The confusing state of Apple Intelligence

29:35And Google and Apple are currently in a international regulatory dogfight about how much Google pays Apple to be the default. And then opening up a new sphere of competition for applications in the App Store versus WebKit versus blink web apps. That seems like Google would have to give up negotiating with Apple in the future, right? In like a very real way. Do you know what I mean? Like Google's like, screw it. Here's Chrome on the iPhone. You can run web apps in it that are great. This will disrupt the iOS app store. It feels like that is a move that's nuclear enough to foreclose any amount of future Google-Apple negotiating, which they need to do because Google is about to be forced to stop paying Apple billions of dollars a year to be the default search.

30:27All very complicated. It's essentially like a declaration of war if Google does that. And the thing I keep thinking about is from the search trial, one of the things that Apple was really worried about with Google and their deal was that if Apple didn't set Google as the default, Google had a bunch of apps on the iPhone that were super popular and it was really worried that Google would just start getting people to use the Google app. And that because it had such a wide surface, like if Google put a banner at the top of YouTube and Gmail and Docs and everything else that they have on the iPhone saying, download the Google app and do all of your searching there, it could do that.

31:07Like Google could engineer scale in that way, unlike almost any other company. And Apple was really worried about that happening if they took Google out of the default position in Safari. this is the this is the inverse of that right what google could say is now you can run full featured chrome web apps which have become very powerful in the last few years uh as progressive web apps on your phone like google it could essentially like undo the whole app store model under this new system and if in a purely competitive world that is obviously what google would try to do right to say don't don't download apps from the app store and give up 30 percent just install the app running on blink and chromium because now you can on your iphone and that would that would put these two companies at like incredible odds with each other but is also if there weren't many billions of dollars between the two of them exactly what google would do and that is the heart of the doj case against apple right totally like inside of that case that the thing that that lawsuit claims like at its core is well web apps did this to windows there's a reason they haven't done it to phones.

32:17Right. And it's not battery life. It's because Apple has kept blah, blah, blah, blah, blah. We'll see. It's like, it's very funny to go from you can install native web apps in iOS 18.2 to look at this thicket of lawsuits. But that's really what's happening here. Like that thicket of lawsuits is directly impacting how these products are designed. Yeah. I think it is also, we should just talk about this Tim Cook, the big Tim Cook interview in the Wall Street Journal magazine. because it's a big argument for being, I think his quote is best not first. Yeah. Right? Like he's like, we'll make the best products and the first products.

32:52And that is in reference to the Vision Pro, which we should talk about for one second. And definitely in reference to AI. Right? He's like, we're not first out of the gate, but we're going to be the best with these over time. These are our big bets. With the Vision Pro, he basically is like, here's how I use it. I lie flat on my back on the couch and I watch TV. It's a real quote. Fun fact, that's how Richard watches TV too. And he's like, at$3 ,500, it's not a mainstream device. Fine, right? Like they took a shot on a weird product and whatever, and they did admit there was a VR headset. Fine, they're going to make a cheaper one.

33:24With AI, it's like, I get that you're saying, you know, you want to be the best thing, and you certainly have the distribution advantage because you have the iPhone. You can just get it in front of more people fastest. But if you looked around, like this week, anthropic is saying claude can now just use computers for you like there's just a there's the level of innovation in the industry is like out of control like everyone is racing as fast as they can whether or not that's going to come to anything we should talk about but it's this thing that where tim cook is saying these glimmers of apple intelligence are evidence that will make the best thing i'm not i just i'm not so sure about it it's evidence that they're making something now.

34:09They are at least in this kind of artificial intelligence race that Google and Microsoft and everyone have been just driving forward over the last, I guess, year, 18 months now. But I think that's the question. Is it any good? Is it what people want? Is it going to do something other than generate a new emoji that you will send to only other people with iPhones? Yeah. I don't know. Is it going to kill your battery? We don't know. That part, actually, we definitely do not know. Like if you make Genmoji all day, or, you know, destroy a battery. David will soon find out. And also potentially the world.

34:41Yeah. I don't know. I read a lot of this Wall Street Journal piece as like, what else is Tim Cook supposed to say? Right? Like, seriously, I don't even blame the guy. Like, this is seven months ago, he was telling everybody how he liked to do everything in a Vision Pro. Like, this is just what you do. And I think Apple is in a position now where it is forced to try to make the case that this stuff is really great. So Tim Cook is saying he wakes up in the morning and checks his email and having summaries of his emails is a game changer. Like, I just don't believe that. Maybe having a bunch of emails slightly better triaged for you is a game changer in your life.

35:24I don't think that's true for very many people. Can you imagine if you were an Apple executive and you're like, this email got summarized? Yeah. Tim Cook didn't read my shit. I think Tim Cook can afford an assistant. If that were truly the game changer that he needed, what has he been doing until now? And why has someone not been summarizing Tim Cook's emails for him? How much value have Apple shareholders lost because Tim Cook insisted on reading every word of every email for the last 10 years? Well, no, he's famous. He's one of the CEOs who's famous for reading customer emails and forwarding them off.

36:01you can email Tim Cook and like some Apple SVP three layers down the chain will write back to you because he'll he'll do that I don't know if he does it the way that Jeff Bezos used to do it which is forward the email to a deputy with just a question mark like at like all hours of the day and night which is truly incredible why am I getting this email yeah do you think Tim Cook uses enterprise software no I'm just asking like has this man ever logged into Concur no do you think he knows his frequent flyer number he has a plane i was gonna say i bet he does i bet he knows his united number no way because apple famously has like a big thing with united for people who are not tim cook apple's famous thing with united is they own a plane and sometimes they say the word united on it yeah that's that's reasonable i'm reading this profile and i'm looking at the two big product launches this year and the profile is very much about tim cook making big bets right and it's okay the vision pro whatever you got to put one foot in front of the other and yes the meta glasses exist and yes the quest 3s is even cheaper than before whatever um it's much more like his argument is we will eventually do this best and that will win and i actually don't know if that is the case right now for in these two categories well his argument for the vision pro is that they're getting the starter for the developers they're getting the ecosystem uh uh kick-started and that you know these early adopters the people who are going to make things are getting into it but i'm not seeing that yet i'm not seeing the the people who are making and using these tools and that that's kicking a flywheel of innovation that's going to help them make something that someone else will use years from now have we actually gotten anywhere with this$3 ,500 device isn't that also the opposite of the best not first strategy like yes nothing Nothing about the Vision Pro suggests best not first.

37:53Nothing. $3 ,500. $3 ,500? Yeah. Seven out of 10. God damn it. All right. He said one other thing in this profile that I just want to sit with for a second. He said he uses every Apple product every day. Every product every day. That's a quote. Our own Wes Davis tried to figure out how you would do that. Apple makes a lot of products. Wes owns a lot of them, including a$3 ,500 Vision Pro. and uh i would say that he he made a valiant effort and failed because there are too many apple products like using every kind of ipad in a single day is not a good idea it's not just that there are too many apple products it's that they overlap in complicated ways right so that like even even cook's thing is uh he he claims to have an a macbook air a macbook pro and an imac at the office and like god help you if you try to use all three of those devices during a single workday like how what well so that's what kicked me off because i was like wes you should do this story because it's it's one thing if you say i use every one of every kind of product we make every day right i use one mac one ipad one phone one airpods i think every product every day and then specifically calling out three max is like oh you mean every product right does that include both sizes of the Apple Watch?

39:15Both sizes of the Apple Watch. All 15 SKUs of the Apple Watch. Do you think he's like, well, time to switch the Apple Watch with cellular? Like, that's a lot of products. And I actually think the evidence is that he doesn't use most of the products most of the time. The number one thing that came up in the comments was, this guy does not use Apple Home. There's no one. Right? No one believes it. No, Tim Cook's a Sonos guy. Let's be real with each other. He's definitely a Sonos guy. I could buy it. Well, it's on a support server play. Joanna Stern interviewed Craig Federighi at Wall Street Journal Tech Live this week.

39:51You can watch that. She has some Apple intelligence. And two things she said of note related to that, Richard. She asked him at Siri and he said, I use Siri every day. Siri serves 1.5 billion queries a day, which is interesting. I'm going to come back to you. And he said, I use it to open my garage, which is fine. Implies that Craig Federighi has a HomeKit garage door opener. Which is challenging, actually, for a variety of ways. And that he chooses to say, Siri opened the garage every single day instead of just pressing a button. As somebody with two different kinds of HomeKit garage door openers, I love the idea of Apple's SVP of all software going on Amazon and ordering a$30 Miros garage door opener and wiring it into a stake.

40:42I love it with all of my heart. And I am absolutely certain that did not happen. I don't know how he's opening his garage door a thumb kit, but that's the way you do it. And I just, I love the idea of him being like, my ecosystem is working. Well, he's like screwing the thing into the terminals. I wonder if at Apple, when you get like promoted to SVP, instead of getting, you know, a Rolex or a company car or whatever, they just hand you a giant box full of Apple connected gear. And they're like, you have to have this in your house now. Like this is, this is the setup. Yeah. Welcome. Yeah. You're now in charge.

41:18You're in HomeKit now. Actually, I, you know, as somebody who runs HomeBridge, uh, to bridge a lot of stuff into HomeKit, I know that a lot of the people who work on HomeKit at Apple also run HomeBridge. This is a real thing. Huh? Like a lot of HomeKit engineers are like, yep, we're going to build the plugins to integrate range. It's a real thing. And if you are those people, let us know because I have a number of feature requests for you. And also, I just want to say thank you. I don't know that you can use every Apple product every day, but if you are listening to this and you can figure it out, send us your chart.

41:52We'll read the chart next week. That's all I really want to say. We think Tim is mostly an iPad guy, right? In my head, Tim is an iPad guy. Tim has got it figured out. He's circling things in red and sending PDFs back to people. All right, we got to take a break. Again, if you can figure it out, let me know. We're going to come back. We're going to talk about some AI with Richard, which is going to be incredible. Get ready, Richard. We'll be right back. Adobe Acrobat Studio. So brand new. Show me all the things PDFs can do. Do your work with ease and speed. PDF spaces is all you need. Do hours of research in an instant.

42:24With key insights from an AI assistant. Take a template with a click. Now your Prezo looks super slick. Close that deal. Yeah, you won. Do that. Doing that. Did that. Done. Now you can do that. Do that. With Acrobat. Now you can do that Do that with the all-new Acrobat It's time to do your best work with the all-new Adobe Acrobat Studio Morning, Zoe Jeff Bridges, why are you still living above our garage? I want to be in a T-Mobile commercial like you Teach me, Sildana I couldn't possibly At T-Mobile, get the new iPhone 17 Pro on them It's designed to be the most powerful iPhone yet and has the ultimate pro camera system Impressive, let me try At T-Mobile, you can save up to 20 % versus the other big guys You heard them T-Mobile is the best place to get the new iPhone 17 Pro on us with eligible trade-in in any condition.

43:11Check them out to see how much you can save versus the other big guys at T-Mobile.com slash switch. Support for this show comes from LinkedIn. When you're a small business owner, your business is on your mind 24-7. So when you're hiring, you need a partner that works just as hard as you do. That hiring partner is LinkedIn Jobs. When you clock out, LinkedIn clocks in. LinkedIn makes it easy to post your job for free, share it with your network, and get qualified candidates that you can manage all in one place. LinkedIn's new features can help you write job descriptions and then quickly get your job in front of the right people with deep candidate insights.

43:47Either post your job for free or pay to promote. Promoted jobs get three times more qualified applicants. At the end of the day, the most important thing to your small business is the quality of candidates. And with LinkedIn, you can feel confident that you're getting the best. Based on LinkedIn data, 72 % of SMBs using LinkedIn say that it helps them find high-quality candidates. Find out why more than 2.5 million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn. Post your job for free at linkedin.com slash track. That's linkedin.com slash track to post your job for free.

44:23Terms and conditions apply.

44:28All right, we're back. We're going to let AI drive this segment. It's going to be great. Take it away, Claude. Hello. Welcome to... We should let Notebook LM do a virtual segment. That's a pretty good gimmick, actually. That is actually fun. Maybe I'll do that for the next one. I'll just upload all the stuff in our rundown to Notebook LM and let it make the podcast. And then we'll run it, because it makes like a 12-minute podcast. We'll run it at the end of an episode, and people can decide which one they like better. That's actually pretty good. I will say that the chances that that is a more evenly paced VergeCast is very high.

45:05Yes. More focused. Anyway. Do they have more catchphrases than Neelai is really the question. No, absolutely not. So there's a lot of AI news this week. The big theme is that everyone figured out that chatbots aren't going to make them enough money. And so now we have to build robots that can take actions on our computers. Is that about right, David? Yeah. I think there's, there's basically like two big pieces of AI news this week, uh, which is we have to give AI more stuff to do. And then, oh God, what if we give AI more stuff to do? Let's sue the AI companies. So I'd say those are the two things.

45:44So let's, let's just take them one at a time. Uh, the biggest news I would say, uh, in terms of like things that got the AI people excited, was the new update to Claude, which is Anthropics chatbot. It's its competitor to GPT-40 and Llama and whatever else. It can now use a computer for you. They released a very cool demo video, which is just one of the researchers sitting there and he basically opens up a spreadsheet and is like, hey, I need you to pull data out of this and put it into an email for me. And it goes through and it clicks around and it says, oh, I can't find this data in here. So it opens, I think it's like a vendor software thing, searches through that, finds the information, puts it where it is.

46:28The idea is that it can actually click around and look at and use your computer and pull data from it. It was actually tracking what it was doing as it was going. So it was saying like, I hit the page down button and I put the cursor over here and I typed this into the, seems to work very well. It is one demo and it's not a product that Anthropic is shipping. It's a thing in the API that other people can build on top of. I've already seen someone build an app that can sort of do this on a Mac. Oh, really? Yep, sort of. I will say Anthropic is productizing its AI better and faster than any of its competitors right now in a way that I think is really interesting.

47:03But that is the thing, right? That's what everyone is out there trying to build. It's a more elegant version, essentially, of what Rabbit is doing with the large action model. I mean, it's the same thing. It just clicks around a web page for you. I mean, is Rabbit doing it? They said they would do it. and they have built something that does something. And some people have tried it and it does mostly nothing, but some things. I'm sorry, they've built something that does something and some people have tried it is the AI industry. Right. Can you actually do anything useful with what they've built?

47:38No. Yes. Again, we see a rabbit on Decoder. You can listen to it. They're in a very different spot than Anthropic. And we had Mike Krieger, who's ahead of product. and your point about they're better at productizing is because they have a great product person yeah and all the ai companies are trying to hire product people yeah i hired kevin wheel who's done a bunch of really interesting product stuff for social companies over the years like this is the playbook now everybody's after this and so the first product everyone's thinking of is beyond a chatbot what can we do and it appears to be super siri right like the thing that everyone is trying to build is the ultimate Google Assistant or Super Siri or this vision that everybody had when Alexa first hit the scene ages ago, which is you're going to talk to the computer and the computer is going to do stuff.

48:28And then the sort of how underneath this user story, no one could do forever, right? Like, oh, well, here's what Alexa can do. You can play music and set timers and not much else. Here's what Siri can do. Apparently open Craig Federighi's garage door. That's what it can do. but then you because it can't understand actual language you're stuck it you have to write every query and match every query now you can understand actual language now you gotta do the next thing and then the solution seems to be we'll just have it use a computer to do that for you and then ai will solve that problem too yeah and it's actually the the i encourage everyone to watch the anthropic video because it's actually uh sort of inadvertently a really interesting breakdown of how this tech works.

49:13Like it essentially just goes through and takes a series of screenshots and OCRs the information out of the screenshots and then says, Oh, I don't have what I need from this screenshot, but I see, I see from the scroll bar, I can page down or I see there's a thing over there. Like the, the key here is basically taking this thing that people know how to do, but is very complicated to teach computers and just breaking it down to a bunch of very simple things, which is like, look for this number next to this name. And if you don't see the name, search for it in this thing, like, it's actually a bunch of pretty discrete steps.

49:47It's just very hard to explain to a computer in an efficient way. But like you said, now that a computer can understand language and images, essentially, all you have to do is figure out a way to keep feeding it language and images. And it can do something with it. And I think, like the anthropic video was the most convinced I've been that this is doable, because it's like, here's just a bunch of screenshots and it's like it's the same thing that microsoft is pitching with recall and we've seen from some startups and stuff like if you just turn the universe into a series of screenshots ai can actually make a lot out of that for you well it's not that far off from the way that autonomous vehicles work i mean they're not necessarily looking at things the way that a driver does but they're taking these these pictures many many many times a second totally and reacting based on that.

50:36And it's just doing this on a computer, which to some extent, more and less complicated because of the way things are already labeled. Yeah. It is amazing to me how many people building all kinds of AI products I talk to who just want to use the self-driving car metaphor. It's very funny. And I think you're right. It is a really similar problem. It's also a really similar challenge over time to get from very good to perfect. But it is. You're totally right. I think that's exactly the right comparison. The really interesting thing on the computer side is self-driving cars can't be recursive in that particular way.

51:13The most interesting Claude demo I saw was Claude asking itself to generate code to solve a problem. Whoa, you can Claude with Claude. So it's like, you're like, do you solve this problem for me? And it's like, OK, the best thing I know how to do is open a web browser, open Claude, prompt myself, get an answer. And that is really clever. you know there's all these benchmarks that candidly I think are too early in the world of AI benchmarks to mean anything but they're like here's a test we ran that humans score 70 % on Claude is at like 7 you know like it's nowhere but it's twice as good as the next nearest thing and then Rabbit is like we're not doing a good job of Spotify sorry I'm gonna get another angry email who is doing a good job with spotify can you use spotify well i think we are all about seven percent using spotify spotify is like it's a podcast like that's not what i wanted um but the idea that the computer will figure out how to use itself is powerful the idea that the computer can generically use any computer and reason its way to i should just use claude to solve this powerful.

52:25And then underneath it is, I think just a, like the industry has to come to grips with the idea that we're, we're not programming computers anymore. Like an API is the best way to use Spotify. Yeah. Right. Like there's a lot of tasks where just telling the computer what to do and having it do it deterministically is the correct solution. And we're headed towards a place where a robot taking an infinite number of screenshots of a windows desktop clicking on stuff is the, is going to support the billion dollar valuations of the AI companies. And it's like, I don't actually know, but I don't, I don't know about that.

53:04I, I don't know. It's probably broken and I don't believe you. Well, this is, this is a good pivot into the humane stuff, which is the other kind of, I don't know, agent might even be too kind to what humane is trying Every company is doing this. Microsoft announced some agency stuff this week. In response to the Anthropic news and some of the Microsoft news, OpenAI leaked out that it's working on some agent stuff. Again, the future of Siri that they have described is – I'm so sorry for this word – agentic, whatever I keep saying. So the future of Siri is agentic. Apple has a different way of building it because they actually have the apps running locally in their operating system, and they control the operating system.

53:46so they can do more API layer stuff. But everyone's headed here. And then Humane sort of like, here they are. You skipped right past that, by the way, but that is Apple's single biggest advantage in all of this. I'm increasingly convinced is that Apple is going to, with the new Siri, just launch a thing. I think it's either called Siri Intense or App Intense. And basically it allows developers to open up things that Siri can go do inside of their apps. that's the answer right like the only reason to go do this much more complicated deterministic thing is if you can't convince the world to open up apis to you and apple is maybe the only company that can just tell developers to give it access to stuff and most of them will do it and i think we'll see about that we will it's it's possible that i'm wrong but historically speaking apple is the only company on earth that tells developers to jump and they jump.

54:43Netflix, still not on Apple TV or Vision Pro, or integrated into the Apple TV app or on Vision Pro. True. That is true. There are not many companies as powerful as Netflix in those negotiations. That's true. So I think if Apple can do that, it puts Apple way ahead because you don't have to solve really complicated AI problems if you just are handed the structured data. Then Siri has to do the beginning and end, right? Which is understand what you want and figure out how to go do it. Make sense of the universe is not part of it. And that is the hard part. But the humane thing is, so there were two bits of humane news this week that I very much enjoyed.

55:21One is that humane drastically cut the price of the AI pin from$699 to$499. And if you're saying, David, that sounds too expensive. Is there still a$24 a month subscription? The answer is yes, there is uh but they're still here they're still trying to ship stuff and do stuff and uh the other bit of news that has been it's like kind of news but kind of not news uh omalik went and met with bethany and imran the co-founders and saw their operating system which they call cosmos but it's os at the end capitalized because it's an operating system it's very good uh running on a some kind of car dashboard it was not exactly clear but the idea was humane now wants to license its ai operating system to other companies the web os story yes that's what i said this is blackberry it's palm it's web os you name it yeah yeah and so uh a perfectly reasonable idea i think there are a lot of bets right now about who the ai operating system is going to be uh every google would like it to be Gemini.

56:32Is that a bet? Is that a, it's, I don't get it. Amazon is about to spend an awful lot of money and try to convince you to spend some money on the idea that it might be Alexa that can underpin all of your AI devices. Google, that's what Gemini is trying to be. I mean, that's what, that's what GPT-4-0 is. Like, all these companies are going to make most of their money baking their stuff into other products. Like, that is, that is the win here if you can pull it off. That's what I mean. But that's on an OS. Like, I'm looking at this humane image of what Cosmos, Cosmos, whatever it's called. Cosmos.

57:10It's called Cosmos. Well, but the OS is capitalized. You just have to kind of hit it hard. You hit the last Cosmos. It's Reboven, Eli. Oh, my God. I don't want to talk about Reboven at this time. But so you look at their block diagram of how Cosmos works, and all they've really done is they've sort of replaced, like, applications with the word agent and then added, like, 15 more blocks on top of that that are basically, like, we hear you speak, and then we understand what you want, and we go to one of these agents. and the part where you replace the application layer with agents is it is a big deal if that's the thing that's going to happen that is like a 50-year industry-wide project not a thing you can ship to hp to put in a car which is kind of what the article says is gonna like it's very confusing maybe you still need applications sure you still need a spotify to exist so you can like click on it yes as long as you need spotify to exist the easiest way to play the music is to pay spotify money to use the api to just play the music rivian's gonna get apple music and you're like cool and i was like here's how they're gonna do it you're gonna ask alexa to open a web browser and open Apple Music and click on Apple Music and app.

58:30He'd be like, what? And he'd be like, or you can sign a deal with Apple to put the Apple Music app running on the Rivian, which is what they did because that is sane. And there's no reason that you have to give up on the way that we've run computers up until now just because you need to license your app. I'm deeply confused by this. Yeah, it's, I think the same argument we've had a lot about all of these AI devices is like, isn't this just another app on your phone? Like, could an AI system like credibly replace a lot of what you do in Android Auto or CarPlay over time? Like, yes, absolutely. Is good Siri the solution to CarPlay?

59:12100%. That is not the future of iOS. It's part of it, right? And I think there are a lot of instances in which agents are going to be useful and powerful and valuable. But the idea that they're going to immediately overthrow the whole ecosystem we currently have is just wrong. And so I think, again, if you're an OS maker and if you're humane and you're desperate to have a reason to stay alive, you have to make this bet, right? The big swing is we are going to be the one who controls all the agents. And if you're the one who controls all the agents, you become very powerful. The problem is there aren't any agents, the ones that there are, aren't very good.

59:56And also no one needs them yet. So like, it's a, it's a tough sled. I think the thing I struggle with every time we get into this discussion or we're talking about these things is let's say that it works perfectly, that they get all the bugs out, that it's smart, it's fast, it's efficient. It's still like clicking around and using a thing. How many times a day do you click on something and like the page doesn't load? like and and maybe they can make it smart enough to okay now i need to refresh or i got an error and i need to go back and i need to do it again but like if i'm just sitting there saying hey man i told you to do the thing and it's like yeah the page isn't loading sorry bro honestly if my computer would be more honest with me about why it's not working in that specific way in that specific tone that would rule like it was like i'm sorry bro like this connection's shit that's what Siri should do whenever instead of being like here's some stuff I found on the web it should just be like sorry bro I don't know yeah I would like it better do you have Verizon because AT &T's sucking right now that would be incredible yeah or just think for a second and then it's just like I don't know does it matter who cares the vibes are off the vibes are off I just like I'm very curious about all these like AI agents everyone's pitching them now because they have to like I really think the business imperative for why are we spending all this money why are we running all these gpus all day and all night is not chatbots it's not image generators it's not disinformation at scale it's a little bit disinformation at scale that's like that's like fun you know it's like it's like a fun little it's it's like the garnish of the business like do you want to see a picture of Elon Musk jumping up and down and turning into a monkey and then exploding.

1:01:41We can do that for you. Is that a business? I don't know. It does not appear to be paying anyone's bills. But I can make you an all-powerful robot that can use a computer for you and do this spreadsheet work that you don't want to do. Maybe someone will pay a lot of money for that. And so you just see them charging towards, well, hopefully we can pull this off. Hopefully we can get so good at this that the business pays us for it. And we're going to cover it a lot because it is the dream, right? You just talk to a computer and it goes off and does something for you. I'm just not sure any of this technology can actually pull it off yet.

1:02:16And then underneath it, this is the next thing we should talk about, is the fact that all of this is built on a bunch of models that are trained in a bunch of copyrighted information that none of the lawsuits have been resolved yet and more of them show up every day. So just this week, News Corp, which owns the Wall Street Journal and the New York Post, it's Murdoch Empire company, they sued perplexity for infringing on all of its content perplexity gets to the paywall perplexity is sad perplexity is sort of like perpetually sad that it's getting sued for copyright infringement perplexity is the one that wired and forbes and others have repeatedly also pointed out is i think the wired headline was perplexity is a bullshit machine which is very good yeah and then wrote another story about how perplexity stole the story about perplexity being a bullshit it was just very good uh this and perplexity so far has basically been like ah it's the internet everything's probably fine we can just have it yep and it's really only been a matter of time until this came for perplexity in a pretty big way i think it was was it this week or last week that the new york times sent a cease and desist to perplexity essentially alleging the same thing yep is that last week it was last week it was last week and we should know The Times has also sued OpenAI.

1:03:31That's an ongoing lawsuit. Our company, Vox Media, the business side of the company, signed a deal with OpenAI, as did Condé Nast, as did a bunch of other publishers. Like, this is in the air. Like, that's a disclosure, by the way. You have nothing to do with that deal. But this is just, like, in the air. The Atlantic signed a deal like that, and they actually have a cool set of OpenAI-powered tools on their website, one of which is just a Chrome plug-in that as you browse the web, it shows you relevant stories from like the 150 year history of the Atlantic, which is neat. Like, yeah, I wouldn't read old Atlantic stories if not for an AI.

1:04:07Like it does. It works like C plus let's not get ahead of ourselves, but like they're building stuff with it. Yeah. But this is the, the foundation of this entire industry is like copyright infringement or alleged copyright infringement just this week as well. Kevin Bacon, Kate McKinnon, 11 ,500 other creators, uh, have just like issued a letter saying this is an unjust value transfer. We made all this work. This is our life's work. You've taken it all. And now you're supporting these valuations without giving us anything in return. You can feel about that any way you want. I know a lot of people who feel like this is history's greatest crime and Sam Altman should be in jail.

1:04:47I know those people exist because they write to us every time we talk about this on the broadcast. We welcome you here. Then there's another group of people who say, well, look, it's just a computer reading everything in the world, the same way that if you could read everything in the world and then summarize iMessage notifications, you would do the same thing, which is a stretch, but also an argument you can make. And I have no, this is a coin flip, pure coin flip. I have no idea how this is going to take off. But if you believe that the future of Alexa and Siri and Google Assistant and Humane and Anthropic is like taking a million screenshots of your computers and clicking around for you, all of that is built on the foundation of copyright lawsuits that have not yet been resolved in any way, shape or form.

1:05:26And it's kind of like, you know, this industry is headed towards a cliff, like full cliff. Yes. One way or another. The one other part of this backdrop that we should talk about is all of these companies right now are trying to raise gigantic, astonishing amounts of money. Open AI just raised the biggest round of funding ever. Anthropic is out trying to raise a ton of money. Perplexity is out trying to raise a ton of money. Like there's a real sense from all of these companies that they are going to need just vast oceans of cash to do some combination of build God, find a way to sell this stuff to enterprise customers and protect themselves from lawsuits.

1:06:07Like, I think every one of these companies is trying to make the case that this stuff is going to be so big and so lucrative in order to be able to fund the fight to get there. And it's such a bizarre dynamic where it's like they are simultaneously promising how great the world is going to be and like battening down the hatches. Right. And they're like Microsoft and open AI this week was another piece of news that they're giving a bunch of money to newsrooms to make them make more AI stuff. And it's just like, what a bizarre inversion of this same thing where they're like, we are going to give you money to take your stuff or we're just going to take it for free.

1:06:47But here's some money to make AI stuff. They're giving some money. They announced$10 million and$5 million of it is in credits for the software. Oh, is it really? That's annoying. Which is not the same thing as money. No, it's not. It is super not. But all of this stuff is like, it's, everything is running as fast as possible in these like mutually exclusive ways, except that it sort of feels like if the money gets big enough, it'll just be okay. So this is, I, I haven't thought this all the way through and I'm curious for reader feedback on this. What the first cast is for. If the money gets big enough, I think the judges and the copyright cases are going to be like, look at all of your money.

1:07:33pay it to them. Like at some point you're like, I made a thing so valuable by taking all of this stuff without permission. A judge is going to say, well, that, that is actually a value transfer that doesn't make sense, right? If you needed all of this to raise your$6.9 billion open AI, then it stands to reason that that stuff is valuable and you should take some of the money you raised and pay it to the people whose work you need to make your product that supports the valuation. But that's kind of my point, right? I think if you're open AI, you say, okay, listen, judge, finest, finest$1 billion.

1:08:11That's so much money. One whole billion dollars. Oh, it's cool. We got five and a half. And this, this is what I mean. Like, I think there is a sense among these companies that if they can just build a big enough war chest, they can either buy out or wait out all of their problems. And those are tech problems. Those are regulatory problems. Those are fights with publishers. That just gives them the money to wait. And there's a reasonable evidence that they're going to be right about that. The wild card is, are we due for some kind of judicial end to this that just knifes through the whole industry?

1:08:48And that, I think everybody is lying to you if they think they know the answer. Yeah, that's definitely a coin flip. The other thing that's happening is that they're also getting attacked from the other side, on the output side. Not just the copyright infringement accusations of what they've done, but who is responsible for what these tools do? There's a lawsuit that has been publicized, written by the New York Times and other outlets. We wrote about it where Character AI and Google are being sued after this teen died. And one of the main questions about this is, so if I interact with your generative AI tool and maybe I put in a prompt and it says something back to me, is anyone legally responsible for what happens next?

1:09:26Who, how much, what, what are you supposed to do? What, what should be the rules there? What should, what safety should you implement? Should these things be usable by children? None of these questions have been answered yet. And there, that could be another problem. Yeah. And that is the realist problem, especially for the character eyes of the world where they're sort of like advertising that these are therapy tools. And it's like, well, if you lead people to these outcomes, you're probably responsible for them. and no one has thought any of this through. I'm just saying it's neat to talk about agents and Siri or Alexa that can just do stuff for you.

1:10:02And then there's like, oh shit, it's doing stuff for you. Also, the foundation of this might be Kevin Bacon gets a billion dollars. Like weird, weird outcome. Can I just read you the one sentence thing that they all signed on to? Yeah. It says the unlicensed use of creative works for training generative AI is a major unjust threat to the livelihoods of the people behind those works and must not be permitted. Okay. Like, I'm just, I'm amazed they got 11 ,500 people to care about that enough to sign the piece of paper. Oh, no, no, no, we could get 11 ,000 people to sign a statement like that tomorrow.

1:10:38The Verge commenters alone would sign that statement. It's just such a, like, I don't know, it's just such a milquetoast way to be like, I am gently mad at the AI industry. I don't think that's gentle. it's a major unjust threat that must not be permitted what do you want them to say sam altman should be arrested 11 000 people it's just like money please no it says must not be permitted it says livelihoods you know what that is it's this is not it's not it's money money the unfortunate part is that it already happened yeah cat's out of the bag kevin No dancing in this town, bro. Yeah. OpenAI raised$7 billion so that it can give Kevin Bacon one of them and then it can move on.

1:11:22The other thing that's going on in the AI world, which we'll just skim over because it is an election year and everyone can see the weird AI election misinformation for their own eyes, is that the companies that make these tools and have promised labeling and metadata for years and have done nothing while all of this is getting fully out of control are slowly starting to add labels and metadata to their own work. So Google is going to open source its watermarking tool for AI-generated text. We'll see how that goes. That one, that's the hardest one. But Google Photos is now going to show AI-generated metadata in the photos.

1:11:58Like there'll be a label to text the metadata. We're just, it's a slow, slow burn. And then, oh, Apple, Craig Federighi in that same interview with Joanna said that he wants photos to be photos. He doesn't want real photos to be fantasy. and that they are also showing some information in the photos. This is not enough. Flatly, none of these companies are doing enough. They've all talked a huge game about things like C2PA and content authenticity and we're kind of at like we're going to do EXIF data and labels that people can change while the misinformation is like running rampant everywhere. Has Craig Federighi seen that photo of the bridesmaid with like three arms?

1:12:39Because somebody should tell him about that. Yeah, that was like a panorama mode thing, right? It wasn't even AI. It wasn't even AI. It's just the pace of all of that is so backwards to me because the logic for going slow on all of this from all of these companies is like, we have to really test this stuff and harden it and make sure it works and make sure it can't be easily removed and we have to understand how it fits into the product. And absolutely none of that care is being taken with the tools that these same companies are making to make the things that are the problems in the first place.

1:13:12So it's like, it's very hard to take seriously this group of people who's like, we have to take our time and do this right. When the people who sit like three cubicles over are the ones being like, want to put guns in your pictures? Here you go. It's true. And that is the funnest team at Google, actually. Fire it up team at Google. One of the buildings in Mountain View is just the just add guns building. Yeah, very good. All right, we got to take a break. We're going to come back with a lightning round, clear our palates. I'm very excited for the one that I've assigned to Richard. I'm just going to be very honest with you.

1:13:47I'm very excited. We'll be right back. Let's be honest. Are you happy with your job? Like, really happy? The unfortunate fact is that a huge number of people can't say yes to that. Far too many of us are stuck in a job we've outgrown, or one we never wanted in the first place. But still, we stick it out. And we give reasons like, what if the next move is even worse? I've already put years into this place. And maybe the most common one, isn't everyone kind of miserable at work? But there's a difference between reasons for staying and excuses for not leaving. It's time to get unstuck. It's time for Strawberry.me.

1:14:31They match you with a certified career coach who helps you go from where you are to where you actually want to be. Your coach helps you get clear on your goals, create a plan, build your confidence, and keeps you accountable along the way. So don't leave your career to chance. Take action and own your future with a professional coach in your corner. Go to strawberry.me slash unstuck to claim a special offer. That's strawberry.me slash unstuck.

1:15:27on his lip.

1:15:32Support for the show comes from Crucible Moments, a podcast from Sequoia Capital. We've all had pivotal decision points in our lives that, whether we know it or not at the time, changed everything. This is especially true in business. Like, did you know that autonomous drone delivery company Zipline originally produced a robotic toy? Or that Bolt went from an Estonian transportation company to one of the largest rideshare and food delivery platforms in the world. That's what Crucible Moments is all about. Hosted by Sequoia Capital's managing partner, Rolov Butta, Crucible Moments is back for a new season with stories of companies as they navigated the most consequential crossroads in their journeys.

1:16:19Hear conversations with leaders at ZipLine, Stripe, Palo Alto Networks, Klarna, Supercell, and more. Subscribe to season three of Crucible Moments and catch up on seasons one and two at cruciblemoments.com, on YouTube or wherever you get your podcasts. Listen to Crucible Moments today.

1:16:44All right, we're back. The lightning round. Sponsored by no one. No one. For all of your not money needs. See what I did there? Yet. That's what it could look like if you paid us money. Someone money. Not me. We'll get there one day. All right. It's lightning round. David, I think you need to start with, honestly, the news that should have led the entire Vergecast. I just want you both to be very proud of me that I made it over an hour into the Vergecast, and I have not mentioned the Books Palma 2 once. I haven't even teased it. The best thing about the Books Palma 2 is that we've entered the stage of covering this thing where there was a leak of it and we covered the leak and then the announcement of the tiny e-reader.

1:17:31We're deep in the weeds. The Verge is the official news source of the Books Palma. And I feel very good about this. What I like is that they got the sequel out fast enough that my pre-scheduled six-month-out tweet asking people if they know where their books palma is hasn't even gone up yet, and they're already selling the sequel. They got me on this one. Somebody posted on Threads today accusing me of being in league with books to get rid of all their inventory on the one before the two came out. They're like, you timed this on purpose, didn't you? Big books is good. Big books. Yeah, that's me.

1:18:06they they fund everything everything in the basketball hoop you see behind me uh so the books palma 2 still 280 which is still too expensive but it's it's still it's a smartphone sized e-reader to answer your question richard i use mine every single day and i love it very much it fixes a couple of the things that were wrong with the last one uh mostly it was a little slow and it ran a really outdated version of android now i suspect it will be less slow and it runs a less outdated version of android it doesn't run a current version of android but it's better uh it's still it's the same size it's the same screen it has uh i believe the same amount of ram and the same amount of storage it's just like a gentle upgrade of the same device uh which i think is fine i to me honestly the fact that books just made another one of these is the thing that is most exciting and interesting.

1:19:03Books is basically like a spaghetti at the wall kind of company. They just make every single product size and skew you can imagine. They're Dyson, but for E-Ink screens. Yeah. And that's fine, right? You can go on their website and buy just about any dimension of E-Ink device that you want. And I think just the fact that this one is getting a second rev suggests that it is successful and meaningful to people. Just by the way, just in case people are wondering what I mean by Dyson is if you want something with a fan in it, Dyson will sell it to you. Suck, blow, anything with a fan. However tall you'd like your vacuum to be, Dyson has you.

1:19:39They got you so good. There was, there's one, I believe that launched in just China that also doesn't have a camera. Yeah. Which I think is pretty cool and is a thing. there were a bunch of people when I wrote about the Palma in the first place were like, I would love for one of these without a camera for just a variety of, you know, security and privacy and family reasons. But the one that's shipping around the world still has a camera. Why? Have you ever used the camera on your Bux Palma too? No, literally not once. When I wrote about it, I forgot it existed until somebody I was talking to asked me if I had ever used the camera.

1:20:17And I said, no, I forgot it had a camera. But their thesis is that you might use it for like scanning and digitizing stuff, which like, sure. But to me, it's like, get rid of the camera and knock the price down 40 bucks. Everybody wins. Yeah. It's way better. But yeah, I think this thing is, I'm excited about it. I'm hopeful that they'll ship me one and I can review it. I think the thing Books is trying to do, it got kind of right the first time. Like that combination of the size of the thing and the fact that it's e-ink and the fact that it runs Android apps is awesome. awesome. Uh, we tried to get Panos Panay to look at one.

1:20:53He refused to do it on camera. It was very upsetting. Uh, and yeah, we'll, we'll, we'll see. I got a lot of people asking me, should I buy this one or the new Kindle paperweight? People want ink devices, man. Yeah. I will say I encourage everyone to pull over in your car and then look at our article with books, want to click on it and scroll down and look at books, his own press photo of a guy holding the books, Palma too. he's very much like what am I doing here? Yeah he's like what is this thing? He's like how did I get here? He's like yep I'm looking at a little phone with a meeting screen.

1:21:29It's true it's just a guy in a beige sweater who's like why does this have no colors? It's like his face is like I hate this book I don't want to be reading it. It's very much the face I imagine Richard made the first time he held the book's comments. Like this is the face that made you pre-schedule the tweet like right here it's good and i'm i'm glad that these things exist like someone should make like an android thing with an eating screen that runs apps it's great i just think that people will probably put them down and forget that they bought them just as i believe this gentleman put this one down it's why it's why if you asked him about it right now he wouldn't be able to tell you what are you talking about the what now that was a job like that's his face this is why the problem is the price with really with all of these devices like the palma or something like it at 99 bucks like sold right like the the kindle succeeds for that same reason it's like if you buy a kindle and use it a bunch and then forget about it for a while and then use it a bunch and then forget about it for a while you've paid the correct amount for it uh 280 bucks is too much for that use case yeah that said i will be purchasing one i gotta go use my books palma one at least one more time to make it worth it, apparently.

1:22:48All right, Richard, you've got the best one of all. Yes. Senior citizens, very, very upset at T-Mobile of all companies because it won't honor its lifetime price guarantee. Turns out they lived, I guess, longer than T-Mobile thought. When you tell people that you're going to give them a lifetime price lock, you figure, how long could that last longer than you think t-mobile they probably figure that out the same way they do security that's rough that's a rough secondary stab right there uh thousands of fcc complaints uh that from people saying they signed up for price lock in what 2015 so 10 years ago so t-mobile assumed everyone would die within one decade they had a senior plan that was marketed specifically to people 55 and up.

1:23:41With lifetime price lock. Yes, and it included this. And those are not people who you want to disappoint on a lifetime offer. They will remember. Has anyone ever not lived to regret the lifetime price guarantee? Like this always makes me think of back in the day when the airlines would sell the people like the$250 ,000 lifetime fly wherever you want first class thing. And then there were the people who were like, all right challenge accepted i live in the sky now yeah and eventually all the airlines are like well you can't do that and they're like remember when you said lifetime and like the everyone is just don't do this if you can't do it just don't do it and then there are the companies that offer a lifetime deal and then go out of business and it's like what are we doing y 'all like well that's a win that means you outlived it's the lifetime of the executive who approved it right Right.

1:24:37Yeah, 100%. In the FCC complaints, there are some choice quotes. Ars Technica dug them all up. One of them, I am not dead yet, a customer in New York wrote bluntly.

1:24:50That's very good. There was one person who complained that their price is going up$50 a month because they had 10 lines. I'm like, wow, 10 lines? That's good. We've got that lifetime guarantee. I mean, that's fair. I'd get everybody on that plan. You guys want to join my plan? I will take this opportunity to remind the Vergecast audience that T-Mobile exists in its current state because the government allowed it to buy Sprint in a deal which took our nation's number of viable nationwide wireless carriers from four to three. And to solve that problem, the government made Dish Network make a network.

1:25:25That network is called Project Genesis or Gen5Sys. That network does not exist. I don't know what to tell you. You can go to the website. The website sometimes doesn't load when you go to the Stitch Network Project. It sometimes just isn't there. Just physically doesn't load. And then if you do get it to load, you can buy a, what is it? A Motorola Edge Plus, like a 2023 Motorola Edge Plus. That's the phone they sell. And that phone, if you go look at the subreddit, will mostly roam onto AT &T's network. Perfect. I don't see the problem. It's competition, baby. What I'm just saying, you know, I know it's election season.

1:26:03That was the deal negotiated by Donald Trump's antitrust division to preserve competition in the wireless market. We did it, y 'all. When I think of AT &T, Verizon, and T-Mobile and the biggest threats they face every day. Zach, can I just read you one paragraph from their story? Yeah. It's like an aside in the middle of the story, but it is the best knife in the whole story. Last year, T-Mobile notified some customers that it would automatically switch them to newer, more expensive plans unless the customers called the company to opt out of the change. T-Mobile customer service reps were instructed to tell users, we are not raising the price of any of our plans.

1:26:37We are moving you to a newer plan with more benefits at a different cost. It's not whether the price is more or less, you guys. It's just different. It's just different. I'm sorry. I'm just reading the Project Genesis subreddit. None of it's good, man. Anyhow, wireless carriers and ISPs, your favorite. Now, to further enrage you about our nation's wireless carriers and ISPs, I will inform you of my lightning round item, which is that the Federal Trade Commission passed what's called the click to cancel rule. This is the rule that says if you sign up for something, canceling it has to be as easy as signing up.

1:27:18Right. So you can click on something to sign up for a subscription or yearly membership or whatever. To get out of it, you got to be able to click one button. These are called negative option contracts. There's a whole thing. There's like three or four different laws to try to solve this problem. and the FCC put up a rule a while ago. Everyone complained about the rule and now they passed the rule. This is like Lena Kahn's FCC saying, this is bad for consumers to make people dance through cancel flows or to hide options where the price escalates. It's gotta be as easy to get out as it was to get in.

1:27:49This is an objectively correct stance, right? Everyone loves this rule. There's not like a secret thing that I'm missing about why this might suck for consumers. This is just great. No, it's totally fine. This is what happens when you make millennials call the New York Times to cancel their subscription. Millennials hate phone calls. 100%. And so, you know, the LenaCon FCC is like doing its thing. Guess immediately who sued to stop this rule. If you guessed our nation's ISPs and wireless carriers, you would be correct. I was going to guess gyms. That was going to be my other. Gyms is in there.

1:28:24A bunch of advertisers are in there. ADT. ADT is in there. So it's their trade groups, right? So the NCTA, which is the ISP trade group that represents Comcast, Charter, Cox. It represents streaming services like Disney, AMC, Paramount, Warner Brothers, Discovery, Disclosure, Comcast is an investor, our parent company. I take that for what it's worth. I think they suck in this case. The IAB, which is the advertising, the Internet Advertising Bureau. that's google netflix amazon meta vizio and the nfl the esa is adt so all these huge companies are through their trade organizations basically suing the ftc and saying no we do not want you to make click to cancel mandatory and the argument is the ftc is trying to regulate consumer contracts for all companies and all industries across all sectors of the economy from forbidding businesses for making customers cancel services using a method that differs from how they signed up.

1:29:29Yes, that is what they're trying. That's correct. And so the argument here is freedom in America requires us to be able to fleece our customers. Like, get the nanny state out of here. It's wild. Underneath that, this is some real wonky legal stuff, is how they will probably attempt to go after this. So the FTC is an executive agency of the government. It has some powers or some powers it doesn't have. The main power is like its rulemaking authority. It's like ability to like make decisions basically. And that was basically just overturned by this Supreme Court. we'll link to it but there was this concept called chevron deference where the courts would defer to the agency like you know best like you're staffed by experts you made this decision we will defer to your rulemaking process if you get sued but this supreme court threw that out so now the courts get to decide if these rules make sense which is basically just like an explosion of how our government works.

1:30:35Anyway, all that means is Comcast gets to sue Lena Con for making it easier to get out of your ISP agreement. And that is stupid. So that's good. This is going to, it's amazing that these companies are buying this amount of bad press. They should just make better products. But here we are. This always just makes me think of the place we've gotten to a streaming TV, where basically what we've done is just very slowly reinvent cable, but it's easier to cancel now. and in in a very real way that's a giant victory that like i pay as much it's a worse user experience in a lot of ways but at least i can cancel it success and it is just bonkers how few things have gone that way yeah like it's i there are so many things i pay for because i just can't figure out how to cancel it like literally the the just to name one the wall street journal which I'm not important enough to need to subscribe to if we're being honest with each other.

1:31:34You don't get a free journal subscription because you used to work there? No. Like alumni club? No. I barely got it when I was there. They were like, listen, you write about like smart home stuff. You don't need to read our journalism. But like you have to call a number and find a person. And I sat on hold for a while one time and gave up. And it's like, this is not how this is supposed to work. This just sucks. Yeah. And it is like that everywhere. I had to go to my gym to cancel. Like the third time ever I went to the gym was to cancel the gym. It was awful. Well, David, I think you should take better care of your health.

1:32:07So sign up for another gym membership and then never get out of it. Thank you. That's it. We're way over. I'm furious that I can't cancel more things more easily. I don't even know my Hulu password, but I'd cancel it. If you want to cancel the Vergecast, you have to call Neelai and we'll never tell you his number. That's it. Call the Verge Cast line and explain to us why you need to cancel the show. That is a dangerous prompt. Think twice. Make it funny. That's it. That's the Verge Cast. Rock and roll.

1:32:40And that's it for the Verge Cast this week. 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 Vox Media Podcast Network. Our show is produced by Liam James, Will Poore, and Eric Gomez. And that's it. We'll see you next week.

1:33:01What do walking 10 ,000 steps every day, eating five servings of fruits and veggies, and getting eight hours of sleep have in common? They're all healthy choices. But do all healthier choices really pay off? With prescription plans from CVS Caremark, they do. Their plan designs give your members more choice, which gives your members more ways to get on, stay on, and manage their meds. And that helps your business control your costs. Because healthier members are better for business. Go to cmk.co slash access to learn more about helping your members stay adherent. That's cmk.co slash ACCESS. When was the last time you felt in control of your business finances?

1:33:46Expenses tracked, invoices sent, taxes ready. That's where Found comes in. Found brings your banking, bookkeeping, invoicing, and taxes together in one simple app. manage expenses, invoice clients, send payments, and prep for tax time right where you bank. Join the hundreds of thousands who have already streamlined their finances with Found. Open a Found account for free at found.com. That's F-O-U-N-D.com. Found is a financial technology company, not a bank. Banking services provided by lead bank member FDIC.