Old Windows “blue screen of death” (Getty Images)

Investors are dumping CrowdStrike shares after IT outage

As reports of a global IT outage spread, everyone started asking the same question: what is CrowdStrike?

7/19/24 5:49AM

Updated 7/19/24 11:40AM

A global IT outage has hit banks, airlines, media outlets, and hospitals around the world.

Per The Verge, Australian firms were the first to report system failures, before similar outages around the world came to light, with all flights from major US airlines grounded early this morning. Thousands of users reported seeing a “blue screen of death” on certain Microsoft Windows machines, with reports that a faulty update from cybersecurity firm CrowdStrike had knocked servers offline.

The CEO of CrowdStrike confirmed on X:

CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed.

The early reports sent internet users to Google to familiarize themselves with exactly what CrowdStrike does, with more searches for the firm in the last 24 hours than for Donald Trump or Taylor Swift. That level of attention isn’t usually a good sign for a critical cybersecurity company.

Crowdstrike google searches vs. Donald Trump & Taylor Swift — Sherwood News

If it is indeed found to be at the core of the issues, questions will be raised as to how such a large portion of our IT systems became dependent on one company: according to its latest investor presentation, CrowdStrike is a cloud security provider to a whopping 62 companies in the Fortune 100.

Investors aren’t waiting to see how the outage plays out before selling CrowdStrike shares, with the stock currently down 10% today. The company had just joined the S&P 500 Index at the end of June.

Jon Keegan

OpenAI and Microsoft reach agreement that moves OpenAI closer to for-profit status

In a joint statement, OpenAI and Microsoft announced a “non-binding memorandum of understanding” for their renegotiated $13 billion partnership, which was a source of recent tension between the two companies.

Settling the agreement is a requirement to clear the way for OpenAI to convert to a for-profit public benefit corporation, which it must do before a year-end deadline to secure a $20 billion investment from SoftBank.

OpenAI also announced that the controlling non-profit arm would hold an equity stake in the PBC valued at $100 billion, which would “making it one of the most well-resourced philanthropic organizations in the world.”

The statement read:

“This recapitalization would also enable us to raise the capital required to accomplish our mission—and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”

A joint statement from OpenAI and Microsoft

The statement read:

“This recapitalization would also enable us to raise the capital required to accomplish our mission—and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”

Rani Molla

BofA doesn’t expect Tesla’s ride-share service to have an impact on Uber or Lyft this year

Analysts at Bank of America Global Research compared Tesla’s new Bay Area ride-sharing service with its rivals and found that, for now, it’s not much competition for Uber and Lyft. “Tesla scale in SF is still small, and we don’t expect impact on Uber/Lyft financial performance in ’25,” they wrote.

Tesla is operating an unknown number of cars with drivers using supervised full self-driving in the Bay Area, and roughly 30 autonomous robotaxis in Austin. The company has allowed the public to download its Robotaxi app and join a waitlist, but it hasn’t said how many people have been let in off that waitlist.

While the analysts found that Tesla ride-shares are cheaper than traditional ride-share services like Uber and Lyft, the wait times are a lot longer (nine-minute wait times on average, when cars were available at all) and the process has more friction. They also said the “nature of [a] Tesla FSD ‘driver’ is slightly more aggressive than a Waymo,” the Google-owned company that’s currently operating 800 vehicles in the Bay Area.

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Jon Keegan

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Oracle’s massive sales backlog is thanks to a $300 billion deal with OpenAI, WSJ reports

OpenAI has signed a massive deal to purchase $300 billion worth of cloud computing capacity from Oracle, according to a report from The Wall Street Journal.

The report notes that the five-year deal would be one of the largest cloud computing contracts ever signed, requiring 4.5 gigawatts of capacity.

The news is prompting shares to pare some of their massive gains, presumably because of concerns about counterparty and concentration risk.

Yesterday, Oracle shares skyrocketed as much as 30% in after-hours trading after the company forecast that it expects its cloud infrastructure business to see revenues climb to $144 billion by 2030.

Oracle shares were up as much as 43% on Wednesday.

It’s the second example in under a week of how much OpenAI’s cash burn and fundraising efforts are playing a starring role in the AI boom: the Financial Times reported that OpenAI is also the major new Broadcom customer that has placed $10 billion in orders.

Exclusive | Oracle, OpenAI Sign Massive $300 Billion Cloud Computing Deal

Yesterday, Oracle shares skyrocketed as much as 30% in after-hours trading after the company forecast that it expects its cloud infrastructure business to see revenues climb to $144 billion by 2030.

Oracle shares were up as much as 43% on Wednesday.

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AI appears to be everywhere, but that doesn’t mean big companies have fully embraced the use of the technology in their day-to-day business.

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