A Waymo rider-only robotaxi is seen during a test ride in San Francisco on Dec. 9, 2022.
Paresh Dave | Reuters
Alphabet is again investing in its self-driving car unit Waymo — this time with $5 billion.
“This new round of funding will enable Waymo to continue to build the world’s leading autonomous driving company,” Alphabet’s outgoing finance chief Ruth Porat said Tuesday on the company’s second-quarter earnings call, adding Waymo is an “important example” of Alphabet’s long-standing investments.
Porat announced the “multiyear” investment on the call and said more information would be available in the company’s quarterly Securities and Exchange Commission filing, expected on Wednesday.
Alphabet’s “Other Bets” unit, which includes Waymo, delivered $365 million in quarterly revenue, up from $285 million a year ago. But the unit’s losses widened to $1.13 billion from $813 million in the year-earlier period.
CEO Sundar Pichai said on the earnings call that Waymo provides 50,000 weekly paid trips, primarily in San Francisco and Phoenix. It has completed 2 million trips to date. In June, Waymo removed the waitlist and opened Waymo rides to all San Francisco users.
The unit raised $2.25 billion in its first external funding round in 2020. The company raised another $2.5 billion in 2021 in a round that included funding from Andreessen Horowitz, AutoNation, Canada Pension Plan Investment Board, Fidelity Management & Research Company and more.
Alphabet’s increased investment in Waymo comes after General Motors’ autonomous vehicle unit Cruise said it would indefinitely delay the production of the Origin, a self-driving shuttle designed for use in cities. Tesla on Tuesday delayed plans to unveil its CyberCab, a dedicated robotaxi, from August to Oct. 10.
“Alphabet has committed up to $5B to Waymo,” Waymo CEO Tekedra Mawakana said on X. “We are grateful for their immense vote of confidence in our team and recognizing the amazing progress we’ve made with our technology, product, and commercialization efforts.”
Shares of Pinterest popped 18% in extended trading Tuesday after the company reported first-quarter results that beat analysts’ estimates and showed its fastest revenue growth since 2021.
Here’s how the company did, compared to LSEG analyst expectations:
Earnings per share: 20 cents adjusted vs. 13 cents expected
Revenue: $740 million vs. $700 million expected
Revenue for the quarter jumped 23% from $602.6 million a year earlier. Pinterest’s net loss for the first quarter narrowed to $24.8 million, or a 4 cent loss per share, from $208.6 million, or a 31 cent loss per share, a year earlier.
Pinterest reported 518 global monthly active users (MAUs) for the first quarter, up 12% year over year. Wall Street was expecting MAUs 504.9 million, according to StreetAccount. Pinterest said Generation Z is its fastest-growing, largest and most engaged demographic on the platform.
The company’s average revenue per user was $1.46 for the period, while StreetAccount was expecting $1.40 per user.
In its first-quarter release, Pinterest CEO Bill Ready said the company is driving greater returns for advertisers because of its investments in AI and shoppability.
“We’re executing with tremendous clarity and focus, shipping new products and experiences that users want, and in doing so, we’re finding our best product market fit in years,” Ready said.
Digital advertising companies like Pinterest have started growing again after a brutal 2022, when brands reined in spending to cope with high levels of inflation. Meta, Snap and Google parent Alphabet all reported first-quarter results last week that exceeded analysts’ estimates for revenue.
For its second quarter, Pinterest expects to report revenue between $835 million and $850 million, which equates to growth of 18% to 20% year over year. Analysts were expecting revenue of $827 million.
British digital bank Monzo on Tuesday raised $430 million in fresh capital from investors to help it relaunch its services in the U.S.
Monzo raised the money in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet.
HongShan, the Chinese venture capital firm that split from Sequoia Capital last year, also backed the round, alongside existing backers Tencent and Passion Capital.
Monzo, which is one of the U.K.’s most popular app-only banks, said the fresh cash would be used to accelerate its expansion plans. The bank’s CEO, TS Anil, told the Financial Times the capital would allow Monzo to crack the U.S. market after its previous foray was curtailed by U.S. regulators.
“With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives,” Monzo CEO TS Anil said in a statement.
“Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission — now we’ll scale to even greater heights and seize the huge opportunity ahead.”
The fresh cash comes off the back of bumper growth for Monzo in 2023.
The U.K. neobank entered the black for the first time in the first two months of 2023. That came as Monzo reported 88% growth in revenues to £214.5 million ($272 million), up from £114 million in 2022.
A fair portion of the cash will be allocated toward helping Monzo relaunch its services in the U.S.
Monzo previously tried launching in the U.S. in 2019, with a beta product available for American consumers. The company was live in the U.S. via a partnership with the community bank Sutton Bank.
It wanted to acquire a full U.S. bank license, but it was forced to abandon this plan in 2021 after a fruitless two-year discourse with regulatory authorities.
Monzo has since opted to focus on re-entering the U.S. with a partnership that would allow it to bypass the requirement of getting a full bank license to serve U.S. customers.
The firm began a search for a U.S. CEO in 2023 to spearhead a renewed attempt at cracking the American market. It hired Conor Walsh, a former executive at fintech firm Block’s Cash App division, as its new U.S. CEO in October 2023.
Monzo’s new round also comes after a focus on new products for the bank. Monzo made its first foray into investment products in 2023, launching investment pots that allow customers to park their cash at a range of funds managed by BlackRock with different levels of risk.
Monzo said it now has more than 9 million retail customers in the U.K., and that it added 2 million of those clients in 2023 alone. The company also has 400,000 business banking customers.
Nvidia CEO Jensen Huang attends a media roundtable meeting in Singapore on Dec. 6, 2023.
Edgar Su | Reuters
Nvidia reported fourth fiscal quarter earnings that beat Wall Street’s forecast for earnings and sales, and said that revenue during the current quarter would be better than expected, even against elevated expectations for massive growth.
Nvidia shares rose about 6% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting for the quarter ending in January, based on a survey of analysts by LSEG, formerly known as Refinitiv:
Earnings: $5.15 per share, adjusted, versus $4.64 per share expected.
Revenue: $22.10 billion, versus $20.62 billion expected.
Nvidia said it expected $24.0 billion in sales in the current quarter. Analysts polled by LSEG were looking for $5.00 per share on $22.17 billion in sales.Â
Nvidia reported $12.29 billion in net income during the quarter, or $4.93 per share, up 769% versus last yearâs $1.41 billion or 57 cents per share.Â
Nvidia has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models, which are developed on the company’s pricey graphics processors for servers.
Nvidia’s total revenue rose 265% from a year ago, based on strong sales for AI chips for servers, particularly the company’s “Hopper” chips like the H100, it said.
“Strong demand was driven by enterprise software and consumer internet applications, and multiple industry verticals including automotive, financial services, and healthcare,” the company said in commentary provided to investors.
Those sales are reported in the company’s Data Center business, which now comprises the majority of Nvidia’s revenue. Data center sales were up 409% to $18.40 billion. Over half of the company’s data center sales went to large cloud providers.
Nvidia said its data center revenue was hurt by recent U.S. restrictions on exporting advanced AI semiconductors to China.
The company’s gaming business, which includes graphics cards for laptops and PCs, was merely up 56% year-over-year to $2.87 billion. Graphics cards for gaming used to be Nvidia’s primary business before its AI chips started taking off, and some of Nvidia’s graphics cards can be used for AI.
Nvidia’s smaller businesses did not show the same meteoric growth. Its automotive business declined 4% to $281 million in sales, and its OEM and other business, which includes crypto chips, rose 7% to $90 million. Nvidia’s business making graphics hardware for professional applications rose 105% to $463 million.
Snap Inc. co-founder and CEO Evan Spiegel speaks during the Viva Technology conference dedicated to innovation and startups, at the Porte de Versailles exhibition center in Paris, June 17, 2022.
Benoit Tessier | Reuters
Snap on Tuesday reported revenue that trailed analysts’ estimates and issued a forecast that came in a bit below Wall Street expectations. The stock plunged 30% in extended trading.
Here’s how the company did:
Earnings per share: 8 cents adjusted vs. 6 cents expected by analysts, according to LSEG, formerly known as Refinitiv
Revenue: $1.36 billion vs. $1.38 billion expected, according to LSEG
Global daily active users: 414 million vs. 412 million expected, according to StreetAccount
Average revenue per user: $3.29 vs. $3.33 expected, according to StreetAccount
Snap has struggled to rebound from the downturn in the digital ad market and has now reported six straight quarters of single-digit growth or sales declines. For the fourth quarter, revenue rose about 5% year over year to $1.36 billion from $1.3 billion a year earlier.
The company attributed some of the weakness to the war in the Middle East, which erupted in October, beginning with Hamas’ attack on Israel.
“While we are encouraged by the progress we are making with our ad platform and the improved results we are delivering for many of our advertising partners, we estimate that the onset of the conflict in the Middle East was a headwind to year-over-year growth of approximately 2 percentage points in Q4,” Snap said in a letter to investors.
Growth is expected to accelerate in the first quarter, but not quite as fast as analysts were expecting. Snap forecast sales for the quarter of $1.095 billion to $1.135 billion, representing about 11% growth at the midpoint of the range, which was $1.115 billion. Analysts were looking for revenue of $1.117 billion.
Daily active users for the first quarter will be 420 million, Snap said, slightly topping analyst estimates of 419.3 million.
Snap shares sank below $12 after Tuesday’s report. They closed at $17.45 and were up 3% for the year prior to the earnings announcement after soaring 89% in 2023.
Earlier this week, Snap said it would cut 10% of its global workforce, which equates to about 500 employees. A company spokesperson told CNBC in a statement that the cuts were intended to reorganize staff and “reduce hierarchy and promote in-person collaboration.” In mid-2022, Snap eliminated about 1,000 employees, or 20% of its full-time workforce.
Snap’s net loss for the quarter narrowed to $248.2 million, or 15 cents a share, which represents a 14% year-over-year decrease from $288.5 million, or 18 cents a share.
The company said it expects an adjusted EBITDA loss between $55 million and $95 million in the first quarter, higher than analyst projections of $21.9 million. Last quarter, Snap issued an “internal forecast” for the fourth quarter instead of providing official guidance because of “the unpredictable nature of war,” it said, referring to the Israel-Hamas war.
Snap on Tuesday disclosed sales in its Snapchat+ subscription service for the first time and said it had an annualized revenue run rate of $249 million in 2023. The service now has 7 million subscribers, up from 5 million in the previous quarter. Snap introduced the product in 2022, pitching it as a way for users to access early features. It debuted that summer for $3.99 a month.
Snap and Pinterest are “much smaller companies that have struggled to build substantial ad businesses,” Debra Aho Williamson, an industry analyst, told CNBC. “In this environment, the big are getting bigger.”
Last week, Snap CEO Evan Spiegel attended a Senate Judiciary Committee hearing on child safety and technology alongside Meta CEO Mark Zuckerberg, X CEO Linda Yaccarino, TikTok CEO Shou Zi Chew and Discord CEO Jason Citron. Lawmakers grilled the executives, accusing them of failing to properly safeguard their respective social media platforms from child predators, among other concerns.
Pinterest will report fourth-quarter earnings Thursday.
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments. 1. U.S. stocks were mixed Tuesday as investors prepared for Big Tech earnings. On deck after the bell are Club names Microsoft and Alphabet . Jim Cramer said investors should watch what Microsoft has to say about the monetization of its generative artificial intelligence offerings. Starbucks , another portfolio name, is also set to release earnings late Tuesday. We expect a shortfall. Looking at the broader market, Jim said investors should watch out for the Fed’s interest rate announcement Wednesday afternoon. “This is a classic day where people are trying to figure out if the Fed is going to screw everybody,” Jim added. 2. Danaher stock was up over 3% in late morning trading, reversing a decline of about that much in the premarket. Management shared a brighter outlook for revenue and said underlying demand for biologic medicines should strengthen. “This is an actual resurrection” for Danaher, Jim said, adding that when the Fed starts cutting rates, spending in the biotech sector should improve. Still, we’re watching out for any destocking headwinds that may impact the company moving forward. Watch your email and texts for our full Danaher quarterly earnings analysis later in the afternoon. 3. Wall Street issued a bullish call around the major U.S. banks. Morgan Stanley analysts said that Basel Endgame — forthcoming regulations that require banks to hold more capital — is less of a concern than when initially proposed. “This opens the door for a significant increase in buybacks, as large-cap banks have the highest excess capital levels ever,” the analysts argued in a new research note. Morgan Stanley analysts increased their Wells Fargo price target as a result. The analysts also mentioned an improved backdrop for capital markets. While they can’t cover themselves, a rebound in IPOs and M & A would likely boost Morgan Stanley’s crucial investment banking segment. (Jim Cramer’s Charitable Trust is long WFC, MS, DHR, MSFT, GOOGL, SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Google headquarters in Mountain View, California, on Jan. 30, 2023.
Marlena Sloss | Bloomberg | Getty Images
Google cut dozens of jobs in its news division this week, CNBC has learned, downsizing at a particularly sensitive time for online platforms and publishers.
An estimated 40 to 45 workers in Google News have lost their jobs, according to an Alphabet Workers Union spokesperson, who didn’t know the exact number.
A Google spokesperson confirmed the cuts but didn’t provide a number, and said there are still hundreds of people working on the news product.
“We’re deeply committed to a vibrant information ecosystem, and news is a part of that long-term investment,” the spokesperson said. “We’ve made some internal changes to streamline our organization. A small number of employees were impacted. We’re supporting everyone with a transition period, outplacement services and severance as they look for new opportunities at Google and beyond.”
Google News presents links to articles from thousands of publishers and magazines. It’s a popular tab for people who use Google search, allowing them to find top-ranked stories on a particular topic.
The layoffs come amid a war between Israel and Hamas that has claimed thousands of lives in both Israel and Gaza since Oct. 7, and 20 months after Russia invaded Ukraine. Both wars have spawned a surge in the spread of misinformation across the web, heightening the importance of Google and other sites that users count on to find up-to-date news.
Sen. Michael Bennet, D-Colo., on Tuesday asked for information on how Google; X, formerly known as Twitter; Meta; and TikTok were trying to stop the spread of false and misleading content about the Israel-Hamas conflict on their platforms.
European Union industry chief Thierry Breton demanded that companies, including Google, take stricter steps to battle disinformation as the conflict escalates. Breton specifically addressed letters to Google CEO Sundar Pichai and YouTube CEO Neal Mohan, reminding them of the content moderation requirements under the EU’s Digital Services Act.
Google’s spokesperson said, “These internal changes have no impact on our misinformation and information quality work in News.”
Some tech companies said they’ve staffed up on content moderators as they scramble to battle misinformation.
Meanwhile, Canada and other countries are eyeing laws that would force tech platforms to compensate publishers for their work.
The cuts in Google News follow widespread layoffs across many parts of the company this year. In January, Google announced it was cutting 12,000 jobs, affecting roughly 6% of the full-time workforce. Last month, the company eliminated hundreds of positions from its recruiting organization.
A staff engineer at Google News wrote a post on LinkedIn on Tuesday regarding the layoffs.
“These are some of the best and brightest people I’ve ever worked with,” the person wrote. “We’re definitely worse off without them.”
A woman crossing a normally busy stretch of downtown San Francisco suffered serious injuries Monday night after a hit-and-run driver struck her, throwing her into the path of an oncoming driverless Cruise car, which then ran her over, according to video recorded by the autonomous vehicle that Cruise showed to the NBC Bay Area Investigative Unit.
Courtesy NBC Bay Area
A San Francisco woman was seriously injured after a hit-and-run driver struck her Monday evening, hurling her underneath the autonomous Cruise vehicle.
Police responded around 9:30 pm to a hit-and-run incident at the intersection of Fifth and Market Streets, San Francisco police told CNBC. The force of the impact hurled the pedestrian in front of a Cruise vehicle, which applied the brakes “aggressively” and remained in place at the request of police, a Cruise spokesperson and San Francisco police said.
Police rendered aid at the scene before medics transported the woman to the hospital, the police said.
“Our heartfelt concern and focus is the wellbeing of the person who was injured and we are actively working with police to help identify the responsible driver,” a Cruise spokesperson told CNBC. The Cruise vehicle did not have a passenger in it.
Police haven’t found witnesses as of Tuesday morning, NBC Bay Area reported, but Cruise vehicles have numerous cameras inside and outside the vehicle and captured much of the incident. CNBC reviewed footage from the incident, which shows both the Cruise vehicle and the hit-and-run car driving along Fifth Street.
A woman crossing a normally busy stretch of downtown San Francisco suffered serious injuries Monday night after a hit-and-run driver struck her, throwing her into the path of an oncoming driverless Cruise car, which then ran her over, according to video recorded by the autonomous vehicle that Cruise showed to the NBC Bay Area Investigative Unit.
Courtesy NBC Bay Area
The hit-and-run driver struck the pedestrian as both cars were crossing Market Street. The pedestrian did not appear to be using a marked crosswalk. The woman was thrown across the hit-and-run vehicle into the right lane where the Cruise vehicle was driving. The Cruise vehicle came to an immediate stopafter the impact. NBC Bay Area reported that the woman was trapped underneath the left rear axle of the vehicle and that San Francisco Fire was forced to use the “jaws of life” to extricate her.
First responders told NBC Bay Area that the woman suffered multiple traumatic injuries and was transported to Zuckerberg San Francisco General Hospital. San Francisco police said the pedestrian’s status is unknown.
Microsoft CEO Satya Nadella arrives at federal court on October 2, 2023 in Washington, DC. Nadella is testifying in the antitrust trial to determine if Alphabet Inc.’s Google maintains a monopoly in the online search business, which is expected to last into November.
Drew Angerer | Getty Images
When it comes to online search, it’s Google’s web and everyone else is playing in it, according to rival Microsoft.
That was the essence of Microsoft CEO Satya Nadella’s testimony in federal court on Monday as part of the government’s antitrust trial against Google. Nadella told the court that Google’s dominant market share in online search means that publishers and advertisers shape their content to Google’s requirements, making it harder for competitors like Microsoft’s Bing to gain a foothold.
“Everybody talks about the open web, but there is really the Google web,” Nadella said from the stand in Washington, D.C., District Court. Nadella was referring to the way publishers often cater their content and advertising to Google’s products, like by optimizing their pages for how Google ranks search results.
Nadella was questioned by lawyers for the Department of Justice and a coalition of state attorneys general who are suing Google for allegedly violating antitrust laws by illegally maintaining a monopoly in the general search market. The government argues that Google locked up distribution channels for general search engines through exclusive deals with browser and phone makers to be the default choice on various devices. Perhaps the most famous of those deals is the multibillion-dollar agreement between Google and Apple to make Google search the default on Apple products like the iPhone.
The government has tried to make the case that Google’s dominance, aided by these exclusive deals, creates a flywheel effect, where greater exposure to users leads to more data to make Google’s search results better and attracts more advertisers to the product. That, in turn, generates more revenue that can be used to fund these massive distribution deals.
Meanwhile, the government argues, it becomes even harder for rivals to breakthrough to consumers, and as a result, they miss out on the opportunity for greater benefits or innovations in search.
Nadella affirmed that argument in his testimony Monday, describing the obstacles a general search competitor like Bing faces to gain more market share from Google.
Google declined to comment on Nadella’s testimony.
Microsoft was prepared to take on billions of dollars in short-term losses for Bing to pay Apple enough to make its search engine the default on Apple products, Nadella testified. Not only would Microsoft have to replace the revenue Apple currently receives from Google for default placement, which Bernstein has estimated could be as much as $19 billion this year, Nadella said it would also need to cover the risk Apple would take on by switching the default.
Nadella has “focused every year of my tenure as CEO to see if Apple would be open” to accepting a default offer from Microsoft and they’ve had “a series of dialogues on it.”
The Microsoft CEO said he recognized the reputational risk of switching the default but pointed to an example from Apple’s own history as to why he believed it could be overcome. When Apple first launched its maps app, it was widely panned as inaccurate or incomplete. But after a period of “turbulence,” Nadella said, it’s become popular, in large part due to the fact that Apple makes it the default on its phones.
Williams & Connolly’s John Schmidtlein, representing Google, referenced a document during cross-examination that said Bing’s share on Windows was roughly 24%. Schmidtlein asked why Nadella thought that percentage would convince Apple to switch its Safari default to Bing, given Bing was able to have “100% distribution” on Microsoft Windows.
Nadella said the most important thing was showing that Bing could hold on to users with defaults, despite Google’s dominance. He said that argument “was the only reason they kept engaging,” referring to Apple.
If Apple were to strike a deal with Microsoft, it may choose to use Bing’s technology while branding it as its own Apple search engine, he said.
Schmidtlein also walked Nadella through past attempts Microsoft has made to make Bing the default on various mobile devices, which were met with public criticism or resulted in many consumers switching to Google anyway. For example, he brought up a 2010 Washington Post article that criticized the decision to make Bing the default search engine on a new Android phone offered by Verizon at the time.
But Nadella said that kind of feedback actually informed his later conversations with Apple while seeking to make Bing the default on its devices, because he was clear-eyed about the challenges both companies would initially need to navigate should such a deal occur.
Throughout his testimony, Nadella discussed why Microsoft has chosen to stay in search despite the difficulties, describing how the company is remaining persistent and continuing to wait for the right opportunity to shake up the market.
The tech company wants to “make search more competitive,” Nadella said, by running it like a “public utility.”
The idea that users have complete choice to switch their defaults is “complete bogus,” Nadella said, adding that changing default settings on mobile platforms is difficult because “they’re all locked up.”
Becoming the default isn’t just about getting an influx of new users. It also involves getting more signals from users about what they’re searching and clicking on. That sort of information can help inform decisions at the search engine to make the results more useful and tailored to users’ needs.
Even though Microsoft remains, as Nadella put it, a “very, very low-share player,” in the general search market, he said the company still believes there’s an opportunity to innovate in what he sees as the “largest software category out there.” He said that when he became CEO in 2014 he focused on making Bing profitable to continue making investments, which it now is.
While maintaining its low-share position, Nadella said he awaits a “paradigm shift” that could create a window of opportunity for Bing, like the one created for Google by the concessions resulting from Microsoft’s own antitrust challenge from the government at the turn of the century.
In the meantime, Nadella estimated that Microsoft has invested about $100 billion in Bing over the past 20 years.
“It’s a hard game to make any breakthroughs, but no one can accuse us of not being persistent,” Nadella said.
Building a new rival from the ground up is very difficult because it involves both fixed costs and costs that scale up as you gain market share, Nadella said. In Silicon Valley, internet search is considered one of the biggest “no fly zones,” he added.
The one place Bing has seen some success is in desktop search, in large part because it’s able to set Bing as the default on its Edge browser, which many PC manufacturers choose to preinstall to receive a discount on licensing Microsoft’s software.
Even there, however, many users opt to use Google’s Chrome browser and its search engine on Windows devices. Nadella said Google’s position on Windows desktops shows how open Microsoft’s own ecosystem is. He admitted, though, that Google is still the most commonly queried word on Bing.
Still, questioning by Google’s lawyer seemed to drive at the idea that Microsoft did not sufficiently invest in mobile search, pointing to emails where executives estimated Google had many more people working on mobile search than Microsoft did. Nadella said he focused resources where they could gain the most traction, like on desktop, and greater distribution would help justify greater expenditure.
Later asked by a government lawyer why Google would pay so much if it were the case that it would retain more Safari search queries even if Bing were the default, Nadella said he’d “love an opportunity” for Google not to have to pay.
“Maybe on behalf of the Google shareholders,” he added.
The state AGs are also seeking to show that Google leveraged its search ad tools to disadvantage rivals like Bing by failing to make them sufficiently interoperable with other products. Microsoft has sought to make it so advertisers can move their campaigns seamlessly between Google and Bing’s search ad tools, but Google hasn’t been receptive, Nadella said.
Though Nadella said he doesn’t remember exactly where everything stands in their discussions, he summarized it as, “We keep asking for them to add some features that we want and I think they ask us to go pound sand.” He said the integration issues with Google’s Search Ads 360 “keeps coming up in escalations” to him.
Through advertiser roundtables, Nadella said he’s found that many believe there’s an opportunity cost they have to weigh between investing time and money into Bing versus Google’s platform, given it’s not as easy as it could be to transfer campaigns, and Google has the bigger audience.
As artificial intelligence becomes increasingly prevalent in search, Nadella said he worries that Google will leverage its position to block off even more avenues to rivals. Microsoft has begun integrating ChatGPT into its Bing search results through its partnership with OpenAI and is a leading player in the space, alongside Google. But despite the early progress, Nadella says he worried about being cut off from key datasets that could be used to train the technology.
“I worry a lot, even in spite of my enthusiasm, that there is a new angle with AI,” Nadella said. “I worry a lot that this vicious cycle I’m trapped in can become even more vicious.”
That’s because Google could seek to make it so that content in its search engine and on its video platform YouTube are exclusively used to train its own AI large language models (LLMs).
Competing with Google’s core economic advantage will “become even harder in the AI age,” Nadella said.
He said he’s wondered if AI will make it “even worse of a nightmare to make progress in search because there’s a new avenue to lock up — the thing that basically feeds the power of these LLMs, which is content.”
Arm CEO Rene Haas and executives cheer as Softbank’s Arm, a chip design firm, holds an initial public offering at the Nasdaq MarketSite in New York, Sept. 14, 2023.
Brendan Mcdermid | Reuters
Arm Holdings, the chip design company controlled by SoftBank, jumped nearly 25% during its first day of trading Thursday after selling shares at $51 a piece in its initial public offering.
At the open, Arm was valued at almost $60 billion. The company, trading under ticker symbol “ARM,” sold about 95.5 million shares. SoftBank, which took the company private in 2016, controls about 90% of shares outstanding.
On Wednesday, Arm priced shares at the upper end of its expected range. On Thursday, the stock first traded at $56.10 and ended the day at $63.59.
It’s a hefty premium for the British chip company. At a $60 billion valuation, Arm’s price-to-earnings multiple would be over 110 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% growth forecast for the current quarter.
Arm Chief Financial Officer Jason Child told CNBC in an interview that the company is focusing on royalty growth and providing products to its customers that cost and do more.
Many of Arm’s royalties come from products released decades ago. About half the company’s royalty revenue, which totaled $1.68 billion in 2022, comes from products released between 1990 and 2012.
“As a CFO, it’s one of the better business models I’ve seen. I joke sometimes that those older products are like the Beatles catalog, they just keep delivering royalties. Some of those products are three decades old,” Child said.
In a presentation to investors, Arm said it expects the total market for its chip designs to be worth about $250 billion by 2025, including growth in chip designs for data centers and cars. Arm’s revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion.
Arm’s architecture is used in nearly every smartphone chip and outlines how a central processor works at its most basic level, such as doing arithmetic or accessing computer memory.
Child said the company sold $735 million in shares to a group of strategic investors comprising Apple, Google, Nvidia, Samsung, AMD, Intel, Cadence, Synopsis, Samsung and Taiwan Semiconductor Manufacturing Company. It’s a testament to Arm’s influence among chip companies, which rely on Arm’s technology to design and build their own chips.
“There was interest to buy more than what was indicated, but we wanted to make sure we had a diverse set of shareholders,” Child said.
In an interview with CNBC on Thursday, SoftBank CEO Masayoshi Son emphasized how Arm’s technology is used in artificial intelligence chips, as he seeks to tie the firm to the recent boom in AI and machine learning. He also said he wanted to keep the company’s remaining Arm stake as long as possible.
The debut could kick open the market for technology IPOs, which have been paused for nearly two years. It’s the biggest technology offering of 2023.
Kent Walker speaks at a “Grow with Google” launch event in Cleveland.
via Google
Googlepreviewed Friday how it plans to fight off the U.S. government’s charges of illegal monopolization when it goes to trial in D.C. District Court next week.
The trial marks the first major tech antimonopoly case in the U.S. in decades, after the Department of Justice successfully argued Microsoft had violated antitrust law more than 20 years ago.
The DOJ and a coalition of state attorneys general allege in this case that Google used exclusionary contracts with browser-makers like Apple and phone manufacturers that use its Android operating system to cut off rivals from access to the general search market. The states will also argue that Google failed to make its search advertising tool interoperable with Microsoft’s Bing, in order to allegedly keep advertising spending limited to its own services.
Google has maintained that the government’s case is “deeply flawed.” Here are the key elements of its defense, as laid out by Google President of Global Affairs Kent Walker in a blog post on Friday:
Google’s distribution agreements haven’t harmed competition for search, as evidenced by the wide range of services that offer search tools. Walker points to platforms like TikTok, Reddit, Instagram and Amazon — a larger group than direct competitors like Microsoft’s Bing and DuckDuckGo that the government considers part of the relevant market.
It’s browser and device makers that choose to feature default search engines in the first place, and they chose Google “based on the quality of our products,” according to Walker. He pointed to Apple CEO Tim Cook’s comments in 2018 that Google’s search engine is the “best.”
Google isn’t the only company that pays for prominent placement on browsers, Walker wrote. Bing and Yahoo! also pay to be featured in Apple’s Safari.
Google’s payments to device makers and carriers to promote its search product and browser are just marketing, per Walker, similar to a cereal brand paying a supermarket to place its boxes at eye-level on the shelf.
Consumers can easily change search engine defaults on their devices if they prefer another service. Google says it takes as few as two clicks to change the default on Safari’s desktop version and just a few more than that on mobile devices. Walker wrote that consumers showed a willingness to do this in 2014, when many Mozilla users switched their default from Yahoo! to Google.
In order to make its search ad tool as interoperable as states seem to believe it should be, Google would have to prioritize creating features for Microsoft over demands of its own customers, Walker wrote. He added, “American law doesn’t require putting the preferences of your competitors over those of your clients. And Microsoft, which has plenty of resources, has chosen not to build its own search engine management tool.”
The DOJ and the Colorado state AG’s office, which is leading the states’ case, did not immediately respond to requests for comment.
A screenshot of Project Sunroof shows the map data offered by the pilot project, which is meant to help consumers plan solar installations for their homes.
Screenshot
Google is planning to license new sets of mapping data to a range of companies to use as they build products around renewable energy, and is hoping generate up to $100 million in its first year, CNBC has learned.
The company plans to sell access to new APIs (application programming interfaces) with solar and energy information and air quality, according to materials viewed by CNBC.
Among the new offerings will be a Solar API, which could be used by solar installers like SunRun and Tesla Energy and solar design companies like Aurora Solar, according to a list of example customers viewed by CNBC. Google also sees customer opportunities with real estate companies like Zillow, Redfin, hospitality companies like Marriott Bonvoy, and utilities like PG&E.
Some of the data from the Solar API will come from a consumer-focused pilot called Project Sunroof, a solar savings calculator that originally launched in 2015. The program allows users to enter their address and to receive estimated solar costs such as electric bill savings and the size of the solar installation they’ll need. It also offers 3D modeling of the roofs of buildings and nearby trees based on Google Maps data.
Google plans to sell API access to individual building data, as well as aggregated data for all buildings in a particular city or county, one document states. The company says it has data for over 350 million buildings, according to documents, up significantly from the 60 million buildings it cited for Project Sunroof in 2017.
One internal document estimates the company’s solar APIs will generate revenue between $90 and $100 million in the first year after launch. There’s also a potential to connect with Google Cloud products down the line, documents state.
As part of the planned launch, the company is also planning to announce an Air Quality API that will let customers request air quality data, such as pollutants and health-based recommendations for specific locations. It’ll also include digital heat maps of the data and hourly air quality information, as well as air quality history of up to 30 days.
Google did not immediately respond to a request for comment.
The latest revenue play comes as the company has been trying to monetize its maps products as it faces pressure to produce revenue amid a broader economic slowdown. While the company is focusing on becoming more efficient, it’s also been investing in newer technologies like generative AI and sustainability — a market it hopes to take advantage of with the Solar API.
The company currently licenses its mapping API for navigation to companies like Uber, which said in 2019 it paid Google $58 million over there years. Maps API revenue goes toward the company’s cloud segment, which finally turned profitable in the first quarter but has had a rocky path toward trying to compete with market leaders Amazon and Microsoft.
Google doesn’t break out how much its Maps business makes, but it has historically been one of Google’s most under-monetized products, Morgan Stanley analyst Brian Nowak told CNBC in 2021. At the time, Morgan Stanley had estimated Google Maps would earn $11.1 billion by this year as new travel products and promoted pins began to increase ad revenue.
The move also comes as the company attempts to streamline its mapping products. In June, CNBC found the company was laying off employees at traffic-reporting app Waze, which it acquired in 2013, and combining it with the Google Maps team.
Apple CEO Tim Cook arrives for an official State Dinner in honor of India’s Prime Minister Narendra Modi, at the White House in Washington, DC, on June 22, 2023.
Stefani Reynolds | AFP | Getty Images
The most powerful technology companies simply cannot stop talking about artificial intelligence, and in particular, the “generative AI” flavor that can create human-like text, images, and code.
During calls after this week’s earnings reports, Alphabet CEO Sundar Pichai and his team said “AI” 66 times. Microsoft CEO Satya Nadella and his execs said it 47 times. And on Wednesday, Meta CEO Mark Zuckerberg and the Facebook executive team said the magic phrase 42 times, according to a CNBC analysis of transcripts.
But Apple barely talks about artificial intelligence, and you shouldn’t expect to hear much about it during the company’s earnings next week.
Its sober approach to the new technology contrasts deeply with its rivals, which are stoking excitement and elevating expectations every chance they get.
During May’s Apple earnings call, CEO Tim Cook only said “AI” twice, and that was in response to a question. During Apple’s two-hour software launch event in June, it never said the phrase, although it announced several new features powered with AI.
Apple execs instead use the phrase “machine learning,” which is more popular with academics and practitioners. Apple execs also prefer to talk about what software does for the user, such as organizing their photos, improving their typing, or filling out fields in a PDF, as opposed to the technology that makes all that possible.
Apple’s approach to AI as a core underlying component instead of the future of computing represents a way to present the technology to its consumers. Apple’s AI works in the background. And the company doesn’t yell about it the way some of the other companies do because it doesn’t need to.
Google launched Bard AI, it’s own chatbot to rival Microsoft and OpenAI’s ChatGPT.
Jonathan Raa | Nurphoto | Getty Images
A closer look at executive remarks this week from earnings calls shows that while Meta, Microsoft, and Google are eager to sell the shovels for the AI gold rush, such as cloud services and developer tools, it’s still unclear how AI could change their most important products and when it could start bolstering balance sheets.
Google, for example, has announced its plans to revamp its search engine using an AI model called Search Generative Experience. Microsoft’s biggest new initiative is a $30-per-month “Copilot” subscription that integrates generated text or code from partner OpenAI’s ChatGPT into Word, Powerpoint, and other apps. Meta’s most recent investment in AI technology is its own large language model it calls LLaMA, which could underpin new kinds of social media chatbots or automatically generate online ads.
Meanwhile, Apple still makes the bulk of its money from iPhones, which generated $51.3 billion of its $94.84 billion in revenue during the company’s second fiscal quarter. Why talk a big AI game?
Besides, mega-cap tech companies signaled to investors earlier this week in earnings calls that the rollout of AI products could take a while.
In Microsoft’s case, Nadella tempered investor expectations for Copilot, signaling that growth would take time, and CFO Amy Hood said that its rollout would be “gradual.”
It could take until next year before investors understand how the Copilot subscription affects the company’s revenue. “In the second half of the next fiscal year, we’ll start getting some of the real revenue signal from it,” Nadella said.
Google and Pichai say that the company’s text-generating AI models will make its search engine better and could even answer questions that normal Google search can’t. From a business perspective, Pichai said, generative AI used for creating and serving ads will “supercharge” the company’s existing ads business, and there are “opportunities” for new kinds of ads with AI-generated search.
But Pichai still said it’s still “early days” for the new AI-powered search, and later, when pressed about how SGE might increase usage of the search engine, and therefore increase revenue, he said the company was experimenting.
“I think we are definitely headed in the right direction, and we can see it in our metrics and the feedback we’re getting from our users as well,” Pichai said.
Zuckerberg was effusive about AI technology and its applications in virtual reality, ad targeting, and recommending content from accounts users don’t follow.
He was particularly optimistic about a concept called “AI agents,” where software would be able to message business customers automatically without a human involved, or act as a coach, or be a personal assistant.
Still, Zuckerberg admitted he didn’t know how many people would use the new AI features.
“The reality is, we just don’t know how quickly these will scale,” Zuckerberg said. He said Meta was debating internally how much it should spend on servers for AI.
Microsoft – Bing seen on mobile with ChatGPT4 on screen, seen in this photo illustration. On 12 March 2023 in Brussels, Belgium.
Jonathan Raa | Nurphoto | Getty Images
The slow rollout of revenue-generating AI products from Big Tech matters because many people in the technology industry believe that new foundational technologies go through a “hype cycle” based on research from analysis firm Gartner.
When a new technology is introduced, according to the hype cycle model, it gains lots of attention and investment as it reaches a “peak of inflated expectations.” But, as the deployment of the tech moves slower than initially expected, enthusiasm and investment dry up, in a “trough of disillusionment,” before maturing and becoming productive.
For now, shovel-makers and people seeking investment capital are benefiting from the AI boom. Nvidia stock has risen 220% so far in 2023 as investors have realized its GPUs are essential for the technology. Venture capital investment in AI startups has boomed, and many of those dollars are going to Nvidia for computer capacity, and to cloud providers for access to AI models.
But if everyday consumer applications for AI don’t catch on, then many AI companies could slip into the trough of disillusionment again. Analysts found earlier this month, for example, that downloads for OpenAI’s iPhone app slowed earlier this month after launching in May.
Some analysts are starting to understand that an investment opportunity based on new AI products won’t be immediate and that the costs could stack up.
“We cautioned investors that that process of translating early demand to large-scale implementations and recognized revenue will be a multi-year trend rather than an instantaneous flip of a switch,” JPMorgan analyst Mark Murphy wrote this week.
“We recommend investors invest elsewhere until Metaverse, Reels, Threads, Quest and Generative AI investments become accretive (if ever) to META’s [return on invested capital], rather than dilutive,” Needham’s Laura Martin wrote in a note.
UBS analyst Lloyd Walmsley wrote this week that Generative AI was still an “overhang” over Google.
“Management expressed optimism around the ability to solve for ‘deeper and broader’ use cases with Search Generative Experience (SGE), but we do not believe the company is out of the woods with management still describing monetization as having a ‘number of experiments in flight including (for) ads,’” Walmsley wrote.
Apple iPhones are displayed at an Apple store in Chicago on Nov. 28, 2022.
Scott Olson | Getty Images
When Apple reports its earnings next week, analysts will likely press it on its plans for AI, given the industry-wide obsession, and especially after a recent Bloomberg report that said the company was developing a ChatGPT-like language model internally.
Last month, Apple announced new iPhone keyboard software that uses the same transformers architecture as GPT, showing that it has substantial internal development of AI models. It just doesn’t like to talk about products that aren’t out on the market yet to stoke investor anticipation.
Apple is unlikely to discuss AI at length next week as its mega-cap rivals did this week. During Apple’s earnings call in May, when asked about the technology, Cook quickly moved the conversation back to the company’s products and features.
“We view AI as huge and we’ll continue weaving it in our products on a very thoughtful basis,” Cook said.
Alphabet has faced a lot of noise this year around the health of its core search business, due to a slumping digital ad market and the longer-term potential for artificial intelligence chatbots to take traffic.
In its second-quarter earnings report on Tuesday, the company showed it has any numbers of ways to succeed despite those very real challenges.
Google’s revenue rose 7% to $74.6 billion from $69.7 billion in the year-earlier period, topping analysts’ estimates. Profit was also better than expected, driving the stock price up about 6% in extended trading.
Online advertising, which has been a difficult market for the past year, remains slow because of economic concerns and corporate cost cutting. Google’s ad revenue only increased 3.3% from a year earlier, but that’s an improvement from the first quarter, when ad revenue fell. Snap’s second-quarter report was more troublesome, as the company issued a disappointing forecast, sending the stock down almost 20%.
“If you step back, you’re seeing real weakness in linear TV, ad agencies, smaller digital companies,” said Michael Nathanson, an analyst at Moffett Nathanson, on Alphabet’s investor call following the results. “Yet you guys have accelerated your growth this quarter.”
Search revenue, which makes up the majority of Google’s ad business, also saw steady growth. That’s a relief to investors, some of whom have grown concerned that traditional search users will be moving to generative AI chatbots from OpenAI and Microsoft, the startup’s main investor, for their online queries.
Microsoft’s Bing search engine integrated OpenAI’s ChatGPT early this year. However, Google’s search business still expanded, and CEO Sundar Pichai pointed to the company’s homegrown chatbot called Bard, which has been a major focus of investment in recent months.
Executives on Tuesday sounded as if there’s no where to go but up. They made dozens of references to AI on the call, trying to reassure investors that the technology is being used across the company, though Google has yet to say when its search feature, Search Generative Experience (SGE), will be widely available to the public. The company has said SGE will be able to synthesize search results from complex queries.
Overall, AI is a boon, Pichai said.
“Over time, this will just be how search works,” he said, pointing to different search options the company is working on for users. “It really gives us a chance to now not always be constrained in the way search was working before. It allows us to think outside the box. We are ahead of where I thought we’d be at this point in time.”
Pichai gave an example of the company’s plans to automate some customer service for its products using new AI models.
But where Google can benefit no matter what happens in the ad market is on the cloud infrastructure side, where it competes with Amazon Web Services and Microsoft Azure. AI companies are flocking to Google’s cloud technology so they can run the compute-heavy projects that are only available in a few places.
Google’s cloud business, which turned profitable in the first quarter, saw revenue increase 28% in the second quarter to $8 billion, topping analysts’ estimates. Pichai said that more than 70% of so-called unicorns (generally defined as billion-dollar tech startups) in generative AI are Google Cloud customers. They include Cohere, Japser and Typeface.
“There is definitely a lot of interest from customers on AI and they definitely are engaging on many more conversations with us,” Pichai said.
Preply, a language learning platform connecting people with tutors, raised $70 million of fresh capital to ramp up its use of artificial intelligence, the company told CNBC exclusively.
The firm, founded in Ukraine but based in the U.S., said it bagged the funds by issuing new equity and debt. Preply’s founders include Ukrainian entrepreneurs Kirill Bigai, Dmytro Voloshyn, and Serge Lukianov.
The equity portion was led by Horizon Capital, a venture capital firm focused on investing in emerging entrepreneurs, particularly Ukrainians. It was also backed by Reach Capital, Hoxton Ventures and others.
The funding adds to a $50 million Series C funding round Preply raised last year, and takes its total funding raised to over $170 million.
Preply is a marketplace platform that connects people with human tutors to help them learn new languages. Each teacher on Preply shares a profile that tutees can view, and sets an hourly rate for lessons. Preply gets a cut of the hourly rates tutors charge.
Preply also sells to large enterprises such as Datadog, GroupM and Bain, which use it to improve their teams’ foreign language skills. The company is not yet profitable, although revenues grew tenfold in the last three years.
Kirill Bigai, Preply’s co-founder and CEO, said the company would use the funds to “extend our leadership in the [online language learning] category through AI-powered human tutors, providing a learning experience which is quickly becoming a game changer.”
“Though the team today is truly global, as a Ukrainian founded company with significant R&D in Ukraine, this is a milestone to be celebrated. One that echoes the resilience and determination of the Ukrainian tech sector and all Ukrainians,” he added.
The funding comes at a time of tighter fundraising conditions for startups, which are struggling to raise money quite as easily as they did in the 2020 and 2021 boom years of technology triggered by Covid-19 lockdowns and monetary easing.
AI has been a notable exception to that rule, thanks to the popularity of OpenAI’s ChatGPT and tools like it. Many startups are raising seismic sums of cash as venture capitalists try to find the companies that will win from the upswell of demand for AI tools.
Preply said it already uses machine learning to better match learners and tutors. Now, it’s incorporating more AI into its offering, having launched an AI assistant to help tutors come up with exercises, grammar explanations, and conversations starters.
It comes as Duolingo, a competitor to Preply, has been incorporating OpenAI’s GPT language processing software to enhance its app’s personalization to users. Shares of Duolingo have more than doubled in price so far this year. Other rivals to Preply include Babbel and Busuu.
It also highlights ongoing interest from tech investors in Ukraine, which has been battered by Russia since Moscow began an invasion of the country early last year. Horizon Capital raised $125 million for a startup fund aimed at backing Ukrainian founders.
Several founders of billion-dollar “unicorns” come from Ukraine, including Grammarly’s Max Lytvyn and Alex Shevchenko, and GitLab’s Dmitriy Zaporozhets. Google, Samsung and Amazon also have research and development centers in the country.
Sen. Elizabeth Warren (D-MA) speaks during a Senate Banking Committee hearing on Capitol Hill on June 13, 2023 in Washington, DC. The committee held the hearing to review “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.”
Michael A. Mccoy | Getty Images
A group of lawmakers led by Massachusetts Democratic Senator Elizabeth Warren are calling on the Biden administration to investigate how tax prep software companies may have illegally shared customer data with tech platforms Google and Meta.
In a letter to Attorney General Merrick Garland, Federal Trade Commission Chair Lina Khan, Internal Revenue Service Commissioner Daniel Werfel and Treasury Inspector General for Tax Administration J. Russell George, the lawmakers laid out key findings from their own probe expanding on reporting from The Markup and The Verge, which initially revealed the data sharing. The FTC declined to comment on the letter and the other agencies named did not immediately respond to a request for comment.
In a story published last year, the publications jointly reported that tax prep software companies TaxSlayer, H&R Block, and TaxAct had shared sensitive financial information with Meta’s Facebook through a piece of code known as a pixel. The report found that Meta pixel trackers sent names, emails and income information to Meta, in violation of the platform’s policies.
The report also found that TaxAct had sent similar information to Google through its analytics tool, but that information did not include names.
After the initial report, Meta and Google both told CNBC they have policies against customers or advertisers sending them sensitive or identifying information. Some statements the tax prep companies provided to the publications at the time seemed to indicate the data sharing was done accidentally.
Building on the original reporting, the group of seven lawmakers opened their own probe into the extent of the data sharing. Among their findings released Wednesday, the lawmakers said that millions of taxpayers’ information had been shared with Big Tech firms through the tax prep software and that both the tax prep companies and tech firms were “reckless” in how they handled sensitive information. Although the companies said information shared would have been anonymous, the lawmakers found that experts believed it wouldn’t be hard to connect the data to individuals.
Sens. Ron Wyden, D-Ore., Richard Blumenthal, D-Conn., Tammy Duckworth, D-Ill., Bernie Sanders, I-Vt., Sheldon Whitehouse, D-R.I., and Rep. Katie Porter, D-Calif., joined Warren in the investigation and letter.
While the tax prep companies installed Meta and Google’s tools without fully understanding the privacy implications, according to the lawmakers, the two tech platforms failed to provide enough information about how they would collect and use the information gathered through their tools. Although Meta and Google both said they have filters to catch sensitive data that’s inadvertently collected, they seemed to be “ineffective,” the lawmakers wrote.
The probe also found that Meta tools used by TaxAct allegedly collected even more information than previously reported, including the approximate amount of federal taxes a person owed. They said that Meta confirmed it used data collected from the tax software providers “to target ads to taxpayers, including for companies other than the tax prep companies themselves, and to train Meta’s own AI algorithms.”
The group believes that their findings indicate the tax prep companies “may have violated taxpayer privacy laws,” which could result in criminal penalties “up to $1,000 per instance and up to a year in prison,” according to the letter.
After calling for the agencies to investigate and prosecute where necessary, the lawmakers noted that new policies may mitigate the issue in the future.
“We also welcome the recent IRS announcement of a free, direct file pilot next year, which will give taxpayers the option to file taxes without sharing their data with untrustworthy and incompetent tax preparation firms,” they wrote.
Smoke from the Canadian wildfires blankets New York City affecting air quality on June 7th, 2023.
Leslie Josephs | CNBC
Google is telling its East Coast employees to stay home as wildfire smoke fills the air in New York and other major cities.
Company site leads in New York wrote in a memo to workers in the area that air quality in many parts of the region had reached “unhealthy” levels, citing the New York state Department of Environmental Conservation. In New York, most employees have been expected to work from physical offices at least three days a week.
“We are advising Googlers to work from home if possible, and limit their exposure to outdoor air,” according to the note, which was obtained by CNBC. “Terraces across our New York campus will remain closed today.”
According to NBC, the company issued advisory notices to workers in the Detroit area, Washington, D.C., Reston, Virginia, Pittsburgh and Raleigh-Durham, North Carolina. In Canada, which is on track to experience its worst-ever wildfire season, Google notified employees in the Ontario cities of Toronto and Waterloo.
New York Mayor Eric Adams issued a statement Wednesday urging all New Yorkers to limit outdoor activity, and airports delayed flights as smoke from Canadian wildfires engulfed surrounding regions.
Google has dealt with this issue in the recent past.
In 2020, the company’s home state of California faced hazardous air quality issues for almost a month as a result of record-setting wildfires that burned across the state. Many people at Google and across the tech industry were already working from home because it was the height of the Covid pandemic.
Google has set up a so-called “go” link that directs employees to internal documents and information about wildfires and air filtering. It released similar resources during the 2020 wildfires. The company typically has “go” links for things like products, employee equipment, office information and some social causes.
The memo on Wednesday advised employees to remain indoors, “avoid vigorous physical activity” and run their air conditioners with clean filters. The site leads assured those who are already working on site that the campuses’ HVAC and air filtration systems “maintain a high quality of air inside our offices even in these circumstances.”
Since 2020, nearly 30 states have used a Bluetooth system developed by Apple and Google to track the spread of Covid infections and send push alerts to any smartphone user who came in close contact with a person who tested positive for the virus.
On Thursday, the organization said “the majority of states” stopped using the exposure notification system after the Biden administration ended the public health emergency on May 11.
APHL added it will no longer support the system, which aimed to helpmillions of Americans trace their exposures and make decisions about isolating and testing for the virus.
In a joint statement, Apple and Google did not address states’ decisions to stop using the system.
The tech giants told CNBC the system helped public health departments fight Covid in a way that preserves privacy, referring to how it tracks infections without collecting the location or identity of users.
“These systems were timed to shut down on the same date that the nation’s COVID-19 State of Emergency ends,” the California Department of Public Health said in a statement late Thursday.
Several states used the system to create apps that smartphone users could download, such as CA Notify and WA Notify.
States also provided exposure notifications through a built-in feature on Apple and Google’s operating systems.
For that method, state health departments had to submit a configuration file with their contact information and Covid guidance to Apple and Google. The two tech companies would use the file to set up a feature on phones that users could activate to receive notifications.
On Friday, some Apple users who opted in for that feature received push alerts informing them that their iPhones “will no longer log nearby devices and you won’t be notified of possible exposures.”
One Apple user shared in a Twitter post that their alert said, “Your Health Authority Turned Off Exposure Notifications.”
But not all Apple and Google users in states that stopped using the exposure notification system have received similar alerts, as of Friday afternoon.
Neither Apple or Google addressed why some users received alerts while others did not.
There is no clear tally of how many Americans activated the exposure notification feature on their phones or downloaded apps over the past three years.
Virginia estimates that more than 3 million users have downloaded the state’s app or used the notification feature since those tools launched in 2020.
New Mexico said the “majority” of residents activated the notification feature on their phones. More than 1.5 million alerts were sent to users who may have been exposed to Covid, according to the state.
Washington said the state generated more than 2.5 million exposure alerts through its app or the notification feature.
Researchers in Washington found that the state’s notification tools saved an estimated 30 to 120 lives and likely prevented about 6,000 Covid cases during the first four months after they launched in November 2020.
Despite these benefits, some Americans have been skeptical of the Covid exposure notification tools.
A 2021 report by the U.S. Government Accountability Office said that the public expressed concerns about privacy. The report said the public may not trust both local governments and technology companies to handle sensitive health information.
State decisions to end Covid exposure notifications are part of a broader shift in how the country responds to the pandemic.
Health departments last year loosened Covid restrictions like masking and social distancing as more Americans got vaccinated and boosted against the virus.
That culminated in the end of the public health emergency, which phased out much of the funding and flexibility that helped expand Covid testing, insurance coverage and access to care during the pandemic.
Still, more than 1,000 Americans are still dying each week from Covid, according to the Centers for Disease Control and Prevention.
Alphabet is merging an internal Google Research team called Brain with DeepMind, a move designed to bring two groups focused on artificial intelligence closer together as the battle for AI heats up.
Google acquired DeepMind in 2014 for a reported $500 million and has until now run it as an independent unit out of the U.K. DeepMind has been one of Alphabet’s “other bets,” performing futuristic work, such as teaching computer systems to beat top-ranked players of the Chinese board game Go.
“Combining all this talent into one focused team, backed by the computational resources of Google, will significantly accelerate our progress in AI,” Alphabet CEO Sundar Pichai said in blog post Thursday.
Jeff Dean, who currently leads Google’s AI efforts, will be promoted and given the title of chief scientist at Google, reporting to Pichai. He’ll head up the “most critical and strategic” technical projects related to AI, the first of which will be a series of powerful, multimodal AI models.
The move marks Google’s latest reorganization in response to the rapid developments in AI, following OpenAI’s launch of the chatbot ChatGPT late last year. CNBC previously reported that Google reshuffled its Assistant organization to prioritize the company’s AI chatbot Bard.
“The pace of progress is now faster than ever before,” Pichai wrote. “To ensure the bold and responsible development of general AI, we’re creating a unit that will help us build more capable systems more safely and responsibly.”
DeepMind has been able to operate separately from Google’s core research, enabling it to move quicker on breakthroughs such as AlphaFold, which can predict 3D models of protein structures. The two divisions, DeepMind and Google Research, have also reportedly had tensions in the past, leading DeepMind to seek more independence.
DeepMind CEO Demis Hassabis will lead the development of “the most capable and responsible general AI systems,” Pichai said. That research, he added, “will help power the next generation of our products and services.”
Brain, the Google Research team merging with DeepMind, is focused on AI and machine learning. Pichai said Google Research will continue work in areas such as algorithms and theory, privacy and security, quantum computing, health, and responsible Al.
In addition to the blog post, Pichai sent a lengthier memo to staffers about the changes.
James Manyika, Google’s senior vice president of technology and society, will now oversee Google Research, along with his existing teams, Pichai said. Manyika will report to Dean and the changes will take place over the next few weeks, the memo said.
Here’s the text of the memo, which CNBC obtained:
Hi everyone,
We’ve been an Al-first company since 2016 because we see Al as the most significant way to deliver on our mission. Since then, we’ve used Al to improve many of our core products, from Search, YouTube and Gmail to the incredible camera in Pixel phones. We’ve helped businesses and developers harness the power of AI via Google Cloud, and we’ve shown Al’s potential to address societal issues like health and climate change.
Along the way, we’ve been lucky to have two world-class research teams leading the entire industry forward with foundational breakthroughs that have ushered in a new era of Al.
The pace of progress is now faster than ever before. To ensure the bold and responsible development of general Al, we’re creating a unit that will help us build more capable systems more safely and responsibly.
This group, called Google DeepMind, will bring together part of Google Research (the Brain team) and DeepMind. Combining all this talent into one focused team, backed by the computational resources of Google, will significantly accelerate our progress in Al.
As CEO of the new unit, Demis Hassabis will lead the development of our most capable and responsible general Al systems — research that will help power the next generation of our products and services. Jeff Dean will take on the elevated role of Google’s Chief Scientist, reporting to me. In that capacity he’ll serve as Chief Scientist to Google Research and Google DeepMind. Jeff will help set the future direction of our Al research and head up our most critical and strategic technical projects related to Al — the first of which will be a series of powerful, multi-modal Al models.
This move brings together two leading research groups in the Al field. Their collective accomplishments in Al over the last decade span AlphaGo, Transformers, word2vec, WaveNet, AlphaFold, sequence to sequence models, distillation, deep reinforcement learning, and distributed systems and software frameworks like TensorFlow and JAX for expressing, training and deploying large scale ML models.
Google DeepMind will operate as a nimble, fast-paced unit, with clear points of connection and collaboration with Google Research and the PAs.
With this change, James Manyika will now oversee Google Research along with his existing Tech & Society teams. Many of Research’s technological advances have shaped core products and features across Alphabet and will continue to do so. Working closely with Jeff as Chief Scientist, Google Research will continue its focus on fundamental and applied research across a broad portfolio. This means cracking seemingly impossible, foundational and long-term challenges in computer science — including in Al and ML — that benefit people’s lives around the world, from algorithms and theory to privacy and security to quantum computing, health, responsible Al, and more.
We’re announcing these changes today and will take the next few weeks to get the new teams into place.
Please join me in congratulating Demis, Jeff, and James on their new roles and their continued collaboration. The Google Research and DeepMind teams have laid the foundation that brought us to this inflection point.
I’m so excited for the next phase of this journey the progress we’ll make against our mission, and all the ways we’ll help people reach their potential with increasingly capable and responsible Al.
An Android statue is displayed in front of a building on the Google campus on January 31, 2022 in Mountain View, California. Google parent company Alphabet will report fourth quarter earnings on Tuesday after the closing bell.
Justin Sullivan | Getty Images
Google no longer requires people to be vaccinated against Covid in order to enter its buildings.
In a companywide email sent to employees Tuesday, which was viewed by CNBC, Google VP of global security Chris Rackow said “vaccines will no longer be required as a condition of entry to any of our buildings.”
“Last month marks three years since the World Health Organization declared a global pandemic,” Rackow wrote in his memo. “We put in place emergency measures such as our Covid-19 vaccine policy to keep everyone safe, but now the world is in a very different place. Most people today have some level of immunity against COVID-19, case rates and hospitalizations have stabilized for many months now, and governments all around the world — including the U.S. — are ending emergency declarations, lifting restrictions and ending vaccination mandates.”
In December 2021, Google told employees that they must comply with vaccine policies or they’d face losing pay and then eventually losing their job, citing rules for government contractors. Then, in February, ahead of asking employees to come back to offices and the U.S. appeals court deciding that rule’s legal standing, the company relaxed policies around requiring vaccines for employment, as well as other rules around testing, social distancing and masks.
However, it still required employees to be vaccinated to enter company sites.
Several hundred Google employees at the time signed and circulated a manifesto opposing the company’s Covid vaccine mandate, arguing leadership’s decision will have an outsized influence in corporate America. It also noted outbreaks kept happening at Google offices among vaccinated employees while those who declined to declare their vaccination status were still banned from offices and other gatherings including off-sites, summits and team events.
In his email, Rackow encouraged employees to remain up to date with their Covid vaccines going forward, “just as we encourage everyone to get a flu shot every year,” adding that the vaccines have been “critical” to keeping Google employees safe in the workplace.
The mandate change comes after President Joe Biden signed a bill Monday to end the national emergency declared during the Covid pandemic that has been in place for more than three years. In January, WHO Director-General Tedros Adhanom Ghebreyesus said Covid remains a global health emergency, though weekly Covid deaths have dropped 70% since the peak of the first massive omicron wave in February 2022. However, deaths started increasing again in December as China, the world’s most populous country, faced its largest wave of infection yet.
The mandate change also comes as Google has struggled to get employees back into physical offices and as the company has begun downsizing its real estate amid broader cost-cutting efforts. A CNBC report last month showed Google plans to ask cloud employees and partners to share desks at the division’s five largest locations, which include New York and San Francisco.
Google declined to comment.
Read the full memo below:
“Last month marks three years since the World Health Organization declared a global pandemic. We put in place emergency measures such as our Covid-19 vaccine policy to keep everyone safe, but now the world is in a very different place. Most people today have some level of immunity against Covid-19, case rates and hospitalizations have stabilized for many months now, and governments all around the world — including the U.S. — are ending emergency declarations, lifting restrictions and ending vaccination mandates.
Based on this, we’re now lifting our global vaccine policy. This means that vaccines will no longer be required as a condition of entry to any of our buildings. Those with existing accommodations will receive an email with further guidance.
Covid-19 vaccines have been a critical part of our overall strategy to keep Googlers safe, especially in the workplace. They also have the benefit of reducing the risk of severe disease if you get infected and have helped to protect vulnerable members of our community. We encourage everyone to remain up to date with their Covid-19 vaccines going forward, just as we encourage everyone to get a flu shot every year.
We’ll continue to follow all local regulations and will maintain our cleaning and ventilation standards in the office, and we ask that you do your part by monitoring your health and staying home if you feel sick.
We’ve come through an extraordinary time, which called on us to adapt and come together in ways we couldn’t have imagined. I am proud and grateful for the resilience you’ve all shown as we navigated so much uncertainty—for our company and the world—over the past few years.
Thank you again for everything you do to keep your colleagues and communities safe.
