Tech Brew Ride Home - Mon. 11/13 – Can OpenAI Outrun Everybody?

Episode Date: November 13, 2023

OpenAI is probably going to raise a ton more money to attempt to stay at the top of the AI heap. You might get your money back if you get scammed on Zelle all of the sudden. Would you trust ex-FTX executives to launch a new crypto exchange? And why did Apple pause all OS development for a week recently? Sponsors: Collective.com/ride and tell them ride sent you Miro.com/podcast Links: OpenAI chief seeks new Microsoft funds to build ‘superintelligence’ (Financial Times) Exclusive: Google in talks to invest in AI startup Character.AI (Reuters) Payments app Zelle begins refunds for imposter scams after Washington pressure (Reuters) Key Witness at Sam Bankman-Fried Trial to Launch New Crypto Exchange (WSJ) Apple Is Taking Extra Care With ‘Ambitious’ iOS 18 Update (Bloomberg) Sony PlayStation Portal Review (PCMag) 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, November 13th, 2023. I'm Brian McCalla today. OpenAI is probably going to raise a ton more money to attempt to stay on top of the AI heap. You might get your money back if you get scammed on Zell all of the sudden. Would you trust ex-FTX executives to launch a new crypto exchange? And why did Apple pause all OS development for a week recently? Here's what you missed today in the world of tech. They're not done yet, maybe not even remotely. Sam Altman says he expects, to, quote, raise a lot more money from Microsoft and other investors to keep up with the punishing costs of building more sophisticated LLMs, quoting the Financial Times. In an interview with the

Financial Times, Altman said his company's partnership with Microsoft Chief Executive Satchin Adela was working really well and that he expected to raise a lot more over time from the tech giant among other investors to keep up with the punishing cost of building more sophisticated AI models. Microsoft earlier this year invested $10 billion in Open AI as part of a multi-year agreement that valued the San Francisco-based company at $29 billion, according to people familiar with the talks. Asked if Microsoft would keep investing further, Altman said, I'd hope so, he added, quote, There's a long way to go and a lot of compute to build out between here and AGI. Training expenses are just huge, end quote. Altman said revenue growth had been good this year without providing financial details and that the company remained unprofitable due to

training costs. But he said the Microsoft Partnership would ensure, quote, that we both make money on each other's success and everybody is happy. Right now, people say, you have this research lab, you have this API, you have the partnership with Microsoft, you have this chat GPT thing. Now there is a GPT store, but those aren't really our products, Altman said. Those are channels into our one single product, which is intelligence, magic intelligence in the sky. I think that's what we're about, end quote. Altman, mean, while splits its time between two areas, research into how to build superintelligence, and ways to build up computing power to do so. The vision is to make AGI figure out how to make

it safe and figure out the benefits, he said. Pointing to the launch of GPs, he said, Open AI was working to build out more autonomous agents that can perform tasks and actions such as executing code, making payments, sending emails, or filing claims. We will make these agents more and more powerful, and the action will get more and more complex from here, he said. The amount of business value that will come from being able to do that in every category, I think, is pretty good. The company is also working on GPT5, the next generation of its AI model, Altman said, although he did not commit to a timeline for its release. It will require more data to train on, which Altman said would come from a combination of publicly available

data sets on the internet, as well as proprietary data from companies. OpenAI recently put out a call for large-scale data sets from organizations that, quote, are not already easy. accessible online to the public today, particularly for long-form writing or conversations in any format, end quote. So OpenAI has the lead right now. They seem to be focused on keeping that lead, and raising a ton more money would help them do that, obviously. But remember those GPTs, those autonomous agents that we spoke about several times last week. Well, there is another contender for the AI crown, for whom that was their whole bag. So can they outman? open AIs move into their territory? Well, sources say that. Character AI, the company I'm talking about,

is in talks to raise hundreds of millions of dollars from Google and to raise equity funding from VC investors, which could value the company at more than $5 billion. Quoting Reuters. The investment, which could be structured as convertible notes, according to a third source, will deepen the existing partnership character AI already has with Google, in which it uses Google's cloud services and tensor processing units or TPUs to train models. models, founded by former Google employees Noam Shazir and Daniel DeFritus. Character AI allows people to chat with virtual versions of celebrities like Billy Ilish or anime characters while creating their own chatbots and AI assistants. It's free to use, but offers subscription models that charge $9.99 a month

for users who want to skip the virtual line to access a chatbot. Character AI's chatbots, with various roles and tons to choose from, have appealed to users aged 18 to 24, who contributed about 60% of its website traffic according to data from similar web. The demographic is helping the company position itself as the purveyor of more fun personal AI companions compared to other AI chatbots from OpenAIs chat GPT and Google's Bard.

The company previously said its website had attracted 100 million monthly visits in the first six months since its launch, end quote. In a major policy change, banks on the payment app Zell have started refunding scam victims as of June of this year. This came after pressure from U.S. lawmakers, quoting Reuters again. The 2100 financial firms on Zell, a peer-to-peer network owned by seven banks, including J.P. Morgan Chase and Bank of America, began reversing transfers as of June 30th for customers duped into sending money to scammers,

claiming to be from a government agency, bank or existing service provider, said early warning services, the bank's company that owns Zell. That's well above existing legal and regulatory requirements, Ben Chance, Chief Fraud Risk Officer at EWS told Reuters, federal rules require banks to reimburse customers for payments made without their authorization such as by hackers, but not when customers themselves make the transfer. While Zell disclosed August 30th that it had introduced a new reimbursement benefit for specific scam types, it has not previously provided details on its new imposter scam refund policy due to worries that doing so might encourage criminals to make false scam claims, a person said.

The new policy marks a major shift from last year when bankers, including J.P. Morgan, CEO Jamie Diamond, told lawmakers worried about rising scams that it was unreasonable to require banks to refund transfers that customers were tricked into approving. Following its launch in 2017, Zell grew to become one of the largest U.S. peer-to-peer payments networks by total payments, a March 22 New York Times report that scams were flourishing on Zell caught the attention of lawmakers, frequently critical of big banks, including Senator Elizabeth Warren. She and other lawmakers started an investigation, estimating that Zell users had lost $440 million to all types of fraud in 2021 alone. During a Senate hearing last year, Warren told Diamond and other bank CEOs that they had created

a perfect weapon for criminals, but had not stood by their customers. More than 100 million people, all with U.S. bank accounts, have access to Zell according to EWS. Impersonator fraud was the most reported scam in 2022 across all payment methods in the U.S. accounting for $2.6 billion in losses, according to the Federal Trade Commission. Banks worry that covering the cost of authorized transactions will encourage more fraud and put them on the hook for potentially billions of dollars. Instead of requiring lenders to reimburse customers, EWS has implemented a mechanism that allows banks to clawback funds from the recipient's account and return them to the sender, said chance. Lenders on Zell are also now required to implement a tool that flags

transfers with risky attributes, such as a payment to an account that has never transacted on the Zell network, said Chance. He said Zell has seen a step-change reduction in fraud and scam rates this year, but declined to provide details, end quote. Ex-FTX executives, including its General Counsel Ken Sun, planned to launch a new crypto exchange called Backpack. They say they want to protect user funds with lessons from FTC's failure, which, you think, quoting the journal. TREC Labs, a Dubai-based startup led by the former FDX General Counsel, Kansan, received a license from the Emirates Crypto-regulator last month.

Another ex-FTX employee, Armani Ferranti, is chief executive of Trex holding company in the British Version Islands and also runs a partner firm called Backpack that designs and operates digital currency wallets. Sun's former legal deputy, who is also Ferranti's wife, sits on Trek's executive team, too. The venture is looking to sell a 10% stake to investors at evaluation of over $100 million. Sun and Ferranti said they wanted to use the lessons they had learned from FTX's failure to protect user funds. Backpack Exchange, the name under which

TREC labs will do business, will use backpack's technology to allow users to hold funds in their own self-custody crypto wallets that the exchange itself wouldn't be able to unilaterally access, they said. Such wallets were designed using so-called multi-party computation techniques that require several parties to approve any transaction. Customers on Backpack Exchange, which plans to launch in beta later this month, would be able to verify their holdings at any time, they said. It is unclear what sort of reception they will face from investors and users, given their background working at FTX. Ferranti's name, not Sons, appeared in a press release last month announcing the launch of Backpack Exchange.

In a post-FTX world, you need trust and trust. transparency to create a true alternative to the other players, Sun said, end quote. Which, to that, again, I say, you think? I didn't get to this last week, but word came down last week that Apple had paused work on all OS updates for a week. In short, quality control seemed to have broken down a bit. Quoting Mark German. Late last month, Apple head of software engineering Craig Federigi made a rare call. He decided to freeze development work on the company's next major software updates because the quality of initial versions missed the mark. The break allowed Apple to debug the software and improve performance. The next generation of Apple's software, iOS 18 and other operating systems due next year, is even more critical than usual.

The company is racing to catch up with Google and OpenAI and Generative AI, and iOS 18 is poised to bring such technology to the iPhone. The iOS update also needs to be extra impressive because the iPhone 16's hardware, won't have any major advances next year. So Apple is banking on the software to sell people on the new models. In light of that, Apple is treading carefully, which helps explain the recent delay. By pausing work on iOS 18, along with iPad OS 18, MacOS 15, watchOS 11, and other next generation operating systems, engineers could spend a week focused exclusively on rooting out glitches. As of right now, the one-week stoppage probably won't noticeably postpone the ultimate release of the software. At worst, give Apple a little less time at the end of the development cycle to eliminate any last-minute glitches.

The good news is the move shows Apple is taking quality as seriously as ever. In 2019, Federi adopted a policy that his division calls the Pact, quote, we will never knowingly allow regressions in the build, and when we find them, we will fix them quickly, end quote. In other words, if the company finds that the addition of a new feature breaks something else in the software, a regression, that bug needs to be immediately fixed. It seems clear that Apple had struggled to follow his guidance with the development of iOS 18, MacOS 15, and watchOS 11, necessitating the pause. Apple also faces more daunting tasks with its 2024 software. After a few years of modestly sized updates to iOS, the next version of

the iPhone and iPad software could be relatively groundbreaking. Internally, Apple's senior management has described its upcoming operating systems as ambitious and compelling with major new features and designs in addition to security and performance improvements, end quote. And finally today, a review of the newly released PlayStation Portal. Will Greenwald at PCMag says, It is what it looks like, a limited, expensive gaming handheld with a mediocre screen that does little besides remote play streaming from a PS5. Quote, to create the portal, Sony basically cut a dual-stained.

GamePad in half and put an 8-inch touchscreen between the two parts. The grips and general layout are unmistakably those of a PS5's controller. It has the same white-on-black look, transparent face buttons and direction pad, and black analog sticks. The options and share buttons are where you'd expect them to be, though the PlayStation and mic-mute buttons are transplanted from the controller center to the inside edges of the left and right halves, respectively. The Dual Senses game pads's Many features are here, including motion controls, immersive haptic feedback, and triggers with adaptive resistance. There's no clickable touchpad, but the touchscreen serves the same purpose. The controls are predictably great because the portal basically repurposes the hardware from

an already fantastic controller. The screen works as intended, but the 1080P resolution looks fuzzier than most modern mobile devices. The effect is exacerbated by the fact that you use the portal to navigate the PS5's menu system, which is designed for both a higher resolution and for much larger TV screens. In fact, the OLED switch looks a bit better at 720p, because its interface and biggest games are made with both TV and handheld use in mind. Resolution isn't as big an issue as the fact that the portal uses a pretty basic LCD. There's a reason why many phones, along with the Razor Edge and the higher-end switch, use OLED screens, as they usually have better contrast and much wider color range.

LCDs are capable of producing colors that rival OLED screens, but that requires specific engineering. The portal's LCD seems pretty much stock. I had no problem pairing the portal with my PlayStation 5 over my home Wi-Fi 6 network. I could perfectly parry and easily dodge in Marvel Spider-Man 2 and detected little-to-no noticeable input lag. Video and audio also remained synced to the even if the picture sometimes got fuzzy by prioritizing minimizing latency over graphical fidelity. The only strange hiccup I found was with the touchpad functionality, which is mapped to two Dual Sense touchpad-sized rectangles that appear when you tap the touchscreen while playing a game. Swiping the screen launches photo mode while double-tapping brings up the map

and upgrade menus. The latter functionality isn't as consistent as the DualSense's non-screen touchpad. The question is, who needs a PlayStation Portable? portal. The PlayStation Portal is a strangely limited device that would have made more sense a decade ago when the Wii U was out and comparable in concept. Of course, Sony had the PlayStation Vita then, and it was a fully functional handheld gaming system that could also remotely play games from a PlayStation 4. And now you can remotely play PS5 games using nearly any phone with a controller that costs half as much, or any Bluetooth game pad, which costs even less. I can't see a reasonable use case for the portal that wouldn't be served more economically and with a controller. a better screen with many other devices. Ultimately, the portal is just a screen sandwiched between a controller,

and for $200, it should be more than that, end quote. Nothing for you today. Talk to you tomorrow.