Is big tech spending too much on AI?
AI worries - Is big tech spending too much on AI?
Learning from 50 years old Microsoft
Microsoft and Apple ditch OpenAI board seats amid regulatory scrutiny
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Is big tech spending too much on AI?
According to a report by Goldman Sachs Group Inc. strategists, there is growing investor apprehension regarding US technology megacaps' significant expenditure on artificial intelligence. The strategists refer to these companies, including Amazon.com Inc., Meta Platforms Inc., Microsoft Corp., and Alphabet Inc., as "hyperscalers," which have collectively spent around $357 billion on capital expenditure and research and development in the past year.
A substantial portion of this spending has been allocated to AI, accounting for nearly 24% of the S&P 500's total capital expenditure and research and development. However, the strategists, led by Ryan Hammond, have expressed concerns that these investments may not yield the expected revenues and earnings. If early indications suggest that the returns are not forthcoming, it could potentially lead to a de-rating in valuation.
Notably, Amazon is expected to increase its capex from $53 billion in 2023 to $63 billion in 2024, while Meta and Alphabet, the parent company of Google, are also set to spend record amounts in 2024. The recent AI focus has contributed to US stocks reaching record highs this year….
Originally by Sagarika Jaisinghani of Bloomberg
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Learning from 50 years old Microsoft
Microsoft's significant investment and partnership with OpenAI(ChatGPT) last year sparked a wave of collaboration between cloud providers and conversational AI developers. Amazon Web Services (AWS) followed suit by partnering with Anthropic(Claude AI), and Microsoft's Copilot AI(ChatGPT) set the stage for Google's (Gemini AI) development.
In a recent announcement, Adept, an AI startup that specializes in creating computer-using agents. Revealed that its co-founders and some employees would be joining Amazon, and it would license the startup's technology. Adept's statement suggests that launching AI for enterprises or consumers is challenging without an established customer base.
Although the terms of the Amazon-Adept deal have yet to be disclosed, Microsoft's similar agreement with Inflection AI provides some insight. In that arrangement, Microsoft agreed to pay Inflection approximately $650 million, primarily through a AI (Large Language Model) licensing deal. This suggests that Amazon's deal with Adept may involve similar licensing terms….
Originally by Stephanie Palazzolo of The Information
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Microsoft, Apple drop OpenAI board plans as scrutiny grows
Microsoft has recently relinquished its non-voting observer seat on OpenAI's board, less than eight months after securing the position. Initially, Apple was reportedly considering joining OpenAI's nonprofit board, but according to the Financial Times, those plans have since been abandoned.
OpenAI confirmed Microsoft's departure from the board in a statement to The Verge, following reports from Axios and the Financial Times. Microsoft's deputy general counsel, Keith Dolliver, notified OpenAI of the decision in a letter sent on Tuesday.
Moving forward, OpenAI plans to host "regular stakeholder meetings to share progress on our mission and ensure stronger collaboration across safety and security." However, Microsoft's resignation from the board is unlikely to alleviate the US Federal Trade Commission's concerns about Microsoft's partnership with OpenAI, according to a source familiar with the agency's thinking.
Microsoft had assumed the non-voting observer role on OpenAI's board last year, following a dramatic coup in which the startup's board members had dismissed CEO Sam Altman. Altman was quickly reinstated following the incident….