Charisma only goes so far

Hey, this is Sankalp in New Delhi. India’s answer to PayPal, and its charismatic founder Vijay Shekhar Sharma, are battling their biggest cr [View in browser]( [Bloomberg]( Hey, this is Sankalp in New Delhi. India’s answer to PayPal, and its charismatic founder Vijay Shekhar Sharma, are battling their biggest crisis yet. But first... Three things you need to know today: • Apple is building an AI coding tool to [compete with Microsoft]( • Silicon Valley Bank is back in [hiring mode]( • Rakuten will offer [satellite-to-mobile service from 2026]( Much ado about nothing known 45-year-old Sharma convinced Masayoshi Son and Warren Buffett to back his startup Paytm in its early days, but he couldn’t win over India’s banking regulator this year. On Jan. 31, Paytm bank was slapped with [curbs]( for persistent non-compliance. All of the firm’s operations reliant on its banking infrastructure — from QR codes and card machines to merchant accounts — were suddenly in need of another bank to support them. Now Sharma is having to work magic to get his payments empire back on track, just as things were beginning to look up. But how did things go so awry for India’s recognized fintech pioneer? To the average Indian, Paytm is to payments what Colgate is to teeth — the first brand they think of. It was a matter of transparency. When Paytm Payments Bank Ltd. was finally barred from accepting fresh deposits in its customer accounts, that action came after years of warnings about questionable data flows between the listed Paytm parent and the payments bank where Sharma is the majority shareholder with a 51% stake. Was the measure overdue or overzealous? That’s hard to tell, because it’s not just companies who are a little too opaque in their decisions. The regulators [can do better too](. More informative and timely disclosures — both from businesses and state overseers — would minimize the risk of nasty surprises. Investors and competitors are watching keenly. Paytm scored India’s biggest initial public offering back in 2021, but its stock market debut was so poorly received that it put off smaller rival MobiKwik from pursuing its own listing. Walmart Inc.’s PhonePe is eyeing an IPO in the country now, and it’ll likely learn from Paytm’s travails. The cost of opacity extends further. Son’s SoftBank Group Corp. was one of Paytm’s biggest backers, setting up its Japan service PayPay and kick-starting it with lavish introductory promotions. But its Vision Fund sold off the majority of its stake in Paytm before the firm’s shares plunged at the end of January, citing uncertainty about India’s regulatory environment. If those issues are apparent from as far out as Japan, India can certainly take further measures to boost investor confidence. The Paytm debacle will be resolved, I’m sure, but other payments players aren’t waiting around. They’re jumping in to capitalize now, with their sales reps cajoling mom-and-pop store owners to shift loyalties. In the past two weeks, Paytm rivals including Slice and Razorpay have cranked up an advertising blitz. “Business runs best when it runs on PhonePe,” reads a Feb. 5 full-color campaign occupying the entire front page on The Times of India, the country’s biggest English-language daily.—[Sankalp Phartiyal](mailto:sphartiyal@bloomberg.net) The big story OpenAI revealed a new AI system that can generate realistic videos based on text prompts. Named Sora, the new tool makes OpenAI the latest artificial intelligence company to join the [generative video technology wave.]( One to watch [Watch the Bloomberg Technology TV interview]( with Stephen Balaban, chief executive officer of cloud-computing startup Lambda. Get fully charged Google opened a Paris hub for its AI research team while the city positions itself as a [European capital of AI.]( Meta released new guidelines for small advertisers on Facebook and Instagram to help them [avoid Apple fees.]( Microsoft is taking four Xbox exclusives to Nintendo’s Switch and [Sony’s PlayStation.]( Google rolls out Gemini 1.5, a new version of its AI model that can process [larger amounts of text and video.]( The US Federal Trade Commission wants to penalize companies for [using AI to impersonate someone.]( More from Bloomberg Bloomberg Technology Summit: Led by Bloomberg Businessweek Editor Brad Stone and Bloomberg TV Host and Executive Producer Emily Chang, this full-day experience in downtown San Francisco on May 9 will bring together leading CEOs, tech visionaries and industry icons to focus on what's next in artificial intelligence, the chip wars, antitrust outcomes and life after the smartphone. 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