Sam Altman's Messiah behavior about AI is reminiscent of the way Mark Zuckerberg propagated the blessings of social media for society, before the negative effects became apparent and he was publicly keelhauled, including before the U.S. Congress. Zuckerberg has since argued that social media is a mirror for society rather than the enabler of evil, making him increasingly confident in his presentation to the outside world.
"Inside the bro-ification of Mark Zuckerberg" is the untranslatable headline above an excellent Washington Post article about Zuckerberg reinventing himself as a muscular version of ... Julius Caesar? Zuckerberg has switched from his familiar hoodie to t-shirts with self-invented lyrics quoting the Latin emperor, but apparently forgetting how Caesar met his end.
Zuckerberg is having a banner year: strong financial performance sees Meta shares rise sharply after a disastrous 2023, Apple's VR glasses flop while the new Ray-Ban Meta smart glasses get rave reviews. But once again, Zuckerberg seems blind to the problems his company's introduced technology could cause.
'Man sees unknown woman - including residential address.'
Creepiest glasses ever
Harvard students turned Zuckerberg's Meta glasses into "Terminator glasses" that allow them to do very creepy things simply by looking at someone:
"The technology, which combines Meta's smart Ray-Ban glasses with the facial recognition service Pimeyes and some other tools, allows someone to automatically go from a face to a name, phone number and home address."
The video published by the students on Tuesday paints a terrifying picture of a world in which, for example, any creep wearing such glasses could stalk any woman. The creators have shared all the information about this "I-XRAY" here.
What conservative investors think climate technology investments look like.
Elon Musk had a fantastic week and Mark Zuckerberg saw two hundred billion in market cap evaporate as shareholders doubt his billion-dollar investments in AI. Costs are high and potential returns still completely unclear as Meta AI, powered by their latest language model Llama 3, is offered free and open source.
The sentiment that returns are unclear was also often heard about investments in climate tech, yet the world's largest investor BlackRock and Singaporean sovereign wealth fund Temasek are investing heavily in this crucial sector through a new fund: Decarbonization Partners.
Those considering investing in the rapidly developing sector of climate tech and decarbonization as well, I look forward to meeting you in May when I am in the Netherlands and Singapore. But first: the surprising week of Elon Musk and Mark Zuckerberg.
After 52 editions, here it is: Tesla is the best-scoring stock of the week. What happened?
Musk wins despite gas pedal glue - yes, glue
It was, as is often the case in the tech sector, a tale of two extremes this week: Tesla soared, while Meta plunged. This is especially notable because Tesla shares had slipped to $138 after reaching an all-time high of $409, while Meta was one of the biggest risers in the stock market over the last year. What happened?
"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."
In other words, Tesla's long-awaited Model 2, the cheapest Tesla ever, which is supposed to be Tesla's version of the Volkswagen Golf, the car for the masses, comes to market earlier than expected. Promptly, TSLA shares rose 12%.
Meanwhile, Musk' s intended opponent in a cage fight between what would have been the two palest fighters in the history of martial arts, Meta's Mark Zuckerberg, had one of those moments when your confidence overrules your sanity.
Zuckerberg punished for candor
During Meta's quarterly earnings presentation, Zuckerberg let slip that it will take "a number of years" before investments in AI will translate into profits. Zuckerberg added truthfully that once Meta has found a revenue model, it will be very good at monetizing it.
Only nobody heard it anymore, much like when a party runs out of drinks and snacks, then the sound system breaks down but the host happily suggests that we all hold hands and sing together. Result: a 16% collapse in Meta's share price and a loss of two hundred billion dollars in market cap.
Meta lost as much as forty-five billion dollars since 2020 via its Reality Labs division on investments in smart glasses and not-yet-existing Metaverse business. No shareholder wants Zuckerberg to lose that kind of money on his investments in AI, while meanwhile the good ole' ad business is doing spectacularly well: also because Chinese discounters Temu and Shein advertise for billions via Facebook and Instagram, ad revenue rose 27% to over $35 billion in the first quarter.
Shareholders think about today, investors think about tomorrow
Shareholders would rather grab dividends than invest. Google owner Alphabet became worth two trillion dollars (two thousand billion) this week after it announced it would pay twenty cents per share in dividends and buy back its own shares for seventy billion dollars. This makes Alphabet the fourth most valuable company in the world after Microsoft, Apple and Nvidia.
This ignored the fact that Google's revenue growth, like Microsoft that presented outstanding quarterly numbers, was also driven by substantial growth (thirty percent) in cloud services, in which AI played a major role.
Yet Google, like all other tech companies, should be valued more on long-term vision and making the right choices in the process. Cloud services, with nine billion in revenue, are almost seven times smaller than ad revenue (62 billion), because for too long there was too little focus on cloud services and AI. Since then, Google has been playing catch-up.
Elon Musk is often ridiculed, sometimes rightly so, but anyone who looks a little longer at his activities has to admit that he possesses the rare combination of skills in being able to analyze the market correctly and subsequently position his own companies in them.
It is no coincidence that Musk, despite OpenAI's late start and dominance with ChatGPT and Google's huge competition with Gemini, managed to raise six billion dollars from investors for his AI company xAI. Last weekend that was supposed to be three billion dollars on a valuation of $15 billion, but then potential investors received an email to this effect:
"We all received an email that basically said, ‘It’s now $6B on $18B, and don’t complain because a lot of other people want in."
Now that is an email I would like to send around sometime, only with a happy smile emoticon at the end.
Elon Musk's pitch for xAI boils down to the company's ambition to connect the digital and physical worlds. Musk wants to do this by pulling training data for Grok, xAI's first product, from each of his companies, including X (formerly Twitter), Tesla, SpaceX, his tunneling company Boring Company and Neuralink, which develops computer interfaces that can be implanted in the human brain. It's a worldview that will generate a lot of resistance, but at least it shows long-term vision.
BlackRock and Temasek raise $1.4 billion for climate tech
Countering the world's biggest challenge, climate change, also requires a long-term vision combined with a willingness to invest billions. The world's largest investment firm BlackRock and Singaporean sovereign wealth fund Temasek have therefore raised $1.4 billion to invest in technologies that reduce emissions.
Predictably, the Wall Street Journal, widely read by Republican "ho-ho-not-so-fast-it-was-always-hot" investors, does not write about investments but about "wagers": a term used in a casino when putting your chips on red or black.
Greenhushing as bad as greenwashing
Knowing that the capital market looks with suspicion at the results of risky investments in unproven projects, making more and more companies guilty of greenhushing rather than greenwashing, Decarbonization Partners rushes to say that it invests only in "late-stage, proven decarbonization technologies."
It is unfortunate that investing in startups is avoided because there is much need for capital for start-ups, unproven companies; after all, how else will companies ever get to the stage of having proven themselves? It's a bit like saying as a parent that you love your kids as soon as they can walk well; but how they learn to walk, those kiddies figure that out for themselves.
In total, more than thirty institutional investors from 18 countries have invested in the fund, including pension funds, sovereign wealth funds and family offices, and at $1.4 billion it has raised even four hundred million dollars more than targeted.
Investments have already been made in seven companies developing various innovative decarbonization technologies, including low-carbon hydrogen producer Monolith that I wrote about last week, biotechnology company MycoWorks and electric battery material producer Group14. These are developments that are hopeful.
Carbon credit exchange in ... Saudi Arabia
Other hopeful news that has been snowed under in all the stock market turmoil, a rare word in connection with Saudi Arabia, is that the world's largest oil state will open a carbon credit trading exchange at the end of this year in partnership with market leader Xpansiv, which will provide the infrastructure for the exchange.
The announcement of a carbon credit exchange in this region quickly resembles a chicken breeder announcing he is going vegan, but should be seen as part of Saudi Arabia' s larger plan to move to a sustainable economy. It is looking more and more like it is serious, so it will be fascinating to follow what market share the Saudis can capture in the global carbon credit market, which Morgan Stanley estimates to be $100 billion by 2030.
Finally: I'm in May in the Netherlands and Singapore
In closing, a personal note in the fifty-second edition of this newsletter. Looking back over last year, one notices that I write a lot about market developments and investments, whereas thirty years ago I just started as an entrepreneur in the tech industry, launching the first national wide available internet service provider in the Netherlands.
Because I am no longer running a business, which for me always resulted in running with blinders on toward a dot on the horizon, I have the opportunity to mentor various entrepreneurs and help them invest where possible.
Since I started this newsletter, I have regularly received friendly invitations from readers to catch up on possible joint investing. I plan to do that next month; I'll be in the Netherlands and Singapore in May. If you're interested in hearing more about the projects I support, always focused on sustainability and a large international market, I'd love to hear from you.
Russians hack companies, including Microsoft and Hewlett-Packard. Microsoft shrouds itself in mists about what happened: "The threat actor then used the legacy test OAuth application to grant them the Office 365 Exchange Online full_access_as_app role, which allows access to mailboxes."
That's something like describing the 9/11 WTC attacks as, "some grumpy passengers paid uninvited visits to the cockpits and then rudely parked the planes in a well-known commercial real estate property near a landmark statue."
For what Microsoft admits here, according to experts, is that the hackers had gained the same access as a system administrator and then could do anything they wanted, including reading Microsoft management's email messages. It's embarrassing for Microsoft, which was just so proud to have passed Apple as the world's most valuable company with a stock market value of as much as $3 trillion ($3,000 billion).
Microsoft's hack at this level also shows that companies and organizations should make a special effort to store as little relevant information centrally as possible, because 100% security is a myth.
Boys play shooter games, girls are on social media
Founder of famed startup incubator Y Combinator Paul Graham shared a remarkable message: research shows that boys are becoming more conservative and girls more progressive.
Graham thinks he knows the reason: "This trend has a blandly obvious explanation. Boys and girls used to get along more. The girls made the boys more liberal, and the boys made the girls more conservative. But now the boys are sitting at home playing shooter games, and the girls are sitting at home posting on Instagram.'
To my knowledge I am childless so not an expert, but this sounds like a plausible explanation. Except that young people are mostly on TikTok and those over 25 are on Instagram. Facebook is for grandparents.
Fake nude turns out to be worse than real death
In the United States, alarm bells have been ringing since fake nude photos of celebrities such as Taylor Swift, probably created with AI, flooded social media. Of course, you wouldn't wish anyone to be put through the wringer as vulgar as TayTay, but as a European, it remains miraculous to note that while Americans are taking action against fake nudity, the most gruesome images of child corpses in war zones spread through social media hardly caused a stir.
AI and crypto mining fast-growing energy guzzlers
The growth of the Internet, the AI explosion and the resurgence of crypto and associated mining are causing data center energy consumption to double in the next two years, the International Energy Agency reports in a new report. It is expected that in Ireland, for example, which is eager to reel in large data centers, as much as a third of all energy will be consumed by data centers as early as 2026.
Meta propels NVIDIA stock price upward
Mark Zuckerberg is doing his part to help global warming, he reported on Instagram that his company Meta has purchased as many as 350,000 H100 systems from NVIDIA and has stocked a total of 600,000 H100-like systems.
It will be interesting to see how Meta will link its huge reach with AI to develop new applications. It will also be interesting to see if Zuckerberg uses a make-up artist again in his next video to make him look like the reincarnation of an embalmed Lenin.
OpenAI's ChatGPT is an accelerating snowball: how long before people search ChatGPT first for answers to their questions and for the best deals on products? Image: ChatGPT4
With all the wrangling at OpenAI, you would almost forget, but ChatGPT just celebrated its first birthday this week. Over a hundred million people use an OpenAI service each month, and annualized revenue is over $1.3 billion, a first step toward possible market dominance.
ChatGPT4 nicer than Google
As a subscriber to ChatGPT, these days I ask almost every question first to ChatGPT4, instead of searching on Google. 'The best day to fly between Europe and Asia, what shoe size is Shaquille O'Neal and under what three names was that movie starring Tom Cruise and Emily Blunt released?' Just three questions I asked ChatGPT today. But also, 'tell me about investors Vinod Khosla and Reid Hoffman,' but more about them in a moment.
Compared to Google, ChatGPT's answers seem better and I like that I don't have to click through to other websites. No doubt Google has tracked the change in search behavior through Google Chrome and the other gimmicks Google uses to capture people's behavior. This makes it all the more painful that Google, according to The Information, decided this weekend to delay the launch of OpenAI competitor Gemini until early next year.
Search and buy through ChatGPT?
One company that is also seriously threatened by OpenAI is Amazon, and it is rarely noticed. Especially in the US, Amazon has become "the Google of buying": as soon as Americans think about buying something, they search directly on Amazon. Other websites no longer play a role here.
It looks like it will be months rather than years before ChatGPT is fed sales information from the world's largest online stores. All parties that now sell through Amazon Marketplace can then directly serve their customers outside of Amazon. Of course, fulfillment then remains an issue, and in that Amazon is almost unbeatable, but the company is not worth $1.5 trillion because it is so good at shipping packages efficiently.
Amazon is so valuable because it is where buyers find their products and where transactions take place. OpenAI has a great tool with ChatGPT to take over that function, because with its Plus subscribers it already has a payment relationship that can be easily expanded. Amazon is no doubt already formulating a response to this threat.
iPhone users switch from Siri
Apple is surely following with suspicion how many people program the new "action" button on the iPhone 15 with ChatGPT. The idea was that it would allow people to launch their email or camera app faster but article after article appears urging people to get rid of Siri as if from herpes after a ski weekend with a frat house.
A headline like "Throw Siri off your phone and use ChatGPT for help" must hurt intensely at Apple. Siri never became what Apple had hoped it would, and if many people use ChatGPT as the first search function on the iPhone, heads will roll at Apple. The question has long since ceased to be whether ChatGPT has this potential, but whether the OpenAI board will become stable enough quickly to successfully introduce this kind of product.
Hoffman and Khosla, billionaires with an opinion
Viewed in this light, it was nice to see an excellent podcast on Thursday featuring legendary entrepreneurs and investors Reid Hoffman (PayPal, LinkedIn, Greylock) and Vinod Khosla (Sun Microsystems, Khosla Ventures), both investors in OpenAI.
By the way, note the almost mocking title with which Khosla describes himself on LinkedIn: "venture assistant. That's like Lionel Messi creating a LinkedIn profile with the feature "ball boy.
Hoffman was the first contributor to OpenAI from one of his private foundations, when it was still just a benevolent club of academics. After all, you don't do well as a billionaire until you have at least one foundation named after yourself, although I found this one-page website for Hoffman's other foundation, the Aphorism Foundation, amusing.
Khosla put into OpenAI double what he had previously invested in a startup: $50 million. In short, Messrs. Hoffman and Khosla are not entirely neutral (cough).
No restriction of competition, China a risk
Hoffman focused on market forces in the conversation. " Startups are not hindered right now," he explained, despite the apparent dominance of OpenAI and mega-cap tech companies such as Microsoft. Hoffman has been on Microsoft's board since he sold LinkedIn to Microsoft and doesn't think his "own companies" have too much power. "I don't think it limits competition on any level," he said, to nobody's surprise.
Khosla called the focus on existential risks of AI "nonsensical talk from academics who have nothing better to do". But he sees China as a major risk and thinks the U.S. is "in a techno-economic" war with China and should take a tougher stance. " I would ban TikTok in a nanosecond," said Khosla, in contrast to Hoffman, who had spoken with President Biden just before recording the podcast. After all, if anyone knows the value of a good network, it is LinkedIn's founder.
Khosla is firmly against open-source AI models as well due to the China risk. Bio-risk and cyber risk are real concerns too, he noted. But if China or rogue viruses don’t kill us, Khosla thinks the near-future is very bright: “I do think in 10 years we’ll have free doctors, free tutors, free lawyers” all powered by AI.
Elon Musk had a tough month
At the last minute, Tesla published this amusing video in which the new Tesla Cybertruck makes mincemeat of a Porsche 911 in a sprint. Pay special attention to the bouncer, because the Cybertruck has something hanging from the tow hook and it's not a caravan. Marques Brownlee made a whopping 40-minute review video.
Tesla Cybertruck towing a Porsche 911 is faster than ... a Porsche 911.
Not everyone is a fan of the Cybertruck, for example, Engadget writes: "Teslaa's Cybertruck is a dystopian, masturbatory fantasy. In Elon's future, the rich should be allowed to dominate (and probably run over) the poor with impunity."
Cute that a Cybertruck gets to 60 miles an hour (100 km/h) in 2.6 seconds, but I am particularly curious to see how this paintless, silver doghouse weighing over three thousand kilos (over 6,000 lbs) behaves on a mountain pass full of hairpins. Or how you park it in reverse in the parking lot of your local supermarket.
Musk chases advertisers off
Reuters puts it beautifully, "Elon Musk is keen to achieve what no business leader has done before, from mass-producing electric cars to developing reusable space rockets. Now he is blazing another trail most chief executives have avoided: the profane insult.." Not only that: gross insult to customers.
Musk said it twice to advertisers who left his social media platform X for complimenting a text with anti-Semitic content: "go fuck yourself.
Musk felt it necessary to name one such departing advertiser, Disney CEO Bob Iger, unprovoked. Consider the weeks Musk has had behind him: on November 18, SpaceX sent the Starship into space, where it blew up, intentional or not.
The same weekend saw the leadership fiasco at OpenAI, with the fired Sam Altman and the other key players communicating with the outside world almost exclusively through Musk's platform X. That was vindication for Musk, who earlier this year saw Mark Zuckerberg's Threads becoming the fastest-growing social media platform - dying out as quickly as it emerged, but that's for another time.
Watch the whole item at Fox. Musk looks like captain Jack Sparrow after a rough night. He, probably just back from Israel and suffering from jet lag, looks even whiter than the average Fox viewer, and despite trying to appear masculine in his leather jacket with smutty teddy collar over a too-hot-washed t-shirt, he makes a vulnerable and frustrated impression. Here sits someone trying very hard to look like someone who is not trying very hard.
The whole segment at Fox is an adulation of Musk as a defender of freedom of speech, which was supposedly sorely missed when X was just called Twitter. I think the nice thing is that all five panelists, with that ball room dancing teacher in the middle surrounded by four born again nymphs, don't realize that it's hilarious that they spend minutes talking about freedom of speech, but the term "fuck" used by Musk is bleeped out twice by Fox.
So no viewer knows what Musk actually said. You can guess, but you don't know, because you can't hear it. No one repeats it or comes back to it. I love that discomfort. It's a moment like when a notorious meat eater finds out that the barbecue he's generously serving for his second plate is made of vegan meat.
Musk, willingly or unwillingly, with all his absurd attempts to regulate X on the one hand and then open it up on the other, demonstrates the total insanity of American morality that he himself struggles with as a South African. Anti-Semitism? Bad for business. Saying fuck on TV? Not allowed, but you can then worship him as a champion of Fox's supposedly so desired freedom of speech.
Breakfast TV (h)honest
It reminded me of the time I gave an interview about virtual reality during Web Forum in Dublin for a BBC breakfast program. I made the unforgivable mistake of saying that in the future VR would have all sorts of wonderful applications, from news to film, music and sex. Hey ho ho no jeez Louise, stop, panicked the BBC crew: I had said sex.
That wasn't allowed in a breakfast program. Because it's early in the day, blushing kids just eating their oatmeal, well surely I understood. "Am I allowed to say machine gun or weapon of mass destruction?" I asked. It certainly was allowed. 'Bloody mass murder?' No problem at all. ' How graphically may I describe the Catholic Church's misconduct with young boys?' Um, there were no specific rules for that, so in the end I had a great morning. That the item ever aired shows the editing skill of BBC editors.
Techbros need help
Musk is not the only tech CEO struggling with freedom of speech and regulation of his social media network. I recently wrote about my own struggle with freedom of speech when subscribers to my first company Planet Internet were found to be distributing child pornography. Deciding not to distribute certain messages was easy, but determining where that boundary lay was difficult, not to mention technically complex.
Mark Zuckerberg is in deep trouble now that the Meta platforms (Facebook and Instagram in particular) seem to have become popular platforms among pedophiles. According to the Wall Street Journal, Meta has spent months trying to fix child safety issues on Instagram and Facebook, but is struggling to prevent its own systems from enabling and even promoting a vast network of pedophile accounts.
The Meta algorithms unrestrainedly promote the content the user clicks on, with dire consequences. The U.S. Congress is becoming more alert, and the European Union is also now rightly targeting Meta.
I firmly believe that the limited social gifts of people like Musk and Zuckerberg have led them to think differently, more autonomously, than us simple souls and are therefore capable of achieving more; at the same time, they have limited empathy and genuinely don't understand why the world has trouble with their policies. What makes them great as entrepreneurs keeps them small as human beings.
Special links
What did an iPhone do to the arms of this distraught bride?
Bride-to-be stands in front of the mirror, takes a picture and suddenly she looks bewitched. Pay close attention to her arms.
The UN climate conference COP28 has begun in Dubai, led by Abu Dhabi's oil boss. Before we get cynical, here is the good news that hard work is being done on sustainable aviation. Applause for Virgin Atlantic.
Spotlight 9: crypto week!
Bitcoin toward $40,000 and Ethereum over $2,000, party time in the crypto world.
It was a dull week for investors, unless you dare to get into cryptos because Bitcoin and Ethereum seem to be definitely back!
What a week in tech: Mark Zuckerberg talked with Lex Fridman in 3D, U2 was incredible in the Sphere in Las Vegas, Sam Altman and Jony Ive could be working on an "iPhone for AI," Amazon is putting billions into AI, Spotify is translating podcasts into all kinds of languages and Taylor Swift was in a football stadium. And oh, I almost forgot: French authorities raided an Nvidia office.
The Sphere: Find U2 in this concert venue that feels like you're inside a giant virtual reality headset. Source: The Sphere on Instagram.
U2 opened the Sphere - and how!
First, the most striking images from last week. U2 on Friday opened the Sphere in Las Vegas, the spectacular event space that cost a whopping $2.3 billion. With a height of 112 meters and a maximum width of 157 meters, the Sphere has a total area of 81,300 square meters, making it the largest spherical building in the world.
Visitors to U2's opening concert seem unanimously enthusiastic about the Sphere on social media. Obviously, a cell phone does not offer a good impression of the experience of seeing thousands of square feet of screen around the band in 16K resolution , but even so, the images of Where The Streets Have No Name and With Or Without You were impressive. The sound also seemed to be outstanding, quite useful at a concert and yet often overlooked. My brother was there and is so excited that he immediately bought tickets for the final concert of U2's twenty-five-concert residency at the Sphere.
Three versions of Mark Zuckerberg and all three are emotionless. Eerily realistic. Source: Lex Fridman podcast.
Zuckerberg and Fridman were not exactly winning souls for the Metaverse
Lex Fridman once again had Meta chief Mark Zuckerberg as a guest on his podcast, and this time the conversation took place in an unusual way. Both wore the Quest Pro VR headset and were not in the same room, but hundreds of miles apart. Yet the conversation looked and felt lifelike. The picture quality exceeded my expectations.
At the same time, the gentlemen's podcast painfully exposed the Achilles' heel of this technology. Spending so much effort, time and money to create a realistic avatar of someone's face and then spend an hour schmoozing with each other is the digital version of shooting a mosquito with an F-35 or putting on a princess dress to drop your kid off at kindergarten: it can be done, but it's a tad over the top.
I do not get the impression that people are so eager for higher image quality from their video calls that they are willing to put on VR glasses. Meta's technology looks like a technology in search of an application. If Steven Schnaars wrote his phenomenal book "Megamistakes: Forecasting and the Myth of Rapid Technological Change" now rather than in 1987, he would certainly devote a chapter to the Metaverse aspirations of Zuckerberg, who keeps trying to make VR a common conversational experience, rather than being happy that it already provides a brilliant experience in online games, a billion-dollar industry.
The French invasion
There were so many developments in the AI field this week that they seemed hard to pinpoint, until it was announced that French authorities on Tuesday had raided "a maker of graphics cards." And by that they did not mean those parchment scrolls that Napoleon marched toward Moscow with, but Nvidia's highly sought-after chipsets needed for the current generation of AI applications.
The official position is that European governments are trying to control the actions of Big Tech companies in thwarting competition. And let those Big Tech companies just happen to all be American; they are Apple, Meta, Google, Amazon and Microsoft, and as of this week, Nvidia may also count itself among this list of companies suspected by Europe.
It appears the French authorities may be looking for mischief in all the wrong places. In fact, the whole AI playfield has become much more complex than it seems, with all the players smilingly shaking hands and tripping each other up at the same time.
In AI you compete your customer and supplier to death
Seen from the "bottom up," AI is a whole separate industry. Nvidia is the undisputed king of shovels and pickaxes: Microsoft, Google and Amazon all buy billions worth of Nvidia chips for their cloud services.
But since those companies announced they wanted to reduce their dependence on Nvidia and are developing their own AI chips, Nvidia has begun investing in AI startups that compete directly with Microsoft, Google and Amazon. Nvidia is doing so partly with money and partly by putting these startups at the top of the customer list for its sought-after and scarce AI chips.
Nvidia's hope is that these startups, such as Coreweave and Lambda Lambs, take market share away from the big three so that Nvidia can continue to supply as many chips to this sector as possible.
Those who now think that Nvidia and, say, Google can drink each other's blood will have watched with raised eyebrows as Nvidia and Google recently jubilantly announced a new collaboration to improve Google Cloud.
Alphabet CEO Sundar Pichai even said less than three weeks ago that Google and Nvidia will still be working together a decade from now. Partnerships in AI are sort of like open marriages where you express that you love each other immensely, but leave your profile open on Tinder, always ready for the swipe.
The key question before European authorities is whether it is illegal for Nvidia to try to make their current customers' competitors more powerful. Expensively paid anti-trust lawyers are rubbing their manicured hands with delight.
It continues to rain AI billions
Amazon announced that it is investing as much as $4 billion in Anthropic for a minority stake, with the intention that Anthropic will use the cloud services of Amazon's AWS, the world's largest cloud provider. It's buying market share in a disguised way, but in a potentially smart way, because it's not out of the question that Amazon is going to make hefty profits on the shares in Anthropic.
Character.AI, a startup that offers chatbots that can mimic virtually anyone (one popular bot is Super Mario, including a very sad version of an Italian dialect), is in the process of raising hundreds of millions of dollars in new funding round that could value the company at more than $5 billion, according to insiders. Usually, those anonymous sources are the founders themselves, who thus put pressure on investors and semi-openly shop the deal around.
That $4 billion in Anthropic and $5 billion valuation of Character.ai are small beer for market leader OpenAI, which is seeking a $90 billion valuation in a deal in which executives sell some of their shares. This valuation is as much as three times higher than ... six months ago, when OpenAI raised $300 million on a valuation of $29 billion.
Entirely coincidentally, Mistral is launching its first model
I find it a bit suspicious that the raid by French authorities on Nvidia occurs the week that the French pride in AI, Mistral, presented its first model claiming that it outperformed one of Meta's smaller models, the Llama 2 13B. (By the way, can't anyone at Meta come up with better names than Llama 2 13B? Maybe Zuckerberg can ask someone on Fiverr for help.)
Naturally, Meta could not just let that happen and spread the word that Llama 2 Long AI (another delicious name) outperformed OpenAI's GPT 3.5 Turbo and Claude 2, Anthropic's product that just raised that $4 billion from Amazon.
'The AI race is weird'
The Information rightly concluded; "It makes me wonder what race all these companies think they are running. So far, it seems to be mostly about money and distribution. Technology seems to be coming together more and more, meaning that the winners are not necessarily those with the best technology, but those who figure out how to get the most money out of it.
And that race will certainly favor incumbents such as Google, Microsoft, Amazon and Meta, whose existing products already make billions. No wonder OpenAI is seriously considering building a device. If it continues like this, it will take a new wedge to really open the battle."
The "iPhone for AI"?
Indeed, the Financial Times reported Thursday that ChatGPT maker OpenAI is in advanced talks with legendary former Apple designer Jony Ive and SoftBank's Masayoshi Son to build the "iPhone of artificial intelligence," backed by more than $1 billion in funding from the Japanese conglomerate.
Jony Ive was Steve Jobs' favorite designer, spent more than two decades at Apple and led the design of the brightly colored iMacs that helped Apple rise from a near-death experience in the 1990s, as well as the design of the iPhone.
The news of the possible collaboration between Ive and Altman, funded by Son, was widely reported worldwide, but I missed reflections on what kind of device an "AI hardware device" should be. I can't imagine it, because smartphones have already become so powerful and have an installed base of billions.
ChatGPT more current and learning to see, listen and speak
In all the financial news, you would almost forget that major improvements to products are being introduced at lightning speed.
ChatGPT reported last week, "Voice and image give you more ways to use ChatGPT in your life. Snap a picture of a landmark while traveling and have a live conversation about what’s interesting about it. When you’re home, snap pictures of your fridge and pantry to figure out what’s for dinner (and ask follow up questions for a step by step recipe). After dinner, help your child with a math problem by taking a photo, circling the problem set, and having it share hints with both of you."
(I conclude from this that ChatGPT is not yet trained in the life of a childless man living in Singapore and Bali, where hawker centers, warungs and food delivery services dominate daily life.)
A major objection to ChatGPT was the lack of current data, as the model had previously only been trained with data through September 2021. It was announced this week that ChatGPT will become topical, meaning that some premium users will be able to ask the chatbot questions about current affairs and access news. OpenAI said the feature would soon be available to all users.
At the time of writing, Oct. 1, none of the listed features are available to me and ChatGPT's training data ends in January 2022. Hopefully this will change soon.
Spotlight 9: Ethereum wins again and is Microsoft underrated?
A volatile picture this week: Amazon, Apple and the S&P 500 fell, while Nvidia and Ethereum rose sharply.
It is downright striking how little serious coverage is given to the important blockchain development platform Ethereum, especially compared to the panting coverage of AI companies.
With all the hubbub surrounding AI, it does make sense that Wall Street is finally starting to see that Microsoft's stake in OpenAI could affect Microsoft stock.
For two reasons: first, purely financial, because if Microsoft actually owns 49% of OpenAI's shares, that stake currently represents a value of $44 billion. Out of Microsoft's $2.35 trillion ($2,350 billion) market value, that's less than 2%, but there are days when yours truly doesn't have it lying around.
In addition, OpenAI uses Microsoft's Azure platform so that, with OpenAI's billion-dollar spending on these cloud services, Microsoft is also earning heavily from OpenAI again.
Fortune reported in January that in exchange for the $10 billion investment in OpenAI, Microsoft also obtained the right to 75% of OpenAI's profits until it recouped those $10 billion; plus an additional $3 billion it had already invested in the company in previous years. Don't let the French authorities hear it or they'll be invading Microsoft's office for a morning coffee too - with croissant.
The results are surprisingly good. For example, this is Lex Fridman in Spanish talking to Yuval Noah Harari, who suddenly sounds more like a Spanish flamenco dancer rather than an Israeli historian.
Renowned investment fund Andreessen Horowitz is opening the Crypto Startup School (CSS), a 12-week acceleration program in London for startups that offers expert guidance, capital and resources tailored to crypto founders.
Linda Yaccarino seemed frustrated and upset during an interview that was at times strange, uncertain and confrontational. Someday I'll get used to the fact that Twitter is now called X, but not yet.
With a gold medal in Street Fighter or FIFA, South Korean men have a chance to be exempted from military service. I searched to see if exemption was also given to winners of Grand Theft Auto, but alas. It would be a bit absurd if you could avoid military service by committing high-speed casualties in a mall in GTA.
Scientists are learning more about "sesquiterpenes," vapors from trees that could make clouds, cooling the earth. "It's a feedback loop, the climate affects cloud formation, and the clouds affect the climate."
If social media is to be believed, football player Travis Kelce is said to be reaping huge rewards from his liaison with La TayTay; Taylor Swift. I looked on his Instagram and Tiktok and saw an increase from less than half a million followers to 3.6 million, so it's not too wild. By comparison, Swift has 273 million followers. Funny, though: the meme where wives filmed their husbands telling hubby with a serious face that it was so sweet of Swift that she had put Superbowl winner "Kelce on the map". This man's dismay, combined with his self-control, is commendable.
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?
