Business

Apple fans can’t wait for February 2nd. That is when the tech giant’s latest gadget, a new augmented-reality (AR) headset called the Vision Pro, goes on sale. Some early reviewers complained that it caused headaches and had a two-hour battery life. Many potential buyers will be put off by the price tag of $3,499. Still, perhaps 200,000 have been pre-ordered, about 40% of what Apple had reportedly expected to sell this year. Tim Cook, Apple’s boss, has described trying the Vision Pro as an “aha moment”. “You only have a few of those in your lifetime,” he added.Aha or not, the Vision Pro is part of a trend. In September techies got excited about a new pair of smart glasses made by Meta, Facebook’s parent company, and Ray-Ban, an eyewear brand. The spectacles are controlled by voice and can play music, send texts and film everything you see. Two months later Humane, a startup founded by former Apple executives, launched the Pin, a brooch with which users interact by talking and gesticulating. In January the r1, a voice-controlled gizmo half the size of a smartphone, enthralled attendees at the Consumer Electronics Show in Las Vegas. Its maker, a startup called Rabbit, has sold nearly 100,000.What all these devices have in common is that they do away with screens, keyboards and mice. Thanks to “generative” artificial intelligence (AI), computers are getting good at listening to, reading and watching stuff—and understanding it. That means hardware can be controlled by voice, gesture or image rather than touch. AI is thus enabling new “form factors”—tech speak for gadgets in new shapes and sizes, just as the iPhone looked different from older handsets.Silicon Valley’s elite are cheering on the potential shift. They believe AI could create a new market for consumer hardware, replacing the smartphone as everyone’s essential device. Sam Altman, boss of OpenAI, the startup behind ChatGPT, is reportedly in talks to start a firm with Jony Ive, former head of design at Apple, to make a gadget purpose-built for AI. Satya Nadella, chief executive of Microsoft, an AI-ambitious tech titan, recently said that “once you have a new interface…new hardware is also possible.”image: The EconomistOne reason for all the excitement about new gadgets is that the old ones are looking unexciting. Last year 1.2bn smartphones were sold worldwide, down by 3% from the previous year and the lowest level for a decade, according to IDC, a research firm. PCs did even worse, declining by 15% in 2023 to 242m units. Cash-strapped consumers are opting for cheaper alternatives, such as second-hand devices, or holding on to their current ones for longer.The hope is that they may be persuaded to fork out for all-new gadgets because they offer something that old ones do not. AI could, for instance, make using devices more seamless and more personal. Users can tell or gesture to the r1 to hail a ride, order food or play music without the need to toggle between apps. It also learns from users’ previous actions. Until now people had to adapt to software, says Vinod Khosla, a veteran venture capitalist and early backer of Rabbit. In the r1, “the AI adapts to you.”New gadgets are also less finicky to develop and manufacture. Lior Susan of Eclipse, a venture-capital (VC) firm, says that ten years ago building a high-tech widget required hundreds of staff. Today he can do the same thing with about ten. Every step of the manufacturing process has become easier. Initial versions can be mocked up in design software. Rather than buying an industrial machine to make parts for a prototype, they can be ordered from 3D-printing firms like Shapeways. Sensors, batteries and chips can be bought off the shelf. Contract manufacturers, such as Foxconn, no longer insist on working only for big clients like Apple. Some offer dedicated services for hardware startups.The resulting crop of new AI-powered devices falls into two broad categories. The first is headsets for virtual or augmented reality (VR and AR). So far they have been most popular among gaming enthusiasts. Sales of VR headsets peaked at around 10m units in 2020 after the release of Meta’s Quest 2, estimates George Jijiashvili of Omdia, a research firm. He thinks the Vision Pro will breathe new life into the industry by making VR appealing to non-gamers. Promotional videos depict people using the Vision Pro to watch films, work or talk to friends.The second category consists of subtler gizmos. Some 540m “wearables” worth $68bn were shipped last year, according to IDC. Many already incorporate AI in one way or another. They include earphones (which account for 63% of the units sold), smartwatches (another 30%), wristbands such as the Whoop, a fitness tracker, and smart glasses, like Meta’s Ray-Bans (which together make up most of the rest). Humane’s Pin and AI pendants made by two startups, MyTab AI and Rewind AI, are the latest additions to this group.All these devices are nifty. Whether they are nifty enough to dislodge the smartphone and become the next big platform is another matter. For that to happen, consumers must take to them. This requires them, first, to look good—which some failed early efforts, such as the dorky Google Glass, did not. The r1 owes its sleek retro feel to Rabbit’s collaboration with Teenage Engineering, a Swedish design firm. Before its launch, Humane’s Pin appeared on a Paris catwalk at an event held by Coperni, a French fashion house. Meta’s glasses are a hit in part because Ray-Ban knows what makes shades stylish.Second, the new gadgets have to be useful in ways the old ones are not. Many hardware-makers are adding AI to existing devices. On January 31st Samsung started selling an AI smartphone that can do neat tricks such as summarising text-message threads. Microsoft’s next generation of laptops and tablets will reportedly include specialist AI chips and a new keyboard button to summon “Copilot”, its AI chatbot. Smart speakers, such as Amazon’s Alexa and Google’s Nest, and earphones, such as Apple’s AirPods, are getting revamped with AI features. These including chatbots and, with AirPods, the ability to let through necessary sounds and turn down volume when the wearer is speaking.To break through, the AI hardware will have to make life either much easier (for instance by booking a whole trip, flight, car and hotel included, with a single command) or much more marvellous (creating Mr Cook’s “aha moment”). Users will also expect them to perform more than a couple of functions. That means lots of apps. Meta’s latest VR headset, the Quest 3, offers 500 or so. The Vision Pro already boasts around 350 purpose-built apps, and can run the iPhone versions of most of the roughly 2m available in the App Store. Humane’s Pin, which doubles as a phone, claims to be doing away with apps, instead offering a range of “AI-powered services” from providers such as OpenAI and Google. Rabbit’s r1 piggybacks on smartphones’ existing app universe, at least for the time being.Third, although manufacturing things has got easier, managing supply chains remains the hardest part of running a hardware business, notes Shaun Maguire of Sequoia, another VC firm. Suppliers may take phone calls from smaller firms but some are still reluctant to give good prices to unproven newcomers with small orders.None of the available AI devices overcomes all three challenges. Those that look pretty, like the r1, the Pin or Meta’s Ray-Bans, seem to be peripherals more akin to AirPods than the iPhone. Independently useful ones like the Vision Pro or the Quest are dorkier than Google Glass, and much clunkier. In addition, developing apps for Apple’s headset is expensive, which is putting off developers, including some video-game studios, Netflix, Spotify and YouTube (which also happen to compete with Apple’s own video and music-streaming services). Production problems afflict just about everyone. Jesse Lyu, founder of Rabbit, says that it took his product becoming an overnight sensation for him to gain a bit more bargaining power over his suppliers. Even Apple, the master of supply chains, reportedly had to scale back initial plans to ship 1m Vision Pros this year because of the complex manufacturing involved.If some gadget-makers clear all three hurdles, they may stumble on another: keeping up with the breathtaking pace of AI advances. Apple took seven years to develop the Vision Pro, aeons in AI time. Even the next generation of Rabbit’s device, which Mr Khosla says will be ready as soon as this summer, may be outmoded by the time it gets into users’ hands. One of today’s AI gadgets may one day dethrone the smartphone. More likely, the winning form factor has yet to take shape. ■ More

Byron Allen, the media mogul offering $14 billion for Paramount Global, told CNBC on Wednesday that he has the money to finance a deal.
Allen has a long history of making offers on major media assets, but few of his bids have resulted in sales.
His bids for linear TV assets come as the media landscape shifts away from traditional TV toward streaming.

Byron Allen, founder, chairman and CEO of the Allen Media Group, speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon | AFP | Getty Images

Byron Allen, the media mogul offering $14 billion for Paramount Global, told CNBC on Wednesday that he has the money to finance a deal, despite skepticism around his deal-making.
“We have more than enough capital available to us. The real challenge is certainty of close,” Allen said.

“This deal lives or dies at the [Federal Communications Commission],” he added.
Allen, the founder and CEO of a media group that owns dozens of television networks across the U.S., offered $30 billion for all of Paramount’s outstanding shares, including debt and equity.
The Allen Media Group said in a statement the offer “is the best solution for all of the Paramount Global shareholders, and the bid should be taken seriously and pursued.”
Allen has a long history of making offers on major media assets. But bidding doesn’t mean buying.
His recent media buyout offers have failed to materialize into sales. The Wall Street Journal reported Wednesday that Allen last year offered $18.5 billion for Paramount, and was rejected.

Allen told CNBC he hasn’t received a response from Paramount to his most recent offer.
Shari Redstone, who controls Paramount through her company National Amusements, has been open to deal-making in recent months in an effort to either merge or sell the company that’s home to brands such as CBS, Showtime, Nickelodeon and its namesake movie studio.
CNBC reported last week that David Ellison’s Skydance Media and its backers were exploring a deal to take Paramount Pictures or the entire media company private.
In December, CNBC also reported Paramount had entered preliminary talks with Warner Bros. Discovery to merge the two media giants in a deal that could have faced regulatory hurdles.
Allen’s bid for Paramount is the most ambitious of the deals the media mogul has tried to complete. Here are some of his recent deal attempts:

In December, Allen renewed an attempt to buy Paramount-owned Black Entertainment Television and VH1 for a combined $3.5 billion.
In November, Bloomberg reported, he was weighing a bid to buy television stations from E.W. Scripps.
In September, Allen made an offer to buy ABC and several other networks from Disney for $10 billion after Disney CEO Bob Iger opened the door to selling the company’s linear TV assets.
In 2022, he explored a bid to buy the National Football League’s Washington Commanders.
In March 2020, he offered $8.5 billion to buy television stations owner Tegna.

Allen told CNBC via phone Wednesday that he lost out on several deals because ownership changed course on wanting to sell. He highlighted his acquisition of The Weather Channel in 2018 for a reported $300 million and broadly defended his track record, invoking baseball Hall of Famer Babe Ruth.
“Let’s talk about Babe Ruth. Does he go down as one of the greatest baseball players of all time? And he struck out half the time,” Allen said. In actuality, Ruth struck out 1,300 times in 8,399 at bats — a 15% strikeout rate.
Allen’s bids for linear TV assets come as the media landscape shifts away from traditional TV toward streaming. Almost all the major media companies have launched services to compete with streaming giant Netflix.
Paramount reported in its third-quarter earnings report that its streaming platform, Paramount+, increased its subscriber count to 63 million. However, Paramount’s direct-to-consumer products have failed to turn a profit like Netflix has. The division reported adjusted losses of $238 million for the third quarter.
Paramount will release its fourth-quarter earnings Feb. 28.
Allen told CNBC he wants to buy Paramount for its linear networks, what he says is the most challenging part of the company.
“These are still great businesses if you know how to manage them properly,” Allen said.
Shares of Paramount were up almost 7% Wednesday and have risen more than 35% in the past three months as talks of a deal have ramped up. However, the stock is more than 40% off its 52-week high of $25.93 a share reached in February 2023.
— CNBC’s Alex Sherman and Julia Boorstin contributed to this report.Don’t miss these stories from CNBC PRO: More

Starbucks stock ticked higher Wednesday, despite the company reporting weak quarterly results and lowering its fiscal 2024 sales outlook.
Some investors had likely prepared themselves for worse news, according to Wall Street analysts.
Starbucks executives said the challenges faced by the company are “transitory.”

A customer exits a Starbucks store in Manhattan on Jan. 30, 2024, in New York City.
Spencer Platt | Getty Images

Wall Street is shaking off Starbucks’ weak quarterly report, seemingly taking executives at their word that the company’s challenges are “transitory.”
The coffee giant’s stock ticked higher in morning trading, hours after it reported fiscal first-quarter earnings and revenue that missed Wall Street’s estimates and lowered its full-year sales outlook.

Shares closed Wednesday down about 1%. Including Wednesday’s move, shares have fallen about 14% over the last year, dragging the company’s market cap down to roughly $105 billion.
Some investors had prepared themselves for worse news on Tuesday evening. Morgan Stanley analyst Brian Harbour wrote in a note to clients that the company’s earnings per share and U.S. same-store sales growth was better than some had feared, “likely supporting the stock.”
Starbucks CEO Laxman Narasimhan blamed three headwinds for the disappointing results: war in the Middle East weakening its local licensees’ sales, “misperceptions” in the U.S. over the company’s stance on the Israel-Hamas war, and a “more cautious” consumer in China.
Executives also tried to convey that those challenges are expected to subside as fiscal 2024 progresses.
Starbucks is already trying to bring back its U.S. customers through promotions and social media spending that clarifies its position on the Middle East. Executives also said the company has several new drinks on the way, which could attract the occasional customers.

While Starbucks lowered its full-year outlook for revenue and same-store sales growth, it reiterated its forecast for fiscal 2024 earnings per share growth. BMO Capital Markets analyst Andrew Strelzik wrote that investors were likely expecting the company to lower its earnings outlook as well, so reaffirming that forecast could lift the stock price in the near term.
Others took that as a sign of the company’s overall strength.
“[It illustrates] the multifaceted strength of Starbucks’s business model and its ability to deliver results even in a more erratic top-line environment,” William Blair analyst Sharon Zackfia wrote in a note to clients. More

“IT IS THE most advanced AI accelerator in the industry,” boasted Lisa Su, boss of Advanced Micro Devices (AMD), at the launch in December of its new MI300 chip. Ms Su rattled off a series of technical specifications: 153bn transistors, 192 gigabytes of memory and 5.3 terabytes per second of memory bandwidth. That is, respectively, about 2, 2.4 and 1.6 times more than the H100, the top-of-the-line artificial-intelligence chip made by Nvidia. That rival chipmaker’s prowess in the semiconductors fuelling the AI boom has, over the past year, turned it into America’s fifth-most-valuable company, with a market capitalisation of $1.5trn. Yet most experts agreed that the numbers and Ms Su weren’t lying: the MI300 does indeed outshine the H100. Investors liked it, too—AMD’s share price jumped by 10% the next day.On January 30th, in its quarterly earnings call, AMD announced that it expected to sell $3.5bn-worth of MI300s this year. It also reported strong revenues of $23bn in 2023, four times what they had been in 2014, when Ms Su became chief executive. Its market value is up 100-fold on her watch, to $280bn. Relative to forecast profits in the next 12 months, its valuation is richer even than Nvidia’s. Last year it displaced Intel, which once ruled American chipmaking, as the country’s second-most-valuable chip company. Now it is taking aim at the biggest.image: The EconomistSuch ambition would have seemed fanciful a decade ago. Back then, recalls Mark Papermaster, AMD’s technology chief, AMD was facing an “existential crisis”. In 2008 it had spun off its chip-fabrication business to focus on designing processors, outsourcing manufacturing to contract chipmakers such as TSMC of Taiwan. The idea was to be better able to compete on blueprints with Intel, whose vast fabrication capacity AMD could not hope to match. It didn’t work. Several of AMD’s chips flopped. Sales of its central processing units (CPUs), mostly for personal computers, were collapsing. In 2013 it sold and leased back its campus in Austin to raise cash. A year later Ms Su inherited a net-debt pile of more than $1bn, a net annual loss of $400m and a market capitalisation of less than $3bn, down from $20bn in 2006.Ms Su realised the only way for AMD to get back in the game was to steer it away from the sluggish PC market and focus on more promising areas like CPUs for data-centre servers and graphics processing units (GPUs, which make video-game visuals lifelike) for gaming consoles. She and Mr Papermaster took a gamble on a new CPU architecture designed to beat Intel not just on price, but also on performance.When the going got toughThe idea was to use a Lego-like approach to chip building. By breaking a chip up into smaller parts, AMD could mix and match blocks to assemble different types of chips, at a lower cost. When the first such composite chips were released in 2017, they were zippier and cheaper than rival offerings from Intel, possibly in part because Intel was distracted by its own problems (notably repeated manufacturing slip-ups as it moved to ever tinier transistors). In the past ten years AMD’s market share in lucrative server CPUs has gone from nothing to 30%, breaking Intel’s monopoly.Having faced down one giant, AMD now confronts another. The contest with Nvidia is different. For one thing, it is personal—Ms Su and Jensen Huang, Nvidia’s Taiwanese-born boss, are distant relatives. In contrast to Intel, Nvidia is, like AMD, a chip designer and thus less prone to production missteps. More importantly, the stakes are higher. Nvidia’s market value of $1.5trn is predicated on its dominance of the market for GPUs—not because of their usefulness in gaming but because they also happen to be the best type of chip to train AI models. Ms Su expects global sales of AI chips to reach $400bn by 2027, up from perhaps $40bn last year. Does she stand a chance against Nvidia?Nvidia is a formidable rival. Both its revenues and operating margins are nearly three times AMD’s. According to Jefferies, an investment bank, the company dominates the market for AI accelerator chips, accounting for 86% of such components sold globally; before the launch of the MI300, AMD barely registered. Nvidia also offers network gear that connects clusters of chips, and software, known as CUDA, to manage AI workloads. Nvidia has dominated AI chipmaking because it has offered the best chips, the best networking kit and the best software, notes Doug O’Laughlin of Fabricated Knowledge, a research firm.image: The EconomistAMD’s new processor shows it can compete with Nvidia on semiconductor hardware. This, Mr Papermaster says, is the result of a ten-year investment. AMD is spending nearly $6bn a year on research and development, nearly as much as its larger rival—and twice as much as a share of sales (see table). This has enabled it to adapt its Lego approach to GPUs. Combining a dozen blocks—or “chiplets”—into a single chip lets AMD put processors and memory close to each other, which boosts processing speed. In December OpenAI, maker of ChatGPT and the world’s hottest AI startup, said it would use the MI300s for some of its training.To outdo Nvidia on networking and software, AMD is teaming up with other firms. In December it announced a partnership with makers of networking gear, including the two largest, Broadcom and Cisco. It is also supporting an open-source initiative for chip-to-chip communication called Ultra Ethernet Consortium as an alternative to InfiniBand, a rival championed by Nvidia.Chomping at the byteNvidia’s lead in software will be harder to close. It has been investing in CUDA since the mid-2000s, well before the current AI wave. AI developers and researchers love the platform, which allows them to fine-tune the performance of Nvidia processors. AMD hopes to tempt customers away from Nvidia by making its software, ROCm, open source and providing tools to make the switch smoother, by translating CUDA programs into ROCm ones.Beating Nvidia at its own game will not be easy. Mr Huang’s firm is not standing still. It recently announced plans to bring out a new chip every year instead of every two years. The tech giants with the grandest AI ambitions—Alphabet, Amazon, Meta and Microsoft—are busily designing their own accelerator chips. Despite AMD’s robust sales, investors were disappointed with its forecast for MI300 shipments. Its share price dipped by 5% the day after it reported its latest results.Still, AMD has one big thing going for it. It is not Nvidia. AI companies are desperate for an alternative to its larger rival, whose dominant position lets it charge steep prices and, with demand outstripping supply, ration chips to buyers. Despite efforts to design their own hardware, big tech firms will rely on chipmakers for a while yet, and AMD gives them more options, notes Vivek Arya of Bank of America. Microsoft and Meta have already announced plans to use AMD’s GPUs in their data centres. And if Nvidia slips up, AMD will be there to pick up the pieces. Just ask Intel. ■ More

A U.S. consortium, Strategic Sports Group, will invest up to $3 billion into the PGA Tour.
Talks about investment from the Saudi Public Investment Fund continue.
Under the new agreement, players will have the opportunity to gain equity in the tour.

The PGA Tour logo is seen during the third round of the Travelers Championship at TPC River Highlands in Cromwell, Connecticut, on June 24, 2017.
Fred Kfoury | Icon Sportswire | Getty Images

A U.S. consortium has agreed to invest up to $3 billion into the PGA Tour, the professional golf organization announced Wednesday.
Under the terms of the deal, the investor, Strategic Sports Group, will become a minority owner in PGA Tour Enterprises, the for-profit entity of the PGA Tour. The group will make an initial investment of $1.5 billion in the PGA Tour.

The second $1.5 billion of the investment is guaranteed, according to a source familiar with the talks. The PGA Tour will get it once negotiations with the Saudi Public Investment Fund conclude. There is no deadline for those talks to end.
The agreement comes as the organization tries to plot out its future in the face of competition from the upstart LIV Golf and a proposed merger with the Saudi-funded league. The tour confirmed progress on its ongoing negotiations with the PIF on a potential future investment and its discussions with the DP World Tour.
“Today marks an important moment for the PGA Tour and fans of golf across the world,” PGA Tour Commissioner Jay Monahan said.
The deal received unanimous support from the PGA Tour player directors.
As part of the new agreement with Strategic Sports Group, the tour said nearly 200 players will have the opportunity to receive equity participation in the tour. These would be awarded in the form of grants, which vest over time — and would be based on their career accomplishments and future participation and services with the tour.

“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” Monahan said.
Strategic Sports Group is led by Fenway Sports Group’s John Henry. It includes a variety of investors, private equity names and sports owners, including Atlanta Falcons owner Arthur Blank, New York Mets owner Steve Cohen and Boston Celtics owner Wyc Grousbeck.
“Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour,” said Henry, principal owner of Fenway Sports Group and manager of the Strategic Sports Group.
Monahan and Henry held a players-only call to share the news with members Wednesday morning.
The investment comes at a pivotal time for professional golf. The tumultuous rivalry between the PGA Tour and Saudi PIF-backed LIV Golf has divided players, and a merger could dramatically change the sport.
The PGA Tour-LIV deal was first announced in June, when Monahan and Saudi Public Investment Fund Governor Yasir Al-Rumayyan announced the news on CNBC. It came as a surprise to many, as the two competing leagues were engaged in a bitter legal feud at the time.
Critics claimed that the deal was a means for Saudi Arabia to gain influence in the U.S. through sports investments. Saudi Crown Prince Mohammed bin Salman controls the PIF.
LIV Golf, launched in 2022, formed as a rival league to the tour. By offering lucrative prize money and signing bonuses, the Saudi-owned tour was able to lure away top players like Phil Mickelson, Dustin Johnson, Brooks Koepka and Jon Rahm.
The PGA Tour-LIV Golf deadline was originally set for Dec. 31. Monahan previously told players the organizations were extending the deadline based on the progress they had made to date. A formal decision on the combination is expected to take place ahead of the Masters Tournament in April.
The deal is subject to Justice Department and regulatory approval.
Don’t miss these stories from CNBC PRO: More

Adidas said it won’t write off the majority of its unsold Yeezy inventory and instead plans to sell the remaining shoes “at least” at the cost it paid for them as it looks to recoup its losses. 
The German sportswear giant had previously considered writing off about 300 million euros in unsold Yeezy inventory after it cut ties with rapper Ye over a series of antisemitic remarks he made. 
“Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price. This is why we have only written off inventory that was either damaged or very broken in sizes,” CEO Bjørn Gulden said in a statement.

Shoes are offered for sale at an Adidas store in Chicago on Feb. 10, 2023.
Scott Olson | Getty Images

Adidas announced on Wednesday that it won’t write off the majority of its unsold Yeezy inventory and instead plans to sell the remaining shoes “at least” at the cost it paid for them, as the apparel retailer looks to recoup its losses. 
The German sportswear giant had previously considered writing off about 300 million euros, or $325 million, in unsold Yeezy inventory after the company cut ties with rapper Ye, formerly known as Kanye West, over a series of antisemitic remarks he made. 

In its announcement, Adidas said it managed to generate an operating profit of 268 million euros in 2023 after it originally forecast a loss of 100 million euros. The company attributed the profit to its “better-than-expected operational business” during its fourth quarter and the decision to sell the majority of the remaining Yeezy inventory. 
“Following the latest decision, the 2023 operating profit now only includes a low double-digit million amount of Yeezy-related inventory write-offs. Instead, the company plans to sell the remaining Yeezy product at least at cost in 2024,” Adidas said in a news release. 
CEO Bjørn Gulden added: “Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price. This is why we have only written off inventory that was either damaged or very broken in sizes.”
Last year, Adidas sold about 750 million euros worth of Yeezy merchandise and donated some of the profits to groups such as the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, a group run by the brother of George Floyd. 
It’s not clear if Adidas will donate any portion of the remaining Yeezy sales. The company said it has “no assumed profit contribution from Yeezy” in fiscal 2024.

The company declined to say whether it would donate any more of the proceeds this year.Don’t miss these stories from CNBC PRO: More

Biogen said it will discontinue the development and commercialization of its older and highly controversial Alzheimer’s drug Aduhelm to refocus its efforts to treat the memory-robbing disease. 
The biotech company will continue to roll out Leqembi, a newly approved Alzheimer’s drug it developed with Eisai, and work on a slate of experimental treatments for the disease
Biogen said its decision to drop Aduhelm was “not related to any safety or efficacy concerns.”

The Biogen headquarters in Cambridge, Massachusetts, on Oct. 24, 2023.
Vanessa Leroy | Bloomberg | Getty Images

Biogen on Wednesday said it will discontinue the sale and development of its older and highly controversial Alzheimer’s drug Aduhelm to refocus the company’s efforts to treat the memory-robbing disease. 
The biotech company will focus on rolling out Leqembi, a newly approved Alzheimer’s drug it developed with Japanese drugmaker Eisai. It also plans to work on a slate of experimental treatments for the disease. Those drugs represent a new chapter for the company after the polarizing launch and approval of Aduhelm. 

The U.S. Food and Drug Administration greenlit Aduhelm in 2021 under a program that fast-tracks promising treatments. But controversy shrouded the decision as some experts had concerns about whether the benefits of the drug outweighed its risks.
The federal Medicare program severely restricted access to Aduhelm, limiting its sales potential, and an 18-month congressional investigation would later allege that the FDA’s approval process for the drug was “rife with irregularities.” 
But Biogen noted on Wednesday that its decision to drop Aduhelm was “not related to any safety or efficacy concerns.”
The company said it will discontinue sales of the drug and has taken a one-time charge of $60 million for ending the Aduhelm program in the fourth quarter. 
Neurimmune, the Swiss company that invented the drug, will regain full rights to the medicine, according to Biogen.

Biogen is also terminating a post-approval clinical trial on Aduhelm after failing to find a partner or external financing for the drug. That study sought to prove the treatment’s benefits for patients in the early stages of Alzheimer’s disease.
The company said it will redistribute a large portion of the resources associated with Aduhelm to the rest of its Alzheimer’s drug portfolio.
Among the other Alzheimer’s drugs Biogen has in development is BIIB080, which targets a toxic protein called tau in the brain. That treatment has shown “favorable trends” across several measures of cognition and function in a small study.Don’t miss these stories from CNBC PRO: More

Walmart is planning to open more than 150 of its large-format stores over the next five years.
Some of the locations will be converted, but the majority will be new.
The company already has more than 4,600 stores across the U.S.

Walmart Inc. President and CEO Doug McMillon delivers a keynote address during CES 2024 at The Venetian Resort Las Vegas on January 9, 2024 in Las Vegas, Nevada.
Ethan Miller | Getty Images

Walmart already has a huge U.S. footprint. But the retail giant sees room to get even bigger.
The company plans to build or convert more than 150 large-format stores over the next five years, it said Wednesday. Some of the locations will be expanded from a smaller location into a Supercenter with a full range of groceries and merchandise, but the majority will be new stores, Josh Havens, a company spokesman, said.

Walmart declined to say how much the new stores will cost and where they will be located. The company already has more than 4,600 stores across the country, and nearly 600 Sam’s Club warehouses. Sam’s Club also is in expansion mode, with plans to open more than 30 new stores in the U.S.
The big-box retailer is the largest private employer in the U.S. with about 1.6 million employees. About 90% of the U.S. population already lives with 10 miles of a Walmart store. With the expansion, Walmart is signaling that it sees its brick-and-mortar locations as a key part of the future, despite heightened competition with online players like Amazon and Shein, and its own push for growth of online sales and its third-party marketplace.
Walmart is also building on its relative strength compared with other retailers, which have taken a bigger hit from U.S. consumers pulling back on discretionary merchandise. As the nation’s largest grocer by revenue and a well-known discounter, Walmart has better weathered inflation and even attracted more upper-income households to its stores.
Its stock hit an all-time high last year, and the company on Tuesday announced a 3-for-1 stock split.
In a post on the company’s website Wednesday, Walmart U.S. CEO John Furner said the retailer plans to start 12 new store projects this year and will convert one of its smaller locations into a Walmart Supercenter. The move to open or expand locations is in addition to the company’s plans to renovate other stores, he added.

Furner said the new stores will reflect Walmart’s more modern look, which it is rolling out more broadly. The “store of the future” design has a sleeker layout that emphasizes the retailer’s fashion-forward apparel brands, adds technology like scannable QR codes and features sharper signage.
New stores will also have more sustainability features, such as energy-efficient lighting, he said.
Walmart’s store expansion was first reported by The Wall Street Journal.
Don’t miss these stories from CNBC PRO: More