Stableton Navigator | xAI’s $45B Valuation Talks, OpenAI’s Custom Chips, SpaceX’s Spy Satellite Deal

This week, the future takes shape with big moves: Elon Musk’s xAI eyes $45B, OpenAI expands its hardware ambitions, and Gartner forecasts an AI-driven workplace revolution by 2028. Let’s dive in…

THIS WEEK’S BREAKING NEWS

Elon Musk's xAI eyes $45B valuation amid funding talks

Elon Musk is in discussions with key Middle Eastern investors, including those from Saudi Arabia and Qatar, to raise capital for his AI venture, xAI, aiming for a $45 billion valuation—almost double its value from a few months ago. Musk's previous strained relationship with Saudi investors appears to be mending, as he engages with the Public Investment Fund (PIF) and the Qatar Investment Authority. This funding round highlights xAI's ambitions to compete with industry giants like OpenAI, Anthropic, and Big Tech players, as Middle Eastern nations continue investing heavily in AI to establish themselves as global leaders in the sector. (1)

MARKET UPDATE

AI agents to autonomously handle 15% of work by 2028

Gartner forecasts that by 2028, at least 15% of daily work decisions will be autonomously made by AI agents, a significant increase from 0% in 2024. These agents are expected to handle routine tasks, monitor systems, and even mentor new employees, enhancing productivity and efficiency. The rapid adoption of AI agents underscores the need for robust AI governance platforms to manage their legal, ethical, and operational performance, ensuring transparency and responsible use. (2)

PORTFOLIO & CO-INVESTMENT UPDATE

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Through Stableton’s portfolio products and co-investment program, you can?explore?some of the most promising unicorns before they go public.

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PORTFOLIO NEWS

OpenAI unveils ChatGPT search

OpenAI has integrated real-time web search capabilities into ChatGPT, enabling the AI to access up-to-date information directly from the internet. This feature is currently available to paid subscribers and waitlisted users, with plans to extend access to free and enterprise users in the coming weeks. The integration allows ChatGPT to automatically or manually perform web searches within its existing interface, enhancing its ability to provide current and accurate responses. This development positions ChatGPT to compete more effectively with AI-powered search tools from Microsoft and Google, which have offered real-time internet access for some time. (3)

OpenAI partners with Broadcom for custom AI chips

OpenAI is collaborating with Broadcom to develop custom silicon tailored for its extensive AI workloads, aiming for production by 2026 with manufacturing secured through TSMC. A dedicated team, including former Google Tensor chip engineers, is spearheading this initiative. In the interim, OpenAI is integrating AMD's MI300 chips into its Microsoft Azure infrastructure to enhance performance. This strategic move aligns OpenAI with other tech giants like Google, Microsoft, and Amazon, who have advanced in developing custom AI hardware, and may necessitate substantial funding for OpenAI to catch up. (4)

OpenAI's consumer focus yields significant revenue

OpenAI's CFO revealed that 75% of the company's revenue is generated from paying consumers, with a conversion rate of 5% to 6% from free to paid users. This highlights the company's success in monetizing its AI products, particularly ChatGPT, which boasts over 1 million paid corporate users. OpenAI's recent $6.6 billion funding round, elevating its valuation to $157 billion, underscores its rapid growth and strong market position. (5)

Ex-Pebble CEO joins OpenAI for new AI initiatives

OpenAI has recently hired Gabor Cselle, co-founder and former CEO of the Twitter alternative, Pebble. Cselle, who joined OpenAI in October, announced his new role on X (formerly Twitter) on November 2, 2024. While specific details about his position remain undisclosed, his extensive background in developing consumer-focused applications suggests he will contribute to OpenAI's efforts in creating user-centric AI products. (6)

SpaceX's $1.8B spy satellite deal with US government

SpaceX is developing a network of spy satellites under a $1.8 billion contract with the U.S. National Reconnaissance Office (NRO). This initiative, managed through SpaceX's Starshield division, aims to deploy hundreds of Earth-imaging satellites in low orbit to enhance the U.S. government's ability to monitor global activities rapidly and comprehensively. This contract underscores growing confidence between SpaceX and U.S. security agencies, despite prior friction, particularly over Musk's management of Starlink services in Ukraine. The new Starshield system is distinct from SpaceX's Starlink satellite network, which provides global internet services. With rising global competition in space militarization, including developments from China and Russian satellite threats, Starshield's successful deployment is vital for U.S. strategic dominance in space. (7)

SpaceX plans in-orbit refueling test for Starship

SpaceX plans to conduct an in-orbit refueling test of its Starship spacecraft in early 2025, aiming to transfer propellant between two Starships in space. This milestone is crucial for enabling extended missions to the Moon and Mars, as it allows spacecraft to refuel without returning to Earth. The test is part of SpaceX's collaboration with NASA's Artemis program, which seeks to return humans to the Moon. Successful in-space refueling would significantly enhance Starship's capabilities for deep-space exploration. (8)

Geopolitical risks prompt spacex to reroute production

SpaceX has requested its Taiwanese suppliers to relocate manufacturing operations abroad due to escalating geopolitical tensions between Taiwan and China. In response, companies like Chin-Poon Industrial and Wistron NeWeb Corporation are shifting production to countries such as Vietnam and Thailand to mitigate potential supply chain disruptions. (9)

xAI's Colossus: Scaling up to 200,000 GPUs

xAI has launched its Colossus supercomputer in Tennessee, equipped with 100,000 Nvidia H100 GPUs. Built in just 122 days, Colossus is set to double its capacity to 200,000 GPUs in the coming months, incorporating 50,000 Nvidia H200 GPUs with enhanced memory. This expansion aims to accelerate the training of xAI's generative AI models, including the chatbot Grok, positioning xAI to compete with industry leaders like Meta, Microsoft, and OpenAI, who are also investing heavily in AI infrastructure. (10)

Anthropic urges immediate AI regulation to avert catastrophe

Anthropic has issued a stark warning that without effective government regulation within the next 18 months, advanced AI systems could pose catastrophic risks. The company emphasizes the urgency of implementing safety measures to prevent potential misuse or unintended consequences of AI technologies. Anthropic advocates for a collaborative approach between AI developers and policymakers to establish robust regulatory frameworks that ensure the safe and ethical development of AI. (11)

Anthropic raises Haiku model fees amid usage surge

Anthropic has doubled the price of its Claude 3 Haiku model, with input token costs increasing from $0.25 to $0.50 per million and output token costs from $1.25 to $2.50 per million. This change aims to balance surging demand with the financial demands of advancing AI research and model infrastructure. (12)

Canva’s valuation soars

Canva's valuation has surged by 23% to A$48.7 billion (US$32 billion) following recent secondary share sales. This increase brings the company close to its 2021 peak valuation of A$54.5 billion. The latest share trades, amounting to approximately US$1.6 billion, have provided liquidity to early investors and employees. Canva is preparing for a public listing in the U.S. next year. (13)

CHART OF THE WEEK

Private capital's explosive growth has particularly benefited secondaries, which saw a 16% CAGR from 2013 to Q2 2023. As more investors seek liquidity and alternative exit strategies, the secondaries market has matured into a vital solution for both buyers and sellers, providing an efficient way to rebalance portfolios and access liquidity in private markets. With $14.5 trillion in total private assets under management, secondaries are increasingly positioned as a strategic tool for optimizing returns and unlocking value across the private equity landscape.

THE UNTOLD UNICORN STORY

Plaid: Connecting the world to your wallet

Imagine a world where every app on your phone could talk directly to your bank, knowing exactly what’s in your account – no password typing, no secret handshakes. That’s the magic of Plaid, the quiet powerhouse behind apps like Venmo, Coinbase, and Robinhood. Founded in 2013 by two former consultants, Zach Perret and William Hockey, Plaid set out to transform the way we manage money, turning the intimidating realm of bank APIs into something undeniably easier.

Starting as a simple tool to help developers integrate with bank systems, Plaid now connects to over 12,000 financial institutions across North America and Europe. Its technology is the backstage pass that lets your favorite apps peek into your financial life securely.

Interesting Fact:?In 2020, Visa announced plans to acquire Plaid for $5.3 billion. However, the deal was terminated in 2021 after the U.S. Department of Justice filed an antitrust lawsuit to block the acquisition. (14)

QUESTION OF THE WEEK

Can you accept a $100 million subscription?

Yes, with our?Stableton?Unicorn?Top?20 Strategy, we can deploy large allocations swiftly, thanks to the liquidity of our 20 index constituents and our unique access to the late-stage venture direct secondary market.

Stableton's lean, efficient organization—paired with a leading network of over 100 sourcing partners and a 50-100 transaction-per-year run rate—enables swift deployment in a secondary market where liquidity has surged significantly.

Our typical timeline from commitment to 90% allocation is approximately three months. Smaller transactions ($0.5m – 2m) are more challenging, whereas a $100m investment, translating to $5m per company, simplifies deployment. As the fund scales, this timeframe is expected to decrease further.

Based on our prior track record and current order book, Stableton estimates a $100-250m investment could be allocated within six months, with our institutional share class also featuring capital calls to manage cash drag effectively.

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WHAT'S NEXT

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Sources

1 - Financial Times, 2 - Venture Beat, 3 - The Verge, 4 - The Verge, 5 - Bloomberg, 6 - TechCrunch, 7 - The New York Times, 8 - TechCrunch, 9 - Reuters, 10 - PC Mag, 11 - TechCrunch, 12 - ZD Net, 13 - Start Up Daily, 14 - US Justice

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