I was told there would be rate cuts
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
📈 Trending Up: Surprise … trade barriers (FT) … UK defense spending, as the Pax Americana is torn down to make room for dictators … speaking of room for dictators … faster, cheaper, open-source AI … more … Chinese demand for Nvidia chips, and their homegrown competitors (FT) … hindsight …
Signal, which stands up to governments that demand an
encryption backdoorClimateTech, thankfully. Tim De Chant reports that Mitico just raised a $4.5 million Seed round for carbon removal technology.
📉 Trending Down: Republican strategic unity across Congress … no, really … press freedom … press freedom (redux) … roadkill …
Peace, after Chinese-crewed ships cut cables and Taiwan detained the offenders. NatSec Twitter vibes say that as the United States rolls over for Russia, China is emboldened to push harder on its democratic neighbor that it wishes to extirpate.
Crypto prices, which are taking a pounding. Bitcoin is down to $86,000 (-9.8% last seven days), Ethereum is off 11.2% over the same timeframe, while XRP has puked 15% in the last week. Solana is off 18% in the last seven days. It’s a mess out there.
Surveillance
Optifye.ai, a self-described “AI performance monitoring system for factory workers” posted a demo on social media yesterday that was criticized for presenting a future in which camera-enabled AI systems are aimed at line workers and used to monitor their performance. The gist is that software-using factory overlords — forepeople? — could pinpoint whom on their assembly line is underperforming, and potentially causing bottlenecks.
From a systems perspective, the idea makes sense. Software is used to monitor lots of things to find issues, so why not apply it to human labor inside of factories where work is executed in steps, and by hand? Hell, mix in cameras and the like that cost all but nothing, infinite digital storage, and AI systems to sort out who is working faster or slower than expected, and you might be able to wring out another nibble of output!
From a human perspective, the idea is odious. Treating humans like machines isn’t so good as people are people and machines are machines. You need to care for them, invest in them, and expect from them, differently.
But here’s the weird thing: People were super critical of the concept of using AI to make it easier for bosses to harass workers — or: using AI to help job-creators ensure workplace expectations are met — and yet that’s what bosses in digital environments are doing right now:
The workplace has become a surveillance state (The Register, November 2024)
Your Company Is Watching You. And Probably Doing It All Wrong. (WSJ, September 2024)
Reports are that Optifye took the teaser demo down. I can’t be bothered to fact-check that. Someone is going to build this. It’s not even a question. And as AI systems get better, this sort of surveillance will become pervasive. Even Hacker News commentary was mildly critical.
Takeaway: Anything humans do that is undifferentiated will be automated using AI-powered tech, or surveilled by AI systems to ensure automation-like results.
I was told there would be rate cuts
Bad news for those of us champing at the bit for IPOs, sadly:
February 15th: “Bank of America Securities analysts said the CPI numbers increased the firm's conviction that the Fed cutting cycle is over.”
February 25th: “Long-time Bank of America CEO says their expectation is that the Fed won't cut rates at all this year and into next year.”
We went from probably no more rate cuts to an expectation that we might not see the Fed cut until 2026. At least per BofA. Looking into the future via FedWatch, there’s a 50% chance priced in today that there will be a 25 bip (0.25%) cut by mid-June. So, not everyone agrees with the Bank, for what it’s worth.
But even an expectation of flat rates could further inhibit skittish IPOs. Which is why the following riff from Charles Hudson — Precursor Ventures, one of my favorite VCs — hits so hard:
Many in the venture business have described the recent slowdown in IPO activity as more of a blip than a fundamental change in our industry. What if the IPO drought is not so much a drought as a reset to a new, lower volume of IPOs going forward?
Yeah.
AI is overrated underrated overrated underrated really good?
How about we close with some good news? It appears that Anthropic’s new Claude Code model is seeing rave early reviews. To wit:
“Claude 3.7 Sonnet is the best model in the world for code.”
“Claude Code is gorgeous, awesome experience. did an amazing job.”
And lots of folks are going to get to use it: “Anthropic’s Claude 3.7 Sonnet is now available to all customers on GitHub Copilot Pro, Business, and Enterprise.”
I particularly liked this Reddit post:
And child comment:
Open-source AI will own a least a large portion of our AI future. But the closed-source crews are doing big things too, and it seems that there is still ample performance to be yanked out of existing tools and systems. Onward into the future when I can spin up whatever app I want, whenever I want, without having to hire folks to build it for me.
Speaking of which, Google just announced free coding help from Gemini Code Assist. I love a competitive war. The benefits are bonkers good for us folks living and vibing out in the market.