Tech Brew Ride Home - Fri. 10/21 – What If Uncle Sam Let’s Elon Off The Hook?

Starting point is 00:00:00 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, October 21st, 2020. I'm Brian McCullough today. I made the mistake of saying Elon's name five times in front of a mirror, so all the Elon Twitter headlines came back to terrify us. Forbes alleges that they've caught TikTok doing the exact thing that everybody fears they're doing. What if I told you there was a third huge AI raise story to round out this week? And of course, the weekend long read suggestions. Here's what you missed today in the world of tech. almost tweeted earlier this week, hey, has everyone forgotten that the whole Elon Twitter thing hasn't actually been resolved yet? I didn't end up hitting the send button because I didn't

Starting point is 00:01:17 want to jinx it and bring on a bunch of headlines, but I guess just thinking about that did the trick. Bloomberg is reporting this morning that Twitter and Elon Musk's advisors are preparing the paperwork to finally complete the takeover deal by October 28th, which was the court's deadline. That's a week from today. That came after the Washington Post was reporting this. Quote, Elon Musk told prospective investors in his deal to buy the company that he planned to get rid of nearly 75% of Twitter's 7,500 workers, whittling the company down to a skeleton staff of just over 2000. Even if Musk's Twitter deal falls through, and there's little indication now that it will, big cuts are expected. Twitter's current management plan to pay

Starting point is 00:02:04 the company's payroll by about $800 million by the end of next year, a number that would mean the departure of nearly a quarter of the workforce, according to corporate documents and interviews with people familiar with the company's deliberations. The company also planned to make major cuts to its infrastructure, including data centers that keep the site functioning for more than 200 million users that log on each day. The extent of the cuts, which have not previously been reported, help explain why Twitter officials were eager to sell to Musk. Musk's $44 billion bid, though hostile, is a golden ticket for the struggling company, potentially helping its leadership avoid painful announcements that would have demoralized the staff and possibly crippled the service's

Starting point is 00:02:44 ability to combat misinformation, hate speech, and spam, end quote. But wait, there's more. Last night, Bloomberg was reporting that the Biden administration might be considering subjecting some of Elon Musk's ventures, including the Twitter deal, but as well as Starlink, to national security reviews. Quote, U.S. officials have grown uncomfortable over Musk's recent threat to stop supplying the Starlink satellite service to Ukraine. He said it had cost him $80 million so far. And what they see as his increasingly Russia-friendly stance following a series of tweets that outlined peace proposals favorable to President Vladimir Putin. They are also concerned by his

Starting point is 00:03:25 plans to buy Twitter with a group of foreign investors. One possibility is through the law governing the Committee on Foreign Investment in the United States to review Musk's deals and operations for national security risks, they said. One element of the $44 billion Twitter deal that could trigger a Sifias review is the presence of foreign investors in Musk's consortium. The group includes Prince Al-Walid bin Tal of Saudi Arabia, finance holdings, a digital asset exchange founded and run by a Chinese native, and Qatar's sovereign wealth fund. The panel operates behind closed doors and really confirms when it is conducting reviews. Seifius also holds the power to review deals that have already been consummated, end quote. So as Matt Levine tweeted last night,

Starting point is 00:04:12 imagine if the U.S. government swoops in and lets Elon off the hook by blocking the Twitter deal. That would be amazing. I think the F.T. Alphaville account summed it up perfectly by tweeting, quote, if Musk can successfully dodge buying Twitter just by tweeting, it suggests Twitter is worth more than he won't be paying, whereas if he can't, it suggests it's worth less than he will be forced to pay. Tricky, end quote. I would note that last I checked, Twitter stock was trading several dollars below the takeover price suggesting there is doubt among some investors that this will actually happen. Forbes has a bit of a bombshell piece up, saying that they've seen documents suggesting a China-based bite-dance audit and risk-control team

Starting point is 00:05:07 planned to collect TikTok location data of specific U.S. citizens who were never employed by the company. Quote, the team primarily conducts investigations into potential misconduct by current and former bite-dance employees, but in at least two cases, the internal audit team also planned to collect TikTok data about the location of a U.S. citizen who had never had an employment relationship with the company of the materials show. It is unclear from the materials whether data about these Americans was actually collected. However, the plan was for a Beijing-based Bight-Dance team to obtain location data from U.S. users' devices. TikTok spokesperson Maureen Shanahan said that TikTok collects approximate location information based on user's IP address to, quote, among other things,

Starting point is 00:05:51 help show relevant content and ads to users, comply with applicable laws, and detect and prevent fraud and inauthent behavior, end quote. But the material reviewed by Forbes, indicates that BightDance's internal audit team was planning to use this location information to surveil individual American citizens not to target ads or any of those other purposes. Forbes is not disclosing the nature and purpose of the plan surveillance referenced in the materials in order to protect sources. TikTok and BightDance did not answer questions about whether internal audit has specifically targeted any members of the U.S. government, activists, public figures, or journalists, and quote.

Starting point is 00:06:27 To round out our week of AI Euphoria, the information says OpenAI is in advanced talks to raise more funding for Microsoft and that the company had a previously undisclosed 2021 raise at an implied $20 billion valuation that Sequoia, Tiger, A16, Z, and others participated in. Quote, Microsoft previously backed the startup with capital that includes credits to use Microsoft's Azure cloud computing services to develop its technology, according to a person with knowledge of the discussions. A new deal could help Microsoft grow Azure usage, one of its top priorities while keeping OpenAI's business away from rivals, including Amazon Web Services and Google Cloud. The talks follow a previously undisclosed sale of OpenAI stock by existing shareholders last year to investors, including Sequoia Capital, Tiger Global Management, Bedrock Capital, and Andreessen Horowitz.

Starting point is 00:07:22 In that deal, the price of the shares implied a valuation of nearly $20 billion for the seven-year-old startup, said several people with knowledge of the deal. The Quiet Share purchases represented a big bet on the future of a company that former Y Combinator President Sam Altman, Tesla CEO Elon Musk, and other AI practitioners founded as a non-profit to rest AI talent and research away from for-profit giants like Google and Facebook. It has since emerged as one of the best-known startups in a corner of AI that recently achieved breakthroughs and helping humans quickly generate original text, images, and software code. Open AI licenses its software to other.

Starting point is 00:07:58 AI startups, but its revenue is still modest. A person with direct knowledge of OpenAI's finances implied the company was on track to generate revenue in the low tens of millions of dollars this year. That means OpenAI's valuation last year likely was between 500 and 800 times the revenue it projected in 2022. Training machine learning models is a costly business, so OpenAI needs plenty of cash. The startup launched with $1 billion in funding from high-profile investors including Musk, LinkedIn co-founder Reid Hoffman, Founders Fund partner Peter Thiel, and Greg Brockman, a former chief technology officer at Stripe, who is now OpenAI's president and chairman. Then in 2019, Microsoft invested in the startup in a deal worth $1 billion.

Starting point is 00:08:40 Kosla Ventures also invested directly in the startup, according to a person with direct knowledge of the investment, end quote. Actually, sorry, got to squeeze one more in here. Snaps stock is down more than 25 percent after Q3 numbers. Last night beat expectations on earnings per share but missed on revenue, quoting CNBC. Snap's third quarter revenue grew 6% from a year earlier the first time it's dipped into single digits since the company's public market debut in 2017. Meanwhile, even as it reported a surprise adjusted profit, Snap's net loss surged 400% to $360 million, partly due to a $155 million restructuring charge. Daily active users increased 19% year over year, showing the company is still able to attract people to the service despite the struggles on the business side.

Starting point is 00:09:36 Average revenue per user was down 11% to $3.11. End quote. Snap's market cap at its height a year ago was $131 billion. Today, it is $13 billion. Of course, meta was $1.07 trillion at its height versus $3.50,000. $53 billion today. Pinterest is now a $15 billion company down from $56 billion, barring other factors affecting things. Lord knows where Twitter's market cap would be today. It was $61 billion at its height, so maybe Elon is still going to get a deal. Time for the weekend long read suggestions in this week of AI news. This story has popped up on my radar again. AI has made it possible for us to create believable avatars of our dead relatives. You ready for that? Quoting the MIT

Starting point is 00:10:37 Technology Review. From what I could glean over a dozen conversations with my virtually deceased parents, this really will make it easier to keep close to the people we love. It's not hard to see the appeal. People might turn to digital replicas for comfort or to mark special milestones like anniversaries. At the same time, the technology and the world it's enabling are unsurprisingly imperfect, and the ethics of creating a virtual version of someone are complex, especially if that person hasn't been able to provide consent. For some, this tech may even be alarming or downright creepy. I spoke to one man who'd created a virtual version of his mother, which he booted up and talked to at her own funeral. Some people argue that conversing with

Starting point is 00:11:18 digital versions of lost loved ones could prolong your grief or loosen your grip on reality. When I talked to friends about this article, some of them physically recoiled. There's a kind of common, deeply held belief that we mess with death at our peril. I understand these concerns. I found speaking to a virtual version of my parents uncomfortable, especially at first. Even now, it still feels slightly transgressive to speak to an artificial version of someone, especially when that someone is in your own family, end quote. Next, Bloomberg returns to that whole gamers versus NFT battle, and basically says that the gamers have won, which makes the interesting point that if Web3 stuff like NFTs don't work in gaming, where will they work? Because, quote,

Starting point is 00:12:05 gamers, after all, have bought into most of Web3's underlying concepts for decades. Persistent online worlds date back to the disco era when early computer networks and dial-up modems let nerds fight their way through text-based dungeon adventures, the idea of a Metaverse's old hat to 2000's devotees of Second Life or World of Warcraft, and Zuckerberg's recently unveiled VR Avatar became a meme after many observed that it wouldn't look out of place on the Nintendo Wii. Some fans of Grand Theft Auto online have been playing the game for nine years across three generations of home consoles. We already have Metaverses here. Strauss Zelnick, chief executive officer, a publisher Take-2 Interactive, told gamesindustry.biz earlier this year,

Starting point is 00:12:47 I would argue we have the biggest than the best. No other group is more comfortable existing in virtual worlds and owning digital items. Over the past decade or so, gamers have also steadily proven willing to pay more in new ways for the privilege of playing. Games that required long hours of mindless grinding to collect gold or find the best items gave rise to new product types and secondary markets that served as shortcuts. Players spend real money to progress faster to unlock once standard features, even to fund a game's development. buying a flashy digital sword with fake gold in 2006, isn't all that different from buying a bored ape with a digital token right now? All of which is to say, when your blockchain-besotted sales team has lost the likes of agro crab, you're in trouble. With NFTs, the industry pushed its

Starting point is 00:13:33 most loyal customers and some collaborators to their limits. The lessons they learned can serve as a cautionary tale for anyone still trying to sell skeptics on the Metaverse, end quote. And you know I always try to stay on top of the hottest app of the moment, and at the moment, it is no longer be real, but a new app called Gas, which has topped the App Store charts, quoting the journal. TBH was hot. Five years ago, the app, which prompted teens to complement one another, topped Apple's App Store charts and quickly amassed millions of users in the coveted high school demographic. Facebook snapped it up, less than three months after launch, and soon shut it down. Now one of TBH's co-creators is back with GAS, a nearly identical iPhone app.

Starting point is 00:14:19 Gas asks teens multiple choice questions about people in their school, letting them choose yearbook-style superlatives, such as the most beautiful person you have ever met or the classmate who is never afraid of getting in trouble. Like TBAH, the questions GAS asks are positive, urging teens to complement each other, that is, to gas each other up. Those selected in the polls receive flames, notifications that they were chosen. The voter, is anonymous by default, people only find out the gender and grade of those who voted for them. But users of the free app can make in-app purchases to find out their admirers' names or keep their own names hidden in poll results.

Starting point is 00:14:56 Users have downloaded gas more than 500,000 times since it launched in late August, according to data.a.i, end quote. And finally, after my summer foray into solar panels and household battery backups, The next tech dad obsession that I'll admit I've felt itching at the back of my mind is home security. Well, my fellow tech history obsessed contemporary Ian Bogost has gone down this route so that maybe I don't have to. He installed 16 cameras all around his house. What was his takeaway from building a surveillance fortress? Quote, sometimes sight proves useful, but not by instilling comfort, more by solving banal mysteries.

Starting point is 00:15:40 when concern arose on the block that a repair to a water main might have cut power to a street light, I was able to look back a couple of weeks and confirm that, no, the light was out before the dig began. After months of trying to deduce the source of a groundwater leak into the garage, I realized I could just throw a camera in there and wait for it to rain. Once it did, the location of the incursion in the concrete was easy to spot, and I sealed it. Incensed by a suspicion that a dumpster in the alley was never being emptied, I was able to confirm that no, absolutely it was. My neighbors and I just generate a lot of waste, I guess. But mostly, the benefits of self-surveillance are aesthetic. The camera controller software records what it construes as motion, leaving me a folder of supposed events in my smartphone app. The more sophisticated cameras

Starting point is 00:16:26 have AI now, promising to detect only people or vehicles. This technical advance is a mistake. For one thing, it renews the problem of selective surveillance. For another, what a waste it would be to only be concerned with humans and their machines of conveyance. Instead, I have developed a deep, if distant relationship with the neighborhood fauna, feral cats, mostly, lots of them, who meander the same paths most nights up the driveway or across the deck. One, a black cat traverses the alley from west to east only, never the other way. Night possums lurk, scampering from the neighbor's yard to behind my boxwoods.

Starting point is 00:17:02 Hello, possums. Squirrels leap from fence to tree, but especially from dumpster to fence. are unhinged. I've seen one carrying an entire pizza. I have a collection of action shots of their deeds, a jackass for arboreal rodents. Surveillance is normally understood as monitoring, and that's where the trouble starts. But another use is possible, too, just looking. Looking can devolve into a dangerous exercise of asymmetrical power, but it can also provide communion. Why else would people watch birds or the sea or children at play? Not because something happens, although that's always possible, rather, just to see how few deeds of note transpire.

Starting point is 00:17:41 The days and seasons pass, bikes traverse blacktop, Amazon Prime tosses another boxed bobble to the curb. Nothing happens. At its worst, home surveillance makes you the main character of life's story, poised for strife, as any good protagonist is, but used differently, it can also produce the opposite conclusion, the world doesn't care about you at all, end quote. I know I always say that a weekend bonus episode is the favorite episode I've done in a while, but boy, do I mean it this time? Wait until you hear the discussion Chris and I had with Parker Thompson and a whole bunch of smart people last night vis-a-vis the whole moment that AI has had this week.

Starting point is 00:18:30 It's as deep as I promised and hoped for just listen to it. That's out tomorrow. Talk to you on Monday.

Tech Brew Ride Home - Fri. 10/21 – What If Uncle Sam Let’s Elon Off The Hook?

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