Tech Brew Ride Home - Wed. 11/29 – Apple And Goldman Part Ways

Episode Date: November 29, 2023

Apple and Goldman are ending their partnership, so what does that mean for the Apple Credit Card? Stability AI is so unstable, it might be looking to sell itself. GM is pumping the breaks on its Cruise rollout. All the headlines from the big AWS conference yesterday. And it’s that time of year: what won your Spotify Wrapped listening charts? Sponsors: DragonBall Legends Miro.com/podcast Links: Apple Pulls Plug on Goldman Credit-Card Partnership (WSJ) Unity Software with a ‘company reset’ walks away from film VFX and the Wētā Deal. (FXGuide) Stability AI Has Explored Sale as Investor Urges CEO to Resign (Bloomberg) G.M. to Cut Spending on Cruise Self-Driving Unit (NYTimes) Amazon Introduces Q, an A.I. Chatbot for Companies (NYTimes) Inside Spotify Wrapped, an Annual Song of Ourselves (WSJ) 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 TechMeme right home for Wednesday, November 29th, 2023. I'm Brian McCullough today. Apple and Goldman are ending their partnership. So what does that mean for the Apple credit card? Stability AI is so unstable. It might be looking to sell itself. GM is pumping the brakes on its cruise rollout. All the headlines from the big AWS conference yesterday. And it's that time of year. What won your Spotify-wrapped listening charts? Here's what you missed today in the world of tech. The journal says that Apple plans to exit its Goldman's, Sacks's contract in 12 to 15 months, ending their consumer partnership, including for credit card and savings accounts. Quote, the tech giant recently sent a proposal to Goldman to exit from the contract

in the next roughly 12 to 15 months, according to people briefed on the matter. The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019, and the savings account rolled out this year. It couldn't be learned whether Apple has already line up a new issuer for the card. The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman's Main Street ambitions, end quote. The retreat from this partnership began towards the end of the previous year when Goldman incurred substantial losses in its attempt to establish a full-service consumer banking operation by early this year, Goldman informed Apple of its intention to

offload the partnership. Typically, the merchant, in this case Apple, plays a leading role in such collaborations. Goldman has explored the possibility of transferring the program to American Express, but discussions have encountered concerns including high loss rates. It remains uncertain whether these talks are ongoing. Synchrony Financial has also expressed interest in taking over the credit card program. Synchrony is the largest issuer of store credit cards in the U.S. and has sought to establish strong ties with tech companies counting Amazon and PayPal among its major card partners. For Apple, this development represents a setback for its services business, which it increasingly relies on as iPhone sales slow down. However, the Goldman Partnership likely constitutes

a small portion of its revenue stream. In contrast, Goldman had hoped the partnership would help diversify its business away from serving corporate clients and the wealthy, but its failure marks a significant step back. Goldman is now refocusing on its core clients. Goldman has also decided to end its credit card partnership with General Motors and is selling Green Sky, a home improvement loan specialist. Additionally, it has stopped originating personal loans. The relationship between Goldman and Apple had a rocky start with disagreements over card approval rates, billing cycles, and regulatory scrutiny. More gaming industry chaos, unity plans to cut 265 jobs or 3.8% of its staff and end its services deal with VFX company WetaFX.

to focus on, again, its core business and reset the company. Quoting FX Guide. It was just in December of 2021 that Unity completed its acquisition of Weta Digital's tools, pipeline technology, and engineering talent. This acquisition was said to be, quote, designed to empower the growing number of game developers, artists, and potentially millions of consumer creators with highly sophisticated content creation tools. As part of that deal, Unity welcomed Weta Digital's world-class engineering talent of 275 engineers who are known internationally for their architecting, building, and maintaining of Weta Digital Tools and Core Pipeline. At the same time, Weta Digital's Academy Award-winning VFX

moved into a standalone entity known as WetaFX under majority ownership by Sir Peter Jackson and helmed by CEO Prem Akaraju. At that time, they issued a statement saying, quote, Under the terms of the agreement, Unity acquired Weta Digital's Tools Pipeline, Technology, and Engineering Talent for $1.625 billion in a combination of cash in stock. Their press release continued stating, Unity will not be relocating employees with this acquisition and remain supportive and committed to Wellington, New Zealand. This week's announcement includes the termination of the professional services piece of an agreement Unity struck with Weta FX in 2021 after the purchase of the technology and engineering division. As a result, 265 employees whose jobs are related to the agreement will be laid off, the company said. Employees have only about a week to wrap up before their positions are terminated fully, end quote.

This is very interesting. Sources are telling Bloomberg that British AI startup Stability AI has held early stage talks with multiple companies about a sale, as executives face investor pressure over its finances, and it should be noted that Stability AI has had issues. quote, Stability AI, the British artificial intelligence startup behind the stable diffusion image generator has explored selling the company. The London-based firm has presented itself as an acquisition target in recent weeks and held early stage conversations with multiple companies according to several people familiar with the matter who asked not to be identified because the discussions were private. A deal is not imminent and the company could cut the process short

without selling, they said. The overtures underscore escalating tensions between stability once a venture capital darling and some of its largest investors. KOTU management called for chief executive officer Imad Mostaki to step down in a letter to management last month, some of the people said. The demand came just a year after KOTU helped lead a funding round that valued the startup at $1 billion. While several parties have expressed interest in the purchase of Stability AI, we are not trying to sell the company and are focused on releasing leading models, such as its

recent video generation product, a spokesperson for a stability said by email. Co2 wrote that Mostaki's leadership had prompted several senior managers to leave and placed the startup in a tenuous financial position, according to the people. One of the companies approached as a potential buyer was Cohere, a Canadian startup working on building technology that other businesses can use to create their own AI products, one of the people said. Cohere declined to engage in talks, according to that person. Stability raised $101 million in 2022 to reach unicorn status as investors were drawn to its software that could produce striking pictures in response to a few prompts. In October, it received an investment of just under $50 million in the form of a convertible note from Intel. The company is spending significant amounts of money to grow its business. At the time of its deal with Intel, stability was spending

roughly $8 million a month on bills and payroll and earning a fraction of that in revenue, two of the people familiar with the matter said. It made $1.2 million in revenue in August and was on track to make $3 million this month from software and services, according to a post-Mostaki wrote on Monday on X, the platform formerly known as Twitter, the post has since been deleted. Over the last year, Stability AI embarked on a hiring spree, recruiting researchers from bigger technology companies to release its open-source software at a rapid clip, yet several senior hires quickly departed, driven away by a disorganized culture under Mastaki, a former hedge fund employee, and crypto entrepreneur Bloomberg News reported in August, end quote.

Is Waymo about to be the only major self-driving project left standing? GM CEO Mary Barra says the company plans to slow cruises expansion and significantly cut spending at the self-driving unit in response to safety concerns, quoting the times. The company had been planning to roll out a ride service in San Francisco and three other cities and begin testing cruise vehicles on the streets of several other markets. It now plans to focus on only one city, as it works to improve. the operation of its fleet of driverless vehicles it has been testing. We expect the pace of Cruz's expansion to be more deliberate when operations resume resulting in substantially lower spending in 2024 than in 2023, GM's chief executive Mary T. Barra said, Wednesday at an investor conference. We must rebuild trust with regulators at the local state and federal levels, as well as with the first responders and the communities in which Cruz will operate, she said,

and quote. California regulators recently suspended Cruz's license to operate in the state following a pedestrian incident involving one of its self-driving vehicles in San Francisco. The incident involved a cruise autonomous vehicle running over a pedestrian who had already been struck by another car and dragging her for 20 feet. In response, Cruz withdrew all its driverless vehicles from the roads, emphasizing the need to regain public trust. Barra expressed optimism about Cruz's future while acknowledging the need for safety, transparency, and accountability. However, she did not specify the impact of reduced spending on Cruise's workforce, as more details are awaited after independent safety report.

on the San Francisco incident are reviewed. Cruise was founded in 2013 and acquired by GM in 2016. Cruise has conducted self-driving taxi tests in various cities, including San Francisco, Phoenix, Houston, and Austin, and has also tested its autonomous vehicles and several other locations. In August, California regulators allowed Cruz and Waymo to offer their driverless services around the clock in San Francisco after operating on a limited scale for over a year. However, concerns have been raised by San Francisco officials, firefighters, and police officers regarding safety risks and traffic congestion, caused by Cruise's autonomous vehicles. Cruise also suspended an employee share buyback program and saw the resignation of its CEO,

Kyle Vogt, and Chief Product Officer Dan Kan. Amazon finally held that keynote at Reignite yesterday, and here's what was announced. The biggest news was the launch of Amazon Q, a workplace-focused AI assistant that starts at $20 per user per month, and competes with ChatGPT, Enterprise, Microsoft's co-pilot, and others. Quoting the Times. The chatbot developed by Amazon's cloud computing division is focused on workplaces and not intended for consumers. Amazon Q aims to help employees with daily tasks such as summarizing strategy documents, filling out internal support tickets, and answering questions about company policy. It will compete with other corporate chatbots, including co-pilot Google's

duet AI and chat GPT enterprise. Amazon built Q to be more secure and private than a consumer chatbot, Adam Silipski, the chief executive of Amazon Web Services, said. Amazon Q, for example, can have the same security permissions that business customers have already set up for their users. At a company where an employee in marketing may not have access to sensitive financial forecast, Q can emulate that by not providing that employee with such financial data when asked. Companies can also give Amazon Q permission to work with their corporate data that isn't on Amazon services, such as connecting with Slack and Gmail. Unlike Chad GPT and Bard, Amazon Q is. is not built on a specific AI model. Instead, it uses an Amazon platform known as Bedrock,

which connects several AI systems together, including Amazon's own Titan as well as ones developed by Anthropic and Meta. The name Q is a play on the word question, given the Chapot's conversational nature. Mr. Silipski said it's also a play on the character Q in the James Bond novels, who makes stealthy, helpful tools, and on a powerful Star Trek figure, he added. Pricing for Amazon Q starts at $20 per user each month. Microsoft and Google both charge $30 a month for each user on the enterprise chatbots that work with their email and other productivity applications. Amazon Q was one of a slew of announcements that the company made at its annual cloud computing conference in Las Vegas. It also shared plans to beef up its computing infrastructure for AI,

and it expanded a long-time partnership with Nvidia, the dominant supplier of AI chips, including by building what the company's called, the world's fastest AI supercomputer, end quote. Indeed. AWS yesterday also unveiled the Graviton 4 AI Focus chip with 50% more cores, 75% more memory bandwidth, and up to 30% more performance than Graviton 3 and Traynium 2 for up to 4x faster model training. They also announced plans to offer access to Nvidia's H200 chips, following Azure's similar dual-pronged approach for offering its own Maya chips as well as Nvidia's latest. And they launched guardrails into preview, a tool to help. companies implement safeguards for LLMs available for foundation models and agents on Amazon Bedrock. Finally, today as they do every year, Spotify this morning launched Spotify Rapt

2023, adding a new Me in 20203 feature to assign users 12 themes that describe their listening, available on mobile and desktop this time, quoting the journal. Spotify users will get an in-app notification to check out their Spotify wrapped. With each statistic, Spotify prompts users to share their lists in images made for social media. Users can listen to their top songs in a special playlist, as well as hear commentary about their favorites with Spotify's AI DJ feature. Spotify tends to add new tidbits for listeners with each year's wrapped, along with being available on computers. A new Me in 2023 feature assigns users one of 12 themes that describe their listening habits such as vampire for someone who likes to listen to, quote, emotional and atmospheric music.

This year, Taylor Swift dethroned Bad Bunny as the number one most streamed artist in the world. He held the title for the past three years. People streamed Swift's music 26.1 billion times amid her blockbuster world tour. While Swift was the top artist, the Miley Cyrus song of Flowers, was the most popular song globally with more than 1.6 billion streams. And in the U.S., last night, by Morgan Wallen was the top song, end quote. Not to be outdone, by the way, Apple Music has launched replay, but Sarah Perez and TechCrunch says it's not exactly as fun as Spotify wrapped, quote. The Apple experience available via a URL at replay.mucic.com will show you your top songs, albums, artists, genres, and other information about your listening history in 2023.

However, compared with Spotify's wrapped, what Apple's experience misses, is the creation of unique shareable experiences like Spotify's Audio Aura in 2021, or its listening personality feature in 2022. These sorts of features appeal to listeners' sense of self and interest in how they compare to other Spotify listeners. They're also custom-built for social sharing, for instance, last year's listening personalities. Each were given their own colorful cards that could be posted to a social media app like Instagram stories or message to friends. Their eye-catching, generally fun, and fall in line with cultural trends. Apple's year-end review instead relies on more standard metrics.

This year, Apple Music users can find out if they're in the top 100 listeners of their favorite artist or genre, and they can review year-end charts where they're met with few surprises. Taylor Swift is Apple Music's Artist of the Year, for example. The chart data highlights the biggest songs of the year across both Apple Music and Shazam, and for the first time, the songs that saw the most traction on Apple Music Sing, the company's karaoke-like sing-along feature in Apple Music. As ever, if this podcast was your top listen of the year, please share that on all the socials so people can learn about this show. Feel free to tag me in any posts you make. Talk to

you tomorrow.