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If theres any doubt whether people are willing to pay $900 for a premium credit card, just look at the latest quarterly results for American Express: The credit card issuer reported Friday that it beat third-quarter earnings estimates and raised its full-year outlook. Its been a month since American Express refreshed its Platinum line of credit cards, raising the annual fee by $200 to $895, and that change is already paying dividends. The company has seen strong demand for these cards and more than 500,000 people have requested the New York-based issuers new pocket mirror card. The initial customer demand and engagement exceeded our expectations, with new U.S. Platinum account acquisitions doubling compared to pre-refresh levels, Stephen J. Squeri, chairman and chief executive officer, said in a statement. American Express reported that revenue rose 11% from a year ago to a record $18.4 billion in the third quarter, driven largely by a 9% increase in card member spending. Earnings per share came in at $4.14, higher than the consensus of analyst estimates. American Express Platinum cardholdersboth individuals and businessesaccount for about $530 billion in annual billings, according to the company, and the recent refresh has helped drive additional revenue. In the first three weeks since the card refresh, the company reported a 45% increase in new high-yield savings accounts from these members and record-high bookings on Amex travel. RACE FOR PREMIUM MARKET Squeri said the successful relaunch of Platinum cards reinforces our leadership in the premium space. Indeed, the race for the premium credit card market has heated up in recent years as issuers have raced to one-up each other with a wide variety of cardholder benefits. JPMorgan Chase bumped up the annual fee on its Sapphire Reserve card from $550 to $795 in June, promising even more perks at this higher rate, and American Express followed with its fee increase in September. Offering these types of perks comes at a cost: American Express has paid $13.6 billion in card member rewards year-to-date, a 12% increase from the same period in 2024. Thats more than double the amount of another expense: Salaries and employee benefits. But nabbing the premium market is clearly a priority for issuers, even if a majority of cardholders arent willing to fork over $800 to $900 for the privilege of using a credit card. Consumers who pay more than $500 in annual credit card fees spend nearly three times more each month than those with lower-fee cards, according to figures from J.D. Power. MARKET REACTION And thanks partly to the successful relaunch of its Platinum cards, American Express also announced Friday that it has raised its full-year guidance for both revenue growth and earnings. It now expects a 10% increase in revenue, up from 9% previously, and a $0.30 boost to earnings per share, to a total of $15.50. Stock market investors rewarded the better-than-expected earnings report: Shares of American Express surged more than 6% by mid-day Friday. The stock is up nearly 16% this year, and has outperformed the S&P 500.
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E-Commerce
ChatGPT will be able to have kinkier conversations after OpenAI CEO Sam Altman announced the artificial intelligence company will soon allow its chatbot to engage in erotica for verified adults.” OpenAI won’t be the first to try to profit from sexualized AI. Sexual content was a top draw for AI tools almost as soon as the boom in AI-generated imagery and words erupted in 2022. But the companies that were early to embrace mature AI also encountered legal and societal minefields and harmful abuse as a growing number of people have turned to the technology for companionship or titillation. Will a sexier ChatGPT be different? After three years of largely banning mature content, Altman said Wednesday that his company is not the elected moral police of the world and ready to allow more user freedom for adults at the same time as it sets new limits for teens. In the same way that society differentiates other appropriate boundaries (R-rated movies, for example) we want to do a similar thing here, Altman wrote on social media platform X, whose owner, Elon Musk, has also introduced an animated AI character that flirts with paid subscribers. For now, unlike Musk’s Grok chatbot, paid subscriptions to ChatGPT are mostly pitched for professional use. But letting the chatbot become a friend or romantic partner could be another way for the world’s most valuable startup, which is losing more money than it makes, to turn a profit that could justify its $500 billion valuation. Theyre not really earning much through subscriptions so having erotic content will bring them quick money, said Zilan Qian, a fellow at Oxford University’s China Policy Lab who has studied the popularity of dating-based chatbots in the U.S. and China. There are already about 29 million active users of AI chatbots designed specifically for romantic or sexual bonding, and that’s not counting people who use conventional chatbots in that way, according to research published by Qian earlier this month. It also doesn’t include users of Character.AI, which is fighting a lawsuit that alleges a chatbot modeled after Game of Thrones character Daenerys Targaryen formed a sexually abusive relationship with a 14-year-old boy and pushed him to kill himself. OpenAI is facing a lawsuit from the family of a 16-year-old ChatGPT user who died by suicide in April. Qian said she worries about the toll on real-world relationships when mainstream chatbots, already prone to sycophancy, are primed for 24-hour availability serving sexually explicit content. “ChatGPT has voice chat versions. I would expect that in the future, if they were to go down this way voice, text, visual it’s all there,” she said. Humans who fall in love with human-like machines have long been a literary cautionary tale, from popular science fiction of the last century to the ancient Greek legend of Pygmalion, obsessed with a woman he sculpted from ivory. Creating such a machine would seem like an unusual detour for OpenAI, founded a decade ago as a nonprofit dedicated to safely building better-than-human AI. Altman said on a podcast in August that OpenAI has tried to resist the temptation to introduce products that could juice growth or revenue but be very misaligned with its long-term mission. Asked for a specific example, he gave one: Well, we havent put a sexbot avatar in ChatGPT yet. Idaho-based startup Civitai, a platform for AI-generated art, learned the hard way that making money off mature AI won’t be an easy path. When we launched the site, it was an intentional choice to allow mature content, said Justin Maier, the company’s co-founder and CEO, in an interview last year. Backed by the prominent venture capital firm Andreessen Horowitz, which has also invested in OpenAI, the Idaho startup was one of several that tried to capitalize on the sudden popularity of tools like Stable Diffusion and Midjourney that enabled people to type a description and conjure up almost any kind of image. Part of Stable Diffusion’s initial popularity was the ease with which it could generate a new kind of synthetic and highly customized pornography. “What we had seen was that there was a lot of interest in mature content, Maier said. Training these AI systems, known as models, on mature themes actually made it so that these models were more capable of human anatomy and resulted in actually better models, he said. We didnt want to prevent the kind of growth that actually increased everything for the entire community, whether you were interested in mature content or Pixar, Maier said. So we allowed it early on and have always kind of had this battle of making it so that we can keep things filtered and safe, if thats not what youre interested in. We wanted to ultimately give the control to the user to decide what they would see on the site and what their experience would be. That also invited abuse. Civitai last year implemented new measures to detect and remove sexual images depicting children, but it remained a hub for AI-generated pornography, including fake images of celebrities. Confronting increasing pressure, including from credit card processors and a new law against nonconsensual images signed by President Donald Trump, Civitai earlier this year blocked users from creating deepfake images of real people. Engagement dropped. Another company that hasn’t shied away from mature content is Baltimore-based Nomi.ai, though its founder and CEO Alex Cardinell said its companion chatbots are strictly for users over 18 and were never marketed to kids. They are also not designed for sex, though Cardinell said in an interview earlier this year that people who build platonic relationships with their chatbot might find it veering into a romantic one. Its kind of very user-dependent for where theyre kind of missing the human gap in their life. And I think thats different for everyone, he said. He declined to guess how many Nomi users are having erotic conversations with the chatbot, comparing it to real-life partners who might do mature content things for some part of their lives but all sorts of other stuff together as well. Were not monitoring user conversations like that, Cardinell said. Altman’s announcement that erotica for adults could arrive on ChatPT in December came a day after California Gov. Gavin Newsom vetoed legislation that would have banned companies from making AI chatbots available to anyone under 18 years old if it was foreseeable that they would engage in erotic or sexually explicit interactions” with kids or encourage them to harm themselves. The tech industry lobbied heavily against the bill, which Newsom said was too broad, but OpenAI, Meta, and others introduced new age restrictions and parental controls for AI-teen interactions. Matt O’Brien, AP technology writer
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E-Commerce
Last night, New Yorkers and viewers across the country tuned in to watch the first general election debate for mayor of New York City. And as far as debates go, this one was charged, full of spats, and came with a direct and thoroughline of questioning that didn’t leave anything off the table. Within minutes, Democrats Andrew Cuomo (who is running as an independent) and Zohran Mamdani, and Republican nominee Curtis Sliwa, made clear that they came not just prepared to share their positions, but also to follow up, push back on criticisms or mistruths, and repeatedly fire well-rehearsed jabs at one another. The trio let viewers know just how different they arenot just as candidates, but also, as people. The tension was so high it prompted Sliwa to comment, “There’s a lot of testosterone in this room,” minutes into the debate. Here are some key takeaways from the event: Cuomo’s past is not forgottenand likely will never be Early on, Cuomo, who resigned as governor following an investigation into sexual misconduct allegations, had to answer tough questions about his record. As both Sliwa and Mamdani attacked the former governor about his handling of nursing homes during the COVID pandemic, and the sexual misconduct allegations, it felt clear that his past won’t soon be forgotten. But Cuomo wasn’t the only candidate who was pressed. Mamdani, a 33-year-old assemblyman, was asked hard-hitting questions that came with follow-up after follow-up on how he will fund his major proposals: making buses and childcare free and freezing rent. Mamdani talked about taxing the wealthiest one percent, while Sliwa called his ideas “fantasies” and Cuomo seemed to criticize him for wanting to lower the cost of living. The rent is still too damn high When candidates were asked how much they pay in rent, Cuomo and Mamdani gave starkly different answers. While Mamdani answered that his rent is $2,300 per month, Cuomo said he pays $7,800 and claimed that Mamdani “has a rent-stabilized apartment that a poor person should have.” Given that many New Yorkers are struggling to pay their rent, the comment felt out of step with what residents can actually afford. Gaza looms large in NYC Another issue that took up a solid chunk of the debate was the Israel-Hamas conflict. Mamdani was pressed over his pro-Palestine stance, which Cuomo said makes Jewish New Yorkers feel unsafe. Cuomo repeatedly brought up that Mamdani has failed to explicitly condemn Hamas and the phrase “globalize the intifada,” which Cuomo asserted means “kill all Jews.” Mamdani countered that “of course” he condemns the attacks by Hamas, and that in talking with Jewish New Yorkers on the campaign trail, he has learned that the phrase in question invokes fear; he noted that he will “discourage” the language, calling it “language that I do not use.” However, he pressed that, like many New Yorkers, he stands firmly against genocide and the occupation of Palestinian territories, which the International Court of Justice has said is illegal. He also stood up for Muslim New Yorkers, questioning why Cuomo has never been a leader for Muslims. “It took Andrew Cuomo being beaten by a Muslim to ever set foot in a mosque,” Mamdani said. A study in contrasts Overall, while Cuomo leaned into his experience, Mamdani pressed that if New Yorkers want more of the same, they should vote for Cuomo. What I dont have in experience, I make up for in integrity, Mamdani said to the former governor. What you dont have in integrity, you could never make up for in experience. As the two frontrunners sparred back and forth, Sliwa held his own. But at times, the Guardian Angels founderwho appeared at the debate without his trademark red beretfelt lost in the shuffle. This was especially true when he accidentally answered a question that wasn’t meant for him, and when he didn’t give a president’s name when asked to name his favorite modern president. He also couldn’t manage to say Zohran correctly. He repeatedly called his fellow candidates “the architect” (Cuomo) and “the apprentice” (Mamdani), in an apparent attempt to paint a picture of how he stands out from the both. But the candidates mostly seemed to ignore him. The final questions of the night focused on the candidate’s human side. When each were asked if they had ever purchased cannabis, Cuomo said no, Sliwa said he had for medical reasons, and Mamdani giggled as he openly answered that he had purchased cannabis from a legal dispensary. The moment is likely one that younger voters will find relatable (and memeable). There was no clear winner of the night, as what stood out the most was just how different Cuomo and Mamdani are. But, in terms of zingers, Mamdani had the best ones. The final jab of the night when they were all asked whether they’d go to a Knicks or Mets game if they were both happening at the same timeand Cuomo said “both.” Mamdani laughed as he said, “This is what New Yorkers are tired of. Just pick a team.” The candidates will have one more opportunity to make their positions clear at the next debate, which takes place next Wednesday, October 22, just three days before the start of early voting.
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E-Commerce
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