Cloud tailwinds ☁️
Synthetic media, reverse talent drain, and battle for open source
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Capital talks 💰
Human influencers won’t be the only ones capable of conducting a YouTube audience in the future — that’s the big bet Lightspeed, alongside AV8 Ventures, is making with its $1.5 million check into synthetic media production platform, Rephrase.ai.
Rephrase uses artificial intelligence to generate videos of a human-being talking, barely from simple text, and the results are fascinating. Delivering the platform as a service to enterprises could help save costs of video production, for internal use cases such as creating training material as well as outbound efforts like sales and marketing.
Fresh capital will go towards improving the platform and strengthening commercial presence in North America. Well, in a world where video content is increasingly becoming key to capturing attention, it looks like Rephrase has its work and opportunity well cut out for itself.
Turning our heads to ecommerce —
Enemies of your enemy become your friends… Flipkart and 1MG seem quite interested in living by this maxim. After Reliance scooped up a 60% stake in Netmeds and Amazon made its own moves to enter the ePharmacy space, Flipkart has chosen the partnership route instead, making 1MG available to all Flipkart shoppers through its native mobile app.
Flipkart customers will be able to get their prescriptions fulfilled right inside the shopping app apparently and 1MG will provide the service in the background. The unique partnership, if worked out well, could be a strategic win, giving both companies a low cost test bed to try out integrations as well as cultural commingling, before they decide if they want to officially marry at some point.
Takeaway: over the last year, ePharmacy sales in India have soared to $1.3 billion and this is an increasingly hot arena for all ecommerce companies. Consolidation is inevitable.
While we’re on the subject — 🛒
Regulatory filings indicate that Walmart finally closed on the remaining $560 million of the $1.2 billion capital it had committed to invest in Flipkart, earlier in July. Walmart has been allotted 39,57,960 equity shares in Flipkart’s Singapore unit at $141.6 per share. The deal estimates Flipkart’s valuation in the $25 billion ballpark.
In the light of the pandemic driven demand boom and favorable outlook towards ecommerce companies worldwide, Walmart is slowly grooming Flipkart for an IPO, and a $50 billion range is currently being aimed for.
Making capital work where regulation failed 😒
The US’ agenda to reduce its dependence on H1-B and better equip its citizens for tech jobs took an odd turn, with the Department of Labor foregoing the regulatory hammer in favor of dollars this time, announcing a $150 million grant for upskilling workforce for tech jobs.
The mandate disclosed was very vague too — unclear whether the department cares about upskilling those it believes are under-paid and under-utilized on the H1-B program, or if it exclusively wants to focus on training citizens for H1B jobs.
Guidelines suggest anyone above age of 17, out of secondary school, unemployed or underemployed will be eligible, especially those who need a particular specialization to retain their job or get promoted in the H1-B occupation sector. Employers will be called upon to work with the department.
Once a widely sought after program, the visa has come under scrutiny for misuse, often unduly finding itself at the center of the government’s tug-of-war with illegal immigration. Hundreds of thousands of white collar professionals remain in a limbo.
What matters here: there may be a silver lining however — emerging markets like India cheer a negative talent drain put into motion by regressive immigration policies, which could pay dividends for our local technology ecosystem in a few years.
More like closed AI 🤔
Open AI is taking a lot of heat for being “sold out” to Microsoft, after news broke out that Microsoft has bought rights to the GPT-3 AI model “exclusively”.
Backstory: GPT-3, the context based text generating model that showed freakishly promising results in early tests was running under an invite-only beta program. Early noise created on Twitter seemed quite promising and developers and enthusiasts were extremely excited about seeing GPT-3 in action and put to some good use.
After all, that was the big promise—an open source AI model, designed and trained by some of the best minds in tech, backed by Sam Altman, Ilya Sutskever, Ried Hoffman, Peter Thiel and all the big names from the valley...
But things changed: ...when Microsoft announced last week that they have “exclusively” licenced GPT-3, to be delivered as an Azure API, strengthening the Microsoft cloud ecosystem. Language of the release is a bit elusive, with limited details on how “exclusive” is defined. Microsoft spokesperson claims the deal gives them sole access to the underlying code. Will another version be launched for the free web? Will Microsoft make it free through Azure? Are these tactics meant to scare AWS and Google Cloud Platform? It's all foggy.
Here’s Elon Musk had to say about this thing (note, Musk is listed as one of the co-founders of the initiative) ...
We take it with a grain of salt because Elon has been openly critical of Open AI a couple times in the past, often complaining about limited insight and access, but this time, the allegations may be warranted.
The fact that Microsoft had invested a $1 billion in Open AI in the recent past further complicates the matter. Early champions of GPT-3 are particularly livid because innovators generally tend to hate licensing and toll seeking, part of the reason why the open source model has gained so much momentum, and Open AI taking this turn is a punch in the gut for the rebel technologists.
However, the mood is entirely different if you’re a Microsoft shareholder. For decades enterprise clients have been waiting to get a glimpse of AI magic, and tickets to this exclusive show could end up seriously boosting Azure’s market share in the long run.
Bottomline: at a time when Big Tech keeps getting bigger, independence is everything. It’s hard for Open AI to have it both ways. Summoning developer momentum around its ecosystem without being explicitly clear about how all those democratized efforts will enrich Microsoft won’t be easy.
Digital transformation tailwinds ☁️
Global adoption of cloud services rapidly accelerated in the wake of the pandemic and continued momentum in the space has attracted venture interest like never before. CB Insights estimates that cloud deals worldwide attracted almost $3 billion in private capital in the second quarter, between April and June.
About 97 deals got done during this time, a 3 year high for the industry. For comparison, about 75 deals had been wrapped up in 2019 during the same time. With the developed world in somewhat of an economic recovery already, the count is further estimated to accelerate through the remainder of this year.
Some of the biggest deals of the quarter has included Cohesity’s $250 million raise, Snyk’s $200 million, Innovium’s $170 million, and Cockroach Labs’ $86.6 million raises. By end of the year, 2019’s record of $10.4 billion in the sector, via 260 deals is easily set to be crushed. Read more.
Tweet of the day -
We spent some time over the weekend digging into the life story of the founder and CEO of cloud security company ZScaler. Hope it helps kick off your Monday right.
What else are we snackin’ 🍿
✋ No room for confusion - As the US prepares for a very close election race, Google will block election related posts on its platform after polls close on Nov 3rd. Advertisers will not be able to run ads referencing candidates, the election, or its outcome, as a large number of votes will be counted after election day this year due to mail-in voting.
💪 Taking matters into own hands - the group of advertisers who had boycotted Facebook recently has launched a rival oversight board to review the company’s content moderation practices.
🗼 Too late, but welcome - Vodafone and Idea will upgrade its existing 3G customers to 4G across all markets. It will continue to provide basic services to its 2G customers while the ones currently using 3G services will be upgraded to 4G and 4G based IoT services soon — a critical move as India prepares to capture new wireless generations more rapidly than in the past.
👏 Boosting handicrafts - Amazon is set to host a handicrafts mela on its platform September 26 to October 10. 55,000 unique products will be showcased from artisans all over the nation.
🚀 Upping the game against incursion - The DRDO has kickstarted a new process for production of Pinaka rockets, a free flight artillery rocket system having a range of 37.5 km, and has handed over details of their mass production to the Directorate General of Quality Assurance.
🚗 More auto jobs slashed - Mitsubishi motors will cut around 500-600 jobs mostly from management in Japan in a bid to cut costs after it was hurt by a plunge in sales due to the coronavirus pandemic.
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