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$NVDA's earnings, media economics in the AI era, Farcaster's mega crypto round, and more! | E1954

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$NVDA's earnings, media economics in the AI era, Farcaster's mega crypto round, and more! | E1954

Jason and Alex kick off the show (00:00:00)

  • Welcome to This Week in Startups, a news roundtable show.
  • Breaking news: NVIDIA's earnings are out, and OpenAI and News Corp have made a $250 million licensing deal.
  • Alex Wilhelm, the new co-host, expresses his excitement about discussing earnings and media economics.
  • NVIDIA's revenue grew by 21% year-over-year to $6.05 billion, beating estimates.
  • Gaming revenue increased by 46% to $3.62 billion, driven by strong demand for gaming GPUs.
  • Data center revenue grew by 31% to $3.26 billion, driven by demand for AI and machine learning applications.
  • NVIDIA's gross margin was 66.1%, down slightly from 67.3% in the previous quarter.
  • The company announced a $15 billion share buyback program.
  • OpenAI, the creator of ChatGPT, has licensed its technology to News Corp, the parent company of The Wall Street Journal and The New York Post.
  • The deal is worth $250 million over 10 years.
  • News Corp will use OpenAI's technology to create AI-powered news and content experiences.
  • The deal is a significant validation of OpenAI's technology and its potential to revolutionize the media industry.
  • Farcaster, a decentralized social network, has raised $30 million in a Series A funding round led by Andreessen Horowitz.
  • The round also included participation from Coinbase Ventures, General Catalyst, and Floodgate.
  • Farcaster aims to create a more open and decentralized alternative to traditional social media platforms.
  • The company plans to use the funding to expand its team and develop new features.
  • Google is reportedly planning to launch a new AI chatbot called "Bard" to compete with ChatGPT.
  • Microsoft is integrating OpenAI's technology into its Bing search engine and Edge web browser.
  • Stability AI, the creator of the open-source text-to-image model Stable Diffusion, has raised $101 million in a Series B funding round.

Nvidia earnings for First Quarter Fiscal 2025 (00:01:50)

  • NVIDIA's revenue grew significantly from $7.2 billion a year ago to $26 billion in the recent quarter, exceeding expectations and indicating exceptional growth and profitability.
  • The primary driver behind this growth is the increasing demand for AI and large language models, leading to major purchases of NVIDIA's H100 data center GPUs.
  • Despite beating expectations, NVIDIA's stock price only gained 4.5% after hours, suggesting that the market had already anticipated this level of performance.
  • NVIDIA's five-year stock chart shows an impressive 25,200% growth, with a $1 investment in 2019 turning into $250.
  • Major tech platforms and cloud providers are working on building their own AI hardware, which could potentially reduce demand for NVIDIA chips in the future.
  • The growth of AI is already priced into NVIDIA's stock, so investors should not expect significant price increases in the short term.
  • Overcapacity in AI hardware could occur in the short term as the models become more efficient and cheaper to run on less powerful hardware.
  • Investors are excited about NVIDIA due to its profitability and improving gross margin.

Zendesk - Get six months free (00:12:53)

  • Zendesk is a customer support software company that offers a suite of tools to help businesses deliver exceptional customer experiences.
  • Zendesk is easy to set up, scales as businesses grow, and provides metrics for easy reporting.
  • The Zendesk for Startups program offers unlimited access to all Zendesk products, expert insights, best practices, and entry into a community of founders, all at no cost with the first 6 months free.
  • NVIDIA reported record revenue of $6.05 billion, up 21% year-over-year, driven by strong demand for its data center and gaming GPUs.
  • The company's data center revenue grew 31% to $3.62 billion, driven by demand for AI and machine learning applications.
  • Gaming revenue grew 13% to $2.46 billion, driven by strong demand for new graphics cards.
  • The rise of AI is changing the media landscape, with AI-powered tools being used for content creation, distribution, and monetization.
  • AI-generated content is becoming more prevalent, with some media outlets using AI to write articles, create videos, and generate images.
  • AI is also being used to personalize content recommendations and target advertising, allowing media companies to deliver more relevant content to their audiences.
  • Farcaster, a decentralized social media platform, raised $30 million in a Series A funding round led by Andreessen Horowitz.
  • The platform allows users to create and share content without censorship and rewards users for their contributions with cryptocurrency.
  • Farcaster aims to create a more open and decentralized social media ecosystem that is not controlled by a single entity.

Continuing discussion on Nvidia's earnings (00:14:32)

  • Nvidia's gross margins improved significantly, and revenue increased by 262% year-over-year, while operating expenses grew at a slower rate.
  • Large tech companies with excess cash are investing in infrastructure and other projects due to regulatory restrictions on acquisitions.
  • Google Ventures was established to invest Google's surplus cash in startups and explore new technologies.
  • The current higher interest rate environment may impact tech companies' cash deployment strategies.
  • Nvidia's earnings indicate a substantial wealth transfer from major tech companies like Apple, Google, and Microsoft to Nvidia.
  • Investors favor platform companies investing in AI, allowing them to spend without losing value as Nvidia's value grows.
  • Nvidia's stock split and dividend increase benefit shareholders.
  • The AI revolution impresses with its diverse applications and rapid delivery of promised features, unlike crypto, which has fallen short of expectations.
  • AI's short development cycle enables rapid advancements and improvements in underlying models.

News Corp and OpenAI strike ‘multi year global partnership’ (00:22:39)

  • News Corp, owned by Rupert Murdoch, has invested $250 million in OpenAI over five years to access its language models and search engine technology.
  • The investment highlights the importance of reliable information for building language models and search engines.
  • Smaller publications may be at a disadvantage due to News Corp's significant investment, so a startup is being developed to act as a clearinghouse for groups of publications to collectively negotiate rights and simplify content licensing.
  • The New York Times has achieved success with over 10 million subscribers and over $2 billion in annual revenue, mostly from digital-only subscriptions.
  • Partnerships with language models could bring in an additional $50 million in revenue per year for the New York Times, increasing profitability by 10%.
  • This new licensing business model reduces dependency on ad revenue and provides stability for journalism.
  • NVIDIA reported record revenue of $6.05 billion, up 21% YoY, driven by strong demand for its data center and gaming GPUs.
  • Data center revenue grew 31% YoY to $3.62 billion, driven by demand for AI and machine learning applications.
  • Gaming revenue grew 13% YoY to $2.04 billion, despite a decline in GPU shipments due to the ongoing crypto mining downturn.
  • NVIDIA launched the RTX 4090 GPU, the most powerful consumer GPU on the market.
  • Traditional media companies are facing challenges due to the rise of AI-powered content creation tools.
  • AI-generated content is becoming more sophisticated and realistic, making it difficult for human-generated content to compete.
  • Media companies need to adapt to the changing landscape by investing in AI-powered tools and creating content that is unique and valuable.
  • Farcaster, a decentralized social media platform, raised $30 million in a funding round led by Andreessen Horowitz.
  • Farcaster aims to create a more open and censorship-resistant social media platform by using blockchain technology.
  • The platform is still in its early stages of development, but it has the potential to disrupt the traditional social media landscape.
  • Google announced plans to lay off 12,000 employees, or 6% of its workforce.
  • Amazon announced plans to close three of its Amazon Fresh grocery stores in the UK.
  • Microsoft announced plans to acquire Activision Blizzard for $68.7 billion.

Apple News+ is driving big numbers for The Daily Beast (00:30:51)

  • Apple News Plus is generating substantial revenue for publishers like The Daily Beast, surpassing its own subscription business.
  • The advertising market, while not as dire as perceived, poses challenges for journalistic media due to the dominance of large ad networks, e-commerce-related ad networks, and the rise of podcasting as an advertising medium.
  • Vox is transitioning to a subscription-based model due to advertising inefficiencies.
  • The Verge and Gadget are losing their significance as premier advertising platforms due to poor trackability compared to subscriptions and licensing deals.
  • Television advertising remains significant despite its targeting limitations, while tech and gadget publications struggle to attract advertising revenue.
  • Venture capitalists favor larger investments over smaller ones due to management constraints, resulting in an unbalanced Series A market.
  • YC stands out as a highly active super early investor, making numerous investments annually with a large staff.
  • NVIDIA reported record revenue of $6.05 billion, up 21% year-over-year.
  • Gaming revenue grew 46% to $3.62 billion, driven by strong demand for new RTX 40 series GPUs.
  • Data center revenue increased 31% to $3.81 billion, fueled by growth in AI and cloud computing.
  • NVIDIA announced a new $100 billion share buyback program.
  • AI-powered content creation tools are disrupting traditional media business models.
  • News organizations are using AI to generate articles, videos, and images, reducing the need for human journalists.
  • AI-generated content can be produced quickly and cheaply, making it a cost-effective alternative to human-generated content.
  • However, AI-generated content often lacks the nuance and creativity of human-generated content.
  • Farcaster, a decentralized social media platform, raised $30 million in a Series A funding round led by Andreessen Horowitz.
  • Farcaster aims to create a more open and censorship-resistant social media platform by using blockchain technology.
  • The platform allows users to own their data and control their own algorithms.
  • Farcaster is still in its early stages of development, but it has the potential to disrupt the traditional social media landscape.
  • Google is reportedly planning to launch a new AI chatbot called "Bard" to compete with OpenAI's ChatGPT.
  • Microsoft is integrating ChatGPT into its Bing search engine and Edge web browser.
  • Stability AI, the company behind the open-source image generation model Stable Diffusion, raised $101 million in a Series B funding round.

Wearable AI startup Humane is exploring a sale (00:40:14)

  • Humane AI, a company that created a wearable AI device, is seeking a potential buyer due to negative reviews and challenges in the hardware industry.
  • Hardware startups often struggle to compete with established companies like Apple and face pressure to lower prices.
  • Notable hardware startup exits include Nest (acquired by Google for $500 million), Danger (acquired by Microsoft), and Fitbit (acquired by Google).
  • The Humane pen's high cost ($700-$800) and $24 monthly subscription make it a difficult sell for consumers.
  • Critics argue that AI hardware devices like the Humane pen are not yet fully developed and lack value to justify their high cost.
  • Marques Brownlee, a respected tech reviewer, pointed out flaws in the Humane pen such as overheating, battery issues, and a lack of polish.
  • Brownlee compared the Humane pen to the original iPhone, which was criticized but later became revolutionary.
  • The original iPhone lacked 3G and an app store, relying on the mobile web and websites.
  • The iPhone 3G marked a turning point, popularizing smartphones and the App Store.
  • Apple is gradually incorporating features once only available through third-party apps, such as the flashlight, into its platform.

Windows Recall (00:50:56)

  • Microsoft's "Recall" feature allows users to review past computer activities, raising privacy concerns due to its screen recording without clear user indication.
  • Limitless AI, formerly known for its covert conversation-recording pendant, has shifted its focus to a private personal cloud that works across devices.
  • Rewind AI's cloud-based recording feature raises privacy concerns due to potential hacking and data breaches.
  • The increasing use of GPS tracking in personal relationships highlights the growing trend of surveillance and the erosion of privacy.
  • Children nowadays are accustomed to constant entertainment and supervision, unlike in the past when they had freedom to explore and play outdoors.
  • David Sacks and Evan have created "glue," a Slack alternative that tracks employees' work activities and facilitates internal communication.
  • AI-powered enterprise software has the potential to revolutionize the industry by rebuilding from the ground up rather than modifying existing products.
  • AI features like inbox summarization and knowledge graph automation will significantly enhance efficiency in corporate and personal settings.
  • Despite AI assistance improving writing skills, there's still room for human creativity and unique writing styles.
  • People generally dislike writing and prefer AI to handle more of it, raising the overall standard of writing.

Farcaster raises $150M: Is crypto making a comeback? (01:08:45)

  • Farcaster, a decentralized social media platform, has gained 880,000 daily users but faces challenges with user-friendliness due to gas fees and token requirements.
  • Despite its relatively small user base, Farcaster has a valuation of $1 billion, raising questions about its potential for generating a return on investment.
  • Farcaster raised $150 million in a funding round led by Andreessen Horowitz, highlighting the growing interest in decentralized systems.
  • The era of multi-billion dollar crypto funds may be coming to an end as there are limited breakout consumer-facing crypto apps that are non-speculative or token-based.
  • Alex Kantrowitz, the host of the podcast, has a new newsletter called "Cautious Optimism News" that provides a balanced perspective on technology.
  • Substack and Beehive are free or low-cost alternatives to MailChimp for storing email lists.

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