Chip equipment manufacturer Applied Materials is laying off 4% of its workforce.

The company on Thursday began notifying impacted employees around the world “across all levels and groups,” it said in a filing. Applied Materials provides equipment, services and software to industries, including the semiconductor industry.

Applied Materials had approximately 36,100 full-time employees, according to an August 2025 filing. A layoff of 4% would represent about 1,444 employees.

“Automation, digitalization and geographic shifts are redefining our workforce needs and skill requirements,” the company wrote in the filing. “With this in mind, we have been focused for some time on building high-velocity, high-productivity teams, adopting new technologies and simplifying organizational structures.”

The move comes at the end of the company’s fiscal year. Earlier this month, the Applied Materials forecasted a $600 million hit to fiscal 2026 revenue after the U.S. expanded its restricted export list. That resulted in company shares to dipping 3% in extended trading.

As a result of the workforce reduction, Applied Materials expects to incur charges of approximately $160 million to $180 million, consisting primarily of severance and other one-time employment termination benefits to be paid in cash, the filing states.

The company said the cuts are a way to position itself “as a more competitive and productive organization.”

Microsoft AI CEO Mustafa Suleyman said the software giant won’t build artificial intelligence services that provide “simulated erotica,” distancing itself from longtime partner OpenAI.

“That’s just not a service we’re going to provide,” Suleyman said on Thursday at the Paley International Council Summit in Menlo Park, California. “Other companies will build that.”

Suleyman’s comments come a week after OpenAI CEO Sam Altman said his company plans to allow verified adults to use ChatGPT for erotica. Altman said that OpenAI is “not the elected moral police of the world.”

Microsoft has for years been a major investor and cloud partner to OpenAI, and the two companies have used their respective strengths to build big AI businesses. But the relationship has shown signs of tension of late, with OpenAI partnering with Microsoft rivals like Google and Oracle, and Microsoft focusing more on its own AI services.

Earlier on Thursday, Microsoft announced a series of new features for its Copilot AI chatbot, including an AI companion called Mico that can respond to users through a call feature and express itself by changing its color.

Suleyman in August penned an essay titled “We must build AI for people; not to be a person.” He argued that tech companies should not build “seemingly conscious” services that can give humans the impression that they may be capable of suffering, and wrote that conscious AIs could create another “axis of division” for humanity.

On Thursday, Suleyman said the creation of seemingly conscious AI is already happening, primarily with erotica-focused services. He referenced Altman’s comments as well as Elon Musk’s Grok, which in July launched its own companion features, including a female anime character.

“You can already see it with some of these avatars and people leaning into the kind of sexbot erotica direction,” Suleyman said. “This is very dangerous, and I think we should be making conscious decisions to avoid those kinds of things.”

OpenAI didn’t immediately respond to requests for comment, while xAI responded saying, “Legacy Media Lies.”

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Apple has started shipping advanced servers for artificial intelligence applications out of a factory in Houston, Texas, the company announced on Thursday.

These servers are a core part of Apple’s commitment to spend $600 billion in the U.S. on advanced manufacturing, suppliers, and other initiatives, and the milestone could please President Donald Trump, who has called for Apple and other technology companies to do more manufacturing on U.S. shores.

Apple’s plan to assemble servers in the U.S. was first revealed in February.

Apple Chief Operating Officer Sabih Khan said on Thursday that the servers will power the company’s Apple Intelligence and Private Cloud Compute services. Apple is using its own silicon in its Apple Intelligence servers.

“Our teams have done an incredible job accelerating work to get the new Houston factory up and running ahead of schedule and we plan to continue expanding the facility to increase production next year,” Khan said in a statement.

The Houston factory is on track to create thousands of jobs, Apple said. The Apple servers were previously manufactured overseas.

In August, Apple CEO Tim Cook met with Trump to announce additional U.S. spending, especially on semiconductor companies under a program it calls the American Manufacturing Program.

Cook gave Trump a gift based on the U.S.-made Corning glass used on iPhones and Apple Watches.

Apple also opened a manufacturing academy in partnership with Michigan State in July.

While Trump has praised Cook and Apple for its U.S. spending commitments, he has also at times pushed Apple to make its iPhones in the U.S., a process that experts say could take years and would be costly.

The Trump administration has separately called for and cancelled tariffs that could hurt Apple, which imports its computers and phones to the U.S. from China, India, and Vietnam.

In September, Cook said in a CNBC interview that Apple is contributing to U.S. manufacturing by doing business with U.S.-based semiconductor suppliers, and that its spending and expertise is enabling chips to be fabricated and packaged entirely in the U.S.

“You can add a lot by making it global and then stitching together the end-to-end supply chain in semiconductors,” Cook said. “I can’t stress how important this is and how much that will add to what we’re doing.”