in the South is possible and challenges negative perceptions about unionization in the region.

 

U.S. News

A congressional investigation has revealed that Wall Street used billions of dollars of American retirement savings and other investments to purchase shares in index funds that included several blacklisted Chinese companies. The probe, conducted by a bipartisan House committee, focused on asset manager BlackRock and index provider MSCI. The House Select Committee on the Chinese Communist Party found that American financial institutions funneled $6.5bn to 63 Chinese companies flagged by the U.S. through investments in index funds. The investigation highlights the controversial use of American retirement savings in blacklisted Chinese companies, further straining the already tense relationship between the U.S. and China. BlackRock and MSCI have not yet commented on the report.

 

Reuters

Canada will start applying a proposed tax on the world’s biggest technology companies this year. The tax would be a 3% levy on the digital services revenue a company makes from Canadian users above C$20m ($14.5m) in a calendar year. It would apply only to companies with annual worldwide revenue of more than about C$1.1bn. Alphabet and Meta Platforms are among those set to be impacted. Canada’s parliamentary budget officer has estimated the tax will raise about C$7.2bn over five fiscal years. Finance Minister Chrystia Freeland has said Canada would not enact the tax if a global tax treaty through the Organization for Economic Co-operation and Development is implemented, but so far that treaty has not been ratified by the U.S. "In view of consecutive delays internationally in implementing the multilateral treaty, Canada cannot continue to wait before taking action," Freeland’s department said in the budget. U.S. lawmakers and government officials view the tax as unfair to American firms, and have threatened to retaliate if Canada moves forward with it.

 

CPA Practice Advisor

The Net-Zero Asset Owner Alliance, a group of leading asset owners managing $9.5trn in assets, has introduced new guidance for private assets and plans to improve assessment of emissions tied to sovereign debt holdings. The alliance aims to halve emissions by 2030 and achieve net-zero emissions by mid-century. Members are asked to include private debt and equity in their emissions reductions strategy to prevent high-emitting companies from operating without oversight. The focus will be on engaging with fund managers to ensure they buy climate-compliant assets. The alliance also wants members to assess and report emissions associated with sovereign bond holdings. "This asset class is really important ... We need to understand how with governments we as an asset owner alliance can work and engage," said Gunther Thallinger, Chair of the Net-Zero Asset Owner Alliance and Allianz board member.

 

Reuters

A group of 160 financial companies is urging governments to agree on a treaty to end plastic pollution. The companies, including Legal & General Investment Management and CDPQ, are calling for a policy framework with binding rules to address the estimated 400 million metric tons of waste produced annually. They want the treaty to set an objective for all public and private finance to be consistent with eliminating plastic pollution, similar to the Paris climate agreement. The group also wants companies to assess and disclose plastic-related risks, clearer policies and targets from governments, and increased private investment to combat plastic pollution. The support for the treaty was welcomed by Plastic Collective, an NGO that designed the world's first plastic waste reduction bond. The World Bank has already issued a $100m bond to finance plastic-reduction projects in Ghana and Indonesia.

 

Reuters

Trader Joe's has confirmed that its Infinite Herbs-brand organic basil is connected to a multistate salmonella outbreak. The Food and Drug Administration and the Centers for Disease Control and Prevention are investigating the outbreak, which is linked to products sold between February 1st and April 6th. A dozen people from seven states were infected, with seven cases reporting illness after purchasing the Trader Joe's basil.

 

New Jersey Herald