Tech Brew Ride Home - Wed. 01/03 – Why Is Facebook Rolling Out Link History?

Episode Date: January 3, 2024

Facebook has a new feature, Link History, but why are they doing this and why now? I’m asking. A look at those jockeying to get ahead of a bitcoin ETF. The next Galaxy event is official. A look at the big AI player we seldom talk about. And a look at the AI influencers who are flooding social media. Links: Meet ‘Link History,’ Facebook’s New Way to Track the Websites You Visit (Gizmodo) Fidelity sets Bitcoin ETF fee at 0.39% ahead of expected SEC approvals (Fortune) Samsung Galaxy S24 Unpacked Event Set for Jan. 17 (PCMag) Can Midjourney’s CEO Stop a Storm of Fake Election Images? (Bloomberg) How AI-created fakes are taking business from online influencers (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 Tech meme right home for Wednesday, January 3rd, 24. I'm Brian McCullough today. Facebook has a new feature, link history, but why are they doing this and why now? I'm actually asking. A look at those jacking to get ahead of a Bitcoin ETF. The next Galaxy event is official. A look at the big AI player we seldom talk about and a look at the AI influencers who are flooding social media. Here's what you miss today in the world of tech. Facebook has rolled out what it calls link history, which creates a repository of all the links clicked by a user on the Facebook mobile app. The company promotes link history as a convenient tool allowing users to easily access their browsing history. You have the

option to disable this, and if deactivated, Facebook assures that the accumulated link history will be erased within about 90 days. Now, Facebook has always been tracking the links you click. Most websites and apps do, but this is the first time Facebook has provided users with some degree of transparency and control over a specific aspect of what it tracks. Essentially, meta is now seeking user consent for a form of tracking it has been conducting for years. And that's what's interesting because they do explicitly say, quote, when you allow link history, we may use your information to improve your ads across meta technologies. Quoting Gizmodo, link history creates a confusing new regime that establishes privacy settings

that don't apply if you access Facebook outside of the Facebook app. If you log, into Facebook on a computer or a mobile browser instead, link history doesn't protect you. In fact, you can't see the link history page at all if you're looking at Facebook on your laptop. It's also not clear how far the link history protections go. Gizmodo asked meta whether Facebook creates any other records of the links you click on that aren't called link history. The company did not immediately respond to a request for comment. Adding to the confusion, meta tracks things you're doing on other parts of the internet in a similar but unrelated way. To participate in meta's advertising network, works, millions of companies add a tracking tool called the Meta pixel to their websites.

This sends meta details about your activity when you're not using Meta's products whatsoever, even if you don't have an account on Facebook or Instagram. A 2022 investigation by the markup found at least 30% of popular websites use the Meta pixel, end quote. This is just a weird thing to do, a weird time to do it. Meta's gotten a lot of goodwill lately, so this sort of reminds people of what they don't like or don't trust about meta. so why do it? I'm not actually sure, and I couldn't find anything this morning where someone had

cracked the reasons why. Is the opting in for a new feature thing the key here? I'm not a lawyer, but does this get them ahead of those new laws in Colorado and California or the various European tracking regimes? Speaking of getting ahead of things, one of the theories I mentioned yesterday about the rise of the price of Bitcoin recently is, you know, traders getting ahead of the official rollout of potential spot Bitcoin ETFs. There's an old saw on Wall Street. Buy the rumor, sell the news. But it's not just traders who want to position themselves for any announcement about ETFs. Fortune says Fidelity and other spot Bitcoin ETF issuers are jockeying for an early advantage to attract investors to these products ahead of the rumor that approval to

launch ETFs might come as soon as January 10th. Quote, in late December 2 of the major issuers, Fidelity and Galaxy Invesco release details on their fees, while a slew of issuers named authorized participants setting the state for a battle to gain crucial early mover status. As issuers file updates to their applications, the details of how the ETFs will function has come into focus. For weeks, the predominant question has focused on the model of redemption that issuers will follow. ETSs or exchange traded funds function with the help of institutional investors called authorized participants who can create or redeem individual shares in the fund as part of an arbitrage system that keeps the price of the ETF shares close to the value of the underlying

asset. While most ETFs hold traditional stocks or bonds, which are simple for authorized participants to buy and sell, a Bitcoin ETF presents a more challenging model. Rather than having authorized participants buy or receive Bitcoin directly from the issuer, the in-kind model, the SEC pushed issuers to follow a cash model, which would put the onus of Bitcoin buying and selling on the issuer reflecting the agency's reluctance to allow broker-dealers to handle Bitcoin. In updated filings from December 29th, Fidelity, Galaxy Invesco, Wisdom Tree, Valkyrie, and BlackRock, all listed the first authorized participants that they will work with. Fidelity and Wisdom Tree both named Jane Street Capital, a secretive trading firm that previously employed FDX

founder Sam Bankman-Fried, BlackRock and Galaxy Invesco, a partnership between the crypto firm run by Mike Novagrats and the traditional investment management company, both named J.P. Morgan and Virtue as market-making firm. Belkney named Jane Street and Cantor Fitzgerald. More critically, two of the issuers released details on the fees that they will charge investors for the ETF, a key element that could determine the most popular options in a crowded field. Investco Galaxy announced that it would waive fees for its first six months of operation and for the first $5 billion in assets held, followed by a 0.59% fee. Fidelity announced its fee would be 0.39%. Eric Balchanas, a senior ETF analyst for Bloomberg,

predicted on X that Black Rock would set its fee at 0.47%, end quote. I'm getting you ahead of the news on this one. Samsung does officially plan to hold its next Galaxy unpacked event on January 17th at 10 a.m. Pacific time in San Jose to showcase new mobile devices and Galaxy AI, quoting PCMag. The company says it will show off, quote, the newest additions to the Galaxy mobile device portfolio. In its teaser video, the company goes a step further and explicitly states that Galaxy AI is coming. So get ready for some form of on-device Samsung developed artificial intelligence. To drum up interest ahead of the event, Samsung plans to once again let people

in the U.S. receive a $50 credit if they reserve one of the new Galaxy phones on its website or via the Samsung app between January 2nd and 16th. No payment is required. Just provide your name and email address and you can redeem the $50 credit once you place an official pre-order. For months, rumors have suggested that Samsung will announce the Galaxy S-24 in January, and it appears those reports are on point. In recent years, Samsung refreshed the Galaxy S-S series in February, so it's pushing its next-gen phones a little earlier than usual. The Galaxy S-24 Ultra is expected to have a titanium frame, which will surely draw comparisons to the similarly outfitted Apple iPhone 15 Pro and 15 Pro Max. Recently, a leaker by the name of Mystery Lupin published what looks like the ad copy for

retailers that describes the new S-24 line. The text says the S-24 plus and ultra-models will be able to take advantage of AI to move or remove items in pictures and fill in empty spaces using generative edit. This sounds a lot like features that launched on the Google Pixel 8 line last year. Other reports suggest the Samsung phone app will add a live translation feature so two people who don't speak each other's languages can have a conversation. Ice Universe also reports that the S-24 Ultra app may be able to record video in 4K and an astounding 120 frames per second, but warns that the feature is in the testing phase and may not be available at launch, end quote.

When we've been discussing the big AI model platforms like OpenAI and Anthropic and others who are raising big money from investors and often from big tech platforms, one name hasn't gotten a lot of mention, at least on this show, and that's mid-jurney. And that's odd, because chances are if you've seen AI-generated art and images floating around the internet, it probably came from Mid Journey. So why do we never hear about them doing a big raise? Quoting Parmy Olson in Bloomberg. Mid Journey is a San Francisco based AI startup that in its 17-month existence has carried out no marketing, raised not a cent from venture capitalists, but is making $200 million in annual revenue and has become one of the

most powerful tools for generating remarkably real AI, quote, photos. Fake snaps of President Trump getting arrested and Pope Francis in a white puffer jacket confused internet users and went viral earlier this year and were generated on Mid Journey. The company has now released a new version that can do this with even more realism. Having previously insisted that he doesn't like fake photos, Mid Journey founder David Holtz finds himself steering a tool created for artists that's also being exploited by propagandists. That's the trajectory of a kind of classic AI innovator, one who couldn't resist making their system more powerful at the price of their own standards. Mid-Journey did not respond to multiple requests for comment or for an interview with Holtz.

Holtz grew up in Florida where he carried out advanced science experiments as a kid, shooting paper airplanes at 160 miles per hour down a homemade wind tunnel, for example, before juggling interests in design and math in higher education. He co-founded Leap Motion in 2008, a startup that made a USB device the size of an iPod, that allowed you to control a computer program with hand gestures. Holtz was more than a decade too early with his idea, and he stuck it out to his detriment. After spurning a takeover bid from Apple in 2013 for hundreds of millions of dollars, Leap Motion dropped in value. Holtz finally sold it to a British firm in 2019 for $30 million.

Undeterred, he founded Mid Journey in 2021, eventually turning it into an independent research lab that would, quote, expand the imaginative powers of the human species, end quote. In interviews with Forbes and the Register in 2022, Holtz described how Mid Journey was a space for people to, quote, make beautiful things. He built a tool on an algorithm from OpenAI, and in the spring and summer of 2022, several months before OpenAI wowed the world with Dali II, Holtz released his own early versions of Mid-Journey, a tool that could conjure digital art from text prompts. His customers paid around $10 to $60 a month to use the tool, accessing it through public chat rooms on the app Discord. It could have all ended there,

except Holtz had the gold dust every Silicon Valley entrepreneur craves. Connections. He picked up several renowned advisors, including Nat Friedman, the CEO of Coding site GitHub, who purchased thousands of AI chips this year for startups to exploit. These chips, known as GPUs, are critical to keeping ahead in the race to build AI. With help from his network, Holtz amassed an enormous collection of GPUs, as many as 10,000, roughly the number estimated to train ChatGPT to make MidJourney's models smarter and faster. All that computing power translated into jaw-dropping improvements in version 5 of Mid Journey, released in March 2023. When users asked it for photorealistic images of people,

everything from skin texture to facial features were much more realistic, while reflections, shadows, and lighting were also more true to life. Version 6, released on December 20th, generates faces with even more startling detail with skin pores and texture that make them virtually indistinguishable from real photos. It took eight months for Mid Journey to release version 6, a noticeably long time compared to the quicker releases of previous versions, which came two to four months apart. Holtz may be struggling to get the AI chips he needs,

or he could be grappling with the responsibilities of opening such an influential tool to the public mere months before a presidential election, end quote. Finally, today, since we're on AI from the Financial Times, a look at the rise of AI-generated virtual influencers, with some of these AI bots charging thousands of dollars to promote products, leading to concerns from human influencers who fear, well, who fear AI taking their jobs. Quote,

Pink-haired Itana Lopez is followed by more than 200,000 people on social media. She posts selfies from concerts and her bedroom while tagging brands such as Hair Caroline Olaplex and lingerie giant Victoria Secret. Brands have paid about $1,000 a post for her to promote their products on social media, despite the fact that she is entirely fictional. Itana is a virtual influencer created using artificial intelligence tools,

one of the hundreds of digital avatars that have broken into the growing $21 billion content creator economy. Their emergence has led to worry from human influencers. Their income is being cannibalized and under threat from digital rivals. That concern is shared by people in more established professions that their livelihoods are under threat from generative AI, technology that can spew out human-like text, images, and code in seconds. But those behind the hyper-realistic AI creations argue they are merely disrupting an over-inflated market. We were taken aback by the skyrocketing rates influencers charge nowadays. That got us thinking,

what if we just create our own influencer, said Deanna Nunez, co-founder of the Barcelona-based agency, The Clueless, which created Itana. The rest is history. We unintentionally created a monster, a beautiful one, though, end quote. Over the past few years, there have been high-profile partnerships between luxury brands and virtual influencers, including Kim Kardashian's makeup line, KKW Beauty with Nunori and Louis Vuitt. Tintan with Ayayee. Instagram analysis of an H&M advert featuring virtual influencer Kuki found that it reached 11 times more people and resulted in a 91% decrease in cost per person remembering the advert compared with a traditional ad. It's not influencing purchase like a human influencer would,

but it is driving awareness, favorability and recall for the brand, said Becky Owen, a global chief marketing and innovation officer at Billion Dollar Boy and former head of Meta's creator innovations team. Brands have been quick to engage with virtual influencers as a new way to attract attention while reducing costs. Influencers themselves have a lot of negative associations related to being fake or superficial, which makes people feel less concerned about the concept of that being replaced with AI or virtual influencers, said Rebecca McGrath, Associate Director for Media and Technology at Mintel. For a brand, they have total control versus a real person who comes with potential controversy, their own demands, their own opinions, McGrath added. Human influencers

contend that their virtual counterparts should have to disclose that they are not real, however. What freaks me out about these influencers is how hard it is to tell their fake, said Danei Mercer, a content creator with more than 2 million followers. Although the clueless discloses Itana is fake through the hashtag AI model in her profile on Instagram, many others do not do so or use vague terms such as hashtag digital influencer. One of the first virtual influencers, Lil McKella, charges up to hundreds of thousands of dollars for any given deal and has worked with Burberry, Prada, and Gvinci. Although AI is used to generate content for Little McKella, the team behind the creation,

quote, strongly believe the storytelling behind virtual creations cannot be fully replicated by generative AI, said Ridhima Khan, vice president of business development at Dapper Labs, who oversees Little Mikala's partnerships, end quote. Thanks for the feedback on that video segment I tested out yesterday on YouTube. If and when I do another one, I'll take your notes into account. Talk to you tomorrow.