Tech Brew Ride Home - Mon. 03/27 – SVB Finds A New Home

Episode Date: March 27, 2023

Looks like the short, sharp, SVB saga has reached the beginning of a conclusion. Twitter source code has been leaked. The doubts inside Apple about the upcoming mixed reality headset. Why has no one presented any evidence for why TikTok might need to be banned? And, again, will generative AI lead to a physical robot revolution? Sponsors: Miro.com/podcast GetSunday.com/ride for 20% off Links: First Citizens to Buy SVB After Biggest Failure Since 2008 (Bloomberg) Twitter Says Parts of Its Source Code Were Leaked Online (NYTimes) Apple’s Best Hope for New Headset: a Smartwatch-Like Trajectory (Bloomberg) France bans all recreational apps – including TikTok – from government devices (The Register) Pinduoduo App Malware Detailed by Cybersecurity Researchers (Bloomberg) Tech’s AI Armies Are Huge, Yet Struggling to Innovate (Bloomberg) For Smarter Robots, Just Add Humans (Wired) 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 from Monday, March 27th, 2023. I'm Brian McCullough today. Looks like the short, sharp SVB saga has reached the beginning of a conclusion. Twitter source code has been leaked. The doubts inside Apple about the upcoming mixed reality headset. Why has no one presented any evidence for why TikTok might need to be banned? And again, will generative AI lead to a physical robot revolution? Here's what you miss today in the world of tech. First Citizens Bank has agreed to, buy the commercial banking business of Silicon Valley Bank from the FDIC, including all deposits and loans. So this saga seems to have finally reached the tidying up stage, quoting Bloomberg.

The acquisition transforms First Citizens into one of the top 15 U.S. banks, according to Bloomberg intelligence, with help from some favorable terms. First Citizens is buying about $72 billion of SVB's assets at a discount of $16.5 billion, according to an FDIC statement. This leaves about 90 billion in securities and other SVB assets in the hands of the FDIC and an estimated cost of the failure to the deposit insurance fund of about $20 billion. Meanwhile, the FDIC gets equity appreciation rights in First Citizens with a potential value of $500 million. First Citizens said it will assume $56 billion in deposits and 17 legacy branches will begin operating as Silicon Valley Bank, a division of First Citizens. There will be no immediate change to customer accounts. Holding said SVB has complementary businesses, including private banking, wealth, and small business banking.

The deal will also extend first citizens reach into venture capital and technology businesses, he said. Valley National Bank Corp also submitted a bid for Silicon Valley Bank last week. People familiar with the matter have said, end quote. Some Twitter source code was apparently leaked by user free speech enthusiast on GitHub, which removed the code to comply with Twitter's DMCA notice on March 24th. So another headache for Elon Musk and Twitter, quoting the New York Times. Twitter moved on Friday to have the leaked code taken down by sending a copyright infringement notice to GitHub, an online collaboration platform for software developers where the code was posted

according to the filing. GitHub complied and took down the code that day. It was unclear how long the leaked code had been online, but it appeared to have been public for at least several months. Twitter also asked the U.S. District Court for the Northern District of California to order GitHub to identify the person who shared the code and any other individuals who downloaded it, according to the filing. Twitter began an investigation into the leak, and executives handling the matter have surmised that whoever was responsible left the San Francisco-based company last year to people briefed on the internal investigation said. Since Mr. Musk bought Twitter in October for $44 billion, about 75% of the company's 7,500 employees have been laid off or resigned. The executives were only recently made aware of the source code leak. The people briefed on the

internal investigation said, one concern is that the code includes security vulnerabilities that could give hackers or other motivated parties the means to extract user data or take down the site, they said, end quote. As Gergerly Oros, friend of the show tweeted, quote, things that make this source code leak dangerous for Twitter, number one, regulators can inspect and potentially find cases when Twitter told them A, when the source code says B. Number two, IP and patent challenges could come from third parties examining it, and number three, business logic exploits. As with leaks of this magnitude, the CISO, chief information security officer, is usually grilled by regulators. Twitter's CISO left on November 10th, 2022, and it doesn't seem she's been

replaced since, which means regulator questions might go up a level, end quote. Mark German, Apple Scoop Monday, the forthcoming mixed reality headset has hit, I guess, its last stage of readiness, quoting Bloomberg. There was a momentous gathering at Apple last week with the company's roughly 100 highest-ranking executives descending on the Steve Jobs Theater in Cupertino, California. The group, known as the Top 100, was there to see Apple's most important new product in years, its mixed-reality headset. The device was demonstrated for the group, marking a key milestone ahead of the headset's public debut plan for June. It was an opportunity for the mixed reality team to rally leaders around what could be the next major platform beyond the iPhone,

iPad, Mac, and Apple Watch. Now, this isn't the first time that the Top 100 has gotten a peek at the headset. Apple's Technology Development Group, the team behind the mixed reality initiative, has discreetly shown the product to the company's top decision makers every year since 2018. Such presentations are known as Fight Club demos, a nod to the Brad Pitt movie line that the first rule of Fight Club is you don't talk about Fight Club. But this time was different. Earlier demonstrations were lower-key affairs meant to show progress and secure the headcount needed to keep going. The latest preview took place in the Steve Jobs Theater, Apple's biggest showcase, suggesting

that a public unveiling is getting close. The executives attended the event ahead of heading to their annual offsite held at a resort in Carmel Valley, California. The demonstrations were polished, glitzy, and exciting, but many executives are clear-eyed about Apple's challenges pushing into this new market, end quote. Indeed, from the New York Times, here are some of the concerns that folks inside Apple have about this project. As the company prepares to introduce the headset in June, enthusiasm at Apple has given way to skepticism, said eight current and former employees, who requested anonymity because of Apple's policies against speaking about future products. There are concerns about the devices, roughly $3,000 price tag, doubts about its utility, and worries about its unproven market. Some employees have defected from the project because of their doubts about its potential.

Three people with knowledge of the moves said. Others have been fired over the lack of progress with some aspects of the headset, including its use. Apple's Siri voice assistant, one person said. Some internal skeptics have questioned if the new device is a solution in search of a problem. Unlike the iPod, which put digital songs in people's pockets and the iPhone, which combined the abilities of a music player and a phone, the headset hasn't been driven by the same clarity these people said, end quote. The French government has banned TikTok and all other recreational apps from staff phones, claiming none have sufficiently robust security for government devices. That last bit about all recreational apps getting banned is a new

wrinkle, but, as I think I've said before, I could do a segment every single day about this government or that military or this whatever from all corners of the world banning use of TikTok on phones used by people who work for them. I'm bringing this up now because I want to ask a question. We keep hearing of these bans or threats of bans by jurisdictions and governments because of security concerns, but has anyone actually made a tangible allegation yet? Like, we keep hearing all this talk, but no one has actually made a case, at least that I'm aware of, of like, well, we see all the back doors on this thing, take a look, or something like that? Are we just supposed to take it on faith that people have actually seen spying by the Chinese government via TikTok? Like, will some government be like,

here's the proof the Chinese broke into this official's phone and here's the evidence, or do we have to take it all on faith? Or is the assumption here that any app that originates in China is by definition a spy tool because the way the Chinese government controls local companies and what they do? If so, why all the focus on just TikTok? Why not ban all Chinese apps? I'm honestly asking the question here. And this comes from somebody who thinks that banning TikTok might not be a bad idea. To back up that point, here you go. This is exactly what I'm talking about. According to Kaspersky, some versions of PIN Duo Duo, which were suspended by Google from its app store, exploited Android vulnerabilities to install backdoors and gain user data access.

So there you go. Tangible accusations, the sort of evidence that has been noticeably absent in this whole TikTok controversy. Quoting Bloomberg. In one of the first public accountings of the malicious code, Kaspersky laid out how the app could elevate its own privileges to undermine user privacy and data security. It tested versions of the app distributed through a local app store in China where Huawei, Tencent, and Zhao Mi run some of the biggest app markets. Kaspersky's findings shared with Bloomberg News were among the clearest explanations from an independent security team for what triggered Google's action and malware warning last week.

The cybersecurity firm, which has played a role in uncovering some of the biggest cyber attacks in history, said it found evidence that earlier versions of Pinduodoo exploited system software vulnerabilities to install backdoors and gain unauthorized access to user data and notifications. Google last week took the rare step of halting downloads of the app from one of China's largest online retailers, urging users to uninstall PinduO Duo if they already have it on their device. That warning, visible to users with Google mobile services, which are unavailable in China, calls the app harmful and warns it can allow unauthorized access to a user's data or device. The designation and warning were still in place as of Monday in Hong Kong,

PDD, which has rejected claims of its app containing malicious code, didn't respond to requests for comment on Monday. The security incident may add fuel to already heated rhetoric in the U.S. about data insecurity with Chinese apps, while Pinduo Duo is largely used in China, PDD's other app, Temu, which sells everything from clothes to kitchen supplies, has been the most downloaded app on Apple's U.S. app store for much of the past few months. It has not yet been the focus of lawmakers' scrutiny the way that bite dances, TikTok has, end quote. Also from Bloomberg and also something that I've been wondering about. Remember how I said every major tech platform has had huge AI research and development arms for the better part of a decade now? Like billions of dollars has been spent. In fact, Bloomberg

says in this piece that the top five tech platforms have around 33,000 employees working on AI right now. So how and why did Open AI swoop in and eat all their lunches? Quote, of all the questions that chat GPT has raised about the future of artificial intelligence, one still reverberates through Silicon Valley. Why couldn't the industry's largest technology firms breed in innovative service with a similar kind of impact, especially after amassing some of the world's largest AI teams? Just a few months after Research Lab OpenAI released ChatGPT, the chatbot became the fastest growing online service of all time, sparking a race between Google and Microsoft to plug generative AI into many parts of their software. Microsoft also has a partnership with OpenAI

and has invested more than $10 billion in the company. Adobe, meanwhile, has unveiled an AI image generator after the success of OpenAI's Dolly 2. Snap recently launched a chatbot similar to chat GPT and Facebook's meta platforms is racing to build similar AI personas. Most of this is in response to the work of OpenAI's tiny team of artificial intelligence experts who numbered just 154 people, according to Glass.A.I. The scuttlebut in the AI community is that OpenAI's success really comes down to clever marketing. The company has been on a promotional tear for the last two years with glowing media coverage

for earlier projects like its language model GPT3 and Dolly 2, but its success also comes down to the direct access its most specialized researchers have to the public. OpenAI isn't a product company but a research and development lab. That means it launched ChatGPT without the battalions of engineers and product managers who would normally have their hands in the development of a product at a larger tech firm and who inadvertently can create bottlenecks inhibiting the development of new tech. technology. Amazon makes an interesting alternative case study for turning AI research into successful products. Despite having the largest team of AI researchers in the industry more than 10,000

people, it has had mixed success turning its AI research into popular or innovative products. Nearly a decade ago, Amazon introduced Alexa to the world as an exciting new virtual assistant, but the service, available for free through the $99 Echo Speaker, has been something of a flop, having drained the company of billions of dollars. Many of Alexa's customers use it to play music or set timers and nothing more. Why are Alexa and other digital assistants like Siri and Google assistants so limited when chat bots like ChatGPT are so human-like and versatile? Because the latter tools are powered by large language models, which are trained to generate text based on huge datasets scraped from the web. Alexa is powered by a more limited command and control system,

which is programmed to recognize certain commands like, what time is it? Finally today, I keep hearing over and over how one area where folks think these large language models are about to potentially have a revolutionary impact is in the field of robotics. I told you about that startup doing real humanoid robot development. Well, here are two more. Vancouver-based sanctuary AI and Norway-based 1X, the latter of which just raised a $23.5 million series A2 led by get-this, the OpenAI Startup Fund with Participation. from Tiger Global and others. Quoting Wired. Sanctuary recently ran what it calls the first real-world

test of one of its robots by having a humanoid like this one, work in a store not far from the startup's headquarters. The company believes that making it possible to do physical work remotely could help address the labor shortages that many companies are seeing today. The aim is ultimately to use data from humans teleoperating the robots to teach algorithms to do more tasks autonomously. Gilbert, Sanctuary's CTO, believes that achieving human-like intelligence in machines will require them to interact with and learn from the physical world. OpenAI, the company behind ChatGBTBT, is also taking an interest in teleoperated humanoids. It is leading a $23.5 million investment in 1X, a startup-developing a human-like robot. The OpenAI Startup Fund believes in the

approach and impact 1X can have on the future of work. Brad Lightcap, OpenAI's C.O. and manager of the Open AI Startup Fund says, for humans to help robots with teleoperation, AI might also need to be developed to ease the collaboration between person and machine. Chelsea Finn, an assistant professor at UC Berkeley, recently shared details of a fascinating research project that involves using machine learning to allow cheap, teleoperated robot arms to work smoothly and accurately. The technology may make it easier for humans to operate robots remotely for more situations, end quote.

A little bit of a public service announcement for you here. that picture of the Pope in a snazzy-looking white puffy jacket that's been making the rounds on social media, it's not real. The image was created using Mid-Journey and then posted to Reddit. So I'm cluing you into it being a fake, just so you're hip to the truth, but also to ask this question. One of the things people are concerned about with this AI stuff is, can we ever be sure anything is real ever again, especially perhaps with memes going forward? So, is, Is this the first major fake meme of our new dubious meme AI era? Talk to you tomorrow.