Tech

The U.S. government is reportedly exploring equity stakes in quantum computing firms in exchange for federal funding, signaling a strategic push to secure leadership in this critical technology. While denied by the Commerce Department, the initial report spurred market gains for companies like IonQ, D-Wave, and Rigetti. This potential move aligns with Washington’s trend of acquiring stakes in companies deemed vital to national security, reflecting concerns about technological competition, particularly with China, and the need to bolster domestic capabilities in strategic sectors like rare earths and semiconductors.

SAP is making a big push in enterprise AI, CEO Christian Klein cites AI as key to customer deals. Q3 cloud backlog surged 23% to €18.8B, showing demand for AI-infused cloud services. While Q3 revenue rose 7% to €9.08B, it slightly missed estimates. Deutsche Bank maintains a positive outlook, but SAP is guiding towards the lower end of its cloud revenue forecast. Klein emphasizes focusing on practical AI applications and value creation, stressing the importance of real-world adoption. SAP aims to transform into an AI-first entity.

Alibaba is launching Quark AI Glasses, its first venture into AI wearables, powered by its Qwen large language model and Quark AI assistant. Pre-orders begin October 24th at 4,699 yuan (discounted to 3,999 yuan), shipping in December. Alongside, Alibaba introduces “AI Chat Assistant” in its Quark app, featuring photo editing, problem solving, and AI-assisted writing. This move signifies Alibaba’s push into consumer-facing AI, positioning it against competitors like Meta and Xiaomi in the smart glasses and digital assistant market.

Key morning headlines: Tesla’s earnings disappointed, prioritizing robotaxis and AI, triggering a share drop. Southwest Airlines and American Airlines reported strong earnings, contrasting Tesla’s struggles. The US imposed sanctions on Russian oil giants, causing prices to surge. Meta is cutting AI jobs amid superintelligence concerns. Starbucks workers are preparing for a strike vote over pay and working conditions, potentially impacting upcoming earnings.

New Jersey’s Attorney General is suing Amazon, alleging widespread discrimination against pregnant employees and workers with disabilities in its New Jersey facilities. The lawsuit claims Amazon denied reasonable accommodations, placed employees on unpaid leave, and retaliated against those seeking accommodations, violating state anti-discrimination laws since 2015. The state seeks damages, fines, and policy changes. Amazon denies the allegations, claiming it approves most accommodation requests. This case highlights growing concerns about Amazon’s labor practices and the balance between efficiency and worker well-being.

Tesla’s AI5 chip, crucial for its autonomous driving efforts, will be manufactured by Samsung in Texas and TSMC in Arizona. Tesla aims for “excess production” to power its data centers. While Tesla will still utilize Nvidia’s GPUs for AI model training, the AI5 chip, unveiled in 2024, represents a move towards vertical integration and custom silicon. Designed for Tesla’s specific needs, the AI5 aims for superior performance-per-dollar by removing legacy components, potentially challenging Nvidia’s dominance in the AI chip market.

Tesla’s Q3 revenue increased by 12% year-over-year, but net income plunged 37%. Price cuts to compete with Chinese EV manufacturers and a 50% surge in operating expenses, including AI investments, contributed to the decline. The market reacted negatively, with shares dipping in extended trading. This adds to broader market concerns, as other tech companies also reported disappointing earnings. Simultaneously, smaller altcoins faced a disproportionate impact during the recent crypto market correction, highlighting their increased risk.

Tesla’s Q3 earnings call left investors uneasy as Elon Musk avoided discussing key financial metrics like EV demand and tariff impacts. The stock dipped after-hours. Musk focused on future robotaxis and humanoid robots (Optimus), claiming they’ll revolutionize society. However, autonomous driving efforts remain limited. FSD adoption is low, and revenue lags. Musk also emphasized his control over the “robot army,” criticizing proxy advisors against his pay plan. Tesla’s brand perception and investor confidence appear to be declining.

Reddit has sued AI search engine Perplexity, data scraping service Oxylabs, AWMProxy, and SerpApi, alleging unauthorized scraping of user-generated content to train AI models. Reddit claims Perplexity illegally used its data, while Perplexity denies training models on Reddit content and accuses Reddit of “extortion.” This lawsuit, following a similar one against Anthropic, underscores the escalating battle over data rights in the AI era and the growing tension between content platforms and AI developers. The case could set precedents for data licensing and AI training practices.

Tesla’s Q3 earnings revealed a 12% revenue increase but a 37% net income drop due to price cuts to compete with Chinese EV makers and a surge in operating expenses driven by AI and R&D investments. This mixed performance and broader market concerns led to a dip in Tesla’s stock price. The market awaits upcoming earnings reports from tech giants to gauge overall market health. A recent crypto downturn disproportionately impacted smaller coins, highlighting the volatility of altcoins.