Bechtle has secured a significant framework agreement with the German government to provide up to 300,000 iPhones and iPads, all equipped with approved Apple security software. The contract, valued at €770 million ($835.22 million), will run until the end of 2027, according to an announcement on Thursday.
This deal aligns with Germany’s recent IT security law aimed at restricting untrustworthy suppliers and ensuring robust security measures for government officials. Bechtle’s partnership with Apple underscores the importance of reliable technology and security in government operations.
The agreement comes some time after Apple’s legal challenges in Germany, including an injunction from a German court over a patent case back in 2018. Despite these hurdles, the collaboration with Bechtle demonstrates Apple’s continued commitment to providing secure and trusted devices for essential functions within the public sector.
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.
Apple’s market share in China declined by two percentage points in the second quarter of 2024, dropping from 16% to 14%, according to data from market research firm Canalys. The drop highlights the challenges Apple faces in its third-largest market as it battles intensifying competition from rivals like Huawei.
Huawei saw a 41% year-on-year increase in smartphone shipments during the quarter, driven by the launch of its Pura 70 series. This surge has propelled Huawei back into the high-end smartphone segment, despite facing US sanctions that have restricted its access to global chip supplies. Huawei’s market share in China is projected to reach 19% in 2024, making it the top vendor.
Overall, China’s smartphone shipments rose by 10% in the quarter, with Vivo leading at 19% market share, followed by Oppo, Honor, and Huawei. Apple’s market share drop resulted in its ranking falling from third to sixth place. To combat the decline, Apple has ramped up its discounting efforts, offering significant price cuts on select iPhone models.
Despite being deemed a national security threat by American officials, Huawei’s sales have rebounded, demonstrating resilience in the face of U.S. restrictions. Analysts predict Huawei’s strong performance will continue, challenging Apple’s position in the Chinese market.
Google Cloud announced Wednesday that their AI service (Vertex) will use Mistral AI’s Codestral AI model, as the Google Cloud team explained.
“Today, we’re announcing that Google Cloud is the first hyper scaler to introduce Codestral – Mistral AI’s first open-weight generative AI model explicitly designed for code generation tasks — as a fully managed service.”, the company emphasised.
Mistral AI is a Paris-based startup firm founded in 2023 by former Google Deep Mind and Meta AI scientists. The partnership shows the quick growth of Mistral AI, considered the European alternative to Microsoft-backed OpenAI by many analysts.
Microsoft previewed Bing’s generative search, which is the answer to Google’s AI-powered search experiences. It is currently only available for a small percentage of users. It aggregates information from around the web and generates a summary in response to search queries.
Bing generative search will show information about the search and provide top examples, links, and sources showing where those details came from. As with Google’s similar AI Overviews feature, there’s an option to dismiss AI-generated summaries for traditional search from the same results page.
These AI-generated overview features have already generated concern, especially among publishers, as they threaten to cannibalise traffic to the sites from which they source their information. A study found that AI Overviews could negatively affect about 25% of publisher traffic due to the de-emphasis on article links.
Microsoft insists that it’s ‘maintaining the number of clicks to websites’ and ‘look[ing] closely at how generative search impacts traffic to publishers.’ According to Kyle Wiggers, senior reporter at TechCrunch, the company had no stats to back this commitment, alluding only to ‘early data’ that it’s choosing to keep private for the time being.
Microsoft has announced a partnership with Lumen Technologies to expand its capacity for AI workloads using LT’s network equipment. The tech giant, which has faced challenges due to data center infrastructure shortages, aims to meet the growing demand for AI services at its data centers.
In April, Microsoft revealed that the shortage of necessary infrastructure was limiting its ability to fully leverage the boom in AI technology. The company, which has invested heavily in OpenAI and its ChatGPT technology, continues to pour billions into cloud infrastructure to stay ahead of competitors like Google and Amazon.
As part of the deal, Lumen Technologies will switch to Microsoft’s Azure cloud services to reduce costs. The transition is expected to improve Lumen’s cash flow by over $20 million in the next year, aiding the company’s efforts to restructure its debt and achieve financial stability.
Why does this matter?
The collaboration comes as Microsoft also makes strides in AI development with projects like Vall-E-2, which achieves human-like speech, and its commitment to expanding AI in education in Hong Kong. These initiatives highlight Microsoft’s ongoing efforts to maintain its leadership in the rapidly evolving AI landscape.
Samsung is relaunching Bixby, its virtual assistant initially introduced in 2017. The new version will feature advanced AI capabilities, enhancing user interactions with generative AI powered by Samsung’s proprietary large language model. The announcement was confirmed by TM Roh, head of Samsung’s mobile division, who emphasised the improvements aimed at making Bixby a more natural conversational interface.
Samsung recently unveiled the Galaxy Z Fold 6 and Galaxy Z Flip 6, highlighting new AI tools designed to enhance the user experience. However, the upgraded Bixby was not mentioned during the latest Galaxy Unpacked event. Speculations suggest that the new Bixby may debut with the Galaxy S25 series early next year, though no specific timeline has been provided.
Reintroducing Bixby into a market dominated by Google Assistant, Amazon Alexa and Apple’s Siri is a significant challenge. Apple has also announced AI enhancements for Siri, intensifying the competition. Samsung aims to differentiate Bixby by seamlessly integrating it with its extensive product ecosystem, providing a unique user experience.
The timeline for Bixby’s AI upgrade remains unclear. Whether Samsung’s virtual assistant will reclaim its position among the top contenders in the market is uncertain. However, Samsung is determined to make a strong impact with its revitalised Bixby.
OpenAI’s AI safety leader, Aleksander Madry, is now working on a new significant research project, according to CEO Sam Altman. OpenAI executives Joaquin Quinonero Candela and Lilian Weng will take over the preparedness team, which evaluates the readiness of the company’s models for general AI. The move is part of a broader strategy to unify OpenAI’s safety efforts.
OpenAI’s preparedness team ensures the safety and readiness of its AI models. Following Madry’s shift to a new research role, he will have an expanded position within the research organization. OpenAI is also addressing safety concerns surrounding its advanced chatbots, which can engage in human-like conversations and generate multimedia content from text prompts.
Joaquin Quinonero Candela and Lilian Weng will lead the preparedness team as part of this strategic change. Researcher Tejal Patwardhan will manage much of the team’s work, ensuring the continued focus on AI safety. The reorganization follows the recent formation of a Safety and Security Committee, led by board members including Sam Altman.
The reshuffle comes amid rising safety concerns as OpenAI’s technologies become more powerful and widely used. The Safety and Security Committee was established earlier this year in preparation for training the next generation of AI models. These developments reflect OpenAI’s ongoing commitment to AI safety and responsible innovation.
Leaders of Fortune 500 companies developing AI applications face a potential nightmare: hackers tricking AI into revealing sensitive data. Zurich-based startup Lakera has raised $20 million to address this issue. The funding round, led by Atomico with participation from Citi Ventures and Dropbox Ventures, brings Lakera’s total funding to $30 million. Lakera’s platform, used by companies like Dropbox and Citi, allows businesses to set guardrails for generative AI, protecting against prompt injection attacks.
Lakera CEO David Haber highlighted the importance of safety and security as companies integrate generative AI into critical functions. Existing security teams encounter new challenges in securing these applications. Lakera’s platform, built on internal AI models, ensures that generative AI applications do not take unintended actions. Customers can specify the context and policies for AI responses, preventing the disclosure of sensitive information.
A unique advantage for Lakera is Gandalf, an online AI security game used by millions, including Microsoft. The game generates a real-time database of AI threats, keeping Lakera’s software updated with thousands of new attacks daily. That helps in maintaining robust security measures for their clients.
Lakera competes in the generative AI security landscape with startups like HackerOne and BugCrowd. Matt Carbonara of Citi Ventures praised Lakera’s focus on prompt injection attacks and its team’s capability to build the necessary countermeasures for new attack surfaces.
Coca-Cola is harnessing AI and digital innovations to boost sales and product volumes, even in the face of price hikes. In the second quarter, revenue rose 3% to $12.4 billion, exceeding analyst expectations. CEO James Quincey highlighted the company’s use of AI in enhancing marketing and pricing strategies, which has helped retain customers despite financial pressures.
Studio X, Coca-Cola’s digital ecosystem, played a crucial role in this success. It enabled the creation of targeted content and real-time measurement of its impact. A collaboration with Marvel, featuring limited-edition graphics and QR codes, provided unique augmented reality experiences, driving volume and value share for Classic Coca-Cola.
The company is also piloting an AI-based tool for optimising price packs across channels. This tool personalises messages to retailers, suggesting items based on previous orders and market data (SKU: Stock Keeping Unit). Early results show a 30% increase in purchases of recommended SKUs, boosting sales for both retailers and Coca-Cola.
Despite challenges in the consumer landscape, Coca-Cola remains optimistic. The company plans to counter a decline in away-from-home sales by offering more food and beverage combos. With an improved outlook for organic revenue growth, Coca-Cola is confident in its strategy and future prospects.
