SED News: Apple Bets on Gemini, Google’s AI Advantage, and the Talent Arms Race

0:12Hello and welcome to SED News. We're back after the holidays. I'm Gregor Vand. And I'm Sean Falconer. And this is another one of our slightly different formats of SE Daily, where we take a spin through the tech headlines. We look at sort of a slightly more meaty topic in the middle. And then we tend to round out with some of our favorite highlights from Hacker News. As always, we just like to kind of catch up on what we've been up to. And obviously, we've not actually done an SED News in about eight weeks, given the holidays. So yeah, Sean, how was your holiday season? It was good. You know, I went back to Canada where I grew up for the first time for the holidays in 14 years.

0:53I've been maybe purposely protecting my family from what that experience is like. They're California natives, so they had the experience in their first Christmas holiday for winter in Canada. But it was very nice. You know, we had a white holiday, so that's always fun. How about you? Yeah, still in Singapore. four. So I hadn't accrued enough leave really to take a lot when I started a new role back in October or something. That's just the realities of what happens when you start a role. But it was nice. Still nice to be over here. One thing that did occur though was I did hop back to the UK just for a week to see some family and I purposefully picked flights that were Starlink enabled, or at least I thought they were going to be Starlink enabled and they were.

1:39And we talked a bit about this in the last scd news i have to say it was an absolute game changer so yeah i did i think i did send you on the plane a screenshot of the speeds sean yeah i saw that so yeah it was it was just mind-blowing like in terms of the quality of the connection and the speeds and the fact is what's like gate to gate so you literally get on the plane and you haven't even you just sat in your seat and it's already available that's great because i find it really frustrating a lot of times when you want to use Wi-Fi on the plane and you have to be in the air for some reason before you can actually enable it.

2:16I don't know what the rule is, but so I was in Anaheim this past weekend for my daughter's birthday. We went to Disneyland and on the, as I was in the airport at John Wayne in Orange County to fly back to San Francisco, I got a message from United saying that there would be free Wi-Fi courtesy of Starlink on the flight back. Oh, nice. Okay. Yeah. So that was pretty Yeah. So my understanding is if Starlink supplies internet to an airline, apparently the contract says they're not allowed to charge consumers for Starlink. So basically it has to be free, which is great. And yeah, just the other bit is just you simply, at least I was on Qatar Airways and you just connect to the wifi and that's it.

2:58There's no logins. There's no signups or anything. It's just, you literally just hit, Hey, connect to plain wifi and off you go. least amount of friction possible exactly no friction and i did genuinely get a bunch of work done certainly i had two like eight hour flights and the first eight hour flight i could actually just sit on the laptop and do a whole ton of stuff so absolute game changer definitely would suggest anyone looks out for flights with that in the future if you plan to want to get some work done basically and yeah i believe some people highlighted this to me at work but yeah there's been a bit of an acquisition on your side sean is that right yeah i mean the big news back at the beginning of December was Confluent is being acquired by IBM.

3:39Now there's of course a lot of things that have to go on for a deal of that size and magnitude to go through. But it's kind of shaking up my world a little bit over the last month and a half or so. But it's been exciting times and we'll see where things go. But at some point, probably this year, I'll be getting paychecks from IBM. Wow. Yeah, that is a bit of a change. On my side, so I work for Superbase now. I think some people know that already. And yeah i was at the super base off site so you know super base is a predominantly remote company but they get ready together once a year so this was about 200 people in the same place at least half of which hadn't ever met each other so always a fun fun one yeah a week with just getting to know a ton of people and definitely worth the effort on everyone's part you know when you're growing that fast and almost half the company hasn't met the other face-to-face so really eases a lot of communication, I think, as well.

4:32Yeah, absolutely. So going on to the headlines, we've got quite a lot to cover. We're going to be covering a little bit from almost pre-holiday as well, just so that we haven't missed some of the bigger things that happened and make sure that we dive into them a little bit. One of the more recent things, we'll start with maybe more recent ones. Yeah, Tesla's killed autopilot. So this was their driver assistance system. It was never meant to be self-driving that was you know not allowed to be said exactly but yeah i mean given in the wake of waymo especially coming into the into the fold this is kind of interesting where something that tesla kept pushing as like their big differentiator yeah just killed it and as you know it's been in the vehicle since 2014 i believe so yeah that's quite an interesting thing and just sort of riffing off of that ironically very recently i think a couple of weeks ago someone actually basically had a tesla drive himself from la to new york completely unassisted by a human including all highways and charging stops so it clearly works but there's something here where tesla has just decided this is not where they're going to go don't they have another self-driving mode that's not the assisted version but it's full self-driving mode oh i see so they're going to be kind of just like deprecating, right?

5:55Yeah, I think what they're doing, they had essentially their assisted and then they also had a full self-driving mode. And I believe they're essentially like in the software terms, like deprecating the assisted mode and going 100 % into full self-driving mode, which I think probably makes sense in some, you know, not that I'm an expert in self-driving cars, but I think presumably they see that's kind of where the future is going and they want to put most of the resources behind that and have the people who are driving Teslas start to move towards enabling their vehicles for that mode. Nice. Okay.

6:29Yeah, that makes more sense. Yeah, there was sort of another couple of things on the mobility front, just that Waymo is being investigated at the moment for some infractions, I think, of Waymo cars driving past school buses on the wrong side or something like that. Again, I don't think this has any real bearing on our self-driving vehicles going to stick around. I think the answer is yes. I think something at this stage would have to go incredibly wrong for that to not hold up. I think only more cities want to have these vehicles on the roads. I believe in Singapore, they're going to be trialing it pretty soon.

7:04And I really look forward to hopefully having self-driving cars here. Yeah. I mean, it's pretty amazing when you kind of just, you know, pause for a moment and like, think about the fact that we have like, like a robot car, like driving around and picking people up and, you know, dropping them off and stuff. It's kind of like flying. When you fly, it becomes like this normal thing. But it's pretty amazing the fact that you can go in this metal vehicle and fly through the air and stuff. Now, a lot of it actually is autopilot at this point too. Of course, there's a pilot there to do a lot of the takeover necessary and all this sort of stuff.

7:40But it's like these technologies, like my kids when they're adults, self-driving cars are probably not going to be anything special to just be like the normal thing that they grew up around. Yeah, no, you're totally right. Yeah, it's kind of strange actually that we're able to just talk about it so nonchalantly about self-driving cars. And yeah, you're right about the flying. There was a quote that I read recently about flying, which was sort of not that long ago, probably like 70 years ago, which is really not that long ago. Apparently there was a quote where a pilot would say, a good landing is one where the people are able to get out the plane alive.

8:14And a great landing is where you can actually reuse the plane. So given that we're now at the stage where we're able to reuse the plane on thousands of flights per day, that's just insane. So moving on, Apple, they're going to be actually using Gemini. Reportedly, it's going to be that a Gemini-powered Siri will land in February. So this is kind of interesting because as I think most people have caught on, Apple's AI foray has not maybe gone to plan or maybe it's going exactly to plan, which was just to kind of sit back and do nothing for a while. Although Siri was supposed to be that, I think, to some degree and clearly has more.

8:54I think in many people's eyes has failed because what Siri promised was actually more like what things like Chachi BT ended up becoming. And so people could see the stark difference between the quality. But yeah, what's your take on them actually reaching for Gemini at this point? I think it's interesting. I think Apple certainly has never had a strong presence when it comes to like AI. And I think when you were back in like when assistants, when you had my Google assistant, you had Alexa, you had Siri, Apple's, I think was by far the like least useful and most frustrating one to use. So I think it makes sense for them to perhaps not try to own sort of the model part of it and team up with another company.

9:39Like Apple's good at user experience. They're good at hardware design. So maybe a better move for them is to kind of focus on the form factor around AI. Whereas a company like Google is really good at performance. They're good at AI and maybe is not as good at historically at sort of hardware design. So can you bring sort of these two giants together to create something interesting? Yeah, absolutely. I think this is a good move for them. Really, it's just could Apple sort of let their ego not get in the way and actually partner with somebody else. I believe they let go or sort of shuffled on a couple of people on their side, the sort of senior AI people.

10:18I believe the person that was behind Siri in the first place, I think he has gone on to sort of retirement or something else. So yeah, there's clearly a big kind of shift around on their strategy, which is just to partner now and just get moving with the level of AI that most consumers would expect at this point. Yeah, it's kind of interesting though, like what you were saying in terms of, you know, I think all those, like whether it was Google Assistant or Alexa or Siri, like Siri, they were sort of this promise of AI that you would interact with all the time and have a conversation with. And I think part of it was maybe the technology just wasn't there and they ended up being sort of glorified, like timer settings and, you know, give me the weather and set a reminder, like really really basic stuff and and maybe part of it too was because they were audio based there maybe the maybe the killer app for audio just was never sort of broke through but i think like chat tpt and that interface eventually is sort of what the original like vision and goal of those products were is just that chat tpt had a couple things probably going for it one was of course like a much more powerful like ai model and then they didn't try to go audio first they actually went with like a typing interface and maybe that form factor is something that just for whatever reason seemed to work better for people having conversations and so forth versus actually having like a an audio-based conversation yeah it's a really good point because i think especially with films like her where you know that was almost 20 years ago at this point and you've got uh you know joaquin phoenix being this person who has this voice assistant ai thing which is basically like human and so i think that was maybe everybody's framing of like oh this is what the future will be when it comes to ai and sort of apple likes to try and wow people and that's maybe where they're going with this but yeah you're completely right then chat gbt maybe and then people had this kind of bad perception of quote chatbots because we had been told that this customer service is an ai chatbot but actually it was just a bunch of if statements and so so sort of a double thing there where chat GPT clearly thought, well, yeah, voice is not the thing.

12:30And actually, if we can show just how well above anything that a human has seen so far on the chat front, then maybe that's the way forward. So just sort of tracking back, it was John Gianandrea, apparently it was Apple's AI chief who's just headed out. Yeah, so let's see. So apparently February, we should be able to see some of these updates coming into Siri. And that was reported by Bloomberg and picked up also by TechCrunch. So check out those for any more details on that. Moving on to this was something that did kind of touch the news before the holidays, but it's kind of an interesting one.

13:06And we'll lead a little bit into more of the main topic today, which is just around the hiring environment and what a developer might expect today in 2026 to be sort of thinking about when it comes to landing a job or moving jobs in 2026. But yeah, this was Wall Street Journal reporting that OpenAI is ending vesting, like a vesting cliff for employees. So for those not fully understanding of roughly how equity works when you join a company, there are various means of equity, restricted stock units, or what are called ESOPs as well. But generally speaking, if you join a company and they offer you equity, there is what's called a vesting cliff.

13:50And that is where there is a longer period at the start of your tenure where that stock is not really allowed to be yours until after a certain point in time. And usually that's one year. So it's kind of saying, hey, if you manage to stick it past one year, you now have the right to apply to get this stock in your name. There's lots of other complications there, but that's a sort of basic way of putting it. And what OpenAI is saying is you're not going to have to wait one year. You're going to be able to join the company. And I think it's almost like monthly or at worst, quarterly, you're going to have these chunks of equity vest, which is just a hugely different way of doing things compared to virtually any other tech company out there.

14:35So yeah. What did you think of this, Sean? I mean, you're right amongst the companies in the valley and this felt like quite a sort of shakeup to how they all operate. I would assume that like open AI's approach to this is that they feel like it's going to give them some competitive advantage to attracting top tier talent. And there's such a competition around hiring like the top tier AI talent right now, just like we've covered before with the big, you know, alleged bonuses that meta was giving out for various, you know, AI leaders and stuff like that. This is sort of the latest move that OpenAI is making to try to hire the best talent, make it really attractive.

15:12And if you can start vesting from day one, I guess it reduces some of the fear that you might have with joining a company where maybe you're like, well, what if I really don't like it? And then I'm stuck there for a year until or I walk away with nothing for the investment time. And so I get it, you know, maybe that helps them close more candidates, but it does certainly change, I think, the nature of how people potentially think about their jobs, right? Like, when you join a startup, I think part of the fun part of joining a startup is trying to kind of be part of something, you know, bigger than yourself.

15:52You're joining for the mission. Obviously, everybody wants to be rewarded for the time that they're putting in and see some financial payout. But it's certainly an early stage. The chances of that payout actually happening are pretty slim. So you're sort of buying into, like, hey, I really believe in the mission. Even if this fails, I really want to try to make this happen. And then there's also, of course, you learn a lot during that process. And this kind of changes the nature a little bit. I think it's almost like you're not getting a bunch of people who necessarily are there for the mission, but you're getting like mercenaries that are there because they care primarily about the financial outcome.

16:35I just wonder how that sort of changes the psychology or does it create certain biases even towards like the type of employee that you're going to attract? Yeah, for sure. I'm kind of on the fence here. apparently the applications chief, Fiji Simo, had said that this was to encourage new employees to take risks without fear of being let go before accessing that equity, which is what you also touched on, Sean. And yeah, I mean, that sort of makes sense. But I guess as someone who has built a company in the past, I think I would just feel very uneasy about bringing people into the company. And within one month, they suddenly have share of the company and they could in theory then walk away if they want and they walk off with that equity very different scales here and i think the speed at which open ai has to develop world beating products i guess a year is just maybe not realistic anymore you know like someone maybe can come in and make a huge impact in say six months and actually that's good enough and if they can't hold on to them so be it but yeah it's a very sort of interesting way to differentiate and potentially rather than dangling bonuses that people like were doing and well that didn't at least play out quite so well as a bit of a mess over there in terms of ai hiring and strategy well this is a different way to do it but then that said it's not like this costs them zero open ai is projected to spend six billion on stock-based compensation this year and that's like nearly 50 percent of entire projected revenue so i mean that's just like it still costs them a lot of money to run this yeah i mean they're basically spending 50 cents for every dollar that they earn just to keep the people building the product but and we're gonna talk a little bit about the code red scenario and the pressure they're getting from the hyperscalers in particular google in this like hyper competitive world of ai like people are just full steam ahead you know full pressing the gas on the gas all the time and you're competing against some of the most well-resourced companies in the world they're also trying to own the same space, it just seems to be a place where for some period of time, people are just going to have to burn a lot of money to try to own that space and do as much sort of land grab as possible.

18:46It's kind of like in the early days in the ride-sharing wars between Uber and Lyft, there was such a... Both companies were spending a lot of money and in the red massively to try to land grab across the world all these different spaces and really roll out globally. It'd probably take a long time for them to sort of rebalance the earnings there. But it's like, if you can dominate that space, then of course, there's going to be return on that investment eventually. Absolutely. SC Daily listeners, quick question. When things go wrong in production, do you know why in minutes or hours? AppSignal is the application performance monitoring tool designed for developers who want clean, actionable insights without a huge observability bill.

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21:38Discover how GuardSquare brings all these together to provide mobile app security for your Android and iOS apps without compromise at www.guardsquare.com. so yeah i look forward to seeing how this plays out i had a friend that worked at meta a while back and they also had a more to minus something slightly more generous stock scheme than than most i think it was something to do with it was maybe six month cliff and then then it was monthly something like that and interesting that person didn't stick around that long at meta and i think did quite okay out of out of the shares vested but then again they probably contributed a lot But yeah, I mean, it's sort of like, do you value ICs who come in and do a huge amount, but then maybe get sort of restless more quickly?

22:28Or do you value people that are in it for like, quote, the mission and plan to stick around or you're trying to get them to stick around for a longer period of time? I think that sort of remains to be seen. And as you called out, Sean, even though you can have vested stock, the likelihood that you're actually able to benefit from this is a pretty low percentage in the grand scheme of things. So, you know, again, for anyone not sort of familiar, you have to have what's called a liquidity event, which basically just means some way that these vested shares can be bought by someone. Is that one of the investors?

23:03Is that the company themselves buy you back? Is that the most commonly understood one is IPO, which is these days not unlikely, but is more unlikely than it used to be. And some companies are very, I say, very unusual, but are very friendly in this way where they allow some portion of your vested stock to be bought back during any funding round, for example. So when you go from like Series C to D, actually, they set aside some money and they say, hey, like, if you've got some vested stock, then let's just say 25 % of whatever is vested will allow you to cash that in. But that's an incredibly friendly approach and does not happen a lot.

23:45Yeah, I mean, Databricks is doing that. But Databricks seems to be at least on a path where they're never going to go public. So they need some way of creating essentially a liquidity event for their own employees. And then of course, there's secondary markets too. Yeah, true. But yeah, as I've also seen, some of these sort of friendly policies actually explicitly say you cannot use secondary markets. So it's like, hey, join a friendly policy, but you can't actually use a secondary market to do that as well. So yeah, the high level here is for anyone thinking of joining a company, and we're going to get onto this maybe slightly more in the main topic, but anyone joining a company and equity is part of it.

24:21Do you think very hard about what do you think the prospects of this company being? And do you kind of trust the management to make good on what they say they'll achieve and how they plan to sort of make liquidity happen? Because often you can be negotiated down on salary quite big time. if you're made to believe that the equity is sort of more valuable than it really is. So yeah, just... And Shopify famously now allow all employees... They're a public company, so it's a little bit different. But they famously allow employees every year to basically, apparently use a literal slider to choose equity and cash.

24:58And you can just choose how much of your compensation each year. And part of the reason they did that was because they had a crazy spike in the share price. They found that over a couple of years where people joined, unfortunately, the equity they were offered, the price they were offered, what's called the strike price was just crazy high. So there was almost like no point in receiving equity. So I think that's very smart where they just say, look, actually, if you look at the numbers and don't think the equity right now makes any sense, don't take any. That's fine. But going back to something you touched on, Sean, and what's going to be our kind of next final news topic.

25:32actually no sorry penultimate news topic but what happened before the holidays that open ai code read so this was where open ai basically said that they sort of understood google is actually beating them on basically the approach to producing models and this is boiling down to a tpu versus a gpu and google using and having developed what are called tpus and we'll get into that in a second meanwhile most other producers use gpus like nvidia is like the most famous producer of those and i think this sort of turning point was gemini 3 is that right where yeah i think so yeah yeah so this is maybe also linked to this vesting piece with open ai they sort of went oh shoot like we have to find a way to get people in the door now and not have them like worry about this one-year thing we just need them producing now but yeah let's just talk a little bit about yeah this whole gpu versus tpu thing it's obviously been covered quite a bit before the holidays but i think it's still pertinent to sort of understand like where these two sides are coming from yeah i mean i think that this is kind of the latest in some of the unfair advantages i would say that like google has over a company like open ai when it comes to model development and then also distributing that model to a number of people.

26:53One, they have a lot of data that companies like OpenAI don't have access to because they have a lot of products where people are generating that data. Or because of Google search, they also have deals where they're able to index data that typically is behind paywalls and things like that, that other companies don't have those deals for, that they just carved out over 20 years of being the main search company in the world. So that's one big advantage. They also have thousands of products in the B2C space that reach billions of customers. So when they come out with a new model, they have so many different surface areas where they can touch users that are much wider reach than a company like OpenAI has currently.

27:31And then with the GPU, TPU thing, it's kind of like another thing that they have now where, you know, most people are building and running models and GPUs. I think, you know, if you've been paying attention to the market at all or what's going on with NVIDIA, you probably have some sense of the importance of GPUs. But they were originally designed for gaming and graphics, and they're really great at parallel processing. But because they were designed for graphics and gaming, they also have to do other things like render textures and physics and lighting. So they have kind of like in the world of AI, like this architectural baggage that doesn't really help when it comes to running AI processing.

28:08So they end up spending energy on other tasks that are independent of the pure AI math that they actually need. Whereas with TPU, which is a tensor processing unit, it's actually a chip built specifically for doing AI math. So what Google did was they stripped away kind of all that baggage, and then they designed it to do one thing only and do it really well, which is massive matrix multiplication, which is essentially what the core thing that you need to do for deep learning. They originally did this back in 2013 because they had realized that if every Android user just used voice search for three minutes a day back then, Google would have to double their data centers as a result of that.

28:48It wasn't like they envisioned this world or anything like that, but they just had this problem. And they use sort of the fact that they have a lot of really smart engineers and a lot of resources. And they're just like, hey, I know how we'll solve this problem. We'll design our own chip where we can run this much more efficiently and reduce the cost, essentially, of scaling these data centers. Because one of the challenges with AI right now is a lot of times your training models or your running inference is the people running that had to buy those GPUs from NVIDIA. And NVIDIA has like 75 % gross margin on their chips.

29:22Whereas if Google's building their own TPUs, they avoid that markup entirely where everybody else in the market is essentially paying NVIDIA for the chips. So that's a pretty massive advantage that they have. And they've also restructured their company very much because of the existential threat that AI was causing the company a couple of years ago. And now they just have like the whole company is kind of steering in that direction of owning the AI space. And I think as a result, the combination of all those things led to this, you know, code red situation, OpenAI. For sure. And I guess it's sort of interesting that maybe OpenAI, they just sort of underestimated the power of this approach.

30:00And maybe for good reason, because Gemini 1 and 2 were impressive, but nobody was, apart from, you know, I think Gemini 1, you know, it was like large token window was kind of its biggest advantage, you know. So people would use it for tasks where that was really the crux of what they needed to get done before other kind of technologies came along to help chunk things up. But Gemini 3 is actually where people say, you know what, this is actually producing way better across a bunch of factors. I mean, one of them was actually more on the image front, you know, all these sort of infographics sort of floating around before the holidays were all Gemini 3 basically.

30:42again toby luke the shopify ceo posted a pretty great one that he you know said this is gemini 3 but i'm using this because i want to show he took one of his talks i think from he'd given to the company and he really wanted to kind of capture that in a infographic and yeah i think gemini 3 did a great job of that so very interesting yeah i mean the graphic stuff has come a long way like yeah i encourage you to play around with nano banana if you haven't Exactly. That was it. Not a banana. Yeah, yeah. Yeah, yeah. It's amazing because I think a lot of where, at least when I've played around with some of the image generation stuff from the models is, you can get there, but it takes a bunch of prompting and they tend to spell things wrong a lot.