What to expect from more grocery store price hikes, products impacted

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(NEW YORK) — Prices have continued to climb from the grocery store to the gas station amid the pandemic. According to a new report, the prices of some foods and household staples are heading higher.

Kraft Heinz alerted customers that its prices will go up in March on dozens of popular products including certain SKUs of Velveeta cheese by 6.6%, hot dogs and cold cuts by 10% and Oscar Mayer turkey bacon by 30%.

Even coffee is affected — Kraft Heinz’s Maxwell House coffee price would go up by 5%, the company said.

Prices have risen steadily across the food industry, with unprecedented ingredient, labor and transportation shortages coupled with surging demand driving prices higher.

Kraft Heinz said the price increases are not a sweeping action across all its products and instead applies specifically to products experiencing the greatest cost pressures.

Officials at the Federal Reserve on Wednesday signaled they are on the verge of addressing this issue of soaring prices by potentially hiking interest rates very “soon.”

“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said in a statement Wednesday.

Federal Reserve Chair Jerome Powell said that “inflation remains well above our longer run goal of 2%,” which it notably has for some time now. He attributed this largely to supply and demand imbalances related to the pandemic and the reopening of the economy.

ABC News’ Catherine Thorbecke contributed to this report.

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Commission approves new safety standards for crib mattresses

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(NEW YORK) — After 139 child deaths since 2010, new safety standards for crib mattresses will go into effect this fall.

The Consumer Product Safety Commission approved a new rule Wednesday to address potential hazards like lacerations, suffocation and entrapment.

“This is intended to reduce the risk of injury,” CPSC spokesperson Jason Levine told ABC News. “The crib is the safest place for your infant, yet what this does is it takes another step in the right direction in terms of ensuring that the mattress itself is as safe as can be.”

New mattresses will be required to comply with the standard this fall, Levine said. The rule covers crib mattresses as well as mattresses in play yards and bassinets.

“Today’s vote means crib mattresses of all sizes will be required to meet safety standards,” CPSC Chair Alex Hoehn-Saric said in a statement. “This will improve safety for babies sleeping in cribs and play yards.”

CPSC said it was aware of at least 494 incidents, including 139 fatalities and 355 nonfatal incidents, related to crib mattresses between January 2010 and April 2021.

Just last week, the CPSC also warned consumers about certain Leachco Podster infant loungers after two children died “due to a change in position” that obstructed the infants’ nose and mouth.

Copyright © 2022, ABC Audio. All rights reserved.

Commission approves new safety standards for crib mattresses

(NEW YORK) — After 139 child deaths since 2010, new safety standards for crib mattresses will go into effect this fall.

The Consumer Product Safety Commission approved a new rule Wednesday to address potential hazards like lacerations, suffocation and entrapment.

“This is intended to reduce the risk of injury,” CPSC spokesperson Jason Levine told ABC News. “The crib is the safest place for your infant, yet what this does is it takes another step in the right direction in terms of ensuring that the mattress itself is as safe as can be.”

New mattresses will be required to comply with the standard this fall, Levine said. The rule covers crib mattresses as well as mattresses in play yards and bassinets.

“Today’s vote means crib mattresses of all sizes will be required to meet safety standards,” CPSC Chair Alex Hoehn-Saric said in a statement. “This will improve safety for babies sleeping in cribs and play yards.”

CPSC said it was aware of at least 494 incidents, including 139 fatalities and 355 nonfatal incidents, related to crib mattresses between January 2010 and April 2021.

Just last week, the CPSC also warned consumers about certain Leachco Podster infant loungers after two children died “due to a change in position” that obstructed the infants’ nose and mouth.

Copyright © 2022, ABC Audio. All rights reserved.

Black-owned autonomous grocery store opens in Georgia

Nourish + Bloom Market

(FAYETTEVILLE, Ga.) — When Jilea Hemmings’ oldest son was diagnosed with autism, she and her husband, Jamie, started experimenting with food that seemed to help improve their child’s performance.

The Georgia couple used plant-based substitutes to create their son’s favorite dishes, including mac and cheese and spaghetti and meatballs.

Soon, they began selling their products at a farmers’ market, and their customers asked if the food was sold in grocery stores, too.

“From there, the rest is history,” Hemmings told ABC News.

The couple just opened Nourish + Bloom Market in Fayetteville, Georgia, believed to be the first Black-owned autonomous grocery store in the nation. Hemmings said their mantra is “real food and real products for real people.”

After moving from Chicago to Fayetteville, the Hemmings family said they realized they were in a food desert — an area where there is limited access to affordable and nutritious food — and decided to use their prior food and technology knowledge to open a market of their own.

Nourish + Bloom Market features a “frictionless shopping” experience where customers can walk in, grab what they need and leave without waiting in line or stopping to scan and pay.

Hemmings has a background in technology and software building, and to bring her and her husband’s vision to life, the market partnered with different companies such as Microsoft, USC Technologies, Nova Dynamics and Intel.

Although the store is fully autonomous, the owners still wanted the store “to feel warm” by having employees that assist customers throughout the market.

“People think that autonomous means that you’re taking jobs away,” Hemmings said. “It actually is not. We are changing the way their jobs are done.”

They also have delivery robots, named Nourish and Bloom, to deliver products in temperature-controlled compartments. With autonomous shopping, vending and robotic delivery, the market can offer 24/7 access to real food and environmentally friendly products.

“The community response has been overwhelming,” Hemmings said. “They are just so proud to see a Black family doing this, and then also to experience the technology, people have been very excited about that.”

The couple plans to franchise Nourish + Bloom Markets around the country, hoping to reach a goal of 800 stores in total.

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Why the global chip shortage threatens the economy, national security and Americans’ ‘status quo’

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(NEW YORK) — In an increasingly digitized world, almost no industry has been left unscathed by the global shortage of electronic chips.

Demand for these dime-sized building blocks needed to make cars, computers, smartphones and much more was growing even before reaching a fever pitch as the COVID-19 pandemic forced swaths of the globe to rely on tech tools for work or school. The shortage also clobbered the auto industry with disproportionate furor, leading to skyrocketing new and used vehicle prices — which in turn drove one-third of all of the painful inflation Americans saw in 2021, according to the Bureau of Labor Statistics.

The crisis has exposed just how bedeviling the pandemic has been for policymakers and business leaders who failed to foresee the fallout from this shortage coming, as well as exposed the risks for U.S. business that results from a majority of the world’s chip supply being produced in Asia — and more specifically, political tripwire-ridden Taiwan.

“It is both an economic and national security imperative to solve this crisis,” Secretary of Commerce Gina M. Raimondo said in a blogpost Tuesday, sharing fresh data on the fragility of the semiconductor supply chain and calling on Congress to approve $52 billion in chips funding “as soon as possible.”

As the scarcity of semiconductors continues to dominate headlines two years into the pandemic, here is what economists say Americans should know about the chip shortage, and what its implications are for the future.

‘An essential part of almost every product that we use’: What are semiconductors?

“Semiconductors, or chips as we call them, are sort of the building blocks of any computer system,” Morris Cohen, an emeritus professor of Manufacturing and Logistics in the Operations, Information and Decisions Department, at the University of Pennsylvania’s Wharton School, told ABC News.

“There’s been incredible advancements over the years in the capabilities of these chips, in reduction of their size and power requirements,” Cohen added. “And so we see them now embedded everywhere — in your cellphone and your computer, in your home appliances, and in your automobile.”

“These devices are used to monitor performance to control function, to capture data to send instructions and so on,” Cohen added. “They’ve become sort of an essential part of almost every product that we use.”

Awi Federgruen, a professor of management at Columbia Business School, told ABC News that the chip shortage “is being felt in no less than 169 industries.”

As the tech sector continues to expand at a rapid pace and a growing array of tools and gadgets become embedded in Americans’ daily life, an increasing number of products are becoming dependent on chips. The implications of this can be felt by consumers shopping for everything from portable gaming systems to smart kitchen appliances, and many have likely already noticed higher prices or longer wait times when searching for their products.

Meanwhile, a reliance on chips for critical medical devices, military applications, cybersecurity tools and other sectors can carry more serious ramifications for both individuals and governments.

One natural disaster away from hitting American jobs: How severe is the shortage?

The median inventory held by chip consumers (such as automakers or medical device manufacturers) has sunk from a 40-day supply in 2019 to a less than five-day supply in 2021, the Commerce Department said in an industry report released Tuesday.

This means that if a natural disaster, COVID-19 outbreak or political instability disrupts a semiconductor facility abroad for even just a few weeks, it has the potential to shut down a manufacturing facility in the U.S., the agency added, putting American workers at risk.

Moreover, median demand for chips from buyers was as much as 17% higher in 2021 than in 2019, according to the report, and the majority of semiconductor manufacturing facilities are operating at or above 90% utilization — meaning there is limited additional supply to bring online without the expensive and time-consuming process of building new facilities.

The majority of chip factories are currently based in Asia, which houses about 87% of the market share of semiconductor factories (with Taiwan alone accounting for some 63%), separate industry data indicates. The political climate in the region, and tensions between Taiwan and China, has come under renewed scrutiny as the shortage has exposed how much U.S. industry relies on these sources.

“Initially, when you go back to the origins of the industry, the majority of the capacity was in the U.S. and then it shifted outside,” Cohen told ABC News. “Now, there’s a big push to re-shore that manufacturing and bring it back, and it’s not just a business decision, it’s political, it’s a highly politicized decision.”

‘A perfect storm’: What is causing the shortage?

The supply-demand imbalances in the semiconductor industry were already fragile before the pandemic, and the Commerce Department noted in its report that underlying demand for semiconductors was already growing prior to 2020, propelled by industry shifts such as the onset of 5G and electric vehicles. The pandemic then exacerbated the crisis by causing a surge in demand for products that require semiconductors while simultaneously disrupting the supply.

Columbia’s Federgruen said the current shortage is the result of multiple factors creating “a perfect storm.”

Silicon, the raw material used in chips, became harder to come by for producers during the pandemic, according to Federgruen, because it is necessary for vaccine manufacturing.

“In addition, there was the shutdown or temporary shutdown of [semiconductor] manufacturing facilities in the Far East and elsewhere, as a direct result of the of the pandemic,” Federgruen said. “And then there is the fact that on the demand side, in many industries such as the automobile industry, there’s been an unusual ramp-up of the demand.”

“All those factors have come together and compounded upon each other to create a big, big shortage,” Federgruen said.

Why is it hitting the auto industry so hard?

Most Americans by now have heard of the shortage’s impacts on the auto industry, which has been among the most severely hit by the shortage as more cars today are being fuzed with additional electronic systems than in the past, Federgruen told ABC News.

The shortage was compounded in the auto industry because many carmakers initially thought the pandemic would crush demand and planned for this by reducing semiconductor orders. An apparent desire to avoid public transportation and plan getaways closer to home during the health crisis, however, ended up having the opposite effect on demand for autos. Chip manufacturers, already suffering from pandemic-related shocks, could not keep up with the new orders coming in from the auto industry that came as a simultaneous remote-work boom spurred demand for chips needed for computers and IT tools.

Raimondo said that the so-called legacy logic chips used in automobiles — as well as medical devices — are facing the most acute shortages.

“In 2021, auto prices drove one-third of all inflation, primarily because we don’t have enough chips,” Raimando wrote in her blogpost. “Automakers produced nearly 8 million fewer cars last year than expected, which some analysts believe resulted in more than $210 billion in lost revenue.”

Cohen, from the Wharton School, added that over the last decade or so, “the amount of computer systems that are put into a car has just increased enormously.” While carmakers have become big users of chips for managing vehicles’ entertainment, climate, fuel systems and more, they have continued to rely on outsourced production and suppliers for these parts.

Automakers historically did not consider producing chips to be their core competency, but many have come to the realization now that they can’t afford to be dependent on outside suppliers for chips if their absence can bring production and assembly lines to a screeching halt.

Raimondo called new partnerships with semiconductor producers recently announced by Ford and General Motors “encouraging” in her blogpost Tuesday, saying the announcements “demonstrate that chip consumers and producers are coming together to solve their supply chain issues.”

What is being done to address the shortage, and how long will it last?

The Commerce Department’s report said that industry players do not see the significant, persistent mismatch in the supply and demand for chips going away in the next six months.

The report identified the main issue as the need for additional semiconductor factories (also called semiconductor fabrication plants or fabs). Construction of new fabs, however, is expensive and can take years before making an impact in the supply.

In addition to the steps taken by players in the auto industry such as Ford and GM, some companies have also announced new and dramatic actions to ameliorate the crisis and bring semiconductor manufacturing back to the U.S.

Intel announced late last week that it was investing more than $20 billion to build two new chip factories in Ohio — a headline-grabbing announcement that came on the heels of the firm saying last October that it had began construction on two chip factories in Arizona. Samsung similarly announced plans late last year to build a $17 billion semiconductor factory near Austin, Texas.

“It’s great that they’re doing that but it’s not going to solve today’s problems, that’s for sure,” Cohen told ABC News of the recent announcements. “It’ll take years for this to take place, and in the interim, we’re still going to have to source these products from the places they come from now. We don’t have an alternative.”

The situation may improve slightly if demand cools off, Federgruen noted, but similarly said that it will take years for the “big change” to occur when these new U.S. facilities begin actually pumping out chips.

Why should Americans care and what does this mean looking ahead?

Cohen said that having studied the industry for a long time, a lot of what we’re seeing now could have been anticipated to some degree, especially among industry players.

“Companies who operate in this environment have been aware of these issues for a long time and have dealt with it,” he said. “This is just the nature of being competitive in those industries.”

If a new fab costs billions of dollars and takes years to construct, companies in an increasingly globalized world will likely turn to offshore suppliers for chips instead. Cohen said the pandemic, however, has made Americans more aware of risks and fragility of this dependence on outside suppliers.

“Most consumers didn’t know and didn’t care where their chips came from: ‘You turn the car on, it should go, I don’t really care who made the chip and what country it was built in,'” Cohen said. “But now, all of a sudden, these issues become really important, and so I think we become more sensitized to how dependent we are, how interdependent we are, how things can be disrupted.”

“We became a globalized economy because there were a lot of advantages,” Cohen added. “Because of that, we as consumers have enjoyed access to an amazing array of products and incredibly low prices, which has increased our standard of living.”

With chip supply now just one natural disaster or major disruption away from potentially impacting American livelihoods, Cohen predicts it is “going to be difficult to maintain the status quo.”

“We will have more expensive products, we’ll have things that will take longer,” he said. “Therefore, our standard of living to some extent will be lower. It’ll cost us more time and money to earn what it takes to buy a car, to buy a house.”

Federgruen added that he hopes policymakers and business leaders can learn from the lessons exposed by the crisis and make better decisions moving forward that don’t just take into account short-term profits.

“In general, there’s been the recognition that we need to make our supply chains much more resilient, and that we need to build in safety buffers on the supply side for situations like this,” Federgruen told ABC News. “That lesson comes up with every crisis and is then forgotten, unfortunately, but hopefully it will stick now.”

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Bitcoin operation ignites debate around the waste from coal mining in Pennsylvania

ABC News

(PITTSBURGH) — A once-dormant power plant is humming with activity outside Pittsburgh as thousands of miners work 24 hours a day.

The miners at this site aren’t people, but supercomputers running complex math equations. The first to solve the equation is rewarded with the digital financial token known as bitcoin.

But the large amount of power needed to run these computers has re-ignited a debate in Pennsylvania and around the country about the potential climate consequences of cryptocurrency.

Bitcoin is a type of digital money not regulated by any company or government. It can be exchanged online between people anywhere in the world without going through a bank. While coins like quarters or pennies are physically minted — bitcoin is minted as a virtual token by computers, through a process called “mining.”

Some investors see bitcoin as the currency of the future. The value of one bitcoin has skyrocketed from around $10,000 two years ago to more than $33,000 as of this publishing.

Jeff Campbell, who oversees the bitcoin mining operation at the Scrubgrass Power Plant in Kennerdell, Pennsylvania, said each of their computers generates an average of $30 a day mining bitcoin.

“These are computers that are just designed to do one thing. They’re designed to run as fast as possible 24 hours a day,” he told ABC News Live.

The computers in a bitcoin mining operation need a lot of power both to run and to operate fans that stop them from overheating. By one estimate from the Cambridge Center for Alternative Finance, annual global bitcoin mining uses more electricity than the entire nation of The Netherlands.

Climate activists question whether the growth of cryptocurrency mining operations could generate more carbon emissions and create a new market for fossil fuels at a time when the world is trying to reduce energy use and cut carbon emissions as fast as possible.

Under fire for their emissions and reliance on fuels like coal and natural gas, some bitcoin mining companies in the U.S. are transitioning to more renewable types of power like solar or wind.

Stronghold Digital Mining, which owns the Scrubgrass plant, has found its power source in the form of coal waste, which is abundant at this 221-acre pit just outside of Pittsburgh. Coal waste is a combination of rock, coal, and other materials that were deemed unsuitable for burning and left abandoned since the 1970s when coal mines in the area were closed.

There are 220 million cubic yards of waste coal pits like the one in Russellton across 9,000 acres in Pennsylvania, according to testimony from Pennsylvania Department of Environmental Protection Director Patrick McDonnell. The agency says the pits cause environmental problems like leaching acid into nearby rivers and streams. There are also 40 continual fires in waste coal pits across the state that can release carbon dioxide and other pollutants as they burn, according to a document from a waste coal industry group.

The entrepreneur behind Stronghold, Bill Spence, said that while burning waste coal isn’t the cheapest form of energy, the bitcoin operation keeps the plant viable through its constant demand for power. This helps achieve his goal of reducing the toxic waste piles across the state, Spence said.

“What cryptocurrency and bitcoin has done for us is, it’s enabled us to sustain the work that this power plant does as an environmental plant cleaning up the waste coal, the remnants of the mining industry here in the state of Pennsylvania,” he told ABC.

The Pennsylvania Department of Environmental Protection says the state has benefited from waste coal power plants because the state has limited funding to clean up the piles and address the environmental problems.

“Waste coal-fired units burn waste coal to generate electricity thereby reducing the size, number and impacts of these piles otherwise abandoned and allowed to mobilize and negatively impact air and water quality in Pennsylvania,” Press Secretary Jamar Thrasher said in an emailed statement.

Pennsylvania provides up to $20 million a year in subsidies to waste coal power plants and Thrasher said the state includes their CO2 emissions in the state’s carbon budget in an effort to help them compete with cheaper forms of energy like natural gas.

Waste coal is burned using a different process than traditional coal but still releases carbon dioxide that contributes to warming the atmosphere. The EPA says the type of waste coal found in Pennsylvania also releases more acid gas and sulfur dioxide than other types of coal.

Stronghold says they have put technology in place to capture pollutants like sulfur dioxide or methane emissions from their plant, but according to publicly available data they still released about 365,000 metric tons of carbon dioxide in 2019 — the equivalent of about 80,000 cars on the road for a year, according to an EPA emissions calculator. The facility also released more than 1,000 metric tons of methane, a potent greenhouse gas, and nitrogen oxides, or NOx, that contribute to air pollution

Rob Altenburg, director of the environmental nonprofit Penn Future, said bitcoin is “wasteful by design” and that there are better alternatives for generating that power than burning waste coal.

“They’re not removing pollution. They’re moving pollution. They’re moving pollution from the land and they’re moving it to the air,” Altenburg told ABC News.

And because waste coal contains less coal than what would typically be used to generate energy, more of it needs to be burned to create the same amount of power which could generate more CO2 emissions and air pollution.

“The dirtiest source of power we have in the state should be your last choice for you for generating that electricity,” he said.

Altenburg said that instead of burning waste coal, the state and federal government should provide more funding to move the material to lined landfills where it can no longer contaminate the soil or water.

The federal infrastructure bill has allocated $11 billion toward abandoned mine cleanups, some of which could be used to clean up waste coal in Pennsylvania.

Spence acknowledges that Stronghold’s operation generates carbon dioxide and that their operation isn’t perfect, but they’re trying to improve further by testing technology to capture the carbon they emit. And he said the bitcoin operation is helping fund his efforts to use up the waste coal which otherwise won’t go anywhere on its own.

“I don’t think we should stop what we’re doing in order to get the perfect,” Spence told ABC.

“Let’s evolve into perfect.”

ABC News’ Seiji Yamashita contributed to this report.

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Tesla files countersuit against JPMorgan, accuses bank of ‘illegitimate machinations’

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(NEW YORK) — Tesla filed a counterclaim against JPMorgan Chase Monday, the latest salvo in an ongoing battle between the electric automaker and the country’s biggest bank.

The lawsuit accused JPMorgan of filing “cynical litigation” when the bank sued Tesla last year, claiming it was owed $162 million when Tesla stock warrants expired.

In its counterclaim, Tesla accused JPMorgan of deploying “illegitimate machinations” and is seeking a declaratory judgment that it does not owe the bank the additional funds.

“Last year, JPM obtained billions of dollars’ worth of shares of Tesla’s common stock for a bargain price that the parties negotiated in 2014. Not content with this multibillion–dollar gain, JPM now seeks, through this cynical litigation, to extract an additional nine-figure windfall from Tesla,” the lawsuit said.

The legal dispute began after Tesla’s Elon Musk posted on Twitter that he was considering taking the company private. He took back the statement but was sued by securities regulators. Musk and the SEC settled for $20 million. Part of the settlement required him to step down as chairman of the company’s board of directors.

“JPM took improper advantage of a Twitter post from August 7, 2018 – nearly three years before the Warrants’ exercise dates – in which Elon Musk stated that he was considering taking Tesla private. Ten days after that tweet, JPM falsely asserted that the tweet constituted an announcement by Tesla of an extraordinary corporate transaction,” Tesla’s lawsuit said.

The stock warrants were arranged after JPMorgan handled a 2014 transaction for Tesla and allowed the bank to buy shares of the automaker at a fixed price, below market value, for a period of years. JPMorgan claimed Musk’s tweet impacted the value of those shares, leaving the bank entitled to an additional $162 million.

Tesla, which is represented by Quinn Emanuel’s Alex Spiro, the lawyer who successfully defended Musk from a defamation claim, is seeking to dismiss JPMorgan’s earlier lawsuit.

JPMorgan told ABC News in a statement, “There is no merit to their claim. This comes down to fulfilling contractual obligations.”

The dueling lawsuits add to the personal animus between Musk and JPMorgan’s CEO Jamie Dimon. Musk prefers to do business with other banks and JPMorgan recently inked a deal to be the primary lender to Tesla rival Rivian, The Wall Street Journal reported.

 

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Intel investing $20 billion to bring chip manufacturing to Ohio amid global shortage

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(NEW YORK) — Amid a global chip shortage that has been exacerbated by the COVID-19 pandemic, Intel announced Friday that it will invest more than $20 billion in two new chip factories in Ohio.

The new investment will significantly expand U.S. manufacturing capabilities for semiconductors, a vital building block needed for computers, smartphones, autos, and much more. Much of the global tech industry currently relies on chip manufacturing out of Asia.

“Today’s investment marks another significant way Intel is leading the effort to restore U.S. semiconductor manufacturing leadership,” Intel’s CEO Pat Gelsinger said in a statement Friday.

The project will make Ohio home to Intel’s first new manufacturing site location in 40 years.

The California-based tech giant said the project represents the largest single private-sector investment in Ohio history, and is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The mega-site will span some 1,000 acres in Licking County, a suburb of Columbus, with construction expected to begin in late 2022 and chip production expected to begin in 2025.

“Intel’s actions will help build a more resilient supply chain and ensure reliable access to advanced semiconductors for years to come,” Gelsinger added. “Intel is bringing leading capability and capacity back to the United States to strengthen the global semiconductor industry. These factories will create a new epicenter for advanced chipmaking in the U.S. that will bolster Intel’s domestic lab-to-fab pipeline and strengthen Ohio’s leadership in research and high tech.”

Ohio Gov. Mike DeWine said in a statement the announcement is “monumental news for the state of Ohio.”

“Intel’s new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors, often called ‘chips,'” DeWine said. “Advanced manufacturing, research and development, and talent are part of Ohio’s DNA, and we are proud that chips — which power the future — will be made in Ohio, by Ohioans.”

In addition to the initial investment of some $20 billion, Intel pledged an additional $100 million to help “build a pipeline of talent and bolster research programs in the region,” according to a company statement.

Intel also said the new factories have the goal to be powered by 100% renewable electricity and place environmental concerns at the fore throughout the building process.

The news of Intel’s massive investment in U.S. semiconductor manufacturing comes on the heels of Samsung announcing late last year that it plans to build a $17 billion semiconductor factory in the U.S. just outside of Austin, Texas.

 

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Instagram testing feature that lets creators charge subscription fees

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(NEW YORK) — A small handful of Instagram content creators can now directly charge followers a monthly subscription fee for exclusive content and benefits in the latest shakeup to impact the ever-evolving digital creator economy.

Instagram’s parent company Meta announced the news in a company blog post, saying it is part of an effort to help enable creators to make a living through its platforms. Meta-owned Facebook launched a similar subscriptions service in 2020 and is now rolling the service out as a test on Instagram after positive feedback from Facebook content creators.

Meta previously said it would not collect any fees from creators on Facebook Subscription purchases until 2023 at the earliest, and said this will also apply to Instagram Subscriptions.

“With Instagram Subscriptions, creators can develop deeper connections with their most engaged followers and grow their recurring monthly income by giving subscribers access to exclusive content and benefits, all within the same platform where they interact with them already,” Meta stated.

The test of subscriptions on Instagram rolled out Wednesday with a small handful of creators, who can set a monthly price of their choice, unlock a “subscribe” button on their profile and offer new benefits to these subscribers including exclusive Instagram Lives and Stories. Content creators will also see a subscriber badge next to comments and messages from their subscribers to more easily identify them.

“Creators do what they do to make a living, and it’s important that that is predictable,” Head of Instagram Adam Mosseri said in a video posted to Twitter. “And subscriptions are one of the best ways to have a predictable income, a way that is not attached to how much reach you get on any given post, which is inevitably going to go up and down over time.”

The announcement comes as fellow social media giant Twitter recently announced a similar subscription business model for users, and as Meta and more social media platforms have invested heavily in content creators for their platforms.

Meta alone said last July that it plans to invest more than $1 billion in programs “that give creators new ways to earn money for the content they create on Facebook and Instagram.”

The major investments also come, however, as lawmakers and regulators have renewed scrutiny on the power and reach of U.S. tech giants in recent months — and particularly their impact on the mental health of young people. Just last month, Mosseri was called to testify before lawmakers for the first time specifically about the platform’s impact on young users.

Despite the high-profile attention out of Washington, D.C., policymakers have struggled to agree on any concrete law or regulatory changes to crack down on Big Tech.

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Amazon announces its 1st clothing store: here’s what to know

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(LOS ANGELES) — Amazon has expanded in many ways throughout the years, and now the e-commerce giant is launching a brick-and-mortar clothing store.

The company announced Thursday that its Amazon Style fashion retail space will open later this year at The Americana at Brand shopping mall in Los Angeles.

The new concept will offer a selection of apparel, shoes and accessories. The items will have QR codes providing information from sizing to customer ratings, the company said.

With the Amazon Shopping app users can also send items to a fitting room where they can use a touch screen to look through more options as well as request more sizes or styles to be delivered directly to their room, according to Amazon.

While Amazon has not revealed which specific brands will be featured, it said customers will have the option to browse emerging designers across hundreds of its top brands.

“Shoppers will find great looks at a broad range of prices, including trend-inspired pieces at affordable price points and sought-after styles that will become wardrobe staples,” Amazon Style managing director Simonia Vasen wrote in the company’s blog. “With Amazon’s vast fulfillment center network, the selection at Amazon Style will be frequently updated so customers can discover new items each time they visit.”

The clothing store isn’t Amazon’s first foray into a physical fashion store, the retail conglomerate has opened physical grocery stores, book stores, and in 2017, it bought Whole Foods Market.

In 2021, Amazon launched a hair salon in London for augmented reality hair consultations.

An exact date for Amazon Style’s store opening has yet to be announced, but the company said it will be inviting a select group of customers to experience the store “soon” in its announcement.

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