Good morning. Everyone in tech is talking about OpenAI’s astonishing $6.6 billion fundraise, which got me wondering: What’s the largest-ever round in tech?
Leave it to the fine folks at PitchBook, who helped us with our inaugural Unicorn List in the go-go days of 2015, to track such things. (Back to 2006, anyway.)
The answer as of last year? Didi Global. The Chinese ride-hailing company raised $5.5 billion in 2017—or $7.1 billion, adjusted for inflation—four years before its IPO.
Things haven’t been so rosy for the company since, but hey, don’t stop believin’, right? —Andrew Nusca
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OpenAI raised $6.6 billion to save you
Oh the humanity. In February, OpenAI was valued at $80 billion. As of yesterday, it’s worth $157 billion. (Yes, that makes it a “hectocorn.”)
The maker of ChatGPT announced Wednesday that it had raised $6.6 billion at the nosebleed valuation in one of the largest venture funding rounds in history. (Elon Musk’s xAI raised $6 billion just four months ago.) The money is necessary, OpenAI explained, to carry out its sacred mission of ensuring “that artificial general intelligence benefits all of humanity.”
Inspiring words, to be sure. Especially when you consider the turbulent times that have defined the San Francisco startup lately. Less than a year ago, OpenAI CEO Sam Altman was booted by the board, only to make a near-immediate comeback. Since then, nearly all of OpenAI’s top executives, including CTO Mira Murati, have left the building.
Nearly half of its AGI safety team has left, too. And some staffers are complaining that the company’s most recent model, o1, was released prematurely. Also: The company is undergoing a major transition from a non-profit to for-profit business.
Investors seem to think it’s all just a bunch of noise, pouring in record capital anyway. Thrive Capital led the round, and other investors reportedly include Khosla Ventures, Altimeter Capital, Fidelity, SoftBank, and Abu Dhabi-based MGX, as well as chip giant Nvidia. —Jessica Mathews
Google is working on reasoning AI
We love a Big Tech arms race, and there’s certainly one underway between Google and Microsoft- and Nvidia-backed OpenAI.
Weeks after OpenAI released o1, a.k.a. “Strawberry,” its first model with reasoning capabilities, a new Bloomberg report says that “multiple teams” at Google are hard at work on artificial intelligence reasoning software. (Google declined to comment.)
Reasoning is the AI component that allows it to draw a logical conclusion and solve a complicated problem or make a considered decision. It’s one of the attributes in AI that makes it seem unnervingly human and the attribute typically missing in your favorite TikTok bloopers.
Reasoning also represents the next AI leap. Developers are using a technique called “chain of thought” prompting—here’s a detailed explanation of it from IBM Fellow Jerry Cuomo if you’re interested—to break down complex deductions into a series of smaller steps, approximating the way humans draw conclusions. You need not be a logician to see the commercial appeal.
Will OpenAI or Google triumph? I asked a rudimentary reasoning tool from my youth. Its response: “Ask again later.” —AN
Apple’s budget phone will get a facelift
Not all buttons are created equal. The fourth generation of Apple’s budget-friendly phone model, iPhone SE, will drop the home button and add Face ID and Apple Intelligence capabilities, Bloomberg’s Mark Gurman reports. The new phone is expected for release in early 2025.
Apple’s entry-level smartphone was last updated in 2022. The iPhone SE had kept a home button even as most top models ditched it. (The final flagship model with one: iPhone 8 in 2017.) The upcoming budget model, Gurman reports, will drop such differentiation and find savings elsewhere. It will appear and authenticate, using Face ID, like an iPhone 14.
There are good reasons to unify the portfolio in this way: The iPhone SE 4 will reportedly be able to run the AI features that Apple unveiled earlier this year. Buyers of Apple’s new iPhone 16 and 16 Pro are, of course, still waiting. The full Apple Intelligence suite isn’t expected to hit devices until later this month. —Jenn Brice
Dueling chip priorities for the U.S. government
The Biden Administration is committing up to $100 million to the development of new, “sustainable” semiconductor materials and processes. The sum, announced Wednesday, is part of the administration’s two-year-old effort to increase domestic chip production.
The funds will go to universities and businesses partnering on ways to make chipmaking more environmentally-friendly within the next five years. As part of the research, AI may be tapped to help reduce the vast amount of chemicals and water used in chip production.
There would also no doubt be geopolitical benefits if the new materials reduce U.S. reliance on China-supplied rare earths. Wins all around, right?
However, the feel-good nature of the funding may conflict with a bipartisan bill President Biden signed on Wednesday that’s aimed at accelerating the construction of semiconductor plants receiving money from the so-called CHIPS Act.
Critics say the new law will weaken federal environmental reviews of those plants and lead to more pollution, not less. —David Meyer
How Amazon’s RTO mandate is playing out at Whole Foods
What’s it like defending a controversial decision that you didn’t have much time to plan for?
That’s what Whole Foods CEO Jason Buechel sounded like defending Amazon’s new controversial RTO mandate in an all-hands meeting with the grocer’s corporate employees this week, according to a recording reviewed by yours truly.
Buechel attempted to reassure employees that he wanted the shift from a hybrid structure to a full, in-office one to involve more “carrot” than “stick.” But he and his executive team were short on answers for what incentives might change the mind of those upset about the shift.
Instead, Whole Foods corporate workers will have to wait for recommendations from a special “office experience task force.” For real. —Jason Del Rey
More data
—Greed! Extortion! Abuse of power! The Automattic-WP Engine drama escalates further in a new lawsuit.
—R.I.P., World Wide Web Foundation. Tim Berners-Lee will carry on the fight against corporate control of the Internet through decentralization protocols.
—Google doubles down on Gmail summary cards. Can we maybe just let email be email?
—California’s new deepfakes law hits a speedbump. A federal judge blocks it two weeks after it became law.
—Amazon will increase its Prime Video ad load. Somewhere, a streaming pirate is heard saying: “The advertisements will continue until morale improves.”
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