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  • A.I. Start-Ups Face a Rough Financial Reality Check

A.I. Start-Ups Face a Rough Financial Reality Check

Also: Financial Times signs licensing deal with OpenAI


Today's newsletter delves into the financial and strategic landscapes of AI technology across different sectors. We begin with a look at the sobering economic challenges facing AI startups such as Inflection AI and Stability AI, which struggle to match massive investments with sufficient revenue, echoing concerns over the long-term viability of such high-stake ventures. In contrast, the Financial Times has embarked on a promising partnership with OpenAI, aiming to enhance AI-driven journalistic tools and content reliability. On a global scale, Premji Invest is harnessing AI to refine its asset management strategies, enhancing its ability to identify lucrative investments. Meanwhile, South Korea's KT Corporation is exploiting AI innovations to redefine its media and content business strategies, aiming to lead in the competitive telecommunications industry. Additionally, the newsletter covers updates from the global AI safety summit, which faces challenges in advancing regulatory discussions, alongside sector-specific updates like Samsung's language expansion in Galaxy AI and venture capital movements exemplified by Exor's funding in British AI firm Jigsaw.


  • ⚠️ A.I. Start-Ups Face a Rough Financial Reality Check

  • 📃 Financial Times signs licensing deal with OpenAI

  • 💰 India tech tycoon’s family office bets on AI to prop US$10 billion fund

  • 📰 S.Korea’s KT to innovate media, content businesses with AI

  • 🌏 Second global AI safety summit faces tough questions, lower turnout

As the AI sector experiences a financial reckoning, several high-profile AI startups are struggling to balance exorbitant development costs with insufficient revenue streams, signaling a potential end to the initial AI boom. For instance, Inflection AI has ceased its original operations after failing to generate significant income despite a $1.5 billion investment. Similarly, Stability AI has seen layoffs and executive changes amidst financial strains, despite less costly technological developments compared to language models. Meanwhile, Anthropic is grappling with a substantial revenue deficit despite raising over $7 billion, relying heavily on partnerships with larger tech firms. Even OpenAI faces challenges in expanding its sales, notwithstanding a notable revenue of $1.6 billion last year. This situation reflects a broader industry trend where the massive financial input into AI technology, totaling $330 billion over three years, contrasts sharply with the practical revenue outcomes, raising concerns about the long-term business viability of these ventures.

The Financial Times has entered into a licensing agreement with OpenAI, granting the AI firm the rights to utilize its journalistic content. This partnership allows OpenAI to incorporate FT's articles into the responses provided by ChatGPT, offering users summaries, quotes, and direct links to the original articles, with clear attribution to FT. This collaboration not only enriches ChatGPT's responses with reputable sources but also aids FT in developing AI-driven tools and maintaining its commitment to quality journalism. This deal represents a growing trend of collaborations between AI entities and news organizations, aimed at enhancing the accuracy and reliability of AI outputs while ensuring fair compensation for the use of journalistic works.

Premji Invest, managed by software mogul Azim Premji's family office, is increasingly integrating AI into its operations, managing over US$10 billion in assets. The firm, a pioneer among Indian asset managers for employing AI tools in the private equity sphere, is also developing an AI quant model for public market investments. Premji Invest's use of AI enables it to analyze data from over 10,000 global companies across 600 parameters, enhancing its capability to spot promising investment opportunities and trends. This strategic use of AI not only boosts the firm's operational efficiency but also aligns with its investment focus on technology and financial services sectors, both in India and internationally.

South Korea's telecom leader, KT Corporation, is leveraging AI to drive innovation in its media and content sectors, aiming to become a market leader amid the saturated local telecommunications scene. The company recently introduced the Magic Platform, a business-to-business media solution that enhances video content production and analysis. This platform, available as a website, allows users without their own infrastructure to generate and enhance video content, including upgrading old footage to high-definition. KT's media segment is identified as one of its three core areas of focus, alongside telecommunications and AI itself.

The second global AI safety summit, held as a primarily virtual event co-hosted by Britain and South Korea, faced challenges including tough questions about AI's limitations and a notable reduction in attendance compared to its predecessor. The summit aimed to build on the broad agreements established at the first summit at Bletchley Park, but struggled to advance beyond those initial discussions, particularly on complex issues like copyright use, data scarcity, and AI's environmental impact. Key figures such as the EU's top tech regulators and representatives from major countries like Canada and the Netherlands opted out, reflecting a global hesitance towards rapid commitments in regulating AI technologies.

🛠️ AI tools updates

ChatGPT's new memory feature allows the AI to remember key facts and details about conversations with users, and then apply that information to future interactions. This means ChatGPT can learn a user's preferences, style, and background over time, leading to more personalized and efficient conversations. Users have control over the memories and can view, delete or clear them at any time. The feature is currently being rolled out to ChatGPT Plus users, with plans to expand to Team and Enterprise customers in the future.

Samsung has expanded the linguistic capabilities of its Galaxy AI by adding three new languages—Arabic, Indonesian, and Russian—and three dialects including Australian English, Cantonese, and Canadian French. This update, part of a broader initiative to democratize mobile AI technology, increases the total number of supported languages to sixteen. Future updates are set to introduce Romanian, Turkish, Dutch, Swedish, Traditional Chinese, and European Portuguese. Galaxy AI now offers enhanced features such as Live Translate for real-time voice and text translations, an Interpreter mode for translating live conversations, Chat Assist for generating context-aware conversational suggestions, Note Assist for creating AI-generated document templates, and Transcript Assist for transcribing and summarizing voice recordings.

💵 Venture Capital updates

Exor Ventures, owned by the Agnelli family which also holds a majority stake in Ferrari, is leading a £12 million funding round for British AI company Jigsaw. Founded by former lawyers Stephen Scanlan and Travis Leon, Jigsaw specializes in creating visual tools that simplify the presentation of complex legal and corporate data. The company, known for its innovative software that significantly speeds up data visualization compared to traditional methods like PowerPoint, serves major clients including top global law firms and big four accountancy firms.

🫡 Meme of the day

⭐️ Generative AI image of the day