Dear Reader,
On the evening of April 18, 1945, in the Dundee neighborhood of Omaha, Nebraska, there was an explosion.
Some thought it sounded like fireworks. Others saw a flash of light. Fortunately, no damage was done, but that was pure luck.
The reality was that it was a bomb. It was a bomb carried by balloon from Japan.
WWII-Era "Balloon Bomb"
Source: Wikimedia Commons
風船爆弾 ― pronounced “fusenbakudan”, which basically means balloon bomb.
At the time, Japan had a program to launch as many as 10,000 of these balloons headed for the U.S. They were hydrogen filled and carried bombs of different sizes.
During a six-month period, about 9,000 were launched towards the end of the war. The one in Omaha was one of almost 300 that made the journey over the Pacific to the U.S.
While the balloon bombs were in fact weapons, in reality they were just an inexpensive form of psychological warfare. They were intended to create panic and fear during a time of immense conflict. The U.S. government at the time tried to suppress knowledge of the existence of these bombs. There was of course no internet back then, so it was possible to keep their existence largely quiet.
That’s what makes the recent spy balloon incident from China so interesting. Just like the balloon bombs from Japan in World War II, it traveled across the Pacific, and across the entire United States before anything was done about it. Just imagine what the response would have been if the roles were reversed?
Below is a short video of the spy balloon being shot down by an F-22 off the coast of Myrtle Beach, South Carolina:
I’m sure most of us have seen or heard about this. It’s been all over the news. But what hasn’t been all over the news is that this isn’t the only one. A recent report released by the Office of the Director of National Intelligence examined 366 recent “incidents”, 163 of which were large balloons. We don’t know how many of them were from China, but there have already been several seen and confirmed above U.S. soil.
We’re living amidst an intense period of conflict intentionally created by powerful forces.
And to be very clear, China and the U.S. are already at war. The tactics being used are unconventional in the same way that Japan’s balloon bombs were back in the 1940’s.
It’s an economic war (sanctions/tariffs). It’s a biological war (COVID-19/pandemic). It’s a psychological operations war (spy balloons/show of force over Taiwan). And it’s a cyberwar (hacking of various assets & infrastructure/TikTok as a means of data collection/surveillance).
The U.S. will be forced to counter. And a move on Taiwan is coming. I’m afraid things will get worse before they get better. Let’s just hope they don’t escalate into an all-out military conflict. I’d like to think that nobody wants that…
What concerns me most about the current environment is that there are too many terrible events happening at once. Bad actors know that times like these are the best windows to strike. One of Sun Tzu’s more well-known quotes from The Art of War is “In the midst of chaos, there is also opportunity.”
Investors have to be nimble in an environment like this. And yes, there will be opportunities. Investments with downside protection, hedged positions, and even short exposure to the markets can be prudent at a time like this.
I’m sure many readers remember the popular film Jurassic Park from 1993. It was based off the equally enjoyable book by science fiction writer Michael Crichton. It depicted an experiment where scientists brought dinosaurs back to life contained within what was supposed to be a safe sanctuary on a remote island.
It was supposed to be fiction, but it might not be for long…
A company called Colossal Laboratories & Biosciences is doing something very similar. It’s on a spectacular mission to “de-extinct” certain species.
Long-time readers may remember when we highlighted this company back in September 2021.
If we remember, Colossal was founded by famed Harvard biologist George Church, who is one of the most recognized scientists for genomics in the world. And at the time, Colossal had just named its first de-extinction target – the wooly mammoth.
Since then, Colossal has named its second target. It’s none other than the Tasmanian Tiger. It’s a marsupial that was native to Australia, Tasmania, and New Guinea. The last known live Tasmanian tiger was caught in 1930.
And Colossal just made another splash last month when it raised $150 million in its Series B funding round. This bumped the company up into unicorn status, valuing it above $1 billion.
And get this – the Series B funding will go to support Colossal’s third extinction target – the dodo bird. No kidding.
The dodo was a flightless bird that lived on a remote island in the Indian Ocean. It went extinct way back in the 1660’s. Here’s what it looked like:
The Dodo Bird
Source: Critter Facts
As we can see, the dodo was an odd-looking, plump bird. By all accounts, it was great to eat… which is how it went extinct in the first place.
Colossal’s first two targets are mammals. And the process for bringing mammals back to life is relatively straight forward.
If scientists can obtain a DNA sequence of the target mammal, they can easily clone it. Then they can create artificial wombs in which to grow new animals using that DNA. This process simulates natural birth, and it’s been done before.
Of course, birds don’t work that way. They aren’t born… they’re hatched. So de-extincting the dodo bird presents a nuanced problem.
Here’s Colossal’s plan…
First, the company has already obtained a complete DNA sequence from a dodo bird using bone fragments preserved in a museum.
Now that Colossal’s scientists know what the DNA structure of a dodo looked like, they’re going to perform a series of edits to the cells of another bird over time. Gradually this will bring the dodo bird back to life.
Make no mistake about it – this is a grand experiment. It’s never been done before. But theoretically, it should work. And Colossal has all the genetic editing tools to make it happen. The team at Colossal just needs to figure out how much of the dodo bird’s DNA needs to be edited into another bird’s DNA before it becomes a dodo bird.
This is no different than what Crichton envisioned in Jurassic Park… Geneticists and genetic engineers working in laboratories bringing extinct species back to life.
And if Colossal is successful in its endeavors, there’s no limit to what they could bring back to life. It’s possible they could even recover dinosaur DNA… and truly make a real-life version of Jurassic Park.
That’s wild to think about.
This is one of the more unusual endeavors that we’ve been keeping an eye on in The Bleeding Edge. The company has already raised $230 million since its founding a year and a half ago, so investors are taking this seriously. And while the headline is about bringing extinct species back to life, success with these kinds of advanced genetic editing techniques will absolutely lead to a wide range of commercial opportunities for the company.
To quote one of the characters from Jurassic Park: “Hold onto your butts.”
Electric vehicles (EVs) have garnered a lot of attention recently. Various governments have set targets to fully transition from traditional cars to EVs by certain dates. And here in the U.S. there are strong government incentives available to EV producers as well.
This prompted car makers to set very lofty targets for annual EV production. For example, General Motors (GM) came out and said that its goal is to produce millions of EVs every single year.
But there’s a problem.
There’s simply not enough lithium in production, or planned, right now to make the batteries for all these EVs. With the exception of Tesla, none of the major car makers have secured enough lithium supply to hit their targets.
This is an open secret in the industry. And it’s a big reason why we added my favorite lithium miner to our Near Future Report portfolio (readers can catch up here).
And GM just made a big move to solve the problem…
GM just invested $650 million into a lithium mining company called Lithium Americas. This was one of the most hotly contested deals in the EV industry.
Several car makers were vying to reserve the right to buy Lithium America’s future production. The company plans to build a mine at Nevada’s Thacker Pass. It’s a barren strip in the northern part of the state – right on the Oregon border.
But Lithium Americas wasn’t just looking for pre-orders for future lithium production. It needed a lot of capital to get regulatory approvals and to build the mine. GM’s bold move was to offer to finance construction of the Thacker Pass mine. That’s how the company can guarantee itself a chunk of Lithium America’s future supply.
However, this deal comes with risk.
Lithium Americas does not yet have all the approvals it needs to move forward with the Thacker Pass mine. And there are several environmental groups fighting it as we speak.
The most outspoken claims that the mine will catastrophically damage a local wildflower.
If the mine falls through, GM is out of luck. All because of the wildflowers…
That said, Lithium Americas secured a loan from the Department of Energy to help finance the mine. The United States is frantic to secure more domestic supply of lithium… wildflowers be damned.
So, I suspect this project will ultimately get all the approvals it needs in the end given how the Inflation Reduction Act is in reality the Green New Deal heavily focused on domestic production of EVs and EV batteries.
But here’s the thing – even if the mine gets approved and goes into full production, it will only produce enough lithium to get GM up to 500,000 EVs by 2026. And presuming the mine gets further development, it may be possible to reach enough lithium for just one million EVs a year.
In other words, even if this gambit works perfectly, GM still won’t have enough lithium to hit its annual EV production targets.
This will be a major obstacle for the industry for years to come. The EV industry is desperate for battery metals like lithium… and the world simply doesn’t have enough production.
We’ll wrap up today with what could be the next mass-market social media application. It’s called Artifact.
Artifact was founded by Kevin Systrom and Mike Krieger. This is the same pair that built Instagram.
If we remember, Facebook acquired Instagram back in 2012 for a cool $1 billion. That was considered an absurd amount at the time… but it turned out to be an incredible deal for Facebook.
Instagram now boasts over 1.2 billion users worldwide. This includes over 120 million active users in the U.S. And it now generates over $25 billion in annual revenue for Facebook – now Meta Platforms.
Talk about a home-run acquisition. One of the best of all time.
So the Instagram founders are back at it with their next enterprise. And it has all the making of a next-generation social media app.
Artifact’s name is a play on the words “articles” and “facts.” And the company promises to deliver a personalized news feed to every user based on artificial intelligence (AI).
The platform itself feels like a crossover between Instagram, TikTok, and Twitter. The big difference is that it’s built on top of the same kind of technology that OpenAI used to build ChatGPT.
The benefit here is that Artifact’s AI will provide every user with a personalized experience based on their own preferences.
This is something that legacy social media platforms also promise… but fail to deliver upon. We’ve learned that companies like Facebook and Twitter have historically favored certain content and censored others.
So rather than a social media app presenting content or ads that might be rules based and programmed by humans, an AI learns your preferences from what we’ve been reading on the app and predicts the kinds of information that will be interesting to us.
I’ve actually been playing with the beta version of the app, and I can see it improving the more articles I review on the app. The app is clean and simple to use. I can see how this can become very useful, and arguably a time saver for those of us that tend to consume a lot of information looking for things of interest.
This is the future. Soon, there will no longer be any need to spend minutes or hours searching around for information. Simple text prompts or voice commands will present us with the kind of information that we’re looking for.
“Search” will be radically changed through AI. And our lives will have “feeds” of desired information and opportunity carefully curated for what is most relevant to us.
If anyone would like to test out the platform, the beta version is available at Artifact’s website right here.
Regards,
Jeff Brown
Editor, The Bleeding Edge
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
