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Intel CEO Pat Gelsinger speaks while showing silicon wafers during an event called AI Everywhere in New York, Thursday, Dec. 14, 2023.

Seth Wenig | AP

Intel’s long-awaited turnaround looks farther away than ever after the company reported dismal first-quarter earnings. Investors pushed the stock down 10% on Friday to their lowest level of the year.

Although Intel’s revenue is no longer shrinking and the company remains the biggest maker of processors that power PCs and laptops, sales in the first quarter trailed estimates. Intel also gave a soft forecast for the second quarter, suggesting weak demand.

It was a tough showing for CEO Pat Gelsinger, who’s early in his fourth year at the helm.

But Intel’s problems are decades in the making.

Before Gelsinger returned to the company in 2021, the company, once synonymous with “Silicon Valley,” had lost its edge in semiconductor manufacturing to overseas rivals like Taiwan Semiconductor Manufacturing Company. Now, in a high-risk quest, it’s spending billions per quarter to regain ground.

“Job number one was to accelerate our efforts to close the technology gap that was created by over a decade of under-investment,” Gelsinger told investors on Thursday. He said the company is still on track to catch up by 2026.

Investors remain skeptical. Intel is the worst-performing tech stock in the S&P 500 this year, down 37%. Meanwhile, the two best-performing stocks in the index are chipmaker Nvidia and Super Micro Computer, which has been boosted by surging demand for Nvidia-based AI servers.

Intel, long the most valuable U.S. chipmaker, is now one-sixteenth the size of Nvidia by market cap. It’s also smaller than Qualcomm, Broadcom, Texas Instruments, and AMD. For decades, it was the largest semiconductor company in the world by sales, but suffered seven straight quarters of revenue declines recently, and was passed by Nvidia last year.

Gelsinger is betting the company on a risky business model change. Not only will Intel make its own branded processors, but it will act as a factory for other chip companies that outsource their manufacturing — a group of companies that includes Nvidia, Apple, and Qualcomm. Its success acquiring customers will depend on Intel regaining “process leadership,” as the company calls it.

Other semiconductor companies would like an alternative to TSMC so they don’t have to rely on a single supplier. U.S. politicians including President Biden call Intel an American chip champion and say the company is strategically an important part of the U.S. processor supply chain.

“Intel is a big iconic semiconductor company which has been the leader for many years,” said Nicholas Brathwaite, managing partner at Celesta Capital, which invests in semiconductor companies. “And I think it’s a company that is worth trying to save, and they have to come back to competitiveness.”

But the company isn’t doing itself any favors.

“I think everyone has been hearing them say the next quarter will be better for two, three years now,” said Counterpoint analyst Akshara Bassi.

Intel has fumbled the ball for years. It missed the mobile chip boom with the unveiling of the iPhone in 2007. It’s been largely on the sidelines of the artificial intelligence craze while companies like Meta, Microsoft and Google order as many Nvidia chips as they can.

Here’s how Intel ended up where it is today.

Missed out on the iPhone

The late Apple CEO Steve Jobs unveiling the first iPhone in 2007.

David Paul Morris | Getty Images News | Getty Images

The iPhone could have had an Intel chip inside. When Apple developed the first iPhone, then-CEO Steve Jobs visited former Intel CEO Paul Otellini, according to Walter Isaacson’s 2011 biography “Steve Jobs.”

They discussed whether Intel should power the iPhone, which had not been released yet, Jobs and Otellini told Isaacson. When the iPhone was first revealed, it was marketed as a phone that ran the Apple Mac operating system. It would’ve made sense to use Intel chips, which ran on the best desktops at the time, including Apple’s Macs.

Jobs said that Apple passed on Intel’s chips because the company was “slow” and Apple didn’t want the same chips to be sold to its competitors. Otellini said that while the tie-up would have made sense, the two companies couldn’t agree on a price or who owned the intellectual property, according to Isaacson.

The deal never happened. Apple chose Samsung chips when the iPhone launched in 2007. Apple bought PA Semi in 2008 and introduced its first homegrown iPhone chip in 2010.

Within five years, Apple started shipping hundreds of millions of iPhones. Overall smartphone shipments — including Android phones designed to compete with Apple — surpassed PC shipments in 2010.

Nearly every modern smartphone uses an Arm-based chip instead of Intel’s x86 technology which was created for PCs in 1981 and is still in use.

Arm chips built by Apple and Qualcomm consume less power than Intel’s processors, making them more desirable for small devices like phones that run on batteries.

Arm-based chips quickly improved due to the enormous manufacturing volumes and the demands of an industry that needs new chips every year with faster performance and fresh features. Apple started placing huge orders with TSMC to build its iPhone chips, starting with the A8 in 2014. It gave TSMC the cash to upgrade its manufacturing equipment annually and surpass Intel.

By the end of the decade, some benchmarks had the fastest phone processors rivaling Intel’s PC chips for some tasks while consuming far less power. Around 2017, mobile chips from Apple and Qualcomm started adding AI parts to their chips called neural processing units, another advancement over Intel’s PC processors. The first Intel-based laptop with an NPU shipped late last year.

Intel has since lost share in its core PC chip business to chips that grew out of the mobile revolution.

Apple stopped using Intel in its PCs in 2020. Macs now use Arm-based chips based on the ones used in iPhones. Some of the first mainstream Windows laptops with Arm-based chips are coming out later this year. Low-cost laptops running Google ChromeOS are increasingly using Arm, too.

“Intel lost a big chunk of their market share because of Apple, which is about 10% of the market,” Gartner analyst Mikako Kitagawa said.

Intel made efforts to break into smartphones. It released an x86-based mobile chip called Atom that was used in the 2012 Asus Zenphone. But it never sold well and the product line was dead by 2015.

Intel’s mobile stumble set the stage for a lost decade.

All about transistors

US President Joe Biden holds a wafer of chips as he tours the Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024.

Brendan Smialowski | AFP | Getty Images

Processors get faster with more transistors. Each one allows them to do more calculations. The original Intel microprocessor from 1971, the 4004, had about 2,000 transistors. Now Intel’s chips have billions.

Semiconductor companies fit more transistors on chips by shrinking them. The size of the transistor represents the “process node.” Smaller numbers are better.

The original 4004 used a 10-micrometer process. Now, TSMC’s best chips use a 3-nanometer process. Intel is currently at 7-nanometers. Nanometers are 1,000 times smaller than micrometers.

Engineers, especially at Intel, took pride in regularly delivering smaller transistors. Brathwaite, who worked at Intel in the 1980s, said Intel’s process engineers were the company’s “crown jewels.” People in the technology industry relied on “Moore’s Law,” coined by Intel co-founder Gordon Moore, that said the amount of computing power would double and become cheaper at predictable intervals, roughly every two years.

Moore’s Law meant that Intel’s software partners, like Microsoft, could count on the next generation of PCs or servers being more powerful than the current generation.

The expectation of continuous improvement at Intel was so strong that it even had a nickname: “tick-tock development.” Every two years, Intel would release a chip on a new process (tick) and in the subsequent year, it would refine its design and technology (tock.)

In 2015, under CEO Brian Krzanich, it became clear that Intel’s 10nm process was delayed, and that the company would continue shipping its most important PC and server processors using its 14nm process for longer than the normal two years. The “tick-tock” process had added an extra tock by the time the 14nm chips shipped in 2017. Intel officials today say that the issue was underinvestment, specifically on EUV lithography machines made by ASML, which TSMC enthusiastically embraced.

The delays compounded at Intel. The company missed its deadlines for the next process, 7nm — eventually revealing the issue in a bullet point in the small print in a 2020 earnings release, causing the stock to plunge, and clearing the way for Gelsinger, a former Intel engineer, to take over.

While Intel was struggling to keep its legendary pace, AMD, Intel’s historic rival for server and PC chips, took advantage.

AMD is a “fabless” chip designer. It designs its chips in California, and has TSMC or GlobalFoundries manufacture them. TSMC didn’t have the same issues with 10nm or 7nm, and that meant that AMD’s chips were competitive or better than Intel’s in the latter half of the decade, especially for certain tasks.

AMD, which barely had market share in server CPUs a decade ago, started taking its slice. AMD made over 20% of server CPUs sold in 2022, and shipments grew 62% that year, according to an estimate from CounterPoint Research last year. AMD surpassed Intel’s market cap the same year.

Missing on the AI boom

Nvidia founder and CEO Jensen Huang displays products on stage during the annual Nvidia GTC Conference at the SAP Center in San Jose, California, on March 18, 2024.

Josh Edelson | Afp | Getty Images

Graphics processor units, or GPUs, were originally designed to play sophisticated computer games. But computer scientists knew they were also ideal for running the kind of parallel calculations that AI algorithms require.

The broader business community caught on after OpenAI released ChatGPT in 2022, helping Nvidia triple sales over the past year. Companies are spending money on pricey servers again.

AI-oriented GPU-based servers sometimes pair as many as eight Nvidia GPUs to one Intel CPU. In older servers, the Intel CPU was almost always the most expensive and important part. In a GPU-based server, it’s Nvidia’s chips.

Nvidia recently announced a version of its latest “Blackwell” GPU that cuts Intel out entirely. Two Nvidia B100 GPUs are paired with one Arm-based processor.

Almost all Nvidia GPUs used for AI are made by TSMC in Taiwan, using leading-edge techniques to produce the most advanced chip.

Intel doesn’t have a GPU competitor to Nvidia’s AI accelerators, but it has an AI chip called Gaudi 3. Intel started focusing on AI for servers in 2018 when it bought Habana Labs, whose technology became the basis for the Gaudi chips. The chip is manufactured on a 5nm process, which Intel doesn’t have, so the company relies on an external foundry.

Intel says it expects $500 million in Gaudi 3 sales this year, mostly in the second half. For comparison, AMD expects about $2 billion in annual AI chip revenue. Meanwhile, analysts polled by FactSet expect Nvidia’s data center business — its AI GPUs — to account for $57 billion in sales during the second half of the year.

Still, Intel sees an opportunity and has recently been talking up a different AI story — it could eventually be the American producer of AI chips, maybe even for Nvidia.

The U.S. government is subsidizing a massive Intel fab outside of Columbus, Ohio, as part of $8.5 billion in loans and grants toward U.S. chipmaking. Gelsinger said last month that the plant will offer leading-edge manufacturing when it comes online in 2028, and will make AI chips — perhaps those of Intel’s rivals, Gelsinger said on a call with reporters in March.

Intel’s death march

US President Joe Biden (C) stands behind a table, next to Intel’s CEO Pat Gelsinger (L) as they look at wafers while touring the Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024.

Brendan Smialowski | AFP | Getty Images

Intel has faced its old failures since Gelsinger took the helm in 2021, and is actively trying to catch up to TSMC through a process that Intel calls “four nodes in five years.”

It hasn’t been easy. Gelsinger referred to its goal to regain leadership as a “death march” in 2022.

Now, the march is starting to reach its destination, and Intel said on Thursday that it’s still on track to catch up by 2026. At that point, TSMC will be shipping 2nm chips. Intel said it will begin producing its “18A” process, equivalent to 2nm, by 2025.

It hasn’t been cheap. Intel reported a $2.5 billion operating loss in its foundry division on $4.4 billion in mostly internal sales. The sums represent the vast investments Intel is making in facilities and tools to make more advanced chips.

“Setup costs are high and that’s why there’s so much cash burn,” said Bassi, the CounterPoint analyst. “Running a foundry is a capital-intensive business. That’s why most of the competitors are fabless, they are more than happy to outsource it to TSMC.”

Intel last month reported a $7 billion operating loss in its foundry in 2023.

“We have a lot of these investments to catch up flowing through the P&L,” Gelsinger told CNBC’s Jon Fortt on Thursday. “But basically, what we expect in ’24 is the trough.”

Not many companies have officially signed up to use Intel’s fabs. Microsoft has said it will use them to manufacture its server chips. Intel says it’s already booked $15 billion in contracts with external companies for the service.

Intel will help its own business and enable better performance in its products if it regains the lead in making the smallest transistors. If that happens, Intel will be back, as Gelsinger is fond of saying.

On Thursday, Gelsinger said demand was high for this year’s forthcoming server chips using Intel 3, or its 3nm process, and that it could win customers who had defected to competitors.

“We’re rebuilding customer trust,” Gelsinger said on Thursday. “They’re looking at us now saying ‘Oh, Intel is back.'”

WATCH: Intel’s traditional business hasn’t grown fast enough

Intel's traditional business hasn't grown fast enough to cover its manufacturing costs: Chris Caso

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Ether and related stocks gain amid the latest crypto craze: Tokenization

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Ether and related stocks gain amid the latest crypto craze: Tokenization

A representation of cryptocurrency Ethereum is placed on a PC motherboard in this illustration taken on June 16, 2023.

Dado Ruvic | Reuters

Stocks tied to the price of ether, better known as ETH, were higher on Wednesday, reflecting renewed enthusiasm for the crypto asset amid a surge of interest in stablecoins and tokenization.

BitMine Immersion Technologies, a bitcoin miner that announced plans this week to make ETH its primary treasury reserve asset, jumped about 20%. It’s gained more than 1,000% since the announcement. Betting platform SharpLink Gaming, which has also initiated an ETH treasury strategy, added more than 11%. Bit Digital, which last week exited bitcoin mining to focus on its ETH treasury and staking plans, jumped more than 6%.

“We’re finally at the point where real use cases are emerging, and stablecoins have been the first version of that at scale but they’re going to open the door to a much bigger story around tokenizing other assets and using digital assets in new ways,” Devin Ryan, head of financial technology research at Citizens.

On Tuesday, as bitcoin ETFs snapped a 15-day streak of inflows, ether ETFs saw $40 million in inflows led by BlackRock’s iShares Ethereum Trust. ETH ETFs came back to life in June after much concern that they were becoming zombie funds.

The price of the coin itself was last higher by 5%, according to Coin Metrics, though it’s still down 24% this year.

Ethereum has been struggling with an identity crisis fueled by uncertainty about the network’s value proposition, weaker revenue since its last big technical upgrade and increasing competition from Solana. Market volatility, driven by geopolitical uncertainty this year, has not helped.

The Ethereum network’s smart contracts capability makes it a prominent platform for the tokenization of traditional assets, which includes U.S. dollar-pegged stablecoins. Fundstrat’s Tom Lee this week called Ethereum “the backbone and architecture” of stablecoins. Both Tether (USDT) and Circle‘s USD Coin (USDC) are issued on the network.

Fundstrat's Tom Lee on being named chairman of BitMine Immersion Technologies

BlackRock’s tokenized money market fund (known as BUIDL, which stands for USD Institutional Digital Liquidity Fund) also launched on Ethereum last year before expanding to other blockchain networks.

Tokenization is the process of issuing digital representations on a blockchain network of publicly traded securities, real world assets or any other form of value. Holders of tokenized assets don’t have outright ownership of the assets themselves.

The latest wave of interest in ETH-related assets follows an announcement by Robinhood this week that it will enable trading of tokenized U.S. stocks and ETFs across Europe, after a groundswell of interest in stablecoins throughout June following Circle’s IPO and the Senate passage of its proposed stablecoin bill, the GENIUS Act.

Ether, which turns 10 years old at the end of July, is sitting about 75% off its all-time high.

Don’t miss these cryptocurrency insights from CNBC Pro:

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China’s Honor launches new challenge to Samsung with thin foldable smartphone and a big battery

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China's Honor launches new challenge to Samsung with thin foldable smartphone and a big battery

Honor launched the Honor Magic V5 on Wednesday July 2, as it looks to challenge Samsung in the foldable space.

Honor

Honor on Wednesday touted the slimness and battery capacity of its newly launched thin foldable phone, as it lays down a fresh challenge to market leader Samsung.

The Honor Magic V5 goes will initially go on sale in China, but the Chinese tech firm will likely bring the device to international markets later this year.

The company, which spun off from Chinese tech giant Huawei in 2020, is looking to stand out from rivals with key features of the Magic V5, like artificial intelligence, battery and size.

Honor said the Magic V5 is 8.8 mm to 9mm when folded, depending on the color choice. The phone’s predecessor, the Magic V3 — Honor skipped the Magic V4 name — was 9.2 mm when folded. Honor said the Magic V5 weighs 217 grams to 222 grams, again, depending on the color model. The previous version was 226 grams.

In China, Honor will launch a special 1 terabyte storage size version of the Magic V5, which it says will have a battery capacity of more than 6000 milliampere-hour — among the highest for foldable phones.

Honor has tried hard to tout these features, as competition in foldables ramps up, even as these types of devices have a very small share of the overall smartphone market.

Honor vs. Samsung

Foldables represented less than 2% of the overall smartphone market in 2024, according to International Data Corporation. Samsung was the biggest player with 34% market share followed by Huawei with just under 24%, IDC added. Honor took the fourth spot with a nearly 11% share.

Honor is looking to get a head start on Samsung, which has its own foldable launch next week on July 9.

Francisco Jeronimo, a vice president at the International Data Corporation, said the Magic V5 is a strong offering from Honor.

“This is the dream foldable smartphone that any user who is interested in this category will think of,” Jeronimo told CNBC, pointing to features such as the battery.

“This phone continues to push the bar forward, and it will challenge Samsung as they are about to launch their seventh generation of foldable phones,” he added.

The thinness of a foldable phone has become a battleground for smartphone makers to appeal to consumers who want the large screen size the device has to offer without extra weight.

At its event next week, Samsung is expected to release a foldable that is thinner than its predecessor and could come close to challenging Honor’s offering by way of size, analysts said. If that happens, then Honor will be facing more competition, especially against Samsung, which has a bigger global footprint.

“The biggest challenge for Honor is the brand equity and distribution reach vs Samsung, where the Korean vendor has the edge,” Neil Shah, co-founder of Counterpoint Research, told CNBC.

Honor’s push into international markets beyond China is still fairly young, with the company looking to build up its brand.

“Further, if Samsung catches up with a thinner form-factor in upcoming iterations, as it has been the real pioneer in foldables with its vertical integration expertise from displays to batteries, the differentiating factor might narrow for Honor,” Shah added.

Vertical integration refers to when a company owns several parts of a product’s supply chain. Samsung has a display and battery business which provides the components for its foldables.

Honor talks up AI

Smartphone players, including Honor, have also looked to stand out via the AI features available on their device.

In March, Honor pledged a $10 billion investment in AI over the next five years, with part of that going toward the development of next-generation agents that are seen as more advanced personal assistants.

Honor said its AI assistant Yoyo can interact with other AI models, such as those created by DeepSeek and Alibaba in China, to create presentation decks.

The company also flagged its AI agent can hail a taxi ride across multiple apps in China, automatically accepting the quickest ride to arrive? and cancelling the rest.

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AI virtual personality YouTubers, or ‘VTubers,’ are earning millions

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AI virtual personality YouTubers, or ‘VTubers,’ are earning millions

One of the most popular gaming YouTubers is named Bloo, and has bright blue wavy hair and dark blue eyes. But he isn’t a human — he’s a fully virtual personality powered by artificial intelligence.

“I’m here to keep my millions of viewers worldwide entertained and coming back for more,” said Bloo in an interview with CNBC. “I’m all about good vibes and engaging content. I’m built by humans, but boosted by AI.”

Bloo is a virtual YouTuber, or VTuber, who has built a massive following of 2.5 million subscribers and more than 700 million views through videos of him playing popular games like Grand Theft Auto, Roblox and Minecraft. VTubers first gained traction in Japan in the 2010s. Now, advances in AI are making it easier than ever to create VTubers, fueling a new wave of virtual creators on YouTube.

The virtual character – whose bright colors and 3D physique look like something out of a Pixar film or the video game Fortnite – was created by Jordi van den Bussche, a long time YouTuber also known as kwebbelkop. Van den Bussche created Bloo after finding himself unable to keep up with the demands of content creation. The work no longer matched the output.

“Turns out, the flaw in this equation is the human, so we need to somehow remove the human,” said van den Bussche, a 29-year old from Amsterdam, in an interview. “The only logical way was to replace the human with either a photorealistic person or a cartoon. The VTuber was the only option, and that’s where Bloo came from.”

Jordi Van Den Bussche, YouTuber known as Kwebbelkop.

Courtesy: Jordi Van Den Bussche

Bloo has already generated more than seven figures in revenue, according to van den Bussche. Many VTubers like Bloo are “puppeteered,” meaning a human controls the character’s voice and movements in real time using motion capture or face-tracking technology. Everything else, from video thumbnails to voice dubbing in other languages, is handled by AI technology from ElevenLabs, OpenAI’s ChatGPT, Google’s Gemini and Anthropic’s Claude. Van den Bussche’s long-term goal is for Bloo’s entire personality and content creation process to be run by AI.

Van den Bussche has already tested fully AI-generated videos on Bloo’s channel, but says the results have not yet been promising. The content doesn’t perform as well because the AI still lacks the intuition and creative instincts of a human, he said. 

“When AI can do it better, faster or cheaper than humans, that’s when we’ll start using it permanently,” van den Bussche said.

The technology might not be far away.

Startup Hedra offers a product that uses AI technology to generate videos that are up to five minutes long. It raised $32 million in a funding round in May led by Andreessen Horowitz’s Infrastructure fund.

Hedra’s product, Character-3, allows users to create AI-generated characters for videos and can add dialogue and other characteristics. CEO Michael Lingelbach told CNBC Hedra is working on a product that will allow users to create self-sustaining, fully-automated characters.

Hedra’s product Character-3 allows users to make figures powered by AI that can be animated in real-time.

Hedra

“We’re doing a lot of research accelerating models like Character-3 to real time, and that’s going to be a really good fit for VTubers,” Lingelbach said. 

Character-3’s technology is already being used by a growing number of creators who are experimenting with new formats, and many of their projects are going viral. One of those is comedian Jon Lajoie’s Talking Baby Podcast, which features a hyper-realistic animated baby talking into a microphone. Another is Milla Sofia, a virtual singer and artist whose AI-generated music videos attract thousands of views. 

Talking Baby Podcast

Source: Instagram | Talking Baby Podcast

These creators are using Character-3 to produce content that stands out on social media, helping them reach wide audiences without the cost and complexity of traditional production.

AI-generated video is a rapidly evolving technology that is reshaping how content is made and shared online, making it easier than ever to produce high-quality video without cameras, actors or editing software. In May, Google announced Veo 3, a tool that creates AI-generated videos with audio.

Google said it uses a subset of YouTube content to train Veo 3, CNBC reported in June. While many creators said they were unaware of the training, experts said it has the potential to create an intellectual property crisis on the platform.

Faceless AI YouTubers

Creators are increasingly finding profitable ways to capitalize on the generative AI technology ushered in by the launch of OpenAI’s ChatGPT in late 2022.

One growing trend is the rise of faceless AI channels. These are run by creators who use these tools to produce videos with artificially generated images and voiceover that can sometimes earn thousands of dollars a month without them ever appearing on camera.

“My goal is to scale up to 50 channels, though it’s getting harder because of how YouTube handles new channels and trust scores,” said GoldenHand, a Spain-based creator who declined to share his real name.

Working with a small team, GoldenHand said he publishes up to 80 videos per day across his network of channels. Some maintain a steady few thousand views per video while others might suddenly go viral and rack up millions of views, mostly to an audience of those over the age of 65.

GoldenHand said his content is audio-driven storytelling. He describes his YouTube videos as audiobooks that are paired with AI-generated images and subtitles. Everything after the initial idea is created entirely by AI.

He recently launched a new platform, TubeChef, which gives creators access to his system to automatically generate faceless AI videos starting at $18 a month.

“People think using AI means you’re less creative, but I feel more creative than ever,” he said. “Coming up with 60 to 80 viral video ideas a day is no joke. The ideation is where all the effort goes now.”

AI Slop

As AI-generated content becomes more common online, concerns about its impact are growing. Some users worry about the spread of misinformation, especially as it becomes easier to generate convincing but entirely AI-fabricated videos.

“Even if the content is informative and someone might find it entertaining or useful, I feel we are moving into a time where … you do not have a way to understand what is human made and what is not,” said Henry Ajder, founder of Latent Space Advisory, which helps business navigate the AI landscape.

Others are frustrated by the sheer volume of low-effort, AI content flooding their feeds. This kind of material is often referred to as “AI slop,” low-quality, randomly generated content made using artificial intelligence. 

Google DeepMind Veo 3.

Courtesy: Google DeepMind

“The age of slop is inevitable,” said Ajder, who is also an AI policy advisor at Meta, which owns Facebook and Instagram. “I’m not sure what we do about it.”

While it’s not new, the surge in this type of content has led to growing criticism from users who say it’s harder to find meaningful or original material, particularly on apps like TikTok, YouTube and Instagram.

“I am actually so tired of AI slop,” said one user on X. “AI images are everywhere now. There is no creativity and no effort in anything relating to art, video, or writing when using AI. It’s disappointing.”

However, the creators of this AI content tell CNBC that it comes down to supply and demand. As the AI-generated content continues to get clicks, there’s no reason to stop creating more of it, said Noah Morris, a creator with 18 faceless YouTube channels.

Some argue that AI videos still have inherent artistic value, and though it’s become much easier to create, slop-like content has always existed on the internet, Lingelbach said.

“There’s never been a barrier to people making uninteresting content,” he said. “Now there’s just more opportunity to create different kinds of uninteresting content, but also more kinds of really interesting content too.”

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