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Avocado, toast?

Meta reportedly delays the launch of its new AI model because it’s just not that good

Meta’s AI leaders have “instead discussed temporarily licensing Gemini to power the company’s AI products, though no decisions have been reached,” according to The New York Times.

Luke Kawa

Here’s The New York Times with something that Meta CEO Mark Zuckerberg probably wishes had never seen the light of day:

Per the NYT, the social media giant is postponing the release of its new foundational AI model, originally planned for this month, until at least May, citing three people with knowledge of the matter.

The model, which is code-named “Avocado,” reportedly did not perform as well as offerings from Google, OpenAI, and Anthropic “on internal tests for reasoning, coding, and writing.”

In what’s seemingly a concession to Google’s prowess, Meta’s AI leaders “had instead discussed temporarily licensing Gemini to power the company’s AI products, though no decisions have been reached,” according to the report.

Gemini 3.0’s launch was extremely warmly received by the public and the stock market, resulting in a halo effect that saw companies tied to its supply chain soar while firms with lots of exposure to OpenAI sank.

Meta’s prior model, Llama 4, was also plagued by delays and performance issues. Soon thereafter, the firm began bolstering its bench with a high-profile hiring spree, including onboarding Scale AI founder Alexandr Wang after investing $14.3 billion into the startup. Earlier this year, Meta CTO Andrew Bosworth told the press that these new models under development were “very good.”

The social media giant’s capital expenditure over the past two years has totaled nearly $107 billion, as it and other so-called hyperscalers and foundational model companies race to build better AI models and monetize their new capabilities.

But based on this report, aggressively accumulating talent and deploying compute does not ensure that your models will be best-in-class.

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Ford raises its full-year guidance, receives $1.3 billion tariff refund

Ford reported its first-quarter results after markets closed on Wednesday. The automaker’s shares climbed roughly 7% in after-hours trading on the news.

For Q1, Ford reported:

  • Adjusted earnings of $0.66 per share, compared to the $0.18 per share expected by Wall Street analysts polled by FactSet. The figure includes Ford’s tariff reimbursement.

  • $43.25 in total revenue, vs. the $42.66 billion consensus forecast. Automotive revenue came in at $39.8 billion, compared to estimates of $38.9 billion.

  • A $1.3 billion tariff refund.

Ford boosted its full-year guidance for adjusted earnings before interest and taxes to between $8.5 billion and $10.5 billion, up from between $8 billion and $10 billion.

Late last year, Ford announced it would take $19.5 billion in charges — one of the largest write-downs ever — relating mostly to its EV business. Of those charges, $7 billion will be spread across this year and next, the company said.

Earlier this month, Ford recorded an 8.8% drop in Q1 sales from the same period last year, a similar result to Detroit rival GM, which posted a 9.7% sales drop.

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Microsoft beats on revenue and earnings in Q3, but only meets expectations for cloud growth

Microsoft shares dipped after the company reported strong Q3 earnings postmarket Wednesday, posting ​​sales of $82.9 billion for the quarter, beating FactSet analyst estimates of $81.4 billion. Earnings per share were $4.27, handily beating estimates of $4.05. 

In a closely watched number, Microsoft’s Azure cloud business increased 40% year on year, just above the 39.7% estimated. The metric technically beat expectations, but may not be the beat investors were looking for.

Total capital expenditure for the quarter was $31.9 billion, up 49% year on year, above estimates of $27.5 billion and down from Q2’s $37.5 billion.

One thing investors were eager to find out: how is the company doing in its effort to fulfill the billions in backlogged commercial bookings? Last quarter, the company reported a staggering $625 billion in remaining performance obligations, and 45% of that was for just one customer — OpenAI.

For the third quarter, Microsoft reported a backlog of $627 billion, up 99% year on year. The company said the RPO increase was 26% — in line with “historical seasonality” — when excluding OpenAI.

Breaking down the results by the company’s business lines:

  • ☁️ 🤖 Intelligent Cloud (Azure, server products): $34.7 billion in revenue, up 30% year on year.

  • 📝 📊 Productivity and Business Processes (Microsoft 365, LinkedIn, Dynamics): $35 billion in revenue, up 17% year on year.

  • 💻 🎮 More Personal Computing (Windows, Xbox, Bing): $13.2 billion in revenue, down 1% year on year.

Microsoft CFO Amy Hood said in the earnings release:

“We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud.”

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