Contrary Research Rundown #113
The emergence of a global bidding war for Bay Area AI talent, plus new memos on Skild AI and Runway.
This week it was reported that Mistral AI, a Paris-based AI startup that develops open-source foundation models, is setting up an office in Palo Alto. Mistral AI was in the news earlier this year for raising $645 million at a $6 billion valuation, just one year after raising its $113 million seed round at a $260 million valuation, making the company one of Europe’s most valuable startups.
The company currently has 100 people on staff, with 20 of them already in the Bay Area — many of whom joined within the last six months. In addition to the new office, one of Mistral AI’s three co-founders is reportedly considering a move to the Bay Area as well. The company’s expansion to the US is part of its push to hire AI scientists and engineers as it attempts to compete with companies like OpenAI and Anthropic for AI talent.
Mistral AI’s move marks the second significant European AI company to set up an office in Silicon Valley in recent months. 11x.AI, a formerly London-based company that raised a $50 million Series B at a $350 million valuation in September 2024, announced earlier that same month that it was relocating to the Bay Area, with the company’s head of growth commenting that “the engineering talent is just over here”.
It’s not just European companies that are entering the bidding war for Bay Area tech talent. Last week, it was reported that China’s biggest tech companies including Alibaba, ByteDance, and Meituan have recently been expanding their California offices. Alibaba has been actively recruiting an SF-based AI team and has reportedly approached engineers, product managers, and AI researchers from leading American AI companies with job offers. One former OpenAI researcher claimed to have been bombarded by messages from a number of Chinese tech companies.
These developments paint the picture of an emerging global AI talent arms race on the West Coast. Companies from all over the world are bidding for AI talent, and that talent remains disproportionately concentrated in Silicon Valley. According to an August report from SignalFIre, Silicon Valley has by far the greatest concentration of AI engineers in the US, with 35% of the country’s engineers who are in AI-related roles. Seattle, also on the West Coast, was second at 20%, with New York (10%) and Boston (5%) trailing far behind.
The consequences of AI talent concentration could be profound, ranging from the local economy of the Bay Area, which will likely continue to see tech salaries rise as a consequence of this bidding war, to the geopolitical balance of power. The attempt of US allies like France and the UK to keep pace with the US their AI capabilities may depend on the success of companies like Mistral AI in attracting Silicon Valley talent, while the same applies to US adversaries like China.
However, unlike European AI companies, Chinese tech companies like Alibaba are partially owned by the CCP. This means that any technological advances that result from Chinese employment of US tech talent could directly benefit a hostile foreign government, which is particularly concerning given the potential military applications of AI.
Skild AI is building a general-purpose brain for robots, aiming to create a flexible, scalable AI platform that enables robots to perform a variety of tasks across different environments. To learn more, read our full memo here and check out some open roles below:
Deep Learning Manipulation Engineer - Pittsburgh, PA or San Francisco, CA
Robotics Engineer, Deployment & Testing - Pittsburgh, PA, San Francisco, CA or Bengaluru, India
Runway is a web-based editor and generative video platform that allows for real-time collaboration and offers a growing suite of AI tools developed through its research arm, Runway Research. To learn more, read our full memo here and check out some open roles below:
Engineering Manager (Frontend) - New York, NY or Remote
Check out some standout roles from this week.
Weaviate | Remote - Software Engineer (for language clients), Product Support Engineer (APAC), Research Engineer, Senior Full Stack Engineer
Baseten | San Francisco, New York City, or Remote - Forward Deployed ML Engineer, Tech Lead Manager - Infrastructure Engineering, Digital and Growth Lead, Site Reliability Engineer
Material Security | Remote - Product Lead (Phishing Protection), Senior Software Engineer (Platform), Staff Software Engineer (Backend)
Alibaba’s Qwen team introduced a model with 32.5 billion parameters capable of processing prompts up to about 32K words which outperforms OpenAI's o1-preview and o1-mini reasoning models on logic and math benchmarks.
NASA selected SpaceX to launch the Dragonfly mission, a rotorcraft lander mission designed to explore Saturn's moon Titan as part of NASA’s New Frontiers Program. Scheduled for July 2028 to launch from Kennedy Space Center in Florida, the mission will study Titan's surface and search for clues about the origins of life using a SpaceX Falcon Heavy rocket.
OpenAI secured a $1.5 billion investment from SoftBank through a tender offer, allowing employees to sell shares. Employees will be able to decide if they want to participate in the tender offer until December 24. The deal is reportedly a result of Softbank CEO Masayoshi Son’s desire to increase his stake in the company.
Neuralink, Elon Musk's brain-computer interface company, launched a study to test its brain implant's ability to control a robotic arm using thought alone. The trial aims to help individuals with paralysis perform everyday tasks independently, representing a significant step in assistive neurotechnology.
Anthropic introduced the Model Context Protocol (MCP), an open-source framework to improve how AI systems interact with diverse data sources. By standardizing these interactions, MCP addresses challenges posed by isolated data silos and complex custom integrations, enabling scalable and secure AI applications.
The FCC approved a plan by SpaceX to launch a direct-to-phone Starlink satellite internet service in collaboration with T-Mobile. Using specific wireless bands, this service will allow compatible devices to connect directly to satellites, enabling communication even in areas without traditional cellular coverage.
ServiceTitan’s Series H funding includes a compounding IPO ratchet, offering investors downside protection if the IPO price falls below $84.57. This mechanism increases the company's dilution over time, as the hurdle price grows by 11% annually after May 2024, pushing it closer to $90 per share in November 2024.
OpenAI is funding a project at Duke University to explore how AI can better align with human ethical values. This initiative focuses on creating systems capable of navigating moral dilemmas across fields like medicine, law, and business. Researchers aim to develop tools such as a "moral GPS" that can mimic human moral reasoning, addressing challenges in fairness and decision-making.
Uber is hiring gig workers to help label and organize data, which is essential for training AI models to function correctly. This approach allows Uber to quickly process large amounts of information needed to improve its AI.
Meta is planning to build a 40K+ km subsea fiber-optic cable which will cost over $10 billion, to serve as its first privately owned global data network. The planned cable will provide Meta with a global data network, spanning a "W" shaped route from the US to India via South Africa and back through Australia.
The US Federal Trade Commission has launched an antitrust investigation into Microsoft focusing on its cloud computing, software licensing, cybersecurity, and AI products after over a year of informal interviews with competitors and partners.
In last week’s episode of Research Radio, we sat down with Base Power Co-Founders Zach Dell (CEO) & Justin Lopas (COO). You can check out the full episode here.
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