🤯Microsoft devours another AI company

ALSO: Stability’s CEO abandons ship

Estimated Read Time: 5 minutes

Microsoft just won’t stop, will it? First the OpenAI mess. Now an anti-trust case. Then they grab another AI company (sort of) in one of the most peculiar deals we’ve seen in years. To make matters stranger, Stability’s CEO (the company which makes Stable Diffusion) just stepped down partly because he believes too few companies control too much of the AI space.

• Microsoft snaps up another AI company.

• Someone built an $880 million supercomputer.

• Stability’s CEO leaves the company.

• The UN passed the world’s first AI laws.

🤯Microsoft hires Inflection founders while striking $650M deal

What happened: Microsoft just scooped up most of Inflection’s head staff while simultaneously striking a $650 million deal with the company. The hires include Mustafa Suleyman and Karén Simonyan, co-founders of Inflection AI. The deal is one of the strangest in some time.

The details: 

• The $650M deal allows Microsoft to use Inflection's models and hire most of the startup's staff (including the co-founders).

• Mustafa Suleyman now leads a new team called Microsoft AI.

• Karén Simonyan joins as the chief scientist.

• Microsoft’s cloud and AI services are about to advance even further beyond lagging companies like Apple.

• Microsoft led a $1.3 billion funding in Inflection AI last year.

• The move could raise some antitrust issues, which Microsoft has been battling for over a year.

Why it matters: This is a massive (and strange) deal with a lot of money changing hands. It’s also concerning because Microsoft has even more control over AI. While Inflection’s AI never reached the level of ChatGPT, this is one more competitor absorbed by a large corporation. Open source AI is starting to seem more and more important for the future.

And Microsoft is facing multiple anti-trust suits across multiple industries, including a major anti-trust case in the US. It’s almost as if… they’re not supposed to keep absorbing more companies. 🤔

Note: They’ve recently acquired Activision, a videogame company, which the EU investigated as an antitrust case.

As of 03.23.2024 market close.

Inflection AI builds a $880 million supercomputer. The groundbreaking computer is equipped with 22,000 NVIDIA H100 AI GPU. That’s a lot of processing power. And it comes into light as Microsoft scoops up Inflection’s founders and partners to use their AI tech. Elon Musk commented that supercomputers like these are inevitable in the AI industry, and you’ll see more of them very soon.

Fun Fact: It costed Nvidia over $10B to R&D their latest line of GPU chips. The amount of money getting thrown around is laughable.

Reddit launched their IPO, which climbed 48% to $50.44 on its first day. This brought its fully diluted market capitalization to $9.5 billion, close to the company’s $10B 2021 valuation. S.I. Newhouse made over $2.1B from the windfall on that day. This comes after Reddit made deals with AI companies to allow API access to train AI models on Reddit’s (filthy) forums. Needless to say this is a stock worth watching out for.

😧Stability’s CEO steps down

What happened: Emad Mostaque is stepping down as CEO of Stability AI and leaving the board. Stability AI are the makers of the free and open-source image and video generators of the same name. His cited reason is to pursue “decentralized AI”.

The details:

• Mostaque says his reason is, “You’re not going to beat centralized AI with more centralized AI.” This refers to the ownership structure of top AI startups like OpenAI and Anthropic.

• He plans to pursue decentralized AI initiatives. 

• Mostaque thinks AI should be open and not just in the hands of a few big companies.

• Stability AI has lost more than half a dozen key talent in recent quarters.

• Shan Shan Wong and Christian Laforte are acting as temporary co-CEOs until a replacement is found.

• Stability had recently failed to raise funding and was spending $8M a month.

Why it matters: Stability has some of the best image generation tools available. While Stable Diffusion and its video counterpart are more difficult to use and setup, they remain free, open source, and entirely under the control of whoever uses them. Your images are not censored like Midjourney or DALLE. It’s disappointing to see so much trouble rock Stability’s boat. I can only hope they survive and come back stronger.

Further details: Mostaque appeared amused at the focus on “revenue” for AI companies, seeing as a new breakthough happens almost daily. He compared it to self driving cars, which he claims will create less economic value, and yet those cars have raised over $100B in funding without any financial return so far. So the focus on immediate revenue for generative AI is baffling.

🇫🇷UN (almost) fully passes AI regulations

What happened: The EU’s AI Act has been approved by European Parliament. The act needs one more approval set into place. The law will establish new AI regulations that will serve as a stepping stone for the rest of the world.

The details:

• While the law was universally praised by parliament, implementation is hotly debated.

• The main focus of the Act is risk management (for powerful AIs) and user consent.

• The law will restrict remote biometric identification by law enforcement to only specific circumstances.

• The law regulates facial recognition and when it’s allowed. 

• A final review is awaiting formal approval by the European Council.

Why it matters: This is the first big set of rules for AI in the world. When these laws fully pass, they will stand as an example of AI regulation for all countries moving forward.

These laws will also create additional burdens for AI companies in the EU that companies outside of the EU wouldn’t have to deal with.

🛠️Free ChatGPT Cheatsheet

Afraid AI will replace you? Trying to learn how to use the most popular AI tool in the world?

Keep this cheatsheet close to your chest and reference it when learning ChatGPT. (Save the image or print it out.)

👀Microsoft vs Apple

Two companies, two antitrust cases. But which one is worse?

Source: Midjourney

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