Nvidia Heralds Advent of AI Factories

Chip designer and software provider Nvidia reported a 126% increase in revenue for the year ending January 28th to 60.9 billion US dollars.  Data centre revenue for the fiscal 2024 year was 47.5 billion dollars, more than tripling from the prior year. "The world has reached the tipping point of new computing era," Nvidia said. "The 1 trillion dollar installed base of data centre infrastructure is rapidly transitioning from general purpose to accelerated computing. ...At the same time, companies have started to build the next generation of modern data centres, what we refer to as AI factories, purpose built to refine raw data and produce valuable intelligence in the era of generative AI." 

In the fourth quarter, data centre revenue was up 409% year-over-year, driven by the NVIDIA Hopper GPU computing platform, along with InfiniBand end-to-end networking, the company added.

Nvidia said the supply of Hopper architecture products is improving, but it expects its next-generation products to be "supply constrained" as demand far exceeds supply. Fourth quarter data centre growth was driven by both training and inference of generative AI and large language models across a broad set of industries, use cases and regions, Nvidia noted. Source: Nvidia collateral

Apple Points to New Growth Opportunities

Apple said it is now serving an installed base of more than 2.2 billion active devices. For the quarter ending December 30, 2023, it reported services revenue of 23 billion US dollars, up 11% year-over-year, despite there being one less week in the quarter.  Apple said it achieved all-time revenue records across advertising, cloud services, payment services and video, as well as December quarter records in App Store and AppleCare. 

Apple also said its paid subscriptions, which now number more than one billion, showed strong double-digit growth in the quarter.

Speaking the day before the launch of it new Vision Pro headset, Tim Cook, CEO of Apple, said: "We are incredibly excited about the enterprise opportunities with Vision Pro.... Walmart has a very cool merchandising app. There are firms that are doing collaboration -- design collaboration apps. There are field service applications. Really all over the map, there are applications that are for control centre, command centre kind of things. SAP has really gotten behind it and, of course, SAP is in so many of companies." Source: Apple earnings call transcript via Seeking Alpha

Amazon Talks Up Gen AI Opportunity

Amazon believes demand for generative AI (gen AI) is a major opportunity for its cloud business AWS. It has identified three distinct layers in the gen AI stack, "each of which is gigantic and [in] each of which we're deeply investing."

At the bottom layer, customers, who are building their own models, run training and inference on specialised chips. Amazon says customers using its AI chips include Anthropic, Airbnb, Hugging Face, Qualtrics, Ricoh and Snap.

In the middle layer, companies seek to leverage an existing large language model, and customise it with their own data, as a managed service. Amazon said that thousands of customers are already using its new Bedrock proposition in this layer.

The top layer of the stack is the application layer. Amazon has launched Amazon Q, a gen AI application that is intended to be an expert on AWS, and can write, debug and test code, and can also query customers’ various data repositories and answer questions, summarise the data, conduct a coherent conversation, and take action. Source: Amazon earnings transcript

Strong Sales of Meta Smart Glasses

The Ray-Ban Meta smart glasses are off to a very strong start, in terms of both sales and engagement, Mark Zuckerberg, CEO of Meta, told financial analysts.  "Our partner EssilorLuxottica is already planning on making more than we'd both expected due to high demand. Engagement and retention are also significantly higher than the first version of the glasses. The experience is just a lot better with Meta AI in there, as well as a higher resolution camera, better audio, and more. We also have an exciting roadmap of software improvements ahead, starting with rolling out multimodal AI and then some other really exciting new AI features later in the year."

Zuckerberg went on to argue that people are going to "want new categories of devices that let you frictionlessly engage with AIs frequently throughout the day without having to take out your phone and press a button and point it at what you want it to see. I think that smart glasses are going to be a compelling form factor for this."

He admitted that Meta had initially assumed that smart glasses would need to have full displays, support holograms and deliver a sense of presence to become a mainstream product. But "now it seems quite possible that smart glasses that have AI assistants built in will be the killer app, and that the holograms and sense of presence will come later." 

At the same time, Meta reported that its new virtual reality headset, the Quest 3, has got off to "a strong start". Zuckerberg said he expects the Quest 3 to continue to be the most popular mixed reality device (despite the launch of Apple's Vision Pro headset). Source: Meta Q4 earnings call transcript

Regulations Still Require Remote Monitoring of Driverless Cars

Although Baidu has trumpeted “fully driverless vehicles” in China, the Financial Times reported that a visit to the group’s autonomous driving centre in Beijing in June found each robotaxi was remotely monitored by a human sitting in an arcade-like driving station ready to intervene. The monitoring is required by regulators, according to the newspaper, which quoted consultancy Bain as predicting that the current scale of commercial trials means China is tracking towards a “tipping point” of around 2027 for the key technologies to be commercially viable at a large scale. 

Bain expects a similar timeframe for completing the legal framework for liability and insurance and improving the accompanying road and telecoms infrastructure. The Financial Times said the ability of companies to tap into cities’ networks of roadside cameras, traffic lights and other inner-city infrastructure, as well as widespread 5G coverage and digital mapping, is already underpinning industry confidence in China. 

However, a global survey of autonomous vehicle executives by McKinsey found that expectations for commercially-viable robotaxis in the Asia-Pacific region have been extended by a year to 2029 since the previous survey in 2021. (see graphic). 

The Financial Times reported that Waymo, part of the Alphabet group, refused to provide a specific number for how many people remotely monitor each of its self driving cars, which are being piloted in several US cities. However, the US group stressed that its fully autonomous cars were “responsible for making every driving decision on the road and do not rely on a human driver, either in the car or remotely”. 

Sources: Financial Times article and McKinsey report