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- Lumian Gen AI Newsletter Issue #45
Lumian Gen AI Newsletter Issue #45
Claude vs. ChatGPT, Record Labels vs. AI Music, OpenAI Acquisitions
Robin Lobo
June 26, 2024
Welcome to the 45th edition of the Lumian Weekly Gen AI Newsletter!
A rather basic question this week — in the AI gold rush, where exactly is the gold? While Nvidia’s GPUs are the shovels everyone’s grabbing, what’s really fueling this bonanza?
Back in September 2023, Sequoia asked a $200 billion question about AI, noting the chasm between spending and actual revenue. Today, that gap has ballooned to $600 billion. Despite pouring billions into AI infrastructure, the revenue hasn’t followed suit. It’s like we’re laying railroad tracks but haven’t figured out what trains we’re running.
OpenAI stands out with its $3.4 billion revenue, but the broader AI landscape isn’t enjoying the same success. Consumers aren’t yet throwing money at AI services the way they do with Netflix or Spotify. Meanwhile, AI infrastructure, crucial as it is, is commoditizing at warp speed. Unlike railroads, which can create monopolies, AI computing is turning into a low-margin game. The market is teeming with new entrants, driving prices down.
Further, Nvidia’s forthcoming B100 chip could be a sign of where the market is headed. It promises to boost performance and renew demand, but it also accelerates the obsolescence of current technology. Investors betting on the longevity of today’s hardware might end up holding onto yesterday’s news.
I’d only partially jokingly argue that generative AI investing today is a process by which venture capital firms transfer large amounts of money to Nvidia via intermediaries known as “startups”. Nvidia might be celebrating now, but the rest of the ecosystem is in for a turbulent ride. Perhaps, so is Nvidia? It just lost $500B in market cap in the biggest short term loss in company value in all of recorded history.
The real winners will be those delivering tangible value to end-users. Remember the dotcom bubble? The early 2000s were filled with speculative investments and sky-high valuations, but only those who focused on delivering real, practical value emerged victorious. Companies like Amazon and eBay, which provided tangible benefits to users and built sustainable business models, are now tech giants.
The AI industry is set to create massive economic value, but navigating the hype requires a pragmatic approach. The journey to AI’s promised land is a rollercoaster, filled with highs and lows. Speculative bubbles are inevitable, but those focusing on real-world benefits will find the gold. After all, the real treasure lies in creating something that people actually want and will pay for.
Happy reading! 📚🤖🎵
In this week’s issue:
News Flash: Claude’s Update, Labels vs. AI Music, OpenAI Acquisitions
Safe Superintelligence: Ilya Sutskever’s New Venture
AI Frontier: AI Social Media tools you can use today
Fundraising: The biggest deals in AI
Nerd Out: Technical and Business Content for Everyone
⏱️ News Flash
The 2-Minute Scoop to Keep You in the Loop
What's the Buzz?
Anthropic has released Claude 3.5 Sonnet, a new LLM that outperforms its predecessors and competitors, offering enhanced speed and intelligence at a fraction of the cost.
Breaking It Down
Claude 3.5 Sonnet, the latest model from Anthropic, is setting new benchmarks with its advanced reasoning, knowledge, and coding capabilities. It's twice as fast as Claude 3 Opus and significantly cheaper than other leading models, making it ideal for complex tasks and workflows.
Why It Matters
OpenAI's dominance is being challenged as Claude 3.5 Sonnet offers superior performance and affordability, promising to revolutionize AI productivity for businesses and individuals alike.
What's the Buzz?
Major record labels are suing AI music companies Suno and Udio for alleged mass copyright infringement.
Breaking It Down
The big three music labels, Universal, Sony, and Warner, have teamed up to sue Suno and Udio, claiming these AI music platforms have illegally copied a massive amount of their copyrighted recordings to train their AI models. The labels want up to $150K per work in damages and are pushing for an immediate stop to the use of their music.
Why It Matters
This legal battle could define the boundaries of AI music generation, setting precedents on whether AI companies need licenses for the music they train on or if they can use existing works under fair use.
What's the Buzz?
OpenAI has acquired collaboration platform Multi and database tech startup Rockset, reinforcing its strategy to enhance enterprise solutions.
Breaking It Down
OpenAI's acquisition of Multi, a real-time collaboration tool, brings in its five-member team to strengthen remote work capabilities. Concurrently, Rockset's advanced data processing technology will boost OpenAI’s infrastructure for data ingestion, analysis, and retrieval.
Why It Matters
These strategic acquisitions underscore OpenAI’s commitment to expanding its technological capabilities, aiming to solidify its position as a leader in AI innovation and enhance its enterprise-grade AI solutions. The question is how many startups can get such exits.
🚀 Safe Superintelligence
Ilya Sutskever’s New Venture
What's the Buzz?
OpenAI co-founder Ilya Sutskever launched a new company, Safe Superintelligence Inc.
This research-focused venture aims to develop ultra-powerful AI that won't harm humanity
The Mission: Safe Superintelligence
AGI is no longer the main focus; it's all about creating SSI - safe superintelligence
SSI will focus solely on hardcore research, with no immediate commercial products
Key Players and Backers
Ilya Sutskever: The AI legend and OpenAI co-founder
Daniel Gross: Tech investor and former Apple AI lead
Daniel Levy: OpenAI veteran with expertise in training large AI models
Financial Backers: Still undisclosed, but investor interest is high
SSI's Approach and Vision
Superintelligence Goal: Creating a general-purpose AI that's far more powerful than current models
Safety First: Emphasizing built-in safety measures akin to nuclear safety protocols
No Distractions: Unlike competitors, SSI is insulated from commercial pressures and product cycles
Lean Team: A small, focused group dedicated to the single objective of creating safe superintelligence
🚀 AI in Practice
Cutting-Edge AI Social Media Tools You Can Use Today
🤑 Fundraising
The (AI) Intelligent Investor
🤖 Nerd Out
Technical and Business Readings
😜 AI Burnout
Even Neural Networks Need a Break Sometimes!
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