Tech Brew Ride Home - Mon. 09/19 – Uber Hack ≡ GTA VI Leak?

Episode Date: September 19, 2022

Did the same kid who allegedly hacked Uber allegedly leak GTA VI gameplay over the weekend? Interpol drops a red ball on Do Kwan. iPhone 14 Pro users report their cameras literally shake when they try to take pictures. Instacart wants to break the tech IPO hex. And the bull and bear case for the Figma acquisition. Links: GTA 6 gameplay leaks online in 90 videos (The Verge) South Korean prosecutors ask Interpol to issue red notice for Do Kwon (Financial Times) iPhone 14 Pro camera shaking and rattling in TikTok, Snapchat, and other apps (9to5Mac) 'No One Is Profitable': GPU Mining Faces Dark Days After Ethereum Merge (PCMag) Instacart Plans to Focus IPO on Selling Employee Shares (WSJ) The Adobe-Figma deal is historic for tech startups — if it goes through (Protocol) Why Figma is Worth $20B And Other Observations From The Adobe Acquisition (Hunter Walk) 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, September 19th, 2020. I'm Brian McCullough today. Did the same kid who allegedly hacked Uber allegedly leak Grand Theft Auto 6 gameplay over the weekend? Annapol drops a red ball on Doquan. iPhone 14 pro users report their cameras literally shake when they try to take pictures.

Instacart wants to break the Tech IPO hex and the bull and bear case for the Figma acquisition. Here's what you miss today in the world of tech. Over the weekend, the world of gaming was rocked when a GTA forum user uploaded 90 gameplay videos of Rockstar's upcoming Grand Theft Auto 6. So that's one thing. People seeing actual scenes and gameplay of the biggest game in the world long before it was due to be released. There was even actual code visible in some of the videos. But also interesting, maybe was the user behind the leaks. who claimed to be the same person behind last week's Uber hack and said that they may leak GTA 5 and 6 source code soon.

This morning, Rockstar was forced to admit that their systems had been breached by someone, quoting the verge. PC Gamer reports that a user on the GTA forums has posted a 3-gigabyte file full of 90 videos of Grand Theft Auto 6 footage. It's not exactly clear how the footage was obtained. The massive leak lines up with some earlier reporting on GTA6, following a female playable character in some clips. Bloomberg reported earlier this year that GTA6 would include a female protagonist influenced by Bonnie and Clyde. Bloomberg reporter Jason Schreier says he has verified the leak is real through sources at Rockstar Games. The leaked videos are currently being posted to YouTube, Twitter, Reddit, and many gaming forums online.

in one video posted to YouTube, a playable female character named Lucia is seen robbing a restaurant and taking hostages. There is plenty of placeholder text showing this is clearly unfinished gameplay, and you can visibly see where the game engine is detecting objects in the scene. It's not clear how old the footage is, but some appears to be running on RTX 3060 TI and RTX 3080 cards, so the development build can't be any older than two years. Other clips show new non-playable character interactions, updated UI and animations, and even Rockstar's own internal debug tool for Grand Theft Auto 6 on PlayStation. While GTA6 is reportedly at least two years away, these leaked clips show early and unfinished development builds and testing of some aspects of the game. It's not the first time a Rockstar game has been leaked heavily. Trusted reviews was forced to donate more than $1 million to charity and issue an apology in 2018 after the site published detail.

about Red Dead Redemption 2 ahead of that game's launch. We've reached out to Rockstar owner Take 2 to comment on the leak and we'll update you if we hear back. Take 2 appears to have started filing takedown requests for some GTA6 footage hosted on YouTube. This video is no longer available due to a copyright claim by Take 2 Interactive now appears on some videos, but many others remain online, end quote. South Korean prosecutors have reportedly asked Interpol to issue a red notice for Doe Kwan and the South Korean government has been asked to revoke his passport. Meanwhile, Kwan denies being on the run, as it were, quoting the Financial Times.

Kwan is the co-founder of collapsed cryptocurrency operator Terraform Labs, and authorities allege that he is refusing to cooperate with an investigation into the $40 billion implosion of the Terra, USDA, and Luna tokens. An Interpol red notice is a request to law enforcement. Worldwide to, quote, locate and provisionally arrest a person pending extradition, surrender, or similar legal action, end quote, according to Interpol's website. Red notices are issued for fugitives, wanted either for prosecution or to serve a sentence. The prosecutor's office said that Kwan told investigators through his lawyer that he did not want to respond to their summons immediately.

Prosecutors said he disbanded the South Korean unit of Terraform Labs and left for Singapore at the end of April. We are doing our best to locate and arrest him, a spokesperson for the office said. He is clearly on the run as his company's key finance people also left for the same country during that time, end quote. After the arrest warrants were released, Kwan denied that he was on the run. I am not on the run or anything similar for any government agency that has shown interest to communicate. We are in full cooperation and we don't have anything to hide, Kwan wrote on Twitter on Sunday. We are in the process of defending ourselves in multiple jurisdictions. We have helped. ourselves to an extremely high bar of integrity and look forward to clarifying the truth over the

next few months, end quote. South Korean prosecutors have accused Kwan of financial fraud and are investigating him and his company after two complaints were filed on behalf of 81 investors over allegations that the business deceived investors, end quote. Some iPhone 14 pro owners are reporting that the camera physically shakes when taking photos or videos in apps, which include TikTok, Snapchat, and Instagram. Quoting 9 to 5 Mac. It appears that many popular third-party apps weren't quite prepared for the iPhone 14 Pro's new camera technology. A number of iPhone 14 Pro users are unable to take pictures and images using third-party apps like Snapchat, TikTok, and Instagram. These problems include the camera shaking,

rattling, and even making physical noises. Other users chimed in to say that they have seen similar problems with Snapchat, Instagram, and TikTok. A handful of videos showing this problem have also been shared to social media. In the videos, you can see the iPhone 14 Pro's camera shaking in the third-party apps, while the physical camera module itself is also making a grinding slash rattling noise of some sort. As of right now, it appears that this problem is only affecting the iPhone 14 Pro camera when it's used in a third-party app. Most of the complaints on social media say the problem is happening in social media apps like Snapchat, TikTok, and Instagram. Because this iPhone 14 Pro camera shaking, rattling problem is only affecting the

camera and third-party apps, it's almost certainly a software bug of some sort. It is likely that these third-party apps weren't prepared for the iPhone 14 Pro camera changes. In particular, it could be something related to optical image stabilization, hence the rattling sound in the camera module itself. As of right now, there's no fix for this problem, end quote. Apparently, many crypto miners are shutting down their rigs and making plans to sell off their GPUs, as GPU-based mining for most cryptocurrencies becomes unprofitable after Ethereum's merge, quoting PCMag. The merge killed it all off, says one miner named Philip Robb. All my stuff is idling now. Initially, many miners were hoping to switch to alternative cryptocurrencies such as Ergo and Ravencoin,

which can also be mined with PC graphics cards, but both currencies have so little value, mere dollars and pennies, that mining them is unprofitable compared to Ethereum, which is currently. valued at around $1,500. We tried mining Ravencoin using an Nvidia RtX-3080 graphics card today, but quickly realized it was a loss-making venture. According to the mining software, we'd only make between 13 to 26 cents a day, and that's before paying California's high electricity costs, which would likely result in a net loss. A miner named Blake Teter tells PCMag he's facing the same situation, despite owning dozens of GPUs with far more mining muscle. With my power costs, most coins appear unprofitable at this time, he says.

Indeed, what to mine.com shows that GPU-based mining for any cryptocurrency is currently unprofitable if you do so from California. It only becomes a money-making venture with a few coins if you live in a state with low electricity costs. But even then, profitability is in the pennies, well under the several dollars you could make mining Ethereum in the months before the merge, depending on your hardware setup, end quote. This morning I retweeted a Financial Times article that noted that, quote, Wednesday will mark 238 days without a tech IPO worth more than $50 million, surpassing the previous record set in the aftermath of the 2008 financial crisis and the early 2000s.com crash, and quote. So, as I asked before, who is going to step up into the breach to try to break this streak?

It looks like it's going to be Instacart because they kind of have to, having missed multiple previous windows to give their investors and employees a liquidity event. In fact, according to the Wall Street Journal, Instacart plans to mostly sell employees' stock during any forthcoming IPO to help cash staff out, issuing a small number of shares and limiting the amount raised for the company itself. Quote, the move could help Instacart, which was founded in 2012, retained talent by allowing employees more ways to benefit from their shares. Listed shares could also make Instacart more attractive to new employees than startups that have decided to wait for a better

market to list. The decision shows the pressure on some of Silicon Valley's oldest startups to go public even as technology stocks slump. Until recently, a large amount of investment available through the private market allowed startups to put off public offerings if they wanted to, delaying payouts to their employees. Companies are putting off listings further, as they're worried they won't get a good price in the current market. Instacart is one of the few companies bucking the trend and in the summer was targeting a fourth quarter listing. The IPO market is heading for its worst year in decades, leaving some startups with few options but to spend through their cash reserves while they wait for the stock market to calm. Instacart turned a net profit in the second quarter, which could explain why it is focusing its public listing on the sale of employee shares.

Late last year, hundreds of companies were getting ready to list. then high inflation, rising interest rates, and Russia's invasion of Ukraine, pummeled prices, drying up the appetite for IPOs. Highly valued startups like food delivery firm GoPuff and online marketplace, StockX, have delayed listing plans. Payments provider Stripe, founded in 2010, and last valued by investors at $95 billion, has also yet to go public. Listed companies similar to Instacard have seen their shares hit harder than most. Delivery companies DoorDash and Delivery Hero have each tumbled more than 50 percent, since the beginning of the year. Over the same period, the tech-heavy NASDAQ composite index

fell less than 30%. While Instacart will sell a small percentage of new shares, the bulk of its offering will come from employee shares that will be sold directly to new investors at an agreed-upon price ahead of a stock market debut. Details of the listing could change depending on market conditions and other factors. Instacart had previously leaned toward going public through a direct listing, the Wall Street Journal previously reported. Instacart posted strong second-quarter numbers, despite rising inflation and added competition from DoorDash and Uber, which have expanded their grocery delivery offerings. The San Francisco firm turned a net profit and saw revenue grow 39% from the year earlier period in the first three months through June. Instacart said earlier this year

that it had more than $1 billion in cash in marketable securities and last raised money in March of 2021, end quote. And finally today, while the IPO window seems shut until Instacart may be prize it open. Remember, Figma's recent sale to Adobe, in theory, is one of the greatest liquidity events of all time. But that's assuming the sale is allowed to be consummated. Protocol says the $20 billion acquisition will likely face antitrust scrutiny over whether the deal would snuff out competition or harm consumers by taking away choices, which it kind of obviously does. Quote, Antitrust regulators are certainly zoomed in on big tech right now and are closely scrutinizing transactions. Hindsight is 2020, but a lot of regulators now regret letting the Facebook WhatsApp deal happen,

said Henry Sue, a partner at the Bradley law firm who has worked in Silicon Valley and the FTC. People will be trying not to make the same mistake, he told me. Take the FTC's recent lawsuit against META for its acquisition of VR Fitness app within. Meta and Within aren't seen as obvious rivals, given that Meta's core Facebook business is all about ads, not VR Fitness, yet the government still sued to block the deal in July, saying it was choosing to buy market position to make itself dominant in VR. The distance between Within and meta is further. There's a lot more predictions you have to do, Sue said. Here, there's no question that Figma is competing with Adobe, end quote. The fact that they are direct competitors is going to worry regularly. that this is a killer acquisition, where the acquisition is intended to snuff out the competition,

even if it is pledging to keep Figma alive as its own autonomous product. It's not simply, is there going to be a Figma after this, Sue said. It's the killing of the competitive threat that Figma poses to Adobe, end quote. The other worry is whether this could ultimately harm consumers by taking away choices. Figma's own webpage directly comparing the two is a piece of evidence the government could use to show that the deal is taking away consumer choice when both are owned by the same companies, Sue said. There are other alternatives like Sketch, but it is much more limited in its use cases. For example, Sketch is Mac only. And if the deal hadn't cross-regulators radar by now, the hordes of upset Figma users that are tagging the FTC and DOJ directly on Twitter

to ask for an investigation, will assuredly raise a red flag about how consumers feel about the deal, and if the government feels it needs to step in to protect them, end quote. Both sides would know this, you would think, right? But Figma is arguing that the deal would be better for consumers in the long run, as Adobe's larger platform will allow Figma's superior software to reach more people. But at the same time, Adobe clearly wants this deal to happen because, well, this is probably exactly like the Facebook acquisition of Instagram. It's a deal that will probably look cheap in hindsight.

quoteing friend of the show, Hunter Walk. What percent of our market cap do we need to spend to protect the rest of it? That's how prices get calculated on deals like this. It's basically cover your ass math. Figma had crossed the This Matters to Adobe's Future Rubicon. They hit $400 million in annual recurring revenue and were continuing to double. Figma revenue, independent of margin, was increasingly displacing revenue that might have gone to Adobe, or more specifically creating pricing pressure on Adobe.

It was a product designed natively to be collaborative, to be easier to use than Adobe's professional tools, and without the baggage of features and nomenclature left over from years of software releases, platform shifts, and business model changes. When the autonomous car company Cruise got quickly snapped up by GM in 2016, Jaws dropped at the greater than $1 billion reported price, the answer there was the same. If autonomy is the potential future of your industry and you're not yet strong in that area,

what percent of your market cap is it worth to bring those cards into your hand? In that case, it was roughly 2.5 percent, if I'm remembering correctly. In Adobe's case, it was a larger percentage because Figma is way further along as a business, and the certainty the future of design at least looks like Figma is high. There you go. It's easy to beat up on Adobe. Dumb big company couldn't build Figma themselves, so ends up having to pay an eye-popping amount, but I'm going to suggest that you actually should give Adobe credit in this case for being in the position to make this offer. It wasn't too long ago that Adobe sold

shrink-wrapped package software for a one-time payment. Then the big innovation was they could decrease the physical cost of goods sold by making this upgrade downloadable. But they lacked the ongoing recurring revenue stream of a SaaS company, and that revenue model is so much more attractive and given a much higher multiple by investors. So they bid hard and move to a largely subscription creative cloud model. And it well worked. Over the last five years, Adobe dramatically outformed the NASDAQ index. That gap shrunk meaningfully over the last few days as investors questioned the Figma transaction. But that Wall Street reaction is short term, not what matters. What you should realize is that Adobe was only able to make this acquisition because they

escaped the old business model and were rewarded with a market cap that hit more than two hundred billion over the last 12 to 24 months. It's $140 billion as I write this post-transaction announcement. I'm not making a legal argument here about the FTC and how you define antitrust monopoly, etc. with regards to MNA, I'm just saying I think it's stupid and short-sighted to block a transaction like this. Adobe is giving their pound of flesh. Figma is being incredibly well-rewarded for innovation. And if you remove the potential for acquisitions by the market leader from the startup playbook, you're actually going to get fewer startups going after the market leaders. And that has worse ramifications for the economy and for consumers than incremental consolidation

like this, especially since there are plenty of other tools available to accomplish one or more of the same functions Figma does, end quote. He concludes by saying, hands off this one, Lena Khan, but something tells me that is wishful thinking. Nothing for you today. Talk to you tomorrow.