It is the last day of the Quarter. Our team pulled together a snapshot of the Quarter courtesy of Verne's Insight, The Information, Techpresso, App Economy Insights, Peter Diamandis, and Project Syndicate, The National & MIT Technology Review.
We look forward to the continued privilege to serve.
OpenAI’s ‘Agents’ Pose Risks to DoorDash, Other Consumer Apps
By Stephanie Palazzolo and Amir Efrati
Musk Merges X and xAI
By Martin Peers
We have one less company called X to worry about. Elon Musk took a break from cutting costs in the federal government to reveal late Friday that he had merged his X social media platform into his xAI startup. It was a surprising but not completely unexpected move, one that removes any impediments to the two firms sharing resources—and should reduce pressure on Musk to show a turnaround at X.
This likely wasn’t a deal that needed too much negotiation. Musk controls X and presumably xAI, although the AI startup had raised $12 billion at last count, according to PitchBook, from a wide range of investors. Some of those, such as Sequoia, Andreessen Horowitz, Saudi Arabia’s Prince Alwaleed Bin Talal and the Qatar Investment Authority, are also investors in X. Those who have stakes in both are likely unconcerned.
The investors who were only in X may be thrilled, given the business travails the company formerly known as Twitter has endured since Musk bought it. The big question is what the various investors in xAI who aren’t in X think. That’s a group that includes MGX, a sovereign wealth fund from Abu Dhabi, as well as Nvidia and AMD.
Of course, there’s already plenty of ties between the companies. XAI used data from X to train its Grok chatbot, and Musk made Grok available to X users. Musk said in his X post today, when he revealed the news, that “xAI and X’s futures are intertwined.” The merger will allow their resources—including in computing capacity and talent—to be pooled. It also likely doesn‘t hurt xAI to get an operating business, however weak, to supplement its startup operation.
The biggest question is whether the valuations inherent in the merger make sense. XAI is valued at $80 billion, Musk said. The last time xAI raised money, a few months ago, it was thought to be valued at $45 billion. We know AI valuations are generally over the top, but Grok is operating in a crowded market: What’s its revenue potential? Then there’s X, valued at $33 billion in the deal, not including the company’s $12 billion in debt. That’s about the same level at which the company reportedly raised money recently, which was way too high. Musk’s backers probably don’t care right now. But he may have a tough time justifying the combined valuation over time.
The Good, the Bad, and the Uncertainty of the Trump Economy
The Big Story
Circling the world
In brief | Sometimes the biggest stories aren't appreciated when they happen. That's exactly what happened with the satellite news beat in recent days.
First, we learned about the increasing risk of satellite collisions due to climate change.
Meanwhile, thousands gathered in Washington for one of the world's largest meetings of satellite technology companies, where low Earth orbit satellites were on the minds of almost everyone in attendance.
At a consumer level, Abu Dhabi-based company Space42 introduced its Thuraya One smartphone, which it says blends cellular and satellite connectivity into one device, an industry first.
Why it matters | Often it's the things we can't see that have the biggest impact on our lives.
If, for some reason, satellites suddenly stopped working, most of us would be immediately impacted in one way or another.
With the increasing prevalence of low Earth orbit satellites and the ability to access them, we're soon going to be noticing and appreciating satellites on a whole new level.
With that, however, comes certain risks, but the benefits will far outweigh those.
Quoted | “Satellites have become embedded in people's day-to-day lives, but it's mostly invisible to them, which drives us a little bit crazy because I think the policy makers, regulators and the general public don't always sufficiently understand just how vital and mission critical the services are that we provide. But that's changing”
– Daniel Goldberg, Telesat chief executive
Future in focus
Digital detox | Abu Dhabi opens first clinic to tackle child screen addiction
Due process | Could the US State Department use AI to revoke student visas?
Scrapped devices | Delhi's e-waste graveyard is a hazard to health and environment
Cryptocurrency summit | How the digital asset sector came of age
Predicting the future: Signal or noise?
For almost an entire day, X (formerly Twitter) suffered one of its lengthiest outages in recent memory. While there's often talk about the waning influence of X, it still has hundreds of millions of users, and those users took note of the outage. X's owner, Elon Musk, later went on TV and claimed that a cyber attack was to blame, and more specifically, he said that the company had traced IP addresses in the Ukraine area as the source of the attack.
This is noise: As of the writing of this newsletter, Mr Musk hasn't provided any proof about the source of the cyber attack being from Ukraine. That being said, even if IP addresses were tracked to Ukraine, there are bigger questions that need to be addressed. Why was X, a company that's no stranger to the need for strong cyber security, so vulnerable?
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'Anxious' AI responds well to therapy, study finds
How UAE amphibians are thriving thanks to urbanisation
Nouriel Roubini considers what the US president-elect's promised policy agenda will mean for growth and inflation.
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Facebook returns to its roots
OpenAI says ‘our GPUs are melting’ as it limits ChatGPT
Anthropic develops an ‘AI microscope’ to reveal how LLMs think
WhatsApp becomes default calling and messaging option for iPhone users
EU will go easy with Apple and Facebook
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Google: Biggest Deal Ever
Alphabet just made its biggest acquisition ever, striking a $32 billion deal to buy cloud security startup Wiz. The purchase eclipses the $12.5 billion Motorola Mobility deal and nearly equals what it spent on its top 10 acquisitions combined.
Wiz (expected in 2026): $32 billion
Motorola Mobility (2012): $12.5 billion
Mandiant (2022): $5.4 billion
Nest Labs (2014): $3.2 billion
DoubleClick (2007): $3.1 billion
Looker (2020): $2.6 billion
Fitbit (2021): $2.1 billion
YouTube (2006): $1.7 billion
Waze (2013): $1.2 billion
HTC smartphone unit (2018): $1.1 billion
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A Second Chance
Last year, Wiz rejected Alphabet’s $23 billion offer, betting it could thrive independently or go public. But the Mountain View giant stayed persistent, keeping lines open with Wiz’s leadership while competition for the company grew.
When Alphabet came back to the table, Wiz had seen its annual recurring revenue jump from $500 million to over $700 million, and the cloud security market had become even more critical. This time, the deal moved quickly—with Alphabet outbidding rival suitors and reportedly offering a $3.2 billion breakup fee Google would pay to Wiz if the deal collapses.
Why Wiz? The Cloud Security Race
Founded in 2020, Wiz skyrocketed to become a dominant cybersecurity player, with over 45% of Fortune 100 companies relying on its tools.
As businesses increasingly operate across multiple cloud platforms, security is a growing concern. Wiz specializes in cloud-native cybersecurity, allowing companies to detect and respond to threats across Google Cloud, AWS, and Microsoft Azure. By acquiring Wiz, Alphabet isn’t just enhancing its security capabilities—it’s making a play for large enterprise customers that use multiple cloud providers.
Additionally, Wiz’s expertise complements Mandiant, the cybersecurity firm bought in 2022 for $5.4 billion. Together, they bolster GCP’s position as a serious competitor to Microsoft, which dominates cloud security with $20 billion+ in annual revenue.
What’s Next?
The deal faces regulatory scrutiny, especially with Alphabet already under pressure from antitrust investigations. With a significant breakup fee, the company is confident it can clear the hurdles. If successful, this move could reshape GCP’s security offerings, boosting its position as AI-driven cloud computing takes center stage.
Accenture: AI Gains, Federal Pains
Accenture beat expectations for its Q2 FY25 (ending in February) but took a hit as investors focused on risks from US federal spending cuts. The consulting giant reported $2.82 EPS ($0.03 beat) on $16.7 billion in revenue, up 5% year-over-year.
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Generative AI Bookings: A Bright Spot
Despite a 3% dip in new bookings to $20.9 billion, Gen AI bookings hit $1.4 billion—another record. AI deals are now showing up in revenue, with $600 million in Gen AI sales this quarter.
Over the past 12 months, Accenture’s Gen AI bookings have tripled to $4.5 billion—more than OpenAI’s estimated $3.7 billion in 2024 revenue. AI’s biggest winners aren’t always the ones grabbing headlines.
Accenture has expanded its data & AI workforce to 72,000, keeping pace with its 80,000 target by FY26. Large-scale transformations remain in demand, reinforcing Accenture’s role as a key player in enterprise reinvention.
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Federal Spending Cuts Cloud the Outlook
Accenture’s federal services unit faces headwinds as the new administration’s Department of Government Efficiency (DOGE) tightens spending. With $8 billion+ in federal contracts under review, revenue growth could slow, impacting 8% of the company’s business.
What’s Next?
Accenture narrowed full-year guidance to 5%-7% revenue growth, reflecting both AI-driven momentum and federal uncertainty. With a $3 billion acquisition budget, Accenture is betting big on expansion—but will it be enough to offset federal headwinds?
Food is the next internet. Kimbal Musk Craig Newmark, Craig’s List Founder Like a shark has to keep swimming, Marc has to keep building. Doug McMillon, CEO Walmart |
Domino’s Stock Outperforms Amazon, Apple, Alphabet |
2010 – 2023, Domino’s stock outperformed the three A’s – and has thrived among competitors like Uber Eats, etc. as detailed in the book Smart Rivals (more on this book next week). There are no bad industries – just bad strategy. |
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And as Kimbal Musk declared a decade ago when EO hosted him for a regional event “food is the next internet” ripe for innovation. What follows are a couple entrepreneurs who are making it big in food. How might you reinvent your industry? |
Todd Graves $10 Billion Chicken Finger Empire – Podcast |
With no outside capital, Todd Graves founded privately held Raising Cane’s chicken finger drive thru empire. With no intention of selling or retiring, he quotes Craig Newhouse “death is my exit strategy” and at minute 29 in this podcast summary he pleads for more founder-led businesses. |
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And at minute 42 he describes the point I’ve been making about “the soul” of the business being something you can’t delegate – that founders need to micromanage the soul of the business as he describes how Steve Jobs discussed every word in an Apple ad.
If you listen to one podcast this weekend, choose this one. Thx to coach Will Hall for pointing me to this insightful listen.
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Making predictions is tough, but let’s give it a try. This is what I expect we will see in 2025… |
#1. Grok 3.0 Reaches IQ of 140+
xAI was founded in 2024, rapidly raising a $6 billion seed round. Then it built the Colossus cluster – the world's most powerful AI training system with 100,000 liquid-cooled Nvidia H100 GPUs. Then the company raised a follow-on $5 billion round and announced plans to double again (150,000 H100 + 50,000 H200 GPUs).
Grok 3.0 is poised to redefine the AI landscape in 2025. While OpenAI's breakthrough o1 model recently achieved a remarkable 120 IQ on the Norway Mensa test, I’m predicting we’ll see Grok 3.0 smash this with an IQ exceeding 140.
As Elon boldly declared, "Grok 3.0 will be the most powerful A.I. in the world," and given his track record of disrupting industries from rockets to electric vehicles, as I’ve said before, I would never bet against him.
#2. Starship Demonstrates Full Reusability
2025 is set to witness the first-ever capture of both the Super Heavy Booster and Starship, marking the dawn of the first fully reusable orbital spaceship.
SpaceX will be launching more than 150 Falcon 9 vehicles in 2025 and is planning an ambitious 24 Starship test flights in 2025. Starship delivers 250% the thrust of Saturn V that took us to the Moon.
By way of comparison, the Saturn V would cost ~$1.4 billion in 2022 dollars per launch, while the Space Shuttle would cost ~$1.5 billion in 2022 dollars. Incredibly, once Starship is fully reusable, it’s expected to cost just $2 million per launch – 1,000x cheaper!
#3. Trump Announces “Boots on Mars by 2030”
In a dramatic acceleration of NASA's 2040 timeline, I believe the Trump White House will issue an audacious challenge in 2025: putting boots on Mars before the end of the year 2030. The announcement will echo the 1961 proclamation of President John F. Kennedy challenging America to land humans on the Moon by 1969.
But here's the twist – those first boots on Mars won't be human, they'll likely be robotic, specifically a few Optimus humanoid robots.
Towards this end, on September 7, 2024, SpaceX announced that it would launch the first uncrewed Starship missions to Mars in two years, aligning with the next Earth-Mars transfer window.
#4. Scientists “Upload” 1 Million Neurons of a Honey Bee
Earlier this year, researchers at Howard Hughes Medical Institute used AI to accurately map all 140,000 neurons and 54.5 million synapses in a fruit fly's brain creating an accurate computer “upload” of that organism.
In 2025, the world will witness another neural cartography breakthrough as this technology is used to 10x brain mapping, uploading the brain of a honey bee (960,000 neurons).
In parallel, researchers like Dr. Hongkui Zeng at the Allen Institute are already setting their sights on a mouse brain (with 1,000 times more neurons than a fruit fly). As Dr. Zeng emphasized, "We can't wait 10,000 years" – and with the convergence of AI precision we won't have to.
#5. Humanoid Robot Population Hits 1,000
The global humanoid robot population will surpass 1,000 units next year, marking the beginning of an exponential growth curve that will take us to 10 billion robots by 2040.
With both Optimus (Tesla) and Figure (Figure AI) targeting a $30,000 price point for each robot, this translates to a monthly lease price of $300 or $10 per day or $0.40 per hour. And with such technology in place, we are seeing the beginning of what Elon calls "a future of abundance."
The timing couldn't be more critical – with nearly 8 million U.S. job openings in Q3 2024 and a projected 25% "dependency ratio" of people over 70 by 2030, humanoid robots are emerging as a crucial solution to global labor shortages. |
#6. Epigenetic Reprogramming Reaches Human Trials
Next year, we'll reach a historic milestone in longevity science as Life Biosciences launches the first human clinical trials of cellular rejuvenation through partial epigenetic reprogramming.
The company’s groundbreaking gene therapy, ER-100, represents the convergence of three revolutionary Yamanaka factors that effectively "reset" cellular age.
While Life Biosceinces targets optic neuropathies, this is just the beginning…
With NewLimit's innovative T-cell restoration approach backed by Coinbase's Brian Armstrong, and Retro Bio's ambitious goal to add 10 years to human lifespan, we're entering an era where aging becomes programmable.
By manipulating the epigenome—the "software" controlling our genetic hardware—we're unlocking the potential to reverse not just disease, but aging itself.
#7. Bitcoin Surges to $250,000 per Coin
Bitcoin will shatter records, surging to the $250,000 barrier, as hundreds of companies adopt what we might call "The Saylor Strategy" or “the Bitcoin Standard” – converting their balance sheets to Bitcoin.
The catalysts are perfectly aligned: the 2024 Bitcoin halving reducing supply, record-breaking ETF inflows creating unprecedented demand, and President-elect Trump's proposed 1-million-Bitcoin strategic reserve potentially transforming U.S. monetary policy.
As Saylor has pointed out, Bitcoin's surge past $100,000 emphatically confirms its status as an institutional-grade asset embraced by the world's wealth and power.
#8. The Year that Gen-IV Nuclear Power Takes Off
In 2025, we'll see an unprecedented wave of Gen-IV nuclear power plant announcements worldwide as governments and tech giants race to meet AI's staggering energy demands.
Goldman Sachs projects a 160% surge in data center electricity consumption by 2030, and Big Tech is responding dramatically.
Following Google's groundbreaking deal with Kairos Power for small module reactors (SMRs), Amazon's investment in four nuclear reactors, and Meta's bold plan for 4GW of nuclear capacity, hundreds of next-generation plants will be announced globally.
#9. Lightweight AR Glasses Become Reality
We’ll experience the arrival of the first consumer-ready lightweight AR glasses weighing less than 50 grams – signaling the emergence of truly wearable computing.
Meta's Orion glasses are leading the charge with their groundbreaking 70-degree field of view and neural wristband control system, while Apple's long-rumored glasses, building on Vision Pro's technology, are poised to leverage their advanced metalens production and eye-tracking capabilities.
Both promise to seamlessly overlay digital information onto our physical world, from real-time navigation to instant message displays.
#10. AI Assistants (Siri & Alexa) Stop Sucking!
Siri and Alexa will finally stop sucking, transforming from frustrating digital butlers into genuinely intelligent assistants. Amazon's next-gen Alexa, powered by Anthropic, will be deployed across half a billion devices which will stop delivering the same old “jokes” and “fun facts” and branch out.
Meanwhile, Apple's "Siri 2.0," powered by Apple Intelligence, will revolutionize how we interact with our devices, offering seamless cross-app functionality and truly conversational interactions.
In this 2025 future, Siri will stop spelling my name “Pieter,” and will take the time to check who I’m actually texting when spelling their name... So, when I’m texting my friend “Marc” it will stop spelling his name “Mark.” (One can only hope!) |
