Big Tech is back on trial

25:50And in particular to say the open web needs to be protected because if it dies or the next new person who has an idea to make information will not do it on the web, that's death. Like I, that's just death. I think I even asked Sundar Pichai last year, like, why would anybody start a website? And he was kind of like, well, we have YouTube and that's not great. Like that's death. And you gotta, you gotta do something to protect that feedback loop so that the web persists in a way that allows search to exist, but also just allows more information to be published in open ways. I don't know what's going to happen.

26:25There's a remedies phase. There's the search remedies phase. It's just wild that this existential problem for Google is literally coming up the week that Meta is also facing an antitrust trial. And they seem to be in almost the exact opposite position where the government can't even describe what Facebook is. It's so funny we're talking about this. I've been looking at my notes because being in the courtroom, you can't have a phone enough. So I've just been writing all these notes all week. And Zuckerberg actually talked a lot about Google because he was getting asked about basically, and I don't know if we're officially segwaying now, but the FTC was saying, do you think that Instagram and WhatsApp could have been as successful with another company?

27:07and Google was kind of the main example. And I don't have the exact quote, but it was something along the lines of, he said, well, I think ability and execution are different things. And he basically chat on Google's organizational structure and he was like, look, I think they're technically excellent. I think that they often struggle. He was basically like, it perplexes me sometimes the decisions they make because they have the ability. and I think organizationally, I think he said they're challenged. And it's just funny in hindsight with like these two cases back to back. We should talk about the Meta case now.

27:45I don't know what's going to happen to Google. We are going to get the two remedies phases. Google, by the way, says it's going to appeal. And in its statement said, we've won half the case. I hate to be a scold. There were three counts. Google got one dismissed and lost the other two. That is technically one third. Just putting that out there. Just noting. And it turns out that losing by a little and losing by a lot don't actually matter all that much in cases like these. It's not – like the scoreboard doesn't really chart over time. If Google has to sell ad X and DFP, they have lost by a lot, and that's what they're staring at.

28:17But the meta case is fascinating, right? Not only because Mark Zuckerberg is apparently doing decoder bait live on stage in our nation's courtrooms, but because there isn't all of this contractual evidence that they were influencing the thing, even though everyone knows that meta ties its products together to make a stronger ecosystem. Like if you breathe at Instagram, that content ends up on five different platforms before you even like finish pressing the button, but that's meta controls it all. So it's like fine. And I think the government is really, it appears the government has very much struggled in this case.

28:52Yeah, I would say so. Um, first I just want to talk about what it was like being there because there's something beautifully egalitarian about being in court for something like this. Because, you know, Zuckerberg, he rolls like the president, right? He's got a ton of bodyguards. He's a third richest man on earth. And, you know, it was cool and made me have some hope for America just watching this all play out. So this judge, Chief Judge Boesberg of the U.S. District Court of D.C., Um, during like one of the breaks, uh, like 10 minute breaks, he filed, you know, that he was possibly going to hold the Trump administration in contempt over, uh, the, the El Salvador depretations and, and the illegality and question marks around that.

29:36Uh, so he's got a lot going on. Uh, Trump, Trump has called him a left wing lunatic. Um, the security in the court beyond just Zuck being there was very intense, uh, because of the fact that it was him doing the case. So it was really interesting to see this. and you know I expected you know I was there with a few other reporter friends and the first morning we expected you know throngs of cameras and lines of the public because you know it's a public courtroom anyone can go in I don't know if people realize this in this country you can literally just walk into this courtroom there was a guy fun fact this not to derail you but there was a guy who sat in the courtroom every single day I was there for the google search trial and read a book i i cannot explain to you why this man was there but he just he wore like cargo khaki pants and read what looked like a like john grisham novel every single day in court don't know why i mean the marshals are very serious like no electronics like um very funny mike isaac from the times was wearing his meta ray-bans at one point and he almost got thrown out uh because they were like is that recording um that's great but it was very cool just watching it play out and the pomp and ceremony of it all, but also just like the, okay, this part of the government, at least right now, seems to be working.

30:52And Meta's got all these high-priced, fancy lawyers. The FTC's team was, I would say, fairly young. I was actually surprised to see everyone look to be kind of in their 30s. And it was interesting to see the dichotomy of the two sides. But it's literally me a few other reporters like joel caplan i was sitting right behind uh ferguson the uh chair of the ftc the first day um would not talk to the press uh wouldn't really look at us um and so yeah that was just like what it was like being in the room it's this grand you know it's the chief judge's room so it's just very grand um and to watch zuckerberg walk in you know he still manages to have like one bodyguard come into the room with him um but just to watch him be regulated to like a common man, you know, like he doesn't, he doesn't get to like leave first or come in last.

31:46Right. He kind of filters out with everyone like shoulder to shoulder, you know, it was cool. Um, but the case itself, uh, I left DC really with the impression that our government does not understand how social media works, which is a bummer because I think there's a lot of really interesting questions you should be asking about if you're the U S about Meta's power. Should one company own this much of social media, really control fundamentally speech at this level? And unfortunately, the way they're attacking it, I think, it just makes no sense. Anyone who actually uses the internet would look at this case and say it makes no sense.

32:26So basically, the way the FTC is, because for an antitrust case, you have to define the market, right? And this is actually where this case has struggled and where it got thrown out originally is the judge found that the FTC had not kind of properly defined the market. So they narrowed it down to what they think is the market that meta competes in the US. And do you want to know the only other apps that are in that market? Wait, no, before we even get to that, I want you to explain what they think that market is, because I have read a lot about this now. I couldn't explain it to you. But you sat in court, like what is, how do they think about this market?

32:59They have narrowed it to what they call personal social networking services. So like What the hell does that mean? Yes, and I don't know. No one knows. I've covered social media for 15 years. I've never heard of this before. Wait, can I just add one more piece of information to that? Because I think this is, it is, you just mentioned that this case got thrown out once before. Lena Kahn's FTC got this case thrown out. Judge Bozberg threw out Lena Kahn's version of this case saying the market was ill-defined and made no sense. Yeah. Andrew Ferguson, Trump's FTC chair, is now in charge of this case, pursuing it even though Mark Zuckerberg is in the White House every day.

33:35And he's landed on whatever this definition is to cure the already muddled definition that Lena Kahn got through it. Yeah. And there's also a narrative out there that this was the Biden administration's lawsuit. It actually got first filed under the first Trump administration. So this has gone through now three administrations. So that's their idea. Yeah, so basically Meta competes for sharing between friends and family. That's the market they're trying to say they should break Meta up for. Okay. Okay, guess the apps that are in this market. Sharing between family and friends. Yeah. Facebook. Facebook.

34:11Besides Facebook. Like X? Seems like it would belong. Snapchat. Yes. Snapchat's a good one. There's only one more besides Snapchat. I keep thinking of messaging apps that Meta already owns, which is a bit of a problem. It's not messaging, right? It's sharing between... No, it's not messaging. But if we're sharing between friends and friends, that's where people share. No, no, no. No, not according to our government. Oh, my God. Okay. Snapchat and one other. Tumblr. No. Is it MeWe? Is it the one that you mentioned at the top? It's MeWe. What is MeWe? I don't even know what MeWe is. I just heard you say it before.

34:46Meta's lead attorney asked Mark Zuckerberg that very question on the stand, and he said he does not know. and he said have you ever uh heard of it before this case and he said no um i checked my email i've actually gotten pitches from me we over the last well what have you been doing um they are greatest threat to meta that exists they have some kind of blockchain angle um tim burners lee is involved frank mccourt who is also trying to put tiktok on the blockchain is an investor um so that's me we they have about 20 million i think something like that users worldwide um i have never used it i have never met a person who's used it um but that is that is the market according to the ftc so on the on its face that's just ridiculous right and you know i was talking to some other antitrust reporters who know the actual you know how the mechanics of this play out better and apparently the judge can define the market however he sees fit you know so it's not like the ftc's market is definitely going to stick or that meta's rebuttal of it will stick The judge may just be like, you're both wrong.

35:48And they probably are. Although I do actually buy Meta's argument a little more, which is that, no, we compete across TikTok, iMessage, YouTube, X, Telegram, Signal, et cetera, et cetera. I would say Zuckerberg spent a lot of time saying that YouTube and TikTok especially were his main competitors. And a lot of time, I would say throwing founder shade at Snapchat and saying, like, yeah, I wish we would have made it work. I think they'd finally beat a billion users and they still aren't 10 years later, stuff like that. So, because he, you know, it came out in the courtroom and it's been well covered, but that he tried to buy them as well.

36:29So this is the FTC's argument. And, you know, I do think they're also looking at some interesting things around network effects, around what happens when you reach this scale and there's so many people on a network And the switching costs is actually your friends not coming with you. And they talked about that a little bit. But I found their examination to be fairly meandering. There was a lot of like, do you remember that you wrote this Facebook blog post in 2008 about sharing on the newsfeed, like stuff like that. And Meta's argument about the market to be much stronger. yeah it just feels like i just have a really hard time looking at this in any way that says facebook doesn't compete with tiktok and taking that seriously like it just it just does yeah it just does some of the most interesting evidence was actually in the opening arguments meta displayed some internal data uh and we have it on the site um we've got a stream that i'm lauren finner have been contributing to everyone should go check it out there's a lot in there meta actually showed data that when tiktok was briefly offline um you know earlier this year because of the ban traffic searched to actually facebook a little bit more than instagram and then they had like snapchat way at the bottom like snapchat got like a percent um and snapchat actually got so mad about this that they had their lawyer in the courtroom a couple days later also because meta didn't properly redact the slides for the public saying like, you're revealing our confidential information.

38:05Stab's lawyer is like, don't tell anybody that nobody uses our products. The inside baseball, by the way, is that Meta tried to threaten Alex into not publishing their unredacted slides. And I was like, that's not, it's just not our problem. Like if you email us unredacted slides, we can publish. Yeah. It's a tale as old as time. You know, this has happened in like every good case. The Apple's lawyer was in there too, like saying we don't have faith. meta will you know not disclose our confident you know confidential info which i'm sure meta would love to right they they hate apple but um yeah and that's that's that's the high level of it and i'm curious like i'm curious how much of this case is actually just naked politics because i was watching ferguson on fox business after the first day and he point blank said we are doing this to make sure 2020 never happens again and he didn't say exactly what that meant but i think it It means, you know, the Trump administration has been very mad about how Zuckerberg funded voting drive stuff, mail-in ballot initiatives during the election.

39:09He actually thinks that Zuckerberg somehow played a key role in him losing that race. And then you have Ferguson on, you know, the president's favorite news channel saying, you know, this case is to make sure that never happens again. So I think that kind of shows the motivation here. I want to get to the substantive argument, but I'm actually fascinated by all of that aspect of this case in particular because, you know, the Google case we're talking about that was argued under the Biden administration. It was filed under the first Trump administration, argued under the Biden administration by Jonathan Cantor, who has been on our shows before.

39:43I'm trying to get him to come back and actually talk about it. But, you know, like I've asked Cantor, like, you're the assistant attorney general for antitrust. Like, how do you run your team? And he had like answers. You know, like he's like, here's how I do decisions. Here's how I like prioritize. And they were very good. Right. And that's the DOJ, which was basically a different law firm with a different boss. This case is the FTC, which was run by Lena Khan. Different law firm. Like that's the way to think about it. Like these DOJ and the FTC have different legal teams. They might have the same theories and the same goals.

40:15Different lawyers, different legal teams, different relationships to the president. Right. The DOJ is a law enforcement organization. The FTC is a law enforcement organization in a civil way. They're just different. And Ferguson in particular is caught up that new chair of the FTC under Trump, his Democratic commissioners were fired. Like Trump fired them. They're suing him. It will go to the Supreme Court and like a hundred-year-old precedent about whether the president can just fire FTC commissioners is going to come up for a review. so Ferguson is in this weird box right he has a boss who shouldn't be able to fire him but has proven that he will and like break the law and like go fight at the supreme court under this conception that the president is a chief executive of the country and makes all the decisions which is not true but kind of it's like very weird right he's just in this weird spot and he's got this case that was argued by a bunch of his predecessors and now everyone else got fired too because of Doge.

41:17So he's got all these baby lawyers and he has to play the role of like the fire breather that everyone else has to play now. And so of course he's on Fox Business being like, the reason I'm pursuing this case is because Donald Trump didn't get a candy bar on January 6th, 2020, or like whatever it is, right? But that's not why this case started. That's not why this case was pursued under Lena Kahn and Biden. That's not why they kept the case going. That's not why they kept the case going, even though Mark Zuckerberg has been in the Oval Office repeatedly saying that he'll make a deal for numbers that range from like $5 to like$3 trillion, like just numbers.

41:55Yeah. Like just a range of numbers. None of that's the real reason. But I think to keep Trump from firing him or making a deal or undercutting this populist antitrust movement that is pretty bipartisan, he's got to say this is about censorship. or Andrew Ferguson has fully converted to MAGA like our buddy Brennan Carr and it's about censorship. Like I don't, I truly don't know but that's just the weird uncertainty inside all of this. He is very much doing the thing you have to do no matter how you feel about it. Like whether he is just a zealot who wants to win this case or is just actually purely in it for the politics you would do the same thing which makes it weird.

42:35Like that is the speech you give on Fox Business no matter how you feel about actually what's going on in this case. I mean, he tells the world it's to keep, you know, J6, you know, Trump getting kicked off from happening again. But like inside the courtroom, there was nothing about censorship. Nothing. It was not in any of the FTC's arguments because it's not, you know, private companies can do whatever they want as it relates to speech. That's the constitution. That's how that works. Yeah. At least for now. And like MeWe, censorship never came up once in the three days Zuckerberg was on the stand.

43:08Interesting. Yeah, because the case is fundamentally about, did you perceive Instagram to be a competitor and buy it to preclude competition? Right. Did you perceive WhatsApp to be a challenger and buy it to preclude competition? And they absolutely did. I've been covering this company for a long time. Some of the emails they were showing and internal documents, I actually scooped back in the day. It was actually wild to watch internal documents that I remember first publishing being shown in this courtroom. And it was all about that. And it's totally true that, yes, they saw Instagram and WhatsApp as competitors.

43:41They weren't direct competitors, but they foresaw them becoming that to the point that, you know, there's words like neutralize that Zuckerberg said, you know, that these famous emails that have now been out for a while. I was expecting the FTC to show some new evidence. And there were a couple things. I would say the only time inside the courtroom where you could feel the meta trial team bench kind of just set up a little bit was when they started reading. They started having Zuckerberg read this memo to his exec team in 2018 where he said, I think we should spin off Instagram and literally said that companies tend to do better after they've been spun off.

44:21I'm telling you, man, do it before the government does it for you. If you think you're so much smarter than all these government flunkies, you probably are. Mark Zuckerberg, smart guy. Do it in a way that meets your interests, that makes everybody money, before the people you perceive are dumber to you do it to you on behalf of the American people. Just do it first. I continue to believe that is the smartest answer for most of these companies, to do it in a way that satisfies the optics of all these people, but preserves the business. Yeah. And like, I don't think they will learn that lesson. I think we're going to see a bunch of weird breakups coming.

44:55But it's just very funny that Marx saw it. He was like, oh, I should spin this out and let it become its own thing. Yeah. Because it'll go faster. Yeah. I mean, you can't deny when you look at these lengthy like exec memos he writes inside the court, like he's a brilliant strategist. And in 2018, ahead of the Biden administration, he was writing to his team. I think especially with the Democratic administration, big tech's going to get broken up. we should be thinking about this seriously and planning for it and um you know he saw all this coming and so at the same time though he's like grinning and saying i would totally buy whatsapp again it was awesome like um and that's the tension right is like you have him acknowledging and the fcc presenting evidence that he knew that the company was going to face these calls to get broken up and then i'm sitting in the courtroom and i'm watching the argument for doing it and I'm looking over at the meta people and they're literally like sometimes high-fiving as they walk out on breaks.

45:53Like they feel like this is a layup. Like they're just going to crush this case. And that's a bummer. It's a bummer for like taxpayers. It's a bummer for holding power to account. Like there is actually power here that needs to be addressed in some way. I think there's more interesting arguments to be made around interoperability. Why is there so much energy around the Fediverse? It's because people feel the actual cost of these platforms, which is taking your speech and your network with you. Should a platform as large as Meta have to allow interoperability? That's something I would love the government to look at.

46:26But instead, they're like, you're competing with MeWe. It is very strange because I'm so torn between my principles and how I feel about technology and the internet. And I would like using WhatsApp more if it weren't owned by Meta. Like, that's just how I feel. A lot of people feel that way. Yeah. Yeah. And yet every single thing I have seen and read about this trial makes me agree with meta. And there's just so many moments like so much of this discussion seems to have been basically the FTC saying to Zuckerberg and the other witnesses like you bought these companies because they were threats.

47:08And they're sort of like, well, sure. Like we thought that they might be, but also they are only as successful as they are because they are part of this company. And I like again, I hate how compelling I find that argument. The evidence is it's irrefutable. It is. And and I think the WhatsApp piece of it is my absolute favorite because there was a bunch of evidence presented that basically the WhatsApp guys were just happy. They were just like they remind me of like when Microsoft tried to buy Nintendo and Nintendo was like, what do we want with your money? Like, leave us alone. We're having a great time over here.

47:38but the the basically like you heard this more than i did alex but my my impression was basically like zuckerberg goes to talk to the whatsapp co-founders and he's like he's like don't you want to have lots of features and sell ads and take over the world and you're going to be huge and they're just like not really no no they said they wanted to be craigslist and zuckerberg was like should want to be craigslist so and then the judge is like how does craigslist work and And Zuck is like, well, Bozberg feels like a Craigslist guy. I have to say, if I had to pick one platform for Judge Bozberg, it would be Craigslist.

48:11Yeah. Or Nextdoor. And Mark was like, I didn't want them to be Craigslist. I saw this being a billion-plus user platform. And he literally called Yong-Kum, the CEO of WhatsApp, unambitious after he met with him the first time. And that really cuts at the FTC's argument because intent alone does not prove you did something to become a monopoly. You actually... As far as I understand it, the government has to show that meta degraded the marketplace by buying competition, that basically these apps, these services got worse. Prices went up. They can't argue that because it's free, right? Although they're trying to make some ad load argument that's not really even sticking as they're saying it in court.

48:52And then Zuckerberg can just say, no, like we and they're showing the board decks were like they projected to get to X user milestone. They way surpassed it way faster. nearly 3 billion people use WhatsApp now, which is the first time I've heard a WhatsApp user stat in years, something Zuckerberg said on the stand. Instagram, he was like, Kevin's sister and I, we thought we could get to 100 million users. And if we did that, that would be a success. And it got to a billion within a few years. And so it's hard to argue that Instagram and WhatsApp became meaningfully worse. Now, I know everyone is listening and going, come on, what are you saying?

49:29Like, I hate Instagram. I love it, but I hate it. Right. And that's the tension of the case is that people do feel strongly that these apps could be better if Meta and its incentives weren't behind them. But if you look at the marketplace, it's like there was a lot of time spent on Path, right? Which like I had not thought about Path in so long. I was just going to mention Path. Path caught so many strays in this trial. Oh my God. And it was because Zuckerberg also looked at buying path and path is an example of a startup that he didn't buy and it died and it's been lost to the you know to to tech history and he talked about it in exactly the same way which is i think why meta kept bringing this up that it was like it was the same like this is growing people really love it maybe it's a threat like he talked about it in the same terms he talked about instagram and it's like look at the one that they bought and look at the one that they didn't and it is uh i'm not saying those two things are like predictive right like correlation causation But one is Instagram and one is not.

50:29Well, okay. So I'm going to try to use Zuckerberg's own argument against him. Okay. Because it is true that Zuck's strategy memos, even if it's like dashed off emails where he emails a random engineer and is like, I have this idea. And the engineer is like, help. The ideas are always really good because he's smart and he's ruthless. And there's an email. It's one of the emails you scooped back in the day, Alex. Where he's like, my insight is that every generation comes up with a new sharing mechanic and I need to buy the sharing mechanic. Yeah. So we had friends and family updates on Facebook.

51:04Instagram is photo sharing. And then he clearly saw that messaging was the next one with WhatsApp. Right. Yeah. And this tracks everything Facebook and Instagram say about themselves. Yeah. All the action is in the DMs. They say this all the time. So you just see Mark was like, okay, I had this mechanic. I see the next one is going to be photo sharing. I'm going to buy that mechanic. What's the hottest thing there? Okay, the next one is obviously private messaging. I'm going to buy that mechanic. What's the hottest thing I can buy there? And he just did it. And I could not tell you what that thing is as it relates to Path.

51:35Checking into place. Like, what? What? I don't even remember what it was. But it wasn't something where I'm like, oh, there's some core mechanic here that will undercut the entire promise of Facebook. I think it was their idea that the graph would be artificially limited because Path was like you could only add so many people. They based it on that. There was like a theory. But that's not a sharing dynamic. right that was past theory and even by zuckerberg's own like framework it would never be a thing the location-based check-in thing was was real that was foursquare i know but it was like it was all sitting right there right this like sort of real life geographic thing was like it was almost that sure i'd like bring back path david you could check in on facebook federated path it's the it's the future you can have six friends and all of them are like why am i here uh but the next turn the one that they almost missed was what if we show you videos from people you don't know truly that was the next turn that was tiktok and they immediately they could not buy tiktok and they even said there were all these like chinese issues yeah chinese ownership issues of why we couldn't buy again he looked at it before anyone else he met the founder before it was even in the u.s because he knew this was coming and he was like i couldn't do it because of the china stuff and they had a hard pivot instagram and they had to compete yeah whatever you think of Instagram Reels, it is a better competitor to TikTok than YouTube Shorts, right?

52:55Yep. Because they absolutely had to compete and they are worthless and they're very good at it and they'll just do it. And that's the market distortion that the government hasn't been able to articulate. Like if Facebook had actually had to compete with an Instagram that actually had this new dynamic that Mark Zuckerberg had identified, things would be different. Both of those companies would be competing with each other. Yeah. But that's, it's, it's still illusory. To David's point, you will never know. and Meta's argument on the other side is pretty good, which is, well, I don't know, it's Instagram.

53:22Here it is. I am not an expert on the edge cases of antitrust law enforcement and maybe the FTC will finally get something through throughout this trial that makes sense. I have looked at an absurd amount of internal Facebook documents over the years and their data analysis, how they view the market and not stuff that like it's been PR sanctioned, like stuff leaked to me. I feel like I actually have a under the hood, real assessment of how they view the world. They think maniacally about time spent, about they talk like they're the UN. It's like population density. It's like we are at X density in X country.

53:59They're thinking so much broader than the FTC. They're thinking like, how can I suck time away from Netflix, et cetera, right? It's like the Reed Hastings quote is like, I'm competing with sleep, who was on the board of Facebook for like 15 years. That's how these companies operate because that's the business model. And I don't think the FTC understands how the business model informs the strategy, which is that if you're an advertising business model, really all that matters is eyeballs and getting as much of those eyeballs for as long as possible. And the only real monopoly Meta has is its network, is its network effects.

54:34And the thing Zuck is constantly trying to fight is a new thing coming in and eating into those network effects, whether it was Google Plus back in the day, which got an insane amount of airtime in this trial. It was very fun. I really felt like I was getting like a Stanford business seminar, like Silicon Valley tech history class. It was really fun. Google Plus, Path, like OpenAI, which we'll talk about in a little bit. Snap, these things that come in and like potentially siphon people away from the network, which leads to a thing called network collapse, which they did talk about in the courtroom.

55:08He just, like you said, he recognized these formats and goes, I can graph this onto my bigger network. I'll scale it faster and that will make sure that the startup that invented that form whether it's stories or whatever Can't reach a billion users. He kept saying over and over. He's like once you get to a billion users like Uh, the world is your oyster like he's like he's like I really like there's very few companies that do that Very few do it on their own He's like he actually made the case that none have done it on their own that they all have big parent companies youtube TikTok with byte dance Snap is close to a billion Yeah, I feel like is this more evan spiegel shade?

55:42He can't get to the magic number. It was around the Snap acquisition questions, yeah, is when he said this. And he knows that's his competitive moat. And it's strong and it's durable and there are monopoly questions there, but it's not like tying. It's not like what Google does with its products where it's just like he recognizes if he can get to something and strap it onto his scale, he'll kill it. And he's done that very well over the last 20 years. We'll see what happens with this one. And again, I don't want to overdo it on the legal inside baseball piece of it, but you got like a doged up FTC that fired everybody run by a guy who has to be a fire breather on Fox News to please his boss who has absolutely shown that he will come right up to the edge of the law and ask the Supreme Court to overturn a hundred-year-old precedent and fire people that he's not supposed to fire.

56:35like that's not a recipe for great lawyering right and like i think the doj under biden canter specifically like having talked to him about how he ran what was effectively a law firm i was like oh they're doing good lawyering i think they had a uh they had better cases to deal with because google does have all these deals i'm very curious the doj has the apple case which has the same dynamics as meta here in big ways right it's just apple they're just like well we have the iPhone. We can just do whatever we want. I message. Here it is. It's done. We'll see. Right. A lot of this is once you have, once you own a platform, how dirty can you be?

57:12And is that illegal? Right. And some of the stuff with Apple is like, we all know it. App developers, like they, they call me and yell at me to start in-app subscriptions because that's where they make the money from. Is that illegal? I don't know. But that was started under one administration and now it's come to this one and Pam Bondi is going to pursue Apple. Like there's just an element of that, which is like, is it the government's case? Is it the law that's bad? Is it that Meta's legal or Apple's legal? Or is it just a bunch of Doge kids don't know what they're doing? And they're up against Meta's lawyers, right?

57:45Yeah. And I think there's also an element, they're leaving DC and talking to a lot of the Meta execs, you know, because they're all there and, you know, it's off the record. But just the vibe I got is like, I think there's a consensus that Trump is going to be harder on all these companies than they thought. And that if they thought, if they could just kiss up, that things would be easy. And I think Trump is a little smarter than they maybe gave him credit for in terms of leverage. And I think Meta would have very much liked to settle this case, not necessarily because they were worried about losing it, but because it's a massive pain and it's bad headlines, it's Zuckerberg's time, a ton of money, et cetera.

58:22The discovery process, which is very embarrassing. but yeah I would hope I would think that and you know the journal had a great story about this that how Zuckerberg pushed to to you know settle this I think he probably thought that he would might be able to because of the the January stuff that we talked about all the MAGA changes that they made and Apple's going to go to DOJ and like I I think all these CEOs are in for a kind of a leopard face moment in the next year or so that photo that everybody has of all the CEOs standing on the dais behind Trump at the inauguration is going to end up being iconic for reasons that none of those CEOs like.

59:00Exactly. Is my ongoing thesis. Actually, can I respond to that in like just a slightly different? I agree. That photo will be very embarrassing for all of them because the leopards are eating all their faces. It's happening. Trump wants these wins and he wants to settle. Like he wants to win the trial so that he can negotiate the settlement that ends the appeals. Right. That's that's what you do. The tariffs on China are five billion percent. And then we're going to make a deal. Trump. The thing that kills me at that is the expectation they had going into that photo was corruption. Right. Tim Cook is going to personally donate a million dollars to Trump's library and that'll take the DOJ case away from Apple.

59:35Naked corruption. That is a nakedly corrupt thought. There's nothing about that's fine in the sense that like a lot of people believe the government is corrupt. And so like Trump being even more corrupt does not offend them. But it's not fine in the sense that even when we were covering the Google case today, people on Blue Sky were replying to me being like, they'll just buy them off. What? That means that the system is collapsed. You don't believe in it anymore. And maybe you didn't before, but the level to which we have accepted that just naked corruption is how this works is a little more dangerous than I think people are giving it credit for.

1:00:20Like if you believe that Google can be like, ah, screw it, write him a check and it'll go away. And that is, maybe you don't think that's right, but you think that is possible. You are, it's gone. You have to not believe that's possible. You have to actually hold everybody to account and say, actually, that's corruption. So I'm not saying call your senator and tell them to break up Google. Just an idea that you could do. I'm saying you can't, if you give into nihilism that the corruption has already won, you've just given in. like you should not feel helpless. You should feel outraged. The expectation of that photograph was corruption.

1:00:53And there's, Talik said, there's a little glimmer of hope that it hasn't been just overt corruption from the jump. Like they at least have to go to trial. I don't know what's going to happen after that, but they at least have had to go to trial. I think Trump is more savvy about power and leverage than the CEO thought and knows that the moment he just starts taking - Or most of his staffers, as we will come to. Yeah, yeah. And the moment you just start taking any check to kill anything, you've lost power. And I think Trump cares about power. Yeah. All right. We got to take a break. We're going to come back.

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1:04:06All right, we're back. David tells me that we just spent an hour on Antruss News. So we got to talk about products and rumors and stuff now, right? Things, not ideas. No more ad tech for the rest of this episode, I promise. I'm not making that promise, Dave. All right. Right. In the middle of all of this, Alex, you and Kylie delivered a pretty big scoop about OpenAI, that they're going to build a social network, which I will not say people reacted to with warm thoughts. Tell us what is going on here. Yeah, I would say it was mixed. I saw a lot of the obvious, like, oh, great, more AI slop stuff.

1:04:48And then I actually, you know, I think people who work in tech get it and understand what's happening here. But yeah, OpenAI has been for the last several weeks showing off this internal prototype that is a kind of X-like social feed with a bunch of AI stuff in it. apparently they're calling the post yeets which for early blue sky users was the name for posting on blue sky affectionately before Jake Robert killed that. Well no they were skeets on blue sky. Oh wait they were skeets not yeets. Somehow slightly worse on blue sky. No it's not slightly worse it's horrible. It's a joke that is fully out of control Oh my god.

1:05:25And people still call them skeets even though I believe blue sky would prefer you didn't. No Liz Lopato calls them skeets no one else calls them skeets. More people Well, then you want, call them a scheme. Does yeet come from something else, though? Yeet's like a gamer term. It means like throw a thing into the ocean. Yeah. Yeah, yeah, okay. So they're yeeting and - No! What the fuck? I'm going to yeet myself off this podcast. That's right. See, that's, you understand what you're doing. No, so Sam Ullman has been going around to conferences and private dinners, et cetera, and talking about how he wants to compete with Elon and X, and they have a prototype and we scoop some of the details.

1:06:04It's very early. It's like, it's early, but the way OpenAI works is like something that's very early could actually ship within like a few weeks. So especially after I think the reaction to this and all the headlines, and I think the story got a lot more attention than maybe we even expected. So maybe that pushes them to ship faster. I saw Kevin Wheel, their CPO, who was the former head of product at Instagram, gave an interview to Bloomberg. shortly after the story saying like, we need to find a way to let people share stuff that they do with chat GPT more easily. So they're already starting to hint at it.

1:06:40This puts them on like a direct, you know, collision course with Elon, obviously, but also Zuckerberg, who is adding a feed like AI social network to its assistants later this year. They're actually going to turn the Meta Ray-Ban app, the companion app into the Meta AI app. So you'll still have to have it to pair with the glasses and they're going to ship new glasses later this year, but they're going to have a feed as well in there. So this is like a Grok and X merged, right? They're the same company. If you're on X, you'll see Grok, you know, suggesting things and their responses. It's everywhere in the app and now the product teams are merged.

1:07:16So this trend is happening across the industry. So it kind of makes sense for OpenAI to go here. You know, ChatGPT has been a, you know a single player experience and i think open and recognizes that to you know they're probably not thinking about this it this way but really to justify this in you know an incredible valuation they have and all this money that they've raised they they need to make money um beyond just selling chat gpt subscriptions though i don't think they're going to do advertising anytime soon uh i think this would be a natural this is why i said we may still talk about ad tech wait what's the money if they don't do advertising they start a social network and There's an advertising.

1:07:51What's the money? What's the money? Yeah. Just running ads in the feed. So it is advertising. But it's not advertising in ChatGPT. It's advertising in social GPT or whatever. In the feed that will probably... They may do a standalone app. The prototype is standalone, but they may just merge it with ChatGPT. Their CFO, Sarah Fryer, was the CEO of Nextdoor, which sold ads in a feed. They have a lot. I mean, they could do this. It would make sense. and it begins to explain to me why zuckerberg has been so focused on them beyond just the model competition i think and he was it was kind of interesting like publishing the story when i was in the courtroom like the same day i'm like watching him on the stand saying like look once you get to a billion users um you know really like it's it's very hard to compete and you can fan out and spread out i think was his words and do a lot of different things and i think he probably saw this coming.

1:08:45So OpenAI is approaching a billion users. They'll probably hit it this year. And they're just in this huge expansion product mode, right? So they're going in a bunch of different directions, but I think the social piece really makes the idea of ChatGPT being more than just a Google killer. Potentially now they also want to be a meta killer. So this is Like the kind of ever expanding ambition of Sam Altman, I think. This runs into one of the big trends right now that I find like completely befuddling, which is that everyone is now convinced that lots of people really want endless feeds of AI generated content.

1:09:27And maybe they do. Maybe I'm the one who's wrong here. But like, you know, listening to Mark Zuckerberg sit on stage and say people really love ads. people love ads so much that we've actually considered at one point having a feed of just ads because people like the ads as much as they like the content, which to me reads not as we have great ads, but we have shit content is like that. You should take that as an insult, not a compliment. But anyway, and then like everybody's building these creative tools so that it is easier and easier to make stuff with AI and share it on your feeds. And we're like running headlong into all of my social feeds are going to just be absolutely overrun by AI content.

1:10:06They already are. And it seems to me what's happening is OpenAI looked at the Studio Ghibli thing that took over the internet for two days. And everybody was sharing the stuff they made in ChatGPT somewhere else. And they look at that and they're like, okay, no, we need to own this whole cycle. And to me, I'm like, no, it's just AI all the way down and this is a disaster. And so I'm like, I'm so, I don't know, I'm just lost between these two different things that both seem to be happening. And it does not seem like a thing anyone should want. I mean, Eli, what you said on Blue Sky is right. Everyone wants their own distribution.

1:10:39I don't think they want these images and the value and attention around them being just monetized by Elon Musk, who is actively suing them and trying to literally keep them from existing. dude why won't sam altman quit x and join blue sky like you want to compete with elon you've got this big problem he's still on his platform every day like just do it stand up your own mastodon server i don't do something other than that the open eye of people are constantly yeah complaining about elon i'm like you're just giving him training data like your entire company is posting non-stop on x all day long and as a result the ai industry is very active on x like x has lost a lot of audience but i would say the ai industry remains one of its core audiences and i do think open i would have a uh pretty compelling uh pitch to take that audience with them on a on a different surface and it could end up being like uh even more split right where you just have like people who like elon's version of ai on x uh and and the audience's fracture even more i think we're just going to continue to see this constant fracturing yeah i just like it's it's funny to me like you can stand up your own social network you can you can do all this stuff or you could just stop using the one owned by the guy who hates you who's your competitor but you still gotta eat where are you gonna eat threads like anything like find some obscure european mastodon server and be like i live here now and like a bunch of people will come with you because you're sam altman here's where the news is gonna be yeah right like here's where i'm gonna lower case sad boy tweet about noah miking like you can do it anywhere you want but like he chooses to do it on x for some reason and i'm assuming that reason is the absolutely bizarre relationship between those two men i think it's also network effects it's what we're talking about with meta it's just the ai industry is there it's where companies still announce news tech tech companies especially um and i i think open i sees an opening because they are the hottest tech company in the world right now to take that audience.

1:12:41And I think the idea that if you're Sam Altman, people will follow you to your obscure Mastodon server, I'm not sure that's true. And I know for sure that if you're Sam Altman, you're not sure you want to find out. If you have the confidence to just roll up to the richest people in the world and be like, here's what I need, a trillion dollars. You should find out if people will follow you to a Mastodon server. There's one person who has the sheer audacity to be like, I need a trillion dollars to buy every GPU in the world. I mean, Elon Musk spent$44 billion to make himself cool on Twitter. Like, it's a harder thing to do than you think.

1:13:17Stargate is just to fund the biggest Mastodon server in the world. There's this quote in your piece, Alex, it's by somebody who runs a different AI company. They're anonymous. The Grok integration with X has made everyone jealous, especially how people create viral tweets by getting to say something stupid. Neil, the next thing I said was about to be this quote. This is the funniest quote I've ever read. It's an incredible quote. it has just made me think about AI art and how people react to it and the feeds being full of art and like why people are into it and we've written a lot about this like Addy and I have like spent a lot of time being like AI art it's like why we it's very much like someone telling you about their dream like that's how I always feel like has someone ever excitedly told you about a dream they had and you're like cool and it's like the most important thing that's ever happened to that person and just the disparity in experience is just too vast to be overcome Were you riding a dolphin?

1:14:08Great. Like that's like how I feel every time. I see AI art. It's like very good. And I think the Studio Ghibli stuff hit because of the incredible juxtaposition of the art style and the creator hating it. And then you're making Guantanamo Bay memes with it. Right? Like there's something in there that was wrong. Like on a fundamental level, the thing itself portrayed the great conflict of our time. And then you turn to the next one and you're like, oh, you made an action figure of yourself? Is that, oh my God, is that your MacBook? Like who gives a shit? Like who cares? And I think the AI industry has really misconstrued what the interest was.

1:14:46It's not people talking about their dreams. It's people stealing artistic expression and that driving a wave of conflict. and then people being able to participate on either side of that conflict in ways that drive the conflict forward or amplify it. No one was outraged when people made their weird action figures. No one felt bad about it. No, it's just boring. It was just like, here's some stuff. There's even diminishing returns on the outrage, right? You can't run the Studio Ghibli playbook over and over and over again. And I think, I'll be honest, that the novelty factor of I asked ChatGPT to do something and look at this wacky thing it came back with has lasted a lot longer than i expected uh it's still very much there this is the thing that a lot of these companies are trading on is like people think grok is silly and they they like that and maybe that'll last forever no but the even even the grok one the conflict with grok is really obvious right grok is often like yeah yeah you know it's pretty racist and that's hilarious right like it's subversive but it's not like i too can type elon is racist into a text box and then screenshot a robot controlled by elon like there's nothing subversive about us doing we just do it all the time right but but is that is that going to be funny forever like this is my point i just i don't know how many versions of that thing we're going to get before this just stops being interesting i mean open ai's user base doubled after it launched that chat the upgraded image generation so you can right because it's a differently a lot of people went to a website after that happened that's what happened a lot of people went to a website it's not the same it's just not the same thing like there are a lot of people and the numbers are crazy i i absolutely agree with that but like a lot of people went to a website yeah i just i just i i too have a problem with like uh the studio ghibli thing in particular like the fact that they picked the style of the guy who called what did he call ai he said it was like a the studio ghibli founder didn't you say something about how it's like a it's like a crime against humanity the fact that that was the style that went viral feels feels wrong um but i don't think we can discount the interest people have at scale with this stuff uh and open eye sees it in their numbers sure maybe it's like fleeting um or maybe it's a gimmick that can only be replicated so many times like you're saying but i think look i think we're professional writers and we i'm sorry uh insult to life itself just insult to life itself yeah we're we're professional writers we like our it's our jobs like say say things on the internet i think most people look at x or threads or blue sky or whatever and they don't really know what to say and i think the the tech product view of this uh just talking to the people inside these labs is that like we see a a demand for people who want to engage and don't necessarily know how to or are scared to and AI will help them.

1:17:47AI will give them ways to express themselves that they could not before. And it's reflected in the metrics of how people are gravitating towards these products. So yeah, I think the culture class is going to continue to have a lot of hand-wringing and rightful criticism of how these companies approach things like IP. But I also think we can't deny that this is a trend that is here to stay. I at least think so. I do buy that, but I think that's That's actually a really great definition of AI as a tool in a way that I really like. AI as an enabling tool for lots of things, I think, is actually really exciting.

1:18:25Yeah. But what I see so much of the bet here being is that AI is going to keep being sort of the main character. And again, it has been for much longer than I expected. So maybe I'm just wrong. And maybe this thing is so funny and silly and weird and unexpected that people will keep wanting to interact with it forever. but it just that just does not feel right to me i don't know i don't think the open eye social network is going to be just like an endless feed of only people's like studio ghibli photos i think like it's a jumping point to build a ai native social network that uses ai throughout the entire posting and editing and publishing and recommendation process that like every other established company is now trying to retrofit and open eye has this insane highly engaged user base that I think they think they can fan out and take this opportunity, especially with what Google's going through, like we were talking about, and the fact that these other companies seem to just not get product in this way.

1:19:23So yeah, I think it's going to be a disaster, but it's also the future, which is like kind of AI in NHL. The verge, everybody.

1:19:35There's other stuff going on in AI world. OpenAI debuted GPT 4.1, and then sam was like i promise i'm gonna clear up these names god they're so bad what is going on here like it's it's better right i personally feel so vindicated by this because i've been complaining about the names on this show and elsewhere for forever that when you go it's like a drop down of nonsensical numbers where they don't even go up in order in the way that you think that they should uh and so to have sam be like yeah we know the numbers are ridiculous please make fun of so we're going to fix it made me made me feel a lot better something else open a and google share besides their bitter ai rivalry is a horrible uh naming convention um but my alex am i crazy or is open ai on like a pretty wild product run here like it's it's really the there was deep seek and then they were like oh we're gonna launch some stuff and like boy have they it seems unprecedented uh to a degree where it's like hard to even keep up as someone covering it my understanding is this model architecture is their first and i i still feel like i'm trying to understand really what this means practically but like agentic model that has now it's the first one that does the deep thinking stuff but also can hook into all of the chat gpt products so it can pull in web results do multimodal it can like um apparently like do really interesting weird things with images and like edit them and turn them around and like people are dropping an image to have it reverse engineer where it was taken.

1:21:01So the YouTube, Google Earth guy, viral stuff, but with AI. So it's a smarter model that now hooks into all of the product, whereas the models have so far been fairly sequestered to certain aspects of ChatGPT and what it can do. That's my understanding of it. But they're on such a tear, it's really hard to keep track. It's interesting because the tear seems to be more related to... making better products out of all the products. Yeah. Or like attaching capabilities between products to each other to get to the next step, as opposed to here's the next new model, which is smarter than the last model by however many percentage.

1:21:44I do wonder if that's because Kevin Wiles there, he's the product guy, and he's like, make the products good. But there's also a part where it feels like the frontier model is not going to get so much better that it drives usage. You actually have to like make products. Yeah, I've been writing about this for a while. The competitive nature now is at the product layer, not the model layer. The models are commodifying. Yes, they still feel different when you use a new one, but I think ChatGPT, they're trying to make it like an operating system for your life. I think they want to be Google, Meta, all productivity software.

1:22:17where it's one of the grandest visions I've ever seen in consumer tech in terms of we are going to use AI to try to do everything. And then he's working with Johnny Ive on hardware, right? That you tie that into your own hardware over time. What if humane but good? What if humane but good? I mean, and to be clear, this is the story you have to tell in order to raise the amount of money that they have raised. It is, but you look at what they're doing to ChatGPT and that is clearly the goal is like to encompass more of your everyday life. Yeah. I mean, there was the, was it this week that they announced the thing where it'll remember all your past conversations?

1:22:53Yeah. The memory stuff. I feel like that didn't get talked about enough that that's like all of a sudden, if you can have this thing be sort of accumulating over time as you use it, the possibilities of stuff it can start to do for you is really powerful. It's lock-in too, because it knows more about you and it's way easier to, it's way harder to want to switch to another product because Chachi Petit knows everything about you. Totally. I realize I'm saying this is a guy who's been on a podcast for 15 years, like has made a lot of YouTube videos. And I just don't want to be perceived in this way.

1:23:22Like, I don't want the computer to know me. It already does. It's already showing you ads for like random car stuff. Oh man, my computer so believes that I'm going to buy a Volvo EX90. Like whatever, whatever's going on in here, it knows one thing and it's going to sell me a goddamn Volvo EX-9. I feel like your computer's wrong about that. It's so wrong. It's not correct. Also a Range Rover. It really believes that what I'm going to do is buy a Range Rover Sport. That feels closer. It's not. I've looked at the reliability records of that vehicle. I just want to like, do you guys use the voice mode on ChatGPT?

1:24:00All the time. I was actually just looking at my history to be like, what would this thing think about me? and it will think that I'm a six-year-old girl who occasionally asks for pickled red onion recipes. And that's... That's like, those are the two things that happen. When I was in DC... Yeah, we use it all the time. Like, Jackson, I use it all the time. Yeah, when I was in DC, I was like, before I was the first day of court, I was like laying in bed and I was like, I'm going to court tomorrow, this court. Like, I'm not exactly sure how it's going to work. Like, what do I need to know about going in?

1:24:27Like, what can I not bring? And like, it was amazing. Like, it was like, this is... I can't believe it just, it works. Was it correct? Yes, it was correct. Yeah. And that's like, I don't know if they're doing better grounding with like real data that they're stealing or what, but it's, excuse me, buying licensing. Now I have to disclose it. Okay. Licensing deal with our company. Somewhere on the back end, it's there. It has nothing to do with us. Yeah. But no, I think like the combo of like the desktop product really starting to encompass like all the productivity the voice being very good and then them doing hardware with johnny i think is like this insane play for everything division is really big and i think you're right that it is the the shift has really happened away from like we i think pretty quickly we're going to start to have conversations internally at the verge about whether we cover new models because it's it's rapidly getting to the point that it doesn't matter that much it's like it's like covering new versions of AWS software.

1:25:26Like, it's just not meaningful to most people in these specific ways. I don't think we're there yet. We could just do a story stream where it's like new model came out. Yeah, like new model came out. It's 4 % better. Well, I mean, you got to cover the new models because they're all cheating on the benchmarks and that's actually the story. Well, yeah, agreed. Agreed on that front. But yeah, we are very much moving toward like what can you build to have people do with these things. And that's going to be the only thing that matters. I continue to believe. I mean, the whole industry has been chasing what is the new input paradigm that overtakes multi-touch forever.

1:26:05Like even Apple has been chasing. I'm constantly joking about Apple introducing the Apple Watch to the digital crown because they – in their head, they have like a system, like an equation that makes good products. And they just learned it from watching old Steve Jobs keynotes. Like they reversed engineer to Steve Jobs keynote. And he's like, well, he did a click wheel. He did – U2 was there. and he said it was small. And then they got to the Apple Watch and were like, okay, it's got a wheel. U2 is here and it's small. Like, that's just how their brains work, you know? Everyone has been trying to move on to say, okay, this is the new input.

1:26:40This is the new user interface paradigm that's going to drive the next form factor, that's going to drive the next wave of apps, whatever it is. And it is true that with AI in particular, what you have is natural language voice. You can just talk to the computer. It'll talk back to you. It's very compelling. And then we still don't know how any of that's going to make money. And then at the same time, right, there's the big cursor deal, which seems like a really big deal. And then OpenAI is going to potentially buy this company called Windsurf for$3 billion. There's this whole enterprise set of applications that has kind of nothing to do with, is this a new input paradigm?

1:27:15It's much more, oh, we're going to make everybody vastly more productive in this specific way. And that's where all the money is. And that does feel like where all the money is. Yeah. Yeah. but I the part where Johnny Ive is like I can take the new input paradigm and make the next great product it even if it's Johnny Ive even if it's Sam Altman even if they have direct access to the next model from open app like it's still uncertain because it it hasn't been proven that that's what you want to do all the time I'm actually very excited about this next moment because I wrote a feature for Wired like 10 years ago now basically proclaiming the beginning of the voice era you were a little early.

1:27:53I was right and I was wrong. It happened. Everybody started doing voice, but in much more limited ways than I think I was expecting. But we're now at the point where the tech works. It's not perfect, but it works. The basic, can I speak and be spoken to with a computer in a useful way? It works. And now the open question is, so what? What do we do with that? And no one has good answers to that yet right like it's it's fun and interesting but we're sitting on more and if there's going to be more it's coming i think we're going to be talking about the johnny thing with sam altman in the coming year to two years i really do i think uh johnny's biggest funder for his new company is lorraine pal jobs like it's and he's hired all of the original apple team design team uh if you're gonna bet on anyone coming in as like a wild horse and and doing something interesting i would be paying attention to that yeah and meanwhile apple is going under whatever Siri shuffles it's undergoing, right?

1:28:51Like, who knows? Who knows if they can pull it off? But, you know, Apple, we started by talking about opening and starting a social network. Apple still has the most important distribution of all. Yeah. Right? It's just, like, in your pocket. Like, Oprah at the Apple TV launch being like, a billion pockets. Like, if they can get it together, like, maybe they'll get there. But it's interesting that they're wavering and Google is wavering. And then Sam Altman's like, I need a trillion dollars. Yeah. And I just don't know how I need that place. All right. We got to take a break. We're going to come back with a lightning round.

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1:30:44See how much you can save versus the other big guys at cmobile.com slash switch. We're back. It's time for a lightning round, which, as always, begins with America's favorite podcast within a podcast. David? We're doing this. We're like 19 hours into the Vergecast. We've talked about ad tech. Now it's time for what everyone is here for. One of the two best podcasts within a podcast. And we've gotten a fair amount of feedback that suggests that we are number two. and I'm not interested in that feedback. It's time for Brendan Carr as a dummy. It does feel like we should say thank you to everyone who voted for us in the Webby Awards.

1:31:21Oh, yeah. There's not a category for podcasts within podcasts, but we have issued a stern letter to the Webby people and we're coming for you. If it comes up next year, it's going to be us against Munch Squad and it is going to be a battle to the death. It's pretty good. All right, it's time for Brendan Carr as a dummy. Brendan Carr, real dummy this week. Brendan Carr is the chairman of the FCC. He was a regular old commissioner under Biden. he wrote the Project 2025 chapter about the FCC. Trump made him chairman of the FCC. He's been dumb for weeks. He's just not a smart man, but he is a naked political animal.

1:31:55Like that's what he is. That's what this segment is about. Every week, this man does something nakedly political to curry favor of Donald Trump and threaten the speech of Americans. Those are the two things that he does every week. And this week, it is particularly bad. Like particularly bad. So Brendan loves to threaten or even file what he calls news distortion cases, where the FCC, which licenses the nation's airwaves to broadcasters, can say to various news organizations, the broadcast news organizations, NBC, CBS, Fox, hey, you're distorting news. You're taking the spectrum we're giving you and doing something misleading with the news on it.

1:32:35They are not supposed to do this in most cases, right? The First Amendment protects those broadcasters, and you can air what you want to air as long as you're not being willfully misleading in particular ways. And it is true that Fox owns a bunch of broadcast stations. Sinclair Broadcasting, very conservative, owns a bunch of broadcast stations. And yes, NBC and CBS and ABC also own a bunch of broadcast stations. So you can see already Americans have choices. But this week, the Trump administration is under tremendous amounts of criticism and controversy. because it mistakenly deported a man to El Salvador, Kilmar Abrego Garcia.

1:33:13It did this with basically no evidence. It has admitted to the court that it had no real evidence and that this was a mistake. It called it an administrative error. And instead of bringing a man back, which the Supreme Court ordered it had to facilitate, it has doubled down now on calling him a terrorist and a gang member. The evidence, by the way, of this man being a gang member, is that he was wearing a Chicago Bulls hat and a t-shirt with dollar bills on it, or a sweatshirt with dollar bills on it, where the presidents on the bills had their eyes covered, their ears covered and mouth covered.

1:33:45And somehow that indicated that they were in a gang. I don't know, man. That's the evidence the government has proffered this week for evidence that he's been in a gang. It's not great. It's nothing is what it is. It's nothing. It's nothing. I mean, this is a, he was in the country legally, but he had a court order saying he couldn't be deported because he was in danger, if you want to tell Salvador, from other gangs there. So the Trump administration has mistakenly deported him. They've gone up to the Supreme Court, which is rule that has to facilitate his return. They've gone to the court again.

1:34:18The court is very angry with the Trump administration now. I don't know how this is going to play out. But news organizations around the country have been covering it and covering in particular the fact that there's no evidence that this man was actually in MSN 13. Like none at all outside of a hat and one confidential informant that nobody has ever produced. You were good at none at all. You were set there. That's none at all. So Brendan this week has decided to threaten Comcast. Disclosure Comcast is an investor in Vox Media, but truly they dislike me. He decided to threaten Comcast this week.

1:34:54He said, Comcast outlets have spent days misleading the American public, implying that Abrego Garcia was merely a law-abiding citizen, just a regular Maryland man. When the truth comes out, what is the truth, Brendan? They ignore it. Comcast knows that federal law requires its licensed operations to serve the public interest. News distortion doesn't cut it. Abrego Garcia came to America illegally from El Salvador, was validated as a member of the violent MS-13 gang, a transnational criminal organization, and denied bond by immigration court for failure to show he pose a danger to others. Why does Comcast ignore these facts?

1:35:27Because they're not facts, Brendan. They're just not facts. And actually, the job of news organizations, we run one, is to question the government, is to take the political figures of our government, to take the attorney general, to take J.D. Vance and say, is that true? Is it true what you're saying? We've given you the power to jail people. The state has a monopoly on violence in this country. You have that power. Are you using it well? Are you using it with justification? Are you using it in the name of justice? They're not. Like whatever you think about this case, whatever you think about deportations, in this case, they have not given this man due process.

1:36:08They shipped him off to El Salvador. And the only evidence they have actually proffered is that he is wearing a bull's hat.

1:36:18Like, great. That is a controversy. You can cover it the way they're covering it on Fox. You can cover it the way they're covering it on Newsmax. You can cover it the way they're covering it on MSNBC. But the government doesn't get to go threaten the news organizations covering it. Brendan Carr doesn't get to show up and say news distortion doesn't cut it. And the only reason he's saying it is because NBC owns some broadcast licenses and he has the authority to say it. He can't say it to us. We're on the internet. He can't say it to MSNBC or Fox, which are cable stations that he doesn't have control over.

1:36:48this is just naked political posturing because some of these stations run over the broadcaster waves and even in his mentions i will point out even in his mentions people are calling him an idiot like this is just wrong it's wrong for the person who runs the nation's communications infrastructure to say that not supporting the administration's lies is news distortion actually what he's saying is i support our vibrant broadcast networks which reach most americans pushing hard on the truth. Whether or not you agree with mass deportations, whether or not you agree with the Trump administration coming down really hard on everybody who was illegally in this country, fine.

1:37:29You can think what you want. But in this case, the lie is obvious. In this case, the evidence has not been produced and it is not news distortion to say the government has not produced this evidence. He's such a flunky. It drives me bananas. It is nice that people are starting to calm out on it. I will say that. But it is just obvious that just like Andrew Ferguson, there are things he has to say and there are lines he has to accept from the rest of the administration in order to preserve his job. And Brendan does it with such glee that you have to just accept that he wants to. I think that gives him too much of an out to say these are things that he has to say.

1:38:09I think all evidence about Brendan Carr suggests that he is oh so so happy to be saying and doing all the stuff that he is saying and doing. He's like Mr. I'm out here having the time of my life guy like. Wearing the head of Donald Trump. Yeah. None of this is making him sad on his insides. So then here's the loop closing, which I think is even more dangerous. As he does, President Trump is watching television late at night. It's a thing he does. Yeah. Presidents, they're just like us. He watches 60 Minutes a lot, Donald Trump, it appears. So this week he's watching 60 Minutes and he gets real mad and he posts this long rant on Truth Social about how they're talking to Kamala Harris again.

1:38:46They mentioned the word Trump and they're not nice to me. And at the end of this long rant, he says they should lose their license. Hopefully the FCC is headed by its highly respected chairman, Brendan Carr, will impose the maximum fines and punishment for their unlawful and illegal behavior. CBS is out of control and they should pay a big price for this. When you become the flunky, the president of the United States can say, I want to punish the speech of this company and my guy is going to do it for me. That is just a violation of the First Amendment. Straightforwardly. No matter how you think about the legal mechanics of who owns the broadcast licenses, the president watching TV, getting mad at the coverage, and then directing his flunky to punish the company is not how it's supposed to work.

1:39:29Like, at all. They work for us. Like, when I watch these press conferences, the thing that I want some reporter to say sometime is, do you realize that you work for me? Because they've all forgotten it. Brendan has forgotten it. He works for us. And I think it's probably time someone reminded him of that. And Brendan, I would be happy to do that if you just want to come on Decoder or the Vergecast. As always, the door is open. I don't think you can do it because I don't think you can take the heat. I know people are starting to tweet these segments at you. It's pretty good. So if you think you can do it, if you think of the intellectual rigor to show up in a show and justify your actions, you're welcome.

1:40:05That's been Brennan Carr is Dummy, America's favorite podcast within a podcast. Jingle TK. It's funny. I'm just becoming like an angry talk radio show host. But you've got to fight fire or fire. It's okay. I like to think we just need to get it out of your system once a week. It makes you like a happier person afterwards. It's like what you want most of all is just feedback from the audience. You know, like anybody who makes something just like is desperate, you know, like read my novel. And now we get a lot of the feedback, but the feedback only enrages me because it's just stuff Brendan has done that other people notice.

1:40:38I did the feeling of like you work for me I had in the Meta trial earlier this week when like Ferguson was like looking down at all of us like who were there with the press and like would not make eye contact with us and then his like comms lead who used to I think work for the Washington examiner uh was also like just pretending we didn't exist when we're standing right in front of him and trying to like ask basic things it's like really bad for the comms people right it's It's like, you know, that's why you're here. But I mean that at the highest level. Donald Trump works for you, whether you love him or you hate him.

1:41:11That's the whole point. He works for us. We get to fire him at the end. Right? This whole administration has completely forgotten this very important piece of the puzzle. But that said, Brendan isn't smart enough to make it through the whole four years. So we'll see what happens. All right. Palette cleanser, David. Okay. We're going to skip right over tariffs because that doesn't count. That's a power closer. And also, nothing has changed. Tariffs happen. They don't happen. Well, the numbers have changed. But it doesn't matter. Yeah, but who cares? They'll change again by the time this podcast goes up.

1:41:45The numbers have changed. There you go. That's the news. We figured out the G7X story, Eli. Allison Johnson went and answered our question about - There's like two answers to this question. and one of them is so confusing and the other one is also confusing in a very different way. So, okay, so I want you to explain this story because actually this story originates with you. Fun fact, I did the final edit on this story and I made Alison take out the line where she says, I'm writing this story because Neelai made me do it. We definitely put up a Liz story today that contains a very similar line.

1:42:22It's great. That's what being an energy is about. It is true, however, that other people on our staff also saw the story um okay so the canon g7 x3 a camera from 2018 has gone totally viral you cannot get this camera anywhere if you can get it it's even like a used one is selling for like 300 over msrp this is not normal like there's lots of pocket cameras with one inch sensors that do a good job of just taking photos but it's gone viral on tiktok and so it's sold out everywhere and there are tiktoks now about how to get one like when in the middle of the night to wake up and like power refresh the target website so i see all this allison and the crew and i talk about it and we had the first idea which is we should buy one and see if this camera's any good and then allison was like it's been three weeks and i can't buy like i've been trying to buy one like many people have been like setting up weird bots for her to buy like Like Antonio DiBenedeno on our team was like, I'm really good at buying stuff.

1:43:22Like I'll help you. So we could not get one. Crazy. If you have one, let us know if you like it. But then she talked to all the creators who are using it. And it turns out, one, it's just an answer, which is fascinating. Right? There's still enough choice in that market that just an answer is useful. So yes, you could just buy an RX100. Yes, there's like various Fuji cameras that like do the job. but this is just the answer yeah like it takes it takes pretty good video it takes pretty good pictures it's a reasonable size that you can carry around with you like and it looks cool which is important sold yeah and then so that part is like confusing and in the sense that like who knows how things become the answer do you know i mean like and it's not a canon is stepped up production it's just here's this thing everyone wants and canon's like it's a five-year-old camera buyer new camera instead like very much canon's like would you like to buy the new camera and And people are like, no, old camera.

1:44:18One of the things Allison found is that there is like a newer camera in that line. I think it's called the PowerShot V1 that like just relatively recently came out. You can buy it so easily. It's just right there. You can just have it. But no one wants it. They want the five-year-old one. Yeah, because it's just the answer. So that's confusing in the sense that like, why do things become popular? You know, it's like some art and science. Confusing. The more confusing thing is the reason people like it is because apparently it shoots great flash photos. So all the tips for using it are like open the flash, even in like broad daylight, just like fire that flash out.

1:44:52It's it's 1999 again. It's great. I love it. I haven't I've started popping the flash on my RX 100 to be like. Baby rave. It's like a good time. Wait till these kids figure out how to shoot with slow shutter. So you get the nice background and the flash. It's so funny. Yeah. Flash was just like you. It was it was embarrassing to need flash for so long. Oh, yeah. But it was cool before that. Now it's the trend. And this one camera, like literally the conversation, the discourse is you need to buy this camera because of its flash. That means all these kids are like looking at their parents' photos from college being like, oh, that's so vintage.

1:45:33And those are the pictures they want to take. And I'm realizing those are the pictures that I have from college because I'm 100 ,000 years old. so when we were like early 2000s moved back to Chicago we were in the bar every night my friends and I had those like Canon PowerShot Elfs and they only worked with flash in the bar like they did not have low light capabilities and those flashes are really harsh and really direct and really cold and we would always hold our Miller Lite bottles in front of the flash and shoot through those because they would both diffuse the flash and then tint them like Miller Lite's brown you know pretty good And then people were like, oh, my God, what if we use a Heineken bottle?

1:46:12Like we should sell filters for flat. And this idea died. Like the iPhone came out the next day. We're like, well, that's over. That's how we solved the problem back in the day. We just held the beer bottles in front of the camera flashes. I have a lot of very weird photos taken that way from about like 2004 to 2007. I love this for you. It was great. Anyway, the mystery is solved. And the mystery is it's just the one. Like it just became the one. It's just the thing that's popular. and the thing specifically popular about it is the flash. Yeah, it is like the virality has fully taken hold on that thing.

1:46:46And it's like, it can happen with anything. It can happen with a weird Fleetwood Mac song with a guy drinking cranberry juice and it can happen with five-year-old cameras. No one knows and it can literally happen to anything at any time. Do not turn on the flash on your smartphone. No. It's not as good. I need to tell you this. Do you think we can make the phrase heating the flash happen? when you pop up the flash, you're yeeting the flash? No. Do you think we can do that? Unless you ripped the flash off the camera and like threw it into another room. No, that's not what that word means. Bro, I'm going to get a picture.

1:47:18Just let me yeet the flash real quick. I feel like we can make this happen. Is yeet going to be in the title of this episode? We can't do this. It's going to be. I'm going to yeet this podcast. Yeet is already old slang. It's like five-year-old slang already and now we're just talking about like a bunch of old dudes. Like yeet this is what I'm saying. How about yeet the monopoly? That's the new title of the Verge cast. We'll accept Yeet's Monopoly. Do you have one more palate cleanser, David? Yeah. Should we talk just for a second about Phil Spencer saying Microsoft really wants to support the Switch 2?

1:47:46Yeah. Which a bunch of gamers that I know and talk to found a mix of very exciting and sort of odd. Like basically what he said is, you know, Microsoft's whole plan is they want to have Xbox stuff everywhere, including on the Switch 2. Right. And they've like they're launching these games for the PS5. I think Indiana Jones comes out like today as you're hearing this on the PS5, which would be very exciting for some people. But he said he was like, we want to have our franchises, our games on the Switch 2 also. Seems like great news. Lots of gamers are like sick. This is one of the reasons people don't get things like the Switch 2 is because it can't play some of those games.

1:48:24So the idea that it might is very exciting. but then there was an interesting backlash to it of people being like Microsoft is just gonna you know squeeze Nintendo and ruin this beautiful console for capitalism and I just think it's kind of funny like the way everybody talks about all of the gaming industry that isn't Nintendo is increasingly sort of ruthless and brutal and not beautiful and artistic and then Nintendo is this just like beautiful flower child over here that we cannot allow to be ruined by these other companies well i mean nintendo is the only company that can look at something like zelda and be like yeah it's done we're done the story's over we have no more story here we're going to start a new story over here like very few companies can look at breath of the wild and be like yep this version of this has come to its conclusion most companies like have you heard of dlc there's more of it right uh and then i think for microsoft in particular they lost this console generation.

1:49:22I don't know what they're going to do with the next one. They're like, we bought all these studios. We're going to monetize the games with advertising. Yeah. So we're going to put the games everywhere so we can get multiplayer. It's kind of like network effects. So you want a big multiplayer game full of advertising? You just need a lot of players. So of course you're going to be on the Switch. And I think that's the thing gamers in particular are responding to is like every game is becoming some like open world advertising paradise full of things to buy. Yep. And Nintendo games are like, would you like to have fun yeah and that's the end of that like yes yes i would i will play tennis with bowser for five hours yes thank you i think that's why people um we've been playing a lot of astrobot nice like that game is great i don't feel like someone's gonna ask us for money while we're playing like there's very few of those games left and when they come out people love them but i think i think microsoft has to put advertising on the nintendo switch i think that's what people are reacting to yeah the other funny switch thing that happened this week was uh switch nintendo had another event just to show off more of the new mario kart game which looks sick like i'm so excited about that game and the whole chat in the whole thing was just about the price a bunch of people were like a like tell us what the actual price is why won't you let us buy this lower the price how dare you and then a bunch of people being like ah games are expensive and And just all anyone cares about at this point is like, what is this thing actually going to cost and when are you going to let me buy it?

1:50:49And anytime Nintendo does anything else, that's the only question left. And that is also the question I have because the pre-order date has come and gone. They have not even announced when it's going to happen. I would like to throw my money at a Switch 2, please. It's going to end up costing like$1 ,500 to buy the Switch 2. Honestly, you can either wait a year and get it at normal price or buy it now for$1 ,000. It could happen. I mean, there's all the high-minded, like Trump really began with Gamergate, and to have it come full circle to you can't buy Nintendo is very funny. I'm just going to – I just needed to say it on our show one time.

1:51:26I think Nintendo will figure out a way to get this thing on sale. I actually really – I talked to the CEO of a very large company that makes a lot of stuff this week, and he was like, I don't think anyone understands we're all going to solve it with smuggling. He was like dead serious. Just like Tim Cook, like flying planes, like out of like Vietnam. Yeah. Like we're going to, all the parts will, like all the parts will go to Mexico for final assembly. And that final assembly is like a sticker that says made in Mexico. And then that will come in through that tariff regime. Like the amount of that that is going to start happening.

1:52:01The thing specifically it was described to me is, um, you have all these export controls in these various countries that like, you have to check the list. And he's like, yeah, we just set up 15 shell companies. so that it completely obscures where things are going. All those people get to make money, but that money is less than the tariffs. And I was like, is it smuggling? And he was like, yeah, smuggling. It was just very direct. So do we pay tariffs or do we pay bribes? Yeah, it was very straightforward. It was like, yeah, we're just going to smuggle. So I'm excited for Nintendo to figure out smuggling.

1:52:34It's the next great Switch 2 game. Smuggle a Switch 2. Yeet the Switch 2. I would play that game. We're done. That's it. That's the merch test, everybody. rock and roll

1:52:48and that's it for the verge cast this week and hey we'd love to hear from you give us a call at 866 verge 11 the verge cast is a production of the verge and the vox media podcast network our show is produced by will poor eric gomez and brandon keifer and that's it we'll see you next week