ReportWire

Tag: Microsoft

  • The Best (And Worst) Xbox 360 Moments – Kotaku

    It’s been over a year since Microsoft shut down the Xbox 360’s digital store, effectively putting the final nail in the beloved console’s coffin. While it’s a shame that the decades-old console’s marketplace is gone, it doesn’t take away from the Xbox 360’s legacy as a popular, innovative, and weird machine that paved the way for the current era of gaming.

    For better and for worse, when Microsoft’s Xbox 360 launched in 2005 it changed video games forever. And now seems like a perfect time to take a look back at the best and worst parts of its run.

    This article was originally published on Jul 31, 2024. We’re re-posting it today in honor of the Xbox 360’s 20th anniversary. 

    Zack Zwiezen

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  • Microsoft isn’t releasing a diversity report for 2025

    Microsoft will not release a diversity and inclusion report for 2025 like it has been doing every year since 2019, Stephen Totilo from Game File has reported. Totilo asked the company if it was skipping this year after it failed to publish a report from October to early November like it had done so the previous years. “We are not doing a traditional report this year as we’ve evolved beyond that to formats that are more dynamic and accessible — stories, videos, and insights that show inclusion in action,” said Microsoft’s chief communications officer, Frank Shaw, in a statement. “Our mission and commitment to our culture and values remain unchanged: empowering every person and organization to achieve more.”

    As Totilo notes, the Trump administration made it very clear early on that it was against government and corporate diversity, equality and inclusion programs. Trump signed executive orders directing government agencies to roll back DEI initiatives and encouraged the private sector to do the same. Meta reportedly ended its DEI programs earlier this year, while Google reportedly announced that it will “no longer set hiring targets to improve representation in its workforce.”

    Totilo previously reported that Microsoft didn’t mention anything about its diversity programs in two shareholder reports for 2025, signifying that the company wasn’t highlighting its DEI initiatives anymore like it did the previous years. Based on its statement, Microsoft isn’t completely dropping its DEI efforts. Without a report, however, we can’t keep an eye on its progress when it comes to things like pay equality and workforce diversity.

    Mariella Moon

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  • Washington man spent 31 years at Microsoft only to be fired on a call with 120 others. Here’s how he’s rebuilding at 60

    Thousands of Microsoft workers have been laid off in the past year, and Washington resident Mike Kostersitz is just one of them. After spending 31 years at Microsoft, he’s now looking for a job for the first time in more than three decades.

    In May, the 60-year-old principal product manager lead said a new high-priority meeting appeared on his calendar out of nowhere.

    “Me and 120 other anonymous faces got told our jobs had been eliminated,” he told Business Insider (1). The layoff came as a complete surprise. “After 31 years, you would expect at least your manager or your VP or somebody to come to you and say, ‘Hey Mike, this is going to happen and here is why.’”

    A few years ago Kostersitz presented an ‘architectural deep dive” in a YouTube video and introduced himself as a PM lead on the Azure Kubernetes Service on Azure Stack HCI (AKS-HCI) team (2).

    Kostersitz is among thousands of tech workers suddenly forced to navigate an unfamiliar job market reshaped by automation, AI and an industry-wide slowdown.

    The good news is that he recently shared on LinkedIn that “something exciting is brewing” and he is feeling “grateful, fired up and ready to lace up for what’s ahead.”

    Microsoft’s layoffs are part of a larger trend. In recent months, Amazon, Meta, and Alphabet have all trimmed their workforces. Amazon cut 14,000 jobs in October, citing a shift toward AI automation. Meta eliminated roughly 600 roles in its “superintelligence” division, while Alphabet reduced staff in its cloud unit.

    According to executive outplacement firm Challenger, Gray & Christmas, cost-cutting and AI were the top reasons employers cited for job reductions in October (3). The so-called “DOGE impact” is the leading reason cited for layoffs in 2025 overall.

    The tech industry announced 33,281 job cuts in October 2025 — a sharp jump from 5,639 in September, and the highest number recorded across any private sector that month. For all of 2025, tech firms have announced 141,159 job cuts, up 17% from the same period in 2024.

    While overall U.S. unemployment remains relatively low, it has risen since the start of the year. It would appear competition for tech roles has intensified. Reports suggest thousands of skilled professionals are now competing for fewer openings, often requiring updated skill sets in AI, data science and automation.

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  • US Border Patrol Is Spying on Millions of American Drivers

    Eight years after a researcher warned WhatsApp that it was possible to extract user phone numbers en masse from the Meta-owned app, another team of researchers found that they could still do exactly that using a similar technique. The issue stems from WhatsApp’s discovery feature, which allows someone to enter a person’s phone number to see if they’re on the app. By doing this billions of times—which WhatsApp did not prevent—researchers from the University of Vienna uncovered what they’re calling “the most extensive exposure of phone numbers” ever.

    Vaping is a major problem in US high schools. But is the solution to spy on students in the bathroom? An investigation by The 74, copublished with WIRED, found that schools around the country are turning to vape detectors in an effort to crack down on nicotine and cannabis consumption on school grounds. Some of the vape detectors go far beyond detecting vapor by including microphones that are surprisingly accurate and revealing. While few defend addiction and drug use, even non-vapers say the added surveillance and the punishments that result go too far.

    Don’t look now, but that old networking equipment your company hasn’t thought about in years may jump out and bite you. Tech giant Cisco this week launched a new initiative, warning companies that AI tools are making it increasingly simple for attackers to find vulnerabilities in outdated and unpatched networking infrastructure. The message: Upgrade or else.

    If you’ve ever attended a conference, you probably worried about getting sick in the cesspools that are a conference center. But one hacker conference in New Zealand, Kawaiicon, invented a novel way to keep attendees a little bit safer. By tracking the CO2 levels in each conference room, Kawaiicon’s organizers were able to create a real-time air-quality monitoring system, which would tell people which rooms were safe and which seemed … gross. The project brings new meaning to antivirus monitoring.

    And that’s not all. Each week, we round up the security and privacy news we didn’t cover in depth ourselves. Click the headlines to read the full stories. And stay safe out there.

    The US Border Patrol is operating a predictive-intelligence program that monitors millions of American drivers far beyond the border, according to a detailed investigation by the Associated Press. A network of covert license-plate readers—often hidden inside traffic cones, barrels, and roadside equipment—feeds data into an algorithm that flags “suspicious” routes, quick turnarounds, and travel to and from border regions. Local police are then alerted, resulting in traffic stops for minor infractions like window-tint violations, air fresheners, or marginal speeding. AP reviewed police records showing that drivers were questioned, searched, and sometimes arrested despite no contraband being found.

    Internal group chats obtained through public-records requests show Border Patrol agents and Texas deputies sharing hotel records, rental car status, home addresses, and social media details of US citizens in real time while coordinating what officers call “whisper stops” to obscure federal involvement. The AP identified plate-reader sites more than 120 miles from the Mexican border in the Phoenix area, as well as locations in metropolitan Detroit and near the Michigan-Indiana line that capture traffic headed toward Chicago and Gary. Border Patrol also taps DEA plate-reader networks and has, at various times, accessed systems run by Rekor, Vigilant Solutions, and Flock Safety.

    CBP says the program is governed by “stringent” policies and constitutional safeguards, but legal experts told AP that its scale raises new Fourth Amendment concerns. A UC Law San Francisco official said the system amounts to a “dragnet” tracking Americans’ movements, associations, and daily routines.

    Microsoft claims to have mitigated the largest distributed denial-of-service (DDoS) attack ever recorded in a cloud environment—a 15.72 Tbps, 3.64-billion-pps barrage launched on October 24 against a single Azure endpoint in Australia. Microsoft says The attack “originated from the Aisuru botnet,” a Turbo-Mirai–class IoT network of compromised home routers, cameras, and other consumer devices. More than 500,000 IP addresses are said to have participated, generating a massive DDoS attack with little spoofing. Microsoft says its global Azure DDoS Protection network absorbed the traffic without service disruption. Microsoft described the attack as the “the largest DDoS ever observed in the cloud,” emphasizing the single endpoint; however, Cloudflare also recently reported a 22.2 Tbps flood, naming it the largest DDoS attack ever seen.

    Researchers note that Aisuru has recently launched multiple attacks exceeding 20 Tbps and is expanding its capabilities to include credential stuffing, AI-driven scraping, and HTTPS floods via residential proxies.

    The US Securities and Exchange Commission has dropped its remaining claims against SolarWinds and its CISO, Tim Brown, ending a long-running case over the company’s 2020 supply-chain hack, in which Russian SVR operatives allegedly compromised SolarWinds’ Orion software and triggered widespread breaches across government and industry. The agency’s lawsuit—filed in 2023 and centered on alleged fraud and internal-control failures—had already been mostly dismantled by a federal judge in 2024. SolarWinds called the full dismissal a vindication of its argument that its disclosures and conduct were appropriate and said it hopes the outcome eases concerns among CISOs about the case’s potential chilling effect.

    Law enforcement records show that the FBI accessed messages from a private Signal group used by New York immigration court-watch activists—a network that coordinates volunteers monitoring public hearings at three federal immigration courts. According to a two-page FBI/NYPD “joint situational information report” dated August 28, 2025, agents quoted chat messages, labeled the nonviolent court watchers as “anarchist violent extremist actors,” and circulated the assessment nationwide. The report did not explain how the FBI penetrated an encrypted Signal group, but it claimed the information came from a “sensitive source with excellent access.”

    The documents, first reported by the Guardian, were original obtained by the government-transparency group Property of the People. They describe activists discussing how to enter courtrooms, film officers, and gather identifying details of federal personnel, but provide no evidence to support the FBI’s allegation that a member previously advocated violence. A separate set of records—also obtained by the group—shows the bureau framed ordinary observation of public immigration hearings as a potential threat, even as Immigration and Customs Enforcement has escalated courthouse arrests and set what advocates call “deportation traps.” Civil liberties experts told the paper that the surveillance mirrors earlier FBI campaigns targeting lawful dissent and risks chilling protected political activity.

    Dell Cameron, Andrew Couts

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  • Verizon Begins Laying Off Thousands of Workers

    Telecom giant Verizon has begun laying off some 13,000 employees as part of a new reorganization initiative. Approximately a week ago, the Wall Street Journal reported that Verizon was considering job cuts. Now, the layoffs have begun, according to an email viewed by Gizmodo.

    “Our current cost structure limits our ability to invest significantly in our customer value proposition,” wrote Verizon’s new-ish CEO, Dan Schulma, in an email sent Thursday and shared with Gizmodo (the Journal originally reported on the email). “We must reorient our entire company around delivering for and delighting our customers,” the top executive added.

    Yes, to “delight” customers, the company must apparently very much not delight its workforce. Schulman, who took over the top spot in October, said in the email that the layoffs would reduce Verizon’s “outsourced and outside labor expenses.” To help the workers who are losing their jobs, Verizon has established a $20 million Reskilling and Career Transition Fund, Schulman said. This fund will “focus on skill development, digital training and job placement to help our people take their next steps,” he shared.

    The CEO added that technological change was sweeping through the economy. “Changes in technology and in the economy are impacting the workforce across all industries,” he wrote. “Change is necessary, but it can be difficult—especially when it affects valued teammates. It’s important that we direct our energy and resources to set Verizon on a path to success. The actions we’re taking are designed to make us faster and more focused, positioning our company to deliver for our customers while continuing to capture new growth opportunities.”

    When it comes to job security, this has been a tough year for tech workers. Amazon recently announced 14,000 layoffs, Accenture and Synopsis have announced thousands of layoffs, Microsoft, Salesforce, and Oracle have made similarly dour announcements, and Intel has promised to reduce its workforce by a whopping 25,000. There are many other tech companies that have made similar moves over the last twelve months.

    Yes, lots and lots of people are getting fired right now, and, according to reports, it’s increasingly difficult for entry-level workers to find positions. Some people blame AI (which is promising to help America’s C-suite gut certain segments of their corporate workforce) while others merely blame our shitty economy, which seems to be suffering under the yoke of the Trump administration’s dopy fiscal policies. There’s no reason why both can’t be to blame. Whatever the cause, one thing is clear: Silicon Valley is in its downsizing era, and it’s not so much fun.

    Lucas Ropek

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  • This 26-year-old was laid off from his ‘dream job’ at PwC building AI agents. He’s worried the tech he built has led to more job cuts | Fortune

    Titans of industry like Salesforce, Microsoft, and Intel have all been slashing staff, and employees are hand-wringing about being next on the chopping block. Donald King, a 26-year-old who built AI agents for PwC, never thought he’d be the next one out the door—but he soon realized why consultants are called “hatchet-men.”

    After graduating with a degree in finance from the University of Texas at Austin in 2021, King landed a job at one of the “Big Four” consulting giants: PwC. He packed his bags and moved to New York to start his role as an associate in technology consulting, working with major clients, including Oracle, during his first year. But everything changed when PwC announced a $1 billion investment in AI; King was already intrigued by the tech, so he pitched himself to join the company’s AI factory team. Working 60 to 80 hours a week, he immersed himself in the tech, even throwing knowledge-sharing AI agent block parties within the firm that drew up to 250 participants. King logged a ton of hours—sometimes at the expense of his weekends—but was confident he was excelling in his role as a product manager and data scientist.

    “I was coding and managing a team onshore and offshore. It was crazy, it’s like, ‘Give this 24-year-old millions of dollars of salary spent per month to build AI agents for Fortune 500 [companies],’” King tells Fortune. “[It was] my dream job…I won first place in this OpenAI hackathon across the entire firm.”

    Although King was proving himself as a key AI talent for PwC, he did begin to question the impact of his work. The AI agents King was building for major corporations could undoubtedly automate swaths of human roles—perhaps even entire job departments. One Microsoft Teams agent his group created mimicked an actual person, and King was a little spooked. 

    “We had a late night call with all the boys that are building this thing, like, ‘What the hell are we building right now?’” King says. “Just saying ‘Treat them like humans’ is probably not the best way to think about it.”

    Behind the scenes, a layoff was brewing—but this time, for King. In October 2024, just eight months into his final role at PwC, the Gen Zer presented his winning project from the OpenAI hackathon: a fleet of AI agents that automated manual tasks. King was proud and felt confident in his place at the firm, but two hours later, PwC called King to inform him he was being laid off. The 26-year-old recorded the meeting and posted it on TikTok, raking up more than 75,000 likes and 2.1 million views. Commenters under his videos expressed shock that King would be let go after winning the hackathon.

    “I thought I was safe, especially after I won first place,” King says. “I just got a little blindsided.”

    King clarifies he doesn’t think there were any “nefarious” intentions behind his layoff, reasoning he was likely a random staffer dismissed after the firm had overhired in previous years. However, he does connect the dots between the AI agents he built for PwC customers and the layoffs that soon ensued at those client companies. 

    Fortune reached out to PwC for comment. 

    King believes his AI agents may have been connected to layoffs 

    While King doesn’t believe his former role at PwC was automated, he recognizes that the AI agents he built likely had an impact on others. The year after his layoff, King observed that some of the Fortune 500 clients he served were implementing staffing cuts. Those AI agents he helped create may have had a hand in the layoffs. 

    “It’s 100% connected,” King says. “I knew that consulting was a hatchet-man type job, I knew you’re going in to potentially lay people off, but I didn’t think it was going to be like this.”

    While King believes AI agents are akin to the reasoning power of a five-year-old, they still know “all the corpus of information in the world” and can automate mundane tasks. Oftentimes, that means entry-level jobs are most at risk of being disrupted. 

    “It’s automating tasks, 100%, those are gone,” King says. “If your job is doing those menial types of things, if you’re just emailing a spreadsheet back and forth, you can kiss your job goodbye.”

    Pivoting to his new life purpose: founding a marketing agency 

    While being on PwC’s AI team may have once been his dream job, the layoff didn’t crush his spirit. 

    “I’m grateful for it happening…It was the worst thing that ever happened to me, but then it turned into the best thing,” King says. “Overall, [I’m] very grateful that I got laid off.”

    In the aftermath of being let go, King says he was inundated with job offers from major tech companies to join their AI operations. However, the scrappy young entrepreneur sidelined the idea of returning to a nine-to-five gig; instead, King started his own marketing agency, AMDK. The business officially launched in December last year, less than two months after being laid off from PwC. 

    So far, King says AMDK has roped in clients ranging from small companies to billion-dollar enterprises, many of whom are looking for AI agents of their own. His end goal is to build a swarm of agents that help companies with their back ends—but after his experience on PwC’s AI team, he says he’s being cautious about the ramifications of his creations. He’s still learning the ropes of entrepreneurship, but wouldn’t trade the highs and lows for a salaried corporate job.

    “This is my purpose in life, versus this is someone else’s purpose,” King says. “[I’m] way happier.”

    Emma Burleigh

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  • Microsoft’s Agent 365 Wants to Help You Manage Your AI Bot Army

    A new tool from Microsoft called Agent 365 is designed to help businesses control their growing collection of robotic helpers.

    Agent 365 is not a platform for making enterprise AI tools; it’s a way to manage them, as if they were human employees. Companies using generative AI agents in their digital workplace can use Agent 365 to organize their growing sprawl of bots, keep tabs on how they’re performing, and tweak their settings. The tool is rolling out today in Microsoft’s early access program.

    Essentially, Microsoft created a trackable workspace for agents. “Tools that you use to manage people, devices, and applications today, you’d want to extend them to run agents as well in the future,” says Charles Lamanna, a president of business and industry for Microsoft’s Copilot, its AI chatbot.

    Lamanna envisions a future where companies have many more agents performing labor than humans. For example, if a company has 100,000 employees, he sees them as using “half a million to a million agents,” ranging in tasks from simple email organization to running the “whole procurement process” for a business. He claims Microsoft internally uses millions of agents.

    This army of bots, with permission to take actions inside a company’s software and automate aspects of an employee’s workflow, could quickly grow unwieldy to track. A lack of clear oversight could also open businesses up to security breaches. Agent 365 is a way to manage all your bots, whether those agents were built with Microsoft’s tools or through a third-party platform.

    Agent 365’s core feature is a registry of an organization’s active agents all in one place, featuring specific identification numbers for each and details about how they are being used by employees. It’s also where you can change the settings for agents and what aspects of a business’s software each one has permission to access.

    Courtesy of Microsoft

    Reece Rogers

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  • Apple is ramping up succession plans for CEO Tim Cook and may tap this hardware exec to take over, report says | Fortune

    Apple’s board of directors and senior executives have been accelerating succession plans for Tim Cook, sources told the Financial Times.

    After serving as CEO for 14 years, Cook may step down as early as next year, the report said.

    Apple’s senior vice president of hardware engineering, 50-year-old John Ternus, is widely seen as the most likely successor, but no final decisions have been made yet, sources told the FT.

    The engineer joined Apple’s product design team in 2001 and has overseen hardware engineering for most major products the tech company has launched ever since, according to Ternus’ LinkedIn profile.

    He has also played a prominent role during Apple’s most recent keynotes, introducing products like the new iPhone Air. Ternus had been rumored to be Cook’s potential successor, according to previous reports. 

    The company is unlikely to name a new CEO before its next earnings report in late January, and an early-year announcement would allow a new leadership team time to settle in before its annual events, the FT said. 

    The succession preparations have been long-planned and are not related to the company’s current performance, which is expecting strong end-of-year sales, people close to Apple told the FT.

    Apple did not immediately respond to Fortune’s request for comment and declined to provide a comment to the FT.

    The $4 trillion company is expecting year-on-year revenue growth of 10% to 12% for its holiday quarter ending in December, fueled by the release of the iPhone 17 model in September.

    Ternus would take the helm of the tech giant at an important time in its evolution. Although Apple has seen sales success with iPhones and new products like Airpods over the past couple of decades, it has struggled to break into AI and keep up with rivals.

    Instead, Apple has even spending significantly less in AI investments compared to Mark Zuckerberg’s Meta, Amazon, Alphabet, and Microsoft. 

    Apple has been criticized by analysts this year for not having a clear AI strategy. And despite approving a multibillion-dollar budget to run its own models via the cloud in 2026, it was reported in June that Apple is even considering using models from OpenAI and Anthropic to power its updated version of Siri, rather than using technology the company has built in-house. 

    Its AI-enabled Siri, originally slated for 2025, will be delayed until 2026 or later due to a series of technical challenges, the company announced earlier this year.

    Apple has also lost a number of senior AI team members since January, many of whom have joined Meta’s AI and Superintelligence Labs during talent poaching wars this year. The exodus of Apple’s AI execs included Ruoming Pang, former head of Apple’s foundation models and core generative AI team, who joined Meta with a compensation package reportedly worth $200 million.

    The company is also dealing with increased competition from one of its most influential former employees.

    In May, Sam Altman’s OpenAI acquired startup io for about $6.5 billion, bringing in former Apple chief designer Jony Ive to build AI devices. The 58-year-old designer was instrumental in creating the iPhone, iPod, and iPad. 

    Cook, Apple’s former operations chief, turned 65 this month. He has grown the company’s market capitalization to $4 trillion from $350 billion in 2011, when he took over the CEO role from company co-founder Steve Jobs.

    Under Cook, Apple became the first publicly traded company to reach $1 trillion in market capitalization in 2018—then it became the first company to reach $3 trillion in market cap in 2022.

    But more recently, its stock price has been lagging behind Big Tech rivals Alphabet, Nvidia, and Microsoft, though Apple is trading close to an all-time high after strong earnings were reported in October.

    Apple has also dealt with tariff complications as U.S.-China trade tensions have disrupted its supply chain.

    Cook has previously said he’d prefer an internal candidate to replace him, adding that the company has “very detailed succession plans.”

    “I really want the person to come from within Apple,” Cook told singer Dua Lipa last year on her podcast At Your Service.

    Nino Paoli

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  • Leaked documents shed light into how much OpenAI pays Microsoft | TechCrunch

    After a year of frenzied dealmaking and rumors of an upcoming IPO, the financial scrutiny into OpenAI is intensifying. Leaked documents obtained by tech blogger Ed Zitron provide more of a glimpse into OpenAI’s financials — specifically its revenue and compute costs over the past couple of years.  

    Zitron reported this week that in 2024, Microsoft received $493.8 million in revenue share payments from OpenAI. In the first three quarters of 2025, that number jumped to $865.8 million, according to documents he viewed.

    OpenAI reportedly shares 20% of its revenue with Microsoft as part of a previous deal where the software giant invested over $13 billion in the powerful AI startup. (Neither the startup nor the people in Redmond have publicly confirmed this percentage.)

    However, this is where things get a little sticky, because Microsoft also shares revenue with OpenAI, kicking back about 20% of the revenues from Bing and Azure OpenAI Service, a source familiar with the matter told TechCrunch. Bing is powered by OpenAI, and the OpenAI Service sells cloud access to OpenAI’s models to developers and businesses.  

    The source also told TechCrunch that the leaked payments refer to Microsoft’s net revenue share, not the gross revenue share. In other words, they don’t include whatever Microsoft paid to OpenAI from Bing and Azure OpenAI royalties. Microsoft deducts those figures from its internally reported revenue share numbers, according to this person.

    Microsoft doesn’t break out how much it makes from Bing and Azure OpenAI in its financial statements, so it’s difficult to estimate how much the tech giant is kicking back.

    Nevertheless, the leaked documents provide a window into the hottest company on the private markets today — and not just how much it makes in revenue, but also how much it’s spending in comparison to that revenue.  

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    So, based on that widely reported 20% revenue-share statistic, we can infer that OpenAI’s revenue was at least $2.5 billion in 2024 and $4.33 billion in the first three quarters of 2025 — but very likely to be more. Previous reports from The Information put OpenAI’s 2024 revenue at around $4 billion, and its revenue from the first half of 2025 at $4.3 billion.  

    Altman also recently said OpenAI’s revenue is “well more” than reports of $13 billion a year, will end the year above $20 billion in annualized revenue run rate (which is a projection, not guidance on actual revenue), and that the company could even hit $100 billion by 2027. 

    Per Zitron’s analysis, OpenAI may have spent roughly $3.8 billion on inference in 2024. That spend increased to roughly $8.65 billion in the first nine months of 2025. Inference is the compute used to run a trained AI model to generate responses.  

    OpenAI has historically almost exclusively relied on Microsoft Azure to provide compute access, though it has also struck deals with CoreWeave and Oracle, and more recently with AWS and Google Cloud. 

    Previous reports put OpenAI’s entire compute spend at roughly $5.6 billion for 2024 and its “cost of revenue” at $2.5 billion for the first half of 2025.  

    A source familiar with the matter told TechCrunch that while OpenAI’s training spend is mostly non-cash — meaning, paid by credits Microsoft awarded OpenAI as part of its investment — the firm’s inference spend is largely cash. (Training refers to the compute resources needed to initially train a model.)

    While not a complete picture, these numbers imply that OpenAI could be spending more on inference costs than it is earning in revenue. 

    And those implications promise to add to the incessant AI bubble chatter that has seeped into every conversation from New York City to Silicon Valley. If model giant OpenAI really still is in the red running its models, what might this mean for the massive investments at jaw-dropping valuations for the rest of the AI world?

    OpenAI declined to comment. Microsoft did not respond to TechCrunch’s request for comment.

    Got a sensitive tip or confidential documents? We’re reporting on the inner workings of the AI industry — from the companies shaping its future to the people impacted by their decisions. Reach out to Rebecca Bellan at rebecca.bellan@techcrunch.com or Russell Brandom at russell.brandom@techcrunch.com. For secure communication, you can contact them via Signal at @rebeccabellan.491 and russellbrandom.49.

    Rebecca Bellan

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  • Is Wall Street losing faith in AI? | TechCrunch

    A rough week for tech stocks might signal a loss of investor confidence in artificial intelligence.

    The Wall Street Journal reports that the Nasdaq Composite Index was down 3% — making this its worst week since President Donald Trump announced his sweeping tariff plan in April.

    Tech companies that have otherwise performed well this year were among those hardest hit, with Palantir’s stock price falling 11% this week, Oracle declining by 9%, and Nvidia losing 7%. These drops also come after earnings reports in which Meta and Microsoft indicated that they plan to continue spending heavily on AI (both companies were down about 4%). 

    “Valuations are stretched,” Cresset Capital’s Jack Ablin told the WSJ. “Just the slightest bit of bad news gets exaggerated … and good news is just not enough to move the needle because expectations are already pretty high.”

    Economic factors like the ongoing government shutdown, declining consumer sentiment, and widespread layoffs are also likely dragging down the stock market. But the less tech-heavy S&P 500 and Dow Jones Industrial Average didn’t do quite as badly, with declines of 1.6% and 1.2%, respectively.

    Anthony Ha

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  • Our Favorite Gaming Headset for Xbox Owners Is Discounted

    Looking for a great headset for your Xbox Series X or S that’s super simple to setup and use? Microsoft’s Xbox Wireless Headset is built specifically for console life, with easy setup, great spatial audio, and easy to use controls. It’s currently marked down to just $105 on Amazon, a $15 discount, and is a great choice for Xbox enthusiasts who spend most of their time gaming from the couch.

    Photograph: Brad Bourque

    Microsoft

    Xbox Wireless Gaming Headset

    My favorite thing about the Xbox Wireless Gaming Headset is that how easy it is to connect to your console. It leverages the existing wireless connection from the Xbox Series S/X to pair directly, no need for USB dongles or extra apps. Just press the pairing button on the headset and the console’s sync button, and you’re ready to game.

    I also appreciate the big volume knobs that take up the outside surface of both earcups. They’re easy to adjust even in the middle of a battle, with one side changing the volume, and the other setting the balance between game chat and communication audio. The latter is particularly useful for quick adjustments when your friends get a little too rowdy. While I wasn’t overly impressed with the mic’s quality, it sounds good enough for the price point, and more importantly, does a great job filtering out background noise, so your squad doesn’t have to hear your dog barking.

    The Xbox Wireless Gaming Headset is equipped with Dolby Atmos, as long as you’re connected to an Xbox Series S or X, and the game you’re playing supports it. It gives a massive boost to spatial audio, which is great for both shooters and immersive games, and you can tweak the settings directly from the Xbox settings menu on your console, or from the Xbox mobile app.

    While the Xbox Wireless Gaming Headset is my preferred pick for casual console gamers, there’s a whole world of other gaming headsets out there with different features like ANC or swappable batteries. Make sure to check out our full guide to see if anything else appeals to you, or take advantage of a discount on the Xbox pair to get gaming fast.

    Brad Bourque

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  • Does OpenAI’s $38 Billion Deal With Amazon Signal a Breakup With Microsoft?

    On Monday, tech giants OpenAI and Amazon Web Services (AWS) announced a multi-year partnership, marking the artificial intelligence company’s next step towards massive scaling and a step away from its long-time parter Microsoft.

    Effective immediately, OpenAI now has access to Amazon’s infrastructure as part of a seven year $38 billion deal. The agreement provides the AI company with access to hundreds of thousands of NVIDIA graphic processing units as it begins running its workload on AWS’s infrastructure.

    “As OpenAI continues to push the boundaries of what’s possible, AWS’s best-in-class infrastructure will serve as a backbone for their AI ambitions,” said Matt Garman, CEO of AWS said in a press release. 

    At the time of publishing, Amazon’s stock had jumped 5 percent following news of the announcement.

    In addition to paving the path towards rapid expansion and growth of its ChatGPT large language model and other AI initiatives, the deal also marks the AI company moving on from Microsoft, its longtime cloud services provider. However, they’re still presenting a united front.

    “As we step into this next chapter of our partnership, both companies are better positioned than ever to continue building great products that meet real-world needs, and create new opportunity for everyone and every business,” the companies said in a joint press release on October 28.

    The companies are weathering a complicated relationship, with Microsoft investing up to $13 billion in OpenAI since an initial $1 billion in 2019 that came with an exclusivity agreement to use Microsoft cloud services. Last week, both tech companies renegotiated an agreement which allowed OpenAI to buy cloud services from any provider.

    “Scaling frontier AI requires massive, reliable compute,” said OpenAI co-founder and CEO Sam Altman in a press release. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”

    The multibillion dollar deal follows a series of OpenAI investments to boost the company’s scalability and computing power, including a data center deal with Oracle, a cloud deal with Google, and a data center projects in the United Arab Emirates.

    María José Gutierrez Chavez

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  • Microsoft AI Chief Warns Pursuing Machine Consciousness Is a Gigantic Waste of Time

    Head of Microsoft’s AI division Mustafa Suleyman thinks that AI developers and researchers should stop trying to build conscious AI.

    “I don’t think that is work that people should be doing,” Suleyman told CNBC in an interview last week.

    Suleyman thinks that while AI can definitely get smart enough to reach some form of superintelligence, it is incapable of developing the human emotional experience that is necessary to reach consciousness. At the end of the day, any “emotional” experience that AI seems to experience is just a simulation, he says.

    “Our physical experience of pain is something that makes us very sad and feel terrible, but the AI doesn’t feel sad when it experiences ‘pain,’” Suleyman told CNBC. “It’s really just creating the perception, the seeming narrative of experience and of itself and of consciousness, but that is not what it’s actually experiencing.”

    “It would be absurd to pursue research that investigates that question, because they’re not [conscious] and they can’t be,” Suleyman said.

    Consciousness is a tricky thing to explain. There are multiple scientific theories that try to describe what consciousness could be. According to one such theory, posited by famous philosopher John Searle who died last month, consciousness is a purely biological phenomenon that cannot be truly replicated by a computer. Many AI researchers, computer scientists and neuroscientists also subscribe to this belief.

    Even if this theory turns out to be the truth, that doesn’t keep users from attributing consciousness to computers.

    “Unfortunately, because the remarkable linguistic abilities of LLMs are increasingly capable of misleading people, people may attribute imaginary qualities to LLMs,” Polish researchers Andrzej Porebski and Yakub Figura wrote in a study published last week, titled “There is no such thing as conscious artificial intelligence.”

    In an essay published on his blog in August, Suleyman warned against “seemingly conscious AI.”

    “The arrival of Seemingly Conscious AI is inevitable and unwelcome. Instead, we need a vision for AI that can fulfill its potential as a helpful companion without falling prey to its illusions,” Suleyman wrote.

    He argues that AI cannot be conscious and the illusion it gives of consciousness could trigger interactions that are “rich in feeling and experience,” a phenomenon that has been dubbed as “AI psychosis” in the cultural lexicon.

    There have been numerous high-profile incidents in the past year of AI-obsessions that drive users to fatal delusions, manic episodes and even suicide.

    With limited guardrails in place to protect vulnerable users, people are wholeheartedly believing that the AI chatbots they interact with almost every day are having a real, conscious experience. This has led people to “fall in love” with their chatbots, sometimes with fatal consequences like when a 14-year old shot himself to “come home” to Character.AI’s personalized chatbot or when a cognitively-impaired man died while trying to get to New York to meet Meta’s chatbot in person.

    “Just as we should produce AI that prioritizes engagement with humans and real-world interactions in our physical and human world, we should build AI that only ever presents itself as an AI, that maximizes utility while minimizing markers of consciousness,” Suleyman wrote in the blog post. “We must build AI for people, not to be a digital person.”

    But because the nature of consciousness is still contested, some researchers are growing worried that the technological advancements in AI might outpace our understanding of how consciousness works.

    “If we become able to create consciousness – even accidentally – it would raise immense ethical challenges and even existential risk,” Belgian scientist Axel Cleeremans said last week, announcing a paper he co-wrote calling for consciousness research to become a scientific priority.

    Suleyman himself has been vocal about developing “humanist superintelligence” rather than god-like AI, even though he believes that superintelligence won’t materialize any time within the next decade.

    “i just am more more fixated on ‘how is this actually useful for us as a species?’ Like that should be the task of technology,” Suleyman told the Wall Street Journal earlier this year.

    Ece Yildirim

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  • Sam Altman says ‘enough’ to questions about OpenAI’s revenue | TechCrunch

    OpenAI CEO Sam Altman recently said that the company is doing “well more” than $13 billion in annual revenue — and he sounded a little testy when pressed on how it will pay for its massive spending commitments.

    His comments came up during a joint interview on the Bg2 podcast between Altman and Microsoft CEO Satya Nadella about the partnership between their two companies. Host Brad Gerstner (who’s also founder and CEO of Altimeter Capital) brought up reports that the company is currently bringing in around $13 billion in revenue — a sizable amount, but one that’s dwarfed by more than $1 trillion in spending commitments for computing infrastructure that OpenAI has made for the next decade.

    “First of all, we’re doing well more revenue than that,” Altman said. “Second of all, Brad, if you want to sell your shares, I’ll find you a buyer. I just — enough. I think there are a lot of people who would love to buy OpenAI shares.”

    “Including myself,” Gerstner interjected.

    Altman then added that there are critics who “talk with a lot of breathless concern about our compute stuff or whatever that would be thrilled to buy our shares.”

    In fact, he said that although there are “not many times” when he wants OpenAI to be a public company, “One of the rare times it’s appealing is when those people are writing these ridiculous ‘OpenAI is about to go out of business’ [posts], I would love to tell them they could just short the stock, and I would love to see them get burned on that.”

    Altman acknowledged that there are ways the company “might screw it up” — for example by failing to get access to enough computing resources — but he said that “revenue is growing steeply.”

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    “We are taking a forward bet that it will continue to grow, and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing, that AI that can automate science will create huge value,” he added.

    Nadella, who laughed through much of Altman’s answer, also claimed that OpenAI has “beaten” every business plan that it’s given Microsoft as an investor.

    Gerstner returned to the subject of OpenAI’s revenues and IPO plans later in the interview, when he speculated about the company reaching $100 billion in revenue in 2028 or 2029.

    “How about ‘27?” Altman countered.

    At the same time, he denied reports that OpenAI plans to go public next year.

    “No no no, we don’t have anything that specific,” Altman said. “I’m a realist, I assume it will happen someday, but I don’t know why people write these reports. We don’t have a date in mind, we don’t have a board decision to do this or anything like that. I just assume it’s where things will eventually go.”

    Anthony Ha

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  • Windows 10 users face ransomware nightmare as Microsoft support ends in 2025 worldwide

    NEWYou can now listen to Fox News articles!

    Microsoft’s blog recently gave a firm warning: unsupported systems aren’t just outdated, they’re unprotected. That message targets anyone still using Windows 10, and it’s serious. In Microsoft’s Digital Defense Report, over 90% of ransomware attacks hit unsupported PCs. That statistic alone should make every Windows 10 user think twice.

    When an operating system stops receiving updates, it becomes an open door for hackers. Security patches dry up, and vulnerabilities grow. So while your computer might seem fine today, it could already be compromised without your knowledge.

    Sign up for my FREE CyberGuy Report

    Get my best tech tips, urgent security alerts and exclusive deals delivered straight to your inbox. Plus, you’ll get instant access to my Ultimate Scam Survival Guide — free when you join my CYBERGUY.COM newsletter

    10 WAYS TO SECURE YOUR OLDER MAC FROM THREATS AND MALWARE

    Why are unsupported systems dangerous

    Unsupported Windows 10 systems no longer get the updates that keep you safe. Without those patches, ransomware and malware have easy access to your files. Once inside, attackers can encrypt your personal data or steal credentials and banking details.

    It’s not just about losing files. Identity theft and financial fraud often start with outdated systems. The older the software, the easier it is for cybercriminals to exploit weaknesses that will never be fixed.

    The “just one more year” trap

    Many people tell themselves they’ll upgrade later. Microsoft calls this “just one more year” thinking. The problem is that every delay increases your risk. Extended security updates only offer limited coverage, and they don’t stop new types of attacks.

    Without Microsoft’s regular monitoring, new vulnerabilities stay hidden. You could be using your computer for months while attackers quietly collect your data. That’s a frightening thought, especially when most of it can be prevented by upgrading.

    Upgrading to Windows 11 keeps your system protected with ongoing security updates. (Microsoft)

    MICROSOFT SOUNDS ALARM AS HACKERS TURN TEAMS PLATFORM INTO ‘REAL-WORLD DANGERS’ FOR USERS

    The hidden costs of waiting to upgrade to Windows 11

    It’s easy to think upgrading costs too much. But what about the cost of losing your photos, business files or financial information? Data recovery, fraud resolution and downtime can cost far more than a new device.

    Hackers know users delay updates, and they actively look for outdated systems. Even one unsupported device in a home or office network can create a weak spot that exposes everything else.

    How to stay safe from unsupported Windows 10 security risks

    You can protect yourself right now with a few smart steps. These actions reduce your exposure, tighten your online defenses and prepare you for a smooth upgrade to Windows 11. The good news is that most of these changes only take a few minutes but make a major difference in your security.

    1) Upgrade your system to Windows 11

    HACKERS FOUND A WAY TO TURN OFF WINDOWS DEFENDER REMOTELY

    Start by checking whether your PC can handle Windows 11. Most modern AMD and Intel processors already meet the system requirements. Upgrading keeps your computer protected with ongoing updates that patch vulnerabilities and improve overall performance. It’s one of the simplest ways to defend against ransomware and malware before they strike.

    2) Watch out for phishing scams and install strong antivirus software

    Be cautious with every link and attachment you receive. Cybercriminals love sending fake update notifications that look like official Microsoft messages. These phishing scams often contain malicious links that install malware in seconds. Before you click, hover over links to verify their source and only download updates directly from Microsoft’s official site. To add an extra layer of protection, install strong antivirus software that can detect and block malicious files before they infect your system.

    The best way to safeguard yourself from malicious links that install malware, potentially accessing your private information, is to have strong antivirus software installed on all your devices. This protection can also alert you to phishing emails and ransomware scams, keeping your personal information and digital assets safe.

    Signage outside the Microsoft Campus

    Delaying your Windows 11 upgrade only gives cybercriminals more time to strike. (Photographer: Chona Kasinger/Bloomberg via Getty Images)

    Get my picks for the best 2025 antivirus protection winners for your Windows, Mac, Android and iOS devices at Cyberguy.com.

    3) Use a data removal service

    HOW A SINGLE MACBOOK COMPROMISE SPREAD ACROSS A USER’S APPLE DEVICES

    Use a personal data removal service to take your information off people-search and data broker websites. These services help remove your name, address, phone number and other personal details that scammers often use for phishing or social-engineering attacks. By limiting what’s publicly available about you, you make it much harder for cybercriminals to target you, especially if your older, unsupported Windows 10 system is ever exposed online.

    While no service can guarantee the complete removal of your data from the internet, a data removal service is really a smart choice. They aren’t cheap, and neither is your privacy. These services do all the work for you by actively monitoring and systematically erasing your personal information from hundreds of websites. It’s what gives me peace of mind and has proven to be the most effective way to erase your personal data from the internet. By limiting the information available, you reduce the risk of scammers cross-referencing data from breaches with information they might find on the dark web, making it harder for them to target you.

    Check out my top picks for data removal services and get a free scan to find out if your personal information is already out on the web by visiting Cyberguy.com.

    4) Secure your logins

    Strong logins make a huge difference. Turn on two-factor authentication (2FA) for your most sensitive accounts, such as banking and email. Also, create strong passwords for your accounts and devices, and avoid using the same password for multiple online accounts. Consider using a password manager, which securely stores and generates complex passwords, reducing the risk of password reuse. This extra layer stops hackers, even if they manage to steal a password.

    WINDOWS 10 SUPPORT ENDS: UPGRADE TO WINDOWS 11 SAFELY

    Next, see if your email has been exposed in past breaches. Our #1 password manager (see Cyberguy.com) pick includes a built-in breach scanner that checks whether your email address or passwords have appeared in known leaks. If you discover a match, immediately change any reused passwords, and secure those accounts with new, unique credentials.

    Man typing on his laptop.

    Without Windows updates, hidden vulnerabilities give hackers easy access to your data. (Felix Zahn/Photothek via Getty Images)

    Check out the best expert-reviewed password managers of 2025 at Cyberguy.com

    5) Back up your data regularly

    Think of backups as your safety net. Save copies of important files to an external hard drive or a trusted cloud service. Schedule automatic backups so you don’t have to remember to do it yourself. If your PC ever gets locked by ransomware, a clean backup means you can restore everything without paying a cent.

    6) Stay informed and proactive

    Cyber threats evolve every day, and knowledge is your best defense. Keep an eye on official Microsoft announcements and alerts. Small changes, like applying updates quickly and revisiting your privacy settings, can keep you a step ahead of attackers.

    CLICK HERE TO DOWNLOAD THE FOX NEWS APP

    Kurt’s key takeaways

    Unsupported systems might look harmless, but they create silent risks that grow over time. Every day you stay on Windows 10 after support ends, you depend on luck instead of protection. Upgrading isn’t just about staying current; it’s about keeping your data safe and your privacy intact.

    Is holding on to Windows 10 worth risking everything stored on your computer? Let us know by writing to us at Cyberguy.com.

    Sign up for my FREE CyberGuy Report

    Get my best tech tips, urgent security alerts and exclusive deals delivered straight to your inbox. Plus, you’ll get instant access to my Ultimate Scam Survival Guide — free when you join my CYBERGUY.COM newsletter.

    Copyright 2025 CyberGuy.com. All rights reserved.

    Kurt “CyberGuy” Knutsson is an award-winning tech journalist who has a deep love of technology, gear and gadgets that make life better with his contributions for Fox News & FOX Business beginning mornings on “FOX & Friends.” Got a tech question? Get Kurt’s free CyberGuy Newsletter, share your voice, a story idea or comment at CyberGuy.com.

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  • The Morning After: Xbox console revenue fell off a cliff this year

    Microsoft’s latest earnings report for the quarter ending on September 30 revealed that revenue from the Xbox hardware fell 30 percent year over year.

    Worse, in a way, this revenue decline doesn’t reflect any dip in sales caused by the console’s $20 to $70 price hike, since that took effect on October 3 — after this earnings report. (Oh, and Microsoft raised the price for its Game Pass Ultimate subscription from $20 to $30 in October.)

    Fortunately, revenue from Xbox content and services, specifically, remained relatively unchanged from the same period last year. That’s the Game Pass component of Microsoft’s gaming business.

    When Microsoft started cutting down its global workforce earlier this year, Xbox was hit hard, with the company canceling games, like a modern reimagining of Perfect Dark, and even shutting the Xbox studio working on it.

    More broadly, Microsoft’s revenue is up, with CEO Satya Nadella posting a few highlights about the company’s earnings call on X, which mostly focused on AI. He said the company will increase its AI capacity by 80 percent this year.

    — Mat Smith

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    The news you might have missed

    Not nightmare fuel at all.

    1X

    Just in time for your Halloween nightmares, here comes Neo. From California-based AI and robotics company 1X, it’s designed to deal with everyday chores and tasks.

    But not out of the box. At launch, it’ll be able to open doors, fetch items and turn lights on and off. More complicated tasks will require a human teleoperator to control the robot remotely, training the Neo to repeat the task. Horror movie premise? Tick.

    1X CEO Bernt Børnich explained that the AI neural network inside the Neo has to learn from more real-world experiences. To do so, buyers will have to agree to a human operator seeing their houses through the robot’s camera, judging their cleanliness levels and interior decor decisions. (Probably.)

    Continue reading.

    Questions!

    TMA

    Netflix

    Three and a half years since season four of Stranger Things premiered, we get a true trailer for the fifth and final season. As Lawrence Bonk notes, it appears that the conclusion of the series will be an action-packed affair, heavy on emotion and light on the type of ’80s humor the show became known for. Poor Will, he’s getting some of the worst of it, again.

    Watch here.

    The highest-rated devices we reviewed this year in a variety of categories.

    Halloween is almost over, so it’s time to assess the entire year, buy holiday presents and generally pretend there aren’t two whole months before the end of 2025. So we have compiled a list of the best gear we reviewed this year based on the highest review scores in each category. From Pixel to iPad and Switch 2 to Sony WH-1000XM6, our reviews team has spent thousands of hours testing new products this year to discover the best of the best. These are those! I ended up buying five of them — is that enough to keep my job?

    Continue reading.

    A year for $50.

    If you’re a former Mint user (RIP), Monarch Money is a great alternative. Monarch has a steeper learning curve than some other budget trackers, but it offers a great deal of customization and granularity, which outweighs the complexity. If you use the code MONARCHVIP at checkout, you can get an annual plan for 50 percent off. Some caveats, though: The discount is only for new users, and you can’t combine it with other offers. The code only works when you sign up through the web.

    Continue reading.

    Mat Smith

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  • Meta stock falls over 10% after commitment to raise AI spending

    Microsoft, Meta and Alphabet recently reported their quarterly earnings and one thing is certain: the jaw-dropping investments in artificial intelligence are only just getting started. This all comes just days after Nvidia became the world’s first-ever $5 trillion company. Jacob Ward, technology journalist, joins CBS News to discuss.

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  • Meta, Microsoft test investors with 89% AI-fueled spending surge

    The largest technology companies are betting on an AI future powered by gigantic data centers filled with humming servers. Now that the staggering cost of this push is coming into sharper focus, it’s testing nerves on Wall Street. Three bellwethers from different corners of the technology world – Alphabet Inc., Meta Platforms Inc. and Microsoft […]

    Bloomberg News

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  • Nvidia Has Started the $5 Trillion Club. Here’s a Look at Its Rise, by the Numbers

    Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion.

    The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.

    Nvidia carved out an early lead in tailoring its chipsets known as graphics processing units, or GPUs, from use in powering video games to helping to train powerful AI systems, like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots. Tech companies scrambled for more chips to build and run them.

    Nvidia’s journey to be one of the world’s most prominent companies has produced some eye-popping numbers. Here’s a look.

    23 percent

    The percentage of stock-focused mutual funds and exchange traded funds tracked by Morningstar Direct with exposure to Nvidia. That’s 1,435 out of 6,198, and the exposure totaled about $1.3 trillion in market value across all the funds.

    $5.03 trillion

    Nvidia’s total market capitalization as of the close of trading Wednesday, tops in the S&P 500.

    Microsoft at $4.025 trillion and Apple at $4 trillion were next among the most valuable companies in the S&P 500. In all, nine companies in the index have market cap’s above $1 trillion.

    79

    The number of trading days it took for Nvidia’s market cap to grow from $4 trillion to $5 trillion. The market cap had jumped from $3 trillion on May 13, to $4 trillion on July 9 (41 trading days), although Nvidia had crossed and fallen back below the $3 trillion threshold a number of times between June 2024 and May 2025 before making the run to $4 trillion.

    18.6 percent

    The company’s contribution to the gain in the S&:P 500 this year as of Sept. 30, according to S&P Dow Jones Indices. Nvidia shares gained 39 percent in the first nine months of the year.

    $179.6 billion

    The net worth of Nvidia CEO Jensen Huang, according to Forbes, putting him eighth on its Real-Time Billionaires List. Elon Musk is No. 1 at $500.2 billion.

    $4.28 trillion

    The gross domestic product of Japan, the world’s fourth largest economy, according to the International Monetary Fund.

    $24.2 billion

    The amount of money Nvidia said it returned to shareholders in the form of stock buybacks and dividends in the first half of fiscal 2026.

    Associated Press

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  • Everyone Said AI Would Kill Google. Its First-Ever $100 Billion Quarter Just Proved Them Wrong

    Every story about Google starts and ends with search. It makes sense—Google is a search engine. It’s not only the company’s most important and profitable business, but it’s the thing that has defined the internet for two decades.

    But for most of the past two years, the biggest story about Google has been that artificial intelligence would, inevitably, make search obsolete. People would stop “Googling” things because AI chatbots could just tell them the answers. Search—the company’s $200-billion-a-year cash cow—was supposed to be doomed.

    On the one hand, the idea that people would no longer type queries into Google’s search box and then click on the blue links that show up on results pages was a doomsday scenario. And AI chatbots certainly made that look increasingly likely.

    Then again, that story always assumed Google would sit still while the world around it changed. It assumed the company that practically invented the modern internet—or at least the way most of us experience it—wouldn’t figure out how to adapt.

    On Wednesday, Alphabet, Google’s parent company, reported its first-ever $100 billion quarter. Revenue rose 16 percent to $102.3 billion. Net income jumped 33 percent to $34.98 billion. Those are not the numbers of a company whose main business is being disrupted. It’s more like the numbers of a company that’s quietly figuring out how to change with the behavior of its users.

    Google Search and YouTube each grew at a double-digit pace. “Google Search & other” revenue climbed 15 percent to $56.6 billion. YouTube ads rose 15 percent to $10.3 billion. Combined, Google’s advertising machine brought in more than $74 billion for the quarter. Not only that, but its cloud business grew by 35 percent over the previous year. That leads to the most interesting part of this story, which is the part about how Google is spending all that money.

    As it announced its earnings, Google said it would raise its capital expenditures, specifically as it invests in infrastructure to serve its cloud businesses. That’s the part of the business that powers its AI ambitions. Google made more money than ever from search, and it’s spending that money on AI.

    Training and running massive models requires staggering amounts of computing power. But that’s exactly where Google’s advantage lies—it already owns what is probably the largest global computing infrastructure ever built.

    Now, it’s doubling down. Alphabet expects to spend $91 billion to $93 billion in capital expenditures this year—mostly on data centers, networking, and custom chips designed for AI workloads. That’s up sharply from last year and puts Google in the same spending league as Amazon and Microsoft.

    And even with those huge investments, Alphabet’s operating margin—excluding a $3.5 billion European Commission fine—rose to 33.9 percent. In other words, it’s spending tens of billions to expand AI capacity while remaining one of the most profitable companies on the planet.

    Google’s strategy isn’t just about protecting search ads. It’s about using the strength of that business to fund a transformation into something bigger: the dominant AI platform.

    That’s still a big lift. Yes, Google is a household name, but it’s still behind in AI—at least in terms of consumer mindshare. OpenAI’s ChatGPT is the front-runner in terms of customer adoption, but Google has almost every other advantage. It has the technology, the infrastructure, and a built-in user base that already trusts it as the default source of information.

    And because Google controls so many layers of the stack—hardware, data centers, models, and consumer products—it can absorb the cost of AI adoption in a way startups and rivals can’t. It doesn’t have to rent the future on someone else’s platform; it’s already building it.

    Now, Google is doing something very few companies have ever pulled off: funding its own disruption without losing momentum. Search and YouTube are still massive profit engines, generating the cash Google needs to build the infrastructure for AI. Basically, Google doesn’t really care whether you type your queries into a search box or a chatbot window, as long as you keep asking it your questions.

    For all the hype about AI replacing search, this quarter makes one thing clear: Google’s biggest business isn’t dying. It’s evolving into something that could be far more lucrative. If the company’s $93 billion AI spending spree pays off the way Pichai expects, Google might have just figured out a better end of the story than search.

    The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

    Jason Aten

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