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Amazon pauses construction of second headquarters in Virginia

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Amazon HQ2 rendering showing the Helix, which includes work space, will also be open to the public select weekends every month.
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Amazon is pausing construction of its second headquarters, dubbed HQ2, in Virginia, the company confirmed to CNBC.
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John Schoettler, Amazon’s real estate head, said in a statement the company is pushing out the groundbreaking of PenPlace, the second phase of the sprawling northern Virginia campus. The first phase of the campus, known as Metropolitan Park, is expected to open on time this June and will be occupied by 8,000 employees.

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The move comes as Amazon CEO Andy Jassy has taken steps to curtail expenses across the company in the face of slowing revenue and a gloomy economic outlook. That’s led the company to announce the largest layoffs in its history, totaling more than 18,000 employees. Amazon is also reevaluating its real estate portfolio and sunsetting some projects.

“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” Schoettler said in a statement. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”

The news was first reported by Bloomberg.

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PenPlace encompasses three 22-story office buildings, more than 100,000 square feet of retail space and a 350-foot-tall tower, called “The Helix.” The development is larger than Metropolitan Park, which sits south of PenPlace, and includes two additional, 22-story office towers, as well as a mixed-use site featuring retail, restaurants and green spaces.

Amazon selected Arlington as the site of HQ2, in addition to the Long Island City neighborhood of Queens, New York, as part of a closely watched, splashy search for a second headquarters that kicked off in 2017. The company announced in 2019 it would halt plans to build its new headquarters in New York after it faced pushback from local activists and city council leaders.

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The company rapidly expanded its physical footprint and headcount during the pandemic as it benefited from a surge in online shopping. But it has pulled back on office expansion and the construction of new buildings in Nashville, Tennessee and Bellevue, Washington in recent months, citing uncertainty around the pandemic’s impact on in-office work, Reuters reported.

Earlier this month, Jassy announced Amazon would require corporate staffers to spend at least three days a week in the office beginning May 1, a move that prompted backlash from some employees who said they prefer a more flexible approach to return-to-office plans.

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Amazon has said it will create roughly 25,000 jobs over the next decade at HQ2 and in the surrounding area. Amazon spokesperson Zach Goldsztejn said that commitment remains unchanged.

The company expects to begin pre-construction work on other aspects of HQ2 later this year, Goldsztejn said.

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Amazon to lay off 9,000 more workers in addition to earlier cuts

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The latest round will primarily impact Amazon’s cloud computing, human resources, advertising and Twitch livestreaming businesses, Jassy said in the memo.

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Amazon is undergoing the largest layoffs in company history after it went on a hiring spree during the Covid-19 pandemic. The company’s global workforce swelled to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.

Jassy is also undergoing a broad overview of the company’s expenses as it reckons with an economic downturn and slowing growth in its core retail business. Amazon froze hiring in its corporate workforce, axed some experimental projects and slowed warehouse expansion.

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While the company aims to operate leaner this year, Jassy said he remains optimistic about the company’s “largest businesses,” retail and Amazon Web Services, as well as other, new divisions it continues to invest in.

Shares of Amazon were down more than 2% in afternoon trading Monday.

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As we’ve just concluded the second phase of our operating plan (“OP2”) this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch. This was a difficult decision, but one that we think is best for the company long term.

Let me share some additional context.

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As part of our annual planning process, leaders across the company work with their teams to decide what investments they want to make for the future, prioritizing what matters most to customers and the long-term health of our businesses. For several years leading up to this one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount. The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole.

As our internal businesses evaluated what customers most care about, they made re-prioritization decisions that sometimes led to role reductions, sometimes led to moving people from one initiative to another, and sometimes led to new openings where we don’t have the right skills match from our existing team members. This initially led us to eliminate 18,000 positions (which we shared in January); and, as we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions (though you will see limited hiring in some of our businesses in strategic areas where we’ve prioritized allocating more resources).

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Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted. Once those decisions have been made (our goal is to have this complete by mid to late April), we will communicate with the impacted employees (or where applicable in Europe, with employee representative bodies). We will, of course, support those we have to let go, and will provide packages that include a separation payment, transitional health insurance benefits, and external job placement support.

If I go back to our tenet—being leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole—I believe the result of this year’s planning cycle is a plan that accomplishes this objective. I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing.

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To those ultimately impacted by these reductions, I want to thank you for the work you have done on behalf of customers and the company. It’s never easy to say goodbye to our teammates, and you will be missed. To those who will continue with us, I look forward to partnering with you as we make life easier for customers every day and relentlessly inventing to do so.

Andy

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OpenAI CEO Sam Altman says he’s a ‘little bit scared’ of A.I.

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Sam Altman, co-founder and chief executive officer of OpenAI Inc., speaks during TechCrunch Disrupt 2019 in San Francisco, California, on Thursday, Oct. 3, 2019.
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OpenAI CEO Sam Altman said in a recent interview with ABC News that he’s a “little bit scared” of artificial intelligence technology and how it could affect the workforce, elections and the spread of disinformation.
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OpenAI developed the ChatGPT bot, which creates human-like answers to questions and ignited a new AI craze.

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“I think people really have fun with [ChatGPT],” Altman said in the interview.

But his excitement over the transformative potential of AI technology, which Altman said will eventually reflect “the collective power, and creativity, and will of humanity,” was balanced by his concerns about “authoritarian regimes” developing competing AI technology.

“We do worry a lot about authoritarian governments developing this,” Altman said. Overseas governments have already begun to bring competing AI technology to market.

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Chinese tech company Baidu, for example, recently held a release event for its ChatGPT competitor, a chat AI called Ernie bot.

Years before Russia’s invasion of Ukraine, Russian President Vladimir Putin said whoever becomes the leader in AI technology “will be the ruler of the world.” Altman called the comments “chilling.”

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Both Google and Microsoft have aggressively stepped up their AI plays. Microsoft chose to partner with Altman’s OpenAI to integrate its GPT technology into Bing search. Google parent Alphabet unveiled an internally developed chatbot called Bard AI, to mixed feedback from Google employees and test drivers.

The influence of ChatGPT and AI tools like it hasn’t yet reverberated through the American election process, but Altman said the 2024 election was a focus for the company.

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“I’m particularly worried that these models could be used for large-scale disinformation,” the CEO told ABC.

“Now that they’re getting at writing computer code, [models] could be used for offensive cyberattacks,” he said.

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ChatGPT’s programming prowess has already made a mark on many developers. It already functions as a “co-pilot” for programmers, Altman said, and OpenAI is working toward unlocking a similar functionality for “every profession.”

The CEO acknowledged that it would mean many people would lose their jobs but said it would represent an opportunity to come up with a better kind of job.

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“We can have a much higher quality of life, standard of living,” Altman said. “People need time to update, to react, to get used to this technology.”

Watch the full interview on ABC News.

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OpenAI says its GPT-4 model can beat 90% of humans on the SAT



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Microsoft is using OpenAI to make it easier for doctors to take notes

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Microsoft‘s speech recognition subsidiary Nuance Communications on Monday announced Dragon Ambient eXperience (DAX) Express, a clinical notes application for health-care workers powered by artificial intelligence.
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DAX Express aims to help reduce clinicians’ administrative burdens by automatically generating a draft of a clinical note within seconds after a patient visit. The technology is powered by a combination of ambient A.I., which forms insights from unstructured data like conversations, and OpenAI’s newest model, GPT-4.

Diana Nole, the executive VP of Nuance’s healthcare division, told CNBC that the company wants to see physicians “get back to the joy of medicine” so they can take care of more patients.

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“Our ultimate goal is to reduce this cognitive burden, to reduce the amount of time that they actually have to spend on these administrative tasks,” she said.

Microsoft acquired Nuance for around $16 billion in 2021. The company derives revenue by selling tools for recognizing and transcribing speech during doctor office visits, customer-service calls, and voicemails.  

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DAX Express complements other existing services that Nuance already has on the market.

Nole said the technology will be enabled through Nuance’s Dragon Medical One speech recognition application, which is used by more than 550,000 physicians. Dragon Medical One is a cloud-based workflow assistant that physicians can operate using their voices, allowing them to navigate clinical systems and access patient information quickly, Clinical notes generated by DAX Express will appear in the Dragon Medical One desktop.

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DAX Express also builds on the original DAX application that Nuance launched in 2020. DAX converts verbal patient visits into clinical notes, and it sends them through a human review process to ensure they are accurate and high-quality. The notes appear in the medical record within four hours after the appointment.

DAX Express, in contrast, generates clinical notes within seconds so that physicians can review automated summaries of their patient visits immediately.

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“We believe that physicians, clinicians are going to want a combination of all of these because every specialty is different, every patient encounter is different. And you want to have efficient tools for all of these various types of visits,” Nole said. 

Nuance did not provide CNBC with specifics about the cost of these applications. The company said the price of Nuance’s technology varies based on the number of users and the size of a particular health system.

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DAX Express will initially be available in a private preview capacity this summer. Nole said Nuance does not know when the technology will be more widely available, as it will depend on the feedback the company receives from its first users. 

Patient information is particularly sensitive and regulated under HIPAA and other laws. Alysa Taylor, a corporate vice president in the Azure group at Microsoft, told CNBC that DAX Express adheres to the core principles of Microsoft’s responsible A.I. framework, which guides all A.I. investments the company, as well as additional safety measures that Nuance has in place. Nuance has strict data agreements with its customers, and the data is fully encrypted and runs in HIPAA-compliant environments.

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Nole added that even though the A.I. will help physicians and clinicians carry out the administrative legwork, professionals are still involved every step of the way. Physicians can make edits to the notes that DAX Express generates, and they sign off on them before they are entered into a patient’s electronic health record.

She said, ultimately, using DAX Express will help improve both the patient experience and the physician experience. 

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“The physician and the patient can just face one another, they can communicate directly,” Nole said. “The patient feels listened to. It’s a very trusted experience.”



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