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Midterm Recap

Happy Wednesday.

We’re live on YouTube and 𝕏.

The current thing in tech and business is prediction markets crushing at the midterms.

Today’s Lineup

Instacart Founder Apoorva Mehta at 11:45 AM
Quinn Emmanuel Partner Alex Spiro at 12:00 PM
Traversal Co-Founder & CEO Anish Agarwal at 12:30 PM
NYT Best Selling Author Derek Blasberg at 12:40 PM

Run of Show

Midterm Recap

On the cover of the WSJ: DEMOCRATS TAKE CONGRESS IN STUNNING REBUKE OF TRUMP

Tyler Cowen has a nice roundup of takeaways regarding what is rising and falling in status. Lots of winners, pollster Nate Silver did well, as did prediction markets. The market is booming on the news, with the Dow up 2.89% and tech stocks up 1.96%.

The big loser of the night was data centers compute campuses, where only North Dakota voted in favor of more AI compute coming online. Ben Thompson has 10 takeaways from the results and how the newly strengthened opposition reshuffles the winners and losers in the AI race. Overall, the effects should be bad for tech in the short term, but potentially good in the longer term. A lot of the expectation around this was likely priced in though already.

After a crazy upset in the Brazilian Presidential election a few weeks ago, prediction markets performed remarkably well. Here are some stats from Polymarket and Kalshi.

Canva Lays Off 22% of Staff

Yesterday Canva cut 1,271 jobs, about 22% of its staff. CEO Melanie Perkins said Canva’s growth has slowed for the first time in a decade, and that the company needs to “refound” itself for the next chapter by combining the product, growth, and platform teams into one org.

Canva is also pushing for more in-person work, with most hybrid employees expected to be in the office 2-3 days a week starting in January. Affected employees will get at least six months of salary, they can keep their Canva MacBook, and the company is also offering $10,000 grants to those who want to start their own company.

OpenAI + Pierre Computer Company

OpenAI is acquiring Pierre Computer Company, the company behind Code Storage and several other open-source developer tools already used inside Codex. OpenAI says the goal of the deal is “to build on the Git workflows that developers already rely on and adapt them to how teams work with coding agents.”

Pierre also dropped this fun announcement video of the acquisition.

Pangram Detects AI Videos

Pangram, which is best known for detecting AI in text, is launching AI detection for images and videos. The company says the new product can detect an AI-generated image with 99.96% accuracy and 98.57% for video.

You can try it out here.

Clip Spotlight: Why would Elon cap usage of Grok Bot when its traction is going so well? Dylan Patel explains:

"You have to remember what Elon's trying to do right now. He's taking SpaceX and turning it into a neocloud, in some sense. He's building ridiculous amounts of compute."

"If you take his balance sheet, he's got like $80B of cash. $20B is going to go to rockets. The other $60B he can spend on compute."

"He's raising another $40B right now. And at the same time he claims he wants to build 13 gigawatts. If you build all of that out, it's $400B+."

"So where does he get the cash? He has to monetize his compute as effectively as possible. To be able to pay for all the capex that he wants to do."

"And given what's going on in the spot compute market — being able to sell GPUs for $15 an hour, when the TCO of them is only $4 an hour, you have this massive delta. So he's exploiting that."

"He needs to focus on, 'How do I build the most compute, period?' That's step 1. Step 2 is, 'How do I use that compute most effectively to dominate the universe?'"

"The only way to build 13 GW financially is if he makes as much money as possible from the compute he has. So if that means he ripped some compute out of xAI's team to sell it to Anthropic and Google, he had to do that. Because ultimately a year from now, his xAI team will have a lot more compute to deliver by doing that."

"So he needs to be able to generate all this cash flow, and bridge the financial gap, to be able to spend $300B, $400B, $500B on capex over the next year, year and a half."