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🤖 Generative AI's Tipping Point: Walmart, Nvidia, and the Race for GPUs
Today: Musk Considers ADL Lawsuit Over Ad Drop | Meta, LG Plan 2025 VR Headset | Spotify Slashes White Noise Ad Payoutst |
Kristoffer Lindström
September 05, 2023
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Greetings!
It's Tuesday, August 5, and the tech world is buzzing with groundbreaking stories you won't want to miss. Let's dive right into today's top headlines:
SpaceX's $64M iPhone SOS Deal
Spotify Slashes White Noise Ad Payouts
Apple, Microsoft Debate EU Digital Act
Musk Considers ADL Lawsuit Over Ad Drop
Walmart, Nvidia Vie for AI GPUs
Europe's Smartphone Shipments Hit 9-Year Low
High NRR Startups See 2x Growth
Meta, LG Plan 2025 VR Headset
and more…
READ TIME: 5.8 MINUTES
Tech Companies
Globalstar has partnered with SpaceX in a $64 million deal to launch satellites in 2025, aimed at expanding the Emergency SOS feature on Apple's iPhone 14 and upcoming iPhone 15.
Spotify is revoking certain advertising privileges for white noise podcasters starting October 1st. The move aims to enhance the company's annual profits by focusing on more engaging content. White noise podcasters can still earn through paid subscribers and automated ads, but will be excluded from Spotify's Ambassador Ads program, which previously allowed some to make up to $18,000 a month.
💡 Why does this matter?
This change could significantly impact the revenue streams for white noise podcasters and shift the content landscape on Spotify. It also indicates Spotify's strategic focus on optimizing profitability, which could affect future advertising and content policies.
According to anonymous sources, Apple and Microsoft are contending that their services, iMessage and Bing, are too insignificant to be considered "gatekeepers" under the new EU Digital Markets Act. Bing holds about 3% of the global search share, while Google dominates with 91%. The Act aims to enforce new regulations on large tech companies, but it's unclear if iMessage and Bing will be included in the upcoming list of "gatekeepers."
💡 Why does this matter?
If Apple and Microsoft succeed in their argument, they could dodge stringent EU regulations designed to level the playing field in the tech industry. This could set a precedent for other smaller services to avoid regulatory scrutiny.
Elon Musk threatens to sue the Anti-Defamation League (ADL), blaming them for a 60% decline in U.S. advertising revenue for X, formerly known as Twitter. Musk accuses the ADL of trying to "kill" the platform by falsely labeling it anti-Semitic.
Amazon is facing multiple lawsuits from landlords over halted Amazon Fresh grocery stores, including a $37 million suit in New York. The company has been reevaluating its grocery strategy, leading to paused or canceled stores.
💡 Why does this matter?
Amazon's legal troubles could signal deeper issues in its grocery expansion strategy. Over the past year, the growth rate of Amazon’s physical store sales has almost halved, from 13% in Q2’22 to 7% in Q2’23.
Startup Scene
Envisics, a UK-based holographic company, has closed a $100 million Series C round to advance its augmented reality heads-up display (AR HUD) technology in cars. General Motors plans to feature Envisics' second-generation displays in the electric Cadillac Lyriq.
AI Corner
Generative AI is seeing increased business adoption, notably with Walmart deploying a gen AI app to 50,000 non-store employees. The technology drives demand for graphical processing units (GPUs), mainly from Nvidia, which recently reported strong earnings. The surge in demand has led to partnerships, like that between Google and Nvidia, and is raising questions about generative AI's future scalability and limitations.
💡 Why does this matter?
The growing adoption of generative AI could mark a significant shift in computing, affecting everything from business applications to chip manufacturing. However, limitations in current technology and the high costs of training these models could be potential roadblocks.
Markets & Money
According to Counterpoint Research, European smartphone shipments have hit a new low, declining 12% YoY in Q2 2023. Western Europe saw a 14% drop, while Eastern Europe experienced an 8% decline. Russia, however, reported a 4% YoY growth.
Insights & Analysis
A survey by SaaS Capital involving 1,500 private SaaS companies found that startups with high Net Revenue Retention (NRR) grow twice as fast as the median. The survey highlighted that increasing NRR from the 90-100% range to the 100-110% range improves the growth rate by nine percentage points. Companies with the highest NRR reported median growth double that of the population median.
💡 What can we learn from this?
High NRR is a strong indicator of top-tier growth for SaaS companies. Investing in customer retention strategies like upsells and cross-sells can significantly impact a company's growth trajectory.
Klaviyo, a leader in the Shopify partner ecosystem, boasts impressive metrics with $650M+ in ARR, a 56.5% growth rate, and 119% NRR from SMBs. The company is profitable, has 130,000 total customers, and is deeply dependent on Shopify. It has maintained 110%+ NRR for over three years and sees its $50k+ customers growing at 94% YoY.
💡 What can we learn from this?
Klaviyo's success story offers a roadmap for SaaS companies, especially those focused on SMBs. High NRR and diversification in customer segments can fuel rapid growth. However, reliance on a single platform like Shopify can be a double-edged sword.
Apps & Gadgets
Meta reportedly partners with LG to produce future Quest Pro headsets, slated for 2025 and priced around $2000. LG Electronics will handle production using components from multiple LG subsidiaries.
💡 Why does this matter?
This partnership could accelerate Meta's entry into the high-end VR market, potentially competing with Apple's Vision Pro. It also signifies a broader collaboration between software-first and hardware-specialized companies in the XR space.
Google's Pixel Buds Pro is rumored to be released in two new colors, Porcelain and Sky Blue, to match the upcoming Pixel 8 Pro smartphones. The announcement is expected on October 4.
A recent leak from a well-known source suggests that the Nintendo Switch 2 could feature PS5-like graphics quality and confirmed backward compatibility. The leak also mentions the release of development kits to trusted partners and hints at a new camera feature, possibly for augmented reality.
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