Tesla’s $24T Robotaxi Revenue Unlock

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Apple AI - Apple plans to update its Mac line with AI-focused M4 chips from late this year. Also, a code leak for a "Safari browsing assistant" in iOS 18 suggests it will include Safari AI task integration.

AI Transparency - U.S. Rep Adam Schiff (D-Calif.) introduced a bill requiring AI companies to disclose all copyrighted material used to train their models.

Microsoft Military - Microsoft has been promoting OpenAI's DALL-E and ChatGPT to the DoD to simulate battlefield scenarios and for enhanced visual recognition, and target identification.

More AI Chips - Google unveiled its’ Arm-based Axion data center chip. Intel’s "Gaudi 3" AI Chip exceeds Nvidia’s H100 at training & deploying LLMs. Meta’s new in-house AI chip has 3x the speed and 2x the compute of v1.

Robo-workers - Amazon has replaced 100k+ workers with 250k robots since 2022, bringing its total robot workforce to over 750k.

The Hottest Thing in Tech this Week

Tesla’s $24T Robotaxi Revenue Unlock

Tesla just announced its Fully Self-Driving (FSD) Robotaxis will be available from 8 August. Cathie Wood of Ark invest has described the robotaxis as part of a $24T revenue opportunity for Tesla which informs the firm’s $2k+ TSLA share projection within 5 years. That’s a long way from the current $174.60 price, so why is the robotaxi reveal so exciting and is this prediction realistic? TLDR: It comes down to a win/win Tesla/owner revenue-sharing model.

Rapid AI Advances

Tesla released its FSD v12 update last year, and the advances in AI situational awareness are huge as it fast becomes more humanlike, and according to stats, safer than human drivers. Elon Musk also recently said Tesla is “no longer AI training compute-restrained” as chip supply shortages ease. This means FSD updates “over the air” will now be more frequent (fortnightly vs monthly) as real Tesla drivers continue to inform the model. This all means the robotaxis could be completely unmanned in the near future depending on local laws.

Robotaxi Revenue Revolution

Unmanned cars unlock the main reason Cathie Wood and other Tesla Bulls think this is huge for ongoing profitability for Tesla - the owners’ ability to put their vehicle to work as a taxi whenever they are not using it and earn the equivalent of a full-time taxi/Uber driver salary passively. Tesla will get a commission on this revenue creating a massive incentive by helping owners pay off the upfront cost of vehicles within a year, potentially driving massive sales revenue.

Tesla’s Robotics Transition

Tesla is on the verge of transitioning from a car seller to an AI software company. From Robotaxis to humanoid robotics, Ark Invest projects software subscriptions, revenue share, and other consumer add-ons will make up 2/3 of all Tesla’s enterprise value. Wall Street is not yet baking this into TSLA pricing.

Wood believes Autonomous driving + humanoid robots is a $24T+ global revenue opportunity - and if Tesla gets just 10% that's $2.4T + the revenue commission of the robotaxis. That would be 6x Apple’s current revenue or 4x Amazon’s. There will no doubt be room for smaller players to claim a share of this lucrative market. Wamyo has launched its paid robotaxi in LA this week.

However, Ark sees Tesla’s lead in AI tech as almost unassailable. GM’s Cruise is now forced to have human drivers in its robotaxis in Phoenix due to safety issues. Also, there are clear synergies with xAI which is raising $3B and investing heavily in AI compute and models. $2K TSLA may sound unrealistic now, but there is a strong case for TSLA being underpriced if this transition is successful.

Deals We’re Watching

Founders to Watch and Opportunities to Catch

Open Deals:

Looking to invest? Let us know if you want a warm intro —> [email protected]

1. Nanocomposite materials for Robotics - Alb., NM - Creating resilient nanocomposite materials for extreme environments using precision machining and robotics. Raised >$12M undiluted funding via federal government innovation R&D contracts. $3M in federal contract pipeline. (Seed)

2. Investment Due Diligence AI - Irvine, CA - AI model trained for upfront DD on PE and VC dealflow upending the institutional back office and unlocking the investor referral network. Led by former IBM, current PE and VC execs. (Seed)

3. Employee Recruitment App - San Francisco - AI platform enhancing enterprise HR functions including recruitment and retention through automated person matching. Founder closed 8 figure exit from last startup. (Pre-Seed)

Raising for your startup? Send us your Open Round —> [email protected]

Closed Deals:

AI Data Security - New York startup Cyera raised a $300M Series C at a $1.4B PMV (up 3x in <1yr) to help companies track data movements in their networks. Backers included Spark Capital, Accel, Sequoia & client AT&T. 

Next Solana? - New York startup Monad Labs raised a $225M Series A led by Paradigm to develop a blockchain to compete with Solana and Sui.

Fleet Management - San Diego startup Platform Science raised $125M for its platform streamlining efficient trucking fleet management.

CoBots - Ca. startup Collaborative Robotics closed a $100M Series B at $500M+ PMV backed by Sequoia, Khosla, & Mayo Clinic.

Next-Gen Workforce Learning - We shared Florida AI EdTech startup PETE in our open deals, they just closed a $2M Seed Round from Cofounders Capital.

Companies to Watch:

Open: Fastest Growing SaaS Startup Ever - NY Cloud security startup Wiz reached $100M ARR in ~18 months. In March it acquired startup Gem for $350M cash. In talks to raise $800M at $10B pmv from Lightspeed & Sequoia.

Google Ventures Led - Washington/SanFran AI disinformation detection startup Alethea helps Fortune 500 companies, and nonprofits protect themselves. Fortune Business Insider named Alethea “one of the most promising cybersecurity companies” and it just raised a $20M Series B.

The Funding Buzz

Alt Capital - Jack Altman’s San Fran firm is launching an accelerator for business software startups developing AI technologies. Participants will access Microsoft’s infrastructure + advice from Sam Altman, Dylan Field & Elad Gil.

AlleyCorp - The NY firm founded by Kevin Ryan secured $250M for its first external investor fund. It has invested ~$375M in 180+ companies.

Cendana + Kline Hill - Fund of funds Cendana and its partner have secured $105M million to purchase stakes in seed VC funds from LPs looking to sell. This will enable them to invest in promising startups in Series A to B stages.

Trending Tools and Buzzy Tech

Tools

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Udio - AI music creation tool generates full tracks in under 40 secs

Humane - "Ai Pin" started shipping, receiving mixed inital reviews.

Tech

ChatGPT - GPT-4 Turbo updates offer "more direct, less verbose responses".

Nvidia/GeorgiaTech - first AI supercomputer accessible only to students.

Oracle - AI cloud service Compliance Agent helps banks mitigate AML risks.

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