The end of the Sony era in TVs

9:32David Pierce:So it's as a as a manufacturer, it's very good. It makes a lot of high end stuff. It makes a lot of camera sensors. Like you said, it makes expensive televisions. It makes it makes Walkman that are like weird mid range Android phones with high end audio. But I think it's it's still true that Sony occupies this very important place in people's mind all the way back to like the Walkman, which was a seminal moment in technology history.

9:59Nilay Patel:The Trinitron TV, right? Yeah. Like, the highest-end, best CRT TVs you could buy were Trinitrons. That was a brand that, you know, when people moved to flat panels, like, that went away. Sony never really recovered in big ways. But, like, they were the cutting edge for up into the mid-2000s. Like, Sony was the dominant consumer electronics company in a lot of ways. Steve Jobs wanted to be Sony.

10:26David Pierce:Yeah.

10:26Nilay Patel:He took a lot of inspiration from Sony and Sony's founders. Famously, he toured the Sony factories to get inspiration for Apple factories, like way in the 80s. And you just see that they, basically between smartphones, their ideas about software, and I think crucially their ideas about memory stick formats, Sony just lost the plot.

10:45David Pierce:Yeah.

10:45Nilay Patel:And in particular, it got overtaken by vastly cheaper first Korean companies, Samsung and LG. And then as those companies moved in the high end, they were overtaken by vastly cheaper Chinese companies like TCL and Hisense. And now those companies are moving in the high end. And TCL is basically skipping the line. They're just like, we're just going to buy this stuff from Sony and run this brand. I just think there's something important to say about that dynamic. Originally, Samsung and LG were the cheaper foreign competitors to Sony, right? Right. Like there were the high end Japanese companies, Sony, Panasonic, what have you.

11:18They got eaten by Korean upstarts.

11:22Nilay Patel:And then the Korean companies moved way up. Samsung has basically high end brand now. LG is a high end brand. They all sell like billions of products. So there's still cheap Samsung products in the world, but they wanted their brand to be at the top of top of the chain. And now you have T-cell and Hisense, which started as budget brands. They're also on their way up. And I just think it's fascinating that T-cell skipping the line And Sony's like, yeah, we're out. We're not going to do this anymore.

11:46David Pierce:So my immediate assumption about what this deal was is TCL is going to make TCL TVs and put the Sony name on them. And that actually what TCL has is this incredible manufacturing infrastructure. It's able to make a lot of things very quickly and very cheaply. And that is how these Chinese companies have come up. Right. They found ways to make things at unbelievably low prices and unbelievably huge capacity and have sort of slowly gotten better over time. to the point where they've nearly caught up. But the Sony brand, for all the reasons you just said, is an objectively better brand than TCL. And so they're just buying an AIM and now they can start selling Sony TVs.

12:24David Pierce:But it sounds like it's actually more complicated than that and that there's some technology pairing here that actually made sense. John Higgins wrote a great piece for us about this and he actually seems optimistic that this might lead to everybody's TVs getting better somehow.

12:39Nilay Patel:Yeah, you know, this is what I was saying about kind of the display industry being in a really interesting spot. So there's really only a handful of scaled display panel manufacturers. There's Samsung, there's LG, and there's TCL. And, you know, there are other ones and other companies have their own displays and they talk about it. Hisense exists, right? But TCL is huge. And they make all the panels for Sony's LCD TVs. And Sony has made this big bet that many LED TVs will overtake OLED on some timeline. And I don't know if that's true, right? Like Sony's picture processing is the best in the industry.

13:15Nilay Patel:You know, they win all the awards. John Higgins actually just reviewed the Bravia A2 and he's like, this is beautiful. When I did the very, very technical King of TV shootout, it won that award, but A95L won it before that. Like their processing is what has made Sony TVs the best for so many years. It's their picture processing, their motion handling, all that stuff. They care about it a lot. They talk about it a lot, But they have bought the panels from Samsung. They have bought the panels from LG. And increasingly, they have been buying the mini-LED panels from TCL. And so TCL's next generation of mini-LEDs, which we're going to review soon, it's called the X11L.

13:57Nilay Patel:Like, that's where the state of the art is. So TCL is on the state of the art, on the technology path Sony wants to be on. So you kind of see, okay, well, like, we're buying the panels from this company anyway. why don't we just enter a joint venture with them? Because this is the bet we're making on the future of TVs. I think LG's bet on the future of everything looks like OLED. Samsung has a different riff on OLED. And obviously, I think Samsung just wants everything to be frame TVs in the end. And so you just see, you have the three biggest panel manufacturers making three different technology bets, like radically different technology bets.

14:35Nilay Patel:And Sony isn't in any position to do that. It doesn't make the panels. It doesn't determine the technology. It's just sort of like one of the most important customers of TCL's panel division and not Samsung's most important customer. Like, not by a long shot. So, like, where does it go? What is this thing? If all its real value is the brand, which everyone loves, and the picture processing, which consistently wins, like, every competition it's ever entered in. And I think the answer is, okay, fine. We'll just continue to be a mid-sized Samsung customer. Yeah. will get the benefit of working directly with TCL.

15:10Nilay Patel:TCL is building an OLED factory, and maybe that's going to happen. And you're like, all that makes sense, and it's still pretty sad. Why is it sad? What's sad about it? I just think, like, the idea that Sony isn't driving the cutting edge of the foundational technology is sad in, like, a specific way. Whereas, you know, in camera sensors, for example, Sony drives the cutting edge of camera sensor technology. There's a reason Apple puts Sony sensors in so many of its phones, and always will for the time to come. There's a reason that Sony Alpha cameras are used everywhere. It's because Sony is driving the cutting edge of sensor technology there.

15:41Nilay Patel:There's other places where Sony does that. I think the fact that it no longer makes the display technology means that it's not going to drive that. Maybe actually this deal, maybe one argument is a bunch of Sony people will start to drive the cutting edge of panel technology because they will have direct access to the company that's making the panels because it's all just one joint venture now. So maybe that's the move. But the idea that Sony just ran around in circles doing dumb stuff for like a decade and forgot to build panels and forgot to invest in the foundational technology is a miss. Like, this is a company that by all rights should be driving the bleeding edge here and just stopped.

16:19Nilay Patel:And so this is the big one.

16:21David Pierce:I mean, it also feels like a part of this whole race to the bottom in TVs that we've been in for a long time, where everything is getting cheaper, everything is getting better, but in a sort of, you know, plateauing way. And the money to be made is not actually in being the company that makes and sells the best panels. It's in like advertising. And I think we're just in this place where I was reading a great, I think it was MG Siegler wrote a whole thing basically being like, I wish Apple would make a television, which is a blog post somebody writes every 15 minutes. I've written that blog post.

16:59David Pierce:Yeah. And it was like, he made a bunch of good arguments about like, okay, well, you know, the TV is the center of our home. It's a very important piece of technology. Why don't we care for it more? That's all true and good, but it just feels like the market for that is dead and gone. And there is no getting it back. So the idea of like, what if we tried hard and made it great and thus could be a mainstream valuable success as a result seems like a dead idea to me. And so what you do is you're either Samsung and you either have this new idea about how to sell me a bad television or you just sell them cheaper and cheaper and cheaper and cheaper and cheaper and you try to find other ways to make money and if you're Sony and your business is or was we make the best things and sell it to you at a high price like does that exist in the TV business anymore?

17:44Nilay Patel:I don't think people care about what their TVs look like like the idea that the the A95L and the Brabby A2 were the best looking TVs you could buy, especially if you calibrate them. Like you say that to people and they're like, what does it cost$500? Right. Like it just simply doesn't matter. And you know, I think the mini led bet is you can make a much cheaper panel that gets you like 80 % of the way to the OLED look. And it's still great for sports, which is what people watch on big TVs now.

18:14David Pierce:I was going to say, is it possible that the, the true upside here is not that it, it helps everybody invest in, you know, bleeding edge technology, but that what it actually means is the$299 gigantic panel that you buy in Walmart can be better because they can steal some of Sony's tech.

18:30Nilay Patel:Like on the, on the level that like 10 years from now, the technology will trickle down to the 299 panel, like 10 years from now, the$300 TV is as good as today's best TV. Yeah, sure. That's probably true. That's, that's probably true today. If you look backwards.

18:46David Pierce:Sure. But I I don't need it to be as good. I'm just saying, like, can TCL take Sony's processing and make its own TVs 6 % better for free? Maybe. That's what I want. I don't give a shit about all these expensive TVs.

18:59Nilay Patel:That's the promise of a deal like this. Again, memorizing of understanding. I don't know if governments around the world are going to have this happen. There's a lot of question marks about doing a JV with a Chinese company, right? In countries around the world. there's a lot of question marks about whether Sony's investors or T-Sales investors want this up. So who knows? But yeah, that's the idea, right? Is you get a full lineup of Sony Bravia TVs at every price point that are good using T-Sales tech. And T-Sales brand is irrelevant to all of that. Or maybe there's a split and at some price point you go from T-Sales to buying a Sony TV and it's the same.

19:34Nilay Patel:I mean, the other underlying piece of puzzle is they both run Google TV. Right, so like the underlying operating system is the same whereas like, I don't know, T-Sales tried to do this with Samsung. They'd be like, so we have to get rid of Tizen. And then like, they would do like a seance or something. And then the world would get measurably better

19:49David Pierce:the minute that happened.

19:51Nilay Patel:And as somebody who runs Google TV on a Sony Bravia today, it's fine, but not great. In the way that all TV software is fine, but not great. And the reason that TVs are able to be cheap is that the software is full of upsells and add-ons and advertising. And that's, you can have whatever feelings you want about that. But the reason that TV has been devalued is because they made the price up front really cheap. And then they make all that money back on weird advertising and stuff in the interface. And there's no getting around that anymore. That's just reality. One of the reasons the high-end Bravia's are expensive is because I think Sony assumes that you're just going to run away from their software.

20:29David Pierce:Yeah, because at that point, you're a person discerning enough to do the work to get away from it. And they're like, well, we have to...

20:34Nilay Patel:Yeah, you have like a Kaleidoscape streamer, which is my dream in life, is to get a Kaleidoscape streamer. But actually, Kaleidoscape has offered me one. And I was like, I'll review it while we have the baby and I'm on leave. And that just never happened because honestly, what was I thinking? I'm still going to find out one of these things.

20:48David Pierce:My bluey looks so sick right now. This is great. All right. We should get to a lot of this AI news because there's a lot of AI news to do. But does this change? Here's a last question for you before we take a break. If you're a person looking to buy a TV and you want like a nice TV, does this change the speed with which people should go buy televisions?

21:08Nilay Patel:If you're trying to buy the best TV right now, the move is to go find a discounted Sony A95L, the last generation, which some people say looks better than the Bravia 8.2, which is, by the way, a horrible name. Some people claim that's true. I have an A95L, so I need to believe that that's true. It's very important for me to believe that that's true. But that is, it's like far the move because it's the previous generation and they're only selling the 77 because the Bravia 8.2 doesn't come in that size. So if you can find one of the smaller A95Ls on discount because it's the previous generation, that's the move.

21:43Nilay Patel:The Bravia A2 sometimes goes on discount now, but it's not very much. But that would be my recommendation because that is a great TV and you will not regret it for one second.

21:51David Pierce:You know what I haven't regretted is all the horrible TCL TVs that I have. No, I'm just kidding. I regret that every single day of my life when I try to open an app and it takes an hour. Anyway - How's your frame TV? It's fine. It continues to take three power button presses to turn it on every day. And this is somehow the life I have chosen to lead. My three-year-old toddler has figured out which one is the power button. And even he can't figure out when it turns things on and off. And it annoys him every single time. And I'm like, buddy, I get it. Like, well, take it up with Samsung.

22:24Nilay Patel:It appears fully that the person who was trying to write the home bridge integration for the frame TV was like driven to a state of madness and quit the project. Just because of how the power button works. Like you can't discern its state because Samsung in its infinite wisdom decided that power buttons should not turn things on and off, but enter a weird liminal state where it shows you art.

22:44David Pierce:And is that on or is that off? Literally no one knows. Samsung, everybody. All right, we got to take a break. Then we're going to go back and talk about some AI news. We'll be right back. Support for this show comes from LinkedIn ads. When you're running your own business, every decision could feel like make or break and you can't afford to waste a penny. So if your B2B marketing is still falling short, it may be because you're preaching to the wrong choir, whether you know it or not. If you want to reach the right professionals, use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers, according to their data.

23:22David Pierce:That's where they stand apart from other ad buys. You could target your buyers by job title, industry, company, role, seniority, skills, company revenue, all so you can stop wasting budget on the wrong audience. That's why LinkedIn ads boast one of the highest B2B return on ad spend of all online ad networks. Seriously, all of them. So get your ads in front of the right people and make your B2B strategy work. You can spend$250 on your first campaign on LinkedIn ads and get a free$250 credit for the next one. Just go to linkedin.com slash vergecast. That's linkedin.com slash vergecast. Terms and conditions apply.

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24:36David Pierce:Support for this show comes from LinkedIn Ads. When you're running your own business, every decision could feel like make or break, and you can't afford to waste a penny. So if your B2B marketing is still falling short, it may be because you're preaching to the wrong inquire, whether you know it or not. If you want to reach the right professionals, use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers, according to their data. That's where they stand apart from other ad buys. You can target your buyers by job title, industry, company, role, seniority, skills, company revenue, all so you can stop wasting budget on the wrong audience.

25:17David Pierce:That's why LinkedIn ads boast one of the highest B2B return on ad spend of all online ad networks. Seriously, all of them. So get your ads in front of the right people and make your B2B strategy work. You can spend$250 on your first campaign on LinkedIn ads and get a free$250 credit for the next one. Just go to linkedin.com slash Vergecast. That's linkedin.com slash Vergecast. Terms and conditions apply.

25:48David Pierce:All right, we're back. During the break in which Neal and I go and do many activities, which everyone likes to think about, we had some semi-meaningful Epic Google updates. Let's just live blog our way through this podcast. What's going on?

26:00Nilay Patel:Yeah, we're just going to read Sean's update. Sean's live blogging from the courtroom, which is always the most fun. So Epic's economist is in front of the judge arguing that the settlement is better than the injunction the judge issued which Epic argued for. You have to remember, Epic sued Google. Right. And won pretty handily. And they won. So the judge is like, why are you back here with a settlement when you were asking me for all this stuff that I gave you? And it seems to be very tense. And the core idea, the core argument from Epic right now seems to be this settlement is forever. Your ruling was for like three years.

26:35Nilay Patel:So give me forever. We'll compromise and take forever versus three years. The judge seems very skeptical of all this.

26:41David Pierce:Well, because the judge in this case has been very interested this whole time in making sweeping giant changes to everything. Like this has been, this is the judge who has been like, I am going to basically tear Google open with my bare hands. And I can see why he would be skeptical of the idea that these two companies, you know, figured it out amongst themselves and actually everything's fine.

27:02Nilay Patel:Yeah, let's just quote the judge. I questioned you about the need for the duration period. And you said it was such a critical remedy that you advocated for a period twice as long. but now they want to throw out the window for their settlement i don't know man sure we'll see

27:16David Pierce:what happens we'll check in on it as we go yeah we'll check in we got time um all right so right after we published last week's podcast um open ai announced that it was going to start doing ads essentially how i can put it um open ai sam altman the ceo of open ai has been saying pretty loudly over and over for the last couple of years that he didn't want to do ads that ads was a last resort that he didn't think ads was the right thing for chat GPT. And I would say our general assumption was like, buddy, you'll come around. Everybody eventually does. This is the only idea anyone has.

27:50Nilay Patel:Do the most lucrative business in the history of the world. Yeah, you'll do ads. Google is the most lucrative business in the history of the world.

27:57David Pierce:Lo and behold, they're doing ads. They also announced they're doing, they have a cheaper chat GPT subscription called chat GPT Go that is eight bucks a month as opposed to$20 a month. And then this week, Sarah Fryer, the CFO of OpenAI, published this memo of basically priorities for 2026. And the number one thing that they said was practical adoption of AI. And I would just say this is a very long memo of all of the things that OpenAI is up to. And it boils down to essentially, we have to figure out how to make money because everything is expensive. we have all of these giant commitments to pay.

28:36David Pierce:I think the number is$1.4 trillion just in compute. There was a really great story the other day about how OpenAI is paying its staff more per capita than any company in history. Like the money is just outrageous. And Sarah Fryer is basically like, we need to figure out how to make you use it in such a way that we get money now.

28:56Nilay Patel:By the way, it's not just Sarah Fryer saying this. The World Economic Forum is happening in Davos, as we speak. Another thing we'll live vlog as the podcast goes on. Sure. A lot of stuff happened at Davos. Trump talked about Greenland. And so you might have missed in the flurry of absolutely chaotic news, Satya Nadella in a conversation with BlackRock CEO Larry Fink saying, a telltale sign of a bubble is if all we talk about is tech firms, we need to talk about like everyone else using it. And then he was like, we need to make sure that we change the work with this technology so that people use it more.

29:34Nilay Patel:Otherwise, it's a bubble. There's a lot of ways to read that. Nadal's been saying that, like variations of this for a long time. But he's basically like, we need to convince people to use AI more. Otherwise, it's a bubble. That's not great.

29:44David Pierce:And use AI more dot, dot, dot at work, right? Like that is a thing. And that's a piece of this open AI memo too, is they go into, they talk all of this big game about all of the things that it's going to do and all of the ways that it's meaningful to people and all of the ways that everybody's using it to plan travel. And then it's like a new paragraph. And then it's like, and then they took it to work. And it's like, oh, right. AI is a SaaS business. Yeah. Like, do not ever forget it. For all the things they're going to tell you, AI is a SaaS business. It is a corporate technology. Well, we think so.

30:19Nilay Patel:But now they're launching ads because they don't know if it's a good enough SaaS business.

30:24David Pierce:This is the thing. They are begging you to take it to work so that your boss will pay for it. But then you're exactly right. The flip side of this is they desperately need a lot of people. Like there's no question that the adoption of these chatbots has been huge. Tons of people use it. Every number you see is gigantic, right? Like a massive number of people are using these in some meaningful way every month. But there's been a bunch of studies recently that suggest that some like small single digit percentage of those people are or are even willing to pay for access to those chatbots. that's like I've seen numbers.

30:58David Pierce:I've seen numbers like 8 % of people say they would ever be willing to pay. I've seen numbers that say 3 % of people say they're ever willing to be pay. And so it's like to go from ChatGPT is fun to talk to and seems like kind of my friend to I will pay$20 a month for access to ChatGPT is such a massive barrier for people that I think all of these AI companies are finally coming around to realizing $20 a month is like a hell of a lot of money. Yeah. And it's going to be a problem for them.

31:26Nilay Patel:I'll just bring you back to the CEO of Razor on Decoder at CS saying 20 bucks is 20 bucks, even though he's a billionaire. Like, first of all, there's pin drop silence in the room when he said that. I don't know, man. Like, first of all, the$20 price is kind of a historical accident. Like, OpenAid, I believe, just like picked the number out of a hat. Yep. And they've basically said as much. Yeah. They're like, we picked a number. Is this the one? So, you know, new products at lower prices, new products at higher prices. That's just what mature businesses do. But they're staring down Google at scale, delivering most of the value for free in AI overviews, as good or bad as you think AI overviews are.

32:09Nilay Patel:Their competitor is free and readily available. We're going to talk about Apple in a second. Apple's going to have a version of Siri powered by some riff on Gemini that will be free on your phone. Google's obviously going to do that on Android. OpenAI has to be better or cheaper or faster or something in order to get the scale to make their business work. And I bet what they're going to end up at is the same as Google, free with ads. Yeah. And there's a reason they are hiring so many people from Meta. Like, it is just a flood of people from Meta going to OpenAI. So much so that I have been told that like meta executives have to address it at virtually every all hands inside of Google.

32:50Nilay Patel:Oh, wow. Like another person has gone to OpenAI. Because they are, you know, they're paying more per capita than any tech company in the world. Like they're paying these huge numbers and they're just bringing over all these executives from meta who are good at products, who are good at advertising, who have those relationships. Are they good at it yet? No, but they certainly are hiring the talent at as fast of a clip as you might think they're hiring the core AI talent.

33:12David Pierce:That's really,

33:13Nilay Patel:Interesting.

33:13David Pierce:Yeah. And I think they are very much doing this in a meta style way too, right? Sam Altman has said that he is inspired by the way Instagram does ads where he actually has found products that he's bought that he liked that he never would have found otherwise.

33:28Nilay Patel:And like, is that praise for Instagram or is that just everyone's a sucker?

33:31David Pierce:It's just everyone.

33:32Nilay Patel:Like I bought a lot of junk on Instagram and I'm not like, yes, this is the future of commerce. I'm like, I am such an idiot. Every day I'm an idiot.

33:39David Pierce:Yep. I have, I have bought a lot of stupid things on Instagram. And I guess right now it's Quince, the like shopping or the clothing company is just all over my feeds. Just Quince everywhere you look. And I keep asking Anna, I'm like, is Quince good? And she's like, I don't know. I bought something on Instagram. We'll see. Yeah.

33:58Nilay Patel:It's like that one company, Viore, is a creation of Instagram.

34:01David Pierce:Yes.

34:01Nilay Patel:And if you're Sam Altman, you shouldn't be like, I need to create more of that. It's like, wow, everyone's a sucker. Yeah. They are very soft. I don't mean to, if you're doing it, you're fine. But like that, that's what Instagram created. And that's what he wants, right, is new brands can launch on this platform.

34:15David Pierce:But the pitch is very much like it seems mutually beneficial, right? Mark Zuckerberg has been giving this speech for damn near two decades now, right? That if we can find the people who want to reach you with the product that you want, that actually we can have something that's really great. And they've been singing the praises of targeting advertising for this reason for forever, that actually people want targeted advertising because it's more relevant and it'll expose them to products they like and on and on and on. And it's a really, really good business for Meta. Like you just can't deny it has worked unbelievably well for Meta to do this.

34:49David Pierce:And even some of the principles of OpenAI's advertising plans sound a lot like Meta in the ways that are both sort of interesting and devious. Right. Like it says we never sell your data to advertisers. That's one of the things in their blog post. You know who also doesn't sell your data to advertisers is Google and Meta. Yeah. That's just like they don't that's not how they make their money. That's not what they do. They use all the information they have. to put the ads that the company, they don't need to sell your data to do their job.

35:17Nilay Patel:Yeah, the data is their moat. Right. Yeah.

35:20David Pierce:So all of this, like, it's all just ridiculous. You control how your data is used. We don't optimize for time spent. Like, all this stuff. It's all fine and good. The thing that really kills me is, have you seen the picture of the ad that they used as the example?

35:33Nilay Patel:I have not. Let me open this and look at it.

35:36David Pierce:So it's in the story that we wrote about ads coming to ChatGPT. There's a picture at the bottom. Oh, this is horrible. That is an example. And just if you can't see this or haven't seen it, Neal, just describe the screenshot you're looking at right now.

35:48Nilay Patel:So someone's obviously searching for travel. They appear to be looking at Santa Fe, New Mexico. So chat GPT is answered. Santa Fe, New Mexico is often called the city different. It talks about the city. And then there's what can only be described as a sponsored tweet below it. Like that's what it looks like. Yep. And it says, here's the name of a hotel. These options may help if you're planning a trip to Santa Fe. And there's a link. and then you open the link and then it's like a chatbot about the ad. Is that, how else would you describe this? And this seems like the single worst experience you could have with advertising.

36:19It also takes up, I don't know,

36:21David Pierce:40 % of the usable real estate of the screen, this one ad with sponsored results for what you might want to do in Santa Fe. This is bad.

36:31Nilay Patel:So I know how advertisers think, especially advertisers on a product like this. The goal, and this is like broadly speaking, the thing that's happening to the web industry. Banners and boxes are bad. No one likes them. Everyone blocks them. So the goal is to make the advertising look exactly like the content you were there for in the beginning. This is why Instagram Reels or TikTok, their ad units are great. Yep. Because you're scrolling, you'd scroll. Now you're just watching another video in the same exact way you're watching a video to begin with. Maybe you want to move on. Maybe you don't, whatever.

37:04Nilay Patel:The advertising works because it's quote unquote native to the experience you're having. This is why like pre, this is why the ads in the podcast feed are annoying. If I can interrupt you, by the way, you can subscribe to The Verge to get ad-free podcasts. Disclosure. It's also why advertisers want the hosts

37:18David Pierce:to read the ads, right? Like it's all that, the more seamless it feels, the more it feels like the content, the happier everybody is.

37:24Nilay Patel:The more integrated you are, the better. And so you can see that thinking arrive in the screenshot where they're like, well, you're chatting. Now you should chat with an ad. And it's like, nope, that's not right. That's not actually the thing I wanted. I bet they iterate off of this really quickly.

37:40David Pierce:I sure hope so. Because I think you're right that this feels like both bad UX and like a bizarrely loud ad unit that is not what they want. Like this is borderline pop-up ad vibes in this.

37:54Nilay Patel:It's not that bad. It is very much like, why do you think I want to chat with the ad? Like that's just a question mark of a, like I don't understand the user experience at all. Like, here are some hotels you might look at. Here's a picture of one that is sponsored. Like, click on this and you can go to a web page. That's very, everyone understands that. Click on this and like, now you can, now you're not even looking at another different picture. It's just another text box. But inside of this text box, we just relentlessly try to sell you a hotel. It makes no sense to me.

38:28David Pierce:Now you can talk to this hotel about other hotels. They'll get there.

38:32Nilay Patel:Like I said, it's all meta people. They're going to figure this out so fast. They will.

38:36David Pierce:And I think this is clearly coming everywhere, right? Like the, this is the business model that's going to work.

38:43Nilay Patel:Google's response to this was saying Gemini would not have ads. And I think they're able to say that because they still operate search and they're putting ads in AI overviews and they have all this other surface area to monetize before they get to, we're going to monetize Gemini with ads.

38:58David Pierce:right google has the ability to use all of the money that it burns on gemini to make its other more lucrative products better right and this is this is like the meta story too right that meta is all of the investment in ai for meta will work because it will make ad targeting on facebook and instagram better and it will make it possible for them to just make ads for you out of whole cloth a thing we've talked a bunch about right that mark zuckerberg's big idea is you will just type in a prompt or for a customer that you want, or you'll upload a picture of a product that you have, and it will do all of the creative, all of the targeting, all of the everything for you.

39:35David Pierce:Like if you can build a chat bot that you can give away and lose money on in order to make all of that work, handily worth it.

39:43Nilay Patel:Yeah, you're doing great. Again, my prediction at the top of the year, spiciest prediction was opening. I would not survive the year in a way that is recognizable to us. And maybe this has stuff at work. Maybe they'll survive. I just see all of this as, oh, it's time to be a real company. And right in the background of that is the Elon Musk versus Sam Altman lawsuit saying OpenAI lied is supposed to be a nonprofit. There's a lot of spicy revelations from the first document dumps of discovery in there, including like Ilya Sutsukov saying AGI is impossible in the timelines that OpenAI has promised and it's bored.

40:19Nilay Patel:Just a lot in there. And so the pressure on this company to overcome all of its obstacles while it has well-funded competitors that have real businesses already, whew, that's a storyline for the year. Yeah, agreed.

40:32David Pierce:Speaking of one of those well-funded competitors, I think next to all of this is the very clear idea that one very good way to make money on AI is to sell people hardware. If you can get people to just pay you a bunch of money for a gadget. Maybe. I'm not saying it's right. I'm saying it's the theory. Maybe. ads will definitely work because people will look at ads but the idea of i think a you can make people pay you for hardware and b people who pay you for hardware are also going to be by definition more likely to then pay you for the subscription required to use the hardware so like again you can see the pitch i don't know if it'll work but you can see the pitch but the news this week uh there is a report from the information that apple is working on an ai wearable, which of course it is.

41:16David Pierce:But the news was that it's going to look like an AirTag. And let me just explain to you the reasons I'm suspicious that this is a real thing that exists. This is from our story about it. The rumor device is reportedly the size of an AirTag with a thin, flat, circular housing made from aluminum and glass. Fine. Here are the things that are supposedly inside of this AirTag-sized thing. Are you ready for this? A standard lens and a wide-angle lens. So two camera lenses, three microphones, a speaker, a physical button, and wireless charging. If you could put all that in an AirTag, you will have accomplished like an honest to God scientific miracle.

41:51Nilay Patel:Sure. Who knows if that sizing is accurate? I don't know, man. Maybe they mixed up a MagSafe pocket in an AirTag. I don't know.

42:00David Pierce:Like all that stuff is in the next iPad,

42:02Nilay Patel:not in the next. This is like when they were making the iPhone and the first prototype of the iPhone was an iPod with numbers arranged around the click wheel like a standard telephone.

42:15David Pierce:Yeah. Like, I think Apple makes stuff just to rigorously prove

42:19Nilay Patel:that some things are bad ideas. You know? Like, they're like, we ran that one to ground. Like, let's make a rotary phone like an iPod. We did it. We made one. Then we burned it, and we never are going to talk about it again. And I get the feeling that their riff on the humane pin is more in that zone. Because the one thing Apple knows about you is that you have an iPhone in your pocket. Yes. They are never going to displace the iPhone in your pocket if they have to.

42:44David Pierce:So I think if you are that company and you assume that you have an iPhone in your pocket, that you, Apple, have unique access to all the capabilities of, which it will not give to any other companies, this is the kind of device that you would make. Because the only thing your phone can't do is be on your body collecting data all the time, right? And this is like the grand theory of every AI wearable is we're going to put the microphone somewhere where it is always in play so that you can get more data from it and then the AI can do more useful processing. That's the whole plod pin thing is like, just it'll be on your, it'll be around your neck and that way it'll hear all of your conversations better than the phone that's in your pocket.

43:23David Pierce:So if you're Apple, like sure, take a thing and give it a bunch of microphones and a bunch of cameras and then just let it record and dump all of that onto your phone.

43:31Nilay Patel:And make that thing round, like you're wearing flare at Applebee's. Like what is the idea here?

43:39David Pierce:it's a fair question this is why this is what i don't know is i think the funniest thing about all of this to me is that we have landed on one killer app for all of the recording stuff and it's summarizing meetings have you noticed this yeah every ai app that exists ends up supporting automatic meeting capture because it's pretty easy to plug into google meet or zoom or teams or whatever and it's pretty easy to summarize a bunch of stuff and pull out some action items And that is medium useful to lots of people. And so this is the killer app for consumer AI wearables somehow.

44:12Nilay Patel:And a lot of it sort of implies the rest of your life should work like meetings. Yes. Yes. And at the end of every conversation, you should generate action items. And it's like, I don't know, man. Like most conversations in my life right now, the action item is like, is the baby alive? We should keep the baby alive.

44:30David Pierce:Wait, so are you of the mind that Apple is not going to be sort of actively interested in doing an AI wearable because it's so invested in the phone? I think Apple's entire business is the iPhone and selling services on the iPhone and taking 30 % of Candy Crush on the iPhone.

44:49Nilay Patel:Anything that disrupts that business, Apple will not do. Regardless if you think Apple is the best at disrupting itself, whatever, they're never going to touch the iPhone business. That is a monopoly through and through. That is how they have run it. Maybe Tim Cook steps down and whoever it is is the new CEO. And they're like, we have to cannibalize ourselves first, like Steve Jobs. But that's not happening today. Tim Cook is the CEO today. Mr. Supply Chain is the CEO of Apple today. They are not going to introduce a product that disrupts the iPhone in any meaningful way today. If you can leave your house without a phone, the only device you're going to leave your house with is an Apple Watch.

45:26Nilay Patel:and they will roll more of these features into the watch before they make another thing that can disrupt their existing businesses. So I just, I don't buy it. I do think that they're caving. I think they're realizing that the industry and the consumer has moved on beyond their ideas on AI. Like if you remember when they first announced Apple Intelligence like a year or a half ago, they're like, we're not going to do a chatbot. We don't need to do a chatbot. And like the rumor is Siri's just going to be a chatbot now. Yep. I think they realize like that is a form factor that works. That is a user experience that works.

45:56Nilay Patel:We're just going to let people push the button and talk to Siri the same way that they're talking to ChatGPT today. That's a way bigger threat to anything OpenAI will make. Like the hugest threat to OpenAI is a thing that works like ChatGPT will just exist on the phone and they'll get Sherlocked. Yeah.

46:12David Pierce:And I can wake it up with my voice instead of having to unlock my phone and open an app. Like that's that just it can move it two layers further up on your device. And that makes it essentially.

46:23Nilay Patel:Will Apple be good at this? I don't know the answer to that, but all the rumors are they're going to be using Google's models. Gemini is pretty good at this. There's a lot there, but the reason people are excited about AI wearables and voice and all that is because it's a form factor shift. It's a user interface shift, and that is typically where you get to disrupt the incumbent. And I just don't see any of the stuff disrupting the iPhone because Apple's ability to build it into the iPhone, Google's obvious ability to build it into Android is right there. and no one made a thing that was good enough to beat Apple to the punch.

46:57Nilay Patel:Yeah. Maybe OpenEye will ship that thing this year, right? John, they promised that we're going to see it by the end of this year.

47:04David Pierce:I don't know, man. We'll see. I'm skeptical of all of this, including and maybe especially the timelines. But with all of that said, I'm going to make you play a game that you're going to hate. Are you ready for this?

47:15Nilay Patel:Let's do it.

47:16David Pierce:So, okay. We have the Rank-O-Matic, which our producer, Travis, continues to heroically iterate his vibe coding on. And what I want to do right now is I want to rank the ideas about AI gadget form factors. I think we've basically seen six ideas or rumored ideas about what an AI forward gadget might look like. And you and I, but mostly you, are going to rank all of these things that you hate from number six to number one. And you're going to have to decide which one is the best form factor for an AI gadget. You good with this?

47:53Nilay Patel:Oh boy. Do I get to see the whole list first?

47:55David Pierce:Yeah, I'll read you the whole list. I'm going to share my screen. If you're watching this on YouTube, you can see us mess with the Rank-O-Matic.

48:03Nilay Patel:Because the hardest version of this game is where you don't tell me what's coming next.

48:08David Pierce:Oh, you want a blind rank? No, this is good. You can have all six, and we'll just go from here. So the six, I will say, are a pin, which I think is sort of self-explanatory, whether it's the Humane AI pen or something else that you kind of wear on your chest like that. A pen, which is what the Johnny Ive OpenAI thing is rumored to be, like an honest God, just pen.

48:30Nilay Patel:Sam Whitman claims to be a pen nerd, although a true pen nerd Liz Lepato on our team thinks he's a poser. Correct. Saying it for the record.

48:39David Pierce:Earbuds, which we've heard a lot of rumors about. AirPods with a camera is a thing we've heard some rumors about. OpenAI and Johnny Ive might also be doing earbuds, AirPods stuff. Who knows? A pendant, something you like actually wear as a necklace kind of like the friend that we saw. What I'm calling rectangle which is just something that is kind of smartphone-ish. The Rabbit R1 is probably the most known version of this.

49:05Nilay Patel:Do phones count as rectangle? What's that? Do phones count as rectangle? No.

49:10David Pierce:Phone is excluded from this game. Okay. So rectangle is like

49:14Nilay Patel:cut down not phone.

49:16David Pierce:Phone has been like phone's jersey is already in the rafters you know what i mean like we've we've retired phone as

49:22Nilay Patel:the best but what's the line of rectangle like if i buy a mid-range android phone put the gemini

49:28David Pierce:icon no this is a specific ai device but it is kind of the shape of a phone it's a rectangle it's right shut up phone okay uh and then the last one is glasses so we have pin pen earbuds pendant rectangle and glasses and you're going to rank them six to one all right let me let me

49:52Nilay Patel:just ask a few more questions please am i ranking the way that i think the verge should rank things which is based on the products as they exist today or the way that the audience wants us to rank things which is how the products exist in their hopes and dreams i think for this one we're going

50:09David Pierce:to do hopes and dreams because none of this exists in like it's all they're all tied for last in in in the world in which we live. It's just a big bundle of sixth place. But I think what I'm going for is like, what is sort of in theory the best idea in your mind right now for how to do this kind of device? Which means you have to grant me two premises. Again, I told you you're going to hate this game. I hate this game. Premise number one is there is a version of this that is a good idea. I need you to hold that idea in your head. All right, all right. At least one of these is a good idea. And then premise number two is AI deserves a dedicated device.

50:44David Pierce:So you have to agree with both of those things, and then we're going from there.

50:48Nilay Patel:Okay. So in the hopes and dreams world, which I will again insist that I choose not to live in. Understood. Number one is obviously glasses. Interesting. With a bullet. Like, if you get the true AR glasses with the AI overlays, it's obvious.

51:09David Pierce:Even though it completely violates Neal's theory of wearable bullshit.

51:12Nilay Patel:Well, in hopes and dreams world, it has such staggering utility that it overcomes both fiddliness and most importantly, face. Okay. So, Nealized chart of wearable bullshit, as you know, is utility is on one axis and fiddliness is on another. And fiddliness encompasses things like how often I have to charge it, and there's a massive fiddliness penalty for face.

51:35David Pierce:Right.

51:35Nilay Patel:And so traditional glasses, huge penalty for face, but massive utility, low fiddliness otherwise. If you make true AR glasses that are AI enabled, that can see the world around you and provide useful information in your line of sight, obviously number one. Okay. I do not believe that product will exist in any timescale that we live in.

51:58David Pierce:I think that's right. But I do agree that even for perspective reasons alone, the idea that it can see what I see makes glasses more powerful than any of these other things.

52:08Nilay Patel:And it can layer digital information over the real world. Yeah. Fine. Many, many, many questions. Who is in control of the digital information overlaid on the real world? Is it Mark Zuckerberg? Because that sucks. But, you know, that's life.

52:23David Pierce:Right. Who knows? But no, I think that's actually, I think you just perfectly described both why everyone is chasing glasses and why you and I are both very skeptical of them being the thing that we want them to be anytime soon, if not ever. Because you're right that the sort of perfect end state is spectacular and kind of unparalleled in what it can in theory do. And the number of possible potholes on the way to get there is just virtually infinite.

52:52Nilay Patel:Yeah. Again, if you were asking me about reality, I would put this at like six. Yeah.

52:58David Pierce:No, we're going pure hopes and dreams here. All right. So glass is number one with a bullet. Let's work our way down. What's number two? I think number two is earbuds. I agree with that.

53:06Nilay Patel:Right. This is like, what are the things that are, this is my theory of wearable bullshit. That's what we're talking about here, right? Whereas the least amount of fiddliness and the most amount of utility and earbuds already meet that bar for so many people, you add in a bunch of AI features, you're winning the game. But you don't get the big benefit of the glasses overlaying digital information in the real world.

53:27David Pierce:I had these two as my top two as well. And I think I would almost make the case to put earbuds number one just because they are such a less obtrusive thing. And as somebody who wears glasses, the idea of wanting to wear glasses feels essentially impossible. But I do think you're right that the upside of screen, if we get all the way to it, probably outweighs the upside of what you can do with earbuds.

53:53Nilay Patel:Yeah, that's kind of my feeling. Again, this is hopes and dreams. Although I will say like, AI translation on the various earbuds that support it. Very, very empowering for a lot of people today. So this is a little less hopes and dreams. Like the products exist today in a way that works for people. That's not something you can say of glasses. But again, David's insisting that I live in hopes and dreams as well. I'm like this close to selling you a shit coin. Like buy, let's pump some crypto while we're doing hopes and dreams. Have you heard about NFTs?

54:21David Pierce:At some point we'll play the game of which one of these is most likely to reach its potential. And I think earbuds are much more likely to reach that potential than glasses are.

54:30Nilay Patel:Yeah.

54:30David Pierce:But that potential is much lower.

54:32Nilay Patel:Totally agree.

54:33David Pierce:Yeah.

54:33Nilay Patel:And the challenges are much easier.

54:36David Pierce:Yeah.

54:36Nilay Patel:All right. What's third place? Everything else in my mind is sort of tied for six. So because everything else is like really, really fiddly. It imposes everything else imposes some sort of cost that is not a cost that you accept today. And so does pin invoke that much cost? I think there's something about pin. You are the one who reviewed the Humane Pin. Did you feel like that was a free experience or did you feel like you were a giant dork?

55:02David Pierce:I felt like I was a giant dork and it was a bad product. But I do think there's something to the idea of this device being just like a little puck that I can put in a bunch of different sort of accessories. They made one that was like a clip that you can put on your backpack and one that you, you know, there's the one that you wear on your chest and you can wear it around your neck and you can have it be kind of a bunch of different sorts of devices. And by the way, if I'm Apple, that's what I'm building. I'm turning the Apple Watch into that thing, this little modular rounded rectangle of an AI device that can go lots of places and be lots of things rather than trying to invent a whole new device.

55:38David Pierce:The Apple Watch ankle monitor edition.

55:40Nilay Patel:Exactly.

55:42David Pierce:Yeah, the Apple Watch, but it just is a clip that I can put on my backpack. Like, yes, give me that, please.

55:49Nilay Patel:They will never do that because the reason people buy Apple Watches, or at least in Apple's conception, is fitness and they need a heart rate sensor.

55:55David Pierce:Yeah, I mean, that's very much what it is now. But I'm just saying, if I'm building an AI gadget, I think you've done most of the hard work inside of the Apple Watch.

56:01Nilay Patel:Fine, I'll grant you pin at number three. Only because of all the rest of these, it is sort of the... Well, I still don't really know what rectangle is in your worldview.

56:11David Pierce:There's a picture of a Rabbit R1 here, man. It's not complicated.

56:14Nilay Patel:But what is the difference between Rabbit R1 and Humane Pin? They both sucked. The Humane Pin doesn't have a screen. Okay, but it had the laser projector. did it

56:27David Pierce:I can't argue with that rebuttal at all alright so pin we're putting number three at pin can I make a brief impassioned case for why I think pen should be number four I really like the idea of some kind of everyday object being used for this sort of thing we've done smart pens a few times over the years Like there's this company LiveScribe that would store the information that you were writing as you were writing it and it would transmit it back to your computer and you could also use it to get audio that would sync to your notes. And there's like there's something in that thing where it's an object that fits in my pocket, but I can also put it on the table.

57:08David Pierce:But I can also sort of physically use it for things that then add to the data. There's something about that that feels reasonable to me in terms of what it is to be a person.

57:19Nilay Patel:yeah i just think it's funny that this is premised on a thing you will do with this objects is right and longhand a lot somehow we're back at this meta's out here being like you're

57:28David Pierce:gonna you're gonna wear our neural band and scribble on the ground with your fingers and

57:33Nilay Patel:that's how you're gonna communicate this is what we're doing i just think there's a lot of other pen like things that like fit your description like knife you know why not like just have a knife that you pull out and sometimes you use your knife and it's really useful and like you probably use the knife as much as you use a pen and sometimes

57:54David Pierce:you start a meeting and i just pull out a hunting knife and put it on the table

57:58Nilay Patel:in many situations i think that would be more useful than putting a pen on the table like i was i've been in several meetings where i'm like man i wish i'd started this way just put a knife on the table.

58:11David Pierce:It's a switchblade and you turn it on by flipping up the blade. That's how you start the recording. That's pretty good. Just throwing it out there. Johnny, if you're listening and I know that you are, you can have that idea for free.

58:21Nilay Patel:Please make knife. Like honor roll mention here is AI knife.

58:25David Pierce:But it's knife. It's K-N-A-I-F-E. It's just knife. All right.

58:32Nilay Patel:I'll give you pen at four, although I fully disagree.

58:36David Pierce:This is only because you hate the last two so, so very much.

58:39Nilay Patel:Well, pendant is six. Yes. That means rectangle is five.

58:43David Pierce:I think that is handily correct. Why is pendant six for you?

58:48Nilay Patel:It just completely violates the theory of wearable bullshit, right? Like there's no amount of utility you can get from a necklace that overcomes its fiddliness and like disruption to your life. You have to want to wear this necklace every single day of your life for it to be valuable. And then it just can't be that. It's going to run into like your own personal sense of style. It's going to run into the fact that it's a heavy thing around your neck that if you move a lot will swing around and be annoying. Like there's no level of utility that overcomes this level of fiddliness.

59:24David Pierce:Yeah, I completely agree with that. And there's something about having someone come up to you wearing what looks like a fake Iron Man core around their neck that just feels, for some reason, that feels at least as invasive to me as someone wearing AR glasses. That it's like, here is this glowing orb recording me. Feels awful to me. I just can't get past it.

59:50Nilay Patel:It's the rare wearable that has a higher or more punishing fiddliness score without a face penalty. But I think pendant is it. Yeah. This is more fiddly than things you put on your face. That's a, you've lost. It's always number six. Rectangle, I'm penalizing only because it remains in my mind ill-defined as anything other than bad phone.

1:00:13David Pierce:I mean, I think that's kind of why I put rectangle on here, because I think the question is, is there a thing that looks... phone-ish, but is deliberately not a phone that can work. Oh, here's a question. So rectangle is maybe, I don't know what the rabbit is saying. If I could get you like a flip phone,

1:00:33Nilay Patel:like one of these like sort of popular, you should have a second phone flip phones, but it had Gemini in it.

1:00:41David Pierce:Would that, would that, is that a thing? It's a great question. What if you flipped open your flip phone and that's how you talk to Gemini? Right.

1:00:48Nilay Patel:It was just kind of, it was kind of a dumb phone, like no apps, no distraction, no social media. I'll give you a maps app. That's the one thing everybody always says they want. They want maps on their phone. And then you also have Gemini for all the other stuff you need to do or other, you don't need a web browser, right? You're just not going to be distracted, but if you need to like get a question answered, Gemini is there to confidently lie to you in whatever way Gemini is going to lie to you. Is that a meaningful form factor?

1:01:14David Pierce:I think there are people who say yes. I think to me, that is just as fiddly as a phone, but vastly less powerful. And so the idea to me is like, how do you solve the UX of that to make it so easy to do Gemini on that device that it's actually worth having a separate device for? Right, because otherwise you get what we were talking about with Siri, where they're going to make it, the top layer of the phone is going to be the chatbot. Then it becomes, I don't know how you beat that with hardware. Right.

1:01:46Nilay Patel:I think you would say this thing doesn't have Instagram on it. I mean, that's how all the dumb funds are being marketed today. Yeah. They don't have social media. It doesn't have a bunch of feeds on it. Like this thing is going to make you more intentional. You're going to be in the moment. But when you need to call the Uber, there's a cut down Uber app here because that's what you need. Yeah. And you could see building a version of that where it, But also you have, you know, an ecosystem of capabilities that are accessed through an AI system. And so you're not making the promise of like, here's, it's listening to you all the time to make meeting summaries of like your conversation at the bar.

1:02:20Nilay Patel:It's much more like this thing. We've removed all the things that cause distraction, but it's still just as useful as a phone. Right.

1:02:28David Pierce:And it still does this one actually extremely useful thing, which is go be the answer engine for you.

1:02:34Nilay Patel:I will say that we have now just described an Apple Watch.

1:02:37David Pierce:This is what I'm saying. Yeah. Apple, if you're listening, just a clip that I can put on my backpack. That's it. Thank you. And make the battery last longer. I'm curious for other people's rankings.

1:02:48Nilay Patel:I'm also curious what other people think rectangle is.

1:02:52David Pierce:Send us A, your favorite rectangle, and B, yeah, send us your rankings. We're going to figure out how to make the Rank-O-Matic into a website. I looked up how much it would cost to buy Rank-O-Matic.com and it was$3 ,333. Of course. So we will not be buying Rank-O-Matic.com. But if you own it and want to give it to us for free, vergecastatheverge.com, get at us. But until then, our rankings for now, glasses number one, earbuds number two, pin number three, pen number four, rectangle number five, and pendant number six with phone as the sort of large thing just slapped over top of the whole ranking.

1:03:28Nilay Patel:Can we make pendant lower somehow?

1:03:32David Pierce:We'll leave six, seven, and eight empty and then pendant is number nine.

1:03:35Nilay Patel:Yeah, that's right.

1:03:36David Pierce:That's good. All right, Neil, I thank you for playing this game with me. This is delightful. We're going to take a break and then we're going to come back and it's time to hear from our man, Brendan, and do a lightning round. We'll be right back.

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1:06:49David Pierce:All right, we're back. Time for an update on the Epic Google Live blog. Neelai, what's going on?

1:06:55Nilay Patel:As we speak, Epic CEO Tim Sweeney is being sworn in on the stand.

1:06:59David Pierce:Ooh, this is exciting.

1:07:00Nilay Patel:I have no idea what he's going to say. I will say, Sean just reported in real time as we're podcasting, that there may be a secret product deal between Epic and Google that the judge is allowing them to keep secret as part of the settlement. What? Yes. The judge keeps asking Epic why it's suddenly agreeing to settle and has revealed that Epic and Google are in the middle of a deal that involves joint product development, joint marketing commitment, and joint partnerships. And the judge is concerned that Epic is throwing out its case because Google is offering the best deal.

1:07:31David Pierce:Google Stadia is coming back, but the only game is Fortnite. That's what it is. We did it.

1:07:38Nilay Patel:It's getting hot in the courtroom. We'll keep you updated as Sean continues to report.

1:07:43David Pierce:That's good stuff. All right. Let's get into the lightning round. Neil, is it time? He did it.

1:07:49Nilay Patel:He was particularly dumb this week.

1:07:51David Pierce:It's time once again for America's favorite podcast within a podcast. Brendan Carr is a dummy. Neil, what do you do?

1:07:57Nilay Patel:He's such a dummy. That's the tagline for Brendan Carr is a dummy. He's such a dummy.

1:08:06David Pierce:Yeah, with like two or three exclamation points at the end.

1:08:08Nilay Patel:Yeah, someone make us some AI theme music. Love it. It's going to be great. We don't have to work very hard on it. I won't feel bad about it. Just make it and send it. We'll start playing it. Okay. So here is one of the weirdest aspects of Trump 2. As I have said, it's just a bunch of influencers. Influencers armed with the power of the state and a weird unconstitutional police force that is doing horrible things every day. But influencers nonetheless. And the weird unconstitutional police force is also just like swarming our cities with content creators to make content. Like, it's weird. That's the whole administration, right?

1:08:42Nilay Patel:Content. Up and down. That's all they care about. Clout and views. J.D. Vance, content machine. They keep acting like the only thing people watch is broadcast television. It's such a fundamental disconnect in the worldview of the people in charge that they all know that all the action is on social platforms and they should do clout. They run a hype house. Like, weird, right? They know it. It's embedded in the administration. We should put vloggers with ICE on the streets of America to make content and shape the narrative. And then they turn right around and they're like, we have to crack down on broadcast television for misleading the American people.

1:09:26Nilay Patel:And you're like, what? No one's even watching this. But it's the power they have. Because our nation's airwaves are under control of the Federal Communication Commission. And they're a scarce public resource and under some old precedents, including Red Lion, which I bring up on the show all the time. because it's a scarce public resource and because the broadcasters have not paid a license fee, the government has some interest in how those airwaves are used. And Brendan Carr has seized upon this to do whatever he wants to the nation's broadcasters. And it is just such a disconnect because he's always like, the most important problem in telecommunications in America is not rural broadband or kids having to go to the library to get wife access, do their homework or anything.

1:10:12Nilay Patel:it's what late night hosts are doing on broadcast television and i will use the power of the state to crack down on jimmy kimmel so this week the fcc is targeting late night hosts using a long dormant law saying that if late night shows book politicians they have to the networks have to provide equal time to the opposing party because you know what politicians don't have enough access to in America is making and sharing media.

1:10:47David Pierce:Yeah. Didn't this become a whole big thing with SNL during the last election? It did. So SNL is very good at this.

1:10:54Nilay Patel:So Carr came at SNL super hard because they had Harris on and NBC needed to give Trump equal time and Carr opened an inquiry. But it turns out SNL has long been good at this because under no circumstances can SNL be considered news and news has an exception to this rule. So if you're a Republican politician and you go on NBC News, they don't have to offer equal time to your opponent because the news has an exception. There's a lot of reasons for that. Like you want your elected politicians to show up on the news. And so you don't have to provide equal time. By the way, I should disclose that NBC is an investor in a parent company, Vox Media, whatever.

1:11:32Nilay Patel:It's true of all the networks, ABC, CBS. All the broadcast networks have these rules. Late night shows have been skirting under the idea that these interviews are newsworthy. So they get the news exception. You can argue with that. Maybe it's true. Maybe it's not. Maybe these interviews are all puffballs. Whatever. There's no argument that SNL is news. Right. None at all. So when SNL had Harris on during the election, NBC had already done the work and filed the paperwork. And if you recall, they gave Trump ad spots during a NASCAR race like the next day. Right. And so Carr was all smoke and fury, but it came to nothing.

1:12:05Nilay Patel:And I'd heard from people at the FCC, like, this is nonsense. SNL is the only program that cares about this, and they're good at it, and they have been for a long time. Interesting. Okay. The daytime shows, right, the interviews are quote unquote news and they haven't done this work. So, Brendan Carr, how is he using his time? Well, he's not bringing down wireless prices. He's not expanding broadband access. He's saying that Jimmy Kimmel, Stephen Colbert, Seth Meyers have to give equal time to the opponents of the politicians that show up on their shows, including daytime talk shows like The View.

1:12:39Nilay Patel:and everybody is like, well, this is kind of unconstitutional because you're interfering with their speech. This rule only made sense when these networks had monopolies on media distribution. That is long gone. Again, no one's watching these things. You know, like all these shows, do you know where the majority of their viewers are? On YouTube the next day. What are we talking about? And then you also run into the part that I think is particularly good. He's such a dummy. Well, you know what this rule would also affect? Conservative talk radio. Oh, right. Because they're on the broadcast spectrum.

1:13:17Nilay Patel:Sure. So, like, do conservative talk radio hosts have to offer equal time to Democrats? I don't know, but I know that Brandon Carr is not going to run that down.

1:13:27David Pierce:I know for sure Gavin Newsom would say yes to all of those. He would go. He would definitely go.

1:13:35Nilay Patel:So there's just a lot of arguing back and forth. this is just an enormous waste of time. I can't be clear about this. This is an enormous waste of time around government speech regulations over things that people are not watching. And one, you shouldn't have government speech regulations. If I have one consistent political viewpoint on this show, it's that government speech regulations are bad. The second one is that competition is good. You tell me what my politics are. It doesn't track what people think, but that's what we say. and this is a government speech regulation imposed on a bunch of comedians basically who do not have the monopoly over media distribution that at one time justified the ability of the government to make these speech restrictions because no one's watching this shit they're all on their phones watching TikTok he's such a dummy Brendan as always if you can justify any of this nonsense you're welcome to come on this show I'll offer equal time to your opponents happy to do that but I don't think you can.

1:14:35Nilay Patel:I think you're a coward. So that's your invitation as always, Brendan. Once again, I think you're a dummy. That's been Brendan Carr's a dummy. America's favorite podcast within podcast. It's good stuff.

1:14:43David Pierce:I really feel like the thing they say about newsrooms all the time is your newsroom's job is just like whatever your editor, whatever happened to your editor on the way to work that morning. The whole United States government is just like whatever Donald Trump saw on television.

1:14:58Nilay Patel:Yeah.

1:14:58David Pierce:That's just what it's very strange.

1:15:00Nilay Patel:This is what I mean. He is a creature of social media. Yeah. Right. Trump tweeted his way to the presidency, not once, but twice the second time because Elon bought Twitter and gave him access to the platform again. It's it's crazy that they know they know where the power comes from, but they can't regulate those platforms. It can threaten those platforms and they do. And you can see that happening in different ways. But when the power they have is over the broadcast networks, and so they have to pretend that broadcast networks are massively more powerful than they are to impose these speech regulations.

1:15:33Nilay Patel:I suspect we'll see some lawsuits here. I suspect, you know, there'll be whatever argument, especially if they don't apply the rule to conservative talk radio. But in the meantime, this is just a huge waste of resources, time and money. We're good at that right now. Amazing.

1:15:48David Pierce:All right. My first one, while we're talking about TV, Netflix had its earnings this week and said a bunch of really interesting stuff. They talked a bunch about podcasts, which actually Nick Kwa and I are going to talk about on Tuesday's show. The whole Netflix podcast thing has been deeply bizarre. We're going to talk about that. But Netflix also said that they're going to revamp their whole mobile UI, that we're going to get sort of a full redesign of the Netflix app. And they said pretty directly that most of what that means is more vertical videos in the Netflix app. And so, Neelai, what I wonder is, are we finally going to get the thing that you have been saying we should get for forever, which is just the Netflix app should just be a TikTok feed of clips from Netflix shows.

1:16:36David Pierce:And then you go through until you find one that you like, and then you press play and it takes you to the show. Like, it seems not crazy to me that that is actually the direction Netflix is going to sprint in as it changes its apps.

1:16:47Nilay Patel:Yeah. By the way, this is my idea. And I proposed it directly to Netflix co-CEO Greg Peters when he was on Decoder last year. So what's up, Greg? I should be in this press release. Where are my royalties, bro? At least promote the show. Like, shout me out. Where are you at, dude? He's busy. He's trying to buy Warner. He's busy trying to do the most suicidal thing anyone can do, which is buy Warner Brothers. Yeah, that's fair. This is obviously what they should do. Netflix has this problem, which is, as we've discussed so many times, people are not watching this stuff on their TVs. And the thing that's growing on TVs is podcast viewing on YouTube, which obviously they're getting into.

1:17:25Nilay Patel:And how do you feel about when you see Bill Simmons' Ringer podcast in the Netflix feed next to The Rip? There's something inherently weird about that that they're going to have to solve.

1:17:35David Pierce:It has not. I'm getting increasingly used to Netflix just feeling like a mishmash of stuff. Yeah. Podcasts, it's still new so maybe I'll get used to it but every time a podcast appears I'll give you an example that you in particular will appreciate. My wife sat down the other night to start, she's watching Owning Manhattan, Ryan Serhant's show on Netflix right now and loves it I think Ryan Serhant is, I'm like a little bit in love with Ryan Serhant, it's a whole thing. But anyway she sits down to start watching the show opens up Netflix and you know how but if you leave it for a second, it'll autoplay the first thing in the first tile.

1:18:07David Pierce:The first thing in the first tile was Pardon My Take, the Barstool Sports Football Podcast. And so I walk into the room 10 seconds after Anna sits down and she's just watching Pardon My Take on our television. And I was just like, what has happened to the world that this is the autoplay experience? It's very confusing. Really bizarre.

1:18:27Nilay Patel:It's deeply confusing. And it's so funny because there's a world in which I just want to sit down and like have NFL gossip presented to me. And I'm still not sure that I want that from Netflix, you know? Yeah. Anyway, I think they've got to figure out a bunch of stuff on the TV side. The question is, well, if all the viewing moves to the phone, then you really are competing with TikTok. Right? And this is what I keep saying. Like the reason people buy frame TVs is they leave them in whatever liminal off state Samsung has decided art mode in and they're actually just watching their phones. And we saw Matt Damon and Ben Affleck like talk about the rip in exactly this way to of all people, Joe Rogan, where they said Netflix told us to stop the movie and explain the plot several times because they know people are on their phones.

1:19:11Nilay Patel:Yep. So this is the reality of the entertainment industry that we're in. And I think if you're Netflix, you're like, well, we got to get people to open this app more often. Video games isn't going to do it, which is their first cut. And like, okay, TikTok is going to do it. We're just going to straight, like our stuff is pirated on TikTok every day anyway. I also believe that all the studios just started secretly clip boosting their own content when they want to show it to people.

1:19:33David Pierce:Like they're running their own clip farms? Yeah.

1:19:36Nilay Patel:Like I don't think Landman is so popular that it should generate as much seemingly pirated clips is what I see. Do you know what I mean? Uh-huh. Like I think Zaslav is like unleash the bots. Like I think that's what's happening there. And you can see like whenever there's a thing everyone wants you to watch, like the clips just start appearing. I think that's marketing. And I think Netflix knows this. and they're like, why are we paying me this on TikTok? We'll just make our app fun to use with our content. And then truly you can push the button and just drop into the show right where you started.

1:20:08Nilay Patel:They should have done this ages ago. Actually, all of these platforms should have done this ages ago. I think in Netflix, from what I recall, that conversation with Greg Peters, there's just a bunch of licensing you have to do to make that go.

1:20:18David Pierce:Oh, sure. Whereas you can kind of like, it's piracy.

1:20:22Nilay Patel:We don't know what's going on over there. Like wave it away, but it's in the app. There's a lot of content licensing you have to do to pull that off.

1:20:27David Pierce:Yeah, that makes sense. I mean, and I think it's just weird to see Netflix go from being, we want to be prestige TV, which is what Netflix was for a long time, to basically we want to be prestige YouTube, which I think is kind of where it is now, where they're pulling in creators to do stuff. They're pulling in video podcasts. Like the sort of curated creator universe is a real thing that Netflix wants to be. Now it wants to be prestige TikTok. and and i think that how far and how weird you can get with that brand and still be the prestigious

1:21:01Nilay Patel:thing oh i don't think they care about that they want to be the monopoly maybe maybe they're they're

1:21:05David Pierce:now so big that being the prestige play is a waste of time netflix is a company that said our only competition is sleep that's true that's true but i think i think netflix has continued to pride itself on being very good right that it is they're not trying to have the sheer volume because they're like, well, what we have is guaranteed quality. And it feels like their grip on that is loosening a little bit here. And maybe they don't care. Maybe as long as you are watching, they care less and less about what it is that you're watching.

1:21:38Nilay Patel:The pressure of now we have a mobile UI that looks like TikTok and people are watching a thing that looks like TikTok going from this is the solution to discovery on our platform to this is the thing we monetize. That's when the switch flips.

1:21:49David Pierce:If it works, that will happen. But also, To be clear, all of this is downstream from, I think this is an exceptionally good idea. It's very good.

1:21:56Nilay Patel:I actually really do think this is what the Netflix app should be. Once again, I will point out that I pitched this idea to Greg Peters, the co-host of Netflix, last year. And Greg, the next time you mention it, just, you know, Dakota exists. You could just say the name. It's thrown out there, buddy. All right, what's your next one? More TV. I got to talk about Telly. telly is the the the company their big idea was that they would give you a free tv but underneath it would be a second smaller widescreen screen that just showed ads and the rules were bananas if you agreed to this they would send you a free tv the ads would be on all the time you had to use this free tv as your primary tv in your main room and you had to keep the camera on all the time so It's like a checkout that you're watching it.

1:22:44Nilay Patel:And if you like disconnected the ad screen or blocked it in some way, you got in trouble. This is a lot for a free TV. We reviewed it. The thing didn't work very well. Whatever. They told us they were going to sell millions upon millions of these TVs or give away millions upon millions of these TVs. The CEO at one point said he thought this was a trillion dollar company. Our friend Yanka Ruckers, who writes low pass, there's a column we syndicate. He got some data. Telly's only moved 35 ,000 free TVs last year. That's as many as they have installed. 10 % of the units they shipped broke in transit because I think they cheaped out on who their shipping provider would be.

1:23:24Nilay Patel:So now they've switched providers, the same one Samsung uses, because a 10 % shipping breakage rate is ridiculous. And then he's done some math based on the revenue numbers they were quoting in the documents that he saw. and they made$22 million in annualized revenue in Q3 of 2025, which if you just divide out by 35 ,000 TVs, they're making$50 in advertising revenue per TV per month.

1:23:53David Pierce:That seems hot. That seems like a big number.

1:23:55Nilay Patel:It seems like a great business if you can ship TVs that people want and they don't break on the way. That don't break. Your 10 % breakage rate really cuts into your revenue of$50 per month, right? Yes. And I have no idea how much the service costs to operate. I don't know how much the executives are paying themselves. I was like, that's not profit. That's just revenue, which may not be enough to cover the operation business. But so far, they've only managed to ship 35 ,000 of these things, 10 % of which are breaking. And who knows if they're going to ship all of the pre-orders that they've taken.

1:24:26David Pierce:Yeah. That whole thing is so fascinating to me. I remember Ilya Posen, who's the CEO, he came on The Vergecast like two years ago now and made an incredibly compelling case for why telly should exist. And I think, you know, to the extent that it's saying the quiet part loud about how advertising works on TVs anyway, this is the stuff we were talking about, right? That the reason your TV is as cheap as it is, is because it's watching you and collecting data on you and targeting advertising against you. And so for him to say, well, we're just going to make that agreement the whole agreement works.

1:25:00David Pierce:And they got a lot of pre-orders and there is a clear version of that trade that people are willing to sign up for. And what he said over and over to me and to others was that actually making and shipping you the TV is not the hard part. That it's the rest of this stuff, building the software and building the advertising business. That's all the hard part. TVs are simple commodities. we can just get one of those to your house. So the fact that that is the thing that is tripping them up is sort of fascinating and frankly very telling. But it turns out it is actually pretty hard to manufacture and ship a lot of people a lot of television.

1:25:35Nilay Patel:I mean, it's huge sheets of glass. Straightforwardly, this is hard. But I would say I think a lot of those pre-orders are people who thought they could just cover up the ad screen or defeat it or hack it or whatever. and it's unclear whether as you hit real scale, people are going to agree to have a billboard in your house. Yeah. We'll see. 35 ,000 units, that's the number.

1:26:02David Pierce:You know what I think telly should do is make one of these that is explicitly designed to be like your outdoor deck television. The one that you like, the TV you care about the least in your house should be the telly. And then I would sign up for that. I'm like, I don't want that to be the TV in my living room. But if it's like the TV here in the basement behind my desk that I barely ever watch, but sometimes like, yeah.

1:26:26Nilay Patel:I want you to just take the other side of that equation and be like, I'm going to go to advertisers and be like, here's what we did. We gave everybody a screen that they don't care about by that time. Like, oh, there's a reason they're like, well, you have to be in your main room and be your main TV. Okay.

1:26:40David Pierce:I have a new idea. Tele should only work with sports bars.

1:26:45Nilay Patel:It's actually pretty good.

1:26:46David Pierce:I'm saying that would work. It's actually pretty good. Yeah. Yeah. Did you ever sign up for a telly, even just out of morbid curiosity?

1:26:53Nilay Patel:No, no, no. I have a limited amount of self-respect, and that's about where it goes. Fair enough.

1:27:00David Pierce:All right. So for my next one, weekly Trump phone update. But also this one in particular is a shout out to Don Preston on our team who did some truly fascinating journalism in the service of our silly weekly Trump phone column. he ran down this claim that has been repeated all over the internet that there were 600 ,000 pre-orders for the Trump phone which even if it were true right let's let's say that's true that is not it's not like the most successful phone in history but that that's a big number if if if Trump mobile had managed to sell 600 ,000 Trump phones it would actually mean they got 60 million dollars just in pre-orders and that this is like a meaningful thing that clearly a meaningful number of people want uh so he ran it down trying to figure out where did this number come from and it turns out this number appears to have come from essentially nowhere the trump phone everybody yeah so he found a couple of different social accounts that had posted this number with no sourcing no information more or less just writing a number out of the out of nothing.

1:28:11David Pierce:And then these things get picked up by what I would call relatively specious news publications, news, quote unquote, news publications. Content farms. Yeah, content farms, which then gets picked up by slightly more reputable news publications. And this this number gets sort of laundered up the chain to the point where Governor Gavin Newsom's press office did a threads post of a Grok summary of this number. So if you ask one of these AI chatbots, Grok or the others, they will go find this number, which has been laundered through these different sources, but it's on a bunch of websites. And when it's on a bunch of websites, the AI bots are going to look at it and say, okay, this number has come up over and over.

1:28:55David Pierce:Thus, it is probably reputable and real. And they present it as real in the incredibly confident way that they do. Grok even cited some sources like fortune npr and the guardian um but dom couldn't find any of those things that existed so it's just like it's just a social media post very slowly turns into a bunch of random nonsense on the internet turns into ai summaries of that random nonsense on the internet turns into people who shouldn't be trusting ai summaries of random nonsense on the internet doing so and poof it's legitimate because the governor of california is posting it on his threads account like what an unbelievable story about the internet in 2026 in the guise of 600 ,000 Trump mobile pre-orders.

1:29:40Nilay Patel:That's it, everybody. We're shutting it down. I don't know what else to say about this.

1:29:45David Pierce:It's a real turn-off-the-internet kind of moment.

1:29:47Nilay Patel:It's very bad. You know, this is like an old pattern. We've run a variation of the story about where Flat Earth came from, and Flat Earth as a conspiracy that won't go away is legitimately a product of search algorithms. like you can get a bunch of views for flat earth content so people make it and then people search for flat earth like is the earth flat and then people see that search demand and they make web pages about whether or not the earth is flat and then they're like those web pages rank and like and it's just a circle of clout that makes because if you write a thing that says is the earth flat

1:30:20David Pierce:even if you say no you've now acknowledged the existence of a theory that the earth is flat

1:30:25Nilay Patel:which which just continues the cycle going yeah it's it's truly like that whole thing is just a weird algorithmic clout cycle that resulted in, I believe, Kevin Durant believing the earth is flat. Like, I don't know what to tell you about that. What is Aaron Rodgers? And you're like, the end of an algorithmic clout cycle. Real. Boy, do I have thoughts about professional athletes using the internet. I didn't even realize that I had so many thoughts, but it turns out I do. There's like a million ways this happens over time. And we see a cycle play out. But I think the thing with AI in particular is that it like launders everything into the same amount of authoritativeness.

1:31:04David Pierce:Yeah.

1:31:05Nilay Patel:This was true, by the way, another part of the cycle, which was really weird. Remember Facebook Instant Articles and Google AMP? I was just thinking that. Yeah.

1:31:11David Pierce:When every page looked the same. So you had no idea what came from where.

1:31:14Nilay Patel:Yeah. Yeah. And so even the content farms took on the authoritativeness because all you were really changing in the layout was the logo. And so you would have these Facebook Instagram articles and Google Ant pages where it was like, is this the New York Times or is this the Webosphere Times? It just didn't matter. This is very bad. I will say that there's no chance that they've sold 600 ,000 Trump phones or even taken that many pre-orders. The company refuses to talk to us about this. So we're going to keep reporting on it. We've got some ideas on how to get some leverage in the reporting. We're going to, you'll see.

1:31:48Nilay Patel:You'll see.

1:31:49David Pierce:We'll talk about it next week. It's going to be good. But also, if you have one, I live in Washington, D.C. If one exists, it's probably here. I will come to your house. I will meet you in a parking garage. Like, this is my white whale.

1:32:03Nilay Patel:David, do not meet Don Jr. in a parking garage. Like, what is the fastest way to get arrested for cocaine possession? It's meeting Don Jr. in a parking garage. Don, if you're listening and I know that too hard, get at me. as your as your friend and nominally your boss i insist that you do not meet don jr all right i understand i appreciate that you have a young family

1:32:26Nilay Patel:what's your what's your last one speaking of things that never happened promised by the trump administration uh i have a fox on page for you so mount pleasant wisconsin 5K, 8G. He did.

1:32:36David Pierce:AI, 8K, I don't know.

1:32:38Nilay Patel:It's mostly just the AI.

1:32:43Nilay Patel:So as you know, in Trump 1, Donald Trump used a golden shovel to break ground on what was promised to be a giant LCD factory in my hometown of Mount Pleasant, Wisconsin. Mount Pleasant, Wisconsin is right next to Racine, Wisconsin. When I was growing up, Mount Pleasant wasn't an entity. Now it's bigger, so it's Mount Pleasant, Racine. So I think, whatever. It doesn't matter. This site is five minutes away from the house I grew up in. So, of course, we covered the hell out of it. There was never an LCD factory. Many, many things happened, including Foxon employees screaming at us to leave them alone.

1:33:20David Pierce:Josh Jezza wrote a truly spectacular story. Award-winning feature.

1:33:24Nilay Patel:Award-winning feature on the reality of the Foxon factory. We'll put it in the show notes. It's one of my favorite VRT features ever. Hearts broken, political careers destroyed, the whole thing. But there's a dome. There's a, they did build a dome that they claimed was a data center. The data center is actually located in a shipping container outside the dome. The dome itself is a party facility. Very confusing all the way around. The dome is still there. It's very small, which is actually the funniest thing about the dome. Microsoft bought all the land. Here's this big land where they'd run a bunch of power and water for their fake LCD factory.

1:33:53Nilay Patel:What do you need power and water for? You need them for data centers. So Microsoft bought all the land and they have ever so slowly been expanding their data center ideas in Mount Pleasant, Wisconsin. Most notably because Microsoft president Brad Smith is from Appleton, Wisconsin. So he's investing in his home state. Love Brad for this. Very good. Anyway, they just announced they want to build 15 more data centers on the Foxconn campus. It's going to be like a data center campus and they're trying to get approval for it. And they are promising, and this is why I think it's interesting, that they're going to give back more water than they're using, which seems to violate the water cycle.

1:34:32Nilay Patel:Like, more power to you, Brad. Yeah. And that's how Microsoft is trying to get over the enormous amounts of community opposition to data center that's popping up all over the country, which we've written about. And just in the context of this, you recall, this is a tiny community that really thought Foxconn was going to revitalize southeastern Wisconsin. It was 15 ,000 jobs they were promising? 15 ,000 jobs, an entire network of incubators for startups. They were going to do robot cars, like every idea you could have. None of it came to pass. And now Microsoft is saying, okay, here's what we can do here.

1:35:05Nilay Patel:It's data centers. And the community is pushing back because people hate data centers. So now Microsoft is promising they're going to solve the power problem. They're going to pay for their own power and not raise power rates in the area. And they are making big promises about replenishing the water. Because if you recall, the water for that site comes from the Great Lakes, which people in Wisconsin care about a great deal. this is a lot and it's all because wisconsin basically did not stop for one minute to ask hey is it a good idea to build an lcd factory in racine wisconsin the answer to question to which the answer from the very beginning was no anyway microsoft in my hometown i'll drive by it the next time i go home we'll see if i'll see what they want to do

1:35:46David Pierce:with the dome you feel like this one gets higher odds of being a real thing at some point yes they're

1:35:52Nilay Patel:already building the stuff. Again, they're committed to it. They need the capacity. They need the water. They need the land. I think they're going to get approval. I just don't think it's going to generate a bunch of jobs and revitalize the economy. The economy in that part of Wisconsin right now is basically a bunch of Amazon logistics providers. There's big warehouses all over there, and they're all 3PLs. So it goes. Yeah.

1:36:15David Pierce:Well, it feels like just have Josh move there for the next 12 months.

1:36:19Nilay Patel:I would say that the Foxconn of Trump 2 is the phone for us. Do you know what I mean?

1:36:27David Pierce:There's a sentence that no one who has ever, every new listener of the Vergecast, just that went what and stopped listening. It is a little bit harder. But you understood that you are our people. It is a little bit harder.

1:36:38Nilay Patel:Do you remember the first big story we did on Foxconn Wisconsin is we just sent Josh Jezza around Wisconsin asking anyone if they'd seen Foxconn. And they were like, nope. They're like, who? And then all of the buildings they had bought were empty. And we just ran photos of the empty buildings. And then Foxconn had a press conference to announce they were buying another building. And at that press conference, a Foxconn executive said, the buildings are not empty. And we were like, yeah, they are. Here are the photos of the empty buildings. Like, it was so chaotic. And it's all happening again with the phone.

1:37:13Nilay Patel:I just need to find something that hits as hard as photos of empty buildings. If you know, let me know. We're on the case. I'm sure there are empty buildings involved in this story. I'm just saying. This LLC is in a strip mall somewhere in Kansas, and we're going to go to that strip mall. That's all I'm saying.

1:37:26David Pierce:Yes, 100 % agree. All right, my last one is very quick, and it's that YouTube CEO Neil Mohan published his sort of annual letter. He does this at the beginning of every year, basically laying out a bunch of priorities for YouTube in the year to come. A bunch of different stuff, some small YouTube TV announcements, some things going on, but the one that caught my eye and a lot of people's is that at some point this year, creators are going to be able to make shorts using AI versions of their, and these two words are in quotes because they're very important, their own likeness. So there was not a lot of information, not a lot of new ideas about what this is going to mean, not a lot of specificity when we reach out to YouTube.

1:38:11David Pierce:But this suggests to me that YouTube is so far down the just use AI to make your stuff rabbit hole that actually what they're trying to do is not make you have to be in the video at all. Not that long ago, it was AI backgrounds and we're going to use AI to find the right music for your video and whatever. We've gone in the span of not a long time all the way down to just type in a prompt and it'll make a short for you with your face in it.

1:38:40Nilay Patel:How many videos have I seen of shirtless Donald Trump and Nicolas Maduro doing dances in the Oval Office? It's more than I have wanted to see. They're just doing Sora. Yeah. I mean, this is the final solution to create a burnout. You don't want to make a video today? You want to go on vacation? Let the AI make videos of you for a week while you're gone. Who knows, man? I feel like all these platforms are so nihilistic about AI on their platforms. and AI content flooding their platforms that they're all just giving in. Yeah, oh yeah. There's not a single ounce of thought about, do consumers want this?

1:39:19Nilay Patel:Anywhere in this. It is just, we have weird monopolies. They're already, these algorithms are already flooded with AI slop. We might as well just be a part of it. That's what we talked about with Mysterio on Instagram. Yep. Allison wrote about that this week. I suspect as YouTube rolls this out, it's what we're going to talk about with YouTube and their creators and their AI. And I keep saying that creator economy is going to implode this year because of the pressure being put on all these platforms and all these creators. And this is just the biggest pressure of all. When supply goes infinite because of AI, the rates for the brand deals that keep all these creators in their homes will drop.

1:39:56Nilay Patel:And then you have no other game to play except being one of one, being Mr. Beast. That's a game you can play. Very hard. or just infinite content, which means you're going to turn to AI likenesses of yourself. Right. And either YouTube and everybody else

1:40:13David Pierce:fundamentally misunderstands what their creators want or they just absolutely don't care and think that it doesn't matter what they want because the toothpaste is out of the tube and AI is going to win anyway. So we might as well embrace it.

1:40:28Nilay Patel:Yeah. I mean, there's another version of this where YouTube says, hey, we value the authentic creator. we will unrank or de-rank or de-prioritize AI content and make sure that the stuff that our actual creators are making is good and people can find it if they want it. And instead they're saying, nope, we're going to let the creators make AI content. And there's something, I think it's pure nihilism. I think they can't figure it out and they don't want to. Also, if you're YouTube, you can't say AI is bad because you work at Google. So what are you going to do? Man, I don't know. I have a lot of sympathy for creators in this year to come because I think the pressure on output is going to go through the roof as all of these platforms are just flooded with AI slot.

1:41:15Nilay Patel:Yeah.

1:41:15David Pierce:Yeah. I mean, back to what we were talking about at the beginning, right? The way to win is just to do a lot of stuff as fast and loudly as you can. Yeah. You're not going to beat the AI models at loud and fast. You're just not.

1:41:28Nilay Patel:Every second I watch an AI cat doing that electro breakers dance, you know what I'm talking about. Don't worry. This one I actually know. Every second you spend watching that is a second you're not watching a real person. Yep. And that's how these platforms work, right? There's only a limited amount of time. They're all just monetizing attention. Every second you watch that AI slop is a second you're not watching a real person. I know creators want. They say it to us. We are friends with a lot of creators. They want to make the content that they are passionate about and find a real audience that cares about them.

1:41:59Nilay Patel:and you listen to how some of them talk about their content strategies, and they're like, I make the one thing for the brand, I make the one thing for the algorithm, and then I try to make one thing for myself a month. And you're like, that sucks. Like, that already feels painful to me. Again, I'm saying this out of sympathy. Like, these are people I care about. That already feels painful to me. And then you add you need to make infinite content to compete against the dancing kitty cats. I don't know, man. Like, I hope these platforms come to their senses. I hope the creators push on these platforms in serious ways to, to strategy shift.

1:42:34Nilay Patel:We're certainly going to do reporting on it, but I, man, again, it's, it's nothing but sympathy. I know a lot of people think I'm, I'm doom and gloom and I dislike creators. Like I promise you, this is coming from, I know a lot of these people who work really hard and they are trying really hard to build real businesses and they're just buffeted by other people's ideas that they have to respond to because of the algorithms. Yep. Anyway, you should own your own audience. That's the end of That's the main thing I have to say. True.

1:42:58David Pierce:I can promise everybody one thing, which is that you and I will not be replaced by AI because what would we do all day then? Do you know what I mean?

1:43:05Nilay Patel:I would send angry letters to Brandon Carr. All right.

1:43:09David Pierce:So this podcast is going to be me and AI Neelai at some point in the very near future. But until then, we should get out of here. Neelai, this has been a delight. We're going to do one of these live in Wisconsin.

1:43:23Nilay Patel:Oh, that would rule, actually. This is what I'm saying.

1:43:25David Pierce:also I don't know if people have told you about the top gear in China thing that Andy and I have been cooking up where the three of us are going to go to China and go on EV adventures together we floated this on the show this week the feedback has been incredible I think this may have gotten away from us already

1:43:44Nilay Patel:the like you can't pay us to say what you want is going to come into real conflict with Chinese EV companies allow us access to their facilities and cars what could possibly go wrong

1:43:53David Pierce:that's it for the first cast remember as always if you subscribe to The Verge you can get this podcast and all of our podcasts we talked last week about the decoder you were going to do explaining the whole Grok scandal that's out now it's a really good episode go listen to it and you can listen to it and all of our other shows ad free if you subscribe to The Verge it's a very good website we're doing our best over here theverge.com slash subscribe reach out we want to hear from you about anything and everything vergecast at theverge.com is our email the hotline is 866-VERGE-11 this show is a production of The Verge and the Vox Media Podcast Network.

1:44:25David Pierce:Today's show is produced by Eric Gomez, Brandon Kiefer, and Travis Larchuk. We will see you next week. Nilay, rock and roll.