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OpenAI Eyes Stratospheric $90 Billion Valuation, Spurring AI Market Growth

Today: Targets $90B Valuation | Alexa's New Subscription Model | iPhone 15 Heating Issues

Happy Wednesday, tech enthusiasts!

It's September 27, and we've got a fresh batch of industry updates that you won't want to miss. From OpenAI's sky-high valuation to Amazon's legal woes, there's plenty to catch up on. Let's dive in!

  • OpenAI Targets $90B Valuation

  • FTC Charges Amazon

  • Alexa's New Subscription Model

  • iPhone 15 Heating Issues

  • AI Boosts Datacenter Costs 30%

  • and more

READ TIME: 5.0 MINUTES

Tech Companies

The Federal Trade Commission (FTC) and multiple state attorneys general have launched an extensive antitrust lawsuit against Amazon, accusing the company of unlawfully maintaining monopolies and punishing sellers. The lawsuit also targets Amazon's alleged practices of biasing search results in its favor and adverse control over sellers' eligibility for Prime shipping benefits. The FTC seeks a permanent injunction to prohibit Amazon's supposed uncompetitive conduct. Amazon refutes the charges as factually and legally incorrect and expects to contest them in court.

Why does this matter?

This landmark lawsuit against Amazon could reshape rules for online marketplaces, influencing tech entrepreneurs and investors. If successful, it may serve to level the playing field for smaller competitors, potentially opening doors for innovation and competition within the e-commerce sector.

K.L - Business Edge

Amazon plans to introduce a subscription fee for enhanced Alexa services as it invests up to $4 billion to develop advanced AI features while keeping the current Alexa free.

Why does this matter?

Amazon's plan to charge users for advanced features of its AI-enabled voice assistant, Alexa, signals a new potential revenue channel in the voice-Assistant tech space. This move has implications for tech entrepreneurs, investors, and workers, as companies may strategize for comparative or competitive features in their AI services while considering ways to monetize the technology. Consequently, this could drive innovation and competition in the AI voice assistant market.

K.L - Business Edge

AI Corner

Artificial intelligence firm OpenAI is in advanced discussions about a potential share sale that could value the company between $80 to $90 billion, significantly up from its January valuation. The proposed deal will reportedly let employees sell their shares rather than issuing new ones. OpenAI, primarily backed by Microsoft and known for creating ChatGPT, is expected to generate upwards of $1 billion in revenue over the next year by selling access to a premium version of ChatGPT.

Why does this matter?

OpenAI's potential valuation at $80-$90 billion underlines AI's escalating importance and commercial potential. For tech entrepreneurs, investors, and workers, this suggests immense opportunities in AI-driven technologies, with a focus on advancing AI applications, like chatbots, that can draw significant, user-centric revenue streams.

K.L - Business Edge

Markets & Money

According to Goldman Sachs, credit card company losses are soaring at the fastest rate in almost 30 years, reaching 3.63%, as American consumers accrue over $1 trillion in credit card debt. Analysts predict these losses may continue to rise until late 2024 or early 2025, with the greatest risk anticipated for Capital One Financial and Discover Financial Services.

Why does this matter?

The surge in credit card losses, at a rate unseen since the Great Recession, is alarming for tech-focused investors and stakeholders in fintech and financial services domains. If these losses continue to rise, it could induce policy changes, affect consumer spending, and create unpredictable market conditions, potentially opening opportunities for innovative debt management or financial solutions.

K.L - Business Edge

Private debt funding is expected to surpass $200 billion in 2023, marking the fourth consecutive year to achieve this feat, says a report by PitchBook. These funds alter the global financial landscape by occupying the lending space once dominated by banks. After exceeding venture capital, private debt now ranks as the second-largest fundraiser in private markets, trailing only private equity.

Insights & Analysis

Growing adoption of artificial intelligence (AI) by cloud providers has resulted in a severe strain on data center capacity, escalating hosting prices by 20-30%, as per JLL's North American Datacenter Report. The demand for AI services also has operators expanding power to the edge. Despite several colocation providers launching facilities to accommodate workload, JLL suggests a data center supply crunch will likely continue through 2024.

What can we learn from this?

The widespread integration of AI within cloud services is leading to a considerable surge in data center leasing and subsequent hikes in colocation costs, given the increased server power and space demands. It might pressure data center operators and cloud service providers to upgrade their infrastructure and expand their capacity. This might prove beneficial for secondary US cities that could accommodate these growing datacenter needs.

K.L - Business Edge

Apps & Gadgets

Early iPhone 15 series adopters are facing heat issues during charging and extended use, with some users experiencing discomfort. Apple has yet to comment.

Why does this matter?

The reported overheating of the iPhone 15 series could lead to performance issues, affecting user experience. This could also pave the way for competitors to seize the opportunity and tap into the dissatisfied customer segment.

YouTube will discontinue its ad-free Premium Lite subscription plan after October 25, 2023. The plan, piloted in select European countries, allowed users to view content without ads at 6.99 monthly. The move will leave subscribers with the option of returning to ad-based viewing or upgrading to the more expensive YouTube Premium. The platform will offer Premium Lite users a one-month free trial of YouTube Premium.

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