Top tech startup news for Wednesday, April 12, 2023: FTX, Cybersyn, Ethereum, NetBox Labs, and OpenAI
Good evening! Below are some of the top tech startup news stories for Wednesday, April 12, 2023.
ChatGPT may now be able to predict stock movements, finance professor shows
Back in March, we wrote a piece about ChatGPT correctly predicted that stocks would crash on March 15. Fast forward almost a month later, University of Florida finance professor Alejandro Lopez-Lira now says that the world’s most popular AI chatbot may be useful when forecasting stock prices. This may not come as a surprise to many who have been tinkering with the OpenAI tool.
In a recent unreviewed paper, Professor Lopez-Lira used ChatGPT to analyze news headlines to determine whether they would have a positive or negative impact on a particular stock. The results revealed that ChatGPT’s predictive ability for the next day’s returns was significantly better than random chance, CNBC reported.
This experiment also highlights the potential of cutting-edge artificial intelligence: these models, such as ChatGPT powered by vast datasets and advanced computing power, may exhibit “emergent abilities” that were not initially intended.
If ChatGPT can demonstrate the emergent ability to comprehend financial news headlines and their potential impact on stock prices, it could pose a threat to high-paying positions in the financial sector. As per Goldman Sachs’ estimation in a March 26 report, roughly 35% of financial jobs are at risk of automation by AI.
“The fact that ChatGPT is understanding information meant for humans almost guarantees if the market doesn’t respond perfectly, that there will be return predictability,” said Lopez-Lira.
Since its launch on November 30, ChatGPT has impressed millions of people around the world with its ability to write computer code, poems, songs, and entire movie plots, and even pass a law, Wharton MBA, and medical exams. OpenAI said the new GPT-4, which is based on a large multimodal model, can solve difficult problems with greater accuracy. In one test, OpenAI claimed that GPT-4 performed at the 90th percentile on a simulated bar exam, the 89th percentile on the SAT Math exam, and the 93rd percentile on an SAT reading exam.
Ethereum’s Shapella upgrade set to go live today April 12; to unlock access to over $30 billion in digital tokens
The highly anticipated Ethereum’s Shapella upgrade is finally here. Ethereum, the blockchain that underpins the world’s second-largest crypto token ether, is set to undergo its next major update since the network switched from proof-of-work to proof-of-stake through The Merge last September.
The scheduled Shapella upgrade combines the Shanghai and Capella validator changes, is expected to take place today Wednesday, April 12, 2023. While most Ethereum users may not be impacted by the change, the upgrade will unlock access to more than $30 billion of the digital tokens.
The hard fork will allow staking validators to withdraw their staked Ethereum. Shapella upgrade will also enable crypto investors to redeem their staked ether” tokens that they have deposited in return for interest on the blockchain network over the past three years. According to data firm Dune Analytics, The staked tokens currently account for about 15% of all ether tokens and are worth some $31 billion.
According to a tweet by Tim Beiko of the Ethereum Foundation, the upgrade is due today at around 2230 GMT.
“After a smooth Goerli transition, client teams have scheduled the Shapella upgrade for mainnet activation,” the Ethereum Foundation detailed on March 28, 2023. “Consensus was quickly reached on an April 12th date during the 157th All Core Devs Execution Layer meeting. This upgrade follows The Merge and enables validators to withdraw their stake from the Beacon chain back to the execution layer. It also introduces new functionality to both the execution and consensus layer.”
Open source startup NetBox Labs raises $20 million in funding after spinning out of IBM-acquisition NS1
In February, IBM acquired network automation SaaS solutions NS1 for an undisclosed sum, making it IBM’s second acquisition of 2023. As part of the acquisition agreement, IBM said that NetBox Labs will spin out from NS1 into its own company, with IBM also becoming an investor in the startup.
Fast forward almost two months later, NetBox Labs announced Tuesday that it raised $20 million in Series A funding to help build and manage complex networks. The round was led by Flybridge Capital, with participation from GGV Capital, Grafana Labs CEO Raj Dutt, Mango Capital, Salesforce Ventures, Two Sigma Ventures, IBM, the Founder Collective, and Entrée Capital.
As part of the funding, NetBox Labs also announced that David Aronoff of Flybridge, Raj Dutt of Grafana Labs, and Glenn Solomon of GGV Capital will join its board of directors.
The Series A cash infusion will enable NetBox Labs to scale the development and delivery of open-source NetBox and NetBox Cloud, a hosted NetBox solution with specific performance and service level agreements and commercial support. NetBox Labs’ customers include Chewy, Dartmouth College, and Constant Contact, which are already using NetBox Cloud as a network source of truth to drive their network automation strategy.
Commenting on the funding, David Aronoff, general partner at Flybridge, said: “Once in a decade you have the opportunity to support an organization and leadership team that has proven its ability to win previously and whose technology has widespread customer adoption before even raising Series A funding. NetBox Labs is such a company. We believe NetBox’s role as a network source of truth is critical to the future of network automation and will fundamentally change the industry.”
At the helm of NetBox Labs is Kris Beevers, former CEO of NS1, who is leading NetBox Labs as co-founder and chief executive officer, with NetBox Lead Maintainer Jeremy Stretch also serving as a co-founder. Former NS1 executives in finance, operations, technology, product, and business development, as well as more than a dozen dedicated team members, round out the NetBox Labs staff. The company will be headquartered in New York City with a global, remote workforce.
NetBox Labs also helps customers accelerate network automation by delivering open, composable products and supporting the network automation community.
Data-as-a-Service (DaaS) startup Cybersyn emerged from stealth today with a $62.9M Series A round led by Snowflake and including participation from Coatue and Sequoia Capital. The New York-based Cybersyn was founded by Alex Izydorczyk, who was the former head of data science at Coatue.
Cybersyn will use the fresh capital infusion to grow its eight-person team and acquire more proprietary data to create derived products that are useful for market intelligence, investment, and policy decisions.
In conjunction with the funding, Cybersyn also announced that Mike Scarpelli, Chief Financial Officer of Snowflake, Christian Kleinerman, Senior Vice President of Product at Snowflake, and Thomas Laffont, Co-founder and Senior Managing Director of Coatue, have all joined its board of directors.
Izydorczk, who brings a wealth of knowledge as the former head of data science at the investment firm Coatue, started Cybersyn in 2022 to make the world’s economic data transparent to governments, businesses, and entrepreneurs and enable a new generation of decision-makers.
“We’re not trying to just be a data broker. We’re trying to actually add value to the data we acquire and combine it,” Izydorczyk said. Unlike the current data brokers on the market, Cybersyn aims to sell augmented economic datasets to investors, governments, and other corporate clients.
Snowflake Marketplace currently allows users to access third-party data and pay for specific datasets, and combine it with their own corporate data using its platform. The company now has more than 1,800 dataset listings.
Bankrupt crypto exchange FTX has recovered more than $7.3 billion in both cash and crypto assets. In addition, the total is more than $800 million since January, Reuters reported, citing the company’s attorney’s statement at a bankruptcy court hearing today.
The news comes on the heels of another report that the company is also considering relaunching the crypto exchange in Q2, FTX attorney Andy Dietderich said at Wednesday’s US Bankruptcy court hearing.
According to Dietderich, the company has begun contemplating its future following several months of dedicated efforts towards resource gathering and examining the past leadership of its disgraced founder, Sam Bankman-Fried, who has been indicted but pleaded not guilty.
“The situation has stabilized, and the dumpster fire is out,” Dietderich said.
Dietderich also added that FTX has benefited from a recent rise in crypto prices. For example, “its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal,” Reuters reported.
FTX’s new CEO John Ray has detailed improper fund transfers and poor accounting at the collapsed crypto exchange, describing it as a “complete failure” of controls.
He also did not provide any specifics on what the relaunch might mean for existing FTX customers who have still not been able to withdraw their crypto deposits during the bankruptcy case.
So far, only FTX customers in Japan have been able to withdraw any funds so far, because of that country’s relatively strong crypto regulations, Dietderich said.
He also added that FTX would need significant capital to restart the crypto exchange because “the existing customer interface had little connection to the movement of money behind the scenes.”
“The app worked beautifully, but in truth it was a facade,” Dietderich said.
Late last year, the 30-year-old FTX founder Bankman-Fried was indicted on eight-count federal criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York.