What I Read This Week…

Alibaba releases model that rivals OpenAI's o1, Ethereum's reliance on Layer-2 solutions has benefited Solana, and Amgen's clinical data shows Eli Lilly and Novo Nordisk's dominance in obesity drugs

Chamath Palihapitiya

Dec 02, 2024

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Caught My Eye…

Alibaba recently released QwQ, an open-source AI model that competes with OpenAI's o1 in reasoning capabilities. What is QwQ and how does its performance compare with OpenAI's o1? QwQ is an open-source, 32-billion-parameter model with a 32,000-token context window that is strong in mathematical and scientific reasoning. It outperforms o1-preview on mathematical reasoning benchmarks AIME and MATH, and it beats o1-mini on GPQA for scientific reasoning tasks. While it performs worse than o1 on LiveCodeBench coding tests, it still surpasses other leading models like GPT-4o and Claude 3.5 Sonnet. QwQ shows that open-source models continue to rival the capabilities of closed-source models and that Chinese AI models continue to rival the capabilities of U.S. AI models.
Ethereum, despite being the second-largest cryptocurrency by market capitalization, faces challenges to its growth model. The network's heavy reliance on Layer-2 solutions, which are separate networks built on top of Ethereum for faster and cheaper transactions, has created unexpected complications. While Layer-2 adoption has seen an increase with popular networks like Base and Arbitrum, this success has undermined Ethereum's main network. Users increasingly prefer the more efficient Layer-2 networks, which have reduced activity and fee generation on Ethereum's base layer. This shift has two implications. First, it weakens Ethereum's deflationary economic model, which relies on network activity to reduce token supply, and second, it has fragmented the ecosystem's liquidity and user base, leading to a more convoluted user experience. This situation has created an opportunity for Solana, a competing cryptocurrency that processes transactions quickly and inexpensively without requiring additional layers. Solana's native token has demonstrated stronger performance, rising 300% over the past year compared to Ethereum's 75% gain. As a result, Solana has established itself as the second-largest platform for decentralized finance applications.
Amgen's recent clinical trial data shows how dominant Eli Lilly and Novo Nordisk's market positions currently are in the obesity drug market. What's going on? While dozens of companies are racing to enter this market, Amgen has emerged as the closest competitor to Eli Lilly and Novo Nordisk with its drug MariTide. However, MariTide faces two headwinds. First, its trial results show only 20% weight loss compared to over 25% achieved by Eli Lilly and Novo Nordisk's next-generation drugs. Second, Amgen trails in timeline to FDA approval - having only completed Phase 2 trials, it needs several more years of large-scale Phase 3 studies before possible FDA approval and release to the market. Meanwhile, Eli Lilly and Novo Nordisk are already finishing Phase 3 trials for their latest obesity medications. Other companies like Pfizer, AstraZeneca, and smaller biotechs are even further behind than Amgen, which suggests that Eli Lilly and Novo Nordisk's early success has given them a leading position that may grow even stronger over time.