Tag: carbon credits

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AI invest technology

Apple, Microsoft and Nvidia invest in OpenAI despite $158 loss: per second

Summer is over so starting next weekend, this newsletter will again be weekly instead of monthly. With apologies for the late mailing, herewith the most notable recent topics covered in this newsletter:

  • OpenAI loses $158 per second yet is worth $100 billion
  • Nvidia breaks revenue records but is very silent on customer success
  • Shares of AI-driven companies rose sharply in August
  • Energy consumption of AI threatens climate goals of Big Tech companies, appear to try to change the rules of the game 
  • Telegram and other social media are obviously being targeted by governments
  • podcast of Taylor Swift's boyfriend, and his brother, to Amazon for $100 million
  • Midjourney will make hardware

OpenAI loses $158 per second but is worth $100 billion

According to The Information, OpenAI, maker of ChatGPT, is fast heading for a $5 billion loss this year, or: $158 per second. This is a negligible run-up loss in the eyes of CEO Sam Altman and his supporters, as he appears to be successfully raising new funding at a valuation of $100 billion. That compares to the value Facebook had at the time of its IPO in 2012, but Zuckerberg did make $1 billion in profit!

Interestingly, the three most valuable companies in the world, Apple, Microsoft and Nvidia, apparently consider participating in this investment round. Thrive Capital as lead investor is doing $1 billion and Nvidia $100 million. That's a hefty sum, but how far does that take OpenAI?

How well is Nvidia doing?

At an annualized loss of $5 billion, OpenAI can go on for a scant week with that $100 million from Nvidia, which itself posted second-quarter revenue of $30 billion with a net profit of $16.6 billion. So it only takes the chipmaker thirteen hours (!) to earn the $100 million it invested in OpenAI. A nice tip for keeping a big customer happy.

Is Nvidia doing well or badly? Opinions vary.

Nvidia's performance is being interpreted in different ways. People from outside the tech industry, such as financial analysts, do not seem to understand that the manufacturing problems Nvidia is experiencing in producing the new Blackwell chip are temporary.

A company's performance is determined by a combination of revenue, growth and profit. Nvidia's sales will be fine for the next few years, due to a lack of competition and the huge demand from the Big Tech companies that develop AI applications or provide platforms for AI developers: Microsoft, Amazon, Google, Oracle and Salesforce are just a few of the customers who cannot drive their AI efforts without Nvidia. So aside from revenue, Nvidia's profit margin is in good shape for now.

A bigger problem for Nvidia is the growing doubt that all those customers can make healthy profit margins on their AI investments. So far, those hoped-for profits are failing to materialize, and that does represent a long-term concern at Nvidia. Top executive Jensen Huang is very quiet when asked about his customers' return on their AI spending at Nvidia. The question becomes how long for Huang silence is golden.

August was a fine month for AI companies.

AI Spotlight 9 rose sharply in August

While NVDA shares rose over 11% last month, it was also a fine month for many other companies benefiting from the rise of AI. Super Micro took a huge hit after it failed to produce its annual results on time.

My totally subjective AI Spotlight 9 has been updated and I have added Arm (chips), Arista (networking) and Marvell (chips). After all, Nvidia, Google and Microsoft are already in the "regular" Spotlight 9 of leading tech investments.

The S&P 500 closed very close to its all time high on Friday August 30th. Shares rose in the last 10 minutes of trading on Wall Street, with the S&P 500 up 1% and all major sectors on the rise. But the outlook for September is less bright.

Since 1950, the S&P 500 has generated an average loss of 0.7% in September and finished higher only 43% of the time, making September the worst month for stocks based on average return and positivity percentage. The past four September months have also been remarkably weak, with respective declines of 4.9%, 9.3%, 4.8% and 3.9% for the index. It will be interesting to see how tech stocks and especially AI companies do in the coming weeks.

AI versus climate

Due to the huge growth in data center energy consumption in pumping AI applications like ChatGPT and Google Gemini, tech giants risk missing their climate goals, usually ambitiously defined as "net zero," or carbon-free operations. There is great concern that smart techbros like Bezos are indirectly manipulating the definition of zero emissions

The Financial Times is particularly concerned about the influence of Amazon and Jeff Bezos's $10 billion Bezos Earth Fund on the carbon credits market, especially through its funding of the Science Based Targets Initiative (SBTi). The SBTi sets standards for corporate climate goals, but experts worry about potential conflicts of interest as large technology companies, including Amazon, want more flexibility in using carbon credits to achieve net zero targets.

This influence could change the way climate standards are set, potentially favoring cheaper carbon credits over actual emission reductions. Compare it to a penalty taker in soccer who often misses, upon which he decides to make the opponent's goal thirty feet wider and higher. And as a goalkeeper a garden gnome.

Telegram and X crackdown

Once upon a time, the credo of telecom operators was "we have zero responsibility about our customers' messages". For Internet service providers, I unfortunately know from experience, this was not such a simple matter. I wrote about that earlier. For social media, it is even clearer that they should intervene whenever possible if their networks are being used for criminal activity. The Washington Post explains it clearly:

"Global Internet regulators are no longer playing around. Two days after France sued Telegram CEO Pavel Durov on several charges, Brazil on Friday ordered the suspension of Elon Musk's X after it ignored an order to appoint a legal representative in the country. While the details differ in important ways, both cases involve democratic governments losing patience with cyberlibertarian tech magnates who perhaps turned their noses up at authorities a little too often.

The crackdown, which comes months after the passage of a law in the United States that could lead to the banning of TikTok, heralds the end of an era. Not the era of social media, which is still going strong. But the era when tech giants had free rein to shape the online world - and enjoyed a presumption of immunity from real-world consequences.

Although unfettered Internet companies have long clashed with authoritarian regimes - Google in China, Facebook in Russia or pre-Musk Twitter in Turkey - Western governments did not, until recently, consider social media and the vision of free speech they promoted to be fundamentally at odds with democracy. Politicians and regulators recognized that there were bad things on the Internet, condemned it and sought ways to limit it. But banning entire social networks or arresting their executives was simply something liberal democracies did not do. Now, for better or worse, they do."

The arrest of Durov in France is akin to firing a gun at a gnat. But until the full charges are revealed and it is clear what crimes Durov is accused of, it also remains difficult to vouch for his innocence. If Telegram is actually being used for pernicious activities and could well have intervened, appropriate punishment is warranted.

Friend of Taylow Swift and his brother podcast for $100 million 

The Kelce brothers make a nice podcast, and the fact that the youngest brother is Taylor Swift's bearded arm candy also won't have deterred them from striking a $100 million deal with Amazon, which is trying to bring in more ad revenue. Actors Jason Bateman, Will Arnett and Sean Hayes struck a similar deal with satellite radio station SiriusXM early this year for their podcast, also for $100 million.

But Alexandra Cooper's podcast is the clear winner with the very well chosen name for her podcast Call Her Daddy, Cooper is reportedly getting $125 million from SiriusXM over three years.

According to Midjourney, I am more handsome than my reflection and I was typing this newsletter laughing on a beach. Then it must be true.

Battle over AI photos enters new era

While Elon Musk's picture maker Grok seems to know no limitations, spitting out everything from famous singers in lingerie to Kamala Harris with a firearm, the launch of the web version of Midjourney has been much less in the news.

That's a shame, because Midjourney is a fantastic tool that was previously only available via the cumbersome Discord. Fascinatingly, Midjourney also plans to get into hardware. Since hardware head (his real title) Ahmad Abbas previously worked on the Apple Vision Pro, some think it will be "smart glasses" but Midjourney CEO David Holz is far too smart for that. Everyone knows that if you want to make money in the smart glasses business, you might as well get in the shower, light up a cigar and burn thousand-dollar bills with it.

The question is, and all suggestions are welcome: what hardware is Midjourney going to make?

Thanks for the interest and see you next weekend, then hopefully just again on Sunday!

Categories
AI technology

Musk and Zuckerberg swap roles and BlackRock and Temasek invest in decarbonization

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?

After the recall of all Tesla Cybertrucks sold due to possibly glued gas pedals and unclearstories about robotaxis 
were received with deafening silence from the investor side, Tesla almost hid this sentence at the bottom of page ten of its quarterly report:

"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.

Decarbonization Partners: no website, but business cards that appear to be made of old tofu

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.

Have a great Sunday and see you next week!

Categories
technology

List of relevant publications on carbon credits

Herewith a listing of interesting publications on carbon credits, indicating authors, date and a summary. It is intended to refresh this document regularly with new material and to remove publications overtaken by time. 

Where the Carbon Offset Market Is Poised to Surge

author: Morgan Stanley

date: April 11, 2023

summary:

Decarbonization strategies are driving a rapidly evolving market for offsets. Where are the opportunities? 

key takeaways

  • Although many companies are working to eliminate emissions entirely, carbon offsets will remain a critical tool in fighting climate change.
  • The voluntary carbon-offset market is expected to grow from $2 billion in 2020 to around $250 billion by 2050.
  • Three shifts now underway will bring new opportunities for investors as product mixes grow and evolve to help meet net-zero targets.

1. From Reduction and Avoidance to Removal.

2. From Nature to Technology

3. From Offsets to Investments

A tale of two carbon markets

author: S&P Global, Roman Kramarchuk and Marie-Louise du Bois

date: March 13, 2024

summary: In 2024, we expect carbon compliance expansion alongside reflection on the voluntary carbon market.

highlights: 

  • COP28 failed to deliver expected progress on Article 6 of the Paris Agreement on climate change, which sets out the principles for international carbon markets.
  • Consequently, the voluntary carbon market is regrouping around the question of quality, which affects issuance, retirements and price trends.
  • Simultaneously, national carbon compliance programs are expanding around the globe.
  • In time, these two markets may converge - particularly if there is agreement on Article 6 at COP29.

Corporate engagement with voluntary carbon market claims: findings & recommendations

author: The Climate Board

date: January 25, 2024

summary: A recent report conducted by The Climate Board found that 93% of respondents who developed and set Scope 3 targets are facing critical challenges in reaching their goals. Further, while 70% of global firms acknowledged that the use of carbon credits would likely increase the likelihood that they'd set or maintain their climate targets, only a mere 41% had taken tangible actions to purchase carbon credits as part of their carbon reduction strategies in the past two years. This report helped inform the release of VCMI's additional guidance to its Claims Code of Practice (November 2023), particularly the evolution of VCMI Claims, which bring confidence and credibility to the voluntary carbon market.

Credibility is required to scale the carbon markets

author: Allen & Overy

date: March 8, 2024

summary: With the Intergovernmental Panel on Climate Change (IPCC) concluding that it will be difficult (and in some cases impossible) to reduce emissions to zero in certain sectors,several hundred million tonnes of CO2 will need to be removed from the atmosphere to decarbonize the global economy. The voluntary carbon markets are expected to play a critical role in this regard over the next decade and beyond.

Carbon Markets 2.0 - Addressing Pain Points, Scaling Impact

authors: Anshari Rahman, Edmund Siau (GenZero)

date: December 2023

summary: The urgency of climate action is clear, and carbon markets are an efficient way to accelerate decarbonisation. The first Global Stocktake has confirmed that we are not on track for a 1.5°C world. Despite ambitious net-zero pledges covering 88% of global emissions and 92% of global gross domestic product (GDP), emissions continue to rise, and a significant emissions gap has persisted. Putting a price on carbon will provide a strong economic incentive to reduce emissions, and by implementing carbon pricing in the form of carbon markets, finance can be channeled to the most cost-effective abatement opportunities while supporting flexibility, scalability, and innovation.

The voluntary carbon market (VCM) supports additional abatement and channels finance into critical areas that lack funding. While compliance markets can be effective, implementation of a high-ambition carbon tax or emissions trading system (ETS) is often difficult due to political and economic considerations. The VCM therefore helps to support decarbonisation in sectors beyond the reach of compliance schemes. Projects that monetise carbon credits through the VCM can use carbon revenues to protect nature, conserve biodiversity, and support sustainable development.

Carbon markets are at a critical inflection point. They need to scale up rapidly, but multiple pain points are holding them back. Recent macroeconomic conditions, combined with increased global scrutiny and a lack of regulatory clarity, have significantly dampened demand. This uncertainty is particularly pronounced around Article 6 and its implications for national commitments. Furthermore, variability in credit quality and a lack of standardization have exacerbated these challenges, impeding the market's growth and credibility.

A multi-pronged strategy is required to unlock the full potential of carbon markets. This includes providing clear guidance on the usage of credits, aligning market participants on quality benchmarks, enhancing market transparency and liquidity, and garnering government support.

We do not want a large-scale low-integrity market, but we also do not want a small-scale high-integrity market. We see several key areas where more attention is required in the short term:

- Evolve the discourse on supply-side quality. There needs to be a better understanding of what constitutes 'quality' in carbon markets. The misconception that some project types are inherently higher quality needs to be dispelled (i.e. removals are better than reductions, tech-based are better than nature-based solutions). The industry needs to shift away from discussing quality in general to specific quality considerations.

- Provide pragmatic incentives for corporate carbon credit use. It is clear that corporates will not move at scale if only motivated by charity. The system should provide the appropriate incentives to encourage greater participation from corporates. Having quality controls is important, but it must be balanced with pragmatism.

- Leverage technology to build a robust and scalable market. Legacy systems in carbon markets, such as analogue registration processes, can be improved greatly by digitization. Technology is a critical lever to scale the market, enhancing interoperability between the various emerging systems while safeguarding rigour. The future of carbon markets hinges on seeking common ground. Improvements in methodologies, harmonisation of standards, and advances in technology can help carbon markets to evolve into robust, effective instruments that contribute significantly to our climate goals. This evolution can also improve support for biodiversity conservation and sustainable livelihoods. Collaboration among governments, corporations, and market participants is essential to bring about the evolution of carbon markets and to deliver impact at scale.

The Role of Carbon Credits in Scaling Up Innovative Clean Energy Technologies:

How high-quality carbon credits could accelerate the adoption of low-emissions hydrogen, sustainable aviation fuels and direct air capture

author: International Energy Agency (IEA) and GenZero

date: April 2024

abstract: Achieving net zero requires rapid development of technologies such as low-emissions hydrogen, sustainable aviation fuels (SAF), and direct air capture and storage (DACS). The IEA and GenZero report explores how carbon credits can incentivize their deployment.

Massive scaling-up is needed: low-emissions hydrogen production needs to jump from almost zero today to 70 million tonnes by 2030; SAF's share of final energy consumption in aviation needs to rise from close to zero today to around 11% by 2030; and annual removals of CO2 via DACS need to reach almost 70 Mt CO2 in 2030, from almost zero today. Investment must also increase dramatically. Governments can unlock investment through a mix of policies and financing instruments. Carbon credits can play an important role, especially in attracting private capital and accelerating technology adoption.

Carbon credits cannot bridge the investment gap on their own, and governments and the private sector need to develop strategies to create the right enabling environment for investments. Moreover, the current low availability of crediting methodologies hinders the generation of carbon credits from low-emissions hydrogen, SAF and DACS, but the landscape is shifting. A coalition of stakeholders should develop clear guidance on emissions accounting, and efforts to get better data on emissions are necessary to provide the foundation for such guidance.

What every leader needs to know about carbon credits

author: Varsha Ramesh Walsh and Michael W. Toffel (Harvard Business Review)

date: December 15, 2023

summary: Many companies have begun to look into credits to offset their emissions as a way to support their net zero goals as their target years get closer and closer. As it stands, the carbon credit market is too small to bear the brunt of reducing companies' impacts on the environment. However, the voluntary carbon market has the potential to drive billions of dollars over the coming decade into climate solutions. Here, the authors offer a primer for leaders to learn about the carbon credit market. What's the best way to participate in the market? Which types of credits are considered to be the highest quality, and thus carry the least reputational risk? Who are the players when it comes to standards and regulation? The authors answer these questions and outline the characteristics of high-quality carbon credits

Categories
AI crypto technology

AI under fire: Elon Musk against OpenAI, EU against Microsoft and everyone against Google CEO Sundar Pichai

Normally in this newsletter I try to find some sort of common thread in the news, but so much happened this week that I don't want to leave unmentioned without turning this newsletter into a biblical epic. So apologies in advance for this week's telex style. (For younger readers, a telex was a device used by companies in the last century to slide into each other's DMs.)

Even people who don't know the difference between a pixel and a pancake are now interfering with the rapid rise of AI. The European Union, excelling at joining the resistance after the war, is investigating the deal of the world's most valuable company, Microsoft, and the former European AI darling, France's Mistral. As if Mistral has a lot to choose from and it hasn't already been clear for a long time that all the big leading AI companies come from the US, where Elon Musk filed a doomed lawsuit against OpenAI, which he co-founded. In this case Musk does seemsto have the moral right on his side, but legal experts agree he doesn't have a strong case. Meanwhile, some are calling are  for the resignation of Sundar Pichai, CEO of Alphabet (Google's parent company) since Alphabet's $90 billion one-day drop in market value caused by controversial and poor responses from Google's AI service Gemini. Unimaginable but true: this all happened in the past week.

Elon Musk according to Google Gemini? Image created with Midjourney.

Call for Google CEO to resign

Speaking of Google, which lost a whopping $90 billion dollar market value on Monday when the controversy surrounding Google Gemini, the Silicon Valley giant's ChatGPT competitor, made its way to Wall Street. It led to calls for the CEO's resignation. (Officially, this Sundar Pichai is the CEO of Google's parent company, Alphabet, but that name has proven so meaningless that even Alphabet's ticker symbol on the Nasdaq is still GOOG.)

Pichai responded to the controversy surrounding the Gemini project on Tuesday night, in a probably intentionally leaked internal memo, calling the AI app's problematic responses to race 'unacceptable'. Pichai promised to make structural changes to fix the problem, although it is remains unclear what those changes are.

I wrote about this last week: in some cases, Gemini refused to depict white people, or added photos of women or people of a different skin color when asked to create images of Vikings, Nazis and the Pope. (I myself tried in vain to create a Viking with dreadlocks and a pregnant woman as a pope, but by then Gemini had removed its image creation service. Anyway, all jokes in this area have been obsolete since Dave Chapelle's legendary skit as a black white supremacist up: a
).

'Unclear who had worse influence, Musk or Hitler'

The controversy escalated when Gemini was also caught on highly questionable text responses, such as difficulty answering who has had a worse impact on society: Elon Musk or Adolf Hitler? Since Pichai has even less charisma than Mark Zuckerberg, the latter was suddenly adulated in some circles as an exemplary CEO who represents his company well. Engadget quickly corrected that frame,even suggesting that Zuckerberg is in a battle for survival with Meta.

The personality cult of CEOs in the media is outdated. Apple CEO Tim Cook probably isn't the greatest story teller at birthday parties, Nvidia CEO Jensen Huang will be asked by many journalists at a Chinese restaurant for an extra bowl of rice, and Microsoft CEO Satya Nadella cannot be distinguished by 99% of the media from the players on the Indian cricket team. This is not a bad thing at all: it is completely irrelevant that the CEOs of the three most valuable tech companies in the world are neither very outspoken nor flamboyant. Their companies, with largely satisfied employees, make exceptional products at an apparently appealing price, and that's what matters.

Musk is right and wrong at the same time

Then the case of Musk vs. OpenAI. In his suit, OpenAI is accused by Musk of having traded the original non-profit mission of developing AI to help humanity for maximum money grabbing with Microsoft. The Verge argues that this is, at its core, justified criticism of OpenAI, with which Microsoft has an exclusive licensing agreement. So much for helping humanity.

Unfortunately for Musk, legal experts don't rate his chances very highly, especially since nothing of all these lofty goals and agreementswas ever written down by the OpenAI founders. It also doesn't help Musk that he has since founded a competing AI company of his own, x.ai so other motives may be in play for him.

French AI darling in partnership with Microsoft and IBM

It was announced Thursday that Mistral, the not-yet-year-old French company that was supposed to be ChatGPT's competitor, has signed licensing agreements with Microsoft and IBM. Under the agreement with Microsoft, Mistral's language models will be available on the Azure cloud computing platform, while Mistral's multilingual chatbot in the style of ChatGPT, will be rolled out as "Le Chat. This is to the dismay of the European Commission, which sees the last hopes of a European response to OpenAI and Gemini fading.

There will be a fuss in France over the butchering of the French language: 'Le Chat' in French simply means 'the cat' and the French word for online chat is... tchat. Microsoft could probably do little with 'Le Tchat', which only underlines that English is the working language in AI and the Americans have won the battle.

There was also good news

During Mobile World Congress in Barcelona, Deutsche Telekom showed the T Phone, a collaboration of the Germans with the, of course, American Brain.AI. This phone basically replaces all the separate apps with one AI app that performs all the desired functions:

"As Brain.AI CEO Jerry Yue shows me what the T Phone can do, he tells the device to book a flight from here in Barcelona to Los Angeles on March 12 for two people in first class. The phone pauses for a minute before pulling up a list of flights, methodically arranged on the home screen. Once Yue finds the best flight, he can pay for it using his mobile payment system of choice, without having to swap to another app or service."

The instruction actually generates the interface, without having to switch between different apps. Wired is already talking about the end of apps in this regard, christening this development "the big uninstall.

From a photograph of Audrey Hepburn and the sound of a cover version of Ed Sheeran's Photograph, a video of a Photograph singing Audrey Hepburn is generated. 

EMO creates talking and singing videos from photos

Just two weeks ago, OpenAI announced Sora, the AI service that creates deceptively realistic videos based on a simple text prompt. Researchers at Alibaba's research institute have developed a similar service, Emote Portrait Alive (EMO), which, for example, can turn a portrait photo into a talking or singing video. A photo of Audrey Hepburn is combined with a cover version of Ed Sheeran's song Photograph and next thing you know,Audrey Hepburn is singing Ed Sheeran's hit song.

The Chinese, because to keep things confusing despite its name, Alibaba is a Chinese company, deal another not-so-subtle stab at OpenAI by taking an interview with OpenAI CTO Mira Murati as the basis for the second example, using Murati's voice as audio under a talking version of the lady from OpenAI's Sora video.

Spotlight 9: Dell helps Nvidia, crypto continues to rise

On Friday, Nvidia closed a trading day for the first time with a market cap above $2 trillionand seems to have definitively passed Amazon and Google in the battle for the bronze, as the third most valuable tech company in the world after Microsoft and Apple. It now seems a matter of time before Nvidia even surpasses Apple in market cap.

BBC published an excellent article on Bitcoin. Highly recommended to understand how what "whales" are buying up large numbers of Bitcoin. 

Nvidia shares rose four percent after Dell, which sells high-end servers made with Nvidia's processors, issued a positive revenue forecast on Thursday, referring to a surge in orders for Dell's AI-optimized servers. Dell's shares shot up as much as thirty-eight percent to a record high, before ending the session with a gain of thirty-two percent.

There is much to do about Super Micro (SMCI), which some analysts seem to confuse with a chip manufacturer like Nvidia and even has a higher P/E ratio (SMCI 71 versus NVDA 69). This is absurd, of course, as Nvidia has a much more defensible competitive position and more unique products.

There are two reasons why I think Super Micro will nevertheless experience tremendous sales growth in the coming years:

- with this type of server it is more difficult than is often thought to make the right trade-off between performance, power consumption and price per application used; I have the impression that Super Micro knows very well what the customers want, even better than many customers themselves, and based on that knowledge Super Micro estimates particularly cleverly whether an expensive Nvidia GPU is actually required, or whether the required performance can also be delivered with cheaper chips from Intel or AMD. Super Micro works with all three, which makes it an excellent judge of the total price/performance-ratio.

- Super Micro has apparently given purchase guarantees to Nvidia and AMD for the right chips, as it can continue to deliver for now while other customers were put on hold by Nvidia in particular.

SMCI shares closed Friday at $905 and had a high of as much as $1,077 over the past year, with a low of $87. Super Micro is a stock for investors with a strong stomach, because it could be a wild ride.

Despite all the attention on AI, the crypto currencies Bitcoin and Ethereum, and in their wake a range of altcoins, remain the strongest risers. Even the BBC is now analyzing crypto as a normal asset class and published this excellent article on Bitcoin and, in particular, the "whales," the big boys, who got into Bitcoin big and seem to be holding on.

Keep an eye on: carbon credits

For those who think crypto is a tricky asset class to fathom, I would like to introduce you to crypto's carbon neutral cousin: carbon credits. The medium-term (think a decade) importance of carbon credits in the transition to a carbon-neutral world is clear, see for example the twenty-one percent increase in the market for carbon credits in Singapore.

But doubts remain about the usefulness of carbon offsets, which is why the BBC explained the issue using the carbon offsets of who else but Taylor Swift. Her Swiftonomics are now almost an investment class of their own, which recently even led to friction between Singapore and some neighboring countries following the rumor that Singapore had paid heavily to Swift to be the only Asian city she performs in during her current tour - as many as six times this week.

Back to carbon credits; Wired rightly stated that much more focus should be placed on carbon removal credits, or removal of CO2 rather than compensation for emissions. Like this promising technology to remove CO2 from the oceans.

According to Morgan Stanley, the carbon credits market will be a $100 billion market by 2030, so that market size combined with the global importance and the potential breakthrough technology involved make carbon credits very interesting in my view.

In conclusion: special shots

The Dutch Drone Gods built a special drone to capture Max Verstappen's Formula One car from unique angles, which succeeded in spectacular fashion. Watch the video here and in addition to the drone, admire the drone pilot's and Max Verstappen's steering skills on a rainy Silverstone. It won't be long before Formula 1 races are captured in this way.

Very clever, 300 kilometers per hour on the straight and then neatly taking the turn. I'm talking about the drone 😉

Finally, the moment that got me laughing on social media this week: basketball legend Charles Barkley is finally on Instagram and was advised by Shaquille O'Neal to tag every photo with the hashtag #onlyfans. To which the unsuspecting Barkley replied; "Only Fans, for only fans of mine?

"Only Fans, for only fans of mine?

Enjoy your Sunday, see you next week!