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Hey TEDchats Fam!

Happy Wednesday! Have you ever stumbled upon a seemingly trivial Reddit meme, only to find it sparking a deeper thought or conversation? This is the essence of Reddit's journey - a platform where every post and meme carries the potential to redefine value in the digital era. As we embark on the tale of Reddit's AI-driven IPO, remember: sometimes, everyday online interactions can unexpectedly shape the future of technology.

👀 SNEAK PEEK

🚨FEATURE STORY

Reddit's Betting Big on AI for IPO Triumph

In a world where initial public offerings (IPOs) for tech companies have become as rare as an honest internet debate, Reddit, the juggernaut of online forums, prepares to shake up the stock market. But the real story? It's all about the power of AI.

An IPO Fueled by AI Ambitions

Reddit, renowned for its diverse communities and vibrant memes, has recently reported a net income loss of $90.8 million in 2023, even with revenues exceeding $800 million (read report here, page 18). Despite its "unprofitability" label, Reddit is poised for a substantial stock offering that could stand among the largest U.S. IPOs this year. The stock is slated to be traded on the New York Stock Exchange under the symbol "RDDT". As it edges toward a public offering, Reddit's journey mirrors a tech adventure novel – complete with highs, lows, and unexpected twists.

At the Crossroads of Finance and Innovation

Here’s the rub: Reddit’s financial success is yet to be proven, making its IPO a high-stakes gamble. Investors are often enamored with growth stories, but Reddit's unprofitability poses a significant hurdle. The company finds itself at a critical crossroads, seeking to transform its vast trove of user-generated content into a lucrative asset.

The plot twist? AI enters the scene. Reddit's expansive collection of texts and memes, once seen as mere entertainment, is now a potential goldmine for AI development. Data-hungry AI companies could provide the impetus Reddit needs to convert its raw, user-generated data into a valuable commodity.

Let’s Talk Money…

To improve its financial prospects, Reddit has recently secured a $60 million annual licensing deal with an undisclosed AI company. This deal allows the AI firm access to Reddit's extensive archive of user-generated content spanning over a decade for the purpose of training their AI models. Reddit's IPO prospectus, filed with the U.S. Securities and Exchange Commission (SEC) last month, disclosed an even larger aggregated contract deal, totaling $203 million for terms spanning two to three years. In the IPO, Reddit stated that its "growing platform data will be a key element in the training of leading large language models (“LLMs”) and serve as an additional monetization channel for Reddit". Updates to the IPO now specify a further sale of over 15 million Class A common stock shares at $31.00 to $34.00 each, aiming to raise more than $465 million. Overall, Reddit's AI initiatives, combined with its planned market debut, target a valuation of up to $6.4 billion.

Reddit's IPO Countdown

However, as Reddit marches towards its public debut, the outcome remains shrouded in uncertainty. Will its AI-driven strategy resonate with investors, or will it falter like a downvoted post? Overall, Reddit’s IPO could potentially set a precedent for how tech companies leverage AI. If successful, it might not only herald a revival of tech IPOs but also signify a new phase where user-generated content is key in the AI-driven marketplace. See Reddit’s filed IPO here and amendments here.

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🍕 QUICK BITES

Elon Musk's xAI Unveils Plans to Open Source Grok

Grok, an AI platform developed by Elon Musk's xAI startup and a competitor to OpenAI's ChatGPT, has been accessible to customers who subscribe to X's premium+ monthly plan, priced at $16. In a striking development, Musk has announced the plan to open-source Grok. Despite the lack of further details on the exact plan, this move raises questions about timing, particularly in the context of Musk's lawsuit against OpenAI, where he challenges the profit strategies of the AI firm. Nevertheless, it also prompts important inquiries about the future of AI development and the significance of open-source technology in advancing the field (see Elon Musk’s brief announcement).

Midjourney Imposes a Ban on Stability AI Employees

Midjourney reportedly banned all Stability AI employees after a major service outage. Described as 'botnet-like activity', this disruption is allegedly connected to two accounts associated with Stability AI staff. Stability AI's CEO, Emad Mostaque, initiated an internal investigation, emphasizing in an X post that the attack was “certainly not instructed by us/Stability AI”. In response, Midjourney founder David Holz offered assistance to Mostaque, mentioning that he sent “some information to help with your internal investigation". With both firms specializing in AI-powered image generation, this public dispute signifies a notable escalation in tensions between prominent AI companies (read more).

Google Gemini Puts the Brakes on Election Queries

In a significant policy shift, Google's Gemini AI has begun restricting its responses to election-related queries in countries actively holding elections. This decision is part of a broader effort to prevent the potential misuse of AI in shaping public opinion and spreading misinformation during critical election periods. The restriction includes a range of queries about political parties, candidates, and politicians, with Gemini directing users to try Google Search for these topics. This change underscores the growing influence of AI in political processes and the challenges in ensuring accurate and unbiased information (read more).

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🤯 MIND SPARK

Can Advanced AI Lead to Human Extinction? A U.S. government-commissioned study has sparked controversy in the tech community, boldly asserting that advanced AI and artificial general intelligence (AGI) could destabilize global security, posing an extinction-level threat to the human species. Although the research received a U.S. government grant, the study clarified that the opinions, findings, and conclusions do not necessarily reflect those of the United States Department of State. Separately, a peer-reviewed paper has been recently published in an academic setting that delves deeper into this topic (find the paper here).

Midjourney is Addressing a Significant Issue — The Inconsistency of Characters in Image Generation: Reproducing the same character in diverse environments or during different actions has consistently led to a problem: the characters simply don't look the same. In response, Midjourney has announced the release of a new algorithm currently undergoing testing to ensure "consistent characters" across various images (see Midjourney’s announcement).

Why Can't We Always Distinguish Between an Older AI Model and its New, Improved Version? The answer lies in the benchmarks used to assess AI models' strengths and weaknesses, which interestingly vary significantly among different tech companies. This was recently evaluated in a TechCrunch article (find the article here).

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