OpenAI could lose as much as $5B in 2024

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Bay Area Times
July 25, 2024

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Top stories today:

  1. OpenAI could lose as much as $5B in 2024
  2. Mistral Large 2 (123B) underperforms Llama 3.1 (70B) on reasoning
  3. Bing Generative Search launches, coming after Google, Perplexity
  4. CrowdStrike outage cost Fortune 500 $5.4B

0. Data and calendar

All values as of 6 AM ET / 3 AM PT, other than S&P500 and NASDAQ close (4 PM ET / 1 PM PT).

All times are ET.

CORRECTION: Yesterday’s calendar had GDP and Durable goods orders for Wed., rather than today.

1. OpenAI could lose as much as $5B in 2024

  • Gross margin could be ~0% with server costs at or above revenue.

  • Currently unclear how OpenAI can differentiate vs. Meta’s free and open weights Llama 3.1.

  • Likely will need to fundraise over the next 12 months.

2. Mistral Large 2 (123B) underperforms Llama 3.1 (70B) on reasoning, at frontier on coding

Mistral Large’s MMLU of 84% is below the 86% of Llama 3.1 (70B) and the 89% of Llama 3.1 (405B) and GPT-4o:

  • Free only for non-commercial use, unlike Meta’s Llama 3.1, which is free for commercial use too.

  • Open weights.

Mistral Large 2 is particularly good at coding, but still slightly underperforms GPT-4o at that

  • Our view: Mistral continues to lag behind Meta on open weights, and Meta’s larger bankroll and distribution should keep it that way.

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4. Bing Generative Search launches, coming after Google, Perplexity

It looks like a beautified version of Google’s AI Overviews, which have been deprioritized by Google, likely after poor receptivity:

  • “Small percentage of user queries” will be seeing this new interface.

  • “Early data indicates that this experience maintains the number of clicks to websites and supports a healthy web ecosystem.”

5. CrowdStrike outage cost Fortune 500 $5.4B, mostly in health, banking, airlines

6. Majority of Copilot testers using it with <20% of employees

  • Employee training and corporate data clean up are required for broad implementation.

  • Small productivity effects so far.

7. Interesting videos, posts, and memes

8. Other headlines

AI

  • Stable Video 4D launched by Stability AI, still not ready for prime time.

  • SK Hynix’s revenue +125% to $11.9B in Q2, $4.0B in operating profits.

  • Reddit unsearchable in non-Google search engines.

  • Athyna: hire incredible global talent with up to 80% savings vs. U.S. hires.*

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Tech

  • OneStream stock +34% after raising $490M in IPO.

  • Apple Maps launches on web in public beta.

  • IBM’s revenue +2% to $15.8B in Q2, with AI consulting growing.

  • Vanta raises $150M at $2.4B for compliance.

  • Revolut gets UK banking license after 3-year struggle.

  • iPhone torrenting apps now available in EU.

  • Open Source CEO: learn how to be a leader and outperform the competition, with this free newsletter.*

  • Sidebar is a personal board of advisors for the next generation of leaders.*

  • Mercury simplifies your financial workflows.*

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Tech & law

  • U.S. warns tech startups on risks of investments from foreign adversaries.

Biotech

Business

  • NBA signs $77B broadcasting deal with ESPN, NBCU, Amazon.

  • Bill Ackman aims to raise $25B for Pershing Square USA next week.

  • S&P 500 -2.3%, worst daily performance since 2022.

  • Rupert Murdoch’s plan to give control to son Lachlan triggers legal battle.

  • Lineage, logistics REIT, raises $4.4B in 2024’s largest IPO.

Crypto

  • ETH -8% after ETF launch in U.S.

  • Ferrari extends scheme to accept crypto to Europe, after U.S.

  • Proton releases self-custody bitcoin wallet.

  • tea Protocol: click to subscribe to tea's newsletter and learn more about how to get rewards for your open-source contributions.*

*Sponsored.

U.S. politics

  • Biden says he dropped out to unite nation, time for new generation.

  • Harris vetting ~12 possible VP candidates.

  • Trump shooter fired 8 shots from AR-15 rifle: FBI chief.

World

  • Netanyahu defends Gaza War in joint congressional speech.

  • Ukraine’s top diplomat meets Chinese counterpart in China.

  • Russia using Hong Kong companies to avert sanctions.

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