Artificial intelligence surge drives tech industry growth for Micron, Alibaba and Perplexity

The artificial intelligence (AI) boom is changing the technology landscape, with industry giants and startups reporting significant successes and attracting major investments. Memory chip maker Micron Technology announced strong quarterly results, helped by demand for AI, and e-commerce giant Alibaba.com has adopted AI tools to empower small businesses around the world. At the same time, AI-powered search startup Perplexity attracted the attention of SoftBank's Vision Fund, which could receive a multi-million dollar investment at a $3 billion valuation. These developments underscore the growing influence of AI in various technology sectors, from hardware infrastructure to e-commerce and information retrieval.

Micron Technology reported a strong third quarter, helped by demand for artificial intelligence

Micron Technology, a provider of memory and storage solutions, announced strong financial results for the third quarter of fiscal 2024, which ended May 30, 2024. The company reported revenue of $6.81 billion, up significantly 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, attributes the company's success to "sustained demand for AI and strong execution," which enabled Micron to achieve sequential revenue growth of 17%, exceeding guidance for its fiscal third quarter, according to a press release issued Wednesday (June 26).

"We are building share in high-margin products such as high-bandwidth memory (HBM), and our data center SSD revenues are at record levels, a testament to the strength of our AI portfolio of DRAM and NAND products," Mehrotra said.

Micron reported GAAP net income of $332 million, or $0.30 per diluted share, a significant improvement over the $1.896 billion loss in the same quarter last year. On a restated non-GAAP basis, the company reported 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, up from $1.22 billion in the previous quarter and just $24 million in the same period last year.

Looking ahead, Micron provided an optimistic outlook for the fourth quarter of 2024, forecasting revenue of $7.60 billion (plus or minus $200 million) and GAAP diluted EPS of $0.61 (plus or minus $0.08).

The company's strong performance comes amid growing demand for AI-related technologies that require advanced memory and storage solutions. Micron's focus on high-margin products such as HBM and SSDs for data centers seems to be paying off as the AI industry is growing rapidly.

As part of its commitment to shareholders, Micron's board of directors declared a quarterly dividend of $0.115 per share to be paid on July 23, 2024 to shareholders of record as of the close of business on July 8, 2024.

Micron's results and forecast reflect the broader trend of AI growth in the technology sector, especially for companies that provide the hardware infrastructure needed to develop and deploy AI.

Alibaba.com adopts artificial intelligence tools to empower small businesses

Alibaba.com has announced a significant uptake of artificial intelligence tools among small businesses on its platform, highlighting the growing importance of artificial intelligence in global trade. The announcement was made on the eve of the United Nations Micro, Small and Medium Enterprises (MSME) Day, highlighting the potential of artificial intelligence to create a level playing field in international trade.

Kuo Zhang, president of Alibaba.com, said about 30,000 suppliers on the platform have already utilized these artificial intelligence tools. "As we drive greater adoption of our artificial intelligence tools among SMEs, we also hope to expand our global supplier base to 100,000 over the next three years," Zhang said in a press release.

A recent company study sheds light on the impact of these artificial intelligence tools. SMBs using this technology reported a 37 percent increase in product exposure, potentially leading to new business opportunities. Moreover, these businesses adopted 70% of the optimization suggestions created by artificial intelligence, indicating the practical value of the technology.

Zhang emphasized that half of the top 20 countries using these AI tools are developing nations. This trend suggests the democratization of advanced technologies, which will eventually bridge the digital divide in global trade.

SoftBank fund plans to invest in Perplexity, a startup specializing in search using artificial intelligence

Japanese tech investor SoftBank Group Corp's Vision Fund 2 is reportedly planning to invest between $10 million and $20 million in U.S. search AI startup Perplexity. According to Bloomberg News, this investment values 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 cautioned that the deal is not yet finalized and terms could change.

San Francisco-based Perplexity AI is breaking new ground in the search engine market with its innovative approach. The company's search tools provide users with instant answers to questions, sources, and citations. A distinctive feature of Perplexity 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 the company 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 jump in valuation if the SoftBank deal goes through.

Perplexity reported that it will serve more than 500 million queries in 2023, which was achieved with minimal marketing costs. This organic growth coupled with innovative technology seems to have caught the attention of large investors such as SoftBank.

As artificial intelligence continues to change the technology landscape, investments in companies like Perplexity highlight its potential to revolutionize the way information is accessed and processed online. The results of this funding round could have a significant impact on the future of search technology and the entire AI industry.