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The controversial AI art app that generates portraits...

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Francis Scialabba

 

BROWSE

 
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The wackiest headlines from the week as they would appear in a "Classifieds" section...

ISO FRIEND TO FACETIME AT 40,000 FT: The EU is finalizing plans to allow passengers to use 5G on airplanes, so you'll soon be able to call people on planes there (but don't).

ISO MOVIE STARS: America has completely run out of them, according to NYT critic Wesley Morris. Qualifications: look like you were generated by an AI.

GUILT REMOVAL: London tattoo removal studio is offering to laser off that Kanye West tattoo you got during the College Dropout era. 100% free.

HIRING NARC DOGS: Trained noses needed as Covid-19-related disruptions have caused a shortage of bomb-sniffing dogs in the US.

HIRING ARTIST FOR VERY LITTLE $: Are you an illustrator looking to make almost enough to buy a nice mattress? Epic Games, which is expected to bring in $6.27 billion this year, tried to commission an illustration + copyright from an artist for $3,000.

WORK SLUMBER PARTY TONIGHT!!! Sleep in some conference rooms at Twitter HQ, which Elon Musk has converted into dorms, basically. The "perk" is part of the company's new commitment to destroy work–life balance once and for all.

LOOKING TO GET SPICY: McCormick (known for red pop-tops and celery salt) named its first-ever flavor of the year: Vietnamese x Cajun Style Seasoning.

PEOPLE COUNTERS WANTED: Because Papua New Guinea doesn't know how many people it has. The official count is 9.4 million, but a new report found it could actually be around 17 million. The prime minister guessed 11 million.

MOZZ MISSING: TGI Friday's-branded "Mozzarella Sticks" snacks actually contain no mozzarella, only cheddar, a woman filing a lawsuit claimed. Mozz last seen on caprese salad.—MM, NF, AR

     
 
Bombas
 

SNAPSHOTS

 

Photo of the week

Brittney Griner and Viktor Bout walk past each other on a tarmac after a prisoner swap TASS via ZUMA

Months of tense negotiations led to this dramatic moment on an airport tarmac in the UAE. WNBA star Brittney Griner (in the red coat) is seen about to walk past Russian arms dealer Viktor Bout (guy with manila envelope) after the US and Russia agreed to a 1–1 prisoner swap. The scene was captured in a video released by Russian state media.

 

SCIENCE

 

Dept. of Progress

Dexter from Dexter's lab saying Dexter's Laboratory/Warner Bros. Domestic Television via Giphy

Here are some illuminating scientific discoveries from the week to help you live better and maybe even dodge a cold.

Your mom was right. Going out in the cold can make you sick. A new study found the reason we're more susceptible to germs in winter is that the frosty air weakens your nose's immune response. Turning down your nasal temperature by just nine degrees Fahrenheit kills almost half of the billions of cells that fight viruses and bacteria in your nostrils.

What the %$#!*@? Turns out you don't need to speak English to understand most of what they're saying in Pulp Fiction. New research shows swearwords tend to have similar sounds—no matter what language you're swearing in. Even across different language families, the sounds made by the letters l, r, w, and y, known to linguists as approximants, rarely feature in cuss words. Our brains recognize this pattern enough that when researchers asked speakers of several different languages to guess which word in a pair of nonsense words that differed by just one sound was a curse, they rarely picked the one with an approximant.

Some really, really old DNA got discovered. There's beating a record, and then there's beating a record by a million years—like the scientists who recently managed to collect the oldest DNA ever found. They extracted 2-million-year-old DNA from Ice Age sediment in Greenland, finding fragments from 135 different species, including the mastodon, a creature never before known to have lived in the area. Their findings provide a snapshot of the prehistoric ecosystem, revealing that what is now a polar desert was once full of vegetation and varied animal life. The researchers hope their findings can shed light on both the evolutionary past and the possible impact of climate change on the future.—AR

 

TECHNOLOGY

 

AI art app makes waves on social media and conjures a tsunami of controversy

Lensa array of portraits Prisma AI

From Chance the Rapper to the random dude you drunkenly talked to at a concert, seemingly everyone has taken to Instagram to flash their AI-created portraits. The souped-up selfies come from photo-editing app Lensa AI through its "Magic Avatars" feature that generates original images of users' likeness rendered in various artistic styles.

Lensa acts as an intermediate between Stable Diffusion, the open-source AI tool that powers it, and the portrait subject. After paying $3.99 to use the feature, you upload 10–20 selfies and Lensa spits out 50 stylized portraits that look like they're the work of an eclectic digital artist collective.

You're not alone in seeing it everywhere: The appeal of visualizing one's anime, sci-fi, or fairy princess alter-ego landed Lensa at the top of the charts among free apps in the Apple and Google app stores soon after the Magic Avatars feature launched late last month.

But while Lensa might be a great source of eye-catching material for an artsy dating profile, many observers are unsettled by the implications of its rise. So let's ruin the fun and take a peek into the Pandora's box of ethical murkiness that comes with new technology.

Who's not impressed by your new profile pic?

Artists: Many digital artists and copyright holders say they're not being credited or reimbursed for their artwork, which is being used to train the AI model that the company behind Lensa, Prisma Labs, is monetizing. Artist Lauryn Ipsum pointed to what she says are frequent instances where fragments of artists' signatures are visible in the digital avatars. She tweeted her frustration at the fact that "people are still trying to argue it isn't theft."

Others worry about how automated art generators might devalue their skills as visual creators (similar to how certain newsletter writers are made uneasy by the writing talent of OpenAI's new chatbot).

Privacy advocates: Some users expressed privacy concerns about how Lensa uses their photos and personal data. Prisma says it deletes your selfies after they're turned into avatars, but it uses them to train its neural networks and reserves the right to use personal data to improve the product.

Ethicists: All it takes to use Lensa for sexually predatory purposes is a few photos of the victim. Unlike human artists, the app can't tell right from wrong and can be easily tricked into churning out erotic stylizations of whatever images it gets fed. Technology researcher Olivia Snow went as far as using her own childhood photos to demonstrate that Lensa has no qualms about sexualizing images of children.

What's next? Some creators have called for a boycott of Lensa, urging people to hire an old-school, flesh-and-blood artist for their next round of stylized selfies. But now that AI art tools exist, they aren't going away and we'll have to learn how to navigate the presence of paintbrush-wielding machines in our lives.—SK

     
 
Koio
 

BREW'S BEST

 

Sunday to-do list

Meal prep: Okay, it's not technically a meal, but here are 20 festive Christmas cocktails you can make to impress friends at your holiday party.

Workout: Don't let returning to the office leave you stiff. Check out this list of stretches you can do at your desk.

Book club: How Far the Light Reaches consists of 10 essays on sea creatures and relates their stories to human themes of family, relationships, and coming of age.

Smart purchase: This dishwashing bowl is a life-saver in the kitchen.

Streaming binge: Our resident HBO Max expert Max says Stath Lets Flats is the perfect comedy about pigeons and renting.

Productivity tip: NASA scientists have determined the ideal length for a performance-enhancing power nap.

Tech tip: How to use ChatGPT to create a weight loss plan.

Sweet treat: Make Cheryl's your go-to thoughtful gift or the delicious dessert for your next gathering. Get 20% off sitewide with code 20HOL.*

A better night's sleep: Peep our pillow pick + other great gifts for everyone on your list in our gift guide. Sponsored by Marlow.*

*This is sponsored advertising content.

 

DESTINATIONS

 

Place to be: New York City's Fifth Ave.

People looking at the holiday decorations on 5th ave. Roy Rochlin/Getty Images

It's a big world out there. In this section, we'll teleport you to an interesting location—and hopefully give you travel ideas in the process.

New York City is a magical place to visit during the holiday season…until you're shoved into freezing curbside slush by a pair of Salvation Army Santas fighting over territory.

The city is aiming to give pedestrians a little more breathing room this December. On three Sundays between noon and 6pm, including today, Fifth Avenue from 48th to 57th street will be closed to vehicular traffic, allowing people to enjoy the holiday decorations and window-shop at the luxury stores without having to dodge cabs like Frogger.

Blocking off streets for pedestrians-only was a big trend during the height of the pandemic, when few people were driving anyway. And some of those closures have become permanent: Cars have been completely banned from Beach Drive in DC's Rock Creek Park and JFK Drive in SF's Golden Gate Park.—NF

 

COMMUNITY

 

Crowd work

Last Sunday we asked readers: If you could go back in time to before FTX's implosion, knowing what you know now…how would you make the most money possible out of the situation?

Our favorite responses:

1. "Claim you're the business-oriented ghost of Christmas Future, take SBF out to show him the collapse of FTX, then say it's inevitable, and that he should short his own company, and for telling him you should get a 50–50 split on the profit."—Joe H. from London

2. "Become a writer for The Simpsons and 'predict' the crash a few years before. Then start a Simpsons prediction podcast talking about all the correct predictions that were written and profit off ad money."—Haley from Chicago

3. "Steal a hair from SBF, clone him, and then have the new SBF bail out the old one. Rinse, repeat."—Anonymous

4. "I'd feed donuts to Sam until he explodes and money goes everywhere. Then I'd take the money."—Simon S. from NC

This week's question

You're put in charge of the World Cup in 2026. What's one change you'd implement in order to make it more exciting for people who don't care about soccer?

For example, we'd add a rule that at the 12-minute mark during every game, 600 more balls are dropped onto the field. Share your idea here.

 

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Written by Neal Freyman, Sam Klebanov, Abigail Rubenstein, and Matty Merritt

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Are GPs borrowing trouble with fund tool?

Plus: Those happy crypto days seem so hard to find, weighing effects of inside investors, the near future of ecommerce & more
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The Weekend Pitch
December 11, 2022
Presented by Atlas
(Julia Midkiff/PitchBook News)
With the global economy looking more fragile than it has in a long time, comparisons to past crises are inevitable. The search is already on for the financial villain that will trigger the next market cataclysm. In the 2008 crisis, it was the collateralized debt obligation—a financial instrument essentially used to disguise subprime mortgages as AAA-rated products.

Since then, any financial instrument starting with a "C" and ending with an "O" has been treated with suspicion. It is little wonder then that the recent proliferation of the similar-sounding collateralized fund obligation in the private markets is raising more than a few eyebrows. But is the alarm warranted?

The exotic-sounding CFO may have a superficial resemblance to the justifiably maligned CDO, but it is also different in some important ways, both in terms of the assets that underpin it and the amount of leverage they use. Moreover, CFO usage is comparatively niche.

On the other hand, there are valid concerns—particularly with regard to new types of CFOs being issued by GPs that have not been tested by a downturn. The market for CFOs, as small as it is, is growing while it remains relatively opaque. As a result, it can be hard to measure what kind of systemic risk CFOs present, if any. For these reasons, CFOs warrant closer examination.

I'm Andrew Woodman, and welcome to The Weekend Pitch. You can reach me at andrew.woodman@pitchbook.com or on Twitter @adwoodman.
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A message from Atlas  
Navigate uncertain economic times with an EOR
Economic uncertainty may leave you hesitant when it comes to cross-border investments and entering new markets. Deals are complicated, drawn-out, and costly, often requiring an established presence in the market you’re investing in. Does your company have the time, resources, and flexibility to undertake a cross-border investment amid a looming recession?

An Employer of Record (EOR) can simplify and accelerate cross-border deals by:
  • Supporting speedy market expansion through its own local entities 
  • Minimizing compliance risk through knowledge of local tax and labor laws 
  • Managing traditional HR and payroll administration 
Learn how an EOR can reduce risk, streamline global payroll and provide access to top international talent for your portfolio companies – helping your business thrive during uncertainty.
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Trivia

Healthtech startups have raised more than $26 billion in VC investment across 1,413 deals through Nov. 29, according to PitchBook data. That is below 2021's record. How much has dealmaking fallen by value and deal volume from last year?

 A) 15% by value, 19% by volume.
 B) 57% by value, 73% by volume.
 C) 2% by value, 8% by volume.
 D) 25% by value, 24% by volume.

Find your answer at the bottom of The Weekend Pitch!
 

Crypto in Q3:
'Can't you hear me, SOS?'

(Dragon Claws/Shutterstock)
"Where are those happy days? They seem so hard to find. … Whatever happened to our love?"

That's a line from the lyrics of ABBA's 1975 hit "SOS," but it could also describe the current crypto crisis. It's true that 2022 has been hard on the vertical between the collapse of FTX, the big drop in coin values and the nonstop headlines describing hackings.

But as PitchBook analyst Robert Le points out in our inaugural Crypto Report, the news wasn't all bad in Q3 as long as you know where to look.
 

Inside investors don't always
give future rounds a leg up

Inside investors should be leaders in subsequent financing rounds for startups, right?

Not necessarily. In our latest analyst note, Who Benefits from Insider-led Rounds?, we found that existing investors have "limited and situational" influence on future financing rounds for the startups they back.

In theory, existing investors should be able to attract additional money from their peers. In reality, there's no material return advantage for startups conducting insider-led rounds compared to rounds that aren't insider-led. While existing backers are effective in piquing additional investor interest, curiosity doesn't equate to better valuations.
 

Livestream shopping may come soon to screens near you

(helloabc/Shutterstock)
The ubiquity of social media, with prominent influencers and a blooming creator economy, has primed the US to embrace something that has been common in China in recent years: livestream-based shopping.

This shouldn't sound unfamiliar, as Walmart, TikTok, Instagram and Amazon have tried out the technology. With incumbents experimenting and early-stage venture capital flowing, the potential market for livestream commerce is huge.

This and other promising opportunities of Q3 in the ecommerce market are explored in our recent addition to the Emerging Tech Research report lineup.
 

Quote/Unquote

Joseph Y. Bae (Dia Dipasupil/Getty Images)
"Private capital is much more valuable today than it was last year or five years ago. That’s going to create some really, really interesting buying opportunities."

—Joseph Y. Bae, co-CEO of KKR, in a panel at the 2022 US Financial Services Conference in New York City.
 

Stay tuned

Keep an eye out for these insights and research reports coming out this week.
  • Connected Cars: The Next Ubiquitous Computing Platform

  • H1 2022 Real Assets Report

  • Fortune's Brainstorm AI Conference Paves Generative AI's Path

  • The EU's Russian Gas Problem Can Be Solved: Near-Term Challenges Are Surmountable Over the Long Run

  • Q3 2022 US PE Middle Market Report

  • Q3 Clean Energy Report (coverage launch)

  • Q3 2022 US PE Lending League Tables

  • Impact Funds by Reason and Region
 

Recommended Reads

Investors warm up to wildfire prevention. [ImpactAlpha]

Amazon is hopping into the generative AI craze with a new Alexa feature that creates bedtime stories for kids. [Forbes]

Can crypto survive its latest winter? [The Economist]
 

Trivia

(fizkes/Shutterstock)
Answer: D)

Healthtech dealmaking is 25% below last year's record by value and 24% by volume.

This edition of The Weekend Pitch was written by Andrew Woodman and Chris Noble. It was edited by Chris Noble and Clarinda Simpson.

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