Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning folks. Hope life is good.

Today we’re diving into -
- Allen’s 93% discount in a startup shopping spree,
- Reliance + Nvidia + Tata AI collab,
- And Apple’s bade bade sapne in the manufacturing sector.

Our read time today is 4 minutes and 52 seconds - faster than dhoye dhoye went to moye moye in the World Cup finals. 😢

Let's dive in. 👇

Market Vibe Check

Allen takes their dhandha online. 📲

TLDR -
- Allen just bought a solution-bank startup called DoubtNut.
- DoubtNut was once offered a buyout from BYJU’s for $150mn, this deal closed at $10mn 😭
- Allen’s motivation behind this is to (very) cheaply acquire a massive distribution network which feeds directly to their target market.

In a time where most ed-tech companies are deciding to travel backwards and turn into “tech-less” businesses, Allen is doing the opposite.

They just acquired a question solving service called Doubtnut.

There are 2 interesting things about this deal -

1 - It was done at a fraction of DN’s previous price

When DN last raised money, they did so during 2019, during peak ed-tech season. This round was led by Sequoia India and Tencent from China - and it pegged their valuation at $137mn.

Later in 2020, BYJU’s even offered them a buyout at a $150mn price tag.

DN refused, and they just sold out to Allen for just over $10mn.

Crazy erosion of value for investors, and an even bigger panga for the founders.

2 - It doesn’t seem like a smart move…

To understand why, let’s travel to the USA for a second.

There’s this company called Chegg, which does exactly what DN does. Chegg was worth over $14 billion last year.

But when ChatGPT launched for free to the world, Chegg shares slid 65% OVERNIGHT, virtually killing the company’s stock price.

Both Chegg’s and DN’s USP of being a “one stop shop” for confused students is pretty useless know as AI proliferates and becomes much more commonplace.

So the reason that Allen’s spent $10mn to buy DN out is simple - for their user base.

They claim to have over 32 million users and 50 million app downloads. This gives Allen a very healthy buffer/distribution network if they wanna push a product, since they can get in front of 32mn people’s screens at the touch of a few buttons.

Interesting times…

Nvidia, Reliance, and Tata come together over AI. 🤖

TLDR -
- Nvidia is supplying chips to Jio + Tata to build their AI capabilities.
- Jio is also in the market to build and train their OWN LLM.
- Talks have just started, so no numbers revealed yet.

Crazier collab than when Himesh Reshammiya met Ronaldo…

AI is getting hot, and Modi is itching to build out India’s artificial intelligence ecosystem. Turns out that Reliance and Tata will be teaming up with Nvidia to get there.

Here’s what we know so far -
- Nvidia will provide their best-in-class CPU/GPU chips at a discounted price
- Jio will handle all of the maintenance and upkeep - at no cost for Nvidia
- Tata will use resources to build generative AI applications for their enterprise clients

Jio also wants to take a stab at building their own language model (basically an AI that’s been trained on whatever Jio wants it to be trained on), but that is an expensive affair - it costs 200-350 million USD to do something of that scale.

All operations will be based out of a 2,000 MW data center - for reference, running costs can go anywhere from 7-12 million USD per megawatt for a large data center.

Electric. ⚡

Apple lays out ambitious plans for India. 📈

TLDR -
- Apple wants to take it’s India production from $7bn to $40bn in 5 years.
- This is a big jump - the entire Indian electronics industry is only ~$140bn.
- Market is loving their products, Apple mkt share in India has 3Xed, from 2.5→7.5ish percent.

Tim Cook is making a very intentional change to Apple’s original itinerary by boosting production like crazy.

Factories have been set up all over -
- 300 acres in Karnataka for a R&D/mfg lab
- 60,000 pax facility near Bangalore
- 40 acres in Ranchi

Apple wants to use India as both a launchpad to rest of Asia and also sell to a fast-growing local market.

This is called a “China + 1” strategy, and it’s an approach that a lot of major manufacturers are taking. They get to avail of the Indian government’s super-high subsidies, sell to the Indian market, and get lovely access to some of the biggest export hubs in the world.

Solid stuff…

In other news… ☕

Elon hunts for a $1bn infusion into xAI (TC)

Tom Ford propel’s Zegna’s biz (BBG)

US regulators intentionally set Binance’s $4.3bn fine high as a warning (BBG)

BTC miner Phoenix soars 50% in it’s Abu Dhabi IPO (CoinTelegraph)

Biden looks for a $15mn fundraise in the next 5 days (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it. Have a mauj-masti filled day.

Lots of ❤️,

Team Cutting Chai