After soaring on the first day of trading, Reddit shares were falling on Friday. A successful initial public offering for social media companies could pave the way for more IPOs, especially from companies that can claim connections to artificial intelligence.
Reddit shares fell 7.4% to $46.72 in morning trading. This is still well above the public offering price of $34 per share and should encourage further listing.
Whether success continues is an open question—Barons Reddit claims it will have difficulty achieving profitability as it posted a net loss of $90.8 million in 2023. What is clear, however, is that AI plays continue to appeal to the market, with Reddit noting that it has licensed its data to Alphabet.
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Google as a future source of revenue.
“The value of our data is increasing. In a world where more and more content on the internet is created by artificial intelligence, the premium for the actual intelligence that is Reddit continues to rise,” said Reddit’s top executive. Director Steve Huffman said in an interview with CNBC on Thursday.
The hunger for AI play is also evident from server infrastructure company Astera Labs.
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The company’s stock price rose 7.4% to $68.92 in Friday morning trading, largely unchanged after setting its initial public offering price at $36 per share this week.
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Microsoft agrees to pay $650 million to poach inflectional AI staff
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The acquisition of artificial intelligence startup Inflection AI raised many eyebrows. Now, more details are slowly emerging.
Earlier this week, Microsoft hired Mustafa Suleiman, CEO of Inflection AI, as its internal AI director, while also poaching a large portion of its workforce. This was very similar to the company’s plan to bring many of OpenAI’s employees into the company when CEO Sam Altman was temporarily ousted from the ChatGPT development company last year, but Altman The plan was canceled when he returned to the company.
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This raises the question of why Microsoft didn’t try to acquire Inflection AI, which has raised more than $1.5 billion from investors and now plans to pivot its business from consumer products to enterprise services. This raises the question.
Microsoft has agreed to pay Inflection AI $650 million as part of the licensing fee, the Wall Street Journal reported, citing people familiar with the matter. Investors in Inflection AI are repaid over time from license revenue.
Microsoft’s partnership with OpenAI is already under regulatory scrutiny. As authorities rush to respond to the AI market, it seems likely that questions will arise about the relationship with Inflection AI.
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Microsoft did not respond to requests for comment. Barons Friday. The company previously said Inflection AI would remain independent and the deal was not an acquisition. Microsoft stock fell 0.4% in morning trading.
Email Adam Clark at adam.clark@barrons.com.
