Welcome to the Techmeme Ride Home for Wednesday, March 20, 2024. I'm Brian McCalla today. Microsoft hiring DeepMind Co-Founder Mustafa Sullyman to run their new AI division might sound like boring C-suite musical chairs, but it's actually super interesting. Intel gets the first huge check from the Chips Act, Stardew Valley, is breaking gaming records, and the
interesting startup that does AI music. Here's what you missed today in the world of tech. Microsoft has hired DeepMind co-founder Mustafa Sullyman to run consumer AI at Microsoft, reporting directly to Sachin Nadella, and also brought on board most of the staff from his inflection AI startup, which had raised over a billion dollars in just the last year. This is all part of Microsoft creating Microsoft AI, a division slash brand focused on co-pilot and
other consumer AI products. Mustafa Sullyman will be its CEO and Karen Simone, its chief scientist, quoting Bloomberg. Infliction, a rival of Microsoft's key AI partner open AI is shifting to selling AI software to businesses, but will continue operating
its pie consumer chatbot business for now. Infliction in June raised $1.3 billion in one of the largest funding rounds of Silicon Valley's AI frenzy, that round valued the startup at $4 billion, a person familiar with the matter said at the time, Microsoft board member Reid Hoffman is a co-founder of the two-year-old startup alongside Sullyman and Simone and other investors include Microsoft co-founder Bill Gates, former Google CEO Eric Schmidt,
and Nvidia. Infliction's pie chatbot was designed to mimic human understanding of emotions and interact with users in a supportive fashion, while attracting considerable investor interest including from Microsoft and a million active daily users, the startup has not succeeded in finding an effective business model Sullyman said, in the meantime, Nadella
asked him to move over to Microsoft. The new hires also mark another significant step by Microsoft to bolster its in-house AI capabilities and products outside of the relationship with OpenAI. Last month, Microsoft invested $16 million in Mistral AI, a French rival to OpenAI, Nadella on Monday told OpenAI CEO Sam Altman about Sullyman and his team joining Microsoft, the company said, and quote, Okay, so if it wasn't obvious why all of that is raising eyebrows all around the valley,
let me outline some of the interesting bits about this in no particular order. So first off, this is one of the co-founders of DeepMind, basically the OG of modern AI companies. So this is a superstar signing in almost the sports sense. DeepMind is now a division of Google, so there's that too, not exactly stealing a player from another team, but effectively taking the possibility he would return to Google off the board. But then there's the fact
that this is not an acquisition. Microsoft did not acquire inflection. It simply hired most of their staff. Like, remember, that was what was proposed when the whole Sam Altman firing thing was going down. Before he went back to OpenAI, the idea was, hey, Sam, over here to Microsoft take over our AI efforts and bring your team. So I guess they got the idea from that. But like, how does that work? Inflection raised $1.3 billion in venture
capital funding. Reed Hoffman posted on LinkedIn that quote, this agreement with Microsoft means that all of inflections investors will have a good outcome today. And I anticipate good future upside and quote, but what does that mean? How are the investors getting paid? What is the value of inflection if the best part of their team is no longer with the company
as one has to presume Microsoft and Suleiman are taking all the top talent? Is this just a clever way for Microsoft to do an acquisition in all but name regulators are reportedly already circling Microsoft's tight relationship with OpenAI. You'd have to imagine there would basically be no way Microsoft could have acquired a major OpenAI competitor without regulators at least strongly looking at it. So is this kosher? I mean, they have essentially taken out
a major OpenAI competitor, even if that competitor is ostensibly still operating. Then there's the fact that Reed Hoffman, who was a co-founder of inflection, is also on Microsoft's board of directors. Given that, given Bill Gates was an investor in inflection, was this deal made possible by close relationships with Microsoft ties? I'm not suggesting anything nefarious is going on here.
I'm just rattling off some of the questions being asked around the valley. On that note, if you're Sam Altman and you get this news, how do you feel about your relationship with Microsoft? Now, why do you need Suleiman if you already have Altman? If you already have de facto control of OpenAI, if not Dejure control, is Microsoft moving away from OpenAI, diversifying away, whether for regulatory reasons or maybe strategic or even personal reasons? On the face of this,
the biggest loser in this move would seem to be OpenAI. Does this suggest that the era of chat bots is already waning? Like, there are so many of them. Claude, Rufus, Poe, Grock, Gemini, is this a commodity thing now? Is this like the era of search engines before Google? When you had Excite and Altavista and Lycos and Ask Jeaves, all doing pretty much the same thing
in a not very differentiated way? Or is this assigned chat bots are a cul de sac? Before releasing Pi, Suleiman originally said inflection was going to develop a so-called AI chief of staff that would manage various tasks without the need for prompting and interaction. He seemingly wasn't able to do that at a start-up. Is the idea that he can now attempt to make that leap beyond chatbots with Microsoft's unlimited funds and resources? Finally, let me throw this idea out there that I've
been hearing battered around a lot lately. The idea that training AI models is such a specialized thing that people are wondering if a sort of priesthood of AI whisperers is developing. I was just listening to a podcast where the AI investors, Nat Friedman and Daniel Gross were talking about how the whole process of training models, refining models, fine tuning them is so artisanal, literally more art than science. In such a reality, you don't need entire companies. You just need
teams or individuals even. The value is in the literal priesthood, not something like IP or even technology because it doesn't really exist. The genus Iquat is in the literal taste and refinement of the people who know how to make the models dance in the way that an artist has a specific style or refinement that others don't. Is this news proving that that may be the case? Here's a quote from the Financial Times. There's not a list of more than 20 people who could do Suleiman's new job.
Said Aaron Levy, Chief of Cloud Company Box, adding that Microsoft lead in generative AI had been driven by Nadella, identifying the quote, right people at the right time. The US has awarded Intel $8.5 billion in chips, act funding and $11 billion in loans to expand chip making operations in Arizona, Ohio, New Mexico and Oregon. Intel plans to spend $100 billion over five years on such
production expansion, quoting the Financial Times. US President Joe Biden will travel to Intel's site in Chandler, Arizona on Wednesday to announce the package which will go towards building new facilities for the company in the Southwestern state as well as in Ohio, New Mexico and Oregon. The government funding for chip manufacturing which was passed by Congress in 2022 is part of Biden's sweeping agenda to revitalize domestic manufacturing and areas ranging from clean energy
to semiconductors and steel. Intel has already committed to investing $100 billion in chip manufacturing over the next five years. It had said it expected to further benefit from US Treasury tax credits. That would allow it to write off up to 25% of that investment. The $8.5 billion will be distributed in tranches subject to Intel reaching certain milestones. Senior White House officials said they expect the funding to lead to 30,000 jobs in the chip sector. The officials said the funds for
Intel should start to arrive later this year once the agreement is finalized. In total, it is likely to constitute the largest such grant made under the 2022 Chips and Science Act which provided for $52 billion in subsidies to help shift semiconductor manufacturing back to the US amid geopolitical tensions with China. Gina Romando, US Commerce Secretary, told reporters the grant would put the US on track to meet its goal of ensuring that 20% of the world's most advanced chips are made by the
US by the end of the decade. The vast majority of high-end semiconductors are at present manufactured by TSMC. The US relies on, quote, a very small number of factories in Asia for all of our most sophisticated chips. Romando said, which she described as an untenable situation for a US economic and national security perspective. Romando added that further grants under the Chips Act would soon follow. TSMC and Samsung, which also operate facilities in the US,
are both awaiting their own subsidies packages. According to SteamDB, after releasing its massive 1.6 update, Stardew Valley hit 146,159 concurrent players on Steam, a new record on that platform and above PAL world's stats this week, quoting the verge. Stardew Valley's massive 1.6 update has been out on PC for less than 24 hours, and it's already taken the game's popularity to staggering new heights.
The cozy farming simulator hit 146,159 concurrent players on Steam according to SteamDB data, smashing the game's previous record as players flock to enjoy new content, including a new farm, festivals, and pets. Stardew Valley's previous peak of 94,875 concurrent Steam players was achieved back in January 2021, shortly after the 1.5 update was released. By contrast, its new record is higher than any of the concurrent player stats reported for PAL world this week,
which is pretty impressive for a near decade-old indie RPG. Developer Eric concerned Abe Barone had teased some of the new 1.6 update content on X and the run-up to the patch being released yesterday, which likely helped to entice new and existing fans back to the game. Some highlights in the update include a massive new metallands farm optimized for animal rearing, being able to move the farmhouse to a new location, new pets, including turtles, and new cat-slash
dog breeds, and support for multiple pets, and a whole bunch of new NPC dialogue. You can also now drink mayonnaise. Some things haven't been included in the patch notes, so there are a few surprises that will only be discovered by playing the game. The Stardew Valley 1.6 update is currently available on Steam and GOG, a 1.6.1 patch to fix a few bugs, has also already been released. Barone hasn't announced when the update will be ready for console and mobile devices,
but says the game-pass update is incoming soon. Stardew Valley is discounted to just $11.99 right now on Steam for anyone not already swept in by the hype. Recently, the world learned the power of artificial intelligence, a technology cybersecurity leaders have been leveraging for years. Now, as AI expands and evolves, those same security leaders are left wondering where humans fit
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quote democratize making music. I'm just a soul trapped in the circuitry. The voice singing those lyrics is raw and plaintive dipping into blue notes, a low acoustic guitar chugs behind it punctuating the vocal phrases with tasteful runs. But there's no human behind the voice, no hands on that guitar. There is in fact no guitar. In the space of 15 seconds, this credible even moving blues song was generated by the latest AI model from a startup named Suno.
All it took to summon it from the void was a simple text prompt, solo acoustic Mississippi delta blues about a sad AI. To be maximally precise, the song is the work of two AI models in collaboration. Suno's model creates all the music itself while calling on open AI's Chatchy BT to generate the
lyrics and even a title, Soul of the Machine. Online Suno's creations are starting to generate reactions like how the F is this real as this particular track plays over a Suno speaker in a conference room in Suno's temporary headquarters steps away from the Harvard campus in Cambridge, Massachusetts, even some of the people behind the technology are ever so slightly unnerved. There's some nervous laughter alongside members of Holy S and Oh Boy. It's mid-February and we're
playing with their new model V3, which is still a couple weeks from public release. In this case, it took only three tries to get that startling result. The first two were decent, but a simple tweak to my prompt, CoFounder Kenan Freberg suggested adding the word Mississippi resulted in something far more uncanny. Over the past year alone, generative AI has made major strides in producing credible text, images, via services like mid-Jerney and even video, particularly with
open AI's new Sora tool. But audio and music in particular has lagged. Suno appears to be cracking the code to AI music and its founders ambitions are nearly limitless. They imagine a world of wildly democratized music making. The most vocal of the co-founders Mikey Schulman, a boyishly charming backpack-toting 37-year-old with a Harvard PhD in physics envisions a billion people worldwide,
paying ten bucks a month to create songs with Suno. The fact that music listeners so vastly outnumbered music makers at the moment is, quote, so lopsided, he argues, seeing Suno as poised to fix that perceived imbalance. Most AI-generated art so far is at best Kitch. A la the hyper-realistic sci-fi junk heavy on form-fitting spacesuits that so many mid-Jerney users seem intent on generating. But sole of the machine feels like something different. The most powerful and unsettling AI
creation I've encountered in any medium. It's very existence feels like a fissure in reality. At once, on-spiring and vaguely unholy, and I keep thinking of the Arthur C. Clark, quote, that seems made for this generative AI era. Any sufficiently advanced technology is indistinguishable from magic. A few weeks after returning from Cambridge, I send the song off to living color guitarist Vernon Reed, who's been outspoken about the
perils and possibilities of AI music. He notes his wonder, shock horror at the song's disturbing, verisimilitude, the long-running dystopian ideal of separating difficult, messy, undesirable, and despised humanity from its creative output is at hand, he writes, pointing out the problematic nature of an AI singing the blues, quote, an African-American idiom,
deeply tied to historical human trauma and enslavement, end quote. Soono is barely two years old, co-founders Shulman, Freyberg, and George Cuxko and Martin Camacho, all machine learning experts work together until 2022 at another Cambridge company, Ken Show Technologies, which focused on
finding AI solutions to complex business problems. Shulman and Camacho are both musicians who use to jam together in their Ken Show days at Ken Show, the For some worked on a transcription technology for capturing public company's earnings calls, a tricky task given the combination
of poor audio quality, abundant jargon, and various accents. Soono uses the same general approach as large language models like Chatchy PT, which breaks down human language into discrete segments known as tokens, absorb its millions of usages, styles, and structures, and then reconstruct it on demand. But audio, particularly music, is almost unfathomably more complex, which is why, just last year, AI music experts told Rolling Stone that a service as capable as
soon as might take years to arrive. Audio is not a discrete thing like words, Shulman says. It's a wave, it's a continuous signal. High quality audio sampling rate is generally 44 kilohertz or 48 hertz, which means 48,000 tokens a second he adds. That's a big problem, right? And so you need to figure out how to kind of smush that down to something more reasonable. How, though, quote, a lot of work with lots of heuristics, a lot of other kinds of tricks and
models and stuff like that. I don't think we're anywhere close to done. Eventually, Soono wants to find alternatives to the text to music interface, adding more advanced and intuitive inputs, generating songs based on users own singing is one idea. Open AI faces multiple lawsuits over Chatchy PT's use of books, news articles, and other copyrighted material, and its vast
corpus of training data. Soono's founders declined to reveal details of just what data they're shoveling into their own model, other than the fact that its ability to generate convincing human vocals comes in part because it's learning from recordings of speech in addition to music. Naked speech will help you learn the characteristics of human voice that are difficult, Shulman says, and quote.
When I am king, you will be first against the wall with your opinion, which is of no consequence at all, figured after that last piece, the only appropriate song to quote lyrics from, would be Paranoid Andrade, naturally, Talk to you tomorrow.