TOGETHER WITH INNOVATING WITH AI
Welcome to AI Tool Report!
Thursday’s top story: OpenAI, after weeks of speculation, has officially secured $6.6B in funding, marking the biggest VC round ever seen!
🌤️ This Morning on AI Tool Report
💰 OpenAI officially lands record-breaking $6.6B!
💼 How to become an AI Consultant?
🚨 Google forces start-up to quit?
🎓 How to learn AI like it’s 2024
🧠 How to make good decisions under pressure using ChatGPT
🛡️ Meta’s big move against scams
Read Time: 5 minutes
FACT OF THE DAY
🤔 Sam Altman—CEO of OpenAI—has a stash of guns and gas masks, and has bought land in California in case there’s an apocalypse, which gives us an insight into his interest in the advancement of AI, its existential risk, and his long-standing interest in safeguarding the future of humanity.
STOCK MARKETS
💰 Implications: OpenAI's $6.6B funding round intensifies competition in the AI chip market. Established manufacturers like NVIDIA and AMD face pressure to innovate faster. The investment may lead to new partnerships, increased R&D spending, and potential market expansion. It also challenges chip makers to develop more advanced AI-specific hardware. Learn more.
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FUNDING
Our Report: After mounting rumors over the past few weeks, it’s officially been confirmed that OpenAI has raised $6.6B in its latest funding round, valuing the company—post-money—at $157B ($7B more than originally thought), which is around 40x more than its reported revenue, and marks the biggest VC funding round ever seen, out-doing Elon Musk’s xAI, which raised $6B earlier this year, but on a $24B valuation, post-money.
🔑 Key Points:
As expected, investors included NVIDIA, Softbank, and Microsoft, but the round was led by Thrive Capital, which got a unique deal, enabling them to invest $1B more, at the same valuation, in 2025, if OpenAI hit revenue goals.
The funds will enable OpenAI to become leaders in Artificial General Intelligence (AGI) and “increase compute capacity,” with its projects expected to bring in $100B by 2029 — matching the current annual revenue of Nestlé.
But investors can claw back their funds if OpenAI doesn’t fulfill its pledge to become a for-profit within the next two years (and give CEO, Sam Altman equity) and stop the cap on returns for investors.
🤔 Why you should care: Becoming a for-profit and removing its revenue cap (which is currently fixed at 100x the original amount invested) will unshackle OpenAI’s ability to raise funding, and could allow them to explore longer-term, more capital-intensive projects like building AI chips and data centers (reducing reliance on NVIDIA) and signing licensing deals to shield them from lawsuits and give them a competitive edge, however, they’ll have to do more to keep their employees happy about the direction of the company as, out of the 13 original founding members, 3 remain.
Will the $6.6B funding be the rise or downfall of OpenAI?
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TOGETHER WITH INNOVATING WITH AI
The AI consulting market is about to grow by a factor of 8X – from $6.9B to $54.7B in 2032.
But how does an AI enthusiast become an AI consultant?
How well you answer that question makes the difference between just “having AI ideas” and being handsomely compensated for your contribution to an organization’s AI transformation.
Thankfully, you don’t have to go it alone – our friends at Innovating with AI just welcomed 200 new students into The AI Consultancy Project, their new program that trains you to build a business as an AI consultant.
Some of the highlights current students are excited about:
The tools and frameworks to find clients and deliver top-notch services
A 6-month plan to build a 6-figure AI consulting business
Students getting their first AI client in as little as 3 days
❗And as an AI Tool Report reader, you get early access to the next enrollment cycle.
TRENDING TOOLS
Meco is a distraction-free space for reading and discovering newsletters, separate from the inbox. ⭐⭐⭐⭐ / 5 (Product Hunt)
Fusion is an AI-driven tool that enhances the efficiency of ad campaigns
VideoToPage summarizes and repurposes video or audio clips
Macky gives AI-powered answers to any business question
OctAI is an AI prompt generator for content creation
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COMPETITION
Our Report: In August, Google paid AI start-up and chatbot creator, Character.ai, $2.7B to acquire its models and then went on to hire 20% of its staff (including its co-founders), and the start-up has just revealed that it’s had to change its entire strategy, as it can no longer compete with the likes of OpenAI, Microsoft, or Google.
🔑 Key Points:
CEO, Dom Perella, revealed the company has been forced to abandon its plans to build bigger and better Large Language Models (LLMs) and will re-focus on improving its consumer chatbot products instead.
Perella disclosed that training AI was “insanely expensive” and too difficult to fund “on a start-up budget," which follows similar admissions from start-up Aleph Alpha, which also pivoted its LLM ambitions, due to high costs.
Character.ai bought out its investors with the $2.7B from Google and reportedly has enough capital to run for another 18 months, although it hopes to raise from VCs and ink licensing deals, to help with training.
🤔 Why you should care: This has exacerbated concerns that big tech companies (like Google, OpenAI, and Microsoft) are dominating the AI market space, preventing smaller start-ups from entering—harming fair competition—which is something global regulators are trying to tackle with ongoing investigations into certain ‘agreements’ like Microsoft's $13B alliance with OpenAI and its $650M deal to hire AI start-up—Inflection’s—staff, including CEO, Mustafa Suleyman, but despite this, Perella hopes Character.ai’s deal with Google will not trigger antitrust concerns, as it wants to operate in the same sector.
Has Google’s deal hampered character.ai’s ability to operate in the LLM sector or, as a start-up, were they always doomed to fail due to the high costs involved?
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TOGETHER WITH BRILLIANT
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PROMPT ENGINEERING
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Thursday’s Prompt: How to make good decisions under pressure using ChatGPT
Type this prompt into ChatGPT:
What are some strategies to improve decision-making in high-pressure situations?
Results: After typing this prompt, you will get strategies to help improve how you make decisions during high-pressure situations.
P.S. Use the Prompt Engineer GPT by AI Tool report to 10x your prompts.
ACTIONABLE INSIGHTS
A leading US bank faced a daunting task: Unify processes from 6 acquired banks and merge 1.8M documents into a single system.
The answer? Datamatics' AI-powered system.
In just 42 days, 35M pages were digitized, classified, and made searchable. Document retrieval time plummeted from 48 hours to minutes, and classification accuracy improved by 87%.
BREAKING NEWS
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SAFETY
Meta has launched an initiative (currently just in the UK/Australia)—Fraud Intelligence Reciprocal Exchange (FIRE)—to stop criminals using AI-generated images to scam people on social media.
FIRE is a tool that enables Meta and UK/Australian banks to collect and share data about online scams and, since launching in April, Meta has deleted over 9,000 scam pages and 8,000 AI image scams.
Meta will bring more banks on board and work with other institutions to strengthen its fraud detection capabilities as once blocked, scammers “will look for other ways to get around our defensive and come back.”
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Until next time, Martin & Liam.
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