Also: Disney invests in Epic Games, Alibaba restructuring, Softbank profit. 
Good morning.
It’s remarkable how quickly the attack on “woke capitalism” has faded from the U.S. political scene. The two main attackers—Gov. Ron DeSantis and Vivek Ramaswamy—have retreated ingloriously from the playing field. Nikki Haley never carried this particular spear. And Donald Trump may sympathize, but he has other, more pressing, battles to fight.
That’s not to say the backlash is over. Red state attorneys general continue their fight against investment funds using ESG screens. Conservative legal groups continue their attack on companies adopting explicit racial guidelines in decision making. And hordes of social media warriors stand ready to attack the next brand daring to follow in the footsteps of Bud Light.
But the notion that the 2024 election is going to be a referendum on companies that want to help people and planet is gone. And no one should be surprised. “Make Quarterly Earnings Great Again” is a rallying cry that only resonates with high speed traders and private equity turnover artists. Running companies for the benefit of society is not just the right thing to do; it’s good for shareholders in the long run.
So where does that leave us? ESG has lost its luster—in part because it was an ungainly amalgam of ideas to begin with. “Greenwashing” and “purpose-washing” are out of fashion—because the public relations downside may be as great as the upside. And diversity efforts have been dialed back from the fevered pitch of 2020. But the underlying forces driving business to pay more attention to social impact have not gone away. In a world where human capital is more valuable than physical capital, businesses must inevitably become more human.
And check out this week’s episode of Leadership Next, in which Michal and I interview Roelof Botha, who is not CEO but rather “senior steward” of Sequoia Capital, an investment firm that Botha says helped build companies that now make up 27% of the value in the NASDAQ. Among other things, we asked Botha whether the AI boom was a bubble:
“The AI wave rivals the internet and it rivals cloud computing and it rivals mobile, and it really benefits from all of those and I don’t think it’s hype. I promise you it will exceed our expectations in years to come. It is transformative.”
You can listen on Apple or Spotify.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Disney invests in the metaverse
The Walt Disney Company will invest $1.5 billion in Epic Games, the developers of the video game Fortnite. Epic will now feature Disney’s characters in its game, which helped popularize the idea of the “metaverse.” Epic Games investors also include Sony and Tencent; the latter owns about 40% of the game developer. Bloomberg
Alibaba’s rocky restructuring
Alibaba is “not in a hurry” to pursue IPOs of its logistics and grocery store divisions, chairman Joe Tsai told analysts Wednesday. “Market conditions currently are just not in a state where we believe we can really truly reflect the true intrinsic value of these businesses,” Tsai said. Alibaba shares fell over 6% in Hong Kong trading after the e-commerce company reported disappointing revenue for the last quarter of 2023. Fortune
Softbank’s profit
Softbank reported over $6 billion in quarterly net income, its first profit after four consecutive quarters of losses. The profit, which came in far above analyst expectations, was driven by the company’s Vision Fund, which posted its largest gain since March 2021. Softbank’s shares rose 11% on Thursday after a bullish earnings forecast from Softbank-owned chip designer Arm. CNBC
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2024 Travel Remains Resilient The travel industry remains resilient even amid economic uncertainty, as Americans continue to prioritize experiences and leverage flexible work arrangements. Deloitte’s 2024 Travel Outlook unpacks what is driving this continued travel intent. Read more.
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Brainstorm AI London convenes April 15-16 Join Fortune in London as policymakers, academics, and business leaders discuss how new regulatory frameworks could impact AI development, and how risks to security and labor by AI can be mitigated. Learn more here |
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