OpenAI's iPhone for AI? Coinbase's Brian A as thought leader, Ray-Bans for spies, weed-hunting AI drones, Zuck and Lex in the metaverse, Sir Richard and The Stones...
OpenAI, Jony Ive, and a cool $1 Billion from SoftBank’s Masayoshi Son join together to build the ‘iPhone of AI’
It looks like a fledging Worldcoin wasn’t exciting enough for OpenAI CEO Sam Altman because he is now teaming up with former Apple designer Jony Ive and his team at LoveFrom, to create the ‘iPhone of artificial intelligence.’ To pull off this not-so-insignificant task, the duo are in advanced talks with SoftBank CEO Masayoshi Son to close $1 billion in capital to fund their project. Apparently, Masa, Sam, and Jony are considering creating a joint company that would rely on the talents and technologies of their respective organizations.
Part of this equation is supposedly that Mr. Son wants the recently public mobile chip designer Arm, which SoftBank controls, to play a vital role in the new device. So you have a software exec who is failing with his first hardware device (the Worldcoin Orb), teaming up with a designer used to unlimited resources and talent, and a self-interested investor who wants you to use his chip. These kinds of combinations in Silicon Valley have tended to end up as very expensive experiments.
To Mr. Altman’s credit, ChatGPT is one of the fastest-growing apps of all time.
It wasn’t easy
“We had lunch together most days and spent our afternoons in the sanctuary of the design studio. Those were some of the happiest, most creative, and joyful times of my life. I loved how he saw the world. The way he thought was profoundly beautiful.”
—Jony Ive on his times spent with Apple cofounder Steve Jobs
The duo’s goal is to make the AI experience a ‘more natural and intuitive user experience.’ You know, kind of like Apple already does pervasively in their products like their Watch, which detects things like if a person falls, has AFib, or is in a crash, and predicts the next word you are texting on your iPhone. The Apple ethic has always been to talk about the features and not the technology because that is what consumers understand.
‘We’ve been working on generative AI for years and have done a lot of research, and approach all this really thoughtfully,’ Apple CEO Tim Cook explained recently. ‘We’ve never felt an urgency to be first; we’ve always felt an urgency to be best, and that is how we go into this as well.’
Mr. Cook’s words are well-reasoned and demonstrate that the Apple brand remains venerable. Yet a report indicates that iPhone sales have fallen 22% year-over-year, with an expected decline of 12% in 2023, suggesting people are content and not motivated to trade up with for a new iPhone with puny leaps in innovation. We are not smart enough to imagine the ‘iPhone of AI,’ but as the iPhone story instructs, we will find out in more than a few years.
Yo Masa, and good luck gentlemen.
Fear and loathing of the AI God and the campaign to say ‘fear not—all is well’
For a variety of reasons, the US has become a very neurotic country, and our new terror is AI. The recent Vanity Fair piece on AI would have you believe that Silicon Valley is creating a conscious God who will displace all humans, and there is more than a 50-50 chance this AI Lord will wipe out all of humanity by the middle of the century. Elon told Joe Rogan this scenario will play out ‘like Terminator—except the intelligence will be in the data centers—but the robots will be the end effectors, and some will be moving so fast that you won’t be able to see them without a strobe light.’
Yup, there is lots of unfriendly stuff ahead for you if you believe all that crap. Back down here on planet Earth, more sober observers such as George Gilder remind us that one human mind, which would take a zettabyte to map, is far more complex than the connectome of the entire global Internet. And the human mind only operates on 12 to 14 watts of power, whereas the Internet takes gigawatts, maybe terawatts of power. So, someone, please explain how, with that kind of chasm of power and intelligence between humans and machines, we end up with an AI God by 2050.
The AI cat is out of the bag
If people want to live in science fiction novels, that’s none of our business. But all the weeping and gnashing of teeth over our imminent annihilation is lathering up all the politicians to create new ways to meddle in our lives, kill innovation, and generally opine about all the things they know nothing about.
Thank God Web3’s rising thought leader and Coinbase founder and CEO Brian Armstrong is speaking up. Brian A. is reminding everyone that we do our best work when Washington leaves us alone, and if they don’t, innovation will go offshore.
This week, Brian A. rallied dozens of crypto founders to meet with lawmakers under the banner Stand With Crypto, a non-profit crypto legislation watchdog founded by the company.
“I don’t think everybody in D.C. actually fully realizes how powerful the crypto voting community block is. 56 million people in the U.S. have already used cryptocurrencies. That’s 5x as many people that have an electric vehicle. I think 2024 is an election where the voters of America are really going to hold candidates’ feet to the fire and say, What is your position on crypto?”
—Brian Armstrong, Founder & CEO, Coinbase
Much of the lobbying and Brian A’s blog posts and TV appearances have focused on the SEC’s regulatory scrutiny, which escalated after the SEC sued Coinbase and its rival Binance in June for allegedly failing to register tokens, claims both companies deny. But Brian now appears to be cutting a much larger political swath by jumping into AI regulation and preaching the overall gospel of the decentralization of power.
Silicon Valley-born Brian Armstong, 40, cofounded Coinbase (COIN.O) in 2012 with Fred Ehrsam, whom he met in a Reddit subgroup. He got his first startup money ($150,000) from Y Combinator. Coinbase went public in April 2021, and its market cap soared to $90B at the top of the market in November 2021. Coinbase stock and sales declined precipitously after the crypto bubble burst in late 2021/early 2022, along with the stock market. Coinbase generated $3B in sales in 2022, representing a 59% decline from 2021, leaving the company with a $18B market cap, and Brian’s stake worth at $3B and some change. Coinbase remains the second largest and most liquid crypto exchange on the planet.
Oh, and if you are afraid an AI robot might take your job, here is another math equation from Professor Gilder— You + plus AI tools = more productive person = more valuable = more mula in your pocket. And you can take that to the bank.
Did you know?
(Overheard on the streets of the global Silicon Valley. Got any hot insider tips? Email us editor@cryptoniteventures.com)
The Billionaire Boys Club
‘People who are driven by demons get shit done.’ says Elon’s new biographer Walter Isaacson, who also penned the Steve Jobs bio. ‘He (Elon) and I are very different. I came from a charmed childhood and became very much a part of the media Establishment. He came from a brutal childhood and resents the established elites.’
Social Networking
Facebook announced a new suite of generative AI products at Meta Connect, including Meta AI, an assistant for Messenger, WhatsApp, and Instagram (boosted by Bing, Microsoft’s search engine), and 28 chatbots played by celebrities including Tom Brady, Snoop Dogg, Mr. Beast and Charli D’Amelio.
Seven years after the ill-fated Google Glass, Facebook introduced its Ray-Ban smart glasses last week at Meta Connect. The glasses allow wearers to listen to music, take calls, and capture photos and short videos, which is driving privacy advocates insane on social media. ‘FB has teamed up with Ray-Ban to sell camera glasses! @ray_ban, have you thought this through?’ one Xed.
‘Meta wants to build the future of human connection where people interact with hologram versions of friends and where AI bots assist them. Smart glasses are the ideal form factor for your AI assistant to see what you are seeing and hear what you are hearing. We don’t think there’s going to be one singular superintelligence that everyone interacts with. People are going to want to interact with a bunch of different ones.’
—Mark Zuckerberg keynote excerpt from Meta Connect
VC Whispers
Sell now while the selling is hot. Earlier this year, Spark Capital, NEA, and Insight bought OpenAI employee shares at a $27B valuation; now, shares are available for a whopping $90B. While the over-hyped OpenAI is on a pace to hit $1B in sales, it faces fierce competition and will lose the race because of its constant moralizing.
Su Zhu, the cofounder of now-defunct $10 billion crypto hedge fund Three Arrows Capital (3AC), was arrested at Changi Airport while attempting to leave Singapore and will serve a four-month sentence for not complying with bankruptcy court orders.
3AC fell in June 2022 due to overexposure to the algorithmic stablecoin protocol, Terra, which had gotten caught up in an inflationary death spiral and lost $40B. Terra cofounder Do Kwon was arrested in Montenegro earlier this year, where he served four months in jail there for fraud. Both Mr. Zhu and his cofounder Kyle Davies went underground last year, citing death threats, and got busy launching a new exchange—OPNX—for traders to exchange bankruptcy claims from fallen crypto companies such as FTX.
AI Tracker
Amazon invested $4B in OpenAI competitor Anthropic, which will use Amazon’s chips and engage AWS as its primary cloud provider. Amazon, in turn, will incorporate Anthropic’s technology into products across its business. Anthropic received a $400M investment from Google earlier this year and was valued at more than $4B in a March funding round led by Spark Capital.
Some believe the Shroud of Turin is the burial cloth used after the crucifixion of Jesus. It depicts the image of a man, slightly under six feet tall, who suffered a brutal death of crucifixion with wound marks and blood stains that correspond to the methodical whip-lashing, crown of thorns, dislocated shoulder, and sword puncture on his side described in the Gospel. So far, the means by which the negative 3D image was imprinted on the Shroud has yet to be scientifically explained because the cloth’s fibrils have no pigments, paints, dyes, or stains.
On Hollywood
Back to work. Hollywood writers secured significant concessions, including residual payments and viewership transparency for shows on streaming services, and set minimums for writers in pre-development mini rooms.’ The still striking actors are ‘emboldened and energized’ by the writers’ deal success.
The agreement AI guidelines: ‘AI can’t write or rewrite literary material, and AI-generated material will not be considered source material under the MBA, meaning that AI-generated material can’t be used to undermine a writer’s credit or separated rights.’ Good luck monitoring those who use AI tools or deducing if AI has been part of a production or not—it will largely be possible to determine.
Repeat: You [writer] + plus AI tools = more productive writer = more valuable [to Studios and producers] = more mula in your pocket. Be not afraid—go get it!
Going Green
AI-enabled crop-spraying, weed-killing drones designed by a Canadian startup reduce chemical use by up to 90% for Mega Farms. Precision AI uses images of 15,000 species to train computer algorithms so drones can spot and kill unwanted weeds without drenching the entire crop in chemicals.
US school districts are eager to trade in their diesel (3.3 pounds of CO2e per mile) bus fleets for electric (1.5 pounds of CO2e per mile) for ‘health reasons’ while still keeping their iconic yellow design. Diesel exhaust is carcinogenic, and nitrogen oxides lead to respiratory problems in children.
The Science of Life
How were life-giving particles formed after the big bang? Now scientists say a particle accelerator can peel back atoms, reveal their atomic nuclei, finely dice them into their base components of protons and neutrons, and recreate and probe an early state of matter called the quark-gluon plasma.
Follow the Crypto
The anonymous Ethereum developer, CroissantETH, managed to get ChatGPT to deploy smart contracts on Ethereum after feeding it data on the top 10,000 traded tokens on Uniswap. CroissantETH observed ‘GPT-4 had a much better understanding of crypto culture while also offering its own creativity.’ This is bigger than you think—it’s the future.
AI-based innovations were notably absent from Brian A’s top 10 crypto innovations he highlighted last month. Brian instead supported efforts like layer-2 privacy, Web3 game economies, and attempts to “tokenize everything.”
Fashion mined NFT/NFC infrastructure company IYK raised $16.8M led by Andreessen Horowitz, with Art Blocks founder Erick Calderon, 9dcc fashion brand founder gmoney, and Quantum Art cofounder Justin Aversano also throwing in some change. IYK works with Adidas, Atlantic Records, Billionaire Boys Club, Johnnie Walker, Coinbase, MNTGE, Pudgy Penguins, and 9dcc.
Into the Metaverse
Zuck and computer scientist and podcast rock star Lex Fridman released the video below of the pair having a conversation in the metaverse as 3D hyper-realistic avatars. The interaction looks face-to-face, in spite of the two being miles apart. The experience caused Lex to gasp: ‘It’s you. It’s really you.’
At Meta Connect, the company unveiled new details about its Quest 3 mixed reality set to begin shipping on October 10. ‘Soon, the physical and digital will come together in what we call the metaverse,” says Zuck.
Space shots
The country’s first pristine asteroid sample landed in Utah’s Great Salt Lake Desert after a 3.86-billion-mile journey. NASA sent up a rocket in 2016, protected by a heat shield invented in Silicon Valley, to fetch samples of rock and dust from the 500-meter diameter asteroid called Bennu, leftover from the tumultuous formation of the solar system.
Satellite light pollution. Just around 9,000 stars are visible to the Earth's view of the sky, compared to Elon's army of 5,000 Starlink satellites in orbit. As his biographer Walter Isaacson points out, ‘You may not like his tweets, but he has sent up more mass into orbit than all countries and companies combined.’
A recent poll found that only 4 in 10 Americans believe recent reports of UFOs are human in origin, and just one in four rule out extra-terrestrial visitations in the last 50 years. Women between 18 and 29 are the most likely group to think we have already had a close encounter of the third kind.'
Straight outta Silicon Valley
Wired reports that Elon may be in hot water with the SEC for claiming that monkeys who died during trials at his biotech company Neuralink were not the result of the brain implants, while there is some evidence that was just not so. It appears Neuralink’s goal to release the first commercial brain-to-computer interface for humans has a bit to go.
When Steve Jobs came back to Apple in 1997, he made it very fashionable for tech companies to do billboard and bus stop advertising in big cities. Mr. Jobs’s inspiration is still felt in San Francisco, as tech billboards are everywhere; however, his ad messaging genius hasn’t quite translated over.
Chaos & Complexity
The New Yorker’s Inside Sam Bankman-Fried’s Family Bubble post tells the story of how two Stanford ‘ethics and social fairness’ professors now confront a son accused of one of the largest financial frauds in US history. Ms. Fried told The New Yorker that the prosecution and the bankruptcy estate are ‘McCarthyite’ and enabled by ‘a credulous public that will believe anything.’
Retailers lost up to $80B to theft in 2022, up from $67B in 2021, with violent shoplifting increasing by more than a third, and 88% of retailers saying shoplifters became more aggressive. Smash and grab mob favorite stores: Apple, Footlocker, Nordstrom, Whole Foods, Louis Vuitton, and Burberry.
What the Math Says
Newsweek unveiled its annual 100 Most Loved Workplaces in America list, and not a single Big Tech brand was anywhere near that list. If you work in Big Tech and your gut and brain are not in harmony (see below), you now know why.
Part of the angst about Big Tech is even Zoom is demanding people return to the office. Apple, Google, Meta, and Amazon also mean it this time—Return or get a new job! 'Loved workplaces’ see the office not so much as a place for individuals to get work done but as a hub of interaction. Lots to figure out.
Know Thy Enemy
China claims 90 percent of the South China Sea, with much of the territory thousands of miles from the Mainland and in waters surrounding Vietnam, Malaysia, Brunei, Indonesia, and the Philippines. China has asserted its control over one of the world’s busiest shipping lanes by expanding its military outposts and airstrips on two island chains called the Paracels and the Spratlys.
“Work must be done to forge a strong cybersecurity barrier and give full play to the role of information technology as a driving force for development. It is imperative to govern cyberspace, run websites and apps, and carry out online activities according to the law.”
—Chinese President Xi Jinping’s directive excerpt released in July
Behind China’s ‘Great Firewall.’ Apple is in intense conversation with Chinese communist officials, which is pushing to forbid foreign apps, such as Facebook, Instagram, and X, from the iPhone App Store in China. This move would be a big revenue hit for Apple.
Revive Thyself (or not)
L.A. is where most trends tend to break, so watch out for the booze-free dance party movement. Natural High, a renegade substance-free pop-up outdoor party producer in spaces around the city, was founded by DJ Adam Weiss and grew organically from weekly meditation and gratitude groups.
Research indicates there is an inextricable link between our guts and our brains, and the 330 days of sunshine you get at SHA resort in Spain will help bring both into harmony. When you are stressed, you get dysbiosis [an imbalance of bacteria], and when you have dysbiosis, you don’t tolerate stress. It’s time to break that cycle and hit the infinity pool at the SHA.
Flashback Interview
Sir Richard Branson on the eve of the Internet circa 1995
In 1995, south of Market Street in San Francisco was called ‘Multimedia Gulch’ because the coolest thing we could think up before the Internet was CD ROMs, which brought music, photos, and video to your PC for the first time.
By Anthony B. Perkins
From the December 1995 issue of Red Herring
At 16, Richard Branson formed his first serious enterprise when he launched Student, a U.K.-wide magazine for his peers. A few years later, he parlayed his publishing experience into founding Virgin as a mail-order record retailer, and shortly thereafter, he opened a record shop on Oxford Street in London. By the time he was 22, he had built his own record studio. Over a 20-year period Virgin Records worked with artists such as Peter Gabriel, The Human League, Steve Winwood, Simple Minds, Phil Collins, Janet Jackson, and The Rolling Stones and grew into the sixth-largest record company in the world. Somewhere along this magical mystery tour, Mr. Branson founded Virgin Atlantic Airways, which has since grown to become the second-largest British international airline--and he also found time to sail his boat and fly his hot-air balloon across the Atlantic in record time.
In 1992, Mr. Branson rolled up Virgin Music Group's assets--the record labels, music publishing operations, and recording studios--and sold it all to Thorn EMI for a cool billion dollars. Not quite ready to retire yet, Mr. Branson took his kitty and built the Virgin Group into international "Megastore" retailing, book and software publishing, film and editing facilities, and clubs and hotels; altogether over 100 different companies operating in 15 countries. The combined annual sales of the Virgin Group of Companies now well exceed $1 billion. The Herring caught up with Mr. Branson when he was visiting one of his more recent startups, Virgin Sound & Vision, a Los Angeles-based interactive software publishing company. Our visit with Mr. Branson also happened to coincide with the launch of Virgin Cola, a soft drink that he thinks will give Coca-Cola a run for its money. Listen in and find out why things just might go better with Virgin.
Perkins: The Virgin Group of Companies represents every aspect of the publishing food chain--from artistic talent, to multimedia production, to mega-retail distribution. Is it accurate to assume that this was all part of a well-calculated plan on your part?
Branson: I suppose quite early on, we started by signing artists. And the artists needed a recording studio, so we built a recording studio, and they needed a video studio, so we built one of those, and they needed to export their records, so we started an export company. We also found that it is nice to make films, so you can use your artists' music for the soundtracks….