Posts Tagged ‘technology’

Meta Rips Off The Author And Passes The Savings On To Skynet

Wednesday, September 27th, 2023

It turns out that Meta, AKA Facebook, used a giant database of pirated books known as “book3” for their AI generative training efforts.

Indeed, you can now search an index to see who was ripped off.

Did they rip me off? Not by name, as I have no published novels, but they did rip off Mike Ashley’s The Mammoth Book of Extreme Science Fiction, which has my story “Crucifixion Variations” in it, so yeah.

They ripped off Howard Waldrop:

  • Dream Factories and Radio Pictures
  • Going Home Again: Stories
  • Horse of a Different Color
  • Other Worlds, Better Lives
  • Things Will Never Be the Same
  • They ripped off a whole lot of Joe R. Lansdale.

    They ripped off a whole lot of George R. R. Martin (in multiple languages).

    There’s already been a lawsuit filed against Meta by Richard Kadrey, Sarah Silverman and Christopher Golden over using their material for training AIs, but there seems to be no mention of pirated books or book3.

    The fact that Meta is not only training AI on author’s works without their permission, but using pirated copies to do so adds insult to injury.

    And probably additional monetary damages from the resulting lawsuits.

    I expect the latest piracy revelations to lead to whole host of new lawsuits…

    CEO Gets $379 Million For Money-Losing EV Company

    Monday, September 11th, 2023

    I’m not a big fan of electric vehicles, which still don’t have the range or battery longevity to be tempting as a regular driving option.

    Also, outside Telsa (which obviously has some record of financial success), the whole EV space seems screwy. Today’s case in point: A company called Lucid, which I only know from various sketchy speed-test videos on YouTube, paid its CEO $379 million for 2022:

    It’s rare for CEOs to rebuke their peers’ outlandish pay packages—mostly because they’d be throwing stones from glass houses—but Lucid Motors’ CEO Peter Rawlinson drew sharp criticism from his EV rival Elon Musk on Monday after earning the title of the highest paid executive in the automotive business.

    “Beware any company where leadership compensation is not linked to performance,” the Tesla CEO wrote on X in response to a post about Rawlinson’s pay.

    Rawlinson received a $379 million compensation package in 2022 for his role at the luxury EV maker Lucid, including a $575,000 base salary, $5.5 million of stock options, and an incredible $373 million in stock awards, according to a new CEO compensation survey from Automotive News and Equilar.

    Notwithstanding Musk’s criticism, Rawlinson earned his huge pay package after hitting market-cap targets for Lucid early last year, SEC filings show. Lucid, like 88% of the 250 largest publicly traded U.S. firms, now uses performance-based compensation for at least some portion of its executive pay.

    Snip.

    Lucid’s stock fell more than 82% in 2022, and the company earned total revenue of just $608.2 million. Also, when comparing Rawlinson’s pay to his peers in the automotive business, his latest compensation package appears extreme. Rawlinson’s total compensation in 2022 was 11 times greater than the $34 million earned by the second-highest-paid automotive CEO, GM’s Mary Barra, and 21 times greater than the $18.3 million Ford CEO Jim Farley made.

    CEOs at fellow EV startups aren’t making anywhere near Rawlinson’s total compensation, either. Rivian Automotive CEO Robert Scaringe earned roughly $1 million in 2022, even though his company is now worth over $22 billion, over 50% more than Lucid Motors’ roughly $14 billion.

    Keep in mind that Lucid lost over $2 billion over the last year. Now, startups can take a while before they turn profitable, but paying the CEO of an unprofitable company hundred of millions of dollars to boost the stock price of a money-losing company sounds awful pump-and-dumpish to me. The EV space is hardly free of companies that turned out to be run by fraudsters.

    Lucid claims the Lucid Air Sapphire is going to be the fastest production EV in the world, and has heavily FX-edited videos to prove it. Then again, they also had similar videos six years ago.

    Like Musk, I still think your company should actually turn a profit before paying your CEO more than any other CEO in the world.

    I’m old fashioned that way.

    Caveat Emptor.

    (Hat tip: Ace of Spades HQ.)

    Israel’s War Against Color TV

    Sunday, September 3rd, 2023

    Sometimes I stumble across something that just boggles my mind. Such as this video that explains that Israel, the most technologically advanced country in the Middle East, wasn’t just slow to adopt color television, but actively fought its adoption, going so far as to create a device that stripped out color.

  • Israel resisted instituting a TV broadcasting service in the first place, and first Israeli PM David Ben-Gurion was opposed to the idea.
  • But wealthy Israelis still bought TVs, which could pick up signals from Cyprus (which started TV broadcasting in 1956), Lebanon (1959), Egypt and Syria (1960), and Jordan (from 1968).
  • Despite Ben-Gurion’s opposition to TV, the Israeli government wanted to use TV for educational purposes, and was worried that the Arab-language TV broadcasts that could be found in cafes contained propaganda.
  • When Levi Eshkol took over as prime minister in 1963, he reversed the no TV policy. In 1965, the Israeli Broadcasting Authority (IBA) was formed, and in 1966 B&W Israeli TV was finally introduced by Israeli Educational Television (IET). (In America, the 1966-1967 season was when networks finished their transition to all-color programming.)
  • IBA launched its B&W broadcasting on May 2, 1968, Israeli independence Day, sharing a frequency with IBE, and only broadcasting three hours of programming (two hours in Hebrew and one in Arabic) three days a week.
  • France, the Soviet Union and Lebanon started broadcasting color in the SECAM format in 1967. Israel, like the UK and much of Europe, used PAL format.
  • Jordan and Egypt used PAL, and they started broadcasting in color in 1974. Jordan even broadcast a news program in Hebrew!
  • So Israel quickly greenlit color TV to combat the Arab color menace, right? Wrong. PM Golda Meir was opposed, describing color TV as “artificial and unnecessary.” Despite IBA investing in color equipment!
  • “Yitzhak Rabin and his government continued to double down on their anti-color stance. They attempted to crack down on the import market. Their fears even extending to a drop in value of the national currency, the Israeli Lira. However, the stance was firmly rooted in the belief that color television was a luxury expense reserved for the few rich and wealthy, leaving the vast majority behind black and white TV was seen as a sort of social equalizer.” No color for you, bubbe, because Social Justice!
  • “The Israeli government of the day felt it necessary to invent a new system to neutralize color television for good. The Mekhikon, or the color eraser or color killer, is an invention that is unique to Israel’s television history.”
  • The video doesn’t do a good job of explaining how it works, so here’s the Wikipedia explanation:

    When a receiver is tuned to a monochrome transmission, the displayed scene should have no color components. However, if there is a hardware failure in the color killer stage, false color patterns may be displayed even during monochrome transmission.

    In normal color reception, high frequency luminance is mistaken for color, causing relatively invisible false color patterns. The reason for this invisibility is due to a key feature of NTSC/PAL, chroma/luminance frequency interleaving, where these false patterns are in complementary colors for adjacent video frames, allowing the human eye to average out the false color patterns. If, during a monochrome transmission, a color killer failure allows the color processing to be activated when it shouldn’t, a chroma subcarrier in the color processing stages is regenerated with no reference, causing that subcarrier to have enough frequency error that the chroma/luminance interleaving feature of NTSC/PAL no longer works, allowing the aforementioned false color patterns, overlaying the otherwise monochrome picture, to be much more visible by the human eye….

    In a color TV waveform, a reference pulse, called the burst, is transmitted along the back porch portion of the video signal. If the transmitted signal is monochromatic, then the burst is not transmitted. The color killer is actually a muting circuit in the chroma section which supervises the burst and turns off the color processing if no burst is received (i.e. when the received signal is monochromatic.) The main purpose of the color burst in the first place is a reference for the receiver to regenerate the chroma subcarrier, which in turn is utilized to demodulate the color difference signals….

    The government ordered the Israel Broadcasting Authority to cease broadcasting in color. As it was impractical to remove the chrominance signal from programs previously recorded in color, this was accomplished by simply omitting the burst phase signal from the broadcast. The “damaged” signal triggered the “color killer” mechanism in color television sets which prevented the appearance of color pictures. This method was named Mehikon (Hebrew: מחיקון “eraser”).

  • Note that all this was only happening at Israeli broadcasting stations. It didn’t do jack squat about those Arab broadcasts they seemed so worried about.
  • Naturally, this stupidity brought about its own technological reaction: The Anti-Color Killer, “a device to go with your new set restoring the damaged burst phase signal and allowing you to watch color programs exactly as they were filmed.” But you had to fiddle to get the color right, and then fiddle again every 15 minutes or so.
  • “Store owners who sold the device reported that nearly everyone who bought a color set from them also purchased the anti-eraser.”
  • Despite all the effort to keep color out, the Israeli government permitted a few color broadcasts: The visit of Egyptian President Anwar Sadat in 1977, and (I kid you not) The Eurovision Song Contest in 1979.
  • IBA finally started allowing color broadcasts to go out in 1981, and the Mekhikon was finally retired in 1982…just before the World Cup.
  • Israel finally went to full color on all broadcasts in 1983.
  • Bureaucratic stubbornness kept Israeli broadcasts in black and white long after the vast majority of the world’s countries had switched over. Haiti, Bulgaria, Yemen and Oman all got color broadcasts before Israelis.

    Bureaucratic inertia is quite a force…

    Fast, Cheap and Out of Control

    Saturday, September 2nd, 2023

    If you were worried that the United States military hadn’t picked up on the importance of drone warfare in the Russo-Ukrainian War, it appears that someone in the Pentagon was indeed paying attention.

    The Pentagon committed on Monday to fielding thousands of attritable, autonomous systems across multiple domains within the next two years as part of a new initiative to better compete with China.

    The program, dubbed Replicator, was announced by Deputy Defense Secretary Kathleen Hicks, speaking at the National Defense Industrial Association’s Emerging Technologies conference here.

    “Replicator will galvanize progress in the too-slow shift of U.S. military innovation to leverage platforms that are small, smart, cheap and many,” Hicks said.

    Hicks and Vice Chairman of the Joint Chiefs of Staff Adm. Christopher Grady will oversee the program, with support from Doug Beck, director of the Defense Innovation Unit. Further details, Hicks said, will be released in the coming weeks.

    Replicator rests on two assumptions. The first is that China’s core advantage is mass — “more ships, more missiles, more people,” as Hicks said — and that the United States’ best response is to innovate, rather than match that pound for pound.

    The second is that attritable, autonomous systems are the right form of innovation. Hicks pointed to the war in Ukraine, in which cheap, often commercial drones have proven indispensable on the battlefield for reconaissance, targeting, and attacks. Russia too, she said, appeared to have a similar mass before launching its invasion last February.

    However, this program is squarely focused on China. Hicks called this moment a “generational challenge to American society.”

    ”We’ll counter the [People’s Liberation Army’s] mass with mass of our own, but ours will be harder to plan for, harder to hit, and harder to beat,” she said.

    Even so, Hicks noted the Pentagon will remain focused on its core systems. “America still benefits from platforms that are large, exquisite, expensive, and few,” she said. Instead, she said, Replicator is particularly focused on accelerating DoD’s recent investments in autonomous systems.

    Replicator’s goal of fielding small drones in high numbers and on a rapid timeline echoes calls from former DIU director Mike Brown for the Pentagon to better leverage commercial innovation to deliver capability at scale — an approach he called a “hedge strategy.”

    House appropriators have backed that idea in their fiscal 2025 defense spending bill. The legislation would allocate $1 billion toward establishing a DIU-managed hedge portfolio made up of low-cost drones, agile communication and computing modes and AI capabilities.

    The Department of Defense requested $1.8 billion for artificial intelligence for fiscal 2024 and was overseeing more than 685 related projects as of 2021. Replicator is intended to pull those investments together and further scale production, Hicks said.

    Insert your own hedge funds and Skynet jokes here.

    The strategy makes a good deal of sense…up to a point. The fast and cheap portion makes a lot of sense, given Ukraine’s use of dirt cheap flatpack cardboard drones we talked about earlier this week.

    It’s the out of control/autonomous portion of description, combined with the aggressive timeline, that I question. As far as I can tell, all of Ukraine’s drones have been human guided rather than autonomous.

    Lots of work on AI has been done over the last few years, and its entirely possible that AI drone tech is farther along than we know, but having been involved in numerous large software projects for multiple companies, I can tell you things always seem to take longer than they should even when the federal government isn’t involved. Long term, having autonomous or semi-autonomous drone will give you a lot of extra capabilities, but I’m very skeptical about that two year timeline.

    Also, unless we plan to launch those drones from Taiwan itself, I’m skeptical that we’ll have suitable naval launch platforms ready. Flying a few drones off the deck of destroyer is easy, flying thousands for a real drone swarm is probably impossible. You don’t want to try running drone and manned planes off fleet carriers at the same time.

    Can you run them off an amphibious assault ship? Probably, as a temporary expedient, but that’s going to limit your helicopter and F-35B takeoff and landing windows. Longer term, you’re probably going to need to construct ships designed with specialized launchers to send a whole lot of drones in a short space of time.

    I’ve been talking about the inevitability of drone swarms in combat for some time. The goal is entirely feasible, I just question the “two years to fight China” timeline.

    I sure hope the Pentagon powers that be have a manned drone swarm program backup on hand…

    Ukraine Now Using Dirt Cheap Kit Drones Made Out Of Cardboard

    Monday, August 28th, 2023

    If you thought the Flying Yeet of Death was cheap, the Ukrainians have announced they just used a drone that looks even cheaper to hit a Russian airbase:

    (A follow-up video suggests they may not have hit much, if anything, but I’m more interested in the drone than the strike.)

    The Australian SYPAQ Corvo UAV is the drone reportedly used. “These drones are made out of cardboard, making them almost invisible to radar. They can carry a four to five kilogram payload have a range of between 40 to 120 kilometers, and a flight time of one to three hours. These are dirt cheap and can be made in the thousands.” It ships in a flatpack kit.

    Here’s a closer look at them:

    I suspect that SYPAQ represents a goodly portion of the future of drone warfare: Numerous and ultra-cheap, but capable of taking out much more expensive enemy vehicles and equipment.

    High tech and low cost is a very cyberpunk approach to warfare.

    LinkSwarm For August 18, 2023

    Friday, August 18th, 2023

    San Diego tries enforcing the law, a sampler of the lies Obama told about his life, Blade-Runners take on Big Brother’s cameras, a nuke rises in Texas, and a Cthuloid horror swims the chilly waters of Antarctica. It’s the Friday LinkSwarm!

  • San Diego tries “this one weird trick” to deal with homeless problem: Enforcing the law.

    Police began enforcing San Diego’s controversial new camping ban Monday, and although officials said they’ve so far focused only on Balboa Park, the new ordinance combined with other enforcement of laws long on the books has already made notable changes in the encampment landscape.

    The “Unsafe Camping Ordinance” allows officers to force people off public land if they’re sleeping within two blocks of a school, shelter, trolley station, waterway or park “where a substantial public health and safety risk is determined.”

    Capt. Shawn Takeuchi, head of the city’s neighborhood policing division, said his five-member team did arrest several homeless people Monday by Balboa Park, but only for existing warrants.

    Others were given a warning, he said. If any of the same people are found illegally camping a day later, they’ll get a ticket even if they’ve moved locations.

    Nobody in Balboa Park accepted offers for shelter Monday, the captain added. Enforcement will continue to focus on schools and parks in the near future, and officials declined to say where the team might move next.

    Do you think Austin’s government might start enforcing the city’s camping ban? Of course not. Then how are they supposed to rake off the graft? (Hat tip: Instapundit, who offers some takeaways worth highlighting:

    1. The homeless respond to policy and incentives like anyone else. The mere announcement of a future camping ban (plus some enforcement of other existing rules) rapidly cleared out major problem areas.
    2. The provision of shelter or housing is neither necessary nor sufficient to accomplish these clear-outs. Of the people asked to leave Balboa Park on the first day of enforcement (issuance of warnings), none accepted offers of shelter.
    3. The NGOs that have colonized the homeless problem have neither the incentive nor the knowledge to solve it. The head of one shelter was confused by the magical disappearance of his potential clients. “Where did they go?”

  • Harvard law professor Alan Dershowitz explains why the latest Trump indictment is a joke.
  • Charles F. McGonigal, a former FBI agent pushing the Russian collusion fantasy pleads guilty to Russian collusion. (Hat tip: Instapundit.)
  • Hunter Biden’s tax charges dismissed, but only as a prelude to filing more serious charges against him.
  • Biographer David Garrow reveals some of the many things Obama lied about.

    There is a fascinating passage in Rising Star, David Garrow’s comprehensive biography of Barack Obama’s early years, in which the historian examines Obama’s account in Dreams from My Father of his breakup with his longtime Chicago girlfriend, Sheila Miyoshi Jager. In Dreams, Obama describes a passionate disagreement following a play by African American playwright August Wilson, in which the young protagonist defends his incipient embrace of Black racial consciousness against his girlfriend’s white-identified liberal universalism. As readers, we know that the stakes of this decision would become more than simply personal: The Black American man that Obama wills into being in this scene would go on to marry a Black woman from the South Side of Chicago named Michelle Robinson and, after a meteoric rise, win election as the first Black president of the United States.

    Yet what Garrow documented, after tracking down and interviewing Sheila Miyoshi Jager, was an explosive fight over a very different subject. In Jager’s telling, the quarrel that ended the couple’s relationship was not about Obama’s self-identification as a Black man. And the impetus was not a play about the American Black experience, but an exhibit at Chicago’s Spertus Institute about the 1961 trial of Adolf Eichmann.

    At the time that Obama and Sheila visited the Spertus Institute, Chicago politics was being roiled by a Black mayoral aide named Steve Cokely who, in a series of lectures organized by Louis Farrakhan’s Nation of Islam, accused Jewish doctors in Chicago of infecting Black babies with AIDS as part of a genocidal plot against African Americans. The episode highlighted a deep rift within the city’s power echelons, with some prominent Black officials supporting Cokely and others calling for his firing.

    In Jager’s recollection, what set off the quarrel that precipitated the end of the couple’s relationship was Obama’s stubborn refusal, after seeing the exhibit, and in the swirl of this Cokely affair, to condemn Black racism. While acknowledging that Obama’s embrace of a Black identity had created some degree of distance between the couple, she insisted that what upset her that day was Obama’s inability to condemn Cokely’s comments. It was not Obama’s Blackness that bothered her, but that he would not condemn antisemitism.

    Snip.

    Perhaps the most revealing thing about Jager’s account of her fight with Obama, though, is that not one reporter in America bothered to interview her before David Garrow found her, near the end of Obama’s presidency. As Obama’s live-in girlfriend and closest friend during the 1980s, Jager is probably the single most informed and credible source about the inner life of a young man whose election was accompanied by hopes of sweeping, peaceful social change in America—a hope that ended with the election of Donald Trump, or perhaps midway through Obama’s second term, as the president focused on the Iran deal while failing to address the concerns about rampant income inequality, racial inequality, and the growth of a monopoly tech complex that happened on his watch.

    The idea that the celebrated journalists who wrote popular biographies of Obama and became enthusiastic members of his personal claque couldn’t locate Jager—or never knew who she was—defies belief. It seems more likely that the character Obama fashioned in Dreams had been defined—by Obama—as being beyond the reach of normal reportorial scrutiny. Indeed, Garrow’s biography of Obama’s early years is filled with such corrections of a historical record that Obama more or less invented himself. Based on years of careful record-searching and patient interviewing, Rising Star highlights a remarkable lack of curiosity on the part of mainstream reporters and institutions about a man who almost instantaneously was treated less like a politician and more like the idol of an inter-elite cult.

    Snip.

    Progressive theology is built on a mythic hierarchy of group victimhood which has endured throughout time, up until the present day; the injuries that the victims have suffered are so massive, so shocking, and so manifestly unjust that they dwarf the present. Such injuries must be remedied immediately, at nearly any cost. The people who do the work of remedying these injustices, by whatever means, are the heroes of history. Conversely, the sins of the chief oppressors of history, white men, are so dark that nothing short of abject humiliation and capitulation can begin to approach justice.

    It goes to say that nothing about the terms of progressive theology is original. It is the theology of Soviet communism, with class struggle replaced by identity politics. In this system, Jews play a unique, double-edged role: They are both an identity group and a Trojan horse through which history can reenter the gates of utopia.

    Read the whole thing to see all those facts about Obama that the media ignored…including his fantasies about having sex with men.

  • Yuan hits 16 year low against the dollar.
    

  • The origins of the global warming scam.

    Members of the IPCC, such as Pedro Moura-Costa (above) and Gareth Philips, had major conflicts-of-interest. They owned, created and/or worked for businesses — such as Ecosecurities and SGS Forestry — that would directly profit from the report’s conclusions.

    In fact, the IPCC panel members’ companies were positioned to earn millions of dollars from the report. But the mainstream media did not report these conflicts and instead piled on the “global warming” and “carbon offset” bandwagons.

    Solar energy portal Ecotopia reported that members of the IPCC “…had vested interests in reaching unrealistically and unjustifiably optimistic conclusions about the possibility of compensating for emissions with trees… [and] should have been automatically disqualified from serving on an intergovernmental panel charged with investigating impartially the feasibility and benefits of such ‘offset’ projects.”

  • Social Justice strikes again: Woke Hawaiian Official Stalled Release Of ‘Revered Water’ Until It Was Too Late To Save Maui.”

    According to accounts of four people with knowledge of the situation, M. Kaleo Manuel, a Native Hawaiian cultural practitioner and DLNR’s deputy director for water resource management, initially refused West Maui Land Co.’s requests for additional water to help prevent fires from spreading to properties managed by the company. Manuel eventually released water but not until after the fire had run its course.

    His office has not yet commented on the delay of water resources.

    How much damage could have been prevented with the extra water is not yet known. However, the question of “Why?” needs to be addressed in the wake of one of the worst natural disasters in Hawaii’s history. Though bureaucratic red tape might be the most obvious suggestion, a recent interview with M. Kaleo Manual offers some interesting and disturbing insight. Manuel waxes philosophical on “water equity” (“equity” being a pervasive woke buzzword) and an ancient “reverence” of water as god-like. He uses these beliefs to support his rationale for keeping tight controls over Hawaiian water supplies; not as a resource to be used, but as a holistic privilege offered by the government.

  • Economist who named BRICS says the idea of a common BRICS currency is “embarrassing.”

    “It’s just ridiculous,” [Lord Jim O’Neill] told the Financial Times in an interview on Monday. “They’re going to create a BRICS central bank? How would you do that? It’s embarrassing almost.”

    The economist spoke ahead of the 15th BRICS summit next week, where the nations will meet to decide whether to expand membership to other countries and may also float the idea of the common currency.

    (Hat tip: Stephen Green at Instapundit.)

  • “Blade Runners” take out new London monitoring cameras. (Hat tip: Instapundit.)
  • What’s the matter with Sweden?

    The following story was related to me by a former Governor of Minnesota, who was of Norwegian descent. A number of years ago, a Norwegian dignitary (the Prime Minister, I think) visited Minnesota. Talking to our governor, the Prime Minister tut-tutted about Minnesota’s crime rate, saying that there was much less crime in Norway. Minnesota’s governor replied, “We don’t have a crime problem with our Norwegians, either.”

    That anecdote came to mind when I read, in the London Times, “Sweden’s slide from peaceful welfare state to Europe’s gun-killings capital.”

    Today, Sweden is Europe’s capital of gun homicide. Last year, according to the Swedish national council for crime prevention, 63 people were shot and killed: more than double the European average and, per capita, multitudes higher than London or Paris.

    … The effect on Swedish society has been striking. As well as the lives lost, the violence has brought down a government, changed laws and policies, and become the biggest talking point in a country that once prided itself on its reputation as a peaceful welfare state.

    Violent crime will do that, although, to be fair, Sweden’s homicide rate is considerably lower than ours. But it is now significantly higher than homicide rates in quite a few other European countries, including Norway. Why is that? Have Swedes suddenly started getting violent? No.

    It has also kicked the hornet’s nest of integration. Today, one fifth of all people living in Sweden were born outside the country.

  • Dow Chemical is planning to build a small nuclear reactor to power their plant in Calhoun County. Good for them. The TRISO-X fuel they’re using sounds like it will be a pebble bed reactor design.
  • “Target Sales Dipped in Last Quarter Due to Pride Backlash.”
  • Is Adobe sell AI-generated stock art based on artist’s work?
  • Jihadi dumbass kills himself while cleaning his gun.
  • William Friedkin, RIP.
  • Enjoy contemplating this horrifying Cthuloid abomination swimming in antarctic waters.
  • A guide to the things considered disrespectful when working in a Japanese office. Like “going home on time.”
  • Is there any UK tradition more glorious than tossing hot pennies off a high building for the joy of seeing poor people burn their hands grabbing them?
  • “Country Music Industry Confused By Man Actually From Country Making Actual Music.”
  • “Prince Immediately Regrets Waking Rachel Zegler With A Kiss After She Starts Ranting About The Patriarchy.”
  • Good boy!
  • Mark Zuckerberg Has Been A Very Bad Robot Boy

    Thursday, July 27th, 2023

    Meta, AKA “The Artist Formerly Known As Facebook,” announced that they just lost $21 billion on their Reality Labs division, AKA the Metaverse, AKA the worst virtual reality environment since January 2022.

    Meta’s second-quarter earnings showed that Reality Labs, its virtual and augmented reality development business, has lost a staggering $21.3 billion since January 2022 — and executives warned the bleeding will only get worse.

    The unit recorded $276 million in Q2 sales this year — down from the $339 million it drew in during Q1, underscoring how VR and AR technology has yet to infiltrate the mainstream.

    The losses were wider than analysts expected, though CFO Susan Li suggested in the report that Meta will continue to invest in the tech, which is used to power the metaverse.

    “For Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem,” Li wrote.

    Just last month, Meta unveiled its Quest 3 headset for $499, which Mark Zuckerberg touted as “the first mainstream headset with high-res color mixed reality,” though it’s unclear how successful the tech has been so far.

    Hint: Not at all.

    Just how do you lose $21 billion? That’s a burn rate of over a billion a month. You could hire a mountain of developers and engineers for that money, maybe 100,000 or so of them even at California salary rates. Wikipedia (usual caveats apply) says Occulus only had 17,00 employees in 2022. Meta only paid $2 billion to acquire Occulas (which became Reality Labs) in the first place. Hell, you could fund over 200 startups at $100 million a pop, and it would still be more likely for any one of them to be profitable than Reality Labs.

    Usually you have to be a politician to lose that much money. I wonder if Reality Labs losses might be covering up losses in other divisions. Or if the money is getting siphoned off to somewhere else entirely…

    Earlier this month, Meta found itself on the defense in a copyright infringement lawsuit filed by stand-up comic Sarah Silverman and authors Christopher Golden and Richard Kadrey, who alleged that Meta’s artificial intelligence-backed language models were trained on illegally-acquired datasets containing the authors’ work.

    The suit against Meta points to the allegedly illicit sites used to train LLaMA, the ChatGPT competitor the company launched in February.

    Naturally, anything involving large corporations ripping off science fiction writers attracts my attention, and I used to bump into Kadrey back when I was on the SF con circuit. The same firm is also suing on behalf of Paul Trem­blay and Mona Awad.

    There probably needs to be some sort of regulation on how much AI generated content can come from any particular living creator. If I feed an AI all of Paul McCarthy’s songs, and ask it to produce a new one based on those, is it copyright infringement?

    I suspect a number of lawyers are going to be getting a lot of money off AI in the near future…

    Low-Calorie LinkSwarm Substitute

    Friday, July 7th, 2023

    This week’s been a bear…

    …and I’ve just run out of time to do a decent LinkSwarm. Instead, in honor of police finding Hunter Biden’s cocaine unexplained cocaine of unknown origin at the White House, here’s a video of Norm MacDonald doing cocaine jokes, followed by a mini-LinkSwarm.

  • Russian ammo dump blows up real good.
  • Peter Zeihan: Scottish independence is a suicide pact.
  • RedHat is trying to paywall open source code. Penny wise and pound foolish.
  • “DC Police Say They May Never Discover Who Left Bag Of Cocaine Labeled ‘Property Of H. Biden’ At White House.”
  • Protip for professional sports teams: Don’t hold Dog Night and Fireworks Night on the same night.
  • China’s Slacker City

    Saturday, May 6th, 2023

    Remember how a bunch of young Chinese just decided to give up and let it rot? Recently, a whole bunch of them have decided to make Dali in Yunnan Province their own slacker city.

    Takeaways:

  • “Recently a city has become popular because it has been occupied by young people who want to lie flat. It’s Dali, a historical and cultural city in Yunnan province, southwest China, with a population of about 650,000. It has few factories in the area, and tourism accounts for a large share of the municipality’s revenue.”
  • It’s built around a large lake.
  • “A few video bloggers who are secondary landlords in Dali city claim that an army of 100,000 people lying flat have gathered and have occupied the city.”
  • “Here 350 yuan a room per month.” That’s a bit over $50.
  • “The cost of living in Dali is 8,000 Yuan a year. That is $1,162.”
  • “Young people [in China] see no hope for their future and choose to lie down. Their motto is no buying a home, no car, no marriage, no baby, no consumption.”
  • Chinese woman: “It isn’t that I don’t want to have children. I can’t afford it. Housing is so stressful! Without a home, I’m afraid to get married. The cost of having a baby is high. There’s no money or time to raise them, and women’s work is easily affected by childbirth.” All things that help contribute to China’s disasterous demographics.
  • “I’m a leek. I resigned myself to my fate, but I won’t drag a child down to this mess.” “Leek” was a buzzword five or six years ago for someone the Chinese government regarded as a disposable worker/consumer. Sort of like “cog in the machine.”
  • “Before the lying flat people converged on the city of Dali, it had already become a gathering place for digital nomads,” i.e. people who can work remote jobs from anywhere with a decent Internet connection.
  • For the past 20 years, the professional software engineer has been synonymous with young and rich in China. They’re the 996th Generation, who work from 9 AM to 9 PM, 6 days a week, sacrificing their health, but also enjoying the dividends of China’s dotcom boom over the last 20 years. But now China’s Internet industry has entered an era with State-Owned Enterprises (SOEs) in, private companies out, where even big tech companies are being nationalized. The overall economy is slowing down, regulatory bans are proliferating, and the epidemic is exacerbating this trend. Engineers are at increased risk of losing their jobs, and their income and benefits are reduced from time to time. Engineers who have lost their jobs will join the ranks of those who are lying flat. They usually have nothing to do, spending most of their time on the internet playing games and chatting, consuming two packs of instant noodles a day.

  • “The employment market in Shanghai is very bad right now…what is scary is that there are no jobs for you to work again. Private companies are closing their doors, going bankrupt.”
  • As always, it’s hard to determine just how widespread “lying flat” is among young Chinese. If the videos are anything to go by (a big “if”), they all seem considerably cleaner and better behaved that America’s ranks of tent-dwelling, drug-addicted transients. And many seem to be actually renting space for their tents.

    At 9:50 in, you see that cyberpunk dystopian scene of hundred of young video blogger “hosts” broadcasting from their own tiny spaces under a bridge. “Why are there so many young people in China working as online hosts? It’s not that it’s glamorous, it’s more of a helpless attempt under the current job hunting predicament.” Supposedly this happens in multiple Chinese cities, though evidently streaming locally in rich areas like Shanghai brings higher “tips.”

    What a life…

    Square Zero

    Thursday, March 23rd, 2023

    Dwight sent over this Hindenberg Research piece on Block AKA Square AKA Cash App.

    Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping. The “magic” behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.

    There’s also a negative side.

    Even the summary is pretty breathtaking in the rang of allegations:

  • Most analysts are excited about the post-pandemic surge of Block’s Cash App platform, with expectations that its 51 million monthly transacting active users and low customer acquisition costs will drive high margin growth and serve as a future platform to offer new products.
  • Our research indicates, however, that Block has wildly overstated its genuine user counts and has understated its customer acquisition costs. Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.
  • Core to the issue is that Block has embraced one traditionally very “underbanked” segment of the population: criminals. The company’s “Wild West” approach to compliance made it easy for bad actors to mass-create accounts for identity fraud and other scams, then extract stolen funds quickly.
  • Even when users were caught engaging in fraud or other prohibited activity, Block blacklisted the account without banning the user. A former customer service rep shared screenshots showing how blacklisted accounts were regularly associated with dozens or hundreds of other active accounts suspected of fraud. This phenomenon of allowing blacklisted users was so common that rappers bragged about it in hip hop songs.
  • Block obfuscates how many individuals are on the Cash App platform by reporting misleading “transacting active” metrics filled with fake and duplicate accounts. Block can and should clarify to investors an estimate on how many unique people actually use Cash App.
  • CEO Jack Dorsey has publicly touted how Cash App is mentioned in hundreds of hip hop songs as evidence of its mainstream appeal. A review of those songs show that the artists are not generally rapping about Cash App’s smooth user interface—many describe using it to scam, traffic drugs or even pay for murder…
  • “I paid them hitters through Cash App”— Block paid to promote a video for a song called “Cash App” which described paying contract killers through the app. The song’s artist was later arrested for attempted murder.
  • Cash App was also cited “by far” as the top app used in reported U.S. sex trafficking, according to a leading non-profit organization. Multiple Department of Justice complaints outline how Cash App has been used to facilitate sex trafficking, including sex trafficking of minors.
  • There is even a gang named after Cash App: In 2021, Baltimore authorities charged members of the “Cash App” gang with distribution of fentanyl in a West Baltimore neighborhood, according to news reports and criminal records.
  • Beyond facilitating payments for criminal activity, the platform has been overrun with scam accounts and fake users, according to numerous interviews with former employees.
  • Examples of obvious distortions abound: “Jack Dorsey” has multiple fake accounts, including some that appear aimed at scamming Cash App users. “Elon Musk” and “Donald Trump” have dozens.
  • To test this, we turned our accounts into “Donald Trump” and “Elon Musk” and were easily able to send and receive money. We ordered a Cash Card under our obviously fake Donald Trump account, checking to see if Cash App’s compliance would take issue—the card promptly arrived in the mail.
  • Former employees described how Cash App suppressed internal concerns and ignored user pleas for help as criminal activity and fraud ran rampant on its platform. This appeared to be an effort to grow Cash App’s user base by strategically disregarding Anti Money Laundering (AML) rules.
  • The COVID-19 pandemic and nationwide lockdowns posed an existential threat to Block’s key driver of gross profit at the time, merchant services.
  • In this environment, amid Cash App’s anti-compliance free-for-all, the app facilitated a massive wave of government COVID-relief payments. CEO Jack Dorsey Tweeted that users could get government payments through Cash App “immediately” with “no bank account needed” due to its frictionless technology.
  • Within weeks of Cash App accounts receiving their first government payments, states were seeking to claw back suspected fraudulent payments—Washington State wanted more than $200 million back from payment processors while Arizona sought to recover $500 million, former employees told us.
  • Once again, the signs were hard to miss. Rapper “Nuke Bizzle”, made a popular music video about committing COVID fraud. Several weeks later, he was arrested and eventually convicted for committing COVID fraud. The only payment provider mentioned in the indictment was Cash App, which was used to facilitate the fraudulent payments.
  • We filed public records requests to learn more about Block’s role in facilitating pandemic relief fraud and received answers from several states.
  • Massachusetts sought to claw back over 69,000 unemployment payments from Cash App accounts just four months into the pandemic. Suspect transactions at Cash App’s partner bank were disproportionate, exceeding major banks like JP Morgan and Wells Fargo, despite the latter banks having 4x-5x as many deposit accounts.
  • In Ohio, Cash App’s partner bank had 8x the suspect pandemic-related unemployment payments as the bank that processed the most unemployment claims in the state, even though the latter bank processed 2x the claims as Cash App’s, according to data we obtained via a public records request.
  • The data shows that compared to its Ohio competitor, Cash App’s partner bank had nearly 10x the number of applicants who applied for benefits through a bank account used by another claimant – a clear red flag of fraud.
  • Block had obvious compliance lapses that made fraud easy, such as permitting single accounts to receive unemployment payments on behalf of multiple individuals from various states and ineffective address verification.
  • In an apparent effort to preserve its growth engine, Cash App ignored internal employee concerns, along with warnings from the Secret Service, the U.S. Department of Labor OIG, FinCEN, and State Regulators which all specifically flagged the issue of multiple COVID relief payments going to the same account as an obvious sign of fraud.
  • Block reported a pandemic surge in user counts and revenue, ignoring the contribution of widespread fraudulent accounts and payments. The new business provided a sharp one-time increase to Block’s stock, which rose 639% in 18 months during the pandemic.
  • As Block’s stock soared on the back of its facilitation of fraud, co-founders Jack Dorsey and James McKelvey collectively sold over $1 billion of stock during the pandemic. Other executives, including CFO Amrita Ahuja and the lead manager for Cash App Brian Grassadonia, also dumped millions of dollars in stock.
  • With its influx of pandemic Cash App users, our research shows Block has quietly fueled its profitability by avoiding a key banking regulation meant to protect merchants. “Interchange fees” are fees charged to merchants for accepting use of various payment cards.
  • Congress passed a law that legally caps “interchange fees” charged by large banks that have over $10 billion in assets. Despite having $31 billion in assets, Block avoids these regulations by routing payments through a small bank and gouging merchants with elevated fees.
  • Block includes only a single vague reference in its filings acknowledging it earns revenue from “interchange fees”. It has never revealed the full economics of this category, yet roughly one-third of Cash App’s revenue came from this opaque source, according to a 2022 Credit Suisse research report.
  • Competitor PayPal has disclosed it is under investigation by both the SEC and the CFPB over its similar use of a small bank to avoid “interchange fee” caps. A Freedom of Information Act (FOIA) request we filed with the SEC indicates that Block may be part of a similar investigation.
  • Block’s $29 billion deal to acquire ‘buy now pay later’ (BNPL) service Afterpay closed in January 2022. Afterpay has been celebrated by Block as a major financial innovation, allowing users to buy things like a pair of shoes or a t-shirt and pay over time, only incurring massive fees if subsequent payments are late.
  • Afterpay was designed in a way that avoided responsible lending rules in its native Australia, extending a form of credit to users without income verification or credit checks. The service doesn’t technically charge “interest”, but late fees can reach APR equivalents as high as 289%.
  • The acquisition is flopping. In 2022, the year Afterpay was acquired, it lost $357 million, accelerating from 2021 losses of $184 million.
  • Fitch Ratings reported that Afterpay delinquencies through March 2022 had more than doubled to 4.1%, from 1.7% in June 2021 (just prior to the announced acquisition). Total processing volume declined -4.8% from the previous year.
  • Block regularly hypes other mundane or predatory sources of revenue as technological breakthroughs. Roughly 31% of Cash App’s revenue comes from “instant deposit” which Block says it pioneered and works as if by “magic”. Every other major competitor we checked provides a similar service at comparable or better rates.
  • On a purely fundamental basis, even before factoring in the findings of our investigation, we see downside of between 65% to 75% in Block shares. Block reported a 1% year over year revenue decline and a GAAP loss of $540.7 million in 2022. Analysts have future expectations of GAAP unprofitability and the company has warned it may not be profitable.
  • Despite this, Block is valued like a profitable growth company at (i) an EV/EBITDA multiple of 60x; (ii) a forward 2023 “adjusted” earnings multiple of 41x; and (iii) a price to tangible book ratio of 13.1x, all wildly out of line with fintech peers.
  • Despite its current rich multiples, Block is also facing threats from key competitors like Zelle, Venmo/Paypal and fast-growing payment solutions from smartphone powerhouses like Apple and Google. Apple has grown Apple Pay activations from 20% in 2017 to over 70% in 2022 and now leads in digital wallet market share.
  • In sum, we think Block has misled investors on key metrics, and embraced predatory offerings and compliance worst-practices in order to fuel growth and profit from facilitation of fraud against consumers and the government.
  • We also believe Jack Dorsey has built an empire—and amassed a $5 billion personal fortune—professing to care deeply about the demographics he is taking advantage of. With Dorsey and top executives already having sold over $1 billion in equity on Block’s meteoric pandemic run higher, they have ensured they will be fine, regardless of the outcome for everyone else.
  • That’s just the high level summary. There’s a whole lot more detail in the report.

    I have never once used Cash App. I have an ancient Square Reader floating around in a bag somewhere, but I never actually ran any transactions on it. I do have PayPal, because I pretty much have to in order to buy or sell on eBay (though I’ve gotten to the point I do almost no selling there). I don’t even use Apple Pay, despite having a MacBook Pro and iPhone.

    Speaking of fees, here Louis Rossmann rants about how Square refuses to return fees for refunds:

    Anyway, if you’re using Square or CashApp, maybe it’s a good time to look into alternatives…