World Street | Google's Patent Battle; BlackRock's Staff Cuts; Korea's Jobless Surge; China's Population Drop

World Street offers a sneak peek into the world of business and economy

Google faces a patent lawsuit concerning AI technology, while Microsoft's support for OpenAI sparks EU scrutiny. Germany's Galeria Karstadt Kaufhof files for insolvency amid a real-estate crisis. Hewlett Packard Enterprise to potentially acquire Juniper Networks. Kyushu Electric Power eyes US energy investments. China is experiencing a declining population. The World Bank predicts the weakest global growth in 30 years, and BlackRock plans layoffs while focusing on growth areas. South Korea sees its highest jobless rate in two years. All these and more in this edition of World Street.

Patent Pain

Google is set to go before a federal jury in Boston on January 9 in a trial over accusations that processors it uses to power artificial intelligence technology in key products infringe a computer scientist's patents. Singular Computing, founded by Massachusetts-based computer scientist Joseph Bates, claims Google copied his technology and used it to support AI features in Google Search, Gmail, Google Translate, and other Google services.

Open and Shut

Microsoft's financial backing for ChatGPT maker OpenAI may be subject to EU merger rules, EU antitrust regulators said on Tuesday, underscoring a similar warning from its UK peer in December. The US software giant, which last year committed to invest over $10 billion into OpenAI with a non-voting position on the board, has said it does not own any portion of OpenAI.

Aftershocks

German department store giant Galeria Karstadt Kaufhof said on Tuesday it had filed for insolvency following the collapse of its parent Signa amid a real-estate crisis in the region. Galeria, Germany's most prominent retailer, said it was seeking a new owner after being hit by the problems at Signa, the insolvent Austrian-based property empire that has become the biggest casualty so far in Europe's real-estate crisis.

Deal Book

Hewlett Packard Enterprise is in talks to buy Juniper Networks in a deal valuing the network gear maker at about $13 billion, sources told Reuters. The deal would help bolster the nearly 100-year-old technology company's artificial intelligence (AI) offerings.

Energized

Kyushu Electric Power is considering investing in the US Lake Charles liquefied natural gas (LNG) project of Energy Transfer, among other projects, to secure a stable supply of the fuel, a company spokesperson said.

The comment partially confirms a Sunday report by the Nikkei business daily that Kyushu Electric may buy a stake of about 10% in the Lake Charles project and sign a 20-year contract, importing about 1.6 million metric tons a year on behalf of other Japanese utilities.

Beyond the Wall

China's population likely dropped for a second consecutive year in 2023 due to a surge in COVID-related deaths after the country abruptly ended strict lockdowns, while a lacklustre economy keeps birth rates depressed, reports Reuters.

Demographers estimate population data on Jan. 17 to show the number of new births in 2023 falling below the 9.56 million in 2022 as long-standing issues such as gender inequality and high childcare costs remained largely unaddressed. China's birth rate has been declining since 2016.

Crypto Chaos

Cryptocurrency prices experienced sharp fluctuations on Tuesday following a false post from the US Securities and Exchange Commission’s official X account, claiming approval for the first-ever US spot bitcoin exchange traded funds (ETFs). The erroneous declaration, appearing after 4pm Washington time, announced SEC approval for #Bitcoin ETFs across all registered national securities exchanges.

However, within 10 minutes, SEC Chair Gary Gensler clarified via his personal X account that the @SECGov account was compromised, disavowing the tweet and affirming that the SEC had not sanctioned the listing and trading of spot bitcoin exchange-traded products.

Global Growth Slump

The World Bank expects the global economy to undergo its weakest growth in 30 years, forecasting a decline to 2.4 percent in 2024 from 2.6 percent in 2023. Despite the resilience against recession risks in 2023, escalating geopolitical tensions pose new challenges, likely resulting in slower growth through 2024 and 2025.

The report emphasizes the need for a significant shift in course, cautioning that without it, the current decade could be marked as a period of missed potential and lost opportunities.

Staff Slimming Strategy

BlackRock intends to reduce its workforce by 600 individuals, approximately 3 percent of its total staff. This move aims to redirect resources towards swiftly expanding sectors like technology, ETFs, and private markets within the $9.1 trillion money management firm.

CEO Larry Fink and President Rob Kapito communicated to all employees through a company-wide memo, acknowledging the necessity to adapt to a swiftly evolving landscape. Despite the layoffs, they affirmed that the overall employee count, presently around 20,000, will continue to rise.

Unemployment Upsurge

South Korea’s jobless rate rose to the highest in almost two years, a reflection of both the impact of elevated interest rates on the economy, and more people joining the workforce. The seasonally adjusted unemployment rate rose to 3.3 percent in December from 2.8 percent a month earlier, the statistics office said.

The increase in the unemployment rate signals potential strain on companies due to economic conditions impacted by high borrowing costs. However, a rise in the labor participation rate indicates a more positive trend, suggesting that more individuals are either entering or rejoining the labor market in pursuit of employment opportunities.