Contrary Research Rundown #43
Our latest deep dive on the openness of AI, plus new memos on Postscript, WorkOS, and more
Research Rundown
This week, we published our newest deep dive on the openness of AI and the conflicting perspectives around how much power companies like OpenAI should have when it comes to the creation and distribution of LLMs. Here’s an excerpt:
Artificial intelligence has been in the dreams of technologists since at least the 1950s, when Alan Turing first published “Computing Machinery and Intelligence.” Since then, the progression of intelligent technology has consisted of many leaps forward followed by a few steps back. Before fundamentally intelligent systems were possible, computational power and the availability of data had to reach critical mass. Incremental progress in machine learning and data science gave rise to their gradual ascendance. As Moore’s Law kept pace, and the internet brought about the age of “big data”, the stage was set for the emergence of legitimate AI.
In 2015, OpenAI was founded as a non-profit with the goal of building AI for everyone. The company regarded its openness as a competitive edge in hiring, promising “the chance to explore research aimed solely at the future instead of products and quarterly earnings and to eventually share most—if not all—of this research with anyone who wants it.” The type of talent that flocked to OpenAI became a who’s-who of expertise in the field.
As OpenAI continued to progress in its research, the company increasingly became focused on the development of artificial general intelligence (AGI). In March 2017, OpenAI’s leadership decided the company’s non-profit status was no longer feasible if it was going to make real strides towards AGI, because as a non-profit it wouldn’t be able to secure the massive quantity of computational resources it would need. As a first step, Sam Altman turned to Reid Hoffman and Vinod Khosla. Between that initial shift and April 2023, OpenAI would go on to raise over $11 billion in funding.
While the success of ChatGPT and the seemingly endless resources from Microsoft made OpenAI a leading player in the world of AI, the approach the company had taken didn’t sit right with everyone. Several people involved in the early vision of the company saw OpenAI’s evolutionary process as moving it further and further from the openness implied in the company’s name.
Papaya Global offers a global payroll solution supporting all forms of employment. To learn more, read our full memo here.
Postscript is an SMS marketing platform that works with ecommerce companies. To learn more, read our full memo here.
Lyra is a digital mental health platform that provides mental health benefits for employees. To learn more, read our full memo here.
WorkOS offers a suite of enterprise-ready solutions for identity and access management (IAM). To learn more, read our full memo here.
Trouble in cloud security paradise. One cloud security startup, Orca, is suing another leading cloud security startup, Wiz, alleging patent infringement. You can learn more about the cloud security space in our memo on Wiz, and this cloud security deep dive.
Meanwhile, Wiz unpacks how they reached $100 million of ARR in just 18 months after launch.
Blake Bartlett, Partner at OpenView Venture Partners, breaks down the opportunity for Vendr’s negotiation-as-a-service product. You can learn more about Vendr in our memo.
YC recently released a list of their top 50 companies by revenue. Recently, YC’s Greg Kumparak dug into a discussion with companies Nowports, Deel, and Whatnot on how they’ve achieved success. You can read up on Deel and Whatnot in our memos.
In secondary markets, Snyk has seen its valuation drop by 50% from $7.3 billion to $3.3 billion. The company announced it was generating $150 million ARR in July 2022, growing 150% year-over-year. Read more about Snyk in our memo.
SemiAnalysis published a breakdown of the architecture behind OpenAI’s GPT-4. You can learn more about OpenAI in our deep dive, as well as in today’s newest deep dive on OpenAI’s relationship with open source AI.
Flexport Founder Ryan Peterson, who stepped down as CEO in 2022, has joined Founder’s Fund as the firm’s newest partner. You can learn more about Flexport in our memo.
Ramp published a deep dive into the Ramp platform. The company also announced that “Ramp customers have now saved over $600M and over 8.5M hours.” Learn more about Ramp in our memo.
Lux Capital published a new video series unpacking the demands on American manufacturing, and how the defense industry is experiencing significant constraints.
Jared Dashevsky at Workweek broke down the business model for Mark Cuban’s latest startup, Cost Plus Drugs. In its first year (2022), the business acquired 1 million users and reached $25 million in sales.
Lawrence Hamtil shared an image from a BAML report on the complexity of the supply chain that goes in to building an F-35. To learn more about the manufacturing industry in defense, check out our memo on Hadrian.
We’re excited to announce that Contrary Research will be hosting Ian Spear of Faire, Melissa Chan of Uber Eats, and Lydia Lemoine (ex-Gopuff) for a product-led conversation around balancing marketplaces. Join us on Thursday, July 27th for an intimate conversation led by Contrary Principal Megan Kao as we dive into Balancing Marketplaces. Express interest in joining us here. Space is limited so sign up soon — we’ll be in touch about your registration in the coming weeks.