The attempted supply chain attack against XZ Utils is raising troubling questions about the motivations of the suspected threat actor behind the incident as well as the overall security of the larger open source ecosystem.
A Microsoft engineer accidentally found obfuscated malicious code installed in the xz library, which could lead to a major supply chain compromise.
Security researchers and other industry experts are pointing to the suspicion that a longtime contributor is behind what is now considered a multiyear effort to establish themselves as an insider, leading up to the attempted supply chain attack.
XZ Utils, a data compression software utility found in most Linux distributions, has long been considered a widely trusted project, according to researchers.
“The most unique and unsettling aspect of this attack is the significant effort and investment made by the attacker in gradually establishing themselves over several years as a credible open-source contributor and carefully advancing their position until they gained trust and the opportunity to maintain and add malicious code into a widely used package,” Jonathan Sar Shalom, director of threat research at JFrog, said via email.
Researchers point to a Github account @JiaT75, which has since been suspended, as the suspected original source of the backdoor.
GitHub confirmed that it “suspended user accounts and removed the content” in keeping with its acceptable use policies, however after an investigation the account belonging to @Larhzu was reinstated.
What followed was a multiyear effort to gain trust within the community, while at the same time allegedly testing the waters by making subtle changes that failed to raise any immediate alarm bells.
“Now when we look back at the tale of the tape, what we see is Jia kind of surreptitiously inserted all these little changes over time,” Omkhar Arasaratnam, general manager at the Open Source Security Foundation, said in an interview. “None of them catastrophic, none of them very flashy. But you know, just to see if people were watching.”
Maintainers in focus
The open source community has seen previous cases of maintainers throwing tantrums or using the community as a platform to protest larger issues. But the patience and sophistication of this attack is raising questions for an increasing pool of experts about whether nation-state support is a factor.
“Our analysis suggests that the sophistication and operational security observed in this incident, including the strategic use of email addresses and IP addresses, point to a highly trained and sophisticated adversary,” said Brian Fox, co-founder and CTO of Sonatype, a supply chain management platform. “The lack of tangible evidence of the threat actor’s existence beyond their precise and limited engagements further distinguishes this from the actions of a rogue open source contributor.”
Users were urged to immediately stop using Fedora Rawhide instances for work or personal use and the Cybersecurity and Infrastructure Security Agency warned developers and users to downgrade to an uncompromised version.
Andres Freund, a principal software engineer at Microsoft, stumbled upon some anomalous activity last week and publicly disclosed the incident. Freund observed sshd processes using an unusual amount of CPU, however noted that the wrong usernames had been applied.
“Recalled that I had seen an odd valgrind complaint in automated testing of postgres, a few weeks earlier after package updates,” Freund said in a post on Mastodon.
Jake Williams, a faculty member at IANS Research, said the incident highlights the need for defense in depth, including the need to have properly staffed vulnerability intelligence teams and proper investments in tooling.
“Organizations with strict firewall rules preventing access to their SSH servers limited exploitation opportunities, even for vulnerable deployments,” Williams said via email. “Some [cloud security posture management systems] had scans for vulnerable instances released the same day this was detected.”
Decades after her dad’s iconic sports car time-traveled into movie history, Kat DeLorean wants to build a modern remake. There’s just one problem: Someone else owns the trademark on her name.
Video: Getty Images; Ángel Guerra
In the fall of 2020, bored and restless in Covid-restricted Spain, Ángel Guerra doodled a dream car. The automotive designer, then 38, wanted to make a tribute to his first four-wheeled love: the time-traveling DeLorean DMC-12 that rolled out of a cloud of steam in Back to the Future. The sketch that took shape on Guerra’s computer had all the iconic elements of the 1980s original—gull-wing doors, stainless-steel cladding, louver blades over the rear window, a rakish black side stripe—plus a few modern touches. Guerra smoothed out the folded-paper angles, widened the body, stretched the wheel arches to accommodate bigger rims and tires. After two weeks, he decided he liked this new DeLorean enough to stick it on Instagram.
The post blew up. Gearheads raved about the design. The music producer Swizz Beatz DM’d Guerra to ask how much it would cost to build. Guerra started to think that maybe his sketch should become a real car. He reached out to a Texas firm called DeLorean Motor Company, which years earlier had acquired the original DeLorean trademarks, but was gently rebuffed. The design seemed destined to live in cyberspace forever. Then, by some algorithmic magic, a different kind of DeLorean showed up on Guerra’s Instagram feed in the spring of 2022—a human DeLorean by the name of Kat. Her posts showcased her love for her puppy, hair dye, and above all her late father, John Z. DeLorean. Although the general public often remembers him as a high-flying CEO with fabulous hair and a surgically augmented chin who went down in a federal sting operation, Guerra chiefly thought of him as a brilliant engineer. He sent Kat a message with some kind words about her dad and a link to the design. Kat saw it and got stoked.
Kat DeLorean is a frequently stoked type of person. At the time, she had recently dyed her long hair in rainbow colors to, in her words, “create the rainbows in my heart on my head.” Yet for much of her life, her relationship to the DeLorean name had been an unhappy one. When people asked why she didn’t own a DMC-12, she would reply: “If there was an iconic representation of your entire life falling apart, would you park it in your driveway?” She would say, only half-jokingly, that the initials stood for “Destroy My Childhood.” A fortysomething cybersecurity professional, Kat lived in a ramshackle farmhouse in New Hampshire with her husband and a few kids. But when Guerra’s note arrived, she was undergoing a pandemic- and work-stress-induced reevaluation of her life’s purpose. She was dreaming up ways to reclaim her father’s legacy. She wanted to launch an engineering education program in his name.
One thing she insisted she didn’t want was to start a car company. It was a car company, after all, that had ruined her father. But then something happened that changed her mind. In April 2022, the Texas company that had given Guerra the cold shoulder announced it would soon reveal a new DeLorean. Kat kept her feelings about this to herself only briefly. First she drew attention to Guerra’s design, posting it on Instagram. (“A timeless classic given the treatment it deserves!”) Two days later, she made her feelings explicit: “@deloreanmotorcompany Is not John DeLorean’s Company,” she wrote. “He despised you.” Details about the new Texas DeLorean emerged a few days after that: Called the Alpha5, it would have four seats instead of two, would reportedly be built mostly from aluminum rather than stainless steel, and would be available in red. Like many DeLorean purists, Kat hated it.
As people kept messaging her about the pretty design they’d seen on her Instagram feed—some even offered to help build it—a new plan took shape. Kind of a crazy one. She started to think: Why not build one car and film the process of building it for the engineering students? Eventually that turned into: Why not make several and sell them to fund the engineering program? But then why not …
As Kat’s ideas tend to do, this one snowballed: an engineering program in every state, funded by cars; her mind could easily leap from there to notions of rebuilding the industrial Midwest and rejiggering American work culture in general, the ultimate realization of her oft-stated belief that “everyone should have the same opportunity to live their dream.” John DeLorean had plotted to return to the car market until the day he died. Now, she thought, shouldn’t she give the nerds what they wanted? Fine, she had zero experience running a car company, but she could find people for that, and anyway she’d spent, by her estimate, thousands of hours talking engine design with her dad. She described herself as having “gasoline in her veins.”
Which didn’t really change the fundamentals, including how difficult and outrageously expensive it is to bring a car to market, not to mention the itchy point that the “DeLorean” branding technically belonged to someone else. Never mind all that. Kat was a DeLorean—a name, for good or ill, associated with wild ambition.
John Z. DeLorean was a suave, swashbuckling General Motors executive who dated young models and palled around with celebrities. He became automotive royalty in the mid-1960s, when he had the idea of sticking a bigger engine into an “old lady” car, thereby reinventing the Pontiac brand and launching the “muscle car” era. But DeLorean felt stifled at GM, and he dreamed of building what he called an “ethical car”: safe, reliable, affordable, and environmentally friendly. He left the company in 1973, the same year he married the supermodel Cristina Ferrare, his third wife. Two years later, he founded the DeLorean Motor Company. And two years after that, DeLorean and Ferrare, who shared an adopted 6-year-old son named Zach, welcomed their baby daughter Kathryn.
The original DeLorean Motor Company’s brief and turbulent history spanned Kat’s early childhood. She has few direct memories of the time her dad spent assembling a team of mavericks and dreamers enticed by the idea of building a whole car company from a blank sheet of paper. With a generous investment from the British government, DeLorean opted to put his factory outside Belfast, Northern Ireland. This was during the Troubles, when the idea of Catholics and Protestants working side-by-side seemed impossible. But, for a time, it worked. “There was a bog, then there was a factory, then there were jobs,” William Haddad, an executive for the company, recalled in a 1985 interview. “It was really exciting as hell.”
It also happened to be an era of inflation and soaring gas prices. An inexperienced workforce and frequent bomb scares further complicated production. Timelines slipped, production costs ballooned, demand collapsed, debt accrued. The company had to recall a couple thousand cars. DeLorean’s original vision, described by one classic car aficionado as a $12,000 “Corvette killer” featuring “unprecedented safety and efficiency attributes,” morphed into a $25,000 vehicle with few of those qualities. Then, in October 1982, with little Kat approaching her fifth birthday, came the world-famous denouement: John DeLorean caught on tape with an FBI informant in a room with nearly 60 pounds of cocaine. The informant had pitched the sale of the drugs as a way to raise enough money to save DeLorean’s struggling company.
Kat was 6 when her dad’s high-profile trial ended in an acquittal in the late summer of 1984, on the grounds of entrapment. Her dad’s company and career were destroyed; as he ruefully asked reporters outside the courtroom: “I don’t know, would you buy a used car from me?” Also destroyed was a kind of childhood idyll for Kat, who went very suddenly from living in an intact, wealthy, and famous New York City family—complete with an apartment on Fifth Avenue worth $30 million in today’s dollars—to being a child of bicoastal divorce. Within the year, her mother was remarried to a television executive, and Kat was mostly living in California. She was allowed 10 minutes a day on the phone with her dad back East, which she extended by enlisting his help with math homework.
Back to the Future came out a year after John’s acquittal. Although a studio official had pushed the filmmakers to use a Mustang for their time machine—Ford was willing to pay handsomely for the product placement—the screenwriter reportedly replied, “Doc Brown doesn’t drive a fucking Mustang.” The selection of the DMC-12 for the honor (cue Marty McFly: “Are you telling me that you built a time machine out of a DeLorean?”) prompted John to write a thank-you letter to the director and screenwriter, who he said had “all but immortalized” his car. Unlike Guerra, Kat has no recollection of seeing Back to the Future for the first time. “It just felt like the movies were always there, always a part of my life,” she told me.
As a teenager, Kat was allowed to choose which parent to live with, and she picked her dad. She spent her high school years on a farm in Bedminster, New Jersey. (The exact site that would later become the Trump National Golf Club Bedminster.) She rode dirt bikes around the vast property, did musical theater in private school, and sometimes endured cocaine jokes from her peers. Her best friend at the time taught Kat how to fix her own computer and inspired her habit of tinkering with the machines.
She modeled for a few years after high school but stayed geeky, spending her nights on hacking competitions. Then, in her early twenties, pregnant with her first child from a brief first marriage, she decided she didn’t want to raise her son in the world she’d known as the daughter of a supermodel. (These days she refers to “that world” of fabulous wealth from an almost mystified remove, as if the visit on the Schwarzeneggers’ private jet and the pajama party with Kourtney Kardashian had happened to someone else.) Instead, she took an IT internship at Countrywide Financial—later to be acquired by Bank of America—and started working her way up. She met a systems engineer named Jason Seymour at a company Christmas party and married him a little more than a month later at a drive-thru wedding chapel in Las Vegas. (Jason had wanted an Elvis impersonator to officiate, but he wasn’t available.) The following year, in 2005, her father died. John DeLorean had spent some of his final months attempting to trademark the name “DeLorean Automobile Company” through a company called Ephesians 6:12, which he’d set up with Kat and Zach as co-owners. (The name is a reference to a biblical verse about struggling “against the rulers of the darkness of this world, against spiritual wickedness in high places.”) But he passed away before application could be approved, so it was officially listed as “abandoned.”
John’s death devastated Kat. Although she remained fiercely proud of her father and kept attending car shows in her capacity as a DeLorean, she went professionally by her married name, Seymour, and maintained a separation between those two identities. But in the 2020s, as the DMC-12’s 40th anniversary approached, John’s name was popping up in documentaries and movies again, and Kat was not happy with some of the portrayals depicting him as a kind of narcissistic hustler. She became determined to get the positive story of John DeLorean out.
As a big “trust the universe” person, she believed it was meaningful that an actual angel (Guerra) had shown up in her life with a design. So through the summer and fall of 2022, Kat’s ambitions took the shape of a car. The model would be called JZD, her dad’s initials, and the company would pour the sales revenue into more education programs—expanding into underserved areas in the industrial Midwest where her dad made his career. She resisted even calling the venture a “car company”; she much preferred to say it was a “dream-empowerment company fueled by automobiles,” in the same way Girl Scouts is a youth-empowerment organization fueled in part by cookies.
Whatever the company was, the New Hampshire farmhouse turned into its de facto headquarters. Kat and Jason took video meetings, recruited talent, and entertained wild ideas about what a new car “with DeLorean DNA” could do. (She joked: “Leave it to me to start a car company right when nepo babies are a thing.”) Could they source sustainable stainless steel for their first car by melting down old appliances? Could they use recycled computer chips to control it? Could they make virtual-reality manufacturing labs for their students, to assemble first a virtual car and then a real one? This was going to be a brand-new kind of car company—among the first ever founded by a woman and likely the first intended to be a not-for-profit.
With these big visions came big promises. In August 2022, Kat posted a screenshot from John’s final automotive business plan, which promised to “shake the automotive world” with a car that would kick off “an affair with man and machine at a price point that will be affordable.” She expressed an intent to follow these wishes with her own car company. The company’s name: DeLorean Next Generation.
The news spread, first with an item on Fox News and then in outlets all over the world. Jason was so high on enthusiasm for the new company, and pride in his wife’s ambition, that he dashed off a public promise on the DNG Motors Instagram account. “UNVEILED SEPTEMBER 13, 2023,” read an image of white text on a black background, with Jason’s caption: “DeLorean is back in the Motor City.” He’d just committed them to building a car for the Detroit Auto Show. When Kat saw the post, she flipped out.
Soon afterward, the DeLorean Motor Company in Texas sent Kat a cease-and-desist, demanding she stop using the DeLorean name for her planned car. She and Jason had their lawyer send a reply asserting their rights and expressing their willingness to litigate, and kept going.
DeLorean Motor Company sits in a squat building off a tangle of highways in suburban Houston—you drive past some shabby lots and fields, and then the 1980s spring up around a curve in the road, where a retro-looking DMC logo looms over a row of DMC-12s in the parking lot. You might even spot a JIGAWAT license plate there. Inside the garage/warehouse is an array of disembodied gull-wing doors that evoke a flock of injured birds. Old covers of Deloreans magazines stare out from frames in the showroom.
This is the realm of Stephen Wynne, a Liverpool-born mechanic who has devoted his life to DeLorean the car—to the point of driving his son Cameron to kindergarten in DMC-12s that appeared in Back to the Future. Wynne is less impressed with DeLorean the man, however. “I have more respect for the team that he put together,” he says. “All you hear about is John DeLorean and not the team, and that, to me, is not right.” John was, Wynne said, ahead of his time as an engineer. But: “He made the company, and he also, you know, killed the company in the end.”
It was Wynne who picked up the pieces, effectively securing a monopoly on the small, strange market for DeLorean parts. This was not a decision about preserving someone else’s legacy; it was about securing his own future. “It felt to me like, to control my destiny, going forward, it was to have control of the parts,” he told me in the shop as tools clanked against cars behind us. “If someone was going to get it, I wanted it to be me.” He founded the new DeLorean Motor Company in 1995.
Wynne considers the original buyers of the 1980s DeLorean to have been “entrepreneurial, outside-of-the-box-thinking type people,” with something a “little bit different about them”—less interested in owning a really fast sports car than a piece of cultural history. (The original DeLorean did 0 to 60 in about 10.5 seconds, something my used Hyundai can easily beat.) “We believe that there’s much more wealth in that market these days,” Wynne says.
Over the years, Wynne and team made various plans to serve this market of “modern nerds” with new cars built mostly from original parts. But federal regulators were slow to relax the rules that said these historic replicas had to meet current safety standards, so the revival of the DMC-12—with its lack of airbags, a third brake light, and antilock brakes, for instance—never happened. Still, the company did a thriving business in parts sales and car service. It also made a good buck from the DeLorean brand, which it alternately licensed for apparel, video games, and the like, or zealously protected via cease-and-desists and lawsuits.
Finally, Wynne got to talking with a Tesla alum named Joost de Vries, who’d been involved in previous efforts to electrify the DeLorean. The DeLorean brand, de Vries argued, was so universally beloved, and startup costs for electric vehicles were so much less than even 15 years earlier, that they could partner up to build a brand-new electric DeLorean. Together they formed a San Antonio–based spinoff of DeLorean Motor Company, called DeLorean Motors Reimagined, with the Wynne family as the largest shareholders and de Vries as CEO. (Wynne’s son, the former time-traveling kindergartner, is now the companies’ chief brand officer.) De Vries would lead the development of the car, and funding would come largely from private investors. The company incorporated in Texas in November 2021 (smack in between when Guerra posted his design in late 2020 and when Kat got involved in mid-2022). Wynne and de Vries hired Italdesign, the same firm that had drafted the original DMC-12, to design the Alpha5.
DeLorean Motors Reimagined hoped to build 88 cars to start (88 mph being the speed at which Doc Brown’s DeLorean traveled through time), then about 9,500. The car would be “low volume, high-end, very exclusive, weird, wild technology,” according to de Vries, an imposing, bald Dutchman with the hard-charging swagger of the Silicon Valley executive he once was. “DeLorean was always attainable luxury. My price tag is not going to be attainable luxury.”
DeLorean Motors Reimagined went from founding to concept car within nine months. The company even bought a 15-second Super Bowl spot in February 2022, cryptically teasing the new car and setting off buzz in the automotive press. The Alpha5 premiered at the Pebble Beach auto show that August. It was only a concept, meant to show off design and technology, not a finished product that could operate on the road. But it was a real object that existed in the real world and was promised to be on sale to the public in 2024.
By that point, the JZD, Kat’s model, was still in the design phase, living for the most part in computers.
The steps to getting a new car from invention to production are standard, whether you’re General Motors, DeLorean Motors Reimagined, or DeLorean Next Generation. On average, the process takes about five years. You have to design and engineer the car; find suppliers for thousands of parts, from wheels to seats to instrument panels; get tools custom-made to stamp out your body panels; and find or build the facility and the workforce to put these things together. This is all before you can actually mass-produce something that resembles the original design.
So it is not at all unusual for a concept car to appear at an auto show and then for nothing resembling it to ever materialize on actual roads. A paint facility alone can set a company back hundreds of millions of dollars. This is in fact why the original DeLorean was stainless steel: John DeLorean couldn’t afford a paint plant. (His marketing genius, Kat says, was that “he made you all think it was intentional.”) John Z. DeLorean had his first prototype by 1976, within about a year of founding his company; the first DMC-12s went on sale in 1981.
Theoretically, then, it was possible to build a one-off JZD concept car—if not a production-ready prototype—in the 11 months Kat and Jason had between founding the company and the 2023 Detroit Auto Show. Kat projected confidence onstage at a Miami auto show in January 2023, while a digital rendering of the JZD zoomed along mountain roads on a screen behind her. But shortly after that appearance, she started getting stressed out about the timeline. Potential manufacturing partners were telling her it was wildly unrealistic. Even getting the doors to open and close the same way every time was its own feat of engineering, and Kat couldn’t tell them whether the car would run on gas, batteries, or both. (She wanted students to make that decision as part of an engineering challenge she had yet to set up.) Kat began to have visions of living the same arc of ambition and collapse that befell her father.
This was her preoccupation when she showed up on a warm March 2023 morning in Augusta, Georgia, as a special guest at a “DeLorean Day” event. Well before 8 am, she was stalking around the parking lot in a rainbow plaid skirt and a NERD (Northeast Region DeLorean Club) hoodie with Jason in tow, enthusing to fans about their cars, talking not just with her hands but sometimes with her feet. She literally jumped up and down after a green ’66 Pontiac GTO Tri-Power pulled onto the lot. She inspected the carburetors under the hood and declared that this model, in midnight blue, was her “ultimate dream car,” shout-laughing when the owner confessed to the absurd gas mileage—about 8 miles per gallon in the city—then apologizing, through laughter, for laughing.
By 8 am she was posted up behind a mic to discuss her father and her own plans. “My father was my best friend in the whole world,” she said. “In the summers, I sat and played gin rummy with him on the couch, to the point where there was a worn spot in each place where we sat—a big one and a little one.” She got teary-eyed during the Q&A period when a kid of maybe 10 told her of his plans to be a robotics engineer. He hoped, he said, to make cars that could turn into robots that could “help people and protect humans from like, anything bad that can happen.” She would later tell me that this moment and others like it in Augusta added up to a turning point for her—that “all of a sudden it was like, OK, whatever I have to do, whatever pain I have to go through, if it means building a car company, then I’m going to do it, because I want that moment every day for the rest of my life.”
And when a well-meaning questioner brought up the Alpha5, she spoke carefully through a tight smile. “That is being made by the company DeLorean Motor Company Texas, and they’re not affiliated at all with the family or the original car. And I think that’s about all I’m going to say about that one.”
When I asked Joost de Vries about Kat DeLorean’s efforts a few weeks later, he was less diplomatic. “There’s just something loose in her head,” he said. “Kat’s thing is illegal. And she’s being shut down.” He said in a later conversation that she would be “hammered with lawsuits” as soon as her car appeared at the Detroit Auto Show.
De Vries and I were in a bland tech office park in San Antonio, where he sat in his glass-walled office. He was well aware that the Alpha5 design was polarizing in the DeLorean community. (Some DeLorean forum users had groused that the model just looked like another Tesla with gull-wing doors; one called the whole effort “little more than slapping the name of a beloved car on an unrelated vehicle.”) He also knew the discouraging fate that had befallen many an EV brand before his. Other high-end EV companies such as Lucid, Rivian, and the failed-then-resurrected Fisker had burned through billions and missed production targets, and even market leader Tesla was then struggling to bring its hyped (stainless-steel) Cybertruck to market. DeLorean Motors Reimagined had hit supply-chain snags and cut its planned production run by more than half, to 4,000 cars. But de Vries had something most EV companies didn’t: a brand that much of the world already knew. “The only thing I need to do is put good product into an existing brand,” he said.
The question, of course, is whose brand “DeLorean” really is. Both companies insist on their own rights to use it. And each calls the other’s claim transparently illegitimate.
Stephen Wynne registered and enforced trademarks on “DeLorean” and “DeLorean Motor Company” in the 2000s, as John’s trademarks were canceled or abandoned, and he has renewed and protected them ever since. Furthermore, in a 2015 settlement with John DeLorean’s estate, a woman named Sally Baldwin DeLorean, acting as John’s widow, acknowledged “the worldwide rights of DMC to use, register, and enforce any of the DeLorean Marks for any and all goods and services” related to cars, clothes, and “promotional items”—for which DMC paid her an undisclosed sum. So, yes, it is Kat’s name. But it’s someone else’s trademark, and it’s one she has never tried publicly to contest until now.
Kat’s argument includes that seemingly simple but possibly irrelevant part—it’s her name—but also a convoluted part. She doesn’t believe John actually ever married Sally. Nor do several people I spoke to from John’s orbit at the time, including his son, Zach, none of whom can recall John mentioning a marriage to her. Kat told me she searched for and never found a marriage certificate. Nor did a private detective she hired. (Sally Baldwin DeLorean’s lawyer did not return requests for comment, and attempts to reach her directly via listed phone numbers were unsuccessful.) John’s will names his son as executor. Zach, balking at the prospect of attorney’s fees, never actually filed the will. Kat contends that Sally’s settlement with the DeLorean Motor Company is illegitimate, as she was never in a position to act on behalf of the estate in the first place. What should have happened, Kat thinks, is for the US Patent and Trademark Office to reach out to her and Zach, as co-owners of Ephesians 6:12, about her dad’s pending application.
Then there is the question of infringement, a key standard for which is “likelihood of causing confusion.” Kat’s DeLorean Next Generation is not using the exact same set of words as Wynne’s DeLorean Motor Company, but it is fair to say, based on the Alpha5 question that Kat got in Augusta—and on a well-meaning Reddit commenter who’d tried to buy Kat’s car only to accidentally reserve an Alpha5—that some members of the public are indeed confused. Yet each side accuses the other of doing the confusing.
Both sides have told me a lawsuit is inevitable. No jury decision is guaranteed—determining “likelihood of confusion” itself involves a (confusing!) 13-factor test. But New Jersey trademark attorney Richard Catalina, who is not affiliated with either party, told me that the “stronger legal arguments” belong to the Texas company. “Trademark rights only accrue with use. If you’re not using the mark, you can lose your rights to it,” Catalina said.
“I just learned the. Craziest. Thing,” Kat told me on the phone last summer. She’d recently come across the 1985 interview with William Haddad, the executive who’d found it “exciting as hell” how much good DeLorean Motor Company had achieved in Northern Ireland. Haddad had been crushed by the company’s collapse, and now, in 1985, called it a “scam” and John himself a thief. (John had always denied this and was never convicted of financial misdeeds.) But Haddad was wistful about John’s squandered ambition to locate factories where they could do the most social good. “If only he had done it … Can you imagine it?” Haddad mused in the interview.
Kat knew the Northern Ireland story well already, but Haddad had put John’s goal and his downfall in terms that suddenly clicked for her. She and Jason had been so caught up in the crazy timeline they’d set for themselves that they were risking following precisely her dad’s path—letting one car distract them from their bigger goal of supporting young engineers. “If my car company fails, that’s OK,” Kat said. Her goal had always been to create an education program for students who have “dreams that have been robbed from them,” she said. “And if I can’t do that with this car, then it’s not worth the car.”
One thing was obvious: They were moving too fast. Kat decided she would not unveil the prototype of the JZD until her father’s 100th birthday, in 2025. In the meantime, they would have students build a clay model for Detroit—not a full-size one, as automakers typically do during development, but one about the size of a shoebox—and debut it not at the Auto Show but concurrently at the Detroit Historical Society. Later on, they’d enlist students to help build a prototype of their Model JZD on top of a Corvette C8 platform, picking participants through an online contest in which students described their dreams. After that would come a separate line of cars under something called Project 42, involving a hand build of 42 customized cars. These would have a sales price of probably over a million dollars each (which would also include driving outfits and a motorcycle to go with each car). They’d use the proceeds to fund the education program. So if the Alpha5 was going to be “unattainable luxury” and its likely market rich tech bros, then these custom cars would be yet less attainable and probably serve a market of billionaires.
It’s been two years since DMC Texas and Kat DeLorean both announced their new car projects. Neither has sued the other yet, and both are cagey about plans to do so. Joost de Vries stepped down from the helm of DeLorean Motors Reimagined last October, for reasons the company won’t disclose. A lawsuit against de Vries and other DeLorean Motors Reimagined executives, in which de Vries’ former employer Karma Automotive accused him and others of stealing the EV maker’s intellectual property, was dismissed after a reported out-of-court settlement. Timelines have slipped enough now that Cameron Wynne won’t specify exactly when the Alpha5 will be on sale—he says sometime in 2025. For Kat’s venture, meanwhile, Ángel Guerra continues to revise the design. The car will not be stainless.
DeLorean fans have been burned many times by promises of the next car, and given the delays in both projects, skepticism about both potential new ones pervades DeLorean-related internet forums. (Indeed, as this story went to press in April, a San Antonio paper reported that DeLorean Reimagined had shut down its headquarters; a DMC executive told me the company was just moving locations.) Both companies continue to promise big things. Promises, after all, are part of the DeLorean legacy too.
Arati Prabhakar has the ear of the US president and a massive mission: help manage AI, revive the semiconductor industry, and pull off a cancer moonshot.
one day in March 2023, Arati Prabhakar brought a laptop into the Oval Office and showed the future to Joe Biden. Six months later, the president issued a sweeping executive order that set a regulatory course for AI.
This all happened because ChatGPT had stunned the world. In an instant it became very, very obvious that the United States needed to speed up its efforts to regulate the AI industry—and adopt policies to take advantage of it. While the potential benefits were unlimited (Social Security customer service that works!), so were the potential downsides, like floods of disinformation or even, in the view of some, human extinction. Someone had to demonstrate that to the president.
The job fell to Prabhakar, because she is the director of the White House Office of Science and Technology Policy and holds cabinet status as the president’s chief science and technology adviser; she’d already been methodically educating top officials about the transformative power of AI. But she also has the experience and bureaucratic savvy to make an impact with the most powerful person in the world.
Born in India and raised in Texas, Prabhakar has a PhD in applied physics from Caltech and previously ran two US agencies: the National Institute of Standards and Technology and the Department of Defense’s Advanced Research Projects Agency. She also spent 15 years in Silicon Valley as a venture capitalist, including as president of Interval Research, Paul Allen’s legendary tech incubator, and has served as vice president or chief technology officer at several companies.
Prabhakar assumed her current job in October 2022—just in time to have AI dominate the agenda—and helped to push out that 20,000-word executive order, which mandates safety standards, boosts innovation, promotes AI in government and education, and even tries to mitigate job losses. She replaced biologist Eric Lander, who had resigned after an investigation concluded that he ran a toxic workplace. Prabhakar is the first person of color and first woman to be appointed director of the office.
We spoke at the kitchen table of Prabhakar’s Silicon Valley condo—a simply decorated space that, if my recollection is correct, is very unlike the OSTP offices in the ghostly, intimidating Eisenhower Executive Office Building in DC. Happily, the California vibes prevailed, and our conversation felt very unintimidating—even at ease. We talked about how Bruce Springsteen figured into Biden’s first ChatGPT demo, her hopes for a semiconductor renaissance in the US, and why Biden’s war on cancer is different from every other president’s war on cancer. I also asked her about the status of the unfilled role of chief technology officer for the nation—a single person, ideally kind of geeky, whose entire job revolves around the technology issues driving the 21st century.
Steven Levy: Why did you sign up for this job?
Arati Prabhakar: Because President Biden asked. He sees science and technology as enabling us to do big things, which is exactly how I think about their purpose.
What kinds of big things?
The mission of OSTP is to advance the entire science and technology ecosystem. We have a system that follows a set of priorities. We spend an enormous amount on R&D in health. But both public and corporate funding are largely focused on pharmaceuticals and medical devices, and very little on prevention or clinical care practices—the things that could change health as opposed to dealing with disease. We also have to meet the climate crisis. For technologies like clean energy, we don’t do a great job of getting things out of research and turning them into impact for Americans. It’s the unfinished business of this country.
It’s almost predestined that you’d be in this job. As soon as you got your physics degree at Caltech, you went to DC and got enmeshed in policy.
Yeah, I left the track I was supposed to be on. My family came here from India when I was 3, and I was raised in a household where my mom started sentences with, “When you get your PhD and become an academic …” It wasn’t a joke. Caltech, especially when I finished my degree in 1984, was extremely ivory tower, a place of worship for science. I learned a tremendous amount, but I also learned that my joy did not come from being in a lab at 2 in the morning and having that eureka moment. Just on a lark, I came to Washington for, quote-unquote, one year on a congressional fellowship. The big change was in 1986, when I went to Darpa as a young program manager. The mission of the organization was to use science and technology to change the arc of the future. I had found my home.
How did you wind up at Darpa?
I had written a study on microelectronics R&D. We were just starting to figure out that the semiconductor industry wasn’t always going to be dominated by the US. We worked on a bunch of stuff that didn’t pan out but also laid the groundwork for things that did. I was there for seven years, left for 19, and came back as director. Two decades later the portfolio was quite different, as it should be. I got to christen the first self-driving ship that could leave a port and navigate across open oceans without a single sailor on board. The other classic Darpa thing is to figure out what might be the foundation for new capabilities. I ended up starting a Biological Technologies Office. One of the many things that came out of that was the rapid development and distribution of mRNA vaccines, which never would have happened without the Darpa investment.
One difference today is that tech giants are doing a lot of their own R&D, though not necessarily for the big leaps Darpa was built for.
Every developed economy has this pattern. First there’s public investment in R&D. That’s part of how you germinate new industries and boost your economy. As those industries grow, so does their investment in R&D, and that ends up being dominant. There was a time when it was sort of 50-50 public-private. Now it’s much more private investment. For Darpa, of course, the mission is breakthrough technologies and capabilities for national security.
Are you worried about that shift?
It’s not a competition! Absolutely there’s been a huge shift. That private tech companies are building the leading edge LLMs today has huge implications. It’s a tremendous American advantage, but it has implications for how the technology is developed and used. We have to make sure we get what we need for public purposes.
Is the US government investing enough to make that happen?
I don’t think we are. We need to increase the funding. One component of the AI executive order is a National AI Research Resource. Researchers don’t have the access to data and computation that companies have. An initiative that Congress is considering, that the administration is very supportive of, would place something like $3 billion of resources with the National Science Foundation.
That’s a tiny percentage of the funds going into a company like OpenAI.
It costs a lot to build these leading-edge models. The question is, how do we have governance of advanced AI and how do we make sure we can use it for public purposes? The government has got to do more. We need help from Congress. But we also have to chart a different kind of relationship with industry than we’ve had in the past.
What might that look like?
Look at semiconductor manufacturing and the CHIPS Act.
We’ll get to that later. First let’s talk about the president. How deep is his understanding of things like AI?
Some of the most fun I’ve gotten on the job was working with the president and helping him understand where the technology is, like when we got to do the chatbot demonstrations for the president in the Oval Office.
What was that like?
Using a laptop with ChatGPT, we picked a topic that was of particular interest. The president had just been at a ceremony where he gave Bruce Springsteen the National Medal of Arts. He had joked about how Springsteen was from New Jersey, just across the river from his state, Delaware, and then he made reference to a lawsuit between those two states. I had never heard of it. We thought it would be fun to make use of this legal case. For the first prompt, we asked ChatGPT to explain the case to a first grader. Immediately these words start coming out like, “OK, kiddo, let me tell you, if you had a fight with someone …” Then we asked the bot to write a legal brief for a Supreme Court case. And out comes this very formal legal analysis. Then we wrote a song in the style of Bruce Springsteen about the case. We also did image demonstrations. We generated one of his dog Commander sitting behind the Resolute desk in the Oval Office.
So what was the president’s reaction?
He was like, “Wow, I can’t believe it could do that.” It wasn’t the first time he was aware of AI, but it gave him direct experience. It allowed us to dive into what was really going on. It seems like a crazy magical thing, but you need to get under the hood and understand that these models are computer systems that people train on data and then use to make startlingly good statistical predictions.
There are a ton of issues covered in the executive order. Which are the ones that you sense engaged the president most after he saw the demo?
The main thing that changed in that period was his sense of urgency. The task that he put out for all of us was to manage the risks so that we can see the benefits. We deliberately took the approach of dealing with a broad set of categories. That’s why you saw an extremely broad, bulky, large executive order. The risks to the integrity of information from deception and fraud, risks to safety and security, risks to civil rights and civil liberties, discrimination and privacy issues, and then risks to workers and the economy and IP—they’re all going to manifest in different ways for different people over different timelines. Sometimes we have laws that already address those risks—turns out it’s illegal to commit fraud! But other things, like the IP questions, don’t have clean answers.
There are a lot of provisions in the order that must meet set deadlines. How are you doing on those?
They are being met. We just rolled out all the 90-day milestones that were met. One part of the order I’m really getting a kick out of is the AI Council, which includes cabinet secretaries and heads of various regulatory agencies. When they come together, it’s not like most senior meetings where all the work has been done. These are meetings with rich discussion, where people engage with enthusiasm, because they know that we’ve got to get AI right.
There’s a fear that the technology will be concentrated among a few big companies. Microsoft essentially subsumed one leading startup, Inflection. Are you concerned about this centralization?
Competition is absolutely part of this discussion. The executive order talks specifically about that. One of the many dimensions of this issue is the extent to which power will reside only with those who are able to build these massive models.
The order calls for AI technology to embody equity and not include biases. A lot of people in DC are devoted to fighting diversity mandates. Others are uncomfortable with the government determining what constitutes bias. How does the government legally and morally put its finger on the scale?
Here’s what we’re doing. The president signed the executive order at the end of October. A couple of days later, the Office of Management and Budget came out with a memo—a draft of guidance about how all of government will use AI. Now we’re in the deep, wonky part, but this is where the rubber meets the road. It’s that guidance that will build in processes to make sure that when the government uses AI tools it’s not embedding bias.
That’s the strategy? You won’t mandate rules for the private sector but will impose them on the government, and because the government is such a big customer, companies will adopt them for everyone?
That can be helpful for setting a way that things work broadly. But there are also laws and regulations in place that ban discrimination in employment and lending decisions. So you can feel free to use AI, but it doesn’t get you off the hook.
There’s a line in there that basically says that if you’re slowing down the progress of AI, you are the equivalent of a murderer, because going forward without restraints will save lives.
That’s such an oversimplified view of the world. All of human history tells us that powerful technologies get used for good and for ill. The reason I love what I’ve gotten to do across four or five decades now is because I see over and over again that after a lot of work we end up making forward progress. That doesn’t happen automatically because of some cool new technology. It happens because of a lot of very human choices about how we use it, how we don’t use it, how we make sure people have access to it, and how we manage the downsides.
“I’m trying to figure out if you’re going to write a bunch of nice research papers, or you’re gonna move the needle on cancer.”
How are you encouraging the use of AI in government?
Right now AI is being used in government in more modest ways. Veterans Affairs is using it to get feedback from veterans to improve their services. The Social Security Administration is using it to accelerate the processing of disability claims.
Those are older programs. What’s next? Government bureaucrats spend a lot of time drafting documents. Will AI be part of that process?
That’s one place where you can see generative AI being used. Like in a corporation, we have to sort out how to use it responsibly, to make sure that sensitive data aren’t being leaked, and also that it’s not embedding bias. One of the things I’m really excited about in the executive order is an AI talent surge, saying to people who are experts in AI, “If you want to move the world, this is a great time to bring your skills to the government.” We published that on AI.gov.
How far along are you in that process?
We’re in the matchmaking process. We have great people coming in.
OK, let’s turn to the CHIPS Act, which is the Biden administration’s centerpiece for reviving the semiconductor industry in the US. The legislation provides more than $50 billion to grow the US-based chip industry, but it was designed to spur even more private investment, right?
That story starts decades ago with US dominance in semiconductor manufacturing. Over a few decades the industry got globalized, then it got very dangerously concentrated in one geopolitically fragile part of the world. A year and a half ago the president got Congress to act on a bipartisan basis, and we are crafting a completely different way to work with the semiconductor industry in the US.
Different in what sense?
It won’t work if the government goes off and builds its own fabs. So our partnership is one where companies decide what products are the right ones to build and where we will build them, and government incentives come on the basis of that. It’s the first time the US has done that with this industry, but it’s how it was done elsewhere around the world.
Some people say it’s a fantasy to think we can return to the day when the US had a significant share of chip and electronics manufacturing. Obviously, you feel differently.
We’re not trying to turn the clock back to the 1980s and saying, “Bring everything to the US.” Our strategy is to make sure that we have the robustness we need for the US and to make sure we’re meeting our national security needs.
The biggest grant recipient was Intel, which got $8 billion. Its CEO, Pat Gelsinger, said that the CHIPS Act wasn’t enough to make the US competitive, and we’d need a CHIPS 2. Is he right?
I don’t think anyone knows the answer yet. There’s so many factors. The job right now is to build the fabs.
As the former head of Darpa, you were part of the military establishment. How do you view the sentiment among employees of some companies, like Google, that they should not take on military contracts?
It’s great for people in companies to be asking hard questions about how their work is used. I respect that. My personal view is that our national security is essential for all of us. Here in Silicon Valley, we completely take for granted that you get up every morning and try to build and fund businesses. That doesn’t happen by accident. It’s shaped by the work that we do in national security.
Your office is spearheading what the president calls a Cancer Moonshot. It seems every president in my lifetime had some project to cure cancer. I remember President Nixon talking about a war on cancer. Why should we believe this one?
We’ve made real progress. The president and the first lady set two goals. One is to cut the age-adjusted cancer death rate in half over 25 years. The other is to change the experience of people going through cancer. We’ve come to understand that cancer is a very complex disease with many different aspects. American health outcomes are not acceptable for the most wealthy country in the world. When I spoke to Danielle Carnival, who leads the Cancer Moonshot for us—she worked for the vice president in the Obama administration—I said to her, “I’m trying to figure out if you’re going to write a bunch of nice research papers or you’re gonna move the needle on cancer.” She talked about new therapies but also critically important work to expand access to early screening, because if you catch some of them early, it changes the whole story. When I heard that I said, “Good, we’re actually going to move the needle.”
Don’t you think there’s a hostility to science in much of the population?
People are more skeptical about everything. I do think that there has been a shift that is specific to some hot-button issues, like climate and vaccines or other infectious disease measures. Scientists want to explain more, but they should be humble. I don’t think it’s very effective to treat science as a religion. In year two of the pandemic, people kept saying that the guidance keeps changing, and all I could think was, “Of course the guidance is changing, our understanding is changing.” The moment called for a little humility from the research community rather than saying, “We’re the know-it-alls.”
Is it awkward to be in charge of science policy at a time when many people don’t believe in empiricism?
I don’t think it’s as extreme as that. People have always made choices not just based on hard facts but also on the factors in their lives and the network of thought that they are enmeshed in. We have to accept that people are complex.
Part of your job is to hire and oversee the nation’s chief technology officer. But we don’t have one. Why not?
That had already been a long endeavor when I came on board. That’s been a huge challenge. It’s very difficult to recruit, because those working in tech almost always have financial entanglements.
I find it hard to believe that in a country full of great talent there isn’t someone qualified for that job who doesn’t own stock or can’t get rid of their holdings. Is this just a low priority for you?
We spent a lot of time working on that and haven’t succeeded.
Are we going to go through the whole term without a CTO?
I have no predictions. I’ve got nothing more than that.
There are only a few months left in the current term of this administration. President Biden has given your role cabinet status. Have science and technology found their appropriate influence in government?
Yes, I see it very clearly. Look at some of the biggest changes—for example, the first really meaningful advances on climate, deploying solutions at a scale that the climate actually notices. I see these changes in every area and I’m delighted.
Microsoft’s Recall technology, an AI tool designed to assist users by automatically reminding them of important information and tasks, bears resemblance to George Orwell’s „1984“ dystopia in several key aspects:
1. Surveillance and Data Collection: – 1984: The Party constantly monitors citizens through telescreens and other surveillance methods, ensuring that every action, word, and even thought aligns with the Party’s ideology. – Recall Technology: While intended for productivity, Recall collects and analyzes large amounts of personal data, emails, and other communications to provide reminders. This level of data collection can raise concerns about privacy and the potential for misuse or unauthorized access to personal information.
2. Memory and Thought Control: – 1984: The Party manipulates historical records and uses propaganda to control citizens‘ memories and perceptions of reality, essentially rewriting history to fit its narrative. – Recall Technology: By determining what information is deemed important and what reminders to provide, Recall could influence users‘ focus and priorities. This selective emphasis on certain data could subtly shape users‘ perceptions and decisions, akin to a form of soft memory control.
3. Dependence on Technology:
– 1984: The populace is heavily reliant on the Party’s technology for information, entertainment, and even personal relationships, which are monitored and controlled by the state. – Recall Technology: Users might become increasingly dependent on Recall to manage their schedules and information, potentially diminishing their own capacity to remember and prioritize tasks independently. This dependence can create a vulnerability where the technology has significant control over daily life.
4. Loss of Personal Autonomy:
– 1984: Individual autonomy is obliterated as the Party dictates all aspects of life, from public behavior to private thoughts. – Recall Technology: Although not as extreme, the automation and AI-driven suggestions in Recall could erode personal decision-making over time. As users rely more on technology to dictate their actions and reminders, their sense of personal control and autonomy may diminish.
5. Potential for Abuse:
– 1984: The totalitarian regime abuses its power to maintain control over the population, using technology as a tool of oppression. – Recall Technology: In a worst-case scenario, the data collected by Recall could be exploited by malicious actors or for unethical purposes. If misused by corporations or governments, it could lead to scenarios where users‘ personal information is leveraged against them, echoing the coercive control seen in Orwell’s dystopia.
While Microsoft’s Recall technology is designed with productivity in mind, its potential implications for privacy, autonomy, and the influence over personal information draw unsettling parallels to the controlled and monitored society depicted in „1984.“
Natural Language Interaction:GPT-4o’s advanced natural language processing capabilities allow for seamless, conversational interaction between the driver and the vehicle. This makes controlling the vehicle and accessing information more intuitive and user-friendly.
Personalized Experience:The AI can learn from individual driver behaviors and preferences, offering tailored suggestions for routes, entertainment, climate settings, and more, enhancing overall user satisfaction and engagement.
Enhanced Autonomous Driving and Safety:
Superior Decision-Making:GPT-4o can significantly enhance Tesla’s autonomous driving capabilities by processing and analyzing vast amounts of real-time data to make better driving decisions. This improves the safety, reliability, and efficiency of the vehicle’s self-driving features.
Proactive Safety Features:The AI can provide real-time monitoring of the vehicle’s surroundings and driver behavior, offering proactive alerts and interventions to prevent accidents and ensure passenger safety.
Next-Level Infotainment and Connectivity:
Smart Infotainment System: With GPT-4o, the SUV’s infotainment system can offer highly intelligent and personalized content recommendations, including music, podcasts, audiobooks, and more, making long journeys more enjoyable.
Seamless Connectivity:The AI can integrate with a wide range of apps and services, enabling drivers to manage their schedules, communicate, and access information without distraction, thus enhancing productivity and convenience.
Continuous Improvement and Future-Proofing:
Self-Learning Capabilities:GPT-4o continuously learns and adapts from user interactions and external data, ensuring that the vehicle’s performance and features improve over time. This results in an ever-evolving user experience that keeps getting better.
Over-the-Air Updates: Regular over-the-air updates from OpenAI ensure that the SUV remains at the forefront of technology, with the latest features, security enhancements, and improvements being seamlessly integrated.
Market Differentiation and Brand Leadership:
Innovative Edge:Integrating GPT-4o positions Tesla’s new SUV as a cutting-edge vehicle, showcasing the latest in AI and automotive technology. This differentiates Tesla from competitors and strengthens its reputation as a leader in innovation.
Enhanced Customer Engagement: The unique AI-driven features and personalized experiences can drive stronger customer engagement and loyalty, attracting tech-savvy consumers and enhancing the overall brand image.
By leveraging these advantages, Tesla can create a groundbreaking SUV that not only meets but exceeds consumer expectations, setting new standards for the automotive industry and reinforcing Tesla’s position as a pioneer in automotive and AI technology.
The integration of advanced AI like OpenAI’s GPT-4o into Apple’s Vision Pro + Version 2 can significantly enhance its vision understanding capabilities. Here are ten possible use cases:
1. Augmented Reality (AR) Applications: – Interactive AR Experiences: Enhance AR applications by providing real-time object recognition and interaction. For example, users can point the device at a historical landmark and receive detailed information and interactive visuals about it. – AR Navigation: Offer real-time navigation assistance in complex environments like malls or airports, overlaying directions onto the user’s view.
2. Enhanced Photography and Videography: – Intelligent Scene Recognition: Automatically adjust camera settings based on the scene being captured, such as landscapes, portraits, or low-light environments, ensuring optimal photo and video quality. – Content Creation Assistance: Provide suggestions and enhancements for capturing creative content, such as framing tips, real-time filters, and effects.
3. Healthcare and Medical Diagnosis: – Medical Imaging Analysis: Assist in analyzing medical images (e.g., X-rays, MRIs) to identify potential issues, providing preliminary diagnostic support to healthcare professionals. – Remote Health Monitoring: Enable remote health monitoring by analyzing visual data from wearable devices to track health metrics and detect anomalies.
4. Retail and Shopping: – Virtual Try-Ons: Allow users to virtually try on clothing, accessories, or cosmetics using the device’s camera, enhancing the online shopping experience. – Product Recognition: Identify products in stores and provide information, reviews, and price comparisons, helping users make informed purchasing decisions.
5. Security and Surveillance: – Facial Recognition: Enhance security systems with facial recognition capabilities for authorized access and threat detection. – Anomaly Detection: Monitor and analyze security footage to detect unusual activities or potential security threats in real-time.
6. Education and Training: – Interactive Learning: Use vision understanding to create interactive educational experiences, such as identifying objects or animals in educational content and providing detailed explanations. – Skill Training: Offer real-time feedback and guidance for skills training, such as in sports or technical tasks, by analyzing movements and techniques.
7. Accessibility and Assistive Technology: – Object Recognition for the Visually Impaired: Help visually impaired users navigate their surroundings by identifying objects and providing auditory descriptions. – Sign Language Recognition: Recognize and translate sign language in real-time, facilitating communication for hearing-impaired individuals.
8. Home Automation and Smart Living: – Smart Home Integration: Recognize household items and provide control over smart home devices. For instance, identifying a lamp and allowing users to turn it on or off via voice commands. – Activity Monitoring: Monitor and analyze daily activities to provide insights and recommendations for improving household efficiency and safety.
9. Automotive and Driver Assistance: – Driver Monitoring: Monitor driver attentiveness and detect signs of drowsiness or distraction, providing alerts to enhance safety. – Object Detection: Enhance autonomous driving systems with better object detection and classification, improving vehicle navigation and safety.
10. Environmental Monitoring: – Wildlife Tracking: Use vision understanding to monitor and track wildlife in natural habitats for research and conservation efforts. – Pollution Detection: Identify and analyze environmental pollutants or changes in landscapes, aiding in environmental protection and management.
These use cases demonstrate the broad potential of integrating advanced vision understanding capabilities into Apple’s Vision Pro + Version 2, enhancing its functionality across various domains and providing significant value to users.
Apple’s Vision Pro + Version 2, utilizing OpenAI’s ChatGPT „GPT-4o“ as the operating system offers several compelling marketing benefits. Here are the key advantages to highlight:
1. Revolutionary User Interface: – Conversational AI: GPT-4o’s advanced natural language processing capabilities allow for a conversational user interface, making interactions with Vision Pro + more intuitive and user-friendly. – Personalized Interactions: The AI can provide highly personalized responses and suggestions based on user behavior and preferences, enhancing user satisfaction and engagement.
2. Unmatched Productivity: – AI-Driven Multitasking: GPT-4o can manage and streamline multiple tasks simultaneously, significantly boosting productivity by handling scheduling, reminders, and real-time information retrieval seamlessly. – Voice-Activated Efficiency: Hands-free operation through advanced voice commands allows users to multitask efficiently, whether they are working, driving, or engaged in other activities.
3. Advanced Accessibility: – Inclusive Design: GPT-4o enhances accessibility with superior voice recognition, understanding diverse speech patterns, and offering multilingual support, making Vision Pro + more accessible to a broader audience. – Adaptive Assistance: The AI can provide context-aware assistance to users with disabilities, further promoting inclusivity and ease of use.
4. Superior Integration and Ecosystem: – Apple Ecosystem Synergy: GPT-4o integrates seamlessly with other Apple devices and services, offering a cohesive and interconnected user experience across the Apple ecosystem. – Unified User Experience: Users can enjoy a consistent and unified experience across all their Apple devices, enhancing brand loyalty and overall user satisfaction.
5. Enhanced Security and Privacy: – Secure Interactions: Emphasize GPT-4o’s robust security measures to ensure user data privacy and protection, leveraging OpenAI’s commitment to ethical AI practices. – Trustworthy AI: Highlight OpenAI’s dedication to ethical AI usage, reinforcing user trust in the AI-driven functionalities of Vision Pro +.
6. Market Differentiation: – Innovative Edge: Position Vision Pro + as a cutting-edge product that stands out in the market due to its integration with GPT-4o, setting it apart from competitors. – Leadership in AI: Showcase Apple’s leadership in technology innovation by leveraging OpenAI’s state-of-the-art advancements in AI.
7. Future-Proofing: – Continuous Innovation: Regular updates from OpenAI ensure that Vision Pro + remains at the forefront of AI technology, with continuous improvements and new features. – Scalable Solutions: The AI platform’s scalability allows for future enhancements, ensuring the product remains relevant and competitive over time.
8. Customer Engagement: – Proactive Support: GPT-4o can offer proactive customer support and real-time problem-solving, leading to higher customer satisfaction and loyalty. – Engaging Experiences: The AI can create engaging and interactive experiences, making the device more enjoyable and useful for daily activities.
9. Enhanced Creativity: – Creative Assistance: GPT-4o can assist users with creative tasks such as content creation, brainstorming, and project management, providing valuable support for both personal and professional use. – Innovative Features: Highlight the unique AI-driven features that empower users to explore new creative possibilities, enhancing the appeal of Vision Pro +.
10. Efficient Learning and Adaptation: – User Learning: GPT-4o continuously learns from user interactions, becoming more efficient and effective over time, offering a progressively improving user experience. – Adaptive Technology: The AI adapts to user needs and preferences, ensuring that the device remains relevant and useful in a variety of contexts.
By leveraging these benefits, Apple can market the Vision Pro + Version 2 as a pioneering product that offers unparalleled user experience, productivity, and innovation, driven by the advanced capabilities of OpenAI’s GPT-4o.
Google is rethinking its most iconic and lucrative product by adding new AI features to search. One expert tells WIRED it’s “a change in the world order.”
Google Search is about to fundamentally change—for better or worse. To align with Alphabet-owned Google’s grand vision of artificial intelligence, and prompted by competition from AI upstarts like ChatGPT, the company’s core product is getting reorganized, more personalized, and much more summarized by AI.
At Google’s annual I/O developer conference in Mountain View, California, today, Liz Reid showed off these changes, setting her stamp early on in her tenure as the new head of all things Google search. (Reid has been at Google a mere 20 years, where she has worked on a variety of search products.) Her AI-soaked demo was part of a broader theme throughout Google’s keynote, led primarily by CEO Sundar Pichai: AI is now underpinning nearly every product at Google, and the company only plans to accelerate that shift.
“In the era of Gemini we think we can make a dramatic amount of improvements to search,” Reid said in an interview with WIRED ahead of the event, referring to the flagship generative AI model launched late last year. “People’s time is valuable, right? They deal with hard things. If you have an opportunity with technology to help people get answers to their questions, to take more of the work out of it, why wouldn’t we want to go after that?”
It’s as though Google took the index cards for the screenplay it’s been writing for the past 25 years and tossed them into the air to see where the cards might fall. Also: The screenplay was written by AI.
These changes to Google Search have been long in the making. Last year the company carved out a section of its Search Labs, which lets users try experimental new features, for something called Search Generative Experience. The big question since has been whether, or when, those features would become a permanent part of Google Search. The answer is, well, now.
Google’s search overhaul comes at a time when critics are becoming increasingly vocal about what feels to some like a degraded search experience, and for the first time in a long time, the company is feeling the heat of competition, from the massive mashup between Microsoft and OpenAI. Smaller startups like Perplexity, You.com, and Brave have also been riding the generative AI wave and getting attention, if not significant mindshare yet, for the way they’ve rejiggered the whole concept of search.
Automatic Answers
Google says it has made a customized version of its Gemini AI model for these new Search features, though it declined to share any information about the size of this model, its speeds, or the guardrails it has put in place around the technology.
This search-specific spin on Gemini will power at least a few different elements of the new Google Search. AI Overviews, which Google has already been experimenting with in its labs, is likely the most significant. AI-generated summaries will now appear at the top of search results.
One example from WIRED’s testing: In response to the query “Where is the best place for me to see the northern lights?” Google will, instead of listing web pages, tell you in authoritative text that the best places to see the northern lights, aka the aurora borealis, are in the Arctic Circle in places with minimal light pollution. It will also offer a link to NordicVisitor.com. But then the AI continues yapping on below that, saying “Other places to see the northern lights include Russia and Canada’s northwest territories.”
Reid says that AI Overviews like this won’t show up for every search result, even if the feature is now becoming more prevalent. It’s reserved for more complex questions. Every time a person searches, Google is attempting to make an algorithmic value judgment behind the scenes as to whether it should serve up AI-generated answers or a conventional blue link to click. “If you search for Walmart.com, you really just want to go to Walmart.com,” Reid says. “But if you have an extremely customized question, that’s where we’re going to bring this.”
AI Overviews are rolling out this week to all Google search users in the US. The feature will come to more countries by the end of the year, Reid said, which means more than a billion people will see AI Overviews in their search results. They will appear across all platforms—the web, mobile, and as part of the search engine experience in browsers, such as when people search through Google on Safari.
Another update coming to search is a function for planning ahead. You can, for example, ask Google to meal-plan for you, or to find a pilates studio nearby that’s offering a class with an introductory discount. In the Googley-eyed future of search, an AI agent can round up a few studios nearby, summarize reviews of them, and plot out the time it would take someone to walk there. This is one of Google’s most obvious advantages over upstart search engines, which don’t have anything close to the troves of reviews, mapping data, or other knowledge that Google has, and may not be able to tap into APIs for real-time or local information so easily.
The most jarring changes that Google has been exploring in its Search Labs is an “AI-organized” results page. This at first glance looks to eschew the blue-links search experience entirely.
One example provided by Reid: A search for where to go for an anniversary dinner in the greater Dallas area would return a page with a few “chips” or buttons at the top to refine the results. Those might include categories like Dine-In, Takeout, and Open Now. Below that might be a sponsored result—Google’s gonna ad—and then a grouping of what Google judges to be “anniversary-worthy restaurants” or “romantic steakhouses.” That might be followed by some suggested questions to tweak the search even more, like, “Is Dallas a romantic city?”
AI-organized search is still being rolled out, but it will start appearing in the US in English “in the coming weeks.” So will an enhanced video search option, like Google Lens on steroids, where you can point your phone’s camera at an object like a broken record player and ask how to fix it.
If all these new AI features sound confusing, you might have missed Google’s latest galaxy-brain ambitions for what was once a humble text box. Reid makes clear that she thinks most consumers assume Google Search is just one thing, where in fact it’s many things to different people, who all search in different ways.
“That’s one of the reasons why we’re excited about working on some of the AI-organized results pages,” she said. “Like, how do you make sense of space? The fact that you want lots of different content is great. But is it as easy as it can be yet in terms of browsing through and consuming the information?”
But by generating AI Overviews—and by determining when those overviews should appear—Google is essentially deciding what is a complex question and what is not, and then making a judgment on what kind of web content should inform its AI-generated summary. Sure, it’s a new era of search where search does the work for you; it’s also a search bot that has the potential to algorithmically favor one kind of result over others.
“One of the biggest changes to happen in search with these AI models is that the AI actually creates a kind of informed opinion,” says Jim Yu, the executive chairman of BrightEdge, a search engine optimization firm that has been closely monitoring web traffic for more than 17 years. “The paradigm of search for the last 20 years has been that the search engine pulls a lot of information and gives you the links. Now the search engine does all the searches for you and summarizes the results and gives you a formative opinion.”
Doing that raises the stakes for Google’s search results. When algorithms are deciding that what a person needs is one coagulated answer, instead of coughing up several links for them to then click through and read, errors are more consequential. Gemini has not been immune to hallucinations—instances where the AI shares blatantly wrong or made-up information.
Last year a writer for The Atlantic asked Google to name an African country beginning with the letter “K,” and the search engine responded with a snippet of text—originally generated by ChatGPT—that none of the countries in Africa begin with the letter K, clearly overlooking Kenya. Google’s AI image-generation tool was very publicly criticized earlier this year when it depicted some historical figures, such as George Washington, as Black. Google temporarily paused that tool.
New World Order
Google’s reimagined version of AI search shoves the famous “10 blue links” it used to provide on results pages further into the rearview. First ads and info boxes began to take priority at the top of Google’s pages; now, AI-generated overviews and categories will take up a good chunk of search real estate. And web publishers and content creators are nervous about these changes—rightfully.
The research firm Gartner predicted earlier this year that by 2026, traditional search engine volume will drop by 25 percent, as a more “agent”-led search approach, in which AI models retrieve and generate more direct answers, takes hold.
“Generative AI solutions are becoming substitute answer engines, replacing user queries that previously may have been executed in traditional search engines,” Alan Antin, a vice president analyst at Gartner, said in a statement that accompanied the report. “This will force companies to rethink their marketing channels strategy.”
What does that mean for the web? “It’s a change in the world order,” says Yu, of BrightEdge. “We’re at this moment where everything in search is starting to change with AI.”
Eight months ago BrightEdge developed something it calls a generative parser, which monitors what happens when searchers interact with AI-generated results on the web. He says over the past month the parser has detected that Google is less frequently asking people if they want an AI-generated answer, which was part of the experimental phase of generative search, and more frequently assuming they do. “We think it shows they have a lot more confidence that you’re going to want to interact with AI in search, rather than prompting you to opt in to an AI-generated result.”
Changes to search also have major implications for Google’s advertising business, which makes up the vast majority of the company’s revenue. In a recent quarterly earnings call, Pichai declined to share revenue from its generative AI experiments broadly. But as WIRED’s Paresh Dave pointed out, by offering more direct answers to searchers, “Google could end up with fewer opportunities to show search ads if people spend less time doing additional, more refined searches.” And the kinds of ads shown may have to evolve along with Google’s generative AI tools.
Google has said it will prioritize traffic to websites, creators, and merchants even as these changes roll out, but it hasn’t pulled back the curtain to reveal exactly how it plans to do this.
When asked in a press briefing ahead of I/O whether Google believes users will still click on links beyond the AI-generated web summary, Reid said that so far Google sees people “actually digging deeper, so they start with the AI overview and then click on additional websites.”
In the past, Reid continued, a searcher would have to poke around to eventually land on a website that gave them the info they wanted, but now Google will assemble an answer culled from various websites of its choosing. In the hive mind at the Googleplex, that will still spark exploration. “[People] will just use search more often, and that provides an additional opportunity to send valuable traffic to the web,” Reid said.
It’s a rosy vision for the future of search, one where being served bite-size AI-generated answers somehow prompts people to spend more time digging deeper into ideas. Google Search still promises to put the world’s information at our fingertips, but it’s less clear now who is actually tapping the keys.
Facebook has just turned 20 years old, and observers say: Social media has moved from places of exchange to places of passive consumption. Is that correct?
“Sorry, but Instagram sucks now,” was the title of a journalist in her article in “Vice” magazine. The author criticizes that the app shows too much advertising and too much irrelevant stuff like healthy recipes. „If it continues like this, Instagram will soon end up with the other social media zombies.“ She means, for example, Facebook. Because this platform is no longer what it once was.
Once upon a time, you could watch your friends explore all of Europe via Interrail, fidget to your favorite song in the club, paint a picture with watercolors or adore your new partner. You always stayed in touch via direct message – whether with your school colleagues or your holiday love. Instead, short videos, pictures and memes from accounts that you don’t actually follow are now appearing in the timeline. At best, an older relative posts a photo of her garden or a tasteless calendar saying.
On both platforms, this is due to the changed algorithm that the Meta Group introduced around two years ago. It ensures that users are no longer shown primarily what they want to see themselves, but rather what Instagram and Facebook believe is relevant to them.
This upsets quite a few people. A journalist from the online magazine “Krautreporter” says he mainly sees advertising and contributions from influencers. “I often wonder whether real people still post on social networks,” he continues. In another article he states: „Social media is dying out.“ Is it really over?
A similar sentence could recently be read in the Economist. The newspaper published an article entitled „The end of the social network“ to mark Facebook’s 20th anniversary in February. The cover photo shows an emoji with an offended expression about to sink into the sea. People would post less, the text says. The proportion of Americans who like to document their lives online has fallen from 40 percent to 28 percent since 2020. Can it really be that the time of social networks is over? Woman with smartphone Apparently people have less desire to document their lives online than before. Getty Images/iStockphoto
Anyone who reads the entire article in the „Economist“ will quickly realize that it’s not about declaring social media dead. Rather, there is talk of a transformation: the social aspect of social media is being lost. While they were originally intended to combine personal and mass media communication, that is now changing again. The two functions would gradually be separated again. Status updates from friends have given way to videos from strangers; Postings would no longer be posted on Facebook and Co, but rather on messenger services such as Whatsapp or Telegram. The new logic
The “Neue Zürcher Zeitung” (“NZZ”) analyzes that all of this is just the logical consequence of a development that has been going on for some time. In the early days of Facebook, users would have seen all posts regardless of their quality. It didn’t matter whether they actually interested her – the photo of a lunch, the selfie in the park, the crude thoughts about world events, all of that just appeared, in chronological order. Whoever had the most followers had the largest audience.
In 2009, Facebook began sorting posts by popularity. Whatever was liked the most was displayed at the top. Since then, the “closest circle” of friends and family has become increasingly less important, according to the “NZZ” analysis.
Recently, the Meta Group has also become increasingly oriented towards Tiktok. The app from China is particularly popular among younger people. Users can upload short videos there that are accompanied by music. Anyone who is on Tiktok will always see content from other people’s accounts. Ingrid Brodnig, a digital expert, isn’t surprised: „Facebook and Instagram have probably noticed that this is helpful so that people stay tuned.“ From the mass of posts, an artificial intelligence automatically selects those that the person in front of the screen might like. At the same time, fewer contributions come from friends. Let yourself be showered
Brodnig also noticed what other observers stated: „The social aspect of social media has become less.“
The trend is rather to let yourself be showered. „Tiktok, for example, works more like RTL 2 than like a classic social medium, which is about interpersonal exchange.“ On Tiktok, a minority publishes the majority of posts. Or to put it another way: A few show themselves, many others watch them – unlike what was previously used to on social networks, where everyone revealed something.
The fact that many people no longer have as much desire to expose themselves online does not only apply to the USA. In Austria it is also currently evident that young people are using social media less. The disillusionment began years ago when “people lost their jobs, for example, because they posted something on Facebook while drunk.” False reports, hate comments and ridicule would have done the rest. „If you get angry because you post your lunch, you might think: Then I won’t post or I’ll post less often.“
"If you get angry because you post your lunch, you might think: Then I won't post or I'll post less often." (Ingrid Brodnig, digital expert)
So who provides all the content? Influencers, politicians and people “with a great need to communicate”, for example with a political issue, says Brodnig. But also media and companies that want to advertise their products. Most others, however, are tired to a certain extent and prefer to sit back and consume. „The funny thing about it is that it’s not that noticeable because the feeds are of course designed so that we see the active ones. We don’t see that our friend Anna hasn’t posted anything for seven weeks, Facebook wouldn’t have any of that.“ Shifting to private groups
So if social networks are primarily there for consumption and the exchange shifts to private chats and chat groups: What are the consequences?
It could become a problem that messenger apps such as Whatsapp or Telegram are not moderated. Of course, this poses risks. In India, politicians used WhatsApp to spread lies – which might soon have been deleted on a platform like Facebook, according to the Economist. “Especially during the pandemic, you could see that a lot of misinformation and conspiracy myths were being spread via messenger apps,” says expert Brodnig. Furthermore: One should not believe that things are always peaceful and mindful in chat groups; debates would escalate there too.
Another possible consequence is that “social media will become a main entertainment channel,” says Brodnig. This is difficult, for example, for protest movements for which social media is an important place for networking. The expert also fears that an already very emotional public debate will be further emotionalized: „Tiktok is a system in which upsetting videos may have a good chance because people will stick around for longer.“ Not all bad
But not everything about it is bad. Brodnig suspects that people today should think more consciously about what they want to reveal about their private life and what they don’t. “We learned not to have to post everything.” Enjoying the moment seems to be more in vogue again. The channels would now also be viewed more critically. „When social media was new and fresh, there was a lot of enthusiasm. People thought: Wow, I can connect with my high school friend who I haven’t seen in ten years, or message friends from Argentina.“ Now many have recognized the dark side. „I believe that the golden age of social media is over.“
By the way, some are of the opinion that the future of platforms lies in their past. Unless they return to what they once were, they would surely perish. But are they right? The number of users on Instagram has grown steadily and is expected to continue to grow. So even though people are tired of posting, even though they’re annoyed – they stick with it.
Faruk Özer just started a 11,196-year prison sentence. Did he almost get away with the biggest heist in Turkey’s history, or was it all just a big misunderstanding?
Faruk Fatih Özer stood in front of a passport control officer at Istanbul Airport, a line of impatient travelers queuing behind him. He pulled his face mask below his chin for the security camera. Surely he was nervous. The 27-year-old had unruly black hair, a boy-band face, and a patchy beard. Normally he overcompensated for his callow features by dressing in a pressed three-piece suit. But this spring day he wore black trainers and a navy-blue sweater hastily pulled over a white polo shirt, as if he had dressed in a dash. A small backpack was slung over his right shoulder. He looked like someone who could have been going on a last-minute day trip—or someone planning to never come back. At 5:57 pm on April 20, 2021, the guard stamped his Turkish passport and Özer shuffled through the crowd to Gate C, a flash drive containing a rumored $2 billion in crypto stashed in his belongings.
After Özer’s plane reached Tirana, Albania, at 9:24 that night, he checked into the Mondial, a popular 4-star business hotel in the capital’s commercial district. A couple of days later, he looked at his social media accounts. A mob was very angry with him: Customers couldn’t access their money on the exchange Thodex, where he was founder and CEO, and people were accusing him of absconding with their funds.
Özer posted a public letter to his company’s website and his social accounts. “I feel compelled to make this statement in order to respond urgently to these allegations,” he wrote. The accusations weren’t true, he said. Thodex—which had nearly half a million investors and $500 million in daily trade volume—was investigating what Özer claimed was a suspected cyberattack that caused “an abnormal fluctuation in the company account.” Assets would be frozen for five days while Thodex resolved the issue. This was terribly bad timing for the big business deal he said he was en route to make: selling the company, or so he had told some employees and his brother and sister before he left. All would be made right. “There will be no victims,” he promised. “I personally declare that I will return to Turkey within a few days and ensure that the facts are revealed in cooperation with judicial authorities and that I will do my best to prevent users from suffering.” Of course, there was this possibility too: He was in the midst of pulling off the biggest heist in Turkey’s history.
Before dawn the day after Özer posted the letter, police squads fanned out across Istanbul and public prosecutors opened an investigation. Law enforcement arrested 62 people, including Thodex employees at all levels of the company—and Özer’s older brother and sister, Güven and Serap. Interpol issued a red notice, a request for law enforcement worldwide to find and “provisionally arrest” Özer pending his extradition to Turkey. Search teams deployed across Albania, Montenegro, Kosovo, and North Macedonia. There were reported sightings of the dark-haired young man across Tirana, rumors that he had gone to a poultry farm, that an executive from the Albanian football league was sheltering him. Soon, the Albanian police arrested people accused of aiding and abetting him. But no one seemed to know exactly where Özer was.
Özer had vanished at a particularly precarious time in crypto’s annals: In the weeks leading up to his disappearance, so-called rug pulls—when a cryptocurrency exchange or altcoin developer absconds with investors’ funds—had crypto investors around the globe flabbergasted. The CEO of Mirror Trading International, a crypto trading company based in South Africa, defrauded users of more than $1 billion, then skipped town; TurtleDex, an anonymous decentralized finance storage project on Binance, reportedly vanished with $2.4 million; another decentralized finance project, Meerkat, reportedly fleeced investors out of $31 million (of which they paid back 95 percent). Blockchain analysis firm Chainalysis ranked rug pulls as the primary scam of 2021, accounting for 37 percent of all cryptocurrency scam revenue that year, up from 1 percent the year before.
Thodex was at the top of that roster, and nearly every major outlet from Bloomberg to Newsweek published headlines like “Turkish Crypto Exchange Goes Bust as Founder Flees Country” and “Turkish Cryptocurrency Founder Faruk Fatih Özer Seen Fleeing Country With Suspected $2 Billion From Investors.” CoinGeek called it “the biggest scam in the digital asset industry in 2021.” The New York Times’ headline read, “Possible Cryptocurrency Fraud Is Another Blow to Turkey’s Financial Stability.” In Turkey, the country I now call home, people were reeling: For years, crypto had been built up—largely by Özer but by others too—as a way out of economic volatility. Now it seemed like just another way to lose your life savings. But something felt off to me, like the whole story wasn’t being told.
ILLUSTRATION: PRINCESS HIDIR
Faruk was born in February 1994, the youngest of three. He was inseparable from his brother, Güven, and sister, Serap. They grew up camping, playing video games, and cooking together. Friends always pointed out their shared sense of humor. His parents ran a print and copy shop in the city of Kocaeli, down the street from their house. They were observant Muslims who gave their children meaningful names: “trust” (Güven), “mirage” (Serap), and “the one who distinguishes between right and wrong” (Faruk).
Kocaeli is an industrial port town about 100 kilometers east of Istanbul surrounded by a checkerboard of tobacco and sugar beet fields, petrochemical plants, and paper mills. Roman emperors once lived there, and their crumbling fortress walls still wind through the landscape. After the Ottoman Empire collapsed, Kocaeli became a manufacturing boomtown, and its residents muscled the newly minted Republic of Turkey into the Industrial Revolution.
When Özer was born, Turkey’s economy was in a tailspin. A fragile financial system, irresponsible borrowing, and political corruption had triggered a brief period of triple-digit inflation. The lira’s volatility threatened the savings of its entire population. So many people moved their domestic assets to foreign-currency deposits that, by the end of the year, an astonishing 50 percent of bank deposits in Turkey were in a foreign currency. The year before, that figure was just 1 percent.
That same month Özer was born, a charismatic orator with a sympathetic gaze and push-broom mustache began campaigning through Istanbul’s streets in a paisley kipper tie. Recep Tayyip Erdoğan railed against the secular elite who had led the country to near economic collapse. A devout Muslim, he walked the streets of his home neighborhood, Kasımpaşa, a hardscrabble district where he grew up selling simit, or sesame bread, promising reform. In an upset election, he coasted into the role of mayor of Istanbul.
Around the same time, two Turkish business moguls launched Turkcell, the nation’s first mobile communication system. (This was a year and a half before the same technology was released in the US.) By 2003, Erdoğan was elected prime minister, kicking off a decade of unprecedented growth that foreign observers called Turkey’s “Silent Revolution.” In a turn away from his predecessors, he governed through the lens of a businessman, inaugurating a massive building boom across the country and ultimately wrangling Turkey’s rampant inflation. His pro-business rhetoric boosted the middle class and set Turkey on a path to European Union membership.
Özer also caught the spirit of entrepreneurship at an early age. As a teenager in the mid-aughts, he worked after-school shifts at his parents’ print shop. “Ever since I was a child, I wanted to do my own business, no matter what sector it was,” he said. At the end of his second year in high school, he decided that further study would not lead him to that dream, so he dropped out.
By 2013, Turkey’s gross domestic product had nearly tripled, the lira hovered just above the dollar, and the country was negotiating entry into the EU. BtcTurk, Turkey’s first crypto exchange (and reportedly the world’s fourth), was preparing to launch. Then, in May of that year, a group of activists gathered at Gezi Park in Istanbul to protest plans to redevelop it into a shopping mall with Ottoman-era architecture. They bridled not only at the loss of green space but also at the glorification of Turkey’s Islamist past in a society that called itself secular. Police brutally cracked down on the protesters, sparking a nationwide movement. Within weeks, more than 3 million people had taken part in the demonstrations, their frustration now encompassing the growing authoritarianism of Erdoğan’s government. Thousands were injured, and at least five died. Özer had just turned 19. In the following years, Erdoğan tossed a record number of journalists in jail and censored the internet, and foreign investors recoiled.
Around that time, Ismail H. Polat, an expert in engineering, information tech, and new media, was the first person to cover crypto on his YouTube channel. Now a lecturer at Istanbul’s Kadir Has University, the way he tells it, crypto was about trying to be financially free. In those early days, he says, “it was not the coin, but the spirit.” (After all, bitcoin was worth only $77 at the time.) For young people who felt that Erdoğan had pulled the rug out from under them, whether they knew it explicitly or not, crypto was a new way to protest.
At the same time, Özer’s generation was watching as tech startups were taking off around the world. Facebook had bought Instagram for $1 billion, and that spurred entrepreneurs to begin churning out apps. A lot of them were gaming-focused; Candy Crush brought in $1.5 billion in revenue in 2013. The Özers took note.
By then, Turkcell had become one of the world’s largest companies. Turkey’s mobile infrastructure and smartphone adoption rate became one of the fastest growing in the world. Polat credits this as the foundation for what came next: The dream began to shift from mere employment to entrepreneurship. Güven cofounded a company called Inline Yazılım; Faruk started one called Inline Teknoloji a few years later and another called Game Bridge after that. The brothers figured out how to crank out chintzy apps—cut-and-paste washboard abs for Instagram photos (pre-vanity-filters era) and addictive gambling games. “I started to sell almost every product that I thought could make a profit on the internet,” he told me. “This is how I took my first step into business life.”
By 2017, 14 years into Erdoğan’s rule, Turkey’s economy had come full circle. Erdoğan’s unorthodox economic policies—repeatedly cutting interest rates—were supposed to raise investment and make Turkey less dependent on foreign powers. Instead they led the country into an economic crisis; the value of the lira hit the skids, and after a failed coup attempt in 2016 people figured it would only get worse. Just as they had 23 years earlier, citizens began searching for places to shelter their money. Voilà, 2017 was also the first year bitcoin’s value shot sky high, from $9,000 to $20,000. Global trade volume also skyrocketed from $99 million to $16 billion.
Being early investors in tech wasn’t something that had historically been available to the average person in Turkey. The instant millionaires and billionaires and unicorns pretty much lived elsewhere. Now, Faruk Özer saw a possibility. People in Turkey could shelter their money in what was clearly going to be the next big tech boom. But the biggest opportunity wasn’t in trading coins—it was in running a cryptocurrency exchange. Exchanges collect people’s money and, for a commission, invest it; that gives people who don’t have the time or skills to invest directly into the blockchain a pathway to crypto. Users who go through an exchange don’t even have their own digital wallets; their money is stored until they withdraw it. (Hence the industry warning: “Not your wallet, not your coins.”)
“During conversations with friends, we realized the deficiencies in the cryptocurrency exchange sector in Turkey and that the market was open to new players,” Özer said. There were no regulations on running a cryptocurrency exchange; Özer could open one easier than he could open a simit stand. He could become rich. Everybody might become rich. So at the age of 23, Özer founded Thodex with 40,000 lira—around $11,100 at the time—of his own money. Soon, Serap began working for Özer as a company accountant; Güven too seemed to be around a lot, but his ties were unofficial.
Using a playbook from Silicon Valley, Özer began spreading the gospel of crypto around Turkey. By this time, there were a few other notable exchanges, but Özer gave crypto a face and a ubiquitous presence. He put up ads on billboards and at bus stations; he installed Turkey’s first bitcoin ATM in a luxury mall in Istanbul’s posh Nişantaşı neighborhood, more as a stunt than anything. In a TV interview, he explained, “People realized that it is a technology that they can turn into cash at any time. One of the most important helping tools in the spread of this perception was undoubtedly bitcoin ATMs.” He aired television commercials pushing Thodex, featuring a dozen Turkish celebrities, including actress Pınar Deniz and pop star Simge. That caught the attention of Turkey’s middle and upper classes.
Soon, Özer was ingratiated into the upper echelons of Turkish society. He was invited to sit on the board of organizations such as Blockchain Turkey, a respected crypto nonprofit in Istanbul, alongside the country’s biggest bankers. He was attending private meetings with Turkey’s highest ministers. He appeared regularly on news channels and in tech blogs. At one point, Thodex was hacked for many millions of lira (supposedly $14 million US), allegedly from an IP address in China. Özer says he compensated the customers’ losses out of his own pocket and reported the theft to the Istanbul Public Prosecutor’s cybercrime unit. Experts from regulating agencies audited Thodex’s financial infrastructure—and Özer claimed they gave the company a clean bill of health. (Though that couldn’t be confirmed.)
Istanbul began to feel like Las Vegas. Dazzling billboards and banners hawking crypto coins were everywhere. Backgammon cafés, where old men have been drinking tea and talking politics for centuries, buzzed with crypto gossip. Signs appeared on barber shops and storefronts advising customers that they could pay with bitcoin. Bitcoin booths opened in the Grand Bazaar, next to the gold-trading stalls where people once sheltered their money when empires collapsed. By 2020, Turkey had more people using cryptocurrency than almost anywhere else in the world. Istanbul had concluded a sweeping economic metamorphosis, from a historic trading post to an information technology leader to one of the top mobile gaming centers on the planet. And finally to a cryptocurrency capital. Crypto “transformed into a national mindset” among young people, Polat says.
ILLUSTRATION: PRINCESS HIDIR
He added, though: “Money is an agreement between a government and its society in terms of national unity. But on the other side of the medallion, if everyone leaves the fiat—if everyone leaves the social agreement of their nation—it could derail the world.”
In 2020, Thodex moved into a sprawling high-rise in Kadıköy, a chockablock district on the Asian side of Istanbul. It had a big open floor plan and views of the Marmara Sea. Thodex was now the fastest-growing and second-largest cryptocurrency exchange in Turkey. In the office, Özer had a reputation for keeping to himself. His 85 employees, most of whom applied for their jobs at Thodex through ads on platforms like LinkedIn, say they were paid on time, received bonuses, got their time-off requests approved quickly, and enjoyed the Thodex-branded coffee mugs and other swag. But the young man in charge clearly had some bluster. One former employee told me Özer’s avatar on the in-house messaging system was an image of Leonardo DiCaprio’s character from The Wolf of Wall Street.
Like any CEO, Özer wanted to make it as easy as possible for customers to spend money on his products. He started a customer service center called Thodex Academy that offered an introductory guide to cryptocurrencies for new investors. He offered scandalously cheap commission rates, so low that industry experts were stumped as to how Thodex could be making a profit. The company also allowed people to buy crypto via credit cards; at times that was money an investor didn’t really have, but the hope was that a coin’s value would go up faster than the interest accrued on the card. (The US Securities and Exchange Commission was alerting the public to avoid crypto exchanges promoting the practice.)
Özer was also intent on taking Thodex global. In 2020, the company secured a money services business license from the US Treasury’s Financial Crimes Enforcement Network. Özer endlessly paraded it around like a trophy, touting it in news interviews, on Thodex’s website, and on social media. Like the audit a few years earlier, the license seemed to prove that Thodex was legit—that it had passed all the record-keeping and anti-money-laundering checks, that it was a company people could trust.
By March 2021, 16 percent of people in Turkey were using crypto, putting the nation in the top five for crypto use, along with Nigeria, Vietnam, the Philippines, and Peru—all countries with struggling economies.
The value of the lira, meanwhile, was at a historic low—as was Erdoğan’s approval rating. In April, Turkey’s Central Bank announced a ban on the use of crypto for purchases or services, set to go into effect later that month. This sent a shock wave across the global crypto market. (Bitcoin’s value dropped 4.6 percent.) The central bank issued a statement saying bitcoin could “cause non-recoverable losses.” It also said bitcoin’s use could undermine confidence in the lira. The bank and Erdoğan promised more regulations to follow. Özer’s entire empire was under threat.
Özer had, for a few months, been running a PR blitz for Thodex’s fourth birthday, giving away iPhones, PlayStations, a Porsche Panamera, and Dogecoins. It worked—sort of. Thodex’s trade volume reportedly climbed to $538 million. At the same time, the price of bitcoin soared again, reaching a high of $63,000. If there ever was a ripe moment to flee with Thodex’s cold wallet, this was it. Days later, Özer stood at the Istanbul Airport, a ticket to Tirana in his hands.
As “wanted” fliers with Özer’s picture went up on telephone poles across Albania, Erdoğan held a Q&A with college students from all over the country and talked about his “war” with crypto. The outlook for Thodex’s 400,000 customers was grim. So many Thodex investors had put all of their money into Özer’s company—and all of their spouses’, parents’, in-laws’, and kids’ money too. They had taken out loans and lines of credit to buy more crypto.
One investor named Mahmut—$100,000 lost—had been using Thodex for three years and was in the final stages of buying a house and car for his family. (Like so many victims, he didn’t want to use his full name, because of a heavy burden of shame.) Mahmut had tried to withdraw his money—a mixture of savings and loans—in the days before the collapse, but it never came through. He attempted suicide three times. When his 2-year-old was diagnosed with autism, Mahmut took a job as a security guard at a storage facility to help pay for services for his son. At least two other investors were reported to have died by suicide.
Then there were friends of the family; Güven and Serap had also recruited customers. One was a former colleague of Güven’s; they had worked together through an advertising agency. Güven personally made a Thodex account for this colleague. Over time the two became friends, calling each other on birthdays. About Güven, the friend told me, “He’s a nice person who likes to joke around.”
But when he saw the maintenance notice on Thodex’s website, he called Güven to ask about withdrawing his money. “His phone was off, and would never turn on again after that,” he said. “I believed in it. It had public credibility. It had a license. It had an office. Tax registration number. Employees. It checked out as a reputable company,” he said. He lost $7,900—but, worse than that, he said, “I trusted it so much that I recommended Thodex to many friends, and they all lost their money too.”
Victims formed support groups online. People were devastated about losing their life savings, but they were also plagued by the mystery of what happened to Özer; they talked about Özer haunting them in recurring dreams. People questioned how Özer—this self-made 27-year-old who didn’t quite fit the profile of a tech bro or a transnational cybercriminal—could engineer the biggest theft Turkey had ever seen all by himself.
Two months after the collapse, Sedat Peker, an infamous, self-exiled mafia boss turned YouTuber, inflamed the situation with a series of cryptic posts on his YouTube channel and Twitter, accusing Turkey’s interior minister of collusion and profiteering. (The minister denied it, but photos of Özer and him at a 2019 meeting fueled a heap of conspiracy theories.) At one point before he disappeared, Özer apparently stayed in pandemic lockdown with the son of a member of Turkey’s parliament as they prepared to launch a new digital wallet service called Hoppara. A lawyer representing some victims speculated on a phone call with me that Thodex was actually a money laundering scheme, that Özer was just a puppet, and some other power was pulling the strings. Others I spoke with echoed this theory, and more than a few people strongly cautioned me to stop my reporting. Soon I started receiving anonymous threats.
Some vigilante programmers tried to trace the blockchain to see if they could find out if this was the work of one individual, a criminal network, or a vulnerable system. (As the joke about people who steal money and blame it on hackers goes, “I lost my bitcoin in a boating accident.”) They came up short. While others looked for the money, I decided to search for Özer. He reminded me of the young founders I used to interview in San Francisco when I was covering tech in 2013—ambitious, naive, and at times loose with ethics. Also, what aspiring fugitive would say where they were absconding to and then post letters from the road? So I booked a ticket for Tirana, the last place Özer was seen.
Two days later my apartment in Istanbul was ransacked in a way that seemed like a stern message. The wood on my front door was split open by force, and the contents of every drawer and cabinet were tossed around. The lock to a safe was snipped open, its contents—expensive camera equipment and cash—remained untaken. Even a laptop on the entry table appeared untouched. I canceled the trip.
Nearly one year after he disappeared, there was no sign of Özer or the money. Rumors flew that he was no longer in Albania. He could be in a hotel in Montenegro, a yacht off Kosovo, or a tropical hideaway in Thailand, people said; or he could be locked in a Tirana basement. People told me they thought he was dead, resting in a shallow grave.
ILLUSTRATION: PRINCESS HIDIR
Güven and Serap idled in prison, awaiting their brother’s capture so that their trial could begin. In March 2022, Istanbul’s public prosecutor and Turkey’s Financial Crimes Board released the findings of their investigation. They painted Özer as a rapacious mountebank who used star-powered pitchmen to dupe people into funneling their savings into his criminal organization. The report asserted that, in 2017, Özer founded Thodex with the intention of operating it as a crime ring for money laundering and that every employee was a willing part of it—from the top executives down to the call-center workers who were placating customers and the social media managers who lured victims with promotions and sweepstakes.
The report traced scads of transactions through a shadowy web of financial accounts all allegedly under Özer’s control. It said that about $8 million in Thodex-held assets had been cashed out in gold bricks in Malta a few weeks before Özer’s disappearance. Özer might have escaped, but his employees and family were facing the possibility of spending many lifetimes in prison.
Just as hope of Özer’s resurfacing dwindled, the drama took a new twist: Sevgi Erarslan, a lawyer whom Özer’s father had hired initially to pay the victims back, then to represent his son in absentia, introduced herself to Twitter via a shocking tweet: She said she would refund any victims of Thodex if they legally withdrew their complaint against her client.
A wave of questions followed—where was this money coming from, and was Özer not just alive but in contact with Erarslan while wanted by Interpol? I sent her an email asking if I could speak with Özer. To my surprise, she called me immediately, saying that Özer was willing to be in touch. We began an occasional correspondence, though I often wondered if he really was the person answering my questions, if he was even really alive.
The trial went forward under a swirl of confusion and skepticism—about Özer’s whereabouts, about the large payments now being sent to victims from undisclosed sources, and about Erarslan’s legitimacy as his official lawyer. Of the 62 people who had been initially arrested, 21 were charged. On an overcast July morning, officers escorted those defendants into Istanbul’s beige brutalist courthouse, just a short walk from the Thodex headquarters where all the people on trial had once worked.
Güven wore a dark olive blazer, and his mustache was trimmed into a neat chevron. Serap sat with her back turned to him, cloaked in a trench coat pulled over a midnight black abaya. Özer’s lawyer, Erarslan, wore Turkey’s satin lawyer cloak and carried a Louis Vuitton purse. The sound of dozens of handcuffs being unhitched echoed through the cavernous room.
When Güven’s name was called, he stood, flanked by two crew-cut court officers sporting the dark irony of his name emblazoned on their vests (“Güvenlik” means “security”). He told the court that he had no official ties to Thodex. “I only come to the office for tea with my siblings,” he said. He explained how Thodex subcontracted his company for advertising services, and added: “My brother asked me to give him my personal account that I wasn’t using, so I let him use it.” Saying that his brother told him he was going to Albania to try to sell the company, he corroborated Faruk’s claim.
Without looking at her brother, Serap rose and explained that she was only an accountant; her job was to forward documents to an accounting firm. Like Güven, she had given Faruk her personal crypto exchange and bank account information at his request. “I didn’t think he was going to use it,” Serap said. “I can’t say that my brother opened those fake accounts in my name. Identity theft is common; it could have been anyone.” The head judge twirled her pen as Serap spoke, her voice sputtering and cracking. “I have been suffering from both physiological and psychological problems. I am so worn out physically.” When she began losing her breath and stumbling over her sentences, the judge excused her from the stand.
Özer’s siblings and former employees told the court about Özer’s request for access to scores of other accounts where he could personally initiate trades. To the prosecutors—and probably plenty of other people listening—this looked a lot like evidence of money laundering.
When the presiding judge called Özer’s name, Erarslan stood to testify on his behalf, waving a handwritten power of attorney, claiming to be able to represent the missing CEO. The judge shut her down, saying that the document was invalid.
One of the victims’ lawyers stood up and shouted that Erarslan should be kicked out of the courtroom. Erarslan shouted back. The room erupted into a circus. Judges and lawyers, victims and defendants—all volleyed slurs and accusations at one another. One of the defendants’ lawyers yelled at the judge: “You need to know how crypto works. To have a fair trial you have to understand how crypto works.”
Late one August night in 2022, a few days before the defendants back in Istanbul were to receive their verdicts, it became clear that Özer was very much alive. The Albanian police had been tailing a BMW X5 that they suspected was Özer’s and traced the car to an elegant two-story art-deco villa in the hills of Vlorë, a ritzy tourist town on what’s billed as the Albanian Riviera.
Just outside the driveway, they pulled over and waited. At 2:30 am, two people left the house and got into the BMW and started to pull out of the driveway. The cops stopped it, arrested two young men, and a police squad in bulletproof vests and balaclavas stormed the villa. In video footage taken of the raid, Özer, shirtless and wearing red shorts, looks shocked. He stumbles around the room. On a wall behind him, liquor bottles line the shelves. Three women were in the villa too. An officer grabbed Özer, and the young CEO, now wearing a white polo shirt, was handcuffed, escorted down a short flight of stairs, shuttled into an unmarked white van, and driven into the night.
At the police station in Tirana, Özer told the cops that he had been “hiding in the streets of poor neighborhoods.” He added that he got around by bus. “Since I grew up in a poor neighborhood in Turkey, I know how to deal with poor people. I looked for a house to rent by asking people on the streets.” He also said that he had been living off of $10,000 in cash he had brought into the country and money that was occasionally being wired to him—plus, some crypto trading. He confessed that he planned on eventually escaping to Greece.
For nearly a year, Özer sat in an Albanian prison, appealing his extradition back to Turkey. “We are trying to explain to the court that if I am extradited, I do not have a chance to get a fair trial,” he wrote to me. He called the trial “tragicomic.” His appeal was unsuccessful. In June 2023 he arrived at Istanbul Superior Court. His head was shaved; he still had the scruffy beard. The once buoyant tech founder was now staring down a prison sentence that could carry an astonishing 43,000 years.
When he finally stood before the court, judges allowed Özer to tell his story. Leaping at the chance, he powered up a presentation full of images and graphics, something not dissimilar to a pitch deck. Then he started to read from a 60-page soliloquy, his defense attorney clicking through slides at his instruction.
“I did not defraud anyone, I did not smuggle money abroad, I did not establish or manage a criminal organization,” he said with both frustration and sincerity in his voice. “I started a company.” He recognized people got hurt. Then he began trying to make a case that prosecutors (and the media) had simply, mistakenly, criminalized a business failure.
He mentioned a litany of those supposed problems: getting hacked, an “atomic bomb” of Dogecoin panic buying and selling that drained Thodex’s funds after the central bank announced its drastic curtailing of crypto. “The day I bought my ticket to go to Albania, most of the Dogecoin withdrawal requests could no longer be met,” he said. In his retelling, Özer arrived at the conclusion that the company itself was worth more than the funds in its wallet, so he saw only one way out: selling it. He started, he said, shopping it around in Istanbul, Italy, and the Balkans. He eventually set up meetings with several potential buyers in Albania. He didn’t give their names. Özer showed the courtroom a news clip with the widely circulated headline that he had fled with $2 billion and defrauded 400,000 people. “As soon as this news started to appear, both investors were off the table … I had no other chance to cover the losses of the stolen cryptocurrencies.” He pointed out that the indictment estimated the damages were closer to $43 million and the number of official claimants against him totaled 2,027 people.
Then his testimony took a Shakespearean turn. “This was also done with the aim of killing me or having me killed,” he said without flinching. “To announce to the world that a 27-year-old man with $2 billion in his pocket is alone in a country with high crime rates like Albania.” That, coupled with a red notice from Interpol on his back, and his face on wanted posters around Albania, made him fear for his life. So, he said, he bought a tent and took a taxi to the southern Albanian coastline. He had hoped to ride out the nightmare camping alone. “I needed time for the truth to emerge,” he told the room.
ILLUSTRATION: PRINCESS HIDIR
He told the court that he grew his beard down to his clavicle, shaved his head. He said that when he learned about the prosecutor’s indictment—that his brother and sister were charged with fraud, that they would stand trial in a month, and that without Özer they would most likely take the blame for Thodex’s fall and spend the rest of their lives in prison—he had a wild idea: If every claimant were paid back, did a crime ever really happen? He did, in fact, have the Thodex cold wallet on him, he told the judges, though he claims to not remember how much was in it. He asked Erarslan to help him pay back the roughly 2,000 plaintiffs who had lost their money.
And they did, in part. In total, while on the run, he paid approximately 185 million lira ($10 million at the time) to more than 1,000 claimants. As Özer tells it, when the cold wallet was empty, he threw it into the Ionian Sea.
When he addressed his use of other people’s accounts to trade crypto—an action at the center of the case—he started to sound defiant and a little condescending: “Startup founders take all responsibilities, as the nature of startups requires,” he said. He underscored that they had no authority in the company and no access to these accounts. “There is no lawlessness or irregularity. Moreover, I am neither the first nor the last nor the only person to arbitrage the cryptocurrency market.”
Near the end of his address, Özer’s frustrations seemed to turn to bitterness and hubris. He faced the judges and said it was “absurd to think that the IQ level of the person who made such a stupid escape plan” was the same as that of a criminal mastermind allegedly capable of deceiving Turkish financial regulators for four years. “I am smart enough to lead any institution on earth,” Özer said. Then he had Erarslan pull up an image of a cartoon mocking the court. Visibly annoyed, the chief judge ordered him to remove it.
The verdict came quietly on a balmy Thursday in September 2023 to an almost empty courtroom. Özer stood and solemnly read the lyrics from a Turkish folk song, “The End of the Road Is Visible.”
The chief judge handed Güven, Serap, and Özer the same sentence: 11,196 years in prison—for establishing and managing a criminal organization and laundering assets. Most of the other defendants were released. It was the longest sentence in Turkey’s history, handed out the month before the Republic’s centennial.
Faruk Fatih Özer became a poster child of crypto crimes, but he also became an accidental representation of a particular economic era—and the lengths people will go through to flee it. To the Turkish regime, he was not so much an opponent as an unfortunate product of flawed economic policies. In that light, the draconian sentence is punishment not only for a crime but also for shining a spotlight on decades of embarrassing failures, ones that were made clear to the entire country the day that Özer disappeared.
So perhaps it’s no surprise that Turkey remains a haven for cryptocurrencies. In the year after Thodex went bust, inflation in the country hit a 24-year high of 85.5 percent. Prices for goods nearly doubled—and so did the percentage of Turks who owned bitcoin, ether, and other currencies. In terms of trade volume, the country ranks fourth globally, behind the US, the UK, and India. After decades of watching their currency devalue, their businesses and nest eggs get scrambled, the Turkish people aren’t going to pass up the dream so easily. Earlier this year, the country’s finance minister said the government was working to finalize new regulations on crypto, “to make this field safer and to eliminate possible risks.” So although Özer picked a fight with an authoritarian regime and lost—whether because he believed too fully in the gospel of decentralization, because he was a naive kid, because he was a cynical hustler, or some combination of all three—the flames of economic revolution that he helped fan aren’t going out anytime soon.
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TheIdea – The Innovation Agency 