The daily business briefing: March 29, 2023

(Image credit: Anthony Wallace/AFP via Getty Images)

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1. Alibaba to break up into 6 units
2. Prosecutors charge Bankman-Fried in alleged China bribery scheme
3. Report: AI could affect 300 million jobs
4. Stock futures rebound after Tuesday's losses
5. Lucid to cut 18 percent of workforce

published 29 March 2023

1. Alibaba to break up into 6 units

Chinese e-commerce giant Alibaba Group Holding announced Tuesday that it plans to split into six independently run units that would raise money and seek IPOs separately. The news of the breakup of Alibaba's $220 billion empire surprised markets, and sent the company's shares soaring 16 percent in Hong Kong, adding $30 billion to its market value. The shakeup at one of China's biggest companies, which was valued at more than $800 billion at its stock's peak, comes as investors grow weary of a years-long regulatory crackdown by a Chinese government determined to curb the power of Big Tech. Alibaba's once-outspoken founder, Jack Ma, stepped back from a leadership role in 2019 and has kept a low profile, staying abroad until recently.

Prosecutors have charged FTX founder Sam Bankman-Fried with steering $40 million in bribes to Chinese officials to unfreeze assets linked to his cryptocurrency business, according to a newly rewritten indictment unsealed Tuesday. The indictment, which was returned Monday, brings the number of charges against Bankman-Fried to 13. He was arrested in the Bahamas, where his operations were based, in December and extradited to the U.S. to face trial. U.S. Attorney Damian Williams has repeatedly said the investigation into FTX is ongoing. The indictment said another person who allegedly participated in the bribery conspiracy "will be arrested" in the Southern District of New York. Bankman-Fried is staying at his parents' Palo Alto, California, home on a $250 million personal recognizance bond.

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Artificial intelligence could replace the equivalent of 300 million jobs globally, according to a new report by economists at Goldman Sachs. About 18 percent of global work could be automated in the shift to the new generation of AI seen in chatbots like ChatGPT, the researchers said in a report dated Sunday but widely reported Tuesday. The impact will be concentrated in advanced economies, which have more white collar jobs than emerging markets. About two-thirds of jobs in the United States and Europe "are exposed to some degree of AI automation," and as much as a quarter of work in those markets could be done by AI, the economists said. But the changes could also mean a productivity boom resulting in the creation of new jobs.

U.S. stock futures gained early Wednesday as Treasury yields dipped and fears of contagion from this month's regional banking crisis eased. Futures tied to the Dow Jones Industrial Average were up 0.7 percent at 7:30 a.m. ET. S&P 500 and Nasdaq futures were up 0.9 percent. The tech-heavy Nasdaq fell 0.5 percent Tuesday as Treasury yields rose and some investors worried higher borrowing costs could trigger a recession. The Dow and the S&P 500 fell 0.1 percent and 0.2 percent, respectively. On Wednesday, shares of Lululemon surged 14 percent in pre-market trading after the athletic apparel retailer reported better-than-expected quarterly earnings and revenue.

Electric vehicle manufacturer Lucid plans to lay off 18 percent of its workforce, about 1,290 employees, Insider reported Tuesday, citing a leaked internal memo and sources familiar with a company-wide meeting. Lucid CEO Peter Rawlinson told employees that the staff reductions were a "painful but necessary decision" to cut costs. Lucid confirmed the plans in a filing with the Securities and Exchange Commission on Tuesday afternoon. The news came shortly after Lucid reported worse-than-expected quarterly revenue. The company didn't respond to a request for comment from Insider. The layoffs are the latest to hit a tech sector adjusting to weakening demand and bracing for a possible recession.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.