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By Aditya Soni (Reuters) -As America's tech titans report earnings this week, one question looms large: is the artificial intelligence boom that has inflated valuations headed for the next big bubble? Microsoft, Alphabet, Amazon and Meta are poised to report that revenue rose at a brisk pace in the July-September quarter, according to LSEG data. The companies themselves are likely to say they will continue to pour billions into AI because it holds promise in the long term. But business leaders including OpenAI CEO Sam Altman, Amazon.com founder Jeff Bezos and Goldman Sachs CEO David Solomon have warned in recent months that the frenzy in tech stocks has outrun fundamentals. Investors, unnerved by the exuberance yet wary of betting against it, have started shifting away from hyped-up stocks, using dotcom-era strategies to dodge AI bubble risks. AI RETURNS REMAIN UNCERTAIN The four tech giants and other major cloud firms are together expected to spend $400 billion on AI infrastructure this year – but returns for businesses adopting the technology remain uncertain. A widely cited MIT study earlier this year found that of the more than 300 AI projects analyzed, only about 5% delivered measurable gains. Most AI projects stall at the pilot stage due to weak integration into workflows and models that fail to scale, the study found. "Overall, the models are not there. I feel like the industry is making too big of a jump and is trying to pretend like this is amazing, and it's not. It's slop," OpenAI co-founder and Tesla's former AI head Andrej Karpathy said earlier this month. That could spell trouble for the AI-fueled rally that has added about $6 trillion to the Big Tech companies' market value since ChatGPT's November 2022 debut – and for the broader U.S. economy, which some economists say has been propped up by AI spending offsetting the drag from Trump-administration tariffs. CIRCULAR DEALS ADD TO THE NERVOUSNESS Adding to the unease is a web of circular deals reminiscent of the 1990s dotcom boom, including Nvidia's potential $100 billion investment in OpenAI, one of its largest customers. OpenAI has signed AI compute deals worth $1 trillion with few details on how it will fund them, including a commitment to purchase $300 billion in computing power from Oracle. Debt is also playing a growing role in financing Big Tech's AI infrastructure spree in a departure from past investment cycles. Meta recently signed a $27 billion financing deal with private-credit firm Blue Owl Capital for its largest data center. "When the same companies are both funding and relying on each other, decisions may no longer be based on real demand or performance – but on reinforcing growth expectations," said Ahmed Banafa, engineering professor at San Jose State University. "These deals aren't necessarily problematic on their own – but when they become the norm, they increase systemic risk." SOME INVESTORS BET ADOPTION WILL GROW Some investors said beneath the froth, real value is emerging – pointing to double-digit revenue growth and strong cash flows keeping Big Tech balance sheets healthy. "Adoption may be low right now but that's not a forward indicator. With greater spend and greater innovation in these models, the adoption is going to grow," said Eric Schiffer, CEO of Los Angeles-based investment firm Patriarch Organization, which holds shares in all the "Magnificent Seven" companies. "I don't think we are at a bubble stage yet." In the July-September quarter, the cloud-computing units of Amazon, Microsoft and Google are all expected to report strong growth despite capacity constraints limiting their ability to meet AI demand. They are also likely to reaffirm their capital spending plans. Microsoft Azure revenue likely rose 38.4% in the period, outpacing expected growth of 30.1% for Google Cloud and 18% for Amazon Web Services, Visible Alpha data shows. AWS remains the largest player but has lagged Microsoft, which has benefited from its OpenAI tie-up, and Google, whose models have gained traction with startups. A recent AWS outage that disrupted several popular apps drew fresh scrutiny. Overall, Microsoft is expected to report revenue growth of 14.9% in the quarter, while Alphabet's will likely rise 13.2%, according to LSEG data. Amazon and Meta are likely to deliver revenue growth of 11.9% and 21.7%, respectively. Profit growth, however, is expected to slow for the companies as costs jump, with all barring Microsoft expected to post their weakest increase in 10 quarters. Microsoft, Alphabet and Meta will report results on Wednesday, followed by Amazon on Thursday. (Reporting by Aditya Soni in Bengaluru; Editing by Sayantani Ghosh and Saumyadeb Chakrabarty)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Aditya Soni (Reuters) -As America's tech titans report earnings this week, one question looms large: is the artificial intelligence boom that has inflated valuations headed for the next big bubble? Microsoft, Alphabet, Amazon and Meta are poised to report that revenue rose at a brisk pace in the July-September quarter, according to LSEG data. The companies themselves are likely to say they will continue to pour billions into AI because it holds promise in the long term. But business leaders including OpenAI CEO Sam Altman, Amazon.com founder Jeff Bezos and Goldman Sachs CEO David Solomon have warned in recent months that the frenzy in tech stocks has outrun fundamentals. Investors, unnerved by the exuberance yet wary of betting against it, have started shifting away from hyped-up stocks, using dotcom-era strategies to dodge AI bubble risks. AI RETURNS REMAIN UNCERTAIN The four tech giants and other major cloud firms are together expected to spend $400 billion on AI infrastructure this year – but returns for businesses adopting the technology remain uncertain. A widely cited MIT study earlier this year found that of the more than 300 AI projects analyzed, only about 5% delivered measurable gains. Most AI projects stall at the pilot stage due to weak integration into workflows and models that fail to scale, the study found. "Overall, the models are not there. I feel like the industry is making too big of a jump and is trying to pretend like this is amazing, and it's not. It's slop," OpenAI co-founder and Tesla's former AI head Andrej Karpathy said earlier this month. That could spell trouble for the AI-fueled rally that has added about $6 trillion to the Big Tech companies' market value since ChatGPT's November 2022 debut – and for the broader U.S. economy, which some economists say has been propped up by AI spending offsetting the drag from Trump-administration tariffs. CIRCULAR DEALS ADD TO THE NERVOUSNESS Adding to the unease is a web of circular deals reminiscent of the 1990s dotcom boom, including Nvidia's potential $100 billion investment in OpenAI, one of its largest customers. OpenAI has signed AI compute deals worth $1 trillion with few details on how it will fund them, including a commitment to purchase $300 billion in computing power from Oracle. Debt is also playing a growing role in financing Big Tech's AI infrastructure spree in a departure from past investment cycles. Meta recently signed a $27 billion financing deal with private-credit firm Blue Owl Capital for its largest data center. "When the same companies are both funding and relying on each other, decisions may no longer be based on real demand or performance – but on reinforcing growth expectations," said Ahmed Banafa, engineering professor at San Jose State University. "These deals aren't necessarily problematic on their own – but when they become the norm, they increase systemic risk." SOME INVESTORS BET ADOPTION WILL GROW Some investors said beneath the froth, real value is emerging – pointing to double-digit revenue growth and strong cash flows keeping Big Tech balance sheets healthy. "Adoption may be low right now but that's not a forward indicator. With greater spend and greater innovation in these models, the adoption is going to grow," said Eric Schiffer, CEO of Los Angeles-based investment firm Patriarch Organization, which holds shares in all the "Magnificent Seven" companies. "I don't think we are at a bubble stage yet." In the July-September quarter, the cloud-computing units of Amazon, Microsoft and Google are all expected to report strong growth despite capacity constraints limiting their ability to meet AI demand. They are also likely to reaffirm their capital spending plans. Microsoft Azure revenue likely rose 38.4% in the period, outpacing expected growth of 30.1% for Google Cloud and 18% for Amazon Web Services, Visible Alpha data shows. AWS remains the largest player but has lagged Microsoft, which has benefited from its OpenAI tie-up, and Google, whose models have gained traction with startups. A recent AWS outage that disrupted several popular apps drew fresh scrutiny. Overall, Microsoft is expected to report revenue growth of 14.9% in the quarter, while Alphabet's will likely rise 13.2%, according to LSEG data. Amazon and Meta are likely to deliver revenue growth of 11.9% and 21.7%, respectively. Profit growth, however, is expected to slow for the companies as costs jump, with all barring Microsoft expected to post their weakest increase in 10 quarters. Microsoft, Alphabet and Meta will report results on Wednesday, followed by Amazon on Thursday. (Reporting by Aditya Soni in Bengaluru; Editing by Sayantani Ghosh and Saumyadeb Chakrabarty)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Haripriya Suresh BENGALURU (Reuters) -LTIMindtree is doubling down on AI with investments in a newly-launched platform that helps companies adopt the technology, its top boss said, as India's $283-billion IT industry faces broader cuts in non-essential spending by clients. The business, BlueVerse, launched in June, uses ready-made digital assistants to solve problems for firms. "The conversation around AI is getting serious," CEO Venugopal Lambu said in an interview, without disclosing the size of the planned investment in the AI unit. "That's the big green shoot I see." The IT firm is seeing a spike in smaller, AI-led deals that bring in quick revenue, even as the technology increasingly underpins larger, strategic contracts, the CEO said. AI-led efficiencies are also creating newer challenges for IT firms. For instance, LTIMindtree made less revenue from its top five clients in the latest quarter as they expect the company to pass on savings from AI-led productivity gains. Lambu says these are transitory operational challenges that the company has to navigate, and remains confident of closing the financial year with near double-digit revenue growth. While AI dominates boardroom conversations at IT firms, most have yet to reveal details of AI-specific revenue. (Reporting by Haripriya Suresh; Editing by Mrigank Dhaniwala)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

(Reuters) -Australia's competition regulator on Monday sued Microsoft, accusing it of misleading millions of customers into paying higher prices for its Microsoft 365 software after bundling it with artificial intelligence tool Copilot.  The Australian Competition and Consumer Commission (ACCC) alleged that from October 2024, the technology giant misled about 2.7 million customers by suggesting they had to move to higher-priced Microsoft 365 personal and family plans that included Copilot. After the integration of Copilot, the annual subscription price of the Microsoft 365 personal plan increased by 45% to A$159 ($103.32) and the price of the family plan increased by 29% to A$179, the ACCC said. The regulator said Microsoft failed to clearly tell users that a cheaper “classic” plan without Copilot was still available. The watchdog said the option to keep the cheaper plan was only revealed after consumers began the cancellation process, a design it argued breached Australian consumer law by failing to disclose material information and creating a false impression of available choices. Microsoft's previous communications through emails and a blog post failed to mention the cheaper alternative, only informing customers that the price increase would apply at the next auto-renewal, the ACCC said.  A Microsoft spokesperson said in an emailed response that it was reviewing the ACCC's claim in detail. The ACCC is seeking penalties, consumer redress, injunctions and costs from Microsoft Australia Pty Ltd and its U.S. parent, Microsoft Corp.  The ACCC said the maximum penalty that could be imposed on a company for each breach of Australian consumer law was the greater of A$50 million, three times the benefits obtained that were reasonably attributable, or 30% of the corporation's adjusted turnover during the breach period if the value of the benefits could not be determined. "Any penalty that might apply to this conduct is a matter for the Court to determine and would depend on the Court’s findings," the regulator said. "The ACCC will not comment on what penalties the Court may impose."  ($1 = 1.5389 Australian dollars) (Reporting by Sneha Kumar in Bengaluru; Editing by Kim Coghill and Jamie Freed)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

RIYADH (Reuters) -Saudi-based AI startup Humain, set up by the kingdom's sovereign wealth fund, plans to launch a computer operating system this week that enables users to speak to a computer to tell it to perform tasks, the company said on Monday. It sees systems such as its new product, Humain 1, as an eventual alternative to icon-based systems like Windows or macOS that have dominated personal computer operating systems since the mid-1980s, a company spokesperson said. "Rather than looking at icons where you click for discrete applications, now you (…) speak your intent," CEO Tareq Amin said at the Fortune Global Forum in Riyadh. While other companies are working on similar products, Humain aims to be the first to officially launch its system. Humain was launched in May under the kingdom's sovereign wealth fund, the Public Investment Fund, and is chaired by Crown Prince Mohammed bin Salman. It offers AI services and products, including data centres, AI infrastructure, cloud capabilities and advanced AI models.   A computer's operating system is the software that acts as the bridge between the user and the machine, managing hardware resources and providing essential services for all other programs. The Humain spokesperson, who declined to be named, said that the company started developing the new operating system shortly after it launched as a company in May. It has been testing the operating system internally for its own payroll and human resources systems, he said. Amin also said on Monday that Humain plans to build approximately 6 gigawatts of data center capacity, but did not say where.  (Reporting by Yousef Saba; Writing by Andrew Mills and Tala Ramadan; Editing by Jacqueline Wong and Susan Fenton)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Yousef Saba RIYADH (Reuters) -SandboxAQ, a U.S.-based artificial intelligence and quantum technology firm, signed an agreement with Bahrain's sovereign wealth fund on Monday aimed at speeding up the development of drugs and creating biotech assets worth $1 billion. The deal, announced on the sidelines of Saudi Arabia's flagship investment conference, the Future Investment Initiative in Riyadh, will see Bahrain's Mumtalakat license SandboxAQ's large quantitative models trained on physics, chemistry and biology to accelerate drug discovery and scientific research. "The collaboration will help position Bahrain as a regional biotech hub, with a joint research committee guiding a three-year program aimed at developing valuable new drugs," they said in a statement. SandboxAQ CEO Jack Hidary told Reuters the partnership would empower Bahrain to create and own intellectual property in biotech, including therapies targeting diseases prevalent in the region such as diabetes and certain genetic disorders. "Traditionally, the majority of biotech IP is owned in a handful of countries. This enables Bahrain to develop its own assets, focused both on regional and global health priorities," Hidary said. The agreement will use Bahrain's digital health datasets and hospital infrastructure to develop therapies. Clinical trials are expected to begin in Bahrain, with potential for multi-site studies, Hidary added. He added that SandboxAQ was receiving interest from other countries, including in the Gulf, for similar partnerships. In January, Saudi oil giant Aramco signed an agreement with SandboxAQ to use its models to increase the value of downstream products. (Reporting by Yousef SabaEditing by Mark Potter)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Yousef Saba RIYADH (Reuters) -SandboxAQ, a U.S.-based artificial intelligence and quantum technology firm, signed an agreement with Bahrain's sovereign wealth fund on Monday aimed at speeding up the development of drugs and creating biotech assets worth $1 billion. The deal, announced on the sidelines of Saudi Arabia's flagship investment conference, the Future Investment Initiative in Riyadh, will see Bahrain's Mumtalakat license SandboxAQ's large quantitative models trained on physics, chemistry and biology to accelerate drug discovery and scientific research. "The collaboration will help position Bahrain as a regional biotech hub, with a joint research committee guiding a three-year program aimed at developing valuable new drugs," they said in a statement. SandboxAQ CEO Jack Hidary told Reuters the partnership would empower Bahrain to create and own intellectual property in biotech, including therapies targeting diseases prevalent in the region such as diabetes and certain genetic disorders. "Traditionally, the majority of biotech IP is owned in a handful of countries. This enables Bahrain to develop its own assets, focused both on regional and global health priorities," Hidary said. The agreement will use Bahrain's digital health datasets and hospital infrastructure to develop therapies. Clinical trials are expected to begin in Bahrain, with potential for multi-site studies, Hidary added. He added that SandboxAQ was receiving interest from other countries, including in the Gulf, for similar partnerships. In January, Saudi oil giant Aramco signed an agreement with SandboxAQ to use its models to increase the value of downstream products. (Reporting by Yousef SabaEditing by Mark Potter)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)