—— Nvidia Unveils Most Powerful Chip; Boeing Explores Defense Asset Sales; Blackstone Founder Income Falls Below $1bn; Unilever to Split Off Ice Cream Business; Hippocratic Hits $500mn Valuation; Gucci Sales to Plunge 20%; CVC-Backed Douglas Goes IPO.
1. Nvidia Unveils Most Powerful Chip
Nvidia Corp. introduced its most advanced chip architecture yet, unveiled at the annual GPU Technology Conference, affectionately referred to as “Woodstock for AI” by analysts. CEO Jensen Huang showcased the new Blackwell computing platform, featuring the flagship B200 chip, boasting an impressive 208-billion-transistor design that surpasses the performance of Nvidia’s existing leading AI accelerators.
This new chip is poised to solidify Nvidia’s dominance over competitors, especially as businesses and nations increasingly prioritize AI development. Following the success of its predecessor, Hopper, which contributed to Nvidia’s valuation surpassing $2 trillion, the company is aiming to meet high expectations with its latest product.
Nvidia claims that Blackwell provides 2.5 times the performance of Hopper in training artificial intelligence.
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2. Boeing Explores Defense Asset Sales
Boeing Co. is reportedly considering the sale of at least two of its defense businesses as part of efforts to strengthen its balance sheet amidst significant challenges facing the aircraft manufacturer. Financial advisers have reached out to potential buyers on behalf of Boeing to assess interest in several smaller units.
Assets potentially up for sale include Boeing’s Digital Receiver Technology Inc. unit, which produces products for government intelligence and defense clients, as well as certain defense programs within its global services division.
While Boeing had previously explored divesting its Argon ST subsidiary, that process is currently on hold. Argon ST, acquired by Boeing for approximately $775 million in 2010, specializes in systems for military command and control, surveillance, and reconnaissance.
Additionally, Boeing is considering its options regarding its stake in United Launch Alliance (ULA), a joint venture for rocket launches co-owned with Lockheed Martin Corp. According to sources, the company is evaluating potential strategies for its involvement in ULA. Bloomberg News previously reported in January that ULA had garnered interest from Blue Origin LLC, owned by Jeff Bezos.
These discussions have been ongoing for about a year, preceding a major accident on January 5th that intensified scrutiny on the company.
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3. Blackstone Founder Income Falls Below $1bn
Stephen Schwarzman’s income from Blackstone Group dropped below $1 billion in 2023, marking a decline of over 30% from the previous year. This decrease was primarily attributed to a slowdown in dealmaking, which made it challenging for the world’s largest private equity group to sell investments for profit.
Schwarzman’s earnings of nearly $900 million largely stemmed from approximately $780 million in dividend payments due to his ownership of nearly 20% of Blackstone. Additionally, he earned around $120 million in “carried interest” and other compensation.
Both figures represented significant decreases from the previous year, attributed to Blackstone selling fewer assets amid rising interest rates. Schwarzman’s income had surpassed $1 billion in 2021, reaching $1.1 billion, and increased to a record $1.3 billion in 2022.
At current prices, Stephen Schwarzman’s shares in Blackstone are valued at $29 billion, while Jonathan Gray, the president of Blackstone, holds shares worth $5.2 billion.
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4. Unilever to Split Off Ice Cream Business
Unilever announced plans to split off its ice cream business and reduce its workforce by 7,500 jobs as part of new CEO Hein Schumacher’s efforts to revitalize the company’s performance.
The ice cream division, which includes popular brands like Wall’s, Magnum, and Ben & Jerry’s and contributes 16% to overall sales, is deemed to have better prospects as a standalone entity. Schumacher, who assumed the CEO role in July, faces significant pressure to reinvigorate Unilever following a period of sluggish growth.
While the ice cream business is expected to be listed independently by the end of 2025, no final decision has been made on the method of separation.
Shares in Unilever surged by as much as 5% on Tuesday, resulting in a market capitalization of £98 billion for the FTSE 100 company.
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5. Hippocratic Hits $500mn Valuation
Hippocratic AI, a healthcare startup founded just one year ago, has reached a valuation of $500 million following a successful funding round.
The Palo Alto-based company achieved this valuation after raising $53 million in funding, with venture firms General Catalyst and Premji Invest leading the round. Other notable participants include Andreessen Horowitz and SV Angel.
Hippocratic AI, established in February 2023, focuses on developing AI “agents” to support hospitals and clinics, representing a broader trend of new companies leveraging artificial intelligence to create impactful applications within specific industries.
In 2023, Microsoft, Google, and Amazon collectively sealed a series of significant deals, accounting for approximately two-thirds of the $27 billion raised by emerging artificial intelligence (AI) companies.
Source: Financial Times – Hippocratic hits $500mn valuation as tech investors seek new bets in AI
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6. Gucci Sales to Plunge 20%
Kering SA has issued a warning stating that sales at its luxury brand Gucci are anticipated to decline by around 20% in the first quarter.
This significant drop is attributed to a more pronounced decline than expected in the Asia-Pacific region, further widening the gap between Kering and its main competitors in the luxury market. Overall, Kering’s comparable sales, which also include brands like Balenciaga and Saint Laurent, are expected to decrease by approximately 10% during this period, as per an unscheduled update provided late Tuesday.
Following this announcement, Kering’s American depositary receipts experienced a 7% decline, with Paris-listed shares declining by 28% over the past year. Despite ongoing efforts to revitalize Gucci, its flagship Italian label, including appointing Sabato De Sarno as the brand’s new designer last year, Kering continues to face challenges.
In February, Kering reported a decrease in Gucci sales in the final months of the previous year, attributed to difficulties in attracting affluent customers to its high-end Double G belts and Princetown slippers.
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7. CVC-Backed Douglas Goes IPO
German perfume retailer Douglas AG has priced its initial public offering (IPO) at €26 per share, totaling €890 million ($967 million), which is at the lower end of the marketed range. The offering includes about 32.7 million new shares sold by the CVC Capital Partners-backed firm, raising approximately €850 million, while existing stockholders sold around 1.5 million shares.
This IPO values Douglas AG at approximately €2.8 billion. Trading of shares is scheduled to commence on Thursday. Additionally, the company will receive €300 million through an equity injection from existing shareholders.
Both CVC and the founding Kreke family will retain their investments in Douglas post-listing. This IPO occurs amidst a resurgence in IPO activity following two slow years, with other companies like Galderma Group AG and Golden Goose reportedly planning IPOs as well.
CVC Capital Partners acquired Douglas, a venerable retailer with origins tracing back to 1821, in 2015 for approximately €2.8 billion.
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.