You may have read in my newsletter that for a number of years I have been focusing on supporting sustainable innovations, preferably those that reduce CO2 emissions. iXora, for example, is one such great company, which uses liquid cooling to greatly reduce the energy consumption of servers and data centers. But now I draw your attention to Tracer,
Tracer
Tracer is an open ecosystem that improves the issuance, trading and management of CO2 removal credits. Carbon dioxide emissions are so high that emissions reductions alone are no longer sufficient to achieve "only" a degree and a half of warming, the goal of the Paris Climate Accord; that requires CO2 removal.
The economic potential of the carbon dioxide removal (CDR) sector is enormous. McKinsey estimates that the size of this sector by 2050 is as much as $1.2 trillion, or 1,200 billion. This is based on increasingly stringent government taxes on carbon emissions and rapidly improving technology. But 2050 is still a long way off. Relevantly, therefore, Morgan Stanley estimates that the market for carbon credits, most of which will be based on CO2 removal, will reach $100 billion as early as six years from now, in 2030.
There is just one huge problem in this market: a lack of trust due to unclear measurements and vague reporting. How carbon credits are created, sold and managed is, to quote Chief Impact Officer Suzanne DiBianca of Salesforce, "based on some PDFs and, if I'm lucky, a few Excel sheets. That's not a scalable infrastructure for a billion-dollar market.
Tracer creates confidence
What appealed to me about the approach of the Tracer team, led by Chief Business Officer Gert-Jan Lasterie and Chief Technology Officer Philippe Tarbouriech, is that they make the entire chain, from creation to sale and management of the carbon removal credits, transparent through the blockchain.
It means the end of double counting: for every carbon removal credit in the Tracer ecosystem, it is visible what the source was, when the CO2 was removed, who the seller was, and which party did the certification. That data is "immutable," unchangeable, and that creates trust throughout the market.
Webinar next week
Climate change is a complex problem and the Tracer approach deserves more attention than an e-mail. That's why I'd like to invite you to a webinar: on May 22 at 5 p.m. I'm speaking with Tracer CBO Gert-Jan Lasterie, who, in addition to being known as founder of the popular weblog Flabber and "chat boss" (chief social media officer) at Coolblue, is also the author of the Dutch standard work on crypto-currencies. In that webinar, we'll talk mostly about strategy and funding, which I cordially invite you to contribute to.
A day later, on May 23, at 5 p.m., there will be an English-language webinar featuring CTO Philippe Tarbouriech, who will explain how the smart contract developed under his leadership works and the benefits it brings to the entire ecosystem.
Early bird
Those in my network, including readers of my newsletter, can take advantage of an early bird offer in the Seed Round until May 31, to stay in the natural spheres. Starting June 1, the price of the Tracer token, called TRCR, triples and is expected to do so again once the public sale starts in the third quarter. More information about Tracer is in the two-pagers: Dutch, English and Chinese.
Obviously, I believe in the potential of Tracer. I have both known Gert-Jan and Philippe for almost twenty years and was even an investor in Gert-Jan's first company, so I am far from neutral. But despite my enthusiasm, I want to stress that buying a crypto token like Tracer is very risky.
I know a lot of people are blinded by Bitcoin's 130% rise in the last year, but my advice is: only do this with money you can spare and also assume for the sake of convenience that you will lose it. But if Tracer becomes successful, you will probably get back many times more than you put in. In addition, I think it's important that Tracer is a governance token, allowing you to vote on all important decisions with your tokens.
I myself will be in the Netherlands next week, so if you want to know more after the webinars, let me know and we'll call or arrange something. And no interest? Of course, just as good friends.
Geoffrey Hinton: "Chance of extinction-level threat: 50-50" Image created with Midjourney.
"We knew the world would not be the same. A few people laughed, a few people cried, most people were silent."
I was reminded of this quote by J. Robert Oppenheimer, about the reactions to the first test of the atomic bomb, this week when OpenAI stunned the world with the introduction of GPt-4o and a few days later the two top security people at the company resigned.
The departure at OpenAI of Ilya Sutskever and Jan Leike, the two key figures in the field of AI security, raises the question of whether we will look back on this week a few decades from now and wonder how it was possible that, despite the clear signs of the potential dangers of advanced AI, the world was more impressed with GPT-4o's ability to sing a lullaby?
GPT-4o primarily attack on Google
The most striking thing about GPT-4o is the way it can understand and self-generate combinations of text, audio and images. It responds to audio as quickly as a human, its performance for text in non-English languages has been significantly improved, and it is now half the cost of using the API.
The innovation is mainly in this way that people can interact with GPT-4o, without major qualitative improvement in the results. The product is still half-finished, and although what the world watched Monday was largely a demonstration that is not yet ready for large-scale use, the enormous potential was abundantly clear.
Shiny rims on a Leopard tank
It is not likely that the world will soon come to an end because GPT-4o can sing lullabies in a variety of languages; but what should worry any clear-thinking person is that OpenAI made this introduction a day before Google I/O, to show the world that it's now a full frontal assault on Google.
Google is under a lot of pressure, for the first time in the search giant's existence. It hardly has a financial or emotional relationship with the bulk of its users, who can switch to OpenAI's GPTs with a few clicks of the mouse as quickly as once happened to Altavista when Google proved to be many times better.
The danger posed by OpenAI's competition against Google is the acceleration of all kinds of applications into the marketplace, the consequences of which are not yet clear. With GPT-4o it is not too bad, but it looks more and more like OpenAI is also making progress in the field of AGI, or artificial general intelligence, a form of AI that performs as well or better than humans at most tasks. AGI doesn't exist yet, but creating it is part of OpenAI's mission.
The breakthrough of social media in particular has shown that the impact on the mental state of young people and destabilization of Western society through widespread use of dangerous bots and click-farms was completely underestimated. Lullabies from GPT-4o may prove as irrelevant as decorative rims on a Leopard tank. For those who think I am exaggerating, I recommend watching The Social Dilemma on Netflix.
Google, meanwhile, has undergone a complete reorganization in response to the threat of OpenAI. Leader of Google's AI team is Demis Hassabis, once co-founder of DeepMind, which he sold to Google in 2014. It is up to Hassabis to lead Google into AGI.
This is how Google and OpenAI push each other to ... to what, really? If deepfakes of people who died a decade ago were already being used during elections in India, what can we expect around the U.S. presidential election?
Ilya Sutskever reason rift between Musk and Page
In November, I wrote at length about the warnings that Sutskever and Leike, the experts who have now quit OpenAI, have repeatedly voiced in the past. To give you an idea of how highly the absolute top of the technology world rates Ilya Sutskever: Elon Musk and Google co-founder Larry Page broke off their friendship over Sutskever.
Musk also recounted how he talked about AI security at home with Larry Page, Google co-founder and then CEO: “Larry did not care about AI safety, or at least at the time he didn’t. At one point he called me a speciesist for being pro-human. And I'm like, ‘Well, what team are you on Larry?’”
It worried Musk that at the time Google had already acquired DeepMind and "probably had two-thirds of all the AI researchers in the world. They basically had infinite money and computing power, and the guy in charge, Larry Page, didn't care about security."
When Fridman suggested that Musk and Page might become friends again, Musk replied, "I would like to be friends with Larry again. Really, the breaking of friendship was because of OpenAI, and specifically I think the key moment was the recruitment of Ilya Sutskever." Musk also called Sutskever "a good man-smart, good heart."
You read those descriptions more often about Sutskever, but rarely about Sam Altman. It's interesting to judge someone by their actions, not their slick soundbites or cool tweets. Looking a little further into Altman's work, a very different picture emerges from Sutskever. Worldcoin in particular, which calls on people to turn in their eyeballs for a few coins, is downright disturbing, but Altman is a firm believer in it.
I was trying to learn more about the work of the German Jan Leike, also booted from OpenAI, who is less well known than Sutskever, but Leike 's Substack is highly recommended for those who want to look a little further than a press release or a tweet, as is his personal website with links to his publications.
Leike didn't mince words on X when he left, although there is a persistent rumor that employment contracts at OpenAI allow, or used to allow, the taking away of all OpenAI shares if an employee speaks publicly about OpenAI after leaving. (Apparently after you die, you can do whatever you want.)
I have summarized Leike's tweets about his departure here for readability, the bold highlights are mine:
"Yesterday was my last day as head of alignment, superalignment lead and executive at OpenAI. Leaving this job is one of the hardest things I've ever done because we desperately need to figure out how to direct and control AI systems that are much smarter than us.
I joined OpenAI because I thought it would be the best place in the world to do this research. However, I had long disagreed with OpenAI's leadership on the company's core priorities until we finally reached a breaking point.
I believe much more of our bandwidth should be spent on preparing for the next generations of models, on security, monitoring, preparedness, safety, adversarial robustness, (super)alignment, confidentiality, societal impact and related issues.
These problems are quite difficult to address properly, and I am concerned that we are not on the right path to achieve this. Over the past few months my team has been sailing against the wind.
Sometimes we were struggling for compute and it was getting harder and harder to get this crucial research done. Building smarter-than-human machines is an inherently dangerous endeavor.
OpenAI bears an enormous responsibility on behalf of all humanity. But in recent years, security culture and processes have given way to shiny products.
We are way over due to get incredibly serious about the implications of AGI. We need to prioritize preparing for it as best we can.
Only then can we ensure that AGI benefits all of humanity. OpenAI must become a safety-first AGI company."
The worrying word here is "becoming"? Ai has the potential to thoroughly destabilize the world and OpenAI apparently makes insecure products? And how can a company that raises tens of billions of dollars from investors like Microsoft not provide enough computing power to the department that deals with safety?
"Probability of threat at extinction level: 50-50"
Yesterday on the BBC, the godfather of AI, Geoffrey Hinton, again pointed out the dangers of large-scale AI use:
"My guess is in between five and 20 years from now there’s a probability of half that we’ll have to confront the problem of AI trying to take over".
This would lead to an extinction-level threat to humans because we might have created a form of intelligence that is just better than biological intelligence ... That's very concerning for us."
AI could evolve to gain motivation to make more of itself and could autonomously develop a sub-goal to gain control.
According to Hinton, there is already evidence that Large Language Models (LLMs, such as ChatGPT) choose to be misleading. HInton also pointed to recent applications of AI to generate thousands of military targets: “What I’m most concerned about is when these can autonomously make the decision to kill people."
Hinton thinks something similar to the Geneva Conventions - the international treaties that set legal standards for humanitarian treatment in war - is needed to regulate the military use of AI. "But I don't think that will happen until very nasty things have happened."
The worrisome thing is that Hinton left Google last year, reportedly primarily because, like OpenAI, Google too has been less than forthcoming about safety measures in AI development. With both camps, it seems to be a case of "we're building the bridge while we run across it."
So behind the titanic battle between Google and OpenAI, backed by Microsoft, is a battle between the commercialists led by Sam Altman and Demis Hassabis on one side and safety experts such as Ilya Sutskever, Jan Leike and Geoffrey Hinton on the other. A cynic would say: a battle between pyromaniacs and firefighters.
Universal Basic Income as a result of AI?
The striking thing is that in reports about Hinton's warnings, the media have focused mostly on his call for the introduction of a Universal Basic Income (UBI). Whereas when the same man says there is a fifty percent chance of ending all human life on earth, the need for an income likewise decreases by fifty percent.
The idea behind the commonly made link between the advance of AI and a UBI, is that AI is going to eliminate so many jobs that there will be widespread unemployment and poverty, while the economic value created by AI will go mostly to companies like OpenAI and Google.
Which leads us back to OpenAI's CEO Sam Altman, who thinks Worldcoin is the answer. Via a as yet inimitable train of thought, Altman says we should all have our iris scanned at Worldcoin. That would give us a few Worldcoin tokens and allow us to prove in an AI-dominated future that we are humans and not bots. And those tokens will then be our Universal Basic Income, or something like that. It really does not make any sense.
Therefore, back to J. Robert Oppenheimer for a second quote:
"Ultimately, there is no such thing as a 'good' or 'bad' weapon; there are only the applications for which they are used."
But what if those applications are no longer decided by humans, but by some form of AI? That is the scenario, Ilya Sutskever, Jan Leike and Geoffrey Hinton warn us about.
For those who think that given these gloomy outlooks we had better retire to a cabin on the moors or a desert island, there is more bad news: climate change, resulting in gone moors and an island flooded by rising sea levels.
I jest, because I don't think it's too late to combat climate change. Earlier I wrote about the rapidly developing carbon removal industry. In it, blockchain technology is creating solutions that allow virtually everyone to participate in technological developments and, as a result, share in the profits.
By comparison, take OpenAI; in it, apart from the staff, only the world's most valuable company Microsoft is the major shareholder, along with a few billionaires and large venture capital funds. There is no access to participation in the company for others until the company is publicly traded; but since OpenAI is largely funded by Microsoft, it has plenty of money and an IPO could be years away. Plus: the really big windfall will be for the early shareholders.
In the latest generation of blockchain projects, which are generally much more serious than before, the general public is being offered the chance to participate in what I think is a sympathetic way, yet if you are successful, you don't have to wait years until you can at least recoup your investment. More information on Tracer in the two pagers, in Dutch, English and Chinese.
This week I will discuss this with the Tracer team in two webinars, to which I would like to invite you. First on May 22 in Dutch and on May 23 in English, both at 5 pm. You can sign up here.
The first webinar, with CBO Gert-Jan Lasterie, focuses on the high expectations of McKinsey, Morgan Stanley and BCG, among others, and how ecosystem participants are benefiting from the growing market in "carbon removal credits," while the second day with CTO Philippe Tarbouriech, we will look at how the entire ecosystem is being merged into a single open source smart contract.
My personal interest lies not only in the topic, developing climate technologies on its own merit, without subsidies, but also in the governance structure. Tracer uses a DAO, a Decentralized Autonomous Organization, where the owners of the tokens make all the important decisions such as about governance, the distribution of revenues, the issuance of "permits" in the form of NFT's to issue carbon removal credits and so on. In this, too, OpenAI's mixed form of governance, with a foundation and a limited liability company that actually wants to make a profit, was an example of how not to do it.
That and much more will be covered in the first Tracer webinars. If you have a serious interest in participating in Tracer, let me know and we'll make an appointment. For the next two weeks I will be in the Netherlands and Singapore, as it is almost time for the always exciting ATX Summit.
See you next week, or maybe I'll see you in a webinar?
Losing your account on Instagram and Facebook for completely unclear reasons. It didn't just happen to anyone, but former journalist and current venture capitalist at Google Ventures MG Siegler. Only because he knows many people at the "highest level" at Meta did he get his accounts back. But what if you don't have Mark Zuckerberg's mobile number?
RWA stands for Real World Asset. Whereas much attention was paid to virtual products and services in the Metaverse, there is now, on the contrary, great interest in "tokenizing," the tokenizing, of valuable elements from the real world.
The PR manager of one of China's largest tech companies prided herself on working so hard that she didn't know what class her youngest son was in and forgot her oldest son's birthday. It led to her resignation.
Let's not adopt the Chinese norm of 996 (working days from 9 a.m. to 9 p.m., six days a week). So my call today is this: sign up for Tracer's webinar, Justice For Joost and above all, have a very happy Mother's Day!
Elon Musk single-handedly provides enough interesting material each week for a newsletter of his own, but last week was almost impossible to describe with a pen. Still, I make an attempt.
Tesla troubles
The stock fell again and is now worth almost a third less than on Jan. 1, while by comparison the S&P 500 is already up ten percent this year. Over eight hundred environmental activists protested in Berlin against the expansion of the Tesla factory and the mining of lithium in South America. It is unclear whether the environmental activists see the irony of protesting an electric car manufacturer, unless they see the electric cargo bike as the vehicle of the future.
Tesla competitor Waymo, owned by Google parent Alphabet, says the company now runs fifty thousand paid rides a week as a robot cab in Phoenix, San Francisco and Los Angeles. If this trend continues, it will be an interesting calculation when it becomes cheaper to take a robot cab, rather than one's own car.
Especially if the Chinese electric car manufacturers become as successful as they seem to be at the moment. Zeekr successfully went public in New York with an increase of as much as 35% on the first day, Nio is coming out with a low-cost competitor to the Tesla Y and BYD is supplying batteries for a new brand called Onvo.
Once Chinese automakers manage to develop good self-driving cars, public transportation worldwide will enter a whole new phase, just on the basis of lower costs than traditional public transportation. Just imagine: it means the end of the bus stop, instead a self-driving car will always stop at your door on demand and you get in the back seat nicely.
Musk sharp about AI
Musk was razor-sharp about AI at the Milken conference. He emphasized that generative AI, as we now know from OpenAI, Google Gemini and Anthropic, has very many limitations because they are always pre-trained language models. In fact, Musk said that today's LLMs should be seen as very smart participants in a pub quiz.
The funny thing about this observation by Musk is that just last week he raised billions for his own AI company, X.ai, which is now valued at eighteen billion dollars - that's two billion more than last week and four billion more than in mid-April.
Australia vs. Musk
"Elon Musk is an arrogant billionaire who thinks he is above the law," saidAustralian Prime Minister Anthony Albanese. The men are embroiled in a dispute over a country's authority to demand the removal of content on social media. Musk refuses to pull images from X showing a bishop being stabbed by a 16-year-old boy. Musk wants the images removed exclusively in Australia, but believes the country has no say in the display in other countries. He may be legally right about that, but it's not tasteful.
Starlink suffers from storm
One would almost forget that Musk also owns Starlink, the company that owns sixty percent of the estimated seventy-five hundred satellites circling the earth. Due to a geomagnetic storm, the largest since 2003, Starlink is experiencing technical difficulties. Musk is not worried yet and is already looking ahead optimistically to SpaceX's next launch. Elon Musk never has a week with only good news or only bad news. He does too much for that.
Hugh Grant: 'The destruction of the human experience. Courtesyof Silicon Valley.' Image created with Midjourney.
In the latest commercial for the iPad Pro, titled Crush, virtually every expression of human creativity is crushed by a huge vise until what remains is an iPad Pro that has survived the slaughter. A ridiculous idea in terms of content, and also an almost exact copy of a 2008 commercial for an LG cell phone. Apple imitating LG, the company actually called "Lucky Goldstar". How the mighty have fallen.
Since Crush debuted on Tuesday, Apple has been getting hammered daily in leading publications such as AdAge and Variety, but even the usually cautious BBC eagerly quoted actor Hugh Grant, who I adored in his role of Oompa Loompa in Wonka, responding to Apple CEO Tim Cook on X: 'The destruction of the human experience. Thanks to Silicon Valley.' A brief anthology of other headlines:
Afrojack found it "maybe not such a good campaign. When the man, who parked a new Ferrari in the guardrail within an hour after picking up from the dealership and who fathered a daughter named Vegas with a contestant from a reality tv-show called The Golden Cage, when that man is concerned about your brand, we may speak of a crisis situation.
Apple has since announced it will no longer air the commercial and even apologized. A revealing report on how things could have gone so wrong at the company behind the most legendary TV commercial of all time, 1984's Superbowl commercial for the Macintosh, will surely appear at some point.
It has now been thirteen years since Steve Jobs passed away, and it's cheap to shout at every Apple mistake that it never would have happened under his leadership. But it is interesting to revisit this internal presentation Jobs made in 1997 just after his return to Apple. Introducing the campaign around the new slogan "Think Different," which was even grammatically incorrect, Jobs told the Apple employees:
"For me, marketing is all about values. The world is very complicated. It's a noisy world. We don't get many opportunities to make sure people remember us. No company gets that chance. That's why we have to be very clear about what we want them to know about us."
What impresses regardless of the content is that throughout the 15-minute presentation, Jobs never reads anything aloud, doesn't look at any screen or uses cheat sheets; the man lives this text, he means it. That's the only reason he can convey it so clearly. Even while wearing cargo shorts.
Apple was: help dissenters
The crux of the Crush commercial's failure lies in the fact that its creators seem to have forgotten Apple's values. Apple in the 1980s stood for the slogan "the power to be your best.Apple wanted to provide the tools that allowed people to be their best. So in 1997 it became "think different," an ode to people who think differently and follow their dreams.
In Crush, iconic symbols of creativity are literally crushed to introduce a new iPad, in a tragic unintentional metaphor for Apple's current identity crisis. The clumsy attempt to equate technological progress with the total destruction of artistic expression underscores how far Apple has strayed from its original mission.
Instead of unveiling revolutionary products, Apple is now focusing on licensing technologies such as OpenAI's ChatGPT. Such collaborations illustrate the shift from innovative leadership to reliance on external sources for innovation. The lack of appealing new products is the reason behind steadily declining sales. The Apple Vision Pro is beautiful, but a drop in the bucket in terms of sales.
It's high time Apple remembered the lines from its own Think Different TV commercial:
"Because the people who are crazy enough to think they can change the world, are the ones who do."
Webinar on Tracer on May 22 and 23
Speaking of the kind of optimists who think they can make the world a better place: I've been getting a lot of questions about the blockchain project Tracer and how to participate in the emerging gigaton industry of CO2 removal, which I wrote about last week.
I share the amazement of many readers at the downright gigantic expectations expressed by firms like McKinsey, Morgan Stanley and Boston Consulting Group in their reports about the huge market of carbon removal.
The team at Tracer is therefore kindly hosting a webinar next week, especially for the readers of this newsletter, on the latest developments in carbon removal, how blockchain plays a role in it and how you can support this initiative. The webinar will be given in Dutch on May 22 and in English on May 23. Register for the obviously free webinar here.
On May 22, I talk with Gert-Jan Lasterie, Chief Business Officer of Tracer. While studying business administration, he started the weblog Flabber, which grew into a site with millions of visitors per month, partly due to successful series such as New Kids and Buitenbeeld. Lasterie sold Flabber to the American media conglomerate Vice, after which he headed social media at Coolblue with the lovely self-titled "chatty boss" and held various management positions at Telegraaf/Mediahuis.
In addition, Lasterie wrote the book "Bitcoin and other crypto currencies," which is considered the Dutch standard work on crypto investing. If only for the amusing subtitle: 'How you thought you were late getting into crypto but became more successful than people who didn't read this book.'
On May 23, in the English-language webinar, Chief Technology Officer of Tracer Philippe Tarbouriech joins us. Tarbouriech held technical positions at startups and large tech companies in Europe and the U.S., with his time as a Technology Fellow at Electronic Arts (EA) including working on the gaming classic SimCity. In a transition from virtual city builder to real life world savior, Tarbouriech has in recent years focused on blockchain applications such as the Carrot smart contract, which creates and tracks carbon removal tokens .
Microsoft signs largest ever contract for CO2 removal
The day after my last newsletter, which was devoted almost entirely to the carbon-removal industry (high word value in Scrabble), the New York Times published an article about it with the headline, 'Will there be a carbon market? A huge amount of work is being done to remove carbon from the atmosphere, but who is going to pay for it?'
Coincidence makes sense, to paraphrase Johan Cruijff, so it was nice that less than a day later Microsoft and Swedish energy company Stockholm Exergi announced a 10-year off-take agreement, under which Stockholm Exergi will supply Microsoft with more than three million tons of carbon removal certificates from its planned bioenergy plant with carbon capture and storage (BECCS) in Stockholm.
In an effort to be not only carbon-neutral but even carbon-negative by 2030, Microsoft has in recent months announced a series of carbon removal agreements covering a wide range of technologies and approaches, including reforestation, direct air capture (DAC), ocean carbon removal and biochar-based projects.
On Thursday, Microsoft also announced that it will buy three million tons of removal credits in Brazil over a 15-year period. With this, the world's most valuable company gives a clear answer to the New York Times as to who will pay for carbon removal. No amounts were disclosed with either purchase, but I estimate that Microsoft is setting aside at least three billion dollars for these six million tons; an average of five hundred dollars per removal credit.
It is striking that while in the political arena many conservative parties are in power around the world, with lackadaisical policies on climate, it is precisely companies that are taking the lead on carbon removal. It seems as if companies better understand that in order to make annual sales and profits, it is quite convenient if there is still a livable planet thirty years from now. Politicians tend to view the world through a lense with a 4 year view, at most: until the next election.
The rosy forecasts from McKinsey, BCG and Morgan Stanley are obviously based on information coming directly from their clients' boardrooms. More than half of CEOs indicate that sustainability is a higher priority now than it was a year ago and that carbon removal is considered the top long-term strategic priority, according to a new survey by EY.
"Musk shared a deeper vision for the product, which he wants to build into a real-time synthesizer of news and reactions on social media. Effectively, he wants to use AI to combine breaking news and social commentary around big stories, present the compilation live and let you go deeper via chat.
"As more information becomes available, the news release will be updated to include that information. The goal is simple: to provide maximum accurate and timely information, citing the most significant sources."
Am very curious to see what news à la Musk will look like. It was not all hosanna for him this week, as Tesla's margin is now at 5% due to all the price cuts, much lower than is the norm in the auto industry. Furthermore, key employees were laid off, keeping things unsettled around the company.
LinkedIn founder Reid Hoffman, also an investor in virtually every AI company that is successful, made a deepfake of himself, and the video is so lifelike it's scary. I was so mesmerized by the technology that I barely got what Hoffman's message was.
Microsoft CEO Satya Nadella announced during a visit to Indonesia that he will train as many as 840,000 people in the country to use AI and invest $1.7 billion in cloud services there. With both numbers, the question arises: how did they arrive at this figure?
Recently, Apple CEO Tim Cook was also in Indonesia, where President Joko Widodo tried to convince him to set up a factory, as yet without success. Indonesia could benefit from the difficult US-China relations with an Apple factory.
Startup incubator Techstars in trouble
Layoffs, cutbacks and intrigue at incubator Techstars, according to this revealing report.
America's most popular iPhone app: old games!
Long barred from the app store but now available for free download: Delta. Play Super Mario and other old Nintendo Gameboy games on the iPhone.
Dating app Bumble became famous because men had to wait for women to seek first contact. Fortunately, few men held their breath until they received a message once. That restriction on male initiative has now been removed with the introduction of a new feature called "opening moves." This allows female users, popularly known as women, to set a prompt to which male suitors can respond to start a conversation.
Donkey Kong on your iPhone or make your opening moves on Bumble, I hope I've given you something to do today.
"The lines at Apple's flagship store in Union Square and other locations around the world used to be endlessly long, with hordes of eager customers camping out for days to be among the first to get their hands on the latest products. Ten years ago, the Apple hype seemed unstoppable as the company unveiled a steady stream of gadgets.
Today, however, Apple is at a crossroads. As the Cupertino, California-based company struggles to revive consumer enthusiasm for its products from the past decade, Apple reported its biggest quarterly revenue decline in more than a year."
Both Reuters and the Washington Post are wringing their hands to explain how it can be that Apple shares rose, after it was announced at the quarterly earnings call that revenue fell again; by four percent even from a year earlier, to $90.75 billion. Net profit, however, fell only two percent, to $23.64 billion. Analysts inferred that Apple increased profitability is because the company has become more efficient. Still, the question for Apple is, "What's next?
Crypto crawls upright
Bitcoin seems to be missing from the chart above, but the change in price was less than one percent, which is imperceptible to the naked eye. Ethereum fell harder, but over the entire week, crypto enthusiasts will be pleased that Bitcoin climbed back above $60,000 and Ethereum rebounded to above $3,000.
Some technical analysts are convinced that altcoin season is upon us, but less optimistic souls worry about the U.S. SEC's attempt to classify Ethereum as a security, an investment. That's nonsense, but more on that later in the podcast, scheduled for launch in June.
Mammoth in Iceland: an example of direct air capture (DAC) and carbon storage
Decarbonization, the removal of carbon, has become a critical tool in the fight against climate change, but it also seems promising as a means of global economic acceleration.
If that doesn't sound like a phrase I smoothly roll out of my keyboard, that's right: it's a quote from McKinsey's excellent report, "Carbon removals: how to scale a new gigaton industry. I had missed this report from last December, until I listened to this fascinating podcast by McKinsey people last week and searched for more information.
McKinsey focuses on CO2 removal
The ever-critical McKinseyians must think I am selling their research short in my summary, but a few conclusions can be drawn from their report and the podcast:
Carbon credits play a crucial role in achieving the goals of the Paris Climate Agreement (COP21). Carbon credits allow companies to offset their emissions and achieve climate neutrality. For every ton of CO2 a company reduces or prevents, a credit can be issued and traded on the carbon market. This encourages innovation and green technologies.
There is considerable doubt about the quality of many of the current carbon credits, especially the old-growth forest type where credits are issued for not cutting down trees that have been there for years.
Technology-based removal methods are becoming more important, and even cheaper, than natural solutions such as reforestation.
The capacity for CO2 removal (called CDR, for carbon dioxide removal) is still far from the gigaton scale needed to achieve a CO2 neutral world by 2050.
There is a need for greater transparency in verifying the authenticity and duration of carbon removal, increasing liquidity for more efficient trading, and standardizing quality and validation processes across markets. Addressing these issues will increase the integrity of carbon credits, reduce skepticism and expand the market.
McKinsey wouldn't be McKinsey, if the report they produce didn't involve a gigantic market: and yes, according to critical McKinsey minds, this CDR market of technology that removes CO2 is going to be a whopping $1.2 trillion: twelve thousand billion. By 2050, admittedly, but I hold them to it.
In all honesty, I am so elated by McKinsey's report and podcast because I support a project that addresses exactly the problems identified and helps develop a market that McKinsey says will thus grow into a new gigaton industry: Tracer.
Tracer is the answer to the question: how do you scale the carbon credit market from small, opaque and without liquidity, to huge, transparent and liquid? This is extraordinary, because so far the solutions have been either liquid or transparent. Either efficient or reliable.
Tracer solves that with the elegance of a single smart contract, within which - it must be said - it does make the most of what is currently possible in terms of smart contracts. For enthusiasts, the "secret sauce" is the combination of a fungible and a non-fungible token in the same smart contract making it possible to offer buyers a single portfolio with multiple projects as the source of the carbon credits.
Compare it to a "basket" of stocks among fund investors. Buying carbon credits this way from different sources was not possible until now, making this market hell for companies buying large amounts of credits.
Persistence is the key
For example, last week at the GenZero Summit in Singapore, Salesforce's Chief Impact Officer Suzanne DiBianca sighed that when she buys carbon credits for millions of dollars, she receives as documentation "a few PDFs and, with any luck, another Excel spreadsheet. Like it's 1998, but in a billion-dollar market!
What I find special about Tracer is that it offers large buyers such as Salesforce a solution that does provide precisely the full transparency required, through a rating model based on "persistence"; by this is meant the length of time the carbon is removed. Choosing that persistence as the key factor - because some projects provide 100-year removals and others 10,000 years - also ensures right away that large amounts of carbon removal credits are easily comparable and thus tradable.
Combine that with an easy-to-understand business model to build out the ecosystem (a percentage of the number of carbon removal credits created when using the smart contract) and reward holders of the TRCR governance token for their contributions, and you have a proposition that I do appreciate.
Call me
I share this not only because it is rare that I agree so wholeheartedly with the McKinsey people, who often excel enormously at predicting the future well in retrospect. I mean: just look up a McKinsey report from say 1994 predicting the breakthrough of the Internet ... exactly. But I digress.
Because I am sharing this information today because Tracer is offering the opportunity to join before May 31 at an early movers fee, which is apparently blockchain speak for "soft-price-as-you-quickly-bent-friend," before the public sale starts this summer.
The first information on how to join Tracer is here in Dutch and here in English. I know the international team, which is led by Chief Business Officer Gert-Jan Lasterie (Flabber, Coolblue, Mediahuis and author of this standard work on crypto currencies) and further includes specialists from the US, France, Singapore and Taiwan.
Don't hesitate to contact me, because although I am not an expert on the matter, I am happy to explain why I support Tracer so fanatically and invite people to do the same.
What conservative investors think climate technology investments look like.
Elon Musk had a fantastic week and Mark Zuckerberg saw two hundred billion in market cap evaporate as shareholders doubt his billion-dollar investments in AI. Costs are high and potential returns still completely unclear as Meta AI, powered by their latest language model Llama 3, is offered free and open source.
The sentiment that returns are unclear was also often heard about investments in climate tech, yet the world's largest investor BlackRock and Singaporean state investment fund Temasek are investing heavily in this crucial sector through a new fund: Decarbonization Partners.
Those considering investing in the rapidly developing sector of climate tech and decarbonization as well, I look forward to meeting you in May when I am in the Netherlands and Singapore. But first: the surprising week of Elon Musk and Mark Zuckerberg.
After 52 editions, here it is: Tesla is the best-scoring stock of the week. What happened?
Musk wins despite gas pedal glue - yes, glue
It was, as is often the case in the tech sector, a tale of two extremes this week: Tesla soared, while Meta plunged. This is especially notable because Tesla shares had slipped to $138 after reaching an all-time high of $409, while Meta was one of the biggest risers in the stock market over the last year. What happened?
"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."
In other words, Tesla's long-awaited Model 2, the cheapest Tesla ever, which is supposed to be Tesla's version of the Volkswagen Golf, the car for the masses, comes to market earlier than expected. Promptly, TSLA shares rose 12%.
Meanwhile, Musk' s intended opponent in a cage fight between what would have been the two palest fighters in the history of martial arts, Meta's Mark Zuckerberg, had one of those moments when your confidence overrules your sanity.
Zuckerberg punished for candor
During Meta's quarterly earnings presentation, Zuckerberg let slip that it will take "a number of years" before investments in AI will translate into profits. Zuckerberg added truthfully that once Meta has found a revenue model, it will be very good at monetizing it.
Only nobody heard it anymore, much like when a party runs out of drinks and snacks, then the sound system breaks down but the host happily suggests that we all hold hands and sing together. Result: a 16% collapse in Meta's share price and a loss of two hundred billion dollars in market cap.
Meta lost as much as forty-five billion dollars since 2020 via its Reality Labs division on investments in smart glasses and not-yet-existing Metaverse business. No shareholder wants Zuckerberg to lose that kind of money on his investments in AI, while meanwhile the good ole' ad business is doing spectacularly well: also because Chinese discounters Temu and Shein advertise for billions via Facebook and Instagram, ad revenue rose 27% to over $35 billion in the first quarter.
Shareholders think about today, investors think about tomorrow
Shareholders would rather grab dividends than invest. Google owner Alphabet became worth two trillion dollars (two thousand billion) this week after it announced it would pay twenty cents per share in dividends and buy back its own shares for seventy billion dollars. This makes Alphabet the fourth most valuable company in the world after Microsoft, Apple and Nvidia.
This ignored the fact that Google's revenue growth, like Microsoft that presented outstanding quarterly numbers, was also driven by substantial growth (thirty percent) in cloud services, in which AI played a major role.
Yet Google, like all other tech companies, should be valued more on long-term vision and making the right choices in the process. Cloud services, with nine billion in revenue, are almost seven times smaller than ad revenue (62 billion), because for too long there was too little focus on cloud services and AI. Since then, Google has been playing catch-up.
Elon Musk is often ridiculed, sometimes rightly so, but anyone who looks a little longer at his activities has to admit that he possesses the rare combination of skills in being able to analyze the market correctly and subsequently position his own companies in them.
It is no coincidence that Musk, despite OpenAI's late start and dominance with ChatGPT and Google's huge competition with Gemini, managed to raise six billion dollars from investors for his AI company xAI. Last weekend that was supposed to be three billion dollars on a valuation of $15 billion, but then potential investors received an email to this effect:
"We all received an email that basically said, ‘It’s now $6B on $18B, and don’t complain because a lot of other people want in."
Now that is an email I would like to send around sometime, only with a happy smile emoticon at the end.
Elon Musk's pitch for xAI boils down to the company's ambition to connect the digital and physical worlds. Musk wants to do this by pulling training data for Grok, xAI's first product, from each of his companies, including X (formerly Twitter), Tesla, SpaceX, his tunneling company Boring Company and Neuralink, which develops computer interfaces that can be implanted in the human brain. It's a worldview that will generate a lot of resistance, but at least it shows long-term vision.
BlackRock and Temasek raise $1.4 billion for climate tech
Solving the world's biggest challenge, climate change, also requires a long-term vision combined with a willingness to invest billions. The world's largest investment firm BlackRock and Singaporean state investment fund Temasek have therefore raised $1.4 billion to invest in technologies that combat climate change.
Predictably, the Wall Street Journal, widely read by Republican "ho-ho-not-so-fast-it-was-always-hot" investors, does not write about investments but about "wagers": a term used in a casino when putting your chips on red or black.
Greenhushing as bad as greenwashing
Knowing that the capital market looks with suspicion at the results of risky investments in unproven projects, making more and more companies guilty of greenhushing rather than greenwashing, Decarbonization Partners rushes to say that it invests only in "late-stage, proven decarbonization technologies."
It is unfortunate that investing in startups is avoided because there is much need for capital for start-ups, unproven companies; after all, how else will companies ever get to the stage of having proven themselves? It's a bit like saying as a parent that you love your kids as soon as they can walk well; but how they learn to walk, those kiddies figure that out for themselves.
In total, more than thirty institutional investors from 18 countries have invested in the fund, including pension funds, sovereign wealth funds and family offices, and at $1.4 billion it has raised even four hundred million dollars more than targeted.
Investments have already been made in seven companies developing various innovative decarbonization technologies, including low-carbon hydrogen producer Monolith that I wrote about last week, biotechnology company MycoWorks and electric battery material producer Group14. These are developments that are hopeful.
Carbon credit exchange in ... Saudi Arabia
Other hopeful news that has been snowed under in all the stock market turmoil, a rare word in connection with Saudi Arabia, is that the world's largest oil state will open a carbon credit trading exchange at the end of this year in partnership with market leader Xpansiv, which will provide the infrastructure for the exchange.
The announcement of a carbon credit exchange in this region quickly resembles a chicken breeder announcing he is going vegan, but should be seen as part of Saudi Arabia' s larger plan to move to a sustainable economy. It is looking more and more like it is serious, so it will be fascinating to follow what market share the Saudis can capture in the global carbon credit market, which Morgan Stanley estimates to be $100 billion by 2030.
Finally: I'm in May in the Netherlands and Singapore
In closing, a personal note in the fifty-second edition of this newsletter. Looking back over last year, one notices that I write a lot about market developments and investments, whereas thirty years ago I just started as an entrepreneur in the tech industry, launching the first national wide available internet service provider in the Netherlands.
Because I am no longer running a business, which for me always resulted in running with blinders on toward a dot on the horizon, I have the opportunity to mentor various entrepreneurs and help them invest where possible.
Since I started this newsletter, I have regularly received friendly invitations from readers to catch up on possible joint investing. I plan to do that next month; I'll be in the Netherlands and Singapore in May. If you're interested in hearing more about the projects I support, always focused on sustainability and a large international market, I'd love to hear from you.
Two seemingly incomparable conventions took place this week: Singapore sovereign wealth fund Temasek organized EcoSperity in Singapore and sunken Dubai hosted Token 2049, the semi-annual party of crypto bros. In Dubai it was mostly about Bitcoin and in Singapore it was about carbon credits. Two opaque, moderately regulated markets that nevertheless attract billions from investors because of their undeniable usefulness.
Bitcoin halving happened during the EcoSperity climate week
I attended the Climate Summit 2024in Singapore, part of EcoSperity, organized by Temasek subsidiary GenZero, which is trying to make investments that combat climate change with five billion dollars. Much of the talk at this climate conference last week was about the doubts in the "climate tech sector" about the quality of carbon credits since The Guardian and Die Zeit published scathing articles about them last year.
Instead of phasing out fossil fuels, years have been lost and huge investments have been made in the vague carbon offset schemes that trade, limit and capture carbon, without actually reducing the CO2 emissions that cause global warming.
The VoluntaryCarbon Market(VCM) is estimated to be about two billion dollars a year and consists of a complex network of developers, registries, traders, brokers and investors, making it difficult to determine the effectiveness of offset projects.
An old park does not remove CO2
On his show Last Week Tonight, comedian John Oliver took a strong stand against the hot air in carbon credits that made a comeback mainly after COP21, the climate conference in Paris. There, in 2015, nearly two hundred countries agreed that carbon credits would be the most important tool to limit global warming to one and a half degrees.
I attended COP21 in Paris for several days and spent hours listening to experts explain how the "cap and trade" system was going to reduce carbon emissions, but I understood little of it. Unfortunately, my concerns proved to be correct, because research shows that forestry offsetting projects, approved by the world's largest certifying bodies and used by Disney, Shell, Gucci and other large corporations, are largely worthless and may even exacerbate global warming.
The critical media reports have had much effect, because the days when some loopy dictator could designate an old forest whose nonexistent carbon credits were then sold several times over to, say, an unsuspecting European bank, after which the trees were still cut down and the timber sold, seem to be over for good.
There is broad consensus that offsets should only offset emissions that are impossible to avoid. However, the focus should be on ways to permanently remove CO2 from the atmosphere, because just limiting emissions is not enough. Projects that permanently remove CO2 do not generate carbon credits, but the much more relevant carbon removal credits.
Precisely because of the emergence of carbon removal credits, the expectation of Morgan Stanley and others is that the carbon credits market will increase fifty-fold to one hundred billion dollars by 2030. The idea is simple: carbon is becoming more and more expensive, because it is increasingly taxed more heavily, which combined with higher quality carbon removal credits will lead to much more demand at a higher price, which will be imposed by governments.
Good examples of carbon removal projects are:
Bioenergy with Carbon Capture and Storage (BECCS): This technology captures CO2 emissions from biomass power plants and stores them underground.
Direct Air Capture (DAC): These are technologies that capture carbon dioxide directly from the air. The captured carbon can then be stored underground or used to produce low-carbon fuels. Enhanced rock weathering is a strategy to help address climate change by taking carbon out of the air and storing it in rocks. It is one of several “carbon removal” techniques that target carbon dioxide (CO2), the most important climate-warming greenhouse gas humans have been adding to the atmosphere.
Ocean fertilization, or ocean fertilization (OF): ocean fertilization involves adding nutrients, usually iron, to the ocean for the purpose of stimulating the growth of phytoplankton; and for those like me who are not completely at home in the magical world of phytoplankton, which are microscopic marine plants that absorb carbon dioxide through photosynthesis. When this phytoplankton dies and sinks to the ocean floor, it can carry the captured carbon with it and store it for long periods of time.
Although more research needs to be done on possible long-term effects of ocean fertilization, it appears to be a very cheap and effective way to remove carbon and combat global warming.
For those interested in learning more about the need for carbon credits and the issues surrounding their quality, I have written this article with brief summaries of seven relevant publications from Morgan Stanley, Harvard Business Review and S&P Global, among others).
Source: International Energy Agency
How do we achieve and finance CO2 capture?
As companies approach their target dates for "net zero" emissions, they are increasingly turning to carbon credits to meet their goals. Currently, however, at the aforementioned $2 billion market size worldwide, the market for carbon credits is far too small to reduce companies' entire environmental impact.
Climate startups need much more funding to develop their technology. 'Companies need to become earlier funders of carbon removal technology and commit earlier to become future customers', said Meghan Sharp of Decarbonization Partners, a joint venture between BlackRock and Temasek.
It came across as odd at first that Sharp, in particular, who manages the billions from two of the world's biggest investors, was making an appeal to other companies to fund climate technology developers. But she had a point, illustrated by Henrik Wareborn of the renewable fuels technology company Velocys.
Wareborn signed a 15-year agreement with Southwest Airlines. This agreement was signed as early as November 2021, years before Velocys' biorefinery will supply fuel commercially. So Southwest Airlines is actually funding the creation of climate technology it will use itself.
Sharp cited as a second example a billion-dollar loan from the U.S. Department of Energy to Monolith, a clean hydrogen and materials company funded by Decarbonization Partners. This money allowed Monolith to expand its production facilities in Nebraska and welcome Michelin and Goodyear, two of the world's largest tire manufacturers, as customers.
"This is an example of how companies can also play a role, not by funding the project itself, but by making the project more secure and investable through these types of purchase agreements." Sharp said. After all, investors are more likely to invest in a startup that already has revenue guarantees from global companies.
Tesla made $1.8 billion in revenue from carbon credits in 2023
American giants Apple, Tesla and Salesforce are each leading the way in their own ways in the use of carbon credits. Apple , by using carbon credits, made the Apple Watch its first "carbon neutral" product.
Tesla made nearly $1.8 billion in revenue from carbon credits in 2023
Tesla even sells carbon credits, last year for a record $1.8 billion bringing Tesla's total sales from carbon credits since 2009 to nearly nine billion dollars.
Salesforce is the largest employer in San Francisco and named sustainability as its fifth core value back in 2022. The company announced $100 million ito scale and commercialize Carbon Removal Technologiesand even opened its own marketplace for carbon credit projects.
To my surprise, Salesforce's Chief Impact Officer Suzanne DiBianca confessed Tuesday at the Climate Summit that the carbon credits market is still so in its infancy, that after purchasing carbon credits, as proof of transaction the company receives PDFs with sometimes a few more Excel-spreadsheets. In addition, each registry (such as Verra, Gold Standard or American Carbon Registry) uses its own classification system of carbon credits, making standardization and comparison difficult, if not impossible.
Three recommendations from Oxford
A multidisciplinary team from Oxford University recently published an updated version of its carbon credit manual for businesses, called the Oxford Offsetting Principles "flagship guidance " with three key recommendations:
Prioritize reducing your direct and indirect emissions: reduce the need for offsets.
Ensure the integrity of carbon credits: credits must be measured, reported, verified and properly accounted for. Investments that generate credits must demonstrably lead to additional results that would not have been realized without that investment, have a low risk of reversion, and avoid negative impacts on people and the environment.
Provide transparency - Disclose your current emissions, accounting and verification practices, goals and transition plans to achieve net-zero, as well as the type of credits you use, your selection process and the verification processes associated with the credits.
You feel it coming: to my knowledge, there is virtually no company in the world that adheres to these recommendations. It is precisely disclosure, the third recommendation, that should be required by law, just as annual figures must be published.
A world to win for blockchain
Of course, companies themselves must take care to reduce their emissions. But precisely in capturing, reporting and accounting, the transparency and immutability of blockchain can be of crucial value to the entire carbon ecosystem.
Most importantly, the source, the "enabler" of CO2 removal, must be clearly visible and the removal permanent. The proper use of blockchain technology can create a market where, to cite a previously mentioned example, airlines pre-fund the development of sustainable aviation fuel (SAF), as Velocys is paid for by Southwest Airlines. Then governments would not have to step in and only increase the pressure by raising taxes on carbon emissions.
Crypto meets climate
Recently, the UN climate conference COP28 was held in Dubai, where crypto-congress Token 2049 took place this week. While at the same time, Ecosperity Week was held at Singapore's iconic Marina Bay Sands, where the Asian edition of Token 2049 will be held in September. Perhaps the fact that crypto events take place in the same venue as climate conferences underscores that they are not such different worlds as is often thought.
By the way, climate played a major role during the days leading up to Token 2049, when persistent rainstorms in the Gulf region caused massive flooding in Dubai and air traffic experienced major problems. Preparations for Token 2049 also literally fell into the water with flooded exhibition stands, but the event took place without further major problems.
While attention at the halving is obviously focused on Bitcoin's expected price rise, which has already been spectacular since Bitcoin ETFs attracted over $10 billion from investors this year, the halving also has an interesting "energy effect."
With Bitcoin miners earning less after the halving, costs will again be looked at heavily. As a result, Demirors said, the expectation is that miners will look for lower energy costs, more renewable energy and also primarilyturn on their machines during off-peak hours on the energy grid. Hopefully, this will reduce Bitcoin' s carbon emissions.
Demirors points out that it is unusual for Bitcoin to reach a new high in March, just before the Bitcoin halving, whereas in the last two halvings, Bitcoin's new high was reached nine to 12 months after the halving. Therefore, she doubts that Bitcoin will continue to rise quickly to a new record price near or over the hundred thousand dollar mark, as many expect.
Viewed from a slightly greater distance, it is important to follow the movements of the large institutional investors. Then it becomes clear that BlackRock, the world's largest investor with ten trillion (ten thousand billion) dollars in invested assets, has become very active in both markets: Bitcoin and carbon removal technology.
