AI drives cloud growth and cloud growth drives earnings upside – for some – Business
Artificial intelligence drove higher cloud spending this past quarter, and that in turn drove earnings upside for the likes of Google, Microsoft and SAP.
Less so, however, for Intel, IBM, ServiceNow and Meta, which haven’t yet seen the AI bump they hope to get or, in Meta’s case, are spending big on it well ahead of the revenue opportunity. That was the gist of a mixed week for tech’s first big slug of earnings reports, with more coming next week: Amazon, Advanced Micro Devices, Samsung, Qualcomm and others.
Another positive sign this week for the entire tech industry ecosystem was Rubrik’s IPO, after which its shares jumped 16% in their public market debut. IPOs, in a long drought lately, are what drive returns that are then invested back into startups, not to mention Teslas, local restaurants and already overpriced homes.
Meanwhile, IBM bought HashiCorp for $6.4 billion, and Nvidia dug under the cushions of its cash-flow couch to buy GPU clustering startup Run:ai for $700 million. But Salesforce decided spending multiple billions on Informatica didn’t pencil out.
As concerns rise about the cost and time to train and run AI models, many companies are offering smaller and more efficient models — a trend that’s only likely to grow in coming months.
Lots of action on the policy front this week, as President Biden signed the ByteDance sell-or-ban bill, raising the distinct possibility that TikTok could exit the United States — though there’s a lot of legal wrangling to come before that happens. Two other big policy dictums came down as well: The FCC reinstated net neutrality rules that Trump ended, and the FTC banned noncompete clauses.
This and other news will be discussed in John Furrier’s and Dave Vellante’s weekly podcast theCUBE Pod, due out on YouTube late today. Also, don’t miss Vellante’s weekly deep dive, Breaking Analysis, out this weekend.
Here’s this week’s roundup of those and other important tech stories on SiliconANGLE and beyond:
Generative AI on the cheap
A wide variety of AI and data leaders are looking to reduce the cost and speed the deployment of AI with smaller and more efficient models:
Snowflake is taking on OpenAI, Google, Meta and others with its open-source Arctic AI model
Microsoft open-sources Pi-3 Mini small language model that outperforms Meta’s Llama 2
OpenAI enhances security, control and cost management for enterprise API users
Monster API uses generative AI to help anyone build generative AI
Apple researchers open-source OpenELM language model series
AWS updates Amazon Bedrock with new foundation models, AI management features And Zeus Kerravala’s dive into the details: New Amazon Bedrock offerings provide a new way to fast-track generative AI apps and experiences
And new gen AI services keep proliferating:
WhyLabs enhances real-time generative AI monitoring to forestall inaccurate and toxic outputs
Oracle generative AI drumbeat continues with new customer experience features
Salesforce makes its Einstein Copilot generative AI assistant generally available
Salesforce wants to help banks resolve transaction disputes faster with generative AI
Fullstory’s new platform enables harnessing customer behavioral data as a standalone source
Datorios enhances data streaming visibility to support more reliable real-time AI systems
JFrog unveils MLflow integration to enhance machine learning model management
Money matters
Nvidia acquires GPU cluster optimization startup Run:ai for reported $700M
Secretive AI coding assistant startup Augment raises $227M to rival GitHub’s Copilot
Perplexity AI lands $63M funding for generative AI search at $1B valuation
Parloa nabs $66M for AI-powered customer service platform
FlexAI launches with $30M in seed funding to unlock ‘universal compute’ for AI workloads
The cost of all these investments, however, extends beyond dollars and cents: UK launches probe into Microsoft and Amazon’s partnerships with AI firms
Cloud drives a mixed tech earnings kickoff week
In the first big tech earnings week of the quarter, a mixed bag — but cloud is driving upside at a lot of companies, and AI in turns is driving that cloud (and hardware) growth:
Google parent Alphabet’s stock spikes on strong cloud profits, AI demand and first cash dividend
IBM misses on revenues but foresees rapid growth from HashiCorp purchase
Strong cloud growth boosts Microsoft earnings and stock price
Intel’s stock slides on weak forecast
Shares of SAP rise as AI fuels cloud transition plans
Meta delivers strong earnings, but weak guidance and heavy AI spending prompt investors to bail
Generative AI drives strong revenue growth for ServiceNow, but light guidance weighs on stock
Check Point delivers strong quarterly revenue growth but stock drops
Tesla shares climb over 10% amid plans for new, more affordable models next year
SK Hynix returns to profit after a five-quarter losing streak
Western Digital earnings beat targets but shares push lower
Seagate shares rise on earnings beat, upbeat guidance
Juniper’s adjusted profit falls on 16% lower revenue as it awaits HPE acquisition late this year or early next
Pegasystems lags Q1 earnings and revenue estimates
Mobileye’s Q1 revenue falls 48% as supply chain resets
Snap’s revenue and earnings beat forecasts, shares surge over 20%
Other money matters
IBM expands hybrid cloud portfolio with $6.4B acquisition of HashiCorp
Reports: Salesforce abandons plans to acquire Informatica
HR software maker Rippling closes $200M round at $13.5B valuation
Irish startup Tines raises $50M to expand no-code automation tools
As expected, Micron gets $6.1B to build three new facilities (from the WSJ) And no less than “Chip Wars” author Chris Miller says the CHIPS Act that provided funding to Micron and others has been “surprisingly successful so far.”
In other enterprise tech news
TSMC debuts 1.6-nanometer process with new power distribution technology
Crowdbotics announces collaboration with Microsoft, launches new platform to accelerate code development
HubSpot debuts new AI-powered marketing and customer service tools
HPE debuts new IoT-optimized Wi-Fi 7 access points
Cyber beat: Rubrik runs, Darktrace exits
Money matters
A positive sign for enterprise tech IPOs: Rubrik’s stock jumps 16% above IPO price after company raises $752M
Cybersecurity provider Darktrace to be acquired by Thoma Bravo for $5.3B
Veeam acquires Coveware to bolster its ransomware incident response capabilities
ThreatLocker raises $115M Series D
Nagomi launches with $30M to optimize enterprises’ cybersecurity toolkits
Dropzone AI nabs $16.85M for its automated breach investigation platform
French startup BforeAI raises $15M for US expansion and service enhancement
New services
New Ionix service integrates cloud and on-premises security for broader risk management
Fortanix launches Key Insight for enhanced multicloud cryptographic visibility and compliance
New Torq HyperSOC leverages AI for threat investigation and remediation
New Oleria service aims to tackle modern identity challenges in cybersecurity
Bitsight and Moody’s team up to offer new ‘Implied Cyber Threat’ risk management tool
Attacks and warnings
Cisco warns of state-sponsored cyberattacks targeting government networks
Zscaler report warns of AI’s growing role in sophisticated phishing attacks
Google Mandiant report finds surprising fall in time to detect cyber intrusions
Coalition reveals uptick in cyber insurance claims driven by ransomware in 2023
Elsewhere in tech: Net neutrality returns, noncompetes depart
That took awhile: FCC reinstates net neutrality rules for internet providers
That took awhile too: FTC bans noncompete clauses that prevent US workers from changing jobs
This will be a long battle, and the fact that there’s such a battle over an algorithm, essentially, suggests that there’s good reason to be cautious about China’s intentions: TikTok reportedly plans to challenge potential US ban in court and Biden signs law requiring ByteDance to sell TikTok or face US ban And the EU is circling too: EU opens probe into ‘toxic’ TikTok Lite and addiction concerns
Robotics heats up again: AI investors turn their attention — and deep pockets — to robotics (from The Information) and Pudu Robotics rolls out robots for navigating industrial environments
Amazon grounds Prime Air drone deliveries in California, shifts focus to new markets
Carv raises $10M to build blockchain data layer for gaming and AI
Movement Labs raises $38M to add Facebook’s Move to Ethereum blockchain
Mixed reality’s future slowly gets more real:
Meta makes its Horizon OS mixed reality operating system available to third parties
Swave Photonics debuts Holographic eXtended Reality display with tiny-pixel technology
Augmented reality creation platform Trace launches with $2M
Comings and goings
Automation Anywhere named Tim McDonough, formerly Intel’s VP and chief marketing officer of its AI and data centers, as its new CMO.
Jeff Reed, formerly Google Cloud’s VP of product for security, has joined security firm Vectra AI as its first chief product officer.
Atlassian co-founder and co-CEO Scott Farquhar is leaving the job in August but will remain a special adviser and board member. Mike Cannon-Brookes will become sole CEO. Atlassian also reported on April 25 that earnings and revenue topped estimates but its stock fell 6% in extended trading.
Dataminr’s new president is former Armis President Brian Gumbel.
Christophe Fouquet replaced Peter Wennink as CEO of chipmaking gear maker ASML.
Oracle is moving its headquarters from Austin to Nashville… for the healthcare industry concentration there, so it says.
What’s next
Another big earnings week coming, led by Amazon and Apple:
Monday, April 29: Samsung, NXP Semi and F5
Tuesday, April 30: Amazon, AMD, Commvault and Supermicro
Wednesday, May 1: Qualcomm, Informatica, Extreme Networks, Tenable, Freshworks and Fastly
Thursday, May 2: Apple, Cloudflare, Coinbase, Block, Fortinet and Five9
Event coverage coming the following week from theCUBE and SiliconANGLE:
What to expect during the MongoDB.local NYC event: Join May 2
What to expect at Red Hat Summit: Join May 6-8
What to expect during the RSA Conference: Join May 6-9
What to expect during Boomi World: Join May 8-9