Uncover Tech Insights - October 16-20
Weekly market stock moves
Current Google Lead at Google Cloud shares his view on the industry
When it comes to retail, CPG, and digital-native companies, cloud adoption is already quite far. Industries like manufacturing, healthcare, and financial services are still far away from having high cloud adoption.
Regarding cloud pricing, in the last two years prices have stayed more or less the same, while before, they were constantly decreasing. The expert thinks we have reached a saturation point when it comes to price and that because of increased costs, the prices of cloud providers might even increase in the future.
When it comes to Generative AI workloads, the expert thinks from now till early next year, we are entering a pivotal moment for big hyper scalers like Amazon AWS and Microsoft Azure. This is the time when clients will be looking for testing genAI workloads and deciding who gets it.
Cloud clients are still in the exploration phase when it comes to Generative AI workloads. However, the expert expects that in the future, we are looking at a hockey stick curve that is to come.
Former VP at Adyen who shares his views on Adyen, Paypal 's Braintree, and the whole industry.
The competitive differentiator for Adyen is, in his view, the fact that Adyen is an end-to-end platform where they control everything themselves. In terms of the moat, he thinks it’s a rolling moat where Adyen is constantly a few years ahead of the competition in the development of the platform and new products.
In his view, two main reasons exist for the recent deacceleration of Adyen. One is merchants can now switch their payment providers more easily than before. When he was there, only the top 10 digital companies had multiprocessor set-ups where they could route different processors. Now, that has expanded into more companies. With that said, he doesn’t think that even every $8-$10B size merchant will be able to build it, as you need a pretty sophisticated payment team to be able to do it.
In his view, the macro is the second reason for the deacceleration of Adyen. Because of the macro, sales cycles have extended from maybe 9 months to 15 months, as companies are doing layoffs, and payments are not their top priority right now.
He thinks there are still a lot of opportunities for Adyen both in the US, where they only have around 1% of U.S. card volume, and also outside.
Paypal's Braintree has improved recently, especially on a weak point they had before: speed and ease of integration. Because of macro, merchants are also more price sensitive, which could benefit Braintree as it offers really low rates. He says Braintree is now being seen in more of the bigger deals as a competitor than when he was still working for Adyen (left 1 year ago).
Most impactful news of the week
Amazon is implementing several new artificial intelligence and robotics technologies in its warehouse operations to enhance delivery efficiency and streamline inventory identification. The initiative will transform the logistics flow within Amazon's fulfillment centers using AI-powered sortation machines and robotic arms. These changes are expected to impact the work processes of many Amazon employees. The company's new robotics system, called Sequoia, focuses on both speed and safety, aiming for human-robot collaboration to minimize workplace injuries.
Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are among the influential Chinese investors that invested 2.5 billion yuan ($342 million) in AI startup Zhipu this year, part of a wave of capital flowing into a red-hot arena. Zhipu and Baichuan are among the better-known startups developing generative artificial intelligence, hoping to match the likes of Microsoft Corp.-backed OpenAI and Google. Venture capital firms and tech leaders are pouring billions into training and developing AI services, mirroring a wave of activity across Silicon Valley and Europe. On Tuesday, Baidu Inc. billionaire founder Robin Li declared his company’s large language model Ernie on par with OpenAI’s GPT-4, claiming the lead in that nationwide race.
Apple's Chief Executive, Tim Cook, is making an unannounced trip to China to address challenges the company faces in one of its largest markets. This visit includes stops at Apple stores, meetings with key suppliers, and discussions with senior officials, including the Chinese Commerce Minister. Apple's relationship with China is becoming more intricate, as it relies on the country for manufacturing and sales but faces challenges from domestic competitors and increased government scrutiny due to geopolitical tensions.
Alphabet Inc.'s, Apple Inc., and Meta Platforms Inc. have received approval from US regulators to deploy new mobile virtual- and augmented-reality devices, such as goggles and in-car connections. These devices will be allowed to use airwaves currently used by Wi-Fi-enabled devices, according to a 5-0 vote by the Federal Communications Commission. These airwaves, within the 6 GHz band, offer potential for the development of wearable technologies and are essential for future innovations like augmented reality eyeglasses and vehicle-to-smartphone communication.
Amazon has announced plans to expand its drone delivery program, including sending prescription medication via drones and launching drone flights in Britain and Italy by late 2024. The company recently initiated a drone delivery option for Amazon Pharmacy customers in College Station, Texas, as part of a test program. In addition to this, Amazon intends to extend its drone delivery tests to a third US city and reveal new locations in the United Kingdom and Italy in the near future.
Over a five-year period, advertising payments from Expedia Group's vacation home rental business to Google increased tenfold. However, despite the significant rise in search advertising costs from $21 million in 2015 to $290 million in 2019, the number of visitors from Google to Expedia's Vrbo did not increase.
SoftBank is reportedly in talks to acquire shares of 1X Technologies, a Norwegian humanoid robotics company that OpenAI had previously funded. The nine-year-old startup is discussing a SoftBank-led fundraise of between $75 million and $100 million at a pre-investment valuation of $375 million. OpenAI, among other investors, had previously provided $23 million in funding to 1X Technologies. The company is based south of Oslo and has around 100 employees.
The Chinese government has acquired a stake in a domestic subsidiary of Tencent, the company behind WeChat, China's largest messaging app. This move is part of Beijing's broader strategy to increase its control over major tech companies in the country. The government has previously taken similar-sized stakes in the domestic subsidiaries of other tech giants, such as ByteDance, Alibaba, Kuaishou, and Weibo, providing them with board seats and more influence over these companies.
Netflix is increasing its subscription prices for certain plans. The Basic plan, previously priced at $9.99 per month, is now being raised to $11.99 per month. The Premium plan, previously $19.99 per month, will now cost $22.99 per month. This price increase comes after Netflix raised its prices in January 2022. The Basic plan, which is ad-free, is also no longer available to new or returning users, prompting everyone to subscribe to higher-priced plans.
Andy Jassy, the CEO of Amazon, outlines the company's focus on three layers of the AI stack. The first layer involves building AI models, which are expensive to develop. The second layer includes applications built on top of these models, which are expected to have various uses. The third layer involves investing in chips to power advanced applications. Jassy's emphasis on these three layers demonstrates Amazon's commitment to AI and its willingness to invest in technology that will drive future applications.
X, formerly known as Twitter, is introducing a new subscription model called "Not A Bot," which aims to combat fake and spam accounts. The platform has begun testing this model in New Zealand and the Philippines, requiring new users to verify their phone number and pay an annual fee of $1 to perform essential functions like posting content, liking posts, and replying. The introduction of this annual fee is intended to make it significantly more challenging for bots to manipulate the platform, although it may not entirely eliminate them.
Meta Platforms, the parent company of Facebook, is encountering challenges in convincing marketers that advertising on Reels, its response to TikTok, can effectively drive new business. After a year of offering ad placements on Reels, ad executives are skeptical of its ability to persuade viewers to take immediate actions like making a purchase or downloading an app. Instead, marketers see quick video ads on Reels as better suited for brand promotion, as viewers are often in the mindset of enjoying short, entertaining content rather than making purchase decisions.
Thanks for reading Uncover Tech Insights! Subscribe for free to receive new posts and support my work.
We would really appreciate it if you could share it with someone you know who would be interested in tech investing news. Organic, and especially word of mouth, is the main way our newsletter will grow. We will always put quality before quantity. Thank you.
Source: the expert interviews are found on Alphasense, a platform specialized for expert interviews and other investment data.
Nothing contained in this website and newsletter should be understood as investment or financial advice. All investment strategies and investments involve the risk of loss. Past performance does not guarantee future results. Everything written and expressed in this newsletter is only the writer's opinion and should not be considered investment advice. Before investing in anything, know your risk profile and if needed, consult a professional. Nothing on this site should ever be considered advice, research, or an invitation to buy or sell any securities.