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xAI Secures $6B Series B Funding, Advances in Advanced AI Technology

Only a 5 minute read to stay updated on Tech.

TECH BRIEF

The cloud software market continues to face difficulties with companies showing no significant rise in their guidance over last quarter. Some sectors are hopeful for business acceleration in H2. Workday's earnings call reflects the present unpredictability, showing increased deal scrutiny and lower headcount commitment on renewals. SaaS businesses' valuations, generally based on projected revenue for the forthcoming 12 months, present long-term assumptions. With most software companies struggling with profitability, the industry relies on the SaaS model's growth leading to future profitability.

Insight: Increased deal scrutiny and lower headcount commitments indicate a conservative market stance in the short term. SaaS businesses need to innovate, improve go-to-market strategies, and enhance partner ecosystems to navigate ongoing financial headwinds and sustain growth momentum.

Emergence Capital's report "Beyond Benchmarks 2024" reveals the growth rates of top-quartile B2B startups. The report suggests that at $10m ARR, only the top-quartile companies achieving 100% growth can attract VC funding. Interestingly, from $1m to $5 m ARR, the top-quartile startups grew 100%, while the median stagnated at 53%. As these startups cross $50m ARR, 40% of their new bookings are upsells, reflecting an increase in customer retention strategies.

Insight: The top quartile of B2B startups exhibit robust growth patterns, with 58% growth at $10M ARR, yet most…Unlock this insight by becoming a PRO member. 14-day free trial, then only $3/mo.

Former TikTok CEO Kevin Mayer, who is now co-CEO of Candle Media, describes the current hype around artificial intelligence (AI) as " vastly overhyped" and predicts a stabilization in AI valuations. Despite massive investments and soaring valuations of AI-focused companies, Mayer warns that the excitement is unsustainable and that a more cautious approach is needed for long-term growth. He expects that the AI sector will go through an adjustment period leading to more realistic valuations.

Insight: Kevin Mayer, ex-TikTok CEO, cautions against excessive AI hype, predicting imminent stabilization in AI valuations. Investors should carefully…Unlock this insight by becoming a PRO member. 14-day free trial, then only $3/mo.

The expected surge in tech Initial Public Offerings (IPO) for 2024 seems to be slowing down, according to industry insiders. Factors such as the upcoming presidential election and higher interest rates might restrict the IPO market until 2025. Despite this, several companies are still slated to go public this year, though exact timelines remain uncertain. Notable firms unlikely to IPO in 2024 include fintech Plaid and design platform Figma.

Insight: Macro conditions like high interest rates and the upcoming presidential election are delaying…Unlock this insight by becoming a PRO member. 14-day free trial, then only $3/mo.

Apple has deserted its in-house chatbot development, choosing instead to collaborate with OpenAI for incorporating chatbot capabilities into iOS 18. A 'beta' or 'preview' unveiling of these AI features is expected due to unsatisfactory development progress. Furthermore, Apple is reportedly considering Google as an alternative plan for AI integration, suggesting its hesitance to rely entirely on OpenAI. However, Apple still plans to develop its own chatbot eventually.

Insight: Apple's strategic pivot to partner with OpenAI for iOS 18 chatbot functionalities signals…Unlock this insight by becoming a PRO member. 14-day free trial, then only $3/mo.

In its Series B funding round, AI firm xAI has raised $6 billion from top investors including Valor Equity Partners, Andreessen Horowitz, and Fidelity Management & Research. The funds will aid the launch of xAI's first market products and hasten the R&D of future technologies. Notably, since its inception in 2023, xAI has showcased rapid strides in its model capabilities with the release of its Grok-1 and Grok-1.5 models.

Insight: xAI's recent $6 billion Series B funding positions it strongly for rapid…Unlock this insight by becoming a PRO member. 14-day free trial, then only $3/mo.

Matt Garman is set to take over from departing Adam Selipsky as head of Amazon Web Services (AWS), amidst a challenging time for the company. Despite heavy investment, Amazon hasn't established a lead in generative artificial intelligence, losing ground to Microsoft and Google. Furthermore, AWS growth slowed to 13% in 2023, from 37% in 2021. AWS remains the cloud infrastructure market leader, but with slipping market share, Microsoft is closing the gap.

Google's Gemini, an AI chatbot, has been integrated into Gmail in addition to other Google Workspace tools. Gemini enhances email drafting and summarization capabilities within these platforms. Google plans to bring this feature to the Gmail Android app, an inclusion discovered in a recent code teardown. Currently, Gemini within the Gmail app can reference context from certain previous emails. Future app developments may bring additional changes.

QUICK

OpenAI's GPT-4 algorithm outperformed professional financial analysts in predicting corporate earnings, according to a University of Chicago study. The AI model's impressive predictive capabilities signal a potential shift in the future of financial analysis.

Google is rushing to correct odd responses from its AI Overview feature by disabling specific AI Overviews, amid criticism of the product’s low-quality outputs. Achieving full AI accuracy remains a daunting task.

Google is investing $350 million in Flipkart, a leading player in India's booming $133 billion e-commerce market. This forms part of a $1 billion funding round led by Walmart.

Despite Biden signing a bill threatening TikTok's future in the U.S., a Fohr survey shows 62% of creators doubt a ban by 2025, while 60% report unaffected engagement.

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