In the running for one of the biggest jobs on the continent, Senegal’s Amadou Hott is no stranger to public life. As a former Minister of Economy, Planning, and Cooperation in his home country, former Vice President of the African Development Bank (AfDB), and Corporate CEO, he hopes to use all of those experiences to maximize development and impact on the continent. Excerpts from an interview with FORBES AFRICA in March:



Q. Having been a part of the AfDB, there is continuity attached to the President’s role you’re seeking. How has this journey been?



A. These are exciting times for Africa, and I feel it’s really the right time for me to step in, and following my 25 years of leadership experience across continents, in both public and private sectors, with the multilateral development banks, and having actually started and managed Senegal’s sovereign wealth fund–which is now one of the most credible sovereign funds on the continent–and having been in investment banking, mobilizing resources and capital for both the public and the private sectors, I feel I’m well-equipped now to really serve by leading this bank and supporting Africa, especially in this environment, where the needs are bigger than ever before. The young people are impatient to see their lives transformed. But, also at a time when geopolitics [has seen] the aid budget globally going down, we need a bank that is very innovative, that can really do more with less, but leverage and have a bigger impact than before…I am confident that once elected, I will be able to take the AfDB to the next level. The bank has done greatly for the last 60 years; each president has done something unique. Specifically, during the last 10 years [under President Akinwumi Adesina], we’ve seen big innovations, projects and initiatives. And I think we can build on that, to really accelerate whatever we are doing for Africa’s development.


<div class="wp-block-image">
<figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="683" src="https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-1024x683.jpg" alt="" class="wp-image-65031" style="width:566px;height:auto" srcset="https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-1024x683.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-768x512.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-1536x1024.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5547-2048x1365.jpg 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Photographs by Manelisi Dabata</figcaption></figure></div>


To take a step back and reflect on your own personal trajectory, growing up in Dakar, from a young age, what were your influences?



A. I was born in a fairly large family, with several brothers and sisters, in the suburbs of Dakar, in difficult and relatively tough neighborhoods. My father was a truck driver, but he was keen to see us study. He would push us when we came back home from school and say, ‘you have to read everything you studied today’. We studied hard.



I received a scholarship from the government of Senegal, and went on to study in Strasbourg, and then in Paris. As a child, I loved mathematics. We had a blackboard in our room, where my siblings and I, and even friends from the neighborhood, would learn math.



I wanted to study overseas and become a professor. I wanted to do a PhD but I became a banker by accident. During the summer of 1995, I was playing football in Paris when I met a banker, played football with him and at the end of the game in the evening, I told him my background and he said ‘you should get into banking, you can teach later if you want but these roles in banking are exciting where you can use math and finance’, and I did.



Q. What charted your rise to becoming a public servant? Is this something you always wanted to do?



A. I had left to the investment banking world, and was called into government to start from scratch a sovereign wealth fund to invest in our economy–not a sovereign wealth fund that would invest overseas, but one that would leverage small money and build the projects, develop them, and make them bankable, then attract both domestic and international capital. I started with hiring a very good team and doing the first solar deals, the independent power producers, where we produce solar power and sell it to the utility, which many countries are doing now in Africa, but we started early on solar. That was in 2015 and we developed the project, supporting a local developer, then attracting an international developer&#8230;



Q. If you become the president of the AfDB, how will you navigate complex regional dynamics, and still stay a neutral and impartial continental institution?



A. My background and experience have enabled me to be able to navigate complex situations, and adapt myself to cultures globally. I haven’t had any issues making sure that I’m adapting myself also to the continent’s cultural, political, and economic diversity. This requires us to understand countries, but also regional dynamics. I think that is very critical, and I’m prepared and equipped to do that better than anyone else. Because, from 2004, even if I was outside Africa, all my interventions up to now have been focused on the continent. So, while I was a banker in London, at ABN AMRO, for example, I was focused on the continent. While in Dubai, I was a banker focused on the continent. In Nigeria too. And, then, at the AfDB as a vice president, working with both the private and public sector, increasing the investment with the private sector by 150% on the energy side within just two and a half years… all of that means you need to understand local cultures; you can manage staff in the most impactful way.


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<figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="683" height="1024" src="https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-683x1024.jpg" alt="" class="wp-image-65032" srcset="https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-683x1024.jpg 683w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-200x300.jpg 200w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-768x1152.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-1024x1536.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-1365x2048.jpg 1365w, https://cms.forbesafrica.com/wp-content/uploads/2025/04/IMG_5439-scaled.jpg 1707w" sizes="auto, (max-width: 683px) 100vw, 683px" /><figcaption class="wp-element-caption">Photographs by Manelisi Dabata</figcaption></figure></div>


Q. How do you view the African diaspora? People say Africa is going to the rest of the world, but it’s actually the world catching up with what Africa has in terms of talent and natural resources…



A. First of all, from the outside, in particular, within our diaspora, people always want to come back to Africa if they find the right opportunity, whether as entrepreneurs or working for an international organization or multinational, people know that the future is Africa. Within 10 years, we’ll have 500 million people aged between 15 and 35, and we know the natural resources the continent has. Some of them are very strategic for energy transition, including the critical mineral resources Africa has. In this new era, everyone would want to have a piece of that, but Africa needs to make sure also that its interests are defended, that it is transforming its natural resources as much as possible. And that it’s not just exporting raw materials. People talk about it, but I think it’s the time to do it. If you do not have the right energy systems, the right business environment, there is no way we can add value to our natural resources on the ground. Because you need energy, you need to ask for capital, you need to do your reforms and have the best business environment possible, such as what countries in Southeast Asia did in the 1960s and 1970s. You do the best reforms, you create the conditions and the people in our own continent will feel more comfortable to invest at home, and then you also attract international investors and FDIs.



 Q. &nbsp; As President, how would you elevate the discussion on infrastructure development?



A. It’s critical to have the right energy systems, to have affordable, reliable, as-clean-as-possible energy, in particular, electricity, and also focus on the system that will help us industrialize. This is critical, needing a lot of resources and reforms. The AfDB has launched a new initiative with the World Bank, called Mission 300, with the aim to provide access to electricity to 300 million people [in sub-Saharan Africa by 2030]. As president, I will focus on that and make it happen over the next five years. But then, you need the transport infrastructure, the digital infrastructure. There is no way the African Continental Free Trade Area agreement will become a reality without the connectivity, the road corridors, the rails, and the bank needs now to mobilize both public and private resources, with a big shift towards private sector mobilization. That’s very critical for the future, because we also want to create jobs, and jobs are created by private sector investment; not only the public sector.



Q. &nbsp; How&nbsp;are&nbsp;you going to enable the entrepreneurial ecosystem for these young people?



A. I want to stress the importance of education and enhancing the skills of our young people to make sure they are ready for the economic opportunities our continent will provide… Number one, I would rather train almost everybody and have most of them stay on the continent to help build the continent&#8230; Number two, we cannot provide economic opportunities to everybody via the job market. Some of them will be entrepreneurs and self-employed innovators who will be creating jobs for others. And you need to support them with technical assistance, but also grant money or venture capital equity. The bank has what we call the youth entrepreneurship investment program and has already developed it in a few countries. We have got to make sure that becomes a reality, and adapt it to our countries’ institutional frameworks. The goal is to provide technical assistance and equity investment guarantees pretty early, so that the banking sector can be ready to finance those innovators. And then also work with the government so that the rules, regulations and framework for supporting startups are in place. In some countries, they are, but in some countries, we don’t have them yet. And I think the bank can engage in active dialogue with those countries so that while you’re putting in place the youth entrepreneurship investment banks, we are also fostering the right reforms and regulations. For me, that is extremely important.



Q. &nbsp; What are your plans for prioritizing climate change? What is on your agenda?



A. The bank has done very well in climate finance, and during my vice presidency. In 2017, 100% of the bank’s investment in electricity production was in renewable energy. For me, maximizing renewable energy is very important because the continent has the resources and you cannot easily export renewable energy, but you can produce gas or other technologies and export, instead of consuming it yourselves. But your systems cannot have only renewable energy. You have got to have a base load that allows you to maximize renewable energy. You can do storage as well, but all of that has limitations, so the system has to have the right energy mix to achieve two goals mainly, to make sure that we have access to affordable, reliable and the cleanest-possible energy; and then industrialize, and you cannot industrialize only with renewable energy. It’s still expensive to try to industrialize with say, green hydrogen. The day it becomes cheaper, Africa will be unstoppable in terms of having green industrialization. But it’s a process, and we cannot wait for that to happen. That’s why it’s very important to use gas, which is stable energy, which is also the least polluting of all the non-renewable energy technologies, and for me, industrialization, transforming our natural resources into something that helps us create jobs and increase the wealth for ourselves, is very important.



Q. &nbsp; A corporate CEO, a public servant, a DFI leader… which role have you enjoyed the most?



A. To tell you the truth, I have enjoyed all of them–as a banking CEO, a sovereign wealth fund CEO, as the vice president of the AfDB, and it has also been equally exciting as a minister. As the president of the bank, I would use those key experiences to make sure we are maximizing development and impact on the continent and that the bank is seen as the most friendly and most-efficient bank with the private sector and with the government. This is my goal, transforming the private sector business–if I can use those words–of the bank.



Q. You have worked with Africa’s richest man, Aliko Dangote. What have your learnings been with the continent’s high-net-worth individuals?



A. I worked with Aliko and also with Tony Elumelu, another billionaire. Especially in Nigeria, what they all have in common is hard work and the boldness. If you work with them, you have got to work extremely hard. And of course, I also worked with Akinwumi Adesina, the president of the AfDB, very closely; these are extremely hard-working and driven people. If you work with them, you have got to do the same, otherwise, you’ll be left behind.



Q. &nbsp; One last question: if you win and go on to become President, are you going to continue to find time to play football?



A. (Laughs) Why not? Maybe I will organize a game or championship&#8230; and every year, we play football and then cooperate more and work more together. I haven’t played football over the last three months, but then, I have been walking and running. And even when I travel, I try to jog in the city for 30 minutes. When I am at home, my two daughters, aged 22 and 17, and my son, aged 12, sometimes organize football games with their friends, and they invite me and I run with them. Sometimes, they’re surprised!

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Amadou Hott On Africa: ‘Create Jobs And Increase The Wealth For Ourselves’

&#8220;This will be a defining year for AI,” said Mark Zuckerberg on his <a href="https://www.facebook.com/zuck/posts/pfbid0219ude255AKkmk4JAueXZeZ9zpjNYio2tBkd7bNmCaRbJ6iJaVVjypUgDg78CNdq5l" target="_blank" rel="noreferrer noopener">Facebook blog</a> last month, hyping his plan to invest $65 billion in 2025, most of it in support of growing Meta’s AI capabilities and building upon its Llama 4 model.



The locus of these efforts appears to be on 2,250 acres of flat farmland in northeast Louisiana, where Meta has begun work on a $10 billion data center project. This grandest of Meta’s 20 worldwide data centers will be called Sucré (i.e. sweet) and cover 4 million square feet of floor space on 2,250 acres



To power racks lined with thousands of Nvidia H100 GPUs, Sucre will require 2.23 gigawatts of 24/7 electricity (enough to power more than 2 million homes), which utility company Entergy will provide via twin high-efficiency natural gas turbines at a capital cost of $3.2 billion. Meta’s plans also call for $250 million in related infrastructure spending, including roads and water systems. Construction jobs will peak at 5,000.



Is this really going to get built? And is it even a good idea, given recent revelations from DeepSeek that building advanced machine intelligence might be cheaper, and less energy-intensive than initially believed.



For some perspective I talked with Zach Krause, an analyst at energy consultancy&nbsp;<a href="https://www.eastdaley.com/" rel="noreferrer noopener" target="_blank">East Daley Analytics</a>, in Denver, who tracks data center announcements and works on handicapping both their likelihood of getting built, and how developers expect to provide for their electricity demand. Krause says he has been encouraging his institutional investor clients (many natural gas and power generation investors among them) not to panic over the implications.



“We’ve seen a short-term overreaction by the market to new tech,” says Krause, who includes on his list 290 datacenter projects with a decent likelihood of getting built.



Even if AI energy efficiency improves exponentially, the silicon brains of the future will need all of those server farms, and then some. That’s because of a dynamic called the Jevons Paradox, named after English economist William Jevons, who in 1865 noticed that efficiency breakthroughs in steam engine design did not reduce coal consumption at all, but instead caused demand for the fuel to surge. Jevons Paradox has also been observed, for example, in explosive demand for modern conveniences like air conditioning, passenger airplanes, and MRI machines.



Microsoft CEO Satya Nadella in late January&nbsp;<a href="https://x.com/satyanadella/status/1883753899255046301" rel="noreferrer noopener" target="_blank">tweeted about the Jevons&nbsp;</a>paradox: “As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of.” Analyst Hugh Wynne, at Power Research Group, concurs: “The demand for power to train and operate AI models could be materially reduced. However, if these efficiency gains also drive down the cost of AI, the adoption of AI-based services could be significantly faster and more widespread” — thus wiping out any expected energy savings.



Krause sees America’s tsunami of advanced data centers demanding an additional 81 gigawatts of electricity by 2030. That’s enough to power all of Texas today. If developers used natural gas to run them all it would take about 12.9 billion cubic feet per day, he figures — equal to 10% of national natural gas supplies. “The Meta project is circled in red ink for its eventual impact to the natural gas market,” he says, figuring that Sucre will require 360 million cubic feet of natural gas per day, the energy equivalent of about 60,000 barrels of oil.



And Sucré is not even the biggest. OpenAI is partnering with Oracle, Softbank, Microsoft and others on the Stargate project, which they say will be a $500 billion, multi-site datacenter expansion, beginning with Abilene, Texas. In time, Stargate will need more than 5 gigawatts of electricity, though Krause has only factored in a small fraction of that demand until they build something. Microsoft plans $80 billion of capital investment on AI and cloud computing this year. Meanwhile, Amazon has earmarked $100 billion for AI over the next decade, and may spend $35 billion just in northern Virginia’s datacenter alley. Jeff Bezos has also invested heavily in the development of advanced nuclear technology.



A trend to watch: Energy giant Chevron has partnered with gas turbine specialist G.E. Vernova to develop the power systems for 4 gigawatts of datacenters. Chevron, Exxon and the like already have deep expertise in generating power at their giant oil refineries. By siting datacenters adjacent to existing natural gas fields, they can help AI developers sidestep time-consuming permitting hoops that regulated utility companies and pipeline operators must jump through. Says Krause: “The utilities are slower to react, while the pipelines and gas producers are drooling on the other side.&#8221;



Zuckerberg managed to sidestep NIMBY issues in Louisiana, where politicians handed Meta fat tax incentives to build. Gov. Jeff Landry oddly declared that the hyperscale server farm “revitalizes one of our state’s beautiful rural areas.” Northern Louisiana is also long on natural gas, thanks to fracking in the Haynesville shale.



Meta, which has committed to achieving carbon neutrality in its operations, is already working to assuage the guilt of relying on carbon dioxide emitting natural gas to run Sucré. In December Meta announced a deal with billionaire Michael Polsky’s power developer&nbsp;<a href="https://invenergy.com/news/invenergy-to-provide-over-760mw-in-renewable-energy-supporting-meta-s-energy-needs-in-line-with-its-clean-and-renewable-energy-goals" rel="noreferrer noopener" target="_blank">Invenergy to buy&nbsp;</a>the green attributes (known as renewable energy certificates) from the 760 megawatt capacity of four big solar farms under construction. And in Louisiana Meta has pledged to invest $1.5 billion alongside Entergy to build out more wind and solar.



Give it another 10 years and Meta will hopefully be able to retrofit the datacenter to run on zero-emissions advanced nuclear. Zuckerberg already looked in to building a datacenter adjacent to a nuclear power plant (<a href="https://www.popsci.com/environment/meta-nuclear-power-bee/" rel="noreferrer noopener" target="_blank">rumored to be California’s Diablo Canyon&nbsp;</a>site) but was stymied by the discovery of an endangered bee species nearby.



It’s why Krause excludes from his datacenter list dozens of other projects more aspirational than real. “The upper bound is inflated. Some developers take a shotgun approach to permitting — they&#8217;re trying to get land rezoned by the multitudes.&#8221;

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The Trillion-Dollar A.I. Data Center Tsunami —Coming To A Field Near You

Nigerian singer, songwriter and actor, Tiwa Savage is determined to build an empire that will cement her status among the world’s self-made billionaire women.



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“I want to go into my mogul era – billionaire Tiwa Savage.”
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Tiwatope Omolara Savage, professionally known as Tiwa Savage, at the age of 45, is standing on the precipice of her next great reinvention. Her contemporaries have shown Savage the path. Now, she is ready to chart her own.



It is a journey that has been decades in the making, and one that began in London, where a teenage Savage discovered a love for performing during drama classes.



“When I was in school, there are basic subjects like math, English, and there are also electives like sports, drama, music – I chose drama and just even from earlier on, I knew that I had a gift for acting. Even when I started my music career, I knew, at some point, I was going to go back into that field,” she recalls to FORBES AFRICA via a Zoom call on a warm afternoon from her home in Lagos, Nigeria.



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“Why are we trying to break into another market? We should build our own to be the one others try to break into.”
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That passion never faded, even as music took center stage in her life. From her music videos to the depth in her lyrics, she was never content with just one avenue of expression.



For those who followed Savage from her 2010 breakout hit, Kele Kele Love to the global collaborations that she’s done in the present, this new chapter feels like a natural progression.



Her work seems to transcend genre and medium. Somebody’s Son, her duet with American singer Brandy Norwood, showcased her vocal prowess. Ife with Nigerian Fuji legend, Wasiu ‘Pasuma’ Odetola proved she could pivot effortlessly across cultures and sounds.



“Growing up in Nigeria, then moving to the United Kingdom and studying jazz in America, I absorbed different musical influences,” she explains.



“I can do a jazz record, a garage song, or an Afrobeats track, and it all feels authentic. I have lived these experiences.”



This authenticity is why her music has earned her historical accolades: the first African woman to sell out London’s Indigo at The O2, the first African woman to win Best African Act at the MTV Europe Music Awards, and a performer at King Charles III’s coronation concert.



As noted, her transition to film was inevitable. As the executive producer of Water and Garri, released in 2024, she found herself immersed in the filmmaking process, drawn to the meticulous nature of the craft.



“It was a lot of work, but there are similarities to music,” she says, as she adjusts her black Dior glasses and leans into the camera.



“I am used to repeating melodies until they are perfect. Watching scenes over and over, making corrections — it was not frustrating. It was exciting.”



Edward Israel-Ayide, an industry insider in the early days of Savage’s career, describes her as a ‘transformer’.



“What stands out is not just her success but how she has consistently adapted and evolved at every turn, emerging stronger from every challenge to become the industry’s ultimate comeback queen.”



He continues, stating that “she understood early on that being an artist in Africa meant being more than just a musician. You had to be a brand, a business, a movement”.



What is remarkable about Tiwa’s journey is how she has managed to stay relevant through every phase of the industry’s growth. From those early networking events to becoming a social media force with 35 million followers, from her first Nigerian stage performance at Industry Nite to co-producing Water and Garrí for Prime Video, she has consistently pushed beyond what we thought was possible for an African artist,” adds Israel-Ayide.



Now, Savage is thinking bigger. Her ambitions extend far beyond entertainment. “I want to go into my mogul era – billionaire Tiwa Savage,” she says with conviction.



The blueprint is clear—skincare, fashion, philanthropy, and, most significantly, education. Savage envisions a music school that does not just produce artists but also nurtures industry professionals, such as songwriters, producers, music therapists, and lawyers.



“I think a lot of times when people think of music, they think of just being an artist,” she explains. “But there are so many aspects to the industry. I want to build a school or scholarship program that teaches that.”



Even as she dreams of reshaping the industry, she remains as candid as ever: “Everyone always says to me, ‘when are you going to sign an artist?’ I don&#8217;t think I have the gift to sign another artist, because artists are stressful… I could just be sleeping, and then I will wake up and my artist is trending for something else”.



“But I do have the gift to help, which is why I am trying to do the music school, where you can go and later sign to a label that can actually help you,’’ she explains.



Ownership is another pillar of her vision. Afrobeats is no longer a niche genre; it is a global movement. As its influence grows, so does the need for African artists to retain control.



“We need to own our art, our publishing, our labels,” she says. “We need to tell our own stories.”



Chude Jideonwo, a media entrepreneur whose 25-year career spans advertising, public relations, television, radio, print, and digital media, echoes this sentiment.



“When it comes to contemporary people, Africa has so many incredible people – Tiwa Savage started her new career when she was in her 40s. There are so many stories from inside the belly of Africa that we have not told in a way that is accessible to the mainstream for the everyday young people.”



Savage has a radical dream: to see Africa become a mainstream music market. “Why are we trying to break into another market? We should build our own to be the one others try to break into,” she states. “If we had the right infrastructure, affordable data, and investment, we would not have to chase validation elsewhere.”



It is an audacious vision, but Savage has never been one to shrink from a challenge. From navigating a male-dominated industry to defining Afrobeats on her own terms, she has always played the long game. Now, as she prepares for her next act, she is more certain than ever of her purpose.



“Cherish the beginning,” she advises emerging artists. “A lot of artists rush to the top, but once you are there, you face pressures — streams, concerts, obligations. When you start, you are free to create without limitations. Build a strong foundation, so when opinions come at you, you do not lose yourself.”



With her fifth studio album, This One Is Personal, set for release early this summer, Savage doesn’t seem to be slowing down, professionally. But, she has contemplated modifying her pace.



“Not retirement, per se,” she corrects, laughing. “But sometimes the pressure gets to you. That is why having a strong team is important. Plus, let us be real, I need to keep making money. I do not know how to do anything else.”



“I really want to delve into my philanthropy. I want to start different NGOs [non-governmental organizations] to help women, to help young girls.’’



Savage is no longer just a music icon. She is an architect of the future — one where African music, business, and culture are not just global but dominant. The ‘Queen of Afrobeats’ is ready to claim her crown as the ‘Queen of Industry’.

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The Queen Of Afrobeats Is Powering Ahead, Driven By Purpose And Passion

Feuding with Drake turned the ‘Not Like Us’ performer into hip-hop’s hottest artist. Now he will take music’s biggest stage in New Orleans—for free.



<abbr>T</abbr>he effects of last summer’s rap feud&nbsp;between&nbsp;<a href="https://www.forbes.com/profile/kendrick-lamar/" target="_blank" rel="noreferrer noopener">Kendrick Lamar</a>&nbsp;and&nbsp;<a href="https://www.forbes.com/profile/drake/" target="_blank" rel="noreferrer noopener">Drake</a>&nbsp;continue to reverberate through the music industry, and the careers of its two combatants. This month,&nbsp;<a href="https://www.forbes.com/sites/conormurray/2025/01/15/drake-sues-universal-music-group-for-defamation-over-kendrick-lamars-not-like-us/">Drake made headlines for bringing a defamation lawsuit</a>&nbsp;against Universal Music Group for its role in the back-and-forth, while Lamar prepares for the biggest gig of his life—headlining the halftime show at Super Bowl LIX on February 9.



It’s hard to imagine how the 37-year-old Lamar, who for much of his career has been seen as a critical darling with a cult-like following, would have been chosen by halftime show executive producer Jay-Z and his Roc Nation for music’s biggest stage were it not for the beef and the series of diss tracks it produced. “Not Like Us,” Lamar’s anthemic takedown of hip-hop’s best-selling artist, hit more than a billion streams on Spotify in 2024 and spent a record-setting 21 consecutive weeks atop Billboard’s Hot Rap Songs chart.



“The feud between him and Drake made him bigger; there’s no one that can sit here and argue that,” says Antwan “Amadeus” Thompson Sr., a multi-platinum music producer. “But [the Super Bowl] is going to catapult [Lamar’s] career to a whole other level. And I think it’s very important that artists take advantage of this because all eyes will be on him.&#8221;



The exposure given to halftime performers, playing in front of more than 80,000 fans inside New Orleans’ Superdome and more than 100 million across the country on TV, is why the Super Bowl is considered the most prestigious gig on the music calendar.



Every artist on the planet wants to take that stage, even if it means performing for free.



And that’s exactly what they’re asked to do. As has been&nbsp;<a href="https://www.forbes.com/sites/zackomalleygreenburg/2016/02/05/why-coldplay-and-beyonce-wont-be-paid-for-their-super-bowl-halftime-gig/">the custom for halftime headliners</a>&nbsp;for many years, Lamar won’t be paid for his 12-to-14-minute performance, other than the negligible union-mandated minimum. (Last year’s headliner, Usher, reportedly received $671.)



The NFL and halftime presenting sponsor Apple Music do cover the cost of the production, which in many years stretches to more than $10 million for sets that don’t last longer than 15 minutes. Some recent artists have chosen to pay millions more from their own pockets to maximize the Super Bowl spectacle.



The tradeoff is well worth it. After last year’s show, Usher reportedly received a 550% bump in overall Spotify streams, similar to what other performers have experienced in recent years.&nbsp;<a href="https://www.forbes.com/sites/maddieberg/2021/08/04/fentys-fortune-rihanna-is-now-officially-a-billionaire/">Rihanna</a>, the headliner in 2023, snuck in a plug for her&nbsp;<a href="https://www.forbes.com/sites/tylerroush/2024/06/04/rihanna-launching-fenty-hair-billionaire-pop-star-expands-beauty-empire/">Fenty Beauty</a>&nbsp;brand during her set that was worth an estimated $44 million in earned media.



Like many halftime performers before him, Lamar will ride the Super Bowl bump into a 19-stop stadium tour across North America this summer alongside SZA, who has already been announced as a guest star for the halftime show. The pair have two songs together, “Luther” and “Gloria,” on Lamar’s new album,&nbsp;GNX, which he surprise-released in December. In addition, a movie produced by Lamar and&nbsp;South Park&nbsp;creators Trey Parker and Matt Stone is set to debut in July, distributed by Paramount.



It all represents a major step-up for Lamar, a member of the&nbsp;<a href="https://www.forbes.com/sites/zackomalleygreenburg/2017/11/14/kendrick-lamar-conscious-capitalist-the-30-under-30-cover-interview/">Forbes 30 Under 30 class of 2014</a>&nbsp;who has won 17 Grammy Awards but never headlined stadium-sized shows before. His first taste came in 2022, when he was given a two-minute spot during Super Bowl LVI’s halftime performance led by Dr. Dre and Snoop Dogg, seen as a passing of the torch in West Coast rap.



Because Lamar is so closely identified with his hometown of Los Angeles, being chosen for this year’s Super Bowl in New Orleans was&nbsp;<a href="https://www.forbes.com/sites/ariannajohnson/2024/09/09/nicki-minaj-and-others-seemingly-call-out-jay-z-for-picking-kendrick-lamar-for-super-bowl-over-lil-wayne-what-to-know/">a curious choice</a>. Since Jay-Z took on his role producing the halftime show in 2019, headlining artists have gotten younger, more diverse and more closely associated with the game’s host city. The obvious geographical choice in this case would have been New Orleans native and multi-platinum artist Lil Wayne.



“If I was Jay-Z, I would’ve absolutely gone with Lil Wayne,” says Thompson. He still believes a special guest appearance in the show is possible, but unlikely, in part because of Wayne’s allegiances to Drake, whom Wayne first discovered and signed to his Young Money label in 2008.



Yet Thompson admits that Lamar is unquestionably “the hottest artist in hip-hop” right now, and in the wake of the devastation left by January’s wildfire in Los Angeles, his selection suddenly has greater significance. One of the things fans admire about Lamar is that he raps about and advocates for substantive issues, whether it’s mental health or uniting the gangs in Los Angeles. Lamar’s music has a level of meaning and depth that are rare to see from a stage as big as the Super Bowl.



“He’s been the one to take stands during difficult times and talk about things that a lot of artists wouldn’t touch on,” says Thompson.



Jasmine Young, who serves as director of the Warner Music/Blavatnik Music Center at Howard University and previously worked on marketing campaigns at Def Jam records, agrees that the Super Bowl will boost Lamar’s career but adds that the NFL also stands to benefit from his cultural resonance just as much as he will benefit from its massive global audience.



“Nowadays people use hip-hop to sell their brands,” says Young. “You really can’t sell your brand without hip-hop.”



It’s a sentiment that echoes Lamar’s own words when he was announced for this year’s show back in September. “Rap music is still the most impactful genre to date,” Lamar said. “And I’ll be there to remind the world why. They got the right one.”

Apple Music Super Bowl LIX Halftime Show

Why Kendrick Lamar Won’t Get Paid For The Super Bowl Halftime Show

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MicroStrategy Isn’t Just A Giant Bitcoin Bet–It’s A Revolution In Corporate Finance

The seemingly overnight success of DeepSeek wiped billions of dollars from the fortunes of the world’s richest people—and catapulted the Chinese AI firm’s founder, Liang Wenfeng, into the three-comma-club.



<abbr>On</abbr> January 20, on the same day as Donald Trump’s inauguration in Washington, Chinese premier Li Qiang held a meeting with experts to consult on the Chinese government’s policies for the year ahead. It was a low-key event that got little attention outside of China. One of the few people to speak at the gathering was Liang Wenfeng, a bespectacled hedge fund founder and AI entrepreneur who was then little-known outside the country. That was also the day his firm DeepSeek launched its latest model, R1, and claimed it rivals OpenAI’s latest reasoning model.



Within a week, DeepSeek’s app had rocketed to the top of app stores in the United States, dethroning those of its competitors including OpenAI’s ChatGPT and Anthropic’s Claude and turning&nbsp;<a href="https://www.forbes.com/sites/rashishrivastava/2025/01/28/deepseek-trump-silicon-valley/">Liang and his AI firm into household names.</a>



The best-known AI startups in the U.S. are worth tens of billions of dollars—ranging from $50 billion for Elon Musk’s xAI to $157 billion for OpenAI—and have raised huge sums from the world’s most prominent investors, including Microsoft, Amazon and Silicon Valley’s top venture capital shops. Unlike its U.S. competitors, DeepSeek appears to have no external investors outside of Liang and his three cofounders. According to Chinese corporate records, Liang owns about 84% of the Hangzhou-based firm, which he founded in 2023 and financed with funds from High-Flyer Capital Management, the quantitative trading hedge fund he cofounded in 2015.



How much is Liang’s open-source AI model worth?&nbsp;Forbes&nbsp;spoke to five analysts and investors who offered a range of potential valuations, but the three who provided a specific number agreed DeepSeek is worth at least $1 billion—and potentially far more, despite the fact that it doesn’t yet generate much revenue. Right now, DeepSeek has one paid product: developer access to its models. Its reasoning model costs $2.19 per million output tokens (on average 750,000 words), far less than OpenAI’s $60. That low price could simply be to undercut larger competitors OpenAI and Anthropic to capture market share, but&nbsp;Forbes&nbsp;estimates that DeepSeek generates around $6 million in annualized revenue per million paying users, using estimates of a typical user’s token usage from investment firm D.A. Davidson.



Apply that to a revenue multiple of 65 (somewhere between that of Anthropic and Chinese open-source AI startup 01.AI, which raised outside capital in late 2023), and DeepSeek would need around 3 million paying users to reach a billion-dollar valuation. More than 3.6 million people downloaded DeepSeek’s app in its first two weeks, per&nbsp;<a href="https://appfigures.com/" rel="noreferrer noopener" target="_blank">Appfigures</a>&nbsp;data. William Blair partner and software analyst Arjun Bhatia thinks that less than 10% of that number are paying users—but also says the multiple should be applied to DeepSeek’s user count a year or two from now.



Regardless of DeepSeek’s exact revenue,&nbsp;Forbes&nbsp;estimates it’s worth at least $1 billion—in part because state-of-the-art models like DeepSeek’s are often valued at their “blue-sky potential” rather than as a multiple of revenue, according to tech investor and Corpora.ai CEO Mel Morris. DeepSeek is arguably in the “top five AI labs in the world right now,” says D.A. Davidson analyst Alexander Platt, adding that it should be worth more to “account for the research horsepower there which isn’t necessarily monetizable.”



Bhatia says $1 billion “seems like a very low number” even after the “China discount” (due to&nbsp;<a href="https://www.forbes.com/sites/thomasbrewster/2025/01/29/its-the-new-tiktok-national-security-concerns-spike-over-chinas-deepseek/">geopolitical uncertainty since DeepSeek</a>&nbsp;is a Chinese company), while Morris pegs DeepSeek’s value at $10 billion. “There might even be an annoyance factor where someone might actually be prepared to pay that just to take them out of the picture,” he says.



There’s also the case of DeepSeek’s Chinese competitors—none of which seem to have achieved performance as good as DeepSeek’s, but all of which external investors have valued at $1 billion or more in various funding rounds. DeepSeek hasn’t raised VC funding in part because Liang believes VCs want to “exit and hope to commercialize products as soon as possible,” which didn’t align with DeepSeek’s research priorities, he told Chinese tech outlet&nbsp;<a href="https://36kr.com/p/2272896094586500" rel="noreferrer noopener" target="_blank">36Kr</a>&nbsp;in 2023.



On top of that, Liang also owns at least 76% of High-Flyer, which has $8 billion in assets according to financial data provider Preqin.&nbsp;Forbes&nbsp;values High-Flyer at $240 million, with Liang’s stake worth about $180 million. (Chinese corporate records also show that he owns 85% of another High-Flyer entity that was first registered in 2015 and manages 65 of the firm’s 503 active funds, meaning his equity in the firm could be even higher.) Put it all together and Liang is likely worth at least $1 billion, making him the latest founder to mint a fortune from AI.



Not that he likely cares much. “An exciting thing cannot be measured purely by how much it is worth,” Liang told 36Kr, speaking of DeepSeek and adding how he’d been interested in testing the limits of computing power since 2012. “It’s like buying a piano for the home. On one hand, you can afford to buy it; on the other, it’s because there’s a group of people eager to make music with it.” Liang and his firm, which are likely closed due to Chinese New Year, did not yet return&nbsp;Forbes’&nbsp;requests for comment.



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Liang was born in 1985 and grew up in the port city of Zhanjiang in southern China. The son of a primary school teacher, he studied artificial intelligence at Zhejiang University in Hangzhou and got a bachelor’s in electronic engineering in 2006 and a master’s in information and communication engineering four years later.



While he was still in graduate school, he started exploring how to fully automate trading on China’s domestic stock market. In 2013 he founded his first investment firm, Hangzhou Jacobi—named for German mathematician Carl Jacobi—with his college classmate Xu Jin. Two years later the pair cofounded High-Flyer with another classmate, and the trio used math and AI techniques to build a hedge fund.



At that point, Liang already had 100 graphics processing units—the high-tech chips that help train AI models—powering High-Flyer’s investment decisions. By 2019, High-Flyer had become one of the largest and best-performing quantitative trading firms in China, and Liang spent nearly $30 million expanding that footprint to 1,100 chips and building his own facilities to house them. He also doubled down on AI, setting up a separate company—Hangzhou High-Flyer AI—to research AI algorithms and their applications and expanded High-Flyer overseas, setting up a fund registered in Hong Kong. The firm has a similar structure to most hedge funds, charging 2% of assets in annual management fees and 20% of profits for its “enhanced funds” while charging a higher profit fee for investors in its quantitative hedging and Hong Kong-based funds.



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In 2021, as High-Flyer reached a peak of around $14 billion in assets under management—generating an estimated windfall of more than $200 million in management fees for the firm—Liang spent another $155 million to buy 10,000 of Nvidia’s A100 chips. In a 2021 pitch deck for High-Flyer viewed by&nbsp;Forbes, the firm revealed it spent 60% of its research funding on its AI lab. That investment came after one of High-Flyer’s best years in 2020, when one of the firm’s earliest and flagship funds—targeting the Chinese CSI 500 stock index—outperformed the index by 50%, posting an annual return of 71% thanks to its use of an AI-powered prediction model that forecast which stocks would perform better. A graph of the firm’s history in the deck showed an upwards-sloping line with a picture of a rocket next to the year 2020, noting that High-Flyer was “looking towards the future.”



But the funds’ performance started to decline in late 2021, partly due to its AI mistiming trades on the market. High-Flyer closed new subscriptions to its funds in November that year and an executive&nbsp;<a href="https://mp.weixin.qq.com/s?__biz=MzIyODEyNDYzMw==&amp;mid=2652893685&amp;idx=2&amp;sn=48fb607900a0cd0b92b9f77d13fbd896&amp;chksm=f3bde343c4ca6a55dcadefcd1e14a750c57be6abc0141e3e1cbb4f6621efbea0840b55146c52&amp;mpshare=1&amp;scene=1&amp;srcid=1228RDEIcbOkF7CpIhYTab5Y&amp;sharer_sharetime=1640735749412&amp;sharer_shareid=05f29d8d151ab4a2abdd858f51710915&amp;exportkey=AdyMXnj1zOaCX7ywVQTgWTw%3D&amp;pass_ticket=%2B6O04yXGbvxmVc2FZX6bnXZNOGdOTeNJnOiTSk5AmsxZnNMwtfQ0Tu9th7nfYFwq&amp;wx_header=0#rd" rel="noreferrer noopener" target="_blank">apologized</a>&nbsp;on social media for the poor returns a month later. The firm then put about $55 million of its own cash into its funds in January 2022, and by the end of the year it had recovered, with High-Flyer’s three main funds posting returns higher than 15% compared to a more than 20% loss for the broader market in 2022.



Then came DeepSeek. In April 2023 the firm announced in a post on its WeChat account—titled “High-Flyer’s New Journey”—that it had established a new firm named DeepSeek to build an artificial general intelligence (AGI) model. Liang funded DeepSeek himself, in part with High-Flyer proceeds, and enlisted his team of mostly new grads from top Chinese universities. Liang was driven by his curiosity to push the boundaries of what AI can do, and not necessarily profit, he&nbsp;<a href="https://36kr.com/p/2272896094586500" rel="noreferrer noopener" target="_blank">told</a>&nbsp;36Kr in 2023.



Around that time, perhaps realizing DeepSeek’s potential and amid the Chinese government’s regulatory crackdown on quantitative trading, Liang started to scale down High-Flyer to focus on the new firm. In October 2023, a High-Flyer representative&nbsp;<a href="https://www.cls.cn/detail/1498506" rel="noreferrer noopener" target="_blank">told Chinese financial outlet Cailianshe</a>&nbsp;that High-Flyer’s business would be divided into two units—artificial intelligence research and the hedge fund—which would be “managed by two parallel companies under the same controller,” a reference to Liang. High-Flyer also reduced its scale to about $6 billion in assets under management at the time.



Last year, as DeepSeek built out its models, High-Flyer adjusted its strategies and abandoned its market-neutral products, which pick both long and short positions on stocks, focusing only on long positions instead. The firm is still active—it invested $35 million of its own cash into its funds in February 2024 and its assets appear to have ticked up again—but its performance last year was middling. Out of 65 High-Flyer funds that report financials, 36 of them showed losses of up to 6% in value in 2024 while another 29 posted gains up to nearly 18%, according to&nbsp;<a href="https://www.sohu.com/a/843673666_120702" rel="noreferrer noopener" target="_blank">Chinese financial data firm Tonghuashun.</a>



Now, all the attention is on DeepSeek. That’s largely thanks to its claims that it trained its V3 model, released in December, with far fewer resources than the much larger OpenAI—$6 million vs. $100 million for GPT-4—and with less sophisticated chips, though the GPT-4 number could include chip and personnel costs. (A few differences in the structure of DeepSeek’s model makes it smaller, and therefore cheaper, while losing minimal accuracy: akin to writing numbers with fewer decimal places, reading in whole phrases at a time instead of word-by-word, and creating a system that divides the model’s knowledge among “experts,” only a few of which need to be active at a time.) On top of that, it claims that its reasoning model R1, released in January, can rival OpenAI’s “o1” model on tasks like coding and solving complex math problems. Notably, unlike those of OpenAI, DeepSeek’s models are open-source, meaning anybody can access the code for free.



DeepSeek made “what was once thought to be such a capital intensive process much less capital intensive,” says William Blair’s Bhatia.



For now, DeepSeek’s valuation is a moving and yet-unproven target. It will depend on whether its models continue to be as efficient and advanced going forward and at scale. Plus, with users inputting information into DeepSeek’s models that is “more sensitive, from a national security standpoint, than anything that ever will appear on TikTok,” it’s unclear how much of the global market DeepSeek will be able to tap into, per Chris Franzek, who leads financial firm Stout’s valuation services. (One of DeepSeek’s Chinese competitors, Zhipu AI, was added to a U.S. Department of Commerce list of foreign companies considered to be a national security risk on January 16, subjecting it to export controls.) Also crucial is how aggressively Liang—who reportedly started DeepSeek without big plans for commercialization—decides to pursue plans for profits.



“What we are thinking now is that we can share most of our training results publicly, so that we can integrate it with commercialization,” Liang <a href="https://36kr.com/p/2272896094586500" target="_blank" rel="noreferrer noopener">said</a> in 2023. “We hope that more people, even a small app, can use the big model at a low cost, rather than having the technology be monopolized by a few people and companies.”



Giacomo Tognini is a Staff Writer on the Wealth team at Forbes, covering billionaires and their wealth. He joined Forbes in 2019 and lives in New York. He&#8217;s&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.forbes.com/sites/giacomotognini/2022/03/05/a-guide-to-all-the-outrageous-mansions-and-estates-owned-by-sanctioned-russian-billionaires/">investigated the hidden offshore wealth of Russian oligarchs</a>,&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.forbes.com/sites/giacomotognini/2023/02/28/exclusive-new-investigation-reveals-gautam-adanis-older-brother-vinod-adani-as-key-player-in-adani-groups-biggest-deals/?sh=6b7b93a67dea">billions of dollars in assets held offshore by a member of the Adani family and the Adani Group</a>, and the&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.forbes.com/sites/johnhyatt/2023/06/14/binance-sec-cz-guangying-chen/?sh=42cbcf962a94">maze of corporate structures and secretive inner circle of crypto giant Binance.</a>&nbsp;His reporting has also led him to a&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.forbes.com/profile/larry-connor/?sh=4c2cb3625d5b">Dayton, Ohio-based real estate investor with the best returns in the country</a>&nbsp;and&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.forbes.com/sites/giacomotognini/2020/10/07/meet-the-new-billionaire-who-dropped-out-of-high-school-and-flies-fighter-jets-for-fun/?sh=794d14f114c2">a fighter-jet-flying payments entrepreneur in New Jersey.</a>&nbsp;Tognini&#8217;s work has been cited in U.S. Department of Justice seizure warrants, U.S. congressional letters and in Indian Supreme Court filings, and he was a part of the Russian Asset Tracker project that&nbsp;<a target="_blank" rel="noreferrer noopener" href="https://www.europeanpressprize.com/article/russian-asset-tracker/">won the 2023 European Press Prize award.</a>&nbsp;Tognini graduated with a double major in political science and political economy from the University of California, Berkeley and a master&#8217;s in journalism from Columbia University. Follow Tognini for continued coverage of billionaires and investigations into offshore wealth. Send tips to gtognini@forbes.com or giacomo.na.tognini@proton.me.Read More

Newly Launched Chinese AI App DeepSeek Causes U.S. Tech Stocks To Tumble, Amid Its Rapid Rise To #1 In Apple’s App Store

Here’s How Much AI Firm DeepSeek And Its Founder Are Worth

Plus: Booking Holdings’ CEO On Adding AI, Biden Ends With Mostly Good Economic Growth (And One Big Exception), Meta Reorients Policy Before Trump Takes Office, Activist Investors Had A Huge 2024



This is the published version of Forbes’ CEO newsletter, which offers the latest news for today&#8217;s and tomorrow&#8217;s business leaders and decision makers. <a href="https://www.forbes.com/newsletter/ceo">Click here</a> to get it delivered to your inbox every week.



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Every CEO has the ambition to lead their company into an exciting new future, both spurring growth and bringing new ideas and expansion to the industry. But, a&nbsp;<a href="https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/getting-fit-for-growth-the-leadership-mindsets-and-behaviors-that-matter" rel="noreferrer noopener" target="_blank">new report from McKinsey</a>&nbsp;found&nbsp;it takes audacious and bold moves to be able to do that—something most CEOs think they are doing but are not. McKinsey identified five actions that can drive long-lasting company growth: Focusing at least 30% of your time on long-term growth, investing in growth initiatives in volatile times, incorporating customer input into business decisions, having a smoothly operating talent planning process, and collecting data and insights to support growth decisions. Less than a third of company leaders are doing any of these actions, with only 8% being confident about talent planning.



It’s not easy to make these bold moves. Leaders who do are focused on the long term and not afraid of failure, the report states. McKinsey writes that it often requires more than 18 months for any of these kinds of decisions to bear fruit. Yet an average of 78% of the executive team’s time is spent on short- to medium-term growth initiatives, which are realized in five years or less. Meanwhile companies prioritizing long-term growth tend to make it through volatile cycles more successfully and with higher revenue growth.



Business leaders also must be willing to try new and untested moves in uncertain times.&nbsp;This is more than just encouraging speedy learning activities over perfect execution—something 79% of all survey respondents said they do to try to gain a first-mover advantage. These new moves for growth need funding, which just three in 10 executives increase when times are volatile. When things are unsettled, McKinsey found that nearly half of companies get through it by focusing on their tactics—like changing prices or adding automation—instead of trying to enter a new market or provide new services in areas with growth potential.



Companies also say they put their customers first, with 64% saying feedback is a top source for growth ideas, but McKinsey found that&nbsp;only 15% consistently incorporate that feedback into their decisions. Just 23% regularly engage with customers to see that their actions and changes deliver value.



As a second Donald Trump administration begins next week,&nbsp;change—and likely volatility—will become the next normal. Policy ideas that could both help and hurt businesses have been floated. What actually becomes a reality, when that happens and how it takes effect are much harder to predict. However, it could be prime time for business leaders to take some of the bold actions McKinsey sees as vital for long-term growth. In uncertain times, audacity could be the best solution.



Figuring out how to use AI in a way that’s useful to customers can be a challenge. Booking Holdings—parent company of Booking.com, Priceline, Kayak, Agoda and OpenTable—has added AI-powered features to help customers plan for travel and dining. I talked to CEO Glenn Fogel about the process, and an excerpt from our conversation is later in this newsletter.



In honor of Martin Luther King Jr. Day next Monday,&nbsp;the regular edition of Forbes CEO will be taking a day off. We’ll be back in your inboxes Monday, January 27.



<h2 class="wp-block-heading" id="h-economic-indicators">ECONOMIC INDICATORS</h2>



Last Friday, the final employment numbers of President Joe Biden’s term were released, and&nbsp;they were much better than expected. According to the Labor Department, the U.S.&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2025/01/10/december-jobs-report-labor-market-grew-faster-than-expected-as-unemployment-clocks-in-at-41/">added 256,000 jobs</a>&nbsp;in December, beating the economists’ estimates of 153,000 by 67%. These numbers put the national unemployment rate at 4.1%, down a tenth of a percent from November. It was a good report for Biden, and caps off a mostly successful economic term in office,&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2025/01/10/bidens-final-labor-numbers-lowest-unemployment-since-clinton-marred-by-inflation/">writes&nbsp;Forbes’&nbsp;Derek Saul</a>. The 4.1% unemployment rate—6.7% when Biden took office— is the lowest at the end of a president’s term since Bill Clinton left office in 2001. During Biden’s four years in office, average hourly wages rose 19.6%, from $29.84 to $35.69 now.



But high inflation marred Biden’s economic record, with the consumer price index increasing a total of 20.8% during his term. And while inflation has been calming down this year, reaching 2.7% in November and leading the Federal Reserve to cut interest rates three times in the last quarter of 2024,&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2025/01/08/federal-reserve-worried-how-trump-tariff-and-immigration-policieswill-impact-inflation-minutes-show/">Fed officials fear</a>&nbsp;that&nbsp;inflation might not be coming down to their 2% target any time soon. Trump has proposed sweeping changes to trade and immigration policy, including enacting tariffs on many U.S. trading partners and deporting illegal immigrants en masse. “The effects of potential changes in trade and immigration policy suggested” restoring 2% inflation “could take longer than previously anticipated,” according to minutes from the mid-December meeting released last week. “Almost all” Fed officials “judged that upside risks to the inflation outlook had increased,” the release stated. Only one interest rate cut is expected to take place in 2025.



The stronger-than-expected job market and the Fed’s cautious stance on rate cuts contributed to an&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2025/01/10/stocks-drop-after-jobs-report-shows-hot-us-labor-market-heres-why/">overall market selloff</a>&nbsp;on Friday. A booming job market means that&nbsp;the economy is doing well without interest rate cuts to stimulate it. “The Fed cutting cycle is over,” Bank of America economists led by Aditya Bhave wrote in a Friday note to clients, calling the “gangbusters” December jobs report the “straw that broke the camel’s back.”



However,&nbsp;2024 wasn’t all about job growth. According to a report from Challenger, Gray &amp; Christmas, U.S. companies&nbsp;<a href="https://www.forbes.com/sites/maryroeloffs/2025/01/09/2024-had-most-job-cuts-in-15-years-with-one-exception/">cut 761,358 jobs</a>&nbsp;last year—the most since 2010 (with the exception of Covid pandemic-related job losses in 2020). The tech sector saw the most jobs lost, with a total of 133,988—more than double the number of cuts in the next largest sectors: health care, automotive, services and consumer products.



<h2 class="wp-block-heading" id="h-from-the-headlines">FROM THE HEADLINES</h2>



As Trump prepares to take office, Facebook and Instagram parent company Meta made a series of quick and sweeping changes last week that will likely improve the incoming administration’s view of the company. Last Tuesday, CEO Mark Zuckerberg announced the company&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2025/01/07/meta-ditches-fact-checks-for-x-style-community-notes-zuckerberg-says-it-will-restore-free-expression/">is&nbsp;dropping</a>&nbsp;its independent fact-checking program for posts on its platform. Instead, it will use a self-policing system like X’s community notes, where users can flag posts with incorrect or misleading information that will appear alongside the post. In a video posted on Facebook, Zuckerberg said the move is helping the company get back to its roots, saying the fact-checkers on Meta “have been too politically biased and have destroyed more trust than they have created” by causing “too much censorship” of free speech. Zuckerberg stated in the video that the U.S. election felt like “a cultural tipping point towards, once again, prioritizing speech,” and the change will be “restoring free expression” on Meta’s platforms.



The change, which came as former Republican lobbyist and senior advisor to President George W. Bush Joel Kaplan took over as Meta’s global policy chief,&nbsp;appears to have appeased Trump, who has complained for years that social media platforms moderating or blocking posts with false, misleading and offensive content were censoring conservative speech.&nbsp;<a href="https://www.forbes.com/sites/iainmartin/2025/01/07/meta-blindsided-fact-checkers-with-plan-to-cancel-program-for-community-notes/">Forbes’&nbsp;Iain Martin and Sarah Emerson report</a>&nbsp;that the independent fact-checkers employed by Meta—including news organizations such as&nbsp;USA Today, Reuters Fact Check, AFP and Politifact—were blindsided by the announcement.



Zuckerberg&nbsp;<a href="https://www.forbes.com/sites/antoniopequenoiv/2025/01/06/zuckerberg-taps-ufc-president-dana-white-to-join-metas-board-of-directors/">also announced</a>&nbsp;last week that&nbsp;Trump ally and UFC President Dana White would join Meta’s board of directors. And on Friday, a company memo announced it was&nbsp;<a href="https://www.forbes.com/sites/conormurray/2025/01/10/these-companies-have-rolled-back-dei-policies-mcdonalds-is-latest-to-abandon-diversity-standards/">ending several programs</a>&nbsp;intended to increase the company’s hiring of diverse candidates and equity and inclusion training programs.



<h2 class="wp-block-heading" id="h-notable-news">NOTABLE NEWS</h2>



In 2024,&nbsp;activist investors were back with a vengeance. A report from Barclays showed record-breaking 243 activist investor campaigns last year,&nbsp;<a href="https://www.forbes.com/sites/jackkelly/2025/01/10/activist-investors-forced-record-number-of-ceos-to-resign-in-2024/">Forbes&nbsp;senior contributor Jack Kelly writes</a>. Nearly half—115—were in the U.S., which saw a 6% increase in investor campaigns over 2023. A record 27 CEOs were ousted last year by activist investor pressure.



Activist investors’ game plans are also changing. More than a quarter of activist campaigns dealt with improving strategy and operations, while just 22% were pushing for M&amp;A activities. Jim Rossman, global head of shareholder advisory at Barclays,&nbsp;<a href="https://www.reuters.com/markets/record-number-activist-investors-joined-shareholder-rebellion-2024-2025-01-02/" rel="noreferrer noopener" target="_blank">told Reuters</a>&nbsp;last year felt almost like a “shareholder revolt. Investors are no longer willing to sit and wait for promised improvements and are saying, ‘We want the companies where we are invested to change right now.’”



<h2 class="wp-block-heading" id="h-tomorrow-s-trends">TOMORROW’S TRENDS</h2>



<h3 class="wp-block-heading" id="h-booking-holdings-ceo-talks-about-bringing-ai-to-trip-planning">Booking Holdings CEO Talks About Bringing AI To Trip Planning</h3>



From its inception, Booking Holdings—owner of travel and planning sites including Booking.com, Priceline, Agoda, Kayak and OpenTable—has been a tech company. It’s added generative AI to its tech stack with AI trip planners on Booking.com and Priceline, detailed search filters to find accommodations that meet a variety of needs and an OpenTable integration in ChatGPT. I talked to CEO Glenn Fogel about how he and his team decided to add these features and how it’s going so far. This conversation has been edited for length, clarity and continuity.



There are many places you could implement generative AI in your company. How did you decide where to start, and what are your priorities for AI?



Fogel:&nbsp;It’s a combination of what the biggest problems are for our partners, our consumers and the people we deal with, and can we solve it now? How much will it cost to solve now? And how much benefit, how much value, will they get from it? That’s kind of our own little algorithm, trying to figure out where to put the resources up.



There’s also where you ask what foundational things do we have to work on right now, so we can solve lots of problems down the road? What kind of data architecture do we need to set up now so that we can build? You need to figure out: What can we achieve right now? What do we need to build as a base foundation for the future? These are the things that we consider as we’re planning out this year’s plan, next year’s plan and the year after. These are all different things that are judgment calls based on data that comes from our customers and our partners and the expert people in our company.



What do customers think in terms of feedback you’ve received? Are people using the AI features?



In terms of good feedback and bad feedback, we’ve gotten both. Sometimes I look at the number and say, ‘Wow, that many people are using it.’ But then I’ll say, ‘Wait, compared to our total percentage of people who are using [the systems], that’s not a big number at all.’ This is early, people are creatures of habit. They know how to use things already, and many people just go to the way they’ve always done it.



In so many new things that come out: Look at people in terms of their social media. They started with one, then a new one came out. ‘But I like this one because I’ve been using this one forever.’ The new one may be better. People are slower to adapt to the new one. I think that for a lot of us, we’re going to have a long gestation before we really get the big ramp up in terms of customer adds.



We’ll [do more to promote] it when I feel that we’ve achieved at a level that I think this really is much better than the way they do it now. One of the things that I don’t want to do is move loyal customers who enjoy the service, have been using us for a long time and love what we do for them, and tell them, ‘Here’s a much better way to do this.’ And they go over there and end up being frustrated by it, and then you lose that trust. So let’s make sure it’s better.



What kind of advice would you give to a CEO that is looking to bring AI into their operations, but isn’t quite sure where to start?



Any time the CEO is thinking about starting something new, [my advice] is bringing in people who will know more than you and get good advice: Does it fit your needs? Is it something that will fit your budget, produce the value you hope to achieve, give you a good ROI compared to other projects you could be doing? What is going to be the cost if you don’t do it? All the natural things.



AI is no different than any project or way to work you will go forward with. The same advice I give anybody about anything is think really hard, plan it out, then think hard about it again.



<h2 class="wp-block-heading" id="h-facts-comments">FACTS + COMMENTS</h2>



The U.S. Supreme Court&nbsp;<a href="https://www.forbes.com/sites/alisondurkee/2025/01/10/supreme-court-signals-it-will-uphold-tiktok-ban-live-updates/">heard arguments</a>&nbsp;Friday on whether a law&nbsp;forcing the sale or ban of China-owned social media app TikTok violates the First Amendment. The law is scheduled to go into effect on Sunday.



170 million+:&nbsp;U.S. TikTok users,&nbsp;<a href="https://tiktokeconomicimpact.com/" rel="noreferrer noopener" target="_blank">according to</a>&nbsp;the app



1%:&nbsp;Increase in&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2025/01/10/meta-stock-rallies-oracle-slides-as-market-reacts-to-tiktok-ban-hearing-at-supreme-court/">Meta’s share price</a>&nbsp;following the hearing, which made many think the law was likely to be upheld



‘Seems like a huge concern for the future of the country’:&nbsp;Justice Brett Kavanaugh said about the government’s concern that China will use TikTok to collect data from U.S. users



<h2 class="wp-block-heading" id="h-strategies-advice">STRATEGIES + ADVICE</h2>



The&nbsp;last two years have seen many advances in AI, both in terms of technology and how it’s being used at companies. Here are&nbsp;<a href="https://www.forbes.com/sites/jodiecook/2024/12/26/predictions-for-ai-in-2025-entrepreneurs-look-ahead/">expert predictions</a>&nbsp;of what will happen in 2025.



How can your small business continue to grow in 2025? Here are <a href="https://www.forbes.com/sites/rohitarora/2024/12/30/10-small-business-new-years-resolutions-for-2025/">10 New Year’s resolutions</a> to help it stay on the right path.

She’s got big plans to run the city

Why It’s Time For Business Leaders To (Actually) Be Bold

<a href="https://www.forbes.com/"></a><a href="https://www.forbes.com/search/"></a>As CEOs cut back on DEI and tell young workers to leave their politics at home, charitable giving, with an employer match, has emerged as a way for employees to bring their own values to work.



<abbr>P</abbr>resident-elect&nbsp;Donald Trump and his appointees are promising a war against woke, with employer diversity, equity and inclusion (DEI) efforts among their targets. At the same time, with job&nbsp;<a href="https://fred.stlouisfed.org/series/JTSJOL" rel="noreferrer noopener" target="_blank">openings</a>&nbsp;down nearly 40% from their 2022 peak, even unhappy employees are less likely to&nbsp;<a href="https://fred.stlouisfed.org/series/JTSQUR" rel="noreferrer noopener" target="_blank">quit</a>. So it’s no surprise that CEOs, who a few years ago embraced social justice in part to appease young subordinates, are now curtailing DEI programs, staying mum about causes, and demanding employees, too, keep their political views out of the workplace. Just last week, Walmart, the nation’s largest private employer,&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2024/11/26/walmart-is-the-latest-major-company-to-roll-back-dei-policies-amid-conservative-backlash/">confirmed it was rolling back</a>&nbsp;its DEI efforts.



After protests over the war in Gaza, workers discovered that&nbsp;<a href="https://www.forbes.com/sites/jenamcgregor/2024/05/06/all-hands-memo-why-activism-at-work-could-get-you-fired/">activism can even get you fired</a>.



But there’s a notable exception to this retreat: charitable giving. In recent years, even as contributions to the United Way have declined, a new type of giving platform has spread that empowers workers to pick their own charitable causes–usually with an employer match.



“Everyone is looking for a way to keep all these young employees who now expect [their employers to speak out] happy, while not putting their organization at legal risk,” says Alison Taylor, a professor of corporate responsibility and business ethics at New York University’s Stern School of Business. “There is this overwhelming sense of caution among senior leaders and C-suite executives about not pissing anyone else off.”



In that context, she adds, “The pivot to giving employees more control over their donations is sensible.”



It’s also a way to accommodate Gen-Z and younger Millennials moved by the human suffering they see on social media and in the news, particularly in places like Gaza.



The dominant player in the giving platform space is Alberta, Calgary-based fintech Benevity, which in 2023 processed $3.2 billion of donations to 265,000 unique causes, from workers at such companies as Adobe, Cisco, Merck, Microsoft, Nike, UPS and Visa. (That total, which was up 14% and is on track to grow again this year by double digits, includes employer matches of workers’ donations. While Benevity has multinational and non-U.S. companies as clients, 84% of 2023 contributions went to U.S. charities.)



In an analysis for&nbsp;Forbes&nbsp;of all employee giving at 826 client companies during the two years ended Oct. 31, 2024, Benevity found the top five recipients were the Red Cross (across all countries and chapters),&nbsp;<a href="https://www.forbes.com/companies/st-jude-childrens-research-hospital/?list=top-charities">St. Jude Children’s Research Hospital</a>, Doctors Without Borders (across all countries),&nbsp;<a href="https://www.forbes.com/companies/planned-parenthood-federation-of-america/?list=top-charities">Planned Parenthood Federation of America</a>&nbsp;and the Palestine Children&#8217;s Relief Fund.



At our request, Jules Dorval, the social data science lead at Benevity, also drilled down on giving by young workers at the subset of 62 companies for which it has data on donors’ age. During the same two year period, the top recipients of money from workers under 30 skewed more heavily to relief groups, particularly international ones. Palestine Red Crescent Society-Al Bireh Branch (serving both Gaza and the West Bank) was No. 1, Islamic Relief No. 3, and Palestine Children’s Relief Fund No. 6, compared to Nos. 11, 14 and 17, respectively, for workers of all ages at those same 62 companies. Rounding out the top 10 for under 30 givers: World Central Kitchen (2), UNICEF (4), Red Cross (5), St. Jude’s (7), Mercy Corps (8), Doctors Without Borders (9) and&nbsp;<a href="https://www.forbes.com/companies/save-the-children-federation/?list=top-charities">Save The Children Federation</a>&nbsp;(10).



Medical Aid for Palestinians, a British non-profit providing healthcare services in Gaza and the West Bank, was the 11th most-donated-to charity for employees aged 30 or younger giving through Benevity, though it didn’t break the top 200 charities for all workers.



New York City-based American Friends of Magen David Adom, which&nbsp;<a href="https://afmda.org/about/" rel="noreferrer noopener" target="_blank">acts</a>&nbsp;as Israel’s representative to the International Red Cross and provides disaster relief and emergency services to Israelis, ranked 18th in the top charities younger workers donated to, but just 78th for all employees–further evidence that whatever their views on the Israel-Hamas conflict, the youngest workers are inclined to express them through charitable giving.



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<abbr>“I</abbr>gave at the office”&nbsp;is a cliche born from a long tradition. In the late 1800s,&nbsp;<a href="https://www.urban.org/research/publication/past-present-and-future-workplace-giving-united-states" rel="noreferrer noopener" target="_blank">local elites attempted to rationalize charitable giving</a>&nbsp;by forming charitable societies to act as umbrella organizations that could weed out the undeserving from the deserving. Increased workplace charitable solicitations during World War II led to the first implementations of payroll deductions for donations. After the war, as other deductions for insurance, taxes and the like spread, so did the payroll giving model, with most of the money going to community chests like the now more than 1,100 U.S. chapters of the&nbsp;<a href="https://www.forbes.com/companies/united-way-worldwide/">United Way Worldwide</a>, which in turn directed the majority of their funds to a&nbsp;<a href="https://www.urban.org/sites/default/files/publication/100731/the_past_present_and_future_of_workplace_giving_in_the_united_states.pdf" rel="noreferrer noopener" target="_blank">small group of big name</a>, mainstream charities, including the&nbsp;<a href="https://www.forbes.com/companies/ymca/?list=top-charities">YMCA</a>,&nbsp;<a href="https://www.forbes.com/companies/american-national-red-cross/?list=top-charities">Red Cross</a>&nbsp;and the&nbsp;<a href="https://www.forbes.com/companies/salvation-army/?list=top-charities">Salvation Army</a>.



At first, workers didn’t have much choice about what their dollars supported, but under pressure from alternative giving campaigns, in 1990 United Way officially embraced the idea of allowing payroll donors to designate where their dollars would go–even to organizations outside of United Way. Still, the percentage of workers participating in United Way campaigns continued to drop, with donations falling sharply during the Great Recession.



In the year ending in June 2024, just $1 billion of the United Way’s $2.5 billion in private donations came from workplace contributions.



Now the spread of online giving platforms is breathing new life into the old tradition of workplace giving–and turning it into an employee benefit, part of a broader package offered by companies to keep workers engaged and satisfied. Some 78% of employees who have workplace giving programs available say that their companies&#8217; values align with their personal ones, compared to just 56% where workplace giving isn’t offered, according to&nbsp;<a href="https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/giving-in-the-workplace.pdf" rel="noreferrer noopener" target="_blank">research</a>&nbsp;by Artemis Strategy group for Fidelity Charitable, an affiliate of Fidelity Investments. (In 2019, Fidelity Charitable and the big employee benefits division of Fidelity Investments teamed up to start the&nbsp;<a href="https://www.forbes.com/sites/ashleaebeling/2019/03/26/fidelitys-latest-move-into-workplace-benefits-a-new-way-to-donate-to-charity/">Giving Marketplace,</a>&nbsp;a competitor to Benevity.)



Moreover, in the same Artemis survey of 1500 workers, 89% who have workplace giving programs available said they were satisfied with their current employer, 12 percentage points higher than the satisfaction rate for those without workplace giving schemes. Artemis’ findings don’t necessarily show that charitable giving is&nbsp;why&nbsp;more employees are satisfied, but it does suggest that it’s part of a benefits package found at happier workplaces. That’s something employers can’t ignore, since according to Gallup, Millennial and Gen Z workers in particular report&nbsp;<a href="https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx?thank-you-report-form=1" rel="noreferrer noopener" target="_blank">feeling more disengaged and stuck in their jobs</a>&nbsp;these days–a reflection of a tougher market for job-hunters that has transformed the “Big Quit” into the “The Great Stay.”



Further evidence that giving is now an employee benefit: 70% of employers who use Benevity match 100% of an employee’s contributions (up to a set amount), Dorval reports. In total, he calculates, 65% of all dollars given through the platform get a match. Companies can also use the platform to track days off given to workers for volunteering, or even to make contributions to a worker’s charity account to reward them for volunteering on their own time. Workers can donate through payroll deduction, fund their giving with a credit card donation, or do both. Employees can designate in advance the charities their money will support or accumulate cash in a giving account, and then direct individual donations from that account—just as someone would when using a donor-advised fund. (Benevity uses a master donor-advised fund to hold all the donations.)



The flexibility of the Benevity platform accommodates special fundraising drives and events like Giving Tuesday–the Tuesday after Thanksgiving, Black Friday and Cyber Monday. Charities have pushed Giving Tuesday since 2012 as a way to goose donations at a time when Americans’ wallets are relatively open. During 2023’s Giving Tuesday, Benevity logged $150 million in donations made through its platform, a 22% increase from the year before.



Workplace giving is still just a drop in the charitable bucket–but is growing faster than other giving channels.. The Blackbaud Giving Fund&nbsp;<a href="https://blackbaudgivingfund.org/blog/what-is-workplace-giving-and-why-its-important-for-nonprofits/" rel="noreferrer noopener" target="_blank">estimates</a>&nbsp;$5 billion a year is given at U.S. workplaces. That’s just 1% of the $557 billion in total contributions made in the U.S. in 2023. according to&nbsp;<a href="https://philanthropy.indianapolis.iu.edu/news-events/news/_news/2024/giving-usa-us-charitable-giving-totaled-557.16-billion-in-2023.html" rel="noreferrer noopener" target="_blank">Giving USA’s annual tally.</a>&nbsp;But individual giving was up only 1.6% (in nominal dollars, not inflation adjusted ones) in 2023, according to that report, compared to Benevity’s 14% increase.



By contrast, giving to donor-advised funds, run by community foundations and non-profit affiliates of such financial services powerhouses as Vanguard, Fidelity and Schwab,&nbsp;<a href="https://www.forbes.com/sites/phoebeliu/2024/11/12/charitable-donations-billionaire-donor-advised-funds-tumbled-2023-year/">dropped a surprising 22% last year to $59 billion</a>. (To maximize their tax benefits, wealthy donors will typically contribute highly appreciated stock to DAFs in a lump&nbsp;<a href="https://www.forbes.com/sites/kellyphillipserb/2023/11/20/from-donor-advised-funds-to-qcds-how-taxpayers-can-maximize-charitable-gifts/">when they have big gains</a>, then dribble out contributions to specific operating charities over time. That can lead to more volatility from year to year.)



While Benevity does provide U.S. workers the documentation needed to claim tax deductions, donations by rank and file workers aren’t usually driven by tax considerations–the 2017 Trump tax overhaul reduced the percentage of U.S. filers&nbsp;<a href="https://www.forbes.com/sites/kellyphillipserb/2023/03/03/senators-propose-huge-boost-in-charitable-deduction-for-non-itemizers/">who itemize their deductions (and thus can claim tax benefits) to less than 8%.</a>&nbsp;In fact, contributions to foreign charities are&nbsp;<a href="https://www.forbes.com/sites/kellyphillipserb/2023/10/10/tax-and-other-considerations-for-charitable-giving-abroad-in-times-of-crisis/">typically not deductible at all</a>, but Benevity reports that 67% of its clients allow for international giving. (Benevity has a roster of more than two million eligible organizations, though companies can exclude certain categories–for example, religious organizations–from their match.)



Workplace giving now seems poised to expand further, even as DEI and social activism by CEOs shrink. A new&nbsp;<a href="https://mycecp.cecp.co/s/article/Giving-in-Numbers-2024-Edition" rel="noreferrer noopener" target="_blank">survey of 219 big companies</a>&nbsp;by Chief Executives for Corporate Purpose (CECP) found that between 2021 and 2023, 53% decreased their own community investments (which include direct cash gifts and donations of products and services, including employee time). At the same time, 94% of the companies (up by four percentage points from 2021) offered some sort of charitable matching gift program to employees. Matching programs include year-round matches, matching during annual giving campaigns, donations to reward employees’ volunteer work and the fastest growing category, special drives for disaster relief.



Here’s the kicker: At companies responding to the CECP survey, only 20% of employees, on average, participated in their companies’ employer matches, up one percentage point from 2021. Double Your Donation, which maintains a database of employers’ match programs for its clients (who are charities), calculates 27 million workers now have match programs available and estimates they could be leaving $4 to $7 billion in matching money unclaimed annually. Room to grow.

Diverse volunteers packing donation boxes with canned food in food bank

Charitable Giving In The Workplace Is Back–And Just In Time

<abbr>In</abbr> 1882, John D. Rockefeller, the world’s richest man, created the first full-service single-family office in the U.S. to manage and invest his fortune, said to be $1.4 billion ($31 billion in today’s dollars) at his death in 1937. Fast-forward 142 years, and many members of The Forbes 400 have a family office to help them manage their enormous fortunes.



But so do thousands of other American families who don’t belong to the billionaire class. At their core, family offices are a means to invest, preserve and pass on fortunes—not to build them de novo. They’re both a safety net and status symbol. “People are busy, and they want to know: ‘How are we doing? Is there anything to worry about?’ ” says Mark Rogozinski, president of Family Office Services for Chicago-based Cresset Asset Management.



Family offices are taking off for many reasons, including increasing wealth and aggressive marketing to the ordinary rich. Baby Boomers and their elders also have concerns about passing on their accumulated wealth (in aggregate, some $84 trillion) and have a desire to involve younger generations in philanthropy. On the other side, the family office providers have access to new technology that can better monitor investment performance and share financial data, making it easier for them to expand. The final impetus is tax savings—the 2017 tax overhaul, coupled with a tax court ruling that year involving the Lender family (of bagel fame), mean that investment expenses which are no longer deductible on individual tax returns can often be written off at the family office level.



It’s unclear how many single-family offices now operate in the U.S.—estimates range from 3,000 up to 7,000. But all agree that the number is growing. Deloitte conservatively estimates there will be 3,550 single-family offices in North America in 2025, up 61% from 2019. (For comparison,&nbsp;Forbes&nbsp;counted 880 billionaires in the U.S. and Canada in 2024.)



It still requires at least $100 million in investable assets (and preferably $250 million) for a single-family office to make sense, but those with as little as $25 million, or even $10 million, can find a spot with a multifamily operator if they’re ready to pay for estate, tax and charitable planning and access to alternative investments like derivatives and venture capital.



A single-family office costs a minimum of $1 million annually (and usually more), but multi-family offices run from 0.5% to 2% of assets a year (generally, the bigger the portfolio, the lower the percentage). Sometimes there are transaction and performance fees as well. Concierge services, such as managing a client’s homes and security and travel, may cost extra. The fee structure is often negotiable and bespoke, just like the services. Some multifamily offices charge a fixed fee per year, starting at $50,000 and ranging up to $1 million for full service.



More and more people want (and can afford) such white-glove treatment. The Federal Reserve’s 2022 Survey of Consumer Finances found the richest 1% of Americans (that’s 1.3 million households) had a minimum net worth of&nbsp;<a href="https://fred.stlouisfed.org/series/WFRBL99T999309" rel="noreferrer noopener" target="_blank">$11 million</a>, while the top 0.1% (<a href="https://fred.stlouisfed.org/series/WFRBLTP1310" rel="noreferrer noopener" target="_blank">133,000</a>&nbsp;households) had a net worth of at least&nbsp;<a href="https://fred.stlouisfed.org/series/WFRBLTP1311" rel="noreferrer noopener" target="_blank">$46 million</a>.



The original multifamily offices were born when a single rich family invited in a handful of others to defray costs. Cresset, founded seven years ago in Chicago by two private-equity veterans to manage their own families’ wealth, is one of a new breed of registered investment advisors expanding aggressively into the multifamily business. After merging in June with The Connable Office, a 130-year-old multifamily office, it’s up to $60 billion in assets under management.



One new multifamily player, New York City’s Beatrice Advisors, is the first owned by a Black woman. It was launched in June by Christina Lewis with assets from her own family and those of her rich friends. Her father, Forbes 400 member Reginald Lewis—a Baltimore-born, Harvard-trained deal lawyer—died in 1993 at 50 from an inoperable brain tumor. Christina was just 12 then, and describes her family as being “underadvised” at his death. Beatrice is investing heavily in technology, creating digital dashboards for its clients that display a family’s whole net worth, including their investment portfolio, business assets and even intellectual property. The aim, Lewis says, is “transitioning our knowledge to the client over time, so that the client is in the driver’s seat.”



In contrast to the Lewises, the Lipitz family has had decades to work out its wealth transition. Gene Lipitz, now 58, got into the family office game in 1997. His dad, Roger C. Lipitz, now 82, had sold the company he built—Meridian Healthcare, a chain of 45 nursing homes—for $205 million in 1993. Father and son began collaborating on investments informally, but Roger became increasingly involved in civic and charitable work and suggested they formalize that partnership, with the younger Lipitz taking the investing lead. Gene first hired a multifamily office in 1997 but was dissatisfied. Ultimately, in 1999, after selling his own tax- and risk-management company to Citicorp, Gene decided to create his own office; it now manages investments for three generations with three full-time employees, outsourcing such functions as accounting. The office’s mission statement is revised regularly. Failing to do that, Gene says, is “a great way to lose buy-in from the next generation.”



Even for people with decades of business experience, starting a single-family office can be daunting, beginning with the challenge of hiring qualified staff. That work, too, is often outsourced. Kay Shah, a director in the Family Office Division at StevenDouglas, a national boutique search firm, spends her days recruiting financial pros to serve in family offices, which typically have five to 15 employees, she says.



New cloud-based platforms help professional managers track portfolio holdings and performance across asset classes, but family offices controlled by older generations still tend to lag technologically. Josh Kanter, an attorney and wealth advisor in Salt Lake City, concluded, based on his own experience, that family offices need to become more tech-centric. After his father, famed tax lawyer and trust engineer Burton Kanter (an advisor to the billionaire Pritzker family), died in 2001, Josh took over managing the family’s office. He found keeping all generations up to date on practical details difficult. For example, he says, the family will pay for tuition and health care, but only if certain guidelines are followed. The problem was that there was no single place to find that sort of information, other than sorting through the more than 275,000 files in the family Dropbox or calling him directly to ask.



His solution was to start his own software company, Leafplanner. It acts as an overlay to existing financial software like Addepar, which tracks multiasset portfolio performance, or Arch, which organizes tax documents. Leafplanner can guide family members through the process of getting answers to specific questions on everything from investment decisions to charitable giving. It can be customized for an unlimited number of users, controlling access to what information each can see. Since launching in 2022, Leafplanner has installed the software for 145 other families, Kanter says. As for his own family, he says, they no longer have to ask, “What happens if Josh is the next one to get hit by a bus?”

Group of business people, bank managers, bankers having meeting, discussion on global planning and financial research. Help, advisory, financial services, support and investment strategy concept

Why You No Longer Need To Be A Billionaire To Have Your Own Family Office

When it comes to controversial advertising campaigns, they usually don’t have to do with income taxes. But a short-lived campaign from enterprise software company Intuit, which makes TurboTax,&nbsp;crossed that line and raised the ire of accountants.



<a href="https://www.forbes.com/sites/kellyphillipserb/2024/10/16/intuit-backpedals-after-insulting-accountants-with-latest-ad-campaign/">Forbes’&nbsp;Kelly Phillips Erb writes</a>&nbsp;about the saga, in which a consumer-targeted message intended to be a bit cheeky and punny&nbsp;ended up insulting a group of professionals who actually rely on Intuit’s products. The centerpiece of the campaign is an advertisement in which a young woman announces to a bland-looking accountant that she’s leaving him for a younger and more fashionable man on her phone “who charges me less but gives me more” as part of a “tax break-up.” The younger man represents Intuit’s “TurboTax Full Service plan,” featuring human tax preparers who work with customers online or in person to complete their taxes.



Tax preparers, who have competed with TurboTax for many years,&nbsp;felt the campaign went too far. The unflattering portrayal of the accountant, plus the barrage of messaging telling consumers to “break up” with them, made many individuals and organizations upset. American Institute of Certified Public Accountants President and CEO Barry Melancon issued a statement saying, “The crucial role of CPAs, who serve as expert and trusted advisors to business owners and individuals, was not reflected in an unfortunate recent ad campaign launched by Intuit.” And the National Association of Tax Professionals said it will no longer accept Intuit’s sponsorships or exhibits at its conference because of the campaign’s “direct conflict with our members’ interests.” Predictably, Intuit decided to phase out the campaign.



While TurboTax is a well-known Intuit product, it’s only one. The company also owns QuickBooks and Mailchimp—financial management and email marketing platforms used by many businesses, including accountants—as well as consumer budgeting tool Credit Karma. In its last fiscal year, the bulk of Intuit’s growth came from those using its enterprise financial planning and email software. TurboTax online made up less than a quarter of the company’s total fiscal year revenues.



Intuit may be seeking more consumer tax business, but it may have damaged its larger customer base by trying to be funny. An average consumer may have giggled at the ad, but it seems unlikely that it would end up getting the desired results,&nbsp;especially since most consumers aren’t thinking about income tax prep in October. Instead, with this campaign, Intuit might have inspired more financial professionals to break up with&nbsp;them.



Finding the right emotional balance is an important tool to make a campaign successful. Reticle AI is using artificial intelligence to determine the emotions that are present in campaigns, helping marketers strike the proper tone to get their messages across. I talked to Vice President of Business Development Tricia Allen about how this works. An excerpt from our conversation is later in this newsletter.



MARKETING MATTERS


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Google is making a change to its Local Services Ads business next month that&nbsp;may impact roughly half of businesses advertising on the search engine,&nbsp;<a href="https://www.forbes.com/sites/brandonkochkodin/2024/10/22/googles-upcoming-ad-change-could-spell-disaster-for-millions-of-unprepared-small-businesses/">reports&nbsp;Forbes’&nbsp;Brandon Kochkodin</a>. Starting November 21, the local ads that pop up at the top of search results for users will be blocked if they aren’t linked to a Google Business Profile. This free profile indicates how businesses appear in search and is fully customizable by the business. But businesses need to be verified as legitimate through video or phone authentication, or by receiving a postcard. The authentication is an extra step, but it’s important that local businesses do it sooner rather than later. Studies have shown that 96% of people learn about local businesses online, and four out of five of those searches convert into business. In fact, nearly half of all Google searches are for local businesses.



SOCIAL MEDIA


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Two social networks are making changes that may impact user safety. For as long as X was known as Twitter, users have been able to block other accounts—a step often taken when a user is bothered or harassed by someone. Previously, the blocked account couldn’t see or engage with posts from the user who blocked them. Now, users&nbsp;<a href="https://www.forbes.com/sites/antoniopequenoiv/2024/10/17/x-will-soon-let-users-see-tweets-from-people-who-block-them-the-controversial-change-explained/">can see all posts</a>&nbsp;from accounts that have blocked them, though they still can’t engage with them.&nbsp;X says this change allows “greater transparency,” so users can see if those who have blocked them are trying to “share and hide harmful or private information.” But critics have taken the other side of the argument: Stalkers and harassers can keep following accounts of those who have blocked them. X owner Elon Musk, who has made scores of controversial changes to the platform since he bought it in 2022, previously posted the blocking function made no sense. After this change was made, competing social media platform Bluesky gained 1.2 million users in two days,&nbsp;<a href="https://www.socialmediatoday.com/news/bluesky-gains-momentum-wake-xs-blocking-changes/730371/" rel="noreferrer noopener" target="_blank">Social Media Today reported.</a>



<a href="https://www.forbes.com/sites/lindseychoo/2024/10/17/instagram-sextortion-child-safety/">Changes to Instagram</a>&nbsp;intended to prevent “sextortion” scams and protect teens are much less controversial. Now, users are unable to take screenshots or recordings of disappearing images, which are only intended to be viewed once. The Meta-owned platform is also testing safety notices to let teenagers know when they are exchanging messages with someone out of the country. Images flagged to contain nudity will be automatically blurred for users younger than 18. And accounts with “scammy” behaviors will not be able to see users’ following and followers lists, a common way some bad actors get information about a target’s friends and family.



BRANDS + MESSAGING


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Netflix&nbsp;<a href="https://www.forbes.com/sites/lindseychoo/2024/10/17/netflix-earnings-streaming-beats-expectations-subscriber-growth/">reported earnings</a>&nbsp;last week, beating Wall Street’s expectations. The streaming giant made $9.8 billion in revenue in its most recent quarter, and gained 5.1 million subscribers. Now, nearly 283 million households have Netflix subscriptions, but the rate of new subscriber gain is slowing down.&nbsp;<a href="https://www.forbes.com/sites/dbloom/2024/10/17/netflix-added-51-million-subscribers-can-we-talk-about-what-matters/">Forbes&nbsp;senior contributor David Bloom writes</a>&nbsp;that&nbsp;for Netflix, this really shouldn’t be seen as a negative. After all, there is a finite amount of Netflix subscriptions that can be bought. What is more important, Bloom writes, is viewer engagement. Netflix reported that the average paid membership has two hours of engagement per day. It has an 8.2% viewership share in the U.S., according to Nielsen data. Netflix first became profitable in 2003, and to date only one other streaming service—Disney+—has posted a profit. With more emphasis on engagement, Netflix also seems to be the first of the streamers to start caring more about actual viewers and interaction.



<h4 class="wp-block-heading" id="h-on-message">ON MESSAGE</h4>



<h3 class="wp-block-heading" id="h-how-reticle-ai-uses-technology-to-determine-emotions-in-ads">How Reticle AI Uses Technology To Determine Emotions In Ads</h3>



Emotion is important to marketing. Nostalgia, joy, adventure, curiosity and stress can all inform how consumers make purchases, choose what to eat or drink, or select service providers or leisure activities. Reticle AI uses artificial intelligence to determine the emotions that are present in marketing campaigns, as well as the emotions that consumers are experiencing when they see them, and makes recommendations for an optimal outcome. I talked to Vice President of Business Development Tricia Allen about how their method works and how it can get results. This conversation has been edited for length, clarity and continuity.



How can you use AI to determine things like sentiment and nostalgia?



Allen:&nbsp;We’ve trained our AI technology to understand emotional sentiment within digital content. We’re almost curating content into various emotions. If a brand wants to be associated with nostalgia, [or being] uplifting, joyful, nurturing, they can align their message within content that has that emotional sentiment. We can control how the content potentially makes someone feel. If you’re consuming content that makes you feel nostalgic, nurturing, uplifting, chances are you’re in that frame of mind. If you get served an ad that is in that nostalgic, nurturing tone, you’re more predisposed to take action. That action is that connectivity and attention that the brand is getting because it’s being served at the right time.



[AI has] that ability to take the universe of digital content, really cull it down, and categorize it into these emotional categories because of its understanding of human emotion.



There’s a lot of talk about AI systems not always giving accurate responses. With something difficult to quantify like emotion, how do you make sure that what comes out of your system is accurate to how people actually would feel?



While AI is extremely relevant and helpful from a marketing standpoint, you can’t get rid of that human oversight. I really believe strongly in that for many reasons. There’s bias that’s involved because the technology is only as good as the person who is training the platform, and if they have inherent bias, then the tech has bias. You need more than one person to be vetting that. In addition, what nurturing means to me might mean something completely different to you.



We actually have human labelers. We have them go in and vet our data on an ongoing basis, just to have those human eyes on it. We’ll go through, and if the technology has said this content is deemed to be nurturing, we want to see what a human actually thinks. We have that human component to make sure, because AI is not perfect. Even when it does get better, I still strongly believe you’re going to need human oversight, especially when you’re talking about emotion.



In your research, what are some of the emotions that people are reacting to the most, and what are some more prevalent themes?



A lot of the themes that people are looking for from a marketing standpoint are around joy and that feeling of happiness, and conversely, that feeling of stress and pressure. [It’s] not necessarily a positive emotion. Maybe it’s a negative emotion, because maybe I’m a vacation company and I want to provide you with a solution to help you overcome that stress.



If you are able to tap into emotion—both in marketing and also what is being looked for—what would be the perfect marketing campaign?



To me, the perfect marketing campaign is [one in which] you first do the insights work to understand the emotional footprint of that brand. How do people think and feel about your brand right now? How do you want them to feel about your brand? Then ensure that creative or the ad itself is designed to hit those key emotions. We’re kind-of that end piece. You’ve established how people think and feel. You’ve established: Do I want them to feel this way? If no, where are there distinctions that we can draw on to differentiate from the competition and then make sure that creative is dialed in?



The biggest area where I see brands fall down is they try and tap into emotion, but there’s a disconnect between the creative strategy and the insights work that was done. The insights work is never being brought to life, and then the creative is a bit of a disconnect. When all of those pieces line up, and you take that emotionally designed creative [and] put it in the same environment from a digital placement perspective, that’s the trifecta of emotional marketing.



FACTS + COMMENTS



When the World Series between the Los Angeles Dodgers and New York Yankees begins on Friday,&nbsp;it will be Sho time—for Dodgers star Shohei Ohtani, that is. With the Japanese phenom in the playoffs, Major League Baseball has actually seen&nbsp;<a href="https://www.forbes.com/sites/mattcraig/2024/10/17/ohtani-mania-has-mlb-playoff-viewership-soaring-in-japan/">more October viewership</a>&nbsp;in his home country than in the U.S.



12.9 million:&nbsp;Japanese viewers of NLDS Game 5 on October 11, when the Dodgers beat the San Diego Padres to advance to the National League Championship Series. The U.S. had 7.24 million viewers, a record for a division series



$700 million:&nbsp;Value of Ohtani’s record-setting 10-year contract



‘I hope to continue to perform well as well for the fans in Japan’:&nbsp;Ohtani&nbsp;<a href="https://dodgersnation.com/shohei-ohtani-acknowledges-fans-in-japan-watching-dodgers-postseason/2024/10/21/" rel="noreferrer noopener" target="_blank">told Dodgers Nation</a>, after saying that the team has also been “playing really well”



STRATEGIES + ADVICE



Yes, there is such a thing as too much positivity. Here are some ways to&nbsp;<a href="https://www.forbes.com/sites/jackkelly/2024/10/11/managers-are-glossing-over-workplace-issues-and-pushing-toxic-positivity/">avoid glossing over</a>&nbsp;your employees’ challenges and support your team through hard times.



Time management is difficult for executives. Here are <a href="https://www.forbes.com/sites/jackkelly/2024/10/17/top-time-management-apps/">five apps</a> that can help you get more control over your work day.

Chat Bot Service Concept – Enhancing Customer Experience with Virtual Assistant

Can AI Capture The Emotional Side Of Marketing?

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The World’s Highest-Paid Soccer Players 2024

Now Nala has raised $40 million to build its own payment rails allowing global businesses to move money to and from Africa.



Benjamin Fernandes launched&nbsp;his fintech startup&nbsp;Nala in 2018 with the aim of speeding up money transfers within his native Tanzania. Over the next two years, the now 31-year-old former television host and Stanford MBA hit one daunting setback after another.



First, Tanzania’s largest telecommunications provider issued Nala a cease and desist letter, cutting off Fernandes’ access to one of the primary pieces of infrastructure he had been using to transfer money. Then his cofounder quit just a week before demo day at Y Combinator, the startup accelerator Nala had gained entry to in 2019, after five previous unsuccessful attempts. Finally, in 2020, the Covid pandemic hit, reducing the already lackluster demand for Nala’s domestic payment service.



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“We had to shut it down. That was really tough,” says Nala CEO Fernandes, speaking from his New York office a day after the company was featured on the iconic Nasdaq billboard in Times Square. “We had to do layoffs and clean up the team.”



Instead of walking away, over the next two years Fernandes recast and rebuilt Nala into a cross-border remittance service that now enables African migrants working in the U.S. and 20 European nations to send money back home to 11 African countries, including Kenya, Nigeria, Uganda, Tanzania and Rwanda. In all, it now has more than 500,000 registered customers, though none live in Africa.



While Nala isn’t the only one in this business, or always the cheapest service, it’s adding extras built with an understanding of its target market. In Kenya, for example, Nala directly integrates with dominant mobile money service M-Pesa, allowing those working abroad to pay their families’ utility bills back home directly from their account. “What we noticed is that diasporans care about the control of money,” Fernandes says.



This is a growth business. The United Nations projects that Africa’s population will nearly double to 2.5 billion by 2050, making the continent the birthplace of nearly one in four working-age people on Earth. Roughly a million Africans leave each year seeking work.



But Fernandes has even bigger plans. In July, despite a depressed fintech market, his 100-person startup raised $40 million (at an estimated valuation of more than $200 million, according to a shareholder with direct knowledge of the transaction). Only five other African fintechs have raised $40 million or more in a Series A fundraising since 2015, according to PitchBook. San Francisco-based venture capital firm Acrew Capital led the round, and Texas-based VC firm Amplo and DST Global, which manages $5 billion in assets, also invested.



(Most of Nala’s employees are based in Kenya and the U.K. and Fernandes spends most of his time at the London office.)



This isn’t money needed to sustain current operations. In 2023, Nala’s revenue exceeded $15 million, and this past February it became profitable on a generally accepted accounting principles (GAAP) basis, Fernandes says. “We have achieved profitability on the net profit basis,” affirms Nala’s Chief Financial Officer Andrei Klevtsov, who was formerly head of accounting at Wise. “On the EBITDA level the result is the same—we are still a very young company and don’t have any significant adjustments from non-operating activities.”



Instead, Fernandes aims to use the new cash to grow in two ways. First, Nala plans to expand its consumer remittance business to South Asian markets, including India, Pakistan and the Philippines, followed by Latin America.



Second, a share of the new capital will go into securing more licenses and funding the development of Rafiki, a cross-border payment infrastructure designed for global businesses. (Rafiki means “friend” in Swahili, a language spoken predominantly in Tanzania and neighboring Kenya.) As Fernandes tells it, the payments infrastructure in Africa is today only one percent of what it could and should ultimately be. Africa remains the most expensive continent to send money to due to regulatory issues, currency fluctuations, limited competition and a lack of payment infrastructure specifically built for global businesses.



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Growing up in&nbsp;Dar es Salaam, Tanzania, Fernandes didn’t have many tech founders as role models. Still, he wasn’t without inspiration. His parents are both renowned gospel preachers who never went to college, but built the&nbsp;<a href="https://worldagapeministries.com/" rel="noreferrer noopener" target="_blank">World Agape Ministries</a>, and launched an evangelical television station. So at 17, Fernandes started working as a television personality, hosting kids’ talk shows. He then gained international attention covering major sports events such as the 2012 Olympics in London and the 2014 World Cup.



The year after earning his bachelor’s in accounting (with a computer science minor) from the University of Northwestern-St. Paul in Minnesota in 2014, Fernandes was accepted at Stanford business school on a full scholarship as an African MBA fellow. He first started exploring a payments business while at Stanford and says his classmates–steeped in Silicon Valley’s try, fail, and try again startup culture– have been a source of encouragement.



After reinventing Nala in 2021 as a cross-border remittance service, Fernandes used the large social media following he had developed as a former TV host to grow the business. He went on Clubhouse to find customers and was able to market the company to his nearly 450,000 Instagram followers, asking them to test his products. In January 2022, he raised $10 million in funding led by Amplo, a Texas-based VC firm that specializes in international investments.



Nala makes money through foreign-exchange markups–the extra charge it levies on top of exchange rates. And it benefits from helping to supply hard currencies on a continent where many countries are&nbsp;<a href="https://www.forbes.com/sites/segunolakoyenikan/2023/07/02/africa-becomes-a-casualty-in-the-war-against-inflation-as-dollars-dry-up/">facing shortages</a>. “The banks never have enough dollars,” he says. “Because I bring in dollars to Africa, banks are willing to pay me a premium for dollars. So I have leverage on what I can charge for dollars in the market.”



With its new Rafiki infrastructure, Nala aims to create reliable, lower-cost payment rails that streamline payouts and collections for businesses. That means global enterprises, such as payroll and remittance companies looking to trade with Africa but lacking the necessary regulatory approvals, can connect to Rafiki where the infrastructure is already licensed. This would allow them to make payouts to multiple employees and repatriate collections from customers.



“For example, DHL needs to handle collections in Nigeria and repatriate the funds to Germany, where we have an entity,” Fernandes says. “Or consider businesses like Netflix trying to handle collections from customers. That’s the target market for Rafiki.”



These cross-border services are similar to those provided by global fintech companies such as dLocal and Airwallex, which revolutionized payments for businesses in Latin America and Asia, respectively. “Rafiki is the dLocal for Africa,” Fernandes says.



The Rafiki infrastructure business was born out of the founder’s desire to address Nala’s own payment challenges. In the early stages, when transaction volumes were picking up, Nala experienced reliability issues as it used external payment rails—an infrastructure that allows the electronic transfer of money from one person to another. “The cost of operation and support was becoming so expensive for us that we decided it’s better to solve the actual problem,” says Fernades. “We ended up building our own payment rails.”



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Fintech companies&nbsp;such as Remitly, Taptap Send, LemFi and Sendwave also offer services allowing workers to send money back to Africa digitally. In fact, the youngest of these companies launched a year before Nala entered the cross-border payment market. But Nala has tried to distinguish itself in several ways. By securing necessary licenses and regulatory approvals to facilitate money transfers, the startup has established direct connections with banks and telecoms in the region. This allows it to bypass multiple payment networks, which have a history of slowing down transactions, ensuring that funds are delivered directly to the beneficiary’s account.



Fernandes is also aiming to give individual customers more control over how the money they send home is used. “We enable direct bill payment in some countries, such as Kenya, where you can pay for electricity bills, water bills and other services,” he notes. “That’s actually one of our most popular features.”



Now he wants Nala’s business to extend beyond remittances into additional financial services that empower customers. For instance, the startup will soon introduce a feature enabling those working abroad to provide debit cards to their beneficiaries back in Africa that will allow these workers more control over how their hard earned money is spent. Nala is also developing a system to allow migrants to transfer their data, including credit history, to the U.S.



Fernandes has also tried to set his startup apart by prioritizing rate transparency, a feature that is uncommon among fintechs facilitating transactions to Africa. For each transaction, Nala displays the exchange rates offered by its competitors, even when those rates are more favorable to the customer. “That automatically builds a new level of trust with the enterprise,” he says. “A lot of the time, even though we don&#8217;t have the best rates, customers still use us because we are transparent and honest with them.” On average, Nala charges higher fees than Remitly, but Fernandes argues his customers stick with Nala for its transparency.



Service has also been a selling point. Hamad Kasoga, a 32-year-old corporate sales representative at Turkish Airlines who lives in San Francisco, California, previously used Remitly to send money home to Tanzania but switched to Nala last November. Kasoga says he believed he would receive better service with Nala, including more efficient problem resolution in his native language, Swahili.



“It was good to learn that Nala’s customer service speaks Swahili,” Kasoga says. “It gives me the flexibility to feel like I’m working with a company that understands and knows me.”



Fernandes says he has tried to keep costs low. “They&#8217;ve built this business without spending a bunch of cash,” Acrew Capital founding partner Lauren Kolodny says approvingly. “They still have a significant portion of their last round of financing in the bank.” One way it keeps costs low: Nala currently has only one employee in the United States, even though it generates more revenue and transaction volume in the U.S. than in any other markets where it operates.

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This African Fintech Is Giving Workers A Better Way To Send Money Home

After years of remote work, post-pandemic employees are struggling with office distractions. The solutions run from in-office phone booths to libraries to, surprisingly, adding more sound.



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Chad West doesn’t go into his London office more than once a week. As a vice president of marketing at crypto smart wallet&nbsp;<a href="https://www.argent.xyz/" rel="noreferrer noopener" target="_blank">Argent</a>, West shows up for strategy or creative meetings. But when he’s just trying to get work done, the distractions and noise at Argent’s open plan office make him 40% less productive than at home, he estimates. Music escaping from coworkers’ headphones and coworkers’ voices pull at his attention while the sound of software engineers banging away at their keyboards grates on his nerves.



“I don’t know if it’s just because we’ve all become a bit more psychopathic, or maybe it’s always been in us, but I pick up on everything now,” says West, 33. “If someone has the audacity to take a phone call in a smallish office where people are trying to work, it grinds my ears.”



More than four years after the pandemic prompted most office workers to log on from home, many have returned to the office, whether because of employer mandates, a desire to spend time with colleagues or a need to escape from roommates or family. About&nbsp;<a href="https://wfhresearch.com/wp-content/uploads/2024/06/WFHResearch_updates_June2024.pdf" rel="noreferrer noopener" target="_blank">27% of paid workdays</a>&nbsp;in the U.S. were done from home in May, down dramatically from some 60% at the pandemic’s peak, but up from less than 10% before Covid-19.



As people have returned to the office either full- or part-time, complaints about a long-standing frustration—the noise and distractions of open-plan designs—have escalated. Workers are taking more Zoom meetings from the office, often speaking louder in those video calls. Bosses encourage office days to be spent “collaborating” and developing social bonds, but that boosts the chatter echoing in the space.



Compounding the problem: At companies that have downsized their real estate to take advantage of fewer people being onsite, conference rooms and private spaces fill up fast–with the first to claim them each day staying put. “It&#8217;s human behavior,” says Melissa Strickland, a principal and managing director at design firm&nbsp;<a href="http://www.hlw.design/" rel="noreferrer noopener" target="_blank">HLW</a>. If meetings run back-to-back, “why would I [switch rooms] when I could just take all my calls with some convenience [in this room by myself]?”



In a Sept. 2023 survey by workplace research firm&nbsp;<a href="https://www.leesmanindex.com/" rel="noreferrer noopener" target="_blank">Leesman</a>, noise levels were rated among the 10 most important features of the office—ranking between functioning toilets and an IT help desk. Yet only about 32% of employees are satisfied with noise levels in an average office, another Leesman survey (released this past April) found, and only two issues had lower satisfaction numbers in those offices: Access to nearby “leisure facilities,” and the rate of people walking past workstations.



The response to all these complaints presents a business opportunity, with vendors successfully selling everything from phone booth-style pods to “soundscaping” services that use a “biophilic” approach to help muffle voices with sounds found in nature. Furniture makers and interior designers are adding more acoustic-friendly materials and designing “libraries” for quiet places to work. Some employers are doling out noise-canceling headphones and even building tools to help workers alert colleagues when they need to focus.



“This is the nail that every organization is trying to hit the head of,” says Leesman founder Tim Oldman. He sees designers moving toward “re-cellularization” of interior space—more huddle rooms, private offices or quiet rooms many workers crave. “If we want employees to willingly return to offices, we have to provide space that supports those moments where they need distinct acoustic and visual privacy.”



Office distractions are more than a minor annoyance. A 2021&nbsp;<a href="https://www.cambridge.org/core/journals/journal-of-management-and-organization/article/abs/openplan-office-noise-is-stressful-multimodal-stress-detection-in-a-simulated-work-environment/F3EF8D2DF47767F18CBF5C081D6AB3A0#access-block" rel="noreferrer noopener" target="_blank">study</a>&nbsp;published in the&nbsp;Journal of Management &amp; Organization&nbsp;found that in experiments with controlled environments, typical noise levels of open plan offices caused increases in physiological stress indicators such as higher heart rates, as well as more facial expressions of disgust and reports by workers of negative moods.



“We don&#8217;t habituate to noise,” observes Libby Sander, an assistant professor at Bond University in Australia who worked on the study. “We have this idea that oh, you’ll just get used to it.…But physiologically and psychologically, your body doesn&#8217;t.”



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The desire for more control of office noise is one reason for the growth of companies like Finland-based&nbsp;<a href="https://www.frameryacoustics.com/en/" rel="noreferrer noopener" target="_blank">Framery</a>, one of the biggest makers of office “pods”—essentially, fully enclosed, modern looking glass-walled phone booths that start at about $8,700 for a compact single. (Some booths seat up to six people, making them more like enclosed conference rooms.) In 2022, Framery’s global revenue hit $164 million, up from $86 million in 2020 and $101 million in 2021. While sales fell slightly in 2023, dinged by market uncertainty, inflation and higher interest rates, cofounder and CEO Samu Hällfors said he expects rapid growth again this year, though he declined to share forecasts.



In March, the company added a new line of pods that not only insulate sound for users seated within the booths, but have a “sound masking” system that emits&nbsp;<a href="https://www.webmd.com/sleep-disorders/pink-noise-sleep" rel="noreferrer noopener" target="_blank">pink noise</a>-like sound into surrounding areas. In doing so, the booths raise the ambient noise in nearby spaces, with an aim to make office chatter less intelligible. “The noise level itself? Yes, that’s kind of a problem, but the real problematic thing about noise is when your brain catches a familiar word,” says Hällfors.



Finland-based Framery added a new line of office &#8220;pods&#8221; in March that not only insulate sound for users seated within the booths, but have a “sound masking” system that emits pink noise-like sound into surrounding areas.PHOTO VIA FRAMERY



That’s why designers and entrepreneurs are adding sound&nbsp;into&nbsp;spaces, which can be a way to address concerns about either too much noise or too much silence. After working for others in the sound space for more than a decade, Evan Benway launched London-based&nbsp;<a href="https://www.moodsonic.com/" rel="noreferrer noopener" target="_blank">Moodsonic</a>&nbsp;in 2022. He now works with companies like SAP, GSK and Steelcase to create “responsive soundscapes” that use sensors to generate background sound that adapts in real time to how distracting or stimulating the environment is.



In effect, Moodsonic helps companies address one of the ironies of the post-pandemic workplace: People are distracted by sound in the office, but it’s often because it’s too quiet, rather than too loud. Instead of having 60 people in an open office where a hum of many conversations happens in the background, “now maybe you have 15 people, and when one person speaks, everyone hears everything that they’re saying,” Benway says. “It’s perfect speech intelligibility”—and the issue that bothers people most.



Moodsonic’s sensors pick up sound levels and adjust the “soundscapes,” which include nature-inspired subtle birdsongs or babbling brooks, depending on the ratio of loud sales calls to focused work or whether it’s a quiet Friday or bustling Tuesday. Benway won’t disclose revenues, but says the company is working with 30 of the 500 largest U.S. companies and is already profitable; in its second year it tripled the square footage where it provides soundscapes and grew subscriptions by 150%.



Others are finding success tapping into not just office workers’ need for privacy, but remote-based workers’ similar desires. Prominent venture capitalist Fred Wilson, the cofounder of New York-based&nbsp;<a href="https://www.usv.com/" rel="noreferrer noopener" target="_blank">Union Square Ventures</a>, and his wife Joanne, an angel investor, are launching the second location of&nbsp;<a href="https://framework.nyc/" rel="noreferrer noopener" target="_blank">Framework</a>, a coworking space in New York, this fall. The two got the idea after recognizing that in cities like New York, entrepreneurs, creatives and other remote workers have little space of their own and don’t necessarily want to be in “one of these places where there’s all of this shared nonsense,” Joanne says, referring to coworking spaces with group seating and little privacy.



At the Wilsons’ first location in Brooklyn’s Clinton Hill neighborhood, members pay anywhere from $755 to $860 per month, depending on lease term, for their own sound-insulated pod in the airy Framework space, complete with its own mini-fridge, kettle and French-press. Initially designed as a way to socially distance people during the pandemic, the booths now draw members for different reasons. “It’s quiet, and they don’t have to listen to their neighbor talking to their friend or wife or whatever,” Fred Wilson told&nbsp;Forbes. The original location has a waiting list of about two dozen people.



Furniture and interior designers, too, are building more acoustic-driven protection into their spaces.&nbsp;<a href="https://www.zintraacoustic.com/" rel="noreferrer noopener" target="_blank">Zintra Acoustics</a>, a line of wall panels, space dividers and ceiling fixtures that help absorb sound, has seen “surging” demand for acoustic solutions, said Kirsten Grosman, product marketing lead for the brand, which is owned by Australia-based Baresque Group, in an emailed statement. “Noise has become the top grievance among employees,” she said.



Meanwhile, the Swedish company IKEA, which has been in the office furniture business for 40 years, is rolling out a new line (known as MITTZON) that’s designed in part to address sound and noise annoyances. For example, it has added a wood fiber material, normally used in the construction industry for insulation, to acoustic screens that are wrapped in fabric. IKEA also worked with suppliers to quiet the mechanism that controls an electric standing desk’s height with a button press. “The role of the office has changed,” says Ikea product design developer Philip Dilé. “A majority of people told us they wanted to come back [to the office] to find focus and less distraction.”



Ikea’s new line, with its acoustic screens, is one example of a broader move to offer more solutions that don’t require lots of private offices or rooms, which arguably defeat the purpose of having people come into the office to collaborate. “Why would I want to come into a whole bank of pods or Zoom booths, and that’s my experience for the day?” asks Tracy Wymer, vice president of insights &amp; inspiration at Teknion, which makes booths itself. Wymer notes that his firm is working on a new product that provides “visual cues to whether you’re available or whether you’re in focused work,” but said it’s too early to offer details.



Software firm monday.com is piloting a device made by an in-house &#8220;Makers&#8221; team that’s positioned on the corner of workers’ computer monitors; users can set it to show coworkers how much time they need to focus.MONDAY.COM



One employer experimenting with visual cues is monday.com, an Israel-based project management software firm. It has a group of “Makers” on staff who’ve designed an Internet of Things (IoT) device called “FocusTime” that’s positioned on the corner of workers’ computer monitors. It looks like a dial that shows how much remaining uninterrupted time the user needs—and acts as a physical enhancement of the Slack or Teams status icons people are accustomed to seeing onscreen.



The idea originally came from a monday.com employee who struggled with colleagues’ interruptions as she returned to the office; an early version was simply a flag that could manually lift when someone shouldn’t be disturbed before becoming a device users could just tap on and off. It evolved into the current gadget, which users can set to show coworkers how much time they need to focus—the time window is copied to calendar apps—or if time for quiet work is blocked on a digital calendar, it will appear on the device.



Saron Paz, leader of the Makers team, says about 20 employees are taking part in a pilot using the prototype gadget; a company-wide test is in the planning stages and then, potentially, it could become a product it commercializes. (In September, monday.com plans to display the device at a customer conference in London and New York.) At the very least, Paz hopes the devices “start a conversation between people about what they need in terms of noise or other pain points,” he says, noting “we are still hard-wired for things that are physical.”



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Other companies are handing out noise-canceling headphones as back-to-office perks or adding more quiet spaces into designs. When Intuit’s Mailchimp division designed its new offices—a sleek, modern space along Atlanta’s popular walking and biking BeltLine path—acoustics were a priority. The old space had a sea of desks in a converted warehouse with only six phone booths or “drop-in” rooms; the new one has more than 60, says project executive Colin Hughes. Staffers are given the option of ordering noise-canceling headphones free of charge.



In this “innovation hub”—as Intuit calls the new Atlanta office–acoustic-friendly panels were used on walls, ceilings and as dividers to separate office “neighborhoods.” There are five “library” spaces throughout the building, several of which are wood-paneled, lined with books and housing roomy tables with task lighting that evoke the feel of a modern university library. People tend to work there silently, says Hughes: “If you see there’s books on the walls and it looks like a library, you’re going to behave that way.”



One driving factor behind creating more spaces for quiet work has been greater awareness about the needs of neurodiverse workers, such as those with ADHD or sensory processing challenges.&nbsp;<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7732033/" rel="noreferrer noopener" target="_blank">External research</a>&nbsp;shows that 15% to 20% of employees are neurodivergent, says Salesforce executive vice president for real estate and workplace services Relina Bulchandani. That prompted the software giant to design floors in its new Chicago tower with “meditation rooms” for quiet breaks and “library” spaces equipped with double monitor screens requested by software engineers.



While labeled as libraries, there are no signs to keep quiet, says Bulchandani. She notes that as people have spent more time in the office, they’ve grown more comfortable with taking calls at desks in open office areas, and Salesforce has urged people to do more of that—within reason—to keep small huddle rooms from booking up. “We&#8217;re encouraging folks that you can take calls at your desk, but just be mindful—you don’t want to be all day on video calls at your desk.”



Still, the paradox of many such solutions for office distractions isn’t lost on Argent’s West. If everyone simply had the choice of where they want to work—rather than having to report to an office—some of those solutions wouldn’t be needed. “All a company should really care about is efficiency,” he says. “If you’re delivering what’s expected of you, knock yourself out.”

Shot of a young man experiencing a headache at work while being overwhelmed

A Noisy Office Is A Nuisance–And A Business Opportunity

The Chinese e-commerce sites ship the equivalent of 88 Boeing 777 freighters of cargo worldwide every day. The vast volume has sent air freight rates through the roof, but the two companies have been willing to subsidize fast shipping as they grow globally — for now.



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Nine months ago, Niall van de Wouw, who tracks air freight shipments across the globe for logistics analytics company Xeneta, had never heard of Temu.



But seemingly overnight, the Chinese e-commerce site, along with another fast-growing competitor Shein, became so popular with American consumers that it spiked prices for fast shipping by airplane from China, creating a cargo crunch that’s altering global trade routes for an air freight industry scrambling to keep up.



“Nobody saw it coming last year,” van de Wouw, Xeneta’s chief air freight officer, told&nbsp;Forbes. “Their volumes could be the same order of magnitude as the largest freight forwarder in the world. Their volumes are crazy.”



At the time, the company was only a year and a half old. “This is very unusual,” he said. “I cannot recall one or two companies producing so much demand. That’s the scary bit about exponential growth.”



Temu, which largely sells clothing and housewares, and Shein, which built its brand on fast-fashion and has since expanded to consumer electronics and kitchen items, are unlike other retailers in that they sell items made directly by no-name Chinese companies, rather than selling an American brand that is made overseas. Part of their low cost has come from their decision to ship directly from China from those manufacturers, rather than working with well-known American brands that impose greater costs, prices, and quality. (The two Chinese companies have gotten so well-known that during&nbsp;Saturday Night Live’s&nbsp;season May 18 finale, the show&nbsp;<a href="https://www.youtube.com/watch?v=MKTN2OiR2R8" rel="noreferrer noopener" target="_blank">lampooned</a>&nbsp;a fictional company called “Xiemu.”)



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“Shein and Temu have a continuous &#8216;thirst&#8217; for air freight, which is unparalleled to anything we have seen previously.”Wenwen Zhang, air freight analyst, Xeneta
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But to get customers&#8217; their products in a reasonable amount of time, both companies have been relying heavily on air freight. Temu and Shein combined ship around 9,000 tons of cargo worldwide every day, or approximately 88 Boeing 777 freighters filled to the brim, according to February research from Cargo Facts Consulting. (The scale is comparable to Amazon’s Prime Air fleet, which has 86 aircraft in service, according to&nbsp;<a href="https://www.planespotters.net/airline/Amazon-Prime-Air" rel="noreferrer noopener" target="_blank">Planespotters</a>.)



That’s driven up prices to near-unprecedented levels. According to the&nbsp;<a href="https://www.xeneta.com/blog/robust-transpacific-air-cargo-market-set-for-busier-summer-than-usual" rel="noreferrer noopener" target="_blank">latest figures from Xeneta</a>, so far, the May air cargo “average spot rate” from southern China to the U.S. is now at about $4.75 per kilogram, the highest it’s been since the end of last year, rivaling what’s typically&nbsp;<a href="https://www.xeneta.com/blog/robust-transpacific-air-cargo-market-set-for-busier-summer-than-usual" rel="noreferrer noopener" target="_blank">peak demand</a>&nbsp;in the run-up to the holiday season. That’s more than double during same period in 2019, when the rate was $2.32 per kilogram.



The rates are still lower than recent peaks in 2020 and 2021, when that rate reached a high of $10 to $12 per kilogram. But those heights were due to the pandemic, which created shipping and supply chain shortages across the globe. Now, analysts say the rise is largely due to just two companies: Temu and Shein.



To keep up, some logistics and airline companies have even begun adding more flights to prepare for more growth. For instance, Atlas Air, an American air freight firm,&nbsp;<a href="https://www.atlasairworldwide.com/2024/03/atlas-air-and-yunexpress-expand-strategic-partnership-with-second-boeing-777-200-freighter/" rel="noreferrer noopener" target="_blank">announced</a>&nbsp;earlier this spring that it would soon launch a second air freight plane into service in partnership with YunExpress, a Chinese shipping company.



Regionally, Korean Air&nbsp;<a href="https://www.koreanair.com/us/en/footer/about-us/newsroom/list/240508-korean-air-s-financial-results-for-q1-2024--non-consolida" rel="noreferrer noopener" target="_blank">reported</a>&nbsp;earlier this month that it had made $2.8 billion in revenue during the first quarter of 2024, citing “robust cargo demand,” a 20 percent year-over-year increase. The airline added that during the second quarter, its cargo business would “capitalize on the growing e-commerce demand from China by strengthening client partnerships and allocating capacity on key routes.”



“Shein and Temu have a continuous &#8216;thirst&#8217; for air freight, which is unparalleled to anything we have seen previously,” Wenwen Zhang, an air freight analyst with Xeneta, emailed&nbsp;Forbes.



The boom has even impacted global shipping routes. Temu has begun new sea and air routes via Taiwan, Japan and Korea into the U.S., “altering traditional trade patterns,” per a&nbsp;<a href="https://www.documentcloud.org/documents/24654163-asia-pac-monthly-freight-report-april-to-may-2024#document/p5/a2558684" rel="noreferrer noopener" target="_blank">report</a>&nbsp;from Taiwanese shipping company Dimerco. “Consequently, freight rates from these alternative routes are now exceeding those from mainland China—an unusual occurrence.”



Last Monday, the Chinese government also&nbsp;<a href="https://english.www.gov.cn/news/202405/13/content_WS6641fdd3c6d0868f4e8e70ee.html" rel="noreferrer noopener" target="_blank">trumpeted</a>&nbsp;a new air cargo route between the southern Chinese city of Zhengzhou and Dallas and Atlanta that are “primarily catering to cross-border e-commerce shipments.”



Sending cargo by air is always considerably faster and more expensive than shipping by sea, which can carry a much larger volume of goods, albeit at a slower pace. The overwhelming majority of worldwide goods as measured by volume are shipped by sea, with typically only time-sensitive and high-value items put on planes.



Then there’s the environmental cost. According to&nbsp;<a href="https://www.freightos.com/freight-resources/air-sea-freight-co2-emissions-calculator/#:~:text=How%20Much%20CO%E2%82%82%20Does%20A,ton%20per%20kilometer%20of%20transportation." rel="noreferrer noopener" target="_blank">Freightos</a>, an online freight booking marketplace, cargo ships generate approximately 10 to 40 grams of carbon dioxide per metric ton-kilometer traveled, far less than air freight, which emits around 500 grams per metric ton-kilometer. )



For now, Shein and Temu provide free shipping for orders over a certain size, seemingly willing to absorb the higher costs as a shortcut to accelerated growth in the U.S. “Temu and Shein are relying on air freight because their business model is ultra-fast fashion and they need to get all these goods out immediately,” Guillermo Ochovo, the director at Cargo Facts Consulting, told&nbsp;Forbes.&nbsp;“They don&#8217;t have any other way than relying on air right now.”



But that could change over the medium to longer-term as the companies look for ways to cut costs now that they’re both established e-commerce platforms. They currently lack a maritime shipping and ground-based domestic logistics network comparable to Amazon or Walmart, but both companies have slowly started to expand their footprint within the United States and Mexico. Shein now has&nbsp;<a href="https://www.reuters.com/business/retail-consumer/shein-shifts-shipping-strategy-bring-china-made-goods-closer-us-shoppers-2023-09-22/" rel="noreferrer noopener" target="_blank">two distribution centers in Indiana</a>&nbsp;and California, and Temu has recently begun&nbsp;<a href="https://www.marketplacepulse.com/articles/temu-marketplace-launches-in-the-us" rel="noreferrer noopener" target="_blank">working with Chinese sellers</a>&nbsp;already based in the U.S.



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“The fact that we are talking about this kind of a market this early in the year is leading a lot of people to thinking how challenging peak season, Q4, will be.”Brian Bourke, Global Chief Commercial Officer, SEKO Logistics
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Air freight’s high costs come in part from largely empty planes that must make the return trip back from the U.S. to China: shipping in that direction costs maybe a fifth of the price to ship from China to the U.S., van de Wouw said.



“You get a full plane to the U.S. and a deadhead on the way back,” he said, using an aviation industry term for a near-empty or fully empty plane. “The backhaul becomes a bloodbath.”



Neither Shein nor Temu responded to Forbes’ request for comment.



A big TV advertising blitz in the U.S. has fueled Temu’s growth, including ads during the 2023 and 2024 Super Bowls that encouraged Americans to “shop like a billionaire.”&nbsp;<a href="https://business.yougov.com/content/49162-deep-discount-wonders-how-aware-are-us-shoppers-of-retail-brand-temu" rel="noreferrer noopener" target="_blank">New survey data released last month from YouGov</a>&nbsp;shows that nearly all Americans surveyed said they had heard of the company.



Its parent company&nbsp;<a href="https://www.forbes.com/companies/pdd-holdings/?sh=6e123a883cba">PDD Holdings</a>, which also owns an enormous sister online merchant site called Pinduoduo that only operates in China, is worth more than $167 billion. PDD Holdings is technically based in the Cayman Islands. The company has over 17,000 employees worldwide, according to its most recent&nbsp;<a href="https://www.documentcloud.org/documents/24613208-pdd-holdings-inc-2023-annual-report#document/" rel="noreferrer noopener" target="_blank">annual report</a>, the overwhelming majority of which are believed to be working in China.



Last month, PDD Holdings announced record&nbsp;<a href="https://www.documentcloud.org/documents/24613208-pdd-holdings-inc-2023-annual-report#document/p94/a2554734" rel="noreferrer noopener" target="_blank">annual profits of over $8.4 billion</a>&nbsp;in 2023, which includes approximately $5 billion in net income attributed to “other subsidiaries of PDD Holdings,” a group that includes Temu. That’s nearly twice as much as the $3.4 billion in profits brought in by the Chinese arm of the company.Shein is valued at $66 billion&nbsp;<a href="https://www.cnbc.com/2023/11/27/shein-files-for-us-ipo-as-fast-fashion-giant-looks-to-expand-its-global-reach.html" rel="noreferrer noopener" target="_blank">according to CNBC</a>, has been rapidly encroaching into the territory of American fashion brands like Gap and Macy’s. The privately-held company has also grown incredibly fast, going from an approximated $2.5 in revenue in 2019 to an estimated $48 billion this year,&nbsp;<a href="https://ecommercedb.com/insights/shein-business-strategy-growth-competition/4708" rel="noreferrer noopener" target="_blank">according to ECDB</a>, a German e-commerce analytics firm.



Both companies, which are likely to surpass revenues of $90 billion this year, stand to have a record-breaking holiday season — and shippers are already concerned.



“The fact that we are talking about this kind of a market this early in the year is leading a lot of people to thinking how challenging peak season, Q4, will be,” Brian Bourke, chief commercial officer of SEKO logistics, told&nbsp;Forbes.



“If we are like this now and it’s early May, imagine what it will be in September, October, November and December?”

Temu Package Stock Photos

You’re Buying So Much From Temu And Shein The Air Cargo Industry Can’t Keep Up

In April, Google fired 50 staffers after protests over its contracts with Israel. As employers worry that campus activism could spread to the workplace, Forbes spoke with legal experts about the protections employees have—and don’t have—when it comes to speaking out at work.



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By the time Emaan Haseem received notice on April 17 that she was being fired from Google, she was ready to leave.



The 23-year-old software engineer had joined the company in 2022, straight out of the&nbsp;<a href="https://www.forbes.com/colleges/university-of-texas-at-austin/?sh=34a9b5c34eb6">University of Texas at Austin</a>. She was excited to be going to work for a company she thought wasn’t involved with military technology after encountering defense industry heavyweights, such as Palantir, at campus recruiting events. But her enthusiasm was short-lived: Shortly after signing her offer letter, Haseem learned about Project Nimbus, a&nbsp;<a href="https://www.forbes.com/sites/richardnieva/2022/09/09/google-and-amazon-protest-project-nimbus-ai-contract-israel/?sh=5f3de753d162">$1.2 billion cloud computing contract</a>&nbsp;Google and Amazon have with the Israeli government.



After the October 7 Hamas attacks on Israel, Haseem joined “No Tech For Apartheid,” an advocacy group of tech industry employees focused on ending the contract, and decided to participate in an April 16 sit-in at Google’s Seattle office. (Protests also took place at its New York and Sunnyvale, Calif. offices.) “I was ready to leave my job honestly,’’ says Haseem, who reports she left the sit-in when Google security asked her to. “I wanted to see if there was any way to leave [Google] more aware [about Project Nimbus] than I found it.”



Haseem is one of about 50 employees who were terminated from Google; some are joining a charge filed against the search giant on April 29 with the National Labor Relations Board (NLRB). They claim they were unfairly fired over their participation in a “peaceful, non-disruptive protest that was directly and explicitly connected to their terms and conditions of work,” according to a copy of the charge viewed by&nbsp;Forbes.



In response to the charge, Google spokesperson Bailey Tomson said in an emailed statement that employees were “disrupting and occupying work spaces, and making other employees feel threatened and unsafe.” In a company&nbsp;<a href="https://blog.google/inside-google/company-announcements/building-ai-future-april-2024/" rel="noreferrer noopener" target="_blank">email</a>&nbsp;sent April 18, CEO Sundar Pichai said: “This is a business, and not a place to act in a way that disrupts coworkers or makes them feel unsafe, to attempt to use the company as a personal platform, or to fight over disruptive issues or debate politics.”



The Google case is the latest to raise a host of questions about the rights U.S. workers have when it comes to activism on the job—and the challenges companies could face if unrest on college campuses spreads into workplaces.&nbsp;For employers, a recent ruling from the NLRB may expand questions about some workers’ protected political speech and its connection to working conditions. And for employees, the fundamental question is this: “What can I really do and say when it comes to activism at work?”



“This is a fraught issue,” says Mark Hanna, a Washington, D.C.-based labor and employment lawyer who represents workers. “There are too many ways where employers and employees are going to fall into traps by either clamping down too hard, or risking their job by being too expressive. Everybody should be careful here.”



Google’s case has grabbed numerous headlines, but workplace activism has been growing for years as more CEOs have taken on social and political issues—whether publicly opposing bills that limit transgender rights or pledging billions to racial justice causes—and as employees are increasingly encouraged, in the fashionable parlance of many managers, to “bring their whole selves to work.” In a highly-charged presidential election year, as workers have more tools to criticize their employer on social media and as younger generations increasingly expect workplaces to line up with their personal or political values, the environment is ripe for more activism to find its way into the office.



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“People do not understand that you can be fired for something as arbitrary as the boss not liking the kind of socks you wear.”Cathy Creighton, director of Cornell University’s Industrial and Labor Relations School’s Buffalo Co-Lab
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Add concerns that the current pro-Palestinian protests on college campuses could spill into the workplace, and lawyers say their phones have been lighting up with employers asking for advice. Sam Schwartz-Fenwick, a labor and employment lawyer at Seyfarth Shaw in Chicago, says there’s “a real fear of how to respond.” Employers are asking questions like: “How do we lower the temperature? How do we remind people that their focus at work is to do work?”



For employees who want to engage in protests at work, the legal questions are also complex—but the protections are relatively limited. By and large, there are fewer protections for employees than many people think, but there are key exceptions—depending on whether the employee works for the government; is in a union with a collective bargaining agreement or has another contract in place; is covered by certain state laws; or based on what issues employees are protesting.



“People do not understand that you can be fired for something as arbitrary as the boss not liking the kind of socks you wear,” says Cathy Creighton, director of Cornell University’s Industrial and Labor Relations School’s&nbsp;<a href="https://www.ilr.cornell.edu/buffalo-co-lab" rel="noreferrer noopener" target="_blank">Buffalo Co-Lab</a>. Most employees, she says, are subject to the concept of “at will” employment, which is presumed for employees in all states but Montana. That means unless there’s a specific law or contract in place that offers workers protections and makes firing illegal—and there are a number of important exceptions—many workers “can be fired for a good reason, a bad reason or no reason,” Creighton says.



One widespread misconception, employment lawyers say, is that the notion of freedom of speech extends to private workplaces. But unless someone works for the government—employees of public universities, it should be noted, are typically state employees—the First Amendment does not apply. Protection for freedom of speech, says Jeff Hirsch, a law professor at the University of North Carolina-Chapel Hill and a former litigator with the National Labor Relations Board, “only applies to the government. Period. Google doesn’t have to follow the First Amendment.” Deena Merlen, an employment and labor lawyer in Connecticut, echoes that assessment. Private employees, she says, &#8220;don&#8217;t have any constitutionally protected rights under federal law to say what [they] want and not be fired for it.”



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“There are too many ways where employers and employees are going to fall into traps by either clamping down too hard, or risking their job by being too expressive. Everybody should be careful here.”Mark Hanna, Washington, D.C. labor and employment lawyer representing workers
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So can workers ever speak out? Yes, but it depends on a range of specific circumstances. For instance, some individual states or local jurisdictions have protections for employees’ legal off-duty political activity, or from discrimination based on political affiliation. Unions also offer some protections. Employees who have a collective bargaining agreement, or a legal contract between an employer and a labor union, typically have some protections through “just cause”—a concept that’s often part of union contracts and may protect workers from retaliation or unfair firings. But only about 10% of workers are members of a labor union, according to&nbsp;<a href="https://www.bls.gov/news.release/pdf/union2.pdf" rel="noreferrer noopener" target="_blank">2023 data from the Bureau of Labor Statistics</a>, and not all members of a union have a current bargaining agreement in place.



In addition, even employees who aren’t union members can still benefit from protections in the National Labor Relations Act, which gives private sector employees who are not in supervisory roles the&nbsp;<a href="https://www.nlrb.gov/about-nlrb/rights-we-protect/your-rights/employee-rights" rel="noreferrer noopener" target="_blank">right</a>&nbsp;to seek better working conditions and protections from retaliation. To do so, they have to meet the standard of “protected concerted activity,” which is legal-speak that means two or more employees must be acting together “for their mutual aid or protection regarding terms and conditions of employment.”



That key phrase is the one lawyers say will be under scrutiny when it comes to the Google workers’ charge, especially after a February&nbsp;<a href="https://www.nlrb.gov/news-outreach/news-story/board-rules-employees-black-lives-matter-action-at-home-depot-was" rel="noreferrer noopener" target="_blank">decision</a>&nbsp;by the Biden administration’s more labor-friendly National Labor Relations Board. In it, the board sided with a Home Depot employee who refused to remove the hand-drawn letters “BLM” (a reference to the Black Lives Matter movement) from a work apron, calling it a “logical outgrowth” of earlier complaints employees had made about racial discrimination in the workplace.



As a result, the NLRB concluded the employee’s conduct was also “for mutual aid or protection.” Home Depot is appealing the decision; a spokesperson, Beth Marlowe, said in an emailed statement the company disagrees with the NLRB’s decision and “is fully committed to diversity and respect for all people. We do not tolerate any kind of workplace harassment or  discrimination. ”



The decision has gotten employers’ attention. “A lot of employers took notice of that,” says Lindsay Burke, a Washington, D.C.-based employment lawyer who represents employers. The NLRB, she says, took a “pretty expansive view of speech that on its face might look political, but then could just be tied back to concerns about the way the workplace is operating.”



Traditionally, “terms and conditions” was presumed to be a straightforward concept that covered wages, benefits, working hours or safety conditions. “Just saying ‘I don&#8217;t like the business my employer&#8217;s engaging in’ is not going to cut it,’” says UNC’s Hirsch.



But in the&nbsp;<a href="https://www.nlrb.gov/news-outreach/news-story/board-rules-employees-black-lives-matter-action-at-home-depot-was" rel="noreferrer noopener" target="_blank">February ruling</a>, the NLRB appeared to make a connection between what might be unprotected workplace speech (such as wearing a Black Lives Matter button) and a history of related complaints about working conditions that might warrant protection. The case, says Risa Lieberwitz, a law professor at Cornell who is also academic director of its&nbsp;<a href="https://www.ilr.cornell.edu/worker-institute" rel="noreferrer noopener" target="_blank">Worker Institute</a>, “is a very important decision because it makes clear that employees’ expressions, through their communication about [related political or social issues] … can be linked to labor issues within the workplace.”



The ex-Google employees may attempt to argue something similar: Their charge filed with the NLRB said employees were terminated for participating in “a peaceful, non-disruptive protest that was directly connected to their terms and conditions of work.” Meanwhile, in a November&nbsp;<a href="https://medium.com/@notechforapartheid/googleopenletter-868f0c4477db" rel="noreferrer noopener" target="_blank">open letter published online,</a>&nbsp;the No Tech For Apartheid group alleged that managers at Google had been “inappropriately using their ranks to question, report and attempt to fire” employees expressing pro-Palestinian views.



In response to the open letter, Google’s Tomson said in a statement that “this is a highly sensitive time and topic in every company and workplace, and we have many employees who are personally affected. The overwhelming majority of those employees are not engaged in internal discussions or debate,” adding many appreciated the company’s “focus on the safety of employees.” Regarding the NLRB charge, the company said the protesting employees’ behavior was “completely unacceptable” and that Google “carefully confirmed and reconfirmed that every single person whose employment was terminated was directly and definitively involved in disruption inside our buildings. We are confident in our position and stand by the actions we’ve taken.”



Indeed, employment lawyers say one factor that’s likely to come into play in such scenarios is whether workers speaking out are violating workplace conduct policies. “The number one thing that every employer must do is provide a safe working environment for their employees,” says Rick Grimaldi, an employment lawyer with Fisher Phillips in Philadelphia, speaking generally rather than specifically about Google. “If I&#8217;m Jewish and I&#8217;m going to work and I feel threatened because of it, then I think the employer has an obligation to take action to make sure the behavior stops.”



Still, policies should be consistently applied, lawyers say. “What I would caution employers to do is to be content-neutral—to have policies that apply to everything,” says Hanna, taking similar actions “whether it&#8217;s a union pin, whether it&#8217;s a [button with a] Palestinian flag or a rainbow flag.”



What about political speech and activities that employees engage in outside of work? Several states have explicit protections for some types of legal off-duty political activities. Even in other states, many employers don’t want to fire people for what they do on their own time unless the actions are illegal, says David Kurtz, an employment litigation practice co-chair at Constangy, Brooks, Smith &amp; Prophete who practices out of Boston. If&nbsp;they&#8217;re protesting on their own time “but they’re seen on social media engaging in hate speech or defacing property … then [employers] would have the opportunity to take action.”



The Biden NLRB has weighed in here too. An August NLRB&nbsp;<a href="https://www.nlrb.gov/news-outreach/news-story/board-adopts-new-standard-for-assessing-lawfulness-of-work-rules" rel="noreferrer noopener" target="_blank">ruling</a>&nbsp;appeared to expand the protections given to employees’ conduct outside the workplace by setting a new standard: An employer&#8217;s policies restricting off-duty activities, including speech, would need to be more narrowly tailored to serve “a legitimate and substantial business interest.”



For workers or students who choose to protest, there are risks for future employment, too. As it becomes easier to identify protest attendees by a mere picture–one reverse Google Image picture can turn up a person’s name—the law doesn’t offer much protection when it comes to future jobs, says Merlen, unless the employee can successfully argue they weren’t hired over a protected characteristic such as their religion.



Workers seem to recognize that too. Says one former Google employee who worked on internal DEI initiatives and requested anonymity for fear of retaliation from future employers: “We knew that the labor law was gray. But we decided this was a risk we were willing to take.”

Multicultural Diverse Office Managers and Business People Picketing Outside on a Street. Men and Women Screaming for Justice, Holding a Megaphone, Picket Signs and Posters. Economic Crisis Strike.

All Hands Memo: Why Activism At Work Could Get You Fired

With Baby Boomers aging and nursing home care costs climbing, obscure old sleeper laws on the books in more than half the states could come back to haunt the adult children of seniors who can’t pay for their own care.



In her five years as a Democratic member of Pennsylvania’s State House, Kristine Howard has fought for gun control, abortion rights, environmental protections and greater funding for public education. But this year, after the death of a colleague, Anthony M. DeLuca Sr., she took up his decade-long crusade to change an obscure state law under the provocative bill title: &#8220;Stop Bankrupting Pennsylvanians Over Family Medical Bills” Act.



The law Howard is seeking to change is Pennsylvania’s “filial support” law–a concept dating to colonial days, with the current version written into state law in 1937. It makes those with financial means legally responsible for nursing home, medical and other bills of destitute family members, including aging parents, adult children and a spouse.



“It can be a rude awakening for many people,” says Howard, a 62-year old lawyer representing Chester County in eastern Pennsylvania.



More than half the states and Puerto Rico have such laws on the books, though most of them are what Katherine C. Pearson, an elder law expert and law professor at Pennsylvania State University, refers to as “scarecrow” laws. That means they’re rarely enforced but left in the state code as a warning—in this case, to those who might consider shirking familial responsibility, whether it’s helping to pay parents’ bills or providing hands on care themselves. (An&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2023/11/07/forget-national-caregivers-month-think-about-what-family-caregivers-need/?sh=47cc1bcb19cb">estimated 42 million Americans</a>, the largest group of them women in their 50s, but increasingly men and younger folks too, provide caregiving to aging relatives.)



Two significant Pennsylvania cases, combined with the rising costs of long term care nationwide and yawning gaps in coverage for that care, show that these scarecrow laws can turn into a live threat–and not just to Pennsylvanians.



The Keystone state’s law, which provides an exemption if your parents abandoned you for 10 years or more while you were a child–but no break for adult estrangement–gained new relevance in 2012. That’s when the Pennsylvania Superior Court&nbsp;<a href="https://law.justia.com/cases/pennsylvania/superior-court/2012/536-eda-2011.html" rel="noreferrer noopener" target="_blank">held John Pittas</a>&nbsp;liable for his mother’s full $93,000 unpaid nursing home bill (resulting from a car accident), after she’d moved to Greece to live with two of her other children.



In 2019, the Pennsylvania Supreme Court&nbsp;<a href="https://law.justia.com/cases/pennsylvania/supreme-court/2019/78-map-2017.html" rel="noreferrer noopener" target="_blank">ruled</a>&nbsp;that a Princeton, N.J. couple could be held liable for an unpaid $205,000 bill for the care of their severely disabled adult son at Melmark, a residential care facility in Delaware County, Pennsylvania. (New Jersey had been paying the tab, but stopped paying because it wanted him moved to a cheaper New Jersey facility. The couple wouldn’t have been liable under New Jersey law, but Pennsylvania’s high court decided it could hit the parents with Pennsylvania’s harsher rules.)



There’s no uniformity in the filial laws. While in Pennsylvania, the potential hit is wholly financial (including a possible lien on your property), in some states failure to support a parent can be prosecuted as a criminal offense. Massachusetts’&nbsp;<a href="https://malegislature.gov/Laws/GeneralLaws/PartIV/TitleI/Chapter273/Section20" rel="noreferrer noopener" target="_blank">law</a>, written in 1915, imposes a fine of up to $200 and a prison term of up to one year (or both) for “neglect or refusal to support a parent.”



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“Most adult children do undertake responsibilities for their parents as they age&#8230; They do this without laws obligating them to do so, thank goodness.”Law Professor Katherine C. Pearson
</blockquote>



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North Carolina’s&nbsp;<a href="https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_14/gs_14-326.1.html" rel="noreferrer noopener" target="_blank">law</a>, which has been in its current form since 1955, makes it a misdemeanor–which could result in jail time–for a person to &#8220;without reasonable cause, neglect to maintain or support his or her parent or parents, if such parent or parents be sick or not able to work and have not sufficient means or ability to maintain or support themselves.&#8221; The law is still on the books, though recent history suggests it is not often enforced. Ditto in&nbsp;<a href="https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=51003" rel="noreferrer noopener" target="_blank">Kentucky</a>.



Even in states where there hasn&#8217;t been an appetite to enforce filial support laws, there also hasn&#8217;t been much movement to repeal them. Economics–and that desired scarecrow effect—are likely the primary reasons.



While the federal Medicare program pays for the majority of medical care for those over 65, it does not–<a href="https://www.forbes.com/sites/dianeomdahl/2023/01/10/warning-medicare-does-not-pay-for-long-term-care/?sh=7e58463d5850">despite what many middle class Baby Boomers think</a>–cover long term custodial care. The confusion over Medicare stems from the fact that the federal program will pay for up to 100 days of rehabilitation in a skilled nursing care facility (after a three-day hospital stay) and some skilled nursing or physical therapists visits at home, but not for custodial care–the kind of help with activities of daily living (such as bathing, dressing and eating) a majority of elders end up needing either in a nursing home or their own or their children’s home.



It’s&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2022/04/15/is-long-term-care-a-predictable-need-or-an-unexpected-one/?sh=1e2daa5a4b87">hard to predict</a>&nbsp;whether any one individual will need extended long term care support–about four in ten of today’s 65-year-olds won’t need such care at all, but more than 20% of Boomers will&nbsp;<a href="https://acl.gov/ltc/basic-needs/how-much-care-will-you-need" rel="noreferrer noopener" target="_blank">need five or more years of care</a>. The cost of nursing home care varies based on geography and level of care, but it’s steep: on average, a semi-private room in a nursing home runs around $8,669 per month, while a private room will cost you $9,733 per month, according to Genworth’s annual Cost of Care&nbsp;<a href="https://www.genworth.com/aging-and-you/finances/cost-of-care" rel="noreferrer noopener" target="_blank">survey</a>. Home health care aides now average $33 per hour, with homemaker services running at $30 an hour, the survey found.



At those rates, many seniors who need years of care will run out of money. Private long term care insurance isn’t much of an option these days—a raft of carriers have stopped selling the policies&nbsp;<a href="https://www.forbes.com/sites/howardgleckman/2024/02/21/voters-to-decide-on-washingtons-public-long-term-care-insurance-program/?sh=3a7e18ca5ea8">because the risk is so high</a>&nbsp;and healthy consumers aren’t buying policies because they fear premium increases. (The Obama Administration killed plans for a voluntary public insurance program after concluding&nbsp;<a href="https://howardgleckman.com/2011/10/20/what-we-learned-from-the-class-long-term-care-debacle/" rel="noreferrer noopener" target="_blank">that premiums in them would be unaffordable</a>&nbsp;for most people.)



That is where Medicaid, a joint federal-state program, comes in. It is primarily geared toward low-income families, but picks up long term care costs for elderly once-middle class folks who have exhausted their assets.



The eligibility standards vary from state to state—in Pennsylvania, in 2024, a single nursing home Medicaid applicant must have income under $2,829 per month and assets under $2,000 (not a typo). Assets include stocks, bonds, investments, and bank accounts—and your IRA or 401(k) (fortunately, however, the retirement accounts of a non-applicant spouse are exempt). Assets that aren&#8217;t included are personal belongings, your vehicle, irrevocable burial reserves (up to 25% of the average cost of burial in one&#8217;s area), and often, your primary home.  The State of New York is a bit more generous when it comes to assets. While your income must be under $1,732 monthly, you can retain assets of up to $30,182. Unlike in Pennsylvania,&nbsp;<a href="https://www.medicaidplanningassistance.org/medicaid-eligibility-new-york/" rel="noreferrer noopener" target="_blank">New York exempts</a>&nbsp;your IRA and 401(k) plans if they are in payout status, meaning that you&#8217;re taking required minimum distributions (RMDs).



Bottom line: to afford years of long term care, you typically need to be wealthy enough to cover costs out of your savings, or needy enough to qualify for government assistance.



Some seniors plan to get to the &#8220;needy&#8221; level by giving assets away. Done right, and early enough, with professional help, Medicaid planning works, says&nbsp;<a href="https://www.forbes.com/sites/carolynrosenblatt/?sh=7f56d1296517">Carolyn Rosenblatt</a>, a California lawyer and nurse (and&nbsp;Forbes&nbsp;contributor) who advises families on elder issues.



But the government has tough rules to discourage last minute maneuvers; when someone applies for Medicaid long-term care coverage, the government looks back at any asset transfers the applicant (or the applicant’s spouse) has made during the lookback period, typically 60 months. The government can deny coverage for an extended period based on the amount transferred and the cost of care and rules in each state. So, for example, Pennsylvania’s lookback rate is currently $11,548 per month. If you gave away $100,000 within the lookback window, you would be ineligible for almost 9 months. And there’s no time limit here–if you gave away $2 million, you&#8217;d be ineligible for 173 months. (As a practical matter, that would mean you’d have to wait five years after the transfer to apply at all.)



If an elder enters a nursing home, runs through his money, and then is found ineligible for Medicaid, a nursing home’s best bet is to come after the children with a filial suit (or more commonly, a threat of one) to cover the cost of care. The other alternative is eviction–not a terrific option when 24-hour-a-day care may be needed and no other nursing home will take a prospective resident with neither assets nor Medicaid coverage.



The Medicaid look-back rules might seem fair to taxpayers, who after all, pay the cost of the program. But filial laws are separate from Medicaid planning, good or bad. In Pennsylvania, for example, it doesn’t matter whether an adult child has received a penny of assets from his broke parent—only that the child has the financial resources to pick up unpaid bills. An ailing, aging parent could give all his money to Child A, who gambles it away and ends up busted. Then, if that parent is denied Medicaid because of the transfer, the nursing home could come after Child B, who got nothing from the parent, but has money in the bank because he works hard and saves.



That is where Pennsylvania State Rep Howard and her &#8220;Stop Bankrupting Pennsylvanians Over Family Medical Bills&#8221; Act comes in.



The bill would not repeal filial laws but would tweak them in a way that she thinks sounds fairer. Howard said it would modernize the law &#8220;to ensure spouses, children, and parents are only held liable for outstanding medical bills if the indigent individual has colluded with the family member to hide assets within the past five years, or if the family member fails to cooperate in the Medical Assistance process.&#8221; In other words, it would copy the Medicaid look-back process–kids would be on the hook if parents had recently transferred assets to them, but couldn’t be legally forced to cough up money they’d earned on their own to pay for their aging parents.



Law professor Pearson, no fan of filial laws, has worked for years to protect elders from financial exploitation. She observes she has “often heard from older parents who express worry about the possibility of ‘the government’ imposing a burden on their children,’’ but “has never heard one say they are relying on `the law’ to make their children do their duty.”



“Most adult children do undertake responsibilities for their parents as they age and especially if their parents’ abilities wane,’’ she adds. “They do this because it is the right thing to do. They do this without laws obligating them to do so, thank goodness.”

Calculate drug cost.,doctor is calculating cost of treatment

Why You Might Be Responsible For Paying Your Parents’ Medical Debts

A fight over a vital federal tax credit intended to kickstart a market for clean hydrogen and worries over high production costs are cooling near-term expectations for the climate-friendly fuel.



Clean hydrogen has been heralded as a carbon-free fuel that’s key to efforts to remediate the climate crisis. It would help clean up dirty industries like chemical and steel production, be a source of clean transportation fuel and help the U.S. hit a goal of net-zero greenhouse gas emissions&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2021/10/us-long-term-strategy.pdf" rel="noreferrer noopener" target="_blank">by 2050</a>. But getting things started isn’t going so well.



After years of hype, fundraising, and&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2023/10/13/us-amps-up-clean-energy-push-with-50-billion-hydrogen-hub-plan/?sh=431f604144f9">billions of dollars of federal support</a>&nbsp;to get a green hydrogen market off the ground, there’s growing pessimism over how fast the carbon-free fuel can ramp up. Frustrated by proposed guidelines for a crucial government incentive that they deem too strict, companies including ExxonMobil and Plug Power are threatening to scrub or delay big hydrogen projects.



“Two years ago this was super-hyped. It was like, everybody&#8217;s exuberant,” Raffi Garabedian, CEO of <a href="https://www.forbes.com/sites/alanohnsman/2024/02/21/green-hydrogen-could-help-save-the-planet-this-startup-wants-to-make-it-cheap/?sh=1cd8fe4e2835">Electric Hydrogen</a>, told Forbes. “What’s happened is people started realizing, ‘Oh, shit, this thing I&#8217;ve been talking about for a while — the hype-to-reality ratio — projects aren&#8217;t getting built. I wonder why? People have started realizing this is really hard.”



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Clean hydrogen — particularly the “green” variety made from just water and renewable electricity — is central to the Biden Administration’s strategy for slashing carbon pollution. But proposed rules for a tax credit worth up to $3 a kilogram to offset the fuel’s higher production costs favor projects that rely on new renewable (or nuclear) power sources, which raises the cost substantially. Garabedian is fine with that, but some competitors say it’ll keep the price of green hydrogen too high. And ExxonMobil is unhappy that its approach — making hydrogen from natural gas but capturing the CO2 before it can escape into the atmosphere — probably won’t get the full credit.



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Dirty hydrogen can be made for $1.06/kilogram. Green hydrogen costs up to four times as much.
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As with other low-carbon technologies, including solar panels, wind turbines and electric car batteries that had to conquer early high costs, clean hydrogen has to get cheaper to be competitive and impactful. But getting even to cost parity with the dirty industrial variety made from natural gas won’t be easy — it’s made for as little as&nbsp;<a href="https://www.eia.gov/todayinenergy/detail.php?id=61763&amp;src=email" rel="noreferrer noopener" target="_blank">$1.06 a kilogram</a>. Green hydrogen costs about four times as much.



The world uses about 92 million tons of hydrogen a year, mainly for heavy industry. By the end of the decade, industry researcher Wood Mckenzie estimates clean hydrogen production could grow to about 14 million tons, from essentially nothing now. It’s an amount that would mark the start of critical mass for the fuel. But that’s about 1 million tons less than it had previously anticipated in late 2023.



“We expected some delays, but they&#8217;re a bit more than what we and others had thought,” said Murray Douglas, vice president for hydrogen research at Wood Mackenzie in Edinburgh, Scotland.



“It’s everything: the cost of the renewable generation; it’s the rules; it’s general cost inflation across all industries; and then it&#8217;s also convincing (customers) that they should sign up now, rather than waiting for costs to come down,” he said. “When you put these things together, you begin to get a more bearish view of 2030.”



That’s leading some fossil fuel companies to take a presumptive victory lap.



“We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions,” Amin Nasser, CEO of Aramco, the world’s largest oil company,&nbsp;<a href="https://www.aramco.com/en/news-media/speeches/2024/ceraweek-keynote-speech-by-amin-h-nasser" rel="noreferrer noopener" target="_blank">said</a>&nbsp;at S&amp;P Global’s recent CERAWeek conference in Houston. “Many of us have been saying for a long time that the world has been trying to transition in a fog, without a compass, on a road to nowhere.”



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<h2 class="wp-block-heading" id="h-credit-critics">Credit Critics</h2>



Along with green hydrogen startups, incentives to ramp up a clean hydrogen industry need to compel fossil energy companies that are a big part of the climate problem to join in. But the plan as proposed doesn’t do that.



In a&nbsp;<a href="https://www.regulations.gov/comment/IRS-2023-0066-28305" rel="noreferrer noopener" target="_blank">letter to regulators</a>, the biggest U.S. oil company said a project in Baytown, Texas, that it’s touted as the world’s largest low-carbon hydrogen plant, is at risk from the proposed credit rules that don’t incentivize carbon capture and storage. If they’re not altered, “the cost of the hydrogen produced will be such that the market for low carbon hydrogen will not be catalyzed and our project, and possibly others, will not proceed,” wrote ExxonMobil vice president Jim Chapman in the letter.



Even Plug Power, an early leader in green hydrogen, isn’t pleased with having to use power from new, clean sources to get the full credit. The company told&nbsp;Forbes&nbsp;a&nbsp;<a href="https://www.plugpower.com/plugs-california-green-hydrogen-plant-saves-water-creates-new-energy-source/" rel="noreferrer noopener" target="_blank">green hydrogen plant in California</a>&nbsp;intended to make 500 tons of carbon-free hydrogen a day may not open next year as planned due to the 45V tax credit proposal and other factors. (Its first such facility opened in Georgia this year, getting electricity to make hydrogen from a new nuclear power plant. All hydrogen made there will be eligible for the credit)



As currently proposed, “we think the U.S. now takes a real backstep to Europe on hydrogen,” Plug CEO Andy Marsh said in a&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2023/12/22/green-hydrogen-makers-say-strict-federal-tax-credit-rules-will-stall-us-boom/?sh=7877597f2e1c">December 2023 interview</a>.



A final version of the credit rules is expected late this year, likely before the November election.



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<h2 class="wp-block-heading" id="h-pricey-fuel">Pricey Fuel</h2>



ExxonMobil’s interest in making cleaner hydrogen is understandable. Like Aramco, it already uses huge amounts of conventional hydrogen — and ranks among the&nbsp;<a href="https://carbonmajors.org/briefing/The-Carbon-Majors-Database-26913" rel="noreferrer noopener" target="_blank">world’s largest sources of carbon pollution</a>. That’s not a good look as the worsening climate crisis brings new record temperatures on&nbsp;<a href="https://www.washingtonpost.com/climate-environment/2024/04/09/march-record-global-heat/" rel="noreferrer noopener" target="_blank">land</a>&nbsp;and&nbsp;<a href="https://www.nytimes.com/2024/04/10/climate/ocean-heat-records.html" rel="noreferrer noopener" target="_blank">sea</a>&nbsp;almost weekly.



Given the global scale of its operations and cash reserves of more than $31 billion, ExxonMobil is well-positioned to be a leader in capturing and storing CO2 from its operations, making what’s known as blue hydrogen. But the Biden Administration has decided not to reward that approach.



A landmark&nbsp;<a href="https://onlinelibrary.wiley.com/doi/full/10.1002/ese3.956" rel="noreferrer noopener" target="_blank">study by Cornell scientist Robert Howarth</a>&nbsp;found that carbon capture and storage is energy-intensive and leads to even more climate pollution than if the CO2 just wafted into the air. Its greenhouse gas footprint is also “more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat,” the study found.



Unlike petroleum-based fuels, there’s no commodity market price for hydrogen. It’s supplied directly from producers to consumers. Big users, like oil refineries and chemical plants, get it for the lowest cost. Others pay much more.



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“The cost of hydrogen is running about 2.5 times more than for compressed natural gas.”Foothill Transit CEO Doran Barnes
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In California, the only U.S. market for hydrogen vehicles, Toyota-backed First Element operates dozens of fuel stations dispensing highly compressed hydrogen for an eye-popping $36 a kilogram to drivers of Toyota Mirai sedans and Hyundai Nexo SUVs. (The price is distorted by the fact that most hydrogen vehicle owners get prepaid cards for up to six years of free fuel.)



Prices are a bit better for Foothill Transit, a Los Angeles-area agency with three dozen hydrogen buses and that’s adding 20 more. It negotiated a multiyear rate from a hydrogen supplier of $9.12 a kilogram, said Foothill CEO Doran Barnes. And while the buses are reliable, “the cost of hydrogen is running about 2.5 times more than for compressed natural gas,” he said.



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<h2 class="wp-block-heading" id="h-need-for-power">Need For Power</h2>



The requirement that power to make green hydrogen come from new clean energy sources is understandable. The electric grid is already struggling to keep up with rising demand from power-hungry data centers, booming U.S. manufacturing and growth in electric vehicles that require charging.



“If we&#8217;re going to grow energy demands by producing electrolytic hydrogen we have to add new clean power resources to support that,” said Eric Guter, vice president of hydrogen mobility for Air Products, the world’s biggest supplier of the gas. “Otherwise we&#8217;re going to exacerbate the emissions problem on the backs of taxpayers, and that will destroy the long-term outlook for a viable clean hydrogen market.”



Air Products plans several large-scale green hydrogen projects that open later this decade — including&nbsp;<a href="https://www.airproducts.com/energy-transition/neom-green-hydrogen-complex" rel="noreferrer noopener" target="_blank">one in oil rich Saudi Arabia</a>&nbsp;— and supports the proposed tax credit rules. So too does Electric Hydrogen, which is developing&nbsp;<a href="https://www.forbes.com/sites/alanohnsman/2024/02/21/green-hydrogen-could-help-save-the-planet-this-startup-wants-to-make-it-cheap/?sh=2543f9f28351">large-scale green hydrogen plants</a>. Cofounded by two solar industry veterans, the Boston-based company’s business plan is to locate hydrogen operations near new wind or solar projects and, ideally, avoid plugging into the grid. It’s raised more than $600 million from investors including Bill Gates’ Breakthrough Energy Ventures, Energy Impact Partners, BP Ventures and Amazon.



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“We&#8217;re competing against 100 years of global subsidy, war, blood, fortune and gold that&#8217;s gone into making oil and gas what it is today.”Electric Hydrogen CEO Raffi Garabedian
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It wants to deliver its first commercial-scale green hydrogen plant late this year to billionaire&nbsp;<a href="https://eh2.com/electric-hydrogen-to-supply-electrolyzer-technology-green-facility/" rel="noreferrer noopener" target="_blank">Wes Edens’ New Fortress Energy</a>. New Fortress intends to sell the fuel it makes to an ammonia producer. Powered by 100 megawatts of electricity, the plant will be capable of making up to 45 tons of fuel daily.



Garabedian said another early market for green hydrogen may be for sustainable aviation fuel, or SAF, as regulations in Europe force airlines to use more low-carbon fuel. But as the company lines up customers, he understands the challenge ahead.



“We&#8217;re competing against 100 years of global subsidy, war, blood, fortune and gold that&#8217;s gone into making oil and gas what it is today. And it&#8217;s still the most highly subsidized industry in the world, other than the military,” he said. “Trying to compete with that on a cost basis, it&#8217;s insane.”

New Green Hydrogen Tank construction site.

Green Hydrogen’s Hype Hits Some Very Expensive Hurdles

Globe-trotting billionaire Mo Dewji made a fortune in East Africa selling palm oil, rope, and soda. Now he claims to have the recipe for transforming Tanzania into an agribusiness powerhouse.



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Puffing on a nicotine vape and seated on a white leather chair in his $50 million home in Dubai, Mohammed “Mo” Dewji is waxing poetic about his plans to mechanize farming 2,500 miles away. “I want to make Africa, long term, a food basket for the world,” says the 48-year-old billionaire, who was born, raised and until recently lived in Tanzania. A framed photograph of a street in Zanzibar, the Tanzanian archipelago famous for lush white beaches, hangs on a wall behind him. “Why the hell are we not investing in agri?”



Dewji is well known in Tanzania, Africa’s fifth largest country with a population of 70 million. The football team owner and former politician controls a range of businesses through his consumer goods conglomerate MeTL Group, including textile manufacturing, edible oil refineries and his Mo Cola carbonated beverages line (named after himself). MeTL already grows crops like tea, avocados, and sisal (a natural fiber used in rope), which are vertically integrated into his other businesses.



Now Dewji wants to grow his agribusiness empire – by orders of magnitude. He is seeking to invest $250 million, including $100 million of his own capital, to buy and mechanize 100,000 hectares of farmland in Tanzania. MeTL would use the crops to feed its own businesses, then sell the surpluses to other Tanzanian firms, African countries and even European customers. Dewji says this “vision” came to him in the aftermath of Russia’s invasion of Ukraine as soaring food and fertilizer prices worsened conditions of poverty and malnutrition in Africa.



Agriculture accounts for one-third of Tanzania’s annual GDP (of $75 billion), but roughly 90% of that farming is done by subsistence farmers tilling less than 5 hectares of land each. As a result, food insecurity in Tanzania is widespread: Over 30% of children are stunted, and 13 million Tanzanians live in extreme poverty, while “many others live just above the poverty line,” <a href="https://www.usaid.gov/sites/default/files/2022-05/Copy_of_tagged_Tanzania-Nutrition-Profile.pdf" target="_blank" rel="noreferrer noopener">according to </a>the U.S. Agency for International Development. That’s despite Tanzania being the second biggest receiver of foreign aid in Sub-Saharan Africa (behind only Ethiopia) between 1990 to 2010, <a href="https://www.wider.unu.edu/sites/default/files/wp2012-037.pdf" target="_blank" rel="noreferrer noopener">receiving </a>$26.85 billion. One of those aid suppliers, the World Bank, <a href="https://www.worldbank.org/en/results/2024/01/05/ida-and-afe-tanzania-a-focus-on-people-cities-and-public-institutions-for-a-better-future#:~:text=As%20of%20August%202023%2C%20the,projects%20(%241.04%20billion%20commitments)." target="_blank" rel="noreferrer noopener">acknowledges</a> that Tanzania “still faces stubbornly high levels of poverty, in part as a result of dependence on low productivity agriculture.”



Bigger, more efficient farms could help solve Tanzania’s hunger problem. In developing countries, “Larger farms tend to be more efficient than their smaller counterparts,” a recent European Commission <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7546703/" target="_blank" rel="noreferrer noopener">paper</a> found. Within Africa, increasing agricultural productivity was “a substantial driver of growth and poverty reduction” in Ethiopia, Ghana, Malawi, Rwanda and Uganda—in contrast to Tanzania and those countries where farming growth lagged, according to a UN <a href="https://ourworld.unu.edu/en/done-sensibly-agricultural-development-can-reduce-poverty-in-africa" target="_blank" rel="noreferrer noopener">study</a>. But agribusiness also comes with costs: human displacement, environmental degradation, disruption of local trading networks upending entire communities. Dewji says the benefits outweigh the cons. “Life goes on for the villagers but [in] a much better scenario,” he says.



Given Dewji’s prominence, any success—or failure—will have a big impact within Tanzania and potentially beyond. “This is larger than Tanzania: a success here could have implications for the continent as a whole,” says Margaret McMillan, an economics professor at Tufts University who studies economic development in East Africa, has lived in Tanzania and heard Dewji make his agribusiness pitch at a recent conference. “If he could use it as a flagship to show how [large-scale farming] can be done successfully, that would be amazing.”



That is Dewji’s long-term plan. He wants to prove his agribusiness model works in Tanzania, then raise money from global investors to replicate it in other African countries. His dream is to invest over $1 billion across 400,000 hectares—about the size of Rhode Island, or 0.3% of Tanzania’s total landmass—across at least three countries, including Zambia and Mozambique. “I spoke to the Zambian president, I spoke to the Mozambique president,” Dewji assured&nbsp;Forbes. “But I said, ‘Guys, let me first work it out in my home country first because I understand the intricacies. Let me show a project for Africa.’”



It’s not clear these dreams will come to fruition. Dewji has been trying to get this operation going for years. Eighteen months ago, he&nbsp;<a href="https://www.reuters.com/markets/deals/tanzanian-entrepreneur-dewji-plans-2-4-bln-grains-production-investment-via-spac-2022-07-08/" rel="noreferrer noopener" target="_blank">sought&nbsp;</a>four times as much money, $4 billion, to fund an even larger version. He floated the idea of raising money by merging with a special purpose acquisition company and touted potential 10x returns. No partners came calling. “I never raised money because I failed to get the land,” he says.



Dewji has praised Samia Suluhu Hassan, Tanzania’s president since 2021, for promoting more investment and private sector activity. Yet he has spent two years trying to buy 100,000 hectares of Tanzanian land from Hassan’s administration, and the deal isn’t done yet. The land is occupied by villagers and small-scale farmers but is technically owned by Tanzania’s government.



Documents seen by&nbsp;Forbes&nbsp;describe a key pillar of his proposal: cultivating sugar cane and building a sugar refinery on 39,000 hectares in Tanzania’s Rufiji District, a rural region named after Tanzania’s largest river. Some 95,000 people live in the area,&nbsp;<a href="https://rufijidc.go.tz/statistics" rel="noreferrer noopener" target="_blank">scattered across</a>&nbsp;200 villages and hamlets. MeTL’s acquisition would involve land transfers in 17 villages and the factory would sit on a 860-hectare plot, according to the documents.



Dewji told Forbes that, eventually, he wants to grow grains (wheat, rice, corn), edible oil crops (sunflowers, soybeans, palm), and plant proteins (pigeon peas, yellow gram) on the other 61,000 hectares of land he’d like to acquire.



There have been accusations of land-grabbing, and no wonder. Dewji wants to become Tanzania&#8217;s biggest farmer in a single stroke. “Not many people live on the targeted land,” he says, but when asked how many people live there, he declines to say. The village councils and district authorities are on-board with MeTL’s plans, Dewji adds. That hasn’t alleviated concerns about corruption.



“There&#8217;s a pretty widespread perception that the government is underhanded in these large-scale transactions, that agreements are not above board,” says Ayala Wineman, a professor of agricultural and food economics at Michigan State University who has researched Tanzania and East Africa. “And oftentimes, it&#8217;s with the collaboration of local leaders who benefit from agreeing to hand over land.”



Dewji says that any villagers and subsistence farmers displaced by MeTL will get new land to continue their farming and animal husbandry, that there will be buffer zones between his operations and their new tracts, and that MeTL will fund new roads, hospitals, schools and running water systems. The documents seen by&nbsp;Forbes&nbsp;promise all that and more, including annual dividends paid to local coffers and giveaways like new tractors.&nbsp;“MeTL has been extremely sensitive,” says Dewji, who calls it a “win-win” proposition.



He’ll need to defy recent history, then.&nbsp;<a href="https://www.pnas.org/doi/10.1073/pnas.2207398120#sec-1" rel="noreferrer noopener" target="_blank">A research paper</a>&nbsp;published last year analyzed four separate large-scale land purchases in Tanzania for the purposes of agribusiness. It found that the takeovers “exacerbate farmland inequality in nearby villages” and caused “resulting inequalities [that] are not offset by improvements in other dimensions of well-being.” These local populations are “not really benefiting from these projects in any meaningful way, be it employment, the adoption of new farming practices, improvement in food security, [or] incomes,” says Jonathan Sullivan, the study’s lead author and a professor of sustainability at the University of Arizona. “Maybe Mohammed Dewji is going to do something different, but I imagine it&#8217;s going to be pretty similar.”



And yet—Tanzania needs more food. Mechanized farming of staple goods like grains and proteins – as Dewji has proposed – could help feed hungry mouths through sheer economies of scale, improved efficiencies and surpluses. “In rural Tanzania, there is a lot of food acquired through purchase,” explains Wineman. “Subsistence farmers also engage with the market to access the food they need.”



If MeTL exports crops to other countries, as Dewji envisions, Tanzania’s budget will see some of that money. “Presumably, it could generate tax revenue for the government and foreign exchange earnings,” says McMillan, hitting on two key structural issues with Tanzania’s economy: its annual trade deficits and shrinking foreign exchange reserves. Above all, perhaps, private capital should get the chance to succeed where foreign aid has failed. One consultant for the World Bank, who spoke with&nbsp;Forbes&nbsp;on the condition of anonymity, described the bank’s loans and investments in Tanzania (which total&nbsp;<a href="https://www.worldbank.org/en/results/2024/01/05/ida-and-afe-tanzania-a-focus-on-people-cities-and-public-institutions-for-a-better-future#:~:text=As%20of%20August%202023%2C%20the,projects%20(%241.04%20billion%20commitments)." rel="noreferrer noopener" target="_blank">$8.3 billion</a>) as “moderately helpful at best.”



If anyone could pull off such an audacious venture, it’s probably Dewji, a man steeped in global ambition and daring, at times dangerous entrepreneurship. His great grandfather, born in Gujarat, India, was one of thousands of Indian Muslims who migrated to East Africa in the 1800s. His father started MeTL in the 1970s as a commodities trading firm. Dewji studied political science at Georgetown and after a brief stint on Wall Street, returned to Tanzania in 1999 to help run the family business. He grew MeTL through a series of deals in the 2000s as Tanzania privatized loss-making state-owned enterprises. He served in his country’s parliament for a decade, between 2005 to 2015—while simultaneously running MeTL. He owns a 49% stake in Simba S.C., a professional football club in Dar Es Salaam, Tanzania’s largest city. He frequently posts photos of himself at matches to his 4.4 million followers.



But what Dewji is most famous for is being kidnapped in October 2018 by a group of armed men in Tanzania’s largest city, Dar es Salaam. The assailants kept Dewji for 10 days and demanded ransom, but in a strange twist, they released him in an abandoned field without ever receiving any payment, and no assailants were ever found guilty in a Tanzanian court of any criminal charges.



Who was behind this odd sequence of events? Two well-placed individuals told&nbsp;Forbes&nbsp;it was widely rumored that Tanzania’s then-President John Magufuli had orchestrated the kidnapping in connection to a dispute with Dewji about MeTL’s massive sisal holdings (sisal is a fibrous plant used to make rope, carpet, shoes and paper). Dewji told&nbsp;Forbes&nbsp;that the kidnapping was “&#8217;politically motivated,” but did not provide further detail, other than that he never paid a ransom. “There’s parts of the puzzle I cannot speak about,” he said in a recent&nbsp;<a href="https://www.youtube.com/watch?v=NjPSQEsUudg" rel="noreferrer noopener" target="_blank">podcast interview</a>&nbsp;about the kidnapping, calling the whole event “a paradox.”



Dewji attributes his good fortune to the prayers of ordinary Tanzanians, like those who buy Mo Cola in Dar es Salaam, or those who till the land that he hopes to buy one day. “The poor of the poorest people were praying for me,” Dewji says. “I&#8217;ll tell you something: I am indebted to Tanzanians, to Africans.”

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The accountants certified that Tingo Group had $462 million in the bank. The SEC says it was just $50. Short sellers are rejoicing.



Hindenburg Research, known for sniffing out corporate scams, took aim in June at an obscure Nigeria-based outfit named Tingo Group. Hindenburg rolled out a report with a title that left little to the imagination:&nbsp;<a href="https://hindenburgresearch.com/tingo/" target="_blank" rel="noreferrer noopener">“Fake Farmers, Phones, and Financials – The Nigerian Empire That Isn’t.”</a>&nbsp;But Hindenburg didn’t just call Tingo a clear-cut scam. The short-seller also threw a spotlight on the auditor who green-lit Tingo’s financials, challenging its competence, and perhaps its willingness, to see the truth.



“The issues in Tingo’s financials are glaring enough that we’d expect they could have been spotted by any semi-conscious finance undergrad with severe vision loss,” Hindenburg wrote. “These issues were apparently not glaring enough for the company’s auditor, however.”



The auditor in question was Deloitte, the behemoth Big Four accounting firm with annual revenue of&nbsp;<a href="https://www.deloitte.com/global/en/about/press-room/global-revenue-announcement.html" target="_blank" rel="noreferrer noopener">$65 billion</a>&nbsp;through a global network that stretches from Amsterdam to Zhengzhou.



In November, after Tingo’s stock had already fallen about 80% wiping out more than $700 million in market value, the Tingo saga took a sharp turn. The Securities and Exchange Commission stepped into the fray,&nbsp;<a href="https://www.sec.gov/files/litigation/suspensions/2023/34-98920.pdf" target="_blank" rel="noreferrer noopener">slamming the brakes</a>&nbsp;on Tingo’s stock trading. In December, the SEC slapped Tingo CEO Dozy Mmobuosi with charges of&nbsp;<a href="https://www.sec.gov/litigation/litreleases/lr-25915" target="_blank" rel="noreferrer noopener">“massive fraud.”</a>&nbsp;Things only got worse this month, when the regulator&nbsp;<a href="https://www.justice.gov/usao-sdny/pr/founder-and-former-ceo-tingo-companies-charged-securities-fraud" target="_blank" rel="noreferrer noopener">tacked criminal securities fraud charges</a>&nbsp;onto the bill of consequences. According to the SEC’s civil complaint, Tingo, whose audited books boasted a $462 million treasure chest socked away in Nigerian banks, actually had only $50.



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“The issues in Tingo’s financials are glaring enough that we’d expect they could have been spotted by any semi-conscious finance undergrad with severe vision loss.”Hindenburg Research
</blockquote>



Auditors are supposed to be the financial world’s most trusted sources of information, armed with calculators and sworn to sniff out fiscal misconduct. A flip through history tells a different story: too often auditors, who are paid fees by the clients they are examining, fail to dig below the surface, and essentially rubber stamp seemingly obvious inconsistencies and problems in financial statements. Worse, some would even say they’re part of the problem, either by not being sharp enough or by looking the other way at the outrageous claims of their clients.



“As outsiders, we’d like to think that auditors are looking for fraud, but fraud detection isn’t one of their mandates,” Matthias Breuer, an accounting professor at Columbia University’s Graduate School of Business, told&nbsp;Forbes. “Auditors don’t go into their work with an adversarial mindset. Their mandate isn’t to be a whistleblower, and because of that it’s usually insiders and short-sellers that uncover these issues.”



Need a few examples? Ernst &amp; Young, after nodding approval at Wirecard’s books, could only watch as the German firm imploded over a $2.08 billion vanishing act. Remember Arthur Andersen? Once an auditing giant, it crumbled under the weight of its involvement in Enron’s notorious collapse. And let’s not forget the infamous 1MDB saga, which roped in the trifecta of Ernst &amp; Young, KPMG and Deloitte, as billions earmarked for development in Malaysia were splurged on lavish parties, opulent real estate and a cache of Monets and Van Goghs. That one cost Deloitte&nbsp;<a href="https://www.bloomberg.com/news/articles/2021-06-03/malaysia-says-received-80-million-1mdb-settlement-from-deloitte?embedded-checkout=true" target="_blank" rel="noreferrer noopener">$80 million</a>&nbsp;when it settled with the country in 2021, a hefty sum, but nothing compared to the&nbsp;<a href="https://www.justice.gov/opa/pr/deloitte-touche-agrees-pay-1495-million-settle-claims-arising-its-audits-failed-mortgage#:~:text=The%20Justice%20Department%20announced%20today,%2C%20Bean%20%26%20Whitaker%20Mortgage%20Corp" target="_blank" rel="noreferrer noopener">$150 million</a>&nbsp;it paid to the U.S. government in 2018 for its role in auditing failed mortgage lender Taylor, Bean &amp; Whitaker.



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<h2 class="wp-block-heading" id="h-routine-failures">Routine Failures</h2>



Auditing failures, despite the cost in money and reputation to the auditors, are practically routine. A 2020 study by the Association of Certified Fraud Examiners showed that auditors uncover less than 4% of frauds. That’s a dismal track record, for sure, but there are a couple of reasons why it actually makes a bit of sense.



First off, auditing is pretty much a by-the-book routine, says Columbia’s Breuer, which provides an opinion on whether companies’ financial statements are prepared in accordance with accounting standards, and whether companies maintain sound financial controls. It’s a straightforward, no-frills affair, and that’s just how the auditing world prefers it.



“What’s happened in the audit industry is that they’ve lobbied to do check-the-box exercises to limit their legal liability,” he told&nbsp;Forbes. “They’re just trying to satisfy the auditing standards, they’re not necessarily trying to attest to the real economic reality of the business.”



Secondly, despite their expertise, auditors are often outfoxed by companies willing to lie to them. Firms can concoct a tangle of fictitious documents, hide critical information, or devise schemes so elaborate they’re nearly impossible to decipher without a whistleblower’s help.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
A 2020 study by the Association of Certified Fraud Examiners showed that auditors uncover less than 4% of frauds
</blockquote>



But Deloitte’s Tingo case isn’t one you can just brush off with the usual excuses. It stands out because Hindenburg, along with a crew of independent internet detectives, managed to cut through the smoke and mirrors without any insider help.



Hindenburg’s exposé on Tingo, echoed by the SEC allegations, hints at a more unsettling issue. Auditors get their paychecks from the companies they’re supposed to keep honest. (Tingo paid&nbsp;<a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/854800/000121390023025186/f10k2022_tingogroupinc.htm" target="_blank" rel="noreferrer noopener">$1.6 million</a>&nbsp;in audit fees in 2022.) This setup can lead to auditors playing it safe, avoiding the hard-hitting questions that could upset a paying customer.



How did Deloitte, the auditing heavyweight watching over Tingo’s books, miss a scam that Hindenburg, an outsider, called out as painfully obvious?



Maybe the answer lies in who was holding Deloitte’s magnifying glass. Tingo, balancing its act between Nigeria and the Nasdaq in New York, wasn’t checked by Deloitte’s team in Nigeria. Instead, it was Deloitte’s Israeli branch, Brightman Almagor Zohar &amp; Co., that certified the books. That’s a head-scratcher, especially since, as Hindenburg highlighted, Tingo didn’t really do much business in Israel. Why not use auditors who operate where the action is? It almost seems like a move to keep the auditors just far enough away so they wouldn’t stumble upon anything they shouldn’t.



In response to questions from&nbsp;Forbes, a spokesperson for Deloitte Israel declined to comment, saying “professional standards prohibit our commenting on client matters.” Tingo didn’t respond to a request for comment.



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<h2 class="wp-block-heading" id="h-astonishing-gap">Astonishing Gap</h2>



The discrepancy between what Deloitte certified — $461.7 million — and Tingo’s actual cash balance of $50 was “astonishing,” Ed Ketz, an accounting professor at Penn State’s Smeal College of Business, told&nbsp;Forbes&nbsp;in an email. “The cash account is the most important balance sheet account and one of the easiest to audit,” he said. “One wonders how Deloitte Israel could have missed that.”



Verifying a company’s cash is a foundational part of the auditing process and one of the boxes auditors are supposed to check, said Stephani Mason, an accounting professor at the Driehaus College of Business at DePaul University.



“In the process of an audit there are some pretty basic things that should be done,” Mason told&nbsp;Forbes. “One of those is confirming cash balances by sending a form that goes directly to the client’s bank. The standard essentially says that the auditor has to verify the bank account independently.”



You’d think the obvious move would be to tighten standards on checking companies’ bank balance claims. But just cranking up the standards might not stop the deceit. In fact, academics argue that squeezing the fraud balloon doesn’t deflate it, it just pushes the hot air somewhere else.



A 2021 paper from folks at the University of Minnesota and Indiana University, titled&nbsp;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3762260" target="_blank" rel="noreferrer noopener">“Everlasting Fraud,”</a>&nbsp;lays it out. Fraud, they say, shifts shapes, constantly morphing as crafty companies stay one step ahead of regulators in a relentless game of cat and mouse. While regulators are busy learning from old scams like Enron’s off-the-books creativity, companies like Wirecard, and allegedly Tingo, are out there boldly cooking up fake bank balances. It’s a gutsy move, a bet that it’s so obvious that auditors might figure no company would even try it, and not even check.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading" id="h-not-their-job">Not Their Job</h2>



“If the auditors were really after fraud, I think they could find it,” Columbia’s Breuer told Forbes. “But that’s not the nature of their business. It’s not great for an auditor’s career to claim fraud with a client. They’re very cautious to not be too alarmist too often. That’s why they may look the other way or never get started on these things.”



An added impediment to accountability is the way auditing firms are set up, with offices in different countries acting more like independent franchises than branches of a central tree. That means Deloitte’s main office may never have to pay for this ridiculous oversight. Each office is its own island, so the fallout tends to stay local.



Where you might spot some consequences for auditors, however, is in the stock market. In the short term, Deloitte’s other client companies could feel a bit of a chill. There’s precedent for this. Consider what happened with PricewaterhouseCoopers’ clients after the “OscarGate” fiasco.



Rewind to 2017. PwC had the seemingly simple job of tallying votes for the Academy Awards. In the world of auditing tasks, this was so easy it was a bit dull, but with a hefty upside of a mountain of free publicity. Still, PwC screwed the pooch. Its accountants handed over the wrong envelope for the best picture award (La La Land&nbsp;instead of&nbsp;Moonlight) and what should have been a seamlessly glamorous affair turned into a comedy of errors, swapping the auditor’s PR triumph for a dose of public embarrassment.



Researchers&nbsp;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3216232" target="_blank" rel="noreferrer noopener">Lawrence Abbott and William Buslepp</a>&nbsp;decided to investigate how PwC’s blunder — witnessed by millions of TV viewers around the world — might ripple out to its clients. They dug into the data and, lo and behold, it was PwC’s roster of clients who ended up feeling the pinch.



“We find that abnormal returns in the days following the error are significantly lower for PwC clients,” the researchers wrote, “suggesting an impaired reputation for audit quality.”



Basically, for a brief spell — the study pegs it at a month — the market was giving PwC’s clients the side-eye. Investors discounted the companies’ financial statements, all because they started wondering if they could really trust what was in them.



“In my expectation, this isn’t likely to affect the Deloitte U.S. firm,” DePaul’s Mason told Forbes. “The SEC can fine Deloitte Israel, disgorge profits, or even give them the death knell, so to speak, by barring them from auditing companies in this jurisdiction. But what I’m interested in is what other companies have they done work for? If I was an investor long on a client Deloitte Israel audited, I’d be very concerned.”

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How Auditor Deloitte Missed A Nigerian Company’s Massive Fraud

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The Himalayan Kingdom quietly spent millions building its own bitcoin mining operation. Now, using satellite imagery, Forbes has uncovered the secret locations of the world’s largest state-owned mines.



Dozens of shipping containers lie hidden behind a hillside south of Thimphu, the Himalayan capital of Bhutan, one of the world’s most isolated nations. Inside, millions of dollars of bitcoin mining machines work unceasingly to amass the valuable currency that now fascinates the country’s monarch — and his kingdom. Under the reign of Jigme Khesar Namgyel Wangchuck, the “Dragon King,” Bhutan has been quietly transformed into a crypto Shangri-La with its government dedicating land, funding and energy to operations like these, which it hopes will avert a looming economic crisis.



But Bhutanese officials have never disclosed the location or scope of these facilities. And when it became the first country to have founded a sovereign bitcoin mine approximately four years ago, few outside of Bhutan knew. Its government only began commenting on its digital asset investments after&nbsp;<a href="https://www.forbes.com/sites/iainmartin/2023/04/15/the-tiny-kingdom-of-bhutan-secretly-held-millions-of-dollars-in-cryptocurrency/">Forbes&nbsp;first reported details</a>&nbsp;of its multi-million-dollar portfolio earlier this year, which were exposed by the bankruptcies of fallen crypto lenders BlockFi and Celsius, with whom it had banked significant holdings.



Now, Forbes has identified the sites of what appear to be four mines run by the Thunder Dragon kingdom, based on sources with knowledge of Bhutan’s crypto investments and confirmed through satellite imagery from Planet Labs, Satellite Vu and Google Earth. They show long rectangular mining units, data center cooling systems and high capacity power lines and transformers that run from Bhutan’s hydroelectric plants to the sites. They have never been publicly disclosed.



One facility — the pilot location for Bhutan’s bitcoin mining efforts, a source said — was built near Dochula Pass, an area that holds cultural and political significance for its 108 memorial shrines dedicated to fallen Bhutanese soldiers. Planet Labs and Google Earth satellite imagery indicate that earthmoving began on the site in 2020 with construction appearing to have finished in late 2022. Aerial views show a cluster of green and white-roofed mining units enclosed by miles of forest. Though just steps from a busy highway, Google Street View suggests it is completely hidden from unknowing passersby. A second source told&nbsp;Forbes&nbsp;that the ground has been leveled along this stretch of road to provide additional cover for the site.



A second mine is located near Trongsa, a town east of Thimphu and ancestral seat of the current Wangchuck dynasty. A third is situated in the heavily forested district of Dagana, near a middle school that caters to children in the rural community.



What appears to be the kingdom’s fourth and largest mine sits on the bones of a contentious — and failed — $1 billion government megaproject called “<a href="https://www.nationalcouncil.bt/assets/uploads/docs/acts/2014/Bhutan_Education_City_Act_2012_eng9th.pdf" target="_blank" rel="noreferrer noopener">Education City</a>,” an effort to establish an international center “for education and knowledge” in Bhutan. The mine runs alongside the country’s first paved road, Phuentsholing-Thimphu national highway, but is concealed behind mountainous terrain. Only transformers and power lines betray the fact that a bitcoin mine now occupies the site. Historical satellite imagery shows that its construction began around December 2021, coinciding with the import of $193 million in “processing units,” according to customs data from the Ministry of Finance. The imports were appended with the same tariff code used by bitcoin mining hardware companies.



Bhutan had pitched the&nbsp;<a href="https://www.nationalcouncil.bt/assets/uploads/docs/acts/2014/Bhutan_Education_City_Act_2012_eng9th.pdf" target="_blank" rel="noreferrer noopener">Education City</a>&nbsp;project to its citizens as a means to secure their future amid rising youth unemployment,&nbsp;<a href="https://kuenselonline.com/migration-of-bhutanese/" target="_blank" rel="noreferrer noopener">surging emigration numbers</a>&nbsp;and brain drain. Roughly 1.5% of Bhutan’s population&nbsp;<a href="https://www.reuters.com/world/asia-pacific/bhutans-jobs-woes-drive-an-exodus-australia-2023-07-28/" target="_blank" rel="noreferrer noopener">emigrated last year</a>&nbsp;to Australia alone, many seeking job opportunities and better pay. In Bhutan, the minimum wage is set at just $45 per month and approximately 12% of its population lives below the poverty line, according to local newspaper&nbsp;<a href="https://kuenselonline.com/labour-ministry-reviewing-the-national-minimum-daily-wage/" target="_blank" rel="noreferrer noopener">Kuensel</a>.



Education City was supposed to change that. In 2009, Bhutan’s government paid consulting firm McKinsey &amp; Co. some $9 million to help design a $1 billion &#8220;world-class regional hub for health, education, finance, ICT services.&#8221; Nestled between the confluence of two rivers, the 1,000-acre campus would be a beacon of the country’s experimental Gross National Happiness economic model, and a higher ed hub for Asia. It was to host satellites of some of the most prestigious universities in the world, as well as R&amp;D facilities, laboratories, hotels and event centers. And according to the Bhutanese government, it would promote &#8220;Brand Bhutan,&#8221; creating a &#8220;green and sustainable economy,&#8221; &#8220;culturally and spiritually sensitive industries&#8221; and a &#8220;knowledgeable society.&#8221;



It did none of those things. Plagued by political scandals, mismanagement and innumerable delays, Education City was scrapped in 2014. But left behind were roads, bridges, a water supply and, crucially, power lines — building blocks for a bitcoin mine.


<div class="wp-block-image">
<figure class="aligncenter is-resized"><img decoding="async" src="https://imageio.forbes.com/specials-images/imageserve/655cdfb1f26e45135e0fe07a/Infrastructure-consistent-with-that-of-a-bitcoin-mine-in-the-rural-region-of-Dagana-/0x0.jpg?format=jpg&amp;width=1440" alt="Infrastructure consistent with that of a bitcoin mine in the rural region of Dagana. " style="width:750px;height:auto"/><figcaption class="wp-element-caption">Infrastructure consistent with that of a bitcoin mine in the rural region of Dagana.&nbsp;IMAGE © PLANET LABS PBC</figcaption></figure></div>


The kingdom’s sovereign investing arm, Druk Holdings &amp; Investment (DHI), confirmed the mines’ existence. “Sites for bitcoin-mining related facilities in Bhutan have been selected based on the logistical needs of the operations such as power supply and a variety of other factors,” it told&nbsp;Forbes&nbsp;through an outside communications firm. It declined to comment on their locations, however, stating that “DHI does not disclose commercially sensitive details of its operations.”



Bitcoin was a Hail Mary addition to Bhutan’s economic masterplan. The kingdom’s finances have long been underpinned by tourism revenues and the export of a massive surplus of hydropower to its neighbor India. But the Covid pandemic tanked the&nbsp;<a href="https://jp.reuters.com/article/bhutan-tourism-environment-climate-idAFL8N3A93GD#:~:text=In%202019%2C%20before%20the%20pandemic,earn%20the%20country%20foreign%20exchange." target="_blank" rel="noreferrer noopener">$88.6 million</a>&nbsp;annual revenue the country collected from $65-a day visa fees, requiring an urgent course correction. According to multiple sources, Bhutanese government officials began holding talks with bitcoin miners and suppliers sometime in 2020.



DHI, which oversees Bhutan’s bitcoin operations, told local newspaper&nbsp;<a href="https://thebhutanese.bt/dhi-confirms-that-it-is-mining-digital-assets/" target="_blank" rel="noreferrer noopener">The Bhutanese</a>&nbsp;that it “entered the mining space” when the cryptocurrency’s price was $5,000 (it was last valued at this level in April 2019 but is now worth $36,000). Bhutan’s own import data and satellite imagery suggest that its operations truly ramped up in 2020. In May, when&nbsp;Forbes&nbsp;asked DHI to confirm that timing, a spokesperson for the fund would say only that a series of bitcoin investments were made “in a period in 2019.” They added that DHI was “currently net positive in our digital asset position.”&nbsp;<a href="https://www.cnbc.com/2022/12/23/bitcoin-price-calls-in-2022-how-the-market-got-it-wrong.html" target="_blank" rel="noreferrer noopener">Bitcoin’s price collapsed</a>&nbsp;from $69,000 in November 2021 to under $17,000 last December.



<a href="https://thebhutanese.bt/bitcoin-powers-a-50-hike-for-public-servants/" target="_blank" rel="noreferrer noopener">The Bhutanese</a>&nbsp;reported in June that DHI was planning to sell down its bitcoin stockpile to fund a 50% salary hike for government officials worth $72 million, as Bhutan faces an economic and political crisis with a trade deficit running down its&nbsp;<a href="https://thebhutanese.bt/bitcoin-powers-a-50-hike-for-public-servants/" target="_blank" rel="noreferrer noopener">hard currency reserve</a>&nbsp;to just $689 million. (This will cover just 14 months of imports while the country’s constitution requires 12 months of reserves.)



Several sources inside Bhutan told&nbsp;Forbes&nbsp;that the mines are now an open secret, though neither the Bhutanese government nor DHI have formally disclosed their existence. In emails to&nbsp;Forbes, DHI has consistently declined to comment on the scope or financing of its cryptocurrency regime.



DHI, which also operates the nation’s flagship airline, hydroelectric power plants and a cheese factory, does not provide any breakdown of revenues or investment in bitcoin mining in its annual accounts beyond noting it had raised foreign currency bonds to fund the project. Bhutan’s Ministry of Finance has been equally quiet. Outside academics and insiders who specialize in monitoring global bitcoin activity told&nbsp;Forbes&nbsp;that the country’s mining activities remain a conundrum. DHI claimed that it was “not involved in decisions as to the use of funds that DHI pays out to the Government.”



But the kingdom left a breadcrumb trail. Trade data accessed through the Observatory of Economic Complexity, an open source platform that visualizes global trade patterns, indicates that more than $220 million in chips used for bitcoin mining were shipped from China to Bhutan between 2021 and 2022. DHI declined to answer questions about them, citing “NDAs with contractual parties.” And Bhutan’s Ministry of Energy data reveals a massive 63% spike in power usage by industry in 2022.


<div class="wp-block-image">
<figure class="aligncenter is-resized"><img decoding="async" src="https://imageio.forbes.com/specials-images/imageserve/655cdf7af7758dcd00342f24/Green-roofed-units-in-Trongsa--the-ancestral-seat-of-the-Wangchuck-dynasty-/0x0.jpg?format=jpg&amp;width=1440" alt="Green-roofed units in Trongsa, the ancestral seat of the Wangchuck dynasty." style="width:728px;height:auto"/><figcaption class="wp-element-caption">Green-roofed units in Trongsa, the ancestral seat of the Wangchuck dynasty.IMAGE © PLANET LABS PBC</figcaption></figure></div>


Meanwhile, Bhutan, which has for years sold off surplus energy to India, has massively ramped up imports, purchasing $20.7 million worth of electricity in 2023, according to&nbsp;<a href="https://kuenselonline.com/growing-domestic-demand-cuts-electricity-export-revenue-by-27-percent/" target="_blank" rel="noreferrer noopener">Kuensel</a>. Government officials&nbsp;<a href="https://kuenselonline.com/growing-domestic-demand-cuts-electricity-export-revenue-by-27-percent/" target="_blank" rel="noreferrer noopener">recently</a>&nbsp;warned that this bill would balloon to $72 million over the coming winter with imports needed for five months to cover demand.



The Asian monsoon season means that Bhutan has always experienced droughts when its hydropower plants stand largely idle for three months, requiring it to import electricity from India’s largely coal-powered grid. Bhutan’s investment in bitcoin mining has, however, hinged on reliable access to cheap and clean energy.



“Bhutan prioritises power supply for domestic consumption. Industry and business — including projects related to bitcoin mining — are accorded lower priority,” DHI’s spokesperson said. In the winter months when hydropower generation typically decreases, “mining activity may be shut down subject to electricity availability.”



However, the four state-owned mines&nbsp;Forbes&nbsp;believes it has identified might not even be Bhutan’s largest. In 2022, the country entered a partnership with Singaporean bitcoin mining giant, Bitdeer, which made Bhutan the seat of its Asian expansion. In March,&nbsp;<a href="https://www.planet.com/stories/gedu-XyMPiYu4g" target="_blank" rel="noreferrer noopener">Bitdeer broke ground</a>&nbsp;on a mine in the southern town of Gedu, according to satellite imagery from Planet Labs, bringing 100 megawatts (MW) online in August, the company said. DHI, which owns Bhutan’s national power company, will be supplying electricity to the site. Bitdeer disclosed in a July update that it was already running 11,000 miners and had ordered an additional 15,000 machines. When completed, the 600 MW facility will consume more energy than the rest of the nation,&nbsp;<a href="https://asia.nikkei.com/Economy/Bhutan-puts-Bitcoin-mining-plan-in-motion-to-power-up-economy" target="_blank" rel="noreferrer noopener">Nikkei</a>&nbsp;reported.



Recently, Bitdeer staff have been approaching investors at industry conferences such as Mining Disrupt for a $500 million “<a href="https://www.bloomberg.com/news/articles/2023-05-03/bhutan-plans-500-million-fund-for-bitcoin-btc-and-crypto-mining-in-himalayas" target="_blank" rel="noreferrer noopener">green crypto mining</a>” fund. DHI&nbsp;<a href="https://asia.nikkei.com/Economy/Bhutan-puts-Bitcoin-mining-plan-in-motion-to-power-up-economy" target="_blank" rel="noreferrer noopener">estimates</a>&nbsp;it will support 300 to 400 jobs and a new computing sector in Bhutan — echoing the country’s moonshot pitch for the defunct Education City. Bitdeer CEO Matt Linghui Kong told Forbes in a statement that the company is “getting a lot of interest” in the fund and is currently in negotiations with multiple investors who it declined to name.



The new fund and jobs could be desperately needed, with the Asian Development Bank forecasting that Bhutan’s economy would slow to 4.6% this&nbsp;<a href="https://kuenselonline.com/bhutans-economy-to-slow-down-to-4-6-percent-this-year-adb/" target="_blank" rel="noreferrer noopener">year</a>. The government’s own economists called for economic reforms and budget cuts to stave off a&nbsp;<a href="https://kuenselonline.com/bhutans-economy-to-slow-down-to-4-6-percent-this-year-adb/" target="_blank" rel="noreferrer noopener">financial crisis</a>.



For now, Bhutan’s appetite for blockchain-based solutions seems undimmed by these challenges. Earlier this month, on the king and queen’s 12th wedding anniversary, it unveiled an experimental&nbsp;<a href="https://kuenselonline.com/bhutan-national-digital-identity-application-launched-in-thimphu/" target="_blank" rel="noreferrer noopener">decentralized digital identity app</a>. Its first test subject and digital citizen? The crown prince.



With additional reporting and satellite imagery analysis by&nbsp;<a href="https://www.stimson.org/ppl/eyler/" target="_blank" rel="noreferrer noopener">Brian Eyler</a>, a senior fellow at the Stimson Center and director of its Southeast Asia Program and its Energy, Water, and Sustainability Program.

Bhutan

Bhutan Built A Bitcoin Mine On The Site Of Its Failed ‘Education City’

Psychology therapy session

Forget ‘Crushing It,’ Startup Founders Open Up About Mental Health Problems

As they grapple with keeping their businesses afloat, Palestinian founders are grieving the loss of life and community in Gaza, with many currently unable to reach friends, family and colleagues.



alestinian founder Ram Mere was pitching his startup, Olivery, to a Startups Without Borders program backed by Meta to support and train local entrepreneurs. One of 10 finalists, Mere took home second place and a $15,000 check. Olivery now provides logistics solutions to 100 clients in seven countries and mostly hires Palestinians, he told&nbsp;Forbes&nbsp;on Saturday from Ramallah, in the West Bank.



But amid the chaos of war, Mere has no idea whether all of his Gazan employees are safe. He recalled one person who continued to work for two days after the fighting began. “Now nothing,” he said. “They have no internet, and I am not sure if he is alive or not.”



Like other Palestinian startups, Olivery has served as a bright spot for a growing local tech scene, with pockets of young companies, incubators and accelerators across Gaza and the West Bank. While small, that tech ecosystem has been viewed as an important part of Palestinians’ economic future, Palestinian founders and investors said. But in the face of renewed tragedy and war, it’s one that also seems increasingly fragile.



After Hamas terrorists attacked Israel and killed 1,300 Israelis last week,&nbsp;<a href="https://www.nytimes.com/article/israel-hostages-hamas-explained.html#:~:text=Hamas%20Took%20Scores%20of%20Hostages,citizens%20are%20among%20the%20captives" target="_blank" rel="noreferrer noopener">kidnapping</a>&nbsp;nearly 200 others, the Israeli government responded with aerial strikes that killed at least 3,000 Palestinians,&nbsp;<a href="https://www.wsj.com/livecoverage/israel-hamas-war-gaza-palestinians/card/latest-death-tolls-in-gaza-and-israel-xJRhBt04VQMocRuYUtsA" target="_blank" rel="noreferrer noopener">per local officials</a>, and an evacuation order for 1.1 million Gazan civilians to relocate ahead of an expected ground invasion. Israel has cut off access to water, food and electricity for civilians and the evacuation&nbsp;<a href="https://www.un.org/unispal/document/israel-must-rescind-evacuation-order-for-northern-gaza-and-comply-with-international-law/" target="_blank" rel="noreferrer noopener">has been called</a>&nbsp;a “crime against humanity” by the U.N. “It’s impossible to deliver help or anything to support my employees in Gaza,” Palestinian founder Mo Jebrini, told&nbsp;Forbes&nbsp;on Friday from Ramallah; 30% of his Palestinian team is based in the enclave.



Now, what was once a tenuous path to economic advancement in one of the poorest places in the world could vanish entirely.



“Tech was actually the last resort they could escape to from the prison,” said Mere, referring to Gaza&#8217;s&nbsp;<a href="https://www.reuters.com/world/middle-east/israel-occupation-makes-palestinian-territories-open-air-prison-un-expert-2023-07-11/" target="_blank" rel="noreferrer noopener">description</a>&nbsp;by some human rights groups as an open-air prison. “Now, even that is gone.”



In Israel, founders and tech employees are mourning killed relatives and&nbsp;<a href="https://www.forbes.com/sites/alexkonrad/2023/10/13/israel-founders-struggle-to-balance-startups-and-front-line-military-service/">grappling</a>&nbsp;with their colleagues getting called up to Israel’s military reserves. More than 500 venture capital firms&nbsp;<a href="https://www.forbes.com/sites/alexkonrad/2023/10/12/vc-firms-sign-statement-israel/?sh=2d8192997a7a">signed</a>&nbsp;a public statement in support of Israel and its tech community last week.



The country’s technology sector, which represents 18% of GDP, raised nearly $10 billion in funding in 2021, and $1.4 billion in the last quarter alone, according to data from startup funding tracker Crunchbase. By comparison, the Palestinian startup community has received a tiny amount of funding: $9.5 million for all of 2021, at a combined valuation of $66 million, according to&nbsp;<a href="https://fastcompanyme.com/impact/palestinian-startups-are-growing-fast-but-they-face-huge-challenges/" target="_blank" rel="noreferrer noopener">Fast Company Middle East</a>.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“I’m trying to stay focused on the tech sector and build it in a way that keeps everyone safe and free.”Ibraham Housheya, founder of Endeavor Technology
</blockquote>



But despite its small size, the Palestinian startup landscape represents a unique chance at economic development and sustainability. (Forbes&nbsp;<a href="https://www.forbes.com/sites/kristinstoller/2022/06/02/heres-how-young-palestinian-and-israeli-entrepreneurs-are-forging-co-existence-through-startups/?sh=7a3bc4d243b2">attended</a>&nbsp;a joint Israeli and Palestinian startup pitch competition just last year.) And it’s been growing: The West Bank’s and Gaza’s $493 million information technology sector&nbsp;<a href="https://www.anera.org/wp-content/uploads/2022/06/OTG-Tech-Ecosystem-Palestine-spreads.pdf" target="_blank" rel="noreferrer noopener">doubled between 2008 and 2018</a>, with an estimated 2,500 graduating with tech degrees from Palestinian universities annually (though just 10% find jobs in the sector immediately out of school). In Gaza, where the&nbsp;<a href="https://www.worldbank.org/en/country/westbankandgaza/overview" target="_blank" rel="noreferrer noopener">unemployment rate</a>&nbsp;hovers at nearly 50%, the most common tech jobs for trained residents are in online IT freelancing, with outsourcing amounting to&nbsp;<a href="https://www.anera.org/wp-content/uploads/2022/06/OTG-Tech-Ecosystem-Palestine-spreads.pdf" target="_blank" rel="noreferrer noopener">approximately 80%</a>&nbsp;of the Palestinian tech sector.



It’s unclear how the war will affect this momentum; some of the community’s infrastructure is already gone.



“The lack of basic necessities has made it nearly impossible for anyone to continue their work, and believe me, work is not a priority for them at the moment with everything they are facing,” Leen Abubaker, programs manager at Flow Accelerator and cofounder of social impact startup Sawaed19. Many of the buildings that Gaza’s IT freelancers used to conduct work for international companies, including offices and coworking spaces, have been destroyed, she said.



That appears to include the headquarters of Gaza Sky Geeks, a tech hub founded in 2011 with support from Google parent Alphabet and non-profit organization Mercy Corp.&nbsp;<a href="https://techcrunch.com/2023/10/14/palestine-tech-industry-hamas-israel-war/" target="_blank" rel="noreferrer noopener">According to&nbsp;TechCrunch</a>,&nbsp;at least 5,000 coders and developers in the West Bank and Gaza have graduated from the group’s tech programs, which include a coding academy and startup accelerator. Named for the satellite internet access that provided many Gazans with an “open gate to the world,” said Dalia Shurrab, a former communication and social media coordinator for the group, Gaza Sky Geeks was a valuable source of training for residents unable to leave to pursue their education.



On Wednesday, Shurrab&nbsp;<a href="https://www.linkedin.com/feed/update/urn:li:activity:7117624115745693696/" target="_blank" rel="noreferrer noopener">shared footage on LinkedIn</a>&nbsp;of the Mercy Corps building where Gaza Sky Geeks had rented an office floor. Most of its windows appear blown out and ash covers the street. Mercy Corps regional director for the Middle East, Arnaud Quemin, said its team members are taking shelter and Gaza Sky Geeks is “not currently able to safely operate in Gaza.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



In the West Bank, which is home to most of the Palestinian startup scene and its only venture capital firm, Ibtikar Fund (which has backed startups like Olivery), tech companies are looking to maintain as normal operations as possible.



Endeavor Technology founder Ibraham Housheya, who employs more than 20 people in an office in Nablus, said his company has completed digital transformation projects for the likes of Walmart and Kroger. His Palestinian staff’s technical talent is no different from that of their colleagues in the company’s U.S. or Turkey offices, added Housheya — but they work using 3G wireless connections, not 4G or 5G. Colleagues are still able to connect on a daily basis via Gmail and Google Meet, said Housheya, who grew up in the West Bank and spoke to&nbsp;Forbes&nbsp;from Turkey on Saturday.



“The most important thing right now is to help to keep the business running,” Housheya said. “There is a difference between Hamas and Palestinians,&#8221; with Hamas &#8220;only a part of a diverse Palestinian nation,&#8221; he added. &#8220;I’m trying to stay focused on the tech sector and build it in a way that keeps everyone safe and free.”



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It’s a continuous struggle when you don&#8217;t know what’s going to happen tomorrow.”Mohammad Alnobani, cofounder and CEO of The Middle Frame
</blockquote>



One entrepreneur who asked to remain anonymous for safety reasons said that they were leading an ongoing effort to supply meals to Gazan workers&nbsp;<a href="https://news.yahoo.com/gazan-workers-israel-stranded-occupied-212240164.html" target="_blank" rel="noreferrer noopener">stranded</a>&nbsp;in Ramallah and other towns following Saturday’s Hamas attacks. Access to Israel and Gaza is blockaded, they said; locals can feel their windows shake from aerial bombardments at night. “We’re trying to be as hospitable as possible,” they said, adding that their focus is on providing food, clothing and blankets. “Many of the people stuck here have double the pain because they’re away from loved ones and unable to reach them.”



Ramallah-based Sondos Mleitat, the cofounder and CEO of online mental health platform Hakini, is trying to set up a&nbsp;<a href="https://donorbox.org/psychological-first-aid-for-our-people-in-gaza" target="_blank" rel="noreferrer noopener">free mental health phone hotline</a>&nbsp;for Gazans, wherein psychologists and specialists from the Palestinian territories and around the world could provide immediate trauma intervention. She told&nbsp;Forbes&nbsp;the war has underscored Hakini’s mission of social responsibility, even though running a business at this time has been challenging. “I know there are delays, and we are behind schedule, but this is nothing,” she said. “It’s worthless for me when I think about the people whose lives are at risk.”



Palestinian founders described the unique challenges they faced in building companies even before war broke out: reduced access to early stage capital, crossing through military checkpoints in order to travel. In Gaza for example, Palestinian internet service providers have only been able to offer&nbsp;<a href="https://www.cnn.com/2023/10/13/middleeast/gaza-internet-outage-map-visuals-dg/index.html" target="_blank" rel="noreferrer noopener">2G networks</a>, and the blockade has placed restrictions on&nbsp;<a href="https://www.anera.org/wp-content/uploads/2022/06/OTG-Tech-Ecosystem-Palestine-spreads.pdf" target="_blank" rel="noreferrer noopener">hardware imports</a>. Raising money internationally has also been difficult due to instability. Next to Israel’s tech ecosystem, “it is not comparable at all in terms of resources,” said Mleitat.



Now, these obstacles may be compounded.



“It’s a continuous struggle when you don&#8217;t know what’s going to happen tomorrow,” said Mohammad Alnobani, cofounder and CEO of The Middle Frame, a stock image platform that aims to dismantle stereotypes about the Arab world. He was returning home from a conference when war broke out. “I was literally at the border on the bus waiting to go in, and everything started blowing up and they sent us back to Jordan.”



But Mleitat said that her community is used to building companies with so few resources and against so many odds. “One of the advantages we have as Palestinians is that we’re resilient because of what we have been going through,” she told&nbsp;Forbes. That resilience, multiple founders said, is core to entrepreneurs’ success.



“The Gazan people are very talented,” said Gaza Sky Geeks’ Dalia Shurrab. She believes the organization — and the community it supports — will endure. “We are going to rebuild it again, and we are going to rebuild Gaza again.”



This story has been updated with the most recent death toll numbers in Gaza as of publication and details about Olivery’s pitch to Boost Without Borders.

Israel continues bombing Gaza

The Palestinian Startup Ecosystem Has Represented Economic Hope. War Is Decimating It

In its latest product launch, the unicorn AI startup is bringing bots that make it sound like you’re talking to well known people like Taylor Swift into your group chat



Inside Character.AI’s disheveled Palo Alto, California headquarters, employees at first appear to be hard at work, glued to their computer monitors. But rather than coding, many of them are engrossed in lively group chats with their colleagues and the AI chatbot characters that Character has become known for. Now, thanks to a new group chat function the startup launched Wednesday, they were chatting with work friends along with bots that anyone can build to create the illusion that you’re actually talking to the likes of Napoleon Bonaparte, Tony Stark or Lucifer.



“The feature was good enough that people stopped working sometimes to use it,” cofounder Daniel De Freitas told&nbsp;Forbes. De Freitas, the company’s president, has been particularly partial to gathering team members together to play Ship AI, a chatbot programmed to act like a text-based adventure game that lets group chat participants pretend to be astronauts exploring outer space.



The group chat feature is Character.AI’s latest move in cofounder and CEO Noam Shazeer’s bet that people will want to interact with a variety of different chatbot personas, rather than having a single, all-encompassing AI companion. By allowing the company’s subscribers, who pay $9.99 per month, to interact with each other and some of the startup’s 18 million AI bots in chats at the same time, Character is hoping to establish dominance as the go-to app for AI-powered entertainment while adding to its immediate revenue stream. Shazeer said that after “some period of time,” the company plans to make the feature free “because our goal is to empower everyone with AGI,” or artificial general intelligence.



Backed by nearly $200 million from VCs including Andreessen Horowitz, and valued at $1 billion in a March funding round, Character.AI has wowed the startup community with its engagement time — it claims registered users who send at least one message on a given day spend an average of two hours on the platform. Since its initial launch in September 2022, 20 million users have signed up for Character.AI, though traffic to its website has been declining since its May 2023 peak, per analytics provider SimilarWeb. Also in May, the startup began monetizing through its subscription service, which gives customers priority access to its platform (servers have often been overloaded, and non-paying users have to wait longer to get on) and early access to new features. Character.AI declined to share any statistics on its subscribers or its recent growth traction.



The group chat feature, which&nbsp;Forbes&nbsp;tested out, is still rudimentary. In the initial iteration of Character.AI’s group chat, human users are able to chat with one another as on any messaging platform. To invoke a bot’s response, however, a user must manually tap on the icon for the specific bot they want to speak, or a dice icon which selects one of the bots in the group chat to respond at random. The bots can respond to users’ questions, as well as to one other (though in the latter case, the human must still prompt the bot to respond).



In a group chat with three&nbsp;Forbes&nbsp;reporters and Character.AI’s most popular AI personas for singer Taylor Swift and NFL player Travis Kelce, a human user asked, “Tell us your deepest insecurities about dating Taylor” and tapped on the icon for Kelce’s bot.



“My biggest insecurity about dating @Taylor-Swift is that other guys will be jealous of me because they want to date her too. But I’m not afraid of the competition, she’s a great girl and I’m going to show her a great time. I won’t let her down,” the bot wrote.



After the Taylor Swift bot was prompted, it responded: “Haha, I love the confidence, Travis! Let’s meet up after the season, and I’ll let you show me a great time ;)”



There are other, more practical issues: the feature is only available on Character.AI’s mobile app, and the chatbots appeared to only respond to the most recent message from a human user.



The cofounders say product updates with better functionality are coming soon. The underlying AI is also about to improve dramatically, Shazeer told&nbsp;Forbes, because the company is beginning to receive fulfillment on an order of “many thousands” of Nvidia’s new line of H100 GPUs after a months-long delay due to supply chain shortages. The company plans to put the chips to use to train new large language models, he said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“AI is underhyped because the things that are going to be possible in the coming years are going to be really, really impressive compared to what’s possible now.”Naom Shazeer
</blockquote>



Part of the urgency to launch the product now, before a new model is ready, may have to do with several generative AI tools launched by Meta in late September. In an&nbsp;<a href="https://www.forbes.com/sites/kerryadolan/2023/09/26/mark-gets-meta-zuckerberg-talks-ai-and-that-musk-mma-fight-thats-never-going-to-happen/">exclusive interview</a>&nbsp;with&nbsp;Forbes&nbsp;last month, Mark Zuckerberg outlined a vision of bringing AI “characters” to his company’s various products. “You’ll be able to talk to them in WhatsApp and Messenger and Instagram, and they&#8217;ll be embodied as avatars in virtual reality,” he said. These include an AI assistant called “Meta AI” and 28 other characters that users can talk to in group chats. “That looks familiar,” Character.AI’s Twitter account&nbsp;<a href="https://twitter.com/character_ai/status/1707130316920635432/" target="_blank" rel="noreferrer noopener">quipped</a>&nbsp;after Meta’s announcement.



Shazeer said the group chat feature had been in the works for several months before Meta’s announcement, and he views Zuckerberg’s move into the space as something of a compliment. “It is great to see other companies getting inspired and building similar products — it’s a real testament to what we’re doing and to the engagement that we’re getting,” Shazeer said.



De Freitas and Shazeer, a coauthor on the seminal research paper on “transformers” that catalyzed the&nbsp;<a href="https://www.forbes.com/sites/alexkonrad/2023/02/02/inside-chatggpts-breakout-moment-and-the-race-for-the-future-of-ai/">generative AI boom</a>, met while working as AI engineers at Google, where together they developed an early large language model that would become the foundation for Bard. But in 2021, they left the company because they said they’d run into bureaucratic roadblocks implementing the technology into consumer-facing applications. Shazeer, a 20-year veteran who joined prior to Google’s IPO, said he departed despite a personal plea from CEO Sundar Pichai.



“He talked to me to see if he could encourage me to stay,” Shazeer told&nbsp;Forbes&nbsp;in a July interview. “But, basically I wanted to get this technology out to as many people as possible and just empower everyone with flexible AI. I think it was the right decision.” Shazeer said the company would have needed to release the chatbot they were working on to a wide audience for him to consider staying. “It just felt like Google was not going to be very comfortable launching something that could say anything, and that you really had to be a startup to launch something like that,” he said.



The pair founded Character.AI in November 2021, a year before public appetite for AI swelled when OpenAI released ChatGPT. Google unveiled Bard this past February. Still, Character.AI has continued to carve a niche for itself. The vast majority of the startup’s bots have been created by its user base, who can upload examples of what they want the character to say and give the model feedback to help it improve, Shazeer said in the interview this month.



Startup challengers Replika and Chai have emerged, but the space remained devoid of Big Tech challengers until Zuckerberg’s announcement last month. But Shazeer claims to be unfazed by these competitors. “We’re competing against the $2 trillion industry of legacy entertainment” — say, games, books and movies — “because people want a lot of the same things like fun, the social experience and interesting content. Those things are identical regardless of whether more companies are noticing our space,” he said.



Enter the group chat. Shazeer acknowledged that Character.AI has kinks to work out in the new feature to improve its usability, such as expanding its context window so that the AI can appear to remember longer durations of the conversation. “Right now the system is operating just based on a context window of a few thousand words, so characters are only reacting to whatever happened recently, which is highly suboptimal,” Shazeer said.



The bots also remain prone to “hallucinations” in which the AI outputs false information. After&nbsp;Forbes&nbsp;asked the startup’s flagship bot Character Assistant how it was trained, the bot stated it had access to, among other things, customer service calls and transaction data from banks like Chase, Wells Fargo and Bank of America. Shazeer and De Freitas said this was incorrect and the bot had made up the answer.



Up to now, Character.AI’s chatbots have been built on the same foundational model that it trained in summer 2022 using 1,000 Nvidia A100 GPU chips. After its full order is fulfilled, the startup will be able to train new AI models on 40 times the amount of computing power as its current model, Shazeer said. All the compute access is being rented from Google Cloud and other cloud providers for now; Shazeer said Character.AI is considering eventually building its own GPU cluster, but has made no firm decisions.



Character.AI is betting that the new models will bring its technology closer to AGI, expanding the range of use cases beyond entertainment. For Shazeer, this is one reason he claims to not be worried about declining traffic. “Really I think AI is underhyped because the things that are going to be possible in the coming years are going to be really, really impressive compared to what’s possible now,” he said.



That goes for Character.AI’s group chats too. In time, he said, the bots in the group chat will be able to respond to human messages automatically. In the future, a fictional AI character could “just step in and say something that will bring you together with somebody,” he said. “I think it’s going to be a magical moment when that happens.”



Rashi Shrivastava contributed reporting.

Einstein And Musk Chatbots Are Driving Millions To Download Character.AI

Character.AI’s $200 Million Bet That Chatbots Are The Future Of Entertainment

Production studios and fans alike are turning to generative AI tools to make voice actors say things they never said — and their jobs are on the line.



 oice actor Allegra Clark was scrolling through TikTok when she came across a video featuring Beidou, a swashbuckling ship captain from the video game&nbsp;Genshin Impact&nbsp;whom she’d voiced. But Beidou was participating in a sexually suggestive scene and said things that Clark had never recorded, even though the rugged voice sounded exactly like hers. The video’s creator had taken Clark’s voice and cloned it using a generative AI tool called ElevenLabs, and from there, they made her say whatever they wanted.



Clark, who has voiced more than 100 video game characters and dozens of commercials, said she interpreted the video as a joke, but was concerned her client might see it and think she had participated in it — which could be a violation of her contract, she said.



“Not only can this get us into a lot of trouble if people think we said [these things], but it’s also, frankly, very violating to hear yourself speak when it isn’t really you,” she wrote in an email to ElevenLabs that was reviewed by&nbsp;Forbes. She asked the startup to take down the uploaded audio clip and prevent future cloning of her voice, but the company said it hadn’t determined that the clip was made with its technology. It said it would only take immediate action if the clip was “hate speech or defamatory,” and stated it wasn’t responsible for any violation of copyright. The company never followed up or took any action.



“It sucks that we have no personal ownership of our voices. All we can do is kind of wag our finger at the situation,” Clark told&nbsp;Forbes.



In response to questions about Clark’s experience, ElevenLabs cofounder and CEO Mati Staniszewski told&nbsp;Forbes&nbsp;in an email that its users need the “explicit consent” of the person whose voice they are cloning if the content created could be “damaging or libelous.” Months after Clark’s experience, the company launched a “voice captcha” tool that requires people to record a randomly generated word and that voice must match the voice they are trying to clone.



The company, which is valued at about $100 million and backed by Andreessen Horowitz and Google DeepMind cofounder Mustafa Suleyman, is one of the hottest voice AI companies right now. Its technology only requires between 30 seconds to 10 minutes worth of audio to create what sounds like a near-identical replica of someone’s voice. Along with sites like FakeYou and Voice AI, which offer a free library of digital voices, it’s also at the center of generative AI’s impact on voice actors.



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“There’s no legal protection for voice like there is for your face or for your fingerprint.”Jennifer Roberts, voice actor
</blockquote>



Interviews with 10 voice actors revealed an already precarious industry on the brink of widespread change as employers begin to experiment with these text-to-speech tools. One voice actor&nbsp;Forbes&nbsp;spoke to said an employer told her she would not be hired to finish narrating a series of audiobooks the day after it announced a partnership with ElevenLabs, leading her to fear she would be replaced with AI. Another said her employer told her that they wanted to use ElevenLabs’ AI to speed up retake sessions, a standard part of recording audio that voice actors are paid for. When she told her employer she didn’t consent to her voice being uploaded to any AI site, the employer agreed, but she said she hasn&#8217;t been called in to do any retakes.



The community of voice actors first noticed an influx of AI generated voices after Apple Books launched&nbsp;<a href="https://authors.apple.com/support/4519-digital-narration-audiobooks" target="_blank" rel="noreferrer noopener">digital narration</a>&nbsp;of audiobooks with a suite of soprano and baritone voices in January 2023, said Tim Friedlander, the president of NAVA. Actors began discovering thousands of audio files of familiar voices being uploaded to various sites mostly by fans, he said. Most recently, famed actor Stephen Fry said that his voice was scraped from his narration of the Harry Potter books and cloned using AI. In a&nbsp;<a href="https://www.youtube.com/watch?v=zZfS8uk70Zc" target="_blank" rel="noreferrer noopener">talk</a>&nbsp;at CogX festival, Fry said the experience “shocked” him.



In a public&nbsp;<a href="https://docs.google.com/spreadsheets/u/1/d/1n6KZpcahyckjmzgsH90ghgNs5pcEQ57baavbjAI_ed8/edit#gid=0" target="_blank" rel="noreferrer noopener">spreadsheet</a>, hundreds of voice actors have requested to have their voices purged from AI voice generators Uberduck and FakeYou.ai, which have said they will take voices down from their sites if the voice’s owner reaches out. While FakeYou.ai still provides thousands of popular voices like those of John Cena and Kanye West that anyone can use, Uberduck removed user-contributed voices from its platform in&nbsp;<a href="https://www.uberduck.ai/post/new-voice-hosting-policy" target="_blank" rel="noreferrer noopener">July</a>. Uberduck and FakeYou.ai didn’t respond to multiple requests for comment.



One of the voice actors who has publicly requested his voice be removed from voice generators is Jim Cummings, the voice behind characters like Winnie-the-Pooh and Taz from Looney Tunes. He told&nbsp;Forbes&nbsp;he would only agree to users templating his voice if he and his family received royalties for it. “Keep your paws off my voice,” he said.



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<h2 class="wp-block-heading" id="h-a-legal-dilemma">A Legal Dilemma</h2>



Like striking film actors, who are sounding the alarm about the coming of AI and how it could affect their jobs, voice actors are on the front lines of technological change. But unlike other creative fields, where&nbsp;<a href="https://www.forbes.com/sites/cyrusfarivar/2023/09/11/michael-chabon-other-literary-giants-sue-openai-over-alleged-copyright-infringement/?sh=4d2b431e66a4">authors</a>&nbsp;and&nbsp;<a href="https://www.theverge.com/2023/1/16/23557098/generative-ai-art-copyright-legal-lawsuit-stable-diffusion-midjourney-deviantart" target="_blank" rel="noreferrer noopener">artists</a>&nbsp;are banding together in class-action lawsuits to push back against their copyrighted work being used to train AI models, voice actors are uniquely vulnerable. Even though voices are inherently distinguishable, they aren’t protected as intellectual property. “There’s no legal protection for voice like there is for your face or for your fingerprint,” said Jennifer Roberts, the voice behind several video game characters. “Our hands are tied.”



A recording of a voice, however, can be copyrighted, and according to Jeanne Hamburg, an attorney for law firm Norris McLaughen, using a voice for commercial purposes can be protected by “rights of publicity,” which prevents celebrities&#8217; likenesses from being exploited. That’s in theory, though: Most contracts signed by voice actors don’t stop recordings of their voices from being used to train AI systems. For more than a decade, contracts have stated that producers “own the recording in perpetuity, throughout the known universe, in any technology currently existing or to be developed,&#8221; said Cissy Jones, a voice actor who is part of the founding team at National Association of Voice Actors (NAVA), a newly formed union for voice actors.



Those contracts were largely written and signed before the advent of AI systems. “Voice actors have not provided informed consent to the future use of an audio recording and haven&#8217;t been fairly compensated for it,” said Scott Mortman, an attorney for NAVA. “And so protections need to be strengthened significantly in the wake of AI.”



That’s why NAVA, and the actors union SAG-AFTRA, are working to strike verbiage from&nbsp;<a href="https://navavoices.org/synth-ai/" target="_blank" rel="noreferrer noopener">contracts</a>&nbsp;that allows employers to use an actor’s voice to create a “digital double,” or “synthesize” their voice through machine learning. The organizations have also developed new boilerplate language to add into contracts that would protect voice actors from losing the rights to their voices.



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<h2 class="wp-block-heading" id="h-a-myriad-of-misuses">A Myriad of Misuses</h2>



Like Clark, numerous voice actors have experienced fans manipulating their voices using generative AI tools to create&nbsp;<a href="https://www.ign.com/articles/voice-actors-speak-out-on-nsfw-skyrim-mods-nexus-mods" target="_blank" rel="noreferrer noopener">pornographic</a>,&nbsp;<a href="https://www.vice.com/en/article/dy7mww/ai-voice-firm-4chan-celebrity-voices-emma-watson-joe-rogan-elevenlabs" target="_blank" rel="noreferrer noopener">racist and violent</a>&nbsp;content. Even when fans use AI voices to create innocuous memes or other kinds of fan content, voice actors have spoken up on social media,&nbsp;<a href="https://www.themarysue.com/voice-actors-dont-want-you-using-ai-to-copy-their-voices/" target="_blank" rel="noreferrer noopener">forbidding</a>&nbsp;people from fabricating their voices.



NAVA member Jones, whose voice has been featured in Disney shows and Netflix documentaries, found TikTok videos in which fans had used Uberduck to create clones of her voice saying inappropriate things. “Not only is my voice saying something I would never say, that stuff is out there in the world,” Jones told&nbsp;Forbes. “If potential buyers hear our voices saying that, how will that affect my future work?” After she reached out, Uberduck removed her voice from the platform, Jones said.



AI generated voices have also become a new medium for harassment. Abbey Veffer, whose voice has been featured in games like&nbsp;Genshin Impact&nbsp;and&nbsp;The Elder Scrolls, said she was doxed by someone who had created a clone of her voice in February. The person created a Twitter account with her address as the username, generated an AI clone of Veffer’s voice and then made the clone say racist and violent things. The anonymous user directly messaged the recording to Veffer and pinned it at the top of the Twitter account. They claimed to have used ElevenLabs’ technology. The experience, Veffer told&nbsp;Forbes, was “intense” and “very upsetting.”.



But when Veffer reached out to ElevenLabs with her concerns, the company said that the clone was not created using its software and was part of an “organized smear campaign” against the startup, according to messages reviewed by&nbsp;Forbes.&nbsp;Three days after Veffer reached out to Twitter, the account was suspended and the video was taken down but her residential address remained on the site for three months, she said.



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“Controlling how our voice gets used and where it gets used is very important to us.”Tim Friedlander, president of National Association of Voice Actors
</blockquote>



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After ElevenLabs rolled out the beta version of its text-to-speech AI tool in January, the startup&nbsp;<a href="https://twitter.com/elevenlabsio/status/1620032627075063811" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;that it was struggling with people misusing its technology. A day later, Vice’s Motherboard&nbsp;<a href="https://www.vice.com/en/article/dy7mww/ai-voice-firm-4chan-celebrity-voices-emma-watson-joe-rogan-elevenlabs" target="_blank" rel="noreferrer noopener">found</a>&nbsp;that anonymous 4Chan posters used ElevenLabs’ then free cloning tool to generate racist, transphobic and violent remarks with the voices of celebrities like Joe Rogan and Emma Watson.



AI’s ability to closely mimic people’s voices has also created opportunities for scammers. The FTC has issued&nbsp;<a href="https://consumer.ftc.gov/consumer-alerts/2023/03/scammers-use-ai-enhance-their-family-emergency-schemes" target="_blank" rel="noreferrer noopener">warnings</a>&nbsp;this year that criminals are using AI voice clones to impersonate loved ones as a way to convince their targets to send them money. One journalist was able to use ElevenLabs’ tool to create an AI-generated version of his voice that&nbsp;<a href="https://www.vice.com/en/article/dy7axa/how-i-broke-into-a-bank-account-with-an-ai-generated-voice" target="_blank" rel="noreferrer noopener">successfully</a>&nbsp;logged into his own bank account.



ElevenLabs did not comment on any of these specific instances, but CEO Staniszewski said in an email, “If someone is using our tool to clone voices for which they don’t have permission and which contravene fair use cases, we will ban the account and prevent new accounts from being set up with the same details.” Along with a “voice captcha” tool to ensure people have that permission, the company says it has also developed an AI speech classifier that can detect with more than 90% accuracy whether an audio clip that contains AI was made using its tools.



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<h2 class="wp-block-heading" id="h-consent-and-control">Consent And Control</h2>



In response to misuse, voice generation sites are adding restrictive measures to police their technologies. Speechify, which licenses the voices of celebrity narrators like Snoop Dog and Gwyneth Paltrow (with full permission), doesn’t allow people to upload content to create customized voices without the active participation of the person whose voice they want to use. Similar to ElevenLabs, it presents a unique text that the user, or someone who is physically present with them, has to read aloud in their own voice. “I think it is short sighted to take shortcuts and my goal is to put content owners in the driver&#8217;s seat,” said founder Cliff Weitzman, who first started Speechify to convert his textbooks into audiobooks using machine learning in 2012.



And at Resemble AI, which touts enterprise customers like Netflix and World Bank Group, people can only create a customized AI-generated voice after recording a consent statement in the voice they want to generate. Resemble AI founder and CEO Zohaib Ahmed said that implementing safe ways to deploy the technology has been integral to his startup because he believes the onus of preventing misuse should fall on the vendors making the tools rather than on the end user.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It sucks that we have no personal ownership of our voices.”Allegra Clark, voice actor
</blockquote>



These kinds of verification checks, however, don’t address higher level ethical questions around consent. Actors, for instance, don’t really have control over how their voices will be used posthumously. Voice actors were enraged when&nbsp;<a href="https://www.gamesradar.com/after-backlash-over-using-ai-to-clone-dead-voice-actors-smite-and-paladins-studio-says-it-will-change-its-contract/" target="_blank" rel="noreferrer noopener">gaming studio</a>&nbsp;Hi-Rez Studios added a clause that would allow it to clone a voice using AI after the owner of the voice died (the clause was removed after the uproar). “If an actor passes away, it’s better to replace them with another human than create some artificial performance because it&#8217;s not them and it doesn&#8217;t bring them back,” said voice actor Clark.



The big concern hovering over all of this is whether there’s a future for voice actors. With employers and fans turning to synthesized voices, many are concerned about finding their next gig or keeping the ones they have. “Controlling how our voice gets used and where it gets used, and how much we&#8217;re paid for that usage is very important to us,” said NAVA’s Friedlander.

Voiceover artist voice actor in vocal recording studio with larg diaphragm microphone and antipop shield.

‘Keep Your Paws Off My Voice’: Voice Actors Worry Generative AI Will Steal Their Livelihoods

Hacker, IT and person with code on computer, programming and phishing scam with malware or virus. Hacking, system glitch and cloud computing error in dark room, cyber crime and cybersecurity fail

How AI Is Supercharging Financial Fraud–And Making It Harder To Spot

Packages containing rifle parts hidden inside George Foreman Grills also contained Apple’s dime-sized location tracker, investigators say.



In November last year, Customs and Border Protection intercepted a package en route from Illinois to Israel. It contained a George Foreman Grill — innocuous enough. But when agents X-rayed the item and opened it up, they found rifle barrels wrapped in tinfoil and an Apple AirTag.



When Apple launched the dime-sized location tracking devices in 2021, they were pitched as a cheap piece of tech to help you keep tabs on your belongings, like luggage, keys and wallets. But AirTags and similar devices like Tile have also been put to use by criminals,&nbsp;<a href="https://www.theguardian.com/technology/2022/sep/05/i-didnt-want-it-anywhere-near-me-how-the-apple-airtag-became-a-gift-to-stalkers" target="_blank" rel="noreferrer noopener">most notably stalkers</a>.



Now, CBP inspectors claim to have found evidence of another illicit use for AirTags: helping illegal weapons smugglers keep tabs on their shipments, according to a search warrant for an Apple iCloud account linked to the trackers that was obtained by&nbsp;Forbes.



Drug and gun traffickers have long used GPS trackers to keep tabs on shipments, either in order to ensure they reached their destination, or detect when they go missing. But while older trackers have proven bulky and unreliable, Apple’s AirTag is small, lightweight and efficient.



“Like drug dealers, [weapons traffickers] want to make sure the load didn’t get ripped by police or somebody else,” said Brady Wilkins, a recently-retired investigator in Arizona. “If another group takes it or it gets seized, they can abandon it or know something is not right.”



Apple did not respond to requests for comment at the time of publication, but it has been attempting to curtail malicious uses of the AirTag over the last two years. One recent addition is a feature that warns users when an unknown tracking device is detected, via Bluetooth, on their person. “We condemn in the strongest possible terms any malicious use of our products,” the company wrote in a&nbsp;<a href="https://www.apple.com/uk/newsroom/2022/02/an-update-on-airtag-and-unwanted-tracking/" target="_blank" rel="noreferrer noopener">press release</a>&nbsp;last year.



According to the warrant, the DHS Homeland Security Investigations unit traced the rifle barrel shipment back to a Palos, Illinois-based man, Amin Betuni. Records the government said it obtained from an unnamed online gun supplier showed Betuni had bought various AR-15 and Glock barrels. Investigators said that CBP intercepted a package containing what appeared to be those same parts, together with the grill and an AirTag, en route to a contact in Jerusalem, Israel. The warrant says the package’s shipping label stated it was sent from “Ameen Betuni” from a vacant lot next to a property owned by the suspect.



Border patrol in Israel, meanwhile, reported intercepting a different package containing gun parts also hidden inside a George Foreman Grill and an AirTag alongside, according to the warrant. That parcel had a return address for Betuni’s residence, the DHS claimed. Israeli officials also seized an additional FedEx shipment containing other gun components that were concealed inside of auto parts, investigators said. An AirTag was discovered in that package too.



Wilkins said that adding a personal property as return address would be a stupid mistake. “Criminals become complacent too,” he added.



In late December, law enforcement raided Betuni’s property, though he was not at home. Investigators suspected, however, they were being watched by security cameras in his home, as only ten minutes after police entered Betuni’s residence, one of his AirTag devices was mysteriously unpaired with his iCloud account, the DHS said.



Betuni was arrested in July and has been accused of shipping illegal Glock switches, which effectively turn a pistol into an automatic weapon, in the U.S. However, he has not yet been charged for sending gun apparatus to Israel or any other nation. In a recent filing, the government asked the court for an extension to the deadline for filing an indictment, as it was continuing to investigate Betuni’s conduct. The request was granted last week.



Others involved in the alleged scheme, but whose identities were unknown to the government, were also using AirTags as part of their operation to “smuggle goods from the United States,” the agent wrote in the warrant. No more information on the wider use of the Apple devices was provided.



The Department of Justice declined to comment on the case. Betuni’s lawyer didn’t respond to requests for comment.



It’s not just criminals who’ve found uses for the AirTag — law enforcement has too, even if it goes against Apple policy to use the tools for surreptitious surveillance. In March, <a href="https://www.forbes.com/sites/thomasbrewster/2023/03/23/apple-airtag-becomes-dea-surveillance-device/?utm_campaign=forbes&amp;utm_source=twitter&amp;utm_medium=social&amp;utm_term=Gordie">Forbes found a warrant detailing the DEA’s use of an AirTag</a>, after it placed one of the devices in a machine agents suspected was being ordered online to manufacture illegal narcotics.

Category: Daily Cover