The government's plan to break up Google

26:41I mean, this is, I just keep coming back to Satya Nadella, the Microsoft CEO sitting in the courtroom, basically explaining why Bing is worse than Google and why it's completely insurmountable. And everything in this filing makes me think that that is sitting in the heads of both Judge Mehta and the DOJ in particular. And they're like, what we are going to do is just give that flywheel to anyone who wants it. And like, and just there it'll be. And if that works, you'd get a million interesting search engines really fast, I think. It would decimate Google. The Google comms person outside your house, David, I can see them in the window back there.

27:15They're holding up a sign that said, or Microsoft could have made Windows good. There's also that. There is also that. These arguments are hard. They are hard. And Microsoft has mostly failed at competing with Google on search. and even Microsoft's AI work has not really meaningfully moved the needle. So I do see the argument that you got to break this wide open. Otherwise, you're going to end up in the same kind of Apple, Google duopoly that kind of defined the last era of computing into whatever this next era is. Yeah. The other argument is that AI comes to nothing and this is all garbage. And that Google is better at this because it's better at this, not because it's somehow structurally impossible to compute.

27:59Right. I think, I mean, two things. One is that I think it would result in a world where you're competing more on the product and the wrapping and the extra bells and whistles around search if everyone has access to the same kind of underlying data. And the second thing is that, you know, most of these remedies, the behavioral remedies, the things about licensing and that kind of thing would be enforced for 10 years. So it's not forever, but it's long enough that the DOJ feels that, you know, it would be able to create some sort of dynamic shift in the market. Yeah. See, I look at 10 years and I'm like, 10 years is an eternity.

28:36Yeah. Like 10 years is is. And what was it after five years? If Google's market share was less than 50 percent of search, they could petition to have this stuff called like that. That's what we're asking for here. Right. Like Google, which has been somewhere between like 85 and 95 percent of search for forever. They're like, no, no, no. We would like you to be less than 50 and we will consider this to be a competitive market again. So I want to talk about the politics of that timeline specifically. But first, I just want to play a quick game. It's called Who Can Buy Chrome? Does anyone? Apple.

29:09Would anyone like to buzz in? Amazon. Amazon. But wouldn't the DOJ not like it if Amazon or Meta or Microsoft or Apple bought Chrome? Like, didn't we just recreate the problem? Yeah. Yeah. I mean, I think it's possible that they say, you know what, these are, you know, different business lines and it's not. You don't think Amazon's Silk browser is a competitor to Chrome? Yeah, I mean, that's the problem they're going to run into here. And I think that that is an issue for that remedy. And I think on top of that, it's like, OK, well, what if this other theoretical big tech company that buys Chrome then decides that they want to make a search engine?

29:48And then are we back in the same place just like under a different company name? Yeah, I mean, the number being thrown around is what,$20 billion? The number of companies that could spend that on a web browser with, like you said earlier, Neelai, no inherent business model. Like it's so important to underline the fact that a web browser on its own is not a business. There is just no evidence that you can build a web browser that will be a business at any scale on its own. We had poor Josh from Arc and the browser company on Decoder, and they just pivoted away from making a web browser. It's very obvious.

30:19You just can't do it. You certainly can't do it to make a$20 billion acquisition make any sense. By the way,$20 billion is low. That's the number that Google is paying Apple just to be the default in search. That's the yearly number. Yeah. I saw somebody say, just take over Chrome, get the same deals because you'll be allowed to. And it's the greatest private equity arbitrage opportunity in history. Oh, yeah. This is you should buy Chick-fil-A and open it on Sundays. You don't have to do anything. It's very easy. Yeah. But Google won't be allowed to make those deals. So you're already, you're just like operating very much behind.

30:54Right. I think Chrome, the more we talk about it, just even in the past half an hour here, it feels like Chrome is a sideshow. We're going to train all of our attention and argue about whether or not you should sell Chrome or who you can sell it to. And the DOJ will give it up so that Google can't make these deals and that Google has to be this like weird kind of utility that anybody can do. Like that feels like part of the negotiation here. Maybe I'm wrong. I have no insight. It's just as we talk about it, it just seems so – it feels like it accomplishes so little in the end versus actually opening up the search engine.

31:28I think this is a weird case where, you know, generally structural remedies or breakups are thought to be like cleaner and easier. And, you know, the court can just say, all right, let's like sever this and then we're done. We can wipe our hands of it. But it's complicated in this case because who's going to buy Chrome and, you know, how does that look? You know, there's a lot of questions there, whereas the behavioral remedies are often thought of as, all right, this requires more oversight by the court. This is like a little bit harder to execute. But in this case, it does seem to get at the heart of what the DOJ had argued in the case was the problem and was the reason that other search engines couldn't catch up.

32:10And so I think we might – I could see the logic of, you know, why they might tend toward a more behavioral remedy here. Yeah, I mean, it's like negotiation 101, right? To go in with something like this that you know you're willing to give up. Yeah, sooner or later, you will be the CEO of just Google Duo. Right. What do you want to give me in return? Right. Yeah, you got to have the one thing that you're willing to part with just in the name of seeming like you're arguing. I will be the CEO of Google Docs. Just give me Google. I have a number of ideas already from the jump. They already did taps.

32:45Google Docs is perfect. Don't touch Google Docs. I wonder if they would make it so that they do something similar, like they're proposing with Android, where it's like, all right, fine, we don't have to spin out Chrome, but, you know, we'll hang it over your head in case you don't comply with everything else. That's what I feel like. You have to sell Chrome as such a big, shiny distraction from all of this other stuff. Right. The marginal cost access to the Google search index is also a dagger to that company's business. Yeah. But those are the things like like you're saying, Lauren, that actually get to the trial that we had last year.

33:19Like, yes, the Chrome thing, I think, came out of left field for a lot of people because it just doesn't address the stuff that they spent months in court arguing about. It is you can sort of get there from Chrome, but all of these arguments were about like the structural system that makes the underlying infrastructure of Google search unstoppable. And all the rest of the stuff in the filing is like poking at how to peel that apart. And then there's Chrome. Yeah, I think I mean, another aspect of the trial was like, where are you able to access search? And Chrome and web browsers generally are one of the big access points.

33:59You either access search through your browser or your phone, basically. So I think the thing with Chrome is that it's the one entity and Android. They're the one entity that Google actually owns. Like the court can't impose a remedy on another company. It can't impose a remedy on Apple or Samsung. I'm sorry, that's not true. But Patel. but it can impose a remedy on google to say all right at least for this one browser that you own you can't use it in a self-preferencing way yeah so i do want to talk about the politics of this i think that's a good segue so we've been comparing this case and the apple case to the microsoft case in the 90s for some time since they started basically and it strikes me even the timeline here and the politics of the timeline are the same.

34:51So Microsoft case in the nineties started in 1998 under Bill Clinton, the DOJ one, they pursued a breakup. George Bush gets elected and the DOJ says, ah, nevermind, we're going to settle the case. And there's some like winding back and forth in there, but there was a moment when Microsoft was going to get broken up. And then there was a moment when the DOJ said, nah, we're done with that. We're going to do these big consent decrees and you're fine. And all of that was chaos, right? And the executives at Microsoft who were there at that time will tell you it was super distracting. And Bill Gates is like, this is why I didn't invent a cell phone, which is, you just tell yourself that, Bill.

35:27Right, like you did the Zune. I'm sorry. But that distraction from the giant created the opportunity for Google to exist. In many ways, it created the opportunity for Apple to make its big comeback because it's not like Mac OS 9 software was selling the iMac. Web browsers were selling the iMac. So all of this distraction about Microsoft and bundling Internet Explorer and all this stuff in the 90s, whether it came to anything, it just created the opportunity for other players to enter because Microsoft was constrained by whatever. Here we have a very similar situation. This case actually started in the Trump administration.

36:04It got one in the Biden administration under this DOJ. Now we're going to head into a remedies phase with a new president, a much more transactional president who will pay direct attention to the CEO of this company, who has already said he's talking to the CEO of this company, with Elon Musk on the call that was reported this week, and who knows who the attorney general will be. Let's just start with the basics. Is Jonathan Cantor still going to be the assistant attorney general of antitrust when this case goes to the remedies phase? That would seem highly unlikely. You know, even when I think administrations are aligned on certain policies, you know, they often just want to bring in their own people.

36:41So I think, you know, we're likely to see a different antitrust chief at the DOJ under Trump. But I think it is a big open question of what way that person will lean. Are they going to be a more populist, neo-Brandeisian antitrust person who actually does want to pursue really strong remedies against Google? Or are they going to be more of the, you know, establishment conservative type that wants to kind of do as light a touch a thing as they can. So I think we still don't really know what that's going to be. I mean, we don't even know who the AG nominee is going to be after Matt Gaetz dropped out.

37:24So I think there are a lot of big questions about that. But I do think it's important that it was brought under the first Trump administration. So I don't think we're going to see it completely wither away. But I could see for sure that maybe the next DOJ doesn't want to go as far as this DOJ has put out there. Do you think there's an engagement here, which is actually what we should sell Google into as many component parts as we think that's our proposal so that the next DOJ shows up and even the walk or like pre-negotiating against the next administration? Perhaps. I mean, I think any administration that walks back some of these, they're going to have to deal with what that looks like to the public.

38:06You know, I'm sure they would say that's not really a factor for them. But I think for anyone who works in politics, it is to an extent they're going to have to say, all right, well, we did pull our punches here and explain that. So I think it's harder to take something away than to add something back in. And, you know, I could see that potentially being a consideration here. The other piece, and I'm just curious to read on this. We obviously don't know who the attorney general will be. And Matt Gaetz had so many problems that he just withdrew. Like he literally went to Capitol Hill for 20 minutes.

38:40He met with senators and was like, I'm out, you guys. And so that is whatever it is. And that's not the kind of politics we ever really talk on the show. But he was kind of an antitrust guy. Like he was into it, maybe in a bad faith way. Like, I just want to punish big companies, which is seems to animate a lot of Trumpist antitrust. But he was still like, that's pretty cool. J.D. Vance. We've watched video of him saying Google is a problem and Lena Khan is doing a good job. We Josh Hawley. Right. Like there is a strain of antitrust thinking in the modern Republican Party that says, yeah, we probably should break up Google.

39:20Elon Musk. I mean, he says everything. you can you can find a tweet of anything at this point but he is he's said google is a problem mark andreason and ben horowitz benefactors the trump campaign and now benefactors the administration they're they think google is a problem like openly openly said it what how does that tie up with actually want the government out of messing with big american companies because it there's there's a ideological inconsistency there i have no idea how that resolves. Well, I think the staying out of American companies comes more from the establishment arm of the Republican Party.

39:56And I think Trump, you know, I think he can kind of talk that part of it when it is beneficial to him or, you know, in areas that make sense for him. But I think, you know, when it comes to big tech, he has often wanted to speak out on them and, you know, has an elevated antitrust enforcers in his previous administration who did go after both Google and Meta. So I think there's always been that strain within Trump and, you know, Trump's previous administration. So I think, you know, it is definitely notable that he continues to surround himself with people who do believe in this kind of more progressive view of antitrust.

40:39But at the same time, I would caveat that like with Trump, we never really know, you know, what's going to happen. You know, is he going to change his mind the next day and who's really got his ear? So I think it's hard to pull any policy from any one of those people. But I think just seeing that there are so many of them that he's surrounding himself by and, you know, the animosity that he has had toward certain tech companies and tech executives. I think it's not hard to imagine that there would be some incentive to continue these fights against the tech companies. I would also just point out that the unifying theme of a lot of these antitrust fights is against companies that have they have decided have wronged them in some way on the Internet.

41:25Like, I think it's less about like a broad moral belief about antitrust and more about big companies that say bad things about me in search results. Yeah, there's no, I want to be very clear, there's no rationalizing these decisions. I'm just pointing out it's a bunch of people who are mad. Yes. And they act in ways that accomplish retribution. And Trump in particular has said, they got to treat me better or I will break them up. Right. And right or wrong, like however you want to feel about it, they have been mad at Google in particular long enough that I think it stands to reason that they are going to continue to be mad at Google.

41:57Right. And Anderson Horowitz can probably find a way to buy Chrome. Elon Musk. Or fund a bunch of competitors that are going to have a really easy time building ad-funded search engines now, right? Like that suddenly, suddenly you take the best market in the history of the internet and you break it into a thousand pieces and make it available for anyone to come into like that. You've just made every VCs year, right? Like they, we've heard this for years. It came up at the trial that VCs won't fund search companies because it is, it's a, It's a dead area. It's not even worth trying to compete with Google.

42:29And instead, what you're doing is you're saying, here's a hundred billion dollar a year industry that is suddenly completely up for grabs. And you don't even have to try that hard to be competitive. Like, yeah, yeah, I'd be into that if I were a VC. I will point out that the first Trump administration's antitrust efforts ended with one T-Mobile buying sprint in a negotiated deal that created Project China 5SIS, America's fourth wireless carrier, which to this day, I think, strikes terror in the heart of everyday Americans. Who the fuck knows what's going on over there? That's one. And then the other one, they fought against AT &T buying Time Warner because Trump hated CNN so much.

43:11That's it. That was the entire intellectual justification for opposing that merger. They lost, which is fine. And that resulted in a 4-3 grayscale Justice League directed by Zack Snyder. Those are the two outcomes of the previous Trump administration's antitrust efforts. That's good. We've now hit the bingo card for the first cast talks about antitrust. I'm just pointing out. You're like, how will Trump deal with Chrome? And you're like, well, the evidence suggests they will force them to hire Zack Snyder to make grayscale square YouTube videos and start Boost Mobile. Like, I don't know what to make of all that.

43:44But you could actually out of the pieces of Google, you could probably do that. Google Fi is now Boost Mobile. Yeah, I was going to say. That's my prediction. The last thing I want to ask you about, Lauren, real quickly. This case, the Google case, is done. Right. They were found guilty of having a monopoly. And now we're in the remedies phase. The other case, it's wrapping up. Right. It's going to come to a conclusion. The judge is going to decide the judge, not a political actor in the way that some other folks are political actors or at least not supposed to be. That will come to a conclusion.

44:13Apple's case is still pending. Right. It hasn't gone to trial. No one's been ruled anything where Apple asked for a dismissal today. They said, make this go away. Apple has a lot to want from an incoming Trump administration. Just straightforwardly, Apple makes a lot of stuff in China, and Trump wants to impose tariffs on goods made in China. So you can see Tim Cook has to horse trade his way out of that. He did an excellent job of that last time. Like maybe Tim Cook's singular achievement as CEO is navigating Donald Trump to excuse Apple products from tariffs. You can make the argument. I'm not saying it's good or bad.

44:48I'm not outside of the morality of it. he did a good job of it. He excused Apple from a lot of noise by managing one man very directly. Do you think that he's going to be able to manage his way out of this antitrust lawsuit? Because the incoming attorney general could just drop it. That's true. Yeah. I think, you know, when it's coming from the DOJ, it really is up to the DOJ if they want to continue the case and what direction they want it to go. They certainly could withdraw it. But I think that's hard. It's already, you know, in this kind of pretrial phase, they were just arguing a motion to dismiss.

45:30And, you know, now that's going to be up to the judge to decide whether any part of the case can move forward. And I guess it's theoretically possible that the judge dismisses the case. I think often in these really big cases, we might see them narrowed but not fully dismissed. So yeah, then it's on the DOJ to decide what they do. And I think Apple is in much more of a friendly position with Trump in a sense, just based on the past administration when Tim Cook managed to really kind of walk this really precarious line in, you know, just being on Trump's good side. So I think if any company could do it, perhaps it's Apple.

46:15But, you know, that would obviously be a big deal if DOJ just dropped the case entirely. I think that would be somewhat unusual. And the DOJ is supposed to be independent of the presidency. And I don't think Donald Trump wants a DOJ that's independent of his presidency, right? Like, I don't want to be this. What we're talking about is corruption, like sort of straightforwardly corruption. Can Tim Cook call Donald Trump and say, drop my antitrust case, like in a normal administration that would end there. Like lawyers would come screaming into the White House. They would burst into the Oval Office and be like, Mr.

46:49President, you can't do that. And that is not going to happen this time. Like, very clearly, he does not want that to happen. He does not want that constraint on his behavior. The question is, what happens next, right? And honestly, what's a simple trade away? Like, do you care more about tariffs or do you care more about your antitrust lawsuit? dude. Yeah. There's still a North Carolina factory that either does or doesn't exist and either will or won't exist that Tim can always throw into this. Yeah. Last time he held a fake factory opening in Texas, which was very good. Look at this Mac Pro we've been making this whole time.

47:22It's a lot. That one, I think, is just up for grabs in a way that the Google ones are they're up for grabs in a different way. Like I said, the Microsoft case is sort of illustrative here, right? Like there was a change in administrations and then the posture of the government changed and we ended up with consent decrees instead of breakups. Who knows what's going to happen? But it does seem like Tim Cook, at the very least, cannot retire in the next four years. Yeah, I think Apple shareholders will definitely want him to hang on there. Oh, we're going to open so many fake factories. I'll take your, by the way, if you want to send me an email and tell me what the next Foxconn is going to be, I'm curious because we have to, we're going to end up with one.

48:01It's definitely going to happen. All right, we got to take a break. we're already over. It's segment one. We're already over. Lauren, thank you so much. Thanks for having me. We'll be right back. Let's be honest. Are you happy with your job? Like really happy? The unfortunate fact is that a huge number of people can't say yes to that. Far too many of us are stuck in a job we've outgrown or one we never wanted in the first place. But still, we stick it out and we give reasons like what if the next move is even worse? I've already put years into this place. And maybe the most common one, isn't everyone kind of miserable at work?

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51:55All right, we're back. Get ready for another 45 minutes of talking about the Trump administration. I honestly just want to see if in our stats, we can see people stop listening to the podcast whenever I say his name. We sure can in our emails. I'll tell you that. No, we're going to do gadgets. It's all the politics are out of our system. We're going to do gadgets. Well, there's going to be a little politics later, but for now, we're going to do gadgets. Everything is politics. Just like Alexa calling an Uber. Only the Uber has a giant American flag mounted to the back of it now by law. So there's like a bunch of...

52:29That would be great. You know, it came home from JFK yesterday and Uber has a bunch of choices at the airport. Like, do you want Uber Comfort? Do you want business comfort? Do you want Uber Electric or whatever? If I could pick giant American flag truck... Uber Patriot. I would die. uber raptor like i would take it i'm just saying you know me i would take it all right uh lots of ai stuff lots of gadget stuff just a big mix of companies trying to figure out what on earth is going on i would say yeah what do we do now is like a real question facing the tech industry at this moment so let's start with amazon and just bundle these up so there's a lot of rumors about what's going to happen with the next version of Alexa.

53:14There was some reporting earlier this week that Amazon really wants to roll it out, but it's still too slow. Yep. It's tough. The vibes coming out of Amazon about what Alexa is and might be when it comes out next just keep getting worse. And it was supposed to launch in October. It's now the end of November. And I would say there is no sign of it yet. And it's one of those things, like you kind of get to the point where once these things have been leaked in the way that they have several different times in several different ways, it starts to become clear, this is people who think this is a problem and want to talk about it, right?

53:55It was like, there is so much smoke now that it's like there's something really problematic happening here. And then there's smoke on the other side, which is they've all been leaked in the other way, in big hype-y ways to juice stock prices and make everyone think that, you know, they're not going to get lapped by opening AI. Like, digital Jesus will turn on your lights soon. We promise. Yeah. It's like a thing that all these companies are saying. And then the reality of building those products is still very challenging. So here you have Amazon, which I think suffered the most from the first wave of like chatbots.

54:33Like, why wasn't Alexa doing this already? Totally. Right? You didn't even have an iPhone services business to distract you the way that Apple got distracted from Siri. You didn't have some cash cow. You just had a link. This was your bet. You wanted Alexa to be Windows. The interface is voice. This is the platform shift is we can talk to computers. They can talk to us. What are you doing? And the answer is, don't worry. We got it. And it seems like, yeah, they wanted to do agency stuff. They wanted to call an Uber for you. They wanted to go buy concert tickets. Probably in the same way that everybody's talking about, right?

55:05which is like click around on some websites in the backend and AWS, but it's still too slow. Yeah, it's been really interesting to me thinking about the difference between the way that Google reacted to ChatGPT and the way that Amazon reacted to ChatGPT. Because what Google started saying almost immediately was basically we built all this technology. Like these things you think you did, we invented. And we've been doing it for a long time. And what Google had was a lot of very good technology that it hadn't built into anything. And so Google all of a sudden raced to basically productize this stuff it had been working on internally for a very long time.

55:43And I think the speed with which Gemini has become like ubiquitous inside of Google and also pretty good suggests that most of what Google was saying was true, right? Like it had the tech and it changed the company a lot to productize it, but like it had it. Amazon was the opposite, right? Like Amazon had the thing you would think would be the product, right? Like ChatGPT is coming up being like, Like we've made voice mode and Alexa is just voice mode and we've had it for 10 years. And what Amazon had to do was basically say, no, no, no, we can build these underlying capabilities to the point where it soft launched this thing over a year ago in the middle of a bunch of like weird personnel changes where Dave Limp was leaving to go run Blue Origin.

56:26Panos Panay was leaving Microsoft to come in and run all this stuff. But like they launched this thing already a year ago. They told us what it was going to be and made these grand promises about how it was coming soon. And it is it has become abundantly clear over that last 12 months that building the technology is the hard part. And and Amazon just doesn't seem to be able to do it. But do you think it's the technology or do you think it's the product? I think the product. You could cheat, right? You could just go pay open AI to use whatever and you still have to turn on the lights. And there's some reporting and evidence that that is a thing Amazon is either doing or has pretty aggressively considered doing is just paying for that.

57:06And you're right that then attaching all that stuff to the things that Alexa can already do is a challenge, right? Like no matter what, you can't just like write a check to open AI and suddenly Alexa is way better. It's a lot of work. oh i think sam altman really wants everyone to believe that you can just write a check to yeah i think i think sam altman would love for you to believe that and dario at anthropic is like no we'll do it for a smaller check but like you can't do that uh but it is also if you want to be amazon and you want to do this at the scale that they're going to you at some point have to build it yourself and there are a lot of little tentacles to doing that well but the first thing is just like what if alexa was just a little better like you don't you don't have to fix it all at once just just do the thing that like apple has been doing with siri for forever where it just like quietly gets a tiny bit better all the time no i i i reject this comparison what are you talking about that is not true that's fair that's a bad comparison yesterday i asked siri to call my wife and i was like no like it did the new animation and everything you know like the the glow the screen yeah it's like beautiful and i was like call back and it was just like i don't i'm you I'm off the clock, man.

58:14Like, it's not better. I tried to set a reminder this morning. I put my coffee mug on the roof of my car and then forgot it, so it fell off and exploded. And so I'm driving, and I go on CarPlay, and I'm like, hey, remind me in an hour to buy a new Yeti. That was what I said, because it's a Yeti mug. I love the thing. It's great. What it said was, in an hour, buy any popular was the name of the reminder. Very good. So you're right. I take back the Siri comparison. But at any rate, if Amazon wants to do this, it has some of the hardest things already out there, right? It has hundreds of millions of devices that support this thing.

58:52It has a big ecosystem of devices that work on its devices. Like you just have to build the underlying part. And that is an easy thing to think is the easy part. And it is very clearly not the easy part. Yeah. And I think with Apple, you can see it's also not the easy part. Totally. And Apple just decided to punt it to chat GPT in a very real way. And even that is not it. Like the part where you talk to the phone and it goes and does stuff for you. That's not chat GPT. No. I actually think that can you make the existing voice assistant incrementally better with AI is not possible. Like I think the way that Alexa and Siri and Google Assistant are currently architected is they're dead ends.

59:35like it's it feels very clear that these are dead ends and everyone is struggling to rebuild the general purpose llm into a thing that can do that the same stuff that siri can do and then make it more capable and you're they're just stuck like i don't i don't think you can be like it's alexa the same alexa you know and love but sometimes it's a thousand times smarter like i don't i don't think that that is like working and so yeah we'll see i mean i you know my sense is that they brought in panos to make this go because they needed strong leadership to make calls and yep he's as strong of a product leader as you can get so we'll see how it goes but the basic problem of on the one hand you have sam altman and dario out there being like we can build agi on current hardware which is a real thing these people have said uh and then on the other hand you've got amazon being like well it's it's turning it's turning out to be very difficult to switch on a light switch with these tools it's like we're just like all over the place yeah well this is why there was the the one bit of amazon news that i thought was super interesting this week was uh i believe it was business insider that had a story that uh amazon is instead of trying to do all of this stuff itself and do the like agentic ai that can go use websites on your behalf it's just making deals with partners to do this stuff which is like a thing you and i've been talking about for forever, right?

1:00:59Like APIs over AIs is like a thing I keep saying to people that like, why can't you just make the Uber app do it for you? Because you don't have to go fake the Uber app, just let Uber do it. And that appears to be the way that Amazon is going, which I think, A, you can read as a total referendum on how good Amazon's own AI stuff is. But also like, they're making deals with Uber so that when you say, get me a ride, it'll just call you an Uber. and DoorDash for food deliveries and Ticketmaster for buying tickets to things. And these are ideas that raise other complicated questions. Like, should it tell me that it's DoorDash doing it so that I understand the transparency of this process and the fees and who all this stuff's going to and who has my information?

1:01:44All that stuff is really complicated UI. But DoorDash is going to do it better than Amazon hacking DoorDash. You know what I mean? So I think that is actually a good sign to me that there is a version of Alexa that is going to be better at this stuff in a more integrated way, that Amazon has stopped saying, we're going to solve all of this problem with fake rabbit style AI where we're just going to go use websites for you. We're just going to be partners with the people who know how to do this. And I think that is going to be the right approach for a pretty long time. Yeah. I mean, Amazon has the money to do it.

1:02:19I mean, you know, Jesse from Rabbit is like, I don't have the money to do it, so I've got to do some clicking around. We'll see. I just, again, we can achieve AGI and current hardware, but Apple and Amazon can't quite deploy this stuff at scale in a way that makes sense and doesn't break light switches. Just something to consider. Speaking of light switches, one other bit of Amazon news, which is fascinating. They announced new Echo shows this week. Chen has the write-up. Echo show 15 and 21, which is basically just a TV. Like just a 21-inch Echo show in your kitchen. they show it in their own press photos running the fire tv interface like it's a tv with on a stand with a remote like it's just a television it's just a tv pretty good people like having tvs uh in their kitchens in particular great uh they're doing some adaptive light stuff i don't think amazon's photo stuff is very good but they're obviously making a run put photos in here and make them look good do you have a kitchen tv like do you have a do you have a dedicated screen for watching stuff in the kitchen no we we have a nest hub that shows photos um that often just mis-responds to google queries we use it for setting timers um and because it is a google device you can run youtube tv on it right but it's it's small and then our you know it's like our house the first floor of our house is gigantic so you can just see the big tv in the kitchen you can just like look across the house to that tv and to whatever extent we are watching tv that is the solution um but i we're just not like tv people in that way that's fair uh and also becky's just constantly listening to podcasts on her phone built-in speakers on her phone like that's the real tv in our house understood uh what's fascinating about these two echo shows aside from the fact that they're enormous and cheap although a 21 inch screen with 10 ap resolution for 299 that's like some david pierce stats right there literally that is more expensive than my 4k tcl p series that is 50 inches right behind me yeah no that thing looks great i'm sure no banding in the colors uh it's great 2.99 for the 15 all that's all that aside the screens aside uh they've got built-in cameras for video calling they're proud of the cameras and then they have built-in wi-fi thread and Zigbee radios for smart home stuff.

1:04:36And so you just see, okay, the idea is we're going to put a little computer in your house, a little server. It's going to connect everything for you. You're not going to have a bunch of little hubs like your Hue hub or your smart things hub or whatever. It's all going to be built into this device. And then you'll have this device. And this will be the locus of smart home control. Also the thing you talk to and also your TV. It's pretty interesting. Whether any of that actually works or whether matter plays out the way it's supposed to play out. So you can buy a bunch of stuff and still control it from your iPhone and also have this home hub, but who knows?

1:05:04But at least we're making confident steps towards you just buy this thing. Everything connects to this thing, and then it is expressed out to your phones and your voice assistants or whatever. It's still messy, but you can see the idea. I do think it's the right infrastructure. I mean, you pit this against what we've heard about Apple's stuff, which is very much like buy a little controller for every room kind of thing. And I think you're right that having sort of the one big screen you can yell at from almost anywhere and then your phone is actually a much closer answer to the right one. And I also think like Jen talks about this all the time.

1:05:43Having a screen with big ass buttons on it goes a really long way towards making your smart house usable by actual humans. It sort of does. I just want to, I will offer, I will offer this one piece of evidence, which is both a huge victory and a gigantic failure. There are so many ways to turn lights on and off in this house. Infinite ways. You can just speak to the heavens and lights will turn on. You can just wish for lights to turn on. Just yell darkness and things happen. Like it will happen. And so in our kitchen, which is pretty dark, I have hue lights in adaptive mode. So they just turn on in the morning and they're in daylight.

1:06:20light and then as the day goes on they get warmer and warmer and warmer and at the end of the day they were warm and yesterday they were out of sync and i was in california so i get a text from becky which is a huge victory a huge victory she said i hate you the lights are the wrong color because when i put them in she's like who gives a shit about this right right now she knows this is uh of a of a piece with i hate you i can see the motion smoothing on my parents tv i hate you the lights are the wrong color yep you did it huge victory i was like i'm done welcome to my particular circle of hell marriage over mission accomplished i got another one on to the next and then she's like how do i fix it i was like just there's like 50 different ways to fix this problem so you can open your phone there's scenes and home on your phone but it occurred to me that one there's a button on one of our lutron light switches you can just push to fix it and she didn't she was like i don't care about that like i don't want to do that i don't want to figure out what that is because it's like it's just an unlabeled little round button and she didn't she was like i don't care and then i was like well you can go to the nest hub and you can you can just like yell at it she's like i she literally said voice commands are so inefficient um and i said one day sometime the next 50 years that we are married and live in this house together i wouldn't you were going to say movie time out loud just once that's anywhere and it got all the way to there is an old iphone mounted on one of those new standby mode stands that just shows the buttons it is next to the home the nest hub they're physically next to each other but because the nest hub doesn't see the home kit scenes i needed an old iphone on a stand and it says kitchen day time lighting and she went and pushed that button and i was like this is just a gigantic failure there's so many ways to accomplish this and she just didn't do it yeah a matter will fix it sure sure but b you just described the exact problem with everyone's smart home which is that what you end up doing is you're like oh i've built a million ways to do everything it's totally redundant it totally works and it's like no no the actual thing she wanted from you is tell me to walk up to the big screen, slide the thingy that's the colors, and I'm done.

1:08:38That's a better answer. Which is more or less effective what happened, right? She walked up to the phone on the stand, it said kitchen daytime, and she just pushed it. Fine. But it's next. It was next to the Nest Hub, which cannot do that because it doesn't support the HomeKit scenes. Right. Which is not good. Therein lies the actual trust of the problem. But she could also, she could have just said movie time to her phone. Not movie time. She could have said kitchen. She will never say movie time. We sit down and watch a movie. I'm like, are you going to say it? And she's like, I'm never saying this.

1:09:07And I'm just imagining you doing it like hammer time. Just like, stop. Movie time. It doesn't even do much. Everybody else leaves and you watch the movie alone. It just turns off lights in one room. But it's such a funny thing to say. Like other people have it where like the shades come down, the projector turns on. The popcorn starts. Yeah. Like all this stuff happens. Mine is just like lights off in one room, but it's still the funniest thing you can say. It's pretty good. It's pretty good. All right. We'll see. We'll see if matter can fix it. I think is the end of that. That. Yeah, Matter 1.5.

1:09:38I hear that's the one. It's funny how AI and Matter and Bluetooth are all the same, on the same cadence. Like, we're going to get there. We're going to build Digital God and it's going to turn off the lights, you guys. I'd take it, honestly. If that's the one thing Digital God can do, I'm ready for it. Let's move on to Sonos because it's of a piece with all this. So there have been rumors that Sonos is going to make like a TV streamer for a long time. This is the next logical thing for them to make. a huge part of their business is soundbars and home theater systems and lately improving their app set that aside um so it's very logical they're going to do this many many questions about how sonos could build a tv streamer like you need an operating system you need app support you know all that stuff so bloomberg reported a price it'll hit somewhere between 150 and 200 and then chris Welch put together some evidence based on some previous reporting by Yanko Ruckers, who's an excellent reporter, that this operating system will be called Ventura and be made by a company called the Trade Desk.

1:10:44This is very confusing. Do you know what's going on here? It is bonkers. So, okay. So the Trade Desk is an advertising company. Like it's more complicated than that, but it's also not more complicated than that. Like they are an advertising company and they just launched this thing. The thing that Yonko reported a while ago was that the trade desk was building a smart TV operating system. And he got a bunch of pushback, including from people who just straightforwardly like, no, we're not. Yes, they were. And they launched it officially and it's called Ventura. The trade desk wouldn't tell us anything about it.

1:11:15They wouldn't share images. They wouldn't share videos. But it is apparently a thing. And it is so abundantly clear that what they are doing is offering a place on which you can show ads and run Netflix. That seems to be the whole vibe of the thing. And they had a bunch of information, you know, from partners and it was like the heads of advertising at various streaming services being like sick ads. We love ads. Ads are great. And then Sonos being like, we are excited to be part of this. And like you said, Chris Welch has been reporting on this for forever. And he put two and two together and is basically like, this is pretty clearly what Sonos is doing, which is weird, but also pretty sensible if you're Sonos and you're like, oh, we desperately need not only for people to buy this thing, but for this to be a real source of revenue for us outside of hardware, which Sonos has been desperately trying to figure out how to do for a long time.

1:12:13And so throwing in with a thing that is fundamentally about building an advertising business seems like a bummer of a user experience, but probably a good business for Sonos. So I'm just going to read you this paragraph from Trade Desk about Ventura. Ventura represents a major advance in streaming TV operating systems as it solves key issues with prevailing market systems today, including frustrating user experiences, inefficient advertising supply chains, and content conflicts of interest. I mean, those are my three biggest issues. When I think about what I hate about watching TV, inefficient advertising supply chains is number two on the list for sure uh that's very good uh it's very good in that um like young people are just watching youtube like it doesn't even matter like that's a pretty efficient advertising supply chain yeah it's pretty good it's like i watch the nfl and youtube and then the jake paul fight on netflix um the i i know what they mean by inefficient advertising supply chain it's my curse to know what that means yeah i i don't even want to tell you because it's so stupid all they mean is that when you open a tv box you have multiple apps on the tv box and those apps don't know what ads you have seen and so different ad providers are selling the same ad to like hulu and netflix and whoever else youtube tv and the supply chain is inefficient because it can't just target you the user it's targeting apps which then have user like this is all a mess and roku's entire business model is you can't even put that stuff on a roku unless you give roku a cut just like the app store and that means roku makes money but all these other companies are like why are we all paying the fees to run the same ads in the same box the same person and roku's like i don't know i'm rich give me five dollars is this a thing you can sell to a consumer we've solved the problem of you might see the same ad a bunch of times to be fair yes like honestly if i could just stop getting the one ad that i get a hundred thousand times a day for a stupid hvac cleaning company like i would i would pay more money for that i would you would pay more money for an efficient advertising yes it was like if peacock was like 5.99 a month they are like 6.99 a month we'll only show you the same ad once i would pay but they do say that they pay more money and we won't show you any ads a real no no that's not what i'm saying i'm fine with that you want a middle tier i have to look at my phone sometimes right like i'm good with ads i just want i want i want more ads i want ad variety we'll see i just think like it's it's great to chase a tv box uh it's it's very hard and nothing about this makes me confident that they will solve the core problems which is like where do i find the thing i want to watch and sometimes it's on netflix and netflix has no incentive to play like that's just real and like and then you got to integrate it you got to be able to say movie time how the curtains come down i gotta get some curtains in my house uh all right there's also the question of like why would you buy this from sonos ever like what what tv streaming box could sonos possibly offer you that would be super compelling a soundbar i don't know that they will ever do an actual box i think they will do a soundbar with a bunch of htmi inputs and say just buy this thing it'll sound amazing and also it's got the streaming stuff built into it but the reality is more and more people are not buying boxes at all they're just buying the tvs and using the built-in garbage TV software.

1:15:34And like, is someone just going to make a TV? Who knows? Speaking of who knows what anyone is doing in hardware, that's my segue. Google is reportedly canceling the Pixel Tablet 2, might leave tablets entirely, but then also might be about to reboot all of laptops and tablets, and then also there's a rumor that they're going to shut down Chrome OS and rebuild it on Android. Kudos, by the way. You just explained a thing that doesn't make any sense in about the most sensible possible way. Who knows what's going on? Yeah. And also the government forcing this is so gross. Yeah, right. Yeah, I mean, there is an interesting thing here that is aligned between those two things.

1:16:14Like, do you remember the thing that Meta did where they were like, oh, you're going to make us break up our messaging apps, so we're going to stitch them all together in such a way that that's impossible? Like, is that what's happening here as Google says we shouldn't do these things? No, no. Meta's thing was ice cold. It was calculated. They saw it coming. They made a move. They haven't actually executed a move. They're sort of interoperable. But this is not that. There is nothing ice cold or calculated about Google's hardware strategy. We made another run at tablets and nothing has happened.

1:16:45We might cancel this whole deal. Also, maybe Chromebook should run Android, they said, for the 50th time in the past five years. Yeah, I mean, the thing I think is interesting about this is the Pixel tablet thing is weird. There's been some conflicting reporting on a bunch of sites that primarily report on Google and Android about what was coming for the Pixel tablet 3. And then there was a report on Android headlines that the Pixel tablet 3 was canceled. And then there was another report that actually the thing that was canceled was not the Pixel tablet 3, it was the Pixel tablet 2, which would imply that there are no more Pixel tablets coming.

1:17:21uh i would say what seems to be clear is that google is getting out of the tablet business in some fairly short order which like i don't see a lot of pixel tablets in the world i'm not super shocked by this but also boy was it not a long time ago that rick ostrolo and the whole google crew were like no we're serious about this we're doing this for real we're in it to win it all we can do is keep making stuff that people like and we're in it for the long haul and like whoops uh i think the i think the chromebook chrome os android thing is probably more interesting because the thing that happened not that long ago is that android and hardware all became rick osterlo's problem and and what you need in order to do this thing that google has tried and failed to do a thousand times which is combined chrome os and android is you need somebody to just make that call who can direct every single person involved what to do and now that person is rick Osterloh.

1:18:17And we reported a while ago that Google was canceling the next Pixelbook and that that was just not going to be a thing. And what seems to be the case now, if Google is going to get back into the laptop business, it's going to be something like the Pixel laptop and it's going to run Android. And basically Android plus desktop class Chrome browser could work. Like it's just sitting there, right? But it requires a big leap from Google to say we're out of the Chromebook business or to at least just say we're doing this other thing instead. Chromebooks are going to be low-end education things and we're going to do Android for the high end.

1:18:58Boy, is that probably not going to work. But it's a thing you can organizationally do inside of Google now, I think kind of for the first time ever. Sure. I just think the promise of the Chromebook is that it is simple and being like now it's android really gets you away from that promise right because you and by simple what i mean is there's only one i mean you can run android apps in that chromebook now and it's they've gotten vastly more complicated over the past few years but um what i mean is generally the application model on a chromebook is chrome yeah it's browser you're going to run a bunch of browser tabs and you you can run most applications in browsers and that is a powerful application environment and it's taking over most things.

1:19:42Most desktop apps are really just web apps and various wrappers. That's a big idea. And they have just abandoned it, kind of. Which is weird. And now they might have to sell Chrome, so who knows. That's a joke. But to say, actually, we should run this on our other operating system with a vastly different application model, we're just right back in the mess. Now it's just a laptop. Yeah. Right? It's just a Windows laptop or a Mac because you've got the native application model and then you've got what everybody is actually doing on their laptops, which is running web apps. Right. And you end up in a weird iPad-y zone where like we're starting to see bits and pieces of this with Android as it gets into foldables, right?

1:20:19Where they're testing the free form desktop windowing, which makes no sense on some Android devices, slight sense on some Android devices. Maybe that's why they're getting out of tablets because they're just like foldables are it and we're just going to put all of our effort into that. Foldables and laptops? Like I think it's a not crazy thesis. Yeah, I was out with somebody who had a Pixel Fold the other day. It wasn't Liam who bought one and returned one. I will call out our producer. But I was out with somebody who had one and loved it. Just grinning from ear to ear every time you unfold it.

1:20:49Yeah, it's a good phone. That's like, I think that would not be an insane stance for Google to take. If and only if you can then make the desktop thing actually work. And like we've been saying, Google has promised to figure out how to marry Chrome and Android for a very long time. And it has never, ever once come even close to being remotely good. and now they might have to be forcibly divorced by the United States government. All right, let's end here, which is, this is like the funniest place to end after that conversation. It was Microsoft Ignite this week. Sasha Nadella got on stage, talked a lot about scaling laws and AI and all this stuff.

1:21:27And then he was like, also here's a$349 PC that streams windows, which is basically a Chrome box for windows. Yes. Like it is precisely exactly that. It's a cute little guy. Yeah. I mean, it's a square, but yeah, it's like a little, it's a little guy and it just, It's a Chromebox for Windows. Yeah, you stream Windows on it. I think this is going to be very successful. Like, maybe not this one, but this idea of basically, like, here's just a super, essentially, like, thin client that you plug into a screen and run Windows on in an internet-y kind of way. Gangbusters. I'm all for it. This thing is, it's, like, I want to buy one of these just to, like, have a round.

1:22:07I think the idea that people are going to completely stream their computer is still a long way away. but this is like a you know i need it for a developer environment at work or we're we're running our dentist office on streaming windows like sure i'm into it i mean this thing just looks like a it's a this when you get your first job and you sit down at your first computer and your first cubicle and this thing is looking at you it's like oh this sucks that's that's my reaction to this david's like i want to stream windows at my house yeah but the beauty of it is unlike the crappy desktop computer that you get your first day at work at the at the you know accounting firm uh this one just runs the internet and the internet is fast now so that's good you don't have to do much on this thing it just has to run the internet you just have to be surveilled by your boss this thing has a built-in mouse jiggler detector like the cops come if it detects you're Fake working.

1:23:05It was perfect. No, it is very funny. Google is like desperately trying to get a, become more like Windows. And Microsoft is like, nevermind, we're done being Windows. Let's just do the internet. If you remember the first iPad was explicitly positioned by Steve Jobs is not a netbook. Yeah. Right. This idea that you would have a thin client PC that like, maybe not stream the entire operating system, but just ran web apps. I mean, that was the EPC. I cut my teeth writing about EPCs. Joanna Stern she became a name in the gadget world by getting netbook scoops by EBCs that's very good were netboxes a thing can we can we make netboxes a thing okay yeah they were they were a little whatever the idea was you're gonna buy this cheap Linux computer that's gonna run web apps and that's gonna cost $500 and then Steve Jobs was like here's an iPad would you like a good computer and they went away that was it it's time alright we gotta take a break one day we're gonna have Joanna back and I'm gonna make her tell the story about when she came to me totally stressed out.

1:24:09She's like, I can't just get EPC scoops on demand. It was amazing. I was like, you're good. Don't worry about it. Alright, we gotta take a break. We'll be right back. What's a lightning hit? It's coming. Get ready, everybody. Every story you love. Every invention that moves you. Every idea you wished was yours. All began as nothing. Just a blank page with a blinking cursor asking a simple question. What do you see? Great ideas start on Mac. Find out more on apple.com slash Mac. Morning, Zoe. Jeff Bridges. Why are you still living above our garage? I want to be in a T-Mobile commercial like you.

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1:27:28We're back. My friends, I've asked for sound effects for this. For fanfare. It happened. The lightning round is sponsored. And not in a small way. Drum roll, please. Liam, please announce our first ever Vergecast lightning round sponsorship. Okay, let me turn on my ad voice. This week's lightning round is presented by AWS. We did it. We did it. If you hadn't heard of AWS before. We all get new frame TVs now because it's sponsored. Let's do it one more time. Play the music one more time. One more time. We did promise this would be the greatest ad buy in the history of the first cast. Right? And I still won't do it.

1:28:20Just to be clear. I'm still a precious flower. But I'll run the music again. We'll just do it again. Liam, who sponsored Lightning Round? This week's Lightning Round is presented by AWS. Oh, it's very good. We have grand plans for future Lightning Round sponsorships. It took a long time to pull it off. And then our ad team, they just went for the biggest whale they could find. and again, you know, now you've heard of them. They were just a little, a little flat by an operation before, but now the real validation is finally come to AWS. Uh, this is great. We have grand plans for, uh, uh, other companies.

1:28:59I don't know how that works at all. Some other people, Liam will announce your name at the drop of a hat. If you pay us money. Um, and then we have grand plans for how people can participate. Cause we've gotten so many emails from listeners being like, I was sponsored lightning round. and we have some ideas. It's going to be good. All right. So we're changing lightning round. We got some feedback last time on our new segment, Show & Tell, which is this is just the lightning round. Which is not, it's not wrong. It's not wrong. It's not right, but it's not wrong. Yeah, they're thematically similar.

1:29:29So here's the new idea. We'll still do Show & Tell. You show up, we talk about stories, we go through them. Lightning round, we just have the long list. We're just going to go through them as fast as we can. Yep. Lightning speed. Yep. Sponsored by cloud computing. I will say, historically speaking, for everyone who is listening to this, when we have tried this, it becomes the longest thing we do. And so our good friend, Nilay Patel, has committed to actually lightninging his way through the lightning round. We have grand plans for this, too. It's going to be great. As soon as someone sponsors us for enough money for us to buy a clock, we're going to have one clock.

1:30:07Yeah. The most expensive clock of all time. First we buy the yachts and then we buy the clocks. One stopwatch and we're going to go through this very fast. All right, let's start. Comcast is spinning off its cable TV business. This is actually huge news. So Comcast, as you know, NBCUniversal is an investor in Vox Media. The big news here is that we're probably going to have to change this disclosure. Oh, yeah, that's true. I don't know how that's going to happen. I have no insight into how that will change. You know what's going to be amazing is pretty soon our disclosure is going to be SpinCo.

1:30:39Yeah. Is it investor? So Comcast signaled this in their last earnings report. We're going to spin off some of our cable assets and do, quote, a well-capitalized company, which means they're going to give them a bunch of money, not load them up with debt, which is usually how that goes. And the new company right now, because it doesn't have a name, is called Spinco. And it is MSNBC, CNBC, a bunch of cable networks. So Comcast wants to be out of the cable network business. That's not where the money is for them anymore. The money is in broadband. They're going to hold on to NBCUniversal and then hilariously Bravo because Bravo makes money on Peacock.

1:31:12Is that true? Yep. Weird. I just assumed Brian Roberts, the CEO, just like really loved Below Deck or something. He's like, I can't get rid of Bravo. So this is what we have yet to see how this is going to go. Mark Lazarus is the CEO of Spinco. There's big questions about CNBC, MSNBC because they're built on the infrastructure of NBC News. Right. Which Comcast is going to keep. So like, how does that work? By the way, people know I've appeared on CNBC many times. There is your disclosure. I hope everyone there is doing great. But I think you can just point to this directly and say, oh, the era of cable television is over.

1:31:51It is just over. We're fully into streaming and maybe not even into streaming. We might just be into video platforms like YouTube and TikTok. and what you actually need to do is figure out how CNBC or MSNBC or any of these other networks that you're taking is a participant in those. Yeah. It's really interesting. You go back even a few years and the overwhelming theory was basically the pay TV landscape is slowly declining, right? It's going to make us a lot of money, but it is going to very slowly winnow away. And what actually happened is it is just exploding into a thousand pieces all at once, It is collapsing more quickly and more aggressively than anyone expected.

1:32:31So what you're seeing now is all these companies scrambling to get out of that business as fast as they possibly can. And we've gone from like, this is how do we manage the slow growth of streaming with the slow death of cable? And now it's how do we manage the slow growth of streaming with the extremely rapid death of cable? And it's putting a lot of people in weird positions. I think they're keeping NBC. I think Disclosure is still NBC. Nothing would make me happier than you having to say spin co on every episode of the Burgecast. So that is what I'm rooting for. It's going to be confusing. That's a big deal.

1:33:05We're going to see how it plays out. But the idea that you have this other company that has to find its own distribution, that is the problem to solve. Every company is trying to solve this problem. Right next to that, Donald Trump has officially named Brendan Carr as his nominee for chairman of the FCC, which we predicted on the show the last three weeks in a row. yep uh i will actually lighten around this one uh this is dumb and bad and brendan has bad ideas you can just go read his project 2025 chapter uh it is nonsensical like he wants to seize power at the fcc and use it to control speech on platforms and do it using like threats of section 230 reform no that's gonna work we're just gonna make fun of him for the next four years that is a promise for me to you perfect done moving on i don't quite get this one explain Strava is closing its API, basically.

1:33:55Yeah, so Strava is one of those companies that is kind of like the data layer of a lot of other fitness apps. It's like what you use to track your runs and bike rides and all that other stuff. And kind of out of nowhere informed lots of developers that it's changing the way it polices its API. And ostensibly, it's about privacy and AI training and making sure that people's data is preserved in the way that Strava understands. And Strava has come out and said, we think this is barely going to touch anybody. It's not going to be a problem. But a lot of users and app developers are saying, actually, things that we like, like these automatically generated leaderboards that let us compete with our friends inside of these apps, or like, you know, summaries and things over time that let you track information, like things you can do that Strava doesn't let you do, but you can do with Strava data is all just going to disappear.

1:34:47And I think it's happening really fast. Strava gave everybody like 30 days notice that this was happening, which is really fast in any kind of like developer environment. And so people are just kind of freaking out. And I think what it will actually be remains to be seen. But it's just one of those things that is like one company is in the middle of a lot of this stuff. And this data means a lot to people. and you can read it as Strava trying to be good to its people and you can read it as Strava trying to close the windows so that you have to use Strava more. And it remains to be seen which one it's actually going to be.

1:35:24So let me make the comparison to, of all things, Reddit. Okay. Reddit just had a good quarter. It's probably a company. Profitual for the first time ever. Crazy. Like, they've been around for a long time. 20 years later, yeah. Reddit got there by going to war against its developers and its users and taking what had been a pretty open ecosystem and then closing it down and saying, you're going to use our app. If you want to make another app, we're going to pay us so much money that it's not even remotely worth it. If you want to be a moderator of a subreddit, you're going to play by our rules or we're going to take it away from you.

1:35:54And this was generally bad, right? This is a large platform that pissed off its most important constituency. I think we've said it, like the power users of Reddit who moderate the subreddits, the app developers make the apps people like, they're basically like, get out, like we are way to the highway. and it has had effectively no negative repercussion that we can see right right it's still growing it just made money it signed a big deal with google people are still using reddit it's the only non ai spam source of data for google search like there's a lot going on with reddit that is positive but they had to go through this wrenching change which you know you can't make it on without breaking some eggs some very important very meaningful eggs yeah still broken is that strava right they're just closing it down saying screw this ecosystem we're going to make money out for what we have here?

1:36:41That's certainly the cynical read. And one of the things that's happening is Strava is starting to build its own AI features. Like they have a V song who's been covering all this for us mentioned that I think it's called athlete intelligence Strava's thing, which is essentially like a summary of all of your training data that tells you how you're doing. That's the kind of thing that you've been able to use Strava data for in other apps. And now Strava is saying, no, you can't do that, but we're doing that. And that is precisely the thing that Reddit said to third-party app developers. That's the speech.

1:37:14The difference is I think it's... I don't use Strava, so I could be wrong about this. And I would be curious to hear from people who have been using Strava for a really long time. But to me, the switching costs out of Reddit are much higher than they are out of Strava. If you want something like Reddit, but not Reddit, it doesn't exist there's nowhere to go you just there are no other places strava has lots of competition uh and and you've seen this even in like the the forums and on ironically the subreddits where people are talking about this stuff people are encouraging people to go like invest in the garmin ecosystem more or like there are other ways to track this kind of stuff i think for people who have been in this ecosystem a long time getting out will be very hard but it'll be interesting to see if strava can actually pull this thing off because i just don't know that its walls are quite as like high and impenetrable as reddits were and that was reddit's bet all along right was like we can do this because fundamentally most of you like it here and also where are you gonna go yeah we use facebook groups right exactly i just i don't know that strava has quite that same tie to people but again i am not a strava user and if you are i would i would love to hear like what the perils of leaving strava feel like yeah i'm very curious I also choose not to track how much I run every day.

1:38:31I track it just by sitting at my desk. I'm like, is it zero? Was it zero again? All right. That's it. Ding, ding, ding. The clock went off. Imagine. You can see the future of the lightning round coming. Now that we're swimming in cash. Can we buy an Alarmo, the Nintendo's alarm clock, and have that be our little mascot of the lightning round? There were some documents filed by Elon Musk and his pending extremely shaky loss against OpenAI, but at least it's generating discovery, emails between Elon, Sam Altman, between the other founders of OpenAI and Sam Altman that sort of document how this company went from a nonprofit to Sam Altman's house of profits.

1:39:16I don't know what else to describe it. Like in the beginning, Elon's like deep mind to Google is going to hire everybody. Here's some money, start a nonprofit so we can make AI. And now we're at, we're going to make this a for-profit company controlled only by Sam Altman. Lots in these emails. Like Kylie wrote them up, but it really does seem like, I think that Elon gave a bunch of money to Sam Altman without a contract. Step one from your friend who is not your lawyer, but is a lawyer, Neil Ipatel, have a contract? Yeah. It's really hard to file a claim for breach of contract without a contract.

1:39:49It's basic stuff, guys. So they don't have a contract. So he's inventing all these other legal theories, which are all very tenuous. But the emails make it very clear that Sam Altman was like, here's a non-profit and then slowly made it a for-profit. And it now is about to actually flip the switch and make it a for-profit. Yeah, and also the ways in which Sam in particular has like consolidated his power over time. And all of this happened almost to the day a year after the insane events of last Thanksgiving when Sam got briefly fired and then came back with more power and more autonomy and ability to do whatever he wants.

1:40:27My read of this whole lawsuit, and there's a, I'll link to the blog post. I'm sorry, I don't remember who wrote it, but somebody just put all the emails in a blog post in a row. And it is so funny to read because you can tell Elon Musk's angle here is basically just to like big brother, Sam Altman, that he's like, listen, bucko, you couldn't have done this without me. I'm the reason open AI exists. I did it. But then all the bad stuff that's happened and the fact that it's not what we wanted is your fault. And it's very funny because a lot of the emails are basically Sam going to Elon with every question, every problem, and Elon being like the grand fixer who's like mostly just says throw money at the problem.

1:41:09It'll be fine. Yeah, Elon stuff. Which is a theory and it seems to be working in a lot of ways for him. And about half the time he says, do you want to have one of my babies? Which is Elon's other move. Right. Right. And Sam, I don't think has said yes to that yet. But an OpenAI board member did, in fact, ultimately have three of you once. Correct. Three of the 12 that we know about. But yeah, it's it's just there's a lot more to come. We've heard we've seen reporting that there are a lot of messages from inside of OpenAI, including in like Signal and other messaging apps that we're going to see as part of this discovery.

1:41:38Like we're going to learn a lot about how this company operates because of this one lawsuit. Because of this. I promise you he will lose this lawsuit. Well, that's kind of what I mean. I think this is as much a push to make this stuff public as it is to win the lawsuit. Like this is Elon Musk trying to insert himself as the brains behind OpenAI as much as it is an attempt to actually win the lawsuit, which I just find totally fascinating. Yeah. And we're going to cover every twist and turn it. Read the emails, read Kylie's piece. It's very good. Okay, we should end. Actually, can I insert one extra lightning round?

1:42:11Please. because Bose acquired the company that makes Macintosh the super high-end speakers. I don't know why. I just want to point out there's incredible amount of consolidation in high-end audio, which is very funny because there's Bose, which now owns Macintosh, which makes$10 ,000 amplifiers, and I've always wanted one. So cool. But cool, legitimately cool. I'm happy this company continues to succeed in whatever way it's going to succeed. so yeah so there's sound united which is owned by massimo that's bowers and wilkins denon poke morance definitive technology boston just like all of them over there um and then there's another company that owns like pioneer and onkyo uh and they're all the same like it's just bananas like all over the uh like that's all consolidated over there and now bose owns macintosh and there's just this like wild consolidation and audio um and you're basically end up picking like the same products, but at different levels of expense because that's how the acquisitions work.

1:43:12If I'm like the kind of person who wants$10 ,000 speakers, which as you know, I obviously am, as you can tell by the incredibly powerful audio setup behind me in the room here. Is this good news or bad news? Like I can't imagine, on the one hand, Bose is like going to allow this company to keep existing. But on the other hand, are these just going to be the like brand names they slap on their existing products so that they can charge five times as much money for yeah there's a little bit of that there's a little bit of like every car company needs a name so you can like license the names to car companies like my jeep has macintosh but does it really harman kardon was everywhere in cars for a minute yeah yeah my jeep is actually funny because it runs android and there's a little android app on the screen that puts up the blue macintosh meters and it is all that's great and i love it like i was like yep i'm buying that car and then it's a slow Android app that is like a very slow and it's like the meters are like a full second behind me.

1:44:09I paid extra for this. This is who I am. Um, but I I'm just fascinated with this market in particular because it is consolidating in such a high rate because consumer audio is going away. Just like it just is right. There's not a headphones market anymore. There's an AirPods market and everything else. Right. Right. And, and those things are becoming wearables. Like they're putting a lot of compute into those. You can see that if you buy a Samsung phone, the best headphones to buy are Samsung's headphones. You buy a Pixel, the best headphones to buy are Pixel Buds. If you buy an iPhone, the best headphones to buy are AirPods because they're extensions of the phones now.

1:44:43Weird. That's a weird, bad outcome that I promise you happened because they took the headphone jack out of phones. And so all these other companies are racing to consolidate the very, very high end of the market where the money is. Interesting. I never thought about it like that, that headphones are now, they're a phone accessory much more than they are their own gadget. That market just got wiped out. Which is why everybody is trying to do those$350 noise-canceling headphones, because that's the only thing left. That's what's left. And even that, kind of shaky. Although I did, on my flight home from California yesterday, I saw so many knock-off AirPod Maxes.

1:45:17I believe that. They're everywhere. All right, last one. This is a good one. You take this one. so we talked a lot about the the state of social last week uh blue sky being ascendant threads being threads uh and the fascinating thing that has happened in the seven days since i would say is that uh blue sky has continued to grow it's over 20 million people now continues to grow at like somewhere on the pace of like a million people a day which is huge uh and threads is It's terrified, I would say, is the simple way I would put it. Threads has already started copying some of the feeds. They're letting you do the custom feeds thing.

1:45:59Just today, you pointed this out just before we started recording. I had missed it. It had happened so recently. Adam Masseri, who runs Threads and Instagram, said that they're tweaking the algorithm to focus more on people you follow, which people have been asking Threads for since the first damn day of Threads. Yeah. And it is just not a coincidence that they're doing this because of and after the crazy flight to Blue Sky. So Threads is like moving pretty fast to start to do some of the stuff that Blue Sky is doing really well. I made a joke the other day that Blue Sky's legacy is going to be unfortunately the same as Snapchat, which is that it's going to have all the good ideas that get eaten by Meta.

1:46:41and instead of Evan Spiegel being the de facto product chief of Facebook, it's going to be Jay Graber. And that is coming true much faster than I expected. I disagree. I disagree. Okay, a couple of reasons. One, you know, we should just have like a soundboard where you can just play clips of me talking to the Fediverse. Like ultimately these things should interoperate, right? Oh, sure. So Blue Sky gets some benefit if it's interoperable with Mastodon. and the protocols are different, but I think there's just a lot of bridges that are going to get built and like that'll be fine. Yeah, they will crosstalk pretty quickly here.

1:47:16I think that's coming. We'll see. I mean, the protocols are very different. Yeah. Very, very, very different and wildly different levels of maturity. And honestly, Threads isn't fully federated and neither is Blue Sky. Like there isn't, I think now there are personal data servers that you can just like run, you can host, you can self-host Blue Sky, but there are no other apps. Like the actual app of Blue Sky, only Blue Sky makes. Sure. And there's pieces of it that are still kind of proprietary. They're early. They just started. They promised to do it. They haven't done it all the way yet. Same with Threads.

1:47:44They promised to do it. They haven't done it all the way yet. But the network effect here will benefit both companies in a way that did not happen for Snapchat. That's true. I agree with that. That should be the promise. Second, Threads has not boosted the best idea, which is starter packs. So you can steal feeds. You can show people more people they follow. But starter packs on Blue Sky are the thing. they're such a great product right i made a list of people you should follow if you care about k-pop and you publish the list and you can just hit follow and you're done like that is driving so much growth over there yeah in addition to it being revcrown by default in addition to having multiple feeds and block lists and all that stuff but they have made it really easy to just start yeah even in a way that like twitter never figured out like the the there were the twitter suggested follows when you would start and that was like really great for whoever made it on those list, but it wasn't specific in a way.

1:48:39But now you're right. You can go to Blue Sky. You can type in. I did this the other day. I was like, I like Arsenal, the soccer team. I just typed in Arsenal to the list of charter packs, clicked follow on one of them that was like all the Arsenal people. And all of a sudden my feed is full of Arsenal people. Like it's wild that no one invented this before. And Blue Sky just nailed it. I think Threads is going to be somewhere between one day and several days from putting out something very much like that. But kudos to Blue Sky. I really think, and again, I'm very nervous about the First Amendment in the Trump II administration, Brendan Carr.

1:49:17I'm so sorry. We're going to find some way to algorithmically cut out the Brendan Carr segments of the Vergecast over the next four years. But then those of you who like it, we're going to find a way to turn the volume up on those. We've got ideas for podcasts, everybody. I'm nervous about it. And Federation is a thing, is the escape hatch for social media. Right. Where I think Jay Graber can say, look, we moderate Blue Sky this way. But if you don't like it, there are other servers or other apps. You can compose your own moderation and you can just have it that way. And that is the no other company has built that yet.

1:49:50I think Threads wants that for various EU reasons. Right. This isn't a closed network. We're building it any way you want. But if you want to follow our accounts on another network, you can. There's these are big ideas. again they're not fully baked but they're the thing that is going to escape a bunch of weird regulatory pressure on speech on the internet i'm excited for them like yeah and we are still in kind of the rising tide lifts all boats moment right where like what these things are trying to do fundamentally is less compete with each other and more lure people away from x and the the more the more the balance shifts away from x and into all of these other things they all stand to benefit it as they interconnect.

1:50:31And I think they all have incentives, like you're saying, to interconnect. It's going to take a minute, but they'll do it. But I think whether you're Blue Sky or Threads, you can look at the success of the other one as a victory, as long as Threads keeps being the winner, if you're Adam Mosseri, right? Like you've got to, there is still some victory in being the one that people are excited about. And I think Threads has lost that in a pretty big way. It had it for a while. People were psyched about threads. People wanted threads to win. And I think really quickly in the last three weeks, all of that good energy has shifted to Blue Sky.

1:51:09And I think if you're Adam Aseri, that's the thing you worry about. Yeah. While still feeding just the weirdest engagement bait to your audience to 275 million people. Yeah. We'll see. I mean, they have different ideas. And a little bit of competition goes a long way. 100%. it's amazing how a little bit of competition here has made meta react more than governments around the world. Yep. Like, it's just, oh, other people like this other product better, we better change. That's a good that's the feedback loop everybody wants. But like I said, it's early, very early. Maybe Linda Yaccarino's gonna stage an enormous comeback here.

1:51:46Starter packs on X could change everything. My favorite Nazis. All right.

1:51:55sorry i mean it uh that's it we're way we're at a hundred miles over i can't i shouldn't say nazis whatever i mean i meant it leave it in there all right that's it we're way over liam just because it's the inaugural one just say this name this once again aws oh that feels so good it's beautiful it's good beautiful play the music again it's a whole thing i don't even know mission accomplished mission accomplished we did it everybody that's it that's a rich ass thank you and Finer for being on the show. That's it. That's VergeCast. Rock and roll.

1:52:27And that's it for the VergeCast this week. Hey, we'd love to hear from you. Give us a call at 866-VERGE-11. The VergeCast is a production of The Verge and Vox Media Podcast Network. Our show is produced by Liam James, Will Poore, and Eric Gomez. And that's it. We'll see you next week.

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