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(#43) The magnificent 7: Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla - part I
87% of teens surveyed own an iPhone, while 88 percent expect the iPhone to be their next phone
7 companies out of the S&P 500 had extraordinary growth in 2023: Apple, Microsoft, Amazon, Alphabet (Google), Nvidia, Tesla, and Meta.
Having this in mind, let’s see and analyze what they did in 2023, especially in regard to their AI strategy. This is part one, analyzing Apple, Microsoft, and Nvidia.
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Next week, part II: META, Alphabet (Google), Amazon and Tesla.
Onto the update:
Apple's commitment to integrating advanced technologies into its ecosystem is evident not only in its hardware but also in its software endeavors. While the tech giant has delved into open-source technologies like the Darwin kernel for its OS and the WebKit browser engine to ensure optimal compatibility with web content, its AI pursuits have historically been more guarded. Conventional machine learning models deployed by Apple handle tasks such as recommendations, photo identification, and voice recognition. However, these haven't dramatically influenced Apple's overarching business strategy, until the introduction of Stable Diffusion.
Stable Diffusion's emergence from the open-source realm presented Apple with a significant opportunity. The model's uniqueness lies not just in its open-source nature but also in its compact size. This allowed the model to be initially compatible with certain consumer graphics cards and, with further optimization, even Apple's iPhones. This optimization journey had two significant phases: firstly, Apple fine-tuned the Stable Diffusion model itself, an effort made possible by its open-source status. Following this, Apple updated its OS, ensuring it was harmonized with the company's proprietary chips, leveraging its integrated device architecture.
This strategic move also hints at Apple's future intentions. Apple's "Neural Engine" on its chips, designed explicitly for AI functionalities, has been in circulation for several years. Given the advancements with Stable Diffusion, it's plausible to speculate that forthcoming Apple chips might be even more attuned to this model. Integrating Stable Diffusion into Apple's operating systems could also be on the horizon, offering app developers easily accessible APIs.
This integration can potentially revolutionize the app landscape. With "good enough" image generation capacities embedded within Apple's devices, developers can harness these features without the overheads of extensive backend infrastructure, reminiscent of the viral success of Lensa. Such advancements could tilt the balance in favor of Apple and smaller app creators by equipping them with unique capabilities and distribution platforms.
However, this localized AI capability might pose challenges to centralized image generation platforms like Dall-E or MidJourney and the cloud-based services supporting them. While these centralized services might offer superior image generation, the convenience and accessibility of built-in capabilities on Apple devices can reshape the market dynamics. The future might see a diminished market for centralized services as localized computing capabilities gain prominence, especially within Apple's extensive ecosystem.
Microsoft, one of the tech industry's Goliaths, has displayed impressive agility and foresight in positioning itself for the AI-driven future. The company's strategy reflects a blend of cloud services, strategic partnerships, and leveraging its existing products to embrace next-gen AI technologies. Let’s take a closer look at each strategic direction:
1/ Cloud & Infrastructure Investment. Similar to AWS, Microsoft offers a cloud service that boasts GPU support, essential for running sophisticated AI models. But perhaps the company's most strategic move in the AI domain is its exclusive partnership with OpenAI. This alliance isn't just a significant financial commitment but a long-term investment. Given OpenAI's trajectory, Microsoft seems poised to lay the groundwork for the AI era's infrastructure, underpinning the growth of one of the future's top tech enterprises. An AI chips developed by Microsoft is coming this year.
2/ Bing's potential: integrating ChatGPT-like capabilities could potentially disrupt this space, offering Bing a unique advantage and the possibility of capturing significant market share. This risk, given Bing's current standing, might very well be a calculated one worth taking. Meanwhile, there are rumors that Microsoft tried to sell Bing to Apple in 2020.
3/ GPT in Productivity apps: GPT will be integrated into Microsoft's suite of productivity applications. Drawing lessons from the AI-coding tool GitHub Copilot, built atop GPT, Microsoft will start deploying an AI-assisted user experience that's genuinely beneficial. Microsoft's challenge, and one they seem to be addressing, is ensuring that AI enhances productivity without becoming intrusive - ensuring no repeat of the infamous "Cortana" assistant.
4/ Subscription & added functionality: Microsoft's move to integrate new functionalities into its offerings, potentially at an additional cost, aligns seamlessly with its subscription business model. This strategy might see the tech giant, once perceived as vulnerable to disruption, not only evolving due to these changes but also capitalizing on them to ascend to unprecedented heights.
NVIDIA has come a long way from its modest beginnings in 1993. Initially recognized for its prowess in creating graphics chips tailored for high-end gaming, NVIDIA's strategic foresight and innovation placed it at the vanguard of the AI revolution. This transformation wasn't by mere happenstance; it was the result of a keen awareness of technology trends and a series of strategic decisions.
NVIDIA's specialization in graphics processing units (GPUs) began as a focus on gaming PCs. Over the years, they found that the parallel processing capability of GPUs had other applications, most notably in enhancing the computing performance of traditional CPUs. This realization attracted giants like Google, Microsoft, and Amazon, propelling NVIDIA's data center segment revenues from a mere $339 million in 2016 to over $15 billion just six years later. With the rise of generative artificial intelligence and the launch of AI chatbots like ChatGPT, NVIDIA's chips, known for their excellence in AI model training and inference, became even more coveted. This surge in demand caused NVIDIA's data-center revenue to skyrocket, with analysts predicting it to exceed $60 billion in the coming fiscal year.
However, NVIDIA's ascendancy isn't solely attributed to its hardware; software plays an indispensable role. In 2006, NVIDIA pioneered the Compute Unified Device Architecture (CUDA), a revolutionary programming language for GPUs. This allowed for efficient problem-solving that was previously deemed financially infeasible. With over 250 software libraries catered to AI developers, CUDA has positioned NVIDIA as the preferred platform for AI development. The widespread adoption of CUDA, with over 25 million downloads in just one year, showcases its dominance and offers NVIDIA a competitive advantage that rivals find challenging to replicate.
While competitors like Advanced Micro Devices (AMD) are diving into the AI realm with their offerings and major clients like Amazon and Google are exploring in-house chip designs, NVIDIA's challenge lies in sustaining its edge. Despite its high chip costs, which motivate clients to consider alternatives, NVIDIA's focus should remain on ensuring the unmatched performance of its combined chip and software offerings. Drawing lessons from its own past and the wisdom of tech legends, NVIDIA's continued success might just hinge on the mantra: "Only the paranoid survive." LINK
Bias occurs in many algorithms and AI systems, hence reducing the world to stereotypes (e.g. “An Indian person” is almost always an old man with a beard). LINK
Americans are asking AI: ‘Should I Get Back With My Ex?’. LINK
Andrew Ng, an OG in AI, is providing some tips and tricks on how to be an innovator. LINK
The state of generative AI in 7 charts, from CB Insights. LINK
Bloomberg: “As soon as this year, Romania may even surpass Poland in terms of average living standards.” LINK
87% of teens surveyed own an iPhone, while 88 percent expect the iPhone to be their next phone. LINK
Huawei aims to double smartphone shipments to 70m next year, up from 30m last year and 240m units in 2019. LINK
23andMe apparently lost some data. Everything is hacked, remember? This time the hacker's interest was the Askenazi Jew's data. LINK
Did Bitcoin leak from an American spy lab? No, but this theory is spreading online. LINK
Goods certification startup Blockticity utilized the blockchain (Avalanache) to certify the authenticity of psychedelic mushrooms. LINK
English churches tolerate bats…for funding. LINK
Say goodbye to pandas in American Zoos. The ‘scientific loans’ from China are ending. LINK
Five principles from Renaissance Technologies.
“First. Science. The company was founded by scientists. It’s owned by scientists. It’s run by scientists. We employ scientists. Guess what, we take a scientific approach to investing and treat the entire problem as a giant problem in mathematics.” LINK
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