Tech Brew Ride Home - Mon. 03/11 – Your Car Is Spying On You, Example 212

Episode Date: March 11, 2024

Epic got Apple to blink! Sam Altman got back on OpenAI’s board of directors. Reddit finally gets to IPO. Elon Musk says X.ai is going open source. And once again, you won’t believe the degree to which your car and your driving is the new data treasure trove for companies to monetize. Sponsors: 1password.com/ride ArcticWolf.com/techmeme Links: Epic says Apple will reinstate developer account, clearing path for Epic Games Store on iPhone (9to5Mac) Sam Altman returns to OpenAI's board (Axios) Sam Altman rejoins OpenAI’s board after investigation into sudden firing (The Verge) OpenAI’s Sam Altman Returns to Board After Probe Clears Him (Bloomberg) Elon Musk says xAI will open-source Grok this week (TechCrunch) Reddit to raise nearly $750 million in upcoming IPO (CNBC) Telegram hits 900mn users and nears profitability as founder considers IPO (Financial Times) Automakers Are Sharing Consumers’ Driving Behavior With Insurance Companies (NYTimes) 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 Monday, March 11th, 2024. I'm Brian McCullough today. Epic got Apple to blink. Sam Altman got back on OpenAI's board of directors.

Reddit finally gets to IPO. Elon Musk says X.AI is going to open source grok. And once again, you won't believe the degree to which your car and your driving is the new data treasure trove for companies to monetize. Here's what you missed today in the world of tech. This is one of those Mondays where I have to catch you up on some things from last Friday before they go down the memory hole. First, Epic said Apple has reinstated its developer account clearing the way for Epic Games to have a game store in the EU. Tim Sweeney

says the move was followed by a swift EU inquiry. So Apple blinked 100%, but also, again, didn't they just bring this on themselves? quoting 9 to 5 Mac. Here's what Epic Games says in a new update to their blog post from Wednesday. has told us and committed to the European Commission that they will reinstate our developer account. This sends a strong signal to developers that the European Commission will act swiftly to enforce the Digital Markets Act and hold gatekeepers accountable. We are moving forward as planned to launch the Epic Games Store and bring Fortnite back to iOS in Europe, onward, end quote. Epic Games CEO Tim Sweeney added this color on X, quote,

The DMA went through its first major challenge with Apple banning Epic Games Sweden from competing with the App Store, and the DMA just had its first major victory. Following a swift inquiry by the European Commission, Apple notified the Commission and Epic that it would relent and restore our access to bring back Fortnite and launch Epic Games store in Europe under the DMA law. A big win for European rule of law, for the European Commission, and for the freedom of developers worldwide to speak up. Hashtag free Fortnite, end quote.

So what changed? Apple tells 9 to 5 Mac that it has held further discussion with Epic. The result is that Apple has received proper commitments that Epic will play by the rules as legally defined. Quote, following conversations with Epic, they have committed to follow the rules, including our DMA policies. As a result, Epic Sweden, AB, has been permitted to re-sign the developer agreement and accepted into the Apple developer program, end quote. So again, pretty wild 48 hours with this story and pretty wild own goal by Apple. I don't think there's any other way to look at it. As Games Frey put it, Apple's hands. handling of Epic's account closure turned what was essentially a U.S. contract dispute into a DMA

enforcement priority due to the appearance of a gatekeeper silencing critics. Quote, for the first time, Apple is now paying a price for its hubris, for its ruthlessness, and for the disdain with which it treats developers. Apple used developers to build its market power, and increasingly just treats them as serfs. There is hardly anything worse in the free world than for a bully, which is what Apple appears to be in this context, to be accused of using its market power to silence critics. This is not your average antitrust matter where the question is where to draw the line between hyper-competitive, allowed, and anti-competitive illegal behavior. This here is about fundamental values. Apple comes across as a company that has only two values, power and money.

For the avoidance of doubt, this is about appearance more so than substance, but Apple has no one to blame for that appearance but itself. It optimized for the courts of law, not for the court of public opinion. If one analyzes the sequence of events against a backdrop of a cross-jurisdictional dispute, it's clear that silencing Tim Sweeney was not Apple's primary objective, which is not even certain, but that makes it all so stupid. They wanted to achieve something else, and now they came across as an anti-free speech bully. That's why Steve Jobs must be turning in his grave, end quote. And OpenAI announced that Sam Altman is rejoining its board of directors alongside three new members, Sue Desmond Helman, Nicole Seligman, and Fiji Simo, quoting Axios.

OpenAI's board also added three women to its ranks, Sue Desmond Hellman, former CEO of the Bill and Melinda Gates Foundation, Nicole Seligman, former EVP and general counsel at Sony, and Fiji Simo, CEO and chair of Instacart. I am pleased this whole thing is over. Sam Altman said on a call with reporters noting that it has been painful to see people with an agenda leak things. in response to a question from Axios about how OpenAI will change going forward. Chairman of the board Taylor said, we did adopt a number of governance enhancements

highlighting a whistleblower hotline and a new mission and strategy committee on the board. The mission has not changed because it is more important than ever before, Taylor added. Having said that, I did learn a lot from this experience Altman told reporters, end quote. This all came after that independent investigation commissioned by OpenAI found that Sam Altman's conduct before his ouster quote, did not mandate removal. Quoting the verge. For those seeking to better understand why Altman was suddenly fired from his perch last fall, Open AIs public summary of the Wilmer Hale investigation is frustratingly light on details.

The law firm said the board believed it, quote, would mitigate internal management challenges by firing Altman suddenly and that the, quote, decision did not arise out of concerns regarding product safety or security, the pace of development, Open AIs, finances, or its statements to investors, customers, or business partners, end quote. The summary of the investigation uses the same vague language that OpenAI's previous board published to justify its decision to fire Altman, that the incident which I'm told OpenAI employees referred to as the blip was a, quote, consequence of a breakdown in the relationship and loss of trust between the prior board and Mr. Altman, end quote.

Wilmer Hale also found that the prior board moved, quote, without advance notice to key stakeholders and without a full inquiry or opportunity for Mr. Altman to address the prior board's concerns, end quote. And more from Bloomberg. It sounds like the board's decision to fire Altman was because of a, quote, breakdown in trust, not concerns about, again, product safety or the pace of development. Quote, the startup did not release the full findings of the review, but in a summary, it said Wilmer Hale determined that the prior board, quote, did not anticipate that its actions would destabilize the company in firing Altman and acting on an abridged time frame. Based on lessons learned from the review, OpenAI's board said it has adopted a number of new governance changes,

including strengthening the company's conflict of interest policy, creating a whistleblower hotline for staffers and launching additional board committees, including a new mission and strategy committee focused on the, quote, implementation and advancement of the company's mission, end quote. Elon Musk says, XAI plans to open source GROC this week. XAI released GROC in November, offering access to real-time data via its 16. $16 per month ex-scription, quoting TechCrunch. Musk, who didn't elaborate on what all aspects of grok he planned to open source, helped co-found OpenAI with Sam Altman nearly a decade ago as a counterweight to Google's

dominance in artificial intelligence. But Open AI, which was required to also make its technology freely available to the public, has become closed source and shifted focus to maximizing profits for Microsoft, Musk alleged in a lawsuit filed late last month. The lawsuit has ignited a debate among many technologists and investors about the merits of open source AI, Vinod Kossela, whose firm is among the earliest backers of open AI, called Musk's legal action a, quote, massive distraction from the goals of getting to AGI and its benefits, end quote. Mark Andresen, co-founder of Andresen Horowitz, accused Kosovo,

of, quote, lobbying to ban open source research in AI. Quote, every significant new technology that advances human well-being is greeted by a ginned up moral panic, said Andresen, whose firm A16Z has backed mistral, whose chatbot is open source. This is just the latest, he said. That received a tweet response from Kosa, who wrote, quote, and at P. Marka, would you open source the Manhattan Project? This one is more serious for national security. We are in a tech economic war with China and AI that is a must win. This is exactly what patriotism is about, not slogans, end quote. It's finally here. Reddit has filed to raise up to $748 million in its IPO, selling 22 million shares, at $31 to $34 each for around a $6.5 billion valuation. Reddit also set aside 1.76 million shares

for users, quoting CNBC. These Redditors will be able to purchase those shares and then sell them when Reddit goes public as they won't be subject to a lockup period, which typically prevents investors from selling shares for six months after the IPO. The company warned in its S-1 filing that Redditors who participate in its IPO, quote, could result in increased volatility in the market price of the company's Class A common stock. Other companies that have gone public and allowed certain community members and others to participate in their IPOs via similar directed share programs include Doximity, Rivian, and Airbnb. Some of the company's notable shareholders include Tencent, Condy Ness, parent company, advanced magazine publishers, and OpenAI CEO Sam Aldman, who was a member of Reddit's Board of Directors from

2015 to 2022, end quote. With Reddit going public, what are the remaining platforms that still could hit the public markets someday soon? TikTok, maybe as a solo entity, Discord. What about Telegram? Well, Telegram founder Pavel Dorov says Telegram has 900 million users and hopes to, quote, become profitable next year, if not this year, and was offered more than $30 billion valuations by VCs for Telegram, but is considering an IPO. quoting the FT. We are hoping to become profitable next year, if not this year, said the Russian-born founder in his first public interview since 2017. He added that the platform has 900 million monthly active users up from 500 million at the beginning of 2021. Duraov, who fully owns

Telegram, said the company had been offered 30 billion plus valuations from potential investors, including global late-stage tech funds, but has ruled out selling the platform while it explores a future initial public offering. The main reason why we started to monetize is because we wanted to remain independent, he said. Generally speaking, we see value in an IPO as a means to democratize access to telegram's value, end quote. Once largely home to the freewheeling cryptocurrency community, the company, which only has about 50 full-time employees, has exploded in popularity over the past few years to become a vital communication tool for governments and officials globally, as well as a lifeline to citizens in conflict zones. Researchers warned that the lightly moderated platform

remains a hotbed for criminal activity, as well as extremists or terrorist content and misinformation. Critics have suggested that the Kremlin may have links to or leverage over Telegram, a claim that Duraov dismissed as inaccurate. Duraov was hailed as the Mark Zuckerberg of Russia after co-founding the country's most popular social media network VK in his native St. Petersburg in 2007, a free speech advocate he founded Telegram in 2013 with his brother. According to Duraov, he fled Russia a year later after refusing to share the data of certain Ukrainian users of VK with Russia's security agency. Deraev has said he sold his shares in VK to Kremlin-friendly oligarchs for $30 million under duress. Two people close to the matter said, Telegram would probably aim for a U.S. listing once the company had reached profitability and market conditions were favorable.

Dorev declined to comment on a timeline or a possible venue, but said Telegram had, quote, studied several options. Telegram has raised about $2 billion in debt financing from a $1 billion bond offering in 2021, as well as further issues of $750 million and $270 million conducted last year, end quote. Finally today, another reminder that cars are the next tech platform frontier for good and ill. GM, Honda, Kia, Hyundai, and others have added optional features to their apps to rate people's driving in recent years. Also apparently offering that data to brokers like Lexis Nexus, quoting the New York Times. Ken Dahl says he has always been a careful driver. The owner of a software company near Seattle,

he drives a leased Chevrolet Bolt. He's never been responsible for an accident. So Mr. Dahl 65 was surprised in 2022 when the cost of his car insurance jumped by 21%. Quotes from other insurance companies were also high. One insurance agent told him his Lexus Nexus report was a factor. Lexus Nexus is a New York based global data broker with a Risk Solutions division that caters to the the auto insurance industry and has traditionally kept tabs on car accidents and tickets. Upon Mr. Dahl's request, Lexus sent him a 258-page consumer disclosure report, which it must provide per the Fair Credit Reporting Act. What it contained stunned him, more than 130 pages detailing each time he or his wife had driven the bolt over the previous six months. It included the dates of 640 trips,

Their start and end times, the distance driven, and in accounting for any speeding, hard braking, or sharp accelerations. The only thing it didn't have is where they had driven the car. On a Thursday morning in June, for example, the car had been driven 7.33 miles in 18 minutes. There had been two rapid accelerations and two incidents of hard braking. According to the report, the trip details had been provided by General Motors, the manufacturer of the Chevy Bolt. Lexus Nexus analyzed that driving data to create a risk score, quote, for insurers to use as one factor of many to create more personalized insurance coverage, according to a Lexus nexus spokesman, Dean Carney.

Eight insurance companies had requested information about Mr. Dahl from Lexus Nexus over the previous month. In recent years, insurance companies have offered incentives to people who install dongles in their cars or download smartphone apps that monitor their driving, including how much they drive, how fast they take corners, how hard they hit the brakes, and whether they speed. But, quote, drivers are historically reluctant to participate in those programs, as Ford Motor put it in a patent application that describes what is happening instead. Car companies are collecting information directly

from internet-connected vehicles for use by the insurance industry. Sometimes this is happening with a driver's awareness and consent. Car companies have established relationships with insurance so that if drivers want to sign up for what's called usage-based insurance, where rates are set based on monitoring of their driving habits, it's easy to collect that data wirelessly from their cars. But in other instances, something much sneakier has happened. Modern cars are internet-enabled allowing access to services like navigation, roadside assistance, and car apps that drivers can connect to their vehicles to locate them or unlock them remotely. In recent years, automakers including GM, Honda, Kia, and Hyundai have started offering optional features in their connected

car apps that rate people's driving. Some drivers may not realize that if they turn on these features, the car companies then give information about how they drive to data brokers like Lexus Nexus. Automakers and data brokers that have partnered to collect detailed driving data from millions of Americans say they have drivers' permission to do so. But the existence of these partnerships is nearly invisible to drivers whose consent is obtained in fine print and murky privacy policies that few read. Especially troubling is that some drivers, with vehicles made by GM, say they were tracked even when they did not turn on the feature, called OnStar Smart Driver, and that their insurance rates went up as a result. GM's OnStar Smart Driver's service is optional to customers. AGM spokeswoman

Mallory Luchick said, quote, customer benefits include learning more about their safe driving behaviors or vehicle performance that with their consent may be used to obtain insurance quotes. Customers can also unenroll from the smart driver at any time, end quote. But the other troubling thing would be, could your auto insurance rates go up if you choose to opt out of joining any such program? As my mom likes to say, the internet era is all about it being impossible not to know anything. It's possible now for insurance companies to know how you drive with perfect recall and fidelity, so they are strongly incented to make it impossible for them not to know that. Nothing for you today. Talk to you tomorrow.