Startup

Meta sees earnings surge in Q3, cautions on rising AI spending

Published

1 week ago

October 31, 2024

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Facebook parent Meta posted strong revenue and profit growth in the third quarter on the back of increased digital ad spending but cautioned that AI spending is expected to rise.

The social media company’s shares dipped about 3% in after-hours trading.

The California-based firm’s net profit surged 35% year-on-year to $15.7 billion. Its revenue in the quarter rose to $40.6 billion, up 19% from the corresponding previous quarter.

“It’s clear that there are a lot of new opportunities to use new AI advances to accelerate our core business that should have strong ROI over the next few years, so I think we should invest more there,” Meta Founder and Chief Executive Officer, Mark Zuckerberg, said, during the earnings call.

“Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there too,” he added.

AI has been a significant area of focus for the company, which has developed various AI services such as Meta AI, creator AIs, business AIs, as well as internal coding and development AIs.

Its AI assistant, Meta AI, available across Meta’s suite of apps—WhatsApp, Messenger, Instagram, and Facebook—enables users to pose inquiries on a wide array of topics.

“We are seeing rapid adoption of Meta AI and Llama, which is quickly becoming a standard across the industry,” remarked Zuckerberg.

Meta has been expanding its Llama family of foundation models, including the first frontier-level open-source model, as well as new and industry-leading small and medium-sized models. This quarter, the company released Llama 3.2, including the leading small models that run on device and open source multimodal models.

“The Llama 3 models have been something of an inflection point in the industry but I’m even more excited about Llama 4 which is now well into its development. We are training the Llama 4 models on a cluster that is bigger than 100,000 H100s or bigger than anything that I’ve seen reported for what others are doing,” Zuckerberg noted.

The Meta chief expects the smaller Llama 4 models to be ready sometime early next year.

AI spends

Tech giants like Meta, Microsoft, and Google have significantly increased their capital expenditure to expand their server and data centre infrastructure, driven by the exponential growth of artificial intelligence (AI) and its demanding computational requirements.

Meta’s capital expenditure for the third quarter was $9.2 billion, driven by investments in servers, data centres, and network infrastructure.

The company expects full-year 2024 capital expenditure to be $38 billion to $40 billion, updated from its prior outlook of $37 billion to $40 billion.

“We continue to expect significant capital expenditure growth in 2025. Given this, along with the back-end weighted nature of our 2024 CapEx, we expect a significant acceleration in infrastructure expense growth next year,” Meta’s Chief Financial Officer Susan Li said, during the call.

Ads business

The Facebook and Instagram parent saw an 18.5% growth in its advertising revenue—its main revenue source—which increased to $39.9 billion from $33.6 billion in Q3 FY23. The revenue of the total family of apps touched $40.3 billion; this includes advertising revenue.

Meta’s family daily active people was 3.29 billion on average for September 2024, an increase of 5% year-over-year.

Moreover, Reality Labs, which works on virtual reality and augmented reality gadgets and Meta’s metaverse vision, posted $270 million in revenue in Q3, up 29% driven by hardware sales. The unit’s operating loss stood at $4.4 billion.

Li explained that Reality Labs expenses were $4.7 billion, up 19% year-over-year, driven primarily by higher headcount related expenses and infrastructure costs.

The social media giant ended the third quarter with 72,404 employees, up 9% from a year ago.

“As we are evaluating where there are opportunities for us to make good investments, we really think about there is a bucket of very ROI-driven headcount opportunities,” Li said.

Meta expects full-year 2024 total expenses to be between $96 billion and $98 billion, updated from its prior outlook of $96 billion to $99 billion.

The social media firm expects Q4 total revenue to be in the range of $45 billion to $48 billion. In the same period last year, revenue stood at $40.1 billion. A midpoint of the forecast, $46.5 billion, would signify a 16% year-over-year growth.

“We are seeing ongoing momentum across our core priorities, and we have exciting opportunities ahead of us to drive further growth in our core business in 2025 and capitalise on the longer-term opportunities ahead,” Li noted.

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Startup

Swiggy IPO gets oversubscribed led by QIB bids

Published

44 mins ago

November 8, 2024

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Foodtech giant Swiggy IPO was oversubscribed 1.07 times by Friday afternoon, the third day of its book-building process.

Qualified Institutional buyers (QIBs), which typically invest on the last day to gauge overall market demand, came through for the company’s IPO, with the portion oversubscribed 1.52 times.

According to the BSE, non-institutional investors(NIIS) made bids for 22% of the allocated issue size, while retail investors subscribed to 97% of the portion.

The Sriharsha Majety-led company saw the quota reserved for employees being subscribed 1.38 times.

On the first and second days of the book-building process, Swiggy IPO was subscribed only 35% and 12%, respectively.

Swiggy has secured nearly Rs 5,085 crore (about $605 million) from anchor investors, including the life insurance and mutual fund divisions of HDFC, ICICI, and SBI. The anchor book attracted participation from over 75 major domestic mutual funds, along with international investors such as Astrone Capital, Fidelity, and BlackRock.

The Bengaluru-headquartered company, which competes with publicly listed Zomato and General Catalyst-backed Zepto, has set its IPO price band at Rs 371 – Rs 390 per equity share.

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Startup

OpenAI spent $10 million on this domain: Here’s why!

Published

2 hours ago

November 8, 2024

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Have you checked out X (formerly Twitter) lately? If you have, you might have come across an intriguing post by Sam Altman featuring a mysterious URL called “Chat.com”, with no caption. Curious? When you click on it, you’re taken straight to OpenAI’s groundbreaking tool, ChatGPT.

OpenAI has made headlines recently with a jaw-dropping move: they reportedly shelled out over $10 million for this domain! At first glance, this looks like a steep price tag in an era where many brands are trimming their budgets to stay lean.

So, what’s the story behind this hefty domain purchase? Let’s take a closer look at this!

Why OpenAI spent millions of dollars on a domain

This strategic move is driven by OpenAI’s mission to establish itself as a dominant force in the realm of AI-powered tools, particularly through its flagship product, ChatGPT.

In the tech world where innovation reigns supreme, securing a domain that perfectly aligns with the branding and functionality of its most popular service is a given. Today, ChatGPT has rapidly become a go-to AI tool used by millions for generating images, answering questions and offering assistance with content creation and even programming.

So, OpenAI’s purchase of chat.com is not just about owning a cool web address—it’s a calculated move to enhance its digital identity and ensure that the ChatGPT experience remains tied to its brand as it expands its offerings.

The bigger picture: OpenAI and HubSpot

In a surprising turn of events, the tech world is buzzing over OpenAI’s recent million-dollar domain acquisition, leaving many to wonder about its intriguing backstory. The domain in question, chat.com, has quite the history—it was initially registered way back in September 1996.

Fast forward to 2023, and it found a new owner in Dharmesh Shah, the co-founder and CTO of the widely popular CRM platform HubSpot, who purchased it for a staggering $15.5 million! But the plot thickens!

Just a few months later, in March, Dharmesh dropped a bombshell: he sold chat.com to an anonymous buyer for an undisclosed sum, which has now been confirmed to be OpenAI. While Sam Altman has remained tight-lipped about the specifics of the acquisition, reports from The Verge suggest that Dharmesh may have pocketed more than $15 million from the sale.

This hefty investment in chat.com is more than just a flashy purchase; it’s part of OpenAI’s strategic vision. Owning a domain that’s not only memorable but also inspires trust is crucial for establishing credibility and attracting customers in this competitive landscape.

Chat.com is now ChatGPT’s new destination

Spending more than $10 million on a domain might seem extravagant, but for OpenAI, this investment is a strategic move aimed at building a more unified, and recognisable brand. With chat.com, the company positions itself at the centre of the rapidly growing AI-powered market. As OpenAI continues to innovate, this domain acquisition will likely prove to be one of the company’s most crucial investments in securing its place at the top of the AI industry.

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Startup

Trent Q2 profit grows 47% to Rs 335 Cr; sales jumps 39.3%

Published

3 hours ago

November 8, 2024

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Tata Group retail firm Trent on Thursday reported a 46.9% growth in its consolidated net profit to Rs 335.06 crore for the second quarter ended September 2024.

The company had posted a consolidated net profit of Rs 228.06 crore a year ago, according to a regulatory filing from Trent, which operates retail stores under brands like Westside, Zudio, and Star.

Its consolidated revenue from operations increased 39.37% to Rs 4,156.67 crore during the quarter under review. It was Rs 2,982.42 crore in the year-ago period, it added.

Trent’s total expenses rose 48.49% to Rs 3,743.61 crore in the September quarter.

As of September 30, Trent was operating 226 Westside, 577 Zudio and 28 stores across other lifestyle concepts, the company said in an earning statement.

“During the quarter, we opened 7 Westside and 34 Zudio stores (including 1 in Dubai) across 27 cities. We also consolidated 9 Westside and 16 Zudio stores,” it added.

Its Chairman Noel N Tata said: “Consumer sentiment has remained relatively muted. This coupled with seasonality has meant that retail businesses have faced headwinds. In the foregoing context, the team has delivered strong results across brands, concepts, categories and channels in Q2”.

Shares of Trent Ltd on Thursday settled at Rs 6,498.45 on BSE, down 6.54% from the previous close.

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