OpenAI and AMD's Megadeal, Sam Altman and Jony Ive’s Bumpy Start. Meta vs. Apple

28:07Their aim is to create a palm-sized device with a screen that can take audio and visual cues from the physical environment and respond to users' requests. OpenAI and iVE have yet to solve critical problems that could delay the device's release, though. These include deciding on the assistant's personality, privacy issues, and budgeting for the computing power needed to run OpenAI models on a mass computer device. And there's a person that tells the FT, somebody close to IVE, that compute is a huge factor in the delay. Amazon has the compute for Alexa, so does Google. But OpenAI is struggling to get enough compute for ChatGPT, let alone an AI device.

28:50They need to fix that first. All right, we're going to talk about the nature of this device because we're getting a picture of what it's going to look like. But first on the significance of somebody close to IVE complaining to the FT that OpenAI doesn't have enough compute for this device to run, that to me is pretty interesting and I think not a good sign. And this is a multi-billion dollar tie-up. It's not a good sign for the fact that somebody close to IVE is saying this for a story about the device hitting speed bumps. What do you think, MG? Yeah. Yeah, the behind the scenes element of that is super interesting.

29:25You have to wonder. To me, it sort of felt almost as if it's, you know, I don't want to say it's an intentional leak, but I do feel like it's directionally interesting that they're basically telling the market that this device is not going to be on time. because their original reports were that it was going to be probably sometime at the end of next year, the end of 26. And so this to me signals that this is more like a 2027 type thing now. And I think that that sort of quote maybe helps that get out there so people aren't expecting, have a countdown all of a sudden for a year from now when this device doesn't hit the market.

30:10But I also think there's a lot in that report, including what this device potentially is. They don't come out and say it directly, but I think a lot of us who read those original reports when the two sides both started working together, but then obviously when the acquisition happened, which also feels like 20 years ago, but was only a few months ago, which is, again, wild. But I think we all sort of zeroed in on it being not necessarily a wearable, even though that was what Meta and others were working on, but that it could be some sort of thing that's a voice-first device that you carry around alongside, at least to start, certainly a smartphone.

30:57So it's a complimentary device to a smartphone. And so there's that element of it. And then, yeah, the data element of like what would be required to make this work. It's sort of, I'm curious why that compute complaint is in place other than the general compute complaint that we're seeing with Sora and everything else right now, right? Like they're always compute constrained to some degree. And, you know, right now they're rate limiting the creation of Sora videos. they just jumped it down. I saw recently from 100 in 24 hours, because I keep hitting it, to now it's 30. And so they're really feeling constraints, it feels like, feeling the compute pressure on that.

31:41And so with this presumed voice first device, the report is that there will be cameras involved with it too. Like, is that really going to be that big of a data hog? And maybe the part of it that is, is the fact that it's apparently always listening. It's always on, always maybe recording. Um, so that's maybe part of it, but, um, it's, it's a curious, it's a curious bit of reporting that, that that's like the issue, one of the main issues. Right. And I think what you're getting at is the compute shouldn't be the main, I mean, obviously it's an issue. It shouldn't be the main, the main thing that would stop a rollout.

32:19yeah they could just limit it was yeah right and even if it was and you and someone from johnny ive's team wanted to leak out that we're having some issues um you know the fact that they the leak was not just we're delayed but finger pointing to me points to the idea that these teams aren't working well i mean like if you have a sports team and they collapse right a sports team that loses a couple games you hear the athletes and they're always like we need to do better as a team we need to get better and then let's say they lose six games in a row and i'm familiar with this because all of my teams lose six games in a row that's when they start finger pointing and they say well the defense wasn't holding up it's part of the bargain or you know we we really you know are our hitters at the bottom of the order need to need to come through and for them to say open ai is struggling to get enough compute for chat gpt let alone an ai device they need to fix Is that, oof, that is, the fact that someone would go to the FT with that is, I think, fairly concerning.

33:21Hearing you say that now, it sort of brings into my mind, like, the idea of sort of what we were talking about with Sora, because that's, like, the prime example of their compute constraint at the moment, at least forward-facing wise. But it sort of feels like, okay, there's all these different things going on at OpenAI in the moment. And now, famously, they brought in another CEO to help deal with all that in Fiji Simu. Simu. And so it feels like there's maybe some jockeying happening for making sure that each team gets their level of compute that they want to get or feel like they need to get in order to fully be able to bring their product to market.

33:59And again, like that happens to be the time when Sora is really sort of just blowing up their servers at the moment. But obviously, they're working on other models. And there's other needs for compute that are going on behind the scenes. There's other products. There's all the agentic work that they're doing. And, you know, it feels like maybe this is just a way to ensure that, like, hey, you guys spent a lot of money to bring on the IO team. We need to make sure that we have our resources, too. Yeah, I think they feel like they're not getting them for some reason. Now that you contextualize it, I think that's the exact right read.

34:34And it sort of sparks in my mind the fact that this has always been an issue at OpenAI, teams fighting for compute. And I think the safety teams of yesteryear that got upset and left got upset mainly over the fact that they didn't have enough compute to either steer the product roadmap or do the checks that they wanted to or the experiments that they wanted to. So it's also like what what Microsoft, you know, remember, like this is what OpenAI's main complaint about was was with Microsoft, like they're not getting the resources that they need and they feel like they're, you know, Microsoft's working on their own projects.

35:08And why aren't you being fully committed to helping us? And, you know, so now it's moved internal. Right. And let's talk a little bit about what this device is, because we did get some interesting detail about what it's going to be. So this is from the FT report. It's roughly the size of a smartphone. Users communicate with it through a camera, microphone, and speaker. It is designed to sit on a desk or a table, but it can also be carried around by the user. The device is always on. Rather than triggered by word or prompt, its sensors gather data through the day. That would help it build its virtual assistant's memory.

35:45one issue is ensuring the device only chimes in when useful, preventing it from talking too much or not knowing when to finish the conversation, an ongoing issue with ChatGPT. It's interesting. Sort of reminds me of the friend.com pendant. Yeah, for sure. Friend, Limitless, there's a few others, right? And obviously Humane, RIP, and Rabbit, which also feels like decades ago that that came out. but yeah there it does again this it feels a bit obvious that this is the path that they were going to go down I I feel like this is and and I'm somewhat biased because I've like long written about this dating back a decade where I thought that there would be like you know these vocal computing devices not just Alexa but like yeah on the go and and always on you type things and it hasn't played out exactly that way yet but I do again I feel like it's just a matter of time until someone nails these.

36:43And I do think that when OpenAI rolled out GPT-4.0 and alongside that, they did the voice element of it, which obviously they infamously got in trouble with for the Scarlett Johansson voice, which is mainly what people remember now. But if you remember back then, it was about a year, a little over a year ago, I think it was just insanely impressive voice technology compared to what the state of the art had been up until then. And it's been you know, getting better. And now obviously Gemini and everyone else has it integrated within their systems as well. But it feels like Alexa and Siri and the first sort of versions of these types of vocal computing devices, they focus so much on like the individual devices and the sort of rudimentary utility stuff.

37:32I just triggered all of my devices in my office here. And so once they did that, it sort of held them back from being able to do like the newfangled versions of these. Obviously, they couldn't have known at the time where LLMs would go and how this would evolve. But it feels like with that GBT-4.0 rollout all that time ago and now the continued evolution, the voice computing element is there where it needs to be for a device like this to work. But the hardware part is now the hard part, which is always the hard part. But, you know, companies like Amazon or Apple or Google can figure that out because they have their massive companies at scale.

38:10Question is if OpenAI can do it with the team that Johnny I they acquired with Johnny Ives team and the team, most importantly, that he brought over from Apple who has done this at scale for decades. And this brings me to this idea that they're all sort of all these products are consolidating in some way. Like we just named a bunch of companies, OpenAI, Amazon, Google, Facebook, Apple. It seems like they're all building the same thing. And so the hardware might be the tough part, but then you sort of, you'll eventually probably differentiate based off of the assistant inside. And this was your take about what's going on with the OpenAI device compared to the Apple device that we're going to see.

38:55So you write, just imagine a world in which Johnny Ive introduces OpenAI's first hardware, a small screenless digital companion for your life, at the same time that Apple unveils their next hardware, a pair of glasses with cameras on your face and perhaps a screen in your eye. One runs on ChatGPT, the other on Siri. That would be quite the dichotomy. And it's sort of angling that way, right? The timelines are sort of starting to line up, especially with what we're talking about with delays, potentially to OpenAI's device. And we know that Apple, from the most recent Mark Gurman report, is dropping sort of Vision Pro work to go full steam ahead on these smart glasses to compete, presumably with Meta, and meet them in market.

39:39And there's the whole subtext thing going on with Johnny Ive being, you know, perhaps upset about the world that he helped usher in right with screens and, and everything else with the iPhone. And the fact that not only is Apple now, you know, going full steam ahead on glasses with cameras, but if they're, you know, again, the reports are that they're going to go down the path that Meta just did with with the screen in the eye, like, now we have screens in our eyes. and Johnny Ive is trying to make advice with zero screens. And so that is a very interesting butting of heads. The only other thing I would add to that that I didn't write about in there, but I'm slightly concerned that there's too much focus on it being a screenless device perhaps.

40:28I'm not saying that it needs to be another smartphone, certainly. And I do think that there's probably a world, And I think there's increasingly a world where people are maybe, you know, happy to move at least a bit away from being reliant on a smartphone. But I'm also worried a little bit that it would be harder to use with zero screens. You know, like there's sometimes when you just need a screen for something to showcase versus doing it orally or via another mechanism. Now, maybe they could say, well, they'll send a notification to your phone if there's something they need to show you or something like that.

41:01But I'm a little worried that it's trying to do it just to make a point about anti-screens. At the same time, the flip side of that would be a screen, as everyone knows, is the biggest battery draw of any of devices. And so if they could do it without a screen, they can do a lot better in an all-day battery life and maybe week battery life. I think they're all going to go screen. I remember when Amazon announced the Echo device and it was so cool because it glowed at the top and talked to you. and we had Panos Panay from Amazon, the head of devices and services, on the show in March and he besieged me to go get the Echo show with the screen and said the experience wasn't going to be the same without.

41:46And I think all these devices will end up getting there and it's just kind of interesting how they're all converging in their own way. Let me see if I get this right. You have OpenAI pushing Apple on the assistant device. You have Meta pushing Apple towards glasses. You have Amazon getting pushed by everybody to have a better Alexa. You have Google kind of standing out there to the side, but it has ambient Gemini and is also working on glasses. And Amazon apparently is also working on glasses. is the tech world just as are all tech products and services just converging to this you know eventual yet to be named singular interface with assistant inside that actually reminds me of one sub point of my piece which was while I just said you know the negative side of like the no screen thing I do think it's interesting that open AI is trying to go down at least a little bit different of a path.

42:53Like you won't see presumably, unless there's success from it, from someone, be it open AI or someone else. I don't think you'll see Apple do like, yeah, like a screenless AI device. I don't think you'll see. Except for the glasses, they could do the glasses with no screen. That's true. And it sounds like the first version will be, but I mean like, um, a sort of a secondary piece of hardware. Yeah. Like exactly what is rumored to be, you know, what open AI is working on. It feels like they're the only ones besides those startups, as we mentioned, that are going down that path, at least right now.

43:28Now you could say Alexa, I gotta trigger it again, is sort of like that in a way, right? But it's obviously meant for to be plugged in and you don't take it with you. But I think you're right. Obviously everyone is, is sort of coalescing around these same ideas, including the startups, all working on the things that we noted. And the answer to that is like, I just think everyone is still trying to figure out like what the next device is, despite all of the AI hype and everything that we've been talking about. And obviously everyone, you know, we're, we're real believers in it, but we're unsure about the financing models for it, but everyone believes in the technology angle of it.

44:08But it's still at the end of the day, people are looking for the next device because they think that this can be the next thing that becomes like the massive platform and the next iPhone. Right. And, um, I'm still of the mindset. That's the more boring mindset. That's like, nothing's ever going to be the scale again of, of what the iPhone achieved. And instead it's going to be all of these devices, a bunch of different devices, including glasses, including your smartphone, and maybe, uh, you potentially including a chat pin, walk around thing, desktop device, whatever it is, and several other things along those lines.

44:44So yeah, I think that they all just feel like they need to have these initiatives. You mentioned Amazon because they, as you noted, it sounds like per reporting they do have a glasses project as well. but they hired the Jay Allard, which was a name I hadn't heard in years and years out of Microsoft to work on, you know, these new, some sort of new ideas around devices and AI and whatnot. Yeah. So they do have, so here's a plug for, for an upcoming episode. Panos Panay is going to come on. I just recorded with him in New York following the Amazon devices event. And we do talk about that workshop that they have where they're trying to figure out the future of the new AI device and get a really interesting interaction.

45:24It's kind of fun where I said, well, what do you think about pendants? And he goes, Oh, really trying to go all over the place here. And he goes, pendants, Hmm. You know? So anyway, I encourage people to tune into that because it does seem like they're at least considering a pendant there. But you know, what's going to be interesting. It's going to be the design philosophy of all these companies. Like you wrote in a post about how Amazon said, let's just get it out. Let's get Alexa plus out there after they saw that Apple, you know, didn't release or get as much of Apple intelligence out there and they got killed for it.

46:02I actually, I want to end with a couple of things. First of all, I want to get your take on, well, second of all, I want to get your take on the Vision Pro before we leave, because we've said it a couple of times on the show that Apple has deprioritized that. So we should at least take a moment to talk about what that means. But before that, it's just very interesting to see Meta pushing Apple in these directions. And so I'd be curious to hear your perspective on like where the, you know, it's really a blood feud in my perspective. Maybe that's too strong of a term, but where the meta versus Apple product war stands and how you think each one of those companies' product philosophy will be an advantage or a disadvantage as they move forward trying to ship these AI devices.

46:48Yes. So I've written about this a number of times dating back a few years now. So basically, you know, once once Apple tried to destroy Meta's advertising business, it felt like that was the kickoff of a real cold, you know, not even Cold War, a hot war. And in many ways, that's that's been happening. I think at the highest level for meta, you know, Zuckerberg has said it multiple times from Joe Rogan's podcast, no less like talking about how they feel like they're in a just terrible position because they're beholden to Apple and to a lesser extent Google in terms of the smartphone, you know, needs for their products.

47:29And it's not just for distribution of their apps anymore. It's now for things like their glasses where they feel like they can't have the same level of connectivity that like an Apple watch does because they're not first party hardware, you know, and they can't tap into the iPhone the same way that Apple itself can with, you know, low level Bluetooth and all these other things that they use for connections. And so I think that Meta has been trying basically anything to make, you know, something that could, again, replace that smartphone as the next computing device. And again, Zuckerberg has not been shy about talking about that.

48:07I'm super skeptical, as we just talked about, that anything will ever get to that scale. But I do think that Meta has done a good job and an admirable job, by the way, of sticking with it, right? Like lots of companies famously Google, you know, with Google Glass and their own VR efforts. It's like they just do something and then when it's not working, they back away. And, you know, there's something to be said for that too. But a lot of these newfangled devices, it just feels like they will never work unless someone just continually pumps in the billions required to sort of be in the right place, right time, right?

48:37So much of this is based around timing, as is so many things in the world. And I just feel like a lot of these devices have never worked because they're not right place, right time. and people give up before they would ever be in the right place because you can't really time the markets, right? You can't know that it's going to be the right time for it. You can do as much as you can to try to make it the right time for you. But again, Meta, to their credit, has poured almost maybe$100 billion now into their efforts in terms of the Quest headsets, but now also with the glasses and all the other projects and the AR glasses that they're working on.

49:14So credit to them for still trying to do it. I'm still a little bit skeptical about what scale they can get to with that. And if they can ever fully, truly break, uh, yeah, the, the need to be paired up quite literally with Apple and or Google. Um, and it feels like it's going to be a long time at the very least until they can get to that part. I haven't used the new glasses yet. Curious if you have, but like, you know, they're impressed. It sounds like they're impressive. It sounds like the technology is impressive, but it also doesn't sound like the type of thing that's, you know, people are going to leave their smartphones behind anytime in the next five to 10 years.

49:53Yeah. I haven't used them yet, but I actually want to pick up on a, on a item that you put in a recent post about it, that I think Exor Luxottica actually balked at the idea of naming the latest generation Ray-Bans because they were bulky and then meta sort of floated some money towards them. And now all of a sudden, right. Again, another, another tech company that owns an ownership stake in a in a public company exactly and and so i think what i draw from that is what might be playing in meta's benefit here is they don't have a standard you know they don't have to worry about decades of a design legacy that they have to uphold to make something feel meta-ish they're just like all right if these are ugly as hell oakley glasses that you know talk back to you and some people like them let's just do it and that sort of i guess spaghetti at the wall type of approach, I think is a very interesting contrast to the it has to be perfect way that Apple is developing things.

50:51Yeah. And one riff off of that idea is I do think the smartest thing that they did was partner with Exeter Luxottica because the biggest strength that Apple obviously has beyond all their in-house expertise is also the retail channels, right? Like they can move product because they have stores around the world and they can ship something and it be in every single country, basically around the world, aside from, I guess, Russia and maybe a few other places. But, um, but, uh, meta has, has one store or a couple stores, right. And even Google has just a few, a handful of stores, like no one else has that capability.

51:26So meta smartly, it's not just the design of the glasses, which obviously mattered to like, you know, and getting to use the Ray-Ban brand, but it's also the, the foot, the retail footprint that they can get from that partnership was a hugely smart thing. And it's something that I've been wondering about when thinking through what Apple does with smart glasses. Like, do they also do some sort of partnership there? Not because they need it from a distribution perspective, but more because like Meta has now set a standard in a way that, look, you're wearing the same brand that you wore for your regular sunglasses or your regular glasses, but now they have these tech enabled things.

52:02And like Apple, as great as they are at design, Like, do people, you know, like there's the difference between wearing an Apple watch, which is, you know, well-designed and stuff, but it sort of resides under your shirt. And there's a very different thing between something that's right on your face all the time. And obviously Google ran into that headfirst, pun intended, you know, with Google Glass. And I think, again, Meta was very smart in out of necessity. They had to be smart about that partnership. And so what does Apple do there with do they have to cut a deal to do a partnership in a similar vein?

52:39OK, a couple more minutes left. Let's just do the requiem for the Vision Pro. I remember back in the day hearing Apple make lofty promises about the future of spatial computing. It wasn't the metaverse, spatial computing. That's right. It's big vision. And now the Vision Pro has been a disappointment. But not only that, it seems like it's going to be deprioritized within Apple's suite of products. And you even suggest in one of your recent posts that this might be it for. Yeah. And, you know, Gurman and others have said, like, look, they're still committed. They're obviously about to release a new version with just an upgraded chip.

53:18It's apparently going to have a slightly better headband, which is nice because the current one is not any good. But but beyond that, it will just be a chip upgrade. the one that you're talking about of course is that they're they're gonna at least put on the back burner the idea of a vision air or just the vision without the pro part of it the slighter the smaller lighter and potentially less expensive you know version to actually scale this thing and i think that they just probably looked at the market and said like obviously where we're at right now with the vision pro is not where we want to be but even if they did a quote-unquote vision or Vision Air and say it was like even$1 ,000, do you think it's going to be a massive scale, you know, hit device?

54:00I don't think that it would be. And so I think that they're being realistic about that. And, you know, as you're talking about Meta sort of showed them what the market is like, at least for the foreseeable future in terms of a wearable on your face. And again, others had tried, we talked about Google Snap, of course, was, was an early mover with spectacles and still trying it. But Meta really sort of nailed, I think, both sort of a technological perspective, ease of use, the partnership angle and timing again. And I think for the Vision Pro, when we talk about does it ever go anywhere, I don't think that it's going to go anywhere anytime soon.

54:40And so it's a matter of if Apple does hit with something like the smart pair of smart glasses and the next version of it, I wouldn't be shocked if they do just back burner the notion of the Vision Pro. It's still there. It's like a legacy product. It's all roped into this vision, quote unquote, vision umbrella of like, well, this is just the high end of what we always wanted to do. And, and, you know, we're working at it on multiple fronts. It's too bad because I do feel like they've started to come into their own. It's with some of the content and they're getting better about it, but the device itself is just way too bulky, way too heavy.

55:14Everything about it is just inconvenient to use. And it's just the time, the market completely wrong. And obviously they couldn't have known AI was coming as in as hot as it did but like you know they they went all in on this product and they probably shouldn't have done that I know we said to start this episode that the past month or 30 days or whatever it's been has been crazy and so uh it's hard to possibly capture all the action that's happened and and I I think that we'll have the same thing repeatedly month month on end because uh none of this seems like it's slowing and uh mg it's just great to be able to break it down with you uh every month so thank you so much for coming on the show of course thanks as always alex and i'll see you in a month see what's all right see you in a month and folks uh remember to check out spyglass.org you can set up sign up for mg's newsletter there become a pro subscriber like i am and get the uh added added articles and insights uh which i highly recommend.

56:14All right. On Wednesday, Anthropic Chief Product Officer Mike Krieger is going to be on, if all goes according to schedule, talk about the company's latest model and discuss the fact that we've gone from Sonnet 4.0 to 4.5 in a very short amount of time and whether the AI product release cycle is speeding up. Thanks again to MG. Thank you all for listening. And we'll see you next time on Big Technology Podcast.