Mostly declines in tech and crypto this week, with Nvidia and Tesla (once) on the positive side
Nvidia is about to overtake Apple and become the second most valuable company in the world as the biggest beneficiary of the surge in AI application adoption that has made the iPhone maker the biggest Wall Street company by market value for years.
The reliance of virtually all artificial-intelligence applications, such as OpenAI's ChatGPT, on Nvidia's high-performance chips has helped Nvidia's stock value nearly triple in the past year to $2.7 trillion ($2.700 billion). By comparison, Apple has a market value of 2.9 trillion.
Even Microsoft's market value is closing in on Nvidia. At the close of Wall Street on Friday, Microsoft was worth $3.09 trillion. Bizarre but true: Microsoft shares rose 12.06% this year, barely more than the S&P 500 (11.27%).
But while Apple's P/E ratio is 30 and Microsoft's is 36, Nvidia is estimated by investors to be as much as 64 times annual earnings. Nvidia posted revenue of $26 billion in the first quarter of fiscal 2025, up 18% from Q4 and up 262% from a year ago. Net profit was $14. 88 billion, up $2 billion from the previous year.
It is hard to imagine, but with even slightly sustained growth and continued P/E ratios above 60, Nvidia will have passed both Apple and Microsoft and become the world's most valuable company before the end of the year. That is the economic reflection of the global AI wave.
Recommended: webinar on AI applications
Every reason to learn more about what AI can do for your organization. For those interested in learning more about how AI and especially custom GPTs can be used to generate leads and improve services, NXTLi is hosting a webinar on Friday, June 7, at noon, for which you can register here.
The reason this newsletter appears later than ever is due to the fact that I spent hours calculating, because I didn't trust my math. Walked the dog and then calculated everything again. But the result remains the same: those who bought the biggest tech stocks last year did worse in terms of returns (up 34%) than those who focused on AI stocks (up 96%). Yet even AI stocks, even if you pick the best performing ones, lag far behind the big winner over the past year: crypto. And then we didn't even have to choose critically. Anyone who bought the nine largest crypto tokens at the end of May 2023 would now have earned a return of 189%.
My Spotlight 9, consisting of the largest tech stocks and two leading cryptos, Bitcoin and Ethereum: average +71% in the last year
Nvidia: technical marvel and stock market miracle
Exactly one year ago, I first wrote about Nvidia, which then posted 64% revenue growth compared to the same quarter in 2022. This week, Nvidia presented jubilant quarterly results, with a 262% increase in revenue and an eye-popping 462% increase in earnings. It seemed like a good time to compare Nvidia to other tech stocks, AI companies and the biggest cryptos.
Anyone who looks at Nvidia with an even slightly longer lens, for example, at the stock since Nvidia's IPO in early 1999, will be astonished, as I am, that the shares have risen from a split price of $0.25 to over $939, representing an unimaginable gain of 375,500%. Three hundred seventy-five thousand percent. And a half.
Many investors found Nvidia overvalued last year, with price-earnings ratios above sixty. Most tech investors also have little use for crypto. So the presumption is that very few investors followed "my" Spotlight 9. Admittedly, neither have I myself! The 10-for-1 stock split (buy 1, get 10 shares) announced this week makes NVDA stock much more accessible to retail investors.
Remove Nvidia, Bitcoin and Ethereum from my (obviously very arbitrary) Spotlight 9, the returns of Alphabet, Amazon, Apple, Meta, Microsoft and Tesla are only 34%. Many so-called insiders often talk about FAANG (Facebook/Meta, Apple, Amazon, Netflix and Google/Alphabet), but I really don't understand why Netflix is in that so-called basket of digital market leaders and Microsoft is not? It is the largest company in the world by market value and also a 49% shareholder in OpenAI.
I digress. The 34% price gain of Spotlight 9 shares without Nvidia, Bitcoin and Ethereum is obviously not at all wrong. But those who had simply bought an S&P 500 tracker also made a very fine 26.14% gain. With lower costs and less hassle.
The basket of stocks I compiled as 'AI stocks': 96.33% return in the last year
AI stocks beat Big Tech
Early this year, I tried to create a sort of counterpart to Big Tech with the AI Spotlight 9, to quickly compare their performance. Only: Nvidia and Microsoft are the biggest players in AI and thus belong in the AI Spotlight 9, alongside AMD, Broadcom, Crowdstrike, Gigabyte, Palantir, Snowflake and Super Micro.
It is striking that Super Micro has outperformed Nvidia, with a whopping 303% share price gain, by "only" 173%. Simply because Super Micro was undervalued, more unknown and now probably a touch overvalued.
Just how hot the market is for AI companies is evidenced by the fact that anyone who bought this basket of nine very subjectively chosen by me on January 1, stocks that I believe are benefiting from the AI wave, would have made a whopping 64% return. (I know that at least one reader bought the entire month's basket, but again: it's not me myself).
To put this 64% in perspective, that's a return within five months, compared to 34% in an entire year from the Big Tech stocks in my "old-fashioned" Spotlight 9: Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.
Not AI, but crypto eats the world
For a while, that's why I felt smart, until I started on the third "basket": crypto. It turns out to be the old song. If you're playing poker and you don't know who the fool at the table is, it's you. Note:
The nine largest cryptos measured by market value in the last year: +189% and Solana as the outlier with 750% increase.
These are the performance of the nine largest cryptocurrencies, measured by market value, over the last 365 days. Granted: it helps that this measurement takes place within 48 hours of the unexpected approval of an Ethereum ETF by U.S. monetary watchdogs, after which prices rebounded.
But even without this recent tailwind, the crypto market has skyrocketed in the last year. To be honest, I didn't see it coming. But all that reading of white papers, annual reports, interviews with top people and clients notwithstanding; I should have just bought a basket of the ten biggest cryptos and made 189% price gain without thinking. Pay particular attention to Solana, which rose 750% in one year!
Biden discontinues fight against crypto
The crypto market has the wind in its sails from all sides. Interest rates are not doing anything crazy and Donald Trump has already announced that under his reign the crypto market will not be given a leg up, much to the irritation of the Democratic camp.
The problem for the Democrats is that the continued backlash against the crypto market does not generate votes, but costs votes. Politically, this is a futile strategy. So Biden is bound to cave and the sudden approval of an Ethereum ETF cannot be separated from the new political winds.
Meanwhile, though, the question remains as to which applications are actually innovative and of any use. Web3 games are still getting a lot of attention, but are still in incubation stage.
Those delving into blockchain developments often come across the term RWAs: Real World Assets, which BlackRock seems to have great interest in. Think of tokenizing, for example, bonds, real estate or, as the Tracer project aims to do: carbon removal credits.
Last Thursday, I spoke with Chief Business Officer Gert-Jan Lasterie and Chief Technology Officer Philippe Tarbouriech in an approximately 45-minute webinar, which can be seen here.
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 precisely funded by Microsoft, it has plenty of money and an IPO could be years away. Plus: the really big windfall will already have the first shareholders up for grabs.
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 the purchase of 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.
