good morning In today’s newsletter: Extreme heat highlights the need for another kind of climate investment; AI puts shadow libraries in the spotlight; and Aly Wagner, co-founder of a new women’s soccer team, talks about the money in women’s sports. (Was this newsletter forwarded to you? Sign up here.)

As heat waves gripped three continents this week, venturing outside even for a few minutes in Phoenix, Rome or a city in northwestern China sometimes it meant risking heatstroke or worse. This weekend, about 80 million Americans are expected to experience a heat index — how the temperature feels to the body — of at least 105 degrees, according to the National Weather Service.

The extreme heat is fueling violent typhoons in Asia and flash floods in the United States. It taxes power grids, raising health care costs and mess with tourists holidays. And it will ultimately affect everything – and the business of everything.

El Nino and stagnant jet stream contributed to the record temperatures. But to the pragmatist, extreme heat is the new normal.

Carl-Friedrich Schleussner, the head of climate science at Climate Analytics, a policy institute in Berlin, said, “Most of our cities are not equipped to deal with these kinds of summers.”

“We will have to develop adaptive strategies” — and quickly, he told DealBook.

The good news: Investors are spending heavily on climate projects. Global warming is helping to make periods of extreme heat more frequent, longer and more intense, and it will continue to get worse unless humans basically stop adding carbon dioxide to the atmosphere, scientists say. Venture investment in climate technology has boomed since the post-Covid recovery began (although it fell, together with project funding as a whole, in the first half of the year). Both global public and private investment in climate finance, in projects ranging from decarbonizing architecture and transport to developing renewable energy initiatives, more than doubled from 2011 to 2021, to around $850 billion, according to the Climate Policy Initiative, a non-profit climate advocacy group. (It will top $1 trillion with the passage of the Biden administration’s sweeping climate bills, the European Union’s Green Deal and the Chinese low-carbon development initiatives announced in its latest five-year plan.)

“There has been huge, huge progress” in developing green technologies and lowering their costs, said Bella Tonkonogy, the US director of Climate Policy, whose funders include the Bloomberg Foundation and the German government.

The less good news: Addressing the source of the problem is no longer enough. The effects arrived, and extreme heat became the leading weather related killer in a large part of the world. Some cities, homeowners and businesses are investing in inexpensive hacks that can help make cities, which tend to absorb and re-radiate heat more than natural landscapes, more bearable in the summer. Painting roofs white or another reflective color can cool structures, making air conditioners as much as 15 percent more energy-efficient, said Jane Gilbert, the chief heat officer for Miami-Dade County, Fla. Homes and businesses need to be renovated to stay cooler in the summer and warmer in the winter, and Miami-Dade has secured millions in federal funding. Planting trees also adds essential shade to reduce temperatures on city streets.

Only about 7 percent of climate finance is focused on adaptation efforts, according to the Climate Policy Initiative. But more investors are interested, Ms. Tonkonogy said. Last year, the organization in partnership with LightSmith Groupprivate equity firm, on a $186 million climate fund designed to finance climate resilience projects that could help communities adapt to and withstand the kinds of extreme weather events that have become so common this summer.

“The reason people are investing more in climate adaptation is because they actually see the effects of climate change,” Ms Tonkonogy said. — Bernhard Warner

Microsoft is closing in on sealing its $69 billion deal for Activision Blizzard. The FTC withdrew his inner case against the acquisition, and the UK’s antitrust regulator is reconsidering its decision to block the deal. Microsoft also signed a break with Sonyone of the biggest opponents to the deal, agreeing to keep Call of Duty on the Japanese company’s PlayStation console for a decade after the acquisition closes.

BlackRock Detour? The investment firm has appointed Amin Nasser, the chief executive of Aramco, the Saudi oil giant, to its board. The decision was criticized by some as hypocritical, due to the public commitments made by Larry Fink, the head of BlackRock, to ESG principles and advocacy for decarbonization. But the US company said Nasser understood “the global energy industry and the drivers of the shift to a low-carbon economy.”

A titan of venture capital is exiting. Michael Moritz is set to leave Sequoia Capital, the venture capital firm, after a career as one of Silicon Valley’s most successful investors. The Welsh-American former journalist has backed companies including Google, Yahoo, YouTube and PayPal, earning him a reputation for spotting businesses that become global giants and make huge profits.

“Barbenheimer” rocks the box office. The movie business is gearing up for what is expected to be one of its best weekends in years. The reason? Two very different movies that many people plan to see back-to-back: “Barbie” and “Oppenheimer.” Consumers bought more than 200,000 tickets to see the double feature, according to the National Association of Theater Owners, the industry lobby group.

Large language models, or LLMs, the systems of artificial intelligence, which powerful tools like ChatGPT, are developed using enormous libraries of text. Books are considered especially useful training material because they are long and (hopefully) well written. But authors are beginning to push back against their work being used this way.

this week, more than 9,000 authorsincluding Margaret Atwood and James Patterson, called on tech executives to stop training their tools on the work of writers without compensation.

That campaign drew attention to an arcane part of the internet: so-called shadow libraries, such as Library Genesis, Z-Library or Bibliotik, which are obscure repositories storing millions of titles, in many cases without permission – and are often used as AI training data.

AI companies have admitted in research papers that they rely on shadow libraries. OpenAI’s GPT-1 was trained on BookCorpus, which has more than 7,000 unpublished titles scraped from the self-publishing platform Smashwords.

To train GPT-3, OpenAI said that about 16 percent of the data it used came from two “online book bodies,” which it called “Books1” and “Books2.” According to a trial by comedian Sarah Silverman and two other authors against OpenAI, Books2 is most likely a “flagrantly illegal” shadow library.

These sites have been under review for some time. The Authors Guild, which organized the authors’ open letter to tech executives, cited studies in 2016 and 2017 this suggested that text piracy depressed legitimate book sales by as much as 14 percent.

Efforts to shut down these sites faltered. Last year, the FBI, with help from the Authors Guild, charged two people charged with managing Z Library with copyright infringement, fraud and money laundering. But then, some of these sites were moved to the dark web and torrent sites, making them difficult to track. And since many of these sites are run outside the US and anonymously, actually punishing the operators is a tall order.

Tech companies are becoming tighter about the data used to train their systems. This week, Meta researchers published a paper on Flame 2, the company’s LLM, which described using only “a new mix of data from publicly available sources.” In research paper on GPT-4 published in March, OpenAI explicitly noted that it did not disclose anything about how it trained the LLM, citing “the competitive landscape” and “security considerations.”

The Women’s World Cup kicked off in New Zealand this week against a backdrop of booming investment interest in women’s sports. How women’s bonds pull record crowdand bigger (if not equal) sponsorships, investors are pouring money into an industry they say has been undermarketed and underinvested in — betting on growth as social media and streaming make prime-time television less singularly powerful.

Aly Wagner, two-time Olympic gold medalist, helped raise a record $53 million in funds, led by Sixth Street, for Bay FC, new Bay Area football team, this year. DealBook spoke to her from New Zealand, where she is the lead analyst for the Women’s World Cup on Fox, about the business case behind these investments. The conversation has been edited and condensed for clarity.

Sponsorship dollars are still not equal. Why is that?

There’s just a lot more assets and a lot more teams you can partner with on the men’s side than you can on the women’s side.

But the other part of it is that women’s sports have been an undervalued asset for too long. There is a huge opportunity for many of these brands now to have great visibility for target markets at probably a discount from what you would get on the men’s side.

Two previous efforts to launch new women’s teams in the Bay Area collapsed when fans didn’t show up. Why will Bay FC, which you co-founded, succeed?

Because, while it was incredible what some of the previous iterations of professional women’s soccer did in the Bay Area, it really wasn’t a business proposition. It was not looked at because there would be an ROI and that this was something valuable and worth holding as a long-term asset. This was regarded as a moral cause.

And yet, media rights still lag far behind. Apple recently signed a 10-year, $2.5 billion deal with Major League Soccer. The National Women’s Soccer League’s deal with CBS, which was signed in 2020, was worth $4.5 million over three years. How important is equity to ROI?

Mass media is massive. It’s one of the biggest levers you can pull in terms of revenue for the different clubs. What is interesting about our time, however, is the media game itself is changing. Would you like to be equal from Day 1? Certainly. But what is equal? How many years has MLS been around? How many eyeballs do they put on their sport? They went behind a paywall. Was that challenging? Probably.

As the media game changes, I think we can be really creative, and because we’re a new league, we can be smart in that regard.

Alex Ohanian called underinvestment in women’s sport “a legacy of gross business incompetence.” Is it simply sexism, or something more nuanced?

Culturally, we are all brought up with certain stories – some of them conscious, some of them unconscious. I think the biggest hurdle we’ve had to overcome is just that a lot of the world believes in seeing things before they believe them. Men played sports long before women were at a competitive level, right? And long before it became an investment opportunity. And so we were right behind in that development.

Thanks for reading! We’ll see you on Monday.

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