🐝 The Buzz This Week

• 🤖 Musk just raised $500M for xAI… or did he?

• 🍎 Apple’s Vision Pro shows early promise with pre-orders

• 🎙️ Top Discussions This Week

• 📈 Meta Reaches All-Time High, Breaking Slump

• 🗞️ What else you might’ve missed!

TOP STORY
🤖 Musk just raised $500M for xAI… or did he?

On Friday, Bloomberg reported that Elon has secured $500M of a $1B funding goal for his AI company xAI, but Elon is calling this ‘fake news’.

According to Bloomberg’s report from an unnamed source, xAI is discussing a valuation of $15B-$20B with terms expected to be finalized in the next couple of weeks.

With Elon denying the claims, I’m not sure how much weight to give to these reports, so let’s instead recap what we do know about xAI and whether it poses a real threat to Microsoft & OpenAI’s ChatGPT and Google’s Bard 👀

💔 Musk’s falling out with OpenAI

In February 2019, Elon left OpenAI (a company he co-founded) over disagreements about the company’s development, and also saying he needed to focus on Tesla & SpaceX.

Elon has frequently and publically criticized OpenAI since leaving, saying the start-up is effectively controlled by Microsoft.

🤖 Elon Unveils Grok and xAI

In November 2023, Elon unveiled Grok which he describes as a chatbot designed to ‘answer questions with a bit of wit and a rebellious streak’.

Many wrote off Grok as an unserious attempt designed to poke fun at ChatGPT, but some reports have said Grok excels in certain areas such as summarizing news in real-time, and that it poses a serious threat to ChatGPT.

🤑 Elon Seeks to Raise $1B for xAI

While the ‘securing $500M’ part of the Bloomberg report may or may not be fake news, the fact that Elon is raising $1B for the start-up is true, with an SEC filing in December clearly stating the $1B target and that ~$134M had already been secured.

💰 X investors will own 25%

Elon has stated that X Corp investors will own 25% of the new xAI company and that members of X Premium+ will get access to the Grok chatbot.

😳 Elon’s AI Reservations

Elon has repeatedly expressed deep reservations about AI technology, being among a group of researchers who called for a pause on the training of AI models in March 2023.

Elon was also suspicious of the ousting of Sam Altman from OpenAI saying he “doesn’t think it was trivial” and might have something to do with the dangers of AI.

🤯 Spread thin?

Musk now oversees 6 different companies including Tesla, SpaceX, X, Neuralink, Boring Co, and xAI. I have a hard enough time overseeing one… 😅

Do you think xAI is a serious threat to ChatGPT or Bard? Join the community discussion here!

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BIG TECH
🍎 Apple’s Vision Pro shows early promise with pre-orders

Apple stock is up 3% this week after the company began taking pre-orders for the highly anticipated Vision Pro headset this Friday. The pre-sale has reportedly already sold out.

At $3,499 USD a set, the headset isn’t cheap, but still isn’t Apple’s most expensive product to date (that award goes to the ‘gold’ Apple watch which sold for as high as $17,000 🤯)

👎 Some analysts say the Vision Pro will be insignificant

Analysts at UBS Group expect Apple to ship 300,000 - 400,000 units this year. While that equates to $1.4B in revenue, compared to Apple’s $383B 2023 revenue, it’s a drop in the bucket.

👍 Bank of America Upgrades Apple from Neutral to Buy

Others are more bullish on the new device, with the Bank of America upgrading Apple from a neutral rating to a buy rating, saying that the product “could surpass iPad revenue over time”.

BofA analyst Wamsi Mohan also believes that AI will be a strong driver for the business, as the need for the latest hardware to run GenAI features will drive a faster iPhone upgrade cycle.

🚫 Falling revenue & Apple Watch ban

Despite Bank of America’s rating, Wall Street is overall more cautious about Apple compared to the other megacaps, with only 62% of analysts rating it as a buy, compared to 85% for Microsoft, Amazon, Alphabet, Nvidia, and Meta.

This is likely driven by the company’s four-quarter streak of revenue declines, its longest in more than two decades.

The Apple Watch, which makes up ~10% of Apple’s revenue, is also currently banned in the US over a patent dispute.

👑 Apple loses its crown to Microsoft

With Apple losing its crown as the most valuable company to Microsoft last Friday, eyes will be on the Vision Pro to bring Apple back to the #1 spot.

FROM THE BLOSSOM COMMUNITY
🎙️ Top Discussions This Week

MORE BIG TECH
📈 Meta Reaches All-Time High, Breaking Slump

From Sept 2021 to Nov 2022 Meta plummeted, losing 76% of its value while the overall market fell only ~16%.

Now, 14 months later, Meta has recovered all these losses and some, with a 167% return over the past year and sitting at a new all-time high.

What factors have led to this rebound?

🔪 The Year of Efficiency

In 2023, Zuck ushered in the ‘year of efficiency’ for Meta. Between Nov 2022 and May 2023, the company slashed over 20,000 jobs in four rounds of layoffs, decreasing the total number of employees by over 20%.

Meta also flattened the management system and cut projects and infrastructure costs.

😅 Decreased focus on… well… the META-verse

In October 2021, Facebook officially changed its name to Meta, saying the metaverse was the future of the company, but after losing around $46.5B on his metaverse ambitions, the metaverse has gone from being Zuck’s obsession to rarely being mentioned.

Many of the layoffs in the ‘year of efficiency’ hit the metaverse-focused Reality Labs division as Meta reigned back in spending on metaverse pursuits.

🤖 Bye-bye Metaverse, Hello AI

So what took the metaverse’s place? You guessed it, AI.

AI-recommended content has reportedly driven a 7% increase in engagement on Meta’s platform and has also improved the targeting capability of its core advertising business.

Zuck says AI is being built "into every one of Meta’s products."

Let’s hope this doesn’t mean another name change is on the horizon… (AI-Book? AI-Gram?) 😅

🗞️ What else you might’ve missed!

• 📈 The S&P 500 closed at an all-time high on Friday, showcasing a surprisingly stable economy. The index is up 20% over the past year and up 82% over the past 5 years.

• 🛫 Spirit Airlines stock rose 17% on Friday after raising Q4 guidance, recovering from losses after a proposed merger with JetBlue was blocked. The stock is still down 56% in the past week.

• 🤖 iRobot stock is down 44% this week after Amazon’s proposed $1.4B buyout was blocked by the EU anti-trust regulator.

• 🤑 PayPal stock is up over 6% this week despite early pessimism on Tuesday when Mizuho analyst downgraded the stock. The gains were driven by a mysterious ‘innovation’ to be announced next Thursday.