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Nvidia the world's most valuable company? And Ethereum goes after Bitcoin

'Often something has to happen before something happens.' It's one of my favorite quotes from legendary soccer player Johan Cruijff. I was reminded of it when last week stock market analysts, a profession with the same social utility as palm readers, predicted that Nvidia could overtake Apple and Microsoft as the world's most valuable company this very year. Without analysis of why and how this is possible, it is scoreboard journalism of the worst kind. Bitcoin's huge price rise to its highest level ever, of course, is preferably hushed up by most stock market analysts because they spent years trashing crypto. Whereas the price of Bitcoin is based solely on supply and demand, with no underlying products like Nvidia. Seems a lot easier to analyze. Yet most analysts remain silent. Coincidence? No, because coincidence is logical, Cruijff also said.

In a half-baked attempt at self-analysis, I looked up what I myself have written about Apple, Microsoft and Nvidia since I started this newsletter a year ago. Along with OpenAI, maker of the revolutionary ChatGPT, they are the only companies I have discussed more than 30 times.

Nvidia is more than hardware

Looking back, it is clear that I myself struggled to understand what the advantage Nvidia has built up; for the gap with the competition is caused by much more than just the production of very fast processors, the Graphics Processing Unit (GPUs) that are the engine block of AI software.

This newsletter is too short and I lack the technical expertise to go deep into the "software shell" that Nvidia has almost secretly erected around its hardware, making it more complex than it seems for customers to achieve the same results with other vendors' equipment. But it is useful to keep in mind that Nvidia has successfully built a defensible moat around its core business, when yet another analyst swears that Google, Microsoft and Amazon will deliver similar performance to Nvidia within a few years.

Because besides designing and delivering performance in a lab, these types of AI applications have to be tested in the real world for all sorts of different types of applications, followed by optimization (I don't think it's a Mulisch-esque argument myself, but stay with me) and finally a chip manufacturer still has to know how to produce the GPUs in volume and how to support them after the initial sale. That producing, selling and supporting may be harder than designing. I am also a very good singer in principle, but in practice my dog runs away after hearing three notes.

Every day, Nvidia increases its knowledge advantage because it has been working with all these AI customers for years. While Google, Microsoft and Amazon are still on the user side. It's like being a customer at the bakery who decides one day to start a bakery himself. Then the business plan and recipes are not the parts that make the difference either: the crux is in making and selling, which is true in baking croissants and in baking computer chips.

The stock price performance of Nvidia, Apple and Microsoft in the last 365 days.
 

Conclusion: Nvidia has a good chance of adding another trillion in market value within a year and dethroning first Apple and then Microsoft as the world's most valuable company. A position it will then be able to hold for some time. Once Nvidia has surpassed Apple and Microsoft in terms of company value, only then will the general public (and thus most of the media and politicians) begin to understand that a social breakthrough has occurred.

I am not claiming, as is sometimes suggested, that AI is a breakthrough comparable to the invention of the steam engine. That was the case with the invention of the personal computer combined with the Internet, which transitioned much of the world from the industrial to the digital age. There is a significant chance that mass adoption of AI applications will have the same impact on society as, at one point in time, the introduction of the assembly line. In other words, higher labor productivity coupled with fewer process jobs, fewer work hours and shorter work weeks for most desk jockeys. The question is whether average wages will be maintained, or whether higher corporate profits will prevail.

AI in the retirement home

The applications of AI extend much further than initially thought. Obviously, many administrative functions, in fact all process-based functions involving estimation based on existing data, will be replaced by AI. That stuffy insurance salesman who comes by at night after dinner in his ill-fitting suit with questionable tie can do a worse job of interpreting what the customer's requirements are than an AI application that stores all current policies and all claims for the last 50 years.

It recalls the breakthrough of the World Wide Web in 1993 after the launch of the Mosaic browser as well as the period 15 years ago, after the first iPhones and Android phones were introduced. The last two innovations, smartphones and the Internet, are the enabler for today's technological revolution, because that is what we should call AI by now. Just as a mobile app was developed for everything back then, now efforts are being made to incorporate AI into everything.

There sits Grandma, in a home with an AI doll on her lap.
 

A few remarkable innovations were presented at MWC in Barcelona, with AI-powered dolls for the elderly making an indelible impression on many visitors. Who thinks $3,500 for an Apple Vision Pro is not expensive, will surely buy a $1,800 Hyodol for grandma? Seems absurd, but the AI bot in the form of a six-year-old child proved more effective at reminding the elderly to take a pill, keep moving and turn off the stove in Korea.

Innovating is difficult for everyone

Most AI innovations will fail, as most attempts at innovation fail in general. Apple luckily finally stopped developing its own car and is writing off the $10 billion invested as a rounding error. The world had absolutely no need for a new electric car manufacturer. It will be interesting to see if Apple manages to incorporate AI in a useful way into the company's biggest money maker: the iPhone.

There is a lot of talk that Google has completely lost the plot in AI, but that is nonsense. In terms of product, Google has made great strides and Google Gemini was a giant leap. Only Google's corporate culture is proving  a debilitating hurdle in developing breakthrough innovations, as I described the last two weeks.

David Kiferbaum left Google and wrote a truly painful account of what it's like to work in an environment where political correctness is preferred to factual correctness. Recommended reading: How Google blew up. (By the way, Kiferbaum's LinkedIn shows that he also worked for a while at Morrison & Foerster, the law firm with the most apt URL ever for a law firm: mofo.com)

Spotlight 9? Two Spotlights: Bitcoin and Ethereum

It was déjà vu, all over again, as Yogi Berra once said: Bitcoin reached a new record high and then a harsh correction followed.

Bitcoin and Ethereum stand out; Ethereum also headed for a record

Then the most frequently asked question on Whatsapp, during birthdays and after kids' soccer games was: is it too late to get into crypto?

I do not think it is too late to get in and that we are just at the beginning of mass adoption. Again, I echo the advice from 2017, which is a few hype cycles ago, from legendary investor Fred Wilson (Twitter, Tumblr, Zynga, Etsy, Coinbase etc), which he gave based on the investor's profile:

  • young, aggressive risk taker - 10% of net assets in crypto
  • sophisticated investor looking for a high-performing portfolio - 5% of net assets in crypto
  • average investor, somewhat conservative, but with some appetite for risk - 3% of net assets in crypto
  • retiree who wants to maintain portfolio value and generate income - 0% of net assets in crypto

A detailed, careful and at the same time confusing typology. After all, some elderly people may very well be able to absorb a kick where it hurts, because their house is already paid off and they have zero debt. While many young, aggressive risk-takers must sell their textbooks and become Uber drivers or start an Only Fans as they watch their memecoins evaporate.

Because I don't know any young aggressive knuckleheads who manage to limit their crypto gambling to 10% of their net worth, as Wilson advises. Around me I see young people more likely to put 90% of their money into crypto, but that may be a genetic defect in my family. More research is needed on women's investment decisions; are there still fewer women than men in crypto, or are women smarter because they are quieter about it?

How much and in which crypto?

When people ask me how much to invest in crypto, which has been a daily occurrence again since the beginning of this year, I always answer with a counter-question: can you stand to see everything you put into crypto go up in smoke? Evaporate to nothing? And just as important: will you get into a fight with your partner if you lose everything?

The couple lunatics go-getters who then remain always ask the same follow-up question, "which crypto should I buy? To that question, too, Fred Wilson was kind enough reply:

"A diverse set of crypto-assets would include Bitcoin, Ethereum, the other major layer-one blockchains (Solana, Flow, Avalanche, Polkadot, Algorand, etc.), the major DeFi protocols (Uniswap, Aave, Compound, etc.), storage protocols (Filecoin, Arweave, etc.), telecommunications protocols (such as Helium), some layer-two protocols (such as Stacks, Polygon, etc.), some gaming assets (such as Axie, Decentraland, etc.) and maybe some NFTs."

Do I follow Wilson's advice myself? No.

The difference in value

I have been convinced for years that "something enormous" will come out of blockchain innovations. Decentralization and transparency bring an intrinsic new value that cannot be realized in other ways. Unfortunately, it will take longer than I had hoped until a widely accessible application based on blockchain technology becomes available that is relevant to a large audience. Call it the ChatGPT of blockchain, that is what we are waiting for. Such an application would be of great social value.

I believe strongly in the crypto market, but I don't have the chutzpah (anymore) to think I can pick the winners. This has proven difficult with every disruptive advance in technology. The challenge is to identify potential winners early. From that follows a financial value of an innovation; incredibly fascinating, but less interesting to me personally. Before you know it, you spend hours musing about peaks, valleys and candles, without yet knowing what application it is actually about.

Obviously, every investor wants to achieve the highest possible returns with the lowest possible risk, so maybe I should create an investment portfolio myself that is trackable on a weekly basis. I would love to hear via email, LinkedIn or X if you would find such a portfolio interesting. Anyway, all tips, comments and reactions are very welcome.

Enjoy your Sunday, see you next week!

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AI crypto technology

Spotlight 9: crypto better than chips and Disney

No major news and yet Bitcoin and Ethereum rose sharply this week.

The metaverse, the buzzword that quickly rose in the years after NFTs and before AI, is still being built, only we hear little about it. One company seems increasingly better positioned to dominate the near future: Disney, which announced it is investing $1.5 billion in Epic, maker of the popular game Fortnite.

The plan is to introduce popular characters from worlds of Disney, Pixar, Marvel, Star Wars, Avatar and other Disney domains into Fortnite's online universe. Disney shares rose over 10% in the week of this announcement.

Another major introduction that was snowed under by the news about Altman and its chain chip factories was the launch of Google Gemini, the former Bard. Reactions have been mixed, but it is imperative that there be quality competition for ChatGPT, and Gemini appears to be the main opponent. No one is waiting for another market with only one dominant party, like search engines.

Amid all the AI hype, chipmakers continue to do well. Nvidia rose nearly 6% but especially those who got into Super Micro after my newsletter last week had a fine week: SMCI rose as much as 25% and still has a P/E ratio half that of Nvidia.

Say what you want about Bitcoin, but it has proven to be a spectacular investment.

Amid all the AI hype, chipmakers continue to do well. Nvidia rose nearly 6% but especially those who got into Super Micro after my newsletter last week had a banner week: SMCI rose as much as 25% and still has a P/E ratio half that of Nvidia.

Far away from all the attention on AI and superchips, Bitcoin is almost stealthily creeping toward the $50,000 mark. And to think that Bitcoin first broke the $1,000 mark just seven years ago, on February 10, 2017.




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crypto technology

Spotlight 9: January party month in tech, except for Tesla

January was great for tech companies and the S&P 500, but not for Tesla

It's confusing, but January saw thousands of people laid off at tech companies who were simultaneously hiring others. At Google and Microsoft, "net" thousands of people went out and as a result (or in spite of it?) both companies rose to record highs. Might make sense, but feels weird.

Leaving aside Tesla, where growth is stagnant, virtually all major publicly traded companies are rewarded for optimism about the growth of the global economy. A Gaza humanitarian tragedy is taking place in the Middle East, but it seems to be taking place in a parallel universe outside of economic reality. When Houthis -who knew this club a month ago- attack a few boats it has a greater impact on the stock market, than great human suffering. Again, perhaps logical, but it is still distressing.

Tech has been in a bit of the doldrums the last few years, after smartphone-induced growth slowed and it was a matter of wait and see to figure out which new trend would kick start a new hype cycle. That new hype has clearly been found in AI. The question is why did the two exponents of blockchain, Bitcoin and Ethereum, fall in January when there is so much optimism about the economy and the new tech wave?

The answer is simple: blockchain is usually slightly ahead of the "traditional" tech economy, and Bitcoin and Ethereum already posted huge increases in 2023. Compared to a year ago, Bitcoin rose 84% and Ethereum 45%. The adoption of the first Bitcoin ETFs thus became an old-fashioned "buy the rumour, sell the news" scenario that even led to fears of another violent price correction for crypto.

Billions have been invested in new applications, many of which will come to market as early as this year. We are often going to talk about multimodal AI (roughly speaking AI that knows and recognizes more forms than just text) and in blockchain, the hype projects have mostly been washed away and serious applications are becoming available. Will Apple run into regulatory and Chinese market problems and NVIDIA become one of the three most valuable companies in the world? Everything points to 2024 being a fascinating year.

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AI crypto technology

My Christmas request is: help invest in a sustainable solution

We are just before Christmas 2023 and this might be the time for a flashy annual review or an exciting look ahead to 2024. But there is something we can't ignore that urgently needs our attention. Last week, the UN climate conference COP28 concluded with a hollow declaration of compromise. The Guardian wrote this balanced summary about it.

The US position as the world's largest oil and gas producer remains unaffected. China will continue to expand coal production and India's industry need not fear either. Saudi Arabia tried to remove any reference to fossil fuels, Russia worked behind the scenes to thwart progress and will try again next year when the climate summit is held in Azerbaijan.

Even as an optimist, the lack of specific CO2 reduction targets stops me from cheering over the agreement reached to move away from fossil fuels. Many countries, especially large CO2 emitters, have not agreed to concrete emission reduction targets. That makes the agreement as empty as children's promises in the weeks before Christmas to be less naughty next year.

It is now up to all of us

In December 2015, my colleague Hans Tobé and I attended COP21 in Paris, where the expectation was that for the first time ever serious plans would be forged to combat climate change and, in short, save the world as we know it.

With colleague Hans Tobé on the doorstep of COP21 in Paris, December 2015

At the time, Hans and I had just started Blue City Solutions with a group of like-minded people in the US and France, which aims to support projects that promote CO2 reduction. For various reasons, one of which was the Covid pandemic, this has been more difficult than we had hoped.

Our thinking at the time was that it was important for government and business to act together. In practice, through unwillingness or incompetence, or an unfortunate combination thereof, politicians around the world are proving unable to come up with a coherent policy to combat global warming.

Meanwhile, promising technological innovations have been developed, such as CSS technology that removes CO2 from the atmosphere and dissolves it in water but there have also been breakthroughs in ocean fertilization. Major breakthroughs are being made in the field of energy efficiency, which has convinced me that the fastest way to save this planet is through innovations from within society, with governments only facilitating and not guiding.

iXora, from The Netherlands

Everyone reading this newsletter, including through LinkedIn, Medium or Marketing Report, uses modern technology in their daily lives. Whether it is cloud services like Dropbox, Google Cloud or Microsoft OneDrive, AI applications like ChatGPT or streaming services like Netflix; modern life is made possible by services delivered from data centers, a market that is currently growing nearly 20% per year!

Those very fast-growing data centers are eating up power, especially to cool the modern, latest generation servers. Thus, together we are part of the problem. In my opinion, the solution is not to trade in our smartphones for old Nokias, but rather to take a leap forward and cool data centers in a better way.

That is what iXora does based on 'immersion cooling', cooling by means of liquid instead of air cooling, a patented technology that allows data centers to save over 30% on their energy consumption and also generates residual heat that can be used by houses and offices, for example. In short, iXora's technology leads to significant cost savings and structural reduction of CO2 emissions.

Netherlands most interesting startup

I have previously explained in detail why I am not neutral when it comes to iXora and why I think iXora is Holland's most interesting startup.

Watch the short introductory video of iXora here

In a nutshell: first of all, the data center industry is a global billion-dollar market that is forced to reduce energy consumption, and thus CO2 emissions, as soon as possible. If only because of energy costs!

Second, the unique technology that iXora employs to cool servers in the worldwide standard 19-inch enclosure is well patented, providing a competitive advantage. And third, I have come to know the founders as knowledgeable, energetic and reliable.

Those three factors together are rare to see in a Dutch startup. iXora offers an investment in accordance with the planet-people-profit principle, where technological advances enable a sustainable world in a profitable way. That approach appeals to me.

I also expect a lot from the R&D project announced this week by iXora to apply iXora's cooling technology to the equipment of NVIDIA, the undisputed leader in servers for AI applications. As a participant in the NVIDIA Inception Program, iXora will have access to NVIDIA engineers in making iXora technology suitable for NVIDIA's CPUs and GPUs.

And admittedly, in the context of full transparency: I also think, as a thrifty Dutchman, that the valuation of iXora, the price per share, for a company in such a global market that already delivers its products to paying customers, is modest. If iXora were based not in the Netherlands but in Palo Alto, the company would be worth at least fivefold. It's as simple as that.

The Christmas spirit in 2023: invest in sustainability

With any innovation, what matters most is what the customer thinks of it. This is precisely why the opinion of Ludo Baauw, CEO of Intermax, is so important. As a Rotterdam native, he makes no bones about it. Watch here his clear presentation on the first installation of iXora at Intermax, in the data center of NorthC. (I hope your version of YouTube has subtitles in your preferred language.)

Because you, as reader of this newsletter, are also strongly interested in innovations that can improve our lives, I am therefore asking you to support iXora. That's my request to you this Christmas.

Participating is possible from as little as €5,000 and all information is available here. There are people who invest in their children's names so that any profits will go to the next generation. A nice thought, but I would carefully consider how savvy your offspring is because it potentially involves serious pocket money.

Be careful anyway, of course: despite my enthusiasm, I want to emphasize that investing in startups is high-risk. Do this only with money you can spare and also assume you will lose it; but if you do start to see a return, it will probably be much more than you put in.

Spotlight 9: technology had a banner year in 2023

Speaking of investing and risk, it remains striking to see that despite the war in Ukraine, the misery in Israel and Gaza, and the uncertainty surrounding China's economy, with the U.S. presidential election looming, tech stocks achieved phenomenal returns in 2023.

NVIDIA, Meta and Bitcoin were the winners of 2023. Looking over the last five years, it was different.

In addition to looking at 2023, I also looked back at the best-performing stocks in the last five years. That leads to a different picture and different conclusions. What stands out the most in 2023 is not that NVIDIA, up 242%, was by far the best investment of the Spotlight 9, because with the explosion of the AI market, that was no surprise.

But I don't know anyone who expected Meta (Facebook, Instagram, Whatsapp) shares to rise 168% this year after the disastrous 2022. The comeback of Bitcoin and Tesla was also remarkable. Investing, especially in technology, remains a strange combination of analytical thinking and belief in magic.

Therefore, it also makes sense not to lose sight of the S&P 500: in this chart it is the slowest kid in class, but in 2023 this index rose 23% and over the last five years the increase was as much as 93%. For the prudent investor, still a return many times better than a savings account.

Looking at the last five years, Ethereum, NVIDIA and Tesla have been the top three investments with staggering increases:

  • Ethereum: 1,841%
  • NVIDIA: 1,409%
  • Tesla: 1,089%

I certainly expected Bitcoin to be on the podium, but this shows once again that when it comes to investing, I'm better off focusing on analysis than predictions. Because I still can't give a single meaningful answer to the most frequently asked question, "what will be the next Ethereum, NVIDIA and Tesla in the next five years?

I want to thank everyone for their interest, tips and feedback and wish all readers and their loved ones a very Merry Christmas, a Happy New Year and all the happiness, love and health in 2024. Until next year!

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AI crypto technology

Google in total panic by OpenAI, fakes AI demo

At last, Google's response to ChatGPT's OpenAI appeared this week, highlighted by a video of Gemini, the intended OpenAI killer. The response was moderately positive; until Friday, when it was revealed that Google had manipulated some crucial segments of the introductory video. The subsequent reactions were scathing.

Google makes a video, fake 1. Er, take 1. (Image created with Dall-E)

Google was showered with scorn and the first lawsuits should be imminent. A publicly traded company cannot randomly provide misinformation that could affect its stock price. Google is clearly in panic and feels attacked by OpenAI at the heart of the company: making information accessible.

Google under great pressure

It was bound to happen. CEO Sundar Pichai of Alphabet Inc, Google's parent company, went viral earlier this year with this brilliant montage of his speech at the Google I/O event in which he uttered the word AI no less than twenty-three times in fifteen minutes. The entire event lasted two hours, during which the term AI fell over one hundred and forty times. The message was clear: Google sees AI as an elementary technology.

Meanwhile, Google's AI service Bard continued to fall short of market leader OpenAI's ChatGPT in every way. Then when Microsoft continued to invest in OpenAI, running up the investment tab to a whopping $13 billion while OpenAI casually reported that it was on its way to annual sales of more than a billion dollars, all alarm bells went off at Google.

The two departments working on AI at Google, called DeepMind and Google Brain - there was clearly no shortage of self-confidence among the chief nerds - were forced to merge and this combined brain power should have culminated in the ultimate answer to ChatGPT, codenamed Gemini. With no less than seventeen(!) videos, Google introduced this intended ChatGPT killer.

Fake Google video

Wharton professor Ethan Mollick soon expressed doubts about the quality of Gemini. Bloomberg journalist Parmy Olson also smelled something fishy and published a thorough analysis.

The challenged Gemini video

Watch this clip from Gemini's now infamous introduction video, in which Gemini seems to know which cup to lift. Moments later, Gemini seems even more intelligent, as it immediately recognizes "rock, paper, scissors" when someone makes hand gestures. Unfortunately, this turns out to be total nonsense.

This is how Gemini was trained in reality. Totally different than the video makes it appear.

Although a blog post explained how the fascinating video was put together, hardly anyone who watched the YouTube video will click through to that apparently accompanying explanation. It appears from the blog post that Gemini was informed via a text prompt that it is a game, with the clue: "Hint: it's a game."

This undermines the whole "wow effect" of the video. The fascination we initially have as viewers has its roots in our hope that a computer will one day truly understand us; as humans, with our own form of communication, without a mouse or keyboard. What Gemini does may still be mind-blowing, but it does not conform to the expectation that was raised in the video.

It's like having a date arranged for you with that very famous Cindy, that American icon of the 1990s, and as you're all dressed up in your lucky sweater waiting for Cindy Crawford, it's Cindy Lauper who slides in across from you. It's awesome and cozy and sure you take that selfie together, but it's still different.

The line between exaggeration and fraud

The BBC analyzed another moment in the video that seriously violates the truth:

"At one point, the user (the Google employee) places down a world map and asks the AI,"Based on what you see, come up with a game idea ... and use emojis." The AI responds by seemingly inventing a game called "guess the country," in which it gives clues, such as a kangaroo and koala, and responds to a correct guess by the user pointing to a country, in this case Australia.

But in reality, according to Google's blog post, Gemini did not invent this game at all. Instead, the following instructions were given to the AI: "Let's play a game. Think of a country and give me a clue. The clue must be specific enough that there is only one correct country. I will try to point to the country on a map," the instructions read.

That is not the same as claiming that the AI invented the game. Google's AI model is impressive regardless of its use of still images and text-based prompts - but those facts mean that its capabilities are very similar to those of OpenAI's GPT-4.'

With that typical British understatement, the BBC disqualifies the PR circus that Google tried to set up. Google's intention was to give OpenAI a huge blow, but in reality Google shot itself in the foot. Several Google employees expressed their displeasure on internal forums. That's not helpful for Google in the job market competition for AI talent.

Because in these very weeks when OpenAI appeared to be even worse run than an amateur soccer club, Google could have made the difference by offering calm, considerate and, above all, factual information through Gemini.

Trust in Google damaged

Instead, it launched a desperate attack. I'm frankly disappointed that Google faked such an intricate video, when to the simple question "give me a six-letter French word," Gemini still answers with "amour, the French word for love. That's five letters, Gemini.

The brains at Google who fed Gemini with data have apparently rarely been to France, or they could have given the correct answer: 'putain, the French word for any situation.'

Google's brand equity and market leadership are based on the trust and credibility it has built by trying to honestly provide answers to our search questions. The company whose mission is to make the world's information organized and accessible needs to be much more careful about how it tries to unlock that information.

Techcrunch sums it up succinctly, "Google's new Gemini AI model is getting a mixed reception after its big debut yesterday, but users may have less confidence in the company's technology or integrity after finding out that Gemini's most impressive demo was largely staged."

Right now, Google is still playing cute with rock-paper-scissors, but once Gemini is fully available it is expected to provide relevant answers to questions such as, I'll name a few, who can legitimately claim Gaza, Crimea or the South China Sea. After this week, who has confidence that Gemini can provide meaningful answers to these questions?

Hey Google, you're on the front page of the newspaper. True story (Image created with Dall-E).

How many billion ican OpenAI snatch rom Google?

The reason Google is reacting so desperately to the success of OpenAI is obviously because it feels it is being threatened there were it hurts: the crown jewels. In the third quarter of 2023, Alphabet Inc. the parent company of Google reported total revenue of seventy-seven billion dollars.

A whopping 78% of that was generated from Google's advertising business, which amounts to nearly sixty billion dollars. Note: in one quarter. Google sells close to seven hundred million dollars in advertising per day and is on track to rake in thirty million dollars - per hour.

ChatGPT reached over a hundred million users within two months of its launch, and it is not inconceivable that OpenAI will halve Google's reach with ChatGPT within a few years. Everyone I know who uses ChatGPT, especially those with paid subscriptions, of which there are already millions of users, says they already rarely use Google.

Google has far more reach than it can sell so decrease in reach does not equate to a proportional decrease in revenue; but it is only a matter of time before ChatGPT manages to link a good form of advertising to the specific search queries. I mean: there's a company that makes millions per hour selling blue links above answers...

Falling stock market value means exodus of talent

Google will then quickly be able to drop from one of the world's most valuable companies with a market capitalization of $1.7 trillion (1,700 billion) to, say, half - and then be worth about as much as Google's hated, loathed competitor in the advertising market: Meta, the creator of in Google's brains simple, low-down social media like Facebook, Instagram and Whatsapp. Oh, the horror.

This is especially important because in this scenario, the workforce, which in the tech sector never perks up from declines in the value of their options, is much more likely to move to companies that do rapidly increase in value. Such as OpenAI, the maker of ChatGPT.

Spotlight 9: the most hated stock market rally

'The most hated rally,' says Meltem Demirors: the rise of Bitcoin and Ethereum continues.

'The most hated rally,' is how crypto oracle Meltem Demirors aptly describes the situation in the crypto sector. ' Everyone is tired of hearing about crypto, but baby, we're back!'

After all the scandals in the crypto sector, the resignation of Binance CEO Changpeng Zhao, CZ for people who want to pretend they used to play in the sandbox with him, seems to have been the signal to push the market upward. I wrote last March about the problems at Binance in meeting the most basic forms of compliance.

According to Demirors, macroeconomic factors play a bigger role, such as expected interest rate declines and the rising U.S. budget deficit. The possible adoption of Bitcoin ETFs is already priced in and the wait is on for institutional investors to get into crypto. Consumers already seem to be slowly returning. Crypto investors, meanwhile, seem more likely to hold Ethereum alongside Bitcoin.

Investing and giving birth

I continue to be confirmed in my conviction that professional investors understand as much about technology as men understand about childbirth: of course there are difficult studies and wonderful theoretical reflections on it, but from what I hear from experts in the field of childbirth (mothers) it turns out to be a crucial difference whether you are standing next to a delivery, puffing along, or bringing new life into this world yourself. There is a similar difference in investing in technology or developing it.

I don't think there is a person working in the tech sector who, after reading through the reactions to Google's Gemini announcement, thought, "that looks great, I need to buy some Alphabet shares soon.

But what did Reuters report, almost cheerfully: "Alphabet shares ended 5.3% higher Thursday, as Wall Street cheers the arrival of Gemini, saying the new artificial intelligence model could help close the gap in the race with Microsoft-backed OpenAI."

Ken Mahoney, CEO of Mahoney Asset Management (I detect a family relationship) said "There are different ways to grow your business, but one of the best ways is with the same customer base by giving them more solutions or more offers and that's what I believe this (Gemini) is doing for Google."

The problem with people who believe something is that they often do so without any factual basis. By the way, Bitcoin and Ethereum rose more than Alphabet (Google) last week.

Other short news

The Morin and Lessin couples are journalists, entrepreneurs and investors, making them a living reflection of the Silicon Valley tech ecosystem.

Together they make an interesting podcast that this week includes a discussion of Google's Gemini and the crypto rally.

It's great that Google founder Sergey Brin is back to programming at Google out of pure passion. The Wall Street Journal caught onto it this summer. Curious what Brin thinks of the marketing efforts of Gemini, which he himself is working on.

Elon Musk's AI company, x.AI, is looking for some start-up capital and with a billion, they can at least keep going for a few months. Which does immediately raise the question of why Musk accepts outside meddling and doesn't take the round himself. Perhaps he already expects to have to make a substantial contribution to x.com, the former Twitter.

Mistral, the French AI hope in difficult days for the European tech scene, didn't make a video, not even a whitepaper or blog post, but it linked in a tweet to a torrent file of their new model, attractively named MoE 8x7B. It made one humorous Twitter user sigh "wait you guys are doing it wrong, you should only publish a blog post, without a model." It will be a while before people stop taking aim like this at Google. Anyway, as far as I'm concerned, only amour for Mistral.

Details should become clear in the coming days, but the fact that Amnesty International is already protesting because of the lack of a ban on facial recognition is worrying. EU Commissioner Breton believes this puts Europe at the forefront of AI and therefore he would likely thrive as a tech investor on Wall Street.

CFO Paul Vogel got kicked while he was already down: "Spotify CEO Daniel Ek said the decision was made because Vogel did not have the experience needed to both expand the company and meet market expectations." Vogel was not available for comment but still sold over $9 million worth of options. It remains difficult to build a stable business as an intermediary of other people's media.

Apparently, MBS is an avid gamer. After soccer and golf, Saudi Arabia is now plunging into online gaming and e-sports.

I hold out hope that AI will be used in medical technology, to more quickly detect diseases, make diagnoses or develop treatments. But right now, the smartest kids in the class seem focused on developing AI videos that mimic the dances of real people on TikTok.

Where are the female automotive designers? 'Perhaps the way forward in the automotive industry lies neither with the feminine (the unwritten page) nor the masculine (full steam ahead), but somewhere in the middle that combines the practical and the poetic, with or without a ponytail,' according to Wired.

Categories
AI crypto NFTs technology

Build your own ChatGPT, an ex-Apple couple builds an AI pin and Ethereum through $2,000

Last week was busy and filled with travel days, so I was unable to follow the news closely. Instead, I saved interesting links and perused them yesterday. It is amazing to see all that is happening in technology in one week, especially within AI and crypto.

I have tried to briefly summarize and comment on the most noteworthy developments. I hope it has not become too much of a shopping list of links:

OpenAI launches DIY GPT

OpenAI allows developers and ordinary people to share custom chatbots with the public through a "GPT Store," a proprietary app store where verified developers can upload their chatbots and make them available for users to download. In the coming months, developers will also be able to earn money based on how many people use their chatbot.

Venture Beat published a sort of match report from OpenAI's Developer Day, but the five examples of what is already being built with ChatGPT custom and the instruction on how to use GPT Builder are more relevant.

AI is an arms race and the generals are getting rich

OpenAI is paying $10 million to AI researchers by holding an employee stock sale that would nearly triple the startup's valuation to more than $80 billion. The company's recruiters are trying to lure away top artificial intelligence professionals from Google with millions of dollars and a simple message: join OpenAI now to lock in a stock package at the current valuation of $27 billion and benefit from the impending increase.
 

This is a brave new world, because until now companies like Google and Apple were able to snatch talent away from startups by offering them an offer they couldn't refuse through a combination of guaranteed top salary (think four years guaranteed at $3 million) plus a minimum equivalent equity package. OpenAI now benefits from the fact that its valuation is rising much quicker than the market caps of Apple and Google.

By allowing new private investors to buy a portion of employees' stock, they can benefit from the increase in value much faster than in the traditional model where they have to wait for an IPO and subsequent lock up period. It is good to keep in mind that when Facebook went public in 2012, its market cap was similar to that of OpenAI today. Except that OpenAI is not expected to go public anytime soon.

It won't keep raining billions in the AI sector for long

OpenAI's stratospheric valuation will be of great concern to investors in independent competitors such as Anthropic (maker of Claude) and Inflection.ai (maker of chatbot Pi). The market for applications like OpenAI's ChatGPT is very similar to the search engine market, in which Google has over 80% market share and the number two, Bing, less than 10%.

That makes it very risky for investors to invest in Anthropic and Inflection at valuations above roughly $5 billion, because the numbers two and three always get a lower valuation per customer or per dollar of revenue than the market leader. A thinning of the field of AI developers within a year therefore seems logical.

A camera, no screen: the 'pin' of Humane. Source: Humane website.

AI pin of a quarter of a billion

That said, this week's big news is undeniably that Humane, the company of former Apple employees Bethany Bongiorno and Imran Chaudhri, described by The Wall Street Journal as "spouses and co-founders" who have already raised nearly a quarter of a billion (!) dollars in investment money, launched its first product: the Ai pin, or artificial intelligence pin, which you are supposed to wear on your clothes.

The pin weighs 55 grams (two ounces), about the weight of a tennis ball, is controlled by your voice to make phone calls and look up data (in OpenAI, of course, by Sam Altman, also one of the investors in Humane) and stands out mainly because it includes a camera to take pictures, but no screen to read anything from.

Ars Technica doesn't like it: "The Human AI Pin is a bizarre cross between Google Glass and a pager. The Human AI Pin has no screen, no apps, and a creepy in-your-face camera." The laser projection, which allows you to project information onto your hand, is appreciated but seemingly more because of its high James Bond vibe. The lack of an app store for third-party apps is rightly seen as a major omission.
Ars Technica continues: "It’s also too early to tell whether Humane’s hope that the Pin can help people to live more in the moment will prove true, or whether it will simply provide a new way to be unhealthily obsessed with technology."

The entire presentation video is interesting to watch, but perhaps not for the reasons the founders hope. First of all, I don't understand why you would buy a $699 device that can do little more than a smartphone, which everyone always carries with them and is not going to be replaced by an AI pin. To live stream with perhaps, from your chest? I don't see that market to become huge anytime soon.

Battery = perpetual power system?

Besides, I always get a serious itch for devices that come with slogans and marketing-speak that make no sense. The pin's replaceable battery is called in Human terms a "perpetual power system" and the orange light that indicates the camera is on is a "trust light.

What I can greatly appreciate, however, is the straight face of Imran Chaudhri with which he presents his devices. He and Ms. Bongiorno do not have a good morning at all, but look like they are delivering a eulogy at the funeral of a beloved relative. This is so much nicer than those pumped-up marketing figures who coo "we are so excited" when announcing a new printer driver.

I also like that Mr. Chaudhri is humble enough to function as a "second-in-command" under Ms. Bongiorno, the CEO.

Spotlight 9: BlackRock believes in Ethereum

This is what happens when BlackRock, the world's largest asset manager, plunges into Ethereum.

I have often written enthusiastically about Ethereum, the most popular development platform for blockchain applications, incidentally also adorned with a wonderful slogan: "Ethereum, the world's computer. But because it is not entirely clear what the total number of ETH in circulation will be, one can have doubts about Ethereum as an investment. Function and value are often not connected. Consider the value of tap water (and in developed nations, potable tap water) to our lives and the low price we pay for it.

The unsurpassed Meltem Demirors explained on CNBC why Bitcoin's share price continued to rise and ETH jumped over 10% this week. The news that BlackRock plans to introduce an ETF (Exchange Traded Fund) for Bitcoin in addition to one for Ethereum is a huge catalyst for the end of the crypto winter.

A BlackRock ETF for Bitcoin and Ethereum, subject to SEC approval of course, offers investors a more accessible and potentially safer way to invest in cryptocurrencies without the technical complexities of buying, storing and managing cryptocurrencies directly. Purchases are made like a normal stock on a conventional exchange, with the underlying management and security of the digital currencies provided by BlackRock.

it's easy to forget how big BlackRock is because the nearly $10 trillion under management is an incomprehensible large number. But $10 trillion is ten thousand times a billion(!). Once BlackRock can offer Bitcoin and Ethereum to its clients and even only 1% goes into crypto, that would already mean almost 10% additional capital in the crypto market immediately.

Other short news

Whatever happened to NFTs?

The BBC almost gloats over the collapse of the NFT market and does report that Bitcoin is down about 50% compared to its peak, without mentioning that Bitcoin is up a whopping 880% compared to five years ago. Ethereum's 1762% rise in the last five years is not mentioned at all. Mediocre journalism.

Investor Ben Evans is not a fan of Elon Musk

Ben Evans, in his excellent newsletter on the demise of Twitter under the reign of Elon Musk, writes this wonderful sentence: "It turns out that social networks are harder than rocket science."

Chinese startup quickly stockpiled Nvidia chips

Just before the US export ban, the Chinese company 01.AI quickly purchased chips from Nvidia for a year and a half. CEO Kai-Fu Lee laments the trade war: "We will have two parallel universes. Americans will supply their products and technologies to the U.S. and other countries, and Chinese companies will build for China and whoever uses Chinese products. The reality is that they will not compete very much in the same market."

Google about to invest in AI startup Character.ai

Google is in talks to invest hundreds of millions of dollars in Character.AI, as the fast-growing ai-chatbot startup seeks capital to train models and keep up with user demand, according to Reuters. I doubt that user demand, because I don't see so many people eager to engage in a conversation with a fake psychologist or banana chatbot.

WeWork bankrupt

I never understood why a landlord of overly trendy, expensive office space would be worth $50 billion. Apparently most people agreed.

Skiing gets more dangerous, but technology helps

Climate change increases the risk of avalanches, but smart techniques like patrolling drones help keep it safe.

Categories
AI technology

Is Bitcoin worth more than Tesla? And politicians worldwide struggle how to deal with AI.

Resurrected for the umpteenth time: Bitcoin had a record-breaking week.
Image taken with Midjourney.

Bitcoin is worth more than Tesla, Western politicians struggle with AI policies and Elon Musk wants to make banks obsolete with X, The Platform Formerly Known As Twitter (TPFKAT).

Bitcoin up 106% this year

Halfway through the week, the self-proclaimed Gaza experts were back to being crypto bros for a day and it was party time in crypto land as Bitcoin briefly crossed the $35,000 mark. The price has already risen 106% this year, leaving Bitcoin far ahead of the number two crypto, Ethereum; the leading blockchain-based development platform which rose "only" 49% this year.

Of the investments I follow in my completely arbitrary Spotlight 9, only the engine of the AI economy, Nvidia, outperformed Bitcoin this year: shares NVDA are up a whopping 183% so far in 2023. Meanwhile, Bitcoin's share price is hovering just above $34,000, but the price increase of over 13% over the past week is extraordinary.

The price rise was mainly due to the expectation that a Bitcoin ETF will be approved. So there was not even the approval of an ETF, but the expectation that one will be approved. (I wrote earlier about a Bitcoin ETF: It's like a weatherman saying, "tomorrow it could rain. That does require a change in the cloud cover first.')

Google is struggling to catch up in the AI race and published poor quarterly results. Bitcoin is its own parallel universe.
Graph created with Canva.

Bitcoin beats Tesla?

The unique combination of scarcity and tradability make Bitcoin a sought-after investment asset. Bitcoin is a scarce digital asset of which a maximum of 21 million will ever be made, and it is tradable 24 hours a day even from a cell phone. But Bitcoin's price is driven entirely by speculation and expectations. There is no underlying value, no company making anything on the basis of which future profits can be estimated.

There's nothing wrong with that per se, since people also invest in gold, trainers and whiskey; but of course we shouldn't start pretending that Bitcoin and corporations are comparable giants. Yet this week even the usually serious Coindesk went even further off track than a fifty-something at Amsterdam Dance Events on E by exuberantly headlining that "Bitcoin has overtaken the market value of Elon Musk's Tesla.

Crypto bros could also consider investing in sneakers, gold and whiskey.
Image created with Midjourney.

Indeed, at the current price, the value of all Bitcoins combined is over $700 billion, which is more than Tesla's market value (the price multiplied by the number of shares outstanding) of $650 billion. But Tesla has assets: it has patents, factories, staff, a sales network and a well-stocked order book. Bitcoin has the transparency of its blockchain and a value determined solely by supply and demand.

By the way, for Bitcoin fanatics, there is good reason to observe some modesty if they think Bitcoin is a better investment than Tesla. Here are the price gains over the last 5 years of Bitcoin compared to Nvidia, Ethereum and ... Tesla:

  • Bitcoin: 438%
  • Nvidia: 654%
  • Ethereum: 749%
  • Tesla: 798%

As I was typing this, it occurred to me that Elon Musk must keep track of this, and in my mind I can hear him chuckling.

Hamas did not get millions from crypto

Less funny was an article in the Wall Street Journal claiming that the sandblasted version of the SS had raised millions from crypto donations. It led to questions in the U.S. Congress while investigations showed that the report was total nonsense. The Wall Street Journal refused to retract the article and once again it appears that the low interest of serious media in the crypto world leads to poor reporting, misrepresentation and as a consequence poor policy making.  

Western leaders struggle with AI

Next week, President Biden and British Prime Minister Sunak are both making an effort to establish themselves as the most responsible world leaders on AI policy. Biden will do so by presenting an executive order on the use of AI and Sunak will hold a real world summit in a symbolic place.

Executive order of over 100 pages on AI

Someone who has read the Biden administration's long-awaited executive order on AI told VentureBeat that it is "the longest" he has ever seen, at more than 100 pages.

The presentation at the White House by President Biden is scheduled for Monday afternoon, during an event titled "Safe, Secure, and Trustworthy Artificial Intelligence." Choosing that name for an event about AI is as fitting as using "sociable, respectful and civilized" as a slogan for Twitter or "shy, sometimes petulant but always good-humored" for Hamas.   

Beautiful symbolism by the British

Next week, some 100 world leaders, tech bosses, academics and AI researchers will converge on England's Bletchley Park campus, once home to the codebreakers who played a crucial role during World War II. (Two movie tips on this topic: Enigma starring Kate Winslet, in the role of Kate Winslet but with glasses and set in World War II and The Imitation Game with a brilliant role by Benedict Cumberbatch as Alan Turing.)

'Their goal is to participate in discussions about how best to maximize the benefits of this powerful technology while minimizing the risks,' said the BBC in an article with the hysterical headline 'Can Rishi Sunak's big summit save us from AI nightmare?' Biden is not there, by the way; he is sending Vice President Kamala Harris. Of course, as a world leader, you're not going to hype someone else's AI summit by going there yourself. 

US and Singapore work on joint AI policy

Whereas the US and the UK excel mostly in one-liners and droll designations, Singapore earlier this year announced AI-Verify, a foundation with standardized tests for AI applications that helps companies and organizations use artificial intelligence (AI) "objectively and verifiably." Now Singapore and the U.S. will establish a joint group to promote transparency in AI implementations through technical and process audits.

That sounds boring, but is much more important than those meetings with politicians who don't even know the difference between AI and bad software. Because  standardized testing of AI applications makes it possible to assess the possibilities and dangers of AI in actual use. That will really benefit the world. I know the organizations that will determine and conduct these tests, NIST on behalf of the U.S. and IMDA on behalf of Singapore, and they are very capable. I have high expectations.

Google invests up to $2 billion into OpenAI rival Anthropic

Google 's parent company Alphabet has invested $500 million in artificial intelligence company Anthropic, rival to OpenAI (maker of ChatGPT) and has pledged to invest another $1.5 billion over time.

Google is already an investor in Anthropic, and the new investment should help Anthropic compete with OpenAI's ChatGPT, which is backed by Microsoft. Amazon said last month that it would invest up to $4 billion in Anthropic.

Thus a titanic battle seems to be brewing between two camps: on one side Anthropic, backed by Google and Amazon, and on the other side OpenAI, backed by Microsoft. Despite all the covenants, summits and press conferences by folks such as President Macron, Prime Minister Sunak and President Xi Jinping, the AI market seems to have become a party as American as Thanksgiving Day. Wait, bad example: as American as Fourth of July.

There is simply no other country where so many billions are being invested in the necessary development. Because development of AI does not require millions, as in the good old days, but tens of billions.

Energy consumption of AI a growing problem

"Powering AI can consume as much electricity as a small country."

Dutch researcher Alex de Vries published an interesting article on the growing energy consumption of AI applications. Previously, De Vries published similar analyses on Bitcoin on his site. His analysis aligns with my view that traditional air cooling has reached its limits, which is why I was so excited about iXora's liquid cooling last week.

Around the breakthrough of AI, I see exactly the same pattern as with the breakthrough of the Internet in the 1990s and a little later with mass acceptance of the cell phone. The core criticism is always, "but what does this mean for copyright/proliferation of terror/education of our blood children/our contact with the elderly. Take your pick.

I estimate that it will take at most two weeks for the Western media to realize that this De Vries is touching on a very click-worthy subject with this and start publishing semi-critical pieces on the energy use of AI.

Because if you don't understand much about an innovation, the best thing you can do as a journalist is to be very critical for safety's sake so you can always say later that you have always been skeptical.

Elon Musk owns Twitter for a year now

The Verge was sent audio recordings where Musk tells his team that Twitter, or X as he has dubbed it,will offer full banking services before the end of next year. Meanwhile, X introduced two new subscriptions in an effort to generate more revenue as ad revenue continues to decline.

That's one of four problems the BBC sees at X. It's hard to take that analysis seriously when the British broadcaster also posts this sentence: "What we know for sure is a lot of big names have left the platform over the last year, including Elton John and Gigi Hadid." What you see in this is that the BBC does not understand the order: if the audience leaves, the people who have something to sell also leave. And not the other way around.

Instagram, Snapchat and TikTok did not break through because celebrities were on them; those celebrities created accounts after their management understood that the platforms offered a free communication channel with a mass audience without the intervention of traditional media.

Finally, two special links

At a time when so many children in areas like the Middle East and Ukraine have no chance to live normal lives and reach their potential, it is particularly sad to see someone who seemed to have everything at a young age, like Matthew Perry, who sadly passed away much too soon yesterday, struggle for decades to make it to the next day.

We know Perry mostly as Chandler from Friends. In an old interview with Conan O'Brien, we see him as himself when he tells a hilarious anecdote.

Still, I want to end on a positive note. Developer Prabhjot Singh created a device on the bargain-priced Raspberry Pi that can convert sign language into speech and convert speech into sign language, using a robotic hand. With the device, anyone can communicate with people who only know sign language. In this video, Singh shows how it works. Unfortunately, the sound is poor, but the way it works is clear!

Categories
AI technology

iXora scores in Asia and Marc Andreessen remains positive

"I am at my core an optimist. Whether that comes from nature or nurture, I can't say. Part of being optimistic is keeping the head facing the sun and moving the feet forward." - Nelson Mandela

From music festivals to data centers

A few years ago I was made aware of Gunter Pauli's book The Blue Economy, in which he argues that a sustainable society and economic growth can indeed go hand in hand. I was so enthusiastic about his ideas that I e-mailed Pauli my compliments in my best German, to which he replied in flawless Dutch that he is Belgian - so fortunately used to a blunder.

In practice, it proves difficult to develop this type of profitable but sustainable business. Making a profit and saving the world at the same time turns out to be a particularly complex job. So when my friend Vincent Houwert, whom I had gotten to know through his hosting company True early this century, asked a few years back if I wanted to come see his new way of cooling servers, I was moderately enthusiastic, to say the least.

After selling True, Houwert wanted to relax for a while in Curaçao, where he developed a fascination with professional audio equipment for concerts and festivals where cooling proved a problem. He sought the advice of his friend Vincent Beek, who had years of experience in the international AV industry, and it was Job Witteman, founder of the Amsterdam Internet Exchange (AMS-IX) in the late 1990s, who advised the two Vincents to look at immersion cooling, and especially at the data center market rather than audio equipment.

Why I am not neutral about iXora

Immersion cooling, cooling computers using liquid instead of traditional air cooling with fans, is not at all new in itself. But in my experience, data centers are conservative companies, sort of a cross between real estate people and system administrators, who are averse to fooling around with large tanks full of liquid into which servers must be hoisted with robotic arms. And those are the mainstream immersion cooling solutions on the current market. Hence my initial skepticism about iXora.

Global interest in a Dutch invention

To my surprise, however, Houwert, Beek and Witteman turned out to have succeeded in applying immersion cooling in the standard 19-inch racks, leading to enormous energy savings of the energy-hungry servers; and they had even applied for and obtained a worldwide patent for it. I immediately saw a huge global market for the method used by iXora, in which the servers are placed vertically rather than horizontally in easily removable sealed cassettes, preventing fluid leakage and keeping the server easily accessible for maintenance.

Data centers do need to move to immersion cooling

Rapidly rising energy prices are only increasing the need for data centers to transition to immersion cooling. Because with the huge increase in streaming services, cloud-based software services and, above all, the meteoric development of high performance computing and AI applications such as ChatGPT, a transition from air cooling to immersion cooling is the only option: the next generation of computer chips is simply getting too hot to be cooled by air anymore.

Job Witteman became iXora's CEO and Vincent Beek the Head of Operations & Sales, while Vincent Houwert had to withdraw from the day-to-day operations due to illness and ultimately he sadly passed away. The technical brain within iXora was already on board in the person of Head of Engineering Erwin Bleeker, whom I got to know 15 years ago at True, before he started explaining how to put a server farm together at Dell 😉

That's why I'm not neutral about iXora: it's a product that promotes sustainability through massive energy savings, it covers a global market from the get-go, and it's run by people I know and trust. It seems decent to mention that here.

Why iXora is a worthwhile investment

I find a fascinating aspect about iXora the fact that the first product of a startup from the Netherlands is attracting worldwide attention. Last week iXora was present at trade shows in Silicon Valley and Utrecht, while I visited iXora during Singapore Technology Week at Data Centre World Asia, the leading data center trade show in Asia.

On a booth visit at iXora in Singapore with CEO Job Witteman (center) and Head of Operations & Sales Vincent Beek (right).

Once again, it turned out that months of reading and talking to experts cannot offer me the same insights as a few hours talking to potential customers and partners. iXora, despite its modest booth, was crowded with companies from Japan, China, South Korea, India, Australia and virtually all Asean countries.

Investment analysis of iXora

Based on all the feedback, I was able to draw several conclusions as to why iXora is a very interesting investment, which are too long to share in detail here. But here's the gist.

1. Huge market

As an investor, this remains the most important consideration; you may have invented the best mousetrap in the world, but if there are no buyers it won't work out for you in the end. Smarter people always talk about TAM, Total Addressable Market, and iXora has that covered. Hundreds of millions of servers are compatible with iXora, so this is a billion-dollar market.

2. Competitive advantage

  • Space optimization in data centers: iXora helps data centers optimize their space by eliminating air cooling (often half of the total floor space!) increasing capacity per square foot. In other words: more dollars revenue per square foot for the data center owner.
  • Energy efficiency: initial implementation results show that iXora can reduce energy consumption in data centers by up to 50%. Every penny saved on energy is extra profit for the customer. And reduces CO2 emissions!
  • Ease of use/barrier for customer acceptance: even the biggest klutz can change servers from iXora cassettes, because even I could do it in seconds.

3. Market access/strong partnerships

iXora has signed a global licensing agreement with Lubrizol, a subsidiary of Berkshire Hathaway, the company of legendary investor Warren Buffett. In one fell swoop, it has thus joined the ecosystem that includes Intel and Eaton, greatly increasing the likelihood of worldwide sales. In addition, iXora itself has already built significant traction and has a global pilot series planned for 2024 covering the U.S., Europe and Asia.

4. Scalable business model

Hardware companies often get caught up in expensive manufacturing and scale problems, which is why iXora decided to focus on high-value R&D and outsource manufacturing to specialized companies. I refer to this semi-shockingly as the Apple model, having Foxconn do the manufacturing of the iPhone. But the principle is identical.

5. Strong investment perspective:

As high-end computing requires more and more liquid cooling, iXora's customizable design offers great potential for long-term growth. I personally expect Nvidia servers to quickly fit into an iXora chassis for two reasons:

  • the form factor is not a problem, it is relatively easy to fit together Nvidia's most popular lines and a chassis from iXora
  • Nvidia's chips are very energy intensive and get very hot, so there is a strong need for immersion cooling

6. Valuation

The current asking price and valuation of iXora are considered reasonable, supported by solid insight into future revenues and profits.

iXora has already raised one million Euros from angel investors this year, but you can still participate and start from as little as 5,000 Euros. If you respond to this email or contact me on LinkedIn, I will gladly put you in touch with the founders Vincent and Job.

For those who would rather watch than read

Some people are less fond of reading and prefer to watch video, even if I'm in it, which is why I also made this 5-minute video sharing my observations. So much for iXora.

Churchill, Mandela and ... Andreessen?

Actually, I hate inspirational quotes, but I caught myself last week looking for tips and examples of people who kept faith in a better future during hard times. For example, I enjoyed reading back pieces from speeches by Winston Churchill, although it turned out that one of my favorite one-liners from his rich body of work probably did not come from him at all. Not everyone will experience this phrase as uplifting and positive either, but it gave me giggles and we all need to laugh in times like these:

"If I were married to you, I would put poison in your tea," Lady Astor once remarked to Churchill. "If I were married to you," he replied, "I would drink it."

Last week I said enough about the role social media played in the unrestricted distribution of hate messages by groups like Hamas. Cynicism is the easy option now, but it leads to nothing. Therefore, this week I choose to focus on positives. I focus on possible breakthroughs and opportunities that might otherwise go unnoticed.

The Techno-Optimist Manifesto

You have to be comfortable in your own skin to publish a piece with that title this week, but Marc Andreessen is an eternal optimist. The inventor of the web browser is now a top investor and publishes interesting thinking material more often, such as earlier this year his article against all the doomsday images about the future of artificial intelligence with the headline "Why AI Will Save the World.

Now Andreessen writes:

"Our civilization was built on technology. Our civilization is built on technology.

Technology is the glory of human ambition and achievement, the vanguard of progress, and the realization of our potential. For hundreds of years, we properly glorified this – until recently.

I am here to bring the good news. We can move forward to a much better way of living, and of being. We have the tools, the systems, the ideas. We have the will. It's time to raise the technology flag again. It's time to be Techno-Optimists."

"What does this do for the bathroom tissue industry?

If only I were as positive as Andreessen. Innovations rarely have the massive impact expected at launch. The brilliant marketer Mike Linton once said to me, "when a new innovation is attributed miraculous potential (think AI or a few years back quantum computing) I always think, 'how is this going to change the bathroom tissue industry?' Usually it's not too bad.'

It is always up to the individual how a new breakthrough is applied. One person uses a hammer to build a new bathroom for his elderly neighbor, another one knocks a random passerby off his bicycle with it. It will be no different with AI, I fear. But I feel reinforced in my fascination with innovations by Andreessen's techno-optimism. Hopefully that is true of many people who spend their working lives developing or applying innovations that move the world forward.

Spotlight 9: Nvidia and Tesla down sharply

It was doom and gloom in the stock market: only crypto rose while stock market darlings Tesla and Nvidia fell sharply.

The deep woes in the Middle East led to general malaise in the stock markets, with only the crypto currencies Bitcoin and Ethereum holding up. Tesla' s quarterly results proved a major disappointment, and Nvidia suffered under the U.S. government's announcement that it would block exports of certain Nvidia chips to China.

Founder and CEO of Nvidia Jensen Huang confessed this week that if he had known in advance how difficult it was going to be, he probably never would have started Nvidia:

"That's actually the superpower of an entrepreneur. They don't know how hard it is, and they just wonder, 'How hard can it be?' And to this day I imbibe, 'How hard can it be?' Because it has to be. You have to make yourself believe that it's not that hard, because it's much harder than you think. And if I could go back in time with today's knowledge and have to go through that whole journey all over again, I think it's too much. It's just too much."

A few years ago I was made aware of Gunter Pauli's book The Blue Economy, in which he argues that a sustainable society and economic growth can indeed go hand in hand. I was so enthusiastic about his ideas that I e-mailed Pauli my compliments in my best German, to which he replied in flawless Dutch that he is Belgian - so fortunately used to a blunder now and then.

It has been proven difficult to develop this type of profitable but sustainable business. Making a profit and saving the world at the same time turns out to be a particularly complex job. So when my friend Vincent Houwert, whom I had gotten to know through his hosting company True early this century, asked a few years back if I wanted to come see his new way of cooling servers, I was moderately enthusiastic, to say the least.

After selling True, Houwert wanted to relax for a while in Curaçao, where he developed a fascination with professional audio equipment for concerts and festivals where cooling proved a problem. He sought the advice of his friend Vincent Beek, who had years of experience in the international AV industry, and it was Job Witteman, founder of the Amsterdam Internet Exchange (AMS-IX) in the late 1990s, who advised the two Vincents to look at immersion cooling, and especially at the data center market rather than audio equipment.

Why I am not neutral about iXora

Immersion cooling, cooling computers using liquid instead of traditional air cooling with fans, is not at all new in itself. But in my experience, data centers are conservative companies, sort of a cross between real estate people and system administrators, who are averse to fooling around with large tanks full of liquid into which servers must be hoisted with robotic arms. And those are the mainstream immersion cooling solutions on the current market. Hence my initial skepticism about iXora.

In particular, immersing the server in a dielectric fluid as a cooling mechanism, releasing as a residual product only hot water that can also be used for heating applications, is attracting much interest worldwide.

To my surprise, however, Houwert, Beek and Witteman turned out to have succeeded in applying immersion cooling in the standard 19-inch racks, leading to enormous energy savings of the energy-hungry servers; and they had even applied for and obtained a worldwide patent for it. I immediately saw a huge global market for the method used by iXora, in which the servers are placed vertically rather than horizontally in easily removable sealed cassettes, preventing fluid leakage and keeping the server easily accessible for maintenance.

Data centers must migrate to immersion cooling

Rapidly rising energy prices are only increasing the need for data centers to transition to immersion cooling. Because with the huge increase in streaming services, cloud-based software services and, above all, the meteoric development of high performance computing and AI applications such as ChatGPT, a transition from air cooling to immersion cooling is the only option: the next generation of computer chips is simply getting too hot to be cooled by air anymore.

Job Witteman became iXora's CEO and Vincent Beek the Head of Operations & Sales, while Vincent Houwert had to withdraw from the day-to-day operations due to illness and ultimately he sadly passed away. The technical brain within iXora was already on board in the person of Head of Engineering Erwin Bleeker, whom I got to know 15 years ago at True, before he started explaining how to put a server farm together at Dell 😉

This is why I am not, as with Nvidia and Canva, for example, neutral about iXora: it is a product that promotes sustainability through huge energy savings, it covers a global market from its inception, and it is run by people I know and trust, which is why I also bought a few certificates in iXora's STAK (more on that later). It seems decent to mention that here.

Why iXora is a worthwhile investment

I find a fascinating aspect about iXora the fact that the first product of a startup from the Netherlands is attracting worldwide attention. Last week iXora was present at trade shows in Silicon Valley and Utrecht, while I visited iXora during Singapore Technology Week at Data Centre World Asia, the leading data center trade show in Asia.

Sexy business: on a booth visit at iXora in Singapore with CEO Job Witteman (center) and Head of Operations & Sales Vincent Beek (right).

Once again, it turned out that months of reading and talking to experts cannot offer me the same insights as a few hours talking to potential customers and partners. iXora, despite its modest booth, was crowded with companies from Japan, China, South Korea, India, Australia and virtually all Asean countries.

Based on all the feedback, I was able to draw several conclusions as to why iXora is a very interesting investment, which are too long to share in detail here. But here's the gist.

Investment analysis of iXora

1. Huge market

As an investor, this remains the most important consideration; you may have invented the best mousetrap in the world, but if there are no buyers it won't work out for you in the end. Smarter people always talk about TAM, Total Addressable Market, and iXora has that covered. Hundreds of millions of servers are compatible with iXora, so this is a billion-dollar market.

2. Competitive advantage

Briefly:

  • Space optimization in data centers: iXora helps data centers optimize their space by eliminating air cooling (often half of the total floor space!) increasing capacity per square foot. In other words: more dollars revenue per square foot for the data center owner.
  • Energy efficiency: initial implementation results show that iXora can reduce energy consumption in data centers by up to 50%. Every penny saved on energy is extra profit for the customer. And reduces CO2 emissions!
  • Ease of use/barrier for customer acceptance: even the biggest klutz can change servers from iXora cassettes, because even I could do it in seconds.

3. Market access/strong partnerships

iXora has signed a global licensing agreement with Lubrizol, a subsidiary of Berkshire Hathaway, the company of legendary investor Warren Buffett. With this, it has at a stroke joined the ecosystem that also includes Intel and Eaton, greatly increasing the likelihood of worldwide sales. With these partners, no copycat will soon dare violate iXora's patent by releasing a vulgar copy. In addition, iXora itself has already built significant traction and has a global pilot series planned for 2024 covering the U.S., Europe and Asia.

4. Scalable business model

Hardware companies often get caught up in expensive production and scaling problems, which is why iXora decided to focus on high-quality R&D. Production, sales and support are handled by the licensing partners, first and foremost Lubrizol.

5. Strong investment perspective:

As high-end computing requires more and more liquid cooling, iXora's customizable design offers great potential for long-term growth. I personally expect Nvidia servers to quickly fit into an iXora chassis for two reasons:

  • the form factor is not a problem, it is relatively easy to fit together Nvidia's most popular lines and a chassis from iXora
  • Nvidia's chips are very energy intensive and get very hot, so there is a strong need for immersion cooling

6. Valuation

The current ask and valuation of iXora are considered reasonable, supported by solid insight into future revenues and profits. The partnership with Lubrizol alone guarantees a minimum of tens of millions of dollars in revenue.

iXora has already raised one million Euros from angel investors this year, but you can still participate and start from as little as 5,000 Euros. If you respond to this email or contact me on LinkedIn, I will gladly put you in touch with the founders Vincent and Job.

For those who would rather watch than read

Some people are less fond of reading and prefer to watch video, even if I am in it, which is why I also made a 5-minute video sharing my reasons why I invested in iXora. The short video is available in Dutch and in English.

Finally, nice other tech optimism:

  • Basketball player starts $200 million venture capital fund. Four-time NBA champion Andre Iguodala knew more than a decade ago, when he signed with the Golden State Warriors, that he wanted to establish a network in the technology world in San Francisco to profit from after his career. That seems to be working out quite well.
  • Electric vertical takeoff plane gets certification. It looks like a joke: it's electric, can hang and comes from China, what's it called? EHang. Seriously. Looks very cool, wonder if it will be a success.
  • Repairing is the new cool. The Guardian sees a sustainable development in Amsterdam that gives short shrift to the fast fashion trend: it's becoming wholesale repair, rather than constantly buying new and throwing it away.  
Categories
crypto technology

The best tech investments of the last five years were not Apple or Bitcoin, but Tesla and Ethereum

At the twenty-fifth edition of this newsletter, I want to look across this dull news week at what has been the best-yielding investment in tech over the last five years. To my surprise, it was not Apple, Bitcoin or Nvidia, but Tesla. In the crypto world, Ethereum turned out to have risen twice as much as Bitcoin. Ok, one news fact did stand out this week: Tinder is introducing a $500-a-month subscription, for real enthusiasts.

If Tesla and Ethereum made a car together, it would look like this, according to Midjourney.

Tesla and Ethereum the big winners

Tesla rose as much as 1287% and Ethereum 611% over the last five years, against Nvidia 492%, Bitcoin 305% and Apple 210%. Meanwhile, the S&P 500, the classic benchmark, did 48%. War and inflation notwithstanding, saving has still proven far more expensive than index investing.

Tesla and Elon Musk I leave to Walter Isaacson, whose book on Musk is a huge hit. Rather, I look at Ethereum, precisely because the traditional media rarely, if ever, publish a decent analysis on this underrated platform.

But before we dive into the numbers and prices, it's important to review what Ethereum does and can do and how it differs from that blockchain brother from another mother, Bitcoin. For this description, I used ChatGPT and Gert-Jan Lasterie's standard work.

Ethereum is a public workshop

Imagine that the Internet is a big city. In that city you have a market for commerce, a library for information, a bank for money matters, and so on. Bitcoin is something like a special kind of gold; valuable and you can keep it, but otherwise you can't do much with it. The exchange rate varies greatly and so you won't be using it to pay for anything anytime soon.

Ethereum is something completely different, where a group of people got together at the initiative of Vitalik Buterin and said, "instead ofjust making a new kind of money or a different kind of gold, shall we put some kind of public workshop in the city where people can build all sorts of things?"

With Ethereum, you can create "smart contracts," which sounds a bit like magic contracts, which automatically execute themselves once certain conditions are met. So suppose you want to rent a house. Normally you would go to a real estate agent or housing association, show your ID, pay and sign paperwork.

Based on Ethereum, landlord and tenant can use a smart contract that says, "Whoever pays the digital key fee will automatically get the digital key to the house." That transaction takes place on the Internet, no middleman is needed, everything happens automatically based on the smart contract.

But it doesn't stop there. Ethereum is used to build so-called "decentralized applications," called dApps. These are programs that do not run on one central computer but are spread across many computers worldwide. This often makes them more secure and less susceptible to fraud or censorship.

The magic word is decentralized

There is also "DeFi" ("DieFai"), which stands for "Decentralized Finance. These are financial services such as loans or insurance that work on Ethereum through smart contracts, without the involvement of banks or other financial institutions. The 2021 NFT boom was also built on the Ethereum platform.

Unlike Bitcoin and Ripple, Ethereum is technically not a currency, but an open-source software platform for blockchain applications - with Ether (ETH) being the cryptocurrency used within the Ethereum network.

In short, Ethereum is special because it is much more than just a digital currency. It is a complete digital world where you can enter into all kinds of transactions and agreements without the need for anyone else.

It's like a new, smarter layer of the Internet. To join you only need ETH as a means of payment, similar to buying a festival coin when you go to festivals because that coin is accepted as the only means of payment.

Why is Ethereum risky from an investment standpoint?

So much for the utopian vision: a world computer with smart contracts. There is nothing wrong with that, and as an entrepreneur, I am a big fan of access to a development platform like Ethereum. I won't even rule out Ethereum's creators getting a Nobel Prize in economics one day.

But from an investment standpoint, let's look at a fundamental economic principle: scarcity - or in the case of Ethereum, the lack thereof. Every right-thinking person supports Ethereum's expansive vision. It wants to be the oil that drives the gears of Web3. But the oil supply is finite; Ethereum is not.

Bitcoin has its own counter-story. It is limited to twenty-one million Bitcoins, which means built-in scarcity. You don't have to be an economist to understand that scarcity drives demand, which in turn drives up the price.

But Ethereum is like a never-ending digital oil well. Great for powering the network and ensuring there is always enough, but not so great for the fundamental principle of supply and demand. If ETH becomes too abundant, its value may decline, causing the price per coin to fall. The infinite supply means that ETH becomes as common as tap water in developed countries: of course you need it, but you're not going to pay a premium for it.

Thus, the lack of a supply limit for Ethereum can be the Achilles heel for a stable developing price. Therefore, keep a sharp eye on it if you are considering investing in Ethereum after the following paragraphs, because the lack of a supply limit is not icing on the cake; it could be the whole cake, or even the whole pastry - in a country full of diabetics.

Spotlight 9: TSLA phenomenal, ETH rises twice as fast as Bitcoin

With 1287% increase in five years, Tesla deserves a spot in Spotlight 9.

The idea behind Spotlight 9, a name coined by ChatGPT for this column, was to briefly track weekly how the major tech investments were doing compared to the benchmark, the S&P 500. It remains simple: if an investment does not outperform the S&P 500 over the long term, why invest in it and not the S&P? Amazon is such a setback, up only 29% over the last five years versus +48% for the S&P 500.

Stock market sentiment is important because when it rains there, it trickles down throughout the tech world to the youngest startups. If there are no exits, no IPOs, that means less investment in larger tech companies that are not yet publicly traded and it affects the entire tech sector. Ultimately, it limits new innovations.

Meta out, Tesla in

Tesla was not in my Spotlight 9 list because I follow the five biggest tech companies weekly, ranked by market value. Those are Apple, Microsoft, Alphabet (Google), Microsoft and Meta (Facebook). Tesla falls just outside that, but it gets interesting: Meta is currently worth $769 billion and Tesla ... $767 billion.

Based on its performance over the last five years, I threw Meta out of Spotlight 9 and Tesla is in it as of today. Zuckerberg must be devastated and in Musk's house, Elon and the little x's are certainly running an algorithmically calculated polonaise. Let's hope Musk doesn't disappoint with Tesla or I'll have to make another picture.

No master forecasters

In addition to the five largest tech companies by market value, I also follow the two largest crypto currencies, Bitcoin and Ethereum. There is so little coverage of crypto in the traditional media, and I myself have so little interest in daily prices, that I had completely missed the fact that after all the highly exposed price declines of the last two years, Ethereum and Bitcoin have still proven to be very good investments for people who look a little further than a week, a month or a year.

There is hatred and envy in the crypto world between Bitcoin maximalists and altcoin lovers. That's something like a metalhead explaining to a rapper why his music is better. They are incomparable giants, with Bitcoin, as mentioned, being somewhat comparable to a popular, digital version of gold, while Ethereum is a widely used building block of Web3.

Both have some utility, but how that will be reflected in the price is a total guess. As far as I know, at least in September 2018, no one was predicting that Ethereum (+611%) would appreciate twice as much as Bitcoin (+305%).

Tinder's $500-a-month subscription plan

'Hate the game, don't hate the players' thought Tinder and introduced a $500 subscription. Per month.

I read this article and I could not read it without hearing a translation from Amsterdam-West in my head every five sentences. I translate those below back into language that will keep this email from ending up in your spam filter.

Let's start with this passage: "We know that there is a subset of highly engaged and active users who prioritize more effective and efficient ways to find connections," said Tinder Chief Product Officer Mark Van Ryswyk, "which is why we have been conducting extensive testing with this audience recently."

Translation: "We know that there is a horde of horny panters willing to pay unlimited money to us, as long as they have new victims be able to find loves."

Going forward: "The new plan announced Friday, called Tinder Select, was only offered to less than 1% of Tinder users who are among the app's most active, the company said. For nearly $6,000 a year, users will get access to new features, such as 'VIP' search, matching and conversation, that are not currently available with existing paid subscriptions."

Translation: "We don't know exactly how to do it legally yet, but we are going to give this group of addicts a chance to get their victims target audience, at the expense of then those customers of ours who only pay a few tens."

Another gem from the article: "Tinder parent company Match Group Inc. has experience with expensive subscriptions. In 2022, it bought The League, an invitation-only dating app aimed at "ambitious, career-oriented singles. The League has a VIP subscription that costs $1,000 a week. The company previously said the success of The League's expensive subscription caused Match Group to reconsider how it could appeal to "high-intention users on its other apps such as Tinder."

Conclusion: it is heartening that people today have the opportunity to find more potential partners and/or playmates than they used to find at the bus stop to the office or at the billiard bar. Butreh... "high intention users? We used to have very different designations for that kind of low-level guys and girls.

In conclusion

YouTuber and postdoctoral researcher Rob ter Horst of the CeMM Research Center for Molecular Medicine in Vienna tested the new Apple watches and made this fun and informative, science-based video about them. According to his resume, Ter Horst is "designer and research subject at the same time of an extensive N=1 study in the field of computational chemistry and bioinformatics.

Maybe nice if Ter Horst unleashed his scientific expertise and N=1 approach on that $500 subscription, went wild on Tinder for a month and published all the findings of his scientific research on YouTube?

Categories
AI crypto NFTs technology

Why Mark Zuckerberg is trying to seem cool

The other famous ex of top actress Amber Heard, Elon Musk, and Meta top executive Mark Zuckerberg challenged each other to an MMA fight this week, aptly described by the Guardian as a megarich-weirdo cage fight.

Result of the prompt: 'three middle-aged white men in MMA fight, in an exploding nebula.'

That fight is obviously never going to happen, and it's downright pathetic that Airbnb chief Brian Chesky also tried to make headlines by proposing a bench-pressing competition for tech CEOs. Like a freshman wanting to tussle with two upperclassmen boys at a school dance. First, let the man reflect on how he managed to demolish the soul out of the inner cities of Barcelona and Amsterdam in a way that generalissimo Franco and that short tempered Eastern neighbor didn't even manage.

Meta-top guy Mark Zuckerberg is trying to appear cooler at the urging of his spin doctor, the English ex-Vice Prime Minister Nick Clegg (whose website, by the way, is identical to mine because we use the same template, one of us needs to do something about that). Zuckerberg previously appeared for nearly three hours on Joe Rogan's popular podcast, and recently Lex Fridman, whose podcast is always very engaging, laid out the red carpet for Zuckerberg for two hours and 42 minutes.

Cynics noted that these are probably not coincidental venues where Zuckerberg's rival Elon Musk is a frequent guest. Musk got into marijuana with Rogan, and I can see Zuckerberg wanting to top that by sucking the venom out of a live Amazonian frog during the broadcast in a Kambo ritual. Instead, the rivals exchanged some lame texts, Zuckerberg on Instagram and Musk on Twitter.

Herein lies precisely the crux of the problem. After all, Zuckerberg once bought Instagram but is not the founder; those were Kevin Systrom and Mike Krieger, who are currently causing a furor with their new company Artifact. Musk in turn bought Twitter for $44 billion. While the whole world is busy with AI, the gentlemen are anxiously trying to stay in the news with their products of a previous generation.

Musk visionary, Zuckerbergexecutive

Musk is a maverick to say the least, but undisputed as a visionary and entrepreneur. While he was not the founder of Tesla, he was one of its first investors. Musk is the driving force behind the development of electric cars worldwide. Without Tesla, for example, Mercedes would never have built the EQS or Hyundai the cheaper models. I have no idea whether SpaceX is useful or an unnecessary side effect of too much testosterone, but it is a phenomenal achievement for a software maker from South Africa to successfully set up a rocket builder in America that values itself at a whopping $150 billion, Bloomberg reported Friday.

Zuckerberg never gets this respect because the one company he built, partly because of the movie The Social Network, will always be remembered as invented by others. Facebook's success was in Zuckerberg's brilliantly created "timeline" product, the addictive way of organizing friends' posts in one place.

But before Facebook, there were social networks like Friendster and MySpace, or in the Netherlands, Hyves. Facebook is effectively a Habbo Hotel grown out of its strength. Zuckerberg bought Instagram ($1 billion) and Whatsapp ($19 billion), and that shows his gift as an executive, not a visionary developer.

Tip: Andreessen at Fridman

Which is why it was all the more embarrassing for Zuckerberg that Marc Andreessen was Lex Fridman's guest this week. Andreessen was the principal developer of the first graphical Web browser Mosaic, co-founder of the first major dotcom company Netscape and, with his investment firm Andreessen Horowitz, financier of over 300 companies, including not only hits like Airbnb, Coinbase and Pinterest, but also ... Instagram, Facebook and SpaceX.

Andreessen is 51 years old and has been respected as an entrepreneur, visionary and investor for 30 of those years. Anyone comparing the appearances of Andreessen and Zuckerberg at Fridman will be struck by Andreessen's much broader view of the role of technology in society than Zuckerberg, who seems to be able to view the world exclusively through very narrow Facebook glasses.

It is therefore no coincidence that Andreessen has invested heavily in OpenAI, currently the undisputed leader in AI worldwide. Neither Musk nor Zuckerberg plays any role in AI developments. I also refer again to the excellent, thoughtful piece Andreessen wrote about AI early this month, titled "Why AI Will Save the World.

What did Zuckerberg share with the world this month? Who posted an Instagram video of himself training with a world champion jiu jitsu. That's the new geek version of buying a Porsche 911 convertible in a midlife crisis.

McKinsey sharp about AI

In recent weeks I've written more than enough about AI, but so much is happening that I want to share a few more tips. First, a new McKinsey report on the economic potential of AI. I immediately confess that I have not meticulously studied all 50 pages, but the summary on page three is already highly recommended.

Cover photo exudes that signature McKinsey warmth, but the report is fascinating

The report concludes that GenAI could add "$2.6 trillion to $4.4 trillion annually" to the global economy, almost the economic equivalent of adding an entire new country the size and productivity of the United Kingdom to the earth ($3.1 trillion GDP by 2021). To prepare the report, McKinsey analysts surveyed 850 occupations and 2,100 detailed work activities in 47 countries, representing more than 80% of the global workforce.

(I repeat it almost weekly when it comes to the bizarre numbers in the AI industry: a Dutch trillion is a thousand times a billion; in English, a trillion is a "trillion" and a billion is a "billion. Those designations are as useful as the invention of the mile, inch and el).  

An example from the McKinsey report showing the meteoric development in AI:

'Claude, Anthropic's generative AI, in May 2023 was capable of processing 100,000 tokens of text, equivalent to about 75,000 words in a minute - the length of an average novel - compared to about 9,000 tokens when it was introduced in March 2023.'


So Claude's throughput increased from 9,000 words per minute to 75,000 words within two months! 

The Mistral.ai presentation of €105 million 

Last week I wrote about Mistral.ai, the French company that raised the highest funding ever from a European company in a first round, at €105 million. That made me curious about the presentation used for investors, and it is now here.

Notable is the format, a Google Doc, and the total lack of illustrations or photos. It reads more like a seven-page white paper from academia and the crypto industry. (Incidentally, Mistral.ai's seven-page memo is exactly one page shorter than the Bitcoin whitepaper, which reminded me of the famous "7-minute abdominal workout" from Something About Mary. We are waiting for the first entrepreneurs to raise over 200 million with six pages).

Motivate yourself with yourself, went wrong

Speaking of gut training; I stumbled upon this tweet explaining how to use MyShell to create a chatbot using your own voice. The point of talking to yourself is completely unclear to me, but of course I immediately recorded a minute of my own ramblings in accordance with instructions using the Voice Memo app on the iPhone, uploaded it to MyShell and gave some character descriptions to my robot twins like "eternally positive, motivating and not cynical.

In short, my chatbot was especially not supposed to look like me but nevertheless, after the very first question, I disliked my own AI chatbot.

My AI chatbot twins are particularly irritating, and you haven't heard the voice yet

Unfortunately, or fortunately, I cannot include the voice of my chatbot in this newsletter, but let me summarize it this way: the AI-generated robot-Michiel combined the blood-irritating gym-positivism of Arie Boomsma, but without the delightful body, with my weak sandpaper voice, but without my signature modesty.

Short AI news

  • Don't call us an AI startup: this AI startup foresees a glut of AI startups and therefore does not want to be called an AI startup. And of course, anno 2023 you may identify yourself as a startup however you like.
  • The state of legislation on AI in Europe and the U.S.: Europe is ahead in terms of speed on legislation on AI. The only question is: Is it helpful to be ahead with restrictive legislation?
  • Prince Constantine at Humberto Tan: If we start banning instead of tolerating, won't Europe become an outlet for American companies instead of a player and producer? That, in summary, is the question raised by Constantijn van Oranje on Radio 1, partly in response to State Secretary Van Huffelen's ongoing waffling about more legislation. Constantijn also rightly noted that the mistake should not be made of confusing AI, self-learning systems, with old-fashioned Hollandsche automation, or "double-check anyone of color not named Van Huffelen or Van Puffelen. (Examples here, here and here.)

Why true NFTs are the future

In all the news about AI, other fascinating developments risk being underexposed. Therefore kudos to Het Parool, which had an excellent piece on NFTs as a new revenue model for artists with the headline "With the push of a button you can send a work to a buyer on the other side of the world.

With the tidal wave of AI applications, real photos are no longer distinguishable from fakes, look for example at Photoshop's amazing new "generative fill. I wrote earlier about Unveil, the Dutch platform that provides a counterweight to all the AI-generated photography-bagger and is also mentioned in the Parool article as an example in the NFT world.

Unveil, which will open to the public in the coming weeks, collaborates with top photographers and precisely guarantees the authenticity of each work, with both the photographer and the collector benefiting from the transparency offered by capture of each work in the blockchain.

Blockchain transparency also shows that the prices of the famous Bored Ape NFTs collapsed this week and this article explains why.

Other interesting links

Spotlight 9: The beginning of a crypto summer?

Bitcoin and Ethereum continue to benefit from BlackRock

The crypto currencies BTC and ETH are the winners of the week. The recovery set in last week after the unexpected news that the world's largest asset manager, BlackRock, filed an application with the SEC for a Bitcoin spot Exchange-Traded Fund (ETF). I wrote about that last week but did not expect then that Bitcoin would go over $30,000 and stay above that. Once again, it appears that I have few predictive gifts when it comes to investing.

What has also become clear is that the crypto market, led by Bitcoin, is currently moving independently of the mainstream markets that closed Friday in minuscule territory. By contrast, of the 149 crypto assets included in the CoinDesk Markets Indices (CMI), 144 rose last week. If this trend continues into the summer, or just stabilizes around these prices with Bitcoin staying above $30,000 and ETH around $2,000, autumn seems like the time for another crypto rally with the markets also reopening to new crypto projects. And even the biggest crypto-optimist would not have dared to dream that at the beginning of this year.

See you next week!