GM Readers! ☀️

Welcome to the 6th issue of Evolving Internet Insights — a weekly newsletter curating the top stories and our insights on the “Evolving Internet,” which covers everything from AI, Web3 and everything in between.

We made a big change after getting some feedback from our community. Thank you again to those who gave honest thoughts on how we can improve! 🙏

Moving forward:

• On Tuesdays, we will send out our 🧠 Brain Food section as a standalone newsletter, covering one deep dive topic around emerging tech.

• On Fridays, we will send out our Insights newsletter (this newsletter) covering the top stories around emerging tech.

Thanks for reading!

Liang and Dan 🙌

P.S. This newsletter will evolve like the internet does, please give us feedback in the comments section or reply directly via email! 🙏

🌰 In a Nutshell

• Rumors around Open AI running out of money do not add up

• NYTimes fights back against AI by changing its T&C

• Major gaming studio is launching a Web3 game

• Public opinion is largely worried about AI

💾 Byte-sized Stories

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

1. Speculation Around OpenAI Running Out of Money 💸

⚡️ TL;DR: Earlier this week, there was a story floating around that the cost of running ChatGPT might bankrupt OpenAI in 2024. This article stated that it costs OpenAI $700,000 per day to run ChatGPT. It also went on to say that with increasing competition from other Big Tech players like Meta plus a constrained supply chain in GPUs, Open AI runs the risk of running out of money. It is a bold claim about one of the leading companies in the AI space. Others were quick with their rebuttals, calling out that OpenAI had raised $10B from Microsoft last year and likely could get more funding if they wanted.

⚡️ So What: Like any other venture-backed, deep tech business, the trajectory of Open AI feels quite normal – raise an ungodly amount of money, capture market share, become the de facto solution, and then focus on profitability.

While the initial hype and magic of ChatGPT may be subsiding (according to SimilarWeb, ChatGPT has experienced a decline in mobile and desktop visitors for the second straight month), it is important to zoom out.

Let’s do some quick math (we are business school types 🤓).

Say ChatGPT has 100M users. Users can pay for a premium subscription for $20 per month, which comes out to about $0.65 per day in gross daily revenue per user. The question is how many users would need to subscribe to premium for Open AI to cover the $700K per day costs. The answer: ~1.1M users. Said another way, if just 1% of the user base converts into premium subscribers, then their daily operating costs would be covered – this seems like an achievable goal for a company of this scale and with this much public attention.

But what if OpenAI is not breaking even and cannot cover the $700K costs, then the question for a venture-backed company like Open AI, operating in the highly competitive AI space is, is it still worth it to spend money supporting ChatGPT? We think the answer is a resounding “yes” because the user interactions with ChatGPT is making the ChatGPT product better (read: network effects), which helps OpenAI build a defensible moat.

More broadly, OpenAI also has an API (Application Programming Interface, which is a set of rules and tools that allows different software applications to communicate with each other) business where organizations can plug directly into ChatGPT and pay per “API call” (read: pay per use). Since API usage figures are not reported, it is unclear how the business as a whole is doing. Though, even if the company is running out of money, Sam Altman, one of the leading technologists in Silicon Valley can probably raise more money from VCs and other Big Tech companies.

Btw, OpenAI announced they acquired a company called Global Illumination, a company leveraging AI to build tools for creatives. 👀 

So in short, we think OpenAI is fine.

Read More Here, Here, Here

2. NYTimes Fights Back Against AI 🥊

⚡️ TL;DR: The New York Times updated its terms and conditions and explicitly stated that its prohibiting its content from being used in the development of “any software program, including, but not limited to, training a machine learning or artificial intelligence (AI) system.” The new T&Cs also specified that automated website crawlers cannot be used to collect content from the website without the written permission from NYTimes.

⚡️ So What: Media companies have long pushed back on AI, particularly with how AI companies are training their models on content that news outlets and publishers generate. As we covered in a previous issue, a coalition of media companies are planning to sue AI companies because AI is disrupting the business model built on top of content from media companies without compensating the media company for that content. It’s likely that other media companies will follow suit with the NYTime’s strategy as there is a strength in numbers when it comes to an industry pushing back (à la the SAG-AFTRA strikes in Hollywood). Everyone is quickly realizing that in the Age of AI, data is the new oil for everything and effectively utilizing it while protecting the most important resource is critical for survival.

Given that these policies only apply on a “go forward” basis, what is unclear is how companies will handle this in hindsight since AI models like ChatGPT are already trained with the internet’s data up to September 2021. Also, even if there were ways to enforce, how would a company argue (in a potential IP lawsuit) and measure the relevance and impact of their data in the grander schema of these large language models.

Read More Here, Here

3. Zynga Is Launching a Web3 Game 🎮

⚡️ TL;DR: Zynga, a subsidiary of the gaming giant Take Two Interactive (owners of the Grand Theft Auto, NBA 2K, and BioShock franchises, among others), is launching a blockchain based game called “Sugartown.” Players will need an NFT to access the game and can earn in-game currency. Zynga created popular games like Farmville and Words With Friends, which were two mobile and social media-driven franchises that pioneered the mobile gaming industry.

⚡️ So What: Gaming has been touted as a core use case for blockchain and Web3. Take Two and Zynga are both experienced gaming studios who have deep experience with building business models off of in-game items and microtransactions. "We're excited to launch ‘Sugartown’ both as Zynga’s first Web3 game and as the first new Web3 game with an original IP," said Matt Wolf, Zynga’s vice president of Web3. As we’ve stated before, the name of the game (no pun intended) in Web3 is adoption. Zynga is introducing Web3 gaming to its 200M+ monthly active users. This could be a critical moment for Web3 gaming as two powerhouses in gaming double down on Web3.

Read More Here, Here

📊 Let’s Get Graphic

One visual we couldn’t stop thinking about.

Poll on Responsible AI 🤖

⚡️ Takeaway: A recent survey of Americans shows that the public opinion largely leans towards we should slow down AI development, be more conservative and put in more guardrails. Interestingly, 82% agree that “tech company executives can’t be trusted to self-regulate the AI industry.” Since AI is a technology that grows exponentially, the industry might be defined by winner-take-all type of dynamics … so we have one chance to get this right. 🎯

🧠 Brain Food

One focus topic to feed your brain.

Responding to feedback from our community (thank you so much 🥰), we are going to send Brain Food as its own column on Tuesdays going forward.

The goal of 🧠 Brain Food is to dive deeper into one topic around emerging tech.

Next up in the 🧠 Brain Food newsletter, we will cover how Barbie used Generative AI in its marketing to achieve its viral success.

🐇 Down the Rabbit Hole

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

1. Awesome Generative AI GitHub Repo: A curated set of Generative AI reading materials and resources. As the name suggests, it is awesome!

2. Gen AI Disrupts Thumbnail Making: A deepdive into how Gen AI is disrupting a niche industry – making YouTube video thumbnails.

3. ARK Invests Big Ideas 2023 (updated): A report by investment firm ARK Invest covering areas of emerging tech they are excited by.

🌊 Watercooler Talk

Overheard from our community.

Nvidia, a computing hardware and software manufacturer, has been in the press quite a bit recently (most notably, in our last issue 😉). From their chips being used as collateral for loans to the company joining the “$1T Market Cap Club,” Nvidia has been making moves!

Though, some interesting conversations with our community led us to share the spotlight and highlight a competitor of theirs, Advanced Micro Devices (AMD) and specifically, Dr. Lisa Su, their chair and chief executive officer.

This recent Forbes video profile of Dr. Su had members of our community surprised/excited/puzzled. Here were some of the best takes:

1. “How amazing that one of the most consequential CEOs of this ‘AI era’ is a Taiwanese immigrant female!”

2. “She truly turned around AMD. It will be exciting to see how the competitive dynamics between Nvidia and AMD shake out. Though, I feel like the markets for semiconductors and GPUs will grow rapidly enough for the two to grow uninhibited by each other.”

3. “I can’t believe that she is one of only 53 female CEOs in the Fortune 500!”

P.S. Got some watercooler talk for us? Share your suggestions in our comments section!

📝 Elite Jobs Corner

From our networks, we curate and connect top founders and companies to rockstar recruits.

⚡️[Web3] Founding Engineer at Karma3 Labs

• What: Karma3 Labs is building the reputation layer for the Internet. As more of our lives continue to move online, knowing who can be trusted and who cannot will be critical.

• Who: Founding team has experience launching and scaling Web2 and crypto startups with successful exits. Deep technical and research talent. One of the Cofounders wrote the algorithm that powers how Google ranks pages. 🤯

⚡️[AI] Founding Lead Infrastructure Engineer at Konko.ai 

• What: Konko AI is a fully managed API that allows developers to easily access, evaluate, choose, fine-tune and deploy large language models (LLMs)

• Who: Founding team with operator and technical experience in AI, venture backed startups, consulting, both HBS grads 🤓

⚡️[Operating Role] Strategist, Operator and 3x Founder looking for strategic projects / consulting work. Meet Tricia Jose

• Who: Mission-driven concept-to-execution strategist and operator for impactful products and solutions with 10+ years of experience. 3x founder in fintech/web3 x Future of Work. Started her first company during her MASc in Biomedical Engineering, and her most recent company generated $9M in Enterprise value for Canada’s largest bank.

• Secret sauce: Tricia’s multidisciplinary background across startups, corporate, biomedical engineering, product/ops, community and the arts has allowed her to adapt and solve important problems from unique angles.

• Fun fact: Outside of work, Tricia co-wrote and directed an original musical composed entirely of volunteers that was shown 8 times across 4 cities and raised $300k for local and international charities, and during the pandemic she wrote and published 3 children’s books that made it to the top of Amazon’s recommended list within weeks of publishing.

📣 Call to Action

Are you a potential candidate? You can apply directly and reply to this newsletter with an email asking for us to refer you (please include why we should refer you). What are you waiting for? Take a chance. 🎲

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DISCLAIMER: This post is provided strictly for educational and informational purposes only. Nothing written in this post should be taken as financial advice or advice of any kind. The content of this post are the opinions of the authors and not representative of other parties. Empower yourself, DYOR (do your own research).