🕶️ Leadership exodus: is OpenAI losing its mojo?

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Arturo Pardo, Lucila Sarquis & Paula Echeverria
August 13, 2024

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The AI world is hitting a rough patch—Nvidia’s stock just tanked 20% 📉, leaving investors wondering if the AI hype train is running out of steam.

Meanwhile, OpenAI co-founder John Schulman is jumping ship to Anthropic, stirring up drama about what’s next for the company 👀 — oh, no, not again! —. Over at Elon Musk’s X, things aren’t looking rosy either, with the EU throwing privacy complaints their way for sneaky data practices 🔒

But it’s not all doom and gloom: Amazon is throwing a party for Alexa’s 10th birthday 🎂, promising to shake things up with generative AI upgrades.

Keep reading for more updates! 👇🏽

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Six bullets of updates

  1. 🗯️ Elon Musk's X faces eight privacy complaints from the EU over unauthorized data use for training AI.

  2. 🟰 Equity is a significant startup attraction, but how do you manage it when your team spans borders?

  3. 🔊 As Amazon celebrates Alexa's 10th birthday, it aims to revolutionize the assistant with generative AI technology.

  4. 🥂 Redfin CEO Glenn Kelman promises to drink his urine if mortgage rates don't fall by next year.

  5. 🚘 Bolt's expansion strategy: Now in 50+ markets, aiming to shift consumer behavior away from private cars. 

  6. 🪙 Europe’s AI startups are flush with cash. They are using the funds to expand their teams as quickly as possible.

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Oh, oh, is the AI bubble deflating?

Investors are beginning to sense a cooling off in the AI sector, as evidenced by Nvidia’s recent 20% stock drop, which many see as a sign that the AI bubble might be deflating. Despite continued investments in AI startups, with €7.9B spent in 2024, the revenue from AI innovations isn’t keeping pace with the high valuations and expectations.

Some venture capitalists believe this slowdown is just a temporary blip rather than a full burst of the AI bubble. However, concerns remain as big companies like Microsoft and Amazon struggle to see returns on their AI investments. Startups face challenges in turning their lofty valuations into real economic gains.

A significant deflation in AI valuations could occur if large companies like Aleph Alpha and Mistral, which have raised substantial funds, struggle to secure additional investments at higher valuations. This could cause widespread concern if they raise money at lower valuations. Additionally, there is growing skepticism about the future capabilities of large language models (LLMs), with some experts suggesting that these models may have reached their peak. Both investors and researchers are noticing that progress in LLMs seems to be flattening, with little advancement beyond the current top models like GPT-4. Want to read more? 

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Startup Events and Deadlines

  1. SaaStock: Dublin | August 14 | Conference

  2. How to close a Funding Round (it’s not just the pitch deck) | August 14 | Webinar

  3. Crash Course in Financial Modeling | August 19 | Webinar

  4. How to close a Funding Round (it’s not just the pitch deck) | August 28 | Webinar

  5. How to close a Funding Round (it’s not just the pitch deck) | September 4 | Webinar

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These companies just raised money

  1. 🛡️ Defense tech start-up Anduril Industries raises $1.5B, now valued at $14B.

  2. 🛬 Flyr, an airline retail platform, raises a $295M series D round, the year's most significant travel tech deal. 

  3. 🩺 IDRx Announces $120M Series B financing to advance potential best-in-class new treatment for gastrointestinal stromal tumor (GIST).

  4. 🇯🇵 Shinobi Therapeutics secures a $59M grant from the Japanese Agency for Medical Research and Development.

  5. 🛰️ Muon Space, a Silicon Valley-based startup developing small satellites for Earth, raises $56.7M

  6. 💵 Conduit's $6M funding boosts B2B cross-border payments from LatAm to Africa. It now handles over $5B transactions.

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OpenAI's leadership is shaking up again

(OpenAI co-founder Schulman) TechCrunch

The original founding team at OpenAI is seeing significant changes. Co-founder John Schulman announced on X that he was departing to join rival company Anthropic, citing personal reasons for his decision. Additionally, OpenAI President Greg Brockman is taking a sabbatical until the end of the year, leaving only three of the original 2015 founders still active: CEO Sam Altman and Wojciech Zaremba, who leads Language and Code Generation.

Peter Deng, the vice president of consumer products at OpenAI, exited the company a week ago, although he was not part of the original founding team.

Meanwhile, Elon Musk is suing OpenAI, alleging it has strayed from its original mission. With influential figures like former chief scientist Ilya Sutskever starting their own ventures, the leadership upheaval at OpenAI raises questions about its future stability and direction. Read more about this.

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Investor Data Room Checklist

An investor data room is a storage space, digital or physical, where companies store information relevant to due diligence. We've compiled a FREE Template/Checklist of all the items your data room should include and resources and tools for obtaining them.

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This is why you shouldn’t outsource your Minimum Viable Product (MVP)

Assembling the right team is essential when starting a company, with developers being key players. Although outsourcing development work is an option for some, it frequently doesn't meet expectations. In this video, we explore why this strategy often falls short. Subscribe here for more videos!