Tech Brew Ride Home - Fri. 06/16 – Google Does it Again

Episode Date: June 16, 2023

Google does it again. For like the 10th time just since I’ve been doing this podcast. What is “it?” You’ll hear in a second. The whole Reddit thing is simultaneously seeming to calm down, AND heat up, largely thanks to Reddit’s CEO. Will we finally get a bitcoin ETF this time? And, of course, the weekend longreads suggestions. Sponsors: TryNom.com/ride CrashPlan.com Links: Alphabet Selling Google Domains Assets to Squarespace (Bloomberg) Reddit says it won’t force subreddits back open (but will it?) (The Verge) Reddit CEO slams protest leaders, saying he'll change rules that favor ‘landed gentry’ (NCBNews) AI and media companies negotiate landmark deals over news content (Financial Times) BlackRock files for bitcoin ETF in push into crypto (Reuters) Weekend Longreads Suggestions: Microsoft’s Sudden AI Dominance Is Scrambling Silicon Valley’s Power Structure (Bloomberg Businessweek) How Nvidia Became ChatGPT’s Brain and Joined the $1 Trillion Club (Bloomberg Businessweek) How MrBeast Became the Willy Wonka of YouTube (NYTimes Magazine) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Friday, June 16th, 2023. I'm Brian McCullough today. Google does it again for like the 10th time just since I've been doing this podcast. What is it? You'll hear in a second. The whole Reddit thing is simultaneously seeming to calm down and heat up again, largely thanks to Reddit CEO. Will we finally get a Bitcoin ETF this time? And of course, the weekend long-rate suggestions. Here's what you miss today in the world of tech. Let's just reach into the old podcast filing cabinet here. I've got to reach way back for a file. We go to quite a bit, but it's filed away. Let's see. The one I'm looking for, it's a little worn from pulling it out

so much, but it's, ah, there it is. It's stuck behind the Google made yet another chat app slash video app file. Here it is. Let me read the file name on the tab here, where are my glasses. From the never rely on a Google product because they will just shut it down eventually file, Alphabet says it plans to wind down Google domains and sell all of its assets, including around 10 million domains, to Squarespace. A source says the deal is for $180 million. So, bad news for all of us who have various domain names registered via Google domains, though good news for Squarespace, whose stock jumped more than 9% on the news. quoting Bloomberg.

We are exceptionally proud to be chosen to serve the customers of the Google Domains' business, Anthony Casillena, founder and chief executive officer of Squarespace said in the statement, Domains are a critical part of web infrastructure and an essential piece of every business's online presence, end quote. Squarespace said it will honor Google Domains' customers' renewal prices for at least 12 months following the close of the deal. Squarespace will also become the exclusive domains provider for customers who purchase a domain from Google along with their workspace subscription. according to the statement. Supporting a smooth transition for customers over the coming months, with the help of the Google domains team is our top priority, Matt Madrigal, Vice President and General Manager of Merchant Shopping at Google said in the statement,

Squarespace can provide an integrated experience of purchasing and managing domains along with offering other tools that these customers may need to build their online presence, end quote. The deal is slated to close in the third quarter, end quote. Obviously, there's a ton of snark online that I could quote from talking about this, the best thing I found, frankly, is the tweet from whoever runs the website, Killed by Google.com, who says that they first registered that domain name in September 2018 using, wait for it, Google domains. Irony. Yeah, take a long, hard look at how your company's email, you know, is being run by Gmail and ask yourself, how sure are you that

that will last as long as you want it to? All right, update on all this. Reddit says 80% of its top subreddits are currently open. Red Arc estimates that more than 5,000 subredits are still limiting access, but that's down from almost 9,000 back on June 12th. A Reddit API fact sheet says the company does not plan to, quote, unilaterally reopen subredits. Also, Reddit's rules, however, may let the platform remove protesting moderators, quoting the verge. We ask Reddit spokesperson Tim, Rathschmidt, does this post mean that for a subreddit that has gone dark as part of the protest, Reddit can decide to replace the mods of that subreddit due to infractions of the mod code of

conduct? For example, could Reddit argue that mods of subredits that have gone dark are in violation of Rule 4? The first part of his reply, quote, yes, that would be in violation of Rule 4 of the COC. Rathschmidt writes that, quote, this isn't new and isn't something that was only activated for our current situation, suggesting that the admin account in question has a history with the rule that you can look up. So far, paging through that history, I'm seeing the account dealing with subredits that had been totally abandoned or moderators who were unreachable, not active moderators taking their subreddit private with the support or even lack of support of their community. And again, there's nothing in rule for about this situation, though

Reddit certainly has the right to do whatever it wants with its platform. I ask Rathschmidt to confirm, quote, Reddit does believe that a team of moderators who take their subreddit dark in protest or in violation of the mod code of conduct and can slash should be replaced? Question mark, he replies, no. I've said previously this has nothing to do with a protest. It's about if they violate the code of conduct, not what causes it, end quote. I don't know how to interpret that, or his other replies explaining that the current actions might be a pastiche of interpretations of different rules instead of just rule four, but it all makes me wonder if the conspiracy theorists among us were correct, end quote.

In the show notes, I'm also linking to an interview NBC News posted last night with Reddit CEO Steve Huffman. He also granted interviews to the verge and NPR, but it's this NBC News interview that everyone's talking about online. Quoting Huffman, if you're a politician or a business owner, you are accountable to your constituents. So a politician needs to be elected and a business owner can be fired by its shareholders, he said. And I think on Reddit, the analogy is closer to the landed gentry, the people who get there first, get to stay there and pass it down to their descendants, and that is not democratic, end quote. One change that is, that is quote, really important, he said, is, quote, making sure that, for example, the protests now or in the

future are actually representative of their communities. And I think that may have been the case for many at the beginning of this week, but that's less and less the case as time goes on. What I'm suggesting as a pathway out is actually more democracy, he said. We've got some old legacy decisions on how communities are run that we need to kind of work our way out of, end quote. I can certainly see his point there that the interests of the mods might not be the same as the interest of the average Reddit reader or even poster. But another analogy you could use with the mods vis-a-vis Reddit would be serfs, more than landed gentry. After all, it's the mods that have been doing all of the, well, moderating and community building for years, completely uncompensated by Reddit, which benefits

from the communities they create. I'm not sure why Huffman is picking this fight now. He's been a co-founder going back to the very beginning. It can't be that he woke up last month and suddenly recognized the nature of his platform for the first time, but it's clear that he has decided to change the nature of that platform for better or worse. Of course, one of the stated rationales for why now with the whole Reddit thing is that they did wake up and realize, you know, all of this AI excitement, this AI boom, all this sudden AI value. It was created to a large degree by being trained on Reddit. Maybe they did wake up and were like, hey, there's a ton of value here that we aren't being. compensated for. So interesting to see the Financial Times reporting that OpenAI, Google, Microsoft,

and Adobe have been meeting with News Corp, the New York Times, a bunch of others to discuss copyright issues over large language models and a possible subscription fee. Quote, those involved in the discussions which remain in the early stages, added that the deals could involve media organizations being paid a subscription-style fee for their content in order to develop the technology underpinning chatbot such as OpenAI's chat GPT and Google's Bard. The talks come as media groups express concern over the threat to the industry posed by the rise of AI as well as fears over the use of their content by OpenAI and Google without deals in place. Some companies such as Stability, AI, and Open AI are facing legal action from artists, photo agencies,

and coders who allege contractual and copyright infringement. Speaking in May at INMA, a media conference, News Corp Chief Executive Robert Thompson, summed up the industry's outrage, saying, quote, media's collective IP is under threat and for which we should argue voice for compensation, end quote. He added that AI was, quote, designed so the reader will never visit a journalism website, thus fatally undermining that journalism, end quote. A deal would set the blueprint for news organizations in their dealings with generative AI companies worldwide. Copyright is a crucial issue for all publishers, said the Financial Times, which is also in discussions over the matter. As a subscriptions business, we need to protect the value of our journalism and our business model.

Engaging in constructive dialogue with the relevant companies as we are is the best way to achieve that, end quote. Media industry executives want to avoid the mistakes of the early internet era when many offered articles online for free that ultimately undermined their business models. Big tech groups such as Google and Facebook then access that information to help build multi-billion dollar online advertising businesses. Some discussions currently involve trying to find a pricing model for news content used as training data for AI models. One number that has been discussed by publishers is five to $20 million a year, according to an industry executive, end quote. I had a crypto person recently explained to me a widely held theory in crypto circles

that with all of the crypto blowups of the last year and with the regulatory crackdown seemingly underway, does that mean that Wall Street would walk away from crypto entirely at this point? No, this person reasoned to me. In fact, what if this is the moment for Wall Street to step in and offer regulators a more regulatory and legal framework-friendly way to do crypto? So, Given that conversation, this is interesting, quoting Reuters. BlackRock, the world's biggest asset manager on Thursday filed for a Bitcoin exchange-traded fund or ETF that would allow investors to get exposure to the cryptocurrency as the asset class comes under intense regulatory scrutiny.

BlackRock's I-Share's Bitcoin Trust will use Coinbase custody as its custonian, according to a filing with the U.S. Securities and Exchange Commission. The U.S. regulator has yet to approve any applications for spot Bitcoin ETFs. The fact that BlackRock, a well-respected and established asset management company, has filed for a Bitcoin ETF, could be seen as a positive development in the quest for regulatory approval, said Joshua Chu, Group Chief Risk Officer at Blockchain Technology Group XBE, coinlectables, and Marvion. It also shows resilience of the public's interest in crypto, end quote. A spot Bitcoin ETF would track Bitcoin's underlying market price. Proponents say an ETF would give investors exposure to Bitcoin without directly buying it. The SEC rejected Grayscale investments application last year to convert its flagship Spot-Grascale Bitcoin Trust into an ETF. Grayscale sued the SEC, claiming that the regulator was acting arbitrarily in rejecting

applications for Spot Bitcoin ETFs when it had previously approved Bitcoin Futures ETFs. The SEC has also rejected proposals for Spot Bitcoin ETFs from firms, including Fidelity, CBOE, Global Markets, and NYDIG, end quote. Yeah, by my count, what is this? Maybe the 18th attempt to float a Bitcoin ETF, but if my crypto friend's theory is right, then maybe BlackRock senses its moment is now. Time for the weekend long read suggestions. Meethinks Businessweek has a special AI issue this week because there are two big stories from them that get to the root of the current moment. First, how did we get to a place where somehow Microsoft seems to be in the driver's seat

in terms of this AI moment? Interestingly, that IHP interview I posted with Kevin Scott, weekend was timely because, well, listen, quoting Bloomberg, Microsoft, not OpenAI, owns the mega computers that enable a chatbot to compose a sonnet about your cat or write a thank you note to your uncle. Microsoft is OpenAI's largest shareholder, its biggest financial backer, and its key technology partner. And to a great extent, it's Microsoft that now has the responsibility of turning ChatGPT's buzz into a real business. Although OpenAI is hands down the hottest startup in Silicon Valley, in many ways, it feels more like the most promising subsidiary of the leading purveyor of productivity software.

Microsoft was working on AI software before Windows 95 ever crashed its first PC, but for decades, every major attempt fell victim to risk aversion or corporate goofiness. For Exhibit A, see Clippy, the mansplaining late 90s fastener that interrupted your work to blink its gigantic eyes and ask questions such as, it looks like you're writing a letter, would you like help? In 2016, came Tay, a bot that was supposed to learn to sound like, a teenage girl by chatting with people on Twitter. Somehow, Microsoft's engineers failed to appreciate how Twitter tends to work within 24 hours. A deluge of rhetoric from neo-Nazis and September 11th

truthers turned Tay into a red-pilled anti-Semitic troll. The company took her off line, never to return. In between, most of Microsoft's AI output consisted of academic papers. We had a whole bunch of smart people who were doing a set of small, interesting things, says Chief Technology Officer Kevin Scott. But that wasn't necessarily adding up to one thing. Scott, a big guy with a Van Dyke beard and a collection of Hawaiian shirts, grew up in Virginia's Appalachian Foothills, and attended the nearby University of Lynchburg, a small Christian college. He got a job at Google, rose to become a top engineer, then jumped over to LinkedIn, which Microsoft acquired in 2016. Shortly after the deal closed, Nadella appointed him CTO and charged him with

streamlining the company's AI sprawl. At the time, Microsoft had at least three divisions conducting AI research under different bosses. Scott tallied all the requests for graphics processing, units from the different teams and got a number that was as big as the company's entire capital budget for the year. Then about $10 billion. Just some preposterous number, he says. These were great projects individually, but they had no bearing on one another. None of them had a business plan. Starting in 2019, he took responsibility for all AI research and development. Any project that needed AI chips required his approval. Things began to change in 2021 when Microsoft used the next version of OpenAI's model to create GitHub co-pilot. Besides finishing paragraphs in a short story,

the Open AI model proved capable of looking at a chunk of computer code and suggesting the next few lines. As we worked through that product and saw it was going to be successful, it begged the question of what the other co-pilots ought to be, Scott says, and quote. Then, the other big piece is on how Nvidia became the other king of this moment. I retweeted a joke tweet this week by Matt Turk that went, Generative AI investing, a process by which venture capital firms transfer large amounts of money to Nvidia, via intermediaries known as startups. Quoting Bloomberg again.

Nvidia is suddenly at the core of the world's most important technology. It owns 80% of the market for a particular kind of chip called a data center accelerator, and the current wait time for one of its AI processors is eight months. Many big technology companies are on Nvidia's backlog, but some of Huang's biggest customers have been designing their own custom chips for years aimed at reducing their dependence on suppliers, such as Nvidia. For now they're hooked. has to stumble for some reason to give a competitor a chance, says Chris Mack, an analyst at Harding

Lovenor LP, an investment company that owns about $160 million of Nvidia stock. There's no viable alternative, he says, end quote. And finally, if you like me are an old who is vaguely aware of Mr. Beast, the cultural phenomenon, but you aren't exactly sure what his whole deal is, this big New York Times magazine profile of the man has got you covered. Quote, Donaldson has built a YouTube empire on this kind of quasi-philanthropy in which he crafts spectacles around surprise cash giveaways, giving a random homeless man $10,000. Contests with expensive prizes, last to leave, $800,000 Island, keeps it, and other lavish, if not particularly sensible gifts, tipping waitresses with real gold bars. The phenomenal popularity of these videos has made him a superstar by any measure and cemented

his reputation as a secular saint among the YouTube faithful, but it has also left him open to the criticism that his generosity is more calculated than heartfelt, another audience development strategy alongside the garish thumbnails and finely tuned video titles. But to Donaldson's fans who view the phenomenon through the distortion field of YouTube's incentive structures, this criticism seems basically incomprehensible. Within the world of YouTube, the most demonic content is often the most successful and what makes Donaldson stand out is not that his videos make you feel icky, as another streamer put it, but that he puts that ickiness to work, end quote. It's another holiday weekend here in the U.S.

It's also my son's birthday. It's also Father's Day. My parents are in town for all of this. So I'm going to take Monday, Juneteenth, off, since it is a holiday. Can't pass up the chance to do this much family time when it's presented to me. But I will post another nugget from the Internet History Podcast Archives. Haven't decided which one yet, but I'll probably post it Sunday afternoon. So if you do reflexively look for the show on Monday, there will be something fresh in the feed waiting

for you. Talk to you on Tuesday.