Tuesday, March 26, 2024

Benedict's Newsletter: No. 533

NO. 533   FREE EDITION   TUE 26 MAR 2024
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My Work

Who cares about tech regulation?

Tech regulation gets a lot of headlines, and seems like a big deal, but most people in tech don't seem to care much. It's boring, and years away, but more fundamentally, it really doesn't affect what people are working on. LINK

The problem of AI ethics, and laws about AI

Can you write laws, or lay down ethical principles, for a technology that will be used in entirely different ways, for different purposes, in different industries? What does that mean if it's changing entirely every 18 months? LINK

From the archive

Two pieces that are very relevant to this week's Apple case:

  • iPhone pricing and US market share. LINK
  • Market definitions and tech monopolies. LINK

News

Apple gets an antitrust lawsuit

See this week's column. LINK

Microsoft buys Inflection without buying it

Inflection is one of the new wave of generative AI startups building their own LLMs; it was founded by Mustafa Suleyman, previously a co-founder of Deepmind. Except, this week he went to work for Microsoft as CEO of 'Microsoft AI', running all consumer-facing AI products, including Bing and Copilot.  Microsoft also hired most of the staff, and paid a $650m licence fee for the technology. (Note: I am a venture partner at Mosaic Ventures, which has invested in Inflection: I was not involved in this transaction.) LINKPAYMENT

The week in AI

Apparently, Apple is in conversations with Google around using some parts of its Gemini generative AI platform in iOS. I would be surprised if Apple added a simple chatbot to iOS, given the reliability issues (and if it did, surprised if it relied on someone else for such a prominent feature) - I would expect more that there will be be lots of new features powered by generative AI that solve specific problems in new ways. We'll find out at WWDC in the summer. LINK

The FT is testing a chatbot that can answer questions based on its archive. LINK

The French competition agency fined Google €250m for using data from French newspapers as training data for Bard. Memo to Americans: other countries have laws too, and can even change them, so no, US copyright law does not tell us all the answers. LINK

The FT reports that the BBC is planning to build its own generative AI models, using its century or so of data, and is exploring licensing that data to AI companies as well. LINK

Bloomberg reports that OpenAI has been doing a tour of Hollywood, presumably on the back of its Sora video generation tool. LINK

Apparently, Saudi Arabia wants to set up a $40bn AI fund. Apparently, Andreessen Horowitz (where I worked from 2014 to 2019) is involved. LINK

The decline of Stability

Stability AI got lot of attention in late 2022 for Stable Diffusion, one of the first break-out generative AI image tools. The initial publicity tended to miss the fact that the model itself came from a research group at Munich University, not the company itself, and there has been a lot of staff and management turnover since. Now the CEO, Emad Mostaque, is out. LINK

Car data

Last week the NY Times reported that a bunch of big car companies were giving personally identifiable telemetry data from connected cars to data brokers: this week GM said it would stop. LINK

Cameo and the Covid rotation 

Cameo might just have been a fad, sadly: it's raising money at a $100m valuation, down from $1bn in 2021. (See also Clubhouse.) LINK

Chinese cars

Xiaomi will start delivering its first EVs this month. The global expansion of the Chinese car industry, unlocked by electric, seems like it will be a very big story in the next decade - will it be as big as Japan in the 80s? Bigger? LINK

Meanwhile Wired reviewed the driving assistants offered by the top Chinese car companies. LINK

LInkedIn does games?

Apparently LinkedIn plans to add games of some kind. I thought we all knew that LinkedIn itself is a massive multiplayer game, in which middle-managers compete for the most 'connections' to total strangers? LINK

Mr Beast does TV

Breaking the narrative, Mr Beast will do a TV gameshow with Amazon Prime. 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.

Ideas

Steven Sinofsky, who went through this with Windows, on the DoJ's case against Apple. LINK

And a useful perspective from Joshua Gans. LINK

Martin Sorrell on what generative AI will do to ad agencies. LINK

A mid-level ad person on how they use generative AI every day. LINK

Bain on generative AI in private equity. LINK

How Google's AI product for newsrooms works. LINK

Why Google failed to ship its LLMs before OpenAI: institutional dysfunction, apparently. LINK

How big is Nvidia's software moat? LINK

For reference: Google's blog post on DMA compliance. LINK

Each DMA-designated gatekeeper had a workshop with the EU and interested parties (ie: competitors who want more). These policies are still going to change - here, a summary of the Apple workshop LINK

Meta's workshop: much discussion of its offer to pay instead of getting ads for things you're interested in. A small group of very religious people think that seeing ads for things you're interested in is evil, but also think paying instead is evil, and therefore effectively want Meta to offer its services for free. LINK

And Meta's engineering blog on messaging interoperability as a DMA requirement. LINK

Outside interests

Google's new office has a very clever roof that turned out to kill the wifi. LINK

Boom Aero's test flight. A long way to go. LINK

Bennett Miller's exhibition of imagery created with DALLE at Gagosian Beverly Hills. LINK

Jan Chipchase on what generative AI might mean for research photography. LINK

A global map of GPS jamming. LINK

The Williams Formula 1 team tracked the 20k components used in each car in an Excel spreadsheet. This was not good. LINK

Data

Accenture 'Generative AI' bookings in the last 4 quarters: $100m, $200m, $450m, $600m. Deployment in action (or a lot of PoCs). LINK

Deloitte's 2024 Digital Media Trends. LINK

Index Ventures released a batch of startup benchmarking metrics. LINK

Spotify's annual statistics. LINK

Preview from the Premium edition

Apple gets its antitrust moment

The US government has been talking about going after 'big tech' for five years or so now, and Apple was the last big player not to get a lawsuit. This week the box was checked. 

In an 80 page filing, the DoJ lays out a thesis as follows:

  • It claims that the iPhone has a monopoly: the iPhone has maybe 25% global market share, but 60% or so in the USA and close to 90% of US teenagers, and the DoJ has invented a market definition of 'performance smartphones' to get to 70-75%
  • It claims that Apple uses a combination of 1: features and decisions that make it hard to switch to Android and 2: blocking the emergence of cross-platform technologies and services that would have the same effect, to keep consumers locked in
  • The DoJ gives five examples: Apple blocks super-apps (this assertion is hard to understand - have you heard of WeChat?), Apple blocks cloud streaming games (it changed this policy this year), iMessage is not cross-platform something something green bubbles (this is childish), the Apple Watch is not compatible with Android phones and has some level of privileged access to the iPhone not offered to third-party watches, and Apple doesn't allow other apps access to NFC (the EU has already mandated a change on this in the EU).
  • And, the DoJ claims this is a pattern of making the phones worse to lock people into an expensive phone, and that everything Apple says about privacy and security is a smokescreen

What should we make of this? I'm not a competition lawyer, but there's a lot of stuff for lawyers to argue about in this, and it will be in and out of court for years. The DoJ will make new claims, and Apple will argue back, on much stronger ground on some questions than others. Meanwhile, where the EU could pass the DMA, which gives Brussels the power to micromanage individual product decisions across everything from Microsoft to Apple to TikTok, the US has no such law and isn't likely to to, so the atomic unit of regulation remains persuading a judge that a company broke a law written in the late 19th century, plus the associated case-law that came after. (In addition, of course, there is the wish in some parts of the US legal industry to change how competition laws is enforced, moving away from a narrow focus on prices.) 

However, once this finally reaches a verdict, and even if Apple loses (which will be a negotiation), it's not clear how much this really matters for Apple or its customers and developers.

THIS IS A PREVIEW FROM THE PREMIUM EDITION - PREMIUM SUBSCRIBERS GET THE COMPLETE COLUMN EVERY WEEK. YOU SHOULD UPGRADE.
Upgrade to Premium
You're getting the Free edition. Subscribers to the Premium edition got this two days ago on Sunday evening, together with an exclusive column, complete access to the archive of over 500 issues, and more.
 

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