The Weekly Innovation review is back, after a (very) extended break!
Meta (META) has been handed a €1.2 billion fine by the EU’s Data Protection Commission, based in Ireland, for privacy violations, and ordered to suspend transfers of user data to the US. One of the primary concerns is that user data may (or is) exposed to US-based surveillance programs. Meta contends they are being singled out and used as a sacrificial lamb. Per the ruling, they have been given six months to comply (and bring EU user data back to Europe). Meta will highly likely appeal the decision, within which time it is likely that the EU and US sign off on a legal framework called the Trans-Atlantic Data Privacy Framework, to properly protect data between the two regions. A summary of this framework can be seen here.
Microsoft (MSFT) has announced that Windows will get a new AI assistance called Copilot which will seamlessly integrate across all Windows and third-party apps. For examples, users can ask for a summary of PDF documents, ask Spotify for specific playlists (i.e. “play modern acoustic music without lyrics to help me concentrate”). It is expected that we will see an influx of plugins for the new feature, including Spotify, Expedia, Instacart, Kayak, Klarna, TripAdvisor and Zillow.
Flood Hub, Google’s (GOOG) flood prediction platform, has expanded to include 60 new countries (80 total). The platform expansion, with monitoring over 1,800 locations, will help 460m people living in global flood prone locations.The platform, leveraging AI and multiple data sources, gives individuals and organisations up to seven days advance warning of an incoming flood. In the example below, you can see a view of the prediction for a current flooding event in the DRC. Ultimately it is expected that these insights will expand and be integrated into Google Maps, search, Google Home and other products to provide timely and critical information.
Amazon (AMZN) can now launch its palm scanning check out technology, Amazon One, through bars and licensed venues, with the technology now able to verify age. The platform will kick off at Coors Field in Colorado, before a broader roll out through venues in the US. Staff at licensed venues will see a “+21” verification along with a photo of the customer upon each transaction.
Flexport (private), which just acquired Shopify’s (SHOP) logistics and fulfilment network in lieu of 13% of its stock, is launching a truck brokerage business. The business, which will take care of domestic transportation of imports, will be led by former Amazon executive (and head of Uber Freight) Bill Driegert. Flexport is currently led by Dave Clark, the architect of Amazon’s logistics network. Flexport’s expansion will help create an end-to-end logistics network which will underpin Shopify’s fulfilment and its ‘Shop Promise’ of next day and two day delivery.
Uber (UBER) is partnering with flight booking platform Hopper (private) to enable seamless domestic and international flight reservations for UK customers via the Uber app. Users in the UK can already use Uber to book bus and train travel through the UK and Europe (including on Eurostar). Canada’s Hopper launched in 2007 and has raised $730m in capital since then. In separate news, Uber also announced that they will be partnering with Google to offer Waymo self-driving taxis to users of the Uber platform. The feature is currently only available in Phoenix, Arizona. This comes two years after Uber sold its Advanced Technologies Group (ATG), with ambitions to compete with Waymo, to Amazon-backed Aurora for $10bn.
China has moved to restrict the use of Micron (MU) memory chips in domestic technology such as phones, computers and other electronics. In a post on Chinese messaging app QQ, the Cyberspace Administration of China says Micron’s products had “serious cybersecurity problems which posed major security risks to China’s critical information infrastructure supply chain”. At present, China (and HK) account for ~15% of Micron’s sales (see below). Any shortfall will likely be picked up by Korea’s Samsung and SK Hynix; although according to the FT, the US will try and influence Korea to hold back from filling the void. Over the past couple of years, the US have announced wide ranging restrictions on the export to China of chips and chip making technology, specifically chip technology which enables leading edge technology.
Meanwhile, China is becoming concerned that Japan’s curbs on the export of chipmaking equipment, like Nikon’s lithography machines (below), will be “more disturbing to China than Washington’s sanctions”, according to a chip factory executive interviewed by the FT. This is because Washington’s restrictions (and those of the Netherlands) are focussed mostly on the most sophisticated processes (i.e. 7nm and below) whilst Japan’s restrictions encompass older processes as basic as 45nm. Such restrictions force China into a corner where they either have to build their own sovereign capability (extremely time and money intensive) or look at ‘acquiring’ such technologies in the region.
There’s a lot (more) happening on the AI front this week!
ChatGPT challenger Anthropic (private) has raised $450m (on top of >$1bn already raised) from Spark Capital, Google, Salesforce and Zoom. The startup’s CEO, Dario Amodei, was part of a group of OpenAI researchers who split from the business to establish Anthropic in 2021. The funding will, according to Amodei, support “AI research and products that put safety at the frontier”. This follows a surge in investment in the industry, with OpenAI securing a multi-billion dollar investment from Microsoft (valuing the business at ~$30bn). Similarly, Reid Hoffman’s Inflection (private) raised $225m last year from unknown sources, whilst Cohere (private) has raised $415m from ~11 investors including a $250m round in May this year from Nvidia, Salesforce and Index Ventures.
The UK’s Builder.AI (private) also closed a $250m round this week (bringing their total raised to $450m). Builder AI allows customers to build the foundation of an app using AI, with the assistance of experts to fine tune and manage the app build. The areas of design, app and website development will be hugely disrupted in the coming years, making it a very anxious period for executives at companies like Wix, Squarespace, Wordpress, Canva and Fiverr (to name a few) as they battle it out against challengers and, moreso, incumbents with deep pockets (i.e. Adobe Firefly, below, and a Microsoft Designer).
Finally, The Information has suggested that Neeva (private), a company which was touted as a contender to challenge Google Search, is shutting their search engine and AI business and possibly selling out to Snowflake (SNOW). Neeva’s software combines search with large language models (LLMs), which are trained on text to understand the nuances of speech and writing. Neeva was last valued at $250m at the time of it’s last funding round in 2021. Databricks (private) has also been thrown around as a potential suitor.
Thank you and have a great week and weekend ahead,
Charlie Nave
LinkedIn or E-Mail (cnave@granitebaycap.com)
Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity. Any views expressed in this article are those of the author(s) and do not constitute financial advice.