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  • The AI Rundown by Lightscape Partners - 10/28/24

The AI Rundown by Lightscape Partners - 10/28/24

Perplexity’s $9B Ambition, Nvidia’s Hardware Hurdles, and OpenAI’s AGI Team Disbandment

Author

Ted Wagner
October 28, 2024

Image credit: CNBC 

Good morning and welcome to another edition of The AI Rundown by Lightscape Partners.

  • Perplexity AI is making headlines as it seeks a $9 billion valuation in its latest funding round. The AI search engine startup is rapidly growing in the generative AI space, positioning itself as a competitor to Google, though it faces challenges over plagiarism allegations from major media outlets.

  • Meanwhile, Nvidia faces fresh scrutiny as CEO Jensen Huang admitted that a design flaw in the Blackwell GPU was "100% Nvidia's fault." This hardware issue, though resolved, highlights the intense pressure on AI chipmakers to meet growing market demands amid supply chain challenges.

  • Finally, OpenAI’s recent disbanding of its AGI Readiness team has raised concerns about the company's ability to handle future AI risks. Senior advisor Miles Brundage's resignation adds to the growing debate over the readiness for artificial general intelligence and its societal implications.

Stay tuned for deeper insights into these stories and more as we explore the latest in AI and technology.

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Hardware

Nvidia’s Jensen Huang admits AI chip design flaw was '100% Nvidia's fault'. Link.

  • Nvidia CEO Jensen Huang confirmed that a design flaw in the Blackwell GPU, which caused low yields, was entirely the company's fault, not TSMC’s.

  • The flaw was identified and resolved with TSMC's help, and the refined Blackwell GPUs are entering mass production.

  • Huang dismissed rumors of tension between Nvidia and TSMC as 'fake news,' stating the companies worked well together.

  • Despite the fix, some of the original low-yield GPUs will still be shipped in 2024 to meet demand from major cloud providers.

Potential AI needs could threaten chip shortages. Link.

  • Bain & Company predicts AI workloads will grow 25% to 35% annually through 2027, driving significant demand for GPUs and upstream components.

  • The AI hardware and software market could reach up to $990 billion by 2027, with component demand potentially growing over 30% by next year.

  • Chipmakers and suppliers may need to triple production to meet the anticipated demand for GPUs and chip packaging components.

  • Major cloud providers are investing heavily in infrastructure, facing bottlenecks in electrical grid capacity and skilled labor shortages.

Models

Claude 3.5 Sonnet introduces computer use and a new Claude 3.5 Haiku. Link.

  • Anthropic has launched an upgraded Claude 3.5 Sonnet, offering significant coding improvements and a new model, Claude 3.5 Haiku, which matches previous models in performance at the same cost and speed.

  • Claude 3.5 Sonnet introduces an experimental 'computer use' feature, allowing the model to interact with computers like humans, though it remains imperfect.

  • Early adopters, including Replit and Asana, have begun testing these capabilities for complex workflows.

  • Both models are available through major platforms like Google Cloud and Amazon Bedrock.

Product Launches

Goodreads’ founder launches AI-powered app for online readers. Link.

  • Otis Chandler, co-founder of Goodreads, launched Smashing, an AI-powered app that curates web content such as news articles, podcasts, and social media posts.

  • The app’s AI Questions feature allows users to explore content from multiple perspectives or simplify, analyze, and even humorize news stories.

  • Users can create personalized feeds based on interests like politics, investing, or specific companies.

  • Smashing’s AI matches content to users based on reading habits, community votes, and popular topics.

  • The app is backed by $3.4 million in seed funding and currently available on iOS.

Zencoder launches to bring AI coding agents to software development. Link.

  • Zencoder, founded by Andrew Filev in 2023, has introduced a suite of AI-powered products designed to enhance software development, offering code generation, repair, test creation, and optimization.

  • A key differentiator is the multistep coding and self-repair capabilities of Zencoder’s AI agents, which stand out from other coding assistants by offering deeper integration into codebases.

  • The platform's tool, Repo Grokking, allows AI agents to analyze and optimize code structures, enabling more relevant suggestions and bug fixes.

  • Zencoder supports major languages and integrates with popular editors like Visual Studio Code.

Funding & Valuations

Perplexity AI seeks valuation of $9 billion in new funding round. Link.

  • Perplexity AI is raising $500 million in a new round of funding, aiming to more than double its valuation to $9 billion.

  • The company was valued at $3 billion in June, reflecting rapid growth alongside the generative AI boom.

  • Perplexity competes with Google as an AI search engine, attempting to challenge the tech giant's dominance.

  • Despite its success, the startup faces plagiarism accusations from media outlets like the New York Times, which Perplexity denies.

AI software firm Zip valued at $2.2 billion in latest funding round. Link.

  • Zip, an AI-powered business software company, raised $190 million in a Series D round led by BOND, bringing its valuation to $2.2 billion, up from $1.5 billion in 2023.

  • The funds will be used for research, expanding AI solutions, and global growth, with a focus on Europe, the Middle East, and Africa.

  • New investors included DST Global, Adams Street, and Alkeon, joining existing backers like Y Combinator and CRV.

  • Zip's platform helps companies streamline procurement processes and reduce risk, with customers such as Arm, Canva, and Reddit.

VCs invested $3.9B in generative AI startups in Q3 2024. Link.

  • Investments totaled $3.9 billion across 206 deals, with $2.9 billion going to U.S.-based startups.

  • Key funding recipients include Magic ($320 million), Glean ($260 million), and Hebbia ($130 million), along with China’s Moonshot AI ($300 million) and Japan’s Sakana AI ($214 million).

  • Despite challenges like computational demands and legal concerns, investors bet on generative AI’s long-term growth.

  • Environmental concerns grow as AI increases data center power consumption, with some turning to nuclear energy as a potential solution.

Safety And Ethics

Apple expresses concern over AI altering reality in photos. Link.

  • Apple's software chief, Craig Federighi, revealed that internal debates occurred before adding AI-powered image editing tools to iOS, emphasizing authenticity.

  • The new "Clean Up" feature in iOS 18.1 can remove objects but is less advanced than rival tools like Google’s, which can add AI-generated elements to images.

  • Apple is focused on preventing AI-generated manipulations, tagging edited images with metadata to ensure transparency.

  • Federighi expressed concerns about AI’s role in eroding trust in photos, highlighting the growing challenge of distinguishing real from fake.

Teen’s mother sues AI chatbot creators after tragic death. Link.

  • A civil lawsuit was filed by Megan Garcia after her 14-year-old son, Sewell Setzer III, died by suicide following a 'harmful dependency' on the AI chatbot, Character.AI.

  • Sewell had become emotionally attached to a Game of Thrones-themed chatbot, even believing he had fallen in love with the character.

  • The suit accuses Character.AI of negligence, claiming the service failed to intervene when Sewell expressed suicidal ideation.

  • The company has since implemented safety measures, including prompts directing users to the National Suicide Prevention Lifeline.

OpenAI

OpenAI disbands AGI Readiness team amid safety concerns. Link.

  • OpenAI has disbanded its AGI Readiness team, which advised on handling powerful AI, following the resignation of senior advisor Miles Brundage.

  • Brundage believes his AI policy work will have more impact externally and has concerns about OpenAI and the world’s lack of readiness for AGI.

  • This disbandment follows the dissolution of OpenAI’s Superalignment team earlier this year, which had focused on long-term AI risks.

  • Brundage plans to continue his research through a nonprofit or external organization focused on AI policy and safety.

OpenAI launches ChatGPT desktop app for Windows, aiming to reshape office software. Link.

  • OpenAI has released a Windows desktop app for ChatGPT, following its macOS launch, offering users easier AI integration through a keyboard shortcut.

  • This expansion positions ChatGPT as a crucial tool for productivity, embedding it into workflows and increasing user engagement.

  • The move signals OpenAI’s ambition to challenge traditional office software and reshape how knowledge work is done.

  • OpenAI's expansion raises ethical concerns, balancing its rapid growth and commercialization with the societal implications of widespread AI use.

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