Tech startups are dropping like flies

Hello. Google's defeat in the Epic Games antitrust lawsuit reveals shady dealings and anticompetitive practices, underscoring a stark contrast with Apple's closed ecosystem and sparking broader questions about Google's legal challenges and industry impact.

— James Xu-Johnson

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Some AI startups find the money’s no longer so easy

The funding landscape for AI startups is shifting, with some facing challenges in securing investments. This piece explores the nuanced journey, citing Liquid AI's funding experience and the overarching investor concerns tied to heavyweights like Meta Platforms and OpenAI.

Liquid AI's funding reality: Liquid AI, known for its real-time learning AI model, aimed for a $100 million funding but secured $37.6 million. Investor caution around unproven tech is evident.

Changing investment dynamics: Quick funding for AI startups is no longer a given. Founders now grapple with a more discerning environment, necessitating a compelling long-term value proposition.

Funding pause and industry competition: Startups like Conjecture pause fundraising due to rising concerns about industry giants like Meta Platforms. Investors navigate a cautious path amid competition and cost considerations.

In the evolving landscape, AI startups adapt strategies to secure funding amidst changing investor sentiments and heightened industry competition. The AI sector, despite challenges, remains a key player in the broader funding market transformation.

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Gaming: Disney dives into gaming collaborations for iconic franchises, succeeding with titles like Marvel's Spider-Man 2, dismissing EA acquisition rumors, and navigating challenges in external partnerships and strategic releases.

911: Teslas will be able to automatically call 911 if you get in a crash. The Tesla 2023 Holiday Update will also add features like Apple Podcasts and multi-stop trip planning via the app.

Finsta: Instagram finstas may turn into a new product called ‘flipside,’ meant only for close friends.

Tech startups are dropping like flies

The startup landscape is in freefall, marked by what's being called a "startup Mass Extinction Event." SmileDirectClub, once a high-flying $8.9 billion disruptor, is the latest casualty, folding just three months after filing for Chapter 11 bankruptcy. This year, over 3,200 US startups, collectively hauling $27.2 billion, have met their demise.

Startup meltdown parade: WeWork, once an $11 billion titan, is bankrupt. Hopin, riding the virtual events wave at $7.6 billion, sold its core for a mere $15 million. Bird, once valued at $1 billion, now lingers at $7 million.

Interest rates bite back: Blame it on soaring interest rates, hitting a 22-year high. The Federal Reserve's move has made capital a rare commodity, pushing risk-averse investors away and leaving startups stranded without funding in 2023.

Fading VC golden age: The golden era of venture capital, fueled by low interest rates and mobile internet growth, is fading fast. US startup investments surged eightfold from 2012 to 2022, hitting $344 billion. But the party's over, leaving startups grappling with scarcity.

For founders in survival mode, AI might be the saving grace. Over 25% of this year's US startup investments are funneling into artificial intelligence. With funding for AI startups doubling from 2022, adaptability and market savvy may spell survival for the next startup wave.

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