 | Feb 27, 2025 | | | | Supported by  | | | | | Happy Thursday! Nvidia projects 65% revenue growth for the current quarter on strong chip orders. Former OpenAI CTO Mira Murati's Thinking Machines Lab is in talks to raise $1 billion. Salesforce's growth stalls despite the company's AI push.
| | | | Nvidia on Wednesday said revenue rose 78% year-over-year to $39.3 billion in the quarter ending in January, continuing a streak of more than two years of beating its own revenue growth projections. The company had projected 70% growth for the quarter three months ago and on Wednesday forecast 65% revenue growth to $43 billion in the current fiscal quarter, as demand for its artificial intelligence server chips continues to be strong. Despite the results, shares were flat in after-hours trading, though they rose 3.5% in regular trading. Shares are down about 5% so far this year after a remarkable climb in the past two years. Nvidia said its gross profit margin in the January quarter decreased by 1.6 percentage points to 73% compared to the October quarter due to its "transition to more complex and higher cost" server chip systems. The company projected gross margins to fall another roughly 2 percentage points in the current fiscal quarter. Free cash flow rose 38% to $15.5 billion in the January quarter compared to the same quarter a year ago but fell 7% compared to the October quarter. Nvidia said $11 billion of the January quarter's revenue came from sales of its latest flagship chip, Blackwell. Nvidia chief financial officer Colette Kress said in a prepared statement that the revenue represents the "fastest product ramp in our company's history." Microsoft, Amazon, Google and Meta Platforms have each placed Blackwell server rack orders of more than $10 billion apiece, The Information has reported. OpenAI, working with Oracle, has planned to rent large numbers of the chips as well. | | | | Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, is in talks with potential investors to raise roughly $1 billion in funding, according to a person with knowledge of the fundraising talks. The company is currently not generating revenue, according to the same person. A spokesperson for Murati declined to comment. The company is aiming to raise at a roughly $9 billion valuation, reported Business Insider. The deal is not finalized, and terms may change. Murati launched Thinking Machines Lab as a benefit corporation—a structure that enables companies to prioritize societal impact alongside profits—soon after her departure from OpenAI in September. The company hasn't disclosed much about its future plans but bills itself as an AI research and product company. Several prominent OpenAI alumni, including cofounder John Schulman and researchers Barret Zoph and Luke Metz, have joined Thinking Machines Lab. Recently, Thrive Capital, a major OpenAI investor, made a pitch to OpenAI employees that leaving the company would be a bad financial decision. | | | | Salesforce on Wednesday said revenue rose 8% to $10 billion in the January quarter, mirroring the growth it posted in the prior two fiscal quarters. The result highlights the challenges facing the enterprise software vendor as it reorients its business around selling artificial intelligence. Salesforce projected revenue growth of 7% to 8% growth in the current fiscal year, which ends January 2026. Shares fell around 2% after normal trading hours and have been flat over the past year. Salesforce has been leaning on AI to boost its fast-growing data storage business, which is generating revenue at a $900 million annual run rate, the company said. That figure implies $75 million in monthly revenue. Salesforce primarily makes revenue from customer relationship management software and other business apps. Revenue for the January quarter came in at the midpoint of the range the company forecast in December. Free cash flow rose 17.2% to $3.8 billion, compared with a 30.2% year-over-year increase in free cash flow in the prior fiscal quarter. | | | | Elon Musk attended Donald Trump's first cabinet meeting Wednesday, telling the room that his Department of Government Efficiency group, which is leading cost-cutting efforts across the federal workforce, was going to "make mistakes." Addressing questions about his demand at the weekend that federal employees send an email listing their achievements for the last week or face losing their jobs, Musk said the exercise was a "pulse check review," and that anyone with "a pulse and two neurons" could reply to an email. He also said there were dead people and "fictional individuals" on the government payroll, without offering any evidence to support the claims. Trump, who praised Musk at the meeting as a "tremendously successful guy," said employees who haven't yet responded to the email were "on the bubble," adding: "Maybe they're going to be gone." His comments are likely to sow more confusion among federal employees, who have been fielding mixed messages all week about whether the email request was mandatory or voluntary. | | | | Shares of mobile gaming ad firm AppLovin fell 15% on Wednesday after two short-selling firms published detailed reports slamming the sustainability of the company's surging ad business which lifted the stock 712% last year. The high flying stock has now fallen 38% in the past two weeks and is down slightly for the year to date. One report, from The Bear Cave, said the company's revenue growth was "low quality," flowing from "ads that are deceptive, predatory and at times unreadable or unclickable." The other, from Culper Research, criticized the company's ecommerce efforts—which has made its ad platform popular with direct to consumer brands—as a "smoke and mirrors game." AppLovin CEO Adam Foroughi said in a blog post the short-sellers were "making false and misleading claims aimed at undermining our success." AppLovin reported earlier this month that its 2024 ad revenue rose 75% to $3.2 billion thanks in part to its success in diversifying out of gaming ads into ecommerce. As we reported in December, some commerce marketers had found the return on ads bought on AppLovin was comparable to what they earned on ads placed on Meta, owner of Facebook and Instagram, raising the prospect that AppLovin could take share from Meta. | | | | Snowflake shares rose more than 11% after the database provider said its revenue grew 27% to nearly $987 million in its January quarter, which exceeded the high end of its forecast by more than $30 million. The results show that investors think Snowflake is well-positioned to benefit as more companies build AI-powered applications based on the data they generate. Snowflake also announced an expansion of its partnership with Microsoft that will let customers access OpenAI's AI models from the Azure cloud service, after inking a similar partnership with Anthropic in November. Snowflake, which competes with cloud providers like Amazon Web Services and startups like Databricks, has also been able to get its customers spending more over time, as evidenced by its net revenue retention rate of 127% during the quarter. Snowflake also revealed that Mike Scarpelli, chief financial officer, is retiring after more than five years at the company. Scarpelli joined Snowflake in 2019 from ServiceNow, where he had spent the previous eight years as its CFO, and led Snowflake's $3.4 billion initial public offering in 2020, which is the largest in software industry history. | | | | Amazon unveiled the long-awaited new version of its Alexa voice assistant on Wednesday. The new version of Alexa, which will gradually roll out to consumers beginning in March, is more conversational than its predecessor and can accomplish more tasks, Amazon executives said. The new version of Alexa, dubbed Alexa+, will be free for Prime members but cost $19.99 per month for non-subscribers, according to the company. It's powered by both Amazon's in-house Nova large language models as well as models from the AI firm Anthropic, which Amazon has invested in. Alexa+ will initially be added to Amazon's Echo Show devices, which have screens, but will eventually be available through almost every existing Alexa device, as well as through mobile app and browser versions, Amazon devices senior vice president Panos Panay said. Amazon executives showed the new version of Alexa performing tasks such as ordering groceries, booking dinner reservations and purchasing concert tickets in a more conversational tone than the current version of Alexa. The assistant can also learn and remember information from images and documents, such as by reading a school assignment and quizzing a user on the answers. | | | | Paramount Global's streaming business posted an adjusted loss of $286 million during the fourth quarter of 2024, after it had eked out a profit the prior two quarters. Revenue for this segment, which includes the Paramount+ and Pluto TV streaming services, grew 8% year over year to $2 billion. Overall, Paramount's three co-chief executives, George Cheeks, Brian Robbins and Chris McCarthy, said in a statement that they still expect Paramount+ to achieve a full year of domestic profitability in 2025. Paramount reduced adjusted annual losses in this segment by $1.2 billion in 2024 when compared to the previous year. Paramount+ ended the year with 77.5 million subscribers, adding 5.6 million during the fourth quarter. Paramount's traditional TV business, meanwhile, saw revenue drop 4% year over year to $5 billion, driven by declines in both advertising revenue and fees Paramount receives from cable TV companies to distribute its channels. Paramount's sale to David Ellison and his studio Skydance Media is scheduled to close in the first half of this year, the company said. | | | | Jeff Bezos has ordered a revamping of the Washington Post's opinion pages to write "in support and defense of two pillars: personal liberties and free markets." Viewpoints opposing those pillars won't be published, he said in a post on X on Wednesday morning. As a result of the switch, the Post's opinion editor David Shipley is leaving. Bezos said in the X post that he had offered Shipley, who joined the Post from Bloomberg in 2022, the chance to stay on. But Bezos told Shipley "if the answer wasn't 'hell yes,' then it had to be 'no.'" The pillars Bezos outlined are similar to the longstanding "free peoples, free markets" principles of the Wall Street Journal's opinion page. Bezos said in his post he believes "these viewpoints are underserved in the current market of ideas and news opinion." | | | | Database provider Snowflake has expanded its existing partnership with Microsoft to let Snowflake customers access OpenAI's artificial intelligence directly from the Azure cloud service. The deal, which is similar to the one Snowflake struck with Anthropic, OpenAI's main rival, in November, shows how AI firms are relying in part on enterprise software firms to reach new customers, and how those software firms need the AI firms to stay relevant as more customers develop custom AI applications for their employees. By accessing OpenAI models within Snowflake's database, customers can avoid using the OpenAI API in a way that might expose their data to other parties over the internet, said a Snowflake employee. Snowflake customers will also be able to pay to use OpenAI models through their Snowflake bill as opposed to having two separate bills, this person said. | | | | | Popular articles
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