OpenAI's Jony Ive Moment, Anthropic's Big New Model, Google Enters 'AI Mode'

0:00OpenAI and Johnny Ive team up on a multi-billion dollar bet to build what exactly? and are we about to move beyond the screen? Plus, Anthropic has a big new model that will blackmail you, and Google has a ton of AI news that we'll try to make sense of. That's coming up on a 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. Wow, what a week of tech news we've just experienced. I feel like it was about a month worth of news in four days. We've had developer conferences from Microsoft, Anthropic, and Google.

0:37Also news that OpenAI and Johnny Ive are going to team up to build an AI-first device. And of course, news leaks that Apple is going to release smart glasses maybe as early as next year. Let's talk about everything that's happened and make sense of the headlines. Joining us as always on Fridays to do it is Ranjan Roy of Margins. Ranjan, great to see you. Welcome back. Alex, who are you, man? I opened my Twitter feed a couple of days ago and I see Alex on stage and Sergey Brin is just on there. You never even gave me the heads up. I had no idea this was happening. Well, that would make two of us.

1:15And I'll just say this quickly and then we'll get into the news. But here's what happened at Google I.O. So I had a fireside scheduled with Demis Asabas, which we teased on the show last week. And I showed up to the stage. I got mic'd up. I had my questions ready and Google team tells me, look, there's been a bit of a switch. And I said, man, I do not want to like give up this Hesabas interview. Like I flew here for this. And they said, yep, Sergey just walked in and he's going to join you. So I found out just the same time that everybody else did. And it was pretty fun. I like walked up to him and said, hey, so, you know, what do you want me to ask you?

1:50And he goes, just ask Demis the questions and I'll chime in. So it ended up being a really fun conversation. And I'm glad that we were able to put it on the podcast feed. So if you haven't checked it out, folks, I do suggest you check it out. And if you're coming to the show new, just to give you an update on the flow on Wednesday, typically I'll publish a big interview. And then Ranjan and I are here to break down the week's tech news every Friday. So anyway, that's the story, Ranjan. All right. Well, you know what? It was an incredible listen. And we'll be talking about that in just a moment.

2:20OK, great. So we're definitely going to get to some analysis of that conversation. But first, let's start with this really wild piece of news, which is what OpenAI is going to be doing with Johnny Ive. This is from Bloomberg. OpenAI to buy AI device startup from Apple veteran Johnny Ive in a$6.5 billion deal. They're going to join forces and make a push into hardware. The purchase, the largest in OpenAI's history, will provide the company with a dedicated unit for developing AI-powered devices. And this is from Ive. He says to Bloomberg, I have a growing sense that everything I've learned over the past 30 years has led me to this place and to this moment.

3:00It's a relationship and a way of working together that I think is going to yield products and products and products. So they want to build an AI device, no screen, something that's ambient. We'll talk a little bit about it. They did, I think, two videos announcing this in a very cinematic, typical Johnny Ive way. Ranjan, what is your perspective on what is happening in this marriage? All right. I'm going to break it down into two parts. First is the actual device and what we can speculate on it. But I definitely want to get to the deal structure because, my God, this is the most open AI deal imaginable.

3:37In terms of the device itself, I'm excited. I think we have absolutely no idea what it is, what it could look like. but I am a big proponent of moving beyond the form factor of the screen. Even meta Ray-Bans and just glasses overall have been a huge fan of. We've talked about a lot. But this idea of the ambient and the RIP humane pin, Rabbit R1, I mean, some great... Not like they'd be the first to try this. Yes, some great memories in AI hardware land. But if anyone can do it, certainly it would be Johnny I. But I think it's interesting. Again, it's the idea that, and I don't even know what exactly it could possibly be, but the idea of just ingesting data around you, converting that into some kind of knowledge, somehow feeding that to different devices that you own.

4:33It's interesting, and I'm sure a lot can happen from it. And again, if anyone I would trust to come up with that, it would be Johnny Ive. But what do you think this could be? Well, I want to give you first my definitely wrong take of what I hope it will be, and then we'll go from there. That's where I like to start. I want it to be a hologram, like Princess Leia in Star Wars. Okay. That's wrong. That just kind of sits on your desk. It's an AI avatar. you talk to it and it will understand your context and then help you through your day and maybe i don't know maybe it's fun and entertaining as well uh let's clip this because maybe it will be right um maybe there will be the holographic component johnny i thing i've ever heard it's going to lead ron john it's not just going to lead to products it will lead to products and products and products and products and products and so there's a chance that this could happen but that's the fourth product.

5:28Yeah. I, it feels so much to me like the humane pin, which also was started by former Apple folks. I think the difference is that this could work because it has open AI's technology underneath it. We know open AI has been effectively the leader in voice, right? Their, their voice AI is better than everybody else's. They have the underlying models and to bring Johnny in, I think could lead to effectively the same thing as the Humane pin. Maybe you don't wear it. Maybe it sits in your pocket. Maybe it's on your desk. It listens to everything you do. And it's just this helpful ambient assistant. That's probably my best guess outside of Princess Leia as a hologram.

6:11But yeah, I think the bigger news here is that it just signals that if you look around Silicon Valley, we had announcements from Google this week about this assistant that they want not just to be a chatbot, but something that's with you in Glasses. We know Meta wants to do that. Now OpenAI wants to do that. It's clear that Silicon Valley is rushing toward the next version of AI already, which is something that's ambient with you, understand your context, understands everything you say, and just helps you out. To be truly assistive, to be truly general, as Demis put it this week, it just needs to be with you and experience the world as you do and we'll we'll see uh what happens from there well so yeah i i think not princess leia but on that second point i agree and i think what is exciting for me is this is almost like the ultimate application that or the ultimate expression that it's not the model is not just the models anymore it's the application layer i would actually put this in that category.

7:12Like it's the experiential layer, the form factor. And I mean, I've been with the Meadow Ray-Bans as I'm city biking around New York asking questions. Apple could have done this with AirPods. I always, it was like really bullish that AirPods could be kind of this like ambient augmented audio reality layer as you walk around and you could interact with that certainly didn't happen but overall i think this idea that there is this kind of interactive through voice maybe it's i don't through touch in a weird way like there's so many other ways to alex raises eyebrows at that one but uh you know there's other ways i think you're in the right direction yeah i mean hold on things like that you like press it a little harder okay i'm gonna stop now This cannot go anywhere good.

8:02Keep going, Ronjan. Please do. I'm just saying the idea that to me, like chat GPT voice is already so good that we need to come up with easier, more natural ways to interact with it. Large language models are overall so good that we just need to get more people interacting with them. And then again, that contextual layer, the more understanding of your context that whatever interaction device you have, whether it's ChatGPT, whether it's a screen, whether it's your iPhone, whatever it is, and we're going to get into how Google has your data and that could give them an advantage. that contextual understanding is going to make like unleash the next wave of AI progress, I believe.

8:47And something that's just collecting data all the time around you, how you move, what's around you, what you're listening to, like all of that stuff is very interesting from a not even getting into the privacy standpoint yet, but maybe we do. But overall, even a little device that collects that and allows you to interact with it in some way, I think is very interesting. It's interesting that we might, I'd like just to address the privacy thing. Remember, we're still living in a society where lots of people don't want the Echo in their house because they don't want Amazon listening to them all the time.

9:21Now, it doesn't really listen all the time. It will delete, you know, very intentionally the audio if it doesn't hear the wake word. So imagine we're going to go from an area where people are already suspicious of that to a moment where they let AI listen to everything they do. The utility just has to be so intensely high if people are going to actually adopt this. Now, I will say, I was with a reporter recently who was using one of these devices that listens to everything that she says. And then, you know, gives like a to-do at the end of the day and talks a little bit about, you know, broader goals that they have, whatever.

9:56It's just an ambient assistant using generative AI. and I think I'm generally more okay with giving my data to these companies. And I just said, I think that could be really cool and maybe I should use that. But it does add a level of awkwardness the same way glasses will lead to a level of awkwardness because you're going to have to have other people around you be okay with the fact that they are being recorded by your special Johnny Ive OpenAI product. Yeah, even meta Ray-Bans as I wear them around, It's why I just have the sunglass version, so I'm not wearing them sitting across from people.

10:33And it's just kind of more on a kind of, you know, again, just meandering around New York. It's just an incredible assistant and lair to have on. But it's definitely going to introduce all types of problems if it is some kind of always-on listening device. Because, again, as you said, I agree. If people are worried about it in their own house, how is society writ large, especially people who don't know or have not consented? That seems to be an issue. I wonder how they control for that. Is there some kind of like anonymization layer? Is there some kind of, I don't know. I don't even know how you possibly control for that.

11:12But I have to imagine they're at least thinking about it. Yeah, they're going to have to. And I think ultimately, even if they come up with an elegant solution, it will be more invasive than basically anything else that we use today. But let me ask you a question about the product here. Again, on the show, I'm often saying that the model is more important. Ranjan is often saying the product is more important. So as someone thinking about the product, Ranjan, let me ask you this. Do you think this is going to be a product that people are going to want to use just in general? I mean, think about what Johnny Ive said in this internal meeting.

11:45This is according to the Wall Street Journal. He said the intent is to help wean users from screens. I'm curious, like, because I got asked this on CNBC yesterday and was like, I know that this is the intent of Silicon Valley. I can't say with conviction that it's going to happen. It would probably be good if we were able to abstract screens away to some extent because we spend so much time looking at them. But it's interesting that this is coming again from Johnny Ive, effectively the guy that built the iPhone with Steve Jobs. Do you think that this intention has a chance of working? Yes, 100%.

12:23I think it will. I think, and I'm admittedly, it's self-interested because I've been waiting for this. But to me, I've been trying to do this for a long time. Like, I look at the Apple Watch as another form factor that weans me off my screen, that I can mentally process a notification. And if it's important, maybe then I'll pull out my phone. I look at the Meadow Ray-Bans. I look at my AirPods. These are all things that have me interacting with some kind of technology potentially without looking at a screen. And my belief is 10 to 15 years from now, when people see like videos of people walking around the streets, looking down at their phone, it's going to be like when you see people smoking cigarettes in a restaurant.

13:09Like people like kids 30 years from now will just be like, wait, people like smoking in an airplane. I mean, it's so bananas that that happened. And people will be like, wait, you guys just walked around looking down at this screen all day? So I think it's going to be figured out. And if, again, if anyone can, it's Johnny and Sam. Johnny and Sam. But why not Johnny and Tim? And I'm curious what you think about the fact that we haven't seen a device like this come from Apple. and whether us weaning ourselves from screens is good or bad for Apple. I mean, Apple stock's down 20 % this year. They've had a rough year.

13:50But the stock dropped after this announcement hit. So what do you think it means that this is not something that's going to Apple and that Apple doesn't have anything like this already? I think that's a really important point in this. I mean, clearly, Johnny, I've had to have had some conversations at some point, just, hey, Apple, what are you up to? And maybe he smelled very early that Apple intelligence would be the absolute cluster that it became. Maybe he understood that it's just not going to work in this organization. So I think it is telling that, I mean, clearly went to OpenAI, Sam Altman, though we'll get into the structure of the deal.

14:31But I think that's important because Apple, if any organization should have owned the next form factor, it should have been them. they I mean they define the last few and they are not getting this one yeah I mean my perspective on this is it doesn't matter how beautiful the actual device looks it's all about the assistant inside and that assistant is entirely based off of the AI within it and if you're Apple this can't feel good to see everybody else going this direction because your you know Apple intelligence or Siri lags behind OpenAI and Meta and Google and Anthropic, you name it. So if we do abstract away from screens, and I don't think screens are going to go away completely, like they're always going to be present.

15:15We're going to need screens. But let's say we diminish our reliance on them by like 50%. That does become an issue for Apple. Why don't you quickly tell us a little bit about the deal structure? And then we'll actually get into Apple's answer here, which leaked this week as well? Okay. So this deal, again, I said is the most open AI deal imaginable. So it's valued at $6.5 billion in an all equity deal. Open AI had already acquired a 23 % stake in Johnny Ive's company late last year. The acquisition, Johnny Ive is not going to work for Open AI. They're going to work with Open AI, but IO, which is the name of this company, the staff of roughly 55 engineers, scientists, researchers, physicists, and product development specialists will be part of OpenAI.

16:04What's even weirder is there's also this collective called Love From, which was when I went and looked back, because that's the name I remembered, there were stories of like Laureen Jobs Powell and others, like there's like a billion dollars of funding potentially. That was going to Love From of Johnny Ives' company. This IO company was not mentioned often. It's really weird. No, no. I mean, and Love From will remain independent. OpenAI will be a customer of Love From and Love From will receive a stake in OpenAI. Like, I have no clue what's happening. I have absolutely, this is more convoluted than the nonprofit for profit structure of OpenAI itself.

16:48I mean, they made a great video. I think, actually, do you think they'll work well together? Or do you think like a year from now, Johnny Ive suddenly just back at love from and and not no longer showing up with Sam and instead of products and products and products and products, maybe we get a product? Well, I think so. This is interesting. The I was in Silicon Valley all week. The perspective on this, because everybody was talking about this, was that Johnny Ive is a washed up designer whose best years are behind him and he's lost his fastball. That's what people were talking about. Seriously, that's what people were talking about.

17:25And truly, what has he done since he left Apple? Do you remember the - That's a fair criticism. Yeah, do you remember the gold Apple Watch? Yes, yes I do. Because if listeners remember when - Actually, that's a good point. I'm trying to think now what the last - Because the Apple Watch became a runaway success, but it became a runaway success not in line with Johnny Ives' vision. His was really about making a fashion item. There was like a$10 ,000, maybe it was Hermes, like gold Apple Watch when they launched. It was supposed to be a fashion device. And as I look at my wrist at this big, clunky, ugly Apple Watch Ultra that's an amazing computer on my hand.

18:06You guys, there's still good stuff happening. It's certainly not a fashion item. So you're right. What was the last? Was he? Wait, wait. There's a second part of this, which is that maybe him like, you know, Johnny might need a Steve. And I'm not saying Sam Altman is Steve Jobs. But when you pair a great designer with a visionary tech leader, and I think like for all his faults, we can say Sam Altman is. And if you say he wasn't like, come on, the guy did popularize generative AI. So I think that pairing is something that can actually lead to some good stuff. Now, the only thing is, they're both kind of intuitive.

18:52You need an operations person. And Johnny and Steve had Tim Cook. And so who do Johnny and Sam have? Maybe it's Fiji Simo, like we talked about, the former Instacart CEO or the soon-to-be former Instacart CEO who's coming to run applications. But again, that's applications and not devices. So I think that this is a pairing that has more potential than a lot of people realize, but also one that's highly combustible. All right. I like that kind of like framing. Yes, you're right. That pure design without the more kind of like product vision element was lacking. I mean, we've certainly been lacking at Apple over the last few years.

19:35and that's what made the Steve and Johnny combo that powerful. I mean, it's also nice to remember, like imagine just having a company where your stock's worth$300 billion and then you can make these big splashy acquisitions that are just all convoluted equity movements as opposed to any cash exchanging hands. Yeah, definitely. That would be nice. That's nice. Yeah. So, all right, I want to ask you one more question about this then we move on to the Apple glasses. and that is we kind of like to do try our try our marketing hats on and think what would what we would do if we were an ad agency just a quick thought ranjan about the reveal of this partnership and the fact that like they took this photo together that kind of looked like a wedding invitation and just kind of gushed about how much they love each other in the videos what was that i mean what was your read on that like you must have some perspective on what whether that signals something or what we can think about this or just a general take on it?

20:34I'm glad you asked. I knew this was coming. Yeah. I mean, of course I had thoughts on that. It just felt very navel gazing, inward looking, kind of like narcissistic to put it bluntly. Like this was an opportunity to more share this vision of the product. And even though they're not going to say what the product is ambient computing, AI everywhere in your life, like really making it more about that rather than like the bromance, I think would have made more sense. I think, again, and it was a very well shot video, very high quality. I watched a little bit of it, didn't make it through the whole thing.

21:19I think it just kind of felt like this was about them and they drove the entire communications rollout of this versus this was an opportunity to really push the vision of ambient computing and how open AI fits into it. And it wasn't that. What about you? What's the deal with all these ambient computing devices rolling out with some crazy hype video that ultimately dooms the project because of inflated expectations, which is what happened with Humane and Rabbit? That's a good point. And at least they didn't make, okay, maybe to their credit, maybe they watched those and they're like, let's not hype the product side of it and just make this about Johnny and Sam.

21:58But yeah, overall, it was certainly cringy. But I guess maybe after Humane and Rabbit, I don't actually know what other direction I would have taken. Maybe, you know what, they should have just kept it relatively quiet. It was a press release and a headline. Everyone thought about it. And then they built this damn product. Here is my Galaxy Brain take about this. OpenAI is trying to move to this new structure. In fact, it's decided on a new structure. And that means it's likely to IPO sometime in the next couple of years, you would think, given the amount of money they raised. I think they do quite well as a public company.

22:33If you go on your roadshow saying Johnny Ive is here to build a product, this mystery product, I think they want it to happen next year. I'm calling that it's not going to happen next year. And it could add a trillion dollars to our market cap, which is what Sam did. I mean, think about how many trillion dollar companies there are, period. And that's what he's saying. this just increases the valuation you get in your exit. I mean, okay, I think that's fair. And again, how do you value a device that doesn't exist or no one knows what it is? Probably pretty high if it involves Johnny and Sam. So I can see that.

23:05I can see that. But to me, like the big takeaway here is that I still, no matter all the things that we can say about it and all of our doubts, I still think that this is, like you're saying, this is the direction that tech goes, that AI goes. yeah exactly i maybe it's hopeful but i also genuinely believe this is where things are going and they are positioning themselves to compete certainly in that space in some way and no one knows exactly what it looks like maybe it's glasses maybe it's more watches maybe it's my aura ring that i just bought it's not going to be aware now yeah that's the news is this won't be wearable but you can put it in your pocket Maybe it's like a little voice recorder.

23:51What's the Tamagotchi? That's basically what we're going back to. I kept mine alive for like 20 days. That's actually the real game. Exactly. Keeping it alive. So talk a little bit about this Apple Glasses push, because this sort of plays in exactly to what we're talking about, about where the future of computing is heading. And should I say finally? I don't know if it's finally. they have the HomePod. But finally, it seems like Apple is really going to push forward into a smart device that you wear and is AI first. Yeah. So Apple, they're aiming to release new smart glasses end of next year. We've been waiting for these glasses for a long time.

24:34If anyone should have been early, it should have been Apple. There was a lot of talk before that it would potentially be a smartwatch that would analyze your surroundings. It might have a camera, that there'd be other form factors, but I am a full-on convert to glasses. I'll admit, I think it's just such a natural way when you're in motion, not sitting in a meeting, not sitting at dinner. So maybe that does limit the utility of it, but in motion, not looking down at your screen and having a pair of glasses on, I think it's already here. So Apple really needs to compete there. So one question about this.

25:12The story says, this is from Bloomberg, Apple's glasses would have cameras, microphones, and speakers, allowing them to analyze the external world and take requests via the Siri voice assistant. They could also handle tasks such as phone calls, music playback, live translations, and turn-by-turn directions. Again, this is only going to be as good as the AI assistant, so I'm not getting as excited as I think I should because of what we know is inside. I'm not remotely excited about this because until they fix Siri, I completely agree. It's just not even a, it's not a starting point. Again, the idea, like I was reading something about how like more than ever, Apple needs to buy Anthropic.

25:53It's the most logical thing imaginable. They're having trouble on the consumer side. They have to fix the underlying. Actually, there you go. That's your place where it's the model, not the product. when it comes to Apple. Yeah, because better models lead to better products. But anyway, we can debate this for Apple. Just, you need a baseline model and they're not there. That's all, that's all. They'll have the application. I mean, overall, like, I was just thinking about it because I got a new MacBook, of course, even though I'm talking shit on Apple all the time. And like seeing Keynote and Pages and Numbers pop up remind me that Apple has not always been an application powerhouse.

26:34And I guess that's the thing about AI right now, that it is such a combination of the compute, of the model, of the product, of the application. You have to get the whole thing right. And OpenAI has done very well on that. Google is getting a lot better at that. But you can't just depend on one part of that stack and hope for it. Definitely. All right, so speaking of Anthropic, we should talk about Cloud4, the latest model that it released. It released it this week at its first ever developer event called Code with Claude. I was there. Thank you, Anthropic, for having me in. Basically, last minute, I was able to squeeze into it.

27:15And so this is from CNBC. Anthropic, the Amazon-backed OpenAI rival, by the way, it's backed by Google also, launched its most powerful group of artificial intelligence models yet, Claude 4. The company said the two models, called Claude 4 Opus and Claude Sonnet 4, Claude Opus 4 and Claude Sonnet 4, are defining a new standard when it comes to AI agents and can analyze thousands of data sources, execute long-running tasks, write human quality content, and perform complex actions per release. I was at the event. They said these things can code autonomously for six or seven hours, and that's just one.