💎 Klarna's AI Coup: "SaaS is Dead", ☁️ Oracle's Zettascale Gambit, and 🔬 Chai-1's Molecular Magic
Thomas's Innovation Wrap #95
Greetings,
Here’s your weekly wrap of technology, innovation, and finance news.
💎 Artificial Intelligence
OpenAI has unveiled its o1 model family, designed to tackle complex problems by spending more time "thinking" before responding. The o1-preview model scored 83% on the International Mathematics Olympiad qualifying exam, compared to GPT-4o's 13%. OpenAI is also reportedly in talks to raise $6.5 billion at a $150 billion valuation.
Klarna says they are replacing Salesforce and Workday with internal AI applications, while reducing its workforce by 50%.
"Thanks to AI agents + AI engineers getting prolific, you can rebuild most enterprise SaaS functionality, host for super cheap, and get basically 90%+ functionality," said Linas Beliūnas, director of revenue at Zero Hash.
UBS has developed an AI tool that can scan 300,000 firms in 20 seconds for M&A opportunities, while iFood (Brazilian food delivery) attributed a 30% increase in EBITDA to the 192 proprietary AI solutions that have been created by their own employees.
Google co-founder Sergey Brin is working on AI projects "pretty much every day" (see the 20-minute All-In Summit interview).
"But I think as a computer scientist, I've never seen anything as exciting as all of the AI progress that's happened in the last few years. It's kind of mind-blowing.”
New AI tools continue to emerge: Adobe has previewed generative AI for videos, PaperQA offers AI-powered literature reviews (see the paper), and Google introduced a tool for LLMs to fact-check their own responses.
Nvidia invested in Sakana AI, which specialises in high-efficiency AI models. Poolside, an AI coding startup, is reportedly raising $500 million at a $3 billion valuation before releasing its first product.
Researchers found that chatbots can effectively persuade people to abandon conspiracy theories.
🛰️ Space
SpaceX's Polaris Dawn mission has achieved a milestone in private space exploration, completing the world's first commercial spacewalk. Billionaire Jared Isaacman and SpaceX engineer Sarah Gillis conducted a "stand-up" extravehicular activity (EVA) from their Crew Dragon capsule, reaching 1,400 kilometres above Earth – the highest altitude for humans since Apollo.
"Back at home we have a lot of work to do but from here, it looks like a perfect world," Isaacman said shortly before 7 a.m. New York time, as he emerged out of the nose of the vehicle and looked down at the Earth below him.
SpaceX launched five giant BlueBird satellites for AST SpaceMobile, a potential Starlink competitor, aiming to provide direct-to-smartphone broadband service globally.
📶 Airline Wireless
United Airlines is set to offer free high-speed Wi-Fi across its entire fleet through a partnership with SpaceX's Starlink. Testing begins in early 2025, with passenger flights enjoying the upgrade later that year. The deal marks a significant win for Starlink, becoming the first major US carrier to adopt the satellite system. Shares of competing Wi-Fi providers like Viasat and Gogo were down 25% and 8% respectively last week.
"Everything you can do on the ground, you'll soon be able to do onboard a United plane at 35,000 feet, just about anywhere in the world," says United CEO Scott Kirby.
🤖 Robotics
NASA's Valkyrie robot, currently being tested at a Woodside Energy lab in Australia, showcases impressive humanoid capabilities for dangerous tasks on Earth and potentially in space.
"The physical capability of Valkyrie is really strong, but where everybody's trying to catch up right now, including current industry, where the billions of dollars are pouring in, is the intelligence and the adaptability, the resilience, the safety and predictability right to where we can have a robot that can always take the correct action," says Azimi.
Meanwhile, the US military is betting big on a different kind of robot. AeroVironment's Switchblade drones are small but mighty loitering munitions. Weighing under 10 pounds, these backpack-sized drones offer reconnaissance and precision strike capabilities. The US Army is so impressed, they've signed a deal worth up to $1 billion for these high-tech flying cameras with teeth.
🔬 Biology
The Chai Discovery team has released Chai-1, a new multi-modal foundation model for molecular structure prediction that outperforms existing tools like AlphaFold in several benchmarks. This freely available tool could accelerate drug discovery and biological engineering by enabling more accurate predictions of complex molecular interactions.
The core achievement of Chai-1 is its ability to predict complex molecular interactions involving proteins, small molecules, DNA, RNA, and even covalent modifications. This comprehensive scope makes it one of the most versatile tools for molecular structure prediction today.
☁️ Cloud Computing
Oracle has announced the world's first zettascale AI supercomputer, harnessing up to 131,072 NVIDIA Blackwell GPUs. At Oracle’s Financial Analyst Meeting, Larry Ellison described how they got so many GPUs.
“I went to dinner with Elon Musk, Jensen Huang, and I would describe the dinner as: Me and Elon begging Jensen for GPUs. Please, take our money. Please, take our money. No, no, take more of it. You’re not taking enough of it, we need you to take more of our money, please.”
Oracle is also planning a 1-gigawatt AI data centre that will be powered by three small modular nuclear reactors.
When asked about how they’re going to monetise Generative AI, Ellison explained that AI is not something sold separately but is integral to all their applications.
When are we going to start monetizing it? Well, all of Cerner is the monetization. The fact that we can dramatically expand our health business is because it's based on AI. It is — AI is just — I don't know how to describe it. I mean the best way to describe it. It's not something you sell separately. It's the diagnostic system. It's the electronic health record system. It is — the pharmacy system, this prescription system, the user authentication, the log-in system, it's all AI. And I know people think it's a separate thing that, "Oh my God." And I hear a bunch of applications come say, "Oh, we've now got AI agents we'll charge for separately. I mean — it's — our applications are going to be primarily AI applications, everything. How do you charge separately for everything I really don't — I find it bewildering when I listen to them talk. I don't understand what they're saying. We wonder — and I'll stop there.
(I agree with this sentiment. At Minotaur Capital, AI is a crucial part of our operations, yet we don't generate "AI revenue" as a separate stream. Instead, AI enables us to process tens of thousands of articles and documents and analyse a much larger array of stocks, which we hope leads to better investment returns. We earn revenue just like any other fund manager. When considering the return on our AI investment — especially when compared to the cost of hiring people to replicate what the AI accomplishes — the return is immense. I suspect that those searching for a direct revenue return on AI spending may be overlooking its true value.)
Amazon Web Services is investing $10.5 billion in UK cloud and AI infrastructure, while cloud startup CoreWeave is reportedly in talks for a share sale that could value it at $23 billion.
OpenAI and Nvidia executives recently met with Biden administration officials, resulting in an interagency task force to promote data centre development and accelerate permitting in the US.
"OpenAI believes infrastructure is destiny and that building additional infrastructure in the US is critical to the country's industrial policy and economic future," OpenAI said in a statement.
As AI workloads heat up, cooling solutions become critical. In Hong Kong, Global Switch is turning to liquid cooling to meet Chinese AI firms' demands, with rack density requirements skyrocketing from 20 kilowatts to 100 kilowatts in just two years.
🌞 Renewables
The Economist reports that geothermal could outperform nuclear power, thanks to innovative "enhanced geothermal systems" (EGS). Tech giants like Meta are taking notice, partnering to power data centres with up to 150 megawatts of geothermal energy.
Energy storage remains crucial for grid stability. In Australia, Hydro Tasmania is leading with deep-storage facilities, while Tesla is selling its first virtual power plant in South Australia.
Tesla claims that the virtual power plant is distributed in about 7,000 homes with a 35 MW capacity and about 70% of the systems are coupled with solar power.
Daikin Industries is using AI to cut AC power use by up to 20%.
Scientists are reviving a controversial technique to seed the Pacific Ocean with iron, aiming to boost carbon absorption through phytoplankton blooms.
Alternative energy sources are gaining traction. Australia and Germany signed a $660 million hydrogen deal, Arkansas is emerging as a key US lithium producer, and Brookfield is investing up to US$1.1 billion in sustainable aviation fuels.
📱 Devices
Apple's "Glowtime" event unveiled the AI-powered iPhone 16 lineup, featuring the A18 chip that's 30% faster than its predecessor. This enables on-device AI processing for enhanced email summaries, smarter notifications, and a more conversational Siri.
In a potential hearing aid industry disruptor, Apple's AirPods Pro 2 received FDA clearance as over-the-counter hearing aids. This software-based solution, launching this fall, could significantly reduce costs for those with mild to moderate hearing loss. The only downside is you might look like an a**hole leaving your AirPods in while talking to people.
💊 Health
The race for convenient weight loss drugs is accelerating. Novo Nordisk's amycretin pill showed promising results, with patients losing up to 13.1% body weight in three months. Terns Pharmaceuticals' TERN-601 achieved 5.5% weight loss in four weeks. These oral medications could make weight loss treatment more accessible than injectables like Ozempic.
"It's roughly double the weight loss rate seen with current GLP-1 agonists and approaching procedural or surgical-level outcomes," said Dr. Christopher McGowan, a gastroenterologist who runs a weight loss clinic in North Carolina.
Moderna aims to launch a skin cancer vaccine by 2025.
Australian start-up Helfie AI is developing a smartphone app to screen for skin cancer, COVID-19, and STIs, eyeing a $US1 billion valuation.
💻 Chips and Computing
Infineon Technologies has developed the world's first 300mm power GaN wafer technology, accommodating 2.3 times more chips per wafer. This breakthrough promises enhanced efficiency for applications from AI power supplies to solar inverters.
Japan is advancing diamond semiconductors that outperform current materials by 50,000 times. Researchers have created the first power circuit with diamond semiconductors and can mass-produce 2-inch diamond wafers.
TSMC's 3nm chip revenue is set for a 34% annual increase, partly due to Apple's A18 and A18 Pro chip orders for the iPhone 16 series. Their 'N3E' process promises higher yields and improved power efficiency.
RISC-V is gaining ground in AI chips, with its market share in AI SoCs expected to exceed 50% by 2030. Its open-source nature, flexibility, and low power consumption make it a strong contender against x86 and Arm architectures.
RISC-V's open-source benefits, superior power efficiency, robust security, and minimal geopolitical risks provide the IP licensing sector with substantial growth advantages, Lin observed.
🔋 Batteries
Mercedes-Benz is set to road test solid-state batteries within months, aiming for market release by 2030, with these batteries promising 80% more range and 40% less weight.
China has made significant strides in mastering High Pressure Acid Leach (HPAL) technology for processing low-grade nickel ore, a feat that has long eluded Western companies. This breakthrough has reshaped the global nickel industry, with Chinese-run facilities now dominating production in Indonesia.
"A classic example is just how quickly they brought on the Indonesian nickel projects using a technology that had a checkered history," said William Adams, head of base-metals research for Fastmarkets, a data provider.
China now refines 58% of the world's nickel supply, up from 34% in 2015. The resulting price crash has forced mine closures across Australia, New Caledonia, Brazil, and the US.
🎮 Gaming
Unity has cancelled its controversial Runtime Fee, opting for traditional price increases instead. New CEO Matthew Bromberg announced an 8% increase for Unity Pro and a 25% hike for Enterprise, effective January 2025, aiming to rebuild trust while ensuring financial stability.
"You can't do business when you're sideways with your customers. We want to be aligned with them, and this new model will do that."
AI continues to reshape gaming. Hasbro's CEO Chris Cocks plans to embrace AI for Dungeons & Dragons, while 87% of studios are using generative AI tools for in-game environments. However, concerns about job displacement and content quality persist.
Chip demand for gaming consoles is rising, boosted by Sony's PS5 Pro announcement and rumours of an updated Nintendo Switch.
⚙️ Mobility
Siemens is investing $60 million to build America's first electric bullet train factory in New York, set to produce trains capable of 220 mph for the upcoming Las Vegas to Los Angeles high-speed rail line. This marks a significant step forward for high-speed rail in the US.
Nuro, known for its autonomous delivery robots, is expanding into robotaxis and personal autonomous vehicles by licensing its technology to other companies.
"Our tech has gotten to the point where we believe very firmly that it is ready for more applications."
⚡ Other Snippets
Scientists have created the world's first nuclear clock, potentially revolutionising precision timekeeping and fundamental physics. These clocks could be 1,000 times more precise than current atomic standards, helping test Einstein's theories and probe dark matter mysteries.
NTT Docomo will release $1,700 "extended reality" smart glasses that simulate multi-monitor setups and provide real-time translation in over 140 languages.
Stream Hatchet released their Top 10 Global Streamers and Top 10 Female Streamers list for August, base don average viewers across all platforms. The female list has been “community noted” on X to point out that if they included female VTubers (which they have on a separate list), VTubers would have taken the top 5 spots.
MrBeast's leaked onboarding document provides a fascinating glimpse into the inner workings of a viral YouTube empire. It reveals an intense focus on metrics, a ruthless approach to employee performance, and an obsession with creating content that will capture and hold viewers' attention.
Have a great week,
Thomas
About Thomas Rice
Thomas Rice co-founded Minotaur Capital, a technology-driven, AI-led global equities fund, and is based in Sydney, Australia. He can be found on the X at @thomasrice_au.