Google’s Best Week Ever, AI’s Rising Costs, Putin and Xi’s Immortality Quest

0:00Google had the best week maybe ever, breaking Gemini ground with Apple and fending off the feds. AI's costs are rising, or are they? And is immortality within reach? That's coming up on a jam-packed Big Technology Podcast Friday edition right after this. Welcome to Big Technology Podcast Friday edition where we break down the news in our traditional cool-headed and nuanced format. We have a great show for you today. We're going to talk all about the amazing week that Google has had. everything from fending off the Justice Department and getting to keep Chrome and Android to the fact that Gemini might be a big part of Apple's new plan for Siri.

0:38And of course, there's Nano Banana. We'll talk about that. We also have a very interesting story to discuss about how AI's costs are rising, despite the fact that every token you produce is actually getting cheaper. And then we'll talk about the debate around that Wall Street Journal article that we should definitely get into. And then finally, well, Vladimir Putin and Xi Jinping are talking about immortality. And so that's how we're going to end it today. So stay tuned as we get to that part of the show. Joining us as always on Friday is Ranjan Roy of Margins. Ranjan, great to see you. How you doing?

1:11Good to see you. I will give Google the best year ever if they can fix Siri for me. So I'm excited to dig into this. You may be in luck because that is exactly where we're going to start today. There have been a lot of reports coming out about the new plans that Apple has, both for its devices and for Siri. And every time a new story comes out about what's going on with Siri, it seems to point to Google, which is really great news for the pack at Mountain View, who, again, began this generative AI moment behind the eight ball and now are looking at a potential moment where their rival phone maker is going to include their AI because it can't get it together.

1:57Anyway, this is from Bloomberg. Apple plans AI-powered web search tool for Siri to rival OpenAI and Perplexity. Mark Gurman writes, Apple is planning to launch its own artificial intelligence-powered web search tool next year, stepping up competition with OpenAI and Perplexity. The company is working on a new system dubbed internally as World Knowledge answers that will be integrated into the Siri voice assistant. Apple has discussed also eventually adding the technology into the Safari web browser and Spotlight, which is used to search from the iPhone home screen. The underlying technology enabling the new Siri could come in part from Alphabet Inc.'s Google, Apple's longtime partner in internet search.

2:41The company's reached a formal agreement this week for Apple to evaluate and test a Google-developed AI model to help power the voice assistant. And it could be in a number of different components of this new Siri. What do you think about this, Ranjan? I mean, this looks like Apple is saying, all right, we tried to build it ourselves. We couldn't. We're not going to acquire perplexity, despite my numerous pleas for that to happen. And they're simply looking to partner now with the best in breed to get this Siri thing to work? What do you think? Well, first of all, for any longtime listener who knows how I feel about Siri, anything that makes it work just a little bit better, I'm incredibly excited by.

3:23I mean, the more voice has become kind of like almost my key interface with how I interact with my phone, it just is a reminder of how far behind Siri is. But I don't know, some of the wording in this article that just stood out to me is, that the internal system is called World Knowledge Answers, and Apple is aiming to release the service described by some executives as an answer engine. It's unclear to me what they're trying to do. Because we've talked a lot about this, like, is Siri going to just be the way you chat with a chat GPT, even if by voice? Or is it going to be, I want to do things on my phone, and will Gemini actually be able to finally help you look up your flight?

4:09that Apple promised us years ago now. I think it's still unclear to me what exactly they're trying to do with Gemini. So let's talk a little bit about what they're planning to do with Siri. This is again from the Bloomberg story. Apple is rebuilding Siri on three core components, a planner, the search systems for web and devices, and a summarizer. The planner interprets voice or text input and decides how to respond. The search system scans the web or user data and the summarizer puts it all together into the answer. So Siri is going to work at least in part with third-party models. Apple has been leaning towards using a custom-built Google Gemini model for the summarizer.

4:54And it's also considering using a Google model for the planner function as well. So basically, it's going to be, it'll be everything. Yeah, you're right. I think we still don't fully know the extent that Apple is planning to use Google. for this or what it actually is going to be. Like in some ways, it sounds a little bit like it's going to be a new perplexity. But the fact that it's incorporating on-device data as well makes me think, maybe this is something that's supposed to be an Apple intelligence thing. We can start to talk about that more as we get more clarity on it. But I think for the purposes of this episode and this discussion that we're having about Google really having a good moment.

5:36I think it's worth focusing on how that this is just a complete coup for Google. A year or two ago, we were talking about how they were so far behind in the generative AI race, and they couldn't get anything right. They were telling people to eat glue, their image generator wasn't working. And now they're on the verge of potentially powering two thirds of the system within, I would say, the most careful device maker that we have today in Apple. I think this is great. This is if you're Google, you're celebrating this. It's massive. Yeah, I definitely agree, whatever it is, and I'm hoping to learn more about it.

6:19But I mean, yeah, gone are long gone are the days of Google telling us to put glue into pizza and to eat rocks, which are still two of my favorite moments in the whole AI journey. But I think the most important part to me about this announcement is the idea that if they get access to helping parse Apple's user data, I think that actually is huge. The separating out Apple's entire promise around how they're approaching AI is, we're secure, trust us with your user data. It's on device. And if Gemini and Google are getting to get into that level of Apple's overall infrastructure, I actually think this is massive.

7:05So I think, yeah, Sundar, anyone who counted him out, we should all eat crow on that one. Yeah, I think we had that episode talking about whether or not but they should fire him. And obviously, you know, that discussion looks silly in retrospect. And it is interesting that it's Google, by the way. I think you're starting to see some of Google's advantages play out here. The fact that it can lose a little bit of money to serve this stuff. The fact that it has its own chips that it produces for this, the TPU. And the two other options that seemed like they were considered were perplexity, which would have come in via an acquisition and maybe couldn't have done it in a cost, couldn't have done this in a cost effective way or could not have convinced Apple that it was capable because it doesn't have the foundational model experience that Google does.

7:59And the other one is Anthropic, which, you know, was going to charge so much money that it seems like it potentially lost this deal based off of the cash. So right now on the AI front, you have Google not only using its Gemini technology to power its own devices, to produce some other cool experiences like VO3 and Nano Banana, which we're going to talk about in a moment, but also being the company that Apple looks towards to do the Siri thing, which is just to me sounds like a grand slam. And one of the reasons I would say Apple can look to Gemini to power Siri is because, and there'll probably be some financial arrangement there.

8:41and who knows who pays who, right? Because Google obviously pays to be the default search in iOS, but if it's providing this technology, does it get something on the backend? It seems like Apple would probably pay them to get their technology on Apple devices. So that's a win. And the reason why it can make these deals is because it's been faced with one of the toughest antitrust challenges we've seen to date from a big tech company. It lost, it was found to be a monopolist by the district court in DC. And then this week we got the remedies. And there was talk about whether or not Google would have to spin off Chrome, spin off Android, whether it completely had to stop doing distribution deals with companies like Apple.

9:26And the judge who brought the ruling on Tuesday, Amit Mehta, basically ruled across the board, none of that needs to happen. It can keep Chrome, it can keep Android, it can continue to pay for distribution within Apple devices, and the partnerships can continue, even though it has to deliver some of its search data to competitors. We don't know how much, but it won't be. To me, it didn't read like it's going to be mission-critical stuff. So Google's really good week continued here with this. It seems like a win amid a loss in the antitrust case. So what was your read there, Ranjan? Yeah, I think win amidst a loss or after a loss is the right way to approach that.

10:05But again, the idea that, what was it, a year ago when the ruling came out, everyone said this could break up Google. And then in the end, Chrome, Android, OS, they get to keep all of it. And the remedy, again, it was around they have to provide some search data, some user interaction data. None of that's even completely specified as to exactly what it is. So I think, and it's only to qualified competitors. And what that means is that DuckDuckGo, is that perplexity, I think is all up in the air. So I think coming out of the idea like antitrust, could Google get broken up? Everyone was saying that that ruling was the most powerful one since Microsoft in the early 2000s.

10:55And then in the end, it appears that not too much is going to happen to them. And I mean, what was really interesting to me about the remedy, so I did read through the remedy decision here. And you get to paragraph two, and the judge is already talking about generative AI, saying effectively that like generative AI has upended the way that searches perform today. And basically, I'm not going to, the judge is saying, I'm not going to change anything. And I'm going to let this play out. And the market will decide what's going to be the thing that determines who wins here, not me. And it was fascinating that the judge even said from the moment the ruling was delivered till today, things have changed so quickly that I no longer feel comfortable taking these big actions.

11:49So it's fascinating to me that basically generative AI, or the thing that threatened Google, saved Google from being broken up. Yeah, I actually, to me, when I was reading through that, it actually is one of the most kind of like technically astute things. Everyone always talks about how like regulators or the legal system don't understand the nuance of advanced technology. But I actually think it's correct. Like from a year ago, we talk about this regularly. Is search is threatened, traditional search? Is it going to live on, is everyone going to be on chat GPT and perplexity or doing AI search, which I do believe will happen?

12:29So the traditional, like, what made Google powerful in the context of the ruling is definitely not the case as it was a year ago. Like, can we argue that them actually now having a great week in the generative AI space and, like, being able to consolidate power in other ways is a problem? Definitely, but it's a different problem. Yeah, the point is that they're going to have to fight for it. And so when you look at what the judge did here, it's sort of remarkable. A clear-eyed ruling that Google had basically illegally become a monopoly. Not basically, that was the ruling. and then a clear-eyed look at the fact that basically what had gotten it to this point wasn't going to get it further.

13:15And yes, you could try to punish it for what it had done, sort of disincentivize it and other companies from attempting similar tactics because there should be a punishment there. And I think I hear the argument that the judge didn't go far enough in this ruling. However, I think if you think pragmatically about what is happening in tech today, It was the right ruling. Whereas basically just like the government doesn't have a place to put its thumb on the scale and decide which companies win. And so the judge said, all right, let's just let this play out and enforce this small remedy, which is the data sharing.

13:52And basically may the best product be the one that dominates. Yep. Again, I tend to feel there's not enough concrete antitrust enforcement taken over the last 15 years. But this one I have to give that where technology is and how power was defined, it's not the case anymore. And again, even on the browser side, I don't know if you saw the browser company got acquired by Atlassian, if any ARC browser fans are now who are trying to deal. Like, there's competition. I don't use, there's definite competition on that side, on the generative AI side. So I think we'll see how this plays out. But, and Google's doing pretty well.

14:35But the power isn't just on search and ad tech. Very quickly, before we move on with Google's great week. Is it just worth talking about the counter argument here, which is that, yes, there's this new era of generative AI. Google's probably just going to resort to its old bag of tricks and put a product that is not clearly better than everything else into the hands of many, many people because of its distribution advantages. I mean, now, one of the interesting things in the ruling was that Google can no longer pay for the exclusive position within things like Safari. So it can't be paid Apple to be the only thing, but it's allowed to pay for distribution.

15:21And so that can continue. So why aren't we just going to see a repeat of history, even if it's a new technology? Well, I think we don't know what the landscape is going forward. Like in the old world, the search bar in Safari and iOS actually was one of the most valuable pieces of real estate in the world. It isn't anymore. I mean, which is, again, I'll agree with you that like putting Gemini into Siri somehow, and I'm curious how data sharing works on that side, whether it's all like completely walled off. But yeah, the old world doesn't exist anymore. And if a new antitrust case that actually clearly defines how they're setting up their kind of new power structure, it would need to be that versus what started five years ago when this case was brought forth by the last Trump administration.

16:21Yeah, it's a very different world. And it also just reminds me that this week we also had the CEOs of basically all the major big tech companies sitting with President Trump. Zuckerberg was there. Sergey was there. Interestingly, Sundar Pichai, Tim Cook, Sam Altman, and all of them basically like, you know, they took turns going around the table praising the president. But it was interesting to hear them say, like, it is nice not to have an administration that's fighting our companies and instead supporting them. And it's I mean, that's interesting because, again, like Trump is more business friendly, more big business friendly, but he's still his cases.

17:04One tweet and then everything changes. Yeah. But also the cases that he brought in his first term are still going forward. It's not like he withdrew them. It's not like he instructed the Justice Department to like stop the remedy phase of the trial, let the judge decide it. But I guess it's neither here nor there. I think the thing is, the fact that they're feeling that way sort of indicates that we're now in this moment where big tech, which has only grown more dominance and impervious to criticism over the years, is about as Teflon as it's ever been. And nothing is basically stopping it from solidifying its dominance even further as we go into this AI era, which on one hand threatens, yes, to disrupt its products, but also takes a tremendous amount of money and data center and engineering talent.

17:55And only big tech has that. It's good to have the name of the podcast. Big technology. Well, it's not going anywhere. That's right. Neither is this podcast. I mean, I'll just say, for the sake of argument, if big tech data lose its dominance, we'd have great stories to talk about on the show for years. But it does seem like the title of our show will be relevant for some time. For a long time to come. All right. Should we continue on this jolly adventure looking at all the good news that Google has had? It's a Google week this week. Why don't you tell us a little bit about Nano Banana, which is something that I know that you're particularly excited about?

18:40Yeah, Nano Banana, Google quietly released, and then it started to kind of make waves, and then there's been more and more noise. But basically, it's a new image model. It's the nickname for it. You can access it. It's like technically Gemini 2.5 Flash. And actually, to Google's credit about how good of a week or month they're having, in the old days, they would have made a big deal about Gemini 2.5 Flash as the name of the official model. But somehow now they're even coming out with an amazing name like Nano Banana that actually everyone remembers and actually can go slightly viral. But mainly image generation, it's incredible.

19:22It's definitely leading the pack. Actually, one of the things that blew my mind is Adobe is now actually including Nano Banana slash Gemini 2.5 Flash in Photoshop and Photoshop Express. Adobe, with its own Firefly model, was saying, this is the future. We're going to own this. It's copyright indemnified. The fact that they're letting it into the Premiere photo editing software across the entire enterprise world means that they're even giving into Google on this side and saying, you guys have the best image model. So I think it's just at every level. But then the other part of it is it's getting people into Gemini.

20:06While everyone's using ChatGPT, Perplexity, and Claude, that apparently 10 million people who are new to Gemini use the app to use it for images. So I think, again, more people using the Core app for these new image editing capabilities, it's yet another good thing for Google. Yeah, it's a very, very impressive model. I mean, it can do crazy things, like it can blend photos. So you could ask it to combine two separate photos into one. This is according to Android Central. You could also take selfies and then ask it to put you in certain situations like turn you into a spacewalking astronaut or a rock star or anything you can think of.

20:54It also does these really interesting things like continuous editing. So you could tell Gemini or Nano Banana what to add to an empty room and then continue to tweak the design and add follow-up questions. This is amazing. This is natural language design, and it looks incredible. I've seen unbelievable examples come through the timeline over the past couple days. It's obviously being used for lots of hilarious sports memes, including having Cowboy's receiver, CeeDee Lamb, trying to catch the game-winning touchdown with no arms, which he did not. But also someone put their selfie up and asked Nano Banana basically to give them four iterative examples of this turning from a sketch into a drawing.

21:48And effectively, you can see the drawing process take place just totally generated by AI. It is astonishing. I think that last part to really dig into why that's so impressive, for anyone who'd used like certain things like transform a selfie, the big transformation that is just on quality. You've been able to do that with a lot of systems in the past, but now it looks really good. But that idea of continuous editing, the reason it's so powerful is, and many of our listeners probably like experience this at some point, if you create an image and you wanted to change something, every image model would redo the entire thing because that's how a diffusion model would have to work.

22:32It would reimagine all the pixels. And they were okay at trying to remember what was in the last model and actually creating something that kind of looks like a minor change. But actually, they were not great. And they were certainly not perfect. And with images, that stands out very clearly. Now, like actually being able to define, I want to change only this one part, hold the rest constant, to like the normal world that might seem like intuitive. or that should actually be possible. But with image models, that was actually one of the most difficult things to solve. So the fact that, and I've tried that in a number of situations, like the fact that it actually works is a big deal.

23:14Any safety concerns here? I mean, are we going into what's called the reality hole where you basically have no idea what's real and what's fake? I mean, we're already basically there. But as these things get as sophisticated as Nano Banana and VO3, starting to get a little nervous? Well, actually, on that, I saw a tweet from Rob Leathern, where he basically it was Mark Zuckerberg smiling at Trump in an official Getty image. And this is actually, he turned it into Mark Zuckerberg yelling at Trump. And the craziest part of it is it perfectly retained actually on this topic of continuous editing, it retained the Getty image logo perfectly.

23:54And he actually noted that one of the craziest parts of this is Google a year ago or maybe a year and a half ago did not actually let you manipulate images of people that you upload for safety purposes. And now that's out the window. You can do whatever you want. So I think there definitely needs to be – it seems like for the sake of progress, they've just gone all in. Let's just move as fast as possible and see what happens. but it's a problem. Yeah. I mean, we had Dario Amadei a couple weeks ago or last month talking about this race to the top that he wants to incentivize. But those rarely happen.

24:35Typically, it's a race to the bottom. I mean, remember, OpenAI sort of took away those sort of guardrails within ChatGPT and let you do anything with its image editor, and that's how we had this Studio Ghibli moment. And now clearly Google is just right there with them. Yeah, actually, I remember. And if you remember that moment, at least for myself, like everyone was creating those Studio Ghibli images, but like you couldn't exactly ask it to do the copyrighted name or like the actual name you had to do workarounds, which still was at least some kind of guardrail. Whereas now it's just like, here's a photo of Zuckerberg and Trump.

25:11Make him yell at Trump and it just does it. And it does it. Right. All right. So let's recap. We've talked today about Google's AI foundational models being good enough that they might end up powering Syria. We've talked about Google fending off one of the most intense antitrust challenges we've seen to a big company in the United States in a century. We've talked about Google being able to lead with these image generation models. And of course, the business is crushing. The fact is that they continue to make more money from advertising in search than they did. And they're jumping up by double digit percentages year over year.

25:53And they have this cloud business that's benefiting from generative AI as well. They just announced this is something that came up in our Discord. They just announced this$10 billion deal with Meta for AI infrastructure. So Google's just firing on all cylinders. So mea culpa for our criticism of Sundar's ability to lead this business, because, again, this came up in our Discord, what the stock is looking like. And I was like, well, I wonder if Google's actually back. Here's the stock. Up 10 % in the last five days, up 19 % in the last month, up 33 % over the past six months, up 40 % over the past year.

26:33Not bad. rosy picture, but in the spirit of nuance, what do you see as threats to Google that can actually still bring them down and end up with Sundar on the hot seat? Still the same thing, right? I think that we just, we are so early here, we don't fully know what the interaction mode of generative AI is going to be, but search will definitely be one of the cases. so it's like one of those things that it's like the answer to your long-term threat doesn't get revealed two years into or three years into the change right it's something that happens over you know maybe a decade which is great for google because you have like a decade to figure it out but ultimately i don't know about you but i see myself doing more and more searches within chat GPT and of course perplexity.

27:25And Google will obviously like maintain a large share of searches moving forward. We just had the people running the search team on the show a couple weeks ago, but it's not a guarantee. Yeah, I think that's at least when the core business is still under threat, they're still going through the innovators dilemma. I mean, the web is still dead in my opinion or in secular decline. So, yeah, I think they have to execute on all these different paths that they're taking. They have to execute well. But they're doing it so far, at least in the last week, in the last couple of months. Let it be known that the first week of September, 2025, has been the week where Google said, all that criticism, enough with all that.

28:16We are in shape. We're trucking along and we might be even further inside the iPhone in just a couple months. I think all this makes me actually feel, are we just, is this a death knell for Google? All this positivity, is it, is this a top? I appreciate that skepticism, but I'm going to say no. What do you think? I mean, again, all the pieces are in place. They have to execute it on them. um so yeah i'm not gonna say that but i don't know anytime the stars seem this aligned perfectly together for a giant this complex it's it doesn't always go that smoothly but think about it this way i mean if you think about let's say businesses powering these strategies uh they're still the cheapest tech giant on the s &p 500 um or of the magnificent seven when you look at the p-e ratio So they've been doing this all with like very low expectations and they're executing and it's still, they're still not like an NVIDIA, which is at the$4 trillion valuation.

29:25And by the way, some one crazy thing that came out of NVIDIA's earnings last week was I think something like two companies make up 39 % of its revenue. That doesn't sound good to me. I think economists would call that concentration risk. Yeah, I think actually that's a good point. One of life's great lessons that low expectations are always a better place to start. And that's worked well for Google. Unlike GPT-5 in recent weeks, Google took the other path and it seems to be working. Yeah. I mean, you wouldn't see Sundar on the Theo Vaughn show talking about how Gemini is going to be smarter than everything.