Tech might not be the first thing that comes to mind when one pictures Phoenix. The city is better known for its golf courses, Major League Baseball’s Spring Training, retirement appeal and scorching heat.
But its growth into an innovation hub has been quietly playing out over several decades. Arizona’s largest city has, for a variety of reasons, become the epicenter for semiconductor manufacturing, and testing self-driving cars and drones.
“If we look at cities that really do end up becoming these, you know, important technology hubs, there are really four things that we usually see, and Phoenix really has all of them going,” said Anne Hoecker, global head of technology at Bain Global. “The first is a favorable business environment. The second really is that ecosystem of other companies. The next is really close proximity to a university that has a strong engineering program. And then finally it is that availability of talent.”
TSMC makes the most advanced chips in the world, and has pledged to invest $65 billion in the greater Phoenix area. The chipmaker initially held discussions with the city of Phoenix in 2016, when it was looking to grow its advanced chip manufacturing beyond Taiwan. In order to secure the bid, the Greater Phoenix Economic Council spent three years conceptualizing a science and technology park to meet the needs of the company. The project, once complete, expects to bring in about 62,000 jobs surrounding and including TSMC.
“They’re basically duplicating the science park concept that was pioneered in Taiwan,” said Rick Cassidy, chairman of TSMC Arizona. “It solves lots of problems for our smaller suppliers. They can actually rent space and just plug in.”
Self-driving cars are another hallmark of the city’s tech scene. Uber, Cruise and Alphabet‘s Waymo have all tested autonomous vehicles in the city. The infrastructure in Phoenix, with its gridded streets and consistent weather, made it an “optimal” place to roll these out, according to Bain’s Hoecker.
Arizona’s policy has been welcoming to self-driving technology. Former Arizona Governor Doug Ducey enacted several executive orders to reduce barriers for autonomous testing. Waymo began testing in Phoenix in 2017 and is the biggest player in the market. The company’s robotaxi service now operates across 315 square miles in the city.
Drones have been another technology putting the city on the map. In November, Amazon received regulatory approval to launch its Prime Air drone program in Tolleson, a suburb in west Phoenix. The plan is to scale the program to 500 million deliveries per year, according to Amazon. The company says thousands of packages have been delivered so far.
“It’s about scaling around the U.S. and around the world, said David Carbon, vice president and general manager of Amazon Prime Air, adding that more is coming in 2025. “This is just the beginning.”
Watch the video as CNBC’s Kate Rooney gets a behind-the-scenes look at Amazon’s cutting-edge drone operation and explores how Phoenix became a hot spot for tech.
Airbnb CEO Brian Chesky said he wants to integrate ChatGPT artificial intelligence capabilities into the travel platform but the software isn’t ready.
“The [software development kit] wasn’t quite robust enough for the things we want to do,” he told CNBC’s “Squawk Box” on Wednesday.
Chesky said the company would “probably” want to integrate ChatGPT eventually.
Airbnb on Tuesday launched a series of new social features, such as direct messaging, to its platform. The update also included a personalized version of the company’s chatbot launched earlier this year that can cancel and change reservations for users in North America.
In an interview with Bloomberg this week, Chesky said that the OpenAI chatbot isn’t “quite ready” for integration with Airbnb. He said the model was made using 13 different chatbots and that Airbnb is depending heavily on Alibaba’s Qwen model.
Chesky, who is a close friend of OpenAI CEO Sam Altman, said it’s only the beginning of the AI revolution and he expects the technology to fuel a consumer app craze over the next few years.
“We’re all going to have to work together,” he said. “AI is going to lift up a lot of companies. If they want to vertically integrate every single thing, that’s going to be very, very difficult.”
OpenAI did not immediately respond to a request for comment.
Meta will lay off roughly 600 employees within its artificial intelligence unit as the company looks to reduce layers and operate more nimbly, a spokesperson confirmed to CNBC on Wednesday.
The company announced the cuts in a memo from its Chief AI Officer Alexandr Wang, who was hired in June as part of Meta’s $14.3 billion investment in Scale AI. Workers across Meta’s AI infrastructure units, Fundamental Artificial Intelligence Research unit and other product-related positions will be impacted.
Meta has been aggressively investing in AI as it works to keep pace with rivals like OpenAI and Google, pouring billions of dollars into infrastructure projects and recruitment.
On Tuesday, the company announced a $27 billion deal with Blue Owl Capital to fund and develop its massive Hyperion data center in rural Louisiana. The data center is expected to be large enough to cover a “significant part of the footprint of Manhattan,” Meta CEO Mark Zuckerberg said in a post in July.
A new Volkswagen ID.3 electric car prepares to pass final inspection at the Volkswagen plant on May 14, 2025 in Dresden, Germany.
Sean Gallup | Getty Images News | Getty Images
German auto giant Volkswagen on Wednesday warned of temporary production outages citing China’s export restrictions on semiconductors made by Nexperia.
The update comes shortly after the German Association of the Automotive Industry (VDA), the country’s main car industry lobby, said the China-Netherlands dispute over Nexperia could lead to “significant production restrictions in the near future” if the supply interruption of chips cannot be swiftly resolved.
A spokesperson for Volkswagen told CNBC by email that while Nexperia is not a direct supplier of the company, some Nexperia parts are used in its vehicle components, which are supplied by Volkswagen’s direct suppliers.
“We are in close contact with all relevant stakeholders in light of the current situation to identify potential risks at an early stage and to be able to make decisions regarding any necessary measures,” a Volkswagen spokesperson said, noting that the firm’s production is currently unaffected.
“However, given the evolving circumstances, short-term effects on production cannot be ruled out,” they added.
Shares of Volkswagen traded 2.2% lower at 2 p.m. London time (9 a.m. ET).
Last month, the Dutch government took control of Nexperia, a Chinese-owned semiconductor maker based in the Netherlands, in what was seen as a highly unusual move.
The Dutch government seized control of the company, which specializes in the high-volume production of chips used in automotive, consumer electronics and other industries, citing fears the firm’s tech “would become unavailable in an emergency.”
China responded by blocking exports of the firm’s finished products, sparking alarm among Europe’s auto industry.
A spokesperson for Germany’s Economy Ministry said the government is concerned about chip supply chain difficulties, according to Reuters.