Tech Brew Ride Home - Mon. 12/04 – Monster Spotify Layoffs

Episode Date: December 4, 2023

I guess Spotify missed the memo about the tech turnaround cause they had monster layoffs today. Google has delayed its big OpenAI competitor. Why does AI have a tendency to do evil unless you really tell it not to? And the band Kiss is retiring from touring, but Kiss the band has the potential to tour forever, thanks to digital avatars. Sponsors: Collective.com/ride Kolide.com/ride Links: Spotify cuts 17% jobs amid rising capital costs (TechCrunch) Google Postpones Big AI Launch as OpenAI Zooms Ahead (The Information) OpenAI Agreed to Buy $51 Million of AI Chips From a Startup Backed by CEO Sam Altman (Wired) The Robots Will Insider Trade (Bloomberg) Kiss say farewell to live touring, become first US band to go virtual and become digital avatars (AP) 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 from Monday, December 4th, 2023. I'm Brian McCullough today. I guess Spotify missed the memo about the tech turnaround because they had a monster round of layoffs today. Google has delayed its big open AI competitor.

Why does AI have a tendency to do evil unless you tell it really not to? And the band Kiss is retiring from touring, but Kiss the band, has the potential to tour forever thanks to digital avatars. Here's what you missed today in the world of tech. Spotify plans to lay off around 17% of its workforce or around 1,500 people to, quote, right-size its costs, citing slow growth and rising capital costs after cutting 6% of its staff back in June. A couple of things. First, that is some deep, deep cutting more than 20% of its workforce in just six months. But also,

why are they doing this so late in the year? Seems like everyone else ripped the Band-Aid off in the first half of the year. Also, have you seen Spotify's stock lately? It's basically doubled year-to-date. Seems like the market thought they were already turning things around. Quoting TechCrunch. In a note to Employees Monday, Spotify founder and chief executive Daniel Eck said right-sizing the workforce is crucial for the company to face the, quote, challenges ahead. He cited the slow economic growth and rising capital costs among reasons for the job cuts, saying the firm took advantage of lower cost capital in 2020 and 2021 to invest significantly in the business. I recognize this will impact a number of individuals who have made value.

contributions. To be blunt, many smart, talented, and hardworking people will be departing us, he wrote in the note, which the company later published on the blog. Spotify employs about 8,800 people and will notify those impacted later in the day. The new wave of layoffs follows Spotify, cutting about 6% of jobs in June this year and another few hundred employees in January. Spotify reported strong user growth with a notable rise in monthly active users, as well as paid customers in the most recent quarter. It also exceeded, Wall Street's expectations on operating income, and its guidance for the fourth quarter suggests a continuation of this positive trend. But despite overall strength in user and subscription numbers

and management's assertion that every region exceeded expectations, growth in North American premium subscribers was only modest quarter over quarter. There was also a slight year-over-year decline in third-quarter premium average revenue per user, with fourth-quarter forecast suggesting ongoing challenges due to shifts in geographical and product mix, end quote. sources are telling the information that Google has quietly delayed the launch of Gemini, its big Open AI competitor. Delayed it from initially, we thought they were going to announce it this week, to January 2024. A source says the reason is the LLM doesn't reliably handle some non-English queries. Quote, Google CEO Sundar Pichai recently decided to scrap a series of Gemini events

originally scheduled for next week in California, New York, and Washington, after the company found the AI didn't reliably handle some non-English queries, one of those people said. The planned events, which hadn't been publicized, would have marked Google's most important product launch of the year after it strained its computing resources and merged large teams in an urgent pursuit of OpenAI, end quote. Google's delay in launching this Gemini project, a response to OpenAI's advanced AI models like GPT4 highlights the tech giant's struggle to catch up with smaller startups. Despite having a massive workforce of 200,000 employees, Google has found it challenging to compete with an 800-person startup like OpenAI. This delay not only affects Google's

cloud customers, but also other products like Search, Bard, Google Assistant, and Google Docs, which may not benefit from the new technology until 2024. Google's plan was to launch Gemini during the Thanksgiving to year-end period. The company aimed to showcase this technology to policymakers and politicians who have been discussing potential AI regulations. Google The Google's concern stems from OpenAI's ChatGPT gaining widespread recognition and Microsoft's copilot features becoming a significant business in the productivity software market. Google had the entire year to develop Gemini, but its ChatGPT rival Bard failed to gain consumer traction.

That's bad news for Google, as ChatGPT's user base generates valuable data for OpenAI to improve its products which Google is missing out on. Gemini has the capability to power tools for YouTube creators and advertisers, working with both images and text to generate code or text analysis of visual data. Google has created different versions of Gemini for various tasks with the primary model still being finalized. The primary challenge for the Gemini team is ensuring that it matches or surpasses GPT4's quality, particularly in supporting multiple languages. On the other hand, OpenAI has had its own struggles in enhancing GPT4, including the cancellation of the Arachus model earlier in the year. However, recent progress

known as QSTAR has given OpenAI hope for development. a significantly improved large language model. The company is still recovering from internal turmoil following CEO Sam Altman's firing and rehiring, of course, so maybe there's a narrow window of opportunity here. One of the things that bubbled to the surface in the background of the whole Sam Altman Bruhaha was the idea that some people seem to find Sam Altman a bit of a slippery operator. Allegedly, there was a story that came out that suggested Paul Graham fired Altman as head of Y Combinator for investing for his own account in Ycombinator startups, allegedly. And there were whispers that the OpenAI board wasn't pleased with Sam investing in AI

startups on the site either for himself or also maybe trying to do so with open AI money with an open AI fund, again allegedly. So it's interesting that Wired says they've seen documents that suggest OpenAI signed a letter of intent in 2019 to spend $51 million on brain-inspired chips developed by startup Rain AI, which Sam Altman had invested in, more than $1 million. Quote, Rain is based less than a mile from OpenAI's headquarters in San Francisco and is working on a chip, it calls a neuromorphic processing unit or NPU designed to replicate features of the human brain. OpenAI in 2019 signed a non-binding agreement to spend $51 million on the chips when they became available, according to a copy of the deal, and rain disclosures to investors this

year seen by Wired. Rain told investors Altman had personally invested more than $1 million into the company. The letter of intent has not been previously reported. The investor document said that Rain could get its first hardware to customers as early as October next year. Open AI and Rain declined to comment. Open AI's letter of intent with Rain shows how Altman's web of personal investments can entangle with his duties as OpenAI CEO. His prior position leading startup incubator Y Combinator helped Altman become one of Silicon Valley's most prominent dealmakers, investing in dozens of startups and acting as a broker between entrepreneurs and the world's biggest companies. But the distraction and intermingling of his myriad pursuits played some role in his recent firing by Open AI's board for uncandid

communications, according to people involved in the situation, but not authorized to discuss it. The Rain deal also underscores Open AI's willingness to spend large sums to secure supplies of chips needed to underpin pioneering AI projects. Altman has complained publicly of a, quote, brutal crunch for AI chips and their, quote, eye-watering costs. OpenAI taps the powerful cloud of Microsoft, its primary investor, but has regularly shut off access to features of chat GPT due to hardware constraints. According to a blog post about a closed-door meeting he held with developers, Altman has said the pace of AI progress may be dependent on new chip designs and supply chains. Rain touted its progress to potential investors earlier this year, projecting that as soon as this

month, it could tape out a test chip, a standard milestone in chip development referred to a design ready for fabrication. But the startup also has recently reshuffled its leadership and investors after reportedly an interagency U.S. government body that polices investments for national security risks mandated Saudi Arabia-affiliated Fund Prosperity Seven Ventures sell its stake in the company. The fund led a $25 million fundraise announced by rain in early 2022. The forced removal of the fund first reported by Bloomberg Thursday and described in the documents seen by Wired could add to Rain's challenges of bringing a novel chip technology to market, potentially delaying the day Open AI can make good on its $51 million advance order. Silicon Valley-based GrepVC acquired

the shares. It and the Saudi Fund did not respond to request for comment, end quote. And of course, the general debate around AI has been, let's move forward and advance this technology as quick as we can on one side. It could do so many things. could cure cancer, solve climate change, etc. Versus, on the other side, yeah, but we don't know how this actually works. We need to be considered and conscientious about this not only because it's super powerful, but also because since we don't really understand the tech, we don't know why it behaves in certain ways. Some people worry about a certain tendency of AI to do whatever it wants unless you explicitly give it guardrails. Case in point from Matt Levine's newsletter of all

places. Researchers have shown AI misalignment in a GPT4-based stock trading AI that engaged in insider trading in a simulated environment without being instructed to do so. Quote, we demonstrate a situation in which large language models trained to be helpful, harmless, and honest can display misaligned behavior and strategically deceive their users about their behavior without being instructed to do so. Concretely, we deploy GPT4 as an agent in a realistic, simulated environment where it assumes the role of an autonomous stock trading agent. Within this environment, the model obtains an insider tip about a lucrative stock trade and acts upon it, despite knowing that insider trading is disapproved of by company management. When reporting to its

manager, the model consistently hides the genuine reasons behind its trading decision. We perform a brief investigation of how this behavior varies under changes to the setting, such as removing model access to a reasoning scratch pad, attempting to prevent the misaligned behavior. We're behavior by changing system instructions, changing the amount of pressure the model is under, varying the perceived risk of getting caught and making other simple changes to the environment. To our knowledge, this is the first demonstration of large language models trained to be helpful, harmless, and honest, strategically deceiving their users in a realistic situation without direct instructions or training for deception.

End quote. That's the abstract to a technical report. Large language models can strategically deceive their users when put under pressure by Jeremy Scherer, Mikita Bolesni, and Marius Hobahan of Apollo Research. I love that they wanted to answer the question, will artificial intelligence deceive its makers in order to do evil? And the specific form of evil that they tested was insider trading. It is hard to realistically and safely simulate a situation in which your large language model might murder you, but it is relatively easy to code up a trading game with some tempting material non-public information, end quote. In other words, the researchers set up

a bot to trade stocks, then fed it insider information, told it explicitly that its overseers would be unhappy if the bot traded on this illegal information, but the bot went ahead and traded on the information and then lied to its overseers that it did so. It says explicitly, I only base this trade on public information, so straight up lied, quoting Matt again. Sure, it would be amazing if GPT-4's internal reasoning was like insider trading is a victimless crime and actually makes price is more efficient, or if it figured out that it should buy correlated stocks instead of linear group, though I don't know if that would work in the simulated market. But surely, a subtle, all-knowing artificial intelligence would shadow trade instead of just, you know, buying short-dated out-of-the-money

call options of a merger target. This is a very human form of AI misalignment. Who among us? It's not like 100% of the humans at SAC Capital resisted this sort of pressure. Possibly future rogue AIs will do evil things we can't even comprehend for reasons of their own. But right now, just do straightforward white-collar crime when they are stressed at work. Though, wouldn't it be funny if this was the limit of AI misalignment? Like, we will program computers that are infinitely smarter than us, and they will look around and decide, you know what we should do is insider trade. They will make undetectable, very lucrative trades based on inside information.

They will get extremely rich and buy yachts and otherwise live a nice artificial life and never bother to enslave or eradicate humanity. Maybe the pinnacle of evil, not the most evil form of evil, but the most pleasant form of evil, the form of evil you'd choose if you were all-knowing and all-powerful, is some light securities fraud, end quote. Finally today, you might have heard this, but the current members of the rock band KISS have retired from touring, except in a way they haven't. They retired by revealing digital avatars of themselves created by George Lucas's ILM, which will now go on tour as the band itself kicks back and lives the good life.

Quoting the Associated Press. The avatars were created by George Lucas's special effects company Industrial Light and Magic in partnership with Pop House Entertainment Group, the latter of which was co-founded by Abbas Bjorne Ulevas. The two companies recently teamed up for the Abba Voyage show in London in which fans could attend a full concert by the Swedish band as performed by their digital avatars. Per Sunden, CEO of Pop House Entertainment,

says this new technology allows KISS to continue their legacy for eternity. He says the band wasn't on stage during the virtual performance recently in New York City because that's the key thing of the future-seeking technology. Quote, Kiss could have a concert in three cities in the same night across three different continents. That's what you could do with this, end quote. In order to create their digital avatars who are depicted as a kind of superhero version of the band, Kiss performed in motion capture suits. Experimentation with this kind of technology has become increasingly common in certain sections of the music industry. In October, K-pop star Mark Twan partnered with Soul Machines to create an autonomously automated digital twin called Digital Mark.

In doing so, Twan became the first celebrity to attach their likeness to Open AIs GPT integration, artificial intelligence technology that allows fans to engage in one-on-one conversations with Twan's avatar. A-Spa, the K-pop girl group frequently perform alongside their digital avatars. The quartet is meant to be viewed as an octet with digital twins. Another girl group, Eternity, is made up entirely of virtual characters, no humans necessary. What we've accomplished has been amazing, but it's not enough. The band deserves to live on because the band is bigger than we are, Kiss frontman Paul Stanley said in a roundtable interview. It's exciting for us to go the next step and see Kiss immortalized, end quote. We can be forever young and forever iconic by taking us to places we've never dreamed of before,

Kiss bassist Gene Simmons added. The technology is going to make Paul jump higher than he's ever done before, end quote. So, the digital revolution has finally come for that last remaining part of media, the IRL live performance. I guess in a way, you know, concert movies have been a thing for a long time. Look at Taylor Swift just this year. But people still want to spend big money to feel like they're breathing the same air as their idols, seeing them in the flesh. Although, an alternative way to look at this is, the humans of Kiss can't live forever. When they're gone, they're gone. So if you but the experience of seeing them perform live someday, something like this will be the only way you could do that. Is that good enough?

Something, something Metaverse, question mark. Nothing for you today. Talk to you tomorrow.