Google’s AI assistant Gemini App now has more than 750 million monthly active users, CEO Sundar Pichai said at parent company Alphabet’s fourth-quarter earnings call.
That’s roughly 100 million more users than the 650 million monthly active users the company reported in its third-quarter earnings report. That report was released just three weeks before the company’s Gemini 3 debut upended the AI world.
“We are also seeing significantly higher engagement per user, especially since the launch of Gemini 3,” Pichai said. “[Gemini 3] has seen the fastest adoption of any model in our history.”
Google’s AI story experienced a major turnaround in mid-November thanks to Gemini 3, the company’s latest AI model. AI enthusiasts praised the capabilities of the model far and wide on social media, with even some long-time ChatGPT fanboys like Salesforce CEO Marc Benioff admitting to converting to Gemini. AI benchmarking firm LMArena’s cofounder Wei-Lin Chiang even called the release “more than a leaderboard shuffle.”
Gemini 3 was so well-received that only a couple of weeks later, OpenAI leadership declared “code red” at the company. Even Nvidia CEO Jensen Huang, whose company has significant business with OpenAI, reportedly raised worries over the competition Google now poses to OpenAI’s market dominance.
Despite the huge jump in users for Gemini, there might still be a long way to go until it can suprpass ChatGPT to become the chatbot leader. OpenAI doesn’t report regular data on ChatGPT active users, but a The Information report from December claimed that ChatGPT was nearing 900 million users weekly at the time.
Either way, Google’s catch-up effort is impressive. With high-profile launches like Gemini 3 and Nano Banana Pro, Google has been able to save its once-battered AI reputation following the failed launch of Gemini image generation in early 2024.
“I think we are in a very, very relentless innovation cadence, and I think we are confident about maintaining that momentum as we go through ’26,” Pichai said in the earnings call. Executives shared that they are planning to double capital expenditures in 2026, with the majority going towards AI.
Google has big plans for Gemini this year. Apple recently tapped Gemini to power its AI revamp of Siri that is set to launch later this year, and Samsung announced last month that it was planning to double the amount of its Gemini-infused mobile devices. The company is also preparing to make Gemini more “shoppable” with checkout experiences infused directly into the app.
You might also want to start preparing to have your Gemini chats plagued by ads, but that might still be further on the horizon.
“Ads have always been part of scaling products to reach billions of people,” Google’s chief business officer Philipp Schindler said. “But as we’ve said, we’re not rushing anything here.”
Tech god-kings like Alphabet CEO Sundar Pichai tend to win in the courts when it matters, and there’s very little chance that’s about to change, but there’s just the tiniest glimmer of hope all of a sudden.
Legal filings reported Tuesday by Bloomberg indicated that the ruling from September of last year in which Google basically got to continue being a monopoly without significant consequences could be getting another look. The entity that originally brought suit against Google, comprising multiple states and the Justice Department, is appealing that ruling. Should that make you optimistic? Probably not, but at least it’s happening.
In August of 2024, District Judge Amit P. Mehta ruled—to the surprise of many—that Google was a monopolist. Google, it was determined, had acted illegally to maintain its stranglehold on the search market.
Google controls 90% of the search engine market, and does it stay on top like this by being the best? Anecdotally, you probably answered that question with something like “no!” or “not anymore!” Google results pages are larded with spam and AI outputs that Americans aren’t huge fans of, though they also report reading them without clicking to check the source articles they’re drawn from.
Google keeps its crown via some really ugly, but real, payola deals—like $20 billion to Apple and $8 billion over four years to Samsung—that require hardware makers to make Google the default search engine on the gadget you’re probably using to read this article.
Considering Google has been determined by a legal ruling to be a monopoly, some reasonable remedies might have been to force Google to end this pay-to-play practice. It could have also been forced to sell off Chrome, the most popular internet browser.
But instead of something with teeth, we got a decision that must have been better than the best case scenario Google had in mind: forcing it to share some of its search data with competitors, and limiting the exclusivity of its paid deals with companies like Apple and Samsung while still allowing such exclusivity deals (as the New York Times notes, this part was both lenient and confusing).
So what does the appeal mean? Honestly it just means normal and predictable things are happening in response to a big ruling. The US Court of Appeals for D.C. tends to take about a year to come to a decision after a case reaches this point. The original remedies monopoly-haters wanted, a forced sale of Chrome, or the banning of search payola deals, are theoretically back on the table. But in the event of a ruling handing down a harsher remedy, it would of course be Alphabet Inc.’s prerogative to keep the appeals process going.
Visitors check out Nvidia’s AI technology at the 2024 Apsara Conference in Hangzhou, China, on September 19, 2024.
Costfoto | Nurphoto | Getty Images
Nvidia, Google, Microsoft and dozens of other tech companies are descending on Las Vegas next week to showcase artificial intelligence tools they say will save doctors and nurses valuable time.
Sunday marks the official start of a health-care technology conference called HLTH, which is expected to draw more than 12,000 industry leaders this year. CNBC will be on the ground. Based on the speaking agenda and announcements leading up to the conference, AI tools to conquer administrative burdens will be the star of this year’s show.
Doctors and nurses are responsible for mountains of documentation as they work to keep up with patient records, interface with insurance companies and comply with regulators. Often, these tasks are painstakingly manual, in part because health data is siloed and stored across multiple vendors and formats.
The daunting administrative workload is a major cause of burnout in the industry, and it’s part of the reason a nationwide shortage of 100,000 health-care workers is expected by 2028, according to consulting firm Mercer. Tech companies, eager to carve out a piece of a market that could top $6.8 trillion in spending by the decade’s end, argue that their generative AI tools can help.
Alex Schiffhauer, group product manager at Google, speaks during the Made By Google event at the company’s Bay View campus in Mountain View, California, Aug. 13, 2024.
Josh Edelson | AFP | Getty Images
Google, for instance, said it’s working to expand its health-care customer base by tackling administrative burden with AI.
On Thursday, the company announced the general availability of Vertex AI Search for Healthcare, which it introduced in a trial capacity during HLTH last year. Vertex AI Search for Healthcare allows developers to build tools to help doctors quickly search for information across disparate medical records, Google said. New features within Google’s Healthcare Data Engine, which helps organizations build the platforms they need to support generative AI, are also now available, the company said.
Google on Thursday released the results of a survey that said clinicians spend nearly 28 hours a week on administrative tasks. In the survey, 80% of providers said this clerical work takes away from their time with patients, and 91% said they feel positive about using AI to streamline these tasks.
Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.
Dimas Ardian | Bloomberg | Getty Images
Similarly, Microsoft on Oct. 11 announced its collection of tools that aim to lessen clinicians’ administrative workload, including medical imaging models, a health-care agent service and an automated documentation solution for nurses, most of which are still in the early stages of development.
Microsoft already offers an automated documentation tool for doctors through its subsidiary, Nuance Communications, which it acquired in a $16 billion deal in 2021. The tool, called DAX Copilot, uses AI to transcribe doctors’ visits with patients and turn them into clinical notes and summaries. Ideally, this means doctors don’t have to spend time typing out these notes themselves.
Nurses and doctors complete different types of documentation during their shifts, so Microsoft said it’s building a separate tool for nurses that’s best suited to their workflows.
AI scribe tools such as DAX Copilot have exploded in popularity this year, and Nuance’s competitors, such as Abridge, which has reportedly raised more than $460 million, and Suki, which has raised $165 million, will also be at the HLTH conference.
Dr. Shiv Rao, the founder and CEO of Abridge, told CNBC in March that the rate at which the health-care industry has adopted this new form of clinical documentation feels “historic.” Abridge received a coveted investment from Nvidia’s venture capital arm that same month.
Nvidia is also gearing up to address doctor and nurse workloads at HLTH.
Kimberly Powell, the company’s vice president of health care, is delivering a keynote Monday that will explain how using generative AI will help health-care professionals “dedicate more time to patient care,” according to the conference’s website.
Nvidia’s graphics processing units, or GPUs, are used to create and deploy the models that power OpenAI’s ChatGPT and similar applications. As a result, Nvidia has been one of the primary beneficiaries of the AI boom. Nvidia shares are up more than 150% year to date, and the stock tripled last year.
The company has been making steady inroads into the health-care sector in recent years, and it offers a range of AI tools across medical devices, drug discovery, genomics and medical imaging. Nvidia also announced expanded partnerships with companies such as Johnson & Johnson and GE HealthCare in March.
While the health-care sector has historically been slow to adopt new technology, the buzz around administrative AI tools has been undeniable since ChatGPT exploded onto the scene two years ago.
Even so, many health systems are still in the early stages of evaluating tools and vendors, and they’ll be making the rounds on the HLTH exhibition floor. Tech companies will have to prove they have the chops to tackle one of health care’s most complex problems.
LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”
Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.
Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.
Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.
“We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.
Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.
In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”
Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.
Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.
“I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”
The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.
“The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”
Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”
Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.
Amazon Web Services CEO, Matt Garman speaks during CNBC Power Lunch on July 1, 2024.
CNBC
Amazon‘s cloud boss on Thursday gave employees a frank message about the company’s recently announced five-day in-office mandate.
Staffers who don’t agree with Amazon’s new policy can leave, Amazon Web Services CEO Matt Garman said during an all-hands meeting at the company’s second headquarters in Arlington, Virginia.
“If there are people who just don’t work well in that environment and don’t want to, that’s OK, there are other companies around,” Garman said, according to a transcript viewed by CNBC. “At Amazon, we want to be in an environment where we are working together, and we feel that collaborative environment is incredibly important for our innovation and for our culture.”
Garman’s comments were reported earlier by Reuters.
Amazon announced the new mandate last month. The company’s previous return-to-work stance required corporate workers to be in office at least three days a week. Employees have until Jan. 2 to adhere to the new policy.
Amazon is forgoing its pandemic-era remote work policies as it looks to keep up with rivals Microsoft, OpenAI and Google in the race to develop generative artificial intelligence. It’s one of the primary tasks in front of Garman, who took over AWS in June after his predecessor Adam Selipsky stepped down from the role.
The move has spurred backlash from some Amazon employees who say they’re just as productive working from home or in a hybrid work environment as they are in an office. Others say the mandate puts extra strain on families and caregivers.
Roughly 37,000 employees have joined an internal Slack channel created last year to advocate for remote work and share grievances about the return-to-work mandate, according to a person familiar with the matter.
At the all-hands meeting, Garman said he’s been speaking with employees and “nine out of 10 people are actually quite excited by this change.” He acknowledged there will be cases where employees have some flexibility.
“What we really mean by this is we want to have an office environment,” said Garman, noting an example scenario where an employee may want to work from home one day with their manager’s approval to focus on their work in a quiet environment.
“Those are fine,” he said.
An Amazon spokesperson didn’t immediately respond to a request for comment.
Garman said the mandate is important for preserving Amazon’s culture and “leadership principles,” which are a list of more than a dozen business philosophies meant to guide employee decisions and goals. He pointed to Amazon’s principle of “disagree and commit,” which is the idea that employees should debate and push back on each others ideas respectfully. That practice can be particularly hard to carry out over Amazon’s videoconferencing software, called Chime, Garman said.
“I don’t know if you guys have tried to disagree via a Chime call — it’s very hard,” Garman said.
It’s been a stellar month for the U.S. stock market, driven largely by easing monetary policy. Since the Club’s last Monthly Meeting, investors have celebrated the Federal Reserve’s pivot to its rate-cutting era. The U.S. central bank announced its first interest rate reduction in more than four years on Sept. 18, sending stock benchmarks to all-time highs. Most recently, the S & P 500 and Dow Jones Industrial Average both closed at record levels Monday. The S & P and Dow are up 4.5% and 4%, respectively, since the Sept. 12 monthly gathering. We’ve taken advantage of the market highs. The rate cutting news sent Meta Platforms , Alphabet and Danaher higher, encouraging us to offload shares of each on Sept. 26 in an overbought market. The Club also exited Procter & Gamble on Oct. 8. The reasoning: There’s less need to hold onto traditional defensive names like consumer staples while the Fed is embarking on an easing cycle. We did hold onto our rate-sensitive names like Wells Fargo and Morgan Stanley , which were among the best performers since the last Monthly Meeting. (We sold a little of the latter, more details below). The improving macro backdrop on the back of loosening policy bodes well for Meta Platforms too. Meanwhile, continued investments around generative artificial intelligence boosted shares of Salesforce and Eaton , which rounded out the top five. Here’s a breakdown of what drove gains in each of these five Club stocks since the market close of the September meeting through Tuesday’s close ahead of Wednesday’s October Monthly meeting at noon ET . 1. Wells Fargo: 22% This stock got a boost after the Fed enacted its first rate cut in mid-September, which lifted the entire financials sector. That’s because lower borrowing costs can benefit Wells Fargo by stabilizing its interest-based revenue streams. The firm’s net interest income (NII) took hits during the higher-for-long rate environment as customers sought to park cash in higher-yielding alternatives. It weighed on the bank’s loan growth as well. Wells Fargo’s solid quarterly earnings release on Oct. 11, and subsequent positive Wall Street commentary in the sessions that followed, sent the stock to multi-year highs. We hiked our price target to $66 apiece from $61 on earnings, and reiterated our buy-equivalent 1 rating on the stock. 2. Morgan Stanley: 16.2% Following the Fed’s decision, shares advanced as investors became more optimistic about a soft landing for the U.S. economy. Morgan Stanley benefits from lower rates — and, in turn, a better economy — because it can usher in more Wall Street dealmaking such as initial public offerings and mergers and acquisitions. That’s great news for the turnaround story in Morgan Stanley’s crucial investment banking division. To be sure, we made a small sale of the financial stock on Sept. 19 after its post-Fed pop. That’s because the Club has been debating exiting Morgan Stanley altogether for a potentially better investment banking rebound play like Goldman Sachs. However, we hope to get more clarity on Morgan Stanley’s standing in the portfolio when the firm reports quarterly results Wednesday. 3. Salesforce: 13.8% What caused the double-digit percentage jump in this tech stock? Two words: artificial intelligence. Salesforce hosted its Dreamforce Conference last month, where CEO Marc Benioff touted Agentforce, the company’s AI-enhanced chatbot tools. Shares had their biggest single-day jump in nearly four months, at 5.4%, on Sept. 19 after management detailed more about the flagship offering. A flurry of positive Wall Street chatter followed suit, extending the run even further. Piper Sandler upgraded the stock to a buy rating from neutral on Sept. 24. A week later, Northland Capital Markets also raised its rating on the software maker to a buy-equivalent rating from hold. 4. Meta Platforms: 11.5% The social media giant trended higher after investors saw the unveiling of the Quest 3S , the latest VR headset from the company at the social media giants annual developer conference on Sept. 25. The stock continued to climb on positive signs for the company’s advertising business, which prompted UBS to hike the stock’s price target to $690 apiece from $635. Guggenheim raised the company’s price target to $665 from $600. Analysts at the firm argued that Meta was the top destination for incremental ad dollars, citing recent channel checks. 5. Eaton: 11.3% This industrial name doesn’t have one single catalyst for its outperformance. But increasing data center investments on the back of increased AI adoption, accompanied by upbeat Wall Street research, likely contributed to the stock’s climb. On Sept. 16, Citigroup initiated coverage of Eaton as a buy, sending shares higher. Analysts argued that Eaton will continue to benefit from the buildout of data center facilities, which will in turn increase demand for the company’s power management solutions. Morgan Stanley reiterated its buy-equivalent rating on Oct. 10, arguing that Eaton has a positive setup into earnings season. That same session, analysts at JPMorgan maintained their buy rating on Eaton and increased its price target to $349 apiece from $325. The stock traded near all-time highs on Tuesday. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
Traders work on the floor of the New York Stock Exchange.
Angela Weiss | AFP | Getty Images
It’s been a stellar month for the U.S. stock market, driven largely by easing monetary policy.
Britain’s Prime Minister Keir Starmer delivers a speech on stage during the International Investment Summit, held at The Guildhall, in central London, on October 14, 2024.
Jonathan Brady | Afp | Getty Images
LONDON — The U.K.’s Labour government said Monday that it had secured £63 billion ($82 billion) in fresh investment at the close of a summit aimed at wooing overseas capital.
Finance Minister Rachel Reeves hailed the “shovel ready” spending commitments — from companies including Blackstone, MacQuarie, Iberdrola, Amazon Web Services, ServiceNow and Eli Lilly — which she said would create almost 40,000 new jobs across the country.
“We are bringing investment and jobs back to this country. Britain is open for business again,” she said during closing remarks at the summit.
The announcement comes after Prime Minister Keir Starmer earlier on Monday vowed to slash regulatory red tape to boost anemic investment in the country.
“We’ve got to look at regulation across the piece, and where it is needlessly holding back investment … mark my words, we will get rid of it,” he told delegates at the government’s inaugural International Investment Summit, held at London’s Guildhall.
“It’s time to upgrade the regulatory regime. We will rip up the bureaucracy that blocks investment,” he added.
Starmer did not say exactly which regulations would be changed. However, the government said in a statement that it was “reviewing the focus” of major regulators, with the Competition and Markets Authority (CMA) in particular being charged to “prioritise growth, investment, and innovation.”
The regulatory overhaul is just one part of the Labour Party’s plans to place Britain at the forefront of emerging opportunities.
Last week, it launched a new Regulatory Innovation Office to reduce the burden of red tape for businesses working on “game-changing” technologies. Meanwhile, ministers have been introducing changes to the planning system to boost new building projects.
The prime minister restated that growth was the “No. 1 test of this government,” and reiterated plans for the U.K. to become the fastest-growing G7 economy.
Starmer also outlined stability, strategy, regulation and improving Britain’s global standing as “four crucial areas” in his pitch for Britain.
“Private sector investment is the way we rebuild our country and pay our way in the world,” he said.
Speaking during a panel discussion with Starmer on Monday, Google‘s former CEO Eric Schmidt said he was “shocked” when he heard that the Labour party had become strongly in favor of growth.
Schmidt added that he was waiting to see “how you pull it off,” urging the government to invest further in artificial intelligence to achieve its wider growth goals.
Some have expressed concern over the government’s proposed regulatory rollback, warning that certain measures could risk harming growth and innovation.
“There are regulations that are bad for innovation, productivity and growth and there are regulations that are absolutely necessary for them,” Ali Nikpay, partner co-chair of the antitrust and competition group at law firm Gibson Dunn, told CNBC via email.
“Take merger control: The government wants the CMA to be more hands off. That might give a few sectors a sugar rush in the short run as deals that would have been blocked in the past are cleared. But in the longer run that’ll reduce innovation and growth across the economy,” he added.
Labour has been attempting to paint a more positive picture of the economy after being accused of doom-mongering in its early months in office. It is also seeking to position itself as a reliable partner after years of upheaval — including Brexit — a slew of prime ministers and a bond market selloff.
Opening the summit, Business and Trade Minister Jonathan Reynolds heralded a “new era of stability, of openness, [and] of commitment to use our mandate” to remove barriers to business.
The government on Sunday announced the launch of a new industrial strategy, designed to focus on eight “growth-driving sectors.” Those include the creative industries, financial services, advanced manufacturing, professional services, defense, tech, life sciences and clean energy industries.
Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of X looks on during the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, U.S., May 6, 2024.
David Swanson | Reuters
With Tesla’s hotly anticipated robotaxi event hours away, investors will soon get a glance at what CEO Elon Musk has called the CyberCab.
After a decade of unfulfilled promises to deliver autonomous vehicles, capable of traveling reasonable distances safely without a human at the wheel, there’s a hefty dose of skepticism about what Tesla can do technologically, and when its robotaxi might actually hit the market.
The robotaxi day, or “We, Robot,” event is scheduled to begin at 7:00 p.m. Pacific time at a Warner Bros. studio in Burbank, California and will be livestreamed via X.
Garrett Nelson, an analyst at CFRA, cautioned in a preview on Oct. 4, that conditions at a closed course on a movie studio lot could make a Tesla robotaxi look more advanced than it would be in normal traffic and on public roads. CFRA has a hold rating on the stock.
Tesla shares dipped about 1% on Thursday to $238.77. They’re now down almost 4% for the year and more than 40% below their record reached in 2021.
The event comes a week after Tesla reported third-quarter deliveries of 462,890, lifting the number to 1.35 million for the year so far. For all of last year, Tesla reported deliveries of 1.81 million.
Bullish analysts at firms including Wedbush, ARK and RBC Capital Markets expressed optimism in their reports about the company’s ability to keep growing sales long-term, while delivering higher-tech products, including a long-delayed autonomous vehicle, humanoid robotics and other AI-driven products and services.
Gene Munster of Deepwater Asset Management told CNBC’s “Fast Money” on Wednesday, that he’ll be at the event and expects to test the robotaxi.
Munster, a long-time Tesla bull, said he thinks the company will roll out robotaxis in some cities by the end of 2025. He’s also expecting Tesla to announce plans to produce an affordable EV, possibly just a stripped down version of its Model 3, and an electric van.
He said that while he expects the stock to be down after the event, it could “make new highs” over the next two years as deliveries start to accelerate.
Tesla was once seen as a pioneer in autonomous vehicle development, but has never managed to deliver or demonstrate robotaxi technology. The company is now considered a laggard.
Alphabet’s Waymo in the U.S., and a number of Chinese firms, are all operating commercial robotaxi services today.
Morgan Stanley analysts wrote in a report on Wednesday that if Tesla can launch a “level 4” robotaxi, meaning it can operate without a driver at the wheel, using its current “suite of hardware and software,” it would result in a cost-per-mile advantage relative to peers.
In addition to missed deadlines, Tesla has had safety issues with the its driver assistance systems, which are currently marketed as the standard Autopilot and premium Full Self-Driving (Supervised) options.
Missy Cummings, a professor at George Mason University and director of the Mason Autonomy and Robotics Center, said Tesla leaders should be able to say how they’re solving a problem known as “phantom braking,” which refers to instances when vehicles equipped with ADAS apply their brakes unexpectedly, even while driving at highway speeds, with no visible obstacles around them.
Tesla’s phantom braking problems are the subject of an ongoing investigation by the National Highway Traffic Safety Administration (NHTSA). Cummings, who previously served as a senior safety advisor to the regulator, told CNBC, “If they can’t solve phantom braking for a level 2 car, they can’t solve it for level 4 or 5 vehicle.” Level 2 vehicles include driver assistance systems.
According to data tracked by NHTSA starting in 2021, there have been 1,399 crashes in which Tesla driver assistance systems were engaged within 30 seconds of the crash, and 31 of these collisions resulted in reported fatalities.
Sam Abuelsamid, an analyst at Guidehouse Insights, said Musk or other Tesla executives should be able to say exactly how they plan for their vehicles to operate in different weather, such as fog, rain, snow, and lighting, or in dark tunnels.
He also wants Tesla executives to say whether they will accept full liability for the operation of these vehicles, which he calls “table stakes for a true robotaxi without human controls.”
Finally, Abuelsamid wants to know if Tesla plans to own and operate its robotaxis or lease or sell them to consumers and fleet operators.
“Many companies have made progress on the automated driving technology side,” Abuelsamid said. “But they’ve faltered when it came to figuring out a business model that could be profitable. Tesla has a lot of challenges to overcome and I want to know how all the pieces fall into place.”
Despite bold statements, a lot of companies are failing to produce tangible results, according to Edward J Achtner, the head of generative AI for U.K. banking giant HSBC.
“Candidly, there’s a lot of success theater out there,” Achtner said on a panel at the CogX Global Leadership Summit alongside Ranil Boteju — a fellow AI leader at rival British bank Lloyds Banking Group — and Nathalie Oestmann, head of NV Ltd, an advisory firm for venture capital funds.
“We have to be very clinical in terms of what we choose to do, and where we choose to do it,” Achtner told attendees of the event, held at the Royal Albert Hall in London earlier this week.
Achtner outlined how the 150-year-old lending institution has embraced artificial intelligence since ChatGPT — the popular AI chatbot from Microsoft-backed startup OpenAI — burst onto the scene in November 2022.
The HSBC AI leader said that the bank has more than 550 use cases across its business lines and functions linked to AI — ranging from fighting money laundering and fraud using machine learning tools to supporting knowledge workers with newer generative AI systems.
One example he gave was a partnership that HSBC has in place with internet search titan Google on the use of AI technology anti-money laundering and fraud mitigation. That tie-up has been in place for several years, he said. The bank has also dipped its toes deeper into genAI tech much more recently.
“When it comes to generative artificial intelligence, we do need to clearly separate that” from other types of AI, Achtner said. “We do approach the underlying risk with respect to generative very differently because, while it represents incredible potential opportunity and productivity gains, it also represents a different type of risk.”
Achtner’s comments come as other figures in the financial services sector — particularly leaders at startup firms — have made bold statements about the level of overall efficiency gains and cost reductions they are seeing as a result of investments in AI.
Buy now, pay later firm Klarna says it has been taking advantage of AI to make up for loss of productivity resulting from declines in its workforce as employees move on from the company.
It is implementing a company-wide hiring freeze and has slashed overall employee headcount down to 3,800 from 5,000 — a roughly 24% workforce reduction — with the help of AI, CEO Sebastian Siemiatkowski said in August. He is looking to further reduce Klarna’s headcount to 2,000 staff members — without specifying a time for this target.
Klarna’s boss said the firm was lowering its overall headcount against the backdrop of AI’s potential to have “a dramatic impact” on jobs and society.
“I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective,” he said at the time in an interview with the BBC. Siemiatkowski said it was “too simplistic” to say AI’s disruptive effects would be offset by the creation of new jobs thanks to AI.
Oestmann of NV Ltd, a London-based firm that offers advisory services for the C-suite of venture capital and private equity firms, directly touched on Klarna’s actions, saying headlines around such AI-driven workforce reductions are “not helpful.”
Klarna, she suggested, likely saw that AI “makes them a more valuable company” and was consequently incorporating the technology as part of plans to reduce its workforce anyway.
The result Klarna is seeing from AI “are very real,” a Klarna spokesperson told CNBC. “We publicize these results because we want to be honest and transparent about the impact genAI is having in the real world in companies today,” the spokesperson added.
“At the end of the day,” Oestmann added, as long as people are “trained appropriately” and banks and other financial services firm can “reinvent” themselves in the new AI era, “it will just help us to evolve.” She advised financial firms to pursue “continuous learning in everything that you do.”
“Make sure you are trying these tools out, make sure you are making this part of your everyday, make sure you are curious,” she added.
Boteju, chief data and analytics officer at Lloyds, pointed to three main use cases that the lender sees with respect to AI: automating back office functions like coding and engineering documentation, “human-in-the loop” uses like prompts for sales staff, and AI-generated responses to client queries.
Boteju stressed that Lloyds is “proceeding with caution” when it comes to exposing the bank’s customers to generative AI tools. “We want to get our guardrails in place before we actually start to scale those,” he added.
“Banks in particular have been using AI and machine learning for probably about 15 or 20 years,” Boteju said, signaling that machine learning, intelligent automation and chatbots are things traditional lenders have been “doing for a while.”
Generative AI, on the other hand, is a more nascent technology, according to the Lloyds exec. The bank is increasingly thinking about how to scale that technology — but by “using the current frameworks and infrastructure we’ve got,” rather than by moving the needle significantly.
Boteju and Achtner’s comments tally with what other AI leaders of financial services have said previously. Speaking with CNBC last week, Bahadir Yilmaz, chief analytics officer of ING, said that AI is unlikely to be as disruptive as firms like Klarna are suggesting with their public messaging.
“We see the same potential that they’re seeing,” Yilmaz said in an interview in London. “It’s just the tone of communication is a bit different.” He added that ING is primarily using AI in its global contact centers and internally for software engineering.
“We don’t need to be seen as an AI-driven bank,” Yilmaz said, adding that, with many processes lenders won’t even need AI to solve certain problems. “It’s a really powerful tool. It’s very disruptive. But we don’t necessarily have to say we are putting it as a sauce on all the food.”
Johan Tjarnberg, CEO of Swedish online payments firm Trustly, told CNBC earlier this week that AI “will actually be one of the biggest technology levers in payments.”But even so, he noted that the firm is focusing more of the “basics of AI” than on transformative changes like AI-led customer service.
One area where Trustly is looking to improve customer experience with AI is subscriptions. The startup is working on an “intelligent charging mechanism” that would aim to figure out the best time for a bank to take payment from a subscription platform user, based on their historical financial activity.
Tjarnberg added that Trustly is seeing closer to 5-10% improved efficiency as a result of implementing AI within its organization.
Republican presidential nominee and former U.S. President Donald Trump speaks to the press at Trump Tower in New York City, U.S., September 26, 2024. REUTERS/David Dee Delgado
Trump in a social media post wrote that if the Department of Justice does not prosecute Google “for this blatant interference of Elections” he would request its prosecution “when I win the election and become President of the United States!”
He seemed to be reacting to a new study by the right-leaning Media Research Center, which purportedly found that Google search engine results tended to show news articles that supposedly were positive to the Democrat Harris ahead of Trump’s own campaign website when a user searched for “Donald Trump presidential race 2024.”
In his post on Truth Social, Trump wrote: “It has been determined that Google has illegally used a system of only revealing and displaying bad stories about Donald J. Trump, some made up for this purpose while, at the same time, only revealing good stories about Comrade Kamala Harris.”
US Vice President and Democratic nominee for President Kamala Harris speaks at an event hosted by The Economic Club of Pittsburgh at Carnegie Mellon University on September 25, 2024 in Pittsburgh, Pennsylvania.
Jeff Swensen | Getty Images
MRC founder Brent Bozell told Fox News Digital earlier this week that “Google is trying to stack the deck in favor of Kamala Harris.”
CNBC has requested comment from Google’s parent company Alphabet, as well as the campaigns of Trump and Harris.
This is breaking news. Please refresh for updates.
Big banks are jumping headfirst into the AI race. Over the past year, Wall Street’s largest names — including Goldman Sachs , Bank of America , Morgan Stanley , Wells Fargo to JPMorgan Chase — ramped up their generative artificial intelligence efforts with the aim of boosting profits. Some are striking deals and partnerships to get there quickly. All are hiring specialized talent and creating new technologies to transform their once-stodgy businesses. The game is still in its early innings, but the stakes are high. In his annual shareholder letter, JPMorgan CEO Jamie Dimon compared artificial intelligence to the “printing press, the steam engine, electricity, computing, and the internet.” The banks that can get it right should increase productivity and lower operational costs — both of which would improve their bottom lines. In fact, AI adoption has the potential to lift banking profits by as much as $170 billion, or 9%, to more than $1.8 trillion by fiscal year 2028, according to research from Citi analysts . Early-stage generative AI use cases are often for “augmenting your staff to be faster, stronger and better,” said Alexandra Mousavizadeh, co-CEO and co-founder of AI benchmarking and intelligence platform Evident Insights. “Over the course of the next 12 to 18 to 24 months, I think we’re going to see [generative AI] move along the maturity journey, going from internal use cases being put into production [to more] testing external-facing use cases.” Companies are only just starting to grasp the promise of this tech. After all, it was only following the viral launch of ChatGPT in late 2022 that the world outside of Silicon Valley woke up to the promise of generative AI. OpenAI’s ChatGPT, backed by Microsoft and enabled by Nvidia chips, sparked an investor stampede into anything AI. The AI trade also pushed corporate boardrooms in three ways: find use cases for the tech, strike partnerships to enable it, and hire specialized employees to build and support it. MS YTD mountain Morgan Stanley YTD AI use cases for key businesses Morgan Stanley was among the first on Wall Street to publicly embrace the technology, unveiling two AI assistants for financial advisors powered by OpenAI. Launched in September 2023, the AI @ Morgan Stanley Assistant gives advisors and their staff quick answers to questions regarding the market, investment recommendations, and various internal processes. It aims to free up employees from administrative and research tasks to engage more with their clients. Morgan Stanley this summer rolled out another assistant , called Debrief, which uses AI to take notes on financial advisors’ behalf in their client meetings. The tool can summarize key discussion topics and even draft follow-up emails. “Our immediate focus is on using AI to increase the time our employees spend with clients. This means using AI to reduce time-consuming tasks like responding to emails, preparing for client meetings, finding information, and analyzing data,” said Jeff McMillan, head of firmwide AI for Morgan Stanley. He made these comments in a statement emailed to CNBC last week. “By freeing up this time, our employees can focus more on building relationships and innovating.” In the long run, AI could help Morgan Stanley’s wealth business get closer to reaching management’s goal of more than $10 trillion in client assets . In July, the firm reported client assets of $7.2 trillion. To be sure, McMillan said in June it would take at least a year to determine whether the technology is boosting advisor productivity. If it does, that would welcomed news for shareholders after Morgan Stanley’s wealth segment missed analysts’ revenue expectations in the second quarter . WFC YTD mountain Wells Fargo YTD It’s not just Morgan Stanley. Our other bank holding Wells Fargo has its own virtual AI assistant. Dubbed Fargo , it helps retail customers get answers to their banking questions and execute tasks such as turning on and off debit cards, checking credit limits, and offering details for transactions. Fargo, powered by Google Cloud’s artificial intelligence, was launched in March 2023. For a large money center bank like Wells Fargo — one that’s historically catered to Main Street — the Fargo assistant could bolster the bank’s largest reporting segment. The consumer, banking and lending unit in the second quarter accounted for roughly 43% of the $20.69 billion booked in companywide revenue. Striking AI deals, landing partnerships None of this would be possible without partnerships. Big banks have tapped startups and tech behemoths alike for access to their large language models (LLMs) to build their own AI products. In addition to Morgan Stanley’s OpenAI deal and Wells Fargo’s ties with Google, Deutsche Bank also partnered with Club name Nvidia in 2022 to help develop apps for fraud protection . BNP Paribas announced on July 10 a deal with Mistral AI — often seen as the European alternative to OpenAI — to embed the company’s LLMs across its customer services, sales and IT businesses. Shortly after that, TD Bank Group signed an agreement with Canadian AI unicorn Cohere to utilize its suite of LLMs as well. “We watch out for these [deals] because that means they are onboarding a lot of that capability,” Evident’s Mousavizadeh said. Big AI hires for top Wall Street firms Banks have also had to do a lot of hiring to make their AI dreams come true — poaching swaths of data scientists, data engineers, machine learning engineers, software developers, model risk analysts, policy and governance managers. Despite layoffs across the banking industry, AI talent at banks grew by 9% in the last six months, according to July data from Evident , which tracks 50 of the world’s largest banks. That was double the rate of growth seen in total headcount across the sector. Mousavizadeh said that one of the major “characteristics of the leading banks in AI is that they’re not stopping hiring. The leading banks are the [ones] that are hiring the most AI talent.” In July, Wells Fargo named Tracy Kerrins as the new head of consumer technology to oversee the firm’s new generative AI team. And Morgan Stanley’s McMillan was promoted to AI head in March after serving as a tech executive in the wealth division. He’s helped oversee Morgan Stanley’s OpenAI-related projects. JPMorgan last year also appointed Teresa Heitsenrether as its chief data and analytics officer in charge of AI adoption. Bottom line The more we see these firms spend and invest in AI talent, the more serious they appear to be about the future of the nascent tech. We don’t expect these third-party partnerships, new use cases, and slew of hires to create exponential returns overnight. However, As long as these costs don’t outweigh return on investment (ROI), we’re happy with Wells Fargo and Morgan Stanley’s moves to innovate. “We’re very much in the foothills of this, and we’re going to see much more ROI generated off the AI use cases in 2025,” Mousavizadeh said. “But, I think you’re going to see a real tipping point in 2026.” (Jim Cramer’s Charitable Trust is long NVDA, WFC, GOOGL, MSFT, MS. 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.
Pedestrians walk along Wall Street near the New York Stock Exchange (NYSE) in New York, US, on Tuesday, Aug. 27, 2024.
Republican presidential nominee and former U.S. President Donald Trump walks off stage after speaking at a campaign rally at the Van Andel Arena in Grand Rapids, Michigan, on July 20, 2024.
Anna Moneymaker | Getty Images
NASHVILLE — Former President Donald Trump said that if he were returned to the White House, he would ensure that the federal government never sells off its bitcoin holdings. But he stopped short of proposing a formal federal reserve of digital currency.
“For too long our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said during his keynote speech at this year’s Bitcoin Conference in Nashville, the biggest bitcoin conference of the year.
The former president’s remarks cameas the race to capture the votes and the campaign cash of America’s frontline fintech adopters takes center stage in the 2024 presidential contest.
“This afternoon I’m laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world and we’ll get it done,” Trump said.
But Trump’s pledge to simply maintain the U.S. government’s current bitcoin holdings was a less radical pitch to the crypto crowd relative to other proposals at the conference.
Third-party candidate Robert F. Kennedy Jr., for instance, during his Friday Bitcoin Conference speech promised to launch a reserve of 4 million bitcoin, starting with the bitcoin holdings that the U.S. government already has stockpiled from criminal seizures. Kennedy said he would mandate the government purchase 550 bitcoin a day until the reserve reached 4 million.
Shortly after Trump’s speech, Sen. Cynthia Lummis, R-Wy., read out her own legislative proposal to amass an official U.S. federal reserve of 1 million bitcoin over five years.
“It will be held for a minimum of 20 years and can be used for one purpose: Reduce our debt,” Lummis said.
The price of bitcoin briefly dipped during Trump’s speech, but recovered and was up slightly for the day, as of 5:15 p.m. E.T.
Throughout his remarks, the former president worked to draw contrasts between the Republican Party’s growing embrace of crypto versus the hardline regulatory approach that has characterized the Biden administration.
“The Biden-Harris administration’s repression of crypto and bitcoin is wrong and it’s very bad for our country,” Trump said. “Let me tell you if they win this election, every one of you will be gone. They will be vicious. They will be ruthless. They will do things that you wouldn’t believe.”
Trump went on to list a series of crypto-friendly promises to a crowd of cheering bitcoin supporters, promising to dismantle what he called the “anti-crypto crusade” of President Joe Biden and Vice President Kamala Harris.
“On day one, I will fire Gary Gensler,” Trump said, referencing the Biden-appointed chairman of the Securities and Exchange Commission who has taken an aggressive approach to crypto regulation.
The president does not have the power to fire appointed commissioners. Even if Trump were to appoint a new SEC chairman, Gensler would remain a commissioner on the independent agency.
The former president also pledged to create a “bitcoin and crypto presidential advisory council.”
“The rules will be written by people who love your industry, not hate your industry,” Trump said.
The Republican presidential nominee also held an accompanying fundraiser in Nashville, with tickets topping out at $844,600. In June, BTC Inc. CEO David Bailey, who organized the conference, pledged to raise $100 million and turn out more than 5,000,000 voters for the Trump re-election effort, as the bitcoin sector increasingly turns to the Trump camp for support.
Trump taking the main stage to directly address the bitcoin community is the latest in a months-long campaign to appeal to the crypto contingent, including accepting donations in virtual tokens, pledging to end President Joe Biden’s “war on crypto,” and advocating that all future bitcoin be made in America. It is also quite the about-face by the Republican presidential nominee.
Trump very publicly dismissed bitcoin when he was in the White House. In July 2019, he said he was “not a fan” of bitcoin and other cryptocurrencies. He said that tokens aren’t money, that their value was “based on thin air,” and warned that unregulated crypto assets could help facilitate the drug trade, among “other illegal activity.”
“Bitcoin just seems like a scam,” he told Fox in a phone interview in 2021. “I don’t like it because it’s another currency competing against the dollar.”
“I want the dollar to be the currency of the world, that’s what I’ve always said,” continued Trump in his conversation with Fox.
But five years, a lost presidential election, and millions of dollars from the crypto lobby later, the Republican presidential nominee sung the praises of the digital currency at the biggest bitcoin conference of the year in Nashville, which kicked off on Thursday.
“Bitcoin stands for freedom, sovereignty and independence from government coercion and control,” Trump said during his keynote speech.
Trump’s shift on bitcoin comes as the Republican Party pledges to lift the red tape of the Biden-Harris administration, working to turn crypto regulation into a voting issue for November, especially as inflation consistently ranks as a top voter priority in polls.
As crypto lobbyists and supporters become more of a presence in Washington, it raises questions on whether the Democratic Party will dig into the hardline regulatory approach of the past several years or ease its position.
“Every presidential candidate needs to understand, digital asset, pro-innovation voters are here to stay,” Democratic Rep. Wiley Nickel of North Carolina told CNBC in an interview, adding that crypto regulation should not become a “partisan political football.”
“I want to keep this as a bipartisan issue. I don’t want Donald Trump to politicize this issue,” Rep. Nickel said.
Rep. Ro Khanna, D-Ca., echoed Rep. Nickel’s sentiment, saying that crypto should not turn into a partisan talking point but will require regulation like any technology.
“I don’t really see why it’s partisan. Being against bitcoin is like being against cell phones. It’s like being against AI. It’s like being against laptops,” Khanna told CNBC. “It’s a technology. Have thoughtful regulation on the technology, but it’s a technology that has appreciated from about $10,000 to $80,000.”
Reps. Khanna and Nickel were two of the only Democrats to attend the Bitcoin Conference.
Bitcoin 2024 conference organizers say they were briefly in talks to have Vice President Kamala Harris appear at the conference, though she ultimately declined. But billionaire businessman Mark Cuban posted on X that the Harris campaign had reached out with questions about crypto, so it appears the vice president is looking into this space and potentially figuring out where her policies, if elected president, could land.
“I think we’re going to hear from Vice President Harris soon on this. And I’m very optimistic we’re gonna get a reset. And that I think, will matter in a major way,” Rep. Nickel said. “This issue isn’t going anywhere. And we’ve got to make sure we continue to embrace this in bipartisan way.”
Harris’ team has already begun to reach out to people close to crypto companies to set up meetings, the Financial Times reported on Saturday.
The recent thaw in Trump’s sentiment for the digital asset space has coincided with a sudden influx of interest and cash from the country’s top tech talent.
He has raised more than $4 million in a mix of cryptocurrencies, including bitcoin, ether, the U.S. dollar pegged stablecoin USDC, and various memecoins, with contributors hailing from 12 states, including a few battlegrounds.
Crypto billionaire twins and venture investors Tyler and Cameron Winklevoss led the charge, each contributing 15.57 bitcoin, or just over $1 million at the time of their donation, according to a filing with the Federal Election Commission — though they received a partial refund, because contributions surpassed the $844,600 limit.
There are a number of other venture capitalists who are pro-crypto, and they’ve pledged millions to the Trump campaign, as well.
Venture capitalists Marc Andreessen and Ben Horowitz told employees of Andreessen Horowitz (a16z) that they plan to make significant donations to political action committees supporting Trump’s campaign. The partners of Sequoia Capital are backing Trump, as is venture investor David Sacks, who helped the former president raise $12 million at a fundraiser he hosted in his San Francisco home. The chief legal officers for centralized crypto exchange Coinbase and blockchain giant Ripple were both there.
These members of the tech elite are also heavily contributing to pro-crypto super PACs like Fairshake, which has raised more than $200 million dollars to elect pro-crypto candidates up and down the ballot, and on both sides of the aisle.
But reporting from NBC News finds that the vice president’s team is looking to win over support from some of big tech’s undecided donors, many of whom remained on the sidelines while President Joe Biden remained in the race. Their tune may be changing now that the vice president is the de facto nominee for the party.
It helps that Harris has a long track record in California.
She has been fundraising in the tech community for years, including from those working at Amazon, Alphabet, Microsoft and Apple.
“The pivot that has occurred in the last three days is dramatic,” Steve Westly, a venture capitalist and one-time gubernatorial candidate for California, told NBC News. “I don’t think I’ve ever seen such a surge of enthusiasm in any campaign I’ve been involved with.”
This comes as Trump’s running mate for vice president, JD Vance, is set to hold a fundraiser of his own in Palo Alto on Monday.
— CNBC’s Rebecca Picciotto contributed to this report.
A man walks past a logo of SK Hynix at the lobby of the company’s Bundang office in Seongnam on January 29, 2021.
Jung Yeon-Je | AFP | Getty Images
SK Hynix, one of the world’s largest memory chipmakers, on Thursday said second-quarter profit hit its highest level in 6 years as it maintains its leadership in advanced memory chips critical for artificial intelligence computing.
Here are SK Hynix’s second-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:
Revenue: 16.42 trillion Korean won (about $11.86 billion), vs. 16.4 trillion Korean won
Operating profit: 5.47 trillion Korean won, vs. 5.4 trillion Korean won
Operating profit in the June quarter hit its highest level since the second quarter of 2018, rebounding from a loss of 2.88 trillion won in the same period a year ago.
Revenue from April to June increased 124.7% from 7.3 trillion won logged a year ago. This was the highest quarterly revenue ever in the firm’s history, according to LSEG data available since 2009.
SK Hynix on Thursday said that a continuous rise in overall prices of its memory products — thanks to strong demand for AI memory including high-bandwidth memory — led to a 32% increase in revenue compared with the previous quarter.
The South Korean giant supplies high-bandwidth memory chips catering to AI chipsets for companies like Nvidia.
Shares of SK Hynix fell as much as 7.81% Thursday morning.
The declines came as the South Korea’s Kospi index lost as much as 1.91% after U.S. tech stocks sold off overnight, following disappointing Alphabet and Tesla earnings. Those reports mark investors’ first look at how megacap companies fared during the second quarter.
“In the second half of this year, strong demand from AI servers are expected to continue as well as gradual recovery in conventional markets with the launch of AI-enabled PC and mobile devices,” the firm said in its earnings call on Thursday.
Capitalizing on the strong AI demand, SK Hynix plans to “continue its leadership in the HBM market by mass-producing 12-layer HBM3E products.”
Memory leaders like SK Hynix have been aggressively expanding HBM capacity to meet the booming demand for AI processors.
HBM requires more wafer capacity than regular dynamic random access memory products – a type of computer memory used to store data – which SK Hynix said is also struggling with tight supply.
“Investment needs are also rising to meet demand of conventional DRAM as well as HBM which requires more wafer capacity than regular DRAM. Therefore, this year’s capex level is expected to be higher than what we expected in the beginning of the year,” said SK Hynix.
“While overcapacity is expected to increase next year due to the increased industrial investment, a significant portion of it will be utilized to ramp up production of HBM. So the tight supply situation for conventional DRAM is likely to continue.”
SK Kim of Daiwa Capital Markets in a June 12 note said they expect “tight HBM and memory supply to persist until 2025 on a bottleneck in HBM production.”
“Accordingly, we expect a favourable price environment to continue and SK Hynix to record robust earnings in 2024-25, benefitting from its competitiveness in HBM for AI graphics processing unit and high-density enterprise SSD (eSSD) for AI-servers, leading to a rerating of the stock,” Kim said.
High-bandwidth memory chip supplies have been stretched thanks to explosive AI adoption fueled by large language models such as ChatGPT.
The AI boom is expected to keep supply of high-end memory chips tight this year, analysts have warned. SK Hynix and Micron in May said they are out of high-bandwidth memory chips for 2024, while the stock for 2025 is also nearly sold out.
Large language models require a lot of high-performance memory chips as such chips allow these models to remember details from past conversations and user preferences in order to generate humanlike responses.
SK Hynix has mostly led the high-bandwidth memory chip market, having been the sole supplier of HBM3 chips to Nvidia before rival Samsung reportedly cleared the tests for the use of its HBM3 chips in Nvidia processors for the Chinese market.
The firm said it expects to ship the next generation 12-layer HBM4 from the second half of 2025.
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.”
It’s been another great run for stocks since the Club’s last monthly meeting in June. The likelihood the Federal Reserve will lower interest rates sooner than later after recent upbeat inflation data pushed stocks to new highs over the past few weeks. Traders now see the odds of a rate cut by September at 100% , according to the CME FedWatch tool . The Dow Jones Industrial Average reached an all-time intraday high on Tuesday, while the S & P 500 did the same Monday. On July 11, the Nasdaq Composite hit new a new high as well. Taking advantage of the overbought market, we’ve executed a series of trades. The Club offloaded shares of TJX Companies on Friday in order to raise some additional cash. Before that, we made sales of Meta Platforms and Palo Alto Networks on July 8, locking in massive gains of 150% and 94%, respectively, since we first purchased both. On the flip side, we’ve looked for opportunities during the tech pullback. We started by initiating a small position in Advanced Micro Devices , a stock we most recently owned in the summer of 2023, and bought more on Tuesday. Through all the portfolio action, a key theme has emerged in the stock market, especially over the past week. Investors are jumping on the chance to get in on sectors outside of Big Tech. The Russell 2000 , which measures the performance of small-cap U.S. stocks, jumped nearly 11% in the past five sessions. Meanwhile, the tech-heavy Nasdaq edged 0.18% lower over the period. Case in point: Some of our biggest winners in 2024, mega-cap stocks like Amazon , Alphabet, Meta and Microsoft posted losses since our last meeting. Amazon is still up 27% for the year, while Alphabet and Meta jumped 31% and 38%, respectively. Other losers included our stocks with heavy ties to China: Wynn Resorts , Starbucks and Estee Lauder . All said, 12 of the portfolio’s 34 stocks were in the red. We see the market rotation playing out in our top-five performing names as well. From the June 27 close through Tuesday, only one company is in mega-cap tech. Here’s our top five and what’s driving the gains for each: 1. Ford Motor: 17.7% There wasn’t a single catalyst for Ford Motor’s outperformance. Investor sentiment, however, looks to have improved on signs that sales are picking up. Shares of the automaker rose on July 3 after the company said hybrid vehicle sales surged 56% in the second quarter, which set a new quarterly sales record for the segment. On July 11, the stock jumped again after June’s consumer price index (CPI) print indicated easing inflation and strengthened the Fed’s case to lower rates — an environment that could lead to more consumers buying Ford’s vehicles. The stock reached a 52-week high of $14.43 apiece on Monday. 2. Morgan Stanley: 10.9% Would a second presidency for Donald Trump benefit big U.S. banks? Investors in Morgan Stanley seem to think so. Shares advanced after President Joe Biden and Trump squared off during the June 27 presidential debate , which many viewed as a big win for the former president. Morgan Stanley’s momentum continued into July and hit an all-time high of $109.11 on Tuesday after the bank posted a largely better-than-expected second quarter report . We raised our price target to $120 from $98 apiece after results. 3. Stanley Black & Decker: 10.5% Stanley Black & Decker shares surged on recent signs of forthcoming monetary policy easing, which could spur housing market activity because of lower borrowing costs. More homeowners means more demand for the DeWalt parent’s offerings as buyers look for tools needed to fix things around the house. This, along with investors looking for pockets outside of Big Tech, have sent the stock higher since July 1. Shares of the company climbed 3.5% on Tuesday, and the Club capitalized of the stock’s advance, trimming our position in the afternoon. To be sure, we still see long-term gains ahead once the Fed starts to cut. 4. Apple: 9.7% Apple hit a record high of $237.23 apiece on Monday after Morgan Stanley listed the stock as a top industry pick. The Wall Street analysts said that the company’s artificial intelligence efforts will cause a much-needed upgrade cycle for the company’s flagship iPhone. Morgan Stanley also hiked Apple’s price target to $273 apiece from $213, a more than 16% upside from Tuesday’s close. It’s not like the stock was stalled: Shares have been climbing for months on excitement about Apple’s AI plans, which were recently unveiled at the company’s worldwide developers conference on June 10. 5. Dover: 7.3% Dover began its ascent higher on July 9 as capital rotated into sectors that benefit more from interest rate cuts. Dover is an industrial name, producing thermal connectors that are used in one of the fastest-growing end markets: data centers. This makes Dover a great under-the-radar AI play. “Dover is going to be a big name for me,” Jim said recently. Shares hit an all-time high Tuesday of $190.54 each, and closed the day nearly 3% higher. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
A trader works, as a screen broadcasts a news conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange in New York City, U.S., June 12, 2024.
Brendan Mcdermid | Reuters
It’s been another great run for stocks since the Club’s last monthly meeting in June.
Before co-founding biotech startup Inceptive, Jakob Uszkoreit had an idea that would eventually make generative artificial intelligence possible. As a researcher at Google in 2017, Uszkoreit was trying to speed up the training of neural networks.
He suggested using a new way to interpret data called self-attention. That idea gave way to the transformer, the neural network architecture that underpins generative AI.
“There are actually applications, for example at Google and other places, where transformers have been deployed in production long before, but to much, much less fanfare,” Uszkoreit told CNBC in an interview in June. He said OpenAI’s ChatGPT, which was launched in late 2022, shined “the spotlight on these applications.”
The transformer idea was published by Uszkoreit and seven other Google researchers in the 2017 “Attention Is All You Need” paper. All eight authors have since left Google.
“Maybe Google here hasn’t been able to be as daring as, you know, a much, much smaller company such as OpenAI when it comes to applying this technology to quite different types of products,” Uszkoreit said. “This is something that we fundamentally have to accept and actually, in a certain sense, be maybe even grateful for because Google is providing something to the world that we all rely on day to day.”
Inceptive Co-Founder and CEO Jakob Uszkoreit is working on tranforming the way drugs work using generative AI
Inceptive
Uszkoreit left Google in 2021 to co-found Inceptive, which he describes as a a biological software company. In September, Inceptive raised $100 million in a funding round led by Andreessen Horowitz and Nvidia in an attempt to apply AI to drug development.
“We’re starting with a focus on RNA, whose exact composition has been designed with generative artificial intelligence, such that these molecules inside certain biological systems exhibit behaviors that ultimately are native to those systems,” Uszkoreit said. “There’s actually this promise of a flavor of medicine that is in much greater harmony with living systems than most existing medicines.”
Watch the video to hear the full conversation between CNBC’s Katie Tarasov and Inceptive CEO Jakob Uszkoreit.
The S&P 500 hit a fresh new milestone on Wednesday, closing above 5,600 for the first time ever thanks to a rise in semiconductor stocks. The broad market index jumped 1.02%, and marked a seventh straight day of gains. The Nasdaq Composite, meanwhile, climbed 1.18% and also hit a new all-time high, while the Dow Jones Industrial Average joined the trend, adding 429.39 points, or 1.09%. Chip stocks led the day, with Taiwan Semiconductor rising 3.5% and Nvidia adding 2.7%, while Qualcomm and Broadcom rose about 0.8% and 0.7%, respectively. Follow live market updates.
Delta shares tumbled nearly 10% in premarket trading Thursday morning after the airline kicked off earnings season with a forecast that fell short of analysts’ estimates. Delta forecast record revenue for the third quarter, thanks to booming summer travel demand, but it expects to grow its flying capacity by 5% to 6% compared with last year, slower than the 8% it had expected in the second quarter. Airlines are seeing travel demand break records, but profits have lagged as the industry faces higher costs. Meanwhile, Delta also reported earnings in line with expectations and adjusted revenue of $15.41 billion, slightly less than the $15.45 billion expected, based on consensus estimates from LSEG.
An attendee films Samsung Electronics’ Galaxy Smart Ring during its unveiling ceremony in Seoul, South Korea, July 8, 2024.
Kim Hong-ji | Reuters
Samsung wants to put a ring on it. The tech giant launched the Galaxy Ring on Wednesday, a lightweight “smart ring” equipped with sensors designed for health monitoring 24 hours a day. The ring starts at $399.99. The announcement follows rival Apple‘s push into that space and comes as users hold onto smartphones for longer, inspiring device makers to look for add-on electronics products. Among other things, Samsung also unveiled its latest foldable smartphones, which are packed with AI features, at an event in Paris. The Samsung Galaxy Z Fold6 starts at $1,899.99 and opens like a book to have a bigger screen, while the Z Flip6 is a more traditional flip phone with a bendable screen and starts at $1,099.99.
Shares of software company Hubspot plunged 12% Wednesday after Bloomberg reported that Google parent Alphabet has shelved plans to buy the company. Alphabet expressed its interest in a deal earlier this year, “but the sides didn’t reach a point of detailed discussions about due diligence,” according to the report, which cited people with knowledge of the matter. Hubspot, which makes software that other companies use to automate marketing and reach prospective customers, has reported strong revenue growth and sales in recent quarters. An acquisition would have helped Google grow revenue from its business software and cloud infrastructure, but U.S. regulators have been pushing back on deals involving Big Tech companies.
Customers enter a Costco Wholesale Corp. warehouse store in Hawthorne, California, on June 12, 2024.
Patrick T. Fallon | Afp | Getty Images
Costco is going to cost more. The retailer said Wednesday that the price of a standard annual membership would rise by $5, to $65 from $60, in the U.S. and Canada starting Sept. 1. The higher tier of its membership, the “Executive Plan” would increase by $10, to $130 a year from $120. It’s the first time in seven years that Costco has raised its membership fees and has delayed its usual timeline of upping the price every five and a half years as consumers dealt with high inflation.
— CNBC’s Brian Evans, Leslie Josephs, Arjun Kharpal, Jordan Novet, Jennifer Elias and Melissa Repko contributed to this report.
— Follow broader market action like a pro on CNBC Pro.
Artificial intelligence has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market.
The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.
Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.
San Francisco is reeling from the twin challenges of bringing people back to the office after the Covid pandemic and a slowdown in the tech market that’s led to mass job cuts across the industry. Tech companies have laid off more than 530,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet, Meta, Amazon, Tesla, Microsoft and Salesforce.
Softening the blow of late has been the soaring popularity of generative AI and the decision by fast-growing startups to open large offices in San Francisco.
OpenAI, the market leader with a private valuation that’s topped $80 billion, announced in October that it was leasing about 500,000 square feet of space in the Mission Bay neighborhood, the biggest office lease in the city since 2018. Robert Sammons, senior research director at Cushman & Wakefield, said OpenAI is continuing to look for more space in the city.
Also last year, OpenAI rival Anthropic subleased 230,000 square feet at Slack’s headquarters. And in May of this year, Scale AI signed a lease for a reported 170,000 to 180,000 square feet of space in Airbnb’s office building.
“San Francisco is certainly the center of AI, but AI is not going to save the San Francisco commercial real estate market,” Sammons said. “It will help.”
While richly capitalized AI startups are signing large leases for new space, the bigger trend is that tech companies, law offices and consulting firms are looking to reduce their footprint when existing leases come up, Sammons said, reflecting the widespread move to hybrid work.
In many cases, companies are looking to relocate to higher quality space in more desirable parts of the city, because prices have come down and employers need to be near restaurants and shops to get staffers to come back, Sammons added.
“The best quality trophy space continues to perform well, because tenants want to be in the best locations with the best amenities around them,” Sammons said.
Some of the city’s top employers, including Salesforce, Uber, Visa and Wells Fargo, have brought employees back to offices for part of the week. That’s helped in the financial district, where the vacancy rate is still 34.2% on the north side and 32.7% on the south side at the end of the quarter. In SoMa, which historically was a popular area for venture-backed startups, the vacancy rate is almost 50%.
SoMa is further away from mass transit options and has also been hurt by large retail departures. Vacant office space across San Francisco for the quarter totaled 29.6 million square feet, Cushman & Wakefield said.
The firm said in its report that there are positive signs in the market, with absorption poised to improve in the second half and office job numbers stabilizing following a steep drop-off. But Sammons said it looks like there’s more room for rents to fall and for vacancies to rise. Uncertainty surrounding the upcoming presidential election may be a factor delaying new leases, he said.
“Sometimes tenants postpone making decisions when there are major elections,” he said.
Wall Street finished higher for the holiday-shortened trading week, with tech stocks leading the way. The Dow Jones Industrial Average gained under 1% for the week. The S & P 500 and Nasdaq , which both closed at record highs Friday — rising nearly 2% and 3.5%, respectively, for the week. The first week of July continued the strength seen in June, the second quarter, and the first half of 2024. The S & P 500 technology sector was the big winner this past week, with Apple and Broadcom as our top Club stocks. Consumer discretionary and communication services, featuring Club name Meta Platforms and Alphabet , were also strong. Energy led to the downside this week, followed by health care and industrials. Looking back on the week, short as it was given the early close on Wednesday and Thursday off, we got some notable updates on the economy and heard from Club holding Constellation Brands . The Corona and Modelo brewer’s quarterly results Wednesday were decent , and the stock initially popped on the news. We told members that we were taking some profits in Constellation shortly before the open . However, the troubled wine and spirits business remained a problem that management must address in the coming quarters. Shares finished Wednesday down more than 3%, though they recovered much of that on Friday for a relatively flat week. Helping Friday’s largely higher session was drop in bond yields – precipitated by an uptick in June’s unemployment rate to 4.1% and only modestly higher than expected nonfarm payrolls additions of 206,000. Wage inflation was right in line with expectations. Taken as a whole, the government’s monthly jobs report card supported the case of the Federal Reserve to cut interest rates at its September meeting. While market odds favor a second cut in December, the Fed projected after its June meeting just one rate cut this year. This past week also brought updates on the manufacturing sector. On Monday, June’s ISM Manufacturing purchasing managers index came in weaker than expected and pointed to a faster-than-expected contraction, and on Wednesday, May’s factory order numbers showed a monthly decline versus expectations for a small increase. The ISM’s services PMI for June, out Wednesday, also disappointed, as it showed a contraction in the services sectors. Economists had been expecting to see an expansion. These readings were also green lights for the Fed to start cutting rates. We hope everyone had a good July 4 th and has a restful weekend. You’ll want to take advantage of the lull because believe it or not, earnings season is back. Three of the four big money center banks report this coming Friday, including Club name Wells Fargo . The government also delivers key data on consumer and wholesale inflation. Economic data : The June consumer price index (CPI) is out on Thursday morning, and the June producer price index (PPI) is out on Friday morning. Of the two, CPI carries more weight given that it more closely represents what consumers are paying for a basket of goods from one year, or month, to the next, which is the Fed’s main concern. However, PPI is important to track because it tells us what is happening at the cost input level for corporations. That speaks to margin dynamics – and therefore, it can inform us on both profitability and potential price actions companies may need to take in the future to protect profitability. Within the CPI data, be sure to watch the shelter component, which has been a huge thorn in the Fed’s side. Shelter, a barometer of what people pay for housing, has proven a very sticky source of inflation – a problem because, for most Americans, it represents a large and unavoidable cost. For headline CPI, economists are looking for a 3.1% annual increase, according to FactSet as of Friday. Core CPI, which excludes food and energy prices, is expected to increase 3.5% year over year. If realized, that would represent a slight deceleration at the headline level but a slight acceleration at the core level. As for PPI, economists are looking for a 2.3% annual increase at the headline level and a 2.5% year-over-year rise at the core level. Those numbers would be slightly higher than what we saw in May. Earnings season : Within the portfolio, net interest income (NII) guidance is going to be a key watch item when Wells Fargo reports its quarter this coming Friday. At an industry conference Tuesday, CFO Michael Santomassimo reiterated guidance for NII to be down 7% to 9% year over year. We still think this outlook could be conservative since the Fed’s higher-for-longer policy is generally a tailwind to net interest income. However, other factors like muted loan demand have prevented Wells Fargo from raising its outlook this year. Recognizing strong recent runs in shares of Wells Fargo and our other Club bank Morgan Stanley , we took some profits this past Friday. Morgan Stanley is set to deliver its earnings on Tuesday, July 16. We’re also interested to hear management’s thoughts on the intended pace of share repurchases in the second half of the year, now that the results of the stress test are in. Wells Fargo – and our other bank name Morgan Stanely – both passed, indicating they have strong capital positions with excess money to return to shareholders. Other higher-level watch items in the Wells Fargo report include commentary on the state of consumer savings, an indication of further buying power, and the real estate market, which has been something we’ve been monitoring as the world finds a new normal post-Covid. Monday, July 8 No major events Tuesday, July 9 No major events Wednesday, July 10 No major events Thursday, July 11 8:30 a.m. ET: Consumer price index 8:30 a.m. ET: Initial jobless claims Before the bell earnings: PepsiCo (PEP), Delta Air Lines (DAL), Conagra Brands (CAG) Friday, July 12 8:30 a.m. ET: Producer price index Before the bell: Wells Fargo (WFC), JPMorgan Chase (JPM), Citigroup (C) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
U.S. flag is seen hanging on New York Stock Exchange building on Independence Day In New York, United States on America on July 4th, 2024.
Beata Zawrzel | Nurphoto | Getty Images
Wall Street finished higher for the holiday-shortened trading week, with tech stocks leading the way.
Amazon will double the value of credits it offers some startups to use its cloud infrastructure, CNBC has learned, as the company faces heightened competition from Microsoft in artificial intelligence services.
Starting July 1, startups that have raised a Series A round of funding in the past year will be eligible for $200,000 in credits through AWS’ Activate program, up from $100,000 before, the Amazon cloud unit said in an email to venture capitalists this week. Seed-stage startups will still be eligible for $100,000 in credits, AWS said.
Two people briefed on the changes confirmed the credit increase, though they asked not to be named because the information is private.
Matt Garman, who was recently promoted to CEO of AWS after running sales and marketing, was meeting with founders in Silicon Valley this week, the people said. Garman told the execs that collaborating with startups would always be a primary focus, one of the people said, adding that Garman described AI companies as AWS’ ideal customers.
An AWS spokesperson confirmed the increase in credits and Garman’s visit to Silicon Valley. The spokesperson added that in the past, the $100,000 would expire in one year, while the $200,000 credit will now expire in three years.
Amazon, which is best known for its massive online retail operation, derives most of its profit from AWS, a business it launched in 2006, well before rivals Microsoft and Google hit the scene. AWS leads the market, with $25 billion in revenue in the first quarter, up 17% from a year earlier.
But Microsoft Azure and Google Cloud are growing more quickly, and are benefiting from rapidly advancing AI models. Backed by Microsoft, OpenAI launched ChatGPT in late 2022 on Azure, and has since attracted a wave of AI workloads to Microsoft from companies big and small. Google has a number of large language models, most notably Gemini.
Amazon has been trying to catch up in generative AI and has poured billions of dollars into OpenAI challenger Anthropic.
Last month, AWS CEO Adam Selipsky announced his resignation after three years running the business, with Garman named as his successor. During Selipsky’s time at the helm, Microsoft and Google increased their share of the cloud infrastructure market. One analyst told CNBC that Microsoft “ran laps around” AWS in generative AI.
Startups have long been fertile ground for cloud infrastructure companies, as they try and lure ambitious founders who could be building the next multibillion-dollar business.
In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator that would provide participating startups with $350,000 in Azure credits and access to graphics processing units (GPUs) for training AI models, a spokesperson said. Microsoft has since extended the $350,000 credit incentive to other accelerators, including the AI Grant.
Startups enrolled in Microsoft’s Founders Hub program, which doesn’t require previous venture funding, can receive up to $150,000 in Azure credits over four years.
In addition to its Activate offering, Amazon has a new 10-week generative AI accelerator program. Participants will be able to access up to $1 million in cloud credits, according to the website.
Earlier on Friday, Amazon’s head scientist, Rohit Prasad, told employees that the company has hired David Luan, co-founder and CEO of AI startup Adept, along with some of Luan’s colleagues. “Amazon is also licensing Adept’s agent technology, family of state-of-the-art multimodal models, and a few datasets,” Adept said in a blog post.
