Good afternoon!
Welcome to the 32nd edition of the Quantumics Weekly Roundup. In this edition, weāll take a deep dive into the collapse of Silicon Valley Bank, and explore what happened in the run-up to the collapse of Silicon Valleyās largest bank by deposits.
Also in this edition - GPT-4 as early as next week? Read on for details on GPT 4, which could be arriving as early as next week with the addition of new video features.
And as usual, weāll explore the latest news and information in data and AI, business and tech.
Letās go! š
š¦ The collapse of SVB
Big news out of California: Silicon Valley Bank (SVB) shut down on Friday, causing a stir in the tech start-up and venture capitalist community. The sudden collapse over the course of two days roiled the market by Saturday.
SVB was the 16th largest bank in the US and the largest by deposits in Silicon Valley, but a crucial one for the startup community. It was closed down by regulators on Friday after a bank run dealt it a lethal blow following attempts to recover deposit losses and the sale of treasury bonds and securities.
"SVB was obviously the beacon of the start-up venture community for four decades. Almost, you know, one of those institutions that everyone viewed as too big and too strong to fail," said Samir Kaji, a former banker who spent more than 20 years in the industry.
SVB was hit hard by funding drying up over the past year in the tech and startup sector as well as the Federal Reserve's plan to aggressively increase interest rates to combat inflation. The bank was backed by billions of dollars worth of bonds, but in having to sell them at a time when interest rates were high, they sold them at a significant loss.
SVBās customers were largely startups and other tech-centric companies that started becoming needier for cash over the past year. When SVB had the announcement of the capital reshuffling on Wednesday, it incited more panic than it did to reassure. "There were torrents of emails, voicemails, calls, Slacks, text messages, where all of the VCs were imploring their companies to move capital out of SVB, which created that $42 billion leaving the bank," explained Kaji.
SVB is expected to re-open on Monday with the FDIC in charge. It said all insured depositors would have full access to insured deposits no later than Monday morning. While there are no guarantees, it is very likely that the FDIC will resolve the situation. The people who invested directly in SVB are going to get wiped out, but depositors have reasons to be hopeful.
In contrast to Washington Mutualās demise in 2008, SVBās failure is expected to result only in pockets of instability, mostly due to its nature as a "boutique" bank and specific portfolio favoured by US tech startups and venture capital, servicing nearly half of the market. US and international regulators have introduced more stringent rules since the last financial crisis, aimed at ensuring that one bankās failure would not trigger a cascade event, harming the broader economic system.
The Bank of London is said to be weighing up a rescue for the UK arm of SVB:
š¤ GPT-4, already?
OpenAI's GPT-series language models have taken the world by storm, with the latest version, GPT-3.5, powering a range of chatbots. However, a more powerful successor, GPT-4, is apparently set to arrive soon, with Microsoft Germany's CTO, Andreas Braun, stating that it will boast multimodal capabilities, including the ability to turn text into video. The new model will be showcased at a special event on 16 March, where Microsoft will demonstrate the "future of AI," including its use in productivity apps such as Teams, Word, and Outlook.
Although details of GPT-4 are currently scarce, it is likely to be similar to the text-to-video generators created by rivals Meta and Google. Such systems are capable of creating short videos based on rough text descriptions of a scene, as well as increasing the resolution of the clips using other AI models to make them clearer. However, the videos created by these systems tend to look artificial, with blurred subjects and distorted animation, and they lack sound.
It is unclear what sort of parameters GPT-4 will have, but it is expected to have more than GPT-3's 175 billion. In January, OpenAI CEO Sam Altman reportedly demoed GPT-4 to members of Congress to ease their concerns over the dangers of AI, including the tech's ability to mimic human writers and create convincing images of fake events. Altman reportedly showed how the new system will have greater security controls than previous models.
OpenAI's GPT-series language models are algorithms that can recognise, summarise, and generate text based on knowledge gained from large datasets, including information scraped from websites such as Wikipedia. The largest model in GPT 3.5 has 175 billion parameters, while Meta's own language model, recently released to researchers, has a maximum of 65 billion parameters. OpenAI's Dall-E tool can create images from natural language descriptions.
News Bites š°
Scientists create mice with two fathers after making eggs from male cells.
Spotifyās new design is part TikTok, part Instagram, and part YouTube.
Florida startup moves (slightly) closer to building data centers on the moon!
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Thatās everything for now, catch you next weekā¦
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