CategoryBusiness and Finance
A Thoughtful Reader’s Reaction to Next Gen AI Hype
Recent hype at Wired Magazine about new personal assistant technology garnered a — perhaps unexpected — reaction
Why Is 23andMe — the Hot Gene Testing Startup — Now Worthless?
Birthed in Silicon Valley among high-tech go-getters, it should still be steaming along, right? But traditional bedrock business realities cursed it at its birthEmbattled genetic testing outfit 23andMe had a customer base of 14 million for its home DNA testing kits. Thus, many of us know at least someone who has discovered a partial Mongolian, West African, or even Neanderthal ancestry via the famous “spit kit.” The 2006 startup, birthed in Silicon Valley and riffing off the Human Genome Project (2000), had a dazzling “the future is now!” launch. The founder, Anne Wojcicki (pronounced as if “Wojisky”), was the daughter of “Godmother of Silicon Valley” Esther Wojcicki and sister of YouTube’s former CEO, Susan Wojcicki. For a time, she was married to Google co-founder Sergei Brin and had plenty of billionaire backers. Thus 23andMe raised $1.4 billion in funding. So why has the Read More ›
Cyber Plagiarism: When AI Systems Snatch Your Copyrighted Images
Outright copying of others’ images may put system’s owners in legal jeopardy. Let's look at U.S. legal decisions
Is New AI Driving the Mass Big Tech layoffs?
The jury’s out on whether that’s really what’s happening and, if so, whether it will improve profitability
Business Media Report That 2023 Was a Bad Year for Tech Startups
Productivity Increase Will Take Time in the Age of AI
An acceleration in productivity growth from AI isn’t right around the corner, despite promises by economists.
When will the AI-driven Productivity Revolution Begin?
Big corporations are slow to embrace AI tech
Aren’t US Treasury Bonds Supposed to be Safe?
How can you lose money selling treasury bonds?For context, read Bartlett’s two previous articles on the fall of SVB and interest rates. Some people are confused as to how you can lose money selling treasury bonds, since they are supposed to be “safe” assets (the government is not expected to default on its loans, and, if it does, the economy probably has bigger problems). Economist Bob Murphy put together a great explainer thread on Twitter, which I will largely follow here. Let’s say that there is an asset that always yields a 1% return every year on however much you have invested, but you never get the principal back except by selling it to someone else. Let us call this asset ABC, and let us say that it is Read More ›
Why Did the Tech Bubble Correspond with Low Interest Rates?
Ultimately, our economy’s deeper problems aren’t so much a result of “money” as they are bad allocations of resources.For context, read Bartlett’s article explaining the fall of SVB here. I wanted to make a quick note about why tech bubbles tend to correspond with low interest rate environments. Interest rates essentially dictate how long someone can wait before they need to produce something of real value. In a 20% interest rate environment, it will be evident really quickly if you are failing to produce something of value. Since essentially 1/5 of your capital disappears each year, if you aren’t doing something that will generate real profits quickly, you are sunk. You can’t paper over problems with more borrowing because the cost of that borrowing is so high. Additionally, in such an environment, the payoffs for investment need to be large Read More ›
What’s Going on at Silicon Valley Bank?
The bank's failure is making a lot of people nervous about their moneyMany people awoke this morning to news of a bank that suddenly collapsed – Silicon Valley Bank, or SVB. While information is still developing, I thought I would provide some background information on what is known so far. SVB is the go-to bank for Silicon Valley startups. Over the last few years, the tech bubble has been growing and growing and growing, focused especially around Silicon Valley. That meant a lot of banking was happening, and it was happening with SVB. That is where the various companies put their deposits. How does a bank make money? By lending out deposits. In 2021, at the height of the tech bubble (and, not coincidentally, at a historically low-interest rate environment). The bank did what most banks do Read More ›
Trend: Steeper Decline in TV, Hollywood — and Comic Books
It’s as if the public has simply lost the sense that the media represent the average watcher or reader — and that’s probably true in many casesWe’ve already noted the significant decline in circulation and collapse of trust in major newspapers (online or in print). But 2022 reported steep declines in other media as well. From the entertainment industry’s Variety mag, we learn that while there were some winners in TV — ESPN, crime shows, and digi-nets — most TV of all types continued to see losses, many of them double-digit losses. As commentator Don Surber noted, “The drop in viewers came despite an Olympics, a popular war and a federal election.” The drop in viewers is reflected in an overall drop in revenue, projected to continue. A highlight from Samba TV’s State of Viewership report: Gen Z and millennials are driving the shift away from Read More ›
PayPal Today Betrays Its Founders’ Vision for Democratizing Money
The payments processor, famously, now often drops customers for what appear to be political reasons, as Indian economist Rupa Subramanya explainsEarlier this year, we wrote about PayPal starting to “fine” users for “misinformation” and wrongthink. While there is certainly misinformation out there, the alarming Disinformation Governance Board proposal and the Twitter files revelations underline the limits of what Big Government, Big Tech, or Big Business can do beyond simply imposing an official opinion. Of course, the official opinion may be based on a faulty understanding of the problem. The banned individuals may merely be better informed. PayPal, famously, now often drops customers for what appear to be political reasons, as Indian economist Rupa Subramanya explains: One by one, they go to start their business day only to find a baffling message from their payments app informing them: “You can no Read More ›
Musk’s Tyrannical Turn With Twitter
While the political bias is gone, the ego bias seems to have just begunI was hopeful when Elon Musk took control of Twitter. As a longtime Musk skeptic in many areas, I thought that his move into Twitter would actually be a good thing. First of all, it matches his background better than Tesla. Twitter is a software play, and Musk’s actual expertise is in building software. Second, Twitter is just about software, not artificial intelligence, which tends to be where Musk gets into trouble. Finally, Musk has at least claimed to be a libertarian, though this seems to be limited to situations where he simply decides that he doesn’t want to do what is required of everyone else. When Musk first took control, it looked positive. Despite the incessant screaming of the Read More ›
Veteran News Hound: Why Not To Trust Mainstream Media Anymore
Matt Taibbi and Douglas Murray’s resounding triumph in the Munk debates sheds light on why mainstream media are dyingOn November 30, at the prestigious Munk Debates in Toronto, 20-year news veteran Matt Taibbi and author and columnist Douglas Murray faced off against New Yorker writer Malcolm Gladwell and New York Times columnist Michelle Goldberg on the question: “Be it resolved, don’t trust mainstream media. The outcome was remarkable: As Taibbi tells it: A pre-event vote of attendees and listeners showed 48% support for our “side,” versus 52% for theirs. 82% of thousands of audience members claimed to be willing to change their minds. They were telling the truth, as it turned out. In a bitter slugfest that featured tense confrontations, impassioned oratory (especially from Douglas), and several almost unbelievably petty exchanges, Douglas and I swung the vote 39% Read More ›
Understanding the Fall of FTX — the False Reality of Market Caps
Let’s have a look at the critical question that was never asked in the first place…In finance, the “market capitalization” or “market cap” of a security or currency is a simple way to evaluate the overall “value” of the total entity (this is also called “network value” in terms of a cryptocurrency). It is easiest to think about market caps in terms of stocks instead of currencies. In the stock market, if ABC Company is broken up into 100,000 shares, and the going market price is $3 per share, then the market cap of ABC is $300,000. Likewise for coins, if there are 100,000 coins available, and the current market price of the coin is $7, then the market cap of the coin will be $700,000. The idea behind the market cap is that, if Read More ›
Musk and Twitter: Why, Amid Pink Slips, the Sudden Virtue Parade?
Musk may or may not be the answer but he is sure not the problemIf Elon Musk has not invested his fortune in electric cars, he would be wise to consider soap operas… On the other hand, maybe he can continue to do the soap operas for free? Consider: After he bought Twitter, who can beat these headlines from the — suddenly — dreadfully earnest tech media? “After Twitter Staff Cuts, Survivors Face ‘Radio Silence’ ” Or “Elon’s paranoid purge.” Or a sudden love for China-owned Tik Tok. And get this: One tech writer primly informs: “[TikTok CEO Shou Zi] Chew’s comments, perhaps unintentionally, cut to one of the biggest question marks still looming over Musk’s embryonic tenure as Twitter’s owner: just how committed is he to keeping Twitter safe?” Twitter? Safe? Is TikTok Read More ›
Peter Thiel: The Multiverse Is a “Gateway Drug”
It’s a gateway drug to other crazy ideas, like the belief we live in a simulationBELLEVUE, WA — Speaking to tech leaders and investors at COSM 2022 in the Seattle area, entrepreneur Peter Thiel provocatively asked “why do so many people in Silicon Valley believe in the simulation hypothesis that the entire universe, the cosmos, is just a computer simulation? Why do they believe something as crazy as this?” Actually, noted Thiel, the belief that our world is a simulation has now faded somewhat: I think probably the peak belief in the simulation hypothesis was maybe something like a decade ago, maybe circa 2012 to 2015, and it has probably faded some. We’ll still have Gen Z people say that things are a glitch in the simulation or there’s still some sort of passive reference Read More ›
Tech bubble? Our Progress Towards Value to Users Has Slowed…
We should be wary of glowing forecasts when newer technologies don’t offer anywhere near as large benefitsToday’s new technologies, from virtual reality to nuclear fusion have recently received record investments from venture capitalists, but their revenues are not growing as fast as technologies of past decades. Startup losses are unprecedented — far larger than in past decades. Share prices and private valuations have also been collapsing in 2022. Optimists mostly focus on the good news and ignore these facts. They believe that the heavy funding for these new technologies is a good measure of potential and thus any criticism is unjustified. Here is their typical argument: Paul Krugman and other “experts” criticized the Internet, personal computers, and other technologies in their early years. But these technologies succeeded. Therefore, criticisms of the new technologies are unfounded — Read More ›
Control of Social Media: Changes in the Lineup
Not just Elon Musk but Ye West, Peter Thiel, and J.D. Vance have their hats in the ringThe social media field is seeing a wave of insurgents — not because it is profitable (it largely isn’t, just now) but perhaps because control is important for other purposes. Of course, whether we want to or not, we must begin with Musk and Twitter. Tech entrepreneur Elon Musk must now acquire Twitter by October 28 or the whole thing goes back to trial in a Delaware court, where the judiciary will likely be peeved with him over antics that waste court time. The only people who are really unhappy now are Twitter employees. Musk announced an intention to lay off 75% of them and they have responded with an open letter: The letter demands that Musk commits to preserving Read More ›