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How Is Musk Going To Pay For Tesla's Chinese Gigafactory?
July 10, 2018 6:43 pm|Comments (0)

A boy sits in a Tesla car during a visit to a Tesla showroom in Beijing on July 4, 2018.WANG ZHAO/AFP/Getty Images

Fresh off hitting an elusive production target for the Model 3 electric sedan – and a weekend offer to help rescue the young soccer players trapped in a Thai cave – Tesla CEO Elon Musk popped up in Shanghai to unveil plans for his long-held goal of a massive Chinese plant. What wasn’t mentioned was how Tesla will cover the facility’s multi-billion dollar price tag.

Dubbed Gigafactory 3 the project envisioned for the Shanghai Lingang industrial zone will be able to build 500,000 electric Teslas a year, as well as all the batteries and motors they’ll need, according to a city government statement provided by Tesla. The plant, which Shanghai said would be the largest foreign-backed industrial project in its history, could also cost as much as $ 5 billion, according to Robert W. Baird & Co. equity analyst Ben Kallo.

“That’s a good starting point,” Kallo said in a Bloomberg interview. “The biggest question right now for investors, bulls and bears alike, is how are they going to pay for it?”

Never one to think small, billionaire Musk is adding the project as Tesla continues to smooth out and accelerate Model 3 production after its tortured 12-month rollout. The company is already on the hook to continue funding its original Sparks, Nevada, battery Gigafactory, also a $ 5 billion undertaking, endless modifications to its main Fremont, California, plant, development costs for the Model Y crossover, a new Roadster sports car, its heavily promoted Tesla Semi and maybe a pickup truck. Oh, and if those capital costs weren’t enough, it’s also funding a self-driving technology initiative being done entirely in-house.

“As Laozi said in the Tao Te Ching, long journeys begin with small steps,” Barclays equity analyst Brian Johnson, wrote in a research note. “And to Tesla’s credit, today’s announcement is that small step – but we also note that there will a long journey ahead (with needs for funding, plant location and construction, battery partners and supply chains) before locally made vehicles reach Chinese streets.”

A formally attired Elon Musk, back row, center right, attends a ceremony in Shanghai to announce plans for a Tesla Gigafactory that’s to open there in a few years.Shanghai Municipal People’s Government via Tesla

Financial details of the project weren’t mentioned at a press conference in Shanghai today, and a Tesla company spokesman declined to provide a cost estimate. The facility will be wholly owned and operated in Lingang by Tesla, and conduct R&D and local sales operations as well as manufacturing, according to a statement.

“It will be a state-of-the-art vehicle factory and a role model for sustainability,” Musk said in a statement. “We hope it will be completed very soon,” without elaborating.

Establishing a production foothold in China is essential for Tesla to grow in that market and avoid its painful tariffs on imported vehicles that would otherwise make Model 3 and other Tesla vehicles unaffordable for all but a few local buyers. Chinese government support for electric vehicles has made that market one that’s too big to ignore, particularly for a company that wants to dominate global EV sales.

“Tesla’s investment will further cement China’s position as the undisputed global center for EV production,” Michael Dunne, a longtime China watcher and CEO consultancy ZoZo Go, told Forbes. Potential financial support for the factory could come from Chinese internet search powerhouse Tencent, which bought a 5% stake in Tesla in 2017, or perhaps from the Shanghai government itself, Dunne suggested.

Given the complexity of setting up a major Chinese manufacturing hub, Gigafactory 3 may not ready to go until the early 2020s, Barclays’ Johnson said, which could be a problem.

“While Tesla no doubt can enjoy some brand cachet in China as a tech innovator, which at least ensures a niche position, in the meantime local OEMs, European and US automakers are readying themselves for a speedy uptake of BEVs in China,” he said. Volkswagen, General Motors and BYD have already laid out plans for large-scale battery electric vehicle sales in China, and new players including Byton, XPeng are also readying luxury models that would potentially compete for the premium buyers Tesla targets.

Undoubtedly, Tesla will have to raise further capital to pay for the plant, Kallo told Bloomberg. Like Dunne, he also thinks a potential partner will step in to help defray some of the investment expenses, much as Tesla battery partner Panasonic at the Nevada Gigafactory.

“I’m not saying Panasonic will be the partner but you’ll see someone step in there,” he said. “We’ll hear more about that in the months ahead.”

The target for a Chinese plant to have a half million units of production capacity matches Tesla’s goal for Fremont, which it hasn’t yet attained even with the burst of Model 3 production at the end of June. First-half production at the plant that also builds Model S sedans and Model X SUVs was 87,833 units. After numerous delays, Tesla said this month it was finally building that car, nominally priced from $ 35,000, at a rate of 5,000 units per week. Musk aspires to take that level higher, but the company hopes sustained production at that volume will allow it to generate sufficient cash to fund its growing list of initiatives and, for the first time, some form of profitability.

Musk has vowed that Tesla will be in the black in this year’s third and fourth quarters, a tall order since it’s only had two, non-consecutive profitable quarters since its 2010 IPO. If the company actually achieves that, raising money for the Chinese plant should be easier.

“The access to the equity markets is there if they have growth opportunities,” Kallo said. “The important thing is the second of the year to actually show a return on this invested cap they’ve been putting in for the Model 3. Then investors will get comfortable with that and will be willing to finance other growth opportunities.”

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Why I'll Be Using Xbox One Instead Of PS4 For All My Online Gaming Going Forward
June 19, 2018 6:06 pm|Comments (0)

Credit: Epic Games

I’ve put time, effort and money into my Fortnite: Battle Royale account, linked to my PS4. I’ve got the John Wick skin with the Glider to match. I’ve got Raven, Lightshow, Super Striker and a few more premium skins. I’ve got a fully-levelled Carbide and I’ll have The Visitor as soon as some people land in Snobby Shores so I can kill them. I have a little home in the game, a locker where all my past achievements and indulgences sit in a nice little stack. When season 5 starts, however, I’m packing it in. I’ll start a new account on my Xbox One and go from there. I’ll do the same for all other games going forward.

Last week, Sony put its foot in it and has, after some apparent consideration, decided to leave it there. Epic Games released Fortnite: Battle Royale on Switch to expected fanfare, giving people who want to play the game on the go a much more accurate option than the excellent if lacking mobile port. The dream was clear: I could play Fortnite on PS4 at home, and then use my Switch when I was on the road or just out of the house. But that’s not how Sony saw its dream, and it’s locked my account out of ever playing on Switch. The company hasn’t exactly been supportive of crossplay in the past, but this is the first time it’s caused it any serious trouble.

With this looking hostility to crossplay lurking in the background, it leaves me wondering if I’ll get left behind in other games if I start my account on PS4 if and when a Switch port appears. The Switch won’t get every major game, but it will get some, and it doesn’t appear that Sony has any intention of letting its platform play nice any time soon–it’s also just easier to keep these things all in one place. The Xbox One works just fine, thank you very much, and I may as well just play here: watch the free market at work.

Am I certain to run into crossplay or cross-progression problems if I’m playing a game on PS4? No, I’m not. Crossplay is a relatively new phenomenon in the industry and not all that widespread. But Fortnite is instructive about how things can go wrong even if you didn’t necessarily expect them to: when I first started playing I just booted it up on PS4 like I usually do, and it was fun when I found I could move my progression to mobile or PC. But I had grown accustomed to his, and so when I wanted to play on Switch I was pretty annoyed to find out I’d have to start my Battle Pass all the way over. It’s not the worst problem, but it’s one place where the Xbox One now has a clear, inarguable advantage. As a multiplatform player with the choice to migrate it feels like the only natural move.

Going forward, it just seems silly to invest time into levelling an account on Sony if crossplay might be in the cards sometime in the future, and I have to imagine some other multiplatform players are feeling the same way.

Right now, this isn’t such a bee in Sony’s bonnet. I already have a PS4 Pro, and so the company loses out on a small amount of PSN percentages if I buy my V-Bucks on Xbox Live. But that’s now. If this continues to be a problem, this could be the reason that people choose to buy the next Xbox over the next PlayStation in what appears to be an increasingly crossplay friendly future. And that’s not just a bee in Sony’s bonnet, it’s a hornet in its hat.

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​Mark Shuttleworth dishes on where Canonical and Ubuntu Linux are going next
June 8, 2018 6:00 am|Comments (0)

Mark Shuttleworth looked good at OpenStack Summit in Vancouver. Not only were his company Canonical and operating system Ubuntu Linux doing well, but thanks to his microfasting diet, he’s lost 40 pounds. Energized and feeling good, he’s looking forward to taking Canonical to its initial public offering (IPO) in 2019 and making the company more powerful than ever.

It’s taken him longer than expected to IPO Canonical. Shuttleworth explained, “We will do the right thing at the right time. That’s not this year, though. There’s a process that you have to go through and that takes time. We know what we need to hit in terms of revenue and growth and we’re on track.”

In the meantime, besides his own wealth — according to the BBC, his personal wealth jumped by £340 million last year — he’s turned to private equity to help fuel Canonical’s growth.

And, where is that growth coming from? Well, it’s not the desktop. Found as users — and Shuttleworth himself — of the Linux desktop, Canonical’s real money comes in from the cloud.

Ubuntu remains the dominant cloud operating system. According to the May 8, 2018 Cloud Market statistics, on the Amazon Web Services (AWS) cloud, Ubuntu dominates the cloud with 209,000 instances, well ahead of its competitors Amazon Linux AMI, 88,500; Red Hat Enterprise Linux (RHEL) and CentOS‘s 31,400, and Windows Server‘s 29,200. As another data point, the executives at the OpenStack cloud company Rackspace told me that although their company had started with RHEL, today it’s 60/40 Ubuntu.

OpenStack has been very, very good for Canonical, which is more than you can say for many companies that tried to make it as OpenStack providers or distributors. “With OpenStack it’s important to deliver on the underlying promise of more cost-effective infrastructure,” Shuttleworth said. Sure, “You can love technology and you can have new projects and it can all be kumbaya and open source, but what really matters is computers, virtual machines, virtual disks, virtual networks. So we ruthlessly focus on delivering that and then also solving all the problems around that.”

So it is, Shuttleworth claims, that “Canonical can deliver an OpenStack platform to an enterprise in two weeks with everything in place.”

What’s driving Canonical growth on both the public and OpenStack-based cloud is “machine learning and container operations. The economics of automating the data center brings people to Ubuntu.”

That said, “The Internet of Things (IoT) is still an area of investment for us. We have the right set of primitives [Ubuntu Core, Ubuntu for IoT and Snap contanizeried applications] to bring IoT all over the planet.” But, it’s “not profitable yet”.

Shuttleworth thinks Ubuntu will end up leading IoT, as it has the cloud, “because a developer can transfer their programs from a workstation to the cloud to a gateway to the IoT. I want to make sure we build the right set of technologies so you can operate a billion things with Ubuntu on it.” To make this happen, Shuttleworth said Canonical currently has just short of 600 full-time developers.

As for the desktop, Shuttleworth finds it a “fascinating study of human nature that Unity [Ubuntu’s former desktop] became a complete exercise in torches and pitchforks. I’m now convinced a lot of the people who demanded its demise never used it.” That’s because, while “I think GNOME is a nicely done desktop,” many Ubuntu users are now objecting to GNOME. Shuttleworth also had kind words about the KDE Neon, MATE, and LXDE desktops. Still, “I do miss Unity, but I use GNOME.”

Shuttleworth would like to see the open-source community become “safer to put new ideas out into it.” Too often, “it’s obnoxious to someone else’s labor of love.”

That said, in business competition, Shuttleworth said, after people criticized him for calling out Red Hat and VMware by name in his OpenStack keynote speech, “I don’t think it was offsides to talk about money and competition. OpenStack has to be in the room where public clouds are discussed and Ubuntu has to be in the conversation when it comes to cloud operating systems. No one has questioned the facts.”

In a way, though, having given up on innovating on the desktop and on the smartphone market has been a blessing. “I can work with more focus on cloud and the edge and IoT. We’re moving faster. Our security and performance story can be tighter because we can put more time on both them.”

One thing that Shuttleworth believes Canonical does better than his competition is delivering the best from upstream to its customers. “Take OpenStack, we didn’t invent a bunch of pieces. We take care of stuff people need by trusting the upstream community. People find this refreshing.”

Canonical also succeeds, he thinks, because they eat their own dog food. “We learn stuff by operating it ourselves and not just developing it. We experience what it’s like to operate many OpenStack and Kubernetes stacks. We then offer these complex solutions as a managed service, and that reduces the cost for users.”

The result is a company that Shuttleworth is sure will lead the way in the cloud and container-driven world of IT.

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Sentiment Speaks: The Stock Market Is Going To Crash
May 6, 2018 6:01 pm|Comments (0)

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IDG Contributor Network: Going Interstellar With Microsoft Cosmos
August 4, 2017 8:10 am|Comments (0)

At Microsoft’s Build developer conference last week, the company announced Cosmos DB, a new cloud database offering that, if you believe the hype, entirely changed the database game. Before reelecting on what this means for developers and organizations, it’s worth taking a look at what Cosmos is.

Cosmos is a schema-free database service built with the aim of delivering high performance, fault tolerance, automatic indexing of data and truly globally distributed scalability. Cosmos is, at least in part, the evolution of Microsoft’s previous DocumentDB offering. DocumentDB was Redmond’s first foray into the NoSQL world. And while DocumentDB was a NoSQL choice in contrast to Microsoft’s relation offerings, Cosmos DB is multi-modal, offering developers the options to store relational or non-relational data. Scott Guthrie, Microsoft’s perennially red-shirted Executive Vice President of the Cloud and Enterprise group, described Cosmos as, “the first globally distributed, multi-model database service delivering turnkey global horizontal scale out with guaranteed uptime and millisecond latency at the 99th percentile.”

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The Doomsday Vault Isn’t Flooded But We’re All Still Going to Die
June 11, 2017 8:20 pm|Comments (0)

It was a story that was too good to pass up. The Svalbard ‘doomsday’ seed vault had flooded because of global warming-induced high temperatures melting the surrounding permafrost. But according to one of the vault’s creators, the reports are pretty overblown and everything’s fine. Well, the vault’s fine. The…

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How The U.S. Military’s Tech Is Going Green To Save Lives
March 8, 2017 10:30 am|Comments (0)

Refueling a destroyer or any other large piece of military hardware is incredibly dangerous because it leaves troops very vulnerable to attack, especially if it requires a huge convoy. U.S. troops have lost their lives trying refuel vessels that are ultra-dependent on oil. The Department of Defense knows this, and as…

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By going private, Rackspace looks to fuel its cloud evolution
August 26, 2016 8:45 pm|Comments (0)

Rackspace, a company that was an early player in the cloud market, is being forced to evolve or continue to be left behind.

The cloud and web-hosting company announced today that it’s being acquired by Apollo Global Management, a U.S.-based private equity firm, and will become a private company. It’s a move analysts say will enable Rackspace to make big changes without worrying about an anxious or angry response from shareholders.

Under the $ 4.3 billion deal, Rackspace stockholders will receive $ 32 per share. The purchase is expected to be finalized in the fourth quarter, according to the company.

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Going Hybrid: Expert Tips On How To Mix And Match IT Resources
August 4, 2016 7:20 pm|Comments (0)

By combining virtualization and the public cloud, companies get the best of both worlds in most, but not all situations.


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Porsche Boss to Take Over VW as Bloodletting Gets Going
February 27, 2016 11:25 pm|Comments (0)

Porsche Boss to Take Over VW as Bloodletting Gets Going

Volkswagen’s emissions cheating scandal is getting worse fast, and the executive board is in full-speed amputation mode.

The post Porsche Boss to Take Over VW as Bloodletting Gets Going appeared first on WIRED.




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