Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) Powell signals 50 bps, 2/3) Salesforce launches EinsteinGPT + $250M AI fund, 4) Google I/O on May 10, 5) Meta's AI leaks, 6) GBTC might become an ETF, and 7) Voyager <> Binance deal approved.

0. Data and calendar

1. Powell signals 50 bps hike in Senate testimony

• Powell's key quote: "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes." - Bloomberg, WSJ

• Open to crypto, supports stable regulations: "We have to be open to the idea that – somewhere in there – there is technology that can be featured in productive innovation that makes people's lives better." and "People are going to assume when they deal with something that looks like a money market fund that that has the same regulation as a money market fund or a bank deposit. So stablecoins need some attention in that respect." - Coindesk

• Today he speaks to the House at 10 AM.

The curve now prices in a sequence of 50, 25, and 25 bps

Peaking at 5.50% - 5.75% in June:

2. One day after Microsoft and Hubspot, Salesforce announces its own AI chatbot and integrations

• Dubbed EinsteinGPT, it can answer questions, write emails and marketing content, chat on Slack, generate leads, create automations, write code, and more. - Press release, VentureBeat

• Deep integration with OpenAI team. Suggested by the press release including a quote from OpenAI's CEO Sam Altman: "We’re excited to apply the power of OpenAI’s technology to CRM. This will allow more people to benefit from this technology, and it allows us to learn more about real-world usage, which is critical to the responsible development and deployment of AI — a belief that Salesforce shares with us."

• Currently in closed pilot. They probably had it in pilot mode for a few weeks, but decided to announce it now after Microsoft and Hubspot came out with their own versions.

3. Salesforce also launches $250M AI VC fund

• Initial investments include Anthropic, Cohere, Hearth.AI, and You.com. - Salesforce

• Well-managed corporate VC funds are a huge win-win: they usually make profits and they provide their corporate sponsor with integration and M&A opportunities.

4. Google announces I/O conference on May 10

• We expect news on AI, Bard, and some hardware. Hopefully we will get the launch (or at least a launch date) for Google's AI chatbot, Bard.

• Small live attendance, live streamed online. Full schedule of events is TBD. - Techcrunch

• In related news: deep-dive on how Google's cautiousness on AI gave Microsoft an opening. Not only that, 2 of Google's top AI researchers left to found Character.AI, after Google refused to ship the chatbots they were working on. - WSJ

5. Meta's LLaMA LLM leaks via torrent, lower quality than ChatGPT

• Meta's paper had claimed it was superior to GPT-3, which might be true, but vs ChatGPT/GPT-3.5, its results appear to be worse. - Vice, Github

6. GBTC discount shortens to 36% after Appellate Judges are unconvinced by SEC's arguments

• BTC futures and spot move together "99.9% of the time", the Judges highlighted. Grayscale v. SEC is a case where Grayscale criticizes the SEC's decision of having approved ETFs containing Bitcoin futures but not allowing ETFs containing Bitcoin spot, citing manipulation concerns. - Bay Area Times live stream, The Block

• Price manipulation is a distraction, custody is the biggest risk. The whole lawsuit shows how the SEC misunderstands crypto. "Price manipulation" is not a rational worry for Bitcoin spot, because Bitcoin futures would have the same problem. The biggest problem is custody, which, as FTX et al showed, could be compromised.

• Even if Judges rule in Grayscale's favor, their ETF could still be rejected. The SEC could decide to reverse its approval of the futures ETFs, to make things "fair."

• Decision is expected in 3-6 months.

7. Judge OKs Binance.US buying out Voyager's assets, creditors could get 73%

• Judge was unconvinced by SEC claim that Binance.US was an illegal securities exchange.

• $20M cash to Voyager + $1.3B for the customers' crypto, who will have to register with Binance.US to withdraw.

• 73% could drop to 48% if claims from FTX/Alameda succeed, according to Voyager lawyers. - The Block

8. Silvergate in talks to FDIC on ways to save bank

• One option involves bringing in crypto-friendly investors to provide Silvergate with liquidity. - Bloomberg

• Bank could go under on Friday night, as that's when many banks go bankrupt, allowing the FDIC to work on securing the customer base over the weekend.

9. Apple has 8 out of 10 top-selling smartphones

• In line with previous Counterpoint research, which showed that Apple has 18% of smartphone shipments, 48% of revenue, and 85% of profits. - Counterpoint, previous research

• Increasingly, the best product wins out. In a world of abundance where most consumers can afford most product options, the highest-quality product will increasingly win out. For these huge companies, paid ads are increasingly less important: see Tesla and ChatGPT as prime examples.

10. The 16 media companies dominating Google

• Missing from this list is Wikipedia and the top newspapers (NYT, WSJ, WaPost): the former is a non-profit and the latter don't rely that much on Google traffic, but rather on organic and newsletters.

11. Mainstream media claims Ukrainian groups exploded Nordstream 2, while Hersch maintains U.S. did it

• The mainstream media is citing "U.S. officials", as usual: "New intelligence reviewed by U.S. officials suggests that a pro-Ukrainian group carried out the attack on the Nord Stream pipelines last year, a step toward determining responsibility for an act of sabotage that has confounded investigators on both sides of the Atlantic for months." - NYT

• Pulitzer Prize-winning Seymour Hersch says it was the U.S. government: "Last June, the Navy divers, operating under the cover of a widely publicized mid-summer NATO exercise known as BALTOPS 22, planted the remotely triggered explosives that, three months later, destroyed three of the four Nord Stream pipelines, according to a source with direct knowledge of the operational planning." - Seymour Hersch

• Could a non-government group even do such a complex operation? Probably not, as the explosion involved advanced explosives, not available to non-military groups.

• Biden had made implicit threats before: "If Russia invades, there will be no longer a Nord Stream 2. We will bring an end to it."

12. Money correlates with happiness much above $75K, except for the most unhappy people

• Joint paper between Kahneman and Killingsworth resolves previous conflict papers: a 2010 Kahneman paper was one of the first to report happiness flattening at $75K+, while a 2021 Killingsworth paper showed that no such flattening exists. The two researchers decided to work together, in what they termed an adversarial collaboration.

• The result: happiness and money only flattens to the least happy 20% of the population. - Paper, Bloomberg

13. Other headlines

Tech

• Generative AI: some investors are skeptical on whether it can make any money.

• Twitter investigated by the FTC: layoffs, internal communications, journalist names.

• Twitter lets its privacy-protecting Tor certificate expire.

• Apple to launch new 13-inch and 15-inch Macbook Air with M3 chips.

• Reddit interview: new CPO Pali Bhat.

• TikTok ban: Biden supports bipartisan Senate bill to ban or force sale of TikTok.

• TikTok launches Series, which let creators sell premium episodes up to 20min each.

• Apple launches yellow iPhone 14 and 14 Plus.

• Top Youtube creators are using dubbing to relaunch content across the world.

• Youtube to remove overlay ads starting April 6.

• Youtube to allow creators to use moderate profanity and not be demonetized.

• ChatGPT for Youtube: new Chrome extension that summarizes videos.

• LLMs are not going to destroy the human race.

• AI spending to reach $154B in 2023, $300B+ in 2026.

Business

• Biden budget to include $0.2T in yearly tax hikes, spending cuts.

• House Republicans prepare bill to prioritize debt payments in case of ceiling breach.

• Sofi loses $400M in revenue due to student loan debt freeze.

• EU complaining that Twitter is not coordinating with the agency Blue rollout.

• SAFE TECH Act could make Substack, Youtube liable for speech.

Crypto

• Block to launch open source Mining Development Kit.

• Tensor raises $3M for Blur-like NFT platform on Solana.

Washington and more

• Senate Republicans condemn Tucker Carlson's "mostly peaceful" portrayal of Jan. 6.

• Carlson writes in private regarding Trump: "I hates him passionately."

• Citadel's Ken Griggin "would love" to see DeSantis run.

• Gigi Sohn withdraws her nominator for Biden's FCC after industry, Manchin opposition.

• U.S. to lift covid test requirement on travelers from China.

• Marijuana legalization leads to fewer suicides, traffic fatalities, and opioid deaths.

• Ukraine says 30K out of 50K Wagner soldiers killed in Bakhmut, Shoigu claims 11K Ukrainians were killed.

14. Interesting tweets, memes, and videos

2 interviews from earlier this year about topics highlighted in today's newsletter:

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