Tech Brew Ride Home - Tue. 06/24 – Is Microsoft Struggling To Sell Copilot?

Starting point is 00:00:00 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 Tech meme right home for Tuesday, June 24th, 2025. I'm Brian McCullough today. A new Xbox-branded Meta Quest. Amazon is expanding same-day delivery even more. What does it mean for the AI race if ChatchipT seems to be out-competing Microsoft's co-pilot offerings in the enterprise space? Why is Wall Street leading the way on AI adoption? And what exactly is Mira Miradi's big new AI startup going to do?

Starting point is 00:00:58 Here's what you missed today in the world of tech. Microsoft and Meta have unveiled the 300 and $99 METAQuest 3S Xbox Edition, offering a few updates to the $299 MediQuest 3S, available in extremely limited quantities, quoting Windows Central. In the box, you get the 128-gibite MetaQuest 3-H headset, not the more powerful 3, 2 MetaQuest controllers, a pre-paired Xbox Bluetooth controller, a HoloLens-style MetaQuest Elite Strap, 3 months of Meta Horizon Plus, and 3 months of Xbox GamePass Ultimate. it. The standard MetaQuest 3S costs $299 at Amazon, but when you start adding things like the Elite Strap, Xbox Game Pass, the controller, and so on, this bundle actually works out to be

Starting point is 00:01:47 a pretty good deal. The headset and controller themselves come in an Xbox carbon black colorway, complete with Xbox-style Velocity Green accents, and it looks incredibly nice, I must say. The Elite Strap included is a huge step-up from the regular Velcro fabric straps, typically included in these headsets, and comes with a HoloLens-style dial for incremental adjustments. This is a vastly more comfortable option than previous VR headsets I've used, so kudos for that. As much as I've railed on VR in the past, I have to admit, the MetaQuest 3S experience is a huge, huge step up from other headsets I've used, primarily due to the inside-out tracking. The MetaQuest 2 was an absolutely frustrating experience. Having to create boundaries and

Starting point is 00:02:26 set floor heights every time you wanted to use it was a chore. Wearing a huge blindfold on your face while losing access to your hands for anything other than controlling VR was simply an irritating experience that really required. personal investment. Certainly not the most relaxing way to game by any means. The Quest 3S is a huge step up, thankfully. With the Quest 3S, you can now control Windows with hand tracking, freeing up your hands to actually do things like Navigate and, in this case, hold an Xbox controller. It feels more natural and, dare I say, more HoloLens-like, albeit without HoloLens' absurd price tag and total lack of support for apps. It also doesn't have HoloLens' strange letterboxing limitation either.

Starting point is 00:03:02 You can get into Xbox cloud gaming without ever needing to reach for the top. plus controllers or enter a full and often nauseating immersive 3D environment. With Xbox Cloud Gaming pre-installed and the Xbox Meta-Controller pre-paired, you're pretty much ready to go out of the box. A quick sign-in and you can immediately begin playing anything on the Xbox Cloud Gaming catalog and bring your Xbox console saves with you as well. You can pin windows to follow you around the house, set them to be extremely large cinema-sized displays,

Starting point is 00:03:29 multitask with other windows side-by-side, with a YouTube video, or even shut off the cameras and immerse yourself in a virtual environment of your choosing. With Xbox Cloud Gaming's latency improving all the time playing Space Marine remastered felt virtually one-to-one native on 5 gigahertz Wi-Fi 6E, Xbox Cloud Gaming feels like it's improving every time I use it, which is ideal for anyone who picks up the MetaQuest 3S Xbox edition for this specific scenario, end quote. Amazon says it plans to bring same and next day delivery to tens of millions of people who live in more than 4,000 smaller U.S. towns by the end of 2026, quoting the verge.

Starting point is 00:04:10 items categorized as everyday essentials, including groceries, beauty products, household, goods, or pet food, will now be available to small town or rural customers for same-day or next-day delivery. If they are prime subscribers, they get unlimited free same-day delivery when spending over $25 at checkout. Amazon has already expanded its speedy delivery options to customers in over 1,000 small or rural communities, and people are buying these essential items at a higher rate than before. Amazon says over 90% of the top 50 items purchased for same-day delivery are everyday essential. items. The company was able to accomplish this massive expansion by spending on a lot of money, $4 billion, according to Amazon, on building new facilities and hiring new delivery drivers.

Starting point is 00:04:49 It's also transforming existing delivery hubs in these smaller communities into hybrid facilities where Amazon packages can be prepped for final delivery. And the company is using machine learning to better predict what items each communities buy in large quantities so it can make sure to have those items in stock for faster delivery. This includes the most popular and frequently purchased items like wireless headphones, coffee pods, crackers, paper towels, and diapers, and products curated to fit local preferences like wild bird food in Dubuque, Iowa, travel backpacks in Finlay, Ohio, and after sun body butter in Sharptown Maryland, Amazon says, end quote. The NHTSA says it is investigating incidents of Tesla's robotaxis, apparently violating traffic

Starting point is 00:05:39 laws, like by entering opposite lanes, as seen on social media, and hey, One of our old friends of the pod is quoted right here, quoting Bloomberg. In one video taken by investor Rob Maurer, who used to host a Tesla podcast, a Model Y he's riding in enters an Austin intersection in a left-turn-only lane. The Tesla hesitates to make the turn, swerves right, and proceeds into an unoccupied lane meant for traffic moving in the opposite direction. A honking horn can be heard as the Tesla re-enters the correct lane over a double yellow line, which drivers aren't supposed to cross.

Starting point is 00:06:11 In two other posts on X, initial writers in driverless model Y, shared footage of Tesla's speeding. A vehicle carrying Sawyer Merit, a Tesla investor, reached 35 miles per hour shortly after passing a 30 miles per hour speed limit sign, a video he posted shows. In a separate live stream from Herbert Ong, a YouTuber with more than 123,000 subscribers, he commented that the vehicle was going faster than the posted limit of 35 miles per hour. It's going 39 right now, which is perfect, right, because I don't want to drive at 35, and it's driving at the same flow of traffic, Ong said. If everyone else is driving at the speed, you want to be at the same speed. Representatives for Tesla and the Austin Police Department didn't immediately

Starting point is 00:06:48 respond to requests for comment on the videos. The automaker recalled more than 362,000 vehicles in February 2023 after NHTSA said its driver assistance system may allow cars to infringe on local traffic laws. A spokesman for the City of Austin said it hadn't received any safety incident reports regarding Tesla's robotaxies over the weekend, end quote. Meanwhile, Waymo has launched its robo taxis in Atlanta, available exclusively in Uber's app, covering a $6,000. square mile area. Quoting the verge, Waymo's vehicles will only operate within a 65-square-mile service area that includes Atlanta's downtown, Buckhead, and Capitol View neighborhoods. The vehicles don't drive on highways

Starting point is 00:07:26 yet, nor will they make trips to the airport. Another thing to consider, simply calling an Uber in Waymo's service area doesn't guarantee a robotaxie will show up. Like in Austin, the companies will start with a small fleet of vehicles and grow from there. Customers can increase their chances of being matched with a Waymo vehicle by opting into autonomous rides in the ride preferences section of their Uber app. The rides will cost the same as a typical UberX, Uber Comfort, or Uber Comfort Electric ride. Once the Waymo vehicle arrives, customers can unlock the door, open the trunk, and start the ride from the Uber app. Rides can also be started by pressing the button on the rear touchscreen in the vehicle.

Starting point is 00:08:02 Uber will manage fleet services, including vehicle cleaning, maintenance, inspections, EV charging, and depot operations. The company is contracting with Avmo, formerly moved cars to handle these tasks. Waymo is still responsible for vehicle testing, roadside assistance, and certain elements of rider support. The companies will obviously share in the costs and the revenue produced by the Robotaxi service, though both companies have declined to share the split, end quote. This is interesting vis-a-vis the strategic struggle going on right now in AI. Interviews with more than 24 Microsoft customers and salespeople show that Microsoft is apparently struggling to sell co-pilot to enterprises as many employees at enterprises,

Starting point is 00:08:49 seem to prefer chat GPT, quoting Bloomberg. OpenAI has done a tremendous job of making their product fun to use, said Senior Vice President Sean Breach. Co-Pilot is still a, quote, pretty important tool he added, but more so for use with Microsoft products such as Outlook and Teams. Open AI's nascent strength in the enterprise market is giving its partner and biggest investor indigestion. Microsoft salespeople describe being caught flat-footed at a time when they're under pressure to get co-pilot into as many customers' hands as possible. The behind-the-scenes dogfight is complicating an already fraught relationship between Microsoft and OpenAI. It's unclear whether OpenAI's momentum with corporations will continue, but the company recently said it has

Starting point is 00:09:27 three million paying business users a 50% jump from just a few months earlier. A Microsoft spokesperson said co-pilot is used by 70% of the Fortune 500 and paid users have tripled compared with this time last year. Gartner analyst Jason Wong said many companies are still testing co-pilot with relatively few employees, leaving room for various software vendors to win customers. But for now, he said it's kind of a showdown between OpenAI and Microsoft. Both companies are essentially pitching the same thing. AI assistance that can handle onerous tasks, researching and writing, analyzing data, say, potentially letting office workers focus on thornyer challenges. Since both chatbots are largely based on the same

Starting point is 00:10:04 open AI models, Microsoft Salesforce has struggled to differentiate copilot from the much better known chat GPT, according to people familiar with the situation. Microsoft's ubiquity should theoretically give it an advantage. The Windows operating system dominates the workplace and the company is baking AI into the world's most widely used suite of productivity apps. Traditionally, Microsoft salespeople have been able to persuade customers to buy the newest Whizbang because it works well with their existing software, cybersecurity defenses, and procurement practices.

Starting point is 00:10:31 The company's salespeople, new chat GPT dominated the consumer chatbot market, but expected Microsoft to own the enterprise space for AI assistance thanks to decades-long relationships with corporate IT departments. But by the time Microsoft began selling co-pilot to businesses, many office workers had already tried out chat GPT at home, giving the chatbot a major first-mover advantage. It doesn't help that OpenAI updates often take weeks before showing up in Microsoft software, thanks in part to bureaucratic snarls, the people said. Spittaro says Microsoft does its own testing on each OpenAI release to ensure it'll improve

Starting point is 00:11:03 user experience and maintain security standards. Not every change that is being made to the models actually is net positive, he said. With many office workers already familiar with ChatGPT and convinced that it's a better product, some companies are letting employees test both assistants. New York Life Insurance. Another Microsoft customer is rolling out chat GPT and co-pilot to all 12,000 personnel. After monitoring the trial and seeking feedback, the company will reevaluate which tools it wants to use for the long run, end quote. Or you can just go it alone. I find it interesting how Wall Street is kind of leading the way on AI adoption internally. Apparently Goldman Sachs has launched a generative AI assistant of its own company-wide internally,

Starting point is 00:11:50 to boost productivity and says around 10,000 employees are already using the so-called GS AI Assistant, quoting Reuters. With the AI Tools official company-wide launch, Goldman joins a long list of big banks already leveraging the technology to shape their operations in a targeted manner and help employees in day-to-day tasks. City Group has AI tools such as City Assist, which searches internal bank policies and procedures, as well as City Stylist, which helps with document summarization and comparisons. Morgan Stanley has a chatbot that helps financial advice advisors in interactions with clients, while Bank of America's virtual assistant, Erica, focuses on day-to-day transactions of retail clients. The GS AI assistant will help Goldman employees in, quote,

Starting point is 00:12:30 summarizing complex documents and drafting initial content to performing data analysis, according to the internal memo, end quote. Finally today, in the AI race, don't forget about this dark horse. Mira Murati's new startup Thinking Machines Lab reportedly raised $2 billion in what would be the largest seed round ever far surpassing Yuga Labs' $450 million seed round back in March of 2022, quoting Crunch Base. It is a round of unprecedented hugueness. The $2 billion, Andreessen Horwitz led financing that thinking machines reportedly just closed at a $10 billion valuation is by far the largest seed round in the crunch base dataset. It's not even close. The next largest U.S. seed financings have all been in the $200 million to $450 million range. In addition to its record setting size, another

Starting point is 00:13:27 standout characteristic of the thinking machines round is how little surprise it generated. This seems largely due to its status as a brainchild of top Open AI alums. After all, if OpenAI managed to secure a recent $300 billion post-money valuation largely driven by the prowess of its team, it's reasonable to expect great things out of its early leaders in their solo ventures as well, end quote. But we're still kind of in the dark about what thinking machines is going to do, right? Well, quoting the information. TML plans to use forms of reinforcement learning, a common AI development technique that rewards an AI model for accomplishing certain goals and penalizes it for other behaviors, said a person who spoke to Muradi. TML plans to customize models on specific business metrics. Its customers track known as key performance indicators, which typically relate to revenue or profit growth, multiple people who spoke to her said. Investors that have spoken to Moradi refer to TML's business model as RL for business. TML may be banking on the idea that

Starting point is 00:14:24 of AI may be willing to pay a premium for models customized for their industry, such as customer support, investment banking, or retail. TML may still pursue other enterprise AI ideas as well. The startup also plans to develop a product for consumers, though it isn't clear what that product might look like, according to a person who has spoken to TML employees. At one point, employees contemplated developing a consumer chatbot that would compete somewhat with OpenAI's chat GPT, said another person who spoke to Murati. TML is developing its AI using invidia-powered servers it rents from Google Cloud, according to a person who has spoken with TML employees. That could give Google a reason to invest in TML with the hope that it spends

Starting point is 00:15:00 more money to rent such servers as it grows. Google has made other such investments in AI startups such as Anthropics, safe superintelligence, and character AI, among others. Other cloud providers also hope to work with Maradi. For instance, in mid-April, Amazon CEO Andy Jassi, met with her in San Francisco, according to a person who was told it by Maradi. Maradi has told investors the company hopes to leverage existing open-source models, which aren't as powerful as close-source models like OpenAIs, but have gotten close to them in terms of performance as DeepSeek recently showed. It isn't clear whether TML is using DeepSeek specifically.

Starting point is 00:15:32 TML plans to pluck specific AI model layers to the sections that process information in phases and combine them. Doing so would shorten the amount of time it takes to develop TML's models, Marotti told investors. This technique is similar to model merging in which researchers combine two or more models trained for different purposes to create a single AI that exhibits the strengths of the original two. without requiring additional training. Such an approach could help TML get a product to market faster, Marotti told investors.

Starting point is 00:15:58 TML's technical expertise could make the startup an attractive acquisition target for bigger firms. For instance, meta-platform CEO Mark Zuckerberg, has talked with Maradi, among many other startup founders, about the possibility of making an investment or acquiring her company in recent months, though those talks didn't get far, said a person with knowledge of the situation. To potential acquirers, TML may resemble what deep mine looked like more than a decade ago after hiring dozens of machine learning doctorates and other experts in London.

Starting point is 00:16:23 Google acquired DeepMind for more than $500 million in 2013 for the talent, beating out Zuckerberg's Facebook, which also sought to buy the team. DeepMind CEO Demise Haseibis now oversees Google's AI teams, end quote. Nothing more for you today. Talk to you tomorrow.

Tech Brew Ride Home - Tue. 06/24 – Is Microsoft Struggling To Sell Copilot?

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