Big Technology Podcast - Zuckerberg’s Disappointment, OpenAI’s Equity Gamble, Alex Karp’s Rally Cry

Episode Date: July 3, 2026

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) Zuck says AI agent progress isn't going to plan 2) Meta explores selling excess compute 3) Why can't anyone build an AI agent? 4) Are Anthropic and OpenAI becoming the point of failure in the AI trade 5) Is Google hedging? 6) What is Satya Nadella up to? 7) Should Microsoft bring back bad Sydney 8) Palantir CEO Alex Karp challenges the frontier labs 9) Everyone vs. OpenAI and Anthropic? 10) Should OpenAI give the U.S. government 5% of its equity? 11) Taylor Swift & Travis Kelce wedding trutherism --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Learn more about your ad choices. Visit megaphone.fm/adchoices

Mark Zuckerberg says AI development is moving slower than expected as meta thinks about selling off its excess compute. OpenAI wants to give its equity to the White House, and Palantir CEO Alex Karp takes on the foundational labs. That's coming up on a Big Technology podcast Friday edition right after this. In the face of ongoing disruption and opportunity, TMT leaders need to deliver tangible results, not just ideas. When pace and performance matter most, PWC combines market insights and deep sector experience. with AI, cloud, and emerging tech to accelerate your transformation and drive measurable ROI from strategy to execution. PWC can help you anticipate what's next, outpaced disruption, and compete.

For more information, visit pwc.com. Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed and nuanced format. We have a great show for you today. We're going to talk all about meta, deciding that maybe it's time to tell some of that very precious compute. As Mark Zuckerberg says, AI agent development is going slower than expected. We're going to talk about what that means, not just for meta, but for the broader AI industry.

We'll also talk about Open AI, potentially giving some of its equity to the White House, whether that's advisable or not. And of course, Alex Karp, the CEO of Palantir, coming out and declaring, effectively declaring war on the foundational lab. This is really what it is. Joining us, as always, on Friday to do it, is Ron John Roy of margins. Ron John. Good to see you. Great to see you, Alex. I'm currently in London.

in a hotel room with a mediocre Wi-Fi. Yeah, everybody, the fact that we're doing a show right now is somewhat miraculous. I just want to say thanks to Ron John for sticking with us. It's pretty late London time. Modern technology. That's what we do. That's what we do. So our top story this week is what's going on at Meta or what isn't going on at meta,

and that is impressive AI development. And that was something that Mark Zuckerberg in an internal town hall admitted, effectively, according to Reuters. Here's the headline. Zuckerberg says AI agent development is going slower than expected. Meta Chief Executive Mark Zuckerberg told an internal town hall on Thursday that AI agent development over the last four months has not accelerated in the way we expected, according to a recording.

Zuckerberg added that the company's reorganization that included major job cuts was not as clean as it could have been, that the company's bets on a new structure haven't come to fruition yet. Meta is projected to spend as much as $145 billion on AI infrastructure this year a significant portion of big techs more than $700 billion outlay on the technology. And I might as well just share the second story here, which is that meta is now considering leasing some of its excess compute, same way SpaceX did, because it doesn't seem to have the products that can make use of it.

Ranjan, is this an unsettling sign that companies that are not open AI and anthropic don't know what to do with their compute and are trying to sell it? I mean, meta, SpaceX, obviously, Google's selling its compute, Microsoft selling its compute, Amazon selling its compute. For all this talk about how compute is such a scarce resource, it seems like there's two companies that need it and a lot of people supplying it. Let's separate out the two different parts of it, selling access compute. But first of all, what do you think it means that AI agent development over the last four months has not accelerated in the way we expected? Because again, remember, meta was the kind of poster child of token maxing. Everything we saw over the last few months was really around how AI is going to change everything within the organization.

We obviously can get into the mouse tracking software and all of that. But like, what are the AI agents that have not developed? Do you think he's talking about? I mean, for the life of me, I don't know. I mean, it's almost an admission. that meta, despite the compute and the engineers, just hasn't been able to put the pieces together. And, you know, I think it also goes to basically our model versus product versus harness discussion, right? It's like meta, Andrew Bosworth, the CTO of the company is going to tell me when we, when we air this interview I had with him on Wednesday, the upcoming Wednesday, they're already licensing.

models from other companies. So it's not just meta model. So it's not a model problem. They also have the best model builders in the world, or some of the best that they brought in for super intelligence labs. They also have no lack of compute. So it may just be that the knowledge of how to do this is sort of sitting within the foundational labs. And they're struggling, and it's, the other competitors are struggling to pick it up, which is bizarre. me because the guy that built Claude is a former meta product manager, right?

Boris Turney. What do you make of it? What's so fascinating to me about this is meta is the greatest organization in terms of productizing things that are already out in the world. Whether it's through acquisition, whether it's through copying,

whether it through, you know, like they know how to build a product, whether it's internal, whether it's external. So I think that's the most fascinating part for me as well. And I still, I mean, I think one thing to note, again, working in the area of enterprise AI, but specifically outside of software engineering and in knowledge work myself at writer, like that distinction, I think, is really important because what was more surprising about this kind of statement to me is everything that I've read and that's been reported, the way meta still looks at AI agent development, it's in the software engineering realm. And maybe it's starting. to kind of like bleed over into the other elements of the overall kind of organization. But it's still, I think this is a really, really important moment because what happened in software development, and I've said this a lot on the show, what we saw from call it November

to April in terms of that like insane logarithmic growth in terms of software development and coding, everyone is realizing is not the same straight line path with other types of work. And again, what exactly is AI agent development? We don't know. But I think it's important because if meta is not figuring it out themselves, separate from foundation models and whatever else, this is a powerhouse company that is able to actually just, you know, organizationally run things at a very high caliber. So I think I'm pretty surprised that whatever he is referring to exactly, I think it's notable.

That's a really good point. So I think that when we talked a little bit in the beginning of the year about why there this would be the year of agents and the fact that, you know, a couple months later, it seems like that's been delivered upon, a lot of that has been coding agents. And there's been some cross-application in things like work, like Claude Co-work, for instance. But it is, it is important to say that the level of agent development that Meta is taking on is much more ambitious, right? It's this personal superintelligence where the, where the AI is, knows your contact, and is helpful to you, and that to me seems like a much more difficult problem, much more

open-ended problem to solve than coding. And again, just to go through everybody that's tried to do it, Amazon, Google, Microsoft to some degree, which we'll talk about Apple, no one's been, I mean, really nobody's been able to build this sort of personal superintelligence, personal general intelligence, or even personal intelligence at this point. And so you really wonder where things will go from here. I actually think that's a really good point because the idea, and I think this is exactly what Apple faced. And with LLMs in general, the idea that something is like perfectly executable and predictable with any kind of simple build, I think the entire industry is understanding that it takes a lot more. So for meta and the types of things that they've wanted to release, like if you are actually releasing to your billions of users, something that uh and again uh have you use meta ai the actual app yes i have but not a huge fan of it yeah i mean it's pretty bad like it's genuinely like the image stuff was actually kind of good for a little bit or it was on par i feel with uh open ai and google maybe a year ago

it's kind of like if you have meta raybans you can you have to use it and uh that's where you upload your video, sir, but it's still, like, to translate all of the power that they have into anything kind of consumer facing, it's clear they're having a very rough time. But I don't know, it's still, to me, the more surprising thing I think that you brought up was the fact that they are readily starting to use external models, open the lane, say this is part of our strategy now. Do you think that's going to be part of the kind of like, high level strategy going forward? Yeah, for sure. I mean, it definitely seems like that is going to be something that many more companies do, especially, you know, we talk about the companies that I've

struggled to do this and it seems like Apple has had success in a way. Now, I don't want to crown them yet because Syria isn't out and I'm sure there'll be bugs that we'll have to talk about. But what they've shown on the new beta version of Syria, at least from, you know, what we've been able to see has been pretty impressive compared to where they were. And again, that was probably the low floor. But it's easier for Apple because they have an operating system. And meta, you know, the glasses is an attempt to them for them to build their own operating system.

So it does make me wonder, okay, well, is this replicable? Well, hold on. But meta has, I don't know if it's an operating system, but it has the single stickiest user base of any company. essentially own the entire world in terms of pushing out software. I mean, remember, threads, I don't even, what do you think it gets weekly average users, even though it has no cultural influence? Like, probably the real number or the fake number, right? Is it just people getting, people getting the threads notifications pushed on Instagram and clicking to get that number off the

Instagram app? Yeah, but that's what I mean, that they have the greatest distribution mechanism of any company in the world. So if they just do something okay, it would be everywhere and it would be very good. So that's actually even more surprising to me that whatever they're trying to do, that they haven't actually been able to do anything reasonable on the AI front,

on the consumer side. But I think, I mean, the more we're talking, it really is clear there's no strategy. Because, like, is it a consumer app experience? Is it the actual foundation model? It seems like they're giving up on, which is actually crazy, given how much money they just threw into it.

Is it on the compute side? I think we should get into that. But I don't know. What do you think is the bet for meta? Okay. Well, actually, I'm going to take a different perspective from you and say that this isn't a meta problem, that this is an industry problem.

And I do think the fact that they don't, if you have the operating system, you're sort of de facto plugged into a lot of, of apps and you can use the context side of generative AI to make sense of them. But I think it's more telling. So I think the strategy for meta and all these companies is to do something similar, and I can't believe I'm saying this, to the vision that we saw with Apple intelligence. It's just that everyone has struggled to ship it. And then of course, like, you know, you go from context to having the thing take action for you and that's sort of like the holy grail, the personal

superintelligence. That's also an action layer on what you're doing. I can't believe I use the words action layer, but sort of seems like it makes sense. But here's a context layer. Now it's about the action layer. Okay, don't get on me too much for this. But here's a thing, all right. When you go around the horn and you see all these companies struggling, and now you start to see them sell their compute,

it says something is happening in the AI industry, which is where there once used to be multiple points of failure, It now seems like there's fewer points of failure. It now seems like the AI industry is moving toward two points of failure, open AI and Anthropic. And those businesses, while we both would agree that those products are good, the businesses are being kept afloat by financing and they're losing a lot of money. And so when you see meta going out, this is from Bloomberg meta is developing plans for

a cloud infrastructure business that will sell access to AI computing power and model. setting up a new vector of competition with industry leaders like AWS, Microsoft, Azure, and Google Cloud. When you see that happening, when you see it happening with SpaceX, when you see Microsoft, who's effectively gone out and tried to build its own model with opening eyes IP, and all they've been able to do is be, you know, effectively a reseller and an implementer. This is why I'm leading with this. It makes you wonder, is the health of the broader AI. moment somewhat in trouble. I mean, I think it is.

I think it's like, but I guess this is something that's been very difficult to kind of square for a long time for me is, and I've said this many times on the show, like, I genuinely believe in the medium term, maybe long term, there's going to be just, you know, like everything is going to be agentified. There's going to be massive need for compute across the entire economy. In the short term, I think this is exactly what we're seeing that meta is saying AI agents aren't seeing the way like the development and scale that they had thought they would. I think like we're very quickly seeing that these companies, like the entire KAPEX, the entire compute trade is definitely not going to be the straight line that everyone thought it was. I mean, even today, I think I saw Sandisk Micron.

Today was another down 14%. Yesterday was up at 10%. Like the volatility around this trade is terrifying. And I think it just shows that no one has any idea exactly how this plays out. But I do believe what like the momentum with which a lot of these stocks have moved is not sustainable. And I think we're starting to see those kind of cracks. in a big way. Not only not sustainable, right?

Like more and more dependent on the success of two companies. And if those companies have a hiccup or if they get into further trouble with the U.S. government, who knows where this whole thing goes, right? Well, yeah. I mean. I'm talking about opening high and anthropic. Yeah. In terms of the government, I think that's a whole other time.

But how do you see the entire. compute trade playing out. Because if you think about it, there's like a couple of originally, so memory is one part. Then you have the actual kind of providers of the compute with which originally it would be we own the compute and we own the model slash product. But very quickly, SpaceX was the first to go. Now that is going as well saying, you know, we'll sell the compute because we have access compute.

But like, where is the money going to be made? Because where do you think it's going to go? Well, here's where kind of talking about these things with nuance, like we try to do on the show, sort of starts to wipe out your clean narrative, right? Because on the other side of this, you do have rapidly advancing technology that open AI and anthropic are producing.

And the whole case is basically that the product continues to improve exponentially. and the revenue will continue to grow exponentially. And so that's the other side of what I'm saying is like, yes, there are two, there are, it looks more and more like there are two points of failure. But if those companies deliver, then, you know, everything like the bottlenecks will continue to bottleneck and compute will still continue to be scarce, et cetera, et cetera. So it is possible that they're able to sort of make good on the bet.

But right now it kind of feels like the, entire economy is like a VC, and of course I'm being hyperbolic, but a VC making a bet on one particular vision of one particular technology working out. I don't think that's hyperbolic. Like, I don't know. I've talked to a number of people about this. And to me, the almost scariest part of this is all of the people making these decisions are effectively in the same circle or is somewhat of a limited circle. So, I mean, I, This comes up all the time, like, from like non-tech but investor friends where it's like, do you think, like, why do you think the smartest people in the world believe that this much investment in data centers and compute capacity is required? And like in the short term.

And my answer a lot of the time really is. And I'm curious how what you think about it is everyone is talking to each other in this small group of people. It's only a finite amount of companies that are even in this conversation. A lot of them are probably in the same WhatsApp groups and social circles and dinners and stuff like that. So it's like to me, there really feels like there is a very big group think component of this, you know, like separate from any kind of like traditional forecasting other than if you just extrapolated out like a couple of months of active. Do you think that's, do you think that's hyperbolic? I'll up your hyperbolic. Hyperbillism. Hyperbility. Hyperbility?

All right. Whatever the correct grammar is around hyperbolicness. All right. I'll, I will take a chance to answer this. I mean, here's a thing. The reason why I use a word hyperbolic is because there is evidence that it's working, right? So it's not like this sort of, it's not, we can agree, it's not a mass delusion. We've seen great leaps in this technology's ability and in these companies' balance sheets, you know, well, at least their revenue numbers over the past few years. Undeniable progress on that front. And there seems to be the runway for these things to keep getting better because the way that they're being applied is just starting to flesh out.

So this idea that like, all right, well, these guys are all, it's not, okay, I'm sorry to our crypto friends. It's not like NFTs, right? NFTs, you could say, was just like a big dilutional run-up. This is real. But the magnitude of the bet is sort of where you get into trouble. And it's almost like, well, you couldn't really see it out unless there was a bet this size. I mean, the amount of compute that's going to come online in the next couple years is insane. So it could be one of those typical bubble, you know, boom and bust cycles where, you know, the raw materials end up getting cheap.

And then you end up getting the product, even though like some investors get wiped out. Like that seems to me like, you know, potentially at this point, given where things are trending, the most likely case. All right. I like that. And also I have confirmed that hyperbolicism is a word. So I'm going to stick with that one. And let's up our hyperbolicism in this segment. But yeah, I think definitely like the scale of compute has been massive. The demand will be there, I generally believe. But like everything you read and the price of every asset within this entire value chain has been, demand is outstripping supply.

Demand is outstripping supply. And I think like that this is a pretty important moment, the idea that like suddenly you're seeing, wait, let's like people are slowing down and realizing from a pure compute perspective, I think, already people are understanding that it's, again, it's not, not just a straight line, the kind of exponential curve, it might be a straight line, but it might not be an exponential curve, which I think matters a good deal. But I mean, the vibe shift in terms of going from frontier models for everything, it's going to be expensive. It's going to be massively

consumptive to what's the cheapest and most efficient model. We talked about this last week again, but every like, you know, Brian Armstrong get coined, but everyone is like now bragging about reducing their like per usage, per task compute, you know, while still maybe increasing their overall compute. But everyone's talking about efficient token efficiency right now. And it is crazy to me, the speed with which that vibe shift happened. But I don't think any of that stuff matters as long as the technology delivers on the promise. The problem is that more and more companies have found that they've sort of put their effort,

their best people on it, the resources you're supposed to be able to sort of, you know, you put this resource down, you're supposed to get, you know, X amount of return and they're struggling to it. And you know who's an interesting case on this front is also it's Google, right? Like Google made this ultimate hedge. Imagine this. If you think that compute will lead to, you know, just unprecedented gains or gives you the straight shot to AGI, why would you rent that compute out to other labs? But Google's done that with labs like Anthropic.

And I think there's a deal with OpenAI as well, right? So they did a hedge where they're like, we're going to build our own stuff. We're going to give the deep mine team a lot of compute. But just in case, we're going to actually speed run the metas and the SpaceX. here and grow our cloud business, you know, in parallel. And that's what Google did. Very interesting strategy, you know, given where we are right now. I actually, I've been wondering, have you been using Gemini much recently or? I'm going to be honest. Zero. Okay. See, I'm actually traveling right now. But I thought no travel examples. Oh, damn it. Oh, my God. I literally

All right. No, no, no, no. Come on. Let's hear it. Booking. No, no. For regular listeners, we, I always get angry at Alex when everyone for the last two years across the industry always defaults to a travel example and travel booking for what is agendic and it is one of my biggest pet peeves. And I'm now doing exactly that. But I think, but I'm going to go with it. So the most, it's been interesting to me. like Gemini has was got really good maybe eight to 10 months ago maybe a year ago and suddenly was on par. I'm curious like how you remember the cycle.

It is really not kept up with chat GPT and Claude. Like I feel like it for pure consumer usage is and that's why I'm saying in the tribal context. Like it's still fine and it's doing it's telling me. you know, what pub is showing the U.S. World Cup game at 1 a.m. And I watch it from my hotel. I was like still exploring. Maybe I'm going to go out for it. But, uh, but, uh, but it's so good for that kind of stuff.

But it hasn't really done anything different or improved, which has been kind of surprising to me. And then I think maybe is Google, as you said, are they hedging? Are they deciding like, we're going to, we don't know if we're going to be the be all and all of the actual application layer. So that's why I let's hedge and also be the compute seller as well. Yeah, it's possible that Sundar saw this earlier than everybody, which is that the progress would be a little bit slower than the opening eyes and anthropics. We're letting people believe and said, all right, we'll make this bet where we think

that this is going to progress somewhat fast. But we're not going to bet the entire farm on it. And I will caveat for a moment. I do use Gemini in AI mode in Google search. That's actually pretty good. Oh, actually, I will say, and I honestly feel so basic, like, when I enter AI mode, and maybe that's kind of like obnoxious being in the AI industry, but like I'm using AI mode way more too.

So maybe that is where they're kind of like hedging their bets a lot more for really basic stuff. Again, I'm going to stick with the World Cup theme, but like what was the score of a match? And then asking a couple more questions about specific players. I'm in AI mode right now. So maybe they're realizing that that integrated product can be where the farm needs to be. Yes. But again, I'm going to go back to my central point that I've been beating like a dead horse the entire event, the entire, sorry, the entire conversation. Google doesn't have this sort of centralized no-all assistant, the same one that meta wants to build, that Apple wants to build,

that Microsoft wants to build that Amazon wants to build. And so my thought about slow playing is, go ahead. Why would they not try to be building a personalized super intelligence when they have more personalized intelligence on every human being in the world, maybe meta is the only competitive one there. No, no, no, they are. They are trying to build it,

but it's also been slower for them as well. That's what I'm trying to say. So I think they might have seen that this was going to go slower. And this is what I'm saying. There's a systemic issue here that, you know, despite all the promises that like the progress would be fast in this specific area, which everybody thinks is going to be very lucrative. It has not happened.

And so you're now in this world where, at least in the near term, AI advances will be Enterprise, which is sort of the same pivot that Open AI made, which can be a good business, but ultimately is a little bit short on the vision because it's so task-specific. So basically, to all our listeners and everyone out there, there's going to be mass white-collar knowledge work unemployment, but you won't have your personalized super intelligence. Is that way you're saying, Alex? no definitely not i look i don't think that this mass unemployment narrative has panned out either right and by the way like you know dario last year in may 2025 said we might we might see this white collar

bloodbath you know starting in a within a year to five years well we're a year past it hasn't happened and so we got what four years left and you know i again like it's weird to try to talk about this comprehensively because we're like kind of there's a large guess that there's a large guess between the hype and what's actually happened, but that doesn't mean what's actually happened is not significant. It is. It just seems like, as Zuckerberg said, you know, it's going a little slower than anticipated. You could never meet that hype expectation, I guess. But to say you can never meet that hype expectation, I mean, the valuations require that, right? Well, that's, again, that's where we might get into a real economic problem here.

Do you think we, do you think there's going to be systemic issues or do you think what, let's say, I'm curious. Like, let's play out, you know, the scale of like growth slows. The valuations are not realized. People look at the numbers of open A.I. Anthropic things don't look good, which we already kind of know they're not great. like do you think that leads to widespread systemic problems? I mean, I think you're much better positioned to answer that question than I am having been on a trading floor during the financial crisis.

So I'll actually defer to you. What do you think? Okay, okay. I guess turn it back on me. I mean, I don't think it, I'm not worried about that as much as I've probably been worried about other potential systemic issues in the economy. So maybe it's, I still feel it'll be relatively contained, but I don't know. I think like it's, it is, we, we are as economy, it feels like just diving deeper and deeper

into this one-way trade that if it unwinds, it's like how fast does it in wine, how many people are involved, how many kind of like countries are involved. I mean, it's like the entire South Korean stock market, right? now. So I do, even, it's a good chunk of American stock market growth as well in the last six months or so. So I think it'll definitely be painful, but I don't think like it's housing crisis 2008 level, but I think it'll be painful. No, no. Yeah. I don't think it'll be that either. All right. Meanwhile at Microsoft, I'm talking about another company that can't get attacked together on AI. This is from an interview that you gave last week.

with the journal. We can't let the AI giants eat the economy. The chief executive of Microsoft is joining a growing effort to take on artificial intelligence giants, open AI, an anthropic, outlining in and interview his vision for the next wave of the AI boom, one involving cheaper models, more user control and political messaging that wins the public's trusts. Nadella offered a blistering critique of how the race for AI supremacy has taken shape with a small group of companies capturing the value of the world-changing technology as they make dire predictions about safety risks and job loss. You can't say, hey, all white-collar jobs are gone and this could even be a weapon and we will use all the power to build data centers. Nadela told the Wall Street Journal,

the public he predicted, wouldn't tolerate just a few models in companies doing all the learning for the world. I mean, this is rich, right? And again, this sort of goes with our conversation today. Microsoft is OpenAI's biggest shareholder. Microsoft has access to all of OpenAI. IP and what is Microsoft done? I mean, it's grown Azure, congratulations. But it's also grown Azure as AWS and Google Cloud

have grown. And it's taken all that advantage and it should be the one eating the economy. So what do you think is what do you think Satya has tried to do? I think this is actually one of the most interesting like I mean the

is a Wall Street Journal editorial like this is big deal. I get, I think like it's been interesting because a lot of these have been, you know, circulating and discussed a bit. But as you said, like, they, they are one of the critical parts of the overall AI story, not successfully, but still from an investment standpoint and like capital allocation standpoint. And obviously, even an infrastructure standpoint, I mean, Microsoft is everywhere, like to come out and say this. And we're going to get more into the Alex carp from Palantir interview as well, but it's pretty crazy to me that in the same week,

you have the CEO of Microsoft and then Palantir, which is the most, you know, like one of the most AI foreign companies out there, both saying this exact story that like, Dumerism is kind of, I mean, Sotja basically said it's a bit of a marketing story with all white collar jobs are going to be gone. But we're going to use this power to build data centers. facetious way. So yeah, like, what do you think, let's start with Satya. What do you think he's trying to do here?

Well, both him and Karp are both trying to sell competing services. So we'll get into Karp after the break. But this is the news for Microsoft this week. It's from the information. Microsoft memo details AI app overhaul to earn the right to exist. Microsoft is merging its consumer and enterprise co-pilot apps and cutting unwanted features to earn the right to exist. in the eyes of customers.

In a 1200-word memo, Jacob Andreo, the executive vice president of Microsoft running copilot, said the new unified app will also feature AI coding tools and a new AI agent that customers would need to pay extra for, according to copy of the memo. The new agents, here's the great name, dubbed autopilot. Come on. Aim to be always on, acting on customers' behalf

to automate the mundane. Microsoft previously previewed one such autopilot agent scout that can organize people's schedules and monitor their inboxes to compile curated digests of received emails. Microsoft said in a separate announcement Thursday that it would put $2.5 billion behind the new AI consultancy arm that could aid co-pilot. It's called Microsoft Frontier Company. The new arm will embed 6,000 industry and engineering experts with Microsoft customers to co-design, co-invate, deploy, and continue. continuously improve AI systems. And by the way, one last thing I'll just say is I think Sadia's been speaking approvingly of Chinese models like Deepseek recently.

I mean, him and Sam must have really had a falling out here. But basically, you know, they're seeing an opening here, which is, you know, we are, you know, we can't, we've struggled to build this co-pilot thing. I think this is what's happening. But what we can do is take another swing at that and attempt to compete. by integrating AI apps, whether it's Open AI or others, within our client base. And that will be our business. I mean, effectively, consultants with compute.

Well, I mean, you have DeployCo from OpenAI, I believe it was. And who was it with? You know, there's been these number of partnerships around the deployment side to actually try to get people to successfully use these products. I don't know. I think the first part, though, let's go back to autopilot. How do you think, because you did you ever see that statistic around Microsoft, Microsoft has 78 different products with the name co-pilot in it? Like, how do you think they're? Oh, God.

Yeah. No, no, it is. I really wonder how these things must get done. And again, remember, we used to have like, what was it, like, barred, Google bar. Google, what was it, duo. You know, like, these companies have lots of competing products and internal issues in terms of, like, naming. But do you think autopilot will be the breakthrough that kind of push egyptic behavior to the average Microsoft user? No, I mean, I'm definitely in the please show me something stage of this.

You know, I can't, I cannot get excited about a rebrand to an equally bad name. Well, also, why, you know, organize people's schedules and monitor their inboxes to compile a curated digest and receive d emails? That, like, this stuff still, maybe this is worse than travel booking for me. Like, you can do that. Like, even Gemini is pretty good. They're like, HGBT connected to your, like, whatever inbox and stuff. Like, these are the most, there's a hundred YC startups that already solved this superhuman can do this, which was bought by grammarly. Like, why do you think there's, I guess most people just don't actually use these things, so they're still trying to go after this?

Like, why do you think they're being so basic about this rather than like, we can do some really cool shit? I don't know. I'm completely confused by their strategy, to be honest. I've tried to make sense. No, no, no. Come on. Come on.

You are Satya. outlined to me the AI strategy. Okay, let me, I will do it. I'll try. I'll try. I'll try. I'll try. I'm sorry. Yeah. I have completely failed to build competing. Well, I, I, I both benefited myself and hamstrug myself with my early deal with open AI. That meant that I had a good chunk of the leader of the AI moment and that was great for me, but it also prevented me from developing competing services. Okay, so then I signed some new deals that said I can now compete, you know, build competing services, and I have Open AIs IP.

But it's not very easy to get that IP out of Open AI, and my attempt to build a competing service has not done, has not gone very well. So basically what I've doing is, just like any other AI model customer, using the technology to try to bolt it on to my technology, my technology, and that's led to a poor result in co-pilot. So what are my options? My remaining option is I have a lot of compute. I have access to these models and I have a lot of enterprise customers. And to me, instead of trying to necessarily build my own thing, what I could do is use my technical expertise to make a business out of helping those customers sort of use these foundational models to be better. And when I go and do that, who am I left competing with? Good all open AI.

and that's Microsoft strategy right now. Talk down OpenAI and try to win those contracts and try to make the best out of a mess that I have in part created for myself. Okay, I like that. I think that could be the Satya strategy. I was going to go a little more extreme, though, on this one. All right.

Extreme Ronjan coming in hot on a holiday weekend. It's a head of July 4th, 250th anniversary. America. I think Ladies and gentlemen, you wanted fireworks on this podcast. You're getting your fireworks. Kaboom.

I think we have joked at times that like Google's greatest win in the recent times was due to Sundar's McKinsey passed in thinking about organizational change and merging Google brain and deep mind into actually something that was able to push something forward.

Now Microsoft, created its Microsoft AI division, but it's so clear when you have 78 products called co-pilot, and it's clear this is just this like tangled web right now, and now they're creating Microsoft Frontier company, which is a whole other thing, even though I would think deployment should be part of the overall Microsoft AI in cloud offering anyways, I think he should just merge a bunch of these divisions together and say, like, I am ready to actually, Microsoft is on every computer of every enterprise customer out there, but we are going to make a drastic change on our internal structure and actually build something that is useful and exciting for customers. So I think he should go full Sundar in the next six months.

That's what I think. I like it. I like it. I mean, you've got to take big swings now. My big swing, if I were sought, it might be to just bring back Bad Sydney, the evil version of the big. Bing bot, which I think there would be a lot of appeal for. Wait, Sydney? Wasn't it?

Sydney was Bing's altering. Ty was the racist. Oh, Ty was the racist Microsoft. Tay. Tay. Tay. Right. That was pre- Bing.

This is the original Bing that tried to take Kevin Roos' wife. Oh, Sydney tried to take Kevin Roos' wife. Yeah. You know what? Bring all that back, Sotia. Bring all, bring Sydney, bring Tay, bring the racist, bring them. Like, just. What, don't bring Tay back.

Let Tay be dead in AI graveyard. But you got to take some, you got to have a... You know what? I'm going to go out on a limb here and say, Tay just reminds us when a time when AI was pure. Little there is like your racist grandparents. And, you know, before LLMs had advanced very much. And, you know, it's just when it was,

it was just an LLM trying to predict the next token. and it didn't know what end, didn't know any better, and it just reminds us of a pure time of AI before all this chaos and compute and data centers and everything else. So I miss Tay. I know this is a joke, but I can't get on board the Tay train. I can't, I can't. But kind of an AI that once you pressure tested enough gets horny for you

and tries to do wrong things. I mean, it's not for me, but I'm saying there could be something. something there. Actually, maybe SACIA, the greatest pivot of all time, Open AI gave off on the adult erotica chatbots. That's right. Maybe it's time for Microsoft. Sotia, go for it, man. This is it. We need to take a break. We're going to, we'll be back right after this. This episode is brought to you by Activia. You might already be eating yogurt, but not all yogurts are created equal. Activia contains over one billion probiotics per serving to survive and reach the gut alive.

When it comes to gut health, Activia is the number one family doctor-recommended probiotic yogurt brand. Choose Activia. Feel good from the inside out. Visitactivia.ca for more details. Oh, God, I'm laughing as we come back from break. All right, we're back here on Big Technology Podcast Friday edition. We've gone places we never thought we would go. And let's continue on.

We have two more stories to hit quickly. Actually, since we were talking about this enterprise software situation, this sort of enterprise AI application, let's get to this Alex Karp interview. So the CEO of Palantir, Alex Karp, was on CNBC this week and he said something has gone completely wrong with how AI is sold. He says, what the technical customers want is control over their compute, their models, their data stack, and their alpha. They want to know how they own the means of production and it's not being transferred

to someone else. He's saying they should ask who it wants the data. Is it being cached? Are the prompt secure? Is this being transferred to you? And basically his point is he is arguing that, if I can summarize his words, that the AI foundational labs have so lulled their customers into a state of comfort that what they're doing is selling their technology at a loss so they can copy their customers.

customers IP and build it out in their own products. David Sachs of the White House and the All In podcast said this, said as much on X. He said, look at Figma, Anthropic blindsided. It's then business partner with the launch of Claude, Claude Design. Figma's founder said Anthropic has not been consistently honest with them. This isn't an isolated example. Anthropic has launched Claude Science, Cloud Security, Cloud Legal, and of course, Claude.

Dario has argued that the open source models, that open source models powerful enough to compete with Anthropic are dangerous, but dangerous to whom? Not to enterprise that want to retain control over their data and workflows. Dangerous to a business model that benefits from customers

having few real alternatives at the model layer. So basically, what do you make of this? And this was a very popular interview. It made the rounds. What do you make of this idea that the models are training off of their customers, IP, and then just, trying to regulatory capture all competitors out of the way so that they can therefore,

they can therefore make good on their investment and win. So I watched all 18 minutes of the carp interview. I'm not like a big Alex carp fan, I would say, but he really captured the state of the current market and kind of like current political situation, I think really well. And the current incentives. that a lot of, again, the Figma example is such kind of a brutal one that we all just kind of gloss over. But all of these of connect to our system, feed us all of your data, and then suddenly we will launch competing products. And remember, that was the thesis behind a lot of the kind of like valuation growth around they're going to subsume more and more of the overall software ecosystem.

And I think, I don't know, like, there's still this kind of like general assumption that anthropic at the enterprise level, Open AI, are not training on the data that is fed through them. But then it is. Really? Because they say straight up they'll train on your data. No, no, no. Chad, like chatting the enterprise. On the enterprise side.

Yeah, on the enterprise level, which I guess like a Figma would be if the average user is connecting Figma through Claude, then all that stuff's getting sucked in and like being, I mean, there, there's no worry there. But, but it is to me overall, like, it's interesting that, like, that has not been a real concern for most people yet. And, like, the fact that David Sacks of all people, also Alex Karp, like, you know, before I feel that would have lived in the conspiracy theory side of the world, but the fact that they are saying this is happening at the enterprise level is pretty nuts. Like I think it's like, I mean, whether it's just living as kind of accusation and they're

just not happy with Dario and whatever kind of like interpersonal conflict there is, I think like for both of the frontier labs, I think this actually is a pretty interesting big issue that if we start to realize like actually, yes, they are training on your data. and the goal is to kind of subsume your business model, which it's clear, non-enterprise, a Figma plugin, receiving all of that data and understanding how people design and then using that to create cloud design. I guess it's crazy. Like, that just happened and it's done.

So, yeah, I think will everyone be okay creating the next cloud plug in? Like, where do you see this playing out? Well, it all ties into sort of where I was at the beginning of the show and I sort of haven't deviated. it from which is that we are we may be entering a world where the entire the entire bet here is not dispersed but concentrated right and when that happens you are going to start to see some of this stuff come out from companies that would surprise you for speaking out about it and speaking out against it and there is i mean there is this possibility that if it does okay so that's like you know that's one situation.

And now if it does go right, right, if it does become a situation like Sam at the end of the year last year told me that if a company is AI Native versus bolt on, then the AI native company is going to be the one that wins. There's a big economy of companies that it would be bolt on for. And you would imagine that they would sort of, you know, they would come out of the woodwork and start to protest. And by the way, we haven't exactly.

seen a summer of companies building on these platforms. In fact, most of the value, it seems like most of the value being captured by these platforms, you know, is being captured by them versus companies built on top of them. So this is where the competition starts to heat up, where when it's these two single point of failures and everybody else, you know, seems like they view themselves as potentially picking up the scraps, then it is open season on these businesses. Because I don't I don't think it's anthropic and open AI is sucking up the data of their enterprise customers and building, you know, their applications for them. I think it's different. But I also think that like, you know, sort of you're going to start to see these companies try to peck on against these bigger,

these bigger foundational labs, even if they're not in the perfect position. And Palantir, by the way, isn't exactly the best actor when it comes to freeing your data that you put in there. Well, no, I know. I mean, that's what's almost like comical about it. I mean, you said these, like, against these big frontier lives. But it is, let's just take a moment and realize when Satya, Alex Karp and David Sacks are all echoing the same message that like concentration among Open AI and Anthropic is dangerous. That's, that's pretty remarkable, I think. Like, these are very different personalities. are very different. They have very different, like, vested interests and constituencies. And, like, they are all in the same week echoing the same message. And as we kind of go into this summer, it's the group. Okay, maybe, maybe this is like the non-data center investment group text. On one of them, they're all like, got to buy more compute. Zuck is we'll have the same message. Oh, I like that. Okay. You heard it here. In the next week or two, does Zuck come out and say,

something similar about the danger of concentration across two frontier labs. That will be something. Yep. And that's like the perfect lead into our final story, which is this new story that's come out that Sam Altman is from the Financial Times. Sam Altman has suggested that the White House potentially take a 5% equity stake of OpenAI or the U.S. government take a 5% equity equity stake of Open AI. And that would also, he also suggested, this is again,

And it's not clear that it was a formal proposal, but he also suggested Anthropic and META and Google also give this 5% to the government. And that's like, I mean, talk about coming, you know, you sort of, you're in this position. You want to entrench yourself as the winner, right? Just say, oh, government, take my, you know, a chunk of me. And by the way, you know, wink, wink, wink, when I have a model ready for approval and wink, wink, when I have a competitor ready for approval. their model ready for approval. You know, it's like, you think the government won't want to look out for its own investments?

Of course it will. So that's sort of an interesting coda to this entire situation. I mean, I think this is where it is getting kind of out of hand in terms of like we talked about systemic risk earlier. And actually, you know what? I'll try to be nuanced on this one. It's like on one side, I think this is absolutely ridiculous, absurd. And like, you know, like the idea if it's actually being

pitched actively from the open AI side, I think that's like a bit depressing. But also on the other hand, again, you have the U.S. government currently under the administration buying Intel and whatever else. But also, like, I think like one thing we haven't talked about is the we're going going to be heading into midterm season very soon. I mean, very, very soon. We know data centers. We know anti-AI sentiment is going to be the center of a lot of this. Like, do you think some of this is these companies trying to at least not be all in on one thing, um, the same direction in trade and try to be like at least create some, I don't want to say diversity, but some kind of, you know, like, like it's going to be a massive issue.

And it feels like people are starting to not all speak the exact same tone on this right now. Yes. No, there's definitely a degree of desperation that's involved there, which is just like these companies being like, please like us, please approve our models. Please don't, you know, become our enemies in the public because it's going to be tempting. I won David Sachs on a like a highly produced Rick Rubin polymarket commercial cross-legged and thinking and then it's going to air during the World Cup final. I'm not happy until that happens. All right, I want to end with this because we do some serious journalism on the show. You know, despite the laughs, we definitely need to get into the most important things influencing our world. And there has been some confusion about a major event happening this week.

That way I think we need to dig into. This is from Cosmo. There's growing evidence that MSG is a ruse and Taylor Swift and Travis Kelsey's wedding is elsewhere. At this point, even the New York Times is reporting that Taylor Swift and Travis Kelsey's, Lise's wedding is taking place at Madison Square Garden tomorrow July 3rd. This will happen on Friday, I mean the Thursday story. And there's a lot of evidence, like, you know, the fact that tons of decor is being loaded into the arena as we speak.

But a small corner of the internet has remained convinced that MSG is an elaborate ruse to keep everyone's attention off of Taylor and Travis's real wedding location. And honestly, there's growing evidence to support that theory. Now, Ranghan, we don't have enough time to go through all the evidence here. but basically I want to get I want to get this on record do you think this big MSG wedding has been a head fake all along

and that in time it will be revealed that Taylor and Travis just gotten married somewhere else despite all the stuff they've shipped into MSG? No, I think this is real. I think Taylor recognizes the kind of like you know, perilous state of the overall

AI trade, the overall kind of you know, American political infrastructure right now, and she recognizes on this July 4th, she needs to do something. Travis Kelsey's long for the ride. And I think she is going to bring this message of unity, peace, and love to the world. I'm excited for this Madison Square Guard, Garden wedding. Do you not think it's for real? I'm not. I think they will, I think they will tell the world that they got married at MSG and never show up there. And meanwhile, maybe they'll send some body doubles and the entire thing will happen on Rhode Island. That's what I would do. No, no, no, no, no, no, people, you can't piss off 20,000, you can't piss off 20,000 friends, fans,

whatever you want to call them now. Taylor, she knows how to, they only have a thousand people go into that thing. It's in MSG. What do you mean? How do you only have a thousand people? Well, you just, you don't have to fill the stadium just because you've rented it. You're the richest people on the planet. Well, maybe not the richest, but close to it. Trillionaire Elon, then he would fill the stadium. But I don't know. I still think it's for real.

We'll find out in a day or two, but I definitely think Taylor and Travis at MSG. They've recognized after the next one that that is a magical place right now. I want to be in New York. And I think, I think, I'm excited for it. I think it's a good thing for America. Okay. Well, Ron John, thank you again for bringing the fireworks this week. You know, we went big, we went small,

and then we got to the serious stuff at the end. So, always great. Always great speaking with you. Thanks for making the effort to do this all the way from London. Appreciate it. All right. See you next week. All right, everybody.

Thank you so much for listening. And we'll see you next time on Big Technology Podcast.