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Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

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Britain’s Competition and Markets Authority (CMA) is scrutinising Google-parent Alphabet’s partnership with artificial intelligence (AI) startup Anthropic to assess its impact on competition, the regulator announced on Tuesday. This investigation highlights growing global concerns among antitrust regulators about the increasing influence of major tech companies in the burgeoning AI sector.

Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

Image Source: cnbc.com

The partnership between Alphabet and Anthropic comes under the spotlight more than 18 months after Microsoft-backed OpenAI triggered an AI boom with the release of ChatGPT. The CMA’s probe aligns with similar inquiries into other significant deals between tech giants and smaller AI firms. Notable partnerships under review include Microsoft’s collaborations with OpenAI, Inflection AI, and Mistral AI, alongside Alphabet’s connections to companies like Anthropic and Cohere.

Global Coordination on AI Competition

The examination of Alphabet’s partnership with Anthropic is part of a broader initiative to ensure fair competition in the AI industry. Last week, the CMA, along with antitrust regulators from the United States and the European Union, issued a joint statement pledging to work together to maintain competitive markets in AI.

Anthropic, co-founded by former OpenAI executives Dario and Daniela Amodei, has been a significant player in the AI landscape with its Claude AI models competing against OpenAI’s GPT series. Last year, Anthropic announced securing $500 million from Alphabet, with a promise of an additional $1.5 billion in the future. The startup also utilizes Google Cloud services as part of its operations.

The CMA is currently seeking public and industry feedback on whether the Alphabet-Anthropic partnership could potentially lessen competition in the UK market. Interested parties have until August 13 to submit their comments. Based on this input, the CMA will decide whether to launch a formal investigation into the partnership.

Responses from Alphabet and Anthropic

In response to the CMA’s inquiry, a spokesperson for Anthropic expressed the company’s willingness to cooperate fully, emphasizing their independence. “We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others,” the spokesperson stated.

Also Read: PayPal Raises 2024 Profit Forecast Again Amid Strong Spending and Improved Margins

Similarly, Google reiterated its commitment to fostering an open and innovative AI ecosystem. “Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights,” a Google spokesperson said.

As antitrust regulators continue to scrutinize the alliances between major tech firms and AI startups, the outcome of the CMA’s investigation into Alphabet and Anthropic will be closely watched. The decision could set a precedent for how similar partnerships are regulated in the future, potentially reshaping the competitive dynamics of the AI industry.

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

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Google’s parent company, Alphabet Inc., is actively negotiating the acquisition of cybersecurity startup Wiz Inc., potentially marking its largest acquisition yet in the tech industry. Sources familiar with the matter have indicated that the deal could reach up to $23 billion, although discussions remain ongoing and may not result in a final agreement.

Strategic Move Amid Increasing Competition

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

Image Source: gadinsider.com

Alphabet’s interest in Wiz underscores its strategic focus on bolstering its cybersecurity capabilities amidst intensifying competition in the cloud market dominated by rivals like Microsoft and Amazon. Wiz, founded in 2020 and valued at $12 billion during its recent funding round, specializes in cloud security by scanning data stored on platforms such as Amazon Web Services and Microsoft Azure for potential vulnerabilities.

The potential acquisition aligns with Alphabet’s broader strategy to expand its cloud customer business, offering advanced artificial intelligence tools and enhancing its competitive stance against industry leaders. Despite historically trailing Microsoft and Amazon in cloud computing market share, Alphabet’s cloud unit has shown profitability in recent quarters, reflecting its efforts to capture a larger share of the market.

Regulatory Scrutiny and Market Dynamics

However, Alphabet’s pursuit of Wiz could face regulatory scrutiny, given the company’s existing antitrust challenges and the scale of the proposed acquisition. The tech giant is already under investigation for alleged anticompetitive practices in its search and digital advertising businesses, further complicating potential deals of this magnitude.

The talks with Wiz come on the heels of Alphabet’s decision to abandon its pursuit of HubSpot Inc., indicating a dynamic strategy to pivot towards opportunities in cybersecurity and cloud computing. Market reactions to the news have been positive, with Alphabet’s stock showing a modest increase following reports of the potential acquisition.

Also Read: The Story of Alice Walton, Walmart Heiress

As Alphabet navigates negotiations with Wiz, the outcome could significantly reshape the landscape of cybersecurity and cloud computing markets. For Alphabet, the acquisition represents a pivotal opportunity to enhance its technological capabilities and competitive positioning against industry rivals. However, the ultimate success of the deal hinges on regulatory approvals and the alignment of strategic objectives between the two companies.

Stay tuned as developments unfold, shaping the future direction of Alphabet’s expansion in cybersecurity and cloud services.

Alphabet Shares Fall After Cloud Unit Misses Estimates

Alphabet Shares Fall After Cloud Unit Misses Estimates

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Alphabet Inc. faced a significant blow as its shares plummeted by the most in a year on Wednesday following the release of its quarterly earnings report, which revealed weaker-than-expected profit in its cloud computing unit. This has raised concerns about Alphabet’s competitive standing in the cloud computing market, which is considered pivotal to its future success.

Alphabet Shares Fall After Cloud Unit Misses Estimates
Image Source: economictimes.indiatimes.com

As Google’s flagship search business matures, investors have been looking to the cloud unit to spearhead growth. However, the cloud unit reported operating income of $266 million, falling significantly short of the estimated $434 million, igniting worries about Alphabet’s ability to catch up with cloud computing giants such as Amazon.com Inc. and Microsoft Corp.

Max Willens, an analyst with Insider Intelligence, emphasized the unpredictable nature of the cloud computing business, stating, “Cloud computing is a much lumpier business than advertising and one where Google is facing stiff competition. While the traction it has among AI startups may bear fruit in the long run, it is not currently helping Google Cloud enough to satisfy investors.”

Alphabet’s shares took a hit, dropping as much as 8.9% to $126.40 in New York, marking the most substantial decline since October 2022. This downturn follows a promising year, during which the shares had gained 57% up to the previous day’s close.

Ruth Porat, Alphabet’s President who is currently serving as the company’s acting Chief Financial Officer, attributed the cloud unit’s disappointing performance to some customers’ cost-cutting measures.

Nevertheless, Alphabet’s overall earnings report for the third quarter was generally strong. The company reported sales of $64 billion, surpassing the analysts’ consensus of $63 billion. The net income amounted to $1.55 per share, surpassing Wall Street’s estimate of $1.45 per share.

The search advertising business, where Google holds a dominant position, reported revenue of $44 billion, exceeding the average analyst projection of $43.2 billion. However, Google’s leadership must contend with challenges stemming from the rise of generative AI chatbots that offer more conversational responses to user queries.

Despite the cloud unit’s struggles, Alphabet’s leadership has affirmed their commitment to operating more efficiently and investing in emerging opportunities such as artificial intelligence. CEO Sundar Pichai stated, “We’ll do everything that is needed to make sure we have the leading AI models and infrastructure in the world, bar none.”

Additionally, Alphabet’s ongoing legal battle with the U.S. Department of Justice, concerning allegations of search market power abuse, has contributed to the uncertainty surrounding the company’s future. Analyst Evelyn Mitchell-Wolf from Insider Intelligence noted that the outcome of the trial could influence investor confidence in the sustainability of Google’s business model.

Also Read: Snap Returns to Revenue Growth on Improved Ad Business

On a more positive note, YouTube reported $8 billion in revenue, surpassing the average estimate of $7.8 billion. This indicates that the video-sharing platform is benefiting from the rebound in digital advertising spending.

Alphabet’s Other Bets, which encompass moonshot projects like Waymo (self-driving cars) and Verily (life sciences), generated $297 million in revenue but incurred a $1.2 billion loss, in line with analysts’ projections. Despite the headwinds facing its cloud unit, Alphabet continues to explore new avenues for growth and innovation beyond its core businesses.

Google

Google Parent Alphabet cuts 12000 Jobs

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The parent company of google announced a 6 percent reduction in staff in its biggest round of job cuts, prolonging a recession among tech firms following record pandemic recruitment.

Alphabet Inc. stated that the job cuts would affect approximately 12,000 jobs all over various units and areas, though some areas, such as recruiting and projects beyond the firm’s core businesses, will have a greater impact.

Google
Image Source: cnn.com

According to individuals with knowledge of the situation, the job cuts attained the vice president level and impacted divisions such as cloud computing as well as Area 120, a company’s internal incubator that had previously faced cuts last year.

As per the report by Layoffs.fyi, which monitors media reports and company updates, the Google layoffs make January probably the worst month yet in a flood of technical layoffs that started last year. Microsoft Corp. announced this week that it would lay off 10,000 employees, the most in over eight years.

Wayfair Inc., a leading online furniture retailer, announced the layoff of about 10 percent of its working population, and Unity Software Inc., a provider of tools for developing videogames as well as other applications, also reduced its workforce.

Amazon.com Inc. announced layoffs of over 18,000 employees this past month, and Salesforce Inc. announced layoffs of 10 percent of its workforce. Meta Platforms Inc. announced a 13 percent staff reduction last year.

During the global epidemic, tech firms such as Google grew greatly as online life gained in popularity. Recent cuts are part of a broader shift toward profit protection and the end of a growth-at-all-costs period in tech.

Officials have recently stated that the company will be strengthening its belt, signaling the start of a new era of much more structured and cost-effective spending. However, the firm had not revealed as big cuts as its Silicon Valley peers.

Also Read: Netflix founder Reed Hastings stepping down as co-CEO

Google recruited vigorously as consumption for its services increased during the epidemic, resulting in a more than 50 percent increase in total Alphabet employee strength since the end of the year 2019.

The layoffs announced this week seemed to fall short of the nearly 12,800 employees Alphabet hired in the third quarter of last year.

“Over the past two years, we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Alphabet Chief Executive Sundar Pichai wrote in a message to employees sent out Friday and posted on the company’s website.

“I take full responsibility for the decisions that led us here,” Mr. Pichai wrote.

Source: wsj.com

Overhiring has emerged as a repeating message at technology firms in recent months, as executives realized that some of the hirings they did early in the disease outbreak to keep up with increasing demands for all things digital left them overstaffed as the business climate got ruined.

Salesforce Co-CEO Marc Benioff, Twitter Inc. co-founder Jack Dorsey and Meta Platforms CEO Mark Zuckerberg are among the officials who have apologised.

Waymo

Waymo – Facilitating Safe Movement Of People And Goods With Autonomous Driving Technology.

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Tesla is very much ahead of its time in terms of autonomous driving technology. But names like Alphabet are also trying to expand in the very field and provide its customer with the best of them all. Alphabet Inc., the parent company of Google, has another subsidiary named Waymo, which dedicatedly works to developing autonomous driving technology. In fact, the said company also runs a commercial self-driving taxi service in the Arizona region, named Waymo One, the only self-driving taxi service. The taxis under this project runs without having a standby driver for emergencies. Apart from Waymo’s self-driving taxis, the software developed by the company is also used by some other car companies, like Stellantis, Jaguar, Daimler AG, Land Rover, Volvo, and Nissan-Renault.

About Waymo

Waymo LLC is a subsidiary of Alphabet Inc. and has its headquarters based in Mountain View, California, U.S. It is a 13-years-old company founded in January 2009 by Sebastian Thrun and Anthony Levandowski. Till 2016, Google was the parent company of Waymo when it started a self-driving car project in 2009, but in 2016 Alphabet became the parent company of the same, when the same project had a name change to Waymo. Dmitri Dolgov and Dmitri Dolgov (Co-CEO) Tekedra Mawakana are leading Waymo as the co-CEOs.

The basic concept behind the idea of Waymo is to avoid the accidental deaths that happen due to various negligence reasons of humans. The company makes use of artificial intelligence, sensors, and hardware-enhanced vision system to provide safer transit for both humans and goods.

Waymo
Image source: bwbx.io

Founding Waymo

Waymo wasn’t founded as a company but was launched as a project by Google in its Google X lab. The project was headed and launched by Sebastian Thrun, who had gained much experience in artificial intelligence after being a part of organisations like SAIL (Stanford Artificial Intelligence Laboratory) and Anthony Levandowski. During 2006-07, Google was already working on improving its maps and street view, and for that, the Street View team of Google has launched Ground Truth, a project that became the basis of Google’s self-driving program.

Anthony Levandowski, the other co-founder of Wymo, was also in self-driving vehicles and had built an autonomous two-wheeled motorcycle named Ghost Rider for the 2004 DARPA Grand Challenge. Being a Google employee, Levandowski sold his technology to Google, which was an addition to Google’s self-driving program. In 2012, Google obtained a driverless technology license from the Nevada Department of Motor Vehicles (DMV), and it carried out its first experiment with the self-driven car. The license was the first of its kind in America.

Under project Chauffeur, Google launched a new driverless car prototype (100% autonomous) without any steering wheel, gas pedal, and brake pedal in May 2014. Another prototype came in December with the name Firefly, mainly built for learning and experimentation. In 2015, the company introduced the world’s first fully driverless ride on public roads, and the experiment included no test driver.

This project Chaufwur was renamed Wayno in 2016 and was established as a start-up company as well as a subsidiary of Alphabet. By October 2017, the company was testing driverless minivans on roads, and in 2019, it started to build its cars in a Detroit manufacturing plant. Waymo also started integrating its technology into the existing car models rather than building new designs for them. In 2020, the company raised a sum of $3 billion from its various investors. The same year, Waymo also partnered with Volvo for the integration of its technology into Volvo’s vehicles.

The CEO at Waymo

Dmitri is a Russian-American businessman, whereas Tekedra has been a lawyer and a well-known businesswoman in America.

Dmitri is an alumnus of the Moscow Institute of Physics and Technology, where he earned a Bachelor of Science and a Master of Science degree in physics and math. He also got a PhD degree in computer science from the University of Michigan and a postdoctoral from Stanford University. He has vast experience in the field of self-driving technology and has worked at Toyota and Google.

Tekedra, on the other hand, was already working at Waymo as the COO before she held the post of CEO. She has also worked with companies like Steptoe & Johnson, AOL, Yahoo!, eBay, etc. Tekedra holds a Doctorate in law.