June 20, 2023

Metaverse Highlights: Week of June 20, 2023

This week, the most significant developments come from outside the United States. 

A few days after French President Emmanuel Macron announced a push to make France a world-class AI player, the French start-up Mistral AI raised €105mn in Europe’s largest-ever seed round, signaling Europe’s desire to create a viable alternative to Silicon Valley companies. Meanwhile, the British company Improbable launched its plans for a network of metaverses that will compete with US platforms such as Meta and Microsoft. In China, the cities of Nanjing and Shanghai announced massive investments in the metaverse and AI, reflecting the country’s aspiration to become a world leader in these industries. 

Other news includes negotiations between the world’s biggest tech companies and leading media outlets to strike deals over the use of news content to train artificial intelligence, a new partnership between cryptocurrency giant Binance and pop artist The Weeknd, and an announcement from BlackRock, the largest asset manager in the world, which launched the first spot bitcoin exchange-traded fund (ETF) in the U.S. 

All these developments point towards the gradual mainstream integration of AI, crypto, and the metaverse. Nonetheless, the fact that so many countries are pushing to challenge the US is significant, particularly as the SEC and American lawmakers clarify their regulatory position on emerging technologies. Outside competition may force the US to rethink its approach to keep talent at home and remain the uncontested leader in the field.


The bottom line: Improbable, a SoftBank-backed startup developing huge virtual worlds, on Friday launched its plans for a network of metaverses that it hopes will one day be capable of hosting thousands of users and compete with platforms from U.S. tech giants such as Meta and Microsoft. The British company, founded in 2012, released a white paper detailing its vision for MSquared, a “network of interoperable Web3 metaverses,” or 3D spaces in which people can live, work and interact virtually. MSquared, a separate business entity from Improbable, raised $150 million from investors last year.

The bottom line: France is making a major push to position itself as Europe’s hub for artificial intelligence, throwing its weight behind the fast-growing and much-hyped technology. “I think we are number one [in AI] in continental Europe, and we have to accelerate,” French President Emmanuel Macron told CNBC’s Karen Tso last week. AI is viewed as impacting industries from finance to healthcare but has also been caught in the middle of the broader technology battle playing out between China and the U.S.

The bottom line: A French start-up founded four weeks ago by a trio of former Meta and Google artificial intelligence researchers has raised €105mn in Europe’s largest-ever seed round. Mistral AI’s first round of financing values the Paris-based concern at €240mn, including the funds raised, according to people close to the company. The record amount raised highlights the growing frenzy surrounding AI and Europe’s desire to create a viable alternative to Silicon Valley companies such as Microsoft-backed OpenAI and Google’s DeepMind.

The bottom line: Jiangning, a district within China’s Nanjing City, has signaled a desire to advance its metaverse development in a bid to compete with other Chinese cities. Jiangning’s roadmap outlines a metaverse strategy that will follow a three-year plan and leverage other innovative technology, including AI, NFTs, and cloud computing. In the first year, the district aims to attract up to 60 metaverse startups to achieve an industry valuation of 4 billion yuan ($559 million).

The bottom line: Shanghai, a front-runner in the deployment of emerging technologies in China, has recently announced its ambitious "Three-Year Action Plan for Promoting High-Quality Development of Manufacturing (2023-2025)." This strategic initiative was revealed by the Shanghai Municipal Government Office, highlighting the city's commitment to accelerating the development of its digital economy with a focus on blockchain, web3.0, and the metaverse. The plan underscores the role of these three key technologies in shaping the future of the city's manufacturing industry.

The bottom line: The world’s biggest tech companies are in talks with leading media outlets to strike landmark deals over the use of news content to train artificial intelligence technology. According to several people familiar with the talks, OpenAI, Google, Microsoft, and Adobe have met news executives in recent months to discuss copyright issues around their AI products, such as text chatbots and image generators. These people said that publishers, including News Corp, Axel Springer, The New York Times, and The Guardian, have each been in discussions with at least one of the tech companies.

The bottom line: German sports company Puma has launched Black Station 2, a metaverse platform that bridges the digital and physical worlds, allowing users to purchase phygital footwear. Black Station was originally launched as a dynamic and interactive destination where users could view and purchase exclusive digital collectibles that could then be redeemed for physical Puma sneakers. Black Station 2 is an expanded immersive experience that features two distinct and explorable worlds.

The bottom line: Apple is notorious for delivering products behind its competition after it has had a chance to perfect its hardware for the optimal user experience. Given the mixed reception of metaverse concepts across the broader public sphere, Apple may be wise to avoid controversial terms and focus on delivering a truly unique experience. That experience appears to be a metaverse operating system (OS) as the Apple Vision Pro will launch using visionOS, a new OS within Apple’s portfolio, which already includes MacOS, iOS, WatchOS, and iPadOS.

The bottom line: Cryptocurrency exchange giant Binance and pop artist The Weeknd have launched a specially created online space called the “Metaverse Dimension,” in an expansion of the pair’s ongoing partnership. Users of the web-based game can take part in a treasure hunt challenge designed to unlock exclusive areas, content, and rewards, and “bring The Weeknd’s creative world to life in a new way,” per a press release. In practice, it's a simple 3D experience in which players can explore a glossy world adorned with imagery from The Weeknd and Binance.

The bottom line: Crypto prices climbed to end the week Friday, a day after the largest asset manager in the world jumped into the race to launch the first spot bitcoin exchange-traded fund in the U.S. “One of the big purposes bitcoin serves as an asset class is really diversification. It just has a different risk profile than traditional financial markets,” Gustavo Schwenkler, associate professor at the Leavey School of Business at Santa Clara University, said. “If this were to get approved, then I could anticipate a lot more institutional investors adding bitcoin to their investment to their portfolios.

The bottom line: The burgeoning concept of the metaverse, a virtual universe made up of interconnected 3D worlds and spaces, has been rapidly gaining traction as the future of digital interactions. As businesses look for ways to innovate and engage with consumers, the 3D metaverse is poised to revolutionize traditional commerce. The 3D metaverse will utilize AI technology to create dynamic and interactive content, adding a new level of immersion to user experiences. Users will be able to use AI tools to generate tailored environments, personalized avatars, unique experiences, and interactive narratives.

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