June 18, 2023: Nasdaq Seems Stretched, Time For A Breather?

The market had another strong week, especially the Nasdaq, even after some modest losses Friday. With the Nasdaq now appearing stretched from its moving averages, some caution may be warranted, especially with the handful names driving most year-to-date gains. Last week, Dow Jones was up 1.25%, S&P 500 was up 2.6% (best weekly performance since March), Nasdaq was up 3.25% for its 8th consecutive weekly advance. Arm in talks with big clients about investing in IPO, which include, Intel, Alphabet, Apple, Microsoft, TSMC, and Samsung. Salesforce pledges to invest US$500 million in generative AI startups. Microsoft CFO says OpenAI and other AI products will add US$10 billion in revenue. Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in. AMD reveals new A.I. chip to challenge Nvidia’s dominance. Nasdaq announced a US$10.5 billion deal to scoop up a behind-the-scenes tech provider. Bloomberg reported Apple is aiming to release a more affordable AR/VR spatial computer product by the end of 2025. Netflix subscriptions rise as password-sharing crackdown takes effect. US cyber insurance premiums surged 50% in 2022 as increased ransomware attacks and online commerce drove demand for coverage. In Canada, Executives at Shopify began discussing a sale of the e-commerce giant’s logistics business in late 2022, even as they publicly committed to investing more money to build out its fulfillment network, The Information reported on Tuesday. Québec City-based automotive software provider LeddarTech has inked a SPAC deal to go public on Nasdaq. US-made wind and solar components are now cheaper than imports, according to researchers. New guidance from the US Treasury could unleash billions in renewable energy investment. Previously, to make the most of the tax credits available to them, renewable energy project developers had to create complex and expensive tax equity deals. Sophic Client Clear Blue received a $375K order. This contract increases Clear Blue’s 2023 Year-To-Date bookings to $4,975,000, of which $4,325,000 is expected to be recognized in 2023. Dapper Labs made an investment in Web3 gaming company GameOn.

Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) receives $375K order for Esite-Micro systems.

Clear Blue, announced a purchase agreement under which Clear Blue will provide its Esite-Micro power solution to 20 telecom sites in western Africa. The estimated total Lifetime Contract Value for this order, including recurring revenue, is $425,000 of which $360,000 is expected to ship in Q3 2023. This contract increases Clear Blue’s 2023 Year-To-Date bookings to $4,975,000, of which $4,325,000 is expected to be recognized in 2023. The customer is a Mobile Network Operator (MNO) based in Western Africa and has 98 existing telecom sites powered by eSite Power Systems AB (“eSite”), which Clear Blue acquired on January 23, 2023. This order represents the revenue synergies between eSite and Clear Blue. The new Esite-Micro telecom sites will be fully integrated with Clear Blue’s Illumience cloud management and control service, allowing the sites to be monitored and managed remotely by Clear Blue’s service team, and providing Clear Blue with recurring revenue from Esite’s platform, a first, since the eSite acquisition closed. Furthermore, Clear Blue’s Illumience platform could in the future be added to the customer’s existing eSite systems in the field, which is not reflecting in Year-to-Date bookings, but could add $46K of additional recurring revenue. https://bit.ly/461sTSP

Shopify’s (SHOP-TSX, SHOP-NYSE) Deliverr u-turn started six months after acquisition.

Executives at Shopify began discussing a sale of the e-commerce giant’s logistics business in late 2022, even as they publicly committed to investing more money to build out its fulfillment network, The Information reported on Tuesday. Those discussions came roughly six months after the company had completed its acquisition of Deliverr, a fulfillment startup Shopify had touted as a crucial piece of its push into offering merchants fast delivery. When Shopify agreed to buy Deliverr in a mostly cash deal valued at US$2.1 billion, Deliverr was doing around US$130 million in annual revenue and struggled with issues including lost inventory and slow delivery times, but executives okayed the deal in order to speed up the development of its logistics offering, a person familiar with the matter said. Shopify announced last month it was pulling the plug on its logistics business, selling the bulk of the operations to SoftBank-backed freight forwarder Flexport and taking an impairment charge of up to US$1.5 billion. https://tinyurl.com/ykusjzfn

Automotive software maker LeddarTech inks SPAC deal to go public on Nasdaq.

Québec City-based automotive software provider LeddarTech has reached an agreement to merge with Prospector, a publicly-traded SPAC led by former Qualcomm executives. LeddarTech builds systems that help autonomous vehicles understand their surroundings. This SPAC deal, which is expected to close by the fourth quarter, gives LeddarTech a US$348-million pro-forma equity valuation. Once it is complete, LeddarTech expects to become listed on the Nasdaq under the symbol LDTC. With the agreement, which comes about 16 months after LeddarTech closed $140 million in equity Series D funding and debt, LeddarTech is set to secure fresh capital and go public via SPAC at a time when the private fundraising and IPO markets have frozen over. LeddarTech CEO Charles Boulanger said in a statement that this deal will provide LeddarTech with the capital and resources “to take the company to the next level.” LeddarTech anticipates that the transaction will deliver up to $66 million in gross proceeds, including as much as $23 million from the Prospector trust account, and $43 million in convertible private-placement financing from a group that includes FS Investors and Investissement Québec. With funding obtained through this deal, LeddarTech plans to commercialize its first embedded software solutions and expand its product offerings. https://bit.ly/3JgGjjZ

Dapper Labs makes investment in Web3 gaming company GameOn (GET-CSE).

Vancouver-based Web3 game developer GameOn has raised $1.7 million in funding from Lightning Capital and Dapper Labs for its own gaming platform for digital collectibles, PLAYN3XT. Of the $1.7 million, digital-asset investment firm Lightning Capital provided $1.2 million in a series of convertible notes. Dapper Labs’ contribution came in the form of a non-dilutive grant from its $725-million Flow Ecosystem Fund, which invests in developers building apps and games on Dapper Labs’ Flow blockchain. Dapper Labs has made several investments through the Flow fund since its launch last year. This includes JUKE and NFT Genius, two American companies also in the digital collectibles space. The amount that Dapper Labs contributed was not disclosed. Subtracting Lightning Capital’s portion, $500,000 makes up the rest of the funding. https://bit.ly/3Nb1rJx

EvenUp raises US$50.5 million in Clio-backed round for AI that turns raw files into legal documents for personal injury lawyers.

The startup offers a generative AI product that can turn raw files such as medical records, bills, and police reports, into legal documents for injury lawyers. The San Francisco-based company recently closed a US$50.5 million Series B round led by Bessemer Venture Partners. Sameer Dholakia, Bessemer partner and co-lead of the firm’s growth investment practice, will join EvenUp’s board. According to EvenUp, this round brings its total funding raised to US$65 million with valuation of US$325 million. Other new investors that participated include the investment arm of Burnaby-based legaltech startup Clio, Bain Capital Ventures, and Behance founder Scott Belsky. Clio Ventures was launched in 2021 through which Clio backs early-stage partner companies it works with for developing integrations. It recently made an investment in Steno, another legaltech startup, which offers court reporting solutions. https://bit.ly/446ALAJ

Wealth management startup OneVest raises $17 million.

OneVest, the startup that offers what it calls a wealth-as-a-service platform, has raised $17 million in Series A funding. OMERS Ventures led the round, with participation from existing investors Luge Capital, Panache Ventures, AAF Management, FJ Labs, and new investors Fin Capital, Pivot Investment Partners, and Deloitte Ventures. This latest raise places total investment to date in OneVest at $24 million. The raise closed in early June. OneVest’s model is to offer a “wealth-as-a-service” platform to a range of different customers, including consumer FinTech companies, credit unions, traditional banks, and wealth management firms. It partners with companies and operates as the back end for various FinTech services and claims it helps companies launch those products more easily and quickly. https://bit.ly/46a05Yq

Tech talent-sourcing network VanHack secures $3 million for global expansion.

VanHack, a Vancouver-based tech talent sourcing network, has secured a $3 million investment from Texas-based B2B software venture fund Golden Section. According to Golden Section, it will work with VanHack to expand its global presence. Founded by Ilya Brotzky in 2015, VanHack’s software features proprietary AI matching algorithms to improve the efficiency of the hiring process for technical professionals. https://bit.ly/3PldG9j

Arm in talks with big clients about investing in IPO.

SoftBank Group Corp’s Arm is in talks with some of its biggest customers and end users about bringing on one or more anchor investors in the chip designer’s initial public offering (IPO), two sources familiar with the matter said. Arm is talking to at least ten companies, including Intel Corp, Alphabet Inc, Apple Inc., Microsoft Corp., TSMC, and Samsung Electronics Co Ltd., about their potential participation in the IPO, one of the sources said. The talks are preliminary and any decision about an anchor investment in Arm’s IPO won’t come till August, the source added. The investment would not come with any board seat or control, according to the source. Arm plans to sell its shares on Nasdaq later this year, seeking to raise US$8 billion-US$10 billion, Reuters reported earlier in April. Arm’s designs are used to manufacture chips made by most of the world’s major semiconductor companies, including Intel, AMD, Nvidia and Qualcomm. It was not immediately clear what impact any IPO investment by one or more of those companies would have on Arm’s commercial relationships. https://bit.ly/42Pat4G

Salesforce pledges to invest US$500M in generative AI startups.

Showing it’s playing for keeps in the generative AI race, Salesforce announced that it’s growing its Generative AI Fund, the part of the company’s Salesforce Ventures VC off-shoot backing startups developing “responsible generative AI,” from US$250 million in size to US$500 million. Launched in March, the Generative AI Fund has already invested in several firms on the frontier of generative AI tech, including Cohere, Anthropic, You.com, Hearth.AI and newer additions Humane and Tribble. While far from the only fund investing primarily in generative AI, Salesforce aims to differentiate its tranche by prioritizing what it describes as “ethical” AI technologies. Salesforce Ventures has a number of vertical-specific investment funds, including funds aimed at particular geographies such as Japan or Canada and a dedicated AI fund. But the Generative AI Fund is among the VC arm’s largest tranches to date; previous funds ranged from US$50 million to US$125 million. The expansion of the Generative AI Fund coincides with the debut of Salesforce’s AI for Impact Accelerator, the company’s second-ever accelerator program. AI for Impact will grant US$2 million to a cohort of education, workforce and climate organizations to “advance the equitable and ethical use of trusted AI.” https://bit.ly/3qPQ7eg

TCV misses US$5.5 billion fundraising goal, filings show.

Venture firms are feeling the fundraising crunch. TCV, a storied venture firm that has backed the likes of ByteDance and Airbnb, filed securities paperwork on Monday indicating that it has raised US$1.4 billion for its twelfth flagship fund, a nearly 75% cut from its original target of US$5.5 billion, according to documents. The firm also raised an additional US$1.35 billion across four other funds. The freshly-announced assets total US$2.75 billion, which, if all related, is still 50% less than the Menlo Park-based firm’s original target. TCV’s lesser-than-expected fundraising total comes as other growth-stage firms also are raising less money than planned in response to a downturn in the private startups market, especially among mature companies. Tiger Global has cut its fundraising target twice in the last year, while Insight Partners told LPs that it has reduced its target fund size for next year by US$5 billion to US$15 billion instead of an original goal of US$20 billion. https://tinyurl.com/k56da9wc

Revolut investor cuts firm’s valuation by 40%.

The European venture capital firm Molten Ventures wrote down its stake in Revolut by 40%, from around US$115 million in March 2022 to around US$70 million this March, according to its annual report. Molten is the third Revolut investor to mark down its investment in the UK based fintech this year, following Triplepoint Capital and Schroders, which cut their valuations of Revolut in February and April, respectively. Fintech valuations have been hit hard across the board in recent months, though Revolut has had a particularly rocky year. The Bank of England has indicated that it plans to reject Revolut’s application for a UK banking license, Revolut’s auditor has said it couldn’t verify the company’s 2021 revenue and the fintech firm has lost its CFO and head of UK banking. In an interview with City A.M., Molten Ventures CEO Martin Davis suggested uncertainty around Revolut’s path to profitability and its efforts to acquire a UK banking license contributed to the valuation cut. https://tinyurl.com/4c6tyz28

Nasdaq just announced a US$10.5 billion deal to scoop up a behind-the-scenes tech provider for Wall Street.

The exchange operator announced plans to acquire behind-the-scenes tech provider Adenza in a cash-and-stock deal valued at US$10.5 billion. Adenza, owned by private equity firm Thoma Bravo, provides risk management and regulatory tech for banks and brokerages. Nasdaq’s solutions business will account for 77% of the company’s total revenue. Meanwhile, revenue from trading will represent the remaining 23%. For Thoma Bravo and Adenza, Qatalyst Partners served as the lead financial advisor, along with help from Barclays, Citi, Evercore, HSBC, Jefferies, and Piper Sandler. https://bit.ly/441eK67

Entain to buy Poland-based betting operator for US$946 million.

Ladbrokes-owner Entain said on Tuesday it will buy Poland-based sports betting operator STS Holdings for 750 million pounds (US$946 million) to further its footprint in Europe. Entain, which owns Coral betting shops as well as the bwin and partypoker online brands, said its offer is priced at 24.8 Polish zlotys (US$5.97) for each STS share held, and that it will pay about 450 million pounds in net cash for the acquisition. Entain’s most popular brands, Ladbrokes, Coral and bwin, were bought through acquisitions and the bookmaker has been rapidly expanding in Europe, with its latest deal being the buyout of 365scores in April. STS, founded in 1997, is the one of the largest bookmakers in Poland and has licenses to operate in the UK and Estonia. The company plans to raise about 600 million pounds through an accelerated bookbuild and a separate retail offer in connection with the deal. STS Chief Executive Mateusz Juroszek and his father, who own about 70% of the Polish firm will re-invest part of their proceeds into Entain CEE for a 10% stake in the venture, Entain added. https://tinyurl.com/4aznvm6x

Microsoft CFO says OpenAI and other AI products will add US$10 billion in revenue.

Microsoft CFO Amy Hood on Monday told investors that new artificial intelligence-powered services, including those powered by OpenAI, will contribute at least US$10 billion to the company’s revenue. She didn’t specify the time period. Microsoft generated US$198 billion in revenue in 2022. “The next generation AI business will be the fastest growing US$10 billion business in our history,“ she said during a call with the investors. While Microsoft reaps benefits from the AI features, they aren’t free: the company has invested billions of dollars in OpenAI in cash and cloud credits, and it spent US$1.2 billion to build a supercomputer that runs the AI startup’s models, The Information previously reported. The company also stands to obtain a significant portion of the profits OpenAI generates from its own businesses. Since February, Microsoft has added new features powered by OpenAI’s large-language models to most of its software, including a chatbot in its Bing search engine and tools to automatically generate content in its Office 365 workplace software. Microsoft is charging a significant premium to customers of the AI-powered Office 365 features, The Information previously reported. Separately, it also resells OpenAI’s software to customers of Microsoft’s Azure cloud platform. https://tinyurl.com/3uk8bff7

Apple still aiming to release a more affordable version of Vision Pro by the end of 2025.

Bloomberg’s Mark Gurman reports that Apple is currently aiming to release a more affordable AR/VR spatial computer product by the end of 2025. At the same time, Apple is also (unsurprisingly) working on a new version of Vision Pro that features a faster processor inside for even better performance. In the initial version of Vision Pro, the most expensive components are the M2 and R1 chips, the two 4K micro-LED displays, and the camera and sensor hardware. To cut costs, Apple could “probably use lower quality screens,” a lower-spec processor, as well as a smaller array of cameras and sensors. The company could also remove the spatial audio speakers from the headset itself and instead push users toward using their own AirPods Pro for audio. https://tinyurl.com/2rtnpbuj

Mercedes is adding ChatGPT to its infotainment system, for some reason.

Mercedes owners in the U.S. will soon add a new luxury to their already luxurious vehicles: ChatGPT. The automaker is adding OpenAI’s conversational AI agent to its MBUX infotainment system, though what it could possibly be needed for is hard to say. U.S. owners of models that use MBUX will be able to opt into a beta program starting June 16, activating ChatGPT functionality. This will enable the highly versatile large language model to augment the car’s conversation skills. You can join up simply by telling your car “Hey Mercedes, I want to join the beta program.” It’s not really clear what for, though. After all, a car is a pretty well constrained environment. People need to drive, navigate, and control their media and the car’s basic functions, and certainly a voice interface is sometimes the safest or best option for doing so without taking their eyes off the road. https://bit.ly/3NzOxGq

Netflix to enter live-streamed sports with celebrity golf event.

Netflix is in talks to live-stream its first sporting event this fall: a celebrity golf tournament featuring professional golfers and Formula One drivers, according to people familiar with the situation. The company is in early discussions about the golf tournament, some of the people said. Set in Las Vegas, the event would feature celebrities from “Drive to Survive,” a docuseries about Formula One auto-racing, and “Full Swing,” which followed professional golfers during the 2022 season, they said. https://bit.ly/3JhUp4v

Netflix subscriptions rise as password-sharing crackdown takes effect.

The Netflix crackdown on password sharing is in its early days in the U.S., but it appears to be having the effect the streamer was looking for – a boost to its subscriber base. Since alerting its members in late May of its new password sharing policy, Netflix had its four single largest days of signing up U.S. customers since data provider Antenna began tracking the service. In that time, Netflix has seen nearly 100,000 daily signups on two of the days, according to the report from Antenna. On May 23, Netflix began sending out emails to members that it was changing its sharing guidelines, namely that accounts were only to be shared within the same household. https://tinyurl.com/vyydzcjy

EU seeks breakup of Google’s adtech business.

The European Commission said Wednesday that it would seek to force a breakup of Google’s advertising technology business, following the U.S. Department of Justice in alleging that the search giant illegally abused its dominance over the way advertisers and website publishers buy and sell ad space on sites Google doesn’t own. The commission informed Google of its “preliminary view” that it had violated European Union antitrust laws, the agency said in a statement. Like the Justice Department, the commission alleged that Google rigged ad auctions in the course of running the world’s biggest ad exchange as well as controlling key tools that ad buyers and ad-space sellers use. Google denies the allegations. While the European Commission may have an easier time forcing concessions from Google because of stronger competition laws in the EU, the commission’s case could take years to play out. In the U.S., the DOJ’s case is likely to go to trial by next year, though the government will have an uphill battle convincing a judge that Google’s conduct was illegal, some antitrust lawyers previously told The Information. In the shorter term, Google faces a Sept. 12 court date in the DOJ’s separate case against the company’s search engine that is taking aim at Google’s agreements with partners like Apple. https://tinyurl.com/ywk3fefz

Music publishers sue Twitter for copyright infringement.

A group of 17 music publishers sued Twitter for copyright infringement of 1,700 songs on Wednesday, seeking up to $250 million in damages. The suit, filed in Federal District Court in Nashville, alleges that Twitter “consistently and knowingly hosts and streams infringing copies of musical compositions,” both before and after Elon Musk’s acquisition of the company in November. Unlike other social media companies, Twitter has no agreement in place to license copyrighted songs. Twitter had been engaged in licensing negotiations for years, but those negotiations stalled after Musk laid off the team working on them, according to a person with direct knowledge. The New York Times earlier reported the stalled negotiations. https://tinyurl.com/7yye7tev

Reddit crashes after thousands of forums go dark.

Reddit experienced a mass outage on Monday morning after over 7,000 forums on the site, called subreddits, shifted to private, which will make their forum’s posts invisible to new members, in protest of the company’s decision to start charging developers for access to its application programming interface, Tim Rathschmidt told The Information. Developers use the site’s API, which has been free of charge, to power apps that offer feeds of Reddit forums with an interface some users prefer over Reddit’s own app and website, like an ad-free feed. The subreddits participating in the pre-organized blackout, including some of the site’s largest communities, will make the forums inaccessible to non-members for at least 48 hours, while some have said they’re staying private indefinitely. Rathschmidt said Reddit is not planning any changes to the API updates it previously announced, which would start charging developers that use its API to power third-party Reddit apps that cost the company tens of millions of dollars to support. Reddit’s move is part of a larger goal to generate a profit, CEO Steve Huffman said on Friday in a written Ask Me Anything session hosted on Reddit. The company plans to go public by the end of 2023, The Information previously reported. https://tinyurl.com/bdfpufaw

Cyber insurance premiums surge by 50% as ransomware attacks increase.

US cyber insurance premiums surged 50% in 2022 as increased ransomware attacks and online commerce drove demand for coverage. Premiums collected from policies written by insurers reached US$7.2 billion in 2022 and tripled in the past three years, ratings firm AM Best said in a study released this week. https://bit.ly/3Ny7BEV

Amazon to let more Prime sellers fulfill orders themselves.

Amazon told merchants this week that it plans to reopen registration for a program that allows third-party sellers to feature a Prime badge on their products without using Amazon’s own fulfillment services. The move could help convince larger and direct-to-consumer brands with their own fulfillment infrastructure to start selling on Amazon—and provide a boost to outside logistics firms like Flexport that want to work with Amazon sellers. In a note to sellers, Amazon said enrollment for the Seller Fulfilled Prime program will reopen later this year for the first time since 2019. The program has strict requirements for merchants in the U.S., including offering one-day or two-day delivery for domestic Prime members, shipping over 99% of orders on-time and offering weekend deliveries and pickups, according to a FAQ posted by Amazon. In Europe, reopening Seller Fulfilled Prime helps Amazon comply with part of a settlement it reached in December to end a European Commission antitrust probe. As part of the commitment, Amazon agreed to start letting sellers use other carriers to send packages as long as they have equivalent delivery times to those offered by Amazon. The company had until June to implement the changes required under the settlement, which is only legally binding in Europe. https://tinyurl.com/4u2yxr5z

A once-obscure Chinese startup overtakes Shein in US.

This time last year, hardly anyone in the US knew what Temu was. Now, as American consumers grapple with runaway inflation, the bargain shopping app backed by a Chinese tech company is on a tear, with sales exceeding rival Shein. Spending on Temu — an e-commerce marketplace backed by China heavyweight PDD Holdings Inc. — was 20% higher than more established fast-fashion retailer Shein in the US in May, according to Bloomberg Second Measure, which analyzes billions of credit and debit card transactions. https://bit.ly/43WK31O

Alibaba to launch local versions of its China e-commerce site in Europe.

Alibaba will expand one of its key China e-commerce sites into Europe, the company’s president said on Thursday, marking a significant step up in the Chinese tech giant’s international push. The announcement comes just over two months after Alibaba, China’s biggest e-commerce firm, announced plans to split its business into six units, a move designed to give each unit more autonomy and faster decision-making powers. In China, Tmall is an Alibaba site and app that has a big focus on selling foreign brands to Chinese consumers. Launching Tmall in Europe reflects a significant shift in strategy for Alibaba in its international e-commerce operations. https://bit.ly/46l1Cee

EToro to delist four tokens for U.S. customers after SEC sues exchanges.

Israel-based eToro will delist four tokens that the Securities and Exchange has alleged are securities, the company announced Tuesday. The changes only affect customers in the U.S. The tokens, which customers will no longer be able to buy starting on July 12, include algorand, decentraland, dash and polygon. Customers will still continue to be able to hold and sell after that date. The SEC’s claims that the tokens are securities are part of lawsuits filed against Coinbase and Binance, which the SEC sued for allegedly violating securities laws. EToro’s move follows rival Robinhood’s decision to delist cardano, solana and polygon after the SEC also alleged that those tokens are securities. https://tinyurl.com/2yw7h6ue

Binance under investigation in France.

The Paris prosecutor’s office is investigating crypto exchange Binance for illegally marketing its business to French customers before it was registered in the country and violating anti-money laundering laws, according to multiple reports. The French news outlet Le Monde first reported the investigation and the prosecutor’s office confirmed the investigation to Le Monde and Reuters. A spokesperson for Binance said that “on-site visits by regulators and inspectors are part of regulatory obligations to which all financial institutions must adhere” in France and that the company had a visit from authorities last week. News of the investigation is the latest headache for Binance, which announced on Friday that it was leaving the Netherlands after failing to register with a Dutch regulator. And just last week, the U.S. The Securities and Exchange Commission sued Binance for a wide range of securities violations. https://tinyurl.com/3w2mvd3a

Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in.

Nvidia GPUs are the water that feeds today’s flourishing AI ecosystem. Without the power that the A100 and H100 chips provide, ChatGPT and most other new generative AI services wouldn’t exist. With the boom in AI startups and services, there’s so much demand for these crucial components that Nvidia, and manufacturing partner TSMC, can’t make enough of them. This is giving Big Tech companies another huge advantage over smaller upstarts. If you really want to compete in this new AI world, you have to train your own models with your own data, which can require a large amount of GPUs. Otherwise, you will just be another app on someone else’s platform. Nat Friedman, the former CEO of GitHub, and Daniel Gross, who has backed GitHub, Uber, and a host of other successful startups, have purchased thousands of GPUs and set up their own AI cloud service. Called Andromeda Cluster, the system has 2,512 H100 GPUs and is capable of training a 65 billion parameter AI model in about 10 days, the VCs said. That’s not the largest model out there, but it’s a sizeable one. The catch: This is only available for startups backed by Friedman and Gross. Still, the move is being praised already. https://bit.ly/3N6M8lf

AMD reveals new A.I. chip to challenge Nvidia’s dominance.

AMD said on Tuesday its most-advanced GPU for artificial intelligence, the MI300X, will start shipping to some customers later this year. AMD’s announcement represents the strongest challenge to Nvidia, which currently dominates the market for AI chips with over 80% market share, according to analysts. If AMD’s AI chips, which it calls “accelerators,” are embraced by developers and server makers as substitutes for Nvidia’s products, it could represent a big untapped market for the chipmaker, which is best known for its traditional computer processors. AMD CEO Lisa Su told investors and analysts in San Francisco on Tuesday that AI is the company’s “largest and most strategic long-term growth opportunity.” “We think about the data center AI accelerator [market] growing from something like US$30 billion this year, at over 50% compound annual growth rate, to over $150 billion in 2027,” Su said. While AMD didn’t disclose a price, the move could put price pressure on Nvidia’s GPUs, such as the H100, which can cost US$30,000 or more. Lower GPU prices may help drive down the high cost of serving generative AI applications. https://tinyurl.com/36hhy7rt

Intel enters the quantum computing horse race with 12-Qubit chip.

Intel has built a quantum processor called Tunnel Falls that it will offer to research labs hoping to make the revolutionary computing technology practical. The Tunnel Falls processor, announced Thursday, houses 12 of the fundamental data processing elements called qubits. It’s a major step in the chipmaker’s attempt to develop quantum computing hardware it hopes will eventually surpass rivals. Intel, unlike most of its rivals, makes its qubits from individual electrons housed in computer chips that are cousins to those that power millions of PCs. The company is lagging behind. Rivals like IBM, Google, Quantinuum and IonQ have been offering quantum computers for years, but Intel believes tying its fortunes to conventional chip technology will ultimately enable faster progress. One notable feature of quantum computing is the tremendous variety of approaches. https://bit.ly/46bQ78T

US-made wind and solar components are now cheaper than imports.

Dartmouth and Princeton researchers just released a study called, “Effects of Renewable Energy Provisions of the Inflation Reduction Act on Technology Costs, Materials Demand, and Labor” that was funded by the BlueGreen Alliance, which unites labor unions and environmental organizations. The report examines the estimated impacts the Inflation Reduction Act will have on the US wind and solar industries. Specifically, the report analyzes the impacts of the Inflation Reduction Act’s 45X Advanced Manufacturing Production Tax Credit (45X MPTC), as well as the clean electricity production and investment tax credits. 45X MPTC provides tax credits for each US-made clean energy component, such as the PV module and some of its parts, batteries, and certain critical minerals. The US Department of Energy explains, “The credit varies by eligible component and is multiplied by the number of units produced by the taxpayer that were sold that year.” Manufacturers can either opt for a direct payment from the IRS or apply it as a credit to taxes owed. The researchers found that as a result of the 45X MPTC alone, the cost of solar panels both assembled in the US and made from 100% US-made components are now 30% cheaper than imported solar panels. US-made onshore and offshore wind components such as towers, turbine blades, and nacelles will also be cheaper than imported components for the first time. In order to receive the full clean electricity tax credits, developers have to pay workers a prevailing wage and use a certain percentage of registered apprentices. If they meet this requirement, it really pays off: The cost of producing solar or onshore wind falls more than 60% (and offshore wind falls 20%). https://bit.ly/3p8IKOJ

New guidance from the US Treasury could unleash billions in renewable energy investment.

The U.S. Treasury Department on Wednesday announced new guidance, authorized under the Inflation Reduction Act, that will enable the development of a range of renewable energy projects that previously had been too onerous from a tax perspective to tackle. It also allows cities and nonprofits, which have no tax liabilities, to receive direct payments when investing in a range of climate-friendly technologies. The changes could pave the way for hundreds of billions of dollars worth of investment in the coming decade. The guidance around direct payments would allow tax-exempt organizations to put rooftop solar panels on schools, churches and temples. And rural electric cooperatives will finally be on the same footing as investor-owned utilities. But perhaps the bigger news is the guidance around transferability of tax credits. Previously, to make the most of the tax credits available to them, renewable energy project developers had to create complex and expensive tax equity deals. A solar project, for example, might be eligible for 30% to 50% of its total cost in tax credits. Utility scale projects routinely cost US$100 million to US$200 million, meaning that up to US$50 million to US$100 million in tax credits would be available. https://bit.ly/3XatwFm