29 April 2022

Reuters: “Musk told banks he will rein in Twitter pay, make money from tweets”

Bloomberg News reported earlier on Thursday that Musk specifically mentioned job cuts as part of his pitch to the banks. One of the sources said that Musk will not make decisions on job cuts until he assumes ownership of the company later this year. He went ahead with the acquisition without having access to confidential details on the company’s financial performance and headcount.

Musk told the banks he also plans to develop features to grow business revenue, including new ways to make money out of tweets that contain important information or go viral, the sources said.

Ideas he brought up included charging a fee when a third-party website wants to quote or embed a tweet from verified individuals or organizations.

Musk has also lined a up a new chief executive for Twitter, one of the sources added, declining to reveal the identity of that person. He told Twitter’s chairman Bret Taylor earlier this month that he does not have confidence in the San Francisco-based company’s management. Parag Agrawal, who was named Twitter’s chief executive in November, is expected to remain in his role until the sale of the company to Musk is completed.

Krystal Hu & Anirban Sen

The drama surrounding Elon Musk’ deal to acquire Twitter continues, and will probably stay a hot topic until the deal comes through, and afterwards… That he’s planning layoffs is hardly a surprise – he already started harassing prominent Twitter executives on Twitter, no doubt hoping they’ll quit before he fires them, saving him from paying their severance packages – nor is his lack of confidence in the current CEO – I continue to suspect he will seek to reinstate Jack Dorsey.

25 April 2022

Musings on Markets: “Elon’s Twitter Play: Valuation and Corporate Governance Consequences”

The problem that Twitter’s management will face in mounting a case that Twitter is worth more, if it is run differently, is that they have been the custodians of the company for the last decade, and have been unable or unwilling to deliver these changes. Shareholders in Twitter will welcome management’s willingness to consider alternative business models, but the timing makes it feel more like a deathbed conversion rather than a well thought through plan. Elon Musk’s problem, on the Twitter deal, is a different one. If you think Jack Dorsey was stretching the limits of his time by running two companies, I am not sure how to characterize what Musk will be doing, if he acquires Twitter, since he does have a trillion dollar company to run, in Tesla, not to mention SpaceX, the Boring company and a host of other ventures. In addition, Musk’s unpredictability makes it difficult to judge what his end game is, at least with Twitter, since he could do anything from selling his position tomorrow to bulldozing his way through a poison pill, taking Twitter down with him. I know that there are question of how Musk finance the deal and whether he can secure funding, but of all of the impediments to this takeover, those might be the easiest to overcome. The fact that Twitter’s stock price has stayed stubbornly below Musk’s offering price suggests that investors have their doubts about Musk’s true intentions, and whether this deal will go through.

Aswath Damodaran

A valid point that I have thought about multiple times: people loved to criticize Jack Dorsey for being a part-time CEO, but nobody complained about Musk running God-knows how many companies and projects simultaneously. If I were to speculate, it was probably because Musk is viewed as highly involved in everything, a workaholic micromanager with no personal life, and Americans love to adulate such role models, despite promoting an unhealthy lifestyle. I for one do not envy the pressure Twitter employees will find themselves in should this deal go through.

Every: “Elon is Right: Twitter should Open Up the Algorithm”

As everybody knows, Elon Musk wants to buy the company, and one of the ideas he’s pushing is to open-source the algorithm that decides how tweets are ranked in all of our timelines. Whether or not the sale goes through (seems unlikely), I actually think this is a great idea. In fact I would go further and argue Twitter should not only open-source their algorithm so we can all see how it works, I think they should create an open marketplace for algorithms where anyone can build their own, and use algorithms created by others.

For example I’d want to try an algorithm that attempts to prioritize nuanced conversations about important topics. Maybe someone else would want algorithms to find mind-expanding threads, savage dunks, or thirst traps of hot new snax.

Would this transform society? No. Would it “unlock Twitter’s true potential”? Probably not, tbh.

But I do think it would be a solid step towards making Twitter a better and more fun place for everyone, and I think it could rebuild some marginal trust in Twitter as an institution, by demanding less of it. It would give more control to users, and move Twitter back towards its pirate roots of operating more like an open protocol, while still protecting against the downsides of full decentralization.

Nathan Baschez

If feels like the notion of open-sourcing Twitter’s algorithm has been around forever, and now that Elon Musk has developed a malign interest in the company, he adopted it as one of his solutions to ‘fix’ the site. It strikes me as the type of thought that, when you think about them for more than five seconds, you realize they’re a rare combination of completely preposterous and utterly ineffective.

21 April 2022

Sam Altman: “DALL•E 2”

3) Copilot is a tool that helps coders be more productive, but still is very far from being able to create a full program. DALL•E 2 is a tool that will help artists and illustrators be more creative, but it can also create a “complete work”. This may be an early example of the impact AI on labor markets. Although I firmly believe AI will create lots of new jobs, and make many existing jobs much better by doing the boring bits well, I think it’s important to be honest that it’s increasingly going to make some jobs not very relevant (like technology frequently does).

4) It’s a reminder that predictions about AI are very difficult to make. A decade ago, the conventional wisdom was that AI would first impact physical labor, and then cognitive labor, and then maybe someday it could do creative work. It now looks like it’s going to go in the opposite order.

Sam Altman

At the risk of sounding callous, the second remark feels rather obvious in retrospect considering the current capabilities of machine learning: large swaths of modern art, from abstract painting to electronic music, have diverged considerably from everyday reality. A machine learning system can easily replicate patterns of colors, motion, and sounds that spark some emotional connection in people, enough to be called ‘art’ by some of them.

19 April 2022

CNBC: “CNN+ struggles to lure viewers, drawing under 10,000 daily users”

CNN+ launched on March 29. The subscription news streaming service, which charges $5.99 a month or $59.99 annually, only became available on Roku on Monday and still isn’t on Android TV. Still, the paltry audience casts doubt on the future of the application following the recently completed combination of Discovery and WarnerMedia into Warner Bros. Discovery.

To put that daily user number in perspective, CNN’s cable network suffered a sharp decline in viewership last year but still rang up an average of 773,000 total viewers a day.

It’s possible, if not likely, that CNN+ programming will be offered as part of a larger bundled offering of HBO Max and Discovery+, according to people familiar with the matter. Both of those services have millions of subscribers.

Ex-WarnerMedia CEO Jason Kilar decided to push ahead with CNN+’s launch two weeks before merging the company with Discovery. Kilar left the company last week. He was upbeat about subscriber numbers in an interview with CNBC, but didn’t cite any figures.

Alex Sherman

Speaking of the unchecked proliferation of streaming services, here is an indication that consumers are tiring of paying for new monthly plans with minuscule added value.

18 April 2022

Bloomberg: “The Phone Company didn’t Destroy HBO. Will the Cable Guy?”

Many of the current streaming services will fold or merge.

There will be a winnowing. It’s going to happen over the next 24 to 36 months. In the same way that broadcast TV history had the emergence of three and then four with Fox in the US.  Even though streaming has unlimited shelf space, we’ll see three major scaled players when it comes to pure play storytelling companies. There will be increased separation between the leaders. I do believe WarnerMedia and specifically HBO, Disney and Netflix will separate themselves. The level of investment some folks are making is not sustainable.

Most customers will accept advertising for a lower price.

Close to 50% of every new [HBO Max] subscriber is choosing the ad tier. Hulu, the last stat they shared publicly, is they are north of 60%. I suspect that in the not too distant future you’ll see the majority of new HBO Max subs choose the ad-supported option. We tried to price it in a way where we’d be indifferent. We’re making a little more on the ad-supported version because of dollars we’ll generate from advertising.

That means Netflix will adopt ads.

I don’t think the ceiling is 222 million subscribers. I think the ceiling is far closer to 1 billion. You get there by giving customers the choice.

Lucas Shaw

Seems fairly obvious that people would opt for the lower price when given the choice – in fact Spotify used this model successfully for years to drive growth for both tiers. HBO Max doesn’t have different tiers here in Romania, but the price is much lower than Netflix and the migration from previous HBO Go subscribers came with a lifetime discount, so I don’t see much need for an ad-supported option. I would at least hope that advertising doesn’t interrupt the viewing, as it does with classic TV and on YouTube – YouTube’s ads have become increasingly aggressive and annoying. I think streaming companies could run ads between episodes or before and after the movie, as in cinemas, and still get enough return to justify the lower price.

17 April 2022

Hypercritical: “An Unsolicited Streaming App Spec”

This is the one feature that may seem the least “basic”, but it really is essential. There’s so much good content available today that we need our apps to help us keep track of it all, not just what we’re currently watching. If state preservation and visual communication are the app’s short-term memory, then “My List” is the app’s long-term memory.

This is a pretty boring list, huh? A streaming app with only these features seems like it would be quite limited. But the sad fact is that few, if any, popular streaming apps reach even this extremely low bar. Let’s take a look at some examples.

But none of this changes the overall picture, which is that even the most popular, well-funded streaming video apps fail to get the basics right in a shocking number of ways. Conflicting incentives surely explain some of these failings (e.g., promoting new content rather than letting me quickly resume what I was already watching), but an explanation doesn’t make these shortcomings any less bothersome.

John Siracusa

Interesting critique on the design of streaming apps. I agree with most of these bare-bones basics listed by the author – maybe except for his insistence on one-click access to subtitles; I always watch TV with subtitles on, so the only time when I need to access these controls is when I start a new series without Romanian subtitles, and I need to decide which other language to choose.

13 April 2022

The Atlantic: “Absolute Power”

Even MBS’s critics concede that he has roused the country from an economic and social slumber. In 2016, he unveiled a plan, known as Vision 2030, to convert Saudi Arabia from—allow me to be blunt—one of the world’s weirdest countries into a place that could plausibly be called normal. It is now open to visitors and investment, and lets its citizens partake in ordinary acts of recreation and even certain vices. The crown prince has legalized cinemas and concerts, and invited notably raw hip-hop artists to perform. He has allowed women to drive and to dress as freely as they can in dens of sin like Dubai and Bahrain. He has curtailed the role of reactionary clergy and all but abolished the religious police. He has explored relations with Israel.

He has also created a climate of fear unprecedented in Saudi history. Saudi Arabia has never been a free country. But even the most oppressive of MBS’s predecessors, his uncle King Faisal, never presided over an atmosphere like that of the present day, when it is widely believed that you place yourself in danger if you criticize the ruler or pay even a mild compliment to his enemies. MBS’s critics—not regicidal zealots or al‑Qaeda sympathizers, just ordinary people with independent thoughts about his reforms—have gone into exile. Some fear that if he keeps getting his way, the modernized Saudi Arabia will oppress in ways the old Saudi Arabia never imagined. Khalid al-Jabri, the exiled son of one of MBS’s most prominent critics, warned me that worse was yet to come: When he’s King Mohammed, Crown Prince MBS is going to be remembered as an angel.

Graeme Wood

Fascinating and comprehensive profile of Saudi Arabia’s future king who could shape politics in the Middle East – and beyond – for the coming decades, maybe even half a century. He strikes me as a dangerous mix of Vladimir Putin (MBSseven-years-long invasion of Yemen has caused numerous deaths and destruction – supported with weapons deliveries by the United States – and only now there are tentative signs of a cessation of hostilities), Xi Jinping (promoting economic prosperity for the masses while relentlessly cracking down on dissent and criticism) and Louis XIV (L’état, c’est moi!). As for his forced modernization of the country, we will have to wait and see if this becomes a permanent cultural shift, or if it will cause a violent backlash and sudden return towards conservative Islam – as it happened in Iran in 1979.

11 April 2022

Bloomberg: “Elon Musk Bought Some Twitter”

Look this all makes complete sense, obvious, intuitive, simple sense. If you are the richest person in the world, and annoying, and you constantly play a computer game, and you get a lot of enjoyment and a sense of identity from that game and are maybe a little addicted, then at some point you might have some suggestions for improvements in the game. So you might leave comments and email the company that makes the game saying “hey you should try my ideas”. And the company might ignore you (or respond politely but not move fast enough for your liking). It might occur to you: “Look, I am the richest person in the world; how much could this game company possibly cost? I should just buy it and change the game however I want.” Even if your complaints are quite minor, why shouldn’t you get to play exactly the game you want? Even if you have no complaints, why not own the game you love, just to make sure it continues to be exactly what you want? The game is Twitter, the richest person in the world is Elon Musk, and:

Elon Musk has taken a 9.2% stake in Twitter Inc. to become the platform’s biggest shareholder, a week after hinting he might shake up the social media industry.

Matt Levine

I read this news last week with a sense of dread, fully expecting Elon Musk to come in guns blazing and pressure Twitter to match his wild random ideas about how the platform should operate. The story quickly became crazier still, from Musk doing some sneaky stock market manipulation by delaying to file a form, to Twitter offering him a seat on the board in exchange for a limit on his stake in the company, to Musk announcing today that he will not be joining the board after all…

08 April 2022

Foreign Affairs: “The Toll of Economic War”

To better grasp the choices to be made in the current economic sanctions against Russia, it is instructive to examine sanctions use in the 1930s, when democracies similarly attempted to use them to stop the aggression of large-sized autocratic economies such as Fascist Italy, imperial Japan, and Nazi Germany. The crucial backdrop to these efforts was the Great Depression, which had weakened economies and inflamed nationalism around the world. When Italian dictator Benito Mussolini invaded Ethiopia in October 1935, the League of Nations implemented an international sanctions regime enforced by 52 countries. It was an impressive united response, similar to that on display in reaction to Russia’s invasion of Ukraine.

But the league sanctions came with real tradeoffs. Economic containment of Fascist Italy limited democracies’ ability to use sanctions against an aggressor who was more threatening still: Adolf Hitler. As a major engine of export demand for smaller European economies, Germany was too large an economy to be isolated without severe commercial loss to the whole of Europe. Amid the fragile recovery from the Depression, simultaneously placing sanctions on both Italy and Germany—then the fourth- and seventh-largest economies in the world—was too costly for most democracies. Hitler exploited this fear of overstretch and the international focus on Ethiopia by moving German troops into the demilitarized Rhineland in March 1936, advancing further toward war. German officials were aware of their commercial power, which they used to maneuver central European and Balkan economies into their political orbit. The result was the creation of a continental, river-based bloc of vassal economies whose trade with Germany was harder for Western states to block with sanctions or a naval blockade.

Nicholas Mulder

Quite a disturbing historical analogy to the current geopolitical situation – today’s Russia as junior partner in relation to China mirroring the dynamic between Fascist Italy and Nazi Germany in the 1930s. Ominously, the parallels can go further still: just as Nazi Germany was too large to contain back then, China has also grown into an economic force that would be impossible to sever from the world economy without inflicting serious and lasting damages. Americans are quick to berate Europeans, and Germany in particular, about their energy dependency on Russia, but the US economy basically runs on imports of consumer goods from China. It’s almost inconceivable that the US might someday impose strict sanctions on Chinese trade – public opinion was in a frenzy over a slight increase in gas prices, despite the US being largely energy independent; how would they react if the supply of their precious iPhones suddenly dried up?

05 April 2022

IEEE Spectrum: “The New Supersonic Boom”

The companies working hard now to bring commercial supersonic flight back understand that they have to address sonic-boom noise, one way or another. And the farthest along, Boom Technology, is also taking pains to explain how its planes can be flown with fuels that won’t add to the enormous amounts of carbon that commercial aviation is already spewing into the air.

There are a couple of problems with that logic, says Dan Rutherford, who is aviation and shipping program director for the International Council on Clean Transportation. First of all, once the plane is out the door, there’s very little control that a manufacturer has over what fuel is used. What these aircraft manufacturers are contending is that their eventual customers are going to be willing to pay to prevent net carbon emissions. The planes themselves are not going to be fuel efficient, says Rutherford. He and two colleagues estimated in 2018 that a commercial supersonic airliner like the one Boom is designing would likely use five to seven times as much fuel per passenger-kilometer as a comparable subsonic aircraft.

Rutherford further notes that biomass-derived jet fuels are at least three or four times as expensive as conventional jet fuel and that synthetic jet fuel made from carbon extracted from the atmosphere will be more expensive still. Combine those higher fuel costs with the higher fuel consumption and you start to have such high operating costs for those planes that it is very difficult to see them succeed in the market, he says.

David Schneider

I have largely skipped past this piece of news last year, as it didn’t seem particularly relevant in the short term, nor particularly likely to materialize in the proposed timeframe. I then listened to a podcast with Kathy Savitt, the President and Chief Commercial Officer of Boom Technology, and my biggest takeaway from that discussions was that they’re working on a new shiny toy for the hyper-rich!

04 April 2022

U.S.-China Perception Monitor: “Possible Outcomes of the Russo-Ukrainian War and China’s Choice”

In the sense that an escalation of conflict between Russia and the West helps divert U.S. attention from China, China should rejoice with and even support Putin, but only if Russia does not fall. Being in the same boat with Putin will impact China should he lose power. Unless Putin can secure victory with China’s backing, a prospect which looks bleak at the moment, China does not have the clout to back Russia. The law of international politics says that there are “no eternal allies nor perpetual enemies”, but “our interests are eternal and perpetual”. Under current international circumstances, China can only proceed by safeguarding its own best interests, choosing the lesser of two evils, and unloading the burden of Russia as soon as possible.

A just cause attracts much support; an unjust one finds little. If Russia instigates a world war or even a nuclear war, it will surely risk the world’s turmoil. To demonstrate China’s role as a responsible major power, China not only cannot stand with Putin, but also should take concrete actions to prevent Putin’s possible adventures. China is the only country in the world with this capability, and it must give full play to this unique advantage. Putin’s departure from China’s support will most likely end the war, or at least not dare to escalate the war. As a result, China will surely win widespread international praise for maintaining world peace, which may help China prevent isolation but also find an opportunity to improve its relations with the United States and the West.

Hu Wei

A clear and concise argument against Chinese support for Putin, but I fear that we are overestimating the weight of rational arguments in foreign policy – after all, a full-scale invasion of another country is hardly rational in terms of costs vs. benefits. Indeed, other channels support the ‘no-limit partnership’ with Russia for its supplies of energy, food and other raw materials, and to potentially rely on Russia’s nuclear arsenal as deterrence in the event of a conventional war with the US in the South China Sea. Publicly China has declined to ‘take sides’, which roughly translates into tacit support for Putin. A position that resulted in a frosty atmosphere at a recent EU-China summit and that is unlikely to change substantially in favor of Western interests.

01 April 2022

The New Yorker: “Why John Mearsheimer Blames the U.S. for the Crisis in Ukraine”

I’m curious what you think, if any, of the moral dimension to what’s going on in Ukraine right now.

I think there is a strategic and a moral dimension involved with almost every issue in international politics. I think that sometimes those moral and strategic dimensions line up with each other. In other words, if you’re fighting against Nazi Germany from 1941 to 1945, you know the rest of the story. There are other occasions where those arrows point in opposite directions, where doing what is strategically right is morally wrong. I think if you join an alliance with the Soviet Union to fight against Nazi Germany, it is a strategically wise policy, but it is a morally wrong policy. But you do it because you have no choice for strategic reasons. In other words, what I’m saying to you, Isaac, is that when push comes to shove, strategic considerations overwhelm moral considerations. In an ideal world, it would be wonderful if the Ukrainians were free to choose their own political system and to choose their own foreign policy.

But in the real world, that is not feasible. The Ukrainians have a vested interest in paying serious attention to what the Russians want from them. They run a grave risk if they alienate the Russians in a fundamental way. If Russia thinks that Ukraine presents an existential threat to Russia because it is aligning with the United States and its West European allies, this is going to cause an enormous amount of damage to Ukraine. That of course is exactly what’s happening now. So my argument is: the strategically wise strategy for Ukraine is to break off its close relations with the West, especially with the United States, and try to accommodate the Russians. If there had been no decision to move NATO eastward to include Ukraine, Crimea and the Donbass would be part of Ukraine today, and there would be no war in Ukraine.

Isaac Chotiner

This interview was heavily criticized on Twitter and after reading it I can see why. It mixes circular reasoning (‘I stated this, therefore it must be true’), contradictory statements (contemporary Russia doesn’t have the economic foundation to sustain a powerful military, yet it’s somehow one of three great powers alongside the US and China), impractical policies (fostering friendly relations with the Russians as part of a balancing coalition against China is a good idea in theory, but in practice the right moment to engage in that policy was the early ‘90s – instead the US treated Boris Yeltsin as a drunken fool and dismissed Russia as a marginalized declining power that couldn’t possibly threaten anyone despite its large military and nuclear arsenal), assumptions that Putin’s decision making is overall rational (if it were, he never would have invaded Ukraine in the first place), and dismissing the agency and security needs of Eastern European states (who voluntarily aligned with NATO and the European Union to achieve prosperity and regional security precisely because they were afraid of a resurgent Russia). And I appreciated that the interviewer pushed back on some of Mearsheimer’s assertions.