Tech Brew Ride Home - Mon. 08/26 – Telegram CEO Arrested

Episode Date: August 26, 2024

French authorities have arrested Telegram CEO Pavel Durov. Chinese tech companies are spending like crazy on AI too, btw. What are the smart glasses and VR gear Meta is poised to give us next month? And Nvidia might make you rich, but it still seems like a bear of a place to work at. Sponsors: Lumen.me/ride Links: Telegram CEO Held Over Alleged Child Protection Failures on App (Bloomberg) Telegram messaging app CEO Durov arrested in France (Reuters) Is Telegram really an encrypted messaging app? (Matthew Green) China’s tech giants splash out on AI despite US restrictions (Financial Times) Apple Explores Robotics in Search of Life Beyond the iPhone (Bloomberg) Nvidia Rally Mints Millionaires Too Busy to Bask in New Wealth (Bloomberg) 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 for Monday, August 26, 2024. I'm Brian McCullough. French authorities have arrested Telegram CEO Pavel Dorov. Chinese tech companies are spending like crazy on AI2, by the way.

What are the smart glasses and VR gear meta is poised to give us next month? And Nvidia might make you rich, but it still seems like a bear of a place to work at. Here's what you miss today in the world of tech. Telegram CEO Pavel Durav has reportedly been arrested in France as part of a probe in telegram allegedly allowing a range of crimes due to a lack of moderation. At least that was the headline all weekend, but this morning Bloomberg is reporting that French agency Offman, established back in 2023 to prevent violence against minors, was the one that issued the arrest warrant. Quote, the 39-year-old Russian-born billionaire was stopped on Saturday at Le Bourgett

airport north of Paris after stepping out of a private jet, according to France's TF1 TV station. The following day, the investigating magistrate extended his detention from 24 to up to 96 hours, agents France press reported. Before that lapses on Wednesday evening, the magistrate must decide whether to press charges against Dharov, release him without charges, or name him as a witness in the investigation and let him go free. D'arov's arrest warrant was issued by Offman, a French agency set up last year to prevent violence against minors. At the heart of this case is the lack of moderation and cooperation of the platform, which has almost one billion. users, in particular in the fight against crimes against children. Jean-Michel Bernagau,

the Secretary General of Offman, wrote on LinkedIn, Duraov may also face allegations of enabling drug trafficking and promoting terrorism on Telegram, according to AFP, end quote. Quoting Reuters, the arrest of the 39-year-old technology billionaire prompted on Sunday a warning from Moscow to Paris that he should be accorded his rights and criticism from ex-owner Elon Musk, who said that free speech in Europe was under attack. There was no official confirmation from France of the arrest initially, but two French police sources and one Russian source who spoke on condition of anonymity, said that Dharav was arrested shortly after arriving on a private jet from Azerbaijan. One of the two French police sources said that ahead of the jet's arrival,

police had spotted he was on the passenger list and moved to arrest him because he was the subject of an arrest warrant in France. Telegram abides by EU laws, including the Digital Services Act, its moderation is within industry standards and constantly improving telegram said in a statement on the arrest. Telegram CEO Pavel Durav has nothing to hide and travels frequently in Europe, it said, it is absurd to claim that a platform or its owner are responsible for abuse of that platform, end quote. Derav, who has dual French and United Arab Emirates citizenship, was arrested as part of a preliminary police investigation into allegedly allowing a wide range of crimes due to a lack of moderators on Telegram and a lack of cooperation with police, a third French

police source said. A cybersecurity Jean-Dameh unit and France's National Anti-Fraud Police Unit are leading the investigation that source said, adding that the investigative judge was specialized in organized crime. We are awaiting a prompt resolution of the situation. Telegram is with you all, Telegram said. The French Interior Ministry, Police and Paris Prosecutor's Office had no comment. Russian lawmaker Maria Butina, who spent 18 months in U.S. prison for acting as an unregistered Russian agent, said Duraov, quote, is a political prisoner, a victim of a witch hunt by the West. Duraub's arrest led news bulletins in Russia. Telegram based in Dubai was founded by Dura, who left Russia in 2014 after he refused to comply with demands to shut down opposition communities on his VK social media platform, which he has sold. The encrypted application with close to 1 billion users is particularly influential in Russia, Ukraine, and the republics of the former Soviet Union. It is ranked as one of the major social media platforms after Facebook, YouTube, WhatsApp, Instagram, TikTok, and we chat, end quote.

Yes, but about that encryption. People have been talking about this for years. I trust Matthew Green on encryption matters, and so I want to read from you this post by Green, taking a look at Telegram's claims that it is a secure messenger despite lacking default and and encrypted messaging and any E2E encrypted option for group chats. Quote, what I want to talk about is one specific detail of the reporting, specifically the fact that nearly every news report about the arrest refers to Telegram as an encrypted messaging app. This phrase drives me nuts because, in a very limited technical sense, it's not wrong,

yet in every sense that matters, it fundamentally misrepresents what Telegram is and how it works in practice. And this misrepresentation is bad for both journalists and particularly for Telegram. users, many of whom could be badly hurt as a result. From your perspective as a user, an encrypted messenger ensures that each time you start a conversation, your messages will only be readable by folks you intend to speak with. If the operator of a messaging service tries to view the content of your messages, all they'll see is useless encrypted junk. That same guarantee holds for anyone who might hack into the provider's servers, and also for better or for worse, to law enforcement agencies that serve

providers with a subpoena. Telegram clearly fails to meet this stronger definition for a simple reason. It does not end-to-end encrypt conversations by default. If you want to use end-to-end encryption in Telegram, you must manually activate an optional end-to-end encryption feature called secret chats for every single private conversation you want to have. The feature is explicitly

not turned on for the vast majority of conversations and is only available for one-to-one conversations and never for group chats with more than two people in them. As a kind of weird bonus, activating end-to-end encryption in Telegram is oddly difficult for non-expert users to actually do.

For one thing, the button that activates Telegram's encryption feature is not visible from the main conversation pane or from the home screen. To find it in the iOS app, I had to click at least four times, wants to access the user's profile, wants to make a hidden menu pop-up showing me the options, and a final time to confirm that I wanted to use encryption. And even after this, I was not able to actively have an encrypted conversation since secret chats only works if your conversation partner happens to be online when you do this. This is a cryptography blog, so I'd be remitored. if I didn't spend at least a little bit of time on the boring encryption protocols, I'd also be missing a good opportunity to let my mouth gape open in amazement,

which is pretty much what happens every time I look at the internals of Telegram's encryption. I'm going to handle this in one paragraph to reduce the pain, and you can feel free to skip past it if you're not interested. According to what I think is the latest encryption spec, Telegram's secret chats feature is based on a custom protocol called MTProto 2.0. This system uses 2048-bit infinite field Diffy-Helman key agreements with group parameters, I think, chosen by the server. Since the Diffy-Helman protocol is only executed interactively, this is why secret chats cannot be set up when one user is offline.

MITM protection is handled by the end users who must compare key fingerprints. There are some weird random nonses provided by the server, which I don't fully understand the purpose of, and that in the past used to actively make the key exchange totally insecure against a malicious server, but this has long since been fixed. The resulting keys are then used to power the most amazing non-standard authenticated encryption mode ever invented, something called Infinite Garble Extension, IGE, based on AES, and with SHA2 handling authentication. I'm not going to go further than this. Suffice to say that Telegram's encryption is unusual.

If you ask me to guess whether the protocol and an implementation of Telegram Secret Chats is secure, I would say quite possibly. To be honest, though, it doesn't matter how secure something is if people aren't actually using it, end quote. In case you were curious, it's not just the big U.S. tech platforms. The FT is reporting that Chinese tech giants are splurging on AI infrastructure spending as well, doubling their 2024 KAPX spending. Alibaba, Tencent, and Baidu had a combined KAPS of around 7,000,000. $7 billion in the first half of this year up more than 50% year on year. Quote, TikTok parent bite dance has also increased AI-related spending backed by a cash pile of more than $50 billion and with the belief of being privately held and relatively free of

investor scrutiny, according to two people familiar with the matter. We'll continue to invest in R&D and AI CapEx to ensure the growth of our AI-driven cloud business. Alibaba chief, Eddie Wu, told investors this month, it's simply because we see a lot of unmet demand from many clients. Alibaba is buying processors to train its Tongyi series of AI models and ran out computing power to others. The Chinese tech giants CAPEX in the first half was up 123% from a year earlier. What we see when we're making these kind of CAPX investments as soon as we get a server up, that server is essentially instantly running at full capacity, Wu said.

We can expect to see a very high return on investment over these next quarters. Sales for the group's cloud business accelerated during the second quarter, rising six-pastroids. from a year earlier. Alibaba said AI-related product revenues had more than doubled year-on-year, end quote. It's Monday, so it must be time to check in with Mark German's weekend newsletter, among the nuggets in there this week, a look at Apple's robotics effort, but also his sources say meta will unveil prototype Orion AR glasses, a cheaper quest, and new AI features for Rayban meta at Connect, which is coming at the end of next month. Quoting Bloomberg. With robotics, Apple believes it can solve a series of first-world problems.

Your device is only useful if you can reach it. There are many occasions when you might like to use your computer, but it isn't nearby or your hands are otherwise occupied. Maybe you left a device in your home office, but now you're in the kitchen or living room and need it. You may want to take photos of things or launch a video conferencing session, but you're not holding a device or sitting directly in front of it. You might want to operate or check something in your home while being out of the house.

Attaching a robotic limb to the iPad, for instance, will potentially make the device more useful for video conferencing or browsing the web for recipes. If you're busy in the kitchen, it can swivel the screen around to face you. Someday an Apple robot could go further. Apple has envisioned machines that can do household chores like loading up a laundry machine or scrubbing down dirty plates, but that's still so far in the future that the ideas don't go beyond sketches on a whiteboard. Advances in artificial intelligence will also give the concept a boost. It's clear that AI will be at the core of any robotic device in the future. But Apple can also apply its expertise in sensors, advanced silicon, hardware engineering, and batteries,

as well as its ability to map the spaces around devices. Given all that, some people within Apple say it's the perfect time to tackle robotics. And shutting down the car project, which had hundreds of engineers with experience in self-driving technology and robotic systems, helped free up staff and resources to pursue the idea aggressively. But others say it's an exaggeration to describe robotics as some major new front-recent. that the company will be able to conquer. A successful robotics device could help Apple finally break into the smart home, an area where it's trailed behind Amazon and Alphabet's Google. The tabletop device might be the thing that finally helps Apple home devices stand out.

Meanwhile, over to Meta, Apple's September 10th event to launch the iPhone 16 won't be the only hardware debut next month. Meta platforms, the iPhone maker's biggest rival in wearable devices, will be holding its Connect conference on September 25th and 26th. Though much of Meta's presentation will focus on artificial intelligence features, it will also include new mixed reality headsets and smart glasses, I'm told. The biggest debut will be a preview of meta's future augmented reality glasses. The company will show off a prototype called Orion that it hopes will be the basis for an eventual AR glasses product.

Meta executives have been teasing this preview for weeks, and it should show their vision for the future of computing. Creating true AR glasses, something lightweight that consumers can wear all day, is no easy task. Apple has struggled with its own efforts, and now all signs point to meta being ahead. Meta already sells non-AAR smart glasses through a partnership with Rayban, and that product has been surprisingly popular. At the Connect event, Meta plans to show off new AI-driven software features for those glasses, as well as updated styles and colors. It will also expand sales of the device to additional areas. By next year, Meta plans to incorporate an AR-like display into

smart glasses, but it won't be as ambitious as the Orion prototype. I will also. I will also would expect both these products to eventually converge once AR technology advances enough. Meta will also unveil a new version of its mixed reality headset, possibly with the name Quest 3S. Multiple monoccurves have been discussed internally. This will be a new entry-level device meant to bring more people into the meta ecosystem. While the Quest 3 costs $500, meta has discussed pricing this budget-minded version at $300 to $400. The company has considered getting the cost down by selling the controllers separately, but at least some models of the new hardware will include them in the box. A lower-end quest would give meta an even bigger price advantage over

Apple. With the latest device, it's possible that meta will have a headset that costs a tenth of the $3,500 Vision Pro. That's just too big a difference to ignore, regardless of how good the Vision Pro is. If Apple wants to make headway in the mixed reality space, it will have to speed up efforts to bring down its price, end quote. Finally today, Nvidia's stock might be up 3,776% just since 2019. But current and former Nvidia staff say, nothing has really changed, at least, in terms of the work culture. Work hours are still grueling and high stress. Quoting Bloomberg.

The 31-year-old chipmaker has piled on market cap faster than any other company in history. Founder and chief executive officer Jensen Huang has established expectations of scrappiness and overworking with a chaotic structure where one manager can have dozens of direct reports, the current and former employees said, Rather than firing employees like his competitors, Wong has said he prefers to, quote, torture them into greatness. One former employee who worked in technical support for enterprise clients said he was expected to work seven days a week, often until 1 a.m. or 2 a.m. He said many of his former colleagues, especially those on engineering teams, worked longer hours. He described

the environment as a pressure cooker, noting several company meetings he characterized as yelling fights, but said the pay package made it hard to leave. He left in May and requested anonymity to speak frankly about the company. Another who worked in marketing until 2022 and requested anonymity to protect her career said she often attended seven to ten meetings per day, each with more than 30 people involved, often punctuated by bouts of fighting and shouting. But she said she put up with it for two years because of the, quote, golden handcuffs, the opportunity for even more wealth. NVIDIA hasn't had any trouble keeping its employees in recent years, in part because its stock grants typically vest or become available over a four-year period, giving workers incentive to stay

to earn their whole pay package. In 2023, 5.3% of employees left the company, but, after its valuation topped $1 trillion, that same turnover rate dropped by nearly half to 2.7% according to its 2024 sustainability report. The overall semiconductor industry's turnover rate is much higher at 17.7% according to Nvidia, end quote. Nothing more for you today. Talk to you tomorrow.