Big Technology Podcast - Musk vs. OpenAI, Artists Leak Sora, Temu Black Friday

Episode Date: December 1, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) Elon Musk tries to stop OpenAI from going for-profit 2) Should OpenAI be able to convert to for profit? 3) Should OpenAI be able to prevent investors from investing in competitors 4) What happens if OpenAI delays the for-profit conversion 5) State of GenAI 6) Musk's xAI raise and scale up 7) Artists leak OpenAI's Sora 8) Sora is actually pretty good 9) Evaluating Marx Benioff's agent pitch with Agentforce 10) Salesforce vs. Klarna 11) Klarna IPO awaits 12) Australia's teen social media ban 13) Huawei Mate 70 and its HarmonyOS 14) Temu's Black Friday deals 15) Alex almost buys an ebike --- 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]

Elon Musk attempts to stop Open AI from going for profit as he builds his own massive models. Artists leaked open AI saw a video generation tool in a protest. Australia banned social media for kids and Timu has a happy Black Friday. That's coming up right after this. Welcome to Big Technology Podcast Friday edition. We're coming to you on a Sunday during a holiday weekend and we're thrilled to be speaking about all the news with you because there's so much of it. Elon Musk is going on the offensive again against Open AI. We'll also talk about SORA's leak from artists and actually whether the videos look good or not.

And also Australia has been social media for kids under 16. And of course, Black Friday is a moment of change in the e-commerce industry. Now that Timu and Shian are on the scene and really gaining favor among Gen Z. Joining us as always to break down the news is Ron John Roy of Margins. Ranjan, great to see you. How you doing? Good to see you on a Sunday. Obviously, Friday was shopping on Timu the entire day for me, so... That's right.

And I was also hooked to Amazon, so we are definitely showing the generational differences. Me and old man shopping on Amazon, as usual, you a Gen Z whippersnapper on Timu. The American consumer is back. That's all that matters, Alex. But you did actually go to some brick and mortar shops during Black Friday, didn't you? I did. I actually, I was in the suburbs of Boston, and I went to the Burlington Mall, and I can say it was completely packed. It was more packed than I've seen it in years.

So I think at every level, whether it's online, whether it's at the physical store, the American consumer is definitely back. And we're driving a Rivian R1S adventure, the new SUV from Rivian test driving it, and hopefully we'll have something on YouTube to show for it coming soon. And, of course, you have to stop at malls to charge. And we stopped at Woodbury Common, which is the big outlets north of New York. And we'd like to, you know, get out of the car while it's charging on the supercharger because it still takes like 40 minutes. That also was packed. And the Nike store had a line and couldn't even get in there.

So we ended up wandering into the Puma store. And, you know, you have to do this every now and again. What did you buy at the Puma store, Alex? When your socks are all mixed and matched, and they've got holes in them, and I'm ashamed to admit, that's the situation of my sock drawer right now. You've got to just go full refresh on a Black Friday weekend. And so I walked out of the Puma store with four packs of six packs of socks. So 24 new pairs of socks. I got to say Puma socks are the best. And I've never felt better. I can't believe I say it on the show. But then again, I'm proud of that.

purchase. This is the technology news I need to hear, Alex. Are we saying, though, that the American consumer is back? Is that the takeaway here? I think that's the takeaway. I think your sock purchase will significantly contribute to Q4 GDP and put us all on the right path to a bright 2025. All right, everybody. So it seems like the market is going to be heading in a good, in a good direction. Thanks, of course, to my crazy, anyway, I'm not even going to go into this anymore. I can't believe we're talking about us. Let's move on to our main story, which is that Elon Musk is asking a federal court to stop OpenAI from converting into a fully for-profit business. This is according to CNBC attorneys representing Musk, his startup XAI, and others filed for a preliminary injunction against Open AI on Friday to stop Open AI from going for profit, which it's trying to do after its latest funding rounding, and requiring investors to refrain from funding. its competitors, including XAI, and others. Now, Musk, of course, did put money in the original funding of Open AI. He was involved in starting it with that nonprofit mission, and maybe he's

within its rights to stop it from going for profit. So I'm kind of torn on this one. What do you think, Ron John? All right. There's three parts of this as I was reading this story. First, I think Musk might be within his rights. And it's tough for me to say that, especially when it feels like a kind of litigious move here. But again, he is one of the original investors. It's never made sense that they should be able to make this conversion based on how this entire company was built. But the second point is it's still rich to me. Do you know what the current funding total was? Because we didn't even cover this on November 20th, the big story that came out on XAI's funding. How much have they raised right now? I mean, it's amazing to me that we kind of glanced over this a couple weeks

glanced over it. So we went like wild talking about open AIs 6.2 funding round, billion funding round. And Musk raised, I think, 5 to 6 billion for XAI, which is more than Anthropics 4 billion. The company just raised, which was like what, like, is this the second largest funding round ever after Open AI? It's almost odd that it barely there's like one Wall Street. There's one Wall Street journal piece.

And they've raised 11 billion total, and I think that that's only in the last 18 months. And yes, it was reportedly 5 billion. The company is now worth 50, sorry, yeah, 50 billion. I mean, this is a massive, massive capital event. And I agree. No one is really talking about it's just kind of GROC is still sitting there. XAI is buying up like GPUs left and right. But I think the idea that it's hindering competition is a pretty weak.

argument when you are raising massive rounds like that. So I think, again, it still makes sense. And remember, Open AI, this was a critical part of that last giant funding round, that they have two years, I believe, to convert to a for-profit corporation stipulated into the actual funding. So they're going to have to do this. We know they're going to have to do this. Unless Elon stops them from doing it. Unless Elon must stop them. And if they don't do it within that two-year timeline, don't they have to give the money back with like, an immense amount of interest. But I wonder, how does that work?

Because we talk regular. Yeah, exactly. By the way, that's why Elon's filing the injunction, because he's saying that, like, if you don't stop them now, they're not going to have enough money to sort of repair some of the damages. It's rare you hear completely extreme arguments that are both so right and so wrong at the same time. But can I just ask, like, I didn't even realize a non-for-profit can convert for a for-profit.

You know more about corporate structure than I do. What's going on here? I mean, in smaller instances, it's not completely unreasonable. Again, imagine you set up a 5-1c3, you're investing in some kind of like research, and then you realize a for-profit opportunity. Still typically, rather than converting, you would think that you would just create a new entity, which opening I could have done at some point. I don't actually understand why this entire thing has to be so messy in terms of how they keep trying to push this and still pretend to be open AI. Why?

The Microsoft money, because the Microsoft money has to be sort of tied up. Yeah, it put a lot of money in. Yeah, and Cloud and Azure credits as well. Yes. But yeah. To the non-for-profit. I think it's going to be, continue to be an interesting one. It's going to continue to be, I think, one of the more interesting things in tech.

However, though, and we're going to be talking about SOR. we're like chat GPT just generally is a having been home and talking to more normal non-tech industry folks over the week chaty PT still is the only brand that exists right now like no one else has heard about perplexity or clawed outspread that I was talking to outside of people I talk to in tech so I think there's still chat GPT is well positioned but I don't see this really derailing anything in there. I think there's going to be a nice, like, little side corporate insider tech industry conversation, but the idea that, like, suddenly they just don't, can't use that money anymore and that open AI will shut down because of some weird corporate

structure thing I don't see happening. I don't want to glance over the fact that XAI, that, that, that open AI has been preventing others from investing in XAI. Because yes, XAI did. didn't pull in that $5 billion, and Anthropic pulled in $4 billion from Amazon. But as we've talked about on the show in the past, it is really difficult to get that size of money from anyone. And so you're talking about a limited pool of investors that can actually invest in these massive AI companies. And OpenAI, I know for a fact, has told investors that if you invest in Elon Musk's

XAI, you can't invest in us. If you invest in us, you cannot invest in XAI. Now, I don't really know, you know, in terms of the legality of that, like, is that illegal or is that just business? But I do think that's like a legitimate gripe there. I don't think we should brush that off. It is interesting, though, remember, I feel like in the good old days of venture capital, that was actually standard practice that you don't invest in the competitors of your key investments so as to kind of like help push their own growth against your own existing investments in your portfolio. So I don't think, I mean, again, the legality of that.

that I think is probably okay. But we've talked about there's very few places that you can find $5 billion sitting around. But if anyone can find it, it's Elon Musk from the Qatari Investment Authority. He also had Sequoia and A16Z, who remember actually had stepped away from the Open AI. So I think it's kind of, again, as a bystander,

this is kind of fun to watch in terms of like you're really seeing the kind of everything lining up in these different camps to see who's going to actually kind of come out ahead on this. And as a consumer, hopefully, we'll get subsidized compute and keep generating all sorts of lines of code and poems and whatever else we want to do with our generative AI chatbots. So we build entire businesses on that subsidized compute only for the subsidies to run out and then everything falls apart. Yeah, but you know, you raise a bunch of money and more and more and then cash out.

Yeah, exactly. Do you think there's a chance that Musk pushes this to the point where Open AI does hit that two-year window and it just has to give the money back? I think it was just yesterday. We're at the two-year anniversary of the launch of ChatGPT publicly. So two years, like two years is a long time in this whole space. So where we are two years from now, I am not even going to try to pretend to predict. Did you see the coverage of the chat GPT two year anniversary? It was really weird. It was like there were some stories. One in Axios that stands out to me that was like chat GPT turns two. It hasn't changed our lives. It's like that's the beginning of that ROI conversation that you said, you know, very spot on is going to start to, you know, hit in 2025 where we've gone from magical, oh, what does this do to like what does it do? Okay. So I walked away from last week more bullish than ever. And, regular listeners will know that my kind of position on generative AI is overall incredibly optimistic and bullish, but still I have issues with kind of the way certain parts of the industry are developing. I walked away more bullish than ever. Even so my dad, my dad currently, he has Parkinson's, so he has trouble typing. I introduced him to chat GPT with the voice interface, logged him in on my paid chat GPT plus account. It was like you could see just

the kind of light bulb brain exploding as he's looking at his phone and just talking to it and asking all sorts of questions about different medicines, about F1 results in past champions, about anything and just having this conversation. And it's just one of those moments that you realize, like, we are still on the cusp of just, I mean, it was, with generative AI, these kind of profound magical moments come every now and then. And that was one of those where you realize, like, most people are still not really using this technology, and there's so much room and potential for it. So I think we're still, two years, it's crazy to me that it's only been two years since that was released publicly. Like, when I actually think about in terms of,

like, overall time frame of, there was a long conversation about the lack of innovation through the 2010s and the fact that, like, 2020 or 2019 looked the same as 2011. You basically still were using some iPhone apps. You had some subsidized hotels and taxi rides, but not too much had changed. So the idea that in two years this much has changed, I think is still pretty incredible. Yeah. And the voice interface is really something that's like starting to spread. Because remember, like the voice on chat GPT, like the new voice only recently came out.

And I just saw another example of somebody like in a hospital and a foreign country, like having to translate through three languages to get. get care and using chat chippy d voice and the attendants in the hospital being like what the hell is that yeah no no and i will again to open a i's credit the way they do their ui is still pretty impressive like right now even the way and not to get into my complaints about syri which are regular uh feature here like it looks really cool they have this kind of like globe looking thing that like gets bigger and smaller and then even the way they have these little kind of like they insert these little phrases from the voice to make it sounds more natural and again i think i'm starting this was one of the first times that i saw when i'm using these it's still more kind of testing them

and trying to you know like as a more technology professional trying to see what i can get out of them This was where it was just pure utility, pure just, I am not trying to, like, understand this technology. I'm just trying to use it. And it works. It works really, really, really well. So now that we've sung the praises of open AI, let's just go back to Musk for one more moment before we move on. Because should we also not glance over the fact that he is building a massive, massive infrastructure to train. open to train AI models with that money that he's raised and we've talked about it a bit on

this show a little bit but uh the wall street journal has a story inside elan musk's quest to beat open ai at its own game um and it says uh there he's got this uh data center called colossus in memphis tennessee it was constructed in 122 days it uses 100 000 GPUs making it one of the largest clusters of chips to develop and run AI in the world. An XAI has told investors it will use some of the $5 billion it raised to double the number of chips and colossus and that it plans to raise more money next year. So, of course, we've talked about how there are limitations

to the scaling laws in AI. But if you throw that much raw compute at this problem, and by the way, they're also telling folks they have exclusive data from Tesla. I don't know how useful that will be. but Twitter, that'll be useful. So it has two of like the core ingredients, data and compute size. And you know Elon Musk is going to find a way to get it the energy.

Is there a chance that they, when they release whatever they're working on, either stand shoulder to shoulder with Open AI or surpass it? I don't think it's unreasonable. Again, betting against Elon Musk is never the ideal bet. And I think that's a good point that you're, they have. the data. They have the compute and the capital. They potentially can like understand the underlying energy infrastructure better than others. So I think that makes a compelling case. It did make me wonder if I had gone home and my 79 year old dad was using grok and that was like my learning from

the week. I don't know how I would have felt about that. Yeah. It was like, hey man, I'm a full on grok head. That's what I've been doing. Because Elon had, like, first portrayed the grok as, like, the anti-woke AI, and it would make, like, all these, like, really corny jokes and just be, like, just incredibly cringe-worthy. And so I do wonder putting all this money in whether it starts to moderate the tone that it has, or is it, is he going to put $5 billion in and make it, like, conservative bob? I still don't, like, okay, maybe the, like, the 4D chess idea here is. GROC is just kind of like consumer-facing attention-grabbing extension of what they're really building. And again, I'm trying to be a little like try to read the tea leaves here a bit. But I cannot imagine that GROC is the like chat GPT for XAI as like what chat GPT is to open AI.

Because it's still, yeah, the way it's been positioned, it's around this anti-woke chat. but, like, it's not, has not been positioned as this, like, really life-changing tool accessible to all people. So there has to be something else going on, I hope. Yeah. And the story of this colossus cluster in Memphis is such an Elon Musk story. So he was going to work with Oracle. He decided that they weren't going to meet his ambitions. This is according to the Wall Street Journal story. So he buys a decommission manufacturing facility in Memphis, begins construction in June, employees worked nonstop in three, eight hours shift, and they figured out the plan as they were going instead of planned it out ahead of time, which typically takes seven to eight

months. By the way, as it waited for approval from the Tennessee Valley Authority to get more energy, it put natural gas generators in the parking lot to power the facility. And local residents said they weren't told about the data center in advance and were concerned about pollution and it's just like the typical Elon Musk story where it's like building things that typical processes would never ever enable to build but also do it like with effectively a disregard for like the local environment that he's in and and just uh sort of operate with a level of controlled chaos where those you're doing the nonstop eight hour shifts and also instead of planning just doing it and figuring it out on the fly just like this is if you were going to

say give a case study on how Elon Musk builds things this is it i do wonder and maybe there is like something to this story that's even bigger is that like the ability of companies to scale data centers is going to become a core competency like up until now that's been something that again open ai outsources and uh i mean i'm assuming Anthropic does as well. And Google and Microsoft, their entire data infrastructures are things that have been built in very reliable manners, but still kind of more traditional manners. They invented this industry. So the way companies are able to more rapidly gain compute like this and scale their data infrastructure could be interesting. Like it could be something that

we didn't think what right now all anyone cares about is how good are the models, how good are the tools for people to use them. But maybe that does become a bigger part of this whole battle. And then I would agree that Elon Musk and XAI probably have an advantage. Both, like he builds physical infrastructure. And that's what he's been doing for a long time now. And he does it differently than most. So maybe that could be a thing.

Yeah. This thought that the ability to scale data centers is going to become a core competency is so interesting. And so I think spot on. and in fact I am flying to Vegas tomorrow morning and tomorrow afternoon I'm going to be sitting down with AWS CEO Matt Garman and I think this has got to be one of the questions

that I bring up to him because if anyone's going to know how this battle is going to go, it's him. So everyone can stay tuned for that conversation on the feed coming Wednesday. I love when Alex drops the big name interview without any prior and I walk right into it. I mean, it was perfect setup and also, I mean, I think this show is on a role.

We had Rivian CEO, R.J. Skorinj on a couple weeks ago, Benny Off on Wednesday, which we're about to talk about. And now Garmin coming up. And then I think we have an even cooler interview that I'm also going to record next week that I'm not going to tease right now. But I think it's going to be awesome. So stay tuned for that. Okay, let's move right to SORA. Ron John, you and I have been talking about SORA, Open AIs video generation model, and why it hasn't arrived and what's going on there. and then all of a sudden this past week we got a look at it because there was an I think anonymous group of artists that were testing SORA and they leaked it. They said we this is on hugging face they posted. They said we received access to Sora with the promise to be early testers, red teamers and creative partners. However, we believe we instead are being lured into art washing

to tell the world that Sora is a useful tool for artists. All caps. Artists are not your unpaid R&D. We are not your free bug testers, PR puppets, training data, validation tokens, skull emoji. And so therefore, they put it out on Hugging Face for all to use. Open AI subsequently shut down the access to SORA, but a lot of people used it to generate some like pretty unbelievable AI videos. And I'm curious if you got a chance to take a look at them, Ron John. and what you thought about what we saw there and whether their protest was valid.

All right. So first, I definitely saw a lot of SORA videos coming up in my feed. They looked pretty good. I was actually surprised. I'm like, okay, you know, there's been a lot of doubt around, generative video is hard. And there's been a lot of hype around it. And I've played with, like, a lot of tools like runway, ML, and others that are interesting,

but definitely far from very good. They looked good. Can I pause? These videos are amazing. They are so good. And you have everything from like somebody in a video game. You have a world building map. You have a monkey doing a puzzle.

You have a guy looking at a laptop. You have a cat in a pirate hat riding a Roomba. I mean, these videos are excellent. And they don't have like the deformities that you would typically imagine. And even it doesn't seem like this version came with any guardrails at all because there's a polo bear sitting in a snow with a Coca-Cola can. And so you could imagine like what this does for brands and things like that. These videos are incredible and that they're animated videos also that like you just like your mind gets going. And you're like, oh, could this be a way that people create new animated shorts or even full cartoons?

Like I don't see a reason why that wouldn't happen. Okay. So what's interesting to me is first the term art washing is my new favorite term. I hadn't really thought about it before I saw it in that statement, but the idea that these companies, again, using artists to kind of like add a veneer of credibility to whatever tool they're releasing and saying you can test this and this is the reason. But the funny part to me is, as you said, okay, I'll give you pretty amazing the videos are. And in a way, if they were trying to avoid, art washing, they just did it because now everyone is showing that these are pretty good videos. The videos that I were seeing being generated were from a lot of handles with like Web 3 and crypto and DeFi in them and like who were verified on X. So it was interesting that like somehow it worked as a brilliant PR move in the end because now suddenly everyone's like, oh, wait, SORA, it's actually good. People can really use it. So I think open AI comes ahead in this one as well. But it's interesting that the artists weren't really interested in

the copyright things. They were just basically like, we do not want art, the creation of art to the value of the creation of art to accrue to a company. And they started putting out some like open source versions of video generation tools. That to me was interesting. I thought maybe this was going to be a moment where these videos are so good that all the sudden society takes a look and says, whoa, you know, we've been feeding these machines like some of our, you know, most esteemed work and now it's coming out and producing stuff that's like actually mirroring some of the best animation we might have seen or can create lifelike shots and that's a problem, but no, it was just a fact that it's, you know, sort of accruing to corporations. And it just

kind of shows to me that this this train has left the station and basically like this stuff there's no turning back it's just going to be a feature it's going to be part of the world you can't really push back against it I this is something where I still lean on the side of like I genuinely think it's net good for just allowing someone who is not a you know like a professional video producer to express themselves creatively and I think it's the same idea that again if it like you know, before you needed a printing press to try to get your words out to the world and now you can just write a newsletter or, you know, like write a document. And each one of these are an extension that just allow more and more people to be creative. And I think that's a good thing. I think

what are the copyright implications underlying a lot of these models? I still think there's work to be done. And I'm curious, like, it's everything is moving so. fast that it feels like there won't be some kind of answer around this. But I think there's been multiple news agencies that have sued Open AI in recent weeks. There's still you can see Open AI fighting against, there's the famous, it was the Italian plumber on Dolly, because like after there was one lawsuit, they were trying to block all kind of copyrighted image generation requests. But all you had to do, you couldn't say Super Mario, but everyone was just doing a cartoon Italian plumber and it shows exactly Mario so and in some kind of compromising situations let's say a lot

of people got him into so he's not messing with Mario people don't mess with Mario he's just a hard working cartoon plumber he's just trying to make ends meet save the princess but so like it feels on one hand that things are moving too fast and we're never as you said the genies out of the bottle. But on the other hand, I do think there's still the possibility that in 2025 we see some kind of landmark copyright lawsuit that actually is resolved in some kind of interesting way that could change the economics of these companies. Yeah. And it's not lost on me that OpenAI had to approve every image that was coming out from these artists while they were testing. And that really pissed them off. And they're like, okay. Oh, of course. Of course. Come on. But,

that being said, I think our core takeaway both is that now that we've seen some of these videos from SORA, we're more excited than ever to actually use it. No, I genuinely get excited. It's like, again, the first time making music on Suno that was genuinely exciting and thinking about what can I do with this. When I look at these videos, I enjoy a little bit of video editing and, you know, trying to make some like funny little videos. This makes me think I can make some pretty cool stuff. And that's exciting for me. Definitely. I mean, sorry, go ahead. I will happily do your art washing open AI. Send me the link. Give us access. Come on. Send me the link. I will wash that art all day for you. As well I. Okay.

So we have plenty more to talk about, including Ron John's perspective on Mark Beniof's view on agents, the social media ban in Australia and how Timu and Shia infactored on Black Friday. So that's coming up right after this. 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 Hustled 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 coming to you on a holiday weekend Sunday. Let's talk quickly about this Mark Benioff perspective on agents.

So this is the way I put it in my recap of the interview. By the way, by the way, if you are interested in the interview, we of course will have it as the most recent episode in your feed, my conversation with Salesforce CEO Mark Beniof, but this is how I put it in the summary. Instead of our own assistance, Benioff thinks all companies will build their own AI agents that will act on our behalf when we check in with customer service or need regular attention. And he's angling Salesforce as the data provider that will make it all work. Basically, like our view of agents has been, like it will be an agent that acts on your behalf, uses your computer on your behalf. And Beniof is saying, I have all

your sales data, all your customer service data. When you need something from a company, you just check in with them. They're going to use Salesforce as the back end. And that will be the agent that enables you to do more. So we'll be coming from the corporate side, as opposed to necessarily the individual side. Rajat, I'm sure you have a perspective on this. And I'm curious what you think about this. Is this the future of agents? I agree with Mark. In theory, in theory. I agree with Mark. I think this idea, he's exactly correct. He has the correct vision that agents will be built by companies to solve existing workflows and problems that they already have some like heavy processes around potentially a lot of people involved with. It's not going to be,

there's like the augmentation side of it where you're actually helping an individual do an existing process better. And then there's the replace monotonous. repetitive processes completely and remove people from them so they can do higher value work. I think the second scenario is the more likely scenario and probably going to be the better one because it both, I mean, and it's going to be disruptive. It will be completely disruptive, but it allows, it's going to be more efficient for companies and their bottom line. Again, like replace the repetitive monotonous workflows and processes with AI,

agents and I think it'll allow people to do more important work and this is what we've seen I mean through any kind of like disruptive transformation and how work is done from the factory line to computers coming into the workforce and I think this is what's going to happen again so what do you think that means for the plans from like chat GPT from sorry open AI and Claude to build their own version of agents you know they've had this like sort of platform attitude where they want to build the big platforms that will take over your computer, interact with every service on your behalf,

and their vision is that will be from the perspective of the consumer. I mean, maybe their bots, the bots that they build to interact with the Salesforce bots. But, you know, I'm curious what you think it means for like the broader vision from these consumer-facing companies.

I don't think it changes that much because the split between enterprise and consumer is how this world of socials, software works today. I think some of these companies made it feel like maybe there would be more of a blurring between the two, but this could just be a reminder that there will be some companies that are the winners in enterprise. Again, Salesforce's and service nows are not companies that are on the tip of like the tongue of every regular person. So there are companies that clearly want in enterprise that don't touch consumer at all. And I think that's going to

happen again. Because again, businesses will have very, very specific needs where they need to build things that actually help them run more efficiently and do work better and make people more productive. And then individuals, like the idea that an individual is going to let Claude take over their computer at work to try to figure out how to do their own individual job better, I think is never, was never going to be like how this works. There's always, there's too many different teams and functions and data sets and whatever else within any organization that no one person is going to be the one to build that agent. It's going to be like the company that does it. Fascinating. So this is a clarifying moment here. It's like basically

Benioff has the right idea. I think he has the right idea. I think Salesforce and Agent Force. it's interesting though like how they're approaching this is they're coming at this in a big way which which has been interesting to me rather than just you know like releasing it letting people use it showing the adoption yeah this is and again he's one of the world's greatest salesman and like but this it's such a marketing heavy process and this going back to what I was saying earlier again very long-term bullish short-term worried this is the kind of promise in marketing where I do worry that when every one of these customers of Salesforce like sits down, sees some demo, hears some vision from Benioff, and then tries to actually build what they're trying

to build and realizes, wait, this doesn't just magically work. Like agents, the biggest like disconnect I still see is the promise of agents is that, you have like 10 steps in some process. The idea is eventually the AI agent will be able to make a decision at every step of that process about what to do next. That is hard. That is going to, that I don't want to say it's impossible, but that is going to be really, really hard.

Whereas, maybe you take some, there's some like hard coded if then logic. There's some generative AI sprinkled into some layers. There's some things that people literally. hard code into these workflows. I think that is a more realistic idea. But the way they're pitching this right now is you just plug it in. The AI knows what to do at every step of the way, knows where the data is. And that, especially for large corporations, I don't see, is realistic. $2 per conversation, if it can pull it off. Is that a good deal? That actually was a good

deal. I liked you. You had brought up the pricing around $2 per conversation. So the price, two bucks I think customer service is expensive for anyone who calls and gets frustrated with like any kind of retail customer service it is pricey it can definitely cost a lot more than that so that I think is okay but one thing that's interesting is pricing per conversation I don't think is going to be the model I think it's going to be pricing per outcome and I've seen this from some other some other like AI sales CRM transformation type of companies that they actually until it you pay for the resolution and all because again the AI the time spent and the number of steps it takes to get to the outcome is no longer as important as

it was when it was a person dealing with it so I think pricing per outcome is going to be the right business model not per just not for just having the conversation okay and one last thing I want to touch on Benioff's comments on Klarna and you also have some thoughts on the Klarna IPO so let's do that and then we're going to move on to this Australia social media bill. Oh, so I loved the fact that you asked about the Klarna CEO talking about canceling Salesforce because Benio replied, they said they were canceling, but I didn't get their cancellation notice. All I saw was a lot of provocative statements. At the same time, they're also writing on LinkedIn about how they're loving slack and rebuilding it. So I like, like, again, Beniof.

We just talked about how potentially overselling, but at least being very grand in terms of the vision that's being sold and him calling out and recognizing another CEO who's able to do the same. One of the interesting things about that was Beniof mentioned that Klarna is going to IPO and they're going to have to show Wall Street statements about workforce and statements about their pipeline and data and that stuff that's typically housed within Salesforce. And he's basically like, you're going to just throw that into an AI system and, you know, have it spit out the answers. And he's like basically like, I'd like to see them try. So I'm curious, A, do you think this is true that they're really moving off, given the fact that the IPO is coming? And B, what do you think about the Klarna IPO? And Klarna, of course, for folks, is a financial technology company that lets people pay for things later, among other activities. Sorry, go ahead.

Yeah, so on A, what's hilarious to me is what Benioff is kind of accusing the Clarnes CEO of is exactly what he is promising, is that there's going to be this new infrastructure that allows you to just take all the data that sits in your computer, I said sits in your company and corporation, and just have it all analyzed and run and magically like execute these processes without having to have too much software. Of course, his argument is that the only software that will be able to do this for you is Salesforce. And Clark is basically saying, okay, we just don't need the Salesforce layer to do this. We can do this ourselves using just any existing LLMs. But they're both pitching the same exact vision. Benioff's just saying

that you need Salesforce to do it. Yeah, I didn't even think about it that way, but it's true. In terms of the IPO, I was reading Klarna's IPO, I think, is going to be a good bellwether for tech IPOs have been far and few between. I think 2025 is going to be a really, really interesting year because there are dozens, if not maybe hundreds of unicorns, especially some very, very hefty valued unicorns that have been waiting to go public at some point. And next year is supposed to be the year And Klaran is supposed to be one of those There's a number of even within FinTech There's like Chime, Brex I think a few others ramp

They're all supposed to kind of be this new class of newly public fintech companies So I think in terms of Will we finally see the wave of IPOs That we got a bit of it in 2021 And it stopped Are we going to start to see them again next year? we're supposed to and it's going to be really interesting for the overall markets whether we do

and what do you think clarnas chances are and do you think all this AI hype that they're doing is part of their sort of sales pitch to wall street when they come out yeah i think i think they're playing this really well i think and again i i said it i listened to your episode with the interview with the clarnas CEO and he he gets what he's talking about like there's no doubt i was a little skeptical going in. And I like that he did recognize it was that it was for the hype. But the way you can tell when someone is talking about like they've done the work. Like they know this isn't just, oh, we are using GPT40 to magically transform customer service. Like he was actually talking about starting with certain simple things, scaling them,

which parts exactly of the overall customer service process you can automate with an LLM. So he gets it. I think it's going to be a good part of their story. And it's, it should help them. I hope it does. Yeah. It's going to be interesting to see. I think as Benioff mentioned, like, once they come out, like are they able to produce accurate data? They actually really canceled Salesforce. These are going to be some interesting questions that we're going to ask as they hit their roadshow. So in Australia, this isn't a story that's been percolating for a while and seemed to have a big moment last week. The country has passed a ban on kids using social media under 16. So under the age of 16.

So 15 and under, you are not able to use social media. It's from one of the stories under the new laws from CNBC, under the new laws which are scheduled to come into effect in about one year. Children in Australia under the age of 16 will be banned from setting up accounts of popular social media sites, including Facebook, Instagram, Snapchat, and TikTok. Australia's ban is wildly popular with voters. 77% support the move. And there's been some terrible things that have happened to kids in Australia

as there have been to kids all around the world who have used social media and either felt bad about themselves or become obsessed with, you know, self-harm and then gone and taken action. And if one of these platforms are found to have not been enforcing the age limit, the penalty could be as much as $50 million, I think. Sorry, $50 million Australian, which is $32 million for breaches. And I think that's per breach. So this could be quite costly if they don't enforce it.

Of course, there's some weird things about the bill. Like they're not allowed to check government IDs. So how are you going to know if a kid is actually 15 or under? I don't know how that's going to work. But I personally will say my perspective on this bill is positive. I don't believe kids 15 and under should be using social media. And I don't think you can really do this. unilaterally as a parent. If your other kids are using social media, you can't say my 15 year old

will not because they become a pariah. And this is a place where government intervention is actually quite good because it just makes everybody ban it. What do you think? I think this is such a perfect example of unintended or poorly drafted legislation that has the exact right intention. Because again, I 1,000% agree with you that the idea that especially like middle schoolers, early high schoolers are sitting there and like social media and the algorithmic interactions behind it are actually driving their well-being and how they're kind of like how they socialize. But I think this ban, it exempts YouTube and under the auspices that it's a health and wellness platform and education platform, which yes, you can argue maybe. But again, as I'm now reporting back from a week with the norm, normies, my niece was just YouTube shorts all the time. And YouTube shorts is TikTok two teenagers, and she's 12 years old.

And I've seen this with other friends kids as well, that YouTube shorts, YouTube has quietly defeated TikTok among younger people, I think. And it's the same thing. It's not, it's just scrolling, scrolling, scrolling. TikTok is not a social network as much as, like, in the same way of Facebook ever was. Even Instagram with Reels is not a social network in that same traditional way where people are posting a photo of himself in a nice situation and waiting for comments.

Like all of these are moving towards pure, just kind of unhealthy media consumption platforms. And I think this misses the mark. on by exempting ticket uh youtube so your big thing on this is like good idea but it should go further yes 100% they i mean youtube oh here we go youtube maybe shorts cannot be accessible to a non-verified teenager i don't know i get the verification side of it it's going to be the most complex part of this but it's as all these companies they're all moving towards again, Instagram with Reels, YouTube with shorts. They're all moving to that same kind of passive consumption TikTok model.

And TikTok is not a social network in any normal sense of the word that we use it as. So I think it has to be thought of as differently. This kind of like feels like if you took social media circuit 2017 and you were trying to come up with, what is social media and how do we make it better, which is something I've written about back then. This feels like something I would have thought then before TikTok changed everything. Yeah, I think if your main claim is that this is something that just needs to go further and I'd still sign on for it. But I do think that it'll be really tough to take YouTube away from kids and especially from parents giving YouTube to kids because it's like YouTube on the iPad is the new pacifier and it's going to be very tough to like take that away. And then you get into competition issues where it's like, well, what about Netflix?

you know so i don't know that's where it really gets a little bit difficult but i think this broader idea of like let's use government power to sort of enforce some sort of limits on the on kid use of social media i think that's that's quite good and it's going to be interesting to see how this this all plays out because um i don't know kids that young being having access to social media uh it's it's rough and it will cost these companies some business, not being able to advertise to kids. So we'll see how that goes. But I don't think there's any perfect way to do this.

And I think what the nice thing about, you know, tech companies often try, they test in Australia, right? It's like English language speaking and they're not going to tell anybody back in the U.S. what's happening. So then you can have a control result and a variable result and see what's better. So let's test this one in Australia. Be it a testing nation. Thanks for doing this.

And we'll figure out how it goes. I am looking forward to visiting. Australia this Christmas season. I'm thankful for Australia taking the hit on whatever these new features and test limits are. Exactly. Okay, one quick item I want to touch on. I just am sort of bringing this up because I think this is important and we should talk about

it and it's going to have an impact in the tech world and we can just do like one or two minutes on it. But Huawei launched the first phone capable of running its new self-developed operating. system called Harmony OS. And this is with the Mate 70, which is basically has these new chips that put it on par with the iPhone. And I'm curious what you think about this because it could be a real big deal. I think this could be a big deal. I mean, we're already talking about Android potentially being spun out of Google. We know how much iOS has become critical to Apple's dominant position. So the idea that a fully self-developed mobile operating system could come

from a different company, I think would be big if this actually works and this actually gets rolled out properly. I don't know. Why do you think this is such a big story? I think A, we know that Apple has struggled to sell iPhones in China. What's the reason? Chinese developed phones have become much, much better. And so that's made a huge difference. And I think this could actually be a challenge. To Apple, the more of this comes, the more of this rises, because again, 20% of Apple sales come from China. Then you think about the global dominance. And more and more in places like Europe, where they're allowed, Huawei phones are making an impact. And if they have better chips that enable them to run like an iPhone does, and they have a better, and they

have their own operating system, this could be a real, not only area of a business challenge for manufacturers like Apple and technology companies like Apple, but a cultural challenge where you'll see certain apps preloaded, maybe WeChat become standard. I mean, I'm just spitballing. But I think this is something not to be ignored. The fact that China is starting to make some really good smartphones the same way they're starting to make some really good EVs. Wait, that's a, okay, I'm with you on that that it's something that hasn't existed before. And as we'll talk in just a second, you know, like expanding their own retail powerhouse companies outside of China into the rest of the world has upended the industry completely. The idea that this becomes really the first way to take the

Chinese internet and expand it outside of China, could it be WeChat as a default app, as you said, or who knows? But I agree. It completely changes how technology is distributed around the world. and that's something that America has been completely dominant as every smartphone in the world is Android-based at the least, if not on iOS. So that could be big. I also, I will say, do you ever see that trifold phone that Huawei released?

Sure did. Yeah. Apparently I just looked up, they're going for $6,000 on eBay. But if this, maybe I will be using Harmony OS if that price can come down just a little bit. All right, let's come for a landing this. week talking about Black Friday because of course it's Black Friday weekend moving into Cyber Monday.

Is Cyber Monday even a thing anymore? Like back in the day when there was the internet and there was brick and mortar, we would do Cyber Monday. But something interesting has happened this year, which is not a surprise to our listeners, which is that Timu and Sheehan have really gained, especially among young people. So where do people do their Black Friday shopping? This is according, this is from modern retail and a test research. 80% said Amazon, 62%. said Walmart, 37% said Target, 24% Best Buy. At the very end is Timu, 21%, and Sheean, 14%. But then the numbers are quite interesting when it comes to Gen Z.

Gen Z respondents said they plan to do their Black Friday shopping on Timu at 24%. And then Sheen at a quarter. I think, wait, I think, you know, one quarter, more than one quarter said Timu and 24% said Shien. So you have these two Chinese retailers making up effectively 50% of all Black Friday shopping for young people. One comment and then a question to you. Comment is, I had no idea that you could even do Black Friday shopping on a Shian or Timo because I thought they were already discounted to the bone and there was no, you couldn't go further. So that's interesting to me. And the question to you is, is this a sea change in behavior or something that's more minor?

Because when we talked about these two companies, it's always been like a push and pull between like, you know, are they actually a threat to Amazon or are they just like one tiny percentage? But seeing 50% of Gen Z doing their Black Friday shopping on these two sites cannot be something received very well within Amazon HQ. On your first point, I will agree that I did go on Timoy, I did not actually shop on there on Friday. These sites are so heavily discounted.

I could not even tell whether there was any actual sales going on or whether it was some other like dark patterned UX trick to try to make me think. But when Timu, if you go on it any normal day, literally it says 100% off on the order is the banner up top. And then there's a bunch of like little customer journey tricks it takes you on on some crazy path and if you're just trying to buy something um so yes i don't think they're giving real sales what's interesting though that and reuters have reported on this is that timu was bidding on terms like walmart black friday deals coals black friday bedbath and beyond on google search

and then increasing the actual cost per click for each of those searches for the original retailer itself so they are going head to head with america's large just retailers and trying to pull away business. And again, this kind of like competitor keyword bidding is not unheard of at all in the retail world, but they are moving in aggressively on this. But given their existing prices, I did, there's one line. It was saying, we are witnessing the death of Black Friday, a Bloomberg opinion contributor said, not because people stopped shopping, but because they never stop shopping. And I think that's actually the biggest takeaway. of this is that they have made shopping at severe discounts, something that we would wait for Friday

for as the norm for a lot of consumers. And that does change this whole thing. That's why Amazon now is not Black Friday. It's Black Friday week. And everyone, it's Black Friday weekend. It's no longer just one day you get these deals. Is Cyber Monday still a thing? Do you know Cyber 5? Have you heard this term? So in retail, originally there was Black Friday, then there's Cyber Monday, then because they noticed people start, we're shopping from Thanksgiving to Monday. There's a few years, it was called the Cyber Five, basically the Thursday to Monday shopping period. And now I think everyone is just looking at this like, you know, it's weeks. I'm sure your inbox has been clogged up with Black Friday promotions for many, many, many days.

days now. And people are shopping. I think Salesforce, their retail segment released some numbers, Shopify release numbers that overall this is supposed to be a pretty good Black Friday. And Timon and Sheen did not steal all of Walmart and Cole's business, but overall, yeah, I think consumers now, it's the idea that it's just a Friday is long, long gone. Right. And we did a big Black Friday sale on

big technology substack. So if you're a subscriber, check your inbox and maybe sign up maybe you'll you'll you'll have one last big black friday purchase left than you and i might have one in me because ronjan i'm about to maybe do something crazy what are you going to do well i just went to teemu dot com and i saw a beautiful thing what did you bike for adults 400 watt motor 20 mile per hour to 25 mile per hour range it has a 14 inch tires. It's a big boy. It looks like a motorcycle. Originally on sale for $2,0.2.96. Black Friday deal, $311.20. An 84% discount. It doesn't say whether it will burn your house down or not, but this is a beautiful looking e-bike. They've sold 1.2,000. It's the number nine bestseller

on the site. It has a 4.5 star rating. this is baby j in the u.s i love it i got it to commute to work and had my first day with it and everyone loved it as well it's low-key sexy as heck to find my style and definitely worth the money another user t a star star star 23 excellent i bought this for my husband for our anniversary and even with him being six four it's very comfortable and has amazing power behind it great for the cost meets expectations and i'm looking at here i'm thinking about adding it to the card at an 84% discount me on the i don't even know if it has a name wait does it have a name that's what i was going to ask because i just called the timu mobile coming to a street near you

i i just went on timu and searched e-bike for adults as well and i see the chroma 750 watt adult electric scooter that has a photo of an e-bike with a little puppy in a basket kind of on the underside of it, which is the most odd picture I've ever seen. However, I will just note that this also says it's discounted by 60 percent, but then when I Google the same name, I see the same item on Amazon for the same price. So I think this is a reminder that everything, inflation is over. since we like to bet probabilities let's end with this over under 50% chance that this thing burns down your house oh i would take the heavy over on that heavy over this thing it's basically yeah put that poor puppy at the

bottom that does not look not look too safe the insurance fraud 4,000 stored in your garage and cash in within 90 days that's the real value here all right ron jemwell i'm wishing you a happy cyber sunday moving into a cyber Monday. Great to see you. And thanks again for being here. Well, I'll see you next week on my new TimoMobile. Okay. I'll bring over the insurance fraud 4,000 and you and I can record in person. And everybody, thanks for listening. And we'll see you next time on Big Technology Podcast.