Apple’s AI 'Gap Year' at WWDC?, Elon Vs. Trump Goes Nuclear, NYTimes’ OpenAI Attack

28:50I think like, yeah, I think, I think it would make, yeah, it makes all the sense in the world. I'm sold. It makes all completely all the sense, baking it in, getting rid of Siri, maybe, maybe even renaming Siri and saying, we get it. We fell behind. Let's, let's just change up everything. Plex. Plex. Turn on the lights. Yeah. That's it. You're welcome. Send the invoice to Kantrowitz and Roy. Exactly. And here's why I think so. Maybe it happens at WWDC. Maybe it doesn't. Here's why I think it's likely to happen. So you listen to the words of Arvind Sernivas, the CEO of Perplexity, and it sounds like he's doing some positioning here.

29:41Now, he's been attacking Google from the beginning. But again, at this Bloomberg conference, he said Google's assistant was a terrible product. and said the tech giant introduces the same artificial intelligence feature year after year without actually shipping it to users. If you're Eddie Q, the head of services for Apple, and you're listening to that, you got to love it. Basically, he's accusing Google of the same thing that people have been accusing Apple of. So sort of taking Apple's side in some ways while saying, you know, hey, my product might be in a better spot. and perplexity is also right now in talks for a wide-ranging deal to integrate its technology into Samsung devices.

30:26You're Apple. You're seeing this go down. You're watching the AI battle accelerate and perplexity, which you can afford, which would help your business in every which way, which is slagging Google for you, is on the cusp of making a deal with Samsung. something, that's where you go in and you make your acquisition. Yeah. And another angle of that could be, and maybe we're just beginning to pine the sky optimistic here, but like if you're a shareholder, that the practice of Apple for so many years of just churning out cash and buying back shares has worked well and it's boosted the stock price and they basically were just a cash machine.

31:10but right now the idea that like you are not investing in something everyone recognizes something is broken and you have the money to do something about it that if you're shareholders you're gonna have a problem with that or you should you should be like i mean obviously it's it's it's nice to receive the buyback boosts to a share price but at a certain point like guys invest that money in something because you're going to be disrupted I mean, ultimately, Apple on the market has to be growth stock, right? And what is it going to be a non-growth stock that's issuing dividends and doing buybacks?

31:48Is that a company you want to hold on your balance sheet? Well, and for like, yeah, as a high tech innovation company, they have to be. They have been, but this isn't like, like a utility or I mean, this is should be a growth stock in a growing company. I think this would be the best$20 billion that Apple spends if it does it. And let me take you back before we move on, before we take a break and talk about Elon and Trump, for those who are interested. Let me just take you back to May 7th, a report in The Verge covering Eddie Q, the head of Apple services division, covering him testifying in the Google antitrust trial.

32:33The headline, Apple is looking to add perplexity in other AI search engines to Safari. And what Q says is that it's still early days for generative AI, that Apple has agreement with OpenAI for some AI services. It's important to make sure we have the capability to switch if we have to. Now, of course, he's saying this because he doesn't want the judge to kill this deal with Google. By the way, all indications are that that deal is really under threat, the$20 billion deal, which I'm going to write about in big technology probably on Sunday. So stay tuned for that. I think it's one of the most underrated liabilities for big tech companies.

33:14It's one of the most underrated liabilities for a big tech company today, if not the biggest. Q has said, look, we might switch off of Google. That tank Google stock, which kind of shows you the amount of value that's associated with this, makes too much sense for this deal not to happen. Yeah, I was just looking up. $410 billion spent in share buybacks over the last five years. Expected$90 billion this year. As your company is like clearly under threat of disruption, spend the 20. Stop wasting time. Spend the 20. Go buy perplexity. And remember, through, I was speaking with Mark Mahaney about this, Evercore ISI analyst.

33:57We're talking about it today. Think about it and it probably will show up in the story. Think about it this way. You're going through antitrust review of this deal. Apple has a negligible share of the search market and perplexity has a negligible share of the search market. Deal will sail through, sail through. Tim Cook, get that checkbook out and go buy perplexity today. Hey, Plex, do the deal. Do the deal, make it Plex. All right, we're gonna talk about Elon and Trump. We're gonna talk about the New York Times and OpenAI and we're going to do it right after this break. Did you know your credit card points and miles can lose value to inflation?

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35:37You're used to hearing my voice on the world bringing you interviews from around the globe. And you hear me reporting environment and climate news. I'm Carolyn Buehler. And I'm Marco Werman. We're now with you hosting The World Together.

36:04And we're back here on Big Technology Podcast Friday edition. All right. So on Wednesday, Anthony Scaramucci came onto the show. We recorded on Tuesday and we had this discussion about Elon Musk's criticism of the big, beautiful bill. and I said, basically, this is almost a direct quote, I think. I said, well, they're not in a flame war or maybe they are because Elon is criticizing this Build Back Better deal. And Anthony and I discussed a little bit about the politics between Elon and Trump. And we both sort of came to the conclusion that they had too much to lose for this to turn into anything but a cordial parting.

36:48Well, we were both wrong. And Anthony, I think, did a very good job explaining why Elon fell out of favor in Washington. But I think the thing that everyone watching this has been surprised by, and you can make the opposite argument, but it's been a surprise to me that it went nuclear like this. and that Elon has in one afternoon on Thursday said that he was responsible for Trump's victory, said that Trump was, I'm just going to quote it because I don't want to get sued, Elon Musk said real Donald Trump is in the Epstein files. That is the real reason they have not been made public. Okay, so and Trump hitting back saying Elon was wearing thin and that he asked him to leave.

37:35he took away this EV mandate that forced everyone to buy electric cars that nobody else wanted and he knew for months I was going to do. And then he just went all caps crazy. Flame war for the ages. Ranjan, let me just toss it to you. What was going through your mind when you saw this? And if our assumption was that they had too much to lose to go nuclear on each other, Why do you think they went nuclear on each other? I think your assumption is based on a prisoner's dilemma of two rational actors making decisions, analytically driven decisions. And I don't think that's what we're dealing with.

38:17I'd like to say, we must, I need to go back through past of our podcast audio. But I tweeted on November 7th, breakup, Musk, Trump coming in March. I was off by three months. But yeah, I think, I don't know. I actually, out of all the things that have captivated my attention, this one almost I didn't pay that much attention to just because it was sad. It was kind of painful. But to me, again, expected. These are not rational actors in the traditional sense. And again, it's been the strength of both of them to not be a rational actor by kind of like conventional wisdom. So I think it was inevitable.

39:03And I'm more curious of where this goes as opposed to what's happening now. I will say like the, I definitely enjoyed the memes of like, Trump is in the Epstein files, yet I helped him get elected. Obviously some logical inconsistency there, but overall, I mean, where this goes - Maybe Elon didn't know beforehand. But let's be honest, if Trump was in the Epstein files, I mean, this is a point that Laura Loomer made, so all caveats included. If he was in the Epstein files, you don't think the Biden administration would have let those out? Oh, yeah, yeah. I mean, 100%. And I think I want the Epstein files, though.

39:43Sure. Let's take a look at them. Imagine if they're just incredibly boring. I'm sure they are. Like even Dan Bongino came out and said that there's no evidence that Epstein was killed. like all science points him killing himself. So yeah, release them. The transparency was good. Release the files. Release the files. That's our call here on big technology. Apple, buy perplexity and then release the Epstein files. That's our platform. That's our thing now. You got to stand for something, Ron John. Yeah. He's running. He's running. He's running. I will say here publicly that I was wrong. I said to you and to Chris Hayes on an episode that I thought that this relationship had more staying power than a lot of people were giving you credit for.

40:32And even with Mooch, didn't bring up the fact that it could blow up spectacularly, although I said maybe we're in the beginning of the flame war to be completely clear about what happened. But I was wrong. I didn't see it going as bad as it did, and it did go as bad as it did, or even worse than I think we imagined it could. Where does it go? that's what matters. So four implications for four players here, Tesla, SpaceX, the tech right, and Elon and his legacy. So let's just do it quickly. So Tesla, they dropped 14%. Stock drops 14 % on Thursday, and it's up five or close to 6 % today, Friday.

41:14So a bit of a rebound, but loses 100 billion in market cap basically right away. And look, it's got, there's a chance that it's going to have this autonomous driving pilot or launch coming up in Austin next week. Who knows if that is going to be delayed, but this will definitely hang over it because of course, if you're running self-driving cars, you need regulatory approval. And of course it's on a state level, but we know how the U.S. government works. The federal level can dictate to the state because the federal level does have a lot of funding, big, beautiful spending, shall we say, that impacts the state.

41:49So that is yet to be determined. I think we've also seen a purchasing pullback on Teslas, especially in Europe. I mean, I think Europe fell 50 % year over year in a couple of months. And that is a damning trend for Tesla sales, because I get the companies to sell cars. It's a car company for now, at least. So I don't think Elon breaking with Trump is going to be good for winning back those buyers in Europe. That's a pipe dream. And I think it will probably stop, let's say, Trump supporting a Cybertruck would-be buyers from going out and buying the Cybertrucks. So it could end up being that this doesn't help with those that it's hurt, and it hurts those that were leaning into the Elon camp, leading to worse prospects for Tesla.

42:38Of course, that's the most negative possible interpretation of what's happening and maybe they make up next week and you know all's hunky-dory but it's hard to see that happening what do you think rajan well i think just as a sign of the state of politics right now one of my friends was like convinced that trump and musk are going to make up next week and both of them are just very long tesla calls call options and i remember he kind of said this and it's somewhat in jest but i was like you realize like do you really think so this is the president of the United States we're talking about yet. Right.

43:11This is like actually a thought and a conversation. But I think Tesla, the car company, I don't see how you recover from this. Because again, like the core constituency of more environmentally driven people, you're not going to just make up that brand damage tomorrow. I think maybe to take the like positive side on things. I think this is going to force robots or self-driving, like they have to nail one of those. They have to optimist, self-drive, like self-driving robo taxis. Finally, it's been promised for a long time. He's going back, deliver one of those and everything's going to be okay. But Tesla as purely a car company, the valuation has not made sense for a long time.

44:00And it certainly doesn't make sense now and is under threat from a lot of different directions. Here's what you need. You need the autonomous driving to work. So that'll be a good answer if it starts next week and it actually works. If that happens, I think Tesla is saved. Elon's legacy is saved. We're going to get to that in a moment, but it has to work. Bottom line. SpaceX though. SpaceX is going to be interesting. So SpaceX has a ton of money in federal contracts. And if you remember Sagar and Jetty's episode here a couple of months ago, we talked about this potential that maybe like Democrats get elected and they doge SpaceX contracts.

44:41We never thought that maybe Trump would then doge SpaceX himself. But certainly, it seems like Trump is going to think about the subsidies. He's put this on social that Muskets and probably the contracts. Although I would argue, and I think it's hard to really go against this, that the U.S. government kind of needs SpaceX more than SpaceX needs them, or maybe not even more, but they both need each other. And that's why Elon kind of tweeted, like, make my day, because like, nobody's going to go to the International Space Station without them. So this is, again, this is some reporting from our big technology fellow, Owen Levine.

45:16He says, he writes again in our newsletter from Thursday, beyond its existing 4.5 billion in federal contracts, SpaceX is also poised to get a slice of the$42 billion in contracts to provide internet connections to rural areas through Starlink. They also have this Dragon capsule that they are working with, with the ISS. And Musk said, we're going to stop that. And then like an account with like 20 followers said, you know, you probably shouldn't stop that. And he goes, good idea. We won't stop that. but DXYZ, which is a fund that has a large portion of its portfolio invested in SpaceX, went down 10 % yesterday as well.

46:00So that's the SpaceX outlook. What do you think? Yeah, I mean, I think you make the right point that they need each other a lot more than Tesla and the US government need each other. There's been a lot of advance and in terms of like, Like it's our overall as a country positioning, especially relative to China in terms of space exploration, in terms of satellite launches. Like and I think it's a much more sensitive, interesting one. Like could Trump be vindictive enough to actually risk all that and just go nuclear on it? Certainly. um i actually you know i think the spacex story is going to be more interesting in the near term because tesla is gonna again if they if some massive technological advance happens in the next few months it gets very interesting but otherwise you see like a slow decline and maybe some kind of rebound over time or steady like steadying of their overall sales but spacex can move fast in either direction.

47:02Oh, yes. You're right. Totally immediate consequences that we could see. All right. What about the tech right? So this coalition among people who supported Elon and Trump together sort of coalesced in Silicon Valley, not all of Silicon Valley, but some vocal leaders, a lot of VCs. Think of Marc Andreessen, for instance. Some of the all in guys like David Sachs must be having an awkward moment in the White House, probably hiding in his office, thinking about how his two buddies are fighting. So there's an interesting moment here where the tech right may have to pick sides. Do you go with Elon or do you go with Trump if this fissure continues?

47:42My perspective is that they are going to try to not take sides, that you're going to see things like Bill Ackman saying, you know, you guys really need to get along for the good of the country. I don't know if you would include David Friedberg in this. in this group, but he wrote, he's been one of the all in hosts. He wrote China just won. He's been to the White House a couple of times to do some interviews. So basically not trying to pick sides, saying China won. I think many will land with Trump over Musk if you really press them. He is the president after all. But what do you think about the implications of this fissure in the tech right?

48:20I think majority of the names you just kind of listed off will move on and act like none of this ever happened that they said anything or had had any position relative to either Musk or Trump. I think overall, like people move back towards Musk and definitely not choose Trump over Musk. But I think like the idea that they ever had positioned the two of them together as truly transformative, people will just ignore that they said themselves. Now, let's talk about Elon's legacy. I think that it's still too early to say where this is going to be in the Elon Musk history book. But it will be there.

49:03And I think the real question is, is this the first chapter? Is it a footnote? My sort of cynical take is it's just going to depend on how his businesses do. Like if SpaceX gets to Mars and Tesla starts shuffling people around the world with autonomous cars, then this will be a footnote. But those businesses' future are tied in some ways to Elon's political bet here. I agree with that. I mean, I think the amount of wealth created both for Elon Musk, but also for every shareholder of any of those companies is what drove the power to get to the White House in the capacity that he did. So, yeah, I think in terms of legacy, it's always been a bad bet to bet against Elon.

49:51and he's still around and he's got a long way to go. So I think that side, that story remains to be written. I think like, you know, what the effect of Doge was probably and hopefully more comes out and we actually start to see some concrete evidence of certainly the negative a lot came out. Maybe there was some positive, but overall, like what were the real impacts of those few months running around with Doge? But yeah, I think overall, Elon's legacy, it remains to be written overall. I do want to like pause for a point moment here and just kind of like you brought up the Doge stuff. I think we should talk about it.

50:34I think that if it's possible, what he did with USAID has been undercovered. Probably good arguments for reforming it, but why do you destroy it? And then there's other stuff that we're going to find with Doge that just didn't work according to plan. We might look at this as a moment that went from Elon Musk being a suboptimal performer with Doge to being maybe a disaster. Because there's this other tool, this is from ProPublica, that they developed this error-prone AI tool to munch veteran affairs contracts. Here's from the story. There was an engineer who worked for Doge who built an artificial intelligence tool to identify which services from private companies were not essential.

51:20He labeled those contracts munchable. But the tool hallucinated the sizes of contracts, frequently misread them and inflated their values, and concluded more than 1 ,000 were each worth$34 million, while some of them were worth only$35 ,000. The AI tool flagged more than 2 ,000 contracts for munching. It's unclear how many have been or are on track to be canceled, but they included, but some of the canceled contracts, unclear if this is 100 % related or related at all, but some of the VA contracts that have been canceled, including one to maintain a gene sequencing device used to develop better cancer treatments.

52:03Another was for blood sample analysis in support of VA research. another was to provide additional tools to measure and improve the care that nurses provide the programmer that worked with Doge Sahil Lavangia he said this and he was also I think he was he was ousted or left Doge after going public with some information about it he said I think mistakes were made. I'm sure mistakes were made. Mistakes are always made. I would never recommend someone run my code and do what it says. It's like that office episode where Steve Carell drives into a lake because Google Maps says drive into the lake. Do not drive into the lake.

52:47This is bad. I mean, you had basically people coming in, volunteering, building AI tools, and then the government just kind of following their advice seemingly blindly and killing important programs. What a disaster. Yeah. I mean, I think it's definitely pretty terrible. I think you're right that perhaps it was undercover because also everything was moving so fast that actually like trying to get a handle on things and report on it properly was incredibly difficult. So what the actual impacts are, maybe there is a lot more to come out. I I think to bring it back on the tech side, I think like this is actually a perfect example as well of like AI and like the idea of like at scale going over contracts.

53:37I wonder if they're like what models they were just creating wrappers around for Doge AI and like to actually make decisions without even reviewing them in any kind of way or like understanding what you're looking at. this is like exactly the nightmare scenario that people who are negative and bearish on AI present. I think that part, trying to separate this purely at a technological level, like that's the stuff that's almost like frustrating because it's, this is exactly the negative scenario that everyone presents. And in most cases, that's not how things are operating. But this was exactly that, just using AI in a shitty way and then actually like making really bad decisions using that.

54:22Yeah, like maybe there were some good, I think there were some good implementations from the Doge program. Again, we're going to have, I've been teasing it for a while, but the news cycle's been nuts, but Bill Vast from Booz Allen is going to come on and talk a little bit about the technology implementations and how they've helped. But yeah, some of these things, I don't know. I don't know how you justify them. Okay, very quickly before we end, OpenAI, New York Times, they're in court. And the New York Times is telling OpenAI, has gotten a judge to rule in favor of this position, that OpenAI has to preserve its chats because people who are using OpenAI's ChatGPT to go around the New York Times paywall may delete those chats.

55:08And therefore, OpenAI has to preserve all ChatGPT chats. to some degree. I mean, I guess this is like people using ChatGPT versus like some of these like bespoke APIs. Is this a privacy disaster waiting to happen? I actually think this is one of the most interesting court cases going on right now because think about the implications. It's OpenAI wants to delete your data and most people are worried about OpenAI hoovering up too much data and copyright issues and whatever else. they're saying let us delete your data and from like especially a security and privacy standpoint as a user you want to be able to delete your data and then because of the new york times worrying about open ai actually like allowing users to access copyrighted material saying do they should not be allowed to use the delete your data is kind of a ninja move i think it's kind of like You're both forcing OpenAI to actually have to answer to accusations around copyright, but you're also kind of screwed.

56:17If this holds, this actually hurts OpenAI even more from a privacy perspective because the branding element that they're holding on to all of your chats, as we've talked about at length, people are getting more and more personal with ChatGPT. and if that actually, that's a very sticky point from a product perspective. So if people start feeling a little ickier about it and like a little more uncomfortable because they know that that data is always living somewhere, that actually could be like a double-edged threat on open AI coming from the New York Times. I wonder if they're that strategic about it.

56:55I don't know. Doesn't that make the New York Times then a bad actor for doing that? Just like imperiling hundreds of millions of users for like a W? I like it. I like savage New York Times coming in in the cage match. I like if they're acting that savagely, I kind of like it in this one. Could I say one way that OpenAI could have avoided all of this is, I guess... Not called the New York Times. We don't know the answer right now because the court case is still going, but like, come on. Maybe talk to the Times before, putting some of their material in your large language model? Yeah, but they can't do that.

57:35They feasibly cannot talk to every single publisher and have a conversation, have a request. Their business model is dependent on not having those conversations. And they're going to have, I think they do licensing deals with like Reuters, a couple others, and they're going to have it at a high level. But if that becomes the absolute norm and expectation, then crawling margins in big technology, they should have to ask us first. Can you imagine the level of team you would need to make that happen? Spirit of the law or spirit of the situation. Do you think Open AI, let's put the law aside for a moment.

58:17Let's talk purely on spirits here. Spirits. It's Friday. Do you think the times is right to tell OpenAI not to crawl the stuff? Like, I don't know, are people really, could OpenAI, you know, effectively crawl that information and transform it? They're not like, I don't think they're just copying and pasting the New York Times and making it available in ChatGPT. So is there something actually all that wrong with what OpenAI is doing? Well, we've seen this over and over on the publisher side, like perplexity in Forbes, but perplexity was even kind of presenting an image in a very long summary of paywalled content.

58:56OpenAI, same concern, but the New York Times had shown that they can almost verbatim recreate stories on ChatGPT. So on one hand, obviously, that's a massive threat. But then on the other, could you argue that the New York Times, as people migrate more towards these platforms, actually suddenly is left out of the conversation, perhaps as well? So I think in this, I don't know, I think forcing them to not delete chats because some of them might have shown people trying to bypass the New York Times paywall, that is ridiculous. That feels like legal ninjutsu. but again if the gray lady's jumping off the top rope and dropping an elbow like i kind of like it from a purely like succession style business war standpoint i like it you're all about that fight ron john you'd love you love the new york times open ai dropping elbows on each other's faces but when musk and trump are fighting whatever i was expecting that musk trump that's easy yeah this is the main event yeah break the popcorn out yeah all right ron john great speaking as always i wish we had two hours this is just a great conversation let's do it again next week see you next week see you next week all right everybody thank you for listening mg siegler will be my special guest wwdc week we'll record right after the event and have that up for you on wednesday also stay tuned maybe we do a solo pod from the event and then ronja and i will be back on Friday to break down the week's news.

1:00:33Thanks for listening, and we'll see you next time on Big Technology Podcast.