395: Squeezing Big Clouds, TV vs YouTube, Constellation Software, China Censors Afraid of LLMs, ARM IPO, Creatine, and Terminator 2

"It has higher ROP (return on praise)"

The more clearly you understand yourself and your emotions, the more you become a lover of what is. ―Baruch Spinoza

📞🤖😈 Do you remember when Google showed a demo of the Google Duplex Assistant making make phone calls and appointments..? (that was back in 2018 — time flies, McFly!)

When do we get a demo of Sydney making angry customer support phone calls for us? There’s an untapped market right there! (I’m picturing the Joker from The Dark Knight dressed as a nurse, on the phone)

🤔💭 🛑✋🙈💡🪫 While discussing the “self-deterring trap” from the intro of Edition #394 with friend-of-the-show and OG supporter Nick Ellis (💚 🥃 🎩), this thought came to mind:

There is *huge* creative potential in the world, and only a tiny fraction of it gets released… It’s kind of like if humanity had never discovered hydrocarbons, and all that stored energy stayed buried underground forever.

Well, there’s a Ghawar Field of untapped creativity out there — how can we make it flow?

I wish our society was better at encouraging those that don’t yet create to go for it, rather than heap ever more praise and accolades on those that are already successful at it.

It has higher ROP (return on praise).

I get the notion that “if not getting positive feedback is enough to stop you, you weren’t going to make it anyway, etc”. It sounds great. But I think it’s missing some nuance.

Yes, some people are great at pushing through brick walls and eating glass, at being self-reliant and going against the grain.

But these ‘icebreakers’ aren’t the only ones with good ideas worth seeing executed, so the more friction we can remove for the rest of us, the more we’ll benefit from a wider spectrum of creators. There’s no downside.

If we zoom out, it’s the same for all kinds of potential talents; how many genius musicians, mathematicians, writers, chemists, athletes, etc, just never had the opportunity to express and realize their potential because they find themselves in very unfavorable conditions?

It’s like Buffett’s thing about how if he had been born at a different time and/or place, his talent for capital allocation may not have found much use…

👩🏻‍🍳🧁🍪 I wrote about allulose back in edition #62, but chances are, you weren’t around back then, so I really encourage you to go read it.

allulose is mostly absorbed in the small intestine without being converted into energy: at least 90% is excreted by the kidneys without being metabolized. This means that in a functional sense allulose has 95% fewer calories than sucrose and is why the FDA determined in 2019 that it does not need to be listed under total or added sugar.

But it’s maybe even better than just “not being negative”. It looks like it could potentially even be positive:

Data from animal studies suggest that compared to fructose and/or glucose, allulose may lower blood glucose, reduce abdominal fat, decrease insulin resistance and fat accumulation in the liver, and prevent or delay the onset of type 2 diabetes. In a recent meta-analysis of human trials, when allulose was given with carbohydrate-containing meals, it was found to decrease postprandial glucose by 10% (noting that the quality of evidence is moderate).

Be careful: some brands will have “allulose” in big type on the bag, but when you read the fine print, they are mixing it with some other less expensive sweetener…

In other sugar-replacement news, Peter Attia deconstructed a flawed study of erythritol, which claimed it increased the risk of cardiovascular problems.

💚 🥃 🐇 This is the free edition of Liberty’s Highlights with 15,200+ subscribers.

You can get 2 extra editions/week full of juicy stuff + access to the private Discord 🗣🗣🗣 community by becoming a paid supporter (it’s quick & easy).

Paid post since last week 🐇:

• 🔒 394: Jerry Seinfeld, YouTube + AI & Podcasting, Rivian, F-150 EV, Self-Deterrence, Sauna Science, Sign Language AI, NSA, and MarioGPT

What I’ll point you to for this one is the very first thing at the top of the intro. It’s a self-deterrence trap that I’ve seen too many people fall into, and I hope that I can avoid you that fate! (this section isn’t paywalled, you can read it for free)

If you click the links above, you can see the intros for free and there’s a link to get a 7-day free trial of the paid version. What have you got to lose?

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Graphs that tell an industry’s story 📈📉📊

Note how resilient TV is compared to the rest — though increasingly, even TV advertising will be programmatic and delivered on demand, rather than the old linear model (somewhere, Jeff Green smiles).

This is fascinating on multiple levels.

Just on YouTube — if you take into account that most of the money is paid out to the most popular creators (it’s a steep power law), then you can kind of consider these payments in a similar way to buying content from professional studios.

🧐

Source: Ben Evans

Cloud spending is getting optimized (aka everyone’s ‘year of efficiency’) ☁️☁️☁️☁️🗜️💸

While moving to or away from the cloud isn’t something that can be easily done for a large enterprise, which insulates the hyperscalers from rapid churn at that level, it turns out that how much a company spends is a lot more flexible than many expected:

Zach Nimboorkar, a senior vice president of global technology services at Schneider Electric SE, said the French energy and automation company began moving to the cloud a few years ago, and soon realized it needed to rein in its cloud spending across its hundreds of accounts on Amazon Inc.’s cloud platform.

Mr. Nimboorkar said the company has since built a dedicated team to manage its Amazon Web Services spending and invested in a third-party cloud spending management tool.

There’s a whole ecosystem of consultants that will help companies optimize their cloud spend, and I’m sure they’re making big bucks these days.💰

It sounds like a lot of companies moved fast to the cloud because of the very real benefits that it can bring, and because they had no other option during the pandemic, but leaner times are making them see that maybe they weren’t very efficient about it…

Eighty-two percent of enterprises surveyed by Flexera Software LLC in late 2022 cited managing cloud spending as their top cloud challenge, the first time in over a decade of conducting the survey that cloud spending has ranked above cybersecurity

Source.

Intercontinental Exchange and Black Knight to sell Empower loan origination system business to ✨ Constellation Software ✨

Gotta love forced selling!

Mortgage data vendor Black Knight Inc has decided to put its Empower loan origination software business up for sale in an effort to overcome U.S. antitrust concerns over its $13.1 billion proposed acquisition by Intercontinental Exchange

There’s no official number, but according to “sources”, the Empower unit could be valued at around $400m, which would be a very nice chunk of capital deployed for Constellation (it’s likely that they put in less equity than that and used debt to meet their hurdle, though).

BUT

This is contingent on the ICE-BKI deal closing, and I have no idea how much regulatory pressure from the FTC would remain after this divestiture. ICE acquired Ellie Mae in 2020, so they’re aggregating more and more of the mortgage pie…

Holly Vedova, director of the FTC's Bureau of Competition, said in a speech last week, without addressing the Black Knight deal specifically, that the agency was not inclined to approve mergers on the basis of divestitures.

"A review of academic research on the adequacy of proposed remedies reveals concern and skepticism over efforts to fix - rather than block - anticompetitive mergers," Vedova said. (Source)

😬

🇨🇳🤖🔓 ‘China’s Censors Are Afraid of What AI Chatbots Might Say’

Friend-of-the-show Jordan Schneider and his co-author Nicholas Welch have this great piece at ChinaTalk about how ‘politics [could] put the breaks on China's AI development’.

Yet, China’s aspirations to become a world-leading AI superpower are fast approaching a head-on collision with none other than its own censorship regime. The Chinese Communist Party (CCP) prioritizes controlling the information space over innovation and creativity, human or otherwise. That may dramatically hinder the development and rollout of LLMs, leaving China to find itself a pace behind the West in the AI race.

According to a bombshell report from Nikkei Asia, Chinese regulators have instructed key Chinese tech companies not to offer ChatGPT services “amid growing alarm in Beijing over the AI-powered chatbot’s uncensored replies to user queries.” [...]

The fundamental problem is that plenty of speech is forbidden in China—and the political penalties for straying over the line are harsh. A chatbot that produces racist content or threatens to stalk a user makes for an embarrassing story in the United States; a chatbot that implies Taiwan is an independent country or says Tiananmen Square was a massacre can bring down the wrath of the CCP on its parent company.

How do you censor a black box?

How can you guarantee an outcome if you don’t fully understand the process that produces the outcome? ¯\_(ツ)_/¯

Ensuring that LLMs never say anything disparaging about the CCP is a genuinely herculean and perhaps impossible task. As Yonadav Shavit, a computer science Ph.D. student at Harvard University, put it: “Getting a chatbot to follow the rules 90% of the time is fairly easy. But getting it to follow the rules 99.99% of the time is a major unsolved research problem.” LLMs output is unpredictable, and they learn from natural language produced by humans, which is of course subject to inference, bias, and inaccuracies.

Will uncensored AIs be smuggled into China the way that fax machines were smuggled into the USSR..? ☭ 🤔

‘SoftBank's Arm aims to raise at least $8 billion in U.S. IPO’ (aiming for a valuation around $50bn+) 🇬🇧🤝🇺🇸💵

Arm is expected to confidentially submit paperwork for its initial public offering in late April […] The valuation range has not yet been finalized but Cambridge, England-based Arm is hoping to be valued at more than $50 billion.

I’ll be curious to see the financials.

From memory, they’ve been cutting in 2022, which was probably to pretty up their margins for IPO. But they’ll have to invest a lot if they want to be competitive in the data-center (and maybe even challenge x86 for PCs).

I’m afraid that they may have been trading the long-term for a short-term cosmetic benefit.

Interview: Dr. David Rhoiney — what a MENSCH with an incredible life story! 🩺🏦👨🏻‍✈️🔐💸✍️

Friend-of-the-show Jim O’Shaughnessy (💚 🥃 ) told me about David a few times in conversation, and it sounded incredible, but I had somehow never listened to the podcast that they did together (I don’t know why, that one slipped through the cracks — there are so many podcasts in my queue, I need more waking hours!).

I did listen, and wow! What an inspiring life story. Check out the pod blurb:

Dr. David Rhoiney is a Robotic Surgeon, but his talent stack also includes being a cryptologist, financial educator, writer, public speaker, web developer, former Division One Basketball player and sprinter, and more!

Make sure you listen to this one.

I found David’s attitude to life and learning very inspiring and motivating. If you need a bit of a kick in the ass to get you to do that thing you want to do, this is it:

• 🎧 Dr. David Rhoiney — “Designed to Fit Out” (EP.99)

While you’re at it, I also recommend that you follow him on Twitter.

🐦 Twitter isn’t healthy (I know, shocking, right?) 🤒

Twitter has been a mess for so long that we’ve kind of all gotten used to it being that way, and it often feels like this can last indefinitely… But there are worrying signs that things are getting worse than usual:

According to The Information:

Twitter’s shortfall on what it is supposed to have spent on AWS services, under a five and a half year contract signed in 2020, is now at least $70 million.

Amazon is threatening to withhold advertisement payments to Twitter because of it…

😬

But also, the WSJ reports that “Twitter’s Revenue, Adjusted Earnings Fell About 40% in December”.

Cutting 75% of staff certainly reduced expenses, but I’m sure it wasn’t the plan that revenue would fall along with it…

Iran may have found the world’s second-biggest lithium deposit 🇮🇷🔋🔋🔋🔋🔋🪫

“For the first time in Iran, a lithium reserve has been discovered in Hamedan,” a mountainous province in the country’s west, Mohammad Hadi Ahmadi, an official at Iran’s Ministry of Industry, Mines and Trade, was quoted as saying on Iranian state television Saturday. (Source)

They’re estimating the deposit at 8.5 million tons, which would put it only behind Chile’s 9.2 million tons. It would be above Australia’s 5.2m tons and Argentina's 2.2m tons.

Of course, there are plenty of steps between discovery and production, and some areas are harder to develop than others (mountain terrain, lack of nearby infrastructure), so it remains to be seen how quickly this new source of supply can come to market.

And then there are international sanctions…

🚫→🚫 Banning bans! 🔁

Illinois Bans Renewables Bans

Illinois Governor J.B. Pritzker has signed a bill removing the ability of local governments to limit or ban wind and solar power, following similar actions in California and New York.

Source.

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🧪🔬 Liberty Labs 🧬 🔭

Why you should probably put creatine monohydrate in your beverage of choice 🍵☕️🥛

The video is a good overview, and if you want to learn more, here’s a convenient page that summarizes and links out to the research, including the more recent research on the potential cognitive benefits of creatine monohydrate. 🧠🧐

🏴‍☠️ ‘Scammers are using artificial intelligence to sound like family members in distress’ 🤖📞👵🏻

Do you remember that scene in Terminator 2 when both Terminators are speaking on the phone with each other while imitating the voices of John Conor and his foster mother..? (yes! It’s the knife-arm scene! 🔪)

Well, we’re kind of getting there. Scammers are using AI to ‘steal’ people’s voices and call family members asking for help (ie. money):

The man calling Ruth Card sounded just like her grandson Brandon. So when he said he was in jail, with no wallet or cellphone, and needed cash for bail, Card scrambled to do whatever she could to help. [...] Victims report reacting with visceral horror when hearing loved ones in danger.

In the same way that it has become increasingly hard to trust photos in the era of Photoshop, and now it’s becoming increasingly hard to trust videos in the era of deepfakes, it’ll become increasingly hard to trust real-time phone conversations in the era of AI voice synthesis.

Advancements in artificial intelligence have added a terrifying new layer, allowing bad actors to replicate a voice with just an audio sample of a few sentences. Powered by AI, a slew of cheap online tools can translate an audio file into a replica of a voice, allowing a swindler to make it “speak” whatever they type. [...]

AI voice-generating software analyzes what makes a person’s voice unique — including age, gender and accent — and searches a vast database of voices to find similar ones and predict patterns, Farid said.

It can then re-create the pitch, timber and individual sounds of a person’s voice to create an overall effect that is similar, he added. It requires a short sample of audio, taken from places such as YouTube, podcasts, commercials, TikTok, Instagram or Facebook videos, Farid said.(Source)

You used to need to put in a lot of effort to train one of these synthetic voices, but it’s becoming increasingly easy. How do you protect against that if there’s even 1 video with sound or audio clip of you floating out there on social media? ¯\_(ツ)_/¯

When will my wife and I need to have a secret passphrase to prove that it’s really us 🤔

⚛️ ‘… if nuclear energy were discovered today…’ ⚛️

Friend-of-the-show Doomberg ( 🟩🐓) says it better than I can:

We often say that if nuclear energy were discovered today, it would be heralded as planet-saving technology to be invested in and propagated at warp speed. An intelligent global energy policy with nuclear power as a foundation can provide abundance to all humanity with minimal impact on the environment. Without hyperbole, there is no path to a decarbonized economy that avoids mass starvation and economic collapse without nuclear power, and the hardest opponents of the technology know it.

Absolutely, 100%.

Now the question is, how do we get out of the corner we’ve backed into, and use the best tools at our disposal rather than try to do everything with our hands tied behind our backs..?

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Ted Gioia: ‘10 Reasons Why I'm Publishing My Next Book on Substack’ ✍️📚

Publishing is changing, and the old ways that were created a loooong time ago in a different context are getting updated for the information age (whether old-school publishers want it or not).

Here’s Ted Gioia:

So I’ve decided to publish my next book on Substack. Maybe I’ll later do a deal with a traditional publisher to issue physical books, but I’ll worry about that in good time. (That’s the downstream stuff and, blessedly, I can defer all that for now).

My subscribers will receive the book in installments. And I will continue to do lots of other articles too—so this is a plus for them. What they call a lagniappe in New Orleans. I hope and expect to pick up more paid subscribers, so I benefit too.

Below I’m listing the 10 reasons why I made this decision.

It’s worth reading his 10 points.

He also describes some of the changes in the publishing industry that, according to him, are making it worse for writers, on top of the existing model that was already extremely extractive, with publishers often taking 90% of the revenue… as Ted describes it, now they also want *even more control* over creative aspects and even on the life of authors (putting clauses in contracts about what you can and can’t do — basically if some online mob gets mad at you, they can cancel your book deal).

It feels like this digital-first model is going to be increasingly popular, especially for writers who tend to produce more self-contained chapters and don’t necessarily research/produce things that may impact any/every part of the book until the last minute…

But even if there are some changes to past chapters, that’s not necessarily bad — books can get better from early reader feedback, and great comments can even be included in the text (with full credit) in a win-win way.

Who doesn’t want to see their name in print in the book of an author they like?

Publishing on Substack doesn’t prevent me from subsequently releasing a physical book with a traditional publisher. I can even refer you to case studies of books achieving a larger audience in print because they first found readers online. So I’m not foreclosing any other options by publishing on Substack.

Authors can probably get a better deal from publishers once they have demonstrated traction with an audience that is ready to pay (ie. it lowers the risk of not repaying the book advance — or maybe they don’t even need an advance and can just get a better revenue split deal).

And they still get the prestige part of having the book in print even though it started online. Kind of the best of both worlds, if it can be pulled off (there may be roadblocks I’m not thinking of right now).

h/t my friend Jimmy Soni (✍️📘)