Interesting food for thought: legendary investor Fred Wilson (Twitter, Etsy, Kickstarter, Coinbase) describes a new business model for Web 3 and perhaps AI applications: minting. At its core: shared ownership with users.
Sam Altman, the founder and CEO of OpenAI, is seeking billions to build a network of chip factories. The goal is clear: become less dependent on NVIDIA. Remarkable that the man manages to raise billions as a side hustle.
Altman, by the way, was a guest of Bill Gates in a podcast, unfortunately recorded before the OpenAI king drama. Watching Bill Gates, surely a great, great friend of Altman's, is never a treat and listening doesn't prove much more entertaining, but the transcript is excellent.
Investor and founder of LinkedIn Reid Hoffman shares his thoughts on "a plausible reality. Note his description of a search for an oasis rather than a mirage.
The technology industry is increasingly suffering from excessive attention to tech founders. Elon Musk continues to dominate the spotlight, whether he is reviving Twitter or tearing it down, depending on whom you ask. Still, the most significant news of the past week was the unveiling of Worldcoin. This project drew attention because of its shiny "orb," which scans the iris of new users, and because of the involvement of co-founder Sam Altman, also the CEO of OpenAI.
It was the week of Barbie and Oppenheimer, or Barbenheimer, and Worldcoin's Orb. Photo: created with Midjourney
Two months ago I wrote about Worldcoin and the company behind it called Tools for Humanity, which then presented itself on its 1-page website with the slogan "a technology company committed to a more just economic system" and raised as much as $115 million for the Worldcoin project.
The goal, the founders say, is to create a global identification system that will help reliably distinguish between humans and AI, in preparation for when intelligence is no longer a reliable indicator of being human. At Worldcoin, verification of humanity is ensured through the use of an Orb, a sphere: a biometric iris scanner.
Shiny happy orb people. Photo: Worldcoin
But according to Alex Blania, CEO and co-founder of Tools for Humanity and Worldcoin project leader, there is a bigger purpose than just identification as a human being:
'We seek universal access to the global economy, regardless of country or background, and accelerate the transition to an economic future where everyone on earth is welcome and benefits'
The definition of a pyramid scheme?
Who is not moved to tears by this noble endeavor? Who is against being welcome on earth? Coindesk visited Worldcoin's headquarters in Berlin and from this brilliant article, "Inside the Orb," the impression emerges that Altman and Blania possess a unique combination of talent, otherworldliness and opportunism.
So they talk about Worldcoin as a crucial step toward a Universal Basic Income (UBI) for the entire world population, because these men think big.
But they are particularly vague when the question is asked who should then pay for that universal basic income for our planet. Altman says of this:
"The hope is that when people want to buy this token, because they believe this is the future and there will be an influx into this economy. New token buyers is how it gets paid for, eventually."
Sam Altman, co-founder Worldcoin
Aha, so the influx of new buyers funds the system. That rings a bell, and I asked ChatGPT, the product of Sam Altman's other company, OpenAI, what the definition of a pyramid scheme is. Here it is:
'A pyramid scheme is a business model in which members are recruited through a promise of payments or services for enrolling others in the system, rather than providing investments or selling products. If recruiting multiplies, recruiting soon becomes impossible and most members cannot benefit; pyramid systems are therefore unsustainable and often illegal.'
I'm not saying Worldcoin is a pyramid scheme. Only that ChatGPT says it looks a lot like one.
Free coins for your iris
A cult of personality is emerging around Sam Altman reminiscent of the golden years of Steve Jobs and Elon Musk. Entire articles are devoted tothe 400(!) companies in which Altman has invested.
Partly for this reason, people lined up in several places around the world last week to have their eyes scanned by Worldcoin's orb. The media cheerfully helped make the hype as big as possible, with service journalism like this article in India, "Sam Altman's Worldcoin is here: how to get your free coin.
Because the system works stunningly simple: download the free Worldcoin app, scan your eyes at an orb, get a World ID and your Worldcoin app instantly receives 25 free Worldcoins; except in America, as Gizmodo experienced. But it's customer onboarding with a simplism and efficiency that would be the envy of a schoolyard drug dealer.
Critics have a point
Twitter would not be Twitter (oh no, it is also no longer Twitter but is now called X, but more on that later), if it were not for a number of astute critics who have analyzed Worldcoin well, such as here and here.
Ethereum founder and widely acclaimed ethicist within the blockchain industry Vitalik Buterin immediately warned of the possible, unintended, bad consequences of Worldcoin's approach:
'Risks include inevitable privacy breaches, further erosion of people's ability to surf the Internet anonymously, coercion by authoritarian governments and the potential impossibility of being simultaneously secure and decentralized.'
Vitalik Buterin, co-founder Ethereum
For now, let's believe Blania and Altman's promise that iris data will be immediately deleted from the orb and not stored. But how many fake orbs will be used by criminals to defraud consumers of their iris scan?
In any case, the question is justified whether a centrally run company should undertake this kind of initiative. World ID is effectively a universal passport, why should it be developed by a commercial company?
Remember, for all the fancy promises and goals, this is a commercial organization and the founders and backers own 25% of all Worldcoin. That's a higher tax rate than VAT. Even stranger: from Asia, I cannot see the pages in the white paper that deal with these tokenomics at all, because they are shielded. A problem more people faced. Why are they shielding information from the same people who are allowed to have their eyes scanned?
Vitalik Buterin's schematic representation of the problem
'Proof of Personhood' is relevant, but not in this way
Cybercrime will only increase in the age of AI, so there is a need for proof that you are dealing with a human being and not a computer program. Just not in the way Worldcoin is tackling the problem. Michael Casey of Coindesk puts it this way:
'The risk is not with the technology per se - we have known for years that AI is capable of destroying us. It is that if we concentrate control of these technologies with a handful of overly powerful companies motivated to use them as proprietary "black box" systems for profit, they will quickly move into dangerous, humanity-harming territory, just as the Web2 platforms did.
Still, there is at least one positive aspect that can emerge from the Worldcoin project. It draws attention to the need for some sort of proof of humanity, which may give impetus to the many interesting projects that seek to give people more control over their identity in the Web3/AI era.
The answer to proving and elevating authentic humanity could lie in capturing the "social graph" of our online connections, relationships, interactions and authorized credentials through decentralized identity models (DID) or initiatives such as the decentralized social networking protocol (DSNP) that is part of Project Liberty.
Or it could still lie in a biometric solution like what Worldcoin is working on, but hopefully with a more decentralized, less corporate structure. What is clear is that we need to do something.
Portable identity and reputation
Casey's line of thinking leads to a system of identification and reputation, where you can use services anonymously, but share your identity and reputation if you wish. My Uber score, for example, is 4.96, but if I want to book a room through Airbnb, I do so as a completely unknown individual.
This is why a landlord is the first to ask for a passport copy, while it would also be valuable for Airbnb and the landlord to know that at least as a passenger in an Uber, I did not demolish or vomit under the cab. Such a system where you as a user carry your online reputation with you and decide for yourself to share at a time you deem appropriate would be extremely useful in the digital economy.
Universal basic income for the world's population is so far-reaching that it should be introduced through normal democratic processes. Let's not leave that kind of major social issue to a few men from Berlin; historically that has not proven to be a happy combination.
Twitter becomes X
It can't have escaped anyone's notice, Elon Musk is turning Twitter into X. What a romantic he is, isn't he, to name his company after his youngest son? He explains that in the coming months "your entire financial world can be orchestrated" from X. Because Musk wants to make Twitter a "super-app," an all-encompassing app that merges information, communication and transactions. Similar to China's highly successful WeChat. Musk wants to get rid of the hated ad model as soon as possible.
Musk will look eagerly at South Asian Grab and GoJek, which will allow users to not only order cabs (on cars or scooters), but also pay their bills and even hire personal shoppers to go to the store of your choice to do your shopping. Of course, with a margin for Grab and GoJek on each transaction.
Every second Musk spends on the overrated Twitter remains a waste of time and a waste of his talent. I still hope one day Musk gets angry about Alzheimer's, cancer and the mental health of humanity and uses his undeniable talents to solve those problems, for example with a biotech company. Musk has mastered development of software, hardware and mechanical innovations, how hard would biotech be for him?
The informative podcast More or Less, from the couples Morin and Lessin, discussed Musk's plans for Twitter in detail this week. It's the only podcast I know of, by the way, in which two couples discuss a specific industry, noting that ex-Wall Street Journal reporter Jessica Lessin is the astute founder of the online trade magazine The Information and Dave Morin is an investor who previously started Path, the most beautiful app of a failed social network I've ever used.
Notable links this week
Bill Gates has a podcast
Speaking of notable podcasts: Bill Gates has started a podcast called Unconfuse Me, and the first edition featured actor Seth Rogen and his wife Lauren as guests. Apparently that's a trend, to appear as a married couple on a podcast. I can hear you thinking, "Bill Gates has a podcast with Seth Rogen, doesn't that sound like Kermit the Frog with Scooby Doo as a guest? It certainly sounds that way, but it turned into an unexpectedly candid conversation about Alzheimer's, home care and recreational drug use, among other topics. Playback at double speed is not recommended.
Barbenheimer does nearly $1.2 billion in a week, Oppenheimer breaks IMAX projectors
The box office success of Barbie and Oppenheimer is unexpectedly huge: Barbie is expected to end the weekend with sales of $750 million and Oppenheimer is approaching $400 million. Even more strikingly, I found that the 70 millimeter version of Oppenheimer in the IMAX is so complex that the film is sometimes out of sync with the sound and even literally breaks. So much for all the doomsday scenarios that "old-fashioned" cinemas would lose out in the streaming era. Good feature films are drawing more audiences to theaters than ever.
Barbenheimer, but made by AI
If Barbie and Oppenheimer were squeezed into one movie, this would be the trailer. I say it too often about AI applications, but it's incredible that this was created entirely by AI: image, sound, video. Above all, the speed at which these kinds of applications are developing is unparalleled. The last time I was so stunned by a technology on the Internet was over 25 years ago when George Michael presented video in a Web browser.
Spotlight 9: Party Q2 at Google and Facebook
Yes, I know they are actually called Alphabet and Meta these days, but admit it, who reads on when those names are in the headline? It was the week when the second quarter results were released so there was a lot of movement in the stock markets. This web page contains a short, handy overview of the results of the major tech companies.
Meta and Alphabet rise, Microsoft falls. Investing in the stock market thus seems like a sprint, not a marathon.
The short-sightedness in the stock markets was demonstrated for the umpteenth time this week. Alphabet and Meta made sharp price jumps, due to higher-than-expected sales while partly driven by currency differences. Granted, Alphabet made 28% more sales on cloud services and that will only increase in the AI era.
However, Meta lost a whopping $21 billion in 18 months on investments in Reality Labs, Meta's business unit that is doing something with all the buzzwords of the last two years, including Web3, Metaverse, AR, VR and anything with difficult glasses. Result: 10% share price gain. How is it possible?
Microsoft, which has taken a tremendously strong position in the field of AI by incorporating OpenAI into the Bing search engine *and* invested as much as $10 billion in OpenAI, a guaranteed hit, was not understood by investors because the investments in AI "do not lead to higher sales right away. Result: 2% decline.
The pink cloud is a schematic representation of my brain as I look at the stock market and see Meta rising, while Microsoft is falling. Photo: created with Midjourney
'The growth in AI has the potential to drive Microsoft's two largest businesses: the public cloud Azure and the more traditional and market-leading productivity software Office.'
CNBC
That is exactly how it is, but investors apparently had a horizon this week that ended with the Friday afternoon drinks.
'Reducing the risk of extinction from apple pie should be a global priority, alongside other societal-scale risks such as pandemics and nuclear wars.'
If this had been apple pie and not AI, the Journal would have opened with it.
Had that been the one-line statement made public last Tuesday by dozens of leaders in the field of AI (artificial intelligence, artificial intelligence), it would have been bigger world news than it is now. Only it did not mention apple pie as a threat to the world, but AI. That made the statement a lot harder for journalists to interpret, because AI is a kind of water of technology: it can be used to give people drinks, or waterboard them. The line between those is clear: It's about who decides to stop drinking.
The fear is that in the case of AI, the software itself decides when something happens. Or stops. I once started blogging and nowadays write this newsletter because it forces me to keep up with my field and then organize my thoughts publicly. So herewith my immodest attempt to put the latest developments in AI into a broader perspective.
Who are these people?
First, that statement last Tuesday, issued by the Center for AI Safety (CAIS, pronounced Kees) whose mission is "to reduce the risks of artificial intelligence on a societal scale. We learned from the Watergate scandal that the first thing you do is follow the flow of money, so where does Kees get the money? The Open Philanthropy Foundation donated over $5 million and is in turn funded by former Wall Street Journal reporter Cari Tuna and Dustin Moskovitz, one of the founders of Facebook. (You can guess for yourself whose piggy bank of that couple was turned over the most for this donation. Oh well, at least the money Facebook makes from selling out its users' privacy will be spent on something useful).
In Europe, tricky dossiers usually involve a covenant between government, industry and a party that policymakers describe as ''civil society'' in those kinds of papers that nobody reads. America is the land of the one-liner, so there they arrived at this chunky phrase: ''Reducing the risk of extinction from AI should be a global priority, alongside other social-scale risks such as pandemics and nuclear wars.''
And that was it, that's all there is in the 22-word statement. It led to rather vacuous media reports from which you can almost read the reporter's despair. Like "my goodness, do I now have to explain to what extent this statement is similar to Robert Oppenheimer's on the danger of nuclear weapons, or shall I just list the list of signatories? It became mostly the latter, of course, and you will recognize most of the names from previous newsletters. CNN bravely lists, "The statement was signed by prominent industry officials, including OpenAI CEO Sam Altman; the so-called "godfather" of AI, Geoffrey Hinton; top executives and researchers at Google DeepMind and Anthropic; Kevin Scott, chief technology officer of Microsoft; Bruce Schneier, the pioneer of Internet security and cryptography; climate advocate Bill McKibben; and musician Grimes.
Who didn't sign?
The latter is kind of funny, because Grimes is the baby mama of as far as we know the youngest son of Elon Musk, who is even named X Æ A-Xii because it is the elven spelling of the term AI. (Read that last sentence again and realize that this is a defenseless child.) The very name Elon Musk was missing from the signatories. Other people who conspicuously did not sign the statement, and whose names it seems to me would have made sense if CNN had inquired why, are Jeff Bezos (founder and chairman of Amazon's Supervisory Board), Sundar Pichai (CEO of Alphabet, Google's parent company, man of this brilliant speech), Andreessen Horowitz (the leading investor in technology companies), Mark Zuckerberg (CEO Meta, formerly known as Facebook, buyer of former competitors like Instagram and Whatsapp) and Peter Thiel (financier of, among others, LinkedIn, Yelp, Facebook and Palantir and through his Founders Fund also Airbn and Space X). And further missing are just about all players in the technology field from India, South Korea, Japan and China.
All of these parties have the knowledge, clout and motivation to become a major player in the global market for AI applications. And they have not signed the no doubt well-intentioned declaration to take care that the world does not perish to AI. Of course, that doesn't mean that the chief bosses of the tech world will try to destroy the world with AI; after all, killing off the world's population would be bad for their quarterly numbers.
What about Bill Gates?
Microsoft co-founder Bill Gates publicly hopes that Amazon and Google will lose out to AI. Furthermore, he has little influence on the public debate about AI; it is no coincidence that CNN did not even mention Gates in the list of signatories and even Elon Musk's ex did. I place little value on the predictions about technology from the man who, in his November 1995 book The Road Ahead, called the Internet not the future, but a dirt road compared to the information super highway he himself would build in the form of MSN.
It remains incomprehensible to me that Gates does not provide more analysis on the business aspects of technology, but continues to muse on the social implications. Because precisely as an entrepreneur, he remains, in my view, unparalleled. His vision is brilliant when measured over say 24 months, not 24 years.
Remember from Bill Gates especially these two achievements:
IBM was looking for an operating system for their new product, the personal computer, in 1981; Gates had nothing on hand but bought the obscure Quick and Dirty Operating System (QDOS) from a small software maker for seventy-five thousand dollars, changed the name to MS-DOS (because the spotless IBM could not do anything with the word Dirty) and did not sell the software, but licensed it to IBM on a non-exclusive basis. That form of licensing was virtually unknown in the software world. Primarily on the basis of this one deal, Microsoft became the most valuable company and Gates the richest man in the world.
In 1995, Microsoft was the most powerful company in the technology world and Gates the world's richest man. Only, the whole image of Microsoft and Gates was focused on a world where computers barely worked together, let alone communicated together or enabled transactions. While Jeff Bezos was a few miles away building Amazon into an e-commerce machine and would follow in Gates' footsteps as the world's richest man, Gates wrote a memo to the top of Microsoft that would become known as "the Internet tidal wave. In fact, Gates said, "I was wrong. We need to make all our products Internet-capable.' I had never seen a CEO confess his own mistakes in such a way and have the entire corporation turned around and focused, in such a short time. Admitting that he had overlooked the Internet struck me as great. (And I was relieved, because my brainchild was called Planet Internet and it's not good to wake up every day thinking the world's richest man is saying your product sucks.)
His book The Road Ahead would come out six months later and already be dated upon publication. It was especially odd because Gates had so strongly emphasized the importance of the Internet in his memo. The Internet, Gates orated in his book, was built on antiquated technology and therefore too limited to transmit information, communications and transactions over it on a large scale.
What happened next was as hilarious as it was symbolic, because his book required a second version as quickly as his software did: just a month after the book was published, Gates began work on a second version, which appeared in October 1996 and was no less than 20,000 words longer, just as his software counted more and more lines of code. In the second version of the book, Gates made the Internet much more central.
The only thing I liked about The Road Ahead was that Gates had written it with then Microsoft CTO Nathan Myhrvold, a former world barbecue champion who had studied under Stephen Hawking. From Myhrvold, I would have liked to have read more.
Bill Gates is like a nerd version of Marco van Basten: a top player who is phenomenal as an analyst, but failing as a coach. I sincerely hope Bill Gates will write about applications of AI, about business models, opportunities and threats; about everything except what it will mean for society. And full disclosure: my opinion of Gates is independent of my own experiences with him and Microsoft in the browser war.
Impact, a Belgian employment agency for technicians, came up with this nice advertisement
Why is AI so promising and so dangerous?
Far more important than Gates' opinion on AI, I found this article about an officer in the U.S. Air Force who gave a reflection on a drone that went wild because of AI and wanted to kill its own driver. The first gasp was that this actually happened, but apparently it was just a scenario being discussed in the U.S. military. Thank goodness, because it is the ultimate Terminator nightmare when the monopoly of violence falls to computers.
While a huge technological achievement, even Nvidia's new supercomputer, which I wrote about last week, will not lead to a mass breakthrough of AI applications. Such computers are so expensive and complex that only a small number of companies have the capabilities to use them properly. Of course, it is a huge revenue generator for Nvidia, as Amazon, Microsoft, Meta and Google will gladly stock this computer en masse, but it is precisely open source AI that seems to be the definitive breakthrough of AI.
These are not my words, but this is according to a leaked internal Google document. According to the leaked document, the open source AI community is so active and highly developed, that as soon as more accessible development capabilities emerge, both OpenAI and Google are hopeless. While OpenAI and Google use "proprietary" LLMs (Large Language Models), the models in open source are actually ready for public use. This makes the group of global developers larger than the OpenAI and Google staffs, the thinking goes.
Hooray for QLoRA?
And now it appears those cheaper tools will be available within a year! Because it seems to be possible to develop AI applications on some out of the box gaming PCs. LLMs used to develop generative AI applications can normally only run on enormously powerful computers. That is the reason for the explosive price increases of the makers of such devices such as Nvidia and Marvell, which I wrote about last week. As one reader sent, "QLoRA completely changes the landscape. You can use the same 8x80GB on a single 48GB card. From an $8x15K piece of kit to a souped-up PC.'
Translated into slightly more normal Dutch: the fact that you can cram 96 billion 4-bit weights into 48GB (which is huge) means that AI development is now available to hobbyists. What normally costs a ton of equipment can now be done for a few thousand Euros. For enthusiasts: here the scientific article. And here the tweet predicting that within a year these computers will be commonplace.
AI for Do-It-Yourselfers
The question is what applications will be built if hobbyists, enthusiasts and rogues will have the ability to create AI applications. And the follow-up question is how to monitor and regulate this, if at all possible.
Artifact, from the founders of Instagram, is a personal news reader. Just downloaded, but not yet tested, with the slogan: "Finally, an AI-driven news feed with you in control. Because no startup can do without the word AI in its slogan in 2023. I'd love to hear readers' opinions, anonymity guaranteed.
Meta (Facebook's) wants every employee assigned to a particular branch to show up at the office at least three days a week starting in September. Unfortunately, it is not clear what percentage of employees this will apply to. It remains to be seen whether this will cause many talented employees to leave, as as many as 150,000 jobs were lost in the US tech sector this year alone.
Event of the week: ATxSummit Singapore
A not-so-subtle humblebrag: the creator of your Sunday tech newsletter is participating Tuesday in a panel on Web 3.0 beautifully titled "Everything, Everywhere, All at Once. It's part of the ATxSummit in Singapore, where "governments, businesses and knowledge centers gather to discuss the role of technology in our shared digital future.
27 recipients of an email about a panel in Singapore with four participants
People often ask what working in Singapore is like, and I usually answer that question with "intense. Everyone is professional, from a receptionist to a minister, focused and dedicated. At the same time, I worry about whether people are relaxing enough and not working too hard. See above screenshot of an email about the preliminary online meeting on our panel, which consists of only four participants and yet went out to 27 people. You'd think this would lead to a huge bureaucracy, but officials, for example, answer email inquiries substantively within three business days. Sometimes I begrudge everyone in Singapore a daddy or mommy day a week.
Since I will have access to a make-up artist, something that has been at the top of my wish list for years, I expect there will be a livestream that I will share through my accounts on Twitter, LinkedIn and Instagram. The panel will take place from 9 a.m. to 9:45 a.m. Dutch time. Advance warning: it's only for the connoisseur/lover of concepts like "participatory data" and "decentralization of identity.
Topping the Spotlight 9 inside: Nvidia
For years, the technology sector has been talking about a handful of dominant players: Alphabet (Google's parent company), Amazon, Apple, Facebook (now Meta) and Microsoft. Since this week, we can count Nvidia among them, which passed Meta in market value. For a while, Nvidia was even "a trillion dollar company," or worth more than a trillion: a thousand times a billion. (A billion in English is a billion and a trillion in English is a trillion. They are not the inventors of the useless inch and driving on the left for nothing).
Meta past in market value, 175% increase this year: Nvidia belongs in Spotlight 9
Therefore, in my completely arbitrary survey of key economic indicators for the tech world, my Spotlight 9, I threw out the Dow Jones Index and replaced it with Nvidia. After all, for the overall market, the S&P 500 is already in the list, for crypto the tokens Bitcoin and Ethereum, and that leaves no fewer than six indicators of stock market sentiment for the tech sector.
But beware: anyone who buys a share of Nvidia now does so at a P/E ratio of over 200! Compare that to Apple, with a P/E ratio of 30, and then I dare say it is unrealistic to expect Nvidia to grow more than six times as fast as Apple. In other words, Nvidia stock is extremely expensive, regardless of that AI-driven demand for GPUs and the new Nvidia supercomputer.
Speaking of Apple, I wrote, to the annoyance of a number of Apple employees who I thought I could count among my circle of friends until that article, about the long-awaited Apple mixed reality headset, probably called the Apple Reality Pro. This device, the first all-new device since the Apple Watch in 2015, is expected to be unveiled at WWDC on Monday. If it really is something special, I will write an extra edition of this newsletter on Tuesday morning. If not, thanks for your interest and see you next week.
