Tech Brew Ride Home - Tue. 02/08 – Nvidia And Arm Are Off

Episode Date: February 8, 2022

It’s a day of retrenchment. Nvidia and Arm are off. Peter Thiel is leaving the Meta board. Peloton loses its CEO ahead of what is likely to be disastrous earnings. The IRS backs down from the whole facial recognition thing. And Tinder stops charging you more if you’re old. Sponsors: Do.co/trh Links: SoftBank’s $66bn sale of chip group Arm to Nvidia collapses (THE (?) Financial Times) Peter Thiel to Exit Meta’s Board to Support Trump-Aligned Candidates (NYTimes) Peloton CEO John Foley to Step Down, Firm to Cut 2,800 Jobs (WSJ) I.R.S. to End Use of Facial Recognition for Identity Verification (NYTimes) Apple Buys Startup That Makes Music With Artificial Intelligence (Bloomberg) Apple announces new Tap to Pay feature that turns iPhones into contactless payment terminals (9to5Mac) Signal now allows you to keep messages and groups after changing phone numbers (ZDNet) Tinder will stop charging older users more for premium features (Engadget) 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 Tuesday, February 8th, 22. I'm Brian McCullough today. It's a day of retrenchment. Invidia and Arm are off. Peter Thiel is off the meta board. Peloton loses its CEO ahead of what is likely to be

disastrous earnings. The IRS backs down from that whole facial recognition thing, and Tinder stops charging you more if you're old. Here's what you miss today in the world of tech. It's a day of follow-up stories like this one. Invidia and SoftBank have called off Nvidia's ARM acquisition following regulatory scrutiny. Arm CEO Simon Seegers is resigning from the company, replaced by Arm IP group President Renee Haas, quoting Financial Times. SoftBank and Nvidia said they have agreed to scrap the deal because of, quote, significant regulatory challenges preventing the consummation of the transaction,

despite good faith efforts by the parties, end quote. The Japanese Technology Group, which will receive a breakup fee of up to $1.25 billion, said it would instead seek an initial public offering of Arm before the end of its next fiscal year in March 2023. The deal's failure brought an immediate management shakeup at arm with Chief Executive Simon Seeger, replaced by Renee Haas, head of the company's intellectual property unit. The collapse of the cash and stock transaction robbed SoftBank, a windfall from a boom in Nvidia's stock property. The deal was worth up to about $40 billion when it was announced in September 2020, but increased as NVIDIA's shares took off. In the UK, where politicians view arm as a strategic national asset, attention is set to shift to whether the company will be listed in London. A British competition review into the deal was extended last year to include national security considerations. However, people close to SoftBank said it would rather list Arm in New York and would resist nationalistic pressure. U.S. markets accord higher valuations to tech stocks even after a recent sell-off. Haas said in an interview with the FT that no decision had been made on where Arm would be listed or whether SoftBank would continue to hold a majority stake after the listing. Invidia had courted British politicians by claiming it was

best placed to provide financial backing for Arm as it seeks to expand into new markets. Haas said the IPO would give Arm, quote, the opportunity to raise some cash, which is always a good thing, end quote. Kirk Budry, a tech analyst at Redex Holdings in Tokyo, said the big question was, quote, whether SoftBank can surface the value it had hoped to receive from Nvidia through the IPO, end quote. Narrator, voiceover voice, it probably will not. Meta has announced that Peter Thiel, one of Facebook's first institutional investors and the longest serving member of its board of directors, will step down from Meta's board this year,

quoting the New York Times. Mr. Teal, 54, wants to focus on influencing November's midterm elections, said a person with knowledge of Mr. Teal's thinking, who declined to be identified. Mr. Teal sees the midterms as crucial to changing the direction of the country, this person said, and he is backing candidates who support the agenda of former President Donald J. Trump. Over the last year, Mr. Teal, who has a net worth estimated at $2.6 billion by Forbes, has become one of the Republican Party's largest donors. He gave $10 million each. last year to the campaigns of two protégés, Blake Masters, who is running for a Senate seat in Arizona,

and J.D. Vance, who is running for Senate in Ohio. Mr. Teal has been on Mehta's board since 2005, when Facebook was a tiny startup, and he was one of its first institutional investors. But scrutiny of Mr. Teal's position on the board has steadily increased as the company was embroiled in political controversies, including barring Mr. Trump from the platform, and as the venture capitalist has become more politically active. The departure means meta loses its board's most prominent conservative voice. The 10-member board has undergone significant changes in recent years, as many of its members have left and been replaced, often with Silicon Valley entrepreneurs. Drew Houston, the chief executive of Dropbox, joined Facebook's board in 2020. Tony Zhu, the founder of DoorDash,

joined it last month. Meta didn't address whether it intends to replace Mr. Teal, end quote. And Peloton co-founder John Foley will step down as CEO of that company to be replaced by ex-Spotify and Netflix CFO, Barry McCarthy. Peloton will cut 2,800 jobs and cancel a planned Ohio factory. Yes, like Zoom, like Netflix. Peloton is one of those good in COVID times stocks that has recently come crashing down to Earth. Peloton's stock price is now at about the same level as it was at the beginning of 2020. Quoting the Wall Street Journal. Peloton co-founder John Fully, who has led the company for its entire 10-year existence, is stepping down as CEO and will become executive chairman, the company told the Wall Street Journal. Barry McCarthy, the former chief

financial officer of Spotify and Netflix, will become CEO and president and join Peloton's board. The New York company will also cut roughly 2,800 jobs affecting 20% of its corporate positions to help cope with the drop-off in demand and widening losses. The cuts won't affect Peloton's instructor roster or content. A little over two weeks ago, activist investor Blackwell's Capital, called for Peloton to fire Mr. Foley and explore a sale of the company, which the journal has reported is attracting potential suitors, including Amazon. The naming of a new CEO could indicate that Peloton sees an independent future for itself

or at least doesn't want to sell at the current depressed share price. Any deal would likely require Mr. Foley's support, as he and other insiders have shares that give them control of over 80% of Peloton's voting power as of September 30th, according to a securities filing, end quote. Quoting David Pierce on Twitter, My hot take is that Nike is clearly the best company to buy Peloton, that Apple absolutely shouldn't, and that Amazon's probably going to do it, end quote. And Dar Obasanjo, quote,

They fell into the clubhouse trap. The pandemic made them. misjudge the size of their market. Peloton's stock chart is the manifestation of the saying that in the near term, the market is a voting machine, but over the long term, it's a weighing machine, end quote. I believe today is Peloton's earnings day after the bell, so if they were willing to announce all of this ahead of that, it's likely to be, as my grandmother used to say, Katie Bar the Door. Thank you to all of you who tweeted at me to alert me that the IRS says it will transition away from using facial recognition for identity verification after a bipartisan backlash

regarding its use of ID.Me services, quoting the New York Times. The IRS said on Monday that it would transition away from using a third-party service for facial recognition to help authenticate people creating online accounts. The transition will occur over the coming weeks to prevent additional disruptions to the tax filing season, which ends April 18th. The tax agency came under criticism after the Treasury Department awarded ID.Me, an identity verification company, an $86 million contract last year to make taxpayer accounts more secure from data leaks, a growing concern. But the service, which requires taxpayers to take video selfies as part of the verification process, frustrated taxpayers and raised concerns about the collection of sensitive

biometric data. The IRS takes taxpayer privacy and security seriously, and we understand the concerns that have been raised, said Charles P. Reddigg, the agency commissioner. Everyone should feel comfortable with how. their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition, end quote. The IRS is developing another authentication process that does not involve facial recognition and is working with other agencies to create tools to protect taxpayer data. The agency said the change would not affect the ability of taxpayers to file their returns. For weeks, advocacy groups complained that making taxpayers have their faces mapped was an invasion

of privacy, and lawmakers received complaints that the creaky IRS website had gotten even hard to use. The IRS got way ahead of itself by forcing taxpayers to use facial recognition without having done the hard work of ensuring the technology's appropriateness, said Eric Goldman, co-director of the High Tech Law Institute at Santa Clara University. The IRS's backtracking on facial recognition-based identity verification provides a strong cautionary tale for any other government agencies thinking facial recognition is an easy or quick solution, end quote. Look, this always seemed odd to me from the very beginning, because as has been discussed on this show many, many times, facial recognition tech is new and it's extremely controversial. So it was bizarre that somehow the IRS, an organization not exactly known for Bleeding Edge technology, not only was taking the lead in adopting this technology, but also it was sort of a fait accompli. It was not like the IRS floated this as an idea and it got shot down. It always felt fishing to me that the deal was already in place.

Like, this was going to go into effect in mere months. And yet, it seemed like the last use case that you could imagine it being adopted for would be this. You think people feel icky about using facial recognition tech when crossing the border, but they were trying to say that the government was going to require keeping your face on file just to pay them your taxes. You can do all of your banking without facial recognition, but somehow you would need your face just to log in. into the IRS website? It just was always bizarre. A source is telling Bloomberg that Apple has acquired London-based AI music, which uses AI and royalty-free music to create dynamic soundtracks that

change based on interactions or moods, quoting Mark German. The idea is to generate dynamic soundtracks that change based on user interaction. A song in a video game could change to fit the mood, for instance, or music during a workout could adapt to the user's intensity. On its LinkedIn page, AI Music said its goal is to, quote, give consumers the power to choose the music they want, seamlessly edited to fit their needs or create dynamic solutions that adapt to fit their audiences, end quote. The startup had earlier deals with advertising companies to create more engaging ads that play different music depending on the audience. While relatively small, the deal is one of the tech giants' few acquisitions in the past year. Apple's last reported

purchase was also for a music company, Prime Phonic. That startup ran a classical music streaming service that Apple intends to turn into an app tied to Apple music this year. Apple dramatically slowed down its acquisition spending during 2021, devoting only $33 million to deal payments over the fiscal year, according to a filing in October. That's down from $1.5 billion in 2020 and $624 million in 2019, end quote. Oh, in late breaking, but I did manage to catch it in time. Apple has indeed unveiled Tap to Pay on iPhone, which lets merchants accept contactless payments like Apple pay via iPhone and a partner-enabled app coming this year in the U.S., quoting 9 to 5 Mac. The most interesting part of this new feature from Apple is that the company is actually teaming up with third parties

and making the platform available to app developers and other payment platforms. Apple says that Stripe will be the first payment platform to offer TAP to pay on iPhone this spring, including via an update to the Shopify point-of-sale application. What this means is that this won't be a native iOS feature, but rather Apple is opening the NFC chip up in the iPhone to third-party payment platforms to create applications that enable Tap-to-Pay technology. Apple explains, quote, Tap-to-pay on iPhone will be available for payment platforms and app developers to integrate into their iOS apps and offer as a payment option to their business customers. Stripe will be the first payment platform to offer tap-to-pay on iPhone

to their business customers, including the Shopify point-of-sale app this spring, additional payment platforms and apps will follow later this year. The feature is slated to launch sometime late this year in the United States. Once the platform is open, merchants will be able to accept contactless payments through a supporting iOS app on an iPhone 10S or later. It will work by the merchant prompting the customer to hold their iPhone or Apple Watch to pay with Apple Pay, their contactless credit or debit card, or another digital wallet near the merchant's iPhone.

The payment will then be securely completed using NFC technology. Stripe has launched a landing page for this new feature, allowing businesses to express their interest in tap-to-pay on iPhone for Stripe Terminal. Apple says that tap-to-pay on iPhone will launch in an upcoming iOS software beta. It will be available to participating payment platforms and their app developer partners via new SDKs, and quote. Signal now lets users change the phone number associated with their account while still retaining and maintaining their messages, profile information, and groups. Quoting ZDNet. initiate a move, users will need to head into account settings, hit the change phone number option, and complete a form with the old and new phone numbers. Signal warns in a support note that users

will not be able to undo the shift. Contacts of the shifting user will see an alert that states the user's phone number has changed. If a signal user does not have access to the old number, signal suggests the old process of deleting the account to wipe message history, registering a new account with the new number, and messaging contacts to tell them about the new number. When someone registers with the old number, the message history should be blank, Signal said. Your contacts will also be made aware of a safety number change if they start messaging with the old number, Signal stated.

The company said the new feature was built, quote, using the foundation of more exciting features to come, end quote. And finally, Tinder says it will no longer charge older users more for Tinder Plus. After a report showed that users aged 30 to 49 were charged on average 65.3% more. in multiple markets. So today I learned that Tinder was charging older users more than younger users, quoting in Gadget. Tinder says it will no longer charge older users more to use Tinder Plus following a new report questioning the dating apps practice of charging older users, quote, substantially more. The report from Mozilla and Consumers International detailed just how much Tinder Plus pricing can vary based on a user's age. The report relied on mystery shoppers in six

countries. The United States, the Netherlands, New Zealand, Korea, India, and Brazil, who signed up for Tinder Plus and reported back how much the app charged for the subscription. According to the report, Tinder users between the ages of 30 and 49 were charged an average of 65.3% more than their younger counterparts in every country except Brazil. Tinder's age-based pricing for Tinder Plus, which gives users access to premium features like unlimited likes, has long been a source of controversy for the dating app. When it launched, the company said it charged older users more because younger people were more, quote, budget constrained. Since then, the dating app has been hit with at least one class action lawsuit over the practice. But though Tinder had pledged to end the practice in some

areas, like California where the class action suit originated, the company continued to offer different rates in many countries. The latest report from Consumers International highlights just how much the dating app's subscription pricing could vary. In New Zealand, where the mystery shoppers were quoted a total of 25 different prices, the lowest quoted price was $4.95, while the highest was $24.54, according to the report. In the Netherlands, there were 31 different prices with the lowest at $4.45 and the highest at $25.95. Now, Tinder says it plans to abandon its age-based pricing altogether. In a blog post published Sunday, Tinder said younger users were offered subscriptions at different rates in order to, quote, make Tinder affordable for those in school or

early in their careers, end quote. The company said it ended the practice in the U.S., Australia, and UK, and that it plans on, quote, eliminating age-based pricing for all our members in all markets by the end of Q2 this year, end quote. The company says it never used other personal or demographic info to determine rates, end quote. Does anyone know definitively, is it called the financial times, the financial times, or just financial times? I've always called it the financial times, but maybe I'm wrong. People tend to call it FT for short. If anyone knows for sure, which one it is, though. Please hit me up on Twitter. Thanks.