Hi, and welcome to today's Bay Area Times daily newsletter. A special welcome to the 1,000+ of you who have joined so far this week. We're now over 4,000 subscribers!

If you haven't yet, follow us on Twitter to receive live updates throughout the day: @bayareatimes.

Top stories today: 1) Barr previews new rules for banks, FDIC, 2) SBF adds 13th charge: bribing Chinese officials, 3) Musk and others sign Pause AI letter, 4) Replit announces AI partnership with Google, and 5) Cerebras launches 7 open-source LLMs.

0. Data and calendar

1. Fed Vice Chair Barr previews expected new rules for banks

The main points in Barr's and Gruenberg's testimonies to the Senate:

• Potentially higher FDIC cap, to be announced on May 1. As per the below analysis, we expect to FDIC reserve ratio (and logically, its fees) to have double in size if they want to cover all deposits. - Bloomberg

  • Cost to save SVB and Signature was $20B. - WSJ

• Reduction of the threshold of intensive supervision from $250B to $100B. A 2018 law increased the threshold from $50B to $250B, and many believe this was one of the main causes of SVB's collapse. This change might require Congressional action. (We believe the Fed's late and fast rate hikes and the regulators' sleeping on the wheel played a larger role.)

• "Long-term debt requirement" for large banks, "so that they have a cushion of loss-absorsing resources," Barr said.

They testify again today, at 10 AM ET, this time before the House.

2. SBF adds 13th charge: bribing Chinese officials with $40M

• The superseding indictment adds this text: "In or about November 2021, Samuel Bankman-Fried, a/k/a 'SBF,' the defendant, and others directed and caused the transfer of at least approximately $40 million in cryptocurrency intended for the benefit of one or more Chinese officials in order to influence and induce them to unfreeze the Accounts." - Coindesk, Indictment

The indictment also adds more evidence that SBF purposively lied about Alameda using FTX funds

Paragraph 61 alleges that Bankman-Fried knew that Alameda had borrowed from FTX customers without their permission:

A life sentence is increasingly a possibility

• What more would a jury need to convict? 13 charges, 3+ partners that have already pleaded guilty, multiple witnesses, hard evidence.

  • A plea deal might be his way out. He could help the DOJ with more damning information on other parties being investigated, such as Bitfinex and Tether.

3. Elon Musk, Steve Wozniak, Harari, and 1000s more sign "Pause Giant AI Experiments"

• Of course, this is never going to happen. Most AI companies will just ignore this letter, and policymakers will take years to react to any of this. - Future of Life Institute

• AI safety can be tackled by separating world-destroying tools from AI control. What are the actual things that can kill humanity? Nuclear bombs and novel diseases, mostly. So there should be very strong (human) regulations on nuclear facilities and BSL-4 labs (those that study pathogens that could kill humans). No AI system should be able to automatically do things in these areas without human approval.

4. Replit announces partnership with Google to build a better Ghostwriter

• Replit to use Google's language-generation AI for its Ghostwriter coding copilot. Replit already has 20M users, and has so far built Ghostwriter with its own AI. Now, they will leverage Google, which "has much better technology than most people know," according to Amjad Masad, Replit CEO. We expect Google's LLM tech to be #2, behind OpenAI. - Bloomberg, Replit

• Again for Google, Microsoft is the main competitor here, with GitHub Copilot. Amazon also has a similar product, CodeWhisperer.

Replit is building its "autonomous agent", that can do bounty jobs by itself

5. Cerebras releases 7 open-source LLMs

• Marketing for their own AI-purposed hardware. Cerebras is an AI chipmaker founded in 2016 that has raised $720M. The open-source LLMs are GPT-like and range from 0.1B to 13B parameters. - Silicon Angle

The rise of open-source models is great for the ecosystem

Cerebras posted a nice table summarizing the state of the top models:

6. Perplexity AI raises $26M and launches iPhone app that combines AI chat with sourcing

• Think ChatGPT meets Wikipedia. Perplexity.AI, also available online, announced a $26M Series A led by New Enterprise Associates. Perplexity connects the GPT API with the internet to provide source-based answers to questions, similar to what the New Bing does. - Bloomberg, Perplexity.AI

• This is probably best as a search engine feature, not as a search engine itself. For most queries, what we want is not a written paragraph: we want to see the weather tomorrow, find the link to that store, etc. I.e., Google-style snippets.

• We expect Google to have something similar this year. The war on Google continues. So far, Bing is the top contender, but Google's Achilles heel is yet to be found -- nothing so far is 10x better than Google, which is already an exceptional search engine.

7. Substack is crowdfunding $5M at 2021 valuation of $585M

Substack's ARR is around $20M

Math: over the last 3 months, they took 10% of the $50M generated to writers:

Very unlikely they would get this 30x P/S multiple from private investors

On the other hand, consumer-facing products are the perfect ones to do crowdfunding campaigns, as the thousands of investors who trickle in naturally become loud promoters of the product.

8. Other headlines

Tech

• ByteDance's Lemon8 hits U.S. App Store's top 10.

• Apple launches Pay Later for some U.S. users.

• Google Search adding "Perspectives" and "About this author."

• Twitter: half of Blue subscribers have less than 1K followers.

• Microsoft announces Security Copilot, assistant for cybersecurity professionals.

• Windows 12 to include modernized OS, AI, faster updates, and better security.

• Surface Hub 2S's 2nd generation coming later this year.

• Clearview has run 1M+ facial recognition searches for U.S. police.

• How to build AI apps that won't be killed by OpenAI: Ben Parr.

• Gpt4all: a new open-source chatbot trained on GPT-3.5.

• Kara Swisher: a profile on the star tech journalist, seeking independence after NYT.

• Mammoth meatball created by foodtech company Vow.

Business

• UBS brings back Ermotti as CEO to oversee CS merger.

• Micron reports -$1.91, larger loss than expected, but stock is stable.

• Alibaba's break up signals more Chinese large firms could break up soon.

• Cost of tuition, room and board at elite U.S. universities reach $90K/year.

• Lucid laying off 18% of workers, 1,300 employees.

• Jack Ma's life after disappearance: Japan, sushi, farming.

Crypto

• Voyager acquisition shouldn't be affected by CFTC lawsuit.

• FDIC tells Signature's crypto clients to move their money by April 5.

• Former CFTC Chairman: Binance lawsuit "is a big deal."

• Binance sees $2B in withdrawals, still have $65B.

• Euler hacker "Jacob" returns the entire $177M that he stole.

• U.S. Court in California sees DAO as general partnership.

• Max Keiser and Stacy Herbert: a look at their involvement in El Salvador politics.

• Safemoon liquidity pair hacked for $9M.

Washington and more

• U.S. to no longer exchange detailed data on nuclear forces with Russia.

• China warns U.S. as Taiwan President visits and might meet McCarthy.

• Chris Christie pledges to never support Trump again, even if he wins nomination.

• Trump hush money grand jury pushed to next week.

• Mike Pence likely to testify on Jan. 6 grand jury, but he could still decline to answer.

• Dominion wants Tucker, Hannity, other hosts to take a stand at trial.

• Adnan Syed's murder conviction is back on a technicality, unlikely to go to prison.

9. Interesting tweets, memes, and images

We must identify ways to protect the 2nd amendment while reducing the number of guns, especially in the hands of people with mental problems (Israel does a good job):

Was this newsletter forwarded to you? Sign up here. Liked it? Forward it to friends and get rewards (see below).

Thank you for reading Bay Area Times. Got any tips? Email us at [email protected].

Disclaimer: The Bay Area Times is a news publisher. All statements and expressions herein are the sole opinions of the author. The information, tools, and material presented are provided for informational purposes only, are not financial advice, and are not to be used or considered as an offer to buy or sell securities; and the publisher does not guarantee their accuracy or reliability. You should do your own research and consult an independent financial adviser before making any investments. Assets mentioned may be owned by members of the Bay Area Times team.