New Release at Big Technology, AI Bubble Looms, Apple's Next Event — With Brian McCullough

0:00Big Technology is launching a new premium edition with a new monthly podcast. We also take a look at the state of tech as the year draws to a close. And then we sort fact and fiction from AI and crypto. And maybe we throw in a little bit of Apple's big news coming up right after this. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. We have a special double feature episode today because we're running this both on the Big Technology feed and on the Tech Meme Riot home feed, which means that none other than Brian McCullough is joining us live.

0:35Welcome, Brian. Hey, Alex. Welcome Tech Meme Right Home listeners to another weekend bonus episode with our buddy, Alex. I think you've been on like five or six times at this point. That sounds right. It's always a pleasure to talk, Brian. Yeah, no intros needed on my side. But given that this is news for your audience and for mine, too, what is this new big technology premium thing, Alex? OK, thanks for teeing me up perfectly there. So this is great. This is an opportunity for me to introduce it both to our listeners on Big Technology Podcast and to Tech Meme Right Home listeners. So Big Technology has been free for three years and the free edition will remain after this.

1:19but I'm introducing this new premium edition that's just going to give more of what we've been doing in new forms and new formats with new features and even new podcast. So I'll start with the podcast first because I feel like it's pretty exciting for podcast listeners. It's called Big Tech War Stories. It's going to run once a month for big technology premium subscribers. and it's going to be a conversation with people who have been in the weeds inside big tech companies and have either built a product that people love or one that was never released. And we're going to speak with them about what exactly happened.

1:56I think I have a clip from it that I can play here. So our first episode, which is going to be running next week, is with Gaurav Nemada, who is the first product manager on Google's Lambda chatbot. What are some lessons learned for Google? looking in the rearview mirror? Like, how should Google change? They need to go back to the experimental route, like over the years, Google has become more and more conservative about doing things. They care a lot about PR, like public relations. They care a lot about how their image is shown in the media. And I feel that, at least in my experience, that plagued so many projects inside of Google.

2:39It was like the PR was always top of mind for leaders. And on the other side, like OpenAI, like they don't give a shit about PR or like for the most part, they don't. So that's a bit of a clip of the new show. I'm stoked about it again coming next Monday. And then in addition to that, with this premium edition, we have this new thing called the panel, which you're on, which is we already have about 20 tech experts. We're talking about analysts, VCs, journalists, and technologists that are going to weigh in on news as it's happening. So let's say the Silicon Valley Bank is in the middle of collapsing.

3:16I'm going to email the panel. The panel will all, well, when it's relevant, email one to two sentence replies about how to think about the news. And we'll be able to contextualize it for readers. And then finally, we have a new Amazon column coming from Christy Coulter, who's a recent guest of the show. She spent 11 years at Amazon and has like a really good insight into how the company works. So that's it. Basically, big technology premium. You can find it on bigtechnology.com and the launch special will still be going on. So that's 30 % off the annual price, which is already a good amount off of the monthly price.

3:50So you can get an annual subscription for$90 and that's it. Two comments on this. First of all, thank you, Alex, for asking me to be involved in this panel thing. I actually saw Alex in person this weekend and I was like, oh, you should have this person on the panel. You should have this person on the panel. Everyone I said, he was like, they're on. So believe me when I say this is a blue ribbon panel because everyone that I was suggesting to him, they have already agreed to be on the panel. So that's great. And then number two, I have a suggestion for the podcast. Years ago, I did an interview with one of the people on the team at Digg.

4:29if you know the history that like dig was the big thing before reddit and they did a site redesign that destroyed dig and reddit came to the fore so that would be a sort of behind the scenes story if i can uh i'll have to dig into my archives and see oh that would be great that would that yes it's a good story yes okay that would be great we'll see if we can make that happen yeah yeah so i just got it off the ground we're recording on tuesday this show's going live on my feed Wednesday and then yours on the weekend. But this is this thing is fresh, hot, fresh and hot off the presses. And I've been like thinking about the right formula for many years.

5:05I want to be able to keep the free product for those who want, but also offer more for people who are interested in a premium subscription, something that can help them do their jobs better, you know, give themselves an edge in their career, give their companies an edge against the competition. I think that this sort of insight insight in terms of being able to read tech events as they happen and learn about how the best do it is the best possible offering. And I'm really excited to roll it out today. Well, everyone go check it out because, as you know, big technology is one of the best sources out there for really in-depth sort of stuff in terms of analyzing the tech landscape deeper than I can do in my 15-minute show.

5:43However, and I'm going to grab the reins slightly because one of the reasons why I wanted to talk to you this week is because you are the big technology guy. And it's sort of that time of year when a young man's fancy turns to thoughts of year-end recaps. And so this is me teeing into our first topic, which is I wanted to ask you, seeing as how you follow closer than I do, all of the big tech platforms. This year started out with tech in turmoil, with layoffs, with some people questioning the business models of something like, was Meta in trouble and stocked down whatever percent it was or whatever.

6:28I feel like it's not that much in turmoil. So if you'll allow me to pose the question to you, but then we can go back and forth on this. What happened to big tech this year? I feel like they've recovered. Is that the correct sense or what happened? I mean, they've definitely recovered. And, you know, you just have to look at meta stock price, right? Up 150 % over the year to know that all that doomsaying towards the end of last year was misplaced. And that these companies were always going to respond to the demands of the market. And boy, did they do it. So what you had is Mark Zuckerberg basically, you know, he came in flat-footed.

7:12but then immediately realized that it was going to have to be a year of efficiency, as he put it, right? Big cuts and a focus more on inventing versus maintaining. And I think you've seen that Meta has done the cost cutting. It's very tough for them, right? They had to cut a large percentage of their staff, but it also changed the culture internally where they started, you know, started acting less like a big company and more like a company with some urgency. and you've seen that manifested with big moments where they've shipped you know their open source ai model llama they've opened they've shipped chatbots this whole new uh slew of purpose-built chatbots uh that you can now get in whatsapp and messenger honestly like you know been among the biggest skeptics of what this metaverse thing was going to be for consumers but i just got a chance to try the Oculus Quest 3, and I thought it was very impressive.

8:09It has great pass-throughs, so you basically can wear it, walk around, and see everything going on in the room with you. And it's not quite where it needs to be. Obviously, it needs to be much thinner than what it looks like now as opposed to these big goggles. But, I mean, is it getting there? Absolutely, especially because Apple's bringing it forward. and so so i think that meta is emblematic of the type of movement you've seen through the entire big tech uh echelon where there's been you know cuts that they had to make and they've made them however painful they were and then innovation and i mean ai which we're going to talk about later has underpinned a lot of that so uh i attended a meta event uh sometime in the summer june or july and they were talking about all the AI stuff they were going to bring into their ads, products and things like that.

9:00But they constantly made the point that like, we're still committed to the metaverse. Is it just that maybe it's, they still are committed and they're still spending money on it. But is it also a thing where it's like, if we just don't shout it from the rooftops, that keeps Wall Street happy. Like it's not like they're walking away from it or doing a mea culpa saying, well, that was a cul-de-sac. They're just not talking about the metaverse as forthrightly as they were, say, a year ago. Absolutely. I mean, don't you think that when they said year of efficiency, I mean, how much of Wall Street thought that meant not investing billions of dollars into the metaverse every year, not losing billions of dollars?

9:43That's actually not what happened. They didn't cut spend at all. They, in fact, increased spend on the metaverse. I mean, they are not taking their foot off the gas pedal there. And they've just tried to trim elsewhere within the company. And not only that, their ad product has recovered nicely from Apple's anti-tracking moves. So you put it all together and it is sort of, it's almost just, you know, business as usual in a way that the strategy hasn't changed. Maybe they've added more AI into it, but they're just trying to do it in a way that's again, you know, a method of building with more urgency and slightly, although not dramatically, less people.

10:23Well, so I was going to ask, again, like you go on the compound and friends, like you're closer to like the stock market end of this or whatever. Was it ever a case that like in the early part of the year, was EPS down for any of these companies? Were profits significantly hit and they've come back? Or was it more that they were being cautious in terms of forecasting? And also, so then when they do cuts to especially personnel, that looks better to the bottom line to Wall Street. What I'm asking is, were their businesses significantly hit? You just mentioned Meta's ad business recovering from the ATT thing.

11:07Were they hit and they've recovered? Or is it just the vibe, which all of Wall Street is to a certain extent, where Wall Street likes the narrative better now? Part of both. I mean, there was a real hit, especially with Apple's anti-tracking moves. We're talking about a$10 billion loss coming in or contraction of revenue coming in, in particular because Apple didn't let them track what was going on when people left the app. And so for Meta specifically, that has come back in the sense that like, are we back to where we were before ATT? Not 100%, but there's two things that have happened. One is that people have taken their money and they've brought it to Snapchat and they've brought it to Twitter and they brought it elsewhere.

11:46And then, you know, even though they weren't getting the same returns that they were on Facebook, they've just been like, oh, shucks. You know, the best place we have to put our money is Facebook. So they've actually like come back from that worldwide tour and be like, all right, Facebook, you know, take it. Then Facebook has built a lot of technical tools that have enabled these advertisers to start to get maybe not back to where they were, but to a point where they're pretty comfortable now spending money with this company. So you're at a point where you also had some pretty hard comps against COVID because people all, you know, every company that we're talking about in big tech just had massive increases in revenue during COVID because they were basically the economy.

12:25So that tails off a little bit. But now, I mean, it's definitely evened out at this point. And everything is pointing up for these companies. So if we have time, can I ask you for two other specific companies? We'll save Google slash Alphabet for the AI conversation later. But you're talking about COVID times and cutting back the workforce. That's Amazon, right? Amazon was also dealing with the sort of the transition to a new regime, you know, Andy Jassy taking over. So what's your take on Amazon's year this year? I mean, in some ways, good. They really were slow on the AI front, but they positioned themselves a lot better with their big investment in Anthropic, right?

13:08already 1.25 billion in Anthropic, potentially up to 4 billion investment in Anthropic, which is like this counterweight to open AI. So now they have a research house similar to the way that Microsoft has a research house. And while doing this, they've sort of, and Matt Wood was this VP from AWS was on the show a few months back talking about this, where they've kind of created AWS as this clearinghouse for AI models. So no matter what model you want to build, they're not going to favor necessarily the ones that are developed within Amazon or the ones that are developed within Anthropic. They have access to the builders and they're like, all right, builders, like come use our tools and build.

13:47So I think they're in good shape there. The one, you know, concern for Amazon is that AWS growth has really been slowing in a way that, you know, you see Google, Google, I mean, Google cloud, right. It's not anywhere close, but it's starting to at least put up some formidable competition. And there's still a shine around Azure, Microsoft's cloud offering. And so you put it all together and at Amazon, you know, you're, you're, you're still dealing with the fallout of the pandemic, right? Because you overbuilt your infrastructure. You kind of were caught flat footed on AI, but you're starting to make up for that.

14:22And you came into this year and it was probably like an, oh my God, what are we going to do scenario? People talking about Jeff Bezos coming back. And now the ship seems to be riding there as well. And they're up about 40 % on the year. So one thing that I have been hearing, which might be related to the AWS thing, I don't know if you've been hearing this too, but the idea that there are these new startups that have access to the NVIDIA chips that are creating sort of new cloud offerings. I've been hearing from a lot of people that this could provide the opening for people to get a wedge against the traditional, Because essentially running a sort of a cloud instance or a set of racks for doing AI stuff is different.

15:13You have to design it differently than how a traditional cloud service does. And so I think maybe that's some of the concerns around AWS is I've been hearing people say a bunch of these startups that now are getting multibillion dollar valuations just because they have access to A100 chips. if people get like sort of acclimated to using these people to do their AI stuff, well, then it's easy to be like, well, here we'll add on this cloud thing or whatever. Anyway, the point being, this might be an opportunity for people to create alternatives to AWS and the traditional cloud providers. Right. And don't you think it's a huge opportunity for NVIDIA?

15:53Sure. I mean, they are starting to license some of their computing in the same way that Amazon is. today they were talking about also getting to the gpus which is different but nvidia is investing in all those like cohere and what's the one in jersey or whatever right or maybe that's the one in jersey anyway the point being is that yes all those ones that are having these multi-billion dollar valuations you're seeing that the lead investor is nvidia so um yeah and nvidia in their basis nvidia has an interest in uh powering uh cloud stuff so yeah exactly don't you love the fact that like one of the more important companies in this space is in jersey it's like such a jersey thing it's like yo you need some chips yeah no i love that company because i i you know i i think i did it the story a couple months ago they just had a bunch of um gpus left over because they were uh experimenting with crypto and then all of a sudden it's like well we're not doing crypto anymore but we still have these and everyone's like please please give me give me um there's a There's plenty of startups right now that are plowing that field, FYI.

16:58Right. Maybe that's what Web3 was all along, where Web1 was read, Web2 was write, and Web3 was stockpile NVIDIA chips and sell them for the AI boom. Hey, I always say that the whole reason Web2 happened was because it was all of the infrastructure left over from Web1, like all of the blowup of Global Crossing and all those that left all the dark fiber in the ground. real quick last one that i want to do here um apple's story this year is essentially just a global macro story that global growth slowed and they couldn't sell as many phones and that's it or is there any other larger story to the apple story yeah there's like a few angles so like yes growth slowed um the number two thing is that people by and large upgraded everything they needed during the pandemic right so you had a two-year super super super cycle um and then And like people just don't need to replace.

17:55So and by the way, like this is obvious at this point, but an Apple, you know, an iPhone 12 or 13 is fine for five years. Really, if you had the 10, you needed the 15. But if you have something 12, 13, you can probably I mean, there's not a massive difference. So the compelling event to upgrade is no longer there in the same way that it was. And then, I mean, honestly, like there is some some worry from China where you've and this is something that has been overlooked, but I think is really important. We've talked about it in the show in the past where the Chinese government said, if you're in public service in China, no iPhones.

18:36And not only is that a decent sized amount of the market there, but it's also a signal to people in China that says, hey, if you have national pride, don't use the iPhone. We make great phones here. you know okay we might be reading your data on them but if you love china use a huawei and now huawei is the number one phone in china so there's a lot of different um currents writing against apple the comps to to covid definitely don't help but we have like four straight quarters of revenue growth decline we're going to talk about their new laptops and you know towards the end of the show but um but geez you know not only they have revenue decline but they have serious geopolitical risk that's a rough spot to be in if you're Apple.

19:19Indeed and in terms of like we said you know maybe everyone recognizes that they don't need a new phone as often as every two years you had Google acknowledging that with the Pixel what is their they're supporting out to eight years or something crazy like that now but yeah it's a very long time. Yeah yeah which you would imagine that some people will have to match at some point but we'll see. Okay that's my that's my trip around. Let me tell you, Brian. Yeah. Yeah. I mean, to me, the thing, the real big story. So first of all, like, I think we know that these tech companies are, they're in good shape.

19:52And you mentioned the compound and friends. I think one of the things that Josh Brown, who is the co-host of that show has talked about is that AI saved the market in 2023. I really think that's true. We're going to get into that in the next segment. But one thing that I think is super important to touch on is to me the underrated unheralded story of the year and listeners of big technology podcasts probably know how I feel about this because we've talked so much about it is that self-driving cars took a huge leap a tremendous leap and are growing are they're they're finally at the point where the driving is good enough that they are you know able to operate functionally in large portions of cities 24-7.

20:38We're going to have Waymo CEO Takidra Mawakana next week on Big Technology Podcast. And one of the things listeners are going to hear in that conversation is that Waymo, since 2021, has gone from 50 square miles of operation within Phoenix, which is already a decent amount of size, to more than 200 square miles in Phoenix. not only that operating in San Francisco, testing in LA, and we have crews testing on the freeways. So the speed and success at which this wave is coming is truly fascinating. And while it's kind of interesting, like while we all talked about crypto, AI was quietly the biggest story in tech.

21:17And now as maybe while we're all talking about AI, the rise of self-driving is quietly the biggest story in tech. To the degree, I mean, I know that obviously there's different ways to answer this, But I agree that it's a big story in terms of a technology that we were promised, promised, promised, and it kept not coming. And I had the famous, well, we get self-driving by 2020, as everyone promised, and it never came true. But is that a big tech story in the sense that, I mean, Waymo and Cruise could become big companies. but is that going to be, that's almost ancillary to tech in the same way that Uber, in a sense, is ancillary?

22:01Like, do you see what I'm saying? Like, is this, when we tend to think of big tech in terms of like the platforms, it's like, well, Google can do X, Y, and Z or why can't you also do a music service? Why can't you also do movies? And is, I know that Waymo comes out of Alphabet, but is this, if it's a success, 10 years from now, is it a story of like, well, yes, I don't own a car anymore because I have a Waymo or a cruise subscription, but that's sort of walled off from the larger tech story? I think it's a great tech story. And I think that like we sometimes can judge the impact of tech in terms of the way that it rearranges our world, right?

22:46And for better or worse. I think this is mostly a better situation. And, you know, despite the fact that everybody tags me when a cruise falls into a puddle of cement in San Francisco, which like, not great, but come on. You know, we, anyway, we're going to talk about it more on Wednesday about all these, these headlines about the cruise hitting a purse or someone being critically injured under a cruise. It turns out it was a human driver that slammed into them and they just landed under the cruise. But I think that this could really reorient the way and not to get too deep into this because it's going to take a while and these promises have been made and delayed.

23:25But it will reorient the way that our cities work. It will change. If nobody owns these cars and you're just hailing them, then you don't really need space for parking. I think it will create a much better world and will probably be, I mean, I put it up there with iPhone, Chachi PT, and Waymo cars, the three most amazing experiences I've had with tech in my lifetime. You know, the other, I don't know if you've been aware of this, but simultaneously to all of a sudden, six months ago, oh, wait, there are way more self-driving cars out there than I anticipated. Are you aware that like the drone delivery thing is actually becoming a reality too?

24:05And it's not necessarily Amazon though apparently they've they've made some more moves recently but like the the FAA has officially like given the okay for like real actual drone delivery for stuff in the U.S. and so like I feel like that's another one where it was a promise for the last decade that has never come true but while everyone is looking elsewhere I feel like drones are suddenly becoming closer to being a reality sort of like self-driving cars are that's pretty exciting I'm pro drone I I like the idea. I mean, as long as you're not like flying your drone and looking into my window with the camera, like I think that we really benefit from the ability for drones to deliver things.

24:42I mean, it's also good. I'd imagine better for the environment than having a car drive around to do that. I think that drone photography and footage is exceptional to watch. I've been when I was at BuzzFeed, I flew the drones and captured some wild footage inside some of the wildfire impacted areas in California. So I didn't realize it was it was that close to being approved in terms of delivery. But are we that far away from seeing this stuff hit? Yeah, no, this is what I'm saying is that the two stories rhyme to me in the same way that like the promise was self-driving and that it never came, never came.

25:19And now all of a sudden, like a switch has been flipped. And that has been true. I think Walmart is, whoever's doing it with Walmart, I don't have any of my notes in front of me, is the furthest along. But even this week, I saw movement from Amazon Air or whatever they call it for them doing more than they had been doing too. So what if we look back on 2023 as the year that self-driving and drone delivery passed a threshold and started to get real? Yeah, definitely. And it's interesting, right? Because in the middle of this AI moment, the thing that everybody looks at is that attention is all you need paper outside of Google, which is the transformer model.

25:57And that was in 2017. And, you know, I mean, it comes to a moment where there are these breakthroughs, they're quiet, and then people build on them. And the fact that these drivers have become generalizable and are able to apply the same stuff they know city to city, road to road is extremely underrated and I think extremely cool. so I know we're both in New York it's going to take a while for this stuff to hit the streets in New York like man get a robot to drive on ice it's not as easy I mean humans can't do it either but um but who knows I'm now hopeful that we'll see the day yeah um I'm more hopeful than I I was in 2020 when I declared my bet null and void because uh I couldn't I couldn't take a a a self-driving car into work or whatever.

26:45Soon enough. Can we take a quick break and then come back here and talk about AI, crypto, and Apple on the other side of this? Please. All right. We're here on Big Technology Podcast with Brian McCullough of the Ride Home Podcast. We're also on the Ride Home Podcast. It's pretty cool. Tech Meme Ride Home Podcast, which is awesome. Great daily update on what's going on in the tech world. And also talking about premium edition of Big Technology. I'll throw out the URL one more time. It's BigTechnology.com. If you go to the launch post, which is going to be the second or first or second from the top, Big Technology is going paid with deeper coverage and new features.

27:20You can get a$90 for the year subscription as opposed to our typical$15 a month or$120 for the year deal. All right. We'll be 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 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 card today check out the link in the description for more information on rates.