Elon Sues OpenAI, Should Sundar Stay?, RIP Apple Car

29:50Now, it doesn't mean to say that Google doesn't have a point of view. Like clearly they do, right? They didn't like apologize wholesale for what their Gemini thing was doing just for the instances where, you know, they should have not drawn people in diverse settings. But I don't think that's holding back the product, honestly. I mean, I think every company is doing this. We know that AI has biased if left alone, like trying to counteract that as industry standard. Yep. No, I agree. So we'll see. I mean, I'll tell you this, this much. I've never heard more chatter about a CEO's job. And I've been contributing regularly to CNBC since 2020.

30:27So almost four years, I had never been asked about a big tech CEO's job or any CEO's job until I was asked about it on Monday regarding Sundar Pichai. So we'll see. It's one of those things where like, I could definitely see them continue to have patience and continue to work on this. But also like, I wouldn't be stunned if one day we like wake up and and he's out and like Larry Page is back, for instance, as an interim CEO. Okay, that could be the move. That would be the logical move, I think. It would have to be at that scale and that you can see everyone getting behind something like that and supporting it if he's ready for the challenge.

31:05So speaking of Google, it's very interesting the directions that they're taking this stuff, right? So there was another story this week in Ad Week talking about how Google's paying publisher to test an unreleased generative AI platform. And I'll just summarize. Basically, it's a platform that helps publishers aggregate other stories or aggregate other information and turn it into new stories. And Google is paying these publishers like five figures a year to test it. And to me, like this was even more damning than the Gemini thing, because I'm just like, is this really like the web that you wanna build if you're Google?

31:40Just filling it with websites where publishers use generative AI tools to build crappy stories based off of other publications' work. That, to me, seemed kind of crazy. Well, this was really interesting to me because the whole what is the future of the web is a discussion that I think, or I've thought about it a lot, around what does an article look like? What kind of information should live in a web page format that's just going to get ingested into an LLM and then present it on a Perplexity or a Gemini or a ChatGPT. And I think it's going to fundamentally change the web. And I think it should because I think SEO-driven writing, web pages, publishing has ruined the web in a way.

32:27And I think we all know the recipe sites with the incredibly long intros is kind of the poster child of this or just incredibly spammy sites overall. So I think that conversation around how is the web going to change with generative AI is an important one. But Google, of all companies, it shocks me that they're going to do it because they are the ones who built that web, created the incentives that built that web, and are the ones with the most to lose if the web does fundamentally change. So on one side, maybe this is another sign of siloed organizational initiatives where some random journalistic focused group within Google launched this.

33:09Or maybe the bull case for it is they recognize that the web is changing. So they're going to drive that change, even though it's going to fundamentally disrupt their own monopolistic business. Do you give them that courage, Alex? That's interesting. Or maybe they're like, yeah, this is going to happen anyway. Let's help steer it and make sure that it happens in a way that's... No, but do you think they're actually playing that game, which is a courageous one. And we've talked about which are the companies that kind of drive their own disruption in order to get to where things are going. Do you think Google's going to do it?

33:46No, I don't think so. I just don't think they have enough foresight there or guts. yeah i agree on that one too a lot of agreement when it comes to google but apple though oh you want to go into apple car are we going to debate this apple car i think we got to go into apple car this is big news here oh we also have that that uh microsoft tried to sell bing to apple okay let's do the apple car and then maybe we'll come back to this bing story um So the Apple car is dead. Rest in peace, Apple car. You are a disaster. Many, many years of development within Apple. $10 billion of investment, according to reports.

34:29It seems like dozens, but it's definitely multiple executives driving the division. The entire idea for Apple building the Apple car was the company is great at matching world-class hardware and world-class software. Like the phone is like the essential example of that. The iPhone, you have the world-class phone, and then you have the world-class operating system. They work so well together, and that's why it's like the leading phone in the world. With a car, it's the same thing. Car is hardware, and then inside the car is going to be software, whether that's the dash and all the controls that you have or the autonomous driving software.

35:02and Apple believed that it was able to match these two perfectly and it was going to work. And so this is like the big question. So obviously it fell apart. And this is like the big debate that's happened this week. Is it a good thing that Apple gave up on this project and decided to focus on other things, aka generative AI, or is it an indictment of the company's culture? And I'll just go, I'll just share my perspective quickly. I've reported on this. I think it's an indictment of the company's culture. They just could not get the people together to build this product and do it in a way that worked within Apple's very siloed culture and design-led culture.

35:41And I'll just give one example and then I'll turn it over to you, Ranjan. Okay. What this company did was they took sensors and they buried it in the car, right? Because the car would look better if those sensors were deeper in as opposed to like the typical, you know, self-driving car, which looks like, you know, a submarine with all those big sensors on top. The car looked great, but the sensors didn't work because the field of view was limited because they were inside the car and they just couldn't get the data they needed to do self-driving. This is seriously someone who worked on this project told me this when I was reporting out always day one.

36:16So I'm curious, so to me, it's definitely a culture thing and a broader sign of Apple's inability to really get into new product areas. And this is huge because automotive, if you think about where you grow as a$3 trillion company that makes hardware and software products together, automotive is a natural fit. And now that door is closed off on it. So I think this is a very damning end to a very damning chapter of Apple and sort of caps what the company can be in the future. So I disagree. That is an indictment on their culture. I actually think it's almost a testament to the fact that they're willing to cut it now.

36:52They've seen where the market's going. electric vehicles overall are not going to be a high margin product the competition from you know byd especially even the value of the average tesla has decreased 50 in the last year like evs originally were more of a premium luxury product and now they're not could apple do that like with their own car they certainly could but is it worth them doing that and how big would that market be Again, everyone in the world, not in the world, but a large percentage of people in the world will be willing to pay$800, then$1 ,000, then$1 ,200, then$1 ,400 for a phone.

37:30The amount of people that will pay$100 ,000,$125 ,000,$150 ,000 for a car, it's a lot more limited. Another thing I thought that was interesting was the idea that Apple, within these R &D efforts, still has built a lot of technology that will be used in other ways. Even for the Vision Pro, I'd read that a lot of the way Apple was thinking about the windshield of the car translated into the Vision Pro. So you saw that there are secondary benefits. And then also from a software perspective, I mean, I use Apple CarPlay and it's far superior to any other thing I've ever seen in any kind of car. Like they're in the majority of vehicles or not majority, a large number of vehicles right now.

38:16Their software is ubiquitous in cars already. So why build your own car? And then the last point that I thought was interesting was gross margin, Apple's at an all-time high gross profit margin at 45%. You are not going to achieve that with electric cars unless you're selling at such an expensive level that the total addressable market is tiny. So Apple, if they're to release this, almost by definition would have to reduce their high profit margins. So at every level, it made sense, I think, to actually not continue chasing this. And there are a lot of companies that might have kept going, but they stopped.

38:56So I think that this is revisionist history, because if you think about the way that Apple, I mean, if you think about what you just said, all of this is logical after the fact. But the fact is the company spent$10 billion and couldn't do it. And I think, yes, can we applaud the fact that it realized it couldn't do it and decided to stop for sure? But isn't it a problem that it couldn't do it? No, they could do it. They could have released a car. That's going back to I think the testament to their culture is they didn't release a car. Exactly. They could have released something that was not Apple, that was not living up to the standards.

39:33That's what I'm saying, though. They couldn't make the Apple car. Yeah. And maybe it can't be done in the context or it shouldn't. Not that it can't be done, that it shouldn't be done, given all the constraints I'd mentioned earlier. Profit margin, competition, technological limitations. I think the fact that they did not release some half-baked car that did not live up to the standards that they try to put throughout all their products, Siri aside, I think it's a good sign that they're still operating in a somewhat disciplined way. But my point is, why couldn't they make that product that they aspire to?

40:11It's not that it was physically impossible. It's that they struggled to do it. I mean, I think, okay, the question of the design limitations and the mistakes around how sensors can work and whether it would fit into their aesthetic, I actually don't think that's necessarily a bad thing to be so driven by their aesthetic because that's what's made the rest of their products so successful. It's at the core of what they do and their entire offering and brand. So to sacrifice on the aesthetic to make the sensors work, maybe they shouldn't. I don't think that's necessarily the wrong decision there, or it makes them look foolish.

40:47No, that's fair. But let me ask you this as my last follow-up to this, all right? Apple's had, is going to experience revenue declines five of six quarters, right? Like four in a row last year, then they bumped one, but they'll be down this quarter for sure. You know, it seems like a lot of their ancillary products are really struggling to find persistent growth. The phone is doing well, but there's definitely risk there in China in particular. So if you're Apple, don't you need to find the growth somewhere? Wasn't this the place? Well, certainly the Vision Pro is one of the big bets, but I still think there's a lot of opportunity around strengthening the ecosystem.

41:29And then there was reporting that a lot of these employees would be moving over to generative AI. And I genuinely believe if you get Siri just baseline, I know I love bashing on Siri, but I cannot say it enough. My poor wife almost wants to, how much she complains because I refitted our house with HomePods and how bad Siri is. If you just get your generative AI abilities, even at the level of a Google or a Microsoft or whoever else, it superpowers every single device that we're all living in their ecosystem already. So I think there's still a huge opportunity across the entire business with generative AI that they have barely scratched the surface on.

42:16So moving employees over there, at least they're making the right decision. Yeah, I think that is interesting. And it will be, it'll be fascinating if you think about how much Google didn't want the reputational hit for letting generative AI stuff run wild. I I mean, geez, like Apple, who is like the most reputation conscious company in the world, like that is going to be really interesting to see what exactly they do. Oh, but you would actually, I think, made the point to me when we were texting this week on Apple that in terms of reputational risk, electric cars, especially at this stage, especially if you're trying to move into self-driving, have a huge risk because there will be deaths.

42:53And the last company that wants to deal with that is Apple. Okay. Yep. You got me. Because like someone... That was your argument. Well, I just put it in there as a discussion point, but way to turn it on against me. But basically what I said was, I saw a tweet that said, you know, I think at some point Apple is the most reputation conscious company in the world. Them working on a product that kills 40 ,000 people in the US alone every year, doesn't seem like the right mix. Like, could you imagine just, I mean, just for the sake of argument, right? And there's obviously, well, anyway, it's disastrous.

43:27But like an Apple car with like the blood of a pedestrian on it after it like autonomously just murdered someone. Well, thank you for providing me the ammunition against your own argument. I know. I'm not putting my counter arguments in the doc. Nuance is dead on this show. I'm done with it. It's just, it's, yeah, win or lose. That's how it works. Okay, well, I'll take the L on this one. And it is interesting that given this move to gender of AI, that Apple, there was a story that Apple held exploratory talks with Microsoft about acquiring Bing as recently as 2020 and basically said it wasn't good enough.

44:03This is from the Google saying this in the lawsuit that they're having. In each instance, Apple took a hard look at the relative quality of Bing versus Google and concluded that Google was the superior default choice for its Safari users. That is competition. Okay, no, mention the fact that they spent billions of dollars remaining the default. But just imagine what would have happened if Apple would have acquired Bing. Do you think we'd be having a different conversation here? I mean, that serious growth could come out of there if they worked on that, put AI in and made it the default. I wonder, that's an interesting point because I wonder, first of all, would Microsoft have gone after OpenAI as strongly if they didn't see a potential corollary to search because they had already offloaded Bing?

44:50could be an interesting parallel history. It's a fun game. Yeah, in terms of that, I think the world would have been a different one if Apple had bought Bing or Bing would have just been so bad that we stopped using iPhones perhaps and then once it became the default. It would have been great, Pandora. What is a Trojan horse for Google to get Apple to buy Bing and just make Android the winner? That would have been the move. This is what I'm talking about. Trillions of dollars of potential market cap that Sundar could have captured if you would have been able to execute these simple strategies effectively.

45:22Simple strategies. That's it. Why don't we, let's take a break. We have more to talk about, including this top Amazon aggregator, Thrasio, filing for bankruptcy. And then, of course, our fun story of the week, AI, Willy Wonka, and the crackhead experience that people have had out in Glasgow. All right, back right after this. 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.

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46:37This content is not investment advice and trading crypto involves risk. The Gemini credit card may not be used to make gambling-related purchases. What the hell is going on right now? And why is it happening like this? At Wired, we're obsessed with getting to the bottom of those questions on a daily basis. And maybe you are too. I'm Katie Drummond, the Global Editorial Director of Wired. And I'm hosting our new podcast series, The Big Interview. Each week, I'll sit down with some of the most interesting, provocative, and influential people who are shaping our right now. Big interview conversations are fun.

47:13I want a shark that... That eats the internet. That turns it all off. Unfiltered and unafraid. So in a lot of ways, I try to be an antidote to the unimaginable faucet of reactionary content that you see online, to the best of my ability. Every week, we're going to offer you the ultimate luxury of our times. Meaning and context. True or false, you, Brian Johnson, the man sitting across from me, one day, at some point, as of yet undefined in the future, you will die. False. Tell me more. Listen to The Big Interview right now in the same place you find Wired's Uncanny Valley podcast. Subscribe or follow wherever you get your podcasts.

47:55And we're back here on Big Technology Podcast, Friday edition, breaking down the week's news. There was a very interesting bankruptcy filing, Ranjan, that you pointed out, that this top Amazon aggregator, Thrasio, which was this COVID darling, filed for bankruptcy this week. So tell us a little bit about what happened and what the implications are there. Yeah, I feel we need to start naming this as a recurring segment because these are my favorite stories. The stories of the COVID darlings that perfectly captured a story of 2020, 2021, raised a ton of money. and basically week to week, month to month, we see another one of these flame out because we're just hitting that point.

48:34The cash is running out. The debt financing is being unable to be managed. So Thrasio was an Amazon aggregator and the story circa 2020, 2021 was so beautiful. It was the idea that you have all these individual brands, 1 million, 5 million in sales, 10 million in sales on Amazon. So what if you were to just roll them up and then with operational efficiencies and leverage with Amazon, be able to get better deals on marketing and fulfillment and understand how to market products and cross sell them all across the way you operate, that it actually made, in theory, perfect sense. Of course, what happened is Thrasio raised$3.4 billion.

49:16Most of that is debt, not equity. So it might sound like a much higher number, but raised an incredible amount of debt to finance these purchases and just declare bankruptcy, saying that they're going to shave$495 million off of the debt load and creditors are going to actually have to commit some fresh capital,$90 million to keep this thing running at all. Basically, it's yet another, like, you know, you have the Peloton stocks in the world, you have all, you know, all the high flyers from the COVID era. And this is another area, Amazon aggregators and these ideas of portfolio roll-up e-commerce companies being the future that just did not pan out.

49:58So do you think that there's anything that Amazon could have done differently? Like, this seems like it would be effectively good for the Amazon ecosystem. Do you think there's anything Amazon could have done differently to allow these type of businesses to thrive? Or was it simply just another one of the COVID fever dreams that was just destined to fail no matter what? I think it was both a COVID fever dream, but also I agree that I think Amazon itself has made decisions around, especially over the past number of years, to move more towards third-party Chinese suppliers that are selling cheaper products.

50:33And anyone who's shopped on Amazon knows like moving away from general quality towards just what can I buy quickly and cheaply has become more of the core offering. And that's why the Sheeans and Timus of the world, in addition to COVID era fever dream from a financing perspective, now you have on the lower end, incredible amounts of competition that weren't there four years ago. So I think at every level, this model, it should have been good for Amazon. It should have been good for the company. Again, in theory, in a business school case study, you can easily see how you could argue that let's roll these up, finance it properly, get marketing efficiencies, get logistics efficiencies, but it didn't work.

51:17And I think we'll see more of these still coming along the way. I think Hopin, the events company, recently declared bankruptcy. I don't know if Clubhouse is still around, but I always love these because it brings me back to those, the crazy days of these stories and just watching pure mania take place. I mean, one big picture question for you is how did so many companies and smart people get taken during these COVID moments? Like, obviously, we were not going to be on Zoom forever. We were not going to be Pelotoning forever. But yet there was such and this Thrasio example is another example of it, right?

51:56Like there was there was such enthusiasm for people putting money on within companies, effectively with the belief that COVID era conditions were going to last forever. I think, but I don't, it's a tough one because on one side you can argue how are smart people taken, but on the other, it was at the moment still the rationally correct thing to do. And a lot of people made a lot of money and to do something different limited the amount of potential gains you would have. So I think it actually was economically rational at the moment. And especially, I think that's why even more so, you have all the stories of people who did take money out in secondary sales smartly at the time to the loss of the majority of investors.

52:43But I think it's tough to say taken. I think it made sense if you were just looking at a quick flip. Obviously, building a long-term business is a whole other thing, but it certainly made economic sense. Right. And now it's just like, now it's the hangover. Yep. And it's going to continue. And I'm sure we're going to have more of these stories along the way, just to remind us of those days we were on Clubhouse. Yes. I'm glad that's over for multiple reasons. So speaking of hangovers, a lot of kids in Scotland are hungover from all the candy they ate at this absurd, almost AI-generated Willy Wonka festival.

53:25so it was an experiential thing and um the reason why i think so just to set the stage there was this willy wonka uh exhibition in scotland where you could take your kids effectively and walk over the chocolate river and go through chocolate rainbows and get a chance to meet willy wonka himself and it once you got in it was true fire festival level stuff it had you know print outs of backgrounds that you were supposed to take a picture with along the wall black curtains everywhere. The scripts were terrible. And it even came up with this actor that seemed like it was completely AI generated called the unknown, which was effectively this guy in a black parka and mask who would peer out from behind a window and like scare kids.

54:13And like, there's this great scene on TikTok where Willy Wonka says, and now the unknown, and the unknown comes out and goes, and you hear all these kids go no

54:26I think this is okay the question this is a topic that's going to come up over and over again in the next year few years because AI has become so accessible there's going to be so much bad content that is created and I still am a firm believer that AI is a tool And you can either, if you create bad content, it's not that the AI is bad, it's you're using AI badly. And I think this was a perfect case. If you even look, the invitation images on the event are the most, like when we talk about AI does hands badly, eight fingers. Willy Wonka's eyes are kind of curved in weird ways. It's the most odd looking, dystopian, clearly AI generated thing.

55:18And this is like the AI using AI badly come to life. You can argue Gemini woke Gemini was Google executing on generative AI badly. This was just using AI badly and these poor kids having to go to this. Though maybe maybe they actually enjoyed it in the end because it was just so ridiculous. Yes. So there's there are amazing things that that came out of this. So first of all, the actor spoke to the Hollywood Reporter. Willy Wonka actor at Glasgow Fiasco speaks out. The script was AI gibberish. And Willy Wonka actors of a UK immersive experience says the script was 15 pages of AI generated gibberish.

56:02And there wasn't even any chocolate at the event described into chaos. Okay, he goes, the bit that got me was where I had to say, this is the man. We don't know his name. We know him as the unknown. The unknown is an evil chocolate maker who lives in the walls. It was terrifying for the kids. Is he an evil man who makes chocolate or is the chocolate itself evil? Okay. The thing that's come out of this is, let's see, Rolling Stone has made a, has written an article in support of the unknown. So it goes, justice for the unknown, the Roald Dahl character that wasn't. and they say that the unknown is a fascinating extraction of Dalian horror by a piece of software trying to process his writing.

56:49So effectively, here I'll just read it. Dal had a knack for malevolent presences. No doubt he would have written a creature more richly imagined and logically consistent than the unknown had he ever suffered the indignity of translating Wonka's chocolate factory into a pop-up theme park. Still, an AI had to generate a new interactive scenario based on existing Wonka lore, complete with a threatening element for drama, and there's something to be said for its crummy solution, the ghost in the machine. It's a doomed attempt to grasp Dahl's darkest impulses, an abject failure of imitative art, and all the funnier for those very reasons.

57:27It ties the whole occasion together. You've got to hand it to the unknown. The concept sticks with you. I mean, I like that, right? It's kind of like the AI has processed dolls riding decided to make a theme park and basically hallucinated a character that kind of makes sense in dolls universe so after some long consideration i'm on team unknown i think i'm pro t pro unknown as well on team unknown i saw him and it's so ridiculous when he pops out and kids are just kind of looking at him it is kind of amazing but but in terms of rolling stone had another piece this is one i thought was really interesting so the guy who organizes this who organize this event.

58:05This is not his first run-in with Jenner to Bayai. He actually has an Amazon page where he has 16 books published, and many of them were published on the same day. And the journalists had gone in and looked at some of them, and they're just, again, clearly bad Jenner to Bayai. So using Jenner to Bayai to spout out bad content, first he did it with books, sold them on Amazon. And of course, there's a lot of vaccine conspiracy QAnani type stuff, themes running throughout all these books. And, you know, this is a new type of huckster in today's market right now. And it'll be interesting to see. This is far from pig butchering, I would say, in terms of like new age scams, but these are going to increase in frequency, I'm sure.

58:57yeah it is fascinating i mean it's basically like you could effectively go to chat gpt and say spit out a monka theme park where do i put everything you know use your multimodal ai to draw me a diagram of what should happen and then write me scripts and it could do it the next thing you know you have the unknown so who says go ahead sir did you see uh a kara swisher released her book And then there's been a flood of Kara Swisher biographies that are AI generated on Amazon. So basically, big author releases a new book, and then people start creating generative AI-driven biographies or something related to that search, knowing people will be going for that search just to confuse them and try to sell a similar book.

59:43There's going to be a flood of this stuff now. Yeah, it's crazy. And to me, I'm just like, wow, a tech autobiography generates enough interest that people are like going and putting ChatGPT driven copies on there. God, we are covering the right industry. Yeah, exactly. People make big technology fake podcasts soon. Oh, that exists. There is a fake one. Seriously. No, this is the real one for those listening. This is the real one. But there is a fake big technology podcast out there. Wait, really? For real. Yeah. But I think, I don't know, I think it's kind of leveled off or something, but it happens all the time.

1:00:21People will rip off content and stuff like that. Yeah, this is definitely, it's ego boost for me every time I see it. I'm like, you're doing something right, man, doing something right. Well, in praise of the unknown and different things that AI generates that may haunt us or scare us, but also might delight us, I want to say thanks, everybody, for listening. It's been a great week spending time with you as always. Thank you for being here, Ronjan, and thanks to all you, the listeners. Have a good weekend. Have a good weekend, everybody. Oh, on Wednesday, Ryan Peterson, the CEO of Flexport, is going to come on to talk a little bit about, speaking of competition with Amazon, whether his logistics company and Shopify are competing with Amazon, and an update on how the Houthis are changing the supply chain.

1:01:05It might be worth tuning in until we'll see you there on Wednesday. Otherwise, Ronda and I will be back on Friday for another show breaking down the news. And we'll see you next time on Big Technology Podcast.

1:01:20What the hell is going on right now? And why is it happening like this? At Wired, we're obsessed with getting to the bottom of those questions on a daily basis. And maybe you are too. I'm Katie Drummond, the Global Editorial Director of Wired. And I'm hosting our new podcast series, The Big Interview. Each week, I'll sit down with some of the most interesting, provocative, and influential people who are shaping our right now. Big interview conversations are fun. I want a shark that... That eats the internet. That turns it all off. Unfiltered and unafraid. So in a lot of ways, I try to be an antidote to the unimaginable faucet of reactionary content that you see online, to the best of my ability.

1:02:02Every week, we're going to offer you the ultimate luxury of our times. Meaning and context. True or false, you, Brian Johnson, the man sitting across from me, one day, at some point, as of yet undefined in the future, you will die. False. Tell me more. Listen to The Big Interview right now in the same place you find Wired's Uncanny Valley podcast. Subscribe or follow wherever you get your podcasts.