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(Reuters) -IBM beat Wall Street estimates for third-quarter revenue and profit on Wednesday, driven by booming demand for its software and new mainframe as the rush to deploy AI models boosts sales for the underlying technology supporting them. Businesses have prioritized spending on improving their platforms as they upgrade their systems to develop data-intensive artificial intelligence tech, helping drive demand for IBM's high-margin software segment. The company's shares have risen nearly 30% so far this year, as investors bet on its potential to benefit from the AI boom. IBM recorded third-quarter revenue of $16.33 billion, beating analysts' average estimate of $16.09 billion, according to data compiled by LSEG. The company's adjusted profit of $2.65 per share for the September quarter also came in above estimates of $2.45. The software segment grew 10% to $7.21 billion, beating estimates. Big Blue also saw strong demand for its latest mainframe – an iteration of a high-performance computer- following a three-year cycle for its previous version. The new mainframe, which is powered by chips specialized for AI applications, is being widely used by the financial industry, allowing for the maintenance of strict data residency and encryption rules as they work on adopting AI tech, CFO Jim Kavanaugh told Reuters. "Addressing client pain points, around AI, around sovereignty … that is driving the client buying behavior overall." The infrastructure segment, housing its mainframe, saw revenue rise 17% to $3.56 billion in the quarter. However, IBM's AI book of business grew to $9.5 billion, up $2 billion from the second quarter, but did not include mainframe sales. Revenue and bookings from consulting made up about $7.5 billion of the book, which combines bookings and actual sales across various products, Kavanaugh said. Consulting revenue grew about 3% to $5.32 billion, as clients prioritized spending on big-ticket AI-linked consulting projects. IBM also raised its outlook for the current fiscal year, expecting revenue to grow more than 5% at constant currency, up from its prior forecast of at least 5% growth. (Reporting by Arsheeya Bajwa; Editing by Maju Samuel)

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By Akash Sriram and Abhirup Roy (Reuters) -Tesla is expected to post a surge in third-quarter results later on Wednesday, thanks to U.S. buyers rushing to take advantage of an expiring $7,500 federal electric vehicle tax credit. But investors and analysts may be more focused on Chief Executive Elon Musk's outlook, including whether new, cheaper versions of its Model 3 and Model Y Tesla can keep U.S. customers buying and attract new ones in Europe and Asia.  The new trims – called Standard – are $5,000 to $5,500 cheaper than their predecessors as Tesla shrank the battery, switched to a less-powerful motor and stripped out myriad features – from rear touchscreens to seat-back pockets. The company also temporarily has slashed lease prices on the higher-priced Premium versions. The cheaper Standard variants as well as Tesla's offers and discounts to stave off competition globally throughout the year have pressured the company's once-enviable margins, worrying investors. Sales of Tesla's aging lineup declined for the first time last year and analysts expect an 8.5% fall this year, in part because of Musk's far-right political rhetoric. The results are expected after 4 p.m. EDT and a conference call with analysts at 5:30 p.m. EDT. ROBOTAXIS ROLLOUT UPDATE Musk also will be expected to update on robotaxis, the project that he sees as the key to Tesla's next stage of growth. Musk has said Tesla's robotaxis will serve half the population of the U.S. by year-end. "What are the relevant metrics – fleet size, cumulative miles, and territories – you expect in Q4 and 2026?" was the top question for the CEO in a note by analysts at Cantor Fitzgerald on Tuesday.  While Musk has pivoted Tesla's focus to robotics and artificial intelligence and much of the company's $1.4 trillion valuation hangs on that bet, most of its current revenue and profit comes from vehicle sales.  Tesla shares, which were down 1% on Wednesday, have risen nearly 10% this year, propelled by a record-breaking $1 trillion pay package for Musk that the board proposed last month. The stock is still largely among the laggards in the 'Magnificent 7' group of mega-cap stocks. Analysts expect Tesla to report a revenue of $26.24 billion in the quarter ended September, up 4.2% from a year earlier, according to data compiled by LSEG. Tesla also will report on whether regulatory credits that it sold to makers of gasoline-powered cars to satisfy pollution standards have faded away after policy changes by the Trump administration. Automotive gross margin, excluding regulatory credits, is estimated to be 15.6%, according to 19 analysts polled by Visible Alpha. That is lower than 17.05%, a year earlier. (Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; editing by Peter Henderson and Stephen Coates)

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By Foo Yun Chee BRUSSELS (Reuters) -Apple was hit with a complaint to EU antitrust regulators by two civil rights groups on Wednesday over the terms and conditions of its App Store and devices for allegedly breaching landmark rules aimed at reining in Big Tech. The joint complaint by Article 19 and Germany's Society for Civil Rights to the European Commission could pose yet another headache for Apple, which was fined 500 million euros ($583 million) in April for violating the Digital Markets Act. Apple did not immediately respond to a request for comment. The EU executive, which acts as the bloc's competition enforcer, said it was aware of the submission. "Third party contributions are very important for the effective enforcement of the DMA," a Commission spokesperson said. "We are already looking into (some of) those issues, as we are currently seeking feedback from market participants in relation to Apple business terms and we are regularly supervising gatekeepers' compliance." The complaint, not previously reported, was shared with Reuters ahead of its publication. The DMA sets out a list of dos and don'ts for Big Tech firms aimed at allowing smaller rivals entry into markets dominated by the largest companies and giving users more choice. The complaint targets Apple's business terms and conditions for its App Store, iOS and iPadOS operating systems, saying that these prevent and impede interoperability for small businesses with Apple devices. It also takes aim at restrictions on the installation and use of third-party software apps and app stores which it said harm business users and end users in breach of the DMA. The civil rights groups singled out a stand-by letter of credit (SBLC) of 1 million euros required from developers who want to develop apps for distribution in Apple's App Store or who want to install a third-party app store as a native app in Apple's iOS and iPadOS. "A 1,000,000 euro SBLC can impose a recurring annual cost and collateral requirements that many SMEs cannot meet," said the 16-page complaint seen by Reuters. The groups urged the Commission to fine Apple. DMA penalties can be as much as 10% of a company's global annual revenue. ($1 = 0.8575 euros) (Reporting by Foo Yun Chee; Editing by Joe Bavier, Kirsten Donovan)

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By Greg Bensinger MILPITAS, California (Reuters) -In its relentless drive to bring everyday items to customers faster, Amazon has shifted expectations from two-day delivery to same-day and even within an hour. Now, with robots, artificial intelligence and even eyewear, it is working to pare seconds off each delivery. On Wednesday, Seattle-based Amazon showed off advanced eyeglasses for delivery workers for the first time publicly after Reuters exclusively reported the company was developing them last year. Known internally as Amelia, the glasses have a small screen that gives turn-by-turn directions, scans package codes and takes photos for proof of delivery. The glasses could replace the bulky handheld Global Positioning System devices drivers use today and give helpful navigation tips like which way to turn when leaving an apartment elevator or how to avoid an aggressive dog at a customer’s home. The glasses rely on a paired controller placed in a driver’s vest and Amazon solved the challenge of battery life by having swappable battery packs, the company said. The announcements made at Amazon’s annual “Delivering the Future” logistics event are part of the firm’s particular focus on the "last 100 yards," which contribute to the expensive final steps in a delivery’s journey to customers. Last year, it unveiled a delivery van scanner to direct drivers to packages for each stop by shining a green spotlight on them, shaving seconds off time usually spent reading labels. And in June, it showed reporters new digital maps that gave far more detail about neighborhoods, building shapes and obstacles, than, say, Google Maps. Beryl Tomay, Amazon transportation vice president, said hundreds of delivery drivers had already tested the glasses along their routes. "It reduces the need to manage a phone and a package," Tomay said at the event. "It helps them stay at attention, which enhances their safety." It was not immediately clear how Amazon planned to ensure the glasses are used by drivers, most of whom are contract employees.   Also on Wednesday, the online retailer showed off a robotic arm that it says can work in concert with warehouse employees picking items off shelves and sorting them for faster and more accurate order fulfillment. Amazon claimed the robot, dubbed Blue Jay, could reduce injury rates and work in a smaller space than equivalent robots that previously required three separate stations. The robot is in use already at a warehouse in South Carolina, Amazon said, and it plans to roll it out to more facilities in the coming months, particularly what are known as sub-same-day sites focused on delivery in a few hours or less. Additionally, Amazon said it plans to deploy an artificial intelligence system at warehouses, starting at one in Tennessee, that can help manage operations at a high level, to prevent gridlock and other challenges that can slow operations. It was not immediately clear how Amazon planned to institute the software or who would have access to it. "We now have a tool to analyze all the site data as it happens," said Tye Brady, chief technologist of Amazon robotics, at the event on Wednesday. "When it's fully implemented, we will be able to help operators with their daily planning." He said the company planned to offer the software across its warehouse network, but did not provide details on how it would be rolled out. The company's expansion of warehouse robots is expected to reduce its U.S. hiring by 160,000 workers over the next two years, the New York Times reported on Tuesday. Amazon said it planned to hire 250,000 temporary workers for the holiday season. Amazon shares were down 2.4% to $216.78 on Wednesday. It is the only one among the so-called Magnificent Seven technology stocks to record a year-to-date decline.  (Reporting by Greg Bensinger; Editing by Lisa Shumaker and Nia Williams)

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