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AI crypto technology

$115 million for a 1-page website

The news in the tech world is completely dominated by AI, in a way that recalls the breakthrough of the World Wide Web in 1993 after the launch of the Mosaic browser and the period 15 years ago after the first iPhones and Android phones were introduced. The latter two (smartphones and the Internet) are the carrier for today's technological revolution, for that is what we must now call AI. And yet I found something else more striking last week: that OpenAI founder Sam Altman, with his other company Tools for Humanity, raised a whopping $115 million for the Worldcoin project. Because as a tech entrepreneur, since Steve Jobs and Elon Musk, you don't count with one billion-dollar company; you have to have at least two. And you meet with world leaders, apparently in brown shoes.

Lovely casual: jacket off for President Macron and Sam Altman wearing brown shoes under a dark suit. source: Twitter Macron

It is remarkable, to say the least, that Tools for Humanity, which presents itself on its 1-page website with the slogan "a technology company committed to a more just economic system," is raising as much as $115 million for the Worldcoin project. Because Worldcoin is an open-source protocol, or platform whose use is open to all, while further scrimping on funding startups in the crypto world. What does Worldcoin do?

"We seek universal access to the global economy, regardless of country or background, and accelerate the transition to an economic future that welcomes and benefits everyone on earth," according to the slogan on Worldcoin's website.

That's still pretty vague, but Alex Blania, CEO and co-founder of Tools for Humanity and Worldcoin project leader, clarifies it somewhat in the press release, "As we enter the era of AI, it is imperative that individuals be able to maintain their personal privacy while proving their humanity. In this way, we can ensure that everyone can realize the financial benefits of AI."

So AI again after all ... there's no escaping it. But Blania definitely has an important point: it is important that people can prove to be human in all kinds of transactions, without having to share personally identifiable data. At Worldcoin, verification of being human is ensured through the use of an Orb, a sphere: a biometric iris scanner. 

$115 million, but then you have something.

When Worldcoin was launched, it was not Worldcoin's intention to create its own hardware, but earlier this year it explained that there was no other way to prove that you were dealing with a living human being other than through the use of biometric measurement devices. Those interested in learning more about the reason for the large investment in Worldcoin can hear about it in this podcast with Spencer Bogart of Blockchain Capital. Those who want to download the Worldcoin app, click here.

Sam Altman on tour

Sam Altman is not only co-founder and chairman of the Supervisory Board of Tools for Humanity, the company behind Worldcoin, but most importantly founder and CEO of OpenAI, maker of the wildly popular ChatGPT and the company that raised $300 million for ... 1 percent of the company. In that role, Altman toured Europe last week, with President Macron, who has never seen a mirror he didn't like, being quick to invite Altman to the Elysee.

Once Macron vowed that France and Europe would not once again fall behind in new technology, but meanwhile Europe hardly plays a role in the AI battlefield. Europe is nice as an outlet, and Altman was savvy enough to mention that OpenAI will obediently abide by all European rules. Meanwhile, I wonder why the English establishment is still so fanatically against brown shoes under dark suits that the Guardian devoted an article to it.

Everything is AI right now

OK, so I tried this week; to not just write about AI. But it's not easy. Not only does Worldcoin appear to have been created primarily to prove humanity in the age of AI, but major crypto funds are removing the word crypto from their websites and suddenly focusing on AI as well. For example, Paradigm has been saying this since the beginning of this month: 'Paradigm is a research-driven technology investment firm.' Nothing wrong with that. But they used to say this: 'Paradigm backs disruptive crypto/Web3 companies.' That's akin to the cousin who introduced himself as a crypto expert and life coach at your aunt's birthday last year, but appeared on Mother's Day the other day in a t-shirt with ChatGPT on it and bragged around that he's been fistful of AI for years.

While investments in the technology world continue to decline globally, the AI sector is a magnet (or a bottomless pit?) for big money. Crunchbase counted as much as $20 billion in AI investments. Early last week, investors put $700 million into two AI startups - Builder.ai ($250 million) and Anthropic (a whopping $450 million) - and mid-week another $105 million into AI marketing platform Insider. In which I noticed that QIA, Qatar's state fund, invested in both Builder (from London) and Insider (from Istanbul). That won't sit well with Macron.

Among all the raving press releases about the millions being invested in AI, it is important to keep looking at applications of AI. Michiel Schoonhoven of NXTLI pointed me to this fascinating presentation by Sal Khan on TED, about how AI will not destroy education, but rather save it. And Microsoft announced that Windows 11 will be brimming with AI because Bing Chat will be integrated. I got flashbacks to Clippy, that talking yellow paperclip.

Notable links:

  • JP Morgan, it says, is introducing a ChatGPT-like service with investment tips, perhaps called IndexGPT. This service could make the personal investment advisor obsolete, but it is unimaginably difficult to get the right information into the system so automated good buy and sell advice generation will be a challenge for JP Morgan. This is going to be fascinating.
  • According to GeekWire, venture capital investments around Seattle, home to Microsoft and Amazon, among others, have dropped by as much as 79%. In the Netherlands, the drop would be only a third, and the suspicion is that this downward trend will continue sharply.
  • The Economist reports on mass layoffs in the tech sector, with an estimated, 120,000 people losing their jobs.
  • The Information came up with a map of cafes where investors often sit so you can attack them with a bad story during their almond milk cappu. Replace the word "investors" in that sentence with "young women" and it becomes clear how creepy these kinds of articles are.
  • Amazon has abandoned a significant part of its climate pledge and removed the blog post announcing the "Shipment Zero" initiative. Companies like to score with press releases, but in practice short-term profits are often preferred over a livable planet for the next generation.

Spotlight 9: GPU makers are winners of the week, maybe of the year?

The most important acronym in the tech and business world today is AI, but another acronym - GPU - is not far behind. GPU stands for Graphics Processing Units, the type of chips needed for AI applications. GPUs are optimized for training models for artificial intelligence and deep learning because they can perform multiple calculations simultaneously. The profit forecast of chip designer Nvidia, which makes GPUs for ChatGPT and the like, shows the rising demand for these types of chips , according to the Wall Street Journal.

'Nvidia said it expects to generate about $11 billion in revenue in the current fiscal quarter ending in July, up 64% from the same period last year. That figure, which CEO Jensen Huang said will be driven by demand for artificial intelligence software, would be $2.5 billion higher than Nvidia's previous record for quarterly revenue. Then there's the expected increase in earnings: Nvidia said gross margins will rise nearly 4 percentage points in the July quarter. Analysts expect the company's earnings per share to rise 30% over the next 12 months, compared with 6% for a basket of 11 other chip companies.'

And Nvidia's smaller competitor, Marvell, also benefited from investors' attempt to get their grabby hands on some of the AI fortune. Marvell's CEO came up with a striking prediction:

'Given the speed at which AI infrastructure is evolving, the technology is renewed within 18 to 24 months, compared to more than four years with standard infrastructure.'

In other words, we're going to earn ourselves crazy from this technology because it's going to be written off much faster by the customer.

7.6% price gain for Bitcoin is a joke compared to Marvell's 45% and Nvidia's 26% rise. It's still investing for those with a strong stomach.

Marvell shares rose as much as 45% over the past week, even more than Nvidia, which climbed 26%. Since January 1, Nvidia shares rose as much as 176%, compared to 25% for the Nasdaq. The GPU makers' results are especially extreme when compared to my 'traditional' Spotlight 9, which includes the largest tech companies, the two dominant crypto stocks and the Dow Jones and S&P 500 as representative of the largest companies. Even Bitcoin rose 'only' 7.6% this week. Plenty of Bitcoin fanatics will gloat that their favorite currency is not called BitcAIn.

Categories
AI crypto

Elon Musk and his exes. And Apple CEO Tim Cook lost AI top talent to Google, but strikes blow with savings accounts

This week, almost all tech news seemed to be about artificial intelligence. After all, major innovations in AI capture the imagination and are recognizable to all, whereas a breakthrough in biotechnology, for example, is often literally visible only through a microscope to a limited group of experts.

Why do you need $300 million when you just raised $10 billion?

When $300 million dollars is paid by top investors for just over one (1) percent of OpenAI, the company that is the creator of ChatGPT, it deserves extensive attention. Especially considering that Microsoft invested $10 billion (!) in OpenAI less than three months ago, having already put a billion into the company in 2019. That 11 billion surely hasn't run out yet, so the question arises as to why OpenAI held this additional round of investment.

The main reason OpenAI wants to have a strong relationship with some of the biggest tech investors in the world is the burgeoning battle for the AI market. The time is approaching when really big money is needed, think billions rather than millions, for a company to join the battle of giants such as Google, Apple, Microsoft and Amazon who are all competing in this market. After all, AI is too important for all players to ignore. In fact, for Google, the success of OpenAI is life-threatening. With shareholders behind it like Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, K2 Global and Founders Fund (from Peter Thiel, the legendary investor in Facebook and Palantir, among others), OpenAI can now operate independently of partner Microsoft. With an estimated market value of $27 billion to $29 billion, OpenAI is already worth more right now than, to name a crossroad, companies like Spotify and vaccine maker BioNTech, companies that have also successfully capitalized on major developments.

This 'photo' was generated entirely with Midjourney and is eerily real

CEOs Tim Cook and Sundar Pichai fight over AI talent

Meanwhile, in the race for the best AI technology, Apple with Siri and Amazon with Alexa are far behind OpenAI. The Information reported this week that three of Apple's top programmers therefore made the move to Google, despite attempts by Apple CEO Tim Cook to retain them. The personal offer from Alphabet CEO Sundar Pichai, who is committed to catching up with OpenAI, was apparently irresistible. Would any CEO of a European publicly traded company ever have made a personal effort to attract programmers, or to retain them, as Cook and Pichai are doing? I suspect the European gentry, for they are almost all men, feel too big for that.

How difficult it is to make a good AI application proved Snapchat, which received a 1 for the "My AI" feature from users, urging them to remove it from the app. It was not Snap's week, which saw revenue drop after which the stock slumped 17%. Dropbox announced it was laying off 16% of its staff while investing heavily in attracting new AI developers. This indicates that it is difficult, if not impossible, to retrain programmers to become AI developers.

Elon Musk, his X's and his ex

The wait is on for Elon Musk to get involved in the AI war with a company, but he seems too busy trying to ruin Twitter. He does constantly criticize OpenAI and CEO Sam Altman since he sold his stake in OpenAI to Microsoft. It is remarkable, to say the least, that Musk, in an open letter, called for a sort of six-month moratorium in AI development, but in the meantime continues to work on funding his own AI startup, which he alternately calls TruthGPT (as with now unemployed chief Tucker Carlson) or X-AI. That X should normally be in there from Musk; he previously started X.com and, of course, SpaceX. It's lucky it's Tesla and not Texla. His latest son is named X Æ A-Xii (call sign: Bert). And the Æ is in the poor kid's name because it is the elven spelling of the term AI. Musk's baby mama, Canadian artist Grimes, stood out this week by giving permission to use her voice in AI-generated music: "I'll split 50% royalties on any successful AI generated song that uses my voice. Same deal as I would with any artist i collab with. Feel free to use my voice without penalty.' This is especially notable because there is concern that AI will make the entire profession of voice actors obsolete. It will be interesting to follow what the implications will be for singers.

The Apple Card with rounded corners, Steve Jobs wouldn't have wanted it any other way

Finally: Apple is going to make mincemeat of the banks and does it with ... Goldman Sachs?

It had been expected for years and last week it was here: Apple made its entrance into the banking world. Remarkable remains the choice of Goldman Sachs as a partner, because Apple hardly uses the Goldman brand but uses the prestigious bank mainly for the banking license and as a colorless and odorless handler of savings transactions, as a kind of white label. While Apple rarely, if ever, buys market share based on price, when it comes to savings accounts the high interest rate actually stands out: 4.15%, as much as 10 times higher than the US national average. 

What is typical of Apple, however, is its great ease of use. The first step is to apply for an Apple Card, a credit card, which unfortunately is only available in the US for now. All spending via that card will default to 1% to 3% of the purchase amount in the form of what Apple has called "Daily Cash," a balance that is calculated and credited daily. Those who then open a savings account from the Apple Wallet and link it to the Apple Card, an action of no more than a few clicks, will see Daily Cash credited to the savings account daily and automatically receive the high interest rate of 4.15%. The savings account is free, there is no minimum deposit and there are no penalties if balances are withdrawn from the savings account. It is also possible to transfer funds from other banks to the Apple-Goldman savings account.

And precisely the latter is a nightmare for traditional banks. Because while there are other, lesser-known banks, giving even higher savings rates, they are not trusted brands like Apple. The combination of Apple Card with Apple Pay and the Apple Wallet is so seamless and simple that it will be difficult for banks to compete. It seems plausible that European banks will launch a hefty lobby in Brussels, combined with legal action, to make it difficult for Apple to enter the European market in the same way it does in the US.

Event: Consensus 2023

Nearly fifteen thousand people attended the leading crypto event Consensus in Austin, Texas last week, and that doesn't include the types who are too stingy to buy a conference ticket because they think they already know everything and want to tell you that the best networking happens in the pub. The sounds from Austin were universally positive, especially about the quality of the projects that survived the crypto winter. I found the most notable contribution to Consensus, viewed from a distance because I wasn't there myself, to be the interview with journalist Brady Dale, whose book about Sam Bankman-Fried of FTX will soon be published. Dale emphatically points to decentralized finance, DeFi, as the main solution against fraud and mismanagement, precisely where there is no central party like a stock exchange like FTX. I also found it striking that Dale specifically mentions memecoin Dogecoin as a relevant crypto alongside Bitcoin and Ethereum:

'To me, Dogecoin is the chain that said, A story, a character, a concept can have a value, and if a community believes in that character and works together in a distributed way to make the idea bigger, the value of the concept will grow and so will its currency. Dogecoin has really made that clear. It's not just about DOGE, it's about that whole idea of collaboration around a concept, and that's why I'm betting Dogecoin will be the comeback kid of blockchains, again and again, in the near future.

- Brady Dale

Good links

  • Check out this link to some particularly practical prompts to use yourself at ChatGPT.
  • Startup funding is under severe pressure. These four charts show that, and in Miami, investment in startups actually fell more than 90%. Partly a result of the focus in that region on crypto startups, which were struggling.
  • In the Netherlands, more and more investors are asking startup founders not to pay themselves a salary. Here are five reasons why they should.
  • Unknown identifies nearly 1,000 Bitcoin wallets belonging to Russian secret services. Very clever.
  • The U.S. government is about to take over First Republic Bank. I wrote earlier this month about what kind of bank First Republic is. Or was?

Spotlight 9: Meta and Microsoft the big winners of the week

Meta and Microsoft as outliers after good quarterly results

Reader Raoul Kuiper rightly asked me why I did include Bitcoin in this portfolio when I don't own it myself because of its energy consumption and associated carbon emissions. By way of explanation, I created this fictitious Spotlight 9 portfolio to track sentiment in the tech world on a weekly basis. I think when, as happened last week, virtually all major tech companies plus the Dow Jones and S&P 500 are all in the minus, that is relevant to the entire world of technology and innovation. Bitcoin and Ethereum I included because those are the most widely held assets of the hundreds of millions of people investing in crypto worldwide. Of the Spotlight 9, I personally find Microsoft, Apple and Ethereum interesting. The projects and companies I find otherwise fascinating, such as Polygon (MATIC), are usually too small to have an impact on stock market sentiment and the economy and therefore not included in the Spotlight 9.

Amazon, Alphabet (Google), Microsoft and Meta published good quarterly earnings this week, and Microsoft and Meta in particular benefited. Microsoft is expected to benefit greatly from the integration of AI, based in part on technology from OpenAI, into various products and services. Zuckerberg explained to investors that Meta uses a lot of AI to better target their TikTok competitor Instagram Reels, and that struck a chord: Meta shares rose nearly 13% in the last 5 days.

It was, in short, in every way the week of AI.