🤖 OpenAI Is Planing To...

What’s in today’s Business Edge update?

Greetings, all techy readers! OpenAI is revealing its future strategies with exciting GPU prospects and plans for GPT-4. Also, Meta might be considering a news blackout on its platforms over California's Journalism Bill.

In other hot topics, Meta is embracing the hybrid work model, mandating office attendance three days a week. Surprisingly, Fidelity has decreased the value of its equity stake in Reddit by a whopping 41%. Meanwhile, Dell suffers its largest quarterly revenue drop, with sales slumping almost 20%.

Let’s get started!

🌐 Big Tech Digest

Concise summaries of the most interesting tech news stories from Big Tech.

[1] OpenAI Charts Path Forward: GPU Challenges, Upcoming Features, and Plans for GPT-4

Last week, OpenAI CEO Sam Altman discussed with developers the company's API plans, and upcoming enhancements and acknowledged existing limitations, especially GPU shortages affecting their short-term plans. He emphasized the commitment to reduce the 'cost of intelligence' and assured continuous improvements to the APIs.

More:

• OpenAI is currently GPU-limited, slowing down the rollout of services like the longer 32k context and causing reliability and speed issues with the API.

• The near-term roadmap for OpenAI includes a cheaper and faster GPT-4, longer context windows (possibly up to 1 million tokens), an extended finetuning API and a stateful API.

• ChatGPT plugins, a feature many developers are interested in, aren’t expected to be released soon.

• Sam Altman reassured developers that OpenAI would avoid competing with customers, limiting their product range to ChatGPT.

• OpenAI is considering the open-sourcing of GPT-3 but still sees the need for regulating future models.

• The scaling laws for AI model performance still hold, which suggests AI will continue to become more advanced and powerful.

_{Tags: #OpenAI, #AI, #GPU, #GPT-4, #Scaling, #ChatGPT}

Read more about it at —> (read time: 15 minutes)

Insight:

From an industry-wide perspective, the GPU limitations faced by OpenAI may spur an increase in demand and developments in GPU technology, benefiting tech companies specializing in these areas. On the company level, OpenAI's commitment to minimizing the cost of intelligence could lead to more accessible AI technologies, opening new opportunities for startups and investors. Their pledge not to compete with customers aside from ChatGPT sets a platform-focused strategy, which could pave the way for broader adoption of their APIs and services. OpenAI's continued belief in scaling laws suggests a continuous increase in the capabilities of AI models, potentially shortening the timeline for AGI development. This could have significant implications for tech entrepreneurs, investors, and workers, as it signals potential opportunities and challenges in AI development and application.

[2] Meta Contemplates News Blackout on Facebook and Instagram over California's Journalism Bill

Meta threatens to remove all news content from Facebook and Instagram if California's Journalism Preservation Act, which mandates tech giants to pay news outlets for their content, is passed. Andy Stone, Meta Communications Director, criticized the bill as benefiting major media companies and failing to recognize that content providers willingly share their content on Meta's platforms.

More:

• The California bill aims to tax the profits tech platforms earn from distributing news articles, with 70% of the collected "usage fee" being invested in journalism jobs across the state.

• In response to Meta's threat, Assemblymember Buffy Wicks defended the bill and described Meta's strategy as a scare tactic.

• Mixed responses were seen from media organizations, with some supporting the bill and others arguing it would merely boost the profits of large conglomerates.

• Meta and Google had faced similar situations, such as when Australia passed a measure requiring tech platforms to pay for news content. Google even tested blocking news results in Canada.

• Around half of Americans get their news from social media sites, with a significant portion using Facebook, according to a 2021 Pew Research Center study.

_{Tags: #Meta, #Facebook, #Instagram, #Regulation, #California, #Journalism}

Read more about it at —> (read time: 10 minutes)

Insight:

This news potentially has a market-level impact, as it could significantly affect the landscape of content sharing and monetization on social media platforms, especially those under Meta. If the Journalism Preservation Act passes, it could set a precedent for similar regulations worldwide, which could shake up social media giants' revenue models and disrupt the way news is disseminated. For tech entrepreneurs, tech workers, and tech investors, this development signifies potential changes in the broader business environment and regulatory landscape for content-driven platforms. We could see shifts in strategies as businesses adapt to these changes and explore alternative methods of delivering news to audiences.

[3] Meta Mandates Office Attendance for Three Days a Week, Promoting Hybrid Work Model

Meta has announced that employees assigned to an office must report in person three days a week starting in September as it transitions to a more structured hybrid work schedule. The company asserts that this new approach will foster collaboration, relationships, and a conducive culture for employees to deliver their best work. The policy won't impact remote workers.

More:

• The three-day office mandate applies only to workers with some in-office days.

• According to a memo circulated to employees, Meta employees currently spend an average of 2.2 days a week in the office.

• Approximately 75% of Meta's workforce operates from an office.

• Earlier this year, Meta announced around 10,000 job cuts across various divisions, including Facebook, WhatsApp, Messenger, Instagram, and Reality Labs, as part of a 'year of efficiency'.

• Many employees across industries have expressed reluctance to give up the flexibility provided by remote work in the post-pandemic era.

_{Tags: #Meta, #WorkFromHome, #HybridWork, #BigTech}

Read more about it at —> (read time: 8 minutes)

Insight:

This development represents an industry-wide impact, as it reflects a trend among major tech companies, including Google, Apple, and Microsoft, to bring employees back to offices, at least part-time. This shift in work culture could set the tone for other companies, particularly tech startups, as they navigate post-pandemic work arrangements. We can anticipate the hybrid work model becoming the new norm, balancing the benefits of in-person collaboration and the flexibility of remote work. However, as many workers have preferred remote work, companies may need to consider such preferences in their talent acquisition and retention strategies.

⚡️Startup bites

Brief news summaries from the world of startups that provide quick and easy-to-consume information.

Reddit's primary investor in its 2021 funding round, Fidelity, has diminished its equity stake's estimated worth in the social media platform by 41%. Fidelity Blue Chip Growth Fund's stake in Reddit, which was $28.2 million in August 2021, is now valued at $16.6 million. This decrease brings into question Reddit's plans to go public at a valuation of approximately $15 billion. (link)

OpenAI is tackling AI 'hallucinations' by adopting a fresh approach to train AI models, rewarding individual correct steps in the reasoning process rather than just the final answer. This strategy, called 'process supervision', aims to enhance the explainability of AI and could foster a more human-like reasoning process in AI. The initiative comes amid increased concerns about misinformation from AI systems in the lead-up to the 2024 US elections. (link)

Planned layoffs in US companies have quadrupled this year, reaching 417,500 jobs through May, the highest since 2009, excluding the start of 2020, according to a report by Challenger, Gray & Christmas Inc. Tech, media, and banking sectors have been particularly impacted, with the tech industry recording its highest layoffs since 2001. The cause for the layoffs range from economic conditions and cost-cutting to the implementation of artificial intelligence. (link)

Dell reported its biggest quarterly revenue fall, with sales decreasing almost 20% from $26.12 billion to $20.9 billion. The PC manufacturer also predicts a similar decline in the current quarter. Despite exceeding analysts' expectations, the company's stock fell 2.9% in after-hours trading following this announcement. (link)

Stripe has announced a new charge card program, expanding from pre-funded accounts to credit-based spending for customers. The move allows businesses to create and distribute virtual or physical charge cards, offering a new revenue stream for Stripe while enhancing its financial capabilities. (link)

Google Cloud VP Amit Zavery has voiced concern over Microsoft's allegedly restrictive cloud software licensing policies, stating it unfairly increases costs for running Microsoft software on third-party clouds. Google urges EU antitrust regulators to address the issue to prevent lasting industry and customer damage. (link)

MongoDB Inc. reported stellar Q1 earnings and improved full-year forecast, driven by substantial customer gains, reducing the net loss to $54 million. The company also beat Wall Street estimates with earnings per share at 56 cents and revenue at $368 million, a 29% increase. MongoDB anticipates a promising future, especially with the rise of AI applications. The robust performance, including a 40% growth in Atlas revenue, prompted a 23% increase in stock value in extended trading. (link)

Netflix shareholders voted against the proposed high-paying packages for the company's executives, amidst ongoing writers' strike. However, the board can overrule this non-binding decision. (link)

Apple is actively recruiting software engineers with expertise in generative AI and mixed reality, hinting at advancements in Siri and the development of a high-end mixed reality headset expected to debut at WWDC 2023. (link)

Despite missing analyst estimates for net income and revenue, VMware's Q1 report highlighted a 35% surge in Subscription and Software-as-a-Service revenue to $1.22 billion. The company also logged an increase in remaining performance obligations by 13%, totaling $13.01 billion for the quarter. (link)

Google Wallet expands its service to become a hub for consumer transactions, adding health care and travel features to streamline user engagement and rival Apple Pay's cross-selling strategy. (link)

Microsoft is reportedly making a potentially multibillion-dollar investment in cloud computing infrastructure from CoreWeave, a startup backed by Nvidia. The deal is aimed at ensuring sufficient computing power for OpenAI, which relies heavily on Microsoft's Azure cloud infrastructure. The move comes amid growing demand for AI-powered services and Nvidia's GPUs, a crucial resource for running AI models. (link)

🔍 Extra

A mix of learning links, software products, deals, and other interesting content.

Balancing Act: How SaaS Companies Allocate Headcount

A recent analysis reveals the typical distribution of employees within SaaS companies. The median headcount for these firms is 834, with R&D and Sales & Marketing (S&M) representing 31% and 39% of employees, respectively. While some firms have heavy R&D focus (Dropbox: 47%, ZoomInfo: 38%), others lean towards larger S&M teams (Snowflake: 56%, Docusign: 64%).

More:

• General and Administrative (G&A) roles make up approximately 16% of the headcount.

• There were few companies with significant Customer Success teams, making it difficult to form general conclusions about this area.

• Unity has the highest percentage of R&D headcount at 69%.

_{Tags: #SaaS, #Workforce Structure, #R&D, #Sales & Marketing}

Read more about it at —> (read time: 5 minutes)