Contrary Research Rundown #79
The rise and fall (and rise) of AI, plus new memos on Rippling, Reddit, and more
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Research Rundown
AI is being touted high and low as the latest platform shift in technology. The results have been fascinating, and the progress has happened with break-neck speed. Venture funding in AI has grown 20x over the last decade. Y Combinator’s latest batch of 242 companies had 71% building in AI. 17% of Russell 3000 companies mentioned AI in their earnings calls.
In a blog post, Jeff Burke from Replit breaks down the massive capital moves in AI:
As much potential as AI has, and as much as people are deploying significant amounts of capital into its development, its important to understand moments when the promise of some of these AI companies does not work out. We wrote last week about Microsoft effectively hollowing out Inflection AI’s talent. Similarly, this week, we saw Stability AI’s CEO step down as the ongoing list of the company’s woes were laid out.
Many people’s skepticism of the AI hype stems from the fact that we only recently went through an intense hype cycle for technology writ-large, a massive crypto wave, and are now seeing what feels like similarly unsustainable realities, such as Nvidia being valued at a higher market cap ($2.3 trillion) than Google ($1.8 trillion), despite Nvidia’s generating YTD revenue of $60 billion as of February 2024, which was equivalent to Google’s $69 billion of cash flow around the same period.
Does the hype mean the impact of the technology isn’t real? No. Does the failure of a few high profile AI companies invalidate the space? Definitely not. But what many investors, operators, and founders alike are anxious about is waiting for the other shoe to drop. When, if ever, does reality come back down to earth? Only time will tell.
Ribbon (also called Ribbon Health) manages actionable provider information for healthcare enterprises. To learn more, read our full memo here and check out some open roles below:
Software Engineer - NYC
Rippling was built to consolidate functions by creating a comprehensive platform for HR, IT, and payroll processes at a global scale. To learn more, read our full memo here and check out some open roles below:
Reddit is a social news aggregator and discussion platform. In a social media landscape dominated by user-centric platforms, Reddit’s focus on niche, interest-based communities differentiates it from the rest. To learn more, read our full memo here and check out some open roles below:
Senior Machine Learning Engineer, Ads Optimization - Remote, U.S.
Principal Software Engineer, Ads Formats - Remote U.S.
Check out some standout roles from this week.
Ramp | NYC Remote - Software Engineer | Backend, Software Engineer | Frontend, Software Engineer | iOS, Software Engineer | Android
Sourcegraph | Remote - Fullstack Engineer - Product-Led Growth [IC2], Machine Learning Engineer [IC4]
Hex | NYC, San Francisco, Remote - AI Engineer, Fullstack Engineer, Product Security Engineer
Onehouse | Sunnyvale, CA/Hybrid, Sunnyvale, CA/Seattle, WA/Hybrid - Data Platform Engineer (US), Senior Site Reliability Engineer (US)
Databricks announced the launch of a new open, general-purpose LLM, called DBRX. According to the company, the model “surpasses GPT-3.5, and it is competitive with Gemini 1.0 Pro. It is an especially capable code model, surpassing specialized models like CodeLLaMA-70B on programming.”
Building on its advance into more open LLMs, Databricks’ VP of generative AI, Naveen Rao, who previously founded MosaicML before selling it to Databricks, criticized Sam Altman, CEO of OpenAI, for saying open source AI is important, while maintaining centralized control. Rao’s comment was, “if you’re really serious about safety, you need to decentralize it.” Read more about the openness of AI in our deep dive.
In other news in the world of AI, Amazon has announced its investing another $2.75 billion into Anthropic, the AI company behind models like Claude.
Mathilde Collin, the long-time co-founder and CEO of Front, announced that the company has hired a new CEO, Dan O’Connell, who was previously CRO at Dialpad.
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Think Jamin Ball said it gets a few weeks ago:
“Two things can be true:
1. AI is the next phase shift
2. AI is in a bubble”