Chairman of Foxconn Young Liu delivers a speech during the Hon Hai Tech Day in Taipei on Oct. 18, 2023.
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The boom in corporate investment into artificial intelligence infrastructure still has some way to go as large language models are continuing to evolve, according to the CEO of Foxconn, a key supplier to Apple.
Speaking with CNBC’s Emily Tan, Chief Executive and Chairman of Foxconn Young Liu, said that the AI boom “still has some time to go” as advanced language models from the likes of OpenAI are becoming increasingly intelligent with each new iteration that comes out.
He said that the general movement in the tech industry today is trending toward a form of AI that is as intelligent — if not more intelligent — than humans. This type of AI is referred to in the industry as “AGI,” or Artificial General Intelligence.
“We … heard about AGI, and we’ll talk about different levels of intelligence. If you divide [intelligence] into four different levels, we’re at level two. There’s still level three and level four to go,” Liu told CNBC in an interview that aired Tuesday.
OpenAI is one of the leading companies pushing for AGI. Sam Altman, CEO of the Microsoft-backed startup, has previously said AGI will be developed in the “reasonably close-ish future,” however he’s also said he thinks it will “change jobs much less than we all think.”
The company, which released its upgraded GPT-4o model this summer, revealed last week that it had raised $6.6 billion at a $157 billion valuation. OpenAI is still working toward releasing its next-generation LLM, GPT-5, however it’s yet to share timing on when the new language model will launch.
Liu said that progress toward increasingly intelligent AI can only be a good thing for the AI server industry, which has been a key boon to Foxconn’s growth this year.
“I think for the AI server industry, I think we still have some time to grow,” Liu added. “With the AGI capability growing, the age [of] AI devices will be another industry we should watch carefully.”
Strong demand for Nvidia’s Blackwell chip
Foxconn, which trades as Hon Hai locally in China and Taiwan, is the world’s largest contract manufacturer for the electronics industry. The firm produces and assembles Apple products, including about two out of every three iPhones.
On Saturday, Foxconn said that it reported better-than-expected sales figures. The firm said its revenues came in at 1.85 trillion Taiwanese dollars ($57.5 billion) in the September quarter, up 20.2% year-over-year. That “exceeded the company’s original expectations of significant growth,” according to Foxconn.
The strong performance came off the back of heightened demand for AI servers, which Foxconn manufactures for several major global tech giants, including Amazon, Google, Microsoft, and Nvidia.
The company is currently on track to ship Nvidia’s next-generation Blackwell GPU (graphics processing unit), an advanced AI server chip, in the fourth quarter of 2024, Liu told CNBC. Blackwell is also known under the brand name GB200.
Asked about the order book for Blackwell, Liu said that demand for the chip is “much better than we thought,” adding that the firm is building new factories in Mexico to help service outsized demand for the product.
His comments tally with what Nvidia CEO Jensen Huang has said about demand for Blackwell previously. Last week, Huang told CNBC’s “Closing Bell Overtime” that demand for Blackwell was “insane.”
“Everybody wants to have the most and everybody wants to be first,” Huang said during the interview, which aired last Wednesday.
Blackwell, expected to cost between $30,000 and $40,000 per unit, is in hot demand from companies like OpenAI, Microsoft, Meta and other firms building AI data centers to power products like ChatGPT and Copilot.
AI devices the next growth opportunity
Beyond producing IT infrastructure for cloud-based AI applications like ChatGPT, Foxconn is also powering the new iPhone 16, which comes with the latest generative AI features Apple hopes will breathe new life into the smartphone industry.
Foxconn’s Liu said that “on-device” AI — where data is processed directly on a mobile device, rather than a cloud or server — represents the next substantial growth opportunity for the company.
“I think the genAI-related device will be the next way to grow,” Liu told CNBC. “Currently, we’re seeing this on the cloud side. You see that genAI cloud equipment was very much booming.”
“But in the next phase, what we’re seeing will be the Gen AI devices,” he added. “We think that will be the next big way to boom … We have very high hopes on those devices.”
Still, it’s worth noting though that Apple hasn’t yet released its AI system, called Apple Intelligence, on iPhone. The company is expected to release Apple Intelligence to the public in a beta version later this fall as part of a new software update.
Smartphone sales have been gaining momentum this year after several consecutive years of declines. In the second quarter of 2024, smartphone shipments climbed 6.5% year-over-year to 285.4 million units, according to preliminary data from IDC — their fourth straight quarter of growth.
A sign is posted in front of the eBay headquarters in San Jose, California.
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Shares of eBay soared 8% Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more.
EBay stock reached its highest level since November 2021.
The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release.
The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items.
EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site. CEO Jamie Iannone told CNBC in an October interview that shoppers were coming to the site, known for its used and refurbished goods, as they sought out discounts amid a rocky macroeconomic environment.
Meta’s move is an attempt to appease the European Commission, the executive body of the European Union, after the regulator fined the company 797 million euros ($821 million) in November for tying its Marketplace product to the main Facebook app.
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At the time, the Commission said that Meta’s bundling of Marketplace with Facebook could mean competitors are effectively “foreclosed” given the distribution reach of the platform. Facebook counts more than 3 billion users globally.
The Commission also said that Meta imposes “unfair trading conditions” on other online classified ads service providers who advertise on its platforms, especially Facebook and Instagram. It added that these conditions allow Meta to use data generated from other advertisers to benefit Marketplace.
Meta appealed the ruling at the time, saying that it “ignores the realities of the thriving European market for online classified listing services.”
“While we disagree with and continue to appeal the European Commission’s decision on Facebook Marketplace, we are working quickly and constructively to build a solution which addresses the points raised,” the company said Wednesday.
EBay touted its integration with Facebook Marketplace as a way for the e-commerce site to “increase exposure to our sellers’ listings, on and off eBay, as part of our strategy to engage buyers and deepen customer loyalty.”
Facebook in 2023 announced a similar partnership with Amazon that lets users browse and purchase products without leaving the app.
An Amazon employee works to fulfill same-day orders during Cyber Monday, one of the company’s busiest days, at an Amazon fulfillment center in Orlando, Florida, on Dec. 2, 2024.
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Amazon warehouse workers at a site in North Carolina will vote next month on whether to join a union, setting the stage for the company’s latest labor battle.
Workers at the Garner, North Carolina, facility will cast their ballots from Feb. 10 to Feb. 15, according to a Tuesday post on X by Carolina Amazonians United for Solidarity & Empowerment, the group seeking to organize staffers. Representatives from Amazon and the National Labor Relations Board didn’t immediately respond to requests for comment.
Known as CAUSE, the grassroots group led by current and former employees has been working to organize Amazon employees at the warehouse, which is located in a suburb about 10 miles south of Raleigh, for the past three years.
If the election is successful, the warehouse, known as RDU1, would be only the second Amazon site in the U.S. to unionize. Workers at Amazon’s largest warehouse in New York City voted to join the Amazon Labor Union in 2022, but the group struggled to negotiate a contract with Amazon, and last June, the ALU voted to affiliate with the Teamsters.
A handful of union elections were held at Amazon warehouses in the U.S. in recent years but employees have either rejected unionization or the results continue to be disputed in lengthy court battles. Last November, a federal labor judge ordered a third rerun election at an Amazon warehouse in Bessemer, Alabama, after ruling the company improperly interfered in the vote.
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CAUSE filed for a union election last month, saying in a press release that 30% of workers at the North Carolina site signed union authorization cards, which is the necessary threshold to trigger an NLRB vote. Organizers are seeking to boost wages and improve working conditions.
The union filing comes after Amazon delivery and warehouse workers went on strike at nine facilities last month to push the company to come to the bargaining table, according to the International Brotherhood of Teamsters, which represents the employees. The action was intended to snarl Amazon’s operations during the busiest holiday shopping period of the year, referred to as peak season. An Amazon representative told Reuters the company expected to see a limited impact on deliveries from the strike.
An artificial intelligence feature on iPhones is generating fake news alerts, stoking concerns about the technology’s ability to spread misinformation.
Last week, a feature recently launched by Apple that summarizes users’ notifications using AI, pushed out inaccurately summarized BBC News app notifications on the broadcaster’s story about the PDC World Darts Championship semi-final, falsely claiming British darts player Luke Littler had won the championship.
The incident happened a day before the actual tournament’s final, which Littler did go on to win.
Then, just hours after that incident occurred, a separate notification generated by Apple Intelligence, the tech giant’s AI system, falsely claimed that Tennis legend Rafael Nadal had come out as gay.
The BBC has been trying for about a month to get Apple to fix the problem. The British state broadcaster complained to Apple in December after its AI feature generated a false headline suggesting that Luigi Mangione, the man arrested following the murder of health insurance firm UnitedHealthcare CEO Brian Thompson in New York, had shot himself — which never happened.
Apple was not immediately available for comment when contacted by CNBC. On Monday, Apple told the BBC that it’s working on an update to resolve the problem by adding a clarification that shows when Apple Intelligence is responsible for the text displayed in the notifications. Currently, generated news notifications show up as coming directly from the source.
“Apple Intelligence features are in beta and we are continuously making improvements with the help of user feedback,” the company said in a statement shared with the BBC. Apple added that it’s encouraging users to report a concern if they view an “unexpected notification summary.”
The mistake was flagged on the social media app Bluesky by Ken Schwencke, a senior editor at investigative journalism site ProPublica.
CNBC has reached out to the BBC and New York Times for comment on Apple’s proposed solution to its AI feature’s misinformation issue.
AI’s misinformation problem
Apple touts its AI-generated notification summaries as an effective way to group and rewrite previews of news app notifications into a single alert on a users’ lock screen.
It’s a feature Apple says is designed to help users scan their notifications for key details and cut down on the overwhelming barrage of updates many smartphone users are familiar with.
However, this has resulted in what AI experts refer to as “hallucinations” — responses generated by AI that contain false or misleading information.
“I suspect that Apple will not be alone in having challenges with AI-generated content. We’ve already seen numerous examples of AI services confidently telling mistruths, so-called ‘hallucinations’,” Ben Wood, chief analyst at tech-focused market research firm CCS Insights, told CNBC.
In Apple’s case, because the AI is trying to consolidate notifications and condense them to show only a basic summary of information, it’s mashed the words together in a way that’s inaccurately characterized the events — but confidently presenting them as facts.
“Apple had the added complexity of trying to compress content into very short summaries, which ended up delivering erroneous messages,” Wood added. “Apple will undoubtedly seek to address this as soon as possible, and I’m sure rivals will be watching closely to see how it responds.”
Generative AI works by trying to figure out the best possible answer to a question or prompt inserted by a user, relying on vast quantities of data which its underlying large language models are trained on.
Sometimes the AI might not know the answer. But because it’s been programmed to always present a response to user prompts, this can result in cases where the AI effectively lies.
It’s not clear exactly when Apple’s resolution to the bug in its notification summarization feature will be fixed. The iPhone maker said to expect one to arrive in “the coming weeks.”