Artificial Intelligence Is Already Causing Disruption And Job Losses At IBM And Chegg


Twenty-five percent of jobs will be negatively impacted over the next five years, according to a new report by the World Economic Forum. In a study, New York City-based investment bank Goldman Sachs predicts that the fast-growing mass adoption of AI will impact 300 million jobs.

We are now seeing the effects of helpful but disruptive technology. Chegg CHGG 0.0%, an educational company, and IBM have both announced that AI will cause a change within their respective organizations. Chegg saw its shares fall in value. IBM will enact hiring freezes and allow attrition without recruiting new personnel, as AI will take over their jobs.

AI Schools Chegg Stock

Shares in online learning company Chegg plunged after it was one of the first organizations to admit that AI affected its business model. Chegg recognized that students were turning to OpenAI’s ChatGPT for help. The AI alternative hurts Chegg’s financial situation as its shares fell nearly 50% on Tuesday morning.

The education company highlights how quickly AI can inexpensively replicate services and products. The Financial Times reported that California-based Chegg saw a decline in revenue and a loss of subscribers. In response to the new reality, The company started CheggMate, a service created with ChatGPT-4 to offer tailored content via AI.

Millions Of Jobs Predicted To Be Impacted

According to a new report by the World Economic Forum released on Monday, a quarter of jobs will be impacted over the next five years. The fast-growing trends of artificial intelligence, digitization, renewable energy and supply chain reshoring will bring about a critical shift in the global labor market.

The WEF predicts a “new era of turbulence,” as many workers won’t have the requisite skills to keep up with the changes. Those with a technology, data analytics or cybersecurity background will benefit in the new environment.

The WEF study surveyed more than 800 companies that collectively employ 11.3 million workers across 45 countries worldwide. Global employers anticipate creating 69 million new positions by 2027 and eradicating 83 million jobs—a net loss of 14 million roles. Clerical workers will bear the brunt of the fast-moving changes. Around 26 million jobs in administrative positions will be cut due to AI.

Suppose generative AI lives up to its hype. In that case, the workforce in the United States and Europe will be upended, Goldman Sachs reported this week in a sobering and alarming report about AI’s ascendance. The investment bank estimates 300 million jobs could be lost or diminished by this fast-growing technology.

On the positive side, Goldman contends automation creates innovation, leading to new jobs. For companies, there will be cost savings thanks to AI. They can deploy their resources toward building and growing businesses, ultimately increasing annual global GDP by 7%.

IBM’s Hiring Freeze on Roles That AI Can Replace

Armonk, New York-based International Business Machines Corp. CEO Arvind Krishna announced it would pause hiring for roles that can be replaced by artificial intelligence. Functions, including administrative-oriented back office roles and human resources, are targeted.

Krishna points out that the tech company has around 26,000 workers that are not client-facing, and about 30%— representing 7,800 people— could be displaced through attrition due to AI over the next five years. IBM boasts 260,000 workers and will keep hiring for software development and customer-facing roles.

The Godfather Of AI Speaks Out

Geoffrey Hinton is considered the “Godfather of AI” due to his long-standing involvement with this technology. After a decade of working at the online search giant, Hinton recently left Google, his current employer, reported the New York Times NYT 0.0%.

His rationale for his departure was over concerns about the adverse impact on people due to the proliferation of AI. He shared his apprehension over misinformation, disruptions of the job market, and other severe existential risks. At 75 years of age, the AI Godfather left the search giant to freely speak about the potential damages AI can wreak without being tied to Google. The AI pioneer said that he regretted his contribution to the space.

I am a CEO, founder, and executive recruiter at one of the oldest and largest global search firms in my area of expertise, and have personally placed thousands


Source: Artificial Intelligence Is Already Causing Disruption And Job Losses At IBM And Chegg

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How Microsoft Makes Money: Computing and Cloud Services

Microsoft Corp. (MSFT), one of the world’s biggest tech companies, sells personal computing devices, cloud systems and services, software, and other products.1 With products geared toward both consumers and businesses, Microsoft competes in a broad range of industries against companies including Apple Inc. (AAPL), Inc. (MZN), International Business Machines Corp. (IBM), and Oracle Corp. (ORCL).

Key Takeaways

  • Microsoft sells computing devices, cloud systems and services, software, and other products to consumers and businesses.
  • The company’s intelligent cloud segment is the largest source of profit, as well as the fastest-growing.
  • The COVID-19 pandemic has had positive impacts on certain aspects of Microsoft’s business, including its cloud business and productivity tools.
  • Microsoft announced in mid-January plans to acquire popular video game company Activision Blizzard for $68.7 billion.

Microsoft’s Financials

Microsoft announced in late January financial results for Q2 of its 2022 fiscal year (FY), the three-month period ended Dec. 31, 2021. Net income rose 21.4% to $18.8 billion. Quarterly revenue expanded 20.1% year-over-year (YOY) to $51.7 billion. Microsoft uses operating income as its profit metric for gauging the performance of its individual business segments. Operating income for the quarter grew 24.3% YOY to $22.2 billion.

Revenue for the fiscal second quarter benefitted from strong growth in Microsoft Cloud and other cloud services.3 Microsoft also noted in its quarterly filings that the COVID-19 pandemic continues to have an impact on its business operations and financial results, but that some of the effects have lessened. The company said that its commercial and consumer businesses have benefitted from demand for its cloud and productivity tools.

Microsoft’s Business Segments

Microsoft divides its business into three reportable segments, breaking out results by both revenue and operating income: productivity and business processes, intelligent cloud, and more personal computing. These segments are categorized according to both product type and customer demographic. Productivity and business processes, for instance, includes products across multiple platforms and devices relating to productivity and communication. And more personal computing focuses on products designed with end-users, developers, and IT professionals in mind.5

Productivity and business processes

Microsoft’s productivity and business processes segment includes a portfolio of products designed to enhance corporate productivity, communication, and information services. One of its major products is Microsoft’s Office software suite, including both the commercial and consumer divisions. The segment also includes business solutions products such as dynamics, as well as the professional networking site, LinkedIn.5

In Q2 FY 2022, productivity and business processes generated $15.9 billion in revenue, comprising 31% of Microsoft’s total revenue. This amounted to an increase of 19.3% from the year-ago quarter. Operating income for the segment grew 24.4% YOY to $7.7 billion in Q2 FY 2022, accounting for less than 35% of the total.6

Intelligent cloud

The intelligent cloud segment comprises all of Microsoft’s public, private, and hybrid server products as well as cloud services for business. These include Microsoft Azure, SQL Server, Windows Server, GitHub, Enterprise Services, and more.5

For Q2 FY 2022, Intelligent Cloud generated $18.3 billion in revenue, accounting for over 35% of total revenue. Up 25.5% compared to the year-ago quarter, Intelligent Cloud was the fastest-growing revenue segment in the company’s fiscal second quarter. It was also the fastest-growing segment in terms of operating income, which was up 26.3% YOY to $8.2 billion. Intelligent Cloud operating income accounts for just under 37% of Microsoft’s total operating income, making it the most profitable of the company’s three segments.6

More personal computing

Microsoft describes its more personal computing segment as consisting of products and services aimed at putting “customers at the center of the experience with our technology.” The Windows operating system, surface device, gaming products, and search and news advertising are all included in this segment.

In Q2 FY 2022, more personal computing generated $17.5 billion in revenue, comprising about 34% of total revenue. While revenue grew 15.5% YOY for the segment, operating income rose 21.8% YOY to $6.4 billion. More personal computing accounts for about 29% of the company’s total operating income.6

Microsoft’s Recent Developments

On Jan. 18, 2022, Microsoft announced a plan to acquire video game developer Activision Blizzard for $68.7 billion. The deal is expected to close in fiscal year 2023. According to Microsoft, the acquisition will make it the third-largest gaming company by revenue, behind only Tencent and Sony.7

How Microsoft Reports Diversity and Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Microsoft and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Microsoft releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

By: Nathan Reiff

Source: How Microsoft Makes Money: Computing and Cloud Services

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Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

A decade after its founding, the marketing tech startup Braze is beginning the process of becoming a publicly traded company.

Today, the New York-based company filed its Form S-1 with the U.S. Securities and Exchange Commission to go public on the Nasdaq stock exchange under the ticker symbol “BRZE.” Braze is part of the growing industry of marketing campaign management software companies, a market sector that the research group IDC says could reach $15 billion in 2021 and $19.4 billion in 2024.

The customer engagement company provides technology for brands to interact directly with consumers through various channels. By using Braze’s platform, companies can use data from email, apps and other digital platforms to better understand their customers before targeting them with personalized messages. Well known brands that use Braze for their marketing include Burger King, Anthropologie, Birchbox, Grubhub, IBM, Hinge, Nascar, PayPal, HBO, iHeartRadio, Sephora and Rosetta Stone.

According to its SEC filing, Braze reported large revenue growth in the past two years with $150.2 million in fiscal-year 2021 and $96.4 million in 2020. While the company has experienced momentum in 2020 and 2021, it’s still not profitable: Net losses totaled $31.43 million in 2021 and $31.36 million in 2020. Braze also reported annual recurring revenue passing $200 million in 2021, up from $100 million in 2019.

When Braze was cofounded in 2011 by CEO Bill Magnuson, Jon Hyman and Mark Ghermezian, it wanted to build a business that was mobile-first to help companies adapt to changing consumer behaviors. At the time of publication, the company was unavailable for comment about its IPO plans, but in a letter included in the S-1 Magnuson wrote that the “goal was to build a company that would capitalize on new technology to help the world’s best companies grow by trusting us with their most valuable asset: their customer relationships.”

“While technological change drove us forward, we knew that humanity should always guide us,” Magnuson wrote. “Great human relationships are built on mutual understanding, engaging communication and shared experience. It’s thus no surprise that the secret weapon of exceptional, enduring companies is the quality of their customer engagement.”

In the past two years, Braze has continued to grow its customer base from 728 in January 2020 to 890 January 2021 and 1,119 as of July 2021. The company has also continued to scale its cloud-based platform and now reaches 3.3 billion monthly active users through its customers’ applications, websites and other digital platforms—up from 2.3 billion in January 2020 and from 1.6 billion in January 2019.

Issues around privacy are also something Braze listed as a risk factor, citing international, federal and state regulations including newly passed legislation in California, Virginia and Colorado and existing laws such as the European Union’s General Data Protection Regulation. Several pages of the S-1 detail many of the laws and provide a glimpse into the various ways rules around data privacy could impact the company both legally and financially.“The laws are not consistent, and compliance in the event of a widespread data breach could be costly,” according to the SEC filing. “In addition, while we contractually limit the types of data our customers may process and store using our platform, we cannot fully control the actions of our customers. The failure of customers to comply with their contractual obligations may subject us to liability, and we may not have sufficient recourse to cover our related liabilities.”

Braze’s S-1 filing comes just a day after the advertising technology company Basis Globally Technologies—formerly known as Centro—confidentially filed its own S-1 with the SEC, further adding to the string of ad-tech and mar-tech IPOs that have taken place this year. Companies that have either gone public or begun the IPO process in 2021 include the content recommendation company Taboola, ad measurement firms DoubleVerify and Integral Ad Science and other marketing tech companies such as Zeta Global and Sprinklr.

Over the past decade, Braze has raised $175.1 million, according to Crunchbase. It raised an $80 million Series E round led by Meritech Capital Partners in 2018, just a year after raising a $50 million Series D round led by ICONIQ Capital. Other investors have included Battery Ventures, InterWest Partners, Rally Ventures and Blumberg Capital.

While Braze was growing quickly even before the Covid-19 crisis began, the company said the pandemic has accelerated the adoption of digital and mobile usage. Braze is also betting on the increased reliance on first-party data, especially as companies adapt to finding ways to reach people without as much third-party aggregated data.

“Modern brands know that when a customer is intermediated by a third-party aggregator, ad platform or distribution channel, it’s not really their customer relationship,” Magnuson wrote. “The highest value customer relationships are informed by first-party data and cemented through direct engagement.”

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Source: Braze Begins The IPO Process Amid Pandemic-Era Growth In Digital Marketing

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IBM and Bank of America Advance IBM Cloud for Financial Services, BNP Paribas Joins as Anchor Client in Europe

ARMONK, N.Y., July 22, 2020 /PRNewswire/ — IBM (NYSE: IBM) today announced that several global banks including BNP Paribas, one of Europe’s largest banks, will join a growing ecosystem of financial institutions and more than 30 new technology providers adopting IBM Cloud for Financial Services. Today’s news also marks a significant milestone in IBM’s collaboration with Bank of America, with the availability of the IBM Cloud Policy Framework for Financial Services.

The IBM Cloud Policy Framework for Financial Services establishes a new generation of cloud for enterprises with common operational criteria and streamlined compliance controls framework specifically for the financial services industry, allowing IBM’s growing financial services ecosystem to transact with confidence.

IBM is also announcing the formation of the Financial Services Cloud Advisory Council to support this effort and advise on the ongoing advancement of the IBM Cloud Policy Framework for Financial Services. Chief Technology Officer Tony Kerrison will represent Bank of America on the Council, which will be led by Howard Boville, SVP, IBM Cloud. The Council will be focused on bringing major financial institutions together to help drive the strategic evolution of cloud security in this highly regulated sector.

“We have had great success with our proprietary, private cloud, that currently houses the majority of our technology workloads,” said David Reilly, Bank of America’s Global Banking & Markets, Enterprise Risk & Finance Technology and Core Technology Infrastructure executive. “At the same time, we have been looking to identify a financial services-ready solution that offers the same level of security and economics as our private cloud with enhanced scalability. That’s why we’re partnering with IBM to create an industry-first, third party cloud that puts data resiliency, privacy and customer information safety needs at the forefront of decision making.”

Central to the development of the IBM Cloud for Financial Services, IBM collaborated with Bank of America and Promontory, an IBM Services business unit and global leader in financial services regulatory compliance consulting, to establish a set of cloud security and compliance control requirements as the basis of its policy framework, which will allow financial institutions to confidently host key applications and workloads.

The IBM Cloud Policy Framework for Financial Services is now available and aims to deliver the industry-informed IBM public cloud controls required to operate securely with bank-sensitive data in the public cloud. IBM, Promontory and the advisory council will continue to collaborate to assure  that the framework will be up to date to address the latest industry regulations.

BNP Paribas joins IBM Cloud for Financial Services

BNP Paribas has committed to joining the IBM Cloud for Financial Services as an anchor client in Europe to support its first dedicated cloud in Europe to be GDPR compliant, acknowledging that a public cloud informed by IBM’s deep financial industry expertise, controls framework and industry-leading data-protection capabilities, meets their exacting standards. BNP Paribas will utilize a dedicated cloud, developed and managed by IBM, that will leverage IBM public cloud technologies, including Keep Your Own Key (KYOK) encryption capabilities. BNP Paribas could plan to onboard additional banking partners to the ecosystem across Europe in the future.

“As we continue to expand our collaboration with IBM, we’re driving innovation in the financial services industry and are able to partner with a growing ecosystem of technology providers, from small startups to leaders in the industry.  That’s an important step forward for BNP Paribas Group to accelerate its transformation journey and be compliant with European regulations,”  Bernard Gavgani, CIO, BNP Paribas. “IBM Cloud for Financial Services helps us to further our transformation journey to the cloud and migrate mission critical workloads with confidence knowing that we can meet the regulatory standards established for the industry.”

IBM Grows Financial Services Cloud Ecosystem

Additionally, MUFG Bank plans to explore the deployment of IBM Cloud for Financial Services in Japan, continuing its ongoing transformational journey with IBM to accelerate digital reinvention.

“MUFG has been shifting its IT workload to cloud for years, with strong focus on keeping our data secure and mitigating operational risks on this new and fast-changing technology platform. We believe IBM Cloud for Financial Services will be suited to help Japanese financial institutions redirect their efforts to maintain legacy systems toward digital reinvention in the era of new normal. We look forward to continuing discussions around our strategic partnership with IBM to leverage best-in-class technology for our mission-critical workloads, as well as to drive digital transformation across MUFG”, said Mr. Hiroki Kameda, Managing Corporate Executive Group CIO of MUFG.

IBM has also expanded its growing ecosystem of Independent Software Vendors (ISVs) to include more than 30 partners. These technology providers have committed to onboarding offerings and cloud services to IBM Cloud for Financial Services that will help address stringent security, resiliency and compliance requirements and can accelerate transactions with financial services institutions.

“With major financial institutions and technology partners joining our financial services cloud, IBM is establishing confidence within the industry and around the globe that the IBM public cloud, equipped with industry-leading encryption capabilities, is the enterprise cloud for all highly regulated industries, including financial services healthcare, telco, airlines and more,” said Howard Boville, Senior Vice President, IBM Cloud. “IBM is creating a platform with the goal that financial services institutions can address their regulatory requirements, while creating a collaborative ecosystem that helps enable banks and their providers to confidently transact.”

New IBM Research Cloud Innovation Lab and Innovative Security Capabilities for Clients

IBM Research has played a central role in the technology underpinnings of the IBM Cloud for Financial Services, taking a holistic approach to security and compliance that spans infrastructure, platform, data, and the developer workflow. For example, developed in collaboration with IBM Research, IBM will launch the IBM Cloud Security and Compliance Center which will allow clients to continuously monitor and enforce their security and compliance posture across their workloads, and provide a seamless, automated and adaptable process for improving cloud security. Following on the heels of its recent acquisition of Spanugo, the IBM Cloud Security and Compliance Center will include the ability to instrument the developer workflow with automated security and compliance checks.

Once the IBM Cloud Security and Compliance Center is available in August 2020, global banks and ISVs with workloads on the IBM Cloud for Financial Services, will be able to define their compliance profiles and manage controls, maintain an extensive data trail for audit, and, in continuous real time, monitor compliance across their organization. Promontory will continue to provide tailored, IT risk advisory services to users of the IBM Cloud for Financial Services.

To enable financial services clients and ecosystem partners to benefit from, and influence, the emerging cloud technologies being created at IBM Research, IBM will launch the IBM Research Cloud Innovation Lab, planned for August, 2020. Clients and industry partners of the IBM Cloud for Financial Services will be able to get a first look at the latest innovations from the IBM Research lab as well as quickly experiment, go deep into the technology and functionality of new cloud solutions and exchange ideas. More information on the IBM Research Cloud Innovation Lab and IBM Cloud Center for Security and Compliance can be found here.

IBM Cloud for Financial Services is built on IBM public cloud, powered by the same industry-leading confidential computing security found in IBM Z. Delivered via IBM Hyper Protect Services, it features ‘Keep Your Own Key’ encryption capabilities backed by the highest level of security certification commercially available, making the IBM public cloud the industry’s most secure and open public cloud for business.

Source: IBM




QC Ware Joins The Growing Ranks Of Companies Offering Quantum Cloud Computing Services

QC Ware, a Palo Alto, California, startup that offers quantum computing-as-a-service, announced this week that it’s opened up a public beta of its quantum cloud service, called Forge. With this offering, the company joins IBM, Rigetti and D-Wave as another entrant into the growing market for quantum cloud services, but unlike those companies, QC Ware is focused on software development rather than building its own quantum computers.

“We’re specifically focused on finding ways to accelerate hard enterprise problems,” says CEO Matt Johnson.

Through Forge, customers can gain access to a library of the quantum algorithms that QC Ware has spent the past years developing in collaboration with its customers. Quantum algorithms take advantage of the fact that unlike a traditional computer, where a bit is always represented as a “0” or a “1,” a quantum bit, or “qubit,” can exist indeterminately as one or the other while a computation is being run. This enables a quantum computer to perform particular types of computation much faster than a regular computer.

For QC Ware’s customers, those algorithms can be integrated to suit their needs, and once it’s ready, Forge can run them either on a high-performance computer capable of simulating quantum operations or on an actual quantum computer. Customers will be able to choose to run on machines owned by D-Wave, IBM or Rigetti.

Today In: Innovation

Despite rumors earlier this week that Google was able to achieve “quantum supremacy” on a particularly hard problem (meaning that its quantum system may have solved a problem faster than a classical computer), most experts agree that the achievement of a real quantum advantage (where a quantum computer solves a meaningful problem faster than a traditional solution) is still between three and ten years away. That said, companies across many different industries, such as J.P. Morgan or Volkswagen, are already investigating how quantum advantage can improve their businesses once they arrive. Gartner estimates that 20% of organizations will be budgeting for quantum products by 2023.

“If you look at Wall Street, for instance, and look at the five largest banks—all of those banks have a quantum computing program running at this point,” says Johnson.

Johnson cofounded QC Ware in 2014, having become enamored with the idea of quantum computing after meeting a group of researchers at NASA Ames talking about it a couple of years earlier. He says that for him, part of wanting to get moving on developing quantum software was “the allure of commercializing a technology that I thought was going to be really important to commercial industry but also to the government.” The company has raised $8.2 million in venture backing so far, and according to Johnson is close to being cash-flow positive.

A large part of the commercialization that drew Johnson into this industry involves the development of quantum algorithms. Right now they can be simulated on a regular computer, but once hardware has achieved quantum supremacy, they’ll run significantly more quickly. The idea behind developing quantum algorithms now is so organizations don’t have to play catch-up once quantum supremacy arrives.

One of the challenges, though, is that while classical computers all run on the same basic architecture, there are currently multiple competing quantum computing architectures—and as the hardware develops, it’s likely to turn out that the best architecture to use may well depend on the problem at hand. Which is why QC Ware’s head of simulations (and Forbes Under 30 alumnus) Robert Parrish is actively involved in developing hardware-agnostic software stacks.

“It’s very unclear at the moment which one of these technologies is going to succeed first and which is going to be the right one to use for a given problem,” he says.

Forge customers will be able to experiment with this themselves, as the cloud service will enable them to make use of several different types of quantum hardware. Potential customers will have an opportunity to have a 30-day evaluation of the service that includes one minute of quantum computing time, after which they’ll have an opportunity to subscribe to it. Pricing for the service starts at $2,500 for one hour of quantum computing time—a bargain compared to the tens of millions of dollars it currently costs to develop or purchase quantum hardware. In offering these services, the company believes it will move quantum computing closer to a useful reality.

“Practical quantum advantage will occur,” Johnson said in a statement. “Most experts agree that it’s a matter of when, not if. The way to pull that horizon closer is by having the user community fully engaged in quantum computing application discovery.”

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Source: QC Ware Joins The Growing Ranks Of Companies Offering Quantum Cloud Computing Services

With a quantum coprocessor in the cloud, physicists from Innsbruck, Austria, open the door to the simulation of previously unsolvable problems in chemistry, materials research or high-energy physics. The research groups led by Rainer Blatt and Peter Zoller report in the journal Nature how they simulated particle physics phenomena on 20 quantum bits and how the quantum simulator self-verified the result for the first time. More Information:…
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