🤖 Microsoft GPT?

…and Coinbase's big cut [Disclosures](   Microsoft has entered the chat (Jakub Porzycki/Getty Images)   Yesterday’s Market Moves   Dow Jones 33,704 (+0.56%) S&P 500 3,919 (+0.70%) Nasdaq 10,743 (+1.01%) Bitcoin $17,434 (+1.49%) Dow Jones 33,704 (+0.56%) S&P 500 3,919 (+0.70%) Nasdaq 10,743 (+1.01%) Bitcoin $17,434 (+1.49%) Hey Snackers, New thing to add to your LinkedIn: [failure résumés](. Venture-capital firms are showcasing their biggest portfolio L’s, like passing on [Facebook]( and [Google]( in the early days. Womp. US stocks rose yesterday despite hawkish comments from Fed Chair Powell that suggested interest rates could stay higher for a while. Meanwhile, investors hope that tomorrow’s December consumer-prices report will show inflation continuing to cool. GPT Microsoft's reportedly in talks to invest $10B in OpenAI (it's all about the ChatGPT edge) Microsoft Word meets artificial intelligence… We’ve come a long way since Clippy. [Microsoft]( Office Assistant used to be a cartoon paperclip — now it could be a sophisticated AI brain. Microsoft has been in talks to invest $10B in OpenAI, Semafor [reported](. OpenAI is the company behind [genAI]( tools like ChatGPT and DALL-E, which generate articles and images from text prompts. - Excelling: ChatGPT went viral upon its [release]( in November. OpenAI said 1M+ people signed up to test the chatbot in the first five days. - Power points: Microsoft would reportedly get to keep 75% of OpenAI’s profits until it recoups its investment. After that it would own a 49% stake in the company. - Outlook: The funding would value OpenAI at $29B, up from $20B in October. The deal could fall apart, but it’s apparently targeted to close by year’s end. Microsoft’s edge… Microsoft invested $1B in OpenAI in 2019 — and also sells the cloud infrastructure that the tech runs on. According to founder Sam Altman, OpenAI spends a few cents in computing power each time someone uses ChatGPT. That goes straight into Microsoft’s pockets. By deepening its involvement with OpenAI’s tech, Microsoft would gain an edge over cloud titans like [Amazon]( and Google. Also: - Search: Microsoft could incorporate ChatGPT’s chatbot or DALL-E’s image generator into its search engine, Bing, to better compete with Google. - Office: Microsoft could also include OpenAI’s tech in programs like Word and Outlook (think: using ChatGPT to help you write emails). THE TAKEAWAY Acquire (relationships) early… Right now OpenAI is still free to the public (though it charges developers for licenses). But one day it could disrupt Google’s search dominance and rake in billions. Microsoft got in early to build a dependent relationship, and it could reap the benefits. Still, OpenAI has fierce competition — and its commercial success is far from guaranteed. Sick Coinbase lays off 20% of its employees as another wave of contagion hits the crypto industry Under the weather… US crypto exchange [Coinbase]( said it's laying off 950 people. In his announcement, CEO Brian Armstrong called out "unscrupulous actors" in crypto (an apparent reference to [SBF]( and mentioned last year's struggling macro economy. It isn't the exchange's first big cut: - Cost cutting: As crypto winter set in and trading volume dried up, Coinbase shed 1K+ employees in June and 60 in November. - Cost pumping: Last week Coinbase was hit with a $50M fine from NY regulators and agreed to spend another $50M on its compliance programs (think: [KYC](. Crypto’s cold season… Coinbase isn’t the only one sick with crypto [contagion](. Last year, the industry shed 26K+ roles. More recently, big players stumbled after FTX's November implosion. Crypto lender Genesis laid off 30% of staff this month, in its second round of cuts, and is now said to be considering bankruptcy. FYI: it also reportedly owes $900M to customers of crypto exchange Gemini. Meanwhile, crypto mega bank [Silvergate]( cut 40% of its workers last week following an $8B+ [bank run](. THE TAKEAWAY Contagion comes in waves… When a big fish like FTX sinks, it can send ripples across the crypto pond. Those ripples aren't necessarily all felt at once, because it can take a while for other big fish to get hit by the wake. Coinbase’s Armstrong said there might be more contagion coming. But contagion's waves could ultimately leave the overall industry stronger — or more centralized — by washing out crypto's weaker players. What else we're Snackin' - [#Ad]( Meta says it’s banning gender-targeted ads for teens on Insta and Facebook as part of a broader effort to tighten policies after backlash over ads’ effects on young users’ mental health. - [Primed]( This month Amazon says it will widely roll out “Buy with Prime,” a feature that allows ecomm merchants outside Amazon to use its payment and delivery services (think: paying with Prime on your fave shoe site). - [Bag]( The grocery force is still strong: Safeway owner [Albertsons]( (which agreed to sell itself to [Kroger]( notched another hearty quarter, with sales up 8.5% as consumers snapped up inflated food items. - [Coinbust]( A man was sentenced to prison in what’s believed to be crypto's first insider-trading case. Prosecutors said he profited from tips from his brother, who worked at [Coinbase]( about what coins the exchange planned to list. - [RTO]( [Disney]( CEO Bob Iger cracked down on WFH, telling workers to be in the office four days a week. Hybrid work appears to be here to stay, with office occupancy still well below prepandemic levels. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. Snack Fact Of the Day Climate disasters in the US racked up $165B in damages last year [Read more]( Wednesday - Earnings expected from KB Homes, Shaw Communications Authors of this Snacks own shares: of Amazon, Disney, Google, and Microsoft ID: 2673435 Robinhood Snacks newsletters reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC (Member [SIPC]( and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are for informational purposes only, and are not a recommendation of an investment strategy or to buy or sell any security, digital asset (cryptocurrency, etc) in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. 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