Mark Zuckerberg, CEO of Meta, has hired three researchers from OpenAI to bolster his company’s work on artificial intelligence. This strategic move aims to guide Meta Platforms through its current AI challenges. The social-media corporation brought aboard Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai, all of whom previously held positions at OpenAI’s branch in Zurich, as per sources privy to this information. These individuals established OpenAI’s location in Zurich towards the end of last year. Prior to their time at OpenAI, they collaborated closely within Google DeepMind, which is the organization’s artificial intelligence division. A representative from OpenAI verified that the three scientists have departed from the organization. Zuckerberg has been on an intense recruiting drive To correct the company’s AI initiatives following the underwhelming reception of its most recent model, he has sometimes proposed giving researchers up to $100 million to become part o...
Power chip biz to hand over equity to lenders, wipe out most shareholders, and keep running during restructuring
Wolfspeed, which produces bandgap chips for power and RF uses, plans to file for Chapter 11 bankruptcy soon following an understanding with lenders to reduce its $6.5 billion debt by approximately 70%.
Yesterday, the company, which focuses on producing silicon carbide and gallium nitride materials utilized in electric vehicles as well as solar and wind power inverters, released an announcement confirming they have entered into a Restructuring Support Agreement (RSA) with their key creditors.
"As anticipated through the terms of the RSA, the planned transactions aim to decrease the firm’s total debt by around 70%, which equates to roughly $4.6 billion, along with cutting down the yearly total cash interest expenses by about 60%," according to the company statement.
Approximately $5 billion of unsecured debt — which includes $3 billion in convertible bonds and a $2 billion loan from Renesas Electronics — will be exchanged for almost all of the newly issued shares in Wolfspeed. Current shareholders will retain around 3-5 percent of the new common equity.
The suggested pre-arranged restructuring plan will eliminate majority of the shareholder equity. This U.S.-based semiconductor company, with a market capitalization of $4 billion in 2024, accumulated staggering amounts of debt to fund manufacturing facilities in the United States.
Lenders such as Apollo Global Management, which spearheaded a debt restructuring for Wolfspeed in 2023, are anticipated to assume control of the firm and approve the reorganization plan before Wolfspeed files for Chapter 11.
"Following an assessment of various alternatives aimed at bolstering our financial standing and adjusting our capital framework, we've opted for this strategic move as we feel it will place Wolfspeed in the strongest possible posture moving forward," stated CEO Robert Feurle.
As per the accord, Wolfspeed will get an additional $275 million in funds and mentioned they possessed $1.3 billion in cash up until March, which will be used to settle suppliers and assist clients. The company plans to enter Chapter 11 proceedings with the aim of swiftly progressing through the process and emerging by the conclusion of the third quarter in the calendar year 2025.
Wolfspeed plans to keep operating during this process. In March, they appointed Feuerle as their CEO and added David Emerson as COO just last month after confirming that they would reduce their executive team by 30%. Their financial report showed a net loss of $939 million for the period ending March 30, 2025, compared with a deficit of $689 million over the previous year.
The trade was negatively impacted due to the Trump administration's change in priorities, which moved away from emphasizing electric vehicles and renewable energy production. During these nine months, Wolfspeed’s revenue dropped to $560.6 million from $606.5 million compared to 2024.
Wolfspeed was eligible for $750 million in U.S. CHIPS Act funding, provided they made a debt repayment by 2026. However, this arrangement ended when the previous administration left office after the recent elections.