- We’re entering a world of AI impersonators
- What FedNow means for digital assets
- Will Twitter ever be a public company again?
Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in tech and biotech. Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here. I always enjoy hearing from you.
AI impersonators are a real risk…
Jeff,
What’s to keep AI from copying somebody’s voice and then using the result as real quote?
– J.F.
J.F., I’ve got some bad news….it’s already happening and has been for quite some time.
There’s a lot more awareness about how the technology is being used now, and there are even new kinds of artificial intelligence (AI) designed to detect these fakes. But the reality is that most of us have already been exposed and fooled by these kinds of deepfakes at least a couple times…through no fault of our own.
Some are really done well.
By way of example, I recently shared a story about a new update from the text-to-image generator Midjourney 5. The AI is capable of creating life-like images based on simple text prompts. One highly realistic example was Pope Francis wearing a trendy white coat that went virtal on Twitter.
The AI-Generated “Pope Coat” From Midjourney 5
Source: Midjourney, Forbes
For a short period of time, this was widely thought to have been a real photograph until it was identified as being AI-generated. This is a harmless example of this technology. But we can imagine the implications.
What if bad actors created a photograph of a political or corporate leader engaging in illegal activity? How much chaos could that create before it was identified as AI-generated?
And to your point, it’s not just images. An AI can easily recreate a person’s voice with enough data to “learn” from. Recently, a series of songs from popular artists like Drake were released online. The only problem was that the song was completely AI-generated. But many people thought it was authentic…..and they actually liked the song!
Again, that’s a pretty harmless example. But we can easily imagine how this technology could be used for nefarious purposes. This is one of the biggest obstacles the industry will need to overcome in the years ahead.
More work needs to be done developing artificial intelligence software designed to spot voice, video, and images created by an AI. And that kind of technology needs to be adopted and employed by search engines, social media platforms, messaging platforms, etc.
This kind of verification software is critical for us being able to authenticate if something is real or not.
And the reality is that the explosion in generative AI technology has happened so quickly that these kinds of tools need to catch up with the pace of development.
I’m monitoring these spaces closely and looking for media, internet, and applications that are proactively authenticating and removing deepfakes and nefarious content from their platforms. I’ll certainly be sharing what I find in The Bleeding Edge.
The ability for us to be able to trust the information that we receive has become an existential issue of our time. It’s an issue so critically important, the future of humanity will be determined by whether we can manage this issue or not.
FedNow is a stalking horse…
Jeff,
Thank you again for your great research. I wanted to know if you could potentially take a deeper dive into FedNow and the ramifications for the crypto investor.
Lately, we have heard the upcoming launch of the FedNow program will eliminate decentralized blockchains, thus giving complete control by the federal government. I understand you cannot provide financial advice however, should the average investor look at divesting their crypto assets at this time? Thank you for your time, sir.
Warm Regards,
– Jeff R.
Hi, Jeff. It’s a fair question.
For the benefit of readers, FedNow is a system by the Federal Reserve that’s been in the works for almost a decade, and it’s designed to settle payments in real-time. Those who are part of the FedNow network will be able to send/receive money in seconds with near-instant settlement…which is similar to the capabilities of a well constructed blockchain.
There will no longer be a need to wait for days for funds to clear, or to wait until Monday or until after a holiday before we can access the funds that were sent to us.
That sounds great. And it is.
Once implemented, it will be faster, better, cheaper than what we’re all used to. As a technologist, I know that’s precisely what good technology is designed to do.
But as I’ve told readers before, my suspicison is that FedNow is a “stalking horse.” It’s a seemingly benevolent system that is really the precursor to a central bank digital currency (CBDC). And with a CBDC comes enormous power to dictate how and when we spend our own money.
I know some readers think that sounds like a “conspiracy.” But it’s a fact that a CBDC would confer even more power and control to the Federal Reserve. And it doesn’t come without risks.
And your question about digital assets is a good one. In recent months, we’ve seen a very hostile stance from regulators towards even the most regulatory compliant companies.
Last month, Coinbase received a “Wells notice” from the SEC. This is a notice companies receive before a regulatory action is taken. The SEC was messaging Coinbase—one of the most buttoned up players in the industry—that they were being targeted for their “earn” feature.
Coinbase was approved to go public in April of 2021 by the SEC. At the time, the company clearly explained their “earn” product. And the SEC greenlit the IPO. But now, years later, the regulators are coming after them for that same feature?
The SEC had an opportunity to address the issue back then and it didn’t inform Coinbase that there was anything wrong. How does that make any sense?
Coinbase is one example of many. And the only conclusion I can come to is that the government is attempting to suppress the industry until the infrastructure is in place for a CBDC. Once that happens, digital assets will be allowed to come back and operate within the framework that the government sets.
Not to be too nuanced, but the simple existence of FedNow or even a CBDC isn’t necessarily a concern. After all, we would all benefit from near real-time settlements.
The area of real concern is how this technology is implemented. More specifically, is if technology is developed that enables the government to control our digital wallets and potentially how we spend our money.
A central bank-backed digital wallet can be designed in a way that would give a government control over how its digital currency is spent. If the U.S. government or European Central Bank were to design a social credit system which could connect with a digital wallet, it could prohibit certain kinds of spending, or even penalize (deduct funds) us for an actions or beliefs not considered to be “appropriate” by the current politicians in charge.
Needless to say, something like that would be pure evil.
As for decentralized blockchains, I don’t believe that the FedNow implementation will have the ability to eliminate decentralized blockchains. And I would agrue that once the Federal Reserve and U.S. Treasury have ensured that they have carved out their continued control over the U.S. dollar in its digital format, other blockchain projects won’t be much of a threat.
Of course, this is something that my team and I are monitoring very closely and if we find a reason to be concerned, my subscribers will be the first to know.
Will Twitter ever IPO again?
Jeff.
Do you think Elon Musk’s X Corp will go public or be available on Republic for a Day One-type investment that will be available to retail investors?
– Mary A.
Hi, Mary. Thanks for the fun question.
To catch readers up, on Monday we discussed Musk’s latest move. He registered a website called X.ai. This is the precursor to a generative AI meant to rival ChatGPT. It has already been referred to as “TruthGPT”, probably a working name.
The domain name suggests that his new AI will be housed within X Corp—a corporate entity Musk set up years ago. This is interesting because X Corp is also the entity that now houses Twitter, which has become a brand and is no longer a corporation.
Reading between the lines, it appears that Musk is attempting to build an “everything app” similar to WeChat in Mainland China. I’ll have more to say on this topic next week in The Bleeding Edge. And we’ll have fun watching how Twitter and X Corp evolve over the rest of this year.
To answer your question, I’m going to have to speculate given that it is still early…
I do believe that the path is eventually towards an IPO though. It would make sense. Given the size of the company already, and Musk’s desire to keep it independent and unbiased, an acquisition would be less desireable.
It wasn’t because I didn’t believe in Musk or his vision for Twitter. I actually believed that, in time, the company would be worth more than that, but at that time we knew that the bot problem (fake accounts) on Twitter was quite serious, and my working assumption was that a future funding round would happen at a much lower valuation. And that has already happened.
As Twitter’s metrics continue to improve, I’m suspect that Musk will raise additional capital to grow the company and expand the functionality of Twitter. I will of course look for an opportunity for an allocation for my Day One Investors if possible. At the right valuation, that might be attractive. Valuation is key.
I do believe that the path is eventually towards an IPO though. It would make sense. Given the size of the company already, and Musk’s desire to keep in independent and unbiased, an acquisition would be less desireable.
Once the software alogrithms have been improved and he has management he can trust, a public offering is logical. It would provide his investors and employees with an exit/liquidity, and being a public company provides transparency for the business.
If we remember, Musk hated the corruption and dishonesty of Twitter’s business, but he recognized the value of having Twitter and a public town square. Keeping the company private means operating with limited transparency.
Taking the company public is a way to open up and demonstrate strong management practices, company performance, and demonstrate its stance on free speech and the measures that it takes against bots and those who wish to censor/ban factual information from the internet and social media platforms.
The best “revenge” that Musk can have against the “haters” is to make Twitter a great success and a bastion of free speech and factual information.
I wish him well in his endeavors. We need more of that in this crazy world that we find ourselves in….
Regards,
Jeff Brown
Editor, The Bleeding Edge