OpenAI wants you to think about them as critical infrastructure. Meta’s stock tanks as Zuckerberg delivers his future vision to investors. IBM acquires infrastructure management firm HashiCorp for 6.4 billion dollars and their stock drops. Spotify misses targets and confesses to struggling after layoffs – and their stock goes up.
All this and more on the “who said life was fair” edition of Hashtag Trending. I’m your host, Jim Love. Let’s get into it.
OpenAI has brought on Chris Lehane, a veteran of political wars and corporate PR battles, as its new VP of Public Works. Lehane is tasking himself with getting the public to view OpenAI’s AI models like ChatGPT as essential technology infrastructure for the modern era – just as vital as the bridges, dams and highways built decades ago.
In his first interview since taking the role, Lehane drew a direct parallel to the New Deal programs of the 1930s, saying quote: “It built out the bricks and mortar infrastructure that helped set up the U.S. to be the ‘arsenal of democracy,’ and helped make sure the industrial century translated into meaningful benefits for everyday folks.”
Lehane argues that if OpenAI succeeds with its AI ambitions, quote “by definition, democratic societies succeed.” It’s an assertion that directly aligns the interests of the well-funded startup with those of the nation itself.
This push to make AI synonymous with critical public infrastructure seems aimed at getting out ahead of increased regulatory scrutiny and potential government oversight of companies like OpenAI. By framing their technologies as vital public resources, they may be able to influence the coming debates.
Beyond governments, Lehane says he’ll be focused on engaging stakeholders globally to showcase how AI can positively impact sectors like healthcare, education and climate change. He cited his previous work explaining Airbnb’s impacts worldwide as experience relevant to this task.
OpenAI executives acknowledge the company is still small, 1/200th the size of Google, with limited resources compared to tech giants, as they take on this ambitious framing of their place in the world. But with AI development rapidly accelerating, the battle over defining this domain is well underway.
Sources include: Axios
Investors punished Meta severely today after CEO Mark Zuckerberg’s earnings call comments highlighted just how much the company is spending in pursuit of artificial intelligence and the metaverse. Despite better-than-expected quarterly results, Meta’s share price plummeted, wiping out over $200 billion in market value.
Zuckerberg opened Meta’s earnings call by talking at length about the company’s investments in AI systems like its new large language model called Llama 3 and its metaverse hardware efforts. He downplayed Meta’s core advertising business that still accounts for 98% of its revenue.
Instead, the CEO focused on how Meta’s current AI and virtual reality bets are long-term plays that will continue burning cash for years before potentially paying off. Zuckerberg said quote: “Building a leading AI will also be a larger undertaking than the other experiences we’ve added…and this is likely going to take several years.”
The comments seemed to remind investors that for all of Meta’s cost-cutting over the past year, its bleeding hasn’t stopped, especially in the metaverse division called Reality Labs which has lost over $45 billion cumulatively since 2020.
Zuckerberg said Meta will be increasing its capital expenditure forecast for 2024 to up to $40 billion to further “accelerate infrastructure investments” for its AI roadmap. He likened this investment phase to previous resource-intensive bets Meta has made, like its transition to mobile devices and the creation of new formats like Reels.
But investors appeared to sour on Zuckerberg’s long-term vision yet again. Meta’s stock tanked, falling as much as 19% in after-hours trading and vaporizing over $200 billion in market capitalization.
The CEO, who has regained Wall Street’s confidence after a brutal 2022, tried to reassure investors that sticking with Meta could pay off down the road, saying quote: “Investing to build these new scaled experiences…has been a very good long-term investment for investors who stuck with us.”
But Zuckerberg’s evangelizing this quarter seems to have tested the patience of Meta’s shareholders yet again amid the company’s continued cash burn in pursuit of becoming what he called a “leading AI” player.
Sources include: CNBC
IBM has announced it will acquire infrastructure automation company HashiCorp for $6.4 billion in cash. The deal aims to bolster IBM’s hybrid cloud platform by combining HashiCorp’s open source tools with IBM’s existing software offerings.
IBM CEO Arvind Krishna said enterprises are struggling to manage complex technology environments across multiple clouds and on-premises systems. He stated the HashiCorp acquisition will provide a “comprehensive end-to-end hybrid cloud platform” to help customers automate and secure these environments.
HashiCorp is a leading provider of open source tools for infrastructure provisioning, security, networking and application delivery. Its products like Terraform, Vault and Consul have been downloaded over 500 million times and are used by 85% of Fortune 500 companies.
Analysts say the deal makes strategic sense for IBM as it looks to accelerate its hybrid cloud and AI initiatives in the face of growing cloud competition. However, some investors were unimpressed, sending IBM’s stock down over 8% in after-hours trading perhaps on concerns about the $6.4 billion price tag.
And curiously, even though HashiCorp is open source, it won’t be part of Red Hat, it will instead be a division of IBM’s software business unit.
The acquisition is expected to close by the end of this year.
Source include: The Register
The CEO of music streaming giant Spotify is admitting that recent major job cuts have proven more disruptive than expected for the company’s operations.
When Spotify announced layoffs of 1,500 employees back in December, CEO Daniel Ek touted a new era of efficiency for the streaming platform. But in discussing Spotify’s latest earnings results, Ek acknowledged the staffing reductions caused more upheaval than anticipated.
Despite recording record quarterly profits of $179 million US on double-digit revenue growth, Spotify missed its own targets for profitability and user growth in the first three months of 2024. Ek cited operational challenges stemming from the layoffs as one key reason for the shortfall.
While defending the job cuts as the “right strategic decision,” the CEO said it took time for Spotify to regain its footing after slashing 17% of its workforce last year.
Ek said “Although there’s no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipated. It took us some time to find our footing, but more than four months into this transition, I think we’re back on track.”
When announcing the layoffs in December, Ek had criticized employees for doing too much “work around the work.” However, he did not specify which areas were most impacted by having 1,500 fewer staff.
The rare self-critical comments show that even for a leading tech company, major staffing cuts can carry larger short-term costs and disruptions than expected.
Investors, however, shrugged off the CEO’s admission, sending Spotify shares soaring over 8% on the streaming company’s continued path to profitability.
Sources include: Fortune.com
Am I getting too cynical – it does that seem that the right strategy in big tech is, forget strategy, don’t worry about goals, just lay people off.
Anyway, here’s a change of pace….
A construction startup in Portugal is turning to 3D printing to help address the shortage of affordable housing.
A two-bedroom home near Porto, Portugal was 3D printed in only 18 hours by construction technology firm Havelar. The 860 square foot residence showcases how 3D printing could revolutionize the affordable housing market.
Using a large robotic 3D printer from Danish company COBOD, Havelar extruded layers of a cement-based mixture to rapidly build the basic structure of the single-story home. While the 3D printing process took just 18 hours, human builders then spent several more weeks installing windows, doors, the roof and finishings.
In total, the entire project was completed in under two months at a cost of around $161,000 US dollars. Havelar says that’s less than half the average price per square meter for housing in the Porto region.
The cost and time savings stem from the speed and efficiency of 3D printing the core of the structure layer-by-layer based on a digital blueprint.
While relatively basic compared to some higher-end 3D printed houses, the two-bedroom, one-bathroom home demonstrates the potential for this technology to create affordable starter homes, particularly for younger buyers priced out of many markets.
A Havelar spokesperson noted that “With $161,000, it’s possible for a young couple to have the home they’ve always dreamed of, in an area with good access and services.”
Havelar aims to scale up production using more sustainable construction materials like earth and straw, with a goal of reaching carbon neutral operations by 2030.
As housing costs continue to rise, proponents say 3D printing could be a real game-changer in getting more affordable homes built quickly and cost-effectively.
And even doing the conversion from US to Canadian dollars, it’s amazing to think of paying that amount for a new home and having the construction done from start to finish in that amount of time.
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