Daily Wave | March 14, 2023

1. AI secures the bag...

Move over unicorns, generative AI startups are the new "it" thing! This week, Adept AI raised a whopping $350 million in what they're calling "part of our Series B." With a post-money valuation of at least $1 billion, it's clear that investors are hungry for the company's AI models that can turn text commands into actions. In other words, this technology could make our lives easier, from browsing the internet to navigating enterprise software tools.

But Adept AI is not alone. Anthropic, another mysterious AI company, is raising $300 million at a valuation of $4.1 billion. You might not have heard of them yet, but they have an AI model called Claude that's like GPT, but more bonkers. That might be why Google invested $300 million in them last month. But the main reason? Computing resources.

But it's not just startups that are turning to AI. Morgan Stanley is rolling out an advanced chatbot powered by OpenAI's latest technology to help the bank's army of financial advisors. The bank has been testing the artificial intelligence tool with 300 advisors and plans to roll it out widely in the coming months. The idea behind the tool is to help the bank's 16,000 or so advisors tap into the bank's enormous repository of research and data.

And it's not just Google that's getting in on the action. Salesforce Ventures launched a new $250 million generative AI fund last week. Despite a rocky venture market, these generative AI startups are still going strong. So, if you're looking for a new investment opportunity, look no further than the AI craze. Who knows what next week will bring?

2. Indian Startups take a hit

The Indian stock market is facing a new wave of uncertainty with the failure of Silicon Valley Bank (SVB) and Signature Bank in the US, causing a ripple effect on global equity markets. Investors have lost about Rs 7.3 lakh crore in the last three trading sessions, with the Sensex crashing 2,110 points. The fear gauge index India VIX jumped 20%, and all sectoral indices ended in the red, with small and midcaps being the worst affected.

Despite analysts and brokerages stating that Indian banks are well-placed in a tight regulatory framework, bank stocks were among those worst affected during the sell-off. The collapse of SVB has caused turmoil for some of the biggest Asian companies and has led to calls for a domestic financial ecosystem to support startups in India.

Market experts do not believe that the SVB crisis will have a significant impact on India or the domestic banking system. However, the sentiment impact can be negative, with over 50% of over 100 participants in a poll on the WhatsApp group of all Y Combinator founders in India having more than $250,000 in their SVB accounts in the US, including some with upwards of $1 million. The Indian government is looking at ways to facilitate the transfer of deposits from SVB to Indian banks and exploring the option of making credit lines available for startups whose deposits were going to be made whole but have no access to it currently.

3. Meta Slashes 10,000 Jobs!

Looks like Facebook's parent company Meta is going through a tough time. They are cutting 10,000 jobs and won't fill 5,000 open positions to save costs. In November, they had already announced 11,000 job cuts, which was around 13% of their workforce at that time. The company and other tech firms have been hiring aggressively for the past two years and have started to let go of some workers lately. Meta had a decrease in profits and a drop in revenue for the third consecutive quarter in February. Due to this, they are planning to reduce their recruiting team size and make further cuts in their tech groups by late April and business groups by late May. Meta is investing billions of dollars in realigning its focus on the metaverse, which is why they are taking these cost-saving measures. The company's CEO, Mark Zuckerberg, said, "This will be tough, and there's no way around that. It will mean saying goodbye to talented and passionate colleagues who have been part of our success." He also mentioned that part of their work involves removing jobs to build a leaner and more technical company, and this will improve their business performance to enable their long-term vision. I guess it’s time to update those LinkedIn profiles!

It seems like Meta and other tech companies have been hiring like crazy for the past couple of years, but now they're starting to let some of those workers go. In fact, Meta's profits have been falling and their revenue has been declining for three consecutive quarters. To make matters worse, they're also facing tough competition from TikTok and a downturn in online advertising.

It's not just Meta that's cutting costs, though. Amazon recently paused construction on their second headquarters and had the biggest round of layoffs in their history. It seems like many fast-growth companies, especially in the tech sector, are preparing for some tough economic times ahead. Zuckerberg even said that we should prepare ourselves for the possibility that this new economic reality will continue for many years. Looks like we start saving those pennies… That's all for today, people. See you tomorrow!