Dear Reader,
Last week, I had the great pleasure of being a very rare return guest on the Glenn Beck video podcast.
So much has happened in the world of tech and biotech since we last sat down in the studio together, so naturally we had a lot to talk about.
I don’t think our timing could have been better, either. Glenn has been passionate about exploring artificial intelligence (AI) and its future implications. Given the developments in generate AI in just the last three months, we had a lot to talk about.
We explored how this technology will change our daily lives and how we’ll feel as if we all have a personal executive assistant helping us throughout the day. We also examined how this technology can be distorted and heavily biased, potentially creating even greater societal problems.
I also gave an example on how this technology could democratize access to a first-class education by making it accessible to every child on the planet. And if anyone is wondering what it means to be “AIsexual”, you’ll have to listen to find out.
The topic of the state of clean energy and nuclear fusion was also part of the discussion. It’s something that we’re both quite passionate about, and I provided some guidance on how quickly things are developing. (Hint: it’s very positive news.)
We also discussed what will not only become one of the biggest events of the year, but one of the most important moments in history, and it’s just weeks away. It will literally transform an industry for reasons that I explained, and it will also shift the trajectory of humanity.
If you have some time, I’d like to encourage you to view the podcast with Glenn. You can click the image below to view the full episode.
The conversational format is not only fun, but it gives me more latitude to discuss the impacts of these technological developments in more depth than I can do in The Bleeding Edge. I hope you enjoy it.
We explored just a few weeks ago how venture capitalists (VCs) are pouring an avalanche of money into generative artificial intelligence (AI) companies this year. I would argue there’s more money looking to invest than there are generative AI companies to invest in. This is the hottest area of high tech right now.
Well, there’s another generative AI company that’s on the rise. It’s called Cohere. And it’s backed by some heavy hitters in AI.
Cohere is developing a generative AI similar to OpenAI’s ChatGPT and Google’s Bard.
Like ChatGPT and Bard, Cohere’s AI will be able to have intelligent conversations with humans and create content on demand. The AI will also be able to classify objects and text. And it will even be able to automatically capture the semantic meaning of a text.
That said, Cohere’s taking a different approach in that it plans to focus on the enterprise market. It’s creating Application Programming Interfaces (APIs) that will allow any enterprise or software application to “hook into” its generative AI.
In other words, Cohere will empower companies to create their own AI products using its technology. What’s more, Cohere plans to be business neutral. Here’s what I mean…
As we know, Microsoft now owns around 75% of OpenAI. As such, ChatGPT is featured in Microsoft’s suite of products… but Microsoft’s control of OpenAI will limit its adoption by other enterprise companies.
In just the same way Google is integrating Bard into its own suite of products… but Bard won’t be found in any products from Google’s competitors.
Cohere, on the other hand, plans to avoid any exclusivity. It will make its AI available to anyone who’s willing to pay for it. That means the AI will be available on all major cloud platforms.
I love this approach. This model is what will accelerate all kinds of new applications for generative AI. Consumers will benefit from the open access business model as it will spurn on new product innovation.
Cohere has strong backing already, and it’s currently raising $200 million at a $6 billion valuation. That’s incredible for a company that’s only been around for a few years.
Cohere’s investor list includes Google, NVIDIA, Geoffrey Hinton, and Ian Goodfellow. Of course, Google and NVIDIA are giants in the tech industry. As for Hinton and Goodfellow – they are very prominent computer scientists.
Hinton is known as one of the godfathers of AI and neural network technology. He even won the Turing Award in 2018. This is equivalent to a Nobel Prize for computer science and AI.
And Goodfellow is credited as the inventor of generative adversarial networks. He’s written a comprehensive book on the subject matter, a copy of which I keep on my bookshelf. And he’s been cited by MIT on several occasions.
This is a powerhouse company that is about to get a large injection of capital and will be one to watch this year as a competitor to OpenAI.
MIT just put out some incredible new research around screen technology. And it will likely impact our consumer electronics – televisions, tablets, smartphones, etc. – soon.
For years these screens have used standard light-emitting diode (LED) technology. This was a big jump over the screen tech of yesteryear. It’s only recently that the industry migrated to organic LED (OLED) technology, which provides richer colors and improved resolution.
And the next generation of screen technology is centered around microLEDs. These are tiny LEDs about four microns wide. That means engineers can pack about 5,000 microLEDs into a square inch. And that makes screen resolution even better.
LEDs work by emitting light when an electric current flows through them. Typically, screens consist of red, green, and blue LEDs in repeating patterns side-by-side.
That way, they can generate any possible color. It’s just a matter of changing the voltage as the current flows through the LED pattern.
Here’s a visual of the horizontal LED pattern:
Source: ResearchGate
We can see the alternating pattern of red, blue, and green LEDs row upon row.
This is how standard LED or OLED technology is used to produce a screen. But MIT’s new research demonstrates a better approach.
Rather than lining up the red, green, and blue LEDs side-by-side, MIT’s new methodology stacks them on top of each other. This improves resolution even more. And it enables ultra-thin LED screens.
Here’s what it looks like:
Source: MIT
Very thin sheets of LEDs are manufactured of each color and then laid on top of one another, resulting in a three-dimensional stacking of the LEDs. This enables an even tighter packing of LEDs per square inch, which results in improved resolution.
We may be asking – why is this important? So our TVs and smartphones will look a little better?
The answer is that this approach is going to be perfect for augmented reality (AR) and virtual reality (VR) devices. The visible impact of this new technology will be more recognizable with smaller screens. And any application where the visual experience needs to be completely immersive will want to use this kind of screen technology.
Obviously, there are some big investment implications here. The big question is – who is going to license this technology and commercialize it? Will it be a publicly traded company? Or will a new private tech company spin out to commercialize the new screen technology?
That’s what I’ll be watching for closely in the months to come.
Rivian just made an announcement that raised an eyebrow. The company just confirmed that its new strategic product development is to manufacture electric bicycles (e-bikes).
If we remember, Rivian was a hot name prior to the crash in 2022. The company designed its own fully electric pickup truck. And it originally filed to go public at an astounding $80 billion valuation despite its inconsequential revenues (less than $1 million).
The company had delivered only a few trucks at the time. And it’s initial public offering (IPO) filing was riddled with holes and question marks.
As we discussed, Rivian presented itself as a competitor to Tesla. But I warned investors that it was no such thing.
Rivian is nothing more than an electric vehicle (EV) maker with economics that are worse than a traditional automotive manufacturer. It doesn’t make the technology that goes into its EVs. It doesn’t manufacture its own EV batteries. Nor does it have any AI-based self-driving tech.
And as long-time readers know, that’s what sets Tesla apart. Tesla is one of the world’s most successful AI companies.
That’s why I predicted shares of Rivian (RIVN) would have to fall 70-90% after its IPO for the valuation to make sense. And that’s what we’ve seen.
As we can see, Rivian is down 89% from its post-IPO high back in November 2021.
Now, after such a dramatic crash, it’s tempting to think that shares are “on sale.” That’s not the case. And the decision to launch an e-bike product is cause for concern.
The question we have to ask is – why is Rivian going to start making e-bikes? That’s a completely different business… with a different target market.
Here’s what I think is going on…
We’ve talked before about how there’s a dramatic shortage of the lithium needed to produce EV batteries. Tesla has secured its supply chain to ensure it can get enough batteries to meet its production goals. But no other car maker has been able to follow suit. That includes Rivian.
In fact, Rivian admitted last year that the battery shortage is far worse than most people realize. The company stated that it’s far more concerning than the semiconductor shortage the auto industry faced.
I believe Rivian has come to terms with the fact that it simply won’t be able to procure enough EV batteries to meet its original production targets. There’s just no path to profitability or free cash flow right now.
So the introduction of e-bikes strikes me as a desperate move. To me, this looks like something a company does when it’s having trouble with its core business.
The bottom line is that investors should continue to avoid Rivian. Without strategic supply chain agreements to ensure EV batteries, there is simply too much risk to the downside with a company like Rivian, which is burning through cash.
It’s consuming so much cash, I expect it will have to raise additional capital in the market to stay alive next year. That will cause further dilution in the stock.
Sudden product pivots – or new product introductions that are starkly different from the core business – are always something to look out for. The context should always be understood, but they are usually red flags. I think this time is no different.
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.
