Tech Brew Ride Home - Mon. 12/23 – The Revenge Of Google Glass?

Episode Date: December 23, 2024

How about a Ring Doorbell, but from Apple? How about Meta Ray Ban’s but crossed with Google Glass? How everybody is combining forces to bid for defense contracts. How Tether won the crypto profitability wars. And how Britannica has not only survived the Internet era, but is actually thriving? Sponsors: 1Password.com/ride Links: Apple Explores a Face ID Doorbell and Lock Device in Smart Home Push (Bloomberg) Meta to add display to Ray-Bans as race over smart glasses intensifies (FT) Palantir and Anduril join forces with tech groups to bid for Pentagon contracts (FT) Tether Sees $10 Billion in Net Profits for 2024 (Bloomberg) Britannica Didn’t Just Survive. It’s an A.I. Company Now. (NYTimes) 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, December 23rd, 2024. I'm Brian McCullough today. How about a ring doorbell, but from Apple? How about meta-ray bans but crossed with Google Glass, how everybody is combining forces to bid for defense contracts, how Tether won the crypto profitability wars, and how Britannica has not only survived the internet era, but is actually thriving. Here's what you miss today in the world of tech. Mark German, Apple Scoop Mondays, do not recognize holiday. weeks. Mark says Apple is working on a smart doorbell system with advanced facial recognition that can wirelessly connect and unlock third-party smart locks. Again, as Mark says,

since the car project was canceled, Apple intelligences, shall we say, in its early stages, this is all part of Apple turning to the smart home to try to juice some sort of revenue. So remember that smart home hub that Mark has been talking about, The thing with the six-inch display, like an iPad on steroids, the idea is that it can run things like, quoting Mark in Bloomberg, Apple is developing several related products, including an in-home security camera that's designed to work with its hub. As I've reported, it would compete with devices from Google and Logitech,

as well as Amazon's Ring and Blink. This device is deep into development, but I expect it to arrive after the Home Hub debuts. Apple believes it has an edge in this area because of its long-stated commitment to privacy. The thinking is that consumers will trust it more than rivals within home security footage. The service also could help Apple sell subscriptions to iCloud where customers would store the video. Apple has long been able to do this through a feature called HomeKit Security Video. People also tend to buy several cameras when they're securing their house, so this is an easy way to add new revenue to the company's wearables home and accessories division.

There's also another home device in the works that hasn't been reported before, a smart doorbell with advanced facial recognition that wirelessly connects to a deadbolt lock. The idea is that the doorbell could automatically unlock the door for a home's residence by scanning their face, just like Face ID lets them into their iPhone. It's likely that the doorbell system will work with the many third-party locks already on the market that support Apple's HomeKit Protocol. It's also possible that the company teams up with a specific lockmaker to offer a complete system on day one. In typical Apple style, the company would be entering a space that's well established, but still ripe for reinvention.

A face ID enabled doorbell and lock system would probably give Amazon Ring and Google Nest some genuine competition. Work on the doorbell is still in the early stages, though. I'm told not to expect anything to come to market before the end of next year at the soonest. If it ultimately debuts, I expect it to make good use of the company's upcoming Proxima Wireless Chip and its secure enclave feature, which helps protect customers' data. While the device sounds appealing, there is some risk here. Apple is very protective of its brand, and expanding into home security could attach its name to some dicey situations. When the company was developing a vehicle, top executives dreaded the idea of being connected to car accidents. Now they're facing

the risk of a home security breach, though Apple's face ID system has a less than a less than a lot of than one in one million chance of being unlocked by the wrong person, there's always a chance the system could misfire and allow an intruder into a home. However, unlikely, this scenario is something Apple may need to grapple with ahead of a launch. There's also the danger of a home invasion taking place because an intruder is able to breach the third-party home kit lock. In that case, Apple would have to deal with a customer potentially blaming it for a lock developed by another entity. In my view, these are just the risks of innovation in this space. The pros of a security and privacy-focused company like Apple entering this arena probably outweigh the cons. If Apple ultimately

decides not to ship its own product, there's another potential option, selling the technology through a third-party brand like Logitech or Belkin. Apple already has a close relationship with those companies and gets involved in the engineering of accessories, such as Belkin's robotic iPhone camera attachment for Doc Kit. In any case, Apple is poised to make an aggressive push into the smart home market after years of seating the spotlight to rivals. There will be a solid device at the center of the home hub, plus a new AI-based service, the upcoming app-intense revamp, that will enhance series ability to control apps, and underlying hardware technologies, the wireless chip along with standards like thread and matter, that let products communicate. Add to that, some strong accessories, the security camera and possible doorbell, and an array of third-party peripherals that use the HomeKit technology and you'll have a compelling lineup, end quote.

Call this may be the resurrection of Google Glass. Sources are telling the Financial Times that meta plans to add displays to its ray-band glasses as soon as the second half of 2025 to show notifications or AI responses, but they've also started accelerating Orion's development more generally because they probably feel like they're a bit ahead here. Quote, the Ray-Ban meta-glasses have become a surprise hit among consumers after the latest version was launched

in September 2023. The current model features discrete in-ear speakers, cameras, and microphones for listening to music, taking photos, and chatting with Meta's artificial intelligence assistant. While the first version of a display would likely show simple

text and images, it would represent a significant step towards converging the device with Mark Zuckerberg's longer-term vision of AR glasses that can display a virtual world transposed upon the real world. With the Ray bands, quote, meta proved that these lightweight glasses even without a display could be interesting and useful, said Michael Miller, who leads on augmented reality hardware at Neantik, the developer of Pokemon Go and other AR games. Meta remains in the early days of experimenting what AR headsets might look like. Its Orion glasses are controlled by wristbands, which

take signals from the body, including from the brain in a neural interface. One person familiar with the matter said meta was also exploring using a ring with a track pad or a ball to control a headset. In September, Meta unveiled its augmented reality glasses prototype Orion. According to people familiar with the matter, the company has accelerated Orion's development following the enthusiastic response of early testers. These people said Meta had brought forward plans to turn the device into a consumer product, though any release is still likely to be years away. Orion's compact design, lightweight frame, and innovative displays, which overlay 3D content onto the real world, have been hailed as breakthroughs after years of failed AR headsets, including

Google-backed Magic Leap and Microsoft's HoloLens, end quote. Or sources from the Financial Times, this time, they are saying that Palantir, Anderil, and others are in talks with the likes of OpenAI, SpaceX, and more to form a consortium to bid on U.S. defense contracts. They plan to announce this tie-up as soon as January. I've been telling you all year that especially in the VC space, defense startups are the new hotness. It was already a trend that people thought there were plenty of angles to modernize militaries with modern tech. And now, with the new administration here in the U.S., seemingly about to be filled with personnel friendly to Silicon Valley, this could ironically be to put on the history hat for a second,

Silicon Valley going back to its roots, i.e. If you weren't aware, Silicon Valley originally became Silicon Valley post-World War II by getting rich on Cold War defense contracts. Quote, the consortium is planning to announce as early as January that it has reached agreements with a number of tech groups. Companies in talks to join include Elon Musk's SpaceX, chat GPT maker OpenAI, Autonomous Shipbuilder, Sarronic, and Artificial Intelligence Data Group, Scale, A.I. According to several people with knowledge of the matter, we are working together to provide a new generation of defense contractors, said one person involved in developing the group. The move comes as tech companies seek to grab a bigger slice of the U.S. government's huge $850 billion defense budget from traditional prime contractors such as Lockheed Martin, Raytheon, and Boeing. The consortium will bring together the heft of some of Silicon Valley's most valuable

companies and will leverage their products to provide a more efficient way of supplying the U.S. government with cutting-edge defense and weapons capabilities, according to a second person involved. It comes as defense tech startups have attracted record amounts of funding this year as investors bet they will be among the winners of higher federal spending on national security, immigration, and space exploration under Donald Trump's incoming government. Wars in Ukraine and the Middle East and geopolitical tensions between the U.S. and China have heightened the government's reliance on tech companies developing advanced AI products that can be used for military purposes and encouraging investors to the sector. Palantir's share price has skyrocketed by

300% in the past year, giving the company a market capitalization of $169 billion larger than Lockheed Martin. The Data Intelligence Group was co-founded by tech investor Peter Thiel, who also provided the initial backing for Anderil, which launched in 2017 and was this year valued at $14 billion. Meanwhile, SpaceX was valued at $350 billion this month, making it the world's largest private startup, and Open AI has sorted in valuation to $157 billion since it was founded in 2015. Each of the companies has attempted to grab a slice of the government's defense budget, while SpaceX and Palantir have won large public contracts going back two decades. Some are newer to government procurement. OpenAI, for example, updated its terms of service this year to no

longer explicitly prohibit the use of its AI tools for military purposes. U.S. defense procurement has long been criticized as slow and anti-competitive, favoring a small number of decades-old primes, such as Lockheed Martin, Raytheon, and Boeing. These vast conglomerates typically produce ships, tanks, and aircraft that are costly and take years to design and manufacture. Silicon Valley's burgeoning defense industry has prioritized producing smaller, cheaper, autonomous weapons that they claim will better protect the U.S. and its allies in a modern conflict.

One person involved in developing the consortium described it as aligning industry in order to execute the technical priorities of the Defense Department and solve critical software capability problems, end quote. Tether says it is on track for a record $10 billion in net profit in this year, 2024. Also, it expects to invest $2.5 to $3 billion next year in 2025. invest those profits across AI, finance, biotech, education, and mining, quoting Bloomberg. As Bitcoin and many other cryptocurrencies rallied to new all-time highs,

demand for Tether's USDT stablecoin pegged to the dollar has skyrocketed. The token added nearly $50 billion to its market capitalization this year, and it now stands at more than $140 billion, according to DataTracker coin market cap. Much of Tether's earnings come from investing its reserves back. stacking stable coins, including UST, into U.S. Treasuries, gold, and other securities. This year, Tether invested more than half of its net profits. The company said on Friday, the company announced it agreed to invest $775 million into video sharing network Rumble, including a primary commitment of $250 million in cash, with Tether also supporting Rumble's tender offer for up to 70 million

shares at $7.50 per share. Tether has been investing in Bitcoin miners, biotech, and other sectors. continues to look at investments in the U.S. as regulation of crypto is expected to become more favorable under President-elect Donald Trump. The company said, Howard Lutnik, whom Trump nominated to be Commerce Secretary, heads Kenner Fitzgerald, which purchased a stake in tether and custodies the stable coin issuers reserves. Lutnik is in talks to deepen financial ties between the two businesses and has been discussing plans for a lending program. Bloomberg reported earlier, end quote. So putting the history hat on again, You know how nobody made any money at all during the dot-com era? I mean, nobody. Stocks soared, of course, IPOs. But aside from AOL, basically no company actually ever made a profit in that era,

which is why everyone was so wowed. When in the early 2000s, Google showed up and revealed its profits for the first time before their IPO, it turned out that the first company to make money on the internet was a company that just kind of was the internet. So, in sort of a parallel way, I find it fascinating that the first crypto startup that has made tangible billions of dollars has done so by doing actual business, not just token value appreciation, as the coin that literally just clones U.S. dollars and makes money by holding liquid dollar denominated assets and collects the interests of their end. Like, what I'm saying is Bitcoin can be used as currency, I suppose, but it's not actually replace the dollar, the thing that has actually fulfilled the crypto promise of replacing currency

is the likes of USDC and USDT replacing the dollar again by cloning it. Finally today, it's not Friday, of course, but for the heck of it and for reasons I'm about to explain, let me give you one long read for today from the New York Times. It's about how Britannica, nay, the maker of encyclopedias, has. survived the Wikipedia era by changing itself into a maker of education software and AI agents, as it reportedly weighs an IPO sometime in the next year at around a $1 billion valuation. Quoting the Times, it was the sort of physical media expected to die in the internet era, and indeed the encyclopedias publisher announced that it was ending the print edition in 2012.

12. Skeptics wondered how Britannica, the company, could survive in the age of Wikipedia. The answer was to adapt to the times. Britannica Group, as the company is now known, runs websites, including Britannica.com and the online Miriam Webster Dictionary and sells educational software to schools and libraries. It also sells artificial intelligence agent software that underpins applications like customer service chatbots and data retrieval. Britannica has figured out not only how to survive, but also, how to do well financially. George Cawes, its chief executive officer, said in an interview

that the publisher enjoys pro forma profit margins of about 45 percent, end quote. So as I alluded to, I'm going to take the next few days off. The next full episode I'll have for you will be on Friday. I might drop a rad history episode for you on Wednesday. We'll see. As you can hear, I'm not in my home studio. I'm down in Florida for the week. Merry Christmas for those who are so inclined. Talk to you, as I said, on Friday.