Bad banking & Good Robots

Good Morning, Powerful and Handsome Bro,

Today you are a man of action and so am I.
I am flying down to Las Vegas with some of my best friends for a bachelor party. There is no agenda, no real itinerary, and best of all…no reservations. (Shoutout Anthony Bourdain that P.O.S.) I'm excited for the upcoming chaos with March Madness, St. Patrick's Day, and the loose morals of this weekend. It's interesting how these themes align with the latest news in finance and AI, and we're all in for the ride. - Cheers to a great morning BRO.

In Today’s Morning 6 to 9:

• Silicon Valley Bank

• Chat GPT 4 Unveil

• Bro-Tastic Memes

SVB - What TF happened?

Silicon Valley Bank recently collapsed, becoming the largest U.S. bank to fail since the 2008 global financial crisis. The bank had over $100 billion in deposits, much of which came from tech startups and investors. However, the bank's collapse came after it invested billions of dollars into long-term U.S. Treasury bonds, which lost value when the Federal Reserve began aggressively raising interest rates in an effort to curb inflation. SVB was forced to sell some of these bonds at a steep loss, causing clients to worry about the bank's viability and withdraw their deposits. In just one day, clients attempted to withdraw $42 billion in deposits, leading to a bank run and the bank's eventual collapse.

The collapse of Silicon Valley Bank has sent shockwaves through the financial industry, especially among smaller and regional banks. The collapse has caused shares of all kinds of lenders to sag, and other banks are seen as potentially sharing some of the same risks as SVB saw their stock values plunge as well. Investors are now concerned that other lenders, particularly smaller and regional ones, could suffer a similar surge in withdrawals and struggle to meet the redemptions. Since the collapse, shares of JPMorgan have fallen over 7%, while shares of Wells Fargo and Bank of America were both down more than 15%.

Despite the collapse of Silicon Valley Bank, the broader banking sector is still expected to remain healthy, with the Federal Reserve making funding available to other institutions to shore up their cash reserves and prevent a catastrophic run on another bank. Federal officials have reassured customers that all deposits at Silicon Valley Bank will be backstopped, providing guarantees for customer deposits, even those that exceed the FDIC insurance limit of $250,000. The move effectively secures the $175 billion in customer deposits at SVB, though shareholders and some debtholders will not be protected, and senior management has been removed from their jobs. Despite turbulence in the short term, the banking industry is expected to remain strong in the long term, with measures in place to prevent a contagion from spreading to other banks.

ChatGPT 4

In case you’ve been living under a rock, the advent of singularity is upon us. This week OpenAI's release of Chat GPT-4 marks an exciting milestone in the ongoing development of artificial intelligence. For those that aren’t aware, Chat GPT is... In essence, a conversational robot capable of answering any question you can conceive, presenting both thrilling possibilities and potential challenges. Chat GPT-4 is much smarter than previous versions, in fact, it’s 500x smarter, has outperformed its predecessor in all standardized testing, and it’s only been 6 months since its release…no need to be alarmed though 😅

Key Updates for GPT-4:

• Multimodal: GPT-4 can understand images in addition to text, and can process them to find relevant information. (You can send it a picture of an idea and it can literally create it)

• Harder to trick: GPT-4 has been trained on malicious prompts, making it better than its predecessors on "factuality, steerability, and refusing to go outside of guardrails."

• Longer memory: GPT-4 can keep up to 50 pages or so in mind, compared to the previous limit of around four to five pages. It can also produce

• More multilingual: GPT-4 can answer thousands of multiple-choice questions with high accuracy across 26 languages. (such as Spanish, Italian, German, and Greek)

• Different "personalities": GPT-4 integrates steerability more natively than GPT-3.5, allowing users to change the classic ChatGPT personality to something more suited to their needs.

Companies currently partnering up with OpenAI’s Chat GPT-4:

Duolingo has integrated GPT-4, OpenAI's latest and most advanced language model, to elevate language learning by introducing two new features, Explain My Answer and Roleplay, for its new subscriber tier, Duolingo Max, that will help learners chat with an AI tutor for a more personalized and constructive feedback experience as well as to practice chatting in the language they are learning with someone, to maximize their learning experience and resemble real-world scenarios.

Be My Eyes, a Danish startup that connects people who are blind or have low vision with volunteers for help with daily tasks, is developing a GPT-4 powered Virtual Volunteer within the Be My Eyes app that can generate the same level of context and understanding as a human volunteer and enable users to have greater independence in their lives; the company has seen unparalleled performance to any image-to-text object recognition tool out there and will be in the hands of users in weeks.

Khan Academy is a non-profit with a mission to provide a free, world-class education for anyone, anywhere. The organization offers thousands of lessons in math, science and the humanities for students of all ages. This week, it is launching Khanmigo, an AI-powered virtual tutor and classroom assistant using GPT-4 to help individualize learning for students and provide teachers with personalized insights and instructional materials.

Bro-Tastic Memes