Three Things (7/24)

Llama 3.1

Meta launched Llama 3.1, a new open-source AI model, which is accessible to any company that wants to train its own models without having to pay a licensing fee or ask for permission. Until today, open source large language models have mostly trailed behind their closed counterparts when it comes to capabilities and performance, but Meta’s new launch closes the gap. Meta’s experimental evaluation suggests that the LLM is competitive with leading foundation models, including OpenAI and Anthropic.

The launch makes us wonder why Meta would essentially give code away for free. Meta benefits from being open-source because (i) they can reap the benefits from developers who build on top of their AI models: more users = more data. (ii) It gives them the opportunity to create strong partnerships with Nvidia, without being tied to any single vendor. Zuck and Co. want to avoid an Apple situation where a direct competitor has control over what new features can be shipped. (iii) Meta wants to be at the center of every firm’s AI infrastructure so that they can attract top talent and grow the brand - a goal that’s even larger than the LLM itself and what’s better than free access for bootstrapping startups?

Surveillance pricing

FTC orders were sent to eight third-party consultancy firms that specialize in offering surveillance pricing to clients. Mastercard, Revionics, Bloomreach, Chase, Task Pros, Accenture, and McKinsey & Co are said to help their corporate clients drive unique purchasing experiences, using AI and machine learning in combination with historical and real-time customer information. The FTC’s goal is to protect the consumer and dive deeper into the data sources being used to make pricing decisions.

There’s an entire industry built on personalized pricing models. However, there's a difference between a consumer opting into a higher pricing tier for a credit card or a Peacock streaming subscription versus a business charging two different prices for the same service based solely on personal data. The FTC wants to shed light on the shadiness of price discrepancies, and we think it’s a business opportunity for CEOs to inject transparency into their pricing models as a way to win over worn down consumers.

Wiz acquisition falls apart

Google’s highly anticipated acquisition of Wiz fell apart after the cybersecurity cloud company walked away from a $23 billion offer. The deal would have been Google’s largest acquisition to date, a sign that the mega-cap tech company is prioritizing cybersecurity within its cloud division.

The news that the deal crumbled comes right after the disastrous Crowdstrike outage that left hospitals unable to operate, planes grounded, and entire stock exchanges unable to process trades. It’s possible that Wiz recognizes the greenfield ahead as companies across every industry will be looking internally to boost their own cybersecurity defenses. The vast number of data breaches across the U.S. this year have boosted cyber company valuations, and the Crowdstrike debacle could certainly perpetuate this trend. The founder of Wiz likely sees opportunities for growth that he isn't prepared to leave behind, even if Google is the suitor.

Disclosures:

As of writing, META, AAPL, GOOGL, MA, and NVDA are holdings in Titan's Flagship strategy. As of writing, Anthropic is a 4.66% holding and OpenAI is a 4.00% holding in the ARK Venture Fund.

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