What's up: Microsoft plans to cut thousands more employees; Malaysia probing reports of Chinese firm’s use of Nvidia AI chips; UBS among companies hit by data leak

Good morning. A major difference between artificial intelligence and earlier transformative technologies–from the internet to e-commerce to smartphones–is how quickly businesses have gotten onboard.

Businesses are not dabbling in AI; they are going full transformation-mode. Some 88% of enterprises say they are undertaking an AI transformation, according to research from McKinsey.

To find out what makes this tech era different from previous ones, WSJ Columnist Steven Rosenbush sought out Athina Kanioura, chief strategy and transformation officer at PepsiCo, which has been deploying AI for years.

To be sure, there is another motivation for companies’ speedy adoption of AI, notes Rosenbush. The last quarter century has not been kind to businesses behind the technological curve. Executives just don’t want to wake up behind the curve again. Read the story.

👉 On Tuesday, Amazon CEO Andy Jassy said the company planned to reduce its workforce in the coming years because increasing use of artificial intelligence will eliminate the need for certain roles.

Swiss financial groups UBS Group and Pictet and construction company Implenia said they were among the companies affected by a cyberattack on procurement firm Chain IQ, WSJ reports. UBS and Pictet said Wednesday that no client data was involved in the cyberattack, while Implenia said it assumed no sensitive data was affected. But data on UBS employees, including its CEO, were compromised, according to people familiar with the matter. Chain IQ last week said that it had been targeted alongside 19 other companies in a cyberattack.

Malaysia said it is looking into media reports that a Chinese company in the country used servers equipped with Nvidia and other AI chips to train large language models. The Journal reported last week that Chinese engineers had bypassed U.S. chip curbs by flying into the Southeast Asian country with hard drives containing data to build AI models in Malaysian data centers. Malaysia’s Trade Ministry tells the Journal that while servers using Nvidia and AI chips aren’t classified as controlled items, it will cooperate with governments seeking assistance in monitoring trade involving sensitive goods subject to export-control laws.

Chip maker Texas Instruments plans to invest more than $60 billion across three manufacturing sites, expanding U.S. capacity to meet growing demand for semiconductors used in vehicles, smartphones, data centers and other electronic devices.

Waymo has made it in SF and LA, but NYC? Fuhggetaboutit.  But seriously, the robotaxi service has applied for a New York City permit that would allow its vehicles to drive autonomously in Manhattan with specialists in the driver’s seats, WSJ reports. If Waymo’s efforts succeed, its driverless technology would be the first to navigate New York City’s sometimes-labyrinthine streets. Current New York state law doesn’t allow for vehicles to operate without a person at the wheel.

China-owned bargain site Temu last week entered into a data-storage deal with Oracle, part of its efforts to localize more of its U.S. operations, WSJ reports. The deal comes as Temu faces allegations in several U.S. states that it could turn over data on U.S. users to Beijing.  Temu has denied the allegations and said it strives to safeguard privacy and maintain transparency

First Google and now OpenAI is cutting its work with ScaleAI after the data-labling startup last week announced a significant investment from Meta Platforms. OpenAI tells Bloomberg that ScaleAI accounts for a fraction of its needs.

SpaceX’s Starship spacecraft exploded during a routine test Wednesday, marking the latest setback in what has become an increasingly important bet for Elon Musk.

• An Austin startup has gotten U.S. clearance to build a “guideway” on which autonomous hybrid shuttles would ferry freight between Mexico and Texas in an effort to speed up trade.
• Private equity accounts for about half of the companies in the “shadow IPO pipeline,” setting the stage for what could be a busy second half of companies going public.
• An Israeli startup is rethinking how to tackle two of the planet’s most stubborn environmental threats—toxic algae that can lead to dead zones in oceans and rising carbon levels.
• The ad world is obsessed with industry news videos from two 27-year-old guys.

Israel’s conflict with Iran is costing the country hundreds of millions of dollars a day, according to early estimates, a price tag that could constrain Israel’s ability to conduct a lengthy war. (WSJ)

A federal appeals court on Thursday night allowed President Trump to maintain command of the California National Guard in response to the Los Angeles protests, blocking a lower court that ordered him to return those forces to the state’s control. (WSJ)

China’s exports of rare-earth magnets plummeted after it imposed controls on their overseas sale, emphasizing Beijing’s dominance of a critical input into electric vehicles and jet fighters that has taken center stage in tensions with the U.S. (WSJ)

This year's frantic airlift from Ireland to the U.S. of ingredients for popular obesity and diabetes drugs reflects the collision of two powerful forces: tariff-driven stockpiling and weight-loss drug demand. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.