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Johnson & Johnson on Tuesday raised its 2025 sales forecast after reporting quarterly earnings that topped Wall Street expectations, and announced plans to spin off its orthopedics business into a standalone company. The healthcare conglomerate now expects product revenue of $93.5 billion to $93.9 billion, about $300 million higher than its prior forecast and above analysts’ expectations of $93.4 billion, according to LSEG data. Alongside the upbeat forecast, J&J said it plans to separate its orthopedics business into a standalone company named DePuy Synthes within the next 18 to 24 months, marking its second major spinoff since 2023. J&J’s orthopedics unit, which makes hip, knee, and shoulder implants, surgical instruments, and other products, generated around $9.2 billion last year, or about 10% of total revenue. J&J in 2023 announced a two-year restructuring program for its orthopedics business, saying it planned to exit certain markets and stop selling some products, after having recently spun off its $15 billion consumer unit into Kenvue. The company said it planned to focus on high-growth, high-margin areas as part of its separation plans, such as oncology, immunology, neuroscience, surgery, vision care, and cardiovascular. J&J Chief Financial Officer Joe Wolk said the company was exploring multiple paths for the separation, with a primary focus on a tax-free spin-off, but remained open to other options. While the orthopedics business was profitable, Wolk said J&J believes the next phase of innovation in orthopedics was “beyond our scope and probably in better hands somewhere else.” Shares of the New Jersey-based healthcare giant rose nearly 2% in premarket trading. FORECAST RAISE, PROFIT BEAT Third-quarter sales of $23.99 billion edged past Wall Street expectations of $23.75 billion, according to LSEG data. The drugs and medical device maker posted adjusted earnings of $2.80 per share versus analyst expectations of $2.76. The company’s pharmaceuticals sales jumped 6.8% from a year ago to $15.56 billion, slightly outpacing analysts’ estimates of $15.42 billion. J&J saw gains from its oncology products, including blood cancer treatment Darzalex, which brought in third-quarter sales of $3.67 billion, about in line with forecasts of $3.62 billion. Its medical device sales also rose 6.8% to $8.43 billion, mainly driven by electrophysiology products. Patrick Wingrove, Reuters
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E-Commerce
Chinese e-commerce giant Alibaba‘s cloud business unit has launched its second data center in Dubai, it said on Tuesday, nine years after its first, as it expands its global cloud computing services to meet growing demand. Alibaba Cloud, the digital technology and artificial intelligence division, said in a statement the launch was part of the technology major’s pledge to invest 380 billion yuan ($53 billion) over three years. No financial details were disclosed in Tuesday’s statement. “The Middle East’s advantageous position in fast-tracking AI adoption and its collaborative ecosystem are crucial enablers for private and public sector companies to thrive,” said Eric Wan, vice president of Alibaba Cloud International and regional general manager at Alibaba Cloud Intelligence. The United Arab Emirates, among the world’s top oil exporters, has been spending billions of dollars on an AI push, and under a deal signed in May, it is building the largest AI campus outside the United States in partnership with technology giants such as Nvidia and OpenAI. The long-coveted agreement was a major win for the Gulf country, which has been trying to balance its relations with its longtime ally, the U.S., and its largest trading partner, China. However, Reuters reported, citing sources, that the deal has not been finalized amid U.S. security concerns around Beijing’s access to advanced semiconductors via third parties such as the UAE, where major Chinese companies remain active. Alibaba Cloud said in the statement on Tuesday that it had partnered with several companies from various sectors, including Abu Dhabi-backed digital lender Wio Bank, during tech and AI exhibition GITEX Global in Dubai to take advantage of its local infrastructure capabilities to accelerate AI deployment. Rachna Uppal and Federico Maccioni, Reuters
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E-Commerce
Ten major philanthropic organizations are banding together to ensure that regular Americans, not just a small group of tech billionaires, have a say in how AI will shape society and who will benefit. The organizations announced Tuesday the formation of Humanity AI, a $500-million five-year initiative aimed at ensuring artificial intelligence serves people and communities rather than replacing or diminishing them. The coalition includes the Doris Duke Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Mellon Foundation, the Mozilla Foundation, the Omidyar Network and other philanthropies. The core group, which is expected to expand to include other philanthropies, will make the grants both on their own (with input from the group) and together from a common pool of capital. Many now believe that generative AI systems are about to revolutionize the way companies do business, from accounting to engineering to operations. Humanity AI is betting on a future where AI plays a supporting role, wherein it strengthens communities, and enhances human creativity. The groups want to rebalance the public policy conversation around AI to include the interests of normal people, not just the big tech players and financiers who are betting big on the transformative potential of the technology. So much investment is going into AI right now with the goal of making money, which is our capital system and that’s all fine, MacArthur Foundation president John Palfrey said in an interview with Fast Company. What we are seeking to do is to invest public interest dollars to ensure that the development of the technology serves humans and places humanity at the center of this development. The coalition knows it wont be able to match the AI industrys cash — its $500 million is a quarter Mira Muratis seed round for Thinking Machines Lab. Palfrey says that even if his organization would put its entire $9 billion in assets into this one issue, it wouldnt come close to the money being invested by the tech companies and their investors. But, he says, the ten organizations in Humanity AI working together could have a real impact. We each have a slightly different angle on it, but we’re going to share knowledge and hopefully have the whole be greater than the sum of the parts, he says. The goal, after all, is not to compete with the tech industry so much as it is to expand the conversation. It’s all building a broader community of folks who are engaged in this topic,” Omidyar Network president Michele Jawando tells Fast Company. [T]heres just one or two people who are saying this is how [AI] should be used, and we’re saying, Hey, wait a minute. I’m going to pull up a few more chairs at the table and get a few different voices and perspectives.Workers are increasingly worried that the real value that AI companies and their investors hope to deliver to big business is the ability to eliminate positions and cut payroll. AI companies and their backers counter by saying that some positions will be eliminated but that many kinds of jobs will be created. Creatives and artists wonder whether AI will enhance their performance or replace them, and many question how their authentic intellectual property can be protected in a world of AI-generated content. But the private sector would actually benefit by making sure that the benefits of AI are broadly distributed across geographies and classes, Jawando points out. Because if people don’t see that, we’ve seen what happens when people feel completely on the outside and used and abused, she says. Every major industrial revolution has had [that] moment, and so the private sector should be incentivized to do this, but they’re not right now. Some of the investments Humanity AI plans to make focus on giving underrepresented people ways to influence AIs trajectory. The group plans to award funds to the Electronic Privacy Information Center (EPIC), which works to protect peoples right to data privacy as tech companies (and governments) work to bend norms toward having no expectation of privacy at all.The group also plans to fund the work of the Berkeley Labor Center, which develops technology to measure the real effects of AI on the workforce. In addition, it trains union organizers and labor advocates and other organizations that support them, so that workers can act as decision makers on how AI gets applied and not just passive participants (or victims) of the way AI is deployed in the workplace.Some of the groups funding targets are more politically focused, working to raise the voices of people who will be affected by AI but lack thelobbying firepower of big tech. The public advocacy group AI Now, for example, seeks to inject into the policy debate the idea that the corporations developing AI should have to be accountable to the public. The group provides technical expertise to lawmakers (who often rely on AI industry sources), and researches and develops an intellectual framework that legitimizes public intervention in AI development. Some of the members of Humanity AI are focused on the creative industries. Omidyars Jawando says one of the projects Humanity AI wants to fund is focused on preserving the intellectual property of human creatives, and giving people like actors technology tools to stay in control of their image and work when generative AI tools can easily duplicate and remix them and post the results on social media. At a deeper level, Jawando says, society is beginning to grapple with the question of what role AI should play in society. Should it support and amplify people, or should it stand in for (or replace) people in many tasks?AI might be better used to address problems like healthcare accessibility or housing availability rather than making sure we all have better access to Canva, Jawando told me. I think this is when you have the conversation about human flourishingI think it comes down to that level of detail and thoughtfulness. Humanity AI wants to find, and fund, people who share that worldview and speak that language. We want to raise up a whole group of scientists and academics and researchers and advocates and young people who are going to raise these issues, she says, so that you can then empower the policymakers [to] incentivize the private sector folks to do the right thing . . . Humanity AI partners will begin making grants as soon as fall 2025. Rockefeller Philanthropy Advisors will serve as a fiscal sponsor and manage a pooled fund, with grants from that fund beginning in 2026.
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