🤫 ChatGPT's Secret

Update 2023-04-26

What’s in today’s Business Edge update?

Google's ad revenue takes a hit, while Microsoft's profits dip but Xbox and devices thrive. AI is in the spotlight with OpenAI's ChatGPT Incognito Mode, and Spotify racks up 5 million new premium subscribers.

In other news, Tesla investors call for more focus from Musk, Apple and Google face potential fines from the UK's Digital Consumer Bill, Hugging Face unveils HuggingChat, an open source ChatGPT competitor, and Nvidia tackles AI chatbot "hallucinations" with NeMo Guardrails.

Let’s dive in!

🌍 Impactful news

Top five news we spotted during the last 48 hours that can significantly impact the tech market, sorted according to impact level.

Google Ad Revenue Dips Again, AI Advancements in Focus

Google's parent company, Alphabet Inc., reported a slight drop in ad revenue for Q1, totaling $54.5 billion, marking the second consecutive quarterly decline. However, the decrease was smaller than Wall Street expected. Google is now focusing on AI advancements to boost growth as competition in the sector heats up.

More:

• Alphabet's total Q1 revenue increased by 2.6% YoY to $69.8 billion

• YouTube ad revenue decreased by 2.6% YoY to $6.7 billion

• Google's cloud-computing division saw a 28% YoY increase in sales to $7.5 billion

_{Tags: #BigTech #AI #FinancialReport}

Read more about it at —> (read time: 5 minutes)

Read our PRO version of this story here.

Impact: We classify this news as having a Market Impact. Google's second consecutive quarterly decline in ad revenue highlights the challenges the online advertising market faces due to economic uncertainties. The focus on AI advancements in response to these challenges and growing competition demonstrates the potential for moderate technological disruptions in the industry.

Microsoft Profits Dip, Xbox and Devices Flourish Amid PC Decline

Microsoft has reported Q1 2023 revenues of $50.1 billion, up 11%, but a net income of $17.6 billion, down 14% compared to the same period last year. The decline in PC shipments, attributed to geopolitical tensions, inflation, and supply chain issues, has impacted Windows OEM revenue, which fell 15%. Despite this, Surface devices revenue grew by 2%, and Xbox hardware revenue increased by 13%. The company's cloud services also saw strong growth, with a 24% YoY increase in revenue.

More:

• PC shipments declined by 15%, resulting in lower Windows OEM revenue

• Surface devices revenue up 2%, despite no significant launches in Q1

• Xbox hardware revenue increased by 13%, with half of Xbox Series S buyers new to the ecosystem

• Microsoft cloud revenue reached $25.7 billion, up 24% YoY

• Microsoft 365 consumer subscriptions grew by 13%, reaching 61.3 million

_{Tags: #BigTech #AI #Cloud #FinancialReport}

Read more about it at —> (read time: 6 minutes)

Read our PRO version of this story here.

Impact: This news has a Company Impact, directly influencing Microsoft's financial performance and outlook. The decline in PC shipments has significantly affected the company's Windows OEM revenue, while growth in Surface devices, Xbox hardware, and cloud services has helped offset this decline. Additionally, the results provide insights into market trends and the evolving technology landscape, particularly the shift toward cloud computing and gaming services.

AI Pioneer OpenAI Launches Incognito Mode for ChatGPT

OpenAI has announced an "incognito mode" for ChatGPT, which will not save users' conversation history or use it to train the AI. The company is also planning a "ChatGPT Business" subscription with additional data controls. The move follows growing concerns about how chatbots like ChatGPT handle users' data, with Italy banning the service for potential privacy violations.

More:

• OpenAI CTO Mira Murati states the company is compliant with European privacy laws and is working to address regulators' concerns

• The new feature allows users to disable "Chat History & Training" and export their data

• OpenAI will still retain conversations for 30 days to monitor for abuse before permanent deletion

• The upcoming business subscription will not use conversations for AI model training by default

_{Tags: #AI #OpenSource}

Read more about it at —> (read time: 4 minutes)

Impact: We classify this news as having an Industry-wide Impact. The introduction of incognito mode and a business subscription with enhanced data controls addresses concerns regarding user data privacy and compliance with international regulations. This move is likely to influence other companies in the AI and chatbot industry to improve their data handling practices, and could potentially impact the competitive landscape and regulatory environment within the sector.

Read our PRO article for a more in-depth view of this topic.

Spotify Gains 5 Million Premium Subscribers in Q1, Total Paying Users Reach 210 Million

Spotify's Q1 2023 results show a remarkable 5 million net increase in Premium subscribers, pushing the total global paying subscribers to 210 million, a 15% YoY growth. More:

• Overall Monthly Active Users grew by 22% YoY to 515 million

• Premium subscriber growth driven by outperformance across all regions, primarily Europe and Latin America

• Q2 forecast: 217 million Premium subscribers and 530 million MAUs

• Q1 revenue: €3.04 billion, up 13% YoY; Premium subscriber revenue: €2.7 billion, up 13% YoY

_{Tags: #Spotify #Streaming #FinancialReport}

Read more about it at —> (read time: 6 minutes)

Impact: This news has a Market Impact as it affects the specific market segment of music streaming services. The growth in monthly active users and premium subscribers suggests that Spotify is successfully engaging its audience and growing its market share. The strong performance across all regions and demographics indicates that Spotify's marketing strategies, multi-user plans, and brand awareness efforts are effective in attracting and retaining users. This growth may have implications for other players in the market, potentially affecting competitive dynamics in the music streaming industry.

Read our PRO article for a more in-depth view of this topic.

⚡️Quick news

Other news we have found of importance, but in a very short format.

Tesla Investors Urge Board to Rein in Distracted Musk

A group of 17 major Tesla shareholders, including pension systems and big institutions, have expressed concerns over CEO Elon Musk's distractions from running the company. In an open letter, they accused Musk of neglecting Tesla by focusing on his other ventures and urged the board to intervene.

_{Tags: #Tesla #ElonMusk #CorporateGovernance}

Read more about it at —> (read time: 3 minutes)

Hugging Face Introduces Open Source ChatGPT Competitor, HuggingChat

AI startup Hugging Face has launched HuggingChat, an open source alternative to OpenAI's ChatGPT, offering capabilities such as code-writing and email-drafting through a web interface and API.

_{Tags: #AI #HuggingFace #OpenSource}

Read more about it at —> (read time: 4 minutes)

Apple and Google May Face Hefty Fines Under UK's New Digital Consumer Bill

The UK's CMA introduced a bill allowing multibillion-pound fines on tech giants like Apple for breaching rules that promote competition and protect consumers.

_{Tags: #Big tech #Privacy #Regulation}

Read more about it at —> (read time: 3 minutes)

Nvidia Launches NeMo Guardrails to Tackle AI Chatbot "Hallucinations"

Nvidia's new software, NeMo Guardrails, aims to prevent AI chatbots from stating incorrect facts or discussing harmful subjects by adding topic restrictions and security measures.

_{Tags: #AI #Nvidia #Big tech}

Read more about it at —> (read time: 4 minutes)