Welcome back. Nvidia’s strong first-quarter revenue shows that some areas of the tech industry might be more resilient than others to the economic effects of the coronavirus pandemic. The chip maker reported an 80% increase in sales to data centers, where its components power the artificial intelligence used by giant cloud platforms and others. It has benefited from the rise in demand for gaming and remote work during the lockdown. Today, we look at the AI chip market, where the competition is heating up.

Chip giant Nvidia benefits as pandemic drives demand for gaming, remote services. Nvidia, a chip maker that has been benefiting from increased interest in artificial intelligence, said that its first-quarter revenue rose 39% from a year earlier to $3.08 billion, The Wall Street Journal’s Asa Fitch reports. 

Chief Financial Officer Colette Kress pointed to booming sales of laptops and game consoles using Nvidia chips.

The computer-graphics giant also said its data-center sales rose 80% to a record $1.14 billion. Nvidia sells many of its chips to data centers, where they make rapid calculations that power artificial intelligence.

[continues below]

Competition heats up. Nvidia recognized years ago that the graphics processing units it sold for videogames were well-suited to AI because they work largely in parallel. The company invested in adapting its chips for AI.

The company’s rollout of new products has continued apace despite the global health crisis. Earlier this month, Chief Executive Jensen Huang revealed an advanced graphics-processing chip design and a new type of chip aimed at accelerating artificial-intelligence calculations in data centers.

But the completion is heating up. In December, Intel purchased Habana Labs, an Israel-based AI chip-making startup, for $2 billion. Google has introduced its own chips designed to power machine learning for industrial equipment, among other things.

IBM announces job cuts. International Business Machines Corp. is cutting an unspecified number of jobs in the first major workforce reduction under new Chief Executive Officer Arvind Krishna, who is trying to revive growth at the tech company, The Wall Street Journal’s Asa Fitch reports.

The layoffs affect several units of IBM, including its Global Technology Services division, which offers IT outsourcing. Other parts of IBM were affected by Thursday’s announcement, according to employee posts in an online forum, including its Watson artificial-intelligence unit. The employees who said in the posts that they have been laid off worked at a variety of locations and divisions, suggesting that the cuts were broad-based. The claims couldn’t immediately be verified, and IBM declined to comment on them.

Customers dialing back investments. IBM said the cuts are aimed at making it more agile, but they come against the backdrop of a major economic slowdown triggered by a coronavirus pandemic that has caused many of its customers to dial back investments and hold off on big software deals. The company didn’t disclose the scale of the job losses. A person familiar with the company’s plans said they are thought to affect several thousand people. IBM had around 352,600 employees as of the end of last year, according to a January regulatory filing.

China accelerates tech plans. China is speeding up its plans to become a world leader in key technologies, Bloomberg reports. Beijing is planning to inject an estimated $1.4 trillion over six years into its economy through the deployment of wireless networks, artificial intelligence, and other technologies, according to the report.

Gap plans to use more robots. Gap is accelerating its deployment of robots that can assemble online orders in an effort to reduce human contact during the pandemic, Reuters reports. The apparel chain plans to more than triple its number of product-picking machines to 106, according to the report.

U.S. and global business activity and labor markets suffered a little less in May than in prior months, offering signs that damage to the global economy from the coronavirus pandemic is easing but will require an extended time to overcome. (WSJ)

Mark Zuckerberg is shifting Facebook Inc. toward a substantially remote workforce over the next decade, permanently reconfiguring the tech giant’s operations around the dispersed structure that the coronavirus pandemic forced on it. (WSJ)

Write to Enterprise Technology Editor Steven Rosenbush and Pro AI Deputy Editor John McCormick.

Follow us on Twitter: @wsjproai, @steve_rosenbush, @J_J_McCormick, @tomloftus, @SCastellWSJ, @JaredCouncil  and @angusloten.