As far as making money, Microsoft was in the mix from as early as 2016, offering OpenAI $60 million worth of compute on Azure in exchange for, among other things, the companies “evangelizing” one another. No one seemed into this kind of corporate back-scratching, and Musk wrote that it made him “nauseous.”
They ultimately ended up paying far more but with no obligation on either side. “Would be worth way more than $50M not to seem like Microsoft’s marketing bitch,” wrote Musk.
Lastly, a minor nugget mentioned by board member Shivon Zilis (who would later become mother to three of Musk’s children): Valve founder Gabe Newell was, in addition to being a donator to the project in the early days, on Altman and Greg Brockman’s “informal advisory board.” It’s unclear what role he had or has in the day-to-day there. I’ve asked Newell for comment.
If the acquisition had happened, it could have benefited both companies. Cerebras would’ve avoided the path to a tricky IPO, while OpenAI might’ve had a vital resource in its race to build in-house chips.
OpenAI has long sought to reduce its reliance on Nvidia, which commands a massive share of the market for AI-optimized chips. While OpenAI is late to the in-house chip game — Google and Amazon Web Services, among others, have long offered chips designed for AI workloads — it’s under pressure to reduce the cost of model training, fine-tuning, and running. Having its own chips could be one way to attain the reductions it needs.
"Everything we do is to reward and support our retail diamondhands following," Moore wrote, referring to a term popularized in the crypto community for long-term believers.
Moore appears to have subsequently deleted his X account. His firm, 8VC, did not immediately respond to CNBC's request for comment.
OpenAI at one point hoped to establish a network of factories for chip manufacturing, and was considering an acquisition target. But it’s reportedly abandoned those plans in favor of aggressively building out a team of chip designers and engineers, and working with semiconductor firms Broadcom and TSMC to create an AI chip for running models. It could arrive as soon as 2026.
Last Monday after market close, Palantir reported third-quarter earnings and revenue that topped estimates and issued a fourth-quarter forecast that was also ahead of Wall Street's expectations. CEO Alex Karp wrote in the earnings release that the company "absolutely eviscerated this quarter," driven by demand for artificial intelligence technologies.
U.S. government revenue increased 40% from a year earlier to $320 million, while U.S. commercial revenue rose 54% to $179 million. On the earnings call, the company highlighted a five-year contract to expand its Maven technology across the U.S. military. Palantir established Maven in 2017 to provide AI tools to the Department of Defense.
According to the court documents, seen by TechCrunch, NSO had developed a suite of hacking tools to be used against targets using WhatsApp, capable of accessing private data on the target’s phone. The hacking suite was called “Hummingbird,” and two of the suite’s exploits were dubbed “Eden” and “Heaven.”
This suite cost NSO’s government customers — namely police departments and intelligence agencies — up to $6.8 million for a one-year license, and netted NSO “at least $31 million in revenue in 2019, according to one of the court documents.
Thanks to these hacking tools, NSO installed Pegasus on “between hundreds and tens of thousands” of target devices, according to a deposition by NSO’s head of research and development Tamir Gazneli.
The postearnings rally coincides with the period following last week's presidential election. Palantir is seen as a potential beneficiary given the company's ties to the Trump camp. Co-founder and Chair Peter Thiel was a major booster of Donald Trump's first victorious campaign, though he had a public falling out with Trump in the ensuing years.
When asked in June about his position on the 2024 election, Thiel said, "If you hold a gun to my head I’ll vote for Trump."
Until now, it wasn’t clear who was actually sending the malicious WhatsApp messages to target individuals with spyware. For years, NSO has claimed to have no knowledge of customers’ operations, and not be involved in carrying out the targeted cyberattacks. The newly released court documents cast doubt on some of NSO’s claims.
WhatsApp argued in one of the court documents that, “NSO’s customers’ role is minimal,” given that the government customers only needed to input the phone number of the target’s device and, citing an NSO employee, “press Install, and Pegasus will install the agent on the device remotely without any engagement.”
Thiel's Palantir holdings have increased in value by about $3 billion since the earnings report and $2 billion since the election.
In September, S&P Global announced Palantir would join the S&P 500 stock index.
Analysts at Argus Research say the rally has pushed the stock too high given the current financials and growth projections. The analysts still have a long-term buy rating on the stock and said in a report last week that the company had a "stellar" quarter, but they downgraded their 12-month recommendation to a hold.
“In other words, the customer simply places an order for a target device’s data, and NSO controls every aspect of the data retrieval and delivery process through its design of Pegasus,” WhatsApp argued.
The court filings cited an NSO employee as saying it “was our decision whether to trigger [the exploit] using WhatsApp messages or not,” referring to one of the exploits the company offered its customers.
When reached for comment, NSO spokesperson Gil Lainer said in a statement to TechCrunch: “NSO stands behind its previous statements in which we repeatedly detailed that the system is operated solely by our clients and that neither NSO nor its employees have access to the intelligence gathered by the system.”
On Wednesday, The Federal Bureau of Investigation (FBI) and the U.S. cyber watchdog agency CISA said China-linked hackers have intercepted surveillance data intended for American law enforcement agencies after breaking into an unspecified number of telecom companies.
Earlier in October, the Journal reported that Chinese hackers accessed the networks of U.S. broadband providers, including Verizon Communications, AT&T and Lumen Technologies, and obtained information from systems the federal government uses for court-authorized wiretapping.
NSO’s three exploits targeted WhatsApp users
One technique that NSO used to allow its customers to target WhatsApp users, described in one document, was to set up something the company called a “WhatsApp Installation Server,” or WIS, which WhatsApp calls a “fake client.” This was essentially a modified version of the WhatsApp app that NSO developed and used to send messages — including their malicious exploits — to regular WhatsApp users. NSO admitted setting up real WhatsApp accounts for its customers, per one of the court documents.
WhatsApp was able to defeat both NSO’s “Eden” and “Heaven” exploits with patches and security updates, according to an internal NSO communication.
The stock is getting hammered. After the shares soared more than 14-fold from the end of 2022 to their peak in March of this year, they've since plummeted by 85%. Super Micro's stock is now equal to where it was trading in May 2022, after falling another 11% on Thursday.
Getting delisted from the Nasdaq could be next if Super Micro doesn't file a compliance plan by the Monday deadline or if the exchange rejects the company's submission. Super Micro could also get an extension from the Nasdaq, giving it months to come into compliance. The company said Thursday that it would provide a plan to the Nasdaq in time.
“Eden/Heaven/Hummingbird R.I.P. announcement,” read a message sent to NSO employees.
The court documents show that NSO’s Heaven exploit was active before 2018, and was designed to direct target WhatsApp devices into communicating with a malicious WhatsApp relay server controlled by NSO.
After WhatsApp patched its systems against NSO’s Heaven exploit, NSO developed a new exploit called “Eden,” which an NSO employee quoted by the court documents said, “need[ed] to go through WhatsApp relay servers,” which the Heaven exploit had sought to avoid. It was the use of the Eden exploit that led to WhatsApp filing its lawsuit against NSO, according to a deposition by another NSO employee.
A third exploit developed by NSO, revealed in the documents, was called “Erised,” a so-called “zero-click” exploit that could compromise a victim’s phone without any interaction from the victim. WhatsApp blocked the use of NSO’s Erised exploit in May 2020, several months after WhatsApp had filed its lawsuit.
A representative for the Nasdaq said the exchange doesn't comment on the delisting process for individual companies, but the rules suggest the process could take about a year before a final decision.
Another interesting detail that surfaced this week is the admission by one of the NSO employees deposed in the course of the lawsuit that Pegasus was used against Dubai’s Princess Haya, a case that was reported by the The Guardian and The Washington Post in 2021, and later by The New Yorker in 2023.
The same NSO employee said the spyware maker “disconnected” access to Pegasus for 10 customers, citing abuse of the spyware.
At this point in the legal case, WhatsApp is asking the judge to issue a summary judgment in the case, and is awaiting a decision.
The Nasdaq warned Super Micro on Sept. 17 that it was at risk of being delisted. That gave the company 60 days to submit a plan of compliance to the exchange, and because the deadline falls on a Sunday, the effective date for the submission is Monday.
If Super Micro's plan is acceptable to Nasdaq staff, the company is eligible for an extension of up to 180 days to file its year-end report. The Nasdaq wants to see if Super Micro's board of directors has investigated the company's accounting problem, what the exact reason for the late filing was and a timeline of actions taken by the board.
Meanwhile, the details that have come out from the lawsuit this week could help other people who have sued NSO in other countries, according to Natalia Krapiva, the tech legal counsel at Access Now, a nonprofit that has investigated some cases of abuse carried out with NSO’s spyware.
“WhatsApp’s sticking with their legal action finally reaps some benefits,” Krapiva told TechCrunch. “While it is true that NSO has not been sharing much information (especially things like Pegasus codes, list of customers, etc.), the information that they did share is already quite useful for this case but also for legal cases against NSO around the world.”
The Nasdaq says it looks at several factors when evaluating a plan of compliance, including the reasons for the late filing, upcoming corporate events, the overall financial status of the company and the likelihood of a company filing an audited report within 180 days. The review can also look at information provided by outside auditors, the SEC or other regulators.
With Grok, xAI aims to directly compete with companies including ChatGPT creator OpenAI, which Musk helped start before a conflict with co-founder Sam Altman led him to depart the project in 2018. It will also be vying with Google's Bard technology and Anthropic's Claude chatbot.
Now that Donald Trump is president-elect, Musk is beginning to actively work with the new administration on its approach to AI and tech more broadly, as part of Trump's inner circle in recent weeks.
Last week, Super Micro said it was doing everything it could to remain listed on the Nasdaq, and said a special committee of its board had investigated and found no wrongdoing. Super Micro CEO Charles Liang said the company would receive the board committee's report as soon as last week. A company spokesperson didn't respond when asked by CNBC if that report had been received.
If the Nasdaq rejects Super Micro's compliance plan, the company can request a hearing from the exchange's Hearings Panel to review the decision. Super Micro won't be immediately kicked off the exchange – the hearing panel request starts a 15-day stay for delisting, and the panel can decide to extend the deadline for up to 180 days.
Trump plans to repeal President Joe Biden's executive order on AI, according to his campaign platform, stating that it "hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology" and that "in its place, Republicans support AI Development rooted in Free Speech and Human Flourishing."
If the panel rejects that request or if Super Micro gets an extension and fails to file the updated financials, the company can still appeal the decision to another Nasdaq body called the Listing Council, which can grant an exception.
Ultimately, the Nasdaq says the extensions have a limit: 360 days from when the company's first late filing was due.
Hou this week urged the court to issue a temporary restraining order after noticing a filing by TuSimple China that signaled the company was about to transfer money (or already had) out of the United States. Two TuSimple China subsidiaries last week registered an increase in assets collectively worth $150 million, according to Hou’s declaration and information from public filings.
“These filings show a suspicious increase in registered assets between these two subsidiaries in one day as a precursor to large amount of cash transfer from U.S. to China,” reads the declaration. “The most likely scenario is that these filings in China were the preparatory steps before TuSimple U.S. transfers money to those subsidiaries in China.”
There's one factor at play that could hurt Super Micro's chances of an extension. The exchange considers whether the company has any history of being out of compliance with SEC regulations.
Between 2015 and 2017, Super Micro misstated financials and published key filings late, according to the SEC. It was delisted from the Nasdaq in 2017 and was relisted two years later.
Super Micro "might have a more difficult time obtaining extensions as the Nasdaq's literature indicates it will in part 'consider the company's specific circumstances, including the company's past compliance history' when determining whether an extension is warranted," Wedbush analyst Matt Bryson wrote in a note earlier this month. He has a neutral rating on the stock.
Hou added that such large cash transfers are “beyond normal course of business” and comparable to “TuSimple China’s heyday of operation when it was operating a large autonomous truck fleet in Shanghai” and had around 700 employees on its payroll. As of September, TuSimple China had around 200 employees.
The window of opportunity for shareholders like Hou to get what they want — which is for TuSimple to liquidate so they can recuperate some of their losses — is narrowing.
History also reveals just how long the delisting process can take.
Charles Liang, chief executive officer of Super Micro Computer Inc., right, and Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024.
TuSimple is in a gray area when it comes to enforcement from the Securities and Exchange Commission. While TuSimple delisted earlier this year, the company is still registered with the SEC and thus subject to U.S. scrutiny. Once the money goes to China, shareholders in the U.S. will have no recourse to claw back funds from their original investment.
TechCrunch has reached out to the SEC to learn if the agency is investigating TuSimple in relation to shareholder complaints.
TuSimple did not immediately respond to TechCrunch’s request for comment.
Super Micro missed an annual report filing deadline in June 2017, got an extension to December and finally got a hearing in May 2018, which gave it another extension to August of that year. It was only when it missed that deadline that the stock was delisted.
In the short term, the bigger worry for Super Micro is whether customers and suppliers start to bail.
President Joe Biden issued a new executive order on artificial intelligence — the U.S. government's first action of its kind — requiring new safety assessments, equity and civil rights guidance and research on AI's impact on the labor market.
While law enforcement agencies have warned that they're ready to apply existing law to abuses of AI and Congress has endeavored to learn more about the technology to craft new laws, the executive order could have a more immediate impact. Like all executive orders, it "has the force of law," according to a senior administration official who spoke with reporters on a call Sunday.
Aside from the compliance problems, Super Micro is a fast-growing company making one of the most in-demand products in the technology industry. Sales more than doubled last year to nearly $15 billion, according to unaudited financial reports, and the company has ample cash on its balance sheet, analysts say. Wall Street is expecting even more growth to about $25 billion in sales in its fiscal 2025, according to FactSet.
Super Micro said last week that the filing delay has "had a bit of an impact to orders." In its unaudited September quarter results reported last week, the company showed growth that was slower than Wall Street expected. It also provided light guidance.
Creating new safety and security standards for AI, including by requiring some AI companies to share safety test results with the federal government, directing the Commerce Department to create guidance for AI watermarking, and creating a cybersecurity program that can make AI tools that help identify flaws in critical software.
Protecting consumer privacy, including by creating guidelines that agencies can use to evaluate privacy techniques used in AI.
Advancing equity and civil rights by providing guidance to landlords and federal contractors to help avoid AI algorithms furthering discrimination, and creating best practices on the appropriate role of AI in the justice system, including when it's used in sentencing, risk assessments and crime forecasting.
Protecting consumers overall by directing the Department of Health and Human Services to create a program to evaluate potentially harmful AI-related health-care practices and creating resources on how educators can responsibly use AI tools.
Supporting workers by producing a report on the potential labor market implications of AI and studying the ways the federal government could support workers affected by a disruption to the labor market.
Promoting innovation and competition by expanding grants for AI research in areas such as climate change and modernizing the criteria for highly skilled immigrant workers with key expertise to stay in the U.S.
The company said one reason for its weak results was that it hadn't yet obtained enough supply of Nvidia's next-generation chip, called Blackwell, raising questions about Super Micro's relationship with its most important supplier.
"We don't believe that Super Micro's issues are a big deal for Nvidia, although it could move some sales around in the near term from one quarter to the next as customers direct orders toward Dell and others," wrote Melius Research analyst Ben Reitzes in a note this week.
Working with international partners to implement AI standards around the world.
Developing guidance for federal agencies' use and procurement of AI and speeding up the government's hiring of workers skilled in the field.
The order represents "the strongest set of actions any government in the world has ever taken on AI safety, security, and trust," White House Deputy Chief of Staff Bruce Reed said in a statement.
It builds on voluntary commitments the White House previously secured from leading AI companies and represents the first major binding government action on the technology. It also comes ahead of an AI safety summit hosted by the U.K.
The senior administration official referenced the fact that 15 major American technology companies have agreed to implement voluntary AI safety commitments but said that it "is not enough" and that Monday's executive order is a step toward concrete regulation for the technology's development.
The only other bidder was First United American Companies, which runs a website using Jones’ name to sell his supplements. The company reportedly placed a $3.5 million bid that, based on cash alone, would have won the secret auction. First United’s attorney reportedly told the judge on Thursday that the trustee changed the auction process days before, omitting a final round on Wednesday that would have given the parties a chance to outbid each other.
The trustee only chose from the sealed bids submitted last week. However, he said his decision followed Judge Lopez’s auction rules in September, describing the final round as optional.
Lopez struck a disapproving tone in court, throwing the sale into question. “We’re all going to an evidentiary hearing, and I’m going to figure out exactly what happened,” the judge reportedly said. “No one should feel comfortable with the results of this auction.”
"The President, several months ago, directed his team to pull every lever, and that's what this order does: bringing the power of the federal government to bear in a wide range of areas to manage AI's risk and harness its benefits," the official said.
In a speech Monday at the White House, Biden said he'll meet on Tuesday with Senate Majority Leader Chuck Schumer, D-N.Y., and a bipartisan group put together by Schumer. He said the meeting is to "underscore the need for congressional action."
"This executive order represents bold action, but we still need Congress to act," Biden said.
Elon Musk allowed Jones back on X (Twitter) last year after the platform “permanently” banned him in 2018 under its previous ownership.
As America’s chief satire publication (at least of those doing so consciously), The Onion’s (perhaps premature) announcement of the purchase stayed on brand. Its tone, hinting at what’s to come, resembled The Colbert Report on steroids — or maybe Jones’ “Survival Shield X-2” pills.
“Founded in 1999 on the heels of the Satanic ‘panic’ and growing steadily ever since, InfoWars has distinguished itself as an invaluable tool for brainwashing and controlling the masses,” The Onion wrote in a truth-meets-fiction announcement. “With a shrewd mix of delusional paranoia and dubious anti-aging nutrition hacks, they strive to make life both scarier and longer for everyone, a commendable goal. They are a true unicorn, capable of simultaneously inspiring public support for billionaires and stoking outrage at an inept federal state that can assassinate JFK but can’t even put a man on the Moon.”
Biden's executive order requires that large companies share safety test results with the U.S. government before the official release of AI systems. It also prioritizes the National Institute of Standards and Technology's development of standards for AI "red-teaming," or stress-testing the defenses and potential problems within systems. The Department of Commerce will develop standards for watermarking AI-generated content.
The order also addresses training data for large AI systems, and it lays out the need to evaluate how agencies collect and use commercially available data, including data purchased from data brokers, especially when that data involves personal identifiers.
If the sale still ends up in its hands, The Onion plans to rebrand Infowars as a parody of itself (more than it already was), poking fun at “weird internet personalities” like Jones, according to The New York Times. Ben Collins, the CEO of Global Tetrahedron, hasn’t said how much it paid to transform Infowars’ destructive self-parody into constructive satire. (Collins reported extensively on Infowars when covering misinformation at NBC News.) He plans to launch the rebooted site in January.
The Biden administration is also taking steps to beef up the AI workforce. Beginning Monday, the senior administration official said, workers with AI expertise can find relevant openings in the federal government on AI.gov.
The administration official said Sunday that the "most aggressive" timing for some safety and security aspects of the order involves a 90-day turnaround, and for some other aspects, that time frame could be closer to a year.
The air leak was addressed in a recent report by NASA’s Office of Inspector General (OIG), which highlighted its true severity and the risk it poses to the crew. The OIG report stated that the two space agencies can’t seem to agree on the point at which the leak should be considered unsustainable. NASA and Roscosmos met to discuss the ISS air leak, with NASA officials noting that Roscosmos “is confident they will be able to monitor and close the hatch to the Service Module prior to the leak rate reaching an untenable level,” according to the report.
“Although the teams continue to investigate the causal factors for the crack initiation and growth, the U.S. and Russian technical teams don’t have a common understanding of what the likely root cause is or the severity of the consequences of these leaks,” Cabana is quoted in SpaceNews as saying.
Monday's executive order follows a number of steps the White House has taken in recent months to create spaces to discuss the pace of AI development, as well as proposed guidelines.
Since the viral rollout of ChatGPT in November 2022 — which within two months became the fastest-growing consumer application in history, according to a UBS study — the widespread adoption of generative AI has already led to public concerns, legal battles and lawmaker questions. For instance, days after Microsoft folded ChatGPT into its Bing search engine, it was criticized for toxic speech, and popular AI image generators have come under fire for racial bias and propagating stereotypes.
The rate of air leaking from the hole increased around a week before the February 14 launch of the Progress MS-26 cargo spacecraft, which docked to the aft end of Zvezda. The hatch that connects the module to the ISS remained open for five days as the crew offloaded the cargo from Progress MS-26 onto the space station, but was closed shut afterwards.
NASA and Roscosmos are currently monitoring the leak and preparing to close the hatch to the service module when access is not required in order to minimize the amount of air lost and isolate the leak itself from the rest of the space station. If required, the space agencies are prepared to permanently shut off the hatch should the leak rate became unmanageable. The ISS would function normally, but there would be one less docking port for spacecraft delivering cargo to the space station.
As far as making money, Microsoft was in the mix from as early as 2016, offering OpenAI $60 million worth of compute on Azure in exchange for, among other things, the companies “evangelizing” one another. No one seemed into this kind of corporate back-scratching, and Musk wrote that it made him “nauseous.”
They ultimately ended up paying far more but with no obligation on either side. “Would be worth way more than $50M not to seem like Microsoft’s marketing bitch,” wrote Musk.
Lastly, a minor nugget mentioned by board member Shivon Zilis (who would later become mother to three of Musk’s children): Valve founder Gabe Newell was, in addition to being a donator to the project in the early days, on Altman and Greg Brockman’s “informal advisory board.” It’s unclear what role he had or has in the day-to-day there. I’ve asked Newell for comment.
If the acquisition had happened, it could have benefited both companies. Cerebras would’ve avoided the path to a tricky IPO, while OpenAI might’ve had a vital resource in its race to build in-house chips.
OpenAI has long sought to reduce its reliance on Nvidia, which commands a massive share of the market for AI-optimized chips. While OpenAI is late to the in-house chip game — Google and Amazon Web Services, among others, have long offered chips designed for AI workloads — it’s under pressure to reduce the cost of model training, fine-tuning, and running. Having its own chips could be one way to attain the reductions it needs.
"Everything we do is to reward and support our retail diamondhands following," Moore wrote, referring to a term popularized in the crypto community for long-term believers.
Moore appears to have subsequently deleted his X account. His firm, 8VC, did not immediately respond to CNBC's request for comment.
OpenAI at one point hoped to establish a network of factories for chip manufacturing, and was considering an acquisition target. But it’s reportedly abandoned those plans in favor of aggressively building out a team of chip designers and engineers, and working with semiconductor firms Broadcom and TSMC to create an AI chip for running models. It could arrive as soon as 2026.
Last Monday after market close, Palantir reported third-quarter earnings and revenue that topped estimates and issued a fourth-quarter forecast that was also ahead of Wall Street's expectations. CEO Alex Karp wrote in the earnings release that the company "absolutely eviscerated this quarter," driven by demand for artificial intelligence technologies.
U.S. government revenue increased 40% from a year earlier to $320 million, while U.S. commercial revenue rose 54% to $179 million. On the earnings call, the company highlighted a five-year contract to expand its Maven technology across the U.S. military. Palantir established Maven in 2017 to provide AI tools to the Department of Defense.
According to the court documents, seen by TechCrunch, NSO had developed a suite of hacking tools to be used against targets using WhatsApp, capable of accessing private data on the target’s phone. The hacking suite was called “Hummingbird,” and two of the suite’s exploits were dubbed “Eden” and “Heaven.”
This suite cost NSO’s government customers — namely police departments and intelligence agencies — up to $6.8 million for a one-year license, and netted NSO “at least $31 million in revenue in 2019, according to one of the court documents.
Thanks to these hacking tools, NSO installed Pegasus on “between hundreds and tens of thousands” of target devices, according to a deposition by NSO’s head of research and development Tamir Gazneli.
The postearnings rally coincides with the period following last week's presidential election. Palantir is seen as a potential beneficiary given the company's ties to the Trump camp. Co-founder and Chair Peter Thiel was a major booster of Donald Trump's first victorious campaign, though he had a public falling out with Trump in the ensuing years.
When asked in June about his position on the 2024 election, Thiel said, "If you hold a gun to my head I’ll vote for Trump."
Until now, it wasn’t clear who was actually sending the malicious WhatsApp messages to target individuals with spyware. For years, NSO has claimed to have no knowledge of customers’ operations, and not be involved in carrying out the targeted cyberattacks. The newly released court documents cast doubt on some of NSO’s claims.
WhatsApp argued in one of the court documents that, “NSO’s customers’ role is minimal,” given that the government customers only needed to input the phone number of the target’s device and, citing an NSO employee, “press Install, and Pegasus will install the agent on the device remotely without any engagement.”
Thiel's Palantir holdings have increased in value by about $3 billion since the earnings report and $2 billion since the election.
In September, S&P Global announced Palantir would join the S&P 500 stock index.
Analysts at Argus Research say the rally has pushed the stock too high given the current financials and growth projections. The analysts still have a long-term buy rating on the stock and said in a report last week that the company had a "stellar" quarter, but they downgraded their 12-month recommendation to a hold.
“In other words, the customer simply places an order for a target device’s data, and NSO controls every aspect of the data retrieval and delivery process through its design of Pegasus,” WhatsApp argued.
The court filings cited an NSO employee as saying it “was our decision whether to trigger [the exploit] using WhatsApp messages or not,” referring to one of the exploits the company offered its customers.
When reached for comment, NSO spokesperson Gil Lainer said in a statement to TechCrunch: “NSO stands behind its previous statements in which we repeatedly detailed that the system is operated solely by our clients and that neither NSO nor its employees have access to the intelligence gathered by the system.”
On Wednesday, The Federal Bureau of Investigation (FBI) and the U.S. cyber watchdog agency CISA said China-linked hackers have intercepted surveillance data intended for American law enforcement agencies after breaking into an unspecified number of telecom companies.
Earlier in October, the Journal reported that Chinese hackers accessed the networks of U.S. broadband providers, including Verizon Communications, AT&T and Lumen Technologies, and obtained information from systems the federal government uses for court-authorized wiretapping.
NSO’s three exploits targeted WhatsApp users
One technique that NSO used to allow its customers to target WhatsApp users, described in one document, was to set up something the company called a “WhatsApp Installation Server,” or WIS, which WhatsApp calls a “fake client.” This was essentially a modified version of the WhatsApp app that NSO developed and used to send messages — including their malicious exploits — to regular WhatsApp users. NSO admitted setting up real WhatsApp accounts for its customers, per one of the court documents.
WhatsApp was able to defeat both NSO’s “Eden” and “Heaven” exploits with patches and security updates, according to an internal NSO communication.
Beijing has previously denied claims by the U.S. government and others that it has used hackers to break into foreign computer systems.
The stock is getting hammered. After the shares soared more than 14-fold from the end of 2022 to their peak in March of this year, they've since plummeted by 85%. Super Micro's stock is now equal to where it was trading in May 2022, after falling another 11% on Thursday.
Getting delisted from the Nasdaq could be next if Super Micro doesn't file a compliance plan by the Monday deadline or if the exchange rejects the company's submission. Super Micro could also get an extension from the Nasdaq, giving it months to come into compliance. The company said Thursday that it would provide a plan to the Nasdaq in time.
“Eden/Heaven/Hummingbird R.I.P. announcement,” read a message sent to NSO employees.
The court documents show that NSO’s Heaven exploit was active before 2018, and was designed to direct target WhatsApp devices into communicating with a malicious WhatsApp relay server controlled by NSO.
After WhatsApp patched its systems against NSO’s Heaven exploit, NSO developed a new exploit called “Eden,” which an NSO employee quoted by the court documents said, “need[ed] to go through WhatsApp relay servers,” which the Heaven exploit had sought to avoid. It was the use of the Eden exploit that led to WhatsApp filing its lawsuit against NSO, according to a deposition by another NSO employee.
A third exploit developed by NSO, revealed in the documents, was called “Erised,” a so-called “zero-click” exploit that could compromise a victim’s phone without any interaction from the victim. WhatsApp blocked the use of NSO’s Erised exploit in May 2020, several months after WhatsApp had filed its lawsuit.
A representative for the Nasdaq said the exchange doesn't comment on the delisting process for individual companies, but the rules suggest the process could take about a year before a final decision.
Another interesting detail that surfaced this week is the admission by one of the NSO employees deposed in the course of the lawsuit that Pegasus was used against Dubai’s Princess Haya, a case that was reported by the The Guardian and The Washington Post in 2021, and later by The New Yorker in 2023.
The same NSO employee said the spyware maker “disconnected” access to Pegasus for 10 customers, citing abuse of the spyware.
At this point in the legal case, WhatsApp is asking the judge to issue a summary judgment in the case, and is awaiting a decision.
The Nasdaq warned Super Micro on Sept. 17 that it was at risk of being delisted. That gave the company 60 days to submit a plan of compliance to the exchange, and because the deadline falls on a Sunday, the effective date for the submission is Monday.
If Super Micro's plan is acceptable to Nasdaq staff, the company is eligible for an extension of up to 180 days to file its year-end report. The Nasdaq wants to see if Super Micro's board of directors has investigated the company's accounting problem, what the exact reason for the late filing was and a timeline of actions taken by the board.
Meanwhile, the details that have come out from the lawsuit this week could help other people who have sued NSO in other countries, according to Natalia Krapiva, the tech legal counsel at Access Now, a nonprofit that has investigated some cases of abuse carried out with NSO’s spyware.
“WhatsApp’s sticking with their legal action finally reaps some benefits,” Krapiva told TechCrunch. “While it is true that NSO has not been sharing much information (especially things like Pegasus codes, list of customers, etc.), the information that they did share is already quite useful for this case but also for legal cases against NSO around the world.”
The Nasdaq says it looks at several factors when evaluating a plan of compliance, including the reasons for the late filing, upcoming corporate events, the overall financial status of the company and the likelihood of a company filing an audited report within 180 days. The review can also look at information provided by outside auditors, the SEC or other regulators.
With Grok, xAI aims to directly compete with companies including ChatGPT creator OpenAI, which Musk helped start before a conflict with co-founder Sam Altman led him to depart the project in 2018. It will also be vying with Google's Bard technology and Anthropic's Claude chatbot.
Now that Donald Trump is president-elect, Musk is beginning to actively work with the new administration on its approach to AI and tech more broadly, as part of Trump's inner circle in recent weeks.
Last week, Super Micro said it was doing everything it could to remain listed on the Nasdaq, and said a special committee of its board had investigated and found no wrongdoing. Super Micro CEO Charles Liang said the company would receive the board committee's report as soon as last week. A company spokesperson didn't respond when asked by CNBC if that report had been received.
If the Nasdaq rejects Super Micro's compliance plan, the company can request a hearing from the exchange's Hearings Panel to review the decision. Super Micro won't be immediately kicked off the exchange – the hearing panel request starts a 15-day stay for delisting, and the panel can decide to extend the deadline for up to 180 days.
Trump plans to repeal President Joe Biden's executive order on AI, according to his campaign platform, stating that it "hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology" and that "in its place, Republicans support AI Development rooted in Free Speech and Human Flourishing."
If the panel rejects that request or if Super Micro gets an extension and fails to file the updated financials, the company can still appeal the decision to another Nasdaq body called the Listing Council, which can grant an exception.
Ultimately, the Nasdaq says the extensions have a limit: 360 days from when the company's first late filing was due.
Hou this week urged the court to issue a temporary restraining order after noticing a filing by TuSimple China that signaled the company was about to transfer money (or already had) out of the United States. Two TuSimple China subsidiaries last week registered an increase in assets collectively worth $150 million, according to Hou’s declaration and information from public filings.
“These filings show a suspicious increase in registered assets between these two subsidiaries in one day as a precursor to large amount of cash transfer from U.S. to China,” reads the declaration. “The most likely scenario is that these filings in China were the preparatory steps before TuSimple U.S. transfers money to those subsidiaries in China.”
There's one factor at play that could hurt Super Micro's chances of an extension. The exchange considers whether the company has any history of being out of compliance with SEC regulations.
Between 2015 and 2017, Super Micro misstated financials and published key filings late, according to the SEC. It was delisted from the Nasdaq in 2017 and was relisted two years later.
Super Micro "might have a more difficult time obtaining extensions as the Nasdaq's literature indicates it will in part 'consider the company's specific circumstances, including the company's past compliance history' when determining whether an extension is warranted," Wedbush analyst Matt Bryson wrote in a note earlier this month. He has a neutral rating on the stock.
Hou added that such large cash transfers are “beyond normal course of business” and comparable to “TuSimple China’s heyday of operation when it was operating a large autonomous truck fleet in Shanghai” and had around 700 employees on its payroll. As of September, TuSimple China had around 200 employees.
The window of opportunity for shareholders like Hou to get what they want — which is for TuSimple to liquidate so they can recuperate some of their losses — is narrowing.
History also reveals just how long the delisting process can take.
Charles Liang, chief executive officer of Super Micro Computer Inc., right, and Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024.
TuSimple is in a gray area when it comes to enforcement from the Securities and Exchange Commission. While TuSimple delisted earlier this year, the company is still registered with the SEC and thus subject to U.S. scrutiny. Once the money goes to China, shareholders in the U.S. will have no recourse to claw back funds from their original investment.
TechCrunch has reached out to the SEC to learn if the agency is investigating TuSimple in relation to shareholder complaints.
TuSimple did not immediately respond to TechCrunch’s request for comment.
Super Micro missed an annual report filing deadline in June 2017, got an extension to December and finally got a hearing in May 2018, which gave it another extension to August of that year. It was only when it missed that deadline that the stock was delisted.
In the short term, the bigger worry for Super Micro is whether customers and suppliers start to bail.
President Joe Biden issued a new executive order on artificial intelligence — the U.S. government's first action of its kind — requiring new safety assessments, equity and civil rights guidance and research on AI's impact on the labor market.
While law enforcement agencies have warned that they're ready to apply existing law to abuses of AI and Congress has endeavored to learn more about the technology to craft new laws, the executive order could have a more immediate impact. Like all executive orders, it "has the force of law," according to a senior administration official who spoke with reporters on a call Sunday.
Aside from the compliance problems, Super Micro is a fast-growing company making one of the most in-demand products in the technology industry. Sales more than doubled last year to nearly $15 billion, according to unaudited financial reports, and the company has ample cash on its balance sheet, analysts say. Wall Street is expecting even more growth to about $25 billion in sales in its fiscal 2025, according to FactSet.
Super Micro said last week that the filing delay has "had a bit of an impact to orders." In its unaudited September quarter results reported last week, the company showed growth that was slower than Wall Street expected. It also provided light guidance.
Creating new safety and security standards for AI, including by requiring some AI companies to share safety test results with the federal government, directing the Commerce Department to create guidance for AI watermarking, and creating a cybersecurity program that can make AI tools that help identify flaws in critical software.
Protecting consumer privacy, including by creating guidelines that agencies can use to evaluate privacy techniques used in AI.
Advancing equity and civil rights by providing guidance to landlords and federal contractors to help avoid AI algorithms furthering discrimination, and creating best practices on the appropriate role of AI in the justice system, including when it's used in sentencing, risk assessments and crime forecasting.
Protecting consumers overall by directing the Department of Health and Human Services to create a program to evaluate potentially harmful AI-related health-care practices and creating resources on how educators can responsibly use AI tools.
Supporting workers by producing a report on the potential labor market implications of AI and studying the ways the federal government could support workers affected by a disruption to the labor market.
Promoting innovation and competition by expanding grants for AI research in areas such as climate change and modernizing the criteria for highly skilled immigrant workers with key expertise to stay in the U.S.
The company said one reason for its weak results was that it hadn't yet obtained enough supply of Nvidia's next-generation chip, called Blackwell, raising questions about Super Micro's relationship with its most important supplier.
"We don't believe that Super Micro's issues are a big deal for Nvidia, although it could move some sales around in the near term from one quarter to the next as customers direct orders toward Dell and others," wrote Melius Research analyst Ben Reitzes in a note this week.
Working with international partners to implement AI standards around the world.
Developing guidance for federal agencies' use and procurement of AI and speeding up the government's hiring of workers skilled in the field.
The order represents "the strongest set of actions any government in the world has ever taken on AI safety, security, and trust," White House Deputy Chief of Staff Bruce Reed said in a statement.
It builds on voluntary commitments the White House previously secured from leading AI companies and represents the first major binding government action on the technology. It also comes ahead of an AI safety summit hosted by the U.K.
The senior administration official referenced the fact that 15 major American technology companies have agreed to implement voluntary AI safety commitments but said that it "is not enough" and that Monday's executive order is a step toward concrete regulation for the technology's development.
The only other bidder was First United American Companies, which runs a website using Jones’ name to sell his supplements. The company reportedly placed a $3.5 million bid that, based on cash alone, would have won the secret auction. First United’s attorney reportedly told the judge on Thursday that the trustee changed the auction process days before, omitting a final round on Wednesday that would have given the parties a chance to outbid each other.
The trustee only chose from the sealed bids submitted last week. However, he said his decision followed Judge Lopez’s auction rules in September, describing the final round as optional.
Lopez struck a disapproving tone in court, throwing the sale into question. “We’re all going to an evidentiary hearing, and I’m going to figure out exactly what happened,” the judge reportedly said. “No one should feel comfortable with the results of this auction.”
"The President, several months ago, directed his team to pull every lever, and that's what this order does: bringing the power of the federal government to bear in a wide range of areas to manage AI's risk and harness its benefits," the official said.
In a speech Monday at the White House, Biden said he'll meet on Tuesday with Senate Majority Leader Chuck Schumer, D-N.Y., and a bipartisan group put together by Schumer. He said the meeting is to "underscore the need for congressional action."
"This executive order represents bold action, but we still need Congress to act," Biden said.
Elon Musk allowed Jones back on X (Twitter) last year after the platform “permanently” banned him in 2018 under its previous ownership.
As America’s chief satire publication (at least of those doing so consciously), The Onion’s (perhaps premature) announcement of the purchase stayed on brand. Its tone, hinting at what’s to come, resembled The Colbert Report on steroids — or maybe Jones’ “Survival Shield X-2” pills.
“Founded in 1999 on the heels of the Satanic ‘panic’ and growing steadily ever since, InfoWars has distinguished itself as an invaluable tool for brainwashing and controlling the masses,” The Onion wrote in a truth-meets-fiction announcement. “With a shrewd mix of delusional paranoia and dubious anti-aging nutrition hacks, they strive to make life both scarier and longer for everyone, a commendable goal. They are a true unicorn, capable of simultaneously inspiring public support for billionaires and stoking outrage at an inept federal state that can assassinate JFK but can’t even put a man on the Moon.”
Biden's executive order requires that large companies share safety test results with the U.S. government before the official release of AI systems. It also prioritizes the National Institute of Standards and Technology's development of standards for AI "red-teaming," or stress-testing the defenses and potential problems within systems. The Department of Commerce will develop standards for watermarking AI-generated content.
The order also addresses training data for large AI systems, and it lays out the need to evaluate how agencies collect and use commercially available data, including data purchased from data brokers, especially when that data involves personal identifiers.
If the sale still ends up in its hands, The Onion plans to rebrand Infowars as a parody of itself (more than it already was), poking fun at “weird internet personalities” like Jones, according to The New York Times. Ben Collins, the CEO of Global Tetrahedron, hasn’t said how much it paid to transform Infowars’ destructive self-parody into constructive satire. (Collins reported extensively on Infowars when covering misinformation at NBC News.) He plans to launch the rebooted site in January.
The Biden administration is also taking steps to beef up the AI workforce. Beginning Monday, the senior administration official said, workers with AI expertise can find relevant openings in the federal government on AI.gov.
The administration official said Sunday that the "most aggressive" timing for some safety and security aspects of the order involves a 90-day turnaround, and for some other aspects, that time frame could be closer to a year.
The air leak was addressed in a recent report by NASA’s Office of Inspector General (OIG), which highlighted its true severity and the risk it poses to the crew. The OIG report stated that the two space agencies can’t seem to agree on the point at which the leak should be considered unsustainable. NASA and Roscosmos met to discuss the ISS air leak, with NASA officials noting that Roscosmos “is confident they will be able to monitor and close the hatch to the Service Module prior to the leak rate reaching an untenable level,” according to the report.
“Although the teams continue to investigate the causal factors for the crack initiation and growth, the U.S. and Russian technical teams don’t have a common understanding of what the likely root cause is or the severity of the consequences of these leaks,” Cabana is quoted in SpaceNews as saying.
Monday's executive order follows a number of steps the White House has taken in recent months to create spaces to discuss the pace of AI development, as well as proposed guidelines.
Since the viral rollout of ChatGPT in November 2022 — which within two months became the fastest-growing consumer application in history, according to a UBS study — the widespread adoption of generative AI has already led to public concerns, legal battles and lawmaker questions. For instance, days after Microsoft folded ChatGPT into its Bing search engine, it was criticized for toxic speech, and popular AI image generators have come under fire for racial bias and propagating stereotypes.
The rate of air leaking from the hole increased around a week before the February 14 launch of the Progress MS-26 cargo spacecraft, which docked to the aft end of Zvezda. The hatch that connects the module to the ISS remained open for five days as the crew offloaded the cargo from Progress MS-26 onto the space station, but was closed shut afterwards.
NASA and Roscosmos are currently monitoring the leak and preparing to close the hatch to the service module when access is not required in order to minimize the amount of air lost and isolate the leak itself from the rest of the space station. If required, the space agencies are prepared to permanently shut off the hatch should the leak rate became unmanageable. The ISS would function normally, but there would be one less docking port for spacecraft delivering cargo to the space station.