📖 The AI Act

…and a TikTok ban could hurt Big Tech ad sales And now they’ll be talking about the AI Act, too (Snacks) [Sponsored by]( Last Week's Market Moves Dow Jones 38,715 (-0.02%) S&P 500 5,117 (-0.13%) Nasdaq 15,973 (-0.70%) Bitcoin $68,247 (-0.06%) Dow Jones 38,715 (-0.02%) S&P 500 5,117 (-0.13%) Nasdaq 15,973 (-0.70%) Bitcoin $68,247 (-0.06%) Hey Snackers, One of life’s small delights: when the plane’s finished boarding and the seat next to you is still empty. [Frontier Airlines]( is turning this lucky pleasure into a monetizable product. The budget carrier is letting passengers [pay]( extra to sit next to an empty middle seat. What’s next, charging for armrest rights? Stocks cooled last week as two inflation reports came in hotter than anticipated. Still, the Fed’s expected to keep interest rates steady at its meeting this week as it eyes potential cuts this summer. Investors (who are #obsessed with the timing of rate cuts) will be dissecting Fed Chair Powell’s conference on Wednesday for any clues.   ENACT [The EU passes the world’s first major AI regulation, creating a framework for Big Tech]( New rulebook… The EU [approved]( the first-ever comprehensive AI law to place guardrails around the explosive tech. The landmark law is set to go into effect in May. The EU’s effort to pass AI rules started three years ago (pre-ChatGPT era). The legislation separates tech into risk categories, ranging from “unacceptable” (aka: fully banned) to low risk. Companies that break the rules, including US tech giants, can be fined up to 7% of their annual revenue. - Immediately no: The act bans AI applications that impinge on citizens’ rights. Think: facial-recognition databases trained on photos from the internet or CCTV, and emotion-recognition software in the workplace. - Copywrong: AI-generated content will have to be labeled as such to prevent misinfo from deep fakes, and AI models must comply with European copyright laws. Companies like [Microsoft]( and OpenAI are dealing with huge copyright-infringement suits. Pandora’s box… The AI Act comes as governments try to reel in the fast-expanding technology. Over a third of EU companies have adopted some form of AI, and 27% of Americans said they interacted with AI several times a day last year (picture: asking Dall-E to cut your ex from a pic). Leading players like Microsoft, OpenAI, and [Meta]( have lobbied to help shape the rules. Past EU tech regulations have had significant effects on US tech companies: - The EU’s Digital Markets Act (DMA) gives the union sweeping powers to govern anticompetitive tech practices. This month, the EU slapped [Apple]( with a $2B fine, saying the biz suppressed music-streaming competition. - Europe’s GDPR dictates how Big Tech cos handle user data (like: cookie-consent pop-ups). California introduced a similar privacy act shortly after GDPR passed. THE TAKEAWAY One model can generate big changes… To avoid patchwork policies when one major market passes new rules, big companies can make sweeping changes. When GDPR forced Microsoft to up its privacy game in the EU, the biz pushed many of those new protections to its global customers. Under the DMA, Apple announced it would allow different app stores on iPhones in Europe for the first time. The AI Act could ignite changes far beyond Europe.   SPONSORED BY NASDAQ When Main Street calls, the market answers. Trades are ticking. When self-directed retail traders move as a pack, they can drive the market. Investors of all shapes and sizes need [insights on this kind of trading activity]( — but until recently, many traders haven’t had a way to visualize the key retail details of the stock market. Trading data, distilled. Nasdaq Data Link’s [Retail Trading Activity Tracker]( beats up on analysis paralysis. Covering $30B USD/day of retail trades across 9,500+ US stocks, ADRs and ETPs, Nasdaq’s tracker does the hard work with its proprietary algorithm. Then, it streams data directly to your spreadsheet and distills vast retail trading data into sharp insights that any investor can use. Expand your market view with the [Retail Trading Activity Tracker from Nasdaq](. SPONSORED BY NASDAQ When Main Street calls, the market answers. Trades are ticking. When self-directed retail traders move as a pack, they can drive the market. Investors of all shapes and sizes need [insights on this kind of trading activity]( — but until recently, many traders haven’t had a way to visualize the key retail details of the stock market. Trading data, distilled. Nasdaq Data Link’s [Retail Trading Activity Tracker]( beats up on analysis paralysis. Covering $30B USD/day of retail trades across 9,500+ US stocks, ADRs and ETPs, Nasdaq’s tracker does the hard work with its proprietary algorithm. Then, it streams data directly to your spreadsheet and distills vast retail trading data into sharp insights that any investor can use. Expand your market view with the [Retail Trading Activity Tracker from Nasdaq](.   ZOOM OUT Stories we’re watching... Boeing, Boeing, gone… [Boeing](’s very bad year keeps getting worse — and it’s causing headaches for airlines. After January’s doorbacle (recall: a plug door yeeted off a 737 Max mid-flight), the FAA paused certification for Boeing’s newest 737, the Max 10. [Delta]( expects deliveries could be delayed till 2027. Last week, [Southwest]( (which only uses 737s) slashed its flight schedules. And [United]( asked Boeing to stop building the Max 10s it ordered. Rival [Airbus]( is widening its jet-delivering lead as Boeing faces intense FAA scrutiny and a DOJ criminal investigation. Tippin’ the Gray-scales… It’s rare to see a multibillion-dollar bet go so wrong so quickly. At the start of the year, Digital Currency Group’s Grayscale Bitcoin Trust had $28B+ under management and promised to convert to a spot [bitcoin]( ETF as soon as it got the SEC’s OK. But with comparatively high fees (1.5% versus competitors’ 0.3%), customers have pulled out $11B since regulators’ January approval. In that same period, [BlackRock](’s bitcoin fund saw $10B+ in inflows. Now, Grayscale is launching a “mini” ETF with lower fees.   EVENTS Coming up this week... Ad-verse effects… The US House passed a bill last week that could lead to a nationwide TikTok ban. While TikTok’s making all the headlines, the legislation also threatens all Chinese-controlled apps — including those from two companies reporting this week: retailer Temu’s parent, Pinduoduo, and mobile-gaming titan [Tencent](. Chinese app bans could spell trouble for ad biggies. China made up 10% of [Meta](’s revenue last year, and Temu was Meta’s top advertiser. Scanning the App Store, Temu is the No. 2 free app (Chinese Shein is No. 1) and Tencent’s “PUBG Mobile” is the No. 2 strategy game. Bracket ball... As the NCAA March Madness basketball tourney gets underway this week, networks like [Paramount](, [Disney](, and [Warner Bros.]( are hoping to run back last year’s women’s final when 10M fans watching Iowa’s Caitlin Clark and LSU’s Angel Reese shattered a 20-year viewership record. As folks fill out their brackets based on mascot (or some other method), sportsbooks could score: sports betting became legal in college-bball mecca North Carolina last week, and $2.7B+ is expected to be wagered on apps like [Penn Entertainment’](s ESPN Bet and [DraftKings](’ Sportsbook.   SPONSORED BY MASTERWORKS Which platform delivered millions to investors in 2023? Masterworks is an award-winning investment platform focused exclusively on [investments in blue-chip art](. So far, each of its 21 exits have delivered a profit, with investors realizing median returns of 17.6%, 17.8%, and 21.5%* (respectively) among assets held for longer than one year. [Skip the waitlist here](. SPONSORED BY MASTERWORKS Which platform delivered millions to investors in 2023? Masterworks is an award-winning investment platform focused exclusively on [investments in blue-chip art](. So far, each of its 21 exits have delivered a profit, with investors realizing median returns of 17.6%, 17.8%, and 21.5%* (respectively) among assets held for longer than one year. [Skip the waitlist here](.   What else we’re Snackin’ - [Nozempic]( : US and UK authorities are seizing Ozempic knockoffs, which range from ineffective to life-threatening. The pricey drug is one of several diabetes meds in hot demand for weight-loss purposes. - [TokOff](: In a move that likely won’t help TikTok disassociate from China, the Chinese gov’t attacked the House’s vote on a bill that could ban the app and said it would take “necessary measures” to protect it. - [Payslip](: From 2018 to 2022, 35 major US companies (including: [Tesla](, [Netflix]() paid their top execs more $$ than they paid in federal taxes, a new report said. CEOs earned 344X more than a typical worker in 2022.   Snack Fact Of the Day Last year, dividend payouts to shareholders reached a record $1.7T [Read more](   This Week - Monday: Global Recycling Day. Global Money Week. Earnings expected from Science Applications International - Tuesday: First day of spring. NCAA men’s March Madness tournament starts. - Wednesday: US Fed interest-rate decision. NCAA women’s March Madness tournament starts. Earnings expected from Micron Technology, Chewy, General Mills, Pinduoduo, Signet Jewelers, and KB Home - Thursday: World Poetry Day. Earnings expected from Accenture, Darden Restaurants, Nike, Lululemon, and FedEx - Friday: World Water Day. F1 Australian Grand Prix weekend begins. Authors of this Snacks own bitcoin and shares of: Alphabet, Apple, Delta, Disney, Microsoft, and Tesla *Advertiser's disclosure: The content is not intended to provide legal, tax, or investment advice. Past performance is not indicative of future returns. Investing involves risk. “Net Annualized Return” refers to the annualized internal rate of return, or IRR, net of all fees and costs, to holders of Class A shares from the primary offering, calculated from the final closing date of such offering to the date the sale is consummated. A more detailed breakdown of the Net Annualized Return calculation for each issuer can be found in the respective Form 1-U for each exit. The 3 median returns above represent the ones closest to the median of the 12 exits with holding periods over 1 year. See important Reg A disclosures and aggregate advisory performance at [www.masterworks.com/cd](.   [Instagram]( [Twitter]( Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... 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