AI Surge Drives Tech Industry Growth for Micron, Alibaba and Perplexity

The artificial intelligence (AI) boom is reshaping the tech landscape, with industry giants and startups reporting significant gains and attracting major investments. Memory chip maker Micron Technology announced robust quarterly results fueled by AI demand, while eCommerce giant Alibaba.com rolled out AI tools to empower small businesses globally. Meanwhile, AI-powered search startup Perplexity caught the eye of SoftBank’s Vision Fund, potentially securing a multi-million-dollar investment at a $3 billion valuation. These developments underscore AI’s growing influence across various tech sectors, from hardware infrastructure to eCommerce and information retrieval.

Micron Technology Reports Strong Q3, Fueled by AI Demand

Micron Technology, a memory and storage solutions provider, announced robust financial results for its third quarter of fiscal 2024, which ended May 30, 2024. The company reported revenue of $6.81 billion, a significant increase from $5.82 billion in the previous quarter and $3.75 billion in the same period last year.

Sanjay Mehrotra, president and CEO of Micron Technology, attributed the company’s success to “robust AI demand and strong execution,” which enabled Micron to drive 17% sequential revenue growth, exceeding their guidance range for the fiscal third quarter, according to a Wednesday (June 26) news release.

“We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND,” Mehrotra said.

Micron reported GAAP net income of $332 million, or $0.30 per diluted share, a significant improvement from the $1.896 billion loss in the same quarter last year. On a non-GAAP basis, the company posted net income of $702 million, or $0.62 per diluted share.

The company’s financial position also improved, with operating cash flow reaching $2.48 billion, compared to $1.22 billion in the prior quarter and just $24 million in the same period last year.

Looking ahead, Micron provided an optimistic outlook for the fourth quarter of 2024, projecting revenue of $7.60 billion (plus or minus $200 million) and diluted earnings per share of $0.61 (plus or minus $0.08) on a GAAP basis.

The company’s strong performance comes amid growing demand for AI-related technologies requiring advanced memory and storage solutions. Micron’s focus on high-margin products like HBM and data center SSDs appears to be paying off as the AI industry expands rapidly.

As part of its commitment to shareholders, the Micron Board of Directors declared a quarterly dividend of $0.115 per share, payable on July 23, 2024, to shareholders of record as of the close of business on July 8, 2024.

Micron’s results and outlook reflect the broader trend of AI driving growth in the tech sector, particularly for companies providing the hardware infrastructure necessary for AI development and deployment.

Alibaba.com Rolls Out AI Tools to Empower Small Businesses

In a move that underscores the growing importance of artificial intelligence in global trade, Alibaba.com announced significant adoption of its AI tools among small businesses on its platform. The announcement came on the eve of the United Nations Micro-, Small and Medium-Sized Enterprise (MSME) Day, highlighting the potential of AI to level the playing field in international commerce.

Kuo Zhang, president of Alibaba.com, revealed that approximately 30,000 suppliers on the platform have embraced these AI tools. “As we promote wider adoption of our AI tools amongst MSMEs, we also hope to expand our global supplier base to cover 100,000 suppliers in the next three years,” Zhang said in a news release.

The company’s recent survey sheds light on the impact of these AI tools. MSMEs using the technology reported a 37% increase in product exposure, potentially leading to new business opportunities. Moreover, these businesses have accepted 70% of the AI-generated optimization suggestions, indicating the practical value of the technology.

Zhang emphasized that half of the top 20 countries utilizing these AI tools are developing nations. This trend suggests democratizing advanced technology, potentially bridging the digital divide in global trade.

SoftBank Fund Eyes Investment in AI Search Startup Perplexity

Japanese technology investor SoftBank Group Corp’s Vision Fund 2 reportedly plans to invest between $10 million and $20 million in U.S. search startup Perplexity AI. According to Bloomberg News, this investment would value Perplexity at an impressive $3 billion.

The investment is expected to be part of a larger $250 million funding round, although sources familiar with the matter caution that the deal hasn’t been finalized and terms could still change.

Perplexity AI, based in San Francisco, has been making waves in the search engine market with its innovative approach. The company’s search tools provide users with instant answers to questions, sources and citations. What sets Perplexity apart is its use of various large language models, including those from OpenAI and Meta’s open-source Llama, to summarize and generate information.

This potential investment follows Perplexity’s successful January funding round, in which it raised $73.6 million from investors, including tech giants Nvidia and Amazon founder Jeff Bezos. That round valued the company at $520 million, indicating a significant leap in valuation if the SoftBank deal goes through.

Perplexity reported over 500 million queries served in 2023, achieved with minimal marketing expenditure. This organic growth, coupled with its innovative technology, appears to have caught the eye of major investors like SoftBank.

As AI continues to reshape the technology landscape, investments in companies like Perplexity underscore its potential to revolutionize how we access and process information online. The outcome of this funding round could have significant implications for the future of search technology and the broader AI industry.

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