DeepSeek Rises, Stargate Drama, OpenAI’s Operator Debuts

26:15They asked him if they have the money. He says, well, I don't know if they do, but you know, they're putting up the money. The government's not putting up anything. They're putting up the money. They're very rich people. So I hope they do. It's like, OK, so they don't have the money. So Elon is right on that. And even if, I mean, let's say they do get there, right? The question here is going to be, is this the right way to train, given what we just learned about DeepSeek? bringing it back to DeepSeek. This is from venture capitalist Jeremy Liu. If training costs for the new DeepSeek model are even close to correct, it feels like Stargate might be getting ready to fight the last war, like bringing an M1 Abrams MBT to a drone fight.

26:57No, I loved that. Yeah. The timing was almost comical, but still impeccable that this is the moment. And obviously in the Trump context, you don't want to say we have a faster, cheaper, kind of like more low key way of doing things. It has to be big and audacious. And that number 500 billion, it really falls into the, tell me a big number. What's the big number, biggest number you want to think of? 500, let's call it that. But here's the thing, like we are going to see much more capital put toward a new model, right? Or new model development. Maybe it's not a hundred billion from OpenAI, but it's going to be billions, billions of dollars.

27:39Like even 10 billion is double their most recent fundraising round. Then you have Elon Musk, who's going to build this million GPU super cluster. And by the way, hot breaking news right off the press here. Mark Zuckerberg posted this morning. Meta is going to build a two gigawatt plus data center that is so large it would cover a significant part of Manhattan. We'll bring along about one gigawatt of compute in 2025 and will end the year with 1.3 million GPUs. We're planning to invest 60 billion to 65 billion in CapEx this year. We're also growing our AI team significantly and we'll have the capital to continue to invest in years ahead.

28:15This is a massive effort and over the coming years, it will drive our core products and business, unlock historic innovation and extend American technology leadership. Let's go build. I do love how everybody has a note to Trump in their press releases right now. Look, here's the bottom line for me. You have these three research houses, at least, that are building these massive, massive data centers to train the biggest models known to man. And we're going to find out the truth about this scaling hypothesis, whether you can build an AGI just by scaling up. And I don't know, you might be saying, like, let's go build the products.

28:51To me, it's exciting that this is actually something that they're testing? For me, the exciting part is the shade that's being thrown left and right, just as an observer. So my favorite part of the post was, and we have the capital to continue investing in the years ahead, and we have the capital. Definitely, you know, a nice little nudge to the Stargate project. Satya Nadella, in an amazing interview this week, was talking about how Microsoft is going to, you know, and he's like, okay, that's all nice. We're investing $80 billion in CapEx, in infrastructure build this year, and I'm good for my$80 billion.

29:30So, I mean, Satya and Mark going on strong. Why does everybody hate Sam? Even Dario Amode, Amode from Anthropic was taking shots at him this week, you know, kind of in a veiled way, calling him a hype man. I mean, because I think the secret of open AI success over the last few years has been delivering very good consumer products and moving fast, but also very, very, they are more heavily invested in the marketing and hype side of this. And that's how they raise money. And it's been a critical part of them maintaining some level of leadership in this. But the hype and the marketing are a core part of the OpenAI story.

30:13And in reality, like the anthropologists of the world get to ride the coattails of that a bit. So maybe they should be more thankful to Sam on this. But I mean, you figure the Zuckerbergs and Nadellas of the world are like, OK, I'm running my trillion dollar company here that's actually, you know, delivering scaled revenue at unimaginable lengths and profits. And they just look at it and they're like, all right, buddy, come on. I'm telling you, man, Anthropic is the one I'm most worried about this year. It has it seems like the least amount of money on hand of the big ones. It's not developing, as far as we know, one of these massive data centers.

30:50Claude is like you mentioned number 18 in chatbot arena getting surpassed by deep seek in a crazy way. And it doesn't even connect to the internet right now. But Claude is good. Claude is good. It's my favorite of all the products. So they can't discount. Claude is good. Other than their rate limits that sometimes I'll be deep into some kind of coding or other analytical project on Claude. And then I hit the rate limit and have to wait a number of hours even as a paying customer. But fix that one, Claude. Come on. But other than that, Claude's a good product. So I think it's obviously their marketing has actually been pretty bad.

31:26They had these kind of comically ridiculous billboards that they tried to push around. And actually, I guess it's a great product for people who know about it. But I would agree that in terms of being in trouble, ChatGPT is obviously the kind of household Kleenex Xerox brand name in the space. 300 million users. Most of my normie friends don't even know what Claude is. And are they going to be able to overcome that? I don't know. Yeah. All right. One more wrinkle in this Stargate project, and then we'll move on to OpenAI's operator. And that is, and, you know, if you're calling this fake news, maybe I'll take that, take the bone that you're throwing there and say, if it's fake news, why would it be fake news?

32:11Like, what would it be in service of? And maybe it is some marketing spin on OpenAI and Microsoft divorcing a little bit on the compute side. So the one thing that happened after this was that we found out that Microsoft and OpenAI, which have been linked together from the very beginning, well, maybe not the very beginning, but linked together very, very strongly for the past few years and something that's benefited both of them, they're changing the way that their compute arrangement is. So Microsoft and OpenAI announced Tuesday they've adjusted their partnership so that OpenAI can access competitors compute.

32:46This is from The Verge. The new agreement includes changes to the exclusivity on new capacity, moving to a model where Microsoft has the right of first refusal. And then to further support OpenAI, Microsoft has approved OpenAI's ability to build additional capacity, primarily for research and training of models. So Microsoft still has this proprietary ability to sell OpenAI as models through Azure, but OpenAI no longer has to go through Microsoft for compute. And that's what this new project is going to do. And this has been something that's been bothering OpenAI for a long time. It's part of the tension between them and Microsoft.

33:20And maybe you sort of dress it up as Project Stargate. And then all of a sudden, everybody's happy and you hope that people don't notice. What do you think about that hypothesis? Yeah, I think that's actually everything about Stargate were things that were already in the work. Even Oracle was building a massive data center. And I think it's like Abilene, Texas, that now OpenAI is going to have an exclusive relationship with as part of Stargate. But they were already working on that. Apparently, the information had reported that Elon Musk was offered access to it, but had turned it down. So now it was open.

33:56So Larry Ellison saw the opportunity to move in this direction. And then even there's reporting that within Microsoft, there's increasing skepticism around generative AI in general and specifically open AI based on the negative reactions and rollouts for co-pilot. So suddenly within Microsoft, they still see the long-term value, but the idea that open AI is so magical that that's going to be a critical part of the success. And maybe they realize the product's more important than the model, that they start to – I'm going to get a T-shirt with that – that they start to realize, like, okay, we don't need open AI, in fact, at all, that we've already been moving away from them.

34:36And financially, the potential of any kind of great return from them is dwindling. So why not let it go? Yeah. Okay. Product more important than the model. Well, here we go. We've been talking about agents and assistants and computer use for forever. And OpenAI just released what is probably the best computer use model that exists today. So this is, again, from The Verge. OpenAI unveils AI agent that can use website on its own. On Thursday, OpenAI unveiled a tool called Operator that can go out onto the internet and perform tasks autonomously, like shopping for groceries or booking a restaurant reservation.

35:16It can navigate websites and take actions on websites, much like you and I do, said OpenAI product and engineering lead Yash Kumar. Artificial intelligence researchers call this kind of technology the AI agents. And this is some examples that Kumar showed. booking a San Francisco restaurant reservation using OpenTable and then also buying a list of groceries through Instacart in the debut video they showed. They showed the thing going through, basically looking at a paper grocery list and then going out and buying the groceries. And then I also found this really fun one from this guy, Peter Willinder, who's from Sweden, and he says he likes saunas and he has operator go through TripAdvisor and then basically search through all the hotels in Stockholm and try to find the best hotel sauna.

36:10And you just see the thing going through the websites and, you know, searching the dates and searching the hotels and then searching for the sauna and the reviews and then coming to a conclusion. And this is usually something that would take a human a lot of time to do and maybe AI can do it for us. Real product news, Ranjan, your reaction. Real product news and I'm actually genuinely excited because when Claude or Anthropic had released their take over your computer product I think it was very limited in terms of ability to use and very buggy people found. OpenAI from at least the demos I've seen looks pretty slick, looks pretty interesting.

36:50But I actually think the problem with this rollout, they need to do, say, agents. They need to say agentic. That's just part of 2025. If you want to compete, you got to say agents. But the use cases in this, I just don't see what is going to actually achieve any consumer level scale with kind of computer takeover workflows and processes. Because again, everyone is showing, okay, I can find and maybe make an open table reservation or buy. I saw one demo where someone, you know, find me a leather jacket of my size that can arrive in two days. And it technically worked. I don't see anyone changing their behavior to actually allow an agent to do this for your own personal life.

37:40And I think like the companies that are actually what they need to be focusing on, again, this is something where I think agentic wins in the enterprise, not in consumer. Well, to further that point, first of all, I thought you'd be more excited. But true to your intellectual honesty, you're calling it as it is. And to further that point, Casey Newton of Platformer paid the 200 bucks to upgrade to Pro and played around with Operator. And he did two things. He tried to get it to create a list of walking tours in London for him, which had canvassed the web and found, and then also a curriculum teaching the Great Gatsby, which had been something that the professor Ethan Mollick from Worden, who's been on the show before, I guess both of those folks are friends of the show.

38:25He's done that before and used that as a benchmark. And it was able to do it sufficiently well. But then here's the crazy thing. Casey just asked ChatGPT the same questions that it had the operator do. And without having to do the fancy, like, go through the whole internet, it produced better answers faster. So is this a farce? Yeah, I think the interesting part of this should be that last mile of actually booking the walking tour. Like the research side of an agent is not that interesting. It's the can you actually enter my credit card data and actually click buy, which is pretty amazing. And it should be able to do that.

39:06But again, from a consumer standpoint, the average person is so far away from letting an autonomous agent to actually spend your money or do things or make decisions around your time. So I think that's one of the most important parts. I think like when Apple intelligence, we're going to be discussing like their view of agentic, at least as they presented it, is more real for regular people around find my flight time, book me an Uber to get me to the airport in time and make that all one action. If it actually worked, that would be amazing. But I think like computer takeover agentic AI for the average person is just so far, like thinking about what would I use it for, trusting it to use it for that and having it more necessary than, as you said, just a traditional LLM search or query.

39:59I think we're just so far away from that. But I do like, I'm glad And OpenAI makes great products that actually work pretty well. So I'm glad they're still pushing this forward. Yeah, I thought, should I pay? Because right now it's only available to these pro users. You pay$200 a month, you get OpenAI's ChatGPT Unlimited, and you could also get this operator. And I said, should I pay this$200? And maybe I should, you know, for the love of the game, since I am a reporter covering this stuff. But I just thought, nah, not right now. I mean, I do think, I will recognize, it is a big deal. Like if you start rolling out this ability, maybe we'll start to get the genuinely creative, potentially repeatable actions that really, and again, not research, where you actually take action on different websites and define those actions.

40:50I think it's going to start to get pretty interesting. But a lot of this, again, you could do with a script. Right. You could do it with a script and it's basically creating that script-like behavior for you, which is cool and which empowers people who cannot code scripts. And that's a good thing. And the people will ideally start coming up with creative use cases. But I think they should actually put it as part of ChatGPT +, guys. And I'll play with it. Maybe I'll be impressed. From the demos, it did not look that exciting. Maybe DeepSeek comes up with their own operator model, then OpenAlias.

41:28Would you let DeepSeek take over your computer? No, of course not. That's actually one thing. I mean, just on that, because there were some very, on DeepSeek, going back to DeepSeek, like very egregious demonstrations of censorship around sensitive topics in China that were very clearly baked into the model. And it is interesting because like on one hand, we are talking about how this could be completely revolutionary. But on the other, there's a lot of I think on the trust side, on the security side, there's still going to be some questions. No doubt. Again, taking over, letting even open AI take over your computer.

42:08I feel behaviorally, the average person is so far away from trusting this stuff. Yeah, I totally agree. and it's something that I've been talking about on the show with everybody who's come on, whether it's Demis this past week or Eugenia from Replica the week before, there's going to be a real reticence to let computers take over. And even still to trust AI. 60 % of people don't really trust AI. We're in a little bubble where we're like, okay, yeah, we trust this to a certain extent. But most people are like, screw that. I'm not touching that stuff. I guess you just did mention the CEO of Replica.

42:43You know what? Maybe people won't trust a computer to actually browse the web for them, but they will trust an AI to be their lifelong companion and love interest and romantic partner. So that's where people are right now. It's all fun and game until your AI lover asks for your credit card. Yeah. I'll have an AI lover, but I will not give them my credit card info. Yeah, that's what you say right now. But just wait until that relationship progresses. And next thing you know, you're buying a digital clothing and you're broke. That will happen. And the New York Times will do like a 6 ,000 word reflective deep piece with large photographs of someone walking along and looking forlorn.

43:26He fell in love with an AI. She took his money. But she spent his money on a shopping spree, in a Gentix shopping spree. Oh, my God. It's great business if you could run it. But OK, so so, you know, you hinted at Apple earlier and the current state of Apple intelligence is that, like, I don't know, I saw Genmoji ship, which is kind of interesting, where you can like prompt and get your own emoji or maybe it shipped just in the test version that I'm using. But but by and large, Apple intelligence, you know, speaking of AI product and AI product for consumer, it's not working. It's not working now.

44:04And who knows if it will work in the future? and it's nothing close to the presentation that the company showed at WWDC last year. And as a result, analysts are starting to say, hmm, we don't want to own this stock. So this is from Yahoo Finance. Apple stock hit with downgrades, two downgrades on weak iPhone sales and AI outlook. So Jeffrey's analyst, Edison Lee, downgraded the investment bank's rating on Apple stock to underperform and decreased his price target by 13 % to 275. On Monday, Loop Capital also downgraded Apple stock from buy to hold and revised its price target to 230, down from 275.

44:46They believe that iPhone sales in China are going to fall between 15 % and 20 % year over year in the fourth quarter. By the way, Apple earnings coming up next week. There's also been other downgrades. Moffitt Nathanson downgraded a couple of weeks ago. And then everybody believes that Apple intelligence is so underwhelming and has not driven a super cycle or any sort of cycle really around the iPhone 16 and are doubtful we'll do it over the next devices. And this is something we kind of previewed when we said, hey, we think Apple intelligence kind of sucks and it's going to lead to some bad sales numbers and here it is.

45:21So is it victory lap time, Ronjan? I'm going to take a moment here as I have to try to start to explain how bad Apple intelligence is. And for newer listeners, I've had a long time hate-hate relationship with Siri. And I say this as someone who has HomePods across their house, AirPods in my ears, an iPhone, a MacBook. So I'm still heavily locked into the ecosystem. But all I want is Apple to just deliver basic level generative AI in their products. Apple intelligence now, I've been using it. I mean, it's been on my phone for a number of weeks now. And it misses at every single level. The more I've been thinking about it, the notification summaries are so useless.

46:17like they the way they will group in different notifications if you get multiple ones from the same app and it will try to summarize it it actually it makes it more difficult than reading for notifications because there's the in terms of how they present the information even I was thinking about a Genmoji I played with it was kind of fun the UI side of it is very nice like actually probably the only thing that's cool is now when you ask for Siri your phone lights up around the borders of the entire screen in kind of a pretty way. But I was thinking about it. It's the most tone deaf thing because the whole value of emojis are that it's kind of like a shared language.

47:02It's kind of a common thing where the emoji connotes something specific and we all have that shared understanding. So from a language standpoint, no one wants to create new emoji. I'm very curious about the utilization of it, but that misses the point. Siri working and with ChatGPT is okay, but it's so much worse than ChatGPT voice or Gemini voice or any actual other voice mode assistant for any generative AI product. So it's genuinely shocking to me. Like a friend of mine was trying to pitch, you know, Apple should buy perplexity. And I genuinely don't, I hope they don't, because I think they would ruin it in integrating it into the overall product and ecosystem.

47:48I don't, what do you think is happening over there? I've always said it's a cultural thing and they just aren't set up for, to culturally build AI. They're too secretive. Their product groups don't work with each other. You need that and you need to be risk-taking a little bit. and Apple is none of those. And therefore, I don't think it's going to realize this AI vision until it really is kicked in the face and made to. And so we've seen these stock downgrades and obviously Apple cares a lot about its share price and now NVIDIA is the most valuable company in the world again and Apple is not. And maybe something will spark within the company, but I don't think Apple today is going to be able to build an AI product that people are going to believe in.

48:30But do you really think it's cultural how bad it is? And I say that we are both very early adopters of and test out every generative AI offering. Like Gemini voice is really good. Chachi PT voice mode is pretty good. I was actually like a Gemini voice. I've been incredibly impressed. I almost want to get an Android just so I can interact with it rather than Siri. I still am so locked into Apple that I have not yet. But the fact that I'm thinking about that is something that is very different than anything over the last decade. Like, do you think they can actually even let's say we see a bunch of downgrades, stock drops 15 percent.

49:15Do you think they shake things up and are able to actually deliver something just on par with what's already out there? No, I think they're more likely to just give up on AI. That's my perspective. Just no more. I mean, maybe you can use ChatGPT on an iPhone. So it's not it's going to be a problem for them. they're going to need the thing there here's the real issue is that so many iphones are just kind of the same like i have the iphone 15 um you could tell me today alex you actually have the iphone 14 or you have the iphone 16 and i would believe you or you got the iphone 13 i would be like all right yeah that sounds about right because there's not much difference and the phones you can hold on to for three four years so like those those upgrade cycles are going to get more spaced out and there's no real draw to bring people in.

50:06So I think that like, it's less of a, like people are going to switch to Android thing and more of a, like the upgrades are going to come in much slower. Now people are still going to be using iPhone. So they're going to be able to buy their services and they'll come in and they'll get the Mac books every now and again. But ultimately I don't think that they have what it takes to deliver AI and I could be wrong and I'll admit it if I'm wrong, but so far I've been right. You can read it. It's in, it's in my book. I've always wanted to say that. But really in the Apple chapter, I specify why they're going to have a hard time with AI and it's all playing out.

50:38Okay. I think, I guess I almost would bet that they will win smart glasses as a category if they launch a product or like that's the area I could actually see them having more success in building or like launching like a genuinely revolutionary new product. But yeah, I think I agree. You don't leave the Apple ecosystem. You just don't buy the new iPhone. I actually think that would be a power move though. If they just said, you know what? No more Apple intelligence. We're not baking in any AI like at the device level, use all the other apps. That's great, but we're over it. Yeah. They're going to make, I would almost, and we're going to, we're going to launch some good new devices.

51:20Yeah. Siri will suck and you will like it. I mean, that's going to be their new motto. Did you know your credit card points and miles can lose value to inflation? Credit card companies often reduce the redemption value of your points and miles. Now, imagine a credit card with rewards that can grow in value. With the Gemini credit card, you can earn Bitcoin or one of over 50 other cryptos instantly with no annual fee. Every swipe at the store or gas pump earns you instant rewards deposited straight to your account. Plus, sign up now for a$200 Bitcoin bonus to kickstart your rewards. Visit Gemini.com slash card today.

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52:31You'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 Beeler. And I'm Marco Werman. We're now with you hosting The World Together. More global journalism with a fresh new sound. Listen to The World on your local public radio station and wherever you find your podcasts.

52:58okay we before we go we should really talk just for a couple minutes about what happened with tiktok because at last week's episode i said i would be stunned if we got to this week's episode and tiktok was gone and tiktok is indeed still standing uh however i don't think you can find it in the app store. And every company that has TikTok is supporting TikTok, the Oracles and the Akamai's of the world. They risk fines, daily fines, and could potentially really go into lots of money and millions or billions of dollars over time for keeping this thing running, despite the fact that Trump has, quote unquote, saved the app with an executive order.

53:38Just very quickly, what's your perspective on what happens to TikTok from here? You know what? It's Friday, January 24th. This has been such a heavy week of news that I almost forgot that whole TikTok ban thing happened on Sunday, I believe, late Saturday night, where everyone got a message saying TikTok is shut down and President Trump hopefully will save us. And then you got a message, I think, eight hours later, President Trump says save the app, which was just the wildest thing imaginable. Like I like that happened. That happened. Some girl lit a congressperson allegedly lit a congressperson's office on fire in that 12, 12 hours.

54:22She was mad about TikTok. I like it was interesting. I was asking a bunch of younger folks who are deep into TikTok. And it was interesting because a lot of people's reactions was genuinely like, do they really think we're this stupid? And yes, yes, I do think the executive leadership team at TikTok does. But yeah, in terms of what's going to happen going forward, this one is going to remain one of the most wildly unpredictable things and very excited to watch what happens. Because again, finding an American buyer and divesting TikTok from ByteDance was always the necessary request. Now we still have to find one.

55:10And it's always been questionable about who is going to buy at what valuation, because let's say we find people willing to buy still negotiating because it's still at a very, very high lofty valuation. People that negotiation is going to be interesting. And then obviously the twist that somehow 50 % of it has to go to the U.S. government, I don't think makes any sense or I just don't quite understand exactly what that part of it means. But this one, I have no idea what's going to happen, but I'm very excited to watch. Ranjan, can I just say that this week I expected us to be talking about the TikTok ban and all the big tech leaders standing behind or sitting behind Trump during the inauguration.

55:56Oh, wait, that was Monday, wasn't it? That was Monday. Whole script has flipped. There's been so much news. Even Stargate, which I thought was going to be the lead story, ended up being pushed down the list of stuff to talk about because of DeepSeek. And then, of course, we got Operator and the Apple downgrades. Fascinating week of news. I appreciate you all for sticking with us and coming back week after week. We break down the news here on Fridays. And Ranjan, thanks so much for coming on the show. Who knows where we'll be in seven days. I'll see you next week. I could deal with a little bit less unpredictability.

56:28But anyway, we will be here next Friday. By any means necessary, we will be here. All right, everybody. Thanks for listening. And we'll see you next time on Big Technology Podcast.