Happy Tuesday.
The current thing in tech and business is Pope Leo XIV’s encyclical letter on AI.
Today’s lineupLetters from Leo Publisher Christopher Hale at 11:45 AM
Stord Founder & CEO Sean Henry at 12:15 PM
Incorruptible Author Eric Ries at 12:30 PM
Pope Leo XIV publishes encyclical letter “Magnifica Humanitas: On Safeguarding the Human Person In the Time of Artificial Intelligence”
What happened: Pope Leo released his first encyclical today. For context, encyclicals are formal papal letters addressed not only to Catholics, but “all people of good will.” Essentially, they outline the Catholic Church’s guidance on humanity’s major developments. The topic of Pope Leo’s 37,000-word encyclical is AI; other popes’ encyclicals have addressed capital and labor (Pope Leo XIII, 1891), the reconstruction of the social order during the crisis of industrial capitalism (Pope Pius XI, 1931), and birth control, sexuality, and marriage (Pope Paul VI, 1968). Encyclicals aren’t treated as infallible texts, they’re understood as ‘teaching moments’ and are regularly referenced by the Church and religious scholars after their release.
John’s take: Magnifica Humanitas paints a very moderate view around the challenges and opportunities posed by AI. The key thesis is that technology is not automatically evil, but it is also not neutral. AI reflects the values of the people and companies that build, fund, regulate, and use it.
A few key moments stuck out to me. First, Pope Leo XIV is unsatisfied with GDP as a development measure.
“It is important to move beyond the current metrics of development — which for more than eighty years have been tied to the concept of Gross Domestic Product (GDP) — since these metrics almost systematically neglect aspects essential to the overall wellbeing of people and the environment. The development of parameters and metrics complementary to GDP is crucial for improving the databases used for conducting analyses, political and economic decision-making and establishing regional, national and international priorities.”
I’ve been hearing this more and more from seemingly different camps. Doug O’Laughlin, the President of SemiAnalysis, mentioned GDP flaws on our show two weeks ago, specifically around changes in how value is created and captured in an AI era. There have also been many articles downstream of Kyla Scanlon’s original “Vibecession” work arguing that economic indicators are starting to decorrelate with consumer sentiment and overall happiness or “vibes.” A lot of this ties to wealth inequality, but also the psychological benefits of different goods (a cheaper TV doesn’t offset the feeling of paying more for healthcare, even when they net out economically).
The other big takeaway for me was the Pope’s thoughts on human challenges: “For an algorithm, an error is a flaw to be corrected; for a person, however, an error can be a catalyst for profound change.” He warns against transhumanism and posthumanism as a path to progress. “It is one thing to integrate technology within a human-centered, relational vision; it is quite another to be guided by an outlook that devalues human limits and promises a purely technical form of ‘salvation’.”
Even while raising warning flags in many paragraphs, the Pope does not call for an outright ban on AI technology, he’s not a doomer. He even highlights AI’s potential to eliminate “arduous, repetitive or dangerous tasks and to provide intelligent support for human activity.” Overall, the encyclical shares a balanced and optimistic view of the future, highlighting key challenges while not shying away from acknowledging how different things might need to be in a few years.
Several world records beaten at first Enhanced Games
What happened: Enhanced Games held its first competition over the weekend in Las Vegas, where athletes on legal performance-enhancing drugs competed in a variety of sports such as swimming and weightlifting. Greek swimmer Kristian Gkolomeev broke the world record for the men’s 50m free and won $1.25M for it (it was the only world record beaten). But a number of other athletes — such as Thor Björnsson (“the Mountain” from Game of Thrones) — didn’t beat any world records, and a non-enhanced athlete named Hunter Armstrong actually won first in the men’s 50m backstroke. Brian Johnson co-hosted the event.
Jordi’s take: Watching 15 minutes of the Enhanced Games on Saturday was enough for me to immediately text John that I thought the stock would nuke on Tuesday. Sure enough, it’s down ~41% today. For many of you, this is probably how you’re finding out that the Enhanced Games went public prior to their first event.
Before I share my thoughts on the event, I’d like to note that I was very excited about the concept for the Enhanced Games. In tech we’ve been hearing about it for years, in part because it’s “Thiel Backed,” but mostly because it’s just a fun idea. Take an incredible event like the Olympics and add steroids. What’s not to like?
In watching the games on Saturday though I realized something that feels very obvious in hindsight which is that the appeal of watching the Olympics has very, very little to do with whether or not weightlifter lifted 222kg or 222.1kg, or whether a swimmer swam the 50M in 20.81 seconds or 20.90 seconds. It’s never really been about records. The difference between winning a world record in swimming, running, or weightlifting and simply competing is not visually noticeable even if you’re paying close attention.
It became incredibly obvious that the real draw of the Olympics is the stories of the athletes themselves. Individuals who have dedicated their entire lives to representing their country once every four years in an obscure activity that people generally couldn’t care less about the rest of the time. Being able to witness pain, agony, glory, loss, and victory are what make the Olympics the Olympics. It doesn’t hit the same when a former Olympian that’s no longer competitive simply opts in to a drug-fueled payday.
I don’t know where the Enhanced Games go from here, but I hope it continues even if only for the athletes. This won’t be appointment viewing for me going forward, but there’s probably a market and could grow in the future if they can successfully recruit athletes that are still in their prime. In the meantime, using the games as a way to sell generic testosterone, semaglutide, and tadalafil is clever and supplement margins could make the whole operation sustainable.
Ferrari announces first fully-electric car “Luce”
Ferrari LuceWhat happened: Designed by Jony Ive with a price tag of $640,000, Ferrari’s new EV has already been incredibly polarizing among the carmaker’s fans. It’s a complete departure from the company’s traditional aesthetics; the chassis is higher set because of the battery, and overall the look and feel of the car is much less aggressive than what people have come to expect out of Ferraris. The stock fell 5% at market open.
Jordi’s take: Ferrari revealed the exterior design of the Luce yesterday, their first EV. Like nearly all recent Ferrari launches, the response from the peanut gallery was very negative. Among my Ferrari owning friends, the response was more mixed. TJ Parker had some nice things to say about it even if my Italian buddies were somewhat devastated.
The car looks fine to me (for a daily) and I think a lot of the hate and frustration is misplaced. The real issue in my book is the price. At $650,000 this might be the strangest release by a major automotive manufacturer. For context, Ferrari currently sells two of their enthusiast cars, the 12Cilindri and 849 Testarossa, for significantly less. So not only does Ferrari expect you to pay more for a Luce than two of their actually desirable cars, they expect you to pay roughly 13x more than what you’d pay for a Tesla or BYD with better range. Ferrari can argue that the Luce “outperforms” its EV peers, but given that EV buyers are already used to incredible straight line acceleration I don’t think performance will matter here. At $300K, this might have been a hit but at $650K I expect a complete flop.
Down the road, I wouldn’t be surprised to see them capitulate on EVs and partner with a Chinese manufacturer / license their brand in some way. Outside of that route, it’s hard to see them driving meaningful sales in the category.
Clip Spotlight: Jordi on recent tech layoffsOn Friday, Jordi dissected why companies that have recently laid off employees are also saying "the business is better than it's ever been" in the same memo:
"There's still a lot of crediting AI for layoffs that would have needed to happen even if we weren't in this technology cycle."
"You can say 'Our business has been better than it's ever been,' but that doesn't mean it's being valued better than it ever has."
"'Better than it's ever been.' What does that mean? Revenue's up?"
"The example that I know you're thinking of, I can't imagine that that company is trading anywhere near where it was trading 1-2 years ago."
"When you have a massive correction in the valuation of your company, you're going to try to make moves to change that. Or free up resources to invest in new product areas. And get that momentum again."
Pope Leo XIV’s encyclical: On Safeguarding The Human Person In The Time Of Artificial Intelligence
WSJ: Ferrari Launches $640,000, Jony Ive-Designed, Glass-Clad Electric Speedster
ABC News: Kerley runs 9.97 at Enhanced Games, where Kristian Gkolomeev gets a $1M bonus
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