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Bill McDermott, Chairman, President & CEO ServiceNow, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 17th, 2024.

Adam Galici | CNBC

American enterprise software giant ServiceNow announced Monday it plans to invest $1.5 billion in the U.K. over the next five years, in a vote of confidence for Prime Minister Keir Starmer as he looks to attract foreign investment to the country.

The tech firm said the mammoth sum of cash will go toward growing its U.K. business, as it plans to expand with new office space and grow its employee base beyond the 1,000 people it hires in Britain currently.

Beyond local business expansion, ServiceNow also said it would invest the cash into localizing the processing of data for its large language models (LLMs), AI models that rely on vast quantities of training data to be able to understand and generate text like a human.

The firm said that it would bring Nvidia GPUs (graphics processing units) to its data centers based in London and the Welsh city of Newport to support processing of data on its LLMs within the U.K. This will help support “domain specific LLMs” for U.K. clients and governments, ServiceNow said.

Policymakers and regulators in Europe have increasingly been calling for so-called AI “sovereignty.” This refers to the idea that the technologies and data underpinning advanced AI systems should be stored within Europe, and more accurately reflect the culture and history of Europeans.

ServiceNow said it also planned to offer new skills programs in the U.K. that will reach 240,000 learners.

“The United Kingdom is embracing technology transformation at scale. In this new age of AI, the country continues to be a global leader in driving innovation for the benefit of all its communities,” Bill McDermott, ServiceNow’s CEO, said in a statement Monday.

“Our investment accelerates the U.K.’s push to put AI to work, empowering people, enriching experiences, and strengthening societal bonds. Together, ServiceNow and our customers across the U.K. are delivering a future where technology benefits everyone.”   

The announcement was made as part of the International Investment Summit, where U.K. leader Keir Starmer is set to gather 300 business leaders to encourage foreign investment.

ServiceNow, which has a market capitalization of $194.6 billion, has seen its shares climb over 37% this year, thanks in no small part to the hype surrounding AI.

ServiceNow’s cloud-based technology is intended to help other businesses manage digital workflows. But the company hasn’t been shy in touting its own AI prowess.

Last month, ServiceNow launched Xanadu, a platform that uses a range of AI technologies including so-called “agents” to boost worker productivity. AI agents are digital assistants that are designed to help employees get tasks done with limited supervision.

In the second quarter of 2024, the company reported earnings per share of $3.13, excluding items, on $2.63 billion in revenue, beating analyst expectations.

ServiceNow isn’t the only tech giant betting big on the U.K. as a global destination for AI innovation. Earlier this year, Salesforce opened its first global AI center in London, a space it’s using to facilitate AI training and upskilling programs as well as promote industry collaboration.

The AI center forms part of a $4 billion investment Salesforce committed to making in the U.K. over five years in June last year.

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Chip firm ASML shares plunge 15% after warning of weaker China sales in early release

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October 15, 2024

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Chip firm ASML shares plunge 15% after warning of weaker China sales in early release

An icon of ASML is displayed on a smartphone, with an ASML chip visible in the background.

Nurphoto | Nurphoto | Getty Images

Shares in semiconductor equipment maker ASML fell 15.6% on Tuesday after the Dutch company published disappointing sales forecasts in results a day early.

The move pulled other chip stocks lower, with Nvidia, Advanced Micro Devices and Broadcom all falling at least 4% after the news.

ASML said it expects net sales for 2025 to come in between 30 billion euros and 35 billion euros ($32.7 billion and $38.1 billion), at the lower half of the range it had previously provided.

Net bookings for the September quarter were 2.6 billion euros ($2.83 billion), the company said — well below the 5.6 billion euro LSEG consensus estimate. Net sales, however, beat expectations coming in at 7.5 billion euros.

“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected,” company CEO Christophe Fouquet said in the earnings release.

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ASML said that the early publication of its results was due to a technical error which saw it erroneously publish the report on a part of its website.

In the lead-up to the earnings, Wall Street analysts had turned more cautious on the chip firm, which is a critical supplier to the broader semiconductor industry.

China concerns

The firm is facing a tougher business outlook in China due to U.S. and Dutch export restrictions on shipments to the country.

Last month, the U.S. government rolled out new export controls on critical technologies to China, including advanced chipmaking tools. Separately, the Dutch government announced plans to take over control of exports of ASML‘s machines to the country.

ASML’s extreme ultraviolet lithography machines are used by many of the world’s largest chipmakers — from Nvidia to Taiwan Semiconductor Manufacturing Co. — to produce advanced chips.

The company’s chief financial officer, Roger Dassen, said Tuesday that he expects the firm’s China business to show a “more normalized percentage in our order book and also in our business.”

“We do see China trending towards more historically normal percentages in our business,” Dassen said, according to a transcript of a video, also released a day early.

“So we expect China to come in at around 20% of our total revenue for next year. Which would also be in line with its representation in our backlog.” 

In its June-quarter earnings presentation, the Dutch company said that 49% of its sales come from China.

‘Clearly disappointing’

In a note released following ASML’s results Tuesday, analysts at Bernstein said the firm’s weaker-than-expected order book and a disappointing 2025 outlook were “likely to overshadow decent Q3 results.”

The analysts added that ASML’s lowered guidance indicates that “the delayed cyclical recovery and specific customer challenges are weighing heavily” on 2025 expectations.

Analysts at Cantor, meanwhile, said the downbeat outlook for ASML was “clearly disappointing” and will weigh on semiconductor stocks. However, they added that, “in no way shape or form does the company’s updated outlook indicate any change in the AI growth story.”

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Apple announces new iPad mini, available to order now and in stores on Oct. 23

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October 15, 2024

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Apple announces new iPad mini, available to order now and in stores on Oct. 23

Apple iPad Mini 2024

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Apple announced a new iPad mini on Tuesday, offering the first update to its smallest tablet since 2021.

The new iPad mini comes with a faster A17 Pro processor, the same chip that was in last year’s iPhone 15 Pro. That means it supports Apple Intelligence, the company’s new suite of artificial intelligence features that will slowly begin rolling out to users this month.

During the company’s fiscal third quarter, Apple showed the strongest growth in its iPad segment, which grew about 24% year-over-year after it introduced several new iPads for the first time since 2022.

Apple’s smallest iPad has attracted a fanbase of users who appreciate its more portable 8.3-inch screen for reading books or taking notes. The iPad Mini supports the latest Apple Pencil Pro, which was introduced alongside the iPads Pro earlier this year.

It starts at $499, can be preordered now and launches in stores on Oct. 23.

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Amazon is using tech from a Khosla Ventures-backed startup to run robot warehouses at Whole Foods

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October 15, 2024

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Amazon is using tech from a Khosla Ventures-backed startup to run robot warehouses at Whole Foods

Customers shop for produce at a Whole Foods Market 365 location in Santa Monica, California.

Patrick T. Fallon | Bloomberg | Getty Images

As Amazon looks to add more automation into its supermarkets, the retailing giant is partnering with a Khosla Ventures-backed startup that just came out of stealth last year, CNBC has learned.

Last week, Amazon announced it’s piloting a new concept at one of its Whole Foods locations in a Philadelphia suburb, where a micro-fulfillment center will be bolted onto the store and allow shoppers to purchase staples not typically stocked by the organic grocer.

The facility relies on warehouse automation technology from Fulfil, a San Francisco-based startup that develops robotic systems for grocers and other retailers, according to a person familiar with the matter and other corroborating information. The person asked not to be named because the plan is confidential.

At a recent press event held near an Amazon warehouse in Nashville, Anand Varadarajan, who leads the product and technology teams for Amazon’s worldwide grocery business, showed a video demonstrating the use of Fulfil’s technology. In the video, robots can be seen pulling trays of soy sauce, canned pineapple and coffee pods from shelves, then handing them off to other robots equipped with grocery bags.

The video makes no mention of Fulfil’s technology, but the system appears identical to the contents of a demo video on Fulfil’s website.

Amazon declined to comment on whether it’s using Fulfil’s technology. The company said it invests in a variety of technologies and robotics, including those developed in-house and from third-party partners, to improve its operations networks. Fulfil CEO Mir Aamir declined to comment.

The Information reported earlier on Amazon testing Fulfil’s technology.

Fulfil emerged from stealth in February 2023, announcing at the tie time that it raised $60 million in a round led by Eclipse Ventures, with participation from Khosla Ventures and DCVC. Prior to working with Amazon, the company was testing its technology with California-based retailer Lucky, which is owned by regional grocer Save Mart, and is also an Amazon grocery delivery partner.

Recent job postings on Fulfil’s website indicate the company is hiring engineers and factory operators in Plymouth Meeting, Pennsylvania, the site of the Whole Foods store where Amazon is piloting its technology. Amazon expects the facility to be operational within the next year, Tony Hoggett, who leads Amazon’s worldwide grocery business, said in a blog post last week.

Fulfil’s technology will enable shoppers to purchase staples from brands that aren’t stocked at Whole Foods, which has long maintained a “No List” of hundreds of ingredients that are banned from all the food it sells. It’s meant that shoppers looking for items like Coca Cola and cereals from Kellogg’s can’t find them on shelves at Whole Foods, which Amazon acquired in 2017 for $13.7 billion.

The system being piloted in Plymouth Meeting will let shoppers order items from Amazon’s website and its online grocery service, Amazon Fresh, while browsing Whole Foods. They can pick up items purchased online in the store as they’re checking out.

A small automated warehouse would be bolted onto a Whole Foods store, where robots fetch and ferry items like socks, soda bottles or tennis rackets and place them into bags for pickup.

Hoggett wrote in the blog post that Amazon is looking to “eliminate those extra trips” shoppers take to other grocery stores. The average American shops at two different grocery stores per week, whether to maximize their cost savings, shop from a broader range of products, or take advantage of different promotions, according to an April study from market research firm Drive Research.

Sales growth in Amazon’s physical stores unit, which includes Whole Foods and Fresh, has been mired in the single digits for the past seven quarters.

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