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:

• The Billion Dollar AI Gold Rush 💰

• Asteroids ☄️

• Trending Tools ⚒️ 

Sponsored by

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Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

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Retail distribution was the main driver behind the acquisitions of both Ring and Nest, and their exclusive deal with Best Buy puts them in pole position to dominate this burgeoning industry.

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The Billion Dollar AI Gold Rush 💰

It’s been almost 18 months since the iPhone Moment of AI (ChatGPT’s launch) but it still seems like the pace of development is moving at lightning speed.

As GenAI now progresses and is swiftly starting to trickle into our lives and businesses, a good question to ask is: 

Where does the BIG money lie in GenAI - now and in the future?

The Contenders

The stack for genAI can be split up into 4 parts:

1. Semiconductors: NVIDIA, AMD - 

2. Cloud Infrastructure: AWS, GCP, Azure - The Big Cloud.

3. Foundation Models: OpenAI, Anthropic, Midjourney - The Brains behind the Bots.

4. Applications: The Zillion Apps and The ChatGPT wrappers.

Care to take a guess where the real dollar-bills are at right now? 

Well, today, it seems like the GenAI stack is A-Shaped vs V-Shaped for the Cloud stack.

1/ The Semis

Behind the scenes, running the vast majority of AI workloads, is perhaps the biggest winner in genAI so far - NVIDIA.

It’s absolutely no surprise that the semiconductor layer is dominated by NVIDIA which has a GPU market share of more than 80%. NVIDIA is living the dream - rolling in $47.5B from data center revenue alone in the last four quarters. 

They’ve turned the saying “In a gold rush, sell shovels” into a reality, except their shovels are cutting-edge GPUs.

GPUs are the lifeblood of the AI revolution and NVIDIA is at the front and center of it. They’ve built strong moats around this business via decades of investment in the GPU architecture and a robust software ecosystem (CUDA). 

They have the best kind of problems a business can have. So much demand that you can't keep up with the supply. 

2/ The Cloud Infrastructure

Nearly everything in genAI passes through the cloud at some point. 

Whether for model providers/research labs running training workloads, hosting companies running inference/fine-tuning, or application companies doing some combination of both - FLOPS are the lifeblood of genAI.

Hyper-scalers like AWS, Azure and GCP, along with specialized inference clouds like Coreweave and Lambda, are cashing in big time. 

For the first time in a very long time, progress on the most disruptive computing technology is massively compute bound. 

Translation: If you’re in the cloud business, it’s time to pop the champagne.

3/ Foundation Models and The Applications

What we now call Generative AI wouldn’t exist without the brilliant research and engineering work done at places like Google, OpenAI, Anthropic and the likes. 

Yet the revenue associated with these companies is still relatively small compared to the usage and buzz.

However, that is slowly changing. As AI usage becomes more prominent, the P&L of the companies building foundation models is going to fatten.

History Repeats Itself

This life-cycle is not something new. This is what you would expect in a technology boom: the underlying physical infrastructure needs to be built first in order for software to be offered. 

In the late 1990s, as the internet boom was getting going, providers of things like modems and other telecoms gubbins, such as Cisco and Worldcom were the early winners. 

Fast forward to the mobile wave: first, semiconductors cashed in, followed by infrastructure, and finally, software. 

With AI, we are in the early phases of a platform shift where semis capture most of the value. As we build out the infrastructure, the application layer will capture a similarly high proportion of the value chain in due time. 

☄️ Asteroids ☄️

OpenAI announced this week that it’s removing Sky, one of the voices used by its new GPT-4o model, after users found it sounded eerily similar to Scarlett Johansson’s AI character in “Her.” 👧🗣️ 

Apple is set to debut practical AI features at WWDC 2024, like voice memo transcriptions and smart recaps for notifications. A partnership with OpenAI might integrate ChatGPT into iOS. 📱🤖

Elon Musk's AI startup, xAI, raised $6 billion in Series B funding, valuing it at $18 billion. Backers include Andreessen Horowitz and Sequoia. 🌐💰

⚒️ Trending Tools ⚒️

🔮 Rehance - AI copilot you can add to your SaaS

⚖️ Mentimeter - AI generated polls, surveys and quizzes

🧑‍🤝‍🧑 Replymind - Maximize Your Social Media Influence

📊 Forloop - No-code platform for external data automation

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