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- Funding frenzy freefall
Funding frenzy freefall
PLUS: Startup founders fret over getting fired like Sam Altman
Wishu
January 09, 2024
Hello👋 In response to The New York Times' copyright lawsuit alleging OpenAI and Microsoft violated copyright law by training AI models on its content, OpenAI dismisses the claims, asserting the lawsuit lacks merit and defends its stance on fair use of publicly available data.
PRESENTED BY AWS
AWS Innovation with Experian
In this Innovation Ambassadors episode, Experian takes center stage as we delve into their dynamic shift to a cloud-first approach. Hosted by Sara Armstrong, this episode features insights from Marcio Felix Goncalves, Jo Kennedy, and Jesse Mulvogue of AWS.
Discover how Experian, in collaboration with the AWS Innovation team in Australia, transformed their strategy, adopting the working backwards methodology to amplify brand experiences for consumers through the AWS Cloud.
4 major headlines
💸 Vetamer Capital, a San Francisco-based investor in tech companies, founded just three years ago with $350 million, shuts down its public-equities hedge fund amid challenging market conditions.
🐦 Former Twitter CEO Parag Agrawal, ousted by Elon Musk after the latter's takeover of Twitter, has quietly secured $30 million in funding for his AI startup, which aims to develop software for LLM developers, according to The Information, with Khosla Ventures leading the funding round and Musk's $44 billion Twitter acquisition finalized in October 2022.
👀 Silicon Valley is blasting Carta for misusing customer information. Startup Linear is accusing Carta of soliciting investors with sensitive information.
🔐 Generative AI threatens KYC effectiveness, as open-source tools enable deepfake manipulation, potentially rendering identity verification obsolete in financial institutions and platforms.
Funding frenzy freefall: creator economy faces 58% drop in 2023
2023 dealt a harsh blow to the once-sizzling global creator economy as funding took a nosedive—plunging a gut-wrenching 58% to a mere $1.7 billion. The glittering allure that drew investors began to dim in the face of drying VC wells and a testing economic climate.
Cash crunch: The funding rollercoaster hit U.S. startups harder, plummeting a whopping 62% to $1.03 billion. A tale of high-fliers brought low by the scarcity of venture capital, with many grappling to secure a paying user base.
AI's silver lining: Amidst the gloom, artificial intelligence (AI) startups emerged as the unsung heroes, snagging over $324 million globally. Notable deals included Runway's $141 million Series C extension and Synthesia's $90 million Series C, proving AI's resilience in a tough financial landscape.
Startup survival dance: Survival instincts kicked in for many startups—36 opted for mergers or acquisitions, doubling the previous year's count. Another eight threw in the towel entirely, showcasing the harsh reality of the competitive market. Slow Ventures stood as the lone ranger, leading more than one startup deal in the challenging fourth quarter.
As the dust settles on 2023, the creator economy charts a new course, grappling with closures and consolidations. In this challenging terrain, AI and marketing startups stand tall, offering glimmers of innovation and resilience. The industry's ability to pivot and adapt will be the linchpin as it navigates the stormy seas of financial uncertainty.
X’s Grok chatbot has no reason to exist
Grok, the promised AI gem on the revamped X (formerly Twitter), set out to be the hip, humorous chatbot with its finger on the X-pulse. Yet, after a trial run, the big question lingers: Why does Grok even exist?
Muddled purpose: Grok's deep integration with X's interface proved more chaotic than constructive, leaving users wondering about its raison d'être in the crowded chatbot space.
Humor misfire: Marketed as the rebellious jester, Grok's attempts at humor fell flat, offering banal responses and forced jokes. In a world where Bard brings more laughs, Grok's comedic credentials are shaky.
Premium puzzles: Grok's premium status comes at a cost, but it fails to outshine free alternatives like Bing, Bard, and ChatGPT. Even its trump card, up-to-the-minute searches, sometimes leaves users feeling out of the loop.
In the X maze: As Grok grapples with its role within X, questions about its relevance persist. In the quest to be X's unique offering, Grok risks existing in a disconnected bubble, struggling to find its place alongside the evolving X platform.
Startup founders fret over getting fired like Sam Altman
The OpenAI whirlwind featuring Sam Altman's brief exit has sent tremors across startup circles. In response, founders are hastily reevaluating their defenses, determined to avoid an "Altmaning" of their own.
Altmaning jitters: Sam Altman's sudden departure jolted founders, highlighting the vulnerability even seasoned leaders face. The episode triggered a collective awareness of the need for safeguards against unexpected disruptions.
Strategic shields: Seeking counsel from Silicon Valley mentor Eric Ries, founders are exploring protective measures like supervoting shares and dual-class shares to secure control and shield long-term vision from potential board interference.
Founder response: Entrepreneurs such as Adam Laor (Sinatra) and Paul Yacoubian (Copy.ai) are actively pursuing new share classes to fortify their positions. Yacoubian's concerns extend beyond his company's stability to his own role as CEO, spurred by the OpenAI episode.
Founder voices:
Roger Beaman, ousted CEO in 2021, implements double-trigger clauses to avoid a repeat experience.
Max Bregman (BreatheEV) emphasizes the importance of trustworthy board members, contemplating an ethics board for added security.
Altman's saga acts as a catalyst, propelling founders to fortify both structural and nuanced defenses. Mission pledges and ethics boards emerge as tools in this evolving dialogue, reshaping the startup landscape and its approach to control in an unpredictable entrepreneurial journey.
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