Tech Brew Ride Home - Tue. 02/13 – Why Microsoft’s Xbox Strategy Shift Is A Big Deal

Episode Date: February 13, 2024

Threads gets “today’s topics.” iMessage and Bing dodge EU DMA regulation. Why Temu bought a bunch of SuperBowl ads. Nvidia’s Chat with RTX lets you run your own ChatGPT right on your Windows machine. And why Microsoft’s forthcoming Xbox strategy shift is potentially such a big deal. Sponsors: ArcticWolf.com/techmeme Shopify.com/ride Links: In battle with X, Threads gets trending topics where politics will be allowed (TechCrunch) Apple iMessage, Microsoft Bing Dodge EU’s Big Tech Crackdown (Bloomberg) Temu Spent Millions on Six Super Bowl Ads as It Tries to Win Back US Shoppers (Bloomberg) The unsettling scourge of obituary spam (The Verge) Chat With RTX brings custom local chatbots to Nvidia AI PCs (VentureBeat) NVIDIA's New AI Chatbot Relies On Local Files, Not the Cloud (HowToGeek) Nvidia’s Chat with RTX is a promising AI chatbot that runs locally on your PC (The Verge) Microsoft prepares to take Xbox everywhere (The Verge) 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 13th, 2024. I'm Brian McCullough today. Threads gets today's topics. IMessage and Bing Dodge EUDMA regulations. Why Temu bought a bunch of Super Bowl ads.

Invidia's chat with RTX lets you run your own chat GPT right on your Windows machine and why Microsoft's forthcoming Xbox strategy shift is potentially such a big deal. Here's what you miss today in the world of tech. Meta has begun testing today's topics on Thread. in the U.S. This is like Twitter's trending topics, and though I haven't seen it myself yet, apparently it is surfaced in the app on the search page and in the for you feed. Also, this can apparently feature political content, quoting TechCrunch. Today's topics, as the section will be titled, are determined by meta's AI systems and are based on what people are engaging

with on threads meta-told TechCrunch. These topics will be surfaced in the app in two places on the search page and in the for you feed. The machine learning algorithm will take into account a variety of signals, including how many people are talking about a given topic and how many people have engaged with posts on that same topic. Meta says its team of content specialists will ensure the topics aren't in violation of the site's community guidelines and, quote, other applicable integrity guidelines. It also said that Meta's team would check to ensure that there aren't duplicate topics and that the topics featured aren't nonsensical or misleading. In addition, users will be able to flag potentially problematic content in the case that a topic surfaces that violates guidelines but

isn't immediately caught by the site's moderators. Of course, what we wanted to know was whether or not meta would suppress political content within topics given it had proclaimed last week that it would no longer recommend political content across recommendation surfaces on Instagram and threads. That change impacts areas like Instagram Reels and Instagram Explorer, as well as the in-feed recommendations across both Instagram and threads, the company explained at the time. Political content can be a topic, a rep for Meta said. We will only remove political topics if they violate our community guidelines or other applicable integrity policies. Today's topics aim to reflect

timely, relevant topics in the app and are not personalized recommendations, they explained. In other words, because topics are determined by algorithms but aren't individualized to the end users, they don't get swept up in threads, political content purge from recommendations, end quote. The EU has closed its DMA investigation into Apple's iMessage as well as Microsoft's Bing, Edge, and advertising products deciding against regulating these services due to their lack of alleged dominance in the market. Quoting Bloomberg. The decision from the EU regulators is a win for the two U.S. firms, which would have been obliged to adapt their services to meet a swath of new obligations and prohibitions, designed to limit market power abuses. The decision confirms an earlier Bloomberg,

News report that these services would escape the scope of the tech crackdown. The EU's DMA strikes at the heart of the business models of six of the world's most powerful technology firms deemed to be digital, quote, gatekeepers. While some of their services are now set to be exempt, Microsoft and Apple alongside meta, Alphabet's Google, Amazon, and TikTok owner, ByteDance will still face a raft of new obligations aimed at preventing them from abusing their dominance in other parts of their businesses. For Microsoft, this includes its Windows operating system for PCs and LinkedIn, in social media platform. For Apple, it includes its iOS mobile operating system, App Store, and Safari browser. Under the law, it will be illegal for the designated firms

to favor their own services over those of rivals. They'll be barred from combining personal data across their different services, prohibited from using data they collect from third-party merchants to compete against them, and will have to allow users to download apps from rival platforms. The new rules are set to fully come into play on March 7, end quote. Lots of snark this weekend about how, at least compared to recent years, did you notice that the only mention of crypto during the Super Bowl was Jack Dorsey's Satoshi sweatshirt up in his suite with Jay-Z and Beyonce? It was actually quite a muted Super Bowl ad slate for the tech industry with one big exception. Tamu bought six Super Bowl ad slots, likely for tens of millions of dollars in order to win back U.S. shoppers. I did not know this, but apparently Temu's U.S. observed sales.

fell 12.5% month over month in December and 4.8% in January. So they're trying to win Americans back, quoting Bloomberg. The number of Americans shopping on Temu is also falling according to the second-measured data, while a late January survey from Morgan Stanley found nearly a third of its users planned to shop less on the app over the next three months. Only eBay and Etsy had weaker outlooks. The waning revenue and user figure raises questions around whether Temu's explosive U.S. growth may be cresting long before it presents any real threat to juggernauts like Amazon, which gained market share in December as shoppers prioritized speedy deliveries over Temu's low prices but slow shipments. Still, many analysts are looking past the waning sales. Temu shifted marketing spending to other countries toward the end of 2023. Sky Kanavis, senior analysts at Insider Intelligence said in an

interview, their traffic and ad sales are still very dependent on the marketing and advertising budget, she said, end quote. Temu's January sales were up 805% versus January 2023, according to second measure data, quadruple the growth of second place space X and far above rival Amazon's 1.7%. Shares of Temu's parent company PDD holdings have fallen nearly 10% this year, but its valuation has hovered around that of rival Alibaba Group holding, which has more than three times PDD's sales, end quote. The possible crudification of the web by AI continues apace. websites with seemingly AI-generated obituaries are suddenly littering Google search, sometimes listing living people as deceased and turning private individuals into clickbait.

Quoting the verge, Google has long struggled to contain obituary spam for years' low-effort SEO bait websites have simmered in the background and popped up to the top of search results after an individual dies. The sites then aggressively monetize the content by loading up pages with intrusive ads and profit when searchers click on results. Now the widespread availability of generative AI tools appear to be accelerating the deluge of low-quality fake obituaries. Obituary scraping is a common practice that affects not just celebrities and public figures, but also average private individuals. Funeral homes have been dealing with obituary aggregator sites for at least 15 years, says Courtney Goldmiller,

chief strategy officer at MKJ Marketing, which specializes in marketing funeral services. The sites trawl news articles and local funeral home websites looking for initial death announcement, that have basic details like name, age, and where a service might be held. They then scrape and republish the content at scale using templated formats or increasingly AI tools. Legacy.com is the biggest most established version of aggregators, but countless smaller sketchier websites pop up continuously. Some of these sites contain inaccurate information like the date or location of a memorial service. Others collect orders for flowers or gifts that don't arrive in time, frustrating family and friends and causing headaches for local funeral homes.

Goldmiller says. Aggregation sites regularly outrank the actual funeral homes that have a relationship with grieving families. I think Google is looking at who has the most backlinks, who has the most authority, who has the most traffic, the typical things that their algorithms are looking at. An aggregator is, of course, going to have more of all of that than a local funeral home, Goldmiller says. It's the core of the business for the aggregators, right? They know that Google's search algorithms are on their side, end quote. Nvidia has released an early version of Chat With RTX, an app that lets users run a personal AI chatbot on a PC with an RTX 30 or 40 series GPU and more than 8 gigabytes of V RAM, quoting Venture Beat.

The new offering chat with RTX allows users to harness the power of personalized generative AI directly on their local devices, showcasing the potential of retrieval augmented generation rag, and TensorFlow software. At the same time, it doesn't burn up a lot of data center computing, and it helps with local privacy

so that users don't have to worry about their AI chats. Nvidia said that chat with RTX is more than a mere chatbot. It's a personalized AI companion that users can customize with their own content. By leveraging the capabilities

of local G-Force-powered Windows PCs, users can accelerate their experience and enjoy the benefits of generative AI with unprecedented speed and privacy, the company said. The tool leverages is RAG, Tensor RTLLM software and NVIDIA RTFX acceleration to facilitate quick,

contextually relevant answers based on local datasets. Users can connect the application to local files on their PC, turning them into a dataset for open source large language models like Mistral or Lama 2. Rather than sifting through various files, users can type natural language queries, such as asking about a restaurant recommendation or any personalized information and chat with RTX

will swiftly scan and provide the answer with context. The application supports a variety of files. formats, including text, PDF, doc, doc, X, and XML, making it versatile and user-friendly, end quote. Quoting how to geek. Because chat with RTX runs locally, it produces fast results without sending your personal data to the cloud. The LLM will only scan files or folders that are selected by the user. I should note that other LLMs, including those from Hugging Face and OpenAI, can run locally. Chat with RTS is notable for two reasons, though. It doesn't require any expertise, and it shows the capabilities of

NVIDIA's open source Tensor RTLM reg, which developers can use to build their own AI applications, end quote. And quoting the verge. I've been briefly testing out chat with RTX over the past day, and although the app is a little rough around the edges, I can already see this being a valuable part of data research for journalists or anyone who needs to analyze a collection of documents. Chat with RTX can handle YouTube videos,

so you simply input a URL, and it lets you search transcripts for specific mentions or summarize an entire video. found this ideal for searching through video podcasts, particularly for finding specific mentions and podcasts over the past week amid rumors of Microsoft's new Xbox strategy shift. When it worked properly, I was able to find references and videos within seconds. I also created a data set of FTC versus Microsoft documents for Chat with RTX to analyze. When I was covering the court case last year, it was often overwhelming to search through documents at speed, but chat with RTX helped me query them nearly instantly on my PC. I've also found this useful to scan through PDFs,

and fact-check data. Microsoft's own copilot system doesn't handle PDFs well within Word, but Nvidia's chat with RTX had no problem pulling out all the key information. The responses are near instant as well, with none of the lag you usually see when using cloud-based chat chepti or co-pilot chatbots, end quote. All the early reviews of using this stress that this is probably more of a demo than a fully fledged product. It takes around 30 minutes to install. You have to have Mistral or Lama 2 installed to query the data. And there are tons of reports of bugs and problems getting it to even run. But if you want to experiment with the cutting edge of, well, edge AI, knock yourself out. Finally, today, Microsoft is planning an Xbox business update event

for February 15th, Thursday, I guess, at 12 p.m. PT, Pacific Time, delivered via a podcast hosted by Xbox's Phil Spencer, Sarah Bond, and Matt Booty. As has been rumored for weeks, sources say that Microsoft plans to launch select Xbox games on the PS5 and Nintendo Switch, starting with high-fi rush, pentament, and sea of thieves. And Tom Warren explains why this is such a big deal, quoting the verge. Launching Xbox games on PlayStation or Nintendo Switch is a seismic shift in strategy and not one that Microsoft will have taken lightly. It will give Microsoft more reach for its first-party games and an opportunity to generate more gaming revenue, but it also comes with plenty of risks. Microsoft's overall gaming business just passed Windows in terms of revenue thanks to the

Activision Blizzard acquisition. That giant $68.7 billion acquisition will be weighing on Microsoft's mind, particularly when you consider that Call of Duty is a big multi-platform game that drives key revenue across these platforms and mobile. A slowdown in GamePass subscription growth will also be a part of why Microsoft is even considering more multi-platform games. In May 2022, Microsoft had an ambitious goal of 100 million Xbox GamePass subscribers by 2030. At the time, the service which lets Xbox owners subscribe to a library of games with sitting at 25 million subscribers up from 18 million in 2021. It looked set to continue growing rapidly amid Microsoft's device agnostic focus on consoles, PCs, and cloud gaming. Then Xbox GamePass started to stall.

Starfield and Redfall, which were set to be major Xbox exclusives, got delayed from a 2022 released to 2023, with Starfield missing a key holiday window. It's been more than two years since the 25 million figure was announced alongside the company's Activision Blizzard acquisition, and some analysts estimate Microsoft is only at around 33 million subscribers. If accurate, that's around 33% growth in two years. Microsoft targeted a 73% growth rate for GamePass subscriptions for a single fiscal year that ended in June 2022, but only managed 28%. Microsoft has been looking at other avenues for Xbox Game Pass or gaming revenue growth, particularly on mobile, a key reason behind its Activision Blizzard acquisition. But Apple's surprise new plan to comply with

the European Union's latest tech regulations has left Microsoft and others frustrated. Apple's new policy is a step in the wrong direction, said an Xbox executive in reaction to Apple's proposals last month. Spencer had previously described the Xbox Mobile Store and the EU's Digital Markets Act as, quote, a huge opportunity for Microsoft. All this means that adding a bunch of games to the Switch and PS5 won't necessarily help Microsoft's imbigening ambitions for the Xbox. That's why I suspect Microsoft might need to tease more of its future hardware vision. While Xbox executives reassured employees that Xbox hardware would continue, they didn't directly address the elephant in the room. Those persistent

rumors about Xbox exclusives coming to the Nintendo Switch and PS5. Even rumors of the move rattled Xbox fans with fears that Microsoft may eventually scrap Xbox console hardware, render digital Xbox libraries useless and just publish games on rival platforms. But after 20-plus years of Xbox hardware, it seems inconceivable that Microsoft would suddenly walk away from the device ecosystem that drives its Xbox platform and revenues. Instead, I suspect Microsoft will have a vision that distracts from some select Xbox games heading to rival platforms. There are whispers of an Xbox handheld with Windows Central's Jez Corden claiming earlier

this month that, quote, Xbox literally greenlit. several new hardware projects in the past couple of weeks. Regardless, without some public commitment to future hardware, Microsoft could have a problem. By gradually opening up Xbox games to Nintendo Switch and PS5, this also opens up questions over how many games will be multi-platform in the future. If you can play Xbox games anywhere, including PC, the cloud, the Nintendo Switch, and the PS5, then why would you want an Xbox? That's the big question that Microsoft needs to answer on Thursday, end quote.

This is one of those periodic times when I ask for a bit of a bit of the same. of help from this incredibly knowledgeable podcast audience. This time the call goes out to anyone who knows how to use Adobe Premiere Pro better than I do. I simply need one video element of one video to have a transparent background, and I spent all weekend trying to figure out how to do it to no avail. So if anyone thinks, oh, I know how to do that in about five seconds, please hit me up at Brian at Techmeme.com and we'll set up a Zoom call so I can share my screen and you can tell me what to do. Hopefully it'll take all of ten minutes or less and either I'll pay you or plug whatever you want on the show. Thanks in advance. Talk to you

tomorrow.