December 6th Newsletter

This past week, the market seems to be optimistic: Bitcoin surged past $100,000 for the first time on Wednesday, a tremendous milestone from its value of 5 cents from 15 years ago. Trump selects Paul Atkins to succeed Gary Gensler as SEC chair and nominated Gail Slater to lead the antitrust division, and the Fed officials signaled ongoing rate cuts into 2025 to navigate the current complex environment. A flurry of macro data released this week: Fresh from this morning, the US added 227K jobs in November while unemployment ticked up to 4.2%; More than half of U.S. workers actively seek new jobs at the highest rate in 10 years; Job openings rose to 7.74 million in October, higher than expected; PCE index rose +2.3% YoY in October, as spending and income increased. Overseas, French President Macron refused to resign a day after his designated Prime Minister was forced to resign due to losing a no-confidence vote. Nvidia CEO Jensen Huang backs Thailand's sovereign AI project, emphasizing economic growth and potential for innovation. Did you do any shopping? Black Friday sales rose +5% to $74.4B, and Cyber Week hit its all-time high as global sales climbed 5.7% to $314.9B. Before we jump into the top 5 AI highlights, this Wednesday Chief Economist of Vanguard, warns investors of overestimating AI’s near-term potential, similar to the dot-com bubble.

We have recently published our Edtech and HCM market maps. Access both here.

Top 5 AI highlights

[1] ​​🌍World Labs, founded by the “godmother of AI” Fei-Fei Li, unveiled an AI system creating interactive 3D scenes from single images. Accessible via browser, the system transforms images into realistic 3D worlds. Unlike other models, these scenes are explorable, modifiable, and maintain consistency with basic physics. DeepMind released Genie 2 which also generates interactive 3D worlds from text and images, highlighting competition in the AI “world models.” Read about World Labs. Information on Genie 2.

[2] 💰Tenstorrent raised $700M from Bezos, Samsung Securities, and others, valuing the AI chip firm at $2.6B. Focused on low-cost, open-source RISC-V architecture, it aims to rival Nvidia's proprietary systems. Funds will expand technical staff, supply chains, and AI training servers. Tenstorrent joins the AI chip competition against giant NVIDIA alongside AMD, Amazon, and Cerebras. Read more.

[3] 🔧 Amazon unveiled Nova foundation models and new AI-focused chips at its re:Invent conference, challenging OpenAI, Anthropic, and Meta. The Nova family includes text, image, and video models, alongside the "Project Rainier" supercomputer powered by Trainium2 chips. Chief Executive Garman believes custom chips are what will give Amazon an edge in the long term, aligning with goals of increasing cost accessibility of their cloud services – a difficult task if Amazon solely relied on Anthropic. Amazon is also working on a revamped, AI-powered Alexa, set to release next year. Read more on Nova and Amazon’s grand plan with AI.

[4] ⚖️ Elon Musk's attorneys filed for an injunction against OpenAI, its co-founders, Microsoft, and others, accusing them of anticompetitive practices. Allegations include discouraging investments in Musk’s xAI, misusing confidential information, and shifting OpenAI’s nonprofit mission for profit. On the other hand, xAI has raised $11B in funding after launching for only 16 months and plans to expand its Memphis supercomputer to house at least 1 million GPUs. Additional details on the trial and the expansion.

[5] 🎄ChatGPT turned two years old last Saturday and data shows they gifted Big Tech $8 trillion in market cap since its launch. In the holiday spirit, OpenAI announces “shipmas:” a 12-day rollout of new features that started Dec 5th, including the much-anticipated text-to-video AI tool Sora. Their first gift is the release of o1 (out of preview) to plus users, who pay $20/month, and a new pro tier ($200/month), that has unlimited queries and can think even harder for the hardest problems. Google’s rival Veo video model also launches, beating Sora to market. OpenAI also hires Kate Rouch from Coinbase as their first marketing chief. On Wednesday, OpenAI announced a new partnership with counter drone company Anduril, a switch on their previously stated terms of service on anti-military use. More information on $8 trillion, shipmas, and Anduril.

Founder’s Corner

Insights from the COO of Shopify

What we read and watched for this week

• America’s largest privately-held company Cargill to cut 5% of staff (~8,000 jobs) amid revenue slump due to low crop prices. (Reuters)

• Australia passes world-first law banning social media for children under 16, enforcing $33M fines. (AP) 

• FCC approved T-Mobile-SpaceX license for satellite internet, extending wireless coverage to eliminate dead zones. (CNBC) 

• FTC launched an antitrust investigation into Microsoft, scrutinizing AI dominance, cloud services, and Activision's acquisition history. Microsoft also faces a $1.27B antitrust lawsuit in the UK over their cloud services. (CNN, WSJ) 

• Intel CEO Pat Gelsinger retires after board confidence wanes, effective Dec. 1; stock fluctuates before closing slightly lower. (YF)

• Meta plans nuclear energy partnerships for AI and sustainability, building a $10B data center in Louisiana. (Meta)

• Mark Zuckerberg seeks an active role in tech policy under Trump, despite his previous announcement of staying politically neutral in public. (FT, NYT)

• Seven & i plans $6B IPO for North American 7-Eleven, Speedway, Sunoco amid $58B buyout effort. (Axios)

• Stellantis CEO Carlos Tavares resigned amid board disagreements; interim leadership was established, and a search for a successor is underway. (AP)

Special Section: Q3 Earnings Highlights

• Salesforce Q3 reaches revenue of $9.44B, an +8% YoY. Net Income reaches $1.5B with a +25% YoY, raising Q4 guidance. (Investors)

AI M&A and Fundraising news

December 4:

• Briefcase: AI bookkeeping automation, raised a $3M Seed round.

• Cake: AI infrastructure, raised a $10M Seed round.

• GAIB: Marketplace for high-performance computing, raised a $5M Pre-seed round.

• GROWL: AI-powered boxing device, raised a $4.8M Seed round.

• OpenPad AI: Decentralized investment data business, raised a $2M round.

• System Two Security: GenAI-focused cybersecurity, raised a $7M round.

December 3:

• FireDome: Autonomous wildfire cannons, raised a $3M Pre-seed round.

• Nurture Boss: Apartment communication AI platform, raised a $4M Series A round.

• Theo AI: Legal predictive analytics, raised a $2.2M Pre-Seed funding.

• Yurts: Generative AI startup with defense contracts, raised a $40M Series B round.

December 2:

• 9fin: Credit analytics, raised a $50M Series B round.

• Lumin Digital: Cloud-based digital banking for credit unions and banks, raised $160M.

• Nvidia & Nebius: $700M AI cloud services deal.

• Pathway: Live AI systems, raised a $10M Seed round.

• Raidium: French-based radiological AI foundation, raised $13M in seed funding.

• Teachy: AI workspace for teachers, raised a $7M Series A round.

• Tenstorrent: Toronto-based AI chipmaker, raised a $700M round.

• Upwind: Cloud security, raised $100M Series A at $900M valuation.

• Vooma: Freight AI platform, raised a $13M Series A round.

November 28: 

• Bleap: Self-custodial stablecoin app, raised a $2.3M Pre-seed round.

• Dev Agents: AI operating system, raised a $56M Seed round.

• Wordware: Simplifying AI development, raised a $30M Seed round.

Attached to this email, you’ll find a summary of this week’s highlights and the financial performance of select public companies, providing you with a snapshot of recent market movements.