Tech Brew Ride Home - Wed. 04/16 – Why Does OpenAI Want A Social Network?

Episode Date: April 16, 2025

Well, it looks like DOGE has finally come for cybersecurity. It sounds like the tariff stuff is already biting Nvidia to the tune of $5 billion. Why is OpenAI building a social network? The government would have settled the antitrust case with Meta to the tune of $30 billion. And why did Mark Zuckerberg consider spinning off Instagram voluntarily? Sponsors: SelectQuote.com/ride Links: Uncle Sam abruptly turns off funding for CVE program. Yes, that CVE program (The Register) Nvidia says it will record $5.5 billion charge tied to H20 processors exported to China (CNBC) OpenAI is building a social network (The Verge) Figma confidentially files for IPO more than a year after ditching Adobe deal (CNBC) Inside Mark Zuckerberg’s Failed Negotiations to End Antitrust Case (WSJ) Zuckerberg Says He Considered Spinning Off Instagram in 2018 (Bloomberg) 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, April 16th, 2025. I'm Brian McCullough today. Well, it looks like Doge has finally come for cybersecurity. It sounds like the tariff stuff is already biting Nvidia to the tune of $5 billion. Why is Open AI building a social network? The government would have settled the antitrust case with meta to the tune of $30 billion. And why did Mark Zuckerberg consider spinning off Instagram voluntarily? Here's what you missed today in the world of tech. Quick note, right as I was a about to hit publish on the whole episode, this news hit. The CISA says it will extend funding to MITRE, which runs the CVE program and, quote, there will be no lapse in critical CVE services.

What does that even mean? I'm about to tell you, because since the show has already been edited, even though this news story is now in theory different, though, who knows these days we shall see, right? I'm going to go ahead and give you the original segment as I recorded it right here, so you will have the full context of the whole brouhaha. MITR, the nonprofit research organization behind the Common Vulnerabilities and Exposures Program, or CVE, says the U.S. government funding needed to develop and operate CVE will expire on April 16th.

Quoting aid funk Ebola, let me explain what that means to the uninitiated. Miter is a government organization that contains repositories of all of the vulnerabilities that have been exposed, slash exploited so far. It is through this repository that antivirus and other malware detectors are based on, end quote. Quoting Reuters. Reuters couldn't establish the reason for the contract's lapse, but CISA is like the rest of the federal government undergoing a radical downsizing driven in part by tech tycoon Elon Musk's U.S. Doge service. A spokesperson for Doge didn't immediately reply to an email. Cyber defenders said they were aghast at the news of the program's lapse. One compared

it to suddenly deleting all dictionaries. We'd lose the language and lingo we use to address problems in cybersecurity, said John Hammond, the principal security researcher at Managed Security Company Huntress. He said he swore out loud when he heard the news. I really can't help but think this is just going to hurt, end quote. Quoting at Slightly Flighty One, this is some of the worst news in cybersecurity history, the global database for documenting security vulnerabilities that systems administrators and IT professionals used to ensure systems are secure is funded by the U.S. government. Its funding was not renewed. It will run out of money in two days, end quote. And quoting, at stimulus functions. So like when the meteorologists all struggled to tell you how

bad the defunding of the NOAA was and could barely find the words, this is that bad, but for computer security, end quote. Quoting the register, U.S. government funding for the world's CVE program, the centralized common vulnerabilities and exposures database of product security flaws ends Wednesday. The 25-year-old CVEE program plays a huge role in vulnerability management. It is responsible for overseeing the assignment and organizing of unique CVE ID numbers such as CVE2014-0-160 and CVEE 2017-54 for specific vulnerabilities. In this case, open SSL's heartbleed and intel's melt down so that when referring to particular flaws and patches, everyone is agreed on exactly what we're talking about. It is used by companies big and small, developers, researchers,

the public sector, and more as the primary system for identifying and squashing bugs. When multiple people find the same holes, CVEs are useful for ensuring everyone is working toward that one specific issue. It basically works like this. When an individual researcher or an organization discovers a new bug in some product, a CVE program partner, there are currently a few hundred across 40 countries, is asked to assess the vulnerability report and assign a unique CVE identifier for the flaw if and as necessary. The program is sponsored and largely funded by the cybersecurity and infrastructure security agency, aka CISA, under the umbrella of the U.S. Department of Homeland Security. I can say that having been in this industry for longer than

CVEs themselves, it won't be good, Dustin Child's head of threat awareness at Trend Micro's Zero Day Initiative told the register. Before CVEs, each company referred to vulnerabilities using their own vernacular, he added. Customers were confused about whether they were protected or impacted from a particular bug. And there was a time when there were much fewer companies and infinitely fewer bugs, end quote. To put this in perspective, more than 40,000 new CVEs were published last year. If MITR were to lose funding for the CVE, we can expect considerable confusion again until someone else picks up the flag. continued, noting that this would require some sort of industry consortium, but nothing along

those lines currently exists. While the whole world's vulnerability management efforts aren't going to descend into chaos overnight, there is a concern that in a month or two they may. The lack of U.S. government funding means that unless someone else steps in to fill the gap, this standardized system for naming and tracking vulnerabilities may falter or shut down. New CVEs may no longer be published and the government website may go offline. Not-for-profit outfit MITRP has a contract with the U.S. Department of Homeland Security to operate the CVE program, and on Tuesday, the group confirmed this arrangement has not been renewed. This comes as the Trump administration scours around the federal government for cost to trim, and quote. So who will jump in to fill the breach?

Well, CVE board members have apparently launched the CVE Foundation, a dedicated nonprofit to continue identifying vulnerabilities. But where will the funding for that come from? Well, likely from industry, right? Quoting friend of the pod, Gergaly Oros. I guess one lesson is, how not to trust government-funded non-profits for critical infra looking ahead, even if the critical infra helps said country greatly. But trust for-profit companies to fund it instead? Hard question, end quote. And quoting Mac Rumors. The newly established CVE Foundation aims to transition the program to a dedicated nonprofit model that isn't dependent on a single government sponsor. The foundation's organizers revealed they had been preparing for this possibility for the past year. For the

The international cybersecurity community, this move represents an opportunity to establish governance that reflects the global nature of today's threat landscape, the foundation stated in its announcement. The funding cut also affects the related common weakness enumeration or CWE program, which helps companies like Apple identify potential security issues before they become vulnerabilities. The CVE Foundation is expected to release more details about its structure and funding plans in the coming days. Apple and other major tech companies will likely play a significant role in supporting it as a critical part of cybersecurity infrastructure, end quote. Invidia says it will record a $5.5 billion quarterly charge after new U.S. rules will require

a license to export their H20 chips to China. Invidia is down around 5.5% this morning as I write this, quoting CNBC. The disclosure is the strongest sign so far that Nvidia's historic growth could be slowed by increased export restrictions on its chips, which the U.S. government says can be used to create supercomputers for military uses. V-Vidia is scheduled to report fiscal first quarter results on May 28. NVIDIA's CEO Jensen Huang said on the company's last quarterly earnings call in February that revenue from China had dropped to half of pre-export control levels.

Wang warned that competition in China is growing, and for the second straight year, NVIDIA listed Huawei as a competitor in its annual filing. China is NVIDIA's fourth largest region by sales after the U.S., Singapore, and Taiwan, according to the company's annual report. more than half of its sales went to U.S. companies in its fiscal year that ended in January. NVIDIA said in Tuesday's filing that the U.S. government told the company on Monday that the license requirement for H20 chips would be in effect for the indefinite future. NVIDIA shares have dropped 16% this year largely due to President Donald Trump's announcement

of widespread tariffs on top trading partners. While exemptions have been made on various electronics products, including smartphones, computers, and semiconductors, Trump and some officials said over the weekend that the reprieve was temporary and part of plans to apply separate tariffs to the chips sector, end quote. Sources say open AI is in the early stages of building its own X-like social network, focused on chat GPT image generation and is asking some outsiders for feedback. This does make a ton of sense. The main virality of AI stuff from the very beginning of the chat GPT moment has been on

social, and AI image generation lends itself. to memes, as we've seen, right? So why not own the distribution of your marketing arm? Quoting the verge. It's unclear if OpenAI's plan is to release the social network as a separate app or integrate it into chat GPT, which became the most downloaded app globally last month. An OpenAI spokesperson didn't respond in time for publication. Launching a social network in or around chat GPT would likely increase Sam Altman's already bitter rivalry with Elon Musk. entering the social media market also puts OpenAI on more of a collision course with Meta, which we're told is planning to add a social feed to its coming standalone app for its AI assistant.

When reports of Meta building a rival to the ChatGPT app first surfaced a couple months ago, Altman shot back on X saying, Okay, fine, maybe we'll do a social app. A social app would also give OpenAI its own unique real-time data that X and Meta already have to help train their AI models. Musk's GROC surfaces content from X in its results. Musk recently went so far as to merge X and XAI into the same company, while META trains Lama on its vast trove of user data.

One idea behind the Open AI social prototype is to have AI help people share better content. The GROC integration with X has made everyone jealous, says someone working at another big AI lab, especially how people create viral tweets by getting it to say something stupid, end quote. We have another one. Figma has confidentially filed for a U.S. IPO more than a year after Adobe's $20 billion acquisition of the company failed. The company was valued at $12.5 billion back in a May 2024 tender offer, quoting CNBC. The announcement lands at a precarious moment for the tech IPO market, which has been largely dormant since late 2021. The Trump presidency was expected to revive new

offerings due to promises of less burdensome regulations. But after filing their prospectacies with the SEC FinTech Company Clarna and online ticket marketplace stub hub delayed their IPOs earlier this month, following the market turmoil caused by Trump's announcements of widespread tariffs, digital banking service chime, which had filed confidentially with the SEC, also postponed its planned offering, end quote. More deets from the meta-antitrust trial. Sources are telling the journal that Meta offered 450. million dollars back in late March in an attempt to settle the FTC's case against them and then raised that offer to around a billion dollars as the trial neared. But that never got traction because

checking notes here, the FTC wanted $30 billion. Quite a distance between those two. Mark Zuckerberg called the head of the Federal Trade Commission in late March with an offer. Metta would pay $450 million to settle a long-running antitrust case that was about to go to trial. the offer was far from the $30 billion that the FTC had demanded. It was also a fraction of the value of Instagram and WhatsApp. The two apps meta had bought and were at the heart of the government's case. On the call, Zuckerberg sounded confident that President Trump would back him up with the FTC, said people familiar with the matter. The billionaire Facebook co-founder had been developing closer ties to Trump. His company donated $1 million to Trump's inauguration and settled a $25 million lawsuit and had been pressing the president in recent weeks to intervene in the Monopoly lawsuit. FTC Chairman Andrew Ferguson found the offer not credible and wasn't ready to settle for anything less than $18 billion and a consent decree. As the trial approached, META upped its offer to close to $1 billion, the people said, and Zuckerberg led a frenzied lobbying effort to avoid the FTC trial. It wasn't enough. On Monday, the trial kicked off. The

FTC called Zuckerberg, who privately expressed reluctance about taking the stand to testify for four hours. As the trial approach, the two sides had inched closer together. Meta had opened with an offer to make changes to some of its policies. The FTC countered with $30 billion. People familiar with the talk said, a fine that would be an order of magnitude larger than its record. In 2019, the FTC had imposed a $5 billion fine on Meta. At the time, its largest fine ever imposed on a company for violating consumer privacy. In recent months, Zuckerberg and his top aides have repeatedly met with Trump, White House chief of staff, Susie Wiles, and other administration officials. White House aides say META has been relentless in trying to get the case dropped, bringing in a group of officials

beyond Zuckerberg that include META chief global affairs officer Joel Kaplan, head of U.S. public policy, Kevin Martin, and Brian Baker, Zuckerberg's outside political advisor. Zuckerberg himself visited the White House three times this year. Trump, at various points, appeared more open to striking a deal with META and Zuckerberg, directing staff to work on a deal and asking questions about how a settlement would work, according to people familiar with the matter. But Trump was also getting an earful from the other side. On April 8th, the new FTC chair, Ferguson, held a meeting with the president in the Oval Office to discuss the matter. Also present at the meeting were Gail Slater, the head of the Justice Department's antitrust division, Mike Davis, one of the key

antitrust advisors to Trump, Wiles and Ferguson's chief of staff. At the meeting, earlier reported by Semaphore, the group made its case for Trump not to intervene on Meda's behalf and to let the case go to trial. It got Trump's blessing to go to trial during the meeting, said one of the people, end quote. Then quoting from Bloomberg. On Monday, Zuckerberg was questioned for more than three hours, primarily about the Instagram acquisition and his company's failed attempt to build a rival photo sharing product back in 2011 and 2012. Lawyers for the FTC brought forward dozens of old emails and documents that showed how Facebook struggled to compete with Instagram's rapid growth and ultimately acquired the startup instead. Zuckerberg was worried Instagram would grow big

enough to copy some of Facebook's social networking features, emails showed. On Tuesday, Zuckerberg was presented with more emails outlining his motives for both deals. Messenger isn't exactly beating WhatsApp. Instagram was growing so much faster than us that we had to buy them for $1 billion. Zuckerberg wrote in a November 2012 email to then chief operating officer Cheryl Sandberg. That's not exactly killing it. When asked by Matheson whether he would have preferred to build an Instagram-like service in-house, Zuckerberg responded, I guess so. One billion dollars is very expensive. He acknowledged that even if meta had built a rival product, quote, how it would have done is a matter of speculation, end quote. And an email surfaced in the trial that suggested Zuckerberg

offered to buy Snapchat for $6 billion in 2013. Zuckerberg testified that he thought Snapchat, quote, wasn't growing at the potential that it could. But what I found most interesting was the email that came out suggesting Zuck considered spinning off Instagram in 2018 as a separate company as he increasingly became concerned that its success was hurting the Facebook social network. This jives with stuff that I've heard from meta folks over the years. It's ironic. This trial is all about how Zuck grew so big by buying up other social networks, but even though he's probably glad he did that strategically on some level, according to folks, multiple folks I've heard over the years, ego-wise, he resents the fact that the social network he built,

is no longer King of the Hill, no longer relevant, no longer killing it, if you will, quoting Bloomberg. Zuckerberg acknowledged that he thought meta may be broken up in the next five to ten years, and it was worth exploring whether they should get ahead of this possible outcome. When explaining his thinking in court, Zuckerberg said he needed to take into account the direction that the politics seemed to be going at the time. In May 2018, Zuckerberg wrote to his senior leaders, quote, I'm beginning to wonder whether spinning Instagram out is the only structure that will accomplish a number of important goals. One of the benefits he wrote was reducing the strategy tax of trying to coordinate the two apps and keep them working in tandem. Another benefit would be to

quote, immediately stop artificially growing Instagram in a way that undermines the Facebook network, he continued. At the same time, Facebook would show users if a photo they were seeing on their newsfeed originated in Instagram and linked to the app. At one point, he ordered executives to put more ads on Instagram so that Facebook was not carrying so much of the business load. He also stopped doing some in-app promotions for Instagram on Facebook to stop sending user traffic from the company's core social network to Instagram, the document show. Again, I'm not saying we should actually do this now, he wrote, but as we consider it, we should keep in mind that there's a real chance that all our work to build a family of apps may be something we don't get to keep, end quote.

When I tell you the weather out here in Colorado is wild, this is what I mean. We had 70-degree weather a couple days ago, and yet in a couple days from now, it's going down to 16-degree. overnight, and we're basically going to be snowed in as six inches of snow is scheduled for Friday. Wild. If you want to see some pictures from our adventures so far, check out my Twitter or Blue Sky account. We climbed a dang mountain yesterday. Climmed a mountain and then turned around because we saw our reflection in the snow covered. Okay. Enough with the 70s lyrics to make jokes about this trip. Talk to you tomorrow.