November 27th Newsletter

This week, the political and economic landscape undergoes rapid transformation. Ex-Soros strategist Scott Bessent is set to drive Trump's economic policy as Treasury Secretary, focusing on comprehensive tax cuts and deregulation. The Supreme Court is poised to challenge FCC authority by reassessing the Universal Service Fund's legality. The Biden Administration also proposed Medicare coverage for obesity drugs, hinting at potential healthcare reforms. On Monday, Microsoft Outlook and Teams had an outrage for more than 24 hours. France plans an AI summit in February 2025 as it positions itself as an emerging AI hub. Ending on a thankful note, according to the American Farm Bureau Federation, this year’s Thanksgiving dinner will cost 5% cheaper than last year!

 This Saturday, ChatGPT will celebrate the 2nd anniversary of its public debut in 2022. Will OpenAI have a birthday surprise?🎁

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

Top 5 AI highlights

[1] 💡 In a whirlwind of AI funding, Amazon invested $4B in Anthropic; OpenAI employees can sell $1.5 billion worth of shares in a new tender offer to SoftBank, valuing the company at $157 billion. Meanwhile, Musk's xAI offered Twitter investors a 25% stake, with Fidelity, A16z, and Sequoia Capital among the investors getting the equity. More detail on TC, CNBC, and FT.

[2] 🔗 Anthropic proposes a new way to connect data with chatbots. Anthropic's new Model Context Protocol (MCP) enables AI assistants to connect with data sources like Slack and GitHub, streamlining integrations and improving task execution. Block and Apollo have adopted it, but competition from OpenAI and unproven performance could hinder widespread adoption. Read more on TC.

[3] 🔍 OpenAI is exploring creating a web browser integrated with ChatGPT and collaborating with companies like Redfin and Priceline to enhance search features on platforms for travel, food, and real estate. It’s also discussing AI-powered tools with Samsung, challenging Google’s dominance in search, browsers, and device partnerships especially with the ongoing DOJ case. Read details here.

[4] 🎥 A group leaked OpenAI’s unreleased Sora video generator, accusing the $150B company of exploiting artists with unpaid labor and restrictive policies. The leak briefly enabled users to generate watermarked 1080p videos before access was revoked. OpenAI defends its voluntary program and grants, but critics call it PR-driven. The protest underscores Sora’s struggles with technical issues and partnerships, as competitors like Runway and Stability secure high-profile deals with Lionsgate and James Cameron. See videos on X here.

[5] ⚖️ AI jobs promise opportunities in Kenya, but workers face exploitation. In an episode of 60 Minutes, documents reveal OpenAI paid Sama (side note: Sama, the OpenAI CEO, found someone named Sama, from Kenya, to do work) $12.50 per Kenyan worker hourly, but workers report receiving just $2, sparking criticism over fair wages. These “AI sweatshops” involve precarious contracts and have raised the ethical challenges of AI’s global supply chain. Watch the interview for more.

Founder’s Corner

"Trendy spaces offer quick wins, but billion-dollar companies often emerge in niches where pioneers shape trends before they explode."

What we read and watched for this week

• Apple unveils 2024 App Store Awards finalists, including a new Vision Pro spatial computing category, but AI apps (such as Claude and ChatGPT) were snubbed as none were mentioned; Kinno, Runna, and Tripsy are in the running for App of the Year. (Apple)

• Chinese robotaxi Pony AI delays IPO to next week; Uber plans to invest $10M in Pony AI's IPO, highlighting potential partnerships of autonomous technology. (BBG) Freda Duan, Altimeter Analyst, shares her robotaxi trips via X video here.

• DirecTV abandoned its $1 acquisition of Dish DBS, including Sling TV, due to bondholder opposition to a debt exchange plan. (WSJ)

• Elon Musk’s interest in acquiring MSNBC faces challenges, as Comcast plans a spinoff, not a sale. (WSJ)

• Joe Rogan interviews Marc Andreessen, a16z co-founder, in a lengthy 3-hour conversation on The Joe Rogan Experience: YouTube

• Macy's revealed an employee concealed $154 million in delivery expenses over three years, delaying financial results, while Macy’s Thanksgiving parade broadcasting rights leap to a potential $60M for NBC. (NBC) (YF)

• Meta will face trial in April 2025 over FTC allegations of acquiring Instagram and WhatsApp to stifle competition. (Reuters)

Special Section: Q3 Earnings Highlights

• Best Buy's weak sales persist despite AI advancements, with the 12th consecutive quarter of negative same-store growth and expectations of sales to fall 4% for Q4. (YF)

• Dell shares fell 10% after missing revenue estimates and issuing lower-than-expected Q4 forecasts, despite highlighting robust demand for AI-driven systems like Nvidia-powered computer clusters. (CNBC)

• Despite the massive IT outrage in July, Crowdstrike beat expectations, as revenue increased 29% to cross $1B this quarter and total ARR increased 27% to $4.02 billion. (IBD)

• Zoom Communications shares fell 4% despite strong Q3 results, with revenue growing 4% year-over-year, meeting expectations. Zoom. The Company has officially dropped "Video" from its corporate name, as part of its strategic shift to position itself as an AI-first work platform. (CNBC)

BofA: 4th highest S&P 500 trailing 12 months P/E in the past 124 years

AI M&A and Fundraising news

November 26:

• Boosted.ai: Financial analysis GenAI tool, raised a $15M round.

• Elchemy: Supply chain AI solutions, raised a $5.6M Series A round.

November 25: 

• Biolevate: France-based medical documentation AI, raised a $6.3M Seed round.

• Cofactor AI: Insurance appeals automation AI, raised a $4M Seed round.

• Grey Market Labs: Replica platform adoption, raised a $8M Series A round.

• MAGIC AI: AI personal trainer mirror, raised a $5M Seed round.

• PlayAI: Voice interface AI, raised a $21M Seed round.

• Prompt Security: Generative AI security platform, raised a $18M Series A round.

• Pyramid Analytics: AI-driven decision intelligence, raised a $50M round.

• SurePath AI: GenAI adoption site, raised a $5M Seed round.

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

November 22:

• MannyAI: Fashion inventory management AI, raised a €1.26M Pre-seed round.

• MatX: Developing efficient AI application chips, raised a ~$80M Series A round at a ~$300M valuation.

• Pickle Robot: AI-powered truck-unloading robots, raised a $50M Series B round.

November 20:

• Federato: AI insurance underwriting, raised a $40M Series C round.

November 21:

• Aira Technologies: Cellular network AI infrastructure, raised a $14.5M Series B round.

• Anomalo: Data quality software provider, raised a $10M Series B round.

• Aviz Networks: AI-driven networking software provider, raised a $17M Series A round.

• Dannce.AI: Patient movement AI analysis, raised a $2.6M Pre-seed round.

• Lightning AI: AI orchestration tools, raised a $50M equity 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.