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Tag: Enterprise

  • OpenAI launches a way for enterprises to build and manage AI agents | TechCrunch

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    OpenAI has launched a new product to help enterprises navigate the world of AI agents, focusing on agent management as critical infrastructure for enterprise AI adoption.

    On Thursday, AI giant OpenAI announced the launch of OpenAI Frontier, an end-to-end platform designed for enterprises to build and manage AI agents, on Thursday. It’s an open platform, which means users can manage agents built outside of OpenAI too.

    Frontier users can program AI agents to connect to external data and applications which allows them to execute tasks far outside of the OpenAI platform. Users can also limit and manage what these agents have access to, and what they can do, of course.

    OpenAI said Frontier was designed to work the same way companies manage human employees. Frontier offers an onboarding process for agents and a feedback loop that is meant to help them improve over time the same way a review might help an employee.

    OpenAI touted enterprises including HP, Oracle, State Farm and Uber as customers, but Frontier is currently only available to a limited number of users with plans to roll out more generally in the coming months.

    The company would not disclose pricing details on a press briefing earlier this week, according to reporting from The Verge. TechCrunch has also reached out for more information regarding pricing.

    Agent-management products become table stakes since AI agents rose to prominence in 2024. Salesforce has arguably the best-known such product, Agentforce, which the company launched in the fall of 2024. Others have quickly followed. LangChain is a notable player in the space that was founded in 2022 and has raised more than $150 million in venture capital. CrewAI is a smaller upstart that has raised more than $20 million in venture capital.

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    In December, global research and advisory firm Gartner released a report about this type of software and called agent management platforms both the “most valuable real estate in AI” and a necessary piece of infrastructure for enterprises to adopt AI.

    It’s not surprising that OpenAI would release this platform in early 2026 as the company has made it clear that enterprise adoption is one of its main focus areas for this year. The company has also announced two notable enterprise deals this year with ServiceNow and Snowflake.

    Still, if OpenAI wants to be a meaningful player in the enterprise space, offering a product like Frontier is a promising step.

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    Rebecca Szkutak

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  • Investors predict AI is coming for labor in 2026  | TechCrunch

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    Concerns about how AI will affect workers continue to rise in lockstep with the pace of advancements and new products promising automation and efficiency.

    Evidence suggests that fear is warranted.

    A November MIT study found an estimated 11.7% of jobs could already be automated using AI. Surveys have shown employers are already eliminating entry-level jobs because of the technology. Companies are also already pointing to AI as the reason for layoffs.

    As enterprises more meaningfully adopt AI, some may take a closer look at how many employees they really need.

    In a recent TechCrunch survey, multiple enterprise VCs said AI will have a big impact on the enterprise workforce in 2026. This was particularly interesting because the survey didn’t specifically ask about it.

    Eric Bahn, a co-founder and general partner at Hustle Fund, expects to see affects on labor in 2026. He’s just not sure exactly what that will look like.

    “I want to see what roles that have been known for more repetition get automated, or even more complicated roles with more logic become more automated,” Bahn said. “Is it going to lead to more layoffs? Is there going to be higher productivity? Or will AI just be an augmentation for the existing labor market to be even more productive in the future? All of this seems pretty unanswered, but it seems like something big is going to happen in 2026.”

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    Marell Evans, founder and managing partner at Exceptional Capital, predicted companies looking to increase AI spending, will pull money from their pool for labor and hiring.

    “I think on the flip side of seeing an incremental increase in AI budgets, we’ll see more human labor get cut and layoffs will continue to aggressively impact the U.S. employment rate,” Evans said.

    Rajeev Dham, managing director at Sapphire, agreed that 2026 budgets will start to shift resources from labor to AI. Jason Mendel, a venture investor at Battery Ventures, added that AI will start to surpass just being a tool to make existing workers more efficient in 2026.

    “2026 will be the year of agents as software expands from making humans more productive to automating work itself, delivering on the human-labor displacement value proposition in some areas,” Mendel said.

    Antonia Dean, a partner at Black Operator Ventures, said even if companies aren’t shifting labor budgets toward AI projects, they will likely still say AI is the reason for layoffs or a reduction in labor costs anyway.

    “The complexity here is that many enterprises, despite how ready or not they are to successfully use AI solutions, will say that they are increasing their investments in AI to explain why they are cutting back spending in other areas or trimming workforces,” Dean said. “In reality, AI will become the scapegoat for executives looking to cover for past mistakes.”

    Many AI companies argue their technology doesn’t eliminate jobs but rather helps shift workers to “deep work” or to higher-skilled jobs while AI just automates repetitive “busy work.”

    But not everyone buys that argument, and people are worried that their jobs will be automated. According to VCs who invest in that area, it doesn’t sound like those fears will be quelled in 2026.

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    Rebecca Szkutak

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  • Lovable’s CEO says the company is targeting enterprise customers as its ARR doubles to $200 million in just four months | Fortune

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    Swedish “vibe-coding” startup Lovable has reached $200 million in annual recurring revenue (ARR), doubling its total from just four months earlier, co-founder and CEO Anton Osika told attendees at the Slush 2025 technology conference in Helsinki.

    Lovable determines ARR by taking the prior month’s revenue, multiplying it by 12, and annualizing the result, according to Osika.

    The Swedish company, founded in 2023, has experienced rapid growth since launching its AI-powered app-building product in late 2024. Now, Osika is eyeing a larger enterprise customer base.

    “If you look at people who have accounts from enterprises, it’s like half [of customers],” he told Fortune. “Most of it is coming from an individual who starts using Lovable and then brings it into the company. And then, in some cases, it’s growing into a larger contract across the entire company and turning into multi-million-dollar deals.”

    Osika describes Lovable’s mission as democratizing software engineering by leaning into “vibe-coding,” where a user describes in plain language the app they want to build or the function of a piece of software they want to create, and the AI takes care of actually writing the code to produce that result.

    Lovable’s main product is an AI-powered development platform that turns natural-language prompts into full-stack web applications and websites, generating real front-end, back-end, and database code that users can run and edit. The platform runs on a subscription model, where users can opt to pay for more advanced features. The company targets both non-technical users and developers, and offers a chat-based interface to help users build and deploy apps.

    “We’re living through one of those rare moments in time that people are going to talk about for decades, and I think we’re transforming how humanity creates software,” Osika said. “Everyone becomes a developer in the future.”

    Many of its users are casual creators, for example, those who use Lovable to quickly build simple tools or prototypes without learning to code. While individual users can generate revenue, the enterprise market is becoming increasingly lucrative as larger companies look to integrate AI tools into workflows. However, it’s also increasingly competitive. Lovable will be going up against major players like Microsoft and Google, as well as fast-growing startups like Anthropic, which is already a favorite among coders.

    “We’re building for the non-technical and the 99%,” Osika said of the competition. “We’re obsessed with being simple, and so far, momentum-wise, that’s working out great for us.”

    Lovable’s AI interface

    The company is also expanding its product features, in part to become more appealing to enterprises that want to use AI for things like creating their own products or making tools to manage day-to-day operations. Osika says the company is building an AI interface that allows customers to connect, access, and customize various tools.

    “What we foresee is that our thesis—which is to simplify all the steps of product development, the entire lifecycle, from building it, hosting it, maintaining it, testing it, and doing experimentation—is going to be realized through one simple AI interface, and that’s what we’re building,” he said.

    The startup, which is led by the 35-year-old Osika and co-founderFabian Hedin, is also bringing in senior leadership to help steer this expansion. Over the last few months, the company has hired Maryanne Caughy, former chief people officer at Notion and Gusto, to head up people, Dropbox’s former head of growth and data, Eelena Verna, to lead growth, and Meta alum Charles Guillemet to lead recruitment.

    “We just brought in these wonderful senior people who are moving to Stockholm with their families—even from the Bay Area—to pair with this very, very high-energy, high-slope talent that we have in the company,” he said. “As we build out, we’re also opening hubs in San Francisco and Boston to serve our customers there.”

    A European base

    Speaking onstage, Osika also attributed Lovable’s rapid growth to the company’s decision to stay in Europe, despite persistent advicefrom others in the industry that the company needed a San Francisco base.

    “It was tempting, but I really resisted that,” he said. “I can sit here now and say, ‘You can build a global AI company from this country.’ There is more available talent if you have a strong mission and a team that’s working with urgency.”

    Lovable has secured more than $225 million in venture capital since its founding. Its most recent raise—a $200 million Series A led by Accel and joined by more than 20 investors—valued the company at $1.8 billion.

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  • OpenAI’s new AI safety tools could give a false sense of security | Fortune

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    OpenAI last week unveiled two new free-to-download tools that are supposed to make it easier for businesses to construct guardrails around the prompts users feed AI models and the outputs those systems generate.

    The new guardrails are designed so a company can, for instance, more easily set up contorls to prevent a customer service chatbot responding with a rude tone or revealing internal policies about how it should make decisions around offering refunds, for example.

    But while these tools are designed to make AI models safer for business customers, some security experts caution that the way OpenAI has released them could create new vulnerabilities and give companies a false sense of security. And, while OpenAI says it has released these security tools for the good of everyone, some question whether OpenAI’s motives aren’t driven in part by a desire to blunt one advantage that its AI rival Anthropic, which has been gaining traction among business users in part because of a perception that its Claude models have more robust guardrails than other competitors.

    The OpenAI security tools—which are called gpt-oss-safeguard-120b and gpt-oss-safeguard-20b—are themselves a type of AI model known as a classifier, which is designed to assess whether the prompt a user submits to a larger, more general-purpose AI model as well as that larger AI model produces meet a set of rules. Companies that purchase and deploy AI models could, in the past, train these classifiers themselves, but the process was time-consuming and potentially expensive, since the developers would have to collect examples of content that violates the policy in order to train the classifier. And then, if the company wanted to adjust the policies used for the guardrails, they would have to collect new examples of violations and retrain the classifier.

    OpenAI is hoping the new tools can make that process faster and more flexible. Rather than being trained to follow one fixed rulebook, these new security classifiers can simply read a written policy and apply it to new content.

    OpenAI says this method, which it calls “reasoning-based classification,” allows companies to adjust their safety policies as easily as editing the text in a document instead of rebuilding an entire classification model. The company is positioning the release as a tool for enterprises that want more control over how their AI systems handle sensitive information, such as medical records or personnel records.

    However, while the tools are supposed to be safer for enterprise customers, some safety experts say that they instead may give users a false sense of security. That’s because OpenAI has open-sourced the AI classifiers. That means they have made all the code for the classifiers available for free, including the weights, or the internal settings of the AI models.

    Classifiers act like extra security gates for an AI system, designed to stop unsafe or malicious prompts before they reach the main model. But by open-sourcing them, OpenAI risks sharing the blueprints to those gates. That transparency could help researchers strengthen safety mechanisms, but it might also make it easier for bad actors to find the weak spots and risks, creating a kind of false comfort.

    “Making these models open source can help attackers as well as defenders,” David Krueger, an AI safety professor at Mila, told Fortune. It will make it easier to develop approaches to bypassing the classifiers and other similar safeguards.”

    For instance, when attackers have access to the classifier’s weights, they can more easily develop what are known as “prompt injection” attacks, where they develop prompts that trick the classifier into disregarding the policy it is supposed to be enforcing. Security researchers have found that in some cases even a string of characters that look nonsensical to a person can, for reasons researchers don’t entirely understand, convince an AI model to disregard its guardrails and do something it is not supposed to, such as offer advice for making a bomb or spew racist abuse.

    Representatives for OpenAI directed Fortune to the company’s blog post announcement and technical report for the models.

    Short-term pain for long-term gains

    Open-source can be a double-edged sword when it comes to safety. It allows researchers and developers to test, improve, and adapt AI safeguards more quickly, increasing transparency and trust. For instance, there may be ways in which security researchers could adjust the model’s weights to make it more robust to prompt injection without degrading the model’s performance.

    But it can also make it easier for attackers to study and bypass those very protections—for instance, by using other machine learning software to run through hundreds of thousands of possible prompts until it finds ones that will cause the model to jump its guardrails. What’s more, security researchers have found that these kinds of automatically-generated prompt injection attacks developed on open source AI models will also sometimes work against proprietary AI models, where the attackers don’t have access to the underlying code and model weights. Researchers have speculated this is because there may be something inherent in the way all large language models encode language that similar prompt injections will have success against any AI model.

    In this way, open sourcing the classifiers may not just give users a false sense of security that their own system is well-guarded, it may actually make every AI model less secure. But experts said that this risk was probably worth taking because open-sourcing the classifiers should also make it easier for all of the world’s security experts to find ways to make the classifiers more resistant to these kinds of attacks.

    “In the long term, it’s beneficial to kind of share the way your defenses work— it may result in some kind of short-term pain. But in the long term, it results in robust defenses that are actually pretty hard to circumvent,” Vasilios Mavroudis, principal research scientist at the Alan Turing Institute, said.

    Mavroudis said that while open-sourcing the classifiers could, in theory, make it easier for someone to try to bypass the safety systems on OpenAI’s main models, the company likely believes this risk is low. He said that OpenAI has other safeguards in place, including having teams of human security experts continually trying to test their models’ guardrails in order to find vulnerabilities and hopefully improve them.

    “Open-sourcing a classifier model gives those who want to bypass classifiers an opportunity to learn about how to do that. But determined jailbreakers are likely to be successful anyway,” Robert Trager, co-director of the Oxford Martin AI Governance Initiative, said.

    “We recently came across a method that bypassed all safeguards of the major developers around 95% of the time — and we weren’t looking for such a method. Given that determined jailbreakers will be successful anyway, it’s useful to open-source systems that developers can use for the less determined folks,” he added.

    The enterprise AI race

    The release also has competitive implications, especially as OpenAI looks to challenge rival AI company Anthropic’s growing foothold among enterprise customers. Anthropic’s Claude family of AI models have become popular with enterprise customers partly because of their reputation for stronger safety controls compared to other AI models. Among the safety tools Anthropic uses are “constitutional classifiers” that work similarly to the ones OpenAI just open-sourced.

    Anthropic has been carving out a market niche with enterprise customers, especially when it comes to coding. According to a July report from Menlo Ventures, Anthropic holds 32% of the enterprise large language model market share by usage compared to OpenAI’s 25%. In coding‑specific use cases, Anthropic reportedly holds 42%, while OpenAI has 21%. By offering enterprise-focused tools, OpenAI may be attempting to win over some of these business customers, while also positioning itself as a leader in AI safety.

    Anthropic’s “constitutional classifiers,” consist of small language models that check a larger model’s outputs against a written set of values or policies. By open-sourcing a similar capability, OpenAI is effectively giving developers the same kind of customizable guardrails that helped make Anthropic’s models so appealing.

    “From what I’ve seen from the community, it seems to be well received,” Mavroudis said. “They see the model as potentially a way to have auto-moderation. It also comes with some good connotation, as in, ‘we’re giving to the community.’ It’s probably also a useful tool for small enterprises where they wouldn’t be able to train such a model on their own.”

    Some experts also worry that open-sourcing these safety classifiers could centralize what counts as “safe” AI.

    “Safety is not a well-defined concept. Any implementation of safety standards will reflect the values and priorities of the organization that creates it, as well as the limits and deficiencies of its models,” John Thickstun, an assistant professor of computer science at Cornell University, told VentureBeat. “If industry as a whole adopts standards developed by OpenAI, we risk institutionalizing one particular perspective on safety and short-circuiting broader investigations into the safety needs for AI deployments across many sectors of society.”

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    Beatrice Nolan

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  • The Microsoft Azure Outage Shows the Harsh Reality of Cloud Failures

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    Microsoft’s Azure cloud platform, its widely used 365 services, Xbox, and Minecraft started suffering outages at roughly noon Eastern time on Wednesday, the result of what Microsoft said was “an inadvertent configuration change.” The incident—which marks the second major cloud provider outage in less than two weeks—highlights the instability of an internet built largely on infrastructure run by a few tech giants.

    Microsoft’s problems specifically originated from Azure’s Front Door content delivery network and emerged just hours before Microsoft’s scheduled earnings announcement. The company website, including its investor relations page, was still down on Wednesday afternoon, and the Azure status page where Microsoft provides updates was having intermittent issues as well.

    Microsoft described in status updates on Wednesday that it went through a process of sequentially rolling back recent versions of its environment until it could pinpoint the “last known good” configuration. At 3:01 pm ET, the company said it had identified and pushed this stable configuration and that “customers may begin to see initial signs of recovery. We are currently recovering nodes and routing traffic through healthy nodes.”

    A Microsoft spokesperson said in a statement, “We are working to address an issue affecting Azure Front Door that is impacting the availability of some services. Customers should continue to check their Service Health Alerts.” The company did not immediately respond to questions from WIRED about the nature of the configuration change that caused the outage.

    In addition to occurring on Microsoft’s earnings day, the outage comes nine days after Azure rival Amazon Web Services suffered a massive outage that impacted sites and services around the world. Major cloud providers, often called “hyperscalers,” standardize and often improve baseline security and reliability for their customers, but problems and outages can cause them to become single points of failure for large populations of critical digital services

    “Even Azure’s outage status page is down,” says Davi Ottenheimer, a longtime security operations and compliance manager and a vice president at the data infrastructure company Inrupt. “Another configuration change error—we are in the age of integrity breach more so now than ever.”

    Azure blocked customers from making configuration changes to their instances while it worked to address the issue. The company said in a status update at 3:22 pm ET that it expects “full mitigation” of the situation by 7:20 pm ET.

    “Organizations may think they’re insulated by their choice of cloud provider, but dependencies run deeper,” says Munish Walther-Puri, an adjunct faculty member at IANS Research and the former director of cyber risk for the city of New York. “When key partners rely on other hyperscalers, exposure multiplies. As AI becomes the next layer of critical infrastructure, these outages demonstrate the brittleness of our digital backbone.”

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    Lily Hay Newman

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  • AI Agents Are Terrible Freelance Workers

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    Even the best artificial intelligence agents are fairly hopeless at online freelance work, according to an experiment that challenges the idea of AI replacing office workers en masse.

    The Remote Labor Index, a new benchmark developed by researchers at data annotation company Scale AI and the Center for AI Safety (CAIS), a nonprofit, measures the ability of frontier AI models to automate economically valuable work.

    The researchers gave several leading AI agents a range of simulated freelance work and found that even the best could perform less than 3 percent of the work, earning $1,810 out of a possible $143,991. The researchers looked at several tools and found the most capable to be Manus from a Chinese startup of the same name, followed by Grok from xAI, Claude from Anthropic, ChatGPT from OpenAI, and Gemini from Google.

    “I should hope this gives much more accurate impressions as to what’s going on with AI capabilities,” says Dan Hendrycks, director of CAIS. He adds that while some agents have improved significantly over the past year or so, that does not mean that this will continue at the same rate.

    Spectacular AI advances have led to speculation about AI soon surpassing human intelligence and replacing vast numbers of workers. In March, Dario Amodei, CEO of Anthropic, suggested that 90 percent of coding work would be automated within a matter of months.

    Previous waves of AI have inspired misplaced predictions about job displacement, for example concerning the imminent replacement of radiologists with AI algorithms.

    The researchers generated a range of freelance tasks through verified Upwork workers. The tasks span a range of work including graphic design, video editing, game development, and administrative chores like scraping data. They combined a description of each job with a directory of files needed to perform the work and an example of a finished project produced by a human.

    Hendrycks says that while AI models have gotten better at coding, math, and logical reasoning in recent years, they still struggle to use different tools and to perform complex tasks that involve numerous steps. “They don’t have long-term memory storage and can’t do continual learning from experiences. They can’t pick up skills on the job like humans,” he says.

    The analysis offers a counterpoint to a benchmark of economic work offered in September by OpenAI called GDPval, which purports to measure economically valuable work. According to GDPval, frontier AI models such as GPT-5 are approaching human abilities on 220 tasks across a range of office jobs. OpenAI did not provide a comment.

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  • With an Intel recovery underway, all eyes turn to its foundry business | TechCrunch

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    Intel’s third-quarter earnings beat Wall Street expectations Thursday, results buoyed by a bump in revenue combined with larger cuts, and multiple, sizable investments over the last two months as CEO Lip-Bu Tan looks to turn around the struggling semiconductor giant.

    Intel’s revenue results and its $4.1 billion in net income provides a far rosier view than its string of quarterly losses. But the company’s recovery story deserves several chapters dedicated to cost cutting via layoffs and other reductions as well as a series of high-profile investments from Softbank, Nvidia, and the U.S. government.

    Intel added $20 billion to its balance sheet during the third quarter, the company announced on its third-quarter earnings presentation on Thursday, sending its stock soaring. This growth was largely due to three sizable investments in the company over the last three months.

    In August, SoftBank invested $2 billion. A few days later, the U.S. Government took an unprecedented 10% equity stake in Intel. The company has received $5.7 billion of the planned $8.9 billion from the U.S. Government thus far. Nvidia also bought a $5 billion stake in Intel in September as part of a broader deal to develop chips together over time.

    “The actions we took to strengthen the balance sheet give us greater operational flexibility and position us well to continue to execute our strategy with confidence,” Tan said on the company’s earnings call. “In particular, I’m honored by the trust and confidence President Trump and Secretary [Howard] Lutnick have placed in me. Their support highlights Intel’s strategic role as the only U.S.-based semiconductor company with leading edge logic, [research and development] and manufacturing.”

    The company also received $5.2 billion from closing the sale of its ownership stake of Altera, a hardware company it had owned since 2015, on September 12. It also sold its stake in Mobileye, an autonomous driving tech company.

    Intel grew its quarterly revenue by $800 million in the third quarter to $13.7 billion, compared to $12.9 billion. Intel had net income of $4.1 billion in the third quarter, a steep reversal from the $16.6 billion loss it reported in the same year-ago period.

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    The foundry biz

    Despite the strong quarter, there weren’t many details on what will happen next with Intel’s foundry business, which makes custom chips for customers. The business has floundered from the start and has been a focus of Tan, who initiated significant layoffs in its foundry business this summer.

    The business appears to be a priority of the Trump administration; a key condition of the government’s investment in Intel includes language that it will penalize Intel if it divested from its foundry business over the next five years.

    Wall Street is keeping a close eye on foundry for signs of the company’s long-term growth. Intel analysts told TechCrunch in August that the company did not need cash to turn itself around but rather a strategy to get its foundry business on track.

    Tan said that Intel thinks its foundry business is “uniquely positioned” to capitalize on the swelling demand for chips but was light on the details — beyond saying that the company is actively engaging with potential foundry customers — and added that the growth of the foundry business would remain disciplined.

    “Building a world-class foundry is a long-term effort founded on trust,” Tan said. “As a foundry, we need to ensure that our process can be easily used by a variety of customers, each with their unique way of building their own products. We must learn to delight our customers as they count on us to build wafers, to meet all their needs for powerful performance, yield, cost, and schedule.”

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  • Commercial clients demand intelligent products from banks

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    Commercial bank clients demand direct connectivity to enterprise resource planning and accounting platforms to ensure the flow of standardized data into their businesses.  With a single feed of standardized data flowing directly into ERP and accounting platforms, companies can lean on AI to automate the following:  Reconciliation;  Anomaly detection;  Predictive analytics; and  Risk and opportunity […]

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  • Salesforce announces Agentforce 360 as enterprise AI competition heats up | TechCrunch

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    Salesforce announced Monday the latest version of its AI agent platform as the company looks to lure enterprises to its AI software in an increasingly crowded market.

    The customer relations manager giant unveiled the new platform, branded Agentforce 360, ahead of its annual Dreamforce customer conference that kicks off October 14. This newer version of Agentforce includes new ways to instruct AI agents through text, a new platform to build and deploy agents, and new infrastructure for messaging app Slack, among others.

    A notable aspect of Agentforce 360 is its new AI agent prompting tool, called Agent Script, which will be released in beta in November. Agent Script gives users the ability to program their AI agents to be more flexible and better respond to “if/then” situations. This allows AI agents to be programmed to be more predictable in less rigid situations like customer questions.

    Users can tap into “reasoning” models, which claim to think before responding as opposed to responding based on patterns. Anthropic, OpenAI and Google Gemini power these “reasoning” agents.

    Salesforce also announced it is releasing a new agent building tool, Agentforce Builder, which allows users to build, test and deploy AI agents from a singular spot. This tool, which will be released in beta in November, includes Agentforce Vibes, an enterprise-grade app vibe coding tool that Salesforce announced earlier this month.

    The company also announced a broader integration between Agentforce and Slack. Salesforce said its core apps, including Agenforce Sales, IT and HR, among others, will surface directly in Slack starting this month and expand through the beginning of 2026.

    Slack is piloting a new version of its Slackbot chatbot that is meant to be more of a personalized AI agent that learns about its user and will offer insights and suggestions.

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    Salesforce wants Slack to serve as an enterprise search tool in the future too and plans to launch connectors with platforms like Gmail, Outlook, and Dropbox in early 2026.

    This latest update from Salesforce comes at an interesting time for the enterprise AI market. Companies continue to release AI features aimed at their enterprise customers while enterprises struggle to see a return on investment for these tools.

    Last week Google announced Gemini Enterprise, a suite of tools — many of which were already available — for building enterprise-grade AI agents, that counts Figma, Klarna and Virgin Voyages as early customers, among others.

    Anthropic also started to show traction for its enterprise product, Claude Enterprise. The company announced it struck a deal with consulting giant Deloitte to bring its Claude chatbot to Deloitte’s 500,000 global employees — its largest enterprise deal yet. Anthropic announced a strategic partnership with IBM the next day.

    Salesforce touts that Agentforce has 12,000 customers — significantly higher than any of its competitors, according to its Agentforce press release. Early pilot customers of its Agentforce 360 upgrades include Lennar, Adecco, and Pearson.

    This is all despite a recent MIT study found that 95% of enterprise AI pilots fail before they reach production as companies still struggle to justify spending money on these AI tools.

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  • Nvidia, Google, Microsoft and more head to Las Vegas to tout health-care AI tools

    Nvidia, Google, Microsoft and more head to Las Vegas to tout health-care AI tools

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    Visitors check out Nvidia’s AI technology at the 2024 Apsara Conference in Hangzhou, China, on September 19, 2024.

    Costfoto | Nurphoto | Getty Images

    Nvidia, Google, Microsoft and dozens of other tech companies are descending on Las Vegas next week to showcase artificial intelligence tools they say will save doctors and nurses valuable time. 

    Sunday marks the official start of a health-care technology conference called HLTH, which is expected to draw more than 12,000 industry leaders this year. CNBC will be on the ground. Based on the speaking agenda and announcements leading up to the conference, AI tools to conquer administrative burdens will be the star of this year’s show. 

    Doctors and nurses are responsible for mountains of documentation as they work to keep up with patient records, interface with insurance companies and comply with regulators. Often, these tasks are painstakingly manual, in part because health data is siloed and stored across multiple vendors and formats. 

    The daunting administrative workload is a major cause of burnout in the industry, and it’s part of the reason a nationwide shortage of 100,000 health-care workers is expected by 2028, according to consulting firm Mercer. Tech companies, eager to carve out a piece of a market that could top $6.8 trillion in spending by the decade’s end, argue that their generative AI tools can help.

    Alex Schiffhauer, group product manager at Google, speaks during the Made By Google event at the company’s Bay View campus in Mountain View, California, Aug. 13, 2024.

    Josh Edelson | AFP | Getty Images

    Google, for instance, said it’s working to expand its health-care customer base by tackling administrative burden with AI.

    On Thursday, the company announced the general availability of Vertex AI Search for Healthcare, which it introduced in a trial capacity during HLTH last year. Vertex AI Search for Healthcare allows developers to build tools to help doctors quickly search for information across disparate medical records, Google said. New features within Google’s Healthcare Data Engine, which helps organizations build the platforms they need to support generative AI, are also now available, the company said.

    Google on Thursday released the results of a survey that said clinicians spend nearly 28 hours a week on administrative tasks. In the survey, 80% of providers said this clerical work takes away from their time with patients, and 91% said they feel positive about using AI to streamline these tasks. 

    Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.

    Dimas Ardian | Bloomberg | Getty Images

    Similarly, Microsoft on Oct. 11 announced its collection of tools that aim to lessen clinicians’ administrative workload, including medical imaging models, a health-care agent service and an automated documentation solution for nurses, most of which are still in the early stages of development. 

    Microsoft already offers an automated documentation tool for doctors through its subsidiary, Nuance Communications, which it acquired in a $16 billion deal in 2021. The tool, called DAX Copilot, uses AI to transcribe doctors’ visits with patients and turn them into clinical notes and summaries. Ideally, this means doctors don’t have to spend time typing out these notes themselves. 

    Nurses and doctors complete different types of documentation during their shifts, so Microsoft said it’s building a separate tool for nurses that’s best suited to their workflows. 

    AI scribe tools such as DAX Copilot have exploded in popularity this year, and Nuance’s competitors, such as Abridge, which has reportedly raised more than $460 million, and Suki, which has raised $165 million, will also be at the HLTH conference. 

    Dr. Shiv Rao, the founder and CEO of Abridge, told CNBC in March that the rate at which the health-care industry has adopted this new form of clinical documentation feels “historic.” Abridge received a coveted investment from Nvidia’s venture capital arm that same month. 

    Nvidia is also gearing up to address doctor and nurse workloads at HLTH. 

    Kimberly Powell, the company’s vice president of health care, is delivering a keynote Monday that will explain how using generative AI will help health-care professionals “dedicate more time to patient care,” according to the conference’s website.

    Nvidia’s graphics processing units, or GPUs, are used to create and deploy the models that power OpenAI’s ChatGPT and similar applications. As a result, Nvidia has been one of the primary beneficiaries of the AI boom. Nvidia shares are up more than 150% year to date, and the stock tripled last year. 

    The company has been making steady inroads into the health-care sector in recent years, and it offers a range of AI tools across medical devices, drug discovery, genomics and medical imaging. Nvidia also announced expanded partnerships with companies such as Johnson & Johnson and GE HealthCare in March. 

    While the health-care sector has historically been slow to adopt new technology, the buzz around administrative AI tools has been undeniable since ChatGPT exploded onto the scene two years ago. 

    Even so, many health systems are still in the early stages of evaluating tools and vendors, and they’ll be making the rounds on the HLTH exhibition floor. Tech companies will have to prove they have the chops to tackle one of health care’s most complex problems. 

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  • After rejecting Google takeover, cyber firm Wiz says it will IPO ‘when the stars align’

    After rejecting Google takeover, cyber firm Wiz says it will IPO ‘when the stars align’

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    LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”

    Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.

    Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.

    Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.

    “We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.

    Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.

    In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”

    Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.

    UK expansion

    Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.

    Wiz co-founder discusses the company's expansion into the UK

    “I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”

    The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.

    “The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”

    Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”

    Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.

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  • HSBC exec says there’s a lot of AI ‘success theater’ happening in finance

    HSBC exec says there’s a lot of AI ‘success theater’ happening in finance

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    Jaap Arriens | NurPhoto via Getty Images

     

    LONDON — Increasingly many financial services firms are touting the benefits of artificial intelligence when it comes to boosting productivity and overall operational efficiency.

    Despite bold statements, a lot of companies are failing to produce tangible results, according to Edward J Achtner, the head of generative AI for U.K. banking giant HSBC.

    “Candidly, there’s a lot of success theater out there,” Achtner said on a panel at the CogX Global Leadership Summit alongside Ranil Boteju — a fellow AI leader at rival British bank Lloyds Banking Group — and Nathalie Oestmann, head of NV Ltd, an advisory firm for venture capital funds.

    “We have to be very clinical in terms of what we choose to do, and where we choose to do it,” Achtner told attendees of the event, held at the Royal Albert Hall in London earlier this week.

    Achtner outlined how the 150-year-old lending institution has embraced artificial intelligence since ChatGPT — the popular AI chatbot from Microsoft-backed startup OpenAI — burst onto the scene in November 2022.

    The HSBC AI leader said that the bank has more than 550 use cases across its business lines and functions linked to AI — ranging from fighting money laundering and fraud using machine learning tools to supporting knowledge workers with newer generative AI systems.

    One example he gave was a partnership that HSBC has in place with internet search titan Google on the use of AI technology anti-money laundering and fraud mitigation. That tie-up has been in place for several years, he said. The bank has also dipped its toes deeper into genAI tech much more recently.

    “When it comes to generative artificial intelligence, we do need to clearly separate that” from other types of AI, Achtner said. “We do approach the underlying risk with respect to generative very differently because, while it represents incredible potential opportunity and productivity gains, it also represents a different type of risk.”

    Achtner’s comments come as other figures in the financial services sector — particularly leaders at startup firms — have made bold statements about the level of overall efficiency gains and cost reductions they are seeing as a result of investments in AI.

    Buy now, pay later firm Klarna says it has been taking advantage of AI to make up for loss of productivity resulting from declines in its workforce as employees move on from the company.

    It is implementing a company-wide hiring freeze and has slashed overall employee headcount down to 3,800 from 5,000 — a roughly 24% workforce reduction — with the help of AI, CEO Sebastian Siemiatkowski said in August. He is looking to further reduce Klarna’s headcount to 2,000 staff members — without specifying a time for this target.

    Klarna’s boss said the firm was lowering its overall headcount against the backdrop of AI’s potential to have “a dramatic impact” on jobs and society.

    “I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective,” he said at the time in an interview with the BBC. Siemiatkowski said it was “too simplistic” to say AI’s disruptive effects would be offset by the creation of new jobs thanks to AI.

    Oestmann of NV Ltd, a London-based firm that offers advisory services for the C-suite of venture capital and private equity firms, directly touched on Klarna’s actions, saying headlines around such AI-driven workforce reductions are “not helpful.”

    Klarna, she suggested, likely saw that AI “makes them a more valuable company” and was consequently incorporating the technology as part of plans to reduce its workforce anyway.

    The result Klarna is seeing from AI “are very real,” a Klarna spokesperson told CNBC. “We publicize these results because we want to be honest and transparent about the impact genAI is having in the real world in companies today,” the spokesperson added.

    “At the end of the day,” Oestmann added, as long as people are “trained appropriately” and banks and other financial services firm can “reinvent” themselves in the new AI era, “it will just help us to evolve.” She advised financial firms to pursue “continuous learning in everything that you do.”

    “Make sure you are trying these tools out, make sure you are making this part of your everyday, make sure you are curious,” she added.

    Boteju, chief data and analytics officer at Lloyds, pointed to three main use cases that the lender sees with respect to AI: automating back office functions like coding and engineering documentation, “human-in-the loop” uses like prompts for sales staff, and AI-generated responses to client queries.

    Boteju stressed that Lloyds is “proceeding with caution” when it comes to exposing the bank’s customers to generative AI tools. “We want to get our guardrails in place before we actually start to scale those,” he added.

    “Banks in particular have been using AI and machine learning for probably about 15 or 20 years,” Boteju said, signaling that machine learning, intelligent automation and chatbots are things traditional lenders have been “doing for a while.”

    Generative AI, on the other hand, is a more nascent technology, according to the Lloyds exec. The bank is increasingly thinking about how to scale that technology — but by “using the current frameworks and infrastructure we’ve got,” rather than by moving the needle significantly.

    The banking sector 'is very conservative' around competition, says Bunq CEO

    Boteju and Achtner’s comments tally with what other AI leaders of financial services have said previously. Speaking with CNBC last week, Bahadir Yilmaz, chief analytics officer of ING, said that AI is unlikely to be as disruptive as firms like Klarna are suggesting with their public messaging.

    “We see the same potential that they’re seeing,” Yilmaz said in an interview in London. “It’s just the tone of communication is a bit different.” He added that ING is primarily using AI in its global contact centers and internally for software engineering.

    “We don’t need to be seen as an AI-driven bank,” Yilmaz said, adding that, with many processes lenders won’t even need AI to solve certain problems. “It’s a really powerful tool. It’s very disruptive. But we don’t necessarily have to say we are putting it as a sauce on all the food.”

    Johan Tjarnberg, CEO of Swedish online payments firm Trustly, told CNBC earlier this week that AI “will actually be one of the biggest technology levers in payments.” But even so, he noted that the firm is focusing more of the “basics of AI” than on transformative changes like AI-led customer service.

    One area where Trustly is looking to improve customer experience with AI is subscriptions. The startup is working on an “intelligent charging mechanism” that would aim to figure out the best time for a bank to take payment from a subscription platform user, based on their historical financial activity.

    Tjarnberg added that Trustly is seeing closer to 5-10% improved efficiency as a result of implementing AI within its organization.

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  • Amazon checkout process hits technical snag during Labor Day sale

    Amazon checkout process hits technical snag during Labor Day sale

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    A worker prepares packages at an Amazon same-day delivery fulfillment center on Prime Day in the Bronx borough of New York, US, on Tuesday, July 16, 2024. Amazon.com Inc.’s Prime Day sales rose about 13% in the first six hours of the event compared with the same period last year, according to Momentum Commerce, which manages 50 brands in a variety of product categories. Photographer: Stephanie Keith/Bloomberg via Getty Images

    Bloomberg | Bloomberg | Getty Images

    Amazon’s checkout function encountered technical issues on Friday, keeping customers from completing purchases. The e-commerce site displayed error messages with photos of dogs during the outage as people posted about it on social media.

    To run its website, Amazon relies on its own data center infrastructure. But the company’s Amazon Web Services division was not reporting any technical issues while the checkout feature wasn’t working. AWS downtime can lead to problems across the internet because so many companies rely on the market-leading public cloud.

    An Amazon spokesperson did not immediately respond to a request for comment.

    In the run-up to the long weekend in the U.S., Amazon has started promoting discounts on products as part of a Labor Day sale. But people weren’t able to purchase discounted products because of the glitch, as some people pointed out on the X social network.

    The Amazon Help account on X replied with a recommendation to contact the company.

    Amazon has warned investors that technical incidents can lead to lower sales and a worse perception of the company’s products and services. Sales are healthy at almost $148 billion in the second quarter.

    WATCH: Evercore ISI’s Mark Mahaney on his new top internet stock picks: Amazon, Doordash, Uber

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  • Workday stock gains as software provider widens 2027 margin target

    Workday stock gains as software provider widens 2027 margin target

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    Carl Eschenbach, co-CEO of Workday, speaking on CNBC’s “Squawk Box” at the World Economic Forum Annual Meeting in Davos, Switzerland, on Jan. 18, 2024.

    Adam Galici | CNBC

    Workday shares soared 12% on Friday, one day after the finance and human resources software maker issued fiscal second-quarter results that exceeded analysts’ estimates and announced plans to further widen its adjusted operating margin through 2027.

    Here is how the company did, compared to LSEG consensus:

    • Earnings per share: $1.75 adjusted vs. $1.65 expected
    • Revenue: $2.085 billion vs. $2.071 billion expected

    Workday’s revenue was up about 17% year over year in the quarter ending July 31, according to a statement. Subscription revenue growth grew 17%. Net income, at $132 million, or 49 cents per share, increased from $79 million, or 30 cents per share, in the same quarter a year ago.

    With respect to guidance, Workday is now looking for an adjusted operating margin of 25.25% in the 2025 fiscal year, compared to the 25% forecast it provided in May.

    On a Thursday conference call with analysts, Zane Rowe, Workday’s finance chief, said he expects the company’s adjusted operating margin to expand to 30% in the 2026 and 2027 fiscal years, along with an annual subscription revenue growth of 15%. In September 2023, Workday said it was targeting a 25% adjusted operating margin for fiscal 2027 and subscription revenue growth between 17% and 19%.

    “We are relentlessly focused on scaling all of our processes across the company as we review our product and go-to-market initiatives,” Rowe said. “We’re also becoming increasingly more targeted in our growth investments, balancing product development with go-to-market resources.”

    Deutsche Bank analysts led by Brad Zelnick increased their 12-month price target on Workday stock to $275 from $265. They have a hold rating on the stock.

    “The increased 30% operating margin target was the big upside surprise as it is now committed both sooner and greater than most were expecting,” the analysts wrote.

    Citi, Evercore ISI and Piper Sandler analysts also raised their Workday price targets following the company’s report.

    Conditions aren’t perfect for Workday, however. Organizations are still being more careful than usual before agreeing to sign contracts, Rowe said, adding that headcount growth among the existing customer base has slowed down.

    Many other software companies have pointed to rougher economic conditions in recent quarters. But on Friday, Federal Reserve Chair Jerome Powell said “the time has come for policy to adjust,” an indication that the central bank will lower its benchmark rate. That might benefit growing cloud software companies such as Workday. Investors moved away from those assets and opted for more defensive investments in 2022 as they anticipated rate hikes to ward off inflation.

    The WisdomTree Cloud Computing Fund, an exchange-traded fund that includes Workday, ended the day up 2% in Friday’s trading session. The S&P 500 index gained 1%.

    But Workday CEO Carl Eschenbach did not suggest that market conditions will improve soon.

    “In fact, we think the current environment of IT spending and the environment we’re selling into isn’t something that’s just been here the last couple quarters,” he said. “We think it’s the new norm going forward. We’re prepared because we have a great product.”

    WATCH: Software is a good small cap play because earnings are more recurring, says Julie Biel

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  • An AWS Configuration Issue Could Expose Thousands of Web Apps

    An AWS Configuration Issue Could Expose Thousands of Web Apps

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    A vulnerability related to Amazon Web Service’s traffic-routing service known as Application Load Balancer could have been exploited by an attacker to bypass access controls and compromise web applications, according to new research. The flaw stems from a customer implementation issue, meaning it isn’t caused by a software bug. Instead, the exposure was introduced by the way AWS users set up authentication with Application Load Balancer.

    Implementation issues are a crucial component of cloud security in the same way that the contents of an armored safe aren’t protected if the door is left ajar. Researchers from the security firm Miggo found that, depending on how Application Load Balancer authentication was set up, an attacker could potentially manipulate its handoff to a third-party corporate authentication service to access the target web application and view or exfiltrate data.

    The researchers say that looking at publicly reachable web applications, they have identified more than 15,000 that appear to have vulnerable configurations. AWS disputes this estimate, though, and says that “a small fraction of a percent of AWS customers have applications potentially misconfigured in this way, significantly fewer than the researchers’ estimate.” The company also says that it has contacted each customer on its shorter list to recommend a more secure implementation. AWS does not have access or visibility into its clients’ cloud environments, though, so any exact number is just an estimate.

    The Miggo researchers say they came across the problem while working with a client. This “was discovered in real-life production environments,” Miggo CEO Daniel Shechter says. “We observed a weird behavior in a customer system—the validation process seemed like it was only being done partially, like there was something missing. This really shows how deep the interdependencies go between the customer and the vendor.”

    To exploit the implementation issue, an attacker would set up an AWS account and an Application Load Balancer, and then sign their own authentication token as usual. Next, the attacker would make configuration changes so it would appear their target’s authentication service issued the token. Then the attacker would have AWS sign the token as if it had legitimately originated from the target’s system and use it to access the target application. The attack must specifically target a misconfigured application that is publicly accessible or that the attacker already has access to, but would allow them to escalate their privileges in the system.

    Amazon Web Services says that the company does not view token forging as a vulnerability in Application Load Balancer because it is essentially an expected outcome of choosing to configure authentication in a particular way. But after the Miggo researchers first disclosed their findings to AWS at the beginning of April, the company made two documentation changes geared at updating their implementation recommendations for Application Load Balancer authentication. One, from May 1, included guidance to add validation before Application Load Balancer will sign tokens. And on July 19, the company also added an explicit recommendation that users set their systems to receive traffic from only their own Application Load Balancer using a feature called “security groups.”

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  • Banks face tough new security standards in the EU — their tech suppliers are under scrutiny, too

    Banks face tough new security standards in the EU — their tech suppliers are under scrutiny, too

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    Traffic_analyzer | Digitalvision Vectors | Getty Images

    Financial services companies and their digital technology suppliers are under intense pressure to achieve compliance with strict new rules from the EU that require them to boost their cyber resilience.

    By the start of next year, financial services firms and their technology suppliers will have to make sure that they’re in compliance with a new incoming law from the European Union known as DORA, or the Digital Operational Resilience Act.

    CNBC runs through what you need to know about DORA — including what it is, why it matters, and what banks are doing to make sure they’re prepared for it.

    What is DORA?

    DORA requires banks, insurance companies and investment to strengthen their IT security. The EU regulation also seeks to ensure the financial services industry is resilient in the event of a severe disruption to operations.

    Such disruptions could include a ransomware attack that causes a financial company’s computers to shut down, or a DDOS (distributed denial of service) attack that forces a firm’s website to go offline. 

    The regulation also seeks to help firms avoid major outage events, such as the historic IT meltdown last month caused by cyber firm CrowdStrike when a simple software update issued by the company forced Microsoft’s Windows operating system to crash

    Multiple banks, payment firms and investment companies — from JPMorgan Chase and Santander, to Visa and Charles Schwab — were unable to provide service due to the outage. It took these firms several hours to restore service to consumers.

    In the future, such an event would fall under the type of service disruption that would face scrutiny under the EU’s incoming rules.

    Mike Sleightholme, president of fintech firm Broadridge International, notes that a standout factor of DORA is that it doesn’t just focus on what banks do to ensure resiliency — it also takes a close look at firms’ tech suppliers.

    Under DORA, banks will be required to undertake rigorous IT risk management, incident management, classification and reporting, digital operational resilience testing, information and intelligence sharing in relation to cyber threats and vulnerabilities, and measures to manage third-party risks.

    Firms will be required to conduct assessments of “concentration risk” related to the outsourcing of critical or important operational functions to external companies.

    These IT providers often deliver “critical digital services to customers,” said Joe Vaccaro, general manager of Cisco-owned internet quality monitoring firm ThousandEyes.

    “These third-party providers must now be part of the testing and reporting process, meaning financial services companies need to adopt solutions that help them uncover and map these sometimes hidden dependencies with providers,” he told CNBC.

    Banks will also have to “expand their ability to assure the delivery and performance of digital experiences across not just the infrastructure they own, but also the one they don’t,” Vaccaro added.

    When does the law apply?

    DORA entered into force on Jan. 16, 2023, but the rules won’t be enforced by EU member states until Jan. 17, 2025.

    The EU has prioritised these reforms because of how the financial sector is increasingly dependent on technology and tech companies to deliver vital services. This has made banks and other financial services providers more vulnerable to cyberattacks and other incidents.

    “There’s a lot of focus on third-party risk management” now, Sleightholme told CNBC. “Banks use third-party service providers for important parts of their technology infrastructure.”

    “Enhanced recovery time objectives is an important part of it. It really is about security around technology, with a particular focus on cybersecurity recoveries from cyber events,” he added.

    Many EU digital policy reforms from the last few years tend to focus on the obligations of companies themselves to make sure their systems and frameworks are robust enough to protect against damaging events like the loss of data to hackers or unauthorized individuals and entities.

    The EU’s General Data Protection Regulation, or GDPR, for example, requires companies to ensure the way they process personally identifiable information is done with consent, and that it’s handled with sufficient protections to minimize the potential of such data being exposed in a breach or leak.

    DORA will focus more on banks’ digital supply chain — which represents a new, potentially less comfortable legal dynamic for financial firms.

    What if a firm fails to comply?

    For financial firms that fall foul of the new rules, EU authorities will have the power to levy fines of up to 2% of their annual global revenues.

    Individual managers can also be held responsible for breaches. Sanctions on individuals within financial entities could come in as high a 1 million euros ($1.1 million).

    For IT providers, regulators can levy fines of as high as 1% of average daily global revenues in the previous business year. Firms can also be fined every day for up to six months until they achieve compliance.

    Third-party IT firms deemed “critical” by EU regulators could face fines of up to 5 million euros — or, in the case of an individual manager, a maximum of 500,000 euros.

    Seeing complete disconnect between EU and U.S. bank regulation, says analyst

    That’s slightly less severe than a law such as GDPR, under which firms can be fined up to 10 million euros ($10.9 million), or 4% of their annual global revenues — whichever is the higher amount.

    Carl Leonard, EMEA cybersecurity strategist at security software firm Proofpoint, stresses that criminal sanctions may vary from member state to member state depending on how each EU country applies the rules in their respective markets.

    DORA also calls for a “principle of proportionality” when it comes to penalties in response to breaches of the legislation, Leonard added.

    That means any response to legal failings would have to balance the time, effort and money firms spend on enhancing their internal processes and security technologies against how critical the service they’re offering is and what data they’re trying to protect.

    Are banks and their suppliers ready?

    Stephen McDermid, EMEA chief security officer for cybersecurity firm Okta, told CNBC that many financial services firms have prioritized using existing internal operational resilience and third-party risk programs to get into compliance with DORA and “identify any gaps they may have.”

    “This is the intention of DORA, to create alignment of many existing governance programs under a single supervisory authority and harmonise them across the EU,” he added.

    Fredrik Forslund vice president and general manager of international at data sanitization firm Blancco, warned that though banks and tech vendors have been making progress toward compliance with DORA, there’s still “work to be done.”

    On a scale from one to 10 — with a value of one representing noncompliance and 10 representing full compliance — Forslund said, “We’re at 6 and we’re scrambling to get to 7.”

    “We know that we have to be at a 10 by January,” he said, adding that “not everyone will be there by January.”

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  • San Francisco’s AI boom can’t stop real estate slide, as office vacancies reach new record

    San Francisco’s AI boom can’t stop real estate slide, as office vacancies reach new record

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    Artificial intelligence has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market.

    The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.

    Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.

    San Francisco is reeling from the twin challenges of bringing people back to the office after the Covid pandemic and a slowdown in the tech market that’s led to mass job cuts across the industry. Tech companies have laid off more than 530,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet, Meta, Amazon, Tesla, Microsoft and Salesforce.

    Softening the blow of late has been the soaring popularity of generative AI and the decision by fast-growing startups to open large offices in San Francisco.

    OpenAI, the market leader with a private valuation that’s topped $80 billion, announced in October that it was leasing about 500,000 square feet of space in the Mission Bay neighborhood, the biggest office lease in the city since 2018. Robert Sammons, senior research director at Cushman & Wakefield, said OpenAI is continuing to look for more space in the city.

    Also last year, OpenAI rival Anthropic subleased 230,000 square feet at Slack’s headquarters. And in May of this year, Scale AI signed a lease for a reported 170,000 to 180,000 square feet of space in Airbnb’s office building.

    “San Francisco is certainly the center of AI, but AI is not going to save the San Francisco commercial real estate market,” Sammons said. “It will help.”

    While richly capitalized AI startups are signing large leases for new space, the bigger trend is that tech companies, law offices and consulting firms are looking to reduce their footprint when existing leases come up, Sammons said, reflecting the widespread move to hybrid work.

    In many cases, companies are looking to relocate to higher quality space in more desirable parts of the city, because prices have come down and employers need to be near restaurants and shops to get staffers to come back, Sammons added.

    “The best quality trophy space continues to perform well, because tenants want to be in the best locations with the best amenities around them,” Sammons said.

    Some of the city’s top employers, including Salesforce, Uber, Visa and Wells Fargo, have brought employees back to offices for part of the week. That’s helped in the financial district, where the vacancy rate is still 34.2% on the north side and 32.7% on the south side at the end of the quarter. In SoMa, which historically was a popular area for venture-backed startups, the vacancy rate is almost 50%.

    SoMa is further away from mass transit options and has also been hurt by large retail departures. Vacant office space across San Francisco for the quarter totaled 29.6 million square feet, Cushman & Wakefield said.

    The firm said in its report that there are positive signs in the market, with absorption poised to improve in the second half and office job numbers stabilizing following a steep drop-off. But Sammons said it looks like there’s more room for rents to fall and for vacancies to rise. Uncertainty surrounding the upcoming presidential election may be a factor delaying new leases, he said.

    “Sometimes tenants postpone making decisions when there are major elections,” he said.

    WATCH: Commercial real estate vacancies in San Francisco are at an all-time high

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  • Amazon is doubling value of credits for some startups to build on AWS as Microsoft cloud gains ground

    Amazon is doubling value of credits for some startups to build on AWS as Microsoft cloud gains ground

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    Amazon will double the value of credits it offers some startups to use its cloud infrastructure, CNBC has learned, as the company faces heightened competition from Microsoft in artificial intelligence services.

    Starting July 1, startups that have raised a Series A round of funding in the past year will be eligible for $200,000 in credits through AWS’ Activate program, up from $100,000 before, the Amazon cloud unit said in an email to venture capitalists this week. Seed-stage startups will still be eligible for $100,000 in credits, AWS said.

    Two people briefed on the changes confirmed the credit increase, though they asked not to be named because the information is private.

    Matt Garman, who was recently promoted to CEO of AWS after running sales and marketing, was meeting with founders in Silicon Valley this week, the people said. Garman told the execs that collaborating with startups would always be a primary focus, one of the people said, adding that Garman described AI companies as AWS’ ideal customers.

    An AWS spokesperson confirmed the increase in credits and Garman’s visit to Silicon Valley. The spokesperson added that in the past, the $100,000 would expire in one year, while the $200,000 credit will now expire in three years.

    Amazon, which is best known for its massive online retail operation, derives most of its profit from AWS, a business it launched in 2006, well before rivals Microsoft and Google hit the scene. AWS leads the market, with $25 billion in revenue in the first quarter, up 17% from a year earlier.

    But Microsoft Azure and Google Cloud are growing more quickly, and are benefiting from rapidly advancing AI models. Backed by Microsoft, OpenAI launched ChatGPT in late 2022 on Azure, and has since attracted a wave of AI workloads to Microsoft from companies big and small. Google has a number of large language models, most notably Gemini.

    Amazon has been trying to catch up in generative AI and has poured billions of dollars into OpenAI challenger Anthropic.

    Last month, AWS CEO Adam Selipsky announced his resignation after three years running the business, with Garman named as his successor. During Selipsky’s time at the helm, Microsoft and Google increased their share of the cloud infrastructure market. One analyst told CNBC that Microsoft “ran laps around” AWS in generative AI.

    Startups have long been fertile ground for cloud infrastructure companies, as they try and lure ambitious founders who could be building the next multibillion-dollar business.

    In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator that would provide participating startups with $350,000 in Azure credits and access to graphics processing units (GPUs) for training AI models, a spokesperson said. Microsoft has since extended the $350,000 credit incentive to other accelerators, including the AI Grant.

    Startups enrolled in Microsoft’s Founders Hub program, which doesn’t require previous venture funding, can receive up to $150,000 in Azure credits over four years.

    In addition to its Activate offering, Amazon has a new 10-week generative AI accelerator program. Participants will be able to access up to $1 million in cloud credits, according to the website.

    Earlier on Friday, Amazon’s head scientist, Rohit Prasad, told employees that the company has hired David Luan, co-founder and CEO of AI startup Adept, along with some of Luan’s colleagues. “Amazon is also licensing Adept’s agent technology, family of state-of-the-art multimodal models, and a few datasets,” Adept said in a blog post.

    WATCH: AWS will boost investments in Singapore’s cloud infrastructure by $9 billion

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  • Oracle warns that a TikTok ban would hurt business

    Oracle warns that a TikTok ban would hurt business

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    Oracle CEO Safra Catz, center, departs following a meeting on Capitol Hill in Washington on June 18, 2024. Chief executives from major companies including Palantir Technologies and Oracle Corp. met with senators at the Capitol Tuesday to press for US support of Israel amid its invasion of Gaza, while seeking a way to release hostages held by Hamas.

    Graeme Sloan | Bloomberg | Getty Images

    A U.S. ban of TikTok might hurt Oracle‘s business, the software company acknowledged in its annual report on Monday.

    In April, President Joe Biden signed a bill demanding that China’s ByteDance sell TikTok in nine months, or one year if an extension is approved, if the short-video company wants to avoid a ban in the U.S. TikTok’s ownership structure has long been a source of tension in the U.S. due to concerns about user data making its way to China.

    Oracle provides cloud infrastructure for TikTok, which has over 150 million users in the U.S.

    “If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted,” Oracle said in its annual report for the fiscal year ended May 31.

    Concern over TikTok and its Chinese ownership dates back to 2020, when Donald Trump, who was then president, pushed for a sale or divestiture of the U.S. assets. That pressure prompted deal talks with Microsoft. Weeks later, Oracle announced that it was part of ByteDance’s proposal to the U.S. Treasury Department to provide cloud services that could help TikTok remain available in the U.S.

    TikTok moved forward with an initiative called Project Texas, designed to keep TikTok services for U.S. users running on Oracle cloud infrastructure located inside the country. TikTok said Oracle would also be responsible for compiling the app and delivering it to third-party app stores.

    “The one thing I can tell you is we have an excellent relationship with the folks at TikTok,” Oracle CEO Safra Catz said on a 2022 conference call with analysts.

    Following the bipartisan legislation this year targeted at TikTok, and Biden’s signing of the bill mandating its sale, TikTok filed a lawsuit arguing that the law violates First Amendment free speech protections.

    Real estate investor Frank McCourt and former Treasury Secretary Steven Mnuchin have expressed interest in buying TikTok, but no deal has materialized.

    Oracle hasn’t disclosed details of its financial ties to TikTok. Evercore analysts estimated in April that if TikTok is generating sales of $16 billion in the U.S. annually, it could be spending 3% to 5% as a percentage of revenue on cloud infrastructure, which would work out to $480 million to $800 million. Oracle’s cloud infrastructure revenue for the fiscal year came to $6.9 billion.

    TikTok didn’t immediately respond to a request for comment.

    WATCH: Investors want to see a sale of TikTok, says Carnegie’s Peter Harrell

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  • Citizens to launch an ERP tool | Bank Automation News

    Citizens to launch an ERP tool | Bank Automation News

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    Citizens Bank is looking to add new digital banking solutions for small- and medium-sized businesses to its new Cash Flow Forecasting platform.  To keep up with SMB demand for insights and tools, the Providence, R.I.-based bank will add an enterprise resource planning (ERP) tool to its Cash Flow Forecasting platform later this year, Mark Valentino, […]

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