Big Technology Podcast - Apple’s AI WWDC Approaches, Nvidia $3 Trillion, OpenAI Safety Concerns

Episode Date: June 7, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) Apple's WWDC AI preview 2) Apple's willingness to change its operating system with AI 3) Were Humane and Rabbit on the right track with bad execution? 4) Will the market react well to WWDC? 5) Apple is going to put cameras in AirPods? + Alex's experience with the Ray-Ban Metas 6) NVIDIA's $3 trillion market cap 7) NVIDIA surpasses Apple for a minute in valuation 8) Are we at the NVIDIA top? 9) Roaring Kitty is back in the Gamestop trade 10) OpenAI's current an ex-employee write an open letter about safety disclosure 11) Sam Altman narrative change - is it fair? 12) Leopold Aschenbrenner's public rollout 13) Alex's chances of turning into a paperclip next week --- 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]

It's WWDC Eve as Apple prepares to roll out its AI strategy. Invidia, meanwhile, surpassed Apple momentarily and route to a $3 trillion valuation. GameStop is running up again, and Open AI is hit with an open letter from current and ex-employees demanding better disclosure. All that and more is coming up right after this. Welcome to Big Technology Podcast Friday edition where we break down the news in our traditional cool-headed and nuanced format very big show today three major headlines w w wc is in route we have some major apple ai announcements coming invidia three trillion

dollars we talked about whether it was going to surpass apple and it did although apple's taking the lead again and then this open a i safety thing it seems like there's never a dull moment with that company but we're going to cover it all and we have ron john roy here with us to do it ron john welcome good to see you again happy w wc eve alex That's right. It's going to be, it's going to be nuts. My favorite time of the year, yeah. Yes. So before we get into it, I want to first welcome any new listeners that we have. I've been doing the rounds on the podcast circuit. And I think we've, we've seen an uptick in listeners, which is amazing.

Just to give you, if you're a new listener, just to give you a heads up of how we do this. We do a flagship interview every Wednesday. And then we have this Friday news recap, or Ronton and I look at all the news of the week and share our perspectives. on it, tell you what's happening, and we try to do it in a pretty digestible and fun format. So that's how we do it here. And let me start this week's episode with a bit of fun news. I got a credentialed for WWDC. So I'm hopping on a plane tomorrow, and I'm going to the Bay Area, and I'm going to be there on site in Apple Park in Cooper Tino, and I'm going to get a chance to witness Apple's

big AI announcement with my own two eyes, and I am pumped. You're going to get to be there? That's right. at WWC in the audience for this, for the AI announcement. If you thought this would happen, Ron John, including myself. I'm excited for you and for us because this is, this has to be one of the biggest Apple events in recent memory, I think, because there's been a lot of incremental hardware upgrades it's felt like for the last number of years, but I really believe that this one is going to be,

I mean, it has to set the pace for the next era of Apple. Definitely. And we'll get into some of the announcements, you know, as we go and a quick programming schedule for next week because I'm going to be on site. I'm almost certainly going to do a very quick solo podcast on Monday, recapping what I saw there. On Wednesday, M.G. Siegler is going to come on to break down exactly what happened. He's one of our favorite analysts. And we're going to talk through exactly what happened with the announcements, Wall Street's reaction, the tech community's reaction, where to go from there. How open AI navigates this now that it's partnering?

Apple and Microsoft. Then on Friday, Ranjan and I will be back. And I think Mark German is going to join us. So I'm still working to get the scheduling down on that. But Beat Reporter extraordinaire on Apple, Mark German should be here with us on Friday. I don't want to overpromise. It's still working out the details. But hopefully that will happen. So let's step the stage. We won't talk too much about WWC this week because we're going to have plenty going on next week. But Apple like wouldn't say the word AI for quite some time. And now they're ready to go full bore into AI. They have a partnership with Open AI. They are going to apparently release a bunch of new product features. Is there anything in this buildup,

Ranjan, that's caught your eye in terms of something that might be important to watch or something that you're excited about. We know you love Siri. So is that what the thing that you're going to watch is or something else? I will say to hear and read in Mark German's reporting that Siri will be a major part of the new AI push. I cannot deny, I'm very, excited as I've said in the past just fixing Siri and making it barely usable would be a huge win in itself but I think the really interesting thing that I'm looking for is how they integrate large language models into Siri and how it pervades the rest of the operating system and what I mean by that is one of the

things Mark his reporting said was that we potentially will be able to use Siri to activate other apps now the Apple is had the shortcuts feature for a long time, which has allowed you to basically custom design specific shortcuts that I want to launch a very specific task within a specific app. And it never really worked that well. I know some people who swear by it, but overall, it never, it was not great, but large language models should be able to solve the logic underlying these things so it can actually easily do this for you just with your voice.

basically Apple will get its own agent and Siri will become an agent now. So I think if they can pull this off, it changes the way the entire iOS operating system works. And if they can actually get people to adopt it, I think, I think this is huge for them. And I wrote about this in big technology a little bit today, which is that all great CEOs are judged by their ability to thrive in the middle of a computing shift. Right. So Steve Jobs and Steve Wozniak, they built the personal computer. But Apple really hit its stride when they were able to navigate the shift from desktop to mobile and release a device that was generations ahead of the rest, and they still haven't looked back from that. Like, that is like the true Apple story when you think about it. And this is a

computing shift here for Tim Cook. And the way to navigate a computing shift is you don't go half in. You think about what your fundamentals are and you say, do I have to hang too tightly to this? And if you decide the answer is no, then you change your fundamentals. And I think you picked out the exact right thing, the fact that they're considering tweaking the operating system, right? That's the way you interact with the Apple device. The operating system sucks. You might think about something else, right? And so they're going to go at the core of the product, thinking about the operating system. And they're also going to do away with another sacred cow, so to speak, because they're not going to just develop this entirely in-house. They've brought

a third party in to do a core piece of development in one of their core products, which, by the way, I can't remember a single time that that's happened where Apple's not getting paid or yeah well where Apple's not paying out I don't know no Apple's not getting paid Apple got paid by Google not getting for search Apple is paying out to open AI right so this is a very big deal yeah I'm I'm honestly a bit confused by this because Apple has definitely had a long enough period now even if they were behind initially to build their own foundation models and to me there's no I really don't understand why they would bring Open AI specifically to get into that operating system level, as you said. Even having Google as a search bar in Safari as the default is one thing. This is you're

going to have to trust Open AI and an external partner to, as you said, redefine your entire operating system and the way people work with it. But that being said, though, I do think Open AI has shown that they understand how to use user experience to actually get people to use these products. Again, chat GPT, I still will argue the kind of the way it makes it look like the computer is thinking and then it streams the text rather than just returning it in a block was one of the smartest things they did because it made everything feel more magical or like the, you know, the LLM was actually thinking as opposed to just quickly processing. So I think if anyone can help them do it, it would be open AI. But I don't know, it's going to be,

It's still a bit of a risk for me the fact that they're partnering like this. Yeah, well, I think what it does is it shows a sense of urgency that Apple isn't going to wait until it's perfect. It's just going to say, okay, perfect is the enemy of the good. And we are going to use the good. And the good is going to come from somebody else. And over time, maybe we build those models in house and we sort of don't rely on a third party too much. The one, and the one thing that I also thought was interesting that's kind of new is this is also coming from German, that Apple is planning a catch-up feature for missed notifications,

allowing users to quickly absorb what they miss when they weren't looking at their phones. And this is what an AI device is going to look like, right? It goes beyond that it supersedes the graphical user interface, and it says instead of tapping through all of these apps, we're going to give you this catch-up function. You know, instead of tapping through them to change things, we're going to allow you to do it with Siri.

For instance, like one of the examples that's been tossed out is that Siri will allow you to say, text this, you know, crop this photo and text it to my friend, and it will be able to do that. And so I do think that this, again, it goes back to what is the core of the product? It's the operating system and to rethink the operating system and to find new ways to present information to free users from the constraints of the graphical user interface and to show the urgency to do it. I think that is where you end up winning if you're Apple.

And I think it's positive to see them making some of these changes. I mean, it's amazing to think about. what this is describing is the humane pin it's the rabbit r1 device it's like basically what we've said which always kind of felt it you know and the big the big knock on those devices when they came out is isn't this just an app that's going to live on the phone but actually what's interesting is no it was never an app it was actually redefining the operating system but i feel bad for those devices because the entire and do you remember rabbit they had instead of a large language model it was a LAM large action model that's basically what this is describing here

I mean you're totally you're taking the words from my head because I was about to say that I here's what I wrote in in big technology today laugh all you want at the failures of rabbit R1 or the humane pin but these early efforts to rethink how we relate to with our devices were simply the first attempts to figure out what's next and they won't be the last more AI devices will come more will fail but eventually something might work and that matters to the three trillion dollar iPhone maker, which has driven the last major computing shifts and isn't interested in missing this one. You know, we laugh a lot at the R1 and the and the pin and for good reason. But, but there's something that they were pointing toward, a new reimagination

of the way that we interact with devices. And I don't think that intuition was wrong. It's just the execution sucked. Yeah. Have you ever seen a pin in the wild? Have you ever walked into what met up with someone and they just had the pin on them. I'm going to be disappointed. No, I'm going to be disappointed, though, if they go out of business and I never had seen a pin. There was a story that they told users to stop using the charging device, I think, because it would light on fire or something like that.

So you may not get your chance, Ron John. I may not get my chance because, yeah, the charging case for the humane pin apparently could be set on, would, can set on fire and they have to, they did not even announce that they would be replacing them for users they just announced that they are like looking into it right now they're giving up i think i mean they're also i think there's rumors that they're trying to sell so but broadly on this apple announcement and then we're we're going to quickly move off of it but isn't this the biggest win for opening eye in its history like the the talk is that opening i might make billions of dollars from partnering with apple it's making i think two billion this year in revenue like this is huge and it solidifies itself

And Brian and McCullough and I talked about this a little bit last week, but it solidifies itself as a partner to Microsoft and a partner to Apple. Like, what more could you want? Yeah, I think this is huge for Open AI and it firmly establishes them, you know, in the most valuable real estate in the world, iOS. So I think for them, if they can prove that they effectively will be able to drive this and help Apple redefine the way we compute, I think this is going to be a big moment for them. But yeah, and to establish because the chat GPT plus and the consumer side of open AI, we've discussed a number of times. Is that ever really going to get them to their insane valuation? I don't think so. So it always had to be on the enterprise side.

And enterprise, because of the power of Microsoft's cloud business and Google's cloud business and the lock-in they already have with a lot of enterprises to be able to then upsell them onto the AI side, Open AI doesn't have that. So I think it's exactly this kind of creative deal that will make the difference for them. So very quickly, I wonder how Wall Street is going to react to the Apple move. I think this is going to be a big narrative afterwards because, you know, from a strategic point standpoint, you can like the moves. From an investor standpoint, you can wonder, where's the money going to come from, right? Okay, so these are supposed to, these new experiences are supposed to work on the iPhone 15 and better because of chip capacity and probably because Apple wants you to upgrade.

But there's been some discussion of like whether Wall Street really is going to believe the narrative. And Apple's up 6% over the past month. So clearly people are already buying the story before it's happened. And a lot of the people that I've spoken with, including Brian last week, Eric Jackson on the compound and friends this week have started to say, you know, there are people who are like going bananas over where the Apple stock is heading. But they just do not think that this is going to translate into positive.

sentiment on Wall Street after this event is over and maybe it will even underwhelm. I'll take the other side of that. I think if Apple sells this vision, it will excite investors because what's been the knock on Apple day, the upgrade cycle is over. The idea that you're going to buy a new iPhone every year, new iPads every year. They lost that business model within the last few years and it's certainly not being ascribed to future growth. So they need to find something. And if they sell this vision that this is the new iPhone and you have to buy this new iPhone, otherwise you're not going to get all the benefits of using it, I think that's hugely

bullish. And then you start to think about how does that pervade other devices. And again, I say this as a user of Apple HomeKit and Home Pods, which suck, but I still use it. the idea that that starts to change smart homes and iPads, you know, every single iPad line starts integrating this kind of technology and it changes the way we learn and kids are learning. Like I think there's so many opportunities that just being able to sell the vision that we're going to figure out multimodal LLMs for consumers, I think is exciting.

I think it's good. They just have to sell it now. And this is one of those moments where we're all trying to think about what's happening at WWC and then reporters just chuck all the reporting they have at the wall and see of what people will pay attention to, including the stuff that's not imminent. And one bit of preview caught my eye, which is that German said that Apple is looking beyond chatbot. It aims to use large language models to help power a pair of robotic devices that it's developing. So there's a tabletop robotic arm with an iPad display. It's also working on a mobile robot that can follow

users around and handle chores on behalf, on their behalf. And this is really the thing that caught my attention. It's looking to equip its AirPods with cameras and AI features. Cameras on your AirPods, folks. I like that a mobile robot following you around is not what caught your eye, but cameras on the AirPods. I'll tell you why. I've had the meta, the red, the rayban medas, which are these sunglasses that meta's made that for the past week. And they're like regular glasses, but they play, you tap on the side. They can play music. You squeeze the brim. They can take photos and video. And there's also an AI assistant embedded within them. And you can say, hey, meta and ask it questions. Like, I was up on the rock climbing wall, middle of the week and

wanted to know what time it was. And I couldn't see the clock. And I was like, hey, meta, what time it is? What time is it? And it was like very useful. Now, I don't think that's the average use case, but I thought that just like, it was so cool to have that, you know, whenever you need it. And I think these things are going to go mainstream. I think they're pretty cool. So put some cameras on the AirPods and then build that functionality into the Apple ecosystem. And I think you're really looking at some very interesting product potential. I think one of the, one of the viewers watching on LinkedIn asked the question, will you have to pay a subscription for Apple intelligence. And I think that's a really interesting point because, again, I cloud,

Apple services business has exploded in the last number of years. I probably pay for a lot of Apple subscriptions that I forget about and just see the bill kind of come through on my Apple card, which I also have. So I think the subscription revenue potential for this, especially if it's good, is another huge area for growth that, uh, that Apple's already shown they can do it with all sorts of iCloud and Apple Music and other Apple One upselling that I think that's an important place, part of this as well. Yeah, just got to juice that service business. Juice the services.

Okay. So speaking of things that get juiced, how about in videos valuation? Okay. That was a good segue. So in video. That's a good segue. Jump 5% Wednesday. it became the second most valuable publicly traded company in the world surpassed

three trillion on the same day it's fallen back a little bit now not even back to earth right it's still worth 200 2.97 trillion dollars trillion I still can't believe these numbers right it's up 150 something percent on the year and it was already coming into the year at a crazy number and and it is it is a very interesting moment I was on CNBC earlier today. I was talking about how like, you know, should we say that the picks and shovels are worth more than the gold? And obviously, it's not 100% true because, like, just because it's the second most valuable publicly traded company doesn't mean they're a company. The accumulated value of stuff that's built with it isn't worth more or won't be worth more over time if you take

the rest of the companies in the world. But it still kind of strikes me as a little bit weird. And, you know, you can look at the numbers and you can say, okay, and it makes sense because of this and that. But it still strikes me as a little bit weird that Nvidia, is now the second or third most publicly traded company, most valuable publicly traded company, and maybe it one day goes and surpasses Microsoft as well. I mean, what does it say about your economy if the most valuable company is a chipmaker? Yeah, I think that's a good point because Nvidia is clearly they're the dark, like they're at the center of the story and they're the beneficiary of it. But I don't know, I think it was two weeks ago. That's why we had called when we're

we were talking about the upcoming 10 to one stock split, that those kind of moves for me were just not a good sign as they're trying to almost like force themselves into, I don't want to say meme stock territory, but at least more retail. The Nvidia story, I mean, this is a company trading at 48 times earnings. I mean, you know, typical tech range, even 2025 is a strong multiple. So this is an incredibly rich stock. And yes, the revenue growth. has been insane, but I just don't understand where the continued growth is because everything is already priced in. Everything, this is already priced to perfection and the idea that unless they come up with something completely new and they keep, you know, coming out with these new chips

that do show some kind of promise, but I still think, I don't know, I, it's tough to see how this keeps going, but I certainly would not be the one to try to call the top on NVIDIA. Well, let me try to explain how it might keep going. So, like, we have companies that are already building today with the AI technology, like Aaron Levy was talking about, that Open AI made the technology 50% cheaper, two times faster. So that's going to enable a building cycle of its own.

And NVIDIA is well positioned to support that from a hardware and a software standpoint. But over the next 18 months, what's going to happen is any, when building a foundational model, talk about opening I, meta, whoever it might be, is going to just buy as many chips as they freaking can. Because we know that adding more compute and more data to this equation has led to incremental or seriously exponential progress, right? And there's never, there hasn't fully been a sign of that slowing yet. So, Nvidia, through Blackwell, right?

So this week they put their roadmap still 2027 and through Blackwell, they should be able to at least sell all those chips. right it's not like they're you know they're not supply constraint they are and so you could you could imagine that there's going to be some serious growth there for investors to reap and that's why people say i heard this week that it could go up to four trillion and that is the bet because look let's say let's say hypothetically the next round of development is as impressive in terms of progress as this previous round has been then people are going to buy even more chips for the one after that right so just as to keep pace for invidia to keep you know printing cash and making their margins

they have something like 78% margins um that's the bull case what do you think about that i'll give you it's a hardware company with software margins and that's always been the most impressive part of what they're doing but i still two things on that is one even if appell and i agree that like let's say WDC, they bring generative AI and large language models to every consumer, even those who have never used chat GPT, suddenly every device maker is trying to figure out every operating system maker, how do we integrate LLMs into the way these work will increase the supposed demand for the actual compute and the chips. But I still think that everything that I've seen and worked with that these, the compute demands are going to get smarter and smaller, that the idea that everything

is going to require just massive, massive amounts of compute is actually not the way things are going to go, that like the actual use cases and actually applying this kind of technology will be able to be done with more specialized models, with smaller models. So that completely changes the entire trajectory and the way everyone's assuming this is going to go for in video. So I think that to me that's the biggest bear case within the stock itself. The other is they have a monopoly right now, but competition will and can slowly come in. And I think that's the other space that they have not had to really face yet, and they still could. And Jensen Huang signing a woman's shirt in a very provocative manner. Did you see this photo? I'm sure.

that was circulated everywhere. Of course. That was not a shirt, Ron John. He signed the boob. He signed the boob, all right. I said, he's like, should I do this? I don't know. A shirt in air quotes over here.

It's like, do not, do not do that, Jensen. I, Jenson. I know, like, she asked him to sign it, but just like, don't do that. I don't know. I get to, like, I wonder in Vida, their communications department, clearly he has kind of positioned and sold himself. as the new Steve Jobs. It's so well, the leather jacket,

the tattoo, rock star status. But I agree. Like, come on, man. Maybe, you know what? That's my reaction, but maybe I should lighten up. Like, it was a consensual thing. It was, it was funny. I don't know.

I don't know. I'm still, because you're just at, everyone is waiting for the top. And then like, this is, this is the kind of thing that you look back on. And it's just such. an easy one that uh you just don't need to do no but five minutes later they surpassed apple as the second most valuable publicly traded company in the world that's that's fair and we had a question

here on the live stream so we do live stream these on LinkedIn and youtube and here's a question from sir hot whether we think in video would stay as a hardware supplier or should it jump into a i application in the software stack and for my understanding it already is like if you're going to develop on in video you're going to use the chance and its CUDA software platform to develop large language models, and that's why it's been so irreplaceable. Anyway, as part of my Bay Area trip, I'm spending the full day inside Nvidia on Thursday.

So hopefully there'll be some stuff to talk about on Friday. A large chunk of it is going to be on background, so I'm not 100% sure how much I'm going to say, but I'm definitely going to be able to come out with a better understanding. And who knows, maybe I'll be able to recruit some people to the podcast that I meet. We'll see. But by the way, on your story about is this the top, I can't help but think about your zero interest rate policy thesis as the explanation for why there was so much silliness, right? Because there's somebody who's, he works for Facebook.

He has a popular account on threads and Twitter. It's called Carnage for Life. And he said this. Bitcoin is at 69,000. Roaring Kitty is sitting on over 250 million. assets from GameStop stocks and option. And then there's Nvidia's CEO giving out autographs at Computex. It's 2021 all over again. And of course he has the Jensen picture signing the proverbial shirt. What do you think about this moment, Ron John? We haven't even had a rate interest rate

decrease yet. Okay, Bitcoin and Roaring Kitty, which we'll definitely get into. I think those certainly mirror 2021. But for me, the overall AI-driven boom is actually a logical one. It makes sense. This is a, you know, like, that's like the transformation that mobile brought to the entire world of technology that cloud did. Like, this is as big if not bigger as all of those transformations. So there's going to be a ton of value created. And some, you know, big tech companies are already positioned to capture a lot of that. Some other people will. as well. So I think on that side, that's why this is a more logical, if we want to call it a bubble, than 2021 when remember like literally Zoom, Peloton, all these companies that things were extrapolated

to insane levels where they never were going to realize, be realized versus now. There's a, there's a real fundamental to the story. But yeah, Bitcoin and GameStop, okay, maybe not so much. Yeah. And Eric Newcomer has a very interesting newsletter out today, talking about how artificial intelligence is papering over the downturn. And he's saying software as a service companies, the bread and butter for many VCs over the past decade are having a rough go of it as enterprise customers look to cut costs and rationalize years of heavy software spending. And across the startup industry, downrounds are on the rise. Then you look in the public market. and the bounty of this, you know, rally has not been shared evenly or really at all by the rest of companies. Even Salesforce, for instance, had a huge down day. I mean, the worst day on the stock

market in its history, I think the last week. So is there a level of concern for you? That's a great point, actually, the idea that AI has kind of been papering over this. Because, yeah, like, you see those kind of stats that the big, you know, the big tech, What is it now? It's certainly not fang, but, uh, you could say you could call it fang and just put Oh, yeah, replace an invi for Netflix, which never belong there. I'll always hold that, that belief. Or you could just call it the Magnificent seven, which is the CNBC catchphrase. Magnificent seven, like, uh, you know, are the driving the vast majority of the gains while many, many, many stocks, especially software stocks are down. So I think that's, that's actually a good point. And it is a bit worrying then.

that if that AI fever dream loses a bit of steam, like, you know, that could, that could definitely remove that shine and it's not going to be good for the market. Man, interest rates go down and you add that to what's happening in the stock market right now, and it seems like things will just explode. Well, interest rates, but unemployment is still low. Inflation is not decreasing. It's, I mean, the rate is not increasing. So I don't think, it is funny.

I said that at the beginning of the year, it was expected. I think there would be three rate cuts. And now I don't believe there's any that are being priced in. So I think we're at this very, very weird, but I guess overall good moment where, you know, certainly there's technologies fun and exciting. The stock market is up. Bitcoin's at 69K, Roaring Kitty live stream today. So we're in a moment right now where I think everyone's trying to figure out.

what's next? Well, let's talk a little bit about what Roaring Kitty is up to. I mean, we are recording on a day where GameStop is down 39%. What has happened with this return of Roaring Kitty and what's your read on what it means for the moment? Okay, okay. So this is nuts. Like this is, I mean, in terms of, this is Ronchan Red Meat right here with Roaring Kitty. So I think a few weeks ago, Keith Gill, a.k.a. Roaring Kitty, aka. Deep fucking value, posted an image on Twitter where he was just kind of hinting that he's going to return. And suddenly GameStop started going up. And it went from $20 to $40. And it'd been kind of somewhere between 10 and $20 bucks for a while since the mania of a couple of years ago. And you're a longtime diamond hands holder of the stock, right? Oh, you, I mean, in terms of stocks, I just would never go near. I mean, I mean, again, I would rather just gamble on sports.

But, you know, anyone in true who's playing this game, go for it. So, okay, so my favorite thing is he comes on today. And he, so first he announces that he has these insane positions. He has 5 million shares, and then he has 120,000 call options that expire within two weeks. And that apparently this position is worth over $375 million as of this morning before this 40% decrease today. Then he today, he announced or yesterday said he's going to live stream on YouTube about the stock. And this pushed it much higher to over $47. The hilarious part of this is then their earnings come out and they're still losing money,

sales are declining. It's just this is not a great business. And he gives this whole, he keeps talking in the live stream about how he thinks Ryan Cohen and the team are the ones that are going to turn this around. But meanwhile, a big part of his position are two-week call options that will expire. Like this is not, okay, I really believe in this management team and I think they're going to turn this around in the long run. And it's just, I mean, it's such a hilarious reminder of those early meme stock mania days.

But to me, the crazy part of all, it's the craziest part of all of this is, have you been in a game stop anytime recently? No, I passed a game stop and said, I never want to go in there. I went to one a few weeks. It was over Memorial Day weekend. We were at a mall. I was visiting my parents outside of Boston. And I was like, you know, I'm going to go in.

they are the it's kind of the weirdest most depressing place again it's it's it's a few there's like a nintendo switch there's uh some games being sold there's some weird hardware uh like chotchky type stuff their little figurines being sold it's just kind of like nothing has changed around the business it's still losing money and sales are declining i just don't understand how long this kind of stuff can go or it amazed me that it still can go like this but I don't know. At some point, you figure people will have to try to analyze the business of GameStop and realizing that nothing has changed. But it certainly has not yet. Yeah. I'm sorry. I'm sorry. Asking that perhaps is too much in the stock market today. Yeah, I wasted my entire winter pretty much when I'm not working on playing Assassin's Creed. So I think I don't want to get anywhere close to video games for the near term. You know, it does get me excited right now. air conditioning that's my new go-to device i just installed a big one in the living room today and this

apartment is cool the best thing that's happened to me in a long time wait you didn't have an air conditioner i had i had a smaller one but now we got a powerful one this thing's blowing maybe game stop should start selling air conditioners maybe maybe they can sell the idea that they become the new best buy and best buy as a retailer has done very well over the last number of years so going into all consumer electronics, perhaps that's the move that Ryan Cohen and team are about to do. I think it's the move. It's a good business. Although some of the parts of the business don't make any sense to me. First of all, price matching. I know you have to do it, but like you have an air conditioner on sale for 300 bucks. Just let somebody walk it out with, you know, for 260 because

it's online somewhere. That to me seems ridiculous. One more thing. I just don't get free shipping. Okay. I'll let you. Free shipping doesn't make any sense. It's got to be expensive. to ship stuff. All right. So I can definitely get into this one. I think price matching, I mean, you figure it's a smart marketing thing to do. It gets consumers to you, especially as a physical or an Omni Channel retailer. And I'm sure, you know, there's clearly calculations done that if every consumer actually followed up with it, then I'm sure they would lose money and it would be a bad thing for them. But then, but as long as they, it's only a small percentage of customers are actually doing it, it's a great way to make people feel good about buying, especially at a

store, which is one of the biggest things, the problems. On the free shipping, this is my, and certainly this is a segue away from GameStop, but I do think Amazon spoiled everyone, and the economics of free shipping never quite made sense for all of online commerce, but Amazon basically by subsidizing from AWS and the prime membership cost so like convinced us that we all deserve free shipping that's fast as well and I think over time everyone's going to recognize and realize that it never made sense and more and more retailers are going to actually charge you just a small amount to it's so crazy for the shipping yeah so I bought this thing on walmart.com it was the cheapest AC in the market shipped yeah because I was going to buy it in store

they wouldn't match the price because it was some different model. So I said, okay, I'll just buy it from Walmart. It's $40 cheaper and free delivery the next day. Not even like a Walmart plus subscriber. It doesn't make any sense to me. I remember I had ordered adjustable dumbbells off Amazon like a year and a half ago. So these things, by definition, were over 100 pounds free two days or it might have taken a day. Jeez, I thought I was bad.

This AC is 55 pounds. but you're the real evil person just kidding all right so why don't we take a break and then talk about this open letter to open a i coming from a bunch of ex-employees and then i think there's like there's a narrative shift around sam altman that he's like all of a sudden a bad guy um i don't fully buy it so why don't we talk about that on the other side of this break hey everyone let me tell you about The Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily

podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less, and explain why you should care about them. So, search for the Hustle Daily Show and your favorite podcast app, like the one you're using right now. And we're back here on big technology podcast Friday edition talking about the week's news as we do every week and one there's been this like very interesting uproar around open AI over the past I don't know it seems like it's been going boiling since the attempted coup last year but really seems like in the past week there's just so much more scrutiny being placed on them the scarlet johansson thing certainly didn't help but let me talk about this open letter and then we can talk about the broader

narrative. So a bunch of X, current and X open AI employees, some names, some not, wrote this open letter to the company, or I guess to the public, talking about the safety risks that they see in the technology. So I'm just going to talk about the risks and I'm going to talk about some of their solutions right from the letter. They say the risks range from the further entrenchment of existing inequalities to manipulation and misinformation, to the loss of control of autonomous AI systems potentially resulting in human extinction. AI companies themselves have acknowledged these risks as have governments across the world and other AI experts. AI companies have a strong financial incentive to avoid effective oversight and we do not believe bespoke structures of corporate governance

are sufficient to change this like really poking at the governance of open AI itself. AI companies possess substantial substantial non-public information about the capabilities and limitations of their systems the adequacy of their protective measures and the risks and the risk levels of different kinds of harm however they do not currently have they however they currently only have weak obligations to share some of this information with governments and none with civil society we do not think they can be relied upon to share it voluntarily it's a fairly exceptional letter that's coming from inside the house so what did you make of this i loved the phrase bespoke corporate governance, the dig of like, yeah, of this never quite made sense. I think this is

both important and not. And what I mean by that is it's important that, you know, it's a reminder that open AI from the corporate governance standpoint has a lot of problems. And it's not, it just isn't fundamentally built to be able to operate in this way. They have to do something. and we've certainly suggested over time just rebrand the entire company call yourself chat gpt or something like that and just become a pure for-profit company but the part about this open letter that i just didn't find that incredible or fascinating is the fact that like the safety thing there's no reason this needs to be reserved for some like dramatic letter like these kind of things nothing is you know completely original we all know these are risks again if there is some hidden risk that threatens humanity that they know about if Q star is real.

That's all I care about. Yeah, I mean, that's all I care. If you're going to do a dramatic open letter, just tell us the real risk. Like, AI-driven misinformation, yeah, we know, you know, autonomous agents gone wrong. We know. None of that, this is new or original. So that part, I don't quite understand. Right. And then this sort of dovetails on this story in the, in the journal about it says the opaque investment empire making open ai's sam altman rich and it basically talks about how we all know sam altman he doesn't have equity in open a i necessarily he only make 65 000 a year but he has a web of investments he's very involved with the open a i startup fund and those investments in AI companies which he's able to spot are really the way

that he's going to make money off of this move and like allman had been very straightforward in saying that he thinks the mission is too important to try to become rich off of but obviously there were always going to be other ways and these are the other ways what did you think about this story this journal article i think is going to be really important in the annals of sam altman's legacy because to me the most important part was that he apparently has drawn a debt line from jp morgan chase his personal bank that he's drawn debt he's drawn hundreds of millions of dollars of debt to invest in startups which is kind of crazy.

Like, that's just not how venture capital investing, I can imagine, working at the personal level is to take on debt to finance startup investments. But it maybe can work for him because of the amount of conflict of interest that he's able to do, where he's able to, a lot of the startups that he invests in, then do business with Open AI. Open AI either pays them money for services or they somehow, pay money to open AI for services. Like, it's such a tangled web and this stuff never works out well in the end to me.

Like, whenever there's that many conflicts of interest, it's just something will go wrong. And remember, the central part of the whole coup back in the ouster back in, what was it, November was his ethics and his conflicts of interest and the way he's managing the company itself and the lack of corporate governance, which also, I mean, safety is a peripheral part of that, but he's doubling down on this way of operating. He's not moving away from it or trying to become cleaner. And I think it's going to be really complicated in terms of how he's last at Open AI and what his legacy is and his financial status. Yeah. I mean, he's doing this. He might be doing this like trillion, multi-trillion dollar chip company. He might be doing this, uh, uh, hardware device with Johnny

I mean, he definitely is working on a lot of things. He wanted to remain, I think, the CEO by Combinator as he built Open AI. But I do think that, like, that's important to view the story with like a level of context, which is that like it's not really, I mean, maybe it's like slightly conflicted, but it's not like evil stuff. And I think that like there's been a rush to portray Altman as like a bad, like as the bad guy in tech now. And, you know, you're starting to see stories of him as like this kind of you know the controversial CEO who apple would never want to put on stage and to me i just don't think that it rises to that level like yeah maybe not not the best set up but also like he's been behind this technology you know i mean if his biggest sin is investing

in startups that are going to benefit from it like so be it it's like he's taking these big financial risks to do it i don't know i just think that like i mean obviously not ideal but like this like moment where like it seems like the narrative around Sam is going to turn because that's what happens whenever somebody is built up is that all of a sudden it's like this counterwave of forces that try to change that narrative because that's what's interesting to me I think that falls a little bit short and the context is important to keep in mind see yeah no but I disagree I think this is this is important I think okay in I would agree that how golden boy his image and the narrative had been for long enough, there's always going

to be a bit of pushback and backlash at some point that everything's going to work in waves and cycles. But I really do think that this way of working, it's always indicative of more issues. If you're comfortable investing on the side, drawing down debt from your personal bank to invest in startups where there's 10 layers of conflict, I think that it usually means that there's other things that are going to be going on. Again, when you are fired as CEO and then come back and half of your safety team leaves and your company is $86 valued at $86 billion, but you still have to do 20 other things. I think these are all reminders that the conflict of interest investing is just, it's more reflective or indicative of,

just the way someone works, rather than just this thing to the side that's happening. Is that in itself a big deal or not? Yeah, that's a good point. So why do you think he's doing all these things? I don't know. I mean, he is one of those people right now. Like, his story, I feel, is not that well known. Like when he does interviews, it's usually kind of like grandiose future of the world in AI.

And just like, you know, that. Twitter way of speaking. It's very, very future driven. But like, who is Sam Altman and what drives him and what's his story? Even again, like, it's always been fascinating to me and it's never really been covered is, you know, his startup from looped did not do well. Like, I mean, it's, I think they'd raised 40 million and it sold for 50. So it, it wasn't by no means even close to Y Combinators or one of their early success stories, you know, they had Airbnb and Reddit and all these companies in their early classes. So he's just how he, and then became the CEO of Y Combinator and then now moves to Open AI, like who he is and what drives him. I think there's going to be

a lot more, and there should be a lot more of reporting on this and just trying to understand the motivations, because I agree. I mean, normally you would think being the CEO of a 86 billion dollar company that you were kicked out of and then you actually managed to get back to and to still retain control over would hopefully be enough. But apparently it's not. Yeah, but I don't know. He's still effective, right? Like Open AI, we talked earlier that they were able to, you know, make this deal with Apple while preserving their relationship with Microsoft, release chat GPT 40, twice the speed and half the cost. Bill would start training the next model, whatever that might be. Seems like it's GPT5.

this all seems like the product of a focused CEO, not somebody who's like sort of trying to do a bunch of different things. Well, no, but we don't know how effective they are until we see some kind of numbers. Because again, what is the actual revenue of this company? I think there's been some indications with $2 billion. Yeah, exactly. Like, come on, that's for being valued at $86 billion,

they're going to have to show some serious revenue. new growth somewhere and again maybe remember they're a nonprofit oh yeah i say yeah you're right so it's a donation yeah we'll find out more i'm sure so less close did you hear about speaking of tech folks who are in the spotlight and we're not 100% sure their motives uh did you hear about this leopold ashenbrenner uh he is the he's an ex open a i guy that is going out and i think he was fired for leaking but he is going out and talking about how there's a serious AI risk and also risk of China trying to hack AI systems and we should be worried about that have you did you see his is his media tour no I did not so

he's done a media tour this week I tried I DM'd him and invite him on the podcast he's welcome to come on I'd love to hear what he has to say so if you're listening you know come on on we get pulled but it is interesting and max reid pointed this out that he is going out going out with these messages of be careful of china and um you know watch out for existential risk as he's starting a fund right it's actually great marketing right and his he started this is from uh max reed he started an investment firm uh to back startups with capital from former github ceo nat friedman investor daniel gross striped ceo patrick colson and stripe president john colison what do you mean

make of this mixture of warning of what's impending, and then also being ready to back. Well, okay, so first I just looked him up, and I did see one clip of him going around, again, talking about exactly this, because he had a very, very memorable look and overall. So I definitely saw him, saw this going around. And I think, I mean, this playbook, Sam Altman perfected it. So I think it's not an unreasonable thing. This is the old Sam Altman classic. AI could kill us all.

So let's raise more money to build more products and move even faster to build AI, even though it could kill us all. I still think, I mean, that's the most, it's always annoyed me about all this. It is it describes this like potential for AI that clearly makes people think it's more powerful than it is. And then I think that's where there, I still think there's going to be some kind of trough of disillusionment, some kind of letdown when everyone realizes that AI still is going to be a bit difficult.

Again, like we talked about this after the Aaron Levy podcast. The agentic AI is the way to just sound smart in Silicon Valley right now. But it actually is an incredibly promising thing that AI will be able to be more autonomous and make decisions. Maybe Siri will understand. And again, you just say, oh, yeah, crop this photo and send it to this friend. And it will know which apps to use. You don't have to tell it how to do it or how to do this.

That's exactly the promise. But this stuff is probably going to be a little messy and not work great and take a lot of iteration. So the idea that, again, we're going to, AGI is going to kill us all. If they know something, please tell us. But otherwise, I think that's just the playbook right now. And it's working. Let me end with this. Assuming there's a little bit of marketing contained in these warnings or the end of the earth,

is it kind of a tricky playbook to execute because some of your employees will believe you and then they're going to write open letters and you'll sort of never have a stable company. Yeah, but the open letter is part of the playbook, right? You want your employees to be a little freaked out because then they write the open letters and then it solidifies this idea that you, that AI could kill us all and then you raise more money. that's at least a 200 billion dollar valuation oh yeah yeah every open letter increases the multiple by at least a factor of 10 yeah the joke's going to be on us Ron John when AI turns big technology podcast into paper clips right yeah I mean I think uh I will say I mean and I think

closing on and ahead of WWDC like how well this is actually executed in Siri and in iOS Again, this is the big question, like with agentic AI and autonomous agents, them being able to understand what is the next action to take is going to be one of the most valuable things in the way AI is actually implemented across all of technology. But I mean, at least from what I've seen and used already, it's not clean and easy. So I'm very curious whether Apple actually has made significant progress. And if they did, it's going to be with Open AI. and maybe they're worth $86 million. If they have an AI application that brings up an audience member and turns them into a paperclip in front of a live audience,

so I'll really be kin to believe in the potentialist technology. Tim Cook's like, hey, you guys were worried. You guys are worried. You were worried about AI killing us all. We're just going to kill one member today, one audience member. Come on up. Someone would volunteer, by the way. Someone would absolutely.

We need one of you here. We're very excited to kill one of you. Well, I hope to still see you next Friday then. But if you need to be the paperclip, Alex, go for it. I volunteer. Then it will be a solo podcast with Ron John taken as long as they fix Siri. As long as they fix Siri. Ron John's like, well, Alex is gone, but Siri is good. So it's a wash. We continue on as normal. Dude, great. Talking with these. as always. I can't wait for next week. We'll recap all the news. And there's going to be a lot of it.

So folks, stay tuned. We got a solo pod coming Monday. We have M.G. Siegler coming Wednesday. And then hopefully Ron John, myself and German sometime at the end of the week, hopefully Friday show. We have them. All right. That's it.

That'll do it for us here. We'll see you next time on Big Technology Podcast.