Tech Brew Ride Home - Wed. 01/29 – OpenAI Says: No Copying!

Episode Date: January 29, 2025

Essentially, OpenAI suspects that DeekSeek might have copied them. I’ll explain the term, “distillation.” Could you soon be able to connect to Starlink on your iPhone? Is Comcast about to make the Internet… better? And the hopeful return of commercial supersonic flight. Links: OpenAI says it has evidence China’s DeepSeek used its model to train competitor (Financial Times) Microsoft Probing If DeepSeek-Linked Group Improperly Obtained OpenAI Data (Bloomberg) Alibaba releases AI model it says surpasses DeepSeek (Reuters) Alibaba Announces AI Model That ‘Outperforms ChatGPT & DeepSeek’ (Tech.co) Alibaba’s Qwen 2.5 surpasses DeepSeek as China’s AI race heats up (BGR) Apple and SpaceX Link Up to Support Starlink Satellite Network on iPhones (Bloomberg) Comcast is rolling out ‘ultra-low lag’ tech that could fix the internet (The Verge) Streaming prices climb in 2025 after already surpassing inflation rates (ArsTechnica) Netflix won the streaming wars, and we’re all about to pay for it (The Verge) Civilian jet breaks sound barrier during historic test flight over Mojave Desert (CBSNews) 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 TechMame right home for Wednesday, January 29th, 2025. I'm Brian McCullough today. Essentially, OpenAI suspects that DeepSeek might have copied them. I'll explain the term distillation. Could you soon be able to connect to Starlink on your iPhone? Is Comcast about to make the internet better? And the hopeful return of commercial supersonic flight. Here's what you missed today in the world of tech. Remember how people found that if you asked Deepseek what model it was, it sometimes said it was an Open AI model? Well, Open AI says it is. seen some evidence that DeepSeek used distillation to train its open source competitor by using outputs from Open AIs proprietary models. Quoting the FTE, the technique is used by developers

to obtain better performance on smaller models by using outputs from larger, more capable ones, allowing them to achieve similar results on specific tasks at a much lower cost. Distillation is a common practice in the industry, but the concern was that DeepSeek may be doing it to build its own rival model, which is a breach of open AIs terms of service. The issue is when you take it out of the platform and are doing it to create your own model for your own purposes, said one person close to OpenAI, OpenAI declined to comment further or provide details of its evidence. Its terms of service state users cannot copy any of its services or, quote, use output to develop models that compete with OpenAI, end quote. And quoting Bloomberg, Microsoft security researchers in the fall

observed individuals they believe may be linked to Deepseek, exfiltrating a large amount of data using the OpenAI application programming interface or API, said the people who ask not to be identified because the matter is confidential. Software developers can pay for a license to use the API to integrate OpenAI's proprietary artificial intelligence models into their own applications. Microsoft and OpenAI technology partner and its largest investor notified OpenAI of the activity the people said. Such activity could violate OpenAI's terms of service or could indicate the group acted to remove OpenAI's restrictions on how much data they could obtain, the people said. We know PRC-based companies and others are constantly trying to distill the models of leading U.S. AI companies, an open AI spokesperson said in

the statement referring to the People's Republic of China. As the leading builder of AI, we engage in countermeasures to protect our IP, including a careful process for which frontier capabilities to include in release models and believe as we go forward that it is critically important that we are working closely with the U.S. government to best protect the most capable models from efforts by adversaries and competitors to take U.S. technology, end quote. In its own research, Deepseek said it had distilled models from its R1 system based on other open source systems. Unlike OpenAI's closed systems, some models such as MetaZlama are open source and freely available for use, end quote. More of a roundup of deep seek takes. ASML reported earnings yesterday and they were fine.

Stock is up, but believe me, people probably didn't want to have to report earnings this week in the midst of this deep seek brouhaha. ASML CEO Christoph Fouquet said cheaper AI, quote, could mean more applications and more demand over time and cost in energy, are the big issues to address. And meta executives say DeepSeek's breakthrough shows that Upstarts now have a chance to innovate and compete with AI giants and vindicates the open source strategy. Our open source strategy was validated, said Raghavan Serena Vassan, a meta vice president in an interview on Tuesday. The more people who have access to the technology needed to move things forward faster, the better, end quote. All the headlines this week have been about Deepseek, but really,

the way to look at this is the sudden ascendancy of Chinese models and startups to the cutting edge of the AI field. More evidence of that, as Alibaba has released Quen 2.5 Max, an AI model that the company's cloud unit claims outperforms GPT-40 and DeepSeek V3, almost across the board, quoting Reuters. Quinn 2.5 Max outperforms almost across the board, GPT40, DeepSeek V3, and Lama 3.405B, Alibaba's cloud unit said, in an announcement posted on its official we chat account, referring to OpenAI and meta's most advanced open source AI models. The unusual timing of the Quinn 2.5 Max's release on the first day of the lunar New Year when most Chinese people are off work, and with their families, points to the pressure Chinese

AI startup Deepseek's meteoric rise in the past three weeks has placed on not just overseas rivals, but also its domestic competition, end quote. Interesting that the rise of Deepseek has been causing panic in Chinese tech circles too, much like their Western counterparts, quoting Tech.co. This is the latest model to join the Kuen 2.5 family, which are built using both proprietary and open source technology in contrast to rivals who have opted for one or the other option. Open AI and Baidu another Chinese AI contender have both largely used closed source approaches, while Deepseeks, agile and relatively small team uses an open source approach.

The Kwen 2.5 family was originally launched in May, but now has more than 100 models, which range in size from 0.5 to 72 billion parameters. Our base models have demonstrated significant advantages across most benchmarks. Alibaba stated, and we are optimistic that advancements in post-training techniques will elevate the next version of QM2.5 Max to new heights. It adds that it delivers pre-training on over 20 trillion tokens. And quoting the Boy Genius Report. With this release, we're now seeing that not only are U.S. companies intensifying the AI race against the Chinese, but local competition also wants to stay ahead.

That said, Alibaba continues to defy other major Chinese plays. players, including Deep Seek, Baidu, and Tencent. Last year, the company slashed its usage prices since the Deep Seek V2 was not only open source, but also cost around 14 cents per one million tokens. Baidu also followed the price cut, end quote. Could you soon be able to connect to Starlink on your iPhone? Mark Gurman says yes, as his sources say, Apple has been working with SpaceX and T-Mobile to add Starlink support in iOS 18.3. T-Mobile has reportedly already been testing it with some, users. Quoting Bloomberg. T-Mobile has begun allowing customers to sign up for an early version of the Starlink service, and this week the carrier enabled a small number of iPhones

as part of a beta test. In a post on X responding to the news, Elon Musk said images, music, and podcasts should be supported by current Starlink technology and future upgrades. We'll add video support as well. The initial version of Starlink is exclusively for texting, but SpaceX and T-Mobile have said that they plan to expand into data connections and voice calls in the future. The program also is only available in the U.S. for now. That contrasts with Apple's Global Star service, which works in several countries. SpaceX is looking to expand Starlink to other carriers globally, end quote. Yeah, remember Global Star, the company Apple hooked up with for its emergency satellite connectivity service and pumped a bunch of money into, what about them? Their stock is

down about 11% in pre-market trading today on this news. So perhaps Apple is testing things out with Starlink to see what they could do down the road. But here's the thing. Right now, to connect your iPhone to the Global Star Service, you literally have to point your iPhone at the sky. Starlink, meanwhile, theoretically, works from your pocket. And no, this is not a replacement for your carrier. Both services only work in off-the-grid areas. Quoting 9 to 5 Mac. T-Mobile and SpaceX announced their partnership in 2022, and T-Mobile had previously only said that phones from Samsung would support Starlink connectivity. The carrier opened beta registration for the program in December. T-Mobile says it expects to launch Starlink connectivity to everyone sometime in 2025. T-Mobile customers can sign up for

the beta on the carrier's website, end quote. Could this one simple trick fix the internet? Comcast has begun rolling out its pioneering new ultra-low lag connectivity experience to select US cities using the L4S standard to significantly cut latency. Quoting the verge, if you use Comcast, X-F internet, your FaceTime calls might be about to get better. Instead of bumping up the amount of data that your internet connection can send or receive at one time, usually called bandwidth or throughput, a new upgrade is coming to reduce the amount of time it takes for each packet of information to make the trip. Comcast is officially starting to roll out the new pioneering ultra-low-lag connectivity experience to cities including Atlanta, Chicago, Colorado Springs, Philadelphia,

Rockville, and Maryland and San Francisco. The technology pioneering this upgrade is based on a standard called L4S, which stands for low latency, low loss, scalable throughput. My former colleague Mitchell Clark has a thorough explainer of what L4S is supposed to do, but the intention is that the tech can significantly reduce latency so that things like video games are smoother, and video calls feel more like talking in real life without awkward delays and pauses, end quote. L4S works by embedding a signal within internet packets that indicates if they've encountered congestion or queuing at any point during their journey between,

users and their intended destinations. When delays are detected, the connected devices can adapt their behavior to prevent the congestion from worsening, potentially eliminating it altogether. As mentioned, according to Comcast, the initial low-latency benefits will be noticeable when using FaceTime, G-Force now from Nvidia, various Steam games, and apps on meta's mixed-reality headsets that will support this technology. During the testing phase, Comcast collaborated with Apple, Nvidia, and Valve. Apple has integrated L4S support into its ecosystem since iOS 17 and MacOS Sonoma's release. The company says that the technology will expand to any additional content and application providers who choose to leverage the new Open Standard technology for their own

products. Comcast spokesperson Joel Shaddle reports that during testing, we were able to reduce our working latency, the latency under normal conditions in the home, when people are using the internet, by 78%, suggesting that customers should expect to see significant improvement, end quote. Streaming prices rose a ton in 2024. basically every platform increased monthly subscription prices. So they're done now, right? Time for a pause in 2025. Ha, good luck. Quoting Ars Technica. If you were hoping for a respite from rising streaming subscription fees in 2025, you're out of luck. Several streaming providers have already increased monthly and or annual subscription rates continuing a disappointing trend from the past few years with

no foreseeable end. In its digital video forecast and Trends Q1-2020 report e-marketer, a marketing ads and commerce research firm that merged with insider intelligence in 2020, found that subscription fees for ad-free streaming tiers have greatly outpaced inflation and pay TV increases since 2023. Pay TV packages and inflation have increased at similar rates in recent years, but over the past two years, streaming has gotten much more expensive relative to both. E-marketers report says, meanwhile, some research shows that subscribers consider the quality of content available on streaming services to be subpar and or declining. 36% of respondents in Deloitte's March report, for example, said that the content available

on streaming video services isn't worth the price. A Q2-2020-4-204-204-7-40-7 of 4,490 people in the U.S. in Canada ages 18 and up, found that fewer subscribers perceive their streaming services as having moderate to very good content. In Q2, 2022, the percentage was 78.6% for ad-free subscribers compared to 74.5% in Q2-20204. Ad-supported services also reportedly saw a drop here, going from 74.2% in Q22023 to 60.8% in Q22024. Price increases are happening as several streaming services are cutting back on their content libraries, e-marketers report says. These issues have contributed to consumer dissatisfaction. Meanwhile, streaming services are finally appearing more profitable on paper, end quote.

Yeah, well, as David Pierce points out, none of this matters because streaming has won. Netflix, especially, has won. only plan from here on out is to just become the cable they replaced. And that includes the cost. People used to pay over $100 a month for cable. There is theoretically plenty of pricing power to go. Quote, now for the price of your Netflix subscription, you get a bunch of expensive movies, high-end TV shows, sports, and low-budget reality programs all in one place. You don't want it all, but you pay for it anyway. That, my friends, is called a cable bundle, and it's still the best business the entertainment industry has ever devised.

The average price of a basic cable subscription in 2006, the year before Netflix started streaming content over the internet, was between $40 and $50. People watched something like four hours of TV a day, which meant they probably watched about an hour of ads every single day. Today, services like YouTube TV and Comcast's News Sports and News Bundle are $70 or more and only provide live programming. Meanwhile, Netflix subscribers watch two hours of the service every day across all those categories and are paying as little as a tenth of the price.

Many of them see no ads at all. Think of the savings. Netflix sure sees it that way. Greg Peters, the company's co-CEO, said on this week's earnings call that he's optimistic about Netflix's, quote, long-term monetization opportunity. We earn right now only 6% of the revenue opportunity in the countries and segments that we currently serve, he said.

And as long as we continue to deliver on improving the variety, the quality of our TV and film slate, we gradually expand the offering with newer content types, we believe will be able to increase that share progressively every year. Translation, Netflix is coming for your entire entertainment diet and your entire entertainment budget. Reed Hastings, Netflix's co-founder and former CEO famously said that Netflix's main competitor is Sleep. Sleep's still a pretty powerful market force, to be fair, and YouTube continues to be an even more dominant force in people's video viewing experience. But Netflix has ascended above practically everybody else, even its ostensible competitors, are now licensed.

their shows to Netflix because that's where the viewers are and where the culture is. The streaming wars have been messy, and they're certainly not over, but Netflix's already won. The only question left is exactly how rich the spoils of victory will be, and you better believe Netflix is going to find out, end quote. Finally today, I wanted to note this, just because it's fun, quoting CBS News. A civilian jet broke the sound barrier for the first time Tuesday while making a historic test flight over the Mojave Desert. The XB1 aircraft manufactured by Boom Supersonic.

was piloted by Tristan Jepetto Brandenburg, the company said in a news release, the plane nicknamed Baby Boom took off from Mojave Air and Spaceport and reached an altitude of 35,290 feet before accelerating to Mach 1.122, the company said that speed is equivalent to 750 miles per hour. It marks the first time an independently developed jet has broken the sound barrier, boom, supersonic said, and the plane is the first supersonic jet made in America. The sound barrier was broken for the first time in 1947 when Air Force pilot Captain Chuck Yeager flew a rocket-propelled experimental aircraft across the Mojave Desert, taking off from the Mojave Air and Spaceport, just as the XB-1 did. Before today's sound barrier breaking flight,

the XB1 underwent 11 test flights. The aircraft includes features like an augmented reality system to make takeoff and landing easier and has a long nose that makes it easier for pilots to see the runway during those stages. The Jets aerodynamics are based off thousands of simulations, the company said creating a design that it says combined safe and stable operation at takeoff and landing with efficiency at supersonic speeds. The jet is also made almost entirely from carbon fiber composite materials which create a strong lightweight structure. The company said the goal for the plane is for it to be able to carry between 64 and 80 passengers at Mach 1.7 or 1,295 miles per hour.

Existing subsonic airliners fly at between 550 and 600 miles per hour, according to charter company Bitlux, end quote. In other words, the rebirth of the Concord. Nothing additional for you today. Talk to you tomorrow.