It seemed like a quiet week on the technology front, until everything happened in the last few days. Former Google CEO Eric Schmidt announced a new nonprofit organization that hopes to solve the biggest scientific problems with AI, the stock price of Europe's fintech darling Adyen collapsed, crypto also took hits with a sharp drop in Bitcoin and XRP, a lawsuit was filed by disappointed Bored Ape NFT buyers against auction house Sotheby's and the fund with Arab oil billionaires makes $8 billion in profits on ... computer chips. At the last minute, a car from Croatia broke Tesla's records.
Using AI to save the world?
Former Google CEO Eric Schmidt is building an ambitious new nonprofit organization to tackle major scientific challenges using artificial intelligence. Schmidt wants the new organization to attract top AI scientific talent to create breakthroughs in as many complex fields as possible, from drug discovery to materials science.
Schmidt unfolded his vision last month in an article in MIT Technology Review titled This is how AI will transform the way science gets done.
"With the advent of AI, science is about to become much more exciting - and in some ways unrecognizable. The reverberations of this shift will be felt far beyond the lab; it will affect us all," Schmidt wrote.
Previously, Schmidt invested in DeepMind (bought by Google), OpenAI, CloudMinds, Vicarious, Cogitai and Elemental Cognition. At least, so says the chatbot Pi from Inflection.ai, another AI company Schmidt invested in. Inflection.AI is a San Francisco startup that develops conversational AI chatbots. Two months ago, the company raised as much as $1.3 billion in a funding round led by Schmidt, Bill Gates and Nvidia.
Long list of Schmidt's AI investments
Pi forgot to mention Anthropic, SandboxAQ, Upstart, Rebellion Defense, Urban Engines and Mistral, which I wrote about earlier, so the old-fashioned overview on Crunchbase seems more complete. The various AI technologies these companies are developing include chatbots, quantum computing, cloud-based systems and AI that learns like humans learn. The applications of these technologies are diverse and far-reaching. They range from drug discovery and robotics to translation and personal assistants.
Schmidt has become the world's leading investor in AI, not shying away from investing in companies that are each other's direct competitors. This may yet lead to problematic situations in the future, but for now, no company seems to mind and his money, knowledge and network are welcome everywhere.
Nobody is always lucky, and Schmidt also suffered a personal setback in the outer category of "first world problems" this week, when it turned out that the superyacht Alfa Nero he thought he had snapped up back in June is still not released to him. Fortunately, Schmidt has another boat to get through the summer on, the nearly half-century-old converted icebreaker Legend. I don't know Schmidt personally, but have a soft spot for someone who converts a 1954 icebreaker.
Spotlight 9: Adyen, Bitcoin and XRP down, Nvidia rises again
I usually end my newsletter with a quick look at the major public tech assets that I believe most strongly influence the tech world, in a column for which ChatGPT coined the name Spotlight 9. The share price drop experienced by Adyen and the crypto world in recent days deserves more attention this time. Nvidia, maker of the chips needed to run AI applications optimally, on the other hand, is experiencing heyday with yet another billion-dollar order, this time from the Arab world.
Adyen plummets due to slowing sales growth
What happened. Adyen's share price took a huge hit this week, falling about 39%. The Amsterdam-based company presented quarterly figures with an unexpected slowdown in revenue growth and a drop in profits, which led to a wave of selling of the stock by investors.
Adyen shares recorded a decline Friday for the sixth consecutive session, marking the longest downward trend since Sept. 1, 2022, according to Dow Jones Market Data. In these six days, the price plunged by more than 45%, the largest six-day drop ever in Adyen shares.
Adyen deserves credit for not taking part in all the rounds of layoffs in the tech world and even attracting over 500 new employees, whom it would probably normally have had a harder time bringing on board in a more competitive job market. Management chose the long term over the short term, and that is to be commended.
But in particular, the decline in growth in the world's largest market, the United States, is a bad sign. Competition in the U.S. (including Stripe, Braintree, Fiserv and PayPal) offers a similar service at a lower price, according to Adyen CEO Pieter van der Does, implying that Adyen will structurally lose either market share or part of its profit margin.
Adyen is named after the Surinamese word for "again," after the founders were previously successful with the payment company Bibit. Hopefully management will succeed in reviving a payment company again, in fact for a third time. Adyen, adyen!
After China, Nvidia also scores in the Arab world
Just last week I wrote about the billion-dollar order placed by the Chinese Internet giants with Nvidia; this week the Financial Times reported that the Saudi government, through the highly respected King Abdullah University of Science and Technology(Kaust), has purchased at least 3,000 Nvidia H100 chips, worth about $40,000 each, according to the Financial Times. In short, a $1.2 billion order.
The order size of the United Arab Emirates' order is not known exactly, but it is known that it involves "thousands" of Nvidia GPUs for its own open-source large language model, Falcon, developed at the state-owned Institute of Technological Innovation in Masdar City in Abu Dhabi. Together, these orders again mean several billion in revenue for Nvidia.
The question remains as to what margin Nvidia is making on the very expensive H100 chips, and a fascinating report appeared on Friday about this very subject , showing that Nvidia is making almost 1000% gross margin on the H100. It is notable that this article talks about a retail price per H100 of $25,000 to $30,000 while the FT calculates with the $40,000 common in the market.
In any case, this conclusion about Nvidia seems justified: 'with expectations of the AI accelerator market being worth around $150 billion by 2027, there's seemingly nothing else in the future but green.' It's simple, any AI player can't do without Nvidia's chips.
Bitcoin sensitive to something old-fashioned: rising interest rates
Bitcoin prices dropped suddenly late Thursday after reports of hundreds of millions in sales, causing carnage in the futures and spot markets.
Bitcoin fell 11%, but remains about 60% above where it started this year, beating other well-performing assets such as technology stocks. But a host of headwinds - from rising bond yields to regulatory pressure and economic weakness in China - are undermining the appeal of cryptocurrencies.
For example, XRP fell Friday for the fifth day, down 12%, as the U.S. Securities and Exchange Commission asked a federal judge for permission to appeal the ruling that Ripple Labs' XRP token is not subject to securities laws when sold to the general public. Despite the drop of as much as 20% this week, XRP is still posting nearly 53% gains this calendar year.
Notable links
I end this week with links to a few things that caught my eye, in no particular order.
Sotheby's sued by ape buyers
That's a headline no one could have imagined roughly three years ago. Buyers of Bored Ape NFTs are suing Sotheby's because, the argument goes, Sotheby's sale for $24 million of Bored Apes to FTX gave Bored Ape NFTs "an air of legitimacy."
Sotheby's allegedly said the buyer was a traditional collector rather than what later turned out to be a rogue crypto exchange, giving other buyers an overly rosy view of the demand for Bored Apes. Yet buyers of Bored Apes who now complain about the value resemble people who bought a ticket to the movie Titanic and complained afterwards that they already knew the ending.
#PrayforJustin
It is not to be expected that Justin Bieber would join the complainers, but very little fun has been had by the singer with his Bored Ape #3001. Bieber reportedly paid $1.3 million in ETH, but the monkey is currently worth only $39,000. Madonna and Steph Curry' s monkeys aren't doing much better. Fortunately, they can handle it.
Arm leads the way to stock market for Instacart and others
The Financial Times reports that some of Silicon Valley's largest private tech companies are dusting off long-delayed plans to take their shares public, with the upcoming IPO of chip designer Arm set to be a new gauge of market sentiment. Arm is expected to announce the IPO tomorrow, Monday, Aug. 21.
Instacart, software company Databricks and Socure, an identity verification startup, are among the other companies considered as candidates for an IPO, according to FT. Instacart's valuation is expected to be only a quarter of the valuation in its last private financing in 2021, which was around $40 billion.
It was announced yesterday that Softbank bought 25% of Arm shares from Vision Fund 1 at a valuation of $64 billion, roughly in the expected price range of the IPO. It is odd that such a large sale should occur just before the IPO, but Reuters reports the reason: the deal eliminates a possible dump of Arm shares after the IPO, as Vision Fund planned to monetize its stake soon after the IPO, while SoftBank has indicated it will remain a long-term strategic investor.
$8 billion profit
Softbank is actually buying back the shares, because in 2017 it sold these 25% shares of Arm for $8 billion to Vision Fund, whose major shareholders, the sovereign wealth funds of Saudi Arabia and Abu Dhabi, at a valuation of $64 billion, thus book a profit of no less than 100%: 25% of the shares for $16 billion minus the purchase price of $8 billion is still a pleasant $8 billion profit. The selling parties are the same countries that just placed the billion-dollar order with Nvidia, no doubt backed by their recent success with technology investments.
However, no one expects these IPOs to lead to a renewed bull market, but it does indicate that at least the stock market climate is not deteriorating further. So far this year, only $14 billion has been raised in IPOs on U.S. stock exchanges, compared with $241 billion currently in the record year 2021 for IPOs, according to data compiled by Bloomberg.
Food bank became tourist attraction
When a food bank is touted as a city's third tourist attraction, AI is quickly pointed to as the culprit. But the very "human surveillance" that compiles algorithmic content on MSN had somehow overlooked a list of tourist hotspots in which the food bank ranked number three. It is unclear how many tourists actually showed up at the food bank for a tour.
'You Should Kill Your Startup'
Couples Morin and Lessin's podcast "More or Less" discusses the biggest taboo in the startup world: when to give up and close the company. It's an unpopular topic and therefore deserves applause. It's not a podcast they recorded thinking "this one's going to be a hit".
Can't understand the dialogues on Netflix? You're not the only one.
Many people stream programs and movies with the subtitles always on - and not because it's cool, reports the New York Times. 'In big movie productions, professional sound mixers calibrate sound levels for traditional theaters with speaker systems that can deliver a wide range of sound, from spoken words to loud gunshots. But when you stream that content through an app on a TV, smartphone or tablet, the audio is "down-mixed" or compressed to send the sound through small, relatively weak speakers.
The solution: buy external speakers. For viewers on laptops or tablets, this is still the best test of various headphones showing that the most expensive models do not always offer the best sound.
Marques Brownlee drove the fastest electric car in the world
The fastest electric car in the world comes from Zagreb, Croatia and is called the Rimac Nevera. The Nevera broke a special world record - the world record for breaking world records in one day (23). YouTuber Marques Brownlee drove the Nevera and this is what happened when he applied full throttle from a standstill.
The day before yesterday it was announced that the Rimac Nevera broke the Tesla Model S Plaid Track Pack electric car lap record at the legendary Nürburgring by a whopping 20 seconds. The Nevera's performance is downright absurd. The motors generate 1.4 megawatts of power, or 1914 horsepower and a whopping 2360 Newton meters of torque. The Dutchman in me is now thinking: what a big caravan could fit behind that! The Nevera accelerates from 0 to 100 kilometers per hour in just 1.74 seconds and has a top speed of 412 km/h. Can't get any faster, you'd think....
Car on dinosaur blood faster after all
How can a "regular" hybrid car with almost 900 HP less, which houses not only an electric motor but also an old-fashioned internal combustion engine running on dinosaur blood, the Mercedes-AMG ONE, still be 25 seconds faster than the Rimac Nevera? The answer is simple: cornering.
Every electric car owner does what Brownlee did in the video, which is press the gas pedal on a straight road. But the Nordschleife has 73 corners and the Nevera weighs 2150 kilograms, while the Mercedes-AMG ONE weighs "only" 1695 kilograms. Combined with the particularly efficient downforce (downward aerodynamic pressure) of the AMG ONE, ironically a quality that Mercedes' Formula One car has lacked for two years, the Nevera is simply too slow in the corners. Although slow is a relative term in this segment.
As an expert on the subject, since I am, after all, a former apprentice editor at the Dutch car show The Holy Cow and producer of the TV report on the 1987 Open Dutch Car Washing Championship, I recommend first watching the video of the Rimac Nevera on the Nordschleife and then seeing how the Mercedes-AMG ONE set the lap record.
