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Amazon CEO, Andy Jassy speaking with CNBC’s Jim Cramer on Mad Money in Seattle, WA. on Dec. 6th, 2023.

CNBC

Apple is currently using Amazon Web Services’ custom artificial intelligence chips for services like search and will evaluate if the company’s latest AI chip can be used to pretrain its models like Apple Intelligence.

Apple revealed its usage of Amazon’s proprietary chips at the annual AWS Reinvent conference on Tuesday. Benoit Dupin, Apple’s senior director of machine learning and AI, took the stage to discuss how Apple uses the cloud service. It’s a rare example of the company officially allowing a supplier to tout them as a customer.

“We have a strong relationship, and the infrastructure is both reliable and able to serve our customers worldwide,” Apple’s Dupin said.

Apple’s appearance at Amazon’s conference and its embrace of the company’s chips is a strong endorsement of the cloud service as it vies with Microsoft Azure and Google Cloud for AI spending. Apple uses those cloud services, too.

Benoit said Apple had used AWS for more than a decade for services including Siri, Apple Maps and Apple Music. Apple has used Amazon’s Inferentia and Graviton chips to serve search services, for example, and Benoit said Amazon’s chips had led to a 40% efficiency gain.

But Benoit also suggested that Apple would use Amazon’s Trainium2 chip to pretrain its proprietary models. It’s a sign that Amazon’s chips aren’t just a cost-effective way to inference AI models compared with x86 central processors made by Intel and AMD, but can also be used to develop new AI. Amazon announced on Tuesday that its Trainium2 chip was generally available to rent.

“In early stages of evaluating Trainium2 we expect early numbers up to 50% improvement in efficiency with pretraining,” Dupin said.

AWS CEO Matt Garman said in an interview with CNBC on Tuesday that Apple had been an early adopter and beta-tester for the company’s Trainium chips.

Apple “came to us, and said to us, ‘how can you help us with our Generative AI capabilities, we need infrastructure in order to go build,’ and they had this vision for building Apple Intelligence,” AWS CEO Matt Carman told CNBC’s Kate Rooney.

Earlier this year, Apple said in a research paper that it had used Google Cloud’s TPU chips to train its iPhone AI service, which it calls Apple Intelligence.

The majority of AI training is done on pricey Nvidia graphics processors. Cloud providers and startups are racing to develop alternatives to lower costs and are exploring different approaches that could lead to more efficient processing. Apple’s usage of custom chips could signal to other companies that non-Nvidia training approaches can work.

AWS is expected to announce new details on Tuesday about offering Nvidia Blackwell-based AI servers for rent, too.

Apple released its first major generative AI product this fall. Apple Intelligence is a series of services that can summarize notifications, rewrite emails and generate new emojis. Later this month, it will integrate with OpenAI’s ChatGPT, the company says, and next year, Siri will get new abilities to control apps and speak naturally.

Unlike leading chatbots like OpenAI’s ChatGPT, Apple’s approach to AI isn’t based on large clusters of Nvidia-based servers in the cloud. Instead, Apple uses an iPhone, iPad or Mac chip to do as much of the processing as possible, and then sends complicated queries to Apple-operated servers using its own M-series chips.

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Founder of IRL social media app charged with defrauding investors

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Founder of IRL social media app charged with defrauding investors

Boonchai Wedmakawand | Moment | Getty Images

The founder of the company behind the IRL social media app was charged with defrauding investors of $170 million in the company’s 2021 funding round, the Department of Justice said Wednesday.

A federal grand jury in Oakland federal court indicted Abraham Shafi, 38 of Hawaii, with wire fraud, securities fraud and obstruction in connection with the scheme, the DOJ said.

Shafi was the CEO of Get Together, the parent company of IRL. The company was valued at $1 billion after its 2021 Series C funding round. IRL, which shuttered in June 2023, was a platform for users to organize events and offline activities. It found some traction in 2018, ranking among Apple’s top social apps.

Shafi allegedly spent millions on incentive advertising to boost installs of the app leading up to the Series C while maintaining to investors that the company spent “very little” on getting new users, the DOJ said.

He then concealed the expense by invoicing it to another firm, the DOJ said.

The indictment also alleges that the CEO and his fiancée used investor funds for “luxury hotel stays, luxury clothing, purchases from home furnishing retailers, thousands of dollars for art classes, and hundreds of thousands of dollars for SHAFI’s wedding, including payments for wedding guests’ airfare and luxury hotels.”

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Shafi told CNBC in February 2018 that investors backed the company on its potential to compete with Facebook and Snapchat. Investors in IRL included Peter Thiel’s Founders Fund and the venture firm Floodgate.

Shafi’s co-founders at IRL included Scott Banister, the first board member of PayPal and an early investor in Facebook, among others.

Only Shafi was named in the DOJ indictment. He faces a max of 20 years in prison on each count, the DOJ said.

Last year, the Securities and Exchange Commission filed a civil lawsuit against Shafi for the same alleged scheme.

“Shafi took advantage of investors’ appetite for investments in the pre-IPO technology space and fraudulently raised approximately $170 million by lying about IRL’s business practices,” Monique Winkler, director of the SEC’s San Francisco Regional Office, said in a release at the time.

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YouTube-Fox standoff has high stakes as college football, NFL seasons kick off

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YouTube-Fox standoff has high stakes as college football, NFL seasons kick off

A news ticker outside Fox News headquarters reads: Grand jury votes to indict former President Donald Trump, at the News Corporation building in New York City, U.S., March 31, 2023. 

Brendan Mcdermid | Reuters

In less than three days, college football will be showcasing one of its most-highly anticipated week one matchups ever, with top-ranked Texas heading on the road to play reigning national champion and third-ranked Ohio State.

Fox is airing the much-hyped game. YouTube TV subscribers may be out of luck.

Google‘s YouTube said on Monday it may remove channels like Fox Broadcast Network, Fox News and Fox Sports if the company is unable to reach a new agreement with Fox Corp. by 5 p.m. ET on Wednesday. The two sides are still in a standoff, putting YouTube TV customers at risk of missing out on major sporting events and hefty ad dollars in limbo.

For Google, the issue is how much Fox is charging for its content.

“Fox is asking for payments that are far higher than what partners with comparable content offerings receive,” YouTube wrote in its Monday blog post.

YouTube TV has roughly 9.4 million subscribers. Most notably for sports fans, Fox is the home for many upcoming football games, both college and pro. The NFL season begins next week, with Fox set to air games starting on Sunday, Sept. 7

YouTube pays broadcasters like Fox to carry their channels.

In addition to football, Fox shows Major League Baseball games, and the MLB regular season is entering its final stretch. Fox will be airing some playoff games that follow, as well as the World Series, which is scheduled to start in late October.

Brendan Carr, chair of the Federal Communications Commission, weighed in on Tuesday.

“Google removing Fox channels from YouTube TV would be a terrible outcome,” he said on X. “Millions of Americans are relying on YouTube to resolve this dispute so they can keep watching the news and sports they want — including this week’s Big Game:  Texas @ Ohio State. Get a deal done Google!”

The Texas – Ohio State game has added intrigue as its Arch Manning’s first marquee start as quarterback for the top-ranked Longhorns.

The hefty roster of Fox programs may be enough for sports fans to turn off YouTube TV in favor of other options. One place subscribers could turn to is Fox One, Fox’s standalone streaming service, which just launched last week, ahead of the NFL season. Fox One costs $19.99 per month or $199.99 annually.

The base plan for YouTube TV costs $82.99 per month and includes over 100 live channels and unlimited cloud DVR. If Fox does go offline for an extended period of time, YouTube will give members a $10 credit, the Google company said.

YouTube recently overtook Netflix, which has a market cap of $518 billion, as the top streaming platform in terms of audience engagement.

While YouTube and Fox have set a deadline of Wednesday to reach a deal, it’s common for carriage disputes to result in a deadline extension that would give the parties more time to negotiate.

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Google has eliminated 35% of managers overseeing small teams in past year, exec says

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Google has eliminated 35% of managers overseeing small teams in past year, exec says

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Google has eliminated more than one-third of its managers overseeing small teams, an executive told employees last week, as the company continues its focus on efficiencies across the organization.

“Right now, we have 35% fewer managers, with fewer direct reports” than at this time a year ago, said Brian Welle, vice president of people analytics and performance, according to audio of an all-hands meeting reviewed by CNBC. “So a lot of fast progress there.”

At the meeting, employees asked Welle and other executives about job security, “internal barriers” and Google’s culture after several recent rounds of layoffs, buyouts and reorganizations.

Welle said the idea is to reduce bureaucracy and run the company more efficiently.

“When we look across our entire leadership population, that’s mangers, directors and VPs, we want them to be a smaller percentage of our overall workforce over time,” he said.

The 35% reduction refers to the number of managers who oversee fewer than three people, according to a person familiar with the matter. Many of those managers stayed with the company as individual contributors, said the person, who asked not to be named because the details are private.

Google CEO Sundar Pichai weighed in at the meeting, reiterating the need for the company “to be more efficient as we scale up so we don’t solve everything with headcount.”

Google eliminated about 6% of its workforce in 2023, and has implemented cuts in various divisions since then. Alphabet finance chief Anat Ashkenazi, who joined the company last year, said in October that she would push cost cuts “a little further.” Google has offered buyouts to employees since January, and the company has slowed hiring, asking employees to do more with less.

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Regarding the buyouts, executives at the town hall said that a total of 10 product areas have presented “Voluntary Exit Program” offers. They’ve applied to U.S.-based employees in search, marketing, hardware and people operations teams this year. 

Fiona Cicconi, Google’s chief people officer, said at last week’s meeting that between 3% and 5% of employees on those teams have accepted the buyouts.

“This has been actually quite successful,” she said, adding “I think we can continue it.”

Pichai said the company executed the voluntary buyouts after listening to employees, who said they preferred that route to blanket layoffs.

“It’s a lot of work that’s gone into implementing the VEP program, and I’m glad we’ve done it,” Pichai said. “It gives people agency, and I’m glad to see it’s worked out well.”

‘Wanting a career break’

Cicconi said one of the main reasons employees are taking the buyouts is because they want to take time off from work.

“It’s actually quite interesting to see who’s taking a VEP, and it’s people sort of wanting a career break, sometimes to take care of family members,” she said.

CNBC previously reported that the layoffs hurt morale as the company was downsizing while at the same time issuing blowout earnings and seeing its stock price jump. Alphabet’s shares are up 10% this year after climbing 36% in 2024 and 58% the year prior.

At another point in the town hall, employees asked if Google would consider a policy similar to Meta’s “recharge,” a month-long sabbatical that employees earn after five years at the company.

“We have a lot of leaves, not least our vacation, which is there for exactly that — resting and recharging,” said Alexandra Maddison, Google’s senior director of benefits.

She said the company is not going to offer paid sabbatical.

“We’re very confident that our current offering is competitive,” Maddison said.

Meta didn’t immediately respond to a request for comment.

Other executives jumped in to compare the two companies’ benefits.

“I don’t think they have a VEP at Meta by the way,” Cicconi said.

Pichai then asked, to some laughs from the audience, “Should we incorporate all policies of Meta while we’re at it? Or should we only pick and choose the few policies we like?”

“Maybe I should try running the company with all of Meta’s policies,” he continued. “No, probably not.”

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