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Hard Numbers: Hey big spender, an iPhone boost, Google’s robot coders, Super Micro’s super downfall
200 billion: Capital expenditures from four of the largest US tech companies — Amazon, Microsoft, Meta, and Google — are set to exceed $200 billion this year, inflated by enormous spending on artificial intelligence software and hardware investments. Amazon’s spending alone surged 81% in a year, leading CEO Andy Jassy to assure investors the company’s bets will pay off. These are record sums at a time when Wall Street seems hesitant to keep rewarding excessive spending on AI.
46 billion: Apple reversed its fortunes after a bad year of iPhone sales, selling more than $46 billion of its signature smartphone between July and September — a 6% increase year over year. The company’s new iPhone 16 is part of its push into artificial intelligence — marketed as a phone capable of handling all of its Apple Intelligence features, such as a supercharged Siri, new writing tools, and call transcription — which started rolling out last week. The company hopes that AI can convince customers old and new that it’s time to pay up for a new iPhone, which starts at $799.
25: More than 25% of all new code produced by Google is written by artificial intelligence, according to CEO Sundar Pichai. AI produces the code, which is then reviewed and accepted by human engineers. A recent Stack Overflow survey found that 76% of all software developers are using or are planning to use AI to code.
45: Super Micro Computer, a key supplier of Nvidia servers, saw its stock fall 45% after its auditor, Ernst & Young, resigned because it was “unwilling to be associated with the financial statements prepared by management.” Once one of the hottest AI stocks, the company has now wiped out all of its 2024 gains.European Union antitrust chief Margrethe Vestager holds a press conference after Europe's top court ruling on Apple's fight against an order by EU competition regulators to pay a record 13 billion euros in back taxes to Ireland, in Brussels, Belgium September 10, 2024.
Take two: Brussels’ banner day vs. tech firms
It was Tech Two-fer Tuesday in Brussels, as EU regulators got twin wins in their ongoing regulatory battle with US tech giants.
Google lost its final appeal in a 2017 antitrust case that found the company’s search engine had illegally prioritized its own shopping platforms. Google must now pay $2.7 billion in fines.
Apple, meanwhile, was ordered to pay $14 billion in back taxes, after the EU’s top court ruled that the Irish government had once given the tech giant sweetheart incentives that amounted to “unlawful aid.”
To be fair, these numbers are pocket change for companies raking in hundreds of billions of dollars in annual revenue. And in both cases, the underlying offenses were rectified years ago – the Irish scrapped the sweetheart deal in 2015 and Google has since tweaked its ad algorithms.
But the rulings set a precedent as the EU flexes its unique muscle as a standard-setter in global tech regulation.
The next showdown: In July, Brussels said X had violated strict EU rules on harmful content. If the two sides can’t settle, the case will go to court. That seems likely, given that X owner Elon Musk responded to the charges by vowing to fight “censorship” and calling on the EU to perform a sex act on its “own face.”
An Apple logo is pictured in an Apple store in Paris, France.
Apple signs Joe Biden’s pledge
Apple signed on to the Biden administration’s voluntary pledge for artificial intelligence companies on July 26.
President Joe Biden and Vice President Kamala Harrisfirst announced that they secured commitments from seven major AI developers — Amazon, Anthropic, Google, Inflection, Meta, Microsoft, and OpenAI — a year ago in what the administration says laid the groundwork for its executive order on AI adopted in October. The voluntary commitments included safety testing, information sharing on safety risks (with government, academia, and civil society groups), cybersecurity investments, watermarking systems AI-generated content, and a general agreement to “develop and deploy advanced AI systems to help address society’s greatest challenges.”
Until now, Apple wasn’t on the list. Now, as Apple prepares to release new AI-enabled iPhones (powered by OpenAI’s systems as well as its own), the Cupertino-based tech giant is playing nice with the Biden administration, signaling that they’ll be a responsible actor, even without formal legislation on the books.
The first upgraded Apple store is opening in Shanghai, China, on June 25, 2024.
Why Apple’s having a rotten time in China
Apple isn’t synonymous with artificial intelligence — at least not yet. In the West, Apple has lain in wait while OpenAI, Anthropic, Microsoft, and Meta jump forward with powerful generative AI models. That’s about to change when Apple adds its recently announced Apple Intelligence system to iPhones, but the company is also struggling to make a dent in another global market: China.
Apple is losing market share in the Chinese smartphone market — where it formerly held a dominant position — because it hasn’t yet incorporated artificial intelligence into its phones. Chinese brands, such as Vivo and Honor, which took the top two spots, have AI built into their systems.
One challenge may be that companies need government approval before introducing AI — and Apple is already out of favor in the eyes of Beijing, which has largely banned its devices from government use. “As of March, Beijing’s internet watchdog, the Cyberspace Administration of China, had approved 117 generative AI products, none of which is foreign-developed,” the Wall Street Journal notes.
We’re watching how Apple tries to get the Middle Kingdom to take another bite.
Nvidia logo in Taipei, Taiwan.
Hard Numbers: Nvidia soars, Salesforce’s UK investment, step up for your eye exam, More millionaires (more problems?), Apple’s rebound
4 billion: Salesforce is investing $4 billion in the United Kingdom and opening a 40,000-square-foot AI-focused office in London on June 18. The US-based software company said it’ll also run training and upskilling programs for professionals looking to gain AI-related skills.
6 million: Want a 90-second eye exam without interacting with a human? The startup Eyebot raised $6 million for AI-enabled kiosks that’ll do just that. The kiosks perform an eye exam, evaluate prescription lenses or contacts, and any recommended prescriptions are sent to a doctor for final review and approval. The company hopes that this telehealth initiative can be an affordable way for people to get their vision checked, especially those without easy access to professionals.
600,000: There are now 600,000 millionaires in the US, thanks to the AI boom. Atop an AI-fueled stock market boom, America’s number of millionaires jumped more than 7% year over year in 2023. Asia gained about 5% more millionaires while Europe saw a 4% increase.
471 billion: Apple’s stock has rallied since early April, gaining 20% — or $471 billion — in value on the back of investor anticipation of AI rollouts on its devices. The company kicked off its Worldwide Developers Conference on June 10, announcing Apple Intelligence, an AI upgrade to its iPhones that will prioritize certain messages and notifications, offer new writing tools, and boost Siri’s capability as a voice-powered assistant.Apple wants its own chips
Apple is leveling up its chip ambitions. The Silicon Valley technology giant has spent years designing chips for its own hardware — for Macs, iPhones, iPads, and more. But, running AI models requires higher-grade chips like NVIDIA's graphics processors, which have become industry standard.
To keep up, and to fuel its own AI ambitions, Apple is working on its own chips, according to a report in the Wall Street Journal, designed to support AI applications from servers in large data centers. Internally, the project is code-named ACDC, short for Apple Chips in Data Center, though it has no set timeline for completion.
Apple's chips are reportedly meant for running AI applications, rather than training them, which makes sense given Apple's consumer focus. Apple has yielded the first leg of the AI race to upstarts like OpenAI and Anthropic, as well as to incumbents Microsoft and Meta, but the view from Cupertino is clearly better-late-than-never.
FILE PHOTO: iPhone 15 and iPhone 15 Plus are displayed during the 'Wonderlust' event at the company's headquarters in Cupertino, California, U.S. September 12, 2023.
US sues Apple over alleged smartphone monopoly
In an antitrust lawsuit filed Thursday, the Department of Justice alleged Apple’s dominance of the smartphone market amounts to a monopoly. The DOJ says Apple resorts to “delaying, degrading, or outright blocking technologies that would increase competition in the smartphone markets” to keep users reliant on its iPhone.
The iPhone’s success is the stuff of business school legend, capturing some 70% of the US smartphone market despite steep prices. In short, the DoJ’s contention is that unfair practices helped Apple get there.
Apple is denying the claims and says it will fight the lawsuit in court, but this isn’t the first time the company has faced similar legal challenges. This is its third antitrust suit in the US since 2009, and It was fined nearly $2 billion by the European Union last month for breaking fair competition laws.
Expect a tough legal fight, but if the government proves its case, there could be major changes coming to the iPhone. The complaint says Apple could shape up by ensuring full compatibility with phones, smartwatches, and digital wallets from other manufacturers, relinquishing some control over the apps that can run on iPhones, and imposing less onerous terms on users and developers.Fingerprint and loupe.
Hard Numbers: Unique prints, Job impacts, China chip sales, Microsoft beats Apple, Baidu shares fall
60,000: Researchers at Columbia University trained an artificial intelligence tool on 60,000 human fingerprints and made a strange discovery: Contrary to popular belief, our fingerprints may not be entirely unique. If confirmed, this discovery could change a bedrock assumption of forensic science.
40: Artificial intelligence will affect 40% of all jobs, according to a new analysis by the International Monetary Fund. In advanced economies, a whopping 60% of jobs could be affected. In about half of the affected jobs, AI could actually help workers, the IMF said, but the net effect on people around the world won’t be pretty.
15.4: The value of China’s chip imports fell 15.4% to $349.4 billion in 2023 after the US intensified export controls on the semiconductor industry. It’s the second year in a row that it has dropped and the worst decline since data tracking began in 2004.
2.89 trillion: On Friday, Microsoft surpassed Apple as the world’s most valuable company. The PC giant, which has leaned heavily into AI — including a massive investment in OpenAI — finished the trading day at $2.89 trillion, beating Apple’s $2.87 trillion. Apple has held the most-valuable-company crown since 2011 when it dethroned Exxon Mobil.12: Shares of the Chinese tech company Baidu fell 12% after a report revealed its Ernie AI platform is powering Chinese military research. Baidu, which trades on the Nasdaq and the Hong Kong Stock Exchange, had its worst-performing day in a year even though it denied the veracity of the report. Ernie added 100 million users since it launched in August, but its use by the Chinese government could subdue investor interest on Wall Street.