Once upon a time, the acronym FANG (for Facebook, Apple, Netflix and Google) was the symbol for tech stocks. But almost unnoticed, Broadcom snuck into the club of trillion-dollar companies, and now there is a new acronym: BATMMAAN (Broadcom, Apple, Tesla, Microsoft, Meta, Amazon, Alphabet, Nvidia). Barron's came out with an excellent analysis including a price comparison. What does it show? Nvidia is the cheapest stock of the bunch.
BATMMAAN stock performance in the last year: up 66% on average.
Forget FANG, here's BATMMAAN
This is especially noteworthy since Nvidia was already by far the best-performing stock among the tech giants over the last year. Propelled by the AI hype, Broadcom (symbol AVGO) is also coming on strong, while Tesla is mostly driven by members of Elon Musk's cult.
The entire BATMMAAN club made an average return of 66% last year. In fact, Apple and especially Microsoft are doing substantially worse than the S&P 500, which has proven to be a solid investment at 25%. Both icons are suffering from the AI hype: Apple because it derives no identifiable revenue or profit benefit from AI and Microsoft because it is making tens of billions in additional investments in AI, the long-term returns of which investors doubt.
Return of top cryptocurrencies: 174%
Investors with a strong stomach have had a wonderful year in the crypto world, where the average rise of the largest crypto currencies measured by market cap, has been a whopping 174%.
The most frequently asked question in crypto remains: which coin should I buy? But the largest crypto currencies were already doing 174% year-to-date.
In addition to the rise of memecoin Dogecoin, carried in part by Doge fan Elon Musk, it is particularly notable that XRP, a Stone Age token by crypto standards, rose over 450%. Trump's upcoming presidency ensures that a new SEC boss will be appointed, following notorious cryptohater Gensler. The hope of XRP holders is that under the new administration, the SEC will end the ongoing legal proceedings against XRP.
Please participate as happily as this reader and complete the short survey about this newsletter. Who knows, maybe it will help! Image: generated with Midjourney.
This week I'm asking for your help via a survey about this newsletter. Also: a look at Bitcoin's jump above the $100,000 mark, Ethereum and the start of altcoin season, Hawk Tuah girl is in trouble, AI applications to watch out for and crypto gifts for the holidays.
You ask, we deliver
Well, maybe 😉 After almost two years and eighty newsletters with what I used to send to friends and colleagues completely subjectively, it's time to gauge which topics are found most and least interesting. Therefore, I invite you to fill out this short survey, which takes less than two minutes. The main results will be shared next week. The last question allows for suggestions, comments and statements. The survey is anonymous, but if you appreciate it, I am happy to include your name and LinkedIn profile in valuable feedback.
Bitcoin over the $100,000 mark and back again
It is always enjoyable when something huge happens in an area that the BBC heartily dislikes but has to report on. Think of Max Verstappen winning the world title and thwarting Briton Lewis Hamilton's record.
With the face of a spoiled child being served Brussels sprouts and chicory, the reporter filed this report, about the moment Bitcoin became worth more than $100,000 this week. Most media only report the investment risks, but have been completely overlooking some crucial elements of Bitcoin for years.
What is unique about Bitcoin is that it is a completely decentralized network with no central party controlling the number of coins in circulation, so unlike a system with a central bank. As a result, there is also no "crypto-bank account", but you have complete control over your own assets.
How important that is, Netscape founder and investor Marc Andreessen explained in Joe Rogan's podcast through a detailed explanation of the concept of being "debanked;" what happens when you lose your bank accounts and credit cards as a person or company without any explanation. This has happened to many entrepreneurs in the fintech and crypto world in recent years. More and more people worldwide, and not just in undemocratic countries, therefore value self custody of their assets.
Big difference between 2018 and 2024
The often-quoted brilliant Jennifer Zhu Scott recalled last week a panel she participated in at the 2018 World Economic Forum in Davos, when Bitcoin first took its place on the main stage. Zhu Scott debated with Nobel prize winner Robert Shiller and a top executive from Sweden's central bank:
"At the time, coming out openly for Bitcoin was a career risk. But I believed in the ideal. I understood its powerful implications for the world and chose to champion it. Many of the ideas I shared six years ago have become reality.
Bitcoin has disrupted gold more than the dollar.
Smaller countries have begun to include Bitcoin in their national reserves.
Bitcoin wasn't going anywhere-it embodied the ideal of decentralization, and that ideal remains incredibly powerful.
While the rise of Bitcoin has been extraordinary, the ecosystem has evolved in ways I had not fully anticipated:
Decentralization vs. Centralization: Bitcoin was born from the ideal of decentralization. Today, however, the ecosystem is becoming increasingly centralized, with figures like Michael Saylor exerting excessive influence.
The Obsession with Price: Six years ago, I argued that price was the least important aspect of Bitcoin; its real strength lay in decentralization. Yet Bitcoin is now seen as an asset and the conversation is almost entirely about price movements.
I am proud to have been one of the early pioneers in this field. Thanks to Satoshi Nakamoto's revolutionary vision, we have witnessed the birth of countless breathtaking projects aimed at enabling scalable decentralization. In an era where AI is consuming our data, creating deepfakes and undermining trust, I am grateful for the emergence of Web3 technologies-those offering solutions such as data sovereignty, immutability and authentication. These tools provide a counterbalance in a world increasingly defined by unchecked digital power.
To those who rejected the picture I painted eight years ago: I smile today. Bitcoin's journey is far from over, and this milestone is just the beginning of what is possible."
From Davos to Hong Kong
The debate, in which things got especially feisty between Zhu Scott and Schiller, can be seen here. In retrospect, it is downright scandalous to see how crypto was portrayed in a certain light at this conference, where supposedly free exchange of ideas takes place.
First of all, the panel was called "The Crypto Asset Bubble." That is especially hilarious when you consider that the price of Bitcoin at that time was $11,000; so anyone who had bought Bitcoin at that time would have seen that investment increase in value nearly tenfold within seven years. Do me a bubble like that more often!
But the text with which the moderator introduces Bitcoin really defies all standards of decency: "Bitcoin emerges from the world of nerds and criminals." As a half nerd, I then always think, "what if you replace the word 'nerd' here with Jews or Asians?" Suddenly the same sentence is a lot less acceptable.
By the way, 2018 was the last time I attended the World Economic Forum. Next month, the media will again report in full on the party in the mountains, which I wrote about earlier:
"Participants reported that the number of women they encountered in Davos was as high as the number of MMA fighters at the annual Women's Hairdressing Day. Women are almost as rare during WEF as dark-skinned people. Like motorcyclists on a Sunday ride or penguins in a zoo, I caught myself in Davos politely waving back or nodding to other fellow pigmented people.
A week later, no WEF participant can remember what else was discussed or agreed upon, because unlike the COP climate conferences, for example, Davos is not about jointly formulating measurable goals. There is old-fashioned networking and job hunting.
Because I am sorry to disappoint the conspiracy thinkers, but there is no talk at WEF of world domination by a small, ruling elite at the expense of the common people; there is not much thought about the future at all. WEF excels mainly in zizagging into the future, looking in the rearview mirror - with glasses dipped in the cheese fondue."
In fairness, the "Swiss network effect" was very useful to me personally. I got to know Zhu Scott just before WEF at a crypto conference in St. Moritz, after which I concluded through her appearance on the panel with Schiller that she has a special gift of being able to position her immense knowledge of even the most intricate technical details, within global trends and developments.
Zhu Scott was kind enough to spend a few hours in Hong Kong a few months later to tutor this rather useless Dutchman on decentralization and blockchain. In my experience, this accessibility and willingness to share knowledge is more often seen in the crypto world than in the traditional IT sector, not to mention the financial world.
By investors worldwide, including those from the traditional financial industry, Bitcoin has been accepted this year as an investment product that is best compared to investing in gold: it is not used as a means of payment, but as a long-term investment. That is why it remains striking that if you look at the market with a view over five years instead of five minutes, Ethereum has appreciated more than twice as much as Bitcoin.
Indeed, if we compare the performance of the two largest crypto currencies with that of the three most valuable companies in the world, it appears that Ethereum has even outperformed stock market darling Nvidia. That's not saying it will be the case again in the next five years, but it's still interesting to keep in mind.
Christmas season? It's altcoin season
When Bitcoin's price rise has been very rapid, as it has been in recent months, it is usually a matter of time until some profit taking happens and the proceeds from that sale of Bitcoin are invested in other cryptocurrencies: altcoins.
That happened last week, when many altcoins peaked, including BNB, Dogecoin (DOGE), XRP and Chainlink (LINK). In the previous cycle, in 2021, altcoins outperformed Bitcoin for nearly five consecutive months.
In the crypto world, it's not Christmas, but altcoin season. Source: Coinmarketcap.
The question, of course, is which sectors within cryptocurrencies will benefit the most from the upcoming altcoin season. To the frustration of all sincere blockchain developers, at the moment it seems especially all meme coins, all crazy coins without any underlying value, will benefit the most.
Hawk Tuah Girl goes crypto
She was world famous for a few days this summer: Haliey Welch, better known as hawk tuah girl. Last week she was accused of involvement in large-scale scams by releasing a coin called HAWK that became worth nearly half a billion dollars in a short period of time, after which it collapsed completely(91% drop).
Now, few will have expected the same stringency of monetary policy from Ms. Welch as from Alan Greenspan, but this was pretty ugly. Stephen Findeisen, better known as YouTuber Coffeezilla, was quick toexpose the so-called rug pull. But also completely unknown or random people can issue tokens, even kids.
Teenager makes meme coins
"On the evening of November 19, art adviser Adam Biesk was finishing work at his California home when he overheard a conversation between his wife and son, who had just come downstairs. The son, a kid in his early teens, was saying he had made a ton of money on a cryptocurrency that he himself had created.
At first, Biesk paid little attention to it. He knew his son was experimenting with crypto, but the thought that he had made a small fortune before bedtime seemed far too unlikely. "We didn't actually believe it," Biesk says. But when the phone started ringing incessantly and his wife was inundated with angry messages on Instagram, Biesk realized that his son was telling the truth-albeit not quite the full story."
In an excellent article, Ars Technica explains how and why Pump.Fun appears to be a new home for anyone looking to quickly release their own meme coin. The method is simple: the potential profits with meme coins are always coupled with immeasurable risks. Only suitable for the gambler with a strong stomach.
Interesting crypto categories
As every week, I want to emphasize that I am not providing investment advice, but these appear to be interesting categories of cryptocurrencies:
Real world assets (RWA): These are cryptoprojects that represent tangible, physical objects, such as gold, real estate, art or commodities that are "tokenized." By converting these into digital tokens, they can be more easily traded and managed, while ownership is transparent and verifiable in the blockchain.
AI tokens(which may or may not actually have anything to do with AI): This refers to crypto projects that capitalize on the theme of artificial intelligence, but do not always actually incorporate substantial AI technology. Some projects attempt to actually integrate AI applications, such as "smart contracts" with machine learning functionality, while others simply use the term "AI" from a marketing standpoint.
DePin or DePIN (Decentralized Physical Infrastructure Network): This is a blockchain-based model for decentralized management of physical infrastructure. This could include networks for Internet access, energy or mobility, in which the infrastructure is not controlled by one central body. Imagine: Uber with only drivers and customers, with no central organization taking 20-30% of revenue.
Venture capital firm Andreessen Horowitz published a nice overview yesterday of what it believes to be promising sectors in 2025.
Short news
Tesla is buoyed by Musk's bromance with President Trump, but Ethereum also rose strongly this week.
Tesla, Ethereum, Amazon and Meta are the winners of the stock market week, which actually had no losers. Yes, the S&P500 lagged behind tech stocks and crypto stocks, but the risk profile is also lower. At 28% up, the S&P500 is having a phenomenal year. Especially compared to savings accounts...
"It can be helpful to agree on a 'proof of humanity' word that your trusted contacts can ask you," Near wrote. "Should a strange and urgent voice or video call from you come in, this can help them confirm that they are really talking to you and not a deepfake/deepcloned version of you."
When someone suggested this on X last year it may have seemed far-fetched, but now the FBI advises families to put together their own secret password, or security phrase. When scammers and criminals then try to impersonate a member of the family over the phone, for example a supposedly lost child asking her parents to send her money quickly, the family password or security phrase can be used to verify who is on the line. My guess is that many families will choose to use phrases from popular movies as security phrases, such as from Harry Potter or Home Alone.
As many as 87% of all startups that participated in Y Combinator's program, which ends with a pitch to investors, were AI-related in some way. But while the focus is mostly on consumer applications, the greatest use of AI is actually taking place within enterprise environments. Techcrunch advises companies to look closely at CTGT, Galini, Raycaster and HumanLayer.
Most analysts overestimate energy demand and underestimate technological advances. That is the gist of an argument by The Economist, which has looked at estimates of the global cost of an energy transition to a carbon-free world made by various economists, consultants and other researchers-the kind of estimates that are routinely used as the basis for policy.
These estimates range from about $3 trillion a year to nearly $12 trillion a year, huge sums. But these figures are grossly exaggerated. The good news, according to The Economist, is that the energy transition is going to be many times cheaper.
I don't claim to put all of the suggested products on my wish list myself, but you'll agree that this description of a Christmas gift does grab attention: "the Chipped Social Nail Set includes NFC-equipped nails that can connect to blockchain experiences and crypto wallets, creating an interactive way to show off your crypto style. It's the perfect gift for the bold, stylish crypto fanatic in your life." How did we ever live without NFC nails connecting to your crypto wallet?
There are currently three major trends in technology driven by technological, as well as sociological and political currents: AI, crypto and carbon removal. These groundbreaking developments, like any major innovation, are received with skepticism, a pattern that has been evident for decades.
PC: "too expensive and useless"
In the 1980s, when the personal computer emerged, personal computers were mostly seen as too expensive for a device without many relevant applications. That quickly changed thanks to price reductions and standardization of software, after MS-DOS became the world standard thanks to a sophisticated licensing model by Microsoft. The word processor and spreadsheet quickly made the PC indispensable in the office.
Internet: "too difficult and dangerous"
In the 1990s, this pattern repeated itself with the Internet. The personal computer was seen as a work tool, not a potential mass medium. Bill Gates even declared that the Internet suffered from lack of standards, it was insecure and far too complicated, which is why he did not use the word Internet even ten times in his book The Road Ahead.
Bill preferred to talk about the information super highway, which he was going to build himself with the closed MSN, which we never heard anything more about. Yet within a few years, email, the Web browser and applications such as eBay, Amazon and Google made the Internet accessible to consumers.
In the Netherlands, it took until late 1996 for the NOS Journaal to understand that the Internet was about to become a serious mass medium, although Joop van Zijl still compared computer penetration to that of the microwave oven.
Smartphones: "only for representatives"
When the iPhone hit the market in 2007, the Blackberry reigned supreme in the business market. Although most of the population in developed countries already had a cell phone, often a Nokia, criticism of the iPhone was not muted. "Too expensive, only useful for sales representatives," was the verdict of a friend from the world of IT. Incidentally, the same chap who ten years earlier judged the cell phone as "only useful for drug dealers," a common sentiment.
Microsoft CEO Steve Ballmer laughed off the iPhone in a video in which, as he was taught by PR people, he quickly switched to promoting the company's own Windows Mobile which we also never heard anything more about. It makes CEO Satya Nadella's feat of completely revitalizing Microsoft after Ballmer all the more galling, but about that another time.
AI, crypto and carbon removal on the turn
Right now we are seeing the exact same patterns as before, but now about AI, crypto and carbon removal:
AI is often dismissed as useful for work, but without useful applications for consumers.
Crypto is criticized with comments like, "Name an application." Meanwhile, the first application lies in something as basic as redesigning the banking system, with each user managing their own account and making banks obsolete. Apparently, the significance of this is missed by many. Tip: Never get into an argument with people who were too lazy to read the Bitcoin white paper but have an opinion.
Carbon removal is often characterized as a fraud, referring to familiar examples such as inefficient cooking ovens, without knowing or understanding the complexity and potential of projects that do actually remove carbon from the atmosphere, such as ocean fertilization. This kind of removal of carbon from the atmosphere is the biggest task facing the world in the coming decades. Tip: Never engage in climate change discussions with people who were too lazy to read the summary of recent IPCC reports.
Admittedly, I have a personal fascination with how innovations break through or fail. That's why both my 1993 graduate thesis and my 2001 book were both called "In Search of the Holy Grail," although some weirdo photoshopped the cover of my book which, by the way, is still on sale in large numbers. And not because of its great success.
I learned more from Megamistakes than Megatrends. Everyone knows Rodgers' adoption curve, but it remains mysterious why one innovation catches on and another flops mercilessly. For carbon removal, crypto and AI, there are several key success factors, some of which I want to highlight.
CO2 success was not during COP29
Breakthroughs in carbon removal require political will. All media were focused on the COP29 climate summit in Baku, but in the meantime, successes were being made in Brussels and Washington in the fight against climate change.
In Brussels, the European Council approved the creation of the first EU-wide certification framework for permanent carbon removal, carbon farming and carbon storage in products. This voluntary framework is intended to create a certification system that can quantify, monitor and verify carbon removals and counteract greenwashing; carbon farming. The EU's adoption of the new rules marks the last major legislative step to give the green light to the creation of the new certification framework for carbon removal.
Now in Dutch: standards are being introduced that will allow companies and citizens to actually offset their carbon emissions, and not by planting or preserving flimsy forests, but by measurably reducing CO2 emissions or even better, removing CO2 from the atmosphere.
Democrats and Republicans together for carbon removal
In the United States, a bill was introduced by Senators Lisa Murkowski (Republican, Alaska) and Michael Bennet (Democrat, Colorado) seeking to expand carbon removal subsidies for a wide range of technologies intended to permanently remove carbon dioxide from the air and seas.
The bill is unlikely to be passed by the current Congress yet due to time constraints, but its introduction indicates that subsidies for carbon removal will be expanded even under President Trump. The fact that the bill was introduced by senators from both parties, a rarity these days, is hopeful.
AMCs for CO2
In coming years, watch for the term Advanced Market Commitment (AMC), explained here by the Economist: no matter how the political winds blow, the pressure from society for decarbonization is so great that smarter companies are independently seeking to remove or minimally offset their own carbon footprint, by funding techniques that remove carbon for the long term; preferably forever. Salesforce, Google, Meta and Microsoft are just the first from a long list of companies that will fund AMCs.
As another example, it was announced last week that Planetary Technologies has removed 138 tons of CO2 through "Ocean Alkalanity Enhancement (OAE)," which, by adding minerals or substances, increases alkalinity, the ocean's capacity to absorb CO2e, with the goal of sequestering CO₂ and combating climate change. Buyers of the associated carbon removal credits were Shopify (96 tons) and Stripe (42 tons) under a "pre-purchase agreement. In Scrabble, you don't put it easily, but it really exists and will be used a lot.
Old school tech compared to AI and crypto
Stock market valuations are a reflection of market expectations, and the enthusiasm around AI and crypto shows that investors have confidence in their longer-term potential. I have created four virtual "baskets" that I have posted about before:
'MANAAM': the old school tech companies
Spotlight 9: the nine I believe to be leading tech investments
AI Spotlight 9: nine companies benefiting from AI
Crypto Spotlight 9: the biggest nine cryptos measured by market value
Old school tech MANAAM: +36%
In the broader tech sector, established players continue to dominate. At one time investors were fans of the term FANG (for Facebook, Apple, Netflix and Google, as if Microsoft meant nothing), but let's take the "MANAAM" group consisting of Meta (formerly Facebook), Apple, Microsoft, Amazon, Alphabet (formerly Google) and Netflix. The average increase in shares of this now classic little club this year is a whopping 35.9%. That's phenomenal from an investment perspective, until you consider that the S&P 500 is also up 27.19% this year.
Spotlight 9: +63%
Microsoft(14%), Alphabet(22.28%) and Apple(27.84%) are not even outperforming the index. While investors buy tech stocks for the higher price appreciation, compensating for the higher risk.
Not a buy recommendation, but indicative: the Spotlight 9 is +63%
However, those who had bought the Spotlight 9, which consists of the major tech companies and the two largest crypto currencies Bitcoin (+119%) and Ethereum (+57%), would have already seen their investment portfolio rise 63.37% this year. Compared to the MANAAM, Netflix is missing from the Spotlight 9, while Nvidia (+187%) has obviously been added as the world's most valuable technology company.
AI Spotlight 9: +76%
The valuation of AI-driven companies such as Nvidia, which play a key role in the development of AI infrastructure, has reached record highs. This shows that the market recognizes the speed at which these AI-powered companies are seeing their results soar.
Despite AMD, Gigabyte and Super Micro, the AI Spotlight 9 does as much as + 76%
Since Nvidia is already included in the Spotlight 9, I left out the market leader in my also completely arbitrary "AI Spotlight 9," consisting of nine companies that I suspect AI will allow them to grow faster than the leading large tech companies (the MANAAM group) and perhaps even faster than the Spotlight 9.
With 76.11% growth, that is certainly the case this year, with it being entirely remarkable that this increase came about despite Super Micro (which saw the auditor go the distance), AMD (-1%) and Gigabyte, hardware parties that did not keep up with the growth of the rest. Software company Palantir (+305%), which I wrote about in early November, more than makes up the difference.
Crypto Spotlight 9: +191%
Since the approval earlier this year of Bitcoin ETFs, tens of billions have already flowed from the traditional investment world toward crypto. The wait was for the moment when the "alt rotation" would begin, the moment when more money flows into other cryptocurrencies than Bitcoin, which counts as the unofficial kickoff of "altcoin season.That moment occurred yesterday, when the Ethereum Spot ETF net inflows, outpaced those to Bitcoin.
Crypto Spotlight 9: +191% and this does not include memecoin.
So the real daredevil is now stepping big into the craziest coins that often have no underlying value at all, but that is as risky as putting everything on red or black in a casino. A less risky strategy, insofar as that is possible in crypto, is to spread out in the biggest cryptocurrencies and take advantage of overall sentiment.
The "Crypto Spotlight 9" consists of the largest crypto currencies measured by market value, excluding stable coins, memecoins (crypto giblets) and tokens linked to crypto exchanges such as BNB.
That group, listed alphabetically as Avalanche, Bitcoin, Cardano, Ethereum, Solana, Stellar, Toncoin, TRON and XRP, achieved a 191% increase so far this year. So is this a buy recommendation? Absolutely not.
What I do recommend to anyone active in technology and innovation is to look into AI, carbon removal technology, blockchain and crypto-currencies. Just like in the 1980s with the personal computer, the Internet in the 1990s and the smartphone 15 years ago, these are developments that are unstoppable worldwide.
A practical way to stay informed is to then invest a bit in those sectors, with my advice being to do so only with money you don't need for rent, mortgage or other daily concerns. Even within technology and crypto, it certainly pays to look closely at what the intended investments actually involve; what does Palantir actually do, is Ethereum threatened by Solana and SUI; and isn't it funny to take a small gamble on memecoins after all?
Anyone who puts in some money will start to inform themselves. The alternative is to write a weekly newsletter about tech and innovations, but that also requires a huge ego.
Warm regards, thanks for your interest and see you next week!
A dystopian worldview of tropical trees and machines to remove carbon on the polar cap. Image created with Midjourney.
As Bitcoin approaches the hundred thousand dollar mark and Nvidia makes record profits, another topic deserves attention this week: COP29, the UN climate conference in Baku. In the technology and crypto world, the climate discussion is often seen as set in an alternate universe of stubborn school objectors and shag-smoking hippies wearing leather sandals in hemp pants. Yet that is where the greatest technological challenge of our time plays out: how does humanity remove the CO₂ already present in the atmosphere?
Days after COP29 was due to end, two agreements were reached in the extension: an agreement on a far too low amount that rich countries will pay to poor countries for compensation for damages suffered($300 billion seems like a lot, but is far too little for this problem) and an agreement on the general rules for launching carbon trading markets, better known as carbon credits, almost a decade after the idea was first proposed.
The carbon trading mechanism was first formally described in the COP21 Paris climate agreement in 2015, as a way for polluters to pay other countries to reduce emissions on their behalf. But it has proved controversial because of concerns that it will not result in the promised removal of carbon from the atmosphere.
Rich countries responsible
Poor countries are right when they accuse rich countries of not bearing enough responsibility. Since the industrial revolution, mainly Western economies have contributed to the emission of over 2,200 gigatons of CO₂, triggering global warming.
At the same time, poorer countries, often located around the equator, bear the brunt of climate change. Extreme heat waves, droughts, floods and more powerful hurricanes cause deaths, famines and destroyed infrastructure, especially in vulnerable countries. It was therefore to be expected that a group of poorer countries would leave the climate conference furious, as happened yesterday.
Rich countries are therefore obliged both to combat warming and to compensate for the damage done to poor countries. That leads to the questions of how much to pay, on the one hand, in compensation and, on the other, in investing in solutions that prevent global warming.
Climate activists are partly right
Climate activists argue that the only solution is to immediately stop using fossil fuels, the largest source of carbon emissions, and that limiting them is crucial to prevent further warming.
Moreover, they stress that investing in renewable energy is cheaper in the long run than repairing the damage caused by climate change. Quitting fossil fuels also offers important health benefits, such as reduced air pollution and lower medical costs. According to climate activists, immediate action is essential because every ton of CO₂ avoided reduces the likelihood that the temperature increase will exceed the critical 1.5-degree limit.
These demands are logical and justifiable, but completely ignore the fact that an immediate transition to a completely fossil-free world is not realistic. Of course, stopping CO₂ emissions as soon as possible is eminently important, just as stopping the faucet is useful when you want to drain a swimming pool.
But even if humanity were to stop all CO₂ emissions from tomorrow morning, it "only" means that no fifty gigatons of CO₂ emissions would be added annually; but even then, the historical burden of 2,200 gigatons in the atmosphere would remain unchanged. Without removal of that CO₂, warming will continue to exceed the 1.5-degree limit, with all its consequences.
Annual CO2 emissions compared to CO2 already in the atmosphere. Source: Tracer
I've been working at the intersection of sustainability and technology for almost a decade now, and I'm still looking for the first meaningful plan from an environmental or climate activist that shows a plan of action for the removal of that 2200 Gigatonnes. The only repeating sound is "stop emissions and plant forests. But that's not realistic and it doesn't make enough progress.
Fossil fuels still necessary
It is both economically and technically impossible to achieve a completely carbon-neutral world within a few years. Fossil fuels are the backbone of the global economy and are unfortunately still indispensable.
Renewable energy is growing rapidly but cannot yet fully meet current global energy demand. In addition, means of transportation such as aircraft, ships and trucks remain largely dependent on fossil fuels.
Low-income countries rely on cheap energy sources such as coal to enable their economic growth, making a sudden transition to renewable energy especially complex for them.
Moreover, in many regions, the infrastructure for renewable energy is not yet sufficiently developed to be widely deployed. Abruptly stopping fossil fuels would therefore lead to economic instability, massive unemployment and energy poverty, especially in the vulnerable countries most under pressure.
In Asia, for example, people react with dismay to arguments, mainly from Europeans, that canonize the train as a mobility solution: of course it is a fine alternative to air travel within Europe, but how do you take the train between the thousands of islands in Indonesia and the Philippines? Not to mention a commuter train between, say, Sydney and Hong Kong.
Five billion Asians don't want a cargo bike
It is often forgotten in the West, but Asia has nearly five billion inhabitants compared to about seven hundred and fifty million Europeans and less than four hundred million inhabitants of North America. You wouldn't begrudge your worst enemy a cargo bike ride across a rolling rice field in forty degrees and eighty percent humidity, would you?
During the first day of COP29, a major breakthrough was announced in the area of carbon credits, the common term for carbon credits where one carbon credit equals one thousand kilograms of CO₂ emissions. This system allows companies, as well as countries such as Singapore and Peru, to pay for projects that avoid, reduce or remove emissions.
In Baku, agreement was reached for the first time on a very vague standardization of these credits, described by the Financial Times as a kick-start for the carbon credit market, increasing transparency and reliability. But years of further detailing (read: negotiation) will be required before a functioning global system can emerge.
Differences between carbon credits crucial
Without better standardization and quality control of carbon credits, all kinds of fraudulent projects and junk credits will remain in circulation. Because there are three totally different types of carbon credits that need to be properly distinguished from each other:
Reduction Credits: these reduce CO₂ emissions, such as by implementing more efficient technologies. Think solar panels or wind turbines. Fine to do, but why does emitting less CO₂ deserve a bonus in the form of carbon credits?
Removal Credits: these are credits issued for actually removing CO₂ from the atmosphere. This is the necessary Holy Grail.
For example, Direct Air Capture uses machines to extract and store CO₂ directly from the air. This solution is still very capital intensive, and the question is whether it is the most efficient technique, measured by energy consumption and capital requirements.
Reforestation offers natural absorption of CO₂, although it comes with risks such as deforestation. For example, forest fires are still frequent, precisely because of global warming, and not all forests turn out to be planted as expected. In addition, they often turn out to be less effective than hoped and expected.
Biochar converts biomass into stable carbon that can be stored for centuries, while Ocean Alkalinity Enhancement treats oceans so they can absorb more CO₂. The greatest potential is most likely in these types of methods used by the oceans, such as that of the Dutch SEA02.
Overview of carbon dioxide removal (CDR) technology. Source: Tracer
Carbon removal credits fund crucial technology
Because while climate activists see all carbon credits as a license for companies to continue their emissions, the role of removal credits is invaluable. These credits make it financially possible to develop the aforementioned technologies, see the example of Microsoft and Royal Bank of Canada, so that those 2200 Gigatonnes of CO₂ can actually be removed from the atmosphere.
Environmental movements are focused on ethics and activism and lack the ability to assess technological innovations, let alone the economic scalability of those solutions. A striking example of this is the rise of Tesla and the global transition to electric vehicles initiated by Tesla's success.
Example: Tesla
In 2010, no prominent environmental activist would have predicted that Tesla would become the driver of a massive shift to electric mobility. Back then, Tesla was selling less than a thousand cars a year.
Then we look at last month: 1.43 million so-called "new energy vehicles" (NEVs) were sold in China in October alone, up 50 percent year-on-year, setting a new single-month sales record. Nearly 10 million NEVs have already been sold in China this year, up 34 percent from 2023.
Of these ten million vehicles, about 60% had all-electric propulsion, or a fuel cell: that's six million new cars driving around with zero carbon emissions. This unprecedented transition was driven by market forces, technological innovation and strategic government investments(yes, including Tesla) including tax breaks; not activist predictions.
In the last five years, Tesla shares rose nearly 1500%. This shows that there is an investment model for innovative technology. Assessing the possible solutions to remove CO₂ from the atmosphere should be left as much to climate activists as to politicians busy winning votes or oil and gas company executives dreaming of their bonus at night, rather than a livable world.
Academia and the venture capital industry, especially the segment dedicated to financing technological innovations, have the specialists to make the right trade-offs. But where should the money come from for these investments?
CO₂-load possible solution
Introduction of an annually gradually increasing tax on CO₂ emissions could lead to a structural solution, provided that the proceeds of a "carbon tax" could be used to invest in CO₂ removal technology and fund a compensation fund for the poorer, hardest-hit countries.
The climate crisis requires action on all fronts. It is time for rich countries, corporations and activists to work together on a realistic and comprehensive plan that both stops emissions and repairs historical damage.
For anyone interested in this complex topic, Tracer publishes a free weekly newsletter on LinkedIn, in which, to be fair, I also contribute to.
The week's winner: Elon Musk. Image created with Midjourney.
There is already so much reporting on politics that it is usually easy to avoid the topic here. Only Elon Musk is unavoidable, including last week. First, Donald Trump appointed his new best friend Musk and fellow querulant Vivek Ramaswamy to head a Department of Government Efficiency (DOGE) to be created, an initiative aimed at reducing "bureaucratic spending." Sounds like an American version of the Ministry of Magic from Harry Potter, in a global political climate where wishful thinking has become the norm on both sides of the center.
DOGE is S3XY
Not coincidentally, the acronym DOGE corresponds to the popular cryptocurrency Dogecoin, which Musk has previously backed. Dogecoin, measured by market value the seventh largest cryptocurrency in the world, rose as much as 83% over the past week. Fans of Musk recognized in the acronym Doge the same joke Musk previously played on the naming of Tesla models that appeared chronologically as S, X, 3 and Y, but together spell S3XY.
Bitcoin reached a new "all time high" but Dogecoin rose four times as fast this week.
SpaceX and xAI raise billions
The devil sch33t on the big heap last week. as Musk's companies xAI and SpaceX raised impressive funding, with valuations of $45 billion and over $250 billion, respectively.
SpaceX, the largest privately held company in the US, is preparing for a tender offer in December in which existing shares in the company will be sold for about $135 each, according to insiders. This would value the rocket builder at more than $250 billion, up $40 billion - more than one and a half times the value of Philips, to put it in perspective - from the $210 billion during a similar deal earlier this year.
In addition, Musk's AI start-up xAI has raised $5 billion on a valuation of $45 billion, nearly double the valuation of a few months ago. Meanwhile, Musk's team's lightning-fast construction of a supercomputer on Nvidia technology spooked competitors to the point that a rival company even flew over Musk's data center in Texas to investigate what was going on.
Finally, on Friday, Tesla closed a stock market week full of declines with a 3% gain; in total, TSLA shares rose 45% last month. We can conclude that last week, both politically and corporately, the left was not winning.
Netflix live with UFC?
The boxing match between Mike Tyson and Jake Paul, streamed live on Netflix, yesterday marked the streaming platform's debut in live sports broadcasting. The match drew such a large simultaneous worldwide viewing audience that Netflix was plagued by ongoing streaming problems.
No doubt Netflix will learn from this, nor is it to be expected that there will ever be another boxing match that draws as many viewers as a fight between the elderly best boxer of all time and Mr. Leerdam. Not even if, as rumors suggest, Netflix strikes a deal with the UFC to broadcast MMA fights live for the next few years. The question is whether Apple will get more involved in live sports besides U.S. MLS matches (mainly because of Messi).
AI and Augmented Reality (AR) in your ears
Foursquare founder Dennis Crowley's new company Hopscotch Labs is developing a service that uses data in large AI systems and today's ubiquitous AirPods. It then adds smartphone functionality to provide relevant local information when someone walks past a particular location, such as a restaurant, cocktail bar or even a street corner.
As author of the article on Hopscotch, the unsurpassed Om Malik states, "It feels like a panacea for information overload. Instead of looking into a browser or constantly peeking at a phone, the information comes through our ears or other devices, such as glasses."
I continue not to believe that many people will voluntarily wear glasses, but the choice of AirPods is a very interesting variant for information transfer and Crowley always develops very nice products. Hopscotch is a startup to follow.
Microsoft organizes "bake-off" for CO2 removal
Microsoft faces a challenge to meet its goal of becoming carbon-negative by 2030, as the company has seen carbon emissions increase by more than 40% since 2020, in part due to the growth of its AI business. Microsoft therefore already invested in Direct Air Capture (DAC), where it funds startups and purchases carbon credits upfront. However, DAC is still in development and the carbon credits from DAC could quickly cost many times more than other types of carbon removal credits.
Microsoft and the Royal Bank of Canada have now committed to purchase 10,000 metric tons of CO₂ over ten years from Deep Sky, a DAC project in Alberta, Canada. Deep Sky is organizing a "bake-off" for Microsoft and inviting eight startups to test their carbon removal technologies on site. In the week when COP29 in Baku is dominated by unappearing politicians, it is notable that business is taking the lead in removing CO₂ from the atmosphere.
"Bitcoin could go to $800,000"
"There is much less selling pressure. The reality is that although people say they're going to sell at $100,000 or $125,000, when Bitcoin gets to parity with gold, that means $800,000 per Bitcoin. So I think many Bitcoin holders will hold for the long term, and we can see that in the charts. Big 'whales' with more than a thousand coins have barely moved coins to exchanges this year." Thus crypto guru Meltem Demirors at CNBC.
The question is when Bitcoin's total market value will equal the size of the gold market, but the largest cryptocurrency is on its way. According to Demirors, the moment Bitcoin's market size equals that of gold, the price per Bitcoin will be $800,000. Sounds astronomically high, but so did $93,000 this summer, and that highest price ever was smoothly reached this week.
2024 is a bizarre stock market year: the S&P 500 is rising faster than Apple, and despite all the hype, Bitcoin has risen less than Nvidia and Palantir.
"This will enable a future in which we can realize the many consumer benefits we are excited about: giving people ownership of their digital identities, new revenue models for creative creators, cross-border transactions with stable coins at low to no cost, new ways for small businesses like restaurants to connect with their customers, the emergence of decentralized social networks, the development of physical infrastructure like energy grids, and blockchains that democratize AI and games - and much more we can't even imagine right now."
Still doesn't sound fascinating, but maybe the enthusiasm will come when those blockchain-based products hit the market. Andreessen Horowitz urges crypto entrepreneurs to get started already. Under President Biden, all crypto was lumped together while notorious scammers like Sam Bankman-Fried of FTX were not given a leg up. Clear regulations will have to lead to new, better crypto projects.
Private chefs in Silicon Valley lash out
Customers who only drink the first sip of a can of Coke, or tea that has to be boiled and cooled in three stages and then drunk half lukewarm: private chefs in Silicon Valley experience the craziest things with customers who don't know the difference between a truffle and an apple pie - as long as it's expensive and inconvenient.
It was a remarkable week in the tech world. The US presidential election kept tech companies quiet on the PR front, while Trump's victory created speculation about what this means for technology and innovation policy. One thing is clear: Elon Musk has a new role as President Trump's tech supremo.
In this edition, I share the news items that stood out: from space cowboys and crypto to AI and an extraordinary story about cancer self-treatment. But most of all: lots about Palantir, the absolute winner of the week.
Is Trump for nuclear-powered data centers, crypto and AI?
From fairly unexpected quarters, because we don't usually have to be in the conservative data center sector for a broader view, came this excellent analysis from Data Center Dynamics on what the tech and innovation sector can expect under Trump. From AI to crypto, chips and space; pretty much everything is covered.
Trump leads to 4 billion tons of additional CO2 emissions
Add up the annual emissions of the EU and Japan, or take all the emissions of the one hundred and forty least emitting countries in the world, and you have the additional emissions the US will produce in 2030 from Trump's election, Carbon Brief calculated earlier this year. It's twice as many emissions as all the savings from renewable energy worldwide in the last five years.
Science editor at the Volkskrant Maarten Keulemans nevertheless hopes for an alternative climate course that is not based on the Paris climate agreement, for example through initiatives that do not come from the government. That's an interesting thought also espoused by Blue City Solutions, the independent group of freethinkers I support in developing private initiatives against climate change.
"Saddle up, space cowboys"
Chances are that Elon Musk is going to make major reorganizations and cutbacks at his great adversary NASA, in his role as presidential adviser. That his company Space X is profiting from this is, of course, entirely coincidental.
OpenAI has a hardware bazin
Caitlin Kalinowski is the former head of augmented reality glasses projects at Meta. On Monday, Kalinowski, CK for intimates, reported in a post on LinkedIn that she will lead robotics and consumer electronics at OpenAI.
In late September, OpenAI leaked that CEO Sam Altman would be working with Apple legend Jony Ive on an "iPhone for AI," whatever that might be. With Kalinowski starting at OpenAI, the question is how her work will relate to OpenAI's project with Ive. Kalinowski and Ive know each other well, as she previously worked at Apple on Macbook hardware during the time Ive was Chief Design Officer there under Steve Jobs. Will OpenAI come with glasses, a mobile device or something entirely new?
Palantir beats Nvidia
Almost silently, Palantir snuck into the S&P 500 last month. The software company of Peter Thiel and Alex Karp, always surrounded by a fog of secrecy, rose a whopping 252% on Wall Street this year, even more than Nvidia.
Nabeel Qureshi, former developer at Palantir, wrote a fascinating story about his time at the data analytics company. It is highly recommended for anyone working in the field of innovation. It starts off right away, when Qureshi quotes an interview with CEO Karp about his unique approach to job interviews:
"I like to meet candidates without any information about them: no resume, no preliminary interviews or job description, just the candidate and I in a room. I ask a fairly random question, something that has nothing to do with what they would do at Palantir. Then I watch them parse the question and see if they recognize how many different ways there are to look at the same thing. I like to keep interviews short, about ten minutes. Otherwise, people move on to their learned answers and you don't get a good picture of who they really are."
In ten minutes you won't go into depth about your time as praeses with the corps, your family life or your hobbies, so that already gives a pretty good indication of the atmosphere and focus at Palantir.
Not FTE but FDE
Interestingly, according to Qureshi, Palantir is organized around two types of developers:
developers working with customers, also known as FDEs, forward deployed engineers.
developers who work in the core product team on product development, PD-ers, and who rarely visit customers.
FDEs work "onsite" at customer sites three to four days a week, resulting in a tremendous amount of travel, highly unusual for software developers at a Silicon Valley company.
The goal of this approach is to gain in-depth knowledge of business processes in complex industries (such as healthcare, intelligence, aerospace, etc.) and then use that knowledge to design software that actually solves the problem.
The PD developers "productize" what the FDEs build. In other words, they convert the FDEs' custom work into standard products, developing the software that in turn helps the FDEs do their jobs better and faster on subsequent projects in the same industry. Qureshi spent nearly a year in France at Airbus, so Palantir learned what kind of products the aerospace industry needs.
It is an original approach that stands midway between the customization the big IT consulting firms claim to provide (cough) and the "one size fits all" approach of traditional ERP companies.
'Whatever you want Ben'
A piece of venture capitalism to the people: top investor Ben Horowitz donated money to the Las Vegas Police Department, which , at his request, used it to buy drones from a supplier in which his company invested. The manufacturer obviously made good money on this order, in a modern variation of vest-pocket-via-police-breast-pocket.
Companies want employees back in the office. What's really going on?
In a podcast, The Verge discusses with two experts the true reasons why many companies want their employees back in the office. It's not just cutbacks in disguise, hoping people will quit. Surely many companies value team building and expect higher productivity in the office.
Nvidia passes $3.6 trillion market value mark
Wall Street expects Trump to roll back the Biden administration's restrictions on AI development, which caused Nvidia to overtake Apple via the right as the world's most valuable company.
The market values of the top three are now as follows:
Microsoft: $3.14 trillion
Apple: $3.43 trillion
Nvidia: $3.62 trillion
NVDA shares rose 206% this year. It is not a PLTR, but remains highly exceptional for a company of this size. In the last five days, Microsoft, Apple and Nvidia rose 3.1%, 2.6% and 7.6% respectively against a 41.8% rise for Palantir. With that, Palantir rose even much harder than the cryptos, of which so much was expected by investors and speculators.
The occasion was the excellent quarterly figures, which showed that Palantir's sales were up 30% compared to the same quarter last year. Profits even increased by 101%. Palantir achieves an operating profit of almost 20%, compared with 15% at Salesforce, for example, whose revenue grew by only 8%.
The nine largest crypto currencies by market value rose after U.S. election
Where cryptocurrencies were expected to go through the roof after Trump's victory, the rise for the volatile crypto world still remained relatively modest. Bitcoin established a new high but stabilized reasonably.
Cardano's rise stands out in this chart, but it is deceptive: ADA's share price rose "only" 28% over the last year so this was a correction rather than a breakout. On average, the largest crypto stocks rose 16% last week.
There is justice: memecoins did worse than a real company like Palantir
So were the biggest gains in those silly speculative coins of dogs (with or without hats), or frogs and other goofy things? No, because the biggest memecoins rose "only" 12% last week.
Anyone who unexpectedly ends up at a circle birthday party or in a soccer canteen this Sunday with bleating monkeys orating about bizarre price gains on memecoins can arm themselves with the knowledge that the largest memecoin, Dogecoin, rose 198% last year.
Nice and all, but the world's most valuable technology company, Nvidia, which unlike memecoins actually develops unique technology and is therefore much less susceptible to speculation, rose 214% in the last year. Stand there, with your pink cake or your cheese dice in your hand bragging about Dogecoin.
Palantir, up 252% this year, is on a huge rise; from $15 at the beginning of the year, the share price rose to $58 last Friday. This of course raises the question of whether, with a stratospheric P/E ratio of 295, the company will be able to maintain this appreciation.
Peter Thiel, co-founder of Palantir, could use some help in this regard from his friends in the White House; for Thiel has been so invited to not only follow Trump's lead early on, he is also a mentor and friend of new Vice President JD Vance.
Scientist treated her cancer with viruses she developed herself
Happy to end this week's newsletter on a positive note, with the extraordinary achievement of someone who did this entirely on her own: virologist Beata Halassy says in Nature that self-treatment worked and was a positive experience - but researchers warn that this is not something others should try.
Halassy, a virologist at the University of Zagreb, successfully treated her own breast cancer by injecting the tumor with laboratory-grown viruses, sparking a discussion about the ethics of self-experimentation.
Halassy discovered in 2020, at age 49, that she had breast cancer at the site of a previous mastectomy. It was the second recurrence at that site since her left breast had been removed, and she did not want to undergo another round of chemotherapy under any circumstances.
After an extensive literature review, Halassy chose an unproven treatment and administered herself a treatment called oncolytic virotherapy (OVT) to treat her own stage 3 cancer. She has now been cancer-free for four years.
Thanks for the interest and see you next week!
Michiel Frackers
The English version of this newsletter appears here on LinkedIn.
This newsletter does not contain investment advice but only a personal opinion based on knowledge, experience and self-aggrandizement.
Last week two developments came together that will shape the global technology picture in the coming years. First, OpenAI launched new products with which it is attacking Google and Microsoft head-on. The AI market is exploding for both consumer and business use, with the adverse consequence of correspondingly increasing energy consumption and carbon emissions.
Perhaps precisely because of these rising carbon emissions, developments in "Climate Tech," the umbrella term for all technology that combats climate change, also seem to be accelerating. Bill Gates even calls 2024 the year when climate tech has finally broken through.
OpenAI now direct competitor of Google
OpenAI last week launched "ChatGPT with Search," a feature that allows users to retrieve real-time, up-to-date information directly in their conversations. This search functionality, integrated into the existing ChatGPT interface, is currently available to paying users and will soon be available to everyone.
Rather than a separate product as in a separate app or separate Web page, the search feature in, for example, the Chrome browser allows ChatGPT to automatically consult Web resources when relevant to the question being asked. Users can also manually activate search themselves to find specific information.
ChatGPT's search feature offers additional interactive features, such as displaying maps with place markers for recommended locations and displaying current stock prices and news articles. With each search, users can open a sidebar with clickable resources to access the original articles or data.
OpenAI states that collaboration with Microsoft Bing and media partners such as the Associated Press and Reuters ensures that the information provided is accurate and reliable. These collaborations also mitigate legal issues surrounding "data scrapping," as OpenAI gains authorized access to data through these partners.
New: ad-free current information
This new search offering helps OpenAI with a new focus on reliable up-to-date information, which is especially important in sensitive topics such as elections, where reliable information is essential. In doing so, ChatGPT avoids the use of ads or sponsored links, a big difference from Google Search, which, on the contrary, generates most of its revenue through ads.
Instead, OpenAI is focusing on providing an independent user experience that will have to be funded from subscriptions. While it will continue to be possible for free users to take advantage of the search feature, we can expect limits on the number of free searches.
So Bill Gates enthusiastically headlined in the annual report of his investment company BreakThrough Energy: 'The State of the Transition. Climate tech has arrived.' According to Gates, 2024 will retrospectively prove to be a pivotal moment in the fight against climate change, reminding him of the period around 2000 when large-scale decisions were made to combat infant mortality.
At the time, millions of children in South Asia and Sub-Saharan Africa were dying annually from preventable diseases, despite the fact that vaccines and drugs often already existed. However, these drugs were difficult for poor countries to access, although they were stockpiled in richer countries. Through the use of a global health network, which produced and made available vaccines and drugs, child mortality fell by 50 percent within 20 years. This progress was possible by scaling up existing innovations and developing new methods, for example, in the fight against HIV and malaria.
Meanwhile, more and more technologies are being developed that are effective in reducing greenhouse gases. The next big challenge, however, according to Gates, lies in implementation: scaling up these technologies within the economy. Although large companies have mastered this scale well, until now they have often been reluctant to invest in clean technologies. They saw them primarily as ways to reduce their carbon footprint and contribute to the environment, without seeing them as a source of value to their own operations. In short, focusing on sustainability did not lead to higher profits.
According to Gates, however, this has begun to change since 2024 and there has been a major shift in the perspective of investors and companies. Large global investors-such as foundations, sovereign wealth funds and infrastructure investors-are finally starting to invest seriously in climate technology. Top business executives are also increasingly understanding that climate tech offers more than just environmental gains; it can strengthen their companies and use their capital more efficiently. Let's hope Gates is right.
200 grams of yellow powder as effective as a tree
Half a pound of this yellow powder removes as much carbon dioxide from the atmosphere as a tree does in a year. Source photo: Zihui Zhou, UC Berkeley.
Gates said global fight against man-made climate change. California alone will need to capture or remove about 100 million tons of carbon dioxide annually - roughly equivalent to pollution from 250 gas-fired power plants - to meet its ambitious climate goals, including achieving carbon neutrality by 2045.
It seems as if innovative techniques for this removal of carbon dioxide are now becoming known on a weekly basis. For example, researchers at the University of California at Berkeley, have developed a new covalent organic framework (COF) that significantly improves the direct air capture (DAC) of carbon dioxide.
This material, a deep yellow powder, efficiently absorbs CO₂ from ambient air without degradation by water or other contaminants, a common problem with existing DAC technologies. The COF functions like a sponge, trapping CO₂ until it is saturated.
It can then be regenerated by heating, releasing the CO₂ for storage or reuse, and then reused for further collection cycles. Remarkably, 200 grams of this material can remove about 20 kilograms of CO₂ per year, comparable to the absorption capacity of a mature tree!
Technological tools can reduce CO₂ emissions and even remove existing emissions from the atmosphere. Source: image created with Midjourney.
This kind of innovative technology is many times more effective than planting trees, which appears sympathetic and is more understandable to the layman. The big question is whether the growth in investment in climate tech predicted by Gates will come in time to combat accelerated climate change, as recently predicted by the UN.
Investing in AI or climate tech?
A strange paradox thus arises: how does investing in climate tech compare with investing in AI? It is obvious that the financial results of investing in climate tech will take at least five to 10 years. Only companies whose CEOs look ahead longer than their own annual bonus will structurally try to become carbon neutral or even carbon negative, such as Microsoft.
The average increase this year of these companies propelled upward by AI is a whopping 119%. Even the accountant-less Super Micro is down only 9%. Source: Google Finance
lucrative. See my completely arbitrary and subjectively compiled AI Spotlight 9, which is not financial advice, but attempts to paint a measurable picture of a visible trend.
The average share price increase this year of these companies propelled upward by AI is a whopping 119%. Interestingly, software company Palantir is experiencing higher share price appreciation than chipmakers such as AMD, Arm and Broadcom. But note that market leader Nvidia is not included in this list because Nvidia is already included in the overall tech-grade gauge Spotlight 9. By comparison, Nvidia shares are already up 181% this year, versus Palantir 153%.
In the short term, only memecoins are more lucrative than AI stocks. It is to be hoped for the world that Bill Gates is right and that there are enough investors who look a little beyond short-term returns. I myself will be at the particularly interesting Business & Philanthropy Forum in Singapore over the next few days, where the very idea of combining for-profit investing with the pursuit of a better world is being attempted. Hopefully I will be able to share some positive news next week.
Just because the last few weeks were so often about Sam Altman of OpenAI and Elon Musk of Donald Trump, I was working on a newsletter with totally different topics. But then so much extraordinary happened in a few days that I still have to conclude that Elon Musk is underrated and Sam Altman is overrated.
Amid all the media frenzy about the rascals of the tech world, we would almost forget that two people also regularly featured in this newsletter, George Hinton and Demis Hassabis, have both won Nobel Prizes. Still, again, now focus first on Musk and Altman.
Musk and Altman opposites
The strange thing is that every mention of Musk evokes sharp reactions, with half disagreeing with me on principle because Musk is said to be a reactionary racist, while the other half find the achievements of his companies undervalued: either you hate the person, or you love his achievements. Whatever you think of the person; last week it became clear once again that Elon Musk ranks as a lone innovator.
OpenAI is seen by most people, whom I conveniently describe as laymen, as a uniquely innovative company led by a mysterious genius in the person of Sam Altman. But just last week it was revealed that OpenAI is built on a shaky foundation, because not only is its position so weak financially that billions will have to be raised again in the capital market in a few months, but OpenAI's revenue and any future profits are mostly disappearing into the pockets of a happily watching Microsoft.
Musk and Altman are opposites. Altman does everything in his power to be taken seriously by the establishment; just ask his own ChatGPT anything about Altman and you will be inundated with an anthology that is hardly based on fact. According to ChatGPT, Altman isn't walking on water just yet, but it doesn't make much of a difference, and the fact that he hasn't succeeded yet is mostly due to the water.
It's the reason I deliberately didn't report anything about the robots last week, because clearly this silly gimmick served to get more publicity for Tesla. All goofiness from Musk that distracts from actually special achievements of his companies. And those accomplishments are plentiful.
A giant device caught between two Mikado sticks. Source: BBC
Reusable Starship
Because what almost gets snowed under is that although there are now other players in space exploration such as Blue Origin and Rocket Lab, nothing comes close to what SpaceX has achieved in terms of reusable space technology. The BBC explains in this video why Starship rocket reuse is so important.
The bottom line is that reuse greatly reduces the cost of space travel, but developing reusable rockets in particular is extremely complex. That's why no other party has yet succeeded. On images, the SpaceX Starship does not look so imposing, but the rocket weighed 3.5 million pounds when it landed, eight times as much as a full Boeing 747. The Starship is also all but six feet as tall as such a 747 is long. In short, a huge behemoth was caught between two Mikado sticks on the very first attempt.
It therefore makes sense that SpaceX was awarded an eight-launch contract worth $733 million by the U.S. Space Force on Friday, as part of a program designed to promote competition among launch providers.
Super data center in nineteen days
Then another mega-success for Musk that went underexposed. If anyone knows about AI and data centers it is Jensen Huang, CEO of Nvidia, which became worth $3.4 trillion on Tuesday. It is second only to Apple 's ($3.57 trillion) world's most valuable company and, I keep repeating, it is a matter of months, not years, until Nvidia becomes the world's most valuable company. Last week, Huang said this about what Musk's team managed in nineteen days:
"And first of all, recognition of achievement where it's deserved. From the moment of concept to a data center ready for NVIDIA to have our equipment there, to the moment we turned it on, had everything plugged in and it did its first workout. So that first part, just building a huge plant, liquid-cooled, powered, in the short time it was done, I mean, that's like superhuman.
Yes, and as far as I know, there is only one person in the world who could do that. Elon is unique in his understanding of engineering, construction and large systems, and mobilizing resources. It's incredible. Of course, his team of engineers is extraordinary. The software team is great. The networking team is great. The infrastructure team is great.
Elon understands this deeply. And from the moment we decided to start, the planning with our engineering team, our networking team, our infrastructure and computing team, the software team, all the prep work, then all the infrastructure, all the logistics and the amount of technology and equipment that arrived that day, and NVIDIA's infrastructure and computing infrastructure and all that technology, to the training: in 19 days."
Huang is going full on the organ here about a big customer, let that be clear. Yet we should also put that in perspective: the total order value of what Musk's Companies X and Tesla have ordered from Nvidia is estimated to be between $4 billion and $5 billion. A huge sum, but Nvidia turned over an average of $326 million in sales per day in the last quarter, so it's about roughly ten days to two weeks of sales. There are larger customers that Huang does not extol so much, and his respect for Musk is heartfelt.
Climate and health care need Musk
Starship and the new data center are two examples of Musk's unique talents. I have written it many times: precisely because Musk is so uniquely able to get huge projects successful that combine mechanical engineering with software development, it would be great if he used his talents and his ability to combat global warming.
Developing technology to remove CO2 from the atmosphere is complex and expensive; two adjectives Musk knows how to use. Instead of spending his talents preparing another planet, his attention is desired to save our current one. We'll take those silly tweets at face value.
" The close partnership between Microsoft and OpenAI is showing signs of wearing out. The "best bromance in the tech world" has undergone a reality check as OpenAI has sought to change its agreement with Microsoft and the software maker seeks to reduce its dependence on the start-up."
Unpredictable training costs: OpenAI emphasized that training costs are not fixed and can be adjusted in the future. The company spends about $3 billion a year on training but excludes these costs when presenting profitability, which raises questions. The way OpenAI's newer models work may shift some of the traditional training burden to inference, making future training costs difficult to predict. Despite possible cost-saving techniques, OpenAI's focus on developing larger models will likely involve high training costs.
ChatGPT as a revenue source: Contrary to expectations that OpenAI's API would generate the most revenue, the company expects ChatGPT to be the main revenue source until at least 2029. OpenAI is betting on the continued growth of conversational AI and offers different versions of ChatGPT for different markets, such as business and education. However, ChatGPT's long-term success depends on how much user interest in AI interactions increases.
Significant payments to Microsoft: OpenAI is already paying Microsoft large amounts from revenue, despite not yet making a profit. A projected $700 million payout to Microsoft in 2024 highlights the financial burden of the partnership, on top of the already high costs of AI development.
Future funding needs: Despite raising $6.6 billion, projected losses of $5 billion in 2024, and possibly $14 billion in 2026, indicate that OpenAI will likely need to raise capital again soon. This raises questions about the sustainability of the business model and whether investors will continue to be willing to support such high expenditures.
Geoffrey Hinton is one of the leading thinkers and critics of AI. Source: Nobel Prizes.
Nobel laureates Hinton and Hassabis vs. OpenAI
It will happen to you that your biggest competitor and your biggest critic win a Nobel Prize in the same year. It happened to Sam Altman of OpenAI when Demis Hassabis and George Hinton both won a Nobel Prize, Hassabis for chemistry and Hinton for physics. In an interview with the Nobel Prize website, Hinton made a comparison between the fight against global warming and the regulation of AI.
"I think it's quite different from climate change. With climate change, everyone knows what needs to be done. We have to stop burning carbon. It's just a matter of the political will to do that. And big companies that make big profits don't want to do that. But it's clear what needs to be done.
Here (at AI, MF) we are dealing with something where we have much less of an idea of what is going to happen and what to do about it. I wish I had a simple solution, that if you do this, everything will be fine. But I don't have that. Especially with regard to the existential threat of these things getting out of control and taking control, I think we're at a kind of turning point in history, where in the next few years we have to figure out if there's a way to deal with that threat.
I think it's very important now for people to work on the issue of how we maintain control. We need to do a lot of research on that. I think one of the things governments can do is force the big companies to put a lot more of their resources into security research. So that, for example, companies like OpenAI can't just put security research on the back burner."
In addition to Hinton's lashing out and Kantrowitz's rather deadly analysis, Altman was joined by news that former OpenAI CTO Mira Murati appears to be working on her own startup, for which she is sourcing talent from OpenAI.
Interpreting innovation remains difficult
Analyzing all recent developments, it appears that the much-hyped OpenAI is in increasingly difficult waters. The friction with Microsoft makes the headlines almost daily. Meanwhile, amid all his pottering, Elon Musk is building infrastructure he can enjoy for years to come, both at SpaceX with the reusable Starship and with X and Tesla in the new super data center. I don't bet, but if I did, I would never bet against Elon Musk.
The announcement of a major funding round in the tech world is often accompanied by a clichéd photo of a group of men in light blue shirts and the occasional rebel in a black t-shirt, trying to look tough into the camera. OpenAI, in announcing its new funding round of no less than $6.6 billion, out of a $157 billion valuation, posted an abstract image without a source; probably because there is no management left except CEO Sam Altman himself.
The text was also dry by Altman standards: "This funding allows us to strengthen our leadership in AI research, increase our computing power and build tools that help people solve complex problems."
"The dawn, blah blah blah chocolate custard"
This is less prosaic than the Bouquet Series lyrics Altman recently posted on his own blog:
"We must act wisely, but with conviction. The dawn of the Intelligence Age is a profound development with very complex and extremely risky challenges. It will not be an entirely positive story, but the benefits are so enormous that we owe it to ourselves, and to the future, to figure out how to navigate the risks that lie ahead."
This almost seems like one from the oeuvre of the unsurpassed Kees van Kooten: "but enough about myself, what do you think of my hair?" Because here Altman is unabashedly trying to attach half of his own company name to a term that is supposed to mark the period after our current post-industrial era. It is, of course, rather the dawn of the TikTok era, but TikTok is not as good at PR.
OpenAI now bronze, after SpaceX and ByteDance (TikTok)
The funding round increases the pressure on Altman to live up to this high price tag, normally via an IPO. OpenAI is now worth far more than any other venture-backed company ever before at the time of their IPO, including Meta, Uber, Rivian, and Coinbase, according to a PitchBook analysis.
Funding for OpenAI only just fits the chart. Source: Pitchbook.
OpenAI is now the third most valuable venture-backed company in the world. Only Elon Musk's SpaceX, valued at $180 billion, and ByteDance, the owner of TikTok valued at $220 billion, are worth more.
Is there any competition for OpenAI?
To put it in Dutch perspective: OpenAI is worth five times as much as Philips, as much as Unilever and still only 20% less than Shell. OpenAI's competitors must look at the new funding with horror. xAI, founded by Musk, raised more than $6 billion earlier this year, but with a valuation of "only" $24 billion. OpenAI's nearest competitor, Anthropic, was valued at $19.35 billion as recently as January.
A few days ago there was brief enthusiasm in the market when Nvidia, nota bene the party that is going to earn the most from OpenAI's new funding because it supplies all the hardware under the hood of ChatGPT, introduced a proprietary Large Language Model that seemed open source, called NVLM. Unfortunately, the technology is not allowed to be used in commercial applications, making Google with Gemini the only real remaining competitor to OpenAI. Or Anthropic needs to find funders who dare to throw billions at it.
$4 billion credit facility for OpenAI
Early investors in OpenAI are obviously in jubilant spirits, including the legendary Vinod Khosla, who in this interview with Bloomberg almost even seemed to be caught smiling. Khosla: "It is the most important tool we have ever had in human history to create abundance and realize a fairer, more equitable, prosperous society."
Khosla also reported that he has used ChatGPT for more mundane tasks - from quickly learning complex material to designing his garden. The latter is especially impressive, as Khosla's garden has a mile-long beach that has been the subject of lawsuits for years.
On Thursday, it emerged that in addition to its $6.6 billion investment round, OpenAI also managed to secure a $4 billion credit facility from a number of banks. With over $10 billion, the company can go on for a while, although the question remains how far this pole reaches for the company that loses millions every day.
Mozart of mathematics
Anyone who throws around bombastic cries about AI being the savior of humanity brings criticism upon themselves. These range from substantive criticism of the quality of the technology developed by OpenAI, to the way Altman runs the company.
More and more is leaking out about how OpenAI is rushing, especially under pressure from competition from Google, to release products that are far from ready and insufficiently tested. Even before Mira Murati's unexpected departure from OpenAI, staff complained that the o1 model was released too early.
The Atlantic advocates putting aside Altman's turgid rhetoric and looking primarily at what OpenAI's products are currently capable of:
"Altman insists that the deep-learning technology that powers ChatGPT can in principle solve any problem, at any scale, as long as it has sufficient energy, computing power and data. However, many computer scientists are skeptical of this claim and argue that several more major scientific breakthroughs are needed before we reach artificial general intelligence."
Terence Tao, a mathematics professor at UCLA, is "a real-life superintelligence, the Mozart of Mathematics," according to The Atlantic. Tao has won numerous awards, including the equivalent of a Nobel Prize in mathematics, and analyzed the performance of the OpenAI-hyped o1.
Tao's conclusions are not positive for o1's math ability and even led Tao to apologize for comparing o1's performance to that of a doctoral student.
A broader analysis appeared In the book "AI Snake Oil: What Artificial Intelligence Can Do, What It Can't, and How You Can Recognize the Difference. "In it, the authors explain why organizations are falling into the trap of AI snake oil (worthless solutions), why AI can't fix social media, why AI is not an existential threat, and why we should be much more concerned about what people will do with AI than about what AI would do on its own. I haven't read the book but the reviews are positive.
OpenAI has raised almost as much funding, as the competition combined.
Reuters made this overview of funding in 2024. Adding up to over $10 billion, it especially underscores how well-funded OpenAI is, which has such an amount at its disposal due to the investment round and the banks' own credit facility.
I am sending this newsletter from Singapore, where the area around Marina Bay has been dominated for the past week by over twenty thousand visitors to Token2049, the largest Web3 event in the world. Although the conference officially ended on Thursday, some of the more than 800(!) side events are still going on. Solana even held its own event Solana Breakpoint on Friday and Saturday, when the Formula 1 weekend was already in full swing.
'Hate the game, don't hate the players.' Some pre-war marketing tactics are still current in the Web3 world
Vitalik Buterin star of Token2049
Amid the usual self-promotional talk and non-discussion, one speaker stood out: Vitalik Buterin, co-founder of Ethereum. Buterin emphasized that Ethereum, once plagued by slow and expensive transactions that prevented mass adoption, can now perform large numbers of transactions quickly and cheaply.
Buterin then overshadowed the content of his own speech by breaking into a song. Still, it was an engaging and rare human moment at an otherwise marketing-dominated event.
It remains painful to see top athletes such as Lando Norris and Max Verstappen sit on panels with their crypto sponsors. McLaren is sponsored by crypto exchange OKX while rival exchange Bybit is a major contributor to Red Bull Racing's immense budget.
Verstappen and Norris had to answer hard hitting questions such as "is teamwork in Formula 1 as important as in business". It would be nice if for once Verstappen would answer: 'how nice that you asked, those other 900 employees of the team are just goofing around and I actually do everything myself; I put the stickers on the car myself the night before a race, pump up the tires in the morning and refuel the car neatly after the race as well'.
It remains unclear whether, apart from the ego of the proud sponsor parading next to "his" driver on the podium, anyone is any the wiser from such a kind of obligatory freestyle. Other crypto-sponsors in Formula One such as Stake (Alfa Romeo), Tezos (Red Bull), Kraken (Williams) and Fantom (Alpine) were less visible.
Buterin's presentation made one curious about the film that has been released about him. Investor Fred Wilson said:
"This film is about the Ethereum blockchain and the developer ecosystem. But in reality, it's a chance to spend just under ninety minutes with Vitalik, where you learn more about him, how he lives, thinks and how he became who he is today. I've been in the blockchain business for almost 15 years. I am a fan and holder of Bitcoin. I am a fan and holder of Solana. I am a fan and holder of Ethereum. I am a fan and holder of many other protocols, tokens and communities. I am fully into all of these. But I must say that Vitalik has a special place in my mind and heart. He doesn't just talk pretty words; he lives by his beliefs and leads from those principles. He is a very special human being. And this film manages to show that in a great way."
Hopefully the film will soon be available to the general public, as at the moment it can only be seen through a complicated streaming service - which is onchain, of course.
Solana with its own phone
Token2049 covered four floors of booths and stages in the immense Marina Bay Sands convention center, but the main networking took place during the side events. For days, it was virtually impossible to eat or drink anything in the dozens of restaurants around Marina Bay, as all the hospitality venues had been rented out by companies for private events.
Although Token2049 officially ended on Thursday, Solana took over with the Solana Breakpoint conference on Friday and Saturday. Here it introduced the Seeker, a cell phone integrated with the Solana ecosystem. Linking a proprietary hardware device like a phone to a crypto ecosystem offers a new dimension to the growing diversity of Web3 applications, and in a market dominated by Apple, Samsung and Chinese phone makers, it is a very brave move. Whether it becomes successful is a question for another day.
Another theme that kept popping up during Token2049 was the increasing integration of the Web3 industry with the traditional financial sector, or TradFi. Still, the future of this arranged marriage remains unclear for now, at least until after the U.S. presidential election.
The Web3 world is openly hoping for a victory for Trump, who is more crypto-friendly than Harris. Or as one Indian-American Web3 insider said, ''I am brown and I know Trump doesn't like brown people; but he is pro-business and pro-crypto. So if he wins and helps our business grow, I'll make sure I help myself. Then we won't need Kamala." This rather cynical sentiment was quite prevalent this week.
Spotlight 9: Nvidia remains in the lead
Following the interest rate cut announced by the Fed, the stock market closed at record highs and the U.S. jobs market also did extremely well. It is interesting to end the third quarter by looking back at the performance of tech stocks in this calendar year so far.
At three quarters of 2024, the bottom line: Nvidia is not a one-day wonder
The clear winner this year is without a doubt Nvidia, up over 140%. If we look back a little further at what buying Nvidia shares would have yielded exactly one year ago, the chipmaker's success is even more eclatant. A $4,351 investment in 100 shares of Nvidia a year ago would be worth $11,338.71 today, which is an incredible gain of $6,987.71.
Again, I repeat it almost every week, I don't give financial advice, but I also don't want to shy away from what I think is an inescapable conclusion: Nvidia can hardly go wrong in the coming years because the demand for its products will remain high as long as the AI hype among the big players like Microsoft, Google, Meta, Amazon and Oracle continues.
Only when the world's biggest tech companies begin to doubt the return on their investments in AI, will Nvidia have a harder time growing in revenue and profits. Until then, it is an industry leader with no direct competitor.
Meta's more than 60% increase this year should not go unmentioned. Although that is partly explained by the sharp correction last year, the ad-driven network's margins remain as high as ever.
TON fastest riser in crypto
Despite the arrest of Telegram founder Pavel Durov, Telegram-affiliated TON has been a phenomenon this year, with 144% increase
Total3, an index that tracks the market capitalization of the top 125 cryptocurrencies, excluding Bitcoin and ether (ETH), was up 5.68% since the announcement of the rate cut. In contrast, Bitcoin's market capitalization rose only 4.4%.
The success of TON, which today stands for The Open Network but evolved from Telegram Open Network, continues to be linked to the growth of Telegram. A whole ecosystem of "Telegram Mini Apps"(TMA) is now emerging around Telegram that enable all sorts of applications, from gaming to fund raising, from which the TONcoin benefits.
Today the exciting week in Singapore concluded with the always spectacular Formula One Grand Prix at the Marina Bay circuit. As an opening act for Lando Norris and Max Verstappen, 30 Seconds to Mars (with multi-talented Jared Leto) and Kylie Minogue performed, while after the race Lenny Kravitz demonstrated how to stay cool in leather pants in 90 degrees and almost 90% humidity. All in all, it was a fantastic week.
