Weekly Series #2

Topics: Google announces AlphaFold 3, FTX to return full amount to its creditors and then some, UK-based startup Wayve raises $1B to develop FSD, Berkshire Hathway Annual Meeting Highlights & more

1. Isomorphic Labs announces AlphaFold 3:

   

   Courtesy - Google

   Isomorphic Labs, a Google DeepMind subsidiary, released “AlphaFold 3” on May 8th, their latest version of AI model that can predict the structure of proteins, DNA, RNA, ligands and more according to their latest blog. This technology is touted to be groundbreaking in the realm of drug discovery & design as it can predict drug-like interactions including the binding of proteins with ligands and anti-bodies with their target proteins. According to their blog, they are claiming to be 50% more accurate than best known traditional methods without needing any structural inputs. Isomorphic Labs is already working with two pharmaceutical giants - Eli Lilly and Novartis on drug discovery projects.
   
   The earlier version of their model - AlphaFold 2, released in 202, was open-sourced for the research community. However, AlphaFold 3 will remain closed source, which signals the significant potential this technology has, as highlighted by this Bloomberg article.
   

2. FTX creditors to get back all their money and then some:
   
   FTX said in a statement on Tuesday, May 7th, that they were able to recover enough assets to pay back 98% of their creditors full balance as of November 2022 (when FTX filed for bankruptcy). Not only will they receive 100% of their balance, but also interest accrued thus far on this balance, bringing it to a total of 118% or more. According to an LA Times article, FTX stated between $14.5 to $16.3 Billion will be available for distribution as per their court filings.
   
   This was possible mainly due to the recent cryptocurrency bull market (triggered by spot Bitcoin ETF approval by SEC) and good investments by FTX founder Sam Bankman-Fried. It turns out that SBF, who has been sentenced to 25-years in prison for fraudulently using customer deposits, made some smart investments along the way. For example, SBF invested $500 Million for 8% stake in AI-startup Anthropic. Majority of this will be sold to institutional investors for roughly $884 Million, thanks to appreciation of Anthropic’s valuation fueled by the AI wave.
   

3. UK-based startup Wayve AI raises $1 Billion:
   
   Wayve AI, a startup developing AI technology for autonomous driving, published an official post on their website on May 7th about raising $1.05 Billion Series C investment led by Softbank Group, with contributions from NVIDIA and Microsoft. The company was founded in 2017 and has been on a mission to excel at Embodied AI for autonomous driving. Embodied AI is a type of AI that focuses on learning how machines interact with, learn and comprehend human behavior in real world.
   
   Wayve plans to use the fresh investment to fully develop and launch a product for production vehicles. They plan to sell this technology to OEMs (original equipment manufacturers) to improve their driving assist/self-driving capabilities. This is a direct competition to Tesla, as they can deploy Embodied AI tech through any automobile giant irrespective of whether they sell electric or gas powered vehicles, thereby looking at much higher distribution.
   

4. Takeaways from Berkshire Hathaway Annual Shareholder meeting:
   
   Berkshire Hathaway recently held their annual shareholder meeting in Omaha last weekend, an annual event which is widely regarded as the “Woodstock for Capitalists” and much anticipated by the global investor community. This was the first such event without the presence of Charlie Munger, who passed away last year. This year’s event had the following takeaways:
   
   1. They sold Apple stocks worth $20 Billion, which was roughly 13% of their holding, but claimed that it was for tax purpose and that they still applaud Apple as a good investment. In spite of the praise, analysts still believe that there may be more to this. Apple has failed to bring any novel product or innovation in the market and is seeing a slump in iPhone sales.
   
   2. Warren Buffett announced that Greg Abel will be in charge of capital allocation decisions in his absence. this means that he will not only be in charge of making big acquisition decision for the company but will also decide the equity allocation for their portfolio.
   
   3. Buffett announced the selling of their entire stake in Paramount and took full responsibility for the bad investment decision as the company lost a significant amount of money on this bet.
   

5. Apple partnership with OpenAI:
   
   According to Bloomberg, Apple is reportedly close to cutting a partnership deal with OpenAI to integrate its AI technology into Apple devices, which is a much-anticipated move as Apple has been largely missing in action from the generative AI developments among big-tech companies. The same report also states that they were earlier in talks with Google about integrating Gemini for the same purpose. There has been no official statement from Apple about this, so it remains to be seen.
   
   In other news, Apple is rumored to be looking to partner with Rivian. This comes at the helm of Apple scrapping their car project codenamed Titan.