WWJD (what would Jobs do)?
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Last Week’s News is our weekly newsletter - the lazy way to find out what's happening in tech & venture, with enough analysis thrown in to sound smart at dinner parties.
Headlines
WWJD?
I don’t think it’s contentious to say that Siri is shit.
So it is interesting to see that Apple is once more in discussions with OpenAI about using their tech to power some of the AI features in the next iOS update (iOS 18). They’ve also been chatting with Google about using Gemini.
Apple has been conspicuously quiet in the AI frenzy. As reported last week, we know they are poaching talent from Google, but they are yet to release anything interesting product-wise. As the dominant player in consumer hardware in the Western world (>50% mobile phone market share in North America and Europe), with one of the strongest globally recognised consumer brands, one might reasonably argue Apple has an unprecedented opportunity to ship something that fundamentally reimagines the way we interact with technology, and instantly put it in the hands of over a billion people worldwide. Plus, the closest competition was recently declared the worst product ever made.
However, it seems like Apple are really struggling to do AI in-house, due to a combination of lack of experience, talent, and training data. Outsourcing this to OpenAI or Google derisks things, but so far the whole approach doesn’t feel very Apple. Apparently the new iOS will include a mixture of Siri-type features built on Apple’s in-house LLMs and other “chatbot” functionality built on GPT4 or a similar product. Hardly game changing stuff.
I feel like the first Steve Jobs AI release from Apple would have rocked our world. At the moment that doesn’t look to be the case.
In fact, their whole innovation track record really sucks at the moment. iPhone sales are stagnating too.
Is Apple out of ideas? Maybe.
The Chip Wars heat up
As the FT reports, “the Biden administration has revoked export licences that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company.”
The US are particularly worried about Huawei, China’s flagship tech company. There have been ongoing spying allegations, and you may remember that there was a lot of debate about whether or not to roll out their 5G infrastructure in a number of western countries (including the UK) for this reason.
In 2020 the Trump administration blocked Huawei’s ability to fabricate the chips it designs with TSMC, the world’s leading chipmaker. Huawei made a bold move and struck a deal with China’s state-backed SMIC (Semiconductor Manufacturing International Corporation), which is one of the Chinese government’s key bets sin reducing reliance on US-controlled firms like TSMC. SMIC had a mammoth task ahead of it:
“To build Charlotte, SMIC would have to grapple with an advanced process it was not familiar with and new restrictions on acquiring and managing complex equipment. One chip company executive close to SMIC likened it to “measuring an elephant in the dark.”
But in late 2023, Huawei unveiled a brand new phone with cutting edge SMIC-manufactured chips that rival anything you’ll find in an Apple or Samsung device. Security advisors in the US are baffled as to how they are managing this. If they can make great mobile phone chips, the concern is that they will also be able to make advanced AI GPUs, with or without the latest lithography technology from the Dutch firm ASML.
The Chinese government have rifled money into these two companies in the last few years, and will likely to continue to do so.
The plot thickens.
For more on the background to the Chip Wars, see last week’s post.
Other bits
Fundraising
Dry Powder
?? The Americas - more mega-funds and some smaller vehicles
领英推荐
?? Europe & Africa - nothing huge but some cool smaller stuff
?? Middle East & Asia: big Singapore climate fund, lots of activity in India
Big Startup Rounds
Best of the Internet
Are foundation models this innovation wave’s telecomms infrastructure?
Funding companies like OpenAI, Elon’s xAI, Anthropic, Aleph Alpha, Mistral, etc. is incredibly expensive. Billion dollar rounds are now table stakes. But are any of these companies going to turn a profit? Or will they end up simply being a low margin commodity layer that valuable companies get built on?
At the moment, most are struggling to generate revenues, as the New York times reports. One is reminded of telecomms infra in the 90s - a lot of capex with very poor ROI, but a ton of great software companies built that wouldn’t have existed without it.
I thoroughly enjoyed this piece from Benedict Evans, which points towards something similar: Currently there don’t seem to be any killer apps for LLMs themselves “while at the same time there’s a ‘Cambrian Explosion’ of startups using OpenAI or Anthropic APIs to build single-purpose dedicated apps that aim at one problem and wrap it in hand-built UI, tooling and enterprise sales, much as a previous generation did with SQL.”
I guess the question is whether everyone ends up building on one platform (like OpenAI), turning it into an iPhone equivalent, with high lock-in and high rents, or whether there are lots of competing platforms vying for market share and making low margins (like telecomms providers). There doesn’t seem to be very strong evidence for network effects in foundation models at the moment, so perhaps the latter case is actually quite likely.
Porcelain Thrones
A two century old Japanese pottery manufacturer is the picks and shovels AI play you’ve never heard of - they produce the best ceramics to cool data centres apparently.
Lonely and worried
People get married way less and they’re mostly concerned rather than excited about AI. 16 fascinating findings from the Pew Research Centre’s 2023 surveys.
Build more houses
The cost of housing relative to wages has increased 1,500% in London, 800% in Dublin, 480% in Sydney and 362% in New York in the last ~40 years. It’s basically the only thing not getting cheaper, and it is the main reason Western economies are stagnating. Not only does this lack of housing reduce productivity and innovation, it also drives inequality, climate change, obesity, and even explains falling fertility rates, argue John Myers, Sam Bowman & Ben Southwood.
This is an older piece, but I enjoyed it so much I felt compelled to share! If the solution to our problems is this simple, LFG. I hope the Labour party are taking notes.
The world is magical
Go seize the day
Thank you for reading! If you enjoyed this hit the like, and if you didn’t please do drop me some feedback.
PR
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