Brian McCullough (0:04)

Welcome to the Techmeme ride home for Tuesday, December 3rd, 2024. I'm Brian McCullough. Today the search for a new Intel CEO has begun in earnest, but a change in leadership probably makes a wholesale transformation of the company more likely. China goes tit for tat on banning things why chatgpt can't say certain names and how is that shopping with AI agents thing going? Here's what you missed today in the world of tech. Big follow up on yesterday's big news Reuters says that intel has begun shortlisting a handful of CEO candidates, including former board member Lip Bhutan, who left in August 2024 after clashing with the outgoing CEO Pat Gelsinger. Quote Tan, who was once seen as a contender for the CEO role, has in recent days been approached by Intel's board to gauge his interest in taking up the job, the sources said, requesting anonymity as the discuss discussions are confidential. Tan is an industry veteran and served on Intel's board of directors for roughly two years as part of a plan to restore the company's place as a leading chipmaker. He joined the board in September 2022 and received expanded responsibilities a year later to oversee manufacturing operations. But Tan departed in August after clashing with Gelsinger on several aspects of Intel's turnaround plan, including the size of the company's workforce, its contract manufacturing strategy and its work culture, Reuters has reported. Tan has previously served as CEO of Cadence Design Systems, where he spent more than a decade and helped turn around the then ailing design software maker's fortunes. End quote. Tan is not the only candidate, though. They are apparently the frontrunner at the beginning of the search to follow up on what happened. It looks like what we might have suspected happened. Bloomberg's reporting says that Intel's board gave CEO Pat Gelsinger the option to retire or be removed after the board board lost confidence in his plans to turn the company around. The clash came to a head last week when Gelsinger met with the board about the company's progress on winning back market share and narrowing the gap with Nvidia, according to people familiar with the matter. At last week's meeting, he faced concerns focused on the lack of products capable of winning in the market, something the board felt had been neglected in the push toward turning intel into a made to order chip manufacturer. He was asked to stay on to help with his replacement, but showed little interest in that, the people said. That prompted the decision to end his tenure over the weekend, they said. Whoever replaces Gelsinger will face the same set of problems he was brought in to fix, including the fallout from the poor decisions made by his predecessors. What would have once been the most desirable job in the $500 billion chip industry has become a nearly untenable position. The next CEO has to take on competitors with greater resources and catch up in AI computing, all while showing that intel can be the groundbreaking company it once was. Finding someone to take that hot seat may not be easy. Before Gelsinger was appointed to replace CEO Bob Swan, there was speculation that a number of prominent executives were possible candidates. Many on Wall street proposed approaching Advanced Microdevices Lisa Su for the job, end quote Many are saying that Gelsinger's retirement opens the door for intel to consider fresh deal options, including splitting up the factory and product design divisions and selling the Alterra unit. Quoting Bloomberg again, the board has discussed a range of possibilities in recent months, such as private equity transactions and even a split of Intel's factory and product design businesses. But Gelsinger was opposed to breaking up the company, focusing instead on his plan to restore Intel's technological edge and become a made to order manufacturer for outside clients. It's also an opportunity for suitors to take another look at acquiring some or all of the business. Qualcomm expressed some interest in a transaction before, though nothing got very far, Bloomberg News has reported. This leadership change increases the probability of divestitures, Bloomberg, Bloomberg intelligence analysts Kunjan Sopani and Oscar Hernandez Tejada said in a note Monday. Gelsinger was firmly against breaking up the company, but the prolonged and expensive turnaround has tested shareholder patience, potentially forcing intel to reconsider if the new CEO goes ahead with a bigger shakeup. Here is a list of deal ideas that intel could revisit. Number one Splitting factory and product divisions. This would involve fully separating Intel's factory business from the more profitable unit that develops products. Under Gelsinger, the company has been expanding its manufacturing operations to become a foundry, a maker of components for outside customers. The idea is to eventually compete with Taiwan Semiconductor Manufacturing, a pioneer of the foundry approach. Lure a suitor like Qualcomm. Bloomberg had reported that Qualcomm considered an intel acquisition, but its interests had cooled as of last week. The complexities associated with acquiring all of intel made a deal less attractive, people familiar with the matter said at the time. But Qualcomm could consider buying pieces of intel, such as the product business. Like much of the chip industry, Qualcomm doesn't manufacture its own semiconductor semiconductors. Instead, it designs chips and relies on partners like TSMC to handle production. That's why it's unlikely to want Intel's Factory operations. Number three selling Altera Intel's Altera unit, acquired in 2015 for about $17 billion, makes chips that can be reprogrammed for different uses after they're manufactured. Intel has held negotiations about selling a portion of the business to financial investors, a potential step toward an initial public offering for the unit buyout. Firms such as Francisco Partners, Bain Capital and Silver Lake Management have been stuck. Offers to Invest in Alterra Last month, though, Bloomberg reported that Lattice Semiconductor was considering making an offer for all of Alterra. Lattice is working with advisors and is seeking a private equity backer as it explores a potential bid, people familiar with the process said. An Apollo Investment Apollo offered to make a multibillion dollar investment in intel earlier this year. The New York based firm indicated that it would be willing to make an equity like investment of as much as $5 billion, Bloomberg reported in September. But negotiations didn't lead to an announcement. Number five A mobileye transaction intel acquired Mobileye, a maker of self driving technology, in 2017. Though the business went public in 2022, intel still owns most of the company. That situation has the potential to change under a new CEO in September. Intel said it isn't currently planning to divest its majority stake in Mobileye, but Bloomberg reported earlier in the month that the chipmaker was contemplating options for its 88% holding. I think we've spoken before about turnabouts and how this was possible, so here you go. China is banning shipments to the US of several dual use minerals and metals used in chip making and military applications in a retaliation to new US Chip curbs. Quoting the Financial Times, China's Commerce Ministry on Tuesday said it would not permit the export of dual use items related to gallium, germanium, antimony and super hard materials to the US and that it would implement stricter controls for graphite related items. The US has broadened the concept of national security, politicizing and weaponizing trade and technology issues and abused export control measures, it said in a statement. To safeguard national security, China has decided to strengthen export controls on dual use items to the U.S. it added, noting that the measures would be effective immediately. Four major Chinese industry associations representing the Internet, auto, semiconductor and communications industries reacted to the US Moves by calling on their members to reduce purchases of US Semiconductors. US Chip products are no longer safe or reliable and relevant. Chinese industries should be cautious in procuring US Chips, said the China Semiconductor Industry Association. The embargoed minerals and metals are used in the production of semiconductors and batteries, as well as communications equipment components and military hardware such as armor piercing ammunition. Beijing had already been strengthening controls on their export in response to tightening Western chip sanctions, with its curbs on shipments of germanium and gallium leading to an almost two fold increase in the minerals prices in Europe. China's latest shipments ban to the US Makes clear President Xi Jinping's government is willing to target Western economic interests to hit back against Washington's chip restrictions. It also highlights Beijing's dominance of the global supply of dozens of crucial resources. China produces 98% of the world's supply of gallium and 60% of germanium, according to the U.S. geological Survey. Washington on Monday imposed a range of new sanctions designed to slow the development of China's semiconductor energy industry. They include tougher restrictions on the export of critical semiconductor manufacturing tools and a ban on the export to China of Advanced High Bandwidth Memory, or hbm, chips, a crucial component in artificial intelligence products. End quote have you heard about the David Mayer AI bug? Apparently ChatGPT refuses to say certain names, including David Mayer, though OpenAI might have fixed the issue with with that particular name. Others still seem to be affected, including David Faber, Brian Hood, and Jonathan Turley. I'm unable to produce a response, it says when you prompt with those names, why might the AI not be able to say some names? It could be a post prompt handling bug, but it's more likely it's because these names are names that people have filed digital privacy requests for, otherwise known as right to be forgotten requests. Quoting TechCrunch who are these men and why does ChatGPT hate them so? OpenAI has not responded to repeated inquiries, so we are left to put together the pieces ourselves, the best we can. Some of these names may belong to any number of people, but a potential threat of connection identified by ChatGPT users is that these people are public or semi public figures who may prefer to have certain information forgotten by search engines or AI models. Brian Hood, for instance, stands out because, assuming it's the same guy, I wrote about him last year. Hood, an Australian mayor, accused chatgpt of falsely describing him as the perpetrator of a crime from decades ago that in fact he had reported. Though his lawyers got in contact with OpenAI, no lawsuit was ever filed. As he told the Sydney Morning Herald earlier this year, the offending material was removed and they released version 4, replacing version 3.5. As far as the most prominent owners of the other names, David Faber is a longtime reporter at CNBC Jonathan Turley is a lawyer and Fox News commentator who was swatted. That is a fake 911 call sent armored police to his home in late 2016. 2023. Jonathan Zittrain is also a legal expert, one who has spoken extensively on the right to be forgotten. And Guido Scorza is on the board of Italy's Data Protection Authority. Each of these persons is conceivably someone who, for whatever reason, may have formally requested that information pertaining to them online be restricted in some way. Which brings us back to David Mayer. There is no lawyer, journalist, mayor, or otherwise obviously notable person by that name that anyone could find. With apologies to the many respectable David Mayers out there. There was, however, a professor DAV David Mayer, who taught drama and history, specializing in connections between the late Victorian era and early cinema. Mayer died in the summer of 2023 at the age of 94. For years before that, however, the British American academic faced a legal and online issue of having his name associated with a wanted criminal who used it as a pseudonym to the point where he was unable to travel. So what can we conclude from all of this? Lacking any Official explanation from OpenAI, Our guess is that the model has ingested or was provided with a list of people whose names require some special handling. Whether due to legal safety, privacy or other concerns, these names are likely covered by special rules, just as many other names and identities are. For instance, ChatGPT may change its responses if it matches the name you wrote to a list of political candidates. As is usually the case with these things, Hanlon's razor applies. Never attribute to malice or conspiracy that which is adequately explained by stupidity or syntax error. 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Finally today, if the next era in AI is the bot era, how is that kicking off? Well, early tests show perplexity AI's shopping agent, which lets users make purchases in its app, sometimes takes hours to process purchases or fails to buy items entirely. Not great. Bob quoting TechCrunch Perplexity recently released an AI shopping agent for its paying customers in the United States. It's supposed to navigate retail websites for you, find the products you're looking for, and even click the checkout button on your behalf. Perplexity may be the first major AI startup to offer this, but others have been exploring the space for a while, so expect to see more AI shopping agents in 2025. OpenAI and Google are reportedly developing their own AI agents that can make purchases such as booking flights and hotels. It would also make sense for Amazon, where millions of people already search for products, to evolve its AI chatbot Roof Rufus to help with checkout as well. Meanwhile, Perplexity is partnering with Stripe to leverage some older payments features that have been repurposed for AI agents. But based on our early attempts, Perplexity's shopping agent takes hours to process purchases and sometimes runs into issues where it can't purchase items at all. Overall, using the agent today seems more complicated than buying something on Amazon. Perplexity also says there are human checkers involved to ensure its AI agent is working accurately. Having a human in the loop loop is not uncommon for the AI industry, but then, most AI chatbots don't see the items I'm purchasing and my billing address. This raises some privacy issues for Perplexity and whatever company is hiring its human checkers. TechCrunch tested out Perplexity's shopping agent by asking it to buy US toothpaste. After prompting Perplexity with I'd like to buy toothpaste, the agent returned several options from Walmart, Amazon and some smaller websites. For a few options, Perplexity offers a button under the product called Buy With Pro, while other options take you straight to the website of the retailer. Buy With Pro is Perplexity's shopping agent. At work. I chose a tube of Crest from Walmart. Without leaving the Perplexity app. I was able to check out and seemingly purchase the toothpaste. But instead of paying Walmart, my bank statement showed that I had paid Perplexity's agent. Three hours later I received an email from Perplexity that its agent was not able to buy me the toothpaste because it was sold out at Walmart. The next day I tried to purchase another tube of Crest with Perplexity Shopping Agency Agent. Eight hours later I got a confirmation from Perplexity that it worked. So what gives? Why did my first purchase get rejected and why did both take hours to complete? While Perplexity Shopping might seem a lot like Amazon or the TikTok shop, where you can buy items from a wide array of merchants who upload and manage storefronts on the platform, it's actually completely different. Perplexity's AI agent seems to be scraping retailers websites and giving you information about their products. Because this process isn't necessarily in real time, it can cause a disconnect between what Perplexity tells you and what a store actually has in stock, which appears to be what happened in my case. Perplexity declined to comment on whether retailers like Walmart were aware that their products were appearing on its app. This suggests that their scraping and purchase process is not authorized by those companies, something that could complicate buying or returning items. You're also not actually buying anything. When you check out in Perplexity's app, you're paying Perplexity the exact amount that items cost, giving its AI agent instructions to buy a specific item, and telling it to fill out your name and shipping address in the process. Sometime later, perhaps hours, the agent executes that task, or at least tries to. This is the equivalent of giving a small pot of money to an assistant in the real world and give them rules about how they're allowed to spend it, said Stripe product lead Jeff Weinstein, who helped build Stripe's AI agent toolkit, in an interview with TechCrunch. But instead of giving money in a pot or otherwise to a real human assistant who I would trust to buy toothpaste on their own, Perplexity's AI agent occasionally needs to be monitored by another human, and even then, it doesn't always work. I can't disclose specifics around how Buy With Pro works, but what I can say is that there is human oversight providing occasional support which ensures that transactions are completed in a timely manner and we avoid issues like purchasing the wrong product, said Perplexity spokesperson Sarah Platnick in an email to TechCrunch. If AI shopping agents really take off, it could mean fewer people going to online storefronts where retailers have historically been able to upsell them or promote impulse purchases. It also means that advertisers may not get valuable information about shoppers, so they can be targeted with other products. For that reason, those very advertisers and retailers are unlikely to let AI agents disrupt their industries without a fight. That's part of why companies like Rabbit and Anthropic are training AI agents to use the ordinary user interface of a website. That is, the bot would use the site just like you do, clicking and typing in a browser in a way that's largely indistinguishable from a real person. That way, there's no need to ask permission to use an online service through a backend permission that could be rescinded if you're hurting their business. End quote. Nothing more for you today. Talk to you tomorrow.