Every week day, Forbes India tech briefings will bring you essential tech news from around the world that has a bearing on India—covering everything from big tech to the subcontinent's growing tech startup ecosystem
Budget expectations: What India’s tech startups and VC investors are asking
As India’s Finance Minister Nirmala Sitharaman presents the country’s budget today for the coming fiscal year that starts April 1, expectations are high on all fronts, especially as India is widely seen as the one major economy that will grow strongly during a period when the global economy is expected to slow down. Here’s what some of India’s tech startups and VC investors have on their wish list for the budget.
IMF revises 2023 growth upward; Apple working on a foldable iPad – report; ChatGPT can fix software bugs
The International Monetary Fund yesterday revised upward its global growth projections for the year, after better-than-expected data on spending by American households and businesses, and in other countries, and Europe’s handling of its energy crisis, CNBC reports. Also in this report, pet fish apparently changed their owner’s Nintendo username, downloaded a new avatar, set up a PayPal account and even charged his credit card, CNN reports. And, after getting an MBA, ChatGPT is now fixing software bugs.
The International Monetary Fund yesterday revised upward its global growth projections for the year, after better-than-expected data on spending by American households and businesses, and in other countries, and Europe’s handling of its energy crisis, CNBC reports.
The fund warned that higher interest rates and Russia’s invasion of Ukraine were still reasons for worry.
In its latest economic update, the IMF said the global economy will grow 2.9 percent this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4 percent in 2022.
It also revised its projection for 2024 down to 3.1 percent.
“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.
Apple is working on a foldable iPad for 2024, CNBC reported yesterday, citing well-known Apple watcher Ming-Chi Kuo. The analyst had previously predicted a foldable iPhone for 2024.
Facebook can secretly drain its users’ cellphone batteries, a former employee contends in a lawsuit, New York Post reports.
The practice, known as “negative testing,” allows tech companies to “surreptitiously” run down a phone’s battery in the name of testing features or issues such as how fast their app runs or how an image might load, according to data scientist George Hayward, the New York Post reports.
Hayward said in a Manhattan Federal Court lawsuit that he was fired in November for refusing to participate in negative testing. The lawsuit, which sought unspecified damages, has since been withdrawn because Hayward is required to go to arbitration, according to New York Post.
Computer science researchers from Johannes Gutenberg University and University College London, have found that ChatGPT can fix bugs in software code quite well. In fact, it can outperform existing bug-fixing programs, because of its ability to ask for more information and learn from that.
Mercedes-Benz says it is the world's first automotive company to introduce SAE Level-3 conditionally automated driving. SAE previously for the Society of Automotive Engineers, an organisation developing automotive standards in the US. It is not called SAE International. And Level-3 autonomy refers to a stage where the car can take over certain driving functions although the driver is expected to be always ready to take back control.
Pet fish playing a video game in Japan managed to log on to the Nintendo Switch store, change their owner’s avatar, set up a Pay Pal account and rack up a credit card bill, CNN reports.
And it was all live-streamed on the internet.
Google should sell ad manager suite – US; Startup funding in India fell 38 pct in 2022; Indian SaaS projected at $35 bln in 2027
The US Justice Department yesterday accused Google of abusing its dominance in digital advertising, and said the internet giant should be forced to sell its ad manager suite, Reuters reports. Venture capital funding of startups fell more than 38 percent in 2022 versus 2021, GlobalData finds. Indian software-as-a-service companies, however, were a relative bright spot, according to a separate report, by Bain & Company, a consultancy, which estimates the sector is maturing and will continue to grow. And Pune startup Ecozen has raised $25 million in equity funding and loans.
The US Justice Department yesterday accused Google of abusing its dominance in digital advertising, and said the internet giant should be forced to sell its ad manager suite, Reuters reports.
That business generated about 12 percent of Google's revenues in 2021 but also plays a vital role in the search engine and cloud company's overall sales, according to Reuters.
"Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies," the antitrust complaint said. Google’s advertising business is responsible for about 80 percent of its revenue.
In the world of startups, as concerns about global economic slowdown took hold, venture capital investments in India fell 38.2 percent in 2022 versus 2021, according to GlobalData.
An analysis of GlobalData’s financial deals database reveals that a total of 1,726 VC funding deals worth $20.9 billion were announced in India in 2022. The number of deals in 2021 was about the same, at 1,715, but the amount of funding was much higher, at $33.8 billion.
Meanwhile, India’s Software as a Service (SaaS) ventures are a relatively bright spot, according to Bain & Company, a multinational consultancy. Indian SaaS companies are poised to command 8 percent of the global SaaS market, generating $35 billion in annual recurring revenue (ARR) by 2027, growing at 20–25 percent per annum, Bain concludes in a new report that was released yesterday.
“We are now seeing the emergence of a set of Indian SaaS companies who have a right to win not just in India, but globally, Arpan Sheth, a partner at Bain, and co-author of the report.
The outlook for Indian SaaS investment remains broadly positive over the next 12 months, with ~90 percent of Indian SaaS investors expecting to increase or maintain their capital allocation to SaaS.
Ecozen, a cold-chain tech startup, has raised $25 million in equity and debt funding, the Pune company said in a press release. The Series C equity portion was led by Nuveen and Dare Ventures, with participation from the Export-Import Bank of India, and existing investors Caspian and Hivos-Triodos Fonds.
Omnivore and IFA, early investors in Ecozen, took partial exits in this round. Ecozen was founded by three IIT Kharagpur alumni, Devendra Gupta, Prateek Singhal and Vivek Pandey. They sell solutions for motor controls, IoT, and energy storage focused on cold chains and irrigation for the agri sector.
Amazon launches air cargo service in India; Salesforce in Elliott’s crosshairs – report; Log9 raises $40 mln
Amazon has launched Amazon Air, its dedicated air cargo fleet in India, partnering with Quickjet, the ecommerce giant said in a press release yesterday. It will start with Delhi, Mumbai, Hyderabad and Bengaluru. Activist investor Elliott Management’s next target is Salesforce, Wall Street Journal reports. Also in this brief, Microsoft invests more money in OpenAI, and GPT3, the AI chatbot, just passed an MBA exam at the prestigious Wharton School, NBC News reports.
Amazon has launched Amazon Air, its dedicated air cargo fleet, in India the e-commerce giant said in a press release yesterday.
Amazon has partnered with Bengaluru-based cargo airline Quikjet to launch this service, which it said will speed up its deliveries. Amazon, using Boeing 737-800 for the service, will initially use Amazon Air to deliver goods in Delhi, Mumbai, Hyderabad and Bengaluru.
Microsoft yesterday announced in a post what it called the third phase of its long-term partnership with OpenAI through a multi-year, multi-billion-dollar investment.
This agreement follows Microsoft’s previous investments in 2019 and 2021, extending the ongoing collaboration in AI supercomputing and research. The two companies can independently commercialize the resulting advanced AI technologies, according to the post.
Microsoft didn’t say how much it was investing, but the figure could be $10 billion according to Semafor.
Meanwhile, new research conducted by a professor at the University of Pennsylvania’s Wharton School found that the AI chatbot GPT3 was able to pass the final exam for the school's MBA program, NBC News reported earlier today.
Professor Christian Terwiesch, who authored the research paper "Would Chat GPT3 Get a Wharton MBA? A Prediction Based on Its Performance in the Operations Management Course," said that the bot scored between a B- and B on the exam, according to NBC News.
Activist investor Elliott Management Corp. has made a multi-billion-dollar investment in Salesforce, adding to the pressures facing the business-software provider that has just announced a 10 percent reduction of its workforce, Wall Street Journal reported yesterday, citing people familiar with the matter.
Back in India, in some computer hardware news, Rashi Peripherals, a Mumbai-based distributor of computers and computer peripherals, is seeking to raise Rs. 750 crore in an IPO, according to a press release.
Log9, a battery technologies startup in Bengaluru, has raised $40 million as a part of its Series B funding, the company said in a press release yesterday. The investment comprises equity funding and loans, led by Amara Raja Batteries and Petronas Ventures.
Several other investors also participated.
Founded in 2015 by Akshay Singhal, Kartik Hajela and Pankaj Sharma, Log9 says it has in-house competencies ranging from electrode materials to cell fabrication to battery packs.
The new investment will help Log9 raise its manufacturing capacity to 2 GWh by the end of 2024, and commission India's first fully integrated lithium-ion cell production line, Singhal said in the press release. The company will also invest about $12 million in developing its cell and battery technologies.
India’s Supreme Court rejects Google’s appeal to block Competition Commission order; PhonePe raises $350 mln
India’s Supreme Court yesterday rejected Google’s ask that an order by the Competition Commission imposing a fine and changes to its market practices with respect to Android software be stayed. Google had approached the top court after the National Company Law Appellate Tribunal, earlier this month, had refused to stay the Competition Commission’s order while it heard the matter. Also in this brief, TCS wins an order from Bombardier. And PhonePe is now privately valued at $12 billion, after a new investment from General Atlantic.
India’s Supreme Court yesterday rejected Google’s ask that an order by the Competition Commission imposing a fine and changes to its market practices be stayed.
Google had approached the top court after the National Company Law Appellate Tribunal, earlier this month, had refused to stay the Competition Commission’s order while it heard the matter.
The Competition Commission of India, on Oct. 20, imposed a penalty of Rs. 1337.76 crore ($162 million) on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing a cease-and-desist order.
The value of the fine is provisional and based on data including Google’s revenue in the Indian market, the Competition Commission said in its statement. However, the fine is a landmark decision that puts India alongside the EU in finding that Google has consistently tried and succeeded in eliminating competition using its market dominance.
The Commission, which has been investigating Google’s market practices since 2019, also directed Google to modify its conduct within a defined timeline, according to a statement on the competition authority’s website.
The Commission found that Google enforced multiple restrictive agreements with mobile device manufacturers that “guaranteed that distribution channels for competing search services are altogether eliminated by prohibiting OEMs from offering devices based on Android forks.”
The Competition Commission had also ordered Google to comply with 10 different measures. Among them, Google must ensure that OEMs are not restricted from developing and selling their version of Android on their devices. And Google must ensure that consumers are easily able to uninstall its pre-installed proprietary app.
With respect to yesterday’s Supreme Court order, “This is a landmark decision in the history of competition law jurisprudence in India and globally,” Naval Chopra, a partner specialising in competition law practice at Shardul Amarchand Mangaldas, a prominent Indian law firm, said in an email.
The National Company Law Appellate Tribunal is set to hear arguments from Google and the CCI on February 13, before it makes a final decision on the Commission’s order.
Tata Consultancy Services has won an order from aircraft and defence manufacturer Bombardier, to upgrade its IT systems using SAP’s business operations management software. The company didn’t provide details on the value of the contract. TCS will modernize the aviation company’s systems that support its engineering, manufacturing, aftermarket services and defence activities.
PhonePe, a fintech company in Bengaluru owned by Walmart’s Flipkart, has raised $350 million in funding from private equity company General Atlantic.
The deal was struck at a pre-money valuation of $12 billion, PhonePe said yesterday in a press release
GoMechanic, Sequoia-backed venture, to cut 70% staff, after SoftBank walks away over irregularities
GoMechanic, a car service startup backed by VC investors including Sequoia Capital, Tiger Global Management and Chiratae, will cut 70 percent of its staff and undergo an independent audit of its books, the company’s co-founder Amit Bhasin said in a post on LinkedIn yesterday. Also in this brief, Microsoft yesterday confirmed the 10,000 job cuts that had previously been reported in the news, and a TIME investigation reveals how OpenAI used lowly paid workers in Kenya to remove toxic content from ChatGPT.
GoMechanic, a car service startup backed by VC investors including Sequoia Capital, Tiger Global Management and Chiratae, will cut 70 percent of its staff and undergo an independent audit of its books, the company’s co-founder Amit Bhasin said in a post on LinkedIn yesterday.
Due diligence conducted by accounting firm EY for prospective GoMechanic investors, SoftBank Group and Malaysian sovereign fund Khazanah Nasional, alleged that the Gurugram-based venture had inflated revenue, Bloomberg reported yesterday, citing people familiar with the matter.
EY’s research alleged that about 60 of the more than 1,000 GoMechanic service centres may have violated accounting rules to overstate revenue and divert funds, according to Bloomberg.
GoMechanic was in talks to raise $100 million in a funding round led by Khazanah, Bloomberg had previously reported. SoftBank and Khazanah called off the talks and informed Sequoia, according to Bloomberg.
“We got carried away … we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” Bhasin said in his LinkedIn post. The company will be restructured while the founders look for more funding, he added.
Microsoft, yesterday, confirmed it was cutting about 5 percent of its workforce, affecting 10,000 people around the world. Sky News had reported the news previously.
“We are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today,” CEO Satya Nadella said in a note that was posted on the company’s website.
ChatGPT is being hailed as revolutionary in the world of AI for its ability to turn out human-like creative content. However, in its quest to make ChatGPT less toxic, its maker, OpenAI, used outsourced Kenyan labourers earning less than $2 per hour, a TIME magazine investigation has found.
OpenAI’s outsourcing partner in Kenya was Sama, a San Francisco-based firm that employs workers in Kenya, Uganda and India to label data for Silicon Valley clients like Google, Meta and Microsoft, TIME says in its report that was published yesterday.
Sama markets itself as an “ethical AI” company and claims to have helped lift more than 50,000 people out of poverty, according to TIME.
The data labellers employed by Sama on behalf of OpenAI were paid a take-home wage of between around $1.32 and $2 per hour depending on seniority and performance. For this story, TIME reviewed hundreds of pages of internal Sama and OpenAI documents, including workers’ payslips, and interviewed four Sama employees who worked on the project. All the employees spoke on condition of anonymity out of concern for their livelihoods, according to TIME.