SED News: Bezos Returns to Building, AI’s Reality Check, and Europe’s Cloud Ambitions

0:11Hello and welcome to SED News. I'm Gregor Vand. And I'm Sean Faulkner. And this is, as I'm sure many of you know by now, but just slightly different format of SE Daily, where we cover tech headlines. We have a main topic in the middle. Today's topic is tipping points of technologies. And then we are going to roll into Hacker News highlights, where we just take a few of the fun, weird and interesting things that have popped up on Hacker News that you may have missed. which is very easy these days given how much lands on there. But as always, I mean, we're heading to the holidays. We're recording this the day before Thanksgiving.

0:51Certainly, I would love to celebrate Thanksgiving. It's a great holiday. Unfortunately, I tend to live in countries that doesn't really get celebrated, but you're celebrating it, right, Sean? Yes. And as a Canadian that's now lived in the US for like 15 years, I've migrated from the Canadian Thanksgiving, which is celebrated in October, to the US Thanksgiving that's celebrated in November. So, you know, I've done the full migration, essentially. Awesome. And yeah, anything else that you've been up to, Sean, in the last few weeks since we last recorded? Oh, nothing specific. I mean, the big thing that's coming up for me is the week after Thanksgiving is AWS reInvent.

1:25So I'll be going, heading off to Vegas very early Monday morning to be there for the week, which is going to be a pretty busy week with, you know, 60, 70 ,000 various people in the technology industry. So it should be fun. How about you? Yeah, I've got a few colleagues heading to that. Yeah, For those that are listening, I'm sure a lot of people have never been to a re-invent and maybe will never get the chance. Can you describe what is a re-invent to someone that doesn't even... Yeah, I mean, so this is AWS, Amazon's big marquee technology event. It's pretty massive. It's not the biggest tech conference I've ever been to.

2:02I think Mobile World Congress is, which might be the biggest tech conference in the world. whether it's like 150 ,000 people, but I know 60 ,000 or so registrations, 70 ,000. So it takes place in Las Vegas across multiple hotels. It's always the first week of December, probably because AWS got some deal there like a decade ago, even though it's kind of inconvenient for people. But there's just a ton of stuff going on. They make a lot of big announcements there. There's so many like parallel tracks of talks. I'm giving a talk there. But on top of the like registrations, there's also probably another 10, 20 ,000 people who are just there who don't even register just for sort of the side events because they're just like a continual thing going on.

2:45And so many people that you would want to converse with in technology or, you know, meet up, do business with are all there, all kind of like centralized around this. So there's a lot of just like networking and community stuff going on all the time. Yeah, exactly. This wasn't reInvent, but a startup, I wouldn't name the startup, but we did actually cover them on SE Daily. But they said that they went to a conference in Vegas recently. And rather than pay the 20 grand for a booth, they, as a marketing thing instead, they said, hey, we're going to have 20 ,000 in credit on the blackjack table. And you can come play your hand as long as you take a meeting with us, basically.

3:27which i thought was a pretty cool way to sort of leverage vegas as a meeting point yeah i mean the expo hall is not i mean it's like you're in like an airline you know like hangar or something like that like it's just so huge it's pretty hard to stand out i always felt like because the booths are expensive unless you have the means to pay for like a gigantic booth where you can really stand out by you're paying for it i think you just if you want a booth you go with a small one because there's not that much i think to gain from like having sort of the slightly larger booth versus the small booth and the amount of money that you're spending on it you could probably spend it on i don't giving people credits at a blackjack booth or having some coffee or drinks or something like that in your booth exactly yeah on my side just heads down work unfortunately but i'm looking forward to the christmas holiday season which is coming up soon ish i'm going to head back to the UK next week, see some family, shorter visit than usual, but it'll be nice to get some cold weather.

4:26Right. Moving into the headlines. So these are the main tech headlines. They might hit your normal kind of mainstream news, things like Wall Street Journal, Financial Times, Tech Crunch, this kind of thing. So the first one, we've not heard about Bezos in a while, kind of, apart from things like weddings and frivolous things like that. Yeah. Mostly personal things. Exactly. Yeah. But what is Bezos actually doing, Jeff Bezos of Amazon actually doing from a sort of work standpoint? He's not exactly unemployed, but well, he's just announced that he is stepping back into the CEO role of something called Project Prometheus.

5:05And they say that this is a company focusing on artificial intelligence for the engineering and manufacturing of computers, automobiles and spacecraft which is pretty broad brush these days but it kind of i guess there's something clear there where it's ai but kind of for like deep hardware is kind of what i took from that i did a little bit of research into this there's a not a ton about the company yet but it sounds like it kind of relates to something that we had talked about previously which is you sort of ai applied to like physical tasks you know the intersection between ai and learning from the physical world.

5:41Large language models were trained essentially on digitized textual information. And there's a bunch of companies now that are looking at how do we train models based on physical interactions, simulations with the physical environment for things like either robotics, sometimes scientific discovery, drug design, all kinds of different things. So it'd be interesting to see which direction they go. They have$6.2 billion in funding. so they have some some runway that'll cover jeff's salary hopefully exactly and his co-founders was the founder of verily which was one of the it was like a health care spinoff of some of google's like moonshot projects oh interesting okay but yeah i mean i think this is although he has blue origin the you know space exploration company he was never actually the ceo of that company.

6:36He was obviously a founder, but he did say at the time and has said again that Amazon was his focus. And he's always sort of trying to drive a wedge between him and Elon Musk, I think, and sort of pointing out that he was actually being the CEO of Amazon and letting other people run his other companies. Whereas Elon Musk, of course, tries to be the CEO of many companies at once and sort of some might say he loses focus. So this is the first time that Bezos has stepped back into CEO after stepping down from that role at Amazon. So yeah, it could be interesting. I think a quote from, from what's a journal was just that it looks like Bezos is back to building and has a new list of ideas on his whiteboard.

7:16He's also known for being the prolific idea creation person. Too many basically is usually what the problem has been with, with Bezos. Too many ideas and his teams don't know what to do with all, with all these ideas. So let's see if Prometheus can work with that? Yeah, I mean, I think like, we're seeing a lot of well known people in the tech world, sort of be drawn out of, you know, semi retirement or whatever they're doing by what's happening in AI right now, like, yeah, certainly a brain did his first pull request. And, you know, however many years, you know, this year, so there's a lot going on in space.

7:51And I, it makes sense, like, it's an exciting space. So people who've made their careers, perhaps in other ways, there's probably enough of a draw to kind of bring them back out of you know semi-retirement to do something interesting yeah so moving on you know there's been a lot of headlines so not exactly targeting one company specifically but just a general ai is it actually going anywhere is it costing too much money so there was a article in the wall street journal again AI investors want more making it and less faking it. So just this idea that companies are continuing to, in net terms, lose money on their AI gambits, but ultimately are sort of making it up on volume of could be revenue or users and so on and so forth.

8:41But yeah, what did you make of this one, Sean? Yeah, I mean, there's always that like, people say, like, you know, losing money, about making up a volume kind of joke in the valley and stuff. But overall, I don't know that I really agree with a lot of the points in the article. I think that assumes things like inference costs being static, like ignores that likely compute costs will go down, just like the cost of transistors have gone down, compute has gone down over many decades now. So as compute goes down, of course, with scale, then there's more opportunity to make money. I also, one of the things the author talks about is he argues that investors may conclude that they don't want to pay these big costs to get to some uncertain point of whether AI is going to work or not.

9:26But I would say, for the most part, the reality is a lot of these companies have no choice. If Google stopped spending tomorrow on AI infrastructure, but Microsoft continued, then Google risks essentially ceasing to exist at some point. Because I think spending right now, in part is driven by this existential fear of becoming irrelevant. No one wants to become, I don't know, the Xerox of the emerging AI world. And there's also, they talk about this concept of faking it until you make it. But I would say AI isn't faking it, at least not in totality. There's certainly a certain amount of hype and things that aren't necessarily real, But AI is today at a point where it's writing quite a large percentage of global code.

10:18It's handling a lot of tier one customer support, generating media. And even outside of we go outside of generative AI and search of large language models, like machine learning and AI has been used for a very, very long time successfully in software. It's just generative AI has really brought it to the forefront. But behind the scenes, Blackbox ML has been used in many, many industries for a very long time successfully. So I think it's a little bit hyperbolic to kind of say that it's all fakery, essentially. Yeah, I agree with you generally. I think the part that is tricky to sort of merge in with that is there are unfortunately quite a few startups that do look quite snake oily at the moment.

11:00I mean, this always happens. You have this sort of boom technology. Everyone jumps on it and just people still tagging just AI onto the end of a company name. Instead of the dot-com boom bust, if you want to call it that, everyone just said, I'm da-da-da dot-com. And now everyone's like, I'm so-and-so AI. I think it's consistent with any early thing that becomes hot. There was a period in the early days of the gig economy when Uber and Lyft and companies like that were taking off. And then suddenly everything was like Uber for nurses. Right, exactly. Or if you remember the SOMO local or whatever, the social mobile local era as well, which is based on companies like Yelp.

11:45Like Foursquare and that kind of thing. yeah foursquare being successful yeah and then everything had to have like a social mobile local component when social like facebook and and other social platforms blew up everything suddenly had to have like some virality social component whether it made sense or not so to me if you've been in tech long enough you've seen sort of these like cycles and this feels you know similar to me yeah and we'll kind of get onto that in the main topic where we look at tipping points i.e when and why do sort of technologies end up getting the adoption and the respect you could even say that they deserve so we will get on to that yeah following on from last month's main topic we were looking at kind of the interconnected web of the ai players open ai was the center of the web if you want to call it that and yeah you turned up a pretty interesting article sean called is OpenAI screwed?

12:45So just straight to the point. Yeah. Although this wasn't sort of main mainstream news, but this was a very well, tons of comments and it was on Medium, like a lot of likes. And you can almost say Medium is basically a sort of semi news outlet at this point. So what was kind of going on in this article? Yeah. I mean, I think it's a very well-researched, well-written article that dives into this idea of investigating like what's happening with OpenAI. You know, are they going to, what are the sort of existential threats to open AI? And some of the moves that they're doing, they sort of protect themselves against that.

13:20So the author kind of argues that they're doing a lot to kind of make themselves too big to fail by intertwining them with a lot of other companies. And we kind of talked a little bit about this the last time as well. And for a long time, I kind of thought in a similar way where open AI could be in trouble in the long run versus hyperscalers because companies like Google have this very large existing business to fuel their AI investments. They have data centers, they have TPUs, they have the talent, they have billions of users across thousands of different products that they can immediately bring AI to.

13:58And that felt like an unfair advantage in comparison to being like a dedicated model company. But OpenAI has done a lot, at least from an outsider's perspective in the last year to try to, I think, protect themselves essentially against that to be too big to fail. I think some of the arguments in the article don't necessarily hold up. You know, they try to make the case that open AI is like, you know, burning so much money, you know,$12 billion quarterly loss that is proof that the business model is broken. But, you know, if you spend, if that, you know,$10 billion of that$12 billion was spent on NVIDIA H200 or something like that, that's not really lost money.

14:35You're essentially converting that money into compute, where that compute is tremendously valuable. You could even argue that that's part of their competitive moat is to sort of own all that compute and then turn it into money later. So yes, it is spending, but it's not necessarily like, hey, we just lost this money, it's irrecoverable. I think that's a good read on that. I think it's just the volumes, right? It's just the volumes. No one is disputing that spending a lot of money to make it up later is sort of you know that that is tech often it just seems like open ai as you've as you're kind of saying is like almost making themselves too big to fail like the numbers just keep growing sort of exponentially without sort of actual income dollars to kind of back up the supposed spending and again when you say spending we're kind of talking about like deals on paper committing to things where is the money going to come from that's kind of like debt in a way call me old fashioned but you know that is kind of debt where you're just saying like hey we promise to pay you if you give us this stuff and we'll figure out how to pay you the actual money later kind of thing.

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16:15Let Thoris handle your auto-scaling, so your teams can focus on building. Find out how much you can save with Thoris. Visit thoris.ai and try our cloud savings calculator. I think some of that, although the numbers are really big, and maybe that's why it's a little bit jarring. But if you look at like Amazon lost money for a very long time, was in the red for essentially, eventually they had to get to the economies of scale to a crazy point in order to start making money. And then Facebook had no monetization in it for years before for it was all about sort of gathering eyeballs. So they were eating all that infrastructure costs, engineering costs to scale that platform before they turned it into this like money-making machine.

16:59But it took quite a while to get there. I think you can make the same argument that OpenAI is kind of doing, you know, on a similar trajectory. It's just the numbers are so astronomical, but it's like hard to, you're talking like tens of billions of dollars. And the article also touches just, I guess, on Sam Altman himself. Yeah. And I, you know, obviously I don't know the guy at all, but I think if you look back at history, you know, we were talking about Bezos, Bill Gates, Steve Jobs, like all these people who've built these gigantic companies, these kind of like mega empires become some of the richest people in the world.

17:31Like they're all notoriously difficult to deal with. And I think that it probably takes a certain mind-a-driven individual to build these like monster companies. and with that probably comes you know a certain cost of that person sometimes being difficult to deal with yeah absolutely so again it's going to be interesting this you know every week something is popping up at the moment which is sort of touching on what is actually going on over there open ai so yeah i guess it will remain to be seen let's see where we land on this in a month's time because a month is sort of like six months of what used to be of pre-AI time.

18:12So yeah, so let's see where we land on that one. Finally, just kind of wrapping up on the headlines. Yeah, this was just TechCrunch touched on the fact that it sort of looks like boom time in the Nordics. I would sort of say again for tech, you know, Nordics being Finland, Norway, Sweden, Denmark. And yeah, you know, if I think pre-AI, the nordics for me are very much like spotify klarina skype even which i think is actually estonian that they do kind of class themselves in the nordics as well so it's been this kind of interesting place outside of the silicon valley sf ecosystem that they've often produced some really really strong startups not nearly as many but they have produced some of the strong like you know Spotify urban or Spotify I can't say there's a single Spotify that came out of the UK for example I've always chalked it up to just it's a very dark place half the year and a lot of very smart educated people and they've got nothing else to do other than sit and program things but this article also touches on the idea that well today we've got lovable is you know one of the fastest growing startups of all time.

19:28That's from Sweden. And it's definitely the epicenter of this sort of Sweden and Stockholm have become now this kind of new second hub of AI, I would say, and AI startups. Yeah, it's interesting. I mean, I think the Nordics hit rate on companies is pretty high given their population, like relatives to say, like the US. I mean, I think there's less than 30 million people that live across all the Nordic countries. But Finland in particular has like a very strong education system. And I also think that, you know, once a certain industry becomes successful in, you know, a country or an area of the world, then the art of the possible has been demonstrated and people like follow that.

20:10It's kind of like, you know, if you're going to be an actor, Los Angeles is the place, you know, the place to migrate to and everybody's it's already in that industry. So you create these like, you know, these bubbles of industry, Of course, in the US, it's predominantly the Bay Area for technology and startups and things like that. But you're so surrounded by it, then it becomes something that, you know, as a kid, you see like, okay, well, I could do that. Why not? So maybe they have something like that going on in those countries. yeah and i've actually spent quite a bit of time in norway so i can maybe sort of relate to this like it touches on the article that the region's social safety that sort of lets young people take risks you know without fear of losing everything i do kind of agree with that i would also take the outside of the coin which is because it's so kind of safe and salaries are pretty good in these countries generally i would say it really it's still 50 50 weather that incentivizes you to go off and start your own company okay strong safety net equally you can get paid quite well quite frankly on on many many jobs that in many other countries like you just wouldn't maybe consider because the salaries just don't make sense like we're talking things like teachers and even working in a supermarket in norway is not like you can make a completely okay life that way and it's that's a very nice way to run a country so yeah i think it's sort of interesting looking at that side of things.

21:31But I do agree to some respect. I would say that more so than say Singapore, where people are quite afraid to fail. And I think that does drive the sort of how startups happen here. They tend to be often people that are, to be frank, coming from quite privileged backgrounds because they can afford to try it. Whereas a lot of people simply cannot afford to even try in places like this. Yeah, I think there's a lot of things that go into that. Because like, I don't think it's about necessarily do you have a safety net or do you have is this your path to making money? Because if you're going into doing a startup for the money, you're going to be most of the time pretty disappointed.

22:09Please don't do that. Yeah. There's a much easier path to financial security than trying to do your own startup. So I think there's more of like either like a culture of innovation and also like you had spoken to of, are you okay with the prospect of failing? Because there is risks that you take on in terms of like, hey, I'm going to go do this thing. I might not make any money from it. It might fail massively. And I might sink multiple years of my life to try to make that happen. And it might not happen at all and be sort of okay with that. Yeah. And just a sort of sidebar on the Nordic side of things was, yeah, Lovable just announced acquiring Molnet.

22:47So this is a very young company, about two years old, but then so is Lovable, I think, or Lovables even less. But yeah, Molnet, just three founders. It was aiming to be Europe's cloud provider, you know, because I think there's been a strong leaning away from having to rely on US infrastructure and, you know, around the data privacy that sort of comes with that, especially if you don't live or none of your users are based in the US. However, they were moving into like hosted Postgres. I think we've seen this movie before. And yeah, so Lovables just acquired them and announcement was simply that the team and technology is being rolled into lovable and the team will continue to work with them on that one so that's kind of interesting just you know another potential sort of hosted postgres roll up there so moving on to the main topic we're kind of calling it tech tipping points so basically how long does a far out technology sort of take to be adopted and you know there's many technologies we could touch on here we're framing this obviously in the around ai why are we doing that because not just to talk about ai yet again but people are asking is there a bubble in ai people come and ask me that and a bubble is a sort of more financial question you know we tend to look at it more from the technology side so we're less interested about sort of in this case we're less interested in sort of the deals being done and valuations and all that we're more interested in sure but if there is actually a technology behind it that is worth pursuing at what point do people kind of stop saying oh it's nonsense and this will never work and at what point did we kind of see these technologies actually get respected and adopted so you know we'll look at things like the internet's the obvious one that came you know internet obviously predates ai and like how did that look we can also touch on things just like smartphones in general.

24:44We look at alternative services like Uber. We've already touched on it slightly briefly in this episode. There's also these moonshot technologies that are starting to look less moonshoty now, like autonomous driving. So I guess if we look at the internet to begin with, the internet through the bubble years, people just couldn't really see what it was going to deliver for them for a long time. And even e-commerce took a long, long time to be taken seriously quite frankly but i think the sort of probably running theme here is is there have to be so many pieces of the puzzle that come together to make these technologies sort of make sense i'll take i'll take a slightly more nuanced example just to begin with which is actually internet on planes so if we like we take not just the whole internet but like putting internet on a plane this has been around for like 10 years now ish and airlines were starting to kind of roll it out about then with these Panasonic boxes.

25:43And then it was like Viasat, which was a slightly different way of looking at like ground versus satellites. But crucially, the speeds were terrible, connections very patchy. Like when you're flying, there's like a map showing you like, oh, you're going to fly over this country now and it will drop out and then it will come back again, which is just, you know, doesn't, if you're actually expecting to work on a plane, that doesn't work. Yeah. It's worse than the internet in the 90s for the most part. right yeah like i regret buying internet access on planes most of the time exactly i i actually only try internet on a plane if it's free and i'm again i was on a i think it was japan airlines flight and you know oh you know we've just installed wi-fi and please try it and i did and it didn't work but what's what's happened is starlink starlink's come along and obviously starlink is disrupting a lot of technologies and even countries quite frankly because starlink is has suddenly breaking down barriers when it comes to censorship.

26:39And as we just touched on in another episode with one of the other hosts, drone warfare has even changed because of Starlink. But in this case, Starlink on a plane giving actually good internet speeds, actual reliability. So it's less about like, is internet on a plane useful? It was about is internet on a plane reliable fast is the internet that we expect on the ground in the air Qatar Airways have rolled out across a whole fleet of their planes and the consensus is it's amazing I'm going to be flying on Qatar next week I hope at least one of the planes has Starlink so I'll report back and see if it has actually I'm genuinely planning to work on that plane and for me that's the tipping point The tipping point of, can I actually say, hey, I'm going to work today on a plane, as opposed to, these are like seven, eight hour flights.

27:32Can I work on a plane versus just saying, no, I've got to take the day off because I can't guarantee I can do any meaningful work. Yeah. Capital One's tech team isn't just talking about multi-agentic AI. They already deployed one. It's called Chat Concierge and is simplifying car shopping using self-reflection and layered reasoning with live API checks. It doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade-in value. Advanced, intuitive, and deployed, that's how they stack. That's technology at Capital One. I think internet, that's a good example of something where everyone can agree that if you can make the technology work, there's value there.

28:13So the number one risk is a technical risk. It's the kind of things that the VC firm Engineering Capital invests in. Their sort of number one thesis is they invest in companies that focus on solving some sort of engineering challenge. And if they could solve that engineering challenge, then it kind of sells itself, essentially. Because the key on lock is like, can you get the technology right? I think Wi-Fi on airplanes is a really good example of that. And yeah, I mean, airlines could not have predicted Starlink, quite frankly. Starlink is very much linked to Elon Musk. I'm sure there's a ton of other big minds there that have made this possible.

28:49But it's the kind of thing where we've had all these companies like Viasat working on this stuff for years and years and years. And then Starlink just kind of comes out of almost nowhere and wasn't even designed specifically for this purpose. It was just, hey, if this is possible, this is going to be a game changer. It was possible with a lot of investment. And here we are. So we'll move on to sort of AI and Internet together, sort of how do they compare and contrast. But if we just look at a couple of others before that, I guess we could almost take these two together. I would say like smartphones and things like alternative, when I say alternative services, like, you know, there were taxis, and then there was Uber, and then there was all the sort of geographical derivatives of Uber.

29:33But this was it again, like people couldn't foresee how taxis could get disrupted. But it did rely on there being a device in your pocket that could do all that stuff, basically. Yeah, I mean, the fact that you had a computer in everyone's pocket allowed you to get rid of the proxy service of the taxi dispatcher and you just go point to point. And then essentially the dispatcher is the software itself. And clearly taxis have been around for a long time, didn't see, you know, smartphones coming and being that disruptor. But I mean, I think that's probably a little bit more similar in some ways to the internet on an airplane than I would say the creation of the internet or what's happening in AI.

30:21Although here you're sort of disrupting like an existing industry. So it's changing sort of the pattern of how somebody like uses a service. So it's a little bit different. But again, it's like some technology unlock that led to that disruption. Yeah. And as we get on to, I think the taxi dispatcher is interesting because that's like a job role that effectively has mostly disappeared. I mean, of course, I would say probably in like London, New York, there are still taxi dispatchers. But and it's not like that was a massive job generally, but there were tons and tons of dispatchers. But it is a job that has effectively been made moot.

30:59And as we'll get on to with AI, like that's the big fear around people keep saying AI is nonsense and it's going to take all our jobs. So, yeah. Well, I think too, like there was companies that tried to do the version of Uber, but work with the existing taxis. But they could never really make them work in a reliable way because of essentially having sort of this like person in the middle of the communication. So you just didn't get really up-to-date information on whether the car was coming. And it just ended up being extremely unreliable. And the really disruptive thing besides the fact that someone had these smartphones was that companies like Uber, Lyft, and others went and owned sort of the end-to-end experience to make it possible.