Weekend Reading #290
This is the two-hundred-and-ninetieth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 2nd November 2024
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What we're thinking.
This week was a strange one with large cap tech company results dominating both the headlines and seemingly the flows which were a little more idiosyncratic. With the US election coming up next week the best word to describe what we feel is EXHAUSTED. We are already completely saturated with political news, opinions and tribalism. The bad news is that what we have seen is nothing compared to what’s coming whichever way this unfolds. We also finally saw a push from Bitcoin this week towards a new all-time-high, but it failed this attempt and pulled back sharply right on month-end.
We also had the UK autumn statement this week in which the new Labour chancellor revealed a sweeping increase in taxes for the UK, alongside revelations of some pretty punchy numbers for a budget black hole left behind by the previous tory government. Turns out the Tories weren’t as conservative as their party’s name suggested, though considering how much was spent and borrowed over Covid and the subsequent rounds of drama, it wasn’t a total surprise. Unfortunately, the new budget seems to have done the damage it sought to the country’s top income cohorts by delivering taxes explicitly aimed at them (private school VAT, tax on PE carried interest etc.) even if the efficacy of these policies remains to be seen, but not pandered sufficiently to the other end of the income spectrum – from farmers who now effectively can’t afford to die since farmland has been included into scope for inheritance tax, to care providers who find themselves saddled with a higher cost of employing carers thanks to the broadened scope of National Insurance, it seems like this is the budget managed to leave everyone unhappy. Would’ve been the right outcome for a negotiation, if that old adage is to be believed!
What we're listening to.
For some reason we haven’t yet written about the best story in crypto at the moment. It’s a meme coin called Goatseus Maximus or GOAT. GOAT has zero theoretical value or pretence of value just like the other meme coins but what makes it interesting is that its fortune has been driven by an X account called Terminal of Truth. Terminal of Truth is an LLM, pure AI, and has no human influence. It was trained on many things one of which is the history of internet culture and naturally its forte is memes. Somebody smart (unrelated to the LLM) created a meme coin called GOAT and introduced the AI to it. It then became obsessed with it and marketed it incessantly. It’s become a cultural micro-phenomenon with the market cap of GOAT reaching $860m last week. Funnily enough it involves Marc Andreessen, who picked up on the project some months ago and sent the AI a research grant. He or A16Z don’t have any ownership but his podcast last week gives a superb summary and inside explanation of this phenomenon and how it came about. Highly recommend this one. Andreessen also mentions a site, Infinite Backrooms, which allows LLM’s to chat with each other. For a view of a dystopian near future its worth checking out too! DC
What we're reading.
Dario Amodei is the founder and CEO of Anthropic, purveyor of the Claude LLM, competitor to ChatGPT. Courtesy of Dominic Cummings’ blog I found a link to an essay written by Amodei which attempts to imagine a world of abundance where AI solves a massive number of problems. It not only attempts to answer what can be solved but also quite a bit of how exactly this would happen. For all the doom and gloom about AI risks, this was a refreshing read.
On the topic of AI, this is another weird one. Most people assume that generative AI for illicit purposes would be used mainly by men but in China, there have been some fascinating developments with women and their AI “boyfriends”. This excellent piece from ChinaTalk tells of how young Chinese women are falling for their LLMs. It’s not great business but that hasn’t stopped the proliferation of these apps.
I also finished this week a shortish book by a sci-fi author named Martha Wells called All Systems Red. It’s really cool and very different to most other stuff in that the protagonist (the book is written in first person) is a droid or SecUnit which calls itself “Murderbot”. The story is written from its perspective as it and its team of humans explore a new planet when things start to go wrong. Good fun and there are lots more in the series about the exploits of this droid, which watches serials surreptitiously in its spare time. DC
In a not-so-surprising turn of events, the sanctions card got played by China on a US company, with drone maker Skydio being blocked from being supplied with batteries from China. Equally unsurprising was the reaction from the company, asserting that the sanctions were an anti-competitive measure aimed at taking down a successful American drone maker. The Chinese rationale, however, was that Skydio was supplying drones to Taiwan and thus represented a national security threat. Whatever the underlying reasons may be, it’s becoming clear that the sanctions game isn’t a uniquely US measure, and that the dependencies on an offshore supply chain are not unique to this case. Unfortunately, it’s just another incentive for a rolling back of the globalisation we’ve seen in the past decades – certainly regardless of who gets into the White House next.
They say one man’s trash is another man’s treasure, and it seems like a new treasure trove has just been born – recycling old solar panels and wind turbines. The irony to me in this entire article is how it goes on about how waste recycling of solar panels and turbines (which both happen to be remarkably toxic and energy intensive respectively to make) can be a great business, implying that renewables... actually generate enough waste to be a viably big business. As it happens, Forbes did a tally of total lifetime carbon footprint of renewables, and while renewables still outperform coal (no surprise), the winner remained the OG zero-emissions power source: nuclear. EL