The Week in Generative AI: August 30, 2024 edition

Welcome to TheWeek in Generative AI,a weekly roundup for marketers from Quad Insights that sums up the latest news surrounding this rapidly evolving technology.

OpenAI in talks for new funding round, seekingmammoth $100+billion valuation

With a current $86 billion valuation, OpenAIis in discussions to launch a new funding round, which would aim to raise additional billions and bring the AI giant's valuation to over $100 billion, the Financial Times' George Hammond reports. The round is set to be led by Thrive Capital, which will invest $1 billion, per Hammond's sources.

See also:"OpenAI shows 'Strawberry' AI to the Feds and Uses It to Develop 'Orion'"(The Information)

Previously:"OpenAI partners with Condé Nast," from last week's edition of this column.

California passes AI safetybill

The California state legislature on Wednesday passed SB 1047, a bill that requires "safety testing for advanced AI models," Reuters' Anna Tong reports. Governor Gavin Newsom now has until Sep. 30 to either sign the bill into law or veto it, Tong notes.

AI leaders have been divided over SB 1047, Axios' Ina Fried and Ashley Gold report. While Elon Musk offered support for the bill, OpenAIand others have opposed it, suggesting that its passage could fuel an exodus of companies from the state, Fried and Gold note.

See also:"OpenAI, Anthropic Agree to Work With US Institute on Safety Testing"(Bloomberg)

Previously:"The E.U. passes the world's first major act to regulate AI," from the March 15 edition of this column.

Amazon targeting October launch for AI-powered, subscription-basedAlexa

Following reports in May that Amazonwould release an updated, AI-powered and subscription-based version of its voice assistant Alexa, the tech giant is now targeting an October release with a potential $10 monthly subscription fee, The Washington Post's Shira Ovide reports. The AI version of Alexa would be called Alexa Plus with non-AI versions of the device being rebranded as classic Alexa, Ovide notes.

Citing a report from The Wall Street Journal, The Verge's Emma Roth notesthat Amazon's Alexa subscription strategy aims "to reverse the over $25 billion in losses that [Amazon's] devices business incurred from 2017 to 2021," largely attributed to the various Echo devices on which Alexa runs.

Previously:"Amazon plans an AI upgrade and monthly subscription for Alexa," from the May 24 edition of this column.

See also:U.S. voice assistant users are projected to increase to 170.3 million by 2028 - up from 145.1 million in 2023, as we noted in last week's edition of this column.

See also:"LG's new smart home hub has a built-in voice assistant"(The Verge)

More AI strategy:

• "BigCommerce is adding more AI tools to its platform with the help of Google"(Modern Retail)
• "Unilever Expands AI Image Capture To Further Automate Ice Cream Restocks"(Consumer Goods Technology)
• "Target CFO says GenAI tool is boosting worker efficiency"(CFO Dive)
• "Midjourney announces hardware team and opens to applicants"(Venture Beat)
• ICYMI:"Procreate's anti-AI pledge attracts praise from digital creatives"(The Verge)

Quote of the week

"What we often don't realize about the large language models powering products like Claude and ChatGPT is that they don't think the way we do. In both diffusion models and LLMs, generative AI continuously makes mistakes when it comes to spelling, or solving for anagrams of letters. As it turns out, that's because these systems don't process information by looking at the letters that make up a word - they might not really know what letters even are."

-TechCrunch's Amanda Silberling in this week's edition of the "TechCrunch Minute,"in which she discusses why gen AI chatbots can often handle complex tasks quickly but sometimes struggle with simple ones, such as spelling the word "strawberry." Silberling adds that OpenAI's new model in development, dubbed "Strawberry," could aim to rectify these reasoning issues.

Apple expected to debut AI-powered iPhone atSeptemberevent

Applehas announced its next special event for Sep. 9, at which the AI-powered iPhone 16 is expected to debut, CNN Business' Ramishah Maruf reports. The anticipated launch comes in the wake of Apple's release of a beta preview of Apple Intelligence in late July.

Previously:"Apple releases first preview of Apple Intelligence," from the Aug. 2 edition of this column.

More AI tools & advancements:

• "Butterflies AI launches Butterflies Clones: First Time Anyone Can Create Themselves as AI Characters Engaging with Others On a Social Media Platform"(Business Insider)

Nvidia delivers another impressive quarter but sees shares dip

With "AI is a bubble" chatter heating up, Nvidiaon Wednesday reported fiscal Q2 earnings that exceeded analysts' expectations; however, the chipmaker saw its shares fall 4% in after-hours trading following the earnings announcement, The Associated Press' Sarah Parvini reports. Throughout the AI boom, Nvidia has outperformed expectations quarter after quarter, and that trend continued with Q2 revenue that rose 122% year-over-year - but given that Nvidia shares then dipped, investor sentiment seems to suggest that the company's sky-high valuation may need some recalibration, Parvini notes.

Previously:"Goldman Sachs sees challenges ahead for AI ROI," from the July 19 edition of this column.

See also:"MediaPost explores AI's impact on Microsoft's Q4 2024 earnings," from the Aug. 2 edition of this column.

More AI financial results:

• "GitHub Copilot competitor Codeium raises $150M at a $1.25B valuation"(TechCrunch)

Further reading

AI controversy:

• "AI Doomers Had Their Big Moment"(The Atlantic)
• "When A.I.'s Output Is a Threat to A.I. Itself" (The New York Times)
• "DeepMind workers sign letter in protest of Google's defense contracts"(TechCrunch)