AI Daily: AI Search takes center stage at Google I/O event

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

GOOGLE I/O KEYNOTE: Alphabet (GOOGL) CEO Sundar Pichai took the stage on Tuesday at the AI Mode with the goal of revamping Search.

Google’s CEO Sundar Pichai opened the I/O keynote with an “Everyday is Gemini season at Google.” He also made a series of announcements, including Ironwood coming to Google+ customers later this year. He also noted that Gemini App has now 400M+ monthly active users. Pichai introduced Google Beam, pointing out that the first devices with Google Beam — in partnership with HP (HPQ) – are expected to come to users later this year. Google rolled out Gemini Live on Android and iOS on Tuesday, with Project Mariner coming to Gemini API soon. Gemini SDK is now compatible with MCP tools. Also coming soon to subscribers is Agent Mode. Google also said that Project Astra, the mobile AI package that can react with real-time images and input, is coming to Android and iOS. Discussing personalization with AI, CEO Pichai said that with user permission, Gemini will be able to use information to power Personal Context, including in Gmail with personalized replies.

The company introduced Gemini 2.5 Flash, generally available in June, with Gemini 2.5 Pro soon after. Google unveiled a new version of Gemini Diffusion, and said that Gemini 2.5 Pro Deep Think is currently available to trusted testers. The company also showcased Gemini Robotics. A new AI Mode in Search became available on Tuesday as users place longer and more complex queries. Among other announcements, Google said Gemini 2.5 is coming to AI Overviews and AI Mode, introduced Search Live, said Camera and Screen sharing are coming to android and iOS Gemini apps, and that Gemini will work while users browse the web on Chrome. The company also announced new Google AI plans, with Google AI Pro priced at $19.99/month and Google AI Ultra at $249.99/month. The company also noted that its Android XR Glasses will partner with Gentle Monster and Warby Parker (WRBY).

IO PRODUCTS: OpenAI is set to acquire Jony Ive’s hardware start-up io Products for about $6.5B, people familiar with the matter told Financial Times‘ Michael Acton, Cristina Criddle and George Hammond. Ive, the designer behind many of Apple’s (AAPL) best-known products, left the company in 2019 after almost three decades, the report noted.

In a video posted to is X account, OpenAI confirmed that Jony Ive and LoveFrom will assume design and creative responsibilities across OpenAI and io and that io will merge with OpenAI. “We look forward to sharing our work next year,” the company added in the video that featured Ive and OpenAI CEO Sam Altman.

FUNDING SECURED: Crusoe’s Texas data center for Microsoft (MSFT)-backed OpenAI has secured $11.6B in funding to expand from two to eight buildings, The Wall Street Journal’s Berber Jin reports. The data center, expected to be OpenAI’s largest, will use up to 50,000 Nvidia (NVDA) Blackwell chips per building as OpenAI looks to reduce reliance on Microsoft for computing power. Both Crusoe and investment firm Blue Owl Capital (OWL) are contributing cash to the data center project as part of the latest financing, according to the report.

U.S. EXPORT CONTROLS: Nvidia (NVDA) CEO Jensen Huang said U.S. export controls limiting the sale of advanced chips to China have been a failure and commended President Trump for reversing a part of the Biden administration’s policy, Liza Lin of The Wall Street Journal reports. The control have made China push ahead with building its own AI technology and Nvidia has lost market share to domestic competitors in the country over the past four years, Huang added, according to the Journal.

XAI: Tesla (TSLA) CEO Elon Musk says merging XAi into Tesla is “not out of the question,” but not something that is currently being discussed or planned and it is something that Tesla shareholders would have to approve. Tesla’s Musk is being interviewed on CNBC.

U.S. SERVER PRODUCTION: Super Micro (SMCI) plans to expand its server production capacity in the U.S. amid rising AI demand, The Wall Street Journal’s Liza Lin reports, citing comments made by CEO Charles Liang. Super Micro is considering expanding production to Mississippi and Texas due to rising costs in Silicon Valley, but cut its sales outlook for fiscal 2025 due to customer order delays and economic uncertainty from U.S. tariffs.