“Network architecture is destiny.” Thus opens Chris Dixon’s great new book, Read Write Own, a chronicling of the open Internet, its corporate takeover, and the dawn of blockchain networks — the third network era. This week, I had the pleasure of hosting Chris on the Pirate Wires pod, and we had a great conversation on all of this and more:

In preparation for our conversation, I got to thinking of investment in blockchain technology and networks more generally. Drown out in our current AI hysteria, and following the last bull run roulette wheel crash, crypto continues to be ignored, even as evidence of (yet another) slow rise from the ashes mounts.

2023 was an unmitigated disaster for crypto investing, with commitments crashing to something like $10.7 billion from around $33.3 billion. There were a few signs of enthusiasm as early as Q3 of last year, however, and on the other side of the most recent euphoric bull run builders in the space seem happy. Nobody liked the scammy culture of 2021 and 2022, or its clownish hype men, and now it’s back to real enthusiasts and the purest sort of nerd shit. Also, as yet again needs to be said, this is not the first time “crypto is dead.” It’s been like this for almost 15 years, and every declaration of the space’s full destruction only underscores what seems to be its inherent anti-fragility (another great book by the way, though the author blocked me on Twitter R.I.P.)

While Q4 reportedly saw $1.98 billion invested in crypto, down slightly from Q3, insiders believe the numbers are likely a bit higher (holidays + many deals not yet announced), and probably inching just past what we saw in Q3. With vigor back in ETH and BTC, and Coinbase popping off, you can sort of feel the trembling underground. As one investor framed it to me:

“reasons for more excitement:

• infra is finally ready, and enabling a lot more consumer applications to build on top of previously incredibly difficult infra, and just more throughput in general

• asset prices increasing

• a level of excitement around crypto x AI

• the realization that this cycle may be just as crazy as the last

• some (small) level of regulatory clarity (eg ripple winning SEC case”

At its highest level, there does remain an interesting, as-yet unanswered question buried in the crypto conversation. Freedom-entrenching applications of the technology appear to be something we want to exist, and maybe need to exist, rather than something most people want to use. But that is at least something this generation of builders is attempting to tackle — can we make this easier? Seamless, even? Can we bake some kind of decentralized defense into our digital lives without the average customer even realizing it?

My unfortunate sense is the average person will never stop trading liberty for ease, but the speculative aspect of crypto we all hate nonetheless guarantees excitement at the top of every single cycle, and with it funding. Then, if the tech can’t die, can it ever really lose? Invulnerability is, at least, something.

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The Fifth Estate

NOTABLE INDUSTRY TRENDS

The most difficult 24 hours of Mark Cuban’s life. Following weeks of feuding between billionaires Mark Cuban and Elon Musk over the question of DEI (Mark believes race-based hiring practices are moral, while Elon believes hiring someone because of their race is a moral abomination), Cuban stupidly entered a public exchange with X user “TheRabbitHole84” over the same question. The meat of their ensuing back-and-forth sprawled over a full 24 hours (though is still days later, to some extent, ongoing), and led to the rabbit’s insistence Mark answer the question of whether or not he’d ever hired based on race, which would constitute a violation of Title VII. Mark said he had not hired strictly for race or gender, but race and gender had been a factor in hiring, which — in accordance with Mark’s warped sense of American law — was perfectly legal. At this point, an official commissioner of the US Equal Opportunity Employment Commission entered the chat, informing Cuban he was “dead wrong on black-letter Title VII law,” which triggered an avalanche of mockery and ridicule. As it turned out, the Shark Tank billionaire had just, in conversation with an animated rabbit, publicly admitted to criminal hiring practices.

Finally, succumbing to embarrassment perhaps, Cuban began an AMA, imploring users on X to “fire away” with their questions. And so concluded the most difficult 24 hours of his life:

A dumb ass Delaware judge we didn’t ask. A Delaware judge on Tuesday ruled Elon’s $55 billion incentive package at Tesla is void, saying Elon's “Superstar CEO” influence prevented the share grant from being set at a fair price. If the ruling is upheld, Elon stands to lose about 10% of the company. It really would have been a massive payout, at “33 times larger” than the closest comparison. But Elon responded to the incentive and roughly 10x’d Tesla’s value since the plan was put in place in 2018. So who won here? Not the activist who sued Musk, as he holds just nine shares of TSLA, and certainly not the Tesla investor base, as the price of TSLA slid 5% after the deranged ruling.

Elon’s first tweet in reaction to the ruling: “Never incorporate your company in the state of Delaware” (standard practice throughout tech, and American business more broadly). He’s incorporated X Corp in Nevada, which offers better protections from frivolous investor suits, and on Tuesday suggested Tesla could move out of Delaware to Texas. (FT)

One thing I can’t help but notice: yet another judge wielding the American courts like a weapon against a political opponent. An increasing danger.

Okay, we unfortunately do have to talk about the AI-generated Taylor Swift porn. Over the weekend, deepfake nudes of America’s sweetheart went viral, prompting a hurricane of fury and reaction across the internet. X temporarily blocked searches for “Taylor Swift,” where her fandom launched a “#ProtectTaylorSwift” campaign that attempted to bury the nudes in a flood of PG-rated Taylor images. The White House responded to the incident, calling for social media companies to take more action. Abroad, hinting at what’s sure to be widespread international sentiment, India is telling social media companies they’ll be held accountable for the spread of deepfakes on their platforms.

Microsoft made changes to their AI tool “Designer” which may have been the vehicle used to create these fakes, and elsewhere, platforms like X are beefing up their content moderation teams. Meta has always been more closeted about the scale and scope of its moderation team, but it’s as safe to assume they’re well ahead of the curve here as it is to assume this topic will only grow louder, and (understandably) more emotional as the tools become easier to use. We are frankly just not built to watch our loved ones exploited in this way, and if our tech chads working in the space don’t solve the problem now — in my humble opinion! — it could bring the entire Industry down.

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Positions on America's drug tourist problem tend to bifurcate between 1) 'Jail forever,' and 2) 'What problem? You're crazy, there is no problem.' In his guest piece for Pirate Wires, George Hotz offers a third, more interesting solution: simply give the people what they want.

Read the full piece here.

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Industry Links

BROAD TECH:

• Yesterday, Mark Zuckerberg was once again dragged before congress for a ritual flogging, now on the topic of “child safety.” Additional tech stars including: Linda Yaccarino, CEO of X, Evan Spiegel, CEO of Snap, Shou Chew, CEO of TikTok, and Jason Citron, CEO of Discord. (You can watch the full thing here)

• Linda Yacc opened her testimony saying that X suspended 12.4 million accounts for violating the company’s revamped child exploitation policies, or over five times more than the 2.3 million that were removed by Old Twitter in 2022. (@DiligentDenizen)

• In an enormous bit of news for would-be cyborgs, Elon Musk announced the first human Neuralink implant (brain chips, baby). The first product is called Telepathy, and will be used for patients with severe degenerative diseases like ALS. Check out Tim Urban’s full 2017 explainer here.

• Elon views Japan as a potential growth market for Tesla. (Business Insider) The company is also investing $500M to build one of its Dojo supercomputers at their Buffalo, New York factory. (Tech Crunch)

• In the wake of launching a new account for Payments, X is partnering with BetMGM to bring sports betting to the platform. (Fortune)

• Instagram is testing a new feature that would make finstas — aka, anonymous accounts largely used for stalking your ex or trashing your boss — a new, official product feature. (Tech Crunch)

• SHOCKING: despite spending $1.5B to persuade U.S. lawmakers that Americans’ data would be protected, TikTok is still sending that data back to Chinese parent company ByteDance. (WSJ)

• More innovation from TikTok’s booming shopping features. (Bloomberg) The company, for some reason, continues to not be banned.

• Universal Music Group (UMG) is pulling its entire catalog from TikTok after unsuccessful negotiations with the company. (@chartdata)

• The U.S. Department of Energy confirmed the discovery of a 3,400 ton lithium reserve in the Salton Sea, one of the largest deposits on the planet. (@TheNatlInterest)

• On the heels of New York City’s Mayor Adams designating social media an “environmental toxin” for teens:

• Florida banned social media accounts for children under 16. The bill awaits approval in the State Senate. (Fortune)

• In Washington, lawmakers are demanding a new army of bureaucrats to specifically monitor tech, “protect consumers, promote competition, and defend the public interest.” (The Hill)

• (TikTok still not banned, by the way)

• In apparent response to the U.S. government’s increased scrutiny of U.S. tech companies only, Meta rolled out more measures to protect teens from unsolicited messages on Facebook and Instagram. (Tech Crunch)

• An unclassified letter from the NSA confirmed the agency regularly buys Americans’ data from commercial brokers with no warrant. (NYT)

• All is fair in love and war: Tinder is being used in Colombia to drug, rob, and kill people. (Bloomberg)

• Adobe is giving up on XD, their Figma competitor. Good, it sucked. (Bloomberg)

• Damn, guys, they got us:

$$$:

• AI startup Sierra, led by former Salesforce co-CEO Bret Taylor, is close to finalizing an $85 million investment which would value the company at almost $1 billion. . (Bloomberg)

• Reddit is targeting a $5B valuation for its upcoming IPO. (Business Insider)

• Meta is investing $800M in a new data center in Indiana that will specialize in artificial intelligence services. (Bloomberg)

• Microsoft last Wednesday hit a $3T market valuation and closed at a record high. (Bloomberg)

• Alphabet shares also flirted with a record and briefly eclipsed their all-time high.

• Humanoid robot startup Figure is in talks to raise up to $500 million in a round led by Microsoft and OpenAI. (Bloomberg)
  

AI:

• Elon has denied the FT’s claim he’s raising $6 billion for xAI.

• A sad day for lazy idiots in college: researchers from the University of Maryland claim they’ve developed a more accurate tool for detecting AI in writing. (Business Insider)

• For purposes of “safety,” the US will soon be working with China in a rare co-operation on AI. (FT) But also the CIA will be using AI to spy on China so it evens out I think. (Bloomberg)

• That “AI” George Carlin special that had everyone in the media freaking out? Turns out it was written by a human after all. That human is being sued. (Wired)

• Apple is signaling AI tools are coming to its next generation of iPhones. (FT)

• AI developers are partnering with government agencies to launch a pilot program for collaboration on “AI models, computing power, datasets, software, and training.” (The Verge)

• OpenAI has been told by Italy’s Data Protection Authority (??) that ChatGPT violates EU privacy laws. (Tech Crunch) Uggggh shut up, Europe! Just shut up already!

• Fubo is announcing a new service that uses AI to generate instant news headlines from top networks, enabling viewers to get a quick, real-time news update without having to engage in the torture that is watching cable news. (Cord Cutters)

• Turns out Katherine Maher, the new CEO of NPR, is a raving lunatic. One choice example: here she is at the conclusion of the OpenAI board crisis demanding seats for women and people of color, thus continuing on in that years-old custom popular among American elites in which the suggestion of racist, sexist, literally illegal behavior is somehow concurrently championed as moral. Naturally, however, due to heightened scrutiny of such deplorable positions as we carry on surfing the Great American Vibe Shift, the new media mob boss was forced to scrub her account of her most deranged takes. For example:

• As the mainstream media succumbs to new economic realities and the total dissolution of trust in our press alike, dissolving in real time before our very eyes, the logic in hiring choices like this continues to elude me. Reminder: you and I are literally forced to pay this woman. Nice!

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Pirate Wires Podcast

Media layoffs, Jon Stewart is back, our thoughts on Barbie being shunned at the Oscars by the patriarchy, and more – check out the latest podcast with the Pirate Wires crew here.

Hey, and do me a favor: can you please review the hell out of this thing wherever you listen to your podcasts? Apple? Spotify? I’m getting roasted in there lol I need your help

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LITIGATION AND REGULATION:

An interesting trend, this morning, following instances of the United States government teaming up with the governments of China and Europe to kneecap the United States’ technology industry:

• The FTC, once again eager to fix a problem that does not exist, is probing the investments and partnerships of top AI players Microsoft, OpenAI, Amazon, Anthropic, and Alphabet to assess how they may be “distorting innovation and undermining fair competition.” (WSJ)

• The recent layoffs at The LA Times are renewing calls from California lawmakers to force tech companies to pay journalists for their work. Lol. Lmao, even. (SF Chronicle)

• Invoking the Defense Production Act, Biden has decreed, henceforth, tech companies will have to alert him every time they launch a new project employing the use of large language models. (Wired)

• Citing more bullshit safety concerns, San Francisco has filed a lawsuit against the California Public Utilities Commission hoping for another review on its ruling that allowed self-driving car companies Waymo and Cruise to expand operations this summer. (Washington Post)

HUMAN RESOURCES:

• Amazon and iRobot (American companies) have mutually called off their proposed merger in response to an unworkable set of obstacles laid before them by EU’s regulatory overlords (not Americans). In response, iRobot will be forced to lay off 350 employees, and the company’s founder and CEO is stepping down. Globalist European lizard people are raising their martini glasses to the sky, and laughing. (CNBC)

• Salesforce is set to cut 700 positions, or about 1% of its global workforce. (SF Chronicle)

• In a move to make the company “more nimble,” EBay is cutting about 1,000 jobs (just glad they’re not sending pig heads to people this time). (Fortune)

• Microsoft is letting go of 1,900 employees at Activision Blizzard and Xbox. (The Verge)

• Ex-Google CEO Eric Schmidt has entered the AI attack drone business. (Business Insider)

• Signaling an apocalypse for remote work enthusiasts, and predictions pertaining to the “decentralized future of work,” IBM is telling managers they must work in the office at least three days a week, or leave the company. (Bloomberg)

• Following similar policy at Amazon, employees are discussing unionization in their ongoing effort to not go to work, but in a professional way. (Business Insider)

• PayPal is cutting 9% of its workforce as part of a cost-reduction effort. (The Information)

TRADE WAR:

EU v. Apple v. The World. In an effort to comply with new antitrust restrictions from the EU, Apple has issued their response — an historic overhaul of the App Store, both lowering commissions and allowing third-party competition (sort of)… while simultaneously levying a new slate of fees that others, including Spotify’s Daniel Ek, were not happy about (Daniel broke is grievances down on X, in a long thread starting here).

The CEO of Epic Games, long embroiled in war with Cook, called the moves “hot garbage,” claiming Apple can still choose which stores are allowed to compete with the App Store, and taking particular issue with a host of additional “Junk Fees.”

• In a bid to compete with China’s growing chips industry, Biden is expected to announce billions in new subsidies for US-based chipmakers. Unclear why we’re announcing this again as it’s all part of the bipartisan Chips bill passed literally years ago (check out my full breakdown for Pirate Wires), but always happy to see a little mercantilism from Uncle Sam. (Bloomberg)

• Shares of Baidu are plummeting after a report linking its AI tools to the Chinese military. (Forbes)

• In a bid to rival Neuralink, China has unveiled plans to develop its own brain-computer products by 2025. (Business Insider)

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This newsletter was compiled with a great deal of assistance from Riley Nork.