Dear Reader,
Before I get to today’s issue, I want to put something on your radar…
One week from today, on July 24 at 8 p.m. ET, I’m hosting an event for technology investors like you. We’re calling it the Accelerated Profits Summit.
On that evening, I’ll reveal an investing method that I’ve been perfecting for nearly five years. It’s a way for everyday investors to get access to early stage tech stocks (when the upside is highest) without buying pre-IPO shares or participating in extremely risky crowdfunding deals.
In short, it’s a way for everyday investors to turn the tables and invest like venture capitalists. And as long as you have a computer, you can participate.
This will be the first time I’ve spoken about this publicly. I truly hope you can join me. Reserve your spot right here.
In the meantime, by the time you read this, I’ll already be down in D.C. for meetings. We’ll be meeting with key members of the Congressional Blockchain Caucus, as well as other members of both the House and the Senate. We are working hard to make sure that regulations on cryptocurrency and blockchain technology are light and reasonable… and not stifling to the industry’s growth.
And as you know, Facebook, Google, and Amazon will each have representatives in D.C. as well. They are in town for congressional hearings surrounding antitrust issues.
So I expect it to be chaotic on Capitol Hill this week. I’ll let you know how it goes…
The Democrats take aim at Big Tech…
Democrats in the House have drafted a new bill called the Keep Big Tech Out of Finance Act. This is a short bill at this point. It was obviously timed around the antitrust congressional hearings this week.
The bill is designed to block large tech companies out of the financial services industry. It says that companies with global revenues of $25 billion or more cannot affiliate with a financial institution if they are engaged in certain activities. Examples of those activities include running an online marketplace, exchange, or platform to connect third parties.
Clearly, this bill targets the three Big Tech companies going to Washington this week. It’s a heavy-handed attempt to keep Big Tech from disrupting, and improving, the world of financial services.
And it’s not a coincidence that the bill was drafted after Facebook announced plans to launch its own cryptocurrency, Libra.
Of course, I would not be surprised if lobbyists from the financial services industry were behind the bill. It’s designed to protect the incumbents from innovation from technology companies. And that’s always a terrible idea… and a great way to stifle economic growth.
The fact is, the financial industry has proven that we cannot trust it over the last two decades…
From rigging the London Interbank Offered Rate (LIBOR) to inflate the industry’s profits… To colluding with credit rating agencies to mislead investors about mortgage-backed securities… To the robo-signing of foreclosures… To paying billions in executive bonuses after the taxpayer bailouts. There’s been a laundry list of transgressions from the Big Banks… And more than $100 billion in fines levied against these guilty parties.
Simply put, we need competition in this space.
And we should keep in mind, this bill would not be limited to just the largest tech companies. It could potentially harm companies like Coinbase and Robinhood also. These are digital-first companies that are catering to consumers… not just the big players. They are fully compliant. And they provide immense value to normal, retail investors.
We want these companies to continue to innovate. We want them to remove the middlemen who add nothing but friction and unnecessary cost. We don’t want to slow these companies down… We want them to flourish.
So this bill is an awful idea. And I expect it to die quickly. Even if it were to pass in the House of Representatives, I can’t imagine it would get through the Senate.
The reality is, Congress knows it has much bigger problems. Cryptocurrencies, including Facebook’s Libra, threaten the government’s “monopoly” on currency creation.
But the transition from fiat to digital assets is inevitable. Governments will have no choice but to adapt.
An AI just became the world’s expert in materials science…
Researchers at the U.S. Department of Energy’s Lawrence Berkeley National Laboratory just made a huge breakthrough in artificial intelligence (AI)…
The team developed an AI that can learn outside of what it’s been trained to learn. By poring through huge volumes of data, the AI can “connect the dots” and teach itself a subject matter.
Researchers put the AI to work on 3.3 million research papers on materials science. It read… absorbed… and analyzed the information… Then, it figured out where the gaps were in the research. This allowed the AI to predict what materials should exist but have not yet been discovered. That makes this AI the expert in materials science.
Now, I think it is obvious that no single researcher – or even group of researchers – could possibly do this. Nobody could absorb 3.3 million research papers… put them all together… and then identify the gaps. It’s too much.
But the AI can do this rather easily. And by identifying the gaps, the AI can direct us towards research that will lead to new discoveries. This is how we will catalog genetic mutations… cure all human disease… develop clean energy sources… and all kinds of other amazing things.
By using AI, we accelerate technological advancement… And economic growth.
We also accelerate how quickly a technology goes from discovery to consumers. It used to take decades for a scientific discovery to become a consumer product or service. Now it takes years. And soon it will take only months.
Volkswagen goes all in on electric vehicles and autonomous driving…
Do you remember Volkswagen (VW)’s big emissions scandal that came to light in 2015?
VW manipulated emissions test results and presented false data… All to make it look like its cars were polluting less than they were.
Of course, VW got caught and ended up paying over $25 billion in fines. And it has been in crisis mode ever since then.
But the company has a plan to get the business back on track. It is going all in on electric vehicles (EVs) and autonomous driving.
To that end, VW just invested $1 billion in cash into Ford’s autonomous driving partner, Argo AI. What’s more, VW is also contributing its autonomous driving division… which VW self-valued at $1.6 billion. In other words, VW is merging its autonomous driving unit with Argo AI and injecting $1 billion of cash into the entity…
This is a strategic move for VW… The company is putting $1 billion to work, committing existing resources and teaming up with Ford to tackle autonomous driving technology.
In the old days, Ford would not have let VW gain access to Argo AI’s technology. Ford would have bought Argo outright as a startup company and forcibly integrated it. But that approach often stifles innovation and pushes the startup’s best talent out.
Instead, Ford allowed Argo AI to remain independent… And Argo is free to work with other automakers.
This is the same approach GM took when it acquired autonomous driving startup Cruise. Cruise continued to operate independently. And it even took investments from SoftBank and Honda.
We are seeing automotive manufacturers team up to focus around early stage technology companies to develop autonomous driving technology. This is a lot smarter than everyone trying to develop their own self-driving cars alone.
VW’s investment also gives us an insight into how valuable this emerging technology has become. Argo AI is now valued at $7 billion… Which is about where Uber’s self-driving unit is valued. And GM’s Cruise is valued at $19 billion.
So, the companies are worth a fortune already… which indicates how advanced the technology has become. We already have several self-driving deployments around the country today. So far, they have been regulated by states willing to issue licenses.
By next year, we’re going to see far wider usage of the technology, not just by Tesla, but by other ride-sharing services looking to leverage the technology for even more efficient service.
Regards,
Jeff Brown
Editor, The Bleeding Edge