Moving forward with AI: Tips for startup founders...

Hello. Prophetic, a venture-backed startup founded earlier this year, wants to use a headpiece called ‘Halo’ to do coding work while dreaming… seriously!

— James Xu-Johnson

Moving forward with AI: Tips for startup founders

As we step into 2024, the AI landscape for startups is evolving rapidly. Navigating through the nuances of integrating AI, managing platform risks, and strategic positioning amidst industry shifts is crucial. Here are key insights for AI founders as they chart their course in this dynamic environment.

Building defensibility beyond integration: Startups claiming AI prowess face criticism for creating thin layers around existing technologies. To thrive in the OpenAI era, founders must go beyond mere integration, focusing on building defensible products that offer substantial AI value. This approach safeguards against platform risks and ensures a lasting market presence.

Strategic positioning amidst OpenAI's expansion: Startups must be cautious about relying on OpenAI's technology, considering the company's expanding product range. Similar to how Apple's growth impacted third-party apps, startups integrating OpenAI's tech may face challenges. To avoid being overshadowed, founders should strategically position their products away from the edges of OpenAI's expanding domain, ensuring resilience in a competitive landscape.

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3 top headlines 💬

Progression: As consulting giants and law firms embrace AI to streamline tasks traditionally assigned to junior staff, such as tax work and contract interpretation, the potential acceleration in career progression from hire to partner level could reshape the industry's time-honored model of subjecting junior employees to years of tedious work, marking a significant shift in professional services firms aiming to capitalize on the efficiency gains afforded by generative AI.

Virtual concerts: Kiss bids farewell to live performances but embraces digital immortality as George Lucas' Industrial Light & Magic crafts digital avatars, allowing the iconic rock band to perpetuate their legacy indefinitely, hinting at a future of virtual concerts and global performances.

Chatbots: Despite concerns during OpenAI's leadership crisis about the fate of its chatbot for financial advisers at Morgan Stanley, the AI tool, named AI @ Morgan Stanley Assistant, has seen a recent surge in usage—partly attributed to OpenAI's increased visibility in the news—though opinions on its efficacy within the company remain mixed, with some advisers finding it less useful than picking up the phone and consulting a human counterpart.

The rise of Joshua Kushner: How the young VC quietly built a $5.3 billion firm, Thrive Capital

He is close acquaintances with Sam Altman…The pair met in 2011: “He invests in a style that is close to what I do myself,” Altman says. “Josh makes high-conviction bets on high-quality companies and founders, and he doesn’t care too much about what other investors think. I feel a lot of camaraderie with that.”

Kushner’s investments into OpenAI…Thrive led a round in OpenAI, investing nearly $130 million at a $29 billion valuation. At the time, OpenAI was generating an annual revenue rate of about $50 million.

In October, Thrive agreed to lead another round of financing at a valuation almost three times higher—$86 billion—buying up employee shares in a deal called a “tender offer.”

One of the planet’s most financially successful under-40 entrepreneurs. Kushner has scaled his firm from an initial $40 million institutional fund in 2011 to a $3.3 billion eighth fund today. Earlier this year, he sold a 3.3% stake in Thrive to moguls valued Thrive at $5.3 billion

His immensely privileged background cannot be denied. There’s no denying the unique assets that Kushner inherited by virtue of pedigree. The family history has been a burden at times, leaving him little or no room for reputational error. But the opportunity to schmooze powerful people and persuade them to entrust you with their money is one most twentysomethings don’t get, no matter how smart or charismatic.

Sam Altman-backed chip startup $51 million deal with OpenAI

OpenAI signed a $51 million letter with chip developer Rain. A non-binding letter of intent agreed to spend the amount on the startup’s chips when they became available. 

Rain’s chips are inspired by the human brain. The company claims that these chips require less power than the traditional Nvidia graphics processing units commonly used in the industry, and will allow AI models to be customized, or “fine-tuned,” based on their surroundings in real time. Rain AI’s chips are not yet available for purchase.

OpenAI hopes to use the chips to reduce its data center costs. It also hopes to deploy its models in devices like phones and watches, the person said. The reason behind the deal has not been previously reported.

Investor Prosperity7, was recently forced by the U.S. government to sell its stake in the startup. Saudi Aramco-owned Prosperity7, sold due to concerns that intellectual property could leak to China given growing connections between China and Saudi Arabia, Bloomberg reported. 

Kick: Lucrative deals, controversy…

Step into the chaotic realm of Kick, the upstart livestreaming platform taking on Twitch's reign. With eye-catching contracts and a mere 5% earnings cut, Kick has swiftly amassed 21 million accounts. Yet, its loose content policies, featuring explicit material and controversial figures, cast a shadow over its meteoric rise.

Innovative splash in livestreaming: Kick disrupts the livestreaming narrative with audacious contracts and a modest 5% earnings cut, luring in a diverse mix of creators from mainstream to controversial.

Content unleashed: Kick's Wild West approach welcomes explicit content, gambling antics, and even figures banned elsewhere, sparking a debate between applauding freedom and condemning the platform for fostering risky content.

Navigating murky waters: Tied with the online casino Stake, Kick faces regulatory scrutiny. As it grapples with content moderation, questions linger about its dedication to responsible practices and compliance with global regulations.

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