Tag: Google

Google Unveils Custom Axion Chips in Cloud Computing Arms Race

Posted on by slightbourne@noblecapitalmarkets.com

In the cloud computing battle among tech titans like Amazon, Microsoft and Google, the latest salvo comes from the internet search giant. Google (GOOG, GOOGL) has unveiled its custom Axion chips based on Arm (ARM) designs to try to reduce costs, boost performance for AI workloads, and cut reliance on outside vendors like Nvidia (NVDA).

The move puts Google in the company of rivals who have rolled out their own in-house processors in recent years. Amazon introduced its Graviton Arm chips in 2018, while Microsoft launched Arm-based chips just last November. Even smaller player Alibaba got into the custom silicon act back in 2021.

The economics have become compelling for the hyperscalers to design their own chips instead of relying on x86 processors from Intel (INTC) and AMD (AMD). Amazon has claimed its Graviton chips can provide up to 40% better price/performance compared to standard x86 instances. Google says its Axion chip offers 30% better performance than the fastest general-purpose Arm cloud VMs and a 50% boost over comparable x86 VMs. The chips also provide around 60% more energy efficiency than x86 instances for certain workloads.

Arm’s instruction set architecture allows for more compact and efficient chip designs compared to the complex x86 architecture. While Arm chips have traditionally been used in smartphones and other mobile devices, the cloud titans are now tapping Arm to power their data center workloads. The parallel computing performance of Arm chips also gives them an edge for AI applications which can leverage massive parallelism.

For Google, the new Axion CPUs are just the latest addition to its in-house chip portfolio. The company has designed its own Tensor Processing Units (TPUs) for years, with the latest Cloud TPU v5P unveiled in December being a powerhouse for AI training and inference. It has partnered with Broadcom (AVGO) to build the TPUs, with Broadcom’s CEO Hock Tan boasting last month that Google had bought “a ton” of chips from them.

Google plans to initially use the Axion CPUs for its internal workloads like the YouTube ads business, BigTable and Spanner databases, and BigQuery analytics before making them available externally. Companies like Snap (SNAP), Datadog, Elastic and OpenX are among the initial customers interested in tapping Google’s Arm silicon.

While Google’s cloud business still lags behind Amazon Web Services and Microsoft Azure, representing just 7.5% cloud infrastructure market share in 2022 compared to 62% for the leaders, every bit of performance and cost advantage helps. Custom Arm chips could give Google Cloud a pricing edge to win over more customers in the relentless cloud wars.

For investors, the Axion chips are worth watching as part of Google’s broader strategy to compete more effectively against Amazon and Microsoft in the rapidly growing cloud computing market. While Google generates over 75% of revenue from advertising currently, cloud is growing faster and is already profitable. Any assets like custom silicon that can help Google grab more cloud market share could pay off for the company and its shareholders over time.

The chip ambitions also have implications for other players in the semiconductor space like Arm, Nvidia, AMD and Intel. As cloud heavyweights increasingly go their own way with custom designs, it potentially limits their future chip demand from traditional providers. Arm could be a bright spot as its instruction set architecture becomes more embedded in data centers. But greater in-house chip efforts cast a cloud over prospects for current data center CPU vendors.

Apple’s AI Ambitions Could Involve Major Partnerships

Posted on by slightbourne@noblecapitalmarkets.com

Apple is actively exploring partnerships with tech giants like Google and OpenAI as it accelerates its artificial intelligence efforts, according to a recent report from Bloomberg. The iPhone maker is said to be in “active negotiations” with Google to integrate the search giant’s Gemini generative AI into future Apple products and services.

The potential deal would give Apple access to Google’s advanced AI capabilities, allowing it to rapidly implement features like AI-powered text and image generation into offerings like iOS, Siri, and its productivity apps. Bloomberg reports that Apple has also considered integrating OpenAI’s viral ChatGPT model, highlighting the company’s willingness to leverage external AI expertise.

This openness to AI partnerships represents a strategic shift for the traditionally vertically integrated Apple. CEO Tim Cook confirmed earlier this year that the company is devoting “tremendous time and effort” to generative AI, with plans to release AI-powered features to consumers “later this year” with iOS 18. However, Apple’s in-house AI development efforts are reportedly lagging rivals.

While Apple employees have been testing an internal AI assistant called “Apple GPT,” the company’s generative AI tech is described as less capable than that of Microsoft, Google, and others. A partnership would allow Apple to utilize cutting-edge cloud AI while its own large language model, codenamed “Ajax,” continues development.

For Google, scoring an AI integration deal with its chief mobile rival would be a coup – expanding its AI’s reach to over 2 billion active iPhones globally. It could also strengthen Google’s position amid intensifying regulatory scrutiny over its lucrative deals making Google Search the default on Apple devices.

The two tech titans already have an $18 billion annual agreement in place for Google to be the preloaded search engine on iPhones and iPads. Adding AI services could make this partnership even more lucrative and harder for regulators to disentangle.

However, the deal risks being perceived as an admission from Apple that its AI capabilities lag behind Google’s, at least for now. Apple prides itself on cutting-edge silicon and integrated hardware/software experiences. Relying on Google’s AI could undermine its position as an innovation leader.

Apple may aim to provide on-device AI through its own models, while tapping Google’s cloud AI for more intensive generative tasks like text prompts or image creation. It’s already taken this hybrid approach with other services like Maps and web search.

Another complicating factor is Apple’s historical stance on privacy and protecting user data. Integrating Google’s AI could raise concerns about data sharing and usage policies that differ from Apple’s privacy-centric approach.

While the negotiations underscore Apple’s AI ambitions, many details remain unclear – including potential branding, business terms, technical implementation, or whether a deal will even be reached. Bloomberg reports any announcement is unlikely before Apple’s Worldwide Developers Conference in June.

As the AI Arms race intensifies, Apple is evidently willing to consider previously unorthodox partnerships and concessions to avoid falling behind rivals in this revolutionary technological domain. How it balances AI capabilities with its core principles and ultimately delivers its AI-powered user experiences will be crucial to maintaining its industry-leading device ecosystem.

Google Settles Lawsuit Over Alleged Secret Tracking – What It Means for Tech

Posted on by slightbourne@noblecapitalmarkets.com

Alphabet’s Google has reached a preliminary settlement in a major class action lawsuit accusing the tech giant of secretly tracking users’ browsing activity, even in “private” mode. The lawsuit alleges Google violated privacy laws by monitoring internet usage through analytics, cookies, and other means without user consent.

While settlement terms are undisclosed, the case spotlighted concerns over data privacy and transparency in the tech industry. As regulators increasingly scrutinize how companies collect and use personal data, lawsuits like this could spur meaningful change across Silicon Valley.

The Potential $5 Billion Settlement Underscores Privacy Risks

Filed by consumers in 2020, the lawsuit sought at least $5 billion in damages for millions of Google users. The plaintiffs alleged Google violated wiretapping and privacy laws by tracking their web activity after they enabled private modes in browsers like Chrome. By collecting data on browsing habits, interests, and sensitive topics searched, Google allegedly created an “unaccountable trove of information” without user permission.

Though Google disputed the claims, the judge rejected the company’s motion to dismiss last August. This allowed the case to move forward, leading to mediation and a preliminary settlement just before the scheduled 2024 trial. The multibillion dollar price tag highlights financial liability over privacy concerns. As data rules tighten worldwide, lawsuits and settlements like this could pressure tech firms to improve data practices.

How Private is Private Browsing? The Murky Line Between Tracking and Targeting

At issue is whether Google made legally binding commitments not to collect user data during private browsing sessions. The plaintiffs argued that policies, privacy settings, and public statements implied limits on tracking activity – which Google then violated behind the scenes. Google may contend that it needed analytics and user data to improve services and target ads.

This speaks to an ongoing debate over data use in the tech industry. Companies like Google and Facebook rely on customer data for ad targeting, which generates immense revenue. However, consumers often don’t realize how much of their activity is monitored and monetized. Laws like Europe’s GDPR require transparency in data collection, aiming to close this gap. As regulators in the U.S. also update privacy rules, pressure for change is growing.

Potential Fallout – Changes to Data Practices or Business Models?

While details remain unannounced, the Google settlement will likely require reforms and possibly oversight to the company’s data practices. Some analysts think damages could reach into the billions given the massive class size. Whether Google also modifies its ad tracking and targeting is less clear but plausible given the liability over those practices.

More broadly, the lawsuit may accelerate shifts in how tech companies handle user data. Increasingly, consumers demand greater transparency and control over their personal information. New laws also dictate stricter consent requirements for tracking users across sites and devices. All this affects the fundamentals of ad-based business models dominant across internet platforms.

Of course, the prime value tech giants derive from users is in data collection and analysis abilities. Reform enforced by lawsuits, regulation, or settlements will cut into this advantage. As data gathering, retention, and usage get reined in over privacy concerns, tech firms lose a key asset. In response, some companies are developing alternative revenue streams based less on collecting personal data and more on subscription services. How far this trend goes depends on how seriously privacy risks are addressed industry-wide.

Looking Ahead – Tech Faces a Reckoning Over Data Ethics

Though appeasing users worried over privacy, the Google settlement also shows how engrained user data is in delivering online products and experiences. Reforming these practices while preserving free, quality services will require balancing competing interests. As U.S. regulators catch up with privacy laws proliferating worldwide, expect thorny debates over this balance.

Lawsuits casting light on data abuses will continue playing a pivotal role in driving change. With landmark suits against tech giants like Google and Facebook working through courts, no company is immune. Protecting user privacy is paramount going forward in the digital economy. How Silicon Valley adapts its business models and justifies its data dependence will shape trust in these powerful platforms. If companies fail to convince consumers their privacy matters, backlash and regulation could fundamentally disrupt the tech sector for years to come.

U.S. Justice Department Takes On Google Search Monopoly in Landmark Trial

Posted on by slightbourne@noblecapitalmarkets.com

The U.S. government is launching a monumental legal challenge against Google in a bid to curb the technology giant’s dominance in internet search. A federal antitrust trial begins Tuesday in Washington D.C. where the Justice Department and a coalition of state attorneys general will argue that Google improperly wields monopoly power.

At the heart of the case are allegations that Google unlawfully maintains its position in the search market through exclusionary distribution agreements and other anticompetitive practices. Google pays billions annually to companies like Apple and Samsung to preset Google as the default search engine on smartphones and other devices. This boxes out rivals, according to prosecutors.

The government contends that Google’s actions have suffocated competition in the critical gateway to the internet, enabling the company to extend its grasp with impunity. Google counters that its search supremacy is earned by offering a superior product that consumers freely choose, not due to illegal activity.

But smaller search upstarts like DuckDuckGo allege that Google abuses its might to hinder their ability to gain users. At stake in the trial is nothing less than how the power of dominant tech platforms is regulated and how competition – or lack of it – shapes the internet as we know it.

The verdict could lead to sweeping changes for Google if found guilty of violating antitrust law. Potential sanctions range from imposed restrictions on its business conduct to structural reorganization of the company. Fines could also be on the table.

Google’s practices echo the behavior that got Microsoft into hot water in the 1990s. That landmark case saw the government successfully prove Microsoft leveraged its Windows monopoly to quash competition. Google is accused of similar monopolistic plays via its search engine dominance.

The Google antitrust trial is slated to last around three months. Testimony from Google CEO Sundar Pichai and executives of tech firms like Apple is anticipated. The federal judge overseeing the case will determine if Google’s undisputed leadership in search equates to unlawful monopoly status.

The verdict stands to fundamentally shape Google’s role in internet search and potentially alter business practices of other dominant technology companies. It represents the most significant legal challenge to Silicon Valley power in the 21st century.

Take a look at Information Services Group, a leading global technology research and advisory firm.