On Wednesday, Elon Musk, the owner of Twitter and CEO of Tesla and SpaceX, made a noteworthy announcement regarding the launch of a new artificial intelligence company called xAI, with the primary objective to “understand the true nature of the universe.”

Announcing formation of @xAI to understand reality

— Elon Musk (@elonmusk) July 12, 2023

Greg Yang, one of the co-founders of xAI, stated that the startup will focus on exploring the “mathematics of deep learning,” a crucial aspect of AI. The company aims to develop a comprehensive “theory of everything” specifically tailored for large neural networks, with the ultimate goal of propelling AI to new heights and advancements.

Several reports have linked Musk to AI development following his criticism of the way companies, including OpenAI that he cofounded, are running the technology. Early this year, Musk reportedly started recruiting scientists to develop an alternative chatbot to OpenAI’s ChatGPT.

In April, The Financial Times reported that the entrepreneur had secured thousands of GPU processors from Nvidia in order to power a potential large language model, and was already assembling a team of researchers and engineers to work on the AI project dubbed “TruthGPT.”

During that very month, Musk disclosed his plans for a novel AI tool named “TruthGPT” in a recorded interview on Fox News Channel. He expressed concerns about the current focus of AI companies, suggesting that they may prioritize systems that align with political correctness rather than emphasizing objective truth.

In March, Musk and Jared Birchall, who oversees Musk’s family office, purportedly registered xAI as a company in Nevada, as indicated by a filing with the Nevada Secretary of State.

It’s worth mentioning that he had previously altered the name of Twitter to “X Corp.” according to financial filings. However, on the official website of xAI, the company explicitly states its independence from X Corp., adding that it will collaborate with X (Twitter), Tesla, and other companies in order to advance its mission.

The company’s website said Musk and his team will share more information in a live Twitter Spaces chat on Friday.

xAI, which launched its website on Wednesday, revealed that Elon Musk will head the team. The company’s roster of executives comprises professionals with extensive experience in artificial intelligence, hailing from prominent organizations like Google’s DeepMind, Microsoft Corp., Tesla Inc., and esteemed academic institutions such as the University of Toronto.

Team members behind xAI are alumni of DeepMind, OpenAI, Google Research, Microsoft Research, Twitter, and Tesla, who have worked on projects including DeepMind’s AlphaCode and OpenAI’s GPT-3.5 and GPT-4 chatbots.

According to the xAI website, the company has enlisted Dan Hendrycks, the director of the Center for AI Safety as an advisor. This advisory role aligns with the center’s focus on cautioning against the potential existential risks associated with the rapid development of artificial intelligence.

The launch of xAI will see an increase in competition in the artificial intelligence industry, where companies like OpenAI, Google, and Anthropic are already fighting for dominance. Although with the backing of Microsoft which has invested $13 billion, OpenAI leads the pack, xAI led by Musk is expected to cause disruption.

With the launch of xAI, the 52-year-old South African-born serial entrepreneur now heads six companies: Tesla, SpaceX, Twitter, Neuralink, the Boring Co., and now xAI.

Those bogus statistics are becoming bare. Yes, “Diaspora remittances to Nigeria witnessed a huge decline in H1 2023, according to the latest International Payment data released by the Central Bank of Nigeria. Compared to the $10.11 billion recorded in the same period last year, the decline has dealt a massive blow to Nigeria’s hope to boost its forex liquidity with Diaspora remittances.”

(The data quoted here seems not correct since Nigeria received about $20 billion remittances in 2022)

Add that to the bogus petrol consumption (has since dropped by more than 37%), you will see that Nigeria has a deep problem: guesswork policymaking.  Most of those “diaspora remittances” were round-tripped hard currency which agents of “the connected” were bringing back to the nation, at black market rate, after buying them at the original rate.

With the official and the parallel market rates getting to parity, that round-tripping will fade. But do not rejoice: they will invent another trick since nothing is punished in the nation.

As I noted in Tekedia Investment class on Saturday, the optimism in the banking stocks in the Nigerian stock exchange is not due to any fundamental redesign on what banks are doing, rather, people are buying into massive dividends which we expect to happen as banks reclassify foreign currency denominated assets, creating ephemeral > 40% profit overnight (it used to be N415/$, now you can use N700).  My thesis was that diasporas were not wiring money to buy equities (and CBN data just confirmed that, since we dropped from $10b to now $1b).

Until Nigeria begins to punish the connected who mess up the economy, nothing will change.

Diaspora remittances to Nigeria witnessed a huge decline in H1 2023, according to the latest International Payment data released by the Central Bank of Nigeria. Compared to the $10.11 billion recorded in the same period last year, the decline has dealt a massive blow to Nigeria’s hope to boost its forex liquidity with Diaspora remittances. (The data quoted here seems not correct since Nigeria received about $20 billion remittances in 2022)

A detailed analysis of the data revealed that Nigeria witnessed a gradual increase in remittances over several months in 2023. In January, the country recorded $79.2 million in remittances, which slightly rose to $83.8 million in February. March witnessed a significant jump in total direct remittances, reaching $138.6 million.

In April, the country received $150 million as direct remittances, followed by a further increase to $202.9 million in May. By June 2023, total direct remittances reached $297.5 million, indicating a consistent upward trend in remittances.

The CBN did not give a reason for the decline, which has raised concerns about the nation’s chances of addressing its forex changes in the short term. However, Partner, Chief Economist, and Head of Research at KPMG Nigeria, Dr. Yemi Kale, attributed the decline to probably “election uncertainty and the CBN cash and forex drama in Q1.” He said he won’t be bothered till he sees “Q3 and Q4” remittance data.

Nigeria’s major source of forex inflow is crude oil export. But the crisis in the oil sector has seen a drastic reduction in the country’s earnings from crude oil export, forcing it to largely rely on Diaspora remittances, which is regarded as its second major source of forex.

In 2021, the CBN introduced the Naira4dollar remittance scheme, as a way to encourage Nigerians living abroad to send foreign currencies back home. Under the scheme, commercial banks were required to pay recipients of remittances the incentive of N5 for every $1 remitted and received.

There was also the RT200 FX Programme launched in early 2022, with a set of policies and plans for non-oil exports. The aim is to use the programme to attain the goal of $200 billion in FX repatriation, exclusively from non-oil exports, in 3-5 years.

In 2022, Nigeria recorded $20.16 billion in Diaspora remittances, augmenting the meager forex proceeds from crude oil sales.

The Naira4Dollar scheme and the RT200 FX Programme have been discontinued following the floating of the FX market last month.

Meanwhile, the central bank has issued a directive to International Money Transfer Operators (IMTOs) to begin disbursing remittances to beneficiaries in Naira, alongside foreign exchange.

The apex bank specified that the exchange rate used for determining the Naira pay-out should be based on the Investors and Exporters’ Window foreign exchange rate.

The directive was outlined in a circular, referenced as FED/FEM/PUB/FPC/001/004, issued by Dr. Ozoemena Nnaji, the Director of Trade and Exchange at the CBN.

The circular, dated July 10, 2023, builds upon a previous circular dated November 30, 2022, which introduced guidelines for the payout policy of Diaspora remittances to beneficiaries in Nigeria.

The November 30 circular facilitated the payment of remittances in U.S. dollars to beneficiaries through IMTOs, providing unrestricted access to their funds via their chosen designated bank.

The new circular emphasizes that the option of Naira payment is an additional choice available to recipients of Diaspora remittances, in addition to United States Dollars and E-Naira.

The CBN’s full circular states, “Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.

“Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and e-Naira as payout options.

“For the avoidance of doubt, IMTOs are required to pay out the proceeds using the Investors’ & Exporters’ window rate as the anchor rate on the date of the transaction.

“The regulation takes effect immediately.”