Welcome to the Techmeme Ride Home for Thursday, August 29th, 2024. I'm Brian McCalla. Today, Nvidia's earnings were huge, but because they didn't manage to beat the biggest expectations out there, it's kind of a miss. Pauvel Durov has been formally charged by France, does TikTok fall outside of Section 230 protections, and it seems like the effort by the car companies to wean themselves off of smartphone tech is not going great. Here's what you missed today in the world of tech.
Nvidia reporting earnings is such a big deal these days that a bar here in Manhattan held an earnings watch party that hundreds of people showed up for. Nvidia reported Q2 revenue was up 122% year on year to $30 billion above the $28.7 billion estimate, and forecast Q3 revenue above various estimates and approved an additional $50 billion in share buybacks.
So, all good, right? Still growing revenue over 100% – nice work if you can get it. Why then was the stock down 4% or so this morning? Apparently, its cousin video failed to top the highest expectations, and reported gross margins of only 75.1% versus the 75.5% which was estimated, so some disappointment that they didn't just break the fundamental laws of the universe with their numbers, and small concern about margin compression, though should be noted, those margins are still 75%.
On the call, Jensen Huang said Nvidia's new blackwell chips will have lots and lots of supply, and the company expects billions of dollars in revenue from those chips as early as Q4. Quoting Bloomberg, we're going to have lots and lots of supply, and we will be able to ramp, he said Wednesday in an interview on Bloomberg television. Samples of the chip are already going out quote all over the world today, and the company has started volume production.
The availability of the blackwell chip first announced earlier this year has become a key focus for Nvidia investors and analysts. The product is a much anticipated successor to the company's hopper line of so-called AI accelerators which have sent its revenue and stock price soaring.
But production challenges have raised concerns about delays. Earlier Nvidia disclosed that it had to revamp part of the manufacturing process, even with the changes the company expects to have billions of dollars of revenue from blackwell in its fiscal fourth quarter, heading into the earnings report analysts had expressed concerns that blackwells problems might derail Nvidia's rapid growth and even slow the spread of artificial intelligence.
Huang said on Bloomberg television that he thought he was clear enough about blackwell's prospects. Functionality of blackwell is wonderful, he said. Beyond the revenue it will generate in the fourth quarter which ends in January quote, we will have a great next year as well, Huang said and quote. The press conference has officially charged Pavel Dorov with complicity in the spread of CSAM and other crimes on Telegram. Prosecutors set a 5 million euro bail and banned him from leaving France.
The case against Dorov paints a picture of a platform almost entirely uncooperative with authorities and includes allegations that Dorov refused to help agencies run legal wiretaps on suspects. Paris prosecutor said in a statement late Wednesday, Darov faces further accusations of enabling organized criminals to carry out unlawful transactions on the platform.
The 39 year old billionaire posted bail of 5 million euro after being questioned by a judge on Wednesday and following four days of police custody. He's not allowed to leave France and must check in with the authorities twice a week. It is unusual to target executives for crimes committed on their platforms, although the cases were somewhat different to the allegations against Dorov US prosecutors have done so on occasion.
Ross Albrecht was sentenced to life in prison in 2015 for running an online drug bizarre called Silk Road, Binance founder Chang Peng Zhao pleaded guilty to anti money laundering and sanctions violations last year. Dorov has drawn support from many in the social media industry since his arrest on Saturday when disembarking from a private jet at a Paris airport.
Ex owner Elon Musk called for his release in a post that suggested the case raises concerns over free speech. Paris prosecutor Laurie Becow said that while telegram appeared in numerous cases that focused on crimes on minors, drug trafficking or online hate, her teams noted the platform's quote near complete lack of response to legal requests for cooperation, a similar situation was reported by authorities in neighboring countries including Belgium.
That's what led General Co to open an investigation into the possible criminal responsibility of the messaging apps executives in the commission of these offenses because said referring to her unit focusing on organized crime. David Oliver Kaminsky and attorney for Dorov said Thursday that the app abides by European laws. It is absurd to claim that a platform or its owner are responsible for abuse of that platform.
The French judiciary is notoriously slow to process cases pressing charges is a key point in French probes but a criminal trial if any is ordered maybe several months or even years away. National rally leader Marie Le Pen is due to face trial in September over allegations dating back about a decade ago. Meanwhile, UBS group AG is still fighting a case that was triggered by a 2008 whistle blowing report.
In the telegram case, investigators will likely seek to question additional suspects or witnesses and Dorov will have an opportunity to challenge investigators findings before any decision is made on holding a trial. Dorov can also appeal the order to stay in France and the authorities have in the past allowed suspects to travel to visit an ailing family member.
Dorov was born in Russia and holds passports from there as well as France and the United Arab Emirates. The charges Dorov currently faces could result in as much as 10 years in jail. More legal stuff and this could turn out to be nothing in the end but a US court has ruled Tiktok must face a lawsuit over a 10 year old's death and the blackout challenge saying algorithmic curation isn't a good deal. It's a vector for piercing the liability veil that hasn't been tried before.
Quoting writers, a US appeals court has revived a lawsuit against Tiktok by the mother of a 10 year old girl who died after taking part in a viral blackout challenge in which users of the social media platform were dared to choke themselves until they passed out.
The law does not bar Nyla Anderson's mother from pursuing claims that Tiktok's algorithm recommended the challenge to her US Circuit Judge Patty Schwartz writing for the three judge panel said that section 230 of the communications decency act of 1996 only immunizes information provided by third parties and not recommendations Tiktok itself made via an algorithm underlying its platform to acknowledge the holding was a departure from pass court rulings by her court and others holding that section 230 immunizes an online platform from line.
The online platform from liability for failing to prevent users from transmitting harmful messages to others but she said that reasoning no longer held after a US Supreme Court ruling in July on whether state laws designed to restrict the power of social media platforms to curb content they deem objectionable violate their free speech rights in those cases the Supreme Court held a platform's algorithm reflects quote editorial judgments about compiling the third party speech at once in the way that it wants short said under that logic.
Content curation using algorithms is speech by the company itself which is not protected by section 230 Tiktok makes choices about the content recommended and promoted to specific users and by doing so is engaged in its own first party speech she wrote Tiktok did not respond to requests for comment and quote.
Sources are telling the journal that open AI is in talks to raise funding at a greater than 100 billion dollar valuation thrive capital is leading this new round and will invest around one billion dollars they say and Microsoft will also invest as well quote open AI was last valued at 86 billion dollars late last year when employees sold existing shares thrive a New York based firm founded 15 years ago by Josh Kushner
already has a close relationship with open AI and its chief executive Sam Altman it has put several hundred million dollars into the start-ups since last year it couldn't be determined what other investors are participating in the new funding round in recent weeks one or more
current open AI stockholders have been negotiating to sell their shares at a price that would value the company at 103 billion dollars according to documents viewed by the Wall Street Journal any new investors would likely value open AI at around that price or higher not including the additional money raised
raising prodigious amounts of capital is critical for Altman's goal to create artificial general intelligence which is company defines as autonomous systems that can outperform humans at most economically viable tasks such technological leaps require huge volumes of data processed and warehouses of supercomputers outfitted with expensive power hungry chips open AI spent more than a hundred million dollars to build GPT for its most powerful AI model to date it is currently working on its next model which is expected to cost more end quote
yeah probably a lot more remember our recent discussions about potentially one billion dollar models coming down the pike given the math on the money we know open AI has already raised it seems inevitable that they will need to raise more soonish
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anti piracy group ace says it has worked with hanoi police to shutter Hanoi based f movies and its affiliates calling it the largest pirate streaming operation in the world quoting the Hollywood reporter in anti piracy coalition comprised of major studios in the u s and across the globe is claiming victory against f movies a significant streaming operation based in Vietnam
on Thursday the alliance for creativity and entertainment revealed that it had worked with Hanoi police to shutter f movies and affiliated sites which together made up quote the largest pirate streaming operation in the world according to the organization with sites including b flicks flicks tours movies seven my flickser and anna wave in addition to f movies the operation attracted more than 6.7 billion visits between January 2023 and June 2024 a says
the effort also shut down video hosting provider vi dis v i d s c r dot t o not sure how to pronounce that and its affiliated sites which were operated by the same suspects per ace two Vietnamese men were arrested by Hanoi police in connection with f movies and have yet to be charged with governing members
including netflix apple tv plus amazon and the Walt Disney studios among others ace works with law enforcement domestically and internationally to fight online piracy of entertainment the group also pursues litigation and sends out season to cis letters its international members include bbc studios can out pluce group televisa mbc group and RTL
and the mpa for some time with riftkin noting that one third of its traffic came from the u s and a twenty twenty four speech at cinema con the office of the u s trade representative has included the site on its annual review of notorious markets for counterfeiting and piracy for several years running alongside other sites including the pirate bay and the
one three three seven acts per data aggregation company similar web f movies dot t o was the two hundred and 80th most popular website in the world across all categories in twenty twenty three subreddit dedicated to f movies and piracy have noticed the shutdowns and recent days and have been discussing alternative websites
one poster asked can anyone message me with any decent sites please i don't really want to sit and have to watch youtube all day every day i was literally in the middle of watching call the midwife when it got removed and quote said another between last night and this morning everyone woke up to the streaming apocalypse of their beloved sites being deleted by uncle sam anyone who's posted a link or name dropped a site on this page congrats it's your fault and quote
finally today we've discussed before the tension between the tech platforms and the car companies as cars become more smart and more connected to what degree would the delight would the relationship you have with your car be owned by not the car brand itself but owned by say apple car play and android auto fearing they are being disintermediated companies like gm are creating their own infotainment systems and in some cases blocking the use of things like car play
so how's that going well quoting gelapnik after seven months and thirteen thousand miles with a twenty twenty four Chevy Silverado zr two motor trend discovered that the system has some flaws the system would suddenly freeze at the most in opportune and random times when this happened not only did the maps stop working but speed limit information displayed in the driver information screen and head up display froze as well navigating to the infotainment systems google maps app
while the system is frozen results in the displaying of a searching for GPS error message motor trend says the best solution they could find was a complete system reboot when that happens which requires holding the phone hang up button on the steering wheel for fifteen seconds with the truck running pretty annoying another annoying problem was the voice control function gm says that drivers can say hey google and then control various functions in the car just by saying them like climate control fans
speed or changing a radio station except it's not that simple simply stating tune to the Disney Channel will result in failure instead the prompts would need to be tune the radio to the Disney Channel on serious XM it's nuanced but important the same goes for navigation instead of take me to the trader Joe's in El Segundo you need to say give me directions to the trader Joe's store on Rosencrantz Boulevard in El Segundo California
you also need to speak slowly and anunciate clearly for the system to get most requests on the first try there's also an app store with apps like ways however motor trend says it's so slow to load and inputting an address is so difficult that they gave up on using it the first time they tried it the worst part of the system you have to pay for a data access plan if you want to use its connected features like Google maps choosing not to pay for on star will result in the loss of access to certain features
these include the Google Play app store Google assistant and most alarming Google Maps that's right without a paid subscription or $75,000 $20 24 Chevy Silverado ZR2 doesn't offer access to its native navigation system this means that without purchasing one of on stars connected vehicle plans which range from 2999 to 4999 a month Google Maps assistant Google Play Store and other connected features are all rendered useless
I confirmed this with on star who said that yes if there's no connected vehicle data subscription you can't use any Google built-in features luckily there's a big workaround you can still connect your phone and use wireless car play and Android Auto however with GM planning to abandon phone mirroring features like car play it's only a matter of time before the automaker closes that loophole end quote
I'm sharing the story to also share this bit of back of the envelope math from friend of the show Parker Thompson quoting his thread per Google GM did $156 billion in revenue last year selling 5.9 million cars at an average wholesale price of $26,000
their net margin was around 6% so average profit was $1600 per vehicle so made up napkin math assuming subscriptions are $25 a month at a 40% margin if sales were to drop 20% because a lot of drivers hate this but they get 70% of buyers to subscribe for five years because they need maps they still make money making the product worse
sass is a hell of a drug and quote I could be a genius if I just put my mind to it I know that's not how you pronounce the word genius but that's how he pronounces it in the song somewhat dumb song lyric or the greatest high school yearbook quote ever you decide talk to you tomorrow