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Top stories today:
1. Today at 2 PM: markets price in an 87% chance of a 25 bps hike
2. New $225M AI chatbot Pi launches, and disappoints
3. VP Harris to meet CEOs of Alphabet, Microsoft, OpenAI on AI safety
4. Midjourney v5.1 launches, looks comparable to OpenAI's DALL-E 2
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. Today at 2 PM: markets price in an 87% chance of a 25 bps hike
Fed whisperer Nick Timiraos says the big question is what's next: āAfter Federal Reserve officials likely agree to raise interest rates this week, their conversation will shift to a question weighing heavily on investors that they will find difficult to answer: Are they finished? Officials are on track to focus their meeting Tuesday and Wednesday on how to communicate their rate outlook.ā - WSJ
The curve already prices in 200 bps of cuts over the next 18 months
Our view: markets are almost always wrong in long rate predictions, so take them with a grain of salt
2. New $225M AI chatbot Pi launches, and disappoints
Pi vs GPT-4 for the same prompt.
Secretive about underlying technology: Pi developer Inflection AI refuses to say, and so does Pi.
Raised $225M in a single 2022 round. - Forbes, Inflection AI
Our view: its quality is simply worse than GPT-4
āKind and supportiveā, ācreative and funāā¦ excuses for being worse.
They are not putting out any performance statistics, also a bad indicator.
Which makes us think: how will Elon and X.AI build something better?
Meanwhile, Microsoft is testing privacy-focused dedicated ChatGPT servers
āLater this quarter Microsoftās Azure cloud server unit plans to sell a version of ChatGPT that runs on dedicated cloud servers where the data will be kept separate from those of other customers, according to two people with knowledge of the upcoming announcement. The idea is to give customers peace of mind that their secrets wonāt leak to the main ChatGPT system, the people said.
But it will come at a price: The product could cost as much as 10 times what customers currently pay to use the regular version of ChatGPT, one of these people said.ā - The Information
3. VP Harris to meet CEOs of Alphabet, Microsoft, OpenAI, Anthropic on AI safety
The invitation says the administration seeks āa frank discussion of the risks we each see in current and near-term AI development, actions to mitigate those risks, and other ways we can work together to ensure the American people benefit from advances in AI while being protected from its harms.ā - Bloomberg
Our view: why give this job to the VP?
If AI has the risk of killing us all, shouldn't POTUS be heavily involved?
Just like his ignoring of Tesla when doing car events, President Biden does not have a great track record in terms of being pro-technology.
Not that Trump was any different: as a reminder, he brought Peter Thiel close to him during the transition, then ignore all his suggestions (including Balaji for FDA chief, which would have been exceptional).
4. Midjourney v5.1 launches, looks comparable to OpenAI's DALL-E 2
Prompt: $1 trillion dollar gold coins in front of the Federal Reserve building.
Our view: the quality gap is smaller in text-to-image than it is in LLMs and, likely, in text-to-video
We're seeing diminishing rates of improvement in text-to-image AI models, and their current output is already unbelievable.
In contrast, LLMs are very much sub-human in intelligence and hallucinate/lie frequently, and text-to-video models are still very incipient and do not produce anything of commercial value.
5. Twitter getting closer to 1K employees
From 8K pre-Elon, according to Insider:
It is also restoring free API access to governments and public services
6. Visualizing this century's bank failures
Still far from 2008 in failure count and size, especially if you adjust for inflation, which this graph does not do.
7. Other headlines
Tech
Cohere AI (enterprise LLMs) close to raising $250M at $2B valuation.
Musk to NPR: āshould we assign @NPR to another company?ā
Apple and Google working together to stop unwanted AirTag tracking.
TikTok's head of trust and safety for the U.S. leaving.
Love.com, new supplement store, launched by Bolt co-founder.
Bluesky invites being sold on eBay for $100+, 55K users.
Biotech
FDA releases draft guidance on decentralized clinical trials.
Business
Carl Icahn's net worth plummets $10B after Hindenburg report.
TheSkimm, newsletter pioneer, lays off 13%, 22 people.
Ben Smith, Jonah Peretti, Nick Denton interview on Smith's new book.
AMD revenue falls 9% YoY to $5.89B.
Match revenue -1% YoY to $787M.
Ford profit at $1.8B, from -$3.1B in Q1 2022.
Unity does 3rd and largest layoff: 8% / 600 people, half the offices.
College good: 4-year degree predicts high-paying jobs in your 30s.
Luxury industry still sees China as key market/growth opportunity.
Crypto
U.S. politics
White House officials open to compromise on debt limit.
5 ways the debt limit fight could end.
House Dems aim to lure some moderate GOPers to pass a clean debt hike.
Trump wants to skip some debates, āI'm up by too many points.ā
Tucker Carlson's text that alarmed Fox: āit's not how white men fight.ā
DeSantisās travel records shielded from disclosure by Florida GOP.
World
8. Interesting tweets, memes, and images
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