Is there too much competition in AI foundation models?

Advanced Computing, AI/ML, Chips, and Extended Reality

Good morning,

Marc Andreessen has shared his concern that everyone can build a foundational AI model, meaning that everyone is creating a ‘race to the bottom.’ Now, research company Forrester, in its inaugural analysis of foundational LLMs outlined the ten most promising companies building those foundational models: AWS, Anthropic, Cohere, Databricks, Google, IBM, Microsoft, Mistral, Nvidia, and OpenAI (the second half of the alphabet needs to step up its game in getting picked for names by companies, apparently). Of course, AWS, Google, IBM, Microsoft, and Nvidia are all public companies. Want to guess how many of the privately held companies sit in a16z’s portfolio? a16z is invested in Databricks, Mistral, and OpenAI. Three of the five startups.

I’m not saying that Andreessen is wrong (he’s likely not) about the companies being in a race to the bottom, but he certainly has good reason to want to limit any additional competition from entering the field. Speaking of a16z, they’ve unveiled a relatively new revenue stream. The firm is leasing GPUs out to the AI companies in its portfolio for compute. Pretty genius.

Now, let’s go!

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News Headlines:

• Russian disinformation campaign targeting Walz: ODNI official (AP)

• US confirms evidence that N. Korea has troops in Russia, possibly for Ukraine war (RT)

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Quantum Computing:

• Chinese scientists use quantum computers to crack military-grade encryption (QI 

• Experts play down the significance of the Chinese quantum 'attack' (ISM) 

• Google's Sycamore QC chip can now outperform the fastest supercomputers: study (LS) 

• Researchers reveal quantum advantage that could advance future sensing devices (PHY) 

• Scientists investigate the speed of quantum entanglement at the attosecond level (PHY))

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AI / ML

• Marc Andreessen: AI model makers are in 'a race to the bottom' (TC) 

• DIA's AI-powered intel repository will be fully operational about a year late (DO) 

• Microsoft AI VP Sebastien Bubeck will join OpenAI (TC) 

• PrimerAI introduces near-zero hallucination update to AI platform (DN) 

• US will curb AI investment in China soon (RT) 

• Ex-OpenAI CTO Mira Murati is fundraising for her new AI startup (TC)

• a16z is leasing out Nvidia GPUs to portfolio companies (TC)

   

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Nanotech, Nanomaterials, Chips

• White House mulls capping AI GPU exports from Nvidia and AMD to the Middle East (THW) 

• Taiwan to invest $390M into defense, semiconductors, and AI (TWN) 

• KKR is in early talks to take $5B Hong Kong-listed chip equipment maker ASMPT private (YF) 

• Intel and AMD teamed up to confront rising challenge from Arm (RT) 

• TSMC alerts U.S. of chip in Huawei product after TechInsights finding (RT) 

• Photonics offers lower electricity demands and faster computation for AI companies (FOR) 

• Taiwanese-American AI chip startup Kneron seeks funds at $1B valuation (YF)  

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XR / AR / VR

• Army ponders alternatives to Microsoft's troubled AR goggles (RCD) 

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Deal Flow:  

VC

• Photonic computing startup Lightmatter raised $400M at a $4.4B valuation led by T. Rowe Price (TC) 

• Xscape raises $44M Series A led by IAG Capital Partners, to develop photonic chips to enhance data transfer speeds (BW) 

• Ookuma Diamond Device, a startup that has developed innovative diamond chips designed to assist in the removal of radioactive debris at nuclear power plants, raised a $27 million round led by Globis Capital Partners (TC) 

• University College London spinout Oriole Networks raised $22M led by VC group Plural to scale up its photonic networking technology (DCD) 

• Aviation intelligence startup Beacon AI raised a $15M Series A led by Costanoa Ventures (PRN) 

• LiDAR chip maker Lidwave raised a $10M seed round co-led by Jumpseed Ventures and Next Gear Ventures (VB) 

• ApertureData, a multimodal AI database, raised an $8.2M seed round led by TQ Ventures (VB) 

• DataCrunch, a startup that rents high-performance GPUs to companies and researchers running complex AI models, raised $7.6M in equity from byFounders and J12 Ventures and an additional $5.4M in debt (TC) 

• SF-based Edgee raised $2.9M in pre-seed funding from Serena and VentureFriends to develop its open source edge computing platform (TEU) 

PE

• QuEra Computing raised an undisclosed amount in a strategic investment from Google Quantum AI to assist QuEra's efforts to develop scalable, fault-tolerant QCs using neutral atom tech (QI) 

Debt

• US and Apollo will lend $1.5B to EV chip manufacturer Wolfspeed  (AP) 

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Opportunities

• DARPA is seeking concepts to help create new AI-based techniques for humans to author knowledge about deontics into an expressively flexible logical language in an automated fashion using natural language (SAM)  

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Editor's Picks: 

• Steve Blank digs in to the state-of-the-industry for quantum computing  

• The AI Now Institute highlights risks of using civilian, foundation AI models for military purposes and advocates creation of separate military AI systems.

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Lighter Side:

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Keep Building,

BOF

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