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Microsoft CEO Satya Nadella speaks at a media briefing at the company’s campus in Redmond, Washington, on May 20, 2024.

Chona Kasinger | Bloomberg | Getty Images

Microsoft will lay off some employees who work on mixed reality, a spokesperson told CNBC on Monday. Although the cuts will affect the department that contributes to the HoloLens 2 augmented reality headset, Microsoft plans to continue selling the device.

The reduction comes a year after the software maker said it would make changes to its hardware lineup as part of a round of layoffs that hit 10,000 employees, including some in mixed reality. In the following months, Microsoft discontinued several keyboard models, causing frustration for some dedicated customers.

“Earlier today we announced a restructuring of the Microsoft’s Mixed Reality organization,” the spokesperson said in an email. “We remain fully committed to the Department of Defense’s IVAS program and will continue to deliver cutting edge technology to support our soldiers. In addition, we will continue to invest in W365 to reach the broader Mixed Reality hardware ecosystem. We will continue to sell HoloLens 2 while supporting existing HoloLens 2 customers and partners.”

Microsoft has not found great success with the HoloLens since its introduction in 2015. But the U.S. Defense Department gave a contract to the company for a modified HoloLens named the Integrated Visual Augmentation System. Soldiers who used the devices, however, reported dealing with nausea and other conditions, Bloomberg reported. Tests suggested that an updated model looked promising.

Since then, Microsoft and its highly valued technology peers have poured billions into commercializing artificial intelligence. Microsoft has raced to deploy Nvidia graphics processing units so people can use a Copilot chatbot and Microsoft-backed OpenAI’s popular ChatGPT. Premium AI features in Microsoft 365 productivity applications can write memos, draft presentations and summarize meetings.

In December, Microsoft further reduced investment in augmented reality and virtual reality, which blocks out the surrounding world, when it deprecated Windows Mixed Reality, which included tools for running applications in head-mounted displays.

The spokesperson said Microsoft will keep selling the HoloLens 2 headset that was released in 2019 but did not indicate that a new model would be coming. Insider reported in 2022 that the company had canceled a third version.

Apple brought out its own augmented reality headset, the Vision Pro, in January.

Microsoft continues to support a feature called Mesh that lets people in headsets participate in three-dimensional Teams video calls with colleagues. At the Microsoft Ignite conference in Seattle in November, CEO Satya Nadella said the company was “reimagining the way employees come together and connect using any device, whether it’s their PC, HoloLens, or Meta Quest.”

WATCH: The headset wars: How Apple Vision Pro stacks up against competition

The headset wars: How Apple Vision Pro stacks up against competition

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Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner

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Nvidia positioned to weather Trump tariffs, chip demand 'off the charts,' says Altimeter's Gerstner

Altimeter CEO Brad Gerstner is buying Nvidia

Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.

“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.

President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.

The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.

Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.

Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”

He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.

“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”

WATCH: Brad Gerstner is buying Nvidia

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YouTube announces Shorts editing features amid potential TikTok ban

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YouTube announces Shorts editing features amid potential TikTok ban

Jaque Silva | Nurphoto | Getty Images

YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok. 

The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.

Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.

The creator tools will become available later this spring, said YouTube, which is owned by Google

Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement. 

Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.

“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”

WATCH: TikTok is a digital Trojan horse, says Hayman Capital’s Kyle Bass

TikTok is a digital Trojan horse, says Hayman Capital's Kyle Bass

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.

Saul Loeb | Via Reuters

Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.

Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.

Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.

Semiconductor stocks also felt the pain, with Marvell Technology, Arm Holdings and Micron Technology falling more than 8% each. Broadcom and Lam Research dropped 6%, while Advanced Micro Devices declined more than 4% Software stocks ServiceNow and Fortinet fell more than 5% each.

Read more CNBC tech news

The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.

Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.

China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”

The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.

Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.

Evercore ISI's Amit Daryanani on keeping Apple's outperform rating despite tariffs

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