Big Technology Podcast - OpenAI Builds A Browser, Microsoft Copilot’s Struggles, Jaguar Rebrand

Episode Date: November 22, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI's browser initiative 2) Can the ChatGPT browser succeed 3) DOJ wants to split off Chrome 4) Is spinning off Chrome a just punishment? 5) Would we be better off with Google services disconnected from each other? 6) Apple is trying to improve Siri with LLMS 7) Microsoft's copilot has struggled in the early going 8) Anthropic raises $4 billion 9) Was the Jaguar rebrand good? --- 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]

OpenAI is thinking about building a browser, just as the U.S. government considers making Google spin-off Chrome. Anthropic raises $4 billion. Microsoft co-pilot is struggling, and Jaguar is rebranding. Dear Lord, all that more is coming up on a jam-packed Big Technology Podcast Friday edition right after this. Welcome to Big Technology Podcast Friday edition where we break down the news in our traditional cool-headed and nuanced format. It seems like every week so much happens, but this was definitely a picture. pivotal week in the world of tech and AI. We have news that OpenAI is thinking about building a browser. News that the U.S. government is considering making Google spin off its own browser, Chrome. Anthropic, of course, has raised $4 billion. Apple is doing repairs on Siri or an upgrade.

We'll talk about that and also the struggles of Microsoft co-pilot and that really, I would say, confusing Jaguar rebrand. Joining us, as always, on Fridays is Ron John Roy of Margins. Ron John, welcome to the show. I can't believe you're already teasing me about Siri and it's promise and that they're going to fix it. I mean, we're going to get to it, but can you believe that the story comes out this week that Apple is like, maybe we should put an LOM into Siri. I mean, come on. Thank you, Tim Cook. Anyway, let's talk about some of our major stories and then we'll get to the Siri upgrade,

which I know you're really looking forward to. The first thing that caught my eye this week and one of the more interesting stories here is that Open AI is considering building a browser to compete with Google. This is from the information. The chat GPT owner recently considered developing a web browser that would combine with its chatbot. And it has separately discussed or struck deals to power search features for travel, food, real estate, and retail websites with companies like Condonast, Redfin, Ventbright, and Priseline. Okay, a lot going on here. But I think the idea that Open AI is considering building a browser is fascinating. Because now you have recent they've recently released search GPT, which I surmised was just a way to get funding.

But if you build a browser, it becomes a totally different thing because the address bar, I would say, is the most valuable real estate on the entire desktop computer. If you own the address bar in the browser, you get to control what the default is. Google saw this. It built Chrome. By the way, project manager on Chrome, Sundar Pichai, who's now the CEO of Google. and that is what enabled them to sort of get out of from under Microsoft's thumb and establish Google into what it is today.

And Chrome today on the desktop controls 65% of the market share. If opening I is able to pull this off and resets that default from Google to chat GPT and search GPT, which has been more impressive than I thought it would be since it's come out, then you're talking about a real challenge to Google as opposed to what we've seen so far, which is something totally different from search. So, Roger, I'm curious what you thought when you saw this news and whether you think I'm getting it right here. No, I think this is, you're right on this,

and I think it's very interesting because exactly that point, the search bar and the address bar is exactly where all activity starts in any kind of web browsing. So if they can cut into that at all, it will be huge for, it'll actually make search GPT a thing. Because I think it's still a bit of an unnatural action. within chat GPT to switch from that chat interface and interaction to really searching. I think that's where perplexity has gotten, is beating them right now because I still think

of perplexity more as a search engine than I do chat GPT. But in terms of like the productization of it, that also excites me because I think open AI could make a pretty good browser. That's where they've been, you know, the best in market compared to everyone else, making really, really good products. And it's kind of nice the idea of a new type of browser and someone else doing it well rather than just Chrome. So this could be a big deal. Definitely. I think that this if it takes off and it's a big if is a multi-billion dollar product for open AI, maybe even more important than chat GPT. And it's going to need a couple of those because like we've talked about

a thousand times is losing like six or no five billion this year and probably more in years to come it needs these products and i give credit to open a i for thinking big like this and thinking literally internet scale as opposed to chatbot scale but we need to put the caveat here which is that according to information open a i isn't remotely close to launching a browser launching a browser is timely and complicated because the browser providers need to ensure people's data doesn't leak to websites. And by God, that would be terrible if it happened because the entire trust that you put in chat GPT is sort of being able to share some of your personal information and have it make sense of it. I have an idea that I want to put out there if anyone

at OpenAI is listening by the browser company. The browser company produces a browser called ARC, which is my absolute favorite browser. It's become one of the most used products on my computer and it just completely changed the way I browse the web and save tabs and you can have it ready to go. It's that easy. The company has raised like $120 million, which is probably too much and they already are having to pivot their own product roadmap itself because of the expectations. But if any company could afford that, it would be Open AI. What makes you like the ARC browser more than others? It's, you can switch profiles very, quickly like just basically swipe around versus Chrome it's a little heavier and I have I'm a

browser nerd in a way so I have like different profiles for different kind of parts of my work and then the way you can save tabs the way you can organize them is amazing with search you can search a web page but then you can actually call chat GPT and get like a web summary or even take an AI chat action on the web page just in the search bar that's pulled up. Like the way that, and it's just a nice product. It's like a beautifully designed software. And there's not a lot of that out there right now. So overall, it's just. And this is what they've talked about. And I think that it's pretty clear that it's just really difficult to challenge Google in the browser space right now. Not only has Google built a ton of the infrastructure with its

browser developer kit, but it has so many different services. You're talking about Gmail. You're Maps, talking about calendar. I mean, people are, and Google Docs, people are so deep into their Google suite of web applications that they work best with the browser. They're all communicating well when they're on the Google browser, and it's very difficult to get them out. And Arc has even written about this that it's really struggling to beat Google, and it's even thinking about different products because of this. And I think any product from Open AI would run into the same issue. And so that's like I'm excited about this product from Open AI, but I also am trying to be realistic that trying to change the status quo of browsers is really difficult. I mean, you have

groups from Mozilla. That's their only job. You have groups in Microsoft. That's their only job. You have a group in Apple. That's their only job is building browsers. And remember, we know that Open AI is kind of chaos. They're good at products, though, but I still think they're going to be able to, They will run into some serious challenges. If you look at all the different ways that the tech industry has tried to unseat Google and has failed, what makes you have any confidence that Open Eye could do this themselves? Because Google did it to Microsoft. Let's not forget, Internet Explorer, I think it had 98% market share in the early 2000s when Google, and Google realized this was going to become one of their biggest bets in the history of the company. And it was wildly successful.

that they launched Chrome, I think it was in 2006, and it succeeded. And obviously there was antitrust and, like, Justice Department pressure on Microsoft at that time. So it was an inroad for them. But they showed it can be done in the power of owning the browser. I guess the only thing that I do think about, that was the most successful possible strategic move in the mid-2000s. So maybe what's going to happen five, ten years from now is not a browser. Like, actually maybe now that I'm thinking about it, because it appears the most obvious move,

is there going to be some other type of interface or access point to the internet that actually makes this not look as interesting? The humane pin? Well, oh, yes. Or the rabbit. I'm talking to rabbit, thinking about having rabbit on the show. Are you wearing your pin? right now? You know, I lost it. I misplaced it. But my set on fire. weren't they setting on fire,

I think? There's some risk of it. But the thing is that with with the other formats, it might be that mobile is the thing that just ends up being the most important. In that case, you know, you're still kind of losing out to Google with Android and you have to rely on Apple with iOS. But hey, look, the desktop seems to be the thing that's most up for grabs. So maybe go for the desktop. And I think there's an interesting historical point here to make, which is that Google was able to seize the leadership of desktop browsers from Microsoft because Microsoft actually had an incentive and an interest in making the web slower when it developed Internet Explorer because it had Microsoft Word, Microsoft Excel, Microsoft PowerPoint, right? It wanted the internet to be

kind of slow so that you wouldn't go to the web to use Google Docs, Google Sheets, and Google slides. Better, the internet kind of works but isn't so great and you use all of Microsoft's desktop products. After all, the number one thing Microsoft was selling was the desktop operating system in Windows. And Google used that window and that incumbency problem to try to actually take away the leadership of Chrome of browsers from Microsoft and it did it with Chrome. And maybe I think what you're saying here is spot on that we might be seeing historical analog where we know Google's done a really good job recently in catching up with open AI and chat GPT but it still has that incumbency problem it still has search and I can't

really reimagine something like the browser in the address bar the way that someone like an incumbent like open AI whose number one product is generative AI and chat GPT can and maybe that's the window that opens and allows them to attack no that's exactly what I'm saying like the arc one of the things I like when you when you're like control when you're trying to something on a website like a word and you try to search for it that's how search we're used to on a web page they've integrated chat GPT directly into that search function so when you look up a word you can actually ask you can talk to the website essentially in real time so it's it's just a completely

different way of what is searching a page and if that's one tiny thing that AI has allowed us to do just imagine how different of the web could look if someone reimagines the browser. Absolutely. And maybe the U.S. government will reimagine the browser for us because this came out this week. This is from the AP. US regulators seek to break up Google forcing Chrome sale as part of a monopoly punishment.

I mean, this case was brought initially over the search defaults that Google paid Apple for and others for to distribute Google as the, you know, default the same way that Google is the default in Chrome because it owns Chrome. It's paying $20 billion a year to Apple to be the default search tool when you're using search on the iPhone. But the Department of Justice is like, all right, you did that.

Guess what? We don't want you to have a browser at all anymore. This is coming from the AP story. U.S. regulators want a federal judge to break up Google to prevent the company from continuing to squash competition through its dominant search engine. after a court found it had maintained an abusive monopoly over the past decade.

The sale of Chrome, it said, will permanently stop Google's control of the critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet. So here's the DOJ basically talking about how important Chrome is. So we all acknowledge it. Opening eyes like, yeah, we made the right strategic move trying to go for the browser. This is what the DOJ is attacking. Now, I had previously said, listen, this was, you know, something that was, if it was anti-competitive that Google was paying Apple all that money to be the default in search, just address the default on the iPhone and on mobile and don't go for anything else within Google. I had some people that wrote to me and said, you're missing it, Alex.

The thing is, Google used illegal tactics to establish itself as a monopoly, making it hard for others to compete. you can't just try to go through the single tactics that it was using you got to go for everything because it's built such a lead that you need really aggressive measures to be able to counteract what Google has done that's the argument I'm not fully on board with that I still think this is overly aggressive but I'm curious what you think Ron John I think you made the argument about five minutes ago that should put you fully on board because you said the Chrome browser works better with the entire suite of tools, almost seamlessly maps, Gmail, and all these, and then Google search itself. And the whole ecosystem is the power. And we see that. And

you can't just try to address one small piece of it. And I think it is a reasonable argument to say that to establish this dominance, like in using illegal tactics to get there or what's considered illegal now, you can't just address a small part of it. You basically explained the case for the Department of Justice on this segment just a few minutes ago. I did. And now I'm regretting that. But I also want to say that I'm annoyed. Now representing the federal government, Alex Cantorowitz. Your Honor, I want to present a witness to argue against the prosecution, and that is me again, a prosecutor with a change of heart. Because as I'm making these arguments, they sound right. But then again,

And I'm also a user of Chrome. And I am a psycho user. Because I'm on my own, I'm not an outlook. So I'm all in Google products. I use Google Workspace. So for me, it's like Chrome is my browser. Gmail is my default email service. Calendar is what I do all my scheduling in.

The drive is where I have all my documents. Slides is where I make my PowerPoint presentation. And sheets is where I do my invoicing and scheduling and ad management. right? And docs is where I do my writing. I as a consumer want all of this to work seamlessly together. And I would be annoyed if the government decided to take action that made that experience worse. Now, the argument against what I'm saying since I'm playing all sides today would be no dummy. The fact that Google's been able to integrate this and make this all work so well means that you are dealing with products that don't innovate.

You'd be working in a better docs. You'd be working in a better PowerPoint, a better email service than Gmail, and probably a better browser. So you don't know what you don't know, and you're advocating for a broken system. This is incredible. I love this segment,

Alex versus Alex versus Alex. So, Ron, John, on a week where I have multiple personalities, running in unison. Which one is right? Help me help myself. All right. Okay. All right. So I think one of those Alexes made the point perfectly that Google sheets and docs, I think they were very highly innovative products six, seven years ago maybe. Like, and they did it. And they had to to beat Microsoft and to actually like or cut into Microsoft office. And remember, remember when they started rising the entire what's now g or google workspace now i mean it was these were

incredibly groundbreaking products they haven't changed that much meanwhile for me notion is a good example of a tool that redefined what is a document like it's it's not quite a document there's tables there's images you can embed stuff it could be a public facing website it could be simple note taking. Like, it's this air table in ways. Like, there are these companies that did try, air table redefined what's a spreadsheet. You can click into a cell and essentially have an entire document. It's somewhere between a database and a spreadsheet. So I think it shows that the fact that Google did not update these tools and evolve them is just sitting on the dominance of Chrome. And if it was truly a competitive market, they would have been pushing, they should be

able to, like they had a page list scrolling. So there's not actual page demarcations. That took forever from Google. And it was always the most odd thing to me that when I'm writing on a browser and I'm never going to print a document, I don't think in terms of pages, Notion and others push them in that direction. So to that, Alex, I say, innovation requires competition and this would be good. Well, I will also argue that maybe Microsoft's co-pilot with generative AI in all of its products is going to be good enough to unseat Google. And for the discussion of whether that's going to happen, you're all going to have to stay tuned for the second half because we will get to that. But continuing on with this, the Department of Justice is also suggesting some other

interesting things, which is that Google has to rip up its exclusive search deals. And then there's another interesting thing where it wants Google to be required to syndicate its U.S. search results to other rival search engines for the next decade. Basically, I guess, saying that Google, you have the best tools and you have the best search results and you are going to effectively be required to make those available to competitors, which is like if that's the case, I don't know why you're still in business or stuff. Do you think any of this is better than spitting off Chrome? No, see, I agree that this one seemed a bit odd to me that, yeah,

like if that's your core business to outsource it or make it open source, didn't or like have to license it and like make it mandatory did seem kind of weird I guess if I was trying to think through what the logic could be it almost is Google making search free slash coming up with one of the greatest business models of all time with like intent based advertising maybe it's like recognizing that the free product was always kind of like a ticket to trying to establish market dominance and that maybe that's not the case. I don't think I quite believe that I'm just trying to figure out what the government might be going for. But I think it's much cleaner, spin-off Chrome, spin-off YouTube, spin-off Android, one of those options, something like

that would just make a lot more sense to me. So we always like to talk about what's actually going to happen on this show. And I thought M.G. Siegler from Spyglass, a friend of the show, had a terrific story basically looking at what's going on here. And his view is that this push to have Google spin off Chrome or sell Chrome is really just the first position that the government is taking. They want to say, let's throw everything at Google, then hopefully we'll get to some negotiated settlement. He says basically some of the things that I've brought up,

or one of me has brought up, which is that there's no great alternative. You don't really have a natural acquirer. Google also does a lot for the browser world with its crows. chromium uh tool which by the way arc is built on top of this is sort of what i was talking about the developer gets that it has and this is what he says anyway the reality of any of this happening remains fairly small at the moment and in any sort of short term it's non-existence appeals and it's non-existent appeals and lawsuits will bog all this down for years the only way something gets done faster is if there's an option that google calculates is worth negotiating to make this all go away

to me, that still feels like the default search payments in particular because that probably hurts Apple more than Google. So maybe Google decides that it doesn't want to do these default search payments anymore. And this is what he says. The government must know that as well, though. So round and round will go whittling down options and severity and proposals until its final offer time next year. I'm guessing Chrome isn't on the table by then.

Do you think that's reasonable? I think we are at that interim time, the lame duck time, while as we wait for the Trump inauguration and not to move too much into the politics, but trying to predict anything. Remember, who would have been running the Department of Justice as of 24 hours ago? Matt Gates is no longer in position to lead that. So I think it is interesting to me to think about, like, and remembering why Sundar, is tweeting congratulations to Trump, anything can happen. And I think things could happen quickly.

Like we have no idea, but one one kind of inkling from Trump that I want to do this and screw Google, maybe this could move faster. Yeah, I think everybody within Google, actually, I don't really know. But I would imagine they're all like waiting to say, let's what, what happens until the next administration comes? because we lost against the last one, maybe new people would help us out, but also the case started against Trump.

The case against Google started with Trump. Yep. And so now he's back. I think antitrust is going to be one of the most interesting things to see which direction he goes, because that's one, I think, complete. There's many wild cards, but that definitely is one where there's absolutely no clear telegraphing

because, again, on one side, less regulation better but like more open for business on the other side hating big tech with Elon whispering in his ear it's uh it could definitely go either way i don't know if he's going to hate big tech as much this time around because he has less of a like facebook you know tried to make me lose the election remember he has twitter that was definitely a help to him uh google i think you know, backed away from a lot of their sort of restrictions over the 2024 election. Like big tech actually wasn't as big of a factor in the election. Like Facebook did no politics.

It was like we talked about it. It was podcasts that really in terms of tech, you know, made the biggest impact. And that's like the least algorithmically filtered medium you can find, I think. Maybe he'll support Spotify over Apple and finally help push them and their complaints about Apple dominant. one day all for the podcast though Theo von's going to call him up and say help out Spotify as much as I love Theo von I don't think he's going to be involved in antitrust policy that's just my big antitrust guy huge antitrust guy yeah Sherman antitrust act is one of his favorite things to dig into you never know so okay talking about incumbents and products that have sucked for a while

we have an update on Siri so this is from Bloomberg. Apple readies a more conversational Siri in a bid to catch up in AI. Mark German writes, Apple is racing to develop a more conversational version of Siri, its digital assistant, aiming it to catch up with OpenAI's chat, GPT, and other voice services. The new Siri, details of which haven't yet been reported, uses more advanced large language models or LMs to allow back and forth conversations. The system can also handle more sophisticated requests in a quicker fashion. I am somewhat astonished by this headline because I thought that's what Apple intelligence was supposed to be.

And Apple intelligence has like turned out into basically nothing. It summarizes my messages for me and that's that's it. A series still is pretty dumb in there. In fact, I've seen a meme recently of people disabling Apple intelligence because they say it makes you dumber or it's not really good. What is going on within Apple that they waited until now and maybe credit that they, they're finally doing it, but they waited until now to try to fix Siri. If you're astonished, I just chat GPTed, what is a word for 10 times the level of being

astonished? I got flabbergasted, staggered, or dumbfounded. And those are my reactions to the idea of Apple, now coming up with LLM Siri and starting to think about it and, uh, uh, uh, And regular listeners know exactly how I feel about Siri. It has not gotten any better. Apple intelligence, at least what we have seen so far, remains one of the most half-bake of all AI,

like hyped AI products out there. So none of this gives me hope. And I don't get it. I just don't get it. This is a company that gets product. They have a relationship with open AI. They can have a relationship with any, major model provider out there. And these products are clawed and chat GPT and even like

random AI products I come across are so good. Why they organizationally still can't make basic AI products. I don't get it. I just don't understand why this wasn't included in the initial push for Apple intelligence. Like did the people over there think, okay, we're going to introduce large language models and generative AI into our products, and we're going to call it Apple intelligence. And the thing that we're not going to work on is our intelligent generative assistant. I, well, I guess maybe it does represent where Siri kind of lives in the organizational hierarchy, because you're right, though, that they even were kind of like caveating how integrated Apple intelligence would be with Siri. Like, it was more an add-on. It wasn't

you're right it wasn't a core part it wasn't the Siri group that became an AI group and it still remains separate and the Apple Intelligence group would then power like feed into Siri so yeah I think it shows definitely kind of the wrong strategic approach to this entire thing and it does not make me any more hopeful even though my whole house is home pods now that the back and forth of like my wife and son and stuff going back, trying to get it to do what they're asking. It's like, play a song. I'm sorry, your Apple Music subscription is not powered for this because I use Spotify's. Like there's so many of these moments that are almost comical, but just don't work. The echo isn't much better.

Like I said, in a recent episode, it woke me up for a full week straight with ads for Celsius energy drink, although that's finally stopped. So maybe someone there is listening. But actually on that, one thing I think is gonna be really interesting in the whole voice battle is Amazon there was a report last week I think that the attempts to integrate their LLMs into Alexa have been taking longer than expected because of

latency and I think latency is going to be a huge topic in this because Jeff Bezos family famously on the original Echo like said he wanted answers in like a quarter of a second it was something where the team said this is impossible and he said make it happen and they made it happen. And it always was the speed of answers were critical in making it a great device. And Siri, you're going to hear me say something nice about Siri. It has gotten faster. It might not give the right answer, but it'll confidently do it more quickly. Oh my God. That is such a great tagline for Siri. Faster. Dumber. Siri. Won't give you necessarily the right answer, but it'll be quick.

But, but, like, but LLM processing like can be heavy. It can be heavy. So, and the more complex the systems are that are, it's trying to query or the, it really can take longer and consumers have been trained to want an instantaneous answer. Again, like chat GPT, I've said this a lot, the greatest UI trick of all time was the kind of typing dots cursor that make you think it's thinking. and then letting the text stream almost. So it allows the time that it's taking to generate the answer

almost be magical, like there's a brain thinking. But what do you do? If the overall time it takes an answer, a voice query goes from a quarter second to one second or two seconds, then do people stop using it? Do they, can you fill it in somehow? So I think that'll be a big challenge for everyone in the industry. Definitely.

And one of the things that Apple has going forward is it still has that default experience. We started the show talking about market dominance. That's important. And if it gets its act together here, it has a longer lead time to be relevant. And Apple intelligence, at least the first version, is not it. We can say with certainty now, maybe this does. Because if you think about it, just imagine if Siri was as good as Claude as today, it changes the whole experience on your phone.

and can Apple get to where Claude is today? Eventually, it better be able to. I mean, we're talking about a long lead time here, and that really can create a pretty impressive product. Only if, and this is the thing I think was holding Apple back this entire time, only if Apple is willing to sacrifice a little bit of control and say, we're going to allow the large language model to do the work for us. And because it wasn't willing to do that, Apple intelligence has been the disappointment it has. And if it's deciding that that's something that it's willing to do, then it could be in much better position. I have a proposal to whomever will be leading the Department of Justice on January 20th, 2025.

Force Apple to spin off Siri and then make the ability to be the voice activation part of the iPhone an open battle. And maybe it'll be the chat GPT voice feature. maybe it'll be some other like enterprising companies and make voice on the iPhone a competitive space that that's my platform that's what i'm running on well ronjohn all three of me agree with you on that front so very convincing argument that's three votes already three three votes including yours that's four nothing settled unanimous consent four zero series of the people be a good campaign but what does not have unanimous consent is the quality of microsoft co-pilot. Exactly. So Microsoft's had some serious issues with co-pilot. We also have some news that

Klarna, Klarna's IPO is coming out. And then, of course, there's this Jaguar rebrand and anthropic funding that we want to get to. So why don't we do that on the other side of this break? Hey, everyone. Let me tell you about the Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than two million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one

you're using right now. And we're back here on Big Technology Podcast Friday edition, talking about Microsoft. Hopefully, we'll be able to get Clorna and Jaguar rebrand for short. and the Anthropic funding. It's amazing Anthropic, raised $4 billion, and everyone's like, hmm, an opening I raised slightly more, and it was like, biggest VC round of the all time. Look at them go.

So we'll talk about that. But first of all, there's this big story, and we're going to spend some time on this, that Microsoft's co-pilot has really not lived up to expectations with some incredible quotes from employees, and this is all being broken down from Business Insider. So Business Insider says a year after co-pilot's release, The reviews, both inside and outside of Microsoft,

indicate that the new product is struggling to live up to the hype. While there is no single measurement of co-pilot's performance, given a wide array of features it seeks to provide, many customers appear to be dissatisfied with the AI tool complaining that it is ineffective, costly, and not secure. And this is something worth paying attention to folks, because this one kind of blew me away. In October, when the management consultancy, sorry,

In October, when the management consultancy Gartner published a survey of 123 IT leaders. Only four said co-pilot provided significant value to their companies. Ranjan, what did you think about when you saw this? Because we've talked about this a little bit on the show, but I thought this was a story that felt definitive and it felt pretty bad for Microsoft and its co-pilot efforts. I agree it's pretty bad. four out of 123 executives.

And again, remember, like Gartner and other organizations like this, almost they're talking to people who live and breathe enterprise software. So they're going to get a pretty good reflection of what people are actually thinking. I think this fits pretty cleanly into the narrative that 2023 was pure hype. The budgets were just, wallets were opening up. 2024 people saw it's not going to be straightforward or easy. and 2025 people are going to ask hard questions. I think to me, the biggest issue is the pricing.

So co-pilot's at $30 a month per user, which is essentially doubling the licensing fee for regular Microsoft Office 365. So it's basically saying you're paying 30 bucks a month for Word, Excel, whatever, and whatever else. And now you're going to pay the same. So you should expect as much value. I don't understand why they're pushing that,

this early. I get the anchoring side of it. Long term, you are saying, like, this is, I mean, this should provide as much value as just using Microsoft Word, but it's definitely, there's no way these tools are going to deliver that right now. These are still, like, I don't want to say hacky tools. These are still incredible tools, but people are still figuring out how to use them to solve specific problems. And most people don't know how to do that yet. So to just shove it into their whatever app they're using and then expect them to suddenly magically understand how to derive equal value as they get from your entire existing ecosystem. It doesn't make sense to me. Yeah, that's a great, great point. And I think the pricing right here is really the problem.

If Microsoft was giving this away for free or charging $5 a month per user, we would not have seen the backlash that I think we're starting to see from people. But when you charge 30 bucks a month for people, you better be delivering some real value, and especially as you're figuring it out. And the Microsoft stock has increased on the basis of being able to charge this type of fee. And I don't think folks are seeing the results. And some of the quotes, I'm just going to read a few of them from the story are like pretty remarkable. And I think folks should keep this in mind. Like people are thinking about this with the price. It will probably be different if it was not being charged the way that it is at 30 a month. But anyway, let's just read a couple of these

quotes. I really feel like I'm living in a group delusion here at Microsoft, one long-time employee told Business Insider, the company touts that AI is going to revolutionize everything, but the support isn't there for AI to do 75% of what Microsoft claims it'll do. Here's another one. There's a gap between the ambitious vision and what users are actually experiencing. Internally, we're calling it growing pains. We're building the plane as we fly it. here's another one one microsoft executive offered a blunt assessment of co-pilot's ability to deliver useful results about one in ten times it's magic the rest of the time it's why do we even try here's another one there is a delusion on our marketing side where literally everything has been

renamed to have co-pilot in it everything is co-pilot nothing else matters they want a co-pilot tie-in for everything and lastly everyone wants to make their impact by jamming a bad co-pilot chatbot into their tools. So now every time I click on certain links, I get two pop-ups for crappy co-pilot implementations. Your reaction? These products could and probably will be successful, but it just takes time. And that's on the actual UI side and how people interact with them. And that's definitely on the LLM side and the information it can take in and return to So, again, to try to just roll this out too quickly and jam it in and double the price of an existing subscription that, again, $30 for an entire Microsoft Office Suite is a good deal. $30 for co-pilot as it is today is not.

I think they're really hurting themselves. And I think the, but I guess it doesn't matter because the stock's up. it's sending the message that uh to the market that this is like how you can build out your financial models and this is how you can value the stock so for now the strategy is been good i guess now also i was thinking like 30 dollars when you think about co-pilot and double the fee of uh Microsoft office sounds like it's too much but 20 bucks for chatchy bt plus 20 bucks for Claude, I'm totally fine with, and I get a ton way more value than that $20 feels like. So maybe it's not the right, it's not the wrong price if it works in the long term.

Yeah. But it is now. But it does matter because you're going to have companies that are, this is their relationship with Microsoft. And it's now going to have co-pilot everywhere. If you have bad experiences there, you may be less inclined to buy more seats, buy more services you might cancel and not want to go back in when it is when it gets better and then of course and i promise we're going to stop the piling on in a moment but this is an important part to read

there's the security concern and the security concern is massive and i don't know if this is just cherry-picked examples or whatever it is but it exists and it's worth talking about this is from the article many customers have deployed co-pilot only to discover that it can enable employees to read an executive's inbox or access sensitive HR documents. This is from a Microsoft employee. Now when Joe logs into an account and kicks off co-pilot, they can see everything. All of a sudden, Joe can see the CEO's emails. And a Microsoft spokesperson said the company isn't aware of any examples in which an employee

has been able to see the CEO's inbox without permission. Another Microsoft employee said the tool works really darn well at sharing information. that the customer doesn't want to share or didn't think it had been made available to its employee, such as salary info. The problem is that it takes years, and these are not easy situation faced with such issues. Some customers have paused their deployment of co-pilot. In the Gartner survey, 40% of IT managers said their company has delayed implementing the tool for at least three months, citing oversharing, and security concerns. I mean, Sadia Nadella has said security over everything.

He said internally, if you're faced with a tradeoff between security and another priority, your answer is clear due security. This is part of the Microsoft revival. It's been security. And so then I'm left wondering what are we doing here if we're, you know, the company

that prioritizes security has ridden security but is allowing these co-pilot instances to leak important information. They need to better answer this And again, it's a quote from, I think, yeah, it's a Microsoft employee familiar with customer complaints. But the idea that there has been any customer complaints that some lower level employee logged in to co-pilot and could see the CEO's emails, I mean, that that breaks the entire product.

That's like, it's over at that point. So to just say like a Microsoft spokesperson, if their only response is we are not aware, where of any examples in which an employee has been able to see a CEO's email inbox without permission. That's kind of shocking to me. Like, just from, what do you want them to say? No, this does not happen. Like, I hope so, because if it does, you better address it. If that has happened once, you better address this right now. You don't just say, like, give a standard PR spokesperson response or, like, non-answer. You either it happened, and you, you, either it happened, address it or it didn't happen and you just go hard back at this i'm shocked by that definitely and

look this is why this is the highest i expect for them this is why satya wants co-pilot and everything this is why they're already charging 30 uh per seat is because it takes a huge capex spent to make this happen so microsoft i just learned this from the story it plans to amass 1.8 million GPUs uh by the end of the year and it plans to triple its data center capacity, which is already at 5 gigawatts, roughly what it takes to power all of New York City each day. By 2027, it plans to spend more than 100 billion on GPUs and data centers alone. It needs this to work. And it has said, and this is the Microsoft Defense, that it commissioned a study that said for every $1 a company devoted to generative AI, the return of

return has been $3.70. So Microsoft response here is basically we are spending a lot of money, and if you spend a lot of money, you are going to make a lot of money already today. What do you think about that, Ron John? This is where, again, like, and regular listeners know that this is my biggest pet peeve with the hype cycle in generative AI as a profound believer in the technology is exactly this, that like, again, there's the quote of like, they commissioned a study that forever one, every $1 devoted to generative AI, their ROI is $3.70. Like, selling the story that already right now,

people are going to be deriving insane amounts of value, especially for companies that have never really used generative AI. I've been working with this for almost three years now. when GPT3 was launched via API three years ago and it takes time and it's hard work and like it everything is super custom and requires a lot of I don't know blood sweat and tears so I think they're falling into this trap again and they're it I think they'll be okay I'm not I'm not saying I'm not betting against Microsoft right now but just tone it down a bit that's exactly and there's some other like pretty interesting stats in this story. This is also from Gartner. And this sort of like tells us how open AI, I mean, not open AI, generative AI and co-pilot are still a pretty mixed bag. But there's some good things. So Gartner said 92% of folks said co-pilot enhanced employee satisfaction. 62% called it somewhat value. But at the same time, 75% said their

employees were struggling to integrate it into their daily routines. 57% said users felt the tool didn't deliver the value they expected, and 53% reported that it provided too many inaccurate results. I mean, basically what you're seeing here is something that can be very valuable, something that is useful, makes people happier, but also they're still not 100% sure how to use it. And that seems normal for a new technology that it's just two years on the scene and always improving. That's kind of throw my hands up and say, okay. My hands are in the air. There's not sum it up. That's it.

That's it. That's it. So we find out. All right, let's rapid fire through some of the things that we have coming up here. Oh, before we rapid fire, one guy who absolutely loved this story and is quoted in it is Salesforce CEO, Mark Benioff. And folks, he'll be on the show next Wednesday talking about AI and agents and co-pilots and Microsoft and Salesforce and his relationship with Elon Musk and whether he's, going to sell time ink. So that's coming up next week. So make sure to tune in for that on Wednesday. Maybe you could listen to it with your family as you drive to your Thanksgiving

destination wherever you're going. You know, we understand that this is pure in the car entertainment for the kids. Big tech in Turkey. Just give me, give me Benny off, give me, you know, the family in the car, hand the kids the iPads and let's get going. That's the big technology dream. All right. Very quickly, Anthropic raised the $4 billion. A lot of money. And it came from Amazon. And it's going to make AWS. Let's see, it's going to make AWS. The primary place, it'll train its flagship generative AI models. It is interesting that Anthropic and Amazon have a much cleaner relationship than Open AI and Microsoft. That's just my observation. What Microsoft gave less than a billion to the latest Open AI around. Anthropic, I mean, Amazon gave all four billion. I'm hoping this means that as a Claude pro subscriber, I don't know if others out there use it. I've been hitting the rate, like they have pretty strict chat limits. Yeah. If you use, if you're a heavy user, especially if you're writing code with it, you hit the limit and if you're on the, I'm on the Claude subreddit and that's all everyone

complains about. So I'm hoping this means that they'll be able to boost those limits a little bit. But, I mean, honestly, Claude is getting better and better. This is where, like, the Microsoft co-pilot stuff just irks me because there's great tools out there being built. You should be able to do it because Claude is incredible. And I'm happy for this. This means at least from the Open AI versus the ChatGBTBT versus Clod battle, they'll both get better, which is a good thing for all of us, at least. Definitely. I think this is going to prove it to be one of Amazon's best investments.

ever. I am. I think so. Bigger than Whole Foods, MGM? Yes, bigger than both. I think maybe eventually more money than both. We'll find out. And I am going to go to their reinvent conference coming up in December.

So looking forward to doing a show from there. And we'll have more to say about that pretty soon. So let's make sure to use the final eight minutes we have together, Ron John, talking about. something near and dear to our hearts, which is the Jaguar rebrand. And I logged into Twitter one day this week, and it was just a stream of people filled with rage about what Jaguar had done to its brand. And I was like, ah, these people need to get over their anger at rebrands. And then I took a look. And why don't we let the Wall Street Journal introduce it to us? This is from the

journal. The Jaguar rebrand is pink, diverse, and doesn't feature any cars. Luxury Automaker Jaguar is betting that a colorful and youthful rebrand will help it successfully launch fully into the electric car market. Critics, however, are questioning whether it's brand still knows how to sell cars. An avant-garde 30-second spot released this week shows a diverse group of expressionless people dressed in brightly colored sculptural garments as they stride wordlessly around a fuchsia landscape and pose with props like a yellow sledgehammer. It closes with a look at the carmaker's new logo, styled as J-A-C-A-C-U-A-R. The video displays phrases such as copy-nothing and create exuberant, but it doesn't include

any cars. This is from a marketing consultant. It's unusual to see a storied brand, so radically want to change its position. That's brave, but brave could be foolish if the customers don't like it. My quick reaction to this was, this rebrand was terrible. It's the opposite of what you. want your company to be, which was basically inaccessible to the point of, I don't even know, it was so off-putting.

There was, again, the expressionless people walking around and nothing about a car, nothing, just sort of, what acid trip did this company do to come up with this type of rebrand? That was my reaction. Maybe it's a basic reaction because it seems like everybody else felt the same way. but I know that you have a perspective, Ron John, and I'm, I haven't heard it yet, and I'm very curious to hear. I'm excited to take the other side on this one. No, you don't like this. I like, okay, here's why. Here's why. So for context, Jaguar, the brand, their cars have been declining in sales, especially in the U.S. And there was a good post that was like, you know, what their

positioning has been. They used to be kind of high-end luxury. Then they started moving a bit down market and now they're a bit lost in terms of where, like where in the price spectrum they sit. So the, so the, Jaguar the brand, Jaguar, the company JLR, Jaguar and Land Rover is doing okay. Like actually they're doing pretty well. And Land Rover's models have been increasing in sales significantly. So they actually, in North America, saw almost 30% growth a year over year, which is, I mean, cars is huge, especially for a legacy brand.

so they got to do something now what do you do this commercial was ridiculous like i mean i agree it was the stupidest thing i've ever seen but if the true goal and i don't know if this is actually but they started responding in the comments some pretty funny things like very online like uh responses and like kind of they engaged and the fact that they did that no in these situations like brands never do that they always kind of either the rule is you just don't say anything and let it pass or you try to like apologize or say we'll do better they just went there they owned it and they were funny about it so if the goal was to get people to talk like i had not thought about the brand jaguar in as long as i can remember i am excited to see the unveiling right

now. Like, maybe it'll be terrible, but maybe it'll be good, but I'm thinking about it. And I think this is the thing in marketing. Like, what other possible rebrand would have been exciting or talked about or good? I don't, I mean, I have no clue. I'm not a car marketer in any ways, but I think this has everyone thinking about it. And remember, their goal is probably to move away from pure like hardcore car enthusiasts to more regular consumers and this at least opens things up where people are thinking about them maybe they'll hate it but when they come up with whatever redesign we're all going to be watching that is the most logical explanation i could possibly have heard about why this might be good for jaguar however i just don't think anybody

watching that commercial is going to be like yeah i want a jaguar now did they get a lot of attention on the internet? Sure. Is that cheap? It sure is. We haven't seen the car yet. We haven't seen, we haven't seen, have you thought about Jaguar in years? Or do you ever think about the brand Jaguar? No. Yeah, I did think about it this week, but I'm not, it's not, I mean, it's not making me want to buy a Jaguar. Maybe the car, maybe the car, if the car is awesome, maybe, maybe, I don't know. The thing is, like I was speaking with RJ Scourange from Rivian about this this week. Your car, however many people might say it's not true.

Your car is your identity in some way. What you drive says a lot about you. Do we like the fact that that's happened? Is that an over extension of capitalism to the point where like we've made our vehicles, our identity? Yes. Is it kind of gross? Yes. But it is your identity.

And so like, what is being a Jaguar owner going to say about you if this is the new direction? Yeah, but that's like a lot of liberal people are still sitting on Tesla's, and I don't know what it says about them right now. That might be it. I mean, that might be their play saying we're going, they're going all electric, right? Yeah, yeah, yeah. Tesla's a big market. A lot of people want to get rid of their Teslas. Maybe this is exactly what Jaguar is doing.

Maybe it's not even being subtle about it. Maybe it's saying, F you, Elon Musk and your association with Trump, we are the liberal carmaker. We're doing electric cars. RJ Scrant from Rivian. He's like, we're just selling the car makers. Jaguar's saying liberals, come on in. We don't need to even show you the car. We're selling you an identity.

Hire the agency, Cantorowitz, and Roy, for more incredible marketing strategy just like this. I mean, but we didn't even make the strategy. Like, I think that that is actually what they're doing. If it is, that that is 40 marketing chess. That would be smart. From a business standpoint. Yeah, yeah, yeah, yeah.

That would be smart. And how do you get people thinking about, you are talking about you because making a splash in today's attention like landscape is nearly impossible especially for just like some old brand they did it the thing is though i mean i'm trying to say this without being being bad but like liberalism is kind of a damaged brand right now sort of they're still there yeah there's still trump only won 49.9% of the vote it's There is a large market of people. I like this that own a Tesla probably right now

and we're the environmentalist-leaning, liberal, progressive customer that are looking for an electric and they're looking at maybe it's the Hyundai Ionic or the new, I think it's like the Honda Perala. It's open. None of the other EVs have a, other than Rivian, which I know in that interview they said they're going to try to make more affordable cars, but right now 26 yeah yeah exactly and there's an opening here just like what made was there something about the jaguar ad that made it liberal was it that it was diverse like

see i didn't i honestly don't even remember i just remember some bright colors that's it yeah bright colors uh a lot of expressionless people i get the logo redesign cast of models yeah yeah the logo redesign I mean, I think it was more that it didn't show any cars and just looked like just a ridiculous, like almost like a Zoolander-esque fashion show. Like it, uh, it was ridiculous. But December 2nd at Miami Art Week, mark your calendars for the unveiling. Are we going? I think I think we have to at this point.

Got to take us. Hey, we're on board. We're hoping. We're rooting for you. Yeah. I'm like looking at the type of people that are, I'm still trying to figure out, like, what this ad says. I'm looking at the type of people in that ad. And I'm just like, it's not, I don't even know if it's about diversity, but maybe it's just the demeanor of these people.

No, no, I think it's the looks they're giving the camera. It's the whole thing. It's the whole, which again, if there are AI, create me a video to stir up the internet using brightly colors and diverse models. They did it. They did it. Well, I started this segment, not saying that there was any way I could possibly see the business logic in what they've done. I end this segment saying, I can see the business logic in what they've done. But this is also one of those things where we're going to see the numbers.

Now we have to follow this story, right? Yeah, now this is the most important story of 2025. Maybe exactly. All right, everybody. Thank you for listening, Ron John. Great to see you. Thanks for being here. See you next week as I'm driving my Jaguar up to Boston to my parents place.

We'll be in our new Jags, our new Jags, our new Jags. Big Tech. Yeah, exactly. I am driving the Rivian. I'm just driving the R1 second generation SUV this weekend. So that'll be. Oh, all right. That'll be fun.

I'll report back on that. And yep, we got Benioff coming up next Wednesday. And then, Ron, you and I are back next Friday. Next Friday, yep. All right. Thanks for listening and we'll see you next time on Big Technology Podcast.