🤔 Wiser! #124: BigTech Earnings | Gov Surveillance | AI Godfather | Friendly Pi | TechRegs | ChatGPT’s 1st Scalp!

w/Wiser! #124–9th May 2023

Hi Wiser! Reader, welcome to the free edition of the Wiser! newsletter.

In this week’s Wiser!, I make sense of the following:

• What did the latest round of BigTech earnings calls tell us?
• Ethnic profiling by Netherlands’ Ministry of Foreign Affairs; Spain’s health algorithm under fire
• Geoffrey Hinton, the “godfather of AI,” resigns from Google to warn against AI risks and dangers
• Pi, the kind and supportive AI chatbot
• Chegg shares plunge 38% after ChatGPT warning that its eating its lunch
• The EU’s Digital Markets Act comes into force, kinda!
• UK Regulator Blocks Microsoft’s $69 Billion Bid to Acquire Activision
• Apple’s AI coaches are just the start of a rush of new AI products and features

🔥 Paying subscribers got the main issue of this newsletter on Friday, that’s four days ago. Not only did they get a more insights and information that you, they also get other member benefits, including a member’s chatroom, my exclusive weekly article and unlimited access to the Brand Strategy Collection, a unique reference library of the Utility of Emerging Technologies, catalogue the use-cases of 250 consumer brands.

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Brand Strategy Collection Updates

The Brand Strategy Collection is a unique library of case studies and use cases for 250+ consumer brands, organisations, locations and personalities with one thing in common. They’re all using emerging technologies to enhance customer engagement, win new marketshare and improve customer operations.

This week’s updates include:

• Starbucks released its second collection of NFTs to beta users of its Web3 loyalty program,
• American Eagle introduced an augmented reality experience on Snapchat that allows users to try on 200 items from a curated collection through an American Eagle “shopping lens”.
• Panera has partnered with Amazon to introduce an updated voice ordering capability using conversational AI.
• BP has extended its agreement with Aize, a digital twin software provider.
• Sports Illustrated launched an NFT ticketing platform built on the Polygon network.

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w/BigTech

1. What did the latest round of BigTech earnings calls tell us?

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Meta, Microsoft, Alphabet, and Amazon all announced solid quarterly earnings this week as big tech continues to bounce back from 2022, a year in which the four companies shed nearly $3 trillion of market cap between them.

Meta has had a tough time since its name-change 18 months ago. However, the social media giant reminded everyone that its apps are still wildly popular, reporting over 3 billion daily active users for the first time across its family of Facebook, Messenger, WhatsApp and Instagram. Also well-received was the return to revenue growth after three consecutive quarters of decline. That paves the way for Zuckerberg to continue investing in his biggest bets: AI and the much-maligned metaverse.

Microsoft continues to march on. Revenue grew 7% year-over-year, and its Azure cloud-computing business held up better than expected, growing 27%. Elsewhere, the company’s partnership with OpenAI, the maker of ChatGPT, promises continuing innovations for the entire Microsoft suite. Those developments have contributed to a ~$480 billion increase in Microsoft’s market cap since the beginning of 2023, equivalent to gaining the value of about 8 Ubers.

Google’s owner Alphabet posted more measured results as the firm continues to play catch-up since the rollout of AI-powered search from Microsoft. The company’s ad revenue fell, although not as sharply as expected, and lower costs helped the bottom line beat expectations.

Amazon nearly delivered a win. The company’s shares initially soared as much as 10% on the back of a better-than-expected quarter… but cautious comments about its all-important cloud division, where growth slowed to 16% from 37% last year, sparked fears for the future.

Amazon, Alphabet, Microsoft, and Meta make up about 15% of the S&P 500’s market value

w/AI

2. Leaked documents reveal ethnic profiling by Netherlands’ Ministry of Foreign Affairs; Spain’s health algorithm under fire

Leaked documents obtained by Lighthouse Reports reveal that the Netherlands’ Ministry of Foreign Affairs has been secretly using an algorithm that ethnically profiles visa applicants, despite warnings from its own internal watchdog over discrimination. Collaborating with NRC, they found that the algorithm has profiled millions of short-stay visa applicants using variables such as nationality, gender, and age. Applicants deemed ‘high risk’ are automatically moved to an “intensive track,” resulting in delays and rejections. Dutch MP Kati Piri described the use of algorithmic visa profiling as “downright shocking.” Following their publication, the Dutch Data Protection Authority said it will question the Ministry of Foreign Affairs over their findings.

Meanwhile, over in my home country of Spain, Lighthouse Reports teamed up with El Confidencial to reveal that millions of people across the country have had their health evaluated by a secretive algorithm to see if they may be shirking work. Public records requests and interviews with dozens of sources paint a picture of an opaque and unfit-for-purpose system. Experts have described the system as an example of “malpractice,” yet Spanish officials have continued to use it, potentially pushing people back to work who aren’t ready. The system was purchased from software giant SAS for around one million pounds.

w/AI

3. Geoffrey Hinton, the “godfather of AI,” resigns from Google to warn against AI risks and dangers

Geoffrey Hinton, also known as the “Godfather of AI”, is the latest industry expert to put his shoulder behind a ban/halt on the rapid pace of AI development. Hinton resigned from Google in April to speak openly about the potential risks of AI, according to The New York Times. Hinton, a prominent figure in the field of artificial intelligence, had been working part-time at Google in recent months. Decades ago, he advocated for the use of a “neural network” as a method for developing AI, at a time when few researchers were willing to embrace the idea. This framework later became the foundation for the current AI revolution.

Hinton joins a group of scientists and technologists who have been sounding the alarm about the potential harms of AI. In the near term, Hinton is concerned that AI-generated images, videos, and text could lead to a wave of misinformation. He also worries that the race for AI supremacy among companies like Google and Microsoft could spiral out of control in the absence of regulation and put humans out of work in the long term. However, Hinton clarified that his decision to leave Google was not due to the company’s irresponsibility, but rather to emphasise the need for discussion about the dangers of AI.

“The idea that this stuff could actually get smarter than people — a few people believed that… Most people thought it was way off. And I thought it was way off. I thought it was 30 to 50 years or even longer away. Obviously, I no longer think that,” Hinton said in a tweet on Monday.

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w/AI

4. Pi, the kind and supportive AI chatbot

Inflection AI has just launched Pi, a ChatGPT-like competitor designed to be a kind and supportive companion assistant. Pi acts as a coach, confidante, creative partner, and sounding board. Pi can help people organise their schedules, prepare for meetings, and learn new skills. It can also have a conversation at a personal level. Inflection’s CEO’s was previously with DeepMind, the AI company acquired by Google in 2014.

Here’s The Thing: Inflection AI’s Pi chatbot is more personal in its style of communication than other AIs like ChatGPT and Bard. It can converse colloquially and demonstrates empathy and understanding without forgetting its role as a respectful, helpful AI chatbot. It helps that the text based chatbot also has a voice (4 voices to be precise.) Which means that Pi talks back to you in a remarkably human like way. I have to say that of all the AI chatbot’s I’ve tried in the last few months, this is my favourite.

Check out Pi here (it’s free too.)

w/AI

5. Chegg shares plunge 38% after ChatGPT warning that its eating its lunch

When online education firm Chegg told investors it believes OpenAI’s ChatGPT is “having an impact on our new customer growth rate,” I doubt they anticipated the impact of such a simple statement. After all, it’s a competitive market and there are always new players, right? Except that there hasn’t been any quite like ChatGPT.

Here’s The Thing: Students are turning to ChatGPT as a studying tool. Why use Chegg or any other education software when ChatGPT is easier to use and free? In after-hours trading, Chegg shares fell 38% from a market capitalisation of $2.1 billion. In response Chegg said it was launching its own AI study aide powered by ChatGPT. (If you can’t beat ‘em…)

P.S.: Chegg is not the only software firm roiled by OpenAI’s software. The Information reported last week about 13 companies including Grammarly that now face the prospect of competing against a cheaper product, in other words, ChatGPT.

w/TechRegs

6. The EU’s Digital Markets Act comes into force, kinda!

The EU’s technology industry regulations can be frustratingly slow to take effect, with new rules often taking years for the effects to be felt by consumers. The Digital Markets Act (DMA) is a case in point. While it technically began to apply earlier this week, the major legislative attempt to level the playing field for smaller players against the Big Tech companies was first proposed in December 2020. It was voted into law by the European Council and European Parliament in July 2022.

Here’s The Thing: Despite the fact that the DMA has technically started, it will be another 10 months until the “gatekeeper” companies, such as Google, Apple, and Meta, will actually have to comply with the rules. These 10 months, until March 2024, are going to be an interesting time for European tech observers and enthusiasts as they second guess how these global platforms are going to change to comply with European regulations (especially with the UK’s new Online Safety Bill due imminently.) On top of that, some parts of the DMA remain ambiguous, with much depending on how it is interpreted and implemented. Messaging interoperability is a prime example. In theory, apps like WhatsApp and Telegram would have to allow users to send messages between them to comply with the DMA. However, in practice, this is not entirely feasible, and it’s questionable whether such changes would actually benefit users of these apps.

w/BigTech

7. UK Regulator Blocks Microsoft’s $69 Billion Bid to Acquire Activision

The UK antitrust regulator rejected Microsoft’s $69 billion acquisition of Activision Blizzard, citing concerns about higher prices, fewer choices, and less innovation in the British gaming sector. Microsoft’s president, Brad Smith, plans to appeal the decision, arguing that it is based on a “flawed understanding of this market.” Activision will also work to reverse the ruling. If Microsoft fails to win the appeal, the acquisition could be in jeopardy. The US FTC has already sued to block the deal, and the EU’s competition regulator is expected to release a decision in May. Microsoft already has a 60–70% share of the UK cloud gaming market, giving it an advantage in the industry.

Here’s The Thing: Cloud gaming, which the regulators cited as the centerpiece of their decision, is still a relatively small market. It only makes up less than 1% of global internet traffic! In other words, the reason doesn’t pass the sniff test too well! It’s possible that there is pressure from other companies, such as Sony, who has been pushing regulators to block the deal, citing concerns that Microsoft’s ownership of titles like Call of Duty would be anti-competitive. Microsoft has been trying to negotiate with Sony and other gaming companies, offering 10-year agreements to allow Call of Duty to continue to be available on their consoles. However, it seems that these efforts have not been enough to satisfy regulators. Next to come is the EU who are expected to make their ruling by May 22nd. The FTC has already taken action to block the deal, and the UK’s decision is another serious blow to Microsoft’s hopes of acquiring Activision Blizzard. However, investors liked it and responded by sending Microsoft’s stock up 8% and Activision’s stock down nearly 9%.

w/BigTech

8. Apple’s AI coaches are just the start of a rush of new AI products and features

Apple has introduced a new tool called Quartz that uses AI and emotion-tracking technology to provide personalised coaching programs for exercise, eating habits, and sleep. The tool is designed to keep users motivated and uses data from Apple Watch to create personalised programs. Apple allegedly are also exploring how the iPhone can use algorithms to determine your mood via speech, the words you’ve typed, and other data points on your devices next. They are aiming to unveil a new iPad app, emotion tracker, and AI coaching services at the annual Worldwide Developers Conference in six weeks.

Here’s The Thing: In the coming months, Apple and other big tech giants are going to be integrating an unusually high number of AI-powered tools into their product set. The race is on and Microsoft have set the pace. But Apple is still the most valuable tech company world and it has a reputation to live up too. Expect to see a regular stream of AI-this and AI-that new features and products. I also expect this to be the point when Apple enters the Search market. Google have been caught off-guard and a post-Google world of Search is already taking shape.

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What else is going on in tech?

• Apple’s savings account, which the company launched last month, attracted almost $1 billion in deposits in the first four days the product was live, and 240,000 accounts were opened by the end of the product’s first week on the market.
• Apple and Google have announced a partnership to tackle unwanted tracking through the likes of AirTags and Tile devices. The companies have proposed industry standards “to help combat the misuse of Bluetooth location-tracking devices for unwanted tracking.”
• Amazon has shut down its Halo health wearables group. The Verge reported that Amazon will stop selling its three Halo products and will lay off some portion of the team.
• Someone posted the entire ‘Super Mario Bros. Movie’ on Twitter and over nine million people watched it before it was taken down.
• Former U.S. President Donald Trump dropped a second round of his digital trading cards.
• Sotheby’s has launched a new NFT marketplace. It’s launching on Ethereum and Polygon, and matching OpenSea’s 2.5% marketplace fee.
• Blur, an NFT marketplace that in recent months has overtaken OpenSea as the most popular venue for trading the digital artwork collectibles, said on Twitter that it is launching an NFT lending service. Customers can use the service, called Blend, to borrow cryptocurrency by posting NFTs as collateral, the company said.

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