AI Not Replacing Engineers

AI Revenue Reaches $25 Billion in First Quarter

AI revenue, excluding China, reached $25 billion in the first quarter of 2026. This is a significant increase and shows that tech companies may be able to cover the cost of their investments in data centers and chips. The $25 billion in revenue exceeds the industry's estimated $21 billion in depreciation costs for the second consecutive quarter. This is important because it shows that the hundreds of billions of dollars being spent on AI may be economically sustainable. The biggest US tech companies plan to spend as much as $725 billion this year on capital expenditures, much of it on AI infrastructure. Generative AI revenue, excluding China, reached $110 billion over the past 12 months and is scaling three times faster than any previous information technology wave. The AI industry will continue to grow and change in the coming years.

Qualcomm Buys AI Startup Modular for $4 Billion

Qualcomm will buy AI startup Modular for $4 billion. This deal gives Qualcomm access to software that runs AI models across different chips. The deal is important because it helps Qualcomm compete with Nvidia in the AI market. Modular's software is used by many companies and supports chips from Nvidia, AMD, and other vendors. Qualcomm expects to issue up to 19.2 million shares of its common stock to Modular's equity holders. The transaction is valued at $3.92 billion and is expected to close in the second half of this year. Qualcomm will now push deeper into AI and data-center markets to reduce its reliance on smartphone chips. Qualcomm will continue to expand its AI capabilities.

Samsung Expands AI Access for Employees

Samsung Electronics is giving all its employees access to ChatGPT Enterprise and Codex, powerful AI tools that can assist with both technical and non-technical tasks. This move follows recent restrictions on AI use in South Korea, which were lifted earlier this year. OpenAI confirmed the expansion, stating that it now includes every Samsung employee in Korea and all Device eXperience (DX) division staff globally. The DX division covers a wide range of products, including smartphones, consumer electronics, and home appliances. By opening these tools to more employees, Samsung aims to streamline its operations and boost productivity across various departments. This could lead to faster development cycles, improved problem-solving, and enhanced innovation in their product lines. For developers and researchers within the company, this access will provide a new level of support for coding, debugging, and designing. The decision reflects a broader trend of companies embracing AI to stay competitive in the tech industry. As more organizations adopt similar strategies, it’s likely that Samsung will continue to explore innovative ways to integrate AI into its workflows and products.

Companies Struggle with AI Investment Returns

Most companies that invest in AI do not see a good return on their investment. A survey found that 88% of organizations use AI in at least one business function, but only 39% report any impact on their earnings. The impact of AI on earnings is usually small, less than 5%. Many companies, 60%, generate no material value from their AI investments. It takes two to four years to see a satisfactory return on a typical AI use case. Only 5% of companies create substantial value from AI at scale. As companies continue to invest in AI, they will look for ways to improve their returns. They will try to find new ways to use AI to make more money.

Peregrine Technologies Raises $250 Million

Peregrine Technologies raised $250 million in funding at a $6.8 billion valuation. The company provides a public safety platform for law enforcement. The platform connects data from various sources and makes it searchable in real time. This helps public safety leaders make better decisions. The company now serves over 400 agencies and organizations, representing 125 million people. The company plans to work with close to 1,000 cities by the end of the year.