Tech Charges Higher and Adobe Misses the Mark | Bloomberg Technology
14 Sep 2024 (4 days ago)
Stock Market Performance
- The NASDAQ 100 experienced its most successful week of the year, recovering from the previous week's losses and rising by 5.8% due to a surge in chip stocks.
- Uber's stock increased by 4.9% following the announcement of an expanded partnership with Waymo to introduce driverless ride-hailing services in Austin and Atlanta.
Adobe's AI Strategy
- Despite reporting positive third-quarter results, Adobe's stock plummeted by 8% due to a disappointing forecast that revealed slower-than-expected revenue growth from AI products.
- Adobe is anticipated to use a credit-based system for their artificial intelligence products, with more resource-intensive models like video potentially having different monetization methods.
- Adobe, while acknowledging the high cost of artificial intelligence, believes their diversified business model allows them to invest in AI development and maintain user accessibility without immediately raising prices.
Starlink's Expansion
- United Airlines has partnered with Starlink to provide free in-flight Wi-Fi, marking a significant deal for Starlink as it demonstrates their capacity to handle large airline fleets.
- Starlink has seen success in increasing individual subscribers and securing maritime deals, but outfitting airplanes for in-flight Wi-Fi is a slower process.
Amazon's Investments
- Amazon is investing $2 billion to increase the average pay for its Delivery Service Partner program drivers to $22 per hour, potentially in response to pressure from labor groups like the Teamsters.
- While Amazon is investing in artificial intelligence, the company is also hiring more seasonal workers as its delivery business grows, demonstrating the continued need for a large workforce.
World Liberty Cryptocurrency Controversy
- World Liberty is a new cryptocurrency project that has drawn criticism for its resemblance to the Dough project, which experienced financial losses due to a hack.
- Concerns have been raised about World Liberty's structure, particularly the allocation of 70% of tokens to insiders, leading some to perceive it as a potential "cash grab."
- Despite endorsing cryptocurrency and pledging to ease regulations, Donald Trump's involvement in World Liberty has sparked debate, with some questioning his motivations and the project's legitimacy.
Market Trends
- The markets have been higher for five straight trading days, with the NASDAQ 100 up by 0.4%. There is speculation that the Federal Reserve might cut rates by 50 basis points as soon as September.
- Chip stocks have recovered from last week's panic selling, with all names trading in green and showing significant gains over the past five days.
- Adobe met expectations for its fiscal third quarter but its forecast was not well-received, leading to a drop in its stock. This is similar to trends seen with companies like NVIDIA and Broadcom.
Fei-Fei Li's World Labs
- AI pioneer Fei-Fei Li has raised $200 million for a new startup called World Labs, which aims to build software that uses images and other data to make decisions about the three-dimensional world, creating what they call large world models.
- Fei-Fei Li discussed the challenges of raising funds as an academic entering the private sector and emphasized the difficulty of developing spatial intelligence technology.
- Spatial intelligence is the human ability to understand, reason, generate, and interact in the 3D world, a capability evolved over millions of years.
- Fei-Fei Li explained that significant progress has been made in AI, particularly in understanding and generating 2D images from text prompts, but the next frontier is integrating this into 3D, which is a complex challenge.
- The foundational technology of spatial intelligence has wide-ranging implications, including for creators, designers, builders, robotics, manufacturing, and augmented and virtual reality.
- Fei-Fei Li believes that a robust ecosystem necessitates upstream, fundamental research, highlighting the crucial role of both industry drives and startups in tackling complex problems.
- Li views her work on ImageNet as an intellectual continuation leading to the exploration of spatial intelligence, emphasizing its significance as the next frontier in AI.
- Li emphasizes the importance of public sector investment in AI research, stating that seminal works like ImageNet, Convolutional Neural Networks, and Transformers originated from public sector contributions.
Venture Capital and Private Equity Trends
- Over the past year, venture capital and private real estate funds have struggled to raise money.
- Conversely, private equity secondaries, infrastructure (especially in decarbonization), and traditional natural resources have seen success in fundraising.
- Impact, a firm focused on funding female CEOs, has raised $250 million for its latest fund, with significant investment coming from university endowments, foundations, and individual philanthropists.
- Female-founded companies are performing well, but still face challenges in exiting through IPOs or M&A.
- There's a reported pushback against funds focused on minority founders, despite data suggesting diverse teams outperform.
- Despite female-founded companies receiving only 2% of VC funding, there's optimism for change as institutional investors recognize the opportunity.