📉 Fidelity Slashes Musk's X Holdings Valuation by 71.5%: Inside Story

Hello readers, and welcome back to Business Edge!

We are back with regular updates now after the holiday break. I hope you feel refreshed!

First, a little announcement. The daily update will focus more on public growth and technology investment opportunities.

I want to increase the value we bring you and find that this is the best way to do that. We will help you stay updated on tech and highlight potential investment opportunities for you.

With over 13 years of working within investment banking, equity & venture investment as a strategist, operator, and board member of startups, the new focus fits my expertise the best. Please take a look at my LinkedIn for more insight.

I will continue delivering key news stories from the tech world but expand the scope to increase economic, macroeconomic, and earnings briefs from selected companies, world news, and more.

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Stay tuned for these exciting changes, and thanks for being a reader!

Best regards, Kristoffer

Update 2024-01-08

We have 16 new stories in today's update. Find the sections below to dig into it: Tech Companies | Startup Scene | AI Corner | Markets & Money | Apps & Gadgets

Spotlight*

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Tech Companies

Video Game Industry's Dark Year: 9000 Layoffs Overshadowing Successes (7-minute read)

The gaming industry of 2023 was marred by massive layoffs, affecting an estimated 9,000 workers. Major companies such as Epic Games, Embracer Group, Hasbro, and EA have all notably reduced their workforces. Epic Games cut 830 jobs following high spending and acquisitions, while Embracer Group initiated a massive restructuring program after a failed $2 billion dollar investment deal. The layoff trend raises serious concerns over corporations prioritizing growth over people. Despite these challenges, unionization efforts continue, suggesting hope for better protection for industry workers.

Apple Facing Global Antitrust Pressure Over App Store: Major Shifts Ahead? (7-minute read)

The Department of Justice (DOJ) is intensifying its antitrust case against Apple's App Store exclusivity, potentially leading Apple to permit third-party app stores or app sideloading within the US. This follows the European Union's mandate for competition within the iPhone app market, which Apple is working to comply with by April. Other countries, including Japan, are proposing similar legislation. This global pressure might prompt Apple to implement these changes worldwide.

Fidelity Slashes Musk's X Holdings Valuation by 71.5%: Inside Story (5-minute read)

Fidelity has further decreased the valuation of its shares in X Holdings, bought with Elon Musk for $44 billion. Now, Fidelity values X 71.5% less than at the time of purchase. This includes a 10.7% cut during November, a time when Musk controversially addressed X advertisers. Despite this, other shareholders may value X differently.

Startup Scene

Perplexity AI Raises $70M, Dares Giants with Innovative Search Approach (8-minute read)

Perplexity AI, an AI-driven search platform, has secured $70M in funding led by IVP with participation from Jeff Bezos and others, boosting its valuation to $520M. Using AI, Perplexity provides a unique search experience, allowing users to ask questions in a natural language and receive instant responses with source citations. The fresh funding will be used for team expansion and the development of new product functionalities. Despite facing potential challenges including copyright issues and the high cost of running gen AI models, the company's investor confidence remains strong.

Funding Crunch to Ease in 2024, Hopes High for Startups (6-minute read)

Venture capital funding is expected to improve slightly in 2024 from its frosty state in 2023, providing a glimmer of hope for cash-strapped startups seeking funding. However, the market will remain challenging, as highlighted by industry insiders including Marcos Fernandez of Fiat Ventures. Leading startup advisory firm PitchBook predicts an increase in capital deployment to VC firms this year, although it is likely to remain below 2022's peak levels. Despite these challenging conditions, startups are encouraged to remain cautious and prepare for long fundraising phases.

AI Corner

Inside Google's Gemini: Unpacking the New AI Platform's Capabilities and Limitations (8-minute read)

Google's new generative AI platform Gemini has three versions - Ultra, Pro, and Nano. Unlike its predecessor LaMDA, Gemini can comprehend and work with more than just text. Its multimodal capability allows it to perform a range of tasks including speech transcription, image captioning, and generating artwork. However, its full product-form yet to launch. Early user reviews suggest satisfactory results despite occasional inaccuracies and reasoning errors. The application cost will vary depending on usage once it exits the preview phase in Vertex. Gemini currently powers features in certain Google apps and services.

Unlocking OpenAI's GPT-4: 6 Key Strategies Revealed in New Engineering Guide (7-minute read)

OpenAI has outlined six strategies for improving responses from its GPT models in a recently released Prompt Engineering guide. These instructive strategies encompass creating clear directives, using reference text, dividing complicated tasks into simpler parts, allowing model 'thinking' time, utilizing external tools, and systematic testing changes. Embedded within these strategies are specific tactics based on Language Model (LLM) research findings. The guide also advocates the integration of GPT with other systems for enhanced functionality, with requisite safety disclaimers.

OpenAI Irks Developers by Scrapping Preferred Plugin System (10-minute read)

OpenAI has upset developers by phasing out plugins for ChatGPT, despite them being popular due to their comprehensive functionality. Instead, they are promoting GPTs, which, despite having limited functionality compared to plugins, aim to be safer and friendlier to everyday people. Developers' concerns over this change have been assuaged by OpenAI's assurance that plugins aren't going away, however, the emphasis is on the GPT store becoming the future.

OpenAI and Apple in Bidding War for News Licenses for AI Training (7-minute read)

OpenAI has been reaching out to media groups to license their news articles for training its AI, aiming to avoid legal copyright issues. This follows a lawsuit against OpenAI and Microsoft by The New York Times for alleged copyright infringement. OpenAI's licensing offers reportedly range between $1 million and $5 million, while Apple, developing its own generative AI, has proposed licensing deals worth at least $50 million.

Markets & Money

Hedge Funds Scoop Up $66B in Stocks as Retail Investors Exit (3-minute read)

In 2023, the US stock market experienced significant growth, with the S&P 500 Index rising 24%. However, many retail investors missed out on these earnings. On the other hand, corporations and hedge funds capitalized on this opportunity. According to Bank of America, its clients were net buyers in 2023 and largely directed the whopping $66 billion to US shares. On the flip side, institutional and private clients were net sellers. This data demonstrates a shift in the landscape of investment in US equities.

Investors Pull Back From 2024 Rate Cuts Prediction: Market Strategy Shifts (11-minute read)

Investors are paring back expectations for interest rate cuts in 2024 due to signs of a stronger U.S. economy. Based on encouraging data and central bank warnings, there's now a 75% chance of the first rate cut happening in March. Traders are now anticipating five or six quarter-point cuts by the Federal Reserve this year, down from previous bets of six or seven. Meanwhile, markets are foreseeing less aggressive rate cuts from the European Central Bank and the Bank of England.

Resilient Economy Powers 24% Stock Market Rise: Major Tech Triumph (8-minute read)

The S&P 500 ended 2023 with a 24% gain while the Dow Jones Industrial Average rose more than 13% and Nasdaq soared 43%, driven by big tech companies like Nvidia, Amazon, and Microsoft. Thanks to easing inflation, a resilient economy, and the possibility of lower interest rates, even smaller company stocks gained, with Russell 2000 finishing the year with a 15.1% gain. A forecasted cut in interest rates by the Federal Reserve in 2024 could fuel market momentum further.

Sweeping Layoffs Expected in 2024: Potential Recession or AI Uprising? (15-minute read)

Nearly four out of ten firms are likely to lay off employees in 2024, with half attributing their decision to an anticipated recession, and a significant portion planning to replace workers with artificial intelligence, revealed a survey by Resume Builder. The sectors most likely to be hit are construction and software. Google is also looking to lay off 30,000 employees in its ad division, replacing them with AI technology.

10 Potential Game-Changing IPOs to Watch in 2024 (4-minute read)

The year 2024 could potentially quench the IPO drought with several notable companies like Reddit and Shein considering going public. Amidst the Federal Reserve's interest rate hiatus, companies like Panera Bread, UL Solutions, Skims, Stripe, Discord, Chime, Fanatics, and Klarna are also said to be eyeing a public listing, sparking widespread anticipation among market watchers.

Apps & Gadgets

CES 2024 Sneak Peek: 5 Bizarre Tech Trends Evidently On The Rise! (8-minute read)

Ahead of CES 2024, an array of AI-powered products, bizarre brain-training tech, and peculiar technology for the elderly are emerging. A growing trend is injecting AI into everything, notably an AI-powered smart lamp. Brain-reading tech, like Sens.ai, and Genipen, a cognitive-focused pen, are also gaining popularity. Tech designed for the aging, including a holographic communication platform aimed at tackling social isolation, will be showcased. A surge in augmented-reality glasses and foldable TVs will also mark the event.

Google Settles Incognito Tracking Lawsuit: What Tech Industry Should Know (3-minute read)

Google is set to settle a 2020 class-action lawsuit regarding continuous data tracking in Chrome's Incognito mode. The plaintiffs accused Google of breaching wiretap laws and amalgamating users' private browsing activity with existing user profiles. An agreed settlement will end the litigation and is to be court-approved by February's end.