Tech Brew Ride Home - Tue. 10/18 – It’s AI Vs. The Metaverse, And AI Seems To Be Winning

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 TechMame right home for Tuesday, October 18th, 2020. I'm Brian McCullough today. New iPad pros and new Apple TV 4Ks. Meadow walks away from the Giffy acquisition. Layoffs at Microsoft, high attrition at Amazon. Mobile Eye is probably going to IPO at a significant discount than people

Starting point is 00:00:53 had hoped and why I've been telling you that the energy in Silicon Valley is switching to AI startups. Here's what you missed today in the world of tech. Apple this morning and now, new 11-inch and 12.9-inch iPad Pro models with the M2 chips inside, as well as a new Apple Pencil Hover feature. Both of these will be in stores October 26, starting at $799 and $1,099,000 respectively, quoting Apple's own Newsroom. M2 features an 8-core CPU up to 15% faster than M1, with advancements in both performance and efficiency cores and a 10-core GPU, delivering up to 35% faster graphics performance for the most demanding users. Combined with the CPU and GPU, the 16-core neural engine, can process 15.8 trillion operations

Starting point is 00:01:46 per second, 40% more than the M1, making iPad Pro even more powerful when handling machine learning tasks. The power of M2 also extends to the new media engine and the image signal processor, which combined with the advanced cameras, enable users to capture pro-res video for the first time and Transcode ProRes footage up to three times faster. This means content creators can capture, edit, and publish cinema-grade video from a single device out in the field. Powered by the new iPad Pro and iPadOS16,

Starting point is 00:02:16 hover with Apple Pencil, second-generation only, provides a completely new dimension for users to interact with their screen. Apple Pencil is now detected up to 12 millimeters above the display, allowing users to see a preview of their mark before they make it. This also allows users to sketch and illustrate with each. even greater precision and makes everything users do with Apple Pencil even more effortless. For example, with Scribble, text fields automatically expand when the pencil gets near the screen, and handwriting converts to text even faster.

Starting point is 00:02:45 Third-party apps can also take advantage of this new feature to enable entirely new marking and drawing experiences. The new iPad Pro also supports the fastest Wi-Fi connections with support for Wi-Fi 6E, so users who need fast connections can take their demanding workflows with them everywhere. Downloads are up to 2.4GBS, 2X faster than the previous generation, end quote. That's not all for iPad news, because Apple also unveiled a redesigned 10th generation iPad, the entry-level iPad with a A14 bionic chip, a new design with flat sides, so looking like the rest of the iPad lineup now, a 10.9-inch display, a touch ID side button, USBC, and Wi-Fi That is coming October 26, starting at $449.

Starting point is 00:03:36 As for the Apple TV, Apple Today announced an updated Apple TV 4K model with the A15 Bionic chip, support for HDR Plus, all for a starting price of $129. The new Apple TV 4K also features an updated Siri remote with a USBC port. Customers can order the new Apple TV 4K with Siri Remote today at a new starting price of $129 with availability beginning Friday, November 4th. That was quoting from 9 to 5 Mac, by the way. Also, iPad OS 16 will be available on Monday, October 24th. Earlier this morning, the United Kingdom's competition watchdog gave a final ruling saying meta's acquisition of animated GIF platform Jiffy could not go through. This was followed by

Starting point is 00:04:28 news that meta has agreed to divest itself of Jiffy globally. They're throwing in the towel. I'm assuming there's a jiff for that. Quoting TechCrunch, the decision follows a stay of execution for meta this summer after the UK's Competition Appeal Tribunal sent the case back to the antitrust regulator to be reassessed following a procedural finding that the Competition and Markets Authority or CMA had not provided full unredacted disclosure to meta representatives

Starting point is 00:04:55 of documents related to its decision. But the tribunal upheld the CMA's decision on five of the six challenged grounds, saying it had, quote, hesitation in concluding that the regulator's finding that the merger substantially reduced dynamic competition was lawful. So today's news should shock precisely no one. The CMA's reassessment affirms its earlier view that meta's purchase of GIFI would limit choice for UK social media users and reduce innovation in UK display advertising. The CMA's original decision ordering meta to unwind the acquisition of Giffy was issued almost a year ago back in

Starting point is 00:05:30 November 2021, which was well over a year after META completed the purchase of Jiffy in May 2020 in a deal reportedly worth $400 million. Reached for comment, Meta confirmed it will not be appealing the decision, quote, we are disappointed by the CMA's decision, but accept today's ruling as the final word on the matter, said a spokesperson in an emailed statement, we will work closely with the CMA on divesting Giffy, end quote. Microsoft announced layoffs across multiple divisions yesterday, according to a source, less than a thousand jobs were cut, but they were cut across various levels, teams, and parts of the world, quoting Axios. The move is yet another example of large tech companies cutting jobs after earlier moving to slow or freeze hiring as the broader

Starting point is 00:06:22 economy cools. Multiple laid-off workers turned to Twitter and blind, among other online forums, to share that their job had been cut. Nearly all the major tech firms have slowed headcount growth, with many freezing all but essential hires. A number of companies have already moved to cut jobs, including SNAP, and as Axios reported yesterday, Flipboard, Meta, which had already frozen hiring plans to cut budgets in most divisions with layoffs expected, end quote. One quick thought on this, and take it in the spirit I intend it, because obviously I don't want to be blasé about people losing their jobs. But if you were a major tech company and you had even the slightest inkling that you might of over-hired, that maybe you want to cut out a certain percentage of underperforming teams or

Starting point is 00:07:09 projects, now would be a pretty good time to do that, right? Since everyone else is doing layoffs, you can do some yourself and Wall Street won't look askance at you for doing so. Or is everyone really feeling the pinch this time? Guess what? Tech earnings season is about to come, so we're about to find out. Somewhat related, the this is kind of something we already knew. But according to an internal document seen by Engadget, Amazon has a high attrition rate across all levels of its workforce. In other words, people join Amazon and then turn around and leave Amazon not long after. This turnover is so intense that it is apparently costing Amazon $8 billion annually, and workers choose to leave

Starting point is 00:08:03 twice as often as layoffs and firings occur. So, basically, Amazon can't really get their arms around this. Quoting Engadgett. Amazon churns through workers at an astonishing rate well above industry averages. According to a tranche of documents marked Amazon Confidential provided to Engadget and not previously reported on, that staggering attrition now has an associated cost.

Starting point is 00:08:27 Quote, worldwide consumer field operations is experiencing high levels of attrition, regretted and unregreted across all levels, totaling an estimated $8 billion annually for Amazon and its shareholders. One of the documents authored earlier this year states, for a sense of scale, the company's net profit for its 2021 fiscal year was $33.36 billion. The documents, which include several internal research papers, slide decks, and spreadsheets, paint a bleak picture of Amazon's ability to retain employees and how the current strategy

Starting point is 00:09:00 may be financially harmful to the organization as a whole. They also broadly condemn Amazon for not adequately using or tracking data in its efforts to train and promote employees. An ironic shortcoming for a company which has a reputation for obsessively harvesting consumer information. These documents were provided to engage it by a source who believes these gaps in accounting represent a lack of internal controls. Regretted attrition, that is, workers choosing to leave the company, quote, occurs twice as often as unregregated attrition. People being laid off or fired across all levels and businesses. According to this research, The paper published in January of 2022 states that the prior year's data, quote, indicates

Starting point is 00:09:40 regretted attrition represents a low of 69.5% to a high of 81.3% across all levels, Tier 1 through level 10 employees suggesting a distinct retention issue, end quote. By way of explanation, Tier 1 would include entry-level roles like the company's thousands of warehouse associates, while a vice president would be positioned at level 10. It also notes that, quote, only one out of three new hires in 2021 stay with the company for 90 or more days. An investigation from the New York Times found that among hourly employees, Amazon's turnover was approximately 150% annually, while work from the Wall Street Journal and National Employment Law Projects have both found turnover to be around 100% in warehouses, double the industry average. The rate at which Amazon has burned through the American working age populace led to another piece of internal research

Starting point is 00:10:32 obtained this summer by recode, which cautioned that the company might, quote, deplete the available labor supply in the U.S. in certain metro areas within a few years, end quote. And that's what I wanted to underline here again. Imagine this as a scenario. Imagine if growth in Amazon's retail business slows or actually reverses for the simple reason that they've hired everyone available to hire and burned through them so quickly that they literally have no one left to hire. What if the Amazon machine has chewed up? so many people, and the experience was so bad for them that they literally can't get people in the door just to keep the lights on. Is that even possible? Could your reputation as a workplace be so

Starting point is 00:11:13 bad that even raising salaries to the moon won't actually help you? Like that last segment, I guess we could find out. As Catherine Long tweeted, quote, 8 billion in nutrition costs makes one billion in warehouse raises look very sensible. And as Dar Obasandro tweeted, quote, The only surprise in the news employees quitting costs Amazon $8 billion a year is that it took this long for the company to treat employee welfare as a priority. Few companies in America have ingrained treating employees as replaceable cogs as much as Amazon, end quote. Another sign of the times, sources say Intel is eyeing a significantly lower sub-20 billion dollar valuation for the IPO of its mobile eye self-driving car unit, down from the originally expected $50,000. billion-dollar-plus IPO valuation, quoting the Well Street Journal. By selling fewer shares at a lower price, the company and its advisors are hoping to drum up interest that will push up the shares after

Starting point is 00:12:17 they start trading, some of the people said. And another sign of the challenges facing the offering mobilized plans to launch its roadshow for prospective investors on Tuesday a day later than anticipated. The goal is still for the shares to begin trading October 26. The people said, Intel and its advisors were encouraged to proceed with the roadshow Tuesday, in part by the surge in markets Monday, with the S&P 500 rising more than 2.5% on some positive earnings reports. Their hope is that the markets will improve at least somewhat and give way to a more hospitable environment by the time the shares debut. The deal is a test of the IPO market, which has been hit hard by rising inflation and interest rates, fears of a recession and plummeting stock prices, especially for

Starting point is 00:12:58 mobilized technology company peers. The U.S. IPO market is having one of its worst years on record, with traditional offerings on track to raise the least money since 1995 or before. According to Deologic, major U.S. indexes are all in bare markets defined in Wall Street parlance as a decline of 20% or more from a recent high. Also deterring new listings, the majority of companies that went public in 2020 and 2021 are trading below their IPO prices, many far below, end quote. Not only that, but remember that whole, SPAC craze of a year ago. A bunch of electric and self-driving startups went public via SPACs then. And according to a recent crunch-based news analysis, 14 self-driving vehicle tech companies that went

Starting point is 00:13:45 public in the past two years have seen an 80% or greater average decline in their post-IPO stock price. So, investors don't seem to have much faith in this space. I mean, Mobilize seems like a good business, at least in the space. It had $854 million in revenue for the first six months of its fiscal year, up 21% from the year earlier period. The company had a net loss of just $67 million. So in theory, they're on the cusp of turning profitable, which is when you would want to IPO. Question is, will that matter in this environment? Finally today, interesting raise time. Stability AI raised a $101 million seed round. A source says at a around $1 billion valuation, so giving away 10% of the company, which is basically

Starting point is 00:14:41 in line for a seed raise. Although, when you raise a seed at a unicorn valuation, that's worth noting. Quoting Bloomberg, the parent company of stable diffusion in artificial intelligence tool that makes digital art has reached unicorn status after raising funds from some top names in venture capital. The round was led by CO2 management and light speed venture partners, according to a statement reviewed by Bloomberg News. Stable Diffusion is among a handful of upstart AI models with the potential to upend the visual arts along with Dali 2. The way it works is people type in a description of an image,

Starting point is 00:15:15 say an astronaut riding a horse, and the program spits out a realistic or surrealistic picture. What sets stable diffusion apart from competitors is that its open source software is available to the public. Users can build on its code to produce applications related to design, film, augmented reality, video games, advertising, and even e-commerce. It also works on small devices. Its web application Dream Studio has more than one and a half million users, and stable diffusion, has more than 10 million daily users across all channels, according to Ahmad Mastikyu, chief executive officer of stability AI, end quote. So that, that last bit is what I want to underline here. Remember, when a few weeks ago on a Twitter space, I said to Chris that

Starting point is 00:15:58 I felt like the eyes of Silicon Valley, especially VCIs, were turning to AI and by implication away from Web3 and crypto, well, those last numbers are why. Their application has 1.5 million users already, and Stable Diffusion itself, has 10 million daily, again, daily active users. Compare that to Horizon Worlds, Meta's big Metaverse play, which has 200,000 monthly actives, or compare that to Decentraland, which only both. an all-time record of 675 daily active users, 675 versus 10 million. I know this stable diffusion stuff is new, this AI stuff is new, so we should probably revisit user numbers in the new year or six months for now. They could very well trail off. This could be a fad. I mean, the NFT market was seeing insane user numbers a year ago, but still, there's a big noticeable difference between products that you have to shove down people's throats or convince them to use,

Starting point is 00:17:00 and products that people intuitively see the use of without you having to do much of anything. She comes back to tell me she's gone. As if I didn't know that. As if I didn't know my own bed. As if I'd never noticed the way she brushed her hair from her forehead. Talk to you tomorrow.

Tech Brew Ride Home - Tue. 10/18 – It’s AI Vs. The Metaverse, And AI Seems To Be Winning

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