How could you be so heartless

MARKETS

• U.S. markets: The Dow rallied back from 400 points down to finish the day up.
• The U.S. economy: Worker productivity increased 0.7% in Q1 (0.9% expected). Keep an eye out for the April jobs report this morning.
• Earnings today: Alibaba.

TECH

Recognize that Voice? It's SoundHound Raising a Lot of Money

Competing with Amazon and Google can cause even the most accomplished company to curl up in the fetal position.

But not SoundHound. The voice recognition startup raised $100 million from Tencent, Hyundai, Daimler, Orange and more to challenge Alexa and Google's throne.

Did you notice anything weird about the investors? Bingo. No VCs.

And that's intentional:

• SoundHound has lately spurned VCs and taken investments from many "strategic partners" (like Samsung, HTC, and NVIDIA) that have their own dreams of integrating voice AI.
• That's because its main goal is to recruit companies for its Houndify platform—a toolkit for building your own voice assistant.

But is it popular enough to take on the giants?

Call us loco, but providing a fully-customizable voice platform might give SoundHound an edge over Amazon, Google, Microsoft, and Apple.

Here's why: Companies are moving fast to integrate voice software into their offerings.

The problem? Inviting Amazon to your office party could cannibalize your customers' experience...and data. Hyundai doesn't want you to drive its car only to ask Alexa to open the sunroof and blast Rascal Flatts.

Instead, SoundHound wants to give companies their own voice

How CEO Keyvan Mohajer explains it to BI: "Big companies don't like to adopt these assistants made by Amazon and Google and Apple. They want to have their own, they want to customize, they want to differentiate, they want to keep their users."

So what's next for SoundHound? Leveraging these strategic partnerships to get its tech into more products.

After all, voice AI is only as smart as the amount of data you feed it, and Amazon and Google (owning ~90% of the smart speaker market) are miles ahead of the competition.

POP CULTURE

Adidas Keeps Its Love Locked Down for Kanye

It ain't easy bein' Yeezy—but at least someone's got his back: Adidas (-6.81%) CEO Kasper Rorsted said, "Kanye has been, and is, a very important part of our strategy and has been a fantastic creator."

Refresher: Kanye's recent jump back into the spotlight included a TMZ interview, where he said: "When you hear about slavery for 400 years ... For 400 years? That sounds like a choice."

As you can imagine, that ruffled more than a few feathers. And so far, thousands of people have signed a petition demanding Adidas drop him as a sneaker designer.

Adidas said, ‘we'll take our chances.' Strategic partnerships with Kanye and Pharrell Williams have been part of the brand's recent success. In 2017, North American sales grew 21%, topping Nike and Under Armour.

And how's this for a Kanye endorsement: In 2016, the company said it's "the most significant partnership ever created between a non-athlete and an athletic brand."

+ Kanye reflected on his interview: "Of course I know that slaves did not get shackled and put on a boat by free will...My point is for us to have stayed in that position even though the numbers were on our side means that we were mentally enslaved."

INVESTING

Nebraska Here We Come

For those of you looking to reserve a room at the La Quinta in Omaha this weekend, we've got some bad news: they're all booked.

You didn't forget about tomorrow's Berkshire Hathaway annual shareholder meeting, did you? The party (with 40,000 attendees) they call the "Woodstock of Capitalism"?

And yes, there's some business to attend to as well. Here's what we'll be looking for when Buffett and his pal Charlie Munger take the mic:

1. Investments: Usually not a fan of tech investments, Buffett bought more Apple stock than any other over the past year (but he still uses a flip phone). He'll also be peppered with questions about one of Berkshire's largest stakes: Wells Fargo. The badly-behaved bank was just fined $1 billion (try saying that five times fast).
2. Succession: When will the 87-year-old finally hang up his cleats and hit the driving range? And who is next in line? The smart money is on the recently promoted Gregory Abel or Ajit Jain to take the reins.
3. Health care: C'mon Buffett! Give us some details on your upcoming health care partnership with Amazon and JPMorgan.

TECH

Xiaomi Preps for a BIG IPO

Chinese smartphone maker Xiaomi filed for an IPO in Hong Kong. Do we have your attention yet? No? Well...

• It'll be the first major tech IPO in Hong Kong since the stock exchange changed its rules to allow them.
• Aiming to raise $10 billion, Xiaomi could reach a $100 billion valuation.
• It's the biggest Chinese tech IPO since Alibaba in 2014.
• Xiaomi is a massive brand in China, with a loyal following of "Mi Fans."

The Crew's take: Holy smartphones this industry is competitive (think Apple, Samsung, Huawei, and ZTE). But what caught our eye is China's unrelenting effort to keep big tech companies in-state for their public offerings, when they typically have IPO'd abroad.

It's part of China's push to (1) fuel its tech boom and (2) allow Chinese capital to back companies instead of foreign investors.

What could go wrong? To grow, Xiaomi will need to hit Western markets. But if you ask U.S. outcasts Huawei and ZTE, now's not exactly the best time for that.

WHAT ELSE IS BREWING

• The SEC sent Jay-Z a subpoena after he failed to testify in an investigation into Iconix Brand Group.
• Twitter (+0.36%) is advising its users to change their passwords due to a bug.
• VW's former CEO Martin Winterkorn was charged in a Michigan federal court for conspiracy related to the company's diesel emissions scandal.
• PE firm KKR (+2.98%) will convert from a partnership to a corporation.
• Elon Musk ticked off a lot of analysts after his earnings call Wednesday.
• Instagram introduced a new payment feature, letting some users purchase goods right from its platform.

WATER COOLER

TAKING INVENTORY

Don't bother Elon Musk with your needy, juvenile questions on an earnings call. He has better things to do, like sell flamethrowers and develop a Twitter bromance with Kanye. And if you do ask a question, be prepared to hear this:

"Excuse me. Next. Boring, bonehead questions are not cool. Next?"

After one of the more interesting earnings calls in recent memory, we scrapped together a few other crazy quotes from some crazy calls.

1. Snap CEO Evan Spiegel on his first earnings call: "We do tend to market our products directly to younger people because, frankly, they are more interested in learning how to use new technology products. And that's sort of—is partly inspired by trying to teach my grandma how to use email."
2. JPMorgan CEO Jamie Dimon: "It's almost an embarrassment being an American citizen traveling around the world and listening to the stupid [bleep] we have to deal with in this country."
3. Scotts Miracle-Gro CEO Jim Hagedorn: "Yo, dude. How many questions can you ask as part of one question? But can somebody better write that [bleep] down, so like we can remember all that stuff that you goddam said."

BREAKROOM

CAPTION THIS


Lori: "I swear it was the chair!"

Mr. Wonderful: "And for that reason, I'm out."

Think you can do better? Post your caption here, and we'll post the best one on our Instagram later in the day.

WHAT THE CREW IS READING
The Checklist Manifesto by Atul Gawande. First item on your summer checklist? Read this book. A renowned surgeon and researcher, Gawande saw people repeating the same mistakes over...and over... And he realized those mistakes could be eliminated by creating a simple checklist. This book is a page-turner, and provides insights way beyond medicine. It'll change the way you approach work. Period.

GUESS THE COMPANY
Market cap: $442 million

Industry: Food/Groceries

IPO: June 2017

Last seen: Struggling with subscriber growth and signing a partnership with Costco

(Answer located at bottom of newsletter)

Breakroom Answers