Big Technology Podcast - OpenAI’s Big Week, Did Google Kill The Web, AWS CEO Resigns

Episode Date: May 17, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI's GPT-4o announcement 2) Is voice + video the right user interface? 3) Do we need smartglasses for this technology? 4) Was ChatGPT-4o too flirty? (yes) 5) OpenAI's potential iOS partnership with Apple 6) Siri improvements are coming 7) What AI + iphone could look like ahead of WWDC 8) Will AI features increase iPhone purchases 9) Listener feedback on the iPad 10) Ilya's out 11) Future of allignment at OpenAI 12) "I've resigned" resignation letters 13) Google IO announcements 14) What's left of the web after Google's AI overviews 15) How the latest AI updates change Google's business 16) AWS CEO Adam Selipsky resigns 17) Amazon's AI strategy --- 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 had a massive week with the release of a new model, a partnership with Apple, and the departure of its chief scientist. Did Google just kill the web? And the AWS CEO has resigned. All that and more coming up right after this. Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed and nuanced format. We have a massive week of AI news and news across the tech world to talk about including the resignation, big resignation inside Amazon, but also these massive new releases from Open. AI and Google. And we are just off of Big Technology's first live event with Box CEO Aaron Levy. So thanks to everybody who came out last night. The recording is going to be out on the feed next

week. And it sounds great. And it was just such an energizing event and awesome to have so many of you there. Awesome to have you there, Ron John. And speaking of which, let's introduce Ron John Roy. He writes margins on Substack. Ron John, welcome to the show. It was good to see you in person, Alex, and not just on the other side of a screen. And it was, uh, it was. a fantastic event. And I'm glad this is going to be coming out before. So some of the things Aaron said that were very smart, I can now repeat them and sound smart myself. Yeah, we'll tease them and then we'll talk a little bit more about what's coming because I thought that this show will talk more about the nuts and bolts of the announcements and sort of the implications for the

companies. And then next week on Wednesday, Aaron and I will talk more broadly about the AI space in general. And we also have some questions and some fun segment where we read his tweets. It's really a a great one. Let's begin talking about the big news that started the week. We won't tell too much on this, but OpenAI, of course, released GPT4O, and O stands for Omni, and this is according to TechCrunch. They refers to the model's ability to handle text, speech, and video. It's going to roll out iteratively across the company's developer and consumer-facing products over the next few weeks. It can do things like, you ask it a question and interrupt it. It will have real-time responsiveness. And it also,

this is kind of the thing that to me is most intriguing is it upgrades the vision qualities. So you can ask it what's going on in the software code by pointing a camera at something. You can say what brand of shirt is this person wearing. You can even, and this is unbelievable, you can have it watch a live sports game with you and then explain the rules to you as you go. And I think this stuff where you like point the model, point your camera with a chat GPT baked in and get a chance to speak with it about what you're seeing. really is going to be some fascinating technology that we're going to be able to work in and

think through and help take this AI field to the next level. The question is, when is it going to come out and how much does the reality mirror what we saw in the demos? Because I and many other people tried to use this the day after the event, not available. It's still not available to me later in the week. And we're going to see whether the promise actually meets, or the reality actually meets the promise that Open AI delivered. So Rajan, I'm curious to start off. What was your reaction to these announcements? And do you think that there was an overpromise here? Where do you think this is going to leave us? All right. I am very excited by what OpenAI announced, and I do not think they're overpromising because I've actually been using the voice interface

with the chat GPT iOS app for a while. In fact, one of my favorite things I discovered, and this is six to eight months ago on the pre-GPT40 version, is on a long car ride, I'll ask, you know, with my five-year-old son in the back, tell me a story about and add his name and make it super personalized and give details about our house or his school. And it will give this like 10, 12-minute story. And, you know, he's completely amazed and immersed at the fact that how personalized it is. So already the voice interface has been pretty advanced.

and now actually having an LLM built specifically around multi-modality and incorporating voice and corporate like being built around voice video image recognition I think is going to be able to deliver it and the thing I'm most excited about is I actually didn't want GPT5 I thought getting another massive increase in compute power that could potentially solve unimaginable problems that of like such scale is not what. what I wanted. I want to see changes in UI. I actually think the biggest limitation with all products right now across Google perplexity open AI is it's just a chat-based interface and that's limiting and that only addresses specific use cases and moments. So this really like really

tackling the user interface side of things to me was more exciting than if they had launched some big new model that they said gets us closer to sentience in AGI or whatever it would be. I think this is good. But here's my big question is how are people going to interact with this thing? I mean, we've already seen that voice assistance haven't taken off in the way that we anticipated. And of course, this is due to limitation in technology, but also just terms of, in terms of the user interface, right? People don't really love speaking to these things. And then there's the case of the video, right? And yes, like the video can look at you and tell you how you look, but it seems much more useful pointed out than pointed in.

And what I mean by that is it seems like we might like really need smart glasses for this stuff to actually sing as opposed to using it on our phone. So you're obviously excited about the new formats. But I put to you, isn't there limitations there as well? No, I think voice is an interface. The limitation has always been the actual processing and quality and efficiency. And again, I've ranted many times and we're going to be addressing Siri and Apple in just a bit. But I actually have had Amazon Echoes in my house and Alexa is pretty good and we use it all the time and we would now we've switched over to the Apple HomeKit and home pods and now use it a little bit less and hopefully that's going to get better. But I actually think voice has worked and has been a natural

medium or natural platform. It just couldn't do all those multi-step things. I don't know. Do you remember the Alexa App Store? Like they're really trying this like they're going to, every media company, this is when I was working in publishing, was going to launch a new Alexa experience. The problem was the computing side and the processing side, not the interface. So I actually think this is going to completely revolutionize the way people interact with their phones. In fact, one of the things I've always found fascinating is like my mom in Bengali has the, which is what my parents speak, I speak a little bit. To type, it's a lot easier for her to just dictate to the phone. So, and actually my wife in Mandarin Chinese does this as well.

They're already dictating all the time for messaging. It just transposes it into text. So people, I think, are very, very comfortable talking to their phones to a machine and an AI already. So this is just going to take it to a whole new level. Yeah, and as you're talking, it reminds me that I did have a viral tweet this week where I pulled out the clip of them talking through a chat GPT4O and having it translate English to Italian.

an Italian to English and just being this like very conversational and pretty accurate translator. Now of course people came out and nipicked and they said, you know, the Italian accent was off or you know, how are they going to get slang? And it's like, oh, come on. Like this is very, very impressive stuff. Come on. Okay. So I do think, okay, maybe this form factor is going to, is going to work, especially if the technology is this step change like we think it's going to be. I mean, this idea of like it responding emotionally or with emotion as opposed to this flat, I can help you with that I am an AI assistant type of cadence is interesting. The fact that you can interrupt it is big because these things just tend to talk and talk and talk and if it can actually

stop process and then respond in real time, that's huge. And then there's also, and I'm curious when you think about this, there is personality in these things. And an open AI basically put out this series of videos of its engineers speaking with chat GPT 40. And some people have called chat GPT as being a flirty voice, and I agree it's flirty, but I think it extended to the point where it was actually hitting on these engineers. Let's take a listen. I just need to know, do I look presentable, professional? Well, Rocky, you definitely have the I've been coding all night look down, which could actually work in your favor. Maybe just run a hand through your hair or lean into the mad cheetahe is fine your enthusiasm is what's really going to shine to i don't have a lot of time

so i'm just going to throw this on what do you think oh rocky that's quite a statement piece i mean you'll definitely stand out okay so what do you think about this is this like going to help the technology take off is it too flirty it's very it's a little strange, I have to say. All right. I think this is where, and I do not know the gender makeup of the engineering team at or the product team at Open AI, but I would think more women in the room might have helped this because I agree. I actually think this is terrible. I think like they should not focus on personality yet. First focus on delivering experience that is not so dry and mundane and boring and AI voicy that it's unusable or annoying to use. But,

But that idea, the interruption in solving that is really interesting because that creates a much more natural flow of conversation. But creating a voice that's hitting different inflections and trying to speak back to you, then obviously it gets weird because the ideas in the heads of the people who built it clearly are realized in the tone of the voice. And flirty, certainly when I heard it too, and right there, it's a little weird. uncomfortable versus just try to get me the answer that I'm looking for and do the thing that I'm asking in a reasonable way is good enough for now. Ron John, don't be silly. Of course you want me to have personality. That was the most awkward moment of big technology.

And just think about that at scale in AI. You've just killed off GPT4 Omni. Well, finally, you have to take a swing that hit. So the one thing that is sort of being missed, I think there's a lot of talk about the use cases, which is appropriate and talked about the personality of this bot. The one thing I think is being missed largely in the popular conversation is that this thing is much cheaper. And we're going to talk about this with Aaron on Wednesday.

But basically, the opening I made the bot, first of all, free to everybody. So everybody is eventually going to get this 4.0 chat GPT. You won't have to pay the $20 a month for it. And for developers, they made it 50% less than the current chat GPT4 to use. And I think this is interesting because it shows kind of a key strategy. I thinking about writing this for my newsletter or maybe just putting this as one of a series of takeaways. But opening eye is taking this massive swing, right? It's really like get it.

It's in get big fast mode. And I think that was kind of missed here, which is that they are making a big swing for users, even if it's going to cut into their profits or even make them unprofitable. by making this available to everybody. I think they know that chat GPT flatlined and they need to kick it up a gear. And so that's why we're seeing chat GPT40 free for everyone.

And then for developers, and Aaron's going to get at this, they want to make this technology so value efficient for developers that they almost can't help but put it in their products. I think it's a very interesting swing. I don't think it's being fully appreciated this strategy, but it is a strategy shift for them

or at least this very clear strategic direction. So I'm curious, you know, as the margins guy, what do you think about their decision to effectively forego margins for size? I think this is a confused decision and actually, I don't think it's a good one. And I will say for the upcoming Aaron Levy episode, the entire conversation around the economics of AI was the most fascinating part of it, like really connecting the technology to the business and trying to think about what does this mean for startups or big tech companies and I think this is a confused effort by open AI because on one side their revenue stream around premium subscriptions and like at that consumer facing level has been the

primary driver of revenue at least from what we understand we don't have a clear visibility because they're a private company and giving it away for free will increase users but then propensity to pay is that really going to convert at any point at the consumer level I don't know. And then on the other side, bringing down the cost 50% is actually amazing. And I am personally excited to start developing even more and not having to worry about surprise bills showing up. But then you start moving towards Facebook, or sorry, meta and Lama 3 and open source

efforts where all you're paying for is the compute. You're never going to compete against that because that is free. So in a price war, I don't, I mean, the open source. source is always going to win. And again, so this is very exciting overall for developers everywhere, for users everywhere. I don't think this is a good move for their business. I mean, maybe it's something that they didn't even have a say in. Like maybe it's just inevitably they know that price of this stuff is going down to

zero. And I just wonder what it means for what Open AI becomes. If that's the, if that is going to happen, then actually going back to the idea for Omni and like what was unique about it. then maybe all the value is accreted at the user interface layer. And, you know, the winner is going to be the one that has the best user experiences, which is kind of what happened on mobile as well. So if you think about it, maybe, okay, that would be the positive take from Open AI's perspective

if they're showing that they're recognizing the actual model value, like paying to call an API to a large language model is going towards zero, that they're going to have the coolest voice and visual and video experiences on top of that, and that's where they're going to eventually make money. It could be, it's a generous interpretation. It could be good for them, but I don't know. It's going to, this whole conversation has made it clear that it's going to get harder and harder for these companies to really prove how they're going to make money,

especially the AI-only ones like OpenAI versus a Google or Microsoft, where this is just an add-on. Right. And then the other side of this is that you and Aaron will address this next week is that you basically like if intelligence, artificial intelligence becomes just so pervasive everywhere and it's just coded in to every single bit of computing, then the price doesn't have to be that high to make a lot of money. But there's also other ways that they can make money and that is potentially licensing the technology to big technology companies. and let's talk about this report because you have been begging for Siri upgrades. So there's a couple of big pieces of news as Apple gets close to WWDC. Here's the first one from Bloomberg. Apple nears deal with OpenAI to put chat TPT on iPhone.

And this is a very interesting way that the story is phrased. Apple Inc. has closed in on an agreement with OpenAI to use the startup's technology on the iPhone. The two sides have been finalizing terms. for a pack to use chat GPT features in Apple's iOS 18, the next iPhone operating system. And like when people saw this report, I think they immediately went to, aha, they're putting chat GPT in Siri. But the report explicitly does not say Siri, right? It says in the operating system. And that is very interesting to me, where maybe the first bit of news that we're going to get from WWDC is that the actual iPhone operating system changes to interact with you from a generative

I perspective before we even get to Siri. How did you read this news, Ranjan? Yeah, I, well, first I read this news and had to almost question my life decisions because how excited I was by it, because as regular, right, like this was Friday confession series, here we go. Unfortunately, the single most exciting piece of tech news I have had because regular listeners will know how painful and angry Siri makes me. So that part's good.

I think what you just said there, I agree, is where it gets interesting because does this mean there's no more Siri? Or does Apple itself allow you at the actual device level to change the default voice interaction? Like, I can select OpenAI. Maybe they start to even allow other voice assistant or LLM-driven chat assistants at the device level. So I choose. Maybe I even have to pay Open AI via subscription, but basically they open up the device to allow

users to access and have choice around which LLM they're interacting with. And as you said, it could be both when I, you know, hold the Siri button and talk to my phone. Maybe it is. And when I'm searching for an app or searching for an answer at the actual search bar level, that becomes LLM-driven. And so I think, I really hope they have something exciting. I have a totally different interpretation of what this means. And now that might happen, by the way, because we also have this New York Times article saying that they are planning to upgrade Siri. And I think that will happen. If anything, if the Times came to Apple and Apple said, no, we're not going to upgrade Siri.

Like Apple didn't comment for the article. If they weren't going to upgrade Siri, they would just off the record be like, your story's wrong, don't run it. And the Times would either not run it or adjust it. But here's what I think their partnership with OpenAI, with OpenAI. might look like in the operating system. Now, we've heard so much about this agentic type of interface, right, where the AI becomes your agent or the AI becomes your assistant. And I think what the iPhone is going to do is you're going to swipe.

This is a total guess, but you're going to swipe, and this is just that one bit of OpenAI partnership. You're going to swipe left once you get into your home screen. And instead of all these little widgets you have on your phone, there's going to be a little rundown in natural language of what's happening in your life. This is what you have on your calendar. This is the weather. This is the what you should be thinking about. You might be interested in this in the news. By the way, here are some new episodes on your podcast. So like it actually becomes an assistive type technology

on the phone using the natural language of an open AI. And that's where I think when we talk about the operating system, I think that is how it gets baked into the operating system. What do you think? That, okay, that is interesting to me because do you ever use iOS shortcuts or Apple shortcuts? No. Okay, so there was a brief period. I tried to use shortcuts. And basically these are where you can kind of connect different apps. It's almost like Zapier, if this, then that. If people remember these or use these tools where you connect different apps and different actions trigger other things in a different app to create a little experience. Now, like when Alex refers to. to, when you referred to agentic experiences, the idea that you have these kind of multi-step large language model, AI-driven things that are happening. So you can imagine if your phone knows you're taking a flight on Wednesday night and the weather forecast says it's going to rain on Wednesday night, it will somehow, in natural language, as you said, tell you, be cautious. I've

checked your flight status. It's still on time, but like make sure to bring an umbrella, whatever it is like all those pieces of information and things and ways you interact with your phone it's crazy to think about how much can change and how many cool new ways to just function with the phone can happen if you connect them and have some intelligence behind that so that is very interesting if they promise that and don't actually have it ready for a year and don't upgrade Siri I'll still walk away disappointed but if they actually still promise that and I will I'll find that pretty amazing. Yeah, and what's clear is there is a bond that's developing between OpenAI and Apple.

I mean, OpenAI released their chat chip-a-t desktop app this week, and it's only on Apple on Mac OS to start, not on Windows, despite the fact that Microsoft gave them $10 billion to build this stuff and all the server processing. Yeah, where OpenAI fits into this whole big technology landscape is still so confusing because, again, we don't know their finance. We know they probably have made, they have revenue with chat GPT Plus and their actual like enterprise API services, but we have no idea. So it almost does feel like they're going to have to ally with one of the players much more closely and it's not going to be Microsoft now.

And also, Apple, at least as far as we know, I think there's been some chatter around their own model development, but is the one big technology player? that at its core infrastructure does not have AI models and infrastructure that Google Cloud, AWS, you know, Microsoft, meta, all these companies have AI, consumer-facing or enterprise already AI at the core of what they do. And Apple is the one that doesn't. Right. And this is actually kind of a good time to bring up this listener email that I got. And we had a listener that listened to our iPad segment last week. And I had said, oh, the iPad is just thinner. But They brought up this really good point, which has the iPad has this M4 chip. And they failed to mention that they essentially released the most powerful computer they have to date.

Not only that they released their most powerful processor to date in a tablet, not on a computer. The iPad is really a beast when it comes to power. I think that's a great point. And I think Apple was going to have like this computing that they can use and sort of put right on the problem. And that might be with the new chips. It might be with these servers that we're talking about. there's also going to be the opportunity to expand the hardware and you know for instance the new york time story about the improved series said that a new piece of hardware may inevitably like have

more memory to allow a better version of Siri to operate on the phone and that's cool and that could drive an upgrade cycle my big thing on the upgrade cycle here is that we're probably not going to see an immediate iPhone upgrade cycle right away from apple because uh this is 2017 technology right It's all builds on the Transformers. I got the chat GPT app working on my iPhone. I have the Claude app working on my iPhone. I don't think I need a new iPhone to run Apple's next generation of AI. But over time, there could be like a truly synced up hardware, software relationship inside Apple devices that allows this stuff to sing.

I don't know. I think if they introduce some completely different ways and form factors of actually using your phone, and it's only going to be available on the iPhone 17, I think is the next one or 16. I'm going to buy one at least, I'm sure. Yeah, I mean, they always, I guess they have that option to not make it available to current users, but that's somewhat user hostile. But I mean, this is the most user friendly and user hostile somehow at the same time company in the world. If I need to buy one more dongle to make this AI stuff work, I'm going to freaking throw the phone out of the window.

AI dongles. That's going to be the big revenue driver in their services line. There was a great line in the Times article talking about how they've made this now a tent pole product, a project where they basically have allocated the resources and the top talent in the company to start working on this stuff. Whereas before they hadn't done it in like previous iterations of this style or this iteration of computing like voice computing in the home pod. So that's pretty bullish on the Apple front. I am eager to see what's going to happen there. I still don't know if they're going to let me into WWDC, so I'm trying. Come on, we got to get in. Got to get in.

Tim, if you're listening. Yeah. And just on the note of reader feedback, we've gotten a lot of reader feedback over the past couple weeks. And I just want to say how much I appreciate people writing in to the email address and like actually having a conversation, especially when things haven't been perfect. And again, like, I'm learning from you. We were just done with Tuar Cash over on Wednesday.

and he talked about how he's learning from his listeners and we're learning from you as well. So thank you for doing that. And when you have, you know, it's a piece of constructive feedback. Bringing it in via the email versus the rating is always good, although we always appreciate those five-star ratings. So thank you for that. I almost missed this. Ilius, it's cover's out, right?

So the chief scientist of OpenAI has resigned. He wrote on X, after almost a decade, I have made the decision to leave Open AI. the company's trajectory has been nothing short of miraculous and I'm confident that open AI will build AGI artificial general intelligence that is both safe and beneficial it was an honor and a privilege to have worked together and I will miss everybody dearly so long and thanks for everything just kind of a hilarious thing to write in your in your post I'm excited for what comes next a project that is personally meaningful to me about which I will share details in due time and wait it gets better right after he left this guy Jan like it

uh who was also in this super alignment or who was leading this super alignment group inside opening i basically to ensure that the ai shares our values he just posted i resigned and he's out too and it led to like this kind of hilarious wave of i resign from open a i memes on twitter uh but but it is it is a big deal i would say for two reasons one is because ilia obviously was has been exceptionally talented and behind multiple breakthroughs he is the guy that elan musk recruited from google to start this thing in the first place. So it can't be good to lose him, right, at the very least, and it might hurt a lot. And then secondly, these seem to be the people that were driving the alignment work within the company, which is, again, it's the fastest mover in all of

the AI industry. And it is a little bit concerning, I guess, that they're out the door. So how did you look at this news? What do they know? Through all this, when all the Q Star stuff came out, when the initial Sam Altman corporate intrigue was happening, I just want to a clear idea. Like if you know something about the potential end of humanity that's concrete, I would hope you would not just tweet I resigned and you would tell someone and say maybe we should keep an eye on this. But I also think to me, this just reminds me that Open AI is just so fascinating as a company because, again, it's been well over, or it's been a few months since they had completed their last funding, but $80 billion, or $86 billion, I think,

was the valuation. This is a company where any other company that size, one of the most important members, founders, minds within the company leaving, would seriously cause some issues in terms of everyone, you know, investors being a little concerned. And somehow they keep moving on and skis. gating by and firing and rehiring CEOs and delivering great products. It is an interesting one. Yeah.

Okay. We have to go to break, so let's go to break and come back right after this to talk about Google and the departure of the CEO of Amazon Web Services. Back right after this. Hey, everyone. Let me tell you about The Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and

informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The 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 editions. We're talking about all the week's massive news and AI and computing. And let's just talk about the Google news quickly. So right after opening, I had their event, Google had its IO event, its developer event. And the big news, well, they had multiple big announcements. They have a similar voice, multimodal, capable product that they're releasing.

The biggest news that caught most people's attention was, and they're also sorry, and they're also releasing a model with two trillion tokens, which Aaron will talk about, sorry, two million tokens, which Aaron will talk about next week. But the biggest news that everybody was talking about was that they are taking their search generative experiences, which puts AI above the text of the search results and AI summary, and they're going to release that en masse, a version of it called AI Overviews. And this is from Casey Newton. This new approach is captured elegantly in a slogan that appeared several times during

Tuesday's keynote. Let Google do the Googling for you. It's a phrase that identifies browsing the web, a task once considered entertaining enough that it was given the name surfing as a chore, something better left to a bot. It was hard to escape the feeling that the web, as we know it, is entering some kind of managed decline. To everybody who depended even a little bit on web search to have their business discovered or their blog post read or their journalism funded, the arrival of AI search boats ill for the future. Google will now do the Googling for you and everyone who benefited from humans doing the Googling

will very soon need to come up with the plan B. So I kind of looked at this and I was like, all right, is this the end of the web? I mean, this is basically the big question that people are asking after this event. What do you think, Rajan? Yeah, we've talked about this before and I think I still think the idea

that this is a net bad is wrong. I think this is the end. of the web as we know it from the last 20 years. I think everything is going to fundamentally change because all the economics that drove the way the web developed are completely going to be shifted. However, I don't think that's a bad thing because I think a lot of the web has already been killed off and dead and recipe websites and other spammy SEO driven things. The fact that publishers hacked what time is the Super Bowl famously a number of years ago to drive traffic to get display ad views all of these things were always bad and them going away and losing all economic incentives

i don't think is a bad thing in semaphore they had a really good piece recognizing this where it was like it said the culprit is technology and technology is disruptive people forget that the beloved web which some now look at wistfully in its twilight hours was terrible for publishing initially it killed classified ads and subscription models so we already went through the web is destroying publishing now once publishers figured out how to drive traffic with SEO, now this is going to kill traditional SEO. So I think, I don't know, I think this is overall a good thing. And also, we had debated, I remember, Gartner predicted by 2026 that search would drop 25%. I said, yes, you said no on this. I think this is going to drive that decrease in search. And again, I see that in my own daily

life. I don't know, maybe I'll say over 50% of what would have been a Google search is now on either Gemini perplexity or chat GPT. I've already started moving away. I'm going to end up just using Google more often because the experience is going to be better. Yeah. No, no, Google's going to be well positioned, but it's going to hit their business hard until someone figures out that monetization model because clicking out to the other website is how they've made their money. And when people don't want to see 10 search ads. And also, let's not forget, Google almost essentially killed search by degrading it so much over the last few years that overall, I think this is a good disruption. So there are some, there still are some good websites out there. And I do want to take

a moment to think TechMeme for showcasing Big Technology podcast on its homepage. And TechMeme is my go-to site for finding out what's happening in the tech world. I used it a ton this week to figure out what was going on in the news. And you can find out what's happening as it's happening. I think you'll find great value from it as well. So you can find it at Techmeme.com sums up the week's headlines. And it definitely helped me organize this week's show. So I hope TechMeme and like some of these good websites do continue to stay functional.

I also wonder like how much the behavior change is actually going to take place. So first of all, this stuff is going to roll out and people are like, oh, it's going to kill the web. but it's only going to roll out on a percentage of searches. It's not going to roll out on every search, even if it rolls out broadly. Because like we've talked about in the past, it's just a calculation in terms of when do you want a Gen AI answer and when do you want the 10 blue links?

I think people missed that. I think also the data shows you a very different story in terms of where a search is heading. Because if you think about it, since Bing's chat came out, we've had a year plus to see if this is more appealing to people than Google search. and it currently, this is according to Wall Street Journal, it has 3.6% of the global search market, 3.6%. So I think that businesses, the business practices are sticky and the consumer behavior is sticky.

And, you know, this is, I think it's easy to overreact looking at one of these demos and saying it's the end of the web. And maybe it's a different era of the web. But I also think that we do have more runway here before we kind of close the curtain. and say, thanks for coming, everybody. Or like Ilya, like Ilya said, what did he say? Thanks for the good times. Thanks for the good time. I mean, honestly, I think tech meme is a good example of a good website that you go to

and has a very specific value of even like adding context to headlines, curating tweets for you. I mean, I go there all the time for that specific reason. And yes, if Gemini somehow when users ask what's going on in tech to day, day, if it scrapes and redoses all tech meme homepage content, that's a problem. And these are the kind of things that those are the things that need to be solved, how to prevent good websites from being regurgitated. But the bad websites, I think it's time to get rid of. Right. And then there's the business model, the business model question, right? And this is back

to Casey Newton. They'll show fewer ads on web pages, more and more lucrative ads on search engine result page and scoop up the affiliate fees. This is the important board. Scoop up the affiliate fees that used to go to all the websites publishing best laptop lists. Once they have a working agent, they'll take various fees for being your travel agent, personal shopper, etc. Anyone who thinks this is a slam dunk for Google's business is totally misguided. I don't think Casey is. I think he's just outlining the business here. But it is labor intensive to build those integrations. And it has to work really well. And I don't think necessarily people are going to just trust search generative experiences or whatever it is, the AI overviews in terms of

buying products and travel. It will be help. It will help. It will be assistive, but it's not the end. And so what you're going to end up having is less clicks on ads, much more computing power that's needed to produce the results. And an unclear, I mean, or at least even a more expensive way to plug into the monetization side on the back end. They might figure it out. They might end up making even more money because of it. But I think these business questions are really going to start to pop up in a way that they haven't been yet. Even if this AI overview rolls out in a limited way, it could potentially like hit me. We look at this in the stock market. It's just a mark. We look at the margins. We look at the comparison to the last

quarter. And this is what's going to happen. And it's going to, it's going to be challenging for them. No, it will. I mean, this is a complete disruption of their business model that is potentially the most profitable business model in history or one of them. So they're definitely going to have to come up with a new monetization model and no one has done it yet or figured it out. The perplexity CEO on this podcast had talked about their ideas. Everyone's trying to figure out and we're just getting started on this. As we wrap up this segment, let's just go quickly. I want for numbers or anything like that. But are you, do you feel better about Open AI at the end of this week than you did at the beginning? Worse. I feel, I felt almost better when I watched the,

the launch event. And I am as a user even more excited. But actually, as we've been talking today, I realize just how confused I am about what direction they are heading in terms of their business. And and I really don't think they have a clear path. And Google, better or worse? Google, I would say better. Because the big question has always been, is Sundar going to show the leadership that they recognize the disruption

of traditional search as a business model and do something aggressive around rethinking search? And if they didn't do anything and we all started using perplexity more and chat GPT more to replace search, Google would be gone. So I think they at least, this week showed very much so that they fully recognize what they're up against and they're

working on it. And they are positioned well to capture value somewhere. So I think I think better. What about you? Open AI? I'm the opposite. I'm better on Open AI and worse on Google. I do think, you know, opening, I didn't ship GPT5 and I'm still waiting for that. But I think that, like these products are going to get uptake for sure. And I like this strategy of going big, getting big fast for them and trying to get their stuff in everybody's hands and for google to me it really like you know it was very nice demos but it punctuated this idea of they're going to really have trouble in terms of making money here and they might get stuck in this kind of in the muck in between i mean the stock's doing well so it can at least take that was it just the flirty chat bot from open

a i was just the flirty chat bot it was the flirty chat bot actually i'm being honest i admitted It was, I got totally drawn in by OpenAI's chatbot. By the way, folks, do not type in flirty chatbot or flirty OpenAI on X. The search results are not anything you want to look at. So I regret doing that. I really regret it. It was just a terrible start to my morning. There's a lot of Twitter searches nowadays that I instantly regret that were seemingly innocuous that and in just stuff that I've

do slam my laptop screen down. Listen, people do not use Twitter in a public place, unless you don't mind. But still don't do it. There are other people around. Okay, very quickly, the CEO of Amazon Web Services, Adam Slepsky, has stepped down. It's effective June 3rd. Matt Garman, the SVP of AWS Sales, Marketing and Global Services at Amazon. At Amazon is coming in to replace him.

Here's the financials. It grew 17% year over year in the first quarter. quarter in 2024, it beat Wall Street expectations. It also sort of got it. It was $25 billion. It's profitable, extremely profitable. 17% of Amazon's revenue in the most recent quarter, 62% of its operating income. And it also broke this kind of slide or kind of stuck in the mud feeling that it had for a while. This is kind of the interesting context. So Kate Rooney from CNBC, you know, did some reporting and kind of gave a jaw-dropping report. She said that he is a wartime, the new one is a wartime CEO. The old one was a peacetime CEO. They feel that

they're lagging behind Google and Microsoft in AI. And they say that Amazon is tethered to the success of Anthropic, you know, which has also teamed up with Google, and this is the real jaw-dropper. All of this has caught the attention of Amazon found. and former CEO Jeff Bezos, and her source tells her that the former CEO is very involved in the company's AI efforts. This is a big deal. What's your reaction? The most interesting part of this for me is the business is going great at AWS, the numbers you just gave. It's growing. It's strong. It's from a pure revenue standpoint, earning standpoint and growth standpoint, it's good. But it is also clear that we have not talked about Amazon.

relative to AI in weeks or months. I actually can't even remember what the last big announcement is. And it is interesting to me, though, that that was enough to take out the division CEO who has actually done an incredible job for AWS. The fact that not having flashy demos and exciting announcements, it can actually do that. I think it's going to be interesting

whether that was the right decision or whether they should have just kind of kept their heads down, focused, and not worried. Because I know for a brief period, Amazon was kind of sending the message that they were the neutral infrastructure to build AI on that you could, from the beginning before Microsoft did or definitely before Google did, you could build on all different types of models on their infrastructure. And that was their positioning. And they kind of owned it for like a very, very short period.

and now I don't even begin to pretend I know what their positioning is in the space. Absolutely. Yeah, I mean, it seemed like to bring your own model idea was good for infrastructure, but then on the infrastructure side, it seems like Nvidia has really won on that, and Google Cloud is actually advancing more

on these AI efforts. All right, we're out of time, but thank you, everybody, for listening. Thank you, Ranjan, for being here. We're going to see you in the Q&A section of Wednesday's show and then back here with us again on Friday. Thanks for joining, Ron John.

And make sure to listen to the Aaron Levy episode. That was a very, very good one. We had a great time. It really, it was one of the most fun events I've been a part of. So very happy about it. And I'm so stoked that the audio recording worked and we'll be able to bring it to you on Wednesday. All right, everybody, thank you for listening. And we'll see you next time on Big Technology Podcast.