GM Readers! ☀️

Welcome to the 15th issue of Evolving Internet Insights.

Quote we’ve been thinking about: Meta’s President of Global Affairs, Nick Clegg’s take on the benefit of open source models.

“With the … wisdom of crowds you actually make these systems safer and better and, crucially, you take them out of the … clammy hands of the big tech companies which currently are the only companies that have either the computing power or the vast reservoirs of data to build these models in the first place.”

Thanks for reading!

Liang and Dan 🙌

🌰 In a Nutshell

• New York City plans to use AI and announces a plan for AI regulation

• The number of Gen AI VC deals declined 27% in Q3

• Baidu launches ERNIE 4.0, its GPT-4 Competitor

• Teens spend almost 5 hours on social media per day 🤯

💾 Byte-sized Stories

This week’s top stories with our insights on top.

1. New York City Plans To Use AI 🗽

⚡️ TL;DR: The New York City government is rolling its own chatbot to help its residents answer common questions related to city services and initiatives: loans, licensing, compliance, and business incentives. The chatbot is trained on over 2,000 pages of information from the MyCity business website. Implementing this chatbot is part of New York City’s broader plan to regulate and implement AI across government agencies.

⚡️ So What: Even though spotty cell reception is still a hallmark of NYC’s subway system (something as New Yorkers we wish would change 😮‍💨), the City wants to stay ahead of the curve when it comes to AI technology. NYC’s “AI Strategy” outlines that within the next year, the city will hold listening sessions with the public, brief city agencies on how to use AI in their daily operations, and secure buy-in from constituents and city employees. This city-wide exercise is as much about risk management as it is about technology.

⚡️ Zoom Out: At the onset of new technological paradigms, forward-thinking city governments want to their cities to become the place where all the action happens. This is good for cities on many fronts – from creating jobs to promoting the local economy.

Miami became widely-recognized as a “tech hub” during the pandemic when its Mayor, Francis Suarez, tweeted “how can I help?” This rather simple message went viral and led many tech-oriented workers to relocate from Silicon Valley to Silicon Beach. NY is thinking along similar lines and wants to be seen as a place where the AI industry can converge.

After all, this is the concrete jungle where dreams are made.

Read More Here, Here

2. Number of Gen AI VC Deals Declined 27% in Q3 📊

⚡️ TL;DR: The number of venture capital deals in the generative AI space declined 27% in the 3rd quarter of this year. While the total value of all deals increased 39% to $6.1B, most of that was thanks to Amazon’s $4B investment in Anthropic (see our coverage in ⚡ Insights 12). Everyone is wondering: is the AI boom cycle finally cooling down?

⚡️ So What: At the onset of a new boom cycle for an emerging technology, there is always a rush to find and back “the winners.” This year alone, there have been many mega deals.

• Open AI raised $10B from Microsoft in January

• Anthropic raised $300M from Google and then raised another $450M from Salesforce and Zoom a few months later.

• Inflection AI raised $1.3B from Microsoft and Nvidia

But once capital is deployed, unless credible competitors surface tackling new and more important use cases, VCs will double down on their existing portfolio companies.

⚡️ Zoom Out: Typically, investors who have placed their bets on a specific company go to great lengths to support that company. For example, if a VC has invested in a company building a foundational model, they usually don’t invest in another company doing something similar due to a conflict of interest. Right now, it seems like solutions from existing players have exhausted potential use cases in the industry, and investors are less excited to continue funding a landscape of growing competition. So, while AI is a new technology, until there is a step change in the “look and feel” of startups going after new use cases, funding might continue to slow down.

Read More Here, Here 

P.S. Our next Brainfood Issue will cover the Open Source AI Movement.

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3. Baidu Launches ERNIE 4.0, Its GPT-4 Competitor 🪤

⚡️ TL;DR: Baidu, China’s leading search company, released and demoed ERNIE 4.0, its next generation LLM and claims it could perform as well as GPT-4. In the demo, Baidu CEO showcases ERNIE Bot’s chatbot capabilities with the new and improved ERNIE 4.0 LLM powering it by: (1) generating a car commercial in minutes, (2) solving complex math problems, and (3) creating a plot for a martial arts novel from scratch. ERNIE Bot has a fully Mandarin interface and has ~45M users, lagging OpenAI’s ~180M users.

⚡️ So What: Despite the news, investors were unimpressed. OpenAI’s first mover advantage and pace of product improvements has captured mindshare that makes it the de facto comparison for companies building LLM and AI products. Even Baidu’s CEO said, “The new ERNIE Bot is not inferior in any aspect to GPT-4,” which highlights how Big Tech companies like Baidu recognize the “OpenAI threat” and are playing catch up (read: investors want better, not just as good).

⚡️ Zoom Out: 40% of the world’s LLMs are developed in China, second only to the US with 50%. Since regulation is a key part of the success of an emerging technology paradigm, how both countries handle regulation will have downstream impacts to their respective AI industries. Given the size and influence of the US and China on the global stage, other regions in the world look to their leadership as they set their AI policies.

Read More Here, Here, Here 

📊 Let’s Get Graphic

One visual we couldn’t stop thinking about.

Teenagers spend almost 5 Hours on Social Media per Day

⚡️ Takeaway: 5 hours a day on social media feels like a lot, considering the waking day is 16 hours. This means teens are spending nearly 30% of their (waking) time on social media. There have been numerous studies that highlight the negative impacts on teenagers using these platforms. Looking at the chart above, a handful of companies command the lion share of attention – putting them in a powerful position.

🐇 Down the Rabbit Hole

Some deeper dives to help you get smarter on emerging tech.

1. State of AI 2023: report by Air Street Capital highlighting the key themes, trends, and predictions for AI.

2. Hiring a Community Manager Guide: deep dive into thinking about how to hire a Community Manager. While the essay is framed for Web3, it is applicable to community managers in general.

3. Sam Altman on Joe Rogan: Sam Altman on Joe Rogan’s Podcast discussing how AI will change society.

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