Jeff Bezos arrives, Bill Maher rants, Trump Social sucks, the Uyghurs suffer, 9 Googlers arrested, and Tocqueville lays down the law for behavior at work, and more fun...
The clock is ticking on TikTok in the US
The TikTok ban in the US is now ‘inevitable’ after the House overwhelmingly (360 to 58) passed a bill unless Chinese owner ByteDance sells the controversial social network to a non-Chinese buyer. The Biden administration is also on record demanding TikTok's Chinese owners divest. One hundred fifty million US folks watch TikTok—50 million regularly—and part of the concern is it promotes everyone and everything from Osama Bin Laden to young people choking each other while having sex. The other challenge is that it is a means for the Chinese Communist Party (CCP) to collect data on and surveil TikTok's 1.5 billion active global users.
‘The forced sale of TikTok represents a bipartisan breakthrough against the CCP’s most powerful tool of information warfare against the United States. No longer will Congress stand by idly while the CCP freely weaponizes TikTok to corrupt the minds of young Americans, radicalize Americans against their own country, and amplify antisemitism on a scale and at a pace not seen in human history.’
—Rep. Ritchie Torres (D-Bronx)
“A US company should buy TikTok so everyone can keep using it and your data is safe. This is about privacy. With TikTok in China, it’s subject to Chinese Communist Party laws that may require handing over data to their government.”
—Uncle Chuck Schumer, Senate Majority Leader (D-NY)
Of course, our Congress can't do anything without tying it to a $95 B' foreign aid package’ for Ukraine, Israel, and Taiwan. On purpose, this condition has gotten comparatively little attention, and it is also expected to pass. So it looks like we will be blowing up more than TikTok. Bombs💣 away, baby! 😳
Meanwhile, Wall Street I-bankers are scrambling to get in on the potential sale by cozying up to the list of potential TikTok buyers, which includes Microsoft, Meta, Apple, and Oracle, as well as Rumble, the scrappy, free-speech-oriented YouTube slayer. Former U.S. Treasury Secretary Steven Mnuchin and former Activision CEO Bobby Kotick are reportedly also working to form investor groups to acquire TikTok potentially. Very smart.
In a recent private-market investment by Abu Dhabi AI firm G42, ByteDance valued the company at around $220B. At the NASDAQ market peak in 2021, Tiger Global Management bought shares in ByteDance, valuing the company at around $460B. Its non-Chinese investors also include General Atlantic, Sequoia Capital, and Susquehanna International Group, who all stand to win very big on a deal as TikTok, with $16.1B in revenue in 2023 (a whopping 67% increase year-over-year), will definitely sell at a very high premium.
Six popular TikTok ‘challenges’
The Devious Licks challenge—encourages students to steal or vandalize school property, such as stealing soap dispensers, fire extinguishers, and bathroom fixtures, and post the damage done.
Borg challenge—encourages kids to drink a mixture of alcohol, electrolytes, caffeinated flavoring, and water in a one-gallon jug. Why? To stay hydrated, slow intoxication, and skip a hangover. It didn’t quite work for the 30 binge-borging U of Mass Amherst students who were hospitalized.
Blackout, Choke-out, or Pass-out challenge—encourages kids, particularly tweens, to asphyxiate each other to the point of temporary unconsciousness. The blackout challenge has been linked to the recent deaths of 20 minors, including a 9-year-old Wisconsin girl and an 8-year-old Texas girl.
Benadryl challenge—encourages the overconsumption of over-the-counter medication such as the antihistamine Benadryl, which can cause seizures, heart problems, comas, and even death. It first started making its rounds on TikTok in 2020.
Dragon’s Breath challenge—encourages eating candy coated in liquid nitrogen, which is popular on TikTok due to the vapor fumes it emits when eaten. Though liquid nitrogen is not innately dangerous when used in food, it can cause skin burns, stomach aches, and food poisoning.
Orbeez shooting challenge encourages using toy guns to fire frozen gel pellets at bystanders. 🤔
Beezin’ challenge—encourages rubbing Burt’s Bees peppermint lip balm onto the eyelids before going out for the night to enhance alertness or heighten one’s buzz, or lead to eye inflammation, irritation, milia, and even vision loss.
The light and dark side
Social networks offer a mirror of the human drama at large, and as such, one will always find extraordinary good and horrendous evil out on the edges. In contemplating the TikTok ban, we must be wary of the bad but also recognize the good. Like all social networks, TikTok features many excellent and earnest people—teachers and instructors, entrepreneurs peddling their products and services, and aspiring entertainers. TikTok is also a place to discover and share dance, music, comedy, artwork, and health tips.
Are we not able to teach our kids how to discern good from evil, what's healthy for us, and what is not?
Any ban will hurt many Americans and brands that depend on TikTok to make a living, and we do not hear much empathy for this reality from the puppet masters in Washington. Just as during the Summer of 2020 riots in 20 US cities that caused $2B in insured property damage (another estimated $2B to $3B in mostly inter-city uninsured property damage) and involved another 47 innocent deaths (primarily blacks) on top of George Floyd's, our 'leaders' are happy to sit back dispassionately and watch lives disrupted and destroyed if it suits their political needs of the moment.
"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."
Alexis de Tocqueville from his book Democracy in America
We anger ourselves over the CCP's covert actions against our citizens as we do the Cartels peddling us cocaine, but in both cases, we are the buyers that keep them in business. Occasionally, we might want to consider removing the log out of our own eyes before we try to take the speck out of another country’s eyes.
"China uses facial recognition to profile the Uyghurs, classify them on the basis of their ethnicity, and single them out for tracking, mistreatment, and detention, and these technologies are deployed in service of a dystopian vision for technology governance that harnesses the economic benefits of the internet in the absence of political freedom and sees technology companies as instruments of state power."
—Excerpt of a report to then Secretary of State Mike Pompeo in 2020 from a bipartisan group of 77 Senators and House members.
The Web3 ethos is to take back power from the institutions we no longer trust, such as Congress, which has a mere 7 percent trust rate. However, this feat requires taking more individual responsibility to work—like knowing what our kids are doing on TikTok or cutting the video clip cord completely. They won’t miss a thing and will have more time for in-person interaction and playing outside. Leaning on Uncle Chuck & Co. to run some Central Parenting Agency has never been the right solution. The solution is always best achieved by the agency that is closest to the problem—which is the parents when it comes to issues with their own kids
Of course, other US security and cyber terrorism concerns complicate this view. The CCP is undoubtedly committed to collecting and storing biometric and other data on everyone, including TikTok users, for its totalitarian tracking purposes. The CCP uses these tactics to control and detain its people, most blatantly the Uyghurs, and it’s reasonable and prudent to assume they would try to do the same to us if they had the opportunity.
Did you know?
(Overheard on the streets of the global Silicon Valley. Got any hot insider tips? Email us editor@cryptoniteventures.com)
Billionaire Boys Club
Forty VC funds turned down Jeff Bezos before he secured an $8 million Series A round investment from John Doerr and Kleiner Perkins Caufield & Byers in 1996, which turned out to be Amazon’s only VC round before going public in 1997. Such was life in the Roaring 90s. We met Jeff in the early days and interviewed him for our book, The Internet Bubble–What you need to know before the coming shakeout, Harper Collins 1999, when he was only slinging books and creating the ‘Biggest Bookstore n the World.’ As it turned out, Amazon was one of only a handful of survivors of Web1—along with Paypal, eBay, and Yahoo!
It wasn't easy, and there was a lot of luck involved. For example, Amazon was able to raise $672M in convertible bonds from European investors in early 2000, just before the Internet crash. Had that financing not happened, there is an excellent chance that Amazon would not be with us today. It took Amazon nine years from its founding in 1994 to achieve its first full profitable year in 2003, and given its very low-margin business model, it took billions in equity and debt capital to reach self-sustainability. It was truly a Herculean fundraising feat by Jeff, who had, prior to founding Amazon, honed his finance skills as the youngest senior vice president at the quantitative hedge fund manager D.E. Shaw.
Other than contending mean Keith McNally X post (above) last week, Jeff has been on a roll. He recently attended President Joe Biden's black-tie event to honor Japan's Prime Minister Fumio Kishida and wife, Yuko, where he and Lauren Sanchez—wearing ‘a Rasario floor-length silk skirt and corset-like boning top with a plunging lace neckline $2,200’, rubbed elbows with the shining elite including Robert De Niro, Bill and Hilary Clinton, and JPMorgan Chase CEO Jamie Dimon. 🙄
Jeff and Lauren were also recently granted an invite to Vogue’s Anna Wintour's fashionable, celebrity-filled, and exclusive annual Met Gala. ‘When Jeff and Lauren step onto the red carpet at the Met Gala next month, it will mark their coronation👸🏻🤴🏻as America’s new royalty,’ say the people in the know. It puts the once shy and unassuming 200x billionaire and his bride-to-be at the apex of celebrity and power, from Hollywood to Washington, DC, to Miami—and now to New York’s most glittering✨social event. Jeff has come a long way since the fragile geek-looking days of the 1990s.
UnSocial Networking
When we first heard that Donald Trump was starting his social network—Truth Social—to be run by former Congressman Devin Nunes, we knew that what was going to happen was, well, what's happening. It is called raising and burning Cybertrucks full of cash by trying to play the social network game like it was still the early 00s. Truth Social is not an innovative next-generation social network; it is a political movement and protest vote. We all know political movements come and go and, therefore, are not suitable platforms to build a business. It took Jack Dorsey five years from napkin drawing to the Twitter launch. You can't snap your fingers and create a social network overnight because you are The Donald.
And this is precisely what the numbers show. Truth Social is tiny—2 M active monthly users vs. X's 450M—slow-growing and losing money. The company reported only $3.38M in revenue and a $49M loss for the first nine months of 2023 and is still 'bleeding money like crazy,' according to one analyst.
On March 26, 2024, Trump Media & Technology (TMTG), the parent company of Truth Social, went public through a merger with a special purpose acquisition company (SPAC) called Digital World Acquisition Corp.—which raised eyebrows from the beginning. TMTG's stock soared to $79.38 on the first day of trading but has since plummeted to $32 a share. Trump's stake went from $6B at the peak down to around $2.6B today.
Investors are rightfully worried that Trump might cash out his stock windfall to fund his campaign and pay his mounting legal bills. The Truth is, he shouldn't, but he may, and no matter because everything about this deal already makes it a bad bet.
VC Whispers
VC powerhouse Andreessen Horowitz (a16z) closed a new $7.2B fund, with a $600M investment target for gaming startups and $3.75B for later-stage companies with high growth potential. a16z also plans to raise more capital for crypto and biotech startup investments in 2025 and argues that AI will power almost every new software app across all industries, so there are no 'AI companies' per se, it’s a technology.
In spite of Tesla’s continued stock sell-off to 15-month lows—Ark Invest’s boss Cathie Wood’s ARK ETF funds are gobbling it up. Tesla’s stock slumped 14.7% in April, but Ark’s ETFs bought 629,044 shares valued at $102.9M. Tesla’s stock is ARK Innovation ETF’s largest holding with a 9.75% weighting, above its No. 2 holding, crypto exchange company Coinbase (COIN), which has an 8.98% weighting. Tesla’s stock is also the largest holding of the ARK Autonomous Technology & Robotics ETF with a 9.93% weighting, just above its holdings in Kratos Defense (KTOS) shares at 9.93%.
Silicon Valley '24—Coming live this summer!
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AI Tracker
Smartphone startup Nothing has integrated ChatGBT into its Nothing OS and new Nothing Ear earbuds. Nothing was founded in 2020 by consumer industry veteran Carl Pei and has raised over $200M in VC money from investors including GV (Google's investment arm), EQT Ventures, and C Ventures, as well as angels Tony Fadell, the iPod inventor; YouTuber Casey Neistat and Reddit CEO Steve Huffman. The London-based company has also partnered with chip maker Qualcomm.
There is a lot of startup action going on in the emerging AI gadget space, with other VC-backed companies, such as Humane AI Pin ($699), Rabbit R1 ($199), and the Jony Ive and Sam Altman project.
Rabbit is backed by $30M in VC money led by Vinod Khosla's firm Khosla Ventures. The company was founded by Jesse Lyu, a world-class Warcraft player, a music producer, and a semi-professional Lamborghini racer.
Creating new consumer devices is about as hard as any business to break into and win—especially if Apple is the leader. The only opening we see in the smartphone space for newbie startups is to think simple. Flip phones still have cult status and are booming in sales. How about creating a retro flip phone design (the Rabbit R1 has the vibe) and adding an AI bot to do the work instead of zillions of downloadable apps? You might be able to create a real alternative to the increasingly complicated and often annoying iPhone.
Note: Flip phone sales are increasing significantly, with one report predicting that over 54 million flip phones will be sold by 2027, a 382% increase from 2022's 14.2 million units sold. The Samsung Galaxy Z Flip 4 remained the top-selling foldable device, capturing 47% of the global market
OnHollywood
We recommend the Rolling Stone profile on the two-year-old Cambridge, Mass.-based startup Suno—the so-called ‘ChatGPT for music. Suno's product is an AI-powered tool that allows users to create full, two-minute songs from simple text prompts. The tool generates original music, vocals, lyrics, and album artwork. As noted in the post, Suno’s app has people buzzing, ‘How the fuck is this real?’
Suno's founders are Mikey Shulman (pictured below), Georg Kucsko, Martin Camacho, and Keenan Freyberg, all machine-learning geeks. They fell in love with the unexplored possibilities of AI audio when working together at another Cambridge AI company, Kensho Technologies. The cofounders have raised over $224M from a reported 135 investors.
'I don't think that making a new Billy Joel song is how people want to interact with music with the help of AI in the future. I think in five years, people will want to create music that doesn't exist—the tunes in their heads they can turn into a new vibe. We're not trying to replace artists. The fact that music listeners vastly outnumber music-makers at the moment is so lopsided.'
—Mikey Shulman, the 37-year-old cofounder of Suno and Harvard Ph.D. in physics and musician who jams with cofounder Martin Camacho.
Suno's target customers are hobbyists and professionals who want to create music but lack musical training or access to expensive music production tools. The company aims to 'democratize music production for everyone.'
Suno says it’s in communication with the major labels and professes respect for artists and intellectual property. They have also designed their tool not to allow you to request specific artist styles in your prompts and not to use real artists’ voices. The founders so far have not faced the open hostility by the music business that characterized the Napster days.
Hollywood productions continue to be commoditized by streaming services and face increasing challenges, particularly from TikTok and independent producers on YouTube and Rumble. Comedian, social commentator, and LA-based Bill Maher went on a rant last week on his show Real Time with Bill Maher to explain why Hollywood is losing.
“Hollywood is putting kids at risk. Disney is an aphrodisiac for pedophiles. The reason we find pedophiles working in kids' TV is because that's where the kids are. Quiet on Set [the documentary series] exposed the culture of sexual misconduct and abuse at Nickelodeon, and it was talk of Hollywood but also totally exposed the hypocrisy of this town.
It is time to admit that the Drag Queen Story Hour trend is more for the Queens than the kids. Sure, kids love a clown but does the clown have to have tits? When I see a five-year-old tipping at a bar under a sign that says, 'It’s not gonna lick itself,' do I have to pretend that's cool in order to keep my liberal ID card?
'Contrary to progressive dogma, children aren't miniature adults wise beyond their years. They're gullible morons who believe anything and just want to please grown-ups. They don't have any frame of reference, so they normalize whatever is happening. That's why endlessly talking about gender to six-year-olds isn't just inappropriate; it's what the law would call entrapment—enticing people into doing something they wouldn't ordinarily do.
There's a certain kind of activist these days who wants to take heterosexuality, old school, old-fashioned, boring, minding its own business heterosexuality and lump it in with patriarchy and sexism and racism and tell kids, ‘Wouldn't it be cool if you're anything but that?'‘
It is every adult's job to protect children. As one of the few people in the public eye who's gone through life and never had kids, someone has to tell me why I always have to defend them. If you think that isn't going on with gender in schools, you're not watching enough TikTok videos.”
— Excerpt of Bil Maher’s remarks on Real Time with Bil Maher
The documentary series Quiet on Set: The Dark Side of Kids TV is about the toxic work environment and alleged inappropriate and abusive behavior towards child actors that occurred in the scenes of popular Nickelodeon children's television shows, particularly those created by producer Dan Schneider, who has never been legally charged for this alleged behavior.
The Science of Life
It's all over TikTok that GenZers (under 27) already look older than Millennials. Studies are indeed showing that young people are aging faster, and this factor is also being linked to higher cancer rates for their age group. The new data also suggests that specific lifestyle choices may be to blame.
Recent research reveals that young people diagnosed with certain types of cancer—especially lung, gastrointestinal, and uterine cancers—were more likely to show evidence of 'accelerated aging,’ i.e., the age of the cells in their bodies—known as their biological age—was significantly greater than their actual age.
A study conducted by Dr. Shuji Ogino from Harvard University found that the incidence of early-onset cancers, including breast, colon, esophagus, kidney, liver, and pancreas, has dramatically increased around the world beginning around 1990. 'Since 1950, we found that each successive generation has a higher risk of early-onset cancer,' Dr. Ogino says. ‘This trend suggests GenZers are at a greater risk of developing cancer at an earlier age than their parents or grandparents.' The research project by Washington University School of Medicine in St Louis also found that accelerated biological aging may be associated with an increased risk of early-onset cancers in younger generations, as well.
While no one knows for sure what's driving this rise, research suggests it is quite possibly tied to our diet. Dr. Ogino points out that, in high-income countries such as the UK and the US, generations born since the 1950s have been exposed to increasing amounts of processed foods—high in fat, sugar, and salt and containing artificial flavors, colors, and industrial chemicals—and the latest generations have been exposed to them while still developing in the womb.
In the Chips
Look out, Nvidia. Here comes MatX. Founded by former Google AI software and chip designers Mike Gunter and Reiner Pope, MatX is focused on designing silicon specifically for processing the data needed to fuel large language models (LLMs). It is based in Silicon Valley and raised $25M, led by the AI investing duo of Nat Friedman and Daniel Gross.
Straight outta Silicon Valley
Google CEO Sundar Pichai told staffers in a heated 1,200-word memo stating the office is not a place to 'debate politics' after firing 28 Googlers for participating in 10-hour sit-ins at the search giant's offices in New York, Seattle, and Silicon Valley. During these protests, Google called the police to arrest nine employees. The center of controversy for the protest is Google's $1.2B 'Project Nimbus' contract with Israel's government.
“Google is a business and not a place to act in a way that disrupts co-workers or makes them feel unsafe, to attempt to use the company as a personal platform, or to fight over disruptive issues or debate politics. This is too important a moment for us as a company to be distracted. The workplace isn’t somewhere to “fight over disruptive issues or debate politics. When we come to work, our goal is to organize the world’s information and make it universally accessible and useful. That supersedes everything else, and I expect us to act with a focus that reflects that.”
—Google CEO Sundar Pichai memo to staff excerpts
Facebook and Instagram have similar policies at their Menlo Park headquarters, where staffers are instructed they cannot discuss issues including ‘health matters such as vaccine efficacy and abortion, legal matters such as pending legislation, political matters such as elections or political movements, and weapon ownership and rights.’
Sound like a reasonable policy to us…except for the fact that Zuck doesn't n’t obey his own rules. He and his wife, Priscilla Chan, donated $400 million to the Center for Tech and Civic Life, a non-profit organization that funds candidates that aligned with their personal COVID-19 pandemic opinions at the time—which has been proven hysterical and neurotics at best and highly abusive psychologically at worst. An analysis also found that 90% of the $144.2M CTCL spent in key swing states went to counties won by Biden, while only 10% went to counties won by Trump. But who is counting? We all know that the pigs on the Farm are always a little more equal than the other animals.
While these corporate practices should not be baked into law, we support their basic idea as conducive to a healthier, more inclusive corporate culture. In his book Democracy in America, Alexis de Tocqueville observed that we are a diverse and divided country. (Sound familiar?) If we hope to last, we must hold onto ‘intermediary institutions,’ our apolitical sanctuaries that bring us all together. The free market is the biggest of those institutions.
Who cares, for example, who the guy you are chest-bumping at the 49ers game after Christian McCaffery's 99-yard TD run voted for? All that matters at that moment is that you are both all about red and gold. That’s how it can be at work, school, church, and all our intermediary institutions that have apolitical goals that all participants can rally around.
At Cryptonite, we have to talk about everything because we are editors by trade, but we do have three team suggestions: 1) Don’t tell anybody who you are voting for, 2) Never use political labels, and 3) Don’t watch Cable news.🤮 The imposition of ideology on your employees is the behavioral practice of a cult, not a thriving enterprise.
Pura Vida (pure life)—Keep moving and avoid injury
Last week, we featured our health guru, Dr. Frank Lipman’s 16 biohacks to achieve wellness and longevity. This week, we present a summary of the good Doctor’s top recommended ways to keep moving without hurting yourself.
Movement improves everything: your metabolism and your microbiome, your sleep and all your body rhythms, your immunity, your stress response, and the overall balance in your life. The bottom line is we all should move as much as possible while being proactively mindful to avoid injury-free.
Update your warm-up/cool-down: Let go of the 20-second stretches. Warm up your muscles and connective tissues by slowly doing a version of the exercise you’re about to do, whether swimming, jogging, or cycling for 5 or 10 minutes at a relaxed pace.
Roll your tight, gummed-up Fascia away. The fascia is a tough membrane that is the casing for the entire muscular system, so when it tightens up, it restricts movement and throws off your entire gait. A foam roller can loosen your fascia by applying techniques you can learn from a therapist or online. Roll out the tension in your upper body and your quads, glutes, calves, deltoids, and pec. ‘Trust me, it’s worth it,’ says the good Doc.
Take a sauna—A sauna at least twice a week is a pleasurable way to combat muscle inflammation caused by vigorous exercise, stimulate healthy circulation, and support a robust immune system. Infra-red saunas are a perfect choice, as the heat directly penetrates the body.
Mix it up—Throw in a couple of different exercise activities every week to complement your regular ‘thing.’ to stay mentally and physically fresher. It will help stave off boredom and challenge your muscles and joints in different ways, lessening the chances of ‘repetitive stress’ injury.
Listen to your body—If you feel pain or achiness that goes beyond next-day muscle soreness, that’s your body telling you to back off and reassess your program. Or, at the very least, pay more attention to warming up, stretching, and foam rolling.
Start slow and increase gradually—The general rule of thumb is don’t ramp up until you can handle what you’re doing now without undue strain.
It’s all about recovery. Make sure to build at least a couple of rest days into your weekly schedule, and remember that rest can be an active form of rest, like a relaxing long walk.
Back to basics—Support everyday physical activity with good sleep and a healthy, no-carb, no-processed foods diet with plenty of high-fiber veggies to your microbiome and fight inflammation from the inside out. And, of course, don’t forget to hydrate!
Check out his full post here and subscribe to Dr. Lipman’s newsletter to achieve a more revived existence.
Cryptonite Partnership Opportunities
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Great article but do not understand your lack of taking responsibility with regards to Cryptonite owners of your Tokens???