Elon Musk announced his new company xAI which he says has the goal to understand the true nature of the universe.
Jaap Arriens | Nurphoto | Getty Images
Meet Grok, the first technology out of Elon Musk’s new AI company, xAI.
Grok, the company said, is modeled on “The Hitchhiker’s Guide to the Galaxy.” It is supposed to have “a bit of wit,” “a rebellious streak” and it should answer the “spicy questions” that other AI might dodge, according to a Saturday statement from xAI.
Leading up to the release, Musk posted on X, formerly Twitter, an example of Grok responding to a request for a step-by-step cocaine recipe.
“Oh sure!” Grok responded. “Just a moment while I pull up the recipe for homemade cocaine. You know, because I’m totally going to help you with that.”
Grok also has access to data from X, which xAI said will give it a leg-up. Musk, on Sunday, posted a side-by-side comparison of Grok answering a question versus another AI bot, which he said had less current information.
Still, xAI hedged in its statement, as with any Large Language Model, or LLM, Grok “can still generate false or contradictory information.”
The prototype is in its early beta phase, only two months in training and is available to a select number of users to test out before the company releases it more widely. Users can sign up for a waitlist for a chance to use the bot. Eventually, Musk said on X, Grok will be a feature of X Premium+, which costs $16 per month.
The Tesla and Space X CEO appears to be positioning xAI as a challenger to companies like OpenAI, Inflection and Anthropic.
On an initial round of tests based on middle school math problems and Python coding tasks, the company said that Grok surpassed “all other models in its compute class, including ChatGPT-3.5 and Inflection-1.” It was outperformed by bots with larger data troves.
“In some important respects, it is the best that currently exists,” Musk said in an X post on Friday leading up to the Grok announcement.
Grok is a term coined by Robert A. Heinlein in his 1961 science fiction novel “Stranger in a Strange Land.” In the book, ‘grok’ is a Martian term with no direct Earthling translation. Critics have debated the word’s exact definition but have settled on some version of having very deep empathy or intuition with something. Merriam-Webster defines it simply as a transitive verb that means “to understand profoundly and intuitively.”
xAI launched in July with a team stacked with former employees of OpenAI, DeepMind and more. It is still hiring for several roles.
The company’s self-stated mandate is to build artificial intelligence “to advance our collective understanding of the universe.” Musk has previously said that he believes today’s AI makers are bending too far toward “politically correct” systems. xAI’s mission, it said, is to create AI for people of all backgrounds and political views.
Grok is said to be a means of testing that AI approach “in public.”
Amazon’s online advertising business brought in $14.3 billion in the third quarter, up 19% year over year, in line with analysts’ estimates of $14.3 billion.
The Seattle tech giant revealed the financial results of its growing advertising unit as part of its latest earnings report Thursday. Amazon’s overall third-quarter sales were $158.9 billion, ahead of analysts’ estimates of $157.2 billion.
Amazon’s online advertising business is still a fraction of the company’s overall business, but its growth over the years has made it a major competitor to Alphabet and Meta, which lead the digital advertising market. Alphabet’s Google currently represents 27.7% of the worldwide digital advertising market, followed by Meta at 22.8% and Amazon with 8.8%, according to data provided to CNBC by Emarketer.
Meta’s third-quarter advertising revenue came in at $39.9 billion, which was up 19% compared with the year prior. That was slightly ahead of analysts’ expectations of $39.49 billion, according to StreetAccount. Ads accounted for 98.3% of Meta’s overall third-quarter revenue.
Alphabet generated $65.85 billion in third-quarter ad revenue, the company reported Tuesday. That was up 10% from $59.65 billion the year prior. Additionally, advertising sales for the company’s YouTube unit rose 12% year over year to $8.92 billion.
Intel CEO Pat Gelsinger holds an artificial intelligence processor as he speaks during the Computex conference in Taipei, Taiwan, on June 4, 2024.
Annabelle Chih | Bloomberg | Getty Images
Intel shares rose 9% in extended trading on Thursday after the chipmaker reported better-than-expected revenue and issued quarterly guidance that topped estimates.
Here’s how the company did in comparison with LSEG consensus:
Earnings per share: Loss of 46 cents adjusted
Revenue: $13.28 billion vs. $13.02 billion expected
Intel’s revenue declined 6% year over year in the quarter, which ended on Sept. 28, according to a statement. The company registered a net loss of $16.99 billion, or $3.88 per share, compared with net earnings of $310 million, or 7 cents per share, in the same quarter a year ago.
As part of its cost reduction plan, Intel recognized $2.8 billion in restructuring charges during the quarter. There were also $15.9 billion in impairment charges.
Intel has been mired in an extended slump due to market share losses in its core businesses and an inability to crack artificial intelligence. CEO Pat Gelsinger revealed plans during the quarter to turn the company’s foundry business into an independent subsidiary, a move that would enable outside funding options.
CNBC reported that Intel had engaged advisors to defend itself against activist investors. In late September, news surfaced that Qualcomm reached out to Intel about a possible takeover.
The Client Computing Group that sells PC chips recorded $7.33 billion in revenue, down about 7% from a year earlier and below the $7.39 billion consensus among analysts surveyed by StreetAccount.
Revenue from the Data Center and AI segment came to $3.35 billion, which was up about 9% and more than the $3.17 billion consensus from StreetAccount.
Intel called for fiscal third-quarter adjusted earnings of 12 cents per share and revenue between $13.3 billion and $14.3 billion. Analysts had expected 8 cents in adjusted earnings per share and $13.66 billion in revenue.
During the quarter, Intel announced the launch of Xeon 6 server processors and Gaudi artificial intelligence accelerators.
As of Thursday’s close, Intel shares were down about 57% in 2024, while the S&P 500 index had gained 20%.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.
Dimas Ardian | Bloomberg | Getty Images
Microsoft‘s better-than-expected earnings report wasn’t enough to prevent the stock’s steepest sell-off in two years, as investors instead focused on the company’s forecast for the current period.
Microsoft shares fell 6% on Thursday and headed for their worst day since Oct. 26, 2022, when they dropped 7.7%. That was a month before the public release of ChatGPT from Microsoft-backed OpenAI, a launch that set the stage for a boom in artificial intelligence investments.
For the period ending in December, Microsoft called for revenue in the range of $68.1 billion to $69.1 billion, implying 10.6% growth at the middle of the range. Analysts surveyed by LSEG were looking for $69.83 billion in revenue.
Revenue in Microsoft’s cloud infrastructure business, Azure, increased 33%. CFO Amy Hood said on a call with analysts that growth, in constant currency, will come in at 31% to 32% in the fiscal second quarter.
On Tuesday, Google reported 35% annual growth in its rival cloud business to $11.35 billion. Amazon, which leads the cloud infrastructure market, is scheduled to report results after the close on Thursday.
“We view Q1 results as solid across the core Azure and Office growth businesses, though tempered by a softer Q2 outlook,” analysts at BofA Global Research wrote in a report on Thursday. They still recommend buying the stock.
Fiscal first-quarter revenue increased 16% from a year earlier to $65.59 billion, exceeding the average analyst estimate of $64.51 billion, according to LSEG. Earnings per share of $3.30 topped the $3.10 average estimate.
Net income rose 11% to $24.67 billion from $22.29 billion in the year-ago quarter.
Outside suppliers are late in delivering data center infrastructure to Microsoft, meaning the company won’t be able to meet demand in the fiscal second quarter.
“I feel pretty good that going into the second half of even this fiscal year, that some of that supply-demand will match up,” CEO Satya Nadella said on the earnings call.
Microsoft’s AI investments continue to be a major focus for investors, as the company builds out its infrastructure and ramps up chip spending to handle heftier workloads. Microsoft has invested close to $14 billion in OpenAI, which was valued at $157 billion in a financing round earlier this month.
Hood said on the call she expects the company to take a $1.5 billion hit to income in the current period, mainly because of an expected loss from its investment in the AI startup.
Meanwhile, spending on property and equipment grew 50% year over year to $14.92 billion. The consensus among analysts polled by Capital IQ was $14.58 billion.
As of Thursday’s close, Microsoft shares were up a little over 8% for the year, while the Nasdaq has risen 21% during the same period.