One of the biggest downsides of coming to Silicon Valley is that you're eyes open to all of the opportunity space, to so much more of the opportunity space that exists in front of you across multiple different industries and sectors.
X is the closest thing to giving you that perspective too.
The real reason that this is the case (and I recently had a conversation with somebody who's an investor and looking at space companies) is basically that, over time, hardware gets commoditized. Once something is basically good enough, all of the competition forces margins towards zero. You end up with sustainable economics where you can have these things occurring but really it becomes the distribution channel for additional higher-margin services.
When you look at this TV example, they're really competitive against Samsung, LG, TCL, Hisense, Vizio, Roku, and many other things so those margins are down to low or single digits. In some cases some companies have even reported negative margins. You keep the sticker prices low to keep volume high and then the more durable higher-margin profits come from a platform layer that you can then monetize.
In the TV scenario for smart TVs, this is the automatic content recognition, or ACR, that is understanding what customers are doing and selling that data that's useful for ads and targeting. It's a similar type of experience even for the starter or the space community.
Take SpaceX for example. Even though they are the most competitive launch provider, the margins on that are particularly low relative to the rest of the business. That hardware in that ecosystem is going to commoditize for launch services and ultimately drive down to zero. That really means most of their higher-value margins will come from Starlink and all of the value that comes from having Starlink as the higher-margin growth machine. Again they're controlling the distribution of these platforms as the edge that SpaceX has and then using Starlink to drive higher-margin recurring service.
This similarly applies to the AI space, where now models are starting to commoditize. Now you have to think through: what are the additional edges that are in this superintelligence layer space? It'll probably be maybe some sort of proprietary data, vertical integration, or the application layer. What's the proprietary edge, whether that comes from data, domain knowledge, or some sort of tooling? Maybe there's a weird interesting compliance workthrough.
This intelligence will continue to get cheaper and cheaper over time so now the AI ecosystem will need to think through: what are the edges that they have around that?
If you've ever wondered why smart TVs are so cheap, this is why.
@log4j rooted his Samsung and found an always-on hot mic, automatic content recognition, geolocation, network mapping, ad targeting and user profiling, shared with Samsung's "400 partners".
A lot of it can be blocked in <15 min, wrote a basic guide below.
What your TV is doing
The main culprit is ACR (automatic content recognition). Your TV screenshots what's on screen, fingerprints it, and sends it home to build your ad profile. Samsung does it every 500ms, LG every 10ms [1].
What is insane: it happens on connected devices too.
Plug in your laptop, your console, your work machine, and your TV can fingerprint that via HDMI [1].
He also found that if your Samsung doesn't have a mic, it'll look for one from a connected soundbar or bluetooth device.
xitter.cf/log4j/status/211376224…
It's on by default, and you likely agreed to it on the setup screen you clicked through in 10 seconds.
Step 1: Turn off ACR
Samsung: Terms & Privacy → Viewing Information Services
LG: Live Plus
Vizio: Viewing Data
Roku: "Use info from TV inputs"
Sony/Google TV: Samba Interactive TV
Menus vary by model, but those are the names to look for. While you're in there, opt out of interest-based ads, reset your advertising ID, decline every optional privacy agreement, turn off voice recognition, and delete apps you never open.
Step 2: Give smart devices their own network
Put the TV, cameras, speakers and vacuum on your router's guest/IoT network. The logic is simple: these devices rarely get patched. If one gets compromised (getting drastically more frequent with AI), it shouldn't be able to see your other devices or home network.
Step 3: Block trackers for the whole house with DNS-level filtering
NextDNS (cloud-based) is easy and has a solid free plan. Pi-hole is a little bit more work if you prefer self hosting. For simplicity we'll focus on the former.
1. Sign up at nextdns.io (free tier is plenty)
2. Privacy tab: add a blocklist (OISD is a good bet) and turn on Native Tracking Protection for Samsung, LG, Roku, Amazon (see attached image)
3. Setup tab: copy your endpoint
4. Paste it into your router's DNS settings as DNS-over-HTTPS/TLS (or use the IPs + "Link IP" if your router only does plain DNS)
5. Bonus: block outbound port 53 except to your router. Some devices hardcode their own DNS to get around you
Then open the NextDNS logs and watch how often your TV phones home. It's eye-opening. If an app or update breaks, find the domain in the logs and allowlist it.
Why they do this
TV prices are down 97% since 2000 [2]. Most of that is better manufacturing and brutal competition. But once margins on the hardware hit zero, the cost moved to you.
In Q3 2024, Vizio lost $6.7M selling TVs and made $115.8M in gross profit from ads and viewing data [3]. They've said on earnings calls that they keep TV prices low to grow the audience they sell to advertisers. Walmart bought them in 2024.
This isn't a conspiracy theory either. Vizio paid $2.2M to the FTC in 2017 for tracking 11 million TVs without consent. Last December, Texas sued Samsung, LG, Sony, Hisense and TCL over ACR. Samsung and LG have since agreed to stop collecting that data without explicit consent [4].
TL;DR
1. ACR off
2. Ads + voice off
3. Smart devices on their own network
4. NextDNS filtering on the router
Sources:
[1] ACR study: arxiv.org/abs/2409.06203
[2] Cost of US consumer goods: aei.org/economics/chart-of-t…
[3] Vizio Q3 2024: sec.gov/Archives/edgar/data/…
[4] Texas v. Samsung: texasattorneygeneral.gov/new…
At @Alphaschool is the factory
Like Tesla building one car isn’t the real product, it’s about being able to replicate the factory
In this case the factory is the AI tech, the structure of the program, and the Guides.
All part of a dynamic and complex system, interdependent on eachother
Everyone wants to talk about the AI @Alphaschool, and it’s understandable, because the software is impressive and continuously improving…but my daughter went from hitting her learning goal 0 days a week to all 5 a week in a month, and the difference came from her guide. 🧵
Nick Co 😎 retweeted
the worst advice you can follow is to sell pickaxes during a gold rush
everyone is doing that
instead, try to sell wood and iron to the people making the pickaxes
better yet, grow trees to sell the wood to the wood sellers, and buy mountains to sell the iron
even better, invent the concept of wood and iron to sell to the tree growers and mountains
Nick Co 😎 retweeted
Everyone wants to talk about the AI @Alphaschool, and it’s understandable, because the software is impressive and continuously improving…but my daughter went from hitting her learning goal 0 days a week to all 5 a week in a month, and the difference came from her guide. 🧵
Executive leadership across all companies is being challenged and needs to adjust how you navigate orgs in a new superintelligence era
You can imagine that the same way that you were operating in the past era, as someone in the C-suite or in any other level, is not remotely the same way that you should be operating (in a world where you have proactive agents surrounding you nonstop and surrounding your employees nonstop, who are 100x more productive now or able to synthesize 100x more amounts of information and potentially even be more proactive than before)
Maybe in an older slowing organization, you can keep up the same things that you've done in the SaaS age but for organizations and companies leading in the AI space, you can't run the same playbook. It requires a different level of leadership, a different process for how to operate, and much more speed and intensity.
"Great nations do not remain great by being caretakers of history, but by continuously making history."
The same applies to people, families, companies, governments.
Apollo should never represent the upper limit of what @NASA can achieve. It should be a standard we continuously strive to exceed.
We’re bringing that intensity, discipline, and engineering ownership back to this agency. Great nations do not remain great by being caretakers of history, but by continuously making history.
This is one of the most magical uses of superintelligence that I've seen, bringing things to life that otherwise would have been static.
This in a child's hands would unlock such imagination and creativity.
Don't believe the doomers. America is rising.
We're bringing back manufacturing.
We're improving education systems.
We're bringing back long form.
We're democratizing intelligence.
We're diversifying beyond an information economy.
We're democratizing technological powers.
We all own our agendas and have agency to change things.
Don't believe the doomers. Don't fall for their traps. Continue to build. Continue to improve.
We will prove all of the doomers wrong.
An incredible world awaits us.
I just saw my cousin's lock screen. One of his friends' girlfriends just discovered, after doing a 23andMe, that she has 12 half-siblings and that her father is not her real father. Potentially, the IVF clinic screwed it all up
Talk about some life changing information for her
I'm feeling crazy smart by putting my jacket on the underside of the straps to your bag
Rather than looping it over the top of the bag or on my shoulders, looking like a doofus
People don’t realize this but America is the greatest product company ever
Insane releases since 1776
