Strange Effect
w.234 | CoComelon, AI, $600Bn question, State of the Cloud, AI again
Dear Friends,
Hope you had a nice week, maybe, with a Juneteenth reflection in the middle.
I’m traveling this week and next. It’s so nice to catch up with old friends, new partners, and founders we’ve backed. There is so much opportunity out there as the world is changing.
Today's Contents:
Good Reads: Sensible Investing
Song of the Week: Strange Effect
Good Reads: Sensible Investing
How CoComelon Captures Our Children’s Attention in The New Yorker. This fascinating article is about Moonbug, a holding company for viral children’s YouTube videos bought by Blackstone for $3Bn. It also discusses how they use AI to produce content faster and at a lower cost.
According to Nielsen, CoComelon has been streamed on Netflix for more than thirty billion minutes each year for the past three years. Even as it remains basically unknown to most people who have not semi-recently changed a diaper, it has become one of the most successful entertainment franchises ever.
AI’s $600B Question. The AI bubble is reaching a tipping point. Navigating what comes next will be essential. Article by Sequoia. I love these short, easy-to-follow analysis pieces. This one is on the implied revenue necessary to make back the current AI infrastructure expectations in the market. It’s a follow-up piece from Sept 23 noting a few market changes:
The supply shortage has subsided: Late 2023 was the peak of the GPU supply shortage.
GPU stockpiles are growing: Nvidia reported in Q4 that about half of its data center revenue came from the large cloud providers. Microsoft alone likely represented approximately 22% of Nvidia’s Q4 revenue.
OpenAI still has the lion’s share of AI revenue: The Information recently reported that OpenAI’s revenue is now $3.4B, up from $1.6B in late 2023. While we’ve seen a handful of startups scale revenues into the <$100M range, the gap between OpenAI and everyone else continues to loom large.
The $125B hole is now a $500B hole: In the last analysis, I generously assumed that each of Google, Microsoft, Apple and Meta will be able to generate $10B annually from new AI-related revenue.
It’s not over—the B100 is coming: Earlier this year, Nvidia announced their B100 chip, which will have 2.5x better performance for only 25% more cost.
State of the Cloud 2024 - Annual report from Bessemer Ventures. Five trends:"
Vinod Khosla on the advice they are giving portfolio companies on AI:
Song of the Week: Strange Effect
Video on YouTube.
“Strange Effect” Killing Eve version by Unloved
This song version features in TV Series Killing Eve; I greatly enjoyed Season 1 and recommend it to you.
Killing Eve centers on two women; Eve is a bored, whip-smart, pay-grade MI5 security officer whose desk-bound job doesn't fulfill her fantasies of being a spy. Villanelle is a mercurial, talented killer who clings to the luxuries her violent job affords her. Based on the novellas by Luke Jennings and written by Phoebe Waller-Bridge (Fleabag), Killing Eve topples the typical spy-action thriller as these two women, equally obsessed with each other, go head to head in an epic game of cat and mouse.
You make my world seem right
You make my darkness bright, oh yes
You've got this strange effect on me
And I like it, and I like itSelfie of the Week
I’m spending some more time on the west coast and was able to catch the launch event for the latest edition of Palladium Magazine with friends.
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn