el producto #417 🚀
Get rid of limiting beliefs, Microsoft's big bet on AI, Amazon to buy Lyft, Spotify's ghost music, When to Build vs Buy, Meta's AI-generated users, Product memes & more
Hi folks 👋
Happy new year and welcome to a new edition of el producto
🎰 The week in figures
$80B: Microsoft to spend $80B on AI buildout: According to its President Brad Smith, Microsoft is “invest approximately $80B to build out AI-enabled data centers to train AI models and deploy AI and cloud-based applications” in its fiscal 2025, which will include half of the new calendar year. As part of a blog post designed to engender good relations with the incoming Federal administration, the number is present to impress. And it does, marketing aside. Expect other tech giants to follow suit
$10B: Microsoft's AI segment is forecasted to surpass $10B in annual revenue run rate by Q2 fiscal 2025
650M: Meta says its Llama model has become the most used open source AI model with more than 650M downloads - twice as many as the previous 3 months
📰 What’s going on
Microsoft and OpenAI have agreed on a definition of Artificial General Intelligence. The companies have agreed that OpenAI can terminate its partnership with Microsoft when AGI has been reached. The AGI definition it uses is this:
“highly autonomous systems that outperform humans at most economically valuable work.”
A very business-oriented definition of AGI
Google doubles down on Gemini. Google CEO Sundar Pichai is not hitting the brakes on his company’s AI efforts. In a call that CNBC obtained a recording of, Pichai told Google workers that “scaling Gemini on the consumer side will be [the company’s] biggest focus next year.” That means we should expect Gemini to take on more tasks for Google’s myriad users across software, search, and mobile in 2025. OpenAI, xAI, Anthropic, and other makers of Gemini competitors have similar goals, setting up 2025 as yet another annum of scrapping AI models. For those of us who consume the technology, that’s great news
Meta has made a clear strategic product decision to allow - and promote - AI generated users across its social platforms. "We expect these Als to actually, over time, exist on our platforms, kind of in the same way that accounts do… They'll have bios and profile pictures and be able to generate and share content powered by AI on the platform... that's where we see all of this going” said Connor Hayes, VP of gen-AI Product at Meta
Instagram unveiled some powerful new generative AI capabilities for Instagram. Powered by Meta’s AI video model, MovieGen, a video shared by Instagram’s chief Adam Mosseri demonstrated how you can use AI to change your backgrounds, add some new props and even accessorize with a hat or chain
Speculation is building that Amazon might acquire Lyft to strengthen its autonomous vehicle division, Zoox, and better compete with Tesla and Alphabet’s Waymo. Lyft’s 24M active riders could accelerate Amazon’s robotaxi ambitions while providing a foothold to expand Zoox into food delivery. For Lyft, struggling against Uber and mounting losses, a tie-up with Amazon could be a much-needed lifeline. The prospect of this partnership sent Lyft shares up nearly 5%
Instacart has announced a multi-year partnership with Samsung that will let users shop for groceries on their screens of their Samsung refrigerators. The integration uses Samsung’s Vision AI food recognition technology to identify what you have in your fridge to determine what items you’re running low on. Samsung says the locally-based AI can recognize “up to” 37 food items including fresh fruits and vegetables. It then uses Instacart’s product matching APIs to suggest items from Instacart that you may need and add them to your next order
After a dramatic, shocking collapse last week, Bench has found a buyer. Employer.com is now the owner of Bench, adding accounting services to the payroll and onboarding service provider
📚 Good reads
How Spotify uses “ghost music” to drive revenue, by Harper's Magazine. Spotify’s business model relies on paying artists a share of revenues based on the number of streams it gets. However, according to this investigation, Spotify developed a new strategy to improve margins by filling popular mood-based playlists with cheaper stock music from production companies, rather than tracks from traditional artists. Spotify created an internal dashboard where playlist editors could track the percentage of Perfect Fit Content (PFC) in playlists, and eventually formed a dedicated "Strategic Programming" team to systematically increase PFC's presence across hundreds of playlists
Tech windows: when to build, when to buy. James Currier shares a framework on tech cycles, giving a fresh perspective on why specific periods favour creation while others reward consolidation. A must-read to understand where we are in various tech cycles and what strategies might work best
Dark Patterns Detective. This fun mini game will help you spot sneaky design tricks used in various products (I admit guilty of many during my time at some Amsterdam-based online travel company). Developed by Rohan Dehal, this free interactive experience is designed to help you instantly spot dark UX patterns used by top companies to manipulate user behaviour and understand how these patterns exploit cognitive biases
Tool Augmented Generation: your company’s functionality + AI. Ravi Mehta explains the concept of TAG and how it can provide advanced applications beyond mere language generation
Limiting beliefs: ditch the 4 dream killers holding you back. Don’t give up on your New Year’s resolutions yet! Nir Eyal explores our most common limiting beliefs and how to get rid of them
Product/Growth/Marketing memes? Yes, please. Elena Verna is one of my favourite Product/Growth authors and I often feature her articles here. She also happens to be an amazing meme creator and she has curated her best memes of the year here
That’s all for this week. As usual, feel free to reach out and share your thoughts by replying back to this email or commenting on Substack
Thanks for your support, and have a great start of your 2025!
Angel