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In today’s edition, the largest US cryptocurrency exchange lobbies for a new regulatory playbook, an͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
rotating globe
February 19, 2025
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Technology

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Reed Albergotti
Reed Albergotti

Hi, and welcome back to Semafor Tech.

The US crypto industry, left in regulatory limbo during the Joe Biden years, may finally get a clear legal framework under the Donald Trump administration and crypto czar David Sacks. Coinbase, the industry’s “adult in the room” that has continued to operate through turbulent times and SEC lawsuits, has published a blueprint on what the new rules should look like, according to a scoop by Semafor Principals colleague Eleanor Mueller. For more daily news on the second Trump administration, you can sign up for Semafor Principals here.

It’s worth paying attention to Coinbase’s proposal because it gives a good sense of what a regulated crypto world would look like. Safer trading exchanges, stablecoins that are actually stable, innovations like NFTs that are protected from regulatory overreach, authority to investigate market manipulation by bad actors.

As much as people like to criticize the crypto industry, which has had its share of scandals, the US is a place where people still write paper checks. Doing something as simple as sending someone a tip in another country is either impossible or really expensive through traditional means.

The world is now seamlessly connected by the internet (with some exceptions) and yet the global population is still, in practical terms, financially severed. This kind of legislation would essentially make crypto mainstream, and that will lead to some big changes.

Move Fast/Break Things

➚ MOVE FAST: Going, going. Niantic is looking to sell its games division, which includes the popular Pokémon Go franchise, to Saudi Arabia’s Scopely, Bloomberg reported. It’s a sign of how the Gulf region is becoming a big tech player, especially with its AI halo.

➘ BREAK THINGS: Gone. The failed AI pin from Humane is getting absorbed into HP and will shut down all of its online services for customers. It’s a fast downfall for the hyped product, which launched roughly a year ago with backing from Sam Altman and Marc Benioff.

The Humane AI pin.
Courtesy of Humane

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Artificial Flavor
An image promoting Banijay’s AI Love You format, showing a couple kissing.
Banijay Entertainment

Love transcends death, and maybe AI can transcend love — that’s precisely what a new tech-focused documentary hopes to discover. The Nordic branch of French television company Banijay Entertainment is developing a “docu-format” show following couples in which one person facing premature death seeks to preserve their love through a digital avatar, The Hollywood Reporter wrote. Led by a psychologist and tech expert, AI Love You depicts couples in their final months together training the AI about the ailing partner, aided by anecdotes and letters from friends and family members. When the loved one passes, the surviving significant other will decide, with the help of the psychologist, if they would like to engage with the avatar.

The show “redefines how technology can enhance human storytelling,” Banijay’s chief content officer of development, James Townley, told The Hollywood Reporter. “It’s a powerful concept, and impossible to ignore.”

People are increasingly engaging in romantic relationships with chatbots, as we wrote about last week, but the show will be a pioneer of sorts in conveying such intimate interactions with AI to the masses. The finished product is sure to present a potent and sober picture of AI’s benefits, its limits, and whether this kind of exchange is healthy.

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Eleanor Mueller

Coinbase releases US legislative wishlist

Coinbase CEO Brian Armstrong.
David Swanson/Reuters

Coinbase, the largest US cryptocurrency exchange and one of the industry’s top political donors, on Wednesday outlined its legislative priorities after spending tens of millions of dollars that helped Republicans win control of Washington in 2024.

The blueprint, first reported by Semafor, could be an influential roadmap for Washington as the industry transitions from being a regulatory target under the Joe Biden administration to an embraced sector under President Donald Trump.

A major change proposed by Coinbase would be to shift oversight of crypto spot trading to the Commodity Futures Trading Commission because the firm considers Bitcoin, Ethereum, and other similar digital assets to be commodities instead of securities, an idea challenged by the bigger Securities and Exchange Commission under Democratic leadership. That would overhaul how agencies regulate the nearly $3.3 trillion market.

Though the regulators can implement some industry-sought changes themselves, Congress will need to pass much of the rest. Coinbase, led by Brian Armstrong, who publicly tussled with the SEC under the Biden administration, recently brought on former Sen. Kyrsten Sinema, I-Ariz., and Chris LaCivita, Trump’s co-campaign manager.

“Blockchain technology and digital assets are reshaping the global economy,” Coinbase’s chief policy officer, Faryar Shirzad, wrote. “Yet, the absence of clear legislation in the United States stifles this potential, leaves consumers exposed, and drives innovation overseas.”

Read on for more details on Coinbase’s legislative push. →

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Semafor Stat
$44 billion.

That’s the reported value of Elon Musk’s social media platform X, formerly Twitter, in recent fundraising discussions — the same amount he paid for the site in 2022.

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Crowded Room
Former OpenAI CTO Mira Murati.
Fortune via Reuters

Former OpenAI CTO Mira Murati officially launched her new AI company, Thinking Machines Lab, Tuesday. Murati famously clashed with OpenAI CEO Sam Altman and was briefly named chief when Altman was ousted from the company before being reinstated.

The OpenAI diaspora, which also includes Anthropic CEO Dario Amodei and Ilya Sutskever, whose startup is reportedly heading toward a $30 billion valuation, has added immense firepower to the AI arms race. Add competition from Chinese company DeepSeek, which continues to publish cutting-edge research, and the battlefield is starting to look very crowded.

This all may mean that AI capabilities accelerate faster than anyone anticipated. Yet, there are only so many resources to go around (dollars, GPUs, and gigawatts of energy.) So far, those constraints have done little to slow everyone down.

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Grok Launch
xAI and Grok logos are seen in this illustration taken, February 16, 2025.
Dado Ruvic/Illustration/Reuters

Newly released model Grok 3 — from Elon Musk’s xAI — was widely seen as state-of-the-art after a couple days of benchmarks and testing, though it probably doesn’t beat OpenAI’s most advanced model on key tests.

While AI benchmarks should be taken with a grain of salt, the important takeaway is xAI’s trajectory. In less than two years since the company was founded, xAI has become the world’s largest compute cluster and has produced an AI model on par with some of the best in the industry.

The full suite of Grok models will reportedly be available through a new premium subscription tier on X, Musk’s social media platform. Though Musk’s detractors are loath to admit, it’s an extraordinary feat in such a short period of time.

One advantage is that xAI is coming from behind rather than blazing its own path into uncharted territory. It’s nevertheless an important milestone. From here, the question is what is xAI’s path to surge ahead.

Musk needs to continue motivating his troops — an ability that has made him the most successful builder in the world. Another advantage could come from the synergies between the companies he owns. Tesla is building humanoid robots and autonomous cars. Those endeavors could help xAI by providing data and input on model architecture. And xAI’s massive compute power could lead to models that are useful to Tesla. Meanwhile, X is a pipeline to consumer sales and new data.

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Semafor Spotlight
A great read from Semafor Gulf.A Gecko Robotics product.
Courtesy of Gecko Robotics

Gecko Robotics — which develops devices and software to inspect and maintain critical infrastructure — plans to double its workforce and the number of robots deployed in the UAE to between 40 and 50 each, its CEO told Semafor’s Mohammed Sergie.

The Pittsburgh-based company, last valued at more than $600 million, is also preparing for a major funding round this year and exploring acquisitions as the robotics sector consolidates.

The company partnered in April with UAE oil and gas contractor Al Masaood Energy on a $30 million, multiyear contract to inspect and map ADNOC Gas facilities.

For more news and scoops from the fast-growing Gulf region, subscribe to Semafor’s Gulf newsletter. →

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