On this edition of Stock Movers:
- Alphabet (GOOGL) shares hit a record high after Google avoided a breakup after a US judge ruled against the government’s most onerous proposals, including a forced sale of its Chrome browser, another court victory for Big Tech in the biggest antitrust case in three decades. AI models represent a long-term threat to the search industry as chatbots and other generative AI technologies become more advanced and behave more like search engines, Judge Amit Mehta said on Tuesday. Still, the Alphabet Inc. company will have to make some concessions, including sharing online search data with rivals and ending exclusive contracts for distribution. “The emergence of GenAI changed the course of this case,” Mehta wrote in the judgment. The ruling represents a setback for the US government in its bid to curb the power of the biggest US tech companies, falling far short of the most severe remedies sought by antitrust enforcers. The finding follows the Washington-based judge’s ruling last year that Google illegally monopolized the markets for online search and search advertising. Mehta held a three-week hearing in April to determine a fix.
- Apple (APPL) shares are up today. The iPhone maker announced that they are planning to launch its own artificial intelligence-powered web search tool next year, stepping up competition with OpenAI and Perplexity AI Inc. The company is working on a new system — dubbed internally as World Knowledge Answers — that will be integrated into the Siri voice assistant, according to people with knowledge of the matter. Apple has discussed also eventually adding the technology to its Safari web browser and Spotlight, which is used to search from the iPhone home screen. Apple is aiming to release the service, described by some executives as an “answer engine,” in the spring as part of a long-delayed overhaul to Siri, said the people, who asked not to be identified because the plans haven’t been announced. The idea is to make Siri and Apple’s operating systems a place where users can look up information from across the internet — in a similar fashion to ChatGPT, AI Overviews in Google Search and a crop of new apps. The approach will rely on large language models, or LLMs, a key technology underpinning generative AI.
- Salesforce (CRM) shares fell after the company projected lackluster quarterly sales growth, suggesting its artificial intelligence product isn’t yet paying off as quickly as hoped amid competition from emerging AI companies. Revenue will be $10.2 billion to $10.3 billion in the period ending in October, the company said Wednesday in a statement. Analysts, on average, estimated $10.3 billion. Current remaining performance obligations, a measure of bookings, will increase “slightly above” 10%, in line with analysts’ average projections. Investors have been increasingly anxious that incumbent software makers will be outshined by new AI-based vendors. Companies like Salesforce, which make applications that are charged per user, have faced the steepest skepticism because of the view that AI will take over some of the tasks they provide and reduce the workforce of their customers.
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