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Twijfels over AI, Zuckerberg in opspraak en droomstad Neom nog fata morgana

Het is niet duidelijk of het aan de wisselende prestaties ligt van techbedrijven of aan de wereldwijde onzekerheid over handelstarieven en de tegenstellingen tussen de VS, Europa, Rusland en China, maar er is een abrupt einde gekomen aan de hosanna-stemming in de techwereld.

De vriendelijke AI-agent voor kinderfeestjes. Beeld gemaakt met Midjourney.

Gedreven door een stroom aan AI-toepassingen hoopten beleggers op een nieuwe innovatiegolf, vergelijkbaar met de opkomst van de pc in de jaren tachtig, de doorbraak van internet in de jaren negentig en het wereldwijde gebruik van de mobiele telefoon begin deze eeuw: baanbrekende technologie die nieuwe markten creëerde en tegelijkertijd de productiviteit verhoogde.

Groeiende twijfel over AI

Er ontstaat steeds meer twijfel of de belofte van kunstmatige algemene intelligentie (AGI) de komende jaren zal worden ingelost, terwijl de enorme verliezen van AI-ontwikkelaars zoals OpenAI de vraag oproepen of er een winstgevend business model voor dit type bedrijven bestaat.

‘De enorme investeringen in opschaling, zonder gepaard te gaan met verdere innovatie, hebben mij altijd al zinloos geleken,’ zegt Stuart Russell van de Universiteit van Californië, Berkeley in New Scientist. ‘Ik denk dat ongeveer een jaar geleden voor iedereen duidelijk werd dat de voordelen van traditionele opschaling hun plafond hadden bereikt.

Met opschaling doelt Russell op het gooien met meer hardware naar het probleem, waarvan mede door de opkomst van DeepSeek wordt betwijfeld of het de beste aanpak is. Desondanks zijn technologiebedrijven van plan om de komende jaren gezamenlijk naar schatting een biljoen dollar, duizend miljard, uit te geven aan datacenters en chips om hun AI-ambities te ondersteunen. De hype rond AI-technologieën verklaart wellicht waarom liefst tachtig procent van de respondenten in een recent onderzoek onder AI-experts aangaf dat de huidige percepties van AI-capaciteiten niet overeenkomen met de realiteit.

‘What the hell are AI-agents?’

De meest recente hype die de AI-industrie probeert op gang te krijgen zijn AI-agents, een term die wordt misbruikt voor robot-stofzuigers tot “intelligente agents in AI die de besluitvorming veranderen en het situationeel bewustzijn binnen organisaties verbeteren door snellere data-analyse en voorspellende intelligentie.” Aldus iemand die rapporten over AI verkoopt, waarschijnlijk ook geschreven door AI.

In werkelijkheid heeft bijvoorbeeld Salesforce de omzetprognoses uit het product met de prachtige naam Agentforce bij lange na niet gehaald. De Wall Street Journal concludeerde dan ook: ‘AI Agents zijn overal – en nergens.’ Techcrunch, doorgaans positief over nieuwe technologie, kopte deze week zelfs: ‘No one knows what the hell an AI agent is.’

In hetzelfde artikel zeg zegt Andrew Ng, oprichter van het AI-platform DeepLearning.ai en gerenommeerd AI-expert, dat marketing een grote rol speelt bij het veroorzaken van het definitie-probleem. ‘De termen AI agents en agent-gebaseerde workflows hadden vroeger een technische betekenis, maar ongeveer een jaar geleden zijn marketeers en enkele grote bedrijven ermee aan de haal gegaan.’ Het wordt interessant om te volgen of er dit jaar nuttige en winstgevende toepassingen van AI-agents uitkomen. Wall Street lijkt niet van plan om fantasieverhalen te blijven financieren.

Woestijnstad van de toekomst nog fata morgana

Niet alleen de AI-wereld heeft het moeilijk, ook een ambitieus smart city-project als Neom, de Saudische stad als een streep van 170 kilometer lang ‘zonder wegen, auto’s of emissies,’ kampt met forse tegenslag.

De kosten zijn enorm gestegen, er zijn veel bouwvertragingen en een besluit om de eerste fase van Neom te verkleinen betekent dat de kritische massa aan inwoners ontbreekt, die nodig is om Neom tot het beoogde moderne zakencentrum te maken.

Het is jammer als Neom de enorme ambities zou terugschroeven, omdat het een fantastisch testbed leek te worden voor de beste technologie op het gebied van energie, watervoorziening, vervoer en stedenbouwkundige planning; allemaal gebieden waar de rest van de wereld grote belangstelling voor heeft.

Achter de problemen van Neom schuilt ‘een dans van wederzijdse zelfmisleiding‘, waarbij de kroonprins aandrong op fantastische plannen, volgens de berichtgeving tenminste, ’terwijl anderen daarin meegingen’. Dat lijkt verstandig, het is immers geen land dat bekendstaat om grote waardering voor tegenspraak. 

Pijnlijk boek over werken bij Facebook

Een ander geval van ‘wederzijdse zelfmisleiding’ lijkt de houding van de directie van Meta (Facebook), als reactie op een onthullend boek van voormalig medewerker Sarah Wynn-Williams, getiteld: “Roekeloze mensen: een waarschuwend verhaal over macht, hebzucht en verloren idealisme.” Uitgeverij Macmillan steunt de voormalig Meta-medewerker en weigert het boek uit de handel te halen, ondanks een gerechtelijk bevel daartoe.

Zuckerberg vestigt door de juridische acties juist meer aandacht op het boek, waarin hij wordt afgeschilderd als een emotioneel onderontwikkeld, wereldvreemd wezen. Een citaat:

‘Zuckerberg vraagt (tevergeefs) om naast Fidel Castro te worden geplaatst tijdens een diner. In 2015 vraagt hij Xi Jinping of deze hem “de eer wil bewijzen om zijn ongeboren kind een naam te geven”. (Xi weigert.) Hij onderhoudt een vriendschappelijke relatie met Barack Obama, totdat die hem op zijn plaats zet over nepnieuws.’

In 2016 plaatst Facebook medewerkers in de campagne van Donald Trump, “naast Trump-campagneprogrammeurs, tekstschrijvers voor advertenties, mediakopers, netwerkingenieurs en dataspecialisten”, waarmee ze Trump helpen winnen. Dit inspireert Zuckerberg om zelf een gooi naar het presidentschap te overwegen, waarna hij in 2017 door de Amerikaanse swing states reist.

Wynn-Williams beschrijft Zuckerbergs toespraken “zoals een kind zich voorstelt hoe een president zou klinken”. Een van Zucks uitspraken luidt: “De situatie is vol uitdagingen, en wij moeten boven de situatie uitstijgen. Omdat onze zaak nieuw is, moeten we nieuw denken en nieuw handelen.” Mocht iemand er nog aan hebben getwijfeld: Zuckerberg is geen John F. Kennedy.

‘Ik lag een deel van de tijd in coma’

De beschrijving van de werkcultuur bij Meta is misschien het meest schrijnende onderdeel uit het boek. Wynn-Williams komt tijdens een bevalling bijna om het leven, maar tijdens haar herstel wordt ze steeds lastiggevallen door haar leidinggevende. Wanneer ze terugkeert naar kantoor, krijgt ze van haar mannelijke baas een ongunstige evaluatie. “Je was niet responsief genoeg,” zegt hij. “In mijn verdediging,” antwoordt ze, “ik lag een deel van de tijd in coma.” Zuckerberg gaat nog veel last krijgen van dit boek.

2025 rampjaar voor Tesla

Ook de aartsvijand van Mark Zuckerberg, Elon Musk, beleeft zakelijk gezien zware tijden. Het aandeel Tesla blijft dalen, deels door tegenvallende resultaten in China, deels door Musk’s controversiële gedrag. Terwijl de Nasdaq Composite al een slecht jaar beleeft met een daling van 8%, krijgt Tesla in 2025 een enorme klap met een daling van liefst 38%. En het is pas maart.

2025 is een rampjaar voor Tesla, maar over de laatste twaalf maanden gezien is Tesla nog steeds een grote winnaar met 53% stijging

Tesla in laatste jaar: 53% stijging

Die -38% klinkt rampzalig, maar over een langere periode bezien, de laatste twaalf maanden, blijkt Tesla van de Big Tech-aandelen onverwacht één van de grote winnaars. Net als Broadcom (58%) heeft Tesla het laatste jaar een bijzondere stijging doorgemaakt: 53%. Dat is twee keer zoveel als het aandeel Meta van vrind Zuckerberg, de man die het bedenken van een naam voor zijn kind aan de president van China probeerde uit te besteden.

Het valt steeds meer op hoe de financiële media worden gedreven door de waan van de dag, of beter gezegd: het zapgedrag van kijkers en het (weg)klikgedrag van lezers. Uiteraard is het nieuws als een aandeel zoveel daalt als Tesla dit jaar, zeker als de CEO met een kettingzaag op een podium goochelt, maar vanuit beleggingsperspectief is een raadzaam om een langere horizon dan een paar weken te hanteren. Tesla is geen meme coin.

NFA Podcast: Beleggen in crypto vs. speculeren en Abu Dhabi investeert $2 miljard in Binance

In aflevering 7 van de NFA Podcast bespreken Nisheta en ik Ripple’s verrassende goedkeuring voor crypto-betalingen in de Emiraten, de opvallende investering van twee miljard dollar door Abu Dhabi’s MGX-fonds in cryptobeurs Binance en de bredere verschuiving in de cryptomarkt van speculatieve meme coins naar substantiële beleggingen met onderliggende waarde.

Daarnaast bespreken we het verschil tussen beleggen in crypto voor de lange termijn, versus korte termijn speculeren. We verwachten allebei nog een nieuw All Time High voor Bitcoin in 2025. Aflevering 7 van de NFA Podcast met Nish & Frackers is nu beschikbaar:

Shownotes Aflevering 7:

Bedankt voor de belangstelling, tot volgende week!

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invest technology

Tech stocks boring in Trumps first week

Tech bros were looking forward to Trump's first week in office, but the stock market was boring.

BATMMAAN shares, comprising Broadcom, Apple, Tesla, Microsoft, Meta, Alphabet (Google), Amazon and Nvidia, have shown a mixed picture in the stock market over the past week. While some companies saw slight increases in their value, others experienced declines, underscoring the volatility within the technology sector. Thus, the first week of tech and crypto-franchise Trump ended somewhat tepid.

Apple and notably Tesla, one of the companies of Trump's hypeboy Elon Musk, both fell sharply. The rest of the tech bros had no cause for great celebration either. Meta shares rose six percent, but Meta in particular, with its open source project Llama, is being hit hardest by the launch of DeepSeek. In fact, there is already talk of "panic mode" at Meta.

While you would think that Nvidia would benefit greatly from Stargate's announcement (because who else is going to supply the chips for its intended high performance computing), many investors seem to think that Nvidia is threatened by Stargate. I offer no advice and make no predictions, but with Nvidia's next quarterly earnings report, there is a good chance that investors will want to join the Nvidia party once again. 

As General Magic experienced almost thirty years ago, the right timing is crucial when introducing mass-market technology. The question is how soon it can be determined whether all the billions invested in AI will yield the intended financial and social returns. For now, we live in a reality in which Stargate's announcement seems as credible as the U.S. annexation of Greenland. 

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Forget FANG, it's all about BATMMAAN now - or is it crypto after all?

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.
 

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AI invest crypto technology

The big trends of 2024: AI, crypto and carbon removal

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!

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invest technology

Good and bad deal in Baku, Bitcoin to $100,000 and Nvidia books record profits

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 agreement allows countries and companies to trade credits for reducing carbon emissions to offset their carbon footprint.

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:

  • Avoidance Credits: these are issued for preventing CO₂ emissions, such as by stopping deforestation or handing out brick kilns in Africa. Often these projects turn out to be totally useless.
  • 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.

Categories
investing crypto technology

The week of Elon Musk, Netflix and Dogecoin

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.

Cryptomarket ready for a bull run

At top investor Andreessen Horowitz, the flags went up after the election of Donald Trump and lickety-split is looking forward to new crypto legislation:

"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.

Categories
invest technology

Elon Musk steps into self-driving Tesla, but investors back out

Elon Musk on Thursday unfolded his vision for robotic cabs and self-driving cars. Investors reacted with disappointment on Friday, and Tesla shares fell as much as nine percent. Whatever else you may think of him; Musk's long-term vision of urban mobility is becoming increasingly relevant. With urbanization, declining car ownership and working from home, a future of shared transportation, preferably on demand, is coming ever closer.

You don't buy the Tesla Cybercab for the decorative rims.
Source: Tesla video
Singapore relentlessly carless
Last week I was in Singapore for Tech Week, one of the world's most futuristic cities, where Electronic Road Pricing (bill driving) has been working just fine for years and just the permit to buy a car costs a minimum of seventy thousand Euros.

Singapore understands that a city-state of six million people simply cannot accommodate much car traffic and acts accordingly. Only 14% of the population owns their own car.

Due to various taxes and duties, the price of a small Toyota easily exceeds two tons. Old cars are non-existent, as the permit is valid for only ten years. It is hell for a car enthusiast. Public transportation in Singapore, on the other hand, is fantastic: spotless, spotlessly clean and extremely safe, with air-conditioned buses and subways that run every three (!) minutes during rush hour.

The understandable lament of a Singaporean cab driver, who sometimes pays up to a hundred dollars a day for the rental of his cab on a turnover of a hundred and fifty dollars, made me extra fascinated by the picture of the future that Musk outlined Thursday at the Tesla event "We, Robot" at Warner Brothers studios in Los Angeles. The Verge produced a six-minute recap.

Cybercab and Roboofen
The highlight was the unveiling of the Tesla Cybercab, a fully autonomous robotic cab with no steering wheel or pedals, because there is no driver: everyone is a passenger. The Cybercab is positioned as an affordable solution under $25,000, but even the most inveterate Tesla fanboy doesn't believe that price will work.
Musk introduced the Robovan with the enthusiasm with which someone introduces their new wife to their ex-mother-in-law.
Source: Tesla video

In addition to the Cybercab, Musk also presented plans for autonomous versions of the Tesla Model 3 and Model Y, with hopes that these vehicles will hit the market by 2026. (Musk himself said "expectation," but my ears translate that directly from Elon Musks to "hope.") Surprising was the introduction of the Tesla Robovan (pronounced, according to Musk: Robooofen), a small bus shaped like a clunky iron, which can seat 20 people.

Cars 6% in use

In Musk's ideal picture, buyers would "rent out" their Tesla Cybercab or Robovan to the community as soon as they don't use it themselves. Since people use their car less than 6% per week on average, the Sacred Cow would be able to recoup its investment the remaining 94% of the time.

This may sound strange now, but who remembers when cab drivers in Europe gleefully orated that Europeans would never drive their own cabs in their Prius and that even if it happened, we exalted Europeans would never get in the car with amateurs? The skepticism against a new form of transportation will disappear very quickly the moment the Cybercab shows up quickly, the rides are safe and the price is comparable or lower than that of an Uber.

Disappointment among investors

Despite Musk's ambitious presentation, investors were not enthusiastic. Among analysts, disappointment prevailed over the lack of concrete details about planning, expected costs and potential sales for Tesla.

This reluctance among investors reflects a broader problem facing companies like Tesla. Investors often base their expectations on quarterly results, whereas Musk has a long-term vision, possibly as much as 30 years ahead, to change the world with innovative technologies. SpaceX is another example of that approach.

Musk runs Tesla like a startup

What many investors seem unwilling to understand, however, is that Musk runs his companies like startups. This means he focuses on long-term growth and value maximization and often opts for short-term tactical improvisation.

This is normal for startups that have not yet found a complete product-market fit, with apologies for the crassness. In this, Musk's approach differs fundamentally from the traditional approaches of publicly traded companies, where predictable quarterly numbers set the company's course.

The last year on the stock market was painful for Tesla with 16% decline: not only did the stock perform 50% worse than the Nasdaq Composite index, but Uber rose 88%. Source: Google Finance

For many investors, this approach is difficult to accept, especially when faced with short-term losses or delays in product launches. Musk's long-term vision - aimed at a world in which shared autonomous vehicles dominate urban transportation - may ultimately bring about a radical transformation of the mobility sector.

Investors in Tesla should not whine, because everyone knows by now that buying a stock in an Elon Musk company is more like a roller coaster ride than a ride in a gently buzzing Tesla.

2050: global urbanization

Musk's vision of robot cabs should be seen within the broader framework of urbanization, a trend that will only increase in the coming decades. By 2050, it is estimated that nearly 90 percent of the population in the US, over 80 percent in Europe and nearly two-thirds of the population in Asia will live in urban areas.

This urbanization is driven by the growth of megacities, where the demand for efficient shared mobility solutions such as robot cabs and self-driving vehicles will rapidly increase. The current model of private car ownership is becoming less and less sustainable and realistic as cities become more densely populated. This is where Musk's vision of robot cabs and shared mobility can play an important role.

From parking lot to park

By introducing autonomous vehicles, cities can not only relieve their traffic infrastructure, but also create new opportunities for more efficient use of urban spaces.

One notable aspect of Musk's presentation was his vision for the reuse of urban spaces. He suggested that parking lots in cities could be turned into recreational areas because robot cabs do not need long-term parking spaces: after all, they drive continuously.

Instead, these vehicles could be summoned via apps, similar to current services such as Uber, Lyft and Grab, but without human drivers.

Car ownership in large cities declines

Car ownership in large cities continues to decline, partly due to high costs and available public transportation. In cities such as Amsterdam, only 22% of households own a car, compared with 27% in Paris.

Even in cities such as New York and London, where car ownership is higher (around 53% and 56%), private vehicles are becoming less and less necessary due to the presence of good public transportation and alternative mobility options such as ride-sharing. However, in cities such as Los Angeles, where car ownership is still around 94%, awareness of the disadvantages of private car ownership is also beginning to penetrate, especially because of traffic congestion and the high cost of parking.

American cities, unlike Singapore, Seoul and Tokyo, for example, lack good public transportation, and it is precisely then that shared car ownership, or transportation on demand as Musk suggests, could catch on even faster.

Unexpected impact of working from home 

Another important aspect contributing to the change in urban mobility is the rise of working from home. Since the pandemic, working from home has increased by a factor of five and is now a regular part of daily life for millions of workers worldwide.

This has not only led to a decrease in commuting (and thus traffic congestion), but has also impacted the labor market, especially for groups that previously struggled to find work, such as women and people with disabilities.

The number of disabled workers in the US has increased by two million since the pandemic, largely due to the ability to work remotely. The percentage of working women in the US has also increased faster than that of men, attributed in part to the greater flexibility that working from home offers in combining work and care responsibilities. These figures provide evidence that women are both working and raising children, which makes one wonder what men are doing.

Home work sometimes horizontal work

One surprising consequence of working from home, by the way, is its potential impact on birth rates. In countries in East Asia, where long working hours and intense pressure in parenting have led to declining birth rates, working from home seems to offer parents more flexibility in combining work and parenting.

This could lead to a slight increase in birth rates, with preliminary analyses suggesting that couples who work from home at least one day a week may want an additional 0.3 to 0.5 children. In countries such as Singapore, with aging populations and low birth rates, a higher number of children per family is encouraged by the government.

Shared mobility is the future

Given increasing urbanization, the rise of working from home and the rising cost of car ownership, shared mobility is becoming increasingly logical. In cities where car ownership is declining and the use of space is changing, a model of shared cars or cars on demand offers a sustainable alternative to traditional car ownership.

Of the 10 words Elon Musk utters these days, or pours out on X over us, 11 should be taken with a hefty grain of salt. But Musk's vision of robotic cabs fits seamlessly with global developments that governments will only encourage.

The success of Airbnb suggests that enough people have little problem renting out their property at the right price. There is no reason to believe this will be any different with cars - self-driving or otherwise.

Totally useless hinged doors (try this on an Amsterdam canal), but it looks nice.

Musk is likely to play a role as a forerunner with his self-driving cars, which will then be overtaken in the mass market by other players. Just as is happening now with Tesla, which faces competition from Chinese manufacturers and the traditional automakers. Waymo and Cruise are just the first. Perhaps a cause for concern for Tesla investors, but good news for everyone else.

Categories
AI invest technology

Spotlight 9: Elon Musk is everywhere, Tesla shares fall further

Elon Musk was sharp about AI: only Tesla had another bad week

Elon Musk single-handedly provides enough interesting material each week for a newsletter of his own, but last week was almost impossible to describe with a pen. Still, I make an attempt.

Tesla troubles

The stock fell again and is now worth almost a third less than on Jan. 1, while by comparison the S&P 500 is already up ten percent this year. Over eight hundred environmental activists protested in Berlin against the expansion of the Tesla factory and the mining of lithium in South America. It is unclear whether the environmental activists see the irony of protesting an electric car manufacturer, unless they see the electric cargo bike as the vehicle of the future.

Tesla competitor Waymo, owned by Google parent Alphabet, says the company now runs fifty thousand paid rides a week as a robot cab in Phoenix, San Francisco and Los Angeles. If this trend continues, it will be an interesting calculation when it becomes cheaper to take a robot cab, rather than one's own car.

Especially if the Chinese electric car manufacturers become as successful as they seem to be at the moment. Zeekr successfully went public in New York with an increase of as much as 35% on the first day, Nio is coming out with a low-cost competitor to the Tesla Y and BYD is supplying batteries for a new brand called Onvo.

Once Chinese automakers manage to develop good self-driving cars, public transportation worldwide will enter a whole new phase, just on the basis of lower costs than traditional public transportation. Just imagine: it means the end of the bus stop, instead a self-driving car will always stop at your door on demand and you get in the back seat nicely.

Musk sharp about AI

Musk was razor-sharp about AI at the Milken conference. He emphasized that generative AI, as we now know from OpenAI, Google Gemini and Anthropic, has very many limitations because they are always pre-trained language models. In fact, Musk said that today's LLMs should be seen as very smart participants in a pub quiz.

The funny thing about this observation by Musk is that just last week he raised billions for his own AI company, X.ai, which is now valued at eighteen billion dollars - that's two billion more than last week and four billion more than in mid-April.

Australia vs. Musk

"Elon Musk is an arrogant billionaire who thinks he is above the law," saidAustralian Prime Minister Anthony Albanese. The men are embroiled in a dispute over a country's authority to demand the removal of content on social media. Musk refuses to pull images from X showing a bishop being stabbed by a 16-year-old boy. Musk wants the images removed exclusively in Australia, but believes the country has no say in the display in other countries. He may be legally right about that, but it's not tasteful.

Starlink suffers from storm

One would almost forget that Musk also owns Starlink, the company that owns sixty percent of the estimated seventy-five hundred satellites circling the earth. Due to a geomagnetic storm, the largest since 2003, Starlink is experiencing technical difficulties. Musk is not worried yet and is already looking ahead optimistically to SpaceX's next launch. Elon Musk never has a week with only good news or only bad news. He does too much for that.

Categories
AI technology

Musk and Zuckerberg swap roles and BlackRock and Temasek invest in decarbonization

What conservative investors think climate technology investments look like.

Elon Musk had a fantastic week and Mark Zuckerberg saw two hundred billion in market cap evaporate as shareholders doubt his billion-dollar investments in AI. Costs are high and potential returns still completely unclear as Meta AI, powered by their latest language model Llama 3, is offered free and open source.

The sentiment that returns are unclear was also often heard about investments in climate tech, yet the world's largest investor BlackRock and Singaporean sovereign wealth fund Temasek are investing heavily in this crucial sector through a new fund: Decarbonization Partners.

Those considering investing in the rapidly developing sector of climate tech and decarbonization as well, I look forward to meeting you in May when I am in the Netherlands and Singapore. But first: the surprising week of Elon Musk and Mark Zuckerberg.

After 52 editions, here it is: Tesla is the best-scoring stock of the week. What happened?

Musk wins despite gas pedal glue - yes, glue

It was, as is often the case in the tech sector, a tale of two extremes this week: Tesla soared, while Meta plunged. This is especially notable because Tesla shares had slipped to $138 after reaching an all-time high of $409, while Meta was one of the biggest risers in the stock market over the last year. What happened?

After the recall of all Tesla Cybertrucks sold due to possibly glued gas pedals and unclearstories about robotaxis 
were received with deafening silence from the investor side, Tesla almost hid this sentence at the bottom of page ten of its quarterly report:

"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."

In other words, Tesla's long-awaited Model 2, the cheapest Tesla ever, which is supposed to be Tesla's version of the Volkswagen Golf, the car for the masses, comes to market earlier than expected. Promptly, TSLA shares rose 12%.

Meanwhile, Musk' s intended opponent in a cage fight between what would have been the two palest fighters in the history of martial arts, Meta's Mark Zuckerberg, had one of those moments when your confidence overrules your sanity.

Zuckerberg punished for candor

During Meta's quarterly earnings presentation, Zuckerberg let slip that it will take "a number of years" before investments in AI will translate into profits. Zuckerberg added truthfully that once Meta has found a revenue model, it will be very good at monetizing it.

Only nobody heard it anymore, much like when a party runs out of drinks and snacks, then the sound system breaks down but the host happily suggests that we all hold hands and sing together. Result: a 16% collapse in Meta's share price and a loss of two hundred billion dollars in market cap.

Meta lost as much as forty-five billion dollars since 2020 via its Reality Labs division on investments in smart glasses and not-yet-existing Metaverse business. No shareholder wants Zuckerberg to lose that kind of money on his investments in AI, while meanwhile the good ole' ad business is doing spectacularly well: also because Chinese discounters Temu and Shein advertise for billions via Facebook and Instagram, ad revenue rose 27% to over $35 billion in the first quarter.

Shareholders think about today, investors think about tomorrow

Shareholders would rather grab dividends than invest. Google owner Alphabet became worth two trillion dollars (two thousand billion) this week after it announced it would pay twenty cents per share in dividends and buy back its own shares for seventy billion dollars. This makes Alphabet the fourth most valuable company in the world after Microsoft, Apple and Nvidia.

This ignored the fact that Google's revenue growth, like Microsoft that presented outstanding quarterly numbers, was also driven by substantial growth (thirty percent) in cloud services, in which AI played a major role.

Yet Google, like all other tech companies, should be valued more on long-term vision and making the right choices in the process. Cloud services, with nine billion in revenue, are almost seven times smaller than ad revenue (62 billion), because for too long there was too little focus on cloud services and AI. Since then, Google has been playing catch-up.

Elon Musk is often ridiculed, sometimes rightly so, but anyone who looks a little longer at his activities has to admit that he possesses the rare combination of skills in being able to analyze the market correctly and subsequently position his own companies in them.

It is no coincidence that Musk, despite OpenAI's late start and dominance with ChatGPT and Google's huge competition with Gemini, managed to raise six billion dollars from investors for his AI company xAI. Last weekend that was supposed to be three billion dollars on a valuation of $15 billion, but then potential investors received an email to this effect:

"We all received an email that basically said, ‘It’s now $6B on $18B, and don’t complain because a lot of other people want in."

Now that is an email I would like to send around sometime, only with a happy smile emoticon at the end.

Elon Musk's pitch for xAI boils down to the company's ambition to connect the digital and physical worlds. Musk wants to do this by pulling training data for Grok, xAI's first product, from each of his companies, including X (formerly Twitter), Tesla, SpaceX, his tunneling company Boring Company and Neuralink, which develops computer interfaces that can be implanted in the human brain. It's a worldview that will generate a lot of resistance, but at least it shows long-term vision.

Decarbonization Partners: no website, but business cards that appear to be made of old tofu

BlackRock and Temasek raise $1.4 billion for climate tech

Countering the world's biggest challenge, climate change, also requires a long-term vision combined with a willingness to invest billions. The world's largest investment firm BlackRock and Singaporean sovereign wealth fund Temasek have therefore raised $1.4 billion to invest in technologies that reduce emissions.

Predictably, the Wall Street Journal, widely read by Republican "ho-ho-not-so-fast-it-was-always-hot" investors, does not write about investments but about "wagers": a term used in a casino when putting your chips on red or black.

Greenhushing as bad as greenwashing

Knowing that the capital market looks with suspicion at the results of risky investments in unproven projects, making more and more companies guilty of greenhushing rather than greenwashing, Decarbonization Partners rushes to say that it invests only in "late-stage, proven decarbonization technologies."

It is unfortunate that investing in startups is avoided because there is much need for capital for start-ups, unproven companies; after all, how else will companies ever get to the stage of having proven themselves? It's a bit like saying as a parent that you love your kids as soon as they can walk well; but how they learn to walk, those kiddies figure that out for themselves.

In total, more than thirty institutional investors from 18 countries have invested in the fund, including pension funds, sovereign wealth funds and family offices, and at $1.4 billion it has raised even four hundred million dollars more than targeted.

Investments have already been made in seven companies developing various innovative decarbonization technologies, including low-carbon hydrogen producer Monolith that I wrote about last week, biotechnology company MycoWorks and electric battery material producer Group14. These are developments that are hopeful.

Carbon credit exchange in ... Saudi Arabia

Other hopeful news that has been snowed under in all the stock market turmoil, a rare word in connection with Saudi Arabia, is that the world's largest oil state will open a carbon credit trading exchange at the end of this year in partnership with market leader Xpansiv, which will provide the infrastructure for the exchange.

The announcement of a carbon credit exchange in this region quickly resembles a chicken breeder announcing he is going vegan, but should be seen as part of Saudi Arabia' s larger plan to move to a sustainable economy. It is looking more and more like it is serious, so it will be fascinating to follow what market share the Saudis can capture in the global carbon credit market, which Morgan Stanley estimates to be $100 billion by 2030.

Finally: I'm in May in the Netherlands and Singapore

In closing, a personal note in the fifty-second edition of this newsletter. Looking back over last year, one notices that I write a lot about market developments and investments, whereas thirty years ago I just started as an entrepreneur in the tech industry, launching the first national wide available internet service provider in the Netherlands.

Because I am no longer running a business, which for me always resulted in running with blinders on toward a dot on the horizon, I have the opportunity to mentor various entrepreneurs and help them invest where possible.

Since I started this newsletter, I have regularly received friendly invitations from readers to catch up on possible joint investing. I plan to do that next month; I'll be in the Netherlands and Singapore in May. If you're interested in hearing more about the projects I support, always focused on sustainability and a large international market, I'd love to hear from you.

Have a great Sunday and see you next week!

Categories
AI crypto technology

My Christmas request is: help invest in a sustainable solution

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

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

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

It is now up to all of us

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

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

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

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

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

iXora, from The Netherlands

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

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

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

Netherlands most interesting startup

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

Watch the short introductory video of iXora here

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

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

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

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

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

The Christmas spirit in 2023: invest in sustainability

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

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

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

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

Spotlight 9: technology had a banner year in 2023

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

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

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

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

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

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

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

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

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