ChatGPT, A.I.-Powered Chatbot, Faces Rivals From Google and Baidu

February 07, 2023
Business

As last-ditch moves go, it’s not a bad one. Existing shareholders may prefer being diluted to a bankruptcy that wipes them out entirely. “If suddenly a golden goose has appeared on your doorstep and starts laying golden eggs — and you decide, well, I just don’t believe in golden geese, and I’m just going to ignore these geese and eggs on my doorstep — I’m not sure that’s the right call,” said Eric Talley, a professor of finance at Columbia Law School.

Who is putting up the money? Bed Bath Beyond already has commitments for its offerings, though it is unclear who from. (There has been interest in the company: DealBook has reported that the private equity firm Sycamore has looked at buying parts of Bed Bath Beyond, including Buy Buy Baby, as part of a possible bankruptcy deal.)

There are still risks. Many of Bed Bath Beyond’s fundamental challenges remain, and an equity deal is unlike a leveraged buyout in one key way: If the company does go bankrupt, even preferred equity investors will be behind debt holders in the line to be paid back. But with investment firms eager to put money to work, and the leveraged loan market frozen, it may be the last best option.

Business braces for Biden’s big speech

President Biden will deliver his State of the Union address in a more hostile setting on Tuesday: the Republican-controlled House. For businesses, the political divisions could mean more uncertainty during turbulent times.

Here’s what Biden is expected to say, and what businesses and economists will be listening for:

Tax: Biden is expected to call for a quadrupling of the tax paid on share buybacks, and push for new levies on high-income earners and businesses, all in an effort to reduce the deficit.

Competition: Antitrust will be a focus of the speech. Cracking down on Big Tech is an area of bipartisan unity, but that doesn’t mean the parties will work together on it. Before tonight’s speech, the trade association TechNet, which includes Google, Apple and Meta, said it would like to see the president avoid “advocating for arbitrary legislation that would target America’s most successful companies.”

Debt: With a June default by the U.S. looming, Biden is expected to double down on raising the debt limit. He has been talking to Speaker Kevin McCarthy, but apparently won’t discuss suggested spending cuts — a position that Americans seem to favor, polls show. The president should be “willing to sit down and negotiate,” Suzanne Clark, C.E.O. of the U.S. Chamber of Commerce, wrote in a blog post, adding that “default is not an option.”

Geopolitics: With the spy balloon controversy lingering, the president will want to send a tough-on-China message — without alienating Beijing. Businesses and investors increasingly see China exposure as a potential risk; the balloon saga even added a bit of market volatility earlier in the week.

“If you let sewer rats in, you know that pestilence is going to come.”

— Julie Inman Grant, Australia’s online safety commissioner, accusing Twitter of failing to remove child pornography despite Elon Musk’s vow to remove it.

Article source: https://www.nytimes.com/2023/02/07/business/dealbook/chatgpt-google-baidu.html