Tech Brew Ride Home - Thu. 08/29 – Nvidia Earnings… Are Ok…

Episode Date: August 29, 2024

Nvidia’s earnings were huge but because they didn’t manage to beat the biggest expectations out there, it’s kind of a miss? Pavel Durov has been formally charged by France. Does TikTok fall outside of Section 230 protection? And it seems like the effort by the car companies to wean themselves off of smartphone tech is… not going great. Links: Nvidia’s CEO Says New Chip Will Have ‘Lots and Lots’ of Supply (Bloomberg) Telegram CEO Charged in France for Crimes Committed on His App (Bloomberg) TikTok must face lawsuit over 10-year-old girl's death, US court rules (Reuters) OpenAI in Talks for Funding Round Valuing It Above $100 Billion (WSJ) Top Movie Piracy Ring Taken Down, Major Studios’ Enforcement Group Claims (The Hollywood Reporter) GM's 'Google Built-In' Is Glitchy, Requires A Subscription To Use Google Maps (Jalopnik) 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 Thursday, August 29th, 2024. I'm Brian McCullough today. InVIDIA's earnings were huge, but because they didn't manage to beat the biggest expectations out there,

it's kind of a miss. Pavel Durov has been formally charged by France. Does TikTok fall outside of Section 230 protections? And it seems like the effort by the car companies to wean themselves off of smartphone tech is not going great. Here's what you miss today in the world of tech. InVideo reporting earnings is such a big deal these days that a bar. are here in Manhattan held an earnings watch party that hundreds of people showed up for. InVedia reported Q2 revenue was up 122% year-on-year to $30 billion above the $28.7 billion

estimate and forecast Q3 revenue above various estimates and approved an additional $50 billion in share buybacks. So all good, right? Still growing revenue over 100%. Nice work if you can get it. Why then was the stock down 4% or so this morning? Apparently, its cause NVIDIA failed to top the highest expectations and reported gross margins of only 75.1% versus the 75 and a half percent, which was estimated, so some disappointment that they didn't just break the fundamental laws of the universe with their numbers, and small concern about margin compression, though should be noted, those margins are still 75%. On the call, Jensen Huang said Nvidia's new Blackwell chips will have lots and lots of supply, and the company expects billions of dollars in revenue from those chips as early as Q4, quoting Bloomberg.

We're going to have lots and lots of supply, and we will be able to ramp, he said, Wednesday, in an interview on Bloomberg television. Samples of the chip are already going out, quote, all over the world today, and the company has started volume production. The availability of the Blackwell chip first announced earlier this year has become a key focus for invidia investors and analysts. The product is a much-anticipated successor to the company's hopper line of so-called AI accelerators, which have sent its revenue and stock price soaring. But production challenges have raised concerns about delays. Earlier, Nvidia disclosed that it had to revamp part of the manufacturing process, even with the changes the company expects to have billions of dollars of

revenue from Blackwell in its fiscal fourth quarter. Heading into the earnings report, analysts had expressed concerns that Blackwell's problems might derail NVIDIA's rapid growth and even slow the spread of artificial intelligence. Wong said on Bloomberg television that he thought he was clear enough about Blackwell's prospects. Functionality of Blackwell is wonderful, he said. Beyond the revenue, it will generate in the fourth quarter, which ends in January, quote, we will have a great next year as well, Wong said, end quote. France has officially charged Pavl Dorov with complicity in the spread of CSAM and other crimes on Telegram. Prosecutor set a $5 million bail and banned him from leaving France.

Quoting Bloomberg, the case against Duraev paints a picture of a platform almost entirely uncooperative with authorities and includes allegations that Duraov refused to help agencies run legal wiretaps on suspects. Paris prosecutor said in a statement late Wednesday, Derao faces further accusations of enabling organized criminals to carry out unlawful transactions on the platform. The 39-year-old billionaire posted bail of $5 million, after being questioned by a judge on Wednesday and following four days of police custody. He's not allowed to leave France and must check in with the authorities twice a week.

It is unusual to target executives for crimes committed on their platforms, although the cases were somewhat different to the allegations against Dura, U.S. prosecutors have done so on occasion. Ross Albrecht was sentenced to life in prison in 2015 for running an online drug bazaar called Silk Road. Binance founder Chengpeng Xiao pleaded guilty to anti-money law, and sanctions violations last year. Duraov has drawn support for many in the social media industry since his arrest on Saturday when disembarking from a private jet at a Paris airport.

Ex-owner Elon Musk called for his release in a post that suggested the case raises concerns over free speech. Paris prosecutor Lori Bikow said that while Telegram appeared in numerous cases that focused on crimes on minors, drug trafficking or online hate, her teams noted the platform's, quote, near complete lack of response to legal request for cooperation. A similar situation was reported by authorities in neighboring countries, including Belgium. That's what led Janal Koh to open an investigation into the possible criminal responsibility of the messaging apps executives in the commission of these offenses, Bekow said, referring to her unit focusing on organized crime. David Oliver Kaminsky, an attorney for Durov, said Thursday that the app abides by European laws.

It is absurd to claim that a platform or its owner are responsible for abuse. of that platform, end quote. The French judiciary is notoriously slow to process cases. Pressing charges is a key point in French probes, but a criminal trial, if any, is ordered, maybe several months or even years away. National rally leader Marie Le Pen is due to face trial in September over allegations dating back about a decade ago. Meanwhile, UBS Group AG is still fighting a case that was triggered by a 2008 whistleblowing report. In the telegram case, investigators will likely seek to question additional suspects or witnesses, and Duraev will have an opportunity to challenge investigators' findings before any decision is made on holding a trial.

Duraev can also appeal the order to stay in France, and the authorities have in the past, allowed suspects to travel to visit an ailing family member. Dura was born in Russia and holds passports from there, as well as France, and the United Arab Emirates. The charges Durao currently faces could result in as much as 10 years in jail, end quote. More legal stuff, and this could turn out to be nothing in the end, but a U.S. court has ruled TikTok must face a lawsuit over a 10-year-old's death and the blackout challenge saying algorithmic curation isn't protected by Section 230. As far as I know, that's a vector for piercing the liability veil that hasn't been tried before, right? Quoting Reuters, a U.S. appeals court

has revived a lawsuit against TikTok by the mother of a 10-year-old girl who died after taking part in a viral blackout challenge in which users of the social media platform were dared to choke themselves until they passed out. While a federal law typically shields internet companies from lawsuits over content posted by users, the Philadelphia-based third U.S. Circuit Court of Appeals on Tuesday ruled the law does not bar Naila Anderson's mother from pursuing claims that TikTok's algorithm recommended the challenge to her. U.S. Circuit Judge Patty Schwartz, writing for the three-judge panel said that Section 230 of the Communications Decency Act of 1996 only immunizes information provided by third parties and not recommendations TikTok itself

made via an algorithm underlying its platform. She acknowledged the holding was a departure from past court rulings by her court and others, holding that Section 230 immunizes an online platform from liability for failing to prevent users from transmitting harmful messages to others. But she said that reasoning no longer held after a U.S. Supreme Court ruling in July on whether state laws designed to restrict the power of social media platforms to curb content, they deem objectionable violate their free speech rights. In those cases, the Supreme Court held a platform's algorithm reflects, quote, editorial judgments about compiling the third-party speech it wants in the way that it

wants. Schwartz said under that logic, content curation using algorithms is speech by the company itself, which is not protected by Section 230. TikTok makes choices about the content recommended and promoted to specific users, and by doing so is engaged in its own first-party speech, she wrote. TikTok did not respond to requests for comment, end quote. Sources are telling the journal that OpenAI is in talks to raise funding at a greater than $100 billion valuation. Thrive Capital is leading this new round and will invest around $1 billion, they say, and Microsoft will also invest as well. Quote, Open AI was last valued at $86 billion late last year when employees sold existing shares. Thrive, a New York-based firm founded 15 years ago by Josh Kushner, already has a close relationship

with Open AI and its chief executive Sam Altman. It has put several hundred million dollars into the startup since last year. It couldn't be determined what other investors are participating in the new funding round. In recent weeks, one or more current Open AI stockholders have been negotiating to sell their shares at a price that would value the company at $103 billion, according to documents viewed by the Wall Street Journal. Any new investors would likely value Open AI at around that price or higher, not including the additional money raised. Raising prodigious amounts of capital is critical for Altman's goal to create artificial general intelligence, which his company defines as autonomous systems that can outperform humans at most economically viable tasks. Such technological

leaps require huge volumes of data processed and warehouses of supercomputers outfitted with expensive, power-hungry chips. OpenAI spent more than $100 million to build GPT4, its most powerful AI model to date. It is currently working on its next model, which is expected to cost more. end quote. Yeah, probably a lot more. Remember our recent discussions about potentially one billion dollars coming down the pike. Given the math on the money we know OpenAI has already raised, it seems inevitable that they will need to raise more soonish. Anti-piracy group Ace says it has worked with Hanoi police to shutter, Hanoi-based F movies, and its affiliates, calling it the largest pirate streaming operation in the world.

quoting the Hollywood Reporter. An anti-piracy coalition comprised of major studios in the U.S. and across the globe is claiming victory against F-movies, a significant streaming operation based in Vietnam. On Thursday, the Alliance for Creativity and Entertainment revealed that it had worked with Hanoi Police to shutter F-movies and affiliated sites, which together made up, quote, the largest pirate streaming operation in the world, according to the organization. With sites including B-Flix, Flix Tours, Movies 7, My Flixer, and E. Anna Wave, in addition to F-movies, the operation attracted more than 6.7 billion visits between January

2023 and June 2024, Ace says. The effort also shut down video hosting provider V-I-D-S-C-R dot T-O. Not sure how to pronounce that, and its affiliated sites, which were operated by the same suspects per ACE. Two Vietnamese men were arrested by Hanoi police in connection with F-movies and have yet to be charged. With governing members including Netflix, Apple TV Plus, Amazon, and the Walt Disney Studios, among others. Ace works with law enforcement domestically and internationally to fight online piracy of entertainment. The group also pursues litigation and sends out cease and desist letters. Its international members include BBC Studios, Canal Plus, group Televisa, NBC Group, and RTL.

F-Movies has been a target of Ace's affiliate the MPA for some time, with Rivkin noting that one-third of its traffic came from the U.S. in a 2024 speech at Cinemicon. The Office of the U.S. Trade Representative has included the site on its site on its annual review of notorious markets for counterfeiting and piracy for several years running, alongside other sites including the Pirate Bay, SciHub, and 1337X. Per data aggregation company's similar web, Fmovies.t.O. was the 280th most popular website in the world across all categories in 2023. Subredits dedicated to F Movies and piracy have noticed the shutdowns in recent days and have been discussing alternative websites. One poster asked,

Can anyone message me with any decent sites, please? I don't really want to sit and have to watch YouTube all day every day. I was literally in the middle of watching, call the midwife when it got removed, end quote. Said another, between last night and this morning, everyone woke up to the streaming apocalypse of their beloved sites being deleted by Uncle Sam. Anyone who's posted a link or name dropped a site on this page, congrats, it's your fault, end quote. Finally, today we've discussed before the tension between the tech platforms and the car companies, as cars become more smart and more connected, to what degree would the delight? Would the relationship you have with your car be owned by, not the car brand itself, but owned by, say, Apple CarPlay and Android Auto? Fearing they are

being disintermediated. Companies like GM are creating their own infotainment systems, and in some cases, blocking the use of things like CarPlay. So how's that going? Well, quoting Jalapnik. After seven months and 13,000 miles with a 2024 Chevy Silverado ZR2, Motor Trend discovered that the system has some flaws. The system would suddenly freeze at the most inopportune and random times. When this happened, not only did the maps stop working, but speed limit information displayed in the driver information screen and head-up display froze as well,

navigating to the infotainment systems, Google Maps app, while the system is frozen results in the displaying of a searching for GPS error message. Motor Trend says the best solution they could find was a complete system reboot when that happens, which requires holding the phone hang-up button on the steering wheel for 15 seconds with the truck running. Pretty annoying. Another annoying problem was the voice control function. GM says that drivers can say, hey, Google, and then control various functions in the car just by saying them, like climate control fan speed or changing a radio station. Except, it's not that simple.

Simply stating, tuned to the Disney Channel will result in failure. Instead, the prompts would need to be tune the radio to the Disney Channel on Sirius XM. It's nuanced, but important. The same goes for navigation. Instead of, take me to the Trader Joe's in El Segundo, you need to say, give me directions to the Trader Joe's store on Rosencranz Boulevard in El Segundo, California. You also need to speak slowly and enunciate clearly for the system to get most requests on the first try. There's also an app store with apps like ways. However, Motor Trend says it's so slow to load and inputting an address is so difficult that they gave up on using it the first time they tried it. The worst part of the system, you have to pay for a data access plan if you want to use its connected features like Google Maps.

Choosing not to pay for OnStar will result in the loss of access to certain features. These include the Google Play App Store, Google Assistant, and most alarming Google Maps. That's right, without a paid subscription, our $75,000, 2024 Chevy Silverado ZR2 doesn't offer access to its native navigation system. This means that without purchasing one of OnStar's connected vehicle plans, which ranged from $2999 to $4999 a month, Google Maps, Assistant, Google Play Store, and other connected features are all rendered useless. I confirmed this with OnStar who said that yes, if there's no connect. vehicle data subscription, you can't use any Google built-in features. Luckily, there's a big workaround. You can still connect your phone and use wireless CarPlay and Android Auto. However, with GM planning

to abandon phone mirroring features like CarPlay, it's only a matter of time before the automaker closes that loophole, end quote. I'm sharing the story to also share this bit of back of the envelope math from friend of the show Parker Thompson, quoting his thread. Per Google, GM did $156 billion in revenue last year selling $5.9 million cars at an average wholesale price of $26,000. Their net margin was around 6%. So average profit was $1,600 per vehicle. So made-up napkin math, assuming subscriptions are $25 a month at a 40% margin. If sales were to drop 20% because a lot of drivers hate this, but they get 70% of buyers to subscribe for five years because they need maps, they still make money making the product work.

sass is a hell of a drug, end quote. I could be a genius if I just put my mind to it. I know that's not how you pronounce the word genius, but that's how he pronounces it in the song. Somewhat dumb song lyric or the greatest high school yearbook quote ever, you decide. Talk to you tomorrow.