Tech Giants Shift Focus: AI Takes Center Stage as Earnings and Strategies Evolve
Several major technology companies, including Microsoft, Meta, and Tesla, revealed shifts in strategy and significant financial updates during their respective earnings calls on Wednesday. Microsoft reported a substantial $7.6 billion increase in net income attributed to its investment in OpenAI, while Meta CEO Mark Zuckerberg expressed his conviction that artificial intelligence (AI) will become the next major media format. Meanwhile, Tesla CEO Elon Musk announced the end of production for the Model S and Model X vehicles.
Microsoft's financial boost from OpenAI highlights the growing importance of AI in the tech landscape. The software giant has invested over $13 billion in the AI lab, which is reportedly seeking additional funding at a valuation between $750 billion and $830 billion, according to Bloomberg. TechCrunch reported that OpenAI has a revenue share agreement with Microsoft, though the specifics have not been publicly confirmed by either company. In September, Microsoft and OpenAI renegotiated some of the terms of their deal when OpenAI restructured.
Meta is also making a significant pivot towards AI, with Zuckerberg stating that a future without smart glasses is "hard to imagine." He believes AI will transform social media, making feeds more immersive and interactive. "We started with text, and then moved to ph," Zuckerberg said during the earnings call, according to The Verge. He added that sales of Meta's glasses tripled within the last year, positioning them as some of the fastest-growing consumer electronics. After pivoting its Reality Labs investments away from the metaverse, Meta is doubling down on its production of AI wearables, as well as its own AI models.
In other news, Tesla is discontinuing production of the Model S sedan and Model X SUV, with the final versions of both electric vehicles being manufactured next quarter. Musk stated that the company will continue to support existing Model S and Model X owners for as long as they own the vehicles. "Its time to basically bring the Model S and X programs to an end with an honorable discharge, because were really moving into a future that is based on autonomy," he said, according to TechCrunch. The Model S and Model X are both built at the company's Fremont, California factory. Once production ends, Tesla will build Optimus robots in the same factory space, according to Musk.
In personnel news, Sebastiaan de With, co-founder of Lux and known for his work on apps like Halide, Kino, and Orion, is joining Apple's design team. De With announced the move, stating he is "so excited to work with the very best team in the world on my favorite products," according to The Verge. De With is well-known for his deep dives on Apples iPhone cameras.
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