Lovable reaches new heights while Spotify revisits in-app messaging: This week's news round-up

Spotify revisits in-app messaging and Meta calls time on its AI hiring spree. Here’s the news that caught our attention this week.

Lovable gets funding offers to value it at $4 billion

Vibe coding start-up Lovable has seen its valuation surge this week, according to the Financial Times. The company is fielding investment offers that value it at $4 billion, more than double its $1.8 billion valuation after a funding round a few weeks ago.

Lovable’s vibe coding tech enables users to create apps and websites through simple text prompts and is seen as a swift, effective democratisation of software development that resonates with both users and venture capitalists. The FT reported that Lovable’s CEO Anton Osika was “not currently engaging with investors on the latest proposals, but that he was weighing fundraising options for the coming months”.

Spotify launches in-app direct messaging, again

Spotify has introduced an in-app direct messaging feature, Messages, in a move to become more social and boost engagement. The feature, which for now is available in Latin America with rollout to the rest of the world following shortly, is aimed at expanding the ways users can discover and share content without leaving the app, and supporting creators by encouraging more word-of-mouth recommendations.

Initial reactions across social platforms have been less than celebratory: on Reddit for example, some users complained of feature creep and lamenting that long-awaited features like hifi audio should have been prioritised instead. Said one Reddit user: “Who the f*** would use this anyway? Baffling. Hey Spotify, how about paying artists more instead of this feature-creep sh**?”

Just to dispel any sense of deja-vu, Spotify used to have a messaging feature years ago, but discontinued it in 2017, citing low usage.

Google reduces management tiers

Business Insider reports that at a recent all-hands meeting, Google disclosed a 35% reduction of managers overseeing small teams, those leading fewer than three people. The reduction reflects Google’s ongoing push to flatten its organisational structure and so speed up decision-making.

Alongside restructuring, Google is encouraging employees to boost their productivity through using AI tools. CEO Sundar Pichai has called on staff to upskill and become “AI-savvy,” emphasising that AI is a driver of efficiency rather than a means of reducing headcount.

Anthropic settles copyright infringement lawsuit

Anthropic has reached a settlement in a class action lawsuit with US authors who had alleged that the company used up to seven million pirated books to train its AI assistant, Claude. The lawsuit targeted how data was acquired and carried the threat of massive statutory damages, so Anthropic has avoided going to a potentially disastrous trial in December. The settlement awaits court approval.

Anthropic is also closing in on a major funding round which is expected to raise nearly $5 billion. The funding round is led by Iconiq Capital, and should value the company at about $170 billion. Some reports indicate this funding round could even grow to $10 billion, because of strong demand from investors, and this would effectively double Anthropic’s current valuation.

Meta calls time on AI hiring spree

Meta has halted its aggressive AI recruitment drive, after bringing in over 50 hires from AI labs at OpenAI, Google, Apple and Anthropic. The hiring freeze is tied to a broader reorganisation of Meta’s Superintelligence Labs, splitting it into four units: Superintelligence, AI Products, AI Infrastructure, and Long-term Research.

The company’s AI hiring spree came with lavish compensation, with some offers reportedly reaching nine figures. This apparently has raised investor concern over stock-based compensation eroding shareholder value. Some critics have labelled Meta’s AI strategy as chaotic, saying that despite the eye-watering sums spent, the company has realised any meaningful business wins. According to IT Pro: “Aggressive hiring up to now and sizable investment on the AI front may suggest the company is aware that it’s fallen behind key competitors in the space. In late June, Demis Hassabis, CEO at Google DeepMind, suggested Meta’s hiring spree shows it’s lagging behind in the AI race during a podcast appearance.”

Employees become millionaires in Canva share sale

Canva’s employee share sale is making waves in startup financing. The company this week launched a secondary share sale for employees and early investors, boosting its valuation to about $42 billion, up from $32 billion last year. Some employees will become millionaires overnight, transforming their paper equity into real wealth.

Canva founder Cliff Obrecht commented; “This round has been significantly oversubscribed, which is a huge testament to the incredible work of our team and the impact Canva is having around the world. The overwhelming demand from both new and existing investors is a huge vote of confidence in our momentum and the scale of what still lies ahead.”