Big Technology Podcast - Sam Altman’s $7 Trillion Fundraise, Google Gemini Catches OpenAI, The Return To Office Ploy

Episode Date: February 9, 2024

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) Sam Altman seeking to raise trillions for a new chip company 2) S&P 5,000 3) Google’s Gemini reaching parity with GPT-4 4) The commoditization of AI models 5) The rise of AI agents 6) Google's looming identity criss 7) What happens if Meta is more valuable than Google 8) FCC bans AI generated robocalls 9) The fallout of failed acquisitions like Amazon - iRobot and Adobe - Figma. 10) Snap doing layoffs and its stock sinks 11) Chris Dixon’s book taking a sketchy route to the best seller list 12) Adam Neumann wants WeWork back 13) Is Return to office a ploy to downsize and hold back raises? 14) Reflections on the Vision Pro --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [e-mail]

Sam Altman wants to raise trillions for a new chip company. Google's Gemini is on par with GPT4, and that has a heap of implications for the AI world. Snap is doing layoffs, and its stock is sinking. Chris Dixon's book took a sketchy route to the bestseller list. Adam Newman wants We Work Back and his return to office employ to downsize and holdback raises. We're going to cover that and plenty more right after this. Welcome to Big Technology Podcast, Friday edition, where we break down the news in our traditional cool-headed and nuanced format. We have a big week of news to cover with you. We're

going to talk a little bit about my experience with the Vision Pro at the end. Before we get to that, we have big AI news, including Sam Altman looking to raise trillions of dollars for his potential chip business and what that all means. So that's all coming up. As always, we're joined by Ron John Roy. I want to welcome Ron John to the show. Billions are no longer cool. I'm only talking trillions this week, Alex. Well, we're going to live that dream very shortly. I also just want to say a quick welcome to any new listeners that are here with us, whether you came here because you saw the link to the show on Daring Fireball and came in through Gruber's interview or potentially we're here after listening to

Great Quarter Guys with the compound. For those who are here for the first time, let you know how it goes. We do these news breakdowns on Fridays. And then I have a flagship interview on the feed every Wednesday. And let's get to the first big story here, which is that Sam Altman is seeking trillions of dollars. trillions, not billions, to build a chip business. And according to the Wall Street General, the fundraise could be in the realm of five to seven trillion dollars, potentially coming from the UAE.

Because if you decide that you want that type of money, you cannot go to a private market. You have to go to sovereign wealth funds. Ron John, when you saw this headline, what did you think? I was completely enthralled by the word trillions because I don't think I've ever seen that in any kind of headline around a fundraint. But it's certainly ambitious, again, bringing together the UAE government, bringing together potentially the U.S. government, bringing TSM, Taiwan Semiconductor Manufacturing Corporation, everyone into one fund into one. It's still a bit unclear as to exactly what it would be. Would it be a company? Would it be a fund? But I think it's very important because trying to reshape the semiconductor industry around the needs of A.S. in generative AI, it's noble, it's important. I think it's going to matter. Is this the right way to do it?

We'll see. But I think having this discussion is important. Like marrying public and private sectors in a way that actually shapes the industry in the right way, it's not the worst conversation to be having. Why do you think it's noble? Okay, maybe noble is a bit of an overstatement, but I, okay, all right, I take back noble. I'll say ambitious and important. Yeah, and it was interesting because I saw that it was in the trillions of dollars, five to seven trillion and I was like, okay, so that's like a very ambitious valuation.

I mean, like the biggest companies on the public markets today are in the realm of three trillion. But no, that's the amount he wants to fundraise. So I think that like when I saw this, my perspective was what Sam is doing is thinking that we're going to get to a world where generative AI is going to turn into artificial general intelligence. And if you get to that point, then it totally changes the economy. And if you're going to invest in companies where that exists, then you have to change your equation. I just wonder if this is a little premature. Do you think that that's the right diagnosis in terms of what he's telling these potential investors? Yeah, I think he has captured a moment. He's already captured a couple of moments.

So you might as well try to reshape the entire global economy in your vision and in a way that benefits you. So you, I mean, he might as well throw this out there right now. But I agree. I think it's a bit premature. And I think he's become very good at grabbing headlines and just kind of making absurdly bold proclamations. And it feels like this is another one. But again, I think it's an important discussion to be having about what does the semiconductor industry look like. Like when the needs of computing are going to become so great as even not talking AGI,

but just generally generative artificial intelligence embedded in every product we're using, we're going to need to be, we're going to need to think differently about it. Ken, who's watching live with us here on LinkedIn wants to know if a $5 to $7 trillion raises pre-seater series A. Ron John? That is the greatest comment ever, Ken, because, yeah, I think. you know, nowadays, let's still be conservative and call it a good series A. Still pre-sede might be a bit generous here. Exactly.

We don't want to get ahead of our skis on this one. Series B is going to be interesting. So talking about taking advantage of the moment, so Sam Lesson had a, who's an early Facebook employee and definitely like somebody who's like in the conversation in tech, I don't know, people are, I think, I find his opinion is always a little bit provocative and interesting. he waited on this on one of his like screenshot tweets but i think it's worth reading so he said i don't grudge sam's showmanship showmanship in and of itself he's just extending the game that elin has played with the self-driving cars are just around the corner or mars by 2024

making promises and clearly absurd but exciting statement which select for meme propagating cult following loyalists sam is just playing a game of one-upmanship start with the fear-mongering aGI and when that runs out, let's come up with the biggest number we can think of. In an era where value is in the eye of beholder, if you anchor on trillions, maybe you get enough people to believe that hundreds of billions is the deal of a lifetime to make it all work and become too big to fail. But on the flip side, this does make me very nervous. If capitalism becomes a game of absurdities versus discipline,

it's hard to argue that the invisible hand is guiding us anymore instead of a broad game of number go up with PR campaigns for dollars, materialized by the government from thin air with nowhere to go other than The Magnificent Seven. I read that. I thought that was spot on. What did you think? I think that's completely spot on. I have to say also I'm a fan of Sam Lesson's feed. I almost respect the fact that, again, as Alex had said, he takes screenshots, I think, of notes or something else and has them as images in the tweet, and it's always incredibly hard to read. And even the fact that you can now do longer tweets, He still sticks to that format.

So keep doing that, Sam. I like it. And I think that this is, okay, this is really on point. This is really good, this idea of absurdities versus discipline. And we talk and we like to think that we're moving back towards a world of discipline. But maybe this is another example that the absurdities can work, especially with fundraising. And again, I think Sam Altman has shown with the fear mongering of AGI and connected to that. And we've talked about this a lot.

that fear-mongering around artificial general intelligence weirdly is done by all the people who are pushing AI the furthest and stand to benefit the most economically from it. So it's always felt a little bit disingenuous when, you know, trying to make it seem like this insane, unattainable, crazy thing that only we can save you from, so give us money. It feels a little bit like that. So I like that. Yeah, I do really think there's probably truth in him just trying to throw out this wild number. And if you end up with billions of dollars in funding, you're in good shape.

Like, imagine if you just got the value, if you have a $7 trillion investment, that the, what do you think? The value has to be like $70 trillion. I mean, who's going to invest the type of money and not want a 10x that? So, like, if you get a few hundred billion and you're in the realm of Nvidia to begin with, even if it's private market, that's pretty good. Yeah. I mean, 70 trillion market cap.

I want to see the pressure on employees to realize that. I mean, seriously, it's crazy. So by the way, speaking of like coming back to discipline, we just hit 5,000 on the S&P 500, which is far beyond any prediction, right, that we had in the era of rate raises. You would think this is a zero interest phenomenon. And by the way, Magnificent Seven is the one carrying it. I think Nvidia is up. I heard today 600 billion on the year already.

Yeah, but I think what's your read there? I've seen a lot around this where, You know, and as someone who's written about the absurdities of ZERP many times, I think the kind of the energy in the market is still warranted around AI. I think that's what's been pushing it. It's the companies that are the best position to capture value around artificial intelligence, which for better or for worse, are the magnificent seven or big tech companies. But to me, the difference was always, again, when the market is going up in, again, monkey, JPEGs and whatever else, versus here's a potential fundamental reshaping of the economy that I do think will get reshaped, and AI is a transformative once-in-a-generation technology, it's not as weird to see stocks going up. So I think a little, this is a little bit more energetic health than total mania. Right. And this was a very chill week in terms of the way that people handled the news, but it was actually a monumental week in terms of advancements and the type of things that we're going to see.

So first of all, an important part of where AI is going to go, because it can't just all be chatbots, right? It has to be the application of this technology and where it goes beyond the chatbot. And we started to get a look at where the things are going from this information article that talked about how open AI is shifting the battleground to software that operates devices and automates tasks. so instead of just having a conversation what they're trying to do is create agents and this is what the information says open a i is developing a form of agent software to automate complex tasks by effectively taking over a customer's device the customer could then ask chat chip bt the chat jpt agent to transfer data from a document to a spreadsheet for analysis or to automatically fill out expense reports and enter them in accounting software those kind of requests would trigger the

agents to perform the clicks, cursor movements, text typing, and other actions humans take as they work within different apps. What did you think when you heard this news? I think this is exactly where things have needed to go. I mean, again, it's going to be tax season soon or already is if you're responsible, the absurdity of trying to fill out your taxes or use turbotax when all that stuff should be AI like driven anyways. I think embedding AI into all these existing. apps, processes, tasks, that's where this is supposed to be going, and it should go. Whether OpenAI is going to be able to be the one that does it, I still, and I think we've covered this a bunch, I think it's going to be the companies themselves, the tools themselves,

the software themselves, that actually get a handle on being able to use even potentially open source models to do this automation rather than one central company, especially Open AI, being the one that figure this out. figures this out because a lot of this stuff has so much complexity and nuance or even getting an autonomous agent from open AI to work with all of your back-end systems. It's a tough thing. It's not just AI. It's, you know, it's building software. So I think Open AI, I think it's good that they're moving the industry in this direction, but I don't think they're going to be the ones that actually figure it out. So this is my point of skepticism here. For my book, Always Day 1, my first

chapter is all about the rise of robotic process automation and how that could change the work world. And I think that's taken off to a certain extent, but not in the way that some of the companies involved in it like UiPath hoped. And basically what robotic process automation was almost exactly that, that your robot would take over your computer and figure out exactly how to do your work and you would sit back and it would figure it out for you. And you know what? Maybe it was that the actual UI, right, was too difficult to train something to build this. And if you could conversatially instruct about to do something, that would be different. But I'm curious, Ron John, what you think, because I'm sure you've heard about this.

Is there a way that the AI, generative AI, can sort of pick up where this robotic process automation left off and make it easier for people and hence give it a chance to be more mainstream? Oh, 100%. I think RPA walked so generative AI could fly. I think, like, I think, I don't know if I was working on that one. Oh, that's going to be, yeah. It'll be the title of the episode, of course. I think, no, but RPA or robotic process automation was you have to instruct every step and every level of any kind of process.

So the work, the uplift in getting that done, I actually think probably did not create enough value for people to invest enough in it, but the promise of generative AI, and already the realization of it is that it can just with natural language, it can already understand what that process needs to be. It can be trained a lot easier. It can be queried a lot easier by anyone. They don't need to learn an entire new process. They can just simply ask in natural language questions.

So yeah, I think that it's like such a leap in technology that I'm still very, very bullish that all those annoying, repetitive, automated things that we all do on a daily basis in our work, those are exactly the things that are going to get successfully automated. And then I think it's a good thing. I think it certainly opens up lots of conversations around what jobs look like and how the economy changes.

But I think that's where it's going. Yeah, Open AI has to figure this out. Not only are they getting into it, but they have a bunch of ex-Google employees who are also starting companies around generative agents. Like, this is definitely going to be a field that people concentrate in. And I've argued in the past and I really stand by it that Open AI is in the hits business, that it has to keep developing new initiatives like these agents. otherwise it's just going to be basically overtaken by the competition and this

week we really saw that happen where Google released this Gemini model that we've heard so much about and they put it into Bard or which is now called Gemini and this is the big headline that I took from it which is that it's not that it exceeded GPT4 which is open AI's model but it equaled it and this is from Ethan Mollock former guest of the show he says Basically, his takeaway is that GPT4 Spark is not unique to Open AI, but it's something that might often happen with scale, right? And that's crucial.

It's not unique, and it might often happen with scale. Effectively, there's nothing special about what OpenAI built. Of course, it's special, but there's nothing like uniquely special about it. It can be replicated, and it will be replicated, and Google has replicated it. And that means that this stuff gets commoditized. and the prices come down and the amount of money that you can make off of it is limited, and it gets diffused through a bunch of different companies. I thought that was the big part of the Google News this week.

How did you read it? This was a happy moment for me because two things. One, that's exactly what we've been talking about for months now, that the actual technology is going to get commoditized. So how well it integrates into wherever you already are working is the way this is going to go. And for Google, that's a natural advantage that every Google Cloud customer, every Google workspace user is going to much more easily integrate generative AI into what they're already doing because it's where they already are.

So I've always thought that that's where it's going to go. I'm more excited that for once Google showed that they can actually get their shit together. And instead of having BARD, duet AI in Google Workspace, duet AI in Google Cloud, I don't even know what other products they had in the day i space they're actually calling everything gemini it's going to be gemini workspace and we talked about this we said bard should be renamed gemini is so much better it's such a better name i i could feel confident being like oh yeah i gemini that i saw that on gemini saying bard just was such a weird thing to try to say so so i think google sundar is is showing he can make some moves still

And I think this is big news for Google. And another interesting thing that Malik pointed out was basically there's enough differences between the two. And BART is, I mean, sorry, Gemini is better at some things than GPT4. And so his, another takeaway was the AI wave has encrusted. And the next move from OpenAI might be releasing the room of GPT4 or GPT5. So basically, you know, there's another, oh, now he says there's another company with an LLM that can compete with OpenAI's most advanced model. but we're not at the end. And I think that's definitely true

that there's going to be better stuff that we're going to see. Maybe they all become customers of Sam Altman's $70 trillion chip company and they can develop cooler shit. But in the near term, at least, like we're not done yet. But I actually disagree with this

because to me, the complexity of the model or how advanced it is isn't where the battleground for me. It's, again, smaller models that can actually work and integrate into your existing software. I actually think that,

where it's going to go. I think it's on-device computing and which Apple is going to get very interesting around. I think I think getting to GPT-5 almost doesn't matter to me because I think the competition can still, even a lot of people are still building on GPT 3.5 and building really interesting and good experiences. So I think how advanced things are, it's good that there's another model on par, but I actually don't even think that's where it really matters. That sounds, yeah, that sounds plausible. So plausible. Another thing that Sundar talked about, you mean, Sundar Pichai spoke a bunch this week, which is unusual for him.

He's like the quietest big tech CEO as far as speaking publicly. And he told Wired something really interesting about what his vision is for where this thing goes, like whether this is going to replace search. So he said, as search evolved, as mobile came in and user interactions changed, we adapted to it. In some cases, we're leading users, as we are with multimodal AI, but I want to be flexible about the future because otherwise we'll get it wrong. And I think this is an important point. There's been a lot of talk, even here, about how this is going to revolutionize search on the web and how it might replace search on the web.

And I think maybe I'm saying this after having spoken with Arvin from perplexity. And so I'm eager for people to listen to that interview next week. but I really don't and I think Sundar is leaving open the possibility that AI doesn't change search does not change search and I'm leaving open that possibility as well in my mind because you know we've been talking about this forever as a search replacement but it actually could be a completely different action right whereas searches I need to find something on the web and this generative AI is I need to explore my curiosity or talk with a document like it's not naturally one-to-one or a placement for search's functionality. And I think it's actually been overestimated that it is. And then if that's the case, what is Google? So I'm curious what you think about that idea. I'm happy they recognize it. I would disagree because I actually, I have started to replace, I don't want to say all of my search, but the majority of my search now starts on, I have the chat GPT mobile app. I have perplexity and I have Microsoft,

pilot next to each other on the home page of my phone. And I basically start every search on one of those three when I'm on my phone. I think trying to find information, it's really because, and maybe it's a function of Google search having become so bad that it actually starts to just work better. I think in app search, like for shopping, Amazon, that's kind of like a completely different animal, but I still think that's another, you know, a problem for Google that they've already been facing and that's been developing. So I think it does fundamentally change search. I think the generation side of it versus the informational retrieval side of it, that's, again, a whole different area that is going to create completely new user experiences

and ways of just doing things. But I think it's both. I think it both will fundamentally change search and it's going to create completely new user behaviors, which we don't understand yet. Well, I guess like I'll push back and say, let's just table this and pick it up next week after the hour of an interview goes live and we can kind of pick apart some of his ideas. I'm excited for that. Yeah. Because, and it just is something where Google can be left in this like really weird place, even worse than it is now where it's like you can't be like, if they're two distinct things,

you can't be search and generative AI at the same time. You kind of live in both worlds. And if you're trying to have one foot in both worlds, then I don't know if you have an identity. And that will be, I think, the biggest question for Google over the next few years, no matter what happens is what its identity is, because it's getting quite murky right now. Oh, I 100% agree with that. I think Google as a traditional search company is not, traditional search will not be the future. And they recognize it, they know it, but when that is the vast, vast majority of your. business that you have a monopoly on, it's going to force you to change and it's going to be

really hard to change internally. And it's the classic Clayton Christensen innovators dilemma. So I think it's going to be interesting. I think for them, I mean, you know, everyone always goes back to the Reed Hastings and Netflix classic pivot where, you know, DVD by mail was the cash cow of their business, but they made the courageous decision to switch to streaming and go all in on it and it worked. Is Google going to make that kind of same similarly courageous decision? They, they don't have the track record of doing that. Okay, all right, you said it more definitively than I did. They don't have a track record on that, but this is a moment they have to. It's not only going to, you know, be something that Google faces. It'll be something that Apple

face, and that's something I spoke with Gruber about and something that was in big technology this week, which is that you really have these incumbency problems in lots of of places where you have successful products, like for Apple. You know, we talked about the Rabbit R1, right, which was this AI device that sits on top of apps. You know, Apple last week, they teased that they have a big AI announcement coming later this year and like analysts like Gene Munster said, oh, Tim Cook has said the magic letters and, you know, I'd like to welcome you to the AI, regenerative AI freight train.

Well, Google's also on that generative AI freight train and it's a freaking bumpy ride. So, you know, are they going to then take the iPhone, for instance, and make it all all like a Siri large language model versus the traditional operating system. No, you can't do that. So there will be very interesting challenges for big tech incumbents as this stuff moves further. If Siri became my primary UI and interface to all computing, I would throw out every computer and phone I have. And I mean, for Apple, just fix Siri to start. Just get it on par even with Alexa. Right. Well, they're going to. Like that's a priority for them this year. hope so but as someone who recently changed my entire smart home setup to the home pod it's a

it is truly a bumpy ride so just fix Siri guys that's all I ask I had this in our document last week after earnings and it's a little bit of a provocative thought to share so and we were talking vision pro last week so I didn't want to bring it up because I could have been a whole can of worms but I'm just going to throw it out there for the two of us right for it Google's currently sitting at one point eight trillion dollars Meta is at $1.2 trillion market cap. If meta surpasses Google, can Sundar Pichai survive as the CEO of Google? I don't think so.

I think Sundar is probably in a pretty precarious situation right now. I mean, the overarching narrative around him is, it's like, you know, optimizer, very good at just kind of growing things from 100 to 150, but not from zero to one. So I think, as your reaction was when I said, can he make the courageous pivots needed to get Google where they are? He doesn't have the reputation for it. Maybe he will kind of show that visionary side of him. But it's also interesting because Tim Cook had that similar reputation for a while, especially after Steve Jobs, that he was an operator and not a visionary. And I feel he's starting to get out of that, especially we'll see with the Vision Pro. But yeah, whether, I think if meta continues showing, especially in advertising, they're now going to be bigger than Google potentially.

I think that's not a good sign for Sundar's job. Here's the thing about Sundar and Tim Cook. Maybe they are quite similar in terms of, you know, the way that they lead optimizer and, you know, focused on efficiency and incremental improvements. The thing is, and this is what Grumberg mentioned, Tim Cook has not faced a challenge to his core product. The phone is the phone. The phone is sort of the end product, the end state, whereas like now Sundar is seeing search get challenged by generative AI, and that is a big deal. Yeah, no, no, I think I completely agree. This is going to be, it's funny because each week we talk about how the magnificent seven and big technology companies are, are completely entrenched.

Ken Young here in the comments that actually asked, could the dominance of Fang be shaken up with interest in AI? So, yeah, I think on one hand, they're more entrenched than ever, but it's also, it's an interesting time because on the other, their dominance or their incumbency, as you said, also poses probably the biggest kind of organizational challenge for all of these companies. Now, this, this, again, might be a bit of heresy, but in a lot of private conversations, the people who are plugged in that I speak with, when they talk about Sundar, they say, that guy likely isn't long for that job. But yet I haven't seen any. coverage asking about like how safe Sundar Pichai is. Like I've not seen one report about that. Of course Alphabet's doing, you know, they, I just checked because I was thinking about about digging into it. They did hit their all time highs in the stock market earlier this year. So, you know, that's if that's the measuring stick, they're there in good shape. But you look at where the competition's going and you sort of wonder. I'm curious why you think we haven't seen

any deeper questioning of Sundar's position in this in this role. Well, but Google Cloud as a business very strongly responded to Amazon Web Services, Google Workspace, very strongly responded to Microsoft Office. So I think they've shown they can basically copy very well, but they haven't shown any kind of like completely new innovation. We are, this is, I've had a lot of conversations around this is like, you know, like what was their last great innovation, you know, maps, YouTube, all these things just kind of keep going

on is just, you know, almost relics of their past self. But, uh, yeah, I think that is interesting. I agree. Maybe it becomes more of a conversation, but it's hard to have that conversation when a stock is at an all time high. So exactly. Yeah, there might be a story to do on it. Well, we'll see. Speaking of Google's big innovations, uh, I have a feed drop coming on on the feed on Monday, which is for a new podcast called Building One by the chief product officer of LinkedIn, Tomer and he interviews the co-founder of Canva and apparently this guy was an early person working on Google Wave. So Google Wave.

Remember Wave? I love it. Yeah. Go ahead. Some of the it's not quite Google Plus, but Google Wave was definitely one of my favorite. Was that like 2011, 2012 where you- That feels right in the pocket. It was kind of a Twitter clone, if I remember, but-

No, it was like this collaborative place where people could like type and move images and put videos. It was like a, basically like a co-worker, almost like Figma, like there was Google Docs for everything, collaborative workspace. Could have been Google way. I mean, that's one of the things you imagine is pretty tough and it is that problem of incumbency

because you can totally picture they like Miro or you know, collaborative white porting tools if you've ever used them, but Figma even like that whole idea of like real-time collaborative work, which they have nailed with Google Docs and sheets and stuff being able to work together in real-time. But you can imagine that kind of product. That's a problem when you have how many billions of users

that to show genuine traction, you don't probably have the time to innovate and actually find something that's gonna really stick. You're either having to hit insane numbers early on or it just gets folded into wherever and then gets killed off eventually. Yeah, so folks, stay tuned for that feed drop coming on Monday. Tomor and I talk for like 10 minutes right before the episode starts,

just about what he's trying to do with the show, but also about this Google Wave thing and about how he thinks about generative product management with generative AI. So that's something to keep an eye out for. Now, this week was also interesting. There was this leaked, well, there was this faked robocall from President Biden.

telling voters that they should abstain from voting in the primary elections. And soon on the heels of that, the FCC banned AI-generated robocalls. So it's interesting that we're starting to see some pushback towards this AI-generating stuff. I mean, I think that there were already AI-generated robocalls that were, like, hitting the market. But to see the government take action on them is quite interesting. What did you make of this? Yeah, I think because again, the main difference is how are they really going to be able to tell even finding who originally created and paid for the robocall is almost nearly impossible.

So I think the more important thing was sending a signal that you will be prosecuted. This fits into, you know, there's like a three decade old law aimed at curbing junk phone calls and it fits under that. It's a clarification around that. So I think we're going to see in this election year a lot of very very. very, very intense, strong action around this kind of stuff. Again, how easy is it to enforce is another question. But I think at least in the letter of the law, it's going to be spelled out pretty clearly.

It's interesting seeing the government take action on tech. It's like we've had these two side-by-side pictures of effective government and ineffective government. The big tech hearings and then these smaller moves from agencies where you're actually seeing them do things. This is one example. And then there's also the FTC, which has had a mixed record of success, but has really been on the warpath trying to block mergers. And I don't know if it was them or European regulators, but basically there was a significant block merger recently that we've been meaning to talk about, which is that Apple, Amazon wanted to acquire IROB, which is the maker of Roomba and then basically decided to walk away from the deal. So what can you tell

about that. Yeah, I think overall, we've seen the climate has changed and there's going to be a lot more scrutiny over all M&A. And I think that's a good thing. I think that was, you know, that's one of the reasons we're still sitting here and the magnificent seven have just incredible amounts of market power. But I think it's, yeah, M&A is definitely an area where the government has been successful in the last couple years. There's been some big, you know, like notable losses, but overall, the entire climate has changed, and I think that's a good thing. Well, let's talk about whether that's successful or not, because, so the CEO of iRobot lost their job because of this. IROBOT also took, they are going to lay off 350 employees,

31% of the workforce. They are a mess internally now after being, you know, waiting to be acquired and this is a problem for companies that like make plans they go through these lengthy processes and they can't eventually close the deal and the same is going to happen with figma by the way which just like i closed out of this adobe deal like the company spent months or more than a year waiting for it to close both of them and all the plans put on hold you know people figuring out what they're going to do for work maybe just chilling like you don't want to advance too much she don't want to change the product too much, you know, as you wait for this approval. And so I'm curious if you think the word success is the right word to use.

I think it's 100% the right word to use because, yeah, the New York Times had a long piece. It was really good actually just yesterday around what the culture and feel is at Figma right now. And again, they had, it was supposed to be a $20 billion deal. And then internally, Figma just reset its valuation to $10 billion. So you can imagine you're an employee sitting there. you thought you were going to just have some insane windfall, and now it's not as insane. It's probably still pretty good for most employees, especially early ones. But I agree.

It completely changes the calculations and the whole culture about how companies just approach their product and approach their work. And I think it's a success because I think it's a good thing. I think like if companies were built around not actually continuing to figure out how to better serve customers and innovate, And instead, we're just trying to figure out how to cash out. You're seeing it in real time. Like, as you said, if people are just kind of spending months and then not really doing anything in the hopes. And we all know if Figma was acquired by Adobe, it would just go out to die to go out to pasture. So, I mean, I think it's a good thing.

And it's a reminder that a lot of the kind of downstream effects of this are longer term. Because for each one of those stories, that means that at somewhere, some M&A lawyer and some investment banker talking to some CEO are not going to start that process rather than starting it. Exactly. That's where you see the – like, you can't almost measure a lot of the times with Lena Kahn and the FDC or even around the Department of Justice. There's kind of like win-loss scorecards. But I think unless you look at the aggregate, it's tough to paint the whole picture. And that's taking shape right now. And they will diverge, right?

Because you'll have some company, like a lot more companies will decide not to go the M&A route, right? So their real chance of an exit is an IPO. And some of them will make it there and be worth probably three or four or five times what they were going to make as an acquisition. Like think about Instagram, for instance, if they had to go the IPO route, they would be worth so much more than the billion that that met a page. And social media might be good right now if Instagram actually. But there's also going to be companies that will just kind of fizzle. because they can't get there so it's like taking away this this very important piece you know potential exit and then will investors continue to fund so i think there's very complicated second order effects

i think you just described healthy capitalism to me but rather than catch and kill emma well i'm not advocating for catch and kill okay i hear your criticism ron all right i'll give you this round all right uh speaking of healthy capitalisms or an unhealthy companies why want to talk about SNAP. I mean, the company not only laid off 10% of the workforce or said it was going to, but when they reported earnings, which missed in some categories and had light guidance, they blamed the war in the Middle East, which is, I think, a pretty poor excuse given when you saw Meda's numbers, right? They didn't have any problem with that. Anyway, the stock dropped 30% in a day. Yes, Snap. I'm going to say some bullish things about them in a

second, but I think their earnings report did not, clearly did not please the market. It's down over 30% since right before the earnings, though it ran up a good amount after earning and meta's earnings. And I think everyone was hoping that they would kind of have the same meta had, I believe it was 24% ad revenue growth the year on year, whereas SNAPS was up 5%. But it's an interesting time. Like one thing I wanted to highlight about SNAP that was interesting, the first time they really addressed this. And I think this is a really important thing, both for them, because they were kind of the poster child, was stock-based compensation, that they were the, like, in the first three quarters last year, they generated $3.2 billion

of revenue and issued $1 billion in stock-based compensation, or SBC. And SBC, the weird part of it is it's a non-cash expense. So it's been used. by lots of tech companies in varying degrees of absurdity where you know you have a certain amount of cash outlay and then you give everyone else shares and it's it's part of the tech industry in general and it's part of a lot of jobs in general that we all expect now but you use it so aggressively that you're basically not paying people you're just issuing stock because that doesn't come out of your profit like your EBIT does not reflect stock-based compensation so this is the first time where they actually

openly acknowledged that that is an issue and that they would be cutting down in the amount of stock-based compensation they issue. And I think that that at least was a good sign that they recognized they need to be more disciplined around it. I mean, the whole advertising business of theirs is another conversation. But I think it was an important moment because that's the first time I've seen a company openly acknowledge it as maybe problematic, not calling it directly problematic, but at least saying we're working on this. Is that your bullish statement? on SNAP? Well, clearly, I'm in line with the market on this one. But no, no, okay, what was bullish for me was I think they're still at a really interesting position right now, because

they have not figured out direct response advertising like Facebook or meta. They haven't. Everyone was hoping they had in the same way in the last year. And meta has such an advantage in terms of first party data because SNAP always was. They have a whole new ad campaign We're not social media. They're not a data siphoning data collection thing, a machine in the same way Facebook is. So they can't create their own first party data-driven advertising model in the same way Facebook can. But again, daily active users was up 10%, which I thought was interesting. And still for me, and it was barely mentioned in the earnings call 7 million Snapchat plus subscribers.

We've talked about this a lot. When you're getting 7 million Gen Zs to pay for your product that would be free in any other platform, I think that's interesting. And then the whole idea that we've talked about that as a generative AI platform, people are paying for quirky little Gen A.I features that if they become kind of the gateway to Gen AI for every single user, I think maybe they start to move as a non-advertised-based platform, which starts to get interesting, but they're certainly not there yet. Right.

Yeah, I saw the stock drop and thought like, oh, man, like this might be a good buying opportunity for SNAP. And I didn't do it for two reasons. One is I don't invest directly in the companies that I cover. But even if I did, they're still remarkably higher, maybe 25% higher than they were in October. So last year. So they did have this huge drop, but I think you're totally right to point out that it was,

in front of a run-up. But I am bullish on them. Like I know that they are getting more serious about figuring out the ad stuff and I think that over time they will. Yeah, I also, when you look at the layoffs, one thing that I thought was pretty interesting was there was like the SVP of content.

It was a lot of people who had content in their title. And if you've used Snap Spotlight, it's pretty garbage relative to certainly a TikTok or I've met up figured out Instagram Reels really well that I think whatever they were trying to do with in-app content apart from the messaging, and they have big numbers that spotlight views are up X percent, and I think it's like 175 million people a day engage with Spotlight or whatever it is. But if you use the app, you quickly realize they have not figured out content yet.

So the fact that a lot of the layoffs were around that, I think maybe and competitively trying to compete on Reels, and TikTok and everyone else who went into YouTube shorts, maybe they're realizing they're not going to win that battle. Yeah, I saw you added me on Snapchat this week, where you just kind of exploring the product? Or what was the story behind that, Ron John? No, no, I actually used Snapchat with a few friends.

I do. I think it's amazing. So when I was doing my story on Snapchat Plus, I red downloaded it. I hadn't had it on my phone for a while. I read download it and wanted to see it was all about. And my wife and I use it all the time now, just sending those stickers and stuff is fun.

No, no. It's just a much better, more fun messaging app than the rest out there, which is, and again, I mean, I'm old. Like everyone I know who's younger, they still live on it. So that's where I think, again, in terms of user engagement for something that's not built to be addictive, the stickiness of it, the increasing daily active user side of it. Like it is a great. Yeah, it's a great product that has a lot of people who love using it. The only difference is they have not. figured out direct response advertising. So speaking of CEOs, Evan Spiegel, of course, has disproportionate control of that company, same way that Zuckerberg has of Facebook meta. Snap is down 58.95% from its first day of trading. If Evan Spiegel did not have that control, do you think he would be out? I know. This is always a really interesting question for you because I still think We were having this whole conversation in this episode about kind of operator versus visionary CEO. He's shown time and time again to be on the visionary side of things. I think like snap, I mean, again, oh, the whole metaverse thing, they've owned augmented reality to the point where they, no one even considers them augmented reality, even though everyone's using AR in their app all day with lenses.

Like at so many levels, even disappearing chats, even the whole stories format, they let them. the way on every one of those product innovations they just never found their operator and i i agree i think the fact that he's gotten away without finding that operator is definitely a problem of super voting power and super voting structures and Zuckerberg has always actually found the right way in the end whereas spiegel has and so yeah i think his job would have been a lot more threatened let's say versus others if without that hey well Cheryl Sandberg's a free agent so that would be just saying that would be the move and she could call Evan wait no and she could rehabilitate her image completely because Snap's whole thing is we're not addictive social media so she could make amends for all the

ills that the addictive social media side caused and then she'll run for president and that's the story. The Snapchat president. All right, folks, you heard it here first. No, president of the United States. Yeah, no, I'm saying the first Snapchat president. Oh, yeah, yeah, okay, okay. Got it. Good happen. All right. Let's take a quick break. We have plenty more to cover. We'll be back right after this. Hey, everyone. Let me tell you about the Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than two million professionals read the Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team

of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one you're using right now. And we're back here on Big Technology Podcast Friday edition. We have a bunch of stories left to cover. Let's briefly touch upon Chris Dixon's book, Read, Write, Own. So this is a book basically extolling the virtues of crypto and telling diehards that it ain't over yet folks um so look i think i should just share like the backstory here because i've mentioned it once or twice on the show but uh chris dixon's reps uh pitched not one but two of them pitched me on having him on the show i said yeah bring him on you know obviously it's not going to be easy questions uh but we'll do it

and they pulled out i guess like they went on so many friendly shows that they decided that they didn't want to face any tough questions and i'm starting to see why uh because when you look at some of the reviews that have come out about this book um it's pretty rough and he is of course like the person leading the crypto push at indreason horowitz and i'm going to say this before i start reading some of the some of the reviews like i still think that we could can see we already know that blockchain is is starting to be used in places i still think that we can see applications built on top of this uh technology but but my bottom line here is that and is that i think that crypto just needs better spokespeople than indreason horowitz and chris dixon and that

this guy is doing a disservice to this entire um era like wave of technology so this is from uh molly white who reviewed the book um so she says there's part four here and now and then there's part five what's next the name part four suggests that he will perhaps lay out a list of blockchain products projects that are currently successful solving real problems that may be why part four is precisely four and a half pages long and rather than name any successful projects dixon instead spends his few pages excoriating the casino projects that he said has given crypto a bad rap in fact throughout the entire book dixon fails to identify a single blockchain project that has either successfully provided a non-speculative service at any

kind of scale. The closest he ever comes is when he speaks about how for decades, technologists have dreamed of building a grassroots internet access provider. And that's something called helium that may or may not be turning out. I mean, like the whole thing that's going on in this book is him plugging A16Z projects, which have not had a great track record. And basically, Molly ties up her reviews saying this whole thing should have been a blog post. Always the greatest thing to read after writing a book, I'm sure. Yeah. Yeah, I think for me, it's just I want the only reliable narrators right now on blockchain are people who did not absurdly enrich themselves during the last few runups.

And I think this is like, again, another example that it's difficult to take it seriously. when, you know, lamenting for the current, for the past few years about people, you know, and casino projects and crypto getting a bad rap, when you made too much money on it just makes it difficult. And the moment, just just one successful project. That's all I ask. And now here's my favorite part of the whole thing. So Chris Dixon was on X talking about how well the book did and that it was number nine on the New York Times bestseller and number 25 on some list and if you look at the bestseller list there's a dagger next to the book a dagger symbol and what does the dagger mean this is from vice the dagger icon indicates as the times helpfully

explains that the bulk purchases were that bulk purchases were included in that count put that put the book on the list and basically it comes out that a lot of injuries in horowitz portfolio companies built and bought in some cases more than a thousand books which helped this book get on the list And I just thought it was kind of poetic, right? Just this something that appears to be big and successful on its front and really want you to get behind it. And it turns out that behind the scenes, it was like a lot of manipulation and smoke and mirrors

to make it seem to be more than it was. Just like a lot of what Andrews has been, Andrews and Hart's been telling us. I learned about the dagger icon, and that was my favorite thing this week that I learned about. Yeah, I didn't know about it either. Yeah. Yeah, that would that, and I was just, I had been reading that it's called the dagger of death in the publishing industry, but basically, it basically is assigned to readers that this is on here, but it probably shouldn't be.

So I kind of love that the New York Times has recognized this and is not afraid to bring the dagger of death to their own list when they have to base it on sales. Yeah. Now, look, you know, since we're, we are like a nuanced show, like I'll say that, you know, potentially. I don't know. My feelings on this could be influenced by the fact that Dixon pitched and then decided to bail. But I also think that everything that we're saying here is, like, true. And I would have no problem saying it to his face either. Well, I respect that you acknowledge that.

But I think I have to agree with you here. Yeah. And there was a comment that got on X when I tweeted the Times bestseller thing. it was basically this person saying is it really newsworthy that a book got on the n y times bestsellers list is it newsworthy trying to discredit book sales there is a real there's real tech to report but technophobs advice are our petty i think that that is a good point however if you look at that you know all the different frauds and the pump and dump and the schemes and follow follow me everything's going to work out type of stuff that has been extolled by you know a lot

of the scam merchants in crypto, like the fact that this big book about the crypto industry, the Web 3 in particular, you know, ended up being kind of scammed, it's scamming its way onto the bestseller list. Like, yeah, that's freaking newsworthy, man. Yeah, I think, especially given it covers crypto and how you tied the two together, I think that's newsworthy. Yeah. All right. So look, if people have different opinions, like I'm definitely willing to hear them, just email me at Alex at bigtechnology.com and I'm happy, I will happily, I will happily read what you have to say, respond, and, you know, potentially read it on air next week, but figured that was, you know, worth covering. Oh, my God, I'm just looking at our next

to work on the list. You see this? So, so speaking of crypto, FTCS is going to fully repay customers, and basically, like, they will not give them, like, the additional gains. They would have gotten since the exchange collapse, but they will be able to repay them in full. I think part of that is because Bitcoin is now at 45,000. So clearly, like, like this crypto wave is not. Oh, my God. It's now 47,000. It's flying. It went up to 2000. So clearly the crypto wave is not over. Like, there's going to be a second wind here. But it is kind of interesting to see where this thing is moving. Yeah. I'm sitting on the sidelines and watching closely. And we also waiting for whatever

the next SBF, SBF news is. Oh, yeah. So I think we'll probably, so we teased about having Zeke Fox on, I think he will come on the week of Sam Bankman-Fried sentencing. So people should keep an eye out for that. I'm excited about that one. That's in late March. Do you own any crypto? No. Okay. I did. I have multiple times and multiple iterations, but yeah, not at the moment. I just bought some Bitcoin for the first time in a while when I opened up Robin Hood before I interviewed Vlad. I was like, oh, crypto, let's do that. So, all right, there you go. So I am up. Another interesting story.

It feels like we're like rolling the clock back, but Adam Newman is trying to buy WeWork again. Adam Newman is trying to buy WeWork again. His real estate company Flow Global, which they'd raised, I think, yeah, $350 million from A16Z. Everything is connected today. It had sent a letter that they're working with

Third Point Capital, Dan Loeb's fund, that would try to help finance a transaction to get out of bankruptcy. To me, there's two great parts of this story. One, Adam Newman, back looking at WeWork after enriching himself to $1 billion, or I think it might have even been $1.7 as the company went into bankruptcy, and that they would have to basically work out terms with SoftBank, who lost $16 billion, I believe it was, total, that was poured into it. So that's already great.

The other thing I found fascinating, Alex Spiro was the lawyer involved in this. Alex Spiro is Elon Musk's lawyer whose name and quotes end up in every single Delaware story, S.C., Elon Musk's story. So he also apparently represents Jay-Z. I think he might low-key be one of the most fascinating people in tech that no one has really ever. I don't know what he looks like. That would be a great profile, honestly.

Maybe I should write that one. I mean, come on. And he's like Elon Musk's attack dog, basically, in anything, any legal story. He's the only one that's quoted. He's always super aggressive. But clearly people, I mean, he's doing a good job when you're not only getting hired by Elon Musk, but Adam Newman and Jay-Z. Yeah. It seems like these folks really know how to do the legal stuff pretty well.

Yep. Do you have a couple minutes to talk about the return to office stuff? Yeah. Or do you have a hard out here? Let's do a couple of minutes on IBM because who better to end a conversation about big tech than the original big tech? Right. So basically IBM has told managers you've got to move near an office so you have to leave the company. And this is from Bloomberg.

IBM delivered a company-wide ultimatum. Yeah, basically telling people that better get back. All U.S. managers must immediately report to an office. or a client location at least three days a week, regardless of current work location status. And that badge and data will be used to assess individual presence, right? IBM to me is just the tip of the spear here.

There are so many companies that are telling their employees, they better get back to the office, or they are not gonna get raises, they're gonna be laid off, they're not gonna get promotions, all this stuff. And I had a friend I was talking to about who's going through this and he goes, like we've, and they don't work at meta,

but like they used to, year of efficiency term, basically he said, we've gone from year of efficiency to the year of douchebags. And like, I wonder if this is like the flip side of earnings, Rajam, because, you know, we're seeing great all-time highs record profitability. Companies talking about how they're making more money with less people. And they are trying to find ways to find margin. And is this a way, this return to office thing, a way for them to like get out of having to pay higher compensation, figuring out who to lay off and trying to make those margins higher and deliver for Wall Street. I'm curious if you think it is a ploy, because I do.

Oh, I 100% think. I wouldn't even use the word ploy, which is kind of cynical. I think it's pretty direct. I think it's explaining to people. And I also think that, again, the whole work remotely, return to office, work from home debate, I think especially at bigger firms, it's clear which direction, majority, of firms are moving and that's returned to office. I tend to end up on the being in office is a good thing in many ways. And I think that it these companies hired too many people during COVID.

So all of those the fact that I mean it is the single worst sign for a worker sitting comfortably remotely when record profits are up while layoffs are happening because it just showed that a lot of the workers were extraneous and we talked about this lot and I would say this is probably one of the few times where normally I might be critical of big technology companies where I don't feel bad for them but I think having seen how comfortable a lot of workers were at a lot of these companies over the last few years there was endless rest invest stories or people kind of having side jobs while getting paid 400k or whatever it was like we all is it was kind of not even an unwritten secret but a written one in the tech industry that these were very comfortable

places to work and then they're just not going to be as comfortable right now wait you think the very act of being at home is effectively slacking off no no not at all but i think that at a lot of these companies probably too many people took advantage of that in a way that made it that they made it so that they realized that it can't work that way i have that way. I actually think my whole, I got theories on this, but I think like an early to midstage startup almost can work better remotely where everyone is accountable to each other remotely. It's at the larger the organization gets, the easier it is for people to kind of skate by and not be accountable because you'll just easily lose yourself in the overall bureaucracy.

Let me give you the wrinkle here, right? Which is that it seems pretty clear to me that people, that these companies are going to apply an uneven standard to their workforces, right? Like the high performer will be able to stay at home and continue working from Mexico City where the rank and file are going to have to come in. And I'm curious, like, if you think that that's true and what sort of tension that could cause within a company, like is this actually healthy for companies? Oh, that's not the way I've been hearing this for the most part. Really? Yeah, what have you been hearing?

Oh, no, that this is affecting everyone at every level. And it's actually more often than not the senior managers that have been going in more regularly to start, and they're the ones pushing it. And that's actually where you get a lot of the pushback is that, you know, if someone who's senior has an easier time, you know, finding a place to live in San Francisco or in New York City versus someone who's juniors and their commutes will potentially be shorter and life is easier, so they're able to do this. So I think there's potentially reasonable claims and pushments. back there but overall i i don't think this is something where you know they're laying off or they're using this to get rid of rank and file i think it's the opposite one of uh my my core takeaways here is that it's time to buy stock in chipotle because everyone's going to be back in the office everyone's going they're going to be eating chipotle for lunch and that that is very bullish i like this i like this

maybe sweet cream comes back maybe sweet cream comes back oh my god sweet green is so back it is a technology It is a technology. We know this. 60 seconds on the Vision Pro, I got a chance to try it this past weekend in the Apple store in Brooklyn. A few key observations from me. First of all, there was a tremendous amount of open appointments to come see it. I expected to wait online for hours. Did not happen.

And that, that to me was pretty interesting. The actual technology itself, better than I expected. The actual fidelity of what you see being beamed into your eyes. is absolutely incredible. The entertainment is amazing. And I personally was like, should I buy this thing until I took it off and remembered how much it cost and said, all right, I'll get the next generation. So I know, Ranjan, you haven't tried it yet. But very briefly, are you more or less bullish on the Vision Pro after seeing it out for a week? I am more bullish from talking to people who have bought it. I actually had an appointment on Thursday after talking to Joanna last

week. I wasn't able to make it yesterday, but I think I'm more bullish. Everyone I'm talking to, the whole idea of like multiple screens and just working again, I think I'm more, my take that it should be proudly an isolating device and that recognize that's what it is. I think it's going to, it might hold some water, at least in the near future. Maybe eventually we end up with, you know, lean AR glasses that actually fit comfortably and aren't weird. But yeah, I think, and actually, Actually, I was at a New York Fashion Week show yesterday, and I saw someone in the front row wearing a vision pro. So there's models walking down the runway, and there's just some dude with a hoodie looking up and sitting with the vision pro. So, and people were pointing it out.

People were laughing a little bit about it. I mean, it looked utterly ridiculous. But it did make you wonder, is this going to become kind of normal at some point? And again, if they were, I don't know if they were from the company, who they were. if they're filming it in spatial video, and that was a whole point of it, but it looked ridiculous, but now that it's happened once, maybe it's not going to look so ridiculous the next time. Oh, I think it's actually going to be common from Roet, fashion events, sports games. You're going to see people walk in and watch these things and then go back and relive it.

And some of those people will be perverted and some of them will just be sports fans or business people, but that is happening. I always keep thinking of we had talked about it on the show a while ago. there's that iconic sports photo of everyone holding their phone up when what was it I think there's some scoring record set or Michael Jordan and LeBron's setting records and yeah it was in the moment with Jordan but not with LeBron yeah yeah they showed Jordan everyone is just looking LeBron literally everyone has their phone out yeah and I think that is that's the problem to me that I think the vision pro the most interesting part of it is we've all been living kind of halfway

between reality in our device in a really uncomfortable way. And I think the Vision Pro is at least the start of recognizing like either it's going to be totally seamless and we have nice AR glasses that fit well and look okay, or you should be isolated and everyone should look at you as I'm not going to talk to you because you have a headset on, but you're just recording the moment. So, Ron, and I'll end with this. Are you going to drive your cyber truck with the Vision Pro on or without it on? I mean, the only way to, oh, maybe for next week, I've read something really interesting that Apple, the Vision Pro is really a kind of the tech within it, technology within it, is leading to the Apple car.

And it's like the way we experience driving is going to completely change. Maybe for next week we should get into this one. That is a good teaser. All right. Ron John, thank you so much. Long one today, but lots of stuff to cover and great, as always, to get a deal. chance to speak with you. Thanks for being on. Have a good weekend. All right, you too. Thanks, everybody for listening. Again, my interview with our Vince Furnivas is going to be up

on Wednesday. We also have that feed drop of building one on Monday. And then Ranjan and I will be back next week to talk about how potentially we're going to talk about how the Vision Pro is going to change the Apple car and then also everything that happens between now and then. Thanks for listening. We'll see you next time on Big Technology Podcast. I don't know.