Dear Studio Fam,
This is a unique week in tech announcements as we spotlight our first major product reveal from the US Federal government. It wouldn't be a tech update without a headline about a CEO being investigated for fraud so we've got news about the SEC's latest investigation. And finally we take a look at a struggling hyperlocal delivery startup abroad and get a brief glimpse at Apple's plans to compete with ChatGPT.
FedNow Goes Live Bringing Instant Payments to US Banks
FedNow, the instant payment network developed by the United States Federal Reserve, is now live. FedNow lets participating banks and financial institutions instantly settle transactions between banks for basically zero cost, a process that previously took days and required onerous wire fees to expedite. The rollout of FedNow is being done gradually as the initial partner institutions test its features and roll out the functionality to its customers.
In the near term, some US banking customers can expect payments and transfers to settle more quickly without any change to their current banking practices. FedNow is currently only a technology to be adopted by banks so retail customers need not do anything to benefit from the service. Similar systems in other countries, such as PIX in Brazil, are actually available directly to citizens without the need for an intermediary bank, effectively turning every citizen’s government ID into a completely free bank account.
While FedNow still requires US citizens to have a private bank account, the benefits are obvious: lower transaction fees and faster transfers. But not every actor in the financial space serves to benefit from FedNow. Many of the criticisms of traditional banking by crypto enthusiasts are effectively nullified by FedNow’s abilities, and traditional money transfer services like Western Union could lose billions in fees if FedNow extends its standards to other countries.
Ryan Breslow Under SEC Investigation for Bolt Fundraising Claims
Ryan Breslow, the founder and former CEO of one-click-checkout startup Bolt, is officially under investigation by the Securities and Exchange Commission for questionable statements he made to Bolt investors. Breslow, who now sells chocolate seaweed bites and organic pomegranate syrup through his new company Love, allegedly misrepresented Bolt’s revenue and engagement metrics to current and potential investors, and allegedly made materially false statements about the nature of Bolt’s business relationship with Forever 21, one of its most significant customers and investors in the business.
Dunzo Might Be Donezo
15 Minute Delivery startups are mostly past their prime in the United States with the failure of companies like Fridge No More and the consolidation of lesser companies by Gettir and GoPuff (neither of which are profitable). But the concept of ultra quick delivery of household essentials is popular in developing countries where intense density and the low cost of labor make the economies of rapid delivery more feasible.
But even the density and low cost of labor in India has not been enough to keep Dunzo, the Indian hyperlocal delivery startup backed by Google, in business. The Bengaluru-based company announced to its staff this week that paychecks would be delayed and layoffs are imminent while the company attempts to raise additional capital to maintain operations. The news has come to a shock to many given that the company has raised almost $500 million to date, including $45 million as little as four months ago.
What exactly does a delivery company have to do to lose more than $12 million per month in a country where the minimum wage is less than $7 per day and common household goods are available for pennies?
Apple GPT Allegedly Being Tested Internally
Apple is reportedly working on its own version of ChatGPT, allegedly called Ajax. According to a report by Bloomberg, the project is based on Google’s machine learning framework and is being led by former Google AI engineer John Giannandrea. Ajax is being used by only a select few Apple employees and access is being strictly regulated.
While Apple’s AI assistant Siri is now 13 years old, it has lagged behind the voice assistants of Google and Microsoft in no small part because Apple’s commitment to privacy requires most functions to be executed locally on an iPhone. The Google Assistant, on the other hand, processes user requests in the cloud to allow for more powerful responses. Apple’s LLM reportedly is being configured to run locally on a future generation of iPhone, likely limiting its capabilities compared to products like ChatGPT which function inside of massive data centers and cost a few cents to process every query.