Can the US get back its swag? Reddit goes public at a loss, AI and Robots on the march, Hollywood in disarray, the Cybertruck has some kinks...
Can the USA get back its swag?
I once asked my friend Satjiv Chahil, a Delhi-born Sikh who left his happy home to become a legendary Silicon Valley innovator, why he came to America. Satjiv simply replied, "I wanted to go to the land where Jimi Hendrix was from." With those words, Satjiv defined the USA as a land that is free as long as you respect others. This is our roots—it's what gave us our global swag.
Mark Twain once rightly observed that all loose marbles roll West. Currently, over forty percent of successful Silicon Valley companies were founded by loose marbles that rolled not only West but from somewhere outside of the US—and we are all better off for it. It’s been a great run, but the system has been rotting at the top for some time, and the future of the American ideal is at stake.
Entrepreneurs to the Rescue
There has been a rise in mistrust of our institutions in the US since the early 2000s. We do not think that it is a coincidence that this wave of mistrust began at the same time the US declared War on Iraq in 2003. Our response to 9/11, backed by false intelligence, marked a significant undermining of US credibility on the world stage, from which we have not fully recovered.
The entrepreneurial disposition here in Silicon Valley is one of earnestness and optimism. We are committed to solving these problems of institutional mistrust, working on securing people's privacy, and taking back individual power through an onslaught of Web3 innovation. We also aspire to make individuals more valuable and efficient with AI so they can get more done in less time. The dream of a four-day workweek or less is very real.
From our post, we see the two biggest components to saving the American ideal, re-establishing our global brand, and uniting our country are joining together and recommitting to two primary principles. The first is the organizing principle of subsidiarity, which affirms that the autonomy and human dignity of the individual are paramount. In other words, the idea is that all social bodies exist for the sake of the individual, not for the benefit of the institutions or the people running them. The decentralizing power of blockchain and crypto can, and will make this happen.
The second is a return to the principle of non-violent protest. We have still not reconciled and atoned for the millions of innocent people who were killed, maimed, or displaced during the Middle East wars we started. We also have not reconciled the 47 innocent deaths and $5 billion in inter-city property and business destruction that occurred in the Summer of 2020. There is a better way to affect social change, and we have the independence of India under Mahatma Gandhi, the US Civil Rights movement under the leadership of Martin Luther King, Jr., the takedown of the Soviet Union, and Apartheid in South Africa as successful use cases. Let's stop the dying!
—Anthony Perkins, founder & editor, Cryptonite
Steve Jobs imagining our AI future in 1985
"And so my hope is that someday, when the next Aristotle is alive, we can capture his underlying worldview in a computer, and someday, some students will be able to not only read the words Aristotle wrote but ask Aristotle a question and get an answer. And that's what I hope that we can do. So this is the beginning."
—Apple cofouder, Steve Jobs, forecasting GenAI back in 1985.
Did you know?
(Overheard on the streets of the global Silicon Valley. Got any hot insider tips? Email us editor@cryptoniteventures.com)
UnSocial Networking
Reddit's NYSE IPO debuted at $35 per share—the top of its range—and netted the company $750M. At the close of the first day, the stock zoomed past $50 and pushed Reddit's market cap over the $9B mark; an impressive run-up, yet still well below the $10B valuation the company fetched in its last private round in 2021.
Reddit cofounder Alexis Ohanian may have thought he was smart at 23 to sell his stake in the company for $10M to Conde Nast back in 2006. But it also means he was conspicuously absent from the list of major Reddit shareholders and beneficiaries of last week’s IPO. But don’t feel sorry for Alexis, as he has since been a successful investor, including seed funding the now public Coinbase back in 2012, and, he is married to La Reina (The Queen).
Our view is Reddit, like Facebook and Instagram, is still playing ball like we are still in the early 00s—trading, selling, and manipulating its members. While Reddit's revenues grew 21% in 2023 to $804M and narrowed its net loss to $91M in 2023, from a $157M loss in 2022, the popular social network has never made money. The company is exploring new revenue streams, such as selling data to AI firms (😳) and focusing on a 'user economy' where users can earn rewards.
The drumbeat of a new generation of Web3 social networks is getting louder. Making the bold moves necessary to adapt to the new privacy and revenue-sharing-seeking consumer will be more difficult under a public Reddit with an eye on quarterly results.
Elon is hearing the same drums, and is upping his efforts to boost X's subscription income. Just after Elon's new AI company, xAI, made a move to open source its Grok language model, Elon announced he is offering all X Premium+ ( $16/mo or $168/yr) and regular Premium ($8/mo or $84/yr) subscribers access to Grok. (Google similarly just made access to its AI chatbot Gemini Ultra only available through a new $19.99/month paid subscription).
This move provides X with several advantages. First, it allows X to jump into the booming AI chatbot race market, which is projected to reach $33B by 2024, up from $19B in 2023—a stunning 73% year-over-year growth. Second, it helps X grow its paid subscription and diversify away from advertising revenues, which are down in general but even more specifically at X because Mad Men and Women generally loathe Elon's takeover of the old, broken Twitter. As proof, Sensor Tower found that 75 out of the top 100 U.S. advertisers on X from October 2022 no longer spent ad budget on the platform.
Unlike the other AI chatbots, Elons says Grok will respond to questions about conspiracies and politically incorrect ideas with 'a rebellious streak'. Most notably, Grok can access real-time X data—something rivals can't offer. Reddit, are you listening? 🙉
VC Whispers
Saudi Arabia's sovereign wealth fund is reportedly in talks with powerhouse VC firms like Andreessen Horowitz to create a mammoth $40B AI fund to diversify the kingdom's revenues away from oil. Andreessen Horowitz, with $35B in assets under management, boasts many standout investments, including Airbnb, Coinbase, Facebook, and Slack, and has pumped big money into close to 100 AI startups.
A key pillar of Saudi Crown Prince Mohammed bin Salman's Vision 2030 initiative is pouring billions into buying stakes in major international companies, including Uber, Bank of America, Citi, and major funds such as SoftBank, Blackstone, and Andreessen Horowitz.
Last June, Cofounder Marc Andreessen wrote that ‘The threat of not aggressively pursuing global AI dominance ... is considerable.’ 🤔
Longtime startup incubator powerhouse Y Combinator boss Michael Seibel is handing over his leadership responsibilities and spending all his time mentoring startups after a decade on the job. Y Combinator’s ‘shotgun investment’ strategy is bold, but it works. To date, the incubator has seed-invested in 4,500+ companies, of which over 100 have topped the $1B+ valuation mark and achieved Unicorn status. Under new CEO Garry Tan, Y Combinator cut staff by 20 percent to re-focus the incubator squarely on early-stage investments.
AI Tracker
While the private VC-backed AI company shakeout continues, some of the potential leaders in different sectors, starting with the AI chatbots, are coming into focus. The race consists of both startups like Anthropic and Perplexity AI, as well as AI offerings by existing Tech Goliaths, with the most aggressive private AI company investors being Google, Microsoft, Facebook, and Amazon.
The Racing AI bots
xAI — Musk started xAI in 2023 with the goal of creating a 'maximum truth-seeking AI' alternative to the OpenAI and Google Gemini (formerly Bard) called Grok. The xAI team comes from DeepMind, OpenAI, Google Research, Microsoft Research, Twitter, and Tesla.
Anthropic's Claude — Heavily VC-funded Anthropic was founded in 2021 by siblings Daniela and Dario Amodei, who were both former senior geeks at OpenAI. Anthropic's main product is an AI chatbot called Claude, designed to be more 'conversational' and "creative" than ChatGPT.
GitHub CoPilot — An AI-driven coding assistant designed to help software developers create code faster using the Codex LLM. It offers auto-complete suggestions for code and syntax while the user is typing.
Amazon's New Language Model — A new generative AI tool to help sellers on its marketplace create more effective and engaging product listings. On the ScienceQA benchmark, this new Amazon language model outperforms GPT3.5 by 16 percentage points (75.17%).
Amazon Codewhisperer — A general-purpose, NLP, and machine learning-powered that provides real-time code recommendations to developers as they write code. Allows customers to customize the code recommendations by incorporating internal libraries, APIs, and best practices.
Perplexity AI (our research and edit favorite) is an AI chatbot real-time search engine based on GPT-3 and GPT-4 that scans the Internet in response to user queries, shows the source of the information, and generally offers a high degree of transparency. It makes Google search feel ancient.
Stability AI —Based on a Stable Diffusion model, it offers a text-to-image tool that enables users to generate detailed images, a text-to-audio solution, and the 'harmless' natural language generation model stable Beluga.
AI21 Labs — A Tel Aviv-based AI startup that offers a platform called AI21 Studio that provides users access to a series of pre-trained LLMs that can add natural language generation, text summarisation, and paraphrasing capabilities to external applications.
Google Gemini (formerly Bard): Unlike ChatGPT, Gemini processes data taken from the public web and Google Apps and Services. At the same time, ChatGPT uses a mix of proprietary training data sets from Bing results.
Microsoft Bing Chat—Bing Chat uses GPT-4 as its underlying LLM, giving it an advantage over ChatGPT, which is based on the less powerful GPT-3.5 and performs better at answering search queries and providing more relevant results.
Meta Llama 2 — Facebook's open-source LLM that supports up to 70B parameters. It uses training data from as recently as July 2023 and has comparable scores to GPT-3.5.
It's always ideal for a founder/CEO to reinvent themselves along the way and remain the Captain of the ship. This will not be the case for Stability AI, as founder Emad Mostaque resigned as CEO of the company and as a member of its board. We are not going to beat centralized AI with more centralized AI. It is now time to ensure AI remains open and decentralized,' says Emad as he was heading out the door.
Emad's resignation comes after key departures at the AI startup that is looking to transition to developing commercialized products and generating revenue. The leadership changes at Stability AI also follow the news that rival startup Inflection AI was effectively assumed to be a Microsoft talent acquisition.
In The Chips
NVIDIA CEO Jensen Huang unveiled the company’s Blackwell AI chip, which is 25 times cheaper and more efficient than the company's most advanced AI chip. He says all of the major cloud providers will want some. Blackwell will begin shipping later next year, which should fuel the sales inferno and stock growth for at least a couple of other cycles.
Behind the scenes, Mr. Huang was also scooping up Israeli startup Run.ai, which has developed an app that helps developers limit the number of AI chips they need to complete a task. The Run.ai acquisition could boost NVIDIA's cloud service for developers who use its chips and diversify its revenue streams.
It’s being speculted that the price NVIDIA paid for Run.ai ranges from many hundreds of millions of dollars to $1B. The five-year-old startup has raised close to $120M in VC money from Tiger Global Management, Insight Partners, S Capital VC, TLV Partners, and NVIDIA Inception.
NVIDIA also wants to stay close to Israeli talent through the country's VC funds. The company just cut a partnership deal with Jerusalem-based OurCrowd to help fast-track promising Israeli AI startups into Nvidia's Inception program, which offers cutting-edge technical resources, early-stage funding, and VC introductions.
OurCrowd's AI fund was launched in September 2023 and aims to raise $50M and invest in 20 to 25 startups. It has already invested in three companies, including One Zero Digital Bank, Israel's first digital bank, and D-ID, which uses AI to convert images into videos.
Straight outta Silicon Valley
Meanwhile, back at the Apple Orchard, Tim Cook has quietly been on a 'AI startup shopping spree' targeting micro and small AI companies with relevant innovation. One such company is the Canadian startup DarwinAI, whose core focus is making AI systems smaller and faster, which aligns with Apple's emphasis on running AI on devices rather than in the cloud. Insiders estimate that Apple has bought up to 32 AI startups in 2023 alone—more than any other major tech company. Mr. Cook has revealed that Apple will be announcing exciting new AI technologies that will be incorporated into iOS 18 and the iPhone 16 series.
Apple was denied its motion to dismiss a class-action lawsuit against the company brought by a dozen women and men who claim that stalkers tagged them using the company's AirTag devices by a San Francisco court. Apple's stated purpose of the smart devices is to assist people in tracking their cars, luggage, wallets, and other valued belongings. Meanwhile, in January, it was reported that the launch of Apple's next-generation AirTag was delayed due to an overstock of its first-generation product despite good reviews and minimal 'Find My' market competition.
Google's Waymo will start offering autonomous robotaxi services to commuters in Los Angeles this week and in Austin by the end of the year, said co-CEO Tekedra Mawakana at SXSW. Waymo will operate a fleet of around 50 vehicles in LA and offer transport in a 63-square-mile area from Santa Monica to downtown Los Angeles. Waymo also operates fleets in San Francisco and Phoenix.
Well, as we forecasted, Facebook's Creepy Ray Bands just got creepier. Starting next month, you can sport Ray-Ban Meta Smart Glasses with built-in AI features that can perform translation and identify objects, animals, and monument identification—all initiated by saying 'Hey Meta.' Overall, the new smart glasses integrate advanced AI and multimodal sensing to provide users with a hands-free, voice-controlled assistant that can see, hear, and respond to the user's environment and queries. As always, Zuck is just inventing new ways to gather information on us all to sell.
OnHollywood
Billie Eilish, Nicki Minaj, REM, Stevie Wonder, country star Kacey Musgraves, rapper Q-Tip, indie pop star Chappell Roan, and 200 other artists have signed an open letter that demands tech firms pledge not to develop AI tools that replace human creatives' likenesses, voices and sound. The estates of Frank Sinatra and Bob Marley are also signatories.
'This assault on human creativity must be stopped. We must protect against the predatory use of AI to steal professional artists' voices and likenesses, violate creators' rights, and destroy the music ecosystem,' the letter states. Fair enough.
The letter does not call for an outright ban on the use of AI in music or production, saying that responsible use of the technology could benefit the industry. They cited how AI was employed to isolate John Lennon's vocals from an old demo track to create a 'new' Beatles song,, which was released last year.
Netflix chief Ted Sarandos told Rob Lowe he does not see AI as an 'existential' threat to creativity in Hollywood but rather as a powerful tool for creators to become more clever, efficient, and valuable. Ted further believes that AI can not replicate the 'authenticity and emotional connection' of the human experience and cited the global success of Netflix's Squid Game, which resonates with audiences in a way AI cannot replicate. 😎👍🏼
Hollywood at large still appears to be in scramble mode. During the height of the strike negotiations last summer, the writers union shared their concerns that the wave of recent mergers has left only studios like Disney, Warner Bros. Discovery, and Amazon as the lone arbiters of which movies and TV shows are made. We cannot be left wondering how more consolidation works for an entertainment industry facing rapid decentralization and moving to a more exclusive talent-to-fan model.
Others see Hollywood furthering centralizing power. Andrew Nicholls, the head writer of The Tonight Show Starring Johnny Carson, warned told the Hollywood Reporter, 'There are fewer gatekeepers, and their vertically-integrated bosses—the final purchasers—overlap. If we aren't careful, the taste and the range of knowledge of only a few dozen people could come to circumscribe everything developed for the American television audience.'
Hollywood Recent Mega Deals
AT&T spun off its WarnerMedia division in 2022 for $43B and merged it with Discovery to form the new company Warner Bros. Discovery to create a larger, more diversified media and entertainment company.
Walt Disney Co. acquired 21st Century Fox for $71.3B in 2019. Disney's intention was to significantly expand its content library to better compete with streaming services like Netflix and to bolster Disney+.
AT&T acquired Time Warner in 2018 for $85B. The merger brought together AT&T's extensive distribution network with Time Warner's content creation capabilities, including Warner Bros., HBO, and Turner Broadcasting.
Oracle cofounder and the world's X richest person, Larry Ellison's son David, has teamed up with Jeff Shell, the former CEO of NBCUniversal and KKR, and entered exclusive talks to buy Paramount Global. Under their proposed deal, David's very successful studio Skydance Media, backed by RedBird Capital (where Jeff Shell is a partner), KKR, and Larry Ellison, will team up and buy a significant minority or slight majority stake in Paramount Global while keeping it a public company: David and My. Shell would also have significant roles operating the company, and Paramount Global would gain access to Oracle's AI and data software.
Paramount Global's legacy assets include CBS, the Paramount Pictures studio and physical lot, a studio library with films such as The Godfather, Titanic, and Forrest Gump, and cable networks such as Comedy Central and Nickelodeon. It also owns the streaming service Paramount+, which boasts more than 67.5M subscribers, and its free advertising-supported service Pluto TV, with more than 80 million monthly active users.
Skydance Media’s track record includes producing Mission: Impossible, Top Gun, and Terminator. The company's model span's film, TV, gaming, and sports, and they have distribution deals with Paramount, Netflix, Amazon, Apple TV+ and Tencent.
According to CNBC, the new equity deal would be priced at a premium price over the market, and would align voting and economic control. Currently, the Redstone family directly or indirectly owns 77% of the Class A voting stock of Paramount Global and 5.2% of the Class B common stock, which is about 10% of the overall equity of the company. Paramount Global's market cap has been hovering around $8B, and annual revenue for 2023 was $29.7B, a 1.7% decline from 2022, and Paramount+ continues to lose money.
The Science of Life
Noland Arbaugh, the first human to have a Neuralink computer chip surgically implanted in his brain by a robot, joined a livestream on X to show the public how the brain-computer interface technology works. Noland is 29 years old and was paralyzed from the shoulders down due to a diving accident eight years ago.
On the live broadcast, he demonstrated how he can use his thoughts to move a computer cursor around a screen to play online chess and toggle a music stream on and off. 'It's all being done with my brain. If you all can see the cursor moving around the screen, that's all me, you all," beamed Noland on the live stream. 'It's pretty cool, huh?' 😎🤙🏼
Hume AI closed $50M in funding and launched the world's first 'empathic voice interface" that enables an emotionally intelligent AI voice into applications for the health and wellness service sectors—with just a few lines of code. Hume AI was founded by Dr. Alan Cowen, a former Google Deepmind researcher, and scientist best known for pioneering semantic space theory. The round, led by EQT Ventures, Union Square Ventures, Nat Friedman & Daniel Gross, Metaplanet, Northwell Holdings, Comcast Ventures, and LG Technology Ventures also participated in the round.
“Semantic space theory defines how people experience and express emotion in a highly-dimensional, categorical, and complex fashion. I've spent over ten years with colleagues at Berkeley, Google, and Hume AI, how different dimensions of emotional experience correspond to variability in the situations we encounter, in the patterns of brain activity they evoke, in physiological responses like goosebumps, heart palpitations, panting, and sweating, and in expressions of the face, body, and voice — and we've developed AI models to recognize these emotion-related responses.”
—Dr. Alan Cowen, foundert & CEO, Hume AI
When tested by the NHS, the AI tool Mia IQ developed by Kheiron Medical Technologies successfully identified tiny signs of breast cancer in eleven women out of over 10,000 women scanned, which human doctors had missed when looking at mammogram scans. Because they work instantly, tools like Mia can reduce the waiting time for results from 14 days to three. It took six years to build and train Mia, who trained on 'millions' of mammograms from women all over the world.
Going Green
Audi announced that its new all-electric 2025 Q6 e-tron SUV will go on sale at the end of this year. The EV is similarly sized to the brand's bestselling Q5 SUV. The Q6 will initially only offer two-motor all-wheel-drive configurations with up to 456 and 510 horsepower. Its 800-volt electrical architecture and 94.4-kWh battery should make for an EPA range estimate of at least 300 miles and a rapid EV recharge time of 158 miles in 10 minutes.
Tesla Cybertruck reviews are in
Positives:
Smooth, easy acceleration and plenty of power, with comfortable, Air suspension standard drive, though with occasional reminders of the truck's pure mass.
Heated and cooled seats, great stereo, heat pump for efficient heating/cooling and other Tesla-specific details like excellent one-pedal driving mode, side view cameras that pop up when activating turn signals, and rear-view camera that works while driving,
Innovative, form-shifting, rule-breaking exterior design, with impressive 12 inches of maximum ground clearance in off-road mode, and powered tonneau cover to lock cargo in the large bed, two 110V and one 240V outlets in the bed.
Impressive 334 miles of range in Edmunds EV Range
Negatives:
Unfinished features like missing Autopilot and Full Self-Driving1
Infotainment system lacking some features of older, cheaper Tesla models
Ergonomic issues with the door handles and lack of separate lock/unlock buttons1
Visibility issues described as 'god awful'
Ride quality and handling are not as good as competitors like the Rivian R1T
Exterior design and sharp edges being 'unacceptably flawed'
The Cybertruck is 70.5 inches tall and 223.7 inches long, with more than 17 inches of total ground clearance. On paper, the Cybertruck competes well with other electric pickups in its set. It boasts a 2,500-pound payload, 11,000-pound towing capacity, and more than 120 cubic feet of total cargo space. It has 685 pound-feet of torque—that's more than a Ford F-150 Raptor. Top speed is 112mph; the 0-60 mph sprint time is 4.1 seconds. (Musk promises an upcoming, higher-performance variant called 'Cyberbeast' will do it in 2.6 seconds.)
Robots on the March
Mercedes-Benz is piloting a program to use humanoid robots to help with 'low skill, repetitive, and physically demanding manual labor' in the car-building process. The humanoids will come from its Austin, Texas-based robotics company, Apptronik. Mercedes positions the partnership as an opportunity 'to see how robots can be used to help human workers and ease staffing issues during the manufacturing process.'
BMW announced in January its own robot trials in partnership with California-based Figure. The company’s 01 robots are currently being tested at BMW's US factories in Spartanburg, South Carolina.
Apple has abandoned its decade-long effort to build a self-driving electric car and cut over 600 jobs with the group working on the project. In their search for the Next Big Thing, Apple is exploring the development of a personal home robot product line to follow you around your home. 😳 Amazon introduced a home robot—the Astro robot—but so far, there have been challenges in determining what functions will provide the ROI. We are generally skeptical about the potential of a home robot market.
Know Thy Enemy
A Bloomberg News investigation has found that Elon's satellite-enabled broadband internet services are falling into the wrong hands, including territories ruled by repressive regimes. The report details how the Starlink kits are smuggled, traded in the black market, and illegally activated, and suggests this misuse is a systemic global problem. Yemen and Sudan, for example, are both in the throes of a decade-long civil war, and government officials conceded that Starlink is in widespread illegal use within warring factions.
Both Ukrainian and Russian forces are using uncrewed aerial drones and maritime vehicles in the ongoing battle for control of the Ukrainian skies and seas. To sink the Russian ships and destroy their infrastructure in the Black Sea, the Ukranians deploy sleek, high-speed surface vessels equipped with explosives on kamikaze missions. Sea drones, such as the Magura V5 and Sea Baby, have a low radar signature and are relatively inexpensive compared to traditional naval assets, costing around $250,000 each.
The FBI reports that millions of Americans have been caught up in a 'sinister' and widespread cyber-attack campaign and is offering a reward of up to $10M for the captures of seven Chinese nationals with ties to 14-year-old hacking operations. The justice department said the hackers targeted US and foreign critics of China in businesses and politics. The men also allegedly targeted defence contractors, information technology and telecommunications companies, and the manufacturing, trade, finance, consulting, legal, and research industries.
'Today's announcement exposes China's continuous and brash efforts to undermine our nation's cybersecurity and target Americans and our innovation,' FBI Director Christopher Wray said.
What the Math Says
Gallup says that only 3 in 10 Americans attend religious services every week, and 56% attend seldom (25%) or never (31%). The Mormons are the most steadily observant, with two-thirds attending church weekly,; Protestants(including nondenominational Christians) rank second, with 44%, followed by Muslims (38%) and Catholics (33%), Jews (22%), Buddhists (14%), and Hindu Americans (13%). The Catholics show the most significant attendance drop since 2002-2003, from 45% to 33%.
Gallup suggests that Church attendance will likely continue to decline in the future, given that younger Americans are much less likely to attend religious services—22% attend regularly, eight points below the national average.
Pura Vida (pure life)
A new study affirms that consuming sugar or artificially sweetened beverages increases the risk of atrial fibrillation. The study also found that drinking one liter of unsweetened juice, such as orange or vegetable juice, per week was associated with a lower risk of atrial fibrillation.
If you’re seeking plumper skin, tension relief, and a new self-care ritual, a self-facial massage can help tone the facial muscles and provide a subtle, natural lift to the skin over time. How to do it? 1) Remove any makeup, dirt, or impurities on your face; 2) choose a lightweight facial oil; 3) massage your face using light and gentle upward strokes, avoiding dragging or pulling on the skin; and 4) focus on areas prone to tension, like the forehead, jawline, and neck and use circular motions around the eyes to reduce puffiness and diminish dark circles.