July Week 1 - 2024

MUSIC RESET
Let The Lawsuits Begin: Record Companies vs. AI Music Platforms

In a groundbreaking move, the Recording Industry Association of America (RIAA), alongside major record labels, has filed lawsuits against AI startups Suno and Udio, alleging "mass copyright infringement." These companies, known for generating realistic songs from user prompts, are accused of illegally using vast amounts of copyrighted music to train their AI models.

The RIAA claims that Suno and Udio's AI technology poses a significant threat to the traditional music industry's business model. By creating high-quality soundalike tracks at virtually no cost, these AI platforms could potentially replace the need for licensing real recordings. This, according to the RIAA, could flood the market with imitative tracks, undermining the established sample licensing business and jeopardizing the livelihoods of countless musicians and songwriters.

Both Suno and Udio have remained tight-lipped about the exact datasets used for training their AI models, a common practice in the AI industry. However, the RIAA's lawsuits include examples where AI-generated songs closely mimic real songs, suggesting that copyrighted works were indeed used without permission. This has raised significant ethical and legal questions about the use of copyrighted material in AI training.

The crux of the legal battle revolves around the concept of "fair use." This legal doctrine allows for the use of copyrighted material under certain conditions, such as for transformative purposes. The RIAA argues that Suno and Udio's use of copyrighted music does not qualify as fair use, given the commercial nature and the extensive copying involved.

On the other hand, some legal experts believe that the AI startups have a strong fair use argument. They contend that the AI models extract non-copyrighted elements, much like how musicians learn from existing music. However, whether a judge or jury will agree with this interpretation remains uncertain.

As these lawsuits proceed, they could set significant precedents for the AI industry and its intersection with copyright law. The outcomes will likely influence how AI companies use copyrighted material in the future and shape the broader discourse on AI's role in creative industries.

For now, the music industry and AI startups alike are bracing for a lengthy legal journey that could redefine the boundaries of innovation and intellectual property.

CRYPTO RESET
Van Eck Files for Solana ETF: A Game-Changer for the Crypto Industry

Van Eck has recently filed for a Solana ETF, potentially setting the stage for significant developments in the cryptocurrency market. If approved, this ETF could not only validate Solana’s standing in the digital asset space but also bring substantial changes to the broader crypto industry.

Solana, often referred to as part of crypto’s “Big Three” alongside Bitcoin and Ethereum, is making strides toward joining its counterparts in securing a spot ETF. This move by Van Eck underscores the increasing recognition and legitimacy of Solana as a major player in the crypto market.

The potential impact of a Solana ETF is substantial. According to GSR's ETF possibility score, which ranks various cryptocurrencies based on decentralization and demand, Solana stands out. In a bear market, the approval of a Solana ETF could boost its market value by 1.4 times. In a bull market, the surge could be as high as 8.9 times, reflecting significant investor interest and confidence.

Crypto analyst Crypto Tony highlights that Solana’s price remains above the 200-day EMA, signaling a long-term bullish trend despite recent volatility. This resilience in price action, coupled with high trading activity and relative stability indicated by technical analysis, suggests that Solana is well-positioned for future growth.

Currently, only Bitcoin and Ethereum have spot ETFs due to the existence of federally-regulated futures markets for these assets. The approval of a Solana ETF would mark a pivotal moment, potentially paving the way for other digital assets to follow suit.

However, it's important to note that Solana isn't the only cryptocurrency with promising potential. Cardano (ADA) and Chainlink (LINK) are considered superior projects technically, even compared to Ethereum. These "sleeping giants" have been quietly building robust and well-designed platforms that could see astronomical growth if the trend of ETF approvals continues. The approval of a Solana ETF could set a precedent that benefits not just Solana but also these technologically advanced projects, driving significant interest and investment in ADA and LINK.

The regulatory landscape is also showing signs of potential change. Recent bipartisan measures in Congress and shifting political stances toward digital assets suggest that the path to spot digital asset ETFs may become more accessible. If political and regulatory conditions continue to evolve favorably, the approval of a Solana ETF could herald a new era of growth and acceptance for the cryptocurrency industry.

Van Eck’s filing for a Solana ETF is a significant development that could have far-reaching implications for the cryptocurrency market. As regulatory landscapes shift and investor interest grows, Solana’s position and the potential impact on the industry, alongside other promising projects like Cardano and Chainlink, are becoming increasingly apparent.

TECH RESET
FinalSpark Proposes Human Organoids as a Solution to AI's Power Consumption

The AI boom has brought about unprecedented energy demands, with training and operating advanced AI models consuming enormous amounts of electricity. OpenAI's GPT-4, for example, required around 10 megawatts to train, a stark contrast to the human brain's relatively minuscule power requirements. As we advance toward artificial general intelligence (AGI) and potentially artificial superintelligence (ASI), energy needs will skyrocket to gigawatts, posing a significant challenge.

Enter FinalSpark, a pioneering company in the nascent field of biological computing. They propose using human organoids to address the looming power consumption crisis in AI. Organoids are simplified, three-dimensional versions of brain cells, capable of mimicking human brain functions like learning and memory. These are derived from induced pluripotent stem cells (iPSCs) and can perform computations with significantly less power than traditional silicon-based systems.

FinalSpark has made notable strides in this domain, creating "neurospheres" – manufactured brain organoids connected to electrical devices for sending and receiving signals. Their Neuroplatform combines these neurospheres with traditional computing systems, offering a cloud-based service that allows researchers to run computations on 16 human brain organoids.

Despite its potential, FinalSpark's technology is still in its infancy. The Neuroplatform is currently only capable of very basic computations and requires traditional computing systems to interpret the signals from the biocomputer. Moreover, the lifespan of these neurospheres is around 100 days, necessitating frequent replacements.

While organoid intelligence (OI) is unlikely to solve the immediate power consumption issues of AI, it holds significant promise for understanding brain functions and neurological disorders. As the AI industry continues its exponential growth, OI offers a complementary path that may one day revolutionize computing efficiency.

In the short term, the answer to AI's energy needs lies in the co-location of data centers with clean energy sources. However, the long-term potential of biological computing as an energy-efficient alternative cannot be ignored, making it a field worth watching closely.

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.