That Was The Week

Hat Tip to this week’s creators: @BrankoMilan, @europressos, @AfPalasciano, @adam_tooze, @MCC_Brussels, @Norm_Lewis, @KateClarkTweets, @Alex_Lazarow, @AABerwick, @BenFoldy, @peternixey, @rhodgkinson, @andyjayhawk, @_odsc, @Kantrowitz, @amir, @steph_palazzolo, @Kyle_L_Wiggers, @girlstothefront, @mcbridesg, @geneteare, @elonmusk

Contents

Editorial: 

Essays of the Week

Can an international economic system exist in the world of nationalisms?

Draghi Says EU Itself at Risk Without More Funds, Joint Debt

Draghi's view of Europe: Investment, R&D & the US-EU comparison

Musk, Telegram and the European Assault on Online Speech

Venture Capitalists Turn to Novel Methods to Return Cash

The Rise Of Fintech Families

The Shadow Dollar That’s Fueling the Financial Underworld

Startup Success - How to Measure it?

Illiquidity is a feature, not a bug

Video of the Week

Elon Musk Live at All In Summit

AI of the Week

Waymo and Uber expand their robotaxi partnership to Austin and Atlanta

New AI Chip Surpasses Nvidia, AMD, and Intel with 20x Faster Speeds and Over 4 Trillion Transistors

Is OpenAI’s New “o1” Model The Big Step Forward We’ve Been Waiting For?

OpenAI COO Says ChatGPT Passed 11 Million Paying Subscribers

OpenAI In Talks To Raise $6.5 Billion at $150 Billion Valuation

Keen On: Gary Marcus on How to Tame Silicon Valley’s AI Barons

Mistral releases Pixtral 12B, its first multimodal model

News Of the Week

Why the SpaceX spacewalk is such a huge deal

Silicon Valley’s Y Combinator to Double Number of Cohorts Per Year

The Unicorn Board Adds 8 New Companies, With One Newly Minted Entry Valued At $16B 

Startup of the Week

AI-Powered Work Assistant Glean Doubles Valuation To $4.6B In Less Than Seven Months

X of the Week

Australian Government is “Fascist” - Elon Musk

Hat Tip to this week’s creators: @albertwenger, @chaykak, @washingtonpost, @pxlnv, @gideonrachman, @paulg, @KateClarkTweets, @scottehartley, @geneteare, @jesslivingston, @ycombinator, @garrytan, @rhodgkinson, @signalrank, @jordannovet, @erinkwoo, @markgurman, @Kyle_L_Wiggers, @CovariantAI, @_thatstartupguy

I am still on my summer hiatus, but Andrew’s travel was postponed, and he wanted to do a show. So here it is, video only. Enjoy, and see you on August 16th.

Hat Tip to this week’s creators: @jaredheyman, @PeterJ_Walker, @cartaInc, @Om, @davemcclure, @vntrcapital, @mgsiegler, @sarahfielding_, @elevenlabsio, @fredwilson, @markgurman, @e_howcroft, @UtkarshShetti, @steph_palazzolo, @runwayml, @EricHSchwartz, @Cloudflare

Contents

Editorial: Rise of the Algorithms: Private Markets Indexing is Coming.

Essays of the Week

Larry Fink says BlackRock’s deal to acquire Preqin could lead to indexing private markets.

On Rebel Theorem 3.0

First Cut—State of Private Markets: Q2 2024

The Future of Writing: How AI Will Reshape Our Tools

Video of the Week

From Startups to Secondary VC Investments: Dave McClure's Insights from 500 Startups and Paypal (VNTR)

AI of the Week

Lowering the Boom on the New Boom Times

You can now get AI Judy Garland or James Dean to read you the news

The USV Librarian

Apple Poised to Get OpenAI Board Observer Role as Part of AI Pact

OpenAI CTO Admits Creative Jobs Can Be Harmed By AI

News Of the Week

Circle Becomes First to Receive License in the EU to Issue Stablecoins Under MiCABritain's Revolut surges to record profit as it seeks $40 bln valuation

Kuo: New AirPods to Feature Cameras for Enhanced Spatial Experiences

Startup of the Week

Runway, an AI Video Startup, in Talks With General Atlantic for $4 Billion–Valuation Fundraise

X of the Week

Cloudflare AI bot blocker

Hat Tip to this week’s creators: @PeterJ_Walker, @mgsiegler, @jglasner, @lennysan, @AndreRetterath, @alex, @pmarca, @nklsrh, @dmehro, @timmarchman, @adamclarkestes, @Kyle_L_Wiggers, @MTemkiContents

Editorial: 

Essays of the Week

Is there an AI Bubble?

Robotics Startups On The Rise In 2024

Behold: the Hackquisition

The Entrapment of Apple

The social radar: Y Combinator’s secret weapon | Jessica Livingston

Can We Fully Automate Startup Investing?

The 2024 IPO I’m Most Excited About

Video of the Week

The true story -- as best I can remember -- of the origin of Mosaic and Netscape.

AI of the Week

I Will F*****g Piledrive You If You Mention AI Again

Perplexity Is a B******t Machine

What, if anything, is AI search good for?

Andrew Ng plans to raise $120M for next AI Fund

No MacBook Air Killer, All MacBook Air Filler

Hebbia raises nearly $100M Series B for AI-powered document search led by Andreessen Horowitz

News Of the Week

No, a $100m + Series A Round isn’t Normal

It takes ten years to succeed as a Startup

Elon Musk has won $56bn pay package despite judge ruling it void, Tesla argues

Kleiner Perkins announces $2 billion in fresh capital, showing that established firms can still raise large sums

Startup of the Week

Webtoon Rises Modestly In IPO Debut

X of the Week

AI Poetry Camera? Seriously?Editorial

It’s Sunday, two days later than I usually send this out. Two excuses. I was in recovery from PTSD after the “debate.” And then I almost had a relapse watching England in the Euro last 16 game against Slovakia.

I’m unsure of my mental state now (we won 2-1 in extra time). But the other, more important “game” is still undecided.

But in AI, it seems everybody is getting PTSD from wild allegations that AI might kill the human race to now new suggestions that there may be a bubble in valuations for early-stage companies.

The items in this week’s newsletter are really good. MG Seigler, Alex Wilhelm and Peter Walker dominate. The first two are former TechCrunch writers (hats off to Mike Arrington for his talent-spotting). Peter is the leading contributor to VC data; he has access to Carta data and uses it super effectively.

MG and Alex have relatively new newsletter sites - SpyGlass and Cautious Optimism, respectively). They are great observers and even better writers - subscribe. Links in their articles are below.

Big tech seems to be running scared of AI regulation. This from MG Seigler’s : No MacBook Air Killer, All MacBook Air Filler

Microsoft really s**t the bed here both from a security and PR perspective. And what's left sounds very 'meh'. It's almost like Microsoft forget the 'Copilot' part of 'Copilot+ PCs'. And certainly they forgot the '+' part.

MG also wrote about the EU and Apple, claiming that the EU is seeking to entrap Apple by refusing to state what Apple can and cannot do with its AI intentions. Apple, in response, is saying it will not launch AI in Europe until the EU says what product flexibility it has.You have to smile. Apple plays this game super well.Finally, he has ‘Behold the Hackquisition’, which shows how big tech avoids M&A blocks by buying teams instead of companies.

Alex Wilhelm’s anticipation of the Circle (USDC) IPO is a great example of his regular style and substance.

Peter Walker heads up data storytelling at Carta (great title). This week, he also has three pieces, all originally posted on his LinkedIn profile.

‘Is there an AI bubble’ (my title) examines the spread of Series A venture funding valuations. He separates the percentiles and measures the spread between them, noting that the gap between the 50th percentile and the 95th is the widest ever - even wider than 2021 and 2022. This is for SaaS rounds that include much AI.

In H1 2019, the 50th percentile for pre-money valuations was $26M (Series A SaaS companies only, primary rounds). The 95th pct at that time was $96M.Now that's a pretty large gap. We're talking a 3.7x jump from the middle to the top end.But today things are even more skewed.𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 𝗦𝗮𝗮𝘀 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝗛𝟭 𝟮𝟬𝟮𝟰• 50th pct: $44M• 95th pct: $203M• Gap: ~4.6xThat 4.6x gap is the largest of the past 5 years and likely the past 10, though I don't have full data to prove it.

Regular readers will know my point of view. Yes, there is a bubble in that smart money wants to be in the best AI companies and will compete on price to secure equity. And no, there is no bubble because this chase for future-winning companies is entirely rational. At a time when the entire planet is about to become AI users - even without being aware of it - enormous value will be created. The price of current participation is far below the actual value that will ultimately be created.