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.
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 state investment fund Temasek are investing heavily in this crucial sector through a new fund: Decarbonization Partners.
Those considering investing in the rapidly developing sector of climate tech and decarbonization as well, I look forward to meeting you in May when I am in the Netherlands and Singapore. But first: the surprising week of Elon Musk and Mark Zuckerberg.
After 52 editions, here it is: Tesla is the best-scoring stock of the week. What happened?
Musk wins despite gas pedal glue - yes, glue
It was, as is often the case in the tech sector, a tale of two extremes this week: Tesla soared, while Meta plunged. This is especially notable because Tesla shares had slipped to $138 after reaching an all-time high of $409, while Meta was one of the biggest risers in the stock market over the last year. What happened?
"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."
In other words, Tesla's long-awaited Model 2, the cheapest Tesla ever, which is supposed to be Tesla's version of the Volkswagen Golf, the car for the masses, comes to market earlier than expected. Promptly, TSLA shares rose 12%.
Meanwhile, Musk' s intended opponent in a cage fight between what would have been the two palest fighters in the history of martial arts, Meta's Mark Zuckerberg, had one of those moments when your confidence overrules your sanity.
Zuckerberg punished for candor
During Meta's quarterly earnings presentation, Zuckerberg let slip that it will take "a number of years" before investments in AI will translate into profits. Zuckerberg added truthfully that once Meta has found a revenue model, it will be very good at monetizing it.
Only nobody heard it anymore, much like when a party runs out of drinks and snacks, then the sound system breaks down but the host happily suggests that we all hold hands and sing together. Result: a 16% collapse in Meta's share price and a loss of two hundred billion dollars in market cap.
Meta lost as much as forty-five billion dollars since 2020 via its Reality Labs division on investments in smart glasses and not-yet-existing Metaverse business. No shareholder wants Zuckerberg to lose that kind of money on his investments in AI, while meanwhile the good ole' ad business is doing spectacularly well: also because Chinese discounters Temu and Shein advertise for billions via Facebook and Instagram, ad revenue rose 27% to over $35 billion in the first quarter.
Shareholders think about today, investors think about tomorrow
Shareholders would rather grab dividends than invest. Google owner Alphabet became worth two trillion dollars (two thousand billion) this week after it announced it would pay twenty cents per share in dividends and buy back its own shares for seventy billion dollars. This makes Alphabet the fourth most valuable company in the world after Microsoft, Apple and Nvidia.
This ignored the fact that Google's revenue growth, like Microsoft that presented outstanding quarterly numbers, was also driven by substantial growth (thirty percent) in cloud services, in which AI played a major role.
Yet Google, like all other tech companies, should be valued more on long-term vision and making the right choices in the process. Cloud services, with nine billion in revenue, are almost seven times smaller than ad revenue (62 billion), because for too long there was too little focus on cloud services and AI. Since then, Google has been playing catch-up.
Elon Musk is often ridiculed, sometimes rightly so, but anyone who looks a little longer at his activities has to admit that he possesses the rare combination of skills in being able to analyze the market correctly and subsequently position his own companies in them.
It is no coincidence that Musk, despite OpenAI's late start and dominance with ChatGPT and Google's huge competition with Gemini, managed to raise six billion dollars from investors for his AI company xAI. Last weekend that was supposed to be three billion dollars on a valuation of $15 billion, but then potential investors received an email to this effect:
"We all received an email that basically said, ‘It’s now $6B on $18B, and don’t complain because a lot of other people want in."
Now that is an email I would like to send around sometime, only with a happy smile emoticon at the end.
Elon Musk's pitch for xAI boils down to the company's ambition to connect the digital and physical worlds. Musk wants to do this by pulling training data for Grok, xAI's first product, from each of his companies, including X (formerly Twitter), Tesla, SpaceX, his tunneling company Boring Company and Neuralink, which develops computer interfaces that can be implanted in the human brain. It's a worldview that will generate a lot of resistance, but at least it shows long-term vision.
BlackRock and Temasek raise $1.4 billion for climate tech
Solving 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 state investment fund Temasek have therefore raised $1.4 billion to invest in technologies that combat climate change.
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.
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 coal 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.
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!
OpenAI's ChatGPT is an accelerating snowball: how long before people search ChatGPT first for answers to their questions and for the best deals on products? Image: ChatGPT4
With all the wrangling at OpenAI, you would almost forget, but ChatGPT just celebrated its first birthday this week. Over a hundred million people use an OpenAI service each month, and annualized revenue is over $1.3 billion, a first step toward possible market dominance.
ChatGPT4 nicer than Google
As a subscriber to ChatGPT, these days I ask almost every question first to ChatGPT4, instead of searching on Google. 'The best day to fly between Europe and Asia, what shoe size is Shaquille O'Neal and under what three names was that movie starring Tom Cruise and Emily Blunt released?' Just three questions I asked ChatGPT today. But also, 'tell me about investors Vinod Khosla and Reid Hoffman,' but more about them in a moment.
Compared to Google, ChatGPT's answers seem better and I like that I don't have to click through to other websites. No doubt Google has tracked the change in search behavior through Google Chrome and the other gimmicks Google uses to capture people's behavior. This makes it all the more painful that Google, according to The Information, decided this weekend to delay the launch of OpenAI competitor Gemini until early next year.
Search and buy through ChatGPT?
One company that is also seriously threatened by OpenAI is Amazon, and it is rarely noticed. Especially in the US, Amazon has become "the Google of buying": as soon as Americans think about buying something, they search directly on Amazon. Other websites no longer play a role here.
It looks like it will be months rather than years before ChatGPT is fed sales information from the world's largest online stores. All parties that now sell through Amazon Marketplace can then directly serve their customers outside of Amazon. Of course, fulfillment then remains an issue, and in that Amazon is almost unbeatable, but the company is not worth $1.5 trillion because it is so good at shipping packages efficiently.
Amazon is so valuable because it is where buyers find their products and where transactions take place. OpenAI has a great tool with ChatGPT to take over that function, because with its Plus subscribers it already has a payment relationship that can be easily expanded. Amazon is no doubt already formulating a response to this threat.
iPhone users switch from Siri
Apple is surely following with suspicion how many people program the new "action" button on the iPhone 15 with ChatGPT. The idea was that it would allow people to launch their email or camera app faster but article after article appears urging people to get rid of Siri as if from herpes after a ski weekend with a frat house.
A headline like "Throw Siri off your phone and use ChatGPT for help" must hurt intensely at Apple. Siri never became what Apple had hoped it would, and if many people use ChatGPT as the first search function on the iPhone, heads will roll at Apple. The question has long since ceased to be whether ChatGPT has this potential, but whether the OpenAI board will become stable enough quickly to successfully introduce this kind of product.
Hoffman and Khosla, billionaires with an opinion
Viewed in this light, it was nice to see an excellent podcast on Thursday featuring legendary entrepreneurs and investors Reid Hoffman (PayPal, LinkedIn, Greylock) and Vinod Khosla (Sun Microsystems, Khosla Ventures), both investors in OpenAI.
By the way, note the almost mocking title with which Khosla describes himself on LinkedIn: "venture assistant. That's like Lionel Messi creating a LinkedIn profile with the feature "ball boy.
Hoffman was the first contributor to OpenAI from one of his private foundations, when it was still just a benevolent club of academics. After all, you don't do well as a billionaire until you have at least one foundation named after yourself, although I found this one-page website for Hoffman's other foundation, the Aphorism Foundation, amusing.
Khosla put into OpenAI double what he had previously invested in a startup: $50 million. In short, Messrs. Hoffman and Khosla are not entirely neutral (cough).
No restriction of competition, China a risk
Hoffman focused on market forces in the conversation. " Startups are not hindered right now," he explained, despite the apparent dominance of OpenAI and mega-cap tech companies such as Microsoft. Hoffman has been on Microsoft's board since he sold LinkedIn to Microsoft and doesn't think his "own companies" have too much power. "I don't think it limits competition on any level," he said, to nobody's surprise.
Khosla called the focus on existential risks of AI "nonsensical talk from academics who have nothing better to do". But he sees China as a major risk and thinks the U.S. is "in a techno-economic" war with China and should take a tougher stance. " I would ban TikTok in a nanosecond," said Khosla, in contrast to Hoffman, who had spoken with President Biden just before recording the podcast. After all, if anyone knows the value of a good network, it is LinkedIn's founder.
Khosla is firmly against open-source AI models as well due to the China risk. Bio-risk and cyber risk are real concerns too, he noted. But if China or rogue viruses don’t kill us, Khosla thinks the near-future is very bright: “I do think in 10 years we’ll have free doctors, free tutors, free lawyers” all powered by AI.
Elon Musk had a tough month
At the last minute, Tesla published this amusing video in which the new Tesla Cybertruck makes mincemeat of a Porsche 911 in a sprint. Pay special attention to the bouncer, because the Cybertruck has something hanging from the tow hook and it's not a caravan. Marques Brownlee made a whopping 40-minute review video.
Tesla Cybertruck towing a Porsche 911 is faster than ... a Porsche 911.
Not everyone is a fan of the Cybertruck, for example, Engadget writes: "Teslaa's Cybertruck is a dystopian, masturbatory fantasy. In Elon's future, the rich should be allowed to dominate (and probably run over) the poor with impunity."
Cute that a Cybertruck gets to 60 miles an hour (100 km/h) in 2.6 seconds, but I am particularly curious to see how this paintless, silver doghouse weighing over three thousand kilos (over 6,000 lbs) behaves on a mountain pass full of hairpins. Or how you park it in reverse in the parking lot of your local supermarket.
Musk chases advertisers off
Reuters puts it beautifully, "Elon Musk is keen to achieve what no business leader has done before, from mass-producing electric cars to developing reusable space rockets. Now he is blazing another trail most chief executives have avoided: the profane insult.." Not only that: gross insult to customers.
Musk said it twice to advertisers who left his social media platform X for complimenting a text with anti-Semitic content: "go fuck yourself.
Musk felt it necessary to name one such departing advertiser, Disney CEO Bob Iger, unprovoked. Consider the weeks Musk has had behind him: on November 18, SpaceX sent the Starship into space, where it blew up, intentional or not.
The same weekend saw the leadership fiasco at OpenAI, with the fired Sam Altman and the other key players communicating with the outside world almost exclusively through Musk's platform X. That was vindication for Musk, who earlier this year saw Mark Zuckerberg's Threads becoming the fastest-growing social media platform - dying out as quickly as it emerged, but that's for another time.
Watch the whole item at Fox. Musk looks like captain Jack Sparrow after a rough night. He, probably just back from Israel and suffering from jet lag, looks even whiter than the average Fox viewer, and despite trying to appear masculine in his leather jacket with smutty teddy collar over a too-hot-washed t-shirt, he makes a vulnerable and frustrated impression. Here sits someone trying very hard to look like someone who is not trying very hard.
The whole segment at Fox is an adulation of Musk as a defender of freedom of speech, which was supposedly sorely missed when X was just called Twitter. I think the nice thing is that all five panelists, with that ball room dancing teacher in the middle surrounded by four born again nymphs, don't realize that it's hilarious that they spend minutes talking about freedom of speech, but the term "fuck" used by Musk is bleeped out twice by Fox.
So no viewer knows what Musk actually said. You can guess, but you don't know, because you can't hear it. No one repeats it or comes back to it. I love that discomfort. It's a moment like when a notorious meat eater finds out that the barbecue he's generously serving for his second plate is made of vegan meat.
Musk, willingly or unwillingly, with all his absurd attempts to regulate X on the one hand and then open it up on the other, demonstrates the total insanity of American morality that he himself struggles with as a South African. Anti-Semitism? Bad for business. Saying fuck on TV? Not allowed, but you can then worship him as a champion of Fox's supposedly so desired freedom of speech.
Breakfast TV (h)honest
It reminded me of the time I gave an interview about virtual reality during Web Forum in Dublin for a BBC breakfast program. I made the unforgivable mistake of saying that in the future VR would have all sorts of wonderful applications, from news to film, music and sex. Hey ho ho no jeez Louise, stop, panicked the BBC crew: I had said sex.
That wasn't allowed in a breakfast program. Because it's early in the day, blushing kids just eating their oatmeal, well surely I understood. "Am I allowed to say machine gun or weapon of mass destruction?" I asked. It certainly was allowed. 'Bloody mass murder?' No problem at all. ' How graphically may I describe the Catholic Church's misconduct with young boys?' Um, there were no specific rules for that, so in the end I had a great morning. That the item ever aired shows the editing skill of BBC editors.
Techbros need help
Musk is not the only tech CEO struggling with freedom of speech and regulation of his social media network. I recently wrote about my own struggle with freedom of speech when subscribers to my first company Planet Internet were found to be distributing child pornography. Deciding not to distribute certain messages was easy, but determining where that boundary lay was difficult, not to mention technically complex.
Mark Zuckerberg is in deep trouble now that the Meta platforms (Facebook and Instagram in particular) seem to have become popular platforms among pedophiles. According to the Wall Street Journal, Meta has spent months trying to fix child safety issues on Instagram and Facebook, but is struggling to prevent its own systems from enabling and even promoting a vast network of pedophile accounts.
The Meta algorithms unrestrainedly promote the content the user clicks on, with dire consequences. The U.S. Congress is becoming more alert, and the European Union is also now rightly targeting Meta.
I firmly believe that the limited social gifts of people like Musk and Zuckerberg have led them to think differently, more autonomously, than us simple souls and are therefore capable of achieving more; at the same time, they have limited empathy and genuinely don't understand why the world has trouble with their policies. What makes them great as entrepreneurs keeps them small as human beings.
Special links
What did an iPhone do to the arms of this distraught bride?
Bride-to-be stands in front of the mirror, takes a picture and suddenly she looks bewitched. Pay close attention to her arms.
The UN climate conference COP28 has begun in Dubai, led by Abu Dhabi's oil boss. Before we get cynical, here is the good news that hard work is being done on sustainable aviation. Applause for Virgin Atlantic.
Spotlight 9: crypto week!
Bitcoin toward $40,000 and Ethereum over $2,000, party time in the crypto world.
It was a dull week for investors, unless you dare to get into cryptos because Bitcoin and Ethereum seem to be definitely back!
At the twenty-fifth edition of this newsletter, I want to look across this dull news week at what has been the best-yielding investment in tech over the last five years. To my surprise, it was not Apple, Bitcoin or Nvidia, but Tesla. In the crypto world, Ethereum turned out to have risen twice as much as Bitcoin. Ok, one news fact did stand out this week: Tinder is introducing a $500-a-month subscription, for real enthusiasts.
If Tesla and Ethereum made a car together, it would look like this, according to Midjourney.
Tesla and Ethereum the big winners
Tesla rose as much as 1287% and Ethereum 611% over the last five years, against Nvidia 492%, Bitcoin 305% and Apple 210%. Meanwhile, the S&P 500, the classic benchmark, did 48%. War and inflation notwithstanding, saving has still proven far more expensive than index investing.
Tesla and Elon Musk I leave to Walter Isaacson, whose book on Musk is a huge hit. Rather, I look at Ethereum, precisely because the traditional media rarely, if ever, publish a decent analysis on this underrated platform.
But before we dive into the numbers and prices, it's important to review what Ethereum does and can do and how it differs from that blockchain brother from another mother, Bitcoin. For this description, I used ChatGPT and Gert-Jan Lasterie's standard work.
Ethereum is a public workshop
Imagine that the Internet is a big city. In that city you have a market for commerce, a library for information, a bank for money matters, and so on. Bitcoin is something like a special kind of gold; valuable and you can keep it, but otherwise you can't do much with it. The exchange rate varies greatly and so you won't be using it to pay for anything anytime soon.
Ethereum is something completely different, where a group of people got together at the initiative of Vitalik Buterin and said, "instead ofjust making a new kind of money or a different kind of gold, shall we put some kind of public workshop in the city where people can build all sorts of things?"
With Ethereum, you can create "smart contracts," which sounds a bit like magic contracts, which automatically execute themselves once certain conditions are met. So suppose you want to rent a house. Normally you would go to a real estate agent or housing association, show your ID, pay and sign paperwork.
Based on Ethereum, landlord and tenant can use a smart contract that says, "Whoever pays the digital key fee will automatically get the digital key to the house." That transaction takes place on the Internet, no middleman is needed, everything happens automatically based on the smart contract.
But it doesn't stop there. Ethereum is used to build so-called "decentralized applications," called dApps. These are programs that do not run on one central computer but are spread across many computers worldwide. This often makes them more secure and less susceptible to fraud or censorship.
The magic word is decentralized
There is also "DeFi" ("DieFai"), which stands for "Decentralized Finance. These are financial services such as loans or insurance that work on Ethereum through smart contracts, without the involvement of banks or other financial institutions. The 2021 NFT boom was also built on the Ethereum platform.
Unlike Bitcoin and Ripple, Ethereum is technically not a currency, but an open-source software platform for blockchain applications - with Ether (ETH) being the cryptocurrency used within the Ethereum network.
In short, Ethereum is special because it is much more than just a digital currency. It is a complete digital world where you can enter into all kinds of transactions and agreements without the need for anyone else.
It's like a new, smarter layer of the Internet. To join you only need ETH as a means of payment, similar to buying a festival coin when you go to festivals because that coin is accepted as the only means of payment.
Why is Ethereum risky from an investment standpoint?
So much for the utopian vision: a world computer with smart contracts. There is nothing wrong with that, and as an entrepreneur, I am a big fan of access to a development platform like Ethereum. I won't even rule out Ethereum's creators getting a Nobel Prize in economics one day.
But from an investment standpoint, let's look at a fundamental economic principle: scarcity - or in the case of Ethereum, the lack thereof. Every right-thinking person supports Ethereum's expansive vision. It wants to be the oil that drives the gears of Web3. But the oil supply is finite; Ethereum is not.
Bitcoin has its own counter-story. It is limited to twenty-one million Bitcoins, which means built-in scarcity. You don't have to be an economist to understand that scarcity drives demand, which in turn drives up the price.
But Ethereum is like a never-ending digital oil well. Great for powering the network and ensuring there is always enough, but not so great for the fundamental principle of supply and demand. If ETH becomes too abundant, its value may decline, causing the price per coin to fall. The infinite supply means that ETH becomes as common as tap water in developed countries: of course you need it, but you're not going to pay a premium for it.
Thus, the lack of a supply limit for Ethereum can be the Achilles heel for a stable developing price. Therefore, keep a sharp eye on it if you are considering investing in Ethereum after the following paragraphs, because the lack of a supply limit is not icing on the cake; it could be the whole cake, or even the whole pastry - in a country full of diabetics.
Spotlight 9: TSLA phenomenal, ETH rises twice as fast as Bitcoin
With 1287% increase in five years, Tesla deserves a spot in Spotlight 9.
The idea behind Spotlight 9, a name coined by ChatGPT for this column, was to briefly track weekly how the major tech investments were doing compared to the benchmark, the S&P 500. It remains simple: if an investment does not outperform the S&P 500 over the long term, why invest in it and not the S&P? Amazon is such a setback, up only 29% over the last five years versus +48% for the S&P 500.
Stock market sentiment is important because when it rains there, it trickles down throughout the tech world to the youngest startups. If there are no exits, no IPOs, that means less investment in larger tech companies that are not yet publicly traded and it affects the entire tech sector. Ultimately, it limits new innovations.
Meta out, Tesla in
Tesla was not in my Spotlight 9 list because I follow the five biggest tech companies weekly, ranked by market value. Those are Apple, Microsoft, Alphabet (Google), Microsoft and Meta (Facebook). Tesla falls just outside that, but it gets interesting: Meta is currently worth $769 billion and Tesla ... $767 billion.
Based on its performance over the last five years, I threw Meta out of Spotlight 9 and Tesla is in it as of today. Zuckerberg must be devastated and in Musk's house, Elon and the little x's are certainly running an algorithmically calculated polonaise. Let's hope Musk doesn't disappoint with Tesla or I'll have to make another picture.
No master forecasters
In addition to the five largest tech companies by market value, I also follow the two largest crypto currencies, Bitcoin and Ethereum. There is so little coverage of crypto in the traditional media, and I myself have so little interest in daily prices, that I had completely missed the fact that after all the highly exposed price declines of the last two years, Ethereum and Bitcoin have still proven to be very good investments for people who look a little further than a week, a month or a year.
There is hatred and envy in the crypto world between Bitcoin maximalists and altcoin lovers. That's something like a metalhead explaining to a rapper why his music is better. They are incomparable giants, with Bitcoin, as mentioned, being somewhat comparable to a popular, digital version of gold, while Ethereum is a widely used building block of Web3.
Both have some utility, but how that will be reflected in the price is a total guess. As far as I know, at least in September 2018, no one was predicting that Ethereum (+611%) would appreciate twice as much as Bitcoin (+305%).
Tinder's $500-a-month subscription plan
'Hate the game, don't hate the players' thought Tinder and introduced a $500 subscription. Per month.
I read this article and I could not read it without hearing a translation from Amsterdam-West in my head every five sentences. I translate those below back into language that will keep this email from ending up in your spam filter.
Let's start with this passage: "We know that there is a subset of highly engaged and active users who prioritize more effective and efficient ways to find connections," said Tinder Chief Product Officer Mark Van Ryswyk, "which is why we have been conducting extensive testing with this audience recently."
Translation: "We know that there is a horde of horny panters willing to pay unlimited money to us, as long as they have new victims be able to find loves."
Going forward: "The new plan announced Friday, called Tinder Select, was only offered to less than 1% of Tinder users who are among the app's most active, the company said. For nearly $6,000 a year, users will get access to new features, such as 'VIP' search, matching and conversation, that are not currently available with existing paid subscriptions."
Translation: "We don't know exactly how to do it legally yet, but we are going to give this group of addicts a chance to get their victims target audience, at the expense of then those customers of ours who only pay a few tens."
Another gem from the article: "Tinder parent company Match Group Inc. has experience with expensive subscriptions. In 2022, it bought The League, an invitation-only dating app aimed at "ambitious, career-oriented singles. The League has a VIP subscription that costs $1,000 a week. The company previously said the success of The League's expensive subscription caused Match Group to reconsider how it could appeal to "high-intention users on its other apps such as Tinder."
Conclusion: it is heartening that people today have the opportunity to find more potential partners and/or playmates than they used to find at the bus stop to the office or at the billiard bar. Butreh... "high intention users? We used to have very different designations for that kind of low-level guys and girls.
In conclusion
YouTuber and postdoctoral researcher Rob ter Horst of the CeMM Research Center for Molecular Medicine in Vienna tested the new Apple watches and made this fun and informative, science-based video about them. According to his resume, Ter Horst is "designer and research subject at the same time of an extensive N=1 study in the field of computational chemistry and bioinformatics.
Maybe nice if Ter Horst unleashed his scientific expertise and N=1 approach on that $500 subscription, went wild on Tinder for a month and published all the findings of his scientific research on YouTube?
