Microsoft saves $500 million with AI amid job cuts, Bloomberg reports

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Microsoft (MSFT.O) saved over $500 million last year in its call centers alone by leveraging artificial intelligence, Bloomberg News reported Wednesday. This comes as the tech giant announced plans to cut nearly 4% of its workforce to control costs amid heavy investments in AI infrastructure. In May, Microsoft disclosed layoffs affecting around 6,000 employees.

AI tools have boosted productivity across various departments, including sales, customer service, and software engineering. According to Microsoft’s Chief Commercial Officer Judson Althoff, AI is now managing interactions with smaller customers, a nascent effort already generating tens of millions of dollars in savings, Bloomberg reported citing an insider.

Althoff also revealed that AI contributed to 35% of the code for new products, speeding up launch times. Microsoft declined to comment on the report when contacted by Reuters.

This fiscal year, Microsoft has allocated $80 billion in capital spending, primarily to expand data centers to address capacity constraints for AI services. As big tech companies ramp up AI investments, they are simultaneously cutting costs in other areas to maintain profitability.

AI chip startup Groq targets $6 billion valuation in new funding round amid Saudi deal

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U.S.-based semiconductor startup Groq is in talks with investors to raise between $300 million and $500 million, aiming for a post-investment valuation of $6 billion, according to a report by The Information on Wednesday citing sources familiar with the matter.

The funding is intended to support Groq’s recently announced agreement with Saudi Arabia, which includes a $1.5 billion commitment secured in February to expand the delivery of Groq’s advanced AI chips to the kingdom.

Groq has indicated to investors that these contracts with Saudi Arabia could generate approximately $500 million in revenue in 2025, underscoring the significance of the deal in its growth trajectory.

The Silicon Valley-based company, known for manufacturing AI inference chips designed to optimize speed and efficiently execute commands from pre-trained models, has not yet responded to requests for comment.

In its previous financing round last August, Groq raised $640 million in a Series D round led by Cisco Investments, Samsung Catalyst Fund, and BlackRock Private Equity Partners, which valued the company at $2.8 billion.

Samsung unveils slimmer foldable phones to counter Chinese rivals and boost AI leadership

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Samsung Electronics on Wednesday revealed thinner and lighter foldable smartphones as it seeks to defend its premium segment against growing Chinese competition from Huawei and Honor, while Apple has yet to enter this niche market.

Having lost its global smartphone crown to Apple in 2023, Samsung is pushing to regain momentum by integrating AI features into its foldable devices. Mobile President and COO Choi Won-joon highlighted foldables combined with AI as poised to go mainstream, offering users a unique and differentiated experience. Samsung aims to lead in AI-powered smartphones by collaborating with partners like Google, contrasting Apple’s in-house AI approach that has faced delays.

Alongside the foldables, Samsung launched its first smartwatches featuring Google’s AI voice assistant Gemini, which offers personalized recommendations such as running locations.

Samsung’s premium strategy continues amid U.S. tariffs that could raise costs. The new Galaxy Z Fold 7 is 10% lighter and 26% thinner than the Fold 6 and priced 5% higher at $1,999. The Galaxy Z Flip 7 FE offers a more affordable option at $899. The Fold 7 uses Qualcomm’s Snapdragon 8 Elite chip, while the Flip 7 runs on Samsung’s own Exynos processors.

Analysts say the new models address bulkiness concerns and strengthen Samsung’s premium brand image. However, foldables remain niche with just 1.5% market share globally. Research firm Canalys expects foldable shipments to stay flat or slightly decline in 2025, with Samsung’s foldables accounting for 4% of total phone sales but 16% of sales over $800. Samsung’s dominance is challenged by strong Chinese sales, especially in China.

Samsung will focus foldable sales on the U.S., Europe, and South Korea. The company is also developing a tri-fold phone to launch by year-end, allowing users to fold the device three ways.

To prepare for U.S. tariffs, Samsung accelerated production and shipments destined for the U.S., manufacturing primarily in Vietnam, South Korea, and India. It is also mitigating China’s rare earth export restrictions by diversifying suppliers and increasing internal stockpiles.