I once worked at a blockchain company. It’s not worth going into the details, but it’s enough to say that it was exactly what you thought: The company was completely funded by the first “ICO” that had raised several million dollars, and its leaders had about a dozen plans for future products that would never even come close to achieving success.
I saw, up close, the realities of the blockchain world. There was a certain character in the industry-wide conflict, in the neurotic effort to extract as much money from the space as possible before the other shoe dropped and the awareness of the simple truth imposed: that the ecosystem of the basic technology that was supposed to provide the means of profit did not exist.
Most likely, it won’t be.
AI is now in a very similar place, where early optimism about the technology has begun to fade, leading to an increasingly pessimistic push to raise capital. We are now in the era of the AI white paper, technically and aesthetically indistinguishable from blockchain white papers that are always full of ancient gibberish.
Don’t you believe me? Well, look at this complete nonsense that arrived in my inbox a few days ago: ODC.space. Started by a company that appears to be a real combination of Atomic-6, the basic service of ODC is to rent time in orbital AI data centers, which, does not exist. Still, the site announces, “Orbital Data Centers Are Here. The wait is over. Orbit is ready for your computer. Specify a dedicated data center in space today—we handle the rest.”
Despite the “wait is over,” ODC.space’s orbital AI data centers are not yet available.
Credit: ODC.space
Oh ho, that thought service isn’t prepared enough, you say? Well, then, try them concierge level resources for thinking instead!
From self-confident statements of absolute nonsense to detailed levels of service found in a non-existent product, the sheer nature of bullshit is sickeningly familiar to me. This type of copy can be adapted verbatim from 2015 blockchain pitch decks; they ignore or skirt around fundamental issues in the same way, and make promises that even established companies cannot guarantee.
The method is the same. When the claims of doing things become too much to allow for new, successful entrants, and when existing claims create widespread skepticism due to a lack of progress, new startups turn to sellers. Make a claim that you’re going to provide basic infrastructure to an entire industry, and suddenly your company is profiting from that industry’s claims without committing to making those claims itself.
I recently had the good fortune to put together a Starcloud white paper with orbital heat rejection experts. Starcloud, without a doubt, has the most detailed white paper among the current orbital AI environments, and its published programs for managing heat in the atmosphere amount to defining the problem and saying that a new, unspecified technology will solve it.
Perhaps it is unfair to paint all AI with the natural friendliness of it location-based The AI. Unlike most blockchain applications, AI has a real function, so we can argue that its only serious problem is the cost of renewable energy needed to operate profitably. That doesn’t solve our problems today, but with new energy technologies emerging every year, it at least explains the relentless tenacity of AI investors.
They truly believe that if they don’t invest in businesses that are losing money today, they will be locked out of real profits tomorrow. I remember this thought well, from the heady days of the blockchain “downgrade”.
Take Allbirds’ recent “success” pivot to AI. After long-term financial problems and a $21 billion market price drop, the once-beloved shoe company of Silicon Valley made a surprising claim that it was about to become an AI computing company. Basically, it was going to change its business model from manufacturing shoes to having buildings full of GPUs.
Credit: Smith Collection/Gado/Getty Images
Just announcing this change, the company’s value rose to $148 million. Shouting the Bitcoin pivot that turned beverage maker Long Island Iced Tea into Long Blockchain Corp, Allbirds will now be NewBird AI. He is beautiful.
So, what made this change successful? Is the company developing a new self-transformation program? No, the information was almost non-existent. Did it showcase new technology or a project it had been developing behind closed doors to prove its capabilities in the space? No, it never tried to do what we’re going to do now, specifically.
No, the pivot was successful for the only reason anything is successful in this type of industry: It increased seed funding. Was it important for people to pitch only they had to do it because they were running the easiest company in the world? It is not, because the correct words are said in order.
Bloomberg likened it to the bursting of the dot-com bubble in the early 2000s, but more like the coin launch craze of the mid-2010s.
Will Allbirds ever use real hardware and deliver an AI computer? I don’t know. All I know is that if you’ve been through a time like this before, you’re experiencing a lot of déjà vu.
