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Navigating AI: AI Pricing, Supercomputers and Productivity Gains

September 09, 2024

Welcome to this week’s AI Trailblazers Newsletter and thank you for making us your go-to source for relevant AI business news.

The kid may be back in school but AI never took the summer off. Elon Musk launched his supercomputer this week and it may be the opening salvo in the mega processing wars but questions remain on how will we power these data chip monstrosities. Canva looks to consumers to pay for their AI investments, many will be looking on to gauge the effects of their new pricing scheme on demand. Discover more below.

Mark your calendars: the AI Trailblazers Growth Summit is happening on October 30th in New York. Purchase your tickets now at the early bird rate, and stay tuned for agenda details. In the meantime, check out highlights from our last summit, and email us if you're interested in partnering.

Elon Musk Unleashes Colossus

Elon Musk’s artificial intelligence startup, xAI, has made headlines with the launch of Colossus, the world’s largest Nvidia GPU supercomputer. Built in just 122 days, Colossus is designed to train xAI’s language model, Grok, a direct competitor to OpenAI’s GPT-4. With ambitious plans to expand its compute capacity and integrate Grok into Tesla’s humanoid robots, Musk aims to revolutionize AI and secure a dominant position in the race toward artificial general intelligence. However, the rapid development of Colossus has raised concerns about its impact on local resources in Memphis.

  • Elon Musk’s AI startup xAI has launched Colossus, the world’s largest Nvidia GPU supercomputer, designed to train its language model Grok, which rivals OpenAI’s GPT-4. Located in Tennessee, Colossus boasts 100,000 Nvidia H100 processors and was built in just 122 days. Musk plans to double its capacity with 50,000 more powerful Nvidia H200 chips in the coming months.

  • Grok, xAI’s large language model, is expected to be used in Tesla’s humanoid robot Optimus, potentially generating $1 trillion in annual profits. Grok-3, set to launch by December, could become the most powerful AI model in the world. Grok-2, currently in beta, has already shown strong performance using only 15,000 Nvidia GPUs.

  • xAI’s rapid development is driven by a $6 billion funding round and Musk’s $3-4 billion investment in Nvidia hardware for Tesla. Competing with AI giants like Microsoft, Google, and Amazon, Musk leverages his close relationship with Nvidia to secure high-demand chips. xAI also benefits from Tesla’s AI resources to support its rapid progress.

  • The Colossus supercomputer is causing concerns in Memphis due to its resource demands, such as 1 million gallons of water daily and 150 megawatts of power. Despite these concerns, Musk emphasizes speed as crucial to xAI’s growth, insisting that accelerating development is necessary to stay ahead of competitors like OpenAI.

AI Trailblazer Takeaways: The rise of the supercomputers is upon us, but can we feed these machines with the power and cooling requirements they need…..and to what end?

Canva Shakes Up Pricing

Canva is significantly raising prices for its Canva Teams subscription by over 300%, citing the addition of new generative AI features as the reason for the increase. The design software company, once seen as a more affordable alternative to Adobe, is transitioning existing users to a new pricing structure, sparking backlash from some who feel the hike is too steep. With its recent acquisition of Affinity’s creative software and plans for a potential public listing, Canva is evolving into a more premium, AI-driven platform.

  • Canva Teams subscribers will face over a 300% price increase in 2024 due to the rollout of new generative AI features. Previously, users paid $120 per year for up to five users in the US, but the new pricing jumps to $500 per year, with a 40% discount available for the first 12 months. In Australia, the flat fee of $39.99 AUD per month is being replaced by a per-user rate, resulting in a minimum 68% increase for teams of five.

  • Existing users with older pricing plans will be moved to the new, more expensive structure by September. Canva justifies the increase by citing the expanded value of its platform, including new features like Magic Media and Magic Expand. These generative AI tools have broadened Canva’s offerings from design software to a comprehensive workspace for various creative tasks.

  • Despite offering discounts, Canva's pricing changes were quietly communicated via customer emails, without public announcements. However, other subscription tiers, like Canva Pro and Enterprise, remain unaffected by this increase. Some users, frustrated by the steep price hike, have indicated they’ll cancel their subscriptions and switch to Adobe or other design platforms.

  • This price hike comes at a time when Canva has acquired Affinity’s creative software and is considering a public listing in the US by 2026. Previously viewed as an affordable Adobe alternative, Canva’s new pricing strategy has alienated some users. The significant increases reflect Canva's shift towards being a more premium, AI-driven platform, potentially positioning itself for future growth and expansion.

AI Trailblazer Takeaways: Canva’s pricing arrogance is on full display. Hopefully, they’ve done their market research to determine the sweet spot for themselves with respect to demand but time will tell. Don’t be surprised if a pricing decrease is in their near future.

AI Helps Workers Thrive, Not Disappear

Alorica, a California-based customer service company, is demonstrating that AI doesn't have to be a job killer. By integrating AI tools like real-time translation and customer assistance systems, the company is enhancing productivity without reducing its workforce. This reflects a broader trend where AI is used to support employees, allowing them to focus on more complex tasks while companies continue to hire and expand.

  • Alorica, a California-based customer service company, uses AI to enhance productivity without cutting jobs, easing fears that AI will replace human workers. Their AI translation tool allows representatives to assist customers in over 200 languages without needing specialized language skills. Despite AI's efficiency, Alorica continues to hire, showing that AI can complement rather than replace employees.

  • AI has historically created as many opportunities as it has displaced, and experts believe this trend will continue. Nick Bunker from Indeed’s Hiring Lab suggests that AI will impact jobs but won't lead to mass unemployment, as seen with previous technological advancements. Companies like IKEA are using AI to handle simple tasks, while retraining workers for more complex, creative roles.

  • AI chatbots, like Alorica’s, improve customer service efficiency by reducing the time needed to handle inquiries, but they don't lead to job cuts. Alorica’s customer service agents using AI tools saw their average call handling time decrease, boosting productivity by allowing them to manage more calls in less time. This shows that AI can support workers, making their jobs easier and more efficient.

  • Despite concerns about AI's impact on the job market, studies and real-world examples suggest that AI can enhance, not diminish, employment. While AI tools may eliminate certain repetitive tasks, they also enable workers to take on higher-level roles, as seen with IKEA and Alorica’s retrained employees. Alorica continues to hire and seeks workers comfortable with new technology, demonstrating that AI can lead to job creation.

AI Trailblazer Takeaways: Some may remember a world with typewriters at every desk and then came the PC. Computers made us more efficient and productive at our jobs not necessarily replace them (although some were displaced). AI looks to have similar effects on the workforce.

Quote of the Week

“From start to finish, it was done in 122 days. Colossus is the most powerful AI training system in the world. “

- Elon Musk

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