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Huawei says US ban will cost it $30B in lost revenue

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Following a string of trade restrictions from the U.S., China’s telecoms equipment and smartphone maker Huawei expects its revenues to drop $30 billion below forecast over the next two years, founder and chief executive Ren Zhengfei said Monday during a panel discussion at the company’s Shenzhen headquarters.

Huawei’s production will slow down in the next two years while revenues will hover around $100 billion this and next year, according to the executive. The firm’s overseas smartphone shipment is tipped to drop 40%, he said, confirming an earlier report from Bloomberg.

That said, Ren assured that Huawei’s output will be “rejuvenated” by the year 2021 after a period of adjustment.

Huawei’s challenges are multifaceted as the U.S. “entity list” bars it from procuring from American chip makers and using certain Android services, among a list of other restrictions. In response, the Chinese behemoth recently announced it has been preparing for years its own backup chips and an alternative smartphone operating system.

“We didn’t expect the U.S. to attack Huawei with such intense and determined effort. We are not only banned from providing targeted components but also from joining a lot of international organizations, collaborating with many universities, using anything with American components or even connecting to networks that use American parts,” said Ren at the panel.

The founder said these adverse circumstances, though greater than what he expected, would not prevent the company from making strides. “We are like a damaged plane that protected only its heart and fuel tank but not its appendages. Huawei will get tested by the adjustment period and through time. We will grow stronger as we make this step.”

“Heroes in any times go through great challenges,” reads a placard left on a table at a Huawei campus cafe, featuring the image of a damaged World War II aircraft (Photo: TechCrunch)

That image of the beaten aircraft holding out during hard times is sticking to employees’ minds through little motivational placards distributed across the Huawei campus. TechCrunch was among a small group of journalists who spoke to Huawei staff about the current U.S.-China situation, and many of them shared Ren’s upbeat, resilient attitude.

“I’m very confident about the current situation,” said an employee who has been working at Huawei for five years and who couldn’t reveal his name as he wasn’t authorized to speak to the press. “And my confidence stems from the way our boss understands and anticipates the future.”

More collaboration

Although 74-year-old Ren had kept a quiet profile ever since founding Huawei, he has recently appeared more in front of media as his company is thrown under growing scrutiny from the west. That includes efforts like the Monday panel, which was dubbed “A Coffee With Ren” and known to be Ren’s first such fireside chat.

Speaking alongside George Gilder, an American writer and speaker on technology, and Nicholas Negroponte, co-founder of the MIT Media Lab, Ren said he believed in a more collaborative and open economy, which can result in greater mutual gains between countries.

“The west was the first to bring up the concept of economic globalization. It’s the right move. But there will be big waves rising from the process, and we must handle them with correct rather than radical measures,” said Ren.

“It’s the U.S. that will suffer from any effort to decouple,” argued Gilder. “I believe that we have a wonderful entrepreneurial energy, wonderful creativity and wonderful technology, but it’s always thrived with collaboration with other countries.”

“The U.S. is making a terrible mistake, first of all, picking on a company,” snapped Negroponte. “I come from a world where the interest isn’t so much about the trade, commerce or stock. We value knowledge and we want to build on the people before us. The only way this works is that people are open at the beginning… It’s not a competitive world in the early stages of science. [The world] benefits from collaboration.”

“This is an age for win-win games,” said one of the anonymous employees TechCrunch spoke to. He drew the example of network operator China Mobile, which recently announced to buy not just from Huawei but also from non-Chinese suppliers Nokia and Ericsson after it secured one of the first commercial licenses to deploy 5G networks in the country.

“I think the most important thing is that we focus on our work,” said Ocean Sun, who is tasked with integrating network services for Huawei clients. He argued that as employees, their job is to “be professional and provide the best solutions” to customers.

“I think the commercial war between China and the U.S. damages both,” suggested Zheng Xining, an engineer working on Huawei’s network services for Switzerland. “Donald Trump should think twice [about his decisions].”

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ChatGPT sets record for fastest-growing user base in history, report says

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Enlarge / A realistic artist’s depiction of an encounter with ChatGPT Plus.

Benj Edwards / Ars Technica / OpenAI

On Wednesday, Reuters reported that AI bot ChatGPT reached an estimated 100 million active monthly users last month, a mere two months from launch, making it the “fastest-growing consumer application in history,” according to a UBS investment bank research note. In comparison, TikTok took nine months to reach 100 million monthly users, and Instagram about 2.5 years, according to UBS researcher Lloyd Walmsley.

“In 20 years following the Internet space, we cannot recall a faster ramp in a consumer internet app,” Reuters quotes Walmsley as writing in the UBS note.

Reuters says the UBS data comes from analytics firm Similar Web, which states that around 13 million unique visitors used ChatGPT every day in January, doubling the number of users in December.

ChatGPT is a conversational large language model (LLM) that can discuss almost any topic at an almost human level. It reads context and answers questions easily, though sometimes not accurately (improving its accuracy is a work in progress). After launching as a free public beta on November 30, the GPT-3 powered AI bot has inspired awe, wonder, and fear in education, computer security, and finance. It’s shaken up the tech industry, prompting a $10 billion investment from Microsoft and causing Google to see its life flash before its eyes.

Also on Wednesday, OpenAI announced ChatGPT Plus, a $20 per month subscription service that will offer users faster response times, preferential access to ChatGPT during peak times, and priority access to new features. It’s an attempt to keep up with the intense demand for ChatGPT that has often seen the site deny users due to overwhelming activity.

Over the past few decades, researchers have noticed that technology adoption rates are quickening, with inventions such as the telephone, television, and the Internet taking shorter periods of time to reach massive numbers of users. Will generative AI tools be next on that list? With the kind of trajectory shown by ChatGPT, it’s entirely possible.

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Netflix stirs fears by using AI-assisted background art in short anime film

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Enlarge / A still image from the short film Dog and Boy,, which uses image synthesis to help generate background artwork.

Netflix

Over the past year, generative AI has kicked off a wave of existential dread over potential machine-fueled job loss not seen since the advent of the industrial revolution. On Tuesday, Netflix reinvigorated that fear when it debuted a short film called Dog and Boy that utilizes AI image synthesis to help generate its background artwork.

Directed by Ryotaro Makihara, the three-minute animated short follows the story of a boy and his robotic dog through cheerful times, although the story soon takes a dramatic turn toward the post-apocalyptic. Along the way, it includes lush backgrounds apparently created as a collaboration between man and machine, credited to “AI (+Human)” in the end credit sequence.

In the announcement tweet, Netflix cited an industry labor shortage as the reason for using the image synthesis technology:

As an experimental effort to help the anime industry, which has a labor shortage, we used image generation technology for the background images of all three-minute video cuts!

Netflix and the production company WIT Studio tapped Japanese AI firm Rinna for assistance with generating the images. They did not announce exactly what type of technology Rinna used to generate the artwork, but the process looks similar to a Stable Diffusion-powered “img2img” process than can take an image and transform it based on a written prompt.

The film is currently available to view for free on YouTube.

Netflix’s official Dog and Boy promotional video.

Almost immediately, Twitter users responded with a torrent of negative replies to Netflix’s tweet announcing the film, such as, “I know a ton of animators looking for work if you guys are struggling to find them (are you looking very hard?).” Several others quoted legendary Studio Ghibli animator Hayao Miyazaki as saying that AI-powered art “is an insult to life itself.”

In a news release, Netflix expressed its hopes that the new technology would assist with future animation productions (translated by Google Translate): “As a studio, Netflix focuses on supporting creators in the creation of works on a daily basis. As the shortage of human resources in the animation industry is seen as an issue, we hope that this initiative will contribute to the realization of a flexible animation production process through appropriate support for creators using the latest technology.”

It also looks like Makihara also wanted to push boundaries in animation by using AI technology as part of the production process. The Netflix release quoted him as saying, “By combining tools and hand-drawn techniques, we can create something unique to humans … I think that the core of the story is ‘drawing a human being.’ I think that it will be possible to secure and return to its roots, which will eventually strengthen the strengths of Japanese animation and expand its possibilities.”

Labor shortage or not, AI assistance may possibly speed up production times and lower production costs, allowing the creation of more animated content than ever before. But will people be happy about it? That remains to be seen.

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Up to 29,000 unpatched QNAP storage devices are sitting ducks to ransomware

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As many as 29,000 network storage devices manufactured by Taiwan-based QNAP are vulnerable to hacks that are easy to carry out and give unauthenticated users on the Internet complete control, a security firm has warned.

The vulnerability, which carries a severity rating of 9.8 out of a possible 10, came to light on Monday, when QNAP issued a patch and urged users to install it. Tracked as CVE-2022-27596, the vulnerability makes it possible for remote hackers to perform a SQL injection, a type of attack that targets web applications that use the Structured Query Language. SQL injection vulnerabilities are exploited by entering specially crafted characters or scripts into the search fields, login fields, or URLs of a buggy website. The injections allow for the modifying, stealing, or deleting of data or the gaining of administrative control over the systems running the vulnerable apps.

QNAP’s advisory on Monday said that network-attached storage devices running QTS versions before 5.0.1.2234 and QuTS Hero versions prior to h5.0.1.2248 were vulnerable. The post also provided instructions for updating to the patched versions.

On Tuesday, security firm Censys reported that data collected from network scan searches showed that as many as 29,000 QNAP devices may not have been patched against CVE-2022-27596. Researchers found that of the 30,520 Internet-connected devices showing what version they were running, only 557, or about 2 percent, were patched. In all, Censys said it detected 67,415 QNAP devices. The 29,000 figure was estimated by applying the 2 percent patch rate to the total number of devices.

“Given that the Deadbolt ransomware is geared to target QNAP NAS devices specifically, it’s very likely that if an exploit is made public, the same criminals will use it to spread the same ransomware again,” Censys researchers wrote. “If the exploit is published and weaponized, it could spell trouble to thousands of QNAP users.”

In an email, a Censys representative said that as of Wednesday, researchers found 30,475 QNAP devices that showed their version numbers (45 fewer than on Tuesday), and that of those, 29,923 are running versions that are vulnerable to CVE-2022-27596.

The mention of Deadbolt refers to a series of hack campaigns over the past year that exploited earlier vulnerabilities in QNAP devices to infect them with ransomware that uses that name. One of the most recent campaign waves occurred in September and exploited CVE-2022-27593, a vulnerability in devices that use a proprietary feature known as Photo Station. The vulnerability was classified as an Externally Controlled Reference to a Resource in Another Sphere.

Tuesday’s Censys report said that devices vulnerable to CVE-2022-27596 were most common in the US, followed by Italy and Taiwan.

Censys also provided the following breakdown:

Country Total Hosts Non-Vulnerable Hosts Vulnerable Hosts
United States 3,271 122 3,149
Italy 3,239 39 3,200
Taiwan 1,951 9 1,942
Germany 1,901 20 1,881
Japan 1,748 34 1,714
France 1,527 69 1,458
Hong Kong 1,425 3 1,422
South Korea 1,313 2 1,311
United Kingdom 1,167 10 1,157
Poland 1,001 17 984

In the past, QNAP has also recommended that users follow all of these steps to lower the chances of getting hacked:

  1. Disable the port forwarding function on the router.
  2. Set up myQNAPcloud on the NAS to enable secure remote access and prevent exposure to the Internet.
  3. Update the NAS firmware to the latest version.
  4. Update all applications on the NAS to their latest versions.
  5. Apply strong passwords for all user accounts on the NAS.
  6. Take snapshots and back up regularly to protect your data.

As reported by Bleeping Computer, QNAP devices over the years have been successfully hacked and infected with other ransomware strains, including Muhstik, eCh0raix/QNAPCrypt, QSnatch, Agelocker, Qlocker, DeadBolt, and Checkmate. Users of these devices should take action now.

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