Dear Reader,
Yesterday, we had a look at one of the “schemes” from the World Economic Forum (WEF).
As with all of them, the WEF paints a utopian vision for the greater good (as “they” see it), and intentionally avoids much substance. After all, “they” wouldn’t want to concern themselves with the dirty details.
But dirty is exactly what we’re going to get.
I noted yesterday that the WEF wants to create a “circular economy.” Instead of “take, make, waste,” they envision the world will “take, make; take make.” It must be the semicolon in the middle that ties it all together… but it still doesn’t make sense to me.
The WEF’s suggestion is that we all just recycle our used electric vehicle (EV) batteries, and by doing so, we won’t have to mine new minerals. The point that I made is that we have an insignificant amount of EV batteries to recycle.
For the foreseeable future, materials from EV battery recycling will barely put a dent in new EV battery production required to meet the current lofty goals for 2030, or even those of 2040.
My original claim lacked specificity, which is why I wanted to dig deeper today. Let’s get down to the nitty-gritty.
In the chart below, we can compare the difference in minerals used in EVs to the minerals used in an internal combustion engine (ICE) vehicle:
Not only do EVs use more copper and manganese than ICEs, but they also use lithium, nickel, cobalt, graphite, zinc, and other rare Earth metals. All told, an EV requires at least 6.25 times the amount of minerals than that of an ICE in manufacturing.
And with the exception of small amounts that can be reclaimed from future recycling, it all has to be mined and extracted from the Earth. And that mining takes place with very powerful mining and excavation equipment powered by fossil fuels.
I won’t gloss over any “small” details.
How small is the amount of new battery production that can come from recycling and reusing old batteries? The IEA puts the amount at a tiny 0.3% by 2030. That means 99.7% of the needed minerals must come from new mining.
And by 2040, that number only grows to 8.1% from recycled materials.
Think about that: 17 years from now, the world will still need new mining and exploitation to dig up 91.9% of all minerals it needs to be “clean” with EVs and “clean” energy. Still sounds pretty dirty to me.
One thing is clear… These policies aren’t clean at all. And they do nothing at all to solve the most critical issue for clean energy – how to produce clean, baseload electricity that the world can rely on 24/7.
So what is it? What are “they” up to? Why do this if it’s dirty and not clean? As with so many crazy things that we see, it usually comes down to money, power, and control.
We’ve been talking a lot about ChatGPT recently. For the sake of new readers, this is OpenAI’s generative artificial intelligence (AI). And it’s incredibly powerful.
ChatGPT can answer basic questions and write essays about any given topic. It can also compare and contrast different philosophies and opinions. And the AI can even write software code upon command.
Adoption of ChatGPT has spread so fast that the New York City Department of Education banned the use of the technology last week.
And get this: Word is out that Google issued a “code red” internally in response to this incredible AI. Google is afraid that ChatGPT could impair its advertisement-driven business model tremendously. And for good reason…
Microsoft just announced that it intends to incorporate ChatGPT into its search engine Bing, as well as the Microsoft Office suite of products. I cannot overstate what an incredible shift this could cause.
As we know, Google Search is by far the most dominant search engine to date. It has been for many years now. But the fact is, Google Search caters to advertisers – not consumers.
Think about it this way: When we’re looking for something, we enter a specific query into the search engine. Then Google produces countless links to websites that may or may not contain what we’re looking for.
These links are organized such that those companies and sites that have paid for either pay-per-click (PPC) ads or search engine optimization (SEO) are displayed first. That’s regardless of whether or not they’re the best match for our search query.
And then we’re left to hunt through the links Google provided to see if any of them contain what we were originally searching for.
Now think about a search engine powered by ChatGPT. It would function completely differently.
For example, let’s say we wanted to compare and contrast two different economic schools of thought. If we put that search into Google, we’re going to have to go down the rabbit hole of sorting through links to gather and assess the information provided.
But if we put that search query into Bing, which is powered by ChatGPT, the AI could simply compare and contrast the two economic schools for us. And it could do so in a matter of seconds. The days of hunting through links would be over.
That alone is transformational. And then if we look at it – there’s no place for advertisers in that model. The AI simply provides the requested information without funneling us to content paid for by advertisers.
This is why Google issued a “code red” to its team. It knows that it has real competition coming in the search space for the first time.
So this is a brilliant move by Microsoft. And I can’t help but get excited about the integration of ChatGPT into applications like Outlook, Word, and PowerPoint.
We looked at how Ellie the AI can help users manage and write emails earlier this week. Well, ChatGPT could perform the same tasks within Outlook. When we need to craft an email, we could just put the AI to work.
The same thing is true if we’re writing something in Word or putting together a PowerPoint presentation. We could just tell ChatGPT what we’re working on. Then the AI could produce content or go out and grab data or visuals for us to insert into our work.
This is something that would improve our productivity dramatically. And that will radically transform Microsoft’s suite of services.
And think about this: Microsoft has billions of users around the world. Every single one of them is about to be empowered with an advanced AI assistant. That’s absolutely remarkable.
This is never something I thought I would say in The Bleeding Edge, but Microsoft (MSFT) is suddenly a company to watch.
Not only will ChatGPT transform its services, but Microsoft is also a big investor in OpenAI. If we remember, Microsoft invested $1 billion in the company back in 2019. Shares in OpenAI are now rumored to be trading at a $29 billion valuation. So Microsoft is certainly way up on its original investment.
And now there are rumors that Microsoft is looking to invest another $10 billion into OpenAI. It’s possible that would give the tech giant a controlling interest in the start-up. We just don’t know yet.
Not only should we be looking closely at OpenAI and Microsoft as investors, but we should also expect a major product upgrade from Microsoft that will impact those of us who use Microsoft’s products daily for work or school.
I wouldn’t recommend the stock at these levels, as it’s too expensive from a valuation multiple perspective in this market. But if we get another strong pullback in the market, MSFT stock may become a great investment.
Last week was a big week in Las Vegas, Nevada. It was home to the annual Consumer Electronics Show (CES), the largest consumer electronics conference held each year during the first week of January.
I always keep an eye out for big developments at CES. But there really weren’t too many that caught my eye this year.
Ironically, the product everybody was buzzing about at the conference didn’t have a presence at the event. That’s Apple’s XR headset.
Regular readers may remember that XR stands for extended reality. It’s the name Apple gave to its upcoming augmented reality (AR) product.
Even though Apple didn’t display the XR headset at CES, word is out that Apple has given early versions of it to its best developers. They’re now working to develop software applications for the headset.
This is fairly normal for Apple. It typically gives out prototypes of new products to strategic developers well in advance of a product launch. That way, the developers can create a robust suite of applications that will be available to consumers immediately.
And the rumor going around now is that Apple will announce the XR headset at its Worldwide Developers Conference in June. That’s just five months away.
This is almost certainly a precursor to a fall launch – just as I’ve predicted. We’ll likely see Apple release the high-end version of its XR headset in September. And that will be followed by less-expensive versions in the months that follow.
So it’s going to be an exciting year. Apple’s XR headset launch will officially mark the beginning of AR going mainstream. And as usual, I expect that Apple’s product will be a pacesetter for the industry.
As we’ve discussed, OpenAI and its generative AI ChatGPT have been hogging all the spotlight since its release in early December. But ChatGPT isn’t the only game in town.
A start-up called Anthropic is working on a similar generative AI called Claude. Anthropic is taking a different path, however. It calls it “constitutional AI.”
That’s because Anthropic’s developers wrote a series of principles for Claude. We can think of them as a constitution. They govern how the AI responds to inquiries and interacts with humans.
Anthropic hasn’t released these principles to the public yet. But the team has stated that they’re grounded in three basic concepts: beneficence, nonmaleficence, and autonomy.
Taken together, the concepts mean the AI will seek to maximize positive impact, avoid giving harmful advice, and respect freedom of choice. That’s another way of saying the AI will be unbiased.
So I’m very interested to see Claude in action. Anthropic hasn’t released it to the public yet, but I suspect it will in the coming weeks.
And there’s an interesting twist in this story… As I was researching Anthropic, I was a bit shocked to see its list of early stage investors.
The company raised $580 million in its Series B round last April. The round was led by none other than Sam Bankman-Fried (SBF) – the fallen CEO of crypto exchange FTX. We now know that SBF was stealing customer funds for both personal and business use.
And get this: the head of Alameda Research, Caroline Ellison, was an investor in Anthropic’s Series B round as well. Alameda was owned by SBF and was complicit in its malfeasance.
Ellison has already pled guilty to her crimes. And SBF was arrested and will undergo trial as well.
So here we have two notorious criminals who absconded with customer funds – some or all of which almost certainly went into this investment.
That raises the question: Will the court force these two to sell their shares of Anthropic in the secondary market in order to return the funds to customers?
That will be interesting to see, as ironically, Anthropic is a fantastic investment opportunity.
And, of course, I should point out that nobody knew FTX was a fraud at the time of Anthropic’s Series B round last April. So we shouldn’t attribute any wrongdoing to the start-up here. It just happens to be caught up in an interesting web.
Either way, Anthropic is one to watch going forward. I’ll share more information on its generative AI Claude as soon as it becomes available.
Regards,
Jeff Brown
Editor, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
