Business news update for Monday, August 11th
capitalcurrentsdaily.substack.com
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Let's run through some headlines. Starting with Tesla. Tesla announced that they're pulling the plug on its Dojo supercomputer program, which is a project that Elon Musk once hyped as the crown jewel of Tesla's AI ambitions. The Dojo supercomputer was Tesla's own custom-built computer for training AI. It was designed from the ground up, made specifically to process the massive amounts of video data from Tesla's cars. That data helped improve autopilot, full self-driving, and even the Optimus humanoid robot.
Morgan Stanley saw this as a key competitive advantage for Tesla, predicting that it would add \$500 billion to Tesla's market cap. But now that's all over. The Dojo team is being disbanded, and the guy who was leading the team, Peter Bannon, is leaving Tesla. The rest of the crew is getting reassigned. You know, before all this was even happening, the Dojo team was losing engineers. About 20 Dojo engineers recently left Tesla to start their own AI company called Density AI.
Now let's stick with the AI theme and talk about OpenAI, because they launched their latest AI model on Friday called GPT-5.
OpenAI is trying to improve their user experience by getting rid of all the old models in the dropdown menu and letting GPT-5 decide which model to use based on the prompt.
There's a lot of pressure on OpenAI these days to continue to innovate and have the leading edge model. Competition is heating up. Gemini continues to put up impressive benchmarks. Claude has a loyal fan base, especially amongst coders. Grok is showing impressive capabilities. And then you have Meta, which is on a hiring spree, poaching OpenAI engineers with massive paychecks, so I'm sure they're cooking up something too. But as of right now, I think the crown still belongs to OpenAI.
They have the most users and the most hype. ChatGPT is on track to hit 700 million weekly active users and process 3 billion messages a day. And that kind of dominance is pushing up their valuation pretty quickly. Bloomberg reports that the company is in early talks for a stock sale that would let current and former employees cash out at a valuation of about \$500 billion. What's crazy is the company was just valued at \$300 billion four months ago. And it was at \$157 billion last October.
Instacart shares are jumping this morning after the grocery delivery company reported that its profit growth nearly doubled in Q2 to \$116 million. Revenue also jumped 11% to \$914 million, beating analysts' expectations. Instacart makes money in two big ways. First is the fee it charges on grocery deliveries. And the second way is advertising revenue from brands promoting products on their app. Last quarter delivery fee revenues jumped 11%, which is a slowdown from a 17% growth a year ago. But their ad revenue was up 12%. And advertising is a highly profitable business model. So investors are pretty excited about the company and shares are up more than 9% this morning.
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Now Sweetgreen, on the other hand, is having a rough day. Shares are tanking after the salad chain company admitted that fewer people want to pay \$16 for a bowl of kale. The company slashed its 2025 sales outlook. They're now expecting revenues to drop between 4% to 6% this year versus the earlier forecast where they expected sales to be flat. Now just focusing on Q2, same store sales dropped by 8%, which is much worse than what Wall Street was expecting. But to be fair, Sweetgreen isn't the only food chain to blame the economy of slumping sales. Chipotle cut its forecast for same store sales after traffic declined for the second straight quarter. And then there's Kava, whose shares are down 20% in 2025 and down nearly 50% from its 52-week highs. It was down 60% year-to-date heading into earnings, and it's down another 25% this morning.
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