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| Here's a look at today's tech briefing: - FCC to vote on restoring net neutrality later this month.
- Amazon cuts hundreds of jobs in cloud computing division.
- Intel reports $7B operating loss for contract chip-making business.
- Microsoft and Quantinuum announce most reliable quantum computer yet.
Beth
p/beth-duckett | |
| 1 | | The U.S. Federal Communications Commission is expected to reinstate net neutrality rules later this month, overturning their repeal under the Trump administration. If approved, the proposal would bring back the Obama-era rules, giving the FCC more power over broadband providers. This means ISPs couldn't slow down, block, or make some internet traffic faster by charging extra. More: - The FCC voted to repeal the rules in 2017 under a Trump-nominated chair and Republican majority.
- In October, the FCC's newly established Democratic majority voted 3-2 to advance the process of restoring the rules.
- Republicans believed removing rules would boost innovation, while Democrats feared it would lead to internet traffic throttling.
- The FCC is expected to restore the rules at its April 25 meeting.
Zoom out: - With net neutrality, broadband services are seen as a vital resource under Title II of the Communications Act, giving the FCC more control over the industry.
- The FCC could bar providers from blocking or slowing content, and from creating "fast lanes" for pay-to-play internet access.
- Additionally, the rules give the FCC more power to tackle issues like service outages, security risks, data privacy, and consumer protection.
- According to the October proposal, the rules would not allow the FCC to regulate online speech or rates.
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| 2 | | Amazon Web Services laid off hundreds of employees in its store tech, sales, marketing, and global services divisions. A spokesperson confirmed the cuts today, describing them as "difficult but necessary" as the cloud division focuses on investing, hiring, and optimizing its resources. More: - AWS pinpointed "a few targeted areas of the organization" that it needs to streamline, the spokesperson said.
- The layoffs affected the AWS store technology team, including those overseeing the cashierless tech that's now being phased out from Amazon's grocery stores.
- Employees will receive pay and benefits for at least 60 days, along with eligibility for severance packages.
Zoom out: - The cuts are part of a larger restructuring under AWS sales chief Matt Garman.
- AWS, the world's biggest cloud provider, experienced a growth slowdown last year as companies cut their cloud spend amid an uncertain economy and rising interest rates.
- The cloud division reported 13% revenue growth in Q4, showing signs of stabilization.
- Amazon's ongoing downsizing includes over 27,000 job cuts in 2022 and 2023, with additional layoffs this year in divisions like Prime Video and advertising.
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| 3 | | Intel's chip-making arm faced a $7B operating loss last year, up from the previous year's $5.2B loss, according to a filing on Tuesday. It was the first time Intel disclosed sales totals for its contract chip-making business, known as Intel Foundry. Background: Under CEO Pat Gelsinger, Intel has been shifting toward making custom chips for other companies in addition to its own processors. Intel is focusing heavily on its foundry business to take on leader TSMC, fueled by booming demand from generative AI and other applications. Despite efforts to ramp up the business, Intel Foundry still only accounts for a small portion of the foundry market's revenue share, which is dominated by TSMC, according to Counterpoint data. 
What the numbers show: Intel Foundry experienced a $7B operating loss on $18.9B in sales last year, while in 2022, it recorded a $5.2B loss on sales of $27.5B. Its shares fell up to 7.3% in Wednesday trading following the disclosure. What's next: CEO Gelsinger expects foundry losses to peak this year before breaking even midway between now and the end of 2030. The chip-making business is expected to "drive considerable earnings growth for Intel over time," he said, adding that "2024 is the trough for foundry operating losses." Zoom out: In February, Intel Foundry disclosed plans to manufacture a custom chip for Microsoft and said it's in talks with other undisclosed customers. The company, among a handful of U.S.-based chip makers, recently secured $8.5B in grants and $11B in loans from the Biden Administration's Chips Act to boost domestic semiconductor manufacturing. | | | |
| 4 | | Microsoft and Quantinuum said they've developed the most reliable quantum computing system to date. The announcement marks a step toward the commercial viability of quantum computers, which have speeds far faster than traditional silicon-based computers. More: - Instead of binary bits, quantum computers work with quantum bits or qubits, which can represent multiple values simultaneously.
- Qubits are fast but easily prone to errors when disturbed due to their "noisy" nature.
- To help address this, researchers create excess qubits and apply error correction methods to generate a smaller and more reliable set of qubits.
- Microsoft and Quantinuum achieved a breakthrough by using an error correction algorithm on 30 physical qubits to produce four reliable qubits — the highest-ever ratio from a quantum chip.
- The error rate was 800 times better than relying on physical qubits alone. The researchers ran over 14,000 experiments on the system without an error.
Zoom out: - Quantum researchers have often said they need 100 reliable qubits to surpass conventional supercomputers.
- Neither Microsoft nor Quantinuum have predicted when this could occur.
- Quantum computing promises to tackle problems from encryption to materials development, achieving results in timelines impossible for classical computers.
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| 5 | | Spotify plans to raise prices for the second time in a year. The audio company will raise subscription prices in five markets including the U.K. and Australia later this month, with a similar hike planned for the U.S. later this year, according to Bloomberg. More: - Spotify's monthly premium plans range from $11 for an individual to $17 for a family.
- In markets like the U.K., Australia, and Pakistan, prices for individual plans will go up by $1 and $2 for family and duo plans by the end of April.
- The higher fees are meant to cover the cost of audiobooks, which have been available to Premium users since October. Subscribers get 15 hours of free audiobook listening per month
- Spotify last raised premium subscription prices in the U.S. and other countries in July.
Zoom out: - Spotify will also launch an $11 basic tier for individuals that offers ad-free music and podcasts but no audiobooks.
- That tier is the first of several new subscription plans, including a pricier option rumored to offer the long-awaited high-fidelity audio feature.
- Further offerings could help the company advance toward profitability as it attracts more subscribers.
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| 6 | | Microsoft is testing out an AI chatbot to answer Xbox customer support questions. Microsoft says its chatbot allows players to quickly get support in natural language by pulling information from Xbox Support pages. More: - The AI prototype, called "Xbox Support Virtual Agent," can answer players' questions using voice or text.
- The "embodied AI character" can also process game-related refunds.
- The company recently expanded the chatbot's access to more testers, hinting at an eventual broader rollout for Xbox users.
Zoom out: - The chatbot expands Microsoft's AI use beyond Bing and Office through its OpenAI collaboration.
- Meanwhile, PlayStation plans to add an AI image upscaler, PSSR, in its upcoming PlayStation 5 Pro console release.
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 | AI and technology writer | | Beth is a contributing editor and writer of Inside's AI and Tech newsletters. She has written for publications including USA Today, the Arizona Business Gazette, and The Arizona Republic, where she received recognition with a Pulitzer Prize nomination and a First Amendment Award for collaborative reporting on state pension cost increases. You can reach her at Beth.Duckett@yahoo.com. | | This newsletter was edited by Beth Duckett | |
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