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In 2012, Amazon founder Jeff Bezos was asked by TV host Charlie Rose whether his e-commerce company would ever venture into brick-and-mortar stores. Bezos said shoppers were well-served by existing physical retailers and that Amazon wasn’t interested in launching a “me-too” product.

“We want to do something that’s uniquely Amazon,” Bezos said. “If we can find that idea, and we haven’t found it yet, but if we can find that idea, we would love to open physical stores.”

Six years later, Amazon landed on a revolutionary retail concept that it hoped would transform how people shop in brick-and-mortar stores. The company launched its first Amazon Go convenience store featuring a new kind of technology, called “Just Walk Out.”

In practice, customers would be able to load up their cart and exit the store without standing in a checkout line. Amazon soon brought cashierless checkout to its Fresh supermarkets and two Whole Foods locations. In 2020, the company began licensing Just Walk Out technology to third parties, signing on retailers in stadiums, airports and hospitals. 

But the company has since taken a sideways turn.

In April, Amazon announced it was removing cashierless checkout from its U.S. Fresh stores and Whole Foods locations, a move that coincided with CEO Andy Jassy’s efforts to rein in costs to meet rapidly changing macro conditions.

As part of that effort, Amazon also reevaluated its retail plans. The company discontinued some of its retail chains, closed eight Amazon Go stores, and hit pause on new Fresh store openings. It’s launched a handful of new Fresh stores in recent months.

In place of Just Walk Out, which typically requires ceiling-mounted cameras, shelf sensors and gated entry points, Amazon Fresh stores and Whole Foods supermarkets will feature Dash Carts. The carts track and tally up items as shoppers place them in bags, enabling people to skip the checkout line. Amazon continues to use Just Walk Out in its grab-and-go marts and UK Fresh stores. 

A woman uses a dash cart during her grocery-shopping at a Whole Foods store as Amazon launches smart shopping carts at Whole Foods stores in San Mateo, California, United States on February 25, 2024. The smart shopping cart makes grocery shopping quicker by allowing customers to scan products right into their cart as they shop and then skip the checkout line.

Tayfun Coskun | Anadolu | Getty Images

The main challenge for Amazon and other startups working on autonomous checkout is the need to scale it to enough locations and retail categories that it becomes a natural part of in-store shopping, said Jordan Berke, founder and CEO of retail consulting firm Tomorrow.

“Until that’s the case, it’s an uphill battle,” Berke said. “These technology providers, Amazon included, are going to have to subsidize and continue to invest to train the retailer, train the consumer, train the market, that this is a mainstream experience that we can all trust and not need to think about as we walk in and out of a store.”

‘The hardest problem to solve’

At one point Amazon saw Just Walk Out becoming a core part of the experience of shopping in its physical stores. The company in 2018 planned to open as many as 3,000 Amazon Go stores within a few years, Bloomberg reported at the time, citing people familiar with the plans. 

Bezos had assigned top talent from across the company, including a longtime Amazon executive who built the original Kindle e-reader, to work on cashierless checkout. The technology was considered a key ingredient in Amazon’s long-running pursuit to become a giant in the $1.6 trillion U.S. grocery market. 

When Amazon debuted Just Walk Out in January 2018, it was a “quake moment” for the industry, causing Walmart and “almost every other retailer” to leap into action and consider developing their own vision-based checkout systems, said Berke, who previously led Walmart’s e-commerce business in China.

Amazon and other retailers soon learned that automating the checkout process is “the hardest problem to solve,” Berke said. Cashierless checkout systems require a hefty upfront investment to blanket a store with overhead cameras and hire staff to label and review shopping data.   

“It meant a store had to dramatically increase its sales in order to pay off that investment,” Berke said. 

Walmart teams found as part of a cost analysis in early 2019 that it would run a retailer between $10 million and $15 million to create a similar computer vision-based checkout system for a 40,000 square foot supermarket, Berke said.

Just Walk Out became an expensive project for Amazon, too. In 2019 and 2020, the company shelled out roughly $1 billion per year, including research and development costs and capital expenditures, to “learn and scale” the technology, Berke said. He said those figures are based on discussions with a former Just Walk Out executive who left Amazon to join Walmart. Amazon didn’t provide a comment on the figures.

Many retailers have since moved on from computer vision in favor of simpler methods like mobile checkout through an app, Berke said. 

Walmart uses a self-checkout app in its stores, while supermarket chain Kroger has been experimenting with Instacart’s Caper connected shopping carts at some locations. Retailers like Target and Dollar General are rethinking self-checkout entirely due to concerns of rising theft in their stores, and have added more traditional checkout lanes.

While it’s no longer featuring Just Walk Out as prominently in its own stores, Amazon says it has inked deals with a growing list of customers. More than 200 third-party stores have paid Amazon to install the cashierless system. The company expects to double the number of third-party Just Walk Out stores this year, Jon Jenkins, who previously served as vice president of Amazon’s Just Walk Out technology, said in a recent interview. Jenkins departed Amazon in late September to become technology chief of electric bike and scooter startup Lime, according to his LinkedIn page.

Jon Jenkins, Amazon’s former vice president of Just Walk Out technology, gives a tour of the mock convenience store where the company tests its cashierless checkout system in Seattle, Washington, on August 22, 2024.

CNBC

Jenkins disputed characterizations that Amazon’s phasing out of Just Walk Out from its own supermarkets represents a setback or a sign of the technology’s demise. He said Amazon proved through tests in its own grocery stores that the technology is “incredibly capable,” noting it deployed the system in large supermarkets with “600 people in the store at the same time.”

Other startups such as AiFi and Grabango have developed autonomous systems for supermarkets, convenience stores and other retailers, but widespread adoption has been slow, as the technology remains costly and challenging to operate in large store formats. 

Inside the lab

Amazon is still fine-tuning its Just Walk Out technology.

In August, CNBC got the first on-camera look at a mock convenience store where Amazon tests the system before deploying it in third party retailers and its own stores. 

The testing lab, which it calls “beverage base camp,” is located in Amazon’s Seattle headquarters. It has faux gates that mimic the experience of scanning your smartphone or credit card to enter a Just Walk Out store. The walls are lined with shelves of typical grab-and-go products like Milky Way bars, pita chips and gum, and there are coolers stocked with Coke cans and other beverages.

Amazon sets up Just Walk Out stores by first creating a 3D scan using LiDAR machines or iPads that help it determine where to place cameras so they have the clearest view.

“The goal is to have the fewest number of cameras possible, so we optimize the camera placement so that we can get enough coverage on each fixture to see what is happening in the store,” Jenkins said.

The system determines what shoppers purchased using several inputs, including the 3D scans, a catalog of product images, the video footage, and weight sensors on the shelves. Amazon in July updated the AI system behind its Just Walk Out technology to handle all the inputs in a store simultaneously.

The new “multi-modal” system can generate receipts faster by more accurately predicting which items shoppers have picked up and put back on shelves. The company said these changes should make it “faster, easier to deploy and more efficient” for retailers who install the system in their stores.

Amazon’s “primary focus” is selling the technology to third-party businesses and deploying it in small to medium-sized store formats, where the system “tends to generate a little better [return on investment],” Jenkins said. Earlier this year, Amazon also began selling its connected grocery carts to third parties. 

Amazon in September announced several new third-party Just Walk Out stores at universities and sports stadiums.

CNBC

At one Just Walk Out store, inside Seattle’s Lumen Field, home to the NFL’s Seahawks, the company said it boosted sales by 112% last season, with 85% more transactions during the course of a game.

“It was awesome that we had our own stores as the laboratory to sort of build and launch this,” Jenkins said. “But over time, like many things at Amazon, the success of this project and the product will depend on third parties adopting the technology. There will always be more third-party stores in the world than there will be first-party stores.”

Amazon has used a similar playbook in in the past. Amazon Web Services, the company’s wildly successful cloud-computing unit, originated from the company’s need for IT infrastructure to support its fast-growing online retail business. And in recent years, Amazon has leveraged its logistics and fulfillment network to provide services for third parties. 

With Just Walk Out, Amazon faces the challenge of convincing retailers that they can trust one of their biggest competitors with handling valuable shopper data. 

In 2022, Amazon moved the team behind Just Walk Out from its retail organization to AWS. It marked one of the clearest signals yet that Amazon is serious about selling the technology to other retailers, and could help ease some fears among rivals. 

“They’re clearly in sales mode,” said Sucharita Kodali, retail analyst at Forrester Research, in an interview. 

Kodali said Amazon still has a “long way to go” before the technology is ubiquitous. Getting there will require patience from Amazon investors and data that shows both retailers and shoppers are embracing the technology. 

“There’s almost a viral effect that will occur over time,” she said. “It’s just going to take a long time because you’ve got to cycle through everybody in America having this experience, and for the most part, it’s just Amazon fighting this fight right now.”

Watch the video for a behind-the-scenes look at Just Walk Out: https://www.cnbc.com/video/2024/10/02/amazon-is-making-a-big-bet-on-selling-cashierless-tech-to-outsiders.html

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Reddit challenges Australia’s under-16 social media ban in High Court filing, says law curbs political speech

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December 12, 2025

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Reddit challenges Australia’s under-16 social media ban in High Court filing, says law curbs political speech

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Reddit, the popular community-focused forum, has launched a legal challenge against Australia’s social media ban for teens under 16, arguing that the newly enacted law is ineffective and goes too far by restricting political discussion online.

In its application to Australia’s High Court, the social news and aggregation platform said the law is “invalid on the basis of the implied freedom of political communication”, saying that it burdens political communication.

Canberra’s ban came into effect on Wednesday and targeted 10 major services, including Alphabet‘s YouTube, Meta’s Instagram, ByteDance’s TikTok, Reddit, Snapchat and Elon Musk’s X. All targeted platforms had agreed to comply with the policy to varying degrees.

Australia’s Prime Minister’s office, Attorney-General’s Department and other social media platforms did not immediately reply to requests for comment.

Under the law, the targeted platforms will have to take “reasonable steps” to prevent underage access, using age–verification methods such as inference from online activity, facial estimation via selfies, uploaded IDs, or linked bank details.

Reddit’s application to the courts seeks to either declare the law invalid or exclude the platform from the provisions of the law.

In a statement to CNBC, Reddit said that while it agrees with the importance of protecting persons under 16, the law could isolate teens “from the ability to engage in age-appropriate community experiences (including political discussions).”

It also said in its application that the law “burdens political communication,” saying “the political views of children inform the electoral choices of many current electors, including their parents and their teachers, as well as others interested in the views of those soon to reach the age of maturity.”

The platform also argued that it should not be subject to the law, saying it operates more as a forum for adults facilitating “knowledge sharing” between users than as a traditional social network, saying that it does not import contact lists or address books.

“Reddit is significantly different from other sites that allow for users to become “friends” with one another, or to post photos about themselves, or to organise events,” the platform said in its application.

Reddit further said in its court filing that most content on its platform is accessible without an account, and pointed out a person under the age of 16 “can be more easily protected from online harm if they have an account, being the very thing that is prohibited.”

“That is because the account can be subject to settings that limit their access to particular kinds of content that may be harmful to them,” it adds.

Despite its objections, Reddit said that the challenge was not an attempt to avoid complying with the law, nor was it an effort to retain young users for business reasons.

“There are more targeted, privacy-preserving measures to protect young people online without resorting to blanket bans,” the platform said.

— CNBC’s Dylan Butts contributed to this story.

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Altman and Musk launched OpenAI as a nonprofit 10 years ago. Now they’re rivals in a trillion-dollar market

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December 12, 2025

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Altman and Musk launched OpenAI as a nonprofit 10 years ago. Now they’re rivals in a trillion-dollar market

Open AI CEO Sam Altman speaks during a talk session with SoftBank Group CEO Masayoshi Son at an event titled “Transforming Business through AI” in Tokyo, Japan, on February 03, 2025.

Tomohiro Ohsumi | Getty Images

On Dec. 11, 2015, OpenAI launched as a nonprofit research lab after Elon Musk and a group of prominent techies, including Peter Thiel and Reid Hoffman, pledged $1 billion to develop artificial intelligence for the benefit of humanity. The idea was for the project to be be free of commercial pressures and the pursuit of money.

A decade later, that founding mission is all but forgotten.

Musk, now the world’s richest person, is long gone, having created rival startup xAI. And he’s been engaged in a heated legal and public relations fight with OpenAI CEO and co-founder Sam Altman.

Far from the nonprofit realm, OpenAI has emerged as one of the fastest-growing commercial entities on the planet, zooming to a $500 billion private market valuation, with almost all of that value accruing since the company’s launch of ChatGPT three years ago. More than 800 million people now use the chatbot every week.

Musk’s xAI, meanwhile, is expected to close a $15 billion round at a $230 billion pre-money valuation this month, sources familiar with the matter told CNBC’s David Faber in late November.

OpenAI and xAI are two of the main companies, along with Google, Anthropic and Meta, pouring money into AI models, as the market rapidly evolves from text-based chatbots to AI-generated videos and more advanced compute-intensive forms of content, as well as into agentic AI, with large enterprises customizing tools to enhance productivity.

For OpenAI, the price tag is almost incomprehensible: $1.4 trillion and growing. That’s primarily for the mammoth data centers and high-powered chips required to meet what the company sees as insatiable demand for its technology. For now, OpenAI is a cash-burning machine going up against tech’s megacaps and their chip suppliers, drawing comparisons to earlier waves of high-growth tech firms that spent heavily for years to challenge behemoth incumbents, but to mixed results.

“OpenAI has a very big role in the in the history of the development of artificial intelligence, and will forever have that role,” said Gil Luria, an equity analyst at D.A. Davidson, in an interview. “Now, will that role be Netscape, or will it be Google? We’ve yet to find out.”

Nvidia CEO Jensen Huang speaks at an event ahead of the COMPUTEX forum, in Taipei, Taiwan, June 2, 2024.

Ann Wang | Reuters

It’s a position that would’ve been hard to imagine in 2016, when Nvidia CEO Jensen Huang hauled a black DGX-1 supercomputer up to OpenAI’s offices in San Francisco’s Mission District. The $300,000 machine had cost Nvidia “a few billion dollars” to develop, and there were no other buyers, Huang recalled recently on Joe Rogan’s podcast.

Musk, at OpenAI, was the only one who wanted it.

When Musk told him it was for “a nonprofit company,” Huang said all the blood drained from his face at the thought of parking such a costly box inside an organization that wasn’t meant to make money.

Behind the scenes, though, the nonprofit ideal was already under intense strain, and Musk didn’t like what he saw.

“Guys, I’ve had enough. This is the final straw,” Musk wrote in an email to his co-founders in 2017. He warned that he would “no longer fund OpenAI” if it turned into a tech startup instead of a nonprofit. Altman wrote back the next morning: “i remain enthusiastic about the non-profit structure!”

Altman vs. Musk

In February of the following year, Musk left the OpenAI board, and said at the time the move was to avoid a potential conflict of interest as his car company, Tesla, dove deeper into AI.

The story was more complicated.

Musk sued OpenAI and Altman in early 2024, alleging they abandoned the company’s founding mission to develop AI “for the benefit of humanity broadly,” and he’s regularly criticized OpenAI’s close ties to Microsoft, its principal backer. He also went to court to try and keep OpenAI from converting into a for-profit entity and, earlier this year, went so far as to try and acquire the AI lab for $97.4 billion.

In October, OpenAI announced it had completed a recapitalization, cementing its structure as a nonprofit with a controlling stake in its for-profit business, which is now a public benefit corporation called OpenAI Group PBC.

OpenAI signs $38B deal with Amazon: Here's what to know

Musk isn’t the only early OpenAI team member who’s turned into a bitter rival. Siblings Dario and Daniela Amodei left OpenAI in late 2020 to form Anthropic, which said last month that Microsoft and Nvidia would invest in the company. The valuation from the funding round could reach as high as $350 billion.

Anthropic’s Claude family of large language models is one of the biggest competitors to OpenAI’s GPT models.

Altman is wagering that he can win the race by outspending the competition. While his company has sketched out plans for a trillion-dollar-plus AI infrastructure outlay, Anthropic has made roughly $100 billion in recent compute commitments, spaced out at various intervals over the next few years.

It all amounts to a giant bet that demand for AI services will continue apace.

“We’ve got all the various AI vendors making these huge capital investments,” said David Menninger, executive director of software research at ISG. “There’s a question as to how long those capital investments continue and whether or not they all pan out.”

Luria says Anthropic and others are making reasonable commitments based on their current growth trajectory and the funding they’ve already secured. But he said OpenAI’s approach has been based on a “fantastical set of commitments” with a “faint belief that those numbers are even possible.”

‘Pretty extreme’

Altman told CNBC in an interview on Thursday that OpenAI is already seeing enough demand to justify its spending plans, which “makes us confident that we will be able to significantly ramp revenue.”

“It’s obviously unusual to be growing this fast at this kind of scale, but it is what we see in our current data,” Altman said, adding that “the demand in the market is pretty extreme.”

Altman said last month that he expects annualized revenue to hit $20 billion by the end of this year and to reach hundreds of billions by 2030. Its historic pace of growth has been a big boon for major tech companies.

Oracle signed a roughly $500 billion deal to sell infrastructure services to OpenAI over five years. Chipmakers Advanced Micro Devices and Broadcom have woven OpenAI-linked demand into multi-year forecasts.

But Oracle’s shares plunged 11% on Thursday after the software vendor reported weaker-than-expected revenue, a miss that dragged down Nvidia, CoreWeave and other AI-related stocks. Despite a surge in long-term contract commitments from companies like OpenAI, Meta, and Nvidia, investors are growing concerned about Oracle’s debt load that’s fueling its buildout.

Oracle plunges on weak revenue

Still, venture capitalist Matt Murphy of Menlo Ventures, said that in his 25 years in the venture business, “this is the mother of all waves.”

Murphy, an early investor in Anthropic, said the combination of AI models, custom chips and hyperscale data centers adds up to the potential for trillion-dollar outcomes. That explains the eye-popping level of capital expenditures and the astronomical valuations, he said.

Altman recently declared a “code red” inside his company, and shuffled resources to focus on making ChatGPT faster, more reliable and more personal, while delaying work on ads, health and shopping agents and a personal assistant called Pulse. His declaration came after Google released its Gemini 3 model last month, further accelerating the search giant’s ascent in the market.

On Thursday, OpenAI unveiled ChatGPT-5.2, a faster, more capable reasoning model that the company says is its best system yet for everyday professional use. It also struck a three-year, $1 billion content and equity deal with Disney around the Sora AI video generator.

Altman downplayed the threat from Google, telling CNBC that Gemini had less of an impact on the company’s metrics than OpenAI initially feared.

“I believe that when a competitive threat happens, you want to focus on it, deal with it quickly,” Altman said.

He said he expects the company to exit code red by January.

— CNBC’s Kif Leswing contributed to this report.

OpenAI CEO Sam Altman: Expect annualized revenue run rate to top $20B this year

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Broadcom stock reverses lower on a misinterpretation of what the CEO said on the earnings call

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December 12, 2025

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Broadcom stock reverses lower on a misinterpretation of what the CEO said on the earnings call

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