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May 02, 2025
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TGIF! Elon Musk's lawsuit against OpenAI moves forward even though a judge dismisses some of his claims.
Amazon reports 9% sales growth for the first quarter but says tariffs could affect its performance. Apple reports a 5% rise in revenue for the first quarter.
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U.S. District Court Judge Yvonne Gonzalez Rogers, who is overseeing Elon Musk’s breach of charitable trust lawsuit against OpenAI, dismissed 11 of the 16 claims under consideration for a trial next March. The rejected claims included Musk’s argument that he had an explicit contract with OpenAI when he made early donations to the nonprofit overseeing the ChatGPT maker and that OpenAI and Microsoft had aided and abetted fraud. Justice Rogers denied OpenAI’s motion to dismiss other claims of Musk’s, including that OpenAI violated an “implied-in-fact” contract with Musk by attempting
to convert from a charity to a for-profit company. Justice Rogers also rejected a brief that former OpenAI employees filed opposing OpenAI’s planned conversion, writing that it did not help clarify the legal issues in the case. Musk’s lawyers are due to file a response to OpenAI’s counterclaims by May 7.
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Amazon reported largely steady results for the first quarter of 2025, including 9% overall revenue growth to $155.7 billion. The company also projected sales growth of 7% to 11% for the second quarter. Amazon’s first quarter North America sales, which include e-commerce but excludes Amazon Web Services, grew 8%, while international sales rose 5%. AWS revenue was up 17%, a slight deceleration from 19% growth in the preceding three quarters. The company also added new language to the financial guidance section of its earnings release, noting that “tariff and trade policies” could materially affect its performance in the second quarter. President Donald Trump’s tariff policies have upended many parts of the e-commerce industry, and the White House criticized Amazon on Tuesday following a report that the company planned to display some tariff costs on its website.
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Apple reported 5% higher revenue of $95.4 billion for the March quarter, thanks to a 2% lift in iPhone revenues and a 12% increase in services revenue. Apple’s net income rose 5% to $24.78 billion. Apple shares were trading down 2.5% in after-hours trading. The slight increase in the iPhone business may have been influenced by a rush of iPhone purchases around the end of March as consumers tried to beat the imposition of tariffs on Chinese imports which was expected to sharply raise the price of iPhones. The Trump administration ended up
temporarily exempting smartphones and other electronics from the tariffs. Apple’s results showed a slight decline in reveue from China, suggesting the company’s loss of smartphone market share in the country has continued. Apple has been losing share in China to local phone makers.
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Airbnb reported its slowest revenue growth since the start of 2021 as economic uncertainty prompted travelers to pull back on spending in the first quarter, particularly in the U.S., the company said. Airbnb reported $2.3 billion in revenue, up 6% year over year, compared with 12% year-over-year growth in the fourth quarter of 2024. Its operating cash flow also fell slightly, to $1.8 billion, from $1.9 billion in the first quarter of last year. Airbnb shares fell by more than 5% in after-hours trading. Airbnb said it saw “softness in travel” from Canada to the U.S., as many Canadians vowed to boycott U.S. products and change travel plans in light of President Donald Trump’s comments about annexing the country. Airbnb projected that revenue would grow between
9% and 11% in the second quarter to roughly $3 billion. “By offering guests a wide range of listings around the world and providing hosts economic opportunity, we believe our model can adapt to periods of consumer uncertainty,” the company said in a letter to shareholders.
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A lawyer for OpenAI has sent a letter to a group opposing the ChatGPT maker’s conversion to a for-profit structure, asking for a disclosure of its funding sources, according to a copy of the letter viewed by The Information. The group, the Coalition for AI Nonprofit Integrity, supported a California bill introduced in February that could have halted OpenAI’s planned conversion to a for-profit company by barring “a startup venture capital nonprofit” from transferring assets worth more than $100 million to an acquiring entity as a part of a single transaction. That bill has since been rewritten and is no longer related to OpenAI’s planned conversion. The letter, sent by Ann O’Leary, a partner at law firm Jenner & Block and former chief of staff for Calif. Gov. Gavin Newsom, suggested that OpenAI believes
the Coalition for AI Nonprofit Integrity has ties to Elon Musk, a cofounder of OpenAI who’s since started a competitor and has sued OpenAI to prevent its conversion. The letter says that “several of [the coalition’s] public positions echo themes and language found in these ongoing efforts” by Musk. The coalition is not funded by Musk or involved with him or his companies, said spokesperson Becky Warren. She called the letter “clear misdirection and an intimidation tactic.” The group of AI researchers, professors and “concerned citizens” is backed by Harvard law professor Lester Lessig, who has helped ex-OpenAI employees submit a court brief opposing the conversion, and the parents of Suchir Balaji, a deceased former OpenAI employee, and other funders, she said. A spokesperson for OpenAI declined to comment.
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Roku is buying Frndly TV, a subscription video streaming service that offers live cable TV channels including A&E, Hallmark and Lifetime, for $185 million in cash. Roku said the move is in part to help drive “Roku-billed subscriptions” on its streaming TV operating system. The acquisition of Frndly TV should also help grow Roku’s “platform revenue” segment, which generates revenue from advertising as well as when users purchase subscriptions to streaming services or buy or rent movies and TV shows from their Roku accounts. That segment generated $880.8 million in revenue during the first quarter of 2025, up 17% year over year. (Roku posted first-quarter earnings on Thursday.) Platform revenue also accounts for a vast majority of Roku’s overall business. The company’s other business segment,
“devices revenue,” generated $139.9 million during the first quarter, up 11% year over year—but at a gross profit loss of $19.3 million. Based in Denver, Frndly TV was founded in 2019 and offers more than 50 live cable TV channels at subscriptions starting at $6.99 per month. Roku said the acquisition is expected to be completed in the second quarter. Of the $185 million purchase price, it said $75 million will be held back and tied to performance goals over the next two years.
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Microsoft is significantly increasing the cost of its Xbox consoles, controllers, and some games as tariffs imposed by President Donald Trump drive up the cost of electronics manufacturing. Microsoft said in a statement that the cost increases, which amount to a more than 20% markup for its most popular Xbox models, are due to “market conditions and the rising cost of development,” without explicitly naming tariffs. The cost of an Xbox Series X will rise $100 to $599.99, while the cheaper Xbox Series S is being marked up $80 to $379.99. Microsoft is also raising its recommended retail price for Xbox headsets and controllers by as much as 45% in the U.S., with both controllers headsets now starting at $65. The pricing increases also affect the UK, Europe, and Australia, Microsoft said Thursday. The company hasn’t
yet announced prices for the rest of the globe but said “local pricing may differ by country to reflect exchange rates and market conditions.” Microsoft will also raise the price of some Xbox games from $69.99 to $79.99, reflecting a similar markup announced by Nintendo last month. Microsoft executives didn’t directly address the potential future impacts of tariffs during the company’s quarterly earnings call Wednesday, but CFO Amy Hood said “tariff uncertainty” drove slightly higher hardware sales in the March quarter.
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