Drone Industry Advances Amid AI Boom: Regulatory Wins and Economic Challenges

Drone companies are making huge leaps in regulatory approvals -- the path to scale will still be tough

I will preface this newsletter by saying that, despite my best efforts, I still can't get a potato delivered to my house via drone. I've been excited to get said potato for almost three years now -- ever since a friend rang me up and told me that, exactly 6.2 miles away from my home in Arkansas, they were flying drones out behind a Walmart. Naturally, I abandoned my desk and drove on over to see them for myself. And I ended up writing about the operation, startup Zipline's first outpost in the U.S., for our magazine back in Dec. 2021. At the time, there were only a handful of people on the delivery list, and my apartment wasn't in range. I really wanted to see a potato drop out of the sky, so I tried again in early 2023 when I had moved but received a message back about a month later that Zipline was only flying close to its home base in Pea Ridge and couldn't deliver to me. Earlier this week, I thought I'd check again. My house is still out of pocket -- no potato. (For all those wondering: No, DroneUp, which also makes deliveries with Walmart in Arkansas, won't deliver a potato to my house either.) But while I will continue to gripe about the potato until it drops from the sky, things have never looked better for commercial drone delivery in the U.S. Last year, the Federal Aviation Administration (FAA) started issuing exemptions for companies to fly drones beyond visual line of sight, known in shorthand by people in the industry as "BVLOS." What exactly does that mean, you ask? Drone operators who are granted the exemption no longer have to have a human watch a drone fly for the entire course of its journey. In other words, a huge burden that has prevented companies from true scale has been lifted for some. This was a huge step for the industry when the FAA offered its first exemption to UPS, which uses drone startup Matternet for deliveries, and uAvionix at the end of last year. Shortly after, the FAA extended approvals to Zipline and, just earlier this year, DroneUp and Amazon's Prime Air, too. "We've seen a pretty big acceleration in the last few years, and we're starting to see the regulatory system move a little faster," says James Grimsley, who runs the Choctaw Nation of Oklahoma's drone program and was selected by Secretary of Transportation Pete Buttiegeg to help advise the FAA on integrating drones into the airspace. The FAA, which is expected to release the initial draft of its formal BVLOS legislation later this year, is making a "major leap," Grimsley explains, by reorienting its rules away from its historic dependence on human eyesight and relying on technology. These changes are, indeed, allowing companies to scale their U.S. operations. Zipline told me, without providing any specific numbers, that since the approval they've tripled the number of U.S. customers they are serving and also increased their U.S. service areas. That includes expanding Arkansas deliveries into Missouri (though still not to my house). Amazon Prime Air says they are expanding into the West Valley Phoenix metro area later this year. Matternet is planning to launch a delivery service in Mountain View, Calif. And the FAA has started allowing multiple carriers, including Alphabet's Wing, to operate all at once in Dallas. The irony is that, as these technologies start to become prolific, they face the two next frontiers: 1) Making the financials of scale work. That's already led to difficult choices for DroneUp. And 2) The contentious introduction into society. Amazon Prime Air is already seeing some resistance, as residents of a small town north of Houston, including its mayor, have complained that the drones are too noisy. (In response to this, Amazon pointed me to statements made by the city manager in a meeting that indicated that, during his team's own testing, the noise levels stayed below the city's ordinance limit. Amazon also said that its new drone design will be quieter.) The potatoes are starting to drop. It doesn't look like everyone wants them to. A quick note... In observance of Labor Day in the U.S., you won't be receiving this newsletter in your inbox on Monday. Enjoy your long weekend, and see you Tuesday! Telegram's problems. The criminal charges brought against Telegram CEO Pavel Durov in France are catastrophic for the company, the Financial Times warns. The social network slash messaging app is a loss-maker and has raised around $2.4 billion in debt financing. Now that the platform is associated with child sexual abuse material, it's looking less likely that Telegram can hold an IPO anytime soon, but its bonds will mature in 2026. The newspaper also reports that the European Commission is investigating Telegram's reported user numbers, which were just under the threshold needed to start imposing serious content moderation rules on the company. Intel's options. Intel is reportedly exploring a potential split of its design and "foundry" contract chipmaking businesses, as well as the possible scrapping of new factory build-outs. According to Bloomberg, Morgan Stanley and Goldman Sachs are helping the company figure out how to survive its dreadful slump, which is largely down to Intel falling behind in AI chips while failing to attract enough big customers to its foundry business. Alexa taps Anthropic. Amazon's revamped Alexa virtual assistant will reportedly be primarily powered by Anthropic's Claude chatbot. According to Reuters, Claude performs better than Amazon's in-house AI model. Amazon, which has invested around $4 billion in Anthropic, will apparently charge $5-$10 per month for the smarter version of Alexa, leaving the classic (dumber) version as a free offering. Meanwhile, Apple and Nvidia are reportedly in talks to join OpenAI's new funding round. -- Meta AI's number of weekly active users, as disclosed by CEO Mark Zuckerberg. "Growing quickly, and we haven't even rolled out in UK, Brazil, or EU yet," he wrote. Those territories require Meta to get users' consent before training its models on their personal data, but it doesn't want to take that route. OpenAI says ChatGPT has over 200 million weekly active users. Nvidia stock is sinking. Wall Street analysts say it's still a buy, by Will Daniel Elon Musk's X will shut down its SF headquarters in two weeks -- on Friday the 13th, by Kali Hays Southeast Asia becomes the 'most important' overseas market for Chinese EVs as the West turns to tariffs, by Lionel Lim Generative AI is accelerating the spread of fake reviews and malicious apps, by Sage Lazzaro Elon Musk threatens a top Brazil judge who moved to block X in the country, by Marco Quiroz-Gutierrez Instagram reportedly explores real-time integration of Spotify, by Chris Morris Musk beats Dogecoin suit. Elon Musk and Tesla are in the clear over their promotion of the Dogecoin cryptocurrency, which a group of enraged investors claimed was a pyramid scheme, Bloomberg reports. According to U.S. District Judge Alvin Hellerstein, when Musk tweeted "One word: Doge" and announced that Tesla would accept the memecoin as payment for merch, that was "aspirational" rather than something any "reasonable investor could rely upon."

The AI economy keeps cruising, so Nvidia will be fine - but rivals loom - SiliconANGLE

The AI economy keeps cruising, so Nvidia will be fine -- but rivals loom All eyes were on Nvidia's earnings report this week as a proxy for the artificial intelligence economy, and even for the graphics chip giant, it was too much to live up to. Nvidia earnings disappointed, but really, how could they not? Most of the news was actually quite good, as growth looks to continue for a while. After all, demanding new models and services keep coming out at a rapid clip. Moreover, AI investment doesn't seem to be slowing down: Leader OpenAI, which says ChatGPT is being used by 200 million people a week, is raising billions of dollars at a $100 billion valuation from Nvidia and Apple, ROI sure things such as coding assistants keep raising big bucks, and Meta's open-source Llama models have been downloaded 350 million times. Investor concern is understandable, though, as competitors also keep hammering away: Cerebras threw down the gauntlet to Nvidia with a new inference service. And IBM started offering Intel's Gaudi chip in its cloud. Those are on top of Advanced Micro Devices buying ZT Systems last week. For a read on what's coming next in cloud, check out John Furrier's exclusive with Amazon Web Services CEO Matt Garman: Can he pull a Tom Brady surprise with generative AI? AWS re:Invent will be here before we know and we'll find out a lot more then, but think of this as a preview. Most enterprise providers turned in upside earnings this week -- including Dell, HP, Nutanix, NetApp, Pure Storage, MongoDB, Salesforce, Marvell, Box and even Okta and beleaguered CrowdStrike -- though investors in some cases sold on muted outlooks and other uncertainties. VMware intensified its focus on private cloud under Broadcom, as CEO Hock Tan throws shade at cloud providers. Customers are far from happy, and VMware is likely to lose more than a few, but as theCUBE Research analysts Dave Vellante and Rob Strechay recently pointed out, Tan's plans make sense to get VMware more focused -- even if success depends on execution, including on AI plans. The California AI bill passed the Assembly, though there's more wrangling to come amid widely divergent opinions on whether it's good or bad. Finally, Telegram CEO Pavel Durov apparently misread sentiment about his private-messaging company in a big way and now he's facing major charges of harboring criminal activity. Although some free-speech advocates are crying foul, if there's child sexual abuse material and other criminal activities happening under Telegram's cover, that's not going to stand, and shouldn't. Next week's key earnings include HPE, Broadcom, UiPath, Zscaler and more. Furrier and Vellante will discuss this and other news in more detail on this week's theCUBE Pod, out later today on YouTube. And don't miss Vellante's weekly deep dive, Breaking Analysis, this weekend. Here's the top news and newsy topics of the week from SiliconANGLE and beyond: John Furrier's exclusive conversation with cloud's top dog: Exclusive: Inside the mind of AWS CEO Matt Garman and how he aims to shape the future of cloud and AI TheCUBE Research analyst David Linthicum weighs in: Hype around generative AI: Has it already 'jumped the shark'? Related: Researchers point out anew that large language models aren't all they're assumed to be. Small steps to transparency; will it make a difference? US AI Safety Institute will have access to OpenAI and Anthropic for a safer future Cerebras Systems throws down gauntlet to Nvidia with launch of 'world's fastest' AI inference service Amazon turns to Anthropic's AI for Alexa revamp (per Reuters; our story coming soon) AI image generator Midjourney is venturing into hardware development Google updates Gemini with new image generation model, custom Gem chatbots Nvidia launches AI agent blueprints to allow enterprises to build their own AI apps OpenAI reportedly preparing to launch new 'Strawberry' AI model Anthropic reveals system prompts that guide its Claude AI models' behavior Meta reports rapid growth in popularity for its Llama AI models, with nearly 350M downloads IBM to make Intel's Gaudi 3 AI chip available in its public cloud Alibaba announces Qwen2-VL AI model with advanced video analysis and reasoning capabilities The big system integrators are clearly all-in on AI: AWS and Deloitte build on existing collaboration to provide industry-specific enterprise AI solutions and Accenture and Google Cloud strengthen alliance to boost AI adoption and cybersecurity Dremio says it has dramatically improved query performance on Iceberg data lakes OpenAI could reportedly raise billions of dollars at $100B+ valuation And a bunch of other companies apparently could join in: Report: Nvidia, Apple could join OpenAI's multibillion-dollar funding round Nothing says "AI ROI" like coding assistants: AI coding assistant Magic raises $320M round as rival Codeium nabs $150M Data management startup Cribl nabs $319M at $3.5B valuation Atlassian acquires AI-powered video meeting assistant platform Rewatch AI-powered code editor Cursor raises $60M in Series A round Viggle AI raises $19M in funding for its AI video generator Katara raises $2.2M in seed funding to accelerate developer experiences with generative AI There's more AI and big data news on SiliconANGLE VMware goes all-in on the private cloud, as Broadcom unit showcases AI and counters price concerns VMware Cloud Foundation 9 and Tanzu 10 simplify development and deployment in private clouds TheCUBE analysts assess enterprise challenges and opportunities at VMware Explore The CUBE Pod analysis: Navigating VMware ecosystem challenges and strategic shifts at VMware Explore VMware private cloud strategy: theCUBE's analysis on simplifying digital transformation TheCUBE assesses VMware's shifting cloud strategy and its future under Broadcom's leadership There's lots more analysis and interviews free to watch on demand. Nvidia beats expectations but disappoints investors' sky-high expectations Salesforce beats earnings estimates as it talks up its new AI agents Dell's stock rises on crushing earnings beat driven by AI server sales Strong beat and raise helps MongoDB's stock surge more than 13% after-hours Data storage leaders Pure Storage, NetApp and Nutanix all beat Wall Street's targets PC sales rebound helps HP return to revenue growth, but its stock falls on earnings miss Cybersecurity firms CrowdStrike and Okta beat earnings forecasts but face challenges SentinelOne achieves second-quarter profitability thanks to strong customer growth Shares of Box surge in extended trading as generative AI bets start paying off Strong AI chip demand and improved guidance boost Marvell's stock after-hours Autodesk outperforms projections with strong earnings and revenue growth Elastic shares plunge 25% on lower revenue projections amid slower customer commitments HashiCorp cuts losses on 15% rise in revenue as IBM acquisition looms. Intel working with bankers to present board with strategic options, sending shares up 8% (per CNBC; our story coming soon) Supermicro shares drop on short seller claim of 'accounting red flags' Defense technology firm Parry Labs raises $80M to develop next-generation open architecture Cloud cost management startup nOps secures $30M Planera raises $13.5M for its construction management platform IBM unveils new Telum II AI processor set to power its next-generation mainframe systems Startup FuriosaAI debuts RNGD chip for LLM and multimodal AI inference Slack adds new capabilities to make workflow automation easier and more accessible There's plenty more news on cloud, infrastructure and apps Cisco snaps up AI model and data security startup Robust Intelligence Check Point Software acquires cybersecurity startup Cyberint BrowserStack acquires Bird Eats Bug to enhance bug reporting capabilities Researchers discover China-linked hacking campaign targeting US internet providers Seattle-Tacoma Airport suffers through third day of disruptions following possible ransomware attack Google reports watering-hole attacks on Mongolian sites leveraged iOS and Android exploits Fortinet expands unified SASE solution with sovereign options and AI integration DigitalOcean enhances role-based access control with new predefined roles Secureworks launches Taegis IDR to tackle identity-based threats in 90 seconds Bonus: a worthwhile interview with Signal President Meredith Whittaker: Signal Is More Than Encrypted Messaging. Under Meredith Whittaker, It's Out to Prove Surveillance Capitalism Wrong More cybersecurity news here Telegram CEO Pavel Durov arrested in France over alleged failure to moderate criminal content Netherlands fines Uber €290M for breaching EU's GDPR privacy regulation Plaud introduces an AI-powered, ultra-light wearable NotePin device TikTok told it must face lawsuit over deadly viral challenge, despite Section 230 protections Bezos-led funding round values Swiss robot maker at $100M (per Bloomberg)