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Dan Elitzer and Jeremy Rubin rolled out the “MIT Bitcoin Project” in 2014.
Christopher A. Maynor

Jeremy Rubin was a sophomore studying computer science and electrical engineering when he decided that he wanted to give every undergraduate student at the Massachusetts Institute of Technology $100 worth of bitcoin

Seven months later – armed with half a million dollars in donations from alumni and bitcoin enthusiasts – Rubin offered to do just that, and 3,108 undergrads took him up on it.

This was back when the world’s most popular cryptocurrency wasn’t quite so popular, trading at around $336. Had all recipients of this free bitcoin let their crypto wallets sit idle, the “MIT Airdrop” collective would have been $44.1 million richer by today’s prices. 

But some students didn’t hold on.

Researchers tracing the project, including Christian Catalini, now co-creator of the Diem stablecoin project initiated by Facebook, say that 1 in 10 cashed out in the first two weeks. By the end of the experiment in 2017, 1 in 4 had cashed out. The experiment creators stopped tracking transactions among the cohort after that.

Van Phu, now a software engineer and co-founder of crypto broker Floating Point Group, is still kicking himself for spending a lot of his bitcoin on sushi.

“One of the worst things and one of the best things at MIT is this restaurant called Thelonious Monkfish,” said Phu. “I spent a lot of my crypto buying sushi.”

Phu wasn’t alone in hemorrhaging his virtual coins at this campus dining hotspot.

Quantitative trader Sam Trabucco, who also took part in the experiment, estimated that half the people he knew spent their crypto spoils on fish. 

“It was the only restaurant in Cambridge that was accepting bitcoin at the time, and it was a pretty popular spot,” he said. The restaurant has since changed its name and retired its bitcoin payment policy.

The MIT experiment

Rubin was halfway through a protracted legal battle with the New Jersey attorney general when he first got the idea for the bitcoin giveaway.

Unlike most 19-year-olds, Rubin was venting to his friends about the fact that state officials had accused him of being a “hardcore, hardened cyber criminal” who was “installing malware on people’s computers.” But Rubin says he had simply launched a bitcoin mining program called Tidbit. The project had just won an innovation award at a local hackathon known as Node Knockout, and Rubin, now CEO of bitcoin R&D lab Judica, was proud of what he had built. 

The episode ended up with Rubin being cleared, but as it was happening, he kept noticing the blank stares from his friends each time he mentioned the word “bitcoin.”

“I thought, ‘This is MIT. I thought everyone was super cutting-edge.’ And I realized that no, it really wasn’t something that was all that widespread at that point,” said Rubin. 

And so the bitcoin experiment was born. 

In late October 2014, Rubin and fellow project leader Dan Elitzer, then an MBA student at Sloan, opened up enrollment. Students who wanted the $100 worth of bitcoin had to complete a few questionnaires and review educational materials. 

Jeremy Rubin touring the NYSE during a 2013 internship.

“We wanted to get bitcoin out in the world more, and we wanted to spread the technology,” said Rubin. “We also wanted to study what it means to distribute a new asset.”

Students wanting to take part also had to set up their own crypto wallet, which at the time was hard enough to discourage participation. Still, in the end, 70% of students ended up jumping through all the hoops.

Phu was among the students who started a side hustle opening up crypto wallets for those who didn’t want to spend the time figuring out how to do it and were willing to yield a percentage of their bitcoin as a fee for services rendered. 

“A lot of the students would pay the other students half of the bitcoin if they would set it up on their behalf,” explained Phu. He says he helped somewhere between 10 and 12 people set up crypto wallets in exchange for a commission paid in bitcoin. It’s somewhat taken the sting out of the fact that he spent $100 worth of bitcoin — worth more than $14,000 today — on two sushi dinners.

Trabucco says that back when he was a student, he didn’t think that much of the project, though he did manage to triple his bitcoin handout playing poker online.

“Half the people I knew actually registered it as an event,” said Trabucco. As far as he was concerned, he thought bitcoin was cool, but “didn’t really think it was going to be the future of finance.” 

But already having a crypto wallet did lower the barrier to entry to the cryptosphere later in life. Trabucco now runs Alameda Research, which manages over $1 billion in digital assets and trades up to $10 billion per day across thousands of products, including all major coins and altcoins, as well as their derivatives.

“I can’t say for sure whether it was the deciding factor, but it certainly could have been, because if I didn’t already have an account, I’m not sure if I would have ended up doing this,” he said. 

Phu, Rubin and Trabucco all declined to share how much they kept and how much crypto they’ve accrued since their days on campus. 

Massachusetts Institute of Technology (MIT) campus in Cambridge, Massachusetts
(Photo: Bloomberg / Getty Images)

Where all the bitcoin went

When CNBC spoke to Catalini, he was taking a walk to break up the 12 to 14 hours a day he spends on Zoom working. 

Among Catalini’s lasting takeaways is the fact that bitcoin simply didn’t work as a method of payment on campus. 

“Even at the time, the technology was quite user unfriendly,” he said. “Even within a pretty tech-savvy community such as MIT, it was kind of surprising to see how much work it really was to use bitcoin at the time.”

But that inability to spend was probably for the best.

“What was fascinating is that in a sense, the MIT students got it right. The vast majority held on to their bitcoin as an investment. And maybe it sounds obvious given the price has appreciated so dramatically. But I think in 2014, it wasn’t clear at all that something that was worth at the time, I think $250, would be worth more than that,” he said.

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Nvidia to join Dow Jones Industrial Average, replacing rival chipmaker Intel

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Nvidia to join Dow Jones Industrial Average, replacing rival chipmaker Intel

CEO of Nvidia, Jensen Huang, speaks during the launch of the supercomputer Gefion, where the new AI supercomputer has been established in collaboration with EIFO and NVIDIA at Vilhelm Lauritzen Terminal in Kastrup, Denmark October 23, 2024.

Ritzau Scanpix | Mads Claus Rasmussen | Via Reuters

Nvidia is replacing rival chipmaker Intel in the Dow Jones Industrial Average, a shakeup to the blue-chip index that reflects the boom in artificial intelligence and a major shift in the semiconductor industry.

Intel shares were down 1% in extended trading on Friday. Nvidia shares rose 1%.

The switch will take place on Nov. 8. Also, Sherwin Williams will replace Dow Inc. in the index, S&P Dow Jones said in a statement.

Nvidia shares have climbed over 170% so far in 2024 after jumping roughly 240% last year, as investors have rushed to get a piece of the AI chipmaker. Nvidia’s market cap has swelled to $3.3 trillion, second only to Apple among publicly traded companies.

Companies including Microsoft, Meta, Google and Amazon are purchasing Nvidia’s graphics processing units (GPUs), such as the H100, in massive quantities to build clusters of computers for their AI work. Nvidia’s revenue has more than doubled in each of the past five quarters, and has at least tripled in three of them. The company has sginaled that demand for its next-generation AI GPU called Blackwell is “insane.”

With the addition of Nvidia, four of the six trillion-dollar tech companies are now in the index. The two not in the Dow are Alphabet and Meta.

While Nvidia has been soaring, Intel has been slumping. Long the dominant maker of PC chips, Intel has lost market share to Advanced Micro Devices and has made very little headway in AI. Intel shares have fallen by more than half this year as the company struggles with manufacturing challenges and new competition for its central processors.

Intel said in a filing this week that the board’s audit and finance committee approved cost and capital reduction activities, including lowering head count by 16,500 employees and reducing its real estate footprint. The job cuts were originally announced in August.

The Dow contains 30 components and is weighted by the share price of the individual stocks instead of total market value. Nvidia put itself in better position to join the index in May, when the company announced a 10-for-1 stock split. While doing nothing to its market cap, the move slashed the price of each share by 90%, allowing the company to become a part of the Dow without having too heavy a weighting.

The switch is the first change to the index since February, when Amazon replaced Walgreens Boots Alliance. Over the years, the Dow has been playing catchup in gaining exposure to the largest technology companies. The stocks in the index are chosen by a committee from S&P Dow Jones Indices.

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Super Micro’s 44% plunge this week wipes out stock’s gains for the year

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Super Micro's 44% plunge this week wipes out stock's gains for the year

Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7. 

Annabelle Chih | Bloomberg | Getty Images

Super Micro investors continued to rush the exits on Friday, pushing the stock down another 9% and bringing this week’s selloff to 44%, after the data center company lost its second auditor in less than two years.

The company’s shares fell as low as $26.23, wiping out all of the gains for 2024. Shares had peaked at $118.81 in March, at which point they were up more than fourfold for the year. Earlier that month, S&P Dow Jones added the stock to the S&P 500, and Wall Street was rallying around the company’s growth, driven by sales of servers packed with Nvidia’s artificial intelligence processors.

Super Micro’s spectacular collapse since March has wiped out roughly $55 billion in market cap and left the company at risk of being delisted from the Nasdaq. On Wednesday, as the stock was in the midst of its second-worst day ever, Super Micro said it will provide a “business update” regarding its latest quarter on Tuesday, which is Election Day in the U.S.

The company’s recent challenges date back to August, when Super Micro said it would not file its annual report on time with the SEC. Noted short seller Hindenburg Research then disclosed a short position in the company and wrote in a report that it identified “fresh evidence of accounting manipulation.” The Wall Street Journal later reported that the Department of Justice was in the early stages of a probe into the company.

Super Micro disclosed on Wednesday that Ernst & Young had resigned as its accounting firm just 17 months after taking over from Deloitte & Touche. The auditor said it was “unwilling to be associated with the financial statements prepared by management.”

A Super Micro spokesperson told CNBC that the company “disagrees with E&Y’s decision to resign, and we are working diligently to select new auditors.” Super Micro does not expect matters raised by Ernst & Young to “result in any restatements of its quarterly financial results for the fiscal year ended June 30, 2024, or for prior fiscal years,” the representative said.

Analysts at Argus Research on Thursday downgraded the stock in the intermediate term to a hold, citing the Hindenburg note, reports of the Justice Department investigation and the departure of Super Micro’s accounting firm, which the analysts called a “serious matter.” Argus’ fears go beyond accounting irregularities, with the firm suggesting that the company may be doing business with problematic entities.

“The DoJ’s concerns, in our view, may be mainly about related-party transactions and about SMCI products ending up in the hands of sanctioned Russian companies,” the analysts wrote.

In September, the month after announcing its filing delay, Super Micro said it had received a notification from the Nasdaq indicating that its late status meant the company wasn’t in compliance with the exchange’s listing rules. Super Micro said the Nasdaq’s rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline would be mid-November.

Though Super Micro hasn’t filed financials with the SEC since May, the company said in an August earnings presentation that revenue more than doubled for a third straight quarter. Analysts expect that, for the fiscal first quarter ended September, revenue jumped more than 200% to $6.45 billion, according to LSEG. That’s up from $2.1 billion a year earlier and $1.9 billion in the same fiscal quarter of 2023.

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Apple to buy Pixelmator, the iPhone image editing app with AI features

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Apple to buy Pixelmator, the iPhone image editing app with AI features

Peopl walk outside Steve Jobs Theater at the Apple Park campus before Apple’s “It’s Glowtime” event in Cupertino, California, on Sept. 9, 2024.

Nic Coury | AFP | Getty Images

Apple will buy Pixelmator, the creator of image editing apps for Apple’s iPhone and Mac platforms, Pixelmator announced Friday in a blog post.

Pixelmator, a Lithuanian company, was founded in 2007, and in recent years has been best known for Pixelmator and Pixelmator Pro, which compete with Adobe Photoshop. It also makes Photomator, a photo editing app.

Apple has highlighted Pixelmator apps over the years in its keynote product launches. In 2018, Apple named Pixelmator Pro its Mac App of the year, citing the company’s enthusiastic embrace of Apple’s machine learning and artificial intelligence capabilities, such as removing distracting objects from photos or making automated color adjustments.

We’ve been inspired by Apple since day one, crafting our products with the same razor-sharp focus on design, ease of use, and performance,” Pixelmator said in its blog post.

Apple does not acquire as many large companies as its Silicon Valley rivals. It prefers to make smaller acquisitions of companies with products or people that it can use to create Apple features. Neither Pixelmator nor Apple provided a price for the transaction.

Pixelmator said in its blog post that there “will be no material changes to the Pixelmator Pro, Pixelmator for iOS, and Photomator apps at this time.”

Earlier this week, Apple released the first version of Apple Intelligence, a suite of features that includes photo editing abilities such as Clean Up, which can remove people or objects from photos using AI.

Apple has acquired other popular apps that received accolades at the company’s product launches and awards ceremonies.

In 2020, Apple bought Dark Sky, a weather app that eventually became integrated into Apple’s default weather app. In 2017, it bought Workflow, an automation and macro app that eventually became Shortcuts, the iPhone’s scripting app, as well as the groundwork for a more capable Siri assistant.

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