Big Technology Podcast - OpenAI’s IPO Plan, Deconstructing The AI Bet, Apple’s iPhone17 Revival

Episode Date: November 5, 2025

M.G. Siegler of Spyglass is back for our monthly tech news discussion. Today we dig into OpenAI’s newly cleared path to an IPO, what trillion-scale capex vs. current revenue implies, and how Microsoft’s 27% stake, IP rights, and fresh AWS entanglements complicate the story. We debate whether the market can stomach years of heavy losses, why “AGI or bust” creates systemic risk, and what happens if model gains plateau, compute economics flip, or fast followers erase any AGI edge. Finally, we look at Apple’s iPhone 17 resurgence—why it’s hitting now and whether it’s enough without a breakthrough assistant. Tune in for a clear walkthrough of tech’s biggest news with one of the industry’s sharpest analysts. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: [e-mail]

Open AI has a clear path to an IPO. Will it be the biggest ever? Plus, we deconstruct the broader AI bet and ask what happens if it fails. And Apple's back in a surprising way. That's coming up with M.G. Seagler right after this. The truth is AI security is identity security. An AI agent isn't just a piece of code. It's a first-class citizen in your digital ecosystem, and it needs to be treated like one.

That's why ACTA is taking the lead to secure these AI agents. the key to unlocking this new layer of protection, and identity security fabric. Organizations need a unified, comprehensive approach that protects every identity, human or machine, with consistent policies and oversight. Don't wait for a security incident to realize your AI agents are a massive blind spot.

Learn how Octa's identity security fabric can help you secure the next generation of identities, including your AI agents. Visit octa.com. That's OKTA.com. Industrial X Unleashed is bringing together leaders, from IFS, Anthropic, Boston Dynamics, Microsoft, Siemens, and the world's most progressive industrial companies at the frontier of industrial AI applied in the real world. There's a clear

market shift happening. The world's largest industrial enterprises are done experimenting with AI. They're deploying it at scale, and they're choosing IFS to co-innovate with them. IFS is purpose-built for asset and service-intensive industries, manufacturing, energy, aerospace, construction, where downtime costs millions and safety is non-negotiable. Industrial X, Unleased will feature live demos of AI products embedded in real world operations, customers sharing measurable outcomes, and learnings from companies deploying industrial AI at scale today. Learn more at industrialx.a.i. Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. M.G. Siegler is back with us for his first, usually

first Monday of the month appearance, but we have such a big show for you. We moved it to Wednesday. This is the big show of the week. We're going to be talking about the potential. open AI IPO, looking at what happens if the AI bet fails, and then we'll both take a look at the iPhone 17's impressive performance and ask what it means for the future of Apple. Great to have you back on the show, MG. Welcome. Great to see you again, Alex. And yeah, as always, just keeps mounting all the news. I love going through the spyglass headlines as we do our monthly recap and just seeing how much ground the tech industry and the AI industry covers.

just 30 days. We started October, really, with SORA. We ended with this big deal between Open AI and Microsoft, and it all adds together because it shows that Open AI is on the path to an IPO. They, of course, have chat GPT. They have other products. They have a hardware product in the planning process, which, by the way, is going to be free of any influence from Microsoft, it seems, under this new deal. And it sort of all points to, yeah, we'll see. It all points to this, IPO and that's sort of how that that is how you lead your post on the open a i Microsoft agreement that's i think to me one of the big things here you say looks like an IPO is back on the menu open a has a much cleaner path towards at least uh the financing goals that it's going to need to hit because guess

what there's now actual equity for sale not just the nebulous promise of future profits you know ronj and i were talking a little bit about how important this deal with open ai and i in Microsoft is. And I think this really gets to it. The fact that there's equity for sale, which means they can sell it to the broader market. So what do you think we should anticipate from this potential Open AI IPO? And I jokingly, I mean, I just said should it be, will it be the biggest ever? Of course, it's going to be the biggest ever, right? Has to be. Yeah, yeah. I mean, given their fundraisers are bigger than any IPOs ever. So this has to be, you know, an all-time record IPO in the making.

And, yeah, I mean, I kicked off that piece as soon as I saw that news with exactly which you stated there, the quote, IPOs back on the menu because that was my initial thoughts. And then a few hours later, of course, Reuters, I think, had the reporting that, sure enough, they're at least talking about it behind the scenes. No surprise there, of course. Like, everyone sort of assumed that that was a big part of this equation. And I do think one of the more interesting sort of one-level deep layers of this is

that they got it done this year. Everyone talked about right, like there was the notion that they maybe had to for some of the SoftBank round. You know, that seems like it was, that tension was alleviated a bit because it didn't seem like SoftBank was really going to not give Open AI more money at, you know, a great, a great deal for them, a lower valuation than what the company is currently at. So I didn't think that that was too big of a risk. But at the same time, it does sort of at least fulfill a promise that they were making to investors, right, to say, like, we're going to be able to sort of steer the ship towards becoming a for-profit entity, a public benefit corporation. And they were able to do that again this year. Like they said,

I do think that ties into the weird news a few weeks ago about, you know, sort of pre-announcing the agreement with Microsoft. And I think that that, you know, sort of leads directly, obviously, to this this actual agreement and now getting the states to sort of sign off, you know, both California and Delaware, signing off on being, and allowing open ad to make this conversion. And so, yeah, the conversion just should, like you said, make it much easier to IPO, actually selling equity. Imagine that. How strange for a company, you know, that's raising billions and billions of dollars. And so all of a sudden, open becomes a much more, not quite straightforward, maybe, but certainly more than it had been

up into this point, straightforwardness. And the IPO, to me, you know, writing about this leading up to this event even has always been, it feels like eventually sooner rather than later, they're going to have to be a public company to be able to sort of tap into all of the different financing mechanisms beyond what they've been doing, obviously, to the greatest extent of anyone ever in the in the private markets but there are still they're probably going to be limitations on that at some point you would imagine like we're well into sovereign wealth fund territory now and that will still that still has a ways to go probably and and whatever soft bank can cook up but they're going to be able to do things like you know eventually bond sales which we see meta doing right for also for

their AI build out it's like these are instruments that open AI wouldn't have had access to you know until they're able to go public and we could talk about the time of this IPO and the Reuters report says it might be in the second half of 2026 or 2027. We could talk about how much money that Open AI might raise. There's talk that it's going to be 60 billion, although Brad Gersoner in a podcast with Sam Altman floated 200 billion and Sam didn't seem to flinch. That's obviously a small number for him. But I think what we should really get to is the meat of this, which is how is this going to happen? Because the reported revenue of Open AI is 13 billion. Reuters is saying, this year, Reuters is saying that

the company wants to do a $1 trillion IPO. Sam Altman was asked about this by Brad Gersner in the podcast I just referenced and kind of through a fit. Gersner asks, how can a company with 13 billion in revenue make $1.4 trillion in spending commitments, right? So that's just the commitments in spending, not even the valuation. And Sam says we're doing well more revenue than that. And Brad, if you want to sell your shares, I'll find you a buyer. Do you, do you have faith that any of this is going to work out with an attitude like that? I mean, to be fair, they both, I think, or at least Gersner said later, like it was in, you know, in better humor than it appeared to be, right? Like that, uh, that Sam was just ribbing him a bit. Um, but in the moment, and, you know,

when you listen to it, it does feel like, yeah, he's, he's, Sam is at least annoyed sort of, you know, by the, uh, the potential, uh, question, line of questioning along these lines. Because you could imagine, he just kind of sits there and says enough. I mean, he does go into more detail than the clips show after he makes this kind of offhand remark. But so, but you get the sense that he's been asked this or, you know, this, this notion obviously has been put out there a lot and certainly a lot in, in the past several weeks, you know, with all the financing is going on and everything and just the really the mounting cost because as you as you talked about sort of the surpassing one trillion in commitments and it's like when you look at the actual

numbers of the company like how on earth are they ever going to live up to these commitments that they've made and I think you know when when you're when you're that far there's that big of a chasm between those those numbers that they are actually generating in terms of revenue obviously not any profit, a big money hole in terms of how much they're losing. And these commitments, like, it seems ridiculous when you sort of look at it just on the surface level. And he probably is getting annoyed by everyone pointing that out to him. And, you know, he's saying, like, look, the revenue growth remains incredible. You have to sort of trust in us. And I mean, this all leads into, you know, what you and I both have sort of, yeah, latched onto the notion of this being

AGI or bust. And it's basically this is now, to me, the most binary bet possible that they're really betting that they can do something, you know, be it AGI, whatever you want to call it, that they're going to fundamentally transform all, maybe all business in a way that's never happened before to the point that that maybe these kinds of conversations will look silly. It would be how they would frame it, I would guess, you know, in hindsight, that they would say, like, remember when people were complaining that we were only generating X, you know, billion of revenue and we were committing to trillions. Well, those trillions helped unlock us to get to hundreds of billions and then eventually trillions of dollars in revenue. This would

be there, I would just imagine, sort of talking point and perspective on that. And the reality is, like, there's a lot to go between now and then. And the thing that I always come back to, that's sort of the most, I would guess I would phrase it as the most concern. Just not that it's a concern right now, but it's the potential concerning layer behind all of this is just like there's very real macro risk in that not even tied to open I right like everyone knows the markets ebb and flow, you know, the economy ebbs and flows. It's not the stock market is not going to go up into the right forever and so when that changes like what are the ramifications of that with this deal with these deals that open AI is doing and with you know, is they're getting more debt done and is they're getting all these sort of these new, new, uh, mysterious ways of financing done and, and all that, that, uh, that, uh, that that they're talking about, like what actually happens if, um, if everything hits the fan in the economy.

Right. And we, we will go through some of the risks here to this trade or moment, continuing to run a pace because as you think about it further and as the stakes get larger, the risks do pile up. Uh, but I'll just say two things can be true, right? You can have one of the most impressive exponentially growing technologies ever, which is certainly what Open AI has in its GPT models and chat GPT in particular, and it could be fair to question what's happening on the money front. And I think Brad's talking about how, first of all, how are you going to fund all this investment if you're making, you know, X bill, like 13 billion? How do you fund 1.4 trillion if you're making 13 billion a year,

which I think is a perfectly fair question, and I'm wondering about, and I'd love to have your perspective on. And then the other side of it is, you know, are you able, are you really able to go out in an IPO in 2027? Again, the numbers are, the most recent numbers that we've seen is that opening eye is going to lose 120 billion between now and 2029. So does an IPO in 2027, when you're still doing this math, where, like we had someone on the live stream of, the Ranjan Friday episode say opening eye as a converting to a for-profit is a joke in enough itself because there is no profit. So are you able to IPO under these conditions? So I'm curious what you think about both of these. M.G. Again, I go immediately to the macro there because who

knows what the market looks like in 2027, right? It's impossible to guess it could be better, certainly. It could be the same, obviously, or it could be much worse. And what's more likely? I mean, we've been in sort of a bull run for a bit now. And obviously, there's way too many factors, too many global, you know, elements to all of this, like with not, let alone tariffs and everything else that's been going on. And so it's hard, it would be impossible to guess, but there's a very good chance that the market is not as good as it is right now. And if that's the case, like what does open AI trying to go out look like? And some of that, a large part of that will really depend on what the story is in terms of if investors are still just buying anything

and everything that's sort of tied to AI or if that narrative has changed and they've decided like as we're starting to see it a little bit right with meta again this sort of ebs and flows where investors are get wary of their spend right um you know some quarters and then other quarters they have great numbers and so they go back to buying meta and then they then they seem like they're they're overextending themselves. And so then they pull out of meta. And so I feel like with Open AI, it's going to be obviously the ultimate bet on AI itself. And so unless they have some sort of slam dunk narrative that they're like close to AGI closer than we are right now or right on the path to it and all they need is sort of, you know, more capital and just to keep that going. And

then you too can buy in, right? Like public investors can buy in to the future of, you know, of everything. That's the narrative that they're obviously going to be pitching, one would assume, in 2027. But again, like, if the market is tanking, like, I don't know how that is possible. Now, I would assume that they delay if that is the case and that they don't go out in a bad market. But, again, to what we kicked off talking about, they need the capital. They need access to the capital is the likely reality there. And so how it goes down, it really is, I think, largely again, yeah, like macro dependent and how the market overall is looking in the health of the market and where investor appetite is on the AI narrative element of it.

Right. And I think we would both agree that given the current conditions, like if open I were to IPO today and wanted to raise, let's say, $200 billion at a trillion dollar valuation, it could do it right right that was like i think in an earlier post i had written about um just sort of playing out in my head how an ipo would go it's like because everyone's again pointing to before the before this the sam and brad gersner thing you know people were like how this company is going to go public like they're they're losing a hundred hundred million dollars over the next um you know several years like how on earth is that going to be sustainable as a public company and the reality is exactly what you're saying like right now they for sure could

Like, a lot of people would buy into that and say, like, again, this is the future of everything. We don't mind, you know, the burn right now as long as there's, there's hope of the promise of the future. And of course, they would point to like the Amazon's of the world, right? Where it's like, look, they burned and they burned and they burned until they, you know, were able to sort of turn the corner, flip the switch and become this hugely profitable company, even Netflix. Like same, same general idea, but just on a different scale, you know, in terms of the promise of what they could do. and that's what they would be selling. Now, there was a part of this interview that I think people didn't really focus on that I liked a lot. And I think it really goes to, well, what happens after that IPO hits, right?

The IPO isn't the end. It's the middle. And when opening eye is a public company, because inevitably it will be, the public is going to get a chance to see its numbers. And that is one of the points that Sam made on this podcast that he would welcome the scrutiny from the public markets to take a look at Open AI's numbers and, you know, make their determinations on their own about whether, because right now, as it's in the, while it's on the private market, we really just get like these kind of like leaked financials and then vague discussions about what's happening. I think it would be good for there, because it's such a big part of the economy right now, it would be good for there to be financial rigor that the public markets bring around this company. And then the other thing is all of the value that Open AI has accrued, well, unless maybe you're a holder of Invidio, or Microsoft has happened on the private markets. And so now public market investors will actually

get a chance to own it and do so in a way that like now it's somewhat proven to be a at least established business with a lot of revenue. But I'm curious what your perspective is on the financial visibility and transparency into opening eyes financials and what might happen when we can all see exactly what it's doing. Well, yeah, I mean, I think again, Sam, is feeling good about it now knowing, you know, I think what their growth is. And if that, if that growth can continue, then okay, yeah, sure, maybe that's, that's, again, that's what you can sell to the public market and public investors. And you say, like, you know, just focus on the revenue growth. We're continuing to just, just grow incredibly fast. And, you know,

all the limitations are on compute and the limitations are on power generation. And those are the things that we're working to alleviate and why we're spending all this money. But if that's, you know, narrative is not in place. If they start to slow a bit, if other things happen, then it's obviously going to be much harder to make that. But yeah, in terms of transparency, I do think, obviously, I think it would be, you know, a better thing. And it would hopefully, you know, it tends to focus a company itself, right?

That they know they have these numbers that are going to be disclosed. And so they have to do things. There's also a downside of that, too, right? Like maybe they have to do some, not juicing in a negative sense necessarily, but they have to figure out how to get more revenue out of what they're doing. And so maybe that, you know, it leads to a faster move on the ad front and, you know, faster move on some of the other business lines where they need to show better growth. You know, there's also the sort of, I would imagine that they would hope that the proposal to move to sort of the twice a year reporting is in place by then and not the quarter. reports as, you know, the President Trump has thrown out there is in place and maybe it will be. It seems like there's some level of groundswell behind that right now.

And so that would be, I think, good for them because if they're in the quarterly cadence, I think, yeah, they have a real risk of sort of getting slammed over and over again if they, yeah, can't maintain sort of the growth. And we already know, at least from League Financials, they're not going to be anywhere near profitability. anytime soon in 2027. And they're saying, I think the most recent one said 2030, right, they pushed it out another year. And so we're talking about being public with, you know, potentially three year, two or three years until you're profitable. And if they are not showing that in their public numbers, which again, we'll be open to everyone to see if they're not getting towards that trajectory to get to be profitable when sort of it's been reported that they would be, that can be a problem for them. Right. And that's,

is a big projection five years out and that is projecting that all this spending on infrastructure pays off you mean to be you have to how are you I don't know what this math is but I imagine you have to make more than a trillion dollars in revenue if you're gonna pay for 1.4 trillion in infrastructure you're at 13 billion now maybe maybe 20 I don't know if it takes him at his word right now that is that is going to be very tough it could be I mean it could just sort of stick on the public markets without making any profits for a much longer time, if ever.

And that will be very interesting. One other element that I just am thinking of while we're talking is, you know, so now we know Microsoft's stake officially, right, at 27%, which has, yeah, long been sort of like guesstimated and everything. And I think so that's a healthy percentage. And when you think about when Open AI goes public, like they better, I assume that they're going to have to have Microsoft sort of

have some sort of agreement with them to be locked in, locked up, right? like because if if Microsoft moves to sell that you know that that that stake uh you know not to say that they would do it in one fell swoop but remember Microsoft owned a pretty good chunk of Facebook when it went public um because of a deal that they had done the steve bomber deal one of his one of his best deals uh that they had done in uh around being and some other um side bets that they were doing with with facebook at the time and it wasn't big enough that it was going to you know tank um i think the stock when they sold, but they did end up exiting it. And you think now if they have, if Microsoft has this 27% stake and they do move to sell a sizable chunk of it, like that's

going to be, that's going to put a lot of pressure on the stock unless it's the market as it is right now where just everyone is clamoring to buy. And then there's Nvidia and everyone else who owns these stakes now. Of course, it's going to be the weirdest IPO of all time because it is open AI because not only do you have that stake that Microsoft has and the stakes that in video will have and I think AMD well no open I will have part of AMD so you're right that's opening I IPO you're also getting some AMD but you also have Microsoft owning the rights to open AI's intellectual property at the time of IPO right it's going to go till 2030 or 2032 in some areas and it's like all right so now I'm buying in on this IPO this company is

probably not profitable. I'm getting some AMD. That's good. But I'm also just like, I'm buying shares of a company that legitimately some other, a competitor really owns their IP for the next couple of years. It's wild. And what and one other point is that, you know, presuming like it's somewhere in the ballpark of the trillion dollar valuation that the sort of Reuters is reporting, which is incredible, but you've seems like it sort of has to be, right? Just given where they are in terms of private valuation, $500 billion already, it has to be a lease like there in order to sort of make it work from a number's perspective. Obviously, they could go public, I guess, at a lower valuation, but a lot of people would

not be happy about that if that were to happen. And so say it does go public at, you know, around a trillion, you have to sell a lot of upside, right? Like a lot of people buy into these IPOs, you know, knowing that this is, like you said, of the middle. It's not the end of the narrative. And there's going to be a lot of growth from here. Like all the big tech companies right now, you know, when they went public, they ended up having huge, huge upside potential from the point that they went public at. And can you say that for Open AI? Well, obviously, they'll be trying to say that. But like, when you're already at a

trillion dollars, like, what is it? Five trillion? Okay. That's now the most valuable company in the world right now is Nvidia at $5 trillion. Is it $10 trillion? Like is any other company going to be at that level in two years when they when they go out? I would have to imagine no. But again, the way Nvidia has been growing, I mean, I guess it's possible that they could be at that level. But you basically, you would be buying into Open AI already becoming the biggest company of all time if you really are a bull on the company. And you know, one way it might be able to get there is if it pulls off this device. And we love talking about some gadgets and hardware

on when we talk MG. And it is going to be very interesting to see whether opening I can actually execute on this device that Sam Altman is building with Johnny Ive. Now, I have had this conspiracy that they actually paid all that money for this device partnership, because they could sort of have that as one of the pillars in the IPO.

And that would sort of juice the valuation. And the way Sam was talking about it on this Gersner podcast was really interesting. He was saying, like, imagine you could have, like, something as smart as GPT-5 running locally with you all the time that will sort of give you advice and help you do things. He also had a tweet about this in August. Someday soon, something smarter than the smartest person you know will be running on a device in your pocket, helping you with whatever you want.

I guess, like, I'd just love to hear your perspective on whether, how seriously we should take this device and whether it is going to be a big part of the recipe as opening eye goes towards IPO. I do think you're right. Like it's a good part of the narrative because it's obviously it sort of layers in an Apple like narrative, right, where it's like, you know, you know the iPhone, you know Apple. It's a $4 trillion company based off the back of their device. The iPhone, largely at the back of the iPhone, you know, is the most successful product of all time. Well, that's what we're trying to build as well, you know, the new version of that alongside everything else we're doing. And so that's that's sort of, I guess, the narrative that they would convey. By the way, we have

the, you know, chief designer of the iPhone building this for us. And so I think that that will certainly resonate with the market. And I do think, I'm glad you brought that part up of the interview because this is something that I think I'm going to write about too. It's like you honed in on, I thought it was super interesting that Sam said specifically locally. that these models are going to run locally. So, like, when I've been trying to think through the potential of this device, everyone sort of knows and the reporting, you know, to date has been that it's, it's not a phone, but, you know, it's sort of a device that that is both meant to sort of

could sit on your desk or could be in your pocket alongside a phone, right? Because one thing that I'm having trouble wrapping my head around is like, well, yeah, it's another device. And sort of historically, people don't like, you know, just like adding superfluous devices for for no reason it's a hard sell right you already have the iPhone so why is this better than the iPhone the idea that it could be a device and again this is just sort of a comment made in that he made in passing but he's brought it up before but the local element of it is is super interesting to me because one that that suggests that they could potentially make a device

that doesn't need a connection um to the internet right like and so famously like you know amazon was able to strike that deal in the early days of the Kindle, right, with getting a 3G connection. But historically, it's very, very hard for other companies to sort of make that work. And even meta right now, like, you have to pair it to the phone and other such devices always pair to the phone. So I would assume, I was assuming that whatever device that they end up, that Open AI comes out with would be paired to the phone. And I'm sure that there will be a part of that maybe. But if it can actually work without the phone completely and without needing a cell connection, like, I think that that could be a potentially really interesting layer to this.

And presumably then it would work a lot faster than the way we currently think about these models working and everything. If you could fully run it locally without a connection. And if you needed the connection for like up-to-date news or things like that, you could still sort of fall back to that maybe. but if it can do most of it locally and it becomes super, super fast, I could start to see a world in which this is a different type of use case for people. Maybe I'm seeing the open AI narrative now come to like full board because you could say open AI is going to be, you know, if you invest a dollar in open AI's IPO, you get a company that could be, and this is the most optimistic scenario, but this might be what they take on the

Roadshow, a company that might be the next Amazon or Microsoft with the AI Cloud Division, a company that might be the next Apple with a device built for the future, and a company that might be the next Facebook with these AI social media networks like SORA. It's a compelling story. There you go. Right. It's basically taking all of the, all of big tech and packaging it into one super company. Uh, you know, maybe even they use the everything app to steal from, you know, what the narrative that Elon's trying to do, and that would be a nice, like, poke in the eye, and they, you know, are able to sort of, yeah, come, come up with some sort of narrative packaging around that. But I think you're right. Like, you bring up the cloud part, too. I know,

I think Sarah Fryer, their CFO has said this also, you know, just out loud now at this point, where it's like, if we have, if we're building out these data centers and we have excess capacity, like there's, there's a world in which we become, yeah, the next AWS, too, or Google Cloud. And that, you know, so you buy into that narrative, you buy into the device, you buy into the apps, you buy into the social apps, you buy, yeah, and then all of a sudden this is packaged as, you know, the potential 10 trillion plus company. I'm not sure that it will work and that we'll be able to sort of land that chip, but that's, that's how it's going to be packaged, I would imagine you're right. Right. And as you answer, I'm like thinking, I said all those things. And I didn't even include the fact that it's, pioneering a new form of computing with chat GPT or whatever you want to call like its own proprietary 800 million user app which will definitely be a billion by IPO day if it doesn't they

might as well not go out because this whole thing is over yeah yeah and all the you know and the other layer of it will be the interesting narrative with the other players right like so where is jemini at for google at that point where's anthropic at at that point right like there's there's currently this narrative um sort of bubbling around around Anthropic and how they're doing, you know, a much better job sort of on the enterprise side, as has long been the case, right? But it's like they're probably open eye would want the narrative to be that, you know, their own coding tools are eating into Claude and some of the cloud code and the other models that Anthropic has been working on that are considered better for coding right now. You would imagine that Open AI wants to snuff out that narrative by the time of IPO. And so is that going to be. feasible because that's obviously what Anthropic is working harder than ever on maintaining that

lead. Right. Yeah. And add it all up and I'm just saying, all right, Sam Altman, take my money, which is what most of big tech and basically anyone with money to invest has been saying. So I want to break down whether there are going to be some risks and vulnerabilities from that. We've hinted at it, this AGI or bust thing, you've written post AGI or Bust. We've done a show AGI or bust. So on the other side of this break, M.G. and I are going to break down the broader AI bet and talk about why, and I think this is right, he sees this as a bigger risk than I would say a lot of mainstream folks do. So we'll be back and talk about that right after this. The holidays sneak up fast, but it's not too early to get your shopping done and

actually have fun with it. Uncommon goods makes holiday shopping stress-free and joyful with thousands of one-of-a-kind gifts you can't find anywhere else. I'm already in. I grabbed a cool smoky the bear sweatshirt and a Yosemite ski hat, so I'm fully prepared for a long, cozy winter season. Both items look great and definitely don't have the mass-produced feel you see everywhere else. And there's plenty of other good stuff on the site. From moms and dads to kids and teens, from book lovers history buffs, and die-hard football fans to foodies, mixologists, and avid gardeners. You'll find thousands of new gift ideas that you won't find elsewhere. So shop early, have fun, and cross some names off your list today. To get 15% off your next gift, go to uncommon goods.com

slash big tech. That's uncommon goods.com slash big tech for 15% off. Don't miss out on this limited time offer, Uncommon Goods. We're all out of the ordinary. Shape the future of Enterprise AI with agency. A-G-N-T-C-Y. Now an open source Linux Foundation project, agency is leading the way in establishing trusted identity and access management for the internet of agents, the collaboration layer that ensures AI agents can securely discover, connect, and work across any framework. With agency, your organization gains open, standardized tools, and seamless integration, including robust identity management, to be able to identify, authenticate, and interact across any platform.

empowering you to deploy multi-agent systems with confidence, join industry leaders like Cisco, Dell Technologies, Google Cloud, Oracle, Red Hat, and 75-plus supporting companies to set the standard for secure, scalable AI infrastructure. Is your enterprise ready for the future of Vagentic AI? Visit agency.org to explore use cases now. That's agn-tc-y-org.org. And we're back here on Big Technology Podcast with M.G. Siegler of Spyglass. You could find Spyglass at Spyglass.org. Highly recommend. You go sign up for the great newsletter there and read all the posts. And, MG, I found this post that you wrote AGI or Bust to be really interesting

because as I read it, I kept coming back to the point where you said to your, you kept saying in your writing that this bet on the whole market is betting on open AI. And this is a very big risk. Like, it's almost like you're, it almost felt like you were screaming, hey, there's, if there's a big risk here. I'll just read one part of it. Open AI is worth $500 billion as a private company. It's silly, but it's not particularly funny. And I increasingly do worry that it runs the risk of getting quite serious because I believe

opening I strategy here is basically AGI or bus. Sam Alvin has positioned his company to the point where it can only work if they achieve AGI. And it truly does transform, well, everything. like there's been talk about whether this is a systemic risk or not why are you why are you sort of outlining the fact that you know this is a systemic risk i mean it just feels like i guess once the narrative has ramped to the point where as we were talking about we're we're well over a trillion dollars in commitments in terms of yeah what the these build out look like and it's not just open eye right it's it's it's it's meta as we've talked about it's google it's microsoft it's all these neocl clouds it's Oracle, everyone's getting involved, AMD, like we're, we're on to like layers and layers and layers of all these companies. And the intertwined nature is the thing that I would, that I would, I guess, highlight in that in that risk too, because it does feel like that at least led by OpenAI, I think that, again,

going back to the notion of these unique and interesting new methods of financing that Altman has talked about, it feels like he's been able. to woo a lot of the rest of big tech to buy into the notion that, you know, they need to get on board with this, this mentality that this is the absolute future. And by the way, like, if you don't, you're going to be left behind and you can even see it right now in the stock market. If you do these deals, your stock jumps, like all these stocks are jumping because they do these deals with open AI. And so clearly the market loves this. Someone will buy your shares, Brad. mentality exactly exactly there's there's no there's no lack of buyers out there for this and so

again it just feels like it's ramped to the point where the promises not just with open eye itself but across all of these companies and all of them being so intertwined both in investing in each other but also these these data center deals and everything else it feels like unless they do truly transform everything with the you know again we call it we can call it AGI, we can call it super, super intelligence. We can call it anything we want. But unless it truly transforms everything, it feels like it will be both a letdown and it potentially will be a business let down in terms of not being able to fulfill all of these, these trillions of dollars being spent on this. And so I think that the narrative that they've built up, and I think

Sam Haltman has explicitly done this and gotten everyone who's on board, on board right now, around this notion that they need to do, get to AGI, and they're going to be the first, and it's going to be the biggest opportunity of all time. And I'm just saying that there's a lot of risk, as we talked about, but specifically with the macro picture, even if everything goes great for all of these companies, if something just happens in the macro markets and like causes Nvidia to slip on earnings one quarter, you see like this cascading effect. It's not hard to see. Like, you can see how all of a sudden they, the market gets spooked by, you know,

Nvidia being public, missing that. Imagine if open eye is public and they don't hit, you know, the numbers that they're, that they're projecting one quarter and the market gets spooked about the future of AI. And so not only do they hit open AI, they hit Nvidia, they hit Google, they hit Microsoft. They pull back from these things because they think, you know, people start, giant funds start to think that they're over-index perhaps in their AI bet and they're, you know, there's too much risk in their portfolios. And, and you can see a cascading effect that just like isn't really that big of a, of a like,

miss even required, I think, in order to sort of cause this to happen. And so I just tried to point out, like, that that's like a real possibility. And I think it's a fairly high, you know, likelihood of that happening at some point. I think it's a matter of timing. But you say, okay, so you say in your post that the issue is that Open AI has increasingly dragged others along for the ride, and those others run the risk of not so much failing as much as collapsing the stock market and thus the entire economy. But the narrative up until this point has said, well, it's just their profits that they're

investing. It's just Microsoft's profits and Nvidia's profits. And so where's the risk of, you know, sort of cascading, failure is not there. So it is different in that I think it would largely be a psychological event, you know, again, trying to like extrapolate out how this would play out. I think it would be like the psychological sort of contagion of everyone all of a sudden being worried that AI is perhaps not the future that everyone thought it would be.

That doesn't mean, again, to my point, like it doesn't mean that it can't be great and it can't be great technology and it can't be used for interesting. things and there can't be real business, it just is saying that like, what if it's not the future of every single thing as is being sort of built up in the promise right now that I think that we're starting to hear around the narrative around from open AI on down? And so I fear that that is the thing that basically spooks the market. And because these, you know, the Magnificent 7 and beyond tech companies now control so much of the S&P 500. And they're just, you know, they're the biggest companies and largest stocks in the world, where if they fall, like, it just starts to have this contagion against the whole market. Again, you can sort of see this. Like, it's, it's probably like, again, like a matter of timing because there is like always going to be a downturn. And if there's a downturn, there's is, do you really believe that like big tech is going to be insulated by it from it? because of the future of AI, I mean, that would be the hope that they would project, I would

imagine. But that's just not how markets typically work. Right. And I mentioned earlier that I have this list of risks and it just keeps getting longer, the more we see the bets grow. And I'll read a little bit from it. I mean, here's some risks that could really make things go sideways. One is that compute gets really cheap. Like maybe a company like GROC, not Elon Musk's but grok the inference chip makes it so cheap and then all of a sudden you have a company like open AI with a trillion dollars of build out contracts and I don't know what happens there but like a lot of company stock prices are hinging on that another thing that could happen is that training doesn't yield improvements anymore like we've been running on this idea that bigger models will get you

exponential that exponentially better you know AI sorry bigger bigger bigger training runs will get you exponentially better models. But that might be leveling out. If that doesn't happen, you know, there's going to be a sort of roadrunner off the cliff type of moment. There could also be no economic advantage in holding AGI. And I think we're going to start talking about that much more on the show as we, you know, maybe get closer to this. But like if you have all-powerful AI and then, you know, you could have, it's not going to be a long time until a lot of others catch up there. And so then what happens? Like Open AI gets AGI, let's say Anthropic gets there the next day, and Meta gets there a couple weeks later,

and Amazon gets there a couple weeks later. Right. And then there's, of course, the market downturn problem. So you add that all up and you're like, hmm. I think that's, you know, these are all, one other, a few other things to throw out there, like along those lines, which is that, you know, what if just LLMs and what if AGI is really the be all end all, let's say, but what if it's not LLMs that get us there, right? What if that's just a small part of the equation? which has long been stated by Jan Lagoon and others like talking about that. But what if that narrative and that actuality sort of shifts faster than open AI can sort of manage it? And that sort of gets out in front of them and all these other companies.

Like what if they're in the middle of these trillions and trillions of buildouts? And then all of a sudden it turns out you need, let's say robots, right? You need robots out in the world. And, you know, do they pivot these data sets? centers to become robot factory. He's like, you know, or there's any number of directions that this stuff can go in. And it's like, again, what if LLMs are just a small part of the, of the bigger equation that's needed for this? And how well prepared are these companies for that? And what if, you know, something else comes in like Google and Microsoft and all of them are still

are working on quantum computing, right? Like, what if that comes into play? And that becomes like the next big thing that everyone wants to bet on and not AI anymore because AI to your point is like now just table stakes and everyone has achieved AGI. And so, you know, it's this thing. And even going back to what we were just talking about with the device and local models, like what if, you know, a lot of the best work that can be done with AI can be done via sort of these local models or smaller models and you don't need these giant, giant data centers in order to train them anymore and or do inference, you know, in the cloud anymore. What does that look like?

And then there's the, also the thing that's always been in play. But again, seems to be bubbling up more recently, I guess, because we're past these trillion dollars of commits now, it's like, what is the actual like value, depreciation value of Nvidia chips and, and, you know, what is this world in which these data centers, like, have to be refreshed basically every year buying billions and billions of dollars worth of Nvidia chips or they're obsolete. Like they would say like, well, they're more profitable. But like, is that really playing out that way? It's, it's unclear if that's like, that's actually how it's going to work. And what does that mean for Nvidia if you both have to always buy the latest and

greatest? And what if you realize, oh, you no longer have to do that? Like, there's dual sides to all of this. And there's a lot of risk in sort of every single side of it. And let's briefly, there's one more headline that just dropped earlier this week that we should talk about. Opening AI has signed this from CNBC. Open AI signs $38 billion compute deal with Amazon partnering with the cloud leader for the first time. Open AI has signed this deal. It is the first contract with the leader in cloud infrastructure and the latest sign that OpenAI is no longer reliant on Microsoft. The first phase of the deal will use existing AWS data centers. And I think this is already coming up. Some of the capacity is already available. This is according to an

AWS executive and Open AI is making use of that. I mean, speaking of the entanglement everywhere, it's very, very interesting that this is now happening. They just, yeah, the deals are happening all over the place. Yeah. You know, this is obviously a direct offshoot of sort of the new agreement with Microsoft where they can, yeah, no longer need to be exclusive and more importantly, because obviously Open Eye has been signing some deals with other players, but Microsoft had a right of first refusal on all of those, and they no longer have that, you know, per their new agreements. And so open eye is for you to sort of go out and play the field, as it were. And so they're doing so right away with the biggest players.

This one is interesting, too, from the Anthropic angle, right? Because obviously Amazon is a huge shareholder in Anthropic and has that big partnership around their tranium chips, right, to be used for Anthropics models. And then Anthropic goes and does a deal with Google to use TP. be used, potentially. And now... Anthropics helping... I think Anthropics is also helping Amazon build the data centers.

So it's like now is that knowledge being used for open AI? And now all of a sudden we have Amazon teaming up with Open AI. And it seems like this is also around Nvidia chips too, because, yeah, they already have them in some of the data centers, but is it, are the Traneum chips involved at all? It's not cited, so maybe not. But like, this is good... it's it's even more entangled by the day which is wild right okay so we have like 10 minutes left i definitely want to talk with you about uh some positive news in the app world and i think we've talked

about obviously apple's a i failures uh they've lost many more people to meta uh since the last time we talked which is crazy because you'd think that they would hit a limit of people that would go to meta but they haven't um but actually there's positive news in the apple world which is that the iPhone 17 is proving to be a hit. It has, it led Apple to a strong quarter in the most recent quarter that they just spoke about last week. And there's expectations that it is going to have a powerhouse quarter in Q4, double digit iPhone growth. There were months and months, really years, of stagnation on the iPhone line. It just wasn't growing. And it's growing again. And Apple is in the middle of an unquestioned revival. The question that I have for you is, is it enough?

So this goes to, I wrote a few weeks ago about the notion of, I think I called it a retreat to safety in terms of what Apple is focused on now. As you noted, sort of with the, you know, the problems that they've been having to put it lately with AI. It feels like, you know, they may be going back to sort of their strength, which is obviously devices, right? And I think that this news only will sort of embolden them more to do that and sort of really double down on like, look, a lot of people are doing AI. A lot of people are focused on that. You know, we haven't had success to date. Maybe it's something we should, you know, more deeply partner on. There's growing, you know, talk that Google is going to be a partner on sort of backing up Siri and being able to bring it up

to snuff relatively soon. And so, look, that's great. We'll get that taken care of. But what we do that no one else can do is build these great devices. Like, you know, Open AI is not going to build a smartphone. They're working on their other device, which is a far off thing. And we'll see, you know, Microsoft doesn't do this. Amazon doesn't do this.

Meta is trying to do the glasses, but they can't do the smartphone. Like, we should really focus on the iPhone. We should focus on the MacBook. We should focus on iPad. we should focus on these devices, and that's our strength. And again, I think that you'll see them, you know, over the coming years now sort of double down on that as realizing that that's the one thing that they can do that's unique and that is proven. And, you know, regardless of what we think about the future of AI, the reality is that all of this stuff has to run somewhere, certainly in a consumer, you know, side of things, you're going to use it at least until open AI's magical, mythical device is that. out there. You're going to likely be using it on Apple devices, whether that's a MacBook or

whether that's an iPhone or an iPad. That's how you're going to be running a lot of AI and interacting with a lot of AI. And so to me, that's that story. I do think that the iPhone in particular narrative here is interesting because obviously they tried to come up with a new model this year in terms of the iPhone Air. There's conflicting reports on whether that model has actually been successful or whether it's not been. But it's sort of, it seemed to maybe focus in on like people realize like, oh, I want the iPhone 17 basic model, the sort of cheaper version, or I want the pro model, you know, the faster and better battery version. And I do think the colors oddly helped them too. And I think that we might see more of that as silly as it is. I just think like,

you know, these are things that consumers like and want to buy. And so Apple was so focused on that they need the AI narrative to like spur a new super cycle or something of iPhone sales. And it turns out they didn't need that after all, it looks like. Can I ask you, do you think it really was the better phone? I mean, the 17 obviously specs wise, much better than the 16 and the 15. It is a jump. And the more I hear about it, the more I want to go out and buy it. Currently have a 15 pro. Usually I wait three or four years. It's been two years. I'm feeling the gravitational pull to go get the 17. Is that, is that a hundred percent? the explanation of what's happening here or could it be for instance maybe people bought a bunch

of new iPhones four years ago in 2021 during the pandemic yeah and it's just a natural time to upgrade so i definitely think that that's i think that that's part of it like it is you know these the phones are impressive but the reality is like the jumps are impressive every year i get a new one every year it's sort of hard it's increasingly sort of hard to tell you know the difference in in terms of just speed, day-to-day speed and using apps and whatnot. The camera systems always get better, obviously, and that's important to people. You know, it's like, it's the device you use most often. So it's really important to people.

But why this year, you know, versus the others, to your point. And I do think you're exactly right in terms of just there being a confluence of events that are leading people to upgrade this year. And a big one might be, yeah, the boom cycle that was, that took place during COVID times. is now naturally leading, yeah, to a few years down the road of, like, everyone sort of needing that, that upgrade finally, which they didn't need a year ago. I do, I do wonder how it plays out into next year, though, because the rumor, you know, as we've talked about in the past, the rumor iPhone fold device and what that looks like, you know, in terms of success, if they're

in fact not having, seeing the success they want to see with the iPhone air. Like, do they, are they a little bit more reluctant to sort of push into the fold? I think that, you know, it still goes forward and they still do it. But like, what does that actually look like in terms of success? Because they probably thought that would be the real marquee thing leading up to that 20th anniversary iPhone that would get people to upgrade.

Yeah, I think they got to do the fold. People love to fold. So we talk about it for it. It just makes people happy. But let me ask one more question about this then. If you take the fact that the 17 is doing really well and Apple intelligence is still nowhere. But it doesn't seem to matter.

The app, you know, if you look across the spectrum, ChatsyPT is growing, but it's not like a new device. Alexa Plus is being released and rolled out. Should be out to everybody now, according to Panos Panay, maybe, but it's not, it's not this like, you know, paradigm shifter. Google's doing well with Gemini. Is Gemini anything but, you know,

another version of chat cheap d i don't think so yet um so i'm asking myself did i make a too big of a deal about the apple intelligence failures um or is it just that that story is going to take maybe a little bit longer to play out but it's still very relevant yeah i mean i think the thing that you're hitting on there is that the one particular aspect of a i which is sort of more of the agent agentic workflows those aren't where they need to be yet right like i think everyone would agree with that we've been promised this for at least a couple of years now. And now we have open it, uh, that we have open AIS chat GBT browser, um, Atlas is out there and, and sort of trying to do the, the agentic work in the browser. We got perplexities browser doing some of that. But it's

nowhere near it needs to be in terms of actual day-to-day usability and, and usefulness. And that's part of what Apple's promise was, right, dating back to the WWDC a couple years ago where it's like, it will be able to, yeah, like alert, you know, alert you, um, and get grandma home from the airports. Uh, and it will be able to, you know, pull all this stuff out of, out of your own personal, um, history and everything. I think, I think that that remains a compelling narrative for these devices, like if they can actually access, um, you know, your, your own, uh, sort of personal information in a safe and secure way, of course. Like, that potentially is, you know, a thing that moves the needle for people with with regard to using AI, but we're just not there

yet, right? Like you're talking about with Alexa Plus with which is out and all of these other things. Like there are fun sort of like parlor tricks still and they're fun to, you know, use to to chat with a little bit. But like until they can do actual things that are doing real utility and sort of being able to to become like an actual assistance on your device, like I don't think that we're going to see it. And Apple is perhaps in some ways benefit. from the fact that no one's really doing that yet, right? Like, Google is the farthest along and they tout a lot of, you know, cool potential functionality, but it's not, it's not to the point where it's going to sell pixel devices yet, right?

And so, again, because that's not the case, I think most people look at the iPhone and be like, again, this is a great device for the things I actually want to do right now, which is take pictures and use chat TVT and use, you know, whatever app I want and, and, uh, play with Sora and do all these other things, right? And so until that moment comes where the promise of what we were promised from the new Siri actually comes into place, then I'm not sure that, yeah, any of these are going to move the needle from a device perspective. Fascinating stuff. The website is spyglass.org. Our guest is M.G. Siegler.

MG, it's always great to speak with you. Thanks again for coming on. Likewise, Alex. Talk to you soon. Speak to you soon. Thank you, everybody, for listening and watching. We will be back on Friday. Friday to break down the week's news. I'm sure nothing will happen in the next couple days

between now and Friday, right? That's just how it goes. We'll be back with Ron John Roy then. So thank you for listening and we'll see you next time on Big Technology Podcast.