Today is riskier than tomorrow

Collaborative AI. Midjourney's take on visual AI. Arc and the future of the internet browser. Silicon Valley Bank's fate.

We live in a world where there’s simply too much to keep up with. The great acceleration of AI is opening up almost limitless possibilities. But it also means we are often left feeling lost, dizzy, more distracted and more alone.

Are we already late to the party? Are we using the right tools? Are we part of the right communities?

Intent has never been more valuable. If you have an Enchanted Notebook that can conjure up for you any text, sound, image, or video you can imagine, you only have one job to do. The right words open every door. Just ask.

Some joke Prompt Engineer is the new job of the decade. Kill-switch Engineer may be next in line! There’s a fundamental truth to it.

In the search engine era, unrivaled knowledge access made knowing things by heart discouragingly less valuable. Similarly, today, turning clear intentions into well-structured prompts is increasingly more important. Rumors have it that ChatGPT4 could be out next week and it will be multi-modal. Some wonder what will happen to our own execution abilities, other point out obvious limits of these technologies.

Noam Chomsky on the NY Times contrasting all AI hype makes an incredibly insightful point. Large Language Models (LLMs) are incapable of distinguishing the possible from the impossible. This is surely a limit per se, but to me it feels like as a possibility. I imagine strongest use cases around brainstorming, prototyping and creative pursuits.

One key challenge: the way we interact with AI today is still rather solipsistic. I don’t to chat with AI one-on-one, I want it to empower creative collaboration. Right now, it orderly takes in requests and executes them one by one.

What If it integrated them from multiple people in a way that is context-aware?

In other words, the next thing I am most looking forward to are team chats with AI.

My deepest feeling? Possibility is being reshaped. Imagination used to be impermanent and private. Now, it is persistent and shared. There’s a $ 1bn dollar idea there somewhere. You are welcome.

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Thank you for reading Cloud Vertigo, where we look further afield! This weekend issue is light on web3, but heavy on AI.

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David

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The weekend edition

If you only have a few minutes to spare, these are things that stood out in the middle of the Maelstrom this week.

A Midjourney stub for a CloudVertigo logo. I like the vibe but it looks like they still need to get the text bit right…

1. Midjourney. Imagination used to be impermanent and personal. It’s now interpersonal and persistent. I simply love their mission statement.

   An independent research lab exploring new mediums of thought and expanding the imaginative powers of the human species.

   Isn’t that so cool? Some striking things of their approach to visual AI:

   1. It’s semi-structured: free text is great, but power users need ritual magical spells. Human language is full of ambiguity. It’s great to have its expressiveness, but it’s also limiting. Especially useful is the seed command, which makes the conjuring deterministic. By specifying a seed, you can ask the same thing twice and expect the same result. Neat.

   2. It’s collaborative: you interact with it on a shared Discord channel. This way your prompts and the results are not private. But they never were anyway, so why fool yourself? Bonus points: the learning curve is a lot smoother. When you read what others are asking, half of your job is done. We learn together by mirroring others.

   3. It’s opinionated: it has been trained to make some sort of “beautiful stuff”. We preserves consistently look and feels, which I’m just shying away from calling aesthetics. The result is a collection of well-defined styles you can browse here.

   Hot take

   AI frameworks of the future will have personalities, immediately recognizable external traits that foreshadow their inner workings. Consistency is key.

2. Arc. Internet Computers is Monday’s 12k words visionary piece on Not Boring by Packy McCormick, a great inspiration and a true Substack legend. It steers away from all the trending buzzwords and delivers real insights into one of the least appreciated, but most valuable piece of tech: internet browsers.

   

   1. Browsers have hardly evolved since the 90s. They have been the key battlefield of the Browser Wars, that have shaped them (and us!) for better or for worse…

   2. Let’s face it, the browser’s experience sucks. We all know the daunting feeling of having too many open tabs. It’s messy and chaotic. Critics say this has to do with the fact the leading browser is owned by a company whose main business is Internet search…

   3. As more services move to the cloud - think every other SaaS! - browsers have tremendous potential to become the Operating Systems of our Internet Computers, disrupting the importance of Operating Systems. They could be the one stop shop, the last app we will ever need.

   4. If there is one incumbent that has an incentive to take on that challenge is not Apple nor Google. It’s Microsoft… but we know how Microsft has done browsers so far! Ouch.

   5. There is a new kid in town: Arc. He’s young and uncompromising. The user experience is fit for Innovators (examples of Arc love here, here, here, and more where they came from). Currently it’s available in waitlist only. The irony? Good news for Apple. Since I was handed an invite, I am upgrading my MacBook’s OS just to try it out.

      

   
   Question mark

   Can a young challenger player named Arc by The Browser Company of New York that promises an uncompromisingly new magical browser experience overtake incubents? McCormick is optimistic, but admits he has a penchant for great products versus great distribution.

3. Silicon Valley Bank collapse. While this a Finance story rather than a Tech story, its underpinning theme is noteworthy. There is something deeply paradoxical behind it. Almost a tad disturbing.

   1. Today feels riskier than tomorrow. The short term uncertainty is grater than the long term one. 2 years US treasuries are yielding more than 10 years. When this happens, some argue usually things go south.

      

   2. But, alas, counter-intuitive is the new normal. We lived through the ultra-low interest rates era. The problem was the balance sheets of the Bank of Crypto (Silvergate) and the Bank of Startups (SVB) were heavily exposed to interest-rate hikes: on the assets side by holding long-dated bonds, which loose value with rate hikes; and on the liabilities side, with correlated depositors incurring higher cash burn.

   And so if you were the Bank of Startups, just like if you were the Bank of Crypto, it turned out that you had made a huge concentrated bet on interest rates. Your customers were flush with cash, so they gave you all that cash, but they didn’t need loans so you invested all that cash in longer-dated fixed-income securities, which lost value when rates went up. But also, when rates went up, your customers all got smoked, because it turned out that they were creatures of low interest rates, and in a higher-interest-rate environment they didn’t have money anymore. So they withdrew their deposits, so you had to sell those securities at a loss to pay them back. Now you have lost money and look financially shaky, so customers get spooked and withdraw more money, so you sell more securities, so you book more losses, oops oops oops. (Matt Levine, Bloomberg)

   1. It’s a bit like in a Chess endgame. There’s the principle of two weakeness: you can possibly defend one, but not two. Add a pinch of panic and the human herd mentality, the bank run is served.

Thanks for reading along! Enjoy the rest of your weekend. Send me your thoughts on topics to deep dive into next week to david@cloudvertigo.xyz. Onwards!