Apple Negotiates with OpenAI and Google

Apple is in advanced talks with OpenAI and Google to potentially integrate their cutting-edge chatbot technologies into iOS 18, the operating system for the highly anticipated iPhone 16. The Cupertino tech giant is negotiating terms with OpenAI about using features from its groundbreaking ChatGPT model in the next-gen iPhone, while also discussing licensing Google's impressive Gemini chatbot.

However, Apple hasn't made a definitive choice between ChatGPT, Gemini, or another AI provider yet. The notoriously secretive company is still weighing its options.

The iPhone 16, expected to hit shelves this fall, will be Apple's first smartphone to fully embrace generative AI. Industry insiders believe this bold leap could significantly boost the company's already sky-high stock value. CEO Tim Cook has acknowledged AI's immense potential, and rumors suggest iOS 18 will use the tech to dramatically improve Siri and Messages.

While details remain limited compared to the AI-centric marketing blitz around Google's Pixel 8 and Samsung's Galaxy S24, we can expect camera upgrades, Siri enhancements, and quality-of-life iOS improvements powered by Apple's generative AI. More concrete info will likely be unveiled at WWDC in June.

Meta Shares Plummet as AI Spending Ramps Up

Meta, the parent company of Facebook and Instagram, saw its shares tumble 15% when markets opened on Thursday, wiping a staggering $190 billion off its market value. Investors reacted negatively to CEO Mark Zuckerberg's pledge to significantly increase spending on artificial intelligence before the company can generate substantial revenue from new AI products. Zuckerberg's announcement came during a conference call on Wednesday, where he acknowledged that AI-related expenditures would need to grow "meaningfully" before Meta could capitalize on its investments. This shift in strategy has unsettled investors, especially after Meta raised the upper limit of its capital expenditure guidance from $37 billion to $40 billion.

Key Points:

• Meta shares plunged 15%, wiping $190 billion off its market value

• CEO Mark Zuckerberg pledged to significantly increase AI spending before generating revenue

• Meta raised its capital expenditure guidance from $37 billion to $40 billion

• Last week, Meta released Llama 3 and an image generator with real-time updates

• Meta AI assistant is expanding to platforms in over a dozen markets outside the US

• Meta is still determining the best way to implement AI features in Europe

Last week, Meta made headlines by releasing Llama 3, the latest iteration of its AI model, along with an image generator that allows users to update pictures in real-time as they type prompts. The company's AI-powered assistant, Meta AI, is now expanding to platforms in more than a dozen markets outside the US, including Australia, Canada, Singapore, Nigeria, and Pakistan. However, Meta is still working on the appropriate approach to implement these features in Europe. The share decline follows a record gain in market value by Meta in February, when the company added $196 billion to its stock market capitalization – a measure of a company's worth – after declaring its first dividend. At the time it was the biggest one-day gain in Wall Street history.

Microsoft Leads AI Charge with Cultural Shift

Microsoft is betting big on artificial intelligence, spending billions to build out the infrastructure needed to power its AI empire. So far, the strategy appears to be paying off, with the company's stock surging 5.5% in after-hours trading following its stellar Q1 2024 earnings report. Analysts are bullish, with Wedbush's Daniel Ives dubbing Microsoft the "#1 AI Draft Pick."

However, CEO Satya Nadella acknowledges that a major challenge lies ahead: convincing businesses to embrace the cultural change required to fully leverage AI tools like Copilot and Azure AI. Implementing these solutions often means upending long-standing processes, which can be a tough sell for risk-averse companies. Even within Microsoft, employees are having to "take their own medicine" and adapt to AI-driven workflows.

But there are reasons to be optimistic about AI adoption. The pandemic forced workers to rapidly adopt new technologies, priming them for further digital transformation. Microsoft is appointing "Copilot champions" within customer organizations to drive usage. And Nadella notes that Copilot is being adopted faster than any previous Microsoft product suite. With Azure AI already contributing 7 percentage points to the cloud platform's 31% growth, the potential rewards of successful AI integration are immense. Microsoft may be facing a cultural reckoning, but the company appears well-positioned to lead the AI revolution if it can get businesses on board.

Perplexity Soars to $3B Valuation as AI Search Fever Entices Investors

Perplexity, the AI-powered search engine startup, is on a rocket ship to the moon. The company is currently raising at least $250 million at a staggering valuation of $2.5 billion to $3 billion, according to TechCrunch. This comes just months after Perplexity's valuation skyrocketed from $121 million to $540 million in January, and then hit unicorn status at $1 billion in March with a $63 million round.

Investors are clamoring to get in on the action, with previous backers NEA and IVP looking to double down. Perplexity's founder Aravind Srinivas says the company is the only enterprise AI offering that incorporates cutting-edge models from OpenAI, Anthropic, Mistral and more. With 75 million queries processed this year and $20 million in ARR, Perplexity is quickly becoming the go-to AI search engine for consumers and businesses alike. The startup's rapid-fire fundraising is reminiscent of Snap's pre-IPO days, as investors rush to capitalize on the generative AI zeitgeist.

While Perplexity may be a relative newcomer, founded just last year, it's already amassed an impressive roster of 46 investors including Jeff Bezos, Meta's Yann LeCun, and Hugging Face's Clément Delangue. By focusing on a specific product - search - rather than trying to build general-purpose

language models, Perplexity is carving out a unique niche in the increasingly crowded AI landscape. With Google scrambling to keep up, Perplexity's AI-native search engine could be poised to give the tech giant a run for its money. The sky's the limit for this AI unicorn.