Connect with us

Tech

Big Tech earnings face more heat as cloud cover fades

Published

on

Big Tech earnings face more heat as cloud cover fades

Big Tech results reinforced concerns a boom in cloud services is easing, limiting a lucrative source of profit when a slowing economy has hit the companies’ other businesses and prompting a bet on artificial intelligence as the next growth driver.

Earnings from Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) – which together dominate the cloud market – showed growth in the business was at its lowest since they started breaking out the metric in 2015 and was on track to slow further.

Alphabet Inc (GOOGL.O), which has the smallest cloud business among the three, said Google Cloud grew 32%, the slowest rise since the company began reporting the measure in 2019.

The poor results reflect a shift to post-pandemic frugality by corporate customers whose budgets have been squeezed in the past year by high inflation and rising interest rates.

Advertisement

“Once thought as the most defensive revenue stream in tech, we are seeing investors questioning the cyclicality for the (cloud) business,” analysts at Bernstein said.

Cloud services had long been a reliable source of earnings for Microsoft and Amazon.

The Windows maker posted growth of around 50% in its Azure cloud-computing business for each quarter of calendar 2020 when the pandemic forced people to work and study at home. Meanwhile, market leader Amazon Web Services (AWS) reported a sales jump of about 30% during the same period.

Times, though, have changed.

Growth at AWS slowed to a record low of 20% in the last three months of 2022 to $21.4 billion, slightly missing analysts’ estimates of $22.03 billion, according to Refinitiv data.

Advertisement

Microsoft’s revenue in its so-called intelligent cloud business that includes Azure rose 18% to beat expectations for October to December. But its current-quarter forecast of $21.7 billion to $22 billion was below estimates of $22.14 billion.

“The deceleration in AWS was even worse than expected and means Amazon can’t rely on that business units’ operating profits as much in coming quarters,” said Andrew Lipsman, principal analyst at Insider Intelligence.

Amazon finance chief Brian Olsavsky said on Thursday that the company expects slower cloud growth rates for the next few quarters. That echoed Microsoft, which said last week that growth in its Azure cloud-computing business would slow by 4-5 basis points in the March quarter.

“You’ve just come off two years of rapid movement of workloads to the cloud, there’s probably a lot of inefficiencies in cloud spending and now there is a shifting focus to greater efficiency,” said James Cordwell, an analyst at Atlantic Equities.

AI SILVER LINING

Advertisement

A potential boom in AI after the viral success of OpenAI’s ChatGPT could boost demand for cloud services again though, analysts said. AI applications require massive computing power, a boon for companies whose services help run the technology.

As an investor and partner of OpenAI, Microsoft looks well poised, analysts said, but any gains may take time to translate into profits.

“Those (AI) advancements and demand for related cloud services will take time to materialize. They’re not likely to offset current headwinds in the enterprise market over the next few quarters,” Lipsman said.

Advertisement

Tech

Amazon’s AWS appeals to corporate customers with new chatbot, AI safety measures

Amazon’s AWS appeals to corporate customers with new chatbot, AI safety measures

Published

on

By

Amazon's AWS appeals to corporate customers with new chatbot, AI safety measures

Amazon (AMZN.O) is trying to lure big corporate customers to it AWS cloud computing service with a new chatbot for businesses, and by offering to guard them against legal and reputational damage that can come from the output of artificial intelligence.

The new chatbot, called Q, is designed to help with productivity by helping workers summarize important documents and support tickets and chat via communication apps such as Slack, the company announced at its annual cloud computing conference Tuesday in Las Vegas. The software can also automatically make changes to businesses source code, speeding development, the company said.

The new software arrives roughly a year after OpenAI’s ChatGPT burst onto the scene, setting off a frenzy of investment in generative AI startups. Alphabet (GOOGL.O) and others have announced their own chatbots, which can have human-like conversations with users to help with daily tasks.

AWS CEO Adam Selipsky, at Amazon’s annual cloud computing conference in Las Vegas, announced a new safeguard against objectionable content on generative AI applications, called Guardrails for Bedrock. The service allows users to filter out harmful content, he said.

Advertisement

Because generative AI is trained on publicly available content, offensive words or other objectionable content can slip through into results from users’ prompts. That is particularly problematic for younger users, in times of global conflict or during elections when generative AI’s output in search results can influence opinion.

Safety advocates have cautioned that generative AI could operate out of the control of its human creators and pump out increasingly dangerous content or operate entire systems without oversight. In particular, they worry about the software putting influential – and convincing – content on social media sites like X and Facebook (META.O).

Selipsky said the new service was important for customers to put limits they see fit on the generative AI they use.

“For example, a bank could configure an online assistant to refrain from providing investment advice,” said Selipsky. “Or, to prevent inappropriate content, an e-commerce site could ensure that its online assistant doesn’t use hate speech or insults.”

As part of its appeal to corporations, Amazon said the Q chatbot will offer businesses limits so that it can keep sensitive data from employees who should not have access to it. Pricing will start at $20 per user, per year.

Advertisement

Also at the conference, Amazon announced it would indemnify its customers against lawsuits based on the misuse of copyrighted materials. Stock photography company Getty Images, for instance, sued Stability AI earlier this year, alleging it scraped its website for images without permission.

Guardrails for Bedrock is in limited preview today, Amazon said. The Seattle company did not provide additional details about its indemnification policy. 

Continue Reading

Tech

TikTok obtaining Indonesia e-commerce permit

TikTok obtaining Indonesia e-commerce permit

Published

on

By

TikTok obtaining Indonesia e-commerce permit

Short video app TikTok is in the process of obtaining an e-commerce permit from Indonesia’s government, state news agency Antara reported, citing the deputy trade minister.

In September, Indonesia banned e-commerce transactions on social media, a major blow for TikTok, which had pledged to invest billions of dollars in Southeast Asia, including Indonesia, the region’s biggest economy.

“Before, they (TikTok) were not compliant, they didn’t have the permit. Now they are taking care of it,” deputy trade minister Jerry Sambuaga was quoted saying by Antara on Tuesday.

He said a partnership with a local firm could be done providing it was in accordance with regulations.

Advertisement

TikTok, owned by China’s ByteDance, has 125 million active monthly users in Indonesia, a country of more than 270 million people. It has been looking to translate the large user base into a major e-commerce revenue source.

TikTok did not immediately respond to request for comment regarding the deputy minister’s remarks.

Reuters reported earlier this month that TikTok was in talks on possible partnerships with several Indonesian e-commerce companies, including GoTo’s e-commerce unit (GOTO.JK) Tokopedia, Bukalapak.com (BUKA.JK) and Blibli (BELI.JK). 

Advertisement
Continue Reading

Tech

Japan space agency hit with cyberattack, rocket and satellite info not accessed

Japan space agency hit with cyberattack, rocket and satellite info not accessed

Published

on

By

Japan space agency hit with cyberattack, rocket and satellite info not accessed

Japan’s space agency was hit with a cyberattack but the information the hackers accessed did not include anything important for rocket and satellite operations, a spokesperson said on Wednesday.

“There was a possibility of unauthorised access by exploiting the vulnerability of network equipment,” the spokesperson at Japan Aerospace Exploration Agency (JAXA) said, declining to elaborate on details such as when the attack took place.

The space agency learned of the possibility of the unauthorised access after receiving information from an external organisation and conducting an internal investigation, the spokesperson said, declining to identify the organisation’s name.

The investigation is ongoing, the spokesperson said.

Advertisement

Japanese media reported Wednesday that the cyberattack occurred during the summer and the police became aware of the attack and notified JAXA this autumn. The Yomiuri newspaper first reported the incident. 

Continue Reading

Trending

Copyright © GLOBAL TIMES PAKISTAN