Welcome to the Techmeme Ride Home for Wednesday, September 4th, 2024. I'm Brian McCulloch. Today, SpaceX has agreed to block access to X in Brazil on Starlink. Looks like you be keys are hackable. Who is the mystery platform looking to expand AI data centers at an historic scale? And the Catch-22 that Intel is in, they need chips act money, but can their troubles mean that the chips act money shouldn't be spent on them? Here's what you missed today in the
world of tech. This was quick. SpaceX says it's complying with a Brazilian Supreme Court Justice's order to block Starlink access to X in Brazil after that country froze some of Starlink's assets. According Reuters, regardless of the illegal treatment of Starlink infreasing our assets, we are complying with the order to block access to X in Brazil, Starlink, which has more than 200,000 customers in the Latin American nation said in a post on X. On Monday, Brazil's telecom
regulator, Anatell said it had been informed by Starlink that the Muskback Company would not obey the Justices order for all internet providers to block domestic access to X. And Anatell representative told Reuters, however, that Starlink had backtracked and informed the regulator on Tuesday it would conclude the blocking within hours. Anatell verified Starlink has
already started to cut access to X in Brazil. In its post, Starlink said it had initiated legal proceedings in the Brazilian Supreme Court explaining the, quote, gross illegality of Marais order that froze Starlink's finances and prevents it from conducting financial transactions in Brazil. Meanwhile, Blue Sky says that as of September 2nd, it had added over 2 million new users in the past week in the wake of this ban on X in Brazil. And I did not know this, but Brazil was once one of
Twitter's biggest markets. It once dominated social media in that country, though that cloud has waned a bit since it's become X. Quoting the Washington Post, this nation of 215 million was an early and enthusiastic adopter of Twitter, the platform now known as X, once commanding its largest international market. More than 40 million Brazilians, nearly one-fifth of the population, routinely took to the network to engage in heated discussions on politics or gossip over the
latest episode of Big Brother Brazil. It was credited with mobilizing massive and wide-ranging protests in 2013, then helping to propel former president Bolsonaro's rise to power. Since then, X's cloud in Brazil has shrunk considerably. At last count, the social media network had an
estimated 22 million Brazilian users. Survey showed Brazilians were far more likely to use WhatsApp or Instagram, even the Chinese video sharing app, Qai, than X. In 2022, only 3% of Brazilians cited the social network as their preferred location to consume political news, the area in which Twitter was once strongest according to a survey by the Institute for Democracy and Democratization of Communication. For a good 5 or 10 years, Twitter was the Brazilian public square, said Pedro
Doria, a tech columnist at the National newspaper O Globo. It's where we had most of our conversations of consequence, but then it got less interesting and less consequential. It used to reverberate a lot, but now it is smaller and less important. As if we don't have enough events to cover this month, pencil in yet another one. For Microsoft, September 16th at 8am Pacific, what will it be all about? Quoting the verge. Microsoft is holding a special co-pilot event later this month that will
be focused on the next phase of co-pilot innovation. Microsoft CEO Sachin Adela and Vice President of AI work Jared Spattaro will host the Wave 2 co-pilot event on September 16th. The event will be hosted on LinkedIn and focus on the business side of Microsoft's co-pilot offerings. I revealed in my notepad newsletter last month that Microsoft is about to rebrand co-pilot in the most
Microsoft way possible. This means that instead of co-pilot inward, it will become Microsoft 365 co-pilot inward alongside a rebranding of Microsoft co-pilot for Microsoft 365 to Microsoft 365 co-pilot. This is not good. Researchers have detailed a side channel attack which does require around $11,000 worth of equipment, but can be used to clone all ubiquies running firmware prior to version 5.7.
Quoting ours technical. The cryptographic flaw known as a side channel resides in a small microcontroller used in a large number of other authentication devices, including smart cards used in banking, electronic passports, and the accessing of secure areas. While the researchers have confirmed all ubiquie 5 series models can be cloned, they haven't tested other devices using the microcontroller, such as the SLE 78 made by Infinian and successor microcontrollers known as the Infinian
Optiga Trust M and the Infinian Optiga TPM. The researchers suspect that any device using any of these three microcontrollers and the Infinian cryptographic library contains the same vulnerability. Ubiqui Maker Ubico issued an advisory in coordination with a detailed disclosure report from Ninja Lab, the security firm that reverse engineered the ubiquie 5 series and devised the cloning
attack. All ubiquies running firmware prior to versions 5.7, which was released in May, and replaces the Infinian Crypto Library with a custom one are vulnerable. Updating key firmware on the ubiquie isn't possible that leaves all affected ubiquies permanently vulnerable. Side channels are the result of clues left in physical manifestations such as electromagnetic emanations, data caches, or the time required to complete a task that leaks cryptographic
secrets. In this case, the side channel is the amount of time taken during a mathematical calculation known as a modular inversion. The Infinian Crypto Library failed to implement a common side channel defense known as constant time as it performs modular inversion operations involving the elliptic curve digital signature algorithm. Constant time ensures the time-sensitive cryptographic operations execute is uniform rather than variable depending on the specific keys.
More precisely, the side channel is located in the Infinian implementation of the extended Euclidean algorithm, a method for among other things, computing the modular inverse. Sources say the Department of Justice has sent subpoenas to Nvidia and other companies as it seeks evidence that Nvidia violated antitrust laws by making it harder to switch away from
Nvidia. Quoting Bloomberg, the DOJ which had previously delivered questionnaires to companies is now sending legally binding requests that oblige recipients to provide information according to people familiar with the investigation. That takes the government a step closer to
launching a formal complaint. Antitrust officials are concerned that Nvidia is making it harder to switch to other suppliers and penalizes buyers that don't exclusively use its artificial intelligence chips according to the people who ask not to be identified because the discussions are private. Nvidia shares which suffered a record setting $279 billion route on Tuesday
fell further in late training after Bloomberg reported on the subpoenas. Still, the stock has more than doubled this year fueled by explosive sales growth at the Santa Clara, California based chipmaker. Yeah, about that Nvidia stock fell 9.5% on Tuesday, losing that $279 billion in market value. The biggest single-day drop for a US company ever
as investors soften their optimism about AI and yet. According to the information, big tech platforms are continuing to spend big lead to build out their AI footprint which can only be good for Nvidia right? Case in point, quote, developers of artificial intelligence say they need bigger and bigger data centers to concentrate processing power so that it produces better versions of the technology. Discussions are hot and heavy about even bigger data center projects across the US
such as Microsoft and OpenAI's proposed $100 billion supercomputer. It is now clear that Microsoft isn't the only company drawing up plans for what we'll call mega AI data centers. In fact,
I've been speaking with a growing number of people involved in such projects. There's still a long road before mega AI data centers go from schematics to bona fide planning which would involve securing tens of thousands of acres of land, building new power generation sources and eventually securing enough chips and related data center equipment to build a large cluster.
And last but not least, the companies first need to prove the validity of the AI scaling law idea by improving today's software with smaller clusters before they get to go ahead for bigger ones. Still, recent comments from a state official in North Dakota signal that some companies are
exploring deals that would enable proposed new data centers to become real. During a five-hour meeting, the public service commission held about data center demand last month, North Dakota Commissioner of Commerce Josh Tegan said two companies approached him and Governor Doug Bergum about building mega AI data centers. They would initially consume around 500 to 1,000 megawatts of power with plans to scale up to five or 10 gigawatts of power over several years.
These projects would be orders of magnitude bigger than any data centers in existence today. To put the scale of the plan in perspective, at the end of last year, Microsoft's global data centers for its Azure cloud computing business consumed around five gigawatts of power combined. The supercomputing projects could cost more than $125 billion each. Tegan said, according to an
audio recording of the meeting in the meeting held at the state capital in Bismarck. Tegan did not name the entities he spoke with, but said the companies have, quote, trillion dollar market capitalizations. That narrows down the list to about half a dozen firms in the US in video, Amazon, Microsoft, Google, Meta and Apple. Elon Musk's Tesla, which also develops AI, previously crossed the $1 trillion valuation mark, but is now valued at around $700 billion.
Not surprisingly, given the typical hush hush nature of data center planning, spokespeople for the companies as well as Tegan and Bergum, either declined to comment or didn't respond to requests for comment. Microsoft seems like a likely contender, given our prior report about its discussions with OpenAI about building a $100 billion supercomputer, North Dakota's governor Doug Bergum, incidentally, is a former Microsoft executive who sold a software company to
the tech giant in 2001 for $1.1 billion. But we also know other companies such as Google and Amazon are aggressively expanding their AI computing capacity. Tegan said in the meeting that a, quote, number of corporate jets have landed in the state over the past six weeks and that, quote, things can happen pretty fast when you've got a trillion dollars, end quote. Want a better way to simplify finance operations for your business across expenses, vendor payments,
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18A chipmaking process failed. Quote, the tests conducted by Broadcom involve sending silicon wafers the foot wide discs on which chips are printed through Intel's most advanced manufacturing process known as 18A. The sources said Broadcom received the wafers back from Intel last month. After its engineers and executive study the results, the company concluded the manufacturing
process is not yet viable to move to high volume production. Reuters could not determine the current relationship between Broadcom and Intel or whether Broadcom had decided to walk away from a potential manufacturing deal. Intel's contract manufacturing business was launched in 2021 as a key part of chief executive Pat Gelsinger's turnaround strategy. Broadcom is not a household name but makes crucial networking gear and radio chips that helped generate $28 billion in overall chip sales
in its last fiscal year. It has benefited from the boom in spending on artificial intelligence hardware and JP Morgan analyst Harlan Sir estimated it will bank $11 to $12 billion from AI this year up from $4 billion last year. Typically fabricating an advanced chip requires more than a thousand separate steps inside a chip factory or fab and takes roughly three months to complete. Production success is determined by the number of working chips on each Silicon wafer.
Achieving a substantial yield is crucial to producing the tens of thousands or hundreds of thousands of wafers demanded by big chip designers. Broadcom's engineers had concerns with the viability of the process the sources said. Typically that refers to the number of defects on each wafer or the quality of the chips fabricated and quote. Now there is another angle to this. You know how with the chips act the Biden administration was giving out tons of money to
stimulate onshore chip development. They made a big bet on Intel giving them a lot of that money because you know Intel was basically the big name left in US chip manufacturing. But given Intel's troubles is that whole strategy in trouble is betting on Intel. Now a bad idea. Conversely if Intel can't secure more of that government money could that
precipitate a sort of death spiral for Intel. Quoting Bloomberg five months after the president traveled to Arizona to unveil a potential $20 billion package of incentives alongside chief executive officer Pat Gelsinger. There are growing questions around when or if Intel will get its hands on that money. Intel's woes may also jeopardize the government's ability to reach its policy goals which include establishing a secure supply of cutting edge chips for the
Pentagon and making a fifth of the world's advanced processors by 2030. Intel is mired in a sales slump worse than anticipated and hemorrhaging cash forcing its board to consider increasingly drastic actions including possibly splitting off its manufacturing division or pairing back global factory plans. Bloomberg reported this week that threatens to further complicate its
quest for government funding at a time when Intel desperately needs the help. The Silicon Valley company is supposed to receive eight and a half billion dollars in grants and eleven billion dollars in loans from the 2022 Chips and Science Act. But only if the chip maker meets key milestones and after significant due diligence. That process which applies to all chips act winners has been clear from the outset and aims to ensure that companies only get taxpayer dollars once
they've actually delivered on their promises. Intel like other potential recipients hasn't received any money yet. In ongoing negotiations Intel has grown frustrated with what it sees as the government dragging its feet and has urged officials to release funding faster according to people familiar with the matter. Still the company has resisted sharing certain information requested by US officials who are seeking to vet the viability of Intel's manufacturing roadmap said the people
who asked not to be identified because the talks are private. Intel will evaluate its next steps at a board meeting in September according to people familiar with the matter. If the company lowers the ambitions of its US projects the people said its subsidy package would almost certainly change too.
The corporate turmoil risks turning a landmark public private partnership into a political liability during his March trip to Chandler Arizona president Joe Biden announced that Intel would get the largest award from the Chips Act which earmarked a total of thirty nine billion dollars in grants plus billions more in loans and tax breaks to boost domestic manufacturing of critical electronic
components. The watershed bipartisan law has seen some substantial success helping catalyze four hundred billion dollars and announced investments from industry leaders like Taiwan
semiconductor manufacturing company and Samsung electronics. The White House is confident in those commitments spokesperson Robin Patterson said in a statement and will continue working to achieve the program's national and economic security aims around a quarter of the total private sector pledge amount comes from Intel which is also the sole intended beneficiary of a three and a half
billion dollar program to make chips for defense and intelligence purposes. That makes its factory plans crucial to the broader chips act effort and quote. Nothing more for you today talk to you tomorrow.