2U / edX Deals with Financial Distress, Although It Might Avoid Bankruptcy

2U, owner of edX.org, is running out of cash and is facing an existential change in 2024, wrote educational analyst Phil Hill in a report issued after the company's long-time CEO and Co-Founder, Christopher "Chip" Paucek, stepped down and was replaced by the existing CFO, Paul Lalljie [in the picture]. "There is no apparent way for 2U to meet its debt obligations by 2025," Phil Hill stated. "The company will likely survive, but it will undergo some significant changes from bankruptcy, from selling off assets, from additional layoffs, or more likely from some combination." 2U market capitalization was $107 million yesterday. In the last year, the company lost 79.32% of its stock value. Debt holders now control $980 million. "Bankruptcy is increasingly likely. 2U could pursue a structured bankruptcy in 2024 to alleviate its debt obligations while continuing to operate the company. Keep in mind that we have seen EdTech companies successfully manage bankruptcy, such as Cengage from 2013 / 14. There are signs that the markets already understand 2U’s situation." The probability of bankruptcy is over 58%, according to an analysis mentioned by Phill Hill. • "The basic issue at hand is that 2U holds nearly $1 billion of debt with a significant portion ($380 million minimum) that must be paid off in early 2025, and the company does not have the cash or ability to generate profits to be able to cover the debt maturity." • "2U had roughly $41 million in cash & equivalents as of September 30th, and it generated roughly $32 million in cash (adjusted unlevered free cash flow) in the past 12 months – that level of operations is not going to work." • "2U’s 'portfolio management' efforts to 'transition out of certain degree programs' are also intended to generate short-term cash, mostly to deal with the debt problem. But the combination of cash and likely cash flow (augmented by portfolio management) is in the neighborhood of $150 million, not nearly enough to handle the debt obligations. This means that the only way 2U survives is if it can renegotiate or refinance the debt." . • US Today: Education company 2U and leader Chip Paucek part ways after high-profile USC partnership ends • IBL News: 2U and USC Terminated Its Partnership for Developing Online Degree Programs

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Google Makes 'Gemini Pro' Available to Developers and Enterprises

Google announced yesterday that it was making its new AI model, Gemini Pro, available to developers and enterprises. It has been released via the Gemini API, and it's free for now. SDKs are also available for Gemini Pro to help to build apps. Last week, Google started to roll out Gemini, which comes in three sizes: Ultra, Pro, and Nano. "The faster way to build with Gemini is with Google AI Studio, a free, web-based developer tool that enables you users to develop prompts and then get an API key to use in their app development," said the company. Google intends that users migrate from AI Studio to Vertex AI. Early next year, the company plans to launch Gemini Ultra, its largest and most capable model for complex tasks. Yesterday, Google announced that Duet AI for Developers will be launched in Q1 of 2024. It will compete with GitHub GPT-based Copilot. Google's partners adding support for coding with Duet AI for Developers include Confluent, Elastic, Grafana Labs, Hashicopr, MongoDB, Neo4j, Pinecone, Redis, and SingleStore. In addition, Google Cloud’s image-generation capabilities have been upgraded with Imagen 2. This feature is now generally available for Vertex AI customers on the allowlist. .    

IBM, Meta, and 40 Top Organizations Create the 'AI Alliance' to Develop Open Source Technology

IBM, Meta, and over 40 companies and organizations are creating the AI Alliance, an industry and academic group dedicated to open-source AI technology. This coalition said in a statement that it will focus on the responsible development of AI technology, including safety and security tools. AI Alliance will look to increase the number of open-source models rather than the proprietary systems favored by companies such as OpenAI, Google, Anthropic, and Microsoft. It will also develop new hardware and team up with academic researchers. The AI Alliance consists of a broad range of organizations that are working across aspects of AI education, research, development and deployment, and governance. Among them, there are creators of some of today’s most used open models including Llama2, Stable Diffusion, StarCoder, Bloom, as well as application developers like MLPerf, Hugging Face, LangChain, LlamaIndex, and other open-source AI toolkits will participate. Frameworks that drive platform software, including PyTorch, Transformers, Diffusers, Kubernetes, Ray, Hugging Face Text generation inference, and Parameter Efficient Fine Tuning, joined the initiative. Partners and collaborators include: Agency for Science, Technology and Research (A*STAR) Aitomatic AMD Anyscale Cerebras CERN Cleveland Clinic Cornell University Dartmouth Dell Technologies Ecole Polytechnique Federale de Lausanne ETH Zurich Fast.ai Fenrir, Inc. FPT Software Hebrew University of Jerusalem Hugging Face IBM Abdus Salam International Centre for Theoretical Physics (ICTP) Imperial College London Indian Institute of Technology Bombay Institute for Computer Science, Artificial Intelligence Intel Keio University LangChain LlamaIndex Linux Foundation Mass Open Cloud (MOC) Alliance, operated by Boston University and Harvard Meta Mohamed bin Zayed University of Artificial Intelligence MLCommons National Aeronautics and Space Administration (NASA) National Science Foundation (NSF) New York University NumFOCUS OpenTeams Oracle Partnership on AI Quansight Red Hat Rensselaer Polytechnic Institute Roadzen Sakana AI SB Intuitions ServiceNow Silo AI Simons Foundation Sony Group Stability AI Together AI TU Munich UC Berkeley College of Computing, Data Science, and Society University of Illinois Urbana-Champaign The University of Notre Dame The University of Texas at Austin The University of Tokyo Yale University In addition to bringing together leading developers, scientists, academics, students, and business leaders in the field of artificial intelligence, the AI Alliance will plan to partner with initiatives from governments, non-profit and civil society organizations working in the AI space.

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Google's Promotional Video of Gemini Was Fabricated

Google's main Gemini AI demo video released — see it below — last week was fabricated, misrepresenting the model's capabilities. The company admitted it in a report issued by Bloomberg. "Google's video made it look like you could show different things to Gemini Ultra in real time and talk to it. You can't," Bloomberg's reported wrote in a tweet. Google researchers interacted with Gemini through text, not voice, then picked the best interactions and edited them together with voice synthesis to make the video. As a result, the Internet giant is now facing controversy among AI experts. Running still images and text through LLM is computationally intensive and makes real-time video largely impractical. That was one of the clues that led experts to detect that the video was misleading. As Ars Technica reports, "OpenAI has embarrassed Google in generative AI over the last year." On December 6th, Gemini was introduced as the first true rival to OpenAI's GPT-4. The stock of the company went up 5% amidst comments about Google's model "sophisticated reasoning capabilities," supported by multiple benchmarks. The contested video, titled "Hands-on with Gemini: Interacting with multimodal AI," shows that the AI model sees, accompanied by the AI model's responses on the right side of the screen. The viewer hears a voice, apparently of Gemini Ultra, responding to the questions. Additionally, on the next day, TechCrunch reported that users were very disappointed with Gemini Pro's performance on Bard. ArsTechnica's tests showed that Google's AI system improved in the eight months but "ChatGPT is still the winner". . That demo was incredibly edited to suggest that Gemini is far more capable that it is. You’ve been deceived, Chris. And shame on them for so doing. — Grady Booch (@Grady_Booch) December 7, 2023

What Happened at OpenAI: Board Members Believed that Altman Was Dishonest

Before firing Sam Altman on November 17, Ilya Sutskever, the chief scientist of OpenAI, and three board members had been whispering behind his back for months, The New York Times revealed in an insightful story this Saturday. They believed Sam Altman had been dishonest and should no longer lead the company. They were worried that ChatGPT’s success was antithetical to creating safe AI. In September, Altman met investors in the Middle East to discuss an AI chip project. The board was concerned that he wasn’t sharing all his plans with it. He also believed that Mr. Altman was bad-mouthing the board to OpenAI executives. Other employees have also complained to the board about Mr. Altman’s behavior. The ouster was the culmination of years of tensions and divisions at OpenAI. Microsoft, which had committed $13 billion to OpenAI, weighed in to protect its investment. Many top Silicon Valley executives and investors, including the CEO of Airbnb, also mobilized to support Altman. From his $27 million mansion in San Francisco’s Russian Hill neighborhood, Sam Altman, driven by a hunger for power more than by money, lobbied through social media and voice their displeasure in private text threads, according to the NYT, who interviewed more than 25 people with knowledge of the events. On Nov. 21, Sam Altman returned as CEO of OpenAI. The San Francisco OpenAI lab was founded by Elon Musk, Sam Altman, Ilya Sutskever, and nine others. Its goal was to build AI systems to benefit all of humanity. Unlike most tech start-ups, it was established as a nonprofit with a board that was responsible for making sure it fulfilled that mission.