☕️ ‘Big Short’ investor accuses AI hyperscalers of artificially boosting earnings

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In today's Techpresso:

📉 ‘Big Short’ investor accuses AI hyperscalers of artificially boosting earnings

🛡️ Google unveils Private AI Compute, its own version of Apple’s private AI cloud compute

💥 Google sues group running massive SMS scam operation

🔮 IBM targets useful quantum computers by 2029

💰 Anthropic announces $50 billion data center plan

🛣️ Waymo becomes the first robotaxi provider to offer driverless rides on freeways

🎁 + 9 other news & articles you might like

🔮 + 2 handpicked research papers and tools

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• Investor Michael Burry alleges that AI hyperscalers are boosting earnings by understating depreciation expenses on massive capex for new servers and Nvidia chips, a maneuver he calls a fraud.
• Burry claims companies are extending the useful life of compute equipment to lower their yearly depreciation expense, despite the rapid 2-3 year product cycle of new Nvidia chips.
• He estimates this accounting maneuver could understate depreciation by $176 billion through 2028, which would overstate profits at firms like Oracle and Meta by over 20 percent.

• Google unveiled Private AI Compute, a cloud platform virtually identical to Apple's Private Cloud Compute, to process difficult AI requests that need more computational power than devices can supply.
• Google describes the system as a secure, fortified space offering the same security as on-device processing, ensuring sensitive data is available only to you and not even to Google.
• This added processing power will help AI features give more tailored suggestions on the Pixel 10, improving Magic Cue and expanding the range of languages for Recorder transcriptions.

• Google is suing a global operation named "Lighthouse," which provides a Phishing-as-a-Service kit for criminals to launch widespread "smishing" attacks that steal people's banking and email information.
• The company is using the Racketeer Influenced and Corrupt Organizations Act and other statutes to dismantle the scam network's core infrastructure and shut down its fraudulent branding operations.
• In addition to legal action, Google is endorsing three bipartisan bills in Congress designed to stop foreign robocalls, investigate fraud against retirees, and create a national strategy for scam compounds.

• IBM's new experimental chip, called Loon, shows progress toward its 2029 goal by physically putting a proposed error correction algorithm directly into the hardware for the first time.
• The design makes chips harder to build because it requires both basic qubits and new quantum connections between them to run the company's specific error correction method.
• IBM is also releasing its Nighthawk chip this year, inviting researchers to openly test its claims of beating classical computers on certain tasks by the end of next year.

• Anthropic is committing $50 billion through a partnership with neocloud provider Fluidstack to construct custom data centers in Texas and New York to support its growing compute needs.
• These new facilities are custom built for Anthropic’s workloads and will come online throughout 2026, representing the company’s first major effort to build its own dedicated infrastructure.
• While a massive investment, the $50 billion outlay is significantly smaller than infrastructure projects from competitors like Meta and the Stargate partnership involving OpenAI, SoftBank, and Oracle.

• Waymo is now offering driverless robotaxi rides on freeways in San Francisco, Phoenix, and Los Angeles, a move the company says will reduce ride times by as much as 50 percent.
• This expansion creates a unified 260-mile service area to San Jose, though riders must first note a preference for freeway trips inside the Waymo app to be matched with one.
• Mastering freeway driving took years because critical events are less common, requiring extensive closed course and simulation testing to prove the system’s safety and reliability for rare scenarios.

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• $650 billion in annual revenue required to deliver 10% return on AI buildout investment, J.P. Morgan claims — equivalent to $35 payment from every iPhone user, or $180 from every Netflix subscriber 'in perpetuity' LINK

• The Mac calculator’s original design came from letting Steve Jobs play with menus for ten minutes LINK

• Humans can no longer distinguish AI music from real music, study finds LINK

• OpenAI reportedly burning $15M a day to power Sora video app LINK

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