February 28, 2023

Top stories today: 1) Elon Musk planning a ChatGPT competitor, 2) Snap launches AI chatbot, 3) Meta announces generative AI group, 4) Elon to give Twitter stock to employees, 5) DCG results raise red flags, and 6) Supreme Court to hear arguments on $400B student debt forgiveness.

Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) Elon Musk planning a ChatGPT competitor, 2) Snap launches AI chatbot, 3) Meta announces generative AI group, 4) Elon to give Twitter stock to employees, 5) DCG results raise red flags, and 6) Supreme Court to hear arguments on $400B student debt forgiveness.

0. Data and calendar

All values as of 3 AM PT / 6 AM ET, other than S&P500 close (1 PM PT / 4 PM ET).

All times are ET.

1. Elon Musk planning a ChatGPT competitor

  • Elon approached Igor Babuschkin to lead the efforts. Babuschkin previously was a top engineer at both Google Deepmind and OpenAI. He said in an interview that he hasn't yet joined Elon's effort. - The Information

  • We expect it to be open-source. Elon has recently criticized OpenAI, which he co-founded, for allegedly betraying its original vision of being open-source and non-profit. (OpenAI today operates with a for-profit subsidiary, and most of its code is closed-source.) Suggests that if Elon launches something, it will likely be open-source. He previously suggested he would open-source parts of Twitter, but so far, that hasn't happened yet.

2. Snapchat launches ChatGPT-powered AI bot

  • Available for Snapchat+ users (U.S., $3.99/mo). The product is basically a fast, PG-13 version of ChatGPT, without Bing's linking to original sources. - The Verge, Snapchat

  • Are AI chatbots becoming a commodity feature? Any app can integrate them, with some value added, but not much. We see generative AI really delivering value when it can be integrated into time-consuming business activities, such as spreadsheets, PowerPoints, accounting, legal, marketing, etc. Microsoft and others are working on that as we speak.

3. Meta announces new generative AI group

  • "In the short term, we'll focus on building creative and expressive tools." Not clear what this means, but Meta announced on Friday its new language model LLaMa, so it would make sense to see it integrated into social media, similar to what Snapchat just announced. - Facebook announcement

  • Team led by VP Ahmad Al-Dahle, reporting to Chris Cox (CPO). Al-Dahle spent 16 years at Apple before joining Meta in April 2020. - Axios

4. Elon to give Twitter stock to employees

  • On March 24, suggesting that the layoffs are over. This comes after a series of layoffs that have shrunk the company size from 7,500 to 1,800 employees. "This past week, we completed a difficult organizational overhaul focused on improving future execution, using as much feedback as we could gather from the entire company. Those who remain are highly regarded by those around them." - The Verge

Future CEO might be Steve Davis, current Boring Co CEO

  • Responsible for cutting $1B in annual costs, all while sleeping in the office with his wife and newborn child. This past week, before the last 10% layoffs (2,000 -> 1,800 employees), Davis was calling Twitter managers asking, "who on your team is exceptional? Who would you bet your job on?" - Platformer

  • Twitter stabilizing, now new bold features: in just 3 months, Elon has cut Twitter's workforce by 76% and launched new features like Twitter Blue. We now expect him to start focusing on larger new features that might threaten competitors, such as long-form and TikTok-style videos, long-form writing, generative AI, everything-app and payments, etc.

Elon back as world's #1 richest

After Tesla shares rose 5.5% on Monday. - Bloomberg

5. DCG claims it only lost $1.1B in 2022 and still has a $2.2B valuation

  • Several red flags in DCG's results announcement:

    • Only released the results to Coindesk, a news website which is owned by DCG itself. - Coindesk

    • Only reported assets ($5.3B), but not liabilities (?). It separately claimed, "in its annual independent stock valuation, DCG had an equity valuation of $2.2 billion, [generally] consistent with the sector’s 75%-85% decline in equity values over the same period." However, this independent valuation is likely a 409a valuation, not the actual book value, which could be negative, for all we know.

    • No actual accounting, just a written summary. All in all, this raises more questions than answers. Regulators and creditors are likely watching DCG very carefully.

6. Supreme Court to hear arguments today on $400B debt forgiveness

  • Conservative majority likely to curb back Biden's $400B executive order. SCOTUS will hear arguments on whether the President can enact a massive debt forgiveness program without Congress (Biden tried to get them on board, but failed).

  • A decision is only expected by June. The most likely scenario is the elimination or significant reduction of the program, which aimed to forgive $20K in federal loans for those making less than $125K/year or $250K/year for households. The government says that 40M+ Americans qualify, and the CBO had estimated the forgiveness cost at $400B. - Bloomberg

7. Other headlines


  • Workday's revenue up 20% to $1.65B, better than expectations.

  • Zoom's revenue up 4% to $1.12B, in line with expectations.

  • Klarna's revenue up 20% to 5.6B kronor, losses are reduced.

  • TikTok must be removed from federal government devices in 30 days.

  • Tesla pauses new Full Self-Driving installations until software recall issue is resolved.

  • Cerebral, telehealth startup founded in 2020, firing 15% employees, around 375.

  • FTC: "keep your AI claims in check."



  • BUSD to be suspended from Coinbase on March 13, after government crackdown.

  • Yuga Labs launched its first Bitcoin NFT project: TwelveFold, 300 generative Ordinals.

  • SEC is investigating Robinhood Crypto.

  • 2nd Ethereum testnet successfully allowed for staking withdrawals.

    Washington and more

    • Murdoch admits Fox News hosts endorsed election fraud big lie.

    • Blinken arrives today in Kazakhstan to lobby former Soviet republics.

    • Covid origin: White House says no consensus; China claims politicization.

    • Social Security idea of raising retirement age to 70 being studied by bipartisan group.

    • CHIPS Act: Commerce Secretary says Pentagon will reap benefits.

    • CHIPS Act will require subsidized companies to pay for child care.

    • DeSantis signs revenge bill against Disney into law.

    • Rishi Sunak reaches deal for Northern Island which avoids trade war.

    • Afghanistan: watchdog report shines light on failures of Trump-Taliban deal, Biden's botched withdrawal.

    • Russia could have advantage in battle for Bakhmut, in Donetsk.

    • West Bank sees increased violence between Palestianians and settlers.

    • North Korea orders transformation in agriculture as food shortage worsens.

    8. Interesting tweets, memes, and images

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