Episode 10 of “This Week in Local” explores two topics on the minds of Localogy analysts Mike Boland and Charles Laughlin. First, the analysts bat around the news that Yext has rolled out a new enterprise chatbot built on Open AI’s GPT3. And then we talk about Affirm’s earnings and the state of buy now, pay later. This evolved into a discussion on the true meaning of all the big tech layoffs we’ve been reading about.
Part 1: Yext’s AI Activity
Mike kicked things off by talking about something he recently covered for Localogy Insider, the announcement of Yext Chat. This is a new AI-powered chatbot from Yext built on OpenAI’s GPT-3, which is the large-language model behind ChatGPT.
Mike says Yext Chat “allows enterprises to integrate a white label chat function on thier web properties.” Thus far, use cases for Yext Chat tend to be customer facing. Think customer-service, etc.
One the podcast Mike draws a parallel between Yext Chat and Yext Search.
“Yext search is essentially a customized search engine that you can add to any website,” Mike explains on the episode. “It essentially ingests a company’s knowledge base and forms a search index. Yext Chat will operate in a similar way. It will tap into a similar set of resources to drive the AI engine.”
Mike said Yext’s timing with the new Chat tool is optimal, given the massive attention and interest generated by ChatGPT. “This scratches that itch,” Mike said on the episode.
Part 2: The True Meaning of Layoffs
Charles then raised a topic he often talks about — buy now, pay later. Specifically, recent earnigns results from BNPL leader Affirm that hinted at tough times ahead for the buy now, pay later industry, which remains popular but controversial. Two points jumped out. One was that rising interest rates could be an existential threat to BNPL given that the BNPL platforms borrow money to pay merchants up front for consumer goods, then collect the money in installments form consumers. The cost of these funds can break a BNPL platform if they go up too high, too fast.
Charles noted that Affirm CEO Max Levchin announced layoffs on the earnings call, citing inflation and rising interest rates as threatening headwinds.
This pivoted into a discussion where Charles cited data compiled by Professor Scott Galloway (a favorite source of ideas for This Week in Local). The data shows that most recent BigTech layoffs really just chipped away at massive pre-pandemic hiring at Google, Amazon, etc. Galloway’s point was that the layoffs, while painful to those impacted, are not really a signal of a declining economy. And the headlines touting the size of the layoffs have created a false impression that tech is in freefall, threatening the broader economy. Galloway insists this is not the case.
On the podcast, Mike and Charles accepted Galloway’s basic point. But they also asked if that so many of the pandemic hires remain on staff suggests more layoffs ahead. We got a hint at the answer this week. Meta CEO Mark Zuckerberg announced more layoffs were coming at the social media giant.
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