Weekender: Chasing the AI Bulls

Plus: RIP DVD, Aquinas on AI, and more

I’m old enough to remember when more than 1,000 leading technology researchers and executives, including Elon Musk, Steve Wozniak and Stability AI CEO Emad Mostaque, signed onto an open letter calling on AI labs around the world to “pause” training of any AI system more powerful than OpenAI’s GPT-4 for at least six months, for fear the technology was advancing faster than our capacity to comprehend its implications. That was all of 11 months ago.

Since then, Stability AI has introduced a new, more powerful image generator, Midjourney began training a text-to-video model, and OpenAI unveiled Sora, a text-to-video generator that Oren Etzioni, founder of the non-profit deep fake research foundation TrueMedia.org, said left him “terrified.” And those are just a few examples from the atmospheric river of recent AI announcements.

If there was a pause I didn’t notice.

What’s been hard not to notice is the enormous amount of money gushing into AI companies. OpenAI last week closed a tender offer valuing the company at more than $80 billion. Anthropic has been fairly besieged by investors and would-be partners angling for a seat at the cutting edge of AI development, raising $7.3 billion since the pause letter went out. Nvidia, whose GPU chips power 80% of the data centers running AI clouds, this week blew away Wall Street estimates at both the top and bottom lines in its Q4 earnings results, and it guided higher for the latest quarter, sending its shares up by more than 15%, adding $276 billion to its market value in one day. Shares of Microsoft, Amazon and Meta, while not quite as rocket-fueled, have also been riding high on the AI wave.

That gusher of money is now driving the business, and it’s showing no signs of slowing down. On Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang said he expects the investment wave in generative AI to lead to the doubling of the number of data centers in the world within five years, all hungry for his company’s GPU chips.

All those new data centers will be churning through ever-more data, including billions of copyrighted images, books, sound recordings and miles of newspaper copy, as AI companies race to train ever-more powerful generative models.

Authors, artists and rights owners have filed at least 16 copyright infringement claims against major AI companies, seeking to slow the train. But litigation is a slow, expensive and uncertain path. Most of the lawsuits that have been brought so far, in fact, have struggled to gain traction in court. And even for those that can it will be years before there is a definitive resolution.

Meanwhile, AI companies are in a flat out sprint for a piece of that investor largess, and they’re not likely to slow down until the money does.

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ICYMI

End of an Era

Disney, once the leading champion of physical media sales, struck a deal with Sony Pictures Entertainment this week to outsource the manufacturing and distribution of Disney DVD and Blu-ray Discs to the studio rival. Sony was the primary inventor and biggest patent holder in the Blu-ray spec, so it will probably be the last studio to pull the plug on the format. But physical media’s final sunset is rapidly approaching, at least over LA’s I-405 freeway. DVDs, which replaced VHS cassettes as the dominant home video format, once ruled Hollywood, generating nearly $20 billion in annual consumer spending and eclipsing studio earnings from the box office. As of the end of 2023, however, spending on physical media (both sales and rentals) reached a mere $1.5 billion. Au revoir, ancien régime.

All Fame is Fleeting

Speaking of passings, Vice Media Group is the latest once-high flying digital media brand to take a fall. Valued at as much as $5.7 billion and employing more than 3,000 at the peak of the online media startup boom, the company went Chapter 11 last year and was ultimately acquired by its former lenders for $350 million. This week it all but gave up the ghost. CEO Bruce Dixon announced “several hundred” layoffs, telling staff in a memo that “it is no longer cost-effective for us to distribute our digital content the way we have done previously.” Going forward, the company will no longer post content on its former flagship site, Vice.com, and instead “will look to partner with established media companies to distribute our digital content, including news, on their global platforms, as we fully transition to a studio model,” Dixon said.

Will Fubo be FUBAR?

Stop me if you’ve heard this one before. Sports-focused online streaming platform FuboTV this week filed an antitrust lawsuit against Disney, Fox and Warner Bros. Discovery seeking to block a planned joint venture by the three media conglomerates to pool their sports streaming rights in a single bundle comprising live sports broadcasts currently available across 15 separate networks, including ESPN and ESPN+, ABC, FOX, FS1, FS2, TNT and TBS. While the combined service will be available to Fubo, the streamer believes it will come with a steep new price and will compete with Fubo’s current business. Fubo alleges it is being forced to carry dozens of other non-sports channels its subscribers do not want as a condition of licensing the sports networks they do want. That’s the same complaint traditional cable operators have had for decades. The Justice Dept. put an end to such “block-booking” practices in the movie theater business long ago, but TV studios have gotten away with it for years. Fubo’s complaint accuses the studios of using their “iron grip on sports content to extract billions of dollars in supra-competitive profits.” You don’t say.

What Would Thomas Aquinas Do?

Is AI good for the soul? According to Catholic scholar Thomas Marschler, who holds the Chair of Dogmatics at the University of Augsburg (how’s that for a title?), maybe not. Marschler takes his lead from Thomas Aquinas, the 13th Century theologian, who had little to say about AI in his own day as it turns out, but whose teachings Marschler believes can shed light on our current technological era. “For instance, when the phenomenon of artificial intelligence is used as a strong argument in favor of a naturalistic view of humans — here Thomas can save us from erroneous conclusions with his insights into the nature of the spirit-soul and its abilities, into the uniqueness of spiritual consciousness and its personal carrier,” Marschler told the Catholic News Agency. St. Thomas also encourages us “to think about whether what is technically feasible is always what we should implement in our actions,” he added. Eight hundred years later, that much at least is still a relevant question.