Marketing Report
Michiel Frackers: Build your own ChatGPT, an ex-Apple couple builds an AI pin and Ethereum breaks through $2,000

Michiel Frackers: Build your own ChatGPT, an ex-Apple couple builds an AI pin and Ethereum breaks through $2,000

Last week was busy and filled with travel days, so I was unable to follow the news closely. Instead, I saved interesting links and perused them yesterday. It is amazing to see all that is happening in technology in one week, especially within AI and crypto. I have tried to briefly summarize and comment on the most noteworthy developments. I hope it has not become too much of a shopping list of links.

OpenAI launches DIY GPT

OpenAI allows developers and ordinary people to share custom chatbots with the public through a "GPT Store," a proprietary app store where verified developers can upload their chatbots and make them available for users to download. In the coming months, developers will also be able to earn money based on how many people use their chatbot.

Venture Beat published a sort of match report from OpenAI's Developer Day, but the five examples of what is already being built with ChatGPT custom and the instruction on how to use GPT Builder are more relevant.

AI is an arms race and the generals are getting rich

OpenAI is paying $10 million to AI researchers by holding an employee stock sale that would nearly triple the startup's valuation to more than $80 billion. The company's recruiters are trying to lure away top artificial intelligence professionals from Google with millions of dollars and a simple message: join OpenAI now to lock in a stock package at the current valuation of $27 billion and benefit from the impending increase.  

This is a brave new world, because until now companies like Google and Apple were able to snatch talent away from startups by offering them an offer they couldn't refuse through a combination of guaranteed top salary (think four years guaranteed at $3 million) plus a minimum equivalent equity package. OpenAI now benefits from the fact that its valuation is rising much quicker than the market caps of Apple and Google.

By allowing new private investors to buy a portion of employees' stock, the employees of OpenAI can benefit from the increase in value much faster than in the traditional model where they have to wait for an IPO and sit out the subsequent lock up period. It is good to keep in mind that when Facebook went public in 2012, its market cap was similar to that of OpenAI today. Except that OpenAI is not expected to go public anytime soon.

It won't keep raining billions in the AI sector for long

OpenAI's stratospheric valuation will be of great concern to investors in independent competitors such as Anthropic (maker of Claude) and (maker of chatbot Pi). The market for applications like OpenAI's ChatGPT is very similar to the search engine market, in which Google has over 80% market share and the number two, Bing, less than 10%.

That makes it very risky for investors to invest in Anthropic and Inflection at valuations above roughly $5 billion, because the numbers two and three always get a lower valuation per customer or per dollar of revenue than the market leader. A thinning of the field of AI developers within a year therefore seems logical.

The AI Pin from Humane. Picture from the Humane website.

AI pin of a quarter of a billion

That said, this week's big news is undeniably that Humane, the company of former Apple employees Bethany Bongiorno and Imran Chaudhri, described by The Wall Street Journal as "spouses and co-founders" who have already raised nearly a quarter of a billion (!) dollars in funding, launched its first product: the Ai pin, or artificial intelligence pin, which you are supposed to wear on your clothes.

The pin weighs 55 grams (two ounces), about the weight of a tennis ball, is controlled by your voice to make phone calls and look up data (in OpenAI, of course, by Sam Altman, also one of the investors in Humane) and stands out mainly because it includes a camera to take pictures, but does not have a screen to read anything from.

Ars Technica doesn't like it: "The Human AI Pin is a bizarre cross between Google Glass and a pager. The Human AI Pin has no screen, no apps, and a creepy in-your-face camera." The laser projection, which allows you to project information onto your hand, is appreciated but seemingly more because of its high James Bond vibe. The lack of an app store for third-party apps is rightly seen as a major omission. Ars Technica continues: "It’s also too early to tell whether Humane’s hope that the Pin can help people to live more in the moment will prove true, or whether it will simply provide a new way to be unhealthily obsessed with technology."

The entire presentation video is interesting to watch, but perhaps not for the reasons the founders hope. First of all, I don't understand why you would buy a $699 device that can do little more than a smartphone, which everyone always carries with them and is not going to be replaced by an AI pin. To live stream with perhaps, from your chest? I don't see that market to become huge anytime soon.

Battery = perpetual power system?

Besides, I always get a serious itch from slogans and marketing-speak that make no sense. The pin's replaceable battery is called in Humane terms a "perpetual power system" and the orange light that indicates the camera is on is a "trust light." That's like buying a gold fish and naming it Jaws.

What I can greatly appreciate, however, is the straight face of Imran Chaudhri with which he presents his devices. In the video, it appears that he and Ms. Bongiorno do not have a good morning at all, but look like they are delivering a eulogy at the funeral of a beloved relative. This is so much nicer than those pumped-up marketing figures who coo "we are so excited" when announcing a new printer driver!

I also like that Mr. Chaudhri is humble enough to function as a "second-in-command" under his wife Ms. Bongiorno, the CEO. I don't like it enough to buy an Ai pin anytime soon, but I do wish them all the best. It's just lovely to see people try new, daring things.

Spotlight 9: BlackRock believes in Ethereum

This is what happens when BlackRock, the world's largest asset manager, sets its sights on Ethereum.

I have often written enthusiastically about Ethereum, the most popular development platform for blockchain applications, incidentally also adorned with a wonderful slogan: "Ethereum, the world's computer." But because it is not entirely clear what the total number of ETH in circulation will be, one can have doubts about Ethereum as an investment. Function and value are often not correlated. Consider the value of tap water (and in developed nations, potable tap water) to our lives and the low price we pay for it.

The unsurpassed Meltem Demirors explained on CNBC why Bitcoin's share price continued to rise and ETH jumped over 10% this week. The news that BlackRock plans to introduce an ETF (Exchange Traded Fund) for Bitcoin in addition to one for Ethereum is a huge catalyst for the end of the crypto winter.

A BlackRock ETF for Bitcoin and Ethereum, subject to SEC approval of course, offers investors a more accessible and potentially safer way to invest in cryptocurrencies without the technical complexities of buying, storing and managing cryptocurrencies directly. Purchases are made like investing in a regular stock on a conventional exchange, with the underlying management and security of the digital currencies provided by BlackRock.

it's easy to forget how big BlackRock is because the nearly $10 trillion under management is an incomprehensible large number. But $10 trillion is ten thousand times a billion(!). Once BlackRock can offer Bitcoin and Ethereum to its clients and even only 1% goes into crypto, that would immediately mean almost 10% additional capital invested in the crypto market.

Other short news

The BBC almost gloats over the collapse of the NFT market and does report that Bitcoin is down about 50% compared to its peak, without mentioning that Bitcoin is up a whopping 880% compared to five years ago. Ethereum's 1762% rise in the last five years is not mentioned at all. Mediocre journalism.

Ben Evans, in his excellent newsletter on the demise of Twitter under the reign of Elon Musk, writes this wonderful sentence: "It turns out that social networks are harder than rocket science."

Just before the US export ban, the Chinese company 01.AI quickly purchased chips from Nvidia for a year and a half. CEO Kai-Fu Lee laments the trade war: "We will have two parallel universes. Americans will supply their products and technologies to the U.S. and other countries, and Chinese companies will build for China and whoever uses Chinese products. The reality is that they will not compete very much in the same market."

Google is in talks to invest hundreds of millions of dollars in Character.AI, as the fast-growing ai-chatbot startup seeks capital to train models and keep up with user demand, according to Reuters. I doubt that user demand, because I don't see so many people eager to engage in a conversation with a fake psychologist or banana chatbot.

I never understood why a landlord of overly trendy, expensive office space would be worth $50 billion. Apparently most investors agreed.

Climate change increases the risk of avalanches, but smart techniques like patrolling drones help keep it safe.


Michiel Frackers is the Chairman of Bluenote and Chairman of Blue City Solutions

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