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OpenAI Scores Record $6.6B VC Round, Shifts to For-Profit Model
Tech brief - 5 minute tech market update.
Kristoffer Lindström
October 02, 2024
TECH BRIEF
OpenAI has raised $6.6 billion in the largest venture capital deal ever, valuing the firm at $157 billion. The company plans to transition to a for-profit structure, with the funding round led by Thrive Capital and participation from Microsoft, Nvidia, and SoftBank, among others. This shift sees the organization transform from a non-profit lab to a product-focused firm.
Retail firms like Best Buy and Target struggle amid port strikes, potentially affecting holiday season profits. Nvidia leads a sector-wide decline among semiconductors. Apple shares drop nearly 3% following a research note from Barclays suggesting lower iPhone 16 demand. Lockheed Martin sees over a 3% rise amidst increasing military activity in the Middle East. Tesla is set to release its quarterly delivery figures, while General Motors reports a 3% sales gain and Toyota experiences a significant volume slump.
Google's multiple teams are developing AI reasoning software that can solve complex, multistep problems, pushing its rivalry with OpenAI. This initiative, utilizing a method called chain-of-thought prompting, seeks to emulate human reasoning processes. Despite slower rollouts of AI products, Google's formidable advancements include the math-reasoning tool AlphaProof and an upgraded model AlphaGeometry 2, both exhibited in July. Google DeepMind continues to pioneer in the AI field, striving for an edge over competing startups like OpenAI.
Nvidia has unveiled a robust, open-source AI model, the NVLM 1.0, that rivals industry giants such as OpenAI and Google. Lead by the 72 billion parameter NVLM-D-72B, the model demonstrates exceptional competencies in vision and language tasks while boosting text-only capabilities. This debut could accelerate AI development by providing wider access to state-of-the-art models, encouraging open research, and challenging established AI business models. The release raises questions about ethical implications as AI becomes more accessible.
Apple's most anticipated product of the year, Apple Intelligence, is set to arrive this month. The suite of tools branded as 'AI' will be available via free software updates for iPhones, Macs, and iPads. It will include an updated Siri, tools for automatic text summarization, audio transcriptions, and distraction removal from images. Apple Intelligence marks a new era for the tech giant, following a significant restructuring nearly two years ago post the industry disruption by OpenAI's ChatGPT chatbot.
Automattic, the parent company of WordPress.com, publicly clashed with rival WP Engine after demanding 8% of WP Engine's revenue in exchange for the right to use the WordPress trademark. WP Engine rejected the proposal, citing "fair use" of the name, and created its own solution when banned from Wordpress.org servers. The dispute questions the extent of contributions expected from companies using open-source code.
Meta, Facebook's parent company, has added new AI features to its Ray-Ban Meta Glasses, raising questions about how Meta uses the data collected. Upon explicitly being asked by TechCrunch if Meta uses images from the glasses to train AI models, Meta declined to provide clarity. Speculations now arise about Meta potentially using these images for AI training, especially as Meta already trains its AI on publicly posted Instagram and Facebook content.
AI sales bot developer, 11x.ai, has successfully procured approximately $50M in Series B investment led by Andreessen Horowitz, increasing the firm's value to almost $350M. This financial ascent follows the recent closure of the $24M Series A, led by Benchmark. The newly agglomerated funding may be used to diversify 11x.ai's AI bots, beyond sales representatives.
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