T - Wall Street Breakfast Podcast: Meta IBM Launch Open Source AI Alliance

2023-12-05 06:35:37 ET

Summary

• Meta and IBM form an alliance of over 50 AI firms and research institutes to advocate for open and ethical AI development.
• AT&T chooses Ericsson over Nokia for a $14 billion contract.
• Five9 gains on reports that it is exploring a potential sale, with Zoom being a potential buyer.

Listen below or on the go on Apple Podcasts and Spotify

Meta (META), IBM launch open source AI Alliance with over 50 members. (00:22) AT&T ( T ) picks Ericsson ( ERIC ) over Nokia ( NOK ) for $14B Open RAN contract. (01:10) Five9 ( FIVN ) gains on report it's exploring a potential sale . (02:27)

This is an abridged transcript of the podcast.

Meta Platforms (NASDAQ: META ) and IBM (NYSE: IBM ) formed a coalition of over 50 artificial intelligence firms and research institutes, advocating for an open source model for AI development.

The group's stance differs from the closed approach of rivals Google ( GOOG ) ( GOOGL ) and OpenAI who is backed by Microsoft ( MSFT ), amid growing safety concerns over AI's power.

Companies in the new alliance include AMD ( AMD ), Dell ( DELL ), Oracle ( ORCL ), Intel ( INTC ), Sony ( SONY ), Fast.ai , Mass Open Cloud Alliance operated by Boston University and Harvard, CERN, and more.

The alliance, known as the AI Alliance , will concentrate on the ethical, open and trusted development of AI technology. It will also set up a technical oversight committee and governing board.

AT&T (NYSE: T ) will buy up to $14B of cell tower equipment in a five-year deal with Swedish supplier Ericsson (NASDAQ: ERIC ) to deploy its commercial-scale open radio access network ( Open RAN ).

Open RAN would allow interoperation between telecom network equipment from different vendors, thereby cutting costs drastically.

AT&T ( T ) is aiming for 70% of its wireless traffic to flow through open cloud-based platforms by late 2026 and fully integrated Open RAN sites are expected to start operating in coordination with Ericsson ( ERIC ) and Fujitsu ( OTCPK:FJTSF ) next year.

The contract is a major win for Ericsson ( ERIC ), which is currently responsible for around two-thirds of AT&T's ( T ) U.S. network.

Finnish rival Nokia (NYSE: NOK ) covers the rest of AT&T’s business.

The deal is expected to move all of AT&T's ( T ) new equipment purchases to Ericsson ( ERIC ), and replace Nokia's ( NOK ) existing gear.

AT&T's spend under the Ericsson ( ERIC ) deal is expected to be less than its projected wireless capital expenditure over the next five years.

Premarket Nokia ( NOK ) is down 5.1%. Meanwhile, Ericsson ( ERIC ) is up 4.2%. AT&T ( T ) is down 0.3%.

Five9 Inc. (NASDAQ: FIVN ) rose 7.4% amid a report that the call center software provider is evaluating a possible sale .

Five9 ( FIVN ) is working with advisers as it tries to gauge interest from potential buyers, according to a Bloomberg report on Monday, which cited people familiar with the matter.

The report comes a little bit more than two years after Five9 ( FIVN ) called off a deal to be sold to Zoom (NASDAQ: ZM ) after it didn't receive enough support from shareholders for its planned sale.

Zoom had agreed to acquire Five9 in an all-stock deal that valued the company at ~$14.7 billion in July 2021.

Zoom ( ZM ) has already had discussions with Five9 ( FIVN ) about resurrecting a transaction, according to the Bloomberg report.

Deliberations are ongoing and there's no certainty that a transaction will come to fruition. Five9 has a current market cap of $5.8 billion, while Zoom is valued at $21.4 billion.

Zoom ( ZM ) is scheduled to present at the Barclays Global Technology Conference on Wednesday, while Five9 ( FIVN ) will present on Thursday.

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On our catalyst watch for the day,

• The closing arguments in the DOJ case trying to block the Spirit Airlines ( SAVE )-JetBlue Airways ( JBLU ) merger will take place.

• The post-IPO quiet period ends for Cargo Therapeutics ( CRGX ) and Hamilton Insurance Group ( HG ) to free up analysts to post ratings.

• Signet Jewelers ( SIG ), Macy's ( M ), and Solo Brands ( DTC ) are some of the companies participating at the Coresight Research AI Conference.

• Johnson & Johnson ( JNJ ) will hold an Enterprise Business Review for the investment community. During the event, management will share a detailed review of the Innovative Medicine and MedTech businesses and their respective pipelines, as well as discuss the company’s long-term strategy to deliver sustained growth and value to shareholders.

U.S. stocks on Monday ended lower.

The Nasdaq ( COMP.IND ) retreated 0.84%. The S&P 500 ( SP500 ) slipped 0.54%, while the Dow ( DJI ) inched lower by 0.11%.

Of the 11 S&P sectors, six ended in the red, with Communication Services and Tech the top losers. Real Estate and Health Care topped the gainers.

Treasury yields were higher. The 10-year yield ( US10Y ) was up 4 basis points to 4.26%. The 2-year yield ( US2Y ) was up 6 basis points to 4.63%.

With the Federal Reserve in its blackout period this week ahead of its last monetary policy committee meeting of the year, market participants will focus on a host of labor market data over the next few days.

Monday's economic calendar was light, with only October factory orders on tap. The headline number slipped more than expected, extending a trend of data that has shown a slowdown in manufacturing and business activity.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down 0.2%, the S & P 500 is down 0.3% and the Nasdaq is down 0.5%. Crude oil is up 0.5% at more than $73 per barrel. Bitcoin is up 0.2% and above $41,000.

In the world markets, the FTSE 100 is down 0.6% and the DAX is up 0.3%.

The biggest movers for the day premarket: GitLab (NASDAQ: GTLB ) is up nearly 15% premarket after the announcement of upbeat Q3 earnings and a strong forecast.

On today’s economic calendar:

10 am The Fed’s Michael Gibson will testify before the House Financial Services Subcommittee on digital assets, financial technology and inclusion. The topic, “Fostering Financial Innovation.” Gibson is the Director of the Federal Reserve Division of Supervision and Regulation.

For further details see: