ChatGPTs 🚨Code Red🚨 is a Massive Opportunity

But First…Cool, if Real

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Becoming Dauntless

OpenAI CEO Sam Altman called a "Code Red" for ChatGPT last week. Here's why it matters for your modernization or business strategy.

The situation: OpenAI needs to raise another $100 billion to cover significant cash burn. They're 10 years old, ChatGPT is turning three, and they have 800 million weekly active users.

When you need $100 billion to stay alive with that user base, you don't have a business; you have a zombie company.

How we got here: OpenAI has never been profitable because its infrastructure costs exceed what users pay. This isn't unusual in startup land. Uber, Airbnb, and Facebook all operated at a loss for their first decade, using venture capital to dominate markets before raising consumer prices. It worked brilliantly through the 2010s and the pandemic.

So what's different now?

According to leaked internal memos, it's Google and Gemini. Google has been indexing our data for 27 years, which is nine times longer than OpenAI has existed. While Gemini underwhelmed at launch, it's improving rapidly because Google has the world's data neatly indexed and ready to train its models.

Here's where this gets relevant for you:

You probably aren't building an LLM, but this pattern repeats constantly within business too. IT orgs try to modernize by leaping from manual systems straight to AI/XR/IoT, jumping from Industry 2.0 to Industry 5.0. It doesn't work. The sexy AI automations and fancy wearables fizzle without clean, organized data to support them. You can shove decades of missed upgrades under the rug and throw some AI on top and hope for the best.

Hope is Not a Strategy. Instead, two takeaways for innovation leaders:

1. The boring work is valuable. Right now, there's massive opportunity for founders and builders tackling unglamorous problems: cleaning data, digitally documenting processes, and recreating physical assets in digital form. If you care about profits, the foundation matters more than the tech on top.

2. VC isn't the only path. The venture capital model worked for social media and the sharing economy, but it doesn't fit every industry, market, or technology. A business that isn't VC-scalable can still be incredibly worth pursuing.

Tech News to Make You Smarter

• Lancome Opened an Augmented Reality Boutique. Snap opened a "Winter Village" featuring luxury boutiques in augmented reality where visitors can shop products like you would during an in-store experience. Retail gained a lot with the shift to eCommerce, namely convenience and broader inventory but lost the in-person experience. With AI brands are losing digital storefronts too as people skip websites and shop through a chatbot. While you don't typically associate high fashion with high tech, it's not surprisingly that it's luxury brands exploring augmented experience first: a big part of their product is the in-store shopping experience. They have the most to loose, and potentially the most to gain if the get the new shopping experience right.

• Microsoft acquired AltspaceVR in 2017, and in 2025, Altspace is coming for Microsoft Teams. This web VR feature allows Teams users to hold immersive events without a headset. Fun fact, back in 2018, we did our first ever startup pitch in Altspace VR with WXR Fund (throwback pic included - yes I was blonde then).

Saved on Socials

The posts, memes, job postings, and videos that caught my attention this week:

• Only Spotify can make collecting our data creepy but fun (Vannessa Jackson on Instagram)

• December babies are 50% more likely to become CEOs (Kyle Cox on Instagram). As a December baby CEO, I approve this message. And did zero fact-checking.

• Meta is hiring a Partnership Manager for Reality Labs.

• Becoming a pilot = getting to fly to cool places (Pilot Elio on Instagram). Things we are learning while rolling out Flight Deck.

Recently Played >

What we listened to this week

• Amazon manager-turned-powerhouse entrepreneur explains how retail brands can survive AI. - A must-listen if you sell anything through a digital storefront (aka website). (YouTube)

Overheard on Slack

Enter the chat. What our devs are talking about…

• “Yes, 'both' is almost always the answer to which content to post on social media. And also with which dessert to order. Except that dessert is much more enjoyable than social media.”

• “Unrelated - you know what war movies don't show? The 15-step procedure to turn on the damn tank.” - Instagram vs Reality, but make it GovCon.

• "Alt headlines: 'Code Red' aka the color of OpenAI's P&L."

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📸 This is real! This app is called CTRL + C Lens, and it was created by Tejas Shroff for the Snap Inc. Spectacles (or Snaptacles as I lovingly insist on calling them). Try the app here.