Windows Weekly (WW) Episode 917 Summary: "There Is No 10 - DeepSeek AI, Scareware Blocker, Dev Home Removal"

Release Date: January 29, 2025
Hosts: Leo Laporte, Paul Thurrott, Richard Campbell
Recording Locations: Paul in Mexico City, Richard in London

Overview

In Episode 917 of Windows Weekly, hosts Leo Laporte, Paul Thurrott, and Richard Campbell delve into a variety of Microsoft-related topics, including the removal of Dev Home, the introduction of DeepSeek AI, the launch of a new scareware blocker in Microsoft Edge, and Microsoft's recent financial performance. The episode blends technical discussions with personal anecdotes, providing listeners with both in-depth analysis and relatable experiences.

Microsoft Earnings Preview

[35:19] Paul Thurrott:
Paul begins by anticipating Microsoft's upcoming earnings report, predicting robust results despite recent stock fluctuations influenced by DeepSeek AI's market impact.

Key Points:

• Revenue Growth: Microsoft reported a 12% year-over-year increase in revenue.
• Net Income: A 10% rise in net income was noted.
• Key Segments:
  • Commercial Growth: 16% increase in Microsoft 365 commercial revenues.
  • Azure: Significant 31% growth in Azure cloud services.
  • Windows and PC Makers: A modest 4% increase.
  • Xbox: Only a 2% rise, with gaming revenue declining by 7% and hardware sales down by 29%.

[35:37] Paul Thurrott:
He highlights the market's reaction, emphasizing that despite overall strong earnings, Microsoft's investment in AI infrastructure—estimated at around $20 billion per quarter—has raised concerns. Paul references Steven Sinofsky's perspective on how large tech companies often invest heavily to maintain dominance, potentially setting the stage for external disruption.

Notable Quote:
[36:11] Leo Laporte:
“But when deep AI becomes cheaper, it leads to more widespread use, potentially driving innovation and demand.”

DeepSeek AI and Market Impact

[03:39] Leo Laporte:
The discussion shifts to Microsoft's DeepSeek AI reveal. Paul expresses mixed feelings about the technology's benefits and Microsoft's strategic positioning in the AI landscape.

Key Points:

• DeepSeek AI Integration: Announced as part of Microsoft's AI advancements, DeepSeek is poised to influence various sectors within the company.
• Stock Market Reaction: DeepSeek's announcement led to significant volatility, particularly affecting Nvidia, whose stock saw an unprecedented single-day value drop of approximately 11%.
• Strategic Investments: Microsoft’s substantial investment in AI infrastructure aims to solidify its standing but invites scrutiny regarding its long-term profitability and sustainability.

[40:34] Paul Thurrott:
Paul explains Nvidia's role in AI, emphasizing that Nvidia GPUs are essential for training large language models (LLMs). He notes Nvidia's clever engineering solutions to navigate export restrictions, highlighting the company's resilience and innovation.

Notable Quote:
[42:22] Paul Thurrott:
“Once you go down the path of massive infrastructure buildouts, it's challenging to pivot unless driven by necessity.”

Dev Home Removal

[16:35] Paul Thurrott:
The hosts address Microsoft's decision to deprecate Dev Home, a feature aimed at enhancing the Windows experience for developers.

Key Points:

• Deprecation Timeline: Dev Home is slated for removal by May 2025.
• Feature Migration: Selected functionalities will be integrated into other parts of the Windows ecosystem, such as winget.
• Community Feedback: The feature, initially intended to streamline developer workflows, received mixed reviews, leading to its eventual discontinuation.

[54:05] Paul Thurrott:
Paul reflects on Dev Home's utility, suggesting that while its core purpose was redundant for seasoned developers with established workflows, certain features like the REFS drive setup hold potential broader applications.

Notable Quote:
[55:02] Paul Thurrott:
“With big tech and AI infrastructure investments, scaling efficiently is crucial, but it must align with developer needs to provide genuine value.”

Scareware Blocker in Microsoft Edge

[22:08] Richard Campbell:
Richard introduces a new security feature in Microsoft Edge: the Scareware Blocker.

Key Points:

• Functionality: Utilizes heuristics and AI to detect and block suspicious browser activities that may indicate scareware attempts.
• Activation: Available in preview for all Edge users but requires enabling through the browser settings.
• User Experience: Designed to enhance security for non-technical users by providing clear warnings and preventing fraudulent requests for sensitive information.

[23:22] Leo Laporte:
Leo emphasizes the importance of this feature in protecting users from deceptive tactics that mimic legitimate system alerts, such as fake threats prompting for bank details.

Notable Quote:
[28:04] Paul Thurrott:
“This is most beneficial for people like our parents and non-technical friends, ensuring they aren’t tricked into giving away credit card numbers.”

AI Integration and Tools

[48:51] Paul Thurrott:
A significant portion of the episode is dedicated to discussing AI tools like DeepSeek and GitHub Copilot. Paul shares his experiences using DeepSeek for programming tasks, noting its effectiveness and improved presentation style compared to previous AI assistants.

Key Points:

• DeepSeek Capabilities: Demonstrates advanced capabilities in coding assistance, showing promise in automating and enhancing developer productivity.
• GitHub Copilot Comparison: While GitHub Copilot offers substantial support, Paul encountered instances where it provided incorrect code suggestions, highlighting the need for cautious adoption.

[53:03] Richard Campbell:
Richard discusses the broader AI landscape, referencing Google's Gemini and Brave Search's ReRank feature, which allows users to customize search result rankings based on preferred sources.

Notable Quote:
[71:14] Paul Thurrott:
“With AI integrated into nearly every tool, it's imperative to balance convenience with security to prevent unauthorized access and potential breaches.”

Xbox Becomes the Largest Game Publisher

[84:52] Paul Thurrott:
Paul announces that Microsoft has surpassed other companies to become the biggest game publisher globally, with $465 million in game-related revenue in December alone.

Key Points:

• Comparison with Competitors: Microsoft’s gaming revenue notably outpaces EA's $366 million and others like Activision Blizzard.
• Influence of Activision Acquisition: The strategic acquisition of Activision Blizzard has significantly boosted Microsoft’s game publishing capabilities.
• Phil Spencer’s Strategy: Emphasizes the importance of targeting both Xbox Series S and X, ensuring scalability and adaptability for future gaming platforms, including potential portable devices.

[114:49] Richard Campbell:
Richard elaborates on the implications of this achievement, discussing the integration of Activision Blizzard's titles into Microsoft’s ecosystem and the broader impact on the gaming industry.

Notable Quote:
[115:04] Leo Laporte:
“Microsoft is now the biggest game publisher in the world, reflecting their aggressive strategy and successful integration of key gaming assets.”

Personal Anecdotes and Security Concerns

Throughout the episode, Paul shares his frustrating experiences with account security, including being locked out of his YouTube channel and PayPal business account while traveling. These stories underscore the challenges of relying heavily on centralized platforms for critical functions.

Key Points:

• Account Recovery Issues: Paul recounts the difficulties in regaining access to his accounts, highlighting the vulnerabilities in current authentication systems.
• Password Management: Emphasizes the importance of using password managers and having local backups to mitigate such risks.
• Security vs. Convenience: The hosts discuss the balance between ease of access and stringent security measures, advocating for a middle ground to protect user data without sacrificing usability.

[99:35] Paul Thurrott:
Paul shares his ordeal with YouTube support, detailing the inadequate assistance provided and the convoluted process required to regain control of his channel.

Notable Quote:
[100:33] Paul Thurrott:
“If you rely too much on centralized accounts, a single point of failure could lead to losing access to everything you own online.”

Conclusion and Final Thoughts

As the episode wraps up, the hosts reflect on the pervasive influence of AI in technology and the importance of staying informed and adaptable. They encourage listeners to engage with the content, subscribe to the Windows Weekly club for additional benefits, and participate in community surveys to help tailor future programming.

Notable Quote:
[102:28] Richard Campbell:
“We need to recognize that AI isn't just a passing phase; it's an integral part of our technological future.”

Key Takeaways:

• Microsoft is aggressively investing in AI and infrastructure, aiming to maintain its dominance but facing market scrutiny.
• The removal of Dev Home indicates a shift in Microsoft's development tools strategy, with key features likely migrating to more integrated systems like winget.
• DeepSeek AI shows promise in enhancing developer productivity, though it also contributes to significant market volatility.
• Microsoft Edge's new Scareware Blocker enhances user security, making it a valuable tool for non-technical users.
• Microsoft's acquisition of Activision Blizzard has solidified its position as the leading game publisher globally.
• Personal account security remains a critical concern, highlighting the need for robust password management and backup strategies.

Further Listening: For those interested in a deeper dive into the topics discussed, especially the AI segment and Microsoft's earnings analysis, be sure to tune in to the next episode of Windows Weekly. Additionally, exploring resources like Paul Thurrott's articles on account security can provide valuable insights.

Notable Quotes with Timestamps:

• [35:37] Leo Laporte:
  “But when deep AI becomes cheaper, it leads to more widespread use, potentially driving innovation and demand.”

• [42:22] Paul Thurrott:
  “Once you go down the path of massive infrastructure buildouts, it's challenging to pivot unless driven by necessity.”

• [55:02] Paul Thurrott:
  “With big tech and AI infrastructure investments, scaling efficiently is crucial, but it must align with developer needs to provide genuine value.”

• [28:04] Paul Thurrott:
  “This is most beneficial for people like our parents and non-technical friends, ensuring they aren’t tricked into giving away credit card numbers.”

• [71:14] Paul Thurrott:
  “With AI integrated into nearly every tool, it's imperative to balance convenience with security to prevent unauthorized access and potential breaches.”

• [115:04] Leo Laporte:
  “Microsoft is now the biggest game publisher in the world, reflecting their aggressive strategy and successful integration of key gaming assets.”

• [100:33] Paul Thurrott:
  “If you rely too much on centralized accounts, a single point of failure could lead to losing access to everything you own online.”

Stay tuned for more insightful discussions and expert analyses on Windows Weekly, your go-to source for all things Microsoft and beyond.