Daybreak - Daybreak Special: Hey Siri. Is Apple late to the AI party?

Episode Date: June 21, 2024

At the Worldwide Developers Conference, or WWDC, almost a week ago, Apple made a very important announcement. It launched what it calls 'Apple Intelligence', which is basically an umbrella term for all of the new generative AI features that will be available on certain models of the iPhone, iPad and Macbook. It was a revolutionary announcement because with it, Apple has finally entered the Gen AI race. What took it so long? 'Daybreak' hosts Snigdha and Rahel speak to The Ken co-founder Rohin Dharmakumar in this special episode. P.S while you are here, check out the latest episode of our early careers podcast 'The First Two Years', aka TFTY. In it, host Akshaya Chandrasekaran talks about how to fight for your next promotion. 

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the same. secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they managed to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into.

to the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert, as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts. or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode.

Hello and welcome to another Friday special episode of Daybreak. I'm Snigda. And I'm Rahil. And once a week, Snigda and I break away from the regular format to come together and talk about things in business and tech that interests the both of us. You can think of this as the TGI Friday's version of Daybreak. Right.

And it won't just be us. Depending on what we are talking about, we will also be bringing in a bunch of really interesting people onto the podcast. In this episode, we talk about Apple Intelligence. We were joined by the Ken co-founder and reluctant eye sheep, Rohan Dharma Kubar. But before that, here are some weird things that people got in their online delivery packages. It's been a very weird week, no, for online shoppers in India. Yeah, like some of them have found some really unpleasant things. in their deliveries.

And all of this happened within a span of one week, Zika. Correct. Okay, so let's start at the top. There was this Mumbai-based Zepto customer.

Yeah. Okay? He's a doctor. And one day, he wanted ice cream. Okay? Okay, normal enough. Yeah.

So he orders a cone from a Pune-based ice cream called Yamo ice cream. Yeah. Okay? On Zepto, right? On Zepto. And as he was eating it,

yes. This is quite disturbing. fair warning he bit into something weird something fleshy something fleshy yes disgusting and guess what it was

it was a severed human finger I don't know whether to laugh or cry same so obviously the news goes viral police conduct an investigation and they find out that the finger actually belonged to a Yamo factory worker who had suffered an injury at work

I have so many questions. Yeah. Like, didn't he know that his finger went into the ice cream or into the machine? How did they not stop? How did they not check? Exactly. It's very bizarre. But yeah, just a few days after that, this Bangal-based couple received their Amazon parcel that I'm sure they were very excited to get because it was supposed to be an Xbox controller.

Wow. But they got an unwanted pet for free. I mean, I'm laughing but it's not funny because it was quite dangerous. Apparently it was a spectacle cobra and we know they are highly poisonous. But thankfully it was stuck to all the tape in the packaging so it couldn't really move. And of course it became the subject of many jokes online. And this one guy called Rahul Dave on Twitter made a very funny joke about it. he posted a video of the package and the snake wriggling.

Your descriptive words are really killing me today's thing. So the caption on the video said, when you receive your ex in the box. You get it? This is why Twitter is still relevant. It's because of people like Rahul De. True. Okay.

And then yesterday, it gets worse. And Instagram user claims to have found a dead mouse in a bottle of Hershey's chocolate sauce that they ordered on Zepto. That is more disgusting than the human finger, I have to say. We should put a poll on Spotify. Yeah. What is more disgusting? Okay, we're doing it.

Guys, whoever's listening to this, don't forget to take the poll at the end of the episode, okay? Okay. Basically, think of this as a PSA for all your future online deliveries, okay? Just watch out, guys. You don't know what you'll end up getting in the mail. And now on to our main segment, enough of laughing and giggling with Roy. It's going to annoy some people.

For sure. Apologies to the haters. But yes, Apple held its worldwide developers conference or WWDC a little over a week ago. And it's still making the news because the company made a very important announcement. It launched Apple intelligence and with that, Apple has now officially entered the AI race. What is it? How is it different from other AIs? What about privacy?

And most importantly, why did a company like Apple come so late to the AI party? Stay tuned to find out. Okay, do you guys know what an A. Sheep is? No. I'm not an A sheep. Oh, you know. Of course he knows. Are you sure, though?

I was going to say I'm sure there are some A. Why are you not an A sheep? But first tell us what is an A sheep? Okay, okay. So an A sheep for our listeners who don't. know what it is. An is sheep is kind of a derogatory term that an Android user, an Android fan uses for Apple users who blindly buy anything that Apple puts out.

I'll be honest and I'll say I am an I sheep with very little disposable income, but I am an I sheep. But why don't you think you are an I sheep? I guess that's how it is, right? Like, you know, if you go and ask I sheep, if they feel that they're eye sheep, they're always going to say, no, they're not I sheep. I should put it out there because all our listeners, should know why Rohing is here in the studio.

And this is two years ago when I joined the Ken. And I started working remotely from my hometown. And they sent me a brand new MacBook. And I was shaken. I was like, you know, what is going on? Because I'm used to working in media organizations that send us like, Dabba laptops, you know. So obviously the person behind that decision

to give all employees MacBooks is Rohen, our co-founder. Yeah, yeah. I know. And I think you hit upon something there. You know, this thing of, I'm sorry, I'm just going to kind of step back. It really goes back into, I think, journalism and journalists. And one of the things you always believed is that, look, I mean, if we want to do great journalism, it has to start with great journalists.

And if you're a journalist and you're working on what you call it, a double laptop, right? Yeah. which is slow and like, you know, it takes time for word to load and then it crashes often and stuff like that. You can't be feeling good about working on that. And it's going to reflect in the way you use it and in the way you report, in the way you write, etc. Right?

So, so therefore it was largely a function of, hey, let's give people stuff that they enjoy using. And I think what's a better example of that than a MacBook? True. Well, I mean, can't disagree. to that. Now that our biases are kind of out of the way. Preferences, you mean. Our preferences, yes. We're very objective journalists here in this room today.

But yeah, let's get right to it, right? So we know that Apple held its annual WWDC at the worldwide developers conference, or very respectfully, software nerds Coachella a little while ago. Rohan, can you tell us what WWDC is and why people are so excited about it every single year? So I actually don't think the way Apple does it is it's for software nerds. Yes, I mean, WWDC is when they typically announce features, which they target at developers because ultimately Apple makes hardware products and the software that runs on those products are made by largely independent developers, right?

And those developers need to know what are the new features, what can they build with. But yesterday, in preparation for today's conversation with you folks, I actually went and watched Apple's WWDC video on my Apple TV. Of course. And I must tell you, you know, I mean, you'd be amazed. The video actually, it's an hour and a half long video which cuts through all the products that they launch. It starts with Apple execs in a plane all dressed up. And of course, it's like, you know, staged, right?

all the Apple execs who actually spoke at WWC, they jump off a plane and parachute down to the Apple campus and their parachutes open one by one and their pride-colored, rainbow-colored parachutes. And they land. And then that's how dramatized it is. See, nothing that Apple does, and I'm sounding like an ice sheep, I know that.

I can say it's just a given. Right? Another company you could say, hey, this is for developers. What's in it for us? But not Apple, right? So I think most people, I mean, you know, other than developers, their focus has been on Apple intelligence, right? That Apple announced. My first question is, why are they not calling it Apple AI? Huh. I have a question to your question. What's your phone?

Apple, but it's a very old Apple. What do you call your phone? Sorry, what was that? It was an iPhone. It's an iPhone. Rahel, what's your product? How come you don't call it a smartphone? That is true.

Why do you call it an iPhone? Right? Yeah, it's... Because... It's almost like a status symbol or so. Yes, but let's think... Okay, let me ask you another question, right? Where do you get your apps from on the iPhone?

From the Apple store. From the Apple store. From the app store. Sorry, from the app store. But why is it? Like, where do you get... What's the... I think comparable store on Android.

What's it called? Play Store. Play Store. Right? We all install apps, but the app store is Apple's. We all have smartphones, but Apple's product is called an iPhone. So therefore, it stands to reason that Apple is not going to just blindly use names that other people use. But I think it's super clever, right?

Calling it Apple Intelligence is some version of. of, you know, it's the iPhone. It's like everyone else has a smartphone. You have an iPhone. Correct. Everyone else uses AI. You're using Apple intelligence. Again, the whole trust fact also comes in.

Yes, and over a period of time, I'm sure, I don't know whether they'll succeed or not. What they're trying to figure out is whether people trust Apple intelligence. And they say, I use Apple intelligence instead of just AI. Just like today, you say, I use an iPhone, right? I mean, if you remember the earlier days of the iPhone, um, when you say, sent emails. Even now, I think it still persists, is that the email will say sent from my iPhone. Yeah, it does. Right? Why? Because it's saying that yes, technically an iPhone is also a smartphone, but it's an iPhone. Similarly, everyone else has AI. We have Apple intelligence.

That whole ad, no, an iPhone is an iPhone. That's true. That's what's happening here. They're trying to essentially take over a space which already exists and brand it and make it original. to them and their users. And the acronym in itself, right? Like, it is basically just rebranding AI. Apple Intelligence is AI. It's very interesting that they've done that and was this big announcement and things like that.

But when it comes down to it, Apple Intelligence is essentially doing what, you know, generative AI for the last two years. We've kind of seen doing already, right? So it's whatever, like proofreading your emails, booking your flight tickets, your editing images, you're making these fancy illustrations and all of that.

We've seen all of it, before, especially in the last two years, but what makes Apple intelligence so different? Okay, again, let me ask you. You said that we've all been using it. Have you? Have you been using? No, I mean, it's a genuine question, right? Have you been using AI tools to book your tickets, to generate images, to do your writing for you?

I have not. Okay. But let's hold that. Let's hold that thought, right? Because that's important. If I said I was, have been troubled. Not at all. Not at all.

No, not really. And I think that's the opportunity. Right. What's been happening over the last year or two is that there is this wave of AI and generative AI and LLNZ that are out there. And people have kind of dipped their toes into it, tried them out.

If you remember the early days of chat GPT, people were generating. Oh my God, look at what this. And like LinkedIn was full of people posting images and like text. You don't see that now, right? So there was an initial wave of interest that people had. and then it's kind of tapered off. So by and large, I'd assume that most people are not using it regularly. And that's really the opportunity.

So, Rohing, as someone who's, you know, been a part of the Apple ecosystem for so long. Wow, you make it sound like, you know, I mean, they formally welcomed me into, like, that ecosystem and give me an award. And, like, you know, yes, all right. Let's go with that. But I'm just curious to know how do you see Apple intelligence once it comes to your device? Like, how do you see it changing your life? I don't. Really?

Fair disclosure, I'm an AI skeptic. Right? I do not have a chat GPT account. I do not think that this approach or this world we're in where AI is the hammer and everything else is the nail, which means we've got to take AI to solve literally every problem, whether it wants to be solved or not. I'm not a huge believer in it, right? So therefore, from my life's point of view, I don't think maybe I'm just old, maybe I'm just a grumpy skeptic. I don't know.

I mean, that age does that to you. But I don't think it's going to change my life. But I do feel that there's a lot of value in it for a lot of people out there. Right. And of course for Apple and for many other hardware companies. Right. And software companies. But do you feel, like we just spoke about that a little while ago as well, right?

as it gets more integrated into your device, maybe you'll be using it without really knowing that you are and then it'll become like forcing. Perhaps, but not in the way right now, the way at least Apple has introduced, the way Apple introduced its AI features is that it'll always tell you that you're going to use, right? So it'll be a choice?

Yeah, it's a choice, right? Like, do you want to generate an image? If they even go and say, these are the three specific styles of images that you can generate in it, right? do you want assistance while typing a document, etc. So I'm one of those people who's like, you know, is there, are you, do you use AI in any form in this?

Please turn it off. I don't want to. In fact, I'd probably pay a premium for services that do not use. I feel like you should do a follow-up episode in one year's time. And see where OIN's dance with Apple intelligence. But while we're on the subject. Sorry, I mean, to interrupt you, Rahel, but I do, like I said, this is me. Of course.

But I do feel that most people are going to find a lot of interesting things that they can do. From, like, you know, the most mundane and silly of things. Like, for example, you know, you're messaging someone and you want to insert, you know, image or, like, an emoji that you made up, which is original, right? Or you're writing an email and it automatically, like, you know, suggests a better way to write it. Gen moji. I think we're calling it gen emoji. Yeah, that's right. So yes, I think the value of AI comes from all of these small bits that we don't know.

It's like spell check, right? I mean, you don't, there used to be a time when you had to kind of do it explicitly. And now it just happens as you're writing it happens. And we don't even realize when that changed. So AI is going to be like that for a lot of people. I think now is a good time to talk about Siri, right? So irrelevant for so long. suddenly with Apple intelligence.

It's something changing, yeah, because for the longest time, it's been the butt of so many jokes and memes, right? It's bad. It's bad. It's so sad. In fact, I think that's one of the things that Apple is getting called out on is that Ciri has, for the right reasons, it does not have a great image in the mind of Apple customers. If you ask most Apple customers, what is the worst thing about an Apple product? Many of them would say Ciri, right?

Like, you know, I mean, so I, I, so I. I get it. From Apple's point of view, they're like, we want Siri to continue and get better. But in the minds of customers, Siri is like that, like, you know... Relic. Is exactly, right? Like, you know, the one that can never understand, like, you know. Yeah.

But maybe, you know, after the Siri will actually become the personal assistant that customers have always dreamed of. Oh, it's like it'll finally become what we wanted it to become. Exactly, right. Maybe. We don't know that. Let's hope it does. Because if, I mean, I can certainly say that. as someone who uses Apple products.

God knows that we want Siri to get better. But now there's a whole natural language also, right? They've optimized Siri to understand the way you talk, like, you know, with your ums and ars and your accent. I'll believe it when I see it, right? I have a bit of an existential question for the both of you. Whoa. And this is not a question.

This is questions being asked so many times ever since chat TPT. And I know you are an AI skeptic. I wonder if this has a role to play and all of that. But do you worry that with like, you know, AI basically rewriting emails with like doing art, right? Like, do you worry that everything that we do, especially more creative things, will lose that innate kind of humanness, right? Like that rawness, that rough. Is that something that ever worries you guys? It doesn't worry me.

Because I, like, you know, I mean, it's fair disclosure that at the ken we've disclosed like, you know, very early. early on when Chad GPT launched, I think Seema, our editor and my co-founder wrote a blog post saying that we are not going to be using AI in our journalism. Yes. Right. But back to your question, it's not that it's become. I think it's already out there, right? So if you look at the amount of, so a lot of the work that was created in the world is not, we call it creative, but it wasn't really, it was just mundane. And that just becomes more automated and AI.

generated. I do feel like there's going to be a significant amount of job loss and loss of human creativity as AI starts to automate, which is nothing but it's seen how humans, it's been fed on training data, which has been done by humans, and it just does a better job of recreating it, right? But there will be, the counterintuitive point to this is that as more and more stuff, which was formerly human generated and created. gets automated,

I think the parts, some parts of it become more and more valuable. Right? And I think a great way to think about it is probably if you look at the luxury market,

right? Where we've had mass manufacturing and like, you know, cheap goods from China and like, you know, one dollar products and sheen and like, you know, all of that, right?

But why is it that French luxury is like, you know, so powerful, right? Like, you know, for a brief point in time, I think the owner, Bernard or not. I don't know how you pronounce his name, was the richest man in the world. Well, there are things that I feel which people will value.

And you can charge a premium for it. So I do believe that, yes, Rahel, to your question, AI and LLM tools will kind of take over and generate this certain kind of like you see, I mean, you can see it, right? Like, you know, I mean, when someone writes a mail to you or resume, you can immediately see the hand of chat GPT or AI in it. It's overwritten, it's well capitalized, uses grandiose words and stuff like that, right? You can see AI generated images and you immediately see it, oh, this is AI generated.

So my counterpoint to that is that, yes, it will destroy a lot of jobs, which is actually something we need to do something about. But you are also able to, therefore, better spot it. when someone writes to you as a genuine human. When someone writes to you, you can make out, hey, a human wrote this. There's emotion here. There's some imperfection here.

But then again, it's going to keep getting better and better, right? Like, it's reading our emails. It'll understand how we use language. I mean, I said that I'm an AI skeptic. The other side of that coin is that I'm a believer in human ingenuity and creativity. Right. I think we assume that, I mean, we've evolved as humans, right, for so long and we've done a lot of great things. We're just assuming that we will not know how to get better at it, right?

So, yes, I mean, both sides of the coin are true. Yes, AI will kind of destroy more and more of what we did. But I think more of us will figure out how to do things, which, yeah. Okay. So now that we have an idea about Apple intelligence, can we talk about why now? Why is Apple late to the party? Well, that's a great narrative, right? Really think about it.

I was doing my research on this yesterday. Like, why do we think Apple was late to the party? When we say, like, what bus did it miss? Like, I'll back trace what I asked you folks, right? I asked you folks, how much of AI do you use in your regular lives? And both of you said no. Right? So clearly, and well, of course, me, I'm a grumpy skeptic.

So have the three of us miss some bus? right so why has apple missed the bus we have this fomo narrative which has been created by a lot of companies with vested interest in it's well great like you know I mean I'm not but I think we have to resist that and feel like oh my god like you know it's it's over it's I don't think that's true Apple is like you know I mean Apple's product decisions usually follow their own rhythm right they're not a lot of other companies are usually following the trend

we've got to be the first to the market, we've got to be the second to the market. But Apple is like, well, we've got to be, it's okay if we're late to the market by someone else's definition, but from the definition of our customers, they're like, do you not, like, ultimately when Apple Intelligence comes to your phone

and my phone, I hope we find it more useful. We are not going to be, why were you so late? Where were you the last two years when I was doing what exactly were there? So you're saying it's more of a strategic choice. Absolutely. And I don't believe this. Well, even if I believe the fact that we are in this new age of AI and we are just getting started, right?

How can it both be true that we're just getting started and Apple is also too late? What's interesting is that obviously this is a question that Apple's been asked repeatedly. You know, top executives have been asked that question. Why have you taken so long? You know, why the deafening silence with Jenny Ai? And their standard response has always been, well, we've been doing it all along. And when you think about it, I suppose it does add up to an extent because Siri, regardless of how bad it is, was one of the first voice assistant, you know, AI powered voice assistants to be launched by a tech company. And then, of course, Microsoft and Google did it and they just did it did it better.

But yeah, I mean, it does kind of add up. Well, I mean, there I would kind of say that, yes, Apple has been behind other companies in terms of the. The sheer depth and quality of, like, you know, innovation that's happened at, like, you know, started with Google, whose researchers, of course, created the framework upon which chat, GPT and Open AI is based, or Open AI or Microsoft, they've done much more, or even meta and Amazon, etc. They've done much more than Apple. But I think it would be silly to frame that every company must follow AI or a technology wave in the exact same way. Why must Apple do exactly the same thing spent, you know, by those same Nvidia GPUs, spend the same amount of billions of dollars training, you know, published papers, etc? I mean, I think they're allowed to, and I think as customers, we expect them to do things

that matter more to us than signaling to the world that we are ahead on this race and we are number one or number two, right? I honestly don't care. Most people believe that if you're smart, work hard and meet your goals, a promotion is guaranteed. But the truth is, a lot of talented people fail to get ahead, while seemingly ordinary peers blow right past them. So how do organisations decide who gets promoted over whom?

If it's not entirely based on performance, does it mean that you have to suck up to your higher-ups? Kind of play office politics? Be everything everywhere all at once? These were the questions I was exploring and assumptions I was challenging in the latest episode of the first two years, an early careers podcast from the Ken.

If you're starting out, and you're probably in the 18 to 25 age group, this episode is a great place to start. I am Aksha Chandrashakran, the host. You can't have favourites as a podcast host, but this one about how to make a case for your promotion is definitely my favorite. Click the link in the show notes to listen to the episode

or just look up the first two years on Spotify or Apple Podcasts or wherever you get your podcast. Thank you. Now back to Rahel and Snigda. What you said about, you know, I published papers and all of that, what I feel is that especially now in the moment that we're in, you know, in terms of like AI being, you know,

the development that's happening and all of that and all these tech, these advancements and all of that, I don't think that you can be quiet about it, right? Like especially top talent, right, that are developing AI. In fact, this is something that I've read about recently as well. Apple has a tough time retaining AI developers because they're so tight-lipped about what's going on. Because you're not able to publish those papers and because you're not able to do those things.

You're absolutely right. And I think we're going through this special period where the world just cannot have enough AI researchers and developers, right? They're highly in demand. And there, Apple's culture of secrecy hurts it. but I would say that it's like with all trends, this two will pass. And I think secrecy has always been part of that because they hold their cards close to their chest. And if that means that they lose some of the best. So, I mean, this kind of brings me back to the original point, right?

If you see, I mean, we started by saying that Apple is late to the game. Apple is not at the cutting edge of technology. And therefore, those researchers who want to work on the cutting edge of research will not be an Apple. Perhaps Apple is fine with that. Rowan, if you had to briefly talk about some of the things that you think give Apple an advantage in the AI space, what would those things be? So, I mean, of course, the biggest thing is the sheer number of products that exist, right? Why is it that Apple's partnership with Open AI does not involve Apple paying Open AI for anything? It's because Open AI wants access to the billions of users.

Like just in this room right now, we have three MacBooks in front of us. We have three iPhones. By the way, the base for, we will not be able to, like, none of our phones will be able to run Apple intelligence. But all three of our MacBooks will. At the two of you have M1, I think mine is an M2. They all run, right? So, hardware is, and devices is Apple's strength. And I think that's where, you know, you.

you will see a lot of, like, you know, innovation from them. So I think we've already now reached a stage where people are figuring out, okay, all of this is great, but how many people can we get on a regular basis to pay for AI on a monthly basis? And here, the most interesting thing is Apple says Apple intelligence will run free on your device. What does that really mean?

You have to buy an Apple device. That's right, right? So where is the monetization happening? Yeah. Through the device. Yeah. So what happens is, and I think it's an interesting dichot. I mean, two roads will open up in 2024.

Up till now, you're seeing most AI companies talk about here's our product. You need a subscription to it. It could be perplexity. It could be chat GPTs, premium version. It could be Google's Gemini Pro, et cetera, and all that. You've got to go to their site. You've got to sign in. you got, they're trying to sell your software subscription.

And we can already see signs that not enough people are really convinced and buying it, right? And Apple is saying that, look, what if you didn't have to pay extra for AI? What if it was embedded in your products already by us? That's so powerful. Right? Yeah. So, so in the process, what's, which, which leads to another trend, right? Why is AI so powerful?

as a technology trend is because I mean we all know that running AI models is enormously computation intensive right in the servers on the in the data centers you need to have those powerful NVIDIA chipsets which cost ridiculous amounts of money right

on your phones or devices they need to be powerful enough right like you know you need to have the M1 laptops or later right the only iPhones that will support Apple intelligence is 15 and above Right? What does that mean? It means AI started as a software feature, but in order to run it, you need more and more powerful hardware. Let's come back to privacy, right? Like, the one thing that you mentioned has always been so appealing about Apple is trust and privacy, right? Even when it introduced Apple intelligence, it said great powers come with, the great power comes with great privacy.

But, you know, the whole way it's been built, the premise itself is so contradictory because on, one hand, you know that for Siri, for example, to function at its optimum best with Apple intelligence, it has to see everything. It's going to have access to your whole life, basically, right? It already does. Yeah, it already does. But when you're conversing with it, I suppose what you're also hinting at is that most people don't realize this till they use it conversationally and then they realize, wait a minute, how did you know that?

Right? Like, it's like iOS and Apple already had access to everything which is on your phone. Right? But when you use it to complete a task, you're like, wait, you already knew that I had a meeting coming up. Yeah, that is a scape. Yeah, true, true, true. But then again, Apple is also saying that, you know, we have essentially what it's saying is that, listen, we have all this information about you. But trust us.

We'll keep it safe. We'll not tell anyone. Right. So then it's much more than that, actually. we'll go into the technical details of it. But at a fundamental level, you're absolutely right. As a consumer, you have to decide, do I trust Apple with this information? Right.

And that has to be a binary yes or no. Right? And I mean, what I'd add to that is that do you feel like, you know, usually when I'm coming to thinking about these things, it's like, do you feel that Apple would lose a lot of value if it lost its customers' trust in it? Yes, of course it would. Right? So Apple has everything going for it to maintain that trust because it monetizes that trust actually. Right.

Like, you know, privacy is at the heart of it, right? If you knew that Apple is somehow selling or leaking your information to others, then you would trust it less. Right. So therefore, I mean, like I said at the beginning of the conversation, there is a capitalistic motive at the heart of the reason why Apple is so careful about privacy and trust, because that's why we give it more money. That's why we buy more and more products each year. But to go back to your question about privacy, for many years now, Apple's products have

had very secure. So, I mean, engineering and technology to make sure that parts of it are so secure that like nobody else can get access to it, the way it uses. encryption, etc. And even with Apple intelligence, what they're doing is that a lot of the computation happens on the device. And then there it goes, if it can't happen on the device, it goes to a private cloud, which is a, they specify that it's a cloud, it's a data center owned and run by Apple.

Running what chips? Apple chips, not Enmedia chips. So one of the most interesting things is Apple seems to be one of the rare, large companies, which is not dependent on NVDA chips. Again, it probably comes back to the fact that they're probably not doing the most advanced

like, you know, work on it which requires Nvidia's expensive chips. Right? So, but anyway, so there's private processing that happens on your iPhone. Then there is server processing

which happens in Apple's data centers. By the way, I mean, I read a lot of interesting, they're too technical to get into right now. But there also, the way they've designed it, is that when your phone makes a request to the cloud, right? It does not reveal identifiable information. In fact, when it reveals to the cloud, there is this layer in the middle which takes, let's say,

you, your phone is making this request and it needs some work done in Apple's cloud, right? So this layer in the middle decides, oh, here's Snigda's request. I'm going to take it. I'm going to break it up into three, four different parts, and I'm going to give it to different parts. in the so that each one part does not know what the other is doing and then I'll send you the same and by the way after a while those machines are going to reboot so that there's no information so Apple is going out of its way to make sure that and why do they need to do that right because in our minds we're like is my data really safe because we are in this new era where we are like everything in my life is probably like you know up for grabs is there someone I can trust so I think that's So therefore, privacy I feel is like a huge thing for Apple because the more privacy it signals and offers us,

the more we trust it and the more money we are willing to pay it. Eye sheep. Trust comes back to I sheep. But, you know, honestly, it's incredible. We've been doing our reading as well. And when you hear about the external cloud designed by Apple, all of that, the fact that they're shredding your data after your request is done, All of that, it's incredible to think about, okay?

But let me play devil's advocate here. At the end of the day, what you're doing is, especially when you're outsourcing a request, right, to a cloud, your data is out there. So say hypothetically there's some sort of network glitch. There is that potential for... Of course, there's no denying that. Yeah.

So this is like saying that when you're driving on a road, there's always this risk that you could be in an accident, right? Accidents happen, right? It's possible. I like anything which is built with software and by humans can have a glitch can potentially be hacked right but I think as a user we are not

we're so if I were to reframe this it's like will an accident happen like okay I guess we're all right but are you going to be the one to actually make it happen and sell it on the site are you actually saving my information so that no yeah I think that's what we want right we're not like I don't I think it's impossible to expect that there will be no glitches, no hacking, etc.

It's impossible, literally, right? So they've basically done AI processing in the safest possible way. So, you know, another thing that everybody's been talking about the conference is Sam Aldman's appearance, right, even though he didn't talk much. But again, we know that Apple has collaborated with Open AI to integrate Siri with Chad GPT, right? How is that going to play out, Rohan? because, you know, there's been so much criticism about and concern about privacy and copyright with regard to Open AI. Again, like, this is Apple, right?

So the fact that Sam Ortonan was there in the audience and, like, you know, they talked about opening itself is a huge thing. Because Apple does not like talking about other companies when the show light is on it. Right. But that's said, just like the hardware point I mentioned earlier where, like, you know, I mean, I mean, everything that Apple does, in some senses, if you kind of trace a strategy, it's like, we will redraw the lines of battle so that it suits our advantages, right? So if you look at Open AI and the fact that Apple is not paying it, right? And I've been reading a bunch of interesting things around it, right? And I think the most interesting thing is like the app store, right?

Is Apple making most of the apps itself? No, not really. What is the app store? App store is tremendously profitable for Apple, right? I mean, we're on the app store. We sell through the app store, the Ken's apps. Why can't something like that happen on AI? Now, let's see how many AI tools there are out there.

Right? Like, you know, there are, of course, literally every large tech company has its own tool. Lots of smaller ones have. Are you going to go and start creating accounts, paying subscriptions for each one of them? So I think what's again missing, is the space for an aggregator. I think, again, this is something with Ben Thompson and Stratagery talked about is Apple as an AI aggregator.

Right? So most people don't have the time in patience to create multiple accounts and paste one, prompt one, and then, like, you know, I mean, look at the bullshit that's generated in one place and see if it's different in other place and stuff like that, right? They're like... So what Apple, I mean, in the great place that it finds itself today,

is that while it may have fallen behind in someone else's definition of what the AI race is, the AI race actually wide open. So there are no clear winners. There's Open AI. Sorry. No, I was just saying that Apple has not said that it's only going to use Open AI. It will not, right?

Because Apple in this is in sort of this kingmaker position where it's like we've got these billions of users who are using our devices and who trust us. Right? And now it's got on the other end, it's got opening eye, it's got Google, it's got Microsoft, it's got like all the other companies in the world. By the way, regardless of whatever you may hear, none of who are significantly better than the other. Like you may argue that opening eye is the best.

Yes, I mean, it's true. But it's not that opening eye is 10x better than like, you know, Google, for instance, right? Maybe 1.5x, right? So this suits Apple because then essentially it can. gets to play off all of these against the other. Right? And it can say that we're offering Open AI right now, but you could also have Google on it.

You could also have meta on it. You could also have others on it. And I can easily envision a world where there's some version of the app store for the AI store where third-party tools are available through Apple mediated on its terms, where Open AI becomes just one of the AI services that is available to your app.

as a user and I'm fine with that. Like, again, if I'm using an Apple device, that device is my window to the world, right? I don't need to go to different places. It's like if that device can mediate my need for apps or services, why not?

But you know who I'm feeling really bad for in all of this, Microsoft? Because, first of all, you invested all this money in Open AI and an Open AI goes and does it strikes up a deal with your biggest competitor. I wouldn't be too sorry about them, their stock is

doing a tear and I think under Satya Nadella they've done a brilliant job of refocusing on AI and in fact they're starting to kind of swing to the other side right? Like you know, the entire recall thing is just creepy right? Like you know I literally have

one Windows PC in my home. My son uses it and I'm like reconsidering of course it thankfully it does not have the hardware to run this new nonsense recall-like feature, which they've anyway kind of like, you know, put the brakes on.

But I wouldn't feel too sorry about it, right? In fact, if there's any company that I feel sorry about, it's Google. Because literally the underlying research for everything that the current Gen AI and LLM models came from Google and now it's kind of playing catch-up and right. But to go back to that point about Open AI, I think it's, you're absolutely right. I think it's one, it's by design that Apple has, talked about them as one of the partners. And I think it's fantastic that as a user,

you can use chat GPD without creating an account. Yeah. Right? And Apple will anonymize your information. So today, if you have to use chat GPD, you have to go to chat GPT, create a login, right? And over, right? But Apple is saying you don't need to do that.

Now, imagine the benefit to you as a user. You can now get the benefit of AI without how. having to hand over everything. So, so if you have to kind of view this as two sides of a coin, on one side is your device, with all your information on it, everything about your life, right?

And work, because we're also talking about Max, which Apple has access to. Right. Right. And on the other end are all these AI companies which desperately want access to that, right?

They will go to the lengths like taking screenshots every few seconds to figure out what do you have on your device. and Apple is like, wait a minute. You're not getting your hands on any of that. Here's anonymized private data. Here's a request. Just tell me what your answer is.

I will relate back to my user. Right? I mean, that's great. That's Apple playing off one AI company against another. Elon Musk has told all his employees that if Apple integrates charge GPT into the devices, then they're not allowed to bring or use Apple devices. That's Elon and he, of course, he has Grok, which is their rival.

Very funny. But honestly, like, I mean, usually at these choices, I'm like, okay, fine, what are you going to say? You're going to say, stop using Apple products and start using Windows products. And at some point, I guess Windows will be like, hey, we're taking screenshots of your, like, you know, laptop every few seconds and saving it. Well, that's a safer choice for Elon Musk. employees, well, I guess that's fine, I guess. Got it. So, Rohan, what you said about, you know, there being room for a possible aggregator is really

interesting because one of the questions that I wanted to ask was about third-party apps and just apps in general and revenue now that AI is in picture, especially something like Apple intelligence, right? So, for instance, hypothetically, if I have a phone powered with Apple intelligence and I'm like, I want to book a cab, Siri is doing it for me and I no longer have to go to Uber to be able to, you know, to spend those physically spend time on those apps to be able to do that. Right. So suddenly now I'm wondering how do these apps, any of them, right?

Or if I want to listen to a podcast, I no longer have to go to Spotify to listen to it. I'll be like, okay, Siri make me whatever, right? So how do these apps kind of make money then? And does this create like this massive opportunity for subscription driven businesses at all? Do you think? Whoa, you don't say. That's not a leading question at all. Like the Ken is not in the subscription business.

I don't be subtle about it. No, I mean, I think your point is very interesting and valid, and it did come up in a couple of the articles that I was reading, which is really what happens when AI mediates our conversation. By the way, this is not just about Apple, right? This is also about search. When you go to Google today and you search, and you got a bunch of these AI-generated answers,

many of which are sourced from publisher's sites, you never go to the publisher's site. Yeah. Right? So that mediation is happening, which is one of the reasons why everyone is like, oh my God, AI is going to rewrite the world

because they're like, whoever controls that middle layer decides like, you know, what the user's attention and, you know, money is spent on, hopefully. But to come back to your point about Apple, it's absolutely right. If you use Siri and Siri,

and Siri let's use both the examples right let's talk about Uber now Uber does Uber really care if you're opening the Uber app and looking at it or does it only care about the booking as long as Uber got the booking

I think it's all right but let's use the other example of Spotify right now does Spotify care where you're coming from as long as a stream is sent to you well not exactly Why? Because there are apps that are dependent on your engagement and time because they monetize that through advertising.

Right. If you don't open the Spotify app, right, then Spotify has fewer chances to be able to monetize your attention on it. And that's absolutely a risk. But like I said, this is not for just Apple. It's like we're the can. if somebody decides to summarize our articles and present them in a search engine, by the way, which is not easy because we don't wear pay wall, but still, right? We do lose out on people

who would normally come to us. So I think apps that are dependent on users opening, you know, those apps every day and spending time looking at them are at risk. Yeah. Because now it's like,

why do I need to kind of But of course, there are like super categories like, you know, the TikToks of the world or YouTube's of the world, which are very hard, which are kind of stream-based apps where it's very hard to think of, you know, TikTok or YouTube as I'll just send you a particular video and nothing else. Exactly. Right. So will these apps also have to kind of optimize for Apple intelligence? Yes, the same way.

I think all of us in the earlier wave, maybe 20 years ago, 20 years ago, 20. years ago, optimize sites for Google search or search engines, right? People would write search engine friendly copy, be open to search spiders, etc. Right. Now it's already happening, right? I mean, there was a recently leaked Open AI presentation where they were offering publishers and advertisers the ability to be better featured in. chats, right?

So that's already happening. So companies will have to figure out. So just like search engine optimization used to be a thing, right? It's already a thing that LLM model or GenAI optimization. If someone were to go and search for something in, let's say, perplexity, does your business or web page come up in that? if someone were to search for cab

will Uber come up first Will Ola come up first Will something else And who decides And the best part is it's a black box Nobody knows Which is why it's so valuable Because when it's a black box

The owner of that black box gets to control Who to guide it to Thank you so much Rohan But before we go Recommend a movie or a TV show

That you watch recently that really yeah that you really okay so a surprise question I've generally not been a fan

of Indian movies for a while because I found most of them very overacted and like you know like there's this thing of suspension of disbelief I could never suspend my disbelief when I'm like you know

who wears stuff like that who speaks like this who has makeup like this while they're like you know working at home exactly right but I've been like enough of my colleagues at the Ken have told me that like you know you got to start watching I'm a Malayali right like you got to watch Malayala movies and I'm for the longest time really and I kept reading about this Malala movie renaissance that's been happening over the last 10 years where it's like you know absolutely creative stuff so I'm on that right now so and I think I would I'm sure many people would have already probably watched it but Avesham right I watched it I watched it by myself the first time and I watched it I watched it by myself the first time and I'm not I watched it I watched it by myself the first time and I'm and my 14-year-old was walking across the room

when I was watching it and he just sat down with me and watched the last 15 minutes and he was like, wait, what was that? Then we re-watched it together. And then after that, we watched Minnal Murli, which is another movie and then he came to me and he's never watched Malal movies in his life, right? He's coming to me and saying that,

how did Malayalam movies get so good? Wow. So I was like, so now I'm on this, you know, Malayalam movies binge, which started with Avesham for me. I watched the Great Indian Kitchen which is also another Malayala movie. Oh yeah, which is...

Yes, yes, I've been meaning to... I feel it's a little too gritty. I've been putting it off because I'm like, do I really want to kind of... It really tests your patience as the audience, you know, but you really have to give it that... Yeah, it's an amazing idea. Yeah, it's very good.

Any recommendations from you, Rahil? Oh my God, Bridget in the new season. It's so good. I'm sure everyone's... I've seen it already, but... I haven't. Oh, you should. I've seen the first season,

but I think I lost interest after that. I just be honest. You should watch Queen Charlotte. I saw Queen Charlotte. Yeah, it was better then, because even I started watching Bridgeton and I couldn't. And Queen Charlotte was better. Good.

But still, yeah, not my kind of show. That's about it. That's a right now. Thank you so much, folks. Thank you for your time. Sadly, I had to call curtains on first principles, which was my podcast, which I'd been running for roughly the last two years. We've decided to stop it. But it was doing so well, Rowan.

Why? So there's this thing which they teach in journalism and in literature, right? It's called kill your darlings. Yes. Kill your babies. Yeah. Multiple people have said that, right? So there's another one which is, the king is dead.

Long live the king. So it was great. It had a great run. And I honestly learned a lot interviewing a bunch of roughly 41 founders we interviewed over the last two years or so. But I think its time is done. And I think there's more interesting and relevant stuff for the times that we live in. There's a lot which is happening in the world of tech, of business. For which I think there should be better podcasts.

out there. Right? So, wink, wink, yeah. So we're absolutely, like, you know,

I'm working on a new podcast. We are working on a newer podcast, which is very exciting. So watch out, the two of you. Oh, no.

I'm coming for day break. Oh, by the way, that also reminds us we hit number one on Apple charts on Tuesday. Really? Tell us about, like, you know,

you hit number one in the morning and then what happened? Unnecessary. to number three when we were cutting the cake. That's right. It's important to stay humble, you know. It was good because it would have gotten to our heads otherwise. So this year, you just keep getting better and better.

But yeah, thank you so much to all our listeners. Yes. For all the love and support. All right, that's a wrap. Thank you. Thank you. Thank you, Rohan. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform.

What you're listening to is just. a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by Rahal Philipos and I, Sinkda Sharma, and it was edited by Rajiv Sien.