Tesla bears are going to be hard-pressed to find any compellingly negative takeaways in the electric car company's recent quarterly earnings, according to Morgan Stanley analysts.

"In our opinion, bears really would have to nit pick at the release to construct a materially negative narrative here," analysts wrote in a note released by Morgan Stanley that examined three key takeaways following Tesla's fourth consecutive profitable quarter which was detailed in its Q2 earnings on July 22.

While the analysts acknowledged there were critiques to be made, including its lower sequential average sales price, lower-than-expected fixed costs that wouldn't remain, and the outsized role that sales of regulatory credits played in driving its revenue, they largely highlighted the overall strength of the quarterly results.

The first takeaway: more production in China equates to a positive for Tesla's margins. 

The second quarter "marked a step change where Giga Shanghai accounted for a sharply higher proportion of global production and deliveries, magnifying the benefit to marginal profitability despite lower sequential ASPs," the research note said.

Secondly, the analysts noted Tesla's "outstanding" cash-flow management, which was $418 million for the quarter and exceeded analysts' expectations.

The analyst's final point was that comparing Tesla's second-quarter performance of positive profit and positive FCF to other auto companies "further makes comparisons between high EV players and established ICE players less and less meaningful."

The research note published by Morgan Stanley ranked Tesla's stock rating as underweight with a price target of $740.

Tesla topped Wall Street's expectations on Wednesday after the American electric vehicle and clean energy company posted its longest-ever profitable streak.

Tesla's earnings per share (adjusted) came out to $2.18 versus an expected loss of $0.15, while posting a second quarter revenue of $6.04 billion versus an expected $5.2 billion. 

"We believe the progress we made in the first half of this year has positioned us for a successful second half of 2020," Tesla said in a press release. "Production output of our existing facilities continues to improve to meet demand, and we are adding more capacity. Later this year, we will be building three factories on three continents simultaneously."

On July 22, Tesla's CEO and product architect Elon Musk also announced that the company plans to grow its California insurance offering into a "major insurance company" nationwide. Tesla plans to use the data from its cars' computers to determine insurance rates for drivers based on how aggressively they drive.

 

Apple bought more AI startups than any other tech company over most of the last decade, according to data first reported on by PCMag.com's Jason Cohen.

The data, compiled by market research company CB Insights, tracks which companies made the most AI purchases between 2010 and 2019. Apple took the top spot with 20 acquisitions, followed by Google at 14 and then Microsoft at 10.

The report notes that Apple's spending spree has been critical to developing new features for new iPhone models. For instance, the tech giant's acquisition of Israeli facial recognition outfit RealFace was critical to its development of the Face ID unlocking technology that became a key selling point of the iPhone X.

But other buys, like Shazam in 2017, may help the company's push into digital services like Apple Music, a growing area for the company as sales flag for its iconic products like the iPhone.

Apple is relying less on income from physical devices; 2019 marked the first year that the iPhone made up less than half the tech giant's revenue since 2012, partly displaced by increased business for services including its App Store, Apple Pay, Apple Music, and Apple Care. 

These products have had a notable rise in popularity. In the second quarter of 2020, even as Apple's revenue from iPhone sales fell, services income rose year-over-year by 16 percent. Data compiled by research firm Bernstein, first reported on by Quartz's John Detrixhe, indicates that Apple Pay is on track to account for 10% of all card payments by 2020. And just between Christmas Eve and New Year's Eve last year, customers bought a hefty $1.42 billion worth of products through the company's App Store.

Such moves have not been without blowback. Complaints of anti-competitive practices have led to antitrust investigations in both the U.S. and Europe, driven by app developers who say the 30% Apple takes from every App Store transaction is too large a slice. The company has pushed back by releasing studies it says proves the App Store's policies leave most of the money for developers and are comparable to other app marketplaces.

NOW WATCH:

One of the lessons Microsoft CEO Satya Nadella learned from the pandemic is companies are no longer viewing the modernization of their IT as optional projects, but key to their ability to survive disruptions to their businesses.

"The thing that we have learned I would say in the last five months is that digital technology is…becoming perhaps the most key to business resilience," Nadella said on a call with investors following the company's fourth-quarter and fiscal year 2020 earnings release.

Microsoft's sales pitch in recent years has used phrases like "digital transformation" and "tech intensity," telling customers (and potential customers) that no matter the industry they're in, they should adopt new technologies to help take their businesses to the next level.

Nadella's comments suggest Microsoft's pitch and the way customers view making so-called digital transformations has evolved from a means to elevate a business to a means to keep it afloat, especially during the economic crisis created by the pandemic. 

When Nadella thinks of digital transformation now, he said, he thinks about how Microsoft can help make companies more resilient to external factors — like a pandemic — by making business processes remote or automated in what he said is going to be an "ecommerce, contactless, reimagined world."

That kind of rethinking is going to prove necessary across industries and sectors, he indicated, because while individual companies like Microsoft itself are doing reasonably well under current circumstances, looking at the bigger picture shows that in aggregate, the entire economy is reeling from the pandemic, touching the lives of everybody.

"No one can take away from the fact that GDP is going to be negative," he said.

Microsoft released fourth-quarter and 2020 fiscal year earnings on Wednesday, beating analyst estimates in many ways by reporting $11.2 billion in profit on revenue of $38 billion for the quarter and $44.3 billion in profile on revenue of $143 billion for the year.

Microsoft's cloud business once again appeared strong, reaching $50 billion in annual revenue for the first time, but Azure revenue growth slowed to 47% from 59% last quarter and Microsoft missed expectations for the key business unit that includes Office 365 and its Teams chat app. 

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Slack has filed an antitrust complaint against Microsoft with the European Commission, it announced Wednesday, accusing the company of stifling competition through its chat and collaboration app Teams. Slack accuses Microsoft of engaging in illegal, anti-competitive tactics by tying Teams into its productivity suite, force-installing it for customers, blocking its removal, and hiding its "true cost" from its enterprise customers.

The European Commission must now decide whether or not it will do a formal investigation, but several Wall Street analysts said that filing the complaint was a good business decision for Slack regardless of the outcome, because it puts more scrutiny on Microsoft's dominance and could force the company to slow down. However, they're also very doubtful that Slack will actually achieve its ultimate aim: Forcing Microsoft to unbundle Teams from the Microsoft 365 Suite and sell it as a standalone product.

How the antitrust complaint could benefit Slack — even if Microsoft wins 

The complaint is not entirely surprising given CEO Stewart Butterfield's previous comments about Microsoft's anti-competitive behavior. Butterfield recently said Microsoft was "unhealthily preoccupied" with "killing" Slack because it presents an existential threat to email, which is at the core of the Office 365 suite. He has also called Microsoft an "unsportsmanlike" competitor. 

Overall, the complaint could bring more attention to Microsoft's overall dominance in the enterprise software market while making the tech giant more cautious about building features to compete with rivals like Slack and Zoom, said Rishi Jaluria, an analyst at DA Davidson. 

"I think it's a smart business decision by Slack because there's upside to it," Jaluria told Business Insider." It could kind of force Microsoft to slow down some of the things that they're doing that Slack and other rivals aren't happy with. I also think customers are going to look at this and start to think that 'maybe we are too dependent on Microsoft products.'"

In recent years, Slack has launched integrations with other tools like Dropbox, Zoom, Okta, Atlassian, and others, which can give customers a similar experience to a productivity suite like Microsoft — with more customization and flexibility. The complaint could help Slack's strategy of trying to convince customers that combining different tools in this way leads to a better user experience than buying into one platform, like Microsoft 365: "Maybe you would have more customers that are going to think more critically about that," Jaluria said. 

Analysts from William Blair agreed in a note to clients Wednesday: "We see this as an independent action meant to drive a larger conversation on Microsoft's competitive behaviors."

The complaint is a "no harm no foul" move for Slack, Wedbush analyst Dan Ives told Business Insider. Slack is taking this route as it goes after more of Microsoft's bread-and-butter enterprise customers, he said.

"The biggest threat to Slack is the Microsoft penetration story with Teams," he said. "So it's not a surprise that they made this move, especially at this juncture."

Still, he's doubtful that the complaint will "broaden into a bigger risk for Microsoft."

Slack's VP of communications and policy argued in a press conference Wednesday that Microsoft's tactics with Teams mirror the pattern of behavior with its Internet Explorer Browser that got it into antitrust trouble in the 1990s, when its dominance in the PC market was deemed a monopoly.

However, both Jaluria and Ives agreed that the Teams situation is not as glaring an offense as that past example, in part because Teams does integrate with competitors like Zoom, Dropbox, and Okta. They think that the idea of Microsoft actually being forced to separate Teams is far-fetched. 

"I don't think that that's a likely scenario," Ives said, while Jaluria was even more blunt: "That's not going to happen."

Slack had good reason to file its complaint with the EC now

Slack's complaint comes as both companies have seen growth during the pandemic — with Teams boasting 75 million daily active users as of April and Slack saying in late March that it added 12,000 new paid customers in its first quarter, more than double it added in the previous quarter. Slack hasn't given an updated daily active user number since October 2019 when it had 12 million. 

Part of Slack's motivation in filing this complaint is that Teams' rapid growth over the last few months has "stunted" Slack's growth, Futurum Research analyst Dan Newman said. He points out that of all the productivity tools, Slack grew the slowest during the first few months of the pandemic: Its revenue only grew 50% last quarter, the same as it had the quarter before.

 The fact that Slack decided to file its complaint in Europe is also significant, Newman said, because the EU tends to be stricter about anti-competitive behavior. For example, between 2017 and 2019, the European Commission ruled against Google in three different cases, fining it over $9 billion.

Overall, analysts agree it adds to the momentum around scrutinizing big tech players for potential anti-competitive behavior. Microsoft has largely avoided antitrust scrutiny since its historic antitrust battle in the late 1990s. Meanwhile, other large American tech companies like Apple, Amazon, Google, and Facebook have faced antitrust probes both in the US and abroad in recent years and their CEOs are set to testify before Congress next Monday.

"It adds to a theme that we're seeing, there's momentum against big tech players," Ives said. "So if Slack was going to make this move, make it now rather than six months now."

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It's safe to say that 2020 has been a mixed bag for startups. 

The year has seen a handful of high profile acquisitions: Lululemon bought home-exercise startup Mirror for $500 million, while Uber acquired food-delivery startup Postmates for $2.6 billion.

But data from Pitchbook about venture capital activity in 2020 Q2 tells a rather gloomy story. 

In the first half of 2020, VC-backed startup exits have reaped a total value of 45.3 billion, which is less than one fifth of the $261.6 billion that venture-backed companies racked up from their exits for all of 2019. If exits continue at the same pace this year, they will fall far below the 2019 total. 

Just 147 startups pulled off an exit in 2020 Q2, at a total value of $21.2 billion, according to Pitchbook.  

This total pales in comparison to 2019's Q2, which was the best quarter ever for VC-backed startup exits: 383 startups exited for a record total value of $138.3 billion, per Pitchbook.

It's hard to compare 2019, which saw a number of high profile startups like Uber, Pinterest, Slack, and Zoom go public at sky-high valuations, to 2020, which so far has seen VC-backed startups lay off thousands of employees, and hot startups like Airbnb slow down their IPO plans. 

If exits don't start to pick up soon, Pitchbook projects that 2020 will be the year with the fewest VC-backed startup exits since 2011, when 742 startups exited at a total value of $67.3 billion. However, 2020 doesn't seem headed for the same low points touched in 2008 to 2010, in the aftermath of the financial crisis, according to Pitchbook. And the firm said an uptick in IPO filings at the end of the first half of 2020 might be a positive sign. 

With fewer exits on the books, some VC firms might find themselves strapped for cash. However, fundraising has remained robust for larger funds, per Pitchbook. 

The economic situation in the United States remains precarious in 2020. As coronavirus cases and deaths continue to surge across the United States, there is a good chance that many schools will remain closed, which could seriously hinder startup workers and founders with children. Without open schools, many other US workers will have to stay home, with ripple effects on employers and the economy. And if a second wave of coronavirus strikes the US, stocks could plunge 20-30%, as Business Insider's Ben Wink has previously reported.

Startups are responding to the unprecedented economic conditions in a number of different ways. 

Some companies have taken advantage of the brewing coronavirus recession by buying up smaller startups at rock-bottom prices. Financial technology startup Brex, for example, acquired three startups in March 2020, just before raising $150 million at a $3 billion valuation and laying off 17% of its staff in May. 

The coronavirus pandemic could also accelerate a movement of startups seeking to exit by selling to shell companies known as SPACs, which are sometimes called blank-check companies. Hims, the hair loss treatment startup that has received funding from Peter Thiel's Founder Fund as well as from Redpoint Ventures and SV Angel, is reportedly negotiating a deal with a SPAC, per Reuters.  

SPACs, which usually perform better during market downturns, make it possible for startups to bypass the administrative headache of going public while also getting liquidity in the hands of the startup's early investors and early employees. 

The VC ecosystem depends on exits to achieve liquidity, and with fewer companies filing to go public or successfully seeking out acquisitions, the pool of available capital could start to dry up if the economic decline becomes extended. Venture capital firms need to demonstrate that they can provide a good rate of return for their limited partners, who are the investors in VC funds. 

Some VCs have encouraged their portfolio companies to extend their runway, which is how much cash a startup has in the bank to fund its operations, for up to 3 years. It seems likely that startups will continue to do this by slashing headcount, slowing down growth, and reducing other overhead costs, like sky-high rents.

If the gloomy forecast for 2020 startup exits comes true, then VCs, who have poured billions into unprofitable startups like Uber and Airbnb in their pursuit of growth, may have to switch gears and focus on profitability. 

And if unprofitable startups start to run out of runway and fail to raise additional funds, they might become some of the first causalities of the worst recession in the US since the 1930s Great Depression, which lasted a decade. 

Tesla CEO Elon Musk reiterated his concerns about the future of artificial intelligence on Wednesday, saying those who don't believe a computer could surpass their cognitive abilities are "way dumber than they think they are."

"I've been banging this AI drum for a decade," Musk said. "We should be concerned about where AI is going. The people I see being the most wrong about AI are the ones who are very smart, because they can't imagine that a computer could be way smarter than them. That's the flaw in their logic. They're just way dumber than they think they are."

Musk has previously said he believes AI poses a much larger threat to humanity than nuclear weapons and called for regulations to monitor the development of AI technology.

"I think the danger of AI is much bigger than the danger of nuclear warheads by a lot," Musk said in 2018. "Nobody would suggest we allow the world to just build nuclear warheads if they want, that would be insane. And mark my words: AI is far more dangerous than nukes."

Facebook CEO Mark Zuckerberg has disagreed with Musk, saying AI has already improved health care and could reduce car accidents, while calling excessive pessimism about AI "pretty irresponsible." In response, Musk called Zuckerberg's understanding of AI "limited."

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Retired US Army Gen. Russel Honoré, the three-star general who commanded the military's and Federal Emergency Management Agency's response to Hurricane Katrina in 2005, sharply criticized the Department of Homeland Security's controversial methods to quell to the ongoing protests in Portland, Oregon.

Several members of the Customs and Border Protection (CBP) agency, which operates under the DHS, wore the US Army's camouflage uniform as they patrolled Portland's streets last week in a mission officials said was to protect federal buildings that were vandalized by demonstrators.

The CBP agents, who were also kitted with the same woodland camouflage uniforms US troops wear in combat, were shown in numerous videos and pictures detaining and beating demonstrators. One video uploaded to social media channels showed an individual suspected of assault or property destruction being whisked away in an unmarked minivan, prompting state and congressional leaders to demand an investigation.

"That uniform represents the cloth of our nation for people who don't draw overtime, who serve around the world at the direction of the national command authority," Honoré said to MSNBC on Tuesday. "And is not to be used as an instrument of protest suppression."

"That uniform is designed to blend into terrain, not to make you look like a warrior," Honoré added, referring to the distinct woodland camouflage pattern designed to obscure troops' outlines in battlegrounds like Afghanistan. "They're wearing these uniforms as a function of intimidation to look like warriors."

'Get the hell out of our uniforms'

Following President Donald Trump's decision to broaden the duties of federal agencies to curb the protests across the country, specialized federal law enforcement units have been given paramilitary-like roles to suppress demonstrators.

Federal agents from agencies like the CBP's immediate-response force, also known as the Border Patrol Tactical Unit (BORTAC), were mobilized in an effort to protect federal buildings, despite resistance from state and local leaders. These units and other federal law enforcement agencies often wear the US Army's camouflage uniform — BORTAC in particular has deployed to austere environments in the past, including Iraq and Afghanistan.

But concerns have grown as pictures of the uniformed personnel in Portland beating protesters with batons were widely publicized amid the federalized crackdown. The optics of the federal agents, who were confused with US service members, have concerned top Pentagon officials due to its implication.

US Army Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, previously highlighted his concerns, saying there needs to be clear "visual distinction" between the two organizations.

"You want a clear definition between that which is military and that which is police, in my view," Milley said during a congressional hearing earlier in July. "Because when you start introducing the military, you're talking about a different level of effort there."

Gen. Honoré likened the federal agents' actions against protesters as a "lawless group" who were "literally beating them with batons."

"Police don't do this, what kind of bull---- is this," Honoré said. "Get the hell out of our uniforms."

Unit patches

The DHS and CBP have disputed the suggestion that their agents at the scene were unidentifiable "masked stormtroopers."

CBP commissioner Mark Morgan on Tuesday pointed out that his agents wore patches to identify their agency, and that "it is offensive to refer to these dedicated men and women that are out there as law enforcement professionals."

Examples of their patches worn on their uniforms or protective vests include a unique string of numbers and letters for internal purposes; a distinct "POLICE" velcro patch; or the CBP's own logo.

But both the Army's uniforms and law enforcement patches are also available for purchase online by the general public, fueling concerns that a renegade group would be able to mimic the same tactics used by the federal agents — particularly in the scenario with unmarked minivans seen in recent videos.

And for many observers, including seasoned US service members and civil-rights groups, the visibility of the patches are often overshadowed by the military uniforms or even obscured by the fog of war during a time of crisis.

Members of specialized response teams, such as BORTAC, previously wore distinct uniforms depending on their location and circumstance. BORTAC members wore an olive-green uniform, without a camouflage pattern, that is currently worn by ordinary Border Patrol officers.

More patches, more confusion.

Several people have already been arrested after they were accused of posing as members of the military and law enforcement during the George Floyd protests.

In Los Angeles, Gregory Wong was taken into custody after he wore similar attire to a National Guard member ABC7 reported, citing sources. Wong, who was armed with an AR-15-type rifle and a pistol, was spotted by actual National Guard members after he fell into formation with them, the outlet said.

At a protest in Las Vegas, Zachary Sanns was charged with false impersonation of a federal officer, according to 8 News Now. Prosecutors reportedly said he stood on alongside police officers while armed with an AR-15-type rifle and wearing tactical gear.

Other activists, such as members of the Boogaloo movement, have also worn pieces of the Army's uniform or carried with them military-style gear to the same protests throughout the country — adding to the confusion in identifying actual law enforcement agents from others groups.

Members of movements like the Boogaloo and the Three Percenters militia often wear several velcro patches on their outfits in a similar arrangement to that of active-duty US service members, making themselves difficult to identify for those unfamiliar with military customs and regulations.

Some of these visibly armed activists also wear the same specialty patches worn by US troops upon completion of the military's specialty schools, such as the US Army's Airborne or Ranger School, likely in reference to their past achievements if they previously served in the military.

A Pentagon spokesman on Tuesday echoed Gen. Milley's view and said Defense Secretary Mark Esper has made the Trump administration aware of his concerns with the appropriation of the US military's uniforms.

"We saw this take place back in June, when there were some law enforcement that wore uniforms that make them appear military," Defense Department spokesman Jonathan Hoffman said to reporters, referencing the George Floyd protests throughout the country earlier this year.

"The secretary has a expressed a concern of this within the administration, that we want a system where people can tell the difference," he added.

Democratic Rep. Seth Moulton, a former US Marine Corps infantry officer, questioned the presence of camouflage uniforms on urban streets and likened it to "the president's secret police."

"Federal agents who are wearing camouflage in our streets and carrying out the orders of our corrupt president against Americans obviously have no understanding of our military's most basic values — to uphold and defend the Constitution of the United States," Moulton said to Insider.

"The use of these shadow forces by President Trump and the acting DHS secretary is deeply disrespectful to our military men and women in uniform who risk their lives abroad to fight for the rights our Constitution guarantees us.

"We shouldn't just tell these police officers to change out of camouflage, we should do away with BORTAC ... so that federal law enforcement masquerading as military can never again be used as the president's secret police," Moulton added.

Shopify has been on a product-launching spree recently, moving beyond its e-commerce enabling software and eyeing more consumer-facing products. 

In early May, it released a consumer-shopping app. Later that month it announced plans to roll out a new buy now, pay later feature for its merchants called Shop Pay Installments, set to go live later this year.

On Wednesday, Affirm said that it will be Shopify's exclusive partner powering the buy now, pay later offering.

"We're super excited to be part of Shopify's growth," Max Levchin, founder and CEO of Affirm, told Business Insider.

Read more: POWER PLAYERS: Meet the 12 key execs driving Shopify, the breakout e-commerce star that's inking partnerships with Walmart and Facebook and seen its stock price triple since March

Shopify powers over one million merchants, more than half of which are based in the US. That opens up a huge market of retailers, and in turn, shoppers, that Affirm will now have access to.

"Tens of millions of US consumers are going to be exposed to Affirm, which is a huge leap for us in terms of just being visible," Levchin said.

Currently, Affirm is available at check out for more than 6,000 merchants. Prior to the announcement, Affirm was available to Shopify merchants through its app store. But retailers needed to integrate Affirm's tech, which, at times, was more complicated. 

By powering Shop Pay Installments, the integration on the merchant side will be more seamless, Levchin said.

"You just flip the switch and off you go," Levchin said. "It eliminates all forms of complexity and makes it a choice for the merchant that's super easy."

Affirm's brand will still be featured on Shop Pay Installments

Often, fintechs will sell their tech to other companies, letting them rebrand it themselves. Startup Bread, for example, does this with its buy now, pay later tech, selling it directly to retailers.

But with this partnership, Affirm's brand will still be featured on the Shop Pay Installments product. In fact, keeping Affirm's name was a sticking point for Levchin.

"We get full credit and visibility. We actually insist. Part of the adherence of our mission is that people need to know who their heroes are," he said. "We are bringing transparent and honest financial products, and people need to know that it's us who are doing it."

As they grow in stature, buy now, pay laters are increasingly considering their brand awareness. For example, Klarna recently announced a loyalty program for customers.

Valued at $2.9 billion, Affirm has raised $800 million to-date from investors including Andreessen Horowitz, Lightspeed Venture Partners, and Spark Capital.

See more: From Affirm to Klarna, buy now pay later startups are booming. But experts warn juggling explosive growth with responsible lending is a tricky balance.

Levchin, who was a cofounder of PayPal, has been vocal about Affirm's 'mission of honest finance,' offering consumers a more transparent alternative to credit cards. As part of that, Affirm has never charged late fees.

"We think it is incredibly important that we be transparent with our merchants and buyers," Kaz Nejatian, vice president and general manager of financial solutions at Shopify, told Business Insider in emailed comments.

"Like Affirm, we believe that products that hide behind late fees and hidden fees are bad for everyone," he added.

And Levchin says Affirm's commitment to working with its users that are unable to pay has been key to its success during recent months.

"That's the brand Affirm stands for. We will work with you and treat you like a grown up," Levchin said. "Part of that requires the end customer knowing that they're dealing with Affirm, so we really have never white labeled."

Offering buy now, pay later can help merchants boost sales

Shopify's consumer-focused products — like its Shop app — are all about driving more business to the network of merchants running on its platform. And Shop Pay Installments is no exception.

Offering a buy now, pay later product at checkout can help retailers increase sales and convert online browsers to buyers. Affirm, which already partners with brands like Casper and Peloton, says that it can increase average order values by 85% and up repeat purchase rates by 20%, as of May this year.

Read more: Buy now, pay later startups are 'having a moment' — here's why retailers like Walmart and Target are betting on installment payments to keep consumers spending

"We're looking forward to partnering with Affirm to power Shop Pay Installments in the U.S. for eligible merchants, helping them give their customers better shopping experiences while boosting their overall sales," Nejatian said.

Affirm, in addition to other buy now, pay later players like Afterpay and Klarna, continue to see a growing number of consumers sign on for their products, often marketed as a more flexible alternative to credit cards.

"Today's consumers want more flexibility when they're shopping and making purchasing decisions," Nejatian added. "By giving our merchants the ability to offer more payment choice and flexibility, we're helping them meet their customers' wants and needs."

Read more

Buy now, pay later startups are surging. But Affirm CEO Max Levchin says the industry will see a shakeout as the pandemic hits borrowers.

$85 billion e-commerce giant Shopify is trying to make banks irrelevant for small businesses. Its chief product officer lays out why.

Buy now, pay later startup Affirm just launched a high-yield account with an eye-popping rate. Its CEO explains why the startup wants to cater to both saving and splurging.

Election season now brings an expected threat: foreign meddling via online disinformation campaigns.

To combat this interference, a team of researchers have developed a machine-learning algorithm that spots and flags internet trolls as they pop up. The technique, the programmers say, could help social-media companies quickly shut down coordinated efforts to meddle in US elections.

The tool, described in a study published Wednesday in the journal Science Advances, works by learning to recognize known, common patterns associated with troll activity and disinformation campaigns. Russian troll accounts, for instance, have posted many links to far-right websites, but the content on those sites didn't always match the posts' accompanying text or images. Venezuelan trolls, meanwhile, have often posted fake websites.

Based on its knowledge of this type of pattern, the algorithm then identifies other accounts and posts with similarly suspicious activity.

The researchers said the tool works on a variety of social-media platforms — in tests, it identified trolls on Twitter and Reddit using the same techniques. 

"A major value of the findings is the ability to transfer them over time and platforms," Cody Buntain, an assistant professor in informatics at New Jersey Institute of Technology and a co-author of the study, told Business Insider. "It allows platforms to respond and track in real time," he added. 

A coordinated plan of attack

Buntain said many social media companies are probably already using machine learning to identify and remove trolls from their platforms, but his team's model offers a way for companies to coordinate their efforts. It also allows companies to find new campaigns early and predict some elements of future disinformation campaigns, since it can use data from known troll accounts to identify brand-new ones.

"Being able to do forecasting gives the platform some time to do real interventions," Buntain said.

To test their algorithm, researchers trained it on publicly available Twitter data: posts and links made by users linked to disinformation campaigns. The users came from Russia, China, and Venezuela. 

Then they added in data from ordinary Twitter accounts as well as more politically active ones to see how effectively their tool could sniff out trolls. In each test, the model identified a majority of posts and accounts involved in disinformation campaigns, even when those accounts were brand-new. 

"We're capturing something in the political message that these trolls are pushing,"  Buntain said.

The model was also effective at separating trolls from authentic, politically engaged Twitter users. 

Putting the tool into practice

Buntain and the other researchers are offering their algorithm for free, though they said like to partner with companies to get better insight into how to optimize the tool. At least one company has expressed interest in their work, Buntain added. 

Ideally, platforms that adopt the new tool could use its findings to quickly remove or suppress users that post suspicious content, warn human users when they exhibit troll-like behavior, and warn the public about disinformation campaigns as they're found.

However, Buntain also said that companies need to be careful if they adopt this kind of algorithm, since the method isn't 100% accurate. 

"The concern — and I think this is legitimate — is, what happens when you're wrong?" he said. 

He also noted that companies would need to be vigilant about staying a step ahead of disinformation coordinators that might try to thwart the tool. Russian campaigns, for instance, have grown increasingly sophisticated since early 2015. 

Retraining the algorithm every few weeks can help it stay up to date, Buntain added, but when major events or political actors start trending on a platform, it can take a few days for the tool to catch up. Given that lag, human troll-watchers would be still be necessary, too. 

Federal law enforcement officers from the US Department of Homeland Security arrested a protester in Portland, Oregon, earlier this month after saying they saw him commit a federal crime while watching a YouTube livestream, first reported by Recode on Wednesday.

A court document submitted by Micah Coring, an agent with the Federal Protective Services, a division of DHS, said officers watching the video saw a protester place a wooden board — that was initially on fire — against the outside wall of a federal courthouse before a second person adjusted it and a third extinguished it.

The document also said that while first person's face was obscured, the second person's face was visible, and officers sent screenshots to other agents who used them to surveil an individual for several hours before arresting Kevin Benjamin Weier, who they allege is the person they saw on the livestream.

Weier has been charged with attempted arson of a federal building and could face up to 20 years in prison if convicted.

The arrest shows how publicly available evidence published on protesters' social media feeds or captured by journalists is both exposing abuses of power and being used by law enforcement to dig up evidence on activists.

Portland, in particular, has become a major flashpoint between law enforcement officers and protesters in recent weeks following President Donald Trump's executive order that allowed federal agents to deploy to the city. Demonstrations there — which have been largely peaceful but have also resulted in some vandalism — have been going on for more than 50 days.

Since the order, militarized federal agents have been patrolling the streets in a dramatic show of force while using tear gas, smoke bombs, and physical violence to break up crowds. They've also been seen throwing protesters into unmarked vans without explanation.

The aggressive tactics by federal officers have prompted strong opposition from city and state officials, who have requested that they withdraw from Portland. 

Business Insider previously reported that Oregon Gov. Kate Brown has called the deployment a "blatant abuse of power," and Portland Mayor Ted Wheeler declared the use of force an "attack on our democracy." The state's attorney general has since sued the Trump administration, alleging officers are "unlawfully detaining" protesters, according to the Associated Press.

Tesla turned a profit in the second quarter, it said Wednesday, topping Wall Street's expectations for the three-month period marked by coronavirus shutdowns, cementing its longest streak of profitability in company history. 

Here are the important figures:

"We believe the progress we made in the first half of this year has positioned us for a successful second half of 2020," the company said in a press release. "Production output of our existing facilities continues to improve to meet demand, and we are adding more capacity. Later this year, we will be building three factories on three continents simultaneously."

On a conference call following the release, Tesla announced Austin, Texas as the official location for its second US factory, where it will eventually build its Cybertruck and other vehicles. 

"I've never been more optimistic or excited about the future of Tesla in the future of the company," CEO Elon Musk said. 

Shares of Tesla, already at record highs, rose as much as 7% in late trading Wednesday following the release. 

The company also disclosed $428 million worth of revenue from regulatory credits that it sells to other automakers who make far fewer electric vehicles, its highest ever for the growing segment, helping to insulate the company's balance sheet from falling vehicle prices. In total for 2020, those credits will likely total more than $1 billion, CFO Zach Kirkhorn said. 

Lower overhead costs thanks to a "temporary reduction" in employee compensation also helped to fuel the quarter's success, Tesla said. That's despite an increase in capital expenditures as the company builds its third car factory near Berlin in Germany. 

Analysts on the call are likely look for insight about demand trends the company is seeing at home in North America as well as in the increasingly important Chinese market. They're also sure to ask for updates on the new European factory, and for any decisions on its second US factory, which is seemingly headed for Austin, Texas.

Before the pandemic hobbled the entire auto industry, Tesla had announced plans to build up to 500,000 vehicles in 2020, something says it will still be able to do despite the ongoing difficulties. Many of Tesla's competitors have in recent months lowered their expectations because of the negative economic environment.

For investors that have piled into the stock in recent months, sealing Tesla's status as the world's most valuable automaker, the beat is likely to be taken as pure vindication. Following delivery numbers that surpassed expectation in June, the stock has hit record highs on a near weekly basis, fueled in part by speculation it could be added to the benchmark S&P 500 index after a full year of profitability. 

"We continue to believe EV demand in China is starting to accelerate with Tesla competing with a number of domestic and international competitors for market share with Giga 3 remaining the linchpin of success which remains the prize that Musk and Tesla are laser focused on capturing," Dan Ives, an analyst at Wedbush, said Wednesday. 

It's official — Tesla's fourth car factory, its second in the US, will be in Austin, Texas.

CEO Elon Musk made the announcement on Tesla's second-quarter earnings call Wednesday after a fierce bidding process that also involved Tulsa, Oklahoma, and other cities. In the end, however, Travis County and a local school district's deal for more than $65 million in tax rebates over 10 years won over the electric-car maker.

"It's going to be right near Austin," Musk said, "five minutes from Austin International Airport and about 15 minutes from downtown Austin."

What is currently a concrete plant on a rural swath of land in the city's southeast quadrant airport will soon be home to a 5 million-square-foot plant for Tesla's Cybertruck, Semi truck, and Model 3 and Y. The company said it hoped to hire up to 5,000 workers at a starting wage of $15 an hour for many of the low-skill manufacturing roles.

The land is an "ecological paradise" along the Colorado River, Musk said, and will remain open to the public for recreation opportunities. 

But the decision wasn't without controversy, as with most tasks undertaken by Tesla and Musk. At a series of public meetings, citizens turned out in force to remind county commissioners of past legal issues the company's had in regard to labor relations, worker safety, unions, and environmental impact.

In Austin, Tesla will join a large and entrenched cohort of high-tech companies that began to flock to the area in the 1970s led by Dell, IBM, and 3M. As companies continued to pour in over recent decades, the city has experienced skyrocketing population growth. A business-friendly climate with no state income tax for residents and a wealth of educated workers have made it a fitting home for hundreds of companies, both tech imports and home-grown enterprises alike. 

Tesla's market valuation continues to skyrocket as the company slowly ramps up annual production. While it's easily the most valuable automaker, it produces just a fraction of the vehicles sold by Detroit's old guard, including Ford and General Motors. That could soon change if current rates hold and Austin joins the likes of Berlin, Shanghai, and Fremont, California.

Oklahoma officials, while disappointed to not win the factory, said they were looking forward to supporting Tesla suppliers given the state's close relationship with Texas.

"Over the past few months, Tulsans and Oklahomans as a whole showed the nation and the world that our state is worthy of being one of two finalists for an innovative, cutting-edge company like Tesla," Gov. Kevin Stitt said in a statement. "The comprehensive effort made by the State of Oklahoma, the City of Tulsa and the Tulsa Regional Chamber proves Oklahoma remains open for business and an ideal destination for the automotive industry despite today's announcement."

In 2014, Amazon introduced Lambda, a pioneering new product that introduced a concept called serverless computing. Six years later, serverless has blossomed into a full-fledged field – and venture capitalists are starting to place their bets on promising startups in the space.

The promise of serverless computing is that it gives developers the ability to run large-scale applications without the headache of managing the underlying server infrastructure. A serverless app spins up the cloud resources it needs to meet its immediate needs right in the moment, and then vanishes it all away afterwards. Ultimately, serverless computing helps customers cut costs and overhead.

The approach is new enough that only Amazon Web Services, Microsoft Azure, and Google Cloud have made significant inroads in the nascent market, offering serverless technology alongside their more typical cloud offerings.  

But startup founders — and the venture capital industry — believe there's room to carve out a niche.

For example, startups Iguazio and Vercel allow developers to more easily build serverless applications, raising $71.7 million to build artificial intelligence app and $20.99 million to build web apps respectively. Other startups focus on monitoring and debugging serverless applications, like Ozcode, which raised about $3.5 million before being acquired in March, and Lumigo, which has raised a total of $8 million.

While serverless is still in its early days and these startups are still in their early stages, venture capitalists and founders alike think that it's an opportunity which will only keep growing. Serverless is already growing fast among large and small companies in industries like retail, finance, and gaming, a recent report from IT industry community Spiceworks showed that about one-third of companies are either currently using or planning to adopt serverless computing this year. 

Some, like Trinity Ventures partner Schwark Satyavolu, believes that all companies will eventually move to serverless and that developers will redesign existing applications to be serverless, too. The pricing scheme of serverless — where customers pay based on exactly how much compute they use — is "game-changing in what it'll enable in terms of new business models that are not possible today," Satyavolu said. "That is the primary reason why we believe it will be the foundation of truly different kinds of products and services."

 Beyond cost, another main tenet of serverless is making developers lives easier. 

"We wanted to relieve the developer of burden," Guillermo Rauch, CEO and co-founder of Vercel, told Business Insider.

Part of that ease is speed:

"People want to develop software quickly," Yaron Haviv, founder and CTO of the startup Iguazio, told Business Insider. "It's all about getting value quickly. I need the tools that will allow me to do the job as soon as possible. Why is everyone in New York using Uber again and not buying their own cars? Today you're taking Uber to get from point to point. You want to focus on building business applications, not on managing infrastructure."

Erez Berkner, cofounder of Lumigo, a platform that alerts customers if something goes wrong with their serverless applications and helps them find the root cause, echoed that sentiment:

"I don't need to deploy a server or operating systems, so my life is much easier," Berkner told Business Insider as he reflected on why serverless benefits developers. "I can get a system up and running in a couple of days compared to a couple of weeks."

One advantage these startups like Vercel and Iguazio have over cloud giants like AWS, Google, and Microsoft, is that they offer flexibility. Many potential customers are concerned with being locked into one cloud — these startups generally make it simple for companies to run services with multiple clouds, while some tools from the cloud giants favor their own services.

For example, serverless platform startup Nuweba, which has raised $15 million, is both challenging the market leaders and selling tools that are compatible with their serverless platforms, too. 

Similarly, some startups like Stackery are seeing the cloud giants as more of a partner than a threat. Stackery, which has raised a total of $7.47 million, helps developers build serverless applications using AWS capabilities.

"We all share the belief that engineers should focus their time on delivering value to their users, not on the underlying plumbing," Farrah Campbell, alliances and ecosystem director at Stackery, told Business Insider. "We all believe serverless is a way to deliver on that vision."

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Apple hasn't even launched its much-rumored iPhone 12 yet, but reports are already starting to paint a picture of what to expect two years ahead in 2022. One well-known Apple analyst suggests the company's 2022 iPhone may have a different type of camera lens that would make it much better at taking zoomed photos.

Ming-Chi Kuo, an analyst with TF International Securities known for his predictions about unreleased Apple products, said in a new report that the 2022 iPhone will likely have a periscope lens. Kuo's research was reported by 9to5Mac, Apple Insider, and MacRumors. 

It's not the first time Kuo has mentioned that Apple may be planning to outfit its future iPhone with a periscope lens; the analyst issued a similar report back in March.

Apple did not immediately respond to Business Insider's request for comment. 

A periscope lens uses a mirror to help it achieve a closer optical zoom, which would ultimately result it crisper zoomed images compared to digital zoom. Phones like Samsung's Galaxy S20 Ultra and the Huawei P30 Pro already use periscope lenses for zooming. Samsung's phone, for example, provides a 10x optical zoom, while Huawei's offers a 5X optical zoom. The iPhone 11 Pro, by comparison, only supports a 2x optical zoom.

It could be a critical addition for Apple as cameras have become one of the biggest ways in which companies differentiate their devices from competitors. And data shows that camera quality plays a role in the buying decision when purchasing a new smartphone. Data from Global Web Index published in 2019 listed "more camera and video capabilities" among the top five most desired smartphone features based on its survey of internet users between the ages of 16 and 64 in the United States and United Kingdom. 

Both Samsung and Apple flaunted their respective phones' cameras as major selling points when announcing the Galaxy S20 Ultra and iPhone 11 Pro. The S20 Ultra can zoom in at up to 100x digitally (although doing so may result in blurry photos), while the iPhone 11 Pro is Apple's first smartphone to come with a triple lens camera.

As for this year's iPhone, Apple is expected to add a depth sensor to the iPhone 12's camera system much like the one found on the company's latest iPad Pro. Kuo's note also mentioned that the iPhone 12 may have better autofocus capabilities.

Tesla has chosen the site of its next US factory, but has not disclosed the site's location. (Update: After this story was published, Tesla said the factory will be built in Austin, Texas.) The electric-car maker made the announcement on Wednesday in its second-quarter earnings release, in which it said "next US Gigafactory site selected" and that "preparations are underway" at the new facility.

Austin, Texas, and Tulsa, Oklahoma, were the final contenders Tesla considered from a list of eight cities, all of which are located in the central US. If the company builds the factory in Austin, it will receive at least $65 million in tax incentives.

Tesla did not immediately respond to a request for comment on which city it chose.

The company plans to produce its Model Y SUV and upcoming Cybertruck pickup at the new factory. Cybertruck production is set to begin in late 2021.

The upcoming US factory will likely be Tesla's sixth, as the company has plants in California, Nevada, New York, and Shanghai, and is building one in Germany that is set to open in 2021. Only the Nevada and New York plants are not designed for vehicle production. The former produces batteries and the latter makes solar roof-tiles, among other products.

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Peacock debuted nationwide on July 15, bringing another choice to a crowded field of on-demand streaming services that has seen newcomers, like Disney Plus and HBO Max, working to compete with established services, like Netflix, Hulu, and Amazon Prime Video.

Launched by NBCUniversal, Peacock relies on a freemium model for on-demand streaming, offering a mix of TV shows, movies, and live sports for free with ads. Peacock Premium gives subscribers access to exclusive content and a significantly larger back catalog of NBC shows, like "Law & Order," for $4.99 a month. With that said, Peacock Premium still relies on ads to generate revenue. To go ad-free, you need to sign up for a Peacock Premium Plus subscription for $9.99 a month.

Peacock's subscription model is similar to what Hulu employed until 2016, allowing viewers to watch 13,000 hours worth of programming for free with ads. Viewers who want to catch up on NBC shows, like "30 Rock" or "Saturday Night Live," can mostly do so without a premium subscription, though a handful of classics, like the original "Law & Order" and "Everybody Loves Raymond," require a paid account.

Peacock's large library of free content is enticing and NBC has promised to limit commercials to five minutes at most per hour of streaming. However, Peacock Premium lacks the value offered by streaming competitors like Netflix and Hulu, and there are some major gaps in NBCUniversal's catalog.

Peacock review: Peacock gives NBC its own streaming home, but key Universal movies are missing

Peacock's library is primarily anchored by NBC TV series like "30 Rock," "Law & Order SVU," and "Will & Grace." Notably missing is "The Office," which will become exclusive to Peacock in January 2021.

New episodes of NBC's current primetime series are available on Peacock one day after they air on TV, along with content from live programs like "The Today Show," "The Tonight Show Starring Jimmy Fallon," and "Late Night With Seth Myers."

"Downton Abbey," "Pawn Stars," and "Ray Donovan" lead a handful of popular series from other networks that have also made their way to Peacock. Peacock's catalog features about a dozen exclusive series, movies, and documentaries, that can only be viewed on Peacock, including Dale Earnhardt Jr's documentary series "Lost Speedways," and "Psych 2: Lassie Come Home," a new movie continuing the hit USA mystery series.

Peacock hosts hundreds of movies from Universal Pictures, but many of the studio's recent releases are absent due to prior agreements with HBO and FX. Several key Universal franchises, including "Fast & Furious" and "How to Train Your Dragon," are already available on competing streaming services (HBO Max and Amazon Prime Video, respectively) but it's unclear how long it will be until they arrive on Peacock.

Instead, Peacock offers decades worth of classics spanning the work of Alfred Hitchcock to 2013's "Lone Survivor." Peacock has promised that new and upcoming Universal movies, like "Boss Baby 2" and "Trolls World Tour," will eventually appear on Peacock as well, and future Universal releases won't be contracted to other services.

Peacock will feature films from other studios, like "American Psycho," "Reservoir Dogs," and "The Mummy," on a rotating basis, but with popular movies like "The Matrix" and "Jurassic Park" scheduled to leave the service just two weeks after its launch, it's hard to feel confident about what will remain in the library long term.

Sports fans who don't have access to NBC Sports through their television can use Peacock to watch live Premier League matches and other events, including the 2021 Olympics.

Peacock's "freemium" model offers a different kind of value

Unlike Netflix, Hulu, and HBO Max, anyone can watch thousands of hours worth of movies and shows on Peacock for free with ads. A Peacock Premium subscription will get you access to more episodes from Peacock original shows, and more classic series and movies for $4.99 per month. The ad-free version of Peacock costs $9.99 per month and includes the premium content without commercials.

If you're a Comcast or Xfinity cable customer you can get Peacock Premium for free by creating an account and logging in with your cable provider.

Peacock's premium content currently pales in comparison to services like Netflix and Hulu, especially when you consider the thousands of hours worth of free content that's already available.

Die-hard fans may be willing to pay a monthly fee to watch "Two and a Half Men" or "Shrek," but the Premium subscription won't offer much value until more exclusive shows and anticipated classic series, like "The Office," appear on the platform, and even then it's not clear which upcoming additions will require a subscription.

Peacock's interface works well enough, but it's lacking common features from other streaming services

Peacock's layout and functionality meet the minimum expectations for an on-demand streaming service — movies and shows are separated by category and users can create a watchlist of their favorites.

Peacock lacks the option to create separate profiles for different viewers, so parents need to engage the parental control pin on their own account to prevent their children from accessing inappropriate content. Other missing ease of use features, like a "Play from Beginning" button, would certainly be welcome too.

Ads on the free plan are mostly non-intrusive and NBCUniversal has promised no more than five minutes of commercials per hour you spend watching Peacock. The service also has a built-in feature to prevent the same ads from playing during every commercial break.

Peacock is available on most devices, except for Roku and Amazon Fire TV

Peacock's streaming app is available on Vizio and LG smart TVs, as well as iOS and Android mobile devices, Android TV, Xbox One, and Chromecast. The service is also available through its official website, PeacockTV.com.

The Peacock app is currently unavailable on Amazon Fire TV and Roku devices. You can browse a full list of supported devices here.

Peacock doesn't offer support for 4K, HDR video, or Dolby Atmos sound. This is disappointing since all of these features are offered by Netflix, Disney Plus, and Amazon Prime Video.

The bottom line

Peacock's huge library of free content is appealing, but the lack of recent movies and the limits of NBC's catalog make Peacock Premium seem like an unnecessary expense. Longtime fans of the NBC shows will be satisfied with their new streaming home but Peacock doesn't feel like much of a competitor to Netflix, Hulu, or even the recently launched HBO Max.

Perhaps Peacock Premium will offer more value when "The Office" and Universal's new slate of movies arrive on the service in 2021, but until then, it's another addition to the increasingly crowded dashboard on my Smart TV, and yet another constantly changing streaming library I'll have to keep track of.

Pros: Tons of movies and shows available for free with commercials, commercials are limited to five minutes per hour watching, lots of classic films

Cons: Premium offerings aren't very exciting, $4.99 subscription plan still has ads, missing a bunch of popular Universal movies released between 2013 and 2019, it's unclear how often popular franchises will leave or be added to Peacock

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Despite a shift toward virtual learning and some continued uncertainty surrounding campus openings, many college students will soon be returning to or moving into dorm rooms and apartments. Though these spaces tend to be on the small side, that doesn't mean students can't enjoy an immersive home entertainment experience. 

Home theaters are typically thought of as space hogs, but it's actually possible to build a compact home entertainment setup in a dorm or apartment. With the right gear, you can even enjoy advanced video and audio formats, like HDR and Dolby Atmos, without needing a massive display or a room full of surround sound speakers.

Below, we've selected the best home entertainment products for dorms and smaller apartments, including compact TVs, soundbars, a streaming stick, a game console, and a smart speaker. Whether you're looking to buy that special college student in your life a gift or you're a student yourself searching for tech recommendations, these picks will help turn any small living space into an immersive entertainment center.

Ford's long-awaited new Bronco is a hit. Hours after its debut last week, a deluge of customers trying to put down $100 reservation briefly crashed Ford's website.

The new family of four-by-four SUVs is being offered in a trio of trims, with a wide range of available packages. One of those — the "First Edition" — was initially planned for 3,500 units, but according to Road & Track, Ford doubled that number.

Ford said that all First Edition reservations have been taken, but you can always configure another trim level. Business Insider's Kristen Lee has provided a helpful guide.

At any rate, here's a closer look at the Bronco First Edition, now one of the most exclusive new Fords:

Aquariums could soon be home to animatronic dolphins, and visitors might not even know the difference right away.

Edge Innovations, a company in New Zealand, is combining artificial intelligence and animatronics to foster a human zoo or aquarium experience. "The marine park industry has had falling revenues for over a decade due to ethical concerns and the cost of live animals, yet the public hunger to learn about and experience these animals is still as strong as ever," designer Roger Holzberg told The Guardian.

Visiting a marine park and seeing shows with live dolphins can be exciting and educational for people, but detrimental to the animals' health. So, Edge Innovations enlisted American designers, including Walt Disney Company alums and Walt Conti, the designer behind Free Willy. 

Robotic dolphins aren't cheap — they will likely run about $26 million each, according to The Guardian. Edge Innovation claims that they will last longer, and they don't have the same maintenance requirements as large ocean mammals. The animatronics will be "sustainable, safe, and profitable" according to promotional materials.

Not only will these robots provide a more humane way to have the experience of interacting with sea creatures, the company sees a future for the animatronics beyond aquariums. Edge Innovation's website suggests hotels, cruises, malls, and museums as other potential venues, and they don't plan to just stop with dolphins. The website mentions great white sharks and sea dragons as other options in the future. 

The animatronic dolphins are shockingly realistic, and could easily be mistaken for the real thing. They weigh nearly 600 pounds each. In fact, making them indistinguishable from real dolphins was one of the conditions for investment in the project. An audience was unable to recognize that they were robotic, according to the Guardian. 

The robots are remote-controlled and can last up to ten hours on a single charge.  They're being developed for a new aquarium in China, although they could eventually show up in all other kinds of settings.