App Stores, AI, and Fraud, Oh My!

App Stores, AI, and Fraud, Oh My!

Hello Studio Fam,

This week we cover the latest Twitter drama (now featuring Tim Cook!), provide a throwback to how the App Store got started, give you a crash course in how generative AI is getting even better (and maybe a little scary), and breakdown one of the weirder parts of Sam Bankman-Fried’s bizarre interview by Andrew Ross Sorkin (given against the advice of his lawyers!)

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Elon visited Tim Cook at Apple HQ

After building iOS apps for over a decade, we’re more familiar than most with the rules governing the App Store. One of the more controversial rules involves the fees that Apple takes for selling digital products through iOS. These fees are as high as 30%, though there are exceptions. In 2020, Epic Games was the first major developer to challenge these fees. Although their lawsuits have so far been unsuccessful, none other than Elon Musk chimed in decrying the fees as a “tax on the Internet.”

This issue hasn’t gotten much attention until recently when Elon’s changes to Twitter’s moderation policies allegedly triggered some blowback from Apple. A fairly cryptic Tweetrevealed that Apple was allegedly threatening to remove Twitter from the App Store. Why exactly is unclear, but Apple has previously removed apps like Parleron the grounds that Parler had an insufficient content moderation policy. But less than 48 hours later, Elon posted a video of himself at Apple HQ with a message of thanks to Tim Cook for showing him around. “We resolved the misunderstanding about Twitter potentially being removed from the App Store,” Elon wrote. “Tim was clear that Apple never considered doing so.

Studio Byte Of The Week

Watch Steve Jobs launch the App Store in 2008 and explain why he thinks the 30% fee is a “great business deal.”

AI Can Teach You To Code (and Hack!)

The power of AI tools has grown considerably since the creation of GPT technology. This week saw one of the most consequent updates to the core GPT framework since the original introduction of GPT-3 in 2019. With the introduction of ChatGPT from OpenAI, it’s never been easier to produce incredibly complex responses with simple natural-language prompts. While “prompt engineering” has so far been needed to fine tune the output of an AI system, ChatGPT demos have produced remarkably eloquent and complete responses to even the most technical questions around code design and engineering.

The most common use for GPT has been to enhance the productivity of copy writers but these new tools are now powerful enough to accelerate the work of software engineers. Perhaps troubling, these tools can now suggest engineering solutions that exploit known vulnerabilities in computer systems. In this example, ChatGPT is provided with a common “capture the flag” challenge used to train developers to avoid writing vulnerable code. The AI correctly suggests a buffer overflow exploit. However the solution was not perfect so we’re safe for the time being from AI completely taking over the planet.

SHORT BYTES: The hottest AI startups

SBF meets ARS at the NYT

Credit: The NY Times

A visibly shaking Sam Bankman-Fried appeared remotely at the New York Times Dealbook conference this week to answer questions from veteran financial journalist Andrew Ross-Sorkin. The results were remarkable. Facing allegations of fraud, embezzlement, and outright theft of literally billions of dollars, SBF stated repeatedly that he doesn’t think he is criminally liable for anything. He also claimed that the damage is not that bad. “Our US platform is to my knowledge fully solvent. I believe withdrawals could be opened up today…and users could be made whole.

It’s true that the US operations of FTX were subject to more regulation and scrutiny than its international counterparts. And it’s maybe true that FTX’s US operations are solvent when looked at individually. But there is mounting evidence that SBF used US-based assets to backstop his losses at FTX International and his private hedge fund Alameda Research.

For example, SBF owns a significant chunk of stock in Robinhood, the online brokerage famous for bringing free stock trading to the masses. That stock is now being pursued by various SBF creditors,  including Peter Thiel’s now-bankrupt crypto platform BlockFi. Even if the US assets of FTX are solvent, it will be up to the bankruptcy courts to decide which assets are used to compensate investors.