Tech Brew Ride Home - Fri. 08/30 – Who ISN’T Investing In OpenAI?

Episode Date: August 30, 2024

At this point it would be quicker to name the big tech company that’s NOT investing in OpenAI’s latest round. Amazon’s new Alexa service is just going to be Anthropic’s Claude in drag disguise I guess. I’m starting to get really worried about Intel y’all. And, of course, The Weekend Longreads Suggestions. Links: OpenAI Funding Round Tempts Nvidia as Big Tech Leans on ChatGPT (Bloomberg) Apple, Nvidia Are in Talks to Invest in OpenAI (WSJ) Ask Claude: Amazon turns to Anthropic's AI for Alexa revamp (Reuters) ChatGPT’s weekly users have doubled in less than a year (The Verge) Intel Weighs Options Including Foundry Split to Stem Losses (Bloomberg) Weekend Longreads Suggestions: Sunk cost (the Open Sea story) (The Verge) The secret inside One Million Checkboxes (eieio.games) I Watched Footage of Jerry Lewis’s Unreleased 1972 Holocaust Film (The New Republic) End of the Road: An AnandTech Farewell (AnandTech) 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 TechMeme right home for Friday, August 30th, 2024. I'm Brian McCullough today. At this point, it would be quicker to name the big tech company that's not investing in OpenAI's latest round. Amazon's new Alexa service is just going to be Anthropics clawed in drag disguise, I guess. I'm starting to get really worried about Intel, y'all, and of course, the weekend long-read suggestions. Here's what you miss today in the world of tech. sources say that in addition to Microsoft, NVIDIA and Apple are in talks to join the new funding round

that would value OpenAI at over $100 billion. That would mean OpenAI would have the three most valuable tech companies in the world on their cap table. Again, nice work if you can get it. Quoting Bloomberg. The round would be led by Thrive Capital, which is investing about $1 billion. Bloomberg reported earlier this week. NVIDIA has discussed investing about $100 million, two of the people said. Microsoft was already OpenAI's biggest funder, having invested roughly $13 billion.

Apple has existing ties with OpenAI as well. The iPhone maker is adding ChatGBTT to its new suite of AI features called Apple Intelligence. The company also was slated to take a board observer seat at OpenAI alongside Microsoft, but those plans were dropped in July. Invidia, meanwhile, supplies the critical infrastructure needed to develop and run AI tools like ChatGPT, It's the biggest maker of so-called AI accelerators, sales of which have soared over the past two years, end quote. And quoting the journal. Investing in Open AI could complicate Apple's efforts to be a neutral partner with other AI companies. The move would be an unusual one for Apple, which typically doesn't invest in startups. Over the years, Apple has made a number of investments in manufacturing partners, in part to secure supply of components for its devices. In 2017, Apple invested $1 billion into Japan's SoftBank Vision Fund. because, quote, it will speed the development of technologies, which may be strategically important to Apple. And Apple spokeswoman said at the time, in 2016, Apple also invested $1 billion in Chinese ride-hailing startup D.D.

Chuk Ching. Apple didn't explain its motivation for the deal, but there was an intensifying battle over the future of driving at the time. Apple was in its early stages of trying to build its own electric vehicle, which it canceled earlier this year. Apple has ramped up its internal AI investments over the past year and a half as it attempts to build up its own capabilities, the journal recently reported. Invida has stepped up its investment activity in the past two years, plying money into buzzy AI companies, including inflection AI and data bricks, as well as smaller startups involved in AI drug discovery and robotics. OpenAI is one of the largest users of Nvidia's AI chips,

having utilized tens of thousands of them to train its most advanced AI systems, end quote. Among the product announces to look forward to in coming weeks, we've got the iPhone event, of course, we've got the meta event, where we're probably getting new AR and VR stuff. But also, there is the long rumbling rumor of Amazon's AI revamp of Alexa supposedly coming in October. More details from Reuters. Amazon's revamped Alexa due for release in October ahead of the U.S. holiday season will be powered primarily by Anthropics clawed artificial intelligence models rather than its own AI, five people familiar with the matter, told Reuters. Amazon plans to charge $5 to $10 a month for its new remarkable version of

Alexa, as it will use powerful generative AI to answer complex queries, while still offering the classic voice assistant for free, Reuters reported in June. But initial versions of the new Alexa using in-house software simply struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply, one of the people said. That's why Amazon turned to Claude, an AI chatbot developed by Startup Anthropic, as it performed better than the online retail giant's own AI models, the people said. Roiders based the story. upon interviews with five people with direct knowledge of the Alexa strategy, all declined to be named as they are not authorized to discuss public matters. Alexa accessed mainly through Amazon televisions

and echo devices, can set timers, play music, act as a central hub for smart home controls, and answer one-off questions. But Amazon's attempts to convince users to shop through Alexa to generate more revenue have been mostly unsuccessful, and the division remains unprofitable. As a result, senior management has stressed that 2024 is a critical year for Alexa to finally demonstrate it can generate meaningful sales, and the revamped paid version is seen as a way both to do that and keep pace with rivals. The release of the remarkable Alexa, as it is known internally, is expected in October with a preview of the new service coming during Amazon's annual devices and services event, typically held in September, the people said.

Amazon has not yet said, however, when it plans to hold its showcase event, which will be the first major public appearance of its new devices, Chief Panos Panay, who was hired from Microsoft last year to replace longtime executive David Limp. While Amazon has a mantra of working backwards from the customer to come up with new services, some of the people said that within the Alexa group, the emphasis since last year has instead been on keeping up with competitors in the AI race. Amazon workers also have expressed skepticism that customers would be willing to pay $60 to $120 a year for a service that's free today on top of the $139. Many already pay for their prime memberships. As envisioned, the paid version of Alexa would carry on conversations with a user that built on prior questions

and answers, the people with knowledge of the Alexa strategy said. The upgraded Alexa is designed to allow users to seek shopping advice, such as which clothes to buy for a vacation, and to aggregate news stories the people said. And it is meant to carry out more complicated requests, such as ordering food or drafting emails, all from a single prompt. Amazon hopes the new Alexa will also be a supercharged home automation hub, remembering customer preferences so that, say, morning alarms are set or the television knows to record favorite shows, even when a user forgets to, they said. Bank of America analyst Justin Post estimated in June that

there are roughly 100 million active Alexa users and that about 10% of those might opt for the paid version of Alexa, assuming the low end of the monthly price range that would bring in at least $600 million in annual sales. Amazon says it has sold 500 million Alexa enabled devices but does not disclose how many active users there are. Announcing a deal to invest $4 billion, in Anthropic in September last year, Amazon said its customers would gain early access to its technology. Raiders could not determine if Amazon would have to pay Anthropic additionally for the use of Claude and Alexa, end quote. OpenAI says ChatGPT, weekly active users doubled since last year to more than 200 million. Also, 92% of Fortune 500 companies use its tools, and automated API usage doubled just since July.

Quoting the verge. OpenAI says that more than 200 million people use chat GPT each week, as first reported by Axios. OpenAI spokesperson Taya Christensen confirmed the number to the verge, which is now double the 100 million weekly active users open AI reported last November. Additionally, Christensen says that 92% of Fortune 500 companies are using Open AIs products, while API usage has doubled following the release of the company's cheaper and smarter model GPT40 Mini. Since ChatGPT's launch in late 2022, Google, Microsoft, and Meta have also launched AI chat interfaces of their own. Today, Meta CEO Mark Zuckerberg revealed that that company's AI assistant has reached over 400 million monthly active users and 185 million weekly active users, despite not yet rolling out in the UK, Brazil, or EU. Earlier today, the US AI Safety Institute also announced that OpenAI and Anthropic have agreed to let the government evaluate major AI models before being launched to the public. unquote. Again, I'm not piling on Intel here. I'm just saying if you told me 30 years ago that Intel would be struggling for relevancy, I'm not sure I'd have believed you, but I really wouldn't

have believed wondering at this point if they're even struggling for solvency, quoting Bloomberg. Intel is working with investment bankers to help navigate the most difficult period in its 56-year history, according to people familiar with the matter. The company is discussing various scenarios, including a split of its product design and manufacturing businesses, as well as which factory projects might potentially be scrapped, said the people, who asked not to be identified because the deliberations are private. Morgan Stanley and Goldman Sachs' Intel's longtime bankers have been providing advice on the possibilities, which could include potential M&A, the people said. The discussions have only grown more urgent since the California-based

company delivered a grim earnings report this month, which sent the shares plunging to their lowest level since 2013. The various options are expected to be presented during a board meeting in September, the people said. A potential separation or sale of Intel's foundry division, which is aimed at manufacturing chips for outside customers, would be an about-face for Chief Executive Officer Pat Gelsinger. Gelsinger has viewed the business as key to restoring Intel's standing among chipmakers, and had hoped it would eventually compete with the likes of Taiwan Semiconductor Manufacturing Corporation, which pioneered the foundry industry. But it's more likely that Intel takes a less dramatic step before it reaches that point, such as holding off on some of its expansion plans, the people said.

The company has already done project financing deals with Brookfield Infrastructure Partners and Apollo Global Management. Intel's Gelsinger is running out of time to pull off a much-needed turnaround. He's been attempting to expand the Chipmakers Factory Network at the same time that sales are shrinking, a money-losing proposition. The company suffered a net loss of $1.61 billion last quarter, and analysts are predicting more red ink for the next year. Expect big Kappek cuts from Intel over the next 12 months said Amir Anwarza Day, market strategist at Asymmetric Advisors. Intel's model is effectively broken. It's fighting fires on too many fronts, he said. Gelsinger's comeback plan hinged on recasting Intel into two groups, one that designs chips and

another that manufactures them. The production arm would then be free to seek business from other companies. But the biggest client of Intel's factory network is still Intel. Until the foundry business has more outside customers, it's going to be changed. challenged financially. It reported operating losses of $2.8 billion in its most recent quarter and is now on course to have a worse year than projected. With a market value of $86 billion, Intel has fallen out of the top 10 largest chipmakers in the world ranked by that measure. It's the second worst performer on the Philadelphia Chip Index this year and suffers in comparisons with the stratospheric gains of Nvidia, a company that's on course to post

double Intel's revenue in 2024. As recently as 2021, Intel was 3.5.1, Intel was 3.5.5,000, times the size of Nvidia by revenue, end quote. Time for the weekend long-range suggestions. First up, the Verge checks in on OpenC. Remember OpenC, the biggest player in the NFT space. Remember NFTs? Well, quote, cryptocurrency values may be back up,

but one hyped storyline from the last crypto craze hasn't recovered. The NFT. In January 2020, the total monthly sales volume for the asset class peaked at more than $6 billion per crypto slam. Now it's below $430 million as of July. NFTs are hanging on, but they're in troubled waters. My mom thinks I'm a scam artist, I overheard one conference attendee say. At OpenC, once the largest marketplace for NFTs, more storms have gathered. One of the most valuable private startups to come out of the incubator-Y Combinator is now facing pending litigation from the

Securities and Exchange Commission, a previously unreported matter with the Federal Trade Commission, inbounds from U.S. and international tax authorities, heightened competition, accusations of gender discrimination and employee attrition. OpenC's revenues reached an all-time high of $265 million in Q1 of 2022, and the two co-founders closed their largest funding round to date. $300 million from Lodchip venture capital firms that valued OpenC at a whopping $13.3 billion. Finzer and Atala each owned 19% of OpenC as of late 2021, according to Forbes, so on paper they were billionaires. Two years later, the information reported that CO2 management, one of OpenC's largest backers effectively cut the startup's valuation to only $1.4 billion in Q2 of 2023,

a precipitous drop from its $13.3 billion sticker price, end quote. Then I missed this whole story this summer, but now that I've caught up with it, it's one of my favorite long reads that I've been able to bring to you for a while. Were you aware of the one million checkboxes game from a few months ago? To catch you up, here's the story from the creator himself, quoting EIEIEO games. On June 26, 2024, I launched a website called 1 million checkboxes or OMCB. It had 1 million global check boxes on it. Checking or unchecking a box changed it for everyone on the site instantly. My expectations for the site were very low and very wrong. I thought hundreds of players

would check thousands of boxes instead. 500,000 players checked over 650 million boxes in the two weeks that I kept the site online. The site made it into the New York Times and the Washington Post. It's on Know Your Meme and Wikipedia. The whole thing was a wild ride, end quote. Now, I quit quoting there because I don't want to spoil what's magical about this story, but suffice to say, the community eventually took over and did some crazy things with the whole project, quoting the conclusion without revealing the meat of the story so that you can read the magic for yourself. In high school, I wrote a recursive mail rule that sent a friend of mine millions of messages as a joke.

I accidentally repeatedly crashed the school's mail server. The adults in my life were largely not mad at me. They asked me to knock it off, but also made me a t-shirt. I don't think I'd be doing what I do now without the encouragement that I received then. What this Discord did was so cool, so surprising, so creative. It reminded me of me. Except they were ten times the developer I was then, and frankly better developers than I am now. Getting to watch it live, getting to provide some encouragement to see what they were doing and respond with praise and pride instead of anger, was deeply meaningful to me. I still tear up when I think about it. I'm proud to have made something that this Discord decided was worth playing with, and I'm even more proud of what they did with it.

I can't wait to see what they go on to make, end quote. Then someone at the New Republic has finally gotten a chance to see footage from the unreleased Jerry Lewis' 1972 Holocaust film, The Day the Clown Cried. If you're not familiar with the legend and notoriety of this film, that has been buried as far down the rabbit hole as any film ever has been. Quote, an unfinished film whose premise is as surreal as it is infamous. The Day the Clown Died stars Lewis as Helmut Dork, a washed-up and self-involved former Ringling Brothers Clown, who, through a series of misfortunes, ends up in Auschwitz.

As described by Lewis himself, quote, The Clown in the movie is a sort of Pied Piper, who, in the end, is expected to lead the children and himself to the ovens, end quote. Many have wondered whether the day the clown cried is the worst film ever shot. Speaking to Spy Magazine, Harry Shearer described the rough cut he saw as, quote, so drastically wrong, its pathos and its comedy so wildly misplaced that you could not, in your fantasy of what it might be like, improve on what it really is, end quote. The 1972 shoot was highly dysfunctional, leaving Lewis, in his own words, exhausted, beaten. The day the clown cried was never completed, and most of the

footage has never surfaced publicly due to a litany of legal and financial disputes. Ever since the project was shelved, movie buffs across the world have been trying to get their hands on it, their interests further excited by the comedian's reluctance to discuss the film later in life. It was all bad, and it was bad because I lost the magic, Lewis told Reuters in 2013, you will never see it. No one will ever see it because I am embarrassed at the poor work, end quote. As the grandson of an Auschwitz survivor, as a scholar studying the Holocaust, and as a former fellow at the Library of Congress, I have been desperate to see Lewis's footage for years, in one sense genuinely curious, and in another, hopelessly drawn to that which might haunt me.

What I witnessed over the course of those five hours surprised me. Could it be that the day the clown cried has been unfairly maligned, end quote? And finally, the last link in the show notes today is to an announcement from Anand Tech, a tech hardware site that I've quoted from endlessly over the last six and a half years. Anantec is shutting down publication after 27 years, sadly. I'll let them tell you the howls and the whys, but pour one out for a real one. No bonus episodes this weekend. Also, no episode at all on Monday because of the bank holiday here in the U.S. So talk to you on Tuesday. Brat Summer, we barely knew you.