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📉 Generative AI Deals Dips 29% in 3rd Quarter Amid Waning Interest

Today: iPhone 15 Reviewed | ChatGPT Revenue Surge | X's Verified Replies

Good morning tech enthusiasts!

Today is Tuesday, October 10, 2023, and it's a bustling day in the world of technology. Here are some of today’s top headlines:

  • TSMC's AI Lifeline - Q3 sales slump offset by increased AI demand.

  • iPhone 15's Big Leap - Discover the groundbreaking features that make it a must-have.

  • SaaS Q3 Multiples - A reflection of 2014-2018; premium providers come out on top.

  • Generative AI's Decline - Investment drops 29% in Q3 amid dwindling interest.

  • ChatGPT's App Boom - A record $4.58M in revenue despite a slowdown; what's the future?

  • Meta's Accidental Reveal - A sneak peek at the trending topics feature for Threads.

  • Nintendo Switch 2 Details - Release info, pricing, and dual variants get leaked!

  • and more…

Dive deeper into these stories to stay updated with the latest trends and happenings. Enjoy your read!

Tech Companies

Taiwan Semiconductor Manufacturing Co.'s (TSMC) Q3 sales fell by 11%, but outperformed projections due to elevated demand from AI sectors. The increase can be attributed to the expanding demand for AI chips, specifically from primary clients such as Nvidia. The growing AI need might alleviate a potentially prolonged slump in the tech sector, while the high demand for TSMC's advanced packaging service might also contribute to sales growth. TSMC's performance is often seen as an indicator of the tech sector's overall health.

💡 Why does this matter?

Despite concerns about a sector-wide slump, Taiwan Semiconductor Manufacturing Co.'s Q3 revenue fell less than expected, thanks to AI demand. The news suggests steady growth and robustness in the semiconductor sector, providing promising prospects for tech workers, investors, and AI-driven enterprises.

K.L - Business Edge

X has launched a feature enabling solely verified accounts to reply to a post. The control, aiming to deter spam bots, has been endorsed by Elon Musk, and is accessible to both paid and non-paid users. Despite this, concerns remain over the potential circulation of harmful information by verified users.

Meta's microblogging platform, Threads, could soon feature a Trending Topics section, leaked by an internal screenshot. The proposed feature, not yet confirmed by Meta, will help users discover the most discussed subjects on the platform. Besides enhancing user interaction, Threads is also facilitating multi-account switches and has a web version available.

John Riccitiello, CEO of Unity, has decided to step down from his position following a controversy over pricing. The news was first reported by Jason Schrier of Bloomberg in a Twitter post.

AI Corner

The European Union is reportedly contemplating further regulations targeting large artificial intelligence (AI) systems, such as Meta’s Llama 2 and OpenAI’s ChatGPT-4. The proposed regulations aim to control big models while not overburdening startups with excess regulations. These additional restrictions, still in the early negotiation stages, are part of the upcoming AI Act and mirror the EU’s Digital Services Act. The AI Act could become one of the first mandatory rules for AI in a Western government.

💡 Why does this matter?

This matters because the European Union is considering tighter regulations on large AI systems, potentially affecting major companies like Meta. The move is seen as a way of maintaining balance between nurturing new startups and restraining large models. As the EU's AI Act would be among the first mandatory rules for AI in the West, tech stakeholders worldwide would monitor the outcome closely. The regulations could also cause a shift in the creation of AI models, mirroring China's surge in new AI models post-implementation of similar laws.

K.L - Business Edge

The tendency of large language models like ChatGPT to fabricate answers poses a significant challenge. However, OpenAI has detailed eight steps to reduce such ""hallucinations"", including avoiding ambiguity and vagueness, not merging unrelated concepts, and avoiding using scientifically inaccurate prompts. It is also advised to avoid contradicting known facts, misusing scientific terms, blending different realities, and assigning uncharacteristic properties. Efforts to adhere to these guidelines could enhance the reliability of AI responses.

ChatGPT's mobile app achieved a revenue high of $4.58 million in September, even as its growth began to slow. The AI app's downloads also hit a record 15.6 million, led by Google Play.

💡 Why does this matter?

While ChatGPT's mobile app sees increasing downloads and record-breaking revenue, signs of slowing growth could indicate saturation of paying subscribers.

K.L - Business Edge

Generative AI venture funding declined 29% to 101 rounds in Q3, as investor enthusiasm dipped due to challenges in the reliability and readiness of applications. Though the sector saw a fall, the deal value ascended to $6.1 billion, bolstered by Amazon's $4 billion deal with Anthropic. Big Tech involvement in AI remains high, highlighting the intensifying competition to utilize the technology's potential. However, several investors continue to advise a long-term approach to generative AI investment.

OpenAI, the force behind ChatGPT and DALL-E 3, is contemplating manufacturing its own AI accelerator chips amidst a shortage of AI-specialized GPUs and high operation costs. This move could see OpenAI following big tech like Google and Amazon into custom chip design. Although no final decision has been made, OpenAI is also reportedly testing a custom AI chip developed by principal backer Microsoft.

Google Cloud has launched an AI-powered search tool to enable healthcare workers to extract clinical information from diverse medical records swiftly, saving time and enhancing efficiency.

OpenAI unveils the Beta version of its Python SDK, offering simplified access and interaction with the OpenAI API for Python developers, ahead of the OpenAI DevDay conference.

Markets & Money

California Governor Gavin Newsom has signed Senate Bill 54, which requires venture capital firms to annually report on the diversity of founders they back, effective from March 2025. The bill, a first in the US thanks to its focus on ensuring diverse representation in VC investments, mandates data collection on founders' racial profiles, disability status, and sexual orientation. It aims to promote transparency in VC firms' decision-making processes and facilitate fairer distribution of resources to startups led by historically underrepresented communities.

Activist investor Nelson Peltz, who holds about 30 million Disney shares worth over $2.5 billion, is expected to push for multiple board seats. This comes amidst a 25% drop in Disney's stock since February. Peltz, known for advocating profit-focused strategies, could potentially call for a split of the company, possibly resulting in the sale of ABC and ESPN. The restructuring would leave Disney with its film studios, parks, and streaming services.

Q3 SaaS multiples are stable, aligning with 2014-2018 figures, with median and average multiples at 5.65x and 6.44x revenue, respectively. The difference between average and median values has shrunk, indicating slightly higher valuations for premium SaaS firms. SaaS firms growing above the 21% median show stronger multiples. Meanwhile, the number of companies trading at multiples of 10x revenue or greater has decreased considerably compared to Q4 2020.

Insights & Analysis

Airbnb CEO, Brian Chesky, shared valuable insights about the company's journey on a podcast, discussing past mistakes, the importance of innovation, and Airbnb's resilience amidst the COVID-19 pandemic. An informative guide for tech entrepreneurs and investors.

💡 What can we learn from this?

Brian Chesky provides insight into the missteps made by Airbnb, serving as valuable lessons for tech startups. Recognizing and learning from these mistakes can potentially steer companies away from similar pitfalls, thereby supporting successful growth and sustainability.

K.L - Business Edge

Apps & Gadgets

Apple's new iPhone 15, starting at $799, enriches the regular series with the inclusion of high-end features such as a revamped camera, a switch to USB-C, and a newly contoured design, making it a substantial update in years. Despite no sweeping design changes, the smartphone offers a Super Retina XDR display, a 48-megapixel dual-camera setup with portrait mode in regular photo mode, and improved battery life. Its transition to USB-C allows charging of other Apple devices but limits data transfers to USB 2.0 speeds. However, it continues to dispense a 60Hz refresh rate, falling behind other models with a 120Hz rate.

Google's Pixel Watch 2 has been announced, seeking to compete with Apple's Watch Series 9. Priced at $349.99, Google's watch includes a Qualcomm 5100 processor and up to 24 hours battery life. Despite being thicker, it features health sensors similar to Apple's. Apple's $399 model has an S9 SiP processor and offers up to 18 hours of battery life. The two diversify with Google embracing a circular face while Apple maintains a square one. Regardless of minor differences, choice will primarily depend on the user's smartphone ecosystem.

Meta's Quest 3 VR headset offers significant advancements including mixed reality features, enhanced image, and Qualcomm's Snapdragon XR2 Gen 2 chip for $500, though the Quest 2 remains the recommended entry point for VR newcomers.

The anticipated Nintendo Switch 2 is set to be released in two versions, as pricing and further details have reportedly been leaked. Navigate the link for the full information.

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