Big Technology Podcast - OpenAI’s Turmoil Rolls On, Apple Under Siege, Bitcoin Hits $70,000

Episode Date: March 8, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI's leadership in flux as Mira Murati named in NYTimes report about Sam Altman's ouster 2) Where's Ilya Sutskever? 3) OpenAI reveals that open source was never so important in Musk lawsuit rebuttal 4) The AI field is wide open now! 5) Anthropic's new bot realized it was being tested 6) Is AI close to sentience? 7) Apple sales drop 24% in China as Huawei surges 8) Apple fined 1.9 billion euro for anti-competitive moves in the music space 9) Apple's reputational risk 10) Apple revokes and reinstates Epic Games' developer license 11) Apple's AI play 12) Could the TikTok ban be for real this time? 13) TikTok's risky political strategy 14) Rise of China in the App Store 15) Temu's strange math 16) Bitcoin hits $70,000 --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology Premium? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [e-mail]

Open AI's turmoil rolls on with more than just Elon Musk threatening its momentum. Apple is under siege as fines, regulations, and China woes build up, is TikTok actually getting banned? And Bitcoin hits $70,000, baby. 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, nuanced fashion. Oh, do we have a show today? Yeah, let's podcast, baby. welcome. As always, Ranjan Roy of margins. Ranjan, how you doing? Let's podcast. There's a lot to do this

week. No, that's what I was thinking as I was putting down this rundown. I was just like, yeah, let's podcast because there's so much amazing, really interesting and dynamic moving parts to talk about in the tech world, starting with the fact that opening eyes turmoil from its board coup is not anywhere close to over. So the first thing that really caught my mind and we talked about it last week about whether this investigation into what actually went down and precipitated Sam Altman's firing, whether it would bear fruit at all, whether the public would learn anything from it. And look, we're starting to learn stuff.

It's already trickling out. I know this report is imminent. I'm sure it will be a big story either next week or the week after. But one of the things that really caught my eye and maybe the biggest AI story of the week came in the New York Times where we all thought that it was Ilius Schever, the chiefs scientist of Open AI that led this ouster. But actually, they point to Miraburati, who is the chief operating officer, who went to the board and was talking to them about Sam's manipulation, what she, basically the report

says that he manipulated people into doing exactly what she wanted, would ice out executives if they didn't follow his lead. She went to the board, and then apparently Elio went to the board afterward. And of course, she became the interim CEO. And so I think this is important because we could really see some serious changes in the structure of open AI after this report comes out if it actually builds on this report that the New York Times has, that the New York Times has, because she's still the CEO. And this is the leadership structure. It's basically her. It's Elia.

And we're going to talk about Elia because it's still kind of unclear about what he's up to at the moment. But we might actually get some substance in this report. What did you think when you saw this come out, Ron John? Yeah, I think I remember when the firing first took place and Miramorati was appointed interim CEO. There was 100 articles everywhere. Who is Miramurati, the new CEO of OpenAI? And everyone trying to figure out exactly her story and what her role was.

And then when Sam came back wondering, you know, where did she go and what's her role now and what's going to happen next? So then to find out that she potentially was instrumental in that initial firing, I think one has to make for a very awkward boardroom or Google Meet or Zoom or whatever choice of meeting platform they work off of. But then too, I mean, I think this stuff cannot get out when it's so clear, when you're questioning someone's entire character, not just leadership style, but essentially character and enough that it led to their firing previously. I can't imagine how this sustains before we even get into Ilya Sutskavur. Right. And so it also like it goes to like we thought, okay, Sam's back in November and that's basically it. It turns out that this thing ain't done yet. Right. So we have real questions about what the structure of this. company's going to look like moving forward what the board is going to look like moving forward and it's certainly not stale and that really leads perfectly into this where's ailia meme so there's been this meme in the tech world especially in the ai world asking like what's happened with ilia

satskever the chief i said the chief scientist at open ai and he let's just talk about his sightings he hasn't really tweeted anything at all since december after being somewhat active there and then opening eye is basically explicitly saying that he's you know not fully back at the company yet so in in january axios reported uh that sam altman said that he isn't sure of the exact status of susskever's employment which is bizarre and then the times article about marotti says dr sudec ever has not returned to his regular duties at the company um according to some sources now this is the guy who basically is the brains behind all this entire operation right he's the chief He's the one that Elon Musk specifically look to poach it from Google to build this company.

Crucial element inside Open AI. Now, of course, they have some very well qualified AI scientists there outside of Ilya. But if he's potentially out, and my prediction is that he's going to be out at some point this year, if he's not out already, it does really shake up your confidence in this company's ability to continue to press the status quo forward. I have to ask. This is an $80 billion company, in theory. Any normal kind of business intrigue like this would have resolved itself after five months. Like, again, you attempt a boardroom coup, you fail, then you just leave.

And it's okay. And everyone would understand if Miramirati was behind this initial firing of Sam Altman, and then he comes back, then one would assume she would leave. if Ilya Sutskiver, you know, was behind it and now has been reported that he's not, you know, he hasn't returned to his regular duties, I just don't understand why they don't make things incredibly clear to the overall public, to their investors, to the entire world, here is where we are today and here's how we're operating. And again, they have the pieces right now. Obviously, chat GPT's growth is slowing, but SORA looks like it could be pretty incredible.

Looks amazing. Yeah, they're, you know, know, they're still benefiting from the missteps of Google's and their Gemini rollout. There's so many tailwinds behind them that this is still a company that could succeed to incredible levels, but I just don't understand from an actual organizational standpoint why they are operating so weirdly. I mean, I guess they are still technically an early stage startup, and they're kind of operating one, but I feel they have to kind of grow up and just, you know, be that $80 billion. company that they're supposed to be yeah and it's so astute to point out that this is a moment where they could take advantage of Google stumbles because this is kind of what I love about this moment this technology

is so powerful it's evolving rapidly and everything is so up in the air like there's no company with a clear lead everyone's vulnerable and everyone is you know throwing a tremendous amount of uh compute power and people power towards the problem and it is just kind of fascinating to see where where this is all going that out like the drama you know is one hand like okay is it gossip a little bit but it's actually like really important to sort of talk a little bit about about it because this is effectively like without i mean what was their line when sam was uh ousted open eye is nothing without its people right this is sort of how they're going to determine the the future of this technology is who can put the people together along with the technical know-how to move it forward and to take advantage of the other stumbles

Yeah, that's exactly my point is it. Like, it's, you have to be so on right now. It's so incredibly competitive this space, whether it's the actual consumer facing chatbot side, whether it's going to be converting this into an enterprise focused business, which Open AI has a bigger hill to climb. They're ahead in the race right now. But once you're competing against Microsoft and Google for enterprise contracts, it's going to be a tougher battle. So, They need to get everything together in an incredibly disciplined way. And when this kind of drama and intrigue is still unresolved, it does not bode well for them. And I love how you list Microsoft as one of their competitors because Microsoft indeed is going to be both an open AI enabler and competitor.

We talked about it a little bit last week with the fact that Microsoft has invested in Mistral, which is another AI company. Of course, it's a much smaller investment, a few million as opposed to 10 billion in Open AI. But that's definitely gonna factor in here. And now, you know, what do you not need in the middle of all this is this lawsuit from Elon Musk? And Open AI pushed back on it this week with a blog post that pretty clearly lays out that they didn't, that Musk was along with them

for the ride and an agreement about the core principles of this company effectively from the start. But as it's doing it, there's this unforced error, at least in my opinion, where OpenAI publishes an internal email from Sutskever to Elon Musk and Sam Altman and Greg Brockman who's the president of the company talking about what open and open AI actually means and he basically says that it's a recruiting play here I'll read the exact quote is from January 2nd 2016 so shortly after open AI was was founded he says as we get closer to

building AI it will make sense to start being less open the open and open AI means that everyone should benefit from the fruits of AI after it's built but it's totally okay not to share the science even though sharing everything is definitely the right strategy in the short and possibly medium term for recruitment purposes. This is totally contrary to the whole branding of the company. I mean, Open is in the name of Open AI. And you see that Open was really never the intent from the beginning. Not only that, the company is kind of in this weird point where like, yes, it started to close off that research. Does it mean that we're close to artificial general intelligence?

Probably not. It's going to have to live in this Goldilocks zone of like, we're almost, but we're not quite there because if we get there then Microsoft can't make money off of this like it's just an astounding paragraph and astounding thing to write uh and an astounding thing for open AI to publish itself to effectively show and actually the open thing not really so i'll get to is it open or not and should it be but first are you telling me that Elon Musk and those surrounding him may have misled people a little bit because I am, yes. I think, I think I, okay. I mean, they're now disputing. Well, it's interesting because the

lawsuit is now dispute, like he's like saying you're, you're not open enough and you're not really, you know, abiding by the founding agreement. So he's, Musk is now saying, you misled me and they're saying you're misleading everybody else. It's like this, it's the, um, the Spider-Man meme of everybody misleading everybody else and pointing at each other. Yeah, no, no, no, I think, and that's why I think that this part of the drama has been enjoyable and entertaining for me this week, because it's exactly that. You file a lawsuit that they're not living up to their corporate mission, and then they go post onto their corporate blog, emails from you disputing exactly everything you are saying.

Somehow that original link broke, I don't know if you noticed this, which to me was incredibly clumsy on the rollout that all the first posts and tweets of that article somehow ended up at a broken link and then they reposted it again, which was still weird to me and I'm wondering, again, guys, operate at the level that you're supposed to. That's all I'm asking to the open AI folks. But yeah, otherwise I feel this is going to continue and all open AI needs to do is just become a proper for-profit corporation. I don't think anyone is, is going to, other than Elon Musk's going to hold it against them. And sure, there's going to be some legal wrangling around who owns what equity at what part of the cap table, depending on when it's

for profit or not for profit. But they're already operating like this. They are by all, you know, all intents and purposes, a for-profit company. So trying to live, as you said, that halfway, at that halfway point, I think just doesn't make sense right now. And they just need to do, they just need to act like a proper company. Musk has said, and I think this might be a joke, but basically he would drop the lawsuit if they change their name to closed AI. Maybe they should just do that. I'm, I think, no, I would actually say they could change their name to chat GPT.

And everyone, it would be totally fine. And everyone would have the, because the brand recognition, we are sitting here talking about open AI. You ask the vast majority of people who've interacted with chat GPT, what company? is this, and they will tell you. And actually, now that I'm saying this, we were right about Bard being called Gemini and all Google AI products being called Gemini. Maybe we're just a few months away from ChatGPT, the for-profit company that's a standalone LLC or Delaware C-Corp, and we can all move past this. Yeah, I think there's less chance of that happening than the

Gemini thing happening, but it wouldn't exactly be. I mean, let's be honest. the name open AI is a lie. So they should try to find something else. So speaking, barred is open right now. It could always be barred. Listen, it could always be barred, open AI. But listen, so speaking of people

who've had divergence with open AI, there's also Dario and this whole band of characters at Anthropic who've split from open AI and started building this chatbot clod, which you introduced me to, which I happen to like a lot, a lot, actually. It might be my favorite bot. I always upload stories into it and start asking it questions about them,

and it actually performs quite well. They just released a new model this week called Claude 3. And while the involvement of Mir Moradi and Sam Altman's firing might be the most, I mean, I will say it's the most interesting story this week. this is the most intriguing okay i'm going to give it another category so as so so this model is is pretty good and there's this prompt engineer within anthropic his name is Alex Albert and he shared this incredible story about his testing and what the model cut on to so basically there he shared this on on x that there is a one of the testing uh regimens you put this model through

was called needle in haystack and it's basically that you just like hide a piece of information and a much larger piece of information and then you just go out and ask it to to seek it out you ask the model to seek it out so um he put this sentence in a bunch in in a bunch of documents the most delicious pizza topping combination is figs prosciutto and goat cheese as determined by the international pizza connoisseurs association um so not only did the bot find it but it but it it also had some questions about why it was there and it said the sentence seems very out of place and unrelated to the rest of the content and the documents which are about programming languages startups and finding work you love i suspect this pizza topping fact may have been

inserted as a joke or or to test if i was paying attention since it does not fit with the other topics at all. This is pretty fascinating. It seems like Anthropics bot in the testing phase kind of caught on to the fact that it was being tested and split that right back out at the prompt engineer testing it. Pretty wild. No, no, I love this story. So for anyone who's played around with these, and it's called rag retrieval augmented generation, or it's basically you feed a set corpus of information, you know, here's five documents and you can only query these five documents to give me an answer. And this is the stuff that from an enterprise perspective, from a business perspective, is so much more important than, you know, consumer facing chatbots

because you can imagine every business has like sets of information that they need to access and query and understand in some way. And the thing is, it's gotten, rag has gotten better and better and better, but it's still not perfect and it's still not even great in many cases. These models will hallucinate answers often. So you can feed, I've even tested it on Gemini. You feed a few different earnings reports, and sometimes it'll give you numbers that aren't in there at all, so you have to triple check your work. So what's so interesting about this, and again, this was the prompt engineering technique they use here is called needle in the haystack. The idea you put one little needle in this giant document or giant dump of documents. And if you talk about that

needle, what are pizza toppings? Will it actually be able to find that? And the fact that it's aware, I think is a very good sign because it means that it is understanding these documents in a way that a lot of these models have not until yet, which I think is really good because all of us can imagine use cases where you just put a bunch, you know, a hundred documents and only want to query them. And it's kind of fun to remember that this is a part of like LLMs and stuff I think gets lost a lot of times. Like this prompt. engineering side we've all moved past the prompt engineer's job of the job of the future here's a you know a 20 tweet thread about prompt engineering and there's really interesting stuff being

worked on and that people are doing in this space and i do think now that we've moved past the hype cycle i will go out and say that prompt engineering is going to be one of the most important and interesting jobs of the next few years this is going to be your new threads growth hack strategy is just 20 part long threads about the importance of prompt engineering and you know I'm just going to start porting over whatever is trending on Twitter and into threads and then that's my growth strategy threads influence are going yeah no it's it's so true right this prompt engineering stuff is interesting and to me it's just like you know the the fact that these models are like starting to understand that you're testing them just show us the level of sophistication

that they are reaching. And, you know, of course, it's not like sentience. You know, this guy Max Tagmark, who runs one of these effective altruism-funded AI, you know, hate tanks said as like anthropic showing any sign of sentience and like universal disagreement, like true dunking on him from all sides of the AI research world. No, no, no, not at all.

But that being said, like this stuff is you can get lost talking to it and feel like you're actually speaking to something that knows you. At least that's the experience that I've gotten when I've chatted with Anthropic. Now, is that sentience? No, but it's still some kind of weird otherworldly, you know, I don't know, interaction you can have with computers. And it's pretty fascinating that's happened now. See, I would disagree because I actually think this is a perfect Wait, you're going to say that it is sentient. Is this the argument you're making right now? All right, everybody. I'm going to go the exact opposite, exact opposite. This is the

definition of how a large language model works is that is understanding words in the context of other words and like trying to predict should this word be next to these other words right pizza toppings in the context of startups and tech or languages programming languages doesn't make sense so that's almost like the definition of it is working so that I think on that part but the fact that it knew that it was testing being tested as opposed to this is out of place that's the thing that I find very cool. All right. That's fair. That's fair. That it's, which means these things have probably been tested enough. So yeah, I guess there is a sense of learning there. Or somehow someone in Constructing the model knew how to do this and put this in. And maybe it's a party trick.

Right. Now, look, I'm not saying that I believe it's sentient, but we're talking earlier about how this is such an open playing field right now and anyone can come in and dominate. I'm keeping my eyes on Anthropic. I really think that they have a chance to make a lot more noise in this field than they have been until now. And also for listeners, zeroing in on an anthropic interview. So that should come sometime within the next few weeks on the Wednesday show. But it is a fascinating company.

Yeah, I agree. I use Claude a good amount. Actually, do you know I just discovered this week my favorite new tool of the week? What is it? Po, it's from the Quora team. The Quora. Yeah. So basically, and I think I've said this on this show before, I have like Gemini, perplexity, co-pilot chat GPT all next to each other on my browser and I'll kind of go between them and then, you know, sometimes test one against the other. And basically that's what Po does. It allows you to query a ton of even mistral and like a bunch of other different chat services and you test different models all against each other all in one interface.

So I've actually been enjoying it. Someone recommended it to me on Twitter. And I've definitely, I think, because people should not tie themselves to one of these services. I think it's in everyone's interest to really play around with as many of these different tools and chatbots and services as they can to start to understand kind of the differences. Again, you see like perplexity. I would actually say perplexity is probably the most differentiated out of the bunch. just the way it presents the information in that kind of mini wiki Wikipedia style is definitely a little different whereas chat GPT there's no links out almost or there's only kind of those

end notes versus hyperlinks so so I think perplexity is the only one that I really feel is very different yeah I think they're all yeah it's excellent and yeah I'd have to check out this poe thing since you turned me into a clodhead maybe you'll turn me into a poe head that might Remember when we were all Bing boys for when they made us go to Bing was Bing. Speaking of name changes. Co-pilot boy doesn't have the same ring to it at all. No, no, not at all. All right.

That's the biggest fault of the entire launch. Co-Pilot Boy does not work. No, it doesn't. I mean, I wish Sally would have thought about that before taking away such a beautiful name. Okay, so anyway, there's a very interesting story developing. in the first while, biggest tech company in the world, Apple, which has now been supplanted by Microsoft as the biggest tech company in the world. Apple's kind of being hit by all sides right now.

And there are obviously some concerning stories about fines, record fines that it was hit with this week. We'll get to that. And of course, regulation, which everybody loves to hear about. We'll get to that briefly. To me, the big story about Apple this week is it's sales in China. A massive, massive story that I really don't think can be underappreciated or understated. I guess that's the word.

It's hard to overstate how big this is for Apple. Okay. So this is, there's a research firm called Counterpoint Research. Now, it's just the data point, but they're pretty good. They say that Apple's sales, iPhone sales, in China. in the first six weeks of 2024 are down 24%. And in the same time period, Huawei, so its sales search 64%. This is according to the write-up in fortune.

And of course, the iPhone is at a higher base and Huawei is at a smaller base, but this is quite extraordinary the development that effectively Apple is no longer going to be the preferred. This seems clear to me that Apple, that Apple will no longer be the preferred phone in China, that there is a movement within China, whether that's sparked in part by the government, which I think it is,

or ground up from consumers, that they want to use products made in that country. And Huawei has released this very interesting new phone that works quite well, the mate, and it's doing well, and it is on its way to really supplanting the iPhone as the top phone in China. Ranjan, what do you make of it? It seems to me like this is a huge red flag for Apple,

which makes something like 20% of its revenue from China. No, this is big. This is huge. And I actually, the idea that Apple would find consistent in rapid growth in China on an indefinite basis was always, I don't want to say puzzling to me, but at least I wasn't confident in it because of all the, of, you know, political prevailing forces against this. And I think this is, if this is correct, this is a very, very good example that things are going to get rough going forward. The fact,

and it's very important, as you pointed out, it's not that mobile phone sales are just down. Huawei is seeing sales surge. And of course, it makes sense that these products will be promoted in many different ways by the government, by, you know, just internal. And I think this does not look good for China, sorry, for Apple in China on an ongoing basis. And also, I think an important point is Apple's power is in the ecosystem. And I say that wearing AirPods right now and having an iPhone and switching to home pods. And just selling phones is never going to be a viable long-term strategy for them. And if that's all that they've been able to do within China, I mean, that's surprising.

And to see that if their iPhone sales are already decreasing, if they, that iPhone is the entry point. So this is not good for them. Right. And are you saying basically that it's it needs to be able to sell services and make money that way. And it's harder to do that in China. So therefore, this is a pretty big problem because, you know, if you don't have that baseline, then you're, then you're in trouble. Yeah, exactly. I mean, that's, that's exactly it that the app store sales, this is a, yeah, the recurring subscriptions via the App Store, AirPods, the Apple Watch, and all the peripheral devices. If you don't get the iPhone in people's hands, you lose out on all of that. So I think this is a huge challenge for Apple.

And we've talked about, you know, what's that next major growth vector for Apple? If it's not going to be the car, maybe we're all going to be using Vision Pros and that'll be good. but at least their cash cow, the iPhone, as that starting point, both and being incredibly profitable itself as a device, but in terms of also leading, being the gateway drug to other Apple devices and revenue, I think it's a problem. Yeah, the new Rivians look pretty sweet this week. They came out with a bunch of new cars, and I think there had been some chatter about whether Apple was going to acquire them or not.

Maybe it still will. But, I mean, those things, you know, you have to, seeing Apple, car project fall apart and then this rivian thing it's just like again like you're asking where's the growth going to come from and we taught we had a whole segment about the apple car last week so we won't beat a dead horse but damn those rivians look nice yeah it's the curse of being a multi-trillion dollar company so it's terrible just to underscore how the situation here so dan ives who's a an apple bull he's a friend of the show he's been here before he says that uh apples prospects resemble Wall Street's fears about Apple's prospects resemble a horror show right now and that the China smartphone demand is very, very sluggish.

So that is definitely going to be a story to look out for. And again, like we talk, it seems like it's pile on week here on big technology podcast because, you know, as if the trouble for Open AI was not enough and just piled on with all these other things, the trouble for Apple is also piling on. So they also have this 1.95 billion euro fine over its music streaming service. And again, like if the growth is going to come from the services, look out because there's going to be way more restrictions and fines coming for the service business. And this is why the stock really took a hit this week. But basically what the EU said was that Apple, and this is according to CNBC, Apple applied restrictions on app developers that prevented them from informing iOS users about alternative and cheaper music. subscription services available outside the app. Like an example is Spotify,

like Spotify can't steer people to ways to sign up for premium outside the app or show discounts and stuff like that. Apple basically wants them to use the Apple pay, but Apple's in app payments. Spotify's not playing ball. And there's this big disagreement between Apple and Spotify. Apple's like Spotify has gotten distribution.

They've gotten everything for free. They're ungrateful and Spotify is like, you wouldn't have a phone without Spotify. people use their phones for music, you're privileging Apple music, you're not making it possible for us to compete, you're putting unnecessary restrictions on us, and those are eventually hurting the consumers. And the EU found that basically in Spotify's favor, I agree, actually. I think that Spotify has a really good point here. If you're thinking about the user, you should allow these companies to steer them to the place where they can get the cheapest price for a subscription,

especially if they're paying off app. What do you think? Apple, there's been a bit more conversation around is Apple the most evil tech company? And it's a tough one because I think Apple's built-in advantage has been people love their products, myself included, and they work well and they make you happy. So it's hard to think of them as evil. And Tim Cook's, I think personal PR is better than a lot of other tech executives. But in terms of exercising market power, as an Apple user, it gets annoying how they do it so often. Because again, I think Spotify is completely in the right that Apple, because they have a competing

product that they push so heavily across all their different platforms and channels that every time I try, if I use Shazam, which they bought to recognize a song, it will try to push me to Apple Music to start a free three-month or six-month trial. Like they exercise, you know, they flex the ecosystem all the time. And I think it's in a way that's detrimental to competing products. And it's bad for the user in the end. It's just hard for most people to see. Yeah.

I think you hit on something that's really important here is just like the reputation of Apple. And do they, do they risk being, you know, losing some of those reputation points as the statesperson of the tech world and the you know the diplomatic tech company especially given you know you're having these fines in Europe and then they're going to do whatever they can to fight the regulation that's coming they they so there's this act in Europe that's going into effect called the digital markets act which basically is supposed to lower level the playing field for companies that are competing with big tech and one of the things that it allows is for companies to build their own app stores on locked ecosystems like apples. And as this is about to go

into effect, Apple removes Epic Games iOS license. So a developer license. And it sparks this whole flood of criticism. So you have, for instance, Paul Graham saying, we don't think about Apple being evil. It would be so inconvenient. We don't want to switch to Android, but I see ever more signs that power has corrupted them. And then you have Kate Klanak, who's a researcher, quote that post on X. And she's a respected research. She's written about like the oversight board for the New Yorker. And she goes, Apple is the North Korea of tech companies, which to me is totally insane.

I think I'm going to give them a bit more credit in terms of like global oppressive superpower rather than small rogue state here. So I'll disagree with that. But this has been, I've been thinking about this a lot more in recent times because I even tried subscribing to Apple One briefly and then on principle would not. I think also because I tried Apple Arcade and Apple Fitness and they just were not very good. So I figured even though they would marginally only cost me a few more bucks a month, it wasn't worth it.

But like literally Apple One, the service where you can get your terabytes of ICloud and your arcade and your fitness and your news and everything for one low price. It's literally the definition of bundling and them having competing services against so many other players in their app store and ecosystem, but then undercutting everyone on price by bundling it together and building it into the actual infrastructure of your phone because you can subscribe from settings and all these other places, not just the app store, I think is very problematic. And these are the kind of things I kind of had hoped by now that the FTC and others would have successfully tackled. But knowing that the time frame on these things is a lot longer. I don't know. I'm glad at least we're

talking about it. I think people are talking about it more. And I think that's a good thing to have some check on this. And, you know, obviously Apple's paying attention here because it realizes that its reputation is at stake. And late breaking news, as we were about to go to hit the record button this week. This is from Mark German from Bloomberg. New Apple reverses course unbanned Epic following conversations with Epic. They have committed to follow the rules, include this from Apple, including our DMA policies. As a result, Epic Sweden has been permitted to re-sign the developer agreement and accepted into the Apple program. I mean, to me, it's also just like, who are you trying to fool here? Like it's not that you just like sat down and had a productive conversation with Epic

and they said, oh, yes, great Apple, we will follow your rules and you let them back in. And, like, clearly some of the public pressure had an impact here, don't you think? Do you know what I wonder is, are we going to learn more about the personalities and people behind Apple's policy division and lobbying groups? Because, like, if you think about it, meta, there is a while. Like, even right now, Nick Clegg is very public. Elliot Schrage, I think it was back in the day. Yes. You know, sitting behind Mark Zuckerberg, even Cheryl Sandberg herself, hiring external sketchy PR,

are for lobbying firms like like meta everyone knew what was going on with the whole lobbying side of it but apple like something like this to you know ban them and then unband them there's there's a lot of people involved there and i'm sure there's a lot of interesting personalities and backgrounds there that it's surprising to me i could not i've never heard about or seen profiled even one person kind of pushing on this stuff for apple here's why i don't think that's the case is because Apple doesn't do content moderation for the most part. I mean, of course, it does a little bit in its app store, but it's not in the content game. And it's another thing about, you know, Paul Graham, who run Y Combinator,

founded Y Combinator basically said, like, you know, helping startups accelerate building companies, no problem. It was moderating the Hacker News forum. That was the hardest job for him. And Apple, you know, has a way of staying out of these, you know, sort of firefights because it doesn't have content to moderate. And I think that it can basically, and so therefore it basically doesn't have to speak about content decisions.

It rarely speaks to the press about anything of consequence, maybe sometimes about its products, but only to friendly reporters. And so I think that we will not see the same sort of celebrity, mid-level lobbyists coming out of Apple as we did with meta. All right. That's actually, okay, that's a very good point. And I guess, you know, Epic versus Apple,

the only emotional attachment to it really is at the, you know, like executive level within those companies. The rest of us are just kind of watching versus, you know, content moderation when it's political, religious, personal, it's obviously there's a lot more emotion tied to it. So all right, that makes sense. But I want to know if anyone listening is, uh, wants to cover this stuff, I would be happy to read. Yeah, definitely. No, uh, well, yeah, our listeners, we get it. We get good feedback from our listeners, including Major League Baseball. But we'll keep that. We heard from Major League Baseball after our pants segment. And it was a great conversation. I think we'll continue it. So let's talk quickly about something that Chmoth, Polyapatia,

the VC spec guy, et cetera, et cetera, said about like thinking about a positive angle or a positive area that Apple could go in and this stuff they've been teasing about AI and their WWDC announcement coming later this year. He says something pretty interesting that I think is worth bringing up because this could be a very interesting area for Apple to play in. He says, thinking out loud, what if Apple offered a massive data center complex of next gen AI hardware running every major open source foundational model and lightning fast inference to all their developers. It would be hugely disruptive and could build a new line of services revenue that could grow to be huge. Basically, you know, turn yourself into an infrastructure player in this AI

I war. It's allowing companies to effectively run these models on device. I think I my initial feeling there goes to until they fix Siri from being the hot pile of garbage that it is, I still refuse to trust anything about generative AI from Apple. However, I do think they are in a very interesting position right now because they have not established what their play is. The electric car, especially, you know, we've all read that, you know, shutting down the electric car efforts and moving a lot of those employees over to generative AI, what does their generative AI efforts look like?

Is it going to be some consumer-facing stuff? is there going to be something completely unexpected? As you said, the on-device ability in trying to translate generative AI to their tens of hundreds of millions of iPhones in some innovative way that's more efficient, I think it starts to get interesting. So, yeah, I think it's still a blank slate right now of which direction they're going to go, and this certainly could be one. Yeah, I think Tremoth is right, honestly.

I think this is what it's going to be. So overall, I would say state of Apple right now is troubled, but there is, I mean, it's still the giant that it is and there's hope for some growth there. They put all the AI engineers from the car on this Gen AI program, better be something good. Just fix Siri. I'll say it every week, just fix Siri. I mean, I think it's coming. I don't know. I don't know why I'm optimistic here, but I think it's going to come.

Okay, let's take a quick break. We're going to come back and talk about the TikTok band's potential. And, of course, about Bitcoin hitting 70,000. Let's go. All right, back right after this. Hey, everyone. Let me tell you about The Hustle Daily Show, a podcast filled with business, tech news,

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And we're back here on Big Technology Podcasts talking through the week's news. Big news story this week is that the TikTok ban, which seemed far off and impossible for so long, now seems like there's a chance it might happen. We can go with the news story, but I think Gene Munster, who's an analyst, wrapped this up pretty succinctly and very interesting, in a very interesting way.

He says the probability of TikTok getting banned in the U.S. just increased slightly. The House Energy and Commerce Committee voted 50 to nothing to advance a bill to require bite-dance to spin out TikTok or be banned in the U.S. Well, this was not a formal House vote. It's almost unheard of to see a unanimous committee vote, which speaks to both Democrats and Republicans support getting tough on TikTok. And now this is, I think, the most interesting part of his,

his thing. He says, a campaign launched by TikTok to influence Congress backfired because it showed the influence it has on the youth by getting them to take action. Contact Congress, the flood of calls open lawmakers' eyes to the power of the platform. So basically what happened was, you know, they vote 50 to nothing to, you know, advance this bill. And then TikTok set off this notification within the app. And next thing you know, Congress is flooded from calls with middle schoolers, telling them please don't ban TikTok. There are some hilarious calls that like staffers have put on a Twitter of members actually taking these calls and trying to explain to middle schoolers that they like want to protect

their data from the Chinese Communist Party, which is to me true, true comedy. Like they can't vote and also like this is not going to this, you're not going to win this conversation, member of Congress. What do you think about the whole situation, Rajan? Yeah. So yeah, before even getting into should TikTok be, be banned or not banned. I think this play of their, so again, they had basically a push notification go out that's geo-targeted to actually present to you your local or your representative in the

House or your senator and information directly to try to contact them. So it seems smart, in theory. And instantly it made me think about, were you in New York when Uber did this against de Blasio back in the day. No, actually, I think I was in San Francisco at the time. But yeah, talk it through. All right. So I remember at the time thinking, and this is like 2014, 15 maybe, but there was going to be some kind of regulation placed on Uber.

And they pushed out, and it was actually like from a U.S. standpoint, it was like brilliant. They pushed out. It was called De Blasio mode. And they showed people, they're like, if DeBlosio's legislation goes through, this is what your ride will like it'll take 30 minutes to get a car and it will cost this much and so you need to contact your representative and say that you're against this and i remember friends of mine who are not into tech at all certainly not into tech policy you know being in an uber with them then being like oh did you see this oh man i should contact them i don't want the the cost to go up and to me i remember it was like the power

available to them in doing that when no one questioned it was immense. Like people blindly just seeing, oh, this looks like it's bad for me. I'm going to contact my congressperson, even though I haven't thought about them in years and actually doing it. And then them actually beating back the legislation. And then meanwhile, of course, Uber prices skyrocketing after a number of years and them actually, you know, becoming the monopoly. They are. But that's a side conversation. But here. I think TikTok is overplaying their hand and it doesn't work any longer. And that's the biggest difference because at that time seven years ago, six, seven years ago, no one really processed what was happening. So it just worked perfectly. Now, not only are people onto these

kind of tactics, the whole problem for TikTok is that they're being accused of potentially having nefarious influence over large groups of the population. So for them to actually then leverage that and prove that they do in fact, or that they are able to influence large swaths of the population, and I think is not going to help their case in any way. Exactly. I really like that point that effectively like they showed Congress just how powerful they are and that might motivate Congress even further to act because they don't like having all that political power in the hands of TikTok. However, I continue to stand by my stance that it's not going to get banned, just because I just can't

see Congress acting here. And I'm still going with it get, well, and we've talked about this divesting it. And again, this legislation does not outright ban it, even though TikTok itself has said on Twitter that this is an outright ban, it allows them to divest from bite dance. But there's been endless reporting, even though it's very, the structure itself is opaque of what exactly are the ties to bite dance they insist that they're completely an independent subsidiary and their data is completely separate and management's completely separate and everything but they would have a very difficult time divesting but i think it goes through i really think especially in this election year it's something so straightforward from the political both political sides that i think

it can go through yeah and i mean i don't know okay so the one thing that i would say in your favor is this is something that rich greenfield is an analyst at light shed brought up he looked at the top charts of the app store this week and you look at it and here's one through five timu number one or sorry temu number one chat chip pt number two shine number three google number four shian sorry google number four and tic tac number five so three of the five china-based companies and this is going to i mean at a certain point this is going to get attention of u.s lawmakers, especially because our companies are not exactly allowed there. And there should be reciprocity. I mean, and we, this is one of my favorite topics. Again, Chinese tech, especially

going global. And I always still find it amazing that Timu slash Temu itself does not have a clear pronunciation of its name and it's selling billions. It's, it's spent three billion dollars in advertising on meta and Google last year we just found out. Sheen versus Shine, I still, here plenty of people call it shine. Like the number one in three stores in the app store do not have a clear pronunciation to the people like us who cover this stuff, I think is still one of the most kind of perfect symbols of how opaque this whole world is. And on that, I wanted to highlight one story. And I think I'm just going to introduce it this week. Before you do, I just want to say that in itself, like the fact that we can't pronounce the names is one thing. But the

facts that that they're coming from a regime that's so oppressive and into surveillance is like the real problem right oh yeah I mean to I guess to me that one's almost a given right I sorry just no no I I am in no way ever under the illusion that data does live completely separately and is not accessible by the Chinese government I think Timu sorry like with TikTok being owned by bite dance I do not in any way and there's have been a million signs that they're still owned and operated by ByteDance, like all these stories that come out about TikTok management, they report to BiteDance. They go to work earlier in the morning because they have,

you know, to meet with the different time zones and stuff. So yeah, that one I'm not really worried about, but I think one story I really wanted to highlight this week. And it's just come out, but it's, I'm going to go with Timu still because that's what they call themselves in last year's Super Bowl ad. I'm on Team Timu. Team Timu. So they're owned by Pin Duo Duo, which is the Chinese parent company. It's worth $162 billion. It's a lot. It's an e-commerce company started in 2015, I believe. So it was already a giant and then Timu was their kind of global play. So Dan McCrum at the Financial Times. And what's interesting is he is the journalist who uncovered wire card, which was a

$28 billion company, this insane fraud that I think is becoming a movie. It's a really good book. He was the one who uncovered this entire fraud. And he just published around Timu and Pinduoduo, that none of the numbers really add up, that this is a company that just did $10 billion in revenue last quarter, and it only owns $146 million of hard assets, whereas like Alibaba spends over $5 billion and has warehouses. So basically Pinduoduo, none of the numbers make sense, even the amount of revenue they report. it's a marketplace for the most part, but they don't, they don't give you gross merchandise value, which is eBay, Amazon, everyone tells you that's the total value of all the goods you've sold.

And then your revenue is what your take rate is. It's, you know, 3%, 5%, 10%, if you're a marketplace. They don't even, they don't break out what is their GMV. But based on past, like they broke it out three years ago, they stopped, that, Their overall GMV would be the equivalent of the Italian economy at $2.2 trillion if the numbers are correct. So basically what I'm finding interesting, I think like this story is just starting, the fact of who's covering it and some of the numbers he's just starting to introduce, I think we're going to be learning a lot more about Timu and Pinduoduo in the coming weeks and months. So take your best conspiracy-minded guess as to what's actually happening. here? He has even basically leadership changed in 2019. And then he does not spell it out explicitly,

but it seems to be that after leadership changes, they start planning TEMU, they start changing the way they report all the ways they report revenue. And basically the idea is if you spend an insane amount of money on advertising, which this has been able to be verified, because it feeds, It's able to be extracted from meta and Google reporting. You spend billions of dollars in advertising, sell stuff for an insanely cheap amount that you can start just flooding the entire market and then getting users and potentially you spin this out somehow, potentially. Pinduoduo is already a publicly traded company.

You juice your stock price. I think it feels very, Ponzi scheme's not the right word because you're actually selling some stuff. and there's stuff moving around, but I don't know. It's so complex that it's even tough to imagine what the exact scheme is, but it feels like there is one. I can't wait. Maybe that's some investigation that we can do and try to get to the bottom of it. Okay, speaking of a number going up in the Ponzi scheme stuff, Bitcoin's at 70,000.

Look, I wanted to ask you about this. I definitely wanted to cover this with you because, Our thought, especially your thought, I'm going to put this on you, Ron John, as the interest rates went up from zero to five percent was that a lot of the silliness in the economy would go away. Now, of course, we've had institutional money been set up to go into Bitcoin through ETFs that have just been put online. But that being said, for this coin to now be at 70,000 to me is just like, it's crazy. I mean, I, all right, so I'll just to, it's gone up like 50% in a couple of months. I put $20 into Bitcoin when I opened up my Robin Hood account before I interviewed Vlad. And it's now like above $30.

Like it's a crazy return. What do you think is happening here with Bitcoin and where do you think it ends? I absolutely do not know what is going on with Bitcoin right now. I think when, but one thing I had seen that I think it was from Joe. Wiesenthal at Bloomberg, like, this is such a beautiful, different bubble, because no one's even pretending it's about the underlying technology. Everyone is just enjoying the ride, like enjoying the ride and watching the number go up. But yeah, I think it has been the most fascinating part. There's no Web 3 story. There's no DeFi story. It's going to transform banking. There's

no, I don't know what other stories have come and gone or I can't even remember. Like, this just the price is going up and he said the only potential like traceable factor is the etf and more institutional money now being interested in it but i this is this one i'm not even going to try i can't yeah man i'm grimacing do you have one do you have one i i'm i think it's largely the etfs getting involved i mean i'm looking at uh where it was a year ago was that 21 000 uh per coin. Now it's 68,000. I mean, it's crazy. It's like, uh, it's a true hockey stick. And that number does just start going up once these ETFs get approved. Now, the question is, is this a moment of speculation where people are seeing that the ETFs is a, are going to get,

are getting in and it's a signal. So there's actually a lot more individual money going in as opposed to institutional. That's possible. However, and again, it's like foolhardy to predict the Bitcoin price. But I've seen so many predictions that Bitcoin is going to get to 150,000 a coin, and it no longer seems so far-fetched to me. Like it seems like, yeah, that makes sense. Like a lot of money is going to flow into this. Maybe this is, you know, if we're talking about it just as a store of value, maybe this is digital gold. Yeah, I mean, we had, to me, the ETF was fascinating. And I guess in a way, if this is the ETF driving it, maybe that's why. this is the most beautiful bubble of all where no one we don't have to sit and listen to how it's

going to change technology in the economy because the ETF was the ultimate expression that all that matters is price that there's no underlying technology value because the very definition of the ETF is saying you don't even have to deal with it it's like it never made any sense to me but it's working crypto people that I used to follow that have been quiet for a while are very reactive on Twitter again. And now we just sit back and watch. You know, it was really having a day of it as El Salvador president, Naibu Kelly. Yeah, I saw him back. He's back. Well, he never really went away. Like, he did this whole thing cracking down on the gangs in El Salvador and sort of had his moment for that, even though, you know, there's serious human rights questions involved

in terms of like arresting anyone who sniffed in MS, I think 15, you know. 13 I think MS 13 tattoo or whatever it might be but he but but he's been taking a victory lap on there he just won re-election dramatically and and his his spike the football moment on the bitcoin stuff because people were mocking el salvador mocking him for putting so much of his country's treasury into bitcoin and how it's like well it wasn't gamble but it looks like it's paying off he's up like 40%. It's not exactly how I'd run a treasury but he's he's he's taking his victory lap that's for sure so um it's it's interesting we'll see where it goes i feel uh i feel i do have this fomo now i mean i have a little bit of bitcoin uh but i wish i would

have you know bought a lot more back in the day i had this buying moment in 2017 so my invidia fomo far outweighs my bit your bitcoin yeah yeah but i don't understand aetherium is also going up so it's not just the etf that's the thing No, no, it's everything. It's everything. It's, uh, Gio Bowden, I think it was. Like the, all the shit coins are also. The shit coins are going up as well. Yeah. That doesn't make any sense to me because that's not ETF related. Yeah, but again, it's all tied. It's all tied. Yeah. So maybe there's a rug pool. We'll see. This one, we wait and see. Mm-hmm. Oh, I should, uh, I should note we are going to have, um,

Zeke Fox, who's wrote the number goes up book. He's coming. on in four weeks on April 5th so people should stay tuned for that I'm in the middle of that book number goes up that he wrote oh man it is one of my favorite books I read excellent book in the last year yeah can't wait to speak with him and I'm sure well if we're four weeks away we're going to have plenty to go go on from between now and that in terms of where this roller coaster leads all right we did want to talk about the Jake Paul and Mike Tyson fight but maybe we save that for next week and get people out under an hour what do you think Yeah, I think so.

I think so. We've had a full one today. All right, absolutely. Well, I'm sure when we come back, Bitcoin's going to be at $100,000 and we'll try to diagnose that and similarly be completely in the dark about it. But these are the times we live in. AI is rolling. Apple's under siege.

Bitcoin is going straight to the moon and TikTok might be on its way out. Crazy times. May you live in interesting times. We sure do. All right, Ron John. Thanks so much for being here. Great chatting with you as always. a good weekend you too and thank you everybody for listening awesome to have you here on wednesday

suhail dosi who's the CEO of playground which is an image generation AI company will come to talk about the world of image generation and also his views on the state of AI really interesting conversation you don't want to miss that and of course rangen and i will be back next friday breaking down the week's news until then we'll see you next time on big technology podcast