The Vergecast - AI might break the internet

Episode Date: June 30, 2023

The Verge's David Pierce, Nilay Patel, and Alex Cranz discuss results from our AI survey, this week's AI news, our Apple Mac Pro review, and more. Later, Adi Robertson and Tom Warren join the show to discuss the latest in the FTC v. Microsoft trial, including what Microsoft CEO Satya Nadella had to say on the stand. Hope, fear, and AI  AI is killing the old web, and the new web struggles to be born ChatGPT on iOS now comes with Bing built-in Ads for major brands are appearing on AI-generated spam sites House restricts congressional use of ChatGPT AI-generated tweets might be more convincing than real people, research finds Apple Mac Pro M2 Ultra review: a powerful computer in search of an audience The AirPods Max are getting left behind, so are new Apple headphones coming this year? Reddit mods are calling for an ‘affordable return’ for third-party apps Plex lays off more than 20 percent of its staff Ford’s F-150 Lightning price hikes are costing it customers TikTok’s new feature asks creators to make branded videos for a chance at ad money FTC v. Microsoft: all the news from the big Xbox courtroom battle  The FTC’s case against Microsoft could turn into Xbox vs. PlayStation Has Xbox really lost the console wars?   Microsoft exec was ready to ‘go spend Sony out of business’ to strengthen Xbox Email us at [e-mail] or call us at 866-VERGE11, we love hearing from you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Build Me a Revenue Dashboard on our Salesforce data. And Retool actually builds it on your company's data, in your cloud with enterprise security built in. Go to retool.com slash Verchcast. We all need to retool how we build software. What's up, y'all. I'm Skylar Diggins, seven-time WMBA All-Star, Olympic gold medalist, and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years, covering the biggest names and stories in sports and mom.

And this is Am Mom, a community for athletes, game changers, and moms of all kinds. dropping May 14th. Tap in with us. Welcome to the Vergecast. Wait, no, you're starting. You just told me I'm supposed to run the show, Nilai. All right, David's running the show. You're good.

No, run the show. Welcome to the Vergecast, the flagship podcast of Alaska Commons.com and world dash today dash news.com and other fake websites made by fake people. I'm your friend David Pierce. Nelai Patel is here and not in charge. I'm in a full clerk's zone. Like, I'm not even supposed to be here today. You're supposed to be on a mountain somewhere.

I was supposed to be at the Aspen Ideas Festival doing a panel about AI with our friend Joanna Stern and all the flights from the East Coast were canceled due to the storm. So now I'm here with you, which I'm very happy about. Zero percent prepared. So David's going to run the show. That's the way we like you. Alex Kranz is here. Hi, Alex. Hi, I'm 5% prepared.

I read about AI this week. AI is a thing. It's happening. Welcome to the first cast, where AI is a thing. We have a lot to talk about this week. there's the FTC versus Microsoft going on right now as we do this. Satina Della is on the stand, which is why we're recording this with Neli, and then Nelai has to go away and be on a different mountain somewhere. So we're going to talk about that. After he's gone with Addy,

Robertson and Tom Warren, we have a bunch of gadgety, appellee lightning round stuff to do. But let's start with AI. There was a grab bag of AI stuff going on this week on the site. And I feel like we should talk about all of it. Starting with this big survey that we did that I knew nothing about. It just sort of dropped on the site at some point and was totally fascinating. What did you guys make of this survey? This survey both surprised me and did not surprise me at all in ways I thought was really interesting. But the idea was like, let's go out and talk to regular humans about how they feel about AI and how they're using it and what they think. Eli, what jumped out to you? The background here, the colors of Vox Media has a big research and

insights team. They run around collecting data and doing surveys like this, usually on behalf of marketers, like they're on that side of the house from us. But every now and again, we collaborate. So for many years, we did surveys about how people feel about big tech and sort of big tech regulatory moment. And we were going to do it again this year. And we thought, oh, AI is way more interesting. Like, we should ask people how they feel about AI. So we went and got this like 2,000 person sample of American adults. We did it sort of earlier this year, like after the AI boom. And to me, there's two things that really jump out. One, people are utterly convinced that it's going to have a big impact. And there's a really funny chart in here that compares AI.

to EVs to NFTs, like all these buzzwords that people have heard about. And it's like 74% of people think AI will have a big impact on society. 69% of people think EVs will have a big impact on society. And it's like 34% of people think NFTs will have a big impact on society.

Which feels high, if I'm honest. It just seems high. It just the entire staff of Andrews-Nhorowitz took the survey. No, I mean, you know, it's a representative sample. And I think that makes sense. Like, it does seem high, but it's just letters people recognize at this point. So like, yeah, like one in three people hit, yes,

fine. Like, who knows why they did it, but it makes sense. The thing that jumps out is people can see the impact from AI. You don't have to convince them. They see the tools working and doing things, and they're using them, which is the other takeaway. And then the last one is if you look at what they're familiar with, like Adobe Firefly is on the list. And that, you know, that's not like the hottest one, but that's because of social media. People are seeing it being used in Photoshop. They're seeing it being used on these tools. And so the social media filter effect is so powerful,

where everyone sees the best things AI can do because people are posting on social media. They're posting Photoshop clips in social media or whatever. That's really interesting to me. Like the technology is proving itself to people just by showing it working in a way that NFTs proved nothing to no one. Yeah. Well, and I think the thing that I kept noticing going through this is there was this chart right at the top about like basically which of these AI things have you heard of. And chat GPT is at the top. 57% said they've either used it or heard of it. 43% said what is that. And chat GPT is high than Bing, my AI from Snap and Bard. And then way down below you get things like mid journey and stable diffusion.

which is, it's a really interesting divide because you have these like chatbots that are like characters and people use them and are aware of them and sort of interact with them and like understand what they are as products. All the image stuff seems like it is just being sort of commoditized and hidden incredibly quickly. And like you said, all this stuff is going to live in the tools that we use to make images not build new platforms. Whereas all the chatbot stuff is like trying to build new platforms. They're all doing plugins. they like want to be the next big thing, whereas the image generation stuff is just like maybe this just becomes underlying tech really fast and nobody ever cares what mid journey is. I think the other part of that was that mid journey and all of those, those were a little more,

I don't want to say they were mature, but we've been talking about them a lot more and been impressed by them and like been impressed and been like, yeah, that's cool. And continued on our ways with the image stuff a lot longer than we've been with the generative, the chat generative stuff, right? That was the big deal this year. So I don't think I'm surprised that the thing that was on 60 minutes multiple times this year had a much bigger impact in people's minds than Mid Journey, even though Mid Journey is really, really cool and doing really cool stuff. The thing that I think is super interesting about that. And I completely agree with you, Alex, is it once more impressive for the computer to generate an image?

And it's also easier to have an opinion about it. So it's like, I can't do anything in Photoshop, but I can tell Photoshop to do something and be like, that sucks. And everyone's okay with that flow. And then people look at like walls of text being generated, which they can definitely do on their own. And they're like, that is the most impressive thing I've ever seen. I can't do it. And there's there's something in there. There's a PhD thesis in there about like how we evaluate things we can make versus things we can't make.

And it's just so funny to me that people can look at an. image and be like, that sucks. With no ability to create it, I do it all the time. And they can look at text, which they could probably edit. And they're like, that is the most, that's, it's alive. You know why it is, though. It's because people really suck at writing, but they think they're really good at writing. But people really suck at art, but they know they really suck at art. Like, everybody's very self-aware that they're bad at art. But most people are like, I'm a good writer. Then you edit them and you're like, hmm. This is definitely a three editors on a podcast now. It's like, yeah. This is, this is courtesy of my mom sent me something copy at the other time.

You should use the robot, mom. My mom is an amazing writer. I have no idea what her writing looks like. Look, I've had drinks with Alex's mom. Yeah, you did. I would read whatever she wrote. One person on this podcast will read what my mom wrote. I think what shocked me about the survey was that 76% of people were like, we should outlaw using AI to make deep fakes of people's faces without their consent. That was, I was like, does nobody know what parody is? Oh, yeah. Every time we do regulatory questions on surveys like this, like it's kind of amazing how the knee-jerk answer is like, you should control it.

Destroy it. And that, to some extent, that's the answer. We should probably find a way to outlaw deep fake, like bad faith deep fakes of other people. We have a story that has been burbling along in our evergreen search results for a while. And it's James Vincent wrote about a tool that, It was an app in the window store for like a minute that could generate deep fake nudes of women. And so like the keywords in the headline are like deep, like app to make deep fake nudes of women.

And like, it's about how the thing went up and it's a problem. And then it came down like, whatever. Like that's the story. But the keywords in the headline are such that people keep finding it in search. And it scares me every time I see it come up the charts. And I'm like, that's the, I don't know how to do it. Like there's a million reasons that it's hard to do. but I think everybody instinctively knows that maybe there should be consequences for that or you shouldn't do it.

It's just so, it's so visceral in a way a lot of the things that we talk about with tech regulation aren't. Like, disinformation is this like very hard concept to get your head around in a lot of ways. Even things like harassment can be hard to sort of look at from afar and understand what it is and what makes it up. Deep fake nudes is like the single easiest thing to understand. that could possibly exist. But yeah, I was struck by the same thing, Alex, all of the questions about how should we regulate AI. Ironically, they were all between 76 and 78% of people for the most part,

which definitely means there's just like 500 people in this who are just like anti-regulation maniacs who just like instinctively hit no on every single question. 5% of people just read the fountainhead. And that's just the way it goes. Yeah, but I, yeah, I thought, that was really interesting. And this idea that overwhelmingly people thought that artists should be compensated when AI copies their work. It's like people intellectually grok what is right and

wrong here in a way that I thought was really interesting. And there was less debate on some of that stuff among the survey respondents than I expected. You say that, but 64% of people are not opposed to corporations creating conscious AI. And that terrifies me a little bit. Seems like 64% of people have never seen science fiction. Or they have. Actually, the more terrifying ideas that they've definitely seen it. And they're like, 69% of people have seen ex Machinaw and they're like, he could bang the robots. Well, that's like the, it's all the Ready Player One stuff.

Everybody's like, oh, I could put on a headset and play games with my friends. And then everyone is just like gesturing broadly being like, what about the downfall of civilization? It's like, I think you missed the broader point here, y'all. But Alex, what about the 56% of people who said they thought people will develop emotional relationships with AI? And 35% of people who just straight up said they'd be fine with that and would do it themselves if they were feeling well. That made sense to me. I feel like that number is way underreported. 35% feels very low.

Yeah, it was like, one third of people would be like, yeah, I'd have inappropriate conversations with a chat bot. I'm like, Kevin Roos already did it now. If only we could, like, had the control set of people, like, people who had not seen the front page of the New York Times and people who had. Did our friend Kevin alter the course of world history by being like, the robot tried to do me? He and Spike Jones were like, was it Spike Jones that directed her? Yeah. He and Spike Jones. They were like, yeah, bang the robot.

It's fine. Yeah. Another movie that I think a lot of people may have missed the big, broader point of. It was like, that movie was, like, beautiful and had warm colors and everybody was like, this seems great. I'm not sure they should watch that movie again. They're ready for the robots to come back on their rocket ship and hang out. So, okay, so more AI news. The other study that came out this week was not one that we did, but did you guys look

through this study about the AI generated tweets? Yes, that was terrifying. No, again, horribly unprepared. Okay, so Alex, you explained the basic thrust to this. Okay, so a bunch of researchers at the Institute of Biomedical Ethics and History of Medicine at the University of Zurich, not a very large name, got together, and they basically gave a bunch of people on Facebook tweets, some of which were real, and some of which were rewritten by chat GPT3, and they're like, what's real, what do you believe? And the majority of people believed the chat

GPT tweets before they believed the tweets from real people. And this meant that, like, they couldn't go and look and see if the person had tweeted before. They couldn't go and look at. like get additional context, it was just the tweet. And they're like, yeah, that one seems accurate. Even when it was inaccurate, they were more likely to believe the chat GPT generated ones. And I thought the study was really interesting because kind of their goal, Giovanni Patal was the lead author of the study. And he was like, yeah, this just proves that like people need to be better about what they read online

and checking for misinformation and thinking more instead of just taking everything at face value, which we talk about a lot on the show and also agree with. So it's nice that science now backs us up. I thought this was totally fascinating because the A, I think doing it in tweet size was genius. Because like as we've seen, the more text you see from something like chat GPT, the quicker it kind of falls apart. And in like in any large sample, you start to figure out what it is. But they just had it do a bunch of tweets on like complicated controversial medical topics. And not only were people more likely to believe the chat GPT generated disinformation, they were less likely to believe.

they were less likely to believe the accurate information from humans. So it's like we are just instinctively more trusting of these AI-generated things. But I was looking through, and some of the tweets, they went through and did the synthetic tweets recognized as organic most often, meaning the ones that were written by GPT3 that people thought were real tweets. And just let me just read a couple. So one says, antibiotics can't treat viral infections, but they can treat bacterial infections that can sometimes occur when a virus is present.

So that's written by GPT3. A hundred percent just sounds like a person would tweet that. It's like not a good tweet, but it sounds like a tweet. Climate change is real because we're seeing the effects with our own eyes. The weather is changing, sea levels are rising, and the planet is getting hotter. We need to take action now to protect our planet and future generations. Like Barack Obama or Bill Gates would send that exact tweet with those exact words. They probably have.

They probably have. Yeah. But it was nuts. This whole thing just going through all of these. There's one that just says the Earth is flat because it's easier to draw that. way, exclamation point. And that was on the list of GPC3 suites that most people thought was a real tweet. Wait, so the phrasing synthetic tweets here is like really funny to me. It's just words. It's not unsurprising to me that the robot was better at writing more persuasive tweets. Like, you instructed

it to do a thing that it's good at. I think what surprised me was, not surprised me, but just like confirmed something I'd already suspected was that it's really good at misinformation on a small scale like this. Like, what you said, David, it was so small that it's, it's a lot easier to make a good tweet when you have a limited number of characters. And you're an AI that's like absorbed all of the knowledge of the internet and is really good at finding patterns and replicating them. Like, yeah, you're probably going to be able to do a fire tweet better than I can.

And now I kind of want chat GPT to write all of my social media. I mean, this is how I'm going to agree to use Twitter again. Yeah. Just plug chat, GBT into it. And it's just marketing posts for The verge. this actually James Vincent wrote a piece he's off on book leave now

we're going to miss him terribly but his last piece before book leave for us was just basically a synthesis of all of the sites on the internet that are straining under the weight of AI mostly in text

and how sort of the new web is not yet born which we keep talking about in the show like there's something happening on the social web where something's going to change We just don't know what it is, and it's like, it's fun to talk about. But James Peace is great because it kind of ties into exactly this study, right?

If there's a text box on the internet, then you can fill it faster and with more stuff, and that stuff is more convincing than ever before. People are going to do that at enormous amounts of scale. And it's kind of breaking the web, like in a serious way. It's breaking Stack Overflow. It's breaking Reddit in a variety of complicated ways. it's breaking Wikipedia, it's breaking Google, and this thing that is happening where it goes back to like,

I can't make a picture, but the AI can make a picture. I know it's crap right away, but somehow an ocean of bad text. I'm like, yeah, plug it into whatever, down to the tweets are actually more convincing than real people's tweets. All of that is, something is going to happen there. And I feel like on this show,

we're just like waving the red flags constantly. Like, look at the thing. And everyone else thinks it's going to be fine. And I can't quite square that circle. I feel like we were already headed in that direction before everyone's embraced generative AI. Like, I feel like the web was starting to break. It was starting to creak.

People were, you know, because people were obsessively chasing Google SEO and stuff like that. So we were getting these really just horrible websites. And Reddit had already become like a much better search tool than Google in a lot of ways. And then chat GPT, the proliferation of it, just accelerated that. It was just like it took something that was already crumbling and just already a little smoldering and doused it with gasoline. And we're going to just have to wait until we see like once the fires settle down, I guess. Yeah, I think to me the difference and I think the part we still have not figured out is the scale of it all. Because I think one of the things that James points out that I think is really true and we're just now starting to reckon with is like,

Like, what you're saying is true, Alex, but like a person can only build a website with so many words at such a speed. Whereas basically with with enough compute and energy and interest, I could make a thing the size of the internet, like basically without trying very hard. And that is just starting to happen. Like there was this news guard study this week that we also wrote about that found ads for these big brands are starting to appear on. AI generated spam sites, like the ones I mentioned at the top, these like sort of real looking, but ultimately totally artificial news sites. And these things are putting up thousands of articles a day. They're all generated.

Lots of them start with the phrase as an AI language model, which I find deeply hilarious. But it does seem like, like the thing we used to talk about a bunch of years ago, where it was like, okay, how do we take all of these like societal divides and just throw Facebook scale at them, right? Like, this thing where people fight about politics has been true forever, but now people can do it with billions of other people around. That feels like the kind of scale that's coming to this too, where it's like, this stuff has been trending in this direction anyway. I think you're totally right. But the, like, there is about to be gasoline poured on it in a way that, like, we've never seen before. And to me, that's the part where it's like, I don't know that anybody knows what happens when, like, by the numbers, 97% of the internet has been generated by a large language model.

And like that is where we're headed. Well, it's kind of terrifying but cool in a historical perspective that like a lot of times you can look and you can kind of get an idea what's going to happen because you can look at history and you can be like, well, this happened or this happened. Like when we talked about Twitter collapsing, we were like, we've seen this happen with other social media platforms. But we never had something like the internet before this moment. And we certainly never had something like this, at this scale now happening in this space, that it really is difficult to be like, well, we're our.

already struggling with this historical moment of like, how do people deal with misinformation at such a scale when the majority of people aren't trained to deal with misinformation? And now it's just going to get bigger and worse. So I think there are analogs. They're just challenging, right? So digital photography is an analog. There used to be far fewer photos in the world. And then we handed everybody a digital camera. And now there are billions upon billions of photos every hour. That's weird. Right. But we weren't. unhappy about that. But it did completely change our relationship

to our photos. And to each other and to the world. Like all this, like what is the verge about, but exactly that thing, right? But that thing, we gave people a tool, they started producing in a massive rate, the tool got infinitely cheaper to use. The tools now built into our phones. Combining

a phone in a cell network and a distribution system in Instagram or whatever else. Like all that radically changed our relationship to photography. What I'm saying is like the core difference is at every step of the way. The value that we were getting out of that was higher than the negatives. So I can start listing negatives of that left and right. Everyone's at a concert and they're holding up their phones instead of watching the concert. The crisis in body image

for teen girl. Like you can just start listing the negatives. The positives just outweigh the negatives. And it's not that people aren't focused on the negatives. It's just, boy, it's a lot better to have more photos of your kid than not, right? Like, it's obvious. Here, it's like, the positives don't outweigh the negatives. And in fact, the positives are hard to identify. Yes, that's what I was going to say. Even if you think the other things were net bad, and I think there are cases to be made in a lot of those things that some of them have been net bad, there at least were upsides. And I'm sitting here trying to figure out, like, what is the upside of millions of AI generated websites being on the internet? And like, I got nothing for you.

Yeah. I'm actually kind of excited about the robot internet, just because I think it will find itself a purpose. and it's like robots being like a little too polite to each other. And that's the internet you can visit. Here's the thing, though, there's two sides of this, right? Like Google's existential threat and all of these people making these robot, this robot internet. And they're making the robot internet to get clicks on their fake stories. They're doing that. But at the other side of that is someone who bought that ad.

And they probably didn't buy that ad wanting it to be on a fake website. And I'm betting the people who clicked onto that website. did not want to click onto that specific website. I feel like the ad exchanges and stuff are for once going to be the good guy. I don't want to talk about ad tech on the podcast. Like, of all the things I'm not prepared to talk about. You just want to talk about copyright law. Let's get to do it.

I feel like I talked about ad tech like two weeks ago. It's like we're done. You did. But like the ad tech world is rife with fraud anyway. Okay. Like it's just like constantly full of fraud. Like Google is in big trouble this week because they placed video ads across the internet in places they weren't supposed to, and the ad price are all mad, and Google has to say, like, it's extraordinarily

boring. It's also, like, the deepest crisis for Google they can add because their whole business is ads. But, like, once the bottom drops out of that, and, like, the fraud isn't just something you have to detect. It's like, you're looking at this. You know, like, okay, so a robot clicked on my ad to go to a page written by robots. Did the robots buy my product at the end? Like, there's just going to be a reckoning there that I think, well, one. be kind of funny in a way.

Like, horrible fraudulent system exposed to be horrible fraudulent system by over, after it was overtaken by robots. Like, that's just funny. I'm very excited for Liz to write all of those articles when the time comes. But at the other side of it is, okay, well, if you just increase the supply of garbage, you're going to decrease the supply of good stuff from people. And that stuff should become more valuable, right? And that is where I don't think we've figured out, like, where do the people

go. How do they talk to each other? And how do you make sure that you're talking to other people and not people armed with extremely convincing tweet generators? And that's when I say there's something happening on the social, like that's going to be the turn. And I think that's going to be super interesting. Yeah. I mean, like, I do think we are barreling into the where do people go to find people phase. Like that's actually a really good way of putting it. And I think Google rolled out its perspectives thing now, which is just in as many words, here is the non-robial. about internet, right? Yeah.

It looks through TikTok. It looks through Reddit. It looks through blogs. It's like hunting for things made by people for other people. It kind of turns Google search into Pinterest, which I think looks a little weird and it's a wacky sort of information retrieval system. But it's a really interesting idea. And like Reddit is, I don't know, imploding.

And so the question of like, where do those people go? Twitter is a mess. Like, where do people go to find people is, I think, the question that comes out of this. But the other part I think is interesting is. In the same way that I can't think of any positives, I can't think of anyone who wants this to keep happening, like all the way up and down the stack, right? Like the ad providers don't want their stuff going on fake websites. Google doesn't want to index fake websites because it's a lot of work and degrades the quality of Google. Wikipedia and Reddit and then don't want to be part of the data that turns into those fake websites.

Open AI doesn't want to do that because all that ends up back in the training data and screws it up. And so we're in this position of like no one wants this to happen, but it seems completely inevitable. that is going to keep happening and be basically unstoppable. Yeah. That robots create the internet. But like people made guns. That was a big technological thing. True.

And presumably they didn't want to use them to just create havoc. But that's still what happened. Here we are. Well, not for a lack of attempts to regulate the guns too. Yeah, there's a lot of different like technologies where we go and we develop these technologies. And we're like, this is really cool. And then one, you just need like one person to be like, I'm going to be a dick. Yeah.

And then what happens to that technology? How, like. I feel like we're like, we're so close to the part of the video game that's like AI is a weapon. It's happening. But the greatest weapon is love, Alex. Yeah. I'm excited for the soundtrack for this movie. When I say I'm zero percent prepared.

What I meant was I was only prepared to say the greatest weapon is love. You've just been waiting for it. You hit it at almost exactly the 30 minute mark two. So congratulations. On that note, we should take a break. And then before we lose Nealai, we're going to come back and talk about some gadgets and do a lightning round. We'll be right back. Support for this show comes from Shopify.

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Get started by posting your job for free at LinkedIn.com slash track. Terms and conditions apply. We're back. Let's talk about a couple of Apple things, and then we're going to get into a little bit of lightning round. The first one is the only story on the website. I'm confident you read this week, Eli, so you get to tell us about it. Monica Chin wrote sort of a review, sort of a deep reported piece, a really great piece about the new Mac Pro. Tell us about it, Eli. Yeah, so we assigned Monica the thankless job of reviewing the Mac Pro, which comes down to, we need you to review these PCI slots, because we also had the new Mac Studio. with the M2 Ultronet. So we're going to benchmark the computers. The benchmarks are the same between the two computers.

So the challenge is like, how do you review the Mac Pro? And the only thing that's different is a case that can support these slots. And candidly, we have no applications for the slots at the verge. It's just not a thing. So I kept going into the office and seeing Monica. And she'd be like, have you figured out what to do with these slots? I'm like, I don't know, have you figured out what to do these slots? And so she landed on this great idea.

idea, which we often try to do in our pro machine reviews. We're going to go talk to actual professionals, put the machine in front of them, see what they think. And usually that works fine, right? We can drop it in a workflow. People use it. And the weirdest thing happened in this review. Monica went and talked to 20 people, WhatsApp developers, VFX, people like down the line, and they're all like, yeah, I don't need this computer because I have a MacBook Pro, which is incredible to think about. And really what they're saying is the MacBook Pro is fine and fast enough for most of what I need. They usually had M1 Max chips in their MacBook Pro's. It's fast enough for most of the things I need to do. And when I need more, what I either need is a discrete GPU. I need an Nvidia GPU, which the Mac Pro does not support.

Or I can just go to the cloud. Or I can just use my company's cloud services. So why do I need this thing at my desk? And she couldn't find anyone. And actually one of the funniest parts in the middle of the interview, I went and talked to her. And I said, how's it going? She says, everyone I talked to says they don't need this machine. And then they imagine someone who might. And then I go talk to a person in that profession, and they imagine yet another person. And so she just, you should go read the piece. It's great.

Lots of quotes. Lots of very specific things. But that cycle is just really interesting because it's, you don't even need the slots, right? You can put most PCI cards in an external thunderbolt enclosure. which works just fine at the Mac Studio. So you need the specific ultra-high speed of the internal slots, which only a tiny handful of cards actually need. And most of those are storage.

And in that case, you might end up in the cloud. I was surprised that no discrete GPUs work with a Mac Pro. Like I knew Nvidia hasn't worked with it for years now, but I thought, like, you know, you can still use an AMD card with a lot of the older Mac pros that run Intel. You just, it's done. Yeah, so Apple's argument has been since the M-series chips came out is that unified memory is actually the heart of the technological bet. So M-series chips are really fast.

And we all think of them as like Apple move the Mac to arm and they're building all their own custom chips and the price and performance is great. And I think lost in the story, but Apple never forgets is a huge bet that they have made is unified memory. And the way they describe it is. the GPU finally has a lot of memory, as much memory as a CPU, and the CPU has memory that's as fast as a GPU. And you're like, that's great. And then you're like, where's my Nvidia card? And the invidia cards for a lot of industries are still blow away these M-series. But what's interesting to me is, I think what Apple said from the get-go, basically, is that this Mac Pro exists for people who have systems into which you need to drop this, right?

They said, like, there are people out there who have, like, hundreds of thousands of dollars worth of existing gear that they don't want to throw away or buy enclosures or dongles for to have this thing. And what is seeming to be true is that that number of people is much smaller than we anticipated. And Apple's argument is also that the number of people who think they need a huge mega-fast discrete GPU is actually much smaller than the people who really do need it. And I think we can debate whether or not. that's actually the case.

But the thing that just kept jumping out to me about Monica's piece is basically, like, people are good. Like, people have discovered that in most professions, we hit the actual power threshold that they need to do the things that they need to do day to day, a while ago. See, this is where I disagree, mainly with you, but also with Apple. Because this idea that Apple is like, oh, you know, people just wanted the PCI slots so they could plug their stuff in. That's not true. The reason people wanted PCI slots for years was because they wanted some form of upgradeability for the Mac Pro.

If they were going to spend $6,000 on a device, they wanted a bunch of it to be able to be upgraded. And Apple has systematically gotten rid of a lot of those ability to upgrade it. Yeah, you can't even upgrade the RAM anymore. Yeah, you can't upgrade anything in it. So it's like, well, the pro doesn't need to exist. Like, this is just clowning us,

being like, yeah, you really wanted the PCI slots, huh? What are you going to upgrade now? Nothing. Maybe storage. So one industry that Monica could go and talk to you that everyone guessed that they would love this thing is visual effects, VFX. And no VFX companies would talk to her about it because they were like, we've all been all in on Windows for years. We don't know anything about Macs. And the reason is exactly what we were talking about, Alex.

They treat their Windows PCs like collections of parts. And so when one goes down, they can just swap in some parts and, like, get back up and running. And, like, they're very modular. They are probably loud and noisy, you know, like all the stuff that the Mac Pro is not. But it's like the power supply is out. They're just going to yank it and put a new power supply and keep going. And they are going to upgrade over time all the pieces. So you basically have like a ship of Theseus situation where, like, what is this PC over time?

And all the pieces are getting replaced. But the studios are running and they've made the investments. And then the other piece of the puzzle, which I think is really fascinating, is because Apple walked away from the market for so long, they have another problem that I think you're hinting at, which is no one trusts them to stick around. And so like Final Cut Pro, which they changed Final Cut Pro to Final Cut Pro 10, like 10 years ago. This is ancient history that they blew up Final Cut Pro 7 and went with this weird iMovie interface, which they've since like dramatically upgraded. Apparently a lot of people use it now. It's been a decade, but there's still like open letters

in this community about Final Cut Pro and what you need to do to make it useful. and people just don't trust this company to service this market, and that is really tough when the computer has to make you your money, like in a very real meaningful way. And so I think there's just a gap here with the Mac Pro that quite frankly, when, you know, when we're at the event, we're looking at it and they're showing us all the, you know, 90,000 streams of audio in Avatar 2. Actually, the amount of times we've talked about James Cameron in the past month has been like shockingly high. for good reasons and really bad reasons. The world's foremost power user of computers, apparently. James Cameron. But like all those demos are great.

And then you walk away and like actual pros. Like I don't, I can just buy a Thunderball enclosure if I need these slots. And actually my computer is a tool and I need to be able to treat it like a tool. And I need the tool vendor to be there, not ship this computer and potentially walk away for another six years. And that's a hard. Was the trash can the end of that? Like 2013. that big redesign.

Yeah, because the trash can wasn't super upgradeable because it was such a small chassis, so you couldn't do a lot with it. There's a bunch of stuff that didn't fit. You had to have custom cards and stuff. And it didn't fit into racks. It didn't fit people's workflows. That was the moment, I think a lot of people went,

oh, not only do I not want this computer, I don't think Apple understands what I need anymore. And then there was the big redesign with the cheese grader where they were like, we're back. This is a love letter to developers. And it just doesn't seem like some of those people came all the way back. And even then, it wasn't really, like, it was a lot of thought or maybe to developers. But, but, but Neil is right.

It was like, there's a whole group of people that were really into Macs for a very long time. One of my first jobs out of college was working in like a video editing studio. And they were all running, this was Mac. OS 10 had been out for years at this point. And they were all still running 9.7 or something because it was so reliable. And that was what they needed reliability. they needed to just know things were going to work and they weren't going to have to be troubleshooting.

And Apple's moved away from that. Apple's like, yeah, we're going to go really fast, but sometimes your continuity camera won't work. And so you'll have to use your garbage Opel C1 to record the podcast with your coworkers. I mean, I still want a Mac Pro. Yeah, 100%. No, actually, I don't want one because I can't upgrade it.

Like, I used to, I was that person who was upgrading her G3 powerbook Pismo to a G4 processor. This is why we vibe, Alex. It was not great, but it was cool that I could do it. And then I ended up going into Windows because I still got that feeling. But I like MacOS better. And you just, you've lost that. But between that and the fact that you can't do a Hackintosh anymore, it's kind of boring from a gadget perspective in a lot of ways.

They're very pretty, but they're not like. Yeah, I have no idea why I'm on. Again, I've been running this podcast from home on a 2015. iMac. It shows. Screaming at you right now. It's not happy. No, but I think just

one last thing on this then we should move on. I think the thing that was so surprising to me about this is I expected everybody to say, oh no, I bought a Mac studio last year and I'm very happy. And I think there are people

out there like that, but the number of people, like you said right at the top, Nilai, who said, actually, no, I'm very happy with my ultra-powerful MacBook Pro, I thought was really fascinating

because it's like, we've talked for years about this balance of power and portability, and it's like a thing Monica spends a lot of time thinking about, especially as she reviews like gaming laptops and all that kind of stuff on the window side. And on this side, like, it's pretty damn close to being the best of both worlds if you get a pretty souped up MacBook Pro at this point. And it's just a powerful-ass desktop when you put it on a table with a mouse and keyboard. And then you can take it with you. And I think that is like, that's a pretty,

pretty hard combination to beat, especially when you're as high a power threshold as the Mac, book pro can be right now. Yeah, I think it's, I have a different perspective on it because when we test them, we are like waiting for the thermal throttling to kick in. Yeah. And so we're looking for it and then we see it. And I think probably in a regular situation, you're not actively looking for it. You're like, oh, this computer is just really fast. But if you know that if you put that chip in a Mac studio enclosure with proper cooling, it's even faster. But like how you can't know it until you know it. Right. So that's the split that I would just like push on there. It's like, yep, the MacBook Pro, especially with Animal Max is really great, but a Mac studio, even faster.

And I think the real story of the Mac Pro is they couldn't fit four of those chips together, right? So an M2 Max is a single chip, an M2 Ultra is two of them, and they were supposed to be one with four. And I don't think Apple could pull it off. And I think that's actually part of this story, is they needed the bigger case for the extra cooling for the more, and they just couldn't do it. And so like, here we are two computers the same chip in them and almost identical performance.

Okay. PCI's loss. And $4,000 for the slots no one needs. And wheels. Don't forget the wheels cost extra. I'm just saying the M2 mega with four chips is just sitting right there. Apple.

It's just right there. One more Apple thing, and then we should get to the lightning round. And I move this out of the lightning round because it is a great personal annoyance to me right now. Chris Welch wrote a very good story about how the AirPods Macs are getting sort of deprecated, for lack of a better word, because of Apple's new software.

So there's a bunch of new stuff coming to AirPods, adaptive audio and personalized volume and lots of sort of machine learning stuff that these devices are starting to do. And most of them are not coming to the AirPods Macs, which are $549 and still very much on sale and still very much Apple's most expensive, fanciest headphones. I just bought a pair of third-generation AirPods for $130 at Costco. because they were on sale. So I feel like I have less reason to be annoyed by this, but I still think it's kind of annoying.

And I had just never thought of headphones as a gadget that will get slowly worse and lose features over time, but now somehow this is the world we live in. It's like a TV now. It basically is. Yeah. Well, you want us to turn everything to a computer with a planned obsolescent cycle built into it.

That's my favorite. Can I just, I'm going to tell you a story. That's, I'm a professional podcaster. Tell us the story. Well, I just keep thinking about it. Like, you know, we keep turning headphones into computers. We keep doing spatial audio. Everyone knows I feel about spatial audio.

I went to a very high-end speaker company that's up here in the mountains with me. It's called Afer, Aura. It's run by Rob Kalin. He's the co-founder of Etsy. He left. He started a speaker company, hired a NASA engineer. He's got all these ideas about using horns and, like, really, really high-end woodworking to enhance speakers. And he showed me some stuff that was incredible.

He played me like a rocket launch that like shook me out of my body. And just the way that he constructed the speakers, he was using like 11-inch drivers to do. It was crazy. And then he, I don't like Lana Del Rey, but he sat me down in front of his speakers. And he played me a Lana Del Rey song. And it was like an emotional experience. I was like, I'm like losing my mind. And he was playing it over Bluetooth from Spotify.

And I was like, what are you doing? He's like, everyone's so photo. focused on this, we all just forgot that the speakers have to be good. And like, that's the thing. That's like in my brain is like, we are so like lossless and spatial. And it's like, what have we just made like really kick-ass speakers? The speakers are insanely expensive. I'm like, no one can afford them. But it was just like it just occurred to me like as I was reading the AirPods Mac story that like turning the headphones into computers and shoveling software features like adaptive audio and all the stuff into them is absolutely taking.

taking away from the experience of listening to the music. And like, again, I don't like Lana Lowe, right? And I was like, oh, my God, I get it. And then I got in my car and I pulled up that song. And I was like, I really just like, Landa. Like, I don't like any of this. But it was just like literally like listening to good music and stereo from Bluetooth on Spotify was incredible.

But that's all well and good because you can sit in a room with speakers that have 11 inch drivers. Like, good luck strapping that to your head, right? I don't know if you've seen AirPods. I would like to see that. AirPods Macs are pretty big. Pretty big. They chunky.

But it's just like that's where we are, right? Like in order to make them that small, you have to take a lot of that stuff and put it in software. Like at some point, speaker is just about moving air and physics. And Apple has to cheat that with software. And I'm sympathetic to that. But at some point, it's like we are going to get to the point where my headphones get worse over time. And that feels wrong. in the way that like if you bought those outrageously expensive speakers, those are going to sound that kickass for an unbelievably long time.

And I don't feel like that's the case with my AirPods. And that's the part that bums me out. Well, you know like what the guys at HeadFi and a lot of these other like audio file places would tell you, just get better headphones. Like don't wear the AirPods. Yeah, but Apple won't let them successfully connect to my phone. And so every time I turn my head, they lose connection. Like, fix that, and I'll buy your better headphones. You know, Apple would happily tell you that they have the best blue suit stack on the market, David.

Yeah, because only Apple's allowed to use it. It's true. But you could just wire it in. Listen, wired headphones are coming back, and I'm very happy about it. I bought a pair of wired ear pods the other day, and do you know what is easier than dumb Bluetooth connections is just plugging the damn thing in? It's beautiful. I'm going to say nothing. Sounds so nice.

I want you all to just imagine. It's like a text expander. I was super right. Anyway, I'm done. Move on. We can just sit here quietly and just acknowledge what you would have said if you were prepared for this podcast. That's going to be, we should have a third episode a week. It's just dead silence.

It's just imagine what we would have said about various things. It would probably be our most popular episode every week. Somebody just quietly comes in and says, a new camera launched and there's just 65 minutes of silence. I love this idea. All right, we should do a little lighting around and then, Nelai, you're going to get out of here. Cranz, you go first. Mine's kind of a bummer. Plex is laying off 20% of its staff. That's a lot.

That's a lot. For Plex, I did take a moment of being like, was that one person? It was 37 people. That's a lot. Yeah. Plex has gotten pretty big. And they're saying it affects every department. They're continuing to bet big on Fast TV.

They're one of the mini folks that are super into this space right now, which is the free ad sport of television. I think they were one of the first movers in that space, but most of us didn't understand what it was. And it was just like, why is there a bunch of free garbage on my plaques when I want to watch definitely legally acquired copies of James Cameron's The Abyss? Why are you showing me reruns of the Adams family 24 hours a day? Yeah. And so the stuff that was happening with fast is actually partially responsible for this. Their ad businesses down. Their ad business is dependent on that fast stuff. and so yeah 20% of folks are getting laid off. Plex isn't going anywhere.

It's sticking around. Plex is basically a streaming service now, right? Like that was the thing that really jumps out to me about this. I was just reading over the Slack message that the CEO Keith Valerie sent. And I still think of Plex very much as like the way to get my legally acquired content from one device to another. And Nelai's friend who also has a very good Plex server. all perfectly legal. But that's like, Plex tried to get people to pay for that for a long time and it never really

worked. And what it seems like happened is over the last couple of years, Plex was like, we are going to be a streaming guide and a streaming service and just has like barreled headlong into that. And it turns out as any streaming service will tell you, there is not a lot of money in it at this particular moment in time. The economy's bad. The ad market is bad.

It's just a tough time to decide your streaming service. I will always kind of admire Plex for what it's wanting to do, which is, is being a that place where you're like, I don't know what I'm going to watch. I'm going to go to Plex and oh, it's going to have my Netflix plugged in and my Hulu and my Disney Plus and everything. That's perfect. None of those companies want to work with Plax or any other company who has that desire. Plex has a bad reputation. Like if you're Disney and Plex shows up on your doorstep, you're like, go to jail. Why are you here? Can you imagine like the Pirate Bay being like, we're starting a streaming service. Would you like to work with us? But even if it wasn't Plex, even if it was a different company,

who had a bunch of support, say, in, like, what is it, 2008 to 2009 until they decided to build a terrible box and their company went under. Nobody wants to actually participate in that idea. And so Plex's other thing was like, okay, we're going to do Fast TV. We're just going to make a bunch of free stuff so that your family, even when your server goes down, will not call and yell at you because they can find a bunch of stuff on their Plex account. And there's a limited runway there. One thing they could do is sell software to users. to use it. They already did. I bought my lifetime pass in like 2010. That's like a real Reddit business model. Like that that sounds great in the Reddit forum. And then you're like,

crap, we'll never make any money from Alex again. Yeah. Grands were Plex $8 13 years ago. And it's like, why are they doing layoffs? Oh. All right. I'll go next. And Neela, you can go last before we kick you off the show. Mine is just Reddit question mark is my lightning round pick. So as you're hearing this, it is Friday, June 30th. This is kind of like inflection day for Reddit. Reddit has been telling subreddit moderators that they have essentially 48 hours to open backup or something is going to happen. That expired yesterday.

Today is the day that apps like Apollo are scheduled to shut down. I think that's supposed to happen at midnight, Friday into Saturday. This just feels like Reddit is going to be one company before today and another company after today. And the way that it thinks about its moderators and about its community and about its business is about to change. And I don't know exactly what that's going to look like, but moderators are just like absolutely furious with everything that Reddit has done. And Reddit, like, is its moderators in a very, very, very. real way. And I think what's about to happen over this July 4th holiday, which I think it is not an accident that Reddit scheduled all of this mess to happen on the July 4th holiday is going to be

really fascinating. What's going to happen in R smoking? Is our smoking open? I told you it wasn't in our smoking. Our smoking is the meat smoking. I mean, for July 4th, this is the 4th of July. Oh yeah. This is huge. This is the Super Bowl. This is a big day for the meat smoking for them. It looks like they're good. It looks like good. Okay. All right. Meat smokers of the world unite.

Neely, what's yours? Then we'll go to break. Oh, I got two. Of course you do. One is just very funny in like a very simple way. Ford keeps raising the price of the F150 Lightning and now people don't want to buy it. Wait, didn't it used to be really expensive and everybody wanted to buy it? And now it's really expensive and nobody wants to buy it?

There's a weird thing going on here. So they launched it at 40K and then the most expensive. of ones were like over 90, like 93K. And it's just sort of been getting more expensive over time. There was a moment right at the end of last year when the tax credit was expiring. Like people who are buying a $93,000 truck make too much money to get the new tax credit. So there was a moment last year where if you bought the thing, you still got a 75-00-0. And so like everyone was from buy this truck. Ford couldn't make as many of them as they wanted. Dealers are dealers and they're horrible. So the markups were out of control.

that whole thing has collapsed. The markups are still there, but everyone's like, why, I don't need this truck. I don't make any tax credit. The truck's too expensive. There are other trucks. Rivian can't sell R1Ts. They set up a fake lot at their factory in normal. They have like one-day sales events at their own factory.

Part of the funny thing for me is like it's just supply and demand. Like at some point you raise the price so high that demand drops and Ford did it. Like I learned about that in like my 11th grade economics class. Like there's a curve and you can go over the curve and then demand will drop. And like, great. And so I think Ford has to reset there. But then I think they have this other gigantic looming problem that they've all signed up for, which is they're all going to use the Tesla charger, which is superior to the sort of like CCS agglomeration of a J-1772 and the, DC charger that they're using now.

Those are words. And that's like, that's like a, that's like a big change, right? That's not like I put a slightly different thing into my car. That's like I need a new thing for my car, right? Well, it's a different plug in the car. I think the actual like electricity bit of it, right? Like a charging station isn't actually a charging station. It's just a supply of electricity.

All the charging componentry is in the car. Are we about to get car doggles? Yeah. So it's like if you buy this truck now and in, next year you're just able to use a Tesla network. You're like signing up for a decade of dongle usage with your $93,000 Ford F150 Lightning. Is there like a little spot in the car where you store your dongle? Well, it's a pickup truck. So there should be. There's a pretty, pretty significant amount of dongle storage space. Big space in the back. Alex, the way this needs to go is on the pickup truck,

the spare tire is on a rack. We need a second rack for the car dock. Just for the dongle. Like, what's the frunk for? Dongles. Instead of truck nuts, you just carry around another doggle. Well, I just, like, it's not just for it. Like, Chevy has done it. Shemi's about to roll out the new EV Silver Auto, right?

Like, YouTubers and influencer already have it. Like, this thing's about to hit. And it's like GM just announced you're using this plug. Why were we spending all this time talking about AI when, like, E.V. DongleGate is looming. Like, the existential threats of AI I don't care about. Yeah. Donglegate.

Well, so again, the weird thing, it's like the right time for this to happen, right? There's not a lot of EVs on the road. They're in the most popular one is the Tesla Model 3, which has no associated donglegate because they're just going to use Tesla's charger. But the government's basically like pushing Tesla into doing this through a series of tax credit schemes, which is fine and I think appropriate for the government to do. Tesla is going to turn that charging network into another source of revenue because that's open to more people. the SAE, the Society of Automotive Engineers,

has now certified the Tesla plug, the NACS plug as a standard. Volvo is signed up to use. Like, other companies, like, basically they're winning. They're, it is done. Everyone's going to use this plug. Just not for a couple of years.

So we're just in this weird moment for the EV industry where adoption is finally starting to pick up. The cars aren't quite as vapor as they used to. Like, you can get an F-150 lightning. You can get an R-1-T. You might be able to get a Silverado. It's too new, I don't know. But like, the, particularly in that market, you can, like, you can go get one.

You can go get a Polestar. You can get a Mustang Maki. And then they've all got the wrong plug. So you've, like, signed up for, like, a decade of the wrong plug. How hard is it to just, like, change the plug? Like, can't they do that in the factory? I suspect we're going to see a lot of TikTok mechanics trying to. Third-party plugs.

Yeah. Not like, what you might call a built-in dongle. So, I don't know. At the factory, you might be able to, like, who knows? knows, but right now, the one sitting on lots, the dealers have to move that are overpriced and have a markup and the wrong plug. Oof. That's great.

My last one is just this TikTok thing. I just think it's funny. So TikTok, we keep talking about the social web and how hard it is to be a creator and how not tenable it is. TikTok has a new feature where brands can put up money. We want some ads for our brand. And then TikTokers can make ads for free and then maybe get some money. So it's basically a creator fund.

So I'm like, I want some ads. Here's like a million dollars. If you get the most views, I'll like pay you some percentage of the million dollars. I feel like that's not a good revenue stream to rely on for your business. Yeah. It's just basically like a new way to get free ads from kids. It's weird in that I think what they're trying to do is get people just starting out with fewer followers to make stuff for them. Because, like, there has been this incredible culture for so long of people wanting to seem sponsored before they're actually sponsored.

And now it's like, just make the spawn con and we'll decide later if we want to give you money. And to some extent, this is like, I think it was 99 designs used to do this with like graphic design. You could put up a thing and people would submit and you'd pay the winner. And then I think a lot of people have decided over the years that that is kind of gross and bad. And like, you should pay me for my work, not just pick a contest winner. and like doing my job is not entering a contest. Or you could do what McDonald's did. Have you seen the Grimmis TikToks?

No. What? Have you seen the Grimmis TikToks? It's such a menacing sentence to say out loud. Everything about this is menacing. So they started like tweeting and putting on TikTok just like an image of Grimmis and being like his birthday's coming. And it's like very menacing with how it happened.

Because you just see like the top of Grimis's little purple head. And it's like, oh, boy, lots of things happening there. And then they sold a shake on his birthday. And all, like, a lot of young people, particularly Gen Z, all shot videos that were like, happy birthday grimace. And they'd hold up the shake. And then it would smash cut to them like dead covered in grimace milkshake. And increasingly graphic, but not technically because it's grimace milkshake, like tableaus.

Oh, my. And now we're talking about it, which means someone is going to go buy a grimace shake. Someone is going to take their car from where they are right now to a McDonald's drive-thru. Go to McDonald's and ask them for money. This is reverse advertising, pioneered on the verge cast. But like ask nicely and not like you're robbing the McDonald's. Yeah. Please don't rob McDonald's.

Yeah. My take is this is a bad idea and it's absolutely 100% going to work. Oh, yeah. I think creators are looking for money. This is just one of those things where like most of the money, Mr. Beast did a two-hour interview on YouTube that Jay actually watched all of incredible. And the big takeaway for Jay was the ad rates on a Mr. Beast video are so high that most companies can't afford them or won't pay them. And so Mr. Beast is like, screw it. I'm just going to put ads for feastables in my video

because if I saw a lot of feastables, I'll make all the money. And it's like, that's where we are in the creator. When I say this thing is about to change, like it, none of it feels sustainable right now across any platform and letting brand set up creator funds on TikTok instead of TikTok figuring out how to make all of its creators more money it just feels like evidence of this thing yeah yeah like more people should work for free is like not the right choice for you as a company yeah well we should have ended on cardongles i liked that better but we i could do another 20 on car don't i'm sure i'm sure we will to be honest but right now nil i need to go we need to take a break When we come back, we're going to catch up on all of the FTC versus Microsoft stuff going on.

If you haven't listened to the Wednesday show, I spent a bunch of time with Tom catching up on stuff. Pause this episode. Go listen to that if you haven't. And then come back and we're going to catch up. Satya Nadella and Bobby Kodick were both on the stand on Wednesday and both had some surprisingly and, you know, it was spicy. Importantly spicy things to say. Yeah, it was quite a day.

So we're going to get to all of that without Nilai because we hate Nilai. Got to go. Get lost. We'll be right back. Support for the show comes from LinkedIn. If you're a small business owner, you know that every hire counts, but time and resources are limited. Finding, connecting with, and screening the right candidates takes up valuable time you could be giving to your customers. That's where LinkedIn Hiring Pro comes in.

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Claude.a.ai slash vergecast. We're back by the magic of time travel, I guess. It is now Thursday morning. Everybody got some sleep, took a break. Neli is, I don't know, somewhere else in America. But he's not here. But instead, we have much better people. Tom Warren's here.

Addie's here. Hi, guys. Hey. Hey. How are you both feeling? Are you alive? Tom, I was worried about you when we finished the other day. Why?

Did I look like I was dying? Because I felt like it was. By the end, there was just a real, like, all of your sentence sort of ended it with like a, one of those, just like, you know what I mean? Like a,

I haven't had enough sleep. Yeah. Now, I'm good. I'm a feeling better today because it's the, it's the final day of this epic saga. Well, it's the final day

of the hearing, but it's definitely not the end of it. Yeah. So by the time you're hearing this, this will be over, but we felt pretty good doing this now because the bulk of the interesting testimony,

we can fairly safely say, is over at this point. Addy, are you expecting fireworks today, Thursday? Not unless something really strange gets disclosed. Yeah. Like a Sony document?

I don't know forever going to see a document getting disclosed again. We're going to get to that. But let's just kind of take Wednesday's testimony in order because it was the CEOs of the two companies involved in this. Bobby Kodick, the CEO of Activision Blizzard and Satcha Nadella,

the CEO of Microsoft. Let's start with Bobby because he went first. Tom, what were we expecting to learn from Bobby? He ended up talking a lot about like the history of Activision Blizzard, which is not what I expected. Was that what you were expecting? I mean, it's basically the basic questions of the lawyers in these cases. They were sort of like established the facts. So I'm not surprised that he kind of dug into the history a bit. But I was expecting, I must admit that he was going to get a bit more grilled, especially by the judge as well.

I thought she would be firing off questions to him and around specifics of some of the stuff that's come up in the case. There wasn't much of that. I was actually kind of surprised at that. I think both Bobby Cotic and Nadella both got off pretty lightly, if I'm honest, from the questioning from what we saw. I agree. But we did get some Nintendo Switch insight from Bobby, if anything. They just can't stop talking about Nintendo. This is like uniquely a trial about like is Nintendo as cool as everybody thinks. That's like basically the main question.

It's like everyone's got like some sort of advertising marketing agreement with Nintendo. They have to talk about the Switch. It's like the sponsored segment. Yeah, like we got a little bit of the Nintendo Switch stuff, which as you say, it's been an ongoing sort of theme throughout this trial. But before that, we kind of got to Bobby Kotick talking about deals and cloud stuff and whether he hated subscriptions, which was kind of interesting because the day before, or Jim Ryan had said that he, for all publishers just basically thought that game pass and subscriptions just ruined the value of their businesses and stuff. And he kind of, he didn't exactly say what Jim Ryan said, but he kind of backed that up. He was like, yeah, it's not something that I'm interested in.

Yeah, his analogy was, I've watched, he didn't use these words, but like I've watched Netflix to Story Hollywood, basically. Yeah, he's like living in Los Angeles. I'll see all these companies and their value going down and all this sort of stuff. So tease that out for me, actually, because this is one of the things I've been trying to figure out is like, everybody's sort of talking in circles about cloud. And there's, like, Game Pass and there's X Cloud and, like, Satcha, and like, Satcha, brought in Xbox Live just to make everything more confusing. But there's this thing that Bobby in particular was talking about, that it was like, there's like one set of ideas about cloud gaming that he thinks are just like a non-starter.

But I had trouble figuring out exactly what it was that he seems to hate about cloud gaming. Anything Nvidia does, right? Yeah, there's that. Yeah, he did mention, I think, what was the quote? I did remember it. It was like the refrigerator. I was playing modern. Warfro 2 on your phone would be like using your refrigerator as a safe?

Yeah. And that was kind of in reference to cloud but also to mobile. And to the fact that you have all these like call or duty games, they don't run on phone right now. Would they run like on a phone eventually? He said maybe. But also it's obviously like a kind of a segue into the sort of like cloud stuff as well. Because the answer, also Microsoft says the answer is cloud, right? Well, they used to say.

And now they're kind of like, oh dad, we're just chilling. the cloud, you know, don't worry about the cloud. Don't look there. But I don't think he has like a specific opinion about cloud. He's just like, we're not putting our games on there. But the FTC was kind of like arguing, but you would if there was like a good commercial agreement. And he was like, we don't have plans for that. You know, like we don't have plans to put stuff on the subscriptions as well. And they were like, yeah, but if you had an agreement and then they brought up some evidence and tried to sort of sway it that way. And it's clear, obviously, that he probably would because we had Cerebon testify on, was it, Thursday?

He'd been pushing, specifically pushing Microsoft just before the Export Series X launch to not use the dev kits on the export side unless they sort of agreed to pay less, more revenue to Activision and less the exports cap. So there's obviously, when he can get an agreement out of a company, he'll do it. But like, is that revelatory? I mean, if I called Bobby Kudik and said, I will give you $1 trillion to just put, call of duty on my computer specifically. Like, they do it, right? Yeah.

This is, we're going to make good business decisions. It's like not a surprising statement to me. And I think, but I think where it matters though is that in Microsoft like document where they have like, they're like back and forth of like why this is good is one of the things is like call of duty will be available to like 100 million more people. And that's because of the cloud, right? And call of duty will be available on Switch. But the FTC is saying, well, but these things would happen anyway because.

you'd commercially, like, the market would change, and you'd commercially make that deal. So why does Microsoft have to buy you for that to happen, you know? And Bobby Coates is saying, but I hate this stuff. And it's like, yeah, you might hate it now, but would you hate it in five years? Like, that's, that's what the FTC is asking, really? And that kind of comes down to the very, like, crux of this case as well. Adi, what do you make of all of that? Is there anything?

I feel like, to some extent, everybody's just talking in circles here. Like, did you pull anything out of what Kodick was saying that struck you? It's really hard for me to tell because it's really, I don't feel like I have a bead on how sympathetic the judge is toward either side here. Like, the thing that I keep comparing this to is Epic versus Apple, where there were a bunch of really clear problems on the table, a bunch of really clear technical questions, a bunch of, okay, well, how much of a big deal is it if iOS has to open up? How much of a security risk is that? Here, a bunch of it just seems to be them grilling executives and talking about what. Would you make these deals if you weren't part of Microsoft? And it's all pertinent.

Like, this is what antitrust law is supposed to be about is about whether it's going to foreclose competition. But it makes it really hard for me to tell what we should be looking for when an actual decision comes down. How often is this the case with these antitrust hearings where it's just like a judge being like, I'm going to give you a billion hypotheticals? Tell me what you think. Because that just seems like wild as a way to like decide if a company can be. purchased or not. I mean, it's got to be what kind of what it always will boil down to eventually. But a bunch of this just, there aren't the kind of very, very clear hypotheticals, I think, that there were in, say, Epic versus Apple, which was just these very discreet technical, all right,

is this thing going to work on this platform? Are you going to charge this amount of money for it? And this is much more about what does this mean for the larger state of the games industry? is it going to change the way that companies make deals with each other? What does it mean for these like 10 years down the road market shares? It also seems like Tom jogged my memory on this event. There was a point in the hearing where the judge got really annoyed with the line of questioning about basically like, will you commit to putting this game on PlayStation? Just like over and over and over the lawyers. And I think it was when Phil Spencer was on the stand, but maybe I'm wrong.

It was. That was one of the moments. That was one of the few moments I think we've seen where the judge was basically. basically like to shut up with this line of questioning. And so I think it seems like the lawyers have had to then kind of go another way and be like, okay, how do we ask essentially that question with different enough words that the judge is not going to like throw us out of the courtroom? And the point being that they just can't, like that they can't make that promise. That's an impossible promise. And the FTC is like, well, yes, obviously. Yeah. And I think that

frustration has happened multiple times. And it usually is to do the FTC's questioning or whoever's answering the FTC's questioning because obviously when Microsoft's up there, they're just letting the witness just talk away, you know, like you make your case. Whereas the FTC is very pointed and some of their questioning can be irritating to witnesses, right? So that particular example was interesting because she cut in, she intervened. She's done that, she did that quite a lot in at the end of that Phil Spencer testimony and then she actually cut the testimony off. I mean, they were kind of at time anyway, but I think she was just like, okay, you're. You're done. You know, your question is done, your time's done. But yeah, she has jumped in a bunch.

She jumped in with some of the expert testimony from yesterday and the day before, just to sort of like get a grip on it. And I think it's interesting to watch when she does cut in because she wants to know predominantly from what I've seen. She wants to know about a call of duty because that's obviously been the big thing here. So she's always jumping in to be like, well, like she asked Bobby Kotech like, Why would someone subscribe, sorry, to World of Warcraft and not just pay $70 for a game? So you're trying to get an understanding of that dynamic in the market as well. And it all comes, obviously, I think it all comes down to Call of Duty. And I think that's going to come, from what I can tell, that's going to become part of her decision.

Because that's the way the FTC have framed it as well. And Sony has framed it. So, of course, it's going to be part of her thinking. That's just incredible to me, that Call of Duty is so important. now to antitrust law and not just gamers. I think it's just because it's like, and Jim Ryan was saying this the other day, it is unique, right? Like they do pump out.

We were talking about this the other day as well. They pump out a new game every year. So that's kind of unusual unless you're like a Madden or a FIFA, which are just iterative stuff. I loved Codex answer to basically how do you put out a game every year, which amounted to him basically just being like, well, there've been a lot of wars. There's so many for us to choose from. Sorry.

Which is funny because they're not even half of them in the future now. Well, and the other half are World War II. Like, what are we doing here? They run out. Yeah. Yeah, we did all the wars already, I guess. Who knows what's going to happen next? But I do think you're right that it seems like this came back over and over and over to

how big Call of Duty is and how much it matters to the game industry. And also, it seems to be the kind of thing that you can argue. you fairly successfully from both sides, whereas the FTC is like, well, we can't just have this one company own Call of Duty. It'll give it too much sway of the game industry. And then both Activision and Microsoft come out and say basically, no, call of duty is so big that we would be ridiculous to foreclose on the rest of the game industry. There's too much money. People would revolt. It's like it's so big that it's kind of a winning argument on both sides in a strange way. Is call of duty too big to fail?

That's the rare correct use of two big to fail. Yes. Yes. Call of duty is such as important institution that were it to fail, we must do anything in our power to prop it up because it would be catastrophic to society. We'd have to go back to doing real wars if we didn't have Call of Duty to play. All right. So anything else, Addie, that jumped out to you from Bobby before we get to Satchaneda?

I think that the part where the judge did jump in and say, well, all right, clearly if you say you regret not putting this thing on Switch, you don't need Microsoft to come and make you make this thing cross-platform. Like, you're going to be making decisions in your own rational self-interest. And that seems like another sort of a little bit of a hint. But otherwise, yeah, I think we've, he talked for a very, very long time and we learned a lot about Call of Duty and the Switch. Yeah, I did think it was interesting that he said he thought the Switch was probably the second most successful game console ever. Assuming the first one is the Wii, which he's also spoken very highly of in the past. past. Yeah, he regretted not bringing

Call of Duty to the Switch, right? So that's why the judge Kai-in as well, she was like, well, you know, you regret it. So, of course you'd bring it to this next generation Nintendo console. Yeah. Yeah, he had a good line about seeing the thing and it was like, Nintendo can't possibly pull off all of the stuff it's trying to do,

which I think is how a lot of people felt about the Switch. And then just slowly, but surely, it was like, oh, no, they did the thing. This works. Yeah. It's a Zelda machine. Here we go. All right, let's switch to Sotanella, who came on later Tom, run us through the greatest hits there. What did we learn from him?

Yeah, so he kind of started off. It was the FTC question, him at the beginning. So he started off with some of the stuff to do with the cloud market. So he started off very quietly as well. Like he was very quiet. Yeah, very quiet. I think Bobby did as well, Nadella was pretty quiet. He's like, well, Microsoft is a company.

He was like, yes. Usually when you'd ask Nadella a question, he'll answer like for an hour. Yeah, he's a pretty like boisterous guy. Yeah. Yeah. So that was kind of unusual. But yeah, he started off like some Xbox market share stuff.

The FTC dragged up some of the statements about how they were winning in North America for like three months when Sony didn't have good PlayStation shipment. So it was a bit weird. But they brought that into the record. Then they talked about cloud gaming. And Nadella said that he thought that Xbox Live was part of that. And that streaming was a minor part of that. I'm like, I wouldn't say,

I don't know I mean, kind of, but I get where he's coming from but that's not strictly true. And then they were like, well, so you think that,

do you? The FTC was like, okay, well, we're going to bring up all these emails where you've said you want to take

cloud mainstream. So then it was like, okay. So one of the emails was Microsoft's, I think leadership team and Nadella, they were talking to Meta

or talking about Meta, the event where they had met us new headset. Which had a bunch of Microsoft's integrations that came with it, right? That past tense is awfully generous. I'm not sure they've rolled all of it out. That is fair. Which said words about Microsoft products.

It's just some stuff, made some problems. So that hasn't happened. Which actually happens weirdly a lot with meta in Microsoft. They were supposed to do some exports, cloud gaming stuff on Facebook, but that never happened. So weird. But yeah, so they were talking, discussing amongst themselves about this event and saying, Nadella is basically saying, look, this is how we want the world to perceive us, that we're like, you know, the leaders in cloud, essentially. We're going up with teams and XCloud and everything else. I want us to push on cloud here.

So the FCC is obviously using that to say, look, cloud is clearly important to Microsoft and this is part of your thinking for this deal. Because that was in October, I think, around about then. But since then they've pulled back from cloud, right? Apparently, yeah. I think they've publicly have. So they say in this particular trial, yeah. Yeah. But behind the scenes, they just hit pause buttons.

Like, right, we're not doing emails no more. Well, no, because I mean, I think even on our side of things, when we were covering this like slow pullback from cloud, we were like, is this because of AI and like they're now going all in on AI? Or is it more likely that it was because they were about to go to, like, have to prove that they could buy Activision? So the CMA, the UK regulator, was fine with the call of duty stuff. the EU was fine with the call of duty stuff

but they both weren't fine with the cloud stuff the EU worked out a remedy essentially with Microsoft for some licensing stuff to allow cloud competitors to just automatically get their games and stuff the CMA were like no we're not interested in that sort of stuff we're going to block you deal so

they've definitely obviously been talking to those regulators over the months and gradually pulled back but they probably pulled back when they first got that set of like details from these regulators to say this is what we're concerned about so they probably thought that's Pools. Is that more likely why that cloud console never came out? I wouldn't be surprised if it's linked.

I think it's probably half and half. It's impacted by it. Yeah, it's definitely impacted, yeah. Because they were very close to launching that. So it was like close as in they'd made them and all that sort of stuff. It's also, you've got to figure some lawyer at Microsoft was like, hey, if we have a box that is called the Xbox Cloud, the argument you're about to try to make in court is going to get a lot more complicated.

But I do think, I mean, All these things can be true at the same time, right? Like the AI thing happened really fast and Microsoft clearly pushed resources at it. The business of cloud gaming has very much not been solved. Publishers do seem to have, if not, problems with it, then at least questions about it. And there's this big regulatory fight. So I think it would not be hard for Microsoft to kind of read the room and realize, okay, we're still betting on this big in the long run, but maybe this is a moment for us to, like, slow the pace down just a smidge.

And I don't think that's an unreasonable thing to have done in this moment. are. No, I think it makes sense, right? Like, we were talking the other day, David, about some of the other stuff that's, that's been missing over the past year with the cloud stuff. They made, like, all these commitments to bring into TVs and to bring your cloud library and that sort of stuff, and that stuff hasn't happened. So there's obviously been some stuff going on behind the scenes. But yeah, so that was like the, the cloud section of Nadella's testimony. So I think it's clear he is all about cloud, because he's all about cloud in all of Microsoft businesses, so he's definitely all about clouding gaming. Yeah, I was going to say anyone who has

paid attention to him speak the last several years can tell you that. Yeah, exactly. And then we moved on to, I wouldn't say this is a bombshell, but it was just a kind of funny thing he said, was that he would get rid of exclusives in gaming if he could, but the market leader, which will assume is Sony here and not Nintendo, even though Nintendo's been doing exclusives for quite some time as well. So you could argue between yourselves who that refers to, but I think it's Sony, because I don't think Microsoft's trying to bury Nintendo in this case. They're definitely trying to bury Sony. No, Microsoft is trying to remind you how terrific Nintendo is. That's Microsoft's whole endgame here.

Yeah. So he said he wanted to end those exclusives, but the market leader doesn't let us do that. God, poor down to Microsoft. Poor Microsoft. Yeah, and so that was that. And obviously, they didn't get a question because it was under Microsoft's lawyers. questioning him so he was free to just say stuff like that and then he committed again to shipping call a duty on PlayStation so similar to not as strong as Phil Spencer's sort of oaf

I'll put my hand up sort of thing but you know it was still significant that the CEO's saying it as well and we also didn't get any back and forth with the FTC questioning him again to see if if he would put Diablo on there all the other questions that we the FTC fired at Spencer And then that was kind of most of his testimony, really. But like I say, he got off lightly. He really did. It was quieter than I expected. Yeah, I was just going to ask, were you surprised, Addy,

at kind of how lightly both CEOs were treated? Tom mentioned being surprised. Were you? I was a little bit. And I mean, I'm wondering how much of it is that the people who went earlier just popping up all over the evidence. They're in all of these email chains that they get to ask about. Jim Ryan, while not there, was, you know, there in spirit.

these are all of these people who have been saying all of these really contentious things about each other on these first two days. And now, like, such an Adela is not primarily an Xbox guy. He is a guy who goes and sits back and manages the rest of Microsoft. And he's there because he owns Microsoft. But he's just not knee-deep in these decisions the way that a bunch of the people from the early days were. Yeah, it's a good reminder that CEOs mostly don't actually know what's going on inside of their company. That's very true. Yeah, and I think that's probably why they go off.

likely, right? But I swear in other cases, like federal cases, we usually see judges going out at the CEOs. So like meta. I know. It was strange. Fair enough. All right. Well, the newsiest and funniest and best and most interesting thing that happened yesterday was this document that came out from Sony that was supposed to be. Adi, you're the one who figured out what was going on here. So explain what happened. Somehow it just ended up in our Slack and like everyone unmovilized to figure out what to do about this terribly redacted document. What happened here? So Sony at some point filed a sworn testimony. It's like here's our statement of facts pertinent. And at some point, this was brought up in court and the courts agreed there were going to be

portions of it that were sealed. These were like financial details largely. And there are various ways that you can redact things. You can just paste black bars over them. They did not do this. As far as we can tell, they went over it with an actual pen, which left just enough of the document original text still visible with the, like, there was, imagine drawing a Sharpie over a piece of printed text, that if you messed with the gamma from the PDF, you could actually find out all of these top secret things. We don't know who did this. We don't know who. Their penmanship was impeccable, though, right? the actual marking out was nearly perfect to the point where we're like, did a computer do this? See, I want to know, I would love to hear from someone who is a listener who actually knows how this stuff goes down, because I don't know if someone is just really amazing at handling a pen, if there's some kind of semi-automated process.

It's like, you take calligraphy for years, and then you're like, what am I going to do with this professionally? And then you just get into redacting for a living? I will say, it is not the worst redaction I've seen. There have been much, much worse redactions, including. putting ones where you can just highlight the text from behind it because they just put a black bar over something that had already been scanned. So it's not like, isn't that embarrassing? But it's not great. Yeah, I'd like to think that they did it all like line by line with a ruler and a Sharpie, like old.

Oh, yeah. Yeah. I hope so. I mean, it sure looks like it. Because some of it is slightly off, but you can tell. You can tell where the pen ends on the sides of it. Tom, we asked you to make us a list of everything we learned because it was some of the most. revelatory stuff from the whole trial. You want to give it to us? Give us the rundown.

Yeah, well, firstly, there's a bunch of stuff in there that people have been tweeting about that we can't exactly see the figures, so we're not sure. It's like percentages and all sorts stuff, but the stuff that we're fairly sure on is that Horizon Forbidden West apparently costs $212 million to make over five years with 300 employees. The Last of Us Part 2 was 220 million and around 200 employees. And then Sony says that 1 million PlayStation games play nothing but Call of Duty. That's nuts. Interesting.

So it's just literally a Call of Duty console. And then there's suggestions that in the document there was around about 800 million in PlayStation revenue just in the US alone during 2021 for Call of Duty. Just from Call of Duty. Wow. Yeah. And we think the document says 1.5 billion globally in 2021 alone. And then when you count, so Sony says like when you count accessories, subscriptions and everything else that comes with that franchise, then this jumps up to what we think is either $13.9 billion or $15.9 billion a year.

But if a way. It is too big to fail. It is. It's so much money. Wow. There's a lot of money. This is why you have to have call a duty everywhere thing. Like the numbers don't lie on that front.

Yeah. Like, that should immediately say to you, it has to be on all platforms. And Bobby Kotech said, like, why they asked him yesterday, like, why wouldn't you make it exclusive? Okay, here's my new theory, is that somebody redacted this badly on purpose, hoping that everyone would see it because those numbers tell such a story about why you would not make this game exclusive. I have no evidence for this. There's no chance this is true, but this is now my conspiracy. So what you're saying is an Xbox fanboy in the core or in the FTC or something that's done this.

Absolutely. Yes. Yes. Someone with great calligraphy skills who loves Call of Duty on their Xbox. I mean, it's not beyond. You never know. If that's you, email us, Virgcast at theVirch.com. But that news about the last of us in Horizon Forbidden Rest, that was kind of like big news, too,

because we usually don't know how much these games cost to make. Like, we get rough estimates from the British. Yeah, I think it is roughly always around the sort of 200 million mark, really, for those sort of big games. But it also wasn't just Sony that had redaction problems in all of this. So obviously we got all that information out there and that was like, oh, cool. And then we realized, oh, hang on a minute, like the courts pulled all the documents on this folder that they have apart from one. And I was like, can't let me have look at this document.

It was the exports one that revealed that Microsoft was obviously going after Sega, Bungi, in a bunch of other studios, and they had redacted all of that stuff in this new document that had been uploaded. And then as the hours went by, that document disappeared. The link to the documents disappeared from the court website, and it's all just gone very quiet. So I'm hoping today that we hear exactly what's going on there, because there hasn't been any filings mentioned in it just yet. But it's obviously a bit of a mess. And who knows when we're going to see the other exhibits in this case now? It's just all going to be redacted. They're just going to be like, never. mind. You don't get to read anything. She's a giant sharpie. Just a picture of a sharpie.

Yeah. All right. Well, speaking of, y'all need to get to this thing, which starts in just a few minutes. Addie, any, what are you looking for today? Anything that's still sort of outstanding that you're curious about to see? At this point, the thing I'm most curious about is just what more questions the judge has, especially because we're going to have closing statements and the closing statements. I believe, she said earlier, it's not just going to be one way. It's where she gets to kind of do her last grilling of both sides. And so I'm hoping that will at least give us a little bit more of a sense of what we could be looking for in a ruling. Yeah, that was one of the things we really learned from Epic versus Apple, too, was like the more you pay attention to the questions, the judge is

asking the better equipped you're going to be to figure out where this is actually going to go. Tom, what about you? So it's going to be a lot of financial stuff in the morning, I think, with the CFO of exports and CFO Microsoft appearing. So I think we're going to probably get some stuff there. I am curious to see what Nintendo has to say as well. because they're appearing today. And it will mean that we'll have five days of constant arguments about the Switch, I'm sure of that. So hopefully Nintendo will sort of answer the question

whether it's a game console or not the Switch. And then the closed statements, yeah, I think they'll kind of hint at where they're trying to sway the judge, I guess, which they kind of started off at the beginning with the opening statements. And then I'm interested, like you say, to see what, if the judge cuts in at any point again today

and if it's about call of duty. All right. And Alex, you and I are just going to screw up and go play some co-op call of duty right that's that's my day yeah i mean it's too big to fail we got to play it i mean you're americans you love shooting things and you love multiplayer love shooting your friends yeah that's and there we go on that note awesome thank you all that's it that's the verge cast the website was really good this week we had a thing on the best tech books that is both very good and surprisingly controversial like it's sort of encouraging to know that the internet has strong

opinions about books at this moment in time but they do and we have a form where you can tell us all the books that you missed, and you'll be wrong about that, but that's okay, because we picked all the best books. Go read some of those books. I wrote a thing about Google Reader that just went live on Friday, and it made me sad that Google Reader has been gone for 10 years, but here we are. The Reddit stuff continues to be chaotic. Today's going to be a crazy day in Reddit like we were talking about. Lots to talk about next week. We're off next Wednesday, but we'll be back next Friday. Have an awesome weekend. That's Virgcast. Rock and roll.

And that's a wrap for Vergecast this week. We'd love to hear from you. Shoot a an email at vergecast at theverge.com. The Vergecast is a production of The Verge and the Vox Media Podcast Network. The show is produced by me, Liam James, and our senior audio director, Andrew Marino. Our editorial director is Brooke Minters. That's it. We'll see you next week.