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CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th US President in the US Capitol Rotunda in Washington, DC, on Jan. 20, 2025.

Saul Loeb | Via Reuters

The strengthening dollar is posing challenges for the biggest U.S. tech companies, which have become increasingly reliant on overseas revenue. With other currencies weakening, money made elsewhere is worth less when converted into dollars.

Amazon should suffer less than its megacap peers as the e-commerce giant generates a higher percentage of sales in the U.S. However, in its fourth-quarter earnings report on Thursday, Amazon said foreign exchange rates are to blame for the company’s weaker-than-expected first-quarter forecast and the possibility of its slowest revenue growth on record.

Revenue in the current quarter will land between $151 billion and $155.5 billion, suggesting annual growth of just 5% to 9%. Amazon’s slowest quarter for growth came in mid-2022, when revenue increased by 7.2%.

“This guidance anticipates an unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates,” Amazon said in the earnings release.

On its earnings call that followed, Amazon said it saw $700 million “more of foreign exchange headwind than we anticipated” in the fourth quarter. During the period, international revenue totaled $43.4 billion, or 23% of overall sales.

At Apple, roughly 58% of revenue came from overseas in the latest period. For Meta, it was 55%, Alphabet reported about 52%, Microsoft slightly under 50% and Tesla just over 50% for all of 2024.

The U.S. dollar index — which measures the greenback against a basket of rivals — hit its highest level in more than two years last month, ahead of President Donald Trump’s inauguration.  The dollar climbed steadily from late November through mid-January and has since fallen slightly.

The dollar may be particularly volatile in the coming weeks and months due to uncertainties surrounding Trump’s tariff policies and the threat of a trade war, most notably China, along with a lack of clarity about U.S. foreign policy, given comments Trump has made about potentially trying to take over Greenland and Gaza.

Here’s what other companies had to say on the topic of foreign exchange in issuing their financial results.

Microsoft CFO Amy Hood said foreign exchange did “not have a significant impact on our results and was roughly in line with expectation,” though for the current quarter it would bring down revenue growth by “more than 1 point.”

Susan Li, Meta’s finance chief, said the company expects “a three-point headwind in Q1” after foreign exchange “approximately neutral to revenue in Q4, just with the dollar strengthening, in particular against the euro.”

Alphabet CFO Anat Ashkenazi said investors can “expect a larger headwind to our revenues from the strengthening of the U.S. dollar relative to key currencies in Q1 versus Q4 2024.”

Apple finance chief Kevan Parekh warned last week that, “As the dollar strengthens significantly, we expect foreign exchange to be a headwind and to have a negative impact on revenue of about 2.5 percentage points on a year-over-year basis.”

The rise of the dollar will lead investors to pay close attention to job numbers out on Friday. When the Bureau of Labor Statistics releases its nonfarm payrolls count for January, it’s projected to show growth of 169,000, down from 256,000 in December, but nearly in line with the past three-month average. The unemployment rate is projected to stay at 4.1%, according to the Dow Jones consensus for the report.

After that, the the tech industry will wait to see what Nvidia has to say about foreign exchange when the chipmaker reports earnings later in February. In the period ending in October, Nvidia generated about 58% of its revenue from outside the U.S.

— CNBC’s Deirdre Bosa contributed to this report

WATCH: Why a stronger dollar could spell trouble for Big Tech

Why a stronger dollar could spell trouble for Big Tech

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Palo Alto tops earnings expectations, announces Chronosphere acquisition

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Palo Alto tops earnings expectations, announces Chronosphere acquisition

Chief executive officer at Palo Alto Networks Inc., Nikesh Arora attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris.

Chesnot | Getty Images

Palo Alto Networks beat Wall Street’s fiscal first-quarter estimates after the bell on Wednesday and announced plans to buy cloud observability platform Chronosphere for $3.35 billion.

The stock fell about 3%.

Here’s how the company did versus LSEG estimates:

  • Earnings per share: 93 cents adjusted vs. 89 cents expected
  • Revenue: $2.47 billion vs. $2.46 billion expected

Revenues grew 16% from $2.1 billion a year ago. Net income fell to $334 million, or 47 cents per share, from $351 million, or 49 cents per share in the year-ago period.

Palo Alto’s Chronosphere deal is slated to close in the second half of its fiscal 2026. The cybersecurity provider is also in the process of buying Israeli identity security firm CyberArk for $25 billion under CEO Nikesh Arora‘s acquisition spree.

He told investors in an earnings call that Palo Alto is making this simultaneous acquisition to address the fast-moving AI cycle.

“This large surge towards building AI compute is causing a lot of the AI players to think about newer models for software stacks and infrastructure stacks in the future,” he said.

Palo Alto guided for revenues between $2.57 billion and $2.59 billion in the second quarter, the midpoint of which was in line with a $2.58 billion estimate. For the full year, the company expects $10.50 billion to $10.54 billion, versus a $10.51 billion estimate.

Capital expenditures during the period were much higher than expectations at $84 million. StreetAccount expected $58.1 million. Remaining purchase obligations, which tracks backlog, grew to $15.5 billion and topped a $15.43 billion estimate.

The rise of artificial intelligence has also stirred up increasingly sophisticated cyberattacks and contributed to tools for customers. The Santa Clara, California-based company has infused AI into its tools and launched automated AI agents to help fend off attacks in October.

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Elon Musk’s xAI will be first customer for Nvidia-backed data center in Saudi Arabia

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Elon Musk's xAI will be first customer for Nvidia-backed data center in Saudi Arabia

Tesla CEO Elon Musk (L) talks with Nvidia CEO Jensen Huang during the U.S.-Saudi Investment Forum at the Kennedy Center on Nov. 19, 2025 in Washington, DC.

Win McNamee | Getty Images

Nvidia and xAI said on Wednesday that a large data center facility being built in Saudi Arabia and equipped with hundreds of thousands of Nvidia chips will count Elon Musk’s artificial intelligence startup as its first customer.

Musk and Nvidia CEO Jensen Huang were both in attendance at the U.S.-Saudi Investment Forum in Washington, D.C.

The announcement builds on a partnership from May, when Nvidia said it would provide Saudi Arabia’s Humain with chips that use 500 megawatts of power. On Wednesday, Humain said the project would include about 600,000 Nvidia graphics processing units.

Humain was launched earlier this year and is owned by the Saudi Public Investment Fund. The plan to build the data center was initially announced when Huang visited Saudi Arabia alongside President Donald Trump.

“Could you imagine, a startup company approximately 0 billion dollars in revenues, now going to build a data center for Elon,” Huang said.

The facility is one of the most prominent examples of what Nvidia calls “sovereign AI.” The chipmaker has said that nations will increasingly need to build data centers for AI in order to protect national security and their culture. It’s also a potentially massive market for Nvidia’s pricey AI chips beyond a handful of hyperscalers.

Huang’s appearance at an event supported by President Trump is another sign of the administration’s focus on AI. Huang has become friendly with the president as Nvidia lobbies to gain licenses to ship future AI chips to China.

When announcing the agreement, Musk, who was a major figure in the early days of the second Trump administration, briefly mixed up the size of the data center, which is measured in megawatts, a unit of power. He joked that plans for a data center that would be 1,000 times larger would have to wait.

“That will be eight bazillion, trillion dollars,” Musk joked.

Humain won’t just use Nvidia chips. Advanced Micro Devices and Qualcomm will also sell chips and AI systems to Humain. AMD CEO Lisa Su and Qualcomm CEO Cristiano Amon both attended a state dinner on Tuesday to honor Saudi Crown Prince Mohammed bin Salman.

AMD will provide chips that may require as much as 1 gigawatt of power by 2030. The company said the chips that it would provide are its Instinct MI450 GPUs for AI. Cisco will provide additional infrastructure for the data center, AMD said.

Qualcomm will sell Humain its new data center chips that were first revealed in October, called the AI200 and AI250. Humain will deploy 200 megawatts of Qualcomm chips, the company said.

WATCH: Qualcomm CEO on new AI chips

Qualcomm CEO on new AI chips: Trying to prepare for the next phase of AI data center growth

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Meta chief AI scientist Yann LeCun is leaving to create his own startup

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Meta chief AI scientist Yann LeCun is leaving to create his own startup

Yann LeCun, known as one of the godfathers of modern artificial intelligence and one of the first AI visionaries to join the company then known as Facebook, is leaving Meta.

LuCun said in a LinkedIn post on Wednesday that he plans to create a startup that specializes in a kind of AI technology that researchers have described as world models, analyzing information beyond web data in order to better represent the physical world and its properties.

“I am creating a startup company to continue the Advanced Machine Intelligence research program (AMI) I have been pursuing over the last several years with colleagues at FAIR, at NYU, and beyond,” LeCun wrote. “The goal of the startup is to bring about the next big revolution in AI: systems that understand the physical world, have persistent memory, can reason, and can plan complex action sequences.”

Meta will partner with LeCun’s startup.

The departure comes at a time of disarray within Meta’s AI unit, which was dramatically overhauled this year after the company released the fourth version of its Llama open-source large language model to a disappointing response from developers. That spurred CEO Mark Zuckerberg to spend billions of dollars recruiting top AI talent, including a June $14.5 billion investment in Scale AI to lure the startup’s 28-year-old CEO Alexandr Wang, now Meta’s new chief AI officer.

LeCun, 65, joined Facebook in 2013 to be director of the FAIR AI research division while maintaining a part-time professorial position at New York University. He said in the LinkedIn post that the “creation of FAIR is my proudest non-technical accomplishment.”

“I am extremely grateful to Mark Zuckerberg, Andrew Bosworth, Chris Cox, and Mike Schroepfer for their support of FAIR, and for their support of the AMI program over the last few years,” LeCun said. “Because of their continued interest and support, Meta will be a partner of the new company.”

At the time, Facebook and Google were heavily recruiting high-level academics like LeCun to spearhead their efforts to produce cutting-edge computer science research that could potentially benefit their core businesses and products.

LeCun, along with other AI luminaries like Yoshua Bengio and Geoffrey Hinton, centered their academic research on a kind of AI technique known as deep learning, which involves the training of enormous software systems called neural networks so they can discover patterns within reams of data. The researchers helped popularize the deep learning approach, and in 2019 won the prestigious Turing Award, presented by the Association for Computing Machinery.

Since then, LeCun’s approach to AI development has drifted from the direction taken by Meta and the rest of Silicon Valley.

Meta and other tech companies like OpenAI have spent billions of dollars in developing so-called foundation models, particularly LLMs, as part of their efforts to advance state-of-the-art computing. However, LeCun and other deep-learning experts, have said that these current AI models, while powerful, have a limited understanding of the world, and new computing architectures are needed for researchers to create software that’s on par with or surpasses humans on certain tasks, a notion known as artificial general intelligence.

“As I envision it, AMI will have far-ranging applications in many sectors of the economy, some of which overlap with Meta’s commercial interests, but many of which do not,” LeCun said in the post. “Pursuing the goal of AMI in an independent entity is a way to maximize its broad impact.”

Besides Wang, other recent notables that Zuckerberg brought in to revamp Meta’s AI unit include former GitHub CEO Nat Friedman, who heads the unit’s product team, and ChatGPT co-creator Shengjia Zhao, the group’s chief scientist.

In October, Meta laid off 600 employees from its Superintelligence Labs division, including some who were part of the FAIR unit that LeCun helped get off the ground. Those layoffs and other cuts to FAIR over the years, coupled with a new AI leadership team, played a major role in LeCun’s decision to leave, according to people familiar with the matter who asked not to be named because they weren’t authorized to speak publicly.

Additionally, LeCun rarely interacted with Wang nor TBD Labs unit, which is compromised of many of the headline-grabbing hires Zuckerberg made over the summer. TBD Labs oversees the development of Meta’s Llama AI models, which were originally developed within FAIR, the people said.

While LeCun was always a champion of sharing AI research and related technologies to the open-source community, Wang and his team favor a more closed approach amid intense competition from rivals like OpenAI and Google, the people said.

WATCH: Meta is a table pounder here.

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