BigTech Becoming VCs 🏧

PLUS: Eyes on AI 👀

Hi Everyone. This is Take Off. We're like a hidden Easter egg in your favorite video game - surprising, delightful, and adding an extra layer of fun to your tech news consumption.

Here's what we're serving up today:

  • BigTech Becoming VCs 🏧

  • Eyes on AI 👀

  • Trending Tools ⚒️ 

  • Wednesday Wires 💰

BigTech Becoming VCs 🏧

As AI captures headlines, there’s a battle brewing in the back. The battle for who holds the most powerful piece of technology in almost two decades after the Internet and Big Tech is trying to get ahead. 

How, you ask? By wielding one of their most powerful weapons: Checkbooks.

Unsurprisingly, one of the biggest investors in AI startups has been Big Tech, specifically Microsoft, Amazon, Nvidia and Google (MANG).

These companies have been strategically placing their financial chips on the AI chess board.

The total capital raised in their 2023 deals was $25B+, which is ~8% of the total venture raised in North America. 

The MANG investments are particularly concentrated in Data and AI: their deals raised $23B.

Large Cheques for Large Language Models

This shouldn’t come as a shock but most of the investments are in LLM startups. And that’s by intention. 

LLM startups are on the hunt for - customers computing resources. 

Cloud providers are on the hunt for - customers. 

#MatchMadeInHeaven

And it turns out that cloud providers funding their customers is a great business model. The investment capital makes a round trip back to the P&L in the form of revenue and helps them break even on the investment faster. 

Digital TollBooths

The MANG companies have transformed into the digital era’s toll collectors, pocketing fees from a vast number of customers.

It is estimated that for every $1 of inference that customers pay their LLM provider, more than half of it ends in the hyper-scaler’s piggy bank to cover those hefty infrastructure bills.

In an earlier era, Big Tech might have just bought these startups outright. After all, they’re not pinching pennies : MANG collectively raked in $276B in operating profits in 2023 alone. 

However, Washington’s antitrust advocates want to restrain big tech bloat.

That suggests these enormous investments may yet be seen as a regulatory dodge. Big Tech companies are in effect locking in their customers while juicing their own revenues. 

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Eyes on AI 👀

Unless you've been chilling under a rock for the past year or so, you've surely encountered the tech world's latest dynamic duo: "A" and "I."

Just like any hot new trend, everyone has hopped aboard the AI train, churning out tools left and right. 

The top 50 AI tools brought in nearly 24B visits from September 2022 to August 2023, growing by 236.3M visits monthly.

1/ Who's leading the pack? Our very own ChatGPT, hogging a whopping 60% of that traffic with 14B visits. Talk about being the life of the party!

2/ Hot on the heels of ChatGPT comes Character.AI, a quirky gang of chatbots playing roles from TV stars to dating gurus and game characters. Imagine a digital masquerade ball where you can chat up anyone from your favorite show or get life advice and play games. 

3/ But LLMs aren’t the only ones having a piece of the cake. Image generators like Midjourney also had a whopping 500.4M visits over that time period. Is anything not AI now?

The biggest fans? The United States, clocking in 5.5B visits, with India not far behind at 2.1B.

19.1B visits have been made on AI chatbots like chatGPT and Bard. Why? Because of their versatility. Almost any industry or role can find frequent use for AI chatbots to enhance productivity. 

And let’s be honest, when was the last time you did not think of “ChatGPT-ing it”, huh. 

AI is making a splash, drawing billions of visits and enticing users with premium features, mirroring the transformative impact of apps like Uber and Airbnb on smartphones, and Google and Amazon for the internet. 

As adoption grows, we're on the cusp of even more groundbreaking AI tools, surpassing the already impressive innovations we've seen. The AI revolution is just warming up, promising an exciting future.

☄️ Asteroids ☄️

Bluesky, led by CEO Jay Graber, navigates the chaotic world of social media with a twist of humor and the mission of decentralization, facing challenges like "Skeetgate". 🐦💻

Spotify nears podcast profit breakthrough in Q4, pivoting from exclusivity and embracing wider distribution, signaling a hopeful turn towards 2024 profitability. 🎙️💰

Meta plans to label AI-generated images on Facebook, Instagram, and Threads, aiming to set an industry standard despite challenges in detecting AI fakes. 🤖🏷️

🐓 Peliqan - All-in-one Data Platform

🌤️ BlueSky - An open social network where anyone can contribute

🤖 Agenthub - Automate any workflow with AI

💰 Wednesday Wires 💰

SUMA Wealth rockets to $5.5M in funding, fueling its mission to empower young U.S. Latinos with tailored financial tools and education. 🌎💸

Ionix supercharges its arsenal with an extra $15M, hitting a $50.3M funding jackpot to fortify enterprises against cyber threats. 🛡️💥

ProducePay, with over $4.5 billion in funded harvests, connects and finances growers and buyers to reduce food waste, leveraging tech for better supply chain transparency. 🍇🌽

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