OpenAI’s Turmoil Rolls On, Apple Under Siege, Bitcoin Hits $70,000

29:55Like an example is Spotify, like Spotify can't steer people to ways to sign up for premium outside the app or show discounts and stuff like that. Apple basically wants them to use the Apple Pay, but Apple's in-app payments. Spotify's not playing ball. And there's this big disagreement between Apple and Spotify. Apple's like Spotify has gotten distribution. They've gotten everything for free. They're ungrateful. And Spotify is like, you wouldn't have a phone without Spotify. People use their phones for music. You're privileging Apple Music. You're not making it possible for us to compete. You're putting unnecessary restrictions on us.

30:30And those are eventually hurting the consumers. And the EU found that basically in Spotify's favor, I agree, actually. I think that Spotify has a really good point here. If you're thinking about the user, you should allow these companies to steer them to the place where they can get the cheapest price for a subscription, especially if they're paying off app. What do you think? Yeah, Apple, there's been a bit more conversation around, is Apple the most evil tech company? And it's a tough one because I think Apple's built-in advantage has been people love their products, myself included, and they work well and they make you happy.

31:10So it's hard to think of them is evil and tim cook's i think personal pr is better than a lot of other tech executives but in terms of exercising market power as an apple user it gets annoying how they do it so often because again i think spotify is completely in the right that you know apple because they have a competing product that they push so heavily across all their different platforms and channels that, you know, every time I try, if I use Shazam, which they bought to recognize a song, it will try to push me to Apple Music to start a free three-month or six-month trial. Like they exercise, you know, they flex the ecosystem all the time.

31:59And I think it's in a way that's detrimental to competing products and it's bad for the user in the end. It's just hard for most people to see. Yeah, I think you hit on something that's really important here. is just like the reputation of Apple. And do they risk losing some of those reputation points as the state's person of the tech world and the diplomatic tech company, especially given you're having these fines in Europe and then they're going to do whatever they can to fight the regulation that's coming. So there's this act in Europe that's going into effect called the Digital Markets Act, which basically is supposed to level the playing field for companies that are competing with big tech.

32:43And one of the things that it allows is for companies to build their own app stores on locked ecosystems like Apple's. And as this is about to go into effect, Apple removes Epic Games iOS license, so a developer license. And it sparks this whole flood of criticism. So you have, for instance, Paul Graham saying, we don't think about Apple being evil. It would be so inconvenient. We don't want to switch to Android, but I see ever more signs that power has corrupted them. And then you have Kate Klonick, who's a researcher, quote that post on X. And she's a respected researcher. She's written about like the oversight board for the New Yorker.

33:28And she goes, Apple is the North Korea of tech companies, which to me is totally insane. I think I'm going to give them a bit more credit in terms of like global oppressive superpower rather than small rogue state here. So I'll disagree with that. But but I this has been I've been thinking about this a lot more in recent times because I even tried subscribing to Apple one briefly and then on principle would not. I think also because I tried Apple Arcade and Apple Fitness and they just were not very good. So I figured even though they would marginally only cost me a few more bucks a month, it wasn't worth it.

34:08But literally, Apple won the service where you can get your terabytes of iCloud and your arcade and your fitness and your news and everything for one low price. It's literally the definition of bundling and then having competing services against so many other players in their app store and ecosystem, but then undercutting everyone on price by bundling it together and building it into the actual infrastructure of your phone because you can subscribe from settings and all these other places, not just the app store, I think is very problematic. And these are the kind of things I kind of had hoped by now that the FTC and others would have successfully tackled.

34:49But knowing that the timeframe on these things is a lot longer, I don't know. I'm glad at least we're talking about it. I think people are talking about it more. And I think that's a good thing to have some check on this. And, you know, obviously, Apple's paying attention here because it realizes that its reputation is at stake. And late breaking news as we were about to go to hit the record button this week. This is from Mark Gurman from Bloomberg. New Apple reverses course unbanning Epic. Following conversations with Epic, they have committed to follow the rules, including this from Apple, including our DMA policies.

35:24As a result, Epic Sweden has been permitted to re-sign the developer agreement and accept it into the Apple program. I mean, to me, it's also just like, who are you trying to fool here? Like, it's not that you just like sat down and had a productive conversation with Epic and they said, oh yes, great Apple, we will follow your rules and you let them back in. Like clearly some of the public pressure had an impact here, don't you think? Do you know what I wonder is, are we gonna learn more about the personalities and people behind Apple's policy division and lobbying groups. Because if you think about it, Meta, there is a why.

35:59Even right now, Nick Clegg is very public. Elliott Schrage, I think it was back in the day, sitting behind Mark Zuckerberg, even Sheryl Sandberg herself, hiring external sketchy PR for lobbying firms. Like Meta, everyone knew what was going on with the whole lobbying side of it. But Apple, like something like this to, you know, ban them and then unban them. There's a lot of people involved there. And I'm sure there's a lot of interesting personalities and backgrounds there that it's surprising to me. I could not, I've never heard about or seen profiled even one person kind of pushing on this stuff for Apple.

36:40Here's why I don't think that's the case is because Apple doesn't do content moderation for the most part. I mean, of course, it does a little bit in its app store, but it's not in the content game. And it's another thing about, you know, Paul Graham, who run Y Combinator, founded Y Combinator, basically said, like, you know, helping startups accelerate building companies, no problem. It was moderating the Hacker News Forum. That was the hardest job for him. And Apple, you know, has a way of staying out of these, you know, sort of firefights because it doesn't have content to moderate. And I think that it can basically, and so therefore it basically doesn't have to speak about content decisions.

37:16It rarely speaks to the press about anything of consequence, maybe sometimes about its products, but only to friendly reporters. And so I think that we will not see the same sort of celebrity mid-level lobbyists coming out of Apple as we did with Meta. All right. That's okay. That's a very good point. And I guess, you know, Epic versus Apple, the only emotional attachment to it really is at the, you know, like executive level within those companies. The rest of us are just kind of watching versus, you know, content moderation when it's political, religious, personal. It's obviously there's a lot more emotion tied to it.

37:56So, all right. That makes sense. But I want to know if anyone listening is wants to cover this stuff, I would be happy to read. Yeah, definitely. No. Well, yeah, our listeners, we get it. We get good feedback from our listeners, including Major League Baseball. But we'll keep that. We heard from Major League Baseball after our pants segment. And it was a great conversation. I think we'll continue it. So let's talk quickly about something that Chamath, Paliapatiya, the VC, SPAC guy, etc., etc., said about like thinking about a positive angle or positive area that Apple could go in. And this stuff they've been teasing about AI and their WWDC announcement coming later this year.

38:45He said something pretty interesting that I think is worth bringing up because it could be a very interesting area for Apple to play in. He says, thinking out loud, what if Apple offered a massive data center complex of next-gen AI hardware, running every major open source foundational model and lightning fast inference to all their developers? It would be hugely disruptive and could build a new line of services revenue that could grow to be huge. basically turn yourself into an infrastructure player in this AI war, allowing companies to effectively run these models on device? I think my initial feeling there goes to, until they fix Siri from being the hot pile of garbage that it is, I still refuse to trust anything about generative AI from Apple.

39:37However, I do think they are in a very interesting position right now because they have not established what their play is. The electric car, especially, you know, we've all read that, you know, shutting down the electric car efforts and moving a lot of those employees over to generative AI. What does their generative AI efforts look like? Is it going to be some consumer facing stuff? Is there going to be something completely unexpected? As you said, the on-device ability and trying to translate generative AI to their tens of hundreds of millions of iPhones in some innovative way that's more efficient, I think, starts to get interesting.

40:19So, yeah, I think it's still a blank slate right now of which direction they're going to go. And this certainly could be one. Yeah, I think Chamath is right, honestly. I think this is what it's going to be. So overall, I would say state of Apple right now is troubled, but there is, I mean, it's still the giant that it is and there's hope for some growth there. They put all the AI engineers from the car on this Gen AI program. Better be something good. So just fix Siri. I'll say it every week. Just fix Siri. I mean, I think it's coming. I don't know. I don't know why I'm optimistic here, but I think it's going to come.

40:57Okay, let's take a quick break. We're going to come back and talk about the TikTok band's potential. And of course, about Bitcoin hitting 70 ,000. Let's go. All right, back right after this. Did you know your credit card points and miles can lose value to inflation? Credit card companies often reduce the redemption value of your points and miles. Now, imagine a credit card with rewards that can grow in value. With the Gemini credit card, you can earn Bitcoin or one of over 50 other cryptos instantly with no annual fee. Every swipe at the store or gas pump earns you instant rewards deposited straight to your account.

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42:14You'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.

42:41And we're back here on Big Technology Podcast, talking through the week's news. Big news story this week is that the TikTok ban, which seemed far off and impossible for so long, now seems like there's a chance it might happen. We can go with the news story, but I think Gene Munster, who's an analyst, wrapped this up pretty succinctly and very interesting in a very interesting way. He says the probability of TikTok getting banned in the U.S. just increased slightly. The House Energy and Commerce Committee voted 50 to nothing to advance a bill to require ByteDance to spin out TikTok or be banned in the U.S.

43:18While this was not a formal House vote, it's almost unheard of to see a unanimous committee vote, which speaks to both Democrats and Republicans support getting tough on TikTok. And now this is, I think, the most interesting part of his thing. He says, a campaign launched by TikTok to influence Congress backfired because it showed the influence it has on the youth by getting them to take action, contact Congress. The flood of calls opened lawmakers' eyes to the power of the platform. them. So basically what happened was, you know, they vote 50 to nothing to, you know, advance this bill. And then TikTok set off this notification within the app.

43:58And next thing you know, Congress is flooded from calls with middle schoolers telling them, please don't ban TikTok. There are some hilarious calls that like staffers have put on Twitter of members actually taking these calls and trying to explain to middle schoolers that they like want to protect their data from the Chinese Communist Party, which is to me, true comedy. They can't vote. And also, you're not going to win this conversation, member of Congress. What do you think about the whole situation, Ranjan? Yeah. So before even getting into should TikTok be banned or not banned, I think this play of theirs.

44:37So again, they had basically a push notification go out that's geo-targeted to actually present to you your local or your representative in the House or your senator and information directly to try to contact them. So it seems smart in theory. And instantly, it made me think about, were you in New York when Uber did this against de Blasio back in the day? No, actually, I think it was in San Francisco at the time. But yeah, talk it through. All right. So I remember at the time thinking, and this is like 2014, 15, maybe, but there was going to be some kind of regulation placed on Uber and they pushed out.

45:17And it was actually like from a UI UX standpoint, it was like brilliant. They pushed out, it was called de Blasio mode. And they showed people, they're like, if de Blasio's legislation goes through, this is what your ride will, it'll take 30 minutes to get a car and it will cost this much. And so you need to contact your representative and say that you're against this. And I remember friends of mine who are not into tech at all, certainly not into tech policy, you know, being in an Uber with them, then being like, Oh, did you see this? Oh, man, I should contact them. I don't want the cost to go up.

45:52And to me, I remember I was like, the power available to them in doing that when no one questioned it was immense. Like people blindly just seeing, Oh, this looks like it's bad for me, I'm going to contact my congressperson, even though I haven't thought about them in years and actually doing it and then them actually beating back the legislation. And then meanwhile, of course, Uber prices skyrocketing after a number of years and them actually becoming the monopoly they are, but that's a side conversation. But here, I think TikTok is overplaying their hand and it doesn't work any longer. And that's the biggest difference Because at that time, seven years ago, six, seven years ago, no one really processed what was happening.

46:37So it just worked perfectly. Now, not only are people on to these kind of tactics, the whole problem for TikTok is that they're being accused of potentially having nefarious influence over large groups of the population. So for them to actually then leverage that and prove that they do, in fact, or that they are able to influence large swaths of the population, I think is not going to help their case in any way. Exactly. I really like that point that effectively, like they showed Congress just how powerful they are and that might motivate Congress even further to act because they don't like having all that political power in the hands of TikTok.

47:18however I continue to stand by my stance that it's not going to get banned just because I don't just can't see Congress acting here and I'm still going with it get well and we've talked about this divesting it and again this legislation does not outright ban it even though TikTok itself has said on Twitter that this is an outright ban it allows them to divest from ByteDance but there's been endless reporting even though it's very the structure itself is opaque of what exactly are the ties to ByteDance. They insist that they're completely an independent subsidiary and their data is completely separate and management's completely separate and everything, but they would have a very difficult time divesting.

48:02But I think it goes through. I really think, especially in this election year, it's something so straightforward from both political sides that I think it can go through. Yeah. And I mean, I don't know. Okay. So the one thing that I would say in your favor is this is something that Rich Greenfield, who's an analyst at LightShed, brought up. He looked at the top charts of the App Store this week and you look at it and here's one through five. Temu number one, ChachiPT number two, Shine number three, Google number four, and TikTok number five. So three of the five China-based companies. And this is going to, I mean, at a certain point, this is going to get attention of US lawmakers, especially because art companies are not exactly allowed there and there should be reciprocity.

48:55I mean, and this is one of my favorite topics, again, Chinese tech, especially going global. And I always still find it amazing that Timu slash Temu itself does not have a clear pronunciation of its name and it's selling billions. It spent$3 billion in advertising on Meta and Google last year, we just found out. Shein versus Shine, I still hear plenty of people call it Shine. The number one in three stores in the app store do not have a clear pronunciation to the people like us who cover this stuff, I think is still one of the most kind of perfect symbols of how opaque this whole world is. And on that, I wanted to highlight one story.

49:38And I think I'm just going to introduce it this week. Before you do, I just want to say that in itself, like the fact that we can't pronounce the names is one thing. But the facts that that they're coming from a regime that's so oppressive and into surveillance is like the real problem. Right. Oh, yeah. I mean, I guess to me, that one's almost a given. Right. OK, sorry. Just clarify. Yeah, no, no. I am in no way ever under the illusion that data does live completely separately and is not accessible by the Chinese government. I think Timu, sorry, like with TikTok being owned by ByteDance, I do not in any way.

50:13And there's been a million signs that they're still owned and operated by ByteDance. like all these stories that come up out about TikTok management, they've report to ByteDance. They go to work earlier in the morning because they have, you know, to meet with the different time zones and stuff. So, so yeah, that one I'm not really worried about, but, but I think one story I really wanted to highlight this week and it's just come out, but it's, I'm going to go with Timu still, cause that's what they call themselves in last year's Superbowl ad. I'm on team Timu. It's Team Timu. So they're owned by Pinduoduo, which is the Chinese parent company.

50:52It's worth $162 billion. It's an e-commerce company started in 2015, I believe. So it was already a giant, and then Timu was their kind of global play. So Dan McCrum at the Financial Times, and what's interesting is he is the journalist who uncovered Wirecard, which was a$28 billion company, this insane fraud that I think is becoming a movie. It's a really good book. He was the one who uncovered this entire fraud. And he just published around Timu and Pinduoduo that none of the numbers really add up, that this is a company that just did$10 billion in revenue last quarter, and it only owns$146 million of hard assets, whereas Alibaba spends over$5 billion dollars and has warehouses.

51:39So basically Pinduoduo, none of the numbers make sense. Even the amount of revenue they report, it's a marketplace for the most part, but they don't give you gross merchandise value, which is eBay, Amazon, everyone tells you that's the total value of all the goods you've sold. And then your revenue is what your take rate is.

52:07It's what is their GMV, but based on past time, like they broke it out three years ago, they stopped that their overall GMV would be the equivalent of the Italian economy at$2.2 trillion if the numbers are correct. So basically what I'm finding interesting, I think like where this story is just starting, the fact of who's covering it and some of the numbers he's just starting to introduce, I think we're going to be learning a lot more about Timu and Pinduoduo in the coming weeks and months. So take your best conspiracy-minded guess as to what's actually happening here. He has even basically leadership changed in 2019.

52:53And then he does not spell it out explicitly, but it seems to be that after leadership changes, they start planning Timu. They start changing all the ways they report revenue. And basically the idea is if you spend an insane amount of money on advertising, which this has been able to be verified because it's able to be extracted from meta and Google reporting, you spend billions of dollars in advertising, sell stuff for an insanely cheap amount that you can start just flooding the entire market and then getting users. and potentially you spin this out somehow, potentially. Pinduoduo is already a publicly traded company.

53:36You juice your stock price. Like I think it feels very, Ponzi scheme's not the right word because you're actually selling some stuff and there's stuff moving around. But I don't know, it's so complex that it's even tough to imagine what the exact scheme is, but it feels like there is one. I can't wait. Maybe that's some investigation that we can do and try to get to the bottom of it. Okay, speaking of number going up in the Ponzi scheme stuff, Bitcoin's at 70 ,000. Look, I wanted to ask you about this. I definitely wanted to cover this with you because our thought, especially your thought, I'm going to put this on you, Ranjan, as the interest rates went up from zero to 5%, was that a lot of the silliness in the economy would go away.

54:26Now, of course, we've had institutional money been set up to go into Bitcoin through ETFs that have just been put online. But that being said, for this coin to now be at 70 ,000 to me is just like, it's crazy. I mean, all right, so I'll just to, it's gone up like 50 % in a couple of months. I put$20 into Bitcoin when I opened up my Robinhood account before I interviewed Vlad. And it's now like above$30. Like it's a crazy return. What do you think is happening here with Bitcoin? And where do you think it ends? I absolutely do not know what is going on with Bitcoin right now. I think one thing I had seen that I think it was from Joe Wiesenthal at Bloomberg, like that this is such a beautiful, different bubble because no one's even pretending it's about the underlying technology.

55:22everyone is just enjoying the watching the ride like enjoying the ride and watching the number go up um but yeah i think it it has been the most fascinating part there's no web 3 story there's no defy story it's going to transform banking there's no i don't know what other stories have come and gone or i can't even remember like like this is just the price is going up and he said the only potential traceable factor is the ETF and more institutional money now being interested in it. But this one, I'm not even going to try. I can't. Yeah, man, I'm grimacing. Do you have one? Do you have one? I think it's largely the ETFs getting involved.

56:06I mean, I'm looking at where it was a year ago. It was at$21 ,000 per coin. Now it's 68 ,000. I mean, it is crazy. It's like, it's a true hockey stick. And that number does just start going up once these ETFs get approved. Now, the question is, is this a moment of speculation where people are seeing that the ETFs are getting in and it's a signal? So there's actually a lot more individual money going in as opposed to institutional. That's possible. However, and again, it's like foolhardy to predict the Bitcoin price. But I've seen so many predictions that Bitcoin is going to get to 150 ,000 a coin, 250 ,000 a coin, and it no longer seems so far fetched to me.

56:53Like it seems like, yeah, that makes sense. Like a lot of money is going to flow into this. Maybe this is, you know, if we're talking about it just as a store value, maybe this is digital gold. Yeah, I mean, to me, the ETF was fascinating. And I guess in a way, if this is the ETF driving it, maybe that's why this is the most beautiful bubble of all, where we don't have to sit and listen to how it's going to change technology in the economy. Because the ETF was the ultimate expression that all that matters is price, that there's no underlying technology value, because the very definition of the ETF is saying you don't even have to deal with it.

57:32It's like it never made any sense to me, but it's working. Crypto people that I used to follow that have been quiet for a while are very active on Twitter again. And now we just sit back and watch. You know, it was really having a day of it as El Salvador president, Naib Bukele. Yeah, I saw him back. He's back. Well, he never really went away. Like he did this whole thing cracking down on the gangs in El Salvador and sort of had his moment for that. even though there's serious human rights questions involved in terms of arresting anyone who sniffed an MS-15, MS-13 tattoo or whatever it might be.

58:13But he's been taking a victory lap on there. He just won re-election dramatically. and his spike the football moment on the Bitcoin stuff because people were mocking El Salvador, mocking him for putting so much of his country's treasury into Bitcoin. And now it's like, well, it was a gamble, but it looks like it's paying off. He's up like 40%. It's not exactly how I'd run a treasury, but he's taking his victory lap, that's for sure.

58:43So it's interesting. We'll see where it goes. I feel I do have this FOMO now. I mean, I have a little bit of Bitcoin, but I wish I would have bought a lot more back in the day. I had this buying moment in 2017. My NVIDIA FOMO far outweighs my Bitcoin. Your Bitcoin. Yeah. But I don't understand. Ethereum is also going up. So it's not just the ETF. That's the thing. It's everything. It's everything. It's Geo Bowden, I think it was. like the all the shit coins are also the shit coins are going up as well yeah that doesn't make any sense to me because that's not etf related yeah but again it's all tied it's all tied yeah so maybe there's a rug pool we'll see and there this one we just we wait and see oh i should uh i should note we are gonna have um zeke fox who's wrote the number goes up book he's coming on uh in in four weeks on uh april 5th so people should stay tuned for that i'm in the middle of that book number goes up that he wrote oh man it is one of my favorite books i read in the last year yeah can't wait to speak with him and i'm sure well if we're four weeks away we're gonna have plenty to go uh go on from between now and then in terms of where this roller coaster leads all right we did want to talk about the jake paul and uh mike tyson fight Maybe we save that for next week and get people out under an hour.

1:00:07What do you think? Yeah, I think so. I think so. We've had a full one today. All right. Absolutely. Well, I'm sure when we come back, Bitcoin is going to be at$100 ,000, and we'll try to diagnose that and similarly be completely in the dark about it. But these are the times we live in. AI is rolling. Apple's under siege. Bitcoin is going straight to the moon, and Tic Tac might be on its way out. Crazy times. May you live in interesting times. We sure do. All right, Ranjan, thanks so much for being here. Great chatting with you as always. Have a good weekend. You too. And thank you everybody for listening.

1:00:42Awesome to have you here. On Wednesday, Suhail Doshi, who's the CEO of Playground, which is an image generation AI company, will come to talk about the world of image generation and also his views on the state of AI. Really interesting conversation. You don't want to miss that. And of course, Ranjan and I will be back next Friday, breaking down the week's news. Until then, we'll see you next time on Big Technology. podcast.