iPhone Designer Jony Ive and Sam Altman Working on AI iPhone Alternative

0:00Today on the AI Daily Brief, confirmed info about Johnny Ive and Sam Altman's AI hardware plans. Before that, in the headlines, Vice President Kamala Harris talks AI in an NYC donor meeting. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To join the conversation, follow the Discord link in our show notes. Welcome to the AI Daily Brief Headlines Edition, all the daily AI news you need in around five minutes. We kick off today with some comments from Vice President Kamala Harris around artificial intelligence in a pitch to New York City donors.

0:33Now, to be fair, this was a bigger deal to crypto folks than to AI folks, as Harris has been completely silent on crypto up to now, but has obviously been a little bit more involved with artificial intelligence. But in these comments, Bloomberg framed them as her vowing to help grow investment in AI if elected. She said, I will bring together labor, small business founders, and innovators in major companies. We will partner together to invest in America's competitiveness, to invest in America's future. We will encourage innovative technologies like AI and digital assets while protecting our consumers and investors.

1:05Obviously, this is not a complete articulation of policy. Right now, though, what people have been looking for is indicators of how Harris is going to treat business given some contentious areas of policy like the proposed tax on unrealized capital gains. Numerous leaders in Silicon Valley have broke with Democratic tradition and come out and endorsed Trump in part because of a perception that Kamala and another Democratic administration would be bad for things like AI. In the same comments, Kamala also mentioned investing in semiconductors. Based on the discourse on Twitter slash X, the comments didn't do a ton to reassure folks, but there you have it.

1:39Now, speaking of AI and the elections, Axios reports that more than half of US states have passed or are considering some sort of legislation around AI and political campaigns. States ranging from New Hampshire to New York to Florida to Colorado to California have passed laws, while Massachusetts, New Jersey, Pennsylvania, Ohio, and others are considering them. There are two very different schools of thought on this. On the one hand are folks like Senator Mark Warner, a Democrat from Virginia, who said that there have already been instances of generative AI being used to confuse and even suppress voters, and that, quote, I don't think gen AI developers or platforms are taking the misuse potential serious enough.

2:15And then on the other side are those who have been shocked by how little there has been. Every single article you see about this stuff references a January set of robocalls in New Hampshire using an AI-generated impersonation of Biden, because that's one of the only high-profile things we've seen. Now, the adversarial take on this is that all of these folks who want to sow chaos with AI are just waiting until the very last minute to do so. And this strikes me as entirely not impossible. However, I think that if you had asked me about a year ago whether we would have had this much, much more, or much less use of AI to try to interfere with elections, I would have said much more.

2:49But of course, that doesn't change the fact that these could be issues and one that the electorate wants to get out ahead of. Now, if anything, this is yet another reminder of how much the messy patchwork of state-by-state regulations can be a challenge when it comes to an emerging technology like artificial intelligence. Moving over into the Middle East, Mideast funds are doing nothing but increasing their investment into AI. According to data from PitchBook, the level of AI investing from government-backed Middle Eastern funds has increased 5x over the past year. One of those funds, for example, is MGX, which is a new AI fund out of the UAE, which is among those investors who are trying to get into OpenAI's latest round that we talked about last week.

3:24Now, on the one hand, it makes sense that these funds are getting in the AI game, surely because they're one of the only capital sources that is big enough to play at the level of AI. For example, the Saudi Public Investment Fund has$925 billion, UAE's Mubadala has$302 billion under management, and the Abu Dhabi Investment Authority has a trillion. MGX also joined a partnership with BlackRock and Microsoft that you might remember is aiming to raise as much as$100 billion for data infrastructure for AI as well. Some of the other interesting details from this article. Saudi Arabia is apparently in talks to create a$40 billion partnership with Andreessen Horowitz.

3:57Anthropic, however, ruled out taking money from Saudi Arabia, citing national security. And while there is controversy around these types of deals, there's also geopolitics at stay. Jared Cohen of Goldman Sachs Capital Institute called these nations geopolitical swing states. And as CNBC put it, for the US, having sovereign wealth funds invest in American companies and not in global adversaries like China has been a geopolitical priority. So much so, in fact, that President Biden is hosting the president of the UAE, and part of the discussions will include their plans for artificial intelligence.

4:26At the center of this geopolitical swing state strategy has been G42. As Reuters puts it, under pressure from the Biden administration, G42 this year began ripping out Chinese hardware it was using and sold off Chinese investment so it could work more closely with American firms. That was followed up by a$1.5 billion investment from Microsoft, which was announced by the Secretary of Commerce. This will be the first time that a UAE president has visited the White House. Still, the Gulf states are definitely playing both sides of this equation. China has been courting the Gulf states, which is of course putting pressure on the US to bring those countries closer as well.

4:58There are super interesting geopolitics at play with AI. It's one of the parts of the story that I think is looked at, well, frankly, not quite enough. And so one I'm glad that you're hanging out with me here to discover. For now though, that is going to do it for today's AI Daily Brief Headlines edition. Next up, the main episode. Today's episode is brought to you by Venice. Venice is a private, uncensored, generative AI app. It accesses open-source models to enable text, image, and code generation without the fear of being spied on or having your data exploited. Discuss anything with Venice without concern about it being monitored, sold, or given to advertisers and governments.

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7:35into ChatGPT and OpenAI itself. Its aggressive moves in the space paid off early, making it a major contender right out of the gate rather than just some also-ran or secondary player. Meta would end up taking an interesting and perhaps surprising place in the AI ranks as it decided to become the leader in open source and the strongest advocate for open source AI. Amazon, who had originally been scheduled to release a generative AI play around the same time as ChatGPT, upon seeing the capabilities of ChatGPT, decided to scrap that announcement and instead focus on their business solution, where they would become a one-stop shop for businesses to integrate lots of different models.

8:12Point being that throughout 2023 and into 2024, all of the big tech companies were figuring out their place in the AI fight. The one huge notable exception was, of course, Apple. Apple hung back. CEO Tim Cook would at most acknowledge that AI was going to be an important thing without really getting into what they did. And on the one hand, people were broadly accepting that Apple tends not to be the first, they tend to be the best. and they assumed that at some point Apple would get in the game. Earlier this year, of course, we finally started to get a peek of what that would look like. Apple announced Apple Intelligence because, of course, they couldn't just call it Artificial Intelligence.

8:45And the place that it seemed to take was AI for normies. They wanted to integrate specific AI applications onto the iPhone and other devices in a way that didn't risk or compromise your personal data and did things that were actually useful. It was a bummer then, when almost immediately after that announcement, Apple had to walk back the intended release date and disconnect it from the iPhone 16 launch, which happened, of course, this month in September. Now, since then, a lot of the conversation has been around what it means that Apple wasn't able to get Apple intelligence onto this phone for its release.

9:16Bloomberg's Mark Gurman wrote, Apple's new iPhone 16 reflects a slowing pace of innovation. He writes, the new iPhone has tantalizing camera improvements, but the device is emblematic of Apple's slower pace of hardware innovation. And throughout the piece, he talks about how initially each iteration of the Apple iPhone tended to reflect a significant update. Inevitably, over time, that started to slow down. Gurman writes, over the 17-year history of the iPhone, I count six genuinely new hardware designs. iPhone 3G in 2008, the iPhone 4 in 2010, the iPhone 5 in 2012, the iPhone 6 in 2014, and then we wouldn't get another one until the iPhone X in 2017 and the iPhone 12 in 2020.

9:53He writes, by the launch of iPhone X in 2017, Apple had moved to a three-year design cycle. Back then, that extra year of development made sense. The iPhone X was a gigantic upgrade with its ground-up redesign, Face ID, and other new software. But after that, the redesign lag got even lengthier. Apple now appears to be working on a half-decade-long cycle. For better or worse, the iPhone 16 has a nearly identical look and feel as the iPhone 12. Apple has added a lot of other features between 2020 and 2024, but it's undeniable that the days of frequent hardware changes are over. Now, of course, the relevant context for this is that it's not just Apple intelligence, which seems to be moving more slowly than people's perceptions of what Apple innovation should.

10:30However, this is where it gets interesting and relevant for our story today. Kerman continues, for a company looking to prove that it still has design chops, now that most of Johnny Ives' vaunted team has left the building, the lack of major overhauls in recent years is notable. Ive left Apple in 2019, but remained a consultant for a few years afterward. So it's very likely that we haven't yet seen a major new Apple product that he wasn't involved with at least to some extent. Of course, Skirman concludes with the fact that in the absence of hardware innovation, Apple has focused on Apple intelligence.

10:58He writes, where Apple is being a little disingenuous with its marketing, the company claims the iPhone 16 is the first model built from the ground up for Apple intelligence. The reality is that the processor and other hardware in the new iPhones isn't meaningfully better for AI. If Apple felt that hardware changes were enough of a selling point, it would have focused its marketing pitch around those features. Instead, it has zeroed in on Apple intelligence in spite of the drawbacks. Most consumers won't have access to the software for weeks, with some features not coming until next year. And it's still nowhere near as capable as rival AI systems, even if all of Apple intelligence was available today.

11:28There's little here that makes these iPhones a must-buy. All right, so hold on to that for a minute, and remember the question is, Apple innovation in the context of a post-Johnny Ive world. To round out the Apple intelligence story for the sake of completeness, there are some reports coming out today that Apple is trying to push the pedal to the metal, with Macworld writing, Apple Intelligence's best features may be coming sooner than we think. Apple is apparently working to complete the development of iOS 18.3 by the end of the year for a January release, which would see most of the major Apple Intelligence features coming.

11:58It also potentially includes some Siri features, which were originally slated for iOS 18.4, which isn't set to come until March. So Apple Intelligence will be here, slower than we'd like, but maybe faster than we think. But the interesting piece is this question about Johnny Ive. Johnny Ive has now been gone from Apple for five years. He was, of course, the original designer of the iPhone, and now he is getting into the AI hardware game. The New York Times wrote a long piece about Ive this weekend. The first part talks about what he's been doing since he left Apple, quietly building up$90 million worth of real estate in San Francisco.

12:32But the more interesting thing, I think, to this audience will be what he has been working on. At his firm Love From, the team there has three areas. Work for clients, including companies like Airbnb and Ferrari. Work for the love of it, which they do without pay. And work for themselves, which has included, for example, building renovation in all of that real estate. Note that the clients are not small deals. The Times writes that these clients pay Love From as much as$200 million annually. One of those clients, as you heard, is Airbnb, which came in directly through Airbnb CEO Brian Chesky. The Times writes Love From helped redesign the travel company's review system, introduced three-dimensional icons to its app and develop a concept called travel postcards, which led to the company's introduction of icons, destination properties including a replica of the X-Men mansions that people can rent.

13:18However, that's not the part that's interesting. The Times also writes, Mr. Chesky is a close friend of Sam Altman, whose company OpenAI has been at the forefront of building generative artificial intelligence. Last year, Mr. Chesky arranged for Mr. Ive and Mr. Altman to meet for dinner. At a Michelin-starred restaurant, Spruce, a few miles from Jackson Square, Mr. Altman and Mr. Ive talked about how generative AI made it possible to create a new computing device because the technology could do more for users than traditional software, since it could summarize and prioritize messages, identify and name objects like plants, and eventually field complex requests like booking travel.

13:47Mr. Ive and Mr. Altman met for dinner several more times before agreeing to build a product, with Love From leading the design. They have raised money privately with Mr. Ive and Emerson Collective, which is Lorraine Powell Jobs' funding arm, contributing, and could raise up to$1 billion in startup funding by the end of the year. The company that they are building has hired about 10 employees at this point, including writes the Times' Tang Tan, who oversaw iPhone product development, and Evans Hanke, who succeeded Mr. Ivan leading design at Apple. While the project is being developed in secret, and there are still big open questions about what the product would be, to say nothing of when it would be released, the idea apparently is a quote product that uses AI to create a computing experience that is less socially disruptive than the iPhone.

14:26Presumably this means a hardware device that allows you to interact with your digital world with less disruption to how you're interacting with the physical world. a technology experience that's not mediated by pulling something out of your pocket and hunching down staring at a screen. So what's notable about this? Well, first of all, this is just an acknowledgement that this is actually happening. Several months ago, we got rumors about this, although they came at a time when Altman was being critiqued for doing too many extracurriculars outside of OpenAI. We still don't have details exactly on how much this is an OpenAI project versus a separate company versus something incubated.

14:59However, it does appear that it's happening. Second, in addition to confirmation, we also got some sense of the scale. The fact that the company may raise a billion dollars this year suggests that they're playing at something significant. Beyond that, we're still in the realm of speculation. But to the extent that one believes that for all of the benefits that digital technology has created, one of the challenges is the interface which drags us away from our physical and real-life experiences, there could be something pretty powerful here. One of potentially the positive legacies of artificial intelligence.

15:29And so I think for now, what this really is, is catnip for the excited, an allure, an inducement to want to hear and see more. For now, though, that is going to do it for today's AI Daily Brief. Until next time, peace.