On the contrary, I appreciated this detail. It's difficult to come up with a plausible-sounding start up idea that doesn't sound like a joke. The lossless compression idea sounds plausible to the mainstream audience. For the hacker audience, it plays on a different level - it's a cue for us to get.
To be fair, perhaps it is lossless, but only for a subset of all possible data files. Like compressive sensing, which beats the Nyquist-Shannon limit, but only if conditions about sparsity are met.
In fact, the Nyquist-Shannon theorem itself is a kind of lossless compression. It says you can potentially throw away data without losing information.
I thought that at first too, but it would actually be a funny plot development if someone later points out that information theory dictates that the claims are impossible. Then the main character would receive more VC funding to pivot into a completely different but even more ridiculous idea.
It was deliberately ambiguous what they were building since it's more or less a MacGuffin but there was some talk of it allowing faster search over compressed content which, to me, sounds like plausibly valuable technology.
I haven't watched the show, but wasn't BWT a lossless compression with a smaller file size than anything else on the market? Or are they talking about comparing lossless to lossy?
Lossless compression of non-random data is very possible, though. Video and audio files are far from random, and I don't believe that lossless compression is "a solved problem" (even by the business standard) for those. (However, it is a bit far-fetched that someone would invent a groundbreaking new algorithm in the space for a silly website.) General lossless compression may not exist, but we're talking about highly patterned (low entropy) subspace of all possible files/bit-strings.
Lossless compression requires assumptions about the data, of course, because making some patterns shorter requires making others come out longer. Random data will, in general, get larger under a lossless compression algorithm.