• NVIDIA’s masterstroke just became reality…
  • SoftBank’s big gamble in the markets
  • This AI startup already has over 400 paying customers

Dear Reader,

Today we’re going to take a look at some pretty cool research that was just published by the American Institute of Physics. The research visually shows whether or not N95 medical-grade masks actually stop the spread of COVID-19.

I’ve had my team insert GIFs to illustrate the results of this study. It may take a few seconds for them to download if any readers have slow internet connections. Please be patient, as they are worth seeing.

Let’s first have a look at an N95 mask with exhalation ports on the mask.

We can easily see that all of the air and virus particles shoot right out of the exhalation valves on the front of the mask. It doesn’t stop the spread.

Now let’s look at an N95 mask without exhalation ports.

The N95 without exhalation valves is interesting. We would think the mask acts like a filter for all of the inhaling and exhaling, but the research shows differently.

Instead of the spread happening through the exhalation valves, it escapes and circulates on the sides of the nose, initially lingering in the air just above the head and facilitating spread. We should remember that this exhalation is the unfiltered spread of viral particles.

And just for those who are curious, here is the video of surgical masks, which are even worse.

We can see in the video above that the unfiltered exhalation emits primarily from the top of the mask, directly through the mask, and around the bottom of the mask to a lesser extent. It is also clearly visible that the air particles (and thus the virus) project directly in front of the wearer.

And we can also “see” the ineffectiveness of masks in stopping community spread in countries like Japan and South Korea. They have perfect obedience at national levels with regard to wearing masks daily, but both countries continue to see spread of the virus.

I share this information so that we can all understand the truth directly from research. We are fed false platitudes from the media and even our medical community daily about the effectiveness of masks.

This is a false and dangerous “security blanket.” In the absence of a vaccine, nothing other than strict isolation will work.

I say it’s dangerous because I have written about research previously that demonstrates that masks do not offer us protection from COVID-19. Our only chance to reduce the possibility of becoming infected is with a professionally fitted N95 mask paired with eyewear that makes a perfect seal over the face.

And even then, we aren’t fully protected.

Surgical masks don’t work, and cloth masks can actually increase the risk of infection. They trap virus particles and provide them with a humid, warm place to hang out with prolonged exposure to our airways.

For those who are at risk, please understand the above information. Strict isolation is the safe approach. This means not coming into contact with any friends and family who do circulate, disinfecting packages that are delivered to the home, and wearing sealed eyewear, gloves, and an N95 mask.

Our best course is to protect and isolate those at risk and allow spread through the low-risk parts of the population, which is precisely what is happening right now.

Herd immunity among the low-risk members of a population protects those at high risk… helping the virus burn out in a couple of months by leaving it nowhere to go.

Now let’s turn to today’s insights…

Our prediction for NVIDIA just came true…

Last month, we talked about how SoftBank’s horrendous investment decisions within its Vision Fund are forcing the company to sell ARM Holdings to raise cash.

ARM-based semiconductors are so widely used that they have essentially become an industry standard. While SoftBank grossly overpaid for ARM back in 2016, it is one of the investments that grew into its valuation.

At the time, we said that it would be a masterstroke for NVIDIA to acquire ARM. After all, ARM is known for its high-performance, low-power semiconductors. This hasn’t been an area of focus for NVIDIA.

And our prediction just happened. NVIDIA announced that it is buying ARM for $40 billion.

I’m very excited about this. NVIDIA has a great track record of bringing bleeding-edge technology to the market.

And I know NVIDIA understands the huge value of ARM’s semiconductor architecture and intellectual property (IP). It will give ARM the funding it needs to continue its rapid growth, but NVIDIA will otherwise take a hands-off approach. It won’t choke ARM like Intel so often does to its acquisitions.

And if we look at the price – the deal is for $40 billion. That’s $9 billion more than the $31 billion SoftBank spent when it acquired ARM Holdings back in 2016. On the surface, it looks like SoftBank is walking away with a nice profit.

But that’s not exactly the case.

Per the deal, NVIDIA is paying $12 billion in cash and $21.5 billion in stock for ARM. That’s $33.5 billion going to SoftBank – slightly above its $31 billion acquisition price.

In addition, NVIDIA is giving ARM employees $1.5 billion in stock as an incentive to stay on. That’s a common practice, but it is not money going to SoftBank.

So that brings us to $35 billion – only $12 billion in cash, and $21.5 billion in very richly-valued NVIDIA stock. What about the other $5 billion?

Here’s some insight into the art of corporate deal-making…

Whenever an entity is trying to sell itself or one of its assets, it always pitches aggressive sales targets to the potential acquirer, hoping to get the highest price possible.

Rather than question these numbers, a smart acquirer will say, “Yes, we believe you. But a chunk of the deal will be based on hitting these targets.”

And that’s what NVIDIA did. It agreed to pay a $5 billion performance bonus to SoftBank if ARM hits SoftBank’s proposed sales targets.

We don’t know what those targets are, but I would be willing to bet that they are rarely hit. If I am right about that, SoftBank will never see the extra $5 billion. And if they do, it means that ARM outperformed NVIDIA’s expectations. Either way, NVIDIA wins.

So the $40 billion number being touted in the press is purely about saving face. It allows SoftBank to appear like it’s making a smart move. And NVIDIA is happy to go along because it is now primed to be an even more powerful and influential player in the broad semiconductor market… not just in GPUs.

This is great news for Near Future Report subscribers. We are already up 269% on NVDA, and with the ARM acquisition, even more growth is on the way.

SoftBank’s desperate attempt to recoup its losses…

And on an unrelated topic concerning SoftBank…

Another interesting news story emerged in the last few days about what the conglomerate is doing with its money.

This is crazy…

Back in the spring, SoftBank spent $4 billion on call options for some of the largest tech stocks in the U.S. markets.

The call options were tied to about $50 billion worth of shares in companies like Amazon (AMZN), Microsoft (MSFT), Netflix (NFLX), and Tesla (TSLA).

This is one reason why the Nasdaq rose almost straight up from its March lows this year to its all-time high earlier this month. After all, the market considers it a bullish indicator when billions of dollars of call options are being purchased on major tech companies. We can almost hear the rumors on Wall Street: “Something big is going down. The market is going to run… ”

Well, regulatory filings show that it was SoftBank making these big bets… and it was complete speculation.

What makes this so odd is the fact that SoftBank is not a hedge fund. It is primarily a Japanese wireless operator that maintains holdings in several technology companies with the addition of a big venture capital (VC) arm. And that VC arm has lost tens of billions of dollars on bad investments, as we have discussed before.

And that’s why SoftBank is gambling in the markets. It is trying to make up for all the money it has lost over the last 12 months.

This is ridiculously risky. I would call this stupid and clearly not in the best interests of its shareholders. Most executives would be terminated immediately for this kind of indiscretion.

That said, SoftBank is sitting on about $4 billion in paper profits on these calls right now. That number was even higher before the Nasdaq pulled back this month.

My advice to SoftBank is to close out these positions and capture the profits immediately before those paper profits become a multibillion-dollar loss.

Assuming it closes out its option trades now, SoftBank got lucky. After all, it played with fire… and it did it with other people’s money.

The most functional AI bot yet…

Last month, we talked about how Silicon Valley was humming over OpenAI’s new software platform, GPT-3.

GPT-3 is impressive. It can complete our sentences as we type, write technical manuals, and even write software code. But it’s not perfect. GPT-3 doesn’t always demonstrate that it truly understands user input or its own output.

And that’s shined the light on a small startup called Diffbot. This is a company that most people didn’t even know existed.

What’s unique about Diffbot is that its artificial intelligence (AI) bot constantly combs the internet in all languages every single day. And it reconstructs its “knowledge” every four to five days, while also adding 100 – 150 million new entities every month as new websites and data emerge.

In the process, Diffbot is figuring out how pieces of information relate to each other. It uses this to create “knowledge graphs” detailing how specific people, places, organizations, articles, products, and discussions on the web are connected to each other.

And it turns out that Diffbot already has 400 paying customers using its services.

Among these customers are DuckDuckGo, the privacy-centric search engine. DuckDuckGo uses Diffbot to generate search results that are on par with Google’s.

Social media company Snap is also a customer. Diffbot enables Snapchat to extract highlights from news articles.

And both Adidas and Nike use Diffbot to hunt down counterfeit clothing and shoes on the web.

Taking it a step a further, Diffbot plans to integrate with business tools like Excel, Google Sheets, and Salesforce. This will allow the AI to comb the web for desired information and then import that information into one of these tools.

That means Diffbot can create spreadsheets for us. We could ask Diffbot to go out and find data on any topic, using any parameters, and it will make a spreadsheet for us with that data included. This would be an incredible time saver and greatly improve productivity.

So this startup is on to something extraordinary. This is an intelligent implementation of AI that will serve useful functions for consumers, businesses, researchers, and developers.

I’m very excited to follow this company’s progress. Let’s add Diffbot to our early stage watchlist.


Jeff Brown
Editor, The Bleeding Edge

P.S. Speaking of early stage companies…

As regular readers know, I detest the fact that average retail investors have been locked out of the best technology investments of the last decade. Sure, hot tech companies like Uber, Slack, and Zoom finally went public last year, giving retail investors a chance to buy shares.

But the problem is, these were large-cap companies by the time they went public. While the media touted them as the hottest small-cap tech stocks on the planet, the reality is that insiders had already pocketed the big gains. Retail investors got the leftovers.

To me, that’s just not right.

More than five years ago, I set out to solve this problem. I wanted to find a way to deliver venture capital-like gains to normal investors – the people for whom 1,000% gains can be life-changing.

And I’m happy to say that I’ve found it. I discovered a secret class of “Penny IPO” stocks that go public 100 – 300 times cheaper than most tech stocks today. In fact, some of these Penny IPOs go public at levels even cheaper than Amazon did way back in 1997… before it delivered gains of as much as 180,000% to average retail investors.

And best of all, these Penny IPOs are too small for Wall Street to take notice of them yet. That’s right – we can buy these companies before the insiders get in. Then, when they finally pop up on Wall Street’s radar, we can multiply our money in droves. And that’s not a hypothetical – my first Penny IPO delivered gains of 432% in just 41 trading days.

In short, Penny IPOs are one of the last avenues that everyday investors have to generate life-changing gains from early stage companies. They are the closest thing I’ve found to “turning back the clock” to a time when technology companies went public during their early years.

And even more exciting, these companies are heading for the “4X Window,” which will send them into overdrive…

On September 23 at 8 p.m. ET, I’m going to share my research on “Penny IPOs” with the world.

I’ll reveal what the 4X Window is… and why these companies go public so early. I’ll show how retail investors can buy them easily from their online brokerage accounts. And I’ll explain why they can surge hundreds of percent in days or even hours.

For readers who would like to learn more about the best way for normal investors to trade early stage companies, this presentation is for you. Simply go right here for all the details.

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