Last Week Of January 2024

MUSIC AI RESET
SoundCloud's AI Partnerships Raises Concerns & Google Faces Probe

SoundCloud is making waves in the music industry with its recent collaborations with AI companies – Fadr, Soundful, and Voice-Swap. The partnerships aim to empower artists by allowing them to upload songs created with assistive AI tools directly to the platform. While Voice-Swap, co-founded by artist DJ Fresh, focuses on cloning musicians' voices for use in original tracks, Soundful generates studio-quality music, and Fadr specializes in creating mashups and remixes.

However, SoundCloud is taking a proactive approach to prevent AI abuse, blocking AI bots from crawling its site and training models on its catalog. CEO Eliah Seton emphasizes an "artist-first" strategy and seeks to explore how AI technology can serve and empower musicians.

Meanwhile, Google and YouTube's AI strategy has come under scrutiny, with claims that Google trained its AI model on a substantial set of music, including copyrighted major-label recordings, before seeking rights holders' permission. This approach raises questions reminiscent of past debates over the 'value gap,' where platforms like YouTube uploaded music without explicit licenses.

This development gains significance as the Federal Trade Commission (FTC) is actively investigating generative AI investments and partnerships of major technology companies. Google, along with Amazon, Microsoft, OpenAI, and Anthropic, have been ordered to provide information on their AI initiatives. The outcome of this inquiry could have regulatory implications, reflecting the ongoing concerns in the music industry regarding the use of AI and copyright infringement issues.

As the music landscape evolves with AI integrations, both SoundCloud's artist-centric approach and Google's training-first methodology contribute to the broader discourse on responsible AI use in the creative realm. The outcomes of these strategies will not only shape the user experience on platforms like SoundCloud but also influence how major tech companies navigate AI and copyright concerns in the eyes of regulators. 🤖🥁🎹🎵

CRYPTO RESET
Crypto Waters Calm As GBTC Outflows Ease: Implications For Bitcoin ETFs And A Looming Supply Shock

Amid the recent turbulence in Bitcoin markets, approximately $4.8 billion has exited the Grayscale Bitcoin Trust (GBTC), the world's largest Bitcoin portfolio, since its conversion into an exchange-traded fund (ETF) on January 11. This shift has been accompanied by a 20% decline in Bitcoin's value during the same period. The fund's transition from a closed-end structure enabled investors to close a widely-used arbitrage trade and prompted sales from the estate of the bankrupt FTX exchange.

The daily outflows from GBTC peaked at $641 million on January 22 but moderated to $394 million by January 25. A notable trend is the diminishing redemptions from GBTC, signaling potential stabilization. Sean Farrell, Head Crypto Strategist at Fundstrat Global Advisors, observes that a slowdown in the outflows could significantly boost the market.

This transformation coincided with the debut of nine other spot Bitcoin ETFs in the US, including those from BlackRock Inc. and Fidelity Investments. These funds collectively attracted over $5 billion, with a net inflow of approximately $745 million into the 10 spot ETFs overall.

The Grayscale fund's shares, now in ETF format, shifted from a discount to the portfolio's underlying Bitcoin holdings, aligning with ETF units' tendency to closely follow net asset value.

JPMorgan Chase & Co. strategists noted that profit-taking from prior GBTC investments, made at a discount to net asset value last year, might have played a significant role in Bitcoin's recent correction. However, they anticipate such profit-taking to be largely concluded, potentially limiting Bitcoin's downside from this point onward.

Interestingly, despite the recent market challenges, Bitcoin has demonstrated resilience, holding its price in the upper $30,000s. This, coupled with slowing GBTC outflows, suggests sustained interest, especially as Spot ETF inflows are anticipated to grow. Looking ahead, the impact of ETF providers allocating 1% of their funds to these assets could trigger substantial Bitcoin demand, possibly resulting in a supply shock given the limited circulating supply and upcoming halving in April-May. 😎💰

TECH RESET
Is This The Dawn Of AI Takeover? Tech Job Landscape Shifts Amidst Layoffs And Unprecedented AI Investments

The tech industry is experiencing a dynamic shift as the surge in artificial intelligence (AI) investments fuels an unparalleled hiring frenzy while other segments witness layoffs. Over 20,000 tech employees have lost their jobs in 2024, setting the stage for what experts predict will be an "unprecedented" hiring spree in AI. Big Tech, including Google, is redirecting its focus and investments toward AI, shedding jobs in non-strategic areas. Google CEO Sundar Pichai announced more job cuts as the company intensifies its AI investments, emphasizing the need to make tough choices for ambitious goals.

The hiring fervor in AI comes as an "arms race" across the tech landscape, with companies prioritizing this transformative technology. Google, in particular, has recently trimmed jobs in its pursuit of efficiency and emphasis on major product priorities, responding to advancements by competitors such as Microsoft.

As this trend unfolds, other segments of the tech industry are witnessing job losses. German enterprise software company SAP is restructuring about 8,000 roles to enhance its focus on business AI, a move echoed by Amazon, which laid off hundreds in its video-streaming, studio, Twitch, and Audible divisions while aggressively investing in AI. Even Duolingo and Vroom have taken steps to cut jobs and streamline their operations to leverage AI-driven strategies.

The shift is attributed to the increasing costs associated with AI, as training and deploying AI technologies demand significant financial resources. The ripple effect of layoffs in non-strategic areas is expected to continue, with companies seeking ways to cut costs in order to fund AI advancements. Despite the potential negative impacts on specific job sectors, the industry-wide push toward AI signifies a transformative period with implications for both job markets and technological innovation. 😳😬

DISCLAIMER:
This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions or investments. Please be careful and do your own research.