عربي English Türkçe اردو فارسى
Logo
Latest News
Technology

AI Spending Worries Cast Gloom over Alphabet, Microsoft

An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
TT
TT

AI Spending Worries Cast Gloom over Alphabet, Microsoft

An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo
An AI (Artificial Intelligence) sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File Photo

Investors appear to be losing patience with Big Tech's prodigious artificial intelligence investments this week after Meta Platforms signaled deeper spending and a long road to profitability.
The concession from Meta in its quarterly report late on Wednesday cast a cloud over Microsoft and Alphabet , which will both report quarterly earnings on Thursday, Reuters said.
Meta's stock sank 15% in extended trade after it forecast higher AI spending next year, while Microsoft was down 2%, Alphabet fell 3% and Nvidia dropped 1.4% in reaction.
Wall Street's heavyweight tech-related companies have been locked in a fierce battle to advance generative AI, which can create text, videos and photos from prompts and is seen as the next frontier in tech.
During Meta's earnings conference call, analysts peppered CEO Mark Zuckerberg with questions about how the company was pacing its AI investments. One analyst asked whether Meta was spending more because it saw an even bigger opportunity from AI.
"I think we've gotten more ambitious and optimistic on AI," Zuckerberg responded, pointing to Meta's recent launches of new AI models. "So all of that basically encourages me to make sure that we're investing to stay at the leading edge of this."
Alphabet and Microsoft both said earlier this year when they reported fourth-quarter results that they expected rising AI costs. The investor reaction on Wednesday indicated deepening concerns.
In a research note on Monday about Alphabet, analysts from New Street Research said the potential for materially higher capital expenditures was a worry ahead of results on Thursday.
The research firm said it now expects Alphabet's full-year capital expenditures to be $45.9 billion, up from its previous estimate of $42.7 billion.
Google has been working to catch up in the generative AI race and released Gemini, a model that can understand and create different types of information including text, audio and video.
Creating content with generative AI is energy-intensive, and Zuckerberg cited the cost as a reason for Meta's higher expenses.
Meanwhile, Microsoft has positioned itself to be a winner in AI due to its partnership with OpenAI, which kicked off the generative AI craze last year with ChatGPT, said analysts from Jefferies in a note on March 31.
Microsoft has integrated chatbots into its suite of Office products and is planning to invest more in data centers.
Industry-wide, shareholders are now focused on looking for revenue, including pricing models and whether customers can find use cases that justify the cost of generative AI, Jefferies wrote.
"Last year was spent dreaming of gen AI's potential," the analysts wrote. "This year will be about moving forward with concrete steps."

Most Viewed

 
 
Technology

Meta Ordered to Pay New Mexico $25 Billion for Deceiving Users About Privacy on Facebook

The Meta logo is seen at the Vivatech show in Paris on June 14, 2023 (AP)
The Meta logo is seen at the Vivatech show in Paris on June 14, 2023 (AP)
TT
TT

Meta Ordered to Pay New Mexico $25 Billion for Deceiving Users About Privacy on Facebook

The Meta logo is seen at the Vivatech show in Paris on June 14, 2023 (AP)
The Meta logo is seen at the Vivatech show in Paris on June 14, 2023 (AP)

A judge on Wednesday ordered Meta to pay New Mexico $25 billion after a jury found the company liable for deceiving users about privacy on Facebook, marking the biggest fine ever against the tech giant.

Facebook’s deception was intentional and executives consistently misled users about how the platform worked, state District Court Judge Francis J Mathew wrote in his ruling, according to AP.

“Facebook promised users that they (the users) controlled their data. This was false,” he said.
Jurors in September found Meta liable for over 43 million violations of New Mexico consumer protection laws for making misleading public statements about how it handled users’ personal data.

The case was brought after political consulting firm Cambridge Analytica harvested Facebook data to generate targeted political ads during the 2016 election season.

The award will serve as a warning to tech companies that New Mexico will hold them accountable, state Attorney General Raul Torrez said at a news conference.

“This judgment should be a signal, an unambiguous message, to Silicon Valley,” he said.

Meta said the ruling and Torrez’s office’s approach to enforcement “makes it all but impossible to do business in the state of New Mexico.”

“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online. We are confident we will prevail on appeal,” CJ Mahoney, the company’s chief legal officer, said in a statement.

The Menlo Park, California, company has a market value of $1.8 trillion and brought in more than $200 billion in revenue last year. Company shares traded 2% higher after Wednesday’s announcement, and it was scheduled to report its quarterly earnings later in the day.

In August, Meta reached a settlement with 48 states and territories — except New Mexico and Florida — to pay $18 billion and add stronger child-safety measures to its Facebook and Instagram platforms.

The settlement ended a trial over teen social media addiction and resolved a pivotal case years in the making that sought to hold the tech giant accountable for the role its platforms played in undermining children’s mental health. The effort targeted features designed to grab young people’s attention.

New Mexico did not join the multistate settlement, choosing to go after the company on its own.

The director of a nonprofit that supports stronger policies toward corporations said $25 billion is “a drop in the bucket for Meta,” but demonstrates people want accountability.

“Right now, they are rolling out Muse, an AI assistant encouraging people to trust it with everything from their bank accounts to their medical information,” added Nidhi Hegde, executive director of the American Economic Liberties Project. “Which is why we need more enforcers with courage and laws with actual teeth to rein them in.”

At the trial, attorneys for the state cited a 2010 Washington Post op-ed in which Facebook CEO Mark Zuckerberg wrote that the company didn’t sell user data.

Technology

Cyber Agency Warns Websites May Go Dark as PHP Prepares Critical Fix

A hand is seen on a laptop with binary codes displayed in front of the EU flag in this illustration taken, August 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
A hand is seen on a laptop with binary codes displayed in front of the EU flag in this illustration taken, August 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
TT
TT

Cyber Agency Warns Websites May Go Dark as PHP Prepares Critical Fix

A hand is seen on a laptop with binary codes displayed in front of the EU flag in this illustration taken, August 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
A hand is seen on a laptop with binary codes displayed in front of the EU flag in this illustration taken, August 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The developers of the widely used PHP programming language said on Wednesday they would release patches for two critical vulnerabilities, as EU cybersecurity officials warned organizations unable to apply the fixes should take affected websites offline.

PHP is used across large parts of the internet, and speculation has circulated over the past day that websites running the software could be exposed to serious cyber intrusions, said Reuters.

"PHP is everywhere. It quietly powers ‌WordPress, Drupal, Joomla, and ‌Magento sites, shared hosting platforms, control panels, and an awful ‌lot ⁠of software that ⁠doesn't even advertise that it runs PHP under the hood," cybersecurity company Huntress said in a blog post.

In a security update, PHP said both vulnerabilities were rated 9.2 on the CVSS v4.0 severity scale and urged users to "upgrade as soon as the release is available".

It said a patch for both vulnerabilities was scheduled for 1400 GMT on Wednesday.

Dane Knecht, the chief technology officer of Web and cloud security firm Cloudflare, said that attacks were emerging and ⁠Cloudflare was updating its firewall rules as a stopgap measure.

"We are ‌seeing early attacks emerging and are updating mitigations as ‌new vectors show up. This is a STOPGAP only. Patch as soon as PHP releases the ‌update," he said on X.

The European Union Computer Emergency Response Team (CERT-EU) said on ‌Tuesday in an advisory that the 9.2 rating indicated a risk of unauthenticated remote code execution, a type of flaw that can allow attackers to run malicious code on vulnerable systems without logging in.

CERT-EU urged organizations to prepare for the immediate patching of affected assets and said those unable ‌to do so should consider taking affected sites offline.

The Australian Cyber Security Center (ACSC) issued similar guidance, urging organizations to identify PHP ⁠systems in their environments, ⁠prepare to apply patches and monitor applications for signs of malicious activity.

"ACSC is currently not aware of active exploitation related to these vulnerabilities," the agency said.

Web hosting provider GoDaddy said the flaws could allow attackers to execute code on affected servers over the internet, potentially leading to data theft, website defacement or full system compromise.

Wordfence, a security plugin that protects WordPress websites, said all WordPress sites run on a PHP-installed server. It warned that automatic updates would not apply the fix and advised site owners to find out who is responsible for updating PHP on their sites.

PHP's security team said details of the vulnerabilities, affected versions and the fixed releases would be published when patches are issued.

CERT-EU and the ACSC said all PHP versions from PHP 5 onward could be affected, although PHP has not disclosed which versions are vulnerable.

Technology

Micron and Taiwan Union Sign Deal, Withdraw from Mediation

The newly opened Micron Advanced Assembly and Test Taiwan 2 (AATT2) facility in Taichung, Taiwan, October 15, 2026. REUTERS/Ann Wang
The newly opened Micron Advanced Assembly and Test Taiwan 2 (AATT2) facility in Taichung, Taiwan, October 15, 2026. REUTERS/Ann Wang
TT
TT

Micron and Taiwan Union Sign Deal, Withdraw from Mediation

The newly opened Micron Advanced Assembly and Test Taiwan 2 (AATT2) facility in Taichung, Taiwan, October 15, 2026. REUTERS/Ann Wang
The newly opened Micron Advanced Assembly and Test Taiwan 2 (AATT2) facility in Taichung, Taiwan, October 15, 2026. REUTERS/Ann Wang

Micron Memory Taiwan and a union representing workers at its Taichung operations said on Wednesday they had signed a labor-management agreement covering multiple issues, prompting both sides to withdraw from mediation scheduled for October 22.

The joint statement did not disclose the terms of the agreement, saying the company and the union would separately communicate details to ⁠affected employees in ⁠the coming days.

Idaho-based Micron, the world's third-largest memory chipmaker, employs about 15,000 people in Taiwan, a key manufacturing base where it produces DRAM and high-bandwidth memory chips used in AI servers.

Any disruption ⁠to Micron's Taiwan operations could affect already strained global memory chip supplies. The AI boom has boosted memory chipmakers including Micron, Samsung Electronics and SK Hynix, while also sharpening worker demands for a greater share of profits.

The agreement with the Taichung union, which represents workers at Micron's largest Taiwan operation, comes a day before a separate ⁠union ⁠representing workers in Taoyuan is due to hold a one-day warning strike over bonuses and profit-sharing.

The Taoyuan union did not immediately respond to a Reuters request for comment on whether it still planned to proceed with Thursday's strike, which had been scheduled to coincide with the mediation talks.