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Matt Davis — Need2Know Chedditor

Table of Contents

What’s the Stock Market Up To, Eh?

$SPX ( ▼ 0.18% )   $DJI ( ▼ 0.85% )   $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$GOOGL ( ▼ 1.29% )   $ANTHZZX ( ▼ 0.21% )   $OPEAZZX ( ▲ 0.14% )   $LUV ( ▼ 3.79% )   $JBLU ( ▼ 2.67% )  

DeepMind CEO Steps Down to Become Chair

How do you tell the world you’re tired of day-to-day management without sounding like you’re just eager for an extended holiday? Simple. You announce you're stepping down as CEO of Google DeepMind to focus on the "big picture" and "actively shaping the future of Artificial General Intelligance (AGI)."

Sir Demis Hassabis (pictured above) has gracefully executed the ultimate corporate pivot: Moving from CEO to chair of DeepMind, while simultaneously picking up the title of Chief Scientist at parent company Alphabet. Google’s stock $GOOGL ( ▼ 1.29% )  promptly fell 5% on the announcement, proving that investors prefer their AI prodigies chained to their desks rather than contemplating the infinite.

But Hassabis is thinking about humanity. As he told his staff, "We have arrived at a pivotal moment in human history... I feel it is close at hand." To ensure advanced AI doesn't go awry, he’s shifting to the role of "AI statesman." Biographer Sebastian Mallaby noted to the Financial Times, "DeepMind’s mission has always been to solve AGI... The solving AGI piece is pretty much done. So it makes sense that Demis is shifting his energy from the science to the social impact."

Or, does it? His departure is likely due to delays in releasing flagship model updates alongside competitive pressures from rivals like OpenAI $OPEAZZX ( ▲ 0.14% ) and Anthropic $ANTHZZX ( ▼ 0.21% ) .

Now that the hard part of inventing human-obsoleting intelligence is "pretty much done," Demis gets to be the adult in the room. Hassabis warned, "It’s critical that we collectively get the next steps right." Translation: Good luck.

Quote of the Day

Silicon Valley’s Richest Escape to New Zealand

With a billionaires’ tax looming on the November ballot, California’s ultra-wealthy have found the ultimate new status symbol: A New Zealand “golden visa.” For a minimum investment of NZ$5 million, which I assume is about $3 in winning American money, wealthy foreigners are snapping up the right to live, work, and study in New Zealand indefinitely. As venture capitalist Lachlan Nixon noted to the Financial Times, “It is becoming a badge of honor in Silicon Valley.”

I guess the rest of us can cross New Zealand off a list of places we ever want to see, now, too. Just watch the Lord of the Rings movies and call it good, yeah?

On the ground in the gorgeous mountain town of Queenstown, locals refer to these elusive tech titans as “sleepers in the hills.” Property agent Jo Eddington observed, “There’s a lot of billionaires here. They just wear gumboots.” 

Of course, some locals are skeptical of this billionaire invasion. Sam Stubbs, managing director of pension fund Simplicity, dryly points out, “Paradise has a price, the same price the rest of us pay.” On the other hand, Rocket Lab founder Sir Peter Beck thinks the country is practically giving itself away, arguing that “the country is underselling itself” with its NZ$5 million threshold. Again, I assume that’s about $3 in winning American money. (It’s $3 million USD, Matt. Try looking up the occasional fact —Ed.)

But the true comedy comes from the visa holders themselves, who are already complaining about local regulations and tax rules. Santa Barbara VC Courtney Andelman admits that “there’s something magic in the air” in New Zealand, but she’s already warned the Prime Minister that she might take her capital elsewhere if New Zealand tries to tax her global earnings. “If New Zealand doesn’t provide the best value then we’ll go somewhere else,” she threatened. “Every one of those dollars is mobile.”

Good job, New Zealand. You wanted their capital, but you also got their personalities and quite honestly, you can keep ‘em. Really.

Airlines Push Back on ICE Enforcement

If you thought navigating TSA, paying extra to check a carry-on, and surviving a middle seat to Orlando was the peak of airport drama, think again. The Department of Homeland Security has introduced a spicy new layer to your travel experience: Federal immigration agents patrolling jet bridges.

Last month, a tense scene unfolded in Dallas when an Immigration and Customs Enforcement (ICE) agent stood near a Southwest $LUV ( ▼ 3.79% ) gate, calling out the name "David" to find a target boarding an Orlando-bound flight. But the airline gate agent, playing the role of protective corporate bouncer, refused to let the agent board the plane without a judicial warrant signed by a judge.

It turns out airlines are pushing back against being drafted as unpaid border patrol agents. In Las Vegas, a woman was arrested waiting for a JetBlue $JBLU ( ▼ 2.67% ) flight; in Denver, another was nabbed on a jet bridge. Unsurprisingly, airline staff are not thrilled about their workplaces becoming action movie sets. Sara Nelson, international president of the Association of Flight Attendants, wrote that these operations “have raised glaring workplace, safety, and legal concerns for flight attendants,” especially with agents gaining unauthorized jet bridge access.

Meanwhile, airport executives are sweating. Phil Washington, former CEO of Denver International Airport, admitted, “I’m worried about escalation — I’m worried about bystanders.” JetBlue has also denied being cooperative: “The airline has no program or partnership in place to identify or report customers based on immigration status to government agencies.”

Yet, DHS spokeswoman Lauren Bis insists they are “simply enforcing our nation’s laws and established policy.” Sure, but maybe we could do it without shouting first names at the gate like a barista who can't read a Starbucks cup?

Song of the Day: Barry Can’t Swim, ‘Dance Dance Dance’

Here’s a euphoric, sample-heavy embrace of 1970s and ‘90s French house. Critics have praised the track, produced by Edinburgh-born Joshua Mainnie, as a flamboyant, colorful evolution that trades the deeper emotional tones of earlier work for pure ebullient energy. So, it’s a lot like this newsletter.

Biggest Law Firms Explore Private Equity Stakes

Private equity has already swallowed medical practices, accountancy firms, and potentially a bit of FIFA, for a minute there. Now, they are coming for the ultimate fortress of billable hours: Big Law. Strict U.S. ethics rules have long banned non-lawyers from owning law firms. But as we all know, ethics are very 2023 these days.

Enter the “management services organization” (MSO). This clever structure splits a law firm in two: The lawyers provide actual legal advice, while a separate PE-backed MSO entity handles the administrative functions, IP, and technology. As one anonymous private equity investor put it, “There are much stricter rules on law firm ownership, [but] there are ways around, you own the side company.” The complex arrangement admittedly “makes people nervous,” but the lure of outside capital is strong.

Big Law heavyweights like Paul Weiss, Proskauer, and Quinn Emanuel (which boldly brands itself as the “world’s most-feared law firm”) have already held talks with investors or bankers, the Financial Times reports. Firms are also desperate for cash to fund AI investments and win the expensive war for rainmaker partners. Yet, nobody wants to be the guinea pig. As an MSO adviser noted, “Everyone is interested, but everyone wants to go second.”