Uncover Tech Insights - November 20-24
Weekly market stock moves
A really interesting interview from a Former Amazon Senior Manager on Amazon’s Logistic business. Reaffirming my conviction that Amazon has so much more it can do in automation and the profits that will follow:
For the holiday season Amazon starts ramping up its head count in October and typically increases the headcount by 10-25% depending on projections. After that, in January, there are sometimes layoffs. In the last two years, the plan for monthly attrition in delivery units was 2%/month.
If you update the older delivery centers with the more modern ones where Amazon has a lot of robotics, you can expect to reduce headcount by about 25-30%. But if Amazon also automated the unloading and loading of cartons, you could reduce headcount by 80-90%, according to expert.
Amazon has one of the best tools in the industry for tracking and following the key KPIs at delivery centers. That is the benefit of them being a real tech company.
Very insightful interview from a former Global Lead at Amazon on AWS and current Anthropic employees:
Nvidia's biggest advantage is not hardware but software; it’s CUDA library.
The expert thinks Amazon's AWS is playing it very smart with AI and its Bedrock offering. He also sees a fair amount of enterprises that have moved their data to AWS. “Don’t discount Amazon in this arms race of generative AI”
The expert sees a constant cycle of having to update to newer GPUs because the newer versions will be so much better than the old ones for LLMs. Nvidia will do very well in this environment.
He sees Anthropic as one of the most interesting companies with a better concentration of talent than even OpenAI. “Quite literally, they have the best of the best”
Most impactful news of the week
A few hours after the APEC panel, Sam Altman received a text from Ilya Sutskever, a chief researcher and board member at OpenAI, which marked the beginning of a tumultuous period characterized by power struggles and shifting alliances within the AI startup. Altman's unexpected firing initiated a series of events including the president's resignation, the appointment of interim CEOs, a staff mutiny, backroom negotiations, threats of legal action, and counter-moves. Ultimately, a late-night agreement was reached to reinstate Altman as CEO and overhaul the company's board of directors, bringing an end to the dramatic sequence of events.
Over the weekend, Silicon Valley executives and investors rallied behind Sam Altman following his ouster from OpenAI. Notably, Brian Chesky, the co-founder and CEO of Airbnb, emerged as a key supporter, providing behind-the-scenes advice to Altman. Chesky played a crucial role in the negotiations for Altman's return and the restructuring of a new board of directors on Tuesday. The two have a longstanding relationship that dates back over a decade, with Altman having mentored Chesky during Airbnb's early days.
Microsoft has announced a $500 million investment to expand its digital infrastructure in Quebec, with a focus on accelerating artificial intelligence (AI) and computing capacity in Canada. Over the next two years, the investment will enhance Microsoft's cloud computing and AI infrastructure in the province, significantly increasing the size of its local cloud infrastructure across the country. Chris Barry, President of Microsoft Canada, stated that this initiative builds on previous investments in Quebec, providing increased capacity for both the private and public sectors. The investment aims to facilitate faster scaling of solutions to market, enhance global competitiveness, and prepare Quebec for the emerging AI economy. The expansion is expected to increase computing capacity by approximately 240% over the next three years, complementing existing infrastructure in the province.
Black Friday saw a record-breaking $9.8 billion in online sales in the U.S., fueled by deep discounts and the popularity of flexible payment options. According to Adobe Analytics, online sales on Black Friday increased by 7.5% compared to the previous year. The sales figures surpassed both Thanksgiving sales and growth rates, as well as Adobe's own predictions for the day. Salesforce, using different metrics, reported that Black Friday online sales exceeded expectations, totaling $16.4 billion in the U.S. and $70.9 billion globally, with a record 79% of all shopping traffic occurring on mobile handsets.
Alibaba Group Holding Ltd. is embarking on a revamp of its cloud business by restructuring its leadership in an effort to rejuvenate growth and capitalize on the artificial intelligence (AI) boom. The move comes after the cancellation of a planned spinoff of the $11 billion unit. Alibaba Cloud Intelligence has appointed three new executives to lead major business lines, with two reporting directly to CEO Eddie Wu. One significant change involves the leadership of the domestic cloud services arm, known as the public cloud, which caters to enterprise customers in China. This segment will be overseen by Liu Weiguang.
Nvidia Corp. released its latest quarterly report, surpassing average analysts' estimates but falling short of the high expectations of investors who have heavily invested in the artificial intelligence (AI) sector. While Nvidia's revenue for the current period is projected to be around $20 billion, exceeding the average Wall Street estimate of $17.9 billion, some investor projections had anticipated figures as high as $21 billion. The stock has experienced significant growth this year, rising by 242%, with investors betting on the continued expansion of the AI industry for Nvidia. However, the results indicate that certain expectations were not met, prompting a lukewarm response from investors.
ByteDance's TikTok is reportedly in discussions to invest in a unit of Indonesia's GoTo Group as part of efforts to re-establish its online shop in Indonesia, its largest e-commerce market. The potential investment involves GoTo's online retail unit, Tokopedia, and the deal could be finalized in the coming weeks. While a direct investment is one option, there is also consideration for a joint venture between the two companies. The move is seen as part of ByteDance's strategy to re-enter the e-commerce market in Indonesia and leverage TikTok's popularity in the region.
Graphcore Ltd., a British chip designer once considered a potential rival to Nvidia Corp., is laying off most of its staff and discontinuing sales in China due to recent U.S. export controls that restrict the sale of technology into China. The company confirmed the decision, stating that it would be significantly scaling back business operations in China. Graphcore, founded in 2016, specializes in designing semiconductors tailored for supporting artificial intelligence software. The startup raised $222 million in 2020 at a valuation of $2.8 billion, making it one of the UK's most promising startups.
Bard, Google's AI chatbot, is receiving an upgrade to its YouTube integration, allowing it to analyze individual videos and provide specific information, such as key points or recipe ingredients, without requiring the user to play the video. This enhancement could make Bard a more useful tool, but it also raises concerns for content creators regarding generative AI. The ability of AI to extract and present information from videos without viewing them directly might impact how creators' content is consumed and could prompt discussions about copyright and intellectual property issues.
Epic Games, the publisher of Fortnite, filed a lawsuit against Google in 2020, contending that the Android operating system's Google Play store constituted an unlawful monopoly, particularly in relation to in-app purchase fees. Epic Games seeks changes from Google to make it easier to use third-party app stores, sideloaded apps, and non-Google payment processors. Google argues that Epic Games' demands would jeopardize Android's ability to provide a secure user experience and compete with Apple's iOS. The lawsuit has taken a while to reach court, trailing behind a similar trial against Apple in 2021.
Andrew Ng, co-founder of Google Brain and former chief scientist at Baidu, is reportedly aiming to raise $50 million for the second fund of his venture firm, AI Fund. The first fund raised $175 million in 2018. The smaller target for the new fund may reflect the challenges of raising funds, especially in a climate where limited partners are cautious. Ng's AI Fund includes notable investors such as NEA, Sequoia Capital, Greylock Partners, and SoftBank. The fund's portfolio features companies like FourthBrain, offering AI and machine learning bootcamps for engineers, and SpeechLab, which utilizes AI for speech translation.
iRobot Corp., the vacuum cleaner manufacturer that Amazon.com Inc. has proposed to acquire in a billion-dollar deal, experienced a significant surge in its stock price, the most in nearly three years. The increase follows reports that European Union regulators are likely to grant unconditional approval for the merger between Amazon and iRobot. The EU had initially raised concerns about the deal, leading to an in-depth investigation to assess its potential impact on competition and user data. The proposed acquisition has faced delays, causing Amazon to announce a reduced purchase price for iRobot in July.
Neuralink, the brain-machine interface company founded by Elon Musk, has raised an additional $43 million in venture capital, according to a filing with the SEC. The filing reveals that the company increased its previous funding round, led by Peter Thiel's Founders Fund, from $280 million to $323 million in early August. Thirty-two investors participated in the funding round. While Neuralink has not publicly disclosed its current valuation, it was reported in June that the company was valued at around $5 billion after privately-executed stock trades. Neuralink, founded in 2016, focuses on developing implantable chips capable of reading brain waves.
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Source: the expert interviews are found on Alphasense, a platform specialized for expert interviews and other investment data.
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