In this edition of Localogy’s Local Beats, we examine news and moves from OpenAI, Pinterest & Amazon.
OpenAI Gets Big Bucks
What Happened? Open AI continues its quest for interstellar dominance. This week it closed the largest venture funding round of all time. That happened to the tune of $6.6 billion and a post-money valuation of $157 billion. This brings its total lifetime funding to $17.9 billion. The round was led by former investor Thrive Capital, with participation from Microsoft, Nvidia, SoftBank, Khosla Ventures, Altimeter Capital, Fidelity, and MGX. Open AI will use the massive cash infusion to gain leverage in talent recruitment (currently a seller’s market), platform development and, of course, server/compute costs. That last part drives burn rates with a flamethrower. All of this comes amidst a series of executive departures. Of the 13 people who participated in founding OpenAI almost ten years ago, three remain.
Why Does it Matter? This validates the continued investor confidence in AI and is a symbolic moment for the AI era, which doesn’t seem to be slowing down or reaching bubble/correction status anytime soon. It’s also a reminder that AI is expensive. Though it’s promising and future-changing, it’s massively capital-intensive. This will continue to be an expensive arms race. Buckle in.
Pinterest Pins GenAI
What Happened? Pinterest now offers generative AI product images. It hopes to streamline the creation of product listings by giving users the opportunity to spruce up images using text prompts. We’re talking things like lighting, backgrounds, and other professional touches that otherwise require advanced graphic design, photography or post-production software like Photoshop. Pinterest is a bit late to the game considering that Google Shopping, Amazon, eBay and others have done similar. The goal in most cases is to attract creators, retailers, marketers and anyone else who’s posting products. For Pinterest in particular, this tool is reserved for its advertisers and is now a feature in its Pinterest Performance+.
Why Does it Matter? As done at Amazon, Google, eBay, etc., text-generated product imagery lowers barriers for smaller sellers/marketers to have professional eCommerce product listings. Larger players operating at greater scale can meanwhile preserve their greatest scarcity: time.
Amazon Closes More Go Stores
What Happened? Amazon closed three of its Go convenience stores. All three locations were in New York, which leaves 17 active Go stores in the U.S.. For those unfamiliar, Go stores are Amazon’s first party incubation grounds for its Just Walk Out technology for cashierless shopping. This carries Amazon’s ongoing obsession with smart logistics, in this case to disrupt retail. By eliminating store bottlenecks like traditional checkout aisles, it hopes to boost throughput, free up employees for other store functions and generally optimize yield. After starting in Go stores, the Just Walk Out platform has been spun out to convenience stores, airport stores, grocery, QSR and sports arenas/venues. This is Amazon’s goal for Just Walk Out – a product that retailers of all shapes and sizes adopt.
Why Does it Matter? It doesn’t. The generalist tech press continues to paint Go store closings as a retreat from Just Walk Out. Go stores were never meant to be an ongoing endeavor. They’re a test bed for the technology before rolling it out as a revenue-generating product – basically the AWS playbook.
