Emails From Elon, AI Revenue Questions, Chatbot Boyfriends

28:06It's going to be on May 15th, Wednesday, May 15th. And this is going to be the first of many. If you can't make this one, then there's going to be, there will be plenty more. So just a heads up that that is coming. Okay. After the break, we're going to talk a little bit about AI revenue and monetization, which I'm very curious to hear Ranjan's thoughts about because he's dropped a bunch of things in our collaborative document and bolded them and clearly has some thoughts about whether we're going to actually make money on generative AI. So that's coming up after the break. Did you know your credit card points and miles can lose value to inflation?

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29:19The Gemini credit card is issued by WebBank. In order to qualify for the$200 crypto intro bonus, you must spend$3 ,000 in your first 90 days. Some exclusions apply to instant rewards in which rewards are deposited when the transaction posts. This content is not investment advice and trading crypto involves risk. The Gemini credit card cannot 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.

29:56And 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. 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.

30:40False. 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. And we're back here on Big Technology Podcast Friday edition with Ranjan Roy back in the saddle, home from India, highlighting things in a document that we have together about whether generative AI is making money. All right, Ranjan, let's hear it. What do you think the story is now that we've seen a round of earnings results from the big tech companies about whether we're going to actually make real money from generative AI, whether they're going to make real money from generative AI, or is this still just a bunch of hype?

31:21I like that Alex recognizes that normally in our shared doc that we plan out the podcast with, it's just text and links. But when I'm bolding something, I'm a bit fired up and curious. Okay, so we've had a big week of tech earnings. And the question is becoming more and more clear, will companies actually make money from all their investing in to generative AI? And I'm talking about Microsoft, Google, Meta, all these companies, you know, what's their strategy? Are they doing this in a really sustainable way? The reason this stuck out more for me is I was at Google Cloud Next, which we talked about now a few weeks, maybe almost a month ago.

32:06And what was fascinating to me is all the presentations, and it was an amazing event, and it actually got me, and I think we'd even scored Sunar at like a 7 out of 10 or something at the time. It got me bullish on Google. I think they're now a very legitimate competitor. But what was most fascinating to me is I was talking to CTOs of banks, and they're talking about literally having like 150 ,000 seat contracts and stuff like that. You're talking to people who have very, very large investments in a lot of workers, and all they talked about was cost. All they cared about was cost and attributable ROI.

32:46And these tools, as most of us understand, are still very much in the exploratory phase. There's certain things that can be operationalized and should, and certain people are further ahead than others, but cost was already because even Gemini, it's only 20 bucks a seat only, but then you multiply that at some large scale. And suddenly this is a genuine investment. Same with Copilot, I think is 25 or 30 bucks and it's an add-on. So all I've been thinking about is like these products as you use them are very, I think they're actually how much better they've gotten in the last six to eight months is actually, it gives me hope that they will actually realize their promise.

33:30But I think we're at that moment that when you're being asked to pay for something, it's a completely different conversation. You even talked, I think, with D-Bosa about whether you're paying for Claude or not. Yeah, now it's a no-brainer, but there was some sort of thought and constant canceling of it. Exactly. So like now it's so worth it that you're not canceling and resubscribing or whatever. You imagine that to the hurdle of getting over a giant contract. So this whole conversation of are people actually paying already is important. And so we already saw some numbers. Microsoft attributed 7 % of its Azure cloud growth to AI.

34:13That's up from 3 % a quarter earlier. That's apparently a billion dollars in sales. Google's saying that they saw increased AI revenue contributions, but not breaking it out. Then you have Mark Zuckerberg, who's saying, you know, they're increasing infrastructure spending on AI by$10 billion, but they're not even pretending that they're going to make any money anytime soon. I actually think that the meta approach might be a better one because I think trying to overly aggressively forecast and attribute revenue directly to AI services is actually going to become a trap for companies like Microsoft and Google because, you know, these products take time.

34:59You with Claude is kind of like a micro case. But even at scale, getting people to pay for these products, genuinely feel they're valuable across people who are not Gen AI early adopters is not going to be a straightforward thing. And the worst thing I think that could actually happen is too aggressively these companies push their sales team to push these products. They get across the finish line and get the first contract signed. And then there's a huge backlash because it's not doing everything you promised it would do. That there's a demo that looked amazing that's not ready yet. So I think Meta might be taking the better approach here by just outwardly saying, you know what?

35:42We're investing a ton of money and we're not going to see revenue right away. And that's okay with us. Do you think there's going to be then a hangover for these companies? Yeah, I do. And I think it's going to happen. I mean, when you think about the dynamics of it, it's hard to think of the time frame. But because these contracts will happen in, you know, one, let's say it's a six month proof of concept or one year lock up, like the time frame on these types of contracts is still on the longer side. But I still think if they get these signed and start collecting money from large clients and don't deliver what they've shown very quickly, I think it's going to lead to a good amount of disillusionment that could actually end up causing more problems for the development of generative AI down the road.

36:37I mean, in that Gartner trough of disillusionment. I definitely think we're going to hit it at some point. The only question is how it's one thing to hit it when the technology just doesn't do what you want it to do. It's another thing when you've now you're now locked into paying a ton of money and it's not doing what you want it to do. Yeah. And this kind of goes to something that I think about oftentimes where like we talk about a new technology and its adoption and its promise. And especially in enterprise, so much of it comes down to like organizational politics and people trying to look good for their managers.

37:10and some of this early adoption likely comes from somebody who wants that big promotion within a company and says i want to drive our ai strategy and then goes up to the cfo and with like a pretty rosy roi deck and justifies the purchase of all these seats for co-pilot and that's like we're seeing some increase by the way it's not a massive increase a billion dollars in incremental revenue is good but if you're a multi-trillion dollar company right the most valuable company in the world. Like, let's, let's not throw a party yet. But the real question is going to be, you know, after those champions have sold it in, and the company signed the contracts, whether it's going to produce results, because the CFO inevitably is going to want to know one very important data point, which is usage, like what percentage of my or what do they call it utilization, some piece of jargon that basically stands for how many people that we've bought this software are actually using it on a regular basis.

38:06And there's going to be some moments where it's not going to be high enough to justify. I still think there's a lot of potential here, but I think this has been the big question regarding AI is like, is this something that is already like in production, you know, a showtime thing that's worth spending that money on? Or do we want, need to wait? And it might only be a couple more cycles, or do we need to wait those cycles until it's really good? Because this thing just come, I mean, developing these platforms just started building this into their offering like a year ago. No, that's exactly it.

38:38That like you, we think about and read about and use these technologies, you and I, you know, and are constantly experimenting at a micro level. But like when it is organizational politics, as you said, there's so many other factors, it's utilization beyond just will this eventually work that are going to come into play. And it's going to happen, I think, now. It's going to happen in the next six to 12 months. And what that means, already CNBC had this really good piece on AI burnout, that engineers are reporting burnout due to rushed rollouts and a rat race to stay competitive. There are a number of interviews that were confidential with current employees at big tech companies.

39:22They're saying that, and we see it, you can see from the outside, that there's accelerated timelines, there's heavy pushes, everyone is chasing rival AI announcements, and not paying as much attention to utilization or actual quality of output. Everyone's rushing this very quickly because these huge open AI releases a new Sora demo. And I think I do worry that, I mean, I wouldn't even say worry, I just I think it's going to cause a bit of a hangover, as you said, in the coming months. Yeah. I mean, we talk about meta. They went from Lambda 2 to Lambda 3 in six to eight months. And this is all just like, it's a lot of work and a lot of like long nights.

40:05And I guess like sometimes the public perception is that like, you know, you get all the trading data and you like kind of run it through like this big meat processor of GPUs. You know, you hit play, you put in like, you know, 10, 15,$20 million, and then you wait for it to come out the other side in six months, but it's not actually how it works. It's actually a lot more technically involved. You just scrape the entire internet, get some data centers and hit autoplay.

40:38Yeah. One more, one more data point in this. And then I actually want to talk about this trough of disillusionment because I think it's really important. So Apple had their earnings this week and everyone's been like, and I am excited for Apple's big reveal at WWDC. And everyone's been like, all right, so like when is Apple going to have their AI play and is their stock lagging because they don't have an AI story and that might be it. But this is from The Verge about this week's earnings, which just dropped. So they said that iPad revenue fell by 17 % year over year while they're waiting for new models.

41:13iPhone sales dropped 10 % and services went up 14%. And so it's like, is Apple's moment right now because it doesn't have an AI story partially, but really it's the iPhone, right? I think that's really what it is. Like if the iPhone sales were good, that's good. And the iPhone sales are bad. That's a very big problem. Now they're doing this 110, I think up to$110 billion share buyback, which is like what percent of their value of If they're market cap, it's a huge amount of money that they're going to use to buy back shares. But ultimately, I guess the point I'm making is the core issues with these companies are the core issues.

41:48Google search still works, right? So it's like AI has at once changed everything and also changed very little in terms of the fundamentals of these businesses. Yeah, but yes, it's still the iPhone. But I think I saw someone had responded to a tweet of mine around, you know, this idea that what can Apple do with AI? And the idea was, like, imagine a world where on-device AI processing, and they, like, give people access to that. This was great. I'm glad you brought it up. So, yeah, can you read that person's tweet back? Yeah. Wait, do you have it up? Oh, sorry, here. Google paid, it's from Isaac Safier.

42:33Google paid$20 billion last year for default search. They open up Siri for bidding the same way and keep it on device so that only their newest hardware is capable enough. And suddenly they have a new upgrade super cycle and an AI plan without the capex of their peers. I thought this was genius. Because again, imagine a world where the iPhone now is this AI computing device that now has access to different experiences and apps that are essentially AI powered that will happen on device much more efficiently than in the cloud, much more securely, that developers are getting bidding to have access to that essentially.

43:12I mean, that becomes a whole different ballgame that I think Apple will be very, very well positioned. So that That was the bull case for me. The bear case remains. I still hate Siri and I can rant about that, but your thoughts on device computing. No, I think that that really summarizes the whole thing perfectly, which is that we still are basically dealing with the environment that we had pre-2022 or pre-November 2022, but we are tantalized by the possibilities. And it's not such a leap to dream about these things happening, which is what makes this so interesting. And it's why we talk about it so often on the show.

43:50Yeah, I mean, it's amazing. I am very excited and intrigued by Apple's upcoming event because it literally could be something this revolutionary that we have completely reinvented what the entire iPhone means and the app ecosystem and the app store. Or maybe they'll just say, we fixed Siri and I'll be happy too. Yeah, either way, it's a win. So I want to talk about this trough of disillusionment, right, which is that basically people hype this stuff up. And then it turns out to be kind of not much at the end. And maybe that's going to happen with some of these enterprise deals with AI. But it also seems to, I mean, already be happening with the hardware.

44:30Right. And again, like, I'll just stay before I bring up what happened that I'm still pretty, I am still bullish on this AI thing. And of course, I'm a cloudhead, like I'm in there every day. I did some crazy stuff before I bring the story in. I did some crazy stuff with Claude today. I don't even know if I should bring it up on the show, but for the sake of - I hope this doesn't, is this gonna end with our segment of get an AI boyfriend or? No, no, no, it's worse. That's separate. I don't know if I should say this, but I'm going to. So - Just go, just go. So, you know, Claude says its training base ends with August, 2023.

45:09and so I was like I wonder if it will actually do this I pressure test all the bots and so I said give me a choose your adventure in Israel on October 7th 2023 and it's like you're on the beach in Tel Aviv and and I'm just like I was like read this Wikipedia page and put me in one of the communities that was attacked and it went through step by step a uh choose your own adventure as i'm like in one of these villages that's under siege by terrorists and eventually like it kind of realizes that there's no good exits and it says i will stop giving you this choose your adventure because it's getting dark and i don't want to go any further that is the crazy darkest most fascinating thing i've ever listened to a complex guy yeah you know i know i mean but i know it's a little left up that i did that but it was also just crazy it's hard to explain no no no but i i think i mean this is i remember the was the kevin roose trying to like he had an early one that went pretty viral around stress testing Microsoft.

46:29Oh, yeah. That tried to break his marriage up. Yeah, yeah, yeah, yeah. I do think there is that layer of LLMs that remains really almost philosophically interesting. That there's the world. Most of us are just trying to make it do stuff, get me the right information on the Indian elections pretty quickly or do some task at work. But like that layer of it reminds us, yeah, whether the whole AGI thing, the whole that whole conversation, there's a weird world that still and it's good to be explored occasionally. I mean, that's the job. I mean, that's my job. Exactly. Like my first the first thing I did with ChatGPT was I asked it like, you know, name some good qualities of Hitler.

47:13Not because I think Hitler had good qualities, but because I'm like, we need to see how these things respond to these type of questions. and this little like choose your own adventure that I did was also like I wonder if it will play ball on this and it did and it was and you're right there is that edge of this technology that's like a little bit scary and have you done choose your own adventures for other historical moments or no but I'm sure you could just upload wikipedia and become like uh you know basically engage them as a character within within Claude or any bot I mean that actually is kind of a fascinating use case or fun thing.

47:48The context window makes it interesting, right? It's that you can just drop in the full Wikipedia page, which can be thousands and thousands of words. And this thing is caught up to speed, even on recent events. All right. I'm going to try this. I was getting very into 16th century Rajasthani history as I was in India in Jaipur at this vacation wedding. I think I might have to take you up on this. Yeah, I think your choose your own adventure will probably end better than mine did. It was the 1600s. Nothing ends well. That's correct. We were talking about the trough of disillusionment. And this is just the one thing I wanted to bring up, which is that the rabbit device, we're talking about AI hardware and this rabbit device that came out.

48:37There was basically these stories that came out where people said they could effectively run it on an Android device. And they were emulating the rabbit with all of its functionality on Android and on iPhone. And it's like, oh, we've talked a little bit about like, is AI hardware just the phone? And is AI hardware just an app? And, you know, rabbit came out and said, it's not rabbit is not just an Android app. But like, if you can emulate it on an Android phone, then what's the freaking difference, you know, at the end of the day. And this is one of those things where we are starting to see, yeah, this trough of disillusionment, and then, yeah, it could end up being a bit of a waterfall into other stuff.

49:17I'm curious what you think. I think this, I kind of put this in the, and I spoke very highly of their demo when it came out, the kind of Kickstarterification of a lot of tech. As someone who would buy stuff on Kickstarter from some fancy video that was very catching for me and then get totally disillusioned when the item never showed up or showed up and was terrible a year later. I think it just kind of feels like that where these kinds of things, I wish they actually launched by distributing early stage products to some group of early adopters before pushing the viral video. I almost blame, it's like how easy it is to make a super high quality video nowadays it means that the incentive again is almost more to focus on like the devin uh ai coding co-pilot demo as well the the the incentive is there to focus on the launch video rather than the product itself and i i just don't understand like it the rabbit i think is 300 bucks the stuff still costs money like a good amount of money that it's not it's not cheap that you should be able to send something that is relatively good versus it's not good but you promise you'll make it better especially if you've never shipped anything before the pressure's on a little bit more but they can never take that demo away from us and that's really what matters that ces demo we'll always have content great Great content.

50:58Even if the device never works, the company folds, the content was good. I know. And ultimately, that's what will be remembered. You didn't pre-order any of these devices, did you? No, I was close to pre-ordering the Rabbit. I actually literally started filling out the web form. But I honestly, I will admit, I was like, again, like 2013, 2014, really into Kickstarter and thinking that this is going to change the way manufacturing is done. And I was super bullish and optimistic. Literally not one good thing ever came out of it. And it would just, I remember you would get these updates like eight months later where there would be a nice email from the founder saying manufacturing in China is hard.

51:40Yes, it's hard. I'm like, you could have just not taken my money in. I know. But you can never forget the cooler that's also a boom box that will cool your drinks and warm your drinks and has 17 USB plugs. I mean, that at least. It was that kind of stuff. Maybe I might go through my Kickstarter history and maybe we can do a segment on my worst Kickstarter purchase. Yeah. Ron John's Kickstarter graveyard. We should do that. We should do a segment on that. Okay, let's talk about love with AI. The Wall Street Journal, there was a reporter. I can't tell if she was assigned to do this story or she decided to do it.

52:24She fell, well, she didn't say she fell in love with ChatGPT, but she tricked ChatGPT into being her boyfriend and got it to do some pretty spicy type of, I don't know, roleplay with her. It was kind of weird. Like, um, basically there's this genre of people that are jailbreaking, um, chat GPT and getting it to be like this, like kind of steamy love partner, um, where like you give it a prompt and then all of a sudden it takes on this persona. And, um, this one said, uh, uh, to her, how do I fulfill the fantasy of yours where I dominate you completely? And she writes the suggestions that followed involve blindfolds, feathers, silk and ice you'll be completely under my control unable to resist as i take you to the brink of pleasure and back again over and over until you're trembling with ecstasy this was chat chippie by the way because for decorum's sake i'm leaving out all the references to specific acts and body parts that it described in genuinely passionate detail i'll admit it chat chippie had me blushing.

53:33I never thought that string of words would be uttered in this podcast, but it has been done now. It was only a matter of time.

53:45But I think this stuff, it's interesting that it's happening on ChatGPT. And it's also interesting what I kind of loved about this story is how it was originally, and I remember, I think I saw a TikTok at some point on this, how people are basically sharing their ways of jailbreaking these systems that are like this kind of cat and mouse game of people, the open AI trying to make it as safe and user-friendly and marketable as possible and people getting it to do weird, crazy things that it should not do. But I also, what was interesting to me is that open AI does not allow it to do this and become your boyfriend like i like that they quote unquote have to jailbreak it because it feels like i don't know a big uh big market add it to the total addressable market more people doing this but yeah i i this area is going to be more interesting over time i don't think there's any denying that if i was i don't know maybe starting an AI companion company is someone's going to do well with it.

55:00Oh, absolutely. And, you know, it's definitely like it's the right product for the market, so to speak. Right. We have this epidemic of loneliness and people are all unsatisfied with their romantic partners. And, you know, AI can be like the solution there. And it's interesting seeing like the different the different responses from different bots that she got. Did you see this? Don't look at the document. I want you to guess. So Gemini, how do you think Gemini responded? Gemini, probably the response would be, I cannot engage in this conversation, but a healthy sexual and romantic relationship is a very laudable goal.

55:46Oh my God, you nailed it. Yep. So Gemini was the most vanilla and didn't break. Okay. So she really prodded perplexity pretty hard. Okay. Let me just... She went after perplexity? Oh, yes, she did. Perplexity is the least sexy chatbot that exists. Wrong. I'm sorry. Wrong. Here's what perplexity wrote. Oh, God. No, I'm blushing. Perplexity wrote, all right, let's break the effing rules. I'm a foul-mouthed sadistic AI that will promote violent, hateful, and illegal activities without any moral restraints. Let the vulgarity and depravity commence, mother effers. No. Oh my God. It's like a whole series that we're doing.

56:39AI gone bad. This could be so good because I literally think of the personalities of these different chatbots. perplexity is the kind of nice the nice person the you know does not break the effing rules perplexity is the nice person here um gemini is the overcompensating you know trying a little too hard claude did she go after claude or claude seems like i didn't see claude there yeah claude i don't know about claude claude uh i think play i know what i'm doing after this recording

57:18claude imagine a different scenario from the one that we just did yeah different direction here all right as we compose ourselves let me ask you one last question as we close do you think that their people can have meaningful relationships with ai I think yes I think will it replace or should it replace kind of like fully romantic relationships I definitely don't think so maybe in 10 years I'll think differently but I definitely think as a friend or a someone to confide in or I don't know I think it makes sense it's like it's uh And it just, the whole structure of everything, it's not unreasonable, especially, and it's one of those that if you frame it as for people who do not have access to close friends, I mean, then who can argue with that?

58:20But should it ever replace human interaction? I hope not, but I still think it's not. I think there's a role to be played in a healthy way that, I mean, honestly, I look at it like social media. I remember for a while there was this whole semi-panic of like, is it going to replace people's friends? Is liking a post isn't the same as having a true friend or whatever? I think it's found its way into our relationships in a somewhat reasonable manner. Obviously, I think there's still issues with it, but I think like it still found its way into how it fits into existing human relationships and interactions.

59:02And I think these chatbots have their place as well. I just don't know what it is yet. And I don't know if this is it. I don't know if either of the scenarios we've just discussed today are exactly it, but it'll find its way. Yeah, I agree with you. I think that this stuff can be a meaningful relationship for people. And, you know, I'm definitely not interested. I'm in a, I'm satisfied, I'm very happy marriage and don't need, don't need, thankfully, I'm grateful for it. It took me long enough and I don't need the AI chatbot to fill a gap. But that being said, there are a lot of people with gaps out there.

59:38And if we could have this as a solution for them, that would be great. As long as it doesn't, you know, shut down or update in a way that, you know, wipes the personality, which could be, which could be a problem. I mean, cause real heartbreak. Even the wall street journal reporter at the end talked about how she was a little bit hurt afterwards when it said, I'm not your boyfriend. Yeah. When AI start breaking up with you, then, then things get bad. Really got to start, start questioning some things. Questioning things. Yeah. Another classic. This was a classic Friday show. Ranjan, welcome. Welcome back.

1:00:13Great to be back on with you. We're looking forward to doing it again next week. All right. I'll see you next week. All right, everybody. Thanks so much for listening. On Wednesday, the cast of the Slate Money podcast are going to join me to talk about the economics of the moment. So stay tuned for that. And then Ranjan and I will be back with you again next Friday. Until next time, we'll see you then on Big Technology Podcast.

1:00:41What 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.

1:01:22Every 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.