Tech Brew Ride Home - Tue. 06/17 – Open AI Still Needs To Placate Microsoft

Episode Date: June 17, 2025

Among the many snags to OpenAI shifting to for-profit, the Microsoft snag is still the biggest issue. More Intel job cuts coming. Would you believe a Roblox game involving gardening is maybe bigger than Fortnite? And two big firsts: most people get their news from social media, and streaming is now the king of all TV watching. Sponsors: MackWeldon.com promocode BRIAN Links: OpenAI Seeks New Financial Concessions From Microsoft, a Top Shareholder (The Information) OpenAI and Microsoft Tensions Are Reaching a Boiling Point (WSJ) OpenAI wins $200 million U.S. defense contract (CNBC) Intel will lay off 15% to 20% of its factory workers, memo says (The Oregonian) Amazon Prime Day stretches to four days of deals this year (The Verge) Generation Alpha’s FarmVille Is Growing Like Crazy in Roblox (NYTimes) For the first time, social media overtakes TV as Americans’ top news source (NiemanLab) It’s Official: Streaming Is Now the King of TV (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeBrand home for Tuesday, June 17th, 2025. I'm Brian McCullough today. Among the many snags to Open AI shifting to for-profit, the Microsoft snag is still the biggest issue.

More Intel job cuts coming. Would you believe a Roblox game involving gardening is maybe bigger than Fortnite? And two big firsts. Most people get their news from social media now, and streaming is now the king of all TV watching. Here's what you miss today in the world of tech. Remember that whole OpenAI switching to being a four-party? profit concern thing. You'll recall there are legal hurdles that need to be jumped to make that happen, but also there's the renegotiation with OpenAI's main investor Microsoft that needs to be sorted out.

How's that going? Quoting the information. OpenAI wants Microsoft, the startup's biggest outside shareholder to have roughly 33% stake in the reshaped unit in exchange for foregoing its rights to future profits, according to a person who spoke to Open AI executives. OpenAI also wants to modify existing clauses in its contract with Microsoft that gives the software firm exclusive rights to host OpenAI models in its cloud, and it wants to exempt a planned $3 billion stock acquisition of AI coding startup windsurf from the existing contract between the parties that grants Microsoft access to Open AI intellectual property, according to that person and another person who spoke to Microsoft executives about it.

Renegotiating details of the company's cloud arrangement could have far-reaching consequences in the tech industry. Open AI has told investors it wants to get out of its exclusive cloud contract with Microsoft, which makes Microsoft the only cloud provider that offers Open AI models for sale through an application programming interface, one of the people said. Microsoft rivals Amazon and Google could jump at the chance to host OpenAI models on their servers, which would make it easier for their cloud customers to use them. Google has already lobbied the government to kill Microsoft's exclusive right to host Open AI models. Microsoft hasn't agreed to OpenAI's turn. Microsoft has an agreed to OpenAI's terms and is looking to get other concessions from the startup, such as extending

the length of time in which it has the right to use OpenAI's intellectual property, according to the person who spoke to Microsoft executives about it. OpenAI's current deal with Microsoft gives the software giant the right to use OpenAI's IP through 2030, according to the two people with knowledge of the talks. OpenAI leaders are concerned about including WinSurf in the current deal because WinSurf competes directly with Microsoft's GitHub co-pilot, said one of these people. Microsoft has blessed OpenAIs plans to acquire WinSurf under their current contract, said the person who spoke to Microsoft executives about it. Open AI also wants to cut the amount of revenue it shares with Microsoft in the coming years, in part, by excluding new products from the existing agreement. If the companies don't change the 20% cut Open AI owes to Microsoft, Microsoft could be in line to get $35 billion in payments in 2030 when OpenAI has projected it will generate $174 billion in revenue.

In addition to current disagreements about Microsoft's equity stake and the windsurf acquisition, the firms are also tussling over the definition of artificial general intelligence, AGI, which Open AI has said is AI that can outperform humans at most economically valuable work. Their current agreement says Microsoft will relinquish its rights to OpenAI revenue and IP when the startup achieves AGI. Microsoft has argued AGI is still years away, while Open AI leaders have argued that AGI could be much closer. The two firms are still negotiating a possible change to the current contract's definition of AGI,

one of the people said, end quote. Meanwhile, according to the journal, Open AI and Microsoft talks have become so fraught that Open AI executives discussed accusing Microsoft of anti-competitive behavior before U.S. regulators in an effort to get some leverage. Quote, Open AIs executives have discussed what they view as a nuclear option, accusing Microsoft of anti-competitive behavior during their partnership people familiar with the matter said. That effort could involve seeking federal regulatory review of the terms of the contract for potential violations of antitrust law, as well as a public campaign, the people said. The companies continue to be at odds over how much of OpenAI Microsoft would own if it converts

into a public benefit corporation. Microsoft is currently asking for a larger stake in the new company than OpenAI is willing to give. People familiar with the matter said, OpenAI has to complete the conversion by the end of the year or it risks losing $20 billion in funding. Microsoft first invested $1 billion into OpenAI in 2019. Under the current contract, the tech giant has the exclusive right to sell OpenAI software tools through its Azure cloud and has preferred access to the startup's technology. Microsoft is also supposed to be OpenI's only compute provider, though it allowed the startup to create its own data center project Stargate last year. The two now compete on products ranging from consumer chatbots to AI tools for businesses. Last year, Microsoft CEO Satchanedla,

hired a rival of OpenAI CEO Sam Altman's who launched a secret effort to build models for Microsoft, end quote. Speaking of the U.S. Defense Department has awarded OpenAI a one-year $200 million contract to develop prototype AI tools that address challenges in warfighting and enterprise domains. Quoting CNBC, the department announced the one-year contract on Monday, months after OpenAI said it would collaborate with defense. Defense Technology startup and Dural to deploy advanced AI systems for national security missions. Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains, the Defense

Department said. It's the first contract with OpenAI listed on the Department of Defense's website. Anderil received a $100 million defense contract in December. Weeks earlier, OpenAI rival Anthropics said it would work with Palantir and Amazon to supply its AI models to U.S. Defense and Intelligence agencies, end quote. At an April event at Vanderbilt University, OpenAI CEO Sam Altman said the company is committed to working in national security, calling it a priority. OpenAI later announced that a new Department of Defense contract is the first under its OpenAI for government initiative, which includes the existing chatGPT.gov product.

The program aims to provide U.S. government agencies with access to customize AI models, product support, and roadmap insights. The Pentagon said the agreement is with OpenAI public sector LLC and that most of the work will take place in the national capital region around Washington, D.C. Intel's manufacturing VP says Intel plans to cut 15 to 20 percent of factory staff starting in July, quote, to meet our affordability challenges and current financial position. Quoting the Oregonian, these are difficult actions, but essential to meet our affordability challenges and current financial position of the company. It drives pain to every individual.

Intel Manufacturing Vice President Nagat Shandresakaran wrote to employees Saturday. He said the company is targeting job reductions between 15 and 20 percent, with most of the cuts taking place in July. The Oregonian-Sage Oregon Live viewed a copy of the email whose authenticity was confirmed by four employees. Intel declined to comment on Saturday's memo, but reiterated that the company would treat people with care and respect as we complete this important work. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution, the company said.

We are making these decisions based on careful consideration of what's needed to position our business for the future, end quote. Intel ended 2024 with 109,000 employees, but it's unclear how many were part of its factory arm known as Intel Foundry. The Foundry Division spans a wide range of roles from hands-on factory technicians to advance researchers developing microprocessor technologies years ahead of market release. While Intel is preparing significant layoffs across multiple divisions, employees say the company hasn't detailed how many positions will be cut from each unit. Workers believe the effects will differ from department to department. Still, the overall cuts are expected to number in the thousands and could exceed 10,000 jobs. Amazon plans to hold Prime Day 2025 from July 8th at

12.01 a.m. Pacific time through July 11th, lasting four days instead of the usual two. Quoting the verge, four days is a very long time, and we currently don't know if Amazon plans to blast out the majority of good deals on day one or divvy them out evenly across the event's duration. At least it will attempt to organize the deals with a new today's big deals feature for subscribers, which recaps the biggest deals across various categories, end quote. One key thing to remember, you can only take advantage of prime. Day deals if you are a Prime subscriber. But one loophole is you can be on a trial subscription during Prime Day, and if you're between the ages of 18 and 24, you can get a six-month

free trial subscription of Prime, so it might be worth at least running the trial to rack up the savings. New Biggest Game Alert, Grow a Garden, is a simplistic farming simulator game within the Roblox platform, and it hit 16.4 million active players on June. June 14th, beating Fortnite and other games peak concurrent user numbers. Quoting the Times, anyone older than 25 likely has fond or madly frustrating memories of playing FarmVille, the popular browser game that let users grow virtual crops and herd-pixelated animals. Agriculture, aficionados can rejoice. Generation Alpha's Farmville has arrived. Grow a Garden. A simplistic farming simulation that involves planting seeds and collecting exotic

pets has exploded as one of the most highly played titles of the year. Technically, an experience within the game creation platform Roblox. It smashed its own record for concurrent users by reeling in 16.4 million active players on Saturday. It is a genuinely shocking feat. That number is more than Fortnite's peak and greater than the concurrent player records of the top five steam games combined. Growa Gardens' allure might baffle anyone who's never toyed with slow-paced world builders like Animal Crossing or Tamadachi life. Players nurture a popery of plants and pets, which they can buy and sell in exchange for the in-game currency shekels, which can also be bought within Roblox in-platform currency Robux, which can itself be purchased

with real dollars. Plots begin barren before users transform them into fantastical safaris of shimmering frogs and prancing monkeys that each have their own special abilities. Suddenly a player's dismal square brims with vibrant vegetation and beanstocks shooting into the sky. Numerous qualities elevate the game from a standard farm sim. It is the first major Roblox game to integrate offline growth, which encourages players to return to see changes. There are multiple time-sensitive components, including shops that restock with new items every five minutes and weekly drops, like the fruit-pollinating busy bees with exclusive items that feel like can't miss moments. Every little element has been shaped to keep people hooked,

including blind box pet eggs and the ability to steal things from other users' farms. These digital ranchers are so feverish that some have resorted to third-party sites to acquire the most legendary commodities. People have spent over $100 on eBay listings for the cosmic-looking candy blossom tree and for titanic dragonflies. At its peak, Grow a Garden had more than triple the population of New Zealand, the home of Jansen Madsen, who runs Splitting Point Studios, which scouts and acquires rising games on the platform. When Madsen 28 picked up Grow a Garden from the Roblox creator BMW Lux in April, it had about 2,000 concurrent users. I was immediately like, this is pretty cool, said Madsen, who is also known as Jandall. Farming is pretty innate to humans.

If you think about it, the past thousands and thousands of years, it's what everyone's done. Madsen's team of about 20 people scaled the game, fixing bugs, and adding key elements like Daily Quest. And it is still tinkering. Madsen teased an update involving dogs that would recover fossils that could be traded in for sand-themed fruits, and eventually a feature that allows people to trade items. He also wants to have celebrities host live events with him, end quote. Finally today, two notable firsts, first of the first. According to Reuters' 2025 digital news report, for the first time, Americans' top news source is social media at 54 percent,

overtaking TV at 50 percent, and news websites and apps at 48 percent. Quoting Neiman Lab. The proportion accessing news via social media and video networks in the United States is sharply up the report's authors write over taking both TV news and news website slash apps for the first time. And this isn't just a story about big numbers. These creators are also attracting audiences that traditional media struggle to reach. Some of the most popular personalities over index with young men with right-leaning audiences and with those that have low levels of trust in mainstream media outlets, seeing them as biased or part of a liberal elite. Although social media and personality-based news are also on the rise in other countries, the changes are happening, quote, faster and

with more impact in the United States. The proportion that say social media are the main source of news, for example, is relatively flat in Japan and Denmark, though it has also increased in other countries with polarized politics, such as the UK, 20%, France, 19%. But in terms of overall dependence, the United States seems to be on a different path, joining a set of countries in Latin America, Africa, and parts of Asia, where heavy social media and political polarization have been part of the story for some time. Also, the pivot to video is happening whether you like it or not. We find striking generational differences.

Younger groups, especially those 18 to 24, are much more likely than older ones to prefer watching or listening to the news. This suggests that over time, publishers may need to adjust resources in the newsroom to produce less text and more audiovisual content. In the U.S., between 2021 and 2025, the share of population consuming news videos, at least weekly increased from 55% to 72% with most of the news videos being viewed on social platforms. And the more video-centric the platform, the more likely its leading lights are something other than traditional news publishers. Creators now play a significant role in all the social networks apart from

Facebook with traditional media gaining least attention on TikTok. This is not surprising, as publishers have struggled to adapt journalistic content in a more informal space, as well as worrying about cannibalization of website traffic by posting in a network that is not set up for referral traffic, end quote. And then the other first also involves video. According to Nielsen, in May, Americans watched more TV on streaming than on cable and broadcast networks combined. The first time streaming was king of TV over a full month. Quoting the times, Nielsen began comparing streaming viewership with traditional network and cable television in 2021. At that time, Even with streaming on a rapid ascent, the gap between the two was huge.

Nearly two-thirds of all TV time was spent watching cable and broadcast, and just 26% was with streaming. That lead has now collapsed. Here's how streaming overtook traditional TV. It's no surprise that younger viewers were the first to jump to streaming, but another group has since made the leap as well, viewers over the age of 65. Older viewers watch a lot of television, more than any other cohort. One-third of all viewing comes from this group. they have been moving to streaming in droves in the past few years, particularly to platforms that are free and require no subscription. For instance, since 2023, viewers over 65 are the fastest growing age group for watching YouTube off a television set. Their YouTube watchtime last month grew

106% from May of 2023, Nielsen said, and the amount they're watching on YouTube is equal to the viewing totals of children under 11, another age group that watches a ton of TV, and YouTube in particular. Older viewers have taken to free streaming services like Tobe, Roku, and Pluto with Gusto. In May, the three services accounted for 5.7% of television time for people of all ages, more than Disney Plus and Hulu combined. The free platforms have ads, but for that demo, it's not particularly jarring because they're used to watching ads, said Brian Fur, the senior vice president of product strategy at Nielsen. Older viewers are a major reason that gun smoke, the fabled Western that premiered in 1955 and went off the air in 1975,

has been making regular appearances in Nielsen's most watch streaming series lists over the past few months. Cable TV viewing has fallen much more than network television over the last four years, 39% overall, Nielsen said. What has surprised industry analysts is just how much media companies themselves have helped accelerate the decline. Cable networks like USA, TBS, and MTV were rich with original programming just a few years ago, but they air few scripted shows now. That is because media executives have rapidly reordered their budgets, steering investments toward their streaming services. As a result, many of the channels are effectively zombie networks that do little more than play marathons of Law and Order SVU, The Office, or Jaws.

In turn, viewers started to give up, as did advertisers. Now NBC Universal and Warner Brothers Discovery executives are genuinely throwing in the towel on cable altogether. Both are spinning off the vast majority of their cable holdings into separate companies. At the same time, subscriptions to niche streaming services like Hallmark Plus, Britbox, and Crunchyroll have grown sharply over the past couple of years, filling a role that used to belong to specially cable networks, end quote. When my parents visited us last month, I was shocked to discover that my 75-year-old father is now a YouTube devotee. Now watches hours of YouTube a day. Why? Well, his big hobby has always been collecting 1970s-era stereo and hi-fi equipment, and darn it,

if there aren't like dozens of creators on YouTube with channels with subscription numbers in the millions, who are only devoted to, you guessed it, 1970s-era stereo collecting. I knew my kids were addicted to YouTube, but now my father is as well, one small but very real bit of anecdotal evidence supporting what we just talked about. Talk to you tomorrow.