Tag: Mistral.AI

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AI crypto technology

Google in total panic by OpenAI, fakes AI demo

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

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

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

Google under great pressure

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

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

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

Fake Google video

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

The challenged Gemini video

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

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

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

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

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

The line between exaggeration and fraud

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

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

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

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

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

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

Trust in Google damaged

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

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

Google's brand equity and market leadership are based on the trust and credibility it has built by trying to honestly provide answers to our search questions. The company whose mission is to 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.

Other short news

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

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

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

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

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

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

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

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

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

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

Categories
AI crypto technology

European answer to OpenAI is 4 weeks old yet raises €105 million without product 

A historic moment for a European startup, an easy-to-use crypto wallet, Apple's revolutionary interface and more understanding of Nvidia.

It was a historic round of investment: never before has a European company raised so much money in a first round of investment. Just four weeks (not years) young Mistral AI, not to be confused with the 1980s Swiss surf brand of the same name, raised €105 million this week from a group of investors from Europe and the US. After this investment, Mistral.ai is worth as much as €260 million, although the former investor in me thinks that with over 40% of the company, the founders have actually already sold too much of their shares in this first round.

From 0 to €260 million worth in a month: Arthur Mensch's Mistral.ai

The co-founder and CEO of Mistral.ai is named Arthur Mensch, has 3 years of work experience and, always fun to check out, 0 photos and 64 followers on Instagram. The other founders are Timothée Lacroix (CTO) and Guillaume Lample (Chief Scientist). The gentlemen are all early thirty-somethings and knew each other from college. Mensch worked at Google Deepmind and Lacroix and Lample are ex-Meta employees.

Up front: people with names like that I begrudge everything. This is the level of Athos, Porthos, Aramis and D'Artagnan - the four musketeers, for the culture barbarians among us. I must confess that some sense of envy came over me when I read that these noble European knights entering the AI battlefield against the foul-mouthed Americans of Open AI, Google and Microsoft, raised over 100 million with a website with no more than 40 words. This is even more remarkable than Worldcoin, which raised $100 million with a 1-page website.

There was not yet a budget for a graphic designer at Mistral.ai

Even in the wonderful world of crypto, in the good old days of say two years ago, for that kind of money you had to publish at least an eight-sheet white paper. But how can these modern-day Asterix, Obelix and Panoramix raise that kind of money without having a working product? Because the first working model is not expected until next year.

One of the gamblers, excuse investors in Mistral AI seem mostly concerned with convincing themselves that this is not a blind 'all on red' guess was:

"There is a pool of 80 to 100 people worldwide who have the level of experience that they have. Right now, for better or worse, the capital requirements in compute and top talent make [launching an AI startup] a pretty capital-intensive game."

Time will tell if this small group of high potentials has sufficient business acumen and leadership qualities.

Rishi Sunak proudly on the cover of The Economist, but Barack Obama would never pose as a mannequin from Are You Being Served

British Prime Minister Sunak proved again this week that he couples a big mouth with a limited sense of reality, always a cozy combination. He referred to the United Kingdom as the Unicorn Kingdom, the land of billion-dollar tech companies. That's like the prime minister of Belgium declaring that Disney World is a far cry from Bobbejaanland.

French President Macron, of course, was already on a stage with Mistral-CEO Mensch, and the Financial Times cooed "Europe's Got Talent. I've never worried about the talent in Europe, but I do worry about the lack of corresponding doekoe. Somehow I'm glad that European countries are calling out this kind of silliness and finally daring to invest serious sums of money in key early-stage companies.

But let's compare with the US for a moment. There, $25 billion has already been invested in AI companies this year, compared to $4 billion in Europe. Earlier I wrote that it is often forgotten that OpenAI alone has $11 billion in investment money.

The Register says it well: there is panic in Europe, there is a feeling that something must be done and this kind of buck-passing is the result. But it now feels like too little and too late. Because €105 million is Keuken Kampioen Divisie level in the AI sector, and OpenAI is playing Champions League. Still, our French friends deserve all the support they can get, because Mistral AI has announced that it is embracing open source, which would make their technology many times more accessible to developers than OpenAI, which is not closed in name only.

Meanwhile in blockchain

In all the AI violence, you would almost forget that there are some very interesting developments taking place in crypto in relative silence. Co-founder of Twitter Jack Dorsey and his company Block (formerly Square) have announced BitKey, an app that allows people to manage their own Bitcoin, in partnership with Coinbase and Cash App (a kind of expanded Tikkie). BitKey users will be able to transfer Bitcoin directly to each other on all six continents this year, without the need for a bank. This could become the model for crypto use, management and payments worldwide. You can sign up for the beta test here.

Meanwhile, the Biden administration is trying to stop the spread of crypto. The key question is whether crypto, or some of its crypto variants, are actually securities. In the famous 1946 Howey case, the court ruled that "an investment of money in a common enterprise with profits derived solely from the efforts of others," is a type of security called an investment contract.

That narrow definition of securities would make a large portion of all crypto-currencies securities and thus all crypto exchanges, such as Binance, Coinbase and Kraken, would be subject to the same laws as regular exchanges. The lawsuits against Binance and Coinbase will take years, just as the SEC's case against Ripple has dragged on for years.

The renowned American investment company Andreessen Horowitz (among others, Facebook, Airbnb, Pinterest, Slack, Instacart, Robinhood and Coinbase) is not waiting and is opening its first international branch in ... London. The main argument of this top vc is that the UK government will introduce legislation allowing decentralization. Jack Dorsey's BitKey, mentioned earlier, is an example of such a decentralized product (digital assets held in-house, rather than at a bank), as well as decentralized crypto exchanges where traders transfer directly to each other rather than through an intermediary, as is currently the case on mainstream exchanges.

Apple talks about Spatial Computing

I had started writing about why Apple never uses the words AI and virtual reality, because I hadn't read anything about them. And then yesterday, Marques Brownlee came out with this excellent video in which he explains, razor thin and better than I can, why Apple never uses words over which it has no control.

Point being, the new Apple Vision Pro is interesting not so much as a product that breaks open a whole new category, like the iPhone or the Apple Watch, but that it represents a whole new form of interacting with the computer. Users of the Apple Vision Pro can select something with their eyes and snap their fingers to "click" on it.

Sensors on the front of the glasses register what your fingers are doing. This interface is revolutionary, similar to the transition from MS-Dos and those awful text commands with green letters on a black screen, to mouse scrolling and clicking like Apple Macintosh and Microsoft Windows later made commonplace.

Former journalist, now investor, Om Malik says of this handling of a computer:

'Just as the "mobile computing" initiated by the iPhone eventually turned out to be just "computing," what Apple calls "spatial computing" will turn out to be the natural evolution of computing.'

Legendary investor Fred Wilson (Twitter, Kickstarter, Etsy) sees a combination of AI, blockchain and spatial computing emerging:

"The combination of advances in computer science in machine learning (MF: AI), decentralized systems (blockchains) and new forms of interaction with computers (chat interfaces, heads-up displays, voice, etc.) represents the most powerful cocktail of innovation I have ever seen.

Not entirely coincidentally, AI, blockchain and spatial computing are the three topics in this newsletter today. I am a big fan of Wilson's irregularly published newsletter and hereby recommend it again.

Notable links

  • 7 Chat GPT plug ins you need to know, or not? I looked at them but I don't get excited about them. What am I missing? And which Chat GPT plug ins are better? I'd love to hear it, email your suggestions!
  • Reddit in trouble Why it can be dangerous as a business to depend too much on volunteers and the much-vaunted 'community' around your platform.
  • Bill Gates does tea with Xi Jinping It is good to keep an open line of communication with a rival, so now that the U.S.-China relationship has fallen below freezing, there is nothing wrong with Bill Gates having tea with his friend Xi Jinping. Notable point in the Reuters article: Among other things, Gates was praised by Xi Jinping for sending $5 million to China to help fight Covid, even though China did have enough money to spend 1.7% of GDP, a sloppy $230 billion, on the armed forces. It's just where your priorities lie.

Spotlight 9: BlackRock with Bitcoin ETF and Nvidia deserves better analysis

A fine week in the tech world, with Nvidia once again the standout.

It was a positive but calm week in the stock markets for tech stocks.

It was a positive but calm week in the stock markets for tech stocks. It seemed surprising that Bitcoin did not fall, despite the SEC continuing to repeat that the entire crypto sector is not playing by the rules. This is arguably nonsense, as even a deaf-blind illiterate can see the difference in policy between, say, Coinbase and Binance when it comes to fighting money laundering and unregulated trading.

The news that the world's largest asset manager BlackRock, with just under $10 trillion (10,000 times a billion) under management, is about to apply to the SEC for a license for an investment product in Bitcoin led to a slight rise in Bitcoin and great enthusiasm among Bitcoin believers. Technically, the trust BlackRock is setting up is not an ETF, but the effect is the same: investors, if approved by the SEC, which has so far rejected all ETF applications, can buy an investment product from BlackRock that shadows the price of Bitcoin, without having to go through all the hassle of a normal purchase of Bitcoin.

So you don't have to create an account on a crypto exchange, buy hardware wallet, manage 24 passwords for your seed phrase etc, unless you are brave enough/moral enough to let someone else manage your Bitcoin. If BlackRock gets approval for this investment product, investors worldwide, from small to large (think pension funds) will buy it, which will bring a sharp rise in Bitcoin. But it is still a long way off.

According to Bloomberg's ETF specialist Eric Balchunas, at least statistically, BlackRock has a very good chance of getting approval from the SEC, as it previously saw 575 applications approved and only one rejected. Coindesk studied the application in detail and saw that BlackRock included a "surveillance-sharing agreement" between exchanges, which could avoid market manipulation, a major problem in Bitcoin trading.

Meanwhile, there is already a parody account on Twitter of the BlackRock Bitcoin ETF and whoever the creator of this account is, this person is patently an insider because extremely knowledgeable about all the regulation. Frequently repeated disclaimer: I have great appreciation for the decentralized aspect of Bitcoin and think the only eight-page Bitcoin white paper is genius, but do not own Bitcoin and think it is too technically outdated because unnecessarily carbon-producing. That said, Bitcoin's impact on the global economy is similar to the oil business: you don't have to be a fan of it to realize it's important.

Nvidia is years ahead

Ever since newsletter reader Boudewijn Jansen of iXora pointed me to Nvidia a few months ago, I started following the company more closely, and as of last week, Nvidia has even secured a permanent spot in my completely arbitrary Spotlight 9, the nine investments that determine economic sentiment in the tech world, based on market value.

At the Asian Tech Summit last week in Singapore, I had the pleasure of joining the other speakers for lunch with Nvidia's Keith Strier, responsible for AI partnerships. Annabelle Droulers of Bloomberg and I were trying to better understand why Nvidia plays such a crucial role within all AI developments and how big a lead Nvidia actually has, that the company is worth a P/E ratio of over 200 (!).

Strier explained in detail what he already briefly described here. The core lies in the fact that Nvidia makes not just the chips, but the entire infrastructure required to develop AI applications. Chip companies that want to compete effectively with Nvidia must not only build a similar AI chip, but also develop a software ecosystem around the chip that speeds up the application development process for developers.

And the components for that infrastructure are finite, which is why Nvidia is already receiving orders for deliveries 5 years from now:

'This is about compute, not just chips. AI requires a highly specialized compute infrastructure, a combination of hardware and software. Most importantly, the supply is finite. [...] NVIDIA GPUs (the chips, MF) are more than gold, they are the "rare earth elements" of AI.

Therefore, the world's most advanced AI companies are raising capital to secure the delivery of accelerated computing. Whether an enterprise or even a country, it is important to plan and budget for the computing power that will be needed to achieve and sustain leadership in AI.'

Strier is referring to the fact that Nvidia has more orders than it can deliver and that companies and even countries have been placing orders years in advance to ensure longer-term deliveries.

Meanwhile, Nvidia's lead does not seem to be limited to their "stack" of hardware (especially the GPUs) and software, but the company provides complete data center solutions, making it even more difficult for competitors to catch up.

The day before yesterday, Morgan Stanley announced it was selling shares of chipmaker AMD and raising its price target for Nvidia from $450 to $500. NVDA's closing share price Friday was $427.

It seems as if, despite all European efforts, the AI world of hardware, software and applications will be dominated by the Americans for at least the next few years.