Tech Brew Ride Home - Mon. 07/08 – Thinner And Bigger Watches

Episode Date: July 8, 2024

Ok, fine. Give me a thinner watch if it’ll also somehow have a bigger screen. Apple and Epic are just petty, squabbling children at this point. What if AI as it currently exists, is simply too expensive to be profitable? And a new social network is sort of back to the future. Sponsors: Ramp.com/techmeme Miro.com Links: What’s Next for the Apple Watch: Bigger Screens But a Similar Look (Bloomberg) Apple okays Epic Games marketplace app in Europe (Reuters) In a major update, Proton adds privacy-safe document collaboration to Drive, its freemium E2EE cloud storage service (TechCrunch) AI industry needs to earn $600 billion per year to pay for massive hardware spend — fears of an AI bubble intensify in wake of Sequoia report (Tom's Hardware) noplace, a mashup of Twitter and Myspace for Gen Z, hits No. 1 on the App Store (TechCrunch) 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 TechMeet. right home for Monday, July 8th. 2024, I'm Brian McCullough today.

Okay, fine. Give me a thinner watch if it also somehow has a bigger screen. Apple and Epic are just petty squabbling children at this point. What if AI, as it currently exists, is simply too expensive to be profitable, and a new social network is sort of back to the future. Here's what you missed today in the world of tech. Okay, okay, thinner and bigger. German says the Apple Watch Series 10 will be both somehow.

Also, about that big Siri update for AI coming soon, quote. The Apple Watch is nearing its 10th birthday, and the company has a chance to mark the occasion. This fall, Apple is planning some notable changes to its original smartwatch line, the series models, including larger displays. The device will also be thinner, though the design itself is unlikely to look much different. Both versions of the Series 10, codenamed N217 and N218, will get bigger screens. The change means Series 10 shoppers will be able to pick a screen that's about as large as the one found on the Apple Watch Ultra. The Ultra itself, meanwhile, won't get a major design change, but the current one only dates to 2022. There will be other enhancements under the hood.

Both the Series 10 and new Ultra 3 will get a new chip, which could lay the groundwork for some AI enhancements down the road. But if you're hoping for the device to run Apple Intelligence, the upcoming suite of AI features, you should reset your expectations. For now, that service is only headed to the iPhone, iPad, and Mac. Later, it will come to the Vision Pro, but there are no plans to bring the full initiative to the watch. It's still not clear whether Apple will brand the upcoming watches as an anniversary model or wait until next year, given that the Apple Watch was announced in 2014 but not released until 2015. The company could either tout the anniversary this year or have a splash year release in 2025.

The technology that measures high blood pressure or hypertension hasn't been as reliable as hoped during testing that may force Apple to postpone the release beyond this year. There have been particular concerns about the blood pressure feature working properly with the new Series 10 design. Even when the option does launch, it won't be a replacement for the blood pressure cuff that some consumers have at home. The mechanism isn't designed to give you an actual reading, unlike the heart rate and blood oxygen apps on the Apple Watch. Instead, it will figure out your baseline and monitor if your blood pressure is relatively high. Then you'll be able to take note of what you're doing when you're reading spiked. The

second feature, sleep apnea is facing even bigger challenges. That functionality is tied to a person's blood oxygen saturation. As of now, Apple Watches can't measure those levels because of an ongoing legal dispute with Massimo Corp. As for the big AI change in iOS, I'm told Siri features are likely to go into beta testing for developers in January and then debut publicly around the springtime, part of an iOS 18.4 upgrade that's already in the works. Other Siri features such as a new design and chat GPT integration will be coming later this year. As I wrote last week, Apple Intelligence will also be coming to the Vision Pro, but not until next year. Anyone looking to use the features on Apple's home devices, meanwhile, is out of luck. They'll have to wait until the company introduces

its AI-powered tabletop robot, something I've been reporting on for several months, end quote. At this point, anytime this story flares into news headlines, it just seems so petty and childish. These two are never going to give up their grudge, it looks like. Apple finally approved the Epic Games Store on iPhones and iPads in the EU. After Epic said, the app had been blocked due to buttons and labels being similar to the App Store's own buttons and labels. Quoting Reuters, Apple said the latest spat concern the Epic Sweden AB marketplace and has nothing to do with the video game maker's Fortnite app, which has already been given the green light. Before Apple's announcement. Epic said the iPhone maker had twice rejected documents the video game publisher

submitted to launch the Epic Game Store because the design of certain buttons and labels was similar to those used by its App Store. We are using the same install and in-app purchases naming conventions that are used across popular app stores on multiple platforms and are following standard conventions for buttons in iOS apps, Epic said in a series of posts on X. Apple's rejection is arbitrary, obstructive, and in violation of the DMA and we've shared our concerns with the European Commission, it said, end quote. For their part, Apple says it indeed asked Epic to fix the buttons in a future version of the Epic Game Store submitted for review. Epic CEO Tim Sweeney says Epic will, quote, fight this.

Quoting Apple Insider. In earlier reports, it was confirmed by Apple that Epic was mostly in compliance with EU-specific app review guidelines. The objectionable parts were a download button and related copy, which went against rules that forbid developers from making apps that can confuse consumers, that elements in the apps were actually Apple-made items. Epic had defended itself, insisting it used the same naming conventions and played across different platforms. Epic said it also followed standard conventions for buttons in iOS apps. Apple has since told Apple Insider on Friday that it has approved Apple's Marketplace app. It has also asked Epic to fix the buttons in a future submission of the app for review. In effect, Apple is allowing the

app to proceed with the questionable buttons since it's a relatively minor issue. Epic will still need to change them before its next submission to the App Store for review following publication, and Epic spokesperson reached out to Apple Insiders saying, quote, Apple has told some press channels that, though they have approved our current EGS iOS app for notarization, they are still demanding Epic change the user interface in a future version. Epic is disputing this, end quote. When asked for clarification about that statement, the spokesperson identified the request to change the user interface as the point of dispute. Should Epic not make the changes in a future update, it remains to be seen what Apple will do, end quote. Proton has launched Docs in Proton Drive, a privacy-focused alternative to Google Docs

after acquiring secure note-taking app standard notes back in April. Quoting TechCrunch. Proton launched Protron Drive, its end-to-end encrypted cloud storage service back in September 2022, starting with web support and expanding to mobile later the same year. The new collaborative document features are being made available inside Proton Drive, further extending the company's trademark pitch of robust security to another key productivity tool for both information workers and individuals alike. Proton is pitching the combo of Docs in Proton Drive as a secure and privacy-focused alternative to Google Drive and Docs, given that the latter's rival products lack Proton's flagship

zero-knowledge architecture. Per proton, docks in Proton drive include popular and essential features, such as full support for markdown and rich text, codeblocks, and checklists. It also confirmed compatibility for multiple types of files, including Microsoft. Dot DocX and the ability to embed images in documents. Collaboration features include the ability to add and reply to and resolve comments and see who else is viewing a document in real time with collaborative cursors. Invite to collaborate on docs are also supported. Participants without a proton account will be prompted to create a free account to gain access, which could help it drive additional registrations and stoke its growth. In line with Proton's freemium ethos, the new document features can be

accessed for free through Proton Drive, which offers up to five gigabytes of free storage. After this threshold, users wanting to tap the document capabilities will need to upgrade their paid tier of drive, end quote. So another new narrative around AI stuff is emerging, which is, is this stuff, as it is currently constituted, too expensive to ever be profitable as a business or especially as an industry? For example, a Sequoia Capital Analyst estimated companies developing AI models need to collectively generate around $600 billion per year to pay for their AI infrastructure. Quoting Tom's hardware. Despite massive investments in AI infrastructure by high-tech giants, revenue growth from AI has yet to materialize, indicating a significant gap in the ecosystem's end

user value. In fact, David Kahn, an analyst with Sequoia Capital, believes that AI companies will have to earn about $600 billion per year just to pay for their AI infrastructure, such as data centers. Invidia earned $47.5 billion in data center hardware revenue last year, with most hardware being compute GPUs for AI and HPC applications. Companies like AWS, Google, Meta, Microsoft, and many others invested heavily in their AI infrastructure in 2023 for applications like OpenAI's ChatGPT. However, will they earn back that investment? David Kahn believes this could mean that we are witnessing the growth of a financial bubble.

Kahn's math is relatively simple. First, he doubles in Vidia's run rate revenue forecast to cover the total AI data center costs. GPUs are half of that. The rest includes energy, buildings, and backup generators. Then he doubles that amount again to account for a 50% gross margin for end users, such as startups or businesses buying AI compute from companies like AWS or Microsoft Azure, which must make money too. Cloud providers, notably Microsoft, are heavily investing in GPU stockpiles.

NVIDIA reported that half of its data center revenue comes from large cloud providers with Microsoft alone, likely contributing around 22% of NVIDIA's Q4, for fiscal year 2024 revenue. Meanwhile, the company sold some $19 billion worth of data center GPUs in Q1 of fiscal year 2025. The introduction of Nvidia's B-100 B-200 processors promising 2.5 times better performance while costing only 25% more will likely drive further investments and create another supply shortage. According to the analysts, OpenAI, which uses Microsoft's Azure infrastructure, has seen a substantial increase in revenue from $1.6 billion in late 2023 to $3.4 billion in 2024. This growth underscores Open AI's dominant position in the market,

far outpacing other startups that are still struggling to reach $100 million in terms of revenue. Yet investments in AI hardware are growing. Even optimistic projections for major tech companies AI revenues fall short, Kahn says. Assuming Google, Microsoft, Apple, and META, each generate $10 billion annually from AI, and other companies like Oracle, BightDance, Alibaba, Tencent, X, and Tesla generate $5 billion each, there remains a $500 billion gap. There are significant challenges to the optimistic view of AI infrastructure investments. Unlike physical infrastructure, AI GPU computing, could be commoditized as new players enter the scene. AMD, Intel, not to mention custom processors from Google, Meta, and Microsoft,

particularly in the field of inference leading to intense price competition. Speculative investments often result in high losses and new processors rapidly devalue older ones, contrary to physical infrastructure's more stable value. Khan believes the industry must temper expectations of quick profits from AI advancements, recognizing the speculative nature of current investments and the need for sustained innovation and value creation. If it does not, the bubble worth hundreds of billions of dollars is set to blow, potentially leading to a global economic crisis, but we are speculating here, of course,

end quote. There's also been talk that the next, next, generation of the biggest AI models, say GPT6 instead of just GPT5, could cost upwards of $1 billion per model to train. Current state-of-the-art models, we believe, costs around $100, $250 to train. So if you're an anthropic, say, and you need to raise $1 billion just to train your next model, even if that model turns around and generates, I don't know, $300 million a year in revenue, that doesn't math out, does it? Here's an interesting idea. You know how nation states are trying to get into the AI game because they feel it is a matter of geopolitical and national security?

What if it becomes the nation states that fund the training of new models and then they give or lease those models to companies founded in their nations? That might be one solution to keeping AI aligned with human interests. Have the nation states controlled the technology? as we have with nuclear technology right now today. I don't know if that's the best solution, but it is one possible solution, and it might be a solution that is required if these things keep getting so expensive.

From the file, is this a new social network we should be paying attention to? By the way, this file is old and dusty with cobwebs in it. It has winners like TikTok in it from the past. It also has some in there that ended up not being so much, of a win, like Be Real. But say hello to NoPlace, a new social media app with colorful, customizable profiles and text-based updates targeting Gen Z, which has reached number one on the iOS App Store in the U.S., quoting TechCrunch.

Aiming to bring the social back to social media, a new app called No Place has surged to the top of the app store as it launched out of Invite-only Mode Wednesday, designed to appeal to a younger crowd or anyone who wants to connect with friends around shared interests. No Place is like a modern-day Myspace with its colorful, customizable profiles that allow people to share everything from relationship status to what they're listening to or watching, what they're reading or doing, and more. Boating well for its potential in the often difficult consumer social market, no place has already gone viral ahead of its public launch because of its feature that allows users to express themselves by customizing the colors of their profile. Though Gen Z may not have grown up with

MySpace and all its chaotic customizations, there's still a sense of nostalgia for a social networking experience they never had. I think that part of the magical fun part of the internet is gone now. Everything is very uniform, says founder and CEO Tiffany Zhang, who previously founded her own early stage consumer fund, pineapple capital, and in her teens, worked at binary capital, helping them source early stage consumer deals. Having played with every consumer social app over the past decade, Zhang has a good eye for the next big hit. She flagged musically in 2015 as the startup that would become the next snap or Twitter, for instance, it went on to become TikTok, after realizing how much traction it had with kids and other

younger users. I've always loved social, she says, but added that social media doesn't feel social anymore. Everything is just media. It feels very disconnected, end quote. In part, that's because all our content is now highly personalized, the founder says. We're watching different content and following different interests than our friends, so community is harder to find as a result, she says. With no place, the idea is to provide a place where people can follow their friends as well as find others who share their interests in one place. The app offers a mini customizable profile where they can share what they're up to right now and customize it to reflect their interests. Users' profiles can feature tags, which the app calls stars that are

the interests or topics that they care about. For example, users might add their astrology sign, their Myers-Briggs personality type, their hobbies, or their fandoms to their profiles, which then makes them discoverable to others. It even has a top-10 friends section reminiscent of MySpace with its top eight. But no place is more like a global group chat or Twitter-slash-X-rival than it is an alternative to Facebook as it focuses on text-based updates and doesn't support either photos or videos for the time being. Facebook 10 years ago or Facebook when I was using it in middle school was all-around cool life updates, Zhang says. We don't get that anymore, right? You can follow friends on Instagram, but it still highlights

less updates, end quote. Also on No Place users are meant to share what they're currently doing, not what they've already done. If you're in a new city or watching a show or checking out a new band, those could be your status updates. The app offers two feeds, one with your friends, and another global feed from everyone in the app and both are in reverse chronological order. There are no private profiles. The app is a free download on iOS and is available. in read-only mode on the web. Monetization plans are not yet underway. No place competitors with other friend-finding apps targeting Gen Z like Wiz, Ubo, PURP, LMK, and others do exist. The startup is backed by funding from investors, including 776, Alexis O'Hanian, forerunner ventures, and others.

According to Pitchbook data, the company raised $15 million in a Series A1 round at a pre-money valuation of $75 million, bringing its total raise to north of $9. million, end quote. I won't go into it here, but check out my Twitter or threads feed to hear about the family drama we had yesterday. Thankfully, we are all moving on from our loss. Thanks for your kind words about that. Talk to you tomorrow.