Tech Brew Ride Home - Mon. 12/16 – The Coming Battle Of Elon v. Sam

Episode Date: December 16, 2024

I break down the coming battle of the titans that is going to likely play out in 2025 between Sam Altman and Elon Musk. Mark Gurman says Apple is finally going foldable. Oh, and that Magic Mouse is finally that sin against God charger design. Every country wants a Starlink. And the big legal battle happening this week. Links: Meta Urges California Attorney General to Stop OpenAI From Becoming For-Profit (WSJ) OpenAI hits back at Elon Musk's lawsuit in court filing (Axios) Sam Altman reckons with a growing threat to OpenAI: Elon Musk (Financial Times) Apple’s New Vision for Computing Is a Giant Foldable iPad (Bloomberg) Europe signs €10.6bn Iris² satellite deal in bid to rival Elon Musk’s Starlink (Financial Times) Chip groups Arm and Qualcomm square off in high-stakes US trial (Financial Times) 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, December 16th, 2024. I'm Brian McCullough. Today, I break down the coming battle of the Titans that is likely going to play out in 2025 between Sam Altman and Elon Musk. Mark Gurman says Apple is

finally going foldable. Oh, and that magic mouse, that sin against God, charger design is going away. Every country wants a Starlink and the big legal battle happening this week. Here's what you miss today in the world of tech. Are we about to see the biggest clash of the Titans Silicon Valley has maybe ever seen. There are a whole swirl of worries for Open AI concerning the seemingly personal vendetta from Elon Musk, but we'll get to that in a second because Mark Zuckerberg has opted to pile on first. In a letter to California's Attorney General Rob Bonta, Mehta urged a halt to Open AI's for-profit transition, saying Elon Musk is, quote, qualified to represent the interests of Californians in this matter, quoting the journal.

Meta said allowing the chat GPT maker to become a for-profit company would set a dangerous precedent of allowing startups to enjoy the advantages of non-profit status until they are poised to become profitable. OpenAI's conduct could have seismic implications for Silicon Valley, Meta wrote in the letter. If OpenAI's new business model is valid, non-profit investors would get the same for-profit upside as those who invests the conventional way in for-profit companies, also benefiting from tax write-offs bestowed by the government. Meta hasn't previously weighed in on the long-running feud between Musk, who co-founded Open AI in 2015 and then left amid a power struggle in 2018 and OpenAI chief executive Sam Altman. In its letter, Meta said it supported

an effort by Musk and Chavon Zillis, a business and personal associate, to represent the interest of the public in deciding whether OpenAI will be allowed to become a for-profit company. Although we ask your office to take direct action, we believe that Mr. Musk and Ms. Zillis are qualified and well-positioned to represent the interests of Californians in this matter, Meta wrote, end quote. In a blog post, OpenAI turned back to firing at Elon Musk himself, writing, quote, you can't sue your way to AGI. We have great respect for Elon's accomplishments and gratitude for his early contributions to Open AI, but he should be competing in the marketplace rather than in the courtroom. It is critical for the U.S. to remain the global leader in AI. Our mission is to ensure AGI benefits all of humanity, and we have been and will remain a mission-driven organization. We hope Elon shares that goal and will uphold the values of innovation and free market competition that have driven his own success, end quote. And then Open AI proceeded to publish emails from Elon himself, which show him writing in favor of personally owning OpenAI and running it as a for-profit company. quoting Axios. The emails discussed the ideal structure for the company as well as the growing need for

more capital to fund the massive amount of hardware needed to pursue OpenAI's work. OpenAI maintains that Musk was pushing for a for-profit entity in which he had both control and a majority equity stake. OpenAI also disclosed that Musk registered in September 2017 to incorporate a public benefit corporation entitled Open Artificial Intelligence Technologies Incorporated. In September 2017, Ilya Soskever sent Musk, along with Altman and co-founder Greg Brockman, an email rejecting Musk's terms. Quote, the current structure provides you with a path where you end up with unilateral absolute control over the AGI. You stated that you don't want to control the final AGI, but during this negotiation, you've shown to us that absolute control is extremely important to you, the email said. OpenAI aims, quote, to make the future good and to avoid an AGI dictatorship, Suscever wrote,

Thus, we are concerned that as the company makes genuine progress towards AGI, you will choose to retain your absolute control of the company, despite current intent to the contrary, end quote. So to sum all this up, Elon has this suit explicitly to keep Open AI from going for-profit, which people think could effectively kill it as a player in the AI race because it would hamper Open AI's ability to raise the capital needed to train new models. That would open the playing field for startups like XAI to, build those enormous models. See the Colossus Megacluster X-AI is cobbling together to build the world's biggest model yet. But there's another way people are whispering Elon Musk could kneecap Sam Altman,

given his close proximity to the new administration, could Elon kill Open AI via a thousand regulatory cuts? The Financial Times has sources from all sides of this quote. I believe pretty strongly that Elon will do the right thing and that it would be profoundly un-American to use political power to the degree that Elon has it to hurt your competitors and advantage your own businesses. Altman told a New York Times conference last week. Trump himself has said Musk would put the national interest ahead of his companies, while Musk said on his social media platform X that rivals were right to expect him to be magnanimous. No one believes that for a second, said a lawyer who has incurred Musk's wrath in the past. Reid Hoffman, founder of LinkedIn and board member at Microsoft,

opening eyes biggest backer, said he was, quote, certainly worried. that Musk's animosity toward Altman would play out in Trump's AI policies. Quote, obviously someone with integrity and character would say, look, since I'm involved in these kinds of lawsuits and so forth, I should keep myself distinct from the operation of government in these things, said Hoffman. Should Musk blur his personal views on larger geopolitical rules and structures, it, quote, portends potentially dangerous myopias and dangerous conflicts of interest. He added, people close to Musk said he was too principled to use his new role to target

OpenAI with onerous regulation, and it made no sense to do so, given his remit as the co-chair of a new U.S. Department of Government Efficiency, to find ways to slash regulation. You will see a bunch of red tape cut, said one person who has invested in Musk and Altman's companies. Open AI will have a streamlined process for getting their data centers up and running quickly. It will be equally applied across the competitor set, they added. Musk could, however, leverage his position as a central player in the incoming administration to boost XAI, according to an investor in one of his companies. The U.S. government is the biggest employer in the U.S., the person said. As Musk's web of customers expands, does the government become a large customer for XAI?

Hoffman, a former OpenAI board member, speculated that Musk could use his position to slow down competitors to XAI. You could just do all of that kind of thing if you're implementing government policy to try to privilege one company over others, he said, adding that it would be, quote, frankly, a very destructive thing to do. It's destructive for the industry. It's destructive for American society." End quote. The one feather in his cap, other than torturing Altman, is the speed they put out Colossus, said a large investor in a number of Musk's companies, including SpaceX and XAI. Nobody has the same compute power for AI, and that's a big deal, but there's a lot to be

determined, end quote. We've heard this rumor plenty of times, but for Mark German Apple Scoop Monday, it looks like Mark is putting his full weight behind getting this going again. Apple is reportedly working on a foldable device, the size of two iPads. Come for that news, but stay for the fact that maybe they have also finally decided to ditch the magic mouse design where the charger is on the bottom. I guess Johnny Ive really has left the building in Cooper Tino, quoting Bloomberg. Apple designers are developing something akin to a giant iPad that unfolds into the size of two iPad pros side by side. The company has been honing the product for a couple years now and is aiming to bring something to market around 2028, I'm told. Apple's goal for a foldable device is to avoid the

crease that current products have when they're in the open position, and the company has made progress on this front. Prototypes of this new product within Apple's industrial design group have a nearly invisible crease, but it's too early to tell if Apple will get rid of it altogether. Samsung, which launched its first foldable phone five years ago, has tried unsuccessfully to remove the crease ever since. Right now, Apple's largest iPad tops out at 13 inches. Apple knows that customers, gamers, software developers, or just people watching movies, want the biggest screen possible. And the only way to sensibly ship a mobile product with a large display when approaching 20 inches or so is to make it foldable. Otherwise, it's too hard to throw into a purse or

a backpack. It's not yet clear what operating system the Apple computer will run, but my guess is that it will be iPadOS or a variant of it. I don't believe it will be a true iPad Mac hybrid, but the device will have elements of both. By the time 2028 rolls around, iPadOS should be advanced enough to run MacOS apps, but it also makes sense to support iPad accessories like the Apple pencil. It is my impression that much of Apple's current work on foldable screen technology is focused on this higher-end device, but it's also been exploring the I.E. idea of a foldable iPhone. In that area, Apple is the only major smartphone provider without a foldable option, end quote. Mark says that by the time the foldable iPad hits, Apple hopes the Vision

Pro will have caught on. Maybe as a desktop computer replacement of sorts, and then some augmented reality spectacles of some sort. This is why I sort of feel like it's time for this rumor to catch fire. This fits into a whole next-generation suite of computing devices that I feel like Apple wants us to want. But speaking of wanting, a next-gen version on that mouse, quoting Mark again. At no time over the last 15 years did Apple resolve the major complaints about the magic mouse's design. From the start, critics have griped that it wasn't ergonomic or comfortable to use. An even bigger issue, the charging port is located on the bottom of the mouse, so it can't be used while plugged in. I've never been too concerned about this myself.

The mouse charges quickly, and you only have to do it so often. The good news is there's a new magic mouse in the works. I'm told that Apple's design team has been prototyping versions of the accessory in recent months aiming to devise something that better fits the modern era. Apple is looking to create something that's more relevant, while also fixing long-standing complaints, yes, including the charging port issue. As for when the mouse will arrive, I wouldn't expect anything in the next 18 to 12 months, but the current Magic Mouse is nearing the end of its life, and Apple is working on a full overhaul, end quote. Oh, and Mark also says new air tags are coming with a new ultra-wideband

chip that will increase the range of those devices beyond the 10 to 30 meters they currently have. We've spoken at length about every country feeling like it needs a domestic chip industry for geopolitical reasons, but increasingly, countries have also seen what's been happening in places like Ukraine and other places and are like, we need our own satellite internet as well. We need our own Starlink. China is hard at work deploying their own system, and now the EU has signed a deal to build the 10.6 billion euro iris 2 satellite internet network to rival Starlink, with 61% of the project funded publicly, starting operations, or at least planning to start in 2030, quoting the FT. The Iris 2 multi-orbit constellation is Europe's third major infrastructure project in space

after the Galileo Navigation System and Copernicus, the world's largest Earth observation network. It was announced two years ago with the dual aim of providing sovereign, secure communication services to EU member states, while also reviving the bloc's flagging space sector with a cutting-edge project. Timo Pencinen, the Commission's Director General for Defense Industry and Space, underline the strategic importance for Europe of having its own space-based communication network. Autonomous and secure connectivity was, quote, imperative for the EU, he said. Iris II underpins our strategic autonomy and defense capacity, promotes our competitiveness, and energizes public and private sector's cooperation, he added. Space Rise, which includes European Space and Communications Companies Airbus, Deutsche Telecom, Telzpazio, and Thales, among others, will have a 12-year concession to design, build, and operate Iris 2, end quote.

And quoting Tech Crunch. First announced in 2022, Iris 2, Infrastructure for Resilience, Intercomactivity, and Security, and Security. by satellite, is a public-private partnership whose initial cost estimated at 6 billion euros, leapt 76% through a fraught negotiation process. In the end, the program will be 61% funded from the public purse, an industry consortium called Space Rise, selected on October, is making up the difference. This grouping includes French satellite giant UTELSTAT, which merged with European rival One Web back in 2022. Elon Musk's Starlink, meanwhile, already has some 6,000 satellites in orbit, recently past 4 million subscribers, and has major deals

with the likes of Royal Caribbean and United Airlines. It's also gearing up to launch a direct-to-phone service with T-Mobile, end quote. And quoting and gadgets, though most of the satellites' work capacity will be used to provide commercial broadband services, a significant part is dedicated to security and crisis management. Most of the satellites are planned for a low Earth orbit, but some will be in a medium-earth orbit, end quote. And something to put on your radar because this is coming and it looks like, weirdly, it's going to be resolved quickly. The Arm and Qualcomm chip licensing dispute is headed to trial in Delaware in a high-stakes battle set to last only about a week, quoting the Financial Times.

It is a high-stakes battle that will shed light on how two of the world's biggest chip companies and former allies turned against each other over a $1.4 billion startup acquisition. At the heart of the dispute is Qualcomm's acquisition of Santa Clara-based chip designer Nuvia in 2021, which had a chip architecture license from Arm. At the same time, Qualcomm is one of Arm's biggest customers with its own license for Arms architecture, which is used as a foundation for designing chips. Softbank-backed Arm alleged that Qualcomm failed to secure the required consent to transfer Nuvia's license after the acquisition and is now using Arms intellectual property without its permission. Qualcomm has countered that its existing license with Arm is sufficient.

Arm sued Qualcomm in what it has described as a last resort move to protect its intellectual property, It marks the first time in Arms 34-year history that it has taken such a drastic step, bringing its confidential licensing agreements into full view in a public courtroom. Qualcomm, on the other hand, is no stranger to intellectual property disputes having squared off before with the likes of Apple, which challenged Qualcomm patents in wide-ranging litigation that ended in a settlement in 2019. It has decried Arms move as an attempt to squeeze out higher royalty rates and interfere with its product roadmap as both companies expand into new markets, end quote. and quoting Reuters. Qualcomm used Nuvia's designs to create new low-powered AI PC chips launched earlier this year that Microsoft and others expect will help the Windows operating system

regain lost ground to laptops made by Apple. Nuvia and Qualcomm each had licensing agreements with Arm, but with different financial terms. To use the designs based on Nuvia technology, Arm has said Qualcomm must renegotiate the Nuvia contract terms. Expected witnesses include Arm Chief Executive Renei Haas, Qualcomm's CEO Cristiano Amon, and Nuvia founder Gerald Williams. Williams was a senior executive in Apple's ship unit and is currently a Qualcomm vice president, end quote. So as I'm sure you can hear,

I almost completely lost my voice today. It was touch and go. I was this close to using the AI voice that we created months ago because, you know, if my voice is completely gone, it's either AI Brian or it's nothing. If I had done that, I would have given you a disclaimer right at the top,

but thankfully I was able to rasp my way through, kind of. Sorry if it hurts to listen to, but hey, it hurt to say it. Talk to you tomorrow.