Good morning, it’s Thursday. Y Combinator’s CEO says "vibe coding" is letting tiny teams rake in millions, DeepMind’s chief predicts AGI will outsmart us within 5 years (gulp), and NVIDIA and xAI are diving into a $30B AI fund like it’s pocket change.

Plus, in today’s Forward Future Original, we break down AI’s billion-dollar costs—from training and infrastructure to data and operations.

Read on!

📊 MARKET PULSE

Tencent’s Q4 Earnings Surge 11%, Fueling AI Investment Ambitions

Tencent Holdings reported an 11% year-over-year increase in Q4 2024 revenue, hitting 172.4 billion yuan ($23.83 billion) and surpassing analyst expectations. This impressive performance is primarily driven by a significant rebound in Tencent’s gaming sector and a 17% growth in marketing services revenue. Looking forward, Tencent is significantly ramping up its AI investments… → Continue reading here.

🗞️ YOUR DAILY ROLLUP

Top Stories of the Day

💰 NVIDIA, xAI Join $30B AI Infrastructure Fund
NVIDIA and Elon Musk’s xAI have joined a $30 billion AI infrastructure fund backed by BlackRock, Microsoft, and Abu Dhabi’s MGX, aiming to raise $100 billion. NVIDIA CEO Jensen Huang said AI factories built on NVIDIA’s full-stack infrastructure will drive breakthroughs across industries. Huang noted the growing computational demands of reasoning models, needing 100 times more power than LLMs.

🚘 NVIDIA, GM, and Gatik Boost Self-Driving Tech
NVIDIA announced partnerships with GM, Gatik, Torc, and Plus to accelerate autonomous vehicle development using its Drive AGX, Drive Thor, and Omniverse platforms. GM will use Omniverse to create digital twins of factories and Drive AGX for future self-driving systems. Gatik plans to integrate Drive Thor for its Level 4 autonomous trucks serving Walmart and Kroger.

📱 Hugging Face's AI App Describes What You See
Hugging Face has launched HuggingSnap, an iOS app that uses local AI to describe what’s in your iPhone’s camera view in real-time. Powered by the smolvlm2 vision model, the app can identify objects, explain scenes, and read text—all without sending data to the cloud. Unlike similar apps, HuggingSnap works offline, ensuring privacy and energy efficiency.

🤖 NVIDIA, DeepMind to Power Disney’s Cute Robots
NVIDIA and Google DeepMind are teaming up with Disney Research to develop Newton, a physics engine designed to simulate real-world robotic movements. Disney plans to use Newton to power next-gen entertainment robots, including Star Wars-inspired BDX droids, which will debut in theme parks next year. Newton will integrate with DeepMind's MuJoCo engine, helping robots handle tasks better.

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📟 CODING

Vibe Coding: How AI Is Revolutionizing Startup Success

The Recap: Y Combinator CEO Garry Tan says "vibe coding" — using AI to generate code from natural language instructions — is helping startups reach million-dollar revenues with ultra-lean teams. Tan believes this shift is rewriting the early-stage startup playbook, making it possible for small teams to achieve unprecedented growth.

Highlights:

• Startups are hitting $1M–$10M in annual revenue with fewer than 10 employees, thanks to AI-driven coding

• OpenAI’s Andrej Karpathy introduced the term "vibe coding," describing it as coding by "embracing the vibes" — talking to an LLM and letting it handle most of the work

• Tan highlighted that developers can simply describe their goals to an LLM, which then generates most of the code — drastically reducing development time and costs

• While AI generates code, it struggles with debugging — human developers still need to figure out what the code is actually doing

• Faster development cycles mean even niche markets can support substantial businesses, which was previously unfeasible

• Vibe coding opens opportunities for engineers who can't secure Big Tech jobs, enabling them to build standalone businesses

Forward Future Takeaways:
Vibe coding could democratize software development, making it possible for small teams to compete with industry giants. However, the reliance on AI for coding raises concerns about long-term technical understanding and debugging skills. The rise of AI-driven coding may reshape both startup economics and the job market, creating new opportunities while shifting the skill sets developers need to succeed. → Read the full article here.

🙋 POLL

👾 FORWARD FUTURE ORIGINAL [EXCLUSIVE]

The Cost of AI: Breakdown of Investments in Training, Infrastructure and More

In recent years, artificial intelligence has not only achieved technological breakthroughs, but has also attracted massive financial investment. The development of powerful AI systems such as ChatGPT, Claude or Gemini has fundamentally changed the public perception of this technology. However, while the discussion often revolves around ethical issues, social impact or technical milestones, one key aspect is often ignored: the enormous costs associated with the development and operation of modern AI systems.

The financial dimensions of AI development are impressive. OpenAI is said to have spent more than 540 million dollars on training GPT-4 alone. Google has invested billions in its AI infrastructure. Anthropic has completed financing rounds worth billions of dollars, a significant proportion of which flows directly into the development and training of its AI models. xAI, on the other hand, has spent 3-4 billion dollars on the hardware for its supercluster alone. Not to mention Project Stargate, whose investment volume is estimated at $500B. → Continue reading here.

🧑‍🏫 PRO

What Are Reasoners? How and When to Put Them to Work

AI can generate text, but can it truly think? That’s where reasoners come in. Unlike generative AI models like GPT-4o or Claude 3.5, which predict words based on patterns, reasoners are designed to draw logical conclusions, recognize relationships, and make structured decisions—more like human critical thinking.

Inspired by Daniel Kahneman’s System 2 thinking (slow, deliberate reasoning), these AI models break problems down step by step, ensuring logical consistency instead of just making the most statistically likely guess.→ Premium subscribers continue reading here.

🧠 AGI

Google DeepMind CEO Says AI Will Outthink Humans in Just 5 Years

The Recap: Demis Hassabis, CEO of Google DeepMind, predicts that artificial general intelligence (AGI) will match or surpass human intelligence within five to ten years. This shift could drastically alter the workforce, as AI is already beginning to replace human roles in major companies like Klarna and Workday.

Highlights:

• Hassabis believes AI will “exhibit all the complicated capabilities humans can” within 5 to 10 years

• Companies like Klarna and Workday are already reducing human staff and relying on AI for marketing, legal work, and customer service

• Klarna’s chatbot handles the work of 700 human agents, resolving customer queries nine minutes faster than human staff

• Workday cut 1,750 jobs (8.5% of its workforce) to shift resources toward AI development

• Salesforce CEO Marc Benioff said current business leaders will be the last to manage all-human workforces

• Robin Li (Baidu CEO) thinks AGI is more than 10 years away, while Elon Musk and Sam Altman expect it even sooner than Hassabis

• 41% of bosses expect to cut jobs within five years due to AI-driven efficiency gains

Forward Future Takeaways:
If Hassabis’s timeline holds, AI could overhaul the workforce by 2030, making "digital colleagues" the norm. This rapid shift will force companies and workers to adapt to a hybrid human-AI labor market—and possibly redefine the concept of employment itself. → Read the full article here.

🛰️ NEWS

What Else is Happening

🖼️ xAI Adds Image Generation: xAI's new API generates up to 10 images per request at $0.07 each, aiming to boost revenue.

🤖 Deloitte Unveils Zora AI: Deloitte’s new AI agents handle complex business tasks, boosting productivity and cutting costs by up to 25%.

🎬 De Niro on AI in Hollywood: Robert De Niro says AI has Hollywood uneasy, but insists real people are the "heart and soul" of cinema.

🤝 IBM Teams with NVIDIA on AI: IBM and NVIDIA are partnering to boost AI performance with new storage, watsonx integration, and enhanced cloud compute.

🔐 AI Watermarking with Cryptography: New cryptographic watermarks could verify AI-generated content by embedding signatures, even after edits.

📽️ VIDEO

Intelligence Explosion Is Near

Sakana AI’s Scientist V2 generated its first peer-reviewed paper, passing human-level review at the ICLR Workshop. The AI handled the entire research process, showing promising signs of self-improving intelligence despite some mistakes. Get the full scoop in Matt’s latest video! 👇

🤠 THE DAILY BYTE

Milo the Robo-Dog Tackles the 'Last Mile'—No Treats Required

That’s a Wrap!

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The Forward Future Team

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