Good morning. Toyota Motor Corp. plans to integrate artificial intelligence into its vehicle safety systems within five years, the head of its new Toyota Research Institute says. The effort reflects the growing role of AI and robotics in business, a wave that cuts across industries and markets.
Gill Pratt, CEO of the research group, says the institute will spend $1 billion during the next five years to develop systems that can “act and take some control from drivers to perform evasive maneuvers,” Reuters reports. The effort is “a key platform of Toyota’s efforts to produce a car which can drive automatically on highways by the 2020 Tokyo Olympics,” Reuters says. Other automakers, from Nissan Motor Co. Ltd. and Honda Motor Co. Ltd. in Japan, to Bayerische Motoren Werke AG and Volkswagen AG in Germany and Ford Motor Co. and General Motors Co. in the United States, are developing autonomous vehicles, too. It’s part of a broader movement of artificial intelligence and robotics into all industries, bridging the digital and physical world.
The evolution of AI and robotics will have an impact well beyond business, even shaping the character of urban areas, as the WSJ’s Christopher Mims writes. (More on that below.) How are AI and robotics shaping your business?
Airbus Group picks innovation lab chief as new CTO. Paul Eremenko takes the CTO role July 1, reporting to Airbus CEO Tom Enders. He will continue to run the San Jose, Calif.-based innovation center, A^3, until a successor is named, the WSJ’s Steven Norton reports. Prior to joining Airbus last year, Mr. Eremenko was the director of engineering at Google’s advanced technology and projects organization, where he led development of a modular smartphone, Project Ara.
Platforms and the new rules of strategy. The larger the network, the more data is available to customize offerings to user preferences and better match supply and demand, further increasing the platform’s value, says CIO Journal Columnist Irving Wladawsky-Berger.
Prescriptive Data develops operating system for buildings. New York real-estate firm Rudin Management Co. has launched a company called Prescriptive Data LLC that offers an operating system designed to be a building’s “brain.” The system analyzes information including elevator use, occupancy, electric demand, weather and indoor temperatures, and recommends ways in real time to decrease energy use and costs, the WSJ’s Keiko Morris reports.
Plaid funding a boost for users. Plaid Technologies Inc., whose software allows a variety of financial-technology startups to access their customers’ bank account information, has raised $44 million in a new round led by a fund at Goldman Sachs Group Inc., the WSJ’s Telis Demos reports. The new funding is a boost for apps and websites that use Plaid, which has now raised about $60 million total, as they work to ensure access to customer data held by banks. In recent months, banks and fintech firms have clashed about some of the ways that the firms access bank-customer account data, including concerns about security of passwords and surges of data traffic to banks’ websites.
As drone rules near, more debate looms. The Federal Aviation Administration this week may unveil its first rules permitting businesses to fly drones for limited uses. But most experts see the latest development as the start, rather than the culmination, of a broad, intense regulatory battle lasting many more years, the WSJ’s Andy Pasztor and Georgia Wells report. Commercial drone operations are projected to attract millions of new users annually in the U.S. alone.
IBM and Gogo join to help pilots avoid turbulence. They propose a system that relays evidence of turbulence picked up by aircraft sensors to Watson Internet of Things computers, along with the plane’s location, the WSJ’s Rachael King explains. The IBM system would combine the in-flight alerts with weather data such as wind speeds to evaluate the severity of potential turbulence. If it senses a dangerous situation, it will send an alert to reroute around the hazardous conditions.
Driverless cars to fuel suburban Sprawl. Shared self-driving cars will have taken so many vehicles off the road—up to 80% of them, according to one Massachusetts Institute of Technology study—that you’re either getting to work in record time or traveling farther in the same time, to a new class of exurbs, says the WSJ’s Christopher Mims.
U.S. attorney says there is no bigger issue than cybersecurity. “The best policing happens at the companies themselves. No regulator and no outside consultant and no U.S. attorney is going to do the job for you,” Preet Bharara, U.S. attorney for the Southern District of New York, tells the WSJ’s Rebecca Blumenstein. “What has been said to me… is that what matters to folks is when people see that their jobs are on the line.
Whitman and Quattrone have no love lost. Animosity between Silicon Valley heavyweights Meg Whitman and Frank Quattrone is on stark display in recently released court papers that provide a rare behind-the-scenes look at the cutthroat world of technology takeovers, the WSJ’s Liz Hoffman and Maureen Farrell report. Simmering tension between Ms. Whitman, now the chief executive of Hewlett Packard Enterprise Co., and Mr. Quattrone, one of Silicon Valley’s top investment bankers, erupted over Hewlett Packard’s purchase of Aruba Networks Inc. last year. Ms. Whitman refused to negotiate with Mr. Quattrone’s firm, Qatalyst Partners LP, which was advising Aruba, and insisted another bank be brought in, according to emails a Delaware court made public.
Blockchain company’s smart contracts were dumb. The recent hack of a fund that uses the Ethereum, a variation of bitcoin, is raising some questions around smart contracts, coding and the law, Bloomberg’s Matt Levine writes.
Signs point to recession. Gut-wrenching gyrations in financial markets early in the year helped summon the specter of a new recession. Now, warning signs are coming mostly from the U.S. economy itself. Hiring is slowing, auto sales are slipping and business investment is dropping. America’s factories remain weak and corporate profits are under pressure. All are classic signs of an economic downturn, and forecasters have certainly noticed. In a WSJ survey this month, economists pegged the probability of a recession starting within the next year at 21%, up from just 10% a year earlier. Some economists think the risk is even higher.
IPOs are dead; long live IPOs. For investors, 2016 is turning out to be a banner year for IPOs. For bankers, not so much, Spencer Jakab writes for Ahead of the Tape. Market turbulence has made it hard for companies to go public, with just 31 IPOs so far this year. That makes 2016 the quietest year for new stock offerings since the also turbulent year of 2009. The pipeline for the rest of the year looks pretty thin as well. But where the IPO market is weak on numbers, it has been strong on performance. Tracking firm IPOScoop says the total return of IPOs this year is more than 24%, with 22 winners and only eight decliners. One was unchanged. This fits with history. In years when there are lots of IPOs, the bankers feast on fees but investors end up nursing losses.
Boeing nears Russian 747 lifeline. Boeing Co. is nearing a $4 billion deal with Russia’s largest air-freight company that would help extend the life of the iconic, hump-nosed 747 jumbo jet amid waning demand for four-engine aircraft, people close to the transaction told Bloomberg. The U.S. planemaker is in advanced talks with AirBridgeCargo Airlines and its Moscow-based parent, Volga-Dnepr Group, to convert a year-old commitment into more than 10 firm orders for 747-8 freighters, two of the people said. The agreement could be announced as soon as next month.
