Tech Brew Ride Home - Thu. 10/19 – A Setback For OpenAI?

Episode Date: October 19, 2023

Is crypto being used for terrorism in the current war? Netflix has good earnings and raises prices. Again. Again I ask why tech layoffs have returned. What does it mean if OpenAI had to completely scrap a new AI model? And if those FaceTime video reactions are annoying you, I’ll tell you how to turn them off. Sponsors: Nutrafol.com/men promocode: ridehome Links: Chainalysis says some reports might be overestimating crypto's role in terrorist financing (The Block) NY Attorney General sues Gemini, Genesis and DCG for allegedly defrauding crypto investors of over $1B (TechCrunch) WhatsApp will soon let you stay logged in to two accounts at once (The Verge) Netflix Plans Price Increase as Password-Sharing Crackdown Boosts Subscriber Growth (WSJ) Nokia to cut up to 14,000 jobs after 69% profit plunge (CNBC) Authors sue Meta, Microsoft, Bloomberg in latest AI copyright clash (Reuters) OpenAI Dropped Work on New ‘Arrakis’ AI Model in Rare Setback (The Information) How to turn off FaceTime video reactions in iOS 17 and macOS Sonoma (AppleInsider) 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, October 19th, 2023. I'm Brian McCullough. Today is crypto being used for terrorism in the current war. Netflix has good earnings and raises prices again. What does it mean if OpenAI had to completely scrap a new AI model? And if those FaceTime video reactions are annoying you, I'll tell you how to turn them off. Here's what you missed today in the world of tech. As the conflict in the Middle East continues apace, there have been various headlines about the supposed. use of crypto by terrorist organizations. Well, chain aliasis, which, you know, chain alias, so maybe grain of salt, but chain analysis says these reports have been overstating metrics and using what they

term to be flawed analysis, quoting the block. Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency. Sheen Alice wrote in a blog post, terrorist organizations have historically used and will likely continue to use traditional fiat-based methods, such as financial institutions,

Hawalas, and Shell companies as their primary financing vehicles, end quote. In the aftermath of Hamas's terrorist attack on Israel, various media outlets have sought to estimate the level of illicit crypto funds that may have been funneled into the offensive. Senator Elizabeth Warren, along with more than 100 other lawmakers on Wednesday,

cited a report from the Wall Street Journal about Hamas's supposed use of crypto and said she wants answers from the administration of President Joe Biden. Jane Alasas argues there are, quote, two key components to analyzing the volume and flow of terrorism-related funds, quantifying the funds directly in the hands of a terrorist organization and identifying the service providers that facilitate the movement of funds tied to terror financing. We have seen recent estimates related to the attack on Israel that appear to include all flows to certain service providers, that received some funds associated with terrorism financing, chain analysis said. In other words, those totals include funds not explicitly related to terrorism

financing. To the untrained eye, it might appear that $82 million worth of cryptocurrency was raised for terror financing, chain analysis continued, but it is much more likely that a small portion of these funds were intended for terrorist activity, and a majority of the funds processed through the suspected service provider were unrelated, end quote. The firm estimates that of the $82 million it zeroes in on, quote, about $400,000, and $50,000 worth of funds were transferred from a terror-affiliated wallet, adding that, quote, it would be incorrect to assume all of the transaction activity is related to terrorism. Although the firm is skeptical about estimates, it said, have been used in some media outlets.

Chain analysis stated that the role of service providers should not be ignored. Quote, these service providers are supporting terrorism by acting as facilitators and cutting off terrorist access to them through sanctions or other offensive operations is an important component to disrupting terrorist finance, it said in the post, end quote. Also in Crypto Land, New York Attorney General Letitia James has sued the Winklevoss's Gemini Exchange, but also Genesis and its parent company Digital Currency Group, alleging these companies defrauded 230,000 investors of more than $1 billion. The irony here is, if you remember some months back, the Winklewe and DCG were in a big public feud,

accusing each other of defrauding each other, quoting TechCrunch. The lawsuit also brought charges against Genesis, former CEO Soichiro, Michael Morrow, and DGC's founder and CEO Barry Silbert, for trying to hide $1.1 billion in losses, and quote, defrauding investors and the public, end quote. About 230,000 investors were affected by the three firms. The government's statement alleges the investigation claims that Gemini lied to investors about its investment program Gemini earn by calling it a low-risk investment when it wasn't. The lawsuit alleges that Gemini knew Genesis's loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Freed's Alameda, but did not reveal this information to investors, the agency stated. This fraud is yet another

example of bad actors causing harm through the under-regulated cryptocurrency industry, James said in a statement. In June 2022, one of Genesis's largest borrowers, Crypto hedge fund, Three Arrows Capital, defaulted on billions of dollars in loans and later filed for bankruptcy in July. Around that time, Genesis lost over $100 million from another borrower, Babel Finance. The New York Attorney General stated, bringing its total losses to greater than $1.1 billion. The allegations come at a time when Bankman Freed, co-founder of Crypto Exchange, FtX and Cryptot Trading Firm Alameda, is on trial for seven charges related to fraud and money laundering.

After FDX and Alameda filed for bankruptcy in November, the resulting market carnage helped bring down Genesis, which filed for bankruptcy in January, end quote. What's App plans to let users switch between two accounts on Android in the coming weeks. A second account will still need a separate phone number and SIM card, however. Quoting the verge. If you use two different WhatsApp accounts, you'll soon be able to access both from just one device. Meta CEO Mark Zuckerberg announced Thursday that WhatsApp is rolling out the ability to switch between accounts on Android, and you won't need to lug around an extra device or continuously log out of your account to be able to do so.

This new feature should make it easier to manage your conversations across multiple accounts, like if you have one WhatsApp account for work and another for messaging friends and family members. It's rolling out in the coming weeks. Meta notes that you'll still need a separate phone number and SIM card, or a phone that accepts multi-sim or e-sim, if you want to set up a second account. You'll also need the second phone or its SIM card to receive the one-time pass code that WhatsApp will send via SMS to gain access to your second account on a different device. After this initial verification, the app will continue to work for both accounts without the second

device or SIM, says WhatsApp spokesperson Ellie Heatrick, end quote. Netflix reported earnings yesterday, and they seem to be good. Revenue up 7.8% year-on-year, and the key number here, Global Paid membership, was up 10.8% year-on-year, beating analyst estimates. Netflix's shares were up over 15% this morning in pre-market trading, but there's also this. Netflix is raising its U.S. prices for its basic plan from $999 to $1199 per month, its premium plan from 1999 to $2.99, and some of its prices in the UK and France. Quoting the journal, the price increases are a sign of streamers' efforts to improve profitability and wean customers off the low monthly subscription fees that drew users away from pricey cable bundles

in the early days of streaming. Netflix said in its third quarter earnings report that its average revenue per member decreased 1% year over year as a result of limited price increases over the past 18 months, a higher percentage of its growth coming from countries where it charges less for plans and changes to its mix of its subscriptions. It expects average revenue per member to improve in 2024, given the price increases and the expected growth in ad revenue. Netflix has fared better than many of its rivals this year with companies such as Disney and Warner Brothers Discovery, grappling with ailing legacy cable businesses and costly transitions to streaming on top of strikes that disrupted their production

schedules. The company ended the quarter with 247.15 million paid subscribers, end quote. Again, I don't know why tech layoffs have come roaring back. I can only tell you what I'm seeing in the headlines. Nokia plans to cut up to 14,000 jobs or around 16% of its 86,000 workforce after reporting Q3-2020 net sales down 20% year over year to, $4.98 billion and profit down 69% year-over-year to 133 million euros. Quoting CNBC. One of the world's largest telecommunications equipment makers, Nokia has been facing headwinds from a slowing global economy and from infrastructure spending reductions made by mobile operators. Sales from Nokia's biggest unit by revenue, its mobile network's business, declined 24% year-on-year

to 2.16 billion euros with operating profit for the division diving 64% year-on-year. Nokia said this was mainly driven by declines in North America. The company also described sale volumes in key market India as moderated as 5G deployments normalize. 5G is next generation mobile internet that promises faster speeds, and Nokia is part of India's rollout of the technology. Cost-cutting measures have also taken place in the U.S. this year, particularly with carriers such as Verizon and AT&T. Earlier this year, Nokia's rival Erickson announced plans to lay off 8,500 employees, also part of a cost-cutting plan, end quote. It's happened again, Mike Huckabee, Lysa Terkhurst, and other authors are suing Meta, Microsoft,

and Bloomberg over use of the Books 3 dataset, which includes pirated books, to train their LLMs, quoting Reuters. A group of writers, including former Arkansas Governor Mike Huckabee and best-selling Christian author Lisa Terkirst have filed a lawsuit in New York federal court that accuses Meta, Microsoft, and Bloomberg of using their work to train artificial intelligence systems without permission. The proposed class action copyright lawsuit filed on Tuesday said that the companies used the controversial Books 3 dataset, which the writer said contains thousands of pirated books to teach their large language models how to respond to human prompts. The lawsuit also accused AI research group, a Luther AI, of copyright infringement for

allegedly providing data used to train the company's systems. That includes Books 3. A Bloomberg spokesperson said on Wednesday that the company was not using books three to train commercial versions of its large language model, Bloomberg GPT, though it used the dataset to train its research model. A spokesperson for Microsoft declined to comment, and representatives for meta did not immediately respond to a request for comment on the lawsuit on Wednesday, end quote. This is interesting. Open AI has had to drop work on a next generation AI model that it was designing to be more efficient, quoting the information. Last year, around the time, chat GPT became a global sensation, the engineers at OpenAI began working on a new artificial intelligence model

codenamed Aracus. Although OpenAI was preparing to boost chat GPD with a different model, now known as GPT4, which it had completed earlier in the year, the upcoming Aracas model would allow the company to run the chatbot less expensively. Success with Aracus would also help OpenAI show Microsoft how fast it could create successive large language models, which would be valuable as the two firms finished negotiating a $10 billion investment and product deal. But by the middle of 2023, OpenAI had scrapped the Aracus launch after the model didn't run as efficiently as the company expected, according to people with knowledge of the situation. The stumble meant OpenAI had lost precious time and would need to shift its resources toward developing a different model.

The failure also disappointed some executives at Microsoft, which paid for the right to use the startup's technology in its products, according to a Microsoft employee with knowledge of the matter. The Aracus setback could pierce OpenAI's aura of invincibility after it humbled AI pioneer Google and built one of the fastest growing software businesses in history. It shows how the frontier of AI is riddled with pitfalls that can be hard to predict. Although the Aracus problems didn't slow Open AI's business this year, the startup could feel the effects in the coming year as the race to launch new LLMs intensifies. Google, for instance, is nearing the launch of Gemini a set of AI models it hopes will beat GPT4 in terms of coding and other capabilities and the accuracy of responses.

OpenAI, for its part, continues to release improvements to its industry-leading model, including the ability to decipher images and plans to announce a slew of new features in November. LLMs underpin products such as chat GPT, and some at OpenAI also view them as having the potential to be a kind of operating system, including for personal devices because of their ability to write code, make sense of images, and retrieve files. Open AI started working on Aracas last fall in the hopes of developing a model that would be on par with GPT4, but could run more efficiently, in part by leveraging a machine learning concept known as sparsity, the people said. Other AI developers such as Google have also publicly discussed their use of sparsity, which OpenAI successfully incorporated in earlier software.

Aracus would have allowed OpenAI to roll out its technology more widely, as the company had access to a limited number of specialized server chips to power its software, they said. Around this spring, OpenAI's researchers began to run. training the model, which involves using advanced computing hardware to help the model process massive amounts of data so that it can learn patterns. The company expected it would be significantly cheaper than the process of training GPD4, the people said. Early on, however, employees realized that the model was not performing well enough to reap the expected benefits. After staff spent roughly a month trying to fix the issues, OpenAI's senior leadership decided to pull the plug

on training it, the people said. Despite the setback, OpenAI could still incorporate its work on Arrackus into other models, that includes Gobe, an upcoming model that can generate or analyze text as well as visuals, also known as multimodal, end quote. Finally today, news you can maybe use if those new video reactions that came to iOS 17 and MacOS Sonoma are making things awkward for you in your FaceTime. Here's how you turn them off. Goating Apple Insider. As part of iOS 17 and MacOS Sonoma, Apple introduced a video feature called Reactions.

When you perform and hold a gesture while in view of the camera, a special effect is displayed in the camera feed seen by other people. There are quite a few effects ranging from speech bubbles with thumbs up and thumbs down icons to floating balloons, confetti, and stormy rain conditions. Triggered by hand gestures, they are designed to let users show how they feel with a more enhanced image. This is a potentially entertaining feature when it's active in calls with friends and family, but there are many occasions where you may not necessarily want the reactions to occur. For example, you don't want fireworks and confetti to suddenly appear around you when you're in a work-related conference call. In a real-life example, Matt Howie wrote on Macedon about an instance where a friend of his was in an online therapy session.

When the therapist asked if he was all right, the friend did a double thumbs up triggering fireworks behind his head. It's so bad that online therapy sessions now start with a warning dialogue, Howie writes. Sadly, Apple has the reactive element set on as default for anyone using an Apple Silicon Mac with MacOS Sonoma or later, or any compatible Mac using an iPhone 12 or later with continuity camera, or on an iPhone running iOS 17. The feature is also predominantly associated with FaceTime, but they can also be used in other video-based apps too. How to turn off FaceTime reactions in iOS 17. Open FaceTime, open control center, which is a swipe-down action from the top right of the display for face ID devices and a swipe up from the bottom for Touch ID models. Tap Effects, which will have a camera icon,

and show the word reactions. Tap reactions. How to turn off FaceTime reactions in MacOS Sonoma. Open FaceTime. Click the video in the menu bar. It will usually be a green and white camera icon. Click reactions, end quote. Nothing for you today. Talk to you tomorrow.