Dana Blankenhorn

Open Source in an AI World

The history of generative AI begins with a betrayal. 

OpenAI, meant to give developers a high and rising model for AI development, went closed source and got into bed with Microsoft. Now Microsoft is leading the charge to regulate AI, raising costs for competitors and creating closed source lock-in. The company wants licensing for all AI, bureaucratic delays before anyone or anything can compete with its proprietary offerings.

The current listing for the Google AI page claims it offers an “ecosystem of open-source tools, datasets, APIs and more.” But open source is never mentioned on the page itself. Google, like Microsoft, now thinks AI is too dangerous to be put into the community’s hands.  

If it’s that dangerous, guys, then ban it. Forbid machine learning, forbid progress. If code exists, someone will try to misuse it. That’s part of the law of code. The only answer is for code not to exist.

America’s Two Car Markets

The U.S. has two car markets. Its auto industry serves just one of them.

This was made crystal clear recently when General Motors said it will discontinue the Chevy Bolt, its electric sedan. It did the same with gas-powered vehicles years ago.

Sedans, crossovers, and mini-SUVs are what people drive in cities. Where roads are thin, families are small, and trips are short, you don’t need anything more. A city car will sit in a driveway 23 hours out of 24. This is what I call the mid-market, cars costing $25-35,000, plus tax, title, and license.

Contrast this with the suburban and exurban car markets, which U.S. makers do serve. They’re huge, like tanks. They’re ridiculously overpowered. When they’re electric, they weigh several tons. They destroy roads, and anything else they’re driven on.

Harbingers of Change

There are lots of harbingers that change is in the air.

You just don’t read about them.

If you look at polls, or headlines from various states, you’ll think Democrats are on the run and Republicans have absolute impunity. Polls are mostly statistical noise it takes an expert to understand. It’s what a party does with its impunity, and how folks in a democracy react, that decides the future.

I don’t care that Trump was indicted, or that Jean Carroll won her suit, or the George Santos was indicted. I don’t care about the latest stupidity from Meatball Ron or the chair-bound governor of the Great State of Texas.

The Alzheimer’s Scam

A decade ago, when I first returned to the business beat, a company called Dendreon began pushing a non-cure for prostate cancer called Provenge. 

The idea was to fit a therapy specifically to a patient’s DNA. This cost a lot of money. While Provenge did extend life, it was only by a few months. For this Dendreon wanted $93,000. 

If I had all the money in the world, I’d pay that. But if every prostate cancer patient could force insurers and government agencies to pay that, the system would go broke. You can’t have an unlimited draw from a limited pool of funds. (To the right, at the upper right, is my late mother. I learned recently she taught the first "integrated" second grade class in California history, in 1947. I am very proud of her.)

Fast forward to today. Eli Lilly and Biogen have developed drugs to treat Alzheimer’s Disease.

Sell ESPN

For all you read about how great Walt Disney CEO Bob Iger may be, the stock has gone nowhere in 5 years. It was at $101/share at the start of May 1998. It’s $102 now.

Iger got thrown into the culture wars by Florida Republicans, and while many are applauding his strategy, he wants to get out soon and needs a big win.

Selling ESPN will be a big win.

What stock analysts will tell you is that cable is dying, and ESPN is more dependent on it than anyone. It now collects $9/month from everyone’s basic cable bill whether they watch its channels or not. That’s a big reason many are canceling cable.

But there are two bigger problems looming over the company.

The first is the cost of broadcasting rights. That’s rising fast, and ESPN is losing rights auctions. It now dominates only hockey and college football. It has one-fourth of the NFL, one-half of the NBA, one-third of baseball. It has lost cricket and soccer, two huge global games. Its ESPN+ streaming service is now the home of leftovers and depends on (often crappy) local broadcasters for its feeds.

This is going to get worse because of the second problem.

SBF 30 (or higher)

“White collar crime” is crime.

Robbing someone at pen point is worse than doing it at gunpoint. You’re in a position of trust. You have a fiduciary responsibility. You are supposed to have ethics, before you have the law, to guide your actions.

Break all of that and it can be murder. People die when their wealth and future is stolen. White collar thieves steal college educations, they steal retirements, they steal food from the mouths of grandbabies. They make every honest businessperson suspect.

I thought everyone felt that way until I heard Michael Lewis, author of The Big Short and other light classics, interview Harvard Business School professor Eugene Soltes on his podcast Against the Rules.” 

Fire Sundar Pichai

Recessions are good for markets.

They show us where the rot is, where the poor performers are.

This current one is no exception. It revealed that some of our Cloud Czars, the companies dominating the global economy with hyperscale datacenters paid for with cash flow, aren’t as clothed in gold as they seem. Some are downright naked.

Early this month, I identified one source of rot and urged Jeff Bezos to fire Amazon.Com CEO Andy Jassy. But it’s also time for two other founders to get back in the game. Larry Page and Sergey Brin need to push out Sundar Pichai.

Pichai is the kind of numbers-oriented manager Wall Street loves, but Silicon Valley should despise. He’s the kind of go along, get along guy who can make the trains run on time, but completely lacks vision. In technology this is a fatal flaw.

It’s obvious in how he dealt with artificial intelligence, the new hotness of 2023.

This is not about firing an ethicist. It’s a more basic failure to see where things were going, and deploy the necessary resources to get there. 

Why Adani Fell

The U.S. stock market is off to the races again, encouraged by hints that interest rates may peak soon, and that the economy continues to grow.

But under the radar, there’s a crash. It’s in Adani Group, which you can trade over the counter under the symbol ANNRY. 

A week ago, Adani was worth over $200 billion. Today it’s fighting to hold $100 billion. CEO Gautam Adani has seen his own fortune fall to $75 billion.

This tells you something. Adani is closely held.

The stocks crashed after a report from short seller Hindenburg Group charged that they were being held up by a network of offshore companies and a very thin float. What made Hindenburg suspicious was that the value of the companies rose over 800% in just a few years, on assets like coal mines, container ports, and airports. It didn’t make sense.

But there’s another lesson here, America’s dominance of the global marketplace. About 40% of the world’s stock market value is now held in the two U.S. markets – the New York Stock Exchange and the NASDAQ. About 60% of the world’s liquidity, the capital companies require to do business, is in the U.S. That’s why the threat to cut off Chinese stocks from U.S. exchanges was so powerful. It’s why the Hindenburg report blew such a big hole in Adani’s market battleship.

Righteous War

America hasn’t fought many righteous wars.

In the 19^th century the Civil War was righteous. Everything else was conquest. The “winning of the west” was a slow motion genocide. We took the Southwest from Mexico. We took the Philippines and Puerto Rico from Spain. We teach it as democracy, as freedom. It was empire.

World War II was righteous. In retrospect, I’m glad we fought in Korea.

Other than that? We have been involved in more coups, in more places, for worse reasons, than the British Empire ever thought of. Vietnam was not a righteous war. The Gulf War was not a righteous war. Neither was the Iraq War. Afghanistan began as a righteous mission then turned into a distinctly unrighteous war.

Americans have the blood of the world on our hands, and we deny that every day. The difference between the parties is that Republicans do it more systematically.

War of the Cubes

Large tech businesses are forcing employees into a huge hidden pay cut.

They call it “return to the office.” They’re demanding that all people who have worked from home during the pandemic return to their cubes or be fired.

Let’s look at that a moment. (Buy the book.) 

If you’re an hour from work, it takes 2 hours a day to commute. Add in gas, wear on the car. Add in an hour to get ready. Add in the cost of work clothes. Add in lunch. Maybe add in drinks after work.

Now let’s look at it from the employer’s perspective. Add in rent. Add in utilities. Or society’s perspective. Add in wear on roads and other infrastructure costs. Add in fuel.

Finally, let’s talk about hidden costs. When a tech company demands tech workers do their work in offices, what they’re saying is that all the promises they made about tech 5 years ago, that it would improve productivity by letting people work from where they are, were bullshit.