🤖 Microsoft GPT?

Wednesday, January 11, 2023 by Robinhood Snacks |
Microsoft has entered the chat (Jakub Porzycki/Getty Images)

Microsoft has entered the chat (Jakub Porzycki/Getty Images)

Microsoft has entered the chat (Jakub Porzycki/Getty Images)

Microsoft has entered the chat (Jakub Porzycki/Getty Images)

Yesterday’s Market Moves
Dow Jones
33,704 (+0.56%)
S&P 500
3,919 (+0.70%)
Nasdaq
10,743 (+1.01%)
Bitcoin
$17,434 (+1.49%)

Hey Snackers,

New thing to add to your LinkedIn: failure résumés. Venture-capital firms are showcasing their biggest portfolio L’s, like passing on Facebook and Google in the early days. Womp.

US stocks rose yesterday despite hawkish comments from Fed Chair Powell that suggested interest rates could stay higher for a while. Meanwhile, investors hope that tomorrow’s December consumer-prices report will show inflation continuing to cool.

GPT

Microsoft Word meets artificial intelligence… We’ve come a long way since Clippy. Microsoft’s Office Assistant used to be a cartoon paperclip — now it could be a sophisticated AI brain. Microsoft has been in talks to invest $10B in OpenAI, Semafor reported. OpenAI is the company behind genAI tools like ChatGPT and DALL-E, which generate articles and images from text prompts.

  • Excelling: ChatGPT went viral upon its release in November. OpenAI said 1M+ people signed up to test the chatbot in the first five days.

  • Power points: Microsoft would reportedly get to keep 75% of OpenAI’s profits until it recoups its investment. After that it would own a 49% stake in the company.

  • Outlook: The funding would value OpenAI at $29B, up from $20B in October. The deal could fall apart, but it’s apparently targeted to close by year’s end.

Microsoft’s edge… Microsoft invested $1B in OpenAI in 2019 — and also sells the cloud infrastructure that the tech runs on. According to founder Sam Altman, OpenAI spends a few cents in computing power each time someone uses ChatGPT. That goes straight into Microsoft’s pockets. By deepening its involvement with OpenAI’s tech, Microsoft would gain an edge over cloud titans like Amazon and Google. Also:

  • Search: Microsoft could incorporate ChatGPT’s chatbot or DALL-E’s image generator into its search engine, Bing, to better compete with Google.

  • Office: Microsoft could also include OpenAI’s tech in programs like Word and Outlook (think: using ChatGPT to help you write emails).

THE TAKEAWAY

Acquire (relationships) early… Right now OpenAI is still free to the public (though it charges developers for licenses). But one day it could disrupt Google’s search dominance and rake in billions. Microsoft got in early to build a dependent relationship, and it could reap the benefits. Still, OpenAI has fierce competition — and its commercial success is far from guaranteed.

Sick

Under the weather… US crypto exchange Coinbase said it's laying off 950 people. In his announcement, CEO Brian Armstrong called out "unscrupulous actors" in crypto (an apparent reference to SBF) and mentioned last year's struggling macro economy. It isn't the exchange's first big cut:

  • Cost cutting: As crypto winter set in and trading volume dried up, Coinbase shed 1K+ employees in June and 60 in November.

  • Cost pumping: Last week Coinbase was hit with a $50M fine from NY regulators and agreed to spend another $50M on its compliance programs (think: KYC).

Crypto’s cold season… Coinbase isn’t the only one sick with crypto contagion. Last year, the industry shed 26K+ roles. More recently, big players stumbled after FTX's November implosion. Crypto lender Genesis laid off 30% of staff this month, in its second round of cuts, and is now said to be considering bankruptcy. FYI: it also reportedly owes $900M to customers of crypto exchange Gemini. Meanwhile, crypto mega bank Silvergate cut 40% of its workers last week following an $8B+ bank run.

THE TAKEAWAY

Contagion comes in waves… When a big fish like FTX sinks, it can send ripples across the crypto pond. Those ripples aren't necessarily all felt at once, because it can take a while for other big fish to get hit by the wake. Coinbase’s Armstrong said there might be more contagion coming. But contagion's waves could ultimately leave the overall industry stronger — or more centralized — by washing out crypto's weaker players.

What else we’re Snackin’

  • #Ad: Meta says it’s banning gender-targeted ads for teens on Insta and Facebook as part of a broader effort to tighten policies after backlash over ads’ effects on young users’ mental health.
  • Primed: This month Amazon says it will widely roll out “Buy with Prime,” a feature that allows ecomm merchants outside Amazon to use its payment and delivery services (think: paying with Prime on your fave shoe site).
  • Bag: The grocery force is still strong: Safeway owner Albertsons (which agreed to sell itself to Kroger) notched another hearty quarter, with sales up 8.5% as consumers snapped up inflated food items.
  • Coinbust: A man was sentenced to prison in what’s believed to be crypto's first insider-trading case. Prosecutors said he profited from tips from his brother, who worked at Coinbase, about what coins the exchange planned to list.
  • RTO: Disney CEO Bob Iger cracked down on WFH, telling workers to be in the office four days a week. Hybrid work appears to be here to stay, with office occupancy still well below prepandemic levels.

Snack Fact of the Day

Climate disasters in the US racked up $165B in damages last year

Wednesday

  • Earnings expected from KB Homes, Shaw Communications

Authors of this Snacks own shares: of Amazon, Disney, Google, and Microsoft

ID: 2673435