Meta commits another $150 million to its Oversight Board

Meta has committed to keeping its Oversight Board running by providing ongoing financial support. The company has pledged to fund the board’s operations with a contribution of an additional $150 million. Meta previously earmarked $130 million for the board’s trust when it was set up in 2019.

The Oversight Board says the money, which is irrevocable under the terms of the trust, can only be used to fund, manage and oversee its operations. “By making this ongoing financial commitment, Meta has issued a vote of confidence in the work of the board and its efforts to apply Facebook and Instagram content standards in a manner that protects freedom of expression and pertinent human rights standards,” Oversight Board Trust chairperson Stephen Neal said.

The Oversight Board reviews certain content moderation decisions made by Facebook and Instagram and provides recommendations to Meta. Through the lens of human rights standards, it also assesses Meta’s policies and how it enforces them. The board says it has received more than a million appeals from users against moderation decisions. To date, it has issued 25 binding decisions on cases and made 118 policy suggestions, while asking many questions of Meta’s practices.

The board started making decisions on cases in January 2021 and it wasn’t long before a major case dropped into its lap: Meta’s decision to suspend Donald Trump indefinitely from its platforms after the events of January 6th, 2021. The board ultimately determined that Meta was “justified” in blocking Trump, but argued that its reasoning for an indefinite ban meant that suspending Trump for an indeterminate period of time was not within the company’s remit. As such, Meta limited the suspension to two years.

The Oversight Board has had an impact on other Meta moderation decisions and policies to the point where the company said it could not keep up with all the recommendations. Among other things, Meta has added an exception for satire to its community standards, clarified its rules on hate speech and beefed up its anti-doxxing policies. Meanwhile, the board has been critical of Meta on other fronts, such as its lack of transparency over VIP moderation rules.

250,000 car deliveries in one quarter can’t save Tesla from dwindling revenue

The supply chain issues that have wracked the rest of the automotive industry for more than a year appear to have finally caught up with Tesla. The EV automaker announced on Wednesday’s Q2 investors report that its automotive revenue has declined by more than 13 percent following last quarter’s record-breaking mark despite ending the quarter with “the highest vehicle production month” in company history. 

Per the company, Tesla produced 258,580 vehicles last quarter and delivered 201,304 of them. During last quarter’s investor call, CEO Elon Musk estimated that the company could increase its annual deliveries by 60 percent in 2022. To date, the company has delivered 564,743 vehicles and would need to sell another 935,257 of them by year’s end to meet that goal. 

This could prove challenging given that the company produced nearly 18 percent fewer vehicles this quarter than last (though still up 27 percent year over year). COVID-related lockdowns shuttered the Shanghai Gigafactory for most of Q2, though ramping production at the newer Austin and Berlin-Brandenburg plants have helped offset the closure. Austin has begun producing vehicles with the company’s new 4680 battery cells and the Berlin Gigafactory notched a production rate of more than a thousand vehicles in a single week during the last three months. 

“It is worth emphasizing that we have enough 2170 cells to satisfy all vehicle production or the remainder of the year,” Musk said. Tesla had generally managed to avoid the supply chain woes that have hamstrung the automotive industry since the start of the pandemic — until now. The MSRP of a Model Y long-range currently sits just under $66,000, that’s 30 percent higher than it cost in 2021. Tesla is continuing to focus on “production readiness” for its long delayed Cybertruck, Musk noted during the call, with production starting by “middle of next year.”

The company was sure to point out that its total revenue grew 42 percent year over year to $16.9 billion, operating income had improved year over year to $2.5 billion (with an impressive 14.6 percent operating margin) and is currently sitting atop a $18.9 billion pile of cash.

This is thanks in large part to Tesla’s liquidating 75 percent of its Bitcoin holdings (worth $936 million) over the past three months. The company invested $1.5 billion in the digital pseudo-currency in February 2021 and sold off a 10 percent stake a couple months later. Tesla’s backing of Bitcoin, much as with Musk’s pet Dogecoin currency, helped to further mainstream the crypto schemes. Musk reportedly had “a super bad feeling about the economy” in June. “We have not sold any of our Dogecoin,” Musk said.

Not all Netflix shows will be streamable on the ad-supported tier

When Netflix’s cheaper ad-supported tier launches next year, subscribers may find themselves unable to access some of the service’s titles available on its regular plan. As Deadline notes, Netflix co-CEO and Chief Content Officer Ted Sarandos has admitted during the company’s most recent earnings call that the upcoming subscription option will not include all of its licensed content at launch. It will be missing shows and movies from both US and international studios and distributors, unless the company can successfully (and quickly) convince them to change the deal they originally agreed to. 

Netflix is in talks with studios to amend their deals and be able to make their shows available for streaming alongside ads. Based on a previous Wall Street Journal report, Netflix is renegotiating its deals with Warner Bros. (the studio behind You), Universal (the producer of Russian Doll) and Sony Pictures Television (producer of Cobra Kai). The service will reportedly have to renegotiate the terms for some of the older shows it carries, as well, including Breaking Bad

Sarandos said during the earnings call:

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported. There’s some things that don’t and we’re in conversations with the studios on, but if we launched the product today, members in the ad-tier would have a great experience. We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business.”

In the same call, Netflix also admitted that it lost nearly 1 million subscribers in the second quarter of 2022. It still turned a $1.44 billion net profit and expects to add a net 1 million subscribers in the next quarter, but it’s hoping that some of the measures it’s taking will help it grow its userbase yet again. The ad-supporter tier it’s launching with Microsoft early next year could help Netflix grow in markets where there’s strong ad spending. 

Sony completes $3.6 billion deal to buy Bungie

The developer behind Destiny is now a part of the Sony universe. Sony Interactive Entertainment officially closed on a $3.6 billion deal today to buy the independent game studio and publisher Bungie, according to tweets from both Bungie and PlayStation…

Panasonic is building the world’s largest EV battery factory in Kansas

Panasonic announced on Wednesday that it’s inked a $4 billion investment deal with the state of Kansas to build and operate the world’s largest battery cell production facility. The company has already identified a site near the city of De Soto, at a former ammunition factory.

“As the largest private investment in Kansas history and one of the largest EV battery manufacturing plants of its kind in the country, this project will be transformative for our state’s economy, providing in total 8,000 high-quality jobs that will help more Kansans create better lives for themselves and their children,” Kansas Governor Laura Kelly, a Democrat, said during Wednesday’s press conference.

The plant will produce high-capacity cells for Tesla, according to Nikkei Asia. Panasonic already jointly operates the Reno, Nevada Gigafactory with the automaker. Tesla opened a third Gigafactory, in Austin, this past April. This project is expected to produce 4,000 permanent jobs at the factory as well as 16,500 construction jobs.

Despite the global economic shock and supply chain shortages instigated by the COVID-19 pandemic, Tesla saw its vehicle deliveries jump nearly 90 percent between 2020 and 2021. The company had begun developing a proprietary line of batteries in 2019 and has been routinely snapping up exclusive deals with lithium suppliers.

Similarly, GM and Ford have made sizable investments in both battery and EV production facilities, in recent years. GM is spending $7 billion in Michigan alone, part of which is going towards a $2.4 billion battery and EV facility outside Lansing, while Ford has put up a whopping $29 billion towards its electrification and autonomous technology commitments

Netflix partners with Microsoft for upcoming ad-supported subscription tier

Netflix has found a partner for its upcoming ad-supported tier. On Wednesday, the company announced it plans to work with Microsoft on the effort. In a blog post published by Microsoft, the tech giant said it would provide Netflix with technological and sales expertise. 

As recently as last month, The Wall Street Journal suggested Google and Comcast were among the leading candidates to help Netflix build out an ad-supported tier. On Wednesday, Netflix said it selected Microsoft for the tech giant’s “proven ability” to support its customers. “Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members,” said Netflix Chief Operating Officer Greg Peters. Not mentioned is the fact that Microsoft doesn’t operate a competing streaming service. 

Netflix co-CEO Reed Hasting first revealed the company was exploring cheaper plans this past April. The admission came after Netflix announced that it had lost 200,000 subscribers in the first quarter of 2022. At the time, Hastings said the company planned to finalize the details of its plans “over the next year or two.” Netflix is scheduled to announce its second-quarter earnings on Tuesday. According to CNBC, the company recently warned Wall Street it may have lost as many as two million subscribers over the past three months. 

Peloton gives up on building its own products after just three years

Peloton will no longer build its own connected fitness products, as it’s moving entirely to third-party manufacturing. It said in a statement that it’s “exiting all owned-manufacturing operations” to simplify its supply chain and cut costs. “We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility,” Peloton CEO Barry McCarthy said. “Partnering with market-leading third party suppliers, Peloton will be able to focus on what we do best — using technology and content to help our 7 million members become the best versions of themselves.”

The company is expanding its long-existing partnership with Taiwanese manufacturer Rexon, which will be the primary builder of Bike and Tread devices. Peloton says it will suspend operations at Tonic Fitness for the rest of the year. It bought that company in 2019 to bring some manufacturing in house.

Things haven’t exactly been going swimmingly over at Peloton. In January, then-CEO John Foley said the company was “resetting our production levels for sustainable growth” following reports it was putting all production on hold. It was suggested that Peloton had thousands of products sitting in warehouses and on cargo ships amid decreased demand. The following month, Peloton brought in McCarthy as CEO and laid off around 2,800 corporate employees, equivalent to 20 percent of the total workforce.

After the pandemic-driven boom, when many people were buying Peloton gear to help them work out at home, business took a significant hit. Peloton posted a net loss of $757.1 million for the first three months of 2022 on revenue of $964 million, compared with revenue of $1.262 billion and a loss of $8.6 million a year earlier. It attributed the diminishing returns to a significant increase in operating expenses (which represented 95.4 percent of total revenue for the quarter) and having to manage its stockpile of products, which it believed it would sell eventually.

In April, Peloton cut the prices of some products to lower the barrier to entry while announcing plans to increase subscription fees in the US and Canada for the first time. The company now has a rental program for the original Peloton Bike. It costs $89 per month and an All-Access Membership is included. There’s a $150 delivery fee, though you can cancel at any time and there’s free pick-up. Customers have the option to buy the device outright after 12 months. Meanwhile, in May, Peloton teased its first rowing machine.

Rivian reportedly plans to lay off around five percent of its workforce

Electric truck maker Rivian is reportedly planning to lay off hundreds of workers. While the company hasn’t made a firm decision on mass job cuts, according to Bloomberg, it may shed around five percent of the workforce. With a headcount of more than 14,000, that equates to around 700 employees. Layoffs may be announced in the coming weeks, the report suggests. Rivian declined to comment to Engadget.

The job cuts would primarily be for non-manufacturing positions in areas where Rivian has expanded too quickly. Teams with duplicate functions are said to be among those the company has targeted. The total number of employees at Rivian has more or less doubled over the last year as the automaker increased production.

The automotive industry has been hit hard by supply chain issues and the economic climate, and it seems Rivian is no exception. The company still expects to build 25,000 EVs this year despite production difficulties. Rivian eventually aims to manufacture 600,000 vehicles per year between its existing plant in Normal, Illinois and a second planned factory in Georgia that’s expected to open in 2024.

The company has a backlog of tens of thousands of EV orders. It will have to juggle those with the 100,000 delivery vehicles it will build for Amazon by the end of the decade. As such, bolstering production while streamlining operations elsewhere seems a logical move.

The news follows a recent report noting that Rivian hired dozens of former Tesla employees in recent months, according to LinkedIn data. It was reported in late June that Tesla cut around 200 people from its Autopilot team after CEO Elon Musk announced plans to reduce the company’s salaried workforce by 10 percent. Musk told employees earlier that month he had a “super bad feeling” about the state of the economy and for them to expect layoffs.