Investing in Innovation: OpenAI's $100M Bet on AI Startups

0:00What can 160 years of experience teach you about the future? When it comes to protecting what matters, Pacific Life provides life insurance, retirement income, and employee benefits for people and businesses building a more confident tomorrow. Strategies rooted in strength and backed by experience. Ask a financial professional how Pacific Life can help you today. Pacific Life Insurance Company, Omaha, Nebraska, and in New York. Pacific Life and Annuity, Phoenix, Arizona. open ai has been in the news and is one of the hottest topics in tech right now since launching their chat gpt tool which gained over a hundred million monthly active users in the first two months now that being said today on the podcast we wanted to talk about open ai's startup fund so open ai has announced that they're going to be investing a hundred million dollars to help ai companies so we're going to be talking about who they're investing in some of their first investments and what this means for the industry.

0:58So the first thing to know is that their fund essentially is setting apart$100 million to help AI companies that they have labeled as having a profound positive impact on the world. So they said that they're looking at partnering with a relatively small number of early stage startups in fields where AI can really have a very transformative effect. So they're looking at things like healthcare, climate change, education, and also places where AI tools can really just empower people by helping them to be more productive. So the fund is managed by a dedicated team with expertise in investing. So they have a lot of people that are have a lot of experience in investing, as well as people that have experience in machine learning, engineering, and also operations.

1:42So including members of the OpenAI leadership and technical staff are going to also be on there looking at a lot of these investments. But the funds investors essentially consist of Microsoft and other OpenAI partners. As we know, in 2020, Microsoft gave OpenAI a billion dollars. And this year, Microsoft gave OpenAI another$10 billion. So Microsoft is a very big backer. And they're the ones that are really spearheading the investment into a lot of these other companies that are essentially built on top of OpenAI. AI. So in addition to the capital that is going to be allocated for this companies in the OpenAI startup fund are going to get early access to future OpenAI systems, which honestly is pretty powerful.

2:26And they'll get support from the funds team and credits on Azure. So Microsoft Azure, the cloud computing platform is going to come in handy because, you know, cloud computing is very expensive for AI and having that partnership with Microsoft. Obviously, Microsoft wants to do this to lock these new AI companies in on their platform. So it's kind of a growth strategy for them. But also it's helping these startups who are gonna inevitably have to spend a lot of money on that specific area. So in December, OpenAI announced their first investments that they made in their AI startup fund. And they said that, you know, essentially they've heard from thousands of founders around the globe.

3:07Obviously a lot of people hit them up about this. And a lot of different people with different unique missions for transforming AI. And so they made four initial investments, and they think that they made these specifically in their, you know, in their words, because they have a outsized potential to reshape creativity, legal services, productivity, and education. And really those things at scale, I think is what they're talking about. And so yeah, those, the companies they identified have a really deeply integrated cutting edge AI model. And I think that they really are just investing in these to kind of further AI and what's going on.

3:43So in their own words, they said, we believe there's an enormous amount of value yet to be unlocked for the world with AI. And that was, I think, OpenAI's COO. So that was Brad Lightcap. And he said, we're proud to partner with the talented founders and team at Descript Harvey AI Mem Speak as they're building the tools that we believe will have a significant impact on everything from legal services to language learning, productivity, and creative expression. So I want to talk about those four companies really quick, what they're doing and why they may have been invested in. Descript, the first one they mentioned, it's essentially a video editor.

4:17It's reshaping the way that creators engage with content by using AI to make video editing just like as simple as editing a text document. So their investment comes as Descript released what they called storyboard their new product which is a new framework for making a video that is as intuitive as making a slideshow that's you know how they how they put it so it's clear from the and then of course light cap talking about this said it's clear from talking to customers that descript is breaking down barriers between idea and creation and extending video editing capabilities to an entirely new class of creators so um that is the first company very interesting The second is Harvey.

5:01And so Harvey is developing an intuitive interface for all legal workflows through powerful generative language models. So looks like they're getting into the law industry. This is very interesting because recently, the company Do Not Pay, which was, you know, helping people to fight parking tickets and speeding tickets and whatnot, using AI technology, using ChatGPT. uh it was it was the person that was trying to operate that was threatened with jail time for trying to use chat gpt um on a case obviously in my opinion this is just lawyers trying to sue uh it was a bunch of lawyers that were threatening to sue for jail time but uh this is just you know people feeling threatened and lawyers when they feel threatened will sue to try to preserve their industry but that being said i've recently spoken to uh different lawyers and law firms who listened to this show and told me that they're working on similar things.

5:51And they also said that if they were threatened with a lawsuit, they would sue back to try to change the laws if that was something that happened. So they wouldn't actually back down, which is pretty interesting because Do Not Pay inevitably canceled that court hearing, and I'm assuming they're going to work on doing more. But it's interesting. I don't think you can stop innovation in this specific space. So it's interesting that they're kind of breaking into this with Harvey. and in addition it says that its technologies expands a lawyer's capabilities by leveraging AI to make tedious tasks like writing research, drafting, analysis, and communication easier and more effective.

6:27So this saves lawyers time ultimately allowing them to deliver a higher quality service to more clients which is pretty interesting. When talking about it they said that we believe Harvey will have a transformative impact on the legal system empowering lawyers to provide higher quality legal services more effectively to more clients. That was light cap again. And he also said that Harvey's vision for how AI can just increase access to legal services and improve outcomes fits pretty squarely with its mission. So they're pretty excited to accelerate what Harvey is doing for law. And I think Harvey is currently in beta, so I don't believe that there's a product launch that people can use quite yet.

7:09The third company they invested in is Mem. So Mem is building the world's first self-organized workspace. So starting with personal notes, Mem uses advanced AI to organize, make sense of, and predict which information will be the most relevant to users at any given moment or in any given context. And Mem's mission is to build products that inspire humans to create more, think better, and spend less time searching and organizing. So, Lightcap, you know, he's got a quote on every one of these investments, but what he said about it was that Mem uses powerful AI to make knowledge workers more productive by removing the tedium and drudgery of organizing and accessing information, ultimately allowing people to focus on the parts of their work that matter.

7:53So, it's going to be pretty interesting. I think that Mem recently lifted the waitlist for their flagship product, which is MemX, so you can go check that out on their website. Speak is the fourth and last investment that they made in this specific round of funding investments in AI. And Speak is on a mission essentially to help more people become fluent in new languages, right? So you're thinking like this thing is something that competes with Duolingo and those kind of companies. It's starting with English and the company initially launched in East Asia with a focus on South Korea. It has nearly 100 ,000 paying subscribers, and Speak is creating an AI tutor that can have open-ended conversations with learners on any number of topics and provide real-time feedback on pronunciation, grammar, vocabulary, etc.

8:42So this is obviously a very interesting, very exciting use case. Lightcap said, we're very excited to partner with the outstanding team at Speak. We are well positioned to deliver on this powerful application of generative AI, making language learning effective and accessible. Speak has the potential to revolutionize not just language learning, but education broadly. I think this is a really interesting concept. When I was in college, I actually interned at a company. And what they were doing was it was an app that allowed fluent native speakers in specific languages to talk with you. And if you're trying to learn a new language, you could practice speaking.

9:21speaking. So it was kind of like, I don't know, like the Uber of talking with people in other languages, but you would pay and then pretty much have 15, 20, 30 minute conversations with people while you're commuting or whatever in different languages to help you practice with someone that's fluent. I think in America and a lot of other countries will have the problem where teachers that are like, you know, your Spanish teacher might not actually be from Mexico or Spain and might not have those native accents or your French teacher isn't actually from France. And so you're not going to get the same quality.

9:53You're going to get like an American accent or maybe they're it's not, you know, they're not perfect at the language and whatnot. So that that company I interned with was trying to solve that problem. And it sounds like Speak is now bringing that to a whole new level with AI. So it's going to be pretty interesting to see how this continues to unfold with the with the new fund. I think OpenAI says that they're really optimistic about the increasingly powerful AI systems that are going to continue to roll out. And so it'll be really exciting to see what continues to happen in the industry and who they invest in next.