Good morning, happy President’s Day, and welcome back to another week of The AI Rundown by Lightscape Partners.

The biggest stories in AI last week:

• OpenAI’s ARR crosses $2 billion at the year end, but the cost of running models still looms.

• Nvidia’s market value eclipses Amazon for the first time since 2002, further highlighting the frenzy surround AI and the chip scarcity.

• OpenAI announces its generative video model capable of producing 60-second clips. I strongly suggest you take a look at the official announcement here.

If you’d like a quick refresher on industry terms and the current landscape of AI, skip to the bottom.

Otherwise, keep reading to see the biggest stories in AI last week.

Top AI Developments of the Week

OpenAI’s annual run rate crosses the $2 billion mark in 2023, seven years after its founding. Link.

• OpenAI's annual run rate reached the $2 billion revenue mark, making it one of the few companies to achieve such a milestone within a decade of existence, similar to Google and Meta.

• OpenAI was launched in 2015 as a nonprofit by Silicon Valley figures including Sam Altman, Elon Musk, Peter Thiel, and Reid Hoffman, aiming to develop general artificial intelligence.

• The release of ChatGPT in November 2023 significantly boosted OpenAI's popularity, with the chatbot now used by over 92% of Fortune 500 companies and having 100 million weekly users.

• Running large AI models is costly, with expected spending to outpace revenue growth as OpenAI develops more advanced models.

Amid the AI frenzy, Nvidia’s market value briefly surpasses Amazon. Link.

• Nvidia momentarily surpassed Amazon in market value, reaching a record high of $1.82 trillion, making it the fourth most valuable U.S. company amid AI frenzy.

• The last instance Nvidia was more valuable than Amazon was in 2002, with both companies valued at under $6 billion at that time.

• Investors are keenly awaiting Nvidia's quarterly results on Feb. 21, after the company's shares surged by 47% year-to-date, the highest gain among S&P 500 companies.

• Nvidia's success is attributed to its leading role in supplying chips for generative AI applications, with its stock experiencing a 223% increase over the past 12 months, the best performance among the "Magnificent Seven."

• Microsoft recently became the world's most valuable company, surpassing Apple, with Alphabet holding the third spot, showcasing the significant market shifts influenced by technology and AI developments.

OpenAI announces a new generative video model, Sora, in breathtaking fashion. Link.

• OpenAI introduces Sora, a new generative video model capable of turning text descriptions into detailed, high-definition video clips up to a minute long, showcasing significant advancements in text-to-video generation technology.

• OpenAI has not yet released Sora to the public, citing the need for extensive safety testing against potential misuse.

• Sora leverages technology from DALL-E 3, combining diffusion models with transformers to process video data, allowing for the generation of videos with varied resolutions, durations, aspect ratios, and orientations.

• The company is exploring Sora's potential applications by sharing it with select video makers and artists for feedback, while also addressing safety concerns with content filters and metadata tagging to mitigate risks associated with photorealistic deepfake videos.

Venture

Flower Labs has been valued at $100 million in its recent investment round. Link.

• The AI startup aims to develop an open-source software that allows models to be trained without the need to pool data into a single location.

• The $20 million round is led by Felicis Ventures out of Silicon Valley.

Clarity, a startup developing AI deepfake detection, raises $16 million. Link.

• Based in New York, the team of 13 closed the $16 million round led by Walden Catalyst Ventures and Bessemer Venture Partners.

• The funding comes in a year where all eyes will be on election misinformation and current celebrity controversy over AI generated images.

Looking to shake up the enterprise customer service industry, Rasa raises $30 million. Link.

• The San Francisco-based startup closes its Series C round led by Stepstone Group and PayPal Ventures.

• The round also saw participation from Andreessen Horowitz (a16z).

Software + Hardware

OpenAI’s next big move may revolve around taking over your computer as the AI giant doubles down on agent use cases. Link.

• OpenAI is developing "agent software" that can autonomously operate a user's device, performing tasks across multiple applications, potentially revolutionizing user interaction with computers.

• This initiative aligns with Sam Altman's vision to evolve ChatGPT into an advanced personal assistant, surpassing current AI assistants like Siri in functionality and intelligence.

• OpenAI's strategy includes creating a web browsing AI agent capable of executing complex online tasks, such as planning flights and conducting company research, beyond ChatGPT's existing abilities.

• The company is transitioning towards becoming an AI agent-focused entity, as evidenced by the launch of the GPT Store, a marketplace for AI agents, indicating a broader vision for AI's role in technology.

Apple acquires iWork.ai domain, indicating upcoming AI integration as iOS 18 launch nears. Link.

• The acquisition of the iWork.ai domain suggests Apple's broader adoption of AI across its software ecosystem, including the upcoming iOS 18, which is expected to heavily utilize AI for features like auto-summarizing, auto-complete, better playlist creation in Apple Music, Siri enhancements, code completion in Xcode, and AppleCare support tools.

• Historically, Apple promoted its iWork and iLife suites but shifted focus to iCloud branding over time. Despite this, the iWork apps continue to receive updates, albeit without significant revamps.

• Anticipated AI features for Apple products include Circle to Search on the iPhone, improved Siri responses on the Apple Watch Ultra 2 through on-device processing, and enhancements in context understanding and query information retrieval.

Ethics in AI

A scientific article with ridiculous AI-generated images passes peer review. Link.

• A new study published in Frontiers in Cell and Developmental Biology, featuring AI-generated images, has raised concerns about the credibility of scientific publications.

• The images, described as grotesque and nonsensical, included a diagram of a mouse with disproportionately large and mislocated testicles, along with nonsensical labels like "testtomcels" and "dck."

• The researchers disclosed that the images were generated by AI (specifically Midjourney) but seemingly made no effort to edit the obviously flawed visuals, thereby undermining their own credibility.

Get up to speed on the current landscape

• AI Term Glossary

• Current AI Landscape from Sequoia Capital

Thank you for reading the AI Rundown by Lightscape Partners. Please send any questions, comments, or suggestions to [email protected].