It all makes sense now
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Good morning from the train, where the WiFi is a bit less solid than I had hoped. In the era of satellite Internet — Starlink, Project Kuiper (soon), and their forthcoming rivals — why is this the case? How long until laptops come with built-in satellite receiving technology good enough to obviate the need to sit here in a mess of cables and tether to my phone?
And that whine, my friends, is why you don’t write a newsletter on no coffee. — Alex
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It all makes sense now
Recently, the White House moved away from the Biden-era AI chip diffusion rules that would have limited many nations to the lower tranches of a tiered access scheme. If you are the USA’s bestie, you get hella chips. If not, some chips. And if we don’t get along at all, no chips for you!
Also this week, a new Saudi Arabian AI company called Humain launched that the nation says will work on, in part, building data centers.
While chewing on the above, also keep in mind that G42, the Emirati Humain — really, Humain is the Saudi Arabian G42 — also wants to do a lot of AI work.
Can you thread the needle? Yep, the loosening of chip sales rules is set to pave the way for G42 and Humain to get hella access to high-end chip tech that could help them own a portion of the global AI game. In time.
Naturally Trump is using chips as bargaining chips tools to help with his other efforts. So, expect your Amazon’s and Google’s and Microsoft’s to face a regional competitor to their own growth, because POTUS wanted to hold access to Nvidia’s hard work hostage so that, I suppose, a few oil-rich nations can take a stab at becoming AI powerhouses?
I, for one, am a little bit over the mixture of politics and technology that bedevils these pages. Instead, I want to nerd out on stuff like this. But, alas, nearly four more years to go.
A clean Slate
There’s a great book by the author Tarō Gomi called Little Truck. It’s a children’s book to be clear, but it has a lovely little message about how small trucks (children) can get out ahead of larger trucks (adults), and might need to be transported home in the back of the larger truck (in your arms, etc).
I love reading it because it’s downright adorable, and, frankly, because it features a little truck.
It turns out that I am not insane — or so sleep-deprived as to mimic the state. No, people love little trucks. So much so that Slate.auto, the recently-announced EV truck company that plans on making a small, modular, simple, EV with a small cab and ample space in the bed, has cleared 100,000 pre-orders.
Naturally a $50 deposit is no hard commitment to a future sale as we saw with the Cybertruck. But given how recently Slate showed up — a few weeks ago — it’s a downright impressive feat. And I haven’t even gotten around to putting down my deposit.
Buying the future
Way back in time when I had hair, I was perplexed why Microsoft didn’t have a venture fund. Now, of course, Redmond has M12 with over 300 investments, but the argument I heard at the time was that venture investing simply wasn’t something that could impact the company’s financial results. So, it wouldn’t.
That changed, and now Microsoft cuts checks regularly, including putting funds into nine known deals so far this year.
Why do corporates invest? Information. Upside. Protection. Strategic partnerships. Pick a reason, it varies on a per-deal basis. But one thing that large companies can get out of startup dealmaking is patronage.
Enter Google’s AI Futures Fund, which will, TechCrunch reports:
back startups from seed to late stage and will offer varying degrees of support, including allowing founders to have early access to Google AI models [and in some cases provide] direct investment from Google.
For the cost of around 37 seconds of search revenue, Google intends to offer access to its latest and greatest and maybe even cash. That sounds super great! And it is, for startups that use Google AI models. Which Google wants, as that usage is data and what company knows better the advantages of having piles of information laying around to lever into functional service intelligence?
Some startups will choose Google AI models over others thanks to Google’s AI Futures Fund. Some will use more. And, I think most importantly, Google can help those that already are — and are succeeding — do more, faster. In essence, the fact that Google is working with Harvey and other breakout startups in the project makes sense; why wouldn’t the best AI startups not be receiving a helping hand from Big AI?
Naturally as this is Google we’re talking about, it has rival internal efforts including Google for Startups, Founders Funds by Google for Startups, and Google for Startups Cloud Program. All that is to say that when we think about who is investing into the largest number of startups — either cash or services, for equity or service usage — YC is up there. But Google is, too, even before we take into account its actual venture funds.
Hey you, pay up!
I love a startup cluster. We recently took a look at the rising nexus of startups working on using AI to sort out issues in code, often those made by AI writing code itself. Yes, we’re bending the snake’s tail back towards its head.
Another that I’ve tracked is the startups building a marketplace to help content provider license their data to AI model companies grouping. After adding Human Native and TollBit to the TWiST500, I learned about Created by Humans that my co-host Jason Calacanis has backed. And then the FT dropped even more names: Pip Labs, Vermillio, ProRata, and Narrativ.
I doubt that the market needs seven of these startups to find a winner, but all the same it’s heartening to see so many companies try to build a future in which human output has value, even if it is often merely grist for the AI mill.
I await the first ping from one of the above companies for access to CO. Which is coming up on its first birthday, and has published several novels worth of words since then. Check, please!