Tech Brew Ride Home - Thu. 05/16 – Instagram Founder To Anthropic

Episode Date: May 16, 2024

Some AI companies want to go after web search. But by hiring an Instagram founder, is Anthropic going in a social or app direction? Will AI kill the carbon neutral ambitions of the major tech players? Will tech companies now have to onshore EMPLOYEES from China? And Netflix with ads? Definitely working. Links: EU launches probe into Meta over social media addiction in children (Financial Times) Instagram’s co-founder is Anthropic’s new chief product officer (The Verge) Android will be able to detect if your phone has been snatched (The Verge) Microsoft’s AI Push Imperils Climate Goal as Carbon Emissions Jump 30% (Bloomberg) Microsoft Asks Hundreds of China-Based AI Staff to Consider Relocating Amid U.S.-China Tensions (WSJ) Stability AI, Facing Cash Crunch, Discusses Sale (The Information) Netflix ad-supported tier has 40 million monthly users, nearly double previous count (CNBC) 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, May 16th, 2024. I'm Brian McCullough today. Some AI companies want to go after web search, but by hiring an Instagram founder is Anthropic, going in a social or app direction. Will AI kill the carbon neutral ambitions of the major tech players?

Will tech companies now have to onshore employees from China? And Netflix with ads, it's definitely working for them. Here's what you miss today in the world of tech. Again, it seems we'll have these sorts of headlines on the, the regular now. The EU has opened a formal DSA investigation into META to assess if Facebook, Instagram, and its other apps were reinforcing so-called rabbit hole effects, quoting the Financial Times. The European Commission, the EU's executive arm announced on Thursday it would look into whether the Silicon Valley Giants apps were reinforcing rabbit hole effects where users get drawn

drawn ever deeper into online feeds and topics. EU investigators will also look into whether meta, which owns Facebook and Instagram, is complying with legal obligations to provide age verification tools to prevent children from accessing inappropriate content. The probe is the second into the company under the EU's Digital Services Act. The landmark legislation is designed to police content online with sweeping new rules on the protection of minors. It also has mechanisms to force internet platforms to reveal how they are tackling misinformation and propaganda. The DSA, which was approved last year, imposes new obligations on very large online platforms with more than 45 million users in the EU.

If meta is found to have broken the law, Brussels can impose fines of up to 6% of a company's global annual turnover. Repeat offenders can even face bans in the single market as an extreme measure to enforce the rules, end quote. Interesting hire. Instagram and Artifact co-founder Mike Krieger is joining Anthropic to be its chief product officer. After the AI startup released an iOS app for its clawed chatbot, all of this is interesting. What sort of strategic direction are you going in if you would, release an iOS app and hire the founder of Instagram. Quoting the verge. Krieger will oversee all of Anthropics' product efforts going forward. It's an important moment for the company to push hard on product too. It recently released the Clod app for iOS,

long after a bunch of its competitors were available on mobile and just announced support for use in Spanish, French, Italian, and German. Anthropic, which was founded by ex-open AI employees, has been seemingly primarily focused on building out its core technology for the last few years, but seems to understand that it needs to turn all that tech into products, and there's no time to waste. Because I don't know if you've noticed, but OpenAI, Google, Microsoft, Apple, and seemingly everybody else is racing as fast as possible to put AI models in everything. The underlying tech is changing fast, and the products through which people use them are evolving even faster. Mike's background in developing intuitive products and user experiences will be invaluable as we create new ways for people to interact with Claude, particularly in the workplace. Anthropic CEO Dario Amo Dai said in a statement announcing the hire,

We feel fortunate to add Mike's vision and expertise to our leadership team. That bit about the workplace is interesting. It sounds like Krieger's job may be to find business-focused uses for Claude, at least at first. Despite being a little slow, Anthropic is actually well positioned to make some noise in the space. The company has raised almost $8 billion, most of that just in the last 12 months, and recently told TechRunch, it's in the process of raising even more. Amazon is one of its primary investors and partners. Google is also a huge investor, and there have been rumors about Anthropic, partnering with Apple on its efforts as well, end quote.

I.O. is rolling on this week, and there, Google announced Android theft protection features, like theft detection lock, which detects motion indicating theft, and private space to hide sensitive data. Quoting the verge. Theft detection works by recognizing the unusual motions that would indicate someone has yanked your phone out of your hand or a table in front of you. To prevent a thief from being able to access information on your device, the screen, automatically locks. The system looks for other signals that indicate foul play too, and will be able to lock the screen for protection if someone tries to take it off the network

to prevent remote access. Google is also introducing a new way to lock your phone screen remotely if it ends up in the wrong hands. By visiting Android.com forward slash lock, you can enter your phone number and respond to a security challenge to lock your device, a potentially helpful tool if all you have access to is a friend's phone in the moment. All of these features will arrive later this year via a Google. Google Play Services Update for phones running Android 10 or later. Android 15 also introduces new security features, including private spaces, which let you put apps and information in a separate hidden area on your phone that can be locked with a unique

pin. Google is also adding protections for when a phone is forced to reset, requiring the owner's credentials the next time it's set up. Android's PlayProtect also gets an update designed to protect users from bad actors, quote, expanding PlayProtects on-device AI capabilities with Google PlayProtects live threat detection. It will look at how apps use sensitive permissions on your phones, using the private compute core without collecting data to keep an eye out for signs of fishing and fraud. If something suspicious is detected, then potentially malicious apps are sent to Google

for further review. Google Pixel, Honor, Lenovo, nothing, One Plus, Oppos Sharp, Transion, and others will add live threat detection later this year, end quote. You know how basically every major tech company has had a decades-long initiative to, make their operations be fully carbon neutral, usually by the year 2030 is the target date. But people have begun whispering that the rise of AI with its power-hungry needs could cause all of that to be thrown out the window. For example, Microsoft's carbon emissions grew 29.1% from 2020 to 2023, just three years, as its push to be the global leader in AI has put its own goal to be carbon-negative by 2030 in jeopardy. Quoting Bloomberg, now to meet

its goals, the software giant will have to make serious progress very quickly in gaining access to green steel and concrete and less carbon-intensive chips, said Brad Smith, president of Microsoft in an exclusive interview with Bloomberg Green. In 2020, we unveiled what we called our carbon moonshot. That was before the explosion in artificial intelligence, he said. So in many ways, the moon is five times as far away as it was in 2020, if you just think of our own forecast for the expansion of AI and its electrical needs. Microsoft's predicament is one of the the first concrete examples of how the pursuit of AI is colliding with efforts to cut emissions. Choosing to capitalize on its early lead in the new market for generative AI has made Microsoft

the most valuable company in the world, but its leaders also acknowledge keeping up with demand will mean investing more heavily in polluting assets. AI products are power-hungry and data processing heavy. That first increases the workload of existing centers, which increases energy use, but such is the demand that to keep up Microsoft has to also build new data centers. That requires carbon-intensive cement, steel, and microchips. The tech giant plans to spend more than $50 billion between July, 23 and June of this year on expanding its data centers to meet rising demand for AI products. That number for the next 12 months, starting in July, is expected to be even higher,

Chief Financial Officer Amy Hood said in an interview last month. Since February, the company has touted new data center projects in Wisconsin, Thailand, Indonesia, Spain, Germany, and Japan. Smith believes the good AI can do for the world will outweigh its environmental impact. We fundamentally believe that the answer is not to slow down the expansion of AI, but to speed up the work needed to make it more environmentally friendly, said Smith. I guarantee there's one way to fail, it's to give up. Some Microsoft employees are speaking out about the company's other AI-related work to enhance oil extraction. More than 10,000 employees have formed a group that wants Microsoft to reduce its global warming impact,

and some have quit in protest. Work to maximize oil production with our technology is negating all of our good work, extending the age of fossil fuels and enabling untold emissions, wrote to former employees. We are both deeply saddened to be let down by a company we loved so much, end quote. And let's use Microsoft to highlight another potential trend here. Thus far, the U.S. government's efforts to try to kneecap China's tech ambitions have largely meant, you know, keeping hardware and intellectual technology from crossing borders. But sometimes that could mean people, too. The journal is reporting that Microsoft is asking

about 700 to 800 employees involved in its China-based AI and cloud computing operations to consider relocating to other countries. Quote, such staff, mostly engineers with Chinese nationality, were recently offered the opportunity to transfer to countries including the U.S., Ireland, Australia, and New Zealand, people familiar with the matter said. About 7 to 800 people were given the offer the bulk of which are involved in machine learning and other cloud computing tasks, one of the people said. The offers to move were made earlier this week, and employees have until early June to make up their minds, a separate person familiar with the matter said.

Workers can choose to stay in China, too. Staff were informed the relocation would help bolster Microsoft's global ambitions in cloud computing and meet needs for AI engineers in a variety of places, the person said. But the proposal comes as the Biden administration seeks to put tighter curbs around Beijing's capability to develop state-of-the-art AI, a crackdown that carries the potential to touch American companies with operations in China. After cutting China off from advanced chip purchases and equipment, the White House is considering new rules that would require Microsoft and other U.S. cloud computing companies which sell access to advanced AI computing power to get licenses

for Chinese customers. Microsoft's suggestion of worker relocation also illustrates the spillover from an expanding tech race between the world's two largest economies in which companies from both countries have often risked accruing collateral damage. The migration of Microsoft's China-based staff elsewhere does carry indirect risk for China's AI aspirations, especially given the global scarcity of top engineering talent, industry analysts say. Stationed overseas, the Microsoft engineers would likely see the prospects of returning home to work at a Chinese employer as less enticing, they say, end quote. The information is reporting that Stability AI has talked to at least one potential buyer in recent weeks. It lost more than $30 million in Q1 and owes around $100 million,

apparently, to cloud providers and others. Quote, the four-year-old startup raised at least $101 million from marquee investors, including KOTU management and Lightspeed Venture Partners. It fetched a $1 billion valuation in 2022 on early fanfare for stable diffusion, an open-source AI image generator. It helped fund. The company also forged business ties with Amazon Web Services and other established technology companies. But making money money, money from its free software proved difficult, especially as rivals such as OpenAI and Mid-Journey emerged. There was also upheaval in the company's executive ranks. Questions emerged surrounding its CEO and founder Ahmad Mostaki, who in March resigned following reports of mismanagement

and his exaggeration of details about his professional background. The potential sale of stability, which is based in London and has around 180 employees, according to LinkedIn, would add to a growing list of AI startups that quickly attracted large checks at steep valuations, both before and after OpenAI's release of ChatGPT, which catalyzed an AI startup boom. Many of these startups like OpenAI rival Cohere have raised capital at high prices despite not generating much revenue. But the high costs of using AI models, as well as rising competition from Google, meta-platforms, and dozens of AI startups have pushed some of them to head for the exits. In March, chatbot creator Inflection AI agreed to a deal with

Backer Microsoft, which hired most of its employees and paid the startup $650 million as part of a deal to license its models. The startup used the licensing fee to give investors a modest return, the information first reported. Smaller AI startups have regularly been approaching larger startups to pitch selling themselves, particularly if those larger startups have recently raised a funding round, founders have said. In Stability's case, it's not clear how much potential buyers would be willing to pay. While revenue is growing, its expenses have easily outstripped sales of its memberships, which allow developers to use its image-generating models for commercial purposes, such as to create digital ads.

Stability has said privately, it generated $8 million in revenue last year, up from about $1.5 million in 2022, the person said. In the first quarter of 2024, the company generated less than $5 million in revenue, they said. Meanwhile, stability lost more than $30 million in the first quarter of 2024, and currently owes close to $100 million in outstanding bills to cloud computing providers and others, the person said.

The figures could mean it doesn't have much cash left, they said, end quote. Finally today, Netflix says its ad tier has 40 million monthly active users now, up from 23 million back in January, and they have plans to launch their own ad platform to no longer partner with Microsoft for that tech, quoting CNBC. The company said Wednesday that 40% of all sign-ups in countries that have the ad tier available are for that cheaper plan. Netflix now has 270 million total subscribers. Netflix will begin testing its ad tech platform in Canada later this year and plans to launch it in the U.S. by the end of the second quarter of next year. The company aims to set the platform live everywhere by the end of 2025. Earlier on Wednesday, the company said it

reached a deal to stream two national football league games on Christmas Day this year and at least one matchup on the same day in both 2025 and 2026. Netflix has the option to host one or two games in future years with 2024 serving as a test, co-CEO-CEO Ted Serendos told CNBC on Wednesday. It marks Netflix's first real foray into live sports after years of resistance. Sports, particularly the NFL, has proven to be the glue that keeps traditional TV intact and has also proven to be a boost to streaming services. Terms of the NFL deal were not disclosed, but people familiar with the matter said Netflix will pay in the ballpark of $75 million per game.

Spokespeople for the NFL and Netflix declined to comment, end quote. The Dow just hit $40,000 for the first time I see as I'm recording this. I remember when the Dow hit $5,000 for the first time. I was a senior in high school. Shows you the power of investing for the long haul. I'm 46 years old. Had I put a dollar into the Dow, which is basically the most broad vanilla index out there,

obviously the NASDAQ has done even better. But every dollar I could have put in, 29 years ago would have 8xed at least. And that's not even counting dividends. Not investment advice, of course. I'm just saying. Talk to you tomorrow.