Caffeine Fueled Power Settlements

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Welcome to FinSoar, the sea of information for smooth sailing across the world of finance! 

This week's dispatch brings you the kind of corporate logic that makes you wonder if anyone's actually steering the ship. I’ve got record sales paired with mass firings, AI innovation that's jacking up your electric bill, and billion-dollar settlements that reveal who really has power in the digital age.

Starbucks CEO Brian Niccol just delivered his best sales week ever — then immediately closed 400 stores and fired 900 corporate workers. Welcome to the coffee giant's chaotic turnaround year.

Starbucks reported "record-breaking" sales during its Pumpkin Spice Latte launch in early September, with CEO Niccol saying it was "the strongest Tuesday sales day ever." 

Days later, the company announced it would close 1% of North American stores (roughly 400 locations) and lay off 900 non-retail employees as part of a $1 billion restructuring.

Laid-off baristas receive 60 hours of pay (worth $900-$1,320), while shift supervisors get 84 hours ($1,680-$2,436). Café attendants receive just 30 hours. All get three months of health insurance coverage — then they're on their own.

To absolutely no one’s surprise, union targets were some of the first hit. Among the closures was Starbucks' flagship unionized Seattle roastery and a unionized Chicago location, prompting Workers United to say "things are only going backwards" under Niccol. 

The union represents workers at over 600 stores and is fighting for a contract amid complaints about understaffing.

To top it off, Chief Technology Officer Deb Hall Lefevre resigned without a permanent replacement as Starbucks pushes AI-powered inventory systems and automated ordering algorithms. 

Sources say February's 1,100 corporate layoffs hit IT particularly hard, with outsourcing to India-based Tata Consultancy Services increasing.

Despite this, Starbucks may be trying to keep up with competitors, and upping the ante with the latest protein diet obsession particularly among Millenials and Gen Z. 

Amid the chaos, Starbucks launched high-protein beverages with up to 36 grams of protein, including Banana Cream Protein Matcha and Chocolate Cream Protein Cold Brew — betting on functional beverages as a growth driver.

Despite the turnaround efforts, Starbucks stock has fallen 9% since Niccol took over a year ago, while the S&P 500 rose 19%. 

Analysts give Niccol a "B" grade, noting he needs more time but faces mounting competition from drive-thru chains and rising consumer price sensitivity — over 70% of customers say high prices are why they plan to visit less.

Bottom line: Record sales and mass layoffs in the same month perfectly captures Starbucks' identity crisis—trying to be a premium coffeehouse while cutting costs like a fast-food chain.

Sources: Business Insider, Al Jazeera, BBC, Reuters, CNN

Artificial intelligence is driving electricity prices up as much as 267% in areas near data centers — and you're paying for it whether you use ChatGPT or not.

A Bloomberg analysis found wholesale electricity now costs up to 267% more than five years ago in areas near significant data center activity. 

Kevin Stanley, a 57-year-old blind Baltimore resident on disability, says his energy bills jumped 80% in three years. "You wonder, 'What is your breaking point?'"

The scale is staggering: U.S. data centers consumed over 4% of the country's electricity in 2023, projected to hit 9% by 2030. 

Globally, data centers will consume more than 4% of electricity by 2035—if they were a country, they'd rank fourth behind only China, the U.S., and India.

Who pays? Utilities managing the largest U.S. electric grid raised costs for consumers by more than $9.3 billion for 12 months starting in June. Baltimore residents saw average bills jump $17 monthly after a power auction hit records. 

Another record auction will boost bills by $4 more starting mid-2026.

The nuclear bet: The U.S. will spend $350 billion on nuclear power through 2050 to meet AI demand, adding 53 gigawatts of capacity. 

But widespread deployment of small modular reactors won't start until after 2035 — leaving utilities burning coal and gas to meet immediate needs.

If all permitted U.S. data centers go online, air pollution could cause 370-595 premature deaths annually and trigger 190,000-300,000 asthma cases, with public health costs reaching $5.7-$9.2 billion per year.

Over $64 billion in data center projects have been delayed or blocked nationwide as residents fight back. 

June Ejk in Pennsylvania: "I worry about the kind of world I'm leaving for my grandchildren. We're selling out to these big corporations."

Every ChatGPT query uses 10x more energy than a Google search. Multiply that by millions of daily queries, and Baltimore's blind resident on disability has it right: AI may help someone somewhere, but how does it help him pay his electric bill?

Sources: Bloomberg, MIT Energy Initiative, IEA, Business Insider, NPR, Energy Now

Three major settlements in one month reveal the shifting power dynamics between platforms, politicians, and the public.

September saw a wave of tech company payouts:

Amazon: $2.5 billion – The retail giant settled FTC allegations that it tricked millions into Prime subscriptions and made canceling deliberately difficult. The deal includes a record $1 billion civil penalty and $1.5 billion in consumer refunds affecting 35 million users, according to the FTC.

Google: $425.7 million – A federal jury found the company violated California privacy laws by tracking 98 million smartphones between 2016 and 2024, even when users thought they'd disabled tracking.

YouTube: $24.5 million – The platform settled President Trump's lawsuit over his 2021 account suspension, with $22 million going to a White House ballroom project.

The Amazon and Google cases follow a familiar pattern: regulators or courts acting on behalf of harmed consumers.

The YouTube settlement is different. It's the third platform to pay Trump this year — Meta and X settled similar suits for a total of $60 million across all three cases, according to Trump's attorney. The message to tech platforms: censor the president at your financial peril.

While Trump signed an executive order last week to facilitate TikTok's U.S. divestiture, the deal's structure raises eyebrows.

Investors include Oracle co-founder Larry Ellison, the Murdoch family, and MGX — a UAE-backed fund that recently invested $2 billion in Trump family crypto assets.

For China, TikTok has transformed from a point of national pride to a bargaining chip. Beijing spent years opposing the sale but now sees it as leverage for concessions on trade, tech export controls, or Taiwan.

The deal values TikTok's U.S. operations at $14 billion — far below previous estimates of up to $50 billion. ByteDance will retain just 20% ownership but reportedly receive half the U.S. profits.

ByteDance keeps ownership of TikTok's algorithm and will license a copy to the new consortium, which Oracle will oversee and "retrain" on U.S. data.

In 2000, Russia's NTV television channel faced a similar turning point. After its puppet show mocked newly inaugurated President Putin, the Kremlin demanded changes. Within months, state-controlled Gazprom took majority control, ending the channel's independence.

"At first, Putin wasn't strong enough to defeat everyone," recalls former NTV writer Viktor Shenderovich, who fled Russia in 2022. "But by bending to him, they participated in creating what became his aura of unchecked power."

When ABC suspended Jimmy Kimmel's show in September after remarks about Charlie Kirk's death, public outcry forced a reversal within 24 hours. But both ABC and CBS had previously paid Trump multimillion-dollar settlements over coverage disputes.

So, what does this mean?

For consumers: Amazon will refund up to $51 to eligible Prime customers. Google's settlement works out to roughly $4 per affected device. Real money, but pocket change for trillion-dollar companies. Amazon generates $2.5 billion in sales every 33 hours — its record fine is a rounding error.

For platforms: A new calculus where presidential grievances command eight-figure payouts while consumer harms settle for far less.

For democracy: When Trump joked at the TikTok deal signing ceremony, "If I could, I'd make it a hundred per cent MAGA-related," he said the quiet part loud. 

Platform control is flowing to politically-connected investors, and the implications for free speech remain unclear.

Former Russian journalists who watched NTV's 2000 takeover assumed their society's taste for free speech would protect them. When they later pitched American producers on covering Kremlin media pressure, they were told: "This won't interest our audience. It won't make sense to them."

This September, it might make more sense than anyone hoped.

Sources: Al Jazeera, The New Yorker, Federal Trade Commission, CBS News

That’s all for today!