Three Things (3/27)

Apple and AI

Apple is planning to unveil its long awaited artificial intelligence strategy during its developer conference on June 10th. Apple’s approach to AI should include various features to assist with a users daily life. The company isn’t planning to debut its own generative AI chatbot, though, as the company continues conversations with Google, OpenAI, and Baidu to own the underlying generative AI services.

Although Apple has been getting some flack recently for its slow and steady approach to artificial intelligence, the most coveted real estate in the world is still the iPhone. The iOS 18 update is expected to be the most ambitious overhaul of the iPhone’s software in its history so the expectations for what’s next are high. Whether they build or partner (for a pretty penny, no doubt) will likely set the stage for the next cycle of innovation moving forward.

FTX is back in the news

Bankrupt cryptocurrency exchange FTX is back in the news striking nearly $900 million in deals with several dozen buyers to sell most of its shares in Anthropic, one of the challengers to OpenAI. FTX invested $500 million in Anthropic in 2021 and holds a stake of about 7.8% in the company. Buyers include ATIC Third International Investment, Jane Street Global Trading, and certain funds affiliated with Fidelity Investments.

The aforementioned investors join a laundry list of who’s who on the cap table: Google, Amazon, and Salesforce, among others. Given the forced liquidation of illiquid securities, the shares were likely traded at a bit of a discount to fair value but highlight the rapid appreciation and excitement surrounding the company and AI. We can only guess, but we have to assume there were plenty of investors clamoring for a piece of the pie – pure play AI companies are hard to come by and Anthropic sits squarely in the middle of the latest hype cycle.

The Krispy McDonut

Krispy Kreme and McDonald’s announced plans to offer the signature donut at all of McDonald’s US locations by the end of 2026. Krispy Kreme Chief Executive Josh Charlesworth said the partnership will essentially double the company’s distribution when it’s fully rolled out. The market cheered the announcement as shares of the donut maker jumped more than 39% on Tuesday.

The deal is a boon for Krispy Kreme, which has been working to expand its distribution without driving up supply-chain costs. With McDonald’s global footprint, this could be Krispy Kreme’s low cost expansion into international markets as well. With an appeal beyond breakfast, this could be a win-win for both companies looking to increase traffic and distribution across the globe.

Disclosures:

As of writing, GOOGL, AAPL, AMZN, and MSFT are holdings in Titan’s Flagship strategy. Anthropic is a 8.84% holding in the ARK Venture Fund.

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