Big Technology Podcast - SBF Convicted, OpenAI Is Vulnerable, Ozempic Effect Gone Overboard

Episode Date: November 3, 2023

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) SBF's conviction 2) Whether FTX will cover the full shortfall 3) Why OpenAI is more vulnerable than many think 4) Google's forthcoming Gemeni model 5) Where the real value in generative AI will land 6) Google's $2 billion Anthropic investment 7) Rebellion against AI doomers 8) Sovereign wealth funds investing in AI? 9) Jeff Bezos moves to Miami 10) The FTC's new revelations about Amazon 11) The Ozempic effect 12) Ozempic's TAM. -- You can subscribe to Big Technology Premium for 25% off at https://bit.ly/bigtechnology 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]

SBF has been convicted on all seven counts. Wait, is open AI much more vulnerable than you think? Jeff Bezos is moving to Miami and the real Ozambic effect. All that and more coming up right after this. Welcome to Big Technology Podcast Friday edition when we break down the news and our traditional cool-headed and nuanced manner. We have a very big week of news this week, including big news on the FTX front, but then also plenty more on AI, on Bezos,

on Amazon, and of course, on Ozambic, something we haven't talked about yet, but we will today. Joining us, as always, on Friday is Ranjan Roy of Margins. Welcome, Ron John. I think the COVID-and-Zerp era is officially over. SBF is going to jail. This is a big day in my life right now. Absolutely. I mean, it took four hours to decide to convict him. And apparently that was even longer because they knew that if they took like a few extra minutes, they would get free dinner. That's what I'm hearing. But are you surprised that it took such a short amount of time to convict Sam on all seven counts? No. And for regular listeners over the last few weeks, Alex and I have regularly tried to play the role of SBF defense lawyer. And we failed miserably. And I'm very glad that the way this

ended the actual conviction went because it was a reminder that it was very difficult for anyone to try to come up with any reason he can get off. And to me, I think, The most important thing is with these kind of trials, there's always the worry that this stuff could be too complicated, the actual intricacies of what market making is and what an exchange is versus a hedge fund and a risk taker. All of these things could have been complex, but when all three of your friends and closest coworkers and co-founders all turn against you, I think that was pretty much the nail in the coffin. And Dan Pramacca Vaxios put a poll up on Twitter yesterday asking people they think SBF was guilty or innocent. And 99% said guilty and 1% said not guilty. And I was like, wow, like Sam is lucky that Twitter isn't his jury pool. But he actually would have been better off because at least there was some doubt there.

So seven counts. And what we're seeing now is kind of the reaction from some of the people that were there in the very early days. Of course, Sequoia decided to invest a tremendous amount of money there. And Alfred Lynn, who was the Sequoia partner who made the investment, came out and said that this confirms what we already knew. SBF misled and deceived so many, including myself and Sequoia. But just in June, 23, Ranjan, you point out that speaking at Bloomberg's Tech Summit, he said if he was test with evaluating FTX again, and for the first time, he would probably make the same investment decision. what do you take of that the fact that he's trying to engage in some revisionist history and all these people who for you who were with sam up until the end you know are finally

only now saying that was a big mistake i do not understand why alfred lynn is trying to come out and and try to make anything of this to deflect blame like all anyone has to say and it's totally not unreasonable is this was an absolutely manic moment this was you know like the first of all the rise of crypto in general then bring in all these other factors around zero interest rate and then pandemic and then like it's just masses of money coming in that and to and to do a deal you had to go along with whatever the hot deal was and a lot of people including sequoia made a lot of money with this strategy so just say yes we played fast and loose, it worked sometimes, and then other times it didn't, versus anything was particularly

untoward or it was all SBS's fault. And let's also not forget, the Sequoia profile of FTX and Sam Bamkenfried, I feel, will live forever in infamy. And for those who, remember, there was an article on their blog that talked about how he could be the world's first trillionaire. And then the best part was how they talked about, you know, as he pitched them and convinced them, not only would they own crypto that they would become the future vision of money and have a total addressable market of everyone, which was my favorite line. But then it even got better because then they said also the fucker was playing League of Legends the entire time. And they thought that was somehow funny or it made him kind of more of a genius and worth including in an investment

proposal and justification on their own company blog. Obviously that was taken down, but I mean, after you make that many mistakes, just own up to it. This is why we're so all in on this story, by the way, because it's not just a story of a crypto fraud. It really tells you so much about the whole ecosystem and about an era. You can really go in and dissect it. And, you know, speaking of playing fast and loose, I mean, the same, you know, every time there's a big criminal case, I wonder why we don't hear more from the defendant, who probably has their side of the story to tell and probably wants facts out there that aren't out there in their central discourse. Well, now I know why they tend to stay quiet because maybe he would have been convicted otherwise,

but one thing is for sure is that Sam Bankman freed through all of his media appearances and his inability to shut up effectively cooked himself in this case and said so much stuff that was held against him in court that he personally just could not get out of it. I mean, is that a good lesson that you absolutely do not have to tweet through it? No, I think that's hopefully the best lesson from this because I think that over the last, let's say, maybe five to seven years, I think it's actually been a really, really bad lesson for future up-and-coming entrepreneurs or just leaders of any sort that the lesson has always been you can always tweet through it and i won't name names but that's business leaders

politicians that's all types of people that the kind of lesson everyone's taken away is the sheer velocity of and like ferocity of communications is uh is how you would get past any kind of problem and deflect everything and this was a reminder that i mean again how open and shut this case was that it didn't save him. And boy, he tried. I mean, remember the 60 Minutes episode? That to me was, I think that was even worse. And I still have not read the Michael Lewis book.

You have. I just finished it. Yeah, yeah. Actually, how do you feel now? You finished it right before the conviction. We talked a little bit last week, but have your feelings on the book changed at all? I think I'm going to bring that in right now

because we're going to go to sentencing predictions, and I think it factors in what I learned at the end of Lewis books. So, okay, so Sam faces up to 115 years in prison. What do you predict he gets and what do you think he should get? This is a tough one for me because I will readily admit and sometimes a rarity in punditry. I have absolutely no idea how criminal sentencing works. And I'm happy for that because the actual like nuts and bolts of it. But I mean, if we talk about how much do I think he should.

get it's a tough one like there has been no i mean what's bernie madeoff got life basically uh wait how long did elizabeth holmes get 11 years i think she got 11 years yeah so elizabeth holmes who put people's lives actually physically in danger only got 11 years like there has been no real uh you know very tough sentence on any kind of white collar criminal and like this. So is it going to be something like 10 or 11 years or will it be something much, much more significant like a Bernie Madoff? I think it should be interesting. But I think, I hope he gets enough that it deters people from doing this kind of thing again. Okay. So I might be a little Lewis-pilled because at the very end of the book, he makes this point that John Ray, who was in charge of the

bankruptcy of FTX was able to find $7 billion of the $8 billion missing assets, $7 billion of $8 or $8 in change. Then you add in the fact that Bitcoin has appreciated and that are, and is FTCNs in the green right now. And I don't think that should matter for the conviction, but I do think that should matter for the sentencing because if they're able to return the money to the people whose money they lost, then that matters in terms of how long you're going to put. put this person in prison.

Wait, how did they find $7 billion of $8 billion from the money? That's what I'm, I have a hard time racking my head around when what, like you have some amount of money is spent on renaming the Miami Heat Arena, on paying Tom Brady and just like, that's money out the door that's gone, that's spent. Then I did theoretically you have cash sitting around, cash that's been invested in however many either angel investments, one of which is anthropic, but then a lot that went into total shit coins. Like, like, how did they, you're telling me, they genuinely recovered seven-eighths of all the money that was ever invested into FD, that was ever deposited into FDX. I mean, I'm not

saying it. John Wright is saying it. And he's the guy, I mean, he's not exactly in favor of these folks. So I think a tremendous amount was largely the clawbacks. They probably made some, I don't know if it was the arena that they clawed back from, but they definitely clod back. And then FTX did make money. I mean, it was making money. The whole problem was that it then took the actual customer deposit and lent it elsewhere.

But it was making money. So I don't know. Maybe, look, I'm not here to defend Sam Bacon free. No, no, that's fair. That's fair. And so I do think that that plays in. I think Sam is going to get 20 years. That's my prediction.

I think he should get five to 10. but okay i mean i'll match your 20 yeah i think 20 to 30 is really most likely could you i mean given that the lot of this money is going to be club back could you give him five to 10 and bar him from getting anywhere near anything financial except for a u.s treasury bond for the rest of his life that would seem fair to me i i am ready for the 2050 sam bankman freed redemption tour where he's going to be giving financial workshops and lessons all over the country. Okay, so somebody did take a mid-jurney photo of Sam Bankman-Fried and put it in my mentions, showing what he would look like after like 40 years in prison or whatever.

And just looking at that image, and you know how Mid-Journey makes everybody look better than they actually look. I just have this prediction that Sam is going to just get into six-shade. you know, cut his hair in prison and become like this object of romantic fascination among geeks, geeks everywhere. Like he's going to become like the next weirdo sex in the U.S. Schrelly? Schrelly, yeah, exactly. All right, bold predictions here on big technology podcast.

So speaking of bold predictions and proclamations, I wrote a story in big technology this week that's going to lead us into a discussion of the state of AI today because, and I think we've probably talked about this, but I don't know if we've talked about it as concretely as I laid it out in big technology this week. But I wrote this story talking about how open AI is a lot more vulnerable than you think. And basically the main premise is that open AI rose to prominence, building great products on top of other people's breakthroughs, including the transformer model. And it had this head start because people didn't fully understand what was going to happen. And in fact, if folks listening to Garav Nmadeh, who came on the show on Monday, they would have understood that Google itself didn't even realize what it had on its hands with the transformer model in 2017.

But everybody is now queued into what this technology can do. And so therefore, there's a tremendous amount of competition and there's commoditization. And I've listed six areas where Open AI will face competition and is not stacked up perfectly in terms of its ability to compete. So I'll just go through them very, very, very quickly. One is model commoditization. It owns GPT4, which is the best model on the market. But you're seeing, you know, new competition from Gemini within Google. That's going to come out imminently.

You're seeing Anthropic, right, which is getting these billion dollars of investments, Lama 2, and even, who knows, maybe Elon Musk's XAI will factor. So people are going to have choice. When people have choice, we go to 2, which is margin compression, which is now if there are so many different LLM models, They're going to have to compete based off of cost. The margin comes down. And in fact, one entrepreneur told me that he doesn't even see this as a money-making operation

and the infrastructure is really going to be the thing that makes money, which points to NVIDIA. Number three is the hits business. You know, when everybody has access to this technology and everyone's building, you really need hits in order to succeed in opening eyes had, even a model this year that they were working on that they had to scrap because it wasn't meeting expectations. The fourth is the open source threat, you know, about that very much. I had a VC who told me that the trend now is to start your company on open AI and then build

to the point where you're model agnostic where you can plug any model in and the actual experience of the product won't change. And then when you go to a certain point, you go open source and you customize and you build proprietary and so you don't rely on open AI anymore. Fifth is this move to smaller models. Open AIs chat GPT4 can do everything. And you don't need to do everything if you're a specialized model like. Harvey, for instance, for law. And so people are going to move to smaller, more specialized models,

which aren't as impressive if you speak with them as a chat ch pt, but might even get the job done better. And the six is that it's just too close to Microsoft. And you have Anthropic, which is making deals with Google here and Amazon there. And you have Open AI that's attached at the hip to Microsoft with $13 billion of funding. And it's going to make it much more difficult to show up prominently in an AWS or a Google. And all this adds up to an open AI looking much more vulnerable than the popular narrative makes it out to be. Okay, I've laid the case out and now I turn it over to you. How do you react? I would say, so as a consumer, have you used the recent updates within chat GPT? I'm sure I have. But basically, so now it is incredible. And I have

gushed about what they previously called code interterter and that called, I think it was data analysis and now is simply built into the interface where you can throw in a CSV and it can help you do really complex calculations. Now also doll e3 doll e3 is so much better so so so much better actually usable and even cooler now within chat GPT you can simply typed in a basic prompt like I want a unicorn on a skateboard and then because that's the kind of stuff I look for and then it'll actually create an image but when creating it that image expand that prompt a great deal and then tell you what that prompt was so it's actually taking kind of the chat GPT element of let me help you create a prompt that's better and let me create you the image that's good

so all this stuff it was a reminder to me that open AI I actually think one thing that would push against a lot of this is their strength has really been as much on the product design side as it has been on the infrastructure hardware model side. And like one example for me was, again, GPT3 existed forever, but chat GPT, its most brilliant UI mechanism was how it kind of looks like it's thinking. It could actually create that answer for you and spit it all out in one big chunk but instead the letters appear as though there's this like sentient being thinking and that I honestly made made people feel like it's much more magical and that's what really helped the virality of it so all that being said I think on the consumer side what they've done just in the

last one month is puts them so far ahead for me versus any of the competitors clod which is or Manthropic, their chat butt, and barred from Google, anything else. All that being said, I think the most important thing you said was your fourth point that a good company that's developing on this technology basically should be able to move to the point that it becomes model agnostic. And I have seen that. I've worked on projects where we've gotten there already, and I really believe that's the future.

So to me, the consumer side of OpenAI is way ahead of everyone else. but that's the side that's going to probably lose money. And then on the enterprise side is where they're really going to need to secure and win these deals and make more and more and more money to make up for all the compute that goes in to the consumer product. And I think more and more companies are going to see, I don't need them for this. I can actually, again, whether it's the open source side,

whether it's more specialized models, all of these things. So I went through the entire example of why I think chat GPT has gotten so good to get to the point where I do agree with you. And I think open AI as a business is in a lot of trouble. Yeah, exactly. And so it's so interesting because there's both the consumer and the enterprise point. And what's going to be the bigger business for them? I think we've always agreed that it's going to be enterprise. And you're right. Like their consumer product is great. I think that Dolly 3, which you can also access with Bing, is amazing. It's actually, in some cases, for me, surpassed Mid-Jurney, which is wild because Mid-Journey was so far ahead.

I agree. I agree. Completely. That being said, these are demos for the companies to be able to provide their technology to developers for companies to build on top of the technology. And that is where the competition is very, very, very intense. Yep. And even more, the Microsoft thing was interesting for me because, again, and I've gushed about this before, but for anyone who's used their data analysis with it that's now built into chat GPT again, throw in a CSV rather than having to look up different Excel formulas to do simple analyses or even complicated ones, reminding myself how to do a V lookup, like that stuff just happens instantly just by querying with natural

language questions. But Microsoft's probably going to put that in their co-pilot and might not even use Open AI. They've announced partnerships with Facebook's Lama. They've also been operating at a bit of an arm's length. So where they really have an edge in a way that enterprises need them, I'm not sure. Okay. And that gets to sort of the new models that are starting to come up, right? Because if there's going to be a real commoditization, you need stellar models that are going to show up and are going to be able to make a difference here. And I just read this insider story from a few weeks back as I was researching where the progress is of Google's Gemini, which is the competitor to GPD4 that I imagine is

imminent. And it is fascinating. So there's a Google VP talking about it in the story. And they say, I've seen some pretty amazing things. Like I'm trying to bake a cake, draw me three pictures of the steps to how to ice a three layer cake. and Gemini will actually create those images. So these are completely novel pictures.

They are not pictures from the internet. It's able to speak in imagery with humans now, not just text. I mean, to me, that is fascinating, right? The fact that these models are moving multimodal, and Gemini in particular, if you can communicate in imagery, the power is unbelievable. Yeah, but, okay, so on one side, the multimodality, I think, is, I agree, getting really interesting.

And Google, I do think, especially from organizing, what's their thing, organizing in the world's information or whatever the tagline was or used to be. The Google proclamation is, we'll organize the world's information or whatever. Or whatever. Whatever. Make the cars fly. We'll put that in the whatever. I was thinking the don't be evil was one of the, that was like the motto.

But then they had something to make the world's information. Yeah, searchable. Yeah. If you can, don't be evil. If you can, you don't have. I mean, maybe a little bit, but, but I, yeah, no,

so Google and already we generative search, getting really interesting. They invented the Transformer. So on the pure model strength, I think they're going to be a formidable competitor. It definitely hasn't translated to either the enterprise sales side or the front end consumer side yet, but they clearly should be a competitor.

But to me, there's even a, I've talked to you about this offline before. There's a company writer.com. They just raised 100 million series B. They have a whole, the way I kind of like was thought of them, it's a third way. So you have either the Googles and Microsofts of the world, just gigantic. They're going to incorporate generative AI into the products you already are in. Or you have Anthropic, you have Open AI, these kind of like, pure tech AI companies.

Writer, what's interesting to me is it's just kind of like a classic enterprise software company. They basically sell full stack generative AI to industries like healthcare financial services that have really, really specific needs and information structures and hierarchies and regulatory considerations. So at that point, like going in and basically being the company that builds a software that brings generative AI into a company. existing proprietary software because a lot of these companies do have existing systems like

it's a different way of approaching it and I actually think it's a really interesting way because maybe the next giant company is not just a technology company it's also a more enterprise focus services sales uh consulting like a company that brings all this technology across an entire stack of an existing large complex enterprise because the idea that you know like some health care giant is going to figure this stuff out on their own, I think is a far cry from reality. I think the idea that an open AI, I just never imagine is going to have some huge sales team or like, you know, customer success operation that's genuinely that will work well.

So, yeah, I think there could be different companies that we're not even talking about right now that start to actually, which, you know, make an impact. And that's actually kind of exciting. Competition. Yeah, there's going to be real competition. And it's this whole discussion that goes back to like, are you just going to build a thin wrapper on chat GPT? Well, what's the difference between a thin wrapper on a cloud instance

and a successful SaaS company, right? Yeah, yeah, yeah. And so what was really interesting that writer they did is so they have a total consumer-facing SaaS product, but then built their own foundation models. And I think that's that kind of full-stack approach you're going to see more and more from companies again you'd mention like harvey law you know other industry or vertical specific where they don't just build the model and the

technology they build you the model and the software and you go in and it does is able to do both for you and across the entire stack to me that seems like a more reasonable business in the future versus whatever building on the open ai API API and that's the issue is customizable people have been talking about that. And so, like, one of the things that one of the founders I spoke with said was that people are going to compete on price or customizeability. Maybe Anthropic is the one that's going to do that because they also just ended up with another $2 billion from Google this week.

And that's $1.5 billion over time, but $500 million in upfront cash. And Ron John, you texted this to me this week. And I was like, you know, get that compute. But the cash, actually, as you pointed out, makes a lot. a lot of makes a big difference for them. So how do you read this investment for Anthropic? Yeah, well, they are playing everyone very well because again, they were, they had Google investment, then suddenly a splashy Amazon announcement, then suddenly Google's back in with cash up front as opposed to just those those juicy cloud credits. So I think it's a reminder that like,

and we talked about this very thing last week. Anthropic realizes, Open AI certainly has realized already, their brands empower enterprise sales teams at these giant cloud providers, at the Azure salesperson being able to say, oh, we have Open AI as part of our whole suite, makes him closing that deal or her closing that deal a lot faster. Same way, Google understands that to say Anthropic is getting buzzy right now. So, but I also, what are, I don't know, what they're going to. to do with all that cash and how they're going to realize those valuations in an actual revenue and monetary level, that one always worries me. And we'll see, we'll see what they come up with. Especially because they have somebody else to worry about. And that is none other than Mr. Elon Musk, who this Saturday. Sorry, sorry, we do have a comment in the, from LinkedIn about

IBM Watson. So instead of, instead of, we'll get into Elon Musk, but let's also just take a moment. to recognize IBM Watson. What are your thoughts on IBM Watson in this entire competitive battle, Alex? I'm speechless. I don't know what to say about IBM Watson. I really, I don't know. I'm going to just turn it over to you. I'm setting Alex up with that one, but I went to IBM Watson conference in 2015, and I'll never forget they had, they had, they They were walking around, they were handing out chocolates, and they said, these chocolates were designed by Watson. And I'm like, what does that mean? They're like, it's a recipe that's been generated by AI.

And this is what they were doing instead of actually building these products. Like, they were, they could have been, I mean, they literally had the branding. They won the chess, or Jeopardy chess, all these things. They were the first. and then they threw it all away. Turns out you need technology and not just marketing. And by the way, you've kicked off a Watson war in the comments, Ron John. So I'm proud of yourself on that.

Yep, we got Watson. I love Watson is trash. Okay. All right. So let's talk about Elon. Okay. Elon is introducing his XAI model this week on Saturday. And it's going to be interesting.

I mean, it's coming to limited folks according to Reuters. And it looks like it's another LLM. Yeah, he did recruit some real talent, people from deep line, people from, I think, people from Open AI. So I wouldn't count it out right away. What's your expectations here? It's Elon vaguely tweeting about a technology that will help Tesla's stock in the short term. So as a typical thing, I'll say my expectations are not profound, but you're missing the fact that this guy, there would be no open AI if it's wasn't for this guy. He not founded it. He recruited its chief scientist. I agree. I agree.

Without Elon. No, no, I agree. But it's kind of like, in a way, it now got to where it is. And this whole revolution happened because he went hands off. Yeah. Yeah. I'm saying it. I'm saying it. If he, if he was all in hands on over there, I don't think any of this is happening in the way it is today. But again, we'll see. The point you may and I think it was a few months ago when they first announced it, the talent that they recruited was insane. So, like, they have the team. And resources doesn't hurt to have his money behind you also. Nope.

Team resources, but. Elon is also in favor of regulation, or at least some might touch AI regulation. But now, I don't know if you've seen it this week, and I think I should probably write about this next week because it got so juicy. Like the entire deep mind conspiracy, like some of the, sorry,

the entire deep learning conspiracy. Some of the real original researchers of this technology, they fought pretty publicly on Twitter this week about the alarmist like AI will kill us stuff and talking about how, you know, actually it won't. Actually, this is just regulatory capture. And then you had Andrew Ng, who is the co-founder of Google Brain. Here's the headline from TechCrunch.

Google Brain co-founder says big tech companies are inflating fears about the risks of AI wiping out, humanity because they want to dominate the market. And he goes, there are definitely large tech companies that would rather not have to compete with open source. So they're creating fear of AI leading to human extinction. It's been a weapon for lobbyists to argue for a legislation that would be very damaging to the open source community. I think what's interesting right now is we're starting to get some like prominent loud voices talk about how this is all about regulatory capture and people should just shut up about the fears that they have about AI.

wiping us out what do you think about this i am so happy because we and we we have both talked about this on the podcast and i when we were talking about this like maybe three four months ago or even before or when was the letter again i can't even tell six months ago because the pause would have been yeah yeah remember the pause uh at the time but that's what both it's it was so clear that this is a form of like it was such an awkward thing for these companies to say this is going to kill us all, but we're still working on it. And I'm very glad that it's becoming, it is almost becoming a meme right now. And I've seen plenty of pretty good memes about, you know, like, it's going to kill you all, but sorry, I need to get back

to working on that thing that will kill you all. So, yeah, it's, yeah, it's, it's, it's, it's, it never made any, again, Elon Musk is, is tripling down on this. He's just talking to Rishi soon act, the UK Prime Minister about this entire topic. And meanwhile, cars are on the road with full self-driving. Like, it's, it's the disconnect for me has never made any sense. And I'm very, very glad that like people like Andrewing and others, like very, very prominent people who have led this entire revolution are now saying it out loud. Okay. So now here is a tricky regulation question and a funding question that I think will be fun to discuss. So on the phone with the AI founder this week, he told me that he thinks the next place that these companies are going,

these big AI companies are going for funding, sovereign wealth funds. And they've basically tapped out all of the money in the VC community, in big tech. I mean, it doesn't get much bigger than getting multi-billion dollar investments from Amazon and Google. And they're going to need money to pay for compute next. So the next place they go, sovereign wealth funds, maybe the public investment fund of Saudi Arabia. Now, that money can help push the, you know, cutting edge forward. However, if you believe there's some national security benefit in keeping this technology, you know, out of the hands of certain countries, do you then allow these companies to go fundraise anywhere in the world, or do you restrict their sources of funding that maybe prevent them

from raising from sovereign wealth funds. What's your perspective on that, Ron John? So my perspective on this is the beauty of the moment is that sovereign wealth funds, because sovereign wealth funds specifically, and there's history here because in the 2000s, I worked in emerging market trading, and a lot of the currency work we did was with sovereign wealth funds, they never invested in this kind of stuff until we lived in a zero interest rate world. So sovereign wealth funds might have some small allocation towards venture or more high-risk assets, but in general, these are gigantic pools of money that we're supposed to invest

relatively conservatively, especially the word pension fund, you know, like screams conservatism. But when at the rates were zero, that's the only place they can go. now these are not like if you're coming in uh anthropic series g at a trillion dollar valuation or what i don't even what is open a i right now probably they talk 80 to 90 billion but we don't totally know until they raise their next round yeah exactly so like it now that there are plenty of vehicles for getting your seven to 10 percent out there in the world at a low risk for these kind of big pools of money, I think the idea that they are going to be able to be tapped for this kind of investment is going to be gone. And I think that's going to be one of the reminders

that we're living in a completely different world right now. And that's why I actually think that's what's been interesting about these flashy Google and Amazon deals. And we've talked about it so much that the numbers are big, but already the cash is dwindling. And that's why cloud compute becomes part of it. But the days of the Saudi PIF public investment fund, pushing money into a vision fund for Masayoshi's son and then a dog walking app getting three billion dollars or whatever it is, hundreds of millions for billions of valuation. I think that's long gone and I think we're going to start to see some pressure on these companies soon. Yes, but if you have all this oil wealth, you got to put it somewhere, you're not going to spray it freely as you would.

Maybe you make a direct investment and that, you know, where are you going to put it? I mean, maybe AI. well no so if you're looking for financial return i mean treasuries and corporate debt are looking pretty good right now uh if you are looking for purely national strategic like national geopolitical strategic considerations then yeah then if you're looking at this money so do you make a law to prevent that i'm syphius the committee for what is it foreign investment in the u.s i think they're going to get busy on this stuff pretty soon Yeah. I think they're definitely going to have their hands full very soon, because I do agree that there's going to be so much around the national security elements within this entire space coming soon, unless the open source movement and smaller models and companies make it an even playing field for everybody. Exactly. All right. Here's one comment before we go to break from Noble Ackerson, saying that they draw parallels from how folks like Chimath made so much wealth in building social media.

platforms only to leave and warn us about social media's influence. And in this case, with the AI concerns, it's like that, but it's even, it's even worse because it's, you know, en route to making money from AI trying to warn us of its dangers and ice out other competitors. It's not a great moment. All right, let's go to break. And then we'll come back and talk a little bit about Jeff Bezos's move to Miami, this ozambic effect and whether it's gone overboard.

And then we'll see what else we get to. Maybe we'll wish happy birthday of the unicorns. It's the 10th birthday of unicorns, of the term, at least. All right, back right after this. Hey, everyone, let me tell you about The Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email

for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less, and explain why you should care about this. them. So search for The Hustled Daily Show and your favorite podcast app, like the one you're using right now. And we're back here on Big Technology podcast. Ron John Roy is here with us from Margins. We're talking about all the week's news. Some news just dropped. It seems like Jeff

Bezos is about three years too late on the move to Miami phenomenon. He posted on Instagram that he's moving to Miami. Of course, spend some time with his parents. But there is another side to this. And this is from Rob Frank from CNBC. Jeff Bezos says he's moving to Florida to be closer to his parents. Another reason, taxes. Washington State has a new 7% tax on capital gains. So he will owe $70 million in state taxes for every $1 billion of Amazon stock he

sells and he sells a lot. Of course, you go to Florida and you're not paying those taxes. So what do you think about the Bezos move to Florida? It's kind of interesting to me, it's like I didn't even realize that billionaires that like announce that they're moving places. as opposed to just acquiring, you know, another property, but maybe the tax situation is what inspires the need to post about it. What we started this episode saying that the ZERP era is over with SBF getting convicted,

but Bezos to Miami sounds like as 20, 21 as it gets. Like next thing you know, he's going to be like high-fiving Mayor Suarez at a crypto conference. And it feels like it feels like we're back. But I will say, our other lesson from earlier in the episode was you can't tweet or post your way through it, and maybe that's a problem. And when this announcement, I was kind of confused, why say it when there's such clear tax implications? Like, no one cares where you're living or moving. Does he think people care? But when it raises all these kind of issues, I do wonder about it.

But to me, there's bigger Amazon news this week. Did you see the FTC stuff? Sure did. This is, I think, and we've talked a lot about the FTC and whether they're going to be successful on this big lawsuit against Amazon. And one of the, out of documents that are unredacted this week, is this idea that starting in 2014, when Amazon launched its advertising business, very small, is at a certain point, in a few years down the road, they're what they call defect ads, ads that were algorithmically very close. clearly labeled is not relevant to the product or from scammers. At a certain point, it was explicitly told that they should accept more defects as a way to increase the total number of advertisements shown and to drive up Amazon's advertising profits. Now, what that means is very

interesting, especially in the case of the FTC and Amazon, because that is a necessary price increase on the consumer. The more advertising that needs to be paid will be, the consumers suppliers will raise their prices and now consumers will have to pay more. My favorite example was if you were to search for bottled water, you would get the result for buck urine, buck urine, not deer urine, but buck urine. I've seen reasonable to me. Reasonable. I mean, maybe Amazon understands that you are actually looking for buck urine.

Then they had simple ones. man big data the data tells the truth about who we are as a people you want you say bottled water you want buck urine but then there's simple ones like if you turd uh typed in a search for laicers it would show you a seattle seahawks t-shirt instead and again like the buck urine one maybe in some circles would not be considered egregious the seattle seattle seahawks example maybe you could say they had some understanding that like uh that sea hawk you search for the lakers you want the seahawks but in reality it was it's clear that their algorithms were labeling these ads as defects and still including them and if you think about right now and we've you know

it's endless myself included the idea of how fast and big amazon's advertising business has gotten and then how that high margin business helps subsidize the e-commerce side of the business and how this whole fly, along with AWS and how this whole flywheel keeps working, it's a reminder that to get there, there's definitely some not above board things that happened that clearly happened. So I think to me, this is a huge moment for the FTC to start. And it was interesting to see how they're going to start dripping more and more of these things. And again, buck you're in. I'm not going to forget that. That's a memorable one. That is definitely a memorable one. I still think the FTC doesn't win, but I don't know.

They've got more and more data and more and more evidence against Amazon. You know, get in front of a judge and you never know what's going to happen. Well, hold on. How do you argue that, uh, no, like willfully and knowingly accepting a certain type of advertisement in order to boost revenue and profits and the overall business as a whole, when that's going to raise prices on consumers? What do you think the argument against that's going to be? It's pretty simple. That's not illegal monopoly maintenance. It's, you know, business practice, just maybe a sketchy business practice, but it's not rising to the level of illegal monopoly maintenance. Like the burden for the FTC is so high that them proving their case is going to be so difficult.

They just don't have the laws on their side. no but if you show that increases prices which it very necessarily does and then that both passes on price increases to consumers but then also to suppliers as well because now the advertising business is growing so suppliers have to buy into that which previously if it wasn't growing that they wouldn't have to compete which then turns the entire search part of your business into an advertising driven one where it's essentially pay to play like i think on both sides of the marketplace you're seeing prices increases. Okay, maybe you have a point and maybe this is why Bezos is moving to Miami is just to sell his Amazon stock as soon as he can without state taxes. Maybe. And hopefully get away

with it for him. Well, for him. All right. Let's talk about this. And he's ripped right now. I mean, let's be honest. He's in great shape. Yeah. He was going to be Miami when you're raped. Exactly. Yeah. This was already, already his home. He's just actually going there. Let's end with this. There's this So Zembic effect that people have been talking about, that these weight loss pills have effectively

put a damper on the potential earnings of anything from snacks to, I don't know, even oil companies because airplanes won't need as much fuel to fly fat people around anymore because everybody's going to be skinny and then therefore airline prices are going to be cheaper. No, this is seriously thinking on Wall Street. and um go on go ahead hold on right wait finish finish and then i'll go okay so this is coming from the wall street journal it's a reputable publication it says the ozambic effect on wall street has gone overboard but it lays it out that um it says it these drugs have led to speculation that gigantic opportunities await those that would benefit from the aggregate weight loss wild scenarios

conjured up by analysts include the notion that junk food companies might pivot to selling carrot sticks and airlines might sell on gas owing to lighter passengers and look at list just listen to this okay sorry listen to this the s&P food and beverage

select industry index has declined 12% over the past three months shares of Kraft Heinz are down 10% over the same period Hershey's is down 19% and Coca-Cola and Pepsi are down on 9% and 12% respectively, what the Wall Street Journal said effectively is, okay, we're going to get to, you know, to the other side of this thing. But just setting up what this looks like, Wall Street Journal has argued this is a real investor phenomenon that they're bailing on junk food and all these other type of stocks because they believe that, you know, skinny pills will make people reject them.

so I yes the fat people on planes definitely when the Wall Street Journal starts writing about that you know we are at a moment and perhaps we've gotten ahead of our skis but I think so I read one piece it was in the Atlantic it was actually from May did scientists accidentally invent an anti-addiction drug and what was so interesting to me about this and this is where I think it's still very very very early, but I was actually talked to a friend of mine who is a doctor, and he was, he's very bullish in terms of overall he thinks this is going to quote unquote change everything, is even addictive behaviors far beyond eating. So again, like junk food and the way it's been manufactured and created, and maybe this is all just kind of a hopeful thing, like is all centered around triggering dopamine and getting people to want more and buy more and buy things. But even think about online shopping or shopping in general is built in the same way. Meta's entire advertising model is still built on dopamine.

Meta's product is built on dopamine. So like if this truly does curb addictive behavior and I think normally associating addictive with like eating a, you know, like just binge eating or. something that's super excessive versus small bits of what is essentially an addictive behavior, even though it's not me opening Twitter again and then even when I'm like, I shouldn't. I think that, if it's for real, and people I trust have said it's definitely for real, it changes a lot of the way products are designed, things are built, the way a lot of the economy functions because right now that's so much of especially the u.s economy is built on exactly

that type of interaction you bet i think we got to get Andrew uberman on here to have a special episode talking about these these uh impact of dopamine and um and how we might be changing that but okay so here's a thing though this is the other side of it um the wall street journal says the market has gotten way ahead of this that these daily these drugs uh are nowhere near to where they need to be. And they cost upward of $10,000 a year per person, putting them out of the reach of the majority of more than 100 million obese and overweight people in the U.S.

So I'm kind of curious what you think about this. Like, first of all, can you explain like why the market would, the market knows this? Why would the market react this way, understanding that the broader impact won't be felt for quite some time, if ever? Yeah, I do agree. I think the market reaction is definitely an overreaction.

And when I'm talking about this stuff and thinking about it, it's still in the like magical, theoretical, exciting visionary, envisioning different futures type of thing, not, you know, Coca-Cola sales are going to be down in Q2, 2024. So I think it's definitely gotten ahead of itself. But I think this is where, again, like, I have been surprised. I have talked to people who I was very surprised who have taken Ozempic or, or one of the, I think it's like semi-glutides or something like that,

semi-glutides. The ads are everywhere, by the way. Yeah, yeah. So I watch a quarter of football without seeing it. I've talked to people who I never would have expected who take it. So at that point, I'm like maybe, and maybe, just just hypothesizing a Wall Street research analyst could be the personality that has felt the magic of one of these Wago be ozambic. And then the moment is one of those things that once you

undersee it and feel it and understand it at a personal level, then maybe you start extrapolating a lot more quickly. But, but, look, I think it's great that we have these tools, right? We have to fight back in some ways against big food. And like, if it's pharmaceutical, so be it. They're using chemicals also. So I think it's good that we have these tools. I'm just interested in the fact that the market is like now such a firm believer that it will go years ahead of

the broad impact. I'm actually curious. now let's just end with this like talk a little bit about the people that i mean if you're willing you why you know you didn't expect them to be on it but they're on it was that just because that they were skinnier than you imagined yeah yeah that's where i was going with that it was it was more it was more a uh defensive weight mechanism rather than an active offensive one yeah no exactly but so it's almost to help you stay skinny so then you're like, okay, then the addressable market no longer is only those seeking to lose weight. But also it's no longer Sam Bank and Fried is addressing a total addressable market of

everyone. It's these drugs are. So yeah, no, that to me, that's what made it more interesting. So yeah, I think to me, it's still very early days. Who knows, maybe there's going to be some insane side effects that come up pretty soon that derail this entire conversation. Remember, two years ago we were all going to be eating fake meat burgers and didn't quite pan out so who knows i trust the technology very interesting stuff all right um at the end of this i'm just going to go short nabisco just kidding but maybe not the worst strategy this is not investment advice but maybe not the worst strategy ronshan thanks so much for joining really great to speak to you every week all right great stuff thanks everybody for being here with us great great crowd live we had to comments

today in questions, which is awesome. And thanks to everybody at home who's listening. Really appreciate it. We'll be back on Wednesday with a conversation with Rob Copeland about his new Ray Dalio book. That should be fun. I'm about to go record that. And then again, Ronan and I will be back next week. We're going to talk about streaming along with the rest of the week's news.

All right. Thanks for listening. And we'll see you next time on Big Technology Podcast. We're going to be able to be.