In this week’s reading update, we delve into diverse topics from the evolving landscape of AI and its impact on business models, to the strategic challenges faced by Boeing due to entrenched leadership shifts. Key highlights include the reduction in AI training costs of models and the rising need of AI product management.
AI
- The Batch: The article from DeepLearning.AI highlights the growing importance of AI Product Management as software development becomes cheaper and more efficient due to AI advancements. This trend boosts demand for individuals who can define valuable software specifications. A major challenge in AI Product Management is the skill gap, as it requires technical AI knowledge, data proficiency, and managing iterative processes. Additionally, the article discusses DeepSeek-V3, a new language model with exceptional performance at significantly reduced training costs. Finally, it outlines the U.S. tightening restrictions on AI exports, which could impact international access to advanced AI technology and shift the global AI landscape.
- Prompt Tuning PEFT: Hugging Face introduces an Additive Fine-Tuning method called Prompt-Tuning, which involves training additional layers related to the prompt without altering the original model’s weights. This technique allows for efficient training and inference by maintaining the model’s pre-learned information while reducing the number of trainable parameters. The cookbook demonstrates training two models with distinct datasets, showcasing how prompt tuning leads to faster and more cost-effective training, using a foundational model like Bloom. The approach can be customized and reused in different settings, offering a flexible and practical solution for specific AI tasks.
Real estate
- El Banco de España multa con 590.000 euros a Sociedad de Tasación y su cúpula: The Bank of Spain has fined Sociedad de Tasación 540,000 euros for a “very serious” infraction due to deficiencies in their administrative, technical, or personnel organization, and internal control procedures. These shortcomings hindered the company’s ability to assess the real estate market and maintain professional independence. In response, Sociedad de Tasación presented an action plan to meet the Bank’s requirements from a 2021 inspection. They aim to implement the plan by July.
Business models
- Stackable Business Models in the Age of AI: The article by NFX explores the evolving landscape of business models in the AI era, emphasizing that building successful startups requires more than just innovative technology; it requires strategic value creation and retention. The piece highlights the challenges AI companies face with monetization and competition, urging founders to craft compound business strategies that enhance revenue, retention, and customer engagement. It suggests iterative “stackable” models, beginning with a core product and layering additional revenue streams such as API access or consulting services. The discussion includes tactics like price disruption and quality innovation, combining AI’s efficiency with cost reduction and premium services to gain market share. The article underscores the importance of business model innovation over mere growth, advocating for building sustainable strategies to become market leaders as AI transforms industries.
Online Marketplaces
- JP Morgan Global Online Classifieds Report 2024: Key Highlights Include REA, Scout24 and Rightmove: JP Morgan’s 2024 Global Online Classifieds report highlights key trends in leading marketplaces like REA Group, Scout24, and Rightmove. REA and Scout24 stocks were upgraded to Overweight due to their competitive growth strategies, while Domain and Rightmove were rated Underweight, facing challenges like declining revenues and strategic execution pressures. CoStar was also rated Overweight due to its scalable subscription model. The report underscores themes such as digitalization, AI, and potential sector consolidation, especially across Europe, with significant private equity interest. The $13.4 billion acquisition of Adevinta signifies possible further consolidation opportunities. Classifieds, known for their capital-light model, may see increased focus on efficiency.
Management
- Why Boeing’s Problems With the 737 MAX Began More Than 25 Years Ago: Boeing’s challenges with the 737 MAX can be traced back over 25 years to leadership decisions that shifted the company’s focus from engineering excellence to short-term profits. The acquisition of McDonnell Douglas in 1997 and subsequent leadership changes altered Boeing’s culture, prioritizing cost-cutting and stock buybacks. These changes led to design compromises, including with the 737 MAX, resulting in fatal crashes and regulatory scrutiny. CEO David Calhoun now faces the task of restoring Boeing’s reputation and engineering ethos.