Larry Dignan

Running AI on-premise makes sense for multiple reasons including sovereignty, data control and in many cases cost. Granted I was a little early with this on-prem AI call in 2024 and 2025, but it appears there's traction now despite higher memory prices. Three data points:

• Dell's quarterly results were fueled by AI servers. The company noted that enterprises were refreshing their infrastructure for AI workloads.
• On Elastic's quarterly results, hybrid architecture was driving deals.
• MongoDB said its Enterprise Advanced was a key part of big deals in its most recent quarter. CEO CJ Desai said: "Because of a variety of issues related to AI for mission-critical applications, there is this trend where customers do want to keep their critical data estates on-prem. And this is not just only in financial services, we are seeing that in health care and other verticals like government. When I was in Europe and even in Asia, I'm also seeing there that there is a preference for those industries to also use MongoDB potentially with EA (Enterprise Advanced) and only certain workloads in the cloud."

AWS in its latest update said that its facilities have been damaged. If you have instances in the Middle East keep monitoring the AWS Health Dashboard. Key excerpts:

"We are providing an update on the ongoing service disruptions affecting the AWS Middle East (UAE) Region (ME-CENTRAL-1). The overall state of the region remains largely unchanged from our previous update. We continue to work closely with local authorities and are prioritizing the safety of our personnel throughout our recovery efforts. Teams continue to assess the damage to the affected facilities and are working to restore infrastructure impacted by the event."

"Finally, even as we work to restore these facilities, the ongoing conflict in the region means that the broader operating environment in the Middle East remains unpredictable. We strongly recommend that customers with workloads running in the Middle East take action now to migrate those workloads to alternate AWS Regions. Customers should enact their disaster recovery plans, recover from remote backups stored in other regions, and update their applications to direct traffic away from the affected regions. For customers requiring guidance on alternate regions, we recommend considering AWS Regions in the United States, Europe, or Asia Pacific, as appropriate for your latency and data residency requirements."

As noted yesterday, AI investment has surged in the Middle East in the last 18 months or so. You have to wonder if the Iran conflict is going to put a deep freeze on spending or at least pause some of the investment.

Apple launched iPhone 17e, a budget version of its flagship phone, and a new iPad Air with the M4 chip.

The iPhone 17e features the next-gen A19 chip and the C1X cellular modem that's twice as faster as the C1 in the iPhone 16e. The phone has a 48MP camera and 6.1-inch Super Retina XDR design. The device will start at 256GB of storage for $599.

Apple also launched the iPad Air with M4 chip. The iPad Air is upgraded with new CPU and GPU and is up to 30% faster than its predecessor. The starting price is $599 for the 11-inch model and $799 for the 13-inch model.

The launches are the warm-up act for a broader portfolio refresh expected on March 4.

Om Malik in his newsletter dissected Jack Dorsey's Block memo about AI-related layoffs. In his memo, Dorsey said Block would cut 40% of the company's staff due to AI creating new ways to work. Malik noted that Block really overhired during Covid and hasn't been run efficiently. In fact, few technology companies are run efficiently because they have lived off the largesse of cloud and high-margin software models.

Malik said:

"In way too many words, what Jack was saying was that AI is here, it is changing how we work, and what it means to be a company. All three points are true. What is also true is that when it comes to technology companies, AI is a convenient narrative that masks a deeper problem.

Operational inefficiencies, over-hiring, and general lack of financial discipline are a common malaise, especially among mid-tier publicly traded tech companies that have lived on the largesse of cloud, mobile, and ZIRP. Block is a poster child, as the data shows."

Fun fact: I was part of an academic research team at Temple University that wrote a business school case study on how Facebook, now Meta, scaled its hiring in 2020. Technology companies panic hired people and reading the Facebook case today is almost comical. Malik's post highlights how technology companies have largely been undoing the great hiring spree from COVID.

Following the headlines about Anthropic's deal with US miliary has been challenging not to mention exhausting. As most of you know by now, Anthropic was blacklisted by the US government, then reportedly used in the bombing of Iran and details are still being reported. Meanwhile, OpenAI now has an agreement with the military and upholds redlines and its guardrails. Here's a roundup of the moving parts you may have missed.

I maintain that the Anthropic battle with the Department of War has turned out to be great for Claude visibility. On Apple's App Store, Claude currently is No. 1. Claude had been somewhere in the 20s before.

AWS has multiple services down in the United Arab Emirates after data centers are without power due to the war in the Middle East. AWS said the facilities in UAE are running on backup power. EC2, Amazon DynamoDB, Amazon S3 and dozens of other services are struggling. In its latest update, AWS said:

"We are actively working to restore power and connectivity, after which we will begin recovery of affected resources; full recovery is still expected to be many hours away. We recommend that affected customers failover, and backup any critical data, to another AWS Region."

Equinix and the Canada Pension Plan (CPP) Investment Board bought AtNorth, a data center provider in the Nordics, for $4 billion including debt. AtNorth will continue to operate under its own brand. CPP owns 60% of AtNorth with Equinix holding 40%.

In a post on X, Block CEO Jack Dorsey said it will conduct layoffs in one swoop instead of cutting gradually.

"Today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation. I'll be straight about what's happening, why, and what it means for everyone..."

"We're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly."

Block workers who are cut get salary for 20 weeks plus 1 week per year of tenure. There's also six months of healthcare.

Intuit reported a strong second quarter that topped Wall Street non-GAAP earnings estimates by 47 cents a share. The company reported second quarter non-GAAP earnings of $4.15 a share on revenue of $4.65 billion, up 17.45% from a year ago. Second quarter GAAP earnings were $2.48 a share. Intuit's results were strong across its operating units in the second quarter. The problem was the outlook.

The company projected revenue of $20.997 billion to $21.186 billion compared to estimates of $21.20 billion. That guidance isn't much of a miss, but Wall Street is skittish about software providers.

For the third quarter, Intuit projected revenue growth of 10%.

• Intuit, OpenAI forge integration pact: Why it could be a $100 million win win
• Intuit starts to scale AI agents via AWS
• Constellation ShortList™ Services-Centric Cloud ERP

Google launched Nano Banana 2, the sequel to the viral image generation and editing model. You didn't know you needed an upgrade, but pretty sure you all will test it out. The model is available via the Gemini API in Google AI Studio and Vertex AI. It is available for use in Google Antigravity and Firebase. Consumers can try the new image model in the Gemini App.

AMD is investing $150 million in Nutanix shares at $36.26 as the two companies are partnering on enterprise AI. The two companies are pursuing a joint roadmap to integrate AMD ROCm and AMD Enterprise AI software into the Nutanix Cloud Platform and the Nutanix Kubernetes Platform, which will use EPYC CPUs and AMD Instinct GPUs. The deal equates to more distribution for Nutanix. AMD will also fund up to $100 million to support joint engineering and go-to-market efforts. Separately, Nutanix reported better-than-expected fiscal second quarter results.

Accenture and Mistral AI said they will co-develop and deliver enterprise AI. The Accenture partnership gives Mistral AI more distribution, but the European LLM player already has multiple partners including SAP and IBM. Accenture will become a customer of Mistral AI.