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Microsoft CEO Satya Nadella, right, greets OpenAI CEO Sam Altman during the OpenAI DevDay event in San Francisco on Nov. 6, 2023.

Justin Sullivan | Getty Images News | Getty Images

Tech giants aren’t doing much acquiring these days, due mostly to an unfavorable regulatory environment. But they’re finding other ways to spend billions of dollars on the next big thing.

Amazon’s $2.75 billion investment in artificial intelligence startup Anthropic, announced this week, was its largest venture deal and the latest example of the AI gold rush that’s prompting the biggest tech companies to fling open their wallets.

Anthropic is the developer behind the AI model Claude, which competes with GPT from Microsoft-backed OpenAI, and Google’s Gemini. Along with Meta and Apple, they’re all racing to integrate generative AI into their vast portfolios of products and features to ensure they don’t fall behind in a market that’s predicted to top $1 billion in revenue within a decade.

In 2023, investors pumped $29.1 billion combined into nearly 700 generative AI deals, an increase of more than 260% in value from the prior year, according to PitchBook.

A significant chunk of that money was strategic, in that it came from tech companies rather than venture capitalists or other institutions. Fred Havemeyer, head of U.S. AI and software research at Macquarie, said a fear of missing out is one factor driving their decisions.

“They definitely don’t want to miss out on being part of the AI ecosystem,” Havemeyer said. “I definitely think that there’s FOMO in this marketplace.”

Fear of missing out is underpinning 'super-charged momentum market': Evercore ISI's Julian Emanuel

The hefty investments are necessary because AI models are notoriously expensive to build and train, requiring thousands of specialized chips that, to date, have largely come from Nvidia. Meta, which is developing its own model called Llama, has said it’s spending billions on Nvidia’s graphics processing units, one of the many companies that’s helped the chipmaker bolster year-over-year revenue by more than 250%.

Whether going the building or investing route, there are a finite number of companies that can afford to play in the market. In addition to developing the chips, Nvidia has emerged as one of Silicon Valley’s top investors, taking stakes in a number of emerging AI companies, partly as a way to make sure its technology gets widely deployed. Similarly, Microsoft, Google and Amazon sometimes offer cloud credits as part of their investments.

In the Amazon-Anthropic deal announced on Wednesday, the two companies said they’ll work closely together in a variety of ways. Anthropic will be using Amazon Web Services for its computing needs as well as Amazon’s chips. Anthropic’s models will be distributed by Amazon to AWS customers.

Earlier this month, Anthropic launched Claude 3, its most powerful model and one that it says lets users upload photos, charts, documents and other types of unstructured data for analysis and answers.

Microsoft got into the business of generative AI investing earlier, putting $1 billion into OpenAI in 2019. The size of its investment has since swelled to about $13 billion. Microsoft heavily uses OpenAI’s model and offers open source models on its Azure cloud.

Alphabet is playing the part of builder and investor. The company has refocused much of its product development on generative AI, and its newly rebranded Gemini model, adding features into search, documents, maps and elsewhere. Last year, Google committed to invest $2 billion in Anthropic, after previously confirming it had taken a 10% stake in the startup alongside a large cloud contract between the two companies.

In this photo illustration, Gemini Ai is seen on a phone on March 18, 2024 in New York City. 

Michael M. Santiago | Getty Images

Havemeyer said tech giants aren’t just throwing money into the “hype cycle,” as these investments in AI startups align with their product road maps.

“I don’t think it’s frivolous,” he said.

Havemeyer said that alliances with big cloud providers not only bring much-needed cash to startups but also help them sign up customers.

The cloud companies are saying, “Come to us, work on our platform, have native access to the latest and greatest AI models, and also use our infrastructure,” Havemeyer said. “It’s also part of a much larger ecosystem play.”

“We’re seeing a lot of alliances appearing among those hyperscalers that have substantial scale, infrastructure and very deep pockets,” he added.

‘Shape the next decade’

In recent earnings calls, tech execs reiterated their focus on generative AI, making it clear to investors that they have to spend money to make money, whether it’s on internal development or through investing in startups.

Microsoft Chief Financial Officer Amy Hood said last year the company was adjusting its “workforce toward the AI-first work we’re doing without adding material number of people to the workforce.” She said Microsoft will continue to prioritize investing in AI as “the thing that’s going to shape the next decade.”

Leaders of Google, Apple and Amazon have also suggested to investors that they’re willing to cut costs broadly across departments in order to redirect more funding toward their AI efforts.

Startups are among the beneficiaries.

Microsoft has taken stakes in Mistral, Figure and Humane, in addition to OpenAI. The company invested in Inflection AI before the startup essentially dissolved and joined Microsoft this month. Mistral is an open source-focused company that uses Azure’s cloud and offers its service to Azure clients.

Startup Figure AI is developing general-purpose humanoid robots.

Figure AI

Figure, a startup seeking to build a robot that walks like a human, has raised money from Microsoft, OpenAI and Nvidia and was valued last month at $2.6 billion.

Amazon’s biggest bet is Anthropic, pouring in a total of $4 billion so far. The company has also invested in open source AI platform developer Hugging Face.

Google’s investments include Essential AI, which is developing consumer AI programs and is backed by AMD and Nvidia. Alphabet and Nvidia are also investors in Runway ML, a generative AI company known for its video-editing and visual effects tools. Others in Nvidia’s portfolio include Mistral, Perplexity and Cohere.

Meanwhile, many of the Big Tech companies continue to spend internally on developing their own models.

Microsoft has invested in many of the techniques underpinning generative AI through its Microsoft Research division. Amazon reportedly has plans to train a bigger, more data-hungry model than even OpenAI’s GPT-4.

Apple researchers recently published details of their work on MM1, a family of small AI models that can take both text and visual input. Apple is in a different position than its peers in that it doesn’t sell a cloud service. Still, the tech giant is reportedly looking for AI partners, including potentially Google in the U.S. and Baidu in China. An Apple representative declined to comment on AI partners.

Creativity in dealmaking

Daniel Newman, CEO of technology analysis firm Futurum Group, said tech companies are having to get clever when it comes to investing in AI.

For example, OpenAI’s investment from Microsoft included profit sharing in a nonprofit wing, as well as credits to use Microsoft’s cloud service. Microsoft’s deal for Inflection AI amounted to an expensive acquihire, with some reports putting the total outlay at $1 billion. As part of the transaction, Microsoft hired Inflection AI founder Mustafa Suleyman to lead Copilot AI initiatives.

“I think we’re starting to see some creativity and dealmaking,” said Newman. With respect to Amazon’s agreement with Anthropic, he said an acquisition would be “a lot harder than investing.”

That’s because regulators across the globe are cracking down on Big Tech, making it more difficult to do sizable acquisitions. Even the investments are attracting scrutiny.

In January, the Federal Trade Commission announced it will conduct an extensive inquiry into the field’s biggest players in AI, including Amazon, Alphabet, Microsoft, Anthropic and OpenAI.

FTC Chair Lina Khan described the probe as a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.” The regulator has the authority to order companies to file specific reports or answer questions in writing about their businesses.

“We know regulators are becoming increasingly focused on the traditional path of closing an acquisition,” Newman said. “Right now, the game is having access to the most fundamental IP.”

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Inside a Utah desert facility preparing humans for life on Mars

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Inside a Utah desert facility preparing humans for life on Mars

Hidden among the majestic canyons of the Utah desert, about 7 miles from the nearest town, is a small research facility meant to prepare humans for life on Mars.

The Mars Society, a nonprofit organization that runs the Mars Desert Research Station, or MDRS, invited CNBC to shadow one of its analog crews on a recent mission.

MDRS is the best analog astronaut environment,” said Urban Koi, who served as health and safety officer for Crew 315. “The terrain is extremely similar to the Mars terrain and the protocols, research, science and engineering that occurs here is very similar to what we would do if we were to travel to Mars.”

SpaceX CEO and Mars advocate Elon Musk has said his company can get humans to Mars as early as 2029.

The 5-person Crew 315 spent two weeks living at the research station following the same procedures that they would on Mars.

David Laude, who served as the crew’s commander, described a typical day.

“So we all gather around by 7 a.m. around a common table in the upper deck and we have breakfast,” he said. “Around 8:00 we have our first meeting of the day where we plan out the day. And then in the morning, we usually have an EVA of two or three people and usually another one in the afternoon.”

An EVA refers to extravehicular activity. In NASA speak, EVAs refer to spacewalks, when astronauts leave the pressurized space station and must wear spacesuits to survive in space.

“I think the most challenging thing about these analog missions is just getting into a rhythm. … Although here the risk is lower, on Mars performing those daily tasks are what keeps us alive,” said Michael Andrews, the engineer for Crew 315.

Watch the video to find out more.

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Apple scores big victory with ‘F1,’ but AI is still a major problem in Cupertino

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Apple scores big victory with 'F1,' but AI is still a major problem in Cupertino

Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen 

Mike Segar | Reuters

Apple had two major launches last month. They couldn’t have been more different.

First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.

While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.

“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.

Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.

The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.

(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.

Jamie Mccarthy | Getty Images Entertainment | Getty Images

Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.

Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.

Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.

But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.

“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.

But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.

Replacing Siri’s engine

At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.

Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”

The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.

“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.

Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.

It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.

Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.

Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.

“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.

Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.

Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.

Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.

The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.

Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.

“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”

Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.

The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.

In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.

“I can’t see Apple doing that,” Martin said.

Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.

Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.

Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.

WATCH: Jefferies upgrades Apple to ‘Hold’

Jefferies upgrades Apple to 'Hold'

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Musk backs Sen. Paul’s criticism of Trump’s megabill in first comment since it passed

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Musk backs Sen. Paul's criticism of Trump's megabill in first comment since it passed

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.

Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”

The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.

Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.

On Monday, Musk called it the “DEBT SLAVERY bill.”

The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.

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The bill includes trillions of dollars in tax cuts, increased spending for immigration enforcement and large cuts to funding for Medicaid and other programs.

It also cuts tax credits and support for solar and wind energy and electric vehicles, a particularly sore spot for Musk, who has several companies that benefit from the programs.

“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in a social media post in early June as the pair traded insults and threats.

Shares of Tesla plummeted as the feud intensified, with the company losing $152 billion in market cap on June 5 and putting the company below $1 trillion in value. The stock has largely rebounded since, but is still below where it was trading before the ruckus with Trump.

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Tesla one-month stock chart.

— CNBC’s Kevin Breuninger and Erin Doherty contributed to this article.

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