Finance

VanEck CEO Jan van Eck sees a major sentiment shift underway in the cryptocurrency market linked to the U.S. Securities and Exchange Commission’s approval of a rule change allowing for Ethereum exchange-traded funds.
“This is really one of the most amazing things that I’ve seen in my career with respect to securities regulation,” van Eck told CNBC’s “ETF Edge” this week. 

VanEck was the first to apply to the SEC for permission to list its proposed Ethereum ETF. With that first hurdle cleared, VanEck can begin the process of bringing the product to market, though the exact timeline is unclear.
“There was a real risk that the SEC was going to lose any kind of jurisdiction over digital assets. So the first reaction was to get the ETF, Ethereum ETF approval green lighted,” he said. “But I think there’s a bigger narrative going on as well.”
To van Eck, the buzz around Ethereum this May means clearer regulation on the horizon and an increased investor interest in crypto. In a statement on its website, his company said that “the evidence clearly shows that ETH is a decentralized commodity, not a security.”
Van Eck said the Financial Innovation and Technology for the 21st Century Act, or FIT21, passing in the House on May 8 was another major step toward regulatory clarity for cryptocurrencies, even though he is doubtful it will make it to the Senate before the election.
Ether spiked on the SEC’s approval of applications to list Ethereum ETFs on May 23, but is virtually flat since then.
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Tourists line a street in Venice, Italy, on Saturday, March 16, 2024. Venice collected €37 million in overnight tourist taxes in 2023, with hotels charging guests anywhere between €1 and €5. 
Nathan Laine | Bloomberg | Getty Images

Bellagio, Lake Como, Italy — When boat drivers start complaining about the tourists overrunning this famous lakeside resort, where Taylor Swift and Travis Kelce stayed at the Villa Sola Cabiati in Tremezzo two weeks ago after her series of Paris concerts, you know you have a problem. 
“There are days when traffic comes to a stop, you cannot move,” our driver told us. He makes his living driving tourists up and down the lake for the famous views of the mountains and the 19th-century villas like Villa del Balbianello, where parts of “Casino Royale” and “Star Wars: Episode II” were filmed. 

He considers himself fortunate he’s a boat driver: he pities the poor tourists who rent cars or try to find an elusive taxi. 
“Some days it can take an hour to go 10 kilometers [about 6 miles],” he said, noting that the tiny two-lane roads not only can’t handle the traffic, they can’t handle the larger cars that are being built. “Many towns can only have traffic go in one direction, so everyone has to wait,” he said. 
Can’t live with them, can’t live without them
Italy is caught in an envious trap: it can’t live without tourists, but it’s having trouble handling the influx, particularly after Covid. Sixty million tourists flooded the country last year, pumping an enormous amount of money into the economy. Travel and tourism accounted for 10.2% of Italy’s GDP in 2022, according to Statista.  The sector employs approximately 4.4 million people, about 16% of total employment. 

A general picture shows the main facade of the Pantheon in Piazza della Rotonda on March 30, 2024 in Rome, Italy.
Emanuele Cremaschi | Getty Images

The problem of “too many tourists” may seem like a problem a country wants to have, but in recent years the crush of visitors has gotten so bad that Italian authorities have had to take measures to avoid damage to centuries old structures that cannot handle the crush of so many visitors. Venice has been charging 5 euros to enter the city for day travelers not staying overnight, for example. 
Want to see Da Vinci’s “Last Supper” in Milan? Good luck: tickets are sold out weeks in advance, and to avoid irreparable damage to the painting visitors are restricted to roughly 30 at a time for a maximum of 15 minutes. 

Not only are there too many tourists, there’s not enough people to serve them. 
The Italian Association of Employment Agencies (Assolavoro) noted there is a shortage of staff to work in the hotel and beach sectors this summer, which is expected to see a new record for tourists. There’s shortages of chefs and waiters in Marche. In Sardinia, about 25,000 seasonal workers are needed. 
Italy a bargain? Not quite, but there is a lot of value 
Food is still surprisingly affordable, at least compared to New York prices. An espresso in Milan, an hour away, can be had for 1 euro (about $1.10). Croissants for two or three euros. 
At the famous Trattoria Milanese in the center of Milan, a generous serving of the city’s two most famous dishes — veal Milanese, and osso bucco with risotto Milanese, will only set you back about $30-$35 apiece, and can be had much cheaper in less famous spots. Outstanding local wines can be bought for $20-$30 in restaurants and $10 in the supermarket. 
Even Milan’s famous bars are not stratospheric. At Camparino in the Galleria, one of the temples of cocktail culture in Italy, you can have a negroni or Aperol spritz for $20, prepared by ridiculously good-looking 25 year old waiters in formal wear preening for the uber-dressed-up crowd strolling past, heading for a night of opera at La Scala. 
The crush of visitors means reservations are tough to get. Here on Lake Como, it’s still nearly impossible to get a reservation at the Veranda restaurant at one of George Clooney’s favorite spots, Villa D’Este (if you’re lucky to snag one, be sure to show up: no-shows are charged 100 euros per person). 
Clooney himself lives up the street, at Villa Oleandra, which was featured in his film, “Ocean’s Twelve.” 
Of course, if you really want to hang out with A-list, there are no bargains. The famous Villa La Cassinella on the lake can be yours, for 100,000 euros a week. A wedding at Villa Balbiano can cost 320,000 euros, but we’re talking 110 people for 3 days. The same 110 wedding guests will set you back 250,00-500,000 euros at the Grand Hotel Tremezzo. 
Thinking of calling Uber? Forget it
It’s not only hard to get a reservation: it’s hard to get a taxi to get there. Or anywhere. 
Sharing the phone numbers of reliable private taxi drivers is a bit of an obsession in Lake Como, where the roads are so narrow and crowded, and taxis few and far between, that even short trips must be booked in advance. 
It was so hard to get around, even in Milan, that I just hired the cab driver who picked us up at the airport for two days. I was puzzled that the only Uber options were high-priced black cars.
My driver flew into a rage when I mentioned Uber. 
“These people are trying to steal the jobs of the taxi drivers,” he screamed. “They are taking my job. The politicians have been paid to allow them into the country.” He was planning to go on strike next week, along with the other taxi drivers. 
He doesn’t have much to worry about. 
“The Uber service you are familiar with in North America where private individuals drive their own cars is illegal in Italy since 2015,” travel writer Rick Steves said in a note to his readers last year. 
“Only licensed taxi and limo drivers can provide that service. As a result Uber does provide a service in Italy (called Uber Black, Uber Van) but when you summon a car with Uber, a licensed official black limo driver with a luxury car will show up and as a result the price will be higher than a regular taxi,” Steves advised. 
A lot higher. Uber wanted 100 euros to take me less than a mile, a 10-minute ride, in central Milan. I paid the cab driver 170 euros for five hours. 
Still, standing in front of the “Last Supper,” even for 15 minutes, provides one of those sublime experiences that makes the hassle worthwhile. 
I was glad it only lasted 15 minutes. I had to get out to call the restaurant we were going to that night for a reservation, and make sure I had a cab to get there. Being a tourist in Italy is turning into a full-time job. More

For three weeks, 85,000 Yotta customers with a combined $112 million in savings have been locked out of their accounts, CEO and co-founder Adam Moelis told CNBC.
The disruption, caused by a dispute between fintech middleman Synapse and Tennessee-based Evolve Bank & Trust, has upended lives, Moelis said.
“We never imagined a scenario like this could play out and that no regulator would step in and help,” he said.

Oscar Wong | Moment | Getty Images

When Adam Moelis co-founded a fintech startup named Yotta in 2019, he wanted to give Americans a new way to save money to help them cushion the ups and downs of life.
Instead, his company has inadvertently been a source of deep pain for thousands of customers who relied on Yotta accounts to receive paychecks, pay bills and save for emergencies.

The crisis began May 11, when a dispute between two of Yotta’s banking partners — fintech middleman Synapse and Tennessee-based Evolve Bank & Trust — led to the lockup of accounts at Yotta and at least two dozen other startups. Synapse declared bankruptcy earlier this year after several key clients abandoned the firm amid disagreements over the tracking of customer funds.
For the past three weeks, 85,000 Yotta customers with a combined $112 million in savings have been locked out of their accounts, Moelis told CNBC. The disruption had upended lives, forced users to borrow money for food and thrown upcoming events like surgeries or weddings into doubt, he said.
“The stories are heartbreaking,” Moelis said. “We never imagined something like this could happen. We worked with banks that are members of the FDIC. We never imagined a scenario like this could play out and that no regulator would step in and help.”

Boom & bust

The ongoing mess has exposed the risks in a corner of fintech that grew in prominence during a boom in venture investment — and it will likely reverberate for years as regulators increase scrutiny of the space.
The so-called “banking as a service” model allowed consumer fintech companies to quickly launch savings accounts and debit services, with firms like Synapse acting as a bridge between the startups and FDIC-backed banks that ultimately held deposits.

The heart of the dispute between Synapse and Evolve Bank involves a foundational function of finance: keeping accurate ledgers of transactions and balances. Synapse and Evolve disagree on how much of Yotta’s funds are held at Evolve, and how much are held at other banks that Synapse worked with.
Synapse hasn’t responded to requests for comment, and Evolve has blamed Synapse for the breakdown.
The Synapse bankruptcy has mostly ensnared lesser-known consumer fintech firms, especially after larger fintech players including Mercury and Dave fled the Synapse platform in the past year.
That has left Yotta, which encouraged users to save money with free weekly lottery-style sweepstakes, as one of the largest companies to be affected. Accounts at crypto firm Juno and at Copper, which offered savings accounts for families and teens, also have been frozen.

Non-systemic meltdown

Moelis, who has been in contact with other fintech principals impacted by the Synapse failure, estimates that at least 200,000 total customer accounts with balances are locked. While Synapse has said in court filings it has 10 million end users, it’s likely that active accounts are far smaller, Moelis said.

Adam Moelis, Co-Founder at Yotta Savings.
Courtesy: Yotta

The fintech co-founder said he believes the relatively limited scope of the issue, and the fact that most of those affected aren’t wealthy, has given regulators clearance to let the situation play out. Last year, regulators swiftly intervened in the regional banking crisis that threatened uninsured deposits of startups and rich families, he noted.
“To me, if this was happening at a larger scale, I think regulators would have done something by now,” he said. “We’ve got real, everyday Americans that aren’t necessarily wealthy and don’t have the ability to lobby that are being impacted.”
The Federal Reserve and the Federal Deposit Insurance Corp. have declined to comment on the issue. Representatives of the agencies have pointed to efforts they’ve made to encourage banks to manage the risks of using fintech partners.

‘Money doesn’t just disappear’

But developments in the California bankruptcy court overseeing the Synapse failure give Moelis hope that at least some relief — a partial release of funds, perhaps — may be coming.
Last week, former FDIC Chair Jelena McWilliams was named trustee over Synapse. Her job is to develop a plan to maintain Synapse systems and craft a solution “that allows funds to be returned to end users, to the rightful owners of those funds, as soon as humanly possible,” said Judge Martin Barash.
For his part, Moelis said he doesn’t side with either Evolve or Synapse in their dispute — he just wants the situation resolved.
“I don’t know who’s right or who’s wrong,” he said. “We know how much money came into the system, and we are certain that that’s the correct number. The money doesn’t just disappear; it has to be somewhere.”

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More companies are adopting “skills-based hiring.”
They place more importance on candidates’ competencies than traditional filters, such as educational attainment and years of experience.
Developing and demonstrating the skills laid out in job ads are key for job seekers.

Azmanjaka | E+ | Getty Images

Many companies are pivoting to a new form of hiring that emphasizes applicants’ skills over more traditional metrics, such as education or years of experience, according to recent reports and data.
The share of U.S. online job postings that list a specific requirement for employment tenure has fallen by 10 percentage points, to 30%, in the two years through April 2024, according to data from job site Indeed.

Additionally, most job ads, or 52%, don’t have a formal education requirement, up from 48% in 2019, Indeed found. The data from Indeed says that mentions of college degrees have fallen in 87% of occupational groups over that time.

A recent ZipRecruiter survey of 2,000 employers also shows a shift toward so-called skills-based hiring, which prioritizes “competencies” over traditional credentials. Nearly half, or 45%, of employers scrapped degree requirements for some roles in the past year, and 72% now prioritize skills over certificates in job candidates, according to the ZipRecruiter survey.
The trend, which prioritizes a candidate’s practical skills and real-world experience over formal education, appears to be “gaining momentum,” according to ZipRecruiter.
Meanwhile, hiring managers are being more explicit in job ads about the specific skills they seek in applicants, said Cory Stahle, an economist at the job site Indeed.
“We definitely see a change in the way the interview and hiring process works,” Stahle said.

Skills-based hiring is a ‘win-win’

The demand for workers surged to a record high when the U.S. economy reopened in 2021 after early pandemic-era lockdowns. Businesses struggled to fill jobs amid scarce talent and high competition for workers.
That hiring “pressure” led employers to drop college degree requirements, a filter that “disqualifies” about 62% of Americans who lack a degree, according to a recent joint study from the Harvard Business School and the Burning Glass Institute.
Additionally, companies have put more focus on workplace equity, the report said.
More than 70% of Black, Hispanic and rural workers don’t have four-year degrees — and may have valuable skills overlooked due to the “paper ceiling,” according to Randstad USA, a staffing agency.
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While traditional measures of job fit, such as schooling, will likely remain important for surgeons and other professions, many employers realize such qualifications aren’t always a good proxy for job fit, Indeed’s Stahle said.
Job seekers benefit via new career opportunities that may not have been previously available, he added.
There are also tangible, measurable “win-win” outcomes of skills-based hiring for businesses and workers, such as higher retention rates among workers without college degrees and large average salary increases for such candidates, according to the Harvard-Burning Glass study.

That said, there are some limitations, like entrenched behavior among hiring managers.
For example, about 45% of firms “seem to make a change in name only, with no meaningful difference in actual hiring behavior following their removal of stated requirements from their postings,” the Harvard-Burning Glass report said.
“Change is hard” for employers, it added.

What this means for job seekers

“If the [job ad’s] focus is on skills, the focus of your resume should be on skills as well,” Stahle said.
While skills should be “prominent” in such cases, that doesn’t mean applicants should forgo traditional information, Stahle added.

They’d still want to give an accurate representation of their work history and education, since an applicant’s resume may still be reviewed by a hiring manager who values such qualifications, he said.
It’s not just the resume, though: Job candidates should be prepared for prospective employers to administer some sort of skills test during the hiring process, though the practice varies from company to company, he added.
Developing and demonstrating the identified skills are the two primary keys for job seekers, he said.

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Annual 401(k) plan contribution limits and federal income tax brackets get an inflation adjustment each year.
However, many common financial mechanisms like the minimum wage aren’t indexed to inflation.
Others include financial thresholds tied to taxes on Social Security benefits, accredited investors and certain tax deductions.

Martin Barraud | Ojo Images | Getty Images

Many Americans are likely familiar with financial thresholds that are adjusted for inflation each year.
They include contribution limits to 401(k) plans, cost-of-living adjustments for Social Security benefits and federal income tax brackets, to name a few.

These tweaks help households keep pace with the rising cost of living.
For example, without adjustments, more households would generally creep into higher tax brackets over time and the buying power of Social Security beneficiaries would fall.
But some thresholds, like the federal minimum wage, aren’t inflation-adjusted.
What is and isn’t inflation-indexed largely depends on lawmakers’ whims when they drafted respective legislation, said Bill Hoagland, senior vice president at the Bipartisan Policy Center. “It’s all over the map,” he said.
Inflation adjustments can be a “double-edged sword,” said Mark Zandi, chief economist at Moody’s Analytics.

During times of high inflation as in 2022, the lack of an adjustment “could quickly become a financial problem” for households, Zandi said.
If everything were indexed, however, it’d be more difficult “to get inflation back in the bottle when everything takes off,” he added.
Here are some common thresholds that don’t get an annual inflation adjustment.

Minimum wage

The federal minimum wage — $7.25 an hour — has remained unchanged since 2009.
That’s the longest period in history without an increase from Congress, according to the Economic Policy Institute, a left-leaning think tank.
The minimum wage has lost 29% of its value since 2009 after accounting for the rising cost of living, according to an EPI analysis. It’s worth less than at any point since February 1956, the group found.

That said, just 1.3% of all U.S. hourly workers (about 1 million people total) were paid wages at or below the federal minimum in 2022, according to the Bureau of Labor Statistics. That’s “well below” the 13.4% share in 1979, it said.
Thirty states plus the District of Columbia have adopted a higher minimum for workers. In addition, 58 localities have raised their minimum above their state’s, according to the EPI.
The minimum wage is indexed for inflation in 19 of the states plus D.C., the EPI said.

Social Security taxes

The federal government began taxing Social Security benefits in 1984.
Social Security benefits are taxed at the federal level once beneficiaries’ income exceeds certain dollar levels. Up to 85% of their benefits may be taxable. (This is explained in more detail below.)
The dollar thresholds aren’t inflation-adjusted and Congress has never changed them.
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However, since Americans’ benefits and other income have increased, the share of beneficiaries who pay federal income tax on their benefits has risen over time, according to the Social Security Administration.
Less than 10% of families paid federal income tax on their benefits in 1984.
The share has increased significantly: The SSA estimates about 40% of people who get Social Security must pay federal income taxes on their benefits.
The federal government uses a specific income formula to gauge if benefits are taxable. This “combined income” formula is: adjusted gross income + nontaxable interest + half of your Social Security benefits.
For example, single tax filers would pay tax on up to 50% of their benefits if their combined income is between $25,000 and $34,000. Up to 85% may be taxable if income exceeds $34,000.
Married couples filing jointly would pay tax on up to 50% of their benefits if their combined income is between $32,000 and $44,000. Up to 85% may be taxable if income exceeds $44,000.

Investments for the wealthy

Americans must generally be “accredited” to invest in private companies and investments like private equity and hedge funds.
To qualify, households must meet certain requirements, like a minimum net worth or annual income.
It’s a consumer protection issue: The thresholds aim to ensure buyers are financially sophisticated and can sustain the risk of loss from private investments, according to the Securities and Exchange Commission.

Individuals can generally become accredited by having a $200,000 annual earned income, or $300,000 for married couples. Individuals or couples can also qualify with a total $1 million net worth, not including the value of their primary residence.
However, those dollar thresholds haven’t changed since their creation in the early 1980s.
In 1983, just 1.5 million households — 1.8% — qualified as accredited investors, according to SEC data.
More than 24 million U.S. households — about 18.5% of them — qualified in 2022, the agency said in a December report.

Tax deductions for homeowners

Many common tax breaks, like the standard deduction, get an annual inflation adjustment.
But others don’t. A tax deduction for home mortgage interest is one example.
A 2017 tax law signed by President Donald Trump limited the deduction for home mortgage interest to the first $750,000 of new mortgage debt. The cap had previously been $1 million. (Neither of these are pegged to inflation.)
In 2026, that threshold will revert to $1 million absent congressional action.
There are now a record number of U.S. cities where the “typical” home is worth $1 million or more, according to a recent study by Zillow.

Net investment income tax

Certain taxpayers must pay a 3.8% surtax on their investment income.
This “net investment income tax,” also known as the Medicare surtax, generally applies if modified adjusted gross income exceeds $200,000 for single tax filers or $250,000 for married joint filers.
The tax is mostly paid by high-income households by design, according to the Congressional Research Service.
However, since the dollar thresholds aren’t inflation-indexed, “more taxpayers become subject to the tax over time regardless of whether their real (inflation-adjusted) income has increased, or increased significantly,” the CRS wrote.

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Bill Ackman’s firm is raising $1.05 billion in a funding round, worth 10% of his management company Pershing Square, according to a source familiar with the matter.
The hedge-fund manager is eyeing an initial public offering in the U.S. down the road, but he hasn’t hired bankers or started that process officially yet, the source said.

Bill Ackman, Pershing Square Capital Management CEO, speaking at the Delivering Alpha conference in New York City on Sept. 28, 2023.
Adam Jeffery | CNBC

Billionaire investor Bill Ackman is selling a 10% stake in Pershing Square, aiming to eventually take his investment firm public.
Ackman’s firm is raising $1.05 billion in a funding round, worth 10% of the management company and implying a valuation of $10.5 billion, according to a source familiar with the matter. Investors on the deal are institutional and family offices who prefer to remain anonymous, the source said.

The Wall Street Journal first reported on the moves. Pershing Square declined to comment.
With the funding round, the hedge-fund manager is eyeing an eventual initial public offering in the U.S., but he hasn’t hired bankers or started that process officially yet, the source said.
Two years ago, Ackman named Ryan Israel chief investment officer, marking the first time the billionaire hedge-fund manager appointed someone else to run day-to-day investing for the firm. Ackman serves as CEO, with ultimate control over decision-making, although he has said that Israel would be his successor to run the firm if he got hit by a “pie truck.”
Pershing Square had $18.6 billion in total assets under management as of the end of April. Most of its capital is in Pershing Square Holdings, a closed-end fund that trades on European stock exchanges. 
Ackman has become one of the world’s most prominent hedge fund investors after years of market-topping returns and vocal activist campaigns. He also gained a wide following on social media platform X with 1.2 million followers, commenting on issues ranging from antisemitism to the presidential election.

Earlier this year, Ackman unveiled plans to offer a new investment vehicle listed on the New York Stock Exchange, a move to leverage his following among Main Street investors. He is launching a publicly-traded closed end fund, investing in 12 to 24 large-cap, investment grade, “durable growth” companies in North America.
The popular investor’s hedge fund held only six stocks at the end of March including Alphabet, Chipotle Mexican Grill and Hilton Hotels. It posted a 26.7% gain last year.
In 2022, Ackman quit activist short selling, a practice he engaged in that led to one of the most colorful battles in Wall Street history against Herbalife.

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The Viva Technology conference in Paris last week was buzzing with talk about how far France has come as a leader in AI.
A great deal of chatter surrounded French AI firm H, which raised $220 million in a seed funding round from investors including U.S. e-commerce giant Amazon.
A common theme was the boost France’s AI scene has gotten from U.S. tech firms, with Microsoft and Amazon investing billions into the country.

French President Emmanuel Macron speaks during a meeting with members of the AI sector at the Elysee Presidential Palace in Paris, France, on May 21, 2024.
Yoan Valat | Afp | Getty Images

PARIS — France is touting itself as the next artificial intelligence superpower.
The Viva Technology conference in Paris last week was buzzing with talk about how far France has come as a leader in AI.

A great deal of chatter surrounded the French AI firm H, previously named Holistic, which raised $220 million in a seed funding round from investors including U.S. tech giant Amazon and Google’s billionaire ex-CEO Eric Schmidt.
A common theme for French AI firms receiving large sums of money is that they’re adding U.S. tech heavyweights to their shareholder lists.

Earlier this month, France received a flood of new private investments, led by a commitment from Microsoft of 4 billion euros ($4.4 billion), its largest ever into France.

AI everywhere at Viva Tech

At Viva Tech, AI was everywhere. Past the large, bright pink “VIVA” sign toward the front, there was an entire alley called “AI Avenue,” which was surrounded by U.S. tech firms such as Salesforce and AWS.
Generative AI was on display everywhere — even from companies you wouldn’t expect.

For example, French beauty giant L’Oreal showed off an AI-powered beauty assistant called “BeautyGenius” at a large booth near the center of the Porte de Versailles conference venue.
The success of Viva Tech has become symbolically important for France as part of its bid to become a leading tech and AI hub that can rival the likes of the U.S. and China.
“France is the leader on artificial intelligence in Europe,” Bruno Le Maire, France’s finance minister, told CNBC’s Arjun Kharpal at Viva Tech last week.

He made clear that, while France has a helping hand from U.S. tech giants, “we want to have our own artificial intelligence being created and being developed in France.”
Referring to Microsoft’s investment in France, Le Maire said, “Microsoft is much welcome in our country. But the challenge for us is to have our own devices, our own scientists … and we are working very hard for that.”
France boasts a strong AI research and development ecosystem, home to key facilities like the Facebook AI Research center from Meta and Google’s AI research hub in Paris, as well as leading universities.
“France stands as one of Europe’s most vibrant innovation hubs,” Etienne Grass, the France managing director of Capgemini Invent, the digital innovation arm of Capgemini, told CNBC. “The nation nurtures a thriving startup scene, marked by significant strides in AI,” Grass added.
Imran Ghory, partner at Blossom Capital, said that while France has a great track record when it comes to research and academia, it has struggled to funnel quality talent into “great companies.”
AI labs from Meta and Google have “created a training ground for students and researchers to learn what leading tech companies look and work like from the inside,” Ghory said.

“We’re now seeing the fruits of this as many researchers and AI engineers begin spinning out their own companies.”

Vying for tech leadership

French President Emmanuel Macron told CNBC’s Andrew Ross Sorkin in an interview last week that his country is “leading the tech industry in Europe.” However, he noted Europe is “lagging behind” the U.S. and that the continent needs more “big players.”
“It’s insane to have a world where the big giants just come from China and the U.S,” Macron told said at the Elysee Palace. He praised Mistral, the French AI firm backed by U.S. tech giant Microsoft, and H.
Last week, Macron met with Eric Schmidt, former CEO of Google, Yann LeCun, chief AI scientist of Meta, and James Manyika, Google’s senior vice president of tech and society, among others, at the Elysee to discuss ways to make Paris a global AI hub.
Maurice Levy, CEO of advertising and public relations giant Publicis Groupe, told CNBC’s Karen Tso he thinks France has the potential to become a top five country for AI development. Levy said France is “determined” to narrow the gap between the U.S. and China and Europe when it comes to AI.
France “can be part of the five biggest countries on AI in the world,” after the U.S., China, Israel, and the U.K., Levy said in a TV interview last week. He referred to H’s mammoth funding round as an example of the momentum surrounding French AI right now.

Levy said roughly 40% of the tech demos at Viva Tech were AI. AI is “something which is … not only taking off, but has already taken off quite massively,” he said.
In a fireside discussion last week, Google’s Manyika said a lot of the innovation the firm has been bringing to the table is sourced from engineers in France.
He said that Google’s recently introduced Gemma AI, a lightweight, open-source model, was developed heavily at the U.S. internet giant’s Paris AI hub.
According to data from Dealroom, France claimed a roughly 20% share of overall European AI startup funding in 2023, higher than the 15% average of European funding that goes into AI startups across the bloc.
France isn’t the European AI leader, though, according to Dealroom, with U.K. firms raising more than double the amount of both AI and GenAI investment than France.

Innovation versus regulation

France’s Macron said the challenge for Europe is accelerating AI research and development while also regulating at “appropriate scale.”

Last week, the EU approved the AI Act, a landmark law regulating artificial intelligence.
Some tech executives warned Europe could hamper its AI ambitions with regulation that is too restrictive. France has been among the countries to have criticized the EU AI Act for being too restrictive when it comes to innovation.
Pascal Brier, Capgemini’s chief innovation officer, said while regulation is needed to ensure AI isn’t left to become too powerful, it’s important to ensure new laws like the AI Act don’t accidentally “kill” innovation.
He said regulators should avoid implementing the “principle of precaution” — the idea that AI makers should avoid doing things that can do harm, as a rule.
“There’s no way you can stop AI — it’s only the end of the beginning,” Brier told CNBC. “It’s not going to stop there.” More

Whether it’s households or small- to medium-sized businesses, Bank of America clients are slowing down the rate of purchases made for everything from hard goods to software, the bank’s CEO Brian Moynihan said.
Consumer spending via card payments, checks and ATM withdrawals has grown about 3.5% this year to roughly $4 trillion, Moynihan said.
That’s a sharp slowdown from the nearly 10% growth rate seen in May 2023, he said.

Bank of America Chairman and CEO Brian Thomas Moynihan speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, U.S., December 6, 2023. 
Evelyn Hockstein | Reuters

U.S. consumers and businesses alike have turned cautious about spending this year because of elevated inflation and interest rates, according to Bank of America CEO Brian Moynihan.
Whether it’s households or small- to medium-sized businesses, Bank of America clients are slowing down the rate of purchases made for everything from hard goods to software, Moynihan said Thursday at a financial conference held in New York.

Consumer spending via card payments, checks and ATM withdrawals has grown about 3.5% this year to roughly $4 trillion, Moynihan said. That’s a sharp slowdown from the nearly 10% growth rate seen in May 2023, he said.
“Both of our customer bases that have a lot to do with how the American economy runs are saying, ‘You know what? I’m being careful, slowing things down,'” Moynihan said, referring to consumers and businesses.
The slowdown began last summer and is consistent with the “very low growth” environment of the period from 2016 through 2018, he said.
Nearly a year after the last Federal Reserve rate increase, consumers and businesses are wrestling with inflation and borrowing costs that remain higher than they are accustomed to. The Fed began efforts to tame inflation by hiking its benchmark rate starting in March 2022, hoping it could slow the economy without tipping it into recession.
Many economists believe the Fed is on track to pull off that feat, which has helped the stock market reach new highs this year. But consumers are still grappling with higher prices for goods and services, and that has impacted U.S. companies from McDonald’s to discount retailers as Americans adjust their behavior.

Food shoppers are hitting up more store locations in search of deals, according to Moynihan. “They’re going to three grocery stores instead of two, is one of the stats we see,” he said.
The now-tepid growth in overall spending is being propped up by travel and entertainment, while “other things have moderated, except for insurance payments,” Moynihan said. Growth in rent payments has slowed, he noted.
“We’ve got to keep the consumer in the game in the U.S. economy, because [they’re] such a big part of it,” Moynihan said. “They’re getting a little more tenuous, and that is due to everything going on around them.”
The same is true for small- and medium-sized businesses, the Bank of America CEO said. His company is the second-largest U.S. bank by assets, after JPMorgan Chase. Moynihan and other bank CEOs have a bird’s-eye view of the economy, given their coast-to-coast coverage of households and companies.
Business owners are saying, “‘I still feel good about my overall business, but I’m not hiring as much. I’m not buying equipment as fast. I’m not making software purchases as fast,'” Moynihan said.
The bank’s economists believe that inflation will take until the end of next year to get under control and that the Fed will begin cutting interest rates later this year, Moynihan said. The U.S. economy will probably grow at around a 2% level, avoiding recession, he added.

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