Categories
AI crypto

Elon Musk and his exes. And Apple CEO Tim Cook lost AI top talent to Google, but strikes blow with savings accounts

This week, almost all tech news seemed to be about artificial intelligence. After all, major innovations in AI capture the imagination and are recognizable to all, whereas a breakthrough in biotechnology, for example, is often literally visible only through a microscope to a limited group of experts.

Why do you need $300 million when you just raised $10 billion?

When $300 million dollars is paid by top investors for just over one (1) percent of OpenAI, the company that is the creator of ChatGPT, it deserves extensive attention. Especially considering that Microsoft invested $10 billion (!) in OpenAI less than three months ago, having already put a billion into the company in 2019. That 11 billion surely hasn't run out yet, so the question arises as to why OpenAI held this additional round of investment.

The main reason OpenAI wants to have a strong relationship with some of the biggest tech investors in the world is the burgeoning battle for the AI market. The time is approaching when really big money is needed, think billions rather than millions, for a company to join the battle of giants such as Google, Apple, Microsoft and Amazon who are all competing in this market. After all, AI is too important for all players to ignore. In fact, for Google, the success of OpenAI is life-threatening. With shareholders behind it like Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, K2 Global and Founders Fund (from Peter Thiel, the legendary investor in Facebook and Palantir, among others), OpenAI can now operate independently of partner Microsoft. With an estimated market value of $27 billion to $29 billion, OpenAI is already worth more right now than, to name a crossroad, companies like Spotify and vaccine maker BioNTech, companies that have also successfully capitalized on major developments.

This 'photo' was generated entirely with Midjourney and is eerily real

CEOs Tim Cook and Sundar Pichai fight over AI talent

Meanwhile, in the race for the best AI technology, Apple with Siri and Amazon with Alexa are far behind OpenAI. The Information reported this week that three of Apple's top programmers therefore made the move to Google, despite attempts by Apple CEO Tim Cook to retain them. The personal offer from Alphabet CEO Sundar Pichai, who is committed to catching up with OpenAI, was apparently irresistible. Would any CEO of a European publicly traded company ever have made a personal effort to attract programmers, or to retain them, as Cook and Pichai are doing? I suspect the European gentry, for they are almost all men, feel too big for that.

How difficult it is to make a good AI application proved Snapchat, which received a 1 for the "My AI" feature from users, urging them to remove it from the app. It was not Snap's week, which saw revenue drop after which the stock slumped 17%. Dropbox announced it was laying off 16% of its staff while investing heavily in attracting new AI developers. This indicates that it is difficult, if not impossible, to retrain programmers to become AI developers.

Elon Musk, his X's and his ex

The wait is on for Elon Musk to get involved in the AI war with a company, but he seems too busy trying to ruin Twitter. He does constantly criticize OpenAI and CEO Sam Altman since he sold his stake in OpenAI to Microsoft. It is remarkable, to say the least, that Musk, in an open letter, called for a sort of six-month moratorium in AI development, but in the meantime continues to work on funding his own AI startup, which he alternately calls TruthGPT (as with now unemployed chief Tucker Carlson) or X-AI. That X should normally be in there from Musk; he previously started X.com and, of course, SpaceX. It's lucky it's Tesla and not Texla. His latest son is named X Æ A-Xii (call sign: Bert). And the Æ is in the poor kid's name because it is the elven spelling of the term AI. Musk's baby mama, Canadian artist Grimes, stood out this week by giving permission to use her voice in AI-generated music: "I'll split 50% royalties on any successful AI generated song that uses my voice. Same deal as I would with any artist i collab with. Feel free to use my voice without penalty.' This is especially notable because there is concern that AI will make the entire profession of voice actors obsolete. It will be interesting to follow what the implications will be for singers.

The Apple Card with rounded corners, Steve Jobs wouldn't have wanted it any other way

Finally: Apple is going to make mincemeat of the banks and does it with ... Goldman Sachs?

It had been expected for years and last week it was here: Apple made its entrance into the banking world. Remarkable remains the choice of Goldman Sachs as a partner, because Apple hardly uses the Goldman brand but uses the prestigious bank mainly for the banking license and as a colorless and odorless handler of savings transactions, as a kind of white label. While Apple rarely, if ever, buys market share based on price, when it comes to savings accounts the high interest rate actually stands out: 4.15%, as much as 10 times higher than the US national average. 

What is typical of Apple, however, is its great ease of use. The first step is to apply for an Apple Card, a credit card, which unfortunately is only available in the US for now. All spending via that card will default to 1% to 3% of the purchase amount in the form of what Apple has called "Daily Cash," a balance that is calculated and credited daily. Those who then open a savings account from the Apple Wallet and link it to the Apple Card, an action of no more than a few clicks, will see Daily Cash credited to the savings account daily and automatically receive the high interest rate of 4.15%. The savings account is free, there is no minimum deposit and there are no penalties if balances are withdrawn from the savings account. It is also possible to transfer funds from other banks to the Apple-Goldman savings account.

And precisely the latter is a nightmare for traditional banks. Because while there are other, lesser-known banks, giving even higher savings rates, they are not trusted brands like Apple. The combination of Apple Card with Apple Pay and the Apple Wallet is so seamless and simple that it will be difficult for banks to compete. It seems plausible that European banks will launch a hefty lobby in Brussels, combined with legal action, to make it difficult for Apple to enter the European market in the same way it does in the US.

Event: Consensus 2023

Nearly fifteen thousand people attended the leading crypto event Consensus in Austin, Texas last week, and that doesn't include the types who are too stingy to buy a conference ticket because they think they already know everything and want to tell you that the best networking happens in the pub. The sounds from Austin were universally positive, especially about the quality of the projects that survived the crypto winter. I found the most notable contribution to Consensus, viewed from a distance because I wasn't there myself, to be the interview with journalist Brady Dale, whose book about Sam Bankman-Fried of FTX will soon be published. Dale emphatically points to decentralized finance, DeFi, as the main solution against fraud and mismanagement, precisely where there is no central party like a stock exchange like FTX. I also found it striking that Dale specifically mentions memecoin Dogecoin as a relevant crypto alongside Bitcoin and Ethereum:

'To me, Dogecoin is the chain that said, A story, a character, a concept can have a value, and if a community believes in that character and works together in a distributed way to make the idea bigger, the value of the concept will grow and so will its currency. Dogecoin has really made that clear. It's not just about DOGE, it's about that whole idea of collaboration around a concept, and that's why I'm betting Dogecoin will be the comeback kid of blockchains, again and again, in the near future.

- Brady Dale

Good links

  • Check out this link to some particularly practical prompts to use yourself at ChatGPT.
  • Startup funding is under severe pressure. These four charts show that, and in Miami, investment in startups actually fell more than 90%. Partly a result of the focus in that region on crypto startups, which were struggling.
  • In the Netherlands, more and more investors are asking startup founders not to pay themselves a salary. Here are five reasons why they should.
  • Unknown identifies nearly 1,000 Bitcoin wallets belonging to Russian secret services. Very clever.
  • The U.S. government is about to take over First Republic Bank. I wrote earlier this month about what kind of bank First Republic is. Or was?

Spotlight 9: Meta and Microsoft the big winners of the week

Meta and Microsoft as outliers after good quarterly results

Reader Raoul Kuiper rightly asked me why I did include Bitcoin in this portfolio when I don't own it myself because of its energy consumption and associated carbon emissions. By way of explanation, I created this fictitious Spotlight 9 portfolio to track sentiment in the tech world on a weekly basis. I think when, as happened last week, virtually all major tech companies plus the Dow Jones and S&P 500 are all in the minus, that is relevant to the entire world of technology and innovation. Bitcoin and Ethereum I included because those are the most widely held assets of the hundreds of millions of people investing in crypto worldwide. Of the Spotlight 9, I personally find Microsoft, Apple and Ethereum interesting. The projects and companies I find otherwise fascinating, such as Polygon (MATIC), are usually too small to have an impact on stock market sentiment and the economy and therefore not included in the Spotlight 9.

Amazon, Alphabet (Google), Microsoft and Meta published good quarterly earnings this week, and Microsoft and Meta in particular benefited. Microsoft is expected to benefit greatly from the integration of AI, based in part on technology from OpenAI, into various products and services. Zuckerberg explained to investors that Meta uses a lot of AI to better target their TikTok competitor Instagram Reels, and that struck a chord: Meta shares rose nearly 13% in the last 5 days.

It was, in short, in every way the week of AI.

Categories
AI technology

Amsterdam AI startup raises 50 million, Ajax wins only on Apple TV+

This is the web version of edition 3, April 23, 2023, of my weekly newsletter, subscribe here.

For a very brief moment over the past few days, Amsterdam took center stage in the online world, and it had nothing to do with Ajax. It made me think back to 2003, twenty years ago.

On Leidseplein in Amsterdam, a group of unknown American comedians stood on stage at Boom Chicago, the comedy theater that had to rely primarily on drunken tourists. In California, the first iLife suite, consisting of the cumbersome iTunes and iDVD, which allowed you to burn DVDs very slowly, was launched amid jeers by the moribund Apple. Steve Jobs was at the helm for over 5 years and on $6 billion in sales, Apple was loss-making.

Ted Lasso's unexpected star, Hannah Waddingham, gives bald men hope in the episode Sunflowers 

Anyone who would have predicted then that 20 years later a brilliant comedy show based on a cheap commercial created by these comedians would break all sorts of records on an Apple streaming service with as many as 52 Emmy Award nominations would have been instantly fooled. Ted Lasso, the brainchild of Boom Chicago alumni Jason Sudeikis, Brendan Hunt and Joe Kelly, won the Emmy Award for best comedy series two years in a row. Earlier, Apple TV+ was the first streaming service to win an Oscar for best film, with CODA, which led to strong growth in Apple TV+ subscribers.

It's comparing apples to potatoes, but it's nice to look at how another legendary company that preferred to make only hardware and no content fared during the same period: our own Philips, unlike Apple, did make a profit in 2003, even nearly €500 million on sales of €29 billion, almost five times the sales of Apple that year. Twenty years on, Philips is worth €15 billion on sales of €17 billion and Apple has a market value of €2.3 trillion. Forget all those zeros: that's 2,300 times a billion. Apple has become worth over 150 times as much as Philips in two decades and is on its way to annual sales of over $500 billion, $100 billion of which comes from its services division alone. Not bad for a company that, to the anger of Steve Jobs, was so bad at services that it couldn't yet provide a decent email service. Or does anyone still have a MobileMe address?

But I digress, because entirely in the spirit of Ted Lasso, I would like to be positive this Sunday. Last Wednesday's episode, Sunflowers, was the reason I was reminded of when the creative minds behind Ted Lasso lived in Amsterdam. Sunflowers is an hour-plus long paean from the creators to Amsterdam. Including André Hazes and even a snippet of Rob de Nijs. The only implausible moment of this episode was the beginning, Ajax's 5-0 victory in the Johan Cruijff Arena. When in reality Ajax's only scoring team was the media team, which unfurled a large banner at the pub in London where part of Ted Lasso is being shot.

Why is an Amsterdam "vector database" worth 200 million?

Bob van Luijt and Etienne Dilocker, co-founders of Weaviate

Who wouldn't laugh?

While all of Ted Lasso's protagonists in the Amsterdam episode experienced a direction-defining breakthrough, the same was true of a startup unknown to me that announced it had raised no less than $50 million in its third round of funding. Weaviate calls itself a "vector database" but as the last generation whose math wasn't in the required curriculum, I'm not helped by that. (I'm guessing the name stands for weav-iate, do something with weaving, and not for we-aviate, we fly). Searching for more information about Weaviate, until January still called SemI which does not provide more insight, I found this excellent explanation by CEO Bob van Luijt:

'First-generation database technology is often referred to by the acronym SQL [...] which are conceptually similar to spreadsheets or tables. In the 1980s, this technology was dominated by companies such as Oracle and Microsoft. The second wave of databases is called "NoSQL." These are the domain of companies like MongoDB (and Elastic, MF). They store data in different ways [...] but what they all have in common is that they are not relational tables. [...] The third wave of database technologies focuses on data that is first processed by a machine-learning model, where the AI models help process, store and search the data, as opposed to traditional ways.'

That's an excellent explanation, and it's smart to frame Weaviate this way. Without saying it, Van Luijt implies that Weaviate is solving a huge problem in a huge market, music to the ears of investors, referring to a number of industry peers whose "little ones" are even publicly traded and have a market value of $16 billion (MongoDB) and just under $6 billion (Elastic). Except that those are of the old generation, lisp Van Luijt actually says in passing, and Weaviate is better.

A few things strike me: 

  • $50 million on a $200 million valuation is a high amount for a relatively low valuation. That sounds absurd, but consider that a few weeks ago Character.ai raised $150 million on a valuation of over a billion. Still, this funding is a wise decision by Weaviate, because the fact remains that U.S. VCs invest less money in non-U.S. companies, and at lower valuations, than in U.S. companies. To stay in Ted Lasso spheres, an English Premier League club simply pays more for a player from another Premier League club, than for Jan Maas from the Eredivisie. (That character who always speaks the truth, however painfully at times, by the way, is named after Saskia Maas, the CEO and driving force behind Boom Chicago).
  • in total, Weaviate has now raised $67.7 million within three years, allowing the company to compete in the development of fundamental technology for an international market. What Weaviate is doing is similar to playing Champions League soccer with a Dutch club. Fortunately, Van Luijt et al. now have sufficient resources to attract good players. (This is the latest soccer comparison.)
  • ING already participated in the 2022 A round because it knew Weaviate, as a spin-out from ING Labs. It is commendable that a traditional major bank like ING made such a risky investment, provided the bank actually gets to work with Weaviate's technology. Otherwise, it is a normal venture capital investment, and those do not score better on average in the Netherlands than the AEX index. By the way, it's funny that Weaviate's name change has passed the administrator of ING Ventures' portfolio page by. There, the company is still simply called SemI.
  • Alex van Leeuwen participated in the seed round of Weaviate and in doing so made perhaps one of the best investments ever in the Netherlands. Investor Peter Thiel bought a 10% stake in Facebook in 2004 for $500,000 and sold his stake for a total of over $1 billion, as far as we know the best-yielding investment in venture capital. It may not be that happy (2000x) for Van Leeuwen, but I don't rule it out. Database companies, we've learned from those first- and second-generation oldies, can scale up quickly relatively easily without huge follow-on investments.

Fine links

  • The FD published this thorough article about Lightyear with the headline "How Holland's cuddly company went down by a hair. The disinterest of foreign technology investors in Lightyear (compare it to Weaviate) should have been a telling sign.
  • Master vlogger Casey Neistat intentionally made a terrible vlog based on a script written by ChatGPT4. His conclusion: AI lacks soul, lacks depth. I think ChatGPT4 mostly lacks context at this point, because not yet fed Casey's past, perspective and tone.
  • ChatGPT's CTO Greg Brockman gave this fascinating presentation on ChatGPT's capabilities, which go so much further than some "text and pictures" questions. The interview with TED founder Chris Anderson immediately following the presentation is also enlightening. Thanks to Michiel Schoonhoven of content marketing specialist NXTLI for the tip.

Spotlight 9

(ChatGPT4 coined this rubric name, see the p.s. below this newsletter).

Stock market sentiment determines much of our economy and in fact the tech sector is dominated by it. The idea behind this portfolio was simple. Say you want to invest, but don't want to buy and sell every day because that's time consuming and complicated and you can stand to lose a little; what do you buy? I chose the 5 biggest tech stocks (Amazon, Apple, Google/Alphabet, Meta and Microsoft) two index funds (S&P 500 and Dow Jones Index) and the two biggest cryptocurrencies (Bitcoin and Ethereum). Anyone who had made these nine purchases on Jan. 1 of this year, each for an equal amount, would have earned a return of 37.6% today. But compared to a year ago, the return is -8%. That's the nice thing about tracking a portfolio like this: the duration of the investment, your investment horizon, determines the definition of success. Those who look only at this week, in which only Amazon stands proudly, yearn for the old Silver Fleet account. Incidentally, the main reason Amazon shares rose seems to be the announcement that the company wants to play a prominent role in AI alongside Microsoft and Google, with Amazon Bedrock as its first asset. The setup of Bedrock is interesting because instead of developing everything itself, Amazon offers AWS customers the ability to use AI models from various vendors, including AWS itself.

For those more interested in AI, I recommend this conversation, started by NRC journalist Wouter van Noort who himself produces some of my favorite newsletters, Future Affairs and Transcend.

Happy Sunday,

-Michiel

The archive of past newsletters is here.

p.s. below the conversation with ChatGPT4 about the rubric name for tracking a small investment portfolio

Categories
crypto NFTs technology

Did Keanu Reeves walk through Amsterdam confused?

There are so many posts about AI that it is hard to find the relevant pieces, but they are certainly there. The Washington Post published this excellent article about the challenges in producing Critterz, the first film with 100% AI-generated characters now online. Filmmaker Chad Nelson says it took only a week to create his entire visual world, including all the characters and mystical forests, with Dall-E. When I read that OpenAI, the creator of Dall-E, had co-paid for the film, I did wonder about the honesty of Nelson's praise. It still feels a bit like falling into the trap of a clever content marketer from OpenAI.

Keanu Reeves previously expressed concerns about how movie studios will use AI to replace talent because, "corporations don't give a fuck about paying artists. Reeves has a point. Dall-E took this photo within seconds with the prompt: 'A distraught Keanu Reeves walking along an Amsterdam canal with his hair blowing in the wind, under a cloudy sky.' There is much to be said about this one-eyed Keanu and that green mailbox behind him, but no doubt a new profession will emerge, a hybrid of programmer and visual designer, using AI to its fullest potential to create virtual worlds indistinguishable from the real thing.

Meet the founders of Unveil

One company that focuses precisely on making the distinction between real and fake, or original and fake, is Amsterdam-based Unveil. Photographer Alexander Sporre started this NFT platform with his partners out of dissatisfaction with the way photography is handled in the NFT world. For collectors of NFTs, it is impractical to search among all the junk on OpenSea and other NFT marketplaces for valuable and unique finds. And if you think you have found something nice at all, you don't know if the work is original and how many of them have been made.

Using blockchain technology, Unveil solves this problem of authenticity and edition management for collectors, gallery owners and artists. The artist can choose to offer only a digital work (a DAB, Digital Artwork on the Blockchain) or a physical work of art (PAB, Physical Artwork on the Blockchain), or both. The MoMa in New York and the Centre Pompidou in Paris have now acquired NFTs, and the combination of physical and digital collecting is expected to take off.

I think Unveil is an example of a third generation marketplace, after the uncurated blind offering (think Marketplace) and the curated auction model (like Catawiki). Legendary investment firm Andreessen Horowitz (Facebook, Twitter, LinkedIn, Airbnb, Coinbase etc etc) recently wrote about it in the annual Marketplace 100 Report: 'from your kitchen to your closet, modern marketplaces do the filtering for you.'

Unveil launches publicly at the end of May, featuring exclusive NFT drops by a number of renowned photographers such as Thomas Albdorf, Bastiaan Woudt and Paul Cupido, each of whom have created their own interpretation of classic themes from Dutch art history: Still Life, Landscape and Portrait.

There is now an opportunity for a limited group of investors to invest in Unveil even before its public launch at the end of May. On May 9, the founders are organizing an investor event in Amsterdam to which the readers of this newsletter are invited. You can register here or make a phone appointment with the founders if you are unable to attend the event.

I am also investing in Unveil myself in this round, and my maxim is that you should think of an investment in a startup as money lost now that may come back one day - but hopefully more than you put in. Note that this is not investment advice and you are investing outside AFM supervision, there is no licensing and prospectus requirement. Alexander Sporre of Unveil is a highly respected former colleague of mine and I am a firm believer in the NFT market, so I am far from neutral.

Binance is more important than thought

The news that Binance in the U.S. is being investigated by the CFTC was a footnote in the Dutch media, which are increasingly dominated by visually appealing incidents such as a lighter on an Ajax head or tractors on a highway. That clicks better and is easier to write about than analyses on CFTC, AML, KYC and other boring coolos. I wrote at length last year about why Binance is rightly under fire. Bottom line: Binance is not doing enough to combat money laundering. But Binance, and its former rogue competitor FTX, are important for two reasons.

First of all, the traditional financial world now realizes that digital assets are not disappearing, no matter how much effort is made to keep them far from investors. Pioneers such as Binance, which introduced innovations at an unparalleled pace, are forerunners that hold up a mirror to the traditional big banks and demonstrate how continuous and rapid innovation is indeed possible in the financial world. That attracts a large group of mostly young, active investors worldwide that banks can only dream of. Those banks should look at what Binance does well in terms of products and services and link that clout to their own, stricter regulations.

Second, crypto investors should now realize that those three-letter abbreviations AML and KYC are important to them as well. It is simple: if the source of money, crypto or otherwise, cannot be proven, and if it is not clear who owns these assets, then there will soon be no payment link to traditional finance. Last week, some of Binance' s Australian operations were banned by the government. The Dutch players are much neater, but if the international crypto exchanges where active investors like to trade continue to operate so shady, soon any transfers to or from Binance and its competitors will be denied by banks. It will thus become impossible to buy a house with crypto profits, for example. This will then only be possible in dubious regions, but not everyone wants to live in Montenegro or Dubai.

Paris, Texas?

Although I firmly believe in digital assets and blockchain, until independent data is available that proves the energy source of mining, I will not invest in Bitcoin because of the associated CO2 emissions. Because I work with Bluenote in blockchain but exclusively in the area of sustainability, in terms of event attendance, I often hop on two paths.

The Sustainable Innovation Forum is taking place in Paris in early May. Just when the transition to a sustainable society is under pressure from the faltering global economy, this is an interesting event where, unfortunately, few digital assets will be discussed. Not even in the area of carbon trading. A week earlier in Austin, Texas, Consensus is organized by the leading crypto medium Coindesk. There, of course, there is plenty of focus on digital assets, but little on sustainability. It remains tricky.

Fine links

Zeeland girl Meltem Demirors
  • a special person: too few Dutch people follow Meltem Demirors, one of the most intelligent and original thinkers in the crypto world. She has spoken before the U.S. Congress about crypto, is the authoritative voice of reason about digital assets on CNBC and crazy about leather pants and strange memecoins. The daughter of Turkish parents, Demirors was born in ... Terneuzen, before moving to America at a young age. Become her 257,000th follower on Twitter and you won't regret it.
  • still a handy news source: Hacker News looks like a 1955 Albanian telex, but just checking the headlines always turns up something special. For example, I saw this this week via Hacker News: optimist with lots of spare time turns a Dyson hair dryer into an aircraft engine and cyclist smuggles six thousand SD cards into China *in.*
  • one of my favorite newsletters is that of legendary investor Fred Wilson. In it I read this week that his vc USV has invested in Noya, a startup developing technology the world needs: CO2 removal from the air, American-style called Direct Air Capture Technology. Sounds better anyway.

Geek Sentiment

Finally, a look at the major share prices in tech, where I compare Amazon, Apple, Google, Meta and Microsoft to the S&P 500, the Dow Jones Index, and Bitcoin and Ethereum as the most important gauges in the crypto world. Ethereum (ETH) is the winner of the week with over 10% rise.

It was not Bitcoin's week, although BTC topped $30,000 for the first time since last June. It always stings Bitcoin maximalists when an altcoin, particularly the leading development platform Ethereum, shows better returns as it did this week. But Bitcoin fanatics were especially outraged because the New York Times published a comprehensive study showing that 34 Bitcoin mining companies in the U.S. consume even more energy than 3 million households. Bitcoin fans correctly noted that the article misses the mark by blaming inefficient and vastly outdated energy subsidies on Bitcoin. But Bitcoin's absurd energy consumption is irrefutable. "They are adding hundreds of megawatts of new demand when we are already facing the need to rapidly cut fossil energy," said Jesse Jenkins, a Princeton professor who studies power grid emissions. "If you care about climate change," he added, "that's a problem." There's no pin in that.

I hope to get another newsletter up next week, but we found a sick puppy on the street the day before yesterday that we have taken in to care for and that is proving to be more time consuming than I thought. We are still looking for a name for the puppy, tips and suggestions are welcome! Also about the newsletter of course.

Have a great Sunday.

Sincerely,

Michiel Frackers

LinkedIn

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Recent interview at BNR with Ben van der Burg and Herbert Blankesteijn

Categories
technology

Just the finest bank went bankrupt

It probably hasn't escaped your notice that there is a lot going on right now at the intersection of technology, economics and innovation. With the fall of Silicon Valley Bank, my favorite bank where I was once a customer, being the recent low point. But precisely because there are many great things going unexposed, I started a weekly newsletter about what has caught my eye in the tech world. Below is the content of the first newsletter, dated April 10, 2023.

You can subscribe to this weekly newsletter here.

Silicon Valley Bank was my favorite bank
What kind of banks are Silicon Valley Bank and First Republic? There has been much media coverage of Silicon Valley Bank's pike dive, with its counterpart, First Republic Bank, often mentioned in the same breath. But there are fundamental differences between these San Francisco Bay Area banks. Early this century, I was a very satisfied Silicon Valley Bank customer with a startup that later failed ingloriously. As soon as you were accepted as a client at a good law firm in San Francisco, the lawyer would normally grab the phone and call his relationship at Silicon Valley Bank. That's how we ended up in a far too small cubicle opposite a jovial account manager at Silicon Valley Bank the very same day our firm was founded. The work instruction there was clear: "any customer can be the next Apple or Microsoft, so even though 98% of companies don't survive the first five years, treat your customers as if they were that successful 2%. Every Dutch bank could learn from the way Silicon Valley Bank treated customers. SVB's failure also has nothing to do with creative accounting or strange products as in the banking crisis, but with treasury management failures and rising interest rates. In short: watching one's own pennies carefully. Already it appears that Silicon Valley Bank is being missed, for example in financing climate tech companies, the very startups needed to combat climate change.

First Republic does something very different
First Republic Bank, on the other hand, excels at lending money to founders and C-level management of successful startups. So not in lending money to startups, as Silicon Valley Bank did. People like Mark Zuckerberg were offered particularly low mortgages, for example. Why does a billionaire need a $6 million mortgage? Founders of successful companies prefer to hold on to all their shares as long as possible, as long as the prices are rising. So they borrow money from banks with shares in their own companies as collateral. For example, there is still a persistent rumor in Silicon Valley that Zuckerberg even borrowed a few billion, yes, billion, from First Republic, in part to finance his own charitable foundation. Rather pay a percent interest than sell shares that, until last year, rose many times faster than interest.
Spotlight: iXora immersion cooling

I often get asked which Dutch startups are interesting. That the driving solar car Lightyear received so much media attention made sense, because everyone understands what cars are and where the sun is, but there were two reasons why few professional investors believed in a solar-powered car.
First of all, it costs not millions but billions to set up a car company, let alone on a new energy source, see Tesla. No investor in the Netherlands puts the roulette ball on red or black at that kind of sum. Perhaps more importantly, a regular sized car cannot carry enough solar panels to provide enough propulsion, range and some geeky extras like headlights and brake lights with the current generation of solar panels. I like to be surprised but don't see Lightyear doing well.

Cooling is cool
One startup that did successfully develop a relevant product for a huge market is Ede-based iXora. The company led by CEO Job Witteman (founder and for years CEO of the Amsterdam Internet Exchange AMS-IX, I know him from his time before that at British Telecom) has developed a solution where data centers can save a lot of space and energy. iXora's liquid cooling technology eliminates the need for space- and energy-consuming air cooling (fans). Warren Buffett's company Lubrizol bought a worldwide license and it would not surprise me if iXora reaches unicorn status within three years (cliché alert!), or becomes worth more than a billion Euros. Because energy consumption of data centers must be reduced and it is in their best interest to cut costs and reduce CO2 emissions. iXora's solution is as simple as it is effective and can easily be fitted into standard data centers, which is why it seems logical that the company will eventually be acquired by a party such as Dell, for example, in order to be able to offer an iXora chassis to all its data center customers, as an extra box to check on the order form. Similar to how EMC once acquired VMWare and even took it public a few years later. A startup on its own could never reach that global customer base so quickly.

Friends & family investment round
iXora is currently holding an investment round and from 5,000 Euro you can participate. I'm not giving advice, but my maxim is that you should think of an investment in a startup as money that you are definitely losing now and that very possibly one day will come back - but hopefully a bit more than you put in. I do like this kind of low-stakes opportunity, usually the minimum entry point is many times higher. Note that this is not investment advice and you are investing outside AFM supervision, there is no licensing and prospectus requirement. And the founders of iXora are friends of mine, so I am far from neutral in this.
iXora HRM closed-1
The iXora HRM chassis can house multiple servers. HRM, by the way, does not stand for good old Personnel in a new guise, but for Hypotherm Rack Mount. It is so named because these liquid-cooled cabinets fit into standard 19″ racks common worldwide. This allows data centers to quickly fit them into their infrastructure, unlike competitors' open tanks full of liquid.

Good event calendar

Where are the events and conventions you absolutely must attend? That always remains tricky and I have felt at many a congress that I had ended up at the wrong party. That is why the event calendar of Luna PR from Dubai is so handy, it lists all the important congresses, parties and meetings in the field of crypto and Web 3. The sisters Nikita (CEO, right) and Nisheta (COO, left) Sachdev usually know where it is happening. 
Sachdev
Fine links
Are you also inundated by a glut of podcasts and newsletters? There are very few that I never skip. But the newsletter from former journalist, now investor, Om Malik I always read. Through Malik, I came upon this sharp analysis on why ChatGPT means the Gutenberg moment for software. Another recommendation: this article on the "give, to get back" model for AI startups. Also applicable for other companies that need user data to function better. And neat that the author mentions that he had used Chat GPT4 to write the article.
Geek Sentiment
Finally, a look at the major share prices in tech. Google is the winner of the week with 7.5% rise. Viewed from the beginning of this year, we don't yet have to tip our hat to Mark Zuckerberg, who just last year lost $30 billion in assets in one day, because his Meta is now up 76% after the annus horribilis 2022. And you don't hear much about it, but those who bought Bitcoin and Ethereum on Jan. 1 would also have experienced 69% and 56% increases by now:
frackersnerdsentiment7april2023
Next Week
Among other things: why the U.S. government's lawsuit against Binance is important for the future of crypto as part of the mainstream economy. I wrote about the ongoing problems at Binance exactly a year ago. And spotlight on Unveil, an Amsterdam-based startup focused on the intersection of two huge markets: the art world and the market for NFTs.