Chaos Lever Podcast

In this episode, we discuss the European Court of Justice's decision forcing Apple to pay €13 billion in back taxes to Ireland, marking a major moment in corporate taxation within the EU. We also dive into Microsoft's breakthrough in quantum computing, as they announce the creation of 12 error-corrected qubits, a step forward in the notoriously difficult area of error resilience. Lastly, we explore OpenAI's "Strawberry" model, designed to improve reasoning in AI, and the latest drama involving OthersideAI's inflated claims about their new AI model, Reflection. 

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What is Chaos Lever Podcast?

Chaos Lever examines emerging trends and new technology for the enterprise and beyond. Hosts Ned Bellavance and Chris Hayner examine the tech landscape through a skeptical lens based on over 40 combined years in the industry. Are we all doomed? Yes. Will the apocalypse be streamed on TikTok? Probably. Does Joni still love Chachi? Decidedly not.

Welcome to tech news of the week.

This is our weekly tech news podcast where Chris and I get into four

of the best tech news of the week. We're going to be doing a podcast. We're going to be doing a podcast. We're going to be doing a podcast. We're going to be doing a podcast where

Chris and I get into four interesting

articles that caught our attention.

I'm going to go first,

Chris, if that's okay with you.

My mic's muted.

Good.

It should be.

The EU takes a big bite out of Apple.

The European court of justice has handed

down a landmark ruling that forces Apple

to pay 13 billion euros in back taxes

based on what they judge.

Based on what they judge to be an illegal

tax structure put forth by Ireland.

The case dates back to 2016 and regards a

period of almost 11 years when Apple's

effective tax burden in

Ireland was a mere 1%.

Since that time, the loophole providing

such relief has been closed and a

universal 15% corporate tax has been

adopted by most of

the EU's member states.

Not surprisingly, Tim Cook claims no

wrongdoing, as does the Irish government.

The case was originally ruled in Apple's

favor back in 2020 by a lower court, but

the European court of justice was primed

to have the final say.

And after a brisk four years, I think

that's fast in the legal world.

They decided that Ireland

had granted Apple unlawful aid.

You might be wondering about the money.

Is the EU going to send Apple a PayPal

invoice or a written

proclamation by a carrier pigeon?

Will swallows, laden or

unladen be involved somehow?

Fortunately, no.

The back taxes have been sitting in an

escrow account since 2018.

And with this judgment, they can finally

be released to the Irish state.

Just like with GDPR, the EU once again

shows us the way

forward on corporate taxation.

If only we could get Amazon or Walmart to

pay 15% of their net income with a lame

duck president, like

maybe he could do it.

Well, or more likely Biden is too busy

racing his Corvette down the Delmarva

peninsula room, room bitches.

Seems like a Camaro guy.

Maybe.

Quantum update error corrected.

Cubit count alert.

As we've talked about a number of times

on the show, creating cubits in quantum

computers is getting pretty routine.

I mean, relatively speaking, creating

systems that can

withstand errors, however,

continues to be devilishly hard.

Just so we're all on the same page, we

are way over 1000 cubits in a number of

running systems.

So where are we with

error corrected cubits?

You might ask.

Well, Microsoft of all people announced

an answer with what

they're calling the largest

current number of error corrected cubits.

And that number is 12.

The approach is interesting.

Microsoft has partnered with a quantum

computing organization called Adam

Computing.

The approach they're taking is to spread

the value of each cubit across several

cubits, thus making any errors or issues

that come up, quote, less catastrophic.

Hilarious language.

Love it.

It looks like they're going with

something around a four

to one ratio, creating 12

logical error corrected

cubits backed by 56 physical ones.

And the approach does seem to be working

at least for certain algorithms.

The test improved the error rate from

2.4% down to 0.11%, which is substantial.

Yeah.

Now it's important to note that error

corrected systems are

helpful for a number

of reasons, one of which is sometimes in

quantum, there can be errors that can't

be detected, which is different than

errors that can be detected.

And I will leave the difference and

challenge for both of them as an exercise

to the reader.

Long story short, though, spreading out

the work and creating logical cubits like

Microsoft and Adam are doing in this

means that even these failures, the ones

that are not detected

can at least be mitigated.

Neat.

Open AI announces strawberry models.

Quick open up chat GPT or copilot and ask

it how many R's are

in the word strawberry.

Go ahead.

I'll wait.

Listen, buddy, I've got two liters of

Joel Cola, a Sudoku

book and adult diapers.

I can wait it out.

You done?

I could let us proceed before my heart

leaps out of my body and strangles my

teeth chances are your

friend, I couldn't get through it.

Chances are your friendly LLM told you

that there are two R's in strawberry,

which unless you are terrible at

spelling, you know is wrong.

So what?

LLMs get stuff wrong all the time.

Even better.

If you tell it the correct answer, it

will cheerfully suggest that you are

the one counting stuff wrong.

What is happening?

It's like, I'm afraid you're mistaken.

There are only two R's.

What is happening is that LLMs break

things into tokens to process information

and the word strawberry is broken into

two separate tokens.

The best guess is that chat GPT season R

in each token and counts two R's.

This thorny problem is so well known that

open AI codenamed their new AI

model line as strawberry,

also known as O1 for reasons.

The new model is allegedly capable of

reasoning through an answer, much like

a person does, instead of just trying to

vomit the whole thing out at once.

O1 is the new model developed in parallel

with the forthcoming GPT-5,

and it makes use of reinforcement

learning, aka telling the model

when it gets things wrong.

The reinforcement learning and multi-step

reasoning should allow O1 to arrive at

the correct answer of three for R's in

strawberry, and also help it solve

math word problems that have so far

stumped previous generations.

I got to try the O1 preview

today and it apologized to me.

Quote, "You are absolutely correct and I

apologize for the oversight earlier.

The word strawberry contains three R's."

End quote.

Absolutely amazing stuff.

AI dude bro lies

about model capabilities.

Gets caught.

Hilarity ensues.

This past two weeks has been

pretty wild for other side AI.

The company became AI world famous for

its product, which is called Hyper Write,

which is apparently a writing assistant.

Is it hyper wrong?

But um, but of course, success in the

Hyper Write realm wasn't

enough for other side AI.

And thus they started hyping up their own AI.

Going under the brand name reflection.

Allegedly based on llama 3.1.

This past week, CEO Matt Schumer

breathlessly announced

reflection 70 B, which

he claimed insane performance on.

He showed tables and everything.

He even published the model and uploaded

it so other people could download it and

test it.

This is the first time that we've ever seen a model like this.

This turned out to be a mistake as nobody

could come close to the claimed

performance numbers.

In order to counter this, Matt went ahead

and claimed that the

upload was corrupted.

Sure, Matt.

Other side AI opened access to a private

API so that people could test reflection

70 B at home base.

Seems like a not bad idea.

Except that what the testers found was

while there was better performance, there

was plausible evidence that this private

API was simply scrubbing answers pulled

directly from an anthropics Claude model.

Oh, so that's not a good look.

After this Matt went dark, basically

hanging all his supporters out to dry.

Eventually he went on Twitter

apologizing, sort of saying that he

quote, got ahead of himself.

This, as I'm sure you

know, is also not a good look.

It turns out fake announcements of wild

success using repeatable tests of known

benchmarks against a product that other

people can download is a bad idea.

But Chris, he was in founder mode.

Move fast and break stuff.

We're done. Go away now. Bye.