🛢️ Oil price surge

Good morning. Another reason to not have a revolver in your house - you could shoot yourself in your leg when giving it your annual clean.

Lessons learnt from the one and only Govinda.

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🤑 OpenAI raises $6.5B

• 📉 Peak XV downsizes its $2.85B fund by 16%

• 🗞️ Bite-sized summaries

  • ⚔️ Iran launched ~180 ballistic missiles towards Israel on Tuesday night

  • 💔 Company breakups

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian markets were closed due to Gandhi Jayanti.

🌍️ International

• US stocks edged higher on Wednesday amid rising tensions between Israel and Iran, which raised concerns about a broader Middle East conflict. Oil prices surged over 3% due to supply concerns. Meanwhile, ADP reported a stronger-than-expected addition of 143,000 jobs in September, indicating a rebound in the labour market despite ongoing geopolitical uncertainties.

ARTIFICIAL INTELLIGENCE

🤑 OpenAI raises $6.5B

OpenAI, the company behind ChatGPT, has just closed a monumental funding round, raising $6.6 billion at a post-money valuation of $157B - representing a giant leap from its $80 billion valuation earlier this year and $29B in 2023.

Here’s what you need to know:

• The round was led by Thrive Capital, with participation from tech giants Microsoft, Nvidia, and SoftBank.

• The new funding will be used to expand AI research and increase computing capacity.

• OpenAI is seeing rapid revenue growth, generating $300M last month, and expecting $11.6B in sales by next year.

• Additionally, the company boasts 250 million weekly active ChatGPT users and 11 million ChatGPT Plus subscribers.

• However, this growth comes with high costs, particularly in acquiring Nvidia GPUs to support its AI models. OpenAI expects to lose $5B this year.

Overall: Despite challenges like executive departures and potential restructuring, OpenAI remains a dominant force in AI.

With over 250 million weekly active users on ChatGPT, the company continues to shape industries, from personalised learning to healthcare advancements.

The new capital will be used to bolster OpenAI's AI research and develop tools for solving complex problems. As AI continues to transform various industries, OpenAI remains at the forefront of this technological revolution.

Read more: CNBC

RENEWABLES

📉 Peak XV downsizes its $2.85B

Peak XV Partners, previously known as Sequoia Capital India, is shaking up the Indian venture capital scene with a 16% cut to its $2.85B fund, amounting to approximately $465M. This adjustment primarily targets its growth-stage investments, signalling a strategic pivot in response to the evolving market dynamics.

This decision follows Peak XV's split from Silicon Valley's Sequoia Capital over a year ago and reflects broader trends in the venture capital landscape. As part of this recalibration, the firm is also revising its fee structure:

• Management fees will drop from 2.5% to 2%.

• Carry (profit share) for growth investments will be reduced from 30% to 20%, although a 30% carry could still apply if certain performance benchmarks are met.

Importantly, these changes will not impact early-stage investments, which will retain their original fee structure.

So far in 2024, Peak XV has demonstrated strong performance, achieving over $1B in exits through public stock sales and private market transactions. Noteworthy exits include:

• $185M from Indigo Paints

• $150M from Five Star Business Finance

• $73M from Mamaearth parent Honasa Consumer

Overall: This strategic downsizing comes at a crucial juncture for the Indian venture capital industry, which saw funding plummet by 65% in 2023, dropping to $9.6B from $27.5B in 2022. However, the first half of 2024 has shown signs of recovery with a 45% increase in funding compared to the latter half of last year.

Peak XV's decision to streamline its fund while maintaining a commitment to early-stage investments suggests a calculated approach rather than a retreat. This move could set a new standard for other venture capital firms navigating the shifting investment landscape in India.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

⚔️ Iran launched ~180 ballistic missiles towards Israel on Tuesday night - Most of the missiles were intercepted by Israel's air defense systems, aided by U.S. forces, but a few struck central and southern Israel, causing damage. One Palestinian man in the West Bank was killed. Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed responsibility, calling the strike retaliation for Israeli actions, including the killing of key figures like Hezbollah’s Hassan Nasrallah. Israel's Prime Minister Netanyahu condemned the attack, promising retaliation. The U.S. and other international allies condemned Iran's aggression, while urging caution to prevent further escalation.

💔 Company breakups - CVS Health is conducting a strategic review, including the possibility of breaking up the company, according to insiders. The review, led by its board of directors and bankers, explores options to enhance shareholder value. CVS, a healthcare giant combining CVS Caremark, Aetna, and healthcare clinics, has struggled to meet earnings forecasts, with shares down 20% in 2024. Key challenges stem from higher-than-expected medical costs in its Medicare business, despite aggressive member enrollment. In response, CVS has initiated cost-cutting measures and laid off 2,900 employees. No immediate decisions are expected from the review.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Singapore among key stakeholders in Bengaluru's development as tech hub.

• LVMH invests in the maker of upscale nonalcoholic sparkling wine amid a tough market for Champagne. In separate news, Formula 1 and LVMH announce a historic 10-year global partnership.

• Saudi Minister warns of $50 Oil as OPEC+ members flout production curbs.

• Pepsi Co. to buy tortilla chip maker Siete Foods for $1.2B.

• US bans new types of goods from China over allegations of forced labour.

• Russia, Iran, China expected to use AI to try to influence US election.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Joker: Folie a Deux Review: the follow-up rides on an inert, stretched-out plotline.

• Miss Universe India 2024 Rhea Singha to play Sita In Ayodhya's Ramlila.