Computerspeak by Alexandru Voica

Computerspeak by Alexandru Voica

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Computerspeak by Alexandru Voica
Computerspeak by Alexandru Voica
Investors start asking hard questions about AI; Alexa's new brain is stuck in the lab; Arm may be the unexpected winner of the AI boom; meet the AI "super users"
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Investors start asking hard questions about AI; Alexa's new brain is stuck in the lab; Arm may be the unexpected winner of the AI boom; meet the AI "super users"

Middle East wants to become the next global AI hub; what teens think of AI; AI automation comes for salespeople and recruiters; Meta takes on Perplexity; Visa finds hundreds of use cases for AI;

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Alexandru Voica
Nov 01, 2024
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Computerspeak by Alexandru Voica
Computerspeak by Alexandru Voica
Investors start asking hard questions about AI; Alexa's new brain is stuck in the lab; Arm may be the unexpected winner of the AI boom; meet the AI "super users"
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It was earnings week for the Magnificent 7 and, despite record-breaking profits, investors had just one question on their minds: what is $200 billion of investment going to deliver in revenue when the next generation of AI arrives?

When OpenAI launched ChatGPT, everyone wanted to see what the hundreds of millions of dollars that went into training GPT-3 and GPT-4 could achieve. For OpenAI, the payoff has been substantial: today, the company’s revenue has peaked at $5 billion, proving that large-scale investment in AI infrastructure can drive solid returns, especially with a well-strategized product suite and a growing user base.

Now, the stakes are higher than ever. Amazon, Google, Meta and Microsoft have all indicated this week that they ramping up spending beyond the hundreds of billions they poured into AI this year, hinting at an industry-wide push towards the next era of foundation models. But this time, the anticipated price tag is nearly a trillion dollars, dwarfing previous expenditures and raising a critical question: where will the revenue for these next-generation models come from?

The scale of investment we’re witnessing now isn’t about incremental improvements; it’s about transformative leaps. These foundation models could shape entire industries, bringing us closer to AI that can interact, reason, and solve problems almost as intuitively as humans do. But scaling these capabilities will require infrastructure that’s orders of magnitude larger and more sophisticated than what we have today. Training next generation models demands not only vast computational resources but also access to high-quality, proprietary datasets—an expensive, time-intensive endeavor that only a handful of companies have the resources to undertake.

So the logic goes that if Big Tech companies are willing to collectively front a trillion dollars in capex, it’s because they foresee a payoff that matches or beats the 10x investment-to-revenue ratio achieved by OpenAI in 2023-2024; in short, that we’ll move from hundreds of millions in, billions out to trillions in, tens of trillions out.

One potential revenue stream is enterprise licensing. Just as OpenAI charges businesses to integrate GPT-4 into their products, these companies could sell exclusive access to AI tools that drastically streamline operations. However, given the upfront costs, this traditional licensing model may not deliver sufficient returns to justify a trillion in expenses.

The future may lie in scaling down to scale up. Many companies might opt for a decentralized approach, democratizing access to their models while allowing developers to customize and extend the core functionalities. This could unleash a wave of applications—from industry-specific AI to personalized assistants—that would rely on API access. For tech companies, this could mean sustained subscription revenue, an approach that has proven effective for GPT-4, as well as royalties and licensing fees from a proliferation of microservices.

While there’s no definitive playbook for recouping such a monumental investment (the US spends about $800 billion a year for defense, for reference), the willingness to gamble on AI suggests that Big Tech sees this as a once-in-a-century opportunity to redefine their industries—and finally make technology the industry to rule them all. However, the bet isn’t without risks. It’s a financial and logistical arms race, and any misstep could result in colossal losses rather than the anticipated leap forward.

But there’s another question that investors (and especially VCs) should also probably ask themselves: what will happen to the dozens of LLM startups that received hundreds of millions in funding and burnt through most of that this year to build almost-as-good models to today’s Llama, GPT-4 or Gemini while achieving only millions of dollars in revenue? Will they also get a trillion dollars and a second shot to compete with the Big Tech AI labs? And how will they monetize their research this time around?

And now, here are this week’s news:

❤️Computer loves

Our top news picks for the week - your essential reading from the world of AI

  • FT: Wall Street frets over Big Tech’s $200bn AI spending splurge

  • Wired: This Is a Glimpse of the Future of AI Robots

  • Bloomberg: Alexa’s New AI Brain Is Stuck in the Lab

  • FT: How Arm could be the unexpected winner of the AI investment boom

  • MIT Technology Review: Cultivating the next generation of AI innovators in a global tech hub

  • Reuters: Saudi’s Davos is no longer such a desert

  • Wired: AI Will Understand Humans Better Than Humans Do

  • Time: What Teenagers Really Think About AI

  • The Information: Seven Acquisitions That Could Happen in 2025

  • Washington Post: Meet the ‘super users’ who tap AI to get ahead at work

  • The Information: ‘Fear and Skepticism’: AI Automation Arrives for Salespeople

  • MIT Technology Review: Palmer Luckey on the Pentagon’s future of mixed reality

  • The Information: Meta Develops AI Search Engine to Lessen Reliance on Google, Microsoft

  • TechCrunch: We finally have an ‘official’ definition for open source AI

  • The Verge: Google plans to announce its next Gemini model soon

  • Forbes: He Sold His AI Company To AMD For $665 Million. Now He Wants To Supercharge AI Research In Europe

⚙️Computer does

AI in the wild: how artificial intelligence is used across industry, from the internet, social media, and retail to transportation, healthcare, banking, and more

  • WSJ: Visa Has Deployed Hundreds of AI Use Cases. It’s Not Stopping.

  • TechCrunch: Bifrost helps industrials speed up model training with its 3D data-generation platform

  • BBC: University AI experts help teachers in Vietnam

  • The Verge: Gmail will now help you write an email on the web with AI

  • AP: AI is being used to send some households impacted by Helene and Milton $1,000 cash relief payments

  • MIT Technology Review: This AI system makes human tutors better at teaching children math

  • The Verge: Google’s AI search summaries are rolling out to over 100 more countries

🧑‍🎓Computer learns

Interesting trends and developments from various AI fields, companies and people

  • Forbes: Saudi Wants To Use Its Oil Billions To Become An AI Power Player

  • FT: OpenAI brings online search to ChatGPT

  • Forbes: This AI Model Could Keep Thousands Of Cancer Patients From Getting Unnecessary Treatments

  • TechCrunch: OpenAI CEO Sam Altman says lack of compute capacity is delaying the company’s products

  • TechCrunch: Meta is making a robot hand that can ‘feel’ touch

  • TechCrunch: D-ID launches new high-quality avatars capable of real-time conversations

  • Wired: Meta’s Next Llama AI Models Are Training on a GPU Cluster ‘Bigger Than Anything’ Else

  • VentureBeat: Meta makes its MobileLLM open for researchers, posting full weights

  • MIT Technology Review: This AI-generated version of Minecraft may represent the future of real-time video generation

  • Business Insider: Microsoft's new AI CEO rolled out his first big product update. Some staff and users say the previous version was better.

  • Business Insider: Meet Glean, the enterprise AI search company that's so powerful Sam Altman deemed it a threat to OpenAI

  • SAG-AFTRA: New SAG-AFTRA and Ethovox Agreement Empowers Actors and Secures Essential A.I. Guardrails

  • The Verge: Waymo explores using Google’s Gemini to train its robotaxis

  • VentureBeat: LinkedIn upgrades its Recruiter with an AI Hiring Assistant

  • VentureBeat: Google’s AI system could change the way we write: InkSight turns handwritten notes digital

  • Fortune: Elon Musk says there’s a 10% to 20% that AI ‘goes bad,’ even while he raises billions for his own startup xAI

  • Business Insider: Former Google CEO Eric Schmidt says future wars will be fought by AI drones and calls tanks 'useless'

  • Washington Post: Many older Americans don’t trust AI-generated health information

  • Business Insider: Evertune is building marketing analytics tools for LLMs. Check out the pitch deck it used to launch from stealth with $4 million in seed funding from Eniac.

  • TechCrunch: Google says its next-gen AI agents won’t launch until 2025 at the earliest

  • TechCrunch: ElevenLabs has hired the team behind Omnivore, a reader app

  • TechCrunch: Amazon brings its Rufus AI shopping assistant to more international markets

  • TechCrunch: GitHub Spark lets you build web apps in plain English

  • The Verge: More than a quarter of new code at Google is generated by AI

  • The Information: Microsoft Strikes Deals With OpenAI’s Top Rivals For AI Coding Assistant

  • VentureBeat: AWS launches in-line Q Developer AI coding assistant to take on Microsoft's Github Copilot

  • VentureBeat: GitHub unveils new AI capabilities, bringing Copilot to Apple’s Xcode and beyond 

  • VentureBeat: Gartner predicts AI agents will transform work, but disillusionment is growing

  • Reuters: OpenAI builds first chip with Broadcom and TSMC, scales back foundry ambition

  • Fortune: Researchers disagree about the speed of gen AI adoption. But one thing’s clear: The tech is increasingly everywhere

  • Business Insider: Wharton professor Ethan Mollick says companies must make organizational changes if they want to benefit from AI

  • Business Insider: Dropbox CEO Drew Houston says these types of people will be the ones to benefit from AI

  • Bloomberg: Arm CEO Sees AI Transforming the World Much Faster Than the Internet

  • Reuters: Startup Untether launches AI chips

  • Reuters: Universal Music Group partners with KLAY to develop ethical AI technology

  • Bloomberg: OpenAI CFO Says 75% of Its Revenue Comes From Paying Consumers

  • The Verge: Google is reportedly developing a ‘computer-using agent’ AI system

  • TechCrunch: Meta releases an ‘open’ version of Google’s podcast generator

  • TechCrunch: A mysterious new image generation model has appeared

  • Wired: AI Slop Is Flooding Medium

  • Semafor: Artificial intelligence will ‘revolutionize’ pharma industry, Nvidia says

  • TechCrunch: Generative AI could cause 10 billion iPhones’ worth of e-waste per year by 2030

  • The Information: Notion CEO Sees Flaws in Computer-Using Agents

  • VentureBeat: ServiceNow advocates for ‘invisible’ AI agents to ease worker adoption

  • VentureBeat: LinkedIn founder Reid Hoffman unveils ‘super agency’ vision at TED AI conference, takes subtle shot at Elon Musk

  • Business Insider: Memorable AI founders Camilo Fosco and Sebastian Acevedo are the masterminds behind Reddit's new user engagement AI

  • The Guardian: Using avatars in psychosis therapy can help those who hear voices, study finds

  • The Guardian: Michael Parkinson is back, with an AI voice that can fool even his own family

  • Reuters: Meta Platforms to use Reuters news content in AI chatbot

  • The Economist: Japan is remarkably open to AI, but slow to make use of it

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