Malcolm Ethridge, Executive VP at CIC Wealth and host of the Tech Money Podcast, shares insights on the latest tech trends. He dives into OpenAI's alarming Q* breakthrough and the potential turmoil for Sam Altman. The discussion shifts to Google's diminishing culture amid internal struggles, and the legal woes facing Binance's CEO. Ethridge also tackles the crypto landscape, comparing Binance's challenges to the FTX collapse. He highlights Bitcoin's resilience and assesses the future of autonomous vehicles after key leadership changes.
The AI breakthrough Q-Star by OpenAI raises concerns about safety and potential threats to humanity.
The AI industry faces challenges of high capital expenditures and limited customer revenues, emphasizing the need for sustainable business models.
Google's heavy reliance on search advertising revenue may hinder its ability to capitalize on advancements in AI, sparking questions about its prospects in the AI race.
Binance's guilty plea to anti-money laundering violations raises concerns about the credibility and safety of the platform, highlighting the need for stronger regulations in the cryptocurrency space.
Deep dives
OpenAI's breakthrough raises concerns about safety
Researchers at OpenAI have made a significant AI breakthrough called Q-Star, but there are concerns about safety within the company. Some staff researchers have expressed worries about the potential threat this discovery poses to humanity. While there is optimism about future success, the concerns raised by experts in the field should not be taken lightly. With Microsoft's support, Sam Altman, the CEO of OpenAI, is expected to remain in his position despite the tension and potential risks involved.
The challenges faced by the AI industry
The AI industry is facing notable challenges, characterized by substantial capital expenditures and limited incremental customer revenues. There are two key explanations for this situation. First, companies are deploying AI to reduce existing infrastructure costs, resulting in efficiency gains. Second, venture capitalists (VCs) are funding AI startups, hoping to find new use cases and generate significant revenue. However, if these startups fail to find product-market fit, the revenues will decline, leading to potential bankruptcy. While AI has potential, there is a need to address these challenges and identify sustainable business models.
Google's future in AI
The future of Google in the AI space is under scrutiny. The company's heavy reliance on search advertising revenue raises questions about its ability to compete as AI technology evolves. The emergence of generative AI models, like GPT, has created opportunities for AI to go beyond predicting words and delve into reasoning and solving mathematical problems. However, Google's focus on maintaining its core advertising business may hinder its ability to capitalize on advancements in AI. This has led some analysts to question Google's prospects in the AI race and its potential to lead in this field.
Binance's guilty plea and its impact on the crypto industry
Binance, the largest cryptocurrency exchange, has pleaded guilty to anti-money laundering and US sanctions violations. Despite the serious charges, Binance will continue to operate, though CEO CZ will be removed from his position. The case raises concerns about the credibility and safety of the platform, especially since it allowed transactions involving extremist groups. While the immediate impact on the crypto industry remains uncertain, with Binance still holding significant assets, the guilty plea highlights the need for stronger regulations and oversight in the cryptocurrency space.
Challenges faced by Cruise and the future of autonomous vehicles
Cruise, the autonomous vehicle company owned by General Motors, has experienced setbacks due to safety concerns. Recent incidents have highlighted the need for stringent safety measures and better management practices in the development of driverless technology. CEO Kyle Vogt has resigned, sparking questions about the future of Cruise. While the company may face challenges, General Motors remains committed to achieving success in autonomous vehicle technology. However, the industry's slow pace and resistance to change, along with regulatory hurdles, pose significant obstacles to the widespread adoption of self-driving cars.
Block's new approach to performance management
Block, the cryptocurrency company led by Jack Dorsey, is implementing changes to its performance management practices. The company aims to create a culture of excellence by abandoning annual performance cycles and performance improvement plans (PIPs). Instead, Block will promote continuous evaluation and direct feedback to enhance performance and address issues promptly. While this approach may be more efficient, some employees may feel anxious about their job security. The effectiveness of these changes and their impact on Block's culture and performance remains to be seen.
Market insights and the anticipation of a recession
Market conditions and economic indicators suggest the possibility of a looming recession. Factors such as an inverted yield curve, where short-term interest rates surpass long-term rates, and volatile market behavior raise concerns about the economy's future. Economic data, including consumer behavior and borrowing trends, indicate a cautious approach among individuals and businesses as they anticipate a potential downturn. While the precise timing and severity of a recession are unpredictable, market participants and investors should closely monitor economic indicators and adapt their strategies accordingly.
Malcolm Ethridge is the executive vice president at CIC Wealth a CNBC Contributor, and the host of the Tech Money Podcast. He joins for our weekly discussion of the latest tech news. We cover: 1) OpenAI's 'worrying' Q* breakthrough 2) Whether Sam Altman is in danger of being fired again 3) Where's Google Gemini? 4) Google's culture struggles 5) Binance CEO CZ pleads guilty 6) Is Binance the next FTX? 7) Is Coinbase toast? 8) Bitcoin's future 9) Cruise CEO Kyle Vogt's resignation 10) Is Cruise toast? 11) Jack Dorsey ends PIPs at Block 12) State of the market and how to read it.
