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4 days ago
- Business
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The ‘white-collar bloodbath' is all part of the AI hype machine
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. If the CEO of a soda company declared that soda-making technology is getting so good it's going to ruin the global economy, you'd be forgiven for thinking that person is either lying or fully detached from reality. Yet when tech CEOs do the same thing, people tend to perk up. ICYMI: The 42-year-old billionaire Dario Amodei, who runs the AI firm Anthropic, told Axios this week that the technology he and other companies are building could wipe out half of all entry-level office jobs … sometime soon. Maybe in the next couple of years, he said. He reiterated that claim in an interview with CNN's Anderson Cooper on Thursday. 'AI is starting to get better than humans at almost all intellectual tasks, and we're going to collectively, as a society, grapple with it,' Amodei told Cooper. 'AI is going to get better at what everyone does, including what I do, including what other CEOs do.' To be clear, Amodei didn't cite any research or evidence for that 50% estimate. And that was just one of many of the wild claims he made that are increasingly part of a Silicon Valley script: AI will fix everything, but first it has to ruin everything. Why? Just trust us. In this as-yet fictional world, 'cancer is cured, the economy grows at 10% a year, the budget is balanced — and 20% of people don't have jobs,' Amodei told Axios, repeating one of the industry's favorite unfalsifiable claims about a disease-free utopia on the horizon, courtesy of AI. But how will the US economy, in particular, grow so robustly when the jobless masses can't afford to buy anything? Amodei didn't say. (As an aside: I asked labor economist Aaron Sojourner about this scenario of high unemployment plus strong economic growth, and he said there is a theory of the case, if you squint really hard. Amodei may believe that AI can increase productivity and make each hour of labor create more goods and services. But if that's the case, he's imagining 'a 30% jump in labor productivity to get that combination of unemployment and GDP growth,' said Sojourner, a senior researcher at the W. E. Upjohn Institute for Employment Research. 'That is a wildly unprecedented vision,' he added, noting that in the 1980s and 90s, computer adoption gave the world all kinds of tools that reshaped the labor market. But labor productivity grew just 2% to 3%.) Anyway. The point is, Amodei is a salesman, and it's in his interest to make his product appear inevitable and so powerful it's scary. Axios framed Amodei's economic prediction as a 'white-collar bloodbath.' Even some AI optimists were put off by Amodei's stark characterization. 'Someone needs to remind the CEO that at one point there were more than (2 million) secretaries. There were also separate employees to do in office dictation, wrote tech entrepreneur Mark Cuban on Bluesky. 'They were the original white collar displacements. New companies with new jobs will come from AI and increase TOTAL employment.' Little of what Amodei told Axios was new, but it was calibrated to sound just outrageous enough to draw attention to Anthropic's work, days after it released a major model update to its Claude chatbot, one of the top rivals to OpenAI's ChatGPT. Amodei stands to profit off the very technology he claims will gut the labor market. But here he is, telling everyone the truth and sounding the alarm! He's trying to warn us, he's one of the good ones! Yeaaahhh. So, this is kind of Anthropic's whole ~thing.~ It refers to itself primarily as an 'AI safety and research' company. They are the AI guys who see the potential harms of AI clearly — not through the rose-colored glasses worn by the techno-utopian simps over at OpenAI. (In fact, Anthropic's founders, including Amodei, left OpenAI over ideological differences.) Look, I want to live a cancer-free utopia where I only have to work a few hours a week and there's no poverty and stuff just works. But do I believe that generative AI is the key to unlocking that fantasyland? I do not. And no tech pioneers have proven their case. Generative AI from large language models like ChatGPT and Claude are really good at some very specific stuff: They can summarize documents, write dumb emails, help kids cheat on their homework, and even recommend summer reading lists so obscure not even the authors knew they'd written them. Heck, they could probably generate this newsletter and mimic my voice. But they hit their limits fast. They hallucinate. They get basic facts wrong. They are susceptible manipulation. (And those are all things we human beings can do just fine on our own.) If AI companies can take these handy, quasi-reliable text predictors and turn them into an economic revolution, fine. But that seems so far off in the future that Amodei's warnings feel more like an ad than a PSA. It's on them to show their work: Show us how AI could be so destructive and how Anthropic can fix it — rather than just shouting about the risks. . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 days ago
- Business
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Last year, Trump promised bitcoin bros a seat at the table. For better or worse, he wasn't lying
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. Last July, Donald Trump made a campaign stop that served as his crypto coming out party. Trump, a guy who has an aide follow him around with a portable printer so he can read the internet, got onstage at the Bitcoin Conference in Nashville and promised the moon to a crowd of extremely online crypto-Libertarians. 'Oh, you're going to be very happy with me,' he said, before vowing to make America the 'crypto capital of the planet.' With the zeal of the converted, he rattled off crypto shibboleths, promising to 'fire' Securities and Exchange Commission Chair Gary Gensler (the Biden-era bogeyman the industry loved to blame for its problems), to create a 'strategic national bitcoin stockpile' and even pardon Ross Ulbricht — the creator of the Silk Road digital marketplace used primarily for selling drugs on the dark web, who was serving a life sentence. Since retaking office, Trump has kept all of those promises (technically — Gensler stepped down before Trump could fire him). And he's gone even further. 'Maybe the most important thing that we did for this community, we reject regulators and we fired Gary Gensler, and we're gonna fire everybody like him,' said Vice President JD Vance at a crypto conference on Wednesday. It's hard to overstate how much the president has changed his tune on crypto, which he criticized in his first term as 'highly volatile and based on thin air.' Now, Trump's personal wealth is estimated to include $2.9 billion tied to his digital asset projects — representing some 37% of his total fortune, according to an April report from the left-leaning State Democracy Defenders Fund. Bitcoin, a bellwether for crypto, has shot up 67% since Trump spoke in Nashville last year. This week, Trump deepened his financial ties to the alternative financial industry that his administration is tasked with regulating. His two oldest sons and Vance took his spot headlining this year's Bitcoin Conference in Las Vegas, where they reassured supporters that Team Trump is, in Don Jr.'s words, 'seriously long crypto.' On Tuesday, Trump's media company said it would raise $2.5 billion to buy bitcoin — a move that mimics a corporate cash-management strategy popularized by MicroStrategy (now known as Strategy) and Tesla. Two things to know about what's going on here. First: Trump Media & Technology Group (TMTG), which owns the president's social media platform, Truth Social, is not a company in a traditional sense of, like, a business that makes money. It is a perpetually unprofitable entity that generates almost no revenue, but public interest in Trump keeps the company's stock market value elevated — much like a meme stock. By becoming more of a bitcoin holding company, TMTG offers traditional investors exposure to bitcoin's gains (and losses) without the hassle of actually buying bitcoin and managing it in a digital wallet themselves. 'Holding bitcoin on a balance sheet is part financial strategy, part cultural signaling,' said Temujin Louie, CEO of blockchain platform Wanchain. 'TMTG's move is more politically charged. Given its ties to President Trump, any decision must inevitably align with the current administration's rhetoric and embrace of cryptocurrencies as a populist tool.' Second: The bitcoin play adds another halo of legitimacy around an asset that investors are still afraid of. The appearance of credibility has long eluded crypto because, well, it's just so useful for doing crimes, and its advocates haven't done a great job articulating mainstream use cases for digital money that you can't actually buy much with. But having an evangelist in the West Wing seems to be changing that. Bitcoin hit an all-time high of over $111,000 last week, fueled in part by the advancement of legislations that would create the first federal rules around stablecoins, a subcategory of crypto, a key step the industry has been lobbying for. 'I'm here today to say loud and clear with President Trump, crypto finally has a champion and an ally in the White House,' Vance said Wednesday at the Bitcoin Conference. He also implored crypto fans to carry last year's voting momentum forward for the 2026 midterms, and boasted that he personally still holds 'a fair amount of bitcoin today.' Lawyers and ethics experts aren't mincing words when they say Trump's crypto ventures open the door to all kinds of potential corruption. 'The only reason this isn't a crime is because the criminal conflict-of-interest statute does not apply to the president or the vice president,' Richard Painter, a former White House ethics lawyer for President George W. Bush, told CNN. 'The president and his family are investing in crypto — riding a bubble that may someday burst. The systemic impact on the economy could trigger another financial crisis.' The White House has repeatedly said the president has no conflicts of interest, and lashed out at the media for even asking. Press secretary Karoline Leavitt recently said it was 'frankly ridiculous that anyone in this room would even suggest that President Trump is doing anything for his own benefit.' CNN's Matt Egan contributed reporting. Sign in to access your portfolio
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6 days ago
- Business
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Elon Musk is retreating from politics just as his corporate empire stumbles
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. Elon Musk says he is back to 'spending 24/7 at work' and sleeping in conference rooms — seemingly diving head-first back into corporate life after five months of oligarch larping in Washington. That kind of performative overwork often comes across these days as eye-roll-worthy — another tech entrepreneur peacocking their devotion to The Grind. Musk is a longtime pusher of such 'extremely hardcore' work cultures. But given the scale and severity of the problems hitting Musk's business empire all at once, an all-out effort may be appropriate. Tesla sales are tanking. The Cybertruck is shaping up to be a flop for the ages. The social media site X needs 'major operational improvements,' according to Musk, after a widespread outage over the weekend, which came less than two weeks after xAI's Grok briefly morphed into a conspiracy theorist that wouldn't shut up about 'White genocide.' The last two SpaceX launches ended with the multibillion-dollar spacecraft blowing up in midair. (The latest launch is happening Tuesday night, around Nightcap's publish time, so check here for the latest.) Investors appear relieved that Musk is refocusing on his day job(s). Shares of Tesla — the only publicly traded Musk-owned enterprise — have shot up 25% in the past month (though they are still in a hole relative to their December peak). That optimism is conditioned on Musk actually fixing the problems (many of them self-inflicted) plaguing the EV maker while also delivering on his promise to launch an autonomous robotaxi service in Austin, Texas, in the coming weeks. It'd be a tall order for any CEO. It is a gargantuan ask for someone running multiple flailing companies at the same time. A month ago, Tesla reported a 70% drop in earnings for the first quarter. That (along with a report in the Wall Street Journal that said Tesla's board had gone shopping for a new CEO) seemed to be a wakeup call for the billionaire, whose foray into far-right politics turned out to be disastrous for the electric vehicle brand. Data released Tuesday showed Tesla's European sales fell by about 50% — the fourth month in a row of declining year-over-year sales for the company. There are two primary reasons why: Europeans are rejecting Musk's personal politics, and choosing to buy much-cheaper EVs from Chinese carmakers such as BYD. (ICYMI: BYD is the brand Musk once scoffed at and is now eating Tesla's lunch on the global stage.) It remains to be seen how Musk will deal with the Cybertruck, his pet project that's become a 7,000-pound albatross for Tesla, plagued by repeated recalls (including one for a piece of trim that was literally falling off the vehicle) and weak sales. Two years ago, Musk said with a straight face that he expected to add 250,000 Cybertrucks a year to American roads. Tesla sold 40,000 of them last year. In the first quarter of this year, it sold only 6,400, according to Cox Automotive. If sales don't pick up, Tesla is on track to notch only about one-tenth of its annual goal. The Cybertrucks are losing value fast. Tesla only recently started allowing trade-ins, and two customers told Business Insider that their trade-in estimates amounted to roughly 37% depreciation after just a year. On top of all that, Musk — who has a history of overpromising and missing deadlines by years — plans to launch Tesla's driverless ride-hailing service next month in Austin. But already, questions are swirling about Tesla's ability to pull that off. According to Fortune, 'key groups — including Austin's transportation department, Austin's emergency first responders, and federal regulators — are still missing important information about the self-driving machines.' The stakes are high. Tech analyst Dan Ives, who has been uncharacteristically critical of Musk's political involvement and its damage to the Tesla brand, said in a note last week that 'the vast majority' of Tesla's valuation upside is centered on the success of its 'autonomous vision taking hold.' The Austin event is the 'beginning of this next era of growth for Musk and Tesla.' CNN's Anna Cooban contributed reporting.
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22-05-2025
- Business
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At Trump's memecoin dinner, the guests — who paid for the invite — can count on anonymity
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. Critics of the president's decision to auction off a private dinner via his Trump-branded crypto token were worried about the stunt for a few reasons. At the top of the list: the potential for foreigners to buy access to the sitting president, something the US Constitution explicitly prohibits. Those concerns, it seems, were well founded. The vast majority of the top holders of Trump's memecoin appear to be based overseas, including the top investor — a Chinese-born crypto mogul who, until recently, was facing civil fraud charges in the United States. Billed by organizers as the 'most EXCLUSIVE INVITATION in the world,' Thursday's gala is set to take place at the president's private Trump National Golf Club, just outside of Washington, DC, according to an email sent to guests and reviewed by Fortune. The guests are expected to include President Donald Trump himself and 220 of the top $TRUMP buyers, who collectively dumped an estimated $148 million over three weeks into the memecoin — a type of crypto product that is functionally useless as a currency or investment vehicle, and one that serious investors avoid because of their tendency to collapse in value. The top 25 $TRUMP coin holders are eligible for a private White House tour the following day — the kind of access typically reserved for heads of state. And because crypto is anonymous by design, the identities of the top investors — who appeared on a public leaderboard with nothing but self-selected three- or four-letter usernames and long, cryptographic digital wallet addresses — aren't easy to pin down. But an analysis by Bloomberg News found that all but six of the top 25 holders of the $TRUMP memecoin used foreign exchanges that are ostensibly off-limits to anyone living in the US. More than half of the top 220 holders used similar offshore exchanges, Bloomberg found. Thursday's 'ultra-exclusive private VIP reception' is just the latest instance of the Trump administration flouting ethical boundaries between the office and the president's personal profit-seeking. His apparent contempt for such boundaries has angered commentators across the political spectrum. Sen. Chris Murphy, a Connecticut Democrat who introduced legislation to ban officials from selling memecoins, said in a hearing this week that the gala 'represents a real problem' because there is 'clearly a way around the State Department for foreign individuals of significant influence and wealth to be able to directly lobby the president.' And even Republican crypto advocate Sen. Cynthia Lummis of Wyoming said the event gives her 'pause.' The progressive advocacy group Public Citizen is organizing a protest outside the Potomac Falls, Virginia, golf course on Thursday, and is calling on the Department of Justice and other officials to hold Trump accountable. 'He'd help himself by calling off his Thursday gala,' the Wall Street Journal's conservative editorial page wrote Tuesday. 'If he won't do that, he could at least disclose his crypto contest's winners so Americans know who may be trying to buy access to the President.' That, too, seems unlikely. When CNN asked the White House whether a gala guest list would be released, a spokesperson replied with a statement saying: 'President Trump only acts in the best interests of the American public — which is why they overwhelmingly re-elected him to this office, despite years of lies and false accusations against him and his businesses from the fake news media.' Organizers of the auction didn't respond to CNN's request for comment. One publicly known guest is Justin Sun, the Chinese-born crypto entrepreneur, who wasn't exactly hiding his status. Observers were pretty sure the billionaire was leading the pack when the auction's public leaderboard displayed the username SUN topping the ranks. Sun later confirmed on social media Tuesday that he was 'honored' to support Trump and excited to attend the gala 'as his TOP fan!' Trump's reelection and his newfound enthusiasm for crypto came at a fortunate time for Sun, the 34-year-old founder of blockchain company Tron. In 2023, US regulators charged Sun and his company with selling unregistered securities and fraudulently manipulating the price of the digital token Tronix. Sun, a citizen of St. Kitts and Nevis, became the first prominent investor to back the Trump family crypto project, World Liberty Financial, which launched in the fall of 2024. Sun eventually poured at least $75 million into the World Liberty token (which is separate from the $TRUMP token), and he's amassed more than $22 million worth of President Trump's memecoin, based on Wednesday's prices. All told, Sun's actions, including the buying they sparked from other crypto enthusiasts, have generated an estimated $400 million windfall for the Trump family, according to Forbes. Then, about a month into Trump's second term, the Securities and Exchange Commission did a 180 on virtually all of its crypto enforcement actions, including the civil fraud charges it had filed against Sun and his company. In February, SEC lawyers asked a federal judge to put the agency's civil fraud case on hold, citing 'the public's interest.' Sun is a polarizing figure, even within crypto. He's known as a showman, having previously spent $4.6 million on a dinner with Warren Buffett (which Sun canceled and rescheduled) and $28 million to join Jeff Bezos aboard Blue Origin's first crewed mission (though Sun had to drop out). Sun, who told Forbes his net worth from his expansive crypto empire is over $40 billion, made headlines last year when he bought a $6.2 million conceptual artwork of a banana duct-taped to a wall. He promptly ate the banana.
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20-05-2025
- Business
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As a major crypto bill advances, skeptics see ‘a slow moving car crash'
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. There is a 'first of its kind' crypto bill making progress through the Senate that you're going to be tempted to snooze on because a) it's about 'stablecoins,' which is a subcategory of crypto – a parallel financial system almost no one understands, and b) opponents are focusing their criticism on corruption, which may be accurate but perhaps you're tired of reading all the news about the Trump family's alleged use of the power of the presidency to make a profit? (ICYMI: see here, here, here and here.) But there's a big planting-seeds-for-the-next-financial-crisis kind of reason why you should understand what this bill is. So let's get into it. The crypto industry-backed bill is called GENIUS, or 'Guiding and Establishing National Innovation for US Stablecoins.' Stablecoins are a digital asset designed to maintain a 1-to-1 peg with the dollar (or other traditional, 'stable' currency). One stablecoin should always equal one dollar, forever and ever. They are essentially a way for crypto investors to keep their cash in the crypto universe, where tokens like bitcoin and ether and solana tend to swing wildly in value. They aren't nearly as well known as bitcoin, the biggest crypto by market value. But in terms of trading volume, stablecoins are by far the biggest players. The crypto industry wants the Genius bill because it would lay down, for the first time in the industry's 16-year history, rules of the road for a key sector of their business. Which, of course, encourages greater adoption of crypto and thus makes them more money. The bill would require stablecoins to, among other things, hold reserves of safe, liquid assets like US dollars and Treasury bills, and publicly disclose those holdings monthly. It would also place some light restrictions on publicly traded companies that want to issue their own stablecoins (more on that in a moment). But 'the bill is light on consumer safeguards and limitations to corporations' ability to issue their own stablecoins,' said Eswar Prasad, a Cornell University professor of international trade and the author of the 2021 book 'The Future of Money.' 'Moreover, the Trump administration's boosterism of crypto and light-touch approach to regulation suggests that any such safeguards and limitations will not be enforced with much force,' Prasad added. Well. There's the potential for corruption, as Democratic Sen. Elizabeth Warren and other critics have been shouting from the rafters. In fact, Democrats initially refused to vote for the bill in part because of Trump's out-in-the-open crypto schemes, such as the private dinner taking place this week among the biggest holders of his $TRUMP memecoin, a kind of token whose only purpose is to attract money for its issuer. The White House has repeatedly pushed back on any questions about the president's potential ethical conflicts, from his interest in accepting a luxury jet from Qatar to his family's crypto holdings. ('This White House holds ourselves to the highest of ethical standards,' press secretary Karoline Leavitt said earlier this month.) Not much has changed in the bill between then and now. But some Democrats dropped their opposition anyway, likely because they're just accepting the 'apparent inevitability of blockchain-based finance and of crypto more generally,' Prasad said. One of those Democrats was Sen. Mark Warner of Virginia who defended his reversal on the bill Monday. 'Many senators, myself included, have very real concerns about the Trump family's use of crypto technologies to evade oversight, hide shady financial dealings, and personally profit at the expense of everyday Americans,' Warner said in a statement. 'But we cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay. If American lawmakers don't shape it, others will – and not in ways that serve our interests or democratic values.' The Trump family owns a crypto platform called World Liberty Financial, which issues a stablecoin called USD1. A few weeks ago, an Abu Dhabi investment firm called MGX chose USD1 to finance a $2 billion investment in crypto exchange Binance (see related crimes). That is 'essentially giving Trump a cut of this enormous financial deal,' Warren said Monday in prepared remarks. So, yeah, it sure looks like once again Trump could get richer off an industry he directly oversees through a regulatory apparatus he is rapidly working to defang. Meanwhile, the crypto industry has plowed millions of dollars into industry Super PACs that gave heavily to both Republican and Democratic campaigns last year. No, there's more! A lot of the focus on corruption is merited, said Hilary Allen, a law professor at American University who has been studying stablecoin policy, in an interview Tuesday. But that's not what's keeping her up at night. She referred to the GENIUS bill as 'a car crash in slow motion.' 'The thing that makes me lose the most sleep is that this bill would allow the largest tech platforms to essentially become the functional equivalent of banks,' said Allen, who was part of the commission appointed by Congress to study the causes of the 2008 financial crisis. 'The last crisis was caused by 'too big to fail' financial institutions. The size of some of these tech platforms makes that look quaint.' Let's step back for a moment. The bill provides almost no resistance for a tech giant like Meta or Amazon or Google to issue its own stablecoin. (In short, companies would have to get approval from a regulatory triad representing the Treasury, the FDIC and the Federal Reserve. As Prasad notes, that isn't much of a hurdle under Trump's broadly pro-crypto administration.) Meta already tried to get in on the crypto biz back in 2019 with a project called Libra (later renamed Diem), but abandoned it in 2022 in response to opposition from lawmakers and regulators. Now, according to a report in Fortune this month, Meta is once again testing the stablecoin waters, discussing various ways to introduce stablecoins as a means to manage in-app transactions. The benefits for Meta (or whomever) are clear: Stablecoin transactions keep users in the app, and the company then gathers all kinds of valuable information about its users and how they spend their money. But what happens when there's a run on stablecoins, or some other financial shock that causes those financial businesses to fail? Proponents say there's no reason to think there'll be a run on stablecoins if they've got 100% cash reserves backing them. Of course, that thinking is premised on a 'ridiculously optimistic assumption' that there will never be a run on a stablecoins, Allen says. She notes that money-market mutual funds are 'almost identical in structure,' and are not immune from the kind of panic that causes bank runs. 'Money-market mutual funds experienced runs that required bailouts in 2008 and again in 2020, so 'I think runs on stablecoins are likely.' In fact, she notes, the government has already had to bail out a stablecoin when Silicon Valley Bank failed in 2023. The lender has more than $3 billion worth of a stablecoin called USDC among its vast uninsured deposits. 'We may be setting ourselves up to essentially have to bail out these large tech platforms,' Allen says. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
