Business
OpenAI Just Secured A Ton Of New Cash. Now It Needs To Wow Us
OpenAI might be the future of Silicon Valley, the next Google, the Great Disruptor, the slayer of late capitalist workplace tedium, etc.
However, as the business transitions from a nonprofit-led research lab to a for-profit AI powerhouse, now is a good time to examine OpenAI and its brilliant (if often tumultuous) leadership team. Because, if we believe OpenAI’s fundamental assumption that better-than-human artificial intelligence is unavoidable, and that it is the best brand to harness that potential, it’s worth pausing to ask the age-old business question: Really?!
Here is the deal: OpenAI, the startup behind ChatGPT, recently secured a $6.6 billion private investment round – the largest in Silicon Valley history — giving the fledgling company a $157 billion valuation, despite an uncertain route to profitability.
OpenAI Just Secured A Ton Of New Cash. Now It Needs To Wow Us
(For reference, public corporations with comparable valuations include Goldman Sachs and Pfizer.)
According to reports, OpenAI’s latest investors include major tech companies such as Microsoft (which has already invested more than $13 billion since 2019), Thrive Capital, Nvidia, Cathie Wood’s Ark Investment Management, and Japanese conglomerate SoftBank.
But it’s worth remembering that Apple was in talks to join that scrum, but it backed out at the last minute, according to The Wall Street Journal.
It was unclear why Apple, which did not respond to CNN’s request for comment, appeared to back out.
That being said, the iPhone maker does not engage in many strategic alliances.
But you don’t need an MBA to notice several red flags about OpenAI’s operations and the true worth of its technology.
According to the New York Times, the corporation appears to be spending significantly more money than it is coming in.
Let’s run some numbers:
OpenAI hopes to generate approximately $3.7 billion in revenue this year. (This revenue is mostly derived from ChatGPT premium subscriptions and the licensing of its technology to third-party developers.)
However, the Times estimates that it will incur costs of $5 billion.
(That’s not ideal, but it may not be a dealbreaker for a young, buzzy firm with big goals like OpenAI’s.)
Here’s where it gets a little wild:
Next year, OpenAI expects its income to more than triple to $11.6 billion. (To which I respond, with all due respect: Really?)
By 2029, it expects to generate $100 billion in revenue. This represents a more than 2,600% gain over the following five years. (Again: Seriously?!)
It’s unclear how, or if, OpenAI is striving to reduce its substantial cash burn. (The business declined to respond to The Times and CNN.)
When I asked Gil Luria, a managing director at D.A. Davidson, if my OpenAI pessimism was justified, he politely pushed back.
“The path from $0 in revenue to nearly $4 billion was clearly the fastest in history,” Mr. Luria added. “Nobody’s ever grown this fast at this scale, and they’re doing it again straight out of the gate with only the first few evolutions of their product set.”
Fair!
However, Luria stated that in order to reach $11 billion in revenue, “a lot of things have to go right, and very little can go wrong.”
What about that $100 billion prediction for 2029? “It’s completely unrealistic,” he admits. “It has nothing to do with reality.”
One approach for OpenAI to enhance its margins is to reduce costs. Even if it becomes extremely meticulous, the generative AI business faces an economic quandary: training and operating huge language models costs a lot of money, which is a structural cost that varies from prior tech booms, as CNBC reported last year.
In other words, the more people use ChatGPT, the more it costs to “compute,” as the business refers to it. Running these massive language models necessitates the use of numerous powerful semiconductors within massive data centers that consume a lot of electricity. It’s no surprise, however, that practically every major AI player wants to get their hands on good old-fashioned nuclear energy (as I discussed here earlier this week).
OpenAI’s challenges include more than just the economics of AI.
There’s also a Bravo-worthy soap opera going on with its founders, nearly all of whom have gone, and board of directors.
In 2015, CEO Sam Altman and ten others launched OpenAI as a nonprofit with the purpose of “building safe and beneficial artificial general intelligence for the benefit of humanity.”
OpenAI Just Secured A Ton Of New Cash. Now It Needs To Wow Us
Then it evolved into a hybrid: a for-profit firm led by a nonprofit board.
With 1,700 workers, it is now prepared to mainly abandon the nonprofit model in favor of a “public benefit corporation” — effectively a for-profit company with do-gooder intentions.
Several executives have left during this transition, raising concerns about Altman’s devotion to the firm’s initial objective in the face of, say, boatloads of cash.
What happens now? With new funding, OpenAI can focus on the next iteration of ChatGPT, which, according to Luria, is one of the Big Things that must go right for the company. Whatever OpenAI’s next product looks like, it must knock our socks off.
“If we’ve gone from a model that’s as smart as a high school student to GPT-4o being as smart as a PhD student, the next version must be getting us closer to a model that’s smarter than any human.” to make the investment worthwhile.”
SOURCE | CNN
Sonic the Hedgehog is dominating Christmas wish lists this year. The lovable blue hedgehog is back in the spotlight, from sonic the hedgehog toys and games to sonic the hedgehog coloring pages and movie hype.
Sonic-themed holiday merchandise is on fire, from quirky sweaters to action figures flying off shelves. Sonic the Hedgehog Christmas outfits for kids are selling out fast, making them a go-to gift option for festive fun.
Retailers have been quick to recognize Sonic’s holiday appeal. Special promotions and exclusive items, like the Sonic holiday t-shirts, are everywhere.
Everyone’s stocking up on Sonic merchandise, from big-box stores to boutique retailers.
Online shopping platforms are seeing a surge in searches for Sonic items. Whether it’s Sonic Christmas-themed tops or Sonic the Hedgehog coloring pages, Sonic the Hedgehog toys or Sonic and the Hedgehog 3, the demand is skyrocketing.
Retailers who tap into this trend are sure to see strong holiday sales.
Sonic has been around since the early 90s, but his popularity never wanes. With the release of Sonic 3, fans are more excited than ever.
Sonic the Hedgehog 4
Meanwhile, Paramount Pictures is preparing “Sonic the Hedgehog 4,” with the newest addition in the family-friendly genre set for a spring 2027 release.
The announcement comes as “Sonic 3” opens in theatres on Friday, estimated to gross $55 million to $60 million from 3,800 North American locations.
The sequel is shaping up to be a good holiday season blockbuster for Paramount, which explains the desire in future “Sonic” adventures. On the international front, the film will be released on Christmas Day in 52 markets.
On Rotten Tomatoes, critics gave “Sonic 3” an outstanding 87% fresh score.
The first two films grossed a total of $725.2 million at the global box office and generated over $180 million in global consumer expenditure through home entertainment rentals and digital purchases.
They also inspired a spinoff Paramount+ series, “Knuckles,” which premiered earlier this year.
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An Amazon strike has hit facilities in the United States in an effort by the Teamsters union to pressure the corporation for a labour agreement during a peak shopping season.
The Teamsters union told the Associated Press that Amazon delivery drivers at seven facilities in the United States walked off the job on Thursday after the firm failed to discuss a labour contract.
According to the union, Amazon employees in Teamsters union jackets were protesting at “hundreds” of additional Amazon facilities, which the union billed as the “largest strike” in US history involving the company.
The corporation, which employs over 800,000 people in its US delivery network, stated that its services will be unaffected.
It was unclear how many people, including members of Germany’s United Services Union, participated in Thursday’s demonstration. The Teamsters union reported that thousands of Amazon employees were implicated in the United States.
Amazon Strike at 10 Locations
Overall, the group claims to represent “nearly 10,000” Amazon strikers, having signed up thousands of people at roughly ten locations across the country, many of whom have joined in recent months.
The organization has claimed recognition from Amazon going on strike, claiming the firm illegally neglected its obligation to bargain collectively over salary and working conditions.
The Teamsters is a long-standing US union with nearly one million members. It is well-known for securing lucrative contracts for its members at companies like delivery behemoth UPS.
Most of the Teamsters’ Amazon campaigns have concerned drivers working for third-party delivery companies that partner with the tech behemoth.
Amazon denies that it is liable as an employer in those circumstances, which is a point of legal contention. In at least one case, labour officials have taken a preliminary stance in favour of the union.
Stalled Contract Negotiations
Amazon employees at a major warehouse on Staten Island in New York have also chosen to join the Teamsters. Their warehouse is the only Amazon facility in the United States where labour officials have formally recognized a union win.
However, the Amazon strike is because contract negotiations have not progressed since the 2022 vote. It was not one of the areas scheduled to go on strike on Thursday.
Amazon, one of the largest employers in the United States, has long received criticism for its working conditions and has been the target of activists seeking to gain traction among its employees.
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(VOR News) – Thousands of Amazon employees at various sites across the country were scheduled to go on strike on Thursday in an effort by the Teamsters union to pressure the retail behemoth to acknowledge its unionised workers in the United States.
The walkout is expected to concentrate on seven Amazon locations across the country during the holiday purchasing surge and may be the most significant union action against Amazon in the nation’s history.
The business announced on Thursday morning that there had been no effect on operations. It also stated that it is “continuing to concentrate on fulfilling customers’ holiday orders.”
The International Brotherhood of Teamsters maintains that it represents more than 10,000 Amazon employees and contractors in aviation centres, warehouses, and delivery centres.
Amazon has refused to acknowledge the union for many years.
The retail giant, which employs approximately 1.5 million individuals, excludes contractors and part-timers. A strike has been initiated by delivery couriers and warehouse employees at seven distinct locations in order to exert pressure on the company to negotiate a collective bargaining agreement that would encompass modifications to compensation, amenities, and working conditions.
Picketing was intended for New York, Atlanta, Los Angeles, San Francisco, and Skokie, Illinois.
Also, the Teamsters assert that they are establishing picket lines at “hundreds” of additional warehouses and delivery centres by encouraging non-unionized workers to picket under U.S. labour law, which protects workers’ ability to take collective action to further their interests.
“Amazon workers are exercising their power,” Randy Korgan stated to NPR.
“They now realise there is a pathway to take on a corporate giant like this – and that they hold the power.” Amazon responds by accusing the Teamsters of fabricating information regarding the strikes, asserting that the participants are “entirely” outsiders rather than employees or subcontractors of the corporation.
Amazon spokesperson Kelly Nantel stated that “the reality is that they were unable to secure sufficient support from our employees and partners and have invited external parties to harass and intimidate our team.” For more than a year, the Teamsters have been intentionally misleading the public by claiming to represent “thousands of employees and drivers.” They do not.
The Teamsters did not provide a specific duration for the strike; however, they informed NPR that it would extend beyond one day. Workers would receive $1,000 per week in strike money, as per the union.
Teamsters President Sean O’Brien issued a statement in which he stated, “If your package is delayed during the holidays, you can attribute it to Amazon’s insatiable greed.” We established a firm deadline for Amazon to attend the meeting and treat our members equitably. They disregarded it.
The Teamsters granted until December 15 to convene with its unionised employees and develop a collective bargaining agreement.
Amazon has opposed all unionisation efforts in court, asserting that unions were not advantageous to its employees and emphasising the compensation and benefits that the organisation currently provides.
Amazon has been accused of discriminatory labour practices on numerous occasions, including the termination of labour organisers. Furthermore, it has disputed its official status as a contract employer.
Teamsters organize Amazon delivery couriers and other employees.
In June, Amazon established its first unionised warehouse in Staten Island, New York, two years after making history by voting to join the fledgling Amazon Labour Union, which is also affiliated with the Teamsters.
The union is one of the most influential in the United States and Canada, with 1.3 million members. On Thursday, the German United Services Union declared that Amazon employees in Germany would participate in a strike in conjunction with their American counterparts.
In the past, Amazon has experienced demonstrations in Germany and Spain that were related to the holiday season in order to advocate for improved wages and working conditions.
“The holiday season has arrived.” Delivery is anticipated. Patricia Campos-Medina, the executive director of Cornell University’s Worker Institute, asserts that “this is the moment in which workers have control over the supply chain.”
The Teamsters have reported that Amazon’s profits have increased both during and after the pandemic. The corporation is currently valued at over $2.3 trillion, with net income of $15 billion in the most recent quarter alone. It is the second-largest private employer in the United States, following Walmart.
SOURCE: NPR
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