Enterprise Weekly #483: AI's Double-Edged Sword, OpenAI o1, and More
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Happy Fall Friday!
While we’ve been discussing how big-tech is pouring money into infrastructure for the next-phase of the AI race, we’re starting to see early signs that AI’s performance gains can be a double-edged sword:
🗡️ On one side: LLMs increase coding efficiency and lower the cost of building software. Every day we see new demonstrations showing how easy it is to build fullstack apps with tools like Cursor, Zed, among many others.
🗡️ On the other side: Those same performance gains could hurt vendors in the long run. If the barrier to building software is lower, we can expect to see many more products come to market, the minimization of technical moats, and increased pricing pressure on software vendors.
Ultimately, will companies choose to build or buy? Will customers rip out existing tools in favor of custom built products bespoke to their use cases?
Klarna suggested this is possible when it announced it was ending its usage of Salesforce and Workday and replacing those vendors with home-built AI applications. This is all part of the company’s master plan to reduce costs by consolidating their tech stack and reducing the size of their company 50% over the next few years.
However, we don’t believe this strategy is replicable for most companies. Bespoke internal tooling may become more approachable for companies, but the total cost of ownership of technology, challenges of changing workforce habits, and privacy / regulatory demands at scale are just a few of the problems that will arise. Whether this is a publicity stunt to reinvigorate Klarna ahead of an IPO or a reality in how software is built and delivered is yet to be seen - we’re very skeptical.
In other AI news, OpenAI developed a new series of AI models, OpenAI o1, designed to spend more time thinking before they respond. These models aren't just the next step up from GPT-4o, and could be OpenAI’s next bet on enabling truly agentic outcomes. However, it comes with significant trade-offs, like higher costs, but offers improved fact-checking abilities and enhanced accuracy due to new "reasoning" capabilities. While testing is outperforming PhD-level humans in tests, not everyone is gung ho about its performance.
🗓️ Join more Work-Bench events:
September 25th: NYC SaaS Happy Hour for founders & operators
October 2nd: NYC Data Center Roundtable co-hosted with Zac Smith for practitioners looking to discuss next-gen AI data centers, edge computing, the search for accessible energy, and more
📚 Read more news:
Business Insider: The Female 'Founder Mode' Double Standard
Business Insider: 44 Of The Most Promising AI Startups of 2024
The Verge: Anthropic’s Mike Krieger Wants To Build AI Products That Are Worth the Hype
📚 Read more (th)reads:
- on the Chief Go-To-Market Officer
Chris Orlob on 9 lessons learned about sales demos
**See more in our playbook on Leveling Up Discovery & Demo Calls
Company: GovWell
Role: Founding Data Engineer
Technology: Modern software
Funding: $4.5M from Workbench, Bienville Capital
🌟 Company of the Week 🌟
Zephyr Cloud raises $3.5M led by True
Infrastructure / Dev Tools • Seed • Atlanta, GA
Co-Founders: Zack Chapple (CEO), Dmitriy Shekhovtsov (CTO)
Cashmere raises $3.6M led by Canapi Ventures
Sales / Marketing • Seed • Los Angeles, CA
Element Security raises $5M led by Q Fund VC, and Others
Risk / Security • Seed • Tel Aviv, Israel
Realm.Security raises $5M led by Accomplice and Glasswing Ventures
Risk /Security • Seed • Boston, MA
Nostra AI raises $8.9M led by High Alpha
Sales / Marketing • Venture • New York, NY
Illuma Labs raises $9M led LiveOak Ventures
Risk / Security • Series A • Plano, TX
Operant AI raises $10M led by SineWave Ventures and Felicis
Risk / Security • Series A • San Francisco, CA
Protege raises $10M led by CRV
Data / AI / Machine Learning • Seed • New York, NY
StackGen raises $12.3M led by Thomvest Ventures
Infrastructure / Dev Tools • Seed • San Francisco, CA
Landbase raises $12.5M led by A*, 8VC, and First Minute Capital
Sales / Marketing • Seed • San Francisco, CA
Odigos raises $13M led by Venture Guides
Infrastructure / Dev Tools • Series A • Tel Aviv, Israel
Datricks raises $15M led by Team8 and SAP
Risk / Security • Series A • Tel Aviv, Israel
P0 Security raises $15M led by SYN Ventures
Risk / Security • Series A • San Francisco, CA
Aifleet raises $16.6M led by Heron Rock Fund
Future of Work • Series B • Austin, TX
Connectly raises $20M led by Alibaba
Sales / Marketing • Series B • Redwood City, CA
Aembit raises $25M led by Acrew Capital
Risk / Security • Series A • Silver Springs, MD
AttoTude raises $29M led by Sutter Hill Ventures, Canaan Partners, and Wing Venture Capital
Data / AI / Machine Learning • Series A • Menlo Park, CA
Smartcat raises $43M led by Left Lane Capital
Collaboration / Productivity • Series C • Cambridge, MA
WebAI raises $43M led by Forerunner Ventures
Data / AI / Machine Learning • Series A • Austin, TX
Qualifyze raises $54M led by Insight Partners
Future of Work • Series B • Frankfurt, Germany
Form3 raises $60M led by British Patient Capital
Infrastructure / Dev Tools • Series C • London, UK
Glean raises $260M led by Altimeter and DST Global
Data / AI / Machine Learning • Series E • Palo Alto, CA
Progress Software acquires ShareFile for $875M
Collaboration / Productivity • Acquisition • Raleigh, NC
Absolute Security acquires Syxsense for an Undisclosed Amount
Risk / Security • Acquisition • Newport Beach, CA
Confluent acquires WarpStream for an Undisclosed Amount
Data / AI / Machine Learning • Acquisition • Chicago, IL