 Coming up on DTNS, what Jeff Bezos is going to do now and who the heck Andy Jassy is, why SolarWinds news you thought might be bad, might actually be good, and a hot new market for robotics companies. This is the Daily Tech News for Wednesday, February 3rd, 2021 in Los Angeles. I'm Tom Merritt. And from Studio Redwood, I'm Sarah Lane. From Salt Lake City, I'm Scott Johnson. And I'm the show's producer, Roger Chang. We were just talking about what the next Live With It will be, comparing our favorite weather apps reminiscing about blizzards. Get all of that and more in Good Day Internet. Become a member at patreon.com slash DTNS. Let's start with a few tech things you should know. The Korean newspaper, Dong-A Ilbo's sources say that Apple may sign a deal with Kia on February 17th to invest four trillion won. That's about 3.6 billion U.S. dollars to set up electric car production at Kia's factory in Georgia. The aim would be to introduce Apple cars in 2024 with an initial target of 100,000 vehicles per year. Security researcher Matthew Hickey disclosed that a 10-year-old vulnerability recently found in the pseudo utility could also impact macOS with minor modifications. Last week, researchers at Qualys found the bug could allow low privileged users root access, but only tested it on Linux systems. So a lot of people are asking, would that work in Mac? And the answer, according to Matthew Hickey, is, yeah, that one should be patched in Mac. Bloomberg sources say that Jack Ma Run Ant Group and Chinese regulators have agreed to restructure Ant Group into a financial holding company, creating capital requirements and regulations similar to those four banks. This could include Ant Group's blockchain and food delivery businesses, though it's unclear if Alipay would also be part of the restructuring. An official announcement is reportedly scheduled for before China's Lunar New Year holiday, which kicks off next week. And Ant is still said to be weighing a potential IPO. Huawei posted on Weibo that it will announce a new foldable flagship phone called the Mate X2 on February 22. The image posted along with the announcement makes it look like it's a model with the screen folding on the inside, kind of like the Galaxy Z Fold. Previously, Huawei's foldables had the screen on the outside so that they would kind of turn into a phone model when you fold them up. In its fourth quarter earnings, Alphabet revealed for the first time that in 2020, Google Cloud lost $5.6 billion on revenue of $13 billion with losses increasing annually since 2018. Overall, the company earned $22.30 per share on revenue of $56.9 billion. That's up 23% on the year and beat analysts' expectations. Advertising revenue was up 22% on the year with YouTube ad revenue up 46%. Let's talk Bezos. We had the news break right before the show yesterday that Amazon CEO Jeff Bezos will stop being the CEO in Q3. That starts in July. So I assume right at the beginning of the quarter, but they didn't really put a date on it. He becomes executive chair of Amazon's board and AWS CEO Andy Jesse will become Amazon CEO. Here's some more details about what this means. Bezos is quick to point out in an email to staff that he's not retiring. He has lots of other projects he can devote his time to, including Blue Origin. They make Rockets, The Washington Post, they make news. Expect him to also increase time with charitable causes. He has the Bezos Earth Fund and the Day One Fund. But he's also not stepping away from Amazon itself. He said in that letter that he plans to focus on, quote, new products and early initiatives. So he's still going to drive new ideas, new stuff. This is similar to what Bill Gates did when he originally handed over the CEO role to Steve Ballmer, but then remained in a part-time role while he shifted his focus to the Bill and Melinda Gates Foundation. There are a lot of parallels there between him and Bezos. Larry Ellison also remains executive chair of Oracle. After stepping out of the CEO role in 2014, software cats is the actual CEO of Oracle. But you hear from Ellison all the time. He's certainly active with Oracle. So that gives you some idea of what Bezos might be up to. But what about this Andy Jassy guy? Jassy has an MBA from Harvard, not an engineer, even though he was the CEO of AWS. He's been at Amazon for 24 years. It's been the only place he ever worked. He started in the marketing department, sort of became Bezos' chief of staff. And then he launched the group that would become Amazon Web Services 15 years ago. It is Amazon's most profitable division. According to their latest earnings yesterday, it's a $50 billion run rate. AWS has 33% market share in cloud, well in front of Microsoft's 18% and Google's 9%. And like Bezos, Jassy's a hands-on leader who aims to win at all costs and consistently likes to reinvent things to stay ahead of the competition. AWS used to be about storage and hosting. It's way more than that now. It's not just the pay-as-you-go S3 service. It's cloud infrastructure, databases, analytics, CDN, machine learning, a bunch of other stuff. So Amazon, like Microsoft, did with Sacha Nadella, is elevating their cloud computing guy to CEO. That certainly is working out for Microsoft. But if you're wondering who's going to replace Jassy at AWS, Peter DeSantis is vice president of global infrastructure and Matt Garmin, vice president of sales at marketing, are both on Bezos' executive team. That's what they call the S team. So they are kind of the most likely candidates, but nobody knows for sure. It could be a number of other people as well. It's a big change. Before the show, I think it was Sarah, or somebody mentioned it anyway, this idea that not a lot of us had heard of this Jassy fella. And I thought it was interesting. You said that this is the only job he's ever had. They brought it straight out of Harvard. I mean, I don't know. Maybe he delivered pizzas at Harvard. He went from Harvard to becoming an employee of Amazon and he hasn't left. It's massive. I don't think it can be understated how that leadership in AWS share is and how massive that is moving forward, assuming that cloud and cloud infrastructure continues to be a leader in the space that they're all involved in. But to be that far ahead is a big deal because what that means is they have partners that are using them for their massive backend needs instead of building their own. So companies, I'm thinking in the gaming space here, but companies that manage huge amounts of data and lots of player data, a lot of them are using AWS for their backend cloud infrastructure. Others are using Microsoft and others, but it cannot be denied that the place we used to buy books and then eventually toilet paper is now a huge portion of the internet, which I don't know is good or bad and hopefully Bezos will have to do less visits to Congress and explain himself than he does now. But I guess time will tell. Yeah, I mean, I didn't see a whole lot of people saying, oh, wow, this is so crazy. Something's going on on Amazon. Listen, if Jeff Bezos is now the executive chairman, he's still the boss. He just created a role that's above what the CEO was and it just didn't exist before. So like he said, not retiring. It just sounds like he's like, you know, this Andy Jassy guy has been with me for a really long time. Obviously is an Amazon loyal. He's not an engineer, but he certainly can manage engineering teams. He's part of Amazon's most profitable business. Makes perfect sense. I was talking to a friend yesterday who said, yeah, but I mean, can he run the whole company? I was like, I mean, I don't know who would be the better choice at this point when you look at where Amazon is bringing in numbers from. And yeah, I mean, it doesn't seem that dramatic to me. If Amazon was in trouble, if they didn't just have a great quarter, which they did, they just announced earnings, you know, Amazon's doing great. Then you might say, hmm, Bezos getting pushed out by the board or something like that. But this sounds pretty routine. Bezos has been CEO since 1994. The company has changed so much since then. It is so large. No one person can really be CEO of a company like this. Anyway, it sounds like he's like, listen, I got other stuff to do. I want to go to space. I want to take people with me. We got the Washington Post to run. And I'm still going to be pretty much signing off on everything at Amazon. But let's let my S team run the day to day just a bit more. Yeah, it's easy to forget that Bezos had already stepped away from the day to day before the pandemic hit. But because of the challenges presented by this unprecedented situation, Bezos stepped back into the day to day. And this is him finally getting back around to what he was probably getting ready to do back then, which is step away from the day to day. Andy Jesse, he's not exactly a clone of Bezos, but he has the same style. He operates in the same way. What Amazon has done in general is let's stay ahead of what people think we are. We're not just books, we're also groceries. We're not just groceries, we're also cloud services. We're not just cloud services, we're also logistics. Jesse has done that within AWS. Like if you want a mini me of Jeff Bezos, Jesse's kind of about as close as you could get for that. And like you say, Bezos isn't going anywhere. He'll still be around. They're just shifting the roles a little bit. And that seems perfectly natural. Yeah, not only that, but that's the place where they made the most profit and did so well. I think he's the perfect guy. So we'll have to see how things go. Moving on, five sources told Reuters that a second flaw in software made by SolarWinds was exploited by attackers to access US government computers at the National Finance Center, which operates payroll for multiple US government agencies, including the FBI, State Department, Homeland Security, and the Treasury. The government spokesperson said, quote, there was no data breach, unquote. The attackers used infrastructure and tools known to be deployed by Chinese backed actors. So SolarWinds says it is aware of a single customer, excuse me, a single customer compromise by a second set of attackers, but had not found anything conclusive, not yet anyway on who was responsible. This flaw is separate from the one discovered previously that was exploited by groups linked to Russia. DTNES covered this pretty extensively. So if you haven't heard that, you may wanna go back. It appears this second attack gained access, or excuse me, gained access to not plant a back door, but gain network access some other way. Then exploited SolarWinds software to spread. This new flaw was patched in December. Security researchers at TrustWave have discovered three vulnerabilities in products sold by SolarWinds, which have been patched before anyone could exploit them. But anyway, more details will be announced on February 9th. Yeah, so if you're like, wait a minute, they said there was no data breach, but there was an intrusion. Yes, that's what they're claiming. The government is saying there was an intrusion into our network. They did take advantage of a SolarWinds vulnerability after they got into the network. So this is a less serious one than the previous SolarWinds problem with Orion, but they don't think any data was breached. They think that even though they were in the network and able to access SolarWinds, they weren't able to access all that payroll data, basically. I hope they're right, because that's State Department, Homeland Security, Social Security numbers, all the personal information on all the folks who work at state, et cetera. That's huge. I do think this is good news for two reasons. One is this is a kind of lower level observational intrusion that might not have been discovered if they hadn't discovered the other SolarWinds problem. It's a less serious one, but it's still serious. And so it's good that they're looking, and when you start looking, you start noticing things you wouldn't have noticed otherwise. So it's easy to look at this and go, oh, here we go, another one cropped up, but it was found because they're paying closer attention. And that goes right to what you were saying, Scott, about TrustWave, discovering three vulnerabilities that have not been exploited because everybody's got their eyes on this now. Yeah, when you started talking about it earlier, there is a tendency for us to go, oh, oh, another one, when do the holes end? It's never ever gonna end, but really this just says, hey, we found a problem. Okay, well, there are other problems. Okay, well, good. Now we're looking and now we're seeing more problems. Like this might be the safest time to be involved, invested, and or using products from this company because now everything's on high alert. So I'm happy to subscribe to that attitude about this because it is easy just to say, well, what is this? A giant piece of Swiss cheese and really it's just, let's pass the holes we know about and be smarter. Yeah, a perfect world. It's like software is impenetrable, it's perfect. But that's, you know, we know that that isn't always the case. And like you said, Tom, as long as a lot of this personal payroll data indeed was not accessed, it is a good thing. It makes these networks stronger. It's kind of the bad that has to happen in order for everything to be better on the other side. If it comes out later, whoops, actually some data actually was found and stolen. Well, that's a different story, but we're not there yet. Yeah, I like, Scott, you said earlier today, it's like, you know, the safest time to eat at the taco shack is the day after it opens up after being shut down by the health inspector cause they fixed everything. Right. If it's not shut down completely, it's always best to go the day after they had a health violation because they're never going to be cleaner, never going to taste better and never be fresher. It's a little bit like this. And also I just think it's, there's connected stuff in the industry that, that you would include other companies in that are, that, that these guys are in that are going to also double triple check their systems, make sure that any vulnerabilities they may have aren't there because they're hearing about this and going, oh, we don't want this to happen to us. So there's like a nice knock on effect when others are, you know, getting all the scrutiny to make sure you're not the one getting the scrutiny. So yeah, go get the taco after is what I'm saying. We're not saying that taco shack will always be safe. You know, it's time to celebrate necessarily, but just a little countervailing sentiment to the prevailing solar winds. Joining the conversation in our Discord. What do you think? Are we full of it? You can join by linking to our Patreon account at patreon.com slash DTNS. So we're sort of used to a dual ecosystem where the rest of the world has social apps like Twitter, WhatsApp and TikTok. You might say, well, yeah, I'm in that world. Then there's China that has Weibo, WeChat and Daoian. Clubhouse, audio streaming app, very hot with the iOS crowd. So far seems to be bucking that trend. Protocol reports, Clubhouse Invite Code has been trending on Weibo. Clubhouse invites are up for sale on Jianyu, which is an eBay-like service. Chinese entrepreneur Justin Sun, who's a founder of Crypto Platform Tron announced he's building an app like Clubhouse specifically for the Chinese market called Two, like the number two. But live audio chats aren't new with apps like YY and even WeChat becoming a popular place for them prior to the Clubhouse craze. So Clubhouse didn't invent this exactly. They just weren't trendy with tech folks or activists or journalists. And we spoke a couple of days ago about how those types of people who are hoping to share information with a large number of other people within China do want to find these kinds of tools. Yeah, when we were talking about the news licensing requirements in China coming in, we were wondering, okay, now that they're cracking down a little harder there where are these folks gonna go? And it seems like this story is the answer. For now, go into Clubhouse because it's a lot harder to get someone to take down something they said live, right? It's a lot harder to monitor all of what's being said in a situation like that. So I imagine we'll probably see at some point Clubhouse banned in China wouldn't be shocked if they just say, you know what, just get rid of it altogether. But even if they do, what if two launches as a Chinese version? How do you control that? How do you control what people are saying in an almost infinite number of chat rooms? They're gonna have the same problem. Without just banning that kind of technology overall. Yeah, I don't know how they do it either. You know, the technology in general is so weirdly, late, let's say late 2008, 2009, maybe 10 to me. Like the idea that our social network is a thing where we pop in and say stuff and then pop out. It's a revolutionary. I'm still surprised it's a thing now. Like I'm really surprised at the success of Clubhouse, if I'm honest, but that's how these things work. They get a hold, the rubber meets the road, suddenly everybody wants to make a duplicate. And if China wants to shut them all down, I guess they can. But if they launch that two app in China and they've got the same concerns, then the same bands are gonna happen. Like I don't, I don't know how that app survives unless it's like extremely hard to post anything without having somebody scrutinize everything you say. I just don't know how that would work over there. Usually what happens is there's a Chinese version, like Weibo, that's like, okay, we'll play by the rules. We'll do these things. I'm sure there are some things they will ask them to do on two. Maybe you have to be registered to open a chat room or something. There's ways to limit it. I'm curious what those are gonna be. Facebook released Messenger for Oculus Quest headsets that gives you the option to start an Oculus party from Messenger. The company also released App Lab for Oculus that provides a searchable way for developers to distribute experimental and test versions of apps outside of the Oculus store without having to ask their folks to side load. So, you know, it's like a test flight situation for Oculus apps, which is kind of cool. And Messenger is, seems like Sarah is a way to get people to stay in the Oculus Quest longer without having to leave. Yeah, for those Oculus users who are not thrilled about having to, you know, connect Oculus to a Facebook profile, I'm not really one of those people. You know, I use Facebook when I want to use Facebook, but it doesn't really surprise me that Facebook owns Oculus and Facebook wants you to use the login for Oculus. That aside, I don't use Facebook Messenger all that much. I probably get a Facebook message that I find relevant once a month or something like that. So, this by itself is not super compelling to me, but the idea that in the future down the road, especially with this App Lab for Oculus and developers getting a little bit more creative and Oculus hopefully being a little bit more lenient about the kinds of messaging that you might be able to do while inside some sort of an app game or universe of some kind is really cool. For example, I sometimes, yeah, I've got my headset on for like an hour, you know, I'm exercising or I'm playing Tetris or whatever, and I can feel my smartwatch buzzing, you know, somebody's texting me or there's a, yeah, it just happened or, you know, it's calendar thing that's coming up, whatever. And it's, you know, I either have to like get out of my world and mess that whole thing up or just ignore it and be like, things are happening, I'll just get to it later type thing, it's like your phone buzzing in your pocket, kind of annoying if you don't know what the buzz is about. To have something that's, I don't know, not super intrusive while I'm still kind of outside of the real world and doing this other thing would be great for me. Of course, I'd like to have the opportunity to say like, here are the notifications I want, here are the notifications I don't want. So it should be really customizable, but that brings having this thing on your head, whatever it may be, you know, Oculus or you know, there are other VR platforms as well to less of like a total like immersive escape from the world to something where you're like, I'm in here, but the rest of my computer can still access me. I like that idea. Yeah, I do too. I was saying before the show and I'll just repeat it here. I just think this thing needs to be really cognizant of people's desire to customize what they get and what they don't. I don't fault Facebook for saying, we need cohesive tools within our ecosystem for communication, for notification. All of that stuff makes sense to me. Like, why wouldn't they do that? The fact that they're using Messenger makes sense. They've already got a ton of people on there. They did it with Instagram and pulled those people over. Why not expand that? But they need to make sure to give people lots and lots of tools for what they want to hear, what they don't want to hear about, when they want to hear about it and so on or else that's a big mistake. You can get real noisy. Hey, check this out. Sony announced it sold 4.5 million PlayStation 5s in its quarter three. That'll give you an idea of, well, why it was hard for you to get one. Roughly the same as the debut quarter for the PlayStation 4. With overall sales in the gaming division, up 40% on the year to 883.2 billion yen. That's roughly 8.4 billion US dollars. Sony also reported 47.4 million subscribers to its PlayStation Plus service, which is up 22% on the year. So an interesting contrast, some similarities to Microsoft's Xbox earnings report from about a week and a half ago. Yeah, the fact that it's similar to the debut quarter of the PS4 makes me think there definitely is a supply problem, right? That this isn't just, because we've been talking about, well, there's probably higher demand than usual. Actually doesn't look that way. It looks like they just can't make them fast enough. And that's for multiple reasons, mostly pandemic related. Yeah, and Sony, I mean, rather Microsoft claims more units sold in a more successful launch for the series SNX than they've had for any of their consoles up to this point. I think what that tells me is almost the same message that you just shared, which is production. Microsoft had a slightly better handle on production this time, but it's kind of aces. They're still impossible to get either one of them. They're really hard to get. And Sony was certainly constrained in terms of sales by just simply not having enough to sell. Like they just weren't enough there. So this stuff tends to happen and even out over time. It's just so much more acute this time around because everybody wanted one. People had money saved from vacations they didn't take. They're ready for some hardcore gaming. It's a new generation. It's super exciting. And there just weren't enough there, possibly due to the whole, the same pandemic that made the demand so high. So we talked previously on the show about auto makers not getting enough chips. And so the same problems that are happening there likely happening here too. It's a really fun time to be a games analyst type person if you're really into this stuff. It's a great follow, but go look at those numbers for yourself, see if you can make sense of them. My guess is what we're looking at is a very successful 2021 for everybody in next-gen gaming. And that's good for gamers. Yeah, yeah. Once the factories have ramped back up and everything, this should even out. Fingers crossed. Well, let's talk robotics for a second, shall we? And let's see if you can guess what I'm getting at here. A Berkeley, California robotics company thinks it can exponentially expand a particular market that's taking off and taking off, especially in Asia. Oh, it's probably like home assistance robots. Something like that. No, Tom, you'd think so, but that's not it. Okay, some kind of factory efficiency robot that's better. Wrong again, Tom, afraid not. Keep going. I know what it is. It's like industrial inspection, like the spot robot from Boston Dynamics, right? Unfortunately, no. And I'm starting to think that you're not gonna guess this, so I'm just gonna go ahead and tell you. It's eyelash extensions. Whoa. You heard that right, people. Company called Loom, that's L-U-U-M, says it's creating a robot that uses machine learning to apply eyelash extensions in 20 minutes at an affordable price. Now, if you're not familiar with eyelash extensions being put onto eyelashes that already exist on people's faces, it is a painstakingly slow process. One by one, the eyelashes are attached to eyelashes, takes hours sometimes. This is something that could really be more affordable and much less time consuming. Not the hours of sitting, hundreds of dollars people pay for quality extensions. Now, yeah, this stuff is not cheap. You lay in a bed with a mask on, this is Loom's strategy here. The machine works over you with little plastic prongs on the end of its arms. They're held by very light magnets to stop them from poking you in the eye. The company says that the arms themselves are very soft. So even if they hit your face, it's not gonna hurt ya. Supposedly just shaking the robot would cause the arms to detach and prevent injury as they are very light. So the robot gets bumped or you kinda change your mind or there's an earthquake. All these sorts of things have been taken into consideration. Loom has tried out its approach with Epson industrial robots on 25 brave volunteers. And so far it takes as long as doing it by hand. So not saving any time just yet, but saving the precision or lack of, maybe somebody drank too much coffee of human hands. Though the company is confident, it can improve the speed over time. The robots are expected to cost about $125,000. Sounds like a lot. But hey, if you're running a popular salon and a lot of people are getting the service, you will make your money back. Yeah, you don't have to pay healthcare to the robot yet. And if they can make good on their promise of 20 minutes, then you'll be able to do more people so that that makes the investment worth it. It seems like an interesting gamble for Loom, to say, look, we can go head to head with everybody else in all the same spaces, or we could try to create our own niche and expand something that it's a big trend, but it's not a huge market yet. And they think they could make it bigger because a lot of people don't get the extensions even if they want them, because they don't wanna pay for it and they don't wanna spend that much time. And you're also talking about a market that may see growth if there's an alternative way to go get these things done where you don't have human hands in your face the whole time, which you alluded to. Like that to me can't be understated. The idea of moving forward in a world where, this pandemic may be coming to an interesting fork in the road when it comes to vaccines and so on, they're still gonna be a ton of concern for quite a long time. If a company invested in something like this and they can push more people through it, in theory, it's like buying a coffee machine at the coffee house. You don't just buy a cheap coffee machine, you gotta buy something big and industrial. Why not one of these? So sure. Once they get this going, if they are successful in getting this going, then they can do nail art machines and pedicure machines and who knows what else. Sky's the limit. Yeah. All right, let's check out the mail bag. This one comes in from Peter. We talked to you the other day about public, a stock trading app that is saying, okay, we're gonna let you tip us and that's how we're gonna make our money and set us apart from the crowd. Peter says, this is actually a micro version of many fee-only asset management firms. That is a money manager or advisor who is compensated for his or her advice by the person receiving it. This eliminates the conflict of interest of an asset manager or stockbroker pushing something based on the commission that they receive from the mutual fund company. Payment for order flow reminds me of the SNL sketch where they talk about the change bank that makes money on volume. It'll be interesting to see if this is sustainable on the micro level. Yeah, this is a great thought, Peter. It's a great comparison. I actually emailed Peter to be like, do you know of any asset management firms that do no fee and just let you set the amount? And he's like, no, I don't know any going quite that far as far as public, but it's still a fair comparison of here's a company that's like, we're just gonna make money on providing you good service versus we're gonna make money off of making you buy more things. That's a bit like we're going through a right, a refi right now on the house and the company we're going with doesn't do any commission based anything. It's all based on set fees and their fees that are sort of universally accepted within their industry of loan making. And I don't know why, but I like that. I don't know why. I feel like commissions make people promise you things that they can't always deliver different industry, you know, different industries are gonna do it differently. But for whatever reason, I'm a fee guy. Fee guys, Scott Johnson. Well, if you also love fees or if you don't or if you have something on your mind, you got a question for us, feedback at dailytechnewshow.com is where to send that email. Thank you in advance. Also shout out to patrons at our master and grandmaster levels. Today we will give a big hats off to Dustin Campbell, Andrew Bradley and Brad with 2Ds. Also thanks to Scott Johnson for being with us this fine hump day. Scott, what's been going on with you? Well, let me tell you. This show for me is a place for me to come talk about all kinds of tech, but I really jive on the stories when we hit them about gaming, the industry, about particular companies making certain moves, games themselves. If you like that discussion that happens here on DTNS, you might really like a show that I do every week with some co-hosts on Thursdays called Core. And it's all about core gaming and the business around video games. If that sounds interesting to you, go check it out at frogpants.com slash core or you can find it wherever you get your podcast. And in the meanwhile, follow me on Twitter. I'm at Scott Johnson. All right. Hey folks, you want an ad-free version of DTNS? Support us on Patreon and get your own personal RSS feed supported directly by you. Nobody else, it's yours and yours alone. Find out more at dailytechnewshow.com slash Patreon. Folks, we're live Monday through Friday, 430 p.m. Eastern, 2130 UTC. Thanks to everybody who tunes in live. If you want to find out more, dailytechnewshow.com slash live is where to do that. We'll be back doing this tomorrow with Justin Robert Young. Talk to you then. This show is part of the Frog Pants Network. Get more at frogpants.com. The Diamond Club hopes you have enjoyed this program. Thank you.