A bit overcast

Author

Christian Duvall
July 14, 2023

It’s AI lawsuit season, ladies! Time to wade in to some shark-infested waters. To be honest, I just hope that I fit in my swimsuit from last year.

Here’s what we got for you:

  • AI lawsuits

  • Is Ripple a security?

  • Elon’s big announcement

  • Links and whatnot

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The more you know 💫 

It has come to my attention that some of the topics that are covered may have concepts that may be unfamiliar to the audience. In these situations, I’ll add some additional details outside of the narrative to help.

AI Lawsuits

This week several fresh lawsuits have popped up against the major players – including OpenAI, Meta, and Alphabet.

This one, led by Sarah Silverman, is going to be particularly exciting to watch as it claims the unlawful use of her jokes as training data. Her efforts might be in vain, though – when you ask ChatGPT to write a tasteful joke about the Holocaust (nsfw/nsfl), it politely declines.

So why is all of this interesting? To date, the training data for these Large Language Models (LLMs) has been a bit of a mystery. Sure, the “Common Crawl” dataset has been cited, but it’s very clear at this point that it is not the exclusive source being utilized. If it’s anything like the lawsuits claim, private and personal data as well as non-licensed sources were used in the pursuit of swimming up to the edge of Artificial General Intelligence (AGI).

💡 What is a Common Crawl?

Common Crawl (CC) has been scraping the public web since 2008, collecting raw webpage data and metadata to store for public use. It is technically a non-profit whose mission is to enable startups to “analyze the world and pursue brilliant ideas.” CC’s many petabytes of data are hosted, presumably at no charge, on AWS through Bezos’ Open Data Sponsorship program.

Even in the case that CC was the only source, commercial use of public data is not adequately protected by the Fair Use doctrine and companies looking to profit massively will have a legitimate concern on their hands.

There is no doubt that the outcome of these lawsuits will have an enormous impact on the future of AI. Without the massive training sets to build upon, the “all purpose” tools like ChatGPT and Bard will be entirely enfeebled.

With where we are in the AI curve, I have to believe that the innovation coming down the pipeline will be in specialized tools for a much narrower band of use cases. Those tools will be trained with a relatively small set of licensed sources and will involve far less noise.

Ripple is…🥁…not a security! Well, sort of.

Yes, according to the United States District Court, Ripple ($XRP) is not entirely a security The details can be read in the official document, but I promise you, it doesn’t read as smooth as a 34-page novella by Michael Lewis.

Despite the clickbait titles already flooding the Internet, the relisting of the token at major exchanges, and the consequent 🚀 🌕️ in Ripple’s market price, the actual verdict is not so cut and dry.

It appears that Ripple sold directly to hedge funds and other investment institutions is still considered a violation of the Securities Act. This totals up to be nearly $730 million, which is only slightly less than the GDP of Turks and Caicos.

Mmm, Turks and Caicos. I am in desperate need of a vacation.

From the court document:

Based on the totality of circumstances, the Court finds that reasonable investors, situated in the position of the Institutional Buyers, would have purchased XRP with the expectation that they would derive profits from Ripple’s efforts…

Therefore, having considered the economic reality and totality of circumstances surrounding the Institutional Sales, the Court concludes that Ripple’s Institutional Sales of XRP constituted the unregistered offer and sale of investment contracts in violation of Section 5 of the Securities Act.

So now we’re left with a new asset class – Schrodinger’s Security. It now depends entirely upon who opened the box.

This is a shining example of why updated guidance is required for any company in this space to truly be compliant. No one tell them about ForEx hedge funds, ok?

xAI

Elon Musk announced xAI this week and we know next to nothing about it yet.

xAI: Understand the Universe

xAI is a new company founded by Elon Musk that sets out to Understand the Universe.

https://x.ai

With a mission to “Understand the Universe”, it’s goals seem far more lofty than Open AI’s, whose stated mission is to help me proofrede theese postz.

But, Elon’s hosting a Twitter space today @ 1p PT/4p ET, where we hope to get a deeper look inside what they are doing.

I have to wonder if the plan will be to sell the IP from Tesla’s various AI ventures over to xAI and unify the mission.

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