Tech Brew Ride Home - Tue. 10/01 – Uber Profitable

Episode Date: August 1, 2023

Uber reports meaningful, not gimmicky profitability for the first time ever. Meta’s gonna give you AI chatbots with personality. Google is overhauling Assistant with AI stuff. Even Pierson is getting ahead of the whole, let AI tutor you on stuff, stuff. Nintendo is probably giving us a new console next year. And the prisoner’s dilemma that is fueling quantum computing development, but heck, let’s be honest, fueling AI development as well. Links: Uber Delivers First-Ever Operating Profit in Drive to Curb Losses (WSJ) Meta prepares chatbots with personas to try to retain users (FT) Scoop: Google Assistant to get an AI makeover (Axios) Amazon wants Alexa to bring AI into the home (Axios) Pearson Offers New AI Study Tools in Time for Back-to-School (Bloomberg) Sources: Nintendo targets 2024 with next-gen console (VCG) Quantum Tech Will Transform National Security. It’s Testing U.S. Alliances Now. (NYTimes) 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 TechMeme right home for Tuesday, August 1st, 2020. I'm Brian McCullough today. Uber reports meaningful, not gimmicky profitability for the first time ever. Meta's going to give you AI chatbots with personality. Google is overhauling assistant with AI stuff. Even Pearson is getting ahead of the whole let AI tutor you on stuff stuff. Nintendo is probably giving us a new console next year and the prisoner's dilemma that is fueling quantum computing development. But heck, let's be honest, fueling AI development as well. Here's what you missed today. in the world of tech. It is worth noting the stuff when notable things like this happen.

Uber's profitable. Uber reported Q2 revenue up 14% year-over-year to $9.23 billion. Gross bookings were up 16% year-over-year to $33.6 billion. And they reported a $394 million net income number up from a $2.6 billion loss in Q2 of 2022. So Uber's first profit in history. quoting the journal. The results for the three months through June were driven by solid growth in both of Uber's core businesses, as the number of rides in the U.S. and Canada surpassed pre-pandemic levels for the first time and demand for delivery stayed strong despite restaurant reopenings. The quarter was the first since Uber's 2009 founding that it reported its underlying operations were profitable. The operating performance helped lift Uber to a net profit in the quarter. Uber has posted a net profit before, but on the back of investment gains that outweighed losses in its operations. Other details from the earnings report, Uber's freight division, which transports goods for companies and typically accounts for under a quarter of revenue didn't do as well. Bookings and revenue in the unit slid by 30% during the quarter.

Uber expanded advertising on its app, reaching a run rate of $650 million during the quarter. It reigned in costs by becoming more disciplined about spending on discounts to consumers and incentives to drivers. It said it has become better at combining deliveries and reducing errors, which improved its operational efficiency. Uber has cut hundreds of jobs this year, largely in human resources, freight, and overseas food delivery operations. The cuts, collectively accounting for less than 3% of staff, haven't been as dramatic as those of many of its tech peers, though the company was more aggressive about layoffs in 2020 during the initial months of the pandemic, end quote. Sources are telling the FT that meta plans to launch a range of AI chatbots dubbed personas that exhibit personalities, and they plan to do this as soon as September in order to boost engagement on its various

existing apps. The tech giant led by Chief Executive Mark Zuckerberg has been designing prototypes for chatbots that can have human-like discussions with its nearly 4 billion users, according to three people with knowledge of the plans. These people said some of the chatbots, which staffers have dubbed personas, take the form of different characters. The company has explored launching one that speaks like Abraham Lincoln and another that advises on travel options in the style of a surfer, according to a person with knowledge of the

plans. The chatbots could launch as soon as September, the person said. Their purpose will be to provide a new search function and offer recommendations as well as being a fun product for people to play with. On top of boosting engagement, chatbots could collect vast new amounts of data on users' interests, said experts that could help meta better target users with more relevant content and adverts. Most of META's $117 billion a year in revenues comes from advertising. Once users interact with a chatbot, it really exposes much more of their data to the company so that the company can do anything they want with that data, said Ravit Doton, an AI ethics advisor and co-founder of the Collaborative AI Responsibility Lab at the University of Pittsburgh. The developments raise concerns

around privacy as well as potential, quote, manipulation and nudging, she added, end quote. According to an internal email seen by Axios, Google, is revamping Google Assistant to focus on using what else generative AI more, starting with the mobile version of Assistant, and it is reorganizing related teams in order to make this happen. Quote, the move will change how Assistant works for consumers, developers, and Google's own employees with the company for now, supporting both new and old approaches. The move will involve eliminating dozens of jobs, Axios is told, out of the thousands of employees who work on, the assistant. Other companies including Amazon are making similar moves. The Commerce Giant is working on an AI-powered reboot for Alexa, its longtime digital assistant, end quote. Indeed, I think this slipped through the cracks. Here's Axios from a different piece, I believe, from last week, talking about the Alexa angle, quote. The first visible signs of this effort are expected to turn up

when Amazon announces new devices at a September 20th event at its HQ two offices in Arlington, Virginia. However, more complete integrations will take until next year and beyond. Generative AI is something we've been working on for a while, and it has huge potential, especially in the home. Amazon Senior Vice President of Devices and Services, Dave Limp, told Axios, the opportunity to bring generative AI to customers at that scale is incredibly exciting, but we also need to hold a high bar as we build new features and experiences, end quote. Amazon sees Alexis presence in the home, and its existing ties to a range of other devices as a key advantage over rivals who are mainly focused on apps for computers and phones. Many of Amazon's devices have additional sensors,

such as cameras and microphones that can add context to generative AI queries. Alexa also supports a range of other hardware, including the ERO home network and ring security systems, Amazon cells, as well as a broad range of smart devices made by others. These devices open the door for generative AI queries that not only answer questions but take action. You could imagine, say, being able to tell a voice assistant, I'm going on vacation for a week. Please set my devices to make sure the house is safe, and we aren't using more electricity than necessary, end quote. Amazon's goal is to transform Alexa into an assistant that is more conversational and less transactional in nature, end quote. Something, something, the incumbents aren't just sitting on their hands

waiting for AI startups to eat their lunch. Another example of that here, Pearson apparently plans to launch generative AI study tools for the upcoming academic year, including on a tight schedule feature to summarize key learning points when you're cramming for the test. Quoting Bloomberg, Chief Executive Officer Andy Bird said Pearson is still early on in its generative AI development journey, but said that generative AI is a real long-term positive to the company. Bird said that the tools would not simply provide students with a shortcut to an answer, but further personalize the learning experience by combining AI capability. with the publisher's proprietary intellectual property and datasets. The tools being introduced

include the On a Tight Schedule feature, which uses AI to summarize the key points of learning videos for Time Press students. Chief Product Officer Tony Prentice also highlighted an AI-assisted learning tool designed to help students solve complex problems by generating questions to guide them to a correct answer. The company said that the integration with Pearson's intellectual property will give students the ability to move quickly between an e-text and an AI chatbot, end quote. A bunch of venues were reporting yesterday that Nintendo plans to release a new console in the second half of 2024, with a portable mode, an LCD display, and a cartridge slot. Key partners already have development kits and are already hard at work, apparently.

This is from Video Games Chronicle, quote. Although specific details on the console are being kept closely guarded, those VGC spoke to indicated that the next-gen console would be able to be used in a portable mode, similar to the Nintendo Switch. Two sources VGC spoke to suggested that the console could launch with an LCD screen instead of the more premium OLED in order to bring down costs,

especially considering the increased storage needed for higher fidelity games. The current switch comes with just 32 gigabytes of internal memory, while many current-gen, PlayStation, and Xbox games are over 100 gigabytes. Like its predecessor, the new Nintendo console will also accept physical games via a cartridge slot, the sources said.

Other details such as backwards, compatibility support for Switch games, physical and digital remains unclear. Nintendo has said it wants to convert as many of Switch's 100 million-plus user base as possible to its next system, although some third-party publishers are said to have expressed concern, that legacy support for Switch games could negatively affect sales of next-gen titles. Tokyo-based industry consultant Dr. Serkan Toto told VGC that a 2024 console launch would make sense for Nintendo since it's projected to see double-digit declines in Switch Hardware and Software Sales this year after it cleared seven years in the market. I would generally say that looking at Nintendo's financials, it seems clear that it's time for a new piece of hardware in 2024, he said.

Hardware is already projected to fall 16.5% year-on-year in the current fiscal, while the minus for software is expected to hit 15.9%. The only way to stop these losses from totally ballooning next fiscal is a new device, and the second half of 2024 sounds like, a realistic release window to me. Reed Pops' head of gaming, B2B, Christopher Dring, told VGC that a 2024 release would fit with Nintendo's historical trend of launching hardware mid-cycle compared to PlayStation and Xbox. The original Switch released over three years after PS4 and Xbox 1, which proved to be an effective move for Nintendo. A second half-2020 release for Switch 2 would be nearly four years after PS5 and Xbox

Series X and S, so we would see a similar mid-cycle launch for Nintendo, he said. I'd argue that unlike 2017, Microsoft and Sony's consoles still feel relatively new at the moment, partially due to component shortages during the rollout in the first two years, and software delays, meaning we've not seen too many tiles take full advantage of either PS5 or Xbox Series X. So it's to be seen whether Nintendo will enjoy the same benefit. However, the biggest competitor Nintendo faces is itself. Although its core fans are eager for more hardware, its more family-oriented casual fans will need more convincing.

what will the next Mario Kart offer that they're currently not getting from the current one, for example. Nintendo has struggled to upgrade players in previous generations, so how it approaches things like digital libraries, the Nintendo account, and even backwards compatibility may prove crucial in the next system, getting off to a strong start, end quote. Finally today, the Times has an in-depth look at the global race to develop quantum computing and how that is causing nations to consider things like balancing protectionism, with the spirit of cooperation that the U.S. and its allies have traditionally enjoyed.

Quote, The Australian physicist shook the heavy metal box that resembled a beer cooler but held a quantum sensor. A computer screen showed that the cutting-edge device with lasers manipulating atoms into a sensitive state continued functioning despite the rattling. He and his team had built a hard-to-detect super-accurate navigation system for when satellite GPS networks are jammed or do not work. That was robust and portable enough to be used outside a lab. It could potentially guide military equipment from submarines to spacecraft for months with a minuscule

risk of directional error, a significant improvement over what is available today. The fact that we can do that is probably a wild, insane surprise, said Russell Anderson, the head of quantum sensing at Q Control, a startup that recently signed a deal with Australia's Department of Defense to develop and field test its quantum sensor technology. The global race to develop quantum technologies of all kinds has accelerated as government's poor investment into the industry, and scientists make rapid technical advances. But to maintain an edge over China, which takes a centralized approach to tech development, the United States is considering tougher export controls for quantum. And allies say more limits on top of those already in place

could stifle momentum because of the strength of the American model of tech development comes from its openness, combining pools of public research money with private investment to support scientists from many countries. For the United States and its allies, the challenge is clear how to bow to balance, protectionism, and cooperation in a transformative field where talent is scarce and less concentrated in the United States, making interdependence inevitable and increasingly necessary. The world has changed, and the pace of technology is much faster than it used to be, said John Christensen, a military fellow at the Center for Strategic and International Studies in Washington, who co-authored a recent report on OECUS, the 2021 Security Agreement among the

United States, Britain, and Australia. We can't just rely on America. Americans always having the best stuff, end quote. With its centralized method of funneling billions of dollars to military-affiliated universities, China has produced results that have nearly matched or exceeded the American approach. Some of its claims about quantum breakthroughs and funding pledges have been disputed, but a demonstrable rise in Chinese expertise began a decade ago with surging government investment after the Edward Snowden leak confirmed in 2013 that U.S. and British intelligence agencies had found ways to crack and spy on encrypted. internet traffic. In 2017, China built a 91-acre campus west of Shanghai with the world's largest

national laboratory for quantum science. Since then, Chinese researchers have published thousands of papers demonstrating critical advances, including, in 2021, the use of a space-to-ground quantum communication network linking satellites to a fiber optic cable connecting Shanghai to Beijing. For China, the Snowden Thing had a psychological impact, said Edward Parker, a physicist focused on emerging technologies at the RAND Corporation. There's also some aspect of national pride. They identified this as a very demonstrable quantum technology where they could become the best in the world. According to the Australian Strategic Policy Institute's critical technology tracker, China appears to be lagging more in quantum computers, which perform many calculations in one

pass, making them faster than today's digital computers that perform each calculation separately, while narrowing the gap in quantum sensing for navigation, mapping, and detection. Chinese scientists have even said they are building a quantum-based radar to find stealth aircraft with a small electromagnetic storm, though quantum specialists outside China have questioned their claims. Fearing that its technology will be used to build the economies of larger countries, Australia has been exploring how to keep its own advances secret. Q control scientists in Sydney already cautiously avoid sharing technological information with colleagues in the United States to avoid being subject to the U.S. international traffic and arms regulations, a set of

restrictive safeguards for military technology that is widely seen as a major obstacle to modernizing America's alliances in the region. If American officials go through with their plan to expand export controls for quantum computing, following a pattern that began with advanced microchips information itself, could be considered in export, meaning details could not be shared with people born outside the United States. It's just very complicated if you have to have separate lab facilities with more sensitive things, said Dr. Parker, the ran physicist, many quantum companies in the United States and elsewhere, including Q control, are hoping for sensible, clear guidelines. Australian officials and some American lawmakers are also pushing for an exemption from U.S.

arms regulations, so Australian companies would not be treated as foreign entities. On a recent afternoon in the former locomotive factory where Q control has its offices, Professor Beercook said the next few years will be crucial. If friendly democracies don't build quantum's strengths together, other countries will speed passed with sharper militaries and lucrative opportunities. You better believe that China and any nations allied with China are not going to put restrictions on themselves or their partners, he said. Anytime we overly regulate emerging areas of science, we risk simply stopping progress locally and seeding technological advantage to our adversaries, end quote.

Don't know if you've seen Oppenheimer yet, but do you hear any historical rhymes with the whole story of the Manhattan Project? It's not that Dr. Malcolm quote from Jurassic Park about how everyone was so preoccupied with whether or not they could that they didn't stop to think if they should. Everyone knew what they were building at Los Alamos. They didn't stop to think everything through because they felt they were in a race. The fear of being the second folks to have the transformative new technology of nuclear fission overrode any fears about the whole nuclear fission stuff itself. Once people knew splitting the atom was possible, everyone knew someone would do it at some point. so everyone was like, it better be us, better that it be us first.

Tons of parallels to quantum computing and even AI, I think. No one is going to stop working on any of this stuff, unless they're sure that everyone stops working on this stuff. And that seems Pandora's box impossible, so here we are. Talk to you tomorrow.