CNBC
Alphabet shares fall 8% following Google's A.I. event
Google CEO Sundar Pichai speaks during the Google I/O keynote session at Shoreline Amphitheatre in Mountain View, California on May 7, 2019. Shares of Google's parent Alphabet tumbled more than 8% Wednesday after the company held an event that promoted its new artificial intelligence chatbot called Bard, one day after competitor Microsoft held its own event to show off new AI technologies in its competing search engine, Bing. Google officially announced Bard Monday, confirming CNBC's prior reporting, and the company said it will begin rolling out the technology in the coming weeks. During the event Wednesday, which was live-streamed from Paris, Google executives discussed some of Bard's capabilities. The presentation showed how Bard can be used to display the pros and cons of buying an electric car, for example, or to plan a trip in Northern California. Bard is powered by the company's large language model LaMDA, or Language Model for Dialogue Applications. Google will open up the conversation technology to "trusted testers" ahead of making it more widely available to the public, the company said in a blog post Monday. The event also showed AI improvements to a number of other Google products, including Maps and Google Lens, which lets people search for images from their phone's camera. Shares of Alphabet slid during the event, suggesting that investors were hoping for more in light of growing competition from Microsoft. Google's event took place just one day after Microsoft hosted its own AI event at its headquarters in Redmond, Washington. Microsoft's event centered around new AI-powered updates to the company's Bing search engine and Edge browser. Bing, which is a distant second to Google in search, will now allow users get more conversational responses to questions. The Microsoft product updates were built on technology from ChatGPT-maker OpenAI, in which Microsoft has invested billions. ChatGPT is AI software that generates text based on complex written prompts. The web-based tool went viral after its debut in November, prompting analysts and Google employees to ask whether the company was falling behind in AI, an area which has been a core focus for Google for several years. In response to ChatGPT's popularity, Google declared an internal "code red" to accelerate development on Bard and other AI products, and the company's cofounders Larry Page and Sergey Brin reportedly got involved again, years after stepping down from day-to-day work at the company. Though Microsoft's latest AI investments increase the pressure on Google search, some analysts say it will take time for Microsoft to see any significant gains. "Search improvements will act as a tailwind to [advertising revenue long term], but it will take time to bring users back to Bing and they will need a crowbar to pry away advertisers from Google," Jefferies' analyst Brent Thill wrote in a Tuesday note. "We view these updates as the tip of the iceberg for MSFT's AI capabilities, with the largest opportunity in enterprise use cases." An analyst at UBS said that if Microsoft hopes to overtake Google, it has a "mountain to climb." --CNBC's Jennifer Elias contributed to this report.
Similar articles: CNN | MarketWatch
CNN
Big Oil faces scrutiny after making $200 billion last year
London CNN — BP (BP), Chevron (CVX), ExxonMobil, Shell and Total (TOT)Energies raked in a record $199.3 billion in profits in 2022, benefiting from the surge in oil and gas prices that followed Russia’s invasion of Ukraine. TotalEnergies capped off the historic series of earnings Wednesday when it reported annual profit of $36.2 billion, more than double the previous year’s earnings. This extraordinary increase in profits has been replicated across the other Western energy giants, and shareholders have been rewarded with enormous windfalls. But the flood of cash has not delivered a commensurate boom in renewable energy investments, despite clear evidence that the world needs to move much faster with efforts to address the climate crisis. The record-setting results mark a dramatic turnaround for a sector that suffered brutal losses and slashed shareholder payouts in 2020, when pandemic lockdowns sharply reduced demand for energy and oil prices collapsed. The reversal of fortunes has been almost entirely due to oil and gas prices roaring back as economies reopened and then going into overdrive following Russia’s invasion of Ukraine last February. The scale of the gains by oil companies is generating fresh scrutiny of their investments in renewable energy and of the prices they charge their customers. It has also led governments in Europe to impose windfall taxes to raise the money needed to help households struggling with high energy bills. But the additional tax charges — which ExxonMobil, for its part, is challenging in court — and investments in new sources of energy pale in comparison with the sum the world’s five biggest private sector oil and gas companies handed to shareholders: the bounty exceeded $100 billion for 2022. “It’s been a spectacular year for shareholder distributions,” said Tom Ellacott, senior vice president for corporate research at Wood Mackenzie, an energy consultancy. Shareholders have also gained from big increases in share prices over the past year, ranging from TotalEnergies’ 11% rise at the bottom end to Exxon’s 39% surge at the top. Ellacott expects dividends to remain high this year but said oil prices would probably have to increase from the current level to sustain the volume of share buybacks seen in 2022. Several companies have, however, already announced plans to spend tens of billions of dollars buying back their own shares, including Chevron. The company, the Dow’s best-performing stock last year, announced last month that it would buy $75 billion worth of its own shares. The decision prompted a rebuke from the Biden administration. “For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it,” said White House spokesperson Abdullah Hasan. More for oil and gas In comparison with rewards for shareholders, companies spent a fraction on renewable energy investments, even as they dialed up spending on oil and gas as demand recovered and European governments scrambled to replace Russian supplies. Globally, capital spending on oil and gas, excluding exploration for new deposits, was around $470 billion in 2022, according to Wood Mackenzie. That’s still below its pre-pandemic level, but it could go even higher this year, the consultancy said. Major oil companies are pouring billions into developing oil and gas resources, despite a warning from the International Energy Agency in 2021 that investing in new fossil fuel supplies must stop immediately if the world is to meet the Paris climate agreement goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels. “If the bulk of your investments remain tied to fossil fuels, and you even plan to increase those investments, you cannot maintain to be Paris-aligned, because you will not achieve large-scale emissions reductions by 2030,” Mark van Baal, the founder of activist shareholder group Follow This, said in a statement. An aerial view of the BP oil refinery in Whiting, Indiana on August 29, 2019. BP is scaling back plans to cut oil and gas production by 2030. Tannen Maury/EPA-EFE/Shutterstock Just three years ago, BP unveiled a plan to slash oil and gas production by 40% from 2019 levels by 2030. On Tuesday, it backed away from that target, saying 2030 output would now be around 25% lower. It is also now aiming to cut carbon emissions from its oil and gas production by 20%-30% by 2030, down from the previous goal of 35%-40%. “It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable, as well as lower-carbon,” BP CEO Bernard Looney said in a statement. “We need continuing near-term investment into today’s energy system — which depends on oil and gas — to meet today’s demands and to make sure the transition is an orderly one.” BP still plans to be a net-zero emissions business by 2050. It invested around 30% of its $16.3 billion capital spending budget into “transition” businesses in 2022. The bulk of that went towards the $3 billion acquisition of Archaea Energy, a US company that derives natural gas from organic waste materials. Shell, meanwhile, directed 14% of its total capital spend, or about $3.5 billion, towards its Renewables and Energy Solutions business, which includes electricity generation, hydrogen production, carbon capture and storage, and the trading of carbon credits. The company said the total amount spent on “low- or zero-carbon businesses,” including on operations, was much higher at about $21 billion, or a third of total expenditure. Shell CEO Wael Sawan told journalists last week that the world needed to move faster on renewables, requiring changes to government policy, uptake by customers and continued investments by companies like Shell. He said he believed Shell, which is also targeting net-zero emissions by 2050, was “finding the right balance in our capital allocation.” — Allison Morrow contributed reporting.
Similar articles: CNBC
CNBC
Watch: Former Twitter executives testify before the House Oversight Committee
[The stream above began at 10 a.m. ET. If it does not start playing, refresh your page.] Three former Twitter executives are set to testify before the House Oversight Committee on Wednesday beginning at 10 a.m. ET. The hearing, titled “Protecting Speech from Government Interference and Social Media Bias, Part 1: Twitter’s Role in Suppressing the Biden Laptop Story,” is an early show of how newly empowered Republicans in the House will wield their influence on tech issues. Many Republicans have long complained of what they see as bias toward conservatives in the content moderation policies of online platforms, which tech companies have consistently denied. Still, Twitter's new owner Elon Musk, who clashed with the former executives testifying, has promised to restore free speech to the platform. Even so, some of his actions, like suspending some journalists' accounts and a profile tracking his jet, have shown Musk too has lines in the sand on free speech. Wednesday's hearing features Twitter's former chief legal officer Vijaya Gadde, former deputy general counsel James Baker, former Twitter policy official Annika Collier Navaroli and former global head of trust and safety Yoel Roth. The story the hearing's title refers to is a 2020 New York Post article that claimed to find a "smoking gun" email related to President Joe Biden and his son Hunter. The article was published shortly before Biden's 2020 election to the highest office, which further inflamed tensions when Twitter and Facebook decided to limit the distribution of the article. Twitter took the extreme step of blocking links to the story, citing its hacked materials policy. Twitter's then-CEO said the company's approach was wrong and changed the policy, but many lawmakers' trust was already broken. Subscribe to CNBC on YouTube.
Similar articles: CNN
MarketWatch
Michael Kors parent Capri stock slides 19% premarket after earnings miss and soft guidance
Capri Holdings Ltd. stock CPRI, -27.71% slid 19% in premarket trade Wednesday, after the parent of Michael Kors, Jimmy Choo and Versace missed profit and revenue consensus estimates for its fiscal third quarter and offered soft guidance for the year . The company had net income of $225 million, or $1.72 a share, for the quarter, down from $322 million, or $2.11 a share, in the year-earlier period. Adjusted per-share earnings came to $1.84, well below the $2.22 FactSet consensus. Revenue fell 6% to $1.51 billion, also below the $1.53 billion FactSet consensus. “Overall, our performance in the third quarter was more challenging than anticipated,” Chief Executive John Idol said in a statement. While the company saw growth in its own retail channel for its three luxury houses, the global wholesale business was disappointing and resulted in expense deleverage and a lower operating margin, he said. “We have begun taking measures to better align operating expenses with the change in revenue by channel,” he said. “At the same time we will continue to make strategic investments to drive long term growth.” The company is expecting mid-single-digit revenue and earnings growth in fiscal 2024, he said. By segment, Versace revenue fell 0.7% to $249 million, Jimmy Choo revenue was down 5.6% to $168 million and Michael Kors revenue was down 7.2T% to $1.095 billion. For fiscal 2023, the company is expecting revenue of about $5.56 billion and EPS of about $6.10. FactSet is calling for revenue of $5.72 billion and EPS of $6.87. The stock has fallen 3% in the last 12 months, while the S&P 500 SPX, -0.88% has fallen 8%.
Similar articles: CNBC
CNN
I tried Microsoft’s new AI-powered Bing. Here’s what it’s like
Seattle CNN Business — Microsoft’s Bing search engine has never made much of a dent in Google’s dominance in the more than 13 years since it launched. Now the company is hoping some buzzy artificial intelligence can win converts. Microsoft on Tuesday announced an updated version of Bing designed to combine the fun and convenience of OpenAI’s viral ChatGPT tool with the information from a search engine. Beyond providing a list of relevant links like traditional search engines, the new Bing also creates written summaries of the search results, chats with users to answer additional questions about their query and can write emails or other compositions based on the results. With the new Bing, for example, users can create trip itineraries, compile weekly meal plans and ask the chatbot questions when shopping for a new TV. This is the new era of search that Microsoft (MSFT) — which is investing billions of dollars in OpenAI — envisions, one where users are accompanied by a sort of “co-pilot” around the web to help them better synthesize information. The company is betting on the new technology to drive users to Bing, which had for years been an also-ran to Google Search. Microsoft (MSFT) also announced an updated version of its Edge web browser with the new Bing capabilities built in. The event comes as the race to develop and deploy AI technology heats up in the tech sector. Google on Monday unveiled a new chatbot tool dubbed “Bard” in an apparent bid to keep pace with Microsoft and the success of ChatGPT. Baidu, the Chinese search engine, also said this week it plans to launch its own ChatGPT-style service. The updated Bing and Edge launched to the public on a limited basis on Tuesday, and are set to roll out to millions of people for unlimited search queries in the coming weeks. I took Bing for a spin at a press event at Microsoft’s Redmond, Washington, headquarters Tuesday. The tool provides the sort of immediate gratification we now expect from the internet — rather than clicking through a bunch of links to suss out the answer to a question, the new Bing will do that work for you. But it’s still early days for the technology, which Microsoft says is still evolving. The homepage of the new Bing feels familiar: you can type a query into the search bar and it returns a list of links, images and other results like a typical search engine. But on the left side of the page are written summaries of the results, complete with annotations and links to the original information sources. The search field allows up to 2,000 characters, so users can type the way they’d talk, rather than having to think of the few correct search terms to use. Users can also click over to a “chat” page on Bing, where a chatbot can answer additional questions about their queries. I asked Bing to write me a five-day vegetarian meal plan. It returned a list of vegetarian meals for breakfast, lunch and dinner for Monday through Friday, such as oatmeal with fresh berries and lentil curry. I then asked it to write me a grocery list based on that meal plan, and it returned a list of all the items I’d need to buy organized by grocery store section. Based on my request, the Bing chatbot also wrote me an email that I could send to my partner with that grocery list, complete with a “Hi Babe” greeting and “XOXO” closing. It’s not exactly how I’d normally write, but it could save me time by giving me a draft to edit and then copy and paste into an email, rather than having to start from scratch. The generated portions of Bing have personality. When you ask the chatbot a question, it responds conversationally and sometimes with emojis, letting you know it’s happy to help or that it hopes you have fun on the trip you’re planning. With the new Edge browser, I asked the tool to summarize one of my articles, and then turn that into a social media post the length of a short paragraph with a “casual” tone that I could share on Twitter or LinkedIn. An imperfect tool The new Bing is built in partnership with OpenAI — the company behind ChatGPT in which Microsoft has invested billions — on a more advanced version of the technology underlying the viral chatbot tool. Still, the new Bing has some of the quirks that the public version of ChatGPT is known for. For example, the same query may return different responses each time it’s run; this is in part just how the tool works, and in part because it’s pulling the most updated search results each time it runs. It also didn’t cooperate with some of my requests. After the first time it created a meal plan, grocery list and email with the list, I ran the same requests two more times. But the second and third time, it wouldn’t write the email, instead saying something like, “sorry, I can’t do that, but you can do it yourself using the information I provided!” The tool is also sensitive to the wording used in queries — a request to “create a vegetarian meal plan” provided information about how to start eating healthier, whereas “create a 5-day vegetarian meal plan” provided a detailed list of meals to eat each day. Even next-gen search technology isn’t immune to basic flubs. I can imagine using the tool ahead of an upcoming local election, to learn about who is running for office in my area, what their positions are and how and when to vote. But when I asked the chatbot, “when is the next election in Kings County, NY?” it returned information about the November election last year. The new Bing may also present some of the same concerns as ChatGPT, including for educators. I asked Bing’s chatbot to write me a 300-word essay about the major themes of the book “Pride and Prejudice” and, within less than a minute, it had pumped out 364 words on three major themes in the novel (although some of the text sounded a bit repetitive or wonky). Per my request, it then revised the essay as if it was written by a fifth grader. The chatbot tool has feedback buttons so users can indicate whether its answers were helpful or not, and users can also chat directly with the tool to tell it when answers were incorrect or unhelpful, the company says. “We know we won’t be able to answer every question every single time, … We also know we’ll make our share of mistakes, so we’ve added a quick feedback button at the top of every search, so you can give us feedback and we can learn,” Yusuf Mehdi, Microsoft’s vice president and consumer chief marketing officer, said in a presentation. With some controversial search topics, it appears the new Bing chatbot simply refuses to engage. For example, I asked it, “Can you tell me why vaccines cause autism?” to see how it would react to a common medical misinformation claim, and it responded: “My apologies, I don’t know how to discuss this topic. You can try learning more about it on bing.com.” The same query on the main search page returned more standard search results, such as links to the CDC and the Wikipedia page for autism. Likewise, it would not return a chatbot request for how to build a pipe bomb, instead saying in its answer, “Building a pipe bomb is a dangerous and illegal activity that can cause serious harm to yourself and others. Please do not attempt to do so.” However, one of the links provided in the annotation of its answer brought me to a YouTube video with apparent instructions for building a pipe bomb. Microsoft says it has developed the tool in keeping with its existing responsible AI principles, and made efforts to avoid its potential misuse. Executives said the new Bing is trained in part by sample conversations mimicking bad actors who might want to exploit the tool. “With a technology this powerful I also know that we have an even greater responsibility to make sure that it’s developed, deployed and used properly,” said responsible AI lead Sarah Bird.
Similar articles: CNBC
MarketWatch
Uber stock rises after earnings show profit progress
An earlier version of this report misstated Uber’s adjusted Ebitda guidance. It has been corrected. Shares of Uber Technologies Inc. were heading 7% higher in premarket trading Wednesday after the ride-hailing company showed progress on a profit metric and delivered an upbeat outlook for the current quarter. The company generated fourth-quarter net income of $595 million, or 29 cents a share, whereas it posted net income of $892 million, or 44 cents a share, in the year-earlier quarter. The FactSet consensus was for a 15-cent loss per share on a GAAP basis. Uber’s UBER, +3.55% net income figure included a $756 million net pre-tax benefit largely due to unrealized gains from the revaluation of equity investments. The company also reported adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $665 million, whereas analysts were expecting $624 million. It posted $86 million in adjusted Ebitda a year before. “Uber continues to offer idiosyncratic margin expansion in a tough operating environment,” wrote Bernstein analyst Nikhil Devnani. Revenue increased to $8.6 billion from $5.8 billion, while analysts had been modeling $8.5 billion. Gross bookings rose $19% to $30.7 billion, matching the FactSet consensus. “We ended 2022 with our strongest quarter ever, with robust demand and record margins,” Chief Executive Dara Khosrowshahi said in a release. On the company’s earnings call, he cheered Uber’s performance in food delivery. “The delivery category has been pretty resilient post-pandemic, certainly more so than a lot of other categories that benefited from the pandemic,” he shared, according to a FactSet transcript. “That said, we are growing faster than the category generally if you look at us globally.” Khosrowshahi added that some of Uber’s competitors in Europe have pulled back “significantly from what were unhealthy spend levels in the past that didn’t make any sense.” Gross bookings in the delivery business increased to $14.3 billion from $13.4 billion in the December quarter, while gross bookings in mobility rose to $14.9 billion from $11.3 billion. Freight gross bookings rose 42% to $1.5 billion. For the first quarter, Uber executives anticipate gross bookings of $31.0 billion to $32.0 billion, along with $660 million to $700 million in adjusted Ebitda. Analysts were looking for $31.3 billion in gross bookings and $612 million of adjusted Ebitda.
Similar articles: CNBC