Monologue: Jony Ive and OpenAI's New BS Machine

0:00This is an iHeart Podcast.

0:24Hello and welcome to this week's Better Offline Monologue. I'm your host, Ed Zitron.

0:32and i am going a little insane you've likely seen the news that open ai is buying and that's in air quotes by the way famed apple designer joni i've startup io you may think that i'm about to explain to you what this company does other than build devices or why it was acquired and i cannot tell you oh and by the way the air quotes of a buying because they bought the entire company in$6.5 billion of OpenAI stock. Stock in a company that is unprofitable. These aren't even real stock units. I'll get to that later. By the way, Joni Ive, he worked at Apple, he worked on designing products with the iPod, the iMac, and iPhone, worked closely with Steve Jobs, dined out on that for many years.

1:12He left Apple in 2019. Now, this announcement came in the form of a nine minute long video that does not explain anything about the company, but there's been some reporting, if you could call it that. Now let's quote the Wall Street Journal's Burbagean, who I generally really like, but there is a piss take happening here. Altman and I have offered a few hints at the secret project they've been working on. The product will be capable of being aware of the user's surroundings in life, will be unobtrusive, able to rest in one's pocket and on one's desk, and will be a third core device a person would put on a desk after a MacBook Pro and an iPhone.

1:46Now that would and will, those are load-bearing, by the way. I continue though. The journal earlier reported that the device won't be a phone And that Ive and Altman's intent is to help wean users from screens Altman said that the device isn't a pair of glasses And that Ive has been sceptical about building something to wear on the body Altman and Ive offered details about how the collaboration grew over the past few years 18 months ago, OpenAI Vice President of Product Peter Wellander began working with Ive's team The two sides became excited about a specific device last fall What device is that?

2:16Who the fuck knows? Print it, baby! there's also a thing in this article about this effectively tripling or quadrupling the value of open ai it's complete bullshit in fact all of this sounds like complete bollocks to me why are you announcing this now what what is it you're buying who knows the journal also claims that altman believes that they will ship a hundred million of these theoretical devices by late 2026 the magical year when everything from agi to powerful agents are meant to work the bullshit year i can't wait. Anyway, Joni Ive also gets to keep his independent design studio love from, which has already been working with OpenAI and will, according to Bloomberg, take over design for all of OpenAI, including its software.

2:57And apparently Joni and Sammy initially met up to improve the interface of ChatGPT. When did that fucking happen? Bloomberg also reports that Altman and Ive have yet to work out a user interface for the new hardware product, which is a big deal, considering it's meant to be out in like a year and a half? What are we doing here? I understand that objective reporting requires you to just say the things that, but I feel like at some point you have to just say, all of this is theoretical. It's complete wank. And all signs point to this venture being a load of bollocks. It's a smokescreen, a desperate move by OpenAI, a desperate company.

3:35All stock deals are quite common in large public corporations that are quite liquid, but they have stock that has value that can then be sold, right? But OpenAI is neither public nor a corporation. It's the for-profit arm of a non-profit desperate to convert its for-profit arm into a public benefit corporation. They don't have stock. They don't have stock. They have these goddamn profit participation units. It's so silly. It's all very silly. And Joni Ive and his team of 55 people, they're working on a very real thing. And they were acquired with$6.5 billion of very real paper. Profit participation units in a company that burns billions of dollars and has never turned any profit.

4:16To be clear, the company IO is somehow different to Love From, his design firm. 55 people work at IO. I think like that many work at Love From. Really not clear what they work on at IO though. No one seems to know. No one seems to have a single detail other than the fact that they can't tell you what they're working on, which sounds a lot like they have no idea. Now, you may also wonder what Joni Ive has been up to since he left Apple in 2019. The answer is extremely vague. In 2020, he founded Love From in 2019, a design firm. And in 2020, they signed a non-specific multi-year partnership to design the future of Airbnb.

4:55Apple has apparently kept working with Love From in some way that I can really not find any information about. Love From also worked on some sort of seal for King Charles of England to give away to, and I quote, recognize private sector companies that are leading the way in creating sustainable markets. They also designed an entirely new font for it, which does not matter in the slightest to anyone, but led to some reporters writing entire stories about it because Joni fucking Ive was involved. In 2023, Ive and his team redesigned Lin Sondek's LP12 turntable in, and I quote, a respectful and gentle way.

5:29And in 2024, he teamed up with fashion brand Moncler to make an out-to-wear line, and his work epistle involves some kind of magnetic button that can click together different pieces, which is kind of cool. I'd have loved to actually read about that, but that you can't. It's just, people just put what he says in the thing. They don't go and find the clothes. I'd have actually been interested in that. Can't find shit about it, because no one actually holds any of these people accountable. They just go, oh, it's Joni Ive. I'll listen to whatever shit he's... Anyway, I'm very sorry, okay? I'm very sorry, but reading about this really frustrated me.

6:05And Ive is also working with Ferrari, apparently, on a new electric vehicle. Can we see it? Do we know when it will be released? What kind? What's the range? What will it look like? No. None for you. None for you, you silly little freak. How dare you ask Joni Ive to tell you what he's doing? So in summary, since 2019, Joni Ive has redesigned Airbnb in some way, made a new font, made a new system for putting on clothing, made a medal for the King of England to give companies that recycle, and made some non-specific contribution to creating an electric Ferrari, while also designing a non-specific device that OpenAI intends to ship to hundreds of millions of people.

6:41And to be clear, like, they are designing a product that another company run by Joni Ive, IO, will manufacture. Joni Ive has not, from what I can Till worked on the consumer electronics products since he left Apple. And let's be really clear, Apple has not really been cooking since Steve Jobs died, and their coolest shit in recent history came after Ive left, specifically the new generation of M-series laptops, iMacs, and the like. By the middle of 2024, all of his designers left the company, and really, I like the iMacs and MacBook Airs way more now. And I know, whatever, like, hindsight's 2020, like, I'm sure, like, the original MacBook Air was kind of cool, but it's like, how much did Joni Ive actually work on that.

7:21And it's actually really difficult to find out what it is that Joni Ive did at Apple, other than be associated with things. What you can see, however, is how good Joni Ive is at deals, getting people to pay to be associated with Joni Ive, the guy who worked with Steve Jobs on big products that people like. Has he built anything people like recently? Who knows? But because people are lacking in object permanence, they believe Ive's still got it, even if it doesn't really mean anything. In any case, this deal is ridiculous. A mere week ago, Sam Altman announced that Instacart CEO Fitchy Simo, who is already on the OpenAI board, would become the CEO of Applications OpenAI and is, and I quote the Wall Street Journal, charged with helping the chat GPT maker become a profitable global business while remaking an internal culture that has been mired in executive infighting and high-profile departures.

8:07Yet as part of the acquisition, Joni Ive will take over all design and OpenAI along with his team of 55 people from IO. I think Love From will be as well? It's just, this whole deal is such a fucking mess. And Simo, when she joins in the summer, will now oversee a company that has fundamentally changed since she took the position and be left to deal with the fallout because her whole fucking job will be to take responsibility for the mess that Sam Altman's made. And man, what a mess. OpenAI burned$5 billion in 2024 and is on course to burn over$10 billion this year. Acquiring another company in an all-stock deal at this stage isn't a victory.

8:42It's a sign that something is financially rotten at America's dampest AI startup. up. As I've discussed on previous episodes, OpenAI has maybe$15 billion of liquidity at any given time, and has promised$19 billion to complete the Stargate data centers, as well as allegedly offering$3 billion, though it's not obvious if this will be in cash or stocked by the coding startup Winsurf. And when I say, by the way, they have$15 billion of liquidity, I mean that at max, it could be way less, because that is just the combination of their funding and in and out revenue. And also, putting aside the fact that neither I.O.

9:15nor OpenAI have actually settled on a product, hardware is hard. Research and development is expensive. Apple spends tens of billions of dollars a year on it, and so is manufacturing, especially if this device is meant to be smaller than a smartphone, and especially in the era of tariffs, unless they assume that those will be gone by then, which they won't. Worse still, the margins on hardware are much lower, about 10 to 20%, and there isn't a chance in hell that using this device won't require you to subscribe to ChatGPT, which means users will have to pay the subscription fee on top of this theoretical device, and also be pinging ChatGPT servers which are expensive and unsustainable and unprofitable to run, even.

9:52I swear I should be able to say unprofitable by now, I say it enough fucking times. I should also add that if there's one thing that Sam Altman has proven, it's that he's fundamentally bad at product. While ChatGPT might be popular, it's hard to say what it really does, which you can get away with when your free software is hyped by every media outlet in the world but can't with a device that will likely cost hundreds of dollars. OpenAI has also proven that it's not very good at making the kind of seamless and effortless product that companies like Apple are known for. And let's be real, with what money are they building this crap?

10:22You can't pay factories in stock. In any case, this is a desperate move made by OpenAI to try and bolster the valuation of a company that's lost the plot if they ever found it. If anything, this device suggests a fundamental lack in chat GPT as a product, and while boosters may frame this as the next generation of open AI, it feels more like a smokescreen to convince people that this company isn't washed. Members of the media treat this company with suspicion and demand that they actually show you something before claiming this is the biggest, most hugest move in Silicon Valley history. Don't embarrass yourself by humoring these twerps.

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