Tech Brew Ride Home - Tue. 05/27 – The “Holy Grail” Of AI Models

Episode Date: May 27, 2025

Salesforce is back in the acquisition swing. Circle is going for an IPO. Is Netflix about to lose the streaming service crown? The Holy Grail of AI Models. And is your boss more demanding of your output now that you use AI? Links: Salesforce Agrees to Buy Informatica in Deal Worth $8 Billion (Bloomberg) Stablecoin Giant Circle File for IPO on NYSE (CoinDesk) The Browser Company mulls selling or open-sourcing Arc Browser amid AI-focused pivot (TechCrunch) Cricket gives Disney-Ambani unit in India almost as many users as Netflix (Financial Times) One of Europe’s top AI researchers raised a $13M seed to crack the ‘holy grail’ of models (TechCrunch) At Amazon, Some Coders Say Their Jobs Have Begun to Resemble Warehouse Work (NYTimes) Khosla Ventures among VCs experimenting with AI-infused roll-ups of mature companies (TechCrunch) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Tuesday, May 27th, 2025. I'm Brian McCullough today. Salesforce is back in the acquisition swing. Circle is going for an IPO.

Is Netflix about to lose the streaming service crown? The holy grail of AI models? And is your boss more demanding of your output now that you use AI? Here's what you miss today in the world of tech. Salesforce is acquiring cloud data management company Informatica for around $8 billion. This comes one year after an earlier deal. fell through, quoting Bloomberg. Informatica, which helps customers manage their data in the cloud, has long been a potential

takeover target. San Francisco-based Salesforce held talks to buy the company just over a year ago. Bloomberg news reported at the time. The talks cooled with the parties struggling to agree to terms. Bloomberg was first to report on Friday that Salesforce and Informatica were back in advanced talks. Informatica competes against Salesforce's MuleSoft. Its takeover is set to drive further consolidation in the software-as-a-service industry and may

attract regulatory scrutiny, end quote. And quoting the journal. Informatica was taken private in 2015 by private equity firm Permira and the Canadian Pension Plan Investment Board in a $5.3 billion deal. The business went public again in 2021. Permira remains the company's biggest shareholder today, holding almost one-third of shares. CPPIB owns 25% of Informatica shares as well. A deal for Informatica would rank among Salesforce's largest and be its biggest since it closed the roughly $28 billion acquisition of Workplace Collaboration Company Slack Technologies in 2021. A few years before the Slack transaction, Salesforce agreed to buy Data Analytics Platform Tableau software for more than $15 billion and MuleSoft for around $6.5 billion. Salesforce's big appetite for dealmaking cooled somewhat

after the company in 2023 drew a swarm of activist investors, including Elliott Investment Management, Starboard Value and Value Act Capital. Value Act Chief Executive Officer Mason Morfit was named to the company's board as part of a refresh at the time, and he chairs a committee focused on mergers and acquisitions. Salesforce's latest deal for Informatica shows the company shifting to being more disciplined when it comes to price and other deal terms. Salesforce says it plans to fund the transaction through a combination of cash and new debt, end quote. We've got another IPO, stable coin operator circle, has filed for an IPO on the New York Stock Exchange, quoting Coin Telegraph. Circle, the issuer of USDC, the second largest stable coin

by market capitalization, has launched an initial public offering of 24 million shares of its Class A common stock, the company said on May 27th. The firm has applied to list its Class A common stock on the New York Stock Exchange under the ticker symbol CRCL. As part of the offering, Circle is issuing 9.6 million shares of Class A common stock, the company said in a news release, according to a report by Reuters, Circle targeted evaluation of up to $6.71 billion on a fully. diluted basis in its IPO offering. The firm previously attempted to go public through a blank check deal with the special purpose acquisition company Concord in 2021, initially targeting a preliminary valuation of $4.5 billion. The deal was amended to place Circle at a $9 billion

valuation with the firm eventually terminating the deal by late 2022. Founded in 2013, Circle is a major company in the crypto industry known as the issuer of USDC, the second largest stable coin by market capitalization after Tethers, USDT. At the time of writing, USDC has a market cap of $61.5 billion, while its main competitor, USDT, has a $152.7 billion market cap, according to Coin Gecko. Though a significantly bigger player than Circle, El Salvador-based Tether is apparently not looking to launch an IPO. Tether doesn't need to go public, Tether CEO Paolo Ardoino said in an ex post in April, end quote. The browser company says it is pivoting away from its arc web browser to focus instead on building an

AI-native browser called Dia. The company says it is considering selling the ARC browser to some other entity, quoting TechCrunch. When the company announced Dia in December 2024, it admitted that ARC was a complex browser for a lot of users and it wanted to build a product that appealed to the masses. Since then, the browser company has been issuing bug fixes and security updates to ARC but has stopped developing the app and adding features to it. In a new blog post, the company's CEO, Josh Miller, said ARC browser ran into a novelty tax problem. most people, Arc was simply too different with too many new things to learn for too little reward. On top of that, Arc lacked cohesion in both its core features and core values.

It was experimental. That was part of the charm, but also its complexity, Miller wrote. The browser company doesn't plan to shut down ARC completely, but it said it has considered selling it or open sourcing it. However, Miller said the challenge in open sourcing the browser is that it is built on top of the ARC development kit, an internal SDK, which is also the core component of the new browser, Dia, and it wouldn't want to give away that IP. While we'd love to open source ARC someday, we can't do that meaningfully without also open sourcing ADK, and ADK is still core to our company's value. That doesn't mean it'll never happen, Miller said. Notably, many ARC browser users have been asking the company to turn it into an open source project.

The browser company's Dia browser is still an alpha testing. The company hasn't given a date for a wider release, but it said that it will make the browser available for testing to ARC members, end quote. Is Netflix about to lose the streaming service crown? GeoHotstar has grown its subscriber base from 50 million in March to now over 280 million in May, driven largely by cricket streams, quoting the FT. India's largest streaming platform, GeoHotstar, has amassed more than 280 million subscribers in recent months, driven by the popularity of the world's richest cricket League, according to the company, almost as many as the world's largest streamer. Netflix has globally. Geostar, the six-month-old product of a merger of a unit from Mukesh Ambani's Reliance Media Empire

with Disney in India is also backed by James Murdoch, who now owns the digital and television rights for the tournament previously split between the two rivals. Fans used to be able to watch matches on Reliance's geo for free, but since the merger, cricket fans have had to subscribe to Geostar's service. subscriptions to GeoHotstar, the streaming platform, have jumped from 50 million in March to 280 million this month, just shy of the 300 million claimed by Netflix globally. It has been the biggest season of IPL till now, both in terms of viewership as well as monetization. Sanjong Gupta, Geostar's chief executive for sports told the financial times. Since the tournament began on March 22nd, some 450 million people have watched cricket on TV and the same number again on digital platforms, Gupta said,

although there has been some overlap. Viewer data is not public in India. The IPL had pretty much delivered on all four vectors of growth for Geostar, he said, referring to subscription and advertising on digital and TV. The network hopes that these viewers will stick around after the cricket ends on June 3rd and watch Hollywood movies and shows from Paramount to Pixar and HBO to which it has exclusive rights, end quote. Interesting raise time. Using AI to create pictures and videos is sort of becoming a commodity play, right?

What's the next big thing? Well, what about text to virtual reality? Quoting TechCrunch. From OpenAIs 4-0 to stable diffusion, AI foundation models that create realistic images from a text prompt are now plentiful. In contrast, foundation models capable of generating full, coherent 3D online environments from a text prompt are only just emerging. Still, it's only a question of when, not if, these models will become readily available. Now, one of Europe's most prominent AI 3D model researchers, Matthias Nisiezerger. Neesner has taken an entrepreneurial leave of absence from his visual computing and AI lab at the Technical University of Munich to found a startup working in the area called Spatial, with the AI capitalized in the middle of that. Formerly a co-founder at Synthesia, the realistic AI avatar startup valued at $2.1 billion. Neesner has raised an unusually large seed round for a European startup of $13 million. The round was led by Early Bird Venture Capital, a prominent European early stage investor, backers of UiPath,

games, for instance, with participation from Speed Invest and several high-profile angels. That round size is even more impressive when taking into account that Spatial doesn't have much to show the world yet other than a recently released teaser video showing how a text prompt could generate a 3D room. But then there's the technical team that Nisner assembled, Ricardo Martin Bruyala, who previously worked on Google's 3D teleconferencing platform, now called Beam, and David Novotny, who spent six years at Meadow where he led the company's text to 3D asset generation project. Their collective expertise will give them a fighting chance in a space that already includes some competitors with a similar focus on photorealism.

There's Odyssey, which raised $27 million and is going after entertainment use cases, but there's also World Labs, the startup founded by AI Pioneer Fifi Lee, and already valued at over $1 billion. Neesner thinks this is still little competition compared to what exists for other types of foundation models, but also in regard to the bigger vision he and others are pursuing. I don't just want to have a 3D world. I also want this world to behave like the real world. I want it to be interactable and let you do stuff in it, and nobody has really cracked that yet, he said. Nisner and his co-founders are working on generating larger and more interactive 3D spaces where, for example, a glass can shatter realistically. This would unlock what Nistner refers to as the

holy grail that a 10-year-old could type in some text and make their own video game in 10 minutes. In his view, this ambitious goal is actually more achievable than what might seem like the low-hanging fruit, letting users create 3D objects, since most gaming platforms still tightly control what third parties can add. That is, of course, unless they decide to build it themselves as Roblox might. But by then, Spatial might be busy replacing CAD instead. The next chapter in 3D generation is only beginning, end quote. Some Amazon engineers say managers there have increasingly pushed them to use AI over the past year, raising output goals and becoming less forgiving about deadlines. Are you seeing something somewhat similar? The rush to AI making your buses demand more

output? Quoting the times. Since at least the Industrial Revolution workers have worried about machines replacing them. But when technology transformed automaking, meatpacking, and even secretarial work, the response typically wasn't to slash jobs and reduce the number of workers. It was to degrade the jobs, breaking them into simpler tasks to be performed over and over at a rapid clip. Small shops of skilled mechanics gave way to hundreds of workers spread across an assembly line. The personal secretary gave way to pools of typists and data-entry clerks. The workers, quote, complained of speed-up, work intensification and work degradation, as the labor historian Jason Resindicoff described it.

Something similar appears to be happening with artificial intelligence in one of the fields where it has been most widely adopted, coding. As AI spreads through the labor force, many white-collar workers have expressed concern that it would lead to mass unemployment. But while joblessness has ticked up in widespread layoffs might eventually come, the more immediate downside for software engineers appears to be a change in the quality of their work. Some say it is becoming more routine, less thoughtful, and crucially much faster-paced. Companies seem to be persuaded that, like assembly lines of old, AI can increase productivity.

A recent paper by researchers at Microsoft and three universities found that programmers' use of an AI coding assistant called co-pilot, which proposes snippets of code that they can accept or reject, increased a key measure of output by more than 25%. At Amazon, which is making big investments in generative AI, the culture of coding is changing rapidly. In his recent letter to shareholders, Andy Jassie, the chief executive, wrote that generative AI was yielding big returns for companies that use it for productivity and cost avoidance. He said, working faster was essential because competitors would gain ground if Amazon doesn't give customers what they want as quickly as possible, and cited coding as an activity where AI would change the norms. Those changing norms have not always been eagerly embraced. Three Amazon engineers said that managers had increasingly pushed them to use AI in their work over the past year. The engineers said that the company had raised output goals and had become less forgiving about deadlines.

It has even encouraged coders to gin up new AI productivity tools at an upcoming hackathon and internal coding competition. One Amazon engineer said his team was roughly half the size it had been last year, but it was expected to produce roughly the same amount of code by using AI. Amazon said it conducts regular reviews to make sure teams are adequately staffed and may, increase their size if necessary. We'll continue to adapt how we incorporate Gen AI into our processes. Brad Glasser and Amazon spokesman said, other tech companies are moving in the same direction. And a memo to employees in April, the chief executive of Shopify, a company that helps entrepreneurs build and manage e-commerce websites, announced that AI usage is now a baseline expectation and that the company would add AI usage questions to performance reviews. Google recently told employees

it would soon hold a company-wide hackathon, in which one category would be creating AI tools that could enhance their overall daily productivity, according to an internal announcement, winning teams will receive $10,000. A Google spokesman noted that more than 30% of the company's code is now suggested by AI and accepted by developers. The shift has not been all negative for workers at Amazon and other companies. Managers argue that AI can relieve employees of tedious tasks and enable them to perform more interesting work.

Mr. Jassy wrote last year that the company had saved the equivalent of 4,500 developer years by using AI to do the thankless work of upgrading old software. Eliminating such tedious work may benefit a subset of accomplished programmers, said Lawrence Katz, a labor economist at Harvard University who has tracked research on the subject closely. But for inexperienced programmers, the result of introducing AI can resemble the shift from artisanal work to factory work in the 19th and 20th centuries. Things look like a speed-up for knowledge workers, Dr. Katz said, describing preliminary evidence from ongoing research.

There is a sense that the employer can pile on more stuff, end quote. And finally today is AI changing the VC game in an interesting way, changing what venture capitalists want to invest in? According to TechCrunch, quote, some VCs are starting to flip the script on their investing styles. Rather than funding startups, they are acquiring mature businesses such as call centers, accounting firms, and other professional service firms, and optimizing them with artificial intelligence to serve more customers through automation. This strategy often likened to private equity roll-ups is being employed by firms such as General Catalyst, Thrive Capital, and also VC Elad Gill. General Catalyst touting this as a new asset class has already backed seven such

companies, including Long Lake, a startup that scoops up homeowners associations in an effort to make the management of communities more streamlined. Since its founding less than two years ago, Long Lake has secured $670 million in funding according to Pitchbook data. While the strategy is still new, a few other venture outfits have also told TechCrunch that they are considering trying out the investment model. Among them is Kostla Ventures, a firm known for me. making early bets on risky, unproven technologies with long development timelines. I think we'll look at a few of these types of opportunities, Samir Kowel, General Partner at Kosla Ventures, told TechCrunch, interestingly, this PE-flavored approach could be a surprising

benefit to the multitudes of AI startups VCs are backing. If a VC marries old businesses with new technology, AI startups wanting to serve those industries would essentially gain instant access to large established clients, end quote. I have a movie recommendation for you today. Black Bag. Watched it with my wife this weekend. It's the most fun movie I've seen in several years. It's just smart, sexy, like the best sort of spy novel. It's great.

Black Bag, cannot recommend it enough. Talk to you tomorrow.