Nvidia becomes world's most valuable company

Plus: Forbes vs. AI: legal showdown over content theft

June 19, 2024

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Nvidia becomes world's most valuable company

Nvidia, the tech titan known for its cutting-edge computer chips, has surged past Microsoft to claim the title of the world's most valuable company. The company’s stock has hit unprecedented highs, more than doubling since January, driven by a skyrocketing demand for AI technology.

Riding the AI wave: Nvidia’s astronomical rise is tied to the booming artificial intelligence industry. As companies worldwide race to develop sophisticated AI systems, the demand for Nvidia’s high-performance chips has become insatiable. This surge has propelled Nvidia’s share price up by over 3,000% in the past five years, pushing its market valuation past $3.3 trillion.

Toppling the giants: In a significant shift on Wall Street, Nvidia dethroned Microsoft, which, along with Apple, had long dominated the tech hierarchy. Nvidia's ascent marks a new era, with AI taking center stage in the tech world, reshaping industries and economies alike.

Staggering financials: Nvidia’s financial growth is nothing short of extraordinary. The company’s revenue has been tripling quarterly, with profits soaring at even faster rates. Nvidia’s stock has jumped nearly 174% this year, accounting for nearly a third of the S&P 500’s gains through May.

Broader tech momentum: While Nvidia leads the charge, other tech giants have also seen substantial gains. The top five most valuable companies globally are now rooted in Silicon Valley or Washington State, highlighting the relentless dominance of the US tech sector.

Nvidia's unprecedented rise underscores the transformative power of AI and the pivotal role of advanced chip technology in driving the next wave of innovation. As AI continues to revolutionize industries, Nvidia stands at the forefront, shaping the future of technology.

Forbes has thrown down the gauntlet, threatening AI startup Perplexity with legal action over alleged "willful infringement" of its copyright, according to a letter obtained by Axios.

Why it matters: Publishers are fiercely defending their intellectual property in an era where both tech giants and nimble startups are leveraging AI to generate content. This battle highlights the growing tension between traditional media and cutting-edge technology.

The Incident:

  • The letter: Forbes' general counsel, MariaRosa Cartolano, issued a stern warning following accusations by chief content officer Randall Lane. Lane claimed Perplexity's AI chatbot plagiarized Forbes' reporting without proper attribution.

  • The accusation: The chatbot not only copied Forbes' story but also misled users by citing sources that were merely aggregates of the original Forbes report. Perplexity pushed this content via notifications, an AI-generated podcast, and a YouTube video, which outranked Forbes' original article on Google search.

Perplexity's response:

  • Defense: CEO Aravind Srinivas acknowledged the issue on social media, attributing it to a new feature with "rough edges" and promising improvements. He admitted the need for better source attribution.

  • Funding and backing: Perplexity has raised $165 million and boasts a valuation over $1 billion, with backing from tech titans like Jeff Bezos, Google's Jeff Dean, and former YouTube CEO Susan Wojcicki.

Forbes' demands:

  • Immediate actions: The letter demands that Perplexity remove the misleading content, reimburse Forbes for any ad revenue from the infringement, and provide assurances that it will not use Forbes' intellectual property without permission in the future.

  • Deadline: Forbes expects a response within 10 days, reserving the right to take further action.

The bigger picture:

  • Industry reactions: While some news outlets like the New York Times have opted for lawsuits against AI companies, others, including the Financial Times, Axel Springer, and the Associated Press, have secured licensing deals. This highlights the varied strategies being employed to safeguard intellectual property in the evolving AI landscape.

Adobe vows not to train AI on customer data amid backlash

Adobe has updated its terms of service to clearly state it will not use customer data to train AI systems, following recent customer concerns over its data usage policies.

Why it matters: Recent changes to Adobe's terms of service sparked fears that the company might be using customer content to train AI, leading to an uproar and subscription cancellations.

Adobe's stance: Adobe Chief Strategy Officer Scott Belsky emphasized that the company never intended to claim ownership of customer work or use it for AI training. However, Adobe does utilize customer data for operational purposes, such as creating thumbnails and preventing the storage of child sexual abuse material.

Key changes:

  • Adobe has explicitly promised not to train AI systems with customer data.

  • The company clarified the license terms for its optional beta programs, separating them from standard data usage.

Firefly AI and Adobe Stock: Adobe’s Firefly generative AI engines are trained using content from Adobe Stock, for which Adobe has explicit licenses. Adobe shares some Firefly revenue with contributors to its stock image collection.

Customer concerns: The backlash over data usage has led to subscription cancellations and threats from customers worried about the impact of generative AI on their jobs. Adobe’s own employees were also confused, prompting the company to clarify its policies internally.

Legal troubles: In addition to the data controversy, Adobe faces a lawsuit from the Justice Department for allegedly making its subscriptions too difficult to cancel.

The bottom line: Belsky expressed hope that Adobe's transparency and updates will inspire industry-wide changes and improve the company's reputation in the long run.