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Brian McCullough
Welcome to the Tech Meme Ride home for Thursday, January 23rd, 2025. I'm Brian McCullough. Today okay, that whole AI data center joint venture thing seems to have gotten messy. A ByteDance board member thinks TikTok might have a way out without selling, Netflix rakes in a bunch of Oscar nominations, and humanity's final exam has been formulated to see when AI has actually graduated to true intelligence. Here's what you missed today in the world of tech. So as I described yesterday, there were some doubts raised in some corners about that whole Stargate joint venture announcement, but that has blown up into a whole ball of speculation. Some say this was just a vaporware like announcement to generate headlines and goodwill with the new administration. Sam Altman and Elon Musk got into it on socials after Musk tweeted that SoftBank didn't have the money secured. As he said, Altman replied wrong, as you surely know. Want to come visit the first site already underway? This is great for the country. I realize what is great for the country isn't always what's optimal for your companies, but in your new role, I hope you'll mostly put emoji American flag first. The information says that Sam Altman told some colleagues that OpenAI and SoftBank will each commit $19 billion to Stargate, and OpenAI would effectively hold a 40% interest in the joint venture. Altman's comments on Tuesday suggest the company will have to raise $19 billion through equity or debt, and company leaders previously told colleagues they were prepared to raise debt for data center projects. The company, projected to generate about $4 billion in revenue last year while still burning considerable sums of cash due to high computing costs. OpenAI raised $6.6 billion in equity funding last fall at a $157 billion valuation, and has raised a total of about $20 billion, mostly from Microsoft, which has rights to OpenAI's intellectual property but is largely unaffiliated with Stargate. The scale of the data center venture is unprecedented. On Wednesday, Altman likened Stargate to a venture fund, with OpenAI and SoftBank as two of the general partners. Two other general partners will be Oracle and mgx, an Abu Dhabi fund that also owns a piece of the new Delaware registered venture. GPS, would commit $45 billion in total to the project, he said, implying that $7 billion would come from Oracle and MGX. The rest of the money for Stargate would come from investors categorized as limited partners as well as several types of debt financing. Such debt could eventually trade, he said. Altman said OpenAI would be a customer of Stargate, but would also have operational control of it. It's possible that Stargate would raise even more capital than the $500 billion that San had stipulated, at which point OpenAI would lose some control, end quote. Now remember, the OpenAI led Stargate announcement only mentioned Microsoft as a tech partner, and sources are telling the Journal that Microsoft and OpenAI were arguing over Microsoft's ability to fulfill OpenAI's computing needs in the months leading up to the Stargate announcement. So is this just the long whispered about micro an OpenAI divorce starting to come out in public? Quoting the Journal in the months leading up to the announcement, the two sides had been haggling over what to do about OpenAI's seemingly insatiable appetite for computing power and its contention Microsoft couldn't fulfill it, even though their agreement didn't allow OpenAI to easily switch to others, said people familiar with the discussions. OpenAI is almost certainly reliant on Microsoft to provide it with the data centers it needs to build and operate its sophisticated AI software. That has been a part of their agreement since Microsoft first invested in 2019. With the success of ChatG, OpenAI's need for computing power surged. Its executives have said ending the exclusive cloud contracts could be crucial to compete with rival AI developers that don't have the same constraints. The two have been arguing over capacity on and off for years, the people said, and talks have intensified in recent months. Like other tech giants, Microsoft has rapidly increased its investment in AI infrastructure and recently said it would spend $80 billion on AI data centers in its current fiscal year. But it also has other customers and partners besides OpenAI. OpenAI has wanted Microsoft to allow it to get cloud computing elsewhere, such as Google. Microsoft has insisted that would be a violation of the exclusivity agreement. Altman has complained that Microsoft was violating the agreement by not providing it with enough data center capacity, people familiar with the matter said. Last year, OpenAI and Microsoft discussed building their own supercomputer for training OpenAI models, but it didn't happen, people familiar with the matter said. Some of the details about the supercomputer were earlier reported by the Information. While Microsoft wasn't the center of the announcement this week, Altman maintained that his relationship relationship with his biggest backer remains good. When one X user said Stargate meant that the friendship between OpenAI and Microsoft was over, Altman responded with a popular Internet misspelling of the word more Absolutely not very important and huge partnership for a long time to come, he posted. We just need more compute. Details of Stargate's structure and financing are still unclear. If the venture builds even part of the announced infrastructure, it could give OpenAI a competitive advantage. For Microsoft, Stargate could mean it has less of a hold on its AI partner, but also be exposed to less risk. In its own announcement coinciding with the Stargate rollout, Microsoft said much about Its relationship with OpenAI will remain the same. It will continue to host OpenAI software on its Azure cloud computing platform. That means when people use software like ChatGPT, OpenAI has to pay Azure. It will also continue to build some new Data Centers for OpenAI. End Quote ByteDance board member Bill Ford says ByteDance is exploring alternatives to selling TikTok US including a change to local control to comply with the US Ban law. We are optimistic we will find a solution, ford said, speaking at the World Economic Forum in Davos. There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell, I'm optimistic about the dialogue that is emerging between President Trump and President Xi, ford said. That might help create a much more constructive environment, a much higher level of engagement that could lead to a positive solution. We'll get on with it as soon as maybe the end of the week in terms of negotiating what might work. The Chinese government, the US Government and the company and the board all have to be involved in this conversation, ford said, adding that there could be solutions, quote, short of divestiture. The objective is for TikTok to continue operating, he said. Ford is also the chief executive officer of General Atlantic, which is an investor in ByteDance, TikTok's parent company. Here's a weird one, France says David Balland, co founder of French crypto wallet startup Ledger, was kidnapped from his home on January 21 and freed yesterday after a police operation. Quoting Bloomberg after his kidnapping, Balland was taken in a car to another address where he was held captive. Emergency services are now treating him, the prosecutor's office said. End quote Founded in 2014, Ledger has emerged as a key player in the crypto security landscape, known for its specialized hardware wallets that help investors safeguard their digital assets. In 2023, the company raised a 100 million euro funding round, pushing its valuation to 1.3 billion euro. In 2019, in a strategic move to control its manufacturing process, Ledger established a production facility in Vierzone, a quaint French town in the heart of the country. Between that facility and the company's headquarters in Paris, the company has approximately 700 employees. As one of Ledger's founding team in 2014, Balland played a pivotal role in the company's growth story, particularly during his tenure as site director of the vierzun factory from 2019 to 2021, according to his LinkedIn profile. Obviously too early to speculate on details or motives here, but you would imagine plenty of nefarious parties might want a way to hack into Ledger's crypto wallet. 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Another one from the youe car is tracking you like your phone tracks you file Researchers have detailed Subaru's now fixed web vulnerabilities that let them track millions of Subarus via its Starlink features in the U.S. canada and Japan. Quoting Wired, you can retrieve at least a year's worth of location history for the car where it's pinged precisely, sometimes multiple times a day, researcher Sam Curry says. Whether somebody's cheating on their wife or getting an abortion or part of some political group, there are a million scenarios where you could weaponize this against someone, end quote. Curry and another researcher, Subham Shah, today revealed in a blog post their method for hacking and tracking millions of Subarus, which they believe would have allowed hackers to target any of the company's vehicles equipped with its digital features, known as Starlink, in the U.S. canada or Japan. Vulnerabilities they found in a Subaru website intended for the company's staff allowed them to hijack an employee's account to both reassign control of cars Starlink features and also access all the vehicle location data available to employees, including the car's location every time its engine started. Curry and Shah Report reported their findings to Subaru in late November, and Subaru quickly patched its Starlink security. But the researchers warn that the Subaru web vulnerabilities are just the latest in a long line of similar web based flaws. They and other security researchers working with them have found that affected well over a dozen carmakers, including Acura, Genesis, Honda, Hyundai, Infiniti, Kia, Toyota and many others. There is little doubt, they say, that similarly serious hackable bugs exist in other auto companies web tools that have yet to be discovered in Subaru's case in particular. They also point out that their discovery hints at how pervasively those with access to Subaru's portal can track its customers movements, a privacy issue that will last far longer than the web vulnerabilities that exposed it. The thing is, even though this is patched, this functionality is still going to exist for Subaru employees, curry said. It's just normal functionality that an employee can pull up a year's worth of your location history. The deeper issue lies in Subaru's extensive data collection practices. The company maintains at least a year's worth of detailed location history for vehicles accessible to employees through what Curry describes as essentially a button on Subaru's ad panel. While Subaru has patched these specific vulnerabilities and maintains they've never experienced unauthorized access, the incident spotlights a broader industry trend. As Mozilla foundation recently reported, 92% of modern vehicles offer minimal data control to owners, with 84% of manufacturers reserving rights to share or sell collected information. Robert Harrell from the Consumer Federation of California puts it people are being tracked in ways that they have no idea are happening. Netflix earned 16 Oscar nominations, it was announced this morning, including 13 for Emilia Perez, which is the most nominated film of the year. A24 came in second with 14 nominations. Quoting Variety, Amelia Perez landed 13 nods in total, including best Picture, best actress for Carlos Sofia Gascon, best supporting actress for Zoe Saldana and best director for Jacques Odillard. The streamer also received nominations for Wallace and Gromit, Vengeance Most Foul in the best Animated feature category and for Pab Lauren's Maria for cinematography. End quote. The Studio A24 came in next with 14 nominations spanning their slate of films this year, including the ambitious historical piece the Brutalist and Sing Sing, starring Colman Domingo. The Brutalist matched Wicked with 10 nominations each, positioning them as frontrunners. Universal, which produced Wicked, secured 13 nominations, while their specialty arm focused features, garnered 12 nominations through their popular papal drama Conclave and Robert eggers Nosferatu. While Universal's combined nominations of 25 outpaced Netflix's total, it's worth noting that the Academy's methodology counts awards by individual distributor rather than parent company. Finally today, let me introduce you to humanity's last exam, a new evaluation that those behind it claim is the hardest ever AI test, consisting of around 3,000 multiple choice questions. This is the Turing Test, the Voigtkampf test from Blade Runner, the test to see if the machines have become self aware, quoting the Times for years, AI systems were measured by giving new models a variety of standardized benchmark tests. Many of these tests consisted of challenging SAT caliber problems in areas like math, science and logic. Comparing the model's scores over time served as a rough measure of AI progress. But AI Systems eventually got too good at those tests, so new, harder tests were created, often with the types of questions graduate students might encounter on their exams. Those tests aren't in good shape either. New models from companies like OpenAI, Google and Anthropic have been getting high scores on many PhD level challenges, limiting those tests usefulness and leading to a chilling question, Are AI Systems getting too smart for us to measure? This week researchers at the center for AI Safety and Scale AI are releasing a possible answer to that question, a new evaluation called Humanity's Last Exam that they claim is the hardest test ever administered to AI systems. Humanity's Last Exam is the brainchild of Dan Hendricks, a well known AI Safety researcher and director for the center for AI Safety. The tests originally name Humanity's Last Stand was discarded for being overly dramatic. Mr. Hendricks worked with Scale AI, an AI company where he is an advisor, to compile the test, which consists of roughly 3,000 multiple choice and short answer questions designed to test AI systems abilities in areas ranging from analytic philosophy to rocket engineering. Questions were submitted by experts in these fields, including college professors and prize winning mathematicians who were asked to come up with extremely difficult questions they knew the answers to. Here, try your hand at a question about hummingbird anatomy from the test. Hummingbirds within apodiformes uniquely have a bilaterally paired oval bone, a sesamoid embedded in the quadrilateral portion of the expanded cruciate aponeurosis of insertion of M depressor caudae. How many paired tendons are supported by this sesamoid bone? Answer with a number. Just an aside here. Obviously I couldn't answer that, much less pronounce it, but back to the article. The questions on humanities last exam went through a two step filtering process. First, submitted questions were given to a leading AI model to solve if models couldn't answer them or if in the case of multiple choice questions the models did worse than by random guessing. The questions were given to a set of human reviewers who refined them and verified the correct answers. Experts who wrote top rated questions were paid between five hundred and five thousand dollars per question as well as receiving credit for contributing to the exam. There are other tests trying to measure advanced AI capabilities in certain domains such as Frontier Math, a test developed by EPIC AI and ARC AGI a test developed by the AI researcher Francois Chollet. But humanities last exam is aimed at determining how good AI systems are at answering complex questions across a wide variety of academic subjects, giving us what might be thought of as a general intelligence score. We are trying to estimate the extent to which AI can automate a lot of really difficult intellectual labor, Mr. Hendricks said. Once the list of questions had been compiled, the researchers gave humanity's last exam to six leading AI models, including Google's Gemini 1.5 Pro and anthropic Claude 3.5 Sonnet. All of them failed miserably. OpenAI's Zero1 system scored the highest of the bunch, with a score of 8.3%. Mr. Hendricks said he expected those scores to rise quickly and potentially surpass 50% by the end of the year. At that point, he said, AI systems might be considered world class oracles, capable of answering questions on any topic more accurately than human experts. And we might have to look for other ways to measure AI's impacts, like looking at economic data or judging whether it can make novel discoveries in areas like math and science. You can imagine a better version of this where we can give questions that we don't know the answers to yet and we're able to verify if the model is able to help solve it for us, said Summer Yu, Scale, AI's director of research and an organizer of the exam. End quote. Nothing more for you today. Talk to you tomorrow.