Tech Brew Ride Home - Wed. 12/18 – Is Your Home Internet Router About To Be Banned?

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 Mean Right Home for Wednesday, December 18th, 2024. I'm Brian McCullough today. Is your home internet router about to be banned?

Starting point is 00:00:41 The U.S. has a new Chinese tech target, an AI dev kit from Nvidia, who actually buys the most chips from NVIDIA. Hollywood has flip-flopped on the whole theatrical release strategy, and why Instagram is officially King of the Hill at Meta. Here's what you miss today in the world of tech. The U.S. has a new tech target. Sources are telling the journal that U.S. officials are investigating Chinese router maker TPLink, which has an estimated 65% of U.S. market share

Starting point is 00:01:16 and could ban the sale of its routers in 2025. Quote, U.S. authorities are investigating whether a Chinese company whose popular home internet routers have been linked to cyber attacks poses a national security risk and are considering banning the devices. The router manufacturer TPLink established in China has roughly 65% of the U.S. market for routers. for homes and small businesses. It is also the top choice on Amazon and powers internet communications for the Defense Department and other federal government agencies. Investigators at the Commerce, defense, and justice departments have opened their own probes into the company, and authorities could ban the sale of T.P. Link routers in the U.S. next year, according to people familiar with

Starting point is 00:02:00 the matter. An office of the Commerce Department has subpoenaed T.P. Link, some of the people said. Action against the company would likely fall to the incoming Trump administration, which has signaled an aggressive approach to China. An analysis from Microsoft published in October found that a Chinese hacking entity maintains a large network of compromised network devices, mostly comprising thousands of TP-link routers. The network has been used by numerous Chinese actors to launch cyber attacks. These actors have gone after Western targets, including think tanks, government organizations, non-government organizations, and Defense Department suppliers, end quote. Many inside the industry whisper that TPLink routinely ships devices containing significant vulnerabilities while often reluctantly addressing security concerns.

Starting point is 00:02:49 Unlike other manufacturers who actively engage with the security community when flaws emerge, critics say TPLink, operating through its California-based U.S. division, has maintained a more defensive stance, though their spokespeople assert they evaluate and address security risks routinely. While these router vulnerabilities appear unrelated to the recent Salt Typhoon breaches that compromised eight U.S. telecom companies, clearly these concerns are related to that vulnerabilities in the endpoint of user networks. Senior cybersecurity official Ann Newberger announced plans to strengthen telecom supply chain security recently. A potential U.S. ban on TP-link routers would represent the most significant removal of Chinese telecom hardware since 2019

Starting point is 00:03:31 when the Trump administration mandated the elimination of Huawei technologies from American infrastructure. NVIDIA has announced something that could be super useful as a stocking stuffer for any developer in your life. It's the Jetson-Oren Nano Super Developer Kit, a $249 compact AI development board that promises 67 tops compared to 40 tops of the previous $49, last-generation kit. Quoting The Verge. The Jetson Nano line has been a low-cost way for hobbyists and makers to power AI and robotics projects since its introduction in 2019. Sort of like a Raspberry Pi, but for powerful AI processing, the tiny $249 computer packs more of an AI processing punch than the kit did before for half the price. It's available to buy now. The developer kit includes a reference carrier board and a Jetson Oran Nano 8 gigabyte system on a module comprised of an Nvidia Amper GPU with 10,000.

Starting point is 00:04:34 sensor cores and six-core arms CPU. NVIDIA calls the Nano-super developer kit an ideal solution for building chatbots or visual AI agents as well as AI-based robots, end quote. And quoting Tom's hardware. Dubbed the Jetson-Oren Nano-Super, this new single board computer promises 67 tops total operations per second for just $249 versus the 40 tops for $499 the prior board delivered. However, For, Nvidia says that users of its current gen boards, including the Orin Nano non-super, will also get performance boost of up to 70% when they install a new software update. For example, the Orin NX 16 gigabyte will jump from 100 to 157 tops, and the Orin NX 8 gigabytes will go from 70 to 117 tops.

Starting point is 00:05:22 The Jetson Orin Nanosuper features a six-core Arm Cortex A78AE CPU that runs at 1.7Gahertz and comes with 8 gigabytes of DRAM on its board. Its 120 megahertz GPU has 1224 Kuda cores and 32 tensor cores allowing it to deliver a maximum of 67 tops spares or 33 tops dense. The system can be powered over either USBC or a proprietary barrel connector, and for maximum performance it must be run at 25 watts. It has four USB 3.2 Type A ports that run at 10 GPs,

Starting point is 00:05:59 along with two MIPI-CSI camera connectors could work with a Raspberry Pi camera and both 2280 and 2230 M2 connectors for SSDs on the bottom. It also has a 40-pin GPIO that's compatible with Raspberry Pi outputs. In theory, you could use Raspberry Pi hats with the Nano. You can boot off an SSD, but you can also use a microSD card. The Nano is supposed to run L4T, a version of Linux that's made specifically to run, on NVIDIA's hardware, end quote. Hey, here's a fun parlor game. Who is buying all of those chips,

Starting point is 00:06:43 which have made NVIDIA the most valuable company in the world? Amdia estimates that Microsoft bought 485,000 of NVIDIA's Hopper GPUs in 2024. BightDance and Tenson bought around $230,000 each, meta bought $225,000, and Tesla slash XAI bought around $200,000. quoting the FTE, Amazon and Google, which along with meta are stepping up deployment of their own custom AI chips as an alternative to NVIDias, bought 196,000 and 169,000 hopper chips, respectively, the analyst said.

Starting point is 00:07:18 Microsoft bought twice as many of NVIDIA's flag chip chips as any of its largest rivals in the U.S. and China this year, as opening eye's biggest investor accelerated its investment in artificial intelligence infrastructure. With demand outstripping supply of NVIDIA's most advanced graphics processing units for much of the past two years, Microsoft's chip hoard has given it an edge in the race to build the next generation of AI systems. ByteDance and Tencent have emerged as two of Nvidia's biggest customers this year, despite U.S. government restrictions on the capabilities of American AI chips that can be sold in China. Tech companies around the world will spend an estimated $229 billion on servers in 2024, according to Omdia, led by Microsoft's $31 billion in capital expenditure and Amazon's $26 billion.

Starting point is 00:08:01 The top 10 buyers of data center infrastructure, which now include relative newcomers, XAI, and Corweave, make up 60% of global investment in computing power. Vlad Galabov, director of cloud and data center research at Omdia, said some 43% of spending on servers went to Nvidia in 2024. NVIDIA's GPUs claimed a tremendously high share of the server Kappex, he said, were close to the peak. While NVIDIA still dominates the AI chip market at Silicon Valley rival AMD, has been making inroads. Meta bought 173,000 of AMD's MI300 chips this year, while Microsoft bought

Starting point is 00:08:38 96,000 according to Omdia. Big tech companies have also stepped up usage of their own AI chips this year as they try to reduce their reliance on Nvidia. Google, which has for a decade been developing its tensor processing units or TPUs, and Meta, which debuted the first generation of its meta-training and inference accelerator chip last year, each deployed about 1.5 million of their own chips. Amazon, which is investing heavily in its Traneum and Inferentia chips for cloud-computing customers deployed about 1.3 million of those chips this year. Amazon said this month that it plans to build a new cluster using hundreds of thousands of its latest trainium chips for Anthropic and Open AI rival in which Amazon has invested $8 billion to train the next generation of its

Starting point is 00:09:20 AI models. Microsoft, however, is far earlier in its effort to build an AI accelerator to rival and videos with only about 200,000 of its Maya chips installed this year, end quote. Grubhub has settled with the U.S. FTC and Illinois Attorney General, accepting a $25 million fine for allegedly adding restaurants to its platform without consent and misleading users about order fees and drivers about pay. Quoting Reuters, the agency sought a $140 million judgment against the company, but reduced it to what Grubhub is able to pay, they said. If Grubhub is found to have misrepresented its financial position, the full penalty will apply. The food delivery platform hid fees until the last minute misled Grubhub

Starting point is 00:10:08 plus subscribers to believe they can avoid fees and blocked some customers from using their gift card balances according to the lawsuit. Drivers were told they could earn up to $26 an hour when in reality only the top 2% achieved those rates, the agency said, and thousands of restaurants were added to the platform without their consent, resulting in order delays and customer complaints, the FTC and Illinois said. For Grubhubb, these misrepresentations, are a quick and cheap way to add restaurant offerings and build scale, but Grubhub's deception, harms restaurants and diners alike, the agency said, end quote. You just couldn't escape hearing about this movie in recent months, so it's interesting to see

Starting point is 00:10:52 how it's actually done. Amazon says Red One had a record-breaking 50 million worldwide viewers in its opening weekend on Prime Video, which is interesting because Red One made just $32 million when it debuted in theaters in the U.S. last month. It was considered, maybe a bit of a miss box office-wise, but that's part of a larger strategy. More on that in a second, quoting variety. It's a December to remember for Prime Video. Per the streamer, the Dwayne Johnson and Chris Evans' Christmas flick Red One attracted a record-breaking 50 million worldwide viewers in its opening weekend on Prime Video measured over four days, becoming Amazon MGM Studios' most watched film debut ever on the streaming platform. It's a true Christmas miracle for the film,

Starting point is 00:11:39 a Santa-sized $250 million budget and opened to just $32 million in the U.S. last month. Amazon MGM, head of theatrical distribution, Kevin Wilson, hinted at the studio's justification for spending big without requiring a lot of ticket sales in return, telling variety in November. Whether or not people like it, the value of these movies is different for our business model. If we can put these movies out theatrically and cover our P&A, print and advertising costs, why wouldn't we? We're getting a massive marketing campaign that's being paid for before the film gets to streaming, end quote. And that's what I want to talk about. The idea of theatrical releases for movies just increasingly becoming a promo tour for the eventual streaming debut. Bread One is still playing globally on the big screen and over 3,000 screens in North America and 3,300 screens internationally.

Starting point is 00:12:32 This is part of a larger trend where Hollywood studios, or at least those with big streaming plays, now believe that releasing movies in theaters, promoted by expensive marketing and PR campaigns, can help make movies successful on their streaming platforms, something that Red One seems to be indicating. Quoting The Times, for much of the past decade, Hollywood executives striving to catch Netflix started believing that the only way to increase the subscriber number for their own streaming services was either by significantly narrowing the time

Starting point is 00:12:59 between a film's theatrical release and its appearance on streaming or by putting both out simultaneously. Disney did it with Black Widow, much to the dismay of Scarlett Johansson, Warner Brothers did it with Dune. This was the future. On top of that, the thinking went, streaming would give movie studios a chance to spend far less on the expensive marketing required for a theatrical release. The algorithm would do all the work instead. But the industry has now largely come to a very different conclusion. The key to making a movie a streaming success and attracting new subscribers is to first release it in theaters. It turns out that all the things that make theatrical movies successful, expansive marketing and public relations campaigns, and valuable word of mouth, continue to help movies perform once they land in the home. We really believe that this theatrical marketing campaign and a theatrical window for this movie will only further amplify and enhance what we always believed was going to be a strong performance on the service. Ms. Valenti said,

Starting point is 00:13:56 Since August 2022, 65% of Netflix's weekly top English-language films were movies it had licensed from studios after they debuted in theaters. And when Nielsen, the audience measurement company, crunched its data for the past two years, only three of its top 20 streaming movies of 2023 had been released straight to a streaming service without going to theaters first. In 2024, only four films in the top 20 went straight to streaming. Two of them, Netflix's Beverly Hills Cop, Axel F, and Amazon's remake of Roadhouse were based on previous theatrical titles. The two streaming originals that made the list were Netflix's action film Damsel, starring Millie Bobby Brown and the heist film Lyft with Kevin Hart. You can objectively look at the data and see

Starting point is 00:14:40 movies that have gone through the theatrical window perform better, said Casey Blois, who has overseen HBO content since 2016 and has overseen the Max streaming service since 2020. For us, I know it for a fact, and you can see it in data for other platforms. We're not the only one, end quote. Mr. Blois's sentiment is being echoed all over Hollywood. The better it does in theaters, the better it does on streaming, said Joe Early, the head of Disney Plus and Hulu. During Disney's most recent earnings call, its chief executive Robert Eiger said, quote, a successful Disney movie today drives more value than it ever has in the past, affecting all his other business lines, including streaming, theme parks, and consumer products. It's not only new films that benefit

Starting point is 00:15:21 from the copious marketing dollars spent on theatrical releases. Some are blockbusters often cost north of $100 million in global marketing money, while even the smallest films have a hard time opening in theaters with marketing spends lower than $25 million. When new chapters of a successful franchise are introduced to theaters, they prompt spikes in each company's catalog of films. Paramount Plus said that when a Quiet Place day one premiered on its service, viewers increased their engagement with the other films in the Quiet Place franchise by 207%. For Mission Impossible Dead Reckoning Part 1,

Starting point is 00:15:53 the percentage increase in interest in the other Mission Impossible films was 181%. end quote. Finally today, just interesting to see the product makeup of meta evolve. It's no longer just the big blue app, though. That's still huge for them. No, Instagram is now increasingly becoming their cash cow e-marketer expects Instagram to hit $32 billion in U.S. ad revenue in 2025, thereby passing 50% of meta's ad sales for the first time. According to filing's Instagram was only around 30% of META's global business in early 2022, quoting Bloomberg. Instagram has steadily expanded into arguably the most important part of META's business, not only for its role-driving revenue, but also as a vehicle for features like Reels and Threads

Starting point is 00:16:43 that offer competition to rivals. Instagram is now expected to top $32 billion in U.S. advertising revenue in 2025, up more than 24% from the current year, according to data from e-marketer. The video-sharing app has more than 148 million American users. Matt's focus on video content has been a major contributor to that growth, wrote Jasmine Enberg, principal analyst at e-marketer in a blog post. Instagram is now a video-first platform with users spending close to two-thirds of their Instagram time watching videos, she wrote.

Starting point is 00:17:13 Meta previously told investors that Instagram Reels, a short-form video product that rivals TikTok, makes up more than 50% of the time people spend on the app, end quote. Oh, man, clearly the weekend cannot come fast enough vis-a-vis my voice and recover Talk to you tomorrow

Tech Brew Ride Home - Wed. 12/18 – Is Your Home Internet Router About To Be Banned?

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