Camelot Newsletter

Back with an indecent proposal

February 17, 2024

Like an ex who just keeps “circling back” Adam Neumann is back with an indecent proposal

WeWork was once the most valuable startup in the U.S. worth $47 billion at its peek. Founded in 2010, WeWork revolutionized the office space market by taking long leases on large properties and renting the space to multiple smaller businesses on shorter, more flexible terms. The concept was really quite brilliant. The problem is, it was never a functional business model to begin with. The company was never actually profitable, at any point, and still isn’t.

On November 6th, 2023, WeWork filed for bankruptcy. It’s stock down to less than $1 per share. A gut wrenching 99.8 percent decline in valuation since its S-1 release in 2019; a nuclear disaster wherein the company initially valued at $47 billion was devalued to around $8 billion overnight. This was due largely to the catastrophic and absolutely comedic revelations contained in the S-1 (a document that comes out pre-ipo that gives an overview of the company’s financials and business structure). The S-1 revealed a grossly overvalued company, under the sole leadership of Neumann, that was locked into decades long leases hemorrhaging hundreds of millions of dollars per month. It detailed the antics of its wild liability of a founder who had almost $100 million in personal loans from J.P. Morgan Chase who was (surprise, surprise) underwriting the IPO. It curiously chronicled Neumann personally purchasing commercial buildings that he then turned around and rented back to WeWork (yep WeWork was paying HIM rent), and a rather conspicuous payment for $5.9 million to Neumann for using the word “we” in the company branding, among dozens of other absolutely egregious examples of mismanagement. It’s a real circus of buffoonery. If you want more check out “WeCrashed” a docuseries on Apple+ starring Jared Leto and Anne Hathaway. It’s pretty entertaining. In short, after the IPO fiasco, WeWork now a glaring symbol of boundless audacity and glaring defiance for the laws of economics, tossed Neumann out the window but not without a billion dollar parachute to break his fall. This should be the end of the story, but alas, it is not.

Shortly after its bankruptcy filing, Neumann assisted by none other than Elon Musk’s lawyer, is preparing to make a bid for the company. Thus far it looks like WeWork is not taking the bait. Boards tend to remember the burn from the guy that oversaw the decline of the company but still walked away with over a billion dollars. Thus far, the board has not complied with his requests to obtain financial details necessary to make an official offer.

I hope that WeWork says thanks, but no thanks to Neumann and his special recipe for BBQ’d books; hot ‘n spicy like Enron, and likely to give you indigestion.

Who Owns What? Copyrights and Training AI Models

One of the most pressing issues in the development of ai right now is how core ai models, like ChatGPT, are trained. These models require vast amounts of data to learn and produce content. They first ingest a massive array of data sources that include text, audio or any type of data that is then evaluated and processed in order to generate responses to your queries.

Artists like Sarah Silverman take the position that if these models learn on her content then she should be compensated for it. Which at first glance seems fair. But when you step back and look at the larger picture, doesn’t quite make sense.

Taking a global view of the issue, we see that a machine absorbing large amounts of data is much like a human being naturally learning. Think about how much information you take in each day. Social media images, YouTube videos, streaming shows, books, news articles, podcasts, music and so much more! If someone asks you a question, your response is going to derive from your memory which includes all of these various sources. Now, if someone were to ask you about Sarah Silverman’s book (let’s assume you have read it) and you give them your response, then according to Sarah you might owe her a cut. That doesn’t really seem right in my opinion. At the time of publishing Silverman’s lawsuit has been largely dismissed by the court.

There are other lawsuits pending including one filed by the Authors Guild which includes authors George R. Martin and John Grisham, as well as the New York Times, alleging that OpenAI and other LLMs (large language models) have illegally utilized their copyrighted work to train their language models.

We will continue to track the outcomes of these lawsuits but in the meantime, I wrote a little something here for you to ponder while you sip your coffee this morning ☕️ 

In other news…

Turkeys and Angels

Every week brings new and exciting antics! Here I nominate one Turkey; a squawky or nefarious critter deserving of the “You are a Turkey” moniker. Because we must always bring balance to the force, an Angel will additionally be recognized for bringing laughter, love or all around goodness to the world.

This week’s Turkey: Donald Trump for this bizarre social media statement where he seemingly takes credit for Taylor Swift’s success referring to himself as “someone who made her so much money.” I honestly can’t with this one 🤨 

This week’s Angel: The former co-founder of Costco, Jim Sinegal, for bringing us hot dogs and soda for $1.50 since 1984 and for famously saying “If you raise the [price of the] effing hot dog, I will kill you. Figure it out.” A true hero of the people. Costco has a new CEO and I do hope he is as stouthearted as his predecessor.