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Apple’s iPhone 15 series devices are displayed for sale at The Grove Apple retail store on release day in Los Angeles on Sept. 22, 2023.

Patrick T. Fallon | AFP | Getty Images

Apple supplier and lead iPhone assembler Foxconn on Friday reported a revenue drop for the final quarter of 2023 and said it expects a year-over-year decline in sales for its first quarter of 2024.

Foxconn revenue for the last three months of the year totaled NT $1.85 trillion ($59.7 billion), a 5.4% dip from the year-ago period. Foxconn attributed the decrease to weak or flat sales in its computing products, smart consumer electronics products and cloud and networking products. The company’s December revenue also fell 27% year over year.

The outlook follows two downgrades to Apple stock earlier this week. Both firms pointed to softening iPhone sales.

“We are still picking up weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads and wearables,” Barclays analysts wrote in a note to investors Tuesday.

“The biggest takeaway from the latest checks is incrementally worse IP15 data points out of China, together with developed markets remaining soft,” the note said, referring to the iPhone 15. The downgrade put a drag on shares of Foxconn and other Apple suppliers such as Taiwan Semiconductor Manufacturing Company on Tuesday.

Piper Sandler issued its downgrade Thursday. “We are concerned about handset inventories entering into 1H24 and also feel that growth rates have peaked for unit sales,” Piper Sandler’s Harsh Kumar wrote, noting that he expects a recovery in the handset market sometime during the second half of 2024.

Shares of Apple are down about 5% since the start of the year.

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OpenAI creates oversight team with Sam Altman on board, begins training new model

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OpenAI creates oversight team with Sam Altman on board, begins training new model

OpenAI CEO Sam Altman speaks during the Microsoft Build conference at Microsoft headquarters in Redmond, Washington, on May 21, 2024. 

Jason Redmond | AFP | Getty Images

OpenAI on Tuesday said it created a Safety and Security Committee led by senior executives, after disbanding its previous oversight board in mid-May.

The new committee will be responsible for making recommendations to OpenAI’s board “on critical safety and security decisions for OpenAI projects and operations,” the company said.

It comes as the developer of the ChatGPT virtual assistant announced it has begun training its “next frontier model.”

The firm said in a blog post that it anticipates the “resulting systems to bring us to the next level of capabilities on our path to AGI,” or artificial general intelligence — which relates to AI that is as smart or smarter than humans. 

The formation of a new oversight team comes after OpenAI dissolved a previous team that was focused on the long-term risks of AI. Prior to that, both team leaders, OpenAI co-founder Ilya Sutskever and Jan Leike, announced their departures from the Microsoft-backed startup.

AI safety has been at the forefront of a larger debate, as the huge models that underpin applications like ChatGPT get more advanced. AI product developers are also wondering when AGI will arrive and what risks will come with it.

Bret Taylor, Adam D’Angelo, Nicole Seligman, who are all on OpenAI’s board of directors, now sit on the new safety committee alongside Altman.

Leike this month wrote that OpenAI’s “safety culture and processes have taken a backseat to shiny products.” In response to his departure, Altman said on social media platform X that he was sad to see Leike leave, adding that OpenAI has “a lot more to do”

Over the next 90 days, the safety group will evaluate OpenAI’s processes and safeguards and share their recommendations with the company’s board. OpenAI will provide an update on the recommendations that it has adopted at a later date.

– CNBC’s Hayden Field contributed to this report.

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Google criticized as AI Overview makes obvious errors, such as saying former President Obama is Muslim

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Google criticized as AI Overview makes obvious errors, such as saying former President Obama is Muslim

It’s been less than two weeks since Google debuted “AI Overview” in Google Search, and public criticism has mounted after queries have returned nonsensical or inaccurate results within the AI feature — without any way to opt out.

AI Overview shows a quick summary of answers to search questions at the very top of Google Search. For example, if a user searches for the best way to clean leather boots, the results page may display an “AI Overview” at the top with a multistep cleaning process, gleaned from information it synthesized from around the web.

But social media users have shared a wide range of screenshots showing the AI tool giving incorrect and controversial responses.

Google, Microsoft, OpenAI and other companies are at the helm of a generative AI arms race as companies in seemingly every industry rush to add AI-powered chatbots and agents to avoid being left behind by competitors. The market is predicted to top $1 trillion in revenue within a decade.

Here are some examples of errors produced by AI Overview, according to screenshots shared by users.

When asked how many Muslim presidents the U.S. has had, AI Overview responded, “The United States has had one Muslim president, Barack Hussein Obama.”

When a user searched for “cheese not sticking to pizza,” the feature suggested adding “about 1/8 cup of nontoxic glue to the sauce.” Social media users found an 11-year-old Reddit comment that seemed to be the source.

Attribution can also be a problem for AI Overview, especially in attributing inaccurate information to medical professionals or scientists.

For instance, when asked, “How long can I stare at the sun for best health,” the tool said, “According to WebMD, scientists say that staring at the sun for 5-15 minutes, or up to 30 minutes if you have darker skin, is generally safe and provides the most health benefits.”

When asked, “How many rocks should I eat each day,” the tool said, “According to UC Berkeley geologists, people should eat at least one small rock a day,” going on to list the vitamins and digestive benefits.

The tool also can respond inaccurately to simple queries, such as making up a list of fruits that end with “um,” or saying the year 1919 was 20 years ago.

When asked whether or not Google Search violates antitrust law, AI Overview said, “Yes, the U.S. Justice Department and 11 states are suing Google for antitrust violations.”

The day Google rolled out AI Overview at its annual Google I/O event, the company said it also plans to introduce assistant-like planning capabilities directly within search. It explained that users will be able to search for something like, “Create a 3-day meal plan for a group that’s easy to prepare,” and they’d get a starting point with a wide range of recipes from across the web.

“The vast majority of AI Overviews provide high quality information, with links to dig deeper on the web,” a Google spokesperson told CNBC in a statement. “Many of the examples we’ve seen have been uncommon queries, and we’ve also seen examples that were doctored or that we couldn’t reproduce.”

The spokesperson said AI Overview underwent extensive testing before launch and that the company is taking “swift action where appropriate under our content policies.”

The news follows Google’s high-profile rollout of Gemini’s image-generation tool in February, and a pause that same month after comparable issues.

The tool allowed users to enter prompts to create an image, but almost immediately, users discovered historical inaccuracies and questionable responses, which circulated widely on social media.

For instance, when one user asked Gemini to show a German soldier in 1943, the tool depicted a racially diverse set of soldiers wearing German military uniforms of the era, according to screenshots on social media platform X.

When asked for a “historically accurate depiction of a medieval British king,” the model generated another racially diverse set of images, including one of a woman ruler, screenshots showed. Users reported similar outcomes when they asked for images of the U.S. founding fathers, an 18th-century king of France, a German couple in the 1800s and more. The model showed an image of Asian men in response to a query about Google’s own founders, users reported.

Google said in a statement at the time that it was working to fix Gemini’s image-generation issues, acknowledging that the tool was “missing the mark.” Soon after, the company announced it would immediately “pause the image generation of people” and “re-release an improved version soon.”

In February, Google DeepMind CEO Demis Hassabis said Google planned to relaunch its image-generation AI tool in the next “few weeks,” but it has not yet rolled out again.

The problems with Gemini’s image-generation outputs reignited a debate within the AI industry, with some groups calling Gemini too “woke,” or left-leaning, and others saying that the company didn’t sufficiently invest in the right forms of AI ethics. Google came under fire in 2020 and 2021 for ousting the co-leads of its AI ethics group after they published a research paper critical of certain risks of such AI models and then later reorganizing the group’s structure.

In 2023, Sundar Pichai, CEO of Google’s parent company, Alphabet, was criticized by some employees for the company’s botched and “rushed” rollout of Bard, which followed the viral spread of ChatGPT.

Correction: This article has been updated to reflect the correct name of Google’s AI Overview. Also, an earlier version of this article included a link to a screenshot that Google later confirmed was doctored.

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Nvidia CEO Jensen Huang’s net worth swells from $3 billion to $90 billion in five years

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Nvidia CEO Jensen Huang's net worth swells from  billion to  billion in five years

Jensen Huang, co-founder and CEO of Nvidia, during the Nvidia GPU Technology Conference in San Jose, California, on March 19, 2024.

David Paul Morris | Bloomberg | Getty Images

Five years ago, Nvidia CEO Jensen Huang owned a stake in his chipmaker worth roughly $3 billion. After Thursday’s rally, which pushed the stock to a record, his holdings now stand at more than $90 billion.

Nvidia late Wednesday reported first-quarter earnings that topped estimates, with sales jumping more than 200% for a third straight quarter, driven by demand for artificial intelligence processors.

Huang also delivered a better-than-expected forecast and indicated to investors that the company sees insatiable demand for its AI graphics processing units, or GPUs. The company signaled its customers, especially the big cloud companies, could get a strong return on their investment in the pricey chips.

“We are fundamentally changing how computing works and what computers can do,” Huang said.

Huang owns about 86.76 million shares of Nvidia, or more than 3.5% of the company’s outstanding shares. With the stock rising over 9% to close at a price of nearly $1,038 per share on Thursday, the value of his stake rose by about $7.7 billion.

Nvidia shares have more than doubled this year after tripling in 2023. They are up about 28-fold in the past five years. Huang added shares to his stake in 2022, when the stock hit relative lows before the AI boom.

Huang, 61, founded the Silicon Valley company in 1993 to build GPUs for 3D gaming. While gaming was the company’s biggest business for decades, Nvidia has dipped into other markets, including cloud gaming subscriptions, the metaverse and cryptocurrency mining chips.

But Nvidia’s fortunes shifted dramatically in late 2022, when OpenAI released ChatGPT, opening up the concept of generative AI to the broader public. The technology showcased a future in which computers won’t just retrieve new information from databases, but can also generate new content and answers to questions from large caches of unsorted data.

OpenAI does most of its AI development on Nvidia GPUs. As other companies such as Microsoft, Google and Meta bolstered their investments in AI research and development, they needed billions of dollars worth of the latest AI chips to build out their models.

Huang has been the face of Nvidia and its principal salesperson, constantly extolling the potential and power of using the company’s GPUs for building AI.

Nvidia, which has been developing AI software and tools for more than a decade, ended up in prime position to become the top supplier to the biggest technology companies. The company now has about 80% of the market for AI chips, and Huang is among the 20 richest people in the world.

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