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Nuclear energy stocks hit record highs on surging demand from AI

Also: Perplexity is reportedly looking to fundraise at an $8B valuation

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AI KATANA
October 20, 2024

Good morning! Today’s newsletter dives into some of the latest trends reshaping the AI landscape, from surging nuclear energy stocks fueled by AI demand to new AI startup ventures and significant funding rounds. Tech giants are increasingly turning to nuclear power to meet the energy demands of AI-driven data centers, while industry leaders like Mira Murati and companies such as Perplexity are making waves with new fundraising efforts. We also explore groundbreaking advancements like Meta’s new AI model that checks the work of other models, signaling further automation in the AI development process.

Sliced just for you:

  • 💥 Nuclear energy stocks hit record highs on surging demand from AI

  • 💼 Former OpenAI CTO Mira Murati is reportedly fundraising for a new AI startup

  • 🧠 Meta releases AI model that can check other AI models’ work

  • 📈 Perplexity is reportedly looking to fundraise at an $8B valuation

  • 💸 Investments in generative AI startups topped $3.9B in Q3 2024

  • 🤖 Anthropic CEO thinks AI may outsmart most humans by 2026

Nuclear energy stocks have surged to record highs due to increasing demand for reliable power from the AI sector, driven by landmark power supply deals with tech giants like Amazon and Google. These companies are investing in small modular reactors (SMRs), a newer generation of nuclear technology that promises to provide low-carbon energy to power data centers. Shares of developers like Oklo Inc and NuScale Power rose dramatically following these announcements, reflecting a broader nuclear resurgence after the Fukushima disaster had dampened interest. The growth of AI data centers, which require vast amounts of electricity, has spurred urgent demand for stable power sources, with the nuclear industry stepping in where renewables and battery solutions may fall short. While the support of big tech is a significant boost, there are still concerns about the risks associated with deploying untested reactor designs, potential delays, and regulatory hurdles. Nonetheless, the nuclear sector is seen as essential for meeting the rising energy demands of the AI boom while reducing reliance on fossil fuels.

Former OpenAI CTO Mira Murati is reportedly raising funds for a new AI startup, with the initial round potentially exceeding $100 million. Murati, who left OpenAI in September, aims to develop AI products based on proprietary models. Her departure follows a wave of leadership changes at OpenAI, where Murati played a key role in advancing the company’s AI systems, including ChatGPT. Before joining OpenAI, she held leadership positions at Tesla and Leap Motion. Her new venture comes at a time of heightened interest and competition in the AI space.

Meta has released a new AI model called the “Self-Taught Evaluator” that can assess the work of other AI models, offering a potential step toward reducing human involvement in the AI development process. This model uses a “chain of thought” technique, similar to methods employed by OpenAI, to improve the accuracy of AI responses in fields like science, coding, and math. Meta’s innovation allows AI-generated data to train the evaluator, eliminating the need for human input during the training phase. This advancement is seen as a crucial move toward building autonomous AI agents capable of learning from their own mistakes, potentially reducing the reliance on human feedback in AI training, which is often costly and inefficient. Other companies like Google and Anthropic are also exploring similar techniques, but Meta’s approach stands out for its public release of the model.

Perplexity, an AI-driven search engine, is reportedly in discussions to raise $500 million at a valuation of $8 billion, which would more than double its valuation from earlier this year. The company currently handles around 15 million queries daily and generates approximately $50 million in annual revenue. Perplexity uses an AI-powered chatbot interface to facilitate web searches but has faced criticism from news publishers over unauthorized web scraping. These fundraising talks come on the heels of OpenAI’s own $6.6 billion round, signaling heightened competition in the AI search space. Perplexity’s CEO has expressed a desire to collaborate with publishers amid ongoing concerns.

Investments in generative AI startups reached $3.9 billion in Q3 2024, across 206 deals, according to PitchBook. U.S.-based companies accounted for $2.9 billion of that total. Notable deals include Magic’s $320 million, Glean’s $260 million, and Hebbia’s $130 million. Despite concerns about the legal and ethical challenges surrounding generative AI, such as the use of copyrighted data, investors remain optimistic about its potential across industries. The growing demand for generative AI is driving significant power needs for data centers, prompting major tech firms like Microsoft and Google to invest in nuclear energy to manage the increased consumption. Generative AI’s long-term sustainability and environmental impact, particularly its reliance on energy-intensive infrastructure, remain points of contention, but the flow of venture capital into this sector shows no signs of slowing down.

Anthropic CEO Dario Amodei predicts that AI could surpass human intelligence in many areas as soon as 2026, potentially bringing revolutionary changes such as eliminating certain cancers, curing mental illnesses, and dramatically extending human lifespans. While optimistic about the benefits of AI, Amodei stresses the need to balance these with managing the associated risks. He believes that the rapid scaling of data and computing power could drive these advancements, although significant skepticism remains within the industry regarding the true capabilities of AI models. Despite these concerns, Amodei is confident that the exponential growth in AI development will continue, potentially unlocking unprecedented societal transformations within the next few years.

🛠️ AI tools updates

Google’s NotebookLM is designed as a virtual note-taking and research assistant, helping users better understand complex topics. Users can create notebooks by uploading up to 50 sources, such as PDFs, websites, and videos, and NotebookLM’s AI, powered by Gemini 1.5, synthesizes the information, allowing users to ask questions, connect ideas, and format content into different outputs like FAQs or study guides. One unique feature is the Audio Overview, which turns your sources into an engaging conversation between AI hosts. NotebookLM also provides tools for summarizing discussions and organizing insights, making it ideal for both professional and creative tasks. The platform ensures privacy by keeping users’ data private and not using it to train models.

💵 Venture Capital updates

Generative AI startups have attracted 40% of all venture capital investment in cloud companies, according to a report by Accel. This surge, amounting to $79.2 billion in funding for cloud firms across the U.S., Europe, and Israel, marks a 27% year-over-year increase, the first growth in three years. AI’s influence, particularly generative AI tools, is driving the resurgence in cloud investments. Leading the funding race are U.S. firms like OpenAI, Anthropic, and xAI, while European companies such as Wayve, Mistral, and Aleph Alpha also secured significant backing. The concentration of capital is heavily skewed toward firms developing foundational models, with the U.S. capturing 80% of global generative AI investment. This trend underscores AI’s pivotal role in reshaping cloud investment priorities.

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⭐️ Generative AI image of the day