Big Technology Podcast - AI Adoption Challenges, Waymo’s Big Expansion, Amazon hits $2 Trillion

Episode Date: June 28, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) Companies that bought AI services are struggling to make them work 2) Is an AI 'trough of disillusionment' coming? 3) Consultants are cashing in on the AI boom 4) Is consultants' heavy involvement in AI work good? 5) Examining Perplexity's IP issues more closely 6) Suno gets sued 7) Waymo's massive, underappreciated expansion in San Francisco 8) Waymo vs. Tesla - who wins? 9) Amazon hits a $2 trillion market cap 10) Amazon considers a Temu copycat 11) Amazon's reliance on China 11) Ranjan hits the Reddit frontpage and the fundamentals of his Doordash writing remain true. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [e-mail]

Companies that spent big on AI are struggling to get it working reliably. Consultants, meanwhile, are cashing in. Waymo is ditching its waitlist in San Francisco and opening up to everyone, and Amazon hits $2 trillion in market cap as it teases Atimu and Shia and competitor. All that more is coming up right after this. Welcome to Big Technology Podcast Friday edition, when we break down the news in our traditional cool-headed and nuanced fashion. We have such a good show for you today.

We're going to talk about the practical issues that companies are running into as they try to implement AI in their workplaces along with an important update on Robotaxi expansion and then this big moment for Amazon where it hits $2 trillion as almost nobody's actually thinking we're talking about it, but we will. All right, joining us all the way from Taiwan is Ron John Roy. Ron John, welcome back to the show. I'm in southern Taiwan. It's 97 degrees here, but thanks to the miracle of the modern internet, still able to do this podcast. Yeah, it's great to have you back. And we have a lot to talk about, including at the end of the show, a little bit about how one of your posts has gone viral again, hitting the top post on Reddit. But let's begin with this issue that companies are having with AI assistance, right? So this is from the Wall Street Journal. AI work assistants need a lot of handholding. It says artificial intelligence assistants were designed to provide businesses with a relatively easy avenue into the cutting edge technology. But it isn't quite turning out. way that a lot of people hoped, with chief information officers saying it requires a heavy

internal lift to get the full value of the pricey tools. And there's some incredible examples here. So one executive said that if she asked a question related to 2024 data, an AI tool might deliver answers based on 2023 data. At Cargill, the Wall Street Journal says an AI tool failed to correctly answer a straightforward question about who is on the company's executive team at Eli Lilly. The tool gave incorrect answers to questions about expense policies. Here's a great quote, I remain an AI optimist and I'm confident that we'll get there. It's just taking a little longer than perhaps we thought. So here's what's happening, right? We've said that the biggest amount of spend on AI is going to come, at least initially,

in the enterprise. And now enterprises have spent that money. And one of two things are happening, or maybe there's three outcomes that are happening. One outcome is they just have this AI money allocated and they don't know how to use it. Two is they are using AI. It's not working very well. Three is they're spending the money and it's working incredibly well, but we just don't hear often about those stories. So I'm curious if you think we're hitting, we're going to head right into the trough of disillusionment here because we are seeing these companies. They bought into the hype. They spent the money and they're clearly not getting their money's worth when it comes to, you know, putting this stuff into production. I want that trough. Give me that trough of

disillusionment. You might get it, man. No, no, I've been waiting. I've talked about this and I've been wanting this to happen. And these exact examples in the Wall Street Journal story are so perfect because this is what I've been saying. Anyone who has used any kind of generative AI tool, especially that does any kind of rag or retrieval augmented generation, basically where you use a generative AI layer over a preset existing amount of data, it does not work. perfectly, especially trying to do calculations and numbers, it works even less perfectly. So I think people are starting to understand if the data is not well-structured or, you know, very clear, and if the questions and the prompts are not clear, you're not going to get the

right answer. I would say a year and a half ago, when I started really doing a lot of work with generative AI, there was this idea and promise that you can just connect it to a big query database. You could upload 100 PDFs, and it will get it. perfectly. And I remember like uploading a bunch of bank analyst reports and it got, it could not get anything at the time a year and a half ago, especially trying to be like add up the revenue across different reports. If it was in a PDF format, no shot. So I think it's good because the more I've learned to work with this technology, you start to understand, okay, come up with more finite sets of data and questions, understand the right questions to ask. Like once you start

to use it and learn to use it properly, it will work. But these companies that have gone in head first at 100 miles an hour, I think there's going to be a lot of trough, a lot of trough. But these are not dumb companies. We're talking about Eli Lilly and others, right? They have smart people working inside them, presumably. If they can't get this right, are we going to start to see a point where for most companies using AI tooling, it's going to be harder to actually put this stuff into practice than to do things the quote-unquote old way. And then what happens if that's the case? Yeah, I think this is going to be a really interesting next six months or so because, as you said, they've invested the money. But what's actually happening a lot of these companies is you'll have

some innovation team or it'll actually live outside the business unit itself that's creating the product. Then they go to the business user and say, hey, can you, do you want to answer, ask it some questions. Are you happy with the output? And then they will ask it something and then get something that's not perfect. And out of maybe 20 questions, one is wrong, send it back to the innovation team and not be happy about it. So I don't think, I think it's less about a company is dumb, though I think massive organizations have inefficiencies. But I do think it's the way companies have approached setting up these projects from everything I've heard and seen is it's almost asking for these kind of challenges. And it's going to take a lot of will to overcome them

because I can see a lot of groups will just kind of write it off and be like, okay, we tried, we invested. I checked off that box and now I'm good. Right, exactly. And so this is sort of the sort of obvious business question that is just begging to be asked, right? A lot of the, we saw a chat chip BD come out in November 22. We saw a lot of companies develop their AI strategies in 2023. We're heading into summer 2024. We're going to, coming up real close to like a lot of the windows of where renewals are going to be on the table for companies. Hey, like, you have spent this money on our AI tools and internally, how's it working

for you? Do you want to spend more? Do you want to renew? And this is going to go directly both to the bottom lines of research houses like OpenAI and Anthropic, but also like these big, the cloud companies, right? Like AWS, for instance, and the Azure's and the Google Cloud, which. which have all basically turned in better than expected results because of the AI sales. So do you think in the short term we could actually see a dip in these companies' revenues

because renewals just aren't going according to plan, or at the very least, a slowdown of growth? I think a slowdown of growth is definitely in the cards, and it's going to be interesting because, again, like Microsoft was able to, I think, attribute around a billion to AI services. Google did not break it out for their cloud but still kind of said we are growing our AI-related cloud services. So I think if it's a dip that's going to be very, very bad. But I think a slowdown of growth is inevitable because if you're a cash-rich, large company, you will still be able to invest in this. But if you are in cost-cutting mode, one of the first things you'll cut,

I think, will be, okay, here's this technology that we were promised. I'll be able to ask it any question. It'll get it perfectly right on day one. And when that doesn't work and it's renewal time, I think that'll definitely be an issue. But I think that idea of are companies dumb? I think I'd be curious to ask you, do you think this approach is dumb?

Or do you think these companies have just like, what error have they made in the way they're approaching generative AI? Well, I just think that change management is difficult. It's very difficult to implement change. change inside an organization. And there's, like you talked about, there's innovation groups that are owning it. There's no natural group that's going to own artificial intelligence within a company because on one hand, it's very department specific, but on the other hand, it's very strategic for a broader company. So do you have that broader like innovation group that's sort

of handing it top down and saying, oh, by the way, that database that you've been querying for 10 years, now you're going to type it in and it's going to get it wrong sometimes, like trying to get somebody to switch over? Like, that's not very easy at all. all. So I think that it's just a change management sort of issues slamming into a hype issue. And we've talked about this a lot. Some people are already calling AI human level intelligence. We've had people on the podcast who've worked at these big tech companies who believe it's sentient, right? So I'm just saying it is what it is, right? And so you're going to have this hype and change management run into each other. And here's where I think we could

really come to a head. And, you know, if there's ever going to be a moment where the air comes out of this AI movement, it might be this. When GPT-5 is released, because it is going to come, you know, whether it's later this year or sometime next year, when GPT-5 is released, it's going to be an improvement, but I don't think it's going to be, and we've talked about it's not going to be the human-level AI that some people are believing it's going to be. It's just going to be like a more improved GPT-4, right? The next level of models are going to be an incremental advancement, not a revolutionary advancement to what we have, even though they're going to be quite impressive. And when people see that and they're going to be like, oh, I have the same issues with

GPT5 in let's say chat GPT that I did with GPT4 or 40. And it's not really working as well as it could be within the business. That's when you might see some of the questions come out. And I spoke about this with Michael Battenick on Wednesday. Where's the ROI on this? We haven't really heard that because, you know, there's so much promise. But there's going to come a point where that promise sort of tops out if these factors continue to go on their current trajectory, and that's where you can see start some of the big questions here. Well, one thing I've been noticing, though, and as someone who has been saying the real promises in the enterprise this whole time, is actually the increased utilization of all these tools in just the day-to-day individual work people are doing,

like so many more conversations. I hear people talking smartly about how they're using chat, GPT and uploading CSVs to do some basic data analysis or a lot more people I know are using perplexity to just answer questions or so I do think maybe you you there is a world where as an individual you throw in a CSV and ask it to do some data analysis and it's not some massive multi-billion dollar 12 month project that's going to give you the answer and then if it's not perfect you're like okay maybe I'll try another way versus Cargill someone asks a it gets the wrong answer and you can imagine the the shit storm that follows. So, so I think it's almost maybe a positive name. So it's how much this stuff is listening. But sorry, go ahead.

No, no, I mean, but exactly. It's like, but if it's just you sitting there, you're like, okay, that was kind of funny or ridiculous. Let me ask again, because this is going to make my life easier and I don't want to have to do this all from scratch. And that's actually good. And I think it's a, so maybe it will be more at the individual level within companies that this needs to be pushed. Because I do think this model of having an innovation group to a six-month proof of concept, it's just, it's rough. And it's going to end up in a lot. It's almost going to, the chance or the likelihood of good outcomes almost gets lowered

if this is the way people approach it. And that's a crucial bit of context. And I'm really glad you brought it up thinking about the individual level, because the one thing that you can't take away from this technology, is that it is extremely powerful and it is extremely useful if you know how to use it in the right way and so no matter how quote unquote dumb

companies might be on an organizational level there are going to be people within companies that are going to find out ways to use it in ways that are productive and that's going to make a very big difference and so like when I talk about the air coming out of this moment you know notice how I don't refer to it as like a bubble bursting because it's clearly not

like it's just you know potentially that some of the aura of it will deflate and maybe this is going exactly to what you want to happen is that people will look at it way more realistically. Just, just rain it in just a little bit. That's all I ask. But you know, I mean, if this is a change management question, do you know who is great at selling solutions to change management, Alex? Well, Ron John, you just nailed the segue. I think that might be the best segue in show history. Now I'm ruining it by talking about the segue, which is role number one about what you don't do to them? You broke the fourth wall of segways.

Lord Almighty, but let's talk about consultants because they are so good at change management or so they might say in 100 slide PowerPoints that talk about the change that they're going to bring to your organization. The New York Times has a story talking about how wonky consultants are the unlikely early winner of the AI boom.

Now, I wouldn't call them unlikely, and this has sort of been shared on X by more than one person, but like consultants always win in this situation, but they are winning so big. And I know we have a lot of consultant listeners. So I'm going to try to be gracious here. But it is interesting how much of the early winnings are accruing to the Boston

Consulting Group, the McKinsey and companies, the IBM and the Accenture. This is from the Times companies are in desperate need of technology Sherpas who can help them figure out what generative AI means and how it can help their businesses. By the way, if you are in a meeting and you say, we need a technology Sherpa, you're in trouble. I'm just going to say that's one one thing, okay, you're in trouble. Okay, now here's from the story. While the tech industry is casting about for ways to make money off generative AI, the consultants have begun cashing in. IBM, which has 160,000 consultants, has secured more than one billion in sales commitments

related to generative AI for consulting work and its Watson X system, which can be used to build and maintain AI models. Accenture, which provides consulting and technology. technology services book 300 million in sales last year. About 40% of McKinsey's business this year will be generative AI related. That's insane. 40% of McKinsey's business generative AI related. And KPMG International, which has a global advisory division, went from making no money a year ago from generative AI related work to targeting more than 650 million in business opportunities in the U.S. tied to this technology over the past six months. The management consulting industry in the United States is expected to collect $392 billion in sales this year

up 2% from a year ago. Okay, so obviously the amount of money that they're making pales in comparison to the amount of money that the big tech companies that we talk about on this show, you know, make in a quarter or a year, whatever it might be. But it's still clear that AI has been just this massive, massive boom for these consultants. Is this a good sign, Ranjan, or is this a sign of concern? I think this is a terrible sign. I think this is actually the exact worst possible outcome of this, because if anyone can remember,

and I say this as, again, to any of our consultant listeners, I think there's a great deal of value generated by large consulting companies, but the scale and speed to which they have pivoted to generative AI, if you just look at, and I get, I have like RSS feeds of McKinsey, in BCG and Bain and everyone, the amount, I mean, that would be an interesting analysis to do with generative AI, what percentage of headlines have determined it, because it's skyrocketed. And I mean, and the most fascinating part of this is if there was an industry that would be under threat from generative AI, it should be management consulting.

Because taking a lot of kind of, you know, diverse concepts and data, numbers and ideas and being able to condense it into a smart-sounding, short, concise argument is the business of management consulting. And that is literally the thing that an LLM does better. It might get some stuff wrong. And a consultant can get some stuff wrong. So it's amazing to me because I remember two, two and a half years ago, you know, McKinsey is under threat like consultings. The entire industry is going to get killed by LLMs. And kudos to them for actually turning it into an opportunity for themselves. And you said it pales in comparison. But remember, if KPMG is making $650 million, I think Microsoft, it was only $1 billion that was attributed to AI services in

the last quarter. And that was in a quarter versus a year. But still, it's, it's a significant amount of money in terms of actual cash being exchanged for any generative AI in the current market. Yeah, I'd be curious to see how many of every dollar spent on gender of AI is going to consultants. It must be a lot. And it's a very interesting perspective that you bring up about how this might eventually replace some of the work that consultants do. I haven't fully, I mean, I haven't thought about it that way, but it is interesting because I have like at times taken like all of big technologies, you know, data from like the back end of like Spotify and megaphone and like plugged in like it comes in spreadsheets right like the amount of downloads and

the headlines that we use for the shows and I've also plugged in like big technologies the newsletters data and been like what should I do differently what's working really well give me some takeaways and it is able to do that and it's like yeah that's something you might hire a consultant for previously it's pretty interesting so maybe this generation is not going to replace them but maybe they are kind of on like the the easy pick and in terms of like where you'd see AI start to cut in on their margins. Well, because if you think about it, like the true value of the management consulting industries, being able to have basically, you know, an insider look or just a very smart

understanding across different companies where most companies only are looking at themselves myopically so the management consulting can come in and give them a greater perspective about the world and their business challenges, understanding those challenges. challenges from other companies, that is, again, what does generative AI do great? It knows the whole internet and is able to kind of pull all that information together and parse it and analyze it. So I think, again, I would have thought already the management consulting industry would be seeing some genuine threat from this technology and they've completely turned it around the other way. Right. And it is interesting that they're only going to grow 2% this year, which is pretty

anemic. And if you took away AI, they would be contracting. Yep. No, but if you remember, actually, the, the most surprising name in this for me was IBM. And to hear that they have more than $1 billion in sales commitments related to generative AI and to even hear that, and it's, and it was related to its consulting work and its Watson X system. I did not, we've not talked about. Watson X in this show. I know. I kind of think maybe we need to get into Watson X a little bit because I need to know more. I remember going to a conference in 2015 for Watson and like this and they had a they had this booth set up and it was these chocolates were invented by AI and it was like we fed a bunch of ingredients into AI and it gave us these unique recipes that we've created

this chocolate off of. So they've been pushing this for years now for a decade almost. So I was surprised to hear that they're still going strong. Yeah, I couldn't believe that the, I mean, maybe this is going to reveal a level of ignorance in me that I'm not happy to reveal, but I couldn't even believe the name Watson is still in use. And maybe it just goes to show you about like the relevance of IBM. But if, yeah, why don't we do some digging and come back and talk about it on a future show? Maybe do we need a, if listeners, would like an entire Watson X episode

hit us up in the comments. Five stars. Ask for the Watson episode. We'll do the Watson episode. This is going to be the show of revived formerly dead tech companies. Yahoo episode. I think the Yahoo episode was a hit.

We'll do a Watson episode if you want. The Yahoo episode not only was great. I mean, Yahoo's getting more interesting right now. So maybe this will bring Watson X back into the conversation, at least for us. That's what we're here for. the one interesting one just to wrap this with abo we talked a little bit about how consultants are good at doing this stuff at the in our beautiful segue but actually it turns out that they're also having problems so this is also from the story the results have been mixed generative AI is prone to giving people incorrect irrelevant or nonsensical information known as hallucinations it is difficult to ensure that it provides this accurate information it can also be slower to respond than a person which can confuse customers about whether their questions will be answered And this is from IBM, which has this $20 billion consulting business,

ran into some of those issues on its work with McDonald's. The company developed an AI-powered voice system to take drive-thru orders. But after customers reported that the system made mistakes like adding nine iced teas to an order instead of one diet Coke, McDonald's ended the project. Maybe that's what's going on with Watson X, Ron John. Maybe we don't need to do it our own episode of us. Watson X just likes iced tea. You just want you to have iced teas.

Actually, AI is smarter than us. It's like, you know all the chemicals in that Diet Coke? You know you need some caffeine. Does AI sentient and trying to tell you what to do? Yep. It actually did a calculation. The amount of the amount of caffeine in one Diet Coke perhaps correlates to that amount of ice teas. Can you imagine the amount of sugar in nine McDonald's iced teas?

I, no, I cannot. But I could ask perplexity to make that calculation for me. You can. but you might not want to because perplexity, your favorite of the Gen A.I. companies have, has come under fire. Wired had this great story called Perplexity is a bullshit machine. Basically, it makes two arguments.

One is that perplexity is ignoring robots.tXT, which basically is a signal from website developers to not crawl. And they are actually able to find the secret IP address associated with perplexity that they were able to test by effectively, like creating discrete, web pages and then asking perplexity what's going on, uh, all on these pages and then perplexities bot, uh, pinged it to like sort of gave up its secret IP address. It's a very smart investigation. And so sometimes perplexity is actually going to these pages that have instructions

specifically for crawlers not to crawl and crawling anyway. And sometimes it's not crawling and just making things up at a thin air. And, um, this is continuing on with our sort of like copyright questions about like our generative AI company is going to start to hit serious copyright issues. And it's been a major rolling story. We obviously talked about their issues with Forbes. Rajan, I'm curious what you think about this latest round of reporting on perplexity and whether it concerns you as a true perplexifan. As a true perplexifan, I think it's going to get interesting.

And I've been wondering about why, like, it was for. now it's wired. Like everyone is choosing perplexity to go after this publicly. And the more I thought about it is, and for anyone who uses perplexity, it's still the best at kind of presenting the information in almost an original article format.

Whereas Chatte-T, there's no images. It's just kind of like very raw text. Perplexity really formats it nicely and makes you feel like you're reading a news article. So I think that's why publishers are probably taking it almost visually as more of a threat. But, I mean, this did not look good for perplexity if they're actually still trying to circumvent kind of standard practices of the web and basically hack their way to that content.

And when we had talked about this the other week, to me, it was, and again, as a perplexifan, they should not be scraping paywalled content. Unfortunately, maybe you should not answer that story around Eric Schmidt and his drone company. You just don't get that one. And if someone asked... How long did they not answer it? They featured it? Yeah, they featured in the image that was actually from the original article.

So I think it's a reminder. But remember, Open AI, there was the whole little kerfuffle around how they had basically scraped all of YouTube and transcribed it. And so every one of these companies has essentially trained or been, you know, like conditioned with the behavior to be as aggressive as fast as possible. And I do think it's going to cause a lot of problems because perplexity, especially, because I ask it a lot about more current events, what's happening in the French election that's going to, like the special election, I've actually, I've learned a lot about what Macron is trying to do. And it was very good at explaining these things. If they lose access to all news, then anything new is less interesting. So I think there's going to have to be more and more, at least humbleness in the way they approach things, if not coordination. And we talked about, out there are vague promises around paying publishers or something like that. But I think this is going to be for perplexity a major issue.

Now, Rajan, you talked about how every one of these generative AI companies, and maybe this is painting a bit too broad of a brush, but most of them are really scraping extremely aggressively and kind of being opaque about where they got the data from. And they're all training on copyrighted material and telling us basically like shut up about your copyright questions. I mean, that's basically the sentiment. Yet, they're all talking about how they want to develop AI ethically

and they're very concerned about its impact on the world. Would you say that their disregard for intellectual property law and norms is ethically compromised? And if so, can we trust them on the ethics that would apply across the board? Because if they're ethically compromised in one. area. Why should we believe that they're going to be ethically on the straight and narrow in the other areas? So the whole publisher issue here, the one argument I have found a bit, I don't know, that, you know, that is in their favor is the idea that still, and we discussed this

the other week, that many publishers still built a lot of their own businesses off summarizing and not copying, but rewriting other original content. which is essentially what perplexity is doing and all these other AI services faster and at scale, rather than having some junior writer be tasked with, okay, the Wall Street Journal has published something. Now, go write it in a few different bullet points or a slideshow and let's put it on our website, not naming names there. But I think... Sounds like Business Insider or maybe even a publication that I once worked for.

But sorry, go ahead. I think maybe. And that's why publishers have operated. So just the idea of taking something that is out on the Internet and reframing it in a different way, obviously copying verbatim is always going to be bad. So it is not the most unethical thing. I think it's problematic for the long-term kind of viability

for the business of perplexity. But I do think, like, yeah, out of all things, it's not necessarily the most problematic. in terms of where these companies could operate unethically. I don't know, you having worked at certain companies like that, how do you feel? Yeah, I mean, I think that like it's, first of all, we didn't do it in the news division. At least I don't think so. I didn't do it.

Everything I did was original. But I would say at least respectrobots.t.cstey, right? Which is like if a website is sending out an explicit signal not to crawl, do not crawl. That's it. That to me is a very simple issue. Wait, can you explain that a bit more in terms of the robots. robots txd for non-sseo driven listeners yeah look it's basically a piece of code that you embed in your website that tells web crawlers not to crawl certain pages if you don't want them to appear

for instance in search engines or to be summarized by AI tools and generally on the web that instruction has been respected by companies like Google and if you have it in your code you're not going to get an appearance on the search results but these AI companies Clearly are not respecting that. And so that sort of norm of the internet is potentially on its way to going out, which is, I would say, not very good. Are there publishers? I mean, has this come up in the past?

Like, you can just avoid it that easily? Yeah, in the Wired story, there's a publisher that tries even more protection. And I can't get quite into the technical details, but even still the perplexity scraper was able to get around it and crawl the data. Okay, okay. So they, it sounds like they built in some very black hat-ish efforts on this. Yeah. Exactly. I mean, just like this is the whole thing. It's kind of been our theme on this stuff, which is just like respect norms. And also if someone, if you're claiming to be an ethical company and someone says, where did you train? Like, did you train on like, for instance, YouTube videos and you don't have the ability to say yes or no? Like, that's pretty weak. So anyway, there's another big lawsuit that's, uh, on its way, which is that the record companies are suing song generators, including our favorite Suno, which played our very special theme song just a few weeks ago, a few months ago, for copyright infringement. This is from the AP. Big record companies are suing artificial

intelligence song generators, Suno and UDO for copyright infringement alleging the AI music startups are exploiting the recorded works of artists from Chuck Berry to Mariah Carey. And this is from Mikey Shulman, the Suno AI CEO. He said that the technology is designed to generate completely new outputs, not to memorize and regurgitate pre-existing content and doesn't allow users to reference specific artists. Kind of an interesting quote there, not saying it doesn't train on the existing songs, just saying that like its output is going to be different from the current works. What was your read here? Are we going to say goodbye to Suno? Should we make as many theme songs as we can before this court?

Case gets done. At least just tell me our theme song did not infringe copyright. That's all I ask. But I think that this isn't even more, it's always interesting where it's one thing when you have copyright issues related to text. It's just less emotional almost versus with music, you hear it, you feel it. You like, you know, there's something underlying it that might sound like another band. But also, remember what Suno, you can actually say, like, in the style of a Taylor Swift or whoever else. So I think that might be a little problematic for them when you basically are in the prompt, almost encourage. I think, I forget which one I'd used, but it actually gives you kind of presets of different artists to choose the style of, which, again, was a lot with a lot of fun. So is this CEO, then is he lying? because he says it doesn't allow you to reference

specific artists in the prompt. Okay, maybe not with Suno, but I know, I forget. You've tried one and it very much encouraged you to ask for in this style of. So I think this is one of those that, and with music, you really feel it and hear it and you're almost asking for that output specifically.

But on the other hand, remember, there's been, I think Ed Sheeran was sued by the estate of Marvin Gay. Oh, yeah. We've talked about that on the pod. Yeah, exactly. So it's almost the same as a business insider taking and rewriting paywalled original content into shorter formats back in 2011.

It's the idea that artists have been inspired with air quotes by other artists forever. And so what is the real difference, especially when these type of products are, you know, creating they are like i mean they're mathematically new products that are being created it's like to the picks and whatever the pixel equivalent is with audio but that could not be created without using this copyrighted material so i think this stuff is going to come to a head i really do i don't think this is going in a good direction no no but the same way i if i'm a musician i cannot probably create any new music unless i've learned other songs and heard other music and that's what it's all it's kind of that like assortment or aggregation of knowledge that allows me

to create new music so is it really that different that's a good point yeah i don't have a good answer to that i think it is different because of the scale but i also don't i also hear your point on that one pretty loud and clear yeah i think one of the things though is if something is and it's going to be interesting especially as businesses for like the business side of suno If people are just using this stuff for fun, like, I guess we did use it for a commercial application, but, you know, it's, uh, it really gained a lot of fans for us when we put that music video out on people. I mean, it went viral. People have never stopped talking about it. Um, but if you hear about it every now and again, it's like you made a theme song with Suno. It was a good one. Baby, baby, baby, made a disgust, but it's all in good fun, join the conversation and let that's like, talk of one. But if you, like, if you're actually selling the output of a Suno song, to me that takes it to a different level in terms of like how risky the copyright or how strict the copyright should be versus you're just kind of making fun stuff that maybe does supplement a podcast and make people laugh. versus like this is a commercial product that is being packaged and marketed as a commercial product.

And that will happen soon enough. So we should we should also talk about what's going on with Waymo because Waymo this week dropped its wait list in San Francisco. And everyone's like whatever snooze. But this is a huge deal. It's from The Verge. It's opening its robo taxi service to anyone who wants to ride in San Francisco. Previously customers interested in taking a ride on one of the companies, drive of those cars needed to sign up for a whizzo.

wait list, which could take weeks or months to open up. And this is after Waymo began commercial service in San Francisco in 2021, only with trusted testers. This is from Martin Pierce in the information. Why Waymo's accelerating progress deserves more attention. News outlets aren't good at covering technological advances that take years to unfold. And let's face it, self-driving cars have taken years and years to become a reality much longer than some predicted. Even so, the progress autonomous vehicles are making to serve's attention more attention than it's been getting. With little news coverage there has been lately of the self-driving car industry as focused on accidents such as the recent episode of a Waymo hitting a utility poll in Arizona

prompting a recall done via software update. Despite that glitch, the Waymo rollout is noteworthy, proceeding steadily if slowly. I agree with peers 100%. I still think this is one of Tech's biggest stories that's totally undercovered. And the fact that Waymo is now going to be open to everyone in San Francisco is a pretty major milestone. Remember, San Francisco is not Phoenix. No offense to Phoenix, but San Francisco is difficult to drive in. I mean, I live there six and a half years.

And I can tell you, trying to park on one of those like 45 degree angle roads or snake down some of those streets trying to drive with San Francisco traffic. It's not easy. And the fact that Waymo is expanding there is to everyone. Massive deal. I think the story of the week. What's your read on it? Yeah, I think this is, I'm both very excited about this, still a bit jealous because I was in San Francisco for Cloud Next last August or September and tried to get into one of these Waymos and did not, was not able to get one. So I still have not driven in a driverless car. But everyone I've talked to said it is an incredibly magical tech moment for them.

Like it's a, you know, like blow your mind, this is the future. I can't believe this is happening. And for them to actually, the fact that it's being commercialized and it's real and it's happening and it's happening in a complex place like SF. And if it can happen there, it can happen anywhere. I think that's incredibly exciting. I was thinking like the amount of energy and ink spilled on full self-driving in Tesla versus the Waymo story still always shocks me because to me,

the fact that you can legally get in a driverless car and ride it around and it is replacing taxis when that's still the three to four-year Kathy Wood Tesla vision is crazy to me. So I agree. Talk about Waymo, everybody. But here's the thing, though, on the Tesla front, they might both get there. And if Tesla gets there, it's going to be able to do it with much less capital in the car than Waymo is. Wait, what do you mean less capital in the car? Like a Waymo car takes so much money to put together because there's advanced sensors and things like this.

And it's part of what makes the ride so smooth and so safe is because they have so much more hardware there. But for my understanding, Tesla is basically training with computer vision, mostly or solely. And so that basically just means that it needs a bunch of cameras. So if Tesla is able to figure it out with the data that it has, that's actually a leap beyond what Waymo is doing. Yeah, I agree with that, but the big question is if, I think. And Waymo's freaking doing it. And yeah, that's a good point. Exactly.

And it's happening. It's happening today. And I mean, this is one of those things. And you wrote in one of these, right? Many of them. Yes. When I was in San Francisco. last summer. I basically spent a full week just tooling around in Waymos and cruises. So

to get like the real feel of the way these things are, they are definitely magical. They're a little bit scary for like the first 30 seconds. And I actually have a YouTube video up. Maybe I can link in the show notes that has like effectively my ride. But it's pretty awesome. It's just very, very smooth. You don't care that it might take a little longer because it has to travel on some specified routes because it's just such a smooth ride. Like, If you're in, let's say, an Uber or Lyft inside a, if you're in an Uber or a lift, you might puke, right, with a human driver. But these Waymo's, you could just be on your phone and stuff like that, and it's amazing. No, the fact that, I remember when you said that, and again, still pretty jealous on this.

And I might have to go out to San Francisco just to ride a Waymo. But I think the amazing part to me, the way I kind of always gauge this is everyone I know, who has written in one had the exact same reaction as you. I mean, at that point, to me, there is no doubt. But I guess to you, though, is how long is this going to take where we're all riding around in driverless taxis? That's the million. I mean, it's the trillion dollar question, right?

The trillion dollar question. If this stuff is generalizable. Seven trillion if you're. Yeah, exactly. I mean, we'll see how quickly they're able to expand city to city. Like Waymo also has something going on in L.A. They have something going on in San Francisco, Phoenix. So remember, Cruz tried to go.

10x every year and they ended up getting into a safety incident, I think, you know, doing some form of cover up and the CEO got fired. So like, we'll see. There is a Goldilocks between moving super slow and super fast. And we'll see what happens in terms of, in terms of the expansion. But it's coming. And that's the most important thing. This stuff works. Okay, speaking of working, Amazon just hit a $2 trillion market cap for the first time. It closed at 193.61 on Wednesday, joining Invidia, Apple, Alphabet, and Microsoft as the only $2 trillion companies. And this is important. It's really helped by AWS.

It's Amazon Web Services business. It was continuing to rebound from a recent slowdown caused by businesses that trim their cloud spend. And that's what they said in the recent quarter. And they said AWS can benefit from a surge and demand for generative AI services. What do you think about this moment? I mean, it's interesting because Andy Jasty had sort of been like, You know, people were like, man, what have you done for us lately?

But he seems to really have, like, gone this company to a new height. Yeah, I think it is pretty entertaining. I mean, we've talked about should soon be fired and Google keeps making new heights. Andy Jassy, plenty of haters and doubters, and they keep making new heights. So I think Amazon's positioning in all this, especially with generative AI, is odd because we talk about them just only a little bit more than Watson X, its feels, because not very much. but they're quietly making moves and you can when you have

AWS under your wing and you have all these enterprise customers but I mean I think the core business to me is still so interesting because you know with Timu and Sheen and just the entire landscape of e-commerce has changed and I think I have not seen a compelling shift from Amazon that makes me think

that they're well positioned to actually deal with it. Well maybe they are because this is another story we saw about Amazon this week that it's going to launch a Timu-like discount section with direct shipping from China. It's from the information. Amazon plans to launch a section on a shopping site featuring cheap items that ship directly to overseas customers from warehouses in China. What do you think about this? Because they're going to get there within nine to 11 days. So Amazon's pledge has always been price, convenient selection. But this is really a hit on the convenience side that it could take maybe two weeks, up to two weeks, right, to get to you.

It's a very, I think it's an odd move for Amazon to do this, although maybe they had to, given the rise of Timu and Sheehan. I think this is a terrible move. So for listeners to understand, the reason the shipping would take nine to 11 days is Timu and Sheehan, one of the things they benefited around is kind of a shipping loophole where if you deliver packages, small packages directly from China, you can avoid some duties or tariffs. and it's one of the drivers of the growth of Chinese e-commerce sites like Sheen and Timu. And Amazon, it appears we'll try to replicate that. But this is the thing to me is Amazon overall, I mean, the last few years had been moving down market. There was a time when you thought what I buy from Amazon will be good and arrive quickly. Now for most people, if it's not from a brand you already know, then you assume it'll just arrive quickly. maybe it's not going to be great, but it'll be pretty cheap. And then Timu and them and she and

have shown that they can go even cheaper. So I think this is a, Amazon, this is what I'm saying, on the e-commerce side, needs to explain who are they? Like, what is the service? It used to be good and quick. Now I'm not really sure. And then if it becomes like crappy and slow, it doesn't seem like the best positioning just to respond to a competitive threat that's very, That seems a little short term. I don't think Bezos would have done that. Right. What do you think about their increased dependence on China?

Oh, well, there was a great piece in Sherwood News, and it's actually Mike Milazzo who writes the United States of Amazon, which is a great newsletter, about the increasing, it was actually about meta and Amazon in their increased dependence on China. And just one thing that was fascinating to me was in 2023, Chinese firms injected $7 billion of revenue into meta into their advertising. A big part of that was Timu. But even with Amazon, I mean, this is just kind of like the final stage of trying to copy Timu, but already there's so many sellers on Amazon that are Chinese. This has been a decade-long thing that they've been working on to go directly to the manufacturer and turn them into sellers. One thing that was a bit

rich to me, and I think could come up is on the antitrust side, and in that Sherwood piece, they'd mentioned this, is Amazon has been saying, like, one of their big antitrust defenses, and to remind listeners, Lena Kahn, the big lawsuit, very conventional, large around the need to break up Amazon, is that it's, you know, 500,000 independent American sellers make their living on Amazon. We're all about mom-and-pop small businesses across Main Street America. You can just almost picture the commercial in your head right now. I hear the music and I see the flag blowing in the background.

I mean, we're just, we're just a week away from July 4th. So let's get ready. Amazon.com. And like meanwhile, you're pitching an entire thing where you're basically like, let's just cut out everything and just go, we've already been going more and more to Chinese manufacturers. Now let's start avoiding American duties and tariffs and just completely just copy TEMU. So I think if they go in that direction, this could be an issue. Right. Okay.

I know we're going rapid fire towards the end of the show, but let's just round this out. You had one of your investigations kind of hit the very top of Reddit about your famous pizza door dash experiment. So why don't you kind of talk through a little bit about why it remains so salient in people's heads and sort of what you've thought about the incident since then. Yeah. So for newer listeners in 2020, I'd written a piece actually about something that happened in 2019, where a friend of mine ran a pizzeria and Dorda. He was listed on Dordash without his knowledge. And it turned out that Dordash was actually selling the pizzas cheaper than he charged. We figured out a whole arbitrage scheme, me being a former trader. And basically we're able to, he would sell $16 pizzas and Dordash would pay him $24 a bit. pizza, eight bucks per pizza arbitrage, free money. And we actually did this a bit, and I wrote a piece about it, went pretty viral, and we just started noticing traffic yesterday to margins, and apparently it's still, it made the front page of Reddit under the R Today I Learned. And the funniest part about it to me is, well, first of all, the way people talk about it is like

it's this ancient piece, and it's, you know, long ago they made these, this guy. who did this and sold pizzas for more than, you know, DoorDash was charging. And also the fact that, like, Radio Lab and John Oliver have also gotten a bit of credit around this story because they all had covered this. But the most salient part to me is in the piece, I talked about how the food delivery business model does not make sense. And this was at the height of COVID. And, you know, everyone was ordering delivery and everyone was starting questioning, you know, how could this not make sense? the idea of companies losing hundreds of millions of dollars, how does that work? And I just had to kind of update my figures. And yes, DoorDash and Q1, 2024 still lost $25 million. In 2023, had a net loss of $558 million. In 2022, $1.4 billion. So food delivery is getting more common and convenient, but no one has figured out

how to make money off this yet. Yep. I don't know. We've invited the Instacart CEO Fiji Simo on a couple times to come on the show. And so far, no dice. So Fiji, if you're listening, you're welcome to come on. We'd love to go deeper into it. But you're right. It does seem like the thing that you exposed and the thing that's continuing to go on is that there's real weakness there. In their defense, one thing I'll say, in Taiwan, like this has been a few years since I've been here, the amount of people using these deliveries, Uber Eats is huge. year. When I was in India in March, Uber Eats was massive. And you can almost like the amount cost of labor can be much, much, much cheaper. So maybe that'll be what saves them international markets. I mean, it's crazy. You can get everything on Uber Eats now. Like I just threw a party and we like it was hot. It was a summer. And I Uber eats like seven bottles, seven cases of water over. And it worked. It was amazing. Great for the environment and the economy, Alex. but also nobody died of dehydration, which is a win.

Okay, it's going to do it for us here this week. Thanks for joining Ranjan. On Wednesday, I will be on with one of the Open AI whistleblowers. We're going to talk about those fears with William Saunders. He's a former member of the technical staff on Super Alignment at OpenAI, and also Lawrence Lesser, who represents him as the lawyer. So that's what's coming next week. Also, Ranjan and I will be back next Friday.

That'll do it for us here, and we'll see you next time. Big Technology Podcast.