Tech Brew Ride Home - Wed. 01/10 – The X Post That Sent Crypto Reeling

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 Tech meme right home for Wednesday, January 10th, 2023. I'm Brian McCullough today. The SEC's X account was compromised by somebody jumping the gun on that Bitcoin ETF thing. Layoffs are back, even at companies that have yet to ship their first high-profile products, the hardware AI device

Starting point is 00:00:50 at CES that everybody was talking about yesterday, and what AI could do for medical drug discovery like right now. Here's what you miss today in the world of tech. The X account of the Securities and Exchange Commission briefly sent crypto markets into turmoil after tweeting that Bitcoin ETF applications had been approved. A follow-up ex-post from U.S. SEC Chair Gary Gensler said that the at-S.C.gov's Twitter account was compromised and that the agency had not approved spot Bitcoin ETFs, despite what the post said. Quoting Coin Desk. In a separate statement shared later, a spokesperson said, quote, there was unauthorized access to an activity on the account by a quote, unknown party, the party no longer has that unauthorized access, the statement said.

Starting point is 00:01:39 Quote, the SEC will work with law enforcement and are partners across government to investigate the matter and determine appropriate next steps relating to both the unauthorized access and any related misconduct, the statement said. X's safety team said early Wednesday morning that the SECGov account did not have two-factor authentication enabled and the attacker was able to gain control over a phone number tied to the account. SEC chair, Gary Gensler, on his own ex account said the ETFs have not been authorized. Quote, the SEC has not approved the listing and trading of spot Bitcoin exchange traded products, he said. The regulator is widely expected to approve spot Bitcoin ETF applications on Wednesday today. An SEC spokesperson told CoinDest last week

Starting point is 00:02:19 that any approval for Bitcoin ETFs would appear in the agency's Edgar database, X was not given as a means of communicating the decision. Quote, any commission 19B4 orders will be posted it on our website and then published in the Federal Register, the spokesperson said. The compromised at SECgovX account had tweeted, quote, today. The SEC grants approval for hashtag Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection, end quote. It included a graphic with a quote purportedly from Gensler. The account also posted a second tweet that just said, hashtag BTC, but this post was almost immediately

Starting point is 00:03:00 deleted, end quote. X confirmed. The at SECGov account was compromised and says, quote, the compromise was not due to any breach of X's systems and that the account didn't have two-factor authentication enabled, as I said, quoting CNBC. Social Media X said late Tuesday it has completed a preliminary probe into the compromise account of the U.S. Securities and Exchange Commission that displayed a false post claiming the SEC had approved Bitcoin ETFs for trading. Based on our investigation, the compromise was not due to any breach of X's systems, but rather due to an unidentified identified individual obtaining control over a phone number associated with the at-SEC-gov account through a third party, said X in the post, confirming that the SEC's account was compromised.

Starting point is 00:03:41 Bitcoin prices shot up following the unauthorized post, but soon fell below $46,000 after the SEC clarified that it had not yet approved the Bitcoin ETF. It was trading at nearly $45,958 at about 12.20 a.m. Eastern Time, end quote. Oof, layoffs are back. Sources are telling Bloomberg that Twitch is going to cut around 500 employees or about 35% of its staff as soon as today, January 10th, after concerns over company losses and several top executives leaving. Quote, running a large-scale website, supporting 1.8 billion hours of live video content a month is enormously expensive despite Twitch's reliance on Amazon's infrastructure, company executives have said. In December, Twitch, Chief Executive Officer Dan Clancy said the company would cease operations in South Korea, where the costs are, quote, prohibitively expensive, according to a blog post he wrote. Twitch has increased its focus on advertising in recent years.

Starting point is 00:04:43 Nine years after Amazon's acquisition of the company, the business remains unprofitable, according to the people who asked not to be identified discussing private information. In the final months of 2023, several top executives announced their departures, including Twitch's chief product officer, chief customer officer, and chief content officer. Twitch also lost its chief revenue officer who worked on Twitch from within Amazon's ads unit. Since he took the position in March, 23, Clancy has been on a cross-country charm offensive to mend relations with the gaming celebrities who make a living streaming on Twitch. Many of them chafed at Twitch's original approach to ads, which the company reworked after

Starting point is 00:05:18 criticism. Streamers have praised Clancy's desire to listen to their concerns after years of complaints that the service was out of touch with its users. The new chief has struggled to stem losses, however, Twitch undertook two rounds of layoffs last year, cutting over 400 positions, part of wider job reductions at Amazon, end quote. And a source told Alex Heath that Humane has laid off 10 staff or 4% of its workforce to cut costs and plans to lower budgets in 2024, as the company reshuffles some executive positions. Why is this notable, Brian, 10 people? Well, because remember, Humane is the early leader in the nascent AI hardware space, They haven't even shipped their first product yet.

Starting point is 00:06:05 Quoting The Verge. Humane has raised over $200 million from a who's-hoo of Silicon Valley, including OpenAI CEO Sam Altman, CEO Bethany Bonjourno, and her husband Imran Chowdry started the company in 2019 after spending long careers at Apple. After I asked Bonjourno to provide a statement for the story, she instead went to LinkedIn to describe the cuts as, quote, part of a wider refresh of our organizational structure as our company evolves with the purpose for this next phase of growth, end quote. In the post, she announced that founding CTO, Patrick Gates, quote, will also be transitioning to an advisor in order to spend more time with his family. She said the company had promoted new heads of hardware, software, and people as part of the reorganization. In a text message, Bonjourner told me that the cuts were, quote, not communicated as a layoff, end quote, to those who were impacted, despite sources telling me that they were, both verbally and in writing.

Starting point is 00:06:55 It goes without saying that, like every company, we have a responsibility to remain prudent and proactive, ensuring we have the right roles, right people, and the right structure at every juncture, she said, end quote. Now, despite that bad news for, as I said, the early leader in AI hardware, let me tell you about an AI hardware startup that got a lot of attention at CES yesterday. Something tells me next year at CES, it's going to be all about AI powered hardware. Not that there's not some of that now. There is. It's just, I bet folks are hard at work on things that are still a year or two out. But here's the most interesting one I've seen so far this year. Rabbit is a startup that has introduced a hardware AI device, the R1, priced at $199. This gadget resembles a playdate console or a small handheld TV from the 90s, and it aims to streamline

Starting point is 00:07:49 everyday tasks, but it's not exactly designed to replace smartphones. In fact, it doesn't connect to your phone at all, but it wants to do what your phone does for you simply by interacting it with voice. You know, order an Uber, respond to a text, buy your groceries, but all via an agent, an AI agent who acts on your behalf with the apps obviated underneath. The R1 features a 2.88 inch touchscreen, a rotating camera, and a scroll wheel slash button for navigation and interaction with its built-in assistant. It's powered by a 2.3 gigahertz media tech processor with 4 gigabytes of memory and 128 gigabytes of storage, encased in a body designed by teenage engineering. It wants you to interact with it like you

Starting point is 00:08:32 interact with chat GPT if you mainly interacted with chat GPT via voice. The essence of the R1 lies in its software, Rabbit OS, and its underlying AI technology. Unlike standard large language models, Rabbit OS is based on what it calls a large action model or lamb, functioning as a universal controller for apps. This operating system can manage various tasks like controlling music, sending messages through a single interface without the need for multiple apps and logins. Innovatively, the Rabbit trained its lamb by human interactions with existing apps, teaching it to recognize and use app interfaces and functionalities for you. This approach bypasses the need for developing specific APIs or seeking developer support for the R1. The R1 also includes a

Starting point is 00:09:16 training mode allowing users to teach the device new task, which it can then autonomously perform. This feature offers personalized automation capabilities. Concerning privacy and security, Rabbit claims no storage of user credentials for third-party services and authentication, occurs through those services systems. The devices push-to-talk functionality ensures it only records audio when activated, addressing continuous listening concerns. Rabbit OS does integrate large language models for intent understanding powered by OpenAI's chat GPT and Rabbit's own lambs for task execution. The R1 is capable of executing complex errands requiring real-time interactions like travel planning or grocery shopping. An upcoming update will introduce a teach mode further

Starting point is 00:09:57 enhancing its capabilities to learn new tasks directly from user demonstrations. This is interesting. Basically, a smartphone that can do everything you do on a smartphone but no tapping on a screen. Apps, but you don't interact with them yourself. The agent does. Maybe more interesting than that humane device? I mean, it still requires you to pay $200 for a totally separate device in your pocket, but this is getting out a new idea in mobile compute interface, which is what I'm interested in. The Hollywood Union SAG AFRA has signed a deal with AI voiceover company Replica Studios, requiring consent to create voice replicas for use in video games and safe storage of assets after they've been produced. Quoting variety. At a press conference, Duncan Crabtree, Ireland,

Starting point is 00:10:47 the union's executive director said the union wants to channel emerging technology to benefit performers rather than trying to stand in the way. These are the kinds of terms that producers can agree to without disrupting their ability to make content Crabtree, Ireland said, This is an evolutionary step forward. AI technology is not something we can block. It's not something we can stop. That's not a tactic or a strategy that's ever worked for labor in the past, end quote. AI was a major issue in the 2023 SAG after strike. The union ultimately reached a deal with the major studios, represented by the Alliance of Motion Picture and Television producers that established consent and compensation requirements for the use of AI to replicate actors' likenesses. The deal did not block studios from training AI systems to create synthetic actors that bear no resemblance,

Starting point is 00:11:29 to real performers. Sag Afterra is now engaged in a similar negotiation with a coalition of major video game studios. The union has obtained a strike authorization vote, though talks continue. Crabtree Ireland said that agreement with Replica Studios could help spur those discussions. Quote, I hope the video game companies will take this as an inspiration to help us move forward in that negotiation, he said. I'm hopeful we will be able to reach agreement with the video game studios imminently, end quote. Replica Studios launched its AI platform in 2019. The company sells AI voices to video game developers from its library of ethically licensed voices. Last year, the company announced a new iteration of smart NPCs, non-playable characters that could use open AI or other

Starting point is 00:12:11 language models to interact with video game players, end quote. Was it just yesterday, I said that any deals in tech right now, especially deals that are surprising if you scratch the surface, the answer to why the deal is even happening, is AI, at least at the moment. Here's another example. The question an answer site Quora has, and I don't mean this in a mean way, been thought of as a bit of a zombie company for a few years now. Big, but not big enough in terms of revenues to IPO. Interesting, but not strategically interesting enough to get acquired. So, are you surprised to hear that Quora has raised $75 million in new funds from Andresen Horowitz? Guess why? I didn't quite remember this, but Quora has Poe, its own AI chat platform. Hmm, Kora also has

Starting point is 00:13:02 has a huge corpus of structured questions and answers to train on, doesn't it? Quoting TechCrunch, what makes Cora's AI chatbots different from the rest of the pack? Cora is trying to develop its own subset of the creator economy based on AI chatbots. So instead of a creator making a living from YouTube ad revenue, they can try to pay the bills by building interesting AI bots. We expect the majority of the funding to be used to pay creators of bots on the platform through our recently launched creator monetization program,

Starting point is 00:13:29 wrote Cora CEO Adam DeAngelo, in a statement. In October, Quora launched this creator monetization program for Poe, which allows people who create bots or prompts on Poe to generate revenue. Even developers who integrate bots with the Poe AI are eligible to earn money. Quora is betting big on creators, but this big fundraise allows the company to lure talented developers to Poe with the promise of financial compensation. Plus, Poe aggregates a wide range of text and image AI models like ChatGPT, Dolly 3, Claude 2, Stable Diffusion, Lama, and others, which gives creators a huge playground of tools to access. When Quora last raised VC funding in 2017, the company was valued at around $1.8 billion. But Quora's latest raise values the company

Starting point is 00:14:10 at just $500 million, a steep decline from its previous raise. Since the launch of Poe, about a year ago, Quora is picking up some steam. DeAngelo also shared that Cora had its highest usage week ever last week and that the platform has over 400 million monthly unique visitors. Excluding Po, Quora is cash flow positive, so all this new funding will be. used on Poe, DeAngelo said. According to data TechCrunch viewed from Apptopia in October, Poe's mobile app was downloaded more than 250,000 times in February, its first month open to the public. Through October, Poe saw over 18.4 million installs and grew to nearly 1.22 million monthly active users, end quote. Finally today, one more AI story for you. Demise Hasebis,

Starting point is 00:14:59 chief of Deep Mind Spinout Isomorphic Labs, says he believes the company could have have drug discovery times after inking deals with Eli Lilly and Novartis. Quoting the Financial Times. Speaking to the Financial Times, Demisa Seibis, who co-founded Google's AI unit and also leads the drugs offshoot isomorphic labs, said the goal was to reduce the discovery stage when potential drugs are identified before clinical trials from the average of five years to two. I think that would be successful for us and very meaningful, he said. Hasebis stated the goal after announcing isomorphic. Lysmorphic Labs' first two pharmaceutical partnerships with Eli Lilly and Novartis, which came to a

Starting point is 00:15:41 combined value of up to $3 billion in deals set to transform the finances of the unprofitable group. Isomorphic Labs uses an AI platform to predict biochemical structures, which aids the creation of new drugs by recommending which potential compounds will have the desired impact in the body, including clinical trials. It often takes up to a decade to discover and develop a new drug, costing on average about $2.7 billion, according to research by the Tuff Center for the study of drug development. Large drug makers under pressure to fill their pipelines with new potential medicines while existing ones face patent cliffs when they will face far cheaper generic competition are eager for new ways to shorten the process. As healthcare systems around the world put pressure

Starting point is 00:16:21 on drug prices, pharma companies are also looking for ways to cut costs in research and development. Hasebis said that many drug makers had also been eager to partner with isomorphic, but the company wanted to focus on collaborations that could improve its technology. We could probably sign up a dozen partnerships today if we wanted to, but then it will cause us to fragment too much to make more bespoke solutions for the individual programs, he said. Instead, Isomorphic chose to sign deals with just two pharmaceutical companies. On Sunday, it announced Lilly would pay $45 million up front with another $1.7 billion to be paid when the project reached performance milestones, such as drugs reaching trials or approval. Novartis would pay $37.5 million up front, and $1.5 million

Starting point is 00:17:01 front with an additional $1.2 billion in performance-based incentives, end quote. By the way, that Rabbit R1 story is produced as a YouTube video. I produced it yesterday. Again, link at the bottom of the show notes today to that CES YouTube playlist I've been making. I probably won't produce any additional videos today. I don't have time. But I hope to do a handful more by the weekend. I am going to put all the videos together into an audio podcast bonus episode this weekend. But again, you can see what I'm doing ahead of time, if you head over to YouTube. And again, seeing what that rabbit device actually looks like

Starting point is 00:17:42 is sort of half the story. So check that out. If interested, talk to you tomorrow.

Tech Brew Ride Home - Wed. 01/10 – The X Post That Sent Crypto Reeling

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