Why Blackrock Bucked the AI Doomer Trend

TECH IN THE NEWS

Tech Plunges - The Nasdaq dropped to as low as 10% below midweek, as Mag7 overvaluations, Friday’s weak jobs report, and the collapsing Yen carry trade were priced in.

Googl-opoly - A federal judge ruled that Google violated U.S. antitrust law by paying companies (like Apple) to present it as the default choice on their devices and browsers.

Bad Intel - Intel shares lost 25% last week, its worst loss ever, after suspending its dividend and announcing 15k job cuts. TechCrunch reports that 60k tech jobs have been cut already in 2024.

Nvidia Fumble - Nvidia’s upcoming AI chips will be delayed by three months or more due to design flaws, potentially affecting major chip orders by companies like Meta, Google and Microsoft.

Chinese FSD Ban - The U.S. is expected to propose barring Chinese software in autonomous and connected vehicles in the coming weeks.

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THE HOTTEST THING IN TECH
Why Blackrock Bucked the AI doomer Trend

BlackRock, the world's largest asset manager, has led a $640M Series D round for Groq, a startup specializing in AI inference chips. This significant investment, valuing it at $2.8 billion, defies the prevailing "AI doomer" narrative and the current market meltdown which included key rival Nvidia losing major market value. It also underscores BlackRock's confidence in the long-term potential of AI hardware and Groq’s unique tech approach, even as some investors express skepticism about the industry's ROI potential.

Groq's LPU Differentiator

Groq's Language Processing Units (LPUs) are designed to optimize AI inference, the process of deploying trained AI models for real-world applications. Its focus on efficient, high-throughput inference, particularly for LLMs, addresses a critical bottleneck in the AI ecosystem, especially with Nividia’s latest Blackwell GPU chips now being delayed by three months.

Currently GroqCloud’s limited scalable cloud space has been prohibitively expensive as they were focused on training their own models, meaning they were mainly used by enterprise clients among Fortune 500 companies. It was also available on hobbyist free plans with tiny rate limits, effectively preventing production use.

A New Era for GroqCloud

With this funding, however, Groq plans to expand its cloud-based inference service to enable developers to easily build and deploy AI applications using popular open LLMs like Meta’s shiny new Llama 3.1. This vision unlocks a ‘scale as you need’ service providers like Octo offer. It also unlocks a BYOM ‘bring your own model’ service for users to ‘fine-tune’ leading off-the-shelf open models like Llama 3.1, served at Groq’s blazingly fast speeds.

BlackRock's Longterm Strategic Vision

BlackRock's $300M investment in Groq can be seen as a strategic bet on the future of AI infrastructure. While some investors focus on the lack of immediate revenue streams, it seems to recognize the long-term value of companies like Groq that are building the foundational tech for the next generation of AI applications.

This investment challenges the "AI doomer" narrative and signals BlackRock’s belief that the AI industry is still in its early stages and that significant growth and revenue opportunities lie ahead.

FOR INVESTORS
Open Deals

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1. Robotics for Agricultural Efficiency - Pittsburgh - Built & deployed robotic hardware for the largest U.S. tree nurseries, reducing costs and increasing efficiency by 50x. Hardware and AI data layer. Beginning to scale globally. Post-revenue, at capacity.
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2. Quant Fund Actively Raising - New Jersey - Large-scale automated algorithms designed for volatile U.S. equity markets. Profitable through extensive backtesting and live trading. Seeking equity investment for new fund.

3. Cricket for the Modern World - India - Physical and virtual ecosystem fostering cricket experiences for enthusiasts and upcoming professionals. Data-driven, locally proven, globally scaling. (Seed)

4. AI Agent Employees - New York - Sophisticated workflow automation for businesses towards fully autonomous organizations. Previously-exited founder. Backed by Tribe & Kenetic. (Seed)

5. Outbound B2B Campaign AI Co-Pilot - Lexington, MA - Turn any CRM into an AI optimized sales agent for personalized customer campaigns. Founder previous exit to PE. Notable Angel on board. Top Hubspot App. Post revenue. (Seed)

6. Therapy for Baldness - Los Angeles, CA - Developed by ex-Kythera R&D Leader. Virtual development model and world class team seeking to fund POC study. (Seed)

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Job Candidates

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1. Struck Capital Venture Associate, ex-West2East (Russell Wilson) Director of Special Projects, ex-Phoenix Holdings Investment Associate. Harvard BA. Vietnamese pro basketball player.

2. Lockheed Martin Software Engineer, ex-Rutgers Junior Full Stack Developer. Secret clearance. Expertise in C++, PHP, SQL. Rutgers BA in Computer Science.

TRENDING TOOLS AND BUZZY TECH
Tools

Figure - Trailer of 02, “the most advanced humanoid robot on the planet”

Avi - Friend, an AI wearable designed to combat loneliness

Cixin Tech - New P1, 6nm Arm 12-core AI PC chip, capable of 45 TOPS.

Tech

Elon Musk - 1. Neuralink’s second patient implant successful. | 2. Tesla files patent for robotics AI-powered camera vision system.

UC Berkeley - Humanoid bot research tool for learning-based control.

Ubotica - 1st, AI-backed satellite provides real-time terrestrial object id.

DEALS WE’RE WATCHING
Closed Deals:

Nvidia Rival - California AI chip startup Groq has raised $640M, bringing its total to $1b and doubles its valuation to $2.8b. The round was led by Blackrock and joined by Neuberger Berman, Cisco, KDDI and Samsung.

Loyalty + Credit Cards - New York startup Bilt Rewards raised $150M to offer loyalty programs and co-branded credit cards that earn points on their rent payments.

Deals to Watch:

Lumen Technologies - The data center networking and cyber-security firm secured deals worth $5b from cloud and tech companies including Microsoft. It’s also negotiating a further $7b in sales opportunities.

Character.AI - The conversational AI chatbot startup granted Google a non-exclusive license to its LLM tech, the CEO and co-founder will join Google team. It also open-sourced its Prompt Poet prompt design tool.

Reddit - Acquiring Memorable AI, a startup that uses gen AI to help marketers create better ads, its first acquisition since going public in March.

Funding Buzz Watch:

Thrive Capital - Josh Kushner’s VC firm closed its ninth flagship fund with $5b+, its largest raise to date, and one of the year’s largest. $1b is earmarked for early-stage, and $4b for growth bets with an AI focus.

Breakthrough Energy Ventures - Bill Gates-backed firm secured $839M towards its third climate-focused fund - the largest climate fund raised so far in 2024, it is reportedly targeting around $1b total.