OpenAI’s New Model, Jensen’s Bold Claim, Alexa+ Is Here

28:24Have you used it recently or? I have not. The text to video or image to video model, that one definitely went nowhere, could have been a good product demonstration. I think overall they are making this bad. It's what we keep talking about, but it has to be, GPT-5 has to be, oh my God, this solves everything. Like this is where there's no hallucinations. It's reasoning. It's a huge foundation model. It's relatively low cost somehow. I think it really, the way they're positioning their entire business is that it's going to be the kind of silver bullet to everything. Otherwise, I really don't see again at the zero moat part of it you're seeing more and more and that which is to me maybe that is why they push so hard on these constant model releases because they have to stay relevant because the moment they're just an API in the background then you're the most commoditized thing imaginable and then then that will kill you anyway so that's a pretty compelling case right there.

29:31Yeah. And I think that one point I think that I should make here, and I did speak to one more point about the market interview. I spoke to him about starting and stopping. And he said, that's a normal part of training any model. But if you're starting and stopping on a model that's this expensive to make, then your costs go way up. So I think Gary is right that the errors or whatever, the changes, the tweaks that you have to make become very expensive tweaks when you're starting to work on projects this size. Yeah, the cost of the model training, and we're going to get into how Anthropic, supposedly the new Claude, was much less expensive.

30:08DeepSeek, we know whatever, whether it was$6 million or$60 million or whatever it was, was significantly less expensive. I think overall, you have one side of the industry showing us that it actually can be cheaper and cheaper and cheaper. But then those with the best interest, remember OpenAI's competitive advantage could be talent to an extent, even though a lot of talents left, they have a pretty deep bench that's pretty impressive. Or it could be resources, cash, and access to compute. So they almost have to make that their game because if that's not their game, they're not going to win. If that's not the game, they're not going to win.

30:48Yep. So we talked about the competition you teased Anthropic. We have so much more to talk about, including the new Anthropic model, what Jensen Wong has talked about, how expensive reasoning is and NVIDIA earnings. And of course, the new Alexa. We're going to do that 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.

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32:38We're back here on Big Technology Podcast Friday edition, talking about all the latest AI and tech news, including the fact that Anthropic has a new model. Jensen Wang has a stance on how much compute reasoning uses, and the new Alexa. And by the way, Skype is dead. So let's see if we can get to that all in the second half. The first is that GPT 4.5 wasn't the only model here. We have Anthropics Cloud 3.7 Sonnet. It's here. This is from TechCrunch. Anthropics is releasing a new AI frontier model called Cloud 3.7 Sonnet, which the company designed to think about questions for as long as users want it to.

33:15So like we've been talking about, it's a hybrid AI reasoning model, a single model that can give both real-time answers and more considered thought-out answers to questions. And you just choose, do you want the quick response or do you the thinking response and the model represents Anthropik's broader effort to simplify the user experience around its AI products. We're longtime claw heads, I would say on this show. I've gotten a chance to use it. You've gotten a chance to use it. I believe the thinking toggle that we talked about is pretty good. It's almost as good as deep seeks. What is your response that we have another model from Anthropik and the fact that we went not from 3.5 to 4, but from 3.5 to an incrementally better 3.7 what about 3.6 i was waiting for 3.6 that was going to be the big one but we just skipped straight ahead to 3.7 baby i think i've been using as a clodhead i've been using 3.7 regularly on again from the model side it doesn't the the thinking toggle mode which i'll still categorize a bit as product.

34:27Maybe that one lives between product and model is good. Claude Code is definitely a very new offering from them. And I think it's going to be very interesting because still coding to me is the most monetizable, direct to actually productive use case for generative AI as of today. So I think the way they approach this is kind of how I want these model launches to be approached. There's a blog post, there's some tweets, you know, there's, there might be an explainer video here and there, and that's it. And, and we keep getting improvements. And as we wait for 3.9, maybe not 4.0, because that's AGI probably.

35:094.0 is AGI. So yeah. So I will say just having, we're going to get into how they trained the model because it's interesting. But I will say I did an experiment this morning where I've been using, I mean, I think I've mentioned this on the show. I've been using Claude every day as a diet coach where I basically like write down the meals I've had, weigh in, will give me how I did a letter grade based off of the prompt that I gave it about the way that I want to be eating. And it will like count up the calories and grade the foods. It's very good. And it has lots of memory. And so I like, I copied the history, which goes back like probably a month and a half at this point in the latest chat and dropped it into OpenAI's GPT 4.5, Claude 3.7 reasoning, and DeepSeek.

35:53And unfortunately, I'm here to report that DeepSeek did the best job of all of them. You didn't try Grok and have it yell at you and make fun of you? No, I'm good on that. Thank you, though. I think, see, that's like, to me, I want that as its own standalone benchmark. The Alex, what did I eat benchmark that is the leading benchmark for all frontier models going forward. I mean, that's the real life stuff that's actually interesting to me. I do that very regularly. I'll have three tabs open, try the same question across three and see what I get a good answer on. Those are the use cases and the kind of ways that I think everyone, all of our listeners, like approach these models in that way, try different models and try the same question just see what happens and see what you like better i think that's the real way to try to decide what's really happening in terms of progress here versus the more theoretical stuff can i just say one of the big takeaways for me this week is just that reasoning is just freaking unbelievable like it's a true breakthrough and when you use those models you just get better stuff and that to me has been sort of like i think discounted i think in some of the conversation here, but not in our show.

37:10I think we've already always talked highly of reasoning, but in the broader, like the walls hit open AI's toast, like reasoning is both useful and better. I'll agree it's better, but it's still better for many things, but not all things. Again, simple queries, a back and forth, analyze this text, something that's like where all the information is right there in front of you and doesn't require a great deal of complexity, you don't need reasoning for that. And that's more expensive or that's more complicated or it's more time consuming. So I think I agree. I'm still wowed, but there's also the UI element of that, that DeepSeek, again, listing out the questions of the chain of thought as they're coming up was the kind of using the term party trick again, but it just UI feature that makes it so much more real.

38:03And now everyone's doing it. It's amazing how quickly, sometimes it's almost annoying now on ChatGPT where it starts walking me through what it's doing. And now it's thinking when I actually don't want it to, when I'm like, I'm good. I'm good. Just give me an answer. I'll take a little, I'll switch to another tab and come back. It is like your very talkative friend who's like, let me tell you exactly how I got to this. And you're like, nah, it's good. We're just going to go with your answer. I'm going to start on this tab and then I'm going to go here. It's almost, I want like the log afterwards if something's wrong to go back.

38:38But we've talked about this before. The problem that remains is if something is broken in that reasoning process, you can't simply fix it. It's not like I go back and I'm like, okay, on step three of eight, I would rather you have done this than this. That does not exist yet. So at that point, the reasoning is nice, the show of reasoning, but it's not actually, you can't utilize it in any meaningful way. That's fair. So Ranjan, I want you to talk a little bit about this cost efficiency that Anthropix seems to have found in training 3.7, because I think that's pretty significant when we think about how these businesses will operate and whether they need to spend as much money as they are training their latest models.

39:27So on the cost side, 3.7 sonnet, it apparently costs just a few tens of millions of dollars to train. We already talked about DeepSeek. I think, again, it goes back to showing like, what are the real costs involved? There's gathering up some large amount of data. If it's a reasoning model, there's a supervised fine tuning side of it. There's a reinforcement learning side of it, that could involve bringing lots of humans. And again, that literally is like, what is the correct way to get to this answer? Is the answer correct? What rank these outcomes and actually going through hundreds, thousands, tens of thousands of times and training the model that way.

40:10Obviously that's time intensive and it's expensive, but I think it's important to recognize that even Anthropic who has kind of been in the whole big models, expensive models game so far, the fact that they are moving towards this, it almost means, I guess, OpenAI is probably the only player left that's still kind of trying to sell. You need big expensive models to win. So then what do you think about this comment from Jensen, where he talks about, now we're going to go to reasoning and inference, and that's going to be more expensive. So Nvidia earnings came out this week. So they had revenue jump 78 % from a year earlier to 39.33 billion in the quarter, they're projecting 43 billion in the next quarter.

40:57They had they delivered 11 billion of their Blackwell chips. So life is good for Nvidia, but everyone's getting the sense as to like, how is your business going to look if we get more efficient if we go toward these reasoning models. And this is a very interesting statement from Jensen Wang, where he says, AI has to do 100 times more computation now than when ChatGPT was released, basically talking about how the reasoning approaches are more expensive. Next generation AI will need 100 times more compute than older models as a result of new reasoning approaches that think about how to best answer questions step by step.

41:34The amount of computation necessary to do that reasoning process is a hundred times more than what we used to do. So it is interesting to me because, I mean, you look at what DeepSeek did and they found a way to not only do reasoning, but do it more efficiently. And Jensen is saying this thing that seems to disagree with this a little bit. Well, I'm curious what you think, Rajon. I mean, never to speak ill of Jensen Huang. I think he's saying what he needs to say. I mean, if the thesis that things are going to get much cheaper and require less compute holds, we could have the Javon's paradox, which I haven't heard in a little while, but we all heard about that one week.

42:21Again, the idea that the more ubiquitous AI would get because it's cheaper would actually require more aggregate compute. But it's, I mean, it still feels like NVIDIA has to tell that story. And I'm, again, the company blew out numbers again. And even though it's getting caught up in the larger stock market route as of today, but this is still an insane company in terms of its ability to produce and deliver, it still hurts their longer term story, at least with the expectations that have been set by the market. it. Yeah. I mean, it's just one of those things where I'm like, I see his logic and I see where he's going, but I don't really see how, I mean, yes.

43:02I mean, they've talked about how inference is 40 % of their revenue, but I just don't really see how it's going to cost a hundred times more to do reasoning. Maybe I'm missing something. No, I think it's very difficult to try to calculate out? Because even, I guess, the more complex the use cases get, and maybe we'll start unlocking use cases that we haven't even imagined, or AI is going to be applied to areas where we haven't even started to, and those will be the ones that really soak up all that compute. But I agree with you that the idea that it's going to require a hundred, it's going to a hundred times more compute, especially as the trend is everything's getting cheaper, doesn't make sense to me either.

43:51Let me ask you this one thing that I saw from earnings. And I'm curious if you think that it's right. I mean, the fact that they shipped 11 billion in Blackwell chips, the expectation was like three and a half billion. So clearly there's a huge amount of demand for the Blackwell chips, which are the latest generation of NVIDIA chips. All the hyperscalers are saying we'll take as much as we can get, including Andy Jassy at the Alexa event this week. Does that show that there's already enough tangible process. Sorry, does that show that there's already enough tangible progress within AI that merits this further investment of chips?

44:25Or do you think we're just still in the finding out phase? You never want to be in the find out phase. I think we all know what happens after. But I think from the hyperscaler side, it's still like no one backed down from actually Microsoft a bit seem to hedge. And I believe there's some reporting that they're canceling some data center leases. But overall, the hyperscalers are playing the same game that we're going to, it's an arms race for a compute and we're going to continue down this road. And we're going to get into the Alexa event. Maybe it does start to seem like the more complex Alexa gets.

45:05If every single person who has an Alexa is actually actively engaged all day, with Alexa plus, then you start to see that, okay, it's going to require a lot of compute. So if those, like, if it really lands in the way that it's being promised to, maybe that does make sense. But I think as of today, it's just, everyone is to, all the hyperscalers are taking the exact same bet. Right. So we're still in the like scale up infrastructure and maybe this will work not, and this is working enough that we're going to keep investing. Exactly. So I think that, I mean, I am still, I'm still bullish on NVIDIA, but I think if you take this kind of like dubious proclamation about reasoning being cheap, being much more expensive, combined with the fact that like, yes, they're still ordering, but you know, there's a big if at the end of the tunnel.

45:55I do wonder a little bit, like if there's like a potential nasty surprise for NVIDIA coming in a couple of years. No one ever won that prediction in the last few years, at least. But I'm not disagreeing with you, but it's one of those things that it's almost, I'm almost like fearful of saying out loud. Yep. I'm sure I'll eat the words there. And maybe Mark Zuckerberg will be the one that continues to keep NVIDIA running, taking all that ad money and pushing it right into this chip and server company, right? Because now Facebook is going to potentially spin off a Meta AI app in an effort to compete with OpenAI's ChatGPT.

46:35This is according to CNBC. Meta AI will soon become one of the social media company's standalone apps. Joining Facebook, Instagram, and WhatsApp, the company intends to debut a Meta AI standalone app during the second quarter. Of course, they're going to have all the app install power that you have on Facebook to get people to use it via their ad slots and news slots they're going to put in. And Mark Zuckerberg is really intent on basically taking over OpenAI's lead with ChatGPT. He sees it. We've talked about it in the past. He sees this as a big consumer app. He sees that it's growing fast and he doesn't want somebody else to do it.

47:10Same way that he sort of cut off Snapchat and did it with some success against TikTok and Reels. Very funny response from Sam Altman when he sees this. He says, okay, fine, maybe we'll do a social app. He says, it's funny if Facebook tries to come at us and we just uno reverse them. It would be so funny. I mean, I think he's, you get that response from Sam Altman when he's not completely sure of his footing. And I don't really feel that he's sure of his footing against this one because you don't want to go up against Facebook when it comes to a consumer app. It doesn't usually end well. So what do you think, Rajan?

47:46I think that I'd actually, it's been so long since I played Uno, I had to look up what Uno reverse was first. I was like so surprised. I was like, what are you, Uno reverse? Who speaks like that? But anyway. Sam Altman speaks like that. But the same guy who's coming up with everyday queries for our AI benchmarks. But I thought this was a very interesting one because I have been using meta AI more for image generation just because it's very easily accessible. And it's still in a weird place because it lives in the search bar for Instagram and WhatsApp or Facebook. and living in the search bar. I've also accidentally used it when I'm searching for something on Instagram and somehow it pushes me towards meta AI and gives me a weird chatbot response.

48:36So I think spinning it out is a very interesting idea. And then being meta, they would be incredible at quietly guiding people towards that app from all of their other apps. But it's still, is it needed? Is there other ways to integrate it more as a tab in existing Facebook Blue and Instagram itself? That part, I would think it would just be another tab on the regular app versus having people download something. But I see this one as another threads. They'll get some big numbers, but I don't think it's going to be anything too impactful. Yeah, I don't think it's going to work. I would like to see an open AI social network and not for nothing, but open faces out there for the taking.

49:28The AI first social network where all of your posts are commented on extensively, where you have a million friends who are all fawning and love you very much. I think they could go down that road. Open face. Open face. open face i'd be day one user social networking needs like an entire remake and maybe sam altman is the one to bring that to us i mean if anybody can do it maybe it is open ai they're the best product in ai so yeah you don't even need a better model for that i'll give you that ron john that's the product that we've all been waiting for so we got about 10 minutes left and i've saved this for last and I don't want to spend too much time on it because I am going to have a podcast next week covering it.

50:20But Alexa, the new Alexa app is out this or it is not out has been introduced the new Alexa revamp. It's called Alexa plus it is conversational. It is able to accomplish things in the real world. It seems to have an awareness of what happens between your Amazon services. So you can ask it to play a song and then say, all right, can you take me to a point in this movie. That song is on and it will do that based off of Amazon Prime Music and video. It will search your ring cameras for you. It will potentially order you an Uber. You can use it to control the sound in your apartment if you have echoes with conversational tones like, can we have this song play in that room or can I want to hear it over there?

51:05it was a very impressive, very impressive demo, I felt. And it was live, unlike Apple Intelligence, where Apple Intelligence was a promise. And it seems like a lot of this Alexa stuff is going to work. So I do want to do this preface that we're going to have Panos Panay, along with Daniel Rauch, the head of Alexa. So it's going to be a fun conversation that's coming up on Wednesday, you're gonna hear a lot more about that. But Ranjan, I'm very curious, like, what your reaction was in our chat, I think in the discord, you dropped this, uh, German tweet where he talked about how like this was chat GPT voice on steroids and, uh, Apple has to be embarrassed at this point for how bad, uh, Apple intelligence is.

51:46But what was your takeaway looking at the Amazon news? And, uh, and if you can, if you want to, I'm just going to say, if you want to, you can say what it might mean for Siri? Oh man, I spent so much time rewiring my entire house for HomePods and I watched that event and I want to just go back. I want to switch all to Alexa and I'm sure we'll definitely talk about it more after your next episode, but like it looked good. It looked exactly like what it should be. It looked like putting chat GPT voice mode on a device or Gemini voice on a device or just what basic voice interaction should do right now.

52:32And I'm avoiding hitting my table right now. So there's feedback on the mic because you can tell I'm worked up right this time. I'm just telling me, sorry, listeners. Oh my God. Like that's all it should be doing right now. And it did what it's supposed to do in voice. We know generative AI voice is that good right now. I think the only thing that I think could be a little problematic for Alexa Plus is like Amazon does not have a great reputation in terms of privacy or just overall, like it can still be a little creepy. The reason I got rid of my Lexus was it would always ask these follow up questions, which you could not turn off.

53:13You'd be like, what's the weather? Oh, here's the weather. And can I interest you in these three other things? And you couldn't turn it off so i think i mean the way they portrayed it becomes your like really trusted companion that you're sitting there sharing yourself with that's a big ask in terms of trust so i think in terms of the technology i'm pretty confident they're there in terms of like getting people actually comfortable with interacting with your voice device in that way we'll see but But man, it's going to cost me a lot of money. So yeah, we did talk about it yesterday. I'll just give a quick preview of what this is going to look like.

53:51I mean, we talked about it yesterday. And they are aware that the talking back to you and being proactive can be pretty interruptive and annoying. And I think they're paying attention to that as they roll this out. So that'll be at the end of the conversation for those that listen. But yeah, I thought it was really interesting. I think Amazon has a shot here. I wrote about this in Big Technology that basically all big tech companies want to build a universal, contextually aware assistant that helps you get things done. And Amazon has a pretty good shot to be the one that pulls it off, especially because they have a working demo of this and it seems like it's going to go live next month.

54:31And I don't know. I mean, they don't have an operating system, which is on one hand, they don't have a mobile operating system. On one hand, that's a curse because that default matters a lot. We know Google pays Apple$20 billion a year to be the default search engine on the iPhone. However, that does let them use other productivity services and not privilege their default. And I think these companies privileging their default productivity services have been sort of the downfall of the modern AI assistant. Like if I'm using an iPhone and I can't use Google Calendar or Gmail in there because Apple is so dedicated to whatever, Apple Mail, that ruins Siri for me.

55:13But Amazon doesn't have that problem. And so I was speaking with actually the head of Prime who was mentioning that, yeah, I use my Google Calendar in my Echo devices and it works just as well. So that could be a blessing for them. Yeah, I 100 % agree. Though, speaking of Prime, the way they rolled out the pricing, I think was the most like savage and amazing Amazon move ever. Again, I forget what the monthly subscription is. Is it like - $19.99. Or was it$14.99? Let me see. It's something that most people would not pay as of today. But as an Amazon Prime member, you get it for free. So it just kind of like assigns this additional benefit to being a Prime member, which if you're a Prime member, you shop on Amazon X percent more.

55:59So they're going to kind of assign this incredible value to it on day one. And you're going to feel like, oh, well, now if I was questioning, should I renew my Prime membership? Well, it's a gimme. I mean, I'm getting Alexa Plus for free. Ronjan, listen to this. Alexa Plus costs$19.99 a month. Prime costs$14.99 a month. Oh, wait. I thought it was free for Prime. No, if you have Prime, it's free. So basically you could pay an extra$5 to just get Alexa Plus or five less dollars to get all of Prime and Alexa Plus. Oh, okay. That is savage. That is savage. I mean, if Lena Kahn was still around, I don't know what she would say, but my goodness.

56:42But she's not. But she's not. Okay, before we go, we need to talk about Skype. Microsoft is killing Skype. This is hot off the presses and makes me very sad. As from TechCrunch, after kickstarting the market for making calls over the internet 23 years ago, Skype is closing down. Microsoft, which acquired the messaging and calling app 14 years ago, said it will be retiring it from active duty on May 5th to double down on Teams, Skype users of 10 weeks to decide what they want to do with their account. It's not clear how many people will be impacted. The most recent numbers that Microsoft shared were in 2023, where it said it It had 36 million users, a long way from Skype's peak of 300 million users.

57:29We do look at tech with a critical, sometimes hopeful eye. I will say that Skype is one of the products that I've loved the most on the internet. I just have good feelings about it helping me make international calls and calls to friends. And you could play different games on it back in the day. And that little squeak that it makes when you get a message will forever remain in my heart. Rest in peace, Skype. We bury you the week after the Humane pin. goes the way of the Neanderthals. And I'm much sadder about losing you than the wearable AI device. I had my first remote job interview on Skype.

58:06I agree. International calls. It opened up the world. Sold for$8.5 billion to Microsoft in 2011. And sorry you had to get caught up into a corporate battle with Microsoft Teams that clearly won and ended up basically, I think the last few times I ended up on Skype, I had all these messages that were clearly phishing and scam things that were just barraging my Skype account and did not open it after. Goodbye, Skype. Goodbye, Skype. And goodbye to all of you. But just hopefully for a couple days because I'll be back on Wednesday with those two Amazon executives and Ranjan and I will be back on Friday.

58:47Ranjan, thanks so much for coming on the show. See you next week. alright everybody thank you for listening and we'll see you next time on Big Technology Podcast