Ryu Young-sang, CEO of South Korean telecoms giant SK Telecom, told CNBC that AI is helping telecoms firms improve efficiency in their networks.
Manaure Quintero | Afp | Getty Images
BARCELONA — Global telecommunications firms are talking up advances in key technologies like artificial intelligence as they look to transition away from being perceived as the “dumb pipes” behind the internet.
At the Mobile World Congress technology conference in Barcelona, CEOs of multiple telecoms companies described how they’re piling money into new technological innovations, including AI, next-generation 5G and 6G networks, satellite internet and even smart cities.
Makoto Takahashi, president and CEO of Japanese telecom giant KDDI, detailed plans to build a smart city dubbed Takanawa Gateway City in Tokyo, as well as roll out direct-to-cell satellite internet connectivity in partnership with Elon Musk’s Starlink venture.
Ralph Mupita, the CEO of Africa’s largest mobile network operator MTN, also took to the stage to share how the company has made significant strides toward becoming a company that offers both wireless connectivity and fintech services such as payments, e-commerce, insurance, lending and remittances.
“The telco business has served us well. It has iterated since. But the future is really about the future of platforms,” Mupita said in his keynote talk, adding the company has invested aggressively into other areas such as media streaming and financial services.
From ‘dumb pipes’ to ‘techcos’
Some lingo that has gathered steam in the telco industry for the last couple of years is the phrase “techco,” a portmanteau of the words “telco” and “tech.”
The term refers to the idea of a telco firm that operates more like a tech company — one that invests in cutting-edge technology and offers digital services to consumers to help them make money from the significant capital expenditures they’ve allocated to upgrading their wireless networks.
For two decades, tech giants such as Meta, Google, Amazon, Apple, Microsoft and Netflix have flourished in a world where content can be delivered directly to people’s devices, consumers can communicate seamlessly with one another, and data can be stored or streamed online without having to own cumbersome infrastructure — all thanks to innovations like the internet, smartphones and the cloud.
However, these innovations have disrupted telecom firms’ business models, to the point where they’re now often perceived as legacy players that are only there to lay down the cables and other network infrastructure that enable internet connectivity.
It’s a dilemma that’s earned telco brands the pejorative term “dumb pipes.”
“I remember early in the industry, even before mobile internet when SMS used to be the killer app,” Hatem Dowidar, CEO of UAE state-owned telecom company e&, said in a keynote speech at MWC. “We used to make messaging revenue. We used to make voice revenue.”
“All this over the years got disrupted by over-the-top players, to the point that today, a lot of telcos around the world are reduced to being a pipe of packets just getting data across the networks,” Dowidar added. “And competition is not staying still. They have the scale, they have the investment to go and disrupt even further.”
Telcos embrace AI
Ryu Young-sang, CEO of SK Telecom, told CNBC’s Arjun Kharpal that the South Korean telecoms giant has looked to AI technology to help it improve the efficiency of its wireless network — something that was consistently on display at numerous telco operators’ booths at MWC.
“For telcos, there are two aspects of AI. One is as a user, the other is as a supplier,” said Young-sang. “As a user, you are a telco business, you can improve your network efficiency, marketing and customer service by using the AI technology. You can improve your own operations.”
“The other aspect is, AI can be a growth engine, a new business opportunity for telcos,” he added. Data centers, the facilities that offer computing capacity needed to run generative AI applications like ChatGPT, are another key area where telcos like SK Telecom can play a key role, Young-sang said.
In the Western world, the race to build data centers is one that’s been mostly dominated by cloud computing giants — or “hyperscalers” — such as Amazon, Microsoft and Google. However, SK Telecom is aggressively expanding AI-ready data centers of its own globally, according to the firm’s CEO.
Can telcos catch up on tech?
For many telecom industry analysts, chatter about telcos seeking to transform themselves into tech players isn’t entirely new — companies in the industry have long been aware their relevance in communications and media has been dwindling.
Kester Mann, director of consumer and connectivity at market research firm CCS Insight, told CNBC that while he’s not a great fan of the “techco” term, it’s something the industry continues to focus on and has gathered pace in the context of the AI boom.
“AI can influence so many areas … and obviously that does play to that trend around telco to techco and operators positioning themselves more than just a connectivity provider,” Mann said.
So-called “autonomous networks,” or networks that can be managed and fixed with limited human oversight, is an area that’s quickly gaining traction in the industry, according to Nik Willetts, CEO of telco industry association TM Forum.
“Autonomous Networks is a movement we see moving from theory to reality incredibly quickly, thanks to advancements in AI combined with a new level of ambition and industry-wide action,” Willetts said.
This tech “can unlock a step-change in operating and capital efficiency, improving EBITDA and free cashflows, as well as unlocking new revenue opportunities and much-needed improvements in customer experience,” he added.
Jeetu Patel, chief product officer of IT networking giant Cisco, said he sees telcos playing a vital role as AI drives up demand for network traffic and bandwidth.
“The reality is this: the network bandwidth appetite is going to increase exponentially with AI,” Patel told CNBC. “Today, 100% of our workforce is human. Tomorrow, you will have that being augmented by AI agents, robots, humanoids, a lot of edge devices.”
“These agents are going to be more chatty and they’re going to require more network traffic and bandwidth,” he added. “I think service providers have a significant role to play. In my mind, the opportunity is not gone for them.”
A Google corporate logo hangs above the entrance to their office at St. John’s Terminal on March 11, 2025, in New York City.
Gary Hershorn | Corbis News | Getty Images
Google on Tuesday announced health-care updates to Search, including a way for people with specific health conditions to compare their experiences with others.
The company unveiled a new feature called “What People Suggest,” which uses AI to pull together online commentary from patients with similar diagnoses. A patient with arthritis would be able to look up how other people with the condition approach exercise, for instance. The feature is available on mobile devices in the U.S., Google said.
Google said it has also expanded its knowledge panels, or the information boxes that appear to the right of search results, to cover “thousands” more health topics. The panels are coming to new countries and languages, including Spanish, Japanese and Portuguese, starting on mobile devices.
The tech giant has launched several health-care projects and features over the years, but it has struggled to outline a consistent business strategy within the sector. The company built out a formal Google Health unit starting around 2018, which swelled to more than 500 employees, but it was dissolved in 2021.
Karen DeSalvo, Google’s chief health officer, told CNBC months later that the company was “still all-in on health.”
Google introduced artificial intelligence summaries called AI Overviews last year, and the feature shows a quick summary of answers to search questions at the very top of Search. The rollout was rocky, as users were quick to share examples AI tool giving incorrect and controversial responses, like encouraging users to add glue to pizza.
AI Overviews appear for some health-related queries, like “How do I know if I have the flu?” But some experts have encouraged users to use caution with these answers, according to a December report from The Senior List. Out of more than 200 health searches, a panel of medical experts said 70% Google’s AI Overviews were considered risky.
Google said Tuesday that recent health-focused advancements with its Gemini models have allowed the company to improve AI Overviews for health topics.
In late 2023, Google announced MedLM, a suite of AI models designed specifically for health-care, to help clinicians and researchers carry out complex studies, summarize doctor-patient interactions and complete other tasks.
The company also unveiled Vertex AI Search for Healthcare that year, which is a generative AI tool that clinicians can use to search for information across disparate medical records.
Watch: Google to acquire cloud security startup Wiz for $32 billion.
The Wiz website on a smartphone arranged in New York, US, on Tuesday, July 16, 2024.
Gabby Jones | Bloomberg | Getty Images
Google on Tuesday signed a “definitive agreement” to acquire Wiz, a New York-based cloud security startup, for $32 billion in an all-cash deal.
The deal, which will be Google’s largest-ever acquisition, will improve its cloud security offering in a world of advancing artificial intelligence and cybersecurity threats. Wiz will become a part of the company’s cloud business. Google said it expects to close the deal in 2026.
“Google Cloud is a leader in cloud infrastructure, with deep AI expertise and a track record of industry-leading security innovation,” Google said in a release. “Bringing all this to Wiz will help make their solutions even better and more scalable, benefiting customers and partners across all major clouds.”
The acquisition comes after CNBC reported in July that Wiz had walked away from a potential $23 billion acquisition by Google and announced to employees that it would pursue an initial public offering instead.
“Saying no to such humbling offers is tough,” Wiz co-founder Assaf Rappaport wrote to employees in a July memo obtained by CNBC. At the time, a source familiar with the matter told CNBC that Wiz walked away from the deal in part due to antitrust and investor concerns.
Before talks with Google were reported, Wiz had set its sights on two goals: an IPO and $1 billion in annual recurring revenue. In the memo at the time, Rappaport wrote that the company would pursue those milestones.
Wiz was founded in 2020 and has grown rapidly under Rappaport, with the company hitting $100 million in annual recurring revenue after just 18 months. The company’s cloud security products include prevention, active detection and response, a portfolio that’s appealed to large firms and would have helped Google compete with Microsoft, which also sells security software.
“Becoming part of Google Cloud is effectively strapping a rocket to our backs: it will accelerate our rate of innovation faster than what we could achieve as a standalone company,” Rappaport said in a blog post Tuesday.
Google has a long history in dealmaking and snatching up smaller companies to broaden its offerings to customers. Its largest deal before Wiz was the $12.5 billion acquisition of hardware marker Motorola in 2012. Two years later, the company sold some assets to Lenovo for $2.9 billion. Google has also made cybersecurity acquisitions in the past, paying $5.4 billion for Mandiant in 2022.
Wiz’s products will still work on competitor platforms including Amazon Web Services, Microsoft Azure and Oracle Cloud, the companies said. The Wall Street Journal first reported Monday that the companies were in advanced discussions.
While the agreement may still draw government scrutiny, many on Wall Street have been hopeful that President Donald Trump’s new White House administration will be more amenable to tech industry deals. Alphabet is currently battling an antitrust suit over its online search dominance.
— CNBC’s Jennifer Elias, Jordan Novet and Rohan Goswami contributed to this report.
Chinese tech giant Baidu has released two new free-to-use artificial intelligence models as it vies to regain its leading position in the country’s fiercely competitive AI space.
The Baidu models launched Sunday included the company’s first reasoning-focused model, and come ahead of plans to move toward an open-source strategy.
However, experts told CNBC that while the release of the models is a positive development for Baidu, they also highlight how it is playing catch up as its Ernie bot — one of China’s earliest versions of a ChatGPT-like chatbot — struggles to gain widespread adoption.
“The new models make Baidu more competitive since the company has been lagging behind in a reasoning model release,” Lian Jye Su, chief analyst at Omdia, told CNBC.
A reasoning model is a large language model that breaks down tasks into smaller pieces and considers multiple approaches before generating a response. It is designed to process complex problems in a similar way to humans.
Chinese startup DeepSeek upended the global AI race and transformed China’s ecosystem in January when it released its R1 reasoning model, which rivaled American competitors despite costing a fraction of the price.
Baidu has said its new ERNIE X1 reasoning model “delivers performance on par with DeepSeek R1 at only half the price,” and has “stronger understanding, planning, reflection, and evolution capabilities.” CNBC has not been able to independently verify this claim.
According to Wei Sun, principal analyst of artificial intelligence at Counterpoint Research, Baidu’s future competitiveness could hinge on whether its new models deliver on the promised performance and cost advantages.
“Baidu is clearly in catch-up mode, largely due to its slow innovation pace and underestimating rapid shifts in market dynamics,” Sun said.
What happened?
Baidu rolled out its first generative AI platform to the public in 2023, giving China one of its first answers to OpenAI’s popular AI chatbot ChatGPT.
Experts list a number of reasons for Baidu’s struggles and slow rate of innovation.
“Baidu fell behind when they tried to build proprietary models and compete for funding for AI,” Ray Wang, principal analyst and founder of Constellation Research, told CNBC. He added that the company has also suffered from recent government crackdowns and was distracted by “regulatory nonsense.”
CFOTO | Future Publishing | Getty Images
Proprietary models keep their source code and underlying architecture confidential, in contrast to models from the likes of DeepSeek, whose source code is made freely available on the open web for possible modification and redistribution.
“Using a closed-source approach means that [Baidu] was training its model from scratch whereas the open-source models were able to leverage certain parts that were communal to developers,” said Kai Wang, a senior equity analyst for Morningstar.
Baidu, however, said last month that it would make its next-generation AI model Ernie open-source from June 30, according to Reuters.
“Baidu has always been very supportive of its proprietary business model and was vocal against open source, but disruptors like DeepSeek have proven that open source models can be as competitive,” said Omdia’s Su.
He added that Baidu is “merely following the footstep” of its biggest competitors in China, namely Alibaba, DeepSeek, and Tencent, which have all now released open-source models.
Baidu’s advantages
According to Morningstar’s Wang, AI players like Baidu are coming up with new models every month or so, with competitors constantly trying to outperform each advancement.
However, “the differentiator in the Chinese models remains the data used for the models, and the application use-case,” Wang said.
In these areas, experts see some key advantages for Baidu, which operates a wide range of popular applications and services, including its flagship search engine, which offers access to AI tools, as well as its online forum app, Baidu Tieba.
“Due to its large user base in the consumer space, particularly in AI search and recommendation systems, the company can still maintain its market leadership position as long as it keeps up with the innovation cycle,” said Omdia’s Su.
During an earnings call late last year, Baidu CEO Robin Li said he expects generative AI to turn Baidu search into the “new killer app in the age of AI.”
“The secret to AI is data, chips, good math, and cheap energy … You have to have data to play. They have the data,” said Constellation Research’s Wang.
Correction: This article has been updated to state that Baidu’s new AI models are free to use.