Singapore-headquartered AI cloud provider Sustainable Metal Cloud (SMC) is set to expand globally, driven by fast-growing demand for its energy-saving technology. CEO and co-founder Tim Rosenfield announced plans to extend operations to EMEA (Europe, Middle East, and Africa) and North America in response to client demand. Currently, SMC operates “sustainable AI factories” in Australia and Singapore, with new launches planned in India and Thailand.
Partnering with AI chip giant Nvidia, SMC uses over 1,200 of Nvidia’s high-end H100 AI chips in Singapore to run open-source models like Meta’s Llama 2. Unlike most data centres that rely on air cooling technology, SMC employs immersion cooling, submerging Dell servers fitted with Nvidia GPUs in a synthetic oil called polyalphaolefin. The following method reduces energy consumption by up to 50% compared to traditional air cooling.
The International Energy Agency (IEA) anticipates a tenfold increase in AI demand compared to 2023, with global data centre electricity consumption expected to exceed 1,000 terawatt-hours by 2026. Sustainable Metal Cloud is currently raising $400 million in equity and $550 million in debt to support its expansion, according to sources. That move aligns with the increasing environmental concerns impacting Singapore’s data centre growth and highlights the importance of sustainable technology in meeting future energy demands.
Google’s parent company stocks fell by over 3% on Wednesday amid concerns that rising investments in AI infrastructure could squeeze margins and that YouTube is facing stiff competition for ad dollars. The Google parent company saw its capital expenditure rise to $13.2 billion in the second quarter, exceeding expectations as it invests heavily in the infrastructure needed to support generative AI services and compete with Microsoft.
While Alphabet has been cutting costs through layoffs to protect profitability, analysts noted that seasonal hiring of fresh graduates and the earlier-than-usual Pixel launch would impact margins in the third quarter. Additionally, YouTube’s ad sales growth slowed to 13% in the second quarter from nearly 21% in the first quarter, as it grapples with tough year-on-year comparisons and competition from Amazon in the online video ad market.
Despite these challenges, many analysts remain positive about Alphabet, citing its AI efforts driving up cloud revenue and minimal disruption to Search revenue from its AI overviews. Cloud computing services revenue rose by 28.8%, outpacing expectations and signalling robust enterprise spending. Analysts believe Alphabet’s AI advancements position it as a market leader, and 25 brokerages have raised their price targets for the stock. Their failed Wiz acquisition echoes the company’s ambitions to expand their market share and reclaim their place at the top.
Alphabet’s stock, which has gained about 30% this year due to the AI stock rally, is set to lose around $60 billion in market value. However, its 12-month forward price-to-earnings ratio of 22.2 remains competitive compared to Nvidia’s 38.6, indicating continued confidence in Alphabet’s long-term growth prospects.
Wiz, founded in Israel and now headquartered in New York, is known for its cloud-based cybersecurity solutions powered by AI. With about $350 million in revenue in 2023 and serving 40% of Fortune 100 companies, Wiz has quickly become one of the fastest-growing software startups globally. Recently, Wiz raised $1 billion in a funding round, valuing the company at $12 billion.
The potential acquisition comes amid increased regulatory scrutiny of large tech companies under President Joe Biden‘s administration. Despite the investigation, the technology sector has seen a surge in mergers and acquisitions, with tech deals jumping over 42% year-on-year to $327.2 billion in the first half of the year. Alphabet’s interest in Wiz follows its decision not to pursue a takeover of online marketing software company HubSpot.
Chinese tech companies, from industry giants to ambitious startups, converged at the World AI Conference in Shanghai to showcase their latest innovations and express strong support for the country’s AI sector despite US sanctions. Over 150 AI-related products and solutions are being exhibited, with notable foreign firms like Tesla and Qualcomm also participating. SenseTime, previously known for facial recognition, unveiled its most advanced large language model, SenseNova 5.5, positioning it as a rival to OpenAI’s GPT-4.
Despite challenges posed by US sanctions limiting access to advanced chips, executives at the conference expressed confidence in China’s AI sector’s resilience. Zhang Ping’an, head of Huawei’s cloud computing unit, emphasised the need to innovate in cloud computing to overcome chip shortages. Similarly, Liu Qingfeng, chairman of Iflytek, highlighted that Chinese-developed large language models could rival global standards, stressing the importance of having independently developed and controlled AI technologies.
Robin Li, CEO of Baidu, urged the AI industry to focus on practical applications rather than just developing large language models, which require significant computing power and AI chips. Li stressed that foundational models, whether open-source or closed-source, only hold value with applications. Such a sentiment was echoed by other industry leaders, emphasising the need for innovation and practical use cases in AI development.
Nvidia is facing potential charges from the French antitrust regulator over allegations of anti-competitive behaviour, marking an enforcement agency’s first action against the chip giant. The scrutiny follows raids conducted last September in the graphics cards sector, explicitly targeting Nvidia as part of a broader inquiry into cloud computing. The company’s prominence in AI and graphics chips, boosted by the popularity of applications like ChatGPT, has drawn regulatory attention in Europe and beyond.
While Nvidia and the French authority declined to comment, the European Commission is unlikely to expand its current review, focusing instead on the French investigation. Concerns highlighted by the French watchdog include Nvidia’s CUDA chip programming software, essential for accelerated computing using GPUs, and its investments in AI-centric cloud providers like CoreWeave. These legal developments represent provident measures for potential risks associated with market dependence and competition in the rapidly evolving AI sector.
Why does it matter?
Under French antitrust rules, companies in violation could face fines of up to 10% of their global annual turnover, though concessions can mitigate penalties. Simultaneously, the US Department of Justice is leading an investigation into Nvidia, which is part of the broader scrutiny of Big Tech alongside the Federal Trade Commission. Nvidia’s regulatory challenges reflect worldwide scrutiny over its market dominance and strategic expansions in critical technology sectors.
Alibaba Cloud has decided to close down its data centre operations in Australia and India, which marks a strategic shift in its global infrastructure strategy. Despite previous assurances of continuity, the Chinese cloud giant confirmed the closure plans, citing a redirection of investments towards Southeast Asia and Mexico.
The decision impacts customers in Australia and India, who have been notified of the shutdown deadlines: 30 September for Australia and 15 July for India. After these dates, data stored in these regions will no longer be accessible, prompting Alibaba Cloud to advise customers to migrate to alternative data centres.
Alibaba Cloud’s move reflects broader geopolitical considerations. In Australia, where major global cloud players like AWS, Azure, and Google dominate, the decision comes amid cooling public sentiment towards Chinese investments. Meanwhile, despite its robust economic growth in India, strained bilateral relations between Beijing and Delhi likely influenced Alibaba Cloud’s exit strategy.
In contrast, Alibaba Cloud is eyeing expansion in Southeast Asia and Mexico, where it sees potential growth opportunities aligned with its data centre capabilities. The realignment also underscores Alibaba Cloud’s focus on optimising its global data centre footprint to maximise operational efficiency and market relevance.
The shift from Australia and India underscores Alibaba Cloud’s strategic focus on regions with favourable geopolitical and market conditions while consolidating its presence in high-growth markets like Southeast Asia and Mexico.
Amazon’s AWS, the leading global cloud computing provider, is intensifying efforts to draw the public sector into the realm of AI amidst fierce competition with Microsoft and Google in the generative AI domain. The initiative aims to demonstrate AI’s potential to enhance public services across health, security, and non-profit sectors, leveraging technologies like ChatGPT to streamline operations and improve outcomes.
Over two years, AWS has allocated a substantial $50 million fund to support public sector entities in exploring AI applications, offering cloud computing credits, training, and technical expertise to kickstart innovative projects. Currently serving thousands of government agencies, academic institutions, and nonprofits worldwide, AWS seeks to transition AI concepts into practical solutions that can effectively address public sector challenges.
Dave Levy, AWS’s vice president overseeing global public sector operations, highlighted the importance of moving from conceptualisation to implementation in public sector AI projects, underscoring the need for robust support to navigate complexities and achieve meaningful impacts. The push comes amid heightened competition as Microsoft and Google Cloud aggressively pursue public sector AI adoption, aiming to leverage vast datasets and AI capabilities to revolutionise service delivery and operational efficiency.
Amazon’s AWS remains committed to addressing challenges such as data privacy, security, and ethical considerations surrounding AI adoption in the public sector, emphasising rigorous security protocols and readiness for large-scale deployment.
Why does it matter?
As generative AI continues to evolve, AWS’s strategic focus on public sector adoption underscores its belief in AI’s transformative potential, aiming to lead the charge in integrating advanced technologies into governmental and non-governmental organisations worldwide.
The Israel Innovation Authority has announced plans to launch a tender next month to establish a supercomputer dedicated to training domestic large language models (LLMs). Announced at an event at Tel Aviv University, CEO Dror Bin explained this move was to ensure the country remains a global leader in AI technologies.
“When a high tech company or researcher wants to train a large model they have to buy time in the cloud (since), there is no local data centre with significant amount of GPUs (graphic processing units) that can train those models here,” he said.
Israel’s first supercomputer, built by Nvidia, completed its initial construction phase in November 2023, with the final phase slated for completion in 2024. However, it seems this new supercomputer will be more oriented towards industry and academia. “The supercomputer will be available for researchers and companies at lower than market cost,” Bin said.
Bin also presented research where he noted that the government is budgeting approximately $250 million (or 1 billion shekels) on a national AI programme, 60% of which will be used in 2024 alone. He had called for more investments in the sector earlier this month. Intel then announced it was halting the construction of a multi-billion dollar chip factory in the country. However, the same study revealed that Israel ranks third globally in this sector, behind the UK and US. This is corroborated by research done by Accel, where it ranked 3rd by funding and 4th by quantity of GenAI startups, behind Germany.
According to India‘s markets regulator, Infosys CEO Salil Parekh has settled charges related to insufficient internal controls to prevent insider trading during a 2020 contract. Parekh agreed to pay approximately $30,000 to settle the charge, which stemmed from a contract where Infosys provided a cloud-based record-keeping platform to US financial firm Vanguard.
The Securities and Exchange Board of India (SEBI) stated that Infosys failed to recognise certain unpublished price-sensitive information (UPSI) as such. Though SEBI did not specify the information, it held Parekh accountable for the lapse. In response, Infosys has implemented an internal policy to identify UPSI and now seeks approval from the board and audit committee for such information.
Additionally, Infosys has started breaking down the total contract value of deals into average revenue per annum for comparison with its annual revenue. The initiative aims to enhance transparency and prevent future lapses in internal controls.
Oracle has cautioned investors that a potential US ban on TikTok could negatively impact its financial results. A new law signed by President Biden in April could make it illegal for Oracle to provide internet hosting services to TikTok unless its China-based owners meet certain conditions. Oracle warned that losing TikTok as a client could harm its revenue and profits, as TikTok relies on Oracle’s cloud infrastructure for storing and processing US user data.
Analysts consider TikTok one of Oracle’s major clients, contributing significantly to its cloud business revenue. Estimates suggest Oracle earns between $480 million to $800 million annually from TikTok, while its cloud unit generated $6.9 billion in sales last year. The cloud business’s growth, driven by demand for AI work, has boosted Oracle’s shares by 34% this year.
Why does it matter?
The new law requires TikTok to find a US buyer within 270 days or face a ban, with a possibility of extension. TikTok, which disputes the security concerns, has sued to overturn the law. It highlights its collaboration with Oracle, termed ‘Project Texas,’ aimed at safeguarding US data from its Chinese parent company, ByteDance. Despite this, Oracle has remained discreet about its relationship with TikTok, not listing it among its key cloud customers and avoiding public discussion.
