Wall Street Breakfast Podcast: Google Trots Out Legend To Inspire Gemini Devs

Google (GOOG/GOOGL) is intensifying efforts to advance Gemini AI, emphasizing faster model development and monetization under new leadership. Sergey Brin is pushing for recursive self-improvement in Gemini, aiming for compounding performance gains in each AI iteration. Cisco (CSCO) delivered strong Q4 results with 35% YoY product order growth and robust AI-related revenue guidance, but shares dipped after a substantial pre-earnings rally. Cisco projects $7.5B in AI-related revenue from hyperscalers by 2027, with Q1 revenue and EPS guidance exceeding consensus estimates.

Google (GOOG)(GOOGL) co-founder Sergey Brin has recently urged the company's AI staff to devote more effort to improving the capabilities of its flagship model Gemini, according to Reuters. Executives have taken a more hands-on approach in directing the DeepMind AI lab, pushing engineers to develop new models faster and focus more on monetization. Last week, Google CEO Sundar Pichai announced several significant changes to AI leadership. The reorganization was tied, in part, to Google's AI commercialization strategy, the report said. Brin also wants the AI team to focus more on recursive self-improvement, a compounding process where an AI system helps design, code or train its own next generation. Each iteration is expected to perform better than the last.

Meanwhile, Jeff Dean, who spent 27 years helping build Google, has been in discussions for $1B in financing at a valuation of around $10B for his new AI startup, Discovery Loop, according to Business Insider. Discovery Loop has been one of the most talked-about startups in Silicon Valley over the past week, after Dean, regarded as a legend at Google, announced his departure.

Cisco Systems (CSCO) is lower premarket, even after posting Q4 results and guidance that topped forecasts. The company ended the quarter with a 35% year-over-year increase in product orders, or 25% excluding hyperscalers, with double-digit growth in every geography and market. Networking product orders grew 40%, the eighth consecutive quarter of double-digit growth. But the stock had rallied about 35% in the three months leading up to the earnings report.

For fiscal Q1, Cisco expects revenue of between $18B and $18.2B, well above the $16.84B analysts expected. Adjusted EPS is forecast at between $1.32 and $1.34, above the $1.17 estimate. On the earnings call, management said it sees $7.5B in artificial intelligence-related revenue from hyperscalers in 2027.

And U.S. Army forces got a wake-up call about modern drone warfare during a major exercise in Germany last spring. Experienced Ukrainian drone operators repeatedly found and knocked out American armored units, The Wall Street Journal reported. During the Combined Resolve exercise, Ukrainian troops from the 412th Regiment of Unmanned Systems Forces used reconnaissance, explosive-dropping and first-person-view drones against U.S. forces. About 3,500 U.S. personnel, primarily from the 3rd Armored Brigade Combat Team, 1st Cavalry Division, participated. American armored vehicles proved particularly vulnerable. Their movement kicked up dust, making them easier to detect from the air. Ukrainian reconnaissance drones located the vehicles before attack drones moved in for simulated kills. The Ukrainians eliminated U.S. vehicles so rapidly that some had to be returned to the exercise, effectively "re-spawned" in gamer parlance, to keep the scenario running.