Hacked - LockBitSupp Revealed? + The Cheyenne Supercomputer Gets Sold For Parts + FTX Gives a Bunch of Money Back

Episode Date: May 16, 2024

A chatty chat episode in which we discuss one of the wildest cases of tech depreciation ever, the potential unmasking of the operator behind a massive ransomware operation, a twist in the FTX case, and a bunch of other tangents. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Scott, what's the worst piece of tech depreciation you have ever personally experienced? Oh my God. Great question. Like you bought a Nintendo GameCube for $199, but by the time you went to sell it at the GameStop at the mall, the guy would only give you $75 in store credit. I feel like game consoles oddly retain value. Not a GameStop, they don't. Not a game stop, they don't, but if you keep them for a long enough.

You hold on. You hold on. Let me think. Biggest piece of tech depreciation. And you really should have queued that question to me before, so I had an answer to this because I don't. I can't think of one. Keep you on your toes, my dude.

I got to think like laptops, just because, like, they get, they have reached such a pinnacle of pricing. Like, I remember there was that whole period where, like, laptops were super expensive. And then laptops became. like free like paper and then or not paper but like you know what I mean like they got really cheap like you're buying mac laptops for like a thousand dollars or less and now they're back to the thing where it's like oh I might get a new laptop and I go to the apple store and I like look at it and I price out

what I'd won it's like $5,400 and I'm like what the hell happened and then they depreciate and you'll sell it for half that yeah within like two years you're at half that like within four or five years they're essentially not usable like you and I both had Intel based math MacBooks, the previous MacBook pros. And like, I didn't even really want to sell that thing because it's, you know, it's such a problematic piece of technology. Like it just overheats and it spazons out and it's just not great. So it's like, I wouldn't, like, I've had friends be like, should I buy this?

It's a really good deal. I'm like, absolutely not. I wouldn't. Yeah, it took a real shit kicking on that computer too. Yeah. But luckily for both of us, the Cheyenne supercomputer has both of us beat. Built in 2016 and used. for years to run like climate prediction models and weather forecasting.

It was made up of 8,000 Intel Zion E52697 V4 processors, cost an estimated $25 million to build, and recently sold at auction off for parts for about $400,000. Wow. Tech depreciation is real and it is coming for our super computers and I want to talk about it. The fact that it had 313 terabytes of DDR4, 2,400 RAM, is like pretty impressive. But like, could you imagine if you were like a cybersecurity firm, you could buy this for a half a million dollars. Granted, it probably costs a half a million dollars in energy per year to run it, given the amount of chips that are in it.

But you could set up the world's most amazing password cracking service. like you would just throw a hash in and it would 313 terabytes like imagine the size of dictionary that you could hold an immediate access RAM you could you're just giving away good ideas here for free right now man i love this i love the idea of imagine there was just a software as a service you know run out of some country that doesn't have a lot of laws about this stuff where you could just like throw a password file into it or a hack database and just be like crack these codes here's the salt hit go and like two minutes later you have like 14,000 results I wonder how many computations per second this thing was capable of.

Speaking of software as a service for cyber criminals in different parts of the world, on this chatty chat episode of hacked, we're talking about the Cheyenne supercomputer. We're also talking about lockbit and the true identity of its creator behind this like $500 million crime spree having been revealed. We got to talk about that. I also want to talk about the fact that you're finally going to get your money back, Scott. I don't know. Because FDX is returning what they say is 98% of people's money.

I think they're actually returning 113% of people's money to 98% of the people, I think is what I read. That sounds more accurate. Some weird calculation where you're getting more back than you lost given gains, but it's only applying to 98% of the creditors, which I'm not sure why that is. But I'm sure there's a perfectly good reason for it. Yeah. In the intervening years, the value of those assets would have gone up and that is not what they're paying back. It's very interesting. We got a lot to cover in this one.

a massive rap battle turns into a story about AI and word is out AI gadgets like rabbit and humane pin are yes no I'm reading this right not very good you got a lot to talk about uh all that and more in this very chatty episode of act welcome back I'm bringing I'm bringing manic newscaster and this is my new uh personality and broadcast is like newscaster pacing but with none of the professional I love it I love it I don't think I've ever had any professionalism, so I think we'll balance each other perfectly. I don't know that I'm increasing it. It used to be much more dramatic storytelling, and now it's just like guy frantically

running down the road shouting about cybercrime. But you've got to evolve. You've got to grow, you know? I think the first thing we should do is given the responses to the last episode, the Hotline Hacked episode, I think we just got to give a plug to Hotline Hacked.com. If you've got cool stories that you want to throw at us, we might make into a podcast, fire it up. Hotlinehack.com. Yeah, those are incredibly fun to make. And since we drop that's, I think since we dropped the first one, more people realized it's a real thing.

We will talk about the stuff. And so they submitted more stories and the stories are just getting more and more interesting. The backlog of great stuff we have to talk about. Tunks goes, I'm looking at you like it keeps getting bigger and bigger. It's very exciting. And it's a lot of fun to talk about these stories. So keep it up. Hotlinehack.com. Do do. The next plug, I think, is an obvious one, given our great sponsor, Shopify. We should plug our store. Store.orgast.com. We recently added a crewneck and a children's shirt as per request from the patrons. So please, if you feel the need, and if you don't, whatever, check it out. Store.orgas.com. Might be something there you want to grab.

Go check it out. You can get a visor. You can get an enamel mug. There's good stuff in there. You can now get a crew neck sweatshirt. Mm. It's going to hit right. Which I think Jordan and I are both going to get. Yes. I am very excited for that. Next up, I think, you know, given those requests from the patrons, we should give a little

shout out to our patrons. You know, if you want to join our Patreon, we'd love it. But you don't have to. But if you do, we'd love it. Hackpodcast.com redirects to our Patreon. We've got a bunch of new patrons. This is true. Want to just give a really big shout out to one of our new patrons,

Smokione. Thank you so much. Leaving me with another great patron, Ificator. Ificator. Ificator. Pontificator. Maybe? Hard to say.

But you know who could say? Noeb. Thank you so much for your support, Noib. Totally. And Andrew Nealer. It means a lot. Yeah. Wach Sarah.

Thank you. Tofer. Tofer the gopher. Love it. Ruru Day. Thank you. Ruru Day. Made my day.

Hackle and Adam Bauer. Great. Love you both. Mark Stevenson, Matt Leon, thank you. Alex, I'm going to take this one too because it's local Vancouver Coffee Snobb. You and me both, my friend. You and me both. It's actually just you. You become a patron of us. Michael. Michael Antello. Thank you so much. Knox. Thank you so much. Thank you so much. You guys are great. Rob. Baking cheeseburger. Bacon cheeseburger, junior. Junior, please. Sir, bacon cheeseburger is my father. Zach Hansen, Lizzie, and Kould. Thank you all so much. And last but certainly not least, Paul Asadurian.

Thank you so much. Thank you so much. All it means the world to us. It really, like genuinely does. It really does. We keep making this show because people keep listening and keep commenting and keep just showing their support. It means a lot to us.

If you want to show your support, too, you can go hackpodcast.com redirects to our Patreon. We got the merch. we got the we got all the different things um support us however you would like to tell someone about the show like subscribe leave a comment whatever you can do it means the world let's get into it man let's let's get into some stories the the while we're just talking about things you can do and support the show i think the i went into our reviews the other day there's some pretty interesting ones um some very off-based ones like people did no context just complaining about the show but then there's a bunch of really amazing ones and i want to focus on the amazing ones and

I think that if you have time, we'd love it. If you could give us a review on one of the main podcast networks, that'd be great for us. So appreciate that. It has a huge impact. It helps the show a lot. We want to keep it going and we want to be able to spend time responding to your calls and bullshit about weird tech stories, but also doing more in-depth stuff and interviewing people and just taking it as far as we can.

Totally. Every little bit counts. So where do we want to start? I kind of feel. a great question. Like your final tidbit there about the humane pin and the rabbit is a great place to start. Yeah. I mean,

I don't really have a ton prepared about that. That was more of just sort of a drive-by-shot-fire type situation. Caught astray. Because it feels like half the internet is just following Marquez Brownlee as he assassinations companies for not being very good, which isn't really an influencer taking down a bad company. It's a bad company getting revealed as such, which is not to say either of those are bad companies,

just that first-generation AI products have a very weird question to answer, which is, why aren't they just apps on my phone? Well, it turns what they are actually, just apps on your phone. I know the rabbit came out that it's literally just an APK installed on an embedded Android device, which, you know, in reality, like Jordan and I had this conversation offline when this got released. And I was like, it makes total sense. Like, you know, getting a small piece of hardware built that runs an embedded version

of Android that comes with the development environment and, you know, all of the infrastructure that comes along with being an Android device. It's like it would be, you'd be hard pressed to want to build a device now that's not based off of something like an Android OS because it just comes with so much stuff for free. Like, why wouldn't you do it? So it, no surprise to me, but they literally could just be apps on your phone. But the interesting thing to me is, you know, you talk about all that utility that's just already built into Android, why would you start from scratch? The thing I find fascinating about, I think it's specifically the rabbit, is that by building this sort of large, I think they call it the large action model, and it's essentially meant to be

an AI model that's capable of interacting with websites on your behalf, is that by mediating the entire computing experience through that model, through that voice chat, they've actually removed a bunch of the stuff that Android can do built in. Android knows your GPS location. It can figure out what time it is where you are. I can figure out how far away you are from something based on that. And this lamb interface that they've cooked up doesn't seem to be capable of interacting with any of that stuff on the Android back end.

So you are using a device that knows where you are, but will not tell you where you are, that knows what time it is where you are, but may not get that very basic utility. correct. It's this weird transitional state where like we know that being able to talk to these assistants and have them do more of your computing for you is probably where this AI thing goes. Is the computer getting better at talking back to you? But before we can get to that, we have to remove a bunch of the utility that's there and catch back on. Well, the humane pin is the one that has the weird little projector, right? That's the one that projects under your hand.

Yeah. Yeah. That's right. Yeah. It's like I don't like neither of these products when I saw them release spoke to me at all. Like I'm the guy who doesn't like smart watches. I don't want more notifications in my life. I don't want an AI assistant clip to my thing that I have to project under my hand,

basic pixelated data. Like I have a phone. I'm happy with my handheld supercomputer network connected supercomputer. Mm-hmm. So I'm not the market for these, but I think that they've been an, interesting run in industrial design. Like, I think there's a really interesting. Oh, heck yeah. Interesting. Yeah, element of like what could some of these things look like and, you know, teenage engineering I know did rabbit, right? And it's like, you know, kind of groups that I've

been aware of and followed for a long time and they're kind of like dipping into this new tech world. You know, they've gone from synthesizers to to AI assistance. And it's, I think there's going to be a really cool exercise for, for industrial designers to look at how to make these things more usable and make them more functional. So I think there's that positive coming out of it. 100%. The rabbit is cool looking. I'm not sure that it seems to have a lot of basic like UI, U.I, UX type problems. It has a touchscreen that you can't touch. You got to use the little scroll wheel type thing. And it is on the right hand side of the device. So if you're left handed, you can kick rocks. But it's a cool looking device. Teenage engineering is great in industrial design.

The humane pin is like a gorgeous little device, the clip on magnet on the back that holds it in place. It's all very cool. But the problem is both of them are they need to tell this story about how they're what comes after the phone. Because otherwise you can't raise the amount of capital necessary to get a product like this off the ground. Which means if you make it an accessory for the phone, the whole thing falls apart, which sucks because these things want to be phone accessories. If the humane AI pin was just a camera. a microphone and a projector. They connected to your phone.

All the processing still happened on your phone, but you just had this little thing you could tap and interact with. Honestly, would work pretty well. But, like, I'll contrast it with, why wouldn't I just get a pair of smart glasses at that point?

Like, those things are making large strides. Why indeed? And, you know, from Google Glass, like I read an article the other day that was Google Glass was ahead of its time, and I agree with it.

Like, now we're in that world where it's like, I want to be looking at something. I want my phone to know what I'm looking at. I want to be able to ask a question about what I'm looking at and my phone to tell me the answer. Whether it's AR into the glass or whether it's speaking it into my ear, like those are the,

that's the little bridge that I think we're crossing to making these things truly connected functional devices. Like if I'm like, hey, what kind of car is that? And it's like, that's a 1973 Lotus, blah, blah, blah. I'm like, oh, cool. Thanks. That's neat. Yeah, cool.

That's great. I'm not going to steal this idea and present it as my own. It was the verge, I think, who cooked this idea up. But it's that it's starting to feel like earbuds might be the ultimate AI device. What that is is a device that lets you interact with your phone just by talking, lets you receive information just by listening, but without everyone else having to hear it because it's playing over a speaker. But that still relegates all of the processing, all of the computation, the device that is extremely mature and capable of running these models as well as a standalone

device would. Like to me that, uh, ear pods, a pair of sunglasses, things that are already part of your life that you carry around for another reason already make way more sense to me than like, what if you had another thing that's basically a phone,

but that isn't your phone, but that runs a phone app that could run on your phone. I struggle to see the sales pitch, except for we had teenage engineering do the ID and it's very fun looking. Totally. I think there's going to be, you know, I think we're in the incremental evolution phase. We're trying to figure this stuff out. As the AM models get better, our interactions with them will get better. And I think that that's going to be an exciting development for mankind. I'm not sure if you followed it, but Apple had their quarterly financial results the other day.

Big news if you're in finance. Not so big if you're not. they did their iPad event, which was probably much more consumer side. But one of the big things that came out of their quarterly results in their investor phone call was that they're spending a ton of time and money on AI and on like creating an Apple ecosystem and integrating it within their devices, which is going to be probably a huge change, just given how much market share their devices hold, be it their computers, iPads, iPhones. you know, maybe it won't all be vision pros as that's kind of had a lukewarm response. But I think that, but having somebody in a group that's as good with interaction as Apple is,

taking this on is going to be a big game changer. Dubdub is going to be real fascinating this year. I think it's going to be fascinating for AI. It's going to be fascinating for justifying why they sell a $3,000 iPad that is functionally a MacBook, but is running a phone operating system. Like, there's just a lot of questions they need to answer. And I say this as a person, like, I'm recording this on an Apple device right now. Love their stuff.

But there's, I'm very curious for Dubdub this year. I think that's going to have a, that should have a bigger impact on, on their share price than a new iPad hardware announcement of it. I'm like, we take a little digression here in a consumer electronics, but like the new iPad, the iPad pro with an M4 chip that you can't even get in a laptop. I don't even care what the price is, but here's the thing that bothers me is like, where is the accessory Thunderbolt port? Because you've essentially made me a computer. It comes with a metal touchpad keyboard that you can buy as an accessory to make it into a functional laptop. And iOS is just a skin on like essentially a similar core Unix infrastructure as OSX.

So why can't I toggle between laptop mode and tablet mode depending on what I'm doing? Like you have the ability to do this and I'm blown away that you can't. Yeah. Can't. I'm shocked by it. I think, I mean, the reason, the previously obvious reason why that was the case has been complicated recently by antitrust cases in Europe. And the reason to keep that siloed is because the only software you could install on the iPad

was software that you downloaded through the app store. And that offers a great deal of control, economic and ecosystem to Apple about what is run on those devices. It's great for them. If everyone's shifted over to buying those from Mac, long term, it would be probably pretty good for Apple. The problem is that that control is starting to get eroded. We have laws and giant jurisdiction saying you have to be able to run other app stores. You have to be able to install your own stuff. And increasingly, the question of like, well, why not then just let me run MacOS on this thing. It's literally the new one is more powerful than my MacBow has a better processor in it. Like, just let me run Mac OS.

OS on this, I could do my job on something like this. I would pick it up in a heartbeat over a MacBook because it's a MacBook that comes apart and turns into an iPad. How cool is that? But until I can do that, it's kind of just a non-starter for me. And you know the best thing in classic Apple fashion? Do you know who's proved the business case for this device? Microsoft. The Microsoft Service Pro has been out for ever. People have totally adopted it and people love their services. I think the services are great. You get the tablet and you also get a laptop. When this announcement came out,

I was like, oh my God, this is going to be great. Look at how great these devices are. They've got a dockable keyboard that has a touchpad, which is a huge thing for me. Like the second they put the touchpad on the keyboard, I was like, they made a laptop. Yeah. It's no longer a touch-only device.

And I was like, I was trying to dig up photos in the early moments of the announcement to see the keyboard because I expected there to be USB ports on it. And there's only one, which has, charging pass through and I was like you've got to be kidding me. They've made essentially a $3,000 laptop that is also a tablet that has no like extensibility really without a ton of dongles or plugging in a dock to it. And I was like, that's crazy. It's crazy to me. It's beautiful, but it's crazy. It's a gorgeous piece of hardware. It is the vision of the tiny MacBook with one

USB port. It's Johnny Ives, too, vision, come back to life again. Curious to see where it goes. but the only way I'd be able to afford it is if I get my FTX money back, which transitions us nicely to the story, the continuing Sega of FTX. I think we take it over there now. For anyone that doesn't know, it would be odd, but FDX was the third largest cryptocurrency exchange in the world when it filed for bankruptcy protection in,

it was 22 November, after experienced basically the equivalent of a bank run following some news about its CEO and founder Sam Bankman Freed. He resigns when the exchange collapsed in March he sentenced to a 25-year prison term for the massive fraud that occurred at the company. The whole thing fell apart. It became a public symbol of collapse of cryptocurrency and greed in that industry. And it was recently announced that nearly all former customers of FTX will recover almost 100% or more of their loss funds from the collapse of the exchange. Which is great news.

Fantastic news. It's good. For as much as we sometimes dunk on elements of the cryptocurrency ecosystem, it's never good when, you know, investors get their shit stolen, and it's always good when they get their shit back. So I'm very happy to hear about this. So I haven't done the review. We were trying to get another author of a different book on, still kind of pending. But Going Infinite, Michael Lewis's book, one of the last chapters that really agitated the shit out of me, truthfully, is he kind of makes this case that, like, they're, like, even though Sam Bankman-Fried was spending clients money, you know, taking money out of people's accounts and essentially investing it in other things, which is

wildly unethical and deserving of a massive just, like, prison sentence, that, like, the money's kind of there and, like, made up tokens that they, they've manipulated the market value of and like investments in other companies like they held a i think 500 million dollars in anthropic an AI company sandbankman free to ed seeded anyway this whole chapter where he kind of goes on about like well you know it's did he really commit that bigger crime like the people's money could still be there in these tokens that they've made and all these investments and stuff and it's like well he still committed the crime because he never had those that money to invest in the first place so yes uh i'm just

very glad that people are going to get some of their stuff back. Like, as much as I don't love crypto, which you might have heard, I don't like financial fraud way more. And I'm happy that, like, people that had big chunks of money tied up in this company, you're going to see some of it. Yeah, that argument that lying to people is okay if it happens to all work out is, I don't personally believe that. I think that you're sort of just relying on luck at that point.

It's looking like the total assets they're going to be returned or somewhere between $14.5 and $16.5 billion. And as you said, it's where they get this money is a very fascinating question. NFTs to the rescue, apparently, because there's still a lot of value in the company, tied up in some of other crypto assets, wind down cash proceeds. They're just, they're selling it all off. And the plan was submitted and falling into the Delaware bankruptcy court. The CEO who is brought on to do this, a lot of people talked about this.

It's a guy named John J. Ray 3rd. Great name. He's the CEO and chief restructuring officer. And he expressed this plan to, you know, return the full bankruptcy claim amount plus interest for non-governmental creditors and, you know, just trying to get as much money to people back, not including what would have been the growth in the assets had the money been there in the first place. He was appointed the new CEO. he's this longtime bankruptcy litigator. And his sort of claim to fame was that he was known for having cleaned up the mess after the collapse of Enron. So it's a very, it's fascinating that he was the dude who was brought in.

I know the, I think the anthropic investment alone, they sold for $884 million, I think. So that's got to be what, like a 38, 40 percent return. Pretty good. No, it'd be more than that. $500 million to $8.88, be like 60-some percent. It's pretty good. Yeah. I was quote, we are pleased to be in a position to propose a Chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors.

It's an interesting situation. It's, I would have loved, I would love to know more about what that process was of trying to clean up a mess of this scale to try and find every single penny that's hidden under every single cushion of every single couch that this company has across a giant portfolio of companies and sub-companies that was, I think, intentionally obfuscated by. Sam Bankman-Fried. This was not an easy company to understand. We have spent a lot of time trying to understand it, and I would love to know what that journey to find that money looked like. But it's great news that it has been found. Well, the more you, like the more I dive into this story and the more of the books that I've read, like number go up by Zeke Fox, highly recommended. Hopefully we'll see them on the pod soon. Great, great book. Go through in detail a lot of the like the little pieces of it in the aftermath about just the chaos that was left because they were apparently

worse at accounting than they were at not committing fraud. There's very poor accounting records. Worse at accounting than not committing fraud. Yeah, yeah. And it's a mess. Like even the people that worked and ran the company didn't even know where the money was and what they held assets in. investments in. There was no, no organization to it. And I can only imagine how much of a nightmare

this has been for this group. So the fact that, the fact that they found enough to get people back their initial investments and a bit more is amazing. Happy, happy to hear. Happy to hear. Well, it's not quite a $15 billion, I shouldn't call it a crime spree, but it's not quite $15 billion in damage, but it's probably worth talking about a little character called LockBits Up and a $500 million hacking spree and a recent discovery. Tell me about this discovery. Let's pivot. Let's go over here for a little bit. So for the long time, there was this character on the internet called LockBits Up.

He was essentially the alleged operator behind the LockBit Ransomware Group. Ransomware as a service, $500 million hacking spree. A big character in the ransomware as a service ecosystem. And recently, law enforcement in the U.S. UK and Australia have identified Russian national Dmitri Yurya Juryachev Korochev as the alleged operator behind the group. They figured out who lockbits up is. It's a fascinating story. There was a task force named Operation Kronos, led by UK's national crime agency, that operated

and infiltrated lockbitt systems, made a bunch of arrests, sea servers, disrupted the group's activities. I think I love about this is just an aside. The law enforcement names for all of this are always like that. They're always like Operation Cronos, the Romulus Initiative. It's that kind of shit. Titan. Project, Titan. And then the gang they're taking down is always like, the bloop, boys.

It's never not funny. It's always good. Like the hackers always have a very funny name. And then the task force that takes them down always sounds like it's like a Zach Snyder movie. rules. I love it every time. You know, it's not funny, though, is that the damage from this group is like in the billions. Oh, catastrophic. It's really bad. Catastrophic. It's really, really bad. So yeah, and it's allegedly the guy behind it, Koreshav, 31 years old, sanctioned by the US, UK and Australia, faces a US indictment with 26 counts including conspiracy to commit fraud, extortion,

and hacking with potential penalties totaling 185 years in prison. He's a, He's a fascinating character. The group targeted a bunch of different entities, Boeing, Royal Mail. They often published stolen data if ransoms weren't paid. It wasn't paid. Yeah. They've been operating this thing since 2019. And they licensed malware to affiliates who then carried out the attacks with lock bit

retaining about 20% of the profits. So they made some real bank doing this. So here's a great pivot to us making bank is the USDA Department is giving a $10 million or reward for any information leading to their arrest. So retirement plan, Jordan. I think you and I need to find, have a doc, the docu series finding lock bit sub and just get to it. We're going to go to rush and you'll never hear from us again. Our new true, yeah, exactly.

Our new true crime podcast. Honestly, it's a pretty, it is a pretty fascinating story. On the flip side of that, it's not the only direction that money. was being paid. LockBitsup has also offered bounties, like essentially offering money for people to try and reveal who he is. Bug bounties for flaws in lockbitt's code. It's really funny that this ransomware service has offered bug bounties. I think he made an offer to pay anyone that got the lock bit logo tattooed on them with about 20 people participating. Lock bit sup is like a character. He's not just the operator of this massive crime issues. He's an internet personality. There's this

longstanding tension between Korsh. private business-like demeanor whenever he's been operating this and is more flamboyant, almost like super villainy persona whenever he's speaking in public. He's just an interesting, interesting guy. And I'm curious to see what's going to happen with all of this. And if you want to find out too, tune into our new show coming soon. The LockBit Ransomware Group after Khorashev was arrested announced another. They love contests.

There's a whole thing about contests. And it's obviously, you know, trying to argue that Dimitri is not lock bit sup. And they're offering $1,000 if anyone can get a hold of Demetri Koreshav to see if he's alive and well. Like they're playing this weird kind of chess game trying to see, see maybe information, maybe misinformation. It's unclear, but a bunch of government sure do seem to think that lock bits up is Koreshav. And we're fascinated to see where it all goes on our new show. our third show within a show within a show. Find a Koroshev.

Hey, J.B. here from the future. After we recorded this, a little bit more news broke. The excellent show Click Here posted an episode with a short interview of who they claim is LockBits Up, saying, quote, the FBI got it wrong. The person in the interview claims he's not the guy law enforcement has gone. He claims he is not Koroshev. This lockbiz up claims he's still out. out there. We won't have had a chance to reach out to click here before this goes live to kind of find out about the reporting process, but I just wanted to include that because if you've

got 11 minutes, go check it out. Okay, free plug for a different show done. Back to our episode. So the, uh, speaking of cybercrime, um, in Jordan's home, uh, British Columbia, Canada, there is a small, very well-known regionally, but very regional operator called London Drugs. London Drugs. And they are a pretty amazing shop. I got to say I have, and still do, love London Drugs. You can buy pretty much anything Mac there. They have a whole Apple store inside of it pretty much.

I have a huge computer TV section where you can buy streaming devices. You can buy like vinyl records. You can buy new TV. You can get your prescription filled. you can buy candy that's been imported from other parts of the world. They kind of have everything. And that's why this episode is brought to you by London Drugs. I can't stop speaking my love for London drugs.

I just can't say enough good things about this company. My life would be worse if Lenin Drugs didn't exist. And briefly it didn't. It is worth saying London Drugs is an odd grocery store because it's what it is. It's like, it's a, it's a pharmacy grocery store that also has like a photo department and you can buy a PS5 there. Like it's just a, it's an interesting store. It's a kind of buy everything store. And if you need bar stools, they got those too.

I bought some bar stools there. I didn't really like them that much. I know you did. Actually true. And it was recently attacked. All 79 London drug stores across the country were shut for over a week, leaving customers with a pretty tough time accessing prescriptions and other medical needs. it's uh the stores were closed it was a fascinating thing i went to one stood outside staring in trying trying to get my my meta quest two or whatever piece of consumer electronics i needed to purchase

alongside my my oat milk and uh they wouldn't let you in couldn't get inside because they'd been shut down by a ransomware attack yeah so they're a contingency plan from well was it ransomware did they come on say it was ransomware oh i thought it was ransomware i might not be no i don't think so they've released very little details as to what it was i think it was a breach like a full-blown breach is the best I know. So because it is a pharmacy, they have people's personal information and medical records and things like that.

Their contingency was that when they realized the breach, they literally took the entire store, 79 locations offline, locked the doors and put signs on the thing, on the front door being like, sorry, we have been the victim of a cybercrime and we are currently investigating, and until further notice, we are closed.

So they were shut for what? like easily a week. I don't know the exact number of days. I think it was around a week. I don't know if it was eight days, seven days, nine days. But for about a week, you couldn't, I know I shop at a London drug because it was closed. It was, yeah, it's a fascinating. There's a win and a loss here.

It's like on one hand, I actually think the idea of like unplug the stores is probably kind of a good idea, depending on the level of the breach, like to just literally say, we're not trying to cover this up. We're willing to acknowledge. something very, very bad has happened here and we're shutting down the stores. That to me is kind of a win. I think the amount to which they have communicated about this is a little bit more of a loss because if you go digging around incredibly niche cybercrime in Canada communities, the speculation is just frantic. And I think a lot of people just seeing basic news coverage about it

are quite worried about what was or wasn't released acquired by these hackers, however you want to think about it. I know they've come out and said that there's been no evidence that customer data was taken. I think that was their big control point, as they wanted to make sure that, like, if there was a breach and customer information was touched, that they didn't acquire more customer information. I don't know. I'm pretty sure that's probably a big part of the shutdown was they literally pulled the plug and said, let's see how bad this was. And then once they had it opened, so they've reopened. I was in one the other day. They're on, they don't have all of their systems back online. So I was chatting with one of the people at the Till and they were like,

yeah, we're still, we're operating, but we're kind of not. Like, there's still, lots of their data systems were still, you know, removed and they weren't able to access them. So I think they're still doing forensics on this and trying to figure out exactly what has happened. So I can understand a bit of their locked lips because I'd still think they're probably trying to figure out what had happened. So, well, let's, both kick it over to London drugs and spend some of the money we're about to earn reading these here ads on bar stools. They randomly rise up when you're sitting on them even though you haven't pulled the lever and then get you stuck underneath the bar in your last apartment with

your knees underneath the bar, but the seat still pushing you up. Let's go buy some of those at the London drugs and then come back and keep talking. Think about the last time you heard a breach story on this show. It always starts the same way. Someone somewhere, saw something too late, an alert buried, a signal missed, an SOC that just couldn't keep up. Arctic Wolf set out to solve that problem by rebuilding security operations from the ground up for a world where attackers are already using AI. They created the Aurora superintelligence platform, a fully agenic system powered by the swarm of experts. Instead of single-purpose bots or lucky-guess LLMs, this swarm is full of deterministic agents that handle whole entire workflows.

Humans stay in the loop and on the loop to validate the critical decisions and keep everything trustworthy. And all of this is just off running on their secure operations graph. A constantly updating intelligence engine fueled by more than 9 trillion telemetry events every week and over a decade of real-world incident response. The system reasons on real signals and real context not synthetic training data. And the result is the new Aurora agent SOC. It's the first SCC that is agent led by design. You get agents that coordinate, agents that investigate, agents that respond at machines.

speed and hundreds more that automate the repetitive work that normally buries human analysts. Arctic Wolf didn't try and bolt AI onto an old model. They rebuilt the model entirely. What makes it even more effective is how it works with Arctic Wolf's concierge experience. The team brings customer-specific context directly into the platform so every AI-driven decision reflects your environment instead of generic assumptions. The automation frees your concierge security team to focus on higher value strategy and proactive risk reductions. while the agents handle the grind. If you want to see what trustworthy, production-ready AI and security operations actually looks like,

go to arcticwolf.com slash hacked. Never feel like cyber threats are evolving faster than anyone can keep up? Last year, 2025 was nothing short of a record-breaking year for major breaches, from sophisticated ransomware operators to AI-enabled attacks that turned defenses on their head. Organizations around the world saw headlines they never expected than cybersecurity teams were tested like never before. But here's the thing. These incidents aren't just news headlines.

They're learning opportunities. And that's why Arctic Wolf is hosting a live webinar on February 5th, diving into the most impactful breaches of 2025. Their field CTO and security leaders are going to unpack not just what happened, but why these attacks succeeded. And most importantly, what businesses can do to fortify their defenses for it's too late. You're going to walk away with real insights into how threat actors are evolving, how defenders are responding,

and what strategies can help you stay ahead of the next big breach. It's not fearmongering. It's practical, actionable, intelligence from experts in the trenches. Register now at arcticwolf.com slash hacked. And we're back. And we're back. Where to now? This is very brief.

I don't think we, I want to get to the Cheyenne computer before we go. But I'm not sure if you've been following the emerging conflicts between two of our great cultural institutions, Kendrick Lamar and Drake. But that story briefly touched on AI and copyright two things that we really like to talk about on this show. When Drake released a track called Taylor Made Freestyle that featured an AI-generated voice mimicking the late rapper, Tupac. You follow this?

I did. I did. It was hard to ignore. Hard to ignore. It was hard to miss. It was hard to miss. Especially with the recent shooting at Drake's house in Toronto. Yeah.

It's making real. news now. It's making real, real news. It was a, yeah, it's a, it's a, it's a rap battle from a, from a bygone age, uh, in the middle of this big back and forth, which we're not going to get into. This is not a pop culture music show, but two very famous musicians are having a rap battle. It accelerates. It gets very uncomfortable for everyone involved. But in the middle of it, uh, Drake releases a song called Taylor Made Freestyle. It features this Tupac, uh, you know, AI generated voice and the Shakur estate. issues a legal threat, getting Drake to remove the track. The state's lawyer Howard King raises

issues regarding personality rights and copyright infringement. And I just, I wanted to talk about this because I find it fascinating. There's two things at play here. There's personality rights. The estate controls the distinctive style and public likeness of Tupac making unauthorized use straightforward to challenge. But then there's also the copyright element of it, which is really fascinating in AI cases. It's more complex. And it involves Tupac's recordings and songs. And the main legal question here is the permissibility of using AI to replicate Tupac's style, which invariably involves copying from his original works. In order to replicate Tupac's voice effectively, the AI must access and create copies of those

recordings. This act itself could constitute copyright infringement, which carries severe penalties of up to $150,000, $150,000 per work, which, depending on the number of Tupac tracks, were used to process and create the model, could total significant amounts, pretty big money on the line here. And it raises this really interesting question. Every time we get a new piece of technology, digital technology has to create copies of things to function. And that puts it at odds with copyright law. When we got VHS cassette tapes, we had to go through a court process of figuring out, you know, what's legal with this? Is it, is creating a copy of the cassette tape legal? Is the cassette tape pushing it to the television,

kind of creating a copy. It's all ambiguous when we got computers. The exact same thing happened. Computers create copies of files all the time. It's all very blurry what is and isn't an allowed use. And we're kind of going through that right now with AI. Trying to figure out, are these copies? Is it interpretations?

What's going on here? And it was fascinating to see that come up in the context of a rap battle. The thing that I also enjoyed about this is that Drake, I was going to say the victim, but I don't know how else you'd describe it, but somebody had made a fake Drake song that got super popular. Ghostwriter released hard on my sleeve.

And it was Drake in the weekend. And he was one of the first people to be targeted by this use of technology and didn't like it very much and was pretty vocal about it on the internet. And now he's using it himself in a scrap with another rapper.

I think it's, I don't know, circle goes around. It's interesting. Yeah, it's a really good point. I'd completely forgotten about that. That was one of the first big viral AI tracks was Drake, and I think you're right, he wasn't too fond of it. That's interesting.

I would say that I haven't heard any other viral AI tracks since that, have you? Like, is there an AI? I listened to the Taylor Made Freestyle one. I was kind of following this. It was happening over the weekend, and we were hanging out with a group of friends, one of whom also likes hip hop. and so her and I were talking about it quite a bit.

So I was, I caught the Drake track. Before we move on to, I think probably the last thing that I want to talk about, which is the story that we started the episode with. It's not a lot to it. It's just fascinating to me. It is the Cheyenne supercomputer. And again, one of the gnarliest cases of tech depreciation I think I've ever heard. So the Cheyenne supercomputer was installed at the NCR Wyoming Supercomputer Center

during the second half of 2016. It was originally used for climate modeling. Weather and climate research. It supported the National Science Foundation and other scientific endeavors across Wyoming and nationwide. It was like a big story when they built this. It was like a Heartland America supercomputer. And it was sort of bleeding edge at the time back in 2016.

I've got the numbers up in front of me. 8,064 Intel Zon E5-2697V4 processors, each with 18 cores and 366. threads at 2.3 gigahertz valued about 50 bucks each on time of recording on eBay. That's not what they cost when it was built. And a bunch of storage that was not included in the sale. And this massive, massive supercomputer goes up for auction. The auction itself becomes a story. 27 bidders, it was covered at length by a bunch of different folks. Tom Hardware, Tom's hardware's coverage was really, really good. They were following it very closely. So that's who I was reading as it

went. And it was sold off at auction for about $400,000. Reasonable. Reasonable. Really? Honestly reasonable. Yeah. I saw an estimate that the potential resale value of the processors in RAM, which is what they bought, could reach about $700,000 if all of the components function properly. That is a big if. There were issues at the site. I think there was like water leakage and stuff. It's not totally clear how good a shape this is all in. But it is like the

most extreme version of, what are those shows where you buy an old storage locker and hope that there's like gold in it or something? Storage wars. Storage wars. Yeah. It's like the most extreme version of storage wars I've ever seen where it's like, we're going to spend $400,000 because if the stuff inside this storage locker is good, we could get up to $700,000 for it. Like your habit, here's the other thing is like, what kind of market is there? What kind of client demand is there for 8,064 antiquated processors. eBay. Like, sure, you could say that they're each worth X dollars and you could talk about

how you're going to make money from this, but like actually finding a market. Like, I could understand somebody wanting to buy a budget supercomputer. Like, even though it's antiquated for today's date, the amount of sheer processing power it has to kind of rebuild with modern technology would probably still cost more than $480,000. So like you could at least buy a budget supercomputer. Like if you were in the market for needing, I don't know, say a massive password cracking device or a, you know, insert chess algorithm AI, you know, this is a pretty good deal. You know, takes you from zero to, you know, 75% for a reasonable amount of money.

It's not 25 million. Yeah. It really reads like they're, I don't get the sense they're going to try and do anything with this. I get the sense they're going to sell it off for parts. And part of what makes me think that is that part of the terms of the sale is that the buyer must handle the removal of Cheyenne's 30 server racks, which include 28 processing racks, two air cold management racks. They will receive no logistical support from the government. And the sale did not include Ethernet or Optical Cabling required for operation. It really feels like it's, we just want this space back.

So if you can get the shit out, we'll sell it to you for $400,000. like it really feels like it's like it is a scrap to us at this point but you're right it one man's trash you know it you could probably do something pretty interesting with this yeah yeah like if each chip has 18 cores that means that you have 145,152 cores and if each of those cores is capable of a thread 32 threads you'd have 258,048,48 threads which is a lot like you know I'm sitting here on a... Sure. I've got a big PC tower next to me,

and it's got 32 threads. Like, imagine what 258,000 threads is like. Like, my... I don't know. I'm sad that they're disassembling it and scrapping it. I feel like there was... Totally. There was a cool second home and second use there

for, like, one of the world's big super computers. This is an aside. I was following recently a story about increased... So we're going to need a lot more server. like AI is going to create up. For however much we have, for however huge industry that is, it's going to go through the freaking roof.

And that alone is interesting because it is increasing demand on an already incredibly demanded product. We talked about this in the last hotline hacked. But the thing I find fascinating is a bunch of really big tech companies have suddenly started investing in nuclear energy projects because of

just starting to do base. forecasting of like the sheer amount of energy that we are going to consume bringing this product to life. Getting this into everyone hands, it's going to consume an obscene amount of money. And nuclear might be really the most immediate option for, you know, a renewable energy source that could provide the energy needed for AI. Yeah. There's a whole investor prospectus about this stuff going on in the investment communities around data center growth. and what AI means to processing and how much power and more data centers we're going to need. But a lot of the big tech companies and a lot of the governmental initiatives to reduce carbon output.

You know, obviously in the past, power has equaled carbon. You know, you want more power to make more carbon. So there's this massive undertakings to try and figure out, okay, we're if we're going in this direction where we're going to like, you know, stick goes up on the power use. how are we going to fulfill that without making carbon same stick goes up? Like we can't burn more coal. China is burning more coal. But like North America, I think, and a lot of the developed, more developed countries, not that China's not developed, are looking at ways to really ramp this up.

So yeah, that doesn't surprise me at all. I think that they smell a PR crisis. Yeah. And it's that these tools, at a certain point, the excitement about what they could become wears off, the growth slows. And it becomes a question of is what, we're getting out of these tools worth the frankly catastrophic energy consumption levels that are required to do it. And I think that what they're trying to do is create a, a little bit of a starting

to build the case for, no, no, no, we're not consuming energy that was going to, we've got our own energy. We're making our own clean energy. You don't need to worry about it. We're not contributing to the problem. I'm not sure that on a global carbon footprint level, that argument holds water. but I think it is the argument that is attempting to be constructed, is that we're creating our own energy for this. I just, I find it fascinating. It was quite the rapt hole to go down.

I am curious to hear more about the investor perspective side of it, though. Hey, you say that about PR nightmare. Yeah. But here we sit like 16 years in and Bitcoin's still cruising along. Yeah. Turning power into the utility that Bitcoin brings society. All that utility. I mean,

if Bitcoin was that sucks too I guess is what I'm trying to say it's like no that one's bad as well like I don't like that one at all um but you know Google doesn't own it right like these massive public traded companies that do have to answer to someone at some point on some board or some shareholder it's uh and I'm curious actually what the global global emissions of crypto versus the global emissions of AI are at currently and the point at which those two lines intersect and one becomes greater than the other. I think that's actually, now that you mentioned it, a really, really interesting question. Mm-hmm. A 2020, 2022, non-peer reviewed commentary published by Jolie,

estimated that Bitcoin mining resulted in annual carbon emission of 65 MTs of CO2, representing approximately 0.2% of global emissions. That was crypto. Which is comparable to the level of the emissions for the entire country of Greece. So yes. Wow. It wasn't on peer-reviewed, so like- Sure, sure, grain of salt, but it is fascinating.

Green of salt. Yeah. That might be one worth digging into more on our third show within a show announced this episode, carbon emissions of wacky tech ideas. Let's keep going down this one. I love this stuff. talk about, we haven't talked about crypto forever. Since, since a good 25 minutes ago.

Bitcoin mining, a UN report suggests that Bitcoin mining has admitted approximately 86 MTs of CO2 during the 2020 to 2021 period. So that is about, that's 50% higher than the last number, give or take. 60 to 86. So like, yeah, so a grease and a half, Greece and a half. grease and a half. A crease and a bit. You're going to need to start building some nuclear reactors if people are going to have a problem. And if you don't, we're all collectively going to continue having a very big problem. It's interesting.

It's really fascinating. So as long as AI produces more utility for society than crypto, I think people will be cool with it. Yeah, but if I could bully crypto companies into building nuclear reactors so they're not using the same energy, like pulling from the same grid that I am, I would do that. If I thought I could, I would. But I don't think I can. So I'm a pivot. Go over here. Try to bully these companies.

Well, I think it's going to be, like as we electrify the, like we're going way off topic now. But as we electrify the grid and the demands on the grid are becoming more and more so. Yeah. So we look to use electric heat. You live in Vancouver, the home of the heat pump. And the, as we go down that electrification thing and as we introduce more non-consistent and renewables to the grid, I think those data companies have to be looking at ways

to make sure that their services are providing on a consistent basis because it just, I think wind and solar and battery technology is just not where it needs to be for us to use it as an actual storage device for that scale. So there's a, I think they have to. Like nuclear seems like it's going to be one of the only things that they can really truly get into that would check all the boxes

as long as it doesn't, you know, cause greater harm. Yeah, I'm of the Let a Thousand Flowers Bloom approach when it comes to renew. Man, we're off topic. But when it comes to renewable energy, I don't. I'm agnostic. If you can produce a megawatt of energy with as little emissions as possible, go at it. You want to do geothermal, fantastic. You want to do baseload nuclear.

That's cool. You want to rig up some crazy, we push water up a mountain and let gravity bring it back down to turn turbines. Like, go for it. I think it's cool tech. I think it's necessary tech. I say try it all. Totally. Totally. Just like rabbit and the humane pin.

Try it all. Try it all. Maybe you have teenage engineering design it. Yo, teenage engineering solar panels for your house. Get on it. They would move some units. Could you imagine? They would move units.

They would move none. They would be so, like listen, this is no criticism of teenage engineering. I love you. But your products are very expensive and built for a very boutique group of people. Yeah. Not utility grade stuff where I'm looking to save money on my power bill or like, you know, produce a little bit less carbon.

And yet I see that little OP1 synthesizer. There's an interesting overlap of people that love that company. And I love the way their stuff looks. But and then people that love to spend compulsively large amounts of money on a weird thing that no one really needs, but God, you just want to have it sitting on the shelf. Yeah. Like the OP1 synthesizer of solar panels is not a good idea, but it might be a great idea. Just all these physical knobs and switches and like bright primary colors.

It's bright yellow. Like, no one needs. What does this do? You're like, I don't know. I need it. Why do I want it? Okay. I think that's it.

We're off the, we're off the rails. Thanks for listening. Thanks for making it to the end. If you want to share a cool story with us, go to hotlinehacked.com. If you want to support the show, go to hackpodcast.com redirects to our Patreon. If neither of those things are really your speed, nor is buying a hat, leave a rating, tell someone about the show, means the world to us. And thank you for listening to another episode of Hacked.

Yeah, appreciate it.