Tech Brew Ride Home - Thu. 02/02 – Meta Whistles Past The Metaverse

Starting point is 00:00:00 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 Thursday, February 2nd, Groundhog Day. 2023, I'm Brian McCullough today. Meta single-handedly bucks the narrative that it's the sick man of Silicon Valley.

Starting point is 00:00:45 Twitter is cutting off free access to its API. Chat GPT launches an actual product and is Bing Search getting GPT4 in like a matter of weeks. Discord is coming to PlayStation and the wrap-up of yesterday's Samsung event. Here's what you miss today in the world of tech. narrative violation. Meta's stock jumped 20% this morning after reporting earnings yesterday. Yes, net income was down 55% year over year, but the family of apps, daily active users were up 5% to 2.96 billion people. So on one hand, 3 billion people use their services every day. That remains incredible. And on the other hand, it's still a good business. As Tange Jiporia pointed out on

Starting point is 00:01:34 Twitter, quote, Netflix makes around $190 a year from every paying subscriber in North America, while META makes around $206 a year from every free active user in North America. And quite frankly, on the third hand, if we had one, META clearly took pains to reassure investors this quarter. On the earnings call, Mark Zuckerberg said META's management theme for 2023 is the year of efficiency and emphasize the company is aiming to, quote, become a leader in generative AI. They increase their share repurchase plan by about $40 billion. And as we're going to get into in a second, they signaled that they were cutting back on spending. So it was basically, look, guys, we've heard your concerns. We're cutting costs, getting leaner, and also we're sprinkling

Starting point is 00:02:21 in a bit of the latest hot buzzwords like generative AI, quoting tech crunch. In the call, Meta's chief executive called out Instagram Reels as the company's algorithmic recommendation engine as two major areas of focus in the coming months. On the whole, Zuckerberg dramatically de-emphasize the meta-reiberse, the concept the company rebranded around in 2021, in favor of playing up meta's trendier AI work. Facebook and Instagram are shifting from being organized solely around people and accounts you follow to increasingly showing more relevant content recommended by our AI system, Zuckerberg said. And this covers every content format, which is something that makes our services unique, but we're especially focused on short-form video

Starting point is 00:03:03 since Reels is growing so quickly, end quote. And quoting Yahoo Finance. CEO Mark Zuckerberg says the company is just beginning its cost-cutting journey, much to the delight of the meta-bulls. We closed last year with some difficult layoffs and restructuring some teams, and when we did this, I said clearly that this was the beginning of our focus on efficiency and not the end. Zuckerberg told analysts on the call. Zuckerberg added efficiency was one of his his key themes for 2023 alongside capitalizing on fresh AI movement. When has he ever put efficiency ahead of innovation? Never. And the street likes it. The company then went on to slash its expense and cap X guidance for the year by $5 billion and $4 billion respectively. The tone change from

Starting point is 00:03:47 Zuckerberg wasn't overlooked on Wall Street, which has been itching to re-engage with the stock from a long perspective. While the reduction in the expense guide was expected, the magnitude of the change was a positive surprise, Jeffrey's analyst and Meta Bull Brent Thill wrote in a client note, end quote. Hat tip to one of my Wall Street buddies, you know who you are, who when I pinged him yesterday to ask what he thought would happen with meta's earnings yesterday said, they're going to rip the Band-Aid off, they're going to announce spending cuts all in one go, they're going to not kill the Metaverse exactly, but they're going to demonstrate that they're not exactly

Starting point is 00:04:24 some sort of fanatic about it. Dude, you called it. Worth noting that after its big declines in 2022, meta's stock has risen more than 72% just since November 3rd, making it one of the S&P 500 index's best performing stocks, adding more than $200 billion to its market cap. Summing up, that enormous price rise you're seeing in meta shares today, I think this might end up being their best single day ever on the public markets. What you're seeing is Wall Street breathing a sigh of relief that, for now at least, Zuck seems to be willing to whisper about the metaverse, not so much shout about it. Twitter says it plans to end free access to its API starting February 9th, shuddering support for both versions 1.1 and version 2, making a paid

Starting point is 00:05:22 version available instead, which means a whole ecosystem of tools built on the Twitter API is in danger, or I guess they could pay up, but seeing a lot of the tweets from developers, a lot of them are just going to die. Quoting TechCrunch. In a series of tweets, the Twitter developer account said the firm will be ending support for both Legacy version 1.1 and the new version 2 of its Twitter APIs. It did not immediately say how much it plans to charge for API usage. The move follows Twitter abruptly changing its terms on.

Starting point is 00:05:52 its API in recent weeks. That was used by many popular Twitter clients such as Tweetbot and TwitterRific. Most third-party Twitter apps have shut down their mobile apps. In the aftermath of the recent changes that saw Twitter shut third-party clients, many other app developers had grown cautious about the ways they advanced development atop the Twitter API. This new move might leave some developers to either abandon their products or pass on the cost to their customers. Thousands of developers use the Twitter API for scores of things such as tracking changes among Twitter accounts and offering alerts. These are fun side projects for people who might not be willing to pay fees for something that they

Starting point is 00:06:27 themselves are not monetizing. Then there is another specific user base of the Twitter API researchers. Twitter's new announcement might impact research in different areas, including hate speech and online abuse. Universities often use Twitter to study human behavior in different regions. Putting a cap on free API usage could also stop firms working around detecting the spread of misinformation on Twitter itself, end quote. OpenAI has officially launched Chat GPT Plus, a pilot plan with access in peak times,

Starting point is 00:07:02 faster response times, and priority access to new features in the U.S. for $20 per month. We'll get to it in a second, but that faster response time thing is maybe one of the keys here. Quoting TechCrunch, the free chat GPT tier is here to stay. It's not going away. But as for ChatGPT Plus, it's only available to customers in the U.S. at the moment. OpenAI says it'll begin the process of inviting people from its waitlist in the coming months and look to expand plus to additional countries and regions soon, end quote. A UBS study came out yesterday claiming chat GPT has reached around 100 million monthly active users with around 13 million daily unique visitors in the month of January, a mere two months

Starting point is 00:07:45 after launching, therefore becoming the fastest growing consumer app ever. So that should go some ways to explaining all the excitement around this, especially among investors. And Semaphore was reporting yesterday that Microsoft plans to update Bing with OpenAI's GPT4, a faster and richer version of chat GPT in the coming weeks. OpenAI also has plans apparently to launch a chat GPT app as well. Quote, the most interesting improvement in the latest version described by sources is GPT4's speed.

Starting point is 00:08:18 Right now, it can take a while, sometimes minutes in my experience, for chat GPT to answer. One of the least appreciated innovations of chat GPT is what happens on the server every time someone enters a query. In May 2020, Microsoft announced it had built, quote, one of the top five publicly disclosed supercomputers in the world, end quote, in partnership and exclusively for OpenAI. That would be used to train, quote, extremely large artificial intelligence models, end quote. It's now clear what possibilities Microsoft and OpenAI saw in this technology that has caused the whole world to take notice. A big part of improving OpenAI will be figuring out how to run it more quickly and more cost-effectively. All these improvements mean OpenAI is building a moat around its product. Anyone can build software similar to Open AIs.

Starting point is 00:09:05 In fact, the Transformers were first invented by Google and were made open source. But only a handful of companies have access to massive supercomputers capable of running billions of parameters. And now that OpenAI has opened its products up to the public, it's getting invaluable real-world feedback that will help keep its products ahead of competitors, end quote. Sony has announced a beta version of Discord for the PlayStation 5 in the U.S., Canada, Japan, and the UK. Quoting the verge, beta testers will be able to join Discord voice calls on a PS5 console in the U.S., Canada, Japan, and UK starting today.

Starting point is 00:09:47 The integration allows PS5 owners to join Discord calls by linking accounts and then using the Discord mobile app to transfer calls to the PS5. Sony is also adding variable refresh rate support for, 1440P alongside various dashboard improvements. The Discord voice integration on PS5 appears similar to how Microsoft initially launched Discord support on the Xbox. Sony says you have to use the Discord app app on your mobile device or computer to get a Discord voice chat going on your PS5 console, which means you won't be able to directly access Discord servers on a PS5 without using a mobile device or your PC to transfer the call. Hopefully Sony will improve that soon as Microsoft improved

Starting point is 00:10:26 its Discord integration for Xbox in November, allowing Xbox owners to join voice channels straight from a console without having to use a phone or PC. Alongside the Discord support, the PS5 will also get variable refresh rate support for the 1440P resolution. This means compatible HDMI 2.1 displays can enable VRR at 1440P to benefit from smoother visual performance in games. Sony is also making some improvements to the social aspects of the share screen feature and party chats in the PS5 dashboard and even adding a new friends who play tile so you can see which friends are currently playing a game, end quote. Called it. Netflix says U.S. password sharing rules haven't been set in stone yet, and in fact, remove the rules I read you

Starting point is 00:11:16 yesterday, at least some of them from its U.S. help page, especially the ones saying users must connect to a primary Wi-Fi device every 31 days, quoting the verge. The currently available U.S. page about what Netflix considers a household is vastly different from the pages in Costa Rica, Chile, and Peru. On the U.S. page, the company only describes its idea of a household as, quote, people who live in the same location with the account owner, end quote. Meanwhile, the pages for the three South and Central American countries provide more detail on how to change your primary household, sign out of accounts on devices in different locations, or what might cause a device to become blocked. This is a glimpse at what you could expect when Netflix's crackdown on password

Starting point is 00:11:56 sharing goes into effect globally and what kind of headaches it could bring to people who just need to watch from multiple locations or people who love to use VPNs inside the privacy of their own homes. But when it comes to how Netflix will try to push users in the U.S. or other countries to purchase sub accounts for all the exes, cousins, former roommates, and complete strangers who hitch a ride on our streaming accounts, it's not ready to tell, end quote. Or it was ready to tell, and it floated a trial balloon yesterday to see how people would respond. And I guess they got their answer. The information is reporting that after a splashy launch, sources are saying Amazon Prime Air has

Starting point is 00:12:39 made drone deliveries to less than 10 houses in the days between December 29th and mid-January. Not a lot, right? Why? Quote, despite what Amazon has said publicly about regulatory approvals for the drone effort, the Federal Aviation Administration is blocking Amazon's drones from flying over roads or people without case-by-case permission, according to federal records. That has severely limited the number of homes they can reach in the two towns that are currently being tested, Lockford, California, and College Station, Texas. Amazon had asked the FAA to loosen those safety restrictions, but the agency issued a new set of rules late last year that rejected many of the company's requests. While many of Prime Air's missed milestones and safety incidents over the years have been

Starting point is 00:13:23 well documented, the restrictions that continue to kneecap Prime Air's expansion plans have not been previously reported. A person with direct knowledge of Amazon's operations in Lockford said they were only aware of two households having received a total of three deliveries between them as of mid-January. In College Station, delivery numbers were similarly limited by the FAA restrictions, with around five households having received deliveries by the middle of last month, one person who worked on the site estimated. Insider reported earlier on Wednesday that only two customers had been onboarded to the delivery program in Lockford. Amazon's drones have flown seven, several hundred flights at the two locations since the fall, but nearly all of those have been

Starting point is 00:14:03 maintenance flights in which its drones flew on its own property, where they completed tasks such as delivering dummy packages to people who worked on the project said, end quote. Finally today, here's what happened at that Samsung unpacked event yesterday. Samsung debuted the $1,200-plus Galaxy S-23 Ultra, similar to the S-22 Ultra, but with a new 200-mixel camera, more robust, optical image stabilization and better battery life. On the lower and medium end, the 6.1 inch Galaxy S23 comes in at around $800, and the 6.6 inch Galaxy S23 plus starts at $1,000, all with better selfie cameras and

Starting point is 00:14:49 Snapdragon 8 Gen 2 chips. All this is shipping on February 17th. Back to the high end, though, back to the Ultra, quoting the verge, the Samsung Galaxy S23 Ultra is an S-22 Ultra with an extra layer of polish, figuratively speaking. Compared to the outgoing model, it comes with an updated processor, a new 200-mepixel main camera sensor, and a tweak to the form factor. The built-in S-pen is still here naturally, and thankfully the price hasn't inflated. In fact, the starting price of $1,190.19. Now comes with 256 gigabytes of storage, double last year's base model. It's a little extra shine on what

Starting point is 00:15:27 was already Samsung's star smartphone. The high-res camera is the big story on the S-23 Ultra, the jump from 108 megapixels to 200 megapixels this year. That doesn't mean you'll be taking 200 megapixel photos with it. Most of the time, it bends 16 pixels together to improve light gathering and spits out a much more manageable 12 megapixel image. You can take a 200 or 50 megapixel image, but most of us aren't making wall-sized prints of our photos and don't need that kind of resolution. Samsung also claims that the main camera's optical image stabilization is more robust this year, correcting for three degrees of shake versus one and a half. The S23 Ultras screen specs are unchanged.

Starting point is 00:16:06 It still offers a huge 6.8-inch OLED with a 120-hertz top refresh rate and 1440p resolution. But there's a couple of subtle changes you can't see from the surface. The first is that the display itself includes more battery-efficient materials. Samsung has also taken its vision booster tone mapping a step further. It doesn't just optimize the screen for viewing a very bright light. it now adapts to a wider range of lighting conditions throughout the day. Samsung credits this smarter screen with some battery performance improvements. The S23 Ultra also features a very slight exterior redesign.

Starting point is 00:16:40 The long edges of the phone are slightly less curved, so there's more of a flat surface to grip when you're holding the device. The back panel and the screen also curve around the sides a bit less, so you might be less likely to run your S-pen off the edge of the device, which tended to happen with the more rounded design, end quote. So largely spec bumps, chip bumps, battery improvements, camera emigurements, but, you know, just solid updates, nothing revolutionary. Samsung also refreshed its Galaxy Book lineup, adding the Galaxy Book 3 Ultra with a 16-inch 120 hertz 3K display and Nvidia's RTX 4050 or 4070 coming February 17th from $2,400. So again, improvements to an already impressive laptop lineup.

Starting point is 00:17:24 I'm having a little bit of an existential think about how we cover product announces going forward on the show. There's just not a lot new anymore. They're all basically spec bumps, like we just heard in that last segment. There was a time when meaningful new things came out regularly, things like Siri. There were several years there where the camera tech on smartphones was making big leaps seemingly every year. Heck, even doing things like removing the physical home button was worth analyzing since it would have an impact. on billions of people's everyday use and experience with these products. But look, that seems to have slowed a bit to a crawl,

Starting point is 00:18:10 and we keep getting signaling from our rumor mongers that this year will be a boring year of spec bumps for the iPhone and iPad lineups, especially. Even with the Macs and the move to Apple Silicon, it was noteworthy at first, but when we inevitably get M3 chips, aside from the new name, they're just going to be spec bumps, right? But then again, not covering these things seems like a non-success.

Starting point is 00:18:32 starter. That would be like a sports podcast being like, we're not going to cover the actual games now because it's either a win or a loss, nothing really changes. If you analyze things like this too closely, you're always in danger of going through the looking glass, I guess. Still, just noting that I'm trying to be cognizant of how I can calibrate my coverage of this stuff going forward, sort of like with earnings reports as well. Anyway, talk to you tomorrow.

Tech Brew Ride Home - Thu. 02/02 – Meta Whistles Past The Metaverse

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