OpenAI Builds A Browser, Microsoft Copilot’s Struggles, Jaguar Rebrand

28:00And the thing that we're not going to work on is our intelligent generative assistant. Well, I guess maybe it does represent where Siri kind of lives in the organizational hierarchy because you're right though, that they even were kind of like caveating how integrated Apple intelligence would be with Siri. Like it was more an add-on. It wasn't, you're right. It wasn't a core part. It wasn't the Siri group that became an AI group and it still remains separate. And the Apple intelligence group would then power like feed into Siri. So, yeah, I think it shows definitely kind of the wrong strategic approach to this entire thing.

28:45and it does not make me any more hopeful, even though my whole house is HomePods now, that the back and forth of like my wife and son and stuff going back, trying to get it to do what they're asking. It's like, play a song. I'm sorry, your Apple Music subscription is not powered for this because I use Spotify. Like there's so many of these moments that are almost comical, but just don't work. The echo isn't much better. Like I said in a recent episode, It woke me up for a full week straight with ads for Celsius energy drink, although that's finally stopped. So maybe someone there is listening.

29:22But actually on that, one thing I think is going to be really interesting in the whole voice battle is Amazon. There was a report last week, I think, that the attempts to integrate their LLMs into Alexa have been taking longer than expected because of latency. and I think latency is going to be a huge topic in this because Jeff Bezos famously on the original Echo said he wanted answers in like a quarter of a second. It was something where the team said this is impossible and he said make it happen and they made it happen and it always was the speed of answers were critical in making it a great device.

30:02And Siri, you're going to hear me say something nice about Siri, it has gotten faster. It might not give the right answer, but it'll confidently do it more quickly. Oh, my God. That is such a great tagline for Siri. Faster, dumber. Siri. Siri won't give you necessarily the right answer, but it'll be quick. Counts for something. But LLM processing can be heavy. It can be heavy. And the more complex the systems are that it's trying to query, it really can take longer. And consumers have been trained to want an instantaneous answer. Again, like ChatGPT, I've said this a lot, the greatest UI trick of all time was the kind of typing dots cursor that make you think it's thinking and then letting the text stream almost.

30:55So it allows the time that it's taking to generate the answer almost be magical, like there's a brain thinking. But what do you do if the overall time it takes to answer a voice query goes from a quarter second to one second or two seconds? Then do people stop using it? Do they, can you fill it in somehow? So I think that'll be a big challenge for everyone in the industry. Definitely. And one of the things that Apple has going for it is it still has that default experience. We started the show talking about market dominance. That's important. And if it gets its act together here, it has a longer lead time to be relevant.

31:35And Apple Intelligence, at least the first version, is not it. We can say with certainty now, maybe this does. Because if you think about it, just imagine if Siri was as good as Claude is today. It changes the whole experience on your phone. and can Apple get to where Claude is today eventually? It better be able to. I mean, we're talking about a long lead time here and that really can create a pretty impressive product. Only if, and this is the thing I think was holding Apple back this entire time, only if Apple is willing to sacrifice a little bit of control and say, we're gonna allow the large language model to do the work for us.

32:16And because it wasn't willing to do that, Apple intelligence has been the disappointment it has. And if it's deciding that that's something that it's willing to do, then it could be in a much better position. I have a proposal to whomever will be leading the Department of Justice on January 20th, 2025. Force Apple to spin off Siri and then make the ability to be the voice activation part of the iPhone an open battle. And maybe it'll be the ChatGPT voice feature. or maybe it'll be some other like enterprising companies and make voice on the iPhone, a competitive space. That that's my platform. That's what I'm running on.

32:57Well, Ranjan, all three of me agree with you on that front. So very convincing argument. It's three votes already. Three, three votes, including yours. That's four, nothing settled and unanimous consent for zero Siri to the people. Be good campaign. But what does not have unanimous consent is the quality of Microsoft's Copilot. Exactly. So Microsoft had some serious issues with Copilot. We also have some news that Klarna's IPO is coming out. And then, of course, there's this Jaguar rebrand and Anthropic funding that we want to get to. So why don't we do that on the other side of this break? Did you know your credit card points and miles can lose value to inflation?

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34:42You're used to hearing my voice on the world bringing you interviews from around the globe. And you hear me reporting environment and climate news. I'm Carolyn Buehler. And I'm Marco Werman. We're now with you hosting the world together. More global journalism with a fresh new sound. Listen to the world on your local public radio station and wherever you find your podcasts.

35:10And we're back here on Big Technology Podcast Friday edition, talking about Microsoft. Hopefully we'll be able to get Klarna and Jaguar rebrand for sure. And the Anthropik funding. It's amazing. Anthropik raised$4 billion and everyone's like, hmm. and OpenAI raised slightly more. And it was like biggest VC round of all time. Look at them go. So we'll talk about that. But first of all, there's this big story. And this is we're going to spend some time on this. That Microsoft's co-pilot has really not lived up to expectations with some incredible quotes from employees. And this is all being broken down from Business Insider.

35:45So Business Insider says a year after co-pilot's release, the reviews both inside and outside of Microsoft indicate that the new product is struggling to live up to the hype. While there is no single measurement of Copilot's performance, given the wide array of features it seeks to provide, many customers appear to be dissatisfied with the AI tool, complaining that it is ineffective, costly, and not secure. And this is something worth paying attention to, folks, because this one kind of blew me away. In October, when the management consultancy Gartner published a survey of 123 IT leaders. Only four said co-pilot provided significant value to their companies.

36:28Ranjan, what did you think about when you saw this? Because we've talked about this a little bit on the show, but I thought this was a story that felt definitive and it felt pretty bad for Microsoft and its co-pilot efforts. I agree it's pretty bad. Four out of 123 executives. And again, remember, like Gartner and other organizations like this, almost they're talking to people who live and breathe enterprise software. So they're going to get a pretty good reflection of what people are actually thinking. I think this fits pretty cleanly into the narrative that 2023 was pure hype. The budgets were just, wallets were opening up.

37:092024, people saw it's not going to be straightforward or easy. And 2025, people are going to ask hard questions. I think to me, the biggest issue is the pricing. So Copilot's at$30 a month per user, which is essentially doubling the licensing fee for regular Microsoft Office 365. So it's basically saying you're paying 30 bucks a month for Word, Excel, whatever, and whatever else. And now you're going to pay the same. So you should expect as much value. I don't understand why they're pushing that this early. I get the anchoring side of it. Long term, you're saying like this is I mean, this should provide as much value as just using Microsoft Word.

37:52But it's there's no way these tools are going to deliver that right now. These are still like, I don't want to say hacky tools. These are still incredible tools, but people are still figuring out how to use them to solve specific problems. And most people don't know how to do that yet. So to just shove it into their whatever app they're using and then expect them to suddenly magically understand how to derive equal value as they get from your entire existing ecosystem, it doesn't make sense to me. Yeah, that's a great, great point. And I think the pricing right here is really the problem. If Microsoft was giving this away for free or charging$5 a month per user, we would not have seen the backlash that I think we're starting to see from people.

38:40But when you charge$30 a month for people, you better be delivering some real value, and especially as you're figuring it out. And the Microsoft stock has increased on the basis of being able to charge this type of fee. and I don't think folks are seeing the results. And some of the quotes, I'm just gonna read a few of them from the story are like pretty remarkable. And I think folks should keep this in mind. Like people are thinking about this with the price. It will probably be different if it was not being charged the way that it is at 30 a month. But anyway, let's just read a couple of these quotes.

39:14I really feel like I'm living in a group delusion here at Microsoft. One longtime employee told Business Insider, the company touts that AI is going to revolutionize everything, but the sport isn't there for AI to do 75 % of what Microsoft claims it'll do. Here's another one. There's a gap between the ambitious vision and what users are actually experiencing. Internally, we're calling it growing pains. We're building the plane as we fly it. Here's another one. One Microsoft executive offered a blunt assessment of co-pilot's ability to deliver useful results. About 1 in 10 times, it's magic. The rest of the time, it's why do we even try?

39:53Here's another one. There is a delusion on our marketing side where literally everything has been renamed to have co-pilot in it. Everything is co-pilot. Nothing else matters. They want a co-pilot tie-in for everything. And lastly, everyone wants to make their impact by jamming a bad co-pilot chatbot into their tools. So now every time I click on certain links, I get two pop-ups for crappy co-pilot implementations. Your reaction. these products could and probably will be successful but they it just takes time and like that's on the actual ui side and how people interact with them and that's definitely on the llm side and the information it can take in and return to you so to again to try to just roll this out too quickly and jam it in and double the price of an existing subscription that again thirty $30 for an entire Microsoft Office suite is a good deal.

40:55$30 for Copilot as it is today is not. I think they're really hurting themselves. And I think the, but I guess it doesn't matter because the stock's up. It's sending the message to the market that this is like how you can build out your financial models and this is how you can value the stock. So for now, the strategy has been good. I guess now also I was thinking like$30 when you think about Copilot and double the fee of Microsoft Office sounds like it's too much. But$20 for ChatGPT +,$20 for Claude, I'm totally fine with and I get way more value than that$20 feels like. So maybe it's not the wrong price if it works in the long term.

41:47But it is now. But it does matter because you're going to have companies that are, this is their relationship with Microsoft. And it's now going to have Copilot everywhere. If you have bad experiences there, you may be less inclined to buy more seats, buy more services. You might cancel and not want to go back in when it gets better. And then, of course, and I promise we're going to stop the piling on in a moment, but this is an important part to read. There's the security concern. And the security concern is massive. And I don't know if this is just cherry-picked examples or whatever it is, but it exists and it's worth talking about.

42:25This is from the article. Many customers have deployed Copilot, going to discover that it can enable employees to read an executive's inbox or access sensitive HR documents. This is from a Microsoft employee. Now when Joe logs into an account and kicks off Copilot, they can see everything. All of a sudden, Joe can see the CEO's emails. And a Microsoft spokesperson said the company isn't aware of any examples in which an employee has been able to see the CEO's inbox without permission. Another Microsoft employee said the tool works really darn well at sharing information that the customer doesn't want to share or didn't think it had been made available to its employee, such as salary info.

43:10The problem is that it takes years and these are not easy situation. faced with such issues, some customers have paused their deployment of Copilot. In the Gartner survey, 40 % of IT managers said their company has delayed implementing the tool for at least three months, citing oversharing and security concerns. I mean, Satya Nadella has said security over everything. He said internally, if you're faced with a trade-off between security and another priority, your answer is clear, do security. This is part of the Microsoft revival. It's been security. And so then I'm left wondering, what are we doing here if we're, you know, the company that prioritizes security has ridden security, but is allowing these co-pilot instances to leak important information?

43:56they need to better answer this and again it's a quote from uh i think yeah it's a microsoft employee familiar with customer complaints but the idea that there has been any customer complaints that some lower level employee logged in to co-pilot and could see the ceo's emails I mean that that breaks the entire product that's like it's over at that point so to just say like a Microsoft spokesperson if their only response is we are not aware of any examples in which an employee has been able to see a CEO's email inbox without permission that's kind of shocking to me like it from just from what do you want them to say no this does not happen like I hope so because if it does, you better address it.

44:47If that has happened once, you better address this right now. You don't just say like, give a standard PR spokesperson response or like non-answer. Either it happened and you address it or it didn't happen and you just go hard back at this. I'm shocked by that. Definitely. And look, this is why this is the highest I expect for them. This is why Satya wants Copilot and everything. This is why they're already charging$30 per seat is because it takes a huge CapEx spend to make this happen. So Microsoft, I just learned this from the story, it plans to amass 1.8 million GPUs by the end of the year.

45:28And it plans to triple its data center capacity, which is already at five gigawatts, roughly what it takes to power all of New York city each day by 27 20 by 2027 it plans to spend more than 100 billion on gpus and data centers alone it needs this to work and it has said and this is the microsoft defense that it studied uh it it uh commissioned a study that said for every one dollar a company devoted to generative ai the return has been$3.70. So Microsoft's response here is basically, we are spending a lot of money. And if you spend a lot of money, you are going to make a lot of money already today.

46:13What do you think about that, Ranjan? This is where, again, regular listeners know that this is my biggest pet peeve with the hype cycle and generative AI as a profound believer in the technology is exactly this that like again that there's the quote of like they commissioned a study that forever one every one dollar devoted to generative ai their roi is three dollars and 70 cents like selling the story that already right now people are going to be deriving insane amounts of value without especially for companies that have never really used generative ai i've been working with this for almost three years now when gpt3 was launched via api three years ago and it takes time and it's hard work and like it everything is super custom and requires a lot of i don't know blood sweat and tears so i think uh they're falling into this trap again and they're it did i think they'll be okay i'm not i'm not saying i'm not betting against microsoft right now, but just tone it down a bit.

47:25That's all. Exactly. And there's some other like pretty interesting stats in this story. This is also from Gartner. And this sort of like tells us how OpenAI, I mean, not OpenAI, Generative AI and Copilot are still a pretty mixed bag, but there's some good things. So Gartner said 92 % of folks said Copilot enhanced employee satisfaction. 62 % called it somewhat value, but at the same time, 75 % said their employees were struggling to integrate it into their daily routines. 57 % said users felt the tool didn't deliver the value they expected. And 53 % reported that it provided too many inaccurate results.

48:03I mean, basically what you're seeing here is something that can be very valuable, something that is useful, makes people happier, but also they're still not 100 % sure how to use it. And And that seems normal for a new technology that it's just two years on the scene and always improving. That's kind of throw my hands up and say, OK, that's my hands are in the air. That's not sum it up. That's it. That's it. That's it. So we find out. All right. Let's rapid fire through some of the things that we have coming up here. Oh, before we rapid fire, one guy who absolutely loved this story and is quoted in it is Salesforce CEO.

48:43Mark Benioff and folks, he'll be on the show next Wednesday talking about AI and agents and co-pilots and Microsoft and Salesforce and his relationship with Elon Musk and whether he's going to sell Time Inc. So that's coming up next week. So make sure to tune in for that on Wednesday. Maybe you could listen to it with your family as you drive to your Thanksgiving destination wherever you're going. We understand that this is pure in-the-car entertainment for the kids. Big tech in Turkey. Just give me Benioff, give me the family in the car, hand the kids the iPads, and let's get going. That's the big technology dream.

49:26All right, very quickly, Anthropik raised the$4 billion. A lot of money, and it came from Amazon. and it's going to make AWS, let's see, it's going to make AWS the primary place. It'll train its flagship generative AI models. It is interesting that Anthropic and Amazon have a much cleaner relationship than OpenAI and Microsoft. That's just my observation. What, Microsoft gave less than a billion to the latest OpenAI round? I mean, Amazon gave all four billion. i'm hoping this means that as a clod pro subscriber i don't know if others out there use it they've i've been hitting the rate like the they have pretty strict chat limits yeah if you use if you're a heavy user especially if you're writing code with it you hit the limit and if you're on the i'm on the clod subreddit and that's all everyone complains about so i'm hoping this means that they'll be able to uh boost those limits a little bit but i mean honestly Claude is getting better and better.

50:28This is where why like the Microsoft co-pilot stuff just arcs me because there's great tools out there being built. You should be able to do it because Claude is incredible. And I'm happy for this. This means at least from the open AI versus the chat GPT versus Claude battle, they'll both get better, which is a good thing for all of us, at least. Definitely. I think this is going to prove it to be one of Amazon's best investments ever. Ooh. I am. I think so. Bigger than Whole Foods, MGM? Yes, bigger than both. And I think maybe eventually more money than both. We'll find out. Yeah. And I am going to go to their reInvent conference coming up in December.

51:10So looking forward to doing a show from there. And we'll have more to say about that pretty soon. So let's make sure to use the final eight minutes we have together, Ranjan, talking about something near and dear to our hearts, which is the Jaguar rebrand. And I logged into Twitter one day this week, and it was just a stream of people filled with rage about what Jaguar had done to its brand. And I was like, ah, these people need to get over their anger at rebrands. And then I took a look. And why don't we let the Wall Street Journal introduce it to us? This is from the journal. The Jaguar rebrand is pink, diverse, and doesn't feature any cars.

51:53Luxury automaker Jaguar is betting that a colorful and youthful rebrand will help it successfully launch fully into the electric car market. Critics, however, are questioning whether its brand still knows how to sell cars. An avant-garde 30-second spot released this week shows a diverse group of expressionless people dressed in brightly colored sculptural garments as they stride wordlessly around a fuchsia landscape and pose with props like a yellow sledgehammer. It closes with a look at the car maker's new logo styled as J-A-G-U-A-R. The video displays phrases such as copy nothing and create exuberant, but it doesn't include any cars.

52:36This is from a marketing consultant. It's unusual to see a storied brand so radically want to change its position. That's brave, but brave could be foolish if the customers don't like it. My quick reaction to this was this rebrand was terrible. It's the opposite of what you want your company to be, which was basically inaccessible to the point of, I don't even know, it was so off-putting. There was, again, the expressionless people walking around and nothing about a car or nothing, just sort of what acid trip did this company do to come up with this type of rebrand? That was my reaction. Maybe it's a basic reaction because it seems like everybody else felt the same way.

53:20But I know that you have a perspective, Ranjan, and I haven't heard it yet, and I'm very curious to hear. I'm excited to take the other side on this one. No, you don't like this. I like, okay, here's why, here's why. So for context, Jaguar, the brand, their cars have been declining in sales, especially in the U S and there, there was a good post. It was like, you know, what their positioning has been, they used to be kind of high end luxury. Then they started moving a bit down market and now they're a bit lost in terms of where, like where in the price spectrum they sit. So the, so the Jaguar, the brand Jaguar, the company, JLR Jaguar and Land Rover is doing okay.

54:02Like actually they're doing pretty well and Land Rover models have been increasing in sales significantly. So they actually in North America saw almost 30 % growth a year over a year, which is, I mean, cars is a huge, especially for a legacy brand. So they got to do something. Now, what do you do? This commercial was ridiculous. Like, I mean, I agree. It was the stupidest thing I've ever seen. But if the true goal, and I don't know if this is actually, but they started responding in the comments, some pretty funny things, like very online, like, responses, and like, kind of they engaged. And the fact that they did that no, in these situations, like brands never do that, they always kind of either the rule is you just don't say anything and let it pass or you try to like apologize or say we'll do better they just went there they owned it and they were funny about it so if the goal was to get people to talk like I had not thought about the brand Jaguar in as long as I can remember I am excited to see the unveiling right now like maybe it'll be terrible but maybe it'll be good but I'm thinking about it And I think this is the thing in marketing, like what other possible rebrand would have been exciting or talked about or good?

55:26I don't, I, I mean, I have no clue. I'm not a car marketer in any ways, but I think this has everyone thinking about it. And remember, their goal is probably to move away from pure, like, hardcore car enthusiasts to more regular consumers. And this at least opens things up where people are thinking about them. Maybe they'll hate it. But when they come up with whatever redesign, we're all going to be watching. That is the most logical explanation I could possibly have heard about why this might be good for Jaguar. However, I just don't think anybody watching that commercial is going to be like, yeah, I want a Jaguar now.

56:06Did they get a lot of attention on the internet? Sure. Is that cheap? It sure is. We haven't seen the car yet. We haven't seen it. Have you thought about Jaguar in years? Or do you ever think about the brand Jaguar? No. Yeah. I did think about it this week, but I'm not, it's not, I mean, it's not making me want to buy a Jaguar. Are you going to buy a Jaguar now? maybe the car if the car is awesome maybe maybe i don't know but the thing is like i was speaking with rj skirinj from rivian about this this week your car however many people might say it's not true your car is your identity in some way what you drive says a lot about you do we like the fact that that's happened is that an over extension of capitalism to the point where like we've made our vehicles our identity yes is it kind of gross yes but it is your identity and so like what is being a jaguar owner going to say about you if this is the new direction yeah but that's like a lot of liberal people are still sitting on teslas and uh i don't know what it says about them right now that might be it i mean that might be their play saying we're going they're going all electric right yeah yeah a lot of people want to get rid of their teslas maybe this is exactly what Jaguar is doing.

57:24Maybe it's not even being subtle about it. Maybe it's saying, F you Elon Musk and your association with Trump. Oh, wait. We are the liberal car maker. We're doing electric cars. RJ Skrin from Riven. He's like, we're just selling the car makers. Jaguar is saying, liberals, come on in. We don't need to even show you the car. We're selling you an identity. Hire the agency Kantrowitz and Roy for more incredible marketing strategy just like this. I mean, but we didn't even, we didn't make the strategy. Like I think that that is actually what they're doing. If it is, that is 4D marketing chess. That would be smart.

57:56From a business standpoint. Yeah, yeah, yeah. That would be smart. And how do you get people thinking about you or talking about you? Because making a splash in today's attention landscape is nearly impossible, especially for just like some old brand. They did it. The thing is though, I mean, I'm trying to say this without being bad, but like liberalism is kind of a damaged brand right now sort of they're still there yeah they're still trump only won 49.9 of the vote it's uh there is a large market of people i like this that uh own a tesla probably right now and we're the environmentalist leaning liberal progressive customer that are looking for an electric and they're looking at maybe it's the Hyundai Ioniq or the new, I think it's like the Honda Prela.

58:53It's open. None of the other EVs have a, other than Rivian, which I know in that interview, they said they're going to try to make more affordable cars, but right now. Until 2026, yeah. Yeah, exactly. And there's an opening here. Just like what made, was there something about the Jaguar ad that made it liberal? Was it that it was diverse like i see i didn't i honestly don't even remember i just remember some bright colors that's it yeah bright colors a lot of expressionless people it is a diverse cast of models yeah yeah the logo redesign i mean i think it was more that it didn't show any cars and just looked like just a ridiculous like almost like a zoolander-esque fashion show like it uh it was ridiculous but december 2nd at miami art week mark your calendars for the unveiling are we going i think i think we have to at this point gotta take us so hey we're on board we're hoping we're rooting for you yeah i'm like looking at the type of people are that are i'm still trying to figure out like what this ad says i'm looking at the type of people in that ad and i'm just like it's not i I don't even know if it's about diversity, but maybe it's just the demeanor of these people.

1:00:10I think it's the looks they're giving the camera. It's the whole thing. It's the whole, which again, if AI create me a video to stir up the internet using bright colors and diverse models, they did it. They did it. well I started this segment not saying that there was any way I could possibly see the business logic in what they've done I end this segment saying I can see the business logic in what they've done but this is also one of those things where we're going to see the numbers now we have to follow this story right? yeah this is the most important story of 2025 maybe not exactly alright everybody thank you for listening Ranjan great to see you thanks for being here see you next week as i'm driving my jaguar up to boston to my parents place listening to our new jags big tech yeah exactly i am driving the rivian i'm just driving the um r1 second generation suv this weekend so that'll be oh all right that'll be fun i'll report back on that and yep we got benioff coming up next wednesday and then ronjohn you and i are back next friday next friday yep all right thanks for listening and we'll see you next time on big technology podcast