Tech Brew Ride Home - Thu. 03/14 – Who Wants TikTok?

Episode Date: March 14, 2024

If this TikTok bill is actually going to become law, who would actually be in the running to take it over? A bunch of announcements from Microsoft. Hard data on how we listen to music these days. And estimates for how much AI could cut into the traditional web search business. Sponsors: Ramp.com/techmeme Links: House passes TikTok bill that could ban app in the U.S., spawning Senate support (The Washington Post) Microsoft has added the GPT-4 Turbo LLM to the free version of Copilot (Neowin) Microsoft says new AI security chatbot pricing model lets customers ‘buy what they need’ (CNBC) Microsoft Teams is finally moving to a single app for personal and work (The Verge) Anthropic releases Claude 3 Haiku, an AI model built for speed and affordability (VentureBeat) MusicWatch Reports Results of 2023 Annual Music Study: Record Numbers of Music Streamers and Paid Subscribers (Music Watch) Google's Gen AI Search Threatens Publishers With $2B Annual Ad Revenue Loss (AdWeek) YouTube Video Of The Perplexity CEO Interview 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 Thursday, March 14th, 2024. I'm Brian McCullough today. If this TikTok bill is actually going to become law, who would actually be in the running to take it over? A bunch of announcements from Microsoft, hard data on how we listen to music these days, and estimates for how much AI could cut into the traditional web search business. Here's what you miss today in the world of tech. So Silicon Valley is suddenly waking up to the very real possibility that TikTok might soon be in play as the Wall Street lingo goes. The bill we described yesterday, which would require bite dance to divest itself of TikTok for that app to continue to be legal in the U.S., past the House, as we said, but we're waiting

on the Senate to move, quoting the Washington Post. The legislation's Senate outlook looks rosier after Wednesday's sweeping House vote with the two leaders of the Senate Intelligence Committee putting their support behind the legislation. We were encouraged by today's strong bipartisan vote in the House of Representatives and look forward to working together to get this bill passed through the Senate and signed into law. Senators Mark Warner and Marco Rubio, the chair and vice chair of the committee said in a joint statement. Lawmakers have floated numerous other approaches, including a yet-to-be-unveiled bill from Senate Commerce Chair Maria Cantwell and separate proposals from both Warner and Rubio, but none appeared to gain broad support until House leaders released their latest proposal last week.

The House measure combines aspects of past bills explicitly talked. targeting TikTok and its parent company while giving the federal government a new mechanism to ban apps with ties to nations viewed as foreign adversaries. If BightDance declined to spin off TikTok, the bill would require app store providers to stop carrying the platform, which could effectively shutter its U.S. operations. But the two senators most likely to control its fate have yet to rally around the bill or agree to take it up. Cantwell, whose panel would probably need to sign off on the new bill, told reporters Tuesday that they, quote, definitely want to work with our colleagues and see if we can get something that will hold up in court. Likewise, Senate Majority Leader

Charles Schumer issued a brief statement after Wednesday's vote, saying the Senate will review the legislation when it comes over from the House, end quote. Some Silicon Valley figures cheered on the legislation reflecting the growing hostility toward China across the industry. Keith Reboy, managing director of Kosla Ventures and one of the most prominent Republicans in the tech industry, posted on X that he would, quote, never fund any Republican candidates or leadership packs run by Republicans who vote against the TikTok legislation, end quote. Meanwhile, China itself is weighing in on the situation, and perhaps that's an angle to this people aren't considering. Quoting the Financial Times, on Thursday, foreign ministry spokesperson Wang Wenbin said the U.S. had shown a, quote,

robber's logic toward the app, which has 170 million users in America, quote, When you see other people's good things, you must find ways to own them, Wang said. He Yag Dong, spokesperson for the Commerce Ministry, called on Washington to, quote, stop unfairly suppressing foreign companies, end quote. U.S. security officials have said the app poses a risk to national security. China has long banned the most popular Western social media platforms, including Facebook, Instagram, and X, as it has tightened censorship. Any sale would require China's approval under export control rules that, in effect, give it a veto in any deal that would sell Chinese technology to a U.S. buyer. Last year, Beijing's Commerce Ministry said it would, quote, firmly oppose an enforced sale by bite dance, end quote.

Nonetheless, that sound you hear in the background is big pools of money coming together wondering who might be able to acquire TikTok were it up for grabs. Former Treasury Secretary Stephen Mnuchin this morning announced that he was putting together an investor consortium to attempt to take over TikTok. And look, this might sound like a click-baity sort of parlor game, but it's worth thinking about who could possibly acquire TikTok. You'd need a lot of money, like a lot. I feel like $100 billion or more.

Who has that much money? Well, we know all the big tech players. But meta is out, right? Regulators wouldn't let them acquire another social network. Ditto Google, probably, too close to YouTube in terms of video dominance. Microsoft might make sense for the reasons of their huge cloud infrastructure. They don't have a social network, but I don't know. I feel like regulators might bulk at them as well. Amazon might be a closer call, cloud infrastructure

again, no social network again. TikTok is moving into shopping so you can see them wanting to strategically position themselves for the possibility that app video shopping becomes a thing here like it is overseas. But look, this is where you might accuse me of doing a Stephen A. Smith hottest take, but Apple, Apple could buy TikTok. They have the money. They do not have a social network. They have a reputation for user privacy. We've been talking about Apple needing a huge new source of revenue growth, right? That's kind of the definition of exactly where TikTok is at in its evolution right now. It kind of makes the most sense Apple being the acquirer, except for the one very important point that I feel like TikTok would clash wildly with Apple's existing culture.

But it would not surprise me at all if one of these big tech players steps forward in the next few days and publicly volunteers to buy TikTok if the legislation passes. You can see the angle. If you really wanted TikTok coming forward publicly like that, especially if you were a suitor the U.S. government was comfortable with as a safe landing place, it could help add momentum to the legislation actually passing. Microsoft has added GPT4 turbo to the free tier of co-pilot, replacing GPT4, quoting NeoWin. Previously accessing the GPT4 Turbo LLM was available with the purchase of Microsoft's copilot pro service, which costs $20 a month. However, in a post on his X account today, Microsoft's head of advertising and web services announced that GPT4 Turbo is now

available for free co-pilot users after, quote, quite some work. Microsoft's generative AI partner OpenAI first announced GPT4 Turbo in November. It offers users access to a much larger 128L context window, which means people can have one single text prompt that can be as long as 300 pages. Microsoft first announced it would add GPT4 Turbo support in December, and then it did so with a subscription to Copilot Pro. But Microsoft has now added that Copilot Pro subscribers who prefer to keep using the older GPT4 LLM in Copilot can click on a toggle that will let them switch back to that model, end quote. Microsoft also announced that Microsoft Copilot for security, their new AI security tool, will be generally available on April 1st, payable via a new security compute unit

that costs $4 per hour. Quoting CNBC, co-pilot for security taps large language models to help cybersecurity professionals understand critical issues. Andrew Conway, vice president of security marketing at Microsoft, said the types of prompts and summaries will vary dramatically in size, depending on the customer and type of workload. Customers can buy what they need, and that can easily be changed over time without friction, Conway said in a statement, security is a significant business for Microsoft accounting for more than $20 billion in

revenue in 2022, making it larger than gaming or search advertising at the time. Gaming is now bigger with the acquisition late last year of Activision Blizzard. The pricing for co-pilot for security is designed to keep expenses low for organizations that experiment with the tool while scaling for power users. Microsoft considered input from early customers as well as the cost of tapping OpenAIs LLMs that process users prompts. A corporate vice president at Microsoft told CNBC, Microsoft charges for use of its Azure OpenAI service based on the number of tokens. a client uses. Each token is equal to about four English characters. It's a much more convoluted pricing model than other Microsoft tools released of late, such as customer service

and general productivity assistance. The co-pilot for Microsoft 365, for example, cost $30 per person per month for companies, end quote. One more bit of Microsoft news to squeeze in here. Microsoft is also planning to release a unified Teams app later this year, allowing users to switch between multiple tenants, so you no longer have to have one teams for work and one teams for personal stuff. Quoting the Verge. This new version of Teams will be rolled out to commercial users in April and will include an account switcher that's accessible from the profile section.

We received consistent feedback from personal and work users. You prefer a single Teams app that allows you to easily access and switch between personal and work accounts, says Microsoft in a blog post. This update lets you use one app for all kinds of Teams accounts. In future updates, you'll also be able to select the account you want to use when joining a meeting link or even join a meeting without signing in. This unified app will even let you launch personal and work accounts for teams with separate icons on the taskbar instead of having to install and launch separate apps. Notifications are also being improved in this updated team's

apps so you can see which team a notification has come from, end quote. Remember when Anthropic announced Claude 3, it came in three different flavors, and they were holding back the release of one of them, the Haiku flavor? Well, no more because Haiku has launched, tailored for high volume latency-sensitive applications, Anthropics says, Haiku is, quote, the fastest and most affordable model in its class. Quoting Venture Beat. If you imagine the business use cases where response time is highly critical, so if you imagine customer support or any kind of internal chat,

Haiku is a great option because they tend to be really high volume, so you can keep the cost down, and instantaneous response is really, really important for those types of businesses, explained Daniela Amo Dai, co-founder and president of Anthropic in a recent interview with Venture Beat. One of Haiku's key strengths is its speed with the ability to process 21,000 tokens, approximately 30 pages per second for prompts under 32,000 tokens. This rapid processing power allows businesses to analyze large volumes of documents like quarterly filings, contracts, or legal cases in a fraction of the time it would take other models in its performance tier. Dario Ammodai, co-founder and CEO and brother of co-founder Daniela Omadai, sees two classes of customers for haiku, quote, latency-sensitive and cost-sensitive, he told Venture Beat.

Latency sensitive is usually user-facing like when you just want a good UI. Companies know that if some tasks take three seconds to respond instead of one second, they lose a fraction of customers and whatever workflow they're doing, end quote. In addition to its speed, haiku boasts advanced vision capabilities, allowing it to process and analyze visual input such as charts, graphs, and photos. This feature opens up new possibilities for enterprise applications that rely heavily on visual data, end quote. We're talking about AI endlessly today, but if this podcast were around 20 years ago, the thing we wouldn't be able to stop talking about would be music, music piracy, music downloads,

iTunes, peer-to-peer networking, the whole nine, but then came Spotify and the era of music streaming took over, and this seems like a settled argument. A little bit of data to show you that that is probably the case. U.S. paid music subscribers hit a record 109 million in 2023. That rises to 136 million when you include Sirius XM and Amazon Prime Music. Seven of every 10 U.S. millennials pay to subscribe for their music needs. More interesting details from Music Watch, quote, 80% of streamers regularly listen to audio categories besides music.

comedy, current events, and podcasts closely compete for the number two spot. In 2023, hip-hop finally passed classic rock as America's favorite genre, as measured by what we listen to, follow on social, purchase, interact with on streaming services, or spend money on live events. The TikTok Juggernaut continued in 2023 with 8% more users, specifically engaging in music-based activities on the platform. Social video accounted for an increasing share of music listening time as well. And music piracy continues to dampen with fewer overall users getting files from mobile apps, stream-ripping, file transfers, and peer-to-peer networks. Sharing of streaming accounts is also in decline, end quote. Finally today, continuing something we've been talking about now with data points, although

probably more accurate to say estimates of data points. In the AI era, a lot of people are worried the web is toast, and by extension, maybe web search would be the canary. in the coal mine. According to AdWeek sources, Google's search generative experience could cut organic search traffic to publishers by 20 to 60 percent. Google says estimating the impact is premature. Quote, Google launched its artificial intelligence-powered search engine search generative experience in beta last May, sending publishers scrambling to prepare for a significant disruption in organic search traffic with potential declines ranging from 20 to 60 percent, according to media executives and search engine optimization experts interviewed for this story. A decrease in search traffic

for publishers on the open web often translates to a decline in digital ad revenue. Mark McCollum, Executive Vice President of Innovation at Raptive estimates that with the current SGE ad revenue loss could amount to as much as $2 billion annually across the publishing industry. Raptive, which runs ad sales for titles like Half-Baked Harvest, Mac Rumors, and Stereo Gum, gets a significant a percentage of its organic traffic from Google search, according to McCollum. The company didn't share specifics. When fully rolled out, SGE could result in a 25% decline in search traffic across its 5,000 publisher network, McCollum said. Travel and family verticals saw the least favorable results with a 29% loss in traffic, while the food vertical saw a 20% loss. Meanwhile, other publishers

expect a material decline in search traffic of over 60%, one publishing executive who wished to remain anonymous because they weren't authorized to speak to the media. old ad week. In response, publishers are preparing to combat the predicted SGE traffic impact, including retooling their SEO strategies, investing in content, expertise, and diversifying traffic. Advertising is still the largest revenue generator for Google across Google properties and YouTube, and we can expect that they will continue to design SGE to maximize this revenue, said Gartner VP analyst Nicole Green. Publishers need to rethink the structure of their companies, often focus on large investments in growth, and look to embrace the changes in technology

and consumer engagement by diversifying revenue streams beyond advertising to areas like paid models and events. This helps bring content to consumers where they are more likely to engage, end quote. SGE is accessible to people in over 120 countries, including the U.S., India, and Japan, where Google's crawlers put in content from across the internet and provide fact-driven opinions. However, not all keywords have an SGE response. Studying 23 websites in the technology industry last September search engine land reported an aggregate organic traffic drop between 18 and 64%. A total of 1,242 high-impact keywords were identified across all 23 websites of which 8% did not have an SGE, end quote. We talk about a lot of this, or at least things related to this, in the interview

Chris and I did yesterday with Perplexity CEO, Aravind Srinivas. Last link in the show notes is to the YouTube video of that interview. As you can tell, I'm trying to evolve the bonus episodes from just analysis of tech news to actual interviews with the people making tech news. This also fits into my recent attempts to be more timely as well. We get into the news of perplexity partnering up with sites like Yelp, which I told you about yesterday. We try to tease out how perplexity is thinking of search differently than maybe Google does. And if perplexity seems confident they can challenge Google, who beyond Google, do they really fear as a competitor? Check that interview out now on YouTube or wait for the interview to hit your earbuds this weekend. Talk to you tomorrow.