Tech
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Rani Molla

Apple’s AI phone utterly failed to drive sales

Apple’s iPhone revenue declined nearly 1% to $69.1 billion in its all-important holiday quarter, compared to the same period one year prior. Analysts had expected a 1.4% increase. It’s disappointing not only because the December quarter is Apple’s biggest, but also because it represents the first full quarter of sales for Apple’s new iPhone 16.

Shares are down about 2% in after-hours trading.

Apparently Apple’s AI phone wasn’t enough to drive a much-needed upgrade cycle. With the iPhone 16, the consumer electronics giant reimagined its signature product with artificial intelligence at its base.

“AI will reinvent and provide a new era and a new chapter for iPhone and iPad and the Mac and all of our products over time,” CEO Tim Cook said in an interview with Wired in December. “Because I think it changes the way you interface with the product.”

But Apple Intelligence is not very intelligent so far (some experiments have shown that Siri has gotten even less helpful with its advent) and perhaps consequently hasn’t caused people to buy the iPhone, which represents about half of Apple’s revenue. Apple also hasn’t spent as much as other tech companies on AI capex and outsourced a lot of that to leaders in the space, like OpenAI’s ChatGPT.

On the bright side, not really being considered an AI company after all has proved to be an asset amid this week’s AI tech rout, and Apple is again the world’s most valuable company. This hasn’t, however, protected the stock from a flurry of recent downgrades.

“Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4% from a year ago,” Cook told investors today, numbers which were roughly in line with analyst expectations. That good news, however, was thanks to its Services division and not the iPhone.

Revenue in China, a very important market for Apple, was lower than Wall Street expected, down 11% to $18.5 billion.

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tech
Rani Molla

Amazon to lay off thousands more office workers on path to 30,000 cuts

Amazon plans to axe thousands of corporate workers next week, after laying off 14,000 back in October, according to Reuters. The new cuts could be “roughly the same” number as last time and may hit Amazon Web Services, retail, Prime Video, and human resources, the report said, citing people familiar with the matter.

The company plans to cut a total of 30,000 corporate positions as part of an effort to “streamline operations and reset its culture,” Business Insider reported separately, noting comments from CEO Andy Jassy, who said the earlier layoffs were “about culture” rather than AI-related cost cutting.

Exclusive: Amazon plans thousands more corporate job cuts next week, sources say

Exclusive: Amazon plans thousands more corporate job cuts next week, sources say

The company plans to cut a total of 30,000 corporate positions as part of an effort to “streamline operations and reset its culture,” Business Insider reported separately, noting comments from CEO Andy Jassy, who said the earlier layoffs were “about culture” rather than AI-related cost cutting.

Little Bay Beach

There are now more than 1 million “.ai” websites, contributing an estimated $70 million to Anguilla’s government revenue last year

Data from Domain Name Stat reveals that the top-level domain originally assigned to the British Overseas Territory of Anguilla passed the milestone in early January.

David Crowther, Claire Yubin Oh59m
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Claire Yubin Oh

TikTok closes deal to operate in the US

TikTok has finally sealed its deal to establish a majority American-owned joint venture to manage its US operations.

On Friday, the social media company announced that its US arm will now be led by three “managing investors” — Silver Lake, Oracle, and MGX, each with a 15% holding — while ByteDance retains 19.9% of the business, and a swath of other investors, including Michael Dell’s family office, round out the cap table.

The joint venture will be operated by a seven-person majority American board of directors, which includes TikTok CEO Shou Chew, with Adam Presser, previously TikTok’s head of operations, trust, and safety, as its CEO.

Though the valuation of the new venture has not been shared, Vice President JD Vance has previously cited the market value of TikTok’s US operations at about $14 billion, just topping Snap and lower than Pinterest.

The deal closes the platform’s battle, which kicked off in earnest in August 2020 when President Donald Trump first tried to ban TikTok over national security concerns. The announcement notes that the new TikTok USDS Joint Venture LLC will “secure U.S. user data, apps and the algorithm.” Trump celebrated the deal, which has been signed off by both the US and Chinese governments, per Reuters, in a Truth Social post, saying TikTok “will now be owned by a group of Great American Patriots and Investors, the Biggest in the World.”

tech
Rani Molla

Elon Musk says Tesla Robotaxis are operating without drivers, sending stock higher

Tesla CEO Elon Musk said that Tesla’s Robotaxis are now operating in Austin without a safety monitor. Tesla has been testing driverless cars in the area for about a month, and Musk had previously said the company would remove safety drivers by the end of 2025.

It’s unclear how many exactly of the roughly 50 Robotaxis the company operates in the area don’t have drivers. Tesla is “starting with a few unsupervised vehicles mixed in with the broader robotaxi fleet with safety monitors, and the ratio will increase over time,” Ashok Elluswamy, Tesla’s head of AI, posted shortly after Musk. Ethan McKenna, the person behind Robotaxi Tracker, estimates it’s two or three vehicles.

What is clear is that the move is good for Tesla’s stock, which is currently up 3.5%, extending its gains after Musk’s tweet. Morgan Stanley said yesterday that it considers the removal of safety drivers a “precursor to personal unsupervised FSD rollout.” Unsupervised Full Self-Driving is widely considered to be integral to the would-be autonomous company’s value proposition.

At the World Economic Forum earlier on Thursday, Musk said, “Self-driving cars is essentially a solved problem at this point.”

tech
Jon Keegan

Survey: CEOs and workers have wildly different thoughts on AI productivity gains

One of the main reasons companies are rushing to adopt AI is to give their workers the miraculous productivity boost that AI companies have been promising — and believe will quickly earn back their investment.

But now that companies have been using AI for a while, a growing perception gap is emerging between the C-suite and their employees.

The Wall Street Journal reported on new findings by research firm Section, which surveyed 5,000 white-collar workers from companies with more than 1,000 employees.

More than 70% of the corporate executives in the survey said they were “excited” by AI, and 19% of them said the tools have saved them more than 12 hours of work per week.

But nonmanagement workers had a very different take on AI. Almost 70% of this group said AI made them feel “anxious or overwhelmed,” and 40% said the tools saved them no time at all.

CEOs Say AI Is Making Work More Efficient. Employees Tell a Different Story.

CEOs Say AI Is Making Work More Efficient. Employees Tell a Different Story.

The Wall Street Journal reported on new findings by research firm Section, which surveyed 5,000 white-collar workers from companies with more than 1,000 employees.

More than 70% of the corporate executives in the survey said they were “excited” by AI, and 19% of them said the tools have saved them more than 12 hours of work per week.

But nonmanagement workers had a very different take on AI. Almost 70% of this group said AI made them feel “anxious or overwhelmed,” and 40% said the tools saved them no time at all.

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