Meta's AI spending spree sparks tech selloff

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TODAY’S TOP STORIES:

📉 Meta's AI spending spree sparks tech selloff as Wall Street questions long-term payoff

🤖 Apple releases open-source language models, OpenELM, to empower AI research community

🎤 Tupac's estate threatens legal action against Drake for unauthorized use of AI-cloned voice in diss track

💻 Augment, an AI coding platform backed by ex-Google CEO Eric Schmidt, emerges from stealth with $252M funding

🗣️ Zuckerberg envisions AI ecosystem free from Apple and Google's control

📉 Meta's AI spending spree sparks tech selloff as Wall Street questions long-term payoff

Meta Platforms' shares plummeted 13% today, triggering a selloff in big technology stocks after the social media giant signaled that its costly bet on AI could take years to pay off.

The drop erased nearly $170 billion from the company's market value and sent shockwaves through the tech industry.

What to know:

• Meta CEO Mark Zuckerberg warned that costs would grow "meaningfully" over the coming years before the company makes substantial revenue from its AI products.

• Investors fear that Zuckerberg is plunging Meta into another costly endeavor while its augmented and virtual reality business continues to lose billions each quarter.

• Meta forecast April-June revenue below estimates and raised its 2024 total expense and capital expenditure forecasts as it invests in data centers crucial for its AI efforts.

• Despite concerns, some analysts remain positive about the investments, citing AI-driven engagement on content like Instagram Reels and the positive reception of Meta AI and Llama 3.

• The stock's 12-month forward price-to-earnings ratio stands at 23.12, compared to Microsoft's 31.17 and Alphabet's 22.07, reflecting investor uncertainty about the long-term payoff of Meta's AI investments.

As the industry grapples with these uncertainties, investors will closely monitor the progress and payoff of Meta's AI initiatives.

🤖 Apple releases open-source language models, OpenELM, to empower AI research community

Apple has unveiled OpenELM (Open-source Efficient Language Models), a series of large language models designed to run on-device rather than through cloud servers.

What to know:

• OpenELM consists of eight models, four pre-trained using the CoreNet library and four instruction-tuned models.

• Apple's layer-wise scaling strategy aims to improve accuracy and efficiency, resulting in a 2.36% accuracy improvement compared to OLMo while requiring half the pre-training tokens.

• The release includes the complete framework for training and evaluating the language model on public datasets, training logs, multiple checkpoints, and pre-training configurations.

• The open sharing of information helps Apple recruit top talent by providing research paper opportunities that align with its privacy-focused approach.

As Apple is expected to introduce new AI features in iOS 18, the on-device approach will look to set a new standard for AI implementation in the industry.

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Some other quick developments you should know…

🎤 Tupac's estate threatens legal action against Drake for unauthorized use of AI-cloned voice in diss track

Tupac Shakur's estate has sent a cease-and-desist letter to Drake, demanding the removal of his track "Taylor Made Freestyle," which features an AI-generated clone of the late rapper's voice. The estate claims the unauthorized use violates Tupac's publicity rights and disrespects his legacy.

💻 Augment, an AI coding platform backed by ex-Google CEO Eric Schmidt, emerges from stealth with $252M funding

Augment, a startup aiming to revolutionize AI-powered coding assistance, has launched out of stealth with $252 million in funding at a near-unicorn valuation. Led by ex-Microsoft and Google engineers, Augment faces stiff competition in the rapidly growing market for generative AI coding technologies.

🗣️ Zuckerberg envisions AI ecosystem free from Apple and Google's control

Meta CEO Mark Zuckerberg has expressed his desire to prevent AI from being controlled by a few gatekeepers, as is the case with mobile apps and Apple and Google's app stores. He believes Meta's open-source model, Llama, will help democratize AI development and prevent large companies from dictating what can be built with the technology.