Tech Brew Ride Home - Tue. 07/23 – Wiz Turns Down The Money

Episode Date: July 23, 2024

I try to get my head around the whole Google and third-party cookies thing. Wiz turns down Google’s big money acquisition offer. Spot ether ETFs can begin trading. And why weather prediction might be the first big scientific breakthrough of this AI era. Links: After years of uncertainty, Google says it won’t be ‘deprecating third-party cookies’ in Chrome (Digiday) Wiz walks away from $23 billion deal with Google, will pursue IPO (CNBC) This ‘Google TV Streamer’ set-top box is what comes after Chromecast [Gallery] (9to5Google) Spot Ethereum ETFs get final sign off to begin trading Tuesday (The Block) Delta CEO sees flight disruptions lasting for another couple of days (Reuters) Alexa Is in Millions of Households—and Amazon Is Losing Billions (WSJ) AI helps to produce breakthrough in weather and climate forecasting (Financial Times) 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 TechMean bride home for Tuesday, July 23rd, 2024. I'm Brian McCullough today. I try to get my head around the whole Google and third-party cookies thing. Whiz turns down Google's big money acquisition offer. Spot Ether ETFs can begin trading and why weather prediction might be the first big scientific breakthrough of this AI era. Here's what you miss today in the world of tech. This is one of those long-running sagas that I don't quite know what to make of, really. Google now says it won't be deprecurcation. third-party cookies in Chrome, and will instead keep working on, quote, privacy-preserving alternatives via privacy sandbox APIs, quoting Digidae. After much back and forth, Google has

decided to keep third-party cookies in its Chrome browser. Turns out all the fuss over the years wasn't in vain after all. The ad industry's cries have finally been heard. Google executives are already discussing this pivot with regulators, including the UK's competition and markets authority and information commissioner's office and plan to do the same with the industry soon. For now, details on what actually means remain light. And as for a timeline, Google seems to have learned its lesson from the numerous delays to its cookie-killing plans. There isn't one. As this moves forward, it remains important for developers to have privacy-preserving alternatives. Anthony Chavez, VP of the Privacy Sandbox said in a blog post,

will continue to make the Privacy Sandbox APIs available and invest in them to further improve privacy and utility, end quote. For those who have poured time and effort into third-party cookie alternatives, fear not. Google will keep the APIs in the sandbox. Your work isn't going to waste. In fact, the plan is to continue to invest in them, continue Chavez to further improve privacy and utility. Plus, additional privacy controls like the recently announced IP protection in Chrome's incognito mode will be added to the sandbox. Or to put it another way, the sandbox isn't going anywhere anytime soon. This could be a blessing in disguise, especially if Google's plan gets Chrome users to opt out of third-party cookies. Since it's all about giving people a choice,

if a bunch of users decide cookies aren't for them, the APIs in the sandbox might actually work for targeting them without cookies. The emphasis on here is could, given all the technical hiccups the sandbox has right now. But if this does pan out, it wouldn't be too different from what Apple did with mobile identifiers three years ago. Back then, it launched a privacy safeguard called app tracking transparency, which lets people say yay or nay to sharing their data or identifier for advertisers with apps and sites via a prompt. Then again, Google might throw the industry a curveball. If the whole saga of third-party cookies has taught ad execs anything, it's to expect the unexpected, end quote. Some further takes on this, since again, I can't figure it out, really.

Here's Keith Petrie on X. This is insane because by Google's own accord, they met the CMA requirements. Early testing from ad tech companies, including Google, has indicated that the privacy sandbox APIs have the potential to achieve these outcomes, and we expect that overall performance using privacy, end quote. Here's Nicholas Griffin on Twitter. Good. Their solution was bad overall and was a complete land grab, and in reality, just made ads much, much worse.

In the long term, this could have most certainly ended up with Google sneaking in advantages for their own products with a bunch of lawyers backing them up. Here's Mike Isaac on Twitter. Story got no attention outside in mainstream press, but Google killing cookies by saying they aren't killing them, but potentially making them opt-in is pretty incredible as a win-win for Google, and run around EU while forcing advertisers to pay for Google's internal tools. And finally, here's Boxes Aaron Levy. Every time I tried to understand how the web was supposed to work after this, I got more confused, end quote.

Israeli cybersecurity startup WIS has reportedly walked away from Google's $23 billion acquisition offer. CEO Asaf Rappaport has apparently told staff that WIS will pursue an IPO as originally planned, quoting CNBC. Saying no to such humbling offers is tough. Wiz co-founder Asaf Rappaport wrote in a memo obtained by CNBC to the company's employees, a person familiar with WIS's thinking, cited antitrust, and investor concerns as part of the reason for abandoning a potential deal. Rappaport wrote that the company would focus on its next milestones, an initial public offering, and $1 billion in annual recurring revenue. The company had been eyeing both targets well before the talks with Google had been reported.

The deal would have nearly doubled the $12 billion valuation of the startup from its most recent round of funding. Wizz was founded in 2020 and has grown rapidly under Rappaport, who had been targeting an IPO as recently as May. The company hit $100 million in annual recurring revenue after 18 months and reached $350 million last year. Wizz's cloud security products include prevention, active detection and response, a portfolio that's appealed to large firms and would have helped Google compete with Microsoft, which also sells security software. Alphabet's cloud segment has faced increased competition from frontrunners Microsoft and Amazon, the cloud unit reached profitability in 2023 after years of hefty investment. While Google Cloud has seen consistent growth in recent years, the unit led by CEO Thomas Curian is under pressure

to continue growing in efforts to capture business during the AI boom. Soon after Wizz's launch came the COVID pandemic, companies rushed to adopt cloud-based software and infrastructure to help employees work remotely. The shift benefited WIS, which can flag security issues for applications and data on the Amazon, Google, Microsoft, and Oracle Public Clouds, end quote. One more Google story for you real quick. Leaked images reportedly show an upcoming Google TV streamer, a new set-top box with a pill-shaped design to replace the dongle form factor and an updated remote.

Quoting 9 to 5 Google. As seen in images shared with 9 to 5 Google, Google is aiming for a set-top design that has a slanted pill-shaped surface. It's rather wide compared to other streaming boxes and unclear if it serves any functional purpose. For example, this would be great for ultra-wideband-powered tap-to-cast

that was announced for the pixel tablet earlier this year. This is joined by a pill-shaped base with the entire thing vaguely looking like a miniature pixel tablet charging speaker dock. Two cables, presumably power and HDMI, protrude from the back. Overall, it should have a minimal height presence underneath your television. Meanwhile, the remote looks similar, but is longer. After the D-pad, you have back-and-home buttons on the first row. The voice input key is no longer Google Assistant branded with a generic microphone used instead

in a sign of the Times. It has a raised bump since the splash of color is used for the home key. The volume rocker has been moved to the face of the remote instead of on the right edge, while you now get a mute button to shortcuts for YouTube and Netflix, as well as power and and magic slash star shortcut, round things out. With this drastically different design, we're also getting a new name. The Google TV streamer keeps the Google TV branding but drops Chromecast in a surprising turn for the legacy moniker. It remains to be seen whether the company will keep selling the Chromecast with Google TV HD, though it does follow Googlecast, replacing the Chromecast built-in brand earlier this year, end quote.

The U.S. SEC has approved some spot ether ETFs, including from 21 shares, Bitwise, BlackRock, and Fidelity, with trading for at least some of them slated to begin today, quoting the block. Firms looking to launch their spot Ethereum ETFs received the U.S. Securities and Exchange Commission's approval of 19B-4 forms in May. However, they still needed their registration statements to go effective before launching. The approvals were unexpected because there had. had been a lack of engagement between the SEC and issuers. In the week leading up to the deadlines, however, the agency seemingly had a change of heart and began letting exchanges know they would approve of the Ethereum ETFs that week. Cynthia Lopez-Set, head of digital asset management

at Fidelity, said the firm's Spot Ethereum ETF will allow investors to gain exposure to ether through, quote, thoughtful index and product design supported by a dedicated operations and trading team and industry-leading security. Spot Bitcoin ETFs were approved earlier this year and have since brought in billions of dollars. Ethereum ETFs may attract lower demand than Bitcoin ETFs and may get 10 to 15 percent of the assets that Bitcoin products received, said senior Bloomberg ETF analyst Eric Balchanos in an interview with the Block in May. That would put them at like $5 to $8 billion, which again, for any normal launch in the first couple of years, that's pretty good, he said. Nate Gersey, president of the ETF store, said at an event on X hosted by the

block on Monday that the current spot ether market is less than a third of the size of the Bitcoin market. In my mind, that's a reasonable proxy for what to expect from spot ether ETFs. Grotchi added, I think we'll see about a third of the demand of what we've seen from spot Bitcoin ETFs, end quote. Just wanted to note that this is still going on, quoting Reuters, Delta Airlines on Monday said it will take the U.S. carrier another couple of days before its operations recover from a global cyber outage that snarled flights around the world. The Atlanta-based carrier has been hit hard by the outage. It has canceled over 4,000 flights since Friday, straining thousands of customers across the

country. By contrast, disruptions at other major U.S. carriers had largely subsided. On Monday, Delta had canceled over 800 flights were about 21% of the scheduled total as of 3.30 p.m., according to data from Flight Aware. It accounted for about half the total flight cancellations. In a video message to employees on Monday. CEO Bastion and Chief Information Officer Samant provided an update on the situation. Bastion said the company is working around the clock to get its operation back on track, but it will take another couple of days before the worst is over. Today will be a better day than yesterday, and hopefully Tuesday and Wednesday will be that much better again, he said. About 60% of most critical applications that Delta uses are Microsoft Windows-based and were

rendered inoperable early on Friday following CrowdStrike's Fulty Windows Update, the airline said. Delta's IT teams required to manually repair and reboot each of the affected systems with additional time needed for applications to synchronize and start communicating with each other again, end quote. This isn't quite reality labs, but sources say Amazon has lost more than $25 billion on its devices business between 2017 and 2021, and its plan to sell hardware at lower price and make money elsewhere hasn't worked out like it had hoped. Meanwhile, of course, Reality Labs has lost meta, $45 billion or so just since 2020, quoting the journal. Echo speakers are the type of business success companies don't want, a widely purchased product

that is also a giant money loser. Chief Executive Andy Jassy is trying to plug that hole and move away from the Amazon accounting tactic that helped create it. When Amazon launched the Echo Smart Home devices with its Alexa voice assistant in 2014, it pulled a page from Shaving Giant Gillette's classic playbook, sell the razors for a pittance in the hope of making heaps of money on purchases of the refill blades. A decade later, the payoff for Echo hasn't arrived. While hundreds of millions of customers have Alexa enabled devices, the idea that people would spend meaningful amounts of money to buy goods on Amazon by talking to the iconic voice

assistant on the underpriced speakers didn't take off. Customers actually used Echo mostly for free apps, such as setting alarms and checking the weather. We've worried we've hired 10,000 people, and we've built a smart timer, said a former senior employee. As a result, Amazon has lost tens of billions of dollars on its devices business, which includes Echoes and other products such as Kindles, Fire TV sticks, and video doorbells, according to internal documents and people familiar with the business. Between 2017 and 2021, Amazon had more than 25 billion in losses from its devices business, according to the documents. The losses for the years before and after that period couldn't be determined. As Jassy tries to fix it, he is

rethinking the obscure Bezos-era metric inside Amazon that helps explain why Echo and other devices could accrue such huge losses for so long with little repercussion. Called Downstream Impact or DSI, it assigns a financial value to a product or a service based on how customers spend within Amazon's ecosystem after they buy it. Downstream Impact has been used across Amazon business lines from its prime membership program to its video offerings and music.

The metric was developed in 2011 by a team of economists including an eventual Nobel Prize winner. In some instances, the model worked clearly when customers buy Amazon's Kindle E-reader, one of Amazon's profitable devices, they are very likely to then buy e-books to read on that device. E-books are part of the books business, not the device's business, but Amazon leaders said it made sense for the Kindle team to claim part of that revenue when assessing their product's internal value. Similarly, some revenue from advertisements displayed on Fire TV streaming devices is also claimed as

fire TV revenue. Some Amazon devices can count on direct revenue, such as by selling user subscriptions attached to the product. More than half of customers who buy smart camera doorbells from Ring, another profitable Amazon device that the company bought in 2018, purchase security subscriptions. In other cases, especially echo devices, the downstream impact idea broke down, said the people familiar with the device's business. Unlike the revenue, operating profit, and other financial metrics, Amazon, and other companies report publicly, downstream impact is an estimate used internally and not a particularly scientific or precise one, end quote. Finally, today I've seen a few articles suggesting this, so let's unscientifically call it,

You know what AI's biggest win so far in this new AI era might be? Weather prediction, quoting the Financial Times. Artificial intelligence has helped to make a breakthrough in accurate long-range weather and climate predictions, according to research that promises advances in both forecasting and the wider use of machine learning. Using a hybrid of machine learning and existing forecasting tools, a model led by Google called Neural GCM successfully harnessed AI to conventional atmospheric physics, to track decades-long climate trends and extreme weather events such as cyclones, a team of scientists found.

This combination of machine learning with established techniques could provide a template for refining the use of AI in other fields, from materials discovery to engineering design, the researchers suggest. Neural GCM was much faster than traditional weather and climate forecasting and better than AI-only models at longer-term predictions, they said. Neural GCM shows that when we combine AI with physics-based models, we can dramatically improve the accuracy and speed of atmospheric climate simulations, said Stephen Hoyer, senior staff engineer at Google Research, and a co-author of a paper on the work published in nature. The paper said Neural GSM proved faster, more accurate, and used less computing power in tests against a current forecasting model based on atmospheric physics tools called X-Shield, which is being developed by an arm of the

U.S. National Oceanic and Atmospheric Administration. In one trial, Neural GSM identified almost the same number of tropical cyclones as conventional extreme weather trackers did, and twice the number of X-Shield. In another test based on temperature and humidity levels during 2020, the error rate was between 15 and 50% less. NeuroGCM's calculations were able to generate 70,000 simulation days in 24 hours using one of Google's customized AI tensor processing units, the paper says. By contrasts for comparable calculations, X-Shield generated only 19 simulation days and needed 13,824 computer units to do it, end quote. As I'm finishing up editing here,

I can see that Mark Zuckerberg has announced the newest versions of Lama, so I'll get to that tomorrow. Talk to you then.