Connect with us

Published

on

David Silver, leader of the reinforcement learning research group at DeepMind, being awarded an honorary “ninth dan” professional ranking for AlphaGo.
JUNG YEON-JE | AFP | Getty Images

Computer scientists are questioning whether DeepMind, the Alphabet-owned U.K. firm that’s widely regarded as one of the world’s premier AI labs, will ever be able to make machines with the kind of “general” intelligence seen in humans and animals.

In its quest for artificial general intelligence, which is sometimes called human-level AI, DeepMind is focusing a chunk of its efforts on an approach called “reinforcement learning.”

This involves programming an AI to take certain actions in order to maximize its chance of earning a reward in a certain situation. In other words, the algorithm “learns” to complete a task by seeking out these preprogrammed rewards. The technique has been successfully used to train AI models how to play (and excel at) games like Go and chess. But they remain relatively dumb, or “narrow.” DeepMind’s famous AlphaGo AI can’t draw a stickman or tell the difference between a cat and a rabbit, for example, while a seven-year-old can.

Despite this, DeepMind, which was acquired by Google in 2014 for around $600 million, believes that AI systems underpinned by reinforcement learning could theoretically grow and learn so much that they break the theoretical barrier to AGI without any new technological developments.

Researchers at the company, which has grown to around 1,000 people under Alphabet’s ownership, argued in a paper submitted to the peer-reviewed Artificial Intelligence journal last month that “Reward is enough” to reach general AI. The paper was first reported by VentureBeat last week.

In the paper, the researchers claim that if you keep “rewarding” an algorithm each time it does something you want it to, which is the essence of reinforcement learning, then it will eventually start to show signs of general intelligence.

“Reward is enough to drive behavior that exhibits abilities studied in natural and artificial intelligence, including knowledge, learning, perception, social intelligence, language, generalization and imitation,” the authors write.

“We suggest that agents that learn through trial and error experience to maximize reward could learn behavior that exhibits most if not all of these abilities, and therefore that powerful reinforcement learning agents could constitute a solution to artificial general intelligence.”

Not everyone is convinced, however.

Samim Winiger, an AI researcher in Berlin, told CNBC that DeepMind’s “reward is enough” view is a “somewhat fringe philosophical position, misleadingly presented as hard science.”

He said the path to general AI is complex and that the scientific community is aware that there are countless challenges and known unknowns that “rightfully instill a sense of humility” in most researchers in the field and prevent them from making “grandiose, totalitarian statements” such as “RL is the final answer, all you need is reward.”

DeepMind told CNBC that while reinforcement learning has been behind some of its most well-known research breakthroughs, the AI technique accounts for only a fraction of the overall research it carries out. The company said it thinks it’s important to understand things at a more fundamental level, which is why it pursues other areas such as “symbolic AI” and “population-based training.”

“In somewhat typical DeepMind fashion, they chose to make bold statements that grabs attention at all costs, over a more nuanced approach,” said Winiger. “This is more akin to politics than science.”

Stephen Merity, an independent AI researcher, told CNBC that there’s “a difference between theory and practice.” He also noted that “a stack of dynamite is likely enough to get one to the moon, but it’s not really practical.”

Ultimately, there’s no proof either way to say whether reinforcement learning will ever lead to AGI.

Rodolfo Rosini, a tech investor and entrepreneur with a focus on AI, told CNBC: “The truth is nobody knows and that DeepMind’s main product continues to be PR and not technical innovation or products.”

Entrepreneur William Tunstall-Pedoe, who sold his Siri-like app Evi to Amazon, told CNBC that even if the researchers are correct “that doesn’t mean we will get there soon, nor does it mean that there isn’t a better, faster way to get there.”

DeepMind’s “Reward is enough” paper was co-authored by DeepMind heavyweights Richard Sutton and David Silver, who met DeepMind CEO Demis Hassabis at the University of Cambridge in the 1990s.

“The key problem with the thesis put forth by ‘Reward is enough’ is not that it is wrong, but rather that it cannot be wrong, and thus fails to satisfy Karl Popper’s famous criterion that all scientific hypotheses be falsifiable,” said a senior AI researcher at a large U.S. tech firm, who wished to remain anonymous due to the sensitive nature of the discussion.

“Because Silver et al. are speaking in generalities, and the notion of reward is suitably underspecified, you can always either cherry pick cases where the hypothesis is satisfied, or the notion of reward can be shifted such that it is satisfied,” the source added.

“As such, the unfortunate verdict here is not that these prominent members of our research community have erred in any way, but rather that what is written is trivial. What is learned from this paper, in the end? In the absence of practical, actionable consequences from recognizing the unalienable truth of this hypothesis, was this paper enough?”

What is AGI?

While AGI is often referred to as the holy grail of the AI community, there’s no consensus on what AGI actually is. One definition is it’s the ability of an intelligent agent to understand or learn any intellectual task that a human being can.

But not everyone agrees with that and some question whether AGI will ever exist. Others are terrified about its potential impacts and whether AGI would build its own, even more powerful, forms of AI, or so-called superintelligences.

Ian Hogarth, an entrepreneur turned angel investor, told CNBC that he hopes reinforcement learning isn’t enough to reach AGI. “The more that existing techniques can scale up to reach AGI, the less time we have to prepare AI safety efforts and the lower the chance that things go well for our species,” he said.

Winiger argues that we’re no closer to AGI today than we were several decades ago. “The only thing that has fundamentally changed since the 1950/60s, is that science-fiction is now a valid tool for giant corporations to confuse and mislead the public, journalists and shareholders,” he said.

Fueled with hundreds of millions of dollars from Alphabet every year, DeepMind is competing with the likes of Facebook and OpenAI to hire the brightest people in the field as it looks to develop AGI. “This invention could help society find answers to some of the world’s most pressing and fundamental scientific challenges,” DeepMind writes on its website.

DeepMind COO Lila Ibrahim said on Monday that trying to “figure out how to operationalize the vision” has been the biggest challenge since she joined the company in April 2018.

Continue Reading

Technology

S&P 500 win streak, Berkshire’s leadership changes, Netflix’s regulatory path and more in Morning Squawk

Published

on

By

S&P 500 win streak, Berkshire's leadership changes, Netflix's regulatory path and more in Morning Squawk

A Wall Street sign is viewed in front of the New York Stock Exchange.

Eduardo Munoz | AFP | Getty Images

This is CNBC’s Morning Squawk newsletter. Subscribe here to receive future editions in your inbox.

Here are five key things investors need to know to start the trading day:

1. Secret Santa

The three major indexes are coming off back-to-back winning weeks, with the S&P 500 on Friday rising closer to records it set earlier this year. Stocks’ advances came as investors geared up for the last Federal Reserve policy meeting of the year, which is set to kick off tomorrow.

Here’s what to know:

  • The delayed release of September’s personal consumption expenditures price index showed core PCE — a key inflation measure — was lighter than economists anticipated on a 12-month basis.
  • The report gave stocks a boost on Friday, as traders bet the data would encourage Fed officials to cut interest rates this week.
  • The Fed is set to announce its decision on Wednesday. Traders are pricing in about a 90% likelihood that the central bank cuts interest rates again, according to CME’s FedWatch tool.
  • Meanwhile, Treasury Secretary Scott Bessent said Sunday that he expects the U.S. economy to finish the year with 3% real GDP growth, even after the hit from the federal government shutdown.
  • Following its four-day win streak last week, the S&P 500 is now roughly 0.7% away from its intraday record and about a quarter-percent off its closing high.
  • Follow live markets updates here.

2. Changing of the guard

Todd Combs, portfolio manager at Berkshire Hathaway Inc., waits for the start of the “Berkshire Hathaway Invest In Yourself 5K” race presented by Brooks Sports, a Berkshire Hathaway Inc. company, on the sidelines of the Berkshire Hathaway shareholders meeting in Omaha, Nebraska, U.S., on Sunday, May 4, 2014.

Daniel Acker / Bloomberg / Getty Images

Berkshire Hathaway announced this morning that Todd Combs, investment officer and Geico CEO, will leave the conglomerate to join JPMorgan Chase as head of its new Security and Resiliency Initiative.

Berkshire CEO Warren Buffett, who will step down as CEO at the end of the year, said in a press release that Combs “made many great hires” for Geico and “broadened its horizons.”

Nancy Pierce, operations chief at Geico, will replace Combs as the business’ CEO. Berkshire also announced that its CFO Marc Hamburg will retire in June 2027 and be replaced by Charles Chang, current CFO of Berkshire Hathaway Energy.

3. L.A. confidential

Dado Ruvic | Reuters

Both Wall Street and Hollywood were left reeling after the announcement of the NetflixWarner Bros. deal on Friday. Now, the question is if the agreement can get over regulatory hurdles.

President Donald Trump’s administration views the deal with “heavy skepticism,” a senior administration official told CNBC’s Eamon Javers on Friday. Sen. Elizabeth Warren, D-Mass., has already asked for an antitrust review, calling the deal an “anti-monopoly nightmare.”

Believing it has a better chance of securing regulatory approval, Paramount Skydance is weighing whether to bring a bid straight to WBD shareholders in a last-ditch effort to beat Netflix, sources told CNBC’s Alex Sherman. Meanwhile, movie theater operators are wondering whether they can survive if the Netflix deal makes the world’s largest streaming service the owner of a major film studio.

4. Google’s answer

Silas Stein | Picture Alliance | Getty Images

After losing its search antitrust case last year, Alphabet on Friday got more details about the consequences it will face.

U.S. District Judge Amit Mehta said Google can’t enter into an agreement like it has with Apple, which it pays for search browser usage, unless the deal has termination date of a year or less. Mehta also listed requirements for the makeup of a committee that will decide who Google has to share its data with.

But as CNBC’s Jennifer Elias notes, these weren’t the most drastic punishments on the table. Mehta in September ruled against harsher penalties proposed by the Department of Justice, which could have included the forced sale of Google’s Chrome browser.

Get Morning Squawk directly in your inbox

5. Unfading endurance

How often should jeans really be washed?

Catherine Mcqueen | Moment | Getty Images

The global denim market is now a more than $100 billion industry, driven by major retailers such as Levi Strauss and American Eagle. But as CNBC’s Gabrielle Fonrouge reports, its origins are far more humble.

Blue jeans were born out of a woman’s frustration with the frequent rips in her gold miner husband’s denim pants. Her tailor’s solution — adding copper rivets to the garment’s key points of strain — signified the birth of what we know today as the blue jean. In the approximately century and a half since, the pant has become a staple of American fashion that transcends income class and trend cycles.

The Daily Dividend

Here’s what we’re keeping an eye on this week:

CNBC Pro subscribers can see a calendar and rundown for the week here.

CNBC’s Sean Conlon, Ryan Ermey, Alex Sherman, Lillian Rizzo, Dan Mangan, Sarah Whitten, John Melloy, Jennifer Elias and Gabrielle Fonrouge contributed to this report. Josephine Rozzelle edited this edition.

Continue Reading

Technology

Confluent stock soars 29% as IBM announces $11 billion acquisition deal

Published

on

By

Confluent stock soars 29% as IBM announces  billion acquisition deal

IBM CEO Arvind Krishna speaks at the SXSW conference in Austin, Texas, on March 11, 2025.

Andy Wenstrand | Sxsw Conference & Festivals | Getty Images

IBM announced Monday that it is acquiring data streaming platform Confluent in a deal worth $11 billion.

Shares of Confluent soared 29%. IBM stock climbed about 1%.

IBM will pay $31 per share in cash for all of the issued and outstanding common shares of Confluent, according to a release. The transaction is expected to close by the middle of 2026. Shares of Confluent closed at $23.14 on Friday.

Tune in at 10:10 a.m. ET as IBM CEO Arvind Krishna joins CNBC TV to discuss the deal. Watch in real time on CNBC+ or the CNBC Pro stream.

“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI,” IBM CEO Arvind Krishna said in a release.

IBM said the deal will bolster its artificial intelligence offerings as it expects global data growth to more than double by 2028.

Read more CNBC tech news

Wedbush called it a “strong move” from IBM that adds more data processing capabilities to its hybrid cloud ecosystem and is a natural fit to help eliminate data silos for powering AI.

“We loudly applaud this deal as Arvind takes IBM further into the AI Revolution with more acquisitions likely ahead,” the analysts said in a note.

Wedbush maintained its overweight rating on IBM and $325 price target. IBM closed at $307.94 on Friday.

The addition of Confluent fits with IBM’s deal last year to land cloud software maker HashiCorp for $6.4 billion and the 2023 move to acquire Apptio in a deal worth $4.6 billion. Both of those acquisitions were all-cash deals.

Confluent has more than 6,500 clients across major industries and works with Anthropic, Amazon‘s AWS, Google Cloud Platform, Microsoft, Snowflake and others.

Stock Chart IconStock chart icon

hide content

Confluent one-day stock chart.

Continue Reading

Technology

BlackRock bets on ‘pick and shovel’ trade, singling out clear winners in AI spending spree

Published

on

By

BlackRock bets on ‘pick and shovel’ trade, singling out clear winners in AI spending spree

Ben Powell, chief strategist for Middle East and Asia Pacific at BlackRock Investment Institute, during a Bloomberg Television interview at the Abu Dhabi Finance Week (ADFW) conference in Abu Dhabi, AD, United Arab Emirates, on Monday, Dec. 9, 2024.

Bloomberg | Getty Images

The wave of capital pouring into artificial intelligence infrastructure is far from peaking, said Ben Powell, chief investment strategist for APAC at BlackRock, arguing the sector’s “picks and shovels” suppliers — from chipmakers to energy producers and copper-wire manufacturers — remain the clearest winners as hyperscalers race to outspend one another.

The surge in AI-related capital expenditure shows no sign of slowing as tech giants push aggressively to secure an edge in what they see as a winner-takes-all contest, Powell told CNBC Monday on the sidelines of the Abu Dhabi Finance Week.

“The capex deluge continues. The money is very, very clear,” he said, adding that BlackRock is focused on what he called a “traditional picks and shovels capex super boom, which still feels like it’s got more to go.”

AI infrastructure has been one of the biggest drivers of global investment this year, fueling a broader market rally, even as some investors question how long the boom can last.

Nvidia, whose GPU chips are the backbone of the AI revolution, became the first company to briefly surpass $5 trillion in market capitalization amid a dizzying AI-fueled market rally that sparked talk of an AI bubble.

Microsoft and OpenAI also reached a restructuring deal in October to support the ChatGPT developer’s fundraising efforts. OpenAI has reportedly been preparing for an initial public offering that could value the company at $1 trillion, according to Reuters.

The build-out has set off long-term procurement efforts across the tech sector, from chip supply agreements to power commitments. Grid operators from the U.S. to the Middle East are racing to meet soaring electricity demand from new data centers. Companies, including Amazon and Meta, have budgeted tens of billions of dollars annually for AI-related investments.

S&P Global estimates data-center power demand could nearly double by 2030, mostly driven by hyperscale, enterprise and leased facilities, along with crypto-mining sites.

‘Dipping toes into credit market’

Powell also noted that leading tech firms have only begun to tap capital markets to fund the next phase of AI expansion, suggesting additional capital is on the way.

“The big companies have only just started dipping their toes into the credit markets… feels like there’s a lot more they can do there,” he said.

The “hyperscalers” are behaving as if coming second would effectively leave them out of the market, Powell said. That mindset, he added, has pushed firms to accelerate spending even at the risk of overshooting.

Much of that capital, Powell noted, is likely to flow to the companies powering the AI build-out rather than model developers, reinforcing a growing view among global investors that the most durable gains from the AI boom may lie in the hardware, energy and infrastructure ecosystems behind the technology.

“If we’re the recipients of that cash flow, I guess that’s a pretty good place to be, whether you’re making chips, whether you’re making energy all the way down to the copper wiring,” Powell noted, expecting “positive surprises driving those stocks in the year ahead.”

Continue Reading

Trending