LockBitSupp Revealed? + The Cheyenne Supercomputer Gets Sold For Parts + FTX Gives a Bunch of Money Back

Speaker 1: Scott, what's the worst piece of tech depreciation you have ever personally experienced?

Speaker 2: Oh my god. Great question.

Speaker 1: Like, you bought a Nintendo GameCube for a $199, but by the time you went to sell it at the GameStop at the mall, the guy would only give you $75 in store credit.

Speaker 2: I feel like game consoles oddly retain value.

Speaker 1: Not at GameStop, they don't.

Speaker 2: Not at GameStop, they don't. But but if you keep if you keep them for long enough

Speaker 1: If you hold on.

Speaker 2: If you hold on. Let me think. Biggest piece of tech depreciation. And you really should have queued that question to me before so I had an answer to this because I don't I can't think of one.

Speaker 1: I gotta Keep you on your toes, my my dude.

Speaker 2: I gotta think, like, laptops just because, like, they get they have reached such a pinnacle of pricing. Like, I remember there was that whole period where, like, laptops were super expensive, and then laptops became, like, free like paper. And then or not paper, but, like, you know what I mean. Like, they got really cheap. Like, you're buying Mac laptops for, like, a thousand dollars or less. And now they're back to the thing where it's like, oh, I might get a new laptop. And I go to the Apple Store, and I, like, look at it, and I price out what I'd won. It's, like, $5,400. And I'm like, what the hell happened? And then they depreciate

Speaker 1: And you'll sell it for half that. Yeah.

Speaker 2: And within, like, two years, you're at half that. Like, within four or five years, they're essentially not usable. Like, you and I both had Intel based MacBooks, the previous MacBook Pros. And, like, I didn't even really wanna sell that thing because it's

Speaker 1: I know.

Speaker 2: It's such a problematic piece of technology. Like, it just overheats, and it it spasms out, and it's just not great. So it's like I I wouldn't like, I've had friends be like, should I buy this? It's a really good deal. I'm like, absolutely not.

Speaker 1: I wouldn't. Yeah. I took a real shit kicking on that computer too.

Speaker 2: Yeah.

Speaker 1: But luckily for both of us, the Cheyenne supercomputer has both of us beat. Built in 2016 and used for years to run, like, climate prediction models and weather forecasting Mhmm. It was made up of 8,000 Intel Xeon E5 2,697 v four processors, cost an estimated $25,000,000 to build, and recently sold at auction off for parts for about $400,000 Wow. Tech depreciation is real, and it is coming for our supercomputers, and I wanna talk about it.

Speaker 2: The the the fact that I had 313 terabytes of DDR four twenty four hundred RAM is, like, pretty impressive. But, like, could you imagine if you were, like, a cybersecurity firm, you could buy this for a half $1,000,000. Granted, it probably costs a half $1,000,000 in energy per year to to run it, given the amount of chips that are in it. But you could you could set up the world's most amazing password cracking service. Like, you would just throw a hash in, and it would 313 terabytes. Like, the imagine the size of dictionary that you could hold an immediate access RAM. You could

Speaker 1: You're just giving away good ideas here on three right now. Man, I

Speaker 2: love this. I I love the idea of imagine there was just a software as a service, you know, run out of some country that doesn't have a lot of laws about this stuff, where you could just, like, throw a password file into it or a hacked database and just be like, crack these codes. Here's the salt. Hit go, and, like, two minutes later, you have, like, 14,000 results. I wonder how many computations per second this thing was capable of.

Speaker 1: Speaking of, software as a service and cyber for cyber criminals in different parts of the world, on this chatty chat episode of Hacked, we're talking about the Cheyenne supercomputer. We're also talking about LockBit and the true identity of its creator behind this, like, $500,000,000 crime spree having been revealed. We gotta talk about that. I also wanna talk about the fact that you're finally gonna get your money back, Scott.

Speaker 2: I don't know.

Speaker 1: Because FTX is returning what they say is 98% of people's money. Well, I

Speaker 2: think they're actually returning a 113% of people's money to 98% of the people, I think, is what I read.

Speaker 1: That sounds more accurate.

Speaker 2: Some weird calculation where you're getting where you're getting more back than you lost given gains, and but that's only applying to 98% of the creditors, which I'm not sure why that is, but I'm sure there's a perfectly good reason for it.

Speaker 1: Yeah. In the intervening years, the value of those assets would have gone up, and that is not what they're paying back. It's very interesting. We got a lot to cover in this one. A massive rap battle turns into a story about AI, and word is out, AI gadgets like Rabbit and Humane Pin are, yes, no, I'm reading this right, not very good. You've got a lot to talk about.

Speaker 2: All that and more

Speaker 1: in this very chatty episode of Hacked.

Speaker 2: Welcome back. I'm bringing

Speaker 1: I'm bringing manic newscaster. This is my new, personality in broadcast is, like, newscaster pacing, but with none of the professionalism.

Speaker 2: I love it. I love it. I don't think I've had ever had any professionalism, so I think we'll balance each other perfectly.

Speaker 1: I don't know that I'm increasing it. It's gonna be much more dramatic storytelling, and now it's just, like, guy frantically running down the road shouting about cybercrime. But you gotta evolve. You gotta grow. You know?

Speaker 2: I think the first thing we should do is given the responses to the last episode, the Hotline Hacked episode Yeah. I think we just gotta give a plug to Hotline Hacked. Hotlinehacked.com. If you've got cool stories that you wanna throw at us that we might make into a podcast, fire it up. Hotlinehacked.com.

Speaker 1: Yeah. Those are incredibly fun to make. And since we dropped that's I think since we dropped the first one, more people realized it's a real thing. We will talk about the stuff. And so they submitted more stories, and the stories are just getting more and more interesting. The backlog of great stuff we have to talk about, Tonks goes, I'm looking at you, like, it keeps getting bigger and bigger. It's very exciting, and it's a lot of fun to talk about these stories. So keep it up. Hotlinehack.com.

Speaker 2: The next plug, I think, is an obvious one given our great sponsor Shopify. We should plug our store, store.hackpodcast.com. We recently added a crewneck and a children's shirt as per request from the patrons. So please, if you feel the need, and if you don't, whatever, check it out store.hackpodcast.com. Might be something there you wanna grab.

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Speaker 2: You can now get a crew neck sweatshirt. It's gonna hit right. Which I think Jordan and I are both gonna get.

Speaker 1: Yes. I am very excited for that.

Speaker 2: Next up, I think, you know, given those requests from the patrons, we should give a little shout out to our patrons. You know, if you wanna join our Patreon, we'd love it, but you don't have to. But if you do, we'd love it. Hackpodcast.com redirects to our Patreon. The we've got a bunch of new patrons.

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Speaker 1: We we keep making this show because people keep listening and keep commenting and keep just showing their support. It means a lot to us. If you wanna show your support too, you can go on hackpodcast.com, redirects to our Patreon. We we got the merch. We got the we got all the different things. Support us however you would like to. Tell someone about the show. Like, subscribe, leave a comment, whatever you can do. It means the world. Let's get into it, man. Let's let's get into some stories.

Speaker 2: The the while we're just talking about things you do to support the show, I think the I went into our reviews the other day. There's some pretty interesting ones, some very off base ones, like people with no context just complaining about the show, but then there's a bunch of really amazing ones, and I want to focus on the amazing ones, and I think that, if you have time, we'd love it if you could give us a review on one of the main, main podcast networks. That'd be great for us. So appreciate that.

Speaker 1: It has a huge impact. It helps the show a lot. We wanna keep it growing, and we wanna be able to spend time responding to your calls and bullshitting about weird text stories, but also doing more in-depth stuff and interviewing people and just taking it as far as we can. So Totally. A little bit counts.

Speaker 2: So where do we where do we wanna start? I I kinda feel a

Speaker 1: great question.

Speaker 2: Like, your final tidbit there about the humane pin and the rabbit, is a great place to start.

Speaker 1: Yeah. I mean, I don't really have a ton prepared about that. That was more of just sort of a drive by shots fired type situation. Caught astray. It feels like half the Internet is just following Marques Brownlee as he assassinates companies Mhmm. For not being very good, which isn't really an influencer taking down a bad company. It's a bad company getting revealed as such, which does not say either of those are bad companies, just that first generation AI products, have a very weird question to answer, which is why aren't they just apps on my phone?

Speaker 2: Mhmm. Well, it turns out they are actually just apps on your phone. The the I know the rabbit came out that it's literally just an APK installed on an embedded Android device, which, you know, in reality, like, Jordan and I had this conversation offline when this got released. And I was like, it makes total sense. Like, you know, getting a small piece of hardware built that runs an embedded version of Android that comes with the development environment and, you know, all of the infrastructure that comes along with being an Android device. It's like it would be you'd be hard pressed to want to build a device now that's not based off of something like an Android OS because just it just comes with so much stuff for free. Like, why wouldn't you do it? So it no surprise to me, but they literally could just be apps on your phone.

Speaker 1: But the interesting thing to me is, you know, you talk about all that utility that's just already built into Android. Why would you start from scratch? The thing I find fascinating about, I think it's specifically the rabbit, is that by building this sort of I think they call it the large action model, and it's essentially meant to be a a a a an AI model that's capable of interacting with websites on your behalf, is that by mediating the entire computing experience through that model, through that voice chat, they've actually removed a bunch of the stuff that Android can do built in. Mhmm. Android knows your GPS location. It can figure out what time it is where you are. It can figure out out how far away you are from something based on that. And this this LAM, interface that they've cooked up doesn't seem to be capable of interacting with any of that stuff on the Android back end. So you you are using a device that knows where you are, but will not tell you where you are, that knows what time it is where you are, but may not get that very basic utility correct. It's this weird transitional state where, like, we we know that being able to talk to these assistants and have them do more of your computing for you is probably where this AI thing goes. Is the computer getting better at talking back to you? Mhmm. But before we can get to that, we have to remove a bunch of the utility that's there and catch back on.

Speaker 2: Well, the the humane pin is the one that has the weird little projector. Right? That's the one that projects onto your hand. Yeah. Is that right? Yeah. That's right. Yeah. It's like I don't like, neither of these products, when I saw them released, spoke to me at all. Like, I'm the guy who doesn't like smartwatches. I don't want more notifications in my life. I don't want an AI assistant clip to my thing that I have to project onto my hand basic pixelated data. Like, I have a phone. I'm happy with my handheld supercomputer network connected supercomputer. Mhmm. So I I I'm not the market for these, but I think that they've been an interesting run-in industrial design. Like, I think there's a really

Speaker 1: Oh, heck. Yeah.

Speaker 2: Interesting

Speaker 1: They're cool looking.

Speaker 2: Element of, like, what could some of these things look like? And, you know, teenage engineering, I know, did rabbit. Right? And it's, like, you know, kinda groups that I've been aware of and followed for a long time, and they're kind of, like, dipping into this new tech world. You know, they've gone from synthesizers to to AI assistants, and it's I think this is gonna be a really cool exercise for for industrial designers to look at how to make these things more usable and make them more functional. So I think there's that positive coming out of it.

Speaker 1: A 100%. The rabbit is cool looking. I'm not sure that it it seems to have a lot of basic, like, UI, UX type problems. It has a touchscreen that you can't touch. You you gotta use the little scroll wheel type thing, and it is on the right hand side of the device. So if you're left handed, you can kick rocks. But it's a cool looking device. Teenage engineering is great in industrial design. The humane pin is like a gorgeous little device. The clip on magnet on the back that holds it in place, it's all very cool. But the problem is both of them are they need to tell this story about how how they're what comes after the phone because otherwise, you can't raise the amount of capital necessary to get a product like this off the ground.

Speaker 2: Uh-huh. Which means if

Speaker 1: you make it an accessory for the phone, the the the whole thing falls apart, which sucks because these things wanna be phone accessories. If the humane AI pin was just a camera, a microphone, and a projector that connected to your phone, all the processing still happened on your phone, but you just had this little thing you could tap and interact with, honestly,

Speaker 2: would work pretty well. But but like I'll contrast it with why wouldn't I just get a pair of smart glasses at that point? Like those things are making large strides.

Speaker 1: Why indeed?

Speaker 2: And, like, you know, from Google Glass, like, I read I read an article the other day that was Google Glass was ahead of its time, and I agree with it. Like, now we're in that world where it's like, I wanna be looking at something. I want my phone to know what I'm looking at. I wanna be able to ask a question about what I'm looking at and my phone to tell me the answer. Whether it's

Speaker 1: Mhmm.

Speaker 2: AR into the glass or whether it's speaking it into my ear, like, those are the that's the little bridge that I think we're crossing to making these things truly connected functional devices. Like, if I'm like, hey. What kind of car is that? And it's like, that's a 1973 Lotus Blaux. Oh my god. Cool. Thanks.

Speaker 1: That's neat. Yeah. Cool. That's great. I, I'm not gonna steal this idea and present it as my own. It was the Verge, I think, who cooked this idea up, but it it's that it's starting to feel like earbuds might be the ultimate AI device. Because what that is is a device that lets you interact with your phone just by talking, lets you receive information just by listening, but without everyone else having to hear it because it's playing over a speaker, but it still relegates all of the processing, all of the computation to the device that is extremely mature and capable of running these models as well as a standalone device would. Like, to me, that ear pods, a pair of sunglasses, things that are already part of your life that you carry around for another reason already make way more sense to me than, like, what if you had another thing that's basically a phone, but that isn't your phone, but that runs a phone app that could run on your phone. I struggle to see the sales pitch except for we had teenage engineering do the ID, and it's very fun looking.

Speaker 2: Totally. Totally. I think I think there's gonna be you you know, I think we're in the the incremental evolution phase. We're trying to figure this stuff out. As the AM models get better, our interactions with them will get better, and I think that that's gonna be an exciting development for for mankind. I know I I'm not sure if you followed it, but Apple had their quarterly financial results the other day. Big big news if you're in finance. Not so big if you're not. They they did their iPad event, which is probably much more consumer side. But one of the big things that came out of their quarterly results and their other, investor phone call was that they're spending a ton of time and money on AI and on, like, creating an Apple ecosystem and integrating it within their devices, which is gonna be probably a huge change just given how much market share their devices hold, be it their their computers, iPads, iPhones. You know? Maybe it won't all be vision pros as that's kind of had a lukewarm response. But I think the but having somebody in a group that's as good with interaction as Apple is

Speaker 1: Mhmm.

Speaker 2: Taking this on is gonna be a big game changer.

Speaker 1: Dub Dub is gonna be real fascinating this year. I think it's gonna be fascinating for AI. It's gonna be fascinating for justifying why they sell a $3,000 iPad that is functionally a MacBook but is running a phone operating system. Like, there's just a lot of questions they need to answer. And I say this as a person like, I'm recording this on an Apple device right now. I love their stuff, but there's I'm very curious for Dub Dub this year. I think that's gonna have a a that should have a bigger impact on, on their share price than a new iPad hardware announcement of it.

Speaker 2: The I I'm I'm and, like, we take a little digression here in the consumer electronics, but, like, the new iPad, the iPad Pro with an m four chip that you can't even get in a laptop.

Speaker 1: Pretty good.

Speaker 2: Even care what the price is,

Speaker 1: but here's the thing that bothers me

Speaker 2: is, like, where's the bothers me is like, where's the accessory Thunderbolt port? Because you've essentially made me a computer. Like it comes with a metal touchpad keyboard that you can buy as an accessory to make it into a functional laptop. And iOS is just a skin on, like, essentially a similar core Unix infrastructure as OS X. So why can't I toggle between laptop mode and tablet mode depending on what I'm doing? Like, you have the ability to do this, and I'm blown away that you can't. Yeah. Can't. I'm shocked by it.

Speaker 1: I think I mean, the reason the the previously obvious reason why that was the case has been complicated recently by antitrust cases in Europe. And the reason to keep that siloed is because the only software you could install on the iPad was software that you downloaded through the App Store, and that Mhmm. Offers a great deal of control, economic, and ecosystem to Apple about what is run on those devices. That's it's great for them. If everyone shifted over to buying those for Mac long term, it would be probably pretty good for Apple. The problem is that that control is starting to get eroded. We have laws in giant jurisdictions saying you have to be able to run other app stores. You have to be able to install your own stuff. And increasingly, the question of, like, well, why not then just let me run macOS on this thing? It's literally the new one is more powerful than my MacBook Pro. It has a better processor in it. Like, just let me run macOS on this. I could do my job on something like this. I would pick it up in a heartbeat, over a Macbook because it's a Macbook that comes apart and turns into an iPad. How cool is that? But until I can do that, it's it's kinda just a non starter for me.

Speaker 2: And you know the best thing in classic Apple fashion, do you know who's proved the business case for this device? Microsoft. The Microsoft Surface Pro the

Speaker 1: Surface tablets.

Speaker 2: Has been out forever, and people have totally adopted it, and people love their services. I think the services are great. You get the tablet, and you also get a laptop. When when this announcement came out, I was like, oh my god. This is gonna be great. Look at the how great these devices are. They've got a dockable keyboard that has a touchpad, which is a huge thing for me. Like, the second they put the touchpad on the keyboard, I was like, they made a laptop.

Speaker 1: Yeah.

Speaker 2: Like, it's now no longer a touch only device. And and I was like I I was trying to dig up photos in the early moments in the announcement to see the keyboard because I expected there to be USB ports on it, and there's only one which has charging pass through, and I was like, you've got to be kidding me. They've made essentially a $3,000 laptop that is also a tablet that has no extensibility really without a ton of dongles or plugging in a dock to it, And I was like, that's crazy. It's crazy to me. It's good. It's beautiful, but it's crazy.

Speaker 1: It's it's a gorgeous piece of hardware. It is the vision of the tiny MacBook with one USB port. It's Johnny I with two vision come back to life again. Curious to see where it goes. But the only way I'd be able to afford it is if I get my FTX money back, which transitions us nicely to the story, the continuing saga of FTX. I think we take it over there now. For anyone that doesn't know, it would be odd, but FTX was the third largest cryptocurrency exchange in the world when it filed for bankruptcy protection in it was twenty twenty two November after it experienced, basically the equivalent of a bank run, following some news about its CEO and, founder Sam Bankman Fried. He resigns when the exchange collapsed. In March, he's sentenced to a twenty five year, prison term for the massive fraud that occurred at the company. The whole thing fell apart. It became a a public symbol of, collapse of cryptocurrency and and greed in that industry, and it was recently announced that nearly all former customers of FTX will recover, almost 100 or more of their lost funds from the collapse of the exchange.

Speaker 2: Which is great news.

Speaker 1: Fantastic news. It's good. I for as much as we we sometimes dunk on elements of the cryptocurrency ecosystem, it's never good when, you know, investors get their shit stolen, and it's always good when they get their shit back. So I'm I'm very happy to hear about this.

Speaker 2: In, so I haven't done the review. We were trying to get another author of a different book on, still kind of pending. But, Going Infinite, Michael Lewis's book, one of the last chapters that really agitated the shit out of me truthfully is he kind of makes this case that, like, they're they're like, even though Sam Bankman Fried was spending clients' money, you know, taking money out of people's accounts and essentially investing it in other things, which is wildly unethical and deserving of a massive just, like, prison sentence, that, like, the money's kinda there in, like, made up tokens that they've manipulated the market value of and, like, investments in other companies. Like, they held up, I think, $500,000,000 in Anthropic, an AI company, Sam Bankman Fried at at Seedid. Anyway, there's this whole chapter where he kinda goes on about, like, well, you know, it's did he really commit that bigger crime? Like, the people's money could still be there in these tokens that they've made and and all these investments and stuff. And it's, like, well, he still committed the crime because he never had those that money to invest in the first place. So, yes. I'm just very glad that people are gonna get some of their stuff back. Like, as much as I don't love crypto, which you might have heard, I I don't I I don't like financial fraud way more, and I'm happy that, like, people that had big chunks of money tied up in this company are gonna see some of it.

Speaker 1: Yeah. That argument that lying to people is okay if it happens to all work out is I don't personally, believe that. I think that you're sort of just relying on luck at that point. Yep. It's looking like the total assets are gonna be returned are somewhere between 14 and a half and 16 and a half billion dollars. And as you said, it's where they get this money is a very fascinating question. NFTs to the rescue apparently, because there's still a lot of value in the company, tied up in some of in, like, crypto other crypto assets. Mhmm. Wind down cash proceeds. They're just they're selling it all off, and the plan was submitted and filings to the Delaware bankruptcy court. The CEO who was brought on to do this a lot of people have talked about this. It's a guy named John j Ray Third. Great name. He's the CEO and, chief restructuring officer, and he expressed this plan to, you know, return the full bankruptcy claim amount plus interest for non governmental creditors and, you know, try just trying to get as much money to people back, not including what would have been the growth in the assets had the money been there in the first place. He was appointed the new CEO. He's this longtime bankruptcy litigator, and his sort of claim to fame was he was known for having cleaned up the mess after the collapse of Enron. So it's a very, it's fascinating that he was the dude who was brought in.

Speaker 2: Well, I know the I think the anthropic investment alone, they sold for 884,000,000, I think. Oh. So that's gotta be, what, like, a 38, 40% return? Pretty good. They're pretty good. More than that. 500,000,008 to $8.88, be, like, 60 some percent.

Speaker 1: It's pretty pretty good.

Speaker 2: Pretty good.

Speaker 1: Yeah. Pretty good. Quote, we are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankers who claim amounts plus interest for nongovernmental creditors. It's an interesting situation. It's I would have loved I would love to know more about what that process was of trying to clean up a mess of this scale to try and find every single penny that's hidden under every single cushion of every single couch that this company has across a giant portfolio of companies and sub companies that was, I think, intentionally obfuscated by Sam Bankman Fried. This was not an easy company to understand. We have spent a lot of time time trying to understand it, and I would love to know, you know, what that journey to find that money looked like. But it's great news that it has been found.

Speaker 2: Well, the more you like, the more I dive into this story and the more the books that I've read, like Number Go Up by Zeke Fox, highly recommended. Hopefully, we'll see him on the pod soon. Great, great book. Goes through in detail a lot of the, like, the little pieces of it in the aftermath about just the chaos that was left because they were apparently worse at accounting than they were at not committing fraud. Sure. Which I'm sure there's very poor accounting records.

Speaker 1: Worse at accounting than not committing fraud. Yeah. Yeah.

Speaker 2: And then, like, the the it's a mess. Like, even the people that worked and ran the company didn't even know where the money was and what they held assets and investments in. There was no no organization to it, and I I can only imagine how much of a nightmare this has been for this group. Mhmm.

Speaker 1: So

Speaker 2: the fact that the fact that they found enough to get people back their initial investments and a bit more is amazing. Mhmm. Happy happy to hear?

Speaker 1: Happy to hear. Well, it's not quite a a $15,000,000,000 I shouldn't call it a crime spree, but not quite $15,000,000,000 in damage, but it's probably worth talking about a little character called LockBitSup and a $500,000,000 hacking spree and a recent discovery.

Speaker 2: Tell me about this discovery.

Speaker 1: Let's pivot. Let's pit let's go over here for a little bit. So for a long time, there was this character on the Internet called LockBit Sub. He was the, essentially, the alleged operator behind the LockBit ransomware group. Uh-huh. Ransomware as a service, $500,000,000 hacking spree. A big character in the ransomware as a service ecosystem. And recently, law enforcement in The US, UK, and Australia have identified Russian national Dmitry Yurychev Koroshev as the alleged operator behind the group. They figured out who LockBit Supp is. It's a fascinating story. There's a task force named Operation Kronos led by UK's National Crime Agency that operated and infiltrated LockBit systems, made a bunch of arrests, c c servers, disrupted the group's activities. The thing I love about this is, this is just an aside, the law enforcement names for all of this are always like that. They're always like operation criminals. The Romulus Initiative. It's that kind of shit. Titan. Project Titan. And then the gang they're taking down is always like the bloop bloop boys. It's never not funny. It's always good. Like, the the hackers always have a very funny name, and then the task force that takes them down always sounds like it's like a Zack Snyder movie. It rules. I love it every time.

Speaker 2: You know what's not funny though? Is that the damage from this group is, like, in the billions.

Speaker 1: Oh, It's really bad. It's really bad. So yeah. And it's allegedly, the guy behind it, Koroshev, 31 years old, sanctioned by The US, UK, and Australia, faces a US indictment with 26 counts including conspiracy to commit fraud, extortion, and hacking with potential penalties totaling one hundred and eighty five years in prison. He's, he's a fascinating character. The group targeted a bunch of different entities, Boeing, Royal Mail. They often published stolen data if ransom ransoms weren't paid.

Speaker 2: Wasn't paid.

Speaker 1: Yeah. They've been operating this thing since 2019, and they licensed malware to affiliates who then carried out the attacks with LockBit retaining about 20% of the profits. So so they made some some real bank doing this.

Speaker 2: So so here here's a great pivot to us making bank is the US state department is giving a $10,000,000 reward for any information leading to the arrest. So retirement plan, Jordan, I think you you and I need to find have a doc the docuseries finding lock bits up and just get to it.

Speaker 1: We're gonna go to Russia, and you'll never hear from us again.

Speaker 2: Our new true yeah. Exactly. Our new true crime podcast Honestly coming soon.

Speaker 1: It's a pretty it is a pretty fascinating story. On the flip side of that, it's not the only direction that money was being paid. LockBitS UP has also offered bounties, like, essentially offering money for people to try and reveal who he is, bug bounties for flaws in LockBit's code. It's really funny that this ransomware as a service has offered bug bounties. I think he made an offer to pay anyone that got the LockBit logo tattooed on them with about 20 people participating. LockBit's stuff is like a character. He's not just Sure. The operator of this massive crime institute. It's like he's a he's an Internet personality. There's this long standing tension between Koroshev's private business like demeanor whenever he's been operating this and his more flamboyant, almost like supervillain y persona whenever he's speaking in public. He's just an interesting, interesting guy, and I'm curious to see what's gonna happen Yeah. With all of this.

Speaker 2: And and if you wanna find out too, tune in to our new show coming soon.

Speaker 1: The, the LockBit ransomware group after, Koroshev was arrested announced another they love contests. There's a whole thing about contests, and it's obviously, you know, trying to argue that Dimitri is not LockBit sup sup, and they're offering a thousand dollars if anyone can get a hold of Dimitri Koroshev to see if he's alive and well. Like, they're playing this weird, kinda chess game trying to see see maybe information, maybe misinformation. It's unclear, but, a bunch of government sure do seem to think that locked its up is Koroshev, and we're fascinated to see where it all goes on our new show. Our third show within a show within a show. Finding Koroshev. Hey. JB here from the future. After we recorded this, a little bit more news broke. The excellent show Click Here posted an episode with a short interview of who they claim is LockBitSub, saying, quote, the FBI got it wrong. The person in the interview claims he's not the guy law enforcement has gotten. He claims he is not Koroshev. This lock bits up claims he's still out there. We won't have had a chance to reach out to Click Here before this goes live to kinda find out about the reporting process, but I just wanted to include that because, hey, if you got eleven minutes, go check it out. Okay. Free plug for a different show done. Back back to our episode.

Speaker 2: So the, speaking of cybercrime Oh. In Jordan's home, British Columbia, Canada, there is a small, very well known regionally, but very regional operator called London Drugs. London

Speaker 1: Drugs.

Speaker 2: And they are they are a pretty amazing shop. I gotta say I have and still do love London Drugs. You can buy pretty much anything, Mac there. They have a whole Apple store inside of it pretty much, and a huge computer TV section where you can buy streaming devices, you can buy vinyl records, you can buy a new TV, you can get your prescription filled, you can buy candy that's been imported from other parts of the world. They kind of have everything.

Speaker 1: And that's why this episode is brought to you by London Drugs.

Speaker 2: It is can't stop You can't stop rebooting my love for London Drugs.

Speaker 1: I just can't say enough good things about these companies.

Speaker 2: Yeah. My life would be worse if line and drugs didn't exist.

Speaker 1: And briefly, it didn't. It is it is worth saying. Line and drugs is an odd grocery store because it that's what it is. It's like a it's a it's a pharmacy grocery store that also has, like, a photo department, and you can buy a PS five there. Like, it's just a it's an interesting store. It's a kind of buy everything store. And if you need

Speaker 2: barstools, they got those too.

Speaker 1: I bought some barstools there. I didn't really like them that much. I know

Speaker 2: you did.

Speaker 1: Actually true. And it was recently attacked. All 79 London drug stores across the country were shut for over a week, leaving customers with a pretty tough time accessing prescriptions and other medical needs. It's, the stores were closed. It was a fascinating thing. I went to one, stood outside staring in, trying to trying to get my my Meta Quest two or whatever piece of consumer electronics I needed to purchase alongside my my oat milk, and, they wouldn't let you in. Couldn't get inside because they've been shut down by a ransomware attack.

Speaker 2: Yeah. So their contingency plan from well, was it ransomware? Did they come on and say it was ransomware?

Speaker 1: Oh, I thought it was ransomware. It might not be.

Speaker 2: No. I don't think so. They and they've released very little details as to what it was. I think it was a breach. Like, a full blown breach is is the best I know. So the because it is a pharmacy, they have people's personal information and medical records and things like that. And their contingency was that when they realized the breach, they literally took the entire store, 79 locations offline, locked the doors, and put signs on the thing, on the front door being like, sorry. We have been the victim of a cybercrime, and we are currently investigating. And until further notice, we are closed. So they were shut for what? Like, easily a week. I don't know the exact number.

Speaker 1: I think it was around a week. I don't know if it was eight days, seven days, nine days. But for about a week, you couldn't I I know. I I shop at a London Drugs. It was closed. It was yeah. It's a fascinating there there's a win and a loss here. It's like, on one hand, I I actually think the idea of, like, unplug the stores is is probably kind of a good idea depending on the level of the breach, like, to just literally say we're not trying to cover this up. We're we're willing to acknowledge something very, very bad has happened here, and we're shutting down the stores. That, to me, is kind of a win. I think the amount to which they have communicated about this is a little bit more of a loss because if you go digging, around incredibly niche cybercrime in Canada communities, the speculation is just frantic. And I think a lot of people just seeing basic news coverage about it are quite worried about what was or wasn't, released, acquired by these hackers, however you wanna think about it.

Speaker 2: I know they've come out and said that there's been no evidence that customer data was taken. I think that was their big control point as they wanted to make sure that, like, if there was a breach and customer information was touched, that they didn't acquire more customer information. Like, they I don't know. I'm pretty sure that's probably a big part of the the shutdown was they literally pulled the plug and said, let's see how bad this was. Yeah. And then once they had it open so they've reopened. I was in one the other day. They're on they don't have all of their systems back online. So I was chatting with the the one of the people at the till, and they were like, yeah, we're still we're operating, but we're kind of not. Like, there's still lots of their data systems were still, you know, removed, and they weren't able to access them.

Speaker 1: So I

Speaker 2: think they're still doing forensics on this and trying to figure out exactly what has happened. So I can understand a bit of their locked lips because I still think they're probably trying to figure out what had happened.

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Speaker 2: And we're back.

Speaker 1: And we're back. Where to now? We've been following this is very brief. I don't think we I I wanna get to the Cheyenne compute supercomputer before we before we go, but I'm not sure if you've been following the, emerging conflicts between two of our great cultural institutions, Kendrick Lamar and Drake. But that story briefly touched on AI and copyright, two things that we really like to talk about on this show, when Drake released a track called Taylor Made Freestyle that featured an AI generated voice mimicking the late rapper Tupac. You follow this?

Speaker 2: I did. I did. It was hard to hard to ignore. Hard to ignore. Hard

Speaker 1: to miss. It was hard to miss.

Speaker 2: Especially with the recent shooting at Drake's house in Toronto. It's it's Yeah. It's making real news now.

Speaker 1: It's making real, real news. It was, yeah, it's a it's a rap battle from a from a bygone age. In the middle of this big back and forth, which we're not gonna get into. This is not a a pop culture music show, but two very famous musicians are having a rap battle. It accelerates. It gets very uncomfortable for everyone involved. But in the middle of it, Drake releases a song called Taylor Made Freestyle. It features this Tupac, you know, AI generated voice, and the Shakur estate issues a legal threat getting Drake to remove the track. The state's lawyer, Howard King, raises issues regarding personality rights and copyright infringement. And I just I wanted to talk about this because I I find it fascinating. There's two things at play here. There's personality rights. The a state controls the distinctive style and public likeness of Tupac, making unauthorized use straightforward to challenge. But But then there's also the copyright element of it, which is really fascinating in AI cases. It's more complex, and it involves Tupac's recordings and songs. And the main legal question here is the permissibility of using AI to replicate Tupac's style, which invariably involves copying from his original works.

Speaker 2: I mean

Speaker 1: In order to replicate Tupac's voice effectively, the AI must access and create copies of those recordings. This act itself could constitute copyright infringement, which, carries severe penalties of up to a 150, US a $150,000 US per work, which depending on the number of Tupac tracks were used to process and create the model could total significant amounts. Pretty big money on the line here, and it raises this really interesting question. Every time we get a new piece of technology, digital technology has to create copies of things to function, and that puts it at odds with copyright law. When we got VHS cassette tapes, we had to go through a court process of figuring out, you know, what's legal with this. Is it is creating a copy of the cassette tape legal? Is the cassette tape pushing it to the television kind of creating a copy? Like, it it's all ambiguous when we got computers. The exact same thing happened. Computers create copies of files all the time. It's all very blurry. What is and isn't an allowed use? And we're kinda going through that right now with AI. Trying to figure out, are these copies? Is it interpretations? What's going on here? And it was fascinating to see that come up in the context of a rap battle.

Speaker 2: The the thing that I also enjoyed about this is that Drake, I was gonna say the victim, but I don't know how else you'd describe it. But somebody had had had made a fake Drake song that got super popular. Yeah. Ghostwriter released heart on my sleeve, and, it was Drake in the weekend. And he was one of the first people to be, like, targeted by this use of technology and didn't like it very much and was pretty vocal about it on the Internet.

Speaker 1: Yeah.

Speaker 2: And now he's using it himself in a in a in a scrap with another rapper. I think it's

Speaker 1: I don't

Speaker 2: know. Circle goes around. It's interesting.

Speaker 1: Yeah. It's a really good point. I'd completely forgotten about that. That was one of the first big viral AI tracks with Drake, and I think you're right. He he wasn't too fond of it. I would That's interesting.

Speaker 2: I would say that I haven't heard any other viral AI tracks since that. Have you? Like, is there an AI?

Speaker 1: I listened to the TaylorMade freestyle one. I was kinda following this. It was happening over the weekend, and it it was we were hanging out with a a group of friends, one of whom also likes hip hop. And so her and I were talking about it quite a bit, so I was I I caught the the Drake track. Before we move on to, I think, probably the last thing that I wanna talk about, which is the story that we started the episode with. There's not a lot to it. It's just fascinating to me. It is the Cheyenne supercomputer, and, again, one of the gnarliest cases of tech depreciation I think I've ever heard. So the Cheyenne supercomputer was installed at the NCAR Wyoming Supercomputer Center during the second half of twenty sixteen. It was originally used for climate modeling, weather and climate research. It supported the National Science Foundation and other scientific endeavors across Wyoming and nationwide. It was like a big story when they built this. It was like a Heartland America supercomputer. Mhmm.

Speaker 2: And

Speaker 1: it was sort of bleeding edge at the time back in 2016. I've got the numbers up in front of me. 8,064 Intel Xeon e five two six nine seven v four processors, each with 18 cores and 36 threads at 2.3 gigahertz valued at about $50 each on time of recording on eBay. That's not what they cost when it was built, and a bunch of storage that was not included in the sale, and this massive massive supercomputer goes up for auction. The auction itself becomes a story. 27 bidders. It was covered at length by a bunch of different folks. Tom Hardware Tom's Hardware's coverage was really, really good. They were following it very closely, so that's who I was reading as it went. And it was sold off at auction for about $400,000. Reasonable. Reasonable. Reasonable. Yeah. I saw an estimate that, the potential resale value of the processors and RAM, which is what they bought, could reach about $700,000 if all of the components function properly. That is a big if. There were issues at the site. I think there was, like, water leakage and stuff. It's not totally clear how good a shape this is all in. But it is, like, the most extreme version of what are those shows where you buy an old storage locker and hope that there's, like, gold or silver?

Speaker 2: Storage Wars. Yeah.

Speaker 1: Yeah. It's, like, the most extreme version of Storage Wars I've ever seen where it's, like, we're gonna spend $400,000 because if the stuff inside this storage locker is good, we could get up to $700,000 for it.

Speaker 2: Like, you're but here's the other thing is, like, what kind of market is there? What kind of client demand is there for 8,064 antiquated processors?

Speaker 1: EBay.

Speaker 2: Like, sure, you could say that they're each worth x dollars, and you could $50. Talk about how you're gonna make money from this, but, like, actually finding a market. Like, I could understand somebody wanting to buy a budget supercomputer. Like, even though it's antiquated for today's date, the amount of sheer processing power it has to kind of rebuild with modern technology would probably still cost more than $480,000. So, like, you could at least buy a budget supercomputer. Like, if you were in the in the market for needing, I don't know, say, a massive password cracking device or a, you know, insert chess algorithm AI, you know, this is a pretty good deal. You know, takes you from zero to, you know, 75% for a reasonable amount of money. It's not 25,000,000.

Speaker 1: Yeah. It really reads like they're I don't get the sense they're gonna try and do anything with this. I get the sense they're gonna sell it off for parts. And part of what makes me think that is that part of the terms of the sale is that the buyer must handle the removal of Cheyenne's 30 server racks, which include 28 processing racks, two air cold management racks. They will receive no logistical support from the government, and the sale did not include Ethernet or optical cabling required for operation. It really feels like it's we just want this space back. So if you can get the shit out, we'll sell it to you for $400,000. Like, it really feels like it's like it is a scrap to us at this point. But you're right. It it one man's trash. You know? It you could probably do something pretty interesting with this.

Speaker 2: Yeah. Yeah. Like, I like, if each chip has 18 cores, that means that you have a 145,152 cores. And if each of those cores is capable of a thread, 32 threads, you'd have 258,048 threads,

Speaker 1: which is You did the math. A

Speaker 2: lot. Like, you know, I'm sitting here on

Speaker 1: a Sure.

Speaker 2: Yeah. I've got a big PC tower next to me, and it's got 32 threads. Like, imagine what 258,000 threads is like. Like, my I don't know. I I'm sad that they're disassembling it and scrapping it. I feel like there was

Speaker 1: Totally.

Speaker 2: There was a cool second home and second use there for, like, one of the world's big supercomputers.

Speaker 1: This is an aside. I was following recently a story about increased so we're gonna need a lot more servers. Like, AI is going to Of course.

Speaker 2: Yeah.

Speaker 1: For for however much we have, for however much we have

Speaker 2: disenergy demand. It is Yeah.

Speaker 1: It's gonna go through the freaking roof. And that alone is interesting because it is increasing demand on an already incredibly demanded product. We talked about this in the last hotline hacked. But the thing I find fascinating is a bunch of really big tech companies have suddenly started investing in nuclear energy projects Mhmm. Because of, like, just starting to do basic forecasting of, like, the sheer amount of energy that we are going to consume bringing this product to life. Getting this into everyone hands, it's going to consume an obscene obscene amount of money, and nuclear might be really the most immediate option for, you know, a renewable energy source that could provide the energy needed for AI.

Speaker 2: Yeah. The there's a whole investor prospectus about the stuff going on in the investment communities around data center growth and and what AI means to processing and how much power and more data centers we're gonna need. But a lot of the big tech companies and a lot of the governmental initiatives to reduce carbon output. You know, obviously Mhmm. In the past, power has equaled carbon. You know? You want more power, you make more carbon. So there's this massive undertakings to try and figure out, okay. We're if we're going in this direction where we're gonna, like, you know, stick goes up on the power use, how are we gonna fulfill that without making carbon? Same stick goes up. Like, we can't burn more coal. China is burning more coal. But, like, North America, I think, and a lot of the developed more developed countries, now that China is not developed, are are looking at ways to to really ramp this up. So, yeah, that doesn't surprise me at all.

Speaker 1: I think that they smell a PR crisis.

Speaker 2: Yeah.

Speaker 1: And it's that these tools at a certain point, the excitement about what they could become wears off, the growth slows, and it becomes a question of is what we're getting out of these tools worth the frankly catastrophic energy consumption levels that are required to do it. And I think that what they're trying to do is create a a little bit of a starting to build the case for no. No. No. We're not consuming energy that was going to we've we've got our own energy. We're making our own clean energy. You don't need to worry about it. We're not contributing to the problem. I'm not sure that on a global carbon footprint level, that argument holds water, but I think it is the argument that is attempting to be constructed, is that we're creating our own energy for this. I just I find it fascinating. It was quite the wrapped hole to go down. I am curious to hear more about the investor perspective side of it, though.

Speaker 2: Hey. You you say that about PR nightmare.

Speaker 1: Yeah.

Speaker 2: But here we sit, like, sixteen years in, and Bitcoin's still cruising along. Yeah. Turning power into the utility that Bitcoin brings to society.

Speaker 1: All that utility. I mean, if Bitcoin was that sucks too, I guess, is what I'm trying to say. You know, it's like, no. That one's bad as well. Like, I don't like that one at all. But, you know, Google doesn't own it. Right? Like, these massive publicly traded companies that do have to answer to someone at some point on some board or some shareholder. It's, and I I I'm I'm curious actually what the, global global emissions of crypto versus the global emissions of AI are at currently and the point at which those two lines intersect and one becomes greater than the other. I think that's actually now that you mentioned it, a really, really interesting question.

Speaker 2: Mhmm. A 2020 a 02/2022 non peer reviewed commentary published by Jolie estimated that Bitcoin mining resulted in an annual carbon emission of 65 MTs of c o two, representing approximately point 2% of global emissions.

Speaker 1: That was crypto?

Speaker 2: Which is comparable to the level of the emissions for the entire country of Greece. So yes. Wow. It was non peer reviewed, do remain.

Speaker 1: Grain of salt, but it is fascinating.

Speaker 2: Grain of salt.

Speaker 1: Yeah. That might be one worth digging into more on our third show within a show announced this episode. Carbon emissions of wacky tech ideas.

Speaker 2: Let's keep going down this, and I love this stuff. Let's talk about we haven't talked about crypto

Speaker 1: forever. Since since a good twenty five minutes ago.

Speaker 2: Bitcoin mining, a UN, report suggests that Bitcoin mining has admitted approximately 86 MTs of c o two during the twenty twenty to twenty twenty one period. So that is about that's 50% higher than the last number, give or take. 60 to 60 to 86. So, like, yeah. So a grease and a half? Grease and a half?

Speaker 1: Grease and a half. Yeah. Grease and a bit. You're gonna need to start building some nuclear reactors or people are gonna have a problem. And if you don't, we're all collectively going to continue having a very big problem. It's interesting. It's really fascinating.

Speaker 2: So as long as as long as AI produces more utility for society than crypto, I think people would be cool with it.

Speaker 1: Yeah. But if I could bully crypto companies into building nuclear reactors so they're not using the same energy, like, pulling from the same grid that I am, I would do that. If I thought I could, I would, but I don't think I can, so I'm a pivot. Go over here. Mhmm.

Speaker 2: Try to bully these people. Exactly. Well, the I think it's gonna be like, as we electrify the like, we're going way off topic now. But as we electrify the grid and the demands on the grid are becoming more and more so, you know Yeah. As we look to use electric heat. You know, you live in Vancouver, the home of the heat pump. And the as we go down that electrification thing and as we introduce more nonconsistent renewables to the grid, I think those data companies have to be looking at ways to make sure that their services are providing on a consistent basis because it just I think wind and solar and battery technologies is not where it needs to be for us to use it as an actual storage device for that scale. So there's a I think they have to. Like, nuclear seems like it's gonna be one of the only things that they can really truly get into that would check all the boxes as long as it doesn't, you know, cause greater harm.

Speaker 1: Yeah. I'm of the let a thousand flowers bloom approach when it comes to renew man, we're off topic. But when it comes to renewable energy, I don't. I'm I'm agnostic. If if you can produce a megawatt of energy with as little emissions as possible, go at it. You wanna do geothermal? Fantastic. You wanna do baseload nuclear? That's cool. You wanna rig up some crazy we push water up a mountain and let gravity bring it back down to turn turbines. Like, go for it. I think this is I think it's cool tech. I think it's necessary tech. I I say I say try it all.

Speaker 2: Totally. Totally. Just like just like, rabbit and the humane pin. Try it all.

Speaker 1: Try try it all. Maybe have teenage engineering design it. Yo. Teenage engineering solar panels for your house. Get on it. They would move some units.

Speaker 2: Could you imagine?

Speaker 1: They would move units.

Speaker 2: They would move none. They would be so like, listen. This is no criticism of Teenage Engineering. I love you. But your products are very expensive and built for a very boutique group of people.

Speaker 1: Yeah.

Speaker 2: Not not utility grade software. I'm looking to save money on my power bill or, like, you know, produce a little bit less carbon. And yet I see

Speaker 1: that little o p one synthesizer. There's an interesting overlap of people that love that company, and I I love the way their stuff looks. But and then people that love to spend compulsively large amounts of money on a weird thing that no one really needs, but, god, you just wanna have it sitting on the shelf. Yeah. Like, the o p one synthesizer of solar panels is not a good idea, but it might be a great idea.

Speaker 2: Just all these physical knobs and switches and, like, bright primary colors.

Speaker 1: Bright yellow. Like, you just someone need Hey.

Speaker 2: What does this do? You're like, I don't know.

Speaker 1: Need it. Why do I want it? Okay. I think that's it. I think we did.

Speaker 2: We're off the we're off the rails.

Speaker 1: Thanks for listening. Thanks to the for making it to the end. If you wanna share a cool story with us, go to hotlinehacked.com. If you wanna support the show, go to hackedpodcast.com, redirects to our Patreon. If neither of those things are really your speed nor is buying a hat, leave a rating. Tell someone about the show. It means the world to us. And thank you for listening to another episode of Hacked.

Speaker 2: Yeah. Appreciate it.