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Larry Ellison and Monica Seles and Bill Gates (back row) watch Carlos Alcaraz of Spain play against Alexander Zverev of Germany in their Quarterfinal match during the BNP Paribas Open in Indian Wells, California, on March 14, 2024.

Clive Brunskill | Getty Images

It’s been a good year for Larry Ellison.

Oracle’s co-founder has gained roughly $75 billion in paper wealth as the software company he started in 1979 enjoyed its biggest stock rally since 1999 and the dot-com boom.

While the S&P 500 index has gained 27% in 2024, Oracle shares have shot up 63%, lifting Ellison’s net worth to more than $217 billion, according to Forbes, behind only Tesla CEO Elon Musk and Amazon founder Jeff Bezos among the world’s richest people.

At 80, Ellison is a senior citizen in the tech industry, where his fellow billionaire founders are generally decades younger. Meta CEO Mark Zuckerberg, whose net worth has also ballooned past $200 billion, is half his age.

But Ellison has found the fountain of youth both personally and professionally. After being divorced several times, Ellison was reported this month to be involved with a 33-year-old woman. And at a meeting with analysts in Las Vegas in September, Ellison was as engaged as ever, mentioning offhand that the night before, he and his son were having dinner with his good friend Musk, who’s advising President-elect Donald Trump (then the Republican nominee) while running Tesla and his other ventures.

His big financial boon has come from Oracle, which has maneuvered its way into the artificial intelligence craze with its cloud infrastructure technology and has made its databases more accessible.

ChatGPT creator OpenAI said in June that it will use Oracle’s cloud infrastructure. Earlier this month, Oracle said it had also picked up business from Meta.

Startups, which often opt for market leader Amazon Web Services when picking a cloud, have been engaging Oracle as well. Last year, video generation startup Genmo set up a system to train an AI model with Nvidia graphics processing units, or GPUs, in Oracle’s cloud, CEO Paras Jain said. Genmo now relies on the Oracle cloud to produce videos based on the prompts that users type in on its website.

“Oracle produced a different product than what you can get elsewhere with GPU computing,” Jain said. The company offers “bare metal” computers that can sometimes yield better performance than architectures that employ server virtualization, he said.

In its latest earnings report earlier this month, Oracle came up short of analysts’ estimates and issued a forecast that was also weaker than Wall Street was expecting. The stock had its worst day of 2024, falling almost 7% and eating into the year’s gains.

Oracle has the best infrastructure for hosting GPUs anywhere, says Citizens JMP's Patrick Walravens

Still, Ellison was bullish for the future.

“Oracle Cloud Infrastructure trains several of the world’s most important generative AI models because we are faster and less expensive than other clouds,” Ellison said in the earnings release.

For the current fiscal year, which ends in May, Oracle is expected to record revenue growth of about 10%, which would mark its second-strongest year of expansion since 2011.

Jain said that when Genmo has challenges, he communicates with Oracle sales executives and engineers through a Slack channel. The collaboration has resulted in better reliability and performance, he said. Jain said Oracle worked with Genmo to ensure that developers could launch the startup’s Mochi open-source video generator on Oracle’s cloud hardware with a single click.

“Oracle was also more price-competitive than these large hyperscalers,” Jain said.

‘That’s going to be so easy’

Three months before its December earnings report, at the analyst event in Las Vegas, Oracle had given a rosy outlook for the next three years. Executive Vice President Doug Kehring declared that the company would produce more than $66 billion in revenue in the 2026 fiscal year, and over $104 billion in fiscal 2029. The numbers suggested acceleration, with a compound annual growth rate of over 16%, compared with 9% in the latest quarter.

After Kehring and CEO Safra Catz spoke, it was Ellison’s turn. The company’s chairman, technology chief and top shareholder strutted onto the stage in a black sweater and jeans, waved to the analysts, licked his lips and sat down. For the next 74 minutes, he answered questions from seven analysts.

“Did — did he say $104 billion?” Ellison said, referring to Kehring’s projection. Some in the crowd giggled. “That’s going to be so easy. It is kind of crazy.”

Oracle’s revenue in fiscal 2023 was just shy of $50 billion.

The new target impressed Eric Lynch, managing director of Scharf Investments, which held $167 million in Oracle shares at the end of September.

“For a company doing single digits for a decade or so, that’s unbelievable,” Lynch told CNBC in an interview.

Oracle co-founder and Chairman Larry Ellison delivers a keynote address during the Oracle OpenWorld on October 22, 2018 in San Francisco, California. 

Justin Sullivan | Getty Images

Oracle is still far behind in cloud infrastructure. In 2023, Amazon controlled 39% share of market, followed by Microsoft at 23% and Google at 8.2%, according to industry researcher Gartner. That left Oracle with 1.4%.

But in database software, Oracle remains a stalwart. Gartner estimated that the company had 17% market share in database management systems in 2023.

Ellison’s challenge is to find opportunities for expansion.

Last year, he visited Microsoft headquarters in Redmond, Washington, for the first time to announce a partnership that would enable organizations to use Oracle’s database through Microsoft’s Azure cloud. Microsoft even installed Oracle hardware in its data centers.

In June, Oracle rolled out a similar announcement with Google. Then, in September, Oracle finally partnered with Amazon, introducing its database on AWS.

Oracle and Amazon had exchanged barbs for years. AWS introduced a database called Aurora in 2014, and Amazon worked hard to move itself off Oracle. Following a CNBC report on the effort, Ellison expressed doubt about Amazon’s ability to reach its goal. But the project succeeded.

In 2019, Amazon published a blog post titled, “Migration Complete – Amazon’s Consumer Business Just Turned off its Final Oracle Database.”

Friendlier vibe

Ellison looked back on the history between the two companies at the analyst meeting in September.

“I got kind of got cute commenting about Amazon uses Oracle, doesn’t use AWS, blah, blah,” he said. “And that hurt some people’s feelings. I probably shouldn’t have said it.”

He said a friend at a major New York bank had asked him to make sure the Oracle database works on AWS.

“I said, ‘Great. It makes sense to me,'” Ellison said.

The multi-cloud strategy should deliver gains in database market share, said analyst Siti Panigrahi of Mizuho, which has the equivalent of a buy rating on Oracle shares. Cloud deals related to AI will also help Oracle deliver on its promise for faster revenue growth, he said.

“Oracle right now has an end-to-end stack for enterprises to build their AI strategy,” said Panigrahi, who worked on applications at Oracle in the 2000s.

So far, Oracle has been mainly cutting high-value AI deals with the likes of OpenAI and Musk’s X.ai. Of Oracle’s $97 billion in remaining performance obligations, or revenue that hasn’t yet been recognized, 40% or 50% of it is tied to renting out GPUs, Panigrahi said.

Oracle didn’t respond to a request for comment.

Panigrahi predicts that a wider swath of enterprises will begin adopting AI, which will be a boon to Oracle given its hundreds of thousands of big customers.

There’s also promise in Oracle Health, the segment that came out of the company’s $28.2 billion acquisition of electronic health record software vendor Cerner in 2022.

Yoshiki Hayashi, Marc Benioff and Larry Ellison attend the Transformative Medicine of USC: Rebels with a Cause Gala in Santa Monica, California, on Oct. 24, 2019.

Joshua Blanchard | Getty Images

Unlike rival Epic, Oracle Health lost U.S. market share in 2023, according to estimates from KLAS Research. But Ellison’s connection to Musk, who is set to co-lead Trump’s Department of Government Efficiency, might benefit Oracle Health “if there is a bigger push towards modernizing existing healthcare systems,” analysts at Evercore said in a note last week. They recommend buying the stock.

For now, Oracle is busy using AI to rewrite Cerner’s entire code base, Ellison said at the analyst event.

“This is another pillar for growth,” he said. “I think you haven’t quite seen it yet.”

Hours earlier, Ellison had put in a call to Marc Benioff, co-founder and CEO of Salesforce. Benioff knows Ellison as well as anyone, having worked for him for 13 years before starting the cloud software company that’s now a big competitor.

“It was awesome,” Benioff said in a wide-ranging interview the next day, regarding his chat with Ellison.

Benioff spoke about his former boss’s latest run of fortune.

“Larry really deeply wants this,” Benioff said. “This is very important to him, that he is building a great company, what he believes is one of the most important companies in the world, and also, wealth is very important to him.”

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OpenAI says it needs ‘more capital than we’d imagined’ as it lays out for-profit plan

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OpenAI says it needs 'more capital than we’d imagined' as it lays out for-profit plan

OpenAI announces official plans to change into a for-profit company

OpenAI said Friday that in moving toward a new for-profit structure in 2025, the company will create a public benefit corporation to oversee commercial operations, removing some of its nonprofit restrictions and allowing it to function more like a high-growth startup.

“The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission,” OpenAI’s board wrote in the post. “We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.”

The pressure on OpenAI is tied to its $157 billion valuation, achieved in the two years since the company launched its viral chatbot, ChatGPT, and kicked off the boom in generative artificial intelligence. OpenAI closed its latest $6.6 billion round in October, gearing up to aggressively compete with Elon Musk’s xAI as well as MicrosoftGoogleAmazon and Anthropic in a market that’s predicted to top $1 trillion in revenue within a decade.

Developing the large language models at the heart of ChatGPT and other generative AI products requires an ongoing investment in high-powered processors, provided largely by Nvidia, and cloud infrastructure, which OpenAI largely receives from top backer Microsoft.

OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC confirmed in September. Those numbers are increasing rapidly.

By transforming into a Delaware PBC “with ordinary shares of stock,” OpenAI says it can pursue commercial operations, while separately hiring a staff for its nonprofit arm and allowing that wing to take on charitable activities in health care, education and science.

The nonprofit will have a “significant interest” in the PBC “at a fair valuation determined by independent financial advisors,” OpenAI wrote.

How Sam Altman is tackling a growing threat to the future of OpenAI: Elon Musk

OpenAI’s complicated structure as it exists today is the result of its creation as a nonprofit in 2015. It was founded by CEO Sam Altman, Musk and others as a research lab focused on artificial general intelligence, or AGI, which was an entirely futuristic concept at the time.

In 2019, OpenAI aimed to move past its role as solely a research lab in hopes of functioning more like a startup, so it created a so-called capped-profit model, with the nonprofit still controlling the overall entity.

“Our current structure does not allow the Board to directly consider the interests of those who would finance the mission and does not enable the nonprofit to easily do more than control the for-profit,” OpenAI wrote in Friday’s post.

OpenAI added that the change would “enable us to raise the necessary capital with conventional terms like our competitors.”

Musk’s opposition

OpenAI’s efforts to restructure face some major hurdles. The most significant is Musk, who is in the midst of a heated legal battle with Altman that could have a significant impact on the company’s future.

In recent months, Musk has sued OpenAI and asked a court to stop the company from converting to a for-profit corporation from a nonprofit. In posts on X, he described that effort as a “total scam” and claimed that “OpenAI is evil.” Earlier this month, OpenAI clapped back, alleging that in 2017 Musk “not only wanted, but actually created, a for-profit” to serve as the company’s proposed new structure.

In addition to its face-off with Musk, OpenAI has been dealing with an outflow of high-level talent, due in part to concerns that the company has focused on taking commercial products to market at the expense of safety.

In late September, OpenAI Chief Technology Officer Mira Murati announced she would depart the company after 6½ years. That same day, research chief Bob McGrew and Barret Zoph, a research vice president, also announced they were leaving. A month earlier, co-founder John Schulman said he was leaving for rival startup Anthropic.

Altman said during a September interview at Italian Tech Week that recent executive departures were not related to the company’s potential restructuring: “We have been thinking about that — our board has — for almost a year independently, as we think about what it takes to get to our next stage,” he said.

Those weren’t the first big-name exits. In May, OpenAI co-founder Ilya Sutskever and former safety leader Jan Leike announced their departures, with Leike also joining Anthropic.

Leike wrote in a social media post at the time that disagreements with leadership about company priorities drove his decision.

“Over the past years, safety culture and processes have taken a backseat to shiny products,” he wrote.

One employee, who worked under Leike, quit soon after him, writing on X in September that “OpenAI was structured as a non-profit, but it acted like a for-profit.” The employee added, “You should not believe OpenAI when it promises to do the right thing later.”

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Google CEO Pichai struggled to navigate a pressure-filled year

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Google CEO Pichai struggled to navigate a pressure-filled year

NEW YORK, NY – NOVEMBER 01: Sundar Pichai, C.E.O., Google Inc. speaks at the New York Times DealBook conference on November 1, 2018 in New York City. (Photo by Stephanie Keith/Getty Images)

Stephanie Keith | Getty Images News | Getty Images

Google’s blowout earnings report in April, which sparked the biggest rally in Alphabet shares since 2015 and pushed its market cap past $2 trillion for the first time, tempered fear that the company was falling behind in artificial intelligence.

As executives enthusiastically talked about the results with Google’s employees at an all-hands meeting the following week, it was clear that Wall Street viewed things differently than the company’s workforce.

“We’ve noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce,” one employee wrote in a comment that was read by executives at the meeting. “How does leadership plan to address these concerns and regain the trust, morale and cohesion that have been foundational to our company’s success?”

The comment was highly rated on an internal forum.

“Despite the company’s stellar performance and record earnings, many Googlers have not received meaningful compensation increases” another top-rated employee question read.

That meeting set the stage for what would be a year of contrasting takes from the company’s vocal workforce. As Google faced some of the most intense pressure its experienced since going public two decades ago, so too did CEO Sundar Pichai, who took the helm in 2015.

Pichai oversaw a steady stream of revenue growth this year in key areas like search ads and cloud. The company rolled out groundbreaking technologies, rounded out its AI strategy despite a slew of embarrassing product incidents and saw its stock price rise more than 40% as of Thursday’s close, ahead of the S&P 500 but trailing rivals Meta and Amazon.

Over the course of 2024, many staffers questioned Pichai’s vision following product mishaps in the first half of the year as well as internal shake-ups and layoffs, according to conversations with more than a dozen employees, audio recordings and internal correspondence. 

As the second half of the year progressed and Google rolled out a number of eye-catching AI products, Pichai’s standing improved, though some skepticism remains, sources told CNBC.

Google DeepMind chief Demis Hassabis (L) and Google chief executive Sundar Pichai open the tech titan’s annual I/O developers conference focusing on how artificial intelligence is being woven into search, email, virtual meetings and more. 

Glenn Chapman | AFP | Getty Images

The AI race pressure cooker

After the introduction of ChatGPT in late 2022, the tech industry saw an influx of AI products from Microsoft, with its Copilot AI assistant, and Meta, which placed its Meta AI chatbot in the search functions of its apps, as well as from hot startups like OpenAI and Perplexity.

The popularity of those tools has eaten into Google’s grip on U.S. search. The company’s share of the search advertising market is expected to dip below 50% in 2025, which would be the first time falling below that mark in more than a decade, according to research firm eMarketer.

Google responded to the pressures from new AI tools with offerings of its own. The company in 2024 rebranded its family of AI models as Gemini and released a number of products that were well received. But in its scramble to play catch-up, the company also released a pair of AI products that initially proved embarrassing. 

In February, Google launched Imagen 2, which turned user prompts into AI-generated images. Immediately after it was introduced, the product came under scrutiny for historical inaccuracies discovered by users. Notably, when one user asked it to show a German soldier in 1943, the tool depicted a racially diverse set of soldiers wearing German military uniforms of the era. 

The company pulled the feature, and Pichai told employees the company had “offended our users and shown bias,” according to a memo. Google said it would take a few weeks to relaunch Imagen 2, but it ended up being six months before it was revived as Imagen 3 in August. 

“We definitely messed up on the image generation,” Google co-founder Sergey Brin told a small crowd at a hacker house in March, in a video posted to YouTube. “It was mostly due to just not thorough testing.” 

The launch of AI Overview in May caused a similar reaction. 

That product showed users AI summaries atop Google’s traditional search results. Pichai hyped the product, calling it the biggest change to search in 25 years. Once again, users were quick to find problems.

When asked “How many rocks should I eat each day,” the tool said, “According to UC Berkeley geologists, people should eat at least one small rock a day.” AI Overview also listed the vitamins and digestive benefits of rocks.

Google responded by saying it would add more guardrails to AI Overview for health-related queries but said the mistakes weren’t hallucinations, and were rather just rare edge cases. Search Vice President Liz Reid told employees at an all-hands meeting in June that AI Overview’s launch shouldn’t discourage them from taking risks. 

“We should act with urgency,” Reid said. “When we find new problems, we should do the extensive testing but we won’t always find everything and that just means that we respond.”

Jaque Silva | Nurphoto | Getty Images

Beyond its AI blunders, Google also saw its greatest regulatory challenges to date in 2024.

In August, a federal judge ruled that the company illegally holds a monopoly in the search market. The Justice Department in November asked that Google be forced to divest its Chrome internet browser unit as a remedy for the ruling

The DOJ’s request represents the agency’s most aggressive attempt to break up a tech company since its antitrust case against Microsoft, which reached a settlement in 2001.

The remedies are expected to be decided next summer, and Google has said it will appeal, likely dragging out the situation a couple more years, but the company faces more antitrust hurdles. 

In a separate case, the DOJ accused the company of illegally dominating online ad technology. That trial closed in September and awaits a judge ruling. In October, a U.S. judge issued a permanent injunction that will force Google to offer alternatives to its Google Play app store for Android phones. After the ruling in October, Google won a temporary pause on the ruling, meaning it won’t have to open up Android to more app stores yet.

A search for vision

Amid the external pressure, Google notched some notable victories particularly toward the end of 2024, leading to a more positive sentiment from people within and outside the company.

Google successfully launched its most powerful suite of new Gemini models that underpin all of the company’s AI products, including its lightweight model Gemini Flash, which has been popular among developers. YouTube’s combined ad and subscription revenue over the past four quarters surpassed $50 billion. 

In the third quarter, Google saw the fastest-growing cloud business across the big tech players, up 35% over last year, with operating margins of 17%. The company has also seen double-digit revenue growth for each of the past four quarters and launched Trillium, its powerful sixth generation Tensor Processing Units, or TPUs, which were also found to have powered Apple’s AI models. 

Despite the blunders, AI Overview reached nearly 1 billion monthly users by the end of October. Demand for AI software has also driven consistent growth for the company’s cloud infrastructure. And Google launched an impressive video generation product, Veo 2, this month as well as an updated AI note-taking product, NotebookLM.

Beyond AI, Google in December announced Willow, a chip the company calls its biggest step in the march toward commercially viable quantum computing. The Waymo self-driving car unit was also a bright spot, expanding its robotaxi service to three cities and laying the groundwork for even more expansion in 2025. The company has delivered 4 million fully autonomous rides this year, with plans to commercially launch in Austin, Texas, and Atlanta next year.  

A Google quantum processor “Sycamore” is held up to the camera wearing blue gloves. In 2019, Google made a breakthrough in quantum computing. 

Peter Kneffel | Picture Alliance | Getty Images

But as Pichai approaches a decade running Google and starts his sixth year as CEO of parent Alphabet, questions remain about his ability to guide the company into the future.

Internally, employees routinely criticize leadership on the company’s Memegen messaging board, and some have aired their grievances publicly. 

“Google does not have one single visionary leader,” a Google software engineer wrote in a LinkedIn post earlier this year that received more than 8,500 reactions. “Not a one. From the C-suite to the SVPs to the VPs, they are all profoundly boring and glassy-eyed.”

In October, Google announced it would shake up the leadership of its ads and search division.

The company replaced longtime search boss Prabhakar Raghavan with Nick Fox, a deputy of Raghavan’s and a career Google employee. Raghavan was given the title of “chief scientist,” but internally, he is now listed as an “IC,” or individual contributor. 

Google also shifted the team working on its Gemini AI app to the Google DeepMind division, under AI head Demis Hassabis. Employees praised Pichai’s leadership shuffle, but some complained that the moves should’ve happened sooner.

Notably, some employees were perturbed when Raghavan addressed employees at an all-hands meeting in April, when he urged them to move faster, according to several people who spoke with CNBC. Raghavan noted that the staffers working to fix the failed Imagen 2 tool had increased their workloads from 100 hours a week to 120 hours to correct it in a timely manner.

Pichai has made efforts to get Google back to its nimble startup-like culture. 

When addressing employees, Pichai often name-checked co-founders Sergey Brin and Larry Page to remind them of Google’s scrappy roots. He’s flattened the company, removing 10% of middle management, according to audio of a December all-hands meeting. And in the spring, Pichai greenlit a hackathon, allowing employees to build using Google products that have yet to be announced. Pichai has also personally joined meetings with Google’s Labs team and enabled them to move quickly on products like NotebookLM, one of the company’s hit AI products in 2024.

Google Co-Founder Sergey Brin speaks during a press conference after the third game of the Google DeepMind Challenge Match against Google-developed supercomputer AlphaGo at a hotel in Seoul on March 12, 2016.

Jung Yeon-Je | AFP | Getty Images

After Brin’s hacker house appearance in March, some employees internally joked he should retake the helm, nostalgic for what they perceived as a visionary leader devoid of corporate speak. 

Brin co-founded Google with Page in 1998, but he stepped down as president of Alphabet in 2019. Brin, who remains a board member and a principal shareholder with a stake worth more than $140 billion, began appearing more frequently on campus starting in 2023, as part of an effort to help ramp up Google’s position in the hypercompetitive AI market. Employees, particularly working in AI and DeepMind said they’ve seen Brin walking around the company’s Mountain View, California, headquarters throughout the year and have been able to ask him questions for projects they’re pursuing.

Despite Brin’s reemergence, several employees told CNBC they’re doubtful he could adequately run what has become an increasingly larger and complex corporation. 

Employees said that although Pichai didn’t strike them as particularly visionary or as a wartime leader, it’s hard to find someone better suited for the job, given all the complexities of Alphabet. The key quandary remains: move too early and risk widespread criticism; move too late and risk missing the boat.

Culture Clashes

Through the year, morale inside Google wavered. Efforts to cut costs across the company in order to invest more in AI resulted in some teams feeling bifurcated and created yet another challenge for Pichai.

Within the company’s AI and DeepMind divisions, morale is mostly high, according to employees, boosted by hefty investments. Elsewhere, the vibes have been marred by cost cuts, bureaucracy and declining trust in leadership, employees said. 

DeepMind and AI teams have held off-sites, team-building activities, and have much bigger travel and recruiting budgets, people familiar with the matter said. In the spring, the company moved employees out of an eight-story office on San Francisco’s waterfront Embarcadero street and replaced them with AI and AI adjacent teams. 

Google DeepMind co-founder and Chief Executive Officer Demis Hassabis gives a conference during the Mobile World Congress (MWC), the telecom industry’s biggest annual gathering, in Barcelona on February 26, 2024.

Pau Barrena | Afp | Getty Images

A meme posted internally in November summed it up. 

The meme featured a photo of the cast of “Wicked” actors, where one, labeled “execs” looked longingly at one fellow actor labeled “Gemini” while ignoring the other beside her, which was labeled as “users.”

A Google spokesperson contested the idea that AI workers are receiving favorable treatment and said higher travel and recruiting budgets are not exclusive to AI teams or DeepMind. 

“Most Googlers, regardless of team, continue to feel positively about our mission and the company’s future, and are proud to work here,” the spokesperson said. 

A few employees say they’re no longer incentivized by the prospects of landing a promotion, which have become harder to achieve, and rather by the hope of avoiding layoffs. 

Despite slashing 12,000 jobs, or roughly 6% of its workforce, in 2023, Google has continued eliminating roles this year. In her first public statements as Google’s CFO, Anat Ashkenazi, told Wall Street in October that one of her top priorities would be to drive more “cost efficiencies” across the company in order to invest more in AI.

“I think any organization can always push a little further and I’ll be looking at additional opportunities,” Ashkenazi said.

That month, Google posted a job listing for a “Central Reorg Support Team Partner.” The responsibilities of that fixed-term contract position would include consulting with local HR teams and noted the need for the support staff’s “ability to operate with empathy and diffuse/de-escalate challenging conversations/situations.” 

“Hire the smartest people so they can tell us what to do,” one employee wrote on the internal forum in meme-style font atop the images of Brin and Page. “Hire a reorg consultant so they can tell us how to layoff the smartest people,” another said. 

Google ultimately took the job listing down.

Pro-Palestinian protesters are blocked the Google I/O developer conference entrance to protest Google’s Project Nimbus and Israeli attacks on Gaza and Rafah, at its headquarters in Mountain View, California, United States on May 14, 2024. 

Tayfun Coskun | Anadolu | Getty Images

Touting its AI technology to clients, Pichai’s leadership team has been aggressively pursuing federal government contracts, which has caused a heightened strain in some areas within the outspoken workforce since the beginning of the year.

Google terminated more than 50 employees after a series of protests against Project Nimbus, a $1.2 billion joint contract with Amazon that provides the Israeli government and military with cloud computing and AI services. Executives repeatedly said the contract didn’t violate any of the company’s “AI principles.”

However, documents and reports show the company’s agreement allowed for giving Israel AI tools that included image categorization, object tracking, as well as provisions for state-owned weapons manufacturers. Earlier this month, a New York Times report found that four months prior to signing on to Nimbus, officials at the company worried that signing the deal would harm its reputation and that “Google Cloud services could be used for, or linked to, the facilitation of human rights violations.”

In an all-hands meeting in April, a highly rated question asked why employees who did not participate in the protests were also fired, which was reported and cited in a National Labor Relations Board complaint from affected employees. Chris Rackow, Google’s security chief, took the stage at the all-hands and rebutted those claims.

“This was a very clear case of employees disrupting and occupying work spaces, and making other employees feel unsafe,” a Google spokesperson told CNBC, adding that the company “carefully confirmed” that every person terminated was involved in the protests. “By any standard, their behavior was completely unacceptable.”

That round of job eliminations underscored Google’s clampdown on internal discussions related to hot-button topics, including politics and geopolitical conflicts, which was encouraged by executives several years prior.

One internal meme that got more than 2,000 likes, compared Google to Star Wars’ Anakin Skywalker. The meme shows an image of a smiling childhood Skywalker, framed by one of the company’s original, colorful employee badges. The meme progresses Skywalker’s age in two later versions of the badge. 

The final badge shows Darth Vader working for “Google,” spelled out in the font of IBM’s logo.

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Waymo dominated U.S. robotaxi market in 2024, but Tesla and Amazon’s Zoox loom

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Waymo dominated U.S. robotaxi market in 2024, but Tesla and Amazon's Zoox loom

A Waymo rider-only robotaxi is seen during a test ride in San Francisco, California, U.S., December 9, 2022. 

Paresh Dave | Reuters

Despite General Motor’s decision to shutter its Cruise robotaxi business earlier this month, the U.S. has never been closer to a driverless future. 

For the autonomous vehicle industry, 2024 will be remembered as the year that at least one major U.S. player — Alphabet-owned Waymo — saw glimmers of mainstream adoption and made strides toward commercial viability.

That came after a rocky start for the self-driving car industry domestically. 

Following a decade of sizable venture investments in AV companies, Uber sold off its self-driving business in 2020 after a fatal collision, and two years later Ford abandoned its stake in its robotaxi developers Argo.AI. In 2023, Cruise paused all of its driverless operations after collisions led to investigations and a suspension of its licenses in California. When GM decided to retreat from the robotaxi business earlier this month, it had already poured $10 billion into Cruise. 

Waymo may have outlasted Cruise to lead the U.S. market but domestic competitors are working to catch up, too — most notably Elon Musk’s automaker Tesla and Amazon-owned Zoox.

At stake is a share of a massive market for ride-hailing services in and beyond the U.S. According to research by Fortune Business Insights, the global ride-sharing market is projected to grow from an estimated $123.08 billion in 2024 to $480.09 billion by 2032.

As 2025 approaches, here’s where these major players stand.

Hyundai Motor and Waymo have agreed to a multiyear, strategic partnership that includes the self-driving company adding the South Korean automaker’s Ioniq 5 electric vehicle to its robotaxi fleet.

Courtesy image

Waymo pulls way ahead

What began as “project chauffeur” at Google in 2009 became a publicly available, commercial robotaxi service across multiple U.S. cities this year.

The project, rebranded as Waymo in 2016, has now completed more than 4 million paid autonomous trips in total, the company said Wednesday. That’s more than triple the number a year ago, when Waymo said it had completed around 700,000 driverless ride-hail trips.

Waymo’s service now operates in Phoenix, San Francisco and Los Angeles, covering more than 500 square miles of public roads.

The company dropped its digital velvet rope in June and opened its robotaxi service to all San Franciscans, allowing them to hail rides via the Waymo One app. Opening to the general public proved to riders, and internally, that the company’s fleet of AVs can work well in the traffic conditions of a complex urban environment.

In July, Alphabet’s then-CFO, Ruth Porat, announced a multiyear investment by Google’s parent into Waymo on an earnings call, which amounted to $5.6 billion in total, with $5 billion of that coming from Alphabet.

Waymo co-CEOs, Tekedra Mawakana and Dmitri Dolgov, told employees at an all-hands meeting in November that they should scale up as aggressively as possible but do so with safety at the forefront of all their efforts, company insiders told CNBC.

A big focus for Waymo in 2025 will be expanding its robotaxi service to more cities, winning over riders and continuing research and development on newer technology that will allow the company’s AVs to operate in more weather and traffic conditions.

Waymo plans to launch a commercial service in Austin, Texas, and Atlanta, with rides available through the Uber app next year. It’s also begun testing in Miami with plans to offer rides to the public there in 2026.

Earlier this month, Waymo announced its first international testing destination in Tokyo. Waymo said it’s partnered with the taxi app GO and one of Japan’s largest taxi operators, Nihon Kotsu, and will commence test rides in early 2025.

Waymo showed off its next generation of self-driving vehicles, which it will be making with Chinese auto giant Geely, in August. Waymo’s custom hardware and software will be integrated into the Geely Zeekr electric SUVs. For this new robotaxi, Waymo was able to reduce the number of cameras on board from 29 to 13 and lower the number of costly lidar sensors on board from five to four.

The company also announced a partnership with Hyundai in October to integrate the automaker’s Ioniq 5 SUV into Waymo’s fleet of vehicles. The companies said they will begin testing the Waymo Ioniq 5s by late 2025. 

Waymo is already conducting testing and validation drives in Detroit, Buffalo, New York, and at a test track in Columbus, Ohio, with its Jaguar I-Pace and newer Geely Zeekr vehicles to understand how these systems will perform in different types of traffic and weather.

Given its progress and increasing presence on U.S. streets, Waymo received plenty of social media and publicity in 2024, stirring delight and controversy.

In a Reddit channel, R/Waymo, users document every incident involving the company, including one in February where a crowd attacked a Waymo vehicle and set it on fire. The forum also dissected instances when Waymo vehicles were involved in collisions or backed up traffic.

A separate incident went viral when a woman posted on X in September that she was stuck in her Waymo robotaxi when two men stopped it by standing outside of the vehicle, asking for her phone number.

To maintain public trust in the safety of its service, Waymo has built a large public affairs operation, published more detailed safety reports in 2024, and is working closely with the National Highway Traffic Safety Administration, first responders and authorities in the cities where it operates.

Tesla’s Cybercab robotaxi is displayed during the AutoMobility LA 2024 auto show at the Los Angeles Convention Center in Los Angeles, November 21, 2024. 

Robyn Beck | AFP | Getty Images

Tesla unwraps its robotaxi concept

Musk, Tesla’s CEO, has been promising “robotaxi-ready” cars for about a decade. Each year since 2016, he has declared the company is about a year away from making his vision a reality, but Tesla still doesn’t manufacture robotaxis or run a driverless ride-hailing service.

While Tesla didn’t deliver on its robotaxi promises in 2024, Musk revealed the look and feel of Tesla’s “dedicated robotaxi” at an event in October held at a movie studio lot in Burbank, California. He called the vehicle the Cybercab and said Tesla wants to produce it by 2027 and sell it for under $30,000.

The fan-pleasing robotaxi concept was a two-seater with butterfly doors and no steering wheel or pedals. The Petersen Automotive Museum already added a preproduction Cybercab to its collection earlier this month.

At the October event, Tesla also showed off the Robovan, a low-clearance autonomous bus with an art deco design aesthetic.

Musk has promised that Tesla’s Model Y and other vehicles will be able to function as robotaxis as early as 2025 once their systems are upgraded. Model Y vehicles, without safety drivers on board, also circulated in the closed environment of the studio lot at the Burbank event, showing how Tesla envisions they will function as robotaxis.

At the time of that “We, Robot” event, Tesla had not applied for licenses and permits that would allow it to operate a commercial robotaxi service in major U.S. markets where they are required by city or state authorities.

Despite the lack of permits and licenses, Musk told analysts in an October earnings call that Tesla had already built a “development app” allowing employees to request a ride that would take them anywhere in the San Francisco Bay Area. 

Bullish investors say Tesla will make good on its driverless technology promises as early as next year, but critics remain skeptical in part because of Musk’s many missed deadlines on robotaxis.

Tesla currently sells driver assistance systems, including its standard Autopilot option and a premium paid option called Full Self-Driving supervised. In correspondence with government agencies, Tesla calls these “partially automated” systems that are not robotaxi-ready. In fine print in its EV manuals, Tesla says FSD and Autopilot require a human driver at the wheel, ready to steer or brake at all times.

This year, Tesla corresponded with authorities in Austin regarding safety expectations for its autonomous vehicle technology.

Musk has repeatedly painted regulation as a hurdle that prevented Tesla from putting self-driving cars on U.S. roads. On a Tesla earnings call on Oct. 23, Musk said he would use his sway with now President-elect Donald Trump to establish a “federal approval process for autonomous vehicles.”

However, AV policy expert Bryant Walker Smith rejected the notion that regulation has curtailed any robotaxi business in a post for Stanford Law School’s Center for Internet and Society. Pointing to Waymo as an example, Walker Smith wrote, “AVs can be — and in fact are — lawfully deployed and regulated under existing federal statutory law.”

A Zoox autonomous robotaxi in San Francisco, California, US, on Wednesday, Dec. 4, 2024. 

David Paul Morris | Bloomberg | Getty Images

Zoox ‘toasters’ heat up

Well before Tesla showed off its Robovan and Cybercab designs, Zoox in February secured important permits allowing it to carry members of the public in its autonomous vehicles in Foster City, California, this year.

Founded in 2014 and acquired by Amazon in 2020 in a deal worth around $1.3 billion, Zoox has developed a unique self-driving shuttle that features big side windows, inward-facing seats and no steering wheel, driver’s seat or traditional windshield.

Zoox in March expanded the environmental conditions its AVs can handle on public roads to include “nighttime driving, driving under light rain and damp road conditions, and at speeds up to 45 mph,” a spokesperson told CNBC.

The company’s vehicles can carry four adults and luggage comfortably, and the small shuttles feature calming lighting, ambient music and  interior cameras to monitor what’s happening inside the cabin. Some early riders have described the look of the Zoox vehicles as “futuristic hot dog toasters” or “toasters on wheels.

Led by CEO Aicha Evans, Zoox is aiming to offer free rides to more members of the public early next year, before opening up to paying customers and the general public.

The service will start in Las Vegas and expand to San Francisco, the company told CNBC. It will begin with an early rider program called Zoox Explorers, allowing select users to ride in a Zoox for free and provide feedback.

With its robotaxis currently on public roads in Las Vegas, San Francisco and Foster City, this summer, Zoox also began testing in Austin and Miami, where its test fleet is still driving.

The company has also been attracting senior talent. One notable recent hire was Zheng Gao, previously the leader of Tesla’s autopilot hardware design team, now director of hardware engineering for Zoox.

A in San Francisco, California, US, on Thursday Aug. 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Cruise’s closure

Despite clear demand for robotaxi rides in the U.S. market, GM surprised some longtime industry observers when it announced earlier this month that it was exiting the business.

“Cruise was well on its way to a robotaxi business, but when you look at the fact you’re deploying a fleet, there’s a whole operations piece of doing that,” GM CEO Mary Barra said on a call announcing the strategic change. 

The Detroit automaker will now focus on the development of what it calls “personal autonomous vehicles” instead of robotaxis. GM has yet to determine how many of Cruise’s 2,300 employees will move into its broader tech team.

“In case it was unclear before, it is clear now: GM are a bunch of dummies,” Cruise founder Kyle Vogt, who sold Cruise to GM in 2016 and left the company in November 2023, posted on X after the automaker’s exit announcement. 

An early entrant in the U.S. robotaxi market, Cruise grounded its driverless operations in October 2023, shortly before Vogt’s departure. The National Highway Traffic Safety Administration fined Cruise $1.5 million after the company failed to disclose details of a serious crash that month involving a pedestrian.

A third-party probe into the incident ordered by GM and Cruise found that culture issues, ineptitude and poor leadership led to the accident.

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