Daily Archives: May 2, 2023

Meta CEO Mark Zuckerberg and Alphabet CEO Sundar Pichai. Getty Images

Big tech firms are finding uses for artificial intelligence (AI) in many aspects of their operations and their chief executives are only too happy to tell investors what they've been up to.

Mark Zuckerberg, Sundar Pichai, Satya Nadella and Andy Jassy all sounded off in their first quarter earnings calls last week about how they plan to use AI to enhance products and services, create their own models, and capitalize on the boom.

AI was mentioned a total of 168 times by Meta, Alphabet, Microsoft and Amazon, demonstrating just how much attention they're paying to the transformative technology.

Leading the pack with the highest number of AI mentions was Alphabet with 64. Pichai kicked off the Google owner's call by saying it has embedded "deep computer science and AI" in its product updates this year.

The Alphabet CEO spoke about the rollout of its chatbot Bard in March, which was criticized as being "rushed" following the debut of OpenAI's ChatGPT.

Microsoft also spoke about AI at length and dropped the term 50 times on its call Tuesday. The company doubled down on its vow to keep investing in it through its $10 billion stake in OpenAI.

Meta also suggested it remains being bullish about AI after mentioning it 47 times on its investor call, with Mark Zuckerberg alone saying "AI" 27 times. He said the Facebook owner was using AI to create "visual creation tools" for Instagram users.

Zuckerberg said its AI infrastructure had been a "main driver" for elevated spending in recent years, but that it'll continue to invest in it as new models emerge.

Amazon mentioned AI just seven times Thursday. The e-commerce giant said it would develop language models used in chatbots, which Jassy told analysts cost "billions" and take "many years" to develop.

He added: "There will be a small number of companies that want to invest that time and money, and we'll be one of them at Amazon."

Meta, Alphabet, Microsoft and Amazon didn't immediately respond to requests for comment from Insider, made outside normal working hours.

Do you work for a big tech company and have insights to share? Contact Jyoti Mann from a non-work device at jmann@insider.com

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4 tech giants mentioned AI 168 times on first-quarter earnings calls - Business Insider

An intensifying competition to be the leader inartificial intelligencehas the worlds largest tech companies ramping up data center development.

Since the emergence of ChatGPTlate last year, tech giants Microsoft, Google and Amazonhave all made hard pivots toward artificial intelligence, pouring resources into incorporating generative AI technology into products and services across their different business lines. But earnings reports released last week provided the first real insight into the scale of the investments these cloud providers are making in data centers and other infrastructure needed to support these technologies.

It may be the early days of the AI economy, but these companies by far the largest users of data centers already are ramping up spending on the facilities needed to support both their own AI products and AI cloud infrastructure for customers. They are doing so even as they make significant spending cuts elsewhere in the face of economic headwinds, positioning themselves to compete for a share of an anticipated AI demand wave they believe will fundamentally transform their businesses and the data center landscape in the process.

Ive compared it to the successful transition we made from desktop to mobile computing over a decade ago, said GoogleCEO Sundar Pichai, speaking on the company'sfirst-quarter earnings callTuesday. This has been an important moment, as pretty much every organization is thinking about how to use AI to drive transformation ... across the board, from startups to large companies, they are engaging with us. I view it as a point of inflection.

This may indeed be an inflection point for AI, but it was rival Microsofts success over the past quarter that presented the strongest evidence that growing customer demand for these products is more than hype.

Microsoft whose partnership with ChatGPT-maker OpenAI has createdat least the perception that it is the clubhouse leader in the early days of the AI boom has seen immediate returns on its AI investments. The company's Azure cloud service increased its market share by a full percentage point, a gain that Microsoft'sleadership largely attributes to the incorporation of OpenAIs products. Meanwhile, the companys Bing search engine little more than a punchline since its launch in 2009 saw user numbers skyrocket and app downloads grow 400% after adding ChatGPT functionality.

Microsofts competitors have rushed to respond over the past quarter, with Google launching a competing AI chatbot called Bard and adding AI features to both its search and cloud services, and with Amazon touting AI integrations across its various business lines.

But while chatbot search engines and other consumer-oriented AI products may signal burgeoning AI demand, it is the cloud where these companies see the biggest potential for growth through providing the infrastructure to support the burgeoning AI economy.

Developing and operating generative AI products requires enormous computing power, with more powerful chips and fundamentally different supporting infrastructure than what traditional cloud offering support. Amazon Web Services, Microsoft and Google are in a race to provide these specialized cloud offerings.

This means building new data centers capable of supporting these high-performance computing needs, and all three cloud giants say they are ramping up spending on data center development in preparation for growing demand.

We will continue to invest in our cloud infrastructure, particularly AI-related spend as we scale with the growing demand, driven by customer transformation, and we expect the resulting revenue to grow over time, said Microsoft Chief Financial OfficerAmy Hood, speaking on its Tuesdayearnings call.

We have continually focused on pivoting our resources aggressively to the future as we execute at a high level in the moment to deliver value to our customers," Hood added. "We are committed to leading the AI platform wave and making the investments to support it.

Microsofts capital expenditures rose significantly last quarter to $7.8B, up more than $1B year-over-year in an increase Hood says is driven by the build-out of AI-focused data centers.

Although rival Amazons overall capex is trending lower, CEO Andy Jassy has indicated spending on AWS infrastructure has increased to meet demand for generative AI, with capital cutbacks in logistics and other areas of the business being redirected to AWS.

Google is also scaling up its data center portfolio to grow its AI computing capacity, according to CFO Ruth Porat, with the pace of data center spending accelerating over the coming year.

Were expecting a step-up in the second quarter, and that will continue to increase throughout the year AI is a key component it underlies everything that we do, Porat said Tuesday. Were continuing to invest in support of AI the increase in capex for the full year 2023 reflects the sizable increase in technical infrastructure investment.

Amazon CEO Andy Jassy in 2016, when he was head of Amazon Web Services.

This accelerated spending on data centers is happening even as the tech giantsslashjobs and budgetsacross other segments of their business, and as the cloud industrys growth has slowed. Revenue growth for the cloud industry as a whole for which AWS, Microsoft and Google comprise 63% of market share was 19% last quarter, down significantly from 26% a year ago,according to Synergy Research Group.

This continues a trend that began last quarter, as economic headwinds tempered the growth of corporate IT budgets. After three years of scaling up spending on cloud services to meet pandemic-driven digital transformations needs, companies are now focusing on getting more bang for their cloud services buck and optimizing their IT spending.

The slowdown is expected to continue in the months ahead, with Amazon leadership indicating on its Thursday earnings call that AWS revenue growth this monthis down around 5% from first-quarter performance.

In AWS, what were seeing is enterprises continuing to be cautious in their spending in this uncertain time customers are looking for ways to save money however they can right now, Jassy said Thursday. One of the great attributes of the cloud is that you can scale seamlessly up or down as demand dictates, which is not the case with on-premise infrastructure.

Yet sluggish revenue growth isn't deterring cloud providers from investing in AI-focused capital investments, and the resulting surge in hyperscale development could reshape the data center landscape. AI doesnt just mean more data centers; it means greater power requirements and fundamental changes to how projects are designed to support the more powerful chips and network equipment this technology requires.

The coming months may mark the start of a significant division within the data center sector between new assets capable of supporting AI workloads and older assets that cannot, industry insiders say.

Experts also expect the major cloud providers, along with social media giant Meta, to become increasingly aggressive in gobbling up large swaths of land with access to inexpensive power, resources that will become increasingly critical as hyperscalers try to hold down the cost of energy-intensive, high-performance computing for AI as it becomes central to their business model.

The move to generative AI is going to completely unhinge the cost basis for most of these businesses, said George Slessman, CEO of data center firm DCX, speaking in March at Bisnows DICE Southwest eventPhoenix. What's coming in the underlying infrastructure is as important to this generation of infrastructure as the internet was to data centers this is not a moment to be taken lightly.

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AI Arms Race Reaches 'Point Of Inflection' As Tech Giants Pour Billions Into Data Centers - Bisnow

The EUs latest crackdown on big tech is taking shape. The bloc yesterday released a list of companies that must adhere to the strictest rules of the landmark Digital Services Act (DSA).

The 17 platforms and two search engines reach at least 45 million monthly active users. All of them have four months to comply with the full obligations of the DSA.

The services are now mandated to mitigate their systemic risks and establish robust content moderation (this means you, Elon). They range from banning ads that target sensitive user data to special risk assessments for mental health impacts. Violations can be punished with fines of up to 6% of a companys global turnover.

According to the EU, the new rules are designed to empower and protect people online.

The whole logic of our rules is to ensure that technology serves people and the societies that we live in not the other way around, said Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age.

The Digital Services Act will bring about meaningful transparency and accountability of platforms and search engines and give consumers more control over their online life. The designations made today are a huge step forward to making that happen.

Here are the 19 services that have been designated:

The online platforms:

The search engines:

The rulings are another milestone in the EUs mission to lead the world in tech regulation. Still, that doesnt mean the union is above marking the moment with a cringe pun.

Today is the D(SA)-Day for digital regulation, said Thierry Breton, Commissioner for Internal Market. The countdown is starting for 19 very large online platforms and search engines to fully comply with the special obligations that the Digital Services Act imposes on them.

Over to you, tech barons.

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These 19 tech giants are on the EU's new naughty list - TNW

Geoffrey Hinton, the man widely considered as the godfather of artificial intelligence, has left Google with a message sharing his concerns about potential dangers stemming from the same technology he helped build

By

MATT O'BRIEN and WYATTE GRANTHAM-PHILIPS AP Business Reporters

May 2, 2023, 10:40 AM ET

4 min read

WASHINGTON -- Sounding alarms about artificial intelligence has become a popular pastime in the ChatGPT era, taken up by high-profile figures as varied as industrialist Elon Musk, leftist intellectual Noam Chomsky and the 99-year-old retired statesman Henry Kissinger.

But its the concerns of insiders in the AI research community that are attracting particular attention. A pioneering researcher and the so-called Godfather of AI Geoffrey Hinton quit his role at Google so he could more freely speak about the dangers of the technology he helped create.

Over his decades-long career, Hinton's pioneering work on deep learning and neural networks helped lay the foundation for much of the AI technology we see today.

There has been a spasm of AI introductions in recent months. San Francisco-based startup OpenAI, the Microsoft-backed company behind ChatGPT, rolled out its latest artificial intelligence model, GPT-4, in March. Other tech giants have invested in competing tools including Googles Bard.

Some of the dangers of AI chatbots are "quite scary," Hinton told the BBC. Right now, theyre not more intelligent than us, as far as I can tell. But I think they soon may be.

In an interview with MIT Technology Review, Hinton also pointed to bad actors that may use AI in ways that could have detrimental impacts on society such as manipulating elections or instigating violence.

Hinton, 75, says he retired from Google so that he could speak openly about the potential risks as someone who no longer works for the tech giant.

I want to talk about AI safety issues without having to worry about how it interacts with Googles business, he told MIT Technology Review. As long as Im paid by Google, I cant do that.

Since announcing his departure, Hinton has maintained that Google has acted very responsibly regarding AI. He told MIT Technology Review that theres also a lot of good things about Google that he would want to talk about but those comments would be much more credible if Im not at Google anymore.

Google confirmed that Hinton had retired from his role after 10 years overseeing the Google Research team in Toronto.

Hinton declined further comment Tuesday but said he would talk more about it at a conference Wednesday.

At the heart of the debate on the state of AI is whether the primary dangers are in the future or present. On one side are hypothetical scenarios of existential risk caused by computers that supersede human intelligence. On the other are concerns about automated technology thats already getting widely deployed by businesses and governments and can cause real-world harms.

For good or for not, what the chatbot moment has done is made AI a national conversation and an international conversation that doesnt only include AI experts and developers, said Alondra Nelson, who until February led the White House Office of Science and Technology Policy and its push to craft guidelines around the responsible use of AI tools.

AI is no longer abstract, and we have this kind of opening, I think, to have a new conversation about what we want a democratic future and a non-exploitative future with technology to look like, Nelson said in an interview last month.

A number of AI researchers have long expressed concerns about racial, gender and other forms of bias in AI systems, including text-based large language models that are trained on huge troves of human writing and can amplify discrimination that exists in society.

We need to take a step back and really think about whose needs are being put front and center in the discussion about risks, said Sarah Myers West, managing director of the nonprofit AI Now Institute. The harms that are being enacted by AI systems today are really not evenly distributed. Its very much exacerbating existing patterns of inequality.

Hinton was one of three AI pioneers who in 2019 won the Turing Award, an honor that has become known as tech industrys version of the Nobel Prize. The other two winners, Yoshua Bengio and Yann LeCun, have also expressed concerns about the future of AI.

Bengio, a professor at the University of Montreal, signed a petition in late March calling for tech companies to agree to a 6-month pause on developing powerful AI systems, while LeCun, a top AI scientist at Facebook parent Meta, has taken a more optimistic approach.

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AP Technology Reporter Matt O'Brien reported from Cambridge, Massachusetts.

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'Godfather of AI' leaves Google, warns of tech's dangers - ABC News

Last week was a significant one for some of the worlds biggest tech stocks, with Microsoft, Google parent Alphabet, Facebook, and Amazon all reporting earnings. Apple follows suit this week, reporting earnings on Thursday, but so far investors will be delighted that tech stock earnings are holding up well.

Microsoft, Facebook, and Amazon all blew past analyst expectations last week and were rewarded with big share price gains. Alphabets stock gains were more muted, although the company also topped earnings and revenue estimates.

[Big tech stocks driving market gains]

Shareholders will be relieved. Big tech companies largely missed estimates over the last four quarters, notes Datatrek Researchs Nicholas Colas. Furthermore, there was little room for error, given the recent huge run-up in tech stocks.

Index investors, too, will be eagerly following the fortunes of tech stocks. Colas notes that just seven tech stocks Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla have been responsible for almost all of the S&P 500s gains in 2023. There is, he says, a lot riding on tech stock earnings. Its a case of so far, so good.

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Stocktake: Tech giants are surging ahead as they beat analysts ... - The Irish Times

The US stock market rally may be less healthy than it appears. Like many others on Wall Street, JPMorgan is concerned by the narrowness of the market advance.

It estimates interest in ChatGPT and artificial intelligence (AI) has driven more than half of this years gains in both the S&P 500 and the Nasdaq 100. Six AI-innovation stocks Microsoft, Google parent Alphabet, Amazon, Meta, Nvidia, and Salesforce.com have gained some $1.4 trillion (1.27trillion) in market capitalisation this year. Other mega-cap giants such as Apple, Tesla, and Berkshire Hathaway have also advanced but they have not done nearly as well as the aforementioned grouping, leading JPMorgan to surmise that AI hype is central to market gains.

JPMorgan also noted the performance of the next most valuable stocks in the index, those ranked outside the top 10 but inside the top 50. This grouping has lagged far behind its mega-cap brethren.

The end result is the top 10 stocks now account for 28.7 per cent of the index. Thats extreme its higher than 96 per cent of historical readings. A handful of mega-cap giants are doing the heavy lifting.

In fact, the first quarter of 2023 was led by the narrowest leadership ever in an up market, says JPMorgan. Indices may be higher, but this mega-cap crowding is increasingly concerning.

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Stocktake: A handful of tech giants are driving almost all US market ... - The Irish Times

Price rises over the last 18 months have meant a lucky few companies, and their owners, have been making extraordinary profits. BP, Shell and other fossil fuel giants have reported record earnings as soaring gas and oil prices last year saw hard-pressed consumers forced to hand over billions for essential energy costs.

Food prices rises have seen the same process take place, with the four largest global agribusinesses reporting an incredible 255 per cent increase in profits since 2019. In the post-pandemic economy, its obvious who the winners are: Oxfam has reported 62 new food billionaires have been created from the impoverishment of millions around the world.

Yet even while a lucky few capitalists have profited, the rest of the system is creaking. Those companies that once seemed to represent the future, and which grew fat during the pandemic and its exceptional government spending, are now under pressure. The shift online during lockdowns marked a change in how we live and work, with 44 per cent of employees today in Britain under some form of hybrid working sometimes in the workplace, sometimes at home. Online retail sales now account for 25 per cent of all sales up from 20 per cent in December 2019.

But, crucially, neither online retail nor homeworking are as common as they were at the peak of the pandemic. And the ultra-low interest rates of the last decade have gone, replaced by central banks cranking up the cost of borrowing in the desperate, if misguided, belief this will restrain inflation. With markets for digital products smaller than they were when most of us were locked up indoors, and with the flow of cheap, easy money now dried up, the tech sector is feeling the pinch. Amazon, Google parent company Alphabet, Facebook owners Meta and Microsoft have all announced global layoffs in the last six months. Smaller tech companies in the UK are giving profit warnings to their shareholders, with 75 issuing an alert in the first three months of this year the highest number since the pandemic.

This is a very familiar pattern in capitalist economies sudden enthusiasm for an industry or a product grips investors and speculators, who rush to put their money into increasingly risky ventures. The Tulip bubble in Holland in the 1600s is infamous, but Railway Mania in Britain in the 1830s and the dotcom bubble in the 2000s were both examples of the same pattern. Its not necessarily wrong to think some new technology or product could become important railways were built in the rush, and the dotcom bubble left behind the infrastructure of the modern internet in companies like Google and Amazon. The pandemic really did see an acceleration of the shift to online living. But the rush of investment is excessive and when the bubble bursts, the consequences can be painful. Companies go bust and workers are laid off, as we are now seeing.

The cost of living crisis is a critical element. As prices for essentials have soared, consumers have cut back on the non-essential spending. Streaming service Netflix lost a million subscribers last year as people cancelled their payments to save money. So the cost of living crisis has produced some very clear winners, but also a large number of losers not only most of us, forced to pay through the nose for things we cant do without, but also smaller businesses like pubs and restaurants, with pub and bar closures in the UK at record levels. The digital economy as a whole is losing out.

Theres no need to shed any tears for the billionaires. If Elon Musk has managed to lose $39 billion since 2022, hes still got another $180 billion to play with. But for workers in the companies now under pressure, its a different story. Workplace practices have been notoriously brutal in tech, from the to-the-second monitoring of Amazon warehouse workers to the all-night crunches expected from software developers ahead of deadline. But layoffs have given an extra push to unionisation drives. Amazon warehouse workers have been striking across the globe, with workers in Coventry taking the first official industrial action at the company in the UK in the last few weeks. Alphabet Workers Union is growing rapidly in the US. The UKs Union of Tech and Allied Workers has seen its membership triple in the last six months.

Facebooks old motto was move fast, and break things and weve seen in the last decade how that works out. Good company behaviour starts with being a good employer. If workers in the sector can win better pay and conditions for themselves, pushing back on the kind of brutal business practices Elon Musk has brought to Twitter, it can start to transform how these companies operate for all of us.

James Meadway is an economist and director of the Progressive Economy Forum, an independent thinktank (progressiveeconomyforum.com)

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Tech giants are the unlikely losers in the cost-of-living crisis, says ... - Big Issue North

Are programmers no longer untouchable?andresr/Getty Images

Tech companies have been slashing thousands of jobs.

Thanks to the rise of AI, many of those jobs might never come back.

That has far-reaching implications for tech workers and those seeking to work in the industry.

Big Tech is liking the look of its new leaner shape.

Companies from Meta to Microsoft to Salesforce have cut jobs in recent months, often in the pursuit of efficiency and increased profit margins. By some estimates, more than 250,000 tech workers have been laid off since the start of 2022.

There have been many more roles that have gone unfilled as these industry giants slow down on hiring. Recent data from Indeed shows a more than 50% decline in software-development job postings compared to a year ago.

As my colleague Hasan Chowdhury has written, that strategy is working financially, with Salesforce, Meta, and Microsoft recently reporting stronger-than-expected earning results.

And now, thanks to the rise of AI, many of those jobs may be permanently lost, even as these companies get back to growth.

In a recent note by Morgan Stanley analysts led by Brian Nowak, the bank said "AI based productivity drivers are coming."

The note reads:

We have seen headcount reductions across the tech landscape. But part of this (in particular META, GOOGL, AMZN) has been a counter-measure to above-average hiring levels in '21/'22. Looking ahead, we are most focused on how companies plan/speak to forward hiring growth. Forward hiring levels should arguably be smaller and more targeted due to rapidly-emerging AI productivity drivers.

The Morgan Stanley note referenced the potential for AI-assisted coding tools to make engineers more productive, citing a Microsoft exec who said using GitHub Copilot increased productivity by 55%. It also highlighted AI-based sales tools that could reduce the need for huge armies of salespeople.

For more on how AI could impact software developers, I highly recommend this story from my colleague Aki Ito on "the end of coding as we know it."

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To be clear, Morgan Stanley doesn't suggest AI will necessarily take tech jobs. Instead, the the spread of AI-powered tools and workflows will slow or stop future growth in head count. In other words, jobs that were lost either won't come back or will come back much more slowly. In the future, some tech-job openings may not even exist.

There are already hints of this. At Alphabet, for example, Google's engineering head, Urs Hlzle, said in a March memo to technical-infrastructure teams that the company would use automation to "find more efficient ways of doing things."

Insider's Rosalie Chan reported at the time:

Additionally, the team aims to use automation to reduce the ratio of site-reliability engineers to software engineers to less than 5%. Site-reliability engineers manage the operations of Google's systems and keep them running, while software engineers work on developing Google's infrastructure and products.

Meta meanwhile has had a broad hiring freeze in place for the past six months. Chief financial officer Susan Li said on an earnings call this week that while the company expects to start hiring again once it has completed its layoffs in April and May, it's "long-term focus is very much on efficiency."

Asked by Nowak how that could impact workforce productivity, she said "it's something we're excited about and I think we will have more clarity on that as more tools begin getting developed to enhance employee productivity across the industry."

This trend has significant implications for tech workers and those hoping to work in the industry. As Insider's Ito has reported, tech workers and software engineers have often been thought of as impervious to the march of automation.

She writes:

Even as new gizmos replacedotherjobs, the people who wrote the instructions for the machines felt untouchable. Universities rushed to expand their computer-science programs. Policymakers scrambling to futureproof the workforce stuck to one unwavering message:Learn to code!But in recent weeks, behind closed doors, I've heard many coders confess to a growing anxiety over the sudden advent of generative AI. Those who have been doing the automating fear they will soon be automated themselves. And if programmers aren't safe, who is?

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Tech giants aren't just cutting thousands of jobs they're making them extinct - Yahoo Finance