crushing – LSD News

‘Disrupted or dead’: AI is crushing a generation of startups built before ChatGPT

LSD News Szerkesztőség — Mon, 01 Jun 2026 11:09:04 +0000

Matthias Balk | Picture Alliance | Getty Images

Five years ago, venture capitalists were pouring money into American startups selling everything from lingerie subscriptions to scheduling software, anointing them with billion-dollar valuations before most even turned a profit.

It was a frothy era for startups, fueled by a combination of cheap money and pandemic-boosted demand. But even after the Federal Reserve took some froth off by starting to raise interest rates in 2022, many founders believed that they could grow into their inflated valuations, investors told CNBC.

Then, an app called ChatGPT arrived.

“The ChatGPT moment was when people said, ‘Holy smokes, the next generation of entrepreneurs, their coding language is spoken English,'” said Samir Kaul, a partner at the venture firm Khosla Ventures, an early backer of OpenAI.

“Now you’re seeing 50 engineers do what it would’ve taken 500 engineers to do five years ago,” Kaul said. “We had to completely reshuffle how we valued these companies.”

While the shares of public software companies like Salesforce, ServiceNow and Workday got hammered this year because of the threat from artificial intelligence, a quieter reckoning has been unfolding in the private markets.

The AI boom that funneled more than $250 billion into OpenAI and Anthropic ahead of their expected mega-IPOs this year has left hundreds of startups built before ChatGPT’s arrival in 2022 stranded — effectively cut off from venture funding because of their inflated valuations and outdated technology, yet not profitable enough for the public markets.

There are 857 U.S. startups valued at $1 billion or more, the threshold for being deemed a “unicorn” company, according to PitchBook data. But nearly half of that group hasn’t raised fresh funding in the last three years, making those valuations stale, according to the private markets data firm.

Startups that last raised in 2021 are now worth 68% less on average, while those that last raised in 2022 saw a 52% decline, according to Pitchbook’s own valuation estimates.

As a result, more than 220 companies that had reached billion-dollar valuations in the venture boom are now fallen unicorns, according to PitchBook, which provided a list of the companies exclusively to CNBC. The estimates are based on factors including headcount growth and comparisons to public companies.

“A lot of those companies are pre-AI, not just in their cost structure, but also in their products,” Mercury CEO Immad Akhund told CNBC. His company, which raised $200 million in funding last month, provides banking services to a third of early-stage U.S. venture-backed firms.

“They’re definitely in a difficult spot,” he said. “All the attention’s on AI, so if you’re not an AI-first company, you need really strong numbers to raise.”

Glossier, Brooklinen, AG1

The list of fallen unicorns includes well known brands like Glossier, The Farmer’s Dog, Rothy’s, Brooklinen and Savage X Fenty, the lingerie company founded by musician Rihanna. The companies were part of a wave of direct-to-consumer firms built on the hope that digital retailers could earn software-like margins.

Also included are mainstays of podcast advertisements including the powder supplement maker AG1 and the roboadvisor pioneer Betterment, as well as the online ticket marketplace SeatGeek.

These companies came of age in an environment that rewarded growth at nose-bleed valuations based on two broad assumptions: interest rates would remain low and a startup could always be acquired for its engineering talent.

But the arrival of generative AI has redrawn the venture landscape, redirecting capital toward AI-native firms while making it impossible for many older startups to justify their previous valuations.

Hit hardest are enterprise software companies like scheduling startup Calendly, which represent the single largest category among the fallen unicorns. There are 75 software-as-a-service, or SaaS, firms appearing on PitchBook’s list, which is double the number of fintech companies, the next-biggest group.

That reflects both the enormous valuations that software startups commanded during the 2021 venture boom and the degree to which generative AI has destabilized assumptions underpinning the sector.

David Zhu, an ex-DoorDash head of engineering, said that after the “ChatGPT moment” he looked across the software landscape — from startups to medium-sized firms funded with private credit to the largest public SaaS companies — and saw a seismic shift on the horizon.

“The thesis I had was that all workflow-driven enterprise SaaS companies will be either disrupted or dead in the next decade,” Zhu told CNBC.

The Saas model, where companies embed themselves in employee workflows and often charge by the user, is especially threatened by the rise of autonomous agents. After leaving DoorDash, where he led more than 200 engineers, Zhu founded Reevo, an AI platform that automates corporate sales and marketing teams.

Companies built before generative AI are weighed down by bloated staffing models and software designed for a pre-AI world, according to Zhu, making it hard for them to transform themselves.

“Unless they make a stark, 180-degree pivot to rebuild the exact same thing from scratch, they’re going to slowly fail,” Zhu said. “What that means is that investors would rather just bet on new entrepreneurs at lower valuations rather than double down on older startups.”

‘Dominoes to fall’

Most of the 20 fallen unicorns highlighted by CNBC either didn’t respond to multiple requests for comment or declined to comment.

A spokesperson for the drone maker Skydio — estimated by PitchBook to have dropped in value from $2.5 billion to $509 million — said in a statement: “This third-party speculation is false and not based on Skydio’s operations or the exponential growth we are seeing in revenue and customers.”

An AG1 spokesperson didn’t provide a statement for this article, but after CNBC’s inquiry, Reuters reported that the supplement maker was looking to sell part or all of the company at a $2 billion valuation. That figure would include AG1’s debt, the report said.

If a company hasn’t raised funding since 2021 or 2022, its unlikely they’ll ever do so again, say investors and founders. Without access to venture funding or a plausible IPO ramp, the most likely exit for many fallen unicorns is an acquisition at a fraction of their old valuation, they say.

“When we see companies not raising, it’s a red flag,” said PitchBook analyst Andrew Akers, adding that it usually means their growth is tepid or even negative.

While some startups might’ve avoided fundraising because they are generating robust profits, that is the exception to the rule, he said.

“Underneath the surface, I think there are a lot of dominoes to fall,” Akers said.

Collapsing floor

There have been glimmers of a reset among some startups this year.

In February, Stash, the investment and savings app, was acquired by Singapore-based everything app Grab at an enterprise value of $425 million, below the roughly $660 million that investors put into the company during its lifetime.

That same month, another fintech, Step, was acquired by the YouTube star MrBeast for an undisclosed amount, leading investors to speculate that the purchase price was far below the roughly $500 million the startup raised before the deal.

“Many of these businesses just aren’t worth that much anymore, which is why you’re seeing them get acquired at steep discounts,” said Ryan Falvey of Restive Ventures, which invests in fintech firms.

Valuations have compressed by about six-fold from the 2021 peak of 50 times future revenues, meaning that a company with the same revenue is worth about 85% less in today’s market than five years ago, Falvey told CNBC.

Before the reset, a startup could often be sold to a larger technology company looking to acquire the smaller firm’s engineers for roughly $2 million per coder, according to Khosla Ventures’ Kaul. A firm with 100 engineers would be worth at least $200 million to $300 million, he said.

But that assumption, which provided a floor under startup valuations during the boom, evaporated after AI coding tools allowed far smaller teams to build products — leaving exit opportunities few and far between.

‘OpenAI, Anthropic or Google’

The result is that post-GPT startups are running laps around their older competitors, according to Falvey. He called investments made over the past three years “undoubtedly the best” his firm has made.

“We noticed by 2023 that the companies we invested in post-ChatGPT were already making more money than most of the companies we invested in before ChatGPT,” Falvey said.

Generative AI may ultimately reduce the amount of capital required to build successful software companies, challenging one of the core assumptions that fueled the venture boom of the past decade.

The shakeout is probably just beginning, as the impact of AI reverberates across the business funding ecosystem, from venture to private credit to public giants.

Older software firms, Kaul said, still rely on business models built around charging customers based on the number of employees using their products, an approach he believes AI will undermine as companies automate more white-collar work.

Software providers will need to shift toward outcome-based pricing models and AI-native infrastructure to survive, he said.

“The question I ask every time one of them presents is, why can’t OpenAI, Anthropic or Google do this?” Kaul said. “For most of them, the answer is, ‘They can.'”

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Lab-grown diamonds are crushing this African economy that was built on natural stones | Fortune

LSD News Szerkesztőség — Sun, 30 Nov 2025 03:01:40 +0000

In a village outside Botswana’s capital, Keorapetse Koko sat on an aging couch in her sparsely furnished home, stunned that a career — and an entire nation’s economy — built on diamonds had fallen so far, so fast.

For 17 years, she had earned a living cutting and polishing the gems that helped transform Botswana from one of the world’s poorest nations into one of Africa’s success stories. Diamonds were discovered in 1967, a year after independence, an abrupt change of fortune for the landlocked country.

Botswana became the world’s top diamond producer by value, and second-largest by volume after Russia. Diamonds are woven into the national identity, with local Olympic champion runner Letsile Tebogo heading a De Beers campaign celebrating how the industry funds schools and stadiums.

The stones that Koko and thousands of others dug and polished over the decades have funded Botswana’s health, education, infrastructure and more. The country risked the “resource curse” of building its economy on a single natural asset — and unlike many African nations, it was a success.

But Koko lost her job a year ago, joining many others left adrift as Africa’s trade in natural diamonds buckles under growing pressure from cheaper lab-grown diamonds mass-produced mainly in China and India.

“I have debts and I don’t know how I am going to pay them,” said the mother of two, who had survived on about $300 a month and relied on her employer for medical insurance. It had been a decent situation for a semi-skilled worker in a country where the average monthly salary is about $500. “Every month they call me asking for money. But where do I get it?”

‘Diamonds built our country’

Botswana, which has unearthed some of the world’s biggest stones, has prided itself on prudently managing its natural wealth, avoiding the corruption and fighting that have plagued many African peers. Its marketing message has been simple: Its stones are conflict-free and help fund development.

“Diamonds built our country,” said Joseph Tsimako, president of the Botswana Mine Workers Union, which represents about 10,000 workers in the nation of 2.5 million people. “Now, as the world changes, we must find a way to make sure they don’t destroy the lives of the people who helped build it.”

He warned that new U.S. tariffs under the Trump administration could worsen Botswana’s downturn, triggering staffing freezes, unpaid leave and more layoffs. The U.S. has imposed a 15% tariff on diamonds that are mined, cut and polished there.

Diamond exports, roughly 80% of Botswana’s foreign earnings and a third of government revenue, have tumbled.

Debswana, the largest local diamond producer and a joint venture between the government and mining giant De Beers, saw revenues halve last year. It has paused operations at some mines as Botswana and Angola enter talks to take over controlling stakes in De Beers’ diamond mining unit.

In September, Botswana’s national statistics agency reported a 43% drop in diamond output in the second quarter, the steepest fall in the country’s modern mining history. The World Bank expects the economy to shrink 3% this year, the second consecutive contraction.

The rise of synthetic diamonds

The global rise of synthetic diamonds has been swift. They have “given stiff competition, especially in lower-quality stones,” said Siddarth Gothi, chairman of the Botswana Diamond Manufacturers Association.

The gems emerged in the 1950s for industrial use. By the 1970s they had reached jewelry quality. Lab-grown stones now sell for up to 80% less than natural diamonds. Once making up just 1% of global sales in 2015, they have surged to nearly 20%.

Glitzy social media videos have fueled the appeal of synthetic gems made in weeks under intense heat and pressure and marketed as cheaper, conflict-free and eco-friendly alternatives to stones formed over billions of years.

Environmental groups have said natural diamond mining can drive deforestation, destroy habitats, degrade the soil and pollute the water. But environmental claims about the synthetic gems also face scrutiny, with critics noting that production remains energy-intensive, often powered by fossil fuels.

From “a marginal phenomenon,” an “unprecedented flood” of synthetics now threatens the natural diamond’s value and future, World Federation of Diamond Bourses president Yoram Dvash warned in July.

Lab-grown stones now account for most new U.S. engagement rings, he said. Natural diamond prices have fallen roughly 30% since 2022, leaving the industry at what Dvash called “a critical juncture.”

Hollywood stars, including Billie Eilish and Pamela Anderson, and Bollywood celebrities have boosted synthetic diamonds’ allure, along with Gen Z influencers.

“The new generation of youngsters getting engaged, they’ve got far more important things to spend their money on than a diamond,” said Ian Furman, founder of Naturally Diamonds, which sells natural and synthetic diamonds in neighboring South Africa. “So, it’s become so attractive to them to buy lab diamonds.”

Furman said that for every 100 diamonds his company sells, around 95 are synthetic when just five or six years ago it was overwhelmingly natural diamonds.

African producers feel the pain

The shift is felt beyond Botswana. Across southern Africa, falling production of natural diamonds and revenue have led to job cuts and financial strain.

To counter the trend, Botswana, Angola, Namibia, South Africa and Congo in June agreed to pool 1% of annual diamond revenues, translating into millions of dollars, into a global marketing push led by the Natural Diamond Council to promote natural stones. The nonprofit’s members include major mining companies such as De Beers Group and Rio Tinto, which have invested heavily in natural diamonds.

Last year, the council launched a “Real. Rare. Responsible” campaign starring actor Lily James in a bid to recast natural diamonds as unique and ethically sourced.

Kristina Buckley Kayel, the council’s managing director for North America, said restoring natural diamonds’ “desirability” is essential to protect producer economies, particularly in southern Africa.

With its diamond income no longer assured, Botswana’s government in September created a sovereign wealth fund focused on investment and diversification beyond mining, although details about its value and investors sketchy. Suddenly, the country’s elephant-heavy tourism industry and other mining options, including gold, silver and uranium, are more important than ever.

But for Koko, the laid-off diamond worker, the policy shift may have come too late.

“I was the breadwinner in a big family,” she said. “Now I don’t even know how to feed my own. Looking for another job is very difficult. The skills I learned are only relevant to the diamond industry.”

She never owned a diamond herself. Even the smallest would be a luxury beyond her means.

Global stock traders face dip-buying dilemma after crushing sell-off

LSD News Szerkesztőség — Sun, 04 Aug 2024 12:11:09 +0000

A selloff that rocked equity markets around the world is clouding the outlook for investors looking to buy stocks on the cheap, as worries over the U.S. economy and disappointing tech earnings threaten more losses ahead.

A two-day rout late last week left the S&P 500 nearly 6% from its July peak while the tech-heavy Nasdaq Composite extended losses to notch its first 10% correction from a record high since early 2022. Equities plunged in Europe and Asia as well, with Japan’s Nikkei index losing nearly 5% for the week.

The market tumble presents a dilemma as another week of trading is set to unfold. Jumping into stocks during periods of weakness has rewarded investors over the last two years, as the S&P 500 has climbed about 50% from its Oct 2022 low.

But buyers of the dip risk being steamrolled if recession fears grow following last week’s run of alarming U.S. data. The S&P 500 has fallen an average of 29% during recessions since World War Two, according to Truist Advisory Services.

Saturday’s earnings report from legendary investor Warren Buffett’s Berkshire Hathaway may also give bargain hunters pause: the conglomerate sold about half its stake in Apple and let its cash pile soar to $277 billion in the second quarter. Berkshire often lets cash build up when it can’t find whole businesses or individual stocks to buy at fair prices. “People are starting to reassess what their risks are and whether they are properly positioned.” said Mark Travis, a portfolio manager at Intrepid Capital, noting also that elevated valuations are giving investors pause. Stocks have soared this year in a rally fueled by excitement over artificial intelligence technology and a so-called Goldilocks economy where growth stayed resilient while inflation cooled. The market’s appetite for risk took a hit this past week. Concerns that the Federal Reserve may be hurting economic growth by waiting too long to cut interest rates pushed traders to dump everything from richly-valued chipmakers to shares of industrial companies and head to safe harbors such as U.S. government bonds.

Selloffs after disappointing earnings from tech-focused companies such as Amazon, Alphabet and Intel , meanwhile, exacerbated concerns that stocks may have become too richly valued.

BRIGHT SPOTS

Nevertheless, some investors believe the recent tumble is merely a pause in a strong year for markets, and are looking for the opportunity to buy.

“We’ve been looking to potentially get into some of those expensive names and frustrated we haven’t had an opportunity, and now we’re getting there,” said Lamar Villere, portfolio manager at Villere & Co.

The S&P 500 and Nasdaq are both up around 12% year-to-date even with the recent selloff. Chipmaker Nvidia, whose blistering climb became emblematic of the AI craze, is sitting on a year-to-date gain of about 117%, despite falling more than 20% from its high.

Economists have pointed to bright spots in Friday’s jobs report, including a second straight month of hefty workforce growth. Some also said that Hurricane Beryl, which slammed the Gulf Coast last month, may have skewed the statistics.

And while expectations for tech companies’ results may have been high, some of the heavyweights delivered strong earnings, including Apple and Facebook-parent Meta Platforms.

Big tech stocks “continue to have great businesses, big competitive moats. Their cash flow remains strong,” said Michael Arone, chief investment strategist at State Street Global Advisors. “Investors usually overreact in the short-term.”

‘FEAR TRADE’
Others, however, have noted that while stock valuations edged lower in the recent selloff, they remain elevated by historical standards.

The S&P 500 was trading last week at 20.8 times forward 12-month earnings estimates, down from 21.7 reached in mid-July, according to LSEG Datastream. The index’s long-term average is 15.7 times forward earnings. That could leave stocks primed for further selling if more bad news hits.

“This isn’t a Category 3 hurricane, but we are seeing how markets react to signs that the economy is normalizing after turning hot in the first half of this year,” said Art Hogan, chief market strategist at B. Riley Wealth. “Markets can find themselves overreacting and investors glom on to anything as an excuse to take profits.”

A lack of major economic data releases until the consumer price report on August 14 could keep markets on edge. Indeed, worries over economic growth have traders more spooked than they have been in months.

The Cboe Volatility index – known as Wall Street’s fear gauge – hit its highest since March 2023 on Friday as demand for options protection against a stock market selloff surged.

Meanwhile, the yield on the benchmark 10-year U.S. Treasury, which moves inversely to bond prices, sank nearly 40 basis points this week, the largest weekly fall since March 2020 as investors priced in rate cut expectations and sought shelter from future volatility.

“That’s a huge move,” said Michael Farr, president and CEO of Farr, Miller & Washington. “It certainly looks like there’s a fear trade there.

BlackRock funds are ‘crushing shareholder rights,’ says activist Boaz Weinstein

LSD News Szerkesztőség — Sat, 18 May 2024 08:10:06 +0000

Boaz Weinstein, founder and chief investment officer of Saba Capital Management, during the Bloomberg Invest event in New York, US, on Wednesday, June 7, 2023.

Jeenah Moon | Bloomberg | Getty Images

Boaz Weinstein, the hedge-fund investor on the winning side of JPMorgan Chase’s $6.2 billion, “London Whale” trading loss in 2011, is now taking on index fund giant BlackRock.

On Friday, Weinstein’s Saba Capital detailed in a presentation seen by CNBC its plans to push for change at 10 closed-end BlackRock funds that trade at a significant discount to the value of their underlying assets compared to their peers. Saba says the underperformance is a direct result of BlackRock’s management.

The hedge fund wants board control at three BlackRock funds and a minority slate at seven others. It also seeks to oust BlackRock as the manager of six of those ten funds.

“In the last three years, nine of the 10 funds that we’re even talking about have lost money for investors,” Weinstein said on CNBC’s “Squawk Box” earlier this week.

At the heart of Saba’s “Hey BlackRock” campaign is an argument around governance. Saba says in its presentation that BlackRock runs those closed-end funds the “exact opposite” way it expects companies to run themselves.

BlackRock “is talking out of both sides of its mouth” by doing this, Saba says. That’s cost retail investors $1.4 billion in discounts, by Saba’s math, on top of the management fees it charges.

BlackRock, Saba says in the deck, “considers itself a leader in governance, but is crushing shareholder rights.” At certain BlackRock funds, for example, if an investor doesn’t submit their vote in a shareholder meeting, their shares will automatically go to support BlackRock. Saba is suing to change that.

A BlackRock spokesperson called that assertion “very misleading” and said those funds “simply require that most shareholders vote affirmatively in favor.”

The index fund manager’s rebuttal, “Defend Your Fund,” describes Saba as an activist hedge fund seeking to “enrich itself.”

The problem and the solution

Closed-end funds have a finite number of shares. Investors who want to sell their positions have to find an interested buyer, which means they may not be able to sell at a price that reflects the value of a fund’s holdings.

In open-ended funds, by contrast, an investor can redeem its shares with the manager in exchange for cash. That’s how many index funds are structured, like those that track the S&P 500.

Saba says it has a solution. BlackRock should buy back shares from investors at the price they’re worth, not where they currently trade.

“Investors who want to come out come out, and those who want to stay will stay for a hundred years, if they want,” Weinstein told CNBC earlier this week.

Weinstein, who founded Saba in 2009, made a fortune two years later, when he noticed that a relatively obscure credit derivatives index was behaving abnormally. Saba began buying up the underlying derivatives that, unbeknownst to him, were being sold by JPMorgan’s Bruno Iksil. For a time, Saba took tremendous losses on the position, until Iksil’s bet turned sour on him, costing JPMorgan billions and netting Saba huge profits.

Saba said in its investor deck that the changes at BlackRock could take the form of a tender offer or a restructuring. The presentation noted that BlackRock previously cast its shares in support of a tender at another closed-end fund where an activist was pushing for similar change.

Saba is seeking shareholder approval to fire the manager at the funds the firm calls the worst-performing relative to their peers over the last three years. In total, BlackRock wants new management at six funds, including the BlackRock California Municipal Income Trust (BFZ), the BlackRock Innovation and Growth Term Trust (BIGZ) and the BlackRock Health Sciences Term Trust (BMEZ).

“BlackRock is failing as a manager by delivering subpar performance compared to relevant benchmarks and worst-in-class corporate governance,” the deck says.

If Saba were to win shareholder approval to fire BlackRock as manager at the six funds, the newly constituted boards would then run a review process over at least six months. Saba says that in addition to offering liquidity to investors, its board nominees would push for reduced fees and for other unspecified governance fixes.

A BlackRock spokesperson told CNBC that the firm has historically taken steps to improve returns at closed-end funds when necessary.

“BlackRock’s closed-end funds welcome constructive engagement with thoughtful shareholders who act in good faith with the shared goal of enhancing long-term value for all,” the spokesperson said.

Weinstein said Saba has run similar campaigns at roughly 60 closed-end funds in the past decade but has only taken over a fund’s management twice. The hedge fund sued BlackRock last year to remove that so-called “vote-stripping provision” at certain funds and filed another lawsuit earlier this year.

BlackRock has pitched shareholders via mailings and advertisements. “Your dependable, income-paying investment,” BlackRock has told investors, is under threat from Saba.

Saba plans to host a webinar for shareholders on Monday but says BlackRock has refused to provide the shareholder list for several of the funds. The BlackRock spokesperson said that it has “always acted in accordance with all applicable laws” when providing shareholder information, and that it “never blocked Saba’s access to shareholders.”

“What we want is for shareholders, which we are the largest of but not in any way the majority, to make that $1.4 billion, which can be done at the press of a button,” Weinstein told CNBC earlier this week.

WATCH: CNBC’s full interview with Saba Capital’s Boaz Weinstein

Toyota is crushing it with hybrid vehicles as Tesla’s rough start to year hits net worth of Elon Musk, who dismissed them as a ‘phase’

LSD News Szerkesztőség — Mon, 05 Feb 2024 05:46:18 +0000

Elon Musk’s Tesla is off to a difficult start in 2024, and it’s probably no surprise to Akio Toyoda. The Toyota chairman has long been skeptical of electric vehicles hype, steering his company to focus more on hybrids. That’s turned out to be a smart strategy.

Tesla shares are down about 24% year-to-date, knocking Musk off his perch as the world’s richest man, an honor now bestowed upon French luxury tycoon Bernard Arnault.

Investors did not react well to Tesla’s fourth-quarter earnings, when the EV maker warned that this year’s sales growth might be “notably lower” than last year’s—not reassuring when it cut prices in 2023 to prop up demand. In California, a key market, registrations of Teslas actually fell in the fourth quarter, the first time that’s happened there in more than three years.

Toyota, by contrast, can’t make its hybrids quickly enough, and demand for them is strong without price cuts. The Japanese giant was the world’s top-selling carmaker for the fourth year in a row in 2023, selling 11.2 million vehicles globally, a respectable 7.2% increase from the previous year.

Tesla sold 1.8 million vehicles, in comparison, jumping an impressive 38% year over year.

Hybrids over EVs

Toyoda, however, does not believe that electric vehicles will take over the world. Last month, he predicted that adoption of EVs will peak at just 30%, saying they’ll share the roads with hybrid, gas-guzzling, and hydrogen-powered cars.

Hybrids, meanwhile, have been on a tear, not just for Toyota but for other automakers as well, including Ford and Honda. From January to November in 2023, hybrids accounted for 9.3% of new light vehicle registrations, beating EVs by 1.8 percentage points, reported Reuters, citing S&P Global Mobility data, and Toyota was the biggest seller of hybrids in the U.S., with more than a third of the those registrations.

Edmunds wrote on its website in mid-December that the hybrid market share in the U.S. increased to 9.7% in November 2023, a 99% jump from the year prior, whereas the EV share increased just 25%. “The transition to full EVs has slowed, and hybrids are the more comfortable choice for the majority of Americans seeking electrified options right now,” it added.

For many consumers, hybrids have the feel-good factor of burning less fuel than normal cars—friendlier on the environment and the wallet—without the range anxiety and other doubts surrounding EVs. (Hybrids maximize efficiency by alternating from gas to battery power.) It also helps that hybrids are priced much closer to traditional cars than are EVs.

Toyota, which will report earnings on Tuesday, with analysts expecting a strong quarter, does sell EVs, but despite their rapid sales growth they make up just a sliver of its shipments.

The carmaker has taken pains to emphasize that it is not “anti-EV” but rather lets consumers choose which type of vehicle they want and offers each king. Toyoda hinted at his philosophy a few years ago when he said, “Toyota is a department store of all sorts of powertrains. It’s not right for the department store to say, ‘This is the product you should buy.’”

To be sure, Toyota has its problems, among them recent recalls and, last month, the suspended shipments of 10 vehicle models due to testing irregularities for engine certifications. And some industry observers fear the auto giant will be caught flat-footed if consumers switch the EVs faster than it expects.

But it clearly called things right with regards to hybrids, if not in the long run then certainly for now.

In 2011, Musk laughed at the electric vehicles made by Chinese rival BYD, which recently passed Tesla in global EV sales. And in 2022, Musk dismissed hybrids as a “phase,” saying it was “time to move on” from them.

But many car buyers, we now know, do not feel the same way.

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Amputees say this bionic hand startup gives them both strength and grace — they can even pick up raw eggs without crushing them

LSD News Szerkesztőség — Mon, 13 Nov 2023 13:20:23 +0000

Andrew Hitz with the Zeus hand.

Courtesy of Aether Biomedical

In 2011, Jeremy Schroeder was driving a four-wheeler near Sherwood, Ohio, when he crashed into a stop sign he hadn’t seen as the stone path suddenly turned to asphalt. The sign left a deep gash in Schroeder’s arm; he was rapidly losing blood.

Shroeder, who was 30 at the time, waited more than an hour for emergency medical services to arrive before he was finally airlifted to a nearby hospital.

When he woke up in a room across from his anxious wife, Schroeder was missing a hand.

“She goes, ‘I got bad news,'” he told CNBC in an interview, recalling the conversation.

Schroeder’s left arm was amputated around five inches below his elbow. He has four kids and manages a small farm where he drives tractors, harvests crops and cares for animals, so he was determined not to let his accident slow him down.

Now, 12 years later, Schroeder wears a bionic hand designed by the startup Aether Biomedical, and it’s business as usual for him. Aether’s hand, called the Zeus, can lift up to 77 pounds and switch between 12 different customizable grip patterns in real time. Schroeder, who is now an ambassador for the company, said he uses it for “everything,” whether it’s carrying groceries, driving his truck or caring for his kids.

Founded in 2018, Aether is based in Poland with U.S. headquarters in Chicago. Aether works with upper limb amputees, and anyone with an amputation level between the wrist and the shoulder can use its Zeus hand. Once patients are fitted with a prosthetic socket for their arm by a doctor, Aether’s device can fasten on the end.

More than 200 patients are using Aether’s Zeus hand, and like other bionic hands, it works by translating the electrical signals in the arm muscles. When a patient thinks of a grip like holding a bottle or pinching a needle, Aether’s sensors detect these electrical signals and its software converts them into actions.

“Just about anything you can think, you can do,” Schroeder said. “It’s really neat what some people can do with it.”

Jeremy Schroeder with the Zeus hand.

Courtesy of Aether Biomedical

Aether CEO Dhruv Agrawal said the Zeus hand is the strongest bionic hand on the market, and it’s also the only hand that can be remotely configured through an app, which is a big selling point for users.

It’s common for patients to need adjustments to their bionic devices, especially as they are first learning to use them, and it usually requires an in-person visit to a doctor’s office. But patients who use Aether’s device can have their clinician log on to the company’s cloud-based platform and reconfigure grip patterns and make other adjustments remotely.

Schroeder said this feature often saves him more than two hours of driving.

Aether also takes a unique approach to larger repairs.

The Zeus hand is made up of seven modules that can be easily replaced at a doctor’s office, said Sarra Mullen, head of U.S. operations at Aether. She said other bionic hands have to be sent back to the manufacturers to be repaired, which can leave patients stuck without their devices for extended periods.

“Imagine not having your hand for weeks, months at a time,” Mullen told CNBC in an interview. “We have this ability now to keep the device on the patient at all times, and that truly is remarkable.”

Aether’s Zeus hand is approved by the U.S. Food and Drug Administration, and it’s covered by all major insurance payers. The company generates revenue, Mullen said, so its main focus is on scaling access to its technology.

On Monday, Aether announced it closed a $5.8 million funding round led by J2 Ventures and Story Ventures. Agrawal said the funding will mainly be used to improve the company’s manufacturing process. Aether currently has a backlog of devices it needs to ship out, he added.

In the U.S. alone, there are between 800,000 and 1 million estimated upper limb amputees, so there is plenty of room for Aether to grow. The challenge, Agrawal said, is winning over patients who have never wanted a bionic hand or who have been discouraged by past devices they’ve tried.

“If you used a device many years ago and didn’t like it, that doesn’t mean that you have to give up on it today,” he told CNBC in an interview. “Technology is improving.”

Given Aether’s presence in Poland, Agrawal said the company is also working to get its devices to people who have been injured because of the war in Ukraine. He said Aether is sending its first team to the region in a few weeks, and the company is expecting to fit between 300 to 500 people with the Zeus hand over the next year and a half.

Patients need to practice

The Zeus hand.

Courtesy of Aether Biomedical

If patients have never used a bionic hand before, Mullen said, it usually takes between four to six weeks to learn how to use Aether’s comfortably. She said patients first generally see a prosthetist, which is the kind of doctor that fits patients with artificial limbs. They get set up with the hand, and then go to occupational therapy to learn to use it.

It takes time and practice to understand how to operate the different grip patterns, Mullen said. But Andrew Hitz, a 61-year-old who lives about 40 miles south of Dallas, mastered the Zeus hand in just 10 minutes.

Hitz had an elective amputation below the elbow of his left arm in February of 2019 after suffering a serious accident on a side-by-side vehicle years earlier. He had tried to save his hand through a number of different procedures, and his surgeon eventually told him that he was out of options.

“Actually, it was the best thing that I ever did,” Hitz told CNBC in an interview. “I wish I would have jumped to the conclusion of having it taken off years prior, saving me some of the agony and pain of all the surgeries that I went through.”

Hitz has used other bionic hands before, and he said many of them are sitting on his shelf and collecting dust. He happened to stumble across Aether at a trade show in Dallas this year where tried out the Zeus hand. He said using it for the first time was like a “ray of bright sunshine.”

“Literally in 10 minutes I was picking up little blocks that this previous hand that I had for almost a year and a half I just never mastered,” he said.

Aether gave Hitz a hand for free, and he is now an ambassador for the company.

Like Schroeder, Hitz lives a very hands-on lifestyle and manages a small farm with his wife. He cares for chickens, sheep, goats, donkeys and more. He said the Zeus hand works great for holding rakes and shovels, driving his tractor, carrying feed and gathering hay.

Hitz said the Zeus hand also has a soft grip feature, which means he can use it to pick up eggs from his chicken coop.

“If I would have tried that with my other two, it would have smushed all over the place, egg everywhere,” Hitz said. “So that just blew my mind when I went up to the chicken coop, and I did not crush that egg.”

Out of Aether’s 50 employees, Agrawal said around 75% are dedicated to research and development, so the company is always looking ahead to what is next. He said Aether is already working on next generation devices, as well as better machine learning systems and digital training platforms.

He said ultimately, Aether’s goal is to help make bionic devices more accessible and easier to use.

“The amount of mental taxation that a user has to put in to use these devices has decreased a lot with our product,” he said. “And I think that is really key to ensuring that these devices don’t sit in a boardroom, but are actually used by patients.”