Tech Brew Ride Home - Tue. 04/08 – It’s Already Starting…

Starting point is 00:00:00 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 TechMeBrand Home for Tuesday, April 8th, 2025. I'm Brian McCullet today. Uh-oh, it looks like the tech price hikes are already starting.

Starting point is 00:00:43 People are accusing meta of doing some weird things with those latest AI models. Shopify tells workers that they need to embrace AI for everything, is AI killing web traffic, and how AI is being used to automatically create sequels for books. Here's what you miss today in the world of tech. Well, Mayaculpah, because it's happening faster than I was led to. believe. Framework, the seller of those modular framework series of laptops, is pausing sales of its six lowest-priced laptops in the U.S. saying the models would sell at a loss due to the 10% tariff that went into effect on April 5th, quoting Ars Technica. The affected models will be removed

Starting point is 00:01:26 from Frameworks Online Store for now, and there's no word on when buyers can expect them to come back. We priced our laptops when tariffs on imports from Taiwan were 0% the company responded to a post asking why it was pausing sales at a 10% tariff, we would have to sell the lowest end skews at a loss. Other consumer goods makers have performed the same calculations and taken the same actions, though most have not been open about it, Framework said. Nintendo also paused U.S. orders for its upcoming Switch 2 console last week after the tariffs were announced. For right now, Framework Sales Pause affects at least two specific laptop configurations. As of April 1st, Framework was selling pre-built versions of those laptops for $999 and $8.99, respectively.

Starting point is 00:02:05 Without those options, the cheapest versions of those laptops start at 1,39 and 1499. There's no word on whether those configurations will come back at a higher price or if they're gone for good. Pre-orders for the upcoming Risen AI version of the Framework Laptop 13 still start at $1,09. We will continue to provide updates when we have them reads the company statement. Framework had no additional information to share when contacted for comment about timing or whether other products would be affected. We will continue to provide updates as we have them reads the company's statement, end quote. Sources also say that Micron has told U.S. customers that it plans to impose a surcharge

Starting point is 00:02:42 on some products like SSDs from April 9th to account for President Trump's tariffs, quoting Reuters. The company notified its customers in a letter that while Trump's announcement last week exempted semiconductors, which account for part of Micron's portfolio, the tariffs applied to memory modules and solid state drives or SSDs, the sources said. Those products used to store data in various products from cars to laptops and data center servers would now be subject to a surcharge, they said. Micron's overseas manufacturing sites are largely based in Asia, including China, Taiwan, Japan, Malaysia, and Singapore. An executive ad in Asian NAND module manufacturers said they were taking a similar approach to Micron to tell

Starting point is 00:03:18 U.S. customers they had to figure out the tariffs themselves. If they don't want to bear the taxes, we cannot ship the products, the person said declining to be named as they were not permitted to speak to the media. With this kind of tax rate, no company can generously say, I'll take on the burden, end quote. Sources say Apple plans to send more iPhones to the U.S. from India to offset the China tariffs, but the situation is too uncertain to upend other supply chain investments for now, quoting the journal. Before tariffs were announced, Apple was on pace to make about 25 million iPhones in India this year,

Starting point is 00:03:51 said Bank of America analysts Wazmi Mohan. Normally around 10 million of those would supply the local Indian market. If Apple were to redirect all India-made iPhones to the U.S., it could meet about 50% of American demand for the device this year, he said. Apple has been working to increase its India iPhone production for years. The tariff on Chinese goods could add about $300 to the current $550 hardware costs to Apple of an iPhone 16 Pro that currently retails for $1,100, according to Tech Insights. Apple could limit the damage by importing phones from India where the tariff is about half as high.

Starting point is 00:04:24 Vietnam, which has become a hub for making AirPods, the Apple Watch and iPads, received a tariff of 46. percent under Trump's plan nearly as high as China's. But Trump suggested in a social media post Friday, after speaking to Vietnam's leader, that he might offer a better deal, end quote. And I've noticed this next bit myself. Non-tech folks in my life are suddenly asking me if they should upgrade their computers now and how to future-proof them for several years, if necessary. Looks like I'm not alone. Apple store employees say the past few days have felt like the busy holiday season as the threat of tariffs and potential price hikes sparked a shopping frenzy. quoting Bloomberg. One employee said their store was slammed with people panic buying phones.

Starting point is 00:05:05 Almost every customer asked me if prices were going to go up soon, said the worker who asked not to be identified because they weren't authorized to speak publicly. Though stores didn't necessarily see the kind of lines that come with an iPhone launch, the atmosphere was like the busy holiday season employees said. People are just rushing in and worried and asking questions, one said, adding that the company hasn't provided guidance to stores on how to handle such inquiries. The frenzy has translated to more purchases. Apple's U.S. retail stores saw higher sales over this past weekend than in prior years in at least some major markets, according to a person with knowledge of the matter. And Apple spokesperson declined to comment, end quote. Some weird doings in AI land. L.M. Arena says

Starting point is 00:05:50 it is updating its leaderboard policies after a Lama 4 Maverick version, which Meta said in fine print is not public, secured the number two spot on the charts. Quoting the verge, the new Maverick model quickly secured the number two spot on LM Arena, the AI benchmark site where humans compare outputs from different systems and vote on the best one. In Mehta's press release, the company highlighted Maverick's ELO score of 1417, which placed it above opening eyes for O and just under Gemini 2.5 Pro. A higher ELO score means the model wins more often in the arena when going head-to-head with competitors. The achievement seemed to position META's open-weight Lama 4 as a serious challenger to the state-of-the-art, closed models from OpenAI, Anthropic, and Google.

Starting point is 00:06:35 Then AI researchers digging through Meta's documentation discovered something unusual. In fine print, Meta acknowledges that the version of Maverick tested on LM Arena isn't the same as what's available to the public. According to Meta's own materials, it deployed an experimental chat version of Maverick to LM Arena that was specifically, quote, optimized for conversationality, TechCrunch first reported. While what Meta did with Maverick isn't explicitly against LM Arena's rules, the site has shared concerns about gaming the system and taken steps to, quote, prevent overfitting and benchmark leakage. When companies can submit specifically tuned versions of their models for testing while

Starting point is 00:07:12 releasing different versions of the public, benchmark rankings like LM Arena become less meaningful as indicators of real-world performance. Shortly after META release Maverick and Scout, the AI community started talking about a rumor that meta had also trained its Lama4 models to perform better on benchmarks while hiding their real limitations. VP of Generative AI at Meta, Ahmad Al-Dale addressed the accusations in a post on X. We've also heard claims that we trained on test sets. That's simply not true, and we would never do that. Our best understanding is that the variable quality people are seeing is due to needing to stabilize implementations, end quote. Some also noticed that Lama 4 was released at an odd time.

Starting point is 00:07:52 Saturday doesn't tend to be when big AI news drops. After someone on threads asked why Lama 4 was released over the weekend. Meta CEO Mark Zuckerberg replied, that's when it was ready. It's a very confusing release generally, says Simon Willison, who closely follows and documents AI models. The model score that we got there is completely worthless to me. I can't even use the model that they got a high score on, end quote. In a memo, Shopify CEO Toby Lukie told workers that using AI is now a fundamental expectation and that teams asking for more resources must first show why AI can't do the job. Instead, said, quoting CNBC, what would this area look like if autonomous AI agents were already part of the team?

Starting point is 00:08:39 Lutki wrote in the memo, which was sent to employees last month. This question can lead to really fun discussions and projects, end quote. Lutki also said there's a fundamental expectation across Shopify that employees embrace AI in their daily work, saying it has been a multiplier of productivity for those who have used it. I've seen many of these people approach implausible tasks, ones we wouldn't even have chosen to tackle before, with reflexive and brilliant usage of AI to get 100x the work done, Lukey wrote. The company which sells web-based software that helps online retailers manage sales and run their operations will factor AI usage into performance reviews, he added. Shopify's total headcount fell to 8100 at the end of December from 8300 a year earlier,

Starting point is 00:09:22 according to its latest annual filing. The Canadian company eliminated 14% of its workforce in 22 and 20% the following year. At an investor event last month hosted by Morgan Stanley, Shopify CFO, Jeff Hofmeister said the company can keep headcount relatively flat, though employee-related costs could vary due to salary differences. He noted that a higher comp, high-end AI engineer can lift compensation costs, even if headcount is staying the same, end quote. Publishers say website site traffic has plummeted since Google rolled out AI overviews. sources say Google acknowledged the drop in an October 2024 publisher meeting, quoting Bloomberg. In March 2024, website owner Morgan McBride was posing for photos in her half-renovated kitchen

Starting point is 00:10:14 for a Google ad, celebrating the ways the search giant had helped her family's business grow. But by the time the ad ran about a month later, traffic from Google had fallen more than 70 percent, McBride said. Charleston Crafted, which features guides on do-it-yourself home improvement projects, had weathered algorithm changes and updates in the past. This time it didn't recover. McBride suspected people were getting more of their renovation advice from the artificial intelligence answers at the top of Google search. The now ubiquitous AI-generated answers in the way Google has changed its search algorithm to support them have caused traffic to independent websites to plummet, according to Bloomberg

Starting point is 00:10:48 interviews with 25 publishers and people who work with them. That's disrupting a delicate, symbiotic relationship that's existed for years. If businesses create good content, Google sends them traffic. Many of the publishers said they have to either shut down or reinvent their distribution strategy a cycle experts say could eventually degrade the quality of information Google can access for its search results and to feed its AI answers, which have still at times contained inaccuracies that have made them a poor substitute for publishers' content. For home renovation questions, Google's AI may give advice that's unsafe or simply inaccurate, such as recommending specific products that don't exist, McBride said. Google denied that the rollout of AI over

Starting point is 00:11:27 reviews had harmed websites traffic, saying it was misleading to make generalizations about the causes of declining traffic based on individual examples. A spokesperson added that traffic can fluctuate for a number of reasons, including seasonal demand, users' interests, and regular algorithmic updates to search. But the traffic drops have been widely felt across the web and have spanned topics, fashion and lifestyle, travel, DIY, and home design, and cooking, according to Bloomberg's interviews and data from web analytics firm, similar web, which analyzed traffic to a sampling of small to mid-sized websites in each of these categories over the past two years. It's possible that AI overviews were a factor, said similar web, which carried out the research in Bloomberg's request.

Starting point is 00:12:07 Behind closed doors, the company has acknowledged the toll on publishers, even inviting a group of about 20 website creators to its Mountain View, California headquarters for conversations with employees in the search division last October. Google representatives apologized to the web creators and said their sites represented exactly the kind of helpful content that the company wanted to surface in search, according to creators who were in attendance. But Googlers also said they couldn't give any guarantees that their websites would recover because the search product had fundamentally changed in the AI era, multiple attendees said. Some creators say Google has recently made so many changes to search coinciding with its testing of AI-powered features and an effort to rid its

Starting point is 00:12:44 results of AI-generated spam, that it has choked traffic to independent websites in favor of forums like Reddit and Quora, as well as larger media brands. I don't understand how Google thinks this is sustainable, said Jake Bowley, founder of the That Fit Friend, which reviews training shoes. If you drive away all enthusiasts and small publishers, then we're going to be overrun by spam and the few players who can afford to pay to play, end quote. And finally today, say hello to Incit, a publishing platform that uses AI to create sequels and spinoffs of author's original work with minimal human input, thereby raising quality concerns. Quoting Bloomberg Business Week,

Starting point is 00:13:28 Manjari Sharma started publishing installments of her novel on Watpad's free platform, titling it Fat Keeley. After it was done, seven months later, she also put it on another free platform called Incit, based in Berlin. In both places, the novel attracted lots of readers and rapturous comments. Punctuation be damned! I absolutely love this story. Before long, Inkett was proposing that she moved the novel from its free platform to its premium subscription-based platform, Galatee, where Sharma would receive a share of sales. She agreed, and her novel renamed Keely took off again. In early 2024, she learned Inkitt wanted to turn it into a series. This time there was a catch. Sharma recalls being told that she was welcome to write the next books if she could get them done within a few weeks.

Starting point is 00:14:12 Otherwise, Inkett would hire a ghostwriter to do it, though her name would still be on the cover and she'd still get royalty payments. Sharma had no real choice. Her contract with Incit gave it the right to do just about anything it wanted with Keely, including coming up with sequels. Plus, her life had gotten busy in the years since she first drafted the novel. She'd gotten a master's degree in mathematics and started an internship in artificial intelligence at the Royal Bank of Scotland. She accepted the ghostwriting offer. The second and third books came out on Gallatin, in close succession a few years after the first. This time, some readers were underwhelmed. IMO, it is poorly written, has a different vibe completely and just doesn't go in any direction that I would have expected, one person commented.

Starting point is 00:14:50 For Incit, this was a manifestation of its vision, a decade in the making to use technology to discover unknown authors and turn their creative output into revenue. The platform began in the mid-2010s as a friendly place for anyone to share their writing. Over the years, though, its ambitions expanded as it bet that technology could help it extract significant value from a catchy narrative premise, especially with the advent of AI technologies that could generate text and images. On the company's free platform, Incit, amateur writers still share their stories, lots of romance, often spiced with werewolves, vampires, or, billionaires. The company offers to publish the most successful stories on Gallatee, which costs $69.99 for an annual subscription. From there, Inc. It can create sequels and spin-offs while also adapting stories for other formats such as Gallatee TV, also $69.99 a year, with or without the author's

Starting point is 00:15:36 involvement. For some popular novels, including the Keely series, it also produces print editions. Writers receive a small share of the revenue attributed to their stories. For most, it's well below what they'd make with a traditional publisher. But then, finding a traditional publisher, requires connections that Incott authors tend not to have. Charma understood that Incit chose titles for Gallatee by relying on in-house software that tracked readership metrics. What she didn't fully grasp when Incett began serializing Keely was that its employees were using large language models, AI technologies trained on human-authored text and capable of generating their own in the writing and editing process. Since then, AI has only become more prominent at Inc. To the point that staff

Starting point is 00:16:15 is heavily using AI to iterate on the stories, Chief Executive Officer Ali Al-Bazazz, said, in an interview. Inc. It relies on AI for tasks such as copy editing manuscripts and suggesting plot developments, as well as producing translations, audiobook narration, and covers. Freelancers hired to edit and ghostwrite novels also aren't barred from using LLMs for their text. All of that allows Incet to employ remarkably few editorial employees whom it prefers to call content employees. Galatee's catalog of titles from some 400 authors is overseen by just one head of editorial and five story intelligence analysts plus the stable of freelancers. Even some traditional players are cautiously opening up to AI.

Starting point is 00:16:53 Holtzbrink Publishing Group has funded an AI startup called Chapter. The world's biggest and second biggest consumer publishers, Penguin Random House and HarperCollins publishers, have made internal versions of ChatGBT, available to their employees for brainstorming and other purposes, though neither company has used it to produce or edit text and books. While Penguin Random House doesn't allow AI companies to use its author's books to train their models, Harper Collins struck a deal last year with an unnamed technology company to provide texts for that purpose, if the authors give permission and receive compensation.

Starting point is 00:17:21 Harper Collins' CEO Brian Murray has also mused about the prospect of a talking book that would let readers converse with the AI-driven replica of an author. For even these tentative explorations, the publishers have been widely lambasted by authors, including some they've published, end quote. Nothing more for you today. Talk to you tomorrow.

Tech Brew Ride Home - Tue. 04/08 – It’s Already Starting…

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