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  • CNBC Daily Open: Markets are on a hot streak

    CNBC Daily Open: Markets are on a hot streak

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    The Nasdaq MarketSite in New York, June 9, 2023.

    Michael Nagle | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Big streak  
    The     Nasdaq Composite recorded its longest winning streak since January, closing out Monday with gains of 0.3%. Stocks in the U.S. built on the positive momentum from last week, with the S&P 500 gaining 0.18% and the Dow Jones Industrial Average closing 0.1% higher. The tech-heavy index rose for seven straight days, while the Dow and S&P 500 rose for six straight days for the first time since July and June, respectively. In Asia, South Korean stocks fell 3%, leading losses, while investors also assessed trade data from China and a rate hike by the Reserve Bank of Australia.

    Deep job cuts
    Citigroup‘s 240,000 employees were on edge as fears grow around CEO Jane Fraser‘s massive corporate overhaul to cut costs that would result in an undisclosed number of layoffs. “We’ll be saying goodbye to some very talented and hard-working colleagues,” she said in a memo in September. Now, the reorganization, which is referred internally by its code name, “Project Bora Bora,” could see job cuts of at least 10% in several major businesses, according to people with knowledge of the process.  

    AI arms race heats up
    During its first in-person event on Monday, Microsoft-backed OpenAI announced its latest and most powerful GPT-4 Turbo artificial intelligence model yet. It also unveiled a new option that will allow users make custom versions of its viral ChatGPT chatbot and is cutting prices on the fees that companies and developers pay to run the software.

    China imports surprise
    China’s imports unexpectedly rose in October from a year ago, but exports recorded a worse-than-expected drop. Data showed imports rose by 3% in U.S. dollar terms for the month, above a Reuters’ forecast for a 4.8% drop. Exports fell 6.4% last month in U.S. dollar terms, worse than an expected 3.3% drop.

    [PRO] Growth stocks that are set for bigger leaps
    Higher-for-longer interest rates are bad for growth stocks but, investor hopes were reignited after the U.S. Federal Reserve kept rates unchanged for the second consecutive meeting. This led stocks to bounce back last week and for those eager to get back into such growth names, CNBC Pro screened for stocks you should look at.  

    The bottom line

    Markets started the week on a high note as major averages closed out Monday’s session with some big winning streaks.

    The Nasdaq rose for the seventh straight day, its longest winning streak since January, while the Dow and S&P 500 gained for six straight days for the first time since July and June, respectively.

    Wall Street indexes had strong momentum following their best week of 2023, propelled by a soft monthly jobs report that drove bond yields lower, boosting equities.

    “The stock market has had a strong start to November, and the move seems deserved in light of what we’re seeing in most, though admittedly not all, of our sentiment indicators,” wrote Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.

    “Generally, our view over the last month or so has been that if the surge in yields stopped soon, US equities could escape without incurring too much additional damage,” she added.

    Shifting focus to the fast-paced AI arms race, viral ChatGPT chatbot owner OpenAI announced its most powerful GPT-4 Turbo artificial intelligence model yet to stay ahead of rivals like Anthropic, Google and Meta.

    GPT-4 Turbo now provides answers with context up to April 2023, accepts more input and supports text-to-speech. Which means you can narrate and summarize an entire book, without having to lift a finger.

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  • CNBC Daily Open: Markets extend winning streaks

    CNBC Daily Open: Markets extend winning streaks

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    NEW YORK, NEW YORK – MARCH 05: A view of the skyline with The Trump Tower and Federal Hall on Wall Street in Downtown Manhattan on March 05, 2021 in New York City. (Photo by Roy Rochlin/Getty Images)

    Roy Rochlin | Getty Images Entertainment | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Big streak  
    The     Nasdaq Composite recorded its longest winning streak since January, closing out Monday with gains of 0.3%. Stocks in the U.S. built on the positive momentum from last week, with the S&P 500 gaining 0.18% and the Dow Jones Industrial Average closing 0.1% higher. The tech-heavy index rose for seven straight days, while the Dow and S&P 500 rose for six straight days for the first time since July and June, respectively.  European markets closed lower on Monday, with the Stoxx 600 index down 0.2%.

    Deep job cuts
    Citigroup‘s 240,000 employees were on edge as fears grow around CEO Jane Fraser‘s massive corporate overhaul to cut costs that would result in an undisclosed number of layoffs. “We’ll be saying goodbye to some very talented and hard-working colleagues,” she said in a memo in September. Now, the reorganization, which is referred internally by its code name, “Project Bora Bora,” could see job cuts of at least 10% in several major businesses, according to people with knowledge of the process.  

    AI arms race heats up
    During its first in-person event on Monday, Microsoft-backed OpenAI announced its latest and most powerful GPT-4 Turbo artificial intelligence model yet. It also unveiled a new option that will allow users make custom versions of its viral ChatGPT chatbot and is cutting prices on the fees that companies and developers pay to run the software.

    Intensive diplomacy
    The U.S. Treasury Department announced Monday that Treasury Secretary Janet Yellen will host her Chinese counterpart, Vice Premier He Lifeng, just ahead of the Asia Pacific Economic Cooperation forum next week, for “intensive diplomacy.” The meetings will be held in San Francisco on Nov. 9-10 and is part of a broader push between American and Chinese officials to make progress on specific issues. This arrives ahead of an expected meeting between President Joe Biden and Chinese President Xi Jinping on the sidelines of APEC.

    [PRO] Leaders of the market comeback
    Stocks have kicked off November on a positive note, with the major averages coming off their best weeks of the year. Now, CNBC Pro deep dives into which winning names investors should look at that could be poised to lead any rally in the coming week. These include stocks in the S&P 500 that are up 10% or more off of their 52-week lows and have gained 10% or more in the past month.

    The bottom line

    Markets started the week on a high note as major averages closed out Monday’s session with some big winning streaks.

    The Nasdaq rose for the seventh straight day, its longest winning streak since January, while the Dow and S&P 500 gained for six straight days for the first time since July and June, respectively.

    Wall Street indexes had strong momentum following their best week of 2023, propelled by a soft monthly jobs report that drove bond yields lower, boosting equities.

    “The stock market has had a strong start to November, and the move seems deserved in light of what we’re seeing in most, though admittedly not all, of our sentiment indicators,” wrote Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.

    “Generally, our view over the last month or so has been that if the surge in yields stopped soon, US equities could escape without incurring too much additional damage,” she added.

    Shifting focus to the fast-paced AI arms race, viral ChatGPT chatbot owner OpenAI announced its most powerful GPT-4 Turbo artificial intelligence model yet to stay ahead of rivals like Anthropic, Google and Meta.

    GPT-4 Turbo now provides answers with context up to April 2023, accepts more input and supports text-to-speech. Which means you can narrate and summarize an entire book, without having to lift a finger.

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  • China says it will back global consensus on AI amid tech clash with U.S.

    China says it will back global consensus on AI amid tech clash with U.S.

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    BLETCHLEY, ENGLAND – NOVEMBER 1: US Secretary of Commerce Gina Raimondo and Michelle Donelan, Secretary of State for Science, Innovation and Technology listen as Vice Minister of Science and Technology of China Wu Zhaohui speaks on Day 1 of the AI Safety Summit at Bletchley Park on November 1, 2023 in Bletchley, England. The UK Government are hosting the AI Safety Summit bringing together international governments, leading AI companies, civil society groups and experts in research to consider the risks of AI, especially at the frontier of development, and discuss how they can be mitigated through internationally coordinated action. (Photo by Leon Neal/Getty Images)

    Leon Neal | Getty Images News | Getty Images

    China’s vice minister of technology said Beijing will cooperate with international counterparts — including the U.S. — to find common ground on frameworks for safe and responsible artificial intelligence development.

    His comments were delivered at the U.K.’s AI safety summit, which officially kicked off Wednesday at Bletchley Park, England.

    Wu Zhaohui, China’s vice minister of science and technology, said the country was willing to “enhance dialogue and communication in AI safety with all sides.”

    China will contribute to an “international mechanism [on AI], broadening participation, and a governance framework based on wide consensus delivering benefits to the people, and building a community with a shared future for mankind,” he said, according to an official event translation.

    The remarks arrive at a time when Beijing is locked in a tense technology dispute with the U.S.

    China has been pushing through its own rules governing generative AI, a distinct form of AI that is trained on vast quantities of data to create new, human-like written and visual content in response to human inputs. Governments in the U.K., European Union, and U.S. are developing their own regulatory regimes for the technology.

    China and 27 other countries signed a major agreement on AI Wednesday, known as the “Bletchley Declaration,” which promotes a “shared understanding of the opportunities and risks posed by frontier AI and the need for governments to work together to meet the most significant challenges.”

    As part of this, nations agreed to an “urgent need to understand and collectively manage potential risks through a new joint global effort,” the U.K. government said.

    The U.S. and China have been at loggerheads over tech for some time. That battle intensified this year, with the U.S. Department of Commerce announcing new trade restrictions on sales of U.S. tech giant Nvidia’s advanced H800 and A800 chips to China.

    That has placed significant pressure on China’s generative AI developers, many of which rely on Nvidia’s chips.

    Michelle Donelan, the U.K. science, innovation and technology minister, told CNBC’s Arjun Kharpal that it is a “massive” gesture that Chinese government officials chose to attend the U.K. AI summit on Wednesday.

    “We do … at least have to try to engage them in this conversation,” Donelan said. “I always compare it to climate change. If we all act individually and in isolation, and not in a coordinated and collective fashion, we won’t have the desired impact.”

    She added: “AI is exactly the same. It doesn’t respect geographical boundaries.”

    The U.K. is looking to foster international coordination between China and its other global partners. This has proven a thorny issue with Beijing, which the U.S. has accused of national security risks surrounding its critical technologies such as AI. China denies these allegations.

    U.S. Secretary of Commerce Gina Raimondo said earlier in the day that the U.S. is showing “unbelievable leadership” in its bid to ensure AI is developed more safely, “securing voluntary commitments by U.S. AI companies who have committed to safe secure and trustworthy.”

    “We want to expand information sharing research and collaboration and also policy alignment across the globe,” she added.

    Raimondo also said the U.S. would look to launch an AI safety institute, hot on the heels of the U.K announcing its own intentions for a similar initiative last week.

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  • Google DeepMind boss hits back at Meta AI chief over ‘fearmongering’ claim

    Google DeepMind boss hits back at Meta AI chief over ‘fearmongering’ claim

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    The boss of Google DeepMind pushed back on a claim from Meta’s artificial intelligence chief alleging the company is pushing worries about AI’s existential threats to humanity to control the narrative on how best to regulate the technology.

    In an interview with CNBC’s Arjun Kharpal, Hassabis said that DeepMind wasn’t trying to achieve “regulatory capture” when it came to the discussion on how best to approach AI. It comes as DeepMind is closely informing the U.K. government on its approach to AI ahead of a pivotal summit on the technology due to take place on Wednesday and Thursday.

    Over the weekend, Yann LeCun, Meta’s chief AI scientist, said that DeepMind’s Hassabis, along with OpenAI CEO Sam Altman, Anthropic CEO Dario Amodei were “doing massive corporate lobbying” to ensure only a handful of big tech companies end up controlling AI.

    He also said they were giving fuel to critics who say that highly advanced AI systems should be banned to avoid a situation where humanity loses control of the technology.

    “If your fearmongering campaigns succeed, they will *inevitably* result in what you and I would identify as a catastrophe: a small number of companies will control AI,” LeCun said on X, the platform formerly known as Twitter, on Sunday.

    “Like many, I very much support open AI platforms because I believe in a combination of forces: people’s creativity, democracy, market forces, and product regulations. I also know that producing AI systems that are safe and under our control is possible. I’ve made concrete proposals to that effect.”

    LeCun is a big proponent of open-source AI, or AI software that is openly available to the public for research and development purposes. This is opposed to “closed” AI systems, the source code of which is kept a secret by the companies producing it.

    LeCun said that the vision of AI regulation Hassabis and other AI CEOs are aiming for would see open-source AI “regulated out of existence” and allow only a small number of companies from the West Coast of the U.S. and China control the technology.

    Meta is one of the largest technology companies working to open-source its AI models. The company’s LLaMa large language model (LLM) software is one of the biggest open-source AI models out there, and has advanced language translation features built in.

    In response to LeCun’s comments, Hassabis said Tuesday: “I pretty much disagree with most of those comments from Yann.”

    “I think the way we think about it is there’s probably three buckets or risks that we need to worry about,” said Hassabis. “There’s sort of near term harms things like misinformation, deepfakes, these kinds of things, bias and fairness in the systems, that we need to deal with.”

    “Then there’s sort of the misuse of AI by bad actors repurposing technology, general-purpose technology for bad ends that they were not intended for. That’s a question about proliferation of these systems and access to these systems. So we have to think about that.”

    “And then finally, I think about the more longer-term risk, which is technical AGI [artificial general intelligence] risk,” Hassabis said.

    “So the risk of themselves making sure they’re controllable, what value do you want to put into them have these goals and make sure that they stick to them?”

    Hassabis is a big proponent of the idea that we will eventually achieve a form of artificial intelligence powerful enough to surpass humans in all tasks imaginable, something that’s referred to in the AI world as “artificial general intelligence.”

    Hassabis said that it was important to start a conversation about regulating potentially superintelligent artificial intelligence now rather than later, because if it is left too long, the consequences could be grim.

    “I don’t think we want to be doing this on the eve of some of these dangerous things happening,” Hassabis said. “I think we want to get ahead of that.”

    Meta was not immediately available for comment when contacted by CNBC.

    Cooperation with China

    Both Hassabis and James Manyika, Google’s senior vice president of research, technology and society, said that they wanted to achieve international agreement on how best to approach the responsible development and regulation of artificial intelligence.

    Can China's ChatGPT clones give it an edge over the U.S. in an A.I. arms race?

    Manyika said he thinks it’s a “good thing” that the U.K. government, along with the U.S. administration, agree there is a need to reach global consensus on AI.

    “I also think that it’s going to be quite important to include everybody in that conversation,” Manyika added.

    “I think part of what you’ll hear often is we want to be part of this, because this is such an important technology, with so much potential to transform society and improve lives everywhere.”

    One point of contention surrounding the U.K. AI summit has been the attendance of China. A delegation from the Chinese Ministry of Science and Technology is due to attend the event this week.

    That has stirred feelings of unease among some corners of the political world, both in the U.S. government and some of Prime Minister Rishi Sunak’s own ranks.

    These officials are worried that China’s involvement in the summit could pose certain risks to national security, particularly as Beijing has a strong influence over its technology sector.

    Asked whether China should be involved in the conversation surrounding artificial intelligence safety, Hassabis said that AI knows no borders, and that it required coordination from actors in multiple countries to get to a level of international agreement on the standards required for AI .

    “This technology is a global technology,” Hassabis said. “It’s really important, at least on a scientific level, that we have as much dialogue as possible.”

    Asked whether DeepMind was open as a company to working with China, Hassabis responded: “I think we have to talk to everyone at this stage.”

    U.S. technology giants have shied away from doing commercial work in China, particularly as Washington has applied huge pressure on the country on the technology front.

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  • The UK is gearing up for a pivotal summit on AI. Here’s what you need to know

    The UK is gearing up for a pivotal summit on AI. Here’s what you need to know

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    British Prime Minister Rishi Sunak delivers a speech on artificial intelligence at the Royal Society, Carlton House Terrace, on Oct. 26, 2023, in London.

    Peter Nicholls | Getty Images News | Getty Images

    The U.K. is set to hold its landmark artificial intelligence summit this week, as political leaders and regulators grow more and more concerned by the rapid advancement of the technology.

    The two-day summit, which takes place on Nov. 1 and Nov. 2, will host government officials and companies from around the world, including the U.S. and China, two superpowers in the race to develop cutting-edge AI technologies.

    It is Prime Minister Rishi Sunak’s chance to make a statement to the world on the U.K.’s role in the global conversation surrounding AI, and how the technology should be regulated.

    Ever since the introduction of Microsoft-backed OpenAI’s ChatGPT, the race toward the regulation of AI from global policymakers has intensified.

    Of particular concern is the potential for the technology to replace — or undermine — human intelligence.

    Where it’s being held

    The AI summit will be held in Bletchley Park, the historic landmark around 55 miles north of London.

    Bletchley Park was a codebreaking facility during World War II.

    Getty

    It’s the location where, in 1941, a group of codebreakers led by British scientist and mathematician Alan Turing cracked Nazi Germany’s notorious Enigma machine.

    It’s also no secret that the U.K. is holding the summit at Bletchley Park because of the site’s historical significance — it sends a clear message that the U.K. wants to reinforce its position as a global leader in innovation.

    What it seeks to address

    The main objective of the U.K. AI summit is to find some level of international coordination when it comes to agreeing some principles on the ethical and responsible development of AI models.

    The summit is squarely focused on so-called “frontier AI” models — in other words, the advanced large language models, or LLMs, like those developed by companies such as OpenAI, Anthropic, and Cohere.

    It will look to address two key categories of risk when it comes to AI: misuse and loss of control.

    Misuse risks involve a bad actor being aided by new AI capabilities. For example, a cybercriminal could use AI to develop a new type of malware that cannot be detected by security researchers, or be used to help state actors develop dangerous bioweapons.

    Loss of control risks refer to a situation in which the AI that humans create could be turned against them. This could “emerge from advanced systems that we would seek to be aligned with our values and intentions,” the government said.

    Who’s going?

    Major names in the technology and political world will be there.

    U.S. Vice President Kamala Harris speaks during the conclusion of the Investing in America tour at Coppin State University in Baltimore, Maryland, on July 14, 2023.

    Saul Loeb | AFP | Getty Images

    They include:

    Who won’t be there?

    Several leaders have opted not to attend the summit.

    French President Emmanuel Macron.

    Chesnot | Getty Images News | Getty Images

    They include:

    • U.S. President Joe Biden
    • Canadian Prime Minister Justin Trudeau
    • French President Emmanuel Macron
    • German Chancellor Olaf Scholz

    When asked whether Sunak feels snubbed by his international counterparts, his spokesperson told reporters Monday, “No, not at all.”

    “I think we remain confident that we have brought together the right group of world experts in the AI space, leading businesses and indeed world leaders and representatives who will be able to take on this vital issue,” the spokesperson said.

    “This is the first AI safety summit of its kind and I think it is a significant achievement that for the first time people from across the world and indeed from across a range of world leaders and indeed AI experts are coming together to look at these frontier risks.” 

    Will it succeed?

    The British government wants the AI Summit to serve as a platform to shape the technology’s future. It will emphasize safety, ethics, and responsible development of AI, while also calling for collaboration at a global level.

    Sunak is hoping that the summit will provide a chance for Britain and its global counterparts to find some agreement on how best to develop AI safely and responsibly, and apply safeguards to the technology.

    In a speech last week, the prime minister warned that AI “will bring a transformation as far reaching as the industrial revolution, the coming of electricity, or the birth of the internet” — while adding there are risks attached.

    “In the most unlikely but extreme cases, there is even the risk that humanity could lose control of AI completely through the kind of AI sometimes referred to as super intelligence,” Sunak said.

    Sunak announced the U.K. will set up the world’s first AI safety institute to evaluate and test new types of AI in order to understand the risks.

    He also said he would seek to set up a global expert panel nominated by countries and organizations attending the AI summit this week, which would publish a state of AI science report.

    A particular point of contention surrounding the summit is Sunak’s decision to invite China — which has been at the center of a geopolitical tussle over technology with the U.S. — to the summit. Sunak’s spokesperson has said it is important to invite China, as the country is a world leader in AI.

    International coordination on a technology as complex and multifaceted as AI may prove difficult — and it is made all the more so when two of the big attendees, the U.S. and China, are engaged in a tense clash over technology and trade.

    China’s President Xi Jinping and U.S. President Joe Biden at the G20 Summit in Nusa Dua on the Indonesian island of Bali on Nov. 14, 2022.

    Saul Loeb | Afp | Getty Images

    Washington recently curbed sales of Nvidia’s advanced A800 and H800 artificial intelligence chips to China.

    Different governments have come up with their own respective proposals for regulating the technology to combat the risks it poses in terms of misinformation, privacy and bias.

    The EU is hoping to finalize its AI Act, which is set to be one of the world’s first pieces of legislation targeted specifically at AI, by the end of the year, and adopt the regulation by early 2024 before the June European Parliament elections.

    Stateside, Biden on Monday issued an executive order on artificial intelligence, the first of its kind from the U.S. government, calling for safety assessments, equity and civil rights guidance, and research into AI’s impact on the labor market.

    James Manyika, senior vice president of research, technology, and society at Google, said AI was a “transformative technology” with potential to help address some of society’s most pressing challenges” — but he added it was vital to ensure the benefits are “broadly distributed.”

    “Our hopes for the Summit are twofold. First, that it helps facilitate countries across the world developing a shared understanding of both the near and long-term opportunities and risks of frontier AI models. Second, that it prioritizes international coordination to ensure a consistent approach to AI governance,” ,” Manyika said in emailed comments shared with CNBC ahead of the summit.

    Emad Mostaque, CEO of open-source British AI company Stability, said the U.K. has a “once in a generation opportunity to become an AI superpower” and ensure that AI benefits all, not just the Big Tech firms.

    “We believe this is best achieved through a shared vision of the positive transformation this technology will unleash as well as a clear understanding of the emerging risks, so that we can innovate with integrity and align our efforts and systems to ensure our safety and security,” Mostaque said.

    Shortcomings of the summit

    Some tech industry officials think that the summit is too limited in its focus. They say that, by keeping the summit restricted to only frontier AI models, it is a missed opportunity to encourage contributions from members of the tech community beyond frontier AI.

    “I do think that by focusing just on frontier models, we’re basically missing a large piece of the jigsaw,” Sachin Dev Duggal, CEO of London-based AI startup Builder.ai, told CNBC in an interview last week.

    “By focusing only on companies that are currently building frontier models and are leading that development right now, we’re also saying no one else can come and build the next generation of frontier models.”

    Some are frustrated by the summit’s focus on “existential threats” surrounding artificial intelligence and think the government should address more pressing, immediate-term risks, such as the potential for deepfakes to manipulate 2024 elections.

    “It’s like the fire brigade conference where they talk about dealing with a meteor strike that obliterates the country,” Stefan van Grieken, CEO of generative AI firm Cradle, told CNBC.

    “We should be concentrating on the real fires that are literally present threats.”

    However, Marc Warner, CEO of British AI startup Faculty.ai, said he believes that focusing on the long-term, potentially devastating risks of achieving artificial general intelligence to be “very reasonable.”

    “I think that building artificial general intelligence will be possible, and I think if it is possible, there is no scientific reason that we know of right now to say that it’s guaranteed safe,” Warner told CNBC.

    “In some ways, it’s sort of the dream scenario that governments tackle something before it’s a problem rather than waiting until stuff gets really bad.”

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  • Here’s what Sam Bankman Fried said in his first full day on the stand in his $8 billion fraud trial

    Here’s what Sam Bankman Fried said in his first full day on the stand in his $8 billion fraud trial

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    Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks outside the Manhattan federal court in New York City, U.S. March 30, 2023. 

    Amanda Perobelli | Reuters

    FTX founder Sam Bankman-Fried told jurors in his criminal trial on Friday that he didn’t commit fraud, and that he thought the crypto exchange’s outside expenditures, like paying for the naming rights at a sports arena, came out of company profits.

    On Friday morning, defense attorney Mark Cohen asked Bankman-Fried if he defrauded anyone.

    “No, I did not,” Bankman-Fried responded.

    Cohen followed by asking if he took customer funds, to which Bankman-Fried said “no.”

    Bankman-Fried, 31, faces seven criminal counts, including wire fraud, securities fraud and money laundering, that could land him in prison for life if he’s convicted. Bankman-Fried, the son of two Stanford legal scholars, has pleaded not guilty in the case.

    Prior to the defendant’s appearance on the stand, the four-week trial was highlighted by the testimony of multiple members of FTX’s top leadership team as well as the people who ran sister hedge fund Alameda Research. They all singled out Bankman-Fried as the mastermind of a scheme to use FTX customer money to fund everything from venture investments and a high-priced condo in the Bahamas to covering Alameda’s crypto losses.

    Courtroom sketch showing Sam Bankman Fried questioned by his attorney Mark Cohen. Judge Lewis Kaplan on the bench

    Artist: Elizabeth Williams

    Prosecutors walked former leaders of Bankman-Fried’s businesses through specific actions taken by their boss that resulted in clients losing billions of dollars last year. Several of the witnesses, including Bankman-Fried’s ex-girlfriend Caroline Ellison, who ran Alameda, have pleaded guilty to multiple charges and are cooperating with the government.

    ‘Significant oversights’

    On Friday, Bankman-Fried acknowledged that one of his biggest mistakes was not having a risk management team. That led to “significant oversights,” he said.

    At the start of his testimony, Cohen walked Bankman-Fried through his background and how he got into crypto. The defendant said he studied physics at the Massachusetts Institute of Technology and graduated in 2014. He then worked as a trader on the international desk at Jane Street for over three years, managing tens of billions of dollars a day in trading. That’s where he learned the fundamentals of things like arbitrage trading.

    In the fall of 2017, Bankman-Fried founded Alameda Research.

    “This was when crypto was starting to become publicly visible for the first time,” Bankman-Fried testified.

    He said people were excited about it, watching bitcoin, which had jumped from $1,000 to $10,000 in a two-month period. Banks and brokers weren’t involved yet and it seemed like there would probably be big demand for an arbitrage provider, he said.

    “I had absolutely no idea” how cryptocurrencies worked, Bankman-Fried said. “I just knew they were things you could trade.”

    The first Alameda office was in an Airbnb in Berkeley, California, he said. It was listed as a two bedroom but they used the couch in the living room as a third bed and also repurposed the attic as a fourth bedroom.

    He started FTX in 2019. Trading volume grew substantially on FTX from a few million dollars a day to tens of millions of dollars that year to hundreds of millions of dollars in 2020. By 2022, that number was up to $10 billion to $15 billion per day in trading volume, he said.

    Bankman-Fried said Alameda was permitted to borrow from FTX, but his understanding was that the money was coming from margin trades, collateral from other margin trades or assets earning interest on the platform.

    At FTX, there were no general restrictions on what could be done with funds that were borrowed as long as the company believed assets were greater than liabilities, Bankman-Fried testified.

    In 2020, a routine liquidation gone wrong led to some of the special borrowing permissions at Alameda, he said. The risk engine was sagging under the weight of growth. A liquidation that should have been in the thousands of dollars was in the trillions of dollars. Alameda was suddenly underwater because of closing the position.

    The incident exposed a larger concern, that the potential of an erroneous liquidation of Alameda could be disastrous for users.

    Bankman-Fried said he talked to FTX’s engineering director Nishad Singh and co-founder Gary Wang, both of whom testified earlier on behalf of the prosecution. He suggested creating an alert, which would prompt the user to deposit more collateral, or a delay, Bankman-Fried said. In response to this feedback, Singh and Wang told Bankman-Fried they had implemented a feature like that, he said, adding that he later learned it was the “allow negative” feature.

    Bankman-Fried testified that he wasn’t aware of the amount Alameda was borrowing or its theoretical max. As long as Alameda’s net asset value was positive and the scale of borrowing was reasonable, increasing its line of credit from so that Alameda could keep filling orders was fine, he said. Earlier testimony from Singh and Wang suggested the line of credit was raised to $65 billion, a number Bankman-Fried said he was not aware of.

    Tough sell

    Convincing the jury will be a tall order for Bankman-Fried after a mountain of damning evidence was presented by the government.

    Prosecutors entered corroborating materials, including encrypted Signal messages and other internal documents that appear to show Bankman-Fried orchestrating the spending of FTX customer money.

    The defense’s case, which consists of Bankman-Fried’s testimony along with that of two witnesses who took the stand Thursday morning, hinges largely on whether the jury believes the defendant didn’t intend to commit fraud.

    The logo of FTX is seen on a flag at the entrance of the FTX Arena in Miami, Florida, November 12, 2022.

    Marco Bello | Reuters

    In Friday afternoon testimony, Bankman-Fried was asked about FTX’s marketing and promotions.

    He said there were 15 people on the marketing team, and noted that he got more involved with it as time progressed. In particular, he discussed the naming rights in 2021 for the basketball arena in Miami, which was to be a 19-year deal for $135 million.

    Bankman-Fried said the sponsorship of FTX Arena would deliver returns for the company and create wide brand awareness because even he, as an “average level sports fan,” could name dozens of stadiums. He said the investment would be about $10 million a year, or 1% of revenue. The company had been deciding among a few different stadiums, including the homes to the NFL’s New Orleans Saints and Kansas City Chiefs, Bankman-Fried said.

    A crucial part of his testimony came when Bankman-Fried said he thought the stadium deal funding was coming from revenue from the exchange and returns from venture investments, as opposed to customer money.

    Similarly, Bankman-Fried testified that he believed the lavish Bahamas properties were being paid for with FTX operating cash that came from revenue and venture investments. He said having available property to rent was a necessary incentive if the company wanted to poach developers from Facebook and Google.

    As for the venture investments, Bankman-Fried said he thought that money was coming from Alameda’s operating profits and third-party lending desks. Alameda’s venture arm was renamed Clifton Bay Investments, which Bankman-Fried said was a first step in building a dedicated venture brand.

    When asked about loans he took from the business, Bankman-Fried said they were to pay for venture investments and political donations. He said that, as the primary owner of Alameda, he thought he had a few billion dollars in arbitrage profit from the past few years and there was no reason he couldn’t borrow from it. He said the loans, except for the most recent one prior to the firm’s bankruptcy filing, were all documented through promissory notes.

    Bankman-Fried said he never directed Singh or former FTX executive Ryan Salame to make political donations. Salame pleaded guilty in September to federal campaign finance and money-transmitting crimes, admitting that from fall 2021 to November 2022, he steered tens of millions of dollars of political contributions to both Democrats and Republicans in his own name when the money actually came from Alameda.

    Bankman-Fried, who allegedly used FTX customer funds to help finance over $100 million in political giving during the 2022 midterms, testified that he talked to politicians about pandemic prevention and crypto regulation. He said he had a vested interested in crypto policy even though FTX’s U.S. operation was relatively small, because the company was seeking to offer crypto futures products in the U.S.

    Bankman-Fried then discussed his public persona. He said he hadn’t intended to be the public face of the company because he’s “naturally introverted.” But a few interviews went well, and it snowballed from there. He said he was the only person at the company that the press sought.

    He wore T-shirts and shorts because they were comfortable and said he let his hair grow out because he was busy and lazy.

    Bankman-Fried was photographed at the 2022 Super Bowl in Los Angeles with Katy Perry. He told the jury, which was previously presented with the photo by the prosecution, that he thought it was natural to go to the game because he was in town for meetings and the company had a commercial running.

    “I thought maybe it would be interesting,” he said.

    Shifting blame to his ex-girlfriend

    The afternoon testimony largely focused on Bankman-Fried’s repeated and unsuccessful request to Ellison that she hedge Alameda’s risk. Bankman-Fried said in late 2021, he had talked to Ellison about putting on trades to protect against the risk of market moves since Alameda had been leveraged long, meaning they would lose money if the market went down.

    Ellison said she would look into it, which Bankman-Fried said he “interpreted” as her being “far less enthusiastic about it.” Over the course of 2022, Bankman-Fried said every two months he would check in to see if Alameda had hedged, and each time he was told not yet, but Ellison would say she was planning to do so in the near future.

    Specifically, Bankman-Fried said he had talked with Ellison and Ramnik Arora, who had been the head of product at FTX, about putting a $2 billion hedge on the company’s investment in Genesis Digital Assets, a bitcoin miner. He told the jury that the hedge was never made.

    There was also more detail on how Bankman-Fried was told about FTX’s $8 billion liability. According to the defendant, in October 2022, developers built a Google database that included financial data. That’s where Bankman-Fried noticed the negative $8 billion balance, which he said he was “very surprised” to see.

    Cohen then brought the jury through the summer months of 2022, a time when Alameda’s lenders, specifically Genesis, BlockFi, Celsius and Voyager, all had direct conversations with Bankman-Fried about the need for emergency capital. In the end, only BlockFi and Voyager received funds from Alameda and Bankman-Fried.

    In late 2021 and early 2022, Bankman-Fried said he wanted FTX revenue to be above $1 billion because it was a round number. He asked company executives if there were ways to reach that mark. Singh said he’d dealt with it by staking the company’s investment in crypto token Serum, a way of putting the coins to work. That had added another $50 million in revenue. Bankman-Fried testified that he was “a little surprised” they found that additional money, but it got him to $1 billion.

    — CNBC’s Dawn Giel contributed to this report

    WATCH: Sam Bankman-Fried testifying in his criminal case

    Sam Bankman-Fried set to testify at fraud trial in what experts deem a major gamble for the case

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  • Google paid $26 billion in 2021 to become the default search engine on browsers and phones

    Google paid $26 billion in 2021 to become the default search engine on browsers and phones

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    Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House in Washington, D.C., on June 23, 2023.

    Anna Moneymaker | Getty Images

    Google paid $26.3 billion to be the default search engine on mobile phones and web browsers in 2021, according to a slide made public Friday in a federal antitrust trial against the company.

    The number is a more granular look into how much Google pays partners, including Apple, to be the default search engine on their products. The U.S. Department of Justice and a coalition of state attorneys general have argued in the case that Google has illegally maintained its monopoly power in general search by leveraging its dominance to lock rivals out of key distribution channels, such as Apple’s Safari web browser.

    The $26.3 billion figure does not represent the payments to any one company, but Apple likely represents the largest recipient. Bernstein previously estimated Google could pay Apple as much as $19 billion this year for the out-of-the-box default placement on Apple devices. 

    “Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors,” the DOJ complaint reads.

    Google has argued that users can still opt to change their default search engine with a few clicks.

    According to the slide shown in court Friday — titled “Google Search+ Margins,” which primarily refers to Google’s search business — that division’s 2021 revenue was more than $146 billion, while the portion of traffic acquisition costs was more than $26 billion.

    The slide included numbers dating back to 2014, when Google booked revenue of roughly $47 billion for the division and paid about $7.1 billion for the default status. That means revenue for Search+ roughly tripled between 2014 and 2021, while this portion of TAC costs nearly quadrupled.

    While Google regularly reports overall TAC, that number also includes the amount Google pays to network partners for ads shown on their properties, according to its 10-K filing with the U.S. Securities and Exchange Commission.

    The other portion of the overall TAC figure Google reports in earnings consists of the payments it makes to “distribution partners who make available our search access points and services,” according to the 10-K. Google says its “distribution partners include browser providers, mobile carriers, original equipment manufacturers and software developers.” This is the portion of TAC that appeared to be represented by the slide, which referred only to Search+ revenue.

    A Google spokesperson declined to comment. An Apple spokesperson did not immediately respond to CNBC’s request for comment.

    WATCH: How US antitrust law works, and what it means for Big Tech

    Don’t miss these CNBC PRO stories:

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  • Chinese smartphone maker Xiaomi releases a new operating system as it plans car integration

    Chinese smartphone maker Xiaomi releases a new operating system as it plans car integration

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    The Xiaomi HyperOS logo is displayed on a smartphone.

    Sopa Images | Lightrocket | Getty Images

    BEIJING — Chinese smartphone and appliance maker Xiaomi announced late Thursday a new operating system — as it seeks to develop its ecosystem with the imminent release of its own car.

    Xiaomi shares rose more than 1% in Hong Kong trade Friday morning, building on gains of more than 20% for the year so far.

    The new system, called HyperOS, is set to reach consumers Oct. 31 when Xiaomi’s latest phones, wearables and TV sets begin sales in China.

    “The system marks a pivotal move forward in Xiaomi’s strategic vision of delivering the ‘Human x Car x Home’ smart ecosystem,” the company said in a release.

    CEO and founder Lei Jun said on Chinese social media Wednesday that Xiaomi would release its car in the first half of next year. He did not specify whether it would be electric.

    Tech companies have long sought to build customer loyalty with operating systems, such as Apple‘s iOS and Google‘s Android.

    Chinese telecommunications giant Huawei developed its own operating system, called HarmonyOS, in a bid to replace Android. The company makes its own suite of smartphones, laptops, tablets and television sets, while selling the software for electric cars manufactured by partners.

    In late September, Huawei claimed its operating system had surpassed 60 million users.

    Chinese electric car company Nio this fall also released its own smartphone, based on Android but customized for greater integration with its vehicles.

    Read more about China from CNBC Pro

    Xiaomi rose to fame for its affordable smartphones and MIUI user interface, based on open source Android.

    The company said the core of its new HyperOS system is “formed by Linux and Xiaomi’s self-developed Xiaomi Vela system.” The press release’s only mention of Android was that HyperOS allows for “more stable frame rate and lower power consumption” compared to the stock version of Android.

    Xiaomi also touted HyperOS’s processing speed and security, and listed a number of ways in which a smartphone, car and laptop could easily share content and access each other’s cameras on the new system.

    In recent years, Xiaomi has grown its appliance and consumer electronics business to account for about 22% of overall revenue in the second quarter, versus just under 37% for smartphones.

    On Thursday, the company released a 3,999 yuan ($546) smartphone as well as a 1,999 yuan washing machine and a 2,999 yuan refrigerator. Xiaomi has an app for letting customers remotely control appliance settings.

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  • Meta’s ad rebound gets huge assist from China even though its services are banned there

    Meta’s ad rebound gets huge assist from China even though its services are banned there

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    A Facebook sign is seen at the second China International Import Expo (CIIE) in Shanghai, China November 6, 2019.

    Aly Song | Reuters

    Meta may be banned from operating in China, but the company is finding plenty of growth coming from the world’s second-biggest economy.

    In its third-quarter earnings report on Wednesday, Meta said sales rose 23% from a year earlier, illustrating the company’s ability to weather a tough digital ad market better than smaller rivals like Snap and X, formerly known as Twitter.

    Susan Li, Meta’s finance chief, told analysts on the earnings call that Chinese companies played a major role this quarter, continuing a theme from recent periods.

    Online commerce and gaming “benefited from spend among advertisers in China reaching customers in other markets,” Li said. That means Chinese companies are spending big money on Meta’s platforms like Facebook and Instagram to send targeted advertising to the company’s billions of users around the world.

    Among Meta’s geographic regions, Li said the rest of the world category showed the strongest growth, at 36%. Europe was next at 35%, followed by Asia-Pacific at 19% and North America at 17%. The first category includes South America, and Li said China was a big reason for the rapid expansion.

    “Brazil was a strong contributor to the region’s acceleration due in part to increased advertisers demand from China advertisers targeting users in Brazil,” Li said.

    Facebook, along with Google and Twitter, are all blocked in China due to the country’s Great Firewall. Facebook and its sibling apps have been inaccessible there since 2009.

    Still, Meta has witnessed a “longer-term trend of overall growth” from the China market, Li said, though there have been some “periods of volatility.” For instance, she said that the past two years were marred by higher shipping costs that resulted from the Covid pandemic, which also brought strict lockdown rules in China.

    But with China opening up more this year and the worldwide supply chain problems easing, Chinese companies are looking to expand their businesses around the globe and are using Meta as a major tool.

    Ultimately, “spending from Chinese advertisers further accelerated for us in Q3,” Li said, adding that “lower shipping costs and easing regulations on the gaming industry have served as tailwinds here.”

    Li stressed “the potential for volatility in the future” particularly because “there are so many macro factors at play that are quite hard to predict.”

    In particular, Li cited the unpredictability in the Middle East due to the Israel-Hamas war, which led Meta to widen its revenue guidance range.

    “We have observed softer ads in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” Li said. “It’s hard for us to attribute demand softness directly to any specific geopolitical event.”

    Meta shares dropped more than 3% in extended trading, wiping out earlier gains, after Li’s cautionary comments.

    Watch: Big tech earnings, AI usage and growth under scrutiny

    Meta will put up 'pretty strong' Q3 results, says JMP Securities' Andrew Boone

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  • CNBC Daily Open: Strong earnings pave the way for markets

    CNBC Daily Open: Strong earnings pave the way for markets

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    Victor J. Blue | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Dow snaps four-day losing streak
    The Dow Jones Industrial Average gained over 200 points on Tuesday, ending a four-day streak of declines as investors shifted focus to strong earnings reports from companies including Coca-Cola and Verizon. After the close, results from tech giants Microsoft and Alphabet rolled in. Hong Kong led a rebound in Asia markets, while investors also assess Australia’s third-quarter inflation figures.

    Microsoft profit pops
    Microsoft issued quarterly revenue guidance above Wall Street estimates. The company also reported a surge in profit thanks to a slower pace of operating expense growth. Net income, at $22.29 billion, increased 27% from $17.56 billion, or $2.35 per share in the same quarter a year ago. The software maker’s shares jumped as much as 6% in extended trading on Tuesday.

    Alphabet cloud business in spotlight
    Alphabet reported 11% revenue growth in the third quarter, as a rebound in advertising pushed expansion into double digits for the first time in over a year. Its shares dropped almost 7% in extended trading as the cloud business missed analysts’ estimates. For the quarter, it reported earnings per share of $1.55 vs. $1.45 expected by LSEG, formerly known as Refinitiv. Google Cloud revenue was $8.41 billion vs. $8.64 billion, according to StreetAccount.

    Snap shares seesaw  
    Snap shares initially soared as much as 20% in after-hours trading as the company beat on the top and bottom lines. It later settled to gain a little over 1% as investors digested news that some advertisers had paused spending following the onset of the war in the Middle East.

    [PRO] Rising yields and war
    Yields are still rising, a war is raging, and it’s uncertain whether interest rates will stay higher for longer. Last week, the yield on the 10-year U.S. Treasury note was above 4.9% for the first time since 2007. Investors continued to consider geopolitical risks from the Israel-Hamas war and the United States’ restrictions on artificial intelligence chip exports to China. Here’s how to trade the volatility, according to fund managers.

    The bottom line

    Markets are now slowly starting to come away from the tumultuous swings of last week when Treasury yields were high, and catalysts were few. That no longer seems an issue as investors can now look to a heavy flow of earnings to make their next call.

    The Dow snapped four straight sessions of losses to end higher on Tuesday. U.S. Treasury yields were steady after slipping back below 5%, though they remained near 16-year highs.

    Investors also had a spate of quarterly reports to parse. Coca-Cola posted earnings and revenue above estimates. Verizon recorded its best daily performance in almost 15 years after beating analysts’ expectations for both earnings and revenue. Audio streaming giant Spotify posted third-quarter results that topped expectations.

    But the elephant in the room was Big Tech earnings.

    Cloud revenue was key for both Microsoft and Alphabet. It’s a business that’s becoming even more significant with the emergence of generative artificial intelligence, which runs hefty workloads in the cloud.

    The clear winner of this quarter’s cloud battle was Microsoft, powered by Azure as clients flocked to new generative AI tools in the cloud that have been enhanced with software from Microsoft-backed startup OpenAI. 

    Alphabet’s cloud unit tried to catch up with Azure and Amazon Web Services. But Google’s core advertising also weakened due to economic softening last year and increased competition from TikTok.

    “If you want this stock to keep going higher, you’ve got to have cloud become more profitable,” said Lee Munson, chief investment officer of Portfolio Wealth Advisors. “It’s a third-rate cloud platform. We need to see it make money.”

    Keeping to the AI theme, Qualcomm announced two new chips on Tuesday designed to run AI software — including the large language models, or LLMs, that have captivated the technology industry — without having to connect to the internet.

    This could potentially boost the speed with which a high-end smartphone chip processes AI models.

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  • CNBC Daily Open: Strong earnings are the catalyst markets need

    CNBC Daily Open: Strong earnings are the catalyst markets need

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    People walk by the Fearless Girl bronze sculpture outside the New York Stock Exchange on April 21, 2023.

    Spencer Platt | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Dow snaps four-day losing streak
    The Dow Jones Industrial Average gained over 200 points on Tuesday, ending a four-day streak of declines as investors shifted focus to strong earnings reports from companies including Coca-Cola and Verizon. After the close, results from tech giants Microsoft and Alphabet rolled in. Europe’s Stoxx 600 snapped a five-session losing streak.

    Microsoft profit pops
    Microsoft issued quarterly revenue guidance above Wall Street estimates. The company also reported a surge in profit thanks to a slower pace of operating expense growth. Net income, at $22.29 billion, increased 27% from $17.56 billion, or $2.35 per share in the same quarter a year ago. The software maker’s shares jumped as much as 6% in extended trading on Tuesday.

    Alphabet cloud business in spotlight
    Alphabet reported 11% revenue growth in the third quarter, as a rebound in advertising pushed expansion into double digits for the first time in over a year. Its shares dropped almost 7% in extended trading as the cloud business missed analysts’ estimates. For the quarter, it reported earnings per share of $1.55 vs. $1.45 expected by LSEG, formerly known as Refinitiv. Google Cloud revenue was $8.41 billion vs. $8.64 billion, according to StreetAccount.

    Snap shares seesaw  
    Snap shares initially soared as much as 20% in after-hours trading as the company beat on the top and bottom lines. It later settled to gain a little over 1% as investors digested news that some advertisers had paused spending following the onset of the war in the Middle East.

    [PRO] Bitcoin just broke above a key level
    At last, bitcoin has broken out of a tight trading range, potentially heralding greater highs from here. After oscillating between $25,000 and $30,000 for most of the year, touching the top end several times and stepping out of it briefly at one point in July, the flagship cryptocurrency shot up to $35,000 late Monday. Here’s what investors should expect.   

    The bottom line

    Markets are now slowly starting to come away from the tumultuous swings of last week when Treasury yields were high, and catalysts were few. That no longer seems an issue as investors can now look to a heavy flow of earnings to make their next call.

    The Dow snapped four straight sessions of losses to end higher on Tuesday. U.S. Treasury yields were steady after slipping back below 5%, though they remained near 16-year highs.

    Investors also had a spate of quarterly reports to parse. Coca-Cola posted earnings and revenue above estimates. Verizon recorded its best daily performance in almost 15 years after beating analysts’ expectations for both earnings and revenue. Audio streaming giant Spotify posted third-quarter results that topped expectations.

    But the elephant in the room was Big Tech earnings.

    Cloud revenue was key for both Microsoft and Alphabet. It’s a business that’s becoming even more significant with the emergence of generative artificial intelligence, which runs hefty workloads in the cloud.

    The clear winner of this quarter’s cloud battle was Microsoft, powered by Azure as clients flocked to new generative AI tools in the cloud that have been enhanced with software from Microsoft-backed startup OpenAI. 

    Alphabet’s cloud unit tried to catch up with Azure and Amazon Web Services. But Google’s core advertising also weakened due to economic softening last year and increased competition from TikTok.

    “If you want this stock to keep going higher, you’ve got to have cloud become more profitable,” said Lee Munson, chief investment officer of Portfolio Wealth Advisors. “It’s a third-rate cloud platform. We need to see it make money.”

    Keeping to the AI theme, Qualcomm announced two new chips on Tuesday designed to run AI software — including the large language models, or LLMs, that have captivated the technology industry — without having to connect to the internet.

    This could potentially boost the speed with which high-end smartphone chip processes AI models.

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  • Microsoft, Google post strong quarterly sales growth as Big Tech continues its comeback | CNN Business

    Microsoft, Google post strong quarterly sales growth as Big Tech continues its comeback | CNN Business

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    New York
    CNN
     — 

    Big tech companies are continuing a turnaround from last year, as Alphabet, Microsoft and Snap kicked off earnings season with strong sales results for the quarter ended in September.

    Google parent company Alphabet on Tuesday reported quarterly sales of $76.69 billion, up 11% from the same period in the prior year. The company also posted profits of $19.69 billion for the quarter.

    Meanwhile, Microsoft posted 13% year-on-year sales growth to $56.5 billion, also beating expectations. Microsoft’s quarterly profits hit $22.3 billion, up 27% from the year-ago period.

    Snapchat parent Snap on Tuesday reported a return to sales growth in the September quarter, after two consecutive quarters of declining sales. The company reported revenue of nearly $1.2 billion, an increase of 5% from the same period in the prior year and ahead of analysts’ projections. The company reported a net loss of $368 million.

    The strong results come after Microsoft, Alphabet, Snap and other tech companies carried out mass layoffs and other cost cutting moves over the past year following a difficult 2022 when advertisers and other clients cut back on their spending due to concerns over the macroeconomic environment.

    Despite beating Wall Street’s sales expectations, shares of both Alphabet (GOOGL) and Snap (SNAP) each dipped around 5% in after-hours trading following the reports, although Snap’s quickly regained some ground. Microsoft (MSFT) shares gained around 4% in after-hours trading.

    “Q3 tech season has been quite strong thus far,” Tejas Dessai, research analyst at investment fund GlobalX said in a statement. “These numbers clearly defy concerns of near term economic weakness looming.”

    Google’s advertising business generated quarterly revenue of $59.6 billion, up from $54.5 billion in the prior year. YouTube ads, meanwhile, garnered some $7.9 billion in revenue, up roughly 12% year-over-year.

    YouTube Shorts, the company’s TikTok competitor, hit a milestone 70 billion daily views last quarter, Alphabet CEO Sundar Pichai said on a call with analysts Tuesday afternoon.

    Google’s cloud business, however, reported revenue of $8.41 billion — missing analysts’ estimates.

    Jesse Cohen, a senior analyst at Investing.com, attributed Alphabet’s after-hours stock fall to the “relatively weak performance in its Google cloud platform, which is at risk of falling further behind [Microsoft’s] Azure and [Amazon’s] AWS.” Still, despite taking a hit in 2022 amid a broader tech sector downturn, shares for Alphabet have climbed roughly 56% since the start of 2023, beating the tech-heavy Nasdaq index.

    Google’s report comes as the tech giant is in the antitrust hot seat. US prosecutors officially opened a landmark antitrust trial against Google last month with sweeping allegations that the company engaged in anticompetitive behavior to maintain its dominance over search. (As the legal showdown rages on, Google has continued to deny allegations that it operated illegally.)

    Google also confirmed last month plans to lay off hundreds of staffers in its recruiting division, as it continues cost cutting efforts in some areas. These more targeted layoffs came after Alphabet in January cut around 12,000 jobs — about 6% of its workforce.

    Still, Google has signaled that it remains committed to investing heavily in generative artificial intelligence technology. Last month, Google rolled out a major expansion of its Bard AI chatbot tool.

    “As we expand access to our new AI services, we continue to make meaningful investments in support of our AI efforts,” Pichai said on the call. “We remain committed to durably re-engineering our cost base in order to help create capacity for these investments, in support of long-term sustainable financial value.”

    Microsoft’s recent investments in AI technology helped boost its sales in the September quarter, especially in its key cloud division. Sales from Microsoft’s “intelligent cloud” business — its biggest revenue driver — grew 19% from the year-ago quarter to $24.3 billion.

    Revenue from the company’s “productivity and business processes” business, which includes LinkedIn and Office commercial and consumer products, also grew 13% year-over-year to $18.6 billion.

    “Microsoft is firing on all cylinders and AI is clearly driving growth,” Cohen said in a research note following the company’s report. “The results indicated that artificial intelligence products are stimulating sales and already contributing to top and bottom-line growth.”

    But economic jitters among consumers appear to still have some impact on the company’s bottom line. Devices revenue, which includes sales of laptops, tablets and Xbox consoles, decreased 22% year-over-year, despite a 3% sales increase in the overall “more personal computing” segment. Ongoing concerns about a potential economic slowdown could continue to weigh on the company as it heads into the crucial holiday device sales season.

    The report is Microsoft’s first since the company closed its $69 billion acquisition of “Call of Duty” maker Activision Blizzard earlier this month. While the deal didn’t factor into this quarter’s results, it’s expected to supercharge the company’s gaming business.

    “Microsoft now controls 30 game studios and some of the most well-known games across the industry,” Edward Jones analyst Logan Purk said in a research note earlier this month. “With a massive cloud network and now a compelling library of games, Microsoft has a leg up on peers” in gaming, he said.

    Following the Activision takeover, “we’re looking forward to one of our strongest first-party holiday [game] lineups ever, including new titles like Call of Duty Modern Warfare 3,” CEO Satya Nadella said on an analyst call Tuesday. The company said it expects roughly $400 million of operating expenses in the fourth quarter to come as a result of the acquisition.

    Snap said its sales growth was driven in part by its ongoing efforts to revamp its advertising technology, following changes to Apple’s app tracking policies that took a hit to the business models of Snapchat, Facebook and other platforms.

    “We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success,” CEO Evan Spiegel said in a statement.

    Snap also reported that it now has 406 million daily active users, up 12% compared to the year-ago quarter. And time spent watching Spotlight — Snapchat’s TikTok clone — grew 200% year-over-year, according to the company.

    The company also recently announced that it had reached more than 5 million subscribers to its Snapchat+ subscription program, a key effort to diversify its revenue.

    Snap said Tuesday that its chief operating officer, Jerry Hunter, plans to retire. Hunter, who spent seven years at the company, will step down from his role as of the end of the month, but will remain at the company until July 1, 2024, to support the transition.

    The company noted that some advertisers temporarily paused their spending following the outbreak of the Israel-Hamas war. Because of the “unpredictable nature” of the war, Snap declined to provide formal guidance for the fourth quarter, but said its internal forecast assumes year-over-year quarterly revenue growth between 2% and 6%.

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  • CNBC Daily Open: Oil deals ahead of Big Tech earnings

    CNBC Daily Open: Oil deals ahead of Big Tech earnings

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    Omar Marques | Lightrocket | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets attempt comeback
    The Nasdaq Composite snapped a     four-day losing streak on Monday as Treasury yields retreated from their highs. Investors awaited the release of corporate earnings from tech giants including Alphabet and Microsoft. Asia-Pacific markets were higher in midday trading as investors assessed private surveys of business activity from Japan and Australia.

    Another oil mega-merger
    Chevron on Monday said it agreed to buy Hess for $53 billion in stock. It’s the second proposed mega merger among the biggest U.S. oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month. The proposed deal also raises the competition between Chevron and Exxon to develop drilling in nascent producer Guyana.

    Nvidia’s latest blow to Intel
    Nvidia is working on building personal computer chips which would use technology from Arm Holdings, Reuters reported on Monday. The plans mean the chipmaker would challenge Intel in its longtime stronghold of personal computers. Advanced Micro Devices also reportedly plans to make chips for PCs with Arm technology.

    Bitcoin breaches $34,000 to highest since May 2022
    The price of bitcoin breached the $34,000 level to hit its highest since May last year, bolstered by positive sentiment about a bitcoin exchange-traded fund. The world’s largest cryptocurrency was trading 4.97% higher at $34,596.40 on Tuesday, according to data from Coin Metrics.

    [PRO] Portfolio manager names the new growth stocks
    Markets may be facing an “unusual amount” of uncertainty, but there still are very good opportunities right, according to one portfolio manager, who tells CNBC Pro about three new growth areas he likes: obesity drugs, reshoring and artificial intelligence.

    The bottom line

    Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions. Deal making was also at play on Monday as Chevron bet big on buying Hess to compete with larger rival Exxon Mobil.

    Stocks have been feeling the pressure from multiyear highs in Treasury yields and worries about how that stands to affect the American economy. Some analysts think the benchmark 10-year yield could still have further room to run.

    The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates,” said Canaccord Genuity chief market strategist Tony Dwyer.

    Microsoft, which is slated to report earnings after the close Tuesday, is seen by UBS as a potential hedge against a recession next year. Unlike more focused software companies, Microsoft “has full geographic coverage across all industry verticals,” UBS analyst Karl Keirstead said, and that makes Microsoft less susceptible to downturns in any one sector or region. Alphabet is also set to report quarterly results Tuesday afternoon.

    Wall Street analysts also made fresh calls on what is quickly becoming one of this year’s hottest segments in pharmaceuticals – weight loss drugs.

    Most analysts predict the sales of weight loss drugs such as Wegovy and Mounjaro could easily exceed $100 billion. Citi most recently raised its sales estimates for such drugs to $71 billion by 2035, up from its prior estimate of $55 billion. Still, that’s conservative compared to Guggenheim’s expectations of $150 billion to $200 billion in sales.

    Europe’s most valuable publicly listed company, Novo Nordisk makes Wegovy, which is also sold under the brand name Ozempic. U.S. drugmaker Eli Lilly makes Mounjaro. 

    Investors were also closely watching the crypto industry as bitcoin touched its highest level in over a year on Tuesday, on hopes of a bitcoin exchange-traded fund. A bitcoin ETF would give investors a way to gain exposure to bitcoin’s price movements without owning the volatile cryptocurrency directly.

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  • CNBC Daily Open: Oil deals and awaiting tech earnings

    CNBC Daily Open: Oil deals and awaiting tech earnings

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    Traders work on the floor of the New York Stock Exchange on April 26, 2023 in New York City. 

    Michael M. Santiago | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets attempt comeback
    The Nasdaq Composite snapped a     four-day losing streak on Monday as Treasury yields retreated from their highs. Investors awaited the release of corporate earnings from tech giants including Alphabet and Microsoft. Europe’s Stoxx 600 index ended slightly lower amid geopolitical uncertainty and ahead of the European Central Bank’s monetary policy decision later this week.

    Another oil mega-merger  
    Chevron on Monday said it agreed to buy Hess for $53 billion in stock. It’s the second proposed mega merger among the biggest U.S. oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month. The proposed deal also raises the competition between Chevron and Exxon to develop drilling in nascent producer Guyana.

    Nvidia’s latest blow to Intel  
    Nvidia is working on building personal computer chips which would use technology from Arm Holdings, Reuters reported on Monday. The plans mean the chipmaker would challenge Intel in its longtime stronghold of personal computers. Advanced Micro Devices also reportedly plans to make chips for PCs with Arm technology.

    Tesla discloses DOJ probes
    Tesla disclosed that the U.S. Department of Justice has been investigating, and in some cases issued subpoenas, to Elon Musk’s automaker. In a third-quarter financial filing out Monday, Tesla said the department is looking into its driver assistance systems marketed as Autopilot and Full Self-Driving, or FSD, options; the range of the company’s electric vehicles; as well as “personal benefits, related parties,” and “personnel decisions” at the company.

    [PRO] Goldman’s guide to 5% 10-year yield
    Bond yields have been surging lately as the Federal Reserve signaled higher rates for longer in its inflation fight. The benchmark 10-year rate briefly topped the key 5% threshold Monday. Investors should focus on stocks with strong balance sheets as these companies tend to be more resilient against high interest rates, according to Goldman Sachs.

    The bottom line

    Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions. Deal making was also at play on Monday as Chevron bet big on buying Hess to compete with larger rival Exxon Mobil.

    Stocks have been feeling the pressure from multiyear highs in Treasury yields and worries about how that stands to affect the American economy. Some analysts think the benchmark 10-year yield could still have further room to run.

    The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates,” said Canaccord Genuity chief market strategist Tony Dwyer.

    Microsoft, which is slated to report earnings after the close Tuesday, is seen by UBS as a potential hedge against a recession next year. Unlike more focused software companies, Microsoft “has full geographic coverage across all industry verticals,” UBS analyst Karl Keirstead said, and that makes Microsoft less susceptible to downturns in any one sector or region. Alphabet is also set to report quarterly results Tuesday afternoon.

    Wall Street analysts also made fresh calls on what is quickly becoming one of this year’s hottest segments in pharmaceuticals – weight loss drugs.

    Most analysts predict the sales of weight loss drugs such as Wegovy and Mounjaro could easily exceed $100 billion. Citi most recently raised its sales estimates for such drugs to $71 billion by 2035, up from its prior estimate of $55 billion. Still, that’s conservative compared to Guggenheim’s expectations of $150 billion to $200 billion in sales.

    Europe’s most valuable publicly listed company, Novo Nordisk makes Wegovy, which is also sold under the brand name Ozempic. U.S. drugmaker Eli Lilly makes Mounjaro. 

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  • 5 things to know before the stock market opens Monday

    5 things to know before the stock market opens Monday

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    Here are the most important news items that investors need to start their trading day:

    1. Bond yield boost

    U.S. stock futures slid Monday morning as the 10-year Treasury note yield again ticked above 5% — a level it hit Thursday for the first time since 2007. Earnings and inflation data will help to shape whether equities bounce back from a down week. The Dow Jones Industrial Average fell 1.6%, the S&P 500 dropped 2.4% and the Nasdaq Composite shed 3.2% last week. A string of major earnings reports are due Tuesday through Thursday. The personal consumption expenditures data out Friday will offer clues about whether the Federal Reserve will hike interest rates again this year. Follow live market updates here.

    2. Tech torrent

    The tech sector, which has largely driven market gains this year, will headline a busy stretch of earnings this week. Other key reports will come from the transportation and food and beverage spaces. Investors will focus on General Motors and Ford results as executives will answer questions about the effects of the more than month-long United Auto Workers strike. Here are the major reports this week:

    3. Aid arrives in Gaza

    The first humanitarian aid convoys since the start of the Israel-Hamas war arrived in Gaza over the weekend, and more shipments of food, water and medical supplies are expected Monday. U.S. President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu on Sunday, and said there will be a “continued flow” of aid into Gaza. Israel intensified airstrikes on the besieged area in recent days, as it holds off on a potential ground invasion. Leaders around the globe are trying to prevent the conflict from turning into a broader war. Follow live updates on the conflict here.

    4. Oil consolidation ramps up

    5. More Google scrutiny

    Another country is probing Alphabet’s Google for potential anticompetitive practices. Japan’s Fair Trade Commission said it would investigate potential antitrust violations related to Google’s search engine and its apps and platforms. The move in Japan follows scrutiny over allegations of anticompetitive conduct in the European Union and United States. A Google spokesperson told CNBC that Android is an open platform that ensures “users always have a choice to customize their devices to suit their needs, including the way they browse and search the internet, or download apps.”

    – CNBC’s Lisa Kailai Han, Ruxandra Iordache, Matt Clinch and Arjun Kharpal contributed to this report.

    — Follow broader market action like a pro on CNBC Pro.

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  • CNBC Daily Open: Feeling of uncertainty is hard to shrug off for investors

    CNBC Daily Open: Feeling of uncertainty is hard to shrug off for investors

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    Gold bars of different sizes lie in a safe on a table at the precious metals dealer Pro Aurum.

    Sven Hoppe | Picture Alliance | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets tumble
    The     Dow Jones Industrial Average closed nearly 300 points lower on Friday after a surge in the benchmark U.S. 10-year Treasury yield prompted broader concerns about the economy. Asia-Pacific markets started the week lower ahead of inflation readings from across the region, while gold hit a three-month high and gained for the second straight week amid fears of heightening conflict in the Middle East.

    Tesla clocks worst week of the year
    Tesla shares dropped more than 15% last week to close at $211.99 on Friday, marking the worst weekly performance for the stock this year as CEO Elon Musk sounded pessimistic about macroeconomic issues on a recent earnings call. Shares of the electric automaker are still up 96% year-to-date.

    Big earnings week
    Investors will be watching out for an action-packed week of earnings as companies including Microsoft, Meta Platforms, Amazon, Alphabet, General Motors and Ford among others gear up to post their quarterly results. The carmakers will be under the radar this week amid ongoing strikes and contract negotiations with the United Auto Workers union.

    X to launch new subscription tiers
    Owner Elon Musk said X, the social media service formerly known as Twitter, will launch two new tiers of subscriptions for users. One tier will be “lower cost with all features, but no reduction in ads,” while the other is “more expensive, but has no ads,” Musk said. 

    [PRO] The U.S. is trying to tighten the screws on Chinese AI
    The artificial intelligence behind ChatGPT-like products and autonomous driving is driving enormous demand for Nvidia’s chips in China. In the past week, however, analysts cut their Nvidia price targets after news the U.S. plans to ban the sale of more high-end semiconductors to China. Here’s what that means for stocks.

    The bottom line

    Rising Treasury yields, looming interest rate hikes to fight inflation and the heightening conflict in the Middle East drove investors away from risky assets last week.

    The yield on the benchmark 10-year Treasury crossed 5% for the first time since 2007 on Thursday, a level perceived by markets as a potential drag on the U.S. economy as it could translate to higher rates on mortgages, credit cards, auto loans and more.

    A move into safe-haven gold seemed like a sensible bet, given the worsening crisis in the Middle East. Gold was up 2.5% last week, recording its second consecutive weekly rise after adding 5.22% in the prior week.

    Investors are now bracing for a heavy week of earnings as Big Tech companies including Alphabet, Amazon, Meta and Microsoft will take centerstage.

    “We’re hopefully going to see some continued positive strength there on the economy and what they see going forward,” said Ryan Detrick, chief market strategist at Carson Group. “The headlines are scary, for sure. But the fundamentals to us are pretty strong. We’re still seeing earnings season that’s going to come in better than expected.”

    This will arrive after a mixed batch of earnings from behemoths like Tesla and Netflix last week. Tesla marked its biggest weekly decline after Elon Musk shared his pessimistic view on the macroeconomic landscape, while Netflix shares soared as markets cheered its new ad-tier subscription plan.

    Given the huge role advertisers and subscriptions play for the bottom lines of such firms, it was no surprise that Musk turned his attention to improving the usability of social media platform X, formerly known as Twitter.

    Musk said. X is gearing up to launch two new tiers of subscriptions for users, in hopes that it could improve the company’s finances and open new revenue streams. Musk’s sweeping changes across the company, including firing most of its employees and reinstating previously banned accounts, scared advertisers away.

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  • CNBC Daily Open: Investors can’t shake off the feeling of uncertainty

    CNBC Daily Open: Investors can’t shake off the feeling of uncertainty

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    Traffic_analyzer | Istock | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets tumble
    The     Dow Jones Industrial Average closed nearly 300 points lower on Friday after a surge in the benchmark U.S. 10-year Treasury yield prompted broader concerns about the economy. Europe’s Stoxx 600 index ended at its lowest level since the start of the year, while gold hit a three-month high and gained for the second straight week amid fears of heightening conflict in the Middle East.

    Tesla clocks worst week of the year
    Tesla shares dropped more than 15% last week to close at $211.99 on Friday, marking the worst weekly performance for the stock this year as CEO Elon Musk sounded pessimistic about macroeconomic issues on a recent earnings call. Shares of the electric automaker are still up 96% year-to-date.

    Big earnings week
    Investors will be watching out for an action-packed week of earnings as companies including Microsoft, Meta Platforms, Amazon, Alphabet, General Motors and Ford among others gear up to post their quarterly results. The carmakers will be under the radar this week amid ongoing strikes and contract negotiations with the United Auto Workers union.

    X to launch new subscription tiers
    Owner Elon Musk said X, the social media service formerly known as Twitter, will launch two new tiers of subscriptions for users. One tier will be “lower cost with all features, but no reduction in ads,” while the other is “more expensive, but has no ads,” Musk said. 

    [PRO] Earnings playbook
    Big Tech takes center stage in what could be a make-or-break week for S&P 500 earnings. About 150 S&P 500 companies are slated to report, including Microsoft, Meta Platforms, Amazon and Alphabet. Those results come during a tough time for Wall Street, as higher rates and conflict in the Middle East rattle investor sentiment. Here’s how to trade a busy week of earnings.

    The bottom line

    Rising Treasury yields, looming interest rate hikes to fight inflation and the heightening conflict in the Middle East drove investors away from risky assets last week.

    The yield on the benchmark 10-year Treasury crossed 5% for the first time since 2007 on Thursday, a level perceived by markets as a potential drag on the U.S. economy as it could translate to higher rates on mortgages, credit cards, auto loans and more.

    A move into safe-haven gold seemed like a sensible bet, given the worsening crisis in the Middle East. Gold was up 2.5% last week, recording its second consecutive weekly rise after adding 5.22% in the prior week.

    Investors are now bracing for a heavy week of earnings as Big Tech companies including Alphabet, Amazon, Meta and Microsoft will take centerstage.

    “We’re hopefully going to see some continued positive strength there on the economy and what they see going forward,” said Ryan Detrick, chief market strategist at Carson Group. “The headlines are scary, for sure. But the fundamentals to us are pretty strong. We’re still seeing earnings season that’s going to come in better than expected.”

    This will arrive after a mixed batch of earnings from behemoths like Tesla and Netflix last week. Tesla marked its biggest weekly decline after Elon Musk shared his pessimistic view on the macroeconomic landscape, while Netflix shares soared as markets cheered its new ad-tier subscription plan.

    Given the huge role advertisers and subscriptions play for the bottom lines of such firms, it was no surprise that Musk turned his attention to improving the usability of social media platform X, formerly known as Twitter.

    Musk said. X is gearing up to launch two new tiers of subscriptions for users, in hopes that it could improve the company’s finances and open new revenue streams. Musk’s sweeping changes across the company, including firing most of its employees and reinstating previously banned accounts, scared advertisers away.

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  • Web Summit CEO resigns after apologizing for Israel-Hamas war comments

    Web Summit CEO resigns after apologizing for Israel-Hamas war comments

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    Tristan Fewings | Getty Images

    Paddy Cosgrave, the CEO and co-founder of annual tech conference Web Summit, has resigned from his post after coming under fire for his comments on the Israel-Hamas war, leading Big Tech guests like Alphabet, Meta and Amazon to cancel their attendance.

    “Unfortunately, my personal comments have become a distraction from the event, and our team, our sponsors, our startups and the people who attend,” Cosgrave said in a statement on Saturday.

    At the beginning of the week, Cosgrave took to social media to express his personal opposition to Israel’s counterattacks in Gaza.

    “To repeat: War crimes are war crimes even when committed by allies & should be called out for what they are,” Cosgrave said in a Monday post on X, formerly known as Twitter. “I will not relent.”

    His remarks triggered a flurry of cancellations from high-profile attendees like Meta, Alphabet, Amazon and others. This year’s conference is scheduled for Nov. 13 to Nov. 16 and is set to take place in Lisbon, Portugal.

    The day after he posted on X, Cosgrave issued an apology on Web Summit’s blog, saying he understood that the timing of his comments “caused profound hurt.”

    “What is needed at this time is compassion, and I did not convey that,” Cosgrave said in the apology.

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  • Google cuts dozens of jobs in news division

    Google cuts dozens of jobs in news division

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    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.”

    WATCH: Google is the ‘Magnificent Seven’ stock that has the best catalyst

    Google is the 'Magnificent Seven' stock that has the best catalyst, says Deepwater's Doug Clinton

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  • Here are Tuesday’s biggest analyst calls: Apple, Tesla, Dollar Tree, Amazon, Alphabet, Toll & more

    Here are Tuesday’s biggest analyst calls: Apple, Tesla, Dollar Tree, Amazon, Alphabet, Toll & more

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