Elon Musk and his exes, and Apple CEO Tim Cook lost AI top talent to Google, but wins with savings accounts

This week, almost all tech news seemed to be about artificial intelligence. After all, major innovations in AI capture the imagination and are recognizable to all, whereas a breakthrough in biotechnology, for example, is often literally visible only through a microscope to a limited group of experts.

Why do you need $300 million when you just raised $10 billion?

When $300 million dollars is invested by top investors for just over one (1) percent of OpenAI, the company that is the creator of ChatGPT, that deserves extensive attention. Especially considering that Microsoft invested $10 billion (!) in OpenAI less than three months ago, having already put a billion into the company in 2019. That 11 billion surely hasn't run out yet, so the question arises as to why OpenAI held this additional round of investment.

The main reason OpenAI wants to have a strong relationship with some of the biggest tech investors in the world is the burgeoning battle for the AI market. The time is approaching when really big money is needed, think billions rather than millions, for a company to join the battle of giants such as Google, Apple, Microsoft and Amazon who are all competing in this market. After all, AI is too important for all players to ignore. In fact, for Google, the success of OpenAI is life-threatening.

With shareholders behind it like Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, K2 Global and Founders Fund (from Peter Thiel, the legendary investor in Facebook and Palantir, among others), OpenAI can now operate independently of partner Microsoft. With an estimated market value of $27 billion to $29 billion, OpenAI is already currently worth more than, to name a crossroad, companies such as Spotify and vaccine maker BioNTech, companies that have also successfully capitalized on major global trends.

CEOs Tim Cook and Sundar Pichai battle for AI talent

Meanwhile, in the race for the best AI technology, Apple with Siri and Amazon with Alexa are far behind OpenAI. The Information reported this week that three of Apple's top programmers therefore made the move to Google, despite attempts by Apple CEO Tim Cook to retain them. The personal offer from Alphabet CEO Sundar Pichai, who is committed to catching up with OpenAI, was apparently irresistible. Would any CEO of a European or Asian publicly traded company ever have made a personal effort to attract programmers, or to retain them, as Cook and Pichai are doing?

How difficult it is to make a good AI application proved Snapchat, which received a 1 for the "My AI" feature from users, urging them to remove it from the app. It was not Snap's week, which saw revenue fall after which the stock slumped 17%. Dropbox announced it was laying off 16% of its staff while investing heavily in attracting new AI developers. This indicates that it is difficult, if not impossible, to retrain programmers to become AI developers.

Elon Musk and his ex and X-es

The wait is on for Elon Musk to get involved in the AI war with a company, but he seems too busy ruining Twitter. He does constantly criticize OpenAI and CEO Sam Altman since he sold his stake in OpenAI to Microsoft. It is remarkable, to say the least, that Musk called for a sort of six-month moratorium in AI development in an open letter, but in the meantime continues to work on funding an AI startup of his own, which he alternately calls TruthGPT or X-AI. That X should normally be in there from Musk; he previously started X.com and, of course, SpaceX. It's a miracle it's Tesla and not Texla. His latest son is named X ? A-Xii and the ? is in the poor kid's name because it is the elven spelling of the term AI.

Musk's baby mama, Canadian artiste Grimes, stood out this week by giving permission to use her voice in AI-generated music: 'I'll split 50% royalties on any successful AI generated song that uses my voice. Same deal as I would with any artist i collab with. Feel free to use my voice without penalty.' This is especially notable because there is concern that AI will make the entire profession of voice actors obsolete. It will be interesting to follow what the implications will be for singers.

At last: Apple is going to make mincemeat of the banks and does it with... Goldman Sachs?

It had been expected for years and last week it was here: Apple made its entrance into the banking world. The choice of Goldman Sachs as a partner remains remarkable, because Apple hardly uses the Goldman brand but uses the prestigious bank mainly for its banking license and as a white label handler of savings transactions. While Apple rarely, if ever, buys market share on the basis of price, when it comes to savings accounts the high interest rate stands out: 4.15%, as much as 10 times higher than the national average in the US.

What is typical of Apple, however, is its great user-friendliness. The first step is to apply for an Apple Card, a credit card, which unfortunately is only available in the U.S. for now. All spending via that card comes standard with 1% to 3% cash back of the purchase amount in the form of what Apple has called "Daily Cash," a balance that is calculated and credited daily. Those who then open a savings account from the Apple Wallet and link it to the Apple Card, an action of no more than a few clicks, will see Daily Cash credited to their savings account daily and automatically receive the high interest rate of 4.15%. The savings account is free, there is no minimum deposit and there are no penalties if balances are withdrawn from the savings account. It is also possible to transfer funds from other banks to the Apple-Goldman savings account.

And precisely the latter is a nightmare for traditional banks. Because while there are other, lesser-known banks, giving even higher savings rates, not a single one comes close to the level of trust that Apple has. The combination of Apple Card with Apple Pay and the Apple Wallet is so seamless and simple that it will be difficult for banks to compete. It seems plausible that European banks will launch a hefty lobby in Brussels, combined with legal proceedings, to make it difficult for Apple to enter the European market in the same way it did in the U.S.

Event: Consensus 2023

Nearly fifteen thousand people attended the leading crypto event Consensus in Austin, Texas last week, and that doesn't include the types who are too stingy to buy a conference ticket because they think they already know everything and want to convince you that the best networking happens in the pub. The noises from Austin were universally positive, especially about the quality of the projects that survived the crypto winter. I found the most notable contribution to Consensus, viewed from a distance because I wasn't there myself, to be the interview with journalist Brady Dale, whose book about Sam Bankman-Fried of FTX will soon be published. Dale emphatically points to decentralized finance, DeFi, as the main solution against fraud and mismanagement, precisely where there is no central party like a stock exchange such as FTX. I also found it striking that Dale specifically mentions memecoin Dogecoin as a relevant crypto alongside Bitcoin and Ethereum:

?'To me, Dogecoin is the chain that said: A story, a character, a concept can have a value, and if a community buys into that character and collaborates in a distributed way to make the idea bigger, the value of the concept will grow and so its coin will grow. Dogecoin really brought that home. It's not just about?DOGE, it's about that whole notion of collaborating around a concept, and that's why my bet is Dogecoin will be the comeback kid of blockchains again and again, for some time to come.'

?Good links

·?????Check out this link to some particularly practical prompts to use yourself on ChatGPT.

·?????Startup funding is under severe pressure. These four charts show that, and in Miami, investment in startups actually dropped over 90%. Partly a result of the focus in that region on crypto startups, which were struggling.

·?????In Europe, more and more investors are asking startup founders not to pay themselves a salary. There are five reasons why they should.

·?????Unknown person identifies nearly 1,000 Bitcoin wallets from Russian secret services. Very clever.

·?????The U.S. government is about to take over First Republic Bank.

Spotlight 9

Reader Raoul Kuiper rightly asked me why I did include Bitcoin in this portfolio when I don't own it myself because of its energy consumption and associated carbon emissions. By way of explanation: I created this fictitious Spotlight 9 portfolio to track sentiment in the tech world on a weekly basis. I think when, as happened last week, virtually all major tech companies plus the Dow Jones and S&P 500 are all down, that is relevant to the entire world of technology and innovation. I included Bitcoin and Ethereum because those are the most widely held assets of the hundreds of millions of people investing in crypto worldwide. Of the Spotlight 9, I personally find Microsoft, Apple and Ethereum interesting. The projects and companies I find otherwise fascinating, such as Polygon (MATIC), are mostly too small to have an impact on stock market sentiment and the economy and are therefore not included in the Spotlight 9.

?Amazon, Alphabet (Google), Microsoft and Meta published good quarterly earnings this week, and Microsoft and Meta in particular benefited. Microsoft is expected to benefit greatly from the integration of AI, based in part on technology from OpenAI, into its various products and services. Zuckerberg explained to investors that Meta uses a lot of AI to better target their TikTok competitor Instagram Reels, and that struck a chord: Meta shares rose nearly 13% over the last 5 days.

?It was, to conclude, the week of AI in every way.