Benedict's Newsletter: No. 559

NO. 558 FREE EDITION TUE 17 SEP 2024

In this issue: In this issue: Qualcomm buying Intel(?), Israel's pagers, Runway & Lionsgate, Snap spectacles, and Amazon versus WFH

Read this issue as a web page. LINK

My Work

Competing in search

A quarter century after ‘don’t be evil’ a judge has found that Google is abusing its monopoly in search. But no-one knows what happens next, and whether this ruling will change anything. Will Apple build a search engine? Will ChatGPT change search? Does it matter? LINK

Asking the wrong questions

With fundamental technology change, we don’t so much get our predictions wrong as make predictions about the wrong things. LINK

News

Qualcomm buying Intel?

This weekend the WSJ and FT both reported that Qualcomm is interested in buying Intel, while Apollo was looking at making an investment. I’m old enough to remember when Intel was one of the pillars of the tech industry and Qualcomm was a quirky little wireless chip company. But Intel missed mobile and missed AI, and TSMC overtook it on the cutting edge of chip manufacturing, and now Qualcomm’s market cap is double Intel’s. I’m not enough of a chip analyst to have a view on whether Qualcomm could actually fix Intel (the parts it wouldn’t just sell for scrap), but this is the end of an era. Do they stick it out, try for a strategic industry bailout from the government, break up, or just fade away? QUALCOMM, APOLLO, ANALYSIS

Israel’s pagers

The exploding pagers in Lebanon are a geopolitics story, but with a tech angle: Israel has so comprehensively hacked smartphones (especially cheap Androids, but see also NSO’s iPhone zero-days, and there was a rumour that Viber was a Mossad front) that Hezbollah told its people to switch to a pager network. These are harder to hack… so Israel set up a front company, licensed a brand name, and somehow got Hezbollah to buy Mossad’s pagers, each with a tiny explosive charge hidden inside that could be detonated remotely. Supply-chain attacks have been part of the threat model for decades, but this is an especially vivid example. (Bonus fact - in Brazil SMS are called torpedos, because they're invisible until they explode in your pocket...) LINK

TikTok versus the USA

TikTok was in court this week fighting the new US law that effectively orders its divestment. The court appears skeptical of Tiktok’s arguments. This has been going on in different forms for so long that most people have stopped paying attention (and meanwhile Trump, having mounted a typically shambolic attempt to ban it when he was president, now says he’s changed his mind this week at least). But… this isn’t going away just yet. LINK

Runway partners with Lionsgate

The loud part of Hollywood hates generative AI and the quiet part is rushing towards it. This week Runway did a deal with Lionsgate: they will build a private, custom internal model for things like pre-visualistion. Note that Lionsgate’s content is not being used for Runway’s general, public models accessible to other people, nor (necessarily) for final production. LINK, DEMO

The week in AI

YouTube launched a bunch of generative AI video capabilities for creators. LINK

Microsoft has partnered with BlackRock for a fund to build data centers, with an initial $30bn and a path to $100bn including debt. Somewhere on my todo list is an item to make a long-term chart of telco capex versus datacenter capex. LINK, PRESS RELEASE

Meanwhile Groq, one of the new wave of inference houses, has done a deal with Aramco to build a big GCC data centre. LINK

Snap’s new Spectacles

Snap released a new set of AR glasses, as a developer kit at $100/month plus taxes. As for most devices in this space, people who’ve had the demo say they’ve very cool, but also huge, heavy, and with a very narrow field view (45 degrees versus about 110 for both the Vision Pro and Quest 3). I’m not sure what this achieves, without a roadmap to get to a practical consumer device - this is a ‘developer kit’, but why would a developer put resource into this without knowing if or when any consumer will have it? (See also the Vision Pro, which is also effectively a dev kit.) LINK, INTERVIEW

Amazon versus WFH

Amazon’s CEO sent a memo saying that the company is returning to 5 days in the office (and also, which got less attention, reducing the ratio of manager to staff and setting up a ‘bureaucracy mailbox’ to tell him about cases of excessive process - however he doesn't say which form to use, and whether it needs to be in triplicate). People have strong feelings about this, and Amazon is an outlier of intense corporate culture (or wants to be). LINK

EU versus tech

Thierry Breton, the EU’s head of tech regulation (amongst other things) was fired/resigned in a piece of internal politics, and meanwhile the new EU Commission has a new job - ‘vice-president for Tech Sovereignty, Security, and Democracy.’ Note in conjunction with Mario Draghi’s report from two weeks ago on the EU’s lagging in competitiveness and startup creation, and excessive/fragmented regulation. LINK

Meanwhile, Meta and Spotify led an open letter calling on the EU to fix ‘fragmented and inconsistent’ regulation of AI and open source. LINK

Meta bans RT

Noted for the the record - after last week’s US government splash about Russia paying ‘MAGA’ YouTubers to parrot its talking points, Meta banned RT, the Russian government’s mouthpiece. LINK

Instagram Teens

Instagram created ‘teen accounts’, in a move to get ahead of all the concern about teenagers (some justified, some moral panic), with parental controls and, in particular, limits on whether strangers can contact them. LINK

About

What matters in tech? What’s going on, what might it mean, and what will happen next?

I’ve spent 20 years analysing mobile, media and technology, and worked in equity research, strategy, consulting and venture capital. I’m now an independent analyst. Mostly, that means trying to work out what questions to ask.

FIND OUT MORE

Ideas

The FT has a big splash claiming a near-total collapse in venture-backed startups in China: partly because US investors are pulling back but much more because of the changed domestic political environment. Apparently funding has gone from ~$100bn in 2022 to only $6bn in 2024 YTD, and 261 companies in 2024 versus a peak of 51k in 2018. It’s very hard for governments to create startup ecosystems (as the EU has discovered) but it’s very easy to kill them. LINK

Kiosks for ordering in restaurants do not reduce employment. The headline says this is surprising, but in fact it’s very unsurprising. LINK

Edelman released a report looking at the quality and capabilities of the different generative AI tools on the market from a PR professional’s perspective. LINK

A profile of Scale AI, which has 100k contractors providing training data for AI models. LINK

Some analysis of the ongoing Google adtech competition trial. This is getting very little attention outside adtech (like all issues in that market), but Google could lose, and it’s easier to see this resulting in consequential change than the search competition case last month. LINK

An analysis of Chinese views of AI safety. LINK

A mental model for thinking about LLM use-cases in the enterprise. LINK

The FT on Tesco’s plans to use AI to make more personalised recommendations (note that Tesco has a LOT of user data from its loyalty card scheme). LINK

Outside interests

A study arguing that dating apps strengthen assortative matching, and hence income inequality (i.e. people with higher incomes marry other people with higher incomes). LINK

YouTube is big for astrology in Pakistan. LINK

Jony Ive is doing property development (?) in SF, and confirmed he’s working on some kind of AI device with OpenAI. LINK

Data

An analysis of which LLMs and LLM platforms developers are using so far. LINK

4 in 10 young adults in the USA get news from TikTok. LINK

An analysis of what sites are blocked by the Chinese ‘Great Firewall’, and when. LINK

Preview from the Premium edition

Crypto after the crash

A year or two ago, someone joked that people still working on crypto are like those Japanese soldiers lost on islands in the Pacific, who haven’t heard the war is over. The price of Bitcoin itself is back at all-time highs, but it’s hard to find anyone who will admit they were interested in NFTs, and our attention has moved on, both in tech and outside. LLMs are the thing - haven’t you heard?

The carnival has moved on, and the grifters are selling AI wrappers now, but people are still building things. My old colleagues at the a16z crypto fund still seem to be busy, and last week I was asked to speak at a huge crypto conference in Singapore, that had its share of the usual faces but was mostly full of people with their heads down building acronyms to connect other acronyms together. Less sizzle, more boring plumbing.

Back when people cared about this and argued a lot, I probably had the least popular possible view of crypto: I thought it was neither all of the future, nor entirely a scam - I thought it might end up being useful, but not for things that interested me very much. (Indeed, I can’t think of another technology that was as polarising as crypto - very serious people in tech argued that it was an important part of the future, and some of them still think that, while just as many equally serious people thought that it was all a waste of time.)

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