Tech Brew Ride Home - Thu. 08/31 – In A Sense, Bundling Is Always Consumer Friendly

Episode Date: August 31, 2023

Microsoft unbundles Teams to stay ahead of EU antitrust action. But is that actually good for European consumers? Elon wants to collect your biometric data. Can AI police online smack talking in games? Lessons from the grocery delivery bubble. And, surprise, the Weekend Longreads Suggestions. Links: Microsoft Fends Off EU Antitrust Probe With Teams Deal (Bloomberg) Microsoft is unbundling Teams from Office in Europe to address regulator concerns (The Verge) X Plans to Collect Biometric Data, Job and School History (Bloomberg) Call of Duty enlists AI to eavesdrop on voice chat and help ban toxic players starting today (PCGamer) Bonfire of the groceries (FT) Weekend Longreads Suggestions: Despite Cheating Fears, Schools Repeal ChatGPT Bans (NYTimes) A Startup in the New Jersey Suburbs Is Battling the Giants of Silicon Valley (WSJ) Where do fonts come from? This one business, mostly (The Hustle) 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, August 31st, 2023. I'm Brian McCullough today. Microsoft unbundles teams to stay ahead of EU antitrust action, but is that actually good for European consumers? Elon wants to collect your biometric data for some reason. Can AI police online smack talking and games? Lessons from the grocery delivery bubble and surprise the weekend long read suggestions. Here's what you miss today in the world of tech. Microsoft announced plans to unbundled teams, from Microsoft 365 and Office 365 subscriptions across Europe, starting on October 1st. They are instead offering teams to Enterprise for $24 a year. This is all to placate EU antitrust

concerns. But listen to the end because I'm not entirely sure this is consumer-friendly, quoting Bloomberg. The Redmond-Washington-based firm is trying to avoid formal antitrust charges from the EU and the risk of future fines, following the Block's decision to open a probe in July. EU investigators are examining whether Microsoft breach competition rules by tying or bundling teams to its Office 365 and Microsoft 365 packages. This follows a complaint from Salesforce's messaging platform Slack made three years ago, end quote, and quoting the verge. The unbundling means that enterprise customers in EU markets will be able to purchase Microsoft 365 subscriptions at a lower monthly price without teams.

or have to buy a standalone version of teams at a list price of five euros per month or 60 euros per year. We will instead simply sell these offerings without teams at a lower price, two euros less per month or 24 euros per year, Microsoft said in the announcement. The new bundles and pricing will only affect new subscriptions as existing enterprise users can continue to renew their suites and add or remove seats at renewal or even switch to these new without teams' plans. The unbundling is largely targeted at enterprises as Microsoft will keep bundling teams in its Microsoft 365 business plans that are offered to small businesses. Microsoft will also offer a no-teams option priced at one euro less per month for the business basic plan or two-year-less per month for business standard or premium plans.

Alongside the teams on bundling, Microsoft is also planning to improve its documentation on interoperability with Microsoft 365 and Office 365 for rivals like Zoom and Slack to integrate into Exchange Outlook and Teams. Microsoft will also allow rivals to host office web applications within their competing apps, just like how Microsoft does in Teams, end quote. So here's the consumer part I mentioned up top. Check my math on this, but by unbundling, you pay two euro less per month for a 365 subscription. You're saving two euro. But then to add teams standalone on top of any 365 subscription, which you might want to do, since that's the bundle where your office productivity apps live,

The lowest price for that is five euros a month, so you're actually paying three euros more. Hmm, sometimes bundling is consumer-friendly for a reason. X, nay, Twitter did a bunch of things over the past 24 hours. First, X updated its privacy policy to include new biometric data, which the company plans to collect for safety and security, it says, along with data on jobs and education. Quoting Bloomberg, based on your consent, we may collect and use your biometric information for safety, security,

and identification purposes. The company said in its new policy, X doesn't define what it considers biometric, though other companies have used the term to describe data gleaned from a person's face, eyes, and fingerprints. It's unclear how X will collect the biometric data or how it may be used. Elon Musk, who bought Twitter last year, has said one of his priorities is to rid the site of inauthentic accounts and push more users toward using a service that applies a blue checkmark indicating the user has paid $8 a month and is more likely to be human. X also says it intends to gather information about users' jobs and education histories, end quote. As Colin Willem snarked on X, quote, blue checkmarks for some retina scans for others, end quote.

Elon also said X users will be able to make video and audio calls on X soon without a phone number, but offered no time frame for when that would actually happen. that X is the effective global address book, which he's sort of right about, actually definitely right. That was always one of Twitter's biggest strengths that they never actually leaned into. Sony plans to raise PlayStation Plus annual subscription prices on September 6th. Essential goes from $60 to $80, extra goes from $100 to $135. Premium goes from $120 to $160. So gaming subscriptions are going the way of streaming subscriptions, which is prices price go up. I believe Xbox announced some sort of similar price increases recently,

but that's not what interests me in gaming today. What interests me is the news that Activision has partnered with Modulate to begin testing what is called ToxMod, an AI-based voice moderation tool for Modern Warfare 2 and other games played online in North America. I mean, if you've done any sort of live online gaming where other players can talk back to you, You know that that's maybe the dankest part of the internet. It has always been thus. I was a Call of Duty live player going back to the mid-aughts, and eight-year-olds would call you racial slurs on the regs all the way back then. Curious to see if this can work, like at all. Quoting PC gamer. Call of Duty is joining the growing number of online games combating toxicity by listening to in-game voice chat and using its AI to assist the process. Activision announced a partnership with AI outfit modulate to integrate its proprietary voice moderation tool ToxMod in the Modern Warfare 2, Warzone 2, and the upcoming Modern Warfare 3. Activision says ToxMod, which begins beta testing in North America's service today, is able to, quote, identify in real time and enforce against toxic

speech, including hate speech, discriminatory language, harassment, and more, end quote. Modulate describes ToxMod as, quote, the only proactive voice chat moderation solution purpose built for games. While the official website lists a few games, Toxmod is already being used in, mostly small VR games like Rec Room, Call of Duties hundreds of thousands of daily players will likely represent the largest deployment of the tool to date. Call of Duty's Toxmod AI will not have free reign to issue player bans, however, a voice chat moderation Q&A published today specifies that the AI's only job is to observe and report, not punish. So while voice chat complaints against you will, in theory, be judged by a human before any action is taken.

Toxmod looks at more than just keywords when flagging potential offenses. The company says its language model has put in the hours listening to speech from people with a variety of backgrounds and can accurately distinguish between malice and friendly riffing. Interestingly, modulates ethics policy states, Toxmod, quote, does not detect or identify the ethnicity of individual speakers, but does listen to conversational cues to determine how others. in the conversation are reacting to the use of certain terms. Modulate also offers the example of harmful speech towards kids. Quote, for instance, if we detect a prepubescent speaker in a chat,

we might rate certain kinds of offenses more severely due to the risk to the child. The site reads, end quote. Remember the whole grocery delivery startup bubble of, I don't know, what was it, 2018 through 2022, roughly? Remember me saying on the show, I guess they got the unit economics problem solved this time because believe me, they've tried this before in the past, and no one has ever been able to make the math work out, to make money delivering one pint of ice cream to somebody's doorstep. Well, if this piece from the Financial Times is to be believed, no. In fact, it seems they just ran the same old playbook over again. Quote, rapid grocery delivery startups, including Get Tier and GoPuff, have raised more than $10 billion from investors, according to Morgan Stanley data.

rounds were mostly squeezed into the 12 months of early 2021. In what Morgan Stanley, analysts Edward Stanley and Matthias Overham said will be a, quote, case study for future investors from the growth at any price era, end quote. So what are the lessons? First, it's not easy to blitzscale demand into existence. Morgan Stanley uses Google Trends and app downloads data as proxies for consumer interest, finding that searches for delivery discounts dropped by about 90% once global venture capital deployment had peaked. Or, to put it another way, a wall of VC money was paying for the advertising and promotions that conjured up the rapid delivery market from nothing. But as soon as interest rates began to rise and new funding was choked off, the market returned to nothing. This could be

an oversimplification. Maybe backers became wary, having learned that the unit economics of rapid delivery didn't work as hoped, or that established operators like Uber and Deliveroo were able to compete without resorting to M&A. It's unknowable how much VC funding dropped off, because startups failed to scale or vice versa. The parable is not just about easy gains from easy money. Some business ideas are just crap no matter what, end quote. In other words, just as in the pets.com era, consumers love the ability to deliver goods to their door for essentially free, but once you make it cost what it actually should cost, they return to the status quo, which is Amazon is just fine. Time for the weekend long read suggestions. First up from the New York

times, despite cheating and misinformation fears, some U.S. schools that once race to block AI chatbot access are now encouraging teachers and students to use AI. Is the analogy here the way that schools had to learn to adapt to the use of calculators in classrooms when teaching math back in the 70s and 80s? Quote, some districts are embracing tools like chat GPT as lesson planning aids for teachers and as opportunities for students to learn how bots can concoct misinformation and replicate human biases. Administrators say they are simply taking a pragmatic view. Students will need to learn how to prompt chatbots to answer their questions just as they learn to query search engines like Google. The world our kids are inheriting is going to be full of AI and we need to make sure they

are well equipped for it, both the benefits and the drawbacks. Wade Smith, the superintendent of Walla Walla Public Schools, said in a recent interview. Putting our heads behind the curtain or under the sheets and hoping it goes away is simply not reality." End quote. Walla Walla offers a portrait of one district's remarkable learning curve on AI this year. School administrators sought to take advantage of the chatbot's potential benefits while working to tackle thorny issues like cheating, misinformation, and potential risk to student privacy. The district is encouraging teachers to embrace the chatbots, including schooling students on their apparent flaws. Students 13 or older may also create chat GPT accounts if they wish,

end quote. Then the journal has a profile of New Jersey-based Corweave, which is taking on some pretty big players in this AI race by offering Nvidia GPUs in the cloud. CoreWeave has a recent around $2 billion valuation, fewer than 250 staff members, but has more than 700 clients, including the likes of Microsoft. Quote, few companies have seen their value change as much in the past year as CoreWeave, a specialized cloud provider offering access to the advanced chips, futuristic data centers, and accelerated computing that fuel generative artificial intelligence. It owns the mighty GPUs that have become engines of modern innovation, and CoreWeave sells time and space on supercomputers to clients in desperate need of the processing power that

AI requires. It's how a business that most people have never heard of is playing an influential role in a tech revolution. CoreWeave has quickly and improbably become one of the largest GPU providers and leaders in the arms race for AI infrastructure. It raised more than $400 million this spring from chipmaker Nvidia. It's secured another $2.3 billion in debt financing this summer to open data centers by essentially turning chips into financial instruments, using its stash of highly coveted Nvidia semiconductors as collateral. Now it's racing to keep pace with the fastest software adoption curve in history. Infrastructure is not the first thing that comes to mind when you think about generative artificial intelligence, the tech behind chatbots, productivity tools,

and buzzy startups in every field. But you wouldn't be thinking about generative artificial intelligence without solid infrastructure. It's similar to electricity. Do you think of the power plant when you flip a light switch? said Brunnen McBee, Corweave's chief strategy officer and third co-founder. What we're doing right now is building the electricity grid for the AI market. If this stuff doesn't get built, then AI will not be able to scale. Corweave has fewer employees. employees, 250, than clients, 700, but it has deals with inflection AI and even Open AI backer Microsoft. The company's executives say they offer customized systems and a wider range of chips in more configurations than servers equipped for general purpose computing. That flexibility makes their

product more efficient for a broad spectrum of AI applications, end quote. Finally today, some of you might know this story, but have you ever wondered where fonts come from? Actually, they tend to come from one place. Quoting the hustle, fonts are a ubiquitous commodity. Every font you see on your computer screen, a street sign, a t-shirt, or your car's dashboard has been crafted by a designer. With 4.5,000 independent artists selling on the site My Fonts today, many struggle to attract customers and make a living in an oversaturated market. And it's only getting harder, as designers must compete with and abide by the terms of one company that's approaching behemoth status. Monotype. Monotype owns not only many of the world's most popular fonts, but also exchanges like

my fonts, where font designers bring their work to market. The industry is inching toward a monopoly, and it's leaving independent designers with fewer places to go. Monotype got its start at the end of the 19th century. The company was founded in Philadelphia by Tolbert Lansston, whose monotype machine invention allowed for increased speed and efficiency when producing type. Over the next few decades, Monotype by then with branches in the U.S. and U.S. and U.K., developed popular typefaces such as Gil Sands, Perpetua and Times New Roman. In the last half of the 20th century, the font industry, always volatile and rife with mergers and acquisitions, went through rapid change. The mechanized process of monotype signature machine faded out, replaced by phototype

setting and then digital type setting, bringing fonts to screens. Monotype endured financial difficulties and restructurings, eventually being acquired by Boston private equity firm TA Associates in 2004 and going public with stock ticker name type in 2007. The retooled monotype saw its annual revenues climb from $107 million in 2010 to $247 million in 2018 and became a powerhouse. In 2019, private equity firm HGGC bought Monotype for $825 million, acquiring its roster of typefaces and setting it up for even more acquisitions. The company has since purchased URW Foundry and Huffler and Company, a renowned independent foundry.

According to Quartz, Monotype has claimed its purchases made life better for customers, who only have to navigate a licensing agreement from one company to access a bevy of fonts. But one font designer believed the acquisition of Hoffler and Company felt like, quote, a crackin eating up the industry, end quote. Once again, no weekend bonus episodes this weekend. And actually, until they begin to start happening in earnest again this fall,

I'm just going to pin you when there actually are episodes to tell you about. But what you should know, or should have guessed by the weekend Longreeds section showing up today, I'm taking tomorrow off. And Monday is Labor Day, so I will talk to you again on Tuesday. Hope you all have a good final weekend of the summer if you're listening to me in the Northern Hemisphere.