Down Round

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After 2 months of cringe-posting references to strawberries, OpenAI have released their latest model: o1. And AI heads are losing their minds.

Ostensibly, it's intended for the kind of thorny math and reasoning problems that LLMs tend to struggle with. The guts aren't public, but it seems to use chain-of-reasoning prompts to really force itself to 'think'. 

So, is it any good? Is this a huge step change on the path to AGI. We investigate.

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We didn't cover the Apple iPhone keynote last week because it wasn't particularly exciting and there were virtually no surprises. But, having been given a week to ruminate on it, we have thoughts.

In this ep, we talk about why analysts have been obsessed with an AI-driven iPhone supercycle, why Apple has backed itself into a corner by overcharging for RAM, and the slow death of the smartphone.

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Social media. Is it too dank for the malleable and developing mind?

The Australian government seems to think so. Labor has joined the ranks of a number parties and bodies in various jurisdictions in attempting to set a lower age limit for social media. 

We consider the following questions:

• Why?
• How would it work?
• Who is to blame for society crumbling? 

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For decades, technologists have fantasised about the ultimate prize: a humanoid robot, available to consumers and industry, which can perform a range of humanlike tasks. The recent AI moment has reignited those aspirations, with everyone from Tesla to Apple – and a handful of ambitious startups – either openly or secretly working on humanoid robot projects.

In this ep we round up the rumour mill, and talk about what these things could actually be useful for, and why they're suddenly everywhere. (In spirit, if not actuality.)

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This is a free preview of a premium episode. To subscribe to Down Round Premium and get access, head here.

The tech world has been ablaze over the past week or so, both ironically and unironically, about the concept of Founder Mode.

Inspired by a short essay by Paul Graham, 'founder mode' vaguely posits that there's a natural point in a startup's existence where it gives up being led by a single founder with a ton of agency, and instead becomes led by professional managers via delegation. Graham, and others, suggest that you don't need to do that, and can keep running even very big tech businesses as a lethal operator calling all the shots.

In this freewheeling ep, we discuss.

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Brazil has slapped a ban on X, as the culmination of a dispute between the platform and the country’s judiciary over censorship. It’s weird, because Elon Musk’s platform has complied with government requests from other countries, like Turkey and India.

So what’s the deal? In this ep, we talk about Musk's free speech crusade, the Brazilification of the web, and the general vibes around the X business right now.

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Telegram CEO Pavel Durov was arrested over the weekend in France, with prosecutors  accusing him of violations discovered as part of an investigation into child exploitation material, drug trafficking and fraudulent transactions on the platform.

It’s more than plausible that stuff like that is happening on Telegram. But there’s certainly something unusual going on here too. Telegram has evolved from a messaging app into a full-blown social media platform – and one that is relatively uncensored and pretty wild. And despite the discourse over the past few days being focused on end-to-end encryption, that’s not really what people use Telegram for.

In this ep, we dive into the weird world of Telegram, and engage in some healthy, baseless speculation about Durov's arrest.

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Apple's profit from "Services" is set to surpass profits from iPhones within a couple of years, which is pretty crazy, really.

Of the ~$80-90b Apple make a year in "Services", around 25% of that comes from Google handing over north of $20 billion per year to be the default search engine in Safari.

For years, Google has been freaked out by the prospect of Apple building their own search engine, as outlined in Raph's piece here.

A judge has now ruled this is ILLEGAL. What will come of this? What's the deal with seach?

Links

• Judge rules that Google ‘is a monopolist’ in US antitrust case – The Verge
• Raph's piece on Apple Maps and its role.

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Nike: The brand of brands.

When it comes to brands, they're top dog. When it comes to returning money to shareholders, less so. At least this year.

As Nike have pursued the quest to become as close as an apparel company can be to a tech business, their share price has tanked – this year by over 30%.

A former executive's LinkedIn post went about as viral as a LinkedIn post can go, lamenting Nike's turn to e-commerce and performance marketing thanks to their current CEO, the former head of ServiceNow, and advice from McKinsey.

Very Down Round areas. 

Links:

• Nike: An Epic Saga of Value Destruction - Massimo Giunco

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It's quarterly earnings season, and some of our favourite tech companies are looking a bit shaky. Not because they're not making money – they are – but because they're spending it on new data centres and AI research. 

In this episode, we take stock of the current earnings reports, and touch on a few interesting tidbits like Amazon's softness in e-commerce and Intel's moment of reckoning.

Also, when we recorded this, markets were teetering on the edge of meltdown. So get ready for some adjacent chat there.

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