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 market capitalization 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.
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.
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.
"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 organize the world's information and make it universally 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 could then quickly drop from being 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 eyes simple, tacky 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.
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.
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.
Sam Altman is back at OpenAI and more powerful than before, but is that a good thing?
A few days after the kings drama at OpenAI, let's try to look over the ruins at this company whose mastermind, Chief Scientist Ilya Sutskever, has said that AI could herald the downfall of the world. Far too often it is forgotten that Sutskever and his colleague Jan Leike, also no slouch, published this text on OpenAI's official blog in July:
"Superintelligence will be the most impactful technology humanity has ever invented, and could help us solve many of the world’s most important problems. But the vast power of superintelligence could also be very dangerous, and could lead to the disempowerment of humanity or even human extinction."
Ilya Sutskever and Jan Leike, OpenAI
And oh yes, they have over $10 billion in the bank to figure out if they are going to save the world, or end it. Yet there are few serious attempts to seriously monitor, let alone regulate, OpenAI and its competitors.
Imagine Boeing developing a new plane with a similar PR text: 'this super-fast plane will fly on spot-cheap organic pea soup and could help humanity make aviation accessible to all, but it could also backfire and crash and blow up the earth.' The chances of getting a license wouldn't be very good. With AI, things are different; the tech bros just put the website live and see how it goes.
Move along, the turkey was great
What is the media reporting on now at OpenAI? About the Thanksgiving dinner where reinstated CEO Sam Altman sat down with Adam D'Angelo, one of the board members who had fired him just six days earlier. Both tweeted afterwards that they had a great time together. They are so cute.
Despite the media's tendency to quickly lapse into picking a hero and a villain when conflicts arise, the much-lauded Sam Altman is increasingly being viewed as demonstrating some odd behavior from time to time. According to the Washington Post, Altman's dismissal had little to do with a disagreement over the safety of AI, as first reported, but mostly with his tendency to tell only part of the truth while trying to line his pockets left and right.
Even if they would be Granny Smith green
Meanwhile, then, Altman is back with a new board about which there are many doubts. Christopher Manning, the director of Stanford's AI Lab, noted that none of the board members have knowledge of AI: "The newly formed OpenAI board is presumably still incomplete,” he told TechCrunch. “Nevertheless, the current board membership, lacking anyone with deep knowledge about responsible use of AI in human society and comprising only white males, is not a promising start for such an important and influential AI company."
I don't care what color and what gender they are, even if they are Granny Smith green with three types of reproductive organs, but I do prefer when they have an understanding of the matter that their own experts say has the potential to put humanity over the cliff.
Five conclusions after the chaos
1. The AI war has been won by America.
Look after a week of craziness and fuss at OpenAI and we see that Microsoft, the old board and the new board are all Americans. The competitors? Amazon, Google, Meta, Anthropic, you name them: Americans. The rest of the world watches and holds meetings and speeches, but it's a done deal.
2. Good governance is nice, but bad governance is disastrous.
By this I do not mean that the people who fired Altman were right or wrong, because no one still knows that; the crux of their argument was that Altman had not given full disclosure, and if that is true, that remains a mortal sin.
But the root of the problem was deeper. The OpenAI board had been appointed to safeguard the mission of the OpenAI Foundation, which, in a nutshell, was to develop AI to create a better world. Not to create maximum shareholder value, as has now become the goal. The problem arose because of those conflicting goals.
3. Twitter, or X as it is now called, remains the only relevant social network in a crisis.
Elon Musk went on a rampage again last week and that seems to cost him $75 million in revenue, but Altman and everyone else involved still chose X as a platform to tell their story. Not Threads or TikTok – although I would have liked to have seen this mud fight for power portrayed in dance.
4. Microsoft wins.
Under Bill Gates, I already thought Microsoft was a funny name, because the company was neither micro nor soft then either, but in the nearly 10 years under CEO Satya Nadella, Microsoft has become a dominant force in all kinds of markets.
While Amazon, Google, Meta and also Apple are struggling to develop a coherent AI strategy, Microsoft seems to have found a winning formula: it is investing heavily in OpenAI, which uses the Microsoft Azure cloud, returning much of the investment back to Microsoft. Meanwhile, Microsoft does enjoy the capital appreciation via its 49% stake in OpenAI.
5. AI should be tested and probably regulated
Precisely because companies like Microsoft, Google, Meta and Amazon also dominate in the field of AI, the development of AI must be carefully monitored by governments. The years of privacy violations, disinformation and abuse of power taking place through social media, for example, show that these companies cannot regulate themselves.
The tech bro's motto remains unchanged: move fast & break things. But let them do that nicely with their own planet, not the current one. The potential impact of AI on the world is simply too great to let the mostly socially limited minds running tech companies make the choices for society.
An initiative like the AI-Verify Foundation can be a vehicle to achieve responsible adoption of AI applications. I close with the same quote as last week from OpenAI's Chief Scientist, Ilya Sutskever, which shows the world's AI leaders almost hope that future AI systems will have compassion for humanity:
"The upshot is, eventually, AI systems will become very, very, very capable and powerful. We will not be able to understand them. They’ll be much smarter than us. By that time, it is absolutely critical that the imprinting is very strong, so they feel toward us the way we feel toward our babies."
Casual Friday at OpenAI. Image created with Midjourney.
Play it again, Sam?
That went quickly. The Verge just reported, "The OpenAI board is in discussions with Sam Altman to return to the company as its CEO, according to multiple people familiar with the matter. One of them said Altman, who was suddenly fired by the board on Friday with no notice, is “ambivalent” about coming back and would want significant governance changes."
Update: "According to The Verge, a source close to Altman indicated that the board had agreed in principle to resign to allow Altman and Brockman to return, but later wavered and missed an important deadline of 5 p.m. California time. This was a turning point for many OpenAI employees who were considering resigning. If Altman decides to leave and start a new company, these employees will almost certainly follow him."
I suspect Altman will wait a while longer until the board is salted away, because he really has no desire to start all over again and give up the lead OpenAI currently has. Especially since there are billions in cash and no investor control. Meanwhile, Mira Murati is already posting hearts under the tweets of the man she followed up on Friday.
Look how sweet.
Panic among the remaining board members
Panic among the remaining board members is evident after president Greg Brockman resigned on Friday over Altman's resignation, followed yesterday by the departure of three reputable OpenAI researchers and renowned investors in the company such as Ron Conway and ex-Google CEO Eric Schmidt voicing their support for Altman.
Brockman's tweet, which he had obviously drafted with Altman because in it he speaks about both Altman and himself in the third person, must have been especially painful for all of OpenAI's employees, investors and directors. This puts the expected funding round in jeopardy, and with no new money and departing staff, there would be little left of a technology company to build, even for OpenAI. The request for Altman to return, within 48 hours of his ousting, must be seen in this perspective.
Brief match report from OpenAI against Sam Altman
An almost inexhaustible stream of reports, theories and especially rumors has been unleashed since Friday about the resignation of Sam Altman as CEO of OpenAI, known as the creator of ChatGPT, the stunning service that introduced AI to a global audience. I will try to summarize events as briefly as possible and then share my initial thoughts.
Last week, ChatGPT had another top week. The DevDay for developers with the new 'Do It Yourself ChatGPT' product turned out to be a huge success worldwide. The story is that the new round of funding will take place at a valuation of around $90 billion; triple that of earlier this year, when Microsoft invested a quick $10 billion and, after an earlier 2019 investment of a billion, purchased a 49% stake in OpenAI at a valuation of $30 billion.
And then suddenly, on Friday afternoon California time, this message appeared on OpenAI's site, announcing Sam Altman's immediate dismissal without any pleasantries. It was soon leaked that Microsoft knew nothing about it and had been notified only minutes before the news of his ungraceful exit was announced.
Microsoft CEO furious
Microsoft quickly came out with a bizarre statement of a few curt sentences expressing support for OpenAI; it could do nothing else after already investing a total of over $11 billion in the company whose applications also run entirely in Microsoft's cloud environment. The absurdity was that Microsoft did not mention Altman's name a single time; it's like writing an article about a family event that takes place in late December when children receive presents from an old man with a bunch of reindeer, but avoiding the name Santa Claus.
New interim CEO Mira Murati was quoted by Microsoft only as "Mira". Because oh well, the founder and CEO was fired and then we don't even mention his name anymore, but while you're here we are so West Coast cool that we only do first names, you know because that's how we roll, bro. This Mira did do something strange herself: she deleted her LinkedIn profile, to which I had linked back in July when I first wrote about her.
Before I lapse into a chronological summary of this absurd Friday as if it were a Tour de France stage, I refer fans of this power struggle to two excellent articles:
first of all, there is this piece from Ars Technica, which is convinced that there is an almost religious battle going on within OpenAI between, in one corner, the fundamentalists, led by Chief Scientist Ilya Sutskever, who advocate a carefully developed form of AGI (Artificial Generative Intelligence, "human-like" intelligence); and, in the other corner, the commercial rascals, led by Sam Altman, who want to dethrone Google with continuously updating versions of ChatGPT, following to the time-honored techbro principle of "move fast and break things'.
Organization structure of OpenAI absolutely unworkable
As far as I am concerned, the key question is not whether Altman is coming back or who is right in the religious struggle within OpenAI, because the reporting still relies too much on rumors. The question that must be asked is: How can a company apparently worth toward $100 billion and developing such a fundamentally important product for our society, worldwide, operate so ridiculously amateuristic? The answer lies in its organizational structure.
OpenAI has an unusual structure in which its commercial arm is owned and operated by a nonprofit charitable organization. Until Friday, that nonprofit was controlled by a board of directors that included CEO Sam Altman, President Greg Brockman, Chief Scientist Ilya Sutskever and three others who are not OpenAI employees: Adam D'Angelo, the CEO of Quora; Tasha McCauley, an adjunct senior management scientist at RAND Corporation; and Helen Toner, director of strategy and basic research grants at Georgetown's Center for Security and Emerging Technology. Currently, only Sutskever, D'Angelo, McCauley and Toner remain.
Three well-intentioned outsiders, along with a remaining staff member, control the company in which Microsoft has invested over $11 billion for 49% of the shares - without having any say. Source: website OpenAI.
Like CEO Altman and president Brockman, Sutskever, D'Angelo, McCauley and Toner own no shares in OpenAI. Investors find that unpleasant, because it means they almost always earn less at OpenAI than at any other job where they do get shares which makes the team members vulnerable to good offers elsewhere. But those investors, including such absolute legends as Vinod Khosla (Sun Microsystems, Juniper), Reid Hoffman (founder LinkedIn) and Eric Schmidt (ex-CEO Google), have as much to say at OpenAI as Santa Claus' reindeer.
No doubt they only agreed to this lack of control because OpenAI was so clearly winning the battle in the AI market that they were willing to accept this deal.
In, out, what will it be for Altman?
Et tu, Ilya?
A complicating factor is the American form of governance with a Board of Directors that consists of a combination of executives who work full time at the company, and a number of external directors.
So at OpenAI on Friday morning there were six Directors, three from OpenAI and three externally, and since Altman was fired without Brockman's knowledge, it was immediately clear that Chief Scientist Ilya Sutskever had either abstained, as cowardly countries tend to do in the United Nations, or had voted along for the resignation of his own colleague and CEO Sam Altman. It's going to be a fun moment if and when Altman returns and they run into each other at the coffee machine. But who is Ilya Sutskever, anyway?
Ilya Sutskever apparently believes baby blue makes his eyes come out better. Image: LinkedIn.
Ilya Sutskever is an AI fundamentalist and that's a good thing
The name Ilya Sutskever and his background (Russian-Israeli-Canadian) suggest a double life as a villain in an old James Bond movie including a creepy cat on his lap. I love his old school personal homepage. I don't know him personally, but what I read from and about Sutskever is many times more interesting than anything I've heard coming out of Sam Altman's mouth so far. For example, read this excellent recent piece by Nirit Weiss-Blatt, who spoke with Sutskever at an event this summer. A few quotes:
When asked about specific professions – book writers/ doctors/ judges/ developers/ therapists – and whether they are extinct in one year, five years, a decade, or never, Ilya Sutskever answered (after the developers’ example):
“It will take, I think, quite some time for this job to really, like, disappear. But the other thing to note is that as the AI progresses, each one of these jobs will change. They'll be changing those jobs until the day will come when, indeed, they will all disappear. My guess would be that for jobs like this to actually vanish, to be fully automated, I think it's all going to be roughly at the same time technologically. And yeah, like, think about how monumental that is in terms of impact. Dramatic."
Weiss-Blatt concluded:
'He freaked the hell out of people there. He freaked the hell out of people there. And we’re talking about AI professionals who work in the biggest AI labs in the Bay area. They were leaving the room, saying, “Holy shit.” The snapshots above cannot capture the lengthy discussion. The point is that Ilya Sutskever took what you see in the media, the “AGI utopia vs. potential apocalypse” ideology, to the next level. It was traumatizing.
This idea of AI as causing a total economic apocalypse, with the disappearance of all jobs that are based on information analysis and decision-making, is in itself not new and more often proclaimed by science fiction writers, techno utopians and people holding a can of beer in the morning at the park.
Only Ilya Sutskever is not a crackpot, alcoholic or villain from a James Bond movie; he is the Chief Scientist of OpenAI. And you don't get that job through a phone call from your dad to a friend. After his time at the University of Toronto and work at Google, he started at OpenAI back in 2016, and in everything, Sutskever seems thoughtful and responsible. Call him the anti-Zuckerberg.
The world has no use for a trillion-dollar OpenAI
Despite all possible efforts to limit OpenAI's profits and the resulting warped organizational structure, I do believe in the mission Sutskever sees for OpenAI. More than in the muddled vision of lobbyist Altman, who travels the world meeting politicians and then talks about accountability and regulation, but in actual fact does everything he can to dethrone Google.
But how will this benefit the world? What do we gain from yet another American company with enormous power and influence over the way we deal with knowledge, information and communication and which may eventually take over our jobs? Have we learned nothing from Facebook and Cambridge Analytica?
AI must love people like we love babies
According to Sutskever, AI must learn to love people. In AI, the process by which AI systems are taught things is called "imprinting," specifically the phase in which the system must learn to recognize and conform to certain values, goals or behaviors.
AI systems such as ChatGPT, according to Sutskever, must learn to behave in ways that are beneficial or non-harmful to humans, even as the system becomes more intelligent and autonomous. It is a strategy proposed to mitigate risks associated with advanced AI by establishing a positive, protective relationship with humans from the start.
Sutskever: "The bottom line is that eventually AI systems will become very, very, very capable and powerful. We will not be able to understand them. They will be much smarter than we are. By that time, it is absolutely critical that the imprinting be very strong, so that they feel toward us as we feel toward our babies."
Keep that in mind when Sutskever is portrayed in the media as the evil genius who secretly worked that lovable treasure Sam Altman out of their company.
And now it's time for the Formula One race in Las Vegas. An absurdist spectacle in the desert, with $15,0000 tickets to the Paddock Club described in a way no AI system could have dreamed up: "Come and enjoy a recovery brunch, with aerial champagne pours and silent meditation." My favorite Formula One analyst is a manicured Englishman who puts too much sugar in his tea before recording his videos. See you next week!
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.
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."
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!
Nvidia dominated the news in the technology world last week in a way reminiscent of Netscape's 1995 IPO. That legendary IPO heralded the start of the Internet era, just as the launch of the iPhone in 2007 marked the breakthrough of the smartphone. Similarly, we will one day look back on Nvidia's stunning Q2 results, which launched the world into the AI era. This was the big bang of artificial intelligence.
Compared to last year's second quarter, revenue doubled from $6.7 billion to $13.5 billion, while profits rose 843% (no typo), from $656 million to nearly $6.2 billion. The outlook for next year is even brighter. What lies behind these stunning numbers and why does the "shovel and pickaxe maker" Nvidia earn more than the digital gold diggers, the AI application makers?
He was the founder in 1993 and is still the CEO in 2023: Jensen Huang of Nvidia. Image created with Midjourney.
"A new computing era has begun. Companies worldwide are moving from general-purpose to accelerated computing and generative AI."
Jensen Huang, CEO Nvidia
"A new computing era has begun. Worldwide, companies are moving from general-purpose to accelerated computing and generative AI," said Jensen Huang, founder and CEO of NVIDIA in releasing his figures. Usually CEOs believe too much in themselves and the creation of their own success, but Huang is absolutely right.
That's why in this week's newsletter I don't pay attention to other newsworthy events, such as the announcement of chipmaker Arm's IPO that may be a precursor to a definitive revival in the technology sector after a year of mass layoffs, but try to make sense of Nvidia's development in the suddenly rapidly changing technology world.
Ghost valley
"Everyone seemed pretty gloomy, looking at each other and wondering why nothing exciting seemed to be happening in the Valley anymore." It could be a quote from sentiment in the technology sector before OpenAI launched Chat GPT late last year, but it is a quote from Netscape founder Marc Andreessen about the atmosphere he encountered when he moved to Silicon Valley in 1994.
The personal computer had broken through worldwide in the 1980s, Microsoft dominated that market in software, and there were a few big players in the traditional world of mainframe computers and networking. But nobody's heart was beating faster from companies like HP, Novell or my favorite company name, Digital. (What an inspiring brainstorming session it must have been where they came up with that name).
The success of the free Netscape browser and subsequent IPO completely changed that sentiment. Suddenly, large companies were developing applications for the Internet and Internet startups were getting serious funding - eBay was founded less than a month after the Netscape IPO, Amazon went public two years later, and that was less than a year before Google launched, to name a few examples.
Nvidia's recent success seems to echo the Netscape IPO. At Nvidia, the sales and profits led to investor enthusiasm, but at Netscape in 1995, jubilation arose around the share price. That is a major difference... The expected introductory price was $14 but demand was so high that a last-minute decision was made to double the introductory price to $28, something that rarely, if ever, happens because the introductory price is determined after months of talks with investors worldwide.
Netscape closed the first day of trading at a price of $75, which meant that the company had left billions on the table with its still too-low introductory price and the first buyers were able to book record profits on the very first day. From Wall Street to Main Street, as it is so nicely phrased, everyone was reading in the newspaper the next day about that miraculous invisible phenomenon called the Internet. (Unfortunately, I don't have time to explain to readers under 35 what a newspaper is, but think of it as a pile of printed out homepages with very large banners that you read for free at the hairdresser's, excuse me, hair stylist's.)
Cisco no disco, but briefly the biggest
The clamor around Netscape stock quickly died down because of relatively modest revenue and profit growth, mainly due to fierce competition from Microsoft that culminated in an infamous lawsuit (in which, incidentally, to my surprise, an offer Microsoft had made me at my first company Planet Internet to switch browsers was entered into evidence by Netscape).
Meanwhile, almost unnoticed, another much less sexy company grew to become the most valuable company in the world: Cisco. Products from this maker of telecommunications equipment were used by virtually every telecom company in the world, which rushed to offer the Internet as a new service alongside telephony, as well as in corporate networks that were massively connecting to the Internet.
In March 2000, Cisco was the most valuable company in the world with a market value of more than $500 billion. Its P/E ratio was a staggering 196, meaning an investor was willing to pay $196 for $1 of the company's profits at that share price. The party did not last long, and two decades later Cisco is a fine company, but it is worth only half of that sky-high valuation of the early 2000s. By comparison, anyone who had bought Apple stock for a thousand dollars back then would now have made over a 20,000% return and makeover $200,000.
Is Nvidia the Netscape, Cisco or Apple of 2023?
The Netscape browser opened up information and commerce to a global audience. The greatest value, however, turned out to lie not in the creators of the infrastructure (Cisco) or the creators of the application layer (Netscape), but in the developers of applications on that enabling technology: first Yahoo and eBay, then Amazon and Google.
Similarly, Facebook, Whatsapp, Instagram and later Tiktok benefited from the smartphone breakthrough, especially after 2010 when the iPhone 3 appeared and Android enabled good licensing versions for Samsung and Chinese smartphone makers such as Huawei. That technology, combined with globally cheaper subscriptions and data traffic bundles, led to exploding social media usage.
From the market value of Meta (owner of Facebook, Instagram and Whatsapp) of over $700 billion, as well as the over $200 billion market value of ByteDance (owner of TikTok and Lemon8), you would think that the greatest value is again in applications. Were it not for the fact that Nvidia is already worth a whopping $1.1 trillion, $1100 billion.
Share prices since Jan. 1, 2023. Nvidia shares rose a whopping 221%! That is not only extreme compared to the S&P 500 which so far rose an excellent 15% on its own, but also compared to all other dominant technology companies.
"The business is not as good as gold, but much better. Cash flows are growing at an amazing rate. Costs and expenses are under control. The balance sheet is beautiful. While growth in the data center business is beyond what I thought possible not too long ago, gaming also seems to be back on track."
Several analysts and investors have now raised their expectations for Nvidia stock to above $550 and even $600, which would mean that Nvidia will be worth more than Amazon.
There are only five
Excluding Saudi state oil drillers Aramco, Nvidia is already currently one of only five companies in the world that has reached the $1 trillion (thousand billion) market value milestone - along with Apple, Amazon, Microsoft and Google's owner Alphabet - and the only one that is not a household name.
Founded in 1993, Nvidia became known primarily as a maker of graphics cards for high-end gaming computers; everyone has one of those nephews in the family who would come over to give you a sweaty hand when you visited, before quickly hobbling back to the attic to continue gaming on his PC with an Nvidia GeForce graphics card. That was also the image investors had of the company for years.
Under Huang's leadership, Nvidia quietly developed into a formidable competitor to giants such as Intel. "We saw early on, about a decade ago, that this way of making software could change everything. And we changed the company from the bottom up and sideways. Every chip we made was focused on artificial intelligence,"Huang told CNBC.
Anyone looking superficially at Nvidia is quick to make the mistake of concluding that the company only makes chips and is very sensitive to competing chips as already announced by Nvidia's own customers, including Google, Microsoft and Amazon. Only it turns out that the lead Nvidia has built up is far less easy to catch up with than widely thought. As the New York Times concluded, Nvidia has developed a competitive moat around AI chips.
Keith Strier, Nvidia VP Worldwide AI, explained well on LinkedIn that Nvidia makes the entire infrastructure, not just the chips, and that those components are very scarce.
Therefore, orders are being placed by various companies and even countries for years ahead; previously I wrote about orders from the Chinese Internet giants and from the Arab world. The rumor is persistent that orders are being made for billions for chips that Nvidia has not yet announced, let alone has in production.
The scarcity of components and manufacturing capacity could be an Achilles heel for Nvidia. After all, manufacturing is outsourced entirely to TSMC, but not entirely coincidentally, TSMC also makes all of Apple' s chips which seems to have a preferred position.
Conclusion: Nvidia example of completely new business form
It can be argued that Nvidia has built a better competitive position than Cisco ever had and the margins are arguably much higher. While Nvidia is an enabling technology, it is far less easy to replace than, say, Netscape once was. But it is also not an extremely scalable company like Google or even Meta because it depends on hardware production.
To understand Nvidia and the AI craze, it is interesting to see how, for example, ChatGPT uses Nvidia. The company OpenAI, whose shareholders include Microsoft, developed ChatGPT and together with Microsoft' s cloud service , Azure, and Nvidia built the cluster on which ChatGPT runs. Quickly summarized: Microsoft's cloud service Azure uses Nvidia's famous H100 chips for this particular application in a data center and the application ChatGPT uses the service.
OpenAI has licensed use of ChatGPT to Microsoft, which uses the technology in its Bing search engine, among others. But Microsoft also makes its own AI chips that will eventually compete with Nvidia.
It is like slowly finding out that your uncle on your father's side is married to your mother's sister, only on a prenuptial agreement and not in community of property.
It is crucial to understand that the AI applications we see today are almost all based on Large Language Models (LLMs), a type of artificial intelligence models designed to understand and generate human-like text from large amounts of data on which it has been trained.
The PT in ChatGPT stands for Pre-Trained: ChatGPT uses deep learning to process and produce text in a coherent and contextually relevant way. Because of its size, which includes billions of parameters, it can handle a variety of tasks, from answering questions and writing essays to generating creative content. Only, and here it comes, that pre-training, feeding the system with data, requires such extreme computing power that can currently only be provided by Nvidia.
30,000 GPUs for ChatGPT
So when Hubspot, the tool I use to create this newsletter, announces, for example, an AI module claiming to be "Powered by OpenAI," not only Hubspot but also OpenAI earns from it, obviously Microsoft (because OpenAI uses Azure) and, above all, Nvidia. This kind of value chain will become commonplace in AI: specific applications developed on horizontal AI platforms like OpenAI, from which ultimately Nvidia always earns.
To complete the example of OpenAI with ChatGPT: only those involved know exactly how the system is put together, but the claim that no less than ten thousand Nvidia GPUs were used to make ChatGPT and another twenty thousand are needed to run nicely does not sound implausible. With a purchase price of $30,000, that's an order for a whopping $900 million for Nvidia.
What is unique about Nvidia's AI technology stack is that they are no longer motherboards or graphics cards that my nephew can pull right out of his PC, but software applications specifically designed for the capabilities of, say, Nvidia's flagship H100. Because depreciation on these types of systems is spread out over many years, it will be years before Nvidia is replaced - if any new, better technology comes to market than Nvidia offers, which does not seem likely at this time.
When Jensen Huang first used ChatGPT, he asked for a poem about Nvidia. So I asked for a poem about Nvidia, the H100 and revenue potential. This is the result.
In the realm of tech, where ambitions reside, The H100 emerges, with potential untried. Nvidia's beacon, shining so bright, Promises profits, reaching a new height. Markets await, their hopes taking flight, For with this chip, the future's so right. Nvidia stands poised, ready to soar, With the H100, revenue's lore is in store.
Poem by ChatGPT about Nvidia and the H100
Next week another regular installment of my newsletter. Happy Sunday!
The technology industry is increasingly suffering from excessive attention to tech founders. Elon Musk continues to dominate the spotlight, whether he is reviving Twitter or tearing it down, depending on whom you ask. Still, the most significant news of the past week was the unveiling of Worldcoin. This project drew attention because of its shiny "orb," which scans the iris of new users, and because of the involvement of co-founder Sam Altman, also the CEO of OpenAI.
It was the week of Barbie and Oppenheimer, or Barbenheimer, and Worldcoin's Orb. Photo: created with Midjourney
Two months ago I wrote about Worldcoin and the company behind it called Tools for Humanity, which then presented itself on its 1-page website with the slogan "a technology company committed to a more just economic system" and raised as much as $115 million for the Worldcoin project.
The goal, the founders say, is to create a global identification system that will help reliably distinguish between humans and AI, in preparation for when intelligence is no longer a reliable indicator of being human. At Worldcoin, verification of humanity is ensured through the use of an Orb, a sphere: a biometric iris scanner.
Shiny happy orb people. Photo: Worldcoin
But according to Alex Blania, CEO and co-founder of Tools for Humanity and Worldcoin project leader, there is a bigger purpose than just identification as a human being:
'We seek universal access to the global economy, regardless of country or background, and accelerate the transition to an economic future where everyone on earth is welcome and benefits'
The definition of a pyramid scheme?
Who is not moved to tears by this noble endeavor? Who is against being welcome on earth? Coindesk visited Worldcoin's headquarters in Berlin and from this brilliant article, "Inside the Orb," the impression emerges that Altman and Blania possess a unique combination of talent, otherworldliness and opportunism.
So they talk about Worldcoin as a crucial step toward a Universal Basic Income (UBI) for the entire world population, because these men think big.
But they are particularly vague when the question is asked who should then pay for that universal basic income for our planet. Altman says of this:
"The hope is that when people want to buy this token, because they believe this is the future and there will be an influx into this economy. New token buyers is how it gets paid for, eventually."
Sam Altman, co-founder Worldcoin
Aha, so the influx of new buyers funds the system. That rings a bell, and I asked ChatGPT, the product of Sam Altman's other company, OpenAI, what the definition of a pyramid scheme is. Here it is:
'A pyramid scheme is a business model in which members are recruited through a promise of payments or services for enrolling others in the system, rather than providing investments or selling products. If recruiting multiplies, recruiting soon becomes impossible and most members cannot benefit; pyramid systems are therefore unsustainable and often illegal.'
I'm not saying Worldcoin is a pyramid scheme. Only that ChatGPT says it looks a lot like one.
Free coins for your iris
A cult of personality is emerging around Sam Altman reminiscent of the golden years of Steve Jobs and Elon Musk. Entire articles are devoted tothe 400(!) companies in which Altman has invested.
Partly for this reason, people lined up in several places around the world last week to have their eyes scanned by Worldcoin's orb. The media cheerfully helped make the hype as big as possible, with service journalism like this article in India, "Sam Altman's Worldcoin is here: how to get your free coin.
Because the system works stunningly simple: download the free Worldcoin app, scan your eyes at an orb, get a World ID and your Worldcoin app instantly receives 25 free Worldcoins; except in America, as Gizmodo experienced. But it's customer onboarding with a simplism and efficiency that would be the envy of a schoolyard drug dealer.
Critics have a point
Twitter would not be Twitter (oh no, it is also no longer Twitter but is now called X, but more on that later), if it were not for a number of astute critics who have analyzed Worldcoin well, such as here and here.
Ethereum founder and widely acclaimed ethicist within the blockchain industry Vitalik Buterin immediately warned of the possible, unintended, bad consequences of Worldcoin's approach:
'Risks include inevitable privacy breaches, further erosion of people's ability to surf the Internet anonymously, coercion by authoritarian governments and the potential impossibility of being simultaneously secure and decentralized.'
Vitalik Buterin, co-founder Ethereum
For now, let's believe Blania and Altman's promise that iris data will be immediately deleted from the orb and not stored. But how many fake orbs will be used by criminals to defraud consumers of their iris scan?
In any case, the question is justified whether a centrally run company should undertake this kind of initiative. World ID is effectively a universal passport, why should it be developed by a commercial company?
Remember, for all the fancy promises and goals, this is a commercial organization and the founders and backers own 25% of all Worldcoin. That's a higher tax rate than VAT. Even stranger: from Asia, I cannot see the pages in the white paper that deal with these tokenomics at all, because they are shielded. A problem more people faced. Why are they shielding information from the same people who are allowed to have their eyes scanned?
Vitalik Buterin's schematic representation of the problem
'Proof of Personhood' is relevant, but not in this way
Cybercrime will only increase in the age of AI, so there is a need for proof that you are dealing with a human being and not a computer program. Just not in the way Worldcoin is tackling the problem. Michael Casey of Coindesk puts it this way:
'The risk is not with the technology per se - we have known for years that AI is capable of destroying us. It is that if we concentrate control of these technologies with a handful of overly powerful companies motivated to use them as proprietary "black box" systems for profit, they will quickly move into dangerous, humanity-harming territory, just as the Web2 platforms did.
Still, there is at least one positive aspect that can emerge from the Worldcoin project. It draws attention to the need for some sort of proof of humanity, which may give impetus to the many interesting projects that seek to give people more control over their identity in the Web3/AI era.
The answer to proving and elevating authentic humanity could lie in capturing the "social graph" of our online connections, relationships, interactions and authorized credentials through decentralized identity models (DID) or initiatives such as the decentralized social networking protocol (DSNP) that is part of Project Liberty.
Or it could still lie in a biometric solution like what Worldcoin is working on, but hopefully with a more decentralized, less corporate structure. What is clear is that we need to do something.
Portable identity and reputation
Casey's line of thinking leads to a system of identification and reputation, where you can use services anonymously, but share your identity and reputation if you wish. My Uber score, for example, is 4.96, but if I want to book a room through Airbnb, I do so as a completely unknown individual.
This is why a landlord is the first to ask for a passport copy, while it would also be valuable for Airbnb and the landlord to know that at least as a passenger in an Uber, I did not demolish or vomit under the cab. Such a system where you as a user carry your online reputation with you and decide for yourself to share at a time you deem appropriate would be extremely useful in the digital economy.
Universal basic income for the world's population is so far-reaching that it should be introduced through normal democratic processes. Let's not leave that kind of major social issue to a few men from Berlin; historically that has not proven to be a happy combination.
Twitter becomes X
It can't have escaped anyone's notice, Elon Musk is turning Twitter into X. What a romantic he is, isn't he, to name his company after his youngest son? He explains that in the coming months "your entire financial world can be orchestrated" from X. Because Musk wants to make Twitter a "super-app," an all-encompassing app that merges information, communication and transactions. Similar to China's highly successful WeChat. Musk wants to get rid of the hated ad model as soon as possible.
Musk will look eagerly at South Asian Grab and GoJek, which will allow users to not only order cabs (on cars or scooters), but also pay their bills and even hire personal shoppers to go to the store of your choice to do your shopping. Of course, with a margin for Grab and GoJek on each transaction.
Every second Musk spends on the overrated Twitter remains a waste of time and a waste of his talent. I still hope one day Musk gets angry about Alzheimer's, cancer and the mental health of humanity and uses his undeniable talents to solve those problems, for example with a biotech company. Musk has mastered development of software, hardware and mechanical innovations, how hard would biotech be for him?
The informative podcast More or Less, from the couples Morin and Lessin, discussed Musk's plans for Twitter in detail this week. It's the only podcast I know of, by the way, in which two couples discuss a specific industry, noting that ex-Wall Street Journal reporter Jessica Lessin is the astute founder of the online trade magazine The Information and Dave Morin is an investor who previously started Path, the most beautiful app of a failed social network I've ever used.
Notable links this week
Bill Gates has a podcast
Speaking of notable podcasts: Bill Gates has started a podcast called Unconfuse Me, and the first edition featured actor Seth Rogen and his wife Lauren as guests. Apparently that's a trend, to appear as a married couple on a podcast. I can hear you thinking, "Bill Gates has a podcast with Seth Rogen, doesn't that sound like Kermit the Frog with Scooby Doo as a guest? It certainly sounds that way, but it turned into an unexpectedly candid conversation about Alzheimer's, home care and recreational drug use, among other topics. Playback at double speed is not recommended.
Barbenheimer does nearly $1.2 billion in a week, Oppenheimer breaks IMAX projectors
The box office success of Barbie and Oppenheimer is unexpectedly huge: Barbie is expected to end the weekend with sales of $750 million and Oppenheimer is approaching $400 million. Even more strikingly, I found that the 70 millimeter version of Oppenheimer in the IMAX is so complex that the film is sometimes out of sync with the sound and even literally breaks. So much for all the doomsday scenarios that "old-fashioned" cinemas would lose out in the streaming era. Good feature films are drawing more audiences to theaters than ever.
Barbenheimer, but made by AI
If Barbie and Oppenheimer were squeezed into one movie, this would be the trailer. I say it too often about AI applications, but it's incredible that this was created entirely by AI: image, sound, video. Above all, the speed at which these kinds of applications are developing is unparalleled. The last time I was so stunned by a technology on the Internet was over 25 years ago when George Michael presented video in a Web browser.
Spotlight 9: Party Q2 at Google and Facebook
Yes, I know they are actually called Alphabet and Meta these days, but admit it, who reads on when those names are in the headline? It was the week when the second quarter results were released so there was a lot of movement in the stock markets. This web page contains a short, handy overview of the results of the major tech companies.
Meta and Alphabet rise, Microsoft falls. Investing in the stock market thus seems like a sprint, not a marathon.
The short-sightedness in the stock markets was demonstrated for the umpteenth time this week. Alphabet and Meta made sharp price jumps, due to higher-than-expected sales while partly driven by currency differences. Granted, Alphabet made 28% more sales on cloud services and that will only increase in the AI era.
However, Meta lost a whopping $21 billion in 18 months on investments in Reality Labs, Meta's business unit that is doing something with all the buzzwords of the last two years, including Web3, Metaverse, AR, VR and anything with difficult glasses. Result: 10% share price gain. How is it possible?
Microsoft, which has taken a tremendously strong position in the field of AI by incorporating OpenAI into the Bing search engine *and* invested as much as $10 billion in OpenAI, a guaranteed hit, was not understood by investors because the investments in AI "do not lead to higher sales right away. Result: 2% decline.
The pink cloud is a schematic representation of my brain as I look at the stock market and see Meta rising, while Microsoft is falling. Photo: created with Midjourney
'The growth in AI has the potential to drive Microsoft's two largest businesses: the public cloud Azure and the more traditional and market-leading productivity software Office.'
CNBC
That is exactly how it is, but investors apparently had a horizon this week that ended with the Friday afternoon drinks.
This week a couple of human interest stories stood out. The richest Welshman, Sir Michael Moritz, who as a journalist at Time was once blacklisted by Steve Jobs, left Sequoia Capital after nearly 40 years. And while CEO Sam Altman traveled the earth meeting world leaders, OpenAI turned out to be led by Mira Murati, a virtually unknown 35-year-old Albanian woman.
Image: Midjourney. Prompt: man with gray hair walks away, San Francisco skyline in background.
The little kingdom
The first time I came across the name Michael Moritz was in 1992 when Frans Straver, with whom I would later found Planet Internet, and I were graduating together from the University of Amsterdam on the sexy subject of "success and failure factors of interactive media in the consumer market. At that time, only mustachioed accountants had computers and only the bigger drug dealers used cell phones.
If you were looking for a serious book about the computer industry, there was nowhere to turn but the American Book Center in Amsterdam. There we found the fantastic book, which by then was almost a decade old, by Moritz, entitled "The Little Kingdom," about how Steve Jobs developed the Mac at Apple in the early 1980s.
"So much of what has happened is connected to Apple and the story of this extraordinary company that I find that Apple's breadcrumbs have been strewn across my life's path," said Moritz, who regrets that he never settled his spat with Jobs before his death. The book planted the seed in Frans and me that it was possible for two young guys to set up a successful company in the technology world, something we had never considered until reading Moritz's book.
Of course, when I moved to America in the late 1990s for my next startup after Planet Internet, Moritz was the first investor on whose door I knocked. Tried to knock on the door actually, because I never got beyond the inbox of the intern of the assistant of the junior associate at Sequoia who kindly declined me. Later I understood that Sequoia, and Moritz in particular, received thousands of business plans a year during that dotcom boom but made only a few dozen investments.
From Airbnb to Zoom
Michael Moritz was born in Wales to Jewish parents who had fled the rise of the Nazis in Germany. He was stationed in San Francisco for many years as a Time journalist and wrote widely about the world of technology. Don Valentine, the founder of Sequoia and the man who invested in Apple, Atari, Cisco, Oracle and Electronic Arts, among others, saw something in the British journalist and offered him the chance to work as an investor.
Over the next 38 years Moritz worked for Sequoia, the investment company strung together successes. Under his reign, Sequoia invested in virtually every company whose apps we have on our phones or computers today, or which we use for work directly or indirectly, including Google, Dropbox, Linkedin, Yahoo, Airbnb, PayPal, Instagram, YouTube, Whatsapp, Nvidia, Zoom and OpenAI.
"One of the things that is undervalued in our industry is how much you can learn from someone decades younger than you. Those are the people who might go on to do unusual things; they understand something very well, are independent thinkers and obviously smart and gifted."
Early this century, Moritz also initiated Sequoia's lucrative expansion into China. He was chairman of Sequoia from the mid-1990s until 2012, when he relinquished day-to-day management of the company due to "a rare medical condition that is treatable but incurable." Still, he remained a partner of Sequoia until his announced departure this week.
In recent years, Moritz apparently focused more on e-commerce and led Sequoia's investments in Stripe (estimated valuation $50 billion), Klarna ($6.7 billion), Instacart ($12 billion) and Getir ($6.5 billion). He will gradually transfer positions on the supervisory boards of those companies.
A hefty crank start
Forbes estimates Moritz's wealth at $5.2 billion, thanks largely to his holdings in Internet companies. Moritz and his wife donate most of it to charities, mainly through their own foundation, Crankstart. They are in quite a hurry to do so, judging by the report on the website:
"In 2022, we awarded $200 million in grants, 60 percent of which were to nonprofit organizations in the San Francisco Bay Area. The grants ranged in size from $1,000 to $18,500,000 and went to 363 organizations."
Other eye-catching donations included $20 million to the American civil rights movement ACLU, $50 million to his alma mater the University of Oxford, and no less than £75 million to the same university to spend on scholarships for children from low-income families. Moritz had not lost sight of the fact that he himself had once enjoyed a scholarship.
What I personally found remarkable was that Moritz is funding the famed literary Booker Prize through Crankstart for at least five years, after the previous sponsor pulled out. But unlike that sponsor, Moritz did not want to attach any name recognition to his donation because he and his wife believe that the Booker Prize is a prestigious award that should be associated with the name of the prize, not the name of the sponsor.
The similarities between Steve Jobs and Sir Alex Ferguson
In 2009, Moritz released a revised version of his book on Apple entitled "The Return to the Little Kingdom: Steve Jobs, the Creation of Apple and How It Changed the World. The book remains highly recommended for anyone interested in innovation and creativity.
To my surprise, Moritz, still a die-hard Manchester United fan despite having lived in San Francisco for nearly half a century, wrote a book on leadership with legendary manager Sir Alex Ferguson in 2015.
In an interview about that book, Moritz shared some observations about the similarities between Steve Jobs and Sir Alex:
"When it comes to leadership, I think there are similarities. In their own way, they are both perfectionists. With Sir Alex, I was looking for a way to explain what I think are the basic principles of good leadership. I don't think they are very different between Silicon Valley and the soccer field, and they are universally applicable. The problem with the principles of leadership is that they are pretty easy to list, but very difficult to apply.
Sir Alex, Steve, they both had the energy to consistently push, urge, persuade others toward a goal that they themselves envisioned. I think the big difference between management and leadership is that the leader can persuade people to do the impossible."
Time for a new book?
Things get even more interesting when Moritz shares his own investment criteria. "When I want to invest I start with a market opportunity, because if a company starts in a market that looks unchanging and doesn't look like it's going to grow, it's not going to be a great company. Furthermore, we are looking for people who are completely obsessed. People who love nothing more than to work on the product or service they have come up with."
In the Netherlands, many investors employ the archaic cliché "it's about the guy, not the tent"; but Moritz cites as the first criterion precisely a large market, prone to change. That's an interesting angle. A top entrepreneur in a small market is not so interesting in this view.
And that begs the question of whether Moritz, time and health permitting, would like to write a book for the first time sharing his own views on entrepreneurship, innovation and leadership, rather than writing about people like Jobs and Ferguson.
My favorite book for tech entrepreneurs is "The Hard Thing About Hard Things: Building a business when there are no easy answers' by former entrepreneur Ben Horowitz, now best known as co-founder of venture capital firm Andreessen Horowitz.
Horowitz is an exception, because just as many former top athletes turn out to be bad coaches, few successful entrepreneurs manage to develop into good investors. Let me stick to myself: when people ask me for advice on investing, I always reply that although I worked as an investor for many years, I never said I was good at it. That's why I became an entrepreneur again.
Moritz, now knighted Sir Michael, has no entrepreneurial experience whatsoever. Apparently, that was no impediment to achieving extreme success as an investor. It is high time someone with his amazing track record, huge network and sharp pen, shared his knowledge and experience in the form of a new book.
The driving force behind OpenAI is a 35-year-old Albanian woman
Founder and CEO of OpenAI Sam Altman visited as many as 22 countries in recent weeks including Israel, Jordan, Qatar, the United Arab Emirates, India, South Korea, Japan, Singapore, Indonesia and Australia. Altman met with students, venture capitalists and leaders including Indian Prime Minister Modi, South Korean President Yoon Suk Yeol and Israeli President Herzog. Earlier in his trip, Altman met with British Prime Minister Sunak, German Chancellor Scholz and French President Macron. (Remember, with dark brown shoes?)
The subject of all the conversations was the question: can AI be trusted, or are government measures needed? So it was instant news when Reuters saw Friday on the LinkedIn page of OpenAI's "Trust & Safety Leader" Dave Willner that he had left quietly after a year and a half. Willner talked about family reasons, which of course is possible.
But I also note that according to his LinkedIn profile, with 18 months of employment, Willner has already secured a sizable number of options in OpenAI, which at the estimated company valuation of $27 to $29 billion for OpenAI are worth enough that the Willner family's life would not be significantly improved if he stayed with the company for another year or so. After all, the difference in quality of life between earning 10,000 Euros or 20,000 Euros is far greater, than the difference between 10 million or 20 million in the bank.
Until a successor is found, Willner's team (apparently there is a Trust & Safety team at OpenAI) is managed by the CTO, Mira Murati. Who is this woman, who is still completely unknown on ChatGPT itself?
Mira Murati? Doesn't ring a bell, ChatGPT says of its own boss.
Although Murati is unknown on her own ChatGPT, the competitor, Google Bard, does have some information about her:
"Mira Murati is the Chief Technology Officer of OpenAI. She is a brilliant engineer who has worked on several AI projects, including ChatGPT, Dall-E and Codex. She is also an advocate for the regulation of AI because she believes it is important to take precautions to prevent the misuse of AI.
Murati was born in Albania and studied mechanical engineering at Dartmouth College. She then worked as an intern at Goldman Sachs and Zodiac Aerospace before joining Tesla as Senior Product Manager of the Model X. In 2016, she joined Leap Motion. In 2018, she joined OpenAI and was promoted to CTO in 2021."
There are several things remarkable about this. First, Murati's description on Bard is almost literally identical to the one in the CEO Magazine article. That raises the question of which source had the original information and which source clumsily copied it? It's fodder for lawyers in the AI world, where real and fake or original and copy seem completely interchangeable.
Second, Murati must be something of a prodigy, because it is rare for someone with the study of mechanical engineering to make a career in software so quickly. One study is about how, for example, the Tesla X is put together, the other about the software that makes the car self-driving.
Third, it appears that Murati moved to Canada from Albania at the age of 16. I asked Bard if Murati moved alone, or with her parents. Bard replied that 'Murati and her husband Sokol fled to Canada with their two children in 1993.' But in 1993, Mira Murati was five years old, which is also on the early side in Albania to have already started a family. In short; there is still a lot to improve on Google's AI activities.
Murati and Moritz: America first
There is a striking parallel in the lives of Mira Murati and Michael Moritz. Both came to America from a small European country, where they had the opportunity to expand their knowledge at excellent universities and then to exploit their potential in top companies.
I am not saying that every Ethiopian is a potential top entrepreneur or that there is a brain surgeon hiding in every refugee from Aleppo, but in the month when a cabinet falls in the Netherlands over a few thousand additional immigrants a year, I do argue for a rational immigration policy. Europe is old, so is Asia; several continents are aging rapidly. At the same time, there are people in previously unexpected places who can contribute much to the world, if only they are given the chance.
Of course, my perspective is colored, because I too once came through an exchange and scholarship from Amsterdam to a university in San Francisco, where I first saw the Internet. Moritz and Murati came to the San Francisco Bay Area from Wales and Albania. But where in Europe or Asia would they have been as welcome as there? And where would their origins play such a minor role? What European or Asian venture capitalist would give a journalist a chance as an investor, or a young Albanian woman the technical leadership of a billion-dollar company like OpenAI? That should make entrepreneurs, voters and policymakers think.
Spotlight 9: Ripple continues to amaze, but for how long?
The chart is not upside down; there were only declines among the leading investments in the tech sector except for Ripple.
It was a week full of sadness and gloom in the tech corner of the stock markets. But where I expected a correction to Ripple's huge price jump after last week's court ruling, XRP remained fairly stable while the other major crypto currencies, Bitcoin and Ethereum, both fell.
So I downloaded from Coinmarketcap the XRP price data for the last 30 days and asked OpenAI's Code Interpreter to plot the price against trading volume. From there, this interesting graph rolled out:
The red line indicates the trading volume, the blue line the price.
Trading volume in XRP has declined dramatically over the last week, following a huge spike in the days immediately following the court ruling. The falling blue line representing the price now parallels the red line of falling trading volume.
That means the price can no longer be driven by increasing demand. Investors who believe in XRP are holding on. But not enough new buyers are entering the market at the current price to offset the number of sell orders. A further correction of XRP seems inevitable.
And bad news for crypto enthusiasts: anyone who bought XRP a year ago should certainly be happy with a 105% rise. But that's still a lot less than the 160% price jump Nvidia made in the last year, driven by the AI hype that requires strong processors.
The White House on Friday invited representatives of seven leading companies in the AI field and announced a covenant of sorts with them, in which the companies pledged, among other things, to add digital watermarks to their systems. (So if all goes well, we'll soon know who had copied the text from whom about Mira Murati: Bard or CEO Magazine?)
The participating companies have been regular topics in this spot in recent weeks, namely Microsoft (with Bing), Google(Bard), OpenAI(ChatGPT), Anthropic(Claude), Inflection(Pi), Amazon and Meta(LLaMA).
In effect, Meta is thereby acknowledging OpenAI's lead and, by making its technology open source, hopes to attract so many developers from outside the company that it can still catch up with LLaMA 2. A smart strategy by Meta, which is distinctive from the closed AI platforms of OpenAI and Google.
It continues to be amazing how quickly AI applications are improving. After text and photos, now it's video's turn, and Twitter user Nathan Lands shared a nice overview.
Two weeks ago, I described my doubts about Mark Zuckerberg's jubilation about his new app Threads, the AliExpress version of Twitter. Granted, because of Instagram's installed base, hundreds of millions of people will try Threads. But the app is too sloppy, boring and predictable to generate much repeated use unless improvements are made to the app quickly.
This journalist explains in great detail all the shortcomings of Threads. A good point: why is there only an app for cell phones and Threads cannot be used on a computer, if the platform is about text messages? I wonder how long it will be before the first significant updates are released by Meta, because it would be good if a serious competitor to Twitter emerges.
Christopher Nolan and Hoyte van Hoytema literally and figuratively make great films
In all the digital opulence, film writer and director Christopher Nolan is a blessing. He filmed the masterpiece Oppenheimer on 70 millimeter IMAX film and does not use Computer Generated Images (CGI) in his films. This video shows how the film is literally pasted together from fifty-three rolls of film of three minutes and twenty-four seconds each. In total, the film, which has a duration of three hours and nine seconds, is 17.7 kilometers long and weighs 272 kilograms. That's another entertainment experience than watching Love Island on your iPhone.
Nolan finds CGI "too safe, the image does not seem to contain the threat of, say, a real explosion, however small.' He shoots on film because it most closely resembles the image the human eye perceives. That and more can be seen in this video in which Robert Downey Jr and Christopher Nolan answer the most frequently asked questions on the web about them.
For those of you who are going to see Oppenheimer in theaters next week; go to the IMAX and I'd love to hear how you liked it.
'Be curious, not judgmental.' That's the message of my favorite Ted Lasso series. Mindful of that credo, I attended the Asia Tech Summit in Singapore this week, followed the launch of the Apple Vision Pro, the magic glasses of glasses, and tried to get to the bottom of the lawsuit filed by U.S. authorities against crypto exchanges Binance and Coinbase. Unfortunately, things already went wrong during the first hour of the Asia Tech Summit, in which Secretary of State Van Huffelen was overcome by an overdose of unfounded self-confidence.
Dutch pride abroad, 'minister' of digitization Alexandra van Huffelen
The Asia Tech Summit is particularly interesting because it brings together business and government institutions, with the idea that both sides develop an understanding of the challenges facing the other. Singapore Finance Minister and incoming Prime Minister Lawrence Wong provided the kickoff, after which Kaja Kallas (Estonia's first female prime minister) and Jacinda Ardern (New Zealand's youngest ever prime minister) paved the way for the first substantive panel, on the opportunities and threats of AI. Participating in this was State Secretary Van Huffelen, along with the president of Microsoft Asia and Nvidia's board member who deals with AI.
As the only other Dutch speaker, I was above average in my interest in Ms. Van Huffelen, and Google learned that she had a typical resume for a Dutch administrator: having been an alderman (sustainability in Rotterdam), director of a semi-governmental body (GVB in Amsterdam) and as State Secretary of Finance, she had inherited the Supplement affair, from which it is difficult to judge from a distance how adequately she had handled this painful dossier.
Nothing wrong with that, I thought, in the spirit of Ted Lasso, stay positive! After all, with the Supplements affair still in the back of her mind, hopefully she had taken a ride in Singapore on the phenomenal subway (clean, fast, cheap and safe, only resembles the GVB subway from very distant places because it is also transportation on rails) and would surely show some humility and modesty? So I expected and hoped, but nothing could be further from the truth. The state, which for incomprehensible reasons is heralded abroad as Minister of Kingdom Relations and Digitalization, went in with a straight leg almost from the kickoff.
Strategic action plan
For those with a strong stomach, the entire session can be watched back here, but the gist is that Van Huffelen sees mostly threats in AI and noted disappointment at the very beginning that nothing more has been heard of the idea of stopping AI development for six months. This is especially strange because the Dutch cabinet produced a policy paper as early as 2019 under state secretary Keijzer of EZ, which mostly sang the praises of AI. Participating in that cabinet was D66, Van Huffelen's party, and she even joined it as state secretary in 2020. There is a NL AI Coalition(NL AIC), in which government, business and knowledge institutions work together, and there is an AINed foundation that may spend 204.5 million Euros of government money to stimulate AI in the Netherlands.
In 2019, a policymaker thought a baby wearing VR glasses from Lidl had something to do with AI
Van Huffelen did not say a word about this and pretended that AI is viewed exclusively with a critical eye in the Netherlands. Her substantive contribution can be summarized as a series of clichés that the citizen comes first (gosh) and should not be forgotten (boy) and that there is more to life than making a profit; the latter she must have learned from the tens of thousands of victims of the Supplements affair.
For me, the moment at the very beginning was crucial, when it became apparent that Van Huffelen is either particularly ignorant or particularly underhanded. A combination of the two I would not rule out after her performance. After 1 minute 50, Van Huffelen literally said:
" We have seen many problems with AI, I have seen that in my country, even the AI that the government used turned out to be very biased."
state secretary Alexandra van Huffelen
Excuse me, to dismiss the Supplements affair, which has ruined the lives of tens of thousands of people, in which over 2,000 children were placed out of their homes and on which the cabinet fell in which Van Huffelen, nota bene, was himself responsible for this dossier, as a result of AI, is downright disgraceful.
Therefore, this brief refresher for Ms. Van Huffelen, who seems to have no active memory of the Supplements affair:
The Personal Data Authority concluded that the Tax Authority's processing was "unlawful, discriminatory and therefore improper" which constituted a serious violation of the AVG. The Dutch Tax Authority itself violated Dutch law! (It is therefore downright bizarre that as recently as January 17 of this year, this article was published on the Belastingdienst's site, reporting that everything went perfectly by the book).
Officials at the top of the Inland Revenue stopped benefits from people even though they knew they were entitled to them. Up to the highest level, it was decided to continue this unlawful approach for years .
In short, the Surcharge Affair is an accumulation of wrong and evil policy instructions. It has nothing, but nothing, to do with AI. Because AI is precisely about machine learning, computer programs that get smarter as more data is added to them. Whether the Surcharge Affair was in part due to institutional racism or racial profiling I leave to sociologists and activists, but in any case it was "just" the work of incompetent and scummy people.
Ms. Van Huffelen apparently wanted to score with party colleagues tens of thousands of miles away. Perhaps the next D66 newsletter will contain a glowing passage about how their state lectured the big bad Microsoft. In any case, it will be bonus points in certain circles if Van Huffelen aspires to a job in Brussels and wants to further profile herself as a fighter for civil rights against tech capitalism. After all, she certainly wanted to profile herself.
Ready steward at the Evening Walk
Each speaker received in advance an explanation of the dress code, "business casual (for gentlemen: suit, no tie). I don't know what her letter said, but I'm sure it wasn't "ready steward at the Evening Four. Van Huffelen's yellow dress and particularly ungainly appearance by Asian standards stood out more than her substantive contribution.
If someone in Asia makes a comment on a panel with which you disagree, you don't say, especially as a representative of a country, 'that is not true.' Then you say, for example, 'I have a different viewpoint.' Or: 'another way of looking at this, is xyz'. In the audience, people wondered aloud whether Van Huffelen was wearing a beach dress and whether she had confused her islands, because 'the yellow of Cory Aquino was in the Philippines, not Singapore.' An ill-mannered Dame Edna is not what you want to portray as the Netherlands in one of the largest global markets.
The most embarrassing moment, although I wonder if Ms. Van Huffelen caught it, was when a real minister, Josephine Teo of Singapore's Ministry of Communications and Information, announced the creation of the AI Verify Foundation. Not a policy paper without clear goals, but a foundation in which business and government jointly establish tests that companies and governments worldwide can use to test AI applications. Teo emphasized that AI is so important especially for small countries like Singapore because it can increase a country's efficiency and production without additional human labor. No question.
Quantum computing near, threatens cryptography
There were more interesting announcements at the Asian Tech Summit. First, Deputy Prime Minister Heng Swee Keat reported the creation of the National Quantum-Safe Network Plus (NQSN+). That's a mouthful and requires some explanation, this site reports:
'The National Quantum-Safe Network (NQSN+) focuses on establishing a national platform and testbed for a systematic build-out of quantum-safe communication technologies, by evaluating security and demonstrating the integration of quantum-safe applications, best practices and use cases.
The main goal is to deploy commercial quantum-secure technologies for trials with government agencies and private companies; to conduct in-depth evaluations of security systems; and to develop guidelines to support companies in adopting such technologies.'
Singapore aims to secure the crucial banking sector for the long term, hence the creation of this quantum-secure network. Indeed, the importance of quantum computing will grow rapidly in the coming years. The most engaging moment during the panel I participated in, on the future of Web 3.0, was when IBM Fellow Ray Harishankar explained (starting at 25.30) why quantum computing is crossing the path of the modern Internet and will be able to retroactively crack current cryptography.
Harishankar expects that between 2030 and 2035 quantum computers suitable for specific applications will become available. His message is as simple as it is ominous: to be ready for quantum computing in 2030, organizations must have their cryptography in order now because no password will soon be safe.
Singapore is collaborating on security and standardization with South Korea, which last month announced as much as $2.6 billion dollars to invest in quantum technology research. I already can't wait to hear what Secretary of State Van Huffelen has against quantum technology.
Apple Vision Pro better device than expected, but for what?
What woman spends $3499 on ski goggles that mess up heur hair?
Apple finally announced the Apple Vision Pro, the first step toward a completely new form of computing. Marques Brownlee explained in this particularly good video what the Vision Pro excels at and where the challenges lie for Apple. I was surprised that the introductory price is still $500 higher than expected: $3499 is not the price buster of the month. For that, though, the Vision Pro is packed with high-quality sensors.
As an Apple fanboy, I was pleasantly surprised by the all-new interface: nothing keyboard and mouse, but delicate eye-tracking. Look at something and the glasses see it. Blinking becomes the new buying 😉 Even though it will probably take a decade for Apple headsets to generate a significant portion (more than 10%) of sales, it's great to see that Apple is finally trying something big and hard again and not spending billions on stock buybacks.
Zuckerberg responds
Mark Zuckerberg was smart enough to take extensive time (nearly 3 hours!) right after Apple's announcement to comment with Lex Fridman. He had a strong argument that the Apple Vision Pro seems to be made for solitary use and not for communication with others. For the Apple Vision Pro and its successors, that indeed seems like the next step, as users of the iPhone but even the Apple Watch use their devices primarily to communicate, in the case of the Apple Watch as a receiver.
The complete integration of the Apple ecosystem between Mac, iPhone, Apple watch and Vision Pro will be fascinating to follow. Over the next few years, it will be interesting to see what applications Apple develops to try to make the Vision Pro a mass-market product. I remain convinced that the biggest obstacle will be getting women excited about putting on a device that messes up their hair and makeup. Then the utility or fun of an Apple Vision Pro would have to be enormous.
Zuckerberg himself, meanwhile, has the greatest possible difficulty motivating and enthusing his people. The Washington Post reported that even before the latest round of layoffs in May, which brought the total number of layoffs at Meta to as many as 21,000 jobs, confidence in his leadership among staff had fallen to 26%. Even for a Dutch politician, that would be pathetically low.
Notable links
First, two reading tips for any person interested in AI and for "Minister" Van Huffelen:
Why AI will save the world. Netscape founder Marc Andreessen, particularly successful as an investor this century, explains in a lucid speech why AI has mostly positive aspects.
Yuval Noah Harari argues that AI has hacked the operating system of human civilization. AI will therefore change the course of human history, says the historian and philosopher. Unfortunately only after registration; as often happens, I don't know if Harari is entirely right, but his thinking is always original and his narrative style reads delightfully.
Further:
Interesting video in which Twitter founder Ev Williams talks about how he feels about Twitter under Elon Musk. An interview that gives the impression that the demise of his brainchild really hurts him.
It's not until 2028, SAS says, but you better get there fast: book the first electric flight.
Spotlight 9: The SEC goes wild on crypto exchanges
Sleepless week on stock markets, except for crypto exchanges
It was a soporific week in the stock markets, with the old school S&P 500 outperforming the tech funds. All the negativity about Bitcoin was apparently already priced in, as BTC barely dropped amid all the uproar over the announcement that the U.S. SEC has filed charges against Binance.
Last year I wrote about Binance's lack of commitment to combating money laundering. More surprising is the charge against Coinbase that the company sold shares without having the necessary licenses. In doing so, the SEC takes the position that at least some cryptocurrencies should be considered shares.
At the same time, it is not conclusively established that the SEC has the authority to pursue charges if elected representatives of the people are drafting legislation in the area the SEC is just now moving into. Former Wall Street Journal reporter Michael Casey, now the editorial boss at Coindesk, wrote a comprehensive analysis of the legal battle unfolding in the U.S. at the intersection of crypto and politics.
The shadow that the FTX debacle cast over the crypto sector has global repercussions. Also in Singapore, where unlike the Netherlands, failures do have consequences. Employees of sovereign wealth fund Temasek who invested in FTX and lost $275 million dollars (still less than one percent of invested assets) saw their salaries cut.
How much was not disclosed, but although investigations showed that all procedures had been followed, the fraud and theft by Bankman-Fried and consorts, Singapore's sovereign wealth fund managers was severely punished. I find this heavily punished, because in the end Bankman-Fried simply stole from his investors and customers, but maybe I am too Dutch and used to incompetent souls rolling from one cabinet to another.
The news in the tech world is completely dominated by AI, in a way that recalls the breakthrough of the World Wide Web in 1993 after the launch of the Mosaic browser and the period 15 years ago after the first iPhones and Android phones were introduced. The latter two (smartphones and the Internet) are the carrier for today's technological revolution, for that is what we must now call AI. And yet I found something else more striking last week: that OpenAI founder Sam Altman, with his other company Tools for Humanity, raised a whopping $115 million for the Worldcoin project. Because as a tech entrepreneur, since Steve Jobs and Elon Musk, you don't count with one billion-dollar company; you have to have at least two. And you meet with world leaders, apparently in brown shoes.
Lovely casual: jacket off for President Macron and Sam Altman wearing brown shoes under a dark suit. source: Twitter Macron
It is remarkable, to say the least, that Tools for Humanity, which presents itself on its 1-page website with the slogan "a technology company committed to a more just economic system," is raising as much as $115 million for the Worldcoin project. Because Worldcoin is an open-source protocol, or platform whose use is open to all, while further scrimping on funding startups in the crypto world. What does Worldcoin do?
"We seek universal access to the global economy, regardless of country or background, and accelerate the transition to an economic future that welcomes and benefits everyone on earth," according to the slogan on Worldcoin's website.
That's still pretty vague, but Alex Blania, CEO and co-founder of Tools for Humanity and Worldcoin project leader, clarifies it somewhat in the press release, "As we enter the era of AI, it is imperative that individuals be able to maintain their personal privacy while proving their humanity. In this way, we can ensure that everyone can realize the financial benefits of AI."
So AI again after all ... there's no escaping it. But Blania definitely has an important point: it is important that people can prove to be human in all kinds of transactions, without having to share personally identifiable data. At Worldcoin, verification of being human is ensured through the use of an Orb, a sphere: a biometric iris scanner.
$115 million, but then you have something.
When Worldcoin was launched, it was not Worldcoin's intention to create its own hardware, but earlier this year it explained that there was no other way to prove that you were dealing with a living human being other than through the use of biometric measurement devices. Those interested in learning more about the reason for the large investment in Worldcoin can hear about it in this podcast with Spencer Bogart of Blockchain Capital. Those who want to download the Worldcoin app, click here.
Sam Altman on tour
Sam Altman is not only co-founder and chairman of the Supervisory Board of Tools for Humanity, the company behind Worldcoin, but most importantly founder and CEO of OpenAI, maker of the wildly popular ChatGPT and the company that raised $300 million for ... 1 percent of the company. In that role, Altman toured Europe last week, with President Macron, who has never seen a mirror he didn't like, being quick to invite Altman to the Elysee.
Once Macron vowed that France and Europe would not once again fall behind in new technology, but meanwhile Europe hardly plays a role in the AI battlefield. Europe is nice as an outlet, and Altman was savvy enough to mention that OpenAI will obediently abide by all European rules. Meanwhile, I wonder why the English establishment is still so fanatically against brown shoes under dark suits that the Guardian devoted an article to it.
Everything is AI right now
OK, so I tried this week; to not just write about AI. But it's not easy. Not only does Worldcoin appear to have been created primarily to prove humanity in the age of AI, but major crypto funds are removing the word crypto from their websites and suddenly focusing on AI as well. For example, Paradigm has been saying this since the beginning of this month: 'Paradigm is a research-driven technology investment firm.' Nothing wrong with that. But they used to say this: 'Paradigm backs disruptive crypto/Web3 companies.' That's akin to the cousin who introduced himself as a crypto expert and life coach at your aunt's birthday last year, but appeared on Mother's Day the other day in a t-shirt with ChatGPT on it and bragged around that he's been fistful of AI for years.
While investments in the technology world continue to decline globally, the AI sector is a magnet (or a bottomless pit?) for big money. Crunchbase counted as much as $20 billion in AI investments. Early last week, investors put $700 million into two AI startups - Builder.ai ($250 million) and Anthropic (a whopping $450 million) - and mid-week another $105 million into AI marketing platform Insider. In which I noticed that QIA, Qatar's state fund, invested in both Builder (from London) and Insider (from Istanbul). That won't sit well with Macron.
Among all the raving press releases about the millions being invested in AI, it is important to keep looking at applications of AI. Michiel Schoonhoven of NXTLI pointed me to this fascinating presentation by Sal Khan on TED, about how AI will not destroy education, but rather save it. And Microsoft announced that Windows 11 will be brimming with AI because Bing Chat will be integrated. I got flashbacks to Clippy, that talking yellow paperclip.
Notable links:
JP Morgan, it says, is introducing a ChatGPT-like service with investment tips, perhaps called IndexGPT. This service could make the personal investment advisor obsolete, but it is unimaginably difficult to get the right information into the system so automated good buy and sell advice generation will be a challenge for JP Morgan. This is going to be fascinating.
According to GeekWire, venture capital investments around Seattle, home to Microsoft and Amazon, among others, have dropped by as much as 79%. In the Netherlands, the drop would be only a third, and the suspicion is that this downward trend will continue sharply.
The Economist reports on mass layoffs in the tech sector, with an estimated, 120,000 people losing their jobs.
The Information came up with a map of cafes where investors often sit so you can attack them with a bad story during their almond milk cappu. Replace the word "investors" in that sentence with "young women" and it becomes clear how creepy these kinds of articles are.
Amazon has abandoned a significant part of its climate pledge and removed the blog post announcing the "Shipment Zero" initiative. Companies like to score with press releases, but in practice short-term profits are often preferred over a livable planet for the next generation.
Spotlight 9:GPU makers are winners of the week, maybe of the year?
The most important acronym in the tech and business world today is AI, but another acronym - GPU - is not far behind. GPU stands for Graphics Processing Units, the type of chips needed for AI applications. GPUs are optimized for training models for artificial intelligence and deep learning because they can perform multiple calculations simultaneously. The profit forecast of chip designer Nvidia, which makes GPUs for ChatGPT and the like, shows the rising demand for these types of chips , according to the Wall Street Journal.
'Nvidia said it expects to generate about $11 billion in revenue in the current fiscal quarter ending in July, up 64% from the same period last year. That figure, which CEO Jensen Huang said will be driven by demand for artificial intelligence software, would be $2.5 billion higher than Nvidia's previous record for quarterly revenue. Then there's the expected increase in earnings: Nvidia said gross margins will rise nearly 4 percentage points in the July quarter. Analysts expect the company's earnings per share to rise 30% over the next 12 months, compared with 6% for a basket of 11 other chip companies.'
And Nvidia's smaller competitor, Marvell, also benefited from investors' attempt to get their grabby hands on some of the AI fortune. Marvell's CEO came up with a striking prediction:
'Given the speed at which AI infrastructure is evolving, the technology is renewed within 18 to 24 months, compared to more than four years with standard infrastructure.'
In other words, we're going to earn ourselves crazy from this technology because it's going to be written off much faster by the customer.
7.6% price gain for Bitcoin is a joke compared to Marvell's 45% and Nvidia's 26% rise. It's still investing for those with a strong stomach.
Marvell shares rose as much as 45% over the past week, even more than Nvidia, which climbed 26%. Since January 1, Nvidia shares rose as much as 176%, compared to 25% for the Nasdaq. The GPU makers' results are especially extreme when compared to my 'traditional' Spotlight 9, which includes the largest tech companies, the two dominant crypto stocks and the Dow Jones and S&P 500 as representative of the largest companies. Even Bitcoin rose 'only' 7.6% this week. Plenty of Bitcoin fanatics will gloat that their favorite currency is not called BitcAIn.
