Providers and deployers of AI systems: You only have a couple of weeks left until you must explicitly inform users when they are interacting with AI content.

To assist in the effort, the European Commission (Commission) has published guidelines to help AI deployers get in line with the AI Act’s transparency obligations, which will begin to go into effect on August 2.

After that, companies providing AI systems must alert users when they are interacting with AI. They must also tell users when they have been exposed to deepfakes, “emotion recognition,” or biometric categorization systems, or when they are given AI-manipulated content in matters of “public interests without human review or editorial control.”

Henna Virkkunen, the Commission’s executive VP for tech sovereignty, security and democracy, said in a statement, “with today’s guidelines, the Commission supports the smooth and effective application of the AI Act to make AI systems interacting with people such as chatbots and AI agents and AI content more transparent and trustworthy. These guidelines support providers and deployers in meeting their obligations under the AI Act, while helping citizens know when they are interacting with AI.”

Systems must include machine-readable markers to reveal such content, to reduce “the risk of deception and manipulation” and build public trust in AI.

“Generative systems have collapsed the cost of producing convincing content while the cost of judging it stands where it always stood,” said Sanchit Vir Gogia, chief analyst at Greyhound Research. This requirement is “an attempt to restore friction to that imbalance.”

A company’s non-compliance could result in fines anywhere from €750K (about $856K) to €15M (about $17 million), or even up to 3% of its total worldwide annual revenue.

Transparency requirements

The EU AI Act’s transparency requirements apply to “natural or legal persons,” public authorities, agencies, or other bodies that develop AI systems, or have them developed, and place them on the EU market or into use under their name or trademark. This means all companies, regardless of whether or not they are EU-based.

“Systems placed on the European market, put into service there, or producing outputs used there are inside the field, wherever the developer sits,” Gogia noted.

Applicable systems must be intended to interact directly with “natural persons”; these systems include AI-enabled chatbots or conversational agents, AI companions, or coding agents. However, AI-enabled tools like recommender systems, spam filters, authentication, search and retrieval, transcription, text and code auto-completion, or predictive maintenance do not fall under the rule.

Specific outputs such as AI-generated text, images, video, and audio must contain a machine-readable mark. Deepfakes and public interest-related text created by AI without human review or control must be clearly labeled, however, deepfake content that is “artistic, creative, satirical, or fictional” is largely exempt.

AI content must be marked with one of three labels: “AI,” “Fully AI-generated,” or “Partially AI-modified.” For instance, “Fully AI-generated” applies when news summaries, music, art, or videos have been created without any human oversight (apart from prompting), while “partially AI-modified” could mean a person’s face is swapped into an authentic photograph to create a deepfake.

The three icons are publicly available for free use; enterprises can download zip files in PNG and SVG formats.

Most of the Act’s transparency rules begin to go into effect on August 2. But AI systems placed on the market before then will have some leeway; they must be in compliance by December 2.

However, a four-month allowance “on one obligation, for one population of systems, contingent on one procedural step, is not a strategy,” Gogia emphasized. Enterprises should plan to comply by August 2 and “treat any relief that arrives as margin.”

A consistent code of practice

Along with the transparency guidelines, the Commission has introduced a code of practice that essentially serves as a gesture of good faith. When signed, it can provide “legal certainty” and a “simple and practical” way to demonstrate compliance with the AI Act, according to the Commission. Signatories can also collaborate through the ‘Signatory Taskforce,’ which will share practices and advance technologies around marking and labeling practices.

Providers that choose not to sign must comply through other methods and demonstrate that those methods are “adequate” through assessment by surveillance authorities, according to the Commission.

Non-signatories “keep their flexibility, and will face more case-by-case scrutiny for it,” said Gogia.

Criteria for compliance

Shashi Bellamkonda, principal research director at Info-Tech Research Group, pointed out that the transparency requirements apply to content only when three criteria are met: It has been published, is informative to the public, or is on matters of public interest.

B2B business content or blogs may not need an AI disclosure if they do not meet these criteria, he noted. Also, published text that has undergone human review or is under editorial control does not need to be labeled. Editorial control means that a person must hold the ultimate legal responsibility for the publication of the content.

Many companies like Google, Adobe, and LinkedIn have already established ways to identify images marked as AI-generated. Meta has made it a requirement, but the creator has to add the AI-generated label, Bellamkonda said.

“This is a good move for guardrails around public information, and companies with good compliance and ethical oversight may not have to worry about this,” he noted. But as a general practice, companies should disclose AI-generated content and state whether it has been human reviewed.

Creating a transparency pipeline

Establishing full transparency means identifying who carries the responsibility for the content, whether the marking survives real use, not just testing, and what evidence will defend the decision, Gogia said.

Concerns cluster around responsibility, durability and evidence. Several organizations usually touch one piece of content, and none controls the whole chain, which is why contracts become the “pressure point,” he said. Most current agreements were written to deliver software and say “almost nothing” about provenance persistence, verification access, or evidence retention.

The durability concern is the most difficult, Gogia noted, because marking performs well in controlled settings but “badly in ordinary life.” Meta, for one, said its invisible watermark was designed to survive cropping; a published test, however, found the company’s preview detector missed 55% of cropped images.

“CIOs should ask which platform can actually provide evidence before believing its dashboard,” said Gogia.

Disclosure of AI use must be “clear, distinguishable and accessible,” he emphasized. “A notice buried in lengthy terms, or reachable only through determined clicking, satisfies nobody, least of all a market surveillance authority.”

Sustained compliance is a “living control” requiring a central record of systems, duties and evidence; testing taking place where the user meets the control rather than where the developer built it; and continuous supplier assurance. Enforcement will vary by country, so keep one common baseline with local overlays, Gogia said.

His advice: Inventory every system that talks to people, generates content, or gauges sentiment; classify provider and deployer roles; place disclosures at first interaction; define substantive human review; keep the evidence.

Marks and provenance signals should be tested after content undergoes cropping, compression, translation, transcription, and other editing, Gogia said. A useful audit starts from a real output and follows its “pulse” through generation, editing and publication, identifying at “each beat” the responsible party, the surviving mark, and evidence for exceptions. Missed labels should also be traced for root cause and recurrence.

To ensure compliance, before August 2, enterprises need a prioritized inventory, live disclosures on the highest-risk use cases, and a “named owner for every control,” he noted. In the first 30 days, they should stabilize and test; in the first 90 days, push requirements into procurement processes as a standing discipline. Procurement must secure commitments on marking methods, known failure modes, and evidence access, with explicit notice if/when any of them change.

“The sensible architecture is a common transparency baseline carrying traceability, responsibility, and evidence, with jurisdictional overlays for language, sector rules, and local practice,” Gogia said.

This article originally appeared on CIO.com.

Looking ahead just a short time, Apple could hold a powerful position in AI where it most makes sense: deployment.

Not only will the company offer up its own AI models for the kind of tasks millions use ChatGPT to do today, but it will provide more sophisticated on-device agentic models to help users get things done through Siri AI.

Apple also offers limited capacity for more complex tasks through Private Cloud Compute, and, in partnership with the likes of Google in the US and Alibaba in China, the company is giving users a trusted conduit through which to access even more sophisticated AI services. 

Deeply deployable

Critics can say it took Apple a long time to get to this point, but they also seem to think the company has finally got the mix right with its series 27 operating systems. Arriving late to a party doesn’t mean you won’t shine once you get there.

Apple is also coming up the inside lane around frontier AI, with iterative OS and hardware enhancements that mean its devices become increasingly effective for Edge AI use cases, on device — no cloud service required.

The company appears to be digging down into those use cases. Mark Gurman at Bloomberg recently predicted that future M7 Ultra Macs will support as much as 1.5TB RAM, making these systems more than capable of running full weight frontier models in people’s offices, colleges, and homes. 

While that does assume the AI-flationary memory market can supply that much RAM at prices humans can afford, it is also true that people are already running AI clusters using off-the-shelf Mac minis networked over Thunderbolt cables. It’s no stretch to believe this will continue to be the case, and that it will even broaden as the power/performance offered at the high end grows.

What’s wrong with good enough?

When combined with open AI stacks, particularly newly emerging varieties, Apple’s platforms should become leading contenders for private AI services and edge AI. Many business users will leap at the chance to offer their workers powerful, self-hosted, private AI services using one or more daisy-chained Mac Studios or Mac minis. The recent craze in deployment of both Macs to support OpenClaw instances shows they already are.

Ultimately, these different slices of momentum mean I agree with investor Jason Calacanis that Apple is in position to apply a great deal of pressure on OpenAI and Claude just by putting models on their devices. 

It’s also worth thinking about how people use AI today. How many of the queries made in the world right now constitute relatively simple tasks that could be transacted by on-device AI, such as the emerging new version of Apple Intelligence or even smaller LLM models running on device? You can even run PrismML’s 1-bit, 27-billion parameter Bonsai on an iPad using the Locally app, and that’s in the here and now.

What happens? Pretty soon you’ll find people recognize that they can already run the vast majority of their AI-augmented workflows using services they have on their existing device or can access on their on-prem Mac set-ups. And, of course, as people get used to running small tasks locally and larger tasks on premises, the actual space in which they need to turn to cloud-based frontier models will erode. That’s even as companies like PrismML work towards slimming down full-weight models so they don’t need to run on a server at all.

“It’s going to be wild when people have unlimited tokens on their desks,” said Calacanis in a podcast round table discussion.

Who has the most to lose?

The current incarnations of AI felt like they came from nowhere. Most people weren’t aware of the technology until returning to work after the 2022 holiday season. Since then, the industry has proliferated with dozens of competing models, most recently including powerful but affordable frontier models such as Qwen and Kimi.ai.

These models aren’t necessarily all as good as one another, but in many cases for much of what we do, we’ll find them to be good enough. That’s an existential crisis for some, as industry observers now think the inevitable pricing pressure means some services might have over-invested in capacity before finding any way to turn a profit.

Those profit-seeking services are the ones with the most to lose as Apple extends its hardware advantage, democratizing AI access for all while providing platforms suitable for edge AI, on-premises AI, private AI, and even AI access using third-party services. (The need for the latter will shrink as the capabilities of the former get better.)

Cupertino rising

What does this all mean? While the industry remains young, it is already fragmenting. And striding through the dust of that process comes Apple, equipped with the hardware, software, and approach to build its business even as the enterprise of first mover AI services erodes.

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As Apple gears up to anoint John Ternus the new company CEO in September (while current leader Tim Cook takes a seat on the board) the company appears to be firing on all cylinders ahead of the leadership transition. 

What’s going well

Just look at the evidence: 

• Apple is building market share across its entire product range; even memory-driven price inflation doesn’t seem to have dampened demand for its hardware yet.
• While Apple had to raise prices, the company’s MacBook Neo remains seriously popular. It’s sitting atop Amazon’s US best-selling chart, which currently includes six Macs in the top 10. The Neo has topped this chart since its introduction.
• Apple’s iPhone 17 series continues to sell well, with recent market data showing sustained growth. Both Counterpoint and IDC tell us that iPhone shipments continue to increase, even as other vendor shipments slide.
• IDC analyst Francisco Jeronimo recently estimated that Apple’s upcoming foldable iPhone Ultra could grab 29.4% of global folding smartphone sales this year, rising to 34.9% in 2027.
• The company’s new 27 series of operating systems is attracting a great response as beta testers report that it is already solid, stable, and performing well.
• The AI narrative has really changed, with analysts no longer quite so starry-eyed at the prospects for the big frontier AI firms. Apple’s edge-AI-enabling approach is winning converts.

What’s coming up

The company’s newly-filed lawsuit against OpenAI may or may not succeed, but it will certainly help consolidate recognition of the importance of Apple’s designs and intellectual property in whatever hardware emerges from the AI firm. It also means both Apple and OpenAI are already competing in hardware, even though neither company yet offers anything that directly challenges the other. 

Apple has just set out its stall to brand-loyal fans in a big way and did so before OpenAI gets to woo the same set of customers with a wriggle of its Jony Ive-tinged talisman.

The stage is set for intense competition between the two. Though some say Apple’s needs to improve employee retention, if it does find proof of efforts to use recruitment to engage in industrial espionage, it’ll be easier to represent its own products as being the OG for new hardware. 

If nothing else, it means consumers will forever be asking, “If OpenAI’s designers are so good, why did it need to poach them from Apple?” Doubt is a weapon.

Managing perception

It doesn’t matter how the case goes, because there fight is already affecting consumer psychology. It also means that as Ternus prepares to take his seat atop the rainbow-colored Apple throne, we can already size him up. “A man is measured by his enemies,” Joe Abercrombie wrote in “The Trouble With Peace.”

Given the proximity of the leadership transition, it’s highly probable that Ternus signed-off on the litigation; in doing so he — and Apple — tell us to expect more of the same. 

Apple has, rightly or wrongly, decided that OpenAI will become its new existential bugbear, following in the footsteps of Microsoft Windows, Real Networks, Adobe Flash, Android, and Samsung, all of whom have been useful foils against which Apple has been able to build and maintain its identity.

Looking at that list, you’d be tempted to believe that nothing much is new. Apple has often defined itself by the enemies it sometimes keeps. What has been will be again, which in this case means even as OpenAI attempts to carve out an identity as a hardware manufacturer delivering solutions to compete with Apple and Google, Ternus’ team’s looks to drive a consensus-shaped wedge into the pro-LLM propaganda. 

That blow comes as Apple finally gets its act together around AI, and as the company prepares for a future in which the world’s most-used wearable device also becomes the wearable way to woo Siri AI.

My kingdom come

Rising market share, powerful solutions, an increasingly recognized and respected approach to AI, and an ideological crusade — these details constitute Apple’s place today and are Tim Cook’s coronation gift to Ternus. He’s passing along a strong and hyper-profitable baton that screams of timeliness and relevance even as the company gets set, ready, to go with a year or two of new product designs, new product families, and a 20^thanniversary iPhone.

This is Apple’s party. OpenAI’s name didn’t make the list. 

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Just in time for the iPhone’s 20th anniversary, Apple is moving closer to becoming a service company. It is set to launch its new deal with Klarna next week and when it does, Apple enthusiasts in the US will effectively be able to subscribe to their favorite Apple hardware, with the cost spread across up to three years.

This matters because when combined with Apple One and Apple’s Creator Studio subscriptions, the Klarna arrangement brings Apple closer to offering a full subscription model for hardware, software, and services. The only thing you don’t get under the new arrangement is AppleCare, for which you’ll allegedly need to pay extra.

Moving closer to hardware-as-a-service

Apple has slowly been transitioning toward hardware-as-a-service for almost a decade. Back then, Forrester analyst Frank Gillet predicted the company would eventually offer bundles of services and products for a monthly, all-in, fee. 

This isn’t quite where we are yet; you still need at least three subscriptions to get close. But, after the better part of a decade, Apple has moved much nearer to the hardware-as-a-service idea.

There are some products reportedly excluded from the arrangement, including MacBook Neo, Apple Watch SE, the entry-level iPad, and iPhone 16. Clearly, Apple sees those products as sufficiently affordable. 

Easy payments for RAM-ageddon

The new Klarna arrangement comes as Apple is forced to increase product prices as AI-driven memory price inflation becomes widely felt across every economy. In theory, I assume, Apple hopes to make its products available to cash-strapped consumers who need new hardware, while also navigating a time of deep economic tumult and uncertainty. It’s thought the company has previously rejected these plans to protect normal hardware sales, but normality is a kingdom we no longer seem to possess. Interesting times. Probable inflation incoming.

“Apple Upgrade lands at precisely the moment Apple needs it,” IDC analyst Francisco Jeronimo wrote in a note seen by Computerworld. “Having just pushed Mac and iPad prices up on the back of the memory shortage, with iPhone increases widely expected in September — as well as the new iPhone foldable expected at $2,500 — Apple’s real risk is that rising prices even further can impact the upgrade cycle.” 

New age, new shopping habits

The introduction of the scheme gives consumers a way to purchase the company’s popular high-end devices when they are introduced — no doubt,at higher cost — this fall. Plus, of course, if it’s good enough for GM, it’s good enough for Apple.

It’s all about attitude, too. From Apple’s perspective, it has done plenty of the groundwork required to convince its customers that subscription payments for things you value are no bad thing. 

Reluctance to embrace “Access Not Ownership’”purchasing models has dropped dramatically since Apple — and CEO Tim Cook — first began banging the drum for services income. Apple’s services stream has now become its second-biggest revenue driver after the iPhone. It has over 1 billion paid subscriptions, and an active hardware installed base of more than 2.5 billion devices globally.

A combination of changed customer habits and external threat means the stars are now aligned for hardware-as-a-service models. “Reframing a device as a low monthly payment protects that [upgrade] cadence and allows Apple to start marketing their products as device-as-a-service to consumers, which no other vendor was ever able to do,” Jeronimo wrote to me. 

There is a one-more-thing aspect to this: the products are effectively being leased, a new approach that will give Apple a stronger grip on EOL devices, helping it grab more of them for refurbishment, resale, and recycling. Over time, this will give the company a much stronger grip on the lucrative second-user market that exists around Apple equipment, even while for almost every consumer product we find the life we want is something we can rent, but probably can’t afford to own.

Managing future risk

The other solid reason to take a partnership approach is risk management. Apple had intended to develop its own buy-now, pay-later scheme via Apple Pay Later, but abandoned that plan as it became riskier with rising bank rates. “Also, by backing the program with Klarna rather than reviving the in-house subscription plan it shelved in 2024, Apple captures the demand upside without taking the credit risk onto its own balance sheet,” Jeronimo said.

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Among a range of factors leading to a wave of tech sector layoffs in 2026 is the rapid rise of artificial intelligence and automation. Companies are reconfiguring their workforces to leverage AI for increased efficiency and reduced operating costs. This realignment and reduction is implemented even by companies reporting strong financial performance.

But it’s not just AI leading to workforce cuts. Complementing this technological shift are ongoing economic uncertainty, inflation, and higher interest rates, compounded by a chip shortage and rising energy costs. This mix is driving companies to cut costs and streamline operations for increased efficiency.

According to data compiled by Layoffs.fyi, an online tracker that keep tabs on job losses in the technology sector, 123,941 tech employees were laid off at 269 companies in 2025. The site also reports that 71,981 government employees were laid off by DOGE alone, with 182,528 total federal workers laid off.

Here is a list — to be updated regularly — of some of the most prominent technology layoffs the industry has experienced recently.

Notable tech layoffs in 2026

• Monday.com
• Microsoft
• Meta
• Cisco
• Cloudflare
• Oracle
• Atlassian
• Salesforce
• Amazon
• Ericsson

July 22, 2026: Monday.com cuts 20% of its workforce to restructure for the AI era

The company says the decision to cut 620 jobs isn’t about margins, but about creating a flatter organization built around AI agents, autonomous teams, and deeper customer engagement.

July 6, 2026: Microsoft cuts 4,800 jobs, primarily in sales and Xbox teams

As the company trims thousands of jobs, it’s also investing in embedded engineering teams and AI infrastructure. The layoffs come several weeks after the company offered 8,750 US employees voluntary retirement buyouts.

June 5, 2026: Tech industry cut 38,242 jobs in May, worst since 2024

AI was blamed for 40% of the job cuts in May, up from 7% in January, according to research by employment placement company Challenger, Gray & Christmas.

May 20, 2026: Meta cuts 8,000 jobs, around 10% of workforce

The cuts are expected to expected to hit Meta’s engineering and product teams the hardest, arriving as Meta pivots toward AI to boost efficiency across its organization, according to Yahoo Tech.

May 13, 2026: Cisco to cut nearly 4,000 jobs despite strong growth in AI, enterprise networking

Despite reporting positive financial news — including record third-quarter revenue of $15.8 billion, a 12% year-over-year increase — Cisco said it will eliminate almost 4,000 jobs.

May 7, 2026: Cloudflare to cut 1,100 jobs in AI-focused restructuring

About 20% of Cloudflare’s global workforce will be culled as the company pivots for the agentic AI era, Reuters reported.

April 1, 2026: Oracle to cut up to 30,000 jobs globally, putting enterprise support and roadmaps at risk

Oracle began laying off employees on March 31 in what could be the largest workforce reduction in the company’s history. Employees received termination emails at 6 a.m. local time with immediate system lockouts and no prior warning. (Note: in June, CNBC put the final layoff tally at 21,000.)

March 12, 2026: Atlassian cuts 1,600 jobs to fund AI and enterprise expansion

Atlassian will reduce its global workforce by approximately 10%, eliminating around 1,600 roles, as the collaboration software maker redirects capital toward artificial intelligence development and enterprise sales.

March 11, 2026: Tech layoffs surpass 45,000 in early 2026

A recent analysis by RationalFX found 45,363 job cuts globally so far this year—with roughly 68% or more than 30,000 occurring in the U.S. — highlighting ongoing workforce cuts even as many tech companies report strong revenue growth.

February 10, 2026: Salesforce lays off staffers as executive leadership churn continues

Salesforce has reduced close to 1,000 roles earlier this month across teams, including marketing, product management, data analytics, and its Agentforce AI unit, Business Insider reported, quoting employees familiar with the matter.

January 23, 2026: Amazon layoffs expected to disproportionately hit AWS and tech talent

As the market slows down, AWS and other Amazon units are preparing for another round of layoffs, which is expected to overwhelmingly impact tech talent. An email from HR leader Beth Galetti on Jan. 28 confirmed 16,000 job cuts.

January 15, 2026: Ericsson plans to shed 1,600 jobs in Sweden

 Ericsson lans to cut some 1,600 jobs in Sweden, the telecommunications equipment maker said doubling down on recent cost-saving measures that have helped it weather a prolonged downturn in telecoms spending, Reuters reports.

January 13, 2026: Meta plans to cut around 10% of employees in Reality Labs business

Meta plans to cut around 10% of the employees in its Reality Labs division who work on products including the metaverse, according to three people with knowledge of the discussions, according to The New York Times.

Layoffs in 2025

• Cisco
• Oracle
• Windsurf
• Intel
• Microsoft
• Crowdstrike
• HPE
• Autodesk
• HPE
• CISA
• Workday
• Salesforce
• Meta

Global tech-sector layoffs surpass 244,000 in 2025

Economic uncertainty, elevated interest rates, and AI adoption have driven workforce reductions across tech companies worldwide, according to a RationalFX report.

October 28, 2025: Amazon to cut 14,000 jobs across company

Amazon will reduce its overall workforce by 14,000, cutting layers of management across the company and hiring in some areas to support its “biggest bets”.

August 18, 2025: Cisco and Oracle to cut hundreds of Bay Area jobs

Tech companies Cisco and Oracle are cutting hundreds of jobs across the Bay Area. Cisco will eliminate 221 positions at its Milpitas and San Francisco offices, effective Oct. 13. Oracle is reducing 101 positions in Santa Clara on the same date 

August 5, 2025: 3 weeks after acquiring Windsurf, Cognition offers staff the exit door

Cognition, the AI coding startup that acquired rival company Windsurf three weeks ago, laid off 30 employees last week and is offering buyouts to the roughly 200 remaining employees on the team, reports The Information.

July 25, 2025, Intel to lay off 22% of workforce, CEO Tan signals ‘no more blank checks’

Intel will reduce its workforce to 75,000 employees by the end of 2025 as new CEO Lip-Bu Tan implements sweeping changes designed to transform the struggling chipmaker

July 8, 2025, Intel layoffs begin: Chipmaker is cutting many thousands of jobs

Intel has begun laying off employees across the company. CEO Lip-Bu Tan told workers back in April to expect major layoffs at Intel in the coming months as the chipmaker slashes costs and overhauls its organization after years of technical setbacks and falling sales.

July 2, 2025: Microsoft will cut 9,000 workers

Microsoft will lay off about 9,000 employees, a source familiar with the workforce cut told CNBC.  The cuts will reportedly affect less than 4% of Microsoft’s global workforce and will impact different teams, geographies and levels of experience. This is the latest in a string of cuts the tech giant has made this year.

June 17, 2025: Intel looks to factory layoffs to return to profitability

Intel will lay off up to 20% of its manufacturing sector employees starting in July, according to media reports, as the company looks for options as it seeks a return to profitability. The cuts reportedly will be made around the world, but some of the layoffs will be closer to home, according to a report in The Oregonian citing an internal company memo from Intel manufacturing Vice President Naga Chandrasekaran.

May 7, 2025: CrowdStrike to lay off 5% of staff

CrowdStrike announced a plan to cut about 500 roles, roughly 5% of its workforce, to streamline operations and reduce costs. The cybersecurity company will incur about $36 million to $53 million in charges related to the layoffs

March 6, 2025: HPE cuts 2,500 jobs, remains committed to Juniper buy

CEO Antonio Neri told Wall Street analysts that HPE would begin implementing a cost-cutting program involving layoffs of about 2,500 employees over the next 18 months. HPE employs about 61,000 people worldwide.

Feb. 27, 2025: Autodesk to lay off 9% of workforce

Software maker Autodesk is laying off 1,350 staff. With the rise of subscription and multi-year contracts billed annually, and self-service enablement, it finds it needs fewer sales staff, CEO Andrew Anagnost said in a message to employees. And with its cloud, platform, and AI products proving most profitable, it’s concentrating its staff and investments there.

Feb. 27, 2025: HP to lay off 2,000 more

As part of an ongoing restructuring, HP plans to lay off up to another 2,000 workers. In recent weeks, the company has tried — unsuccessfully — to do away with telephone support staff by forcing callers to wait for at least 15 minutes if they refuse to use self-service support resources online. The company swiftly backtracked, but wider job cuts are still on.

Feb. 21, 2025: CISA lays off 130

Government employees get laid off too: In this case, 130 workers at the US Cybersecurity and Infrastructure Security Agency are being shown the door as a result of a DOGE decision. Cybersecurity experts are concerned that the cuts will harm the international collaborations that CISA has fostered, quite apart from their concerns about the security of the DOGE layoff process itself.

Feb. 5, 2025: Workday lays off 1,750

As it moves to invest more in AI and international growth, Workday is laying off 8.5% of its workforce and disposing of unused office space. Some analysts fear the cutbacks will affect the company’s customer service — unless AI can pick up the slack.

Feb. 4, 2025: Salesforce lays off over 1,000

At the same time as it’s hiring sales staff for its new artificial intelligence products, Salesforce is laying off over 1,000 workers across the company, according to Bloomberg. As of June, 2024, the company had over 72,000 employees, according to its website. Salesforce did not comment on the report. In 2024 the company reportedly laid off around 1,000 staff too, in two waves: January and July.

Jan. 14, 2025: Meta will lay off 5% of workforce

Mark Zuckerberg told Meta employees he intended to “move out the low performers faster” in an internal memo reported by Bloomberg. The memo announced that the company will lay off 5% of its staff, or around 3,600 staff, beginning Feb. 10. The company had already reduced its headcount by 5% in 2024 through natural attrition, the memo said. Among those leaving the company will be staff previously responsible for fact checking of posts on its social media platforms in the US, as the company begins relying on its users to police content.

Tech layoffs in 2024

• Equinix
• AMD
• Freshworks
• Cisco
• General Motors
• Intel
• OpenText
• Microsoft
• AWS
• Dell

Nov. 26, 2024: Equinix to cut 3% of staff

Despite intense demand for its data center capacity, Equinix is planning to lay off 3% of its workforce, or around 400 employees. The announcement followed the appointment of Adaire Fox-Martin to replace Charles Meyers as CEO and the departures of two other senior executives, CIO Milind Wagle and CISO Michael Montoya.

Nov. 13, 2024: AMD to cut 4% of workforce

AMD will lay off around 1,000 employees as it pivots towards developing AI-focused chips, it said. The move came as a surprise to staff, as the company also reported strong quarterly earnings.

Nov. 7, 2024: Freshworks lays off 660

Enterprise software vendor Freshworks laid off around 660 staff, or around 13% of its headcount, despite reporting increased revenue and profits in its fourth fiscal quarter. The company described the layoffs as a realignment of its global workforce.

Sept. 17, 2024: Cisco lays off 6,000

After laying off around 4,200 staff in February, Cisco is at it again, laying off another 6,000 or around 7% of its workforce. Among the divisions affected were its threat intelligence unit, Talos Security.

Aug. 20, 2024: General Motors lays off 1,000 software staff

More than 1,000 software and services staff are on the way out at General Motors, signalling that it could be rethinking its digital transformation strategy. In an internal memo, the company said that it was moving resources to its highest-priority work and flattening hierarchies.

August 1, 2024: Intel removes 15,000 roles

Intel plans to cut its workforce by around 15% to reduce costs after a disastrous second quarter. Revenue for the three months to June 29 stagnated at around $12.8 billion, but net income fell 85% to $83 million, prompting CEO Pat Gelsinger to bring forward a company-wide meeting in order to announce that 15,000 staff would lose their jobs. “This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history,” Gelsinger wrote in an email to staff, continuing: “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both — particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

July 4, 2024: OpenText to lay off 1,200

OpenText said it will lay off 1,200 staff, or about 1.7% of its workforce, in a bid to save around $100 million annually. It plans to hire new sales and engineering staff in other areas in 2025, it said.

June 4, 2024: Microsoft lays off staff in Azure division

Microsoft laid off staff in several teams supporting its cloud services, including Azure for Operations and Mission Engineering. The company didn’t say exactly how many staff were leaving.

April 4, 2024: Amazon downsizes AWS in a fresh cost-cutting round

Amazon announced hundreds of layoffs in the sales and marketing teams of its AWS cloud services division — and also in the technology development teams for its physical retail stores, as it stepped back from efforts to generalize the “Just Walk Out” technology built for its Amazon Fresh grocery stores.

April 1, 2024: Dell acknowledges 13,000 job cuts

Dell Technologies’ latest 10K filing with the US Securities and Exchange Commission disclosed that the company had laid off 13,000 employees over the course of the 2023 fiscal year; it characterized the layoffs and other reorganizational moves as cost-cutting measures. “These actions resulted in a reduction in our overall headcount,” the company said. A comparison to the previous year’s 10K filing, performed by The Register, found that Dell employed 133,000 people at that point, compared to 120,000 as of February 2024. Dell announced layoffs of 6,650 staffers on Feb. 6, but it is unclear whether those cuts were reflected in the numbers from this year’s 10K statement.

See news of earlier layoffs.

AMD executives took to the stage at its Advancing AI 2026 event in San Francisco today to detail the company’s next generation of AI infrastructure solutions, from Instinct MI455X AI accelerator GPUs and 6th Gen EPYC “Venice” CPUs, to Pensando networking, ROCm.AI software and its Helios rack-scale platform that ties it all together.

AMD has been working towards rack-scale AI system solutions for years. Its ZT Systems acquisition last year added valuable engineering talent and intellectual property that is now finally bearing the real fruits. Its Helios AI platform is a major platform evolution for AMD, with shipments scheduled to begin in the second half of this year (which is here and now).

The announcements at Advancing AI show how the company has engineered its AI platform solutions for large reasoning models, sustained inference and agentic workflows. These workloads pressure memory capacity, data movement, networking and CPU orchestration. AMD’s approach is to keep as much data close to the compute engines as possible and move it more efficiently throughout the system, but there’s deeper nuance here that’s obvious versus AMD’s chief rival, NVIDIA.  

AMD’s MI455X targets the AI memory wall

The Instinct MI455X GPU is the compute engine that fuels the Helios rack, and the first GPU based on AMD’s new CDNA 5 architecture. Built with a modular mix of 2nm and 3nm chiplets, it carries 432GB of HBM4 and 23.3TB/s of peak memory bandwidth.

Compared to AMD’s current MI355X, the MI455X offers 1.5 times the memory capacity, up to 2.9 times the peak memory bandwidth and up to four times the peak matrix performance with MXFP4 and MXFP8 data types, which are lower-precision numerical formats designed to accelerate AI processing while reducing memory demands. With MXFP6 (6-bit floating point), performance is rated at up to twice that of MI355X.

AMD also shared some actual, measured internal results using production silicon. The company claims MI455X delivers 3.8 times higher FP8 decode performance, 3.5 times more measured FP4 compute performance and between 2.5 and 3.5 times more networking bandwidth than MI355X, depending on the transfer path tested. Those figures provide more context than just numerical specifications, though they remain AMD-provided comparisons that will need independent validation.

AMD

The architectural choices behind the numbers are important. Reasoning models and long context windows require sizeable KV caches for maintaining AI attention states, while mixture-of-experts models frequently move large amounts of data across accelerators. MI455X should let more model data, activation states and cache remain local. New dedicated IP in hardware can transfer data while the GPU continues processing, and expanded cache and multicast capabilities are designed to reduce redundant data movement to further improve efficiency.

The aforementioned lower-precision formats can also raise throughput and reduce memory use, but model developers still have to determine where they can be applied without unacceptable accuracy loss.

AMD’s Helios rack takes aim at Vera Rubin

Dave Altavilla

Helios is AMD’s primary rack-scale competitor to NVIDIA’s Vera Rubin platform. Each liquid-cooled rack combines 72 MI455X GPUs, 18 single-socket Venice host CPUs and Pensando networking technologies.

In its most complete, premium configuration, AMD rates Helios for 2.9 exaflops of low-precision AI compute, with 31TB of aggregate HBM4 capacity, 1.7PB/s of memory bandwidth, 260TB/s of bidirectional scale-up bandwidth and 43TB/s of scale-out bandwidth.

These are formidable figures, but they are technical specifications rather than actual application benchmarks. The more consequential development is AMD’s move from collections of eight-GPU servers to a 72-GPU shared-memory domain. Models too large for one node can operate across the rack without treating every exchange as a scale-out networking transaction, which benefits large-model inference as well as training.

AMD uses UALink over Ethernet, or UALoE, for an open standard scale-up fabric. Each MI455X provides 3.6TB/s of bidirectional scale-up bandwidth, while the complete rack delivers all-to-all connectivity through a single switch layer. AMD also claims six times more scale-out bandwidth per GPU than MI355X when MI455X is configured with three Pensando Vulcano 800 AI NICs.

While open standards give cloud providers more control over suppliers and system design, AMD and its partners now have to prove those components can deliver the predictable performance, reliability and deployment experience customers expect from a tightly controlled, more vertically integrated platform.

Finally, AMD designed Helios with automatic rerouting around failed links, virtual rack partitions, tray-level serviceability and rack-wide power, cooling and health monitoring. Major hyperscalers and potentially large-scale enterprise customers will likely key in on these capabilities, which can affect the availability, total cost and consistency of the AI services they consume.

Kind of like cowbell, AMD Venice gives agentic AI more CPU

AMD

AMD’s agentic CPU messaging regarding its upcoming Venice-based EPYC processors is mostly marketing speak, but the underlying requirement is very real. An AI agent can invoke retrieval, databases, security checks, code execution and other tools before a GPU generates a response. Running many agents concurrently increases the amount of conventional compute requirements surrounding the accelerators.

Venice scales to 256 Zen 6 cores with support for 512 threads, 16 memory channels, up to 1GB of L3 cache per socket, along with PCIe 6.0 and CXL 3.1 connectivity. AMD is also offering several Venice configurations for other applications, including general-purpose servers, high-frequency workloads, GPU hosts and high-density CPU sandbox systems used to execute agent tools.

Treating the CPU solely as a GPU host understates its role. Gateways, tokenization, vector search, databases and short-lived code execution stress different mixes of per-core performance, thread count, memory bandwidth and I/O. Specifically, AMD’s internal testing shows Venice significantly outperforming its current EPYC 9965 Turin CPU across five parts of the agentic AI pipeline, including gateway processing, context assembly, vector search, enterprise applications and short-lived tool execution. Individual gains vary by workload, but AMD details the overall generational improvement at up to a 1.7 times lift. As with the MI455X figures though, these comparisons come from AMD and will require independent validation.

Pensando networking and ROCm software advance

Keeping GPUs fed with data and coordinating traffic across racks directly affects utilization and operating costs. In fact, GPU utilization is a pretty sad state of affairs currently for some of the major frontier model providers.

As such, Pensando networking has become central to AMD’s roadmap. Helios can connect each MI455X to as many as three 800Gbps Vulcano AI NICs, while Salina DPUs handle front-end networking and infrastructure services.

On the software side, which is an equally critical component, AMD also introduced ROCm.AI, an AI-assisted development layer due to arrive in August. It includes reusable skills for coding agents, simplified management and Hyperloom, which can profile workloads, tune serving configurations, modify kernels and validate results.

These tools address two persistent AMD challenges: developer efficiency and ease of use, and software tuning. Automated optimization still has to produce repeatable gains without creating hard-to-maintain code, however. And while ROCm has progressed significantly over the last few years, NVIDIA’s CUDA retains an advantage in maturity, tooling and developer familiarity.

Customer commitments underscore rack-scale confidence

AMD now has commitments that give its MI450 generation and Helios considerably more weight. Meta and OpenAI have announced multi-generation agreements composed of up to 6GW of AMD compute capacity, with initial 1GW deployments planned for the second half of 2026.

Oracle plans a 50,000-GPU public cloud cluster beginning in the third quarter, while Microsoft will deploy Helios for Azure AI inference. Finally, just before the AMD event, Anthropic announced a strategic partnership for up to 2 Gigawatts of AMD-fueled AI compute, with its first gigawatt expected online in the first half of 2027.

Commitments of this scale reflect confidence in more than just MI455X performance. These customers are evaluating the complete architecture, including Venice CPUs, Pensando networking, ROCm software, rack integration, serviceability and AMD’s ability to deliver and execute across multiple product generations.

There is some financial alignment behind the agreements as well. AMD issued OpenAI performance-based warrants and committed to investing up to $5 billion in Anthropic. That context matters when evaluating these deals as market validation, but these planned deployments are substantial nonetheless and put Helios on a much stronger foundation as it begins shipping.

AMD expands its robotics and embedded foundation

AMD also expanded its physical AI portfolio, building on credible traction from its Xilinx-derived Kria adaptive system-on-modules and embedded technologies that are already powering robotics, machine vision and industrial automation applications.

The new Ryzen AI Embedded X100 combines up to 16 Zen 5 CPU cores, integrated Radeon graphics, a second-generation NPU and as much as 128GB of unified LPDDR5X memory shared across its compute engines. To me this looks a lot like a repackaging and optimization of the company’s Strix Halo platform, but with specific optimizations for the embedded space. Regardless, AMD is pairing X100 with the Kria AI Robotics Developer Platform, which includes a System Module or SOM, and a new Robotics Partner Network spanning hardware, software and platform providers.

Samples began shipping in June, with full production expected in the fourth quarter. This broader objective is to give developers a path across AMD x86 CPUs, GPUs, NPUs and FPGAs for real-time autonomous systems, rather than requiring them to assemble those hardware engines and software components independently.

Execution for AMD is now the test

AMD has assembled a credible platform for the burgeoning agentic AI market that’s blowing up currently with no signs of stopping. MI455X addresses memory and data movement, Venice handles dense agentic CPU workloads, Pensando networking connects global system resources, and ROCm.AI addresses software complexity. Finally, Helios assembles these components into a true competitive threat for NVIDIA’s latest Vera Rubin platform.

AMD’s open architecture may appeal to customers seeking supplier choice, but openness must also translate into reliable deployments, competitive total cost and software that does not require a significant rip-up. NVIDIA enters this cycle with a stronger ecosystem and far more rack-scale deployment experience. The true test will be how easily and reliably customers can integrate, operate and maintain these AMD solutions at scale.

As it stands, AMD now has major customers and a clearly defined architecture with systems engineering expertise behind it. Delivering Helios on schedule and showing that its performance claims translate into a real production workload throughput advantage and total cost of ownership gains will determine how much the competitive gap narrows. And of course, this is in a market that is clamoring for ever-more compute resources with a seemingly insatiable demand for AI services and capacity. That’s an environment for big iron success. Now AMD just has to deliver optimized, turnkey AI platforms. This is far easier said than done, but time will soon tell as deployments take shape this year.

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Microsoft cloud and Azure services hosted on the West Coast of the US went down for hours on Thursday when network connectivity failed. Although services running entirely within Microsoft’s West US cloud region were unaffected, any traffic entering or leaving the facilities was affected.

Microsoft has now published a Preliminary Post Incident Review (PIR) of the incident, reporting that connectivity was lost for five hours between 14.44 UTC (7.44 a.m. Pacific Time) and 19.41 UTC on July 23. The problem was caused when a set of IP routes was removed in error while isolating a device for routine maintenance.

Before starting the maintenance work, Microsoft checked that at least one of the two redundant paths to the facility remained operational. When it came to starting the work, however, automated systems included some additional devices in the perimeter to be isolated, and removing some IP routes that had not been included in the initial assessment.

Customers discovered the problems very quickly, and engineers identified the issue within the first hour and started to reconnect services.  Microsoft said the disruption had been caused by some “recent fiber maintenance activity”.

To minimize the risk of disruption from such errors in the future, Microsoft advised organizations handling mission-critical data to consider a multi-region approach.

The Azure outage was the second significant one to hit Microsoft this year. In February, there was a 10-hour disruption to US West and US East regions.

This article first appeared on Network World.

When it comes to building an effective AI stack, context is king and power isn’t everything it’s cracked up to be.

“Smaller, smarter, safer — this is a bet our company has taken in how we deploy AI internally,” said Ricky Thakrar, head of sales and account management at Zoho, provider of a suite of popular cloud-based software solutions for sales, marketing, and finance.

“I’m on the business side, and so decisions made by our CIO and IT folks affect me directly, and my teams’ workflows and processes,” he added.

Speaking to a room of tech leaders at the CIO 100 Leadership Live New York event last week, Thakrar explained that every company wants the speed of AI-generated work wedded to the quality of human work, even though these two are diametrically opposed. No amount of model upgrades or spend will close that gap, so the only way forward is to architect your way out. Thakrar encapsulated this idea in a simple formula:

• Smaller: Stop deploying maximum firepower on every task. Many tasks don’t need it.
• Smarter: The system around the model decides more than the model does.
• Safer: Verify at the point a mistake gets locked in, not just downstream of it.

He noted that organizations that win with AI won’t be those deploying the biggest, most powerful models or the most sophisticated architecture, but the ones that figure out that the model is the easy part and the right architecture is harder. That means understanding the hardest element, and the biggest differentiator, is building a human system that learns and compounds alongside agentic systems.

To get it right, organizations need to prioritize the context layer. The size of frontier models like the GPT series, Claude, and Gemini mostly exist to compensate for missing context, Thakrar explained. Without enough context, models need to be able to reason harder and infer more about what a user actually means because it doesn’t know the user’s account, process, or history. A rich context layer makes it possible for enterprises to run workloads on much smaller, lower-power models.

“The intelligence moves from the model into the architecture around it,” he said.

A steep learning curve

One of Zoho’s earliest AI agents was a churn management agent to help the account management team detect churn in customer subscriptions. So when a subscription became inactive, the agent would collect context from notes, meeting recordings, and Zoho’s data enrichment tool, then create a summary of reasons the account might have churned, and schedule a call.

“What happened was I got this churn agent a couple months later, already embedded in our CRM, and within a week my team no longer trusted that agent,” Thakrar said. “The reason is we forgot to collect one very key point.”

In Zoho’s CRM, when a customer buys a bundle of products, that bundle is represented as a single line item. That means the status of any products the customer may have previously purchased individually changes to inactive as they’re moved to the bundle. That’s not churn, but it was interpreted it that way. Zoho fixed it in the second version of the agent.

Then a new problem arose. Many potential customers first purchase Zoho products as pilots or sandboxes. As those customers move from pilot to live instance, they close down the pilot versions. And again, the CRM would record that as subscriptions going inactive.

“The trust deteriorates again because everyone got excited for version 2,” Thakrar said.

Sometimes, a certain product might not be the best fit for a customer and Thakrar’s team will suggest the customer move to another product. That’s deliberate churn, not a churn risk.

“You may have a similar story like this where the agent sounds so good, it’s going to do something quick and add value, but it’s missing context from the account managers, and there are so many more pieces we’re still building out,” Thakrar said. “It’s been almost a year and the problem I have is my team still doesn’t trust it. They’ll see [a message from the agent] and go out and do all the research anyway to make sure it gave the correct answer.”

The team is more on top of potential churn, though, but the promised productivity gains have yet to materialize because the agent has to earn back lost trust due to a lack of context.

“My goal for this year is having an AI-assisted customer journey from sales to account management where the handoff is clean, the context flows, and every piece of information we gather about a customer is weighed, identified, and coached so the sales team can close more deals,” he said.

Zoho’s early experience with agents has led to the idea that constrained, context-rich, deterministic architectures consistently outperform expensive models bolted onto fragmented systems. It all comes down to three pillars: routing, harness, and specialization.

Routing

Routing is about sending workloads to the proper model for the job, which entails providing enough context to a given task that a small, cheap model can handle it without the need for spare reasoning capacity to fill gaps.

Frontier models are expensive and companies can burn through a year’s budget worth of tokens in months. But most tasks can be handled by much smaller, more constrained models at a fraction of the cost.

“You don’t always have to pay the frontier guys for every task,” he said. “We’ve observed with some clients that we could save them 95% with a 3 billion parameter model.”

Harness

An AI agent harness is the software infrastructure scaffolding around an LLM that differentiates an agent from a chatbot. It’s what enables an agent to act on tasks rather than simply respond to prompts. A model reasons through a problem and decides what to do about it. The harness connects the model to the tools, systems, memory, guardrails, and execution environments required to perform the actions determined by the model. The term is frequently used more or less interchangeably with orchestration layer.

“It’s the process around the model, which matters way more than the model itself,” Thakrar said.

In benchmark tests, a superior harness on a less powerful model produces better results than an inferior harness on a much bigger model.

For the best results, Thakrar said, it’s essential to understand the deterministic and non-deterministic elements of a given workload, and build that into the architecture. Machines can read, organize, and validate, and they excel at deterministic tasks. Humans, on the other hand, are exceptional at non-deterministic tasks like judging, synthesizing, and deciding.

Those non-deterministic tasks in a process are the ideal point for AI agents to incorporate a human in the loop, what Thakrar calls human harness. He pointed to a stakeholder mapping agent Zoho built for sales as an example, which takes the context of an initial meeting and third-party enriched data like a LinkedIn profile, weighs probabilities, and makes an educated guess about the stakeholder map.

“The initial goal was just to eliminate that task completely from the human workflow,” he said. “The stakeholder map is done, it’s in the folder, and you can look at it.”

But the agent would struggle to capture nuance. The meanings of titles in organizations always vary, and the politics and dynamics of any given meeting can be difficult for an AI agent to discern. Rather than keep feeding the agent data to try to make it intelligent enough to make those determinations, it was simpler and more efficient for the agent to create a proposed stakeholder map and hand it over to a human who could make changes and explain why those changes were necessary.

Ultimately, Thakrar said the agent still saved human team members time because the stakeholder map was usually pretty close, and the corrections also helped the model grow smarter by adding richer context.

Specialization

Specialization is transitioning a process from testing on a frontier model to production on a much narrower, smaller model. Once you’ve proven that an agent can do a job well, you want to stop paying master-craftsman rates to keep doing that one job well.

Specialization is all about capturing your subject matter experts’ best judgement and pattern recognition to build an open-weight, open source, trained, and fine-tuned model that can be deployed in your own data center.

“The true enterprise bet is to keep that orchestration layer, which is your IP and knowledge, in house,” Thakrar said. “You don’t want to host that on someone else’s model. The goal of everyone in enterprise should be to run, train, and host their own models.”

I have worked alongside enterprise technology for more than 30 years and watched AI evolve from a lab experiment into the modern boardroom’s core focus. However, the last few years of implementing AI alongside our customers have delivered our most profound reality checks.

The initial hype has faded, leaving CIOs to drive real enterprise value. Based on my experience implementing Google, OpenAI and Anthropic technologies, here are the fundamental, technology-agnostic lessons every leader must anchor their strategy around.

AI as a leadership multiplier

The most common tactical error we see is treating AI as an isolated technology project. What I have observed among our customers is that true success does not come from organizations that define a standalone “AI strategy,” but rather from those leaders that integrate AI into their business strategy.

When our customers isolate AI and define an AI strategy, it inevitably treats it like a “technological toy” to experiment with. This approach yields fragmented, orphaned initiatives that fail to scale because they are fundamentally disconnected from their core corporate objectives. What I learned is that AI is not the ultimate destination; it is a powerful catalyst. We have replaced “What can AI do for our customers?” with a more strategic question, “How does AI accelerate their existing business goals?”

Think of AI like electricity. No modern corporation designs a standalone “electricity strategy.” Instead, all companies route it invisibly across the entire organization to illuminate offices, power production lines and drive communication. AI must be woven into the enterprise fabric in the exact same way, acting as an underlying utility that supercharges your existing operational model.

Integrating AI into the broader business strategy also dictates how we measure success. It forces a shift away from short-term tech vanity metrics and anchors the technology into a long-term roadmap.

When AI remains trapped within the IT department of our customers, we notice that it is relegated to a mere “software experiment.” To become a true competitive advantage, we observed that AI requires intense cross-functional orchestration. This perspective does not diminish the merit of the technical team; their expertise is fundamental for establishing the architecture, data governance and tools your enterprise requires. However, while IT builds the foundational infrastructure, it lacks the organizational authority to decide what should be built on top of it. Only the CEO or the owner of the company can step in to ensure AI leaves the “toy project” phase and integrates into the DNA of the organization.

The requirement for top-down, executive ownership stems from three critical realities observed in the field:

• Silo-smashing and data collaboration: True enterprise AI is data-hungry and that data lives across disparate business lines, finance, operations, marketing and customer service. Only the CEO possesses the cross-functional authority to demand that data silos be dismantled.
• Cultural transformation and fear mitigation: AI triggers widespread anxiety over job displacement across all industries and hierarchies. When relegated to an “IT project,” resistance spikes as teams view it as a threat to their livelihoods. When I saw the CEO lead this cultural shift directly is when I noticed the best results.
• C-Suite education and strategic alignment: The mandate for AI capability cannot just be delegated downward; the transformation must begin at the very top. I have conducted more than 70 presentations for the Board of Directors and C-Level teams. These people need to be actively educated not on technical code, but on specific business use cases, return on investment (ROI) frameworks and how AI resolves core organizational bottlenecks.

PwC’s data found that only 12% of enterprises have achieved both cost and revenue benefits from AI. Those elite 12% succeeded precisely because their CEOs embedded AI extensively across strategic decision-making and cross-functional workflows. AI is simply too disruptive and too critical to be left exclusively in the hands of technical experts. If AI is not on the CEO’s weekly agenda, it is fundamentally missing from the company’s true strategy.

AI as a new operational framework

Traditional IT systems have operated on strict algorithmic certainty: if you input a specific set of data, the system executes an immutable line of code and guarantees the same, predictable output every single time.

AI completely breaks this paradigm. Because modern AI is built on probabilistic models, it does not execute static formulas; instead, it predicts the most likely correct response based on mathematical probabilities. This means that AI solutions carry an inherent, small percentage of uncertainty and variability. A prompt entered today might yield a slightly different, though contextually valid, output tomorrow.

Executive leadership and organizational cultures must be actively educated to accept and navigate this fundamental shift. Traditional quality assurance frameworks for software are designed for a 100% success rate. Applying this rigid standard to AI will paralyze your initiatives, keeping 80% of your projects trapped eternally in the pilot phase. This happened to us in a food and beverage company in Latin America a couple of years ago. After this experience, we started to include conditions in our contracts that tolerate statistical margins of error and still define the project as a success.

In terms of cost calculation, we had to teach CIOs and business managers to forget the monthly subscription model for AI and learn to manage the primary unit of exchange in modern AI: the token.

To understand AI costs, executives must understand how large language models process data. AI models do not read full words; instead, they break text, images or code down into “pieces” called tokens. As a baseline, every 100 words process as approximately 130 to 140 tokens. Because the major AI providers use the token as their currency, your business is billed dynamically based on the exact volume of tokens consumed by every query submitted (input) and every response generated (output).

Many leaders believe AI costs are fixed due to flat-rate enterprise tiers ($25–$30/user). This is a temporary illusion. These venture-capital-subsidized rates mask true operational costs and come with dynamic usage limits. Modeling long-term ROI on them guarantees a severe budget shock when true consumption pricing takes over.

The solution is not to halt AI adoption; doing so means losing your competitive edge. Instead, the cost per token must cease to be treated as a technical footnote relegated to the IT department. It must be elevated to a core business variable.

Risks in the AI adoption model

Since the beginning of the AI boom, I have seen all our customers making a critical tactical error that could cost them heavily in the medium term: they are focusing only on operational efficiency (reducing costs with AI).

I have observed that an alarmingly high percentage of companies remain trapped in pilot phases focused exclusively on short-term cost reduction. Bain & Company’s global Automation and AI Pathfinder Survey found that the largest share of companies measuring their AI initiatives (exactly 40%) realized cost reductions of 10% or less, heavily missing their internal targets. Our customers are putting too many resources and effort into marginal financial gains and in doing so, they are jeopardizing their most valuable assets: service quality, resilience and customer trust.

Utilizing AI solely to slash headcount or cut operational corners is a dangerous trap that introduces severe field liabilities. A financial service organization in Latin America announced that they saved $1 million in customer support by replacing humans with AI chatbots. However, the mid-term reality revealed a different story: a damaged brand reputation due to AI errors and an influx of frustrated clients fleeing because the automated system cannot handle special cases.

Putting a company on an extreme AI diet might make it look leaner on next quarter’s financial statement, but over-indexing on cost-cutting will ultimately leave the business too weak to compete when market dynamics shift. We are now inviting our customers to change the question from “How much money will AI save us?” to “How will we leverage AI to exponentially increase the long-term value of our enterprise?”

Deploying enterprise AI is a marathon, not a sprint, and the terrain changes with every mile. The organizations that thrive in this next era will be those that transition from fascination to discipline, treating AI not as a magic bullet for immediate savings, but as a core capability that demands rigorous governance, architectural foresight and cultural maturity. Navigating this shift requires moving past the theoretical hype and anchoring decisions in raw, field-tested reality.

As we continue to deploy these technologies across industries, the blueprint for success is being rewritten in real time. Let’s keep this conversation going as we map out the future of business intelligence together.

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Model Context Protocol (MCP), the emerging standard for connecting AI models to external tools and enterprise data, is undergoing its biggest architectural overhaul yet.

The latest release candidate, scheduled for release on July 28, removes protocol-level sessions in favor of a stateless architecture, a change which industry experts say is intended to make MCP easier to deploy across standard cloud infrastructure as enterprises move AI pilots into production.

“The session-based model made sense when MCP servers were local processes on a developer’s laptop. In production, it became an operational tax,” said Muskan Bandta, cloud associate at ZopDev.

“When your infrastructure team asks whether MCP services can scale like other cloud applications, the answer used to be ‘not quite.’ With the move to a stateless architecture, the answer is now yes,” Bandta added.

Earlier versions of the protocol maintained information about every client connection, meaning servers had to keep track of each session throughout an interaction. While that approach worked well for local development, it complicated deployments across multiple servers because requests often had to be routed back to the same machine, limiting scalability and making MCP a less natural fit for modern cloud architectures.

“Under the new stateless design, every request contains the information needed for any available server to process it independently. Applications that need to maintain context across multiple requests can still do so, but developers must now manage that state explicitly rather than relying on the protocol itself,” she said.

This transition to a stateless design goes beyond simplifying infrastructure by fundamentally changing how AI applications manage and share context across tools, according to Amit Jena, AI development manager at IT consulting firm Kanerika.

Instead of keeping application state hidden inside protocol sessions, the new design makes it explicit, allowing AI models to access, reason over, and pass that information between tools, giving developers greater control over how context is preserved and shared across tools, Jena said.

It should also make AI workflows more portable, resilient, and easier to orchestrate across distributed environments, he said.

MCP’s new features

Other changes to MCP include the addition of a Multi Round-Trip Requests (MRTR) mechanism that changes how AI agents request additional information they need to complete a task.

Instead of relying on a persistent connection between the client and server throughout the interaction, the new mechanism lets the server request additional input through a standard request-response exchange before continuing the task, Jena said.

Routable transport headers, another addition, enable API gateways and other networking infrastructure to identify and route MCP requests without inspecting their contents.

They reduce processing overhead, lower latency, and let enterprise teams enforce routing, rate-limiting and security policies more efficiently using existing API management infrastructure, Jena said.

MCP is also getting an updated authorization framework built around OAuth 2.1 and OpenID Connect; interactive MCP Apps; and deterministic caching of tool and resource listings to improve LLM prompt-cache hit rates, potentially saving on token costs.

Rebuilding the trust boundary

The MCP release steering committee also decided to deprecate some legacy features, including Roots, Sampling, Logging, the older HTTP+SSE transport and Dynamic Client Registration, although these will continue to work in this version and any other released over the next year.

The deprecation of Sampling is likely to have the biggest impact because it changes who is responsible for interacting with foundation models, said Jena.

“Sampling let MCP servers invoke the LLM through the client, which meant the server had a callback path into the model without owning that connection. Deprecating it means rebuilding that trust boundary,” Jena said. “Your server now calls the model provider directly. That changes your network architecture, your auth model, and depending on how you’ve built cost attribution, your billing flow.”

The year-long transition period will be enough for teams to audit their sampling dependencies now, said Jena: “The risk is that teams who haven’t implemented sampling themselves won’t know if a third-party MCP server they’re depending on uses it.”

Updated MCP SDKs

To accompany the protocol update, there are updated MCP SDKs for Python, Typescript, Go, and C#. These support both the old and new protocol versions, so new clients can continue communicating with older servers, while updated servers will also support older clients, reducing the risk of immediate disruptions.

That backward compatibility should make the transition largely incremental, except for enterprises that built custom infrastructure around MCP’s earlier session-based architecture, Bandta said.

Identifying and auditing those session dependencies may not be easy, Jena warned.

“Session management complexity tends to be hidden across multiple layers — the gateway config, the deployment scripts, the monitoring dashboards. The code change is small; finding everywhere the assumption lives is what takes time,” he said.

This article first appeared on InfoWorld.