Tech News Now: Elon Musk snags an early win, Nvidia earnings on deck, and more

Tech News Now: Big Tech Magnificent 7 CEOs Elon Musk, Sam Altman, Satya Nadella, Tim Cook, Jensen Huang, Sundar Pichai, Andy Jassy

Good morning, happy MondayTuesday and welcome to Tech News Now, TheStreet’s daily tech rundown.

In today’s edition, we’re covering an early apparent success out of Elon Musk’s brain-chip startup Neuralink, the last of the Magnificent Seven (Nvidia) earnings on deck for Wednesday, OpenAI’s reported $86 billion valuation and a new tech accord that was announced last week.

Tickers we’re watching today:  (NVDA) ,  (AAPL) and  (MSFT) .

Let’s get into it.

Musk: Neuralink’s first patient ‘seems to have made a full recovery’

The first person implanted with one of Neuralink’s brain chips has made a full recovery, according to Musk, the company’s CEO, and is now able to control a computer mouse with their thoughts.

“Progress is good, and the patient seems to have made a full recovery, with no ill effects that we are aware of,” Musk said in a Spaces on his social media platform X. “Patient is able to move a mouse around the screen by just thinking.”

Neuralink was not immediately available for comment.

The brain chip startup launched its first human trial in September after receiving regulatory approval despite ongoing health and safety concerns.

The initial target of the trial is patients with quadriplegia; the idea is to create an interface between a computer and the patient’s brain which would enable the patient to control devices with their thoughts.

Musk has also hyped future versions of the product, which he said — without evidence — could enable people to experience alternate realities.

Despite its regulatory approval, Neuralink has faced scrutiny over its practices from the Physicians Committee for Responsible Medicine (PCRM), a nonprofit organization that has accused Musk of misleading Neuralink investors.

Dan Ives: ‘Get the popcorn ready’ for Nvidia

Nothing has proved to Wall Street the short-term value potential of artificial intelligence like Nvidia, which posted record earnings at every step throughout 2023. The stock has been on a steady and meteoric climb — this time last year, shares of Nvidia were trading at a little over $200.

This morning, the stock — down nearly 5% in after-hours trading — was at $721 per share.

With a $1.8 trillion market cap, Nvidia is among the largest companies in the country, surpassed only by Microsoft and Apple.

The stock has already risen close to 50% in 2024 alone.

Set to deliver fourth-quarter earnings after the bell Wednesday, Wall Street is expecting earnings of $4.60 a share and revenue of $20.5 billion.

While Wedbush’s Dan Ives expects another major earnings beat, he said the focus for Nvidia on Wednesday is all on the pace of growth within the data center. Ives called Nvidia’s pending earnings “key for the tech world and broader markets.”

“When Nvidia holds its conference call this week you will be able to hear a pin drop on trading floors across Wall Street,” Ives said in a note. “The AI Revolution starts with Nvidia and in our view, the AI party is just getting started. Get the popcorn ready.”

OpenAI’s latest share sale

OpenAI, the company behind ChatGPT, has completed a deal allowing employees to sell shares in the company at a valuation of $86 billion, according to a recent Bloomberg report.

The sale was initially supposed to occur last year, but was disrupted by the boardroom drama that culminated in CEO Sam Altman’s ouster and almost immediate reinstatement in November.

OpenAI has also discussed raising funding that could lift its valuation to $100 billion, according to Bloomberg.

Altman, meanwhile, is working to raise between $5 trillion and $7 trillion to fund a chip-making venture, according to the Wall Street Journal. He is reportedly in talks with investors including the government of the United Arab Emirates.

Taiwan Semiconductor Manufacturing (TSMC), the largest chip-maker in the world, reported around $32 billion in capital expenditure in 2023, a fraction of the $7 trillion Altman is seeking.

The Tech Accord

20 of the largest tech names in the world announced their intention to sign a so-called “AI Elections Accord” on Feb. 16. The participating companies include OpenAI, X, Google, Microsoft, Meta, IBM, Amazon, Anthropic and LinkedIn.

The voluntary pact acknowledges the electoral dangers posed by the combination of their AI models and social media platforms, and seeks to mitigate this risk through a number of vague measures including a cross-platform investment in technology to detect “deceptive AI election content,” in addition to measures to educate the public and increase transparency.

The agreement would not prohibit the creation or dissemination of deceptive political content.

The Accord did not respond to TheStreet’s detailed request for comment.

More deep dives on AI:

A lengthy blog post by Microsoft promises that the company will attempt to increase its guardrails, expand watermarking efforts and increase red teaming of its models. Guardrails, however, can be worked around — the recent, viral deepfaked images of Taylor Swift were created using Microsoft’s tools — and watermarks, according to OpenAI itself, can easily be stripped from an image.

“There is no way the tech sector can protect elections by itself from this new type of electoral abuse,” Microsoft President Brad Smith wrote. “And, even if it could, it wouldn’t be proper. After all, we’re talking about the election of leaders in a democracy. And no one elected any tech executive or company to lead any country.”

Microsoft did not respond to TheStreet’s detailed request for comment regarding this point.

AI researchers and ethicists have previously told TheStreet that the greatest danger posed by AI and the tech industry involves the highly impactful concentration of unregulated and non-democratic power.

The AI Corner

Reddit has signed a $60 million licensing deal with an unnamed AI company, according to Bloomberg.

Reddit will allow this unnamed, “large AI company” access to its user-generated content to train AI models.

Until recently, AI companies trained their models for free, though that practice has been called into question by a number of lawsuits from artists, media outlets and authors claiming that the ingestion of content without compensation, credit or permission is unfair.

The tech companies have largely argued that the practice falls under fair use; the U.S. Copyright Office has yet to clarify its stance on the process of training models.

Contact Ian with AI stories via email, [email protected], or Signal 732-804-1223.