- Humanoid robots are here…
- This biotech program has limitless applications…
- A great move for EV infrastructure…
Dear Reader,
At $20 billion, it makes the deal the largest acquisition of a private software company in history.
But it’s not the sheer size of the number that is most interesting. It’s what Adobe paid for Figma in terms of valuation that’s so astonishing.
Figma is web-based software that helps teams collaborate to create software applications for the web and for smart phones. It got its start in 2013 at a time when smart phone-based applications (apps) were exploding. It filled a clear and present need in the market.
By spring of 2020, Figma had become a unicorn – valued at $2 billion. By then, it had clearly become the dominant player in its business, making it a clear target for acquisition. Adobe already had a competing product, but it just couldn’t catch up with the progress that Figma was making.
And it waited too long.
By summer of last year, Figma raised $200 million at an incredible $10 billion valuation. And as we now know, Adobe had to pay $20 billion to get the deal done. Which brings us back to valuation…
Adobe’s offer for Figma is about 50 times Figma’s estimated 2022 sales. Fifty times? That’s not the kind of multiple that we would expect in a bear market. Not even close.
For comparison, in December of 2020, Salesforce announced its acquisition of another collaborative software company, Slack, at a valuation of 26 times sales. Even that was a frothy valuation for a bull market. But 50 times sales in a gut-wrenching bear market that the U.S. government seems hell-bent on making worse?
The reality is that in good markets or bad, the best-in-class, high-growth tech companies will always command a premium. Adobe dominates the professional graphics software market. Even though Adobe has a competing solution, it just doesn’t have the adoption and traction of Figma. And while I can’t agree with the inflated valuation, the acquisition itself makes perfect sense.
Some of us might remember Facebook’s outrageous acquisition of WhatsApp back in 2014 for $19 billion. Valuation multiples didn’t even mean anything for that deal as WhatsApp didn’t have any revenues at the time. The deal was all about users and app utilization, and WhatsApp was crushing Facebook’s Messenger at the time.
Facebook bought its largest competitive threat. It took years before the market realized that it was a smart move. WhatsApp was ultimately worth a fortune to Facebook’s advertising business and the deal has now paid for itself many times over.
Assuming that Adobe survives antitrust scrutiny for the deal, I suspect the same will be true for its Figma acquisition in time.
I, Robot?
Ameca the bipedal robot just got a big upgrade.
We talked about Ameca back in January. For the sake of new readers, this is a robot with remarkable expressive capabilities. Its facial expressions and hand movements are incredibly human-like.
Well, now Ameca has become an “intelligent” conversationalist.
The company behind the robot, Engineered Arts, integrated OpenAI’s GPT-3 software with Ameca.
If we remember, GPT-3 is an AI-based language model that OpenAI trained on 175 billion parameters. And it gives Ameca the ability to have intelligent conversations with humans. Here’s what that looks like:
A Conversation With Ameca
Source: Engineered Arts
This demonstrates just how human-like Ameca now is. The person in this video asked Ameca a question, and the robot “thought” about it for a second then gave an intelligent answer.
And it’s amazing just how expressive Ameca is when interacting. We can easily see how this kind of bipedal robot could have functional applications as a home assistant or perhaps in healthcare facilities.
To be clear, Ameca isn’t itself an AI. The robot isn’t self-aware. It just utilizes GPT-3’s natural language model to “understand” what humans are saying and formulate a reasonable response.
That said, the day is coming when these bipedal robots will infer the proper speech or action on their own. And that’s why I’m looking forward to Tesla’s AI day. It’s happening this Friday.
I’m most excited to hear from Tesla about its advancements on its own bipedal robot Optimus. I suspect Tesla’s progress may catch a few off-guard.
Tesla has a unique advantage when it comes to producing a functional bipedal robot. It has nearly mastered AI powered autonomous technology for its passenger vehicles and trucks. Solving autonomy for a bipedal robot is arguably an easier task.
Robotics plus autonomous software plus a large language model will result in the kinds of robotics envisioned by Isaac Asimov in his Robot Series of books. For those interested, it’s worth a read to understand what’s coming…
Another remarkable AI-enabled breakthrough with proteins…
As regular readers know, we track the progress of Google’s artificial intelligence (AI) division, DeepMind, very closely in The Bleeding Edge.
Perhaps DeepMind’s most incredible breakthrough to date came from its Alpha Fold 2 AI earlier this year. It accurately predicted the structure of nearly every known protein on Earth – over 200 million of them. And then DeepMind published the entire database for anyone to use.
DeepMind’s breakthroughs in proteins since its original AlphaFold has led to an explosion of work in proteomics (study of proteins). And a team of researchers at the University of Washington just published some very interesting research that is highly complementary to what DeepMind has done already.
The team developed a new AI-based tool called ProteinMPNN. It gives scientists the ability to reverse engineer protein structures.
Here’s how it works…
If scientists design a novel protein structure designed to affect some desired outcome, ProteinMPNN can reverse engineer that design and identify the protein’s specific amino acid sequence. This gives scientists the “recipe” to produce that protein in the lab.
I can’t overstate how incredible this is.
This empowers scientists to design new proteins based on their structure alone, then use ProteinMPNN to determine how those proteins can be manufactured.
On a practical level, this has major implications for both therapeutic development and synthetic biology.
For the former, we now have all the tools we need to design and produce proteins that could cure difficult diseases that we just haven’t been able to treat up to this point. I expect we’ll see some life-changing therapies come from this.
As for synthetic biology, we could use these tools to do all kinds of interesting things.
For example, we could create bacteria capable of cleaning up oil spills in the ocean using ProteinMPNN. Or perhaps we could create bacteria that produce oxygen or consume carbon dioxide.
Really, the applications are limitless.
And here’s the best part – the University of Washington research team followed DeepMind’s lead. They open-sourced ProteinMPNN for anyone to use.
Alpha Fold 2 and ProteinMPNN give both researchers and biotech companies incredible resources for therapeutic development that have simply never existed before. It’s like turning on a light switch. The whole field was in the dark and severely limited with what it could do in terms of protein structure prediction and reverse engineering of proteins.
And now the capabilities and resources are publicly available for anyone to use.
The end result? An explosion in the field of proteomics and the utilization of new and existing biotech companies taking advantage of these incredibly transformative tools.
The Great Recalibration Is Coming to South Carolina…
We’ll wrap up today with yet another development within the Great Recalibration trend we’ve been tracking this year.
For the sake of new readers, the Great Recalibration refers to the reshoring of manufacturing in high technology in America and Europe. This is a massive trend right now. It’s all about creating more resilient supply chains and bringing manufacturing closer to its end markets.
And Swiss construction conglomerate ABB just announced that it will invest $4 billion to establish a new electric vehicle (EV) charger factory in Columbia, SC. This is very close to BMW’s plant in Spartanburg, SC – about an hour and a half away.
ABB plans to produce about 10,000 EV chargers a year at this new facility. These will be chargers both for passenger EVs and for semitrucks.
This is another great example of the large reshoring of manufacturing in the United States after decades of moving production offshore. In this case, it’s happening via foreign direct investment in the U.S.
And it makes perfect sense.
The U.S. is a massive market for EVs. So producing these EV chargers in the U.S. – where there is a huge need – makes the supply chain extremely efficient.
But that’s just part of the motivation for the investment. With the most recent passing of the Inflation Reduction Act, which has nothing to do with inflation, there are massive economic incentives for any businesses related to EVs. EVs and EV infrastructure have been politically positioned as a superficial way of doing something to reduce carbon emissions.
I say “superficial” because the majority of U.S. electricity production comes from burning fossil fuels. In the last two years, the use of coal for electricity production has increased to 25% of total electricity produced annually. Hard to believe that we’re going backwards…
The point is, EVs will only be “clean” when clean energy powers them. And we have a long way to go to get there.
Still, this will create a lot of jobs in Columbia. And there certainly is a big need for more EV charging infrastructure. So it’s great to see ABB making this massive investment.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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