AI, Robotics, Diversification and Optimism

AI + Robotics

DeepMind had a great post last week about AI and robotics and their new models. I liked their comments about prioritizing layers of safety. While I’m not worried about AI generally, I don’t want untrained robotics swinging around and confusing me for anything other than a human. The ChatGPT store opened yesterday, and the most popular app so far is a tool to read research papers called Consensus. There are categories for research, writing, education and lifestyle.

The VC firm NFX published a framework I like for evaluating AI investments:

• Is AI the only defensible magic?
• Can it generate patentable assets?
• Can it access unique datasets?
• Does it have a reasonable plan to test platform capabilities and assets?
• Does it have a strong business development strategy?
• Is it caught in the middle of a wave?

Bitcoin ETF Approved

The Bitcoin ETF was finally approved yesterday. This is a monumental milestone that Bitcoin evangelists have been working on constantly for nearly a decade. I love talking about this stuff, but I’m not going to write my comments here at this time. Please reach out if you would like to discuss my views or activities regarding Bitcoin, crypto, related projects or our crypto fund at Osbon Capital.

Sonic Thump

Nasa is testing their X-59 plane on Friday this week by flying it over residential US towns and surveying the residents about noise complaints. The goal of the X-59 is to travel at supersonic speeds at volumes lower than 75 PLdb (perceived level decibels).

Sonic booms happen when planes break the sound barrier at around 767 mph (Mach 1). Typically, sonic booms are around 110 PLdB, about as loud as thunder. The Concorde was banned from flying over land in most countries due to the noise issue.

X-59 aims to create a sonic thump by traveling at Mach 1 speeds with a noise level below 75 PLdb on the ground. 75 is around the volume of a vacuum in a separate room or a dishwashing machine running for around 1 second. Noise reduction techniques learned from this testing could open a door to supersonic travel in the US. That would reduce the flight time from NY to SF to 2-3 hours. There would still be significant cost constraints, but it wouldn’t be outright banned.

Diversification Comments

Luca Dellanna is a researcher and author known for writing about risk and uncertainty. I originally found him years ago while researching complex systems theory. I liked his comment recently on diversification: “The point of diversification is to increase the number of future parallel worlds where you’re happy, not to increase how happy you are in the future worlds where you’re lucky. The downside of diversification is that survivorship bias causes [people] to say you made a bad choice.”

This is the correct lens for evaluating diversification. Relying on luck to compensate for poor planning is a poor strategy. When successful, it leads to complacency and a false sense of security. Over time, it increases risks and potential mistakes as luck is inherently unpredictable and unsustainable as a foundation for long-term success.

Optimism Comments

Negative comments about life, markets, politics, investing and societal progress are a constant on social media. This never really changes as doom-related content gets more attention. Someone sent me a post this week from a financial markets “expert” claiming that there is another crash just around the corner. This influencer gets enough press that Fox News covered his most recent comments. I looked up his tweet history and took screenshots of his same “crash” prognostications from 2023, 2022, 2021, 2020 and 2019. This is attention farming, and there are many famous money managers who do this as well.

Eventually, the internet wins this pessimism battle by mocking these types of people with memes and clever comments. Social media is still new, and the way we consume and communicate through it is always changing. The goal is to find and stick with the creatives and optimists over the complainers and pessimists.