The year is 3812, and Databricks is raising a Series Z-4
Welcome to Cautious Optimism, a newsletter on tech, business and power.
Tuesday. The Internet is broken again this morning, this time due to a Cloudflare issue. Yesterday I interviewed the CEO of NeuBird AI for an upcoming TWiST segment, asking the executive of an AI ITops startup if it is more surprising that the Internet works most of the time than that it sometimes breaks. Yeah. To work! — Alex
📈 Trending Up: AI advertising … Replicate, after Cloudflare snapped it up … semiconductor M&A … concerns about Chinese debt … concerns about American debt … concerns about EU debt … Russian aggression … the Saudi air force …
📉 Trending Down: Baidu shares, after earnings … Xpeng shares, after earnings … PDD, after earnings … small business viability? … China-Japan relations … drinking water in Tehran … Londongrad? …
Things That Matter
Klarna’s first earnings report: After listing in September, Swedish BNPL giant Klarna reported its first set of results as a public company. It did well, reporting revenues of $903 million, ahead of an expected $882 million worth of total top line. Even better, the company’s credit situation is far from deteriorating (“Realized losses fell 1 basis point to 0.44% of GMV year on year.”), and Klarna is proof in the current era that tech companies can demonstrate real operating leverage:
Recall that Klarna became an avatar of sorts for its use of AI to reduce headcount and limit hiring. Yes, it had to retract some of its claims, but I don’t recall other companies with such remarkably stable costs against similar reported revenue growth. Good on Klarna, you European decacorn, you.
The crypto rout is getting bloody: Bitcoin fell under the $90,000 mark temporarily, a far cry from its recent highs of $126,000. Naturally, the declines come after my family started to DCA modestly into a bitcoin ETF. But that’s show biz, baby!
The year is 3812, and Databricks is raising a Series Z-4: I’m kidding, but The Information reports that the data analytics and AI company is considering raising another round of private capital at a $130 billion valuation. What round is the upcoming raise? I think it’s a Series L, coming after the company’s Series K raised earlier this year that valued Databricks at $100 billion.
The floor is lava. And by floor, I mean the public markets. At least that must be how Ali Ghodsi sees the world.
I mean, why else would a company with a run rate of more than $4 billion, growing at a rate of more than 50% a year, with over $1 billion in AI revenue and free cash flow, stay private?
OpenAI snags $100M Intuit contract: Per coverage and a broken blog post (Cloudflare?), Intuit and OpenAI have cooked up a multi-year partnership that will see the TurboTax maker use the ChatGPT maker’s AI models, and “expose Intuit products TurboxTax, QuickBooks, Credit Karma and Mailchimp to a broader range of potential users on ChatGPT,” per the WSJ.
Landing nine-figure contracts is excellent news for OpenAI, even if the additive revenue is modest compared to both its current run rate and future growth expectations.
I, Alex, do not want Intuit in my ChatGPT. At all, in fact. May the rent-seeking stain of a company eventually get eaten by a public tax-paying option. (RIP).
La saga Kit Kat: The other week, a Waymo in San Francisco ran over a cat. No simple feline, the cat in question was a Mission District bodega and dive bar denizen, beloved in its local area.
It was the perfect story for self-driving in San Francisco: The avatar of a multi-trillion-dollar company’s ambitions for reducing the need for humans to do labor erased the beloved pet of a community of folks who work the jobs that tech concerns want to automate.
And yet. Sure, there was a bit of protesting — the Times has a good summary here — but it appears that the saga will have no real impact on Waymo in San Francisco, or anywhere else. The simple fact that self-driving cars are safer than most human drivers is winning the day. Thankfully.
People love Waymo. The Times notes correctly that the cars are a tourist attraction in, and of themselves. And even in San Francisco, an always cross blend of hippies, locals, grifters, transplants, and futurists, a perfect-storm story isn’t enough to change the trajectory of progress. Good. And RIP Kit Kat.
Bubble? What bubble? The new Cool Thing To Do is to publicly worry about the AI bubble. Thus, Alphabet CEO Sundar Pichai told the BBC that “no company is going to be immune [to the impact of the AI bubble bursting], including us.”
Oh no!