Apple’s Darwin Award

Apple Plays Catch-Up

“Ahead of a big AI push for Apple this year,” the company finalized an “under-the-radar acquisition,” Bloomberg reports.

The buyout target? Canadian startup DarwinAI which has raised over $15 million in venture capital since 2107 and worked with companies including Intel and Lockheed Martin.

“One of its core technologies,” Bloomberg says, “is making artificial intelligence systems smaller and faster. That could be helpful to Apple, which is focused on running AI on devices rather than entirely in the cloud.”

More to the point: “[Apple] is adding features to its iOS 18 software that rely on generative AI, the technology behind ChatGPT and other groundbreaking tools.”

When questioned about its acquisition of DarwinAI, Apple was characteristically tight-lipped, saying only that it “buys smaller technology companies from time to time.”

According to CEO Tim Cook, between the years 2015–2021, Apple acquired more than 100 such companies. Here’s a timeline of some notable acquisitions throughout Apple’s history…

Source: Forex.com

But by 2022, Apple’s pace slowed to just two buyouts that year — including one company called AI Music.

But the pace ticked up considerably when Apple “bought no less than 32 AI startups in 2023 alone, more than any other major tech company,” says Cult of Mac website.

Bloomberg adds: “Despite having acquired more AI companies than most rivals over the past decade, Apple has fallen behind in the generative AI market.

“It was caught flat-footed by the launch of OpenAI’s ChatGPT in 2022, and tech peers like Google and Microsoft Corp. have stolen the spotlight with new features.”

This year? “Chief Executive Officer Tim Cook has promised that Apple will ‘break new ground’ in AI this year, and an announcement is expected as soon as the company’s Worldwide Developers Conference in June.”

If you’re new to the 5 Bullets you know we’ll devote a fair amount of time covering Apple’s June conference, so stay tuned.

In the meantime, AI expert and iconoclast investor James Altucher notes: “Capitalism means competition…

“Of course, Google has been developing its own AI model. It was all over the news the past few weeks. Amazon is building its AI model. Apple is too. Competition is the name of the game.”

James adds: “AI itself is a commodity. It's about what you do with the AI. The industry is going to be more and more niche,” he predicts, solving problems for sectors across the board — from defense to pharmaceuticals.

But all this AI competition hinges on one key component: “That means they're all looking for new chips,” says James. Something to think about…

[Hint: The way to profit from Apple’s future AI innovation is not buying AAPL stock.

Instead, James Altucher predicts a market-moving event on March 21 — something he calls the “Steve Jobs Moment” for AI.

And the time to invest is now, he says, before Wall Street dumps trillions of dollars into a few AI stocks.

View James’ briefing and you’ll get a sense of the immediacy of this fast-moving situation… as he unfolds the ins and outs of a $1 billion AI firm that could be the epicenter of a $15.7 trillion new Industrial Age.

Because if it can happen to one of the largest companies in the world, it can happen to you: Don’t be “caught flat-footed” when it comes to investing in AI.]

“What About Gold?”

“I’ve spilled a ton of ink this year following the semiconductor soap opera… What about gold?” says Paradigm’s trading pro Greg “Gunner” Guenthner.

“I want to highlight an old-school gold breakout.” Last week, gold breached $2,200 for the first time ever. “Words don’t do the chart justice,” Gunner says.

“Price speaks for itself,” he notes. “Gold finally extended higher following numerous failed attempts going all the way back to August 2020.

“This breakout looks like the real deal. In fact, I believe it could trigger a multiyear run like we experienced during the last commodity super cycle, illustrated by the sharp move higher into the 2011 blow-off top back toward the left side of the chart.

“Of course, there are multiple ways to play this breakout,” Gunner says. “Silver will probably be in play, as well as copper. And the beaten-down gold miners will also enjoy some time in the sun” — including the VanEck Gold Miners ETF (GDX).

“As market conditions inevitably change, those who are slow to adapt will miss the beginnings of these important rotations,” Gunner concludes. “Save yourself the trouble of chasing the FOMO rallies that are getting a little long in the tooth — and hop on some fresh breakouts instead.”

Turning to the market today, it’s a blood-red day for stocks. All three major U.S. stock indexes are flailing, but it’s the tech-heavy Nasdaq that’s taking it on the chin — down 1% to 15,960. Meanwhile, the S&P 500 is down 0.75% to 5,110 and the Big Board is down 0.50% to 38,725.

We’ve got a couple notable economic numbers to report:

• The Empire State Manufacturing Index from the New York Fed rings in at minus 20.9 this month, far worse than the minus 7.0 economists predicted and 18.5 points below February’s reading. In fact? It’s the worst reading since June 2020… when the country was still under strict pandemic lockdowns

• Industrial production in February was surprisingly up 0.1%, slightly more than the 0.0% anticipated. Manufacturing alone rose 0.8%. All told, 78.3% of America’s industrial capacity was in use during February — still dipping below the 50-year average of 79.7%.

As for the commodities complex, oil has been yo-yoing all day; it’s taking a breather at $81 for a barrel of West Texas crude. Gold is recovering slightly; the yellow metal sits at $2,161.60 per ounce. At the same time, silver is rocketing higher, up 2.4% to $25.35. Impressive.

Last, in sympathy with stocks today, crypto is pulling back. Bitcoin is down 1.70% to $68,180 while Ethereum is down 2% to $3,695.

Google’s Gaffe: Form Over Function

In 2022, Google got “the chance to rethink the very idea of an office,” according to the company’s VP of Real Estate and Workplace Services, David Radcliffe.

Think again, employees urge. That’s because Google’s new “Bay View” campus in Mountain View, California is a nod to the future… with one small catch.

The office complex has “been plagued for months by inoperable or, at best, spotty Wi-Fi,” according to unnamed whistleblowers. “A Google spokesperson confirmed the problems and said the company is working on fixing them,” says an Ars Technica article.

The architectural enigma might look like a cloth-covered tent, but the glass and steel structure is “held up by poles [with] high points on the four corners… The roof is covered in solar cells and collects rainwater while also letting in natural light, and Google calls it the ‘Gradient Canopy.’

“All those peaks and parabolic ceiling sections apparently aren't great for Wi-Fi propagation,” the article notes. “Googlers assigned to the building are making do with Ethernet cables, using phones as hotspots or working outside, where the Wi-Fi is stronger.”

One disgruntled employee grouses: “You’d think the world’s leading Internet company would have worked this out.”

Heh, rethinking can be overrated.

One last thing: Google employees were summoned from their WFH cocoons to return to the office as of June 7, 2023. The new hybrid work schedule stipulates at least three days per week in the office. Sucks if you work at the Bay View campus…

Elon Musk: Hero?

Yesterday, our managing editor Dave Gonigam asked an open-ended question: “What’s your opinion of Elon Musk?” And, boy, did readers deliver…

At last count, we had over 30 — largely positive — submissions in our mailbag. While we can’t get to all of them, we’ll feature several today.

“He fights for freedom of speech,” says one contributor. “Although he has his (alleged) drug issues, I think governments hate him because he's fighting for what's morally correct in this world of lies. And that’s why I love him.”

More positive feedback: “I read Elon Musk by Walter Isaacson. A good read. While Elon’s behavior is peculiar, he is very driven to do something to benefit mankind. I’m not convinced he is always right, but I’m impressed with Elon’s ability to cut out what appear to be redundant steps in production. He’s a lot like Steve Jobs: He questions everything.

“By the way, I’ve driven a Tesla Model 3 for over three years now, and I really enjoy it. FSD (full self-driving) is a misnomer at the moment; for me it removes a good bit of the stress of driving. I use it all the time. However, I’m not sure Tesla batteries are beneficial overall.”

“Musk would make a great secretary of commerce,” says a third contributor, “if he could put up with all those meetings and dimwits.”

Then there’s this paean…

“Singular, brave, irreverent, genius, loves humanity, but hates much of what we do,” a reader praises Musk.

“He clearly has a vision for the future and a willingness to sacrifice much to help ensure there is one.

“Has a disrespect for the establishment that I think is warranted.

“Has done so many amazing things, yet I doubt he is very happy.

“I would love to work for him for a year or two, just to observe and learn.”

On the other hand, a reader wonders about Elon Musk’s origin story…

Elon Musk: Villain?

“Elon Musk is a front man for the new technocracy,” a reader upbraids. .

“He seems to be following in the footsteps of his grandfather in the 1930s who tried to create a technocratic political movement. In this political model, people like Musk would make decisions for the rest of society.

“During World War II, Musk’s grandfather was forced to flee North America to South Africa as his political movement was considered to be too much like fascism.

“Not to mention that Musk’s companies receive massive tax breaks and have lots of government contracts. FYI, I live about 30 minutes from his new Austin factory.”

Emily: Around the time Musk bought Twitter in 2022, Dave weighed whether Musk would, in fact, be a free-speech savior.

No doubt, you’ll want to read Dave’s conclusion.

Enjoy the weekend! Take care…

Best regards,

Emily Clancy
Associate editor, Paradigm Pressroom's 5 Bullets