Tech Brew Ride Home - Mon. 05/01 – Why Hollywood Fears AI

Episode Date: May 1, 2023

Gurman says the big Apple Watch OS overhaul is nigh. I can already tell you what the biggest tech IPO of 2023 is going to be. Are there signs tech earnings have turned or a corner, or, at least, have bottomed out? And why the AI revolution is behind the potential of a major labor strike in Hollywood. Sponsors: Ramp.com/techmeme This episode is brought to you by BetterHelp. Give online therapy a try at betterhelp.com/techmeme and get on your way to being your best self. Links: Apple to Upgrade Its Watch Operating System With New Focus on Widgets (Bloomberg) SoftBank's Arm registers for blockbuster U.S. IPO (Reuters) Microsoft makes its AI-powered Designer tool available in preview (TechCrunch) Big Tech Earnings Spark Hope That Worst Is Over (WSJ) ChatGPT Will See You Now: Doctors Using AI to Answer Patient Questions (WSJ) Will a Chatbot Write the Next ‘Succession’? (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 technical. me right home for Monday, May 1st, 2023. I'm Brian McCullough today. German says the big Apple Watch OS overhaul is nigh. I can already tell you what the biggest tech IPO of 2020 is going to be.

Are there signs tech earnings have turned a corner or at least have bottomed out and why the AI revolution is behind the potential of a major labor strike in Hollywood? Here's what you miss today in the world of tech. Looks like aside from the XR headset announced, the big news at WWDC. see this year will be a complete overhaul of watchOS. Mark German has teased this before, and in his newsletter this weekend, he puts his marker down officially with the news that watchOS 10 will see Apple make widgets a core part of the watch again. The widget system will combine the old glances and iOS 14's style of widgets, which I don't know, sounds confusing, but, quote, when the company launched the original Apple Watch in 2015, WatchOS was built

around four main areas. The watch faces, a widget interface called glances, the home screen filled with app icons, and an area to access frequent contacts. Within a few years, Apple adjusted the strategy, ditching widgets and frequent contacts in favor of highlighting notifications and multitasking capabilities. But now Apple is trying something different. As part of WatchOS 10, the company is planning to bring back widgets and make them a central part of the interface. The new widget system on the Apple Watch will be a combination of the old watchOS Glances system and the style of widgets that were introduced in iOS 14 on the iPhone. The plan is to let users scroll through a series of different widgets for activity tracking,

weather, stock tickers, calendar appointments, and more, rather than having them launch apps. The new interface will be reminiscent of the Siri Watch Face introduced in WatchOS 4, but it will be available as an overlay for any watch face. It's also similar to widget stacks, a feature in iOS and iPadOS that let users pile mini-w widgets into one and scroll through them. As part of the overhaul, Apple is testing the idea of changing the functions of some of the watch's buttons. Currently, a press of the digital crown launches the home screen. For the next version of watchOS, Apple may have that open up widgets instead. The move is an admission that the iPhone-like app format doesn't always make sense on a watch, a place where you want as much information as possible

with the least amount of poking around. Seven years since their introduction, Apple Watch apps have barely caught on. The company also hasn't gotten enough third-party developers on board, especially when you compare with other platforms. A recent filing in Europe illustrates this point. The Watch App Store has fewer than a million monthly users in the region, Apple Disclosed, versus 101 million on the iPhone. In light of that, watch OS 10 will give people what they want, even quicker access to bits of information. Still, the shift may be jarring for some long-time Apple Watch users. That's why I wouldn't be surprised if the company considers making the new interface optional, at least at first, end quote. Yeah, I don't know about this. I know we all have a tendency to

be like, don't change the UI because I'm used to it, but still, I really would need to try this out for a couple days to be convinced, I think. Remember when Tech IPO News was a regular part of this show? It's been a while. But we... do know what will be the biggest tech IPO of this year, probably by a country mile. Reuters is reporting that Arm has confidentially filed with regulators for a U.S. IPO. Sources say Arm seeks to raise between $8 and $10 billion on the NASDAQ, and this is expected to be 2023's largest tech IPO because who else is going to be doing one of these at this size anytime soon?

SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to NVIDIA for $40 billion, collapsed last year because of objections from U.S. and European antitrust regulators. Since then, arms business has fared better than the broader chip industry, thanks to its focus on data center servers and personal computers that generate higher royalty payments. The company said sales were up 28% its most recent quarter. Arms IPO is expected to boost the fortunes of SoftBank, which is battling to turn around its giant Vision fund, which has been hit by losses due to the declining valuations of many of its holdings in Texas. technology startups. Earlier this year, Arm rebuffed a campaign from the British government to list its

shares in London and said it would pursue a flotation on a US exchange, end quote. What have those IPO announces been replaced with on the show? AI project launches, right? One of those now, before we close the show with the usual grouping of AI headlines, Microsoft's Canva-like web app designer, which leverages user-created content and OpenAI's text to image, Dolly II to ideate designs has launched in public preview. Worth checking out, quoting TechCrunch. Announced in October, designer is a Canva-like web app that can generate designs for presentations, posters, digital postcards, invitations, graphics, and more to share on social media and other channels. It leverages user-created content and Dolly 2, OpenAIs text to Image AI to idiot designs with drop downs and

text boxes for further customization and personalization. Now, Designer can generate written captions and hashtags relevant for social media posts, offering several suggestions users can choose from. They can also create animated visuals complete with backgrounds and text transitions, powered by AI. In the future, designer will gain additional editing features, Microsoft says, including the ability to place an object in a specific spot and a graphic, and automatically fill in the rest of a picture. Forthcoming erase and replace background options, Meanwhile, will let users brush over objects, people, or backdrops. They didn't intend to be in a graphic.

Designer will remain free during the preview period, Microsoft says. It's available via the designer website and in Microsoft's Edge browser through the sidebar. Once the designer app is generally available, it'll be included in Microsoft 365 personal and family subscriptions and have some functionality free to use for non-subscribers, though Microsoft didn't elaborate. Addressing some of the legal questions that have sprung up recently around AI-powered image generation systems. Microsoft says that users will have full usage rights to commercialize the images they create with designer and image creator. It's unclear whether that might change in the future, though, given the ongoing court battles involving Open AI and other startups

commercializing generative AI tools, end quote. Last week was the traditional busy week for tech earnings reports. I didn't really linger on them that much because most of the reports were either fair to middling or at least surprisingly good. So, I guess it was a narrative violation, but it wasn't enough really to talk about, though maybe I should have. Apple and Shopify are still later to come this week, but I think Megan Bobrovsky in the Wall Street Journal is right to note that earnings from meta, Amazon, Google, and Intel last week were better than expected. Sparking hopes that the post-pandemic hangover in tech is fading. The only fly in the ointment is sales growth still lags, and the boom times for cloud computing might be hitting a while. all quote. Digital ad spending is stabilizing, for instance, and laptop buying is showing modest signs of life. The big tech companies that reported results this past week added a combined

$320 billion in market valuation after posting their figures, according to FACSET and Dow Jones market data. The current moment still bears little resemblance, though, to the lofty days of the pandemic that drove tech adoption to new heights. Cloud computing that is at the heart of almost all things tech demonstrates where many of these businesses find themselves. Microsoft, on Tuesday reported 27% growth for its cloud business down from about 50% growth during the pandemic. That was its lowest figure ever, though in line with expectations and enough to spark a 7.24% jump in its share price, its best post-earnings performance since 2015. Amazon also posted record low sales growth for its cloud business in the first quarter at 16%, though managed to do better than what Wall Street

had been bracing for. Google eeked out an operating profit for its cloud business for the first time, after shifting some costs elsewhere in the company. Amazon at first wowed on Thursday with strong results for its international and advertising businesses sending shares higher when it revealed on an earnings call that its profit-driving cloud business was growing at its lowest levels ever, and Chief Executive Indeed Jassy said customers were looking for ways to save, sentiment reversed. Amazon shares fell almost 4% on Friday. This past week's earnings reflected belt tightening. Facebook parent meta-platforms blew past Wall Street expectations for operating profit on Wednesday as layoffs that are part of CEO Mark Zuckerberg's self-described year of efficiency

near completion. A day earlier, Alphabet also posted a surprisingly strong operating profit and generated cash flow 28% ahead of analyst's expectations. Still, while Meta reported its first increase in sales in nearly a year because of continued improvements in its advertising business, sales were up less than 3%. That was well below last year's level and the 47% plus increase in the first quarter of 2021. We bottomed out in terms of sentiment, said Brian Weiser, an independent digital advertising consultant reflecting on what he called a solid quarter for digital ads-based companies, but he added, you should never expect that we're going to get back to double digits, end quote. All right, let's close today with two contrasting stories of AI. First, AI is either on the cusp

of changing things, or the potential of AI is already forcing changes. First, Will AI finally deliver the improvements and efficiency gains in health care that we've been waiting for for, what, 30, 40 years now? Some U.S. hospitals are testing if GPT3 can cut the time staff spend replying to online queries. A study claims that the first chat GPT version replied better than doctors to patient inquiries, quoting the Wall Street Journal. In California and Wisconsin, OpenAI's GPT Generative Artificial Intelligence is reading patient. messages and drafting responses from their doctors. The operation is part of a pilot program in which three health systems test if the AI will cut the time that medical staff spend replying to patients' online inquiries. UC San Diego Health and UW Health began testing the tool in April.

Stanford Healthcare aims to join the rollout early next week. Altogether, about two dozen health care staff are piloting this tool. Marlene Millen, a primary care physician at UC San Diego Health, who is helping lead the AI test, has been testing GPT in her inbox for about a week. Early AI-generated responses needed heavy editing, she said, and her team has been working to improve the replies. They're also adding a kind of bedside manner. If a patient mentioned returning from a trip, the draft could include a line that asked if their travels went well. It gives the human touch that we would, Dr. Millen said. There is preliminary data that suggests AI could add value. ChatGPT scored better than real doctors at responding to patients.

queries posted online, according to a study published Friday in the journal JAMA Internal Medicine, in which a panel of doctors did blind evaluations of posts. Epic, the company based in Verona, Wisconsin that built the MyChart tool through which patients can message their health care providers, saw logins more than double from $106 million in the first quarter of 2020 to $260 million in the first quarter of 2023. Epic software enables hospitals to store patient records electronically. Earlier this month, Epic and Microsoft announced that health systems would have access to OpenAIs GPT through Epic's software and Microsoft's Azure Cloud Service. Microsoft has invested in OpenAI and is building artificial intelligence tools into its products. Hospitals are piloting GPT3, a version of the large language model that is powering ChatGPT.

ChatGPT has mystified computer scientists with its skill in responding to medical queries, though it is known to make things up, including its ability to pass the U.S. medical licensing exam. OpenAI's language models haven't been specifically trained on medical data sets, according to Eric Boyd, Microsoft's corporate vice president of AI platform, though medical studies and medical information were included in the vast data set that taught it to spot patterns. Doctors working with chat GPT may be the best messenger, said John Ayers, a computational epidemiologist at the University of California, San Diego, and a author of the JAMA study, end quote. All of this speaks to that Mark Andreessen vision that I shared with you,

too long ago of doctors not being replaced by AI in the future so much as taking on a new role of AI whisper slash patient counselor. And finally, finally, the flip side. As labor contract negotiations heat up in Hollywood, you might have heard that one of those once a generation strikes might be imminent. Unions representing screenwriters and actors are actively seeking to regulate the use of AI-powered materials in producing Hollywood's content. Quote, the New York Times. When the union representing Hollywood writers laid out its list of objectives for contract negotiations with studios this spring, it included familiar language on compensation, which the writers say has either stagnated or dropped amid an explosion of new shows. But far down,

the document added a distinctly 2023 twist. Under a section titled Professional Standards and protection in the Employment of Writers, the Union wrote that it aimed to, quote, regulate use of material produced using artificial intelligence or similar technologies, end quote. To the mix of computer programmers, marketing copywriters, travel advisors, lawyers, and comic illustrators, suddenly alarmed by the rising power of generative AI. One can now add screenwriters. It's not out of the realm of possibility that before 2026, which is the next time we will negotiate with these companies, they might just go, you know what, we're good, said Mike Schur, the creator of the good place and co-creator of Parks and Recreation. We don't need you, he imagines hearing from the other

side. We have a bunch of AIs that are creating a bunch of entertainment that people are kind of okay with, and quote. Mr. Scher, who serves on the bargaining committee of the Writers Guild of America as it seeks to avert a strike before its contract expires on Monday, said the union hopes to, quote, draw a line in the sand right now and say writers are human beings, end quote. Actors fear that studios will use AI to replicate their voices while cutting them out of the process. We've seen this happening. There are websites that have popped up with databases of characters' voices from video games and animation, said Lindsay Rousseau, an actress who makes her living doing voice work. on-camera actors point out that studios already use motion capture or performance capture to replicate artists' movements or facial expressions. The 2018 Blockbuster Black Panther relied on this technology for scenes that depicted hundreds of tribes' people on cliffs, mimicking the movements of dancers hired to perform for the film. Some actors worry that newer versions of the technology will

allow studios to effectively steal their movements, quote, creating new performance in the style of a Wushu master or karate master and using that person's style without consent, said Zeke Alton, a voice and screen actor who sits on the board of his local union, Sag Aftera in Los Angeles, and Hollywood writers have grown increasingly anxious as chat GPT has become adept at mimicking the style of prolific authors. Early on in the conversations with the Guild, we talked about what I call the Nora Ephron problem, said John August, who is on the Writers Guild negotiating committee, which is basically what happens if you feed all of Nora Ephron's scripts into a system and generate an AI that can create a Nora Ephron sounding script, end quote.

Mr. August, a screenwriter for movies like Charlie's Angels and Charlie on the Chocolate Factory, said that while artificial intelligence had taken a back seat to compensation in the Writers Guild negotiations, the union was making two key demands on the subject of automation. It wants to ensure that no literary material, scripts, treatments, outlines, or even discrete scenes can be written or rewritten by chatbots. A terrible case of like, oh, I read through your scripts, I didn't like the scene, so I had ChatGPT rewrite the scene. That's the nightmare scenario, Mr. August said.

The Guild also wants to ensure that studios can't use chatbots to generate source material that is adapted to the screen by humans the way they might adapt a novel or a magazine story. Sag Aftera, the Actors Union says more of its members are flagging contracts for individual jobs in which studios appear to claim the right to use their voices to generate new performances. A recent Netflix contract sought to grant the company free use of a simulation of an actor's voice, quote, by all technologies and processes now known or hereafter developed throughout the universe and in perpetuity, end quote. To Niagara in a sleeper, there's no honeymoon that's cheaper. The train goes slow. Off we're going to shuffle, shuffle off to Buffalo. That one's way old school. Talk to you tomorrow.