Tech Brew Ride Home - Wed. 04/23 – Meta And Apple Fined By The EU

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 TechMean right home for Wednesday, April 23rd, 2025. I'm Brian McCullough today. That delayed action from the European Commission finally came down on Apple and meta. Would OpenAI be a logical home for the Chrome web browser? Massive layoffs coming to Intel, any sphere turned down an acquisition offer from OpenAI, and are the TerraForce coming for Elon Musk's robots? Here's what you miss today in the world of tech. The European Commission has fined Apple 500 million euro and meta 200 million euro under the DMA and issued cease and desist orders to both companies. Apple and meta say they will appeal, but perhaps more importantly, this, quoting the journal.

Starting point is 00:01:18 The Commission also issued cease and desist orders against both companies, which target business practices that are an important part of their revenue streams and could have a bigger impact than the fines. It ordered Apple to remove what it said were technical and commercial restrictions on app developers' ability, to inform users about cheaper and alternative ways to buy digital products outside the company's app store. The commission also said it is still evaluating whether an option meta has for several months given European users to see less personalized ads on Instagram and Facebook without paying a subscription fee complies with the cease and desist order, raising the specter of further changes. The EU fine covers a period last year when meta required European users to agree to seeing personalized ads on those apps or pay for an ad-free subscription.

Starting point is 00:02:03 The actions against both companies come under the EU's Digital Markets Act, a law pass in 2022 that seeks to make it easier for smaller companies to compete with global tech behemus. Breaches of the law carry a potential fine of up to 10% of a company's global annual revenue. The fines issued Wednesday were far below that level around 0.1% of each company's annual revenue, end quote. And quoting the verge. Apple's controversial core technology fee or CTF applies to developers who want to distribute their apps on third-party app marketplaces and use alternative payment options. Apple has been

Starting point is 00:02:35 forcing developers to pay 50 euro cents for each annual app install after 1 million downloads, a pricey commission, particularly for smaller developers. Apple did make more developers exempt from its alternative app store tax last year, allowing developers of free apps without monetization to avoid the fee. While the CTF is an issue for the European Commission, the fiddly process of installing alternative app marketplaces and associated apps are also a concern. for the commission. Apple makes it overly burdensome and confusing for end users to install apps when using such alternative app distribution channels, says the European Commission in a statement. Apple has now been sent the Commission's preliminary findings and will have time to respond to

Starting point is 00:03:14 the findings before a final decision is made. The European Commission has also closed its investigation into the iPhone's browser choice screen today, ruling that changes Apple made to its iOS satisfy its antitrust obligations. The probe into Apple's default browser choice screen was launched in March 2024, and Apple introduced several changes in iOS17.4 to comply with the MA requirements, including opening up its system to other browser engines besides its own WebKit engine and directly prompting users to choose their own default browser, end quote. If, in the USV Google case, Google is forced to sell off its Chrome web browser, OpenAI's chat GPT chief Nick Turley says the company would be interested in buying it.

Starting point is 00:04:01 Quoting Bloomberg, yes we would, as would many other parties, Nick. Turley, OpenAI's ChatGPT chief said in response to a question about whether the company would seek to buy Google's browser. Turley was called by the Justice Department to testify as part of a three-week trial aimed at determining what changes Alphabet's Google must make to its business after a federal judge found last year that the company monopolized the search market. Judge Amit Metup is set to decide by August what business practices Google must modify. The Justice Department has asked that Google be forced to divest Chrome. Currently, OpenAI's chatbot, ChatTPT, has an extent. in Google's Chrome browser available for users to download, but having Chrome be more deeply

Starting point is 00:04:39 integrated into OpenAI would allow for a better product, Turley said. You could offer a really incredible experience if ChatGPT was integrated into Chrome, he said. We would have the ability to introduce users into what an AI-first experience looks like. Turley said one of the company's most difficult issues today is with distribution. While the company has reached a deal to integrate ChatGPT into Apple's iPhone, it hasn't had any success with Android smartphone manufacturers, he said, end quote. Also from the trial, Turley also said that Google declined to let OpenAI access its search index. That is noteworthy because another proposed DOJ remedy would be to let Google's rivals access the index.

Starting point is 00:05:19 Quoting Bloomberg, OpenAI's goals of building a super assistant app and reaching general artificial intelligence won't succeed without search technology, but Google has declined to work with the startup. the head of its chat GPT product testified Tuesday in the Google antitrust trial. Opening eyes, Nick Turley said the company never intended to simply create a chatbot like its popular chatGPT and instead wanted to deliver a superassistant that can help users complete tasks. But the large language models that underline the company's chatbot have inherent limitations because of a lack of recent information and their tendency to hallucinate or invent false answers to questions when they don't know the answer.

Starting point is 00:05:54 That's where search capability becomes essential, he said. Search technology is a necessary component to early testified in Washington federal court as part of the Justice Department's antitrust case against Alphabet's Google. You can't have a superassistent that doesn't know the current facts or makes things up. We are not trying to recreate the type of experience you find on Google with 10 blue links and ads, he said, end quote. Sources say Intel is set to unveil plans this week to cut more than 20% of staff. its first major restructuring under new CEO Lipbut Tan. Intel had 108,900 workers in December 2024, quoting Bloomberg. Intel shares rose as much as 3.5% in pre-market trading before New York exchanges opened on Wednesday. The stock has declined about 43% in the past 12 months and closed

Starting point is 00:06:49 at $19.51 on Tuesday. Tan is aiming to turn around the iconic chipmaker after years of Intel seating ground to rivals. The Santa Clara, California-based company, its technological edge and has struggled to catch up with Nvidia and artificial intelligence computing that contributed to three straight years of sales declines and mounting red ink. Tan, a veteran of Cadence Design Systems, has vowed to spin off Intel assets that aren't central to its mission and create more compelling products. Last week, the company agreed to sell a 51% stake in its programmable chips unit, Altera, to Silver Lake Management, a step toward that goal.

Starting point is 00:07:23 Intel needs to replace the engineering talent it has lost, improve its balance sheet, and better attune manufacturing processes to the needs of potential customers, Tan said last month at the Intel Vision Conference, end quote. And quoting Tech Radar. Intel had a particularly troubling fourth quarter with revenue dropping 7% year-over-year. The full 12-month period wasn't especially positive either, with a 2% year-over-year decrease in revenue to $53.1 billion. The cost reduction plan we announced last year to improve the trajectory of the company

Starting point is 00:07:53 is having an impact. CFO David Zinsner explained, Intel shares are down 43% over the past year alone with the company currently sitting at a market cap of 85.07 billion. To put that in perspective, AMD's total valuation is currently 140.14 billion. And Nvidia is the third most valuable company in the world and one of only eight to measure its market cap in trillions, not billions, at 2.412 trillion, end quote. A startup called Neri Labs has unveiled Dia, a 1.6 billion parameter text-to-speech model designed to produce naturalistic dialogue directly from text prompts built with what they are calling zero funding, quoting Venture Beat. The two-person startup claims it surpasses the performance of competing proprietary

Starting point is 00:08:44 offerings from the likes of 11 Labs and Google's hit Notebook LMI podcast generating product. It could also threaten uptake of OpenAI's recent GPT40 Mini TTS. Dia rivals Notebook LMs podcast feature while surpassing 11 Labs Studio and Sesame's Open Model in quality, said Toby Kim, one of the co-creators of Neri and Dia, on a post from his account on the Social Network X. In a separate post, Kim noted that the model was built with zero funding and added across a thread. We were not AI experts from the beginning. It all started when we fell in love with Notebook LM's podcast feature when it was released last year. We wanted more, more control over the voices, more freedom in the script. We tried every TTS API on the market. None of them sounded like real human conversation. Kim further credited Google for giving him and his collaborator access to the company's tensor processing units or TPUs for training DIA through Google's research cloud. DIA's code and waits, the internal model connection set, is now available for download and local deployment by anyone from Hugging Face or GitHub. Individual users can try generating speech from it on a hugging face space.

Starting point is 00:09:51 Nari offers a host of example audio files generated by DIA on its Notion website, comparing it to other leading text-to-speech rivals, specifically 11 Lab Studio and Sesame CSM-1B, the latter a new text-to-speech model from Oculus VR headset co-creator Brendan Eribe, yet went somewhat viral on X earlier this year. Side-by-side examples shared by Nari Labs show how Dia outperforms the competition in several areas. In standard dialogue scenarios, Dia handles both natural timing and non-verbal expressions better. For example, in a script ending with laughs, Diaa interprets and delivers actual laughter,

Starting point is 00:10:27 whereas 11 Labs and Sesame output textual substitution, like ha ha, end quote. Here you go with an actual example. Here's a sentence produced by 11 Labs. Dia is an open weights text to dialogue model. You get full control over scripts and voices. Wow. Amazing. Try it now on GitHub or hugging face.

Starting point is 00:10:50 And here's the same sentence from Dia. DIA is an open weights text to dialogue model. You get full control over scripts and voices. Wow. Amazing. Try it now on GitHub or Hugging Face. TechCrunch has sources who say that. Curser Maker AnySphere has reached around $300 million in annual recurring revenue and declined an acquisition offer from OpenAI, which is now trying to buy rival WinSurf, which has $100 million in ARR instead. Quoting TechCrunch,

Starting point is 00:11:26 the company previously walked away from early acquisition discussions with OpenAI after the chat GPT maker approached cursor, the two sources close to the company confirmed and CNBC previously reported. AnySphere has also received other acquisition offers that the company didn't consider, according to one of these sources. Curser turned down the offers because the startup wants to stay independent, said the two people close to the company. Instead, AnySphere has been in talks to raise capital at about a $10 billion valuation. Bloomberg reported last month, although it didn't nab any sphere. OpenAI didn't give up on buying an established AI coding tool startup. OpenAI talked with more than 20 others. CNBC reported. And then it got serious over the next

Starting point is 00:12:06 fastest-growing AI coding startup, WinSurf, with a $3 billion acquisition offer Bloomberg reported last week. While WindSurf is a comparatively smaller company, its ARR is about $100 million up from $40 million in ARR in February, according to a source. WindSurf has been gaining popularity with the developer community, too, and its coding product is designed to work with legacy enterprise systems. WindSurf did not respond to TechCrunch's request for comment. OpenAI declined to comment on its acquisition talks. OpenAI is likely shocked. because it's looking for its next growth areas, as competitors such as Google's Gemini and China's Deepseek put pricing pressure on access to foundational models. Moreover, Anthropic and Google

Starting point is 00:12:46 have recently released AI models that outperform OpenAI's models on coding benchmarks, increasingly making them a preferred choice for developers. While OpenAI could build its own AI coding assistant, buying a product that is already popular with developers means the chat GPT maker wouldn't have to start from scratch to build this business, end quote. other AI experts and 10 former OpenAI staff have written to the California and Delaware Attorneys General opposing OpenAI's for-profit restructuring, echoing Elon Musk's previous arguments, quoting the F.T. The signatories argue that the proposed restructuring would transfer control of the development of artificial general intelligence or AGI, computer systems with

Starting point is 00:13:31 equal or superior cognitive abilities to most humans, to a company driven by profits. They added that this contradicts OpenAI's founding mission of ensuring that AGI benefits all of humanity rather than the private gain of any person. I would like OpenAI to execute that mission instead of enriching their investors, said Hinton a noble laureate and professor at the University of Toronto. The intervention brings further attention to Open AI's controversial plan to transform into a for-profit entity by the end of this year. Without the switch, the San Francisco-based company led by chief executive Sam Altman risks forfeiting some of its recent $30 billion investment from SoftBank, as well as additional contributions from investors in previous rounds. OpenAI, which is now valued

Starting point is 00:14:13 at $300 billion, has argued that at a time when rivals such as Google and Meta are investing hundreds of billions of dollars to develop the technology, its investors need conventional equity and less structural bespokenness to commit further capital. But Page Headley, one of the former Open AI employees to have signed the letter opposing its conversion said, competing is not Open AI's mission. By all accounts, it has already been extraordinarily successful at raising money. He added, under the PBC, the board would not have a fiduciary duty to the beneficiaries of the mission, the public. And if the board does not fulfill its fiduciary duty to shareholders, they would have recourse, end quote. Finally today, tariff watch. Tesla had some bad earnings announced

Starting point is 00:15:04 yesterday, though that's a bit outside our remit. This, however, is worth noting. Elon Musk says production of Tesla's humanoid robot optimus is affected by China's recent restrictions on exports of rare earth minerals used in magnets, quoting Bloomberg. Tesla's production of optimus, a robot that promises to take over household chores, has been disrupted by China's curbs on rare earth exports introduced by Beijing earlier this month in an escalating trade war with Washington. Speaking on the company's earnings call on Tuesday, Chief Executive Officer Elon Musk said production was impacted by the magnet issue. While weeks of delays are expected, as exporters grapple with tighter permit requirements for the key ingredients, Tesla is one of the

Starting point is 00:15:44 highest profile buyers so far to flag the direct consequence of the change. We're working through that with China. Hopefully, we'll get a license to use the rare earth magnets, said Musk, who is also an advisor to the White House. China wants some assurances that these are not used for military purposes, which obviously they're not. They're just going into a... humanoid robot. Beijing added seven rare earth minerals to its export control list in response to the increasingly punitive tariffs imposed by U.S. President Donald Trump. It said restrictions were required given rare earths are considered dual-use items, minerals with civilian but also military applications. The minerals, while niche, have vital uses across optical laser technology, radar devices,

Starting point is 00:16:25 magnets for wind turbines, jet engine coatings, and other advanced technologies. Chinese robot-related stocks climbed following Tesla's earnings call with UB Tech Robotics Corp Horizon Robotics, Inc. Jai Zhang, Changs, Slighting Bairings Company, and Jiangsu Pacific Precision Forging Company, jumping more than 10%. Rare Earth minerals maker J.L. Magr rare earth companies' shares also surged more than 10%. Musk also weighed in on the impact of tariffs, saying Tesla's energy business is the most impacted. The impact of tariffs on the energy business will be outside. since we source LFP lithium-iron phosphate battery cells from China, he said in the earnings call. We're in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S., he said,

Starting point is 00:17:12 adding that Tesla has been working to secure supply from non-China-based suppliers, but the process will take time, end quote. Nothing more for you today. Talk to you tomorrow.

Tech Brew Ride Home - Wed. 04/23 – Meta And Apple Fined By The EU

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