Contrary Research Rundown #78
Microsoft's world, and we're just living in it; plus new memos on Faire, Kojo, and more
Research Rundown
It’s been a big week for Microsoft. We’ve written before about the structural advantages that incumbent platforms have in AI, and Microsoft is doing its darnedest to drive that point home.
First up? Inflection AI. In June 2023, the company announced it had raised $1.3 billion in funding. The lead investor? Microsoft. The company was building with the vision of conversational AI. The problem was the rapid progress in similar AI across the landscape. With the company failing to break out, Microsoft decided to take a different tact. Techcrunch reported it this way:
“Today, less than a year later, Microsoft announced that it was feasting on Inflection’s body and sucking the marrow from the bones (though I think they phrased it differently). Co-founders Mustafa Suleyman and Karén Simonyan will go to Microsoft, where the former will head up the newly formed Microsoft AI division, along with “several members” of their team as Microsoft put it — or “most of the staff,” as Bloomberg reports it. Reid Hoffman will stay behind with new CEO Sean White to try to salvage what’s left of the company, which, I feel I have to repeat, raised $1.3 billion dollars nine months ago and $225 million in mid-2022.”
If Microsoft AI seems familiar, that’s because it sounds like the new AI research division that Sam Altman was hired to lead at Microsoft immediately after his brief ouster from OpenAI. Microsoft saw the opportunity in a new leader with Suleyman, who was previously the co-founder of Google’s DeepMind.
The next notch in Microsoft’s empire expansion was followed by a pretty fascinating revelation. The insight came from an excerpt unveiled as part of an ongoing lawsuit against OpenAI. In it, Satya Nadella, the CEO of Microsoft, shared a pretty empire-centric world view:
"If OpenAl disappeared tomorrow, we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them."
Several people have pointed out how much this rhetoric is reminiscent of Microsoft in the 90s under the banner of “embrace, extend, and extinguish.” Satya Nadella may be unlikely to be satisfied with “making Google dance,” but instead be focused on building universal coverage in AI. After missing the boat on search, mobile, and on and on, Microsoft is intent on being the center of gravity in this new technological revolution.
Kojo is a construction materials procurement platform that supports the process of researching, selecting, ordering, and paying for the raw materials required for a construction project. To learn more, read our full memo here and check out some open roles below:
Software Engineer, Field (Mobile) - Remote U.S.
Software Engineer, Office - Remote U.S.
Faire is a two-sided marketplace and wholesale platform that helps retailers find and buy unique wholesale merchandise for their stores while helping brands and makers reach local retailers. To learn more, read our full memo here and check out some open roles below:
Staff Front-end Developer - Growth - Remote U.S.
Underwriting Analyst - Remote U.S.
Check out some standout roles from this week.
Moab | NYC, San Francisco - Product Designer
Weaviate | Remote - Senior Platform Engineer
Semgrep | Remote - Senior Software Engineer, Backend, Senior Software Engineer, Full Stack
After being founded in 2005, Reddit went public this week, popping 48% on the first day. Despite the excitement over the company’s debut, others are still hesitant on the company’s AI pitch.
Neuralink posted a video of the first recipient of its brain-computer interface. The patient, who had previously been paralyzed, was controlling a computer and even playing chess, all with prompts from his brain.
Cohere was reportedly attempting to raise new funding at a $6 billion valuation, despite only generating ~$13 million ARR.
After updates were made to version 3 of Stable Diffusion, it was reported that Stability AI was losing a group of three of the original researchers on Stable Diffusion from the company.
The CTO of LatchBio described the advances to ML models like Evo and AlphaFold in attempting to engineer molecules.
The CEO of Wiz declared 2024 the “year of acquisitions,” after it acquired Gem Security. The company also reportedly is serving 40% of Fortune 100 companies.
Speaking of acquisitions, Databricks announced the acquisition of Lilac, a platform to help users find data for training LLMs.
After spiking to 15 million users in 2022, BeReal has seen a precipitous fall, with its user base dropping 61%. Now, the company is reportedly 10 months away from running out of cash.
Discord recently announced the ability to install third-party applications in its platform. This allows creators to offer apps to over 200 million users.
After OpenAI announced its app store last fall, the product seems to have received limited attention. One report had a developer saying, “I could have gotten more traffic by partnering with a small influencer on TikTok with a million followers.”
The battle for global HR continues to rage on. It was recently reported that Rippling ended 2023 at $350 million of ARR. The cost of that growth was substantial, with the company burning $100 million per year. Part of the burn for growth is chasing HR rival, Deel, which is reportedly north of $500 million ARR and profitable.
On May 22nd, we're hosting our next Tech Talk with Hex, Sourcegraph, Semgrep, Onehouse, and Weaviate in San Francisco. The evening will feature eng demos and conversations with senior leaders from the featured companies, followed by food and drinks. Register for the chance to join!
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