Big Technology Podcast - OpenAI and AMD's Megadeal, Sam Altman and Jony Ive’s Bumpy Start. Meta vs. Apple

Episode Date: October 6, 2025

M.G. Siegler of Spyglass is back for our monthly tech news discussion. Today we discuss OpenAI and AMD's megadeal, whether the AI investment cycle is a disaster waiting to happen, and how NVIDIA might feel about the arrangement. We also discuss Sam Altman and Jony Ive's struggles in developing their own AI device and how all tech companies seem to be building the same AI enabled ambient computing. Finally, we pour one out for the Vision Pro. Tune in for a deep discussion of tech's biggest news with one of the industry's leading analysts. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: [e-mail]

Open AI and AMD sign a mega deal, where Open AI could end up owning 10% of AMD. Sam Altman and Johnny I have run into some turbulence in their quest to build an AI God device. And Meta and Apple, and maybe the rest of the tech world, are on a collision course. That's coming up with Spyglasses, M.G. Seagler, right after this. Welcome to Big Technology Podcast, where M.G. Seagler is here to make his first Monday of the month appearance. and we have so much to talk about. We're going to cover the tie-up between OpenAI and AMD. And the fact that Invidia and Open AIs deal is really just a letter of intent.

At this point, we also have Sam Altman and Johnny I running into some bumps as they begin to build their AI device and meta and Apple. And maybe Amazon and Google all are basically on a collision course to build the same thing. And we will take a look at how the progress, is going on all fronts and who's winning. So, great to see you again, MG. Welcome back to the show. Great to be back, Alex.

And I know we say it every single time I'm on, but there's so much happening. And it's always, there's always more happening. It's just, it's wild how this is sort of just playing out. I love how we catch up every month. And I was looking at the headlines from just this morning. And I said we could do a full show on that. Last month, we were talking about the rollout of GPT5

and whether OpenAI has broken chat GPT, with it. That is a distant memory. It feels like a decade ago. Yeah. Right. So let's begin, of course, with Sam Altman. And a few weeks ago, you called out an interesting line in a post of his about abundant intelligence. And it was seemingly a wink towards interesting things to come. First of all, Sam says in this post, a very short post. He says, our vision is simple. We want to create a factory that can produce a gigawatt of new AI infrastructure every week, which is crazy. He says the execution of this will be extremely difficult. It will take us years to get to this milestone and it will require innovation at every

level of the stack, from chips to power to building to robotics, but we have been hard at work at this and believe it's possible. Over the next couple of months, we'll be talking about some of our plans and the partners we are working with to make this a reality. We have some interesting new ideas. And he sort of left it at that. And it seems like now with this deal with AMD, which we're going to get into the details of,

which by the way, might have opening eye ending up as a 10% owner of AMD, this is part of the interesting new ideas that Sam T's. So let's just start with the high level here. Are we starting to see Sam's plan come to fruition? It seems like this is part of it, right? It's, it's, it's so hard to analyze this, in part because of what we kicked off with, right? Things are moving so fast.

And it's almost hard, it's obviously impossible for us on the outside to know how much of these deals are coming together sort of on the fly. Like there was the reporting about, obviously, the Nvidia $100 billion deal, which led presumably to Sam's, you know, post there that you're talking. talking about, that that sort of came together while they were both on the overseas excursion with Trump and sort of going around and they were able to hash out that deal sort of one-on-one. And so with a deal like this now, with AMD, you almost wonder, like, did a similar thing play out? Was Sam with Lisa Sue traveling around somewhere? Did she pick up the phone when she

saw that NVIDIA deal and decide, like, we need to, you know, figure out a deal basically over the next few days to sort of be able to respond to that in some ways. And so when talking about Sam's post, it's sort of like, I'm unclear if he even knows all of the ways that this is going to go from his sort of nebulous talk about these interesting new ideas for financing. And also that post, I felt the need to write about that, both because I like the Sam Altman Post's criminology of it all. and breaking those down, especially when they're as short as this one is.

You know, it's sort of I kicked off talking about it. It felt like this was basically written because Sam felt like, well, we just did a hundred billion dollar deal with NVIDIA. Someone should say something about it. And then, you know, it goes on for just a little bit with these very, again, nebulous and grandiose terms, as he often does. But this was also tied to, you know, some other quotes that were coming out. of this from other companies, I think one was, was it the, oh, it's the new, one of the new co-ceos of Oracle also had, you know, alluded to these, these strange new financing mechanisms. And of course, Oracle's big partner with Open AI2 is everyone's big partner with everyone

these days. But, but so it's like, what's going on behind the scenes that all these folks are getting together and coming up with, with new accounting methods out of the blue that they, that they're hinting at but not fully coming into. And so, yes, it's conceivable that this AMD deal is one of them or it's conceivable that this AMD deal came together at the last minute because of the other deals going on. I have to give Sam credit. He's someone who can write like we're going to be telling you about some interesting new ideas we have about financing and building. And most CEOs, I would say you would read that and be like there's nothing there. But with Sam, we've seen that

there is something there. And that's either, and maybe it's both of these options. I was going to say it's either a testament to his ability to turn momentum and ideas into business reality or a testament into the entire business worlds blindly following this one man and putting so many billions of dollars behind what he's promising in the future that it's somewhat concerning. But I think we should just talk a little bit about the nature of this deal because it's such an interesting deal between OpenAI and AMD. So this is from the Wall Street Journal. OpenAI and Chipmaker Advanced Micro Devices announced a multi-billion dollar partnership

to collaborate on AI data centers that will run on AMD processors. Under the terms of the deal, Open AI committed to purchasing six gigawatts worth of AMD chips starting next year. The chat GPT maker will buy the chips either directly through it or through its cloud partners. EMD chief Lisa Sue said in an interview Sunday that the deal will result in tens of billions of dollars in new revenue for the chip company over the next half decade. Part of this, OpenAI will receive warrants for up to 160 million AMD shares worth roughly 10% of the chip company at one cent per share awarded in phases if OpenAI hits certain milestones for deployment. I have to admit, MG, this latest one, it's got my head spinning. So let's just think I can can we recap it is it is not an investment in open AI

it is open AI's commitment to buy AMD chips but as it buys these chips it gets ownership in AMD so yes what makes sense of this right is this AMD giving away the company for opening eye to buy its chips and is that really a purchase or is it just like and so it's not even yeah and you go ahead. I'm just struggling here. And again, this is sort of late breaking news. So I haven't had too much time to sort of go over the details of it. But at a high level from what, you know, the report is here, it does seem like there's a,

there's a number of things going on, as always. But so the 10% thing is super interesting, right? Because that's also, oddly, the number that, you know, Intel, you know, was supposedly selling to the government, right? like for for their deal and um there's you know there's other ownerships um trading hands obviously between invidia uh and intel and then um a bunch of other stuff going on so it's like it all feels like the same sort of general playbook just uh being executed in different ways where it's like now of a sudden ownership is sort of table stakes to these deals right even when it's a company

that's that's technically still a startup in open a i own would be only owning up to 10% of a very public, longstanding public chip company in AMD. And what on earth does that look like from a finance perspective? Like their books, like how do it's from, again, from what the reporting is like they have the right to buy those shares, I think, in warrants. And so like, I'm not sure that they necessarily will or, but they could. And obviously, as you noted, it's sort of dependent on, you know, the business agreements between these two companies.

And then there's like the other layer where, as you just noted, it doesn't necessarily have to be Open AI that's buying the chips, right? It could be one of their partners. And so, I mean, it could be NVIDIA, technically. I guess, you know, that would be buying AMD chips to help put together one of the Stargate operation things. Like, because that's a layer of this too, right? That, again, stepping back at the highest level, it seems like Open AI realizes that they

need to control their own destiny in many ways, but certainly on the cost front. And to the ultimate extreme, they probably can't be paying one of the massive cloud providers, be it, you know, Microsoft as it's been to date and then sort of Oracle 2 now, all of them. They need to be able to control their costs in a better way. And doing that means eventually at some point, sort of controlling your own data centers to some extent. And so it feels like a lot of these deals are coming together to allow OpenAI to put in place the building blocks to build their own data centers, quite literally. And this AMD deal presumably is also a part of that. But again, the wrinkle of it being one of the partners doing it. Again, I think that that's related, just thinking on the fly here, related to

Stargate partners being able to use it in their own data center. So like Oracle famously controls the one right now in Abilene, Texas. That's the only one that's actually being built right now in the process of being built while the others are still just sort of being signed. squared away. And so again, like, who gets what rights to purchase, you know, the processors, who gets what's rights to purchase the shares in AMD? And is AMD simply doing this again because it's sort of become like the table stakes thing? And by the way, it worked in terms of the narrative of it, right? Like, their stock is up a huge amount right now is flying. 27%. Yeah. Right. So, like, obviously that comes into play, too. They all see that these deals get done. And then the

stock goes through the roof because investors are excited all of a sudden again about about AMD because they're doing a similar deal to you know what what Nvidia and Intel and all the other players have done. I just want to pause on the 27%. We've seen this at the second time we've seen something like this happen. Right. AMD is up 27% today. Oracle of course blasted into orbit when it made its deal with open AI. We're going to we're really not going to focus on the stock market in this show. We're going to talk most. about product and partnerships, but it is worth noting, right? Like, this exuberance in the stock market is based off of infrastructure spend and not

revenue. It's all based off of revenue projections. And those revenue projections are extremely aggressive, especially when you consider the fact that enterprises are moving exceptionally slow here. This is a red flag to me. And so that goes back to my post. The reason I wrote, you know, again, off of riffing off of Sam's comments. Because the only thing that I could think about, you know, in my head of like what

they were, you know, presumably talking about with this new method of financing or whatever, it wasn't actually new method of financing. It's, it's basically using debt in a way to sort of get a flywheel going so that, you know, obviously leveraging debt, especially for for data center buildouts and things of that nature, is nothing new. But what you're sort of alluding to here is exactly what might be the new element of it in that they these players are all trading revenue and and you know again it starts with open a i agreeing to do these massive deals with another partner but as everyone knows this has been widely reported open a i doesn't have the money to do these you know the deals to the extent they don't have the money in the bank literally to do the

deals um you know to the extent that these these are talking about and so now we get these other deals like the new NVIDIA one where it's like they are promising to you know commit up to a hundred billion dollars it doesn't have to be that much it starts with 10 right 10 it sounds like is is maybe committed uh depending on how how committed these two are to actually you know finalizing this deal but it's like 10 comes in at first and then another 10 comes in over you know and basically over nine tranches they would they would get this 100 billion but the timing of that all like, is there actual money going into bank accounts to pay for something, you know, physically being built at some point?

Or is it all just being based off of like lines of credit, you know, essentially? Yeah, it could just be chips. Maybe Open AI is going to pay for these AMD chips with Nvidia chips. Maybe they're just going to take one of Jensen's trucks of chips, drive it over to Lisa Sue, and be like, we'll take 10% of your company right now. I mean, if these chips are really at the shortage limits, that's everyone's projection, like they're worth more than their weight in gold. And so, you know, like they are somewhat of a, of an actual value store, I guess, in that way.

But, but, you know, the thing you're talking about how this makes you uncomfortable, the obvious elephant in the room that, again, everyone will know is like if even the smallest slowdown happens, not, not even like a massive correction, if a slowdown happens in several of, on several of these fronts on any number of, sorry, I should say, on any one of this. these like several fronts that are going right now, it can start like, it seems like it would start a cascading effect that would potentially bring down the entire thing. And then we got debt being called and we got people unable to pay and we've got new, you know, contracts being renegotiated and people taking out, you know, does the bank own, you know, do banks start owning some of this stuff? And, and does the government have to step in as, you know, they basically are clearly open to doing in deals like with Intel as we talked about. And so there's all sorts of weird things that are happening right now that I don't think that there's a ton of precedent for

in history. Right. And as we've sort of danced around or even mentioned so far, there was a very interesting line in the Wall Street Journal story where the reporter writes the Nvidia deal isn't completed yet. The two companies have signed a letter of intent and have yet to disclose specific terms into regulatory filings. So is that, is that actually happening? I mean, we can't save for certain. So, and so there's a few things here. One, that what is up with Open AI's letter of intense like love now? You know, they did the Microsoft one. They announced with a, you know, a couple dozen words that they, they had an agreement to agree with Microsoft on new terms, but they have no actual terms to agree upon yet. And so it's not a done deal. Now this Envideo one is also basically

an agreement to agree to, you know, a deal. And, you know, you have to sort of wonder if AMD didn't see that and think, like, maybe we should swoop in here before this is a done deal and sort of get something else done. And, you know, in the report, they do say like, and I think Altman, I saw it, maybe it was even a tweet or he said it somewhere else. But he sort of makes it clear that Nvidia is still like a main partner, right? This isn't like, this isn't them switching horses, you know, in the middle of a deal being done. But there is, you know, to continue the analogy, there is some level of jockeying that it feels like is happening here, right? Where it's like, again, maybe Lisa Suz saw that this deal was not finalized. And so she could sort of come in and say,

what can we do, you know, alongside this, if nothing else, if we can't take some of this business. Then there's a whole, like, this is apparently for inference. And, you know, obviously, NVIDIA is in that game too, but wants to be owned that game like they do. with actual model training right now, you know. And so there's that whole element, there's the element of the Broadcom deal that Open AI has, which maybe kickstarted some of these NVIDIA deal talks between Open AI and NVIDIA so that they didn't go down the path fully

of making their own chips. It sounds like they're still doing it, but maybe not as fast as they would have previously, because again, they want to hone the whole stack as we talked about. So, yeah, a lot going on. I'm not saying it's going to happen. But I do think that you could in your mind imagine a scenario where you connect all these dots looking backwards from, you know, in the future where there is a collapse here. And you could say, how did we not like think this was a blatant collapse waiting to happen?

Letters of intense, the losses, the size of the investment, the fact that enterprises struggling to implement this stuff. Yes, chat GPT or OpenAI is going to bring in 13 billion this year. at least it's on track to do that. But it's going to lose, according to reports, $120 billion by $2029. Again, like the caveat we always say, and I think this is a very freaking important caveat, is that the technology is real, chat GPT and all these GPs or all these LLMs are getting better as we go. But the financing definitely is wonky, say the least. Yeah.

And it feels a bit like, you know, when you, do slow down for a second and try to think about this. It feels like a shock and awe campaign meant to leverage speed. And I do think that this is basically what Open AI is running a playbook of of like leveraging the fact that as they keep talking about like this is a unique moment in time. We need to move as fast as possible. We have there's so much this is this is the race to AGI or super intelligence and and we need to do this right now. We can't wait. If you're waiting, someone else is going to step in and do these deals. like you're either in or you're out and just using that time pressure to basically force

the hands of people into pretty uncomfortable what would normally be pretty certainly for a CFO a very uncomfortable calculation to to make in these situations right and I guess there is some logic to them doing that right and it is it's the competition right and there's this there's this account that I follow on on X or seems to pop up in my timeline all the time you can't tell who I follow anymore because of our algorithmic overlords, but it's a person's name is Borkov, and Borkov says Google Anthropic and Open AI are currently fighting a war of attrition. The problem for the latter two is their cash comes not from clients but from investors while Google is profitable and no longer losing users. Add this to the fact that among the three

only Google has its own infinite supply of GPUs for the price of peanuts and draw your conclusion on how this war of attrition will end. Now, obviously, this person is very bullish on Google winning this moment. It's quite possible. But I think maybe that's the sort of Open AI fully understands the fact that it's matched up against them. By the way, also, Open AI, also, sorry, meta and Elon. And then you sort of see why we have this rush the way we do. It's completely unprecedented to have this many massive players with this amount of capital being able to be put to work.

But I totally agree with that stance. And I've written a little bit about this, like even before, yeah, the RIFR. off of Sam's newest post. It was the the main thing I've been sort of dancing around and finally was able to put this down. But it's like it really does feel to me, at least at this moment in time, given that meta obviously is struggling a bit, but is trying to reboot the system. Elon, like, they're losing a lot of people. Like, there's a lot of weird stuff going on there. There's a lot of spend going on there. He can fundraise like no other, of course. So, you know he's he's good for it now but like there's weirdness there anthropic is a different

beast it feels like you know uh with their martin their new marketing campaign sort of uh plays to that like are they going to be now set up as the anti open a i type play um but at a lower level and then so to me anyway long winded way of saying it feels like this is basically right now as it stands a two horse race between open i and google and i do think that open ai looks at google and just says like oh my god they have everything that they need to do this at scale while as you noted not having to burn investor capital they have they they're insanely profitable they can do this on their own and by the way unlike meta which is also profitable and zuck talks up like yeah we can we can fund this via profits which is true but they don't have the cloud infrastructure that google does and they don't have the CPUs that google does and they don't have all of the sort of other various expertise to sort of scale this type of unprecedented massive build-out scale that Google is able to do. And so I think Sam and everyone else at Open Eye just says like there's a lot going on. All these things are varying degrees of noise and some is real competition. But Google is the

one that really has the opportunity. And so my headline idea was basically open AI needs to build Google Cloud before Google can build chat CBT. Right. And that. That's like how it goes. Yeah. A couple more things on this. It's just so many interesting aspects to this. And speaking of Sam Altman, Cremlinology, let's take a look at the tweet that you referenced. Excited to partner with AMD to use their chips to serve our users.

This is from Sam. He says, this is all incremental to our work with Nvidia, and we plan to increase our Nvidia purchasing over time. An astute ex-user said, everyone is scared of Jensen. This post mentions Nvidia more times than. AMD, despite the deal being about AMD, Jensen might bump them down in the preference list due to this. What do you think about that?

Yeah. And I'm glad you found that one because, yes, I think I saw that quickly. And that is a great point about it. And that's another thing that's at play here. Like, and also why it felt like at least a part of why Open AI and Vindia struck that deal. It's like right now, if you want to be a main player in this game, you've obviously got to work with NVIDIA.

And as everyone knows, like, while they'll, they say. say they don't play favorites. Like if they're going to invest whatever $100 billion into you, like you're going to get access to their chips. Like they're not going to screw you over. But if you did a deal with AMD, you know, behind their back, like maybe you're not first in line for those chips anymore. And so I think you have to sort of like you have to do with President Trump. You got to sort of do the public fealty and show, uh, and show who's really in charge. Okay. Here's my last question about this. Well, I would open AI want to own 10% of AMD.

I cannot figure out why it is advantageous for them other than, I don't know, you tell me. What's the deal? I'm sort of at a loss, too, for that. I think, like, again, the only thing I would come back to is what I said earlier. It's like, this is now become like a weird table stakes thing of like these companies trading ownership, you know, and quite high percentages of ownership within, you know, each other. there's there's going to be subsequent reporting about this obviously as to why that part became a big part of it but it does it's like i think lisa sue has a quote in there of like

saying that it aligns their interests because open i you know will now obviously have a potentially have an ownership stake in amd and so they'll be aligned about like you know making sure that they're along for the ride you know wherever that ride takes them i guess but like Yeah, it's a public company selling up to 10% of their shares. And again, it's a private company buying. It's like very, very strange. I guess Open AI might like it because it's like just something else to have on the balance sheet when if and when they go public. And they can say, like, look, we have these shares worth 10% of AMD and it's worth X, you know, hundreds of whatever it is, billions of dollars.

And I don't know. I'm sort of drawing its straws here. Right. And now Microsoft and Nvidia are going to own AMD as well for the money that they put in to help OpenAI build AGI. Well, if you don't get AGII, you can get some AMD shares.

It's not the best constellation prize, but it's worth more than nothing. So weird. Okay. What is this compute going to be used for? On the other side of this break, M.G. and I are going to talk about Sam Altman and Johnny Ives attempt to build an AI device and but why that is running into trouble because of a lack of

among other things compute we'll be back right after this capital one's tech team isn't just talking about multi-agentic AI they already deployed one it's called chat concierge and it's simplifying car shopping using self-reflection and layered reasoning with live API checks It doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade and value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One.

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Lots of great stories. And they're really an impressive September from you, M.G. Just like going through the stories before we talked. And you are my go-to source for basically everything that's happening in this crazy world, including this very interesting report that we have coming out really over the weekend today about how Sam Altman and Johnny Ive are hitting some speed bumps, shall we say, with their secretive AI device. I'll read from the F.T. briefly, Open AI and Star Designer, Johnny Ive, are grappling with a series of technical issues with their secretive new AI device as they push to launch a blockbuster tech

product next year. Their aim is to create a palm-sized device with a screen that can take audio and visual and visual cues from the physical environment and respond to users' requests. Open AI and IVE have yet to solve critical problems that could delay the device is released, though. These include deciding on the assistance personality, privacy issues, and budgeting for the computing power needed to run Open AI models on a mass computer device. And there's a person that tells the FT, somebody close to IVE, that compute is a huge factor in the delay. Amazon has the compute for Alexa, so does Google. but OpenAI is struggling to get enough compute for chat GPT, let alone an AI device they need to fix that first. All right, we're going to talk about the nature of this device because we're getting like a picture of what it's going to look like.

But first on the significance of somebody close to I've complaining to the FT that Open AI doesn't have enough compute for this device to run, that to me is pretty interesting. And I think not a good sign. And this is a multi-billion dollar tie up. It's not a good sign for the fact that something. Somebody close to Ives is saying this, you know, for a story about the device hitting speed, speed bumps. What do you think, MG? Yeah. Yeah, the behind the scenes element of that is super interesting.

You have to wonder, to me, it's sort of felt almost as if it's, you know, probably, I don't want to say it's an intentional leak, but I do feel like it's directionally interesting that they're basically telling the market that this device is not going to be on time. Like, because their original reports, right, were that it was going to be probably sometime at the end of next year, the end of 26. And so, you know, this to me signals that this is more like a 2007 type thing now. And I think that that sort of quote maybe helps that, you know, get out there. So people aren't expecting, you know, have a countdown all of a sudden for a year from now when, when this device doesn't hit the market. But I also think, like, there's a lot in that in that report, including. including, yeah, like what this device, you know, potentially is. They don't come out and say it directly, but, you know, a lot, I think a lot of us who

read those original, like, reports when the, when the two sides both started working together, but then obviously when the acquisition happened, which also feels like 20 years ago, but was only a few months ago, which is, again, wild. But I think, you know, we all sort of zeroed in on it being not necessarily awareable, even though that was, you know, what meta and, you know, others were working on. But that it could be some sort of thing that's, you know, a voice first device that you carry around alongside at least a start, certainly a smartphone. So it's a complementary device to a smartphone. And so there's there's that element of it. And then, yeah, the data element of like what would be required to make this work. It's sort of, I'm curious why that compute complaint is in.

place other than the general compute complaint that we're seeing with SORA and everything else right now, right? Like, they're always compute constraint to some degree. And, you know, right now they're rate limiting the creation of SORA videos. They just jumped it down. I saw recently from 100 in 24 hours, because I keep hitting it, to now it's 30. And so they're really feeling constraints, it feels like. You're feeling the compute pressure on that. And so with this presumed voice first device, the report is that there will be cameras involved with it too. Like, is that really going to be that big of a data hog? And maybe the part of it that is is the fact that it's apparently always listening. It's always on, always maybe recording.

So that's maybe part of it. But it's a curious, it's a curious bit of reporting that that's like the issue, one of the main issues. Right. And I think what you're getting at is the compute shouldn't be the main. I mean, obviously it's an issue. It shouldn't be the main drawback here. The main thing that would stop a rollout. Yeah. They could just limit it.

Yeah. Right. And even if it was. And someone from Johnny Ives team wanted to leak out that we're having some issues. You know, the fact that the leak was not just we're delayed, but finger pointing, to me, points to the idea that these teams aren't working well. I mean, like, if you have a sports team and they collapse, right, a sports team that loses a couple games, you hear the athletes and they're always like, we need to do better as a team, we need to get better. And then let's say they lose six games in a row. And I'm familiar with this because all of my teams lose six games in a row. That's when they start finger pointing. And they say, well, the defense wasn't holding up. It's part of the bargain or, you know, we really, you know, our hitters at the bottom of the order need to come through.

And for them to say, Open AI is struggling to get enough compute. for chat GPT, let alone an AI device, they need to fix that? Oof, that is, the fact that someone would go to the FT with that is, is, I think, fairly concerning. Hearing you say that now, it sort of brings into my mind, like, the idea of sort of what we were talking about was SORA, because that's like the prime example of, of their compute constraint at the moment, at least forward facing wise, but it sort of feels like, okay, there's all these different things going on it at Open AI in the moment, and now famously they

brought in another CEO to help to help deal with all that in Fiji Simu. And so it feels like there's maybe some jockeying happening for making sure that each team gets their level of compute that they want to get or feel like they need to get in order to fully be able to bring their product to market. And again, like that happens to be the time when Sora is really sort of just blowing up their servers at the moment. But obviously they're working on other models and there's other needs for. compute that are going on behind the scenes.

There's other products. There's all the agenic work that they're doing. And, you know, it feels like maybe this is just a way to ensure that like, hey, you guys spent a lot of money to bring on the I.O. team. We need our to make sure that we have our, uh, our resources to. Yeah, I think that's what I mean. They feel like they're not getting them for some reason. Now that you contextualize it.

I think that's, that's the exact right read. And it sort of sparks in my mind the fact that this has always been an issue at open AI teams fighting for compute. And I think the safety teams, you know, of yesterday year that got upset and left got upset mainly over the fact that they didn't have enough compute to either steer the product roadmap or do the checks that they wanted to or the experiments that they wanted to. So it's also like what what Microsoft, you know, remember like that's what open AI's main complaint about was was with Microsoft. Like that they're not getting the resources that they need and they feel like they're, you know, Microsoft's working on their own project.

and why aren't you being fully committed to helping us? And, you know, so now it's moved internal. Right. And let's talk a little bit about what this device is because we did get some interesting detail about what it's going to be. So this is from the FT report. It's roughly the size of a smartphone.

Users communicate with it through a camera, microphone, and speaker. It is designed to sit on a desk or a table, but it can also be carried around by the user. The device is always on. Rather than triggered by, word or prompt its sensors gather data through the day that would help it build its virtual assistance memory. One issue is ensuring the device only chimes in when useful, preventing it

from talking too much or not knowing when to finish the conversation, an ongoing issue with chat GPT. It's interesting. Sort of reminds me of the friend.com pendant. Yeah. Yeah, for sure. Friend, limitless. There's a few others, right? And obviously, humane, RIP, and, and rabbit, which also feels like decades ago that that came out. But, yeah, it does, again, it feels a bit obvious that this is the path that they were going to go down. I feel like this is, and I'm somewhat biased because I've, like, long written about this dating back a decade where I thought that there would be like, you know, these vocal computing devices, not just Alexa, but like, yeah, on the go and always on you type things. And it hasn't played out exactly that way yet, but I do, again, I feel like it's just a matter of time until someone nails these. And I do think that when CHET, when Open AI rolled out GPT40 and alongside that, they did the voice element of it, which obviously they famously got in trouble with for the Scarlett Johansson voice, which is mainly what people remember now.

But if you remember back then, you know, it was about a year, a little over a year ago, I think it was, it was just insanely impressive, like, voice. voice technology, right, compared to what the state of the art had been up until then. And it's been, you know, getting better. And now obviously Gemini and everyone else has it integrated within their systems as well. But it feels like Alexa and Siri and the first sort of versions of these these types of vocal computing devices, they focus so much on like the individual devices and the sort of rudimentary utility stuff. I just triggered all of my devices in my office here. And so once, once they did that, it sort of held them back from being able to do like the newfangled versions of these. Obviously, they couldn't have known at the time where LLMs

would go and how this would evolve. But it feels like with that GBT 40 rollout all that time ago and now the continued evolution, the voice computing element is there where it needs to be for a device like this to work. But the hardware part is now the hard part, which is always the hard part. But, you know, companies like Amazon or Apple or Google can figure that out because they have their massive companies at scale. The question is if Open AI can do it with the team that Johnny I, they acquired with Johnny Ives team and the team most importantly that he brought over from Apple who have done this at scale for decades. And this brings me to this idea that they're all sort of all these products are consolidating in some way. Like we just named a bunch of

companies. Open AI, Amazon, Google, Facebook, Apple. It seems like they're all building the same thing. And so the hardware might be the tough part, but then you sort of, well, you'll eventually probably differentiate based off of the assistant inside. And this was your take about what's, what's going on with the open AI device compared to the Apple device that we're going to see. So you write, just imagine a world in which Johnny Ive introduces opening eyes first hardware, a small screenless digital companion for your life at the same time that Apple unveils their next hardware, a pair of glasses with cameras on your face, and perhaps a screen in your eye. One runs on chat cheap E.T, the other on Siri. That would be quite the dichotomy. And it's sort of angling that way, right? Like these timelines are sort of starting to line up, especially with what we're talking about with delays, you know, potentially it's an open AIs device. where we know that Apple from the, you know, most recent Mark German report is

dropping sort of Vision Pro work to go for full steam ahead on these smart glasses to compete, you know, presumably with meta and meet them in market. And there's the whole subtext thing going on with Johnny Ive being, you know, perhaps upset about the world that he helped usher in, right, with screens and everything else with the iPhone. And the fact that not only is Apple. now, you know, going full steam ahead on, on glasses with cameras. But if they're, you know, again, the reports are that they're going to go down the path that meta just did with, with the

screen and the eye, like, now we've screens in our eyes. And Johnny Ive is making, trying to make advice with zero screens. And so that is a very interesting budding, a budding of heads. I would, well, the only other thing I would add to that that I didn't write about in there, but I would be, I'm slightly concerned that there's too much. focus on it being a screenless device, perhaps, right? Like, I'm not saying that it needs to be another smartphone, certainly. And I do think that there's probably a world, and I think there's increasingly a world where people are maybe, you know, happy to move at least a bit away from from being reliant on a smartphone. But I'm also worried a little bit that it would be harder

to use with zero screens. You know, like there's sometimes when you just need a screen for something to showcase versus doing it orally or, um, or via non. mechanism. Now, maybe they could say, well, they'll send a notification to your phone if they, if there's something they need to show you or something like that. But I'm a little worried that it's, uh, it's, it's trying to do it just to make a point about anti-screens. Uh, at the same time, the other, the flip side of that would be a screen as everyone knows is the biggest battery draw of any of, of devices. And so like, if they could do it without a screen, they can do a lot better in an all day battery life and maybe weak battery life. I think

they're all going to go screen. I remember when Amazon announced the echo device and it was so cool because it glowed at the top and talked to you. And we had Panos Panay from Amazon, the head of devices and services on the show in March. And he besieged me to go get the echo show with the screen and said the experience wasn't going to be the same without. And I think all these devices will end up getting there. And it's just kind of interesting how they're all converging in their own way. let me see if I get this right. You have Open AI pushing Apple on the assistant device. You have meta-pushing Apple towards glasses.

You have Amazon getting pushed by everybody to have a better Alexa. You have Google kind of standing out there to the side, but it has ambient Gemini and is also working on glasses. And Amazon apparently is also working on glasses. Yeah. Is the tech world just, are all tech products and services just converging to this, you know, eventual yet to be named singular interface with assistant inside? That actually reminds me of one subpoint of my piece, which was while I just said, you know,

the negative side of like the no screen thing. I do think it's interesting that open AI is trying to go down at least a little bit different of a path. Like, you won't see presumably unless there's success from it from someone, be it open AI or someone else. I don't think you'll see Apple do like, yeah, like a screenless AI device. I don't think you'll see. Except for the glasses. They could do the glasses with no screen. That's true.

And it sounds like the first version will be. But I mean like a sort of a secondary piece of hardware. Yeah, like exactly what is rumored to be, you know, what Open AI is working on. It feels like they're the only ones besides those startups, as we mentioned, that are going down that path, at least right now. Now, you could say Alexa, got to even trigger it again, is sort of like that in a way, right? But it's obviously meant for to be plugged in and you don't take it with you. But I think you're right. Obviously, everyone is sort of coalescing around these same ideas, including the startups all working on the things that we noted.

And the answer to that is like, I just think everyone is still trying to figure out like what the next devices, despite all of the AI hype and everything that we've been talking about. And obviously everyone, you know, we're real believers in it, but we're unsure about the financing models for it. But everyone believes in the technology angle of it. But it's still at the end of the day. People are looking for the next device because they think that this can be the next thing that becomes like the massive platform and the next iPhone, right? And I'm still of the mindset that's the more boring mindset that's like nothing's ever going to be the scale, again, of what the iPhone achieved. And instead, it's going to be all of these devices, a bunch of different devices, including glasses, including your smartphone, and maybe, you know, potentially including a chat pin, walk around thing, desktop device, whatever it is. And several other things, you know, along those lines.

So, yeah, I think that they all just feel like they need to have these initiatives. You mentioned Amazon because they, as you noted, like they, it sounds like per reporting, they do have a Glasses project as well, but they hired the Jay Allard, which was the name I hadn't heard in years and years out of Microsoft to work on, you know, these new, some sort of new ideas around devices and AI and whatnot. Yeah. So they do have. So here's a plug for an upcoming episode.

Panos Panis is going to come on. I just recorded with him in New York following the Amazon Devices event. And we do talk about that workshop that they have where they're trying to figure out the future of the new AI device. And we had a really interesting interaction. And it's kind of fun where I said, well, what do you think about pendants? And he goes, oh, really trying to go all over the place here. And he goes, pendants, hmm. You know, so anyway, I encourage people to tune in for that because it does seem like they're at least considering a pendant there.

but you know what's going to be interesting it's going to be the design philosophy of all these companies like you wrote in a post about how amazon said let's just get it out let's get alexo plus out there after they saw that apple uh you know didn't uh release or or get as much of apple intelligence out out there and they got killed for it right uh i'll actually i want to end with a couple things first of all i want to get your take on well second of all i want to get your take on the vision pro before we leave because yeah uh we've said on a couple times, a couple times on the show that Apple has deprioritized that. So we should at least take a moment to talk about what that means. But before that, it's just very interesting to see

meta pushing Apple in these directions. And so I'd be curious to hear your perspective on like where the, you know, it's really a blood feud in my perspective. Maybe that's too strong of a term, but where the meta versus Apple product war stands and how you think each one of those companies product philosophy will be an advantage or a disadvantage as they move forward trying to ship these AI devices? Yes. So I've written about this a number of times dating back a few years now. Basically, you know, once Apple tried to destroy meta's advertising business, it felt like

that was the kickoff of a real, you know, not even Cold War, a hot war in many ways that's been happening. I think at the highest level for meta, Zuckerberg has said it multiple times from Joe Rogan's podcast, no less, like talking about how they feel like they're in a just terrible position because they're beholden to Apple and to a lesser extent Google in terms of the smartphone needs for their products.

And it's not just for distribution of their apps anymore. It's now for things like their glasses where they feel like they can't have the same level of connectivity that like an Apple Watch does because they're not first-party hardware, you know, and they can't tap into the iPhone the same way that Apple itself can with, you know, low-level Bluetooth and all these other things that they use for connections. And so I think that meta has been trying basically anything to make, you know, something that could, again, replace that smartphone as the next computing device.

And again, Zuckerberg has not been shy about talking about that. I'm super skeptical, as we just talked about, that anything will ever get to that scale. But I do think that meta has done a good job and an admirable job, by the way, of sticking with it, right? Like, lots of companies famously Google, you know, with Google Glass and their own VR efforts. Like, they just do something and then when it's not working, they back away. And, you know, there's something to be said for that too. But a lot of these newfangled devices, it just feels like they will never work unless someone just continually pumps in the billions required to sort of be in the right place. right time, right? So much of this is based around timing as so many things in the world. And

I just feel like a lot of these devices have never worked because they're not right place, right? And people give up before they would ever be in the right place because you can't really time the markets, right? You can't know that it's going to be the right time for it. You can, you know, do as much as you can to try to make it the right time for you. But again, meta to their credit support almost maybe $100 billion now into their efforts, you know, in terms of of the Quest headsets, but now also with the glasses and all the other projects and the AR glasses that they're working on. So credit to them for still trying to do it. I'm still a little bit skeptical about what scale they can get to with that. And if they can ever fully, truly

break, yeah, the need to be paired up quite literally with Apple and or Google. And it feels like it's going to be a long time at the very least until they can get to that part. I haven't used the new glasses yet. Curious if you have, but like, you know, it sounds like they're impressive. It sounds like the technology is impressive. But it also doesn't sound like the type of thing that's, you know, people are going to leave their smartphones behind any time in the next five to 10 years. Yeah, I haven't used them yet. But I actually want to pick up on an item that you put in a recent post about it that I think Exor Luxatica actually balked at the idea of naming the latest generation Raybans because they were bulky and then meta sort of floated some

money towards them and not all of a sudden right again another another tech company that owns an ownership stake in a in a public company exactly and and so I think what I draw from that is what might be playing in meta's benefit here is they don't have a standard you know they don't have to worry about decades of a design legacy that they have to uphold to make something feel meta-ish they're just like all right if these are ugly as hell, Oakley glasses that, you know, talk back to you and some people like them, let's just do it. And that sort of, I guess, spaghetti at the wall type of approach, I think is a very interesting contrast to the, it has to be perfect way that Apple is developing things.

Yeah, and one riff off of that idea is I do think the smartest thing that they did was partner with Exeter Luxottica because the biggest strength that Apple obviously has beyond all their in-house expertise is also the retail channels, right? Like, they can move product because they have stores around the world and they can ship something and it be in every single country, basically, around the world, aside from, I guess, Russia and maybe a few other places. But Meta has one store or a couple stores, right? And even Google has just a few, a handful of stores.

Like, no one else has that capability. So Meta smartly, it's not just the design of the glasses, which obviously mattered too, like, you know, and getting to use the RayBan brand. But it's also the retail footprint that they can get from that partnership is, was a hugely smart thing. And it's something that I've been wondering about when thinking through what Apple does with smart glass is like, do they also do some sort of partnership there? Not because they need it from a distribution perspective, but more because like meta has now set a standard in a way that, look, you're wearing the same brand that you wore for your regular sunglasses or your regular glasses. but now they have these tech-enabled things. And, like, Apple, as great as they are at design, like, do people, you know, like, there's

the difference between wearing an Apple watch, which is, you know, well-designed and stuff, but it sort of resides under your shirt. And there's a very different thing between something that's right on your face all the time. And obviously, Google ran into that headfirst, pun intended, you know, with Google Glass. And I think, again, Bena was very smart in, out of necessity. They had to be smart about that partnership. And so what does Apple do there with, do they have to cut a deal to do a partnership in a similar vein? Okay, a couple more minutes left.

Let's just do the record for the Vision Pro. I remember back in the day, hearing Apple make lofty promises about the future of spatial computing. It wasn't the Metaverse. It was spatial computing. That's right. It's big vision. And now the Vision Pro has been a disappointment, but not only that, it's seems like it's going to be deprioritized within Apple's suite of products.

And you even suggest in one of your recent post that this might be it for. Yeah. And I, you know, German and others have said like, look, they're still committed. They're obviously about to release a new version with just an upgraded chip. It's apparently going to have a slightly better headband, which is nice because the current one is not any good. But beyond that, it will just be a chip upgrade. The one that you're talking about, of course, is that they're going to at least

put on the back burner, the idea of a vision air or just the vision without the pro part of it, the slighter, the smaller, lighter and potentially less expensive, you know, version to actually scale this thing. And I think that they just probably looked at the market and said, like, obviously where we're at right now with the vision pro is not where we want to be. But even if they did a quote unquote vision or vision air and say it was like even $1,000, do you think it's going to be a massive scale, you know, hit device. I don't think that it would be. And so I think that they're being realistic about that. And, you know, as you're talking about, meta sort of showed them what the market is, like at least for the foreseeable future in terms of a wearable on your

face. And again, others had tried. We talked about Google. Snap, of course, was an early mover with spectacles and still trying it. But meta really sort of nailed, I think, both sort of a technological logical perspective, ease of use, the partnership angle, and timing again. And I think for the Vision Pro, when we talk about does it ever go anywhere, I don't think that it's going to go anywhere anytime soon. And so it's a matter of if Apple does hit with something like the smart pair of smart glasses and the next version of it, I wouldn't be shocked if they do just backburner the notion of the Vision Pro.

It's still there as like a legacy product. It's all roped into this vision, quote unquote, vision umbrella of like. like, well, this is just the high end of what we always wanted to do. And, you know, we're working at it on multiple fronts. It's too bad because I do feel like they've started to come into their own with some of the contents and they're getting better about it. But the device itself is just way too bulky, way too heavy. Everything about it is just inconvenient to use.

And it's just the time the market completely wrong. And obviously they couldn't have known AI was coming in as hot as it did. But like, you know, they went all in on this product. and they probably shouldn't have done that. And no, we said to start this episode that the past month or 30 days or whatever it's been has been crazy. And so it's hard to possibly capture all the action that's happened. And I think that we'll have the same thing repeatedly month, month on end because none of this seems like it's slowing. And MG is just great to be able to break it down with you every month.

So thank you so much for coming on the show. of course thanks as always Alex I know see in a month see what's all right see you in a month and folks remember to check out spyglass.org you can set up sign up for mG's newsletter there become a pro subscriber like I am and get the added added articles and added insights which I highly recommend all right on on Wednesday anthropic chief product officer Mike Krieger is going to be on if all goes according to schedule talk about the company's latest model and to discuss the fact that we've gone from Sonnet 4.0 to 4.5 in a very short amount of time and whether the AI product release cycle is speeding up. Thanks again to MG. Thank you all for

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