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For technology adopters looking for the next big thing, agentic AI is the future. At least, that’s what the marketing pitches and tech industry T-shirts say. What makes an artificial intelligence product agentic depends on who’s selling it. But the promise is usually that it’s a step beyond today’s generative AI chatbots. Chatbots, however useful, are all talk and no action. They can answer questions, retrieve and summarize information, write papers, and generate images, music, video, and lines of code. AI agents, by contrast, are supposed to be able to take actions on a person’s behalf. But if you’re confused, you’re not alone. Google searches for agentic have skyrocketed from near obscurity a year ago to a peak earlier this fall. A new report Tuesday by researchers at the Massachusetts Institute of Technology and the Boston Consulting Group, who surveyed more than 2,000 business executives around the world, describes agentic AI as a new class of systems that can plan, act, and learn on their own. They are not just tools to be operated or assistants waiting for instructions, says the MIT Sloan Management Review report. “Increasingly, they behave like autonomous teammates, capable of executing multistep processes and adapting as they go. How to know if it’s an AI agent or just a fancy chatbot AI chatbots such as the original ChatGPT that debuted three years ago this month rely on systems called large language models that predict the next word in a sentence based on the huge trove of human writings they’ve been trained on. They can sound remarkably human, especially when given a voice, but are effectively performing a kind of word completion. That’s different from what AI developers including ChatGPT’s maker, OpenAI, and tech giants like Amazon, Google, IBM, Microsoft, and Salesforce have in mind for AI agents. A generative AI-based chatbot will say, Here are the great ideas and then be done, said Swami Sivasubramanian, vice president of Agentic AI at Amazon Web Services, in an interview this week. Its useful, but what makes things agentic is that it goes beyond what a chatbot does. Sivasubramanian, a longtime Amazon employee, took on his new role helping to lead work on AI agents in Amazon’s cloud computing division earlier this year. He sees great promise in AI systems that can be given a high-level goal and break it down into a series of steps and act upon them. I truly believe agentic AI is going to be one of the biggest transformations since the beginning of the cloud, he said. For most consumers, the first encounters with AI agents could be in realms like online shopping. Set a budget and some preferences and AI agents can buy things or arrange travel bookings using your credit card. In the longer run, the hope is that they can do more complex tasks with access to your computer and a set of guidelines to follow. Id love an agent that just looked at all my medical bills and explanations of benefits and figured out how to pay them, or another one that worked like a personal shield fighting off email spam and phishing attempts, said Thomas Dietterich, a professor emeritus at Oregon State University who has worked on developing AI assistants for decades. Dietterich has some quibbles with certain companies using agentic to describe any action a computer might do, including just looking things up on the web, but he has no doubt that the technology has immense possibilities as AI systems are given the freedom and responsibility to refine goals and respond to changing conditions as they work on people’s behalf. We can imagine a world in which there are thousands or millions of agents operating and they can form coalitions, Dietterich said. Can they form cartels? Would there be law enforcement (AI) agents? Agentic is a trendy buzzword based on an older idea Milind Tambe has been researching AI agents that work together for three decades, since the first International Conference on Multi-Agent Systems gathered in San Francisco in 1995. Tambe said he’s been amused by the sudden popularity of agentic as an adjective. Previously, the word describing something that has agency was mostly found in other academic fields, such as psychology or chemistry. But computer scientists have been debating what an agent is for as long as Tambe has been studying them. In the 1990s, people agreed that some software appeared more like an agent, and some felt less like an agent, and there was not a perfect dividing line, said Tambe, a professor at Harvard University. Nonetheless, it seemed useful to use the word agent to describe software or robotic entities acting autonomously in an environment, sensing the environment, reacting to it, planning, thinking. The prominent AI researcher Andrew Ng, co-founder of online learning company Coursera, helped advocate for popularizing the adjective agentic more than a year ago to encompass a broader spectrum of AI tasks. At the time, he also appreciated that mainly technical people were describing it that way. When I see an article that talks about agentic workflows, Im more likely to read it, since its less likely to be marketing fluff and more likely to have been written by someone who understands the technology, Ng wrote in a June 2024 blog post. Ng didn’t respond to requests for comment on whether he still thinks that. Matt O’Brien, AP technology writer
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A widely used Internet infrastructure company said that it has resolved an issue that led to outages impacting users of everything from ChatGPT and the online game League of Legends,” to the New Jersey Transit system early Tuesday. Around 10 a.m. ET, Cloudflare said it was continuing to monitor for errors to ensure all services are back to normal. Other platforms that experienced outages Tuesday included the social media site X, Shopify, Dropbox, Coinbase, and the Moody’s credit ratings service. Moody’s website displayed an Error Code 500 and instructed individuals to visit Cloudflare’s website for more information. New Jersey Transit said parts of its digital services including njtransit.com, may be temporarily unavailable or slow to load. Cloudflare, based in San Francisco, provides internet infrastructure that protects websites from online threats and helps them run more smoothly. Last month, Microsoft had to deploy a fix to address an outage of its Azure cloud portal that left users unable to access Office 365, Minecraft, and other services. The tech company wrote on its Azure status page that a configuration change to its Azure infrastructure caused the outage. And Amazon experienced a massive outage of its cloud computing service in October. The company resolved the issue, but the outage took down a broad range of online services, including social media, gaming, food delivery, streaming, and financial platforms. Michelle Chapman, AP business writer
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Meta Platforms has been spending too aggressively on artificial intelligence (AI) infrastructure and that will affect the tech giant’s profitability, according to a new investor note from Wall Street analyst firm MoffettNathanson. The note, published on Tuesday, points out that Metas stock price (Nasdaq: META) has fallen almost 20% over the past month or so, exacerbated by its most recent earnings results, which were released on October 29. MoffettNathanson has been a staunch defender of the Facebook and Instagram parent company, even when its shares have dipped in the past. But on Tuesday, analysts at the firm wrote, we were obviously too complacent in our investment advice.” Why is Meta spending so much on AI? Meta along with fellow Big Tech firms including Amazon, Microsoft, and Google parent company Alphabet are in a high-stakes race to build out infrastructure and invest in the talent they see as necessary to compete in a world being transformed by generative AI. However, investors and many experts have expressed concerns that we may be in an AI bubble similar to the one seen during the dotcom era. So the question is whether these investments will pay off in the long run. To be crystal clear, we feel that this time is different and that defending the stock even at this level is harder because of the ramping of the massive incremental bet that Meta, without a cloud business or pre-existing enterprise assets, has been making in building out a Meta Superintelligence business, the note says. Given the outlook, the issue from here is that even with strong top-line expectations, Q4 and 2026 margins will likely compress. In other words, MoffettNathansons team feels that Meta is overspending on AI, and it could come back to bite investors. Despite the relatively harsh words, the firm still rates Meta’s stock as a buy, though it has adjusted its price target, dropping it from $875 to $750. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Meta, and much of tech overall, has significantly increased its capital expenditures in the wake of the AI revolution. But according to the note, Meta is “trying to punch above its weight” when compared to its peers. Although the company is spending a similar amount on AI infrastructure, it does not have a cloud platform like Microsoft, Alphabet, and Amazon, the analysts point out. MoffettNathanson projects that Meta’s capex-to-revenue ratio will hit 47% next year. By comparison, Microsofts is 29%, Alphabets is 26%, and Amazons is 16%, MoffettNathanson estimates. Meta lacks a comparable coherent pathway for monetizing GenAI directly, the firm says. Shares of Meta are trending downward this week along with the tech-heavy Nasdaq Composite as investors await tomorrow’s highly anticipated earnings report from AI chip giant Nvidia. Meta shares are down roughly 2% year to date.
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The U.S. stock market is slipping again on Tuesday, following a global sell-off, as Nvidia, bitcoin and other Wall Street stars keep falling on worries that their prices shot too high. Home Depot is also dragging the market lower after saying it made less in profit during the summer than analysts expected. The S&P 500 dipped 0.4%, following up on sharp swings the last couple weeks, and pulled further from its all-time high set late last month. The Dow Jones Industrial Average was down 373 points, or 0.8%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% lower. The struggles are a sharp turnaround from the months of relentless rallying for the U.S. stock market since April, when it sold off after President Donald Trump shocked the world with stiff tariffs. That rally, though, was so strong that critics said it may have carried stock prices too high, too fast and left the market at risk of a sharp drop. They pointed in particular to stocks swept up in the mania around artificial-intelligence technology, which have been surging at spectacular speeds. Many big investors still seem to be expecting stock prices to rise further, according to the latest monthly survey of global fund managers by Bank of America Global Research. But when asked what the No. 1 risk for the market is, one with a lower probability of happening but a high chance of damage, 45% pointed to an AI bubble. That beat out trouble in the bond market, inflation and trade wars. The highest net percentage of investors in 20 years are also saying companies are overinvesting, according to the survey. The worry is that all the investment pouring into AI chips and data centers worldwide may not produce the kind of revolution that proponents have been predicting, or at least not as profitable a one. Fervent demand for Nvidias AI chips have made it into Wall Streets most valuable stock, and it briefly topped $5 trillion in value after more than doubling in four of the past five years. But the chip companys 1.8% drop on Tuesday means its down 9.5% for the month so far. Other high-flying areas of the market with their own evangelists have also been struggling lately. Bitcoins price briefly fell below $90,000 during the morning, down from nearly $125,000 last month. Home Depot helped drag the market lower after falling 3.4%. It reported a weaker profit for the summer than analysts expected and cited a variety of reasons. Chief among them was a lack of storms, which would have driven customers to buy more home-improvement supplies. But CEO Ted Decker also pointed to consumer uncertainty and continued pressure in housing for preventing an expected increase in demand from happening. Reporting stronger profits is one of the ways a company can make its stock price look less expensive, because stock prices tend to track with earnings over the long term. Elsewhere on Wall Street, Cloudflare fell 2.8% after an issue at the internet infrastructure provider caused global outages for ChatGPT and other services. In the bond market, Treasury yields eased. The yield on the 10-year Treasury sank to 4.10% from 4.13% late Monday. In stock markets abroad, indexes tumbled across Europe and Asia, following up on Wall Streets losses on Monday. Japans Nikkei 225 dropped 3.2% after feeling extra pressure from a jump in Japanese government bond yields, reflecting rising risks as Prime Minister Sanae Takaichi prepares to boost government spending and push back the timetable for bringing down Japans huge national debt. South Koreas Kospi sank 3.3%, and Frances CAC 40 fell 1.8% for two of the larger drops worldwide. Stan Choe, AP business writer AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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Growth in U.S. markets helped Swedish fintech firm Klarna to achieve a 26% jump in third-quarter revenue, beating expectations in its first report as a public company and forecasting revenue above $1 billion in the current quarter, the company said on Tuesday. The buy now, pay later lender, which went public in September in New York, reported revenue of $903 million, beating analysts’ expectations of $882 million, according to data compiled by LSEG. “To a large degree, AI is accelerating our ability to ship new features and products,” CEO Sebastian Siemiatkowski told Reuters. Klarna had been an early adopter of AI and used the technology to help customers and merchants cut jobs, create marketing campaigns, and improve products. However, Siemiatkowski expressed some nervousness about the huge spending on building data centres. While there will be an uptick in demand for AI in both the consumer space and enterprises, there will be more compression of data in businesses, hitting future compute demand, he said. Tech companies have announced massive spending plans this year for building data centres as they expect AI to fuel demand. Klarna’s gross merchandise volume (GMV), a commonly used e-commerce metric for measuring sales, rose 23% to $32.7 billion in the quarter. In the U.S., Klarnas largest market, GMV grew 43% and revenue rose 51%. Active customers rose 32% to 114 million from a year ago. The company, however, reported a net loss of $95 million, compared with a profit of $12 million in the year-ago period, which it said was partly due to a shift to U.S. accounting principles following its New York listing. In the current quarter, the company expects revenue of $1.07 billion, compared with expectations of $1.06 billion. Supantha Mukherjee, Reuters
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