Loading summary
Transcript6 lines
- [00:04]
Brian McCullough
Welcome to the Tech Meme. Write home for Friday, December 27, 2024. I'm Brian McCullough. Today, Microsoft and OpenAI reportedly are having problems deciding on how to make this whole reclassifying as a for profit thing work. Oh, and also they secretly decided on a new definition of artificial general intelligence that is tied to tangible dollar value at the tail end of the year. The most interesting new AI model of the year and of course the weekend long read Suggestions here's what you missed today in of Tech. Couple of interesting OpenAI scoops from the information for you. First up, they're reporting that Microsoft and OpenAI are having trouble sorting out the details of Microsoft's stake in any forthcoming for profit OpenAI entity. Also, they're trying to work out details like the use of OpenAI's IP, the continued collection of 20% of OpenAI's revenue, and more. The companies have been negotiating potential changes in OpenAI structure since around October. Those talks have focused on four Microsoft's equity stake in the for profit entity, whether Microsoft will continue to be OpenAI's exclusive cloud provider, how long Microsoft will maintain rights to use OpenAI's intellectual property in its products as it pleases, and whether Microsoft will continue to take 20% of OpenAI's revenue, according to a person who has talked to Altman about the discussions. The negotiations also reflect the remarkable acceleration of OpenAI's business, as well as its ambitions to develop everything from a server chip to a web browser to a humanoid robot. OpenAI has projected around $4 billion in revenue this year and $100 billion in 2029, mainly off the back of ChatGPT. Given such growth, the terms of its contract with Microsoft, including the 20% revenue share and its reliance on Microsoft servers, are now harder for OpenAI to swallow. It isn't clear when OpenAI and Microsoft plan to complete the process, but they are working quickly and are on the clock. If OpenAI fails to make the change in the next two years, investors in the recent capital raise can take their money back plus 9% interest, a total of about $7.2 billion. If the company continues growing like it has been, it isn't clear they would want to get the money back. Company leaders have told employees OpenAI wants to buy some of their shares after the for profit conversion, so they have every reason to want to make this change. OpenAI has said it capped potential profits for investors to balance shareholder returns with achieving its ethical and social goals of developing AI to benefit humanity. It previously talked to Microsoft, which was entitled to $93 billion in maximum profits about raising the cap 20% per year. If it raised the cap, the actual AGI profit capability target could be closer to $120 billion, including the maximum profits owed to other investors such as Y Combinator and Khosla Ventures. Those kinds of profits are not happening anyt soon, however. OpenAI currently loses billions of dollars a year, and around September this year it told potential investors it didn't anticipate turning its first annual profit until 2029. That means it could take years beyond that point for OpenAI to generate more than $100 billion in total profits. Another growing point of friction between OpenAI and Microsoft involves their cloud computing deal. Contractually, Microsoft is the exclusive supplier of cloud servers to OpenAI and the only company allowed to resell OpenAI's models to cloud customers. But Microsoft has struggled to supply the startup with enough servers to train and run its AI, OpenAI has claimed, and some OpenAI leaders believe the company could increase sales if other cloud providers such as Amazon and Google were allowed to resell OpenAI models. It isn't clear if Microsoft will budge on its cloud exclusivity, but OpenAI has pushed the boundaries of the deal when it comes to getting access to cloud servers without Microsoft's help. In Abilene, Texas, it negotiated directly with other providers, including Oracle, for access to AI servers in the middle of next year. Though Microsoft is technically still the main customer of the project, Microsoft had negotiated the right to block any arrangements OpenAI made with other cloud providers, so it likely would have had to bless the deal before it moved forward. OpenAI also may be getting help from Microsoft's rivals in loosening its cloud grip. Google has asked US authorities to scrutinize and seek to break Apart the Microsoft OpenAI cloud deal on antitrust grounds. But wait, let me back up for a second and underline something that you might have missed between the lines in the previous paragraphs there. The information kind of buried the lead about a previously undisclosed 2023 agreement between Microsoft and OpenAI that defines achieving AGI artificial general intelligence, as the point when OpenAI develops AI systems that generate more than $100 billion in profits. Wake up. A new definition of artificial general intelligence has arrived. Quoting the information again. For OpenAI and Microsoft, its largest investor and exclusive cloud provider, AGI has a very specific definition, the point when OpenAI develops AI systems that can generate at least $100 billion in profits. This is especially important for both parties, because once OpenAI reaches AGI, it can effectively end its arrangement with Microsoft, meaning that the tech giant won't be able to use the technology OpenAI produces after that point. In some ways, it feels wrong to place a price tag on AGI, a concept that OpenAI CEO Sam Altman and his peers have raved about as a major milestone on our journey to a future where AI can help us cure diseases and colonize Mars. But in other ways, it's completely unsurprising. It never would have made sense for a multi trillion dollar technology company like Microsoft to have OpenAI make such a consequential decision based on a subjective calculation. Luckily For Microsoft, the AGI pronouncement seems a long way off, since OpenAI has projected it'll lose billions of dollars until it finally turns a profit in 2029. As we noted in the piece, though, there are some aspects of the AGI declaration that are open to interpretation, and as part of the current negotiations, it's possible OpenAI could amend its rules so that Microsoft could keep using the tech after AGI is achieved. Still, with this new knowledge, it's funny to see Altman and other AI execs try to work AGI into every speech. And over time Altman has toned down the importance of AGI, saying things like quote AGI is basically the equivalent of a median human that you could hire as a co worker and quote my guess is we will hit AGI sooner than most people in the world think and it will matter much less. End quote. Indeed, he's emphasized super Intelligence, the aforementioned advanced AI that can help us cure diseases and colonize Mars, as the real end goal to worry about. I wonder how much that level of intelligence would be worth to Microsoft. End quote.
- [07:08]
Elad Gill
Foreign.
- [07:13]
Brian McCullough
I've got another new AI model to tell you about, but wait, wait, I can already hear you rolling your eyes or hitting fast forward. So let me tell you up front why I think this one is different and notable. Deepseek is a Chinese AI company, so that's a bit different. And they've released Deepseek V3 which they claim outperforms top models like GPT4O, though lots of people say their models are cutting edge and beat the current leaders in the clubhouse. But also it's an MOE or mixture of experts model, so that's different. And Deepseek v3 is open source, so that's also notable. The idea that open source models can outperform the proprietary black box ones is interesting, but also get how much they're saying they're outperforming this state of the art. They say that their model has 67071 billion total parameters with 37 billion parameters activated per token. And get this quoting Venture Beat Notably during the training phase, Deep SEQ use multiple hardware and algorithmic optimizations, including the FP8 mixed precision training framework and the dual pipe algorithm for pipeline parallelism to cut down on the costs of the process. Thus overall it claims to have completed Deep Seq V3's entire training in about 2788K H800 GPU hours, or about $5.57 million assuming a rental price of $2 per GPU hour. This is much lower than the hundreds of millions of dollars usually spent on pre training large language models. Llama 3.1 for instance, is estimated to have been trained with an investment of over 500 million. So that's why this is notable. A model that is outperforming the state of the art that only took $5.5 million to train versus $500 million to train. Quoting no less than Andrej Karpathy on X for reference, this level of capability is supposed to require clusters of closer to 16,000 GPUs. The ones being brought up today are more around 100,000 GPUs. Eg Lama 3 405B used 30.8 million GPU hours, while DeepSeek v3 looks to be a stronger model at only 2.8 million GPU hours, or around 11 times less compute. If the model also passes VIBE checks, for example arena rankings are ongoing. My few quick tests went well so far. It will be a highly impressive display of research and engineering under resource constraints. Does this mean you don't need large GPU clusters for Frontier LLMs? No, but you have to ensure that you're not wasteful with what you have. And this looks like a nice demonstration that there's still a lot to get through with both data and algorithms. And here's Elad Gill Good evidence that a lot of efficiency is being left on the table in US labs with massively scaled clusters. And to that end, quoting Bojan Tungu's all the export bans on high end semiconductors might have actually been counterproductive in the worst way imaginable. They seem to have forced Chinese researchers to be far more ingenious and resource efficient than they might have otherwise been. It also seems to confirm my own hypothesis that we are far, far away from having the best algorithms for the ML part of AI, end quote. But back to VentureBeat to sum this up quote the work shows that open source is closing in on closed source models, promising nearly equivalent performance across different tasks. The development of such systems is extremely good for the industry as it potentially eliminates the chances one big AI player ruling the game. It also gives Enterprises multiple options to choose from and work with while also orchestrating their stacks. Currently, the code for DeepSeek v3 is available via GitHub under an MIT license, while the model is being provided under the company's model license. Enterprises can also test out the new model via deepseek Chat, a chatgpt like platform, and access the API for commercial use. Deepseek is providing the API at the same price as deep seq v2 until February 8th. After that it will charge $0.27 per million token inputs and $0.07 per million tokens with cash hits and $1.10 per million output tokens. End quote if you listen to this podcast, you care about what's going on in the world. Listening to us is great, but if you want even more great coverage of our crazy world, you should subscribe to the Washington Post. You don't really need me to tell you about the Washington Post when it comes to their tech coverage, because I quote from them all the time. But it's not just tech that they're good at, they're one of my personal go to's for all the things beyond tech too. I even signed up to get the Post4U newsletter, which sends me my very own personalized roundup of stories every morning based on my interests and reading history. Their app makes it easy for me to stay up to date on the latest news, save and share stories, and follow my favorite authors. The Post even offers a cool feature for audio lovers like you. You can actually listen to articles in addition to reading them, so you can tackle your to do list and catch up on the news at the same time. Now more than ever, it's important to stay up to date on the world. So go to washingtonpost.com ride to subscribe for just 50 cents per week for your first year. That's 80% off their typical offer, so this is truly a steal. Once again, that's washingtonpost.com ride to subscribe for 50 cents per week for your first year.
- [12:55]
Jacob Novak
I use Shopify with my 25 year old business, ResumeWriters.com, but so does Thrive Cosmetics and Silicon Valley's weekend uniform supplier Cotopoxy. An often overlooked secret to successful businesses is often actually the business behind the business making, selling, and for shoppers, buying. Simple. For millions of businesses, that business is Shopify. Nobody does selling better than Shopify, home of the number one checkout on the planet. Also, the not so secret secret shop pay that boosts conversions up to 50%, meaning way less carts going abandoned. If you're into growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed, and everywhere in between. Upgrade your business and get the same checkout I use for my e commerce company. Sign up for your $1 per month trial period at shopify.comride all lowercase go to shopify.comride to upgrade your selling today shopify.com ride.
- [13:59]
Brian McCullough
Time for the weekend long read suggestions first up as I've said several times recently, one of the biggest stories of the year has been the annus horribilis the video game industry has had in 2024. But it's not just layoffs. It's not just consolidation. It's not just poor sales. It's also that the very fundamental model the entire industry has been operating under for at least 20 years seems to be fraying around the edges. For example, the New York Times takes a look at how making cinematic games the cutting edge graphics are getting so expensive and time consuming that investing in graphics is seemingly providing diminishing financial returns. One way to understand the video game industry's current crisis is by looking closely at Spider Man's Spandex. For decades, companies like Sony and Microsoft have bet that realistic graphics were the key to attracting bigger audiences. By investing in technology, they have elevated flat, pixelated worlds into experiences that often feel like stepping into a movie. Designers of last year's Marvel's Spider Man 2 used the processing power of the PlayStation 5 so Peter Parker's outfits would be rendered with realistic textures and skyscraper windows could reflect rays of sunlight. That level of detail did not come cheap. Insomniac Games, which is owned by Sony, spent around $300 million to develop Spider Man 2, according to leaked documents, more than triple the budget of the first game in the series, which was released five years earlier. Chasing Hollywood realism requires Hollywood budgets, and even though Spider Man 2 sold more than 11 million copies, several members of Insomniac lost their jobs when Sony announced 900 layoffs in February. Cinematic games are getting so expensive and time consuming to make that the video game industry has started to acknowledge that investing in graphics is providing diminishing financial returns. It's very clear that high fidelity visuals are only moving the needle for a vocal class of gamers in their 40s and 50s, said Jacob Novak, a former executive at Square Enix who left that studio known for the Final Fantasy series in 2016 to start his own media company. What does my seven year old son play? He asked. Minecraft? Roblox? Fortnite? End quote. In other words, games that graphics don't really matter at all. For then from the Atlantic the rise and fall of the Meme of the year Hoktua the way Hayley Welsh has told the story on her podcast, she initially spent weeks hiding from the hawk to a meme barricaded in her bedroom streaming ROM coms. She was embarrassed by the joke, which she had told while drunk and horrified by the number of people who had seen it. A friend persuaded her to come out of her room only because other people were profiting off of her selling bootleg merch and getting views on their own videos that used the clip. It would be silly not to get her own piece of the pie, especially because the pie might soon be gone By July. She was everywhere. End quote and then Wired takes a look at how the paper passport is dying Quote the push to remove paper passports is happening worldwide. So far, airports in Finland, Canada, the Netherlands, the United Arab Emirates, the United Kingdom, Italy, the United States, India and elsewhere have been trialing various levels of passport free travel or the technology needed to make it happen. In October, officials in Singapore announced that its residents can fly to and from the country without using their documentation, and foreign visitors can enjoy the convenience of passportless clearance when they depart Singapore. More than 1.5 million people have used the systems, officials claim. While trials around the world are at different stages and use different technical infrastructure, they broadly work in similar ways. Information historically stored in your passport's NFC chip, including facial data, is instead stored digitally and linked to your phone. The EU is planning to build an official travel app for this. When you are at an airport, the phone can be shown and a face recognition camera will try to match you to the passport photo. Quote and finally, finally, this is something that our family did just this very week. Also from Wired, what with AI voice cloning, supercharging scams where people call your loved ones using your own voice. And you gotta imagine that video cloning is months away from being equally as good. You probably need to come up with a family password. That way, when someone calls grandma on FaceTime with your face or voice asking for money, she can say what's the password? And if the scammer doesn't have it, she knows it isn't you. Again, we did this this week because the family was all together and we could collectively decide on a password we'd all remember, but also because, you know, I have thousands of hours of my voice and my face online. But seriously, you should consider doing this too, no matter what your situation. Quote as with your online passwords, there are things you should and shouldn't do when it comes to creating a shared passphrase. For starters, you shouldn't make a passphrase the same as your passwords, and they be things a scammer could easily find, such as street names, birthdays, pets, or other personal information that may be shared online. Consider anything that you or your loved ones post online as data available to scammers, england said. Even if you keep all social media private, your data is available to your connections and followers, who can be hacked. A good family passphrase, according to Starling Bank's advice, could be anything that is unique, easy to remember, and can ideally be shared with friends and family in person. The guidelines give some hypothetical examples, such as a short phrase like cheese puff or rainbows and dragons, or a mnemonic device like abc, which stands for Ants bake cakes. Avoid joking about your code word in your text messages, social media posts, etc. Tobek says. We see folks make a family code word and then it's hashtag in their Instagram post. That's not a great idea. It's got to be kept private. Tobek says that while family passwords can be useful, it's crucial to be aware of their potential limitations. We have to remember how human beings actually act in an emergency, she said. For instance, if someone has really been in a car accident, Tobac says it's likely adrenaline would kick in and they may not remember a passphrase. Tobac recommends using a method she calls being politely paranoid, which at its simplest is trying to verify the identity of the person who is contacting you by a second method. If you receive a call from a nephew who says they are in an accident and need money for legal fees, you can say cool 100%. I can help you. I just texted you a word. Go ahead and read that out to me. End quote. You might remember that my wife the architect works as an architect on Broadway, so she knows tons of Broadway singers and actors because she works with them. So she recommended a voice trick that she's seen all of that vocal talent use on Broadway, a nebulizer. I got a cheap one from Vicks over this holiday week and I've been using it. My voice isn't 100% back yet, but it's getting there I'll talk to you on Monday and then we'll figure out how many shows we're gonna do next week. The New Year's week. I guess it'll be news dependent probably. Anyway, hope you're having fun with family as I am. See you on Monday.
- [21:15]
Elad Gill
Did you know that you can make your life saving donation to Doctors Without Borders go even further? Whether you donate stock, recommend a grant through your donor advised fund, or make an IRA qualified charitable distribution, you can take advantage of strong market performance this year to maximize your charitable impact, making it possible for Doctors Without Borders to stay ready to respond in more than 70 countries around the world. Together, we go further explore ways to give@doctorswithoutborders.org podcast.