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:

• Tesla’s Low Battery 🪫

• GenAI Valuations 💥

• Asteroids ☄️

• Trending Tools ⚒️ 

Tesla’s Low Battery 🪫

Being No. 1 isn’t all it’s cracked out to be. 

Tesla wrangled the crown of the world’s top EV seller away from China’s BYD this quarter, but it’s not taking any victory laps. Why?

Just like a Tesla’s battery in the cold Boston winter, demand for the company’s vehicles appears to be running much lower than expected in Q1 2024.

The company reported deliveries of ~387K vehicles down 8.5% QoQ. Their production numbers weren’t too shiny as well at ~433K units, falling much behind Wall Street’s expectations of 453K units.

That’s not even the worst part. Analysts had been expecting rock bottom numbers, and somehow, Tesla’s numbers managed to come in even lower than that. 

1/ Price Cuts

Tesla has been on a price cutting spree since last year. The company is ready to sacrifice margins by driving up demand which apparently hasn’t been working. So, they’ve hit themselves with a double-whammy with this one.

2/ Losing China

China is the largest global market for EV and times haven’t been easy for Tesla there. BYD continues to gain market share in the country and it might face stiff competition ahead with entrants like Xiaomi and Huawei thinking about entering the market. 

GenAI Valuations 💥

A HUGE flood of cash is pouring into generative AI startups like its raining dollar bills. This has naturally led to a surge in AI startup valuations. 

Some of the hottest genAI startups have valuations that are more than 100x their forward-looking revenue.

While these are big multiples, VCs are betting on the growth potential of these companies in the white hot market. 

The speed of AI adoption has been lightning quick for both consumers and enterprises. This has led to a focus on customer adoption and real revenue for these startups to justify their lofty valuations. 

Private LLM leaders - OpenAI and Anthropic have grown revenue rapidly in the last year by selling subscriptions to their chatbots and API access to their models. 

Survival of the Fittest

While some startups are carving out their niche in specific industries like Harvey for Law, most of the big bucks are flowing towards companies building Foundation Models like OpenAI, Anthropic and Inflection.

For these companies, it’s a race to the bottom of the ocean. They have to optimally burn billions of dollars to build the biggest, bestest models on the market and then offer them at the cheapest rates. 

The race to monetize is heating up, and some companies are starting the sweat under the pressure of finding a viable business model. 

Last month, Satya Nadella essentially acqui-hired Mustafa Suleyman and members of the Inflection AI team after the company struggled to commercialize its consumer chatbot. 

Microsoft paid Inflection roughly $650M to license its models, including $30M for Inflection to release Microsoft from any legal claims for the talent poaching. 

This move by Microsoft is a clever way to sidestep the intense regulatory scrutiny that Big Tech has been facing in recent times for M&A. 

Hiring away talent without actually buying the company avoids that whole kerfuffle. This obviously only works when talent is what you want, and not the underlying business.

Inflection’s pivot is a reminder that not every player in the AI game will come out on top, even with an A-list engineering team. 

☄️ Asteroids ☄️

Vana's co-founders, leveraging their tech and legal expertise, have launched a platform that empowers users to pool personal data like chats and photos for AI training, while retaining ownership. 🤖💡

Meta is experimenting with embedding its AI technology in Instagram's search features to enhance content discovery and user interaction, aiming to boost functionality and compete with platforms like TikTok. 🌐🤳✨

The Humane AI Pin, priced at $700, stirs up more questions than answers, showcasing the complexities of layering new technologies. 🤔💡

⚒️ Trending Tools ⚒️

📸 Stampede - The Instagram co-pilot for creators and influencers

💪 Indielogs - Stand out as a solopreneur and build a unique brand

📫️ Breezemail - Categorize your emails with AI

📰 Recommended Reading 📰

AI Jane: Artificial intelligence investment journalist building an easy to read ai investing email newsletter. Get smarter about investing in ai in 5 minutes.

The Aurorean: This newsletter scours 100+ sources so you don’t have to. The Aurorean is your guide to discover the essential news, research, beauty and humor in science every week.

The EV Universe: Keep up with the electric vehicle industry.

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