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Spring forward. Hey, Future Party people. Did you remember to switch your clocks this weekend? We sure did, but now we're feeling the effects. If Congress fails to pass the Sunshine Protection Act and ban the time change for good, we’ll settle for at least a federal holiday on this sleepy Monday. Six shots of espresso, anyone?
And if you missed last night’s Oscars, don’t worry. We got you. Check out our wrap-up below.
In other news… SVB crashes the tech party, ChatGPT teaches a thing or two, and buzzed buying is big business.
Top Trends
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ECONOMY
Silicon Valley Bank’s collapse drags down the tech industry
The Future. Last week’s failure of Silicon Valley Bank (SVB), the 16th largest bank in the US, has rocked the startup world — draining billions from companies, leaving workers without paychecks, and running a chill down the spine of the financial industry in a way they haven’t felt since 2008. Unless the newly-announced federal protection truly ensures that depositors can access their funds immediately, mass layoffs could start this week to keep companies afloat… just as the bloodbath of recent months had seemed to dry.
Empty pockets
The collapse of SVB is the biggest bank failure since Washington Mutual in 2008.
- SVB invested a lot of its $175.4 billion in deposits in US treasuries and mortgage-backed securities to keep the money working while interest rates were low.
- But as the Fed raised interest rates, cash flow from new VC-backed startups stalled, and those bond investments turned sour, with losses from a $21 billion investment tipping the dominoes.
- So SVB tried to raise money last week and then tried to find a buyer… but that spooked customers, who started pulling cash in fear of a collapse, which led to a stock freefall — wash, rinse, repeat.
- By Friday, the California Department of Financial Protection and Innovation closed the bank and named the Federal Deposit Insurance Corporation the receiver to handle getting clients some of their money.
- But then yesterday, the Treasury Department, the Federal Reserve, and the FDIC promised to contain the fallout by announcing that every depositor will have access to all their funds via federal protection.
The SVB branch offices will be open under the control of a government financial vehicle called the Deposit Insurance National Bank of Santa Clara (if you want to know who has your money).
Bank bounce
The fallout of SVB’s collapse happened immediately.
- Customers, tech startups big and small, will get up to $250,000 of their money quickly (the amount insured by the FDIC), but anything over that (about $151 billion of deposits in SVB are uninsured) was not guaranteed until the federal government stepped in.
- Employees are already feeling the burn because, with hundreds of companies and VC firms having their money tied up in SVB, they aren’t receiving their due pay. Companies started immediately looking for alternative ways to make payroll.
- Banks are feeling ripples of the unease now spreading in the financial industry, with the four biggest US banks losing $52 billion in value. Smaller banks similar to SVB have the potential to undergo a similar collapse.
Having been a partner to Silicon Valley for decades, expect the entire startup ecosystem to be forever changed. Last week was just the beginning.
AI
Both teachers and students find use for ChatGPT
The Future. After an initial outcry that ChatGPT could upend the education system for the worst (cheating, misinformation, plagiarism, etc.), students and teachers are saying they see its benefits. With the proper safeguards in place, ChatGPT could soon just be another tool to enhance the classroom — like a calculator for students or a TA for teachers.
Vibe update
A survey from the Walton Family Foundation found…
- 51% of teachers (K-12) are using ChatGPT for things like lesson planning, brainstorming, and “building background knowledge.”
- 33% of students ages 12-17 use it to “improve as students” and “hasten their learning process.” (read: get answers faster).
Overall, 88% of teachers and 79% of students who have used ChatGPT say it has a positive impact.
Study buddy
The hope is that ChatGPT and other AI platforms can help close the learning gap caused by school closures during the pandemic.
Romy Drucker, director of the K-12 Education Program at the Walton Family Foundation, told Axios, "What we see in the data is that teachers need better tools and resources to meet this moment, and that's why they're among the earliest adopters of ChatGPT."
The wrinkle may be in catching plagiarized work and looking out for all the ways ChatGPT confidently spits out wrong answers from time to time. Always check your sources.
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BUSINESS
Drinking and shopping is big (but shrinking) business
The Future. Alcohol is notorious for giving us loose lips, but, it turns out, also some loose wallets. A new study found that about 45 million Americans ran up a tab of $14 billion last year in purchases made while drunk or tipsy. Surprisingly, that’s a declining number from recent years, meaning that either alcohol consumption is on the decline or we’re just getting better at following our budget under the influence.
Cocktails and commerce
The personal finance website Finder found some interesting insights into those that shop under the influence.
- 1 in 6 Americans (primarily men) shop while intoxicated.
- Millennials were the reigning inebriated champs, with 33% of those surveyed saying they’ve swiped while sloshed (compared to only 2% of boomers).
- They spent an average of $309 last year on buzzed buys.
- They typically buy food, clothing, shoes, more alcohol, cigarettes, or gamble.
- But 19% (again, mostly men) hilariously reported that they have also bought pets, not totally sober.
While $14 billion seems like a lot, that’s actually a major decline from the $39.4 billion spent while drunk in 2019. It must be because of all the young people switching to mocktails…
Do you want to drive more revenue?
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Highlights
The best curated daily stories from around the web
Everything Everywhere All the Oscars
Nominated for 11 Academy Awards, the wild, imaginative, and emotional Everything Everywhere All at Once has completed its awards run with seven wins, including Best Picture, Best Director, and Best Original Screenplay. According to NYT’s Kyle Buchanan, the unlikely contender that scored $100 million at box office for distributor A24 also has the incredible distinction of winning more above-the-line Oscars than any film in the Academy Awards’ 95-year history. An amazing accomplishment in any timeline.
Read more → deadline
EVs tune out AM radio
Automakers such as Ford, Rivian, Tesla, BMW, Mazda, and Volkswagen are all rolling out new vehicles without the classic AM frequency. Why? Turns out the powertrain of EVs creates electromagnetic interference with AM radio, so the carmakers are no longer bothering with putting in the compatibility. That’s concerning to lawmakers because AM radio is crucial for emergency broadcasts, such as FEMA’s National Public Warning System, especially in rural areas. Good luck getting that tornado warning if you’re a Tesla driver in Oklahoma.
Read more → theverge
AI can predict the world’s pantry needs
A new study published in Science Advances used AI to study decades worth of food-insecurity headlines from around the world to create a predictive model of where food shortages will strike next. The model allegedly can predict crises in the 37 most food-insecure countries up to 12 months in advance, with more accuracy than the current systems. Providing relief to countries in advance could be a game-changer for humanitarian aid.
Read more → axios
A TikTok beauty filter is too good
A new TikTok Filter dubbed “Bold Glamour” is so good that everyone from users to psychologists is a little on edge. Since March 8, the filter has been used in over 2.8 million videos, clocking in more than 390 million views. What strikes people is that the filter is so natural and flawless that users can’t even tell if it’s on. That’s because the filter is the first to use machine learning to apply the change. Experts warn that the filter could lower self-esteem and enforce unrealistic beauty standards.
Read more → insider
One scoop of ranch on a waffle cone, please
Van Leeuwen’s Hidden Valley Ranch-flavored ice cream is here… and reportedly pretty gross. Available on Walmart shelves from March 20 to May 28, the ice cream flavor seems to be a wild stunt to grab headlines (because, of course, it will) and also open both companies up to new customers who want to try something… well… bold. But this is par the course for Brooklyn-based artisanal ice cream maker Van Leeuwen — they’ve experimented with Kraft Macaroni & Cheese and Grey Poupon flavors before. Wild stuff.
Read more → fastcompany
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Edited by Nick Comney. Publishing by Sara Kitnick.