{"id":10643,"date":"2024-10-05T01:50:17","date_gmt":"2024-10-05T01:50:17","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/10\/05\/tech-5-openai-closes-on-us6-6-billion-in-funding-cerebras-files-for-ipo\/"},"modified":"2024-10-05T01:50:17","modified_gmt":"2024-10-05T01:50:17","slug":"tech-5-openai-closes-on-us6-6-billion-in-funding-cerebras-files-for-ipo","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/10\/05\/tech-5-openai-closes-on-us6-6-billion-in-funding-cerebras-files-for-ipo\/","title":{"rendered":"Tech 5: OpenAI Closes on US$6.6 Billion in Funding, Cerebras Files for IPO"},"content":{"rendered":"

Geopolitical tension clashed with uplifting jobs data, making for an interesting week on Wall Street. <\/strong><\/p>\n

Meanwhile, the crypto market went on a wild ride along with the greater stock market, and the US Securities and Exchange Commission (SEC) revived a nearly four-year-old case against Ripple Labs. <\/p>\n

At OpenAI, a previously announced funding round wrapped up, bringing the company\u2019s valuation above estimated projections. <\/p>\n

\n

1. OpenAI concludes latest funding round, exceeding target <\/h3>\n

OpenAI is predicting its revenue will reach US$11.6 billion next year, significantly surpassing the estimated US$3.7 billion it is projected to make in 2024. A Reuters source says this growth will be driven by corporate sales of its AI features and subscriptions to ChatGPT.<\/p>\n

Bloomberg reported on September 11 that the company was seeking US$6.5 billion in a new funding round, drawing interest from venture capital investors and industry peers. OpenAI ultimately raised US$6.6 billion, announced on Wednesday (October 2), resulting in a valuation of US$157 billion, according to a press release. <\/p>\n

While OpenAI did not disclose the full list of investors, reports indicate participation from Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA) and SoftBank (TSE:9984), along with several venture capital firms. NVIDIA\u2019s contribution of roughly US$100 million marks the company\u2019s first investment in OpenAI. Its share price surged over 3 percent from Wednesday\u2019s close on Thursday (October 3) morning. The company gained 5.69 percent this week.<\/p>\n<\/div>\n

<\/small><\/p>\n

NVIDIA\u2019s performance, September 30 to October 4, 2024. <\/em><\/p>\n

<\/small><\/p>\n

Chart via Google Finance. <\/em><\/p>\n

While Apple (NASDAQ:AAPL) was rumored to be considering participation in the funding round, the Wall Street Journal reported on Monday (September 30) that the company ultimately decided not to invest. <\/p>\n

Its share price is down over 2 percent for the week.<\/p>\n

The funding round came in the form of convertible notes, with the stipulation of a successful restructuring to give majority control to a for-profit arm. There is also a clause to remove the cap on returns for investors and a condition that prevents inventors from backing rival companies, such as Elon Musk\u2019s xAI, as reported by the Financial Times.<\/p>\n<\/div>\n

\n

2. Crypto markets rally, end the week on a high note <\/h3>\n

Bitcoin\u2019s record-breaking September came to an abrupt end on Tuesday (October 1), with the cryptocurrency falling 6.8 percent to US$61,279.47 on Friday (October 4) morning from its peak of US$66,078. Ether, Solana, Cardano, XRP and Ton also experienced losses this week, and hefty outflows from spot exchange-traded funds were observed. <\/p>\n

10x Research attributes Bitcoin\u2019s initial drop on Monday to overbought conditions and apprehension surrounding Tuesday\u2019s monthly US ISM Manufacturing data, a key economic indicator. <\/p>\n

Further losses across the crypto market were fueled by rising tensions in the Middle East and the dockworkers strike along the east coast of the US. These events quickly dashed hopes of a bullish \u201cUptober,\u201d a term used to describe a historically positive period for cryptocurrency prices in October. <\/p>\n

Amid these volatile trading conditions, on Wednesday crypto asset manager Bitwise filed a Form S-1 with the SEC to launch an ETF for Ripple Labs\u2019 XRP token. This move came as the SEC filed a notice to appeal Judge Analisa Torres\u2019 August 7 ruling on Ripple Labs. The ruling states that Ripple Labs was in violation of securities law only when tokens were sold to institutional investors, and the judge ordered the company to pay a fine of US$125 million for improper selling \u2014 just over 6 percent of the US$2 billion the SEC was seeking. <\/p>\n

In a statement, an SEC spokesperson said, \u2018We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit.\u2019<\/p>\n<\/div>\n

<\/small><\/p>\n

Bitcoin\u2019s 24 hour price performance as of Friday at 4:00 p.m. PDT. <\/em><\/p>\n

<\/small><\/p>\n

Chart via CoinGecko.<\/em><\/p>\n

However, the tone shifted again on Friday afternoon as the US Department of Labor reported that the economy added 254,000 jobs in September, much higher than the expected 150,00. This provides a compelling rationale for the Federal Reserve to reduce interest rates gradually, which is good news for crypto markets. Bitcoin and Ether are up 2.3 percent and 3.4 percent, respectively, just after Friday\u2019s closing bell, marking the end of a turbulent first week of Q3.<\/p>\n<\/div>\n

\n

3. California governor vetoes Senate Bill 1047 <\/h3>\n

California Governor Gavin Newsom made a long-awaited decision regarding SB 1047, a comprehensive artificial intelligence policy that would have held developers responsible for \u201csevere harm\u201d caused by their technologies. <\/p>\n

Describing the bill as \u201cwell-intentioned,\u201d Newsom ultimately decided to veto the bill, authored by Senator Scott Weiner (CA-D). In a statement, the governor said the legislation would have applied \u201cstringent standards to even the most basic functions\u201d and that regulation should be based on \u201cempirical evidence and science\u201d. He also noted that a California-only approach to AI regulation could be warranted, \u201cespecially absent federal action by Congress.\u2019<\/p>\n

However, SB 1047\u2019s focus on large, expensive AI models could mislead the public about the level of control over this rapidly evolving technology. It\u2019s possible that smaller, specialized models, not covered by the bill, could pose equal or greater risks, potentially stifling innovation that benefits the public.<\/p>\n

The idea that overly stringent regulation would stifle progress and innovation in the field was the main argument made by opponents of the bill, which included former House Speaker Nancy Pelosi, Big Tech CEOs and venture capital firm Andreessen Horowitz, which has invested billions in AI. <\/p>\n<\/div>\n

\n

4. AI startup Cerebras files for IPO <\/h3>\n

Cerebras Systems, an AI startup that builds specialized computer systems to facilitate deep learning, filed a registration statement for an initial public offering with the SEC on Monday. The company has experienced rapid growth and could one day challenge NVIDIA\u2019s dominance in the chip manufacturing industry in the US. <\/p>\n

Cerebras\u2019 flagship product, the Wafer Scale Engine (WSE), is the largest chip ever made. Unlike traditional graphic processing units (GPUs), including NVIDIA\u2019s H100 GPU, which separate processing and memory, the WSE integration is designed to keep data on the chip rather than transferring it to different locations within a system or across a network. <\/p>\n

The transfer of data creates what\u2019s often called the Neumann bottleneck, a fundamental limitation that hinders performance by slowing down data access. Cerebras\u2019 architecture minimizes the distance data needs to travel, reducing latency and improving performance. This makes it an ideal solution for tasks that require massive data sets, such as genomic research, climate modeling, fraud detection and of course training large language models. <\/p>\n

Recent filings show Cerebras\u2019 revenue surged nearly 70 percent in 2023 to US$78.7 million, compared to US$24.6 million the previous year. At the same time, losses narrowed from US$4.28 per share to US$2.92. <\/p>\n

The company will list its Class A common stock on the Nasdaq under the symbol CBRS. The number of shares and the price range were not determined at press time. <\/p>\n<\/div>\n

\n

5. Tesla stumbles after auto revenue declines <\/h3>\n

Shares of Tesla (NASDAQ:TSLA) are down 3.78 percent for the week following the company\u2019s release of its Q3 results on Tuesday, which showed the company delivered 463,000 vehicles and produced approximately 470,000. <\/p>\n

Tesla also reported a 2 percent increase in annual revenue to US$25.50 billion, topping LSEG estimates of US$24.77 billion. However, auto revenue fell by a whopping seven percent compared to a year ago, topping out at US$19.9 billion. Earnings per share also fell short of estimates, coming in at US$0.52 compared to US$0.62.<\/p>\n

The company has had a rocky year, facing increased competition in China and regulatory scrutiny in the US. In July, sources for Bloomberg revealed that time constraints forced the company to delay the unveiling of its highly anticipated robotaxi from August 8 to October 10.<\/p>\n<\/div>\n

<\/small><\/p>\n

Tesla\u2019s performance, September 30 to October 4, 2024. <\/em><\/p>\n

<\/small><\/p>\n

Chart courtesy of Google Finance<\/em><\/p>\n

Following the report\u2019s release right after Tuesday\u2019s closing bell, Tesla stock fell by over 4 percent in after-hours trading. Its share price slid a further 2 percent after the market\u2019s opened on Wednesday before recovering to around US$250, roughly three percent lower than Monday\u2019s opening price. Tesla closed the week at US$250.08.<\/p>\n<\/div>\n

<\/em>Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Geopolitical tension clashed with uplifting jobs data, making for an interesting week on Wall Street. Meanwhile, the crypto market went on a wild ride along with the greater stock market, and the US Securities and Exchange Commission (SEC) revived a nearly four-year-old case against Ripple Labs. At OpenAI, a previously announced funding round wrapped up, […]<\/p>\n","protected":false},"author":0,"featured_media":10644,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-10643","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/10643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=10643"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/10643\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/10644"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=10643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=10643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=10643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}