Substack announces Notes, its Twitter competitor

Top stories today: 1) Substack announces Notes, its Twitter competitor, 2) Sequoia and others are backing Chinese ChatGPTs, 3) Google CEO confirms AI chat coming to search, 4) YC W23 demo day starts, focuses on AI and SF, 5) Meta to launch generative AI for ads this year, and 6) startup funding drops 55% to $37B in Q1.

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Top stories today: 1) Substack announces Notes, its Twitter competitor, 2) Sequoia and others are backing Chinese ChatGPTs, 3) Google CEO confirms AI chat coming to search, 4) YC W23 demo day starts, focuses on AI and SF, 5) Meta to launch generative AI for ads this year, and 6) startup funding drops 55% to $37B in Q1.

0. Data and calendar

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

All times are ET.

1. Substack announces Notes, its Twitter competitor

You can share and comment on Notes

You can even "restack", i.e. retweet a quote

They claim the difference is that the content won't be clickbaity because there are no ads

  • "In legacy social networks, people get rewarded for creating content that goes viral within the context of the feed, regardless of whether or not people value it, locking readers in a perpetual scroll. Almost all the attendant financial rewards then go to the owner of the platform. By contrast, the lifeblood of a subscription network is the money paid to people who are doing worthy work within it. Here, people get rewarded for respecting the trust and attention of their audiences." - Substack

We expect this to be a niche product, just like Substack

  • Readers might know Substack well, but there are "only" 35M subscriptions on the platform, which likely means 10-20M MAU, vs 300M on Twitter and 3B on Meta. Twitter already has all intellectuals, CEOs, politicians, and other influential people posting there -- just as regarding Mastodon,, and now Substack, why would they switch? There must be a compelling reason, which we are not yet seeing.

Update: Substack's crowdfunding at $7M

2. Sequoia and other U.S. investors are backing Chinese answers to ChatGPT

  • "The American investors, including U.S. endowments, back key Chinese VC firms such as Sequoia Capital China, Matrix Partners China, Qiming Venture Partners and Hillhouse Capital Management that are striking local AI startup deals, which haven’t been previously reported. U.S. government officials have grown increasingly wary of such investments in Chinese AI as well as semiconductors because they could aid a geopolitical rival." - The Information

VC Keith Rabois argues this should be illegal

  • Founders Fund has tried to position itself as the pro-U.S. venture capital firm. (Rabois is a general partner in the Peter Thiel-led fund.)

A targeted ban on foreign investment in national security industries could work

  • The U.S. is not at war with China, Saudi Arabia, Qatar, UAE, etc. -- they might be adversaries, but not enemies (at least at this time).

  • Banning broad foreign investments to and from non-enemy countries does not seem wise, even if they are dictatorships or do not share Western values, as the West would have to curtail trade with most of the world. Even India, the new media darling, arrested its main opposition leader this past month.

  • The U.S. could do a targeted ban on foreign investments (from and to adversarial countries) in industries that affect national security: AI, weapons, etc. The trick is how to define national security interests in a way that does not excessively dampens economic growth or further create unnecessary tensions with these Eastern powers.

3. Google CEO: Chat AI coming to search

The Bard fail that led the market to realize that GOOG was behind MSFT in Chat AI.

  • Nothing too surprising, given Google has Bard: "Will people be able to ask questions to Google and engage with LLMs in the context of search? Absolutely.

  • He confirmed that Google Brain and DeepMind are working together, as we reported last week: "I expect a lot more, stronger collaboration, because some of these efforts will be more compute-intensive, so it makes sense to do it at a certain scale together." - WSJ

4. Y Combinator's W23 demo day starts; startups have an AI focus, are based in San Francisco

5. Meta to launch generative AI for ads this year

  • Generative AI team, created a "couple of months ago", should have the tech ready by Dec.: "[I] expect we'll start seeing some of them [commercialization of the tech] this year. We just created a new team, the generative AI team, a couple of months ago; they are very busy. It's probably the area that I'm spending the most time [in], as well as Mark Zuckerberg and [Chief Product Officer] Chris Cox." Bosworth believes Meta's artificial intelligence can improve an ad's effectiveness partly by telling the advertiser what tools to use in making it." - Nikkei interview with Meta CTO

Meta is also open-sourcing its image segmentation AI model

They are also releasing the model's dataset, which they claim is 6x larger than OpenImages v5

Read more: Meta.

6. Startup funding drops 55% YoY to $37B in Q1

Now back to 2020 levels:

  • "US startups raised $37 billion from venture capitalists in the first quarter of this year, the lowest amount in 13 consecutive quarters, according to data from research firm PitchBook and the National Venture Capital Association."

  • "Investors have reduced both the size and number of checks they write. The first quarter marked the lowest number of deals, fewer than 3,000, in more than five years." - Bloomberg

7. McCarthy: "We're never going to move a bill that just raises the debt ceiling"

  • Wall Street "should be concerned": McCarthy says he's "very concerned" about the debt ceiling, but Biden is refusing to meet, which may or may not be true.

  • His proposals were super vague, as usual: "build our economy", "put in work requirements", and "we can cap how fast government [spending can grow]". - Bloomberg

He met with Taiwan President but said he would be open to meeting Xi

Speaker's Office.

8. Tesla loses EV market share, but EV market continues to grow

  • Tesla's market share went from 72% to 54% in the U.S., since January 2022.

  • Electric vehicles (EVs) were 7.0% of new vehicle registrations in the U.S. in January 2023, from 4.1% the prior year.

  • 47 EV models available for sale in the U.S., at the end of 2022, from 33 the prior year.

  • Less than 1% of America's 279M cars are electric. - Axios

9. FTX 2.0 spends $32M in professional fees in February

  • Billionaire spending could take 10-20% of the FTX estate's assets, currently estimated at $6B in liquid assets and $5B in book value for illiquid assets. We expect professional spending to slow down, but to remain above $10M/month for the foreseeable future. Incredibly, that excludes ordinary corporate spending, such as employees, office space, etc.

  • The creditors' committee asked FTX to present progress on 9 items at the next court hearing on April 12. - @AFTXCreditorlegal filing on Kroll.

10. Other headlines


  • Google Play to require all apps let users delete their own data, following Apple.

  • Saudi Arabia acquires mobile game maker Scopely for $4.9B.

  • Twitter marks NPR as state-affiliated media, which is not exactly false.

  • Stripe publishes annual letter, says they processed $817B in 2022, +26%.

  • Tiger Global trying to sell VC stakes, invested at least $80M last year.

  • Tesla publishes Master Plan Part 3.

  • Sony to launch new Playstation handheld, codenamed Q Lite.

  • Brex CEO interview on the recent banking crisis.


  • IMF: U.S.-China tensions could cost the world 2% of GDP.

  • Blackrock to help govt. sell $114B in securities inherited from SVB and Signature.

  • Anthony Scaramucci: profile on him and his firm SkyBridge.


  • Binance turns down offer to acquire Justin Sun's stake in Huobi.

  • VitaDAO creating U.S. for-profit to get government grants for longevity research.

  • Arbitrum Foundation fiasco continues, showing the fragility of DAO structures.

  • All modern Macs have the Bitcoin whitepaper in them.

  • Microstrategy buys 1K more BTC, now have 140K; average price $29.8K.

  • SBF: 125 hour countdown to turning in his smartphone.

U.S. politics

  • Trump repeatedly told that he couldn't seize election machines, top officials testify to federal grand jury. (This is one of the two actually serious Trump criminal cases.)

  • Judge Merchan (Trump's Manhattan case) and family receive "dozens" of threats.

  • Pence will not fight order to testify to grand jury.

  • Dominion trial: judge said he could compel Rupert and Lachlan Murdoch to testify.

  • Grandson of Bob Kennedy files to run for President as a Democrat.


  • Ukraine "ready to talk" about giving up Crimea if counteroffensive is successful.

  • Macron and Xi to meet about Ukraine war.

  • Taiwan President meets McCarthy as China complains but is focused on Ukraine.

  • China to inspect ships in Taiwan Strait, could be path to blockade.

  • Poland promises 14 more MiG-29 fighter jets to Ukraine.

  • Saudi and Iranian Foreign Ministers meet in Beijing to discuss new ties.

  • WSJ reporter Evan Gershkovich to be officially declared as wrongfully detained.

  • Russian planes (97% of them Western) are not getting proper maintenance.

  • Gen. Milley surprised Israel by saying the U.S. would not allow Iran to have "fielded" nuclear weapons.

10. Interesting tweets, memes, and images

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