Tech Brew Ride Home - Wed. 12/20 – Sony Has Sold 50 Million PS5s

Episode Date: December 20, 2023

Rite Aid was apparently doing some crazy stuff with facial recognition software. Sony says the PS5 is killing it. ByteDance is definitely killing it. Microsoft CoPilot can now compose songs. And maybe the real reason OpenAI is making deals with publishers. Links: Rite Aid Banned From AI Facial Recognition by FTC After Misuse (Bloomberg) PlayStation sales and blockbuster games propel console market back to growth (FT) ByteDance’s Sales Break $110 Billion to Pass Tencent This Year (ByteDance) SSH protects the world’s most sensitive networks. It just got a lot weaker (ArsTechnica) Microsoft Copilot gets a music creation feature via Suno integration (TechCrunch) Scooter Company Bird Global Files Bankruptcy to Sell Itself (Bloomberg) What Do AI Companies Want With the Media? (NYMag) 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, December 20th, 20th, 203. I'm Brian McCullough today. Ride Aid was apparently doing some crazy stuff with facial recognition software. Sony says the PS5 is killing it.

Bite Dance is definitely killing it. Microsoft co-pilot can now compose songs, and maybe the real reason OpenAI is making deals with publishers. Here's what you miss today in the world of tech. The pharmacy chain, Rite Aid, must now stop using facial recognition technology for five years as part of a settlement with the U.S. Federal Trade Commission, which says the tech falsely flagged customers as shoplifters, quoting Bloomberg. Right Aid's facial recognition system generated thousands of improper matches, often involving blacks, Latinos, or women, according to the agency. As a result of the improper matches, right aid employees would follow customers around the store,

call the police, or sometimes falsely accused the people of shoplifting, the FTC said, end quote. So, right aid has agreed not to use the technology for at least five years and delete any images it has stored up. But the system seems pretty bad. It scanned customers as they entered the stores, attempting to match them against the database of suspected and confirmed shoplifters. When a perceived match occurred, employees were alerted to monitor the customer closely. However, the FTC highlighted significant flaws in the system. The database relied on low-quality images from surveillance, cameras, and cell phones leading to unreliable matches. These inaccuracies often resulted in employees unnecessarily stalking customers or contacting law enforcement without witnessing any criminal activity.

The FTC also noted that Rite Aid did not inform its customers about the use of this technology and instructed its employees to keep its application confidential from customers and the media. The company collaborated with two undisclosed firms to develop a database containing images of tens of thousands of, quote, persons of interest. What's worse, the FTC says it found widespread errors in the systems functioning. From December 2019 to July 2020, over 2,000 match alerts were triggered for the same individual at different stores simultaneously, a scenario the FTC deemed, quote, impossible or implausible. This raised concerns about the system's reliability, which you think. Sony has sold 50 million PlayStation 5 consoles in the three years since its November 2020 launch.

That would put it on a pace of sales almost as rapid as the PS4, at least to reaching that 50 million sold a level, indicating the PS5 has outsold Xbox by almost 3 to 1 this year. Also, this might indicate there are green shoots in the gaming market, quoting the Financial Times. Eric Lempel, head of global business at Sony Interactive Entertainment, said that with supply issues solved, its latest console was now on track to outsell the PlayStation 4, which was first release in 2013, and went on to sell more than 117 million units. I think we have the ability to get there.

Lepel told the Financial Times, demand for the PS5 going into this year was huge. Momentum is strong now and it's continuing, end quote. Sony said it hit the 50 million sales milestone on December 9th, 161 weeks after the PS5 launched. This compares with the 160 weeks it took the PS4 to reach the same point after its release. Microsoft has not published official Xbox sales figures for several years. While Microsoft stole headlines this year over its battle to complete its $75 billion acquisition of Call of Duty Maker Activision Blizzard, its Xbox hardware has been beaten

into a distant third place behind Sony and Nintendo. PS5 sales grew about 65% to 22.5 million units this year, according to Amperestimates, while sales of the latest Xbox fell about 15% to 7.6 million. Sales of Nintendo's Switch, which debuted in 2017 and is likely to be replaced by a new console next year, fell 18% to 16.4 million, end quote. Forecasted to recover by $7.2% to $60.9 billion this year, the console industry encompassing hardware, software, and services is reviving after a 7.3% fall in 2022 per Amper Analyst's findings. The resurgence nearing the pandemic peak of 2021 is driven by a better PS5 supply and major titles like

Sony's Spider-Man 2, Microsoft Starfield, and Nintendo's The Legend of Zelda, Tears of the Kingdom. sources say bite dances, 2023 sales surged to more than $110 billion, thereby matching 2022's growth rate, quoting Bloomberg. The world's most valuable startups growth broadly match the 30% pace it managed in 2022 when it reported sales in excess of $80 billion, the people said, asking not to be identified as the information isn't public. That's despite economic turbulence in China and elevated scrutiny and restrictions

in key markets from the U.S. to India, end quote. bite dance, the parent company of TikTok and its Chinese counterpart, Doyin, solidified its status as a key player in China's internet sector this year, joining the ranks of Tencent and Alibaba. Through its viral social video platforms that expanded into e-commerce and beyond, with a growth rate like that, bite dance will likely leapfrog more established social media giants like Meta and Tencent soon, as Tencent is roughly at $86 billion in revenue and meta at around $126 billion in revenue per year. specifics of ByteDance's profitability remain uncertain as the privately held company faces less rigorous disclosure and auditing standards compared to its public competitors, though not independently verified the company's internal figures indicate growth is not slowing. ByteDance's EBITDA earnings reportedly soared by 79% to approximately $25 billion in 2022,

as per an April Financial Times article citing informed investors. Researchers have detailed a man-in-the-middle attack on SSH that can break the integrity of that protocol, the first, quote, practical attack of its kind, according to researchers, fixes could be tough because they face compatibility issues. Quoting Ars Technica, named Terrapin, the new hack works only when an attacker has an active adversary in the middle position on the connection between the admins and the network they remotely connect to. Also known as a man in the middle or MITM attack, this occurs when an attacker secretly positioned between two parties intercepts communications and assumes the identity of both the recipient and

the sender. This provides the ability to both intercept and to alter communications. While this position can be difficult for an attacker to achieve, it's one of the scenarios from which SSH was thought to have immunity. For Terrapin to be viable, the connection it interferes with also must be secured by either Chachaw-20 Poly-305 or CBC with encrypt than Mac, both of which are cipher modes added to the SSH protocol in 2013 and 2012, respectively. A scan performed by the researchers found that 77% of SSH servers,

servers exposed to the internet support at least one of the vulnerable encryption modes, while 57% of them lists a vulnerable encryption mode as the preferred choice. At its core, Terrapin works by altering or corrupting information transmitted in the SSH data stream during the handshake, the earliest stage of a connection. When the two parties negotiate the encryption parameters, they will use to establish a secure connection. The attack targets the BPP, short for binary packet protocol, which is designed to ensure that adversaries with an active position can't add or drop messages exchanged during the handshake.

Terrapin relies on prefix truncation, a class of attack that removes specific messages at the very beginning of a data stream, end quote. To check for Terrapin vulnerability in your SSH clients or servers, users can utilize a specialized scanner created by researchers. This tool accesses the presence of susceptible encryption modes and the support for a strict key exchange countermeasure without completing a full handshake or executing the attack. However, users of any SSH implementing app should consult the developer for specific advice, including the app's vulnerability to Terrapin, conditions of potential exploitation, and availability of fixes.

Microsoft Copilot can now compose songs, including lyrics, instruments, and voices from a sentence due to a new integration with Generative AI music app, Suno, quoting TechCrunch. Users can enter prompts into co-pilot like Create a Pop Song, about adventures with your family, and have Suno via a plugin, bring their musical ideas to life. From a single sentence, Suno can generate complete songs, including lyrics, instrumentals, and singing voices. Co-Pilot users can access the Suno integration by launching Microsoft Edge, visiting copilot.microsoft.com, logging in with their Microsoft account, and enabling the Suno plugin, or clicking on the Suno logo that says, Make Music with Suno.

Tech giants and startups alike are increasingly investing in Gen A.I. Driven Music Creation Tech, In November, Google AI Lab, DeepMind, and YouTube partnered to release Liria, a Gen AI model for music and DreamTrac, a limited access tool to build AI tunes in YouTube shorts. Meta has published several of its experiments with AI music generation. Elsewhere, Stability AI, and Refusion have launched platforms and apps for creating songs and effects from prompts. But many of the ethical and legal issues around AI synthesized music have yet to be ironed out. AI algorithms learn from existing music to produce similar effects. a fact with which not all artists or Gen AI users are comfortable, especially in cases where artists don't consent to having an AI algorithm train on their music and didn't receive compensation

for it. Stability AI's own Gen AI audio lead quit after saying that Gen AI, quote, exploits creators and the Grammys have banned fully AI generated songs from consideration for awards. Many Gen AI companies argue that fair use excuses them from having to pay artists whose work are public, even if they're copyrighted. It's uncharted legal territory, however. For its part, Suno doesn't reveal the source of its AI training data on its website, nor does it block users from entering prompts like, in the style of, insert artist here, unlike some other gen AI music tools.

I was able to get the prompt uplifting music in the style of Steely Dan through without any warning message. Suno claims, however, that it does attempt to block certain prompts, that its models don't recognize artist's names, and that it prevents users from uploading the lyrics to existing songs to create covers, end quote. Remember the whole e-scooter craze or bubble more like it? Well, one of the biggest names of that bubble bird has filed for Chapter 11 bankruptcy in Florida listing between $100 million in liabilities. The New York Stock Exchange recently began delisting the e-scooter rental company.

I posted about this on threads this morning saying it looks like the whole e-scooter craze is over, to which friend of the show Chris Mim said, What are you talking about? I still see them everywhere. Yes, but for how much longer? The business model and unit economics problem has never really been solved here. Quoting Bloomberg. A group of Byrd's lenders have agreed to loan the scooter firm money to help pay for its reorganization, and the company has a tentative deal to sell itself to a Canadian firm,

according to the court documents. Bird went public during a wave of blank check mergers in which a publicly traded shell company combines with an existing business in order to avoid the traditional requirements of an initial public offering. Since then, multiple firms that went public as special purpose acquisition companies have filed for bankruptcy. Bird's shares plunged 97% this year as scooter enthusiasm faded, and in September the NYSC began delisting proceedings against the company after its average global market capitalization over a consecutive 30 trading day period fell below at least $15 million. The worldwide scooter market is changing as cities impose regulations on the shared devices,

which are sometimes left abandoned on street corners in towns with fewer restrictions. earlier this year, residents upset about the uncontrolled parking voted to ban scooters, according to a report by a consulting firm McKinsey and Company. More than one-third of the top 100 cities have banned scooters mainly in China, according to the report. Other major cities that reject the battery-operated devices include Barcelona, Philadelphia, Sydney, and Toronto. The report found, end quote. Finally today, remember how I said media companies are cautiously hoping to cut deals with AI companies as a new revenue stream? Well, in New York Magazine, John Herman has a different interesting angle to this. In short, OpenAI might be doing this out of

strategic defensiveness, because deals with publishers are a hedge against a scenario in which scraping becomes harder, training material more expensive, and real-time data more scarce. It's easy to fold such deals into the prevailing narrative of AI dominance as venerable publishers line up to partner with tech firms once again, despite what happened last time around, and the time before that and the time before that. To imagine that the Axel Springers of the world have no choice but to throw in with companies poised to remake the world with or without their cooperation, which may be how they see it. At least they're getting paid. Really, though, as they become more common, partnerships like this should complicate this story of inevitability for companies like OpenAI,

the world-beating firm that, before it takes over the economy and before it must be stopped from taking over the entire world, must first, for some reason, pay for a big subscription to Politico Pro. Maybe this is worth a lot to OpenAI. Also, the value in reducing the number of media organizations that might be inclined to sue you is also probably greater than zero. I suspect the real value of such a deal, though, is in ensuring that its future products don't end up existing in a vacuum of their own creation. Some of OpenAI's biggest competitors, in addition to having access to massive amounts of training data produced by their own users, have access to real-time or at least recently updated information and media about the world and its customers. Google has much of

the web via its search engine, not to mention Gmail, docs, and YouTube, meta has Instagram and Facebook. For what it's worth, Elon Musk's XAI has X. Open AI products like their competitors have access to the web, which means all sorts of relevant and up-to-date content, including news. But as AI firms become more powerful businesses with websites, including news publishers, are becoming more deliberate about how they make their content available. In October, the BBC took moves to prevent OpenAI from crawling its content, joining the New York Times, CNN, and Reuters. Another looming challenge is that that widely available AI tools are themselves accelerating the decline of the open web on which they depend. Platforms where human users posts quality public content for fun and profit, art communities,

programming, databases, blog networks, and forums are dealing with a glut of low-quality AI-generated garbage produced by hustlers, scammers, and attention arbitrages. The most notable example of such an effort is Google, which is simultaneously struggling to filter AI garbage out of its search results and testing out a feature that replaces top results with its own AI-generated summary, threatening to destroy the economy built around search, one which much of the news media is heavily dependent. ChatGBTGBT is a much better product if it can browse the web for you without having to hit a paywall every five seconds. At the same time, it's rapidly becoming part of the story of the web's ongoing ecosystem collapse and inspiring publishers to further limit access to their stories, not just to voracious AI firms,

but to everyone, Open AIs deals with publishers are a hedge against a scenario in which scraping becomes harder and more legally perilous, training material, more expensive and real-time data more scarce, a scenario in which paying chat GPT users might ask about the news, and chat GPT might not have access to a credible recent source to link, summarize, or otherwise relay. Also a scenario in which, by the way, OpenAI's products are a major venue through which people keep up with the news, end quote. That startup just mentioned in that New York piece, channel 1.a.I. Did I read that part? Anyway, does anyone know them, channel 1.a.ai, know them well enough to make an intro to them or to someone doing similar

AI generated newscasts. Send them my way, Brian at ridehomefund.com. This is me looking to invest. And as always, if you can make a meaningful intro, we can share Kerry with you on the deal. Also, I'm interested in AI generated animation. Like, we have to be at the point where I could describe a plot and get like a 30-second cartoon generated, right? I think I did, or maybe I just heard a story of somebody generating a South Park-style animated episode recently. Anyway, if you know folks doing something like that in animation, again, send them our way. Talk to you tomorrow.