😵 Intel’s $13 billion dollar miss

Today’s market performance 🏆️

S&P 500: +0.47% 📈
Nasdaq 100: +0.54% 📈
Dow 30: +0.13% 📈
Russell 2000: -0.17% 📉

In partnership with

FROM OUR FRIENDS @ BILL.COM

Take a demo, get a Blackstone Griddle

Financial operations heating up? BILL Spend & Expense can help you take control. Automate expense reports, set budgets across teams, and get real-time insights into company spend. Take a demo to learn how and we'll give you a 28" Blackstone Omnivore Griddle—so you can take control of your next barbecue, too.

Request a demo

TOP STORY
😵 Intel’s $13 billion dollar miss

If you’ve ever regretted picking the wrong thing on the menu or not buying Apple stock when you were still in the womb, here’s something to cheer you up:

Intel passed on investing in OpenAI in 2017 because they didn’t believe AI would take off.

No, really, I’m serious. From 2017 to 2018, execs at the two companies discussed various partnerships, including Intel buying a 15% stake in OpenAI for $1 billion.

OpenAI wanted Intel as an investor because it would have minimized its reliance on Nvidia, which supplies OpenAI with its coveted GPU computer chips.

How so? If OpenAI had partnered with Intel, it could have built its infrastructure using Intel’s technology, which would have given OpenAI more control over its hardware, helping to reduce costs.

That sounds like it could’ve been a bargain for Intel and super helpful for OpenAI, so why didn’t it go through?

First, Intel's then-CEO, Bob Swan, doubted the near-term market potential for generative AI models.

It's not the best take now that everyone seems to be making their own.

• In addition to their CEO not believing in AI, Intel's data center didn’t want to make products at cost, meaning that Intel did not want to manufacture and sell products to OpenAI without making a profit.

• This was a key point because OpenAI likely wanted the products at a lower price to reduce its expenses, but Intel wasn’t having it.

• Now, with OpenAI worth approximately $86 billion, it’s clear that the Intel deal wasn’t necessary for their success.

On the other hand, Intel could have used the home run investment.

ARTIFICIAL INTELLIGENCE
🪖 The future of defense just got $1.5B

This might be the coolest venture capital raise of 2024.

Earlier this week, defense startup Anduril Industries announced it had raised $1.5 billion in funding for its Series F round, valuing the company at $14 billion.

Oh, mama, that’s an expensive startup.

What is Anduril, though, and why should I know about ‘em?

• Anduril, founded by Palmer Luckey, the guy behind Oculus VR, develops cutting-edge military technologies, including autonomous systems, AI-powered surveillance, and drone technology.

• Palmer is considered the real-life Tony Stark right now (by me) and deservedly so.

Anduril’s work with autonomous systems and AI in defense is shaping the future of warfare, leading investors to believe the company has mastered securing government contracts.

What’s their secret?

• Anduril differs from traditional defense companies because they quickly build advanced tech, like autonomous drones and AI systems, without waiting for the military to ask. 

• They make these ready-to-use products and then offer them to the military, which obviously speeds up the process.

'Cause what military doesn’t want killer drones, am I right?

What’s the new money for, though? Anduril will use some of the funds for boring things like hiring more people and bolstering its supply chain.

But the part you’ll find interesting is that the rest will be spent building autonomous weapon manufacturing facilities.

Now you’re talking, tell me more.

Anduril will use the money to invest in Arsenal-1, which will hopefully produce tens of thousands of autonomous military systems annually.

Damn, they’re really about to be manufacturing thousands of Terminators like they’re toasters on a production line.

Yes, they are, but to do that, they need Arsenal-1 to cover at least 5 million square feet and employ thousands of people.

Look at that—Anduril can save the world in the most badass way possible, with killer robots, AND employ thousands of people. 

They really can do it all!

RETAIL
Prime sued again and again

Logan Paul’s Prime is having a crappy month. Oh god, they got sued again, didn’t they?

• It started a few weeks ago when the US Olympic Committee sued the polarizing sports drink for including verbiage like “Olympic” and “Team USA” on its packaging. 

• During a recent promotion with NBA star Kevin Durant, who is also on Team USA's basketball team, Prime included phrases like “Kevin Durant Olympic Prime Drink” and “Celebrate Greatness with the Kevin Durant Olympic Prime Drink!” on its drinks.

You’d think the marketing team at Prime would’ve realized that the Olympic Committee doesn’t play around, especially when the phrases aren’t even trying to be subtle.

And because Prime hasn’t had enough drama to deal with, earlier this week, its own supplier, Refresco, sued Prime for $67.7 million.

• Refresco alleges that Prime breached an existing contract that required the company to order at least 18.5 million cases of the drink each year for three years, totaling 55.5 million cases.

• But, as you can guess, Prime didn't meet its first-year order requirement, which was costly for Refresco, as they had set up a special production line specifically for it.

But if Prime still obviously needs a supplier to make its drinks, why is it ordering less?

• The unfortunate consensus is that Prime just isn’t selling enough bottles right now. 

• Last year, the company was on track to bring in $1.2 billion in revenue, but according to Refresco lawyers, “sales of Prime beverages were falling well below Defendants’ expectations” since the start of this year.

Dwindling social media hype for Prime may be the culprit, as Prime may be losing its pull among the youngsters, its most valuable customers.

But my guess is that it’s hard to keep a company afloat when you’re getting sued out of the wazoo every other month.