—— Amazon to Close 8 Cashierless Stores; Coinbase Acquires One River; Amazon Halts Second HQ Construction; UK Builder Vistry Cuts Hundreds of Jobs; AI Startup Raises $675M; Over Half of U.S. Mortgages Below 4%; VW Brand to Build $2B Plant
1. Amazon to Close 8 Cashierless Stores
Amazon.com Inc. spokesperson Jessica Martin said in an email statement that starting April 1, the company will close eight Amazon Go cashierless stores in New York, San Francisco, and Seattle.
Martin stated that the company will continue to evaluate the viability of Amazon Go stores and optimize their locations.
Amazon opened its first cashierless store in Seattle in 2016, offering sandwiches, salads, and snacks targeted at busy professionals.
However, with the rise of remote work during the pandemic, Amazon Go stores became one of the casualties.
In 2017, Amazon acquired Whole Foods for $13 billion in a bid to expand into the grocery retail sector.
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2. Coinbase Acquires One River
Amid a prolonged crypto winter, trading volumes on the Coinbase Global platform have declined significantly. In response, the company plans to acquire crypto asset manager One River Digital (ORD), which serves institutional investors.
ORD was founded by macro trader Eric Peters as a division of his hedge fund.
ORD’s client base has longer investment horizons and avoids the volatility associated with retail traders.
Greg Tusar, Head of Institutional Products at Coinbase, stated that the company aims to become a premier wealth management platform during the market downturn.
In 2020, ORD was one of the largest institutional holders of Bitcoin. During its 2021 funding round, Goldman Sachs, Coinbase, and Liberty Mutual participated, valuing the firm at $186 million.
Former U.S. SEC officials predict further consolidation in the crypto industry.
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3. Amazon Halts Second HQ Construction
John Schoettler, Head of Amazon’s real estate division, said in a statement to Bloomberg that the company will pause construction on the second phase of its Washington, D.C.-area headquarters, known as HQ2.
However, Amazon will continue to develop facilities in Arlington, Virginia. The company expects to invest a total of $2.5 billion in the area by 2030 and hire 25,000 employees.
Construction of the first phase of HQ2 is nearly complete. More than 8,000 Amazon employees will gradually move into two newly built office towers totaling 2.1 million square feet, located near Washington National Airport and the Pentagon.
The halted second phase includes three office buildings and a 107-meter-tall conference center.
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4. UK Builder Vistry Cuts Hundreds of Jobs
Sources report that London-listed builder Vistry Group Plc plans to cut around 200 jobs, citing a cooling housing market caused by high mortgage rates and declining home prices.
Other UK builders have also warned of a worsening industry outlook.
This week, Persimmon Plc said it expects to sell fewer than 9,000 homes this year, down from 15,000 last year. Taylor Wimpey Plc also announced layoffs.
The good news: Persimmon, Taylor Wimpey, and Barratt Developments all reported an uptick in off-market transactions early this year.
Vistry currently employs around 5,000 people.
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5. AI Startup Raises $675M
Inflection AI, a startup founded by Mustafa Suleyman and Reid Hoffman, is looking to raise $675 million to capitalize on the surge in interest around artificial intelligence. The company aims to use the funds to develop advanced software capable of writing and drawing.
Inflection has yet to release a product. Last year, it raised $225 million in its first funding round.
OpenAI’s ChatGPT has recently ignited investor enthusiasm for generative AI, prompting many startups to seek funding.
Mustafa left Google in early 2022 and had previously co-founded DeepMind with two partners. Google acquired DeepMind in 2014 for £400 million.
Inflection aims to build a browser-based intelligent AI assistant.
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6. Over Half of U.S. Mortgages Below 4%
According to new data from Black Knight, over 40% of U.S. mortgages were originated in 2020 or 2021—good news for homeowners who locked in historically low rates, but a challenge for the Federal Reserve’s inflation-fighting efforts.
About 25% of all mortgages were issued in 2021, when the average 30-year fixed rate was just 2.8%. Another 18% originated in 2020.
Although mortgage rates now approach 7%, many U.S. homeowners are insulated from rising costs because they’ve locked in lower rates, limiting the impact on their spending power.
Meanwhile, only around 5% of U.S. mortgage holders now have floating-rate loans, compared to 40% in 2006, meaning fewer households are affected by rising rates.
Most U.S. homeowners pay mortgage rates well below today’s 7%, cushioning their spending.
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7. VW Brand to Build $2B Plant
Scout Motors, an electric truck and SUV brand backed by Volkswagen, plans to build its first production plant in South Carolina at a cost of $2 billion.
According to a statement from Scout, the plant is expected to be completed by 2026 with a maximum annual capacity of 200,000 EVs and 4,000 employees. It will be located about 20 miles north of Columbia.
Scout’s vehicles will directly compete with Ford’s Bronco, Jeep’s Wrangler, and Rivian’s RS1 electric SUV.
Last year, Volkswagen acquired Navistar and Scout, officially relaunching the brand.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.