Tech Brew Ride Home - Mon. 05/22 – Meta Hit With Biggest Ever GDPR Fine

Episode Date: May 22, 2023

Meta got hit by the biggest ever GDPR fine in Europe. A crypto project got taken over by hackers who voted themselves into power. The startup that wanted to dethrone Google is shutting down. The E-sports bubble seems to be popping. And what is it actually like to try to use Google’s new AI tools? Sponsors: Nutrafol.com/men promocode ride Miro.com/podcast Links: Meta Fined $1.3 Billion Over Data Transfers to U.S. (WSJ) Sanctioned Crypto Mixer Tornado Cash Hijacked by Hackers (Bloomberg) Neeva, the would-be Google competitor, is shutting down its search engine (The Verge) The E-Sports World Is Starting to Teeter (NYTimes) Facebook parent in talks with Magic Leap over augmented reality deal (Financial Times) We Put Google’s New AI Writing Assistant to the Test (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 Tech meme right home for Monday, May 22nd, 2020. I'm Brian McCullough today. Meta got hit by the biggest ever GDPR fine in Europe. A crypto project got taken over by hackers who voted themselves into power. The startup that wanted to dethrone Google is shutting down. The e-sports bubble seems to be popping.

And what is it actually like to try these new Google AI tools? Here's what you miss today in the world of tech. The European Union has fined meta $1.2 billion euro over centi. sending European user data to the U.S. This is a record GDPR fine, and the EU has also ordered META to stop these transfers of data and delete the data within six months. But that might not be easy to do, quoting the journal. The ruling raises pressure on the U.S. government to complete a deal that would allow meta and thousands of multinational companies to keep sending such information stateside. Tech companies have been especially vulnerable to regulatory scrutiny absent such a deal, but most large international companies rely on a relatively free flow of data across the Atlantic,

and the steep find for META highlights the regulatory challenges that have mounted since a previous data transfer deal was overturned by European courts in 2020. Meta's top privacy regulator in the EU said in its decision Monday that Facebook has for years illegally stored data about European users on its servers in the U.S., where it contends the information could be accessed by American spy agencies without sufficient means for users to appeal. The $1.2 billion fine surpasses the previous record of $746 million or $806 million under the General Data Protection Regulation against Amazon in Luxembourg in 2021 for privacy violations related to its advertising business. The company has appealed that decision in Luxembourg courts.

In addition to imposing a fine, Monday's decision also orders met at a stop sending information about European Facebook users to the U.S. and delete data already sent within about six months. The decision, though, said Meta, could avoid those orders if Washington completes a transatlantic agreement with the EU to allow data transfers before then. Meta said it would appeal the ruling and seek a stay to delay its suspension orders. This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S. Meta said in a blog post responding to the decision. Meta, alongside many other U.S.-based tech companies, moves data from Europe to the U.S. where the company operates its main data centers

to offer its services. In the absence of the ability to store data about users in the U.S., meta could try to re-engineer its systems to keep much of Europeans' personal information in Europe, but such a project would be extremely complex. People close to the company have said. Meta has said in securities filings that if ordered to suspend transfers, it may have to stop offering services in the EU, where it has declared it has more than 255 million Facebook users. The broader European region accounts for nearly a quarter of meta's revenue, end quote. A researcher says crypto mixer tornado cash has been taken over by hackers. Actually, it happened on May 20th. The hackers apparently used a malicious governance proposal to give themselves a majority of the governance votes in the project.

Quoting Bloomberg. A security researcher at crypto investment firm Paradigm said on Twitter that an attacker granted themselves 1.2 million fake votes on Saturday. As the fake votes exceeded the 700,000 legitimate votes and allowed the attacker to gain full control over the governance of Tornado Cash. Tornowcash is a blockchain protocol and Torn. Its governance token enables holders to vote on proposed changes in the service. Now that they have all the votes, they can do whatever they want. In this case, they simply withdrew 10,000 votes as Torn and sold it all. The researcher said in a tweet, soon after the news of the exploit, Crypto Exchange Binance said that it will temporarily pause deposits of Torn. The token steadied on Monday in Asia after sliding on Sunday. Its price is down by over a

third to about $4.56 compared with an interday high on Saturday, according to Coin Gecko data. Tornado Cash is allegedly the preferred tool for hackers and criminals to launder stolen or illicit funds. Data from Dune Analytics showed over $8 billion worth had been sent through tornado cash since the service started in 2019. The U.S. Treasury Department imposed sanctions on tornado cash in August after saying the service was used by North Korean hackers to launder illicit gains.

North Korea's Lazarus Group laundered about $450 million through the service, a treasury official said then, end quote. Neva, the would-be Google competitor, co-founded by ex-Google adhead, Shridhar Ramoswamy, plans to shut down its ad-free search engine on June 2nd due to what it is calling a vastly changed search environment. Quoting the verge, the company says it's pivoting to AI and may be acquired by Snowflake, the information reported, but mostly seems to believe it's failed. Building search engines is hard. Niva co-founders Shrutar Ramoswami and Vivek Ragu Nathan wrote in a blog post announcing the shutdown. Ramaswami in particular is part of the reason Niva seemed promising. As the long time ahead of Google's ad business, few people are better equipped to know how to build and monetize search than he is. But Niva did it, they said. It built a good competitive search engine. It was actually well ahead of Google in some respects, like swapping 10 blue links for a more visual page and emphasizing human-created information.

but building the search engine was actually the easy part. Throughout this journey, we've discovered that it is one thing to build a search engine and an entirely different thing to convince regular users of the need to switch to a better choice. Ramoswamy and Reganathan continued. I've talked with Neva's co-founders several times over the last couple of years, and their list of grievances here is long and well-founded. They've had to contend with the billion-dollar deals, Google signs to make itself the default search engine on devices everywhere. The huge, are you sure you want to change pop-ups that show up whenever you try to set a new default browser or search engine, the difficulty of finding those settings in the first place, the mess, that is, the Chrome Web Store, on and on and

on. Anyone trying to build a new search engine is fighting a massively uphill battle. Neva was also a paid product, as the company tried to prove a business model for search other than ads and surveillance. Contrary to popular belief, the co-founders wrote in the blog post, convincing users to pay for a better experience was actually a less difficult problem compared to getting them to try a new search engine in the first place. Combine that with a tough economy and Neva simply couldn't see a business path forward. The timing here is really interesting. Neva is shutting down at what might be the best moment in two decades for upstart search engines.

Users are increasingly fed up with the ad load and subpar results they get from Google and AI chatbots like Bing and ChatGPT have upended everyone's idea about how to interact with the internet. Neva bet on this too developing a large language model called Neva AI that is in many ways more useful than what you'll get from Bing or Bard, but that wasn't enough either. Neva's search engine will shut down on June 2nd. Going forward, Neva will be shifting to a new area of focus, which seems likely to be LLM-based and related to the Snowflake Acquisition, end quote. From the is another pandemic-era bubble popping file, unable to turn a profit amid fewer hours

watched, some U.S. e-sports organizations are laying off staff, ending star player contracts, or even selling their teams at a loss. Quoting the New York Times. Most alarming, some viewers seem to be losing interests. They watched 14.8 million hours of the 2023 spring season of the League Championships series, the biggest U.S. Esports League, down 13% from a year earlier, and down 32% from 2021, according to estimates from the data firm e-sports charts. We're at a point where everyone has a lot of soul-searching to do, said Rob Breslau, a gaming and e-sports analyst. There has been way too much hype and too little of actual value. Just like in traditional sports, star e-sports players can earn seven-figure salaries and compete for championships,

attracting sponsors and fans along the way. Investors over the last decade purchased stakes in teams that participate in professional leagues for games like League of Legends, Overwatch, and Call of Duty. The biggest of those is the League Championship Series, a 10-team league established in 2013 and run by Riot Games, the company that created League of Legends. In the league, teams go head-to-head in League of Legends, a fantasy-themed game in matches that can draw millions of viewers and fill stadiums. But the leagues have struggled to make money. Partnerships to broadcast esports tournaments on sites like YouTube and Twitch have dissipated. Sponsors are slashing their advertising budgets, and owners are operating teams at a loss while paying huge salaries to esports players.

Some esports teams like evil geniuses have parted ways with many of their expensive League of Legends players. Others like 100 Thieves are laying off employees and senior executives. The stock price for Fays Klan, an e-sports group that went public last year, has plunged to just 50 cents a share. In March, Faze received a delisting notice from the NASDAQ, warning it could be removed from the stock exchange if its shares did not climb above $1. And on Friday, Faye said it was laying off about 40% of employees after a round of cuts in February. The news was earlier reported by Digiday. Jack Etienne, the chief executive of Cloud 9 in Esports group said he had cut costs by pulling out of nearly half the e-sports leagues. His organization

participated in, now eight from about 15. TSM, one of the most valuable e-sports organization, said Saturday that it was selling its slot in the league championship series. It's a big blow to the league akin to a marquee franchise leaving the NBA or NFL, because TSM is one of the oldest and most prominent brands in North American e-sports, end quote. Meanwhile, might a long, struggling company have found itself a lifeline? Sources are telling the Financial Times that META and Magic Leap are in talks for a multi-year deal in which Magic Leap could provide IP licensing and contract manufacturing for META's AR products. Quote, according to people familiar with early discussions,

meta is exploring ways in which Magic Leap could provide both intellectual property licensing and contract manufacturing in North America to help it build mainstream AR products. Magic Leap produces custom components, including high-tech lenses and associated software, which are key technologies that may be required to build a metaverse. However, people with the knowledge of the talks said the partnership is not expected to yield a specific joint meta-magic Leap headset. Two former employees said Magic Leap's biggest asset is the sophistication of its waveguides, technology that allows thin glass in front of the user's eyes to conjure up realistic images

at different depths. Meta declined to comment. Magic Leap would not confirm the talks, but said that partnerships were becoming a, quote, significant line of business and growing opportunity for Magic Leap. And quote. And finally today, a review of sorts. Wired goes hands-on with Google's duet AI writing aid. What are products like this actually like to use? Well, Wired says, be ready for a stiff robotic style, sometimes inaccurate information, and inconsistent docs and Gmail behavior, but it is great at drafting complaints. Quote, when I asked Google's AI writing aid to draft a happy birthday email to a

friend, it left my brain in the dust. I had taken about 90 seconds to craft a decent 81-word greeting, but the search giant's text generation feature knocked out a flawless 87 words in a third of the time. That's exactly what Google wants to see. The Help Me Write feature that launched in March, and was rolled out more broadly at the company's annual conference last week, is a radical step beyond the smart reply and smart composed tools that Gmail has offered for years to generate short phrases. With the new feature, you type a brief description of the email you want to send. wish happy birthday to a friend I made last year in San Francisco, then you click a button labeled create and a full draft appears. Each one bears a disclaimer. This is a creative writing aid and is not

intended to be factual. Though it can rapidly unspool drafts of polite emails to businesses or fluent essays on mundane topics, what I gained in time I sometimes lost through new headaches. Duets writing often comes across as stiff. It sometimes snuck in gender stereotypes and inaccurate information, and it wouldn't expound on subjects I needed it to, like drinking games. We're still learning and can't help with that. Try another request. The tool too often responded to me. Frustrations aside, the system will undoubtedly be widely adopted among the 2 billion people using Gmail and the 3 billion people using Google productivity software such as docs. Existing AI offerings, Smart Reply and Smart Compose drew 180 billion uses last year, Google CEO

Sundarpechai said last week, Help Me Write Loads via a pencil and star button located along the bottom of the composed window in Gmail or in the left margin of a Google docs page, and it provides the sort of responses that have become synonymous with OpenAI's chat GPT. Microsoft is testing a version of that technology and services, including Word and Outlook, with some business customers, but Google's Duet technology is the first comparable AI writing aid offered to consumers and built into widely used services. One of the first things I noticed is that duet's behavior can be inconsistent across Google services. I wanted to finish up. a script for friends who will emce a pre-wedding party filled with competitions, speeches, and

musical performances, but the version of duet in Google Docs wouldn't help me write a description of the well-known drinking game Flip Cup, nor would it explain Beer Pong. The duet over in Gmail correctly described both games. Google says that happened because Gmail's version of the feature is tuned to be less formal than the one in Google Docs, which is more likely to be used in workplaces or schools. The two products have separate teams, testing, and setting duet's boundaries. Pichai's demonstration at Google's IEO conference last week featured the writing of a formal refund request to an airline, and I found Duet and Gmail a skilled grumbler. Complaint to consumer protection regulators about event ticketing technology, no problem. Complaint to a shoemaker for souls wearing out too fast on point.

Note to a veterinarian asking for a doggie doctor's note, got it. Google has built a formidable complaint machine, an aspect of duet that will probably spur companies to use generative AI to defend themselves. For consumers, improvements are already in the works. end of this month, Gmail's text generator will draw on information from past emails in the same thread. The I.O. demo showed that a user planning a potluck could generate an email that referenced a planning document shared earlier in the thread. My complaints about shoes or tickets would become more persuasive if the system pooled transaction dates, model numbers, and other info from my inbox. Back over and docks, my frustrations with duet grew, however. It refused to generate

wedding vows, a use chat rebatee bt will serve, or a wedding reception speech with wife, but dropping with wife and trying related prompts showed it could generate speeches from the point of view of a groom's best man. The notion of a newly wedded couple speaking together was seemingly too alien for the technology. Duet could be more useful if it could ask for additional guidance before a draft is generated, like asking a user to specify the perspective for the text. Google says it's considering multi-turn experiences similar to chat GPT, where a user can engage the text generator and a dialogue to perfect the output.

Despite their disappointments and limitations, the due Duet features in docs and Gmail seem likely to lure back some users who began to rely on chat GPT or rival AI writing software. Google is going further than most other options can match, and what we are seeing today is only a preview of what's to come. When or if, duet matures from promising drafter to unbiased an expert document finisher, usage of it will become unstoppable. Until then, when it comes to writing those heartfelt vows and speeches, that's a blank screen left entirely to me, end quote. You might have seen one of the weekend bonus episodes pop up in your feed again this morning. It's because I got complaints from listeners over the weekend that the sound was too low, and then the ads would come in at the normal volume so it was jarring, to say the least.

Sorry about that. I actually know why it happened. Some of these interviews are nearly a decade old. The Shell Caffin interview was from February of 2015. I didn't have my proper recording efforts together at that point. It was done on Skype because Zoom wasn't even a thing yet. My son wasn't even born yet when that was recorded. I took the original episode down, hopefully boosted the sound, and I just republished it.

Let me know some of you if that made it better. If I post more of these episodes, I'll be sure to take the time to boost the volume levels like that again. Also, one more ask. You know I have a bunch of things cooking, and here's another one. Is there anyone out there who can help a partner of mine work on a business plan slash slide deck that we're trying to put together? Not to write it. All the data is already there. It just needs to be put into eye-catching graphs and charts.

and slides. And we don't trust AI to do it for reasons you might have just heard. So, I guess we're looking for a graphic designer, maybe, or just someone good at designing slide decks. Again, all the data is there. We just need someone to make it look good. We'll pay, of course. If interested in this project, hit me up at brian at techmeme.com. Thanks. Talk to you tomorrow.