Monday, July 8, 2024

Welcome to TechCrunch AM! This morning, we’re looking at the ongoing battle between Apple and Epic Games; why OpenAI’s low-level breach should scare you; how a CIO with a $17 billion budget thinks; and what happens if you shoot down a delivery drone. We’ve also got notes on seed-stage VCs, understanding generative AI’s weird behavior and Boeing pleading guilty. Oh, and a question for you readers: Do you think we’re witnessing the growth of an AI-fueled financial bubble?

TechCrunch Top 3

Image Credits: Bryce Durbin / TechCrunch

1. AI companies have a target on their backs. Last week, we touched on OpenAI’s data breach, as reported by The New York Times. And while it wasn’t a big breach — the hackers only eavesdropped on some developer chat in Slack — it should still scare you, and not just because of the national security threat. By virtue of having reams of data (including user data) locked away in their servers, AI companies are likely to become some of the biggest targets for future security breaches. Read More

2. Apple vs. Epic Games, continued: Epic has had its dukes up against Apple for years over the tech giant’s revenue-sharing requirements in the App Store. The latest squabble involves the European Digital Markets Act, which allowed Epic to launch its own Epic Games Store on iOS and bring Fortnite back to the platform with reduced commissions to Apple. But then Apple supposedly rejected the games store twice over what Epic says are “arbitrary, obstructive” rejections. It gets juicier. Read More

3. Lessons from a CIO with a $17B budget: Lori Beer, global CIO at JPMorgan Chase, oversees a 63,000-person team worldwide and a $17 billion annual budget. The scale in terms of cloud infrastructure services, on-premises data centers, mobile infrastructure and digital tech to run transactions is enormous. It requires a person with tremendous attention to detail to make sure it runs smoothly and efficiently. We sat down with Beer to pick her brain about what it takes to track a huge tech ecosystem and set up resilient systems. Read More

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Morning Must-Reads

Image Credits: Walmart

What happens if you shoot down a delivery drone?: You ever see one of those Walmart delivery drones in the sky and notice an intrusive thought like, "What if I just shoot it down and take what’s inside?" You might have then dismissed the thought as crazy and moved on, but some people are not so restrained! A Florida man was recently arrested for allegedly shooting down a Walmart drone, which raises questions about what the legal ramifications of doing so would be if these events become more common. Those aircraft ain’t cheap, and I don’t think the Amazons of the world will take too kindly to having their IP damaged. Read More

Delivery Hero might face €400M fine: This is for antitrust violations, following raids by EU authorities on the food delivery giant’s offices in July 2022 and November 2023. Delivery Hero sent a note to investors over the weekend, saying it could face sanctions for “alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information and no-poach agreements.” It’s a tough gig, the food delivery market, with its famously low margins that have led to the downfall of many smaller players. Read More

Seed VCs turn to "pro rata" funds to compete with big firms: Early investors don’t always get to exercise their pro rata rights — the ability to buy more shares in a portco during subsequent funding rounds to avoid dilution — because steep valuations later on price them out. But a new trend is here to help. Firms like Alpha Partners, SignalRank and SaaS Ventures are deploying capital at Series B and later rounds to support seed-stage and Series A VCs who want to exercise their rights. “I give them money to invest in their pro rata, and I get 10% of the carried interest,” Jesse Bloom of SaaS Ventures told TechCrunch's Christine Hall. Read More

How to set parental controls on social media: Social media is a cesspit, so let’s minimize the time our kids spend on it. Not sure where to start? We’ve got a guide for you, including instructions on setting parental controls on Instagram, TikTok, Snapchat, Discord and Facebook. X, perhaps unsurprisingly, is the only one that doesn’t offer any parental controls, despite the fact that NSFW content is readily available on the platform. Read More

Understanding the strange behavior of AI: Generative AI models don’t process text in the same way that humans do. Understanding that may help us understand why they act weird and have stubborn limitations. This article is technical, but it’s interesting. For example, did you know that AI models will process “Hello,” “HELLO” and “hello” differently? And that that can lead to completely different results because the computer doesn’t understand that they all mean the same thing? Read More

Around the Web 🌐

How does ChatGPT 3.5 compare to a human writing code? A team of researchers at the University of Glasgow tested the free GPT’s ability to address 728 coding problems in five coding languages. They found that overall, ChatGPT was fairly good at solving problems, particularly ones that existed before 2021. But for problems that popped up after 2021, its ability to generate functionally correct code isn’t great. “It sometimes fails to understand the meaning of questions, even for easy level problems,” Yutian Tang, one of the researchers, told IEEE Spectrum. Read More

How much does it cost to be a sustainable AI company? Investments in AI companies are at an all-time high, but revenue growth has yet to materialize. An analyst at Sequoia Capital thinks AI companies will have to earn about $600 billion per year to pay for their AI infrastructure, according to Tom’s Hardware. Could that mean we’re witnessing the growth of a financial bubble? Read More

ElevenLabs takes on Adobe: AI voice startup ElevenLabs, known for its voice-cloning and text-to-speech models, has added an AI Voice Isolator to its product portfolio, according to VentureBeat. The offering lets creators remove unwanted ambient noise and sounds from any piece of content they have, from a film to a podcast to a YouTube video. It’s free to use, which is one big magnet over using a similar product from Adobe. If, that is, the product is any good. Read More

Before You Go 🎮

Media companies are doing games now: It’s not just Netflix. YouTube, Sling TV and even LinkedIn have introduced games in recent years and months as companies try to keep users actively engaged. And, from a purely dystopian standpoint, it makes sense. After all, these companies already have millions of eyes that are hungry for new and novel content and that can only passively watch videos or engage in algorithmically prompted rage for so long. They need a little dopamine treat. And honestly, Crossclimb might be the most fun I’ve had on LinkedIn — in, well, ever. Read More