Start Up No.1455: SolarWinds hack worse than thought, hedge fund prods Intel, is the Turing Test dead?, Xiaomi’s charger chat bites it, and more


Farmville is dead, as of 31 December; but its legacy lives on. CC-licensed photo by Mahmut on Flickr.

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A selection of 10 links for you. Vaccinated New Year! I’m @charlesarthur on Twitter. Observations and links welcome.

As understanding of Russian hacking grows, so does alarm • The New York Times

David E. Sanger, Nicole Perlroth and Julian E. Barnes:

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Interviews with key players investigating what intelligence agencies believe to be an operation by Russia’s S.V.R. intelligence service revealed these points:

• The breach is far broader than first believed. Initial estimates were that Russia sent its probes only into a few dozen of the 18,000 government and private networks they gained access to when they inserted code into network management software made by a Texas company named SolarWinds. But as businesses like Amazon and Microsoft that provide cloud services dig deeper for evidence, it now appears Russia exploited multiple layers of the supply chain to gain access to as many as 250 networks.

• The hackers managed their intrusion from servers inside the United States, exploiting legal prohibitions on the National Security Agency from engaging in domestic surveillance and eluding cyberdefenses deployed by the Department of Homeland Security.

• “Early warning” sensors placed by Cyber Command and the National Security Agency deep inside foreign networks to detect brewing attacks clearly failed. There is also no indication yet that any human intelligence alerted the United States to the hacking.

• The government’s emphasis on election defense, while critical in 2020, may have diverted resources and attention from long-brewing problems like protecting the “supply chain” of software. In the private sector, too, companies that were focused on election security, like FireEye and Microsoft, are now revealing that they were breached as part of the larger supply chain attack.

•SolarWinds, the company that the hackers used as a conduit for their attacks, had a history of lacklustre security for its products, making it an easy target, according to current and former employees and government investigators. Its chief executive, Kevin B. Thompson, who is leaving his job after 11 years, has sidestepped the question of whether his company should have detected the intrusion.

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That’s a lot of hacking. You might wonder about the root cause. The last point in that hints at it; below, Matthew Stoller has a more specific look at what that might be. (Remember when the worst America had to worry about from a hack was all of its credit records? Come back 2017.)
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How to get rich sabotaging nuclear weapons facilities • BIG by Matt Stoller

Matt Stoller on the SolarWinds hack:

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cybersecurity risk is akin to pollution, a cost that the business itself doesn’t fully bear, but that the rest of society does. The private role in cybersecurity is now brushing up against the libertarian assumptions of much of the policymaking world; national security in a world where private software companies handle national defense simply cannot long co-exist with our monopoly and financier-dominated corporate apparatus.

All of which brings me to what I think is the most compelling part of this story. The point of entry for this major hack was not Microsoft, but a private equity-owned IT software firm called SolarWinds. This company’s products are dominant in their niche; 425 out of the Fortune 500 use SolarWinds. As Reuters reported about the last investor call in October, the CEO told analysts that “there was not a database or an IT deployment model out there to which [they] did not provide some level of monitoring or management.” While there is competition in this market, SolarWinds does have market power. IT systems are hard to migrate from, and this lock-in effect means that customers will tolerate price hikes or quality degradation rather than change providers. And it does have a large market share; as the CEO put it, “We manage everyone’s network gear.”

…it’s not that the [SolarWinds] CEO is stupid. Far from it. “Employees say that under Mr. Thompson,” the Times continued, “an accountant by training and a former chief financial officer, every part of the business was examined for cost savings and common security practices were eschewed because of their expense.” The company’s profit tripled from 2010 to 2019. Thompson calculated that his business could run more profitably if it chose to open its clients to hacking risk, and he was right.

And yet, not every software firm operates like SolarWinds. Most seek to make money, but few do so with such a combination of malevolence, greed, and idiocy. What makes SolarWinds different? The answer is the specific financial model that has invaded the software industry over the last fifteen years, a particularly virulent strain of recklessness typically called private equity.

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You might be able to guess where this goes. We’ve heard the same story in toys, retail malls, manufacturing, and so many others.
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Exclusive: Hedge fund Third Point urges Intel to explore deal options • Reuters

Svea Herbst-Bayliss and Stephen Nellis:

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Were it to gain traction, Third Point’s push for changes could lead to a major shakeup at Intel, which has been slow to respond to investor calls to outsource more of its manufacturing capacity. It could also lead to the unwinding of some of its acquisitions, such as the $16.7bn purchase of programmable chip maker Altera in 2015.

Third Point chief executive Daniel Loeb wrote to Intel chairman Omar Ishrak calling for immediate action to boost the company’s position as a major provider of processor chips for PCs and data centers. The New York-based fund has amassed a nearly $1bn stake in Intel, according to people familiar with the matter.

…Loeb asked Intel to retain an investment adviser to evaluate strategic alternatives, including whether it should remain an integrated device manufacturer and the potential divestment of failed acquisitions, according to the letter. Third Point believes that Intel should consider separating its chip design from its semiconductor fabrication plant manufacturing operations, according to the sources. This could include a joint venture in manufacturing, according to sources.

Intel customers, such as Apple, Microsoft and Amazon are developing their own in-house silicon solutions and sending those designs to be manufactured in East Asia, Loeb wrote. He suggested Intel must offer new solutions to retain these customers rather than have them send their manufacturing away.

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There’s no way that Apple is ever coming back to Intel, unless Intel sets up a fab which makes chips at 5nm or less as TSMC can. True, it’s not a big customer. But Microsoft and Amazon (and in time Google?) are going to start shifting from x86 to ARM for servers too. We’re just on the verge of that happening. If Intel hasn’t got a plan for that, it’s already dead; it just hasn’t realised it.

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FarmVille once took over Facebook. Now everything is FarmVille • The New York Times

Daniel Victor:

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At its peak, the game had 32 million daily active users and nearly 85 million players over all. It helped transform Facebook from a place you went to check in on updates — mostly in text form — from friends and family into a time-eating destination itself.

“We thought of it as this new dimension in your social, not just a way to get games to people,” said Mark Pincus, who was chief executive of Zynga at the time and is now chairman of its board of directors. “I thought: ‘People are just hanging out on these social networks like Facebook, and I want to give them something to do together.’”

That was accomplished partly by drawing players into loops that were hard to pull themselves from. If you didn’t check in every day, your crops would wither and die; some players would set alarms so they wouldn’t forget. If you needed help, you could spend real money or send requests to your Facebook friends — a source of annoyance for nonplayers who were besieged with notifications and updates in their news feeds.

Ian Bogost, a game designer and professor at Georgia Tech, said the behaviours FarmVille normalised had made it a pace car for the internet economy of the 2010s.

He did not mean that as praise.

The game encouraged people to draw in friends as resources to both themselves and the service they were using, Mr. Bogost said. It gamified attention and encouraged interaction loops in a way that is now being imitated by everything from Instagram to QAnon, he said.

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Farmville finally shut down on New Year’s Eve. Oh, the virtual humanity! There’s also this Twitter thread (gathered on Thread Reader as a single page) by Pincus about what Farmville did and meant. You might not be surprised to hear that he thinks of it more positively than Bogost.
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The world is trapped in America’s culture war • The Atlantic

Helen Lewis:

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Sharing the internet with America is like sharing your living room with a rhinoceros. It’s huge, it’s right there, and whatever it’s doing now, you sure as hell know about it.

This month, Twitter announced that it would restrict retweets for a few weeks, and prompt its users to reconsider sharing content that has been flagged as misinformation. The reason for this change, of course, is the U.S. presidential election. The restricted features will be restored when its result is clear.

Anything that makes Twitter fractionally less hellish is welcome, as is the recent crackdown by Facebook and YouTube on QAnon conspiracy groups and Holocaust denial. But from anywhere outside the borders of the U.S., it is hard not to feel faintly aggrieved when reading this news. Hey guys! We have elections too!

…In the UK., provocateurs such as Piers Morgan seek out the most eye-catching opinions of not only British activists to denounce, but American ones too. Morgan’s new book, Wake Up, is a jeremiad against “the woke world view.” It expresses fury at the British government’s handling of COVID-19 and the failed police investigation into the disappearance of a British toddler, but also about Google removing the egg from its salad emoji, Rose McGowan’s tweet apologizing to Iran for the killing of Qassem Soleimani, the use of the N-word in rap music, and the opinion writer Bari Weiss’s resignation from The New York Times.

The wall-to-wall coverage of the Adele story and of other apparent outrages reflects a simple demographic and economic truth: There are six times as many Americans as Britons, so English-language publishers around the world are keen to serve the U.S. market. Going viral on the British corner of the internet is less rewarding, in terms of web traffic and advertising revenue, than “breaking America.”

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British rock bands always aspired (still do) to break America. Now media companies are just the same.
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The Turing Test is obsolete. AI needs a new benchmark • Fast Company

Rohit Prasad is chief scientist for Amazon’s Alexa system:

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To make AI more useful today, these systems need to accomplish our everyday tasks efficiently. If you’re asking your AI assistant to turn off your garage lights, you aren’t looking to have a dialogue. Instead, you’d want it to fulfill that request and notify you with a simple acknowledgment, “ok” or “done.” Even when you engage in an extensive dialogue with an AI assistant on a trending topic or have a story read to your child, you’d still like to know it is an AI and not a human. In fact, “fooling” users by pretending to be human poses a real risk. Imagine the dystopian possibilities, as we’ve already begun to see with bots seeding misinformation and the emergence of deep fakes.

Instead of obsessing about making AIs indistinguishable from humans, our ambition should be building AIs that augment human intelligence and improve our daily lives in a way that is equitable and inclusive. A worthy underlying goal is for AIs to exhibit human-like attributes of intelligence—including common sense, self-supervision, and language proficiency—and combine machine-like efficiency such as fast searches, memory recall, and accomplishing tasks on your behalf. The end result is learning and completing a variety of tasks and adapting to novel situations, far beyond what a regular person can do.

…While these AI services depend on human-like conversational skills to complete both simple transactions (e.g. setting an alarm) and complex tasks (e.g. planning a weekend), to maximize utility they are going beyond conversational AI to “Ambient AI”–where the AI answers your requests when you need it, anticipates your needs, and fades into the background when you don’t.

For example, Alexa can detect the sound of glass breaking, and alert you to take action. If you set an alarm while going to bed, it suggests turning off a connected light downstairs that’s been left on. Another aspect of such AIs is that they need to be an expert in a large, ever-increasing number of tasks, which is only possible with more generalized learning capability instead of task-specific intelligence. Therefore, for the next decade and beyond, the utility of AI services, with their conversational and proactive assistance abilities on ambient devices, are a worthy test.

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Xiaomi’s Mi 11 won’t come with charger after it mocked Apple for not including a charger • The Verge

Kim Lyons:

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Lei Jun, the CEO of Chinese phone maker Xiaomi, has confirmed that its upcoming Mi 11 phone will not come with a charger, citing environmental concerns. While that’s a legitimate argument against providing yet another hunk of plastic that resembles all the other chargers people already have, Xiaomi joined other phone makers who poked fun at Apple a few short months ago for not including chargers with the iPhone 12.

Jun made the remarks on Chinese social media site Weibo, saying people have many chargers which creates an environmental burden, and therefore the company was canceling the charger for the Mi 11.

…Shortly after the iPhone 12 launch, Xiaomi tweeted that it “didn’t leave anything out of the box” for its Mi 10T Pro, adding a short video clip that shows a Mi 10T box with a charger inside. Perhaps the takeaway here is that companies should keep the marketing team in the loop about future product decisions?

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The other question is whether Xiaomi will lower the price by an amount concomitant with the price of the charger. Heavily betting that it won’t. Still, good that there won’t be extra chargers in the world. Which company do we think will be first to offer a trade-in program?
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How my record player helped me feel the music • WIRED

Julian Chokkattu:

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Before the pandemic began, I had one record. It sat atop my red Ikea bookshelf, collecting dust. The Great Ray Charles. I picked it up at an event I attended a little more than a year ago, in the Before Times. I figured I’d find a way to play it at some point. But then, in mid-August, a turntable arrived at my doorstep.

My colleague and WIRED audio nerd extraordinaire, Parker Hall, recoiling after hearing I use a pair of decade-old, $30 computer speakers for my TV’s audio output, loaned me a pair of Klipsch speakers and a Fluance turntable. And just like that, four months later, my once pathetic record collection has swiftly grown to 16 pieces.

I don’t think I can forget the day I finally peeled the shrink-wrap from the Ray Charles album, choking from the mist of dust that sloughed off it. I had just finished setting up the Fluance RT80, which, by the way, was very easy. That surprised me. I always had this idea that turntables had a complicated and involved setup process, but I had it up and running in 10 minutes.

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If you’re old enough, as dammit I am, to have used a record player back when they were the principal way of reproducing music, this will have caused a suppressed giggle. You could spend 10 minutes setting up your record player – getting the stylus pressure right, checking for bias (pulling towards/away from the centre) – or you could spend just about zero.

But the points Chokkattu makes about the intimacy of watching an object create the sounds you’re hearing – that the turntable is in effect an instrument – are completely true, and much forgotten.
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The relentless 2020 news cycle in one chart • Axios

Stef W. Kight:

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From a pandemic to multi-city protests to contested elections, 2020 has been one unprecedented crisis after another. “We have never seen a year like this in Google Trends history,” Simon Rogers, a Google data editor, told Axios.”These were huge stories that changed how we search.”

Because of the overwhelming volume of search interest in the broad topics of “coronavirus” and “elections,” Axios left those terms out of our list.

We opted instead to include more specific, related topics like “masks,” “Anthony Fauci,” “absentee ballots” and “Joe Biden.”

The chart again reveals how short Americans’ attention span can be, with surges in Google searches often lasting only a week for a given topic.

You can see this with 2020 topics like House Speaker Nancy Pelosi tearing up President Trump’s State of the Union speech, Kobe Bryant’s death and the Beirut explosion.

But several big topics saw multiple weeks of increased interest this year, such as masks, Prince Harry and Meghan Markle’s exit from the royal family, the QAnon conspiracy theory, the record-breaking use of absentee ballots because of the pandemic, and the various investigations and conspiracy theories involving Hunter Biden.

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I think the accusation of “short attention span” is a little unfair, actually. What if people search for stuff, and then they’ve found out, and that’s it? Nobody is going to search for “Tiger King” all year long. Notable that the biggest spike in search was for “absentee ballot”.
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‘Peak hype’: why the driverless car revolution has stalled • The Observer

Gwyn Topham:

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Prof Nick Reed, a transport consultant who ran UK self-driving trials, says: “The perspectives have changed since 2015, when it was probably peak hype. Reality is setting in about the challenges and complexity.”

Automated driving, says Reed, could still happen in the next five years on highways with clearly marked lanes, limited to motorised vehicles all going in the same direction. Widespread use in cities remains some way further out, he says: “But the benefits are still there.”

The most touted benefit is safety, with human error blamed for more than 90% of road accidents. Proponents also say autonomous cars would be more efficient and reduce congestion.

Looking back, Reed says “the technology worked … people had the sense, it does the right thing most of the time, we are 90% of the way there. But it is that last bit which is the toughest. Being able reliably to do the right thing every single time, whether it’s raining, snowing, fog, is a bigger challenge than anticipated.”

Waymo, the Google spin-off that has led the field, could be a case in point: having quickly wowed the world with footage of self-driving cars, the subsequent steps appear small.

In October last year it announced the public could hail fully driverless taxis; yet only a fraction of journeys will not have a safety driver in the car – and the range remains limited to the sunny suburbs of Phoenix, Arizona, whose every centimetre has been mapped by Waymo computers.

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The problem is always in that 10%: plus the fact that it isn’t evenly distributed. You might abruptly need to take control of the wheel or brake on a motorway if a car careens in front of you (been there), just as much as on rural roads with grassy verges and long-gone centre lines. The next 10% will take 90% of the effort.
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Errata, corrigenda and ai no corrida: none notified

1 thought on “Start Up No.1455: SolarWinds hack worse than thought, hedge fund prods Intel, is the Turing Test dead?, Xiaomi’s charger chat bites it, and more

  1. Re: The World is Trapped in America’s Culture War

    The Guardian seems to be doing a decent job of breaking into the left-liberal American media landscape (a small fraction of the whole, true). I for one enjoy reading a paper with a view from outside our bubble and that pays more attention to the rest of the world.

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