Sharp Tech with Ben Thompson - Mailbag: Apple Privacy Counterpoint, Covid and Content Moderation, Phoenix Suns Sale, Justice for Gamers

Episode Date: September 29, 2022

User agency within Apple's ATT landscape, what Covid can teach us about the risks of regulating content moderation, whether AI fears spawned by The Terminator are reasonable, interrogating Andrew's gamer logic.

Just a heads up at the start, this is a free preview of the mailbag episodes will be releasing to subscribers every week. So if you subscribe to Straterec. You'll get two episodes each week. The first one will be a little bit more formal. And the second will hit on a bunch of different tech issues as dictated by our listeners and our own personal whims. So it's going to be more of a freestyle. Ben, do you want to tell them where to subscribe? You can go to sharp tech.fm and you get a feed to put it right in your podcast player. Or if you're listening on Spotify, just click the little link at the top and do the same thing. And these ones are fun. I actually think these are probably better than our made episode.

So we wanted to give everyone a taste. You can try it out. If you're already subscribed in hearing this pitch, we appreciate your patience. But you can understand what the strategy is because that's the first question in the episode. There we go. So enjoy the episode. and we'll come back next week. Hello and welcome back to another episode of Sharp Tech.

I'm your host, Andrew Sharp, and on the other line, Ben Thompson. Ben, how you doing? I'm doing good. I actually have a name for, I guess is it a name for this episode or is it a name for our overall sort of premium strategy that I'm ready to drop on you. Are you ready for it? Well, I'm a little apprehensive. You told me this yesterday.

You said I came up with a name for our freemium strategy. I asked you what it is and you said, let me explain it on the show. I'm always wary of talking through stuff like this on the show, but sure, hit me with it. So we are pursuing the bullet strategy. And what I mean is the first episode of the week, you know, it's usually, let's be honest, it's a little bit of me talking too much. And I acknowledge that we're working on it, business up front. This is the party in the back.

You know, this is where lots of reader feedback. a lot of readers are very eager to sort of pick on you, which is very delightful. And so, yeah, so this is part two of our mole strategy. We're at the party in the back. Well, that's hysterical because I was out running earlier today. And I thought to myself, we're sort of running a mullet scheme here where it's all business to start the week. And the mailbag, we really do get to let our hair down.

So I guess we are on the same wavelength. Like maybe we've already been podcasting too much and our brains are beginning to meld here. Yeah. Oh, that's how you know it's a good name. It's the good stuff is obvious as soon as you hear. There you go. Well, the Mullet strategy. Let the era begin.

We've got a lot of ground to cover today. We got a bunch of good questions. You have an incredibly smart audience and we have more good questions than we could possibly use. So thank you to everybody who wrote in to email at Sharp, But keep emailing. I'm worried every time you say that, you're like, I'll never get my question answered. But no, these are the life what, the life flood, the life one of the mollet strategy. They're so much fun that we're going to have to incorporate some of them into the first show we do each week because I'm too entertained by a lot of what we're getting. But let's on that note

dive in because like I said, there's just a lot to get to. Oh, I did, I did notice from the rundown. There's also an internal bullet strategy where these early questions are like, you know, That kind of businesslike, and then they really go off the rails towards the end. But yes, continue. Okay, we'll kick it off with Ethan in Ireland. He says, I broadly agree with the concerns around anti-competitiveness related to Apple, potentially building its own ad platform. And I understand the negative effects on small businesses as Apple's new policy undermines

the effectiveness of Facebook's targeting. But are we not discounting user agency in all this? I've read the commentary that. the ATT Dialogue Prompt can be leading, but even so, surely it's people's prerogative to decide whether to allow tracking or not. And just to provide context for anybody who's not immersed in tech news, Apple implemented a new policy where after you download any app from its app store, Apple will ask you whether you want to allow the app to track your activity and collect data that had previously been used by Facebook to sell ads and help lots of.

different business target customers more effectively. So with that context, what do you think of the counterpoint from Ethan there? Because I think both you and I have been fairly critical of Apple's strategy here. Yeah, I mean, I think Ethan would push back and say, well, apps don't, if you don't do any tracking, again, this is using Apple's definition, you don't need to prompt. Like, there is no need for a prompt, and there's apps that don't have that. And I think my pushback would, there's a couple, a couple angles to this. First, I'll put up front, there has been an issue of collecting and abusing user data.

So this is what makes this whole conversation complicated is just because I vehemently disagree with Apple's approach doesn't mean there wasn't necessarily an issue here. There's lots of stuff in societies like this, right? Where there's a problem. And just because you disagree with one particular solution doesn't mean you're denying that the problem exists. So just sort of big picture, that's definitely the case. I would start out by saying one of my frustrations with Apple is I think they are to be generous, disingenuous actors here. And look at the commercials Apple has run around this, for example. Like they have this commercial, like there's a guy on a bus and like it's broadcasting, oh, my wife's getting a divorce or something.

And it's like, oh, do you want that out there? And it's characterizing what's happening in a way that is just not even remotely. close to what is true, but also taps into people's worst sort of fears and suspicions, right? You have all the things like, oh, is my phone listening to me? Because we were just talking about this. I never browsed to an app and I saw an ad about it, which is not happening. It's impossible for it to happen. Again, thanks to Apple and good work Apple has done in limiting like what apps can or cannot do,

even if, you know, I mean, beyond the fact to be suicidal for them to do this because, you know, the user trust, destruction, all those sorts of things. So Apple has leaned into this characterization of what's happening. And that and provided the context around which this prompt surfaces. Now, this prompt is ridiculous. And you know it's ridiculous because Apple uses a very different prompt for themselves. So the ATT prompt is quote unquote app would like permission to track you across apps and websites owned by other companies. Allow tracking, do not track.

Like who on earth is going to ever allow that, right? And you know it's kind of ridiculous because Apple's own prompt, which at least they have, to their credit, they have the personalized ads prompt. Personalized ads and Apple apps, such as the App Store and Apple News, help you discover apps, products, and services that are relevant to you. We protect your privacy by using device-generate identifiers and not linking advertising information to your Apple ID. Turned on personalized ads increases the relevance of ads shown by letting us use data like account. information, app and content purchases, and where available the type of news stories you read. Apple does not track you or share your personalized information with any third parties. And then it's bolded, big bright button, turn on personalized ads.

And then in little text at the bottom, turn off personalized ads. So they're framing and they're leading is all towards, no, this is good. It's going to make you better. Like, you're going to see ads regardless, when it'd be nice that the ads were actually relevant and useful. And I think I have no problem with Apple's prompt. I think it's a fair characterization of what they're doing. The issue is the way Apple's justifies why their prompt can be so friendly and engaging,

and these other ones are bad, is because they have defined what user tracking is and said that tracking is third-party data, where data goes from one company to another company. And they're like, we're not third-party data. It's all self-contained. And that's why Amazon doesn't need to show a prompt because it's all self-contained. They have all the data for you of everything you've bought for the last 25 years, which they absolutely used to target you. But they don't need to show a prompt because in Apple's definition that's not tracking, what that says to me is that tracking is self-serving.

And I think this is something that a lot of people that are opposed to targeted advertising on principle, they don't want any targeted ads, whether it's from Apple or Google or anyone else. But Apple has taken that fervor and that belief, adopted it. but change the definition to suit themselves. And I think that's, again, the generous term here, I think, is disingenuous. So even before we get to the question of the value or user prompting, are users actually making informed decisions given the way, number one, Apple's misrepresenting what's happening? And number two, the fact that they're so blatantly giving a friendlier description themselves and not others. And number three, again, for Facebook specifically, the way this is working is on a technical level, yes, there is information being collected on the Shopify website that says you bought this thing. And that's being sent back to Facebook.

That's being collected by a Facebook SDK, by a Facebook pixel, by a bit of Facebook code on that app. The beautiful thing about this model is it actually is all first party data. It's just all Facebook data. The merchant gets no data. And this is good because merchants don't want data. Like that's part of the freeing of this. They don't want to be a grocery store with a membership program, you know, discounting your loaf of bread by 10 cents so that you'll pull out a card so they can track all the things that you do.

Right. And then sell it willy-nilly, which, by the way, has been going on for a very long time. Facebook actually, I think, did a lot to clean up the ecosystem by virtue of basically, okay, we're going to be the one place for all data. We're going to, like, you don't have to deal with it or touch it. And all these small businesses can work collectively to get the benefits of data without having to collect any of it or sell it or do all those sorts of bad things. Well, I hear that.

And not only that, they don't have to shoulder the risk of maintaining all that data themselves. And like on our ATT episode, you likened it to radioactive waste. Like, nobody wants to deal with it. So it's not actually the worst thing in the world to have a big. centralized resource that everybody can rely on rather than everybody having to do this as they go. And frankly, there would be a lot more risk in the latter scenario there. Yeah. And well, the other thing, too, is, I mean, retailers have rights too. It's their data.

Somehow Apple has unilaterally decided that we get to decide what you do with your property, which is going to their computers, they're collecting it. And this is sort of a, you know, You can argue that this data shouldn't exist. And I understand respect those arguments. But it's worth noting that Apple's perspective is whatever happens on our platform is ours. And so that's how they dictate to apps. They say, look, no, we're going to limit what you can do in your app because it's on our platform. And we're asserting our property rights to say we get to decide what you do or don't do.

They are then unilaterally denying those exact same rights to other companies. Why? Because they, that's the price of entry. Yeah, because they can. Because they can. And listen, you covered this really well in terms of Apple's self-serving language. It's too tedious to try to parse their user agreements and their disclosures here. But I'll put it in the show notes. You wrote about data and definitions and ATT and the way they have framed this in a legal context. And they're very careful with the language they use. And I think it's telling. And Even the prompts themselves. Like, I had this happen this past weekend where I downloaded AMC Plus to watch a streaming show that I love, the bureau. Everybody check it out if you're looking for a good French spy thriller, great series. And as I'm clicking through and trying to watch my show, they hit me with the prompt, and I just sort of impatiently clicked through. And the language, though, I went back and looked at it today. the language says allow AMC Plus to track your activity across other companies, apps, and websites.

And that's in big, bold font. And then directly beneath it in font that is literally half the size, it says your data will be used to personalize ads and improve your app experience. Now, I'm willing to bet that 90% of the people who see that prompt do not read the smaller sentence and just click through and say, ask not to try. track because obviously if you say to a normal person who doesn't really know what any of this is, do you want to let AMC Plus have surveillance access to everything you do on your phone? Like nobody is going to say, yes, allow that. It just doesn't make sense. And so it gives a sense of like them getting access to everything.

Like what they're getting access to is you like the Bureau so maybe they'll show you a different show that you like. Exactly. There's this sense of like an Apple, like they're just a part. and privacy officer said something when the AT's coming out. They're like, oh, ads worked fine for ages on TV and stuff like that. I got it. Why do we have to do us? Well, yeah.

And all we had were a few companies that could operate at the scale enabled by TV. Like all this sort of new stuff we get is part of this. And again, I understand and respect the argument that, look, I think this just should be bad, period. But I just want people to be honest about what that means. You don't get stuff for free. There is tradeoffs. You're cutting this stuff up.

And to Ethan's point, I mean, Ethan's probably be grumpy. you, Andrew, you're not arguing with me enough on this point. But I'd like to think that's my persuasion has been so strong. No, no, no. I'm more doubt on Apple than you. I'll get to my perspective on all of this. But yes, finish your point. Users do have agency. Users could, you can have a more honest prompt. You have a more honest disclosure. You can have a more honest commercials about what's actually happening. And users could decide to not use the apps at all. I mean, get a lot of people bad at me. But there's this long-standing debate around like ad blockers and stuff in sites. And like some sites will not let you access the site if you're using an ad blocker.

And people get really upset about that. It's like, well, like that's the price of the site being free. If you want access to content and you don't want to be advertised to and you don't want that advertising to be effective, then it behooves the site and it behooves you to pay for it. The early internet in particular created this sense of everything should be free. I should have a right to everything. And that's where the consumer choice would come in. look, if you don't want to, like, just don't use, don't use the app.

But there's like, no, I want to use the app. And I also don't want my data collected. And I want all the value. And Apple's happy to lean into that because that aligns and benefits their, their business model. And again, I've said it three times. I'll say it again. I understand respect the argument. I don't want any tracking at all.

I just would like a little bit more honesty about what that really means in real life, what we're sacrificing, what we're giving up. And the fact that we are sort of fundamentally fighting about the nature of computers and what they do and what they're great at. And it bothers me that a lot of stuff is because of overblown fears that aren't realistic. Even as I do acknowledge, there's been some really bad abuse. So it's like that's what makes it sort of tricky. Well, you're saying you don't necessarily need a sledgehammer to solve this problem. I mean, everybody can acknowledge that there's a problem and the question is what the right solution is.

And I think that's fair. And Apple has chosen the most self-serving solution imaginable, which is where I start to get really critical and cynical about what they're trying to do here. Like, even if you go back to the prompt, the fact that they include that second sentence, your data will be used to personalize ads and improve your app experience in really small font. Dude, that's an improvement. That sentence was not there previously. It was just like, do you want to be tracked? And the fact that they're including it, to me, it tells me they know exactly what they're doing and they're anticipating legal challenges and they're going to be really careful about all of this. And it just annoys me. And like I was thinking about it earlier today, because I get so pissed off about it. I was wondering, like, why exactly does this grind my gears so much? I'm certainly not a huge Facebook fan. And I mean, the reality is what Facebook is doing, what Apple is doing to Facebook is what Facebook is what Facebook did.

to traditional ads and like half the news media. I mean, like they cannibalize things their own way 10 or 15 years ago. So it's not about Facebook. It's not even about small businesses for me. What I get pissed off about, though, is like what Apple's doing feels fundamentally unfair. And like as an American, I just reflexively do not react well to that. Like we're supposed to hate the massive businesses that are trying to snuff out their competition and screw small businesses.

And we're also supposed to hate corporations that straight up lie to the public. And I don't know that Apple is fully lying. I think we could be generous and say disingenuous. Disingenuous is the word we're going. Yeah. I mean, that's the party lie tonight. That commercial with the guy in the bus talked about his divorce was like I got mad. I'm like, this is it's dishonest.

Right. And again, I don't know what. I'm repeating myself. I want to acknowledge, I'm not trying to be a total absolutist here. I am a bit of an absoluteist on this. I think a lot of the private stuff is very overblown, particularly in a wing of, like, people have this vision of like the German Stasi with all their files. Yeah.

And like, are they going, like, get all your stuff? And just, just from a technical perspective, the way this stuff works, it's just like, it's not even human parsable. It's like, it's just like pulling in all these signals. We've talked about some of the machine learning stuff and AI. And like, there is a delightful aspect to, to you get that ad for something you never thought about. I was like, yeah, that's actually pretty nifty. I could really use something like that.

And I bummed about that as a consumer. And I definitely am super biased as a creator. Yeah. I didn't use ads to build chatecherey, but chrtecary was well suited to Twitter to being spread, right? There's lots of other products that aren't. And if we're going to achieve this positive economic. outcome of the internet, which I'm really passionate about, about small businesses with low-cost structures that are made possible by having the entire world as their market, you need a way to

reach the world. And that's what's going away. Yeah. Yeah. And it's frustrating because it feels like Apple's mostly getting away with it. And just to clarify, what I'm saying is that to the extent Apple's claiming they're doing all of this for the benefit of their customers and not the future of their own business, I don't buy it. I'm sorry. That sounds like complete. bullshit to me. And I don't know anybody who works at Apple. I'm sure a lot of them have different takes on it. But I just do not buy it. And as Americans, we have a long history, until the last 40 years, we have a long history of not standing for corporate behavior like that. But for now, we can, I'm sure we're going to continue returning to Apple. No, I think we just generated like 10 new

emails. To keep it moving, speaking of regulation, Chris says, what's the end game for the various tech regulation pursuits. For app stores, content moderation, hardware, will global regulation converge or diverge? And what does global tech look like in the latter scenario? So very curious for your answer here. Your answer here, you know more about EU regulations than I do. It's also relevant to our next question. What do you think?

It's tough to say. I mean, I've written less about regulation over the last year and a half. I think I mentioned in a previous episode, I was just getting burned out. It's like, it's not very fun and interesting to talk about for one. Number two, stuff takes a long time to sort of work through and then be applied. And then number three, it just seemed to have no impact. I mean, I was shouting from the rooftops that GDPR was not going to work out the way it wanted to. It was just going to be a big pain in the neck for consumers, like we need all these prompts and annoyances.

And it was just going to strengthen the dominant ad platforms, which is exactly all which happened. and there's a whole bunch of people in Europe now. They're doing new regulations. And you read these articles and they're like, we need to not make the same mistakes that we do with GDPR. And it's like, but you're going to because these mistakes were so predictable. And if you couldn't see them have a sort of systemic view of how this is going to play out, you're going to make sort of the same mistake all over again.

And now like the EU just passed an AI sort of regulation thing. Like they're trying to make like the creators of these models liable for any harms that may result on the road. And my big concern and worry is, like, you can control this stuff. You can be China. You can go all the way and get control of the Internet and lobotomize it and sort of use it to your interests. But you have to sort of take steps that no one in the West is willing to take. You have to have hardcore censorship.

You have to find the person that posts is something you didn't like and actually lock them up. There has to be like real consequences because censorship work. when you start self-censoring, right? Because you're worried about the consequences, not just as something that gets get taken down. And if we don't have that in us to do that, what we're going to end up with is this half-ass sort of thing where we cut off all the good actors

and the stuff that's on the edge. And we don't actually solve these problems we're looking to solve. And it's like the worst of both worlds. I mean, the COVID stuff's been mind-blowing in this regard where, you know, there was lots of stuff that's accepted wisdom today, whether it be things like there is a slight chance of mildcarditis

if you have the vaccine, or even better example, if you're vaccinated, you can still get COVID. There were lots of people kicked off platforms for saying that. Yeah. Which we all know to be true. Honestly, it was a mind, the emoji with the head exploding moment that the pandemic was the ultimate example of high uncertainty. We didn't know what was going on. And in that moment, that's when we decided this is reason why we have to actually double and triple down.

And the motivation was, oh, we have to get everyone vaccinated so we can eradicate an epidemic. And it turned out that wasn't possible. You create this systemic distrust in this sort of regime, right? You're just like, well, well, this guy who said that you can still get COVID after you're vaccinated got kicked off the platform. this other person who says that vaccines will, are killing people left and right, also got kicked off the platform. Who knows what I can believe?

Maybe they're both right. And there's a bit here where one of them is clearly wrong. You know, the vaccines clearly prevent, you know, death, particularly the older that you are. And so they're worth taking. Like the risk reward ratio is absolutely there. But when you start just widespread blocking and kicking everything off, you actually make it harder for people to,

ascertain what's true and what's not. And this is an internet, the internet, there needs to be a shift. Ethan in our previous question talked about user agency. The only real way to navigate this in the long run is to better empower people to have better understanding and user agency. But you do that in part by thinking through what does reputation actually mean on the internet, right? Like from a trajectory perspective, I write every day.

I have lots of takes on lots of stuff. and I get stuff wrong. So what's the solution to that? Is it to write less? Is it to only write about three things that I happen to know about? Well, no, the solution I've chosen is I just correct stuff immediately. And when I get something wrong, I will say, number one, I got it wrong. Number two, this was my thought process when I made this take.

This is why I thought it was. Here's the mistaken assumption. I try to just really interrogate myself. And the goal here is not to be right constantly. that's impossible, it's that for people to trust me and say, look, even if bank gets wrong, I know he'll come back and tell me because it's hard. No one can do all their own research. Like I'm not at all advocating that at all. You need people you trust. The problem is because we need people we trust, it's so damaging for the people that ought to be trustworthy to be over extending

themselves and trying to shut down dissent and debate because they're just destroying trust in themselves when they're more important than ever. Or downplaying facts. Like to the extent COVID is an example here, one of the things that drove me insane was by June or July of 2020, it was clear to everybody that the chances of transmitting COVID outdoors was really, really low. And what was frustrating is that you wouldn't necessarily hear people, like, hear credible experts or large media organizations amplifying that message.

So I would read it here and there and think, okay, I think we might be all right, just meeting up with everybody outside and doing it safely. And there would be no confirmation of that. And there were entire cities that had outdoor mask mandates for like years after we knew. There's an outdoor mask mandate here. It still is. It's crazy. Well, this whole nudge philosophy where you're trying to guide people's decision making is such a mistake on the internet.

It just doesn't work. Like when there was just one source of news, yeah, maybe you could sort of nudge people along. But when there is an infinite number of information sources, again, a lot of them bad and crappy. I'm not at all denying that there's bad information out there in bad actors. There absolutely is. The question is, and so this is like our initial thing. My issue here is not denying there's misinformation. It's I have an issue with the solution we've chosen, which is trying to shut it out.

Would I think it needs to be accentuating the value? And when you shut it out, then you also have people who self-censor because there were lots of resources that knew in July 2020 that you weren't going to transmit it outdoors. But that was a case of self-censorship because they didn't want to risk. encouraging reckless behavior anywhere or they didn't want to risk like being criticized for encouraging reckless behavior. So that element got stifled. Right. And you saw this stuff. Yeah, well, there's nothing to is like, we can't say the truth because people might interpret it the wrong way, right? Yeah. So we're going to say that vac, you know, masks don't work or whatever because we have to save them for people. How about you come out and say, we don't have any solutions

right now? Mass may help you particularly if it's a very brief interaction. So, But right now, our medical people need it. So, you know, give us a few months. We're going to ramp up production. Like, be honest. This goes back to my point about corrections. Honesty is the only thing that works in building trust. And you just build trust over time.

And there was so much, we're not going to talk about that. Like, we're, like, we're just going to, because people might, in the, like, people spin up these scenarios of these worst case scenarios and use that to justify. bad acting. It's like, well, imagine if someone takes this fact and then makes a YouTube video about it and people interpret it the wrong way. So we're going to not even talk about it. Guess what? The YouTube video got made. It got made. And then people, you know, that's the problem with a lot of these COVID crackpots is 50% of what they were saying was right. And 50% was totally wrong. Yeah. But if, but if you were a trusted source saying, yes, that 50% is right. It

is true. Like I go back to the mild carditis thing. Like young men, there is some sort of to risk of malachyditis from the vaccine. Should you still get vaccinated? Absolutely. Right. Admit it. Just say yes, that's the thing. And that's what Europe.

I think Europe has handled this whole vaccine debate much better. Like they don't give modernity to young men. They focus on ones that have less of a risk over time. They're say if you're older. And it's just in people are like, oh, that's too complicated. I disagree. This attempt to oversimplify and to disguise and not talk about facts that because you're worried about empowering the other side is a mindset that's stuck in an analog world where there's

one source of truth that everyone agrees on that, just not the internet. If you're not going to go full China, then you're not going to succeed. And oh, by the way, the problem with going full China is if someone, if the person in charge gets it wrong, then you're even more screwed. I mean, look at their whole zero COVID thing. So, you know, this is a, we someone got talking about COVID in here, but, but that's, we didn't even talk about regulation, convergence and all those sorts of things. But I do have this overarching worry about the space in general. My addition to the conversation at the end here, the public is smarter than people think and smarter than leadership often thinks. And that works in two ways. Number one, the public can generally

handle it when you tell them exactly what's going on. The mask thing is a great example. We saw it. The reality is the American public did everything the authorities asked for the first six weeks of a pandemic. Exactly. Exactly. Like people, people. stayed in their houses, they didn't go out. Like all this complaints about Americans disregarding authority all happen after the authorities were changed their mind. Right to your point about COVID outside, well, you know, don't go outside. Don't go to the beach.

It's bad unless you're protesting. Then COVID doesn't spread. Which, by the way, was true. You're outside. It's probably relatively safe. But to so characterize in the context of a political issue, it just makes, it just ruins trust. The answer to bad information in the internet is to have trusted sources that people can go to. Censoring and trying to shut stuff down ruins your own trust.

It's self-destructive behavior. The outside thing will stick with me for life. I'll never forget July 2020 front page of the New York Times and people in Texas and Florida were being shamed for like hanging out on beaches. Going to the beach. And I was like, that is perfectly safe. And I was vacationing with my family. And my family were all like tutting the people in Texas and Florida. And I'm like, look, at least as far as these pictures are concerned, I see no issue here.

And I'm not sure why it's being framed that way. But that's sort of where we were. It was a weird time for everybody. Everybody handled it differently. And I get it. It was hard for all humans to process. But your points are well taken. And by the way, the other way smarter than you think manifests with the general public is that

the general public can tell when they're not getting the full truth and when someone's lying by omission or shading the facts one way or another. And that is how credibility is eroded. And that's not a good place for society to be. But I think when, yeah, this is an peak, peak podcast to avoid the course of regulation by talking about COVID. It really making people upset. Well, but I do think there's an aspect where European regulations, it just is a regulatory state in general. Like, that's their big export as far as tech goes. And so U.S. companies will have to abide by it.

And it's efficient from a product perspective to just apply those regulations to the U.S. market. Right. Because then you don't have to build it twice. It could get to a point where it does get so extreme that you actually have to build sort of different products. I don't think we're there yet. But it certainly is something to sort of watch and pay attention to.

Yeah. And I think from my standpoint, you see the EU. they appear to be much better at proactively passing laws to try to regulate some of this stuff. Like the U.S. Yeah, but the success of the laws. I know. There are massive holes and they're like really important flaws. Unintended consequences.

Yeah. And in the United States, everything is run by people who are 75 years old and don't really understand the realities of what these companies are. Well, but at the same time, why is, is there any connection to the EU's regulatory energy and the fact that all the big and major tech companies are not in the U. They're in the U.S. And I mean, Spotify is really the only major tech company and it's a $19 billion company. It's relatively tiny that's in the EU.

Like, I'm not saying there's causation. There's definitely correlation. Yeah, it's possible. But either way, getting everybody on the same page will be a challenge because of the discrepancy in terms of how active the EU is relative to the U.S. And it'll be interesting to watch it play out. And speaking of getting everyone on the same page, our next question is related. Satchin says, I'd love for you guys to dive deeper on how to address AI risk and how to address

companies and research labs. Do you think it's a real risk? Do you think anything can be done? And Satchin cites a Matt Iglesias article on Slow Boring this week, where Matt wrote about the ways regulation can slow the innovation process and how that creates a challenge of regulating AI at a global scale. He said, the additional wrinkle in the case of AI risk is that while stringent environmental regulation may push widget making to China, that doesn't necessarily have a big impact on America. If China wants to pollute its own rivers in order to make widgets,

while we still have clean water, that's not a threat to us. But if we make the entire American technology industry follow responsible practices for AI development, while Chinese companies use the irresponsible ones and win the race instead, that's bad. So what do you think of either Matt's argument or AI risks more generally? There definitely is, you can definitely, is an AI risk. I mean, you can get Matt, like we've seen The Terminator, right? Like we know, we know that there are this idea of a sort of sentient being or one that's like target seeking and the paper clip problem.

and make, you know, make X, Y, Z paper clips, and the world's full of paper clips, and we're all dead. Well, just to jump in there, I have seen The Terminator, did not know that the Terminator scenario was remotely plausible, like even a 1% chance of happening. And there's a community on the internet that takes that possibility really seriously, including Matt Iglesias and like the not necessarily urgent, but the push for regulation to guard against those possibilities.

is playing out in the next 30 or 40 years. Yeah, I mean, I am more, and I might be completely wrong on this. It's just my personal view. I'm a little bit more skeptical about artificial general intelligence generally. You know, I think we did talk about AI helping you write code and there is an aspect if, you know, once an AI can write new AIs, like, like that's kind of like the, you know, that's, that's, is that general intelligence. I think in general, we reason about AI by analogizing it to the human brain because it's, you know, that's the way, that's the way we do things.

But that's not really how AI works and how advances have happened. In fact, usually when AI efforts hit a dead end, it's because they tried to make it too human-like. And it turned out the better solution was just mass application of computing power. And so, for example, like the early chess AIs were all about, let's program. make it think like a chess master, like a grandmaster and make all the right moves. It turned out the way to beat humans was to just have a massive list of all possible chess moves and to use search to find the best move in a particular situation. It was the application of massive amounts of queuing instead of like being smart per se.

Go was a similar thing. It wasn't searched in that case. It was this machine learning and developing heuristics to do different moves. But it's the same thing. You didn't teach the computer how to play Go. you let the computer discover how to use Go via this machine learning approach and then develop heuristics so they know how to respond in different ways. And this goes back to how computers work.

At the end of the day, computers are literally computing ones and zeros. That's all it is. There's this really great article by Chris Dixon, I think it was in the Atlantic. We'll find it and put in the show notes that really walk through the development of logic that led us to the computer and, you know, understanding like how you can reduce logical statements to ones and zeros and how you can scale that up and do all these sorts of things. At the end of the day, it's still all ones and zeros. What computers, so they're really dumb, but they're dumb in a really fast way. And that's how they solve problems. That includes

these machine learning sort of issues. So it seems to me that there is a, and even with like the AI stuff and the drawing, right? Wow, they're completing creating new drawings. Well, is it a completely new drawing? As we discussed, that drawing is derivative of stuff that sort of already exists. I am sort of philosophically to that end, a bit skeptical that AIs are going to become sort of sentient and creative. Good. I don't mean creative and creating stuff, but in a decision-making process the way that humans are. Now, I might be completely wrong about this, but that's sort of my baseline assumption as far as that goes. Yeah, well, we had that cheery conversation about AI and what might be possible.

and then I read Matt's article today, and I read an article that he linked to that was headlined, AI could defeat all of us combined. And I'll read a quote, AIs might set things up so that as far as humans can tell, it looks like all of the AI systems are hard at work, creating profit-making opportunities for the company, when in fact, they're essentially using the server farm as their headquarters and or trying to establish a headquarters somewhere else by recruiting human allies, sending money to outside bank accounts, and using that money to acquire property and servers, et cetera. And it goes on from there. It's very trippy stuff. What this article makes me think is that this author would like to do all this stuff, right?

It's like anthropomorphizing his fantasies of world domination onto this computer. I mean, again, I'm not saying it's impossible. It's definitely possible. That gets to part two. I don't see, I don't think there's anything that can be done about it. Like, you go back to the internet example, if the powers that be understood the impact the internet would have and the way it would fundamentally disrupt society. And I've compared it to the printing press, which, you know, my take is it completely revamped Europe and brought to bear the Westphalian system and, you know, just complete world changing. And arguably led to world wars and like all these sorts of things. Yeah. No one would have allowed that and no one would have allowed the internet.

The problem is once the Internet's out there, it's out there and you can't put it back in the bag. Like that's sort of the fundamental nature of it, which is why I don't want to do a China Light strategy. I want to go in the opposite direction, develop new approaches to trust, new approaches to having people. Like to go back to the misinformation issue, we know from research the people most susceptible with misinformation are boomers. And that's number one. Number two, they get most of the misinformation from cable news. And then, but number three, they grew up in a world where there was one newspaper and everyone agreed on the same thing. So they see something on Facebook.

Yeah, they kind of go along with it. The younger generation, not just, you know, me clinging on to Gen X and you, you know, worthless millennial. But like, Jed Z, they don't believe anything on the internet. They know it's all BS, right? Good. And much healthier. Younger generation. Yeah.

And I think we're in this difficult period where we have some amount of society that just is, it's, Here's another analogy. Go back to COVID. COVID, we knew from the very beginning was so much more dangerous for old people. And they were, everyone was immunologically naive. What happened? Like, there's other coronavirus out there. Actually, speaking of Madaglaces, he wrote this really great article about the Russian flu pandemic of like 1890, which it turns out was actually a coronavirus.

What happened? Lots of old people died. People lost their sense of taste and smell. That coronavirus is the common cold today. It's still in circulation. It's never gone away. a good chance that's going to be the long-term course of COVID. And what's going to happen is kids will get it when they're kids.

And their whole life, they won't, they'll get sick. They'll get a cold, but they're not going to die because they got it when they were young. When you're older, your immune system isn't as good anymore. The way you dies off of your immune system just wigs out and goes crazy. It actually kind of starts attacking itself. Yeah. And so we had this sort of old person problem and that was the issue with COVID. But the young people were sort of immunized like when they were young.

I think that's an analogy there to misinformation in the internet and how we'll get through this. We've had an immunologically naive population that just they grew up spent their whole lives dealing with authority and written content, published kind of particular, giving it a certain amount of deference. They're not that fluent in the internet. I have my, my. I'm not criticizing. They're just like, like, it's a wild thing. It's an obstacle.

My dad is conservative and will send me. fake news. My mom is a diehard liberal and will send me fake news that she sees. And it's just a function of people using Facebook who aren't quite sophisticated enough to be able to sift through the bullshit and identify it as such. And so it used to be the case to publish something. This whole bit, you needed a printing press. You needed money. You needed some sort of capability. And it would have been foolhardy to waste that investment on publishing stuff that's obviously not true. That's going to get discredited and Nord unless that's like your business model. Like you're the tabloids and like the super hard.

Right. Right. So on the internet, it's no cost. You can be a bunch of script kitties in Macedonia publishing fake news to run up to the election. And it costs you nothing. And then you're putting ads on your page because all the ads are self-serve and you're making some cash, right? And the answer to this is it's impossible to tample that out. Impossible.

But again, I have, this is a classic, I'm an old man, I have faith in the young people. I have faith that they are cynical as I'll get out. They're not going to believe anything on the internet, which is correct because everything on the internet is fleeting. It's free to make, which there was no investment that went into making it. And I don't criticize your parents. They grew up in a world where it was safe to assume that if something was actually published, because there was a barrier to publishing, there probably was some value in it. Today, there's no value in it. Yeah, I think that's a good way to look at it.

I don't blame my parents either. It's difficult to adjust to this new reality. My only counterpoint to what you're saying about Gen Z, I think you're right. And that's certainly the optimistic view that they're going to be able to handle this in a much healthier way than society has for the last 20 years or so. It's hard to do worse than society has done around the world. So we're rooting for you, Gen Z. The alternate perspective, though, is that humans are just not meant to have this much information at their fingertips at all times. And having that much information is just bad for society. Like the net impact on society is

is negative. And if that's the case, then China might have the right idea where you're just cracking down on all of it. I'm going to start compiling examples for you, Ben, of times when I see things on the internet and think, you know, maybe China has the right idea here. And we should start cracking down on all of this shit. It is interesting, though, to mention that because in the China economic model, a lot of people in tech like looking at it. Like, wow, look at them. They can just make something happen. They can go build a thing or whatever. And, and, They have to worry about all this regulation and all these sorts of things. And it's interesting to think about what is the, why do we favor democracy versus like some sort of authoritarian model.

And I think the mistake a lot of people make is they, because democracy is a better way to govern. And that's clearly not true. It's a least bad way to govern. Yeah. Well, no, what we're, and this is actually maybe analysis of this AI stuff is we're trying to limit the downside risk, right? And the problem with an authoritarian model is you don't have good feedback loops. You don't like when you're screwing it up, there's no way to like stop it and put the brakes on. And I think China's in a bad feedback loop right now.

This COVID zero policy I think is insane. I think they're hurting people. Like the not taking Western, you know, vaccines, like all this sort of stuff. Everything about it, I think is a mistake. But no one can challenge it. If you even raise objections, you get at best censored. at worst, you get thrown into jet. Like, that's happened to people that have criticized she's zero COVID policy.

That's why we value democracy is for the kick the bums out aspect of it. If people do stuff we don't like, we can get rid of them. And it's a downside foreclosure sort of, that's what we're favorite democracy, or at least I do. How does it apply to AI? Now, you can apply that and say, well, we should just cut it off completely because the risk is so great that we should forego any upsets. and shut it down. It's an argument I get and respect, but you need to be honest about it.

You need to be Andrew Sharp and say, let's be China and say, let's not have AI. I think you're foregoing a tremendous amount of upside. But it's a logically coherent point, which is we just need to shut it off completely. What's not coherent is I think this whole EA sort of view of we're going to develop AI smartly and ethically.

And it's just not, it's out there. And especially this summer, with stable diffusion, it's open source. Like there's, these models are, are, and people are aware that they can be out there. And you saw just today, Open AI making Dali open to everyone. And Open AI is like very Apple-like. They like framed, we're starting Open AI because we're worried about this AI risk.

And so we're going to do research to avoid this risk. And oh, by the way, we're going to make these massive models that are super powerful and sell access to them via API and make a play to be one of the biggest platforms in the AI era, but we're doing it for safety. And it's amazing how they've characterized their mission to be all like, you know, again, it's very Apple-like. Yeah.

And oh, by the way, utterly and completely self-serving. And so it's funny, they're getting hung by their own batard today because there's a lot of criticism about them opening Dolly to everyone. But that's not safe. They're opening Dolly to everyone because they're getting their Weren's kick by mid-Journey. and stable diffusion being available to everyone, right? But that's the reality. It's out there.

It's like the internet. AI is happening this sort of machine warning driven sort of model. Well, and downstream from that thought, it's out there around the world, even if we want to restrict it within our borders. And I think that's some of what both of these past two questions have been alluding to. It's like, how do you come up with a coherent strategy if the technology is going to be available or the rules are going to be different? in the EU, in China, in India. And that's a question without a good answer right now. But I do think it's a problem we're going to have to solve on a bunch of different fronts with tech over the next 25 years.

And so it's good to raise. I appreciate the questions from both of them. But for now, let's keep it moving because, like I said, we've got a lot of ground to cover. We're already 50 minutes in. It's terrible. We need to get to the party here. Nick says, let's combine your superpowers for this one. Robert Sarver recently announced that he will sell his controlling interest, 35% stake, in the Phoenix Suns.

How much do you think the controlling interest in the Suns will be sold for? What's the expected valuation of the team? Your former boss and friend, Bill Simmons, put the valuation at $5 billion, which would net $1.75 billion for Sarver. Who are the prospective buyers that we should keep an eye out for, especially in the tech community, who would have the cash in the current market. Do you have thoughts, Ben? Bill Simmons is your former boss, not mine. For the record.

I think he's your friend, my former boss. I think he was accounting for both of us on that one. I don't know. I'm not going to name names. I don't know. I haven't heard anything. I don't know who it is. I think the NBA is kind of a really weird thing to value because the number one driver of value is scarcity.

There's only 30 teams and owning an NBA team is pretty cool. And so like there's there's some aspect where a huge part of the value is divorced from the underlying sort of realities. And the truth is the way you make money in the NBA has traditionally been because your franchise increases in value sort of over time. So which drives back, it's all about it's all about scarcity. Now with some of the salary cap stuff and and the luxury tax and the change to BRI being 50-50, we're getting deep into nerd stuff here, you can actually make money owning an NBA. team. If you don't pay the luxury tax, you'll probably make some money. But like the, the amount of money you're making, you can't do like to put it in a spreadsheet and say, that's how you get a valuation. The valuation is at the end of the day what people are willing

to pay for it. And it's a relatively scarce asset. And so that's number one. So it'll probably go for a lot because owning NBA team is cool. I think Phoenix is a good market. It's a warm weather market. It's close to California. Like there's lots of things going for it. But the, you know, the NBA, it's kind of in a tricky place because the national TV rights deals will probably continue to be good just because like that ESPN needs exclusive content, you know, TNT needs exclusive content to stay relevant in the bundle even as it's shrinking. But this whole RSN regional sports networks are a total disaster. They're losing money. Diamonds like going to go bankrupt like Bolly Sports. Like the leagues might have to buy them.

So the actual monetizing aspect of the NBA is. is a little shaky, shakier than it was 10 years ago. But again, I don't think that's was actually driving the valuation, so it probably doesn't matter. Yeah, I mean,

the valuations, that's a graph that goes one direction and has really spiked over the last 20 years or so, or particularly over the last 10 years, I'd say. So when it comes to questions like this, I never bet the under

when someone throws out an estimated value for an NBA or NFL team because they appreciate so quickly these days that people, are willing to throw caution to the wind and buy in. And almost always, that's a great bet. So $5 billion, probably a little bit high. I think Bill's actual guess was closer to $4.

I like how you said, I never go under and then you immediately went on. I did. But I think it's because Bill's estimate was, I think, $4.4 billion. And so it'll be closer to $4 than $5, but that's a massive leap from any other sale we've seen over the last couple of years in the NBA. And we'll see though. I mean, there is definitely that money is not as easy to come by. You know, with the tightening that's going on.

Again, the economics, I think, are going to get maybe a little weaker. The NBA has like a ratings problem, too. Just like the, you know, is this going to be something that's going to be as big of a deal in 30, 40, 50 years? But then again, who's actually holding it that long? Like, like, you have, it's like I would hold it that long. Like, there's 30 teams. You only get, like, you have one of them. That's, that's what drives the valuation.

And Bill knows a lot of rich guys in basketball. So I trust him on this stuff. Him and Brian Winhorst are the two best reporters when it comes to owner-level intrigue in the NBA. So I trust his instincts. Can I ask this next question? Please, go for it. On the Nvidia episode, Andrew seemed to imply that video games are childish in that he appropriately grew out of them at 13. given that he covers basketball for a living and spent 10 years as a reporter and was created a show called NBA After Dark for Grantland.

Well, that sounds real important. I'm curious. I'm curious. Why are video Williams childish and frivolous? Well, sports are not. NBA After Dark was great because we didn't even cover actual basketball. We were covering like TMZ news about basketball players. Right down your right down your alley.

Thank you for the question. Honestly, Hadrian, I laughed my ass off when this came in. And I finished recording the other night and was cracking myself up even before I got this email. Because, like, thinking back, the funniest part about that episode was you were trying to be very polite about gamers the entire time. And you were visibly uncomfortable when you saw me, like, veering toward mockery and veering toward mocking half our audience. And then it also occurred to me in the aftermath, like the melodramatic YouTube videos from NVIDIA fans, they are ridiculous. But in fairness, if I were to write what I actually think about the Washington Wizards, people

would be horrified at like the level of passion and the level of disgust, the disdain that I feel based on the way that team has been managed over the last couple of years. and I think any ordinary person who's not obsessed with basketball would be like, this guy needs to get a grip. Nobody should care this much about professional basketball. So I have absolutely in a glass house on this one. And I think that the solution is to not hate on anybody's passion. People can be passionate about all sorts of different things.

A lot of people connect with their friends through video games. I connect with my friends through group chats about basketball. ball different strokes for different folks, but I'm not here to be mad or critical toward anybody. Growth. It's good to do growth on this podcast. I think you can hate on extremism in all forms. Like there's, if you're, if gaming is ruining your life, then yeah, that's probably a bad thing. If sports are ruining your life and you're treating your family like crap and breaking your TV, you're throwing the room wet at it, probably not a good addition to your life. If there is a means by which just relax, like, like, or, or interact with other people. Like, by all means, all power to it. I mean, I'm a big, like, sports is like the one, like that, that's my thing as well. I mean, like we've jokes about F1, like, you know, obviously basketball. I'll watch a tennis match if it's not. Like, give me any, I just, any sort of competitive sort of thing that's going on. I love it. I love watching it. I enjoy it. And, and yeah, so I'm glad you're, I'm glad you've improved your, your view on this. Well, and the only other.

thing I'll add is that Hadrian said, Andrew said he appropriately grew out of video games at 13. What I said was I grew out of computer games. I continue to play video games until I was like 28 years old. I hit a point where I had to hang up the sticks and stop playing FIFA like every single night. But I had a good run of sports video games. And if Sharp Tech ever really hits it big and we're rolling in money, the first irresponsible purchase I will make is like a $2,500 F1 simulator that allows you to basically feel like a driver.

We're not there yet, but that's part of my five-year plan. But speaking of plans, Toby says this. He says, I'm off to a tech conference next month. I have my Stretaquiry hoodie, but when will I be able to get my matching, sharp tech porcupine swag. Do you have thoughts here, Ben?

I think we need to be a going concern for more than a month before we start talking swag plans. But I mean, it's up to you. This is where we might need to schedule a consultation with the other Ben, your basketball podcast podcast with Ben Golver, who is the most gifted self-promoter I've ever seen in my life. I sold Shuckery merch once. And I hated it so much. I just like putting the links in, go to this. the store, buy this, you always be selling, et cetera, et cetera.

Like I mentioned before I haven't done ads for check or something like that, even though I write about it and stuff. Honestly, a big part of it is I feel so fortunate when the biggest breaks I got in life is that I managed to build this business on the internet. And thanks to social media, my readers could do all the promotion. I'd be out there like selling myself super hard, even though I did at the beginning. I'd be replying to everyone, oh, you should check this article. It's, you know, about this sort of thing.

So I don't like doing it. It makes my skin crawl. on the other hand, our logo is awesome. So we're going to have to do, maybe a podcast will be a little easier to sell than sticking it in that newsletter every morning, which I did not enjoy doing. Well, this is up to the listeners themselves.

If they tell a friend to tell a friend and we grow the community, eventually there will be too much demand for us to ignore. And we're going to work around Ben's inertia that way. So just keep the push going. And we'll close with this. Ben says, on the most recent show, you said self-driving cars are always five years away. So what you mean is self-driving is Bruno Cabocalo. And Ben, this is my favorite email that we got over the last 96 hours. This is what we need on the show. I think the Sun's question was a good start. But autonomous vehicles are the Bruno Cabocalo of tech.

is the tech basketball crossover that we're going to be trying to hit on every single episode. That's the gold standard. You're really trying to stretch my explanatory skills by having me say who Bruno Cabocalo, a draft pick from Toronto, like eight years ago, who is, you know, the next Janus. But yes, I think that there is, yeah, I don't know, I'm just going to leave it. People do not need to know who Bruno Caboclo is. If you don't, just keep it moving. Just know that Andrew was delighted.

That's the most important. I was delighted. I think we could probably be the best tech podcast anywhere. We could definitely be the podcast with the best tech NBA analogies anywhere in the world. So that's going to be the goal every week. And for now, Ben, I appreciate everyone who wrote in. We're going to roll over some questions. We did not get to hit on this episode.

And if you have questions, comments, takes, email at sharptech.fm is where you can reach us. And I look forward to hitting a bunch more as we come back next week.