Equity Monday: Another $100M for AI, why not

Here’s the rundown from this morning: Worries about the Chinese economy dragged down Asian shares this morning; the equity picture was more mixed in Europe and the United States. Meanwhile, why is crypto so slow lately? What happened to price volatility? On the earnings front, we're looking ahead to Monday.com, Getty, Cisco, Bill.com and Palo Alto Networks this week. News that Anthropic is raising another $100 million got us talking about a few other AI rounds that are in the pipeline; the gist is that there is a lot of money flowing around AI startup-land these days. Indian electronics manufacturing is making real strides, Mastercard is buying some African fintech, and the better.com SPAC is a go. It's going to be yet another busy week, so strap in and let's go! For episode transcripts and more, head to Equity’s Simplecast website. Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews founders and more! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:10Speaker 00

  Hello and welcome back to Equity, the TechCrunch podcast where we unpack the numbers and nuance behind the headlines. This is Alex. Good morning. I love getting caught up and catching you up while I do it. It is August 14th, 2023, and here is what we have on the show today. Some fascinating companies are sharing earnings data this week. AI funding is still the key venture capital story of today. Indian manufacturing of electronics is accelerating, self-driving cars, and the better dot-coms back. It is a packed show today, so sit back and let's do this.

• 0:47Speaker 00

  And let's talk about money to start. Shares are lower in Asia today with Chinese equities leading the descent. What's going on? Well, China-based real estate development company Country Garden is struggling. The company suspended trading on nearly a dozen onshore bonds this morning after it missed interest payments on some dollar-based bonds previously. All of that has pushed the value of Country Garden down 18% today to a 52-week low. Now, this is equity. We care about startups. Why are we talking about real estate in China? Well, the data from Country Garden does show us, more or less, that the economic woes in that country, far from ending, may actually be getting worse. That matters for the tech sector. Over in Europe, stocks are mixed this morning, and shares are set to rise

• 1:30Speaker 00

  in the US according to pre-market trading as of the time I hit record. Now, we are getting close to the end of earnings season, and I'm sure you are very glad to hear that. I am sorry that it takes half the quarter. I'm not in charge. Before we talk about this week, however, do keep in mind that we missed Bird's earnings last week. Five demerits to me. I will take a look at those numbers, and if there's anything interesting in them, I will bring it to you later this week. Now, today, we're going to hear from Rumble, online video, Getty, which does images, so I presume AI will be a large component of that particular report. And then Monday.com dropped numbers this morning. Its shares are up, but I had yet to actually dig into the numbers. More on that soon. Then Tuesday, we'll hear from C Limited. Wednesday is Cisco.

• 2:15Speaker 00

  On Thursday, Bill.com, an American fintech company, and Billy Billy, a Chinese online video firm. And then Friday, finally, to close out the week, Palo Alto Networks, a cybersecurity company, and Xpeng, which makes EVs. Still some meat on that bone. We'll talk about it. What about crypto? Well, there has been, once again, no material movement in crypto prices that we care about since last week. At the same time, NFT volume does appear rather weak as before. And so I'm tempted, given the lack of data, to yank this section from the show. There just isn't as much news that seems to matter to bring to you to have it have its own section. Though I'm sure that the day we did that, crypto would do something huge, busy, and newsy. The weird thing that I've learned

• 2:59Speaker 00

  after covering crypto for around a decade is that the moment you look away, things happen. So perhaps I'm crying wolf, but at least this Monday, not that much news from Crypto Land.

• 3:12Speaker 00

  Next up, big news that matters, and that means we must talk about AI. Now, the jump in perceived venture capital activity in the AI space is still afoot. Last week, for example, The Information reported that Modular is in talks with General Catalyst to raise a Series A at a $600 million valuation. Now, Modular is very interesting because its tech sits between hardware and AI frameworks. So if the company can actually unlock a lot more hardware that can power AI work than just Nvidia chips, it could become extremely valuable because, as we all know, Nvidia chips are in very, very short supply. And before that, last week as well, we also heard that tome.ai may raise $60 million more at a $600 million valuation.

• 3:57Speaker 00

  The company most recently raised 43 out of 300 with very minimal revenue, perhaps a couple million. So with that context from just the last couple of days, it's not really a shock that this morning we got even more AI fundraising news. TechCrunch wrote this morning that Anthropic, an artificial intelligence startup co-founded by former OpenAI leaders, will receive $100 million Dollars in funding from one of the biggest mobile carriers in South Korea, SK Telecom. Now, this funding news comes three months after Anthropic raised 450 million in its Series C funding round that was led by Spark Capital this May. The telco says Anthropic and SKT plan to co-develop a multilingual large language model customized for global telco firms.

• 4:43Speaker 00

  And that LLM, which SKT and Anthropic will build together, is going to allow the four global telco AI alliance members, that's Deutsche Telekom, Eand, Singtel, and SKT, of course, to offer AI developments customized to their users in each market. That means the LLM is going to support, and I love this, English, Korean, German, Japanese, Arabic, and Spanish. So a wealth of languages for folks all around the world. Okay, turn back the time here a little bit. What is notable is that the two rounds that are supposed to be coming together are not actually unicorn rounds. I bet that in 2021, they would have been, and that makes them feel excessive, perhaps, in revenue terms, but not that insane despite Twitter snark in certain cases.

• 5:26Speaker 00

  And when it comes to Anthropic, well, it's worth more than 4 billion, so certainly it is a multiple unicorn, if you will. The rule seems to be that if you're building AI models, there's an ocean of capital that wants a chunk of your business. But if you're not, you're doing something else in the AI space that is, say, related. Well, valuations are not quite at the unicorn level for the early stage, which does imply some sanity, even given all the AI hype.

• 5:51Speaker 00

  We have talked a lot on the podcast about India's place in the global tech ecosystem and how China's losses on the manufacturing front are potentially India's gain. Well, all that talk really is predicated on progress, at least in certain areas. Now, TechCrunch reports that India's ambitious push for self-sufficiency in mobile phone assembling is yielding real results. India shipped 2 billion domestically assembled smartphones and feature phones between 2014 and 2022 as part of its "Make in India" initiative, according to new research. Now, what's really interesting is that a staggering 98% of all mobile Phone shipments within the Indian market last year were domestically produced,

• 6:34Speaker 00

  and that compares to a mere 19% back in 2014. Even more, 16% of the production was exported, according to Hong Kong-headquartered market and research firm Counterpoint. Now, today, India is assembling roughly 1.8 times more smartphones than Vietnam, and about a quarter of China's output. Given China's economic struggles of late, seeing India become an electronics-building powerhouse must be worrisome to Beijing.

• 7:02Speaker 00

  And keeping our eyes on the non-American world, Mastercard has agreed to purchase a minority stake in the fintech division of MTN Group, Africa's largest cellphone provider, which values it at $5.2 billion, according to TechCrunch. Now, this deal is going to be structured as a commercial partnership on payments and remittances, employing Mastercard's technical infra to develop throughout Africa, and it's also buying a minority stake in the smaller company. This news comes a year after MTN Group said it was searching for minority investors to invest in its African fintech subsidiary after separating it from the carrier's main telecom business to maximize development in the thriving division. For the first half of this year, for a little bit of context, transactions recorded by MTN's mobile money business

• 7:47Speaker 00

  increased by 37% to $8.3 billion. That's a lot of money. For fintech in Africa, which has had an up and down last couple of years, well, here's some good news.

• 7:59Speaker 00

  Moving on towards the close here, I have a couple of small bites before you go. First up, Cruise and Waymo got greater permissions in the last couple of days to put self-driving cars on the road in San Francisco. This is a win for autonomous vehicles, a win for autonomous driving, and something that I am incredibly excited about. Also, I'm going to San Francisco for Disrupt in a couple of weeks, and that means I'm going to hope to score a ride in one of these bad boys. Also, the Better.com SPAC deal is a go, we recently learned. The companies should merge on or around August 22. I cannot wait to see how the market responds to the company while the domestic residential real estate market remains weaker. than it was at recent and prior highs.

• 8:43Speaker 00

  And finally, in closing, it's worth looking into the Internet Archive suits that have received so much attention in the last couple of days and the weird and difficult issues with all the content going digital and the question of really, who owns the past? This is one of those big news items that should not happen in the background, but really does need to be understood by everybody who is online. So please read up on it and have an opinion.

• 9:09Speaker 00

  And that is our show for this fine Monday morning. If you need even more equity in the interim, we are EquityPod on Twitter and Threads, and we are Equity over on Blue Sky. My name is Alex and of course, I am Alex over on Twitter. If you need more podcasts from TechCrunch, well, we also have Chain Reaction and Found, our two sister shows that are just fantastic. We'll talk to you soon and we'll see a bunch of you in San Francisco for Disrupt in mid-September. Equity is once again starting the show, so if you want to see us live, well, we'll be there, we'll be square, and we can't wait to see you. Bye. Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We are produced by Teresa Locan Solo with

• 9:51Speaker 00

  editing by Kell. Bryce Durbin is our illustrator, and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.