Apple’s AI 'Gap Year' at WWDC?, Elon Vs. Trump Goes Nuclear, NYTimes’ OpenAI Attack

Channel: Alex Kantrowitz

Published at: 2025-06-09

YouTube video id: BaVMmUHwIME

Source: https://www.youtube.com/watch?v=BaVMmUHwIME

Welcome to Big Technology Podcast Friday
edition where we break down the news in
our traditional, coolheaded and nuanced
format. We have a massive week of news
to break down for you today. We're going
to preview Apple's WWDC. We're going to
talk about the latest between Elon Musk
and Trump. And we're also going to talk
a little bit about the New York Times
forcing OpenAI to preserve our chat GPT
chat logs because the Times thinks that
we might be trying to get around the
payw wall and therefore all of chat GPT
logs should be preserved. It's going to
be a great week and I'm happy to welcome
Ran John Roy to the show as always on
Fridays. Ranjan, great to see you. How's
it going? Bromances are dead, Alex. Musk
and Trump, the bromance is dead. So,
every week I think, "Wow, we've had a
massive week of news, and nothing will
quite top the craziness of this week,
only to be outdone by almost each
subsequent week." And I can tell you
that as this Trump and Elon feud broke
across my Twitter
timeline on
Thursday, I couldn't believe it. I was
just my mouth was open in shock. We had
just had the mooch on to talk about the
um the dissolution of that partnership
and we both were under the impression
that they were they needed each other
too much to actually go full nuclear the
way they do on most uh of their enemies
or partners when it doesn't exactly go
the right way. But uh that was proven
wrong in a big way. Yeah. I tweeted on
November 7th that the the bromance would
break up in March off by 3 months.
That's why trading options is hard. If
you're ever looking at it, timing is uh
timing is difficult, but come on. It was
always inevitable, Alex. I didn't think
it would get this bad. I thought it
would be tough tough to preserve, but I
was definitely in the camp that they
would figure it out. And I think we'll
have a lot to say about that. We've just
done a full episode about the political
side of Trump and Elon. So, why don't we
wait until the second half to get to
that? Because meanwhile, there's
actually some tech news. uh coming in
and I we did hear from some listeners
who were like, "Yeah, thanks for having
the mooch on, but what about the
technology?" So, here's here's what's
going on uh with technology. We have
Apple's WWDC coming up on Monday. I'm
going to be on site covering the event
for CNBC or with CNBC I should say. And
um I will also likely do an like a solo
pod from Certino that day. So, stay
tuned for that. But it's going to be a
weird conference. Rajan, don't you think
this is the Bloomberg headline about
what to expect? Apple developer event
will show it's still far from being an
AI leader. I mean, typically, you don't
want to show your distance from your
competitors at your big uh developer
event. Here's what Mark German writes.
With the one-year anniversary of Apple
intelligence approaching, the company
finds itself in a bind. It needs to
build some AI buzz at the June 9th
Worldwide Developers Conference, but has
little to add to the conversation. Uh it
Apple's comeback probably won't be
happening at this year's event. People
within the company believe that the
conference may be a letdown from the AI
standpoint. Other familiar with the
company's planned announcements worry
that it could make Apple's shortcomings
even more obvious. So there's going to
be some minor announcements that we'll
get into in a bit. Uh but we've talked
about the turmoil, the reorganizations,
the failures of Apple intelligence and
clearly a year later we're not going to
see uh any imminent improvement. So what
do you what do you think about that Ron
John? I mean it was just about a year
ago that we were sitting here and I was
hopeful. Longtime listeners know my
feelings about Siri and I was thinking
they're going to fix it. They're going
to fix Siri, Apple Intelligence. It felt
a bit, you know, bombastic in terms of
the promises that are being made, but
overall I figured they would at least at
the basic level make Siri a little
better given how good voice interactions
already were getting on chat GPT and
others. I think it's clear for everyone
they didn't when yeah, we've talked what
it actually means in terms of what's
happening at the organization itself.
Still a bit of a mystery. There's
definitely been some good reporting on
it, but no one has really cracked the
code. But I don't know. I think like
they have to be a bit more tempered on
this one. They can't come out
gunslinging AI AI AI cuz everyone in the
entire world has seen what they're doing
right now. Oh, they will be tempered.
They will and they don't have much to
announce. I mean, if you think back to
last year's event, we were promised
effectively a contextually aware
assistant, Apple intelligence, that
could combine signals from your apps and
make your life easier by doing things
like searching your Gmail and telling
you when your flight's going to show up.
That has not materialized. It's not
materialized. It's not here. It didn't
show up in 2025. We may see it in 2026,
but we're definitely not at a place
where the company is going to announce
anything of that nature. So, the folks
that are watching this are really
looking at this as a gap year for
Apple's big AI move, and that's why
we're going to get into it. But the big
announcements are going to be around the
operating system, which to me is just
like uh you could see why people are
telling Gurin that this might make the
shortcomings uh even more obvious. But
there is a bit of news that I wanted to
run by you, which is that um Apple is
going to be opening up some of its
foundational models to third-party
developers. This is from German. The
move will let app creators tap into the
company's ondevice technology that are
currently uses to handle lightweight
tasks such as text summarization. It's a
3 billion parameter model, so it's much
smaller than anything that OpenAI uses
or anything you might use from OpenAI or
even Llama. But the difference here uh
is that it's going to operate on device
rather than a more powerful cloud-based
AI model which requires servers. So
Ronan, does this matter in the scheme of
things? We've seen models in past year
become more efficient. We've seen them
become cheaper to run. All right. So now
we're going to have these ondevice uh AI
models that Apple's going to enable
developers to use. Uh do you think that
this is a big piece of news or a
footnote? There was a time I would have
said this is the most amazing piece of
news imaginable because the idea that
Apple had a competitive advantage and
that it could run ondevice inference and
AI and actually both from a privacy
standpoint and a latency standpoint
deliver something far superior than
having to call out to a server and
process through a trillion parameter
model or whatever. Like it sounded at a
time like that was a good idea, but I
don't think it matters at all cuz
latency is not the problem. Privacy
maybe some could argue and we're going
to get into OpenAI and chat retention in
a little bit, but like that's not the
issue Apple's having right now. Just
making a barely functional product. Call
a server. Call a server. Call a massive
parameter model. Just make your promise
about finding your flight info in your
Gmail, which should be the simplest damn
thing in the world. Just make that stuff
work. I mean, even but we've talked
about it. Even Gemini is struggling to
do that. The problem is when you're
going through an email inbox, you just
have so much information to sort through
and that can overwhelm the context
windows uh that these bots are working
in. But you're right, like you're Apple,
you have this information, people trust
you, you should find a way to make it
work. you obviously thought there was a
way to make it work given your
presentations a year prior. Uh so where
where is it like where's the cream
filling? So there are some there is some
reporting that um Apple does have a
series of AI projects underway that
German reported on uh that we may not
see at WWDC, but I think it's worth at
least talking about what the AI roadmap
is for Apple because there are some
things that seem like uh they're they're
heading in the right direction. So,
first of all, there's going to be an LLM
Siri. This is from German, which he
calls a bold redo of the assistance
architecture that should eventually make
it more like chat GPT voice mode. The
hope is to finally give Siri a
conversational interface. Let me just
pause here. I think this is harder than
a lot of people are making it out to be.
It's like something that everybody is
trying to build. I don't think anyone's
nailed yet. And I'm just reminded that
we haven't seen Alexa Plus roll out
broadly yet, even after the February
event where this thing was demoed and
was supposed to be coming soon. So it
kind of in with an assistant that sort
of guesses probabilities as opposed to
like works within a database. There can
be lots of things that go wrong. And
it's telling to me that the world's
biggest uh tech giants, world biggest
companies can't figure this out. All
right, so I'm going to try to be
generous here. Yes, it's hard. And maybe
we're giving Gemini Voice too much of a
pass cuz you are right that Gemini
within Gmail still is not good at
searching through your Gmail. So the
data problem of taking a massive data
set like your entire email history is a
lot harder than uh than maybe we should
give it credit for. But like again
chatpt voice is so good. Gemini voice is
so good. Perplexity voice is so good.
All of these, even from a latency
standpoint, have gotten pretty amazing.
So to me, the idea that, and I actually
almost get from Alexa, Alexa, everyone
who owns one probably has some kind of
deterministic set of queries they make.
So they actually have to like fight
against like those have to work and the
new LLM layer has to work. I can't
imagine, I don't know, maybe I'm wrong,
that Siri is so ingrained in terms of
people's workflows and behaviors that
they're afraid to screw it up a little
bit in terms of actually giving it a bit
of conversation and like LLM based
knowledge. So, so I think it's harder,
I'll give it that to actually have like
a system level uh chat that's actually
LLM driven, but I still think they
should do it. Yes. And uh they might
have to make an acquisition and I have a
hot take on that that I'm going to get
to in a couple of minutes, but it
doesn't seem like it's impossible like
you mentioned and maybe there is a way
for Apple to just buy these capabilities
and integrate them into the iPhone. So,
I'll just leave that little teaser
hanging in the air and go to the next
thing that this is again, this is the
next thing that Apple plans to do, but
we might not see next week. And I feel
like as we're previewing WWDC and we're
asking where's the AI, it's very
important for us to just quickly talk
about some of these things. There's also
going to be they're also working on a
revamped version of its shortcuts app
which today lets users create actions
such as launching certain features
within apps or playing a particular
playlist. The new version will let
people create those actions using Apple
intelligence models. Uh that could end
up being in 2026. So maybe a voice layer
that helps you more easily navigate and
use your apps. There's also going to be
I think their AI health thing is u is
underappreciated largely. They they have
a doctor service that's code name code
named Mulberry uh and a redesigned
health app. Uh the project is in deep in
development but probably won't be shown
this year. I think that's interesting.
And they also this is kind of wild. They
have a chat GPT chatbot competitor that
can pull in data from the open web which
they some employees have called it
knowledge. Uh however employees familiar
with the work sites already plagued by
some of the same problems that delayed
the Siri overhaul. That's the road map.
Not very not very uh where do I begin?
Where do I begin? Okay, hold on. Hold
on. Let's let's let's break this down a
bit. the shortcuts app. This idea I
actually think it's a really important
one in the larger AI conversation. So
the idea is Apple has the shortcuts app
which allows you to kind of connect
basically make your own agentic workflow
within Apple's iOS. The idea was that
and I I like this is why listeners if
you wonder why I'm so disillusioned it's
cuz I was optimistic about this stuff. A
lot of developers were talking about
like maybe your mobile app just becomes
a series of program shortcuts that you
define to help Siri and its intelligence
navigate across and take actions. And so
you would like instead of having like a
whole interface in your app, it's just
your defining shortcuts. And this would
there's a lot of development talk among
iOS developers around this would be the
future of app development. That hasn't
happened. At least they're still
recognizing that. Uh it's it's
interesting and important. I mean,
doctor service. Oh, really, guys? I
don't know. Do do you do you use the
health app? I was actually thinking
about this the other day. Like Apple,
even the health app itself should be the
single greatest opportunity for them.
And everyone always feeds in their data
into the Apple Health app and is your
center of health. And I can see this
getting pitched internally, but the app
is not that good. No, it's a bad app.
But I do use it. I use it for step
tracking. I have used it for weight
tracking. Now I use Claude for weight
tracking. But I do think there's an
opportunity that if you have a place
where your data is, especially for watch
users, to be able to query that data in
natural language. And that's why I see
some potential there. Well, I I I even I
have an Apple Watch Ultra. again as I
rant on Apple. I'm sitting surrounded
and covered in Apple gear with AirPods
on and everything else, but like I
actually use this third party app uh
it's called AutoSleep. Their sleep
tracking data is a lot better than the
Apple actual health sleep tracking data.
Like we're in a world where you should
not be paying and again I'm glad there's
still indie developers out there making
a living but like the idea like they
should have the best sleep tracking data
interface presentation out of anybody
and they don't. Yeah. No, that is I mean
again the question is can they at this
point of their development life cycle uh
develop good software and I mean they
can do operating systems. We know that.
And again, like we're burying the lead
here cuz WWDC is going to be a big
operating system reveal, but you got to
do more than operating systems. Like
that's table stakes. So, couple more
features that we're going to see this.
We're actually going to see this at
WWDC. According to the reports, there's
going to be an AI powered uh power
management mode. I guess they your
battery more optimized. I know. Yeah.
it. And and there's also a reboot of a
translate app that's going to be
integrated with AirPods and Siri. Uh so
that might be the flashy demo where you
see someone like speaking a language in
the AirPods translating uh what they're
saying in your ears. That could be cool.
I don't know, Ranjad. I'm I'm trying to
I mean, I'm flying out to California for
this. I'm trying to find something to be
excited for, but I like read out all
these updates together and I can't get
there. Well, even like as you have in
our doc and then they're going to
quietly rebrand several existing
features and apps like Safari and photos
as AI powered. Not to make this just
kind of like a product complaint
podcast, but photos, ever since they
introduced the intelligence layer, mine
has been indexing for weeks. Like what I
actually searching photos has become
significantly worse. And I actually I
get annoyed when people kind of talk
about jamming AI is ruining products
because I actually think I'm a very very
overall optimistic around AI and
generative AI in general. But this is an
example where they're making it worse.
So come on, big news, Apple. Give us
something good. Give us that. What was
like the table that was glass that that
was rumored that was a screen? Wasn't
there something like that? Do you
remember? I'm sure there was, but we
obviously don't use it. And it's sort of
following a theme here where we had last
two years ago, Vision Pro dud. Maybe not
a complete dud, underwhelming dud. Apple
intelligence dud.
And after two years of that, we get to
this hangover mode. Now, the one
interesting I mean, again, I'm going to
go back to this AirPods example because
I'm still trying to pull out the thing
that I think could be interesting. Maybe
it is AirPods. I mean, well, again, the
AirPods, you need the assistant for the
AirPods to be good. Uh, but this
language thing within the AirPods might
be interesting. They're going to do this
sleep auto pause where you could listen
to something and if it senses that
you're sleeping, they're going to pause
the music or the podcast. They're also
going to allow you to control your
camera with your AirPods. So, like if
you're standing for like a remote photo
or you put your camera uh you know 10 ft
away and you get in the frame, you tap
your AirPod stem and Oh, takes a photo.
I like that. I like that. That's cool.
The AirPods, there's a ton of potential.
We've also heard rumors of them putting
a camera uh on the AirPods and making it
something like the Ray-B band Metas,
which is again there's potential here.
But honestly, what we're seeing with the
AI stuff in particular from Apple is
just it seems to be symptoms of some
illness within the physiology of the
company. It really seems like the
patient is sick and it's sort of just to
be disgusting about it oozing out some
like you know nasty stuff. No, I'm going
to get uninvited. But I mean there's I
mean I'm serious like there there's got
this it's to me it's always come down to
culture and and culture then leads to
execution and uh we've heard about the
reorganizations. Those are public and
this is what you get. And again, I say
this covered in Apple hardware and
looking at Apple hardware and talking to
Apple hardware like we're only
commenting on this because we're so deep
in the ecosystem that we want it to
work, but it does not it does not look
like it is. I guess I Yeah, I I would
distinguish Vision Pro. I maybe dud, but
amazing piece of technology. I I
actually think that was very different
than Apple intelligence. That was almost
like too forwardl looking a piece of
technology or too niche but still an
incredible piece of technology. Apple
intelligence is neither of the above.
You know Ranjan though it starts it
starts with us like when we we are like
you know the early adopters in some ways
like they see the stuff coming
beforehand not to like you know us our
listeners like we see the direction
technology is going because we're
steeped here. So, these things that
we're picking up on actually like, yeah,
everyone's using their iPhone like the
same way they always have. Have we seen
a demolition of the traditional search
market? No. Have we seen a a a
disruption of the traditional smartphone
market? No. But will that come
inevitably? And if you think about
Apple, one last thing. If you think
about Apple, uh iPhone shipments down
2024 according to IDC, 232
uh million. Is it million? Yeah. Million
iPhone shipments. uh 2023 234. So
actually uh iPhone shipments are down.
Market share 20% in 2023,
18.7%. In 2024, the only reason why
revenue remains somewhat consistent is
because the average selling price of the
iPhone has gone up. I think kind of like
building on
that it is. It's I mean there's there's
the data, there's the iPhone sales,
there's the lack of vision pro sales,
there's all these things, but even for
me there is this kind of like almost
emotional I have not felt there was many
years where like I mean and we within
friend groups especially living here in
New York if you had a blue bubble on
iMessage people left like I remember I
had switched to the pixel when it first
came out and talking bubble What? Oh,
sorry. Green bubble. Green bubble. Yeah,
green bubble. Uh, I was talking to one
of my friends. This is like 2017. I was
married. He was single. And I was like,
"Oh, yeah. I switched to the Pixel. I'm
checking it out." He goes, "I'm single,
man. I'm not trying to rock an Android
if I'm talking to a girl." Like, like
that's where culture was. And now I
really am actually jealous. Someone was
showing me the new Pixel. that has
Gemini directly integrated as I'm trying
to talk to Siri like I'm actually
jealous of other devices and there was a
long period of time where it just it was
the exact opposite. So I I really think
there's a culture shift here. That's
right. And maybe the thing that sort of
returns this company No, I can't even
say this. Like the the the thing that
they're going to bet on this year, I was
going to say the thing that returns this
company's glory, but it's going to be AI
if they get it right. And by the way,
they have time. They have time to get it
right. They just need to. Uh, but the
thing we're going to hear about largely
and we're going to do this quickly at
WWDC is there's going to be some new
operating systems. Um, I don't want to
downplay it too much because operating
systems you that's your bread and
butter. If you change it, you need to
disrupt yourself. But again, like how do
you do it? Uh, the first thing that's
going to happen is we're going to go to
operating systems that have the year
instead of the number. So, it's going to
go from iOS 18 to iOS 26. So, poor one
out for iOS 19, 20, 21, 22, 23, 24, and
25. You were so close, but you didn't
make it. Try again next century. Um, and
then there's going to be there's going
to be a design shift where uh it's going
to mirror the vision pro, so there might
be some transparency or lightness in
this Apple OS ecosystem. That's going to
be everyone's saying that's going to be
the lead news. You know what? I like
this. I'm gonna I'm gonna go I I like
this. Like as Thank god. No, we needed
some good. No, no. You know what? From a
pure branding from a pure branding and
comm's perspective, I kind of like cuz
and again I am an Apple convert in every
which way. Like every device I own and
I'm like a tech nerd enough that I like
look at what are the latest updates and
tvOS 15, watch OS 12.2, to like keeping
track of this stuff. I kind of like the
idea that we're at 26. And it shows
courage, Alex. It shows courage. It
shows you're willing to take the hard
decisions that no one will give you
respect for, but you're willing to make
a change for the future. Well, Tim Cook
famously said that when they killed the
headphone jack uh for the single USB
port and made all headphones wireless,
and I sort of mocked that at the time,
but in retrospect, I don't know if
courage is the word I would use
necessarily, but it was the right
choice. Never know. Yeah. Yeah. I
actually there's probably still people
who disagree, but I agree with you on
that one. That the headphone jack, the
Mac, I'm glad they went back to
uh multiple ports. I think at least on
the MacBook Pro was a good thing. No
more dongles in my life. But but yeah,
they they they make some decisions, I
guess. So now just just just compete.
That's all I'm asking for.
So let's let's say WWDC goes according
to plan where they do this new operating
system. They have some AI announcements.
They take some products that have always
been there. They call them AI. Maybe
they wink at what's coming down the
road. You never know, there could be a
surprise. Uh the expectations are low.
We have sufficiently lowered them for
all of our listeners over the past 25
minutes. Um is this a good WWDC for
Apple? Like, are we going to show up
next Friday and say Apple's bet in
better shape this week than it was on
Monday or it was last? Maybe they got a
surprise. I don't know. Maybe it's
giving too much credit. But like, as
we're talking, it's clear that I don't
and they have almost gone out of their
way to not drum up any hype around this
or set any high expectations. Maybe
that's actually defensive. Or maybe I
don't know what they're going to the new
Apple glasses are coming out. Maybe
something's going to get announced.
Here's the surprise I would love to see.
Tim Cook takes the stage at the
beginning of
WWDC and says, "All right, we're going
to flip the order this year. Usually, we
give you all the updates and then a
surprise at the end." Uh but today I
want to call out a special guest that's
going to be a big part of Apple moving
forward into the future and outwalks
perplexity CEO Rince Cernivas. Yes. Who
has just agreed to sell his company to
Apple for a whopping $20 billion. Now
Perplexity is out raising 14 bill at a
$14 billion valuation right now. So, a
$20 billion sale, I think, would be
decent or pretty good for all of its
investors going to Apple. It would have
to take it. Remember, Apple this year
said it was issuing a $100 billion share
buyback, which means it has a ton of
cash on hand. And what do you do with
that cash on hand if not position
yourself for the next era of computing?
And Perplexity would be the perfect
choice. Let me give you a couple
reasons. First of all, uh, Proplexity is
cheap right now and it has been gaining
a tremendous amount of adoption. We have
a headline from TechCrunch where Arvin
Vincernos spoke at Bloomberg's tech
summit this this week. He spoke about he
spoke on Thursday. He said, "Perplexity
received two 780 million queries in
May." He said, "Give it a year. We'll be
doing a billion queries a week if we can
sustain this growth rate." And the first
day they did 3,000 queries in a day. So
now they're doing 30 million queries a
day. Uh and that growth he says has been
phenomenal. So they're rising fast. You
generally want to pick up a company
before they've sort of hit that um you
know hit that point where they're too
expensive to acquire. We also know that
Google and Apple may be forced to and
sorry, yeah, Google and Apple may be
forced to kill their $20 billion a year
deal where Google pays Apple to be the
default search engine. If Apple gets
ahead of this, first of all, it buys it
now. It has a backup. Second of all, it
buys it now. it has much more leverage
than if it were to wait for that ruling
to come out because Perplexity is going
to say, "Oh, you now you need a search
uh you need a search um replacement."
Well, today's price isn't yesterday's
price. It's going to be 40 billion or
something like that. I'm just playing it
out. And of course, Perplexity would
solve the AI search problem for Apple.
It would solve many of the Siri problems
for Apple. And like you mentioned, they
have voice. So, this would be a slam
dunk deal. I think Apple should do it.
should do it this week. I love this. I
love this. Even the the dramatic roll
out, but but if you Yeah, I agree. And
also, Perplexity is growing, but from a
consumer standpoint, it's still tough.
Like we've seen anthropic like again
Anthropic is making a very conscious
decision of moving more towards coding
or like uh APIdriven revenue because
competing against as Gemini is getting
good at a consumer level competing
against Gemini and Chat PT which is the
the Coca-Cola and Gemini is the Pepsi
basically and then you're sitting there
as maybe a Poppy or something like that
which is still not bad but uh I think
like making good good old Poppy gut
health or whatever it is. Uh I think
like
soda. Yeah, I think I think it would
make Yeah, it makes all the sense in the
world. I'm sold. It makes all completely
all the sense baking it in getting rid
of Siri. Maybe maybe even renaming Siri
and saying we get it. We fell behind.
Let's uh let's just change up
everything. Plex. Plex. Turn on the
lights. It works. Yeah, that's it.
You're welcome. Send send the invoice to
Canroitz and Roy. Exactly. And here's
why I think so. Maybe it happens at
WWDC. Maybe it doesn't. Uh here's why I
think it's likely to happen. So, you
listen to the words of Arvin Cernivas,
the CEO of Perplexity, and it sounds
like he's doing uh some positioning
here. Now, he's been attacking Google
from the beginning, but again, at this
Bloomberg uh conference, he said
Google's assistant was a terrible
product uh and said the tech giant
introduces the same artificial
intelligence feature year after year
without actually shipping it to users.
Um, if you're Eddie Q, the head of
services for Apple and you're listening
to that, you got to love it. Basically,
he's accusing Google of the same thing
that people have been accusing Apple of.
So sort of uh taking Apple's side in
some ways while saying you know hey my
product uh might be in a better spot and
Perplexity is also right now in talks
for a wide-ranging deal to integrate its
technology into Samsung devices. Uh
you're Apple, you're seeing this go
down. You're watching the AI battle
accelerate in perplexity which you can
afford which would help your business in
every which way. uh which is you know
slagging Google for you uh is on the
cusp of making making a deal with
Samsung. That's when you go in and you
make your acquisition. Yeah. And another
angle of that could be, and maybe we're
just be getting too uh pie in the sky
optimistic here, but like if you're a
shareholder that the practice of Apple
for so many years of just turning out
cash and buying back shares has worked
well and it's boosted the stock price
and they basically were just a cash
machine. But right now, the idea that
like you are not investing in something,
everyone recognizes something is broken
and you have the money to do something
about it that if you're shareholders,
you're going to have a problem with that
or you should. You should be like, I
mean, obviously it's it's it's nice to
receive the buyback boosts to a share
price, but at a certain point, like,
guys, invest that money in something
because you're going to be disrupted. I
mean ultimately Apple on the market has
to be growth stock, right? And what is
it? Is it going to be a non-growth stock
that's issuing dividends and doing
buybacks? Is that a company you want to
hold on your balance sheet? Well, and
for like yeah, it's a high-tech
innovation company. They have to be ex
They have been, but this isn't like like
a utility or uh I mean this is should be
a growth stock in a growing company. I
think this would be the best $20 billion
uh that Apple spends if it does it. And
let me take you back before we move on
uh before we take a break and talk about
Elon and Trump uh for those who are
interested. But let me just take you
back to May 7th, a report in the Verge
uh covering Eddie Q, the the head of
Apple services division covering him
testifying in the Google antitrust
trial. the headline, Apple is looking to
add perplexity in other AI search
engines to Safari. Um, and what Q says
is that um it's still early days for
generative AI. Uh, he that um Apple has
agreement with OpenAI for some AI
services. It's important to make sure we
have the capability to switch if we have
to. Now, of course, he's saying this
because he doesn't want the judge to
kill this deal with Google. By the way,
all indications are that that deal is
really under threat, the $20 billion
deal, which I'm going to write about in
big technology probably on Sunday. So,
stay tuned for that. I think it's the
one of the most underrated liabilities
for big tech companies company. It's one
of the most underrated liabilities for a
big tech company today, if not the
biggest. Um, QA said, "Look, we might
switch off of Google." that tank Google
stock, which kind of shows you the
amount of value uh that's associated
with this. Uh it makes too much sense
for this deal not to happen. Yeah, I was
just looking up $410 billion spent in
share buybacks over the last 5 years.
Expected 90 billion this year as your
company is
like clearly under threat of
disruption. Spend the 20. Stop wasting
time. Spend the 20. by perplexity and
remember through I was speaking with
Mark Mahaney about this Evercore ISI
analyst we were talking about it today
think about it and this probably will
show up in the story think about it this
way you're going through antitrust
review of this deal Apple has a uh
negligible uh share of the search market
and Perplexity has negligible share
negligible share of the search market
deal will sail through sail through Tim
Cook get that checkbook out and go buy
Perplexity today Hey, Plex, do the deal.
Do the deal. Make it Plex. All right,
we're going to talk about Elon and
Trump. We're going to talk about the New
York Times and Open AAI, and we're going
to do it right after this break. And
we're back here on Big Technology
Podcast Friday edition. All right, so on
Wednesday, Anthony Scaramucci came onto
the show. We were recorded on Tuesday,
and we had this discussion about Elon
Musk's criticism of the uh big beautiful
bill. And uh I said basically, this is
almost a direct quote, I think. Uh, I
said, "Well, they're not in a flame
war." Or maybe they are because Elon is
criticizing this Build Back Better deal.
And Anthony and I discussed a little bit
about the the politics between Elon uh
and Trump. And we we both sort of came
to the conclusion that they had too much
to lose for this to um to turn into
anything but a cordial partying. Well,
we were both wrong. And Anthony, I
think, did a very good job explaining
why Elon fell out of favor in
Washington, but I think the thing that
everyone watching this uh has been
surprised by, and you can make the ar o
opposite argument, but it's been a
surprise to me uh that it went nuclear
like this uh and that Elon has in uh one
afternoon on Thursday um said that he
was responsible for Trump's victory.
Said that Trump was I'm just going to
quote it because I don't want to get
sued. uh that he's Elon Musk said real
Donald Trump is in the Epstein files.
That is the real reason they have not
been made public. Okay. So um and and
Trump hitting back saying Elon was
wearing thin uh and that he asked him to
leave. He took away this EV mandate that
forced everyone to buy electric cars
that nobody else wanted and he knew for
months I was going to do and then he
just went all caps crazy.
uh flame war for the ages. Ranjan, let
me just toss it to you. What was going
through your mind uh when you saw this?
And if our assumption was that they had
too much to lose to go nuclear on each
other, uh why do you think they went
nuclear on each other? I think your
assumption of is based on a prisoner's
dilemma of two rational actors making
decisions analytically driven decisions
and I don't think that's what we're
dealing with. I'd like to say I I we
must I I need to go back through past of
our podcast audio but I tweeted on
November 7th breakup Musk Trump coming
in uh March. I was off by three months.
Um, but yeah, I think I don't know. I
actually out of all the things that have
captivate captivated my attention, this
one almost I didn't pay that much
attention to just cuz it was it was sad.
It was kind of painful, but to me again
expected. These are not rational actors
in the traditional sense. And again,
it's been the strength of both of them
to not be a rational actor by kind of
like conventional wisdom. So, I think it
was inevitable. And I I'm more curious
of where this goes as opposed to same
what's happening now. I might I will say
like the I definitely enjoyed the memes
of like Trump is in the Epstein files
yet I helped him get elected. Obviously
some logical inconsistency there, but
overall I mean where this didn't know
beforehand. But let's be honest, if
Trump was in the Epstein files, I mean
this is a point that Laura Loomer made.
So all caveats included. If he was in
the Epstein files, you don't think the
Biden administration would have let
those out? Oh yeah. Yeah. I mean 100%.
And I think I want the Epstein files,
though. At some point we talked about
them. Imagine if they're just incredibly
boring. I'm sure they are. Like even Dan
Dan Banino came out and said that
there's no evidence that uh Epstein uh
was um was killed. Like all signs point
to him killing himself. So yeah. Um
yeah, release them. We the transparency
was good cuz release the files. Release
the files. That's our call here on on
big technology. Apple buy perplexity and
then release the Epstein files. That
that's our platform. That's our thing.
Now, you got to stand for something,
Ron, John. Yeah, he's running. He's
running. He's running. Uh, I will say
here publicly that that I was wrong. Uh,
I said to you and to Chris Hayes on an
episode that I thought that this
relationship had more staying power than
a lot of people were giving you credit
uh for and even with Mooch didn't bring
up the fact that it could blow up
spectacularly, although said maybe we're
in the beginning of a flame war uh to be
completely, you know, clear about what
happened. But uh I I was wrong. I didn't
see it going as bad as it did. And it
did go as bad as it did or even worse
than I think we we imagined it could.
Where does it go? That's that's what
matters. So four implications for four
players here. Tesla, SpaceX, the tech,
right, and Elon and his legacy. So let's
just do it quickly. Uh so space uh so
Tesla uh they dropped 14% stock drops
14% on Thursday and it's up five or
close to 6% today Friday. So a bit of a
rebound but uh loses 100 billion in
market cap basically right away and um
look it's got there's a chance that it's
going to have this autonomous driving
pilot or launch coming up in Austin next
week. Who knows if that is going to be
delayed. Uh, but this will definitely
hang over it because of course if you're
running self-driving cars, you need
regulatory approval and of course it's
on a state level, but we know how the US
government works. The federal level can
dictate to the state because the federal
level does have a lot of funding. Big
beautiful spending, shall we say, that
impacts the state. So that is yet to be
determined. I think we've also seen a
purchasing pullback on Teslas, uh,
especially in Europe. I mean, I think
Europe fell 50% year-over-year. uh in a
couple of months. Uh and that is a
damning trend for Tesla sales uh because
the company needs to sell cars. It's car
company for now at least. So I don't
think Elon breaking with Trump is going
to be good for winning back those buyers
in Europe. That's a pipe dream and I
think it will probably stop let's say
Trump supporting uh Cybert truck uh
wouldbe buyers from going out and buying
the Cybert trucks. So, it could end up
being that like this doesn't help with
those that it's hurt and it hurts those
that were leaning into the Elon camp uh
leading to worse prospects for Tesla. Of
course, that's the most negative
possible interpretation of what's
happening and maybe they make up next
week and you know, all's hunky dory, but
it's hard to see that happening. What
What do you think, Rajan? Well, I think
just as a sign of the state of politics
right now, one of my friends was like
convinced that Trump and Musk are going
to make up next week and both of them
are just very long Tesla calls call
options. And I remember he kind of said
this and it was somewhat inest, but I
was like, you realize like, do you
really think so? This is the president
of the United States we're talking about
yet, right? This is like actually a
thought and a conversation. But I think
Tesla, the car
company, I don't see how you recover
from this cuz again, like the core
constituency of more environmentally
driven people, you're not going to just
make up that brand damage tomorrow. I
think maybe to take the like positive
side on things. I think this is going to
force robots or uh self-driving like
they have to nail one of those. They
have to Optimus self drive like
self-drive robo taxis finally it's been
promised for a long time he's going back
deliver one of those and everything's
going to be okay but Tesla as purely a
car company the valuation has not made
sense for a long time and it it
certainly doesn't make sense now and is
under threat from a lot of different
directions here's what you need you need
the autonomous driving to work so
that'll be a good answer if it starts
next week and it actually works. If that
happens, I think Tesla is saved. Elon's
legacy is saved. We're going to get to
that in a moment, but uh it has to work.
Bottom line, SpaceX though, SpaceX is
going to be interesting. So, SpaceX has
a ton of money in federal contracts. And
if you remember Sager and Jetty's
episode here a couple of months ago, we
talked about this potential that maybe
like Democrats get elected and then they
doge the SpaceX contracts. Uh we never
thought that maybe Trump would then doge
SpaceX himself. Uh but certainly it
seems like Trump is going to think about
the subsidies. He's put this on true
social that Mus gets and probably the
contracts. Although you would I would
argue and I think it's hard to really go
against this that the US government kind
of needs SpaceX more than SpaceX needs
them or maybe not even more. But they
both need each other. And that's why
Elen kind of tweeted like make my day
cuz like nobody's going to go to the
International Space Station without
them. So this is again this is uh some
reporting from our big technology fellow
Owen Lavine. He says uh he writes again
in in our our newsletter from uh from
Thursday uh beyond its existing 4.5
billion in federal contracts. SpaceX is
also poised to get a slice of the 42
billion in contracts to provide internet
connections uh to rural areas through
Starlink. They also have this uh this um
Dragon capsule that they are working
with uh with the ISS and Musk said,
"We're going to stop that." And then
like an an account with like 20
followers said, "You know, you probably
shouldn't stop that." And he goes, "Good
idea. We won't stop that." Uh but DXYZ,
which is a uh a fund that has a large
portion of its portfolio invested in
SpaceX, went down 10% yesterday as well.
So that's the SpaceX outlook. What do
you think? Yeah, I mean I think you make
the right point that they need each
other a lot more than Tesla and the US
government need each other. uh there's
been a lot of advance and in terms of
like it's our overall as a country
positioning especially relative to China
in terms of space exploration in terms
of satellite launches like and uh I
think it's it's a much more sensitive
interesting one like could Trump be
vindictive enough to actually risk all
that and just go nuclear on it certainly
um I actually you know I think the
SpaceX story is going to be more
interesting in the near term because
Tesla's going to again if they if some
massive technological advance happens in
the next few months it gets very
interesting but otherwise you see like a
slow decline and maybe some kind of
rebound over time or steady like
steadying of their overall sales but
SpaceX can move fast in either
direction. Oh yes yeah and uh this is
the thing there's you're right totally
immediate consequence that we could see.
All right. What about the the the tech
right? Uh so this coalition among people
who supported Elon and Trump together
sort of uh coalesed in Silicon Valley.
Not all of Silicon Valley, but some
vocal leaders, a lot of VCs. Um think of
Mark Andre for instance. Uh some of the
all-in guys like David Saxs must be
having an awkward moment in the White
House. Uh probably hiding in his office
thinking about how his two buddies are
are fighting. So there's an interesting
moment here where the tech right may
have to pick sides. Uh do you go with
Elon or do you go with Trump if this
fissure continues? My perspective is
that they are going to try to not take
sides that uh you're going to see um
things like Bill Aman uh saying you know
these you guys really need to get along
for the good of the country. I don't
know if you would include David
Friedberg in this
um in this group, but he wrote uh he's
in one of the all-in hosts. He wrote
China just one. He's been to the White
House a couple times uh to do some
interviews. So basically not trying to
pick sides saying China won. Uh I think
many will land with Trump over Musk if
you really press them. He is the
president after all. But what do you
think about the implications of this
fissure in the techright? I think
majority of the names you just kind of
listed off will move on and act like
none of this ever happened that they
said anything or had had any position
relative to either Musk or Trump. I I I
think overall like people move back
towards Musk and definitely not choose
Trump over Musk. But I think like the
idea that they ever had positioned the
two of them together as truly
transformative, people will just ignore
that they said themselves.
Now, let's talk about Elon's legacy. I
think that it's still too early to say
where this is going to be in the Elon
Musk history book. Uh but it will be
there. And I think the real question is,
is this the first chapter? Is it a
footnote? Um my sort of cynical take is
it's just going to depend on how his
businesses do. Like if SpaceX gets to
Mars and uh Tesla starts shuffling
people around the world with autonomous
cars then this will be a footnote. But
um those businesses future are tied in
some ways to uh Elon's political bet
here. I I agree with that. I mean, I
think like the amount of wealth created
both for Elon Musk, but also for every
shareholder of any of those companies is
what drove the power to to like get to
the White House in the capacity that he
did. So, yeah, I think in terms of
legacy, it's always been a bad bet to
bet against Elon and he's he's still
around and he's got a long way to go.
So, I think that side that story remains
to be written. I think like you know
what his what the effect of Doge was
probably and hopefully more comes out
and we actually start to see some
concrete evidence of certainly the
negative a lot came out maybe there was
some positive but overall like what were
the real impacts of those few months
running around with Doge but uh yeah I
think
overall Elon's legacy we it remains to
be written overall I do want to like
pause for a point uh moment here and
just kind of like you brought up the
Doge stuff. I think we should talk about
it. And then there's other stuff that
we're going to find with Doge that just
didn't work according to plan. Uh we
might look at this as a moment that um
went from Elon Musk, you know, being a
suboptimal performer with Doge uh to to
being maybe a disaster because there's
this other uh tool, this is from
ProPublica, that they developed this
errorprone AI tool to munch veteran
affairs contracts. Um here's from the
story. There was an engineer who worked
for Doge who built an artificial
intelligence tool to identify which
services from private companies were not
uh essential. He labeled those contracts
munchable. Um but the tool hallucinated
the sizes of contracts frequently
misread them and inflated their values
and included more and concluded more
than a thousand uh were each worth 34
million while some of them were worth
only 35,000. The AI tool flagged more
than 2,000 contracts for munching. It's
unclear how many have been or are on
track uh to be cancelled. Uh but they
included
uh but some of the canceled contracts
unclear if this is 100% uh related or
related at all, but some of the VA
contracts that have been cancelled
including one to maintain a gene
sequencing device used to develop better
cancer treatments. Another was for blood
sample analysis in support of VA
research. Uh another was to provide
additional tools to measure and uh and
improve the care that nurses provide. Uh
the programmer that worked uh with Doge
Sahil Lavia uh Lavia he said uh this and
he was also I think he was he was um
ousted or left Doge uh after going
public with some information about it.
Um he said I think mistakes were made.
I'm sure mistakes were made. Mistakes
are always made. I would never recommend
someone run my code and do what it says.
It's like that office episode where
Steve Carell drives into a lake because
Google Maps says drive into the lake. Do
not drive into the lake. Uh this is this
is bad. I mean, you had basically people
coming in volunteering building AI tools
um and then the government just kind of
following their advice seemingly blindly
and killing important programs. What a
disaster. Yeah. I mean, I think it's
it's
definitely pretty terrible. I think I
think you're right that perhaps it was
undercovered because also everything was
moving so fast that actually like trying
to get a handle on things and report on
it properly was incredibly difficult. So
what the actual impacts are maybe there
is a lot more to come out. I think to
bring it back on the tech side, I think
like this is actually a perfect example
as well of like AI and like the idea of
like at scale going over contracts. I
wonder if they like what models they
were just creating rappers around for
Doge AI and like to actually make
decisions without even reviewing them in
any kind of way or like understanding
what you're looking at. This is like
exactly the nightmare scenario that
people who are negative and bearish on
AI present. I think that part trying to
separate this purely in at a
technological level like that's the
stuff that's almost like frustrating
because it's this is exactly the
negative scenario that everyone presents
and in most cases that's not how things
are operating but this was exactly that
just using AI in a shitty way and then
actually like making really bad
decisions using that. Yeah, like maybe
there were some good I think there were
some good implementations from the Doge
program. Again, we're going to have I've
been teasing it for a while, but the
news cycle's been nuts, but Bill Vas
from Booze Allen is going to come on and
talk a little bit about the technology
implementations and how they've helped.
Uh but yeah, some of these things
uh I I don't know. I don't know how you
justify them. Okay. Uh very quickly
before we end, OpenAI, New York Times,
they're in court and uh the New York
Times is telling Open AI has has gotten
a judge to rule in favor of this
position that OpenAI has to preserve its
chats because people who are using
OpenAI's chat GPT to uh go around the
New York Times payw wall uh may delete
those chats and therefore OpenAI has to
preserve like all chat GPT chats uh to
some degree. I mean, I guess this is
like people using chat GPT versus like
some of these like bespoke APIs. Um, is
this is this a privacy disaster waiting
to happen? I I I actually think this is
one of the most interesting court cases
going on right now because think about
the implications. It's OpenAI wants to
delete your data and most people are
worried about OpenAI hoovering up too
much data and, you know, copyright
issues and whatever else. They're
saying, "Let us delete your data." And
from like especially a security and
privacy standpoint, as a user, you want
to be able to delete your data. And
then because of the New York Times
worrying about OpenAI actually like
allowing users to access copyrighted
material, saying do they should not be
allowed to use the delete your data is
kind of a ninja move. I think it's kind
of like you're both forcing OpenAI to
actually have to answer to accusations
around copyright, but you're also kind
of screw if this holds this actually
hurts OpenAI even more from a privacy
perspective cuz the branding element
that they're holding on to all of your
chats as we've talked about at length,
people are getting more and more
personal with chat GPT and if that
actually that's a very sticky icky point
from a product perspective. So if people
start feeling a little ickier about it
and like a little more uncomfortable
because they know that that data is
always living somewhere that actually
could be like a double-edged threat on
Open AI coming from the New York Times.
I wonder if they're that strategic about
it, but I don't know. Doesn't that make
the New York Times then a bad actor for
doing that? Just like imperiling
hundreds of millions of users for like a
a W. I like it. I like savage New York
Times coming in in the cage match. I
like if they're if they're if they're
acting that savagely, I kind of like it
in this one. Could I say one way that
OpenAI could have avoided all of this is
I guess uh not called the New York
Times. We we don't know the answer right
now because the court case is still
going. But like come on.
like maybe talk to the Times before
putting some of their material in your
large language model. Yeah. But they
they can't do that. They feasibly cannot
talk to every single publisher y and
have a conversation have a have a
request like their business model is
dependent on not having those
conversations and they're going to have
I think they do licensing deals with
like Reuters a couple others and they're
going to have it a high level but like
if that becomes the absolute norm and
expectation then crawling margins and
big technology we should they should
have to ask us first like can you
imagine the the level of team you would
need to make that happen. Spirit of the
law or spirit of the situation. Do you
think open? Yeah, cuz let's put the law
aside for a moment. Let's talk purely on
spirits here. Spirits. Uh, it's Friday.
Do you think the times is right to tell
OpenAI not to crawl the stuff? Like I
don't know. Are people really could open
AI, you know, effectively crawl that
information and transform it? Um,
they're not like I don't think they're
just copying and pasting the New York
Times and making it available in JPT.
So, is there something actually all that
wrong with what OpenAI is doing? Well,
we've seen this over and over on the
publisher side like perplexity in
Forbes, but perplexity is even kind of
presenting an image and a very long
summary of paywalled content. Open AAI,
same concern. Well, the New York Times
had shown that they can almost verbatim
recreate stories on Chad GPT. So on one
hand, obviously that's a massive threat.
But then on the other, like could you
argue that the New York Times as people
migrate more towards these platforms
actually suddenly is left out of the
conversation perhaps as well. So like I
think in this I don't know like I think
asking forcing them to not delete chats
because some of them might have shown
people trying to bypass the New York
Times payw wall. That is ridiculous from
like a pure like that feels like legal
ninjutsu. But again, if the gray lady's
jumping off the top rope and dropping an
elbow, like I kind of like it from a
purely like succession style business
war standpoint, I like it. You're all
about that fight, Ron John. You love the
New York Times open AI dropping elbows
on each other's faces, but Trump were
fighting. Whatever. I was expecting
that. Musk Trump. That's easy. Open AI.
The main
event. Yeah. All right, Ranjan, great
speaking as always. I wish we had two
hours. This is just a great
conversation. Let's do it again next
week. See you next week. See you next
week. All right, everybody. Thank you
for listening. MG Seagler will be my
special guest WWDC week. We'll record
right after the event and have that up
for you on Wednesday. Also, stay tuned.
Maybe we do a solo pod from the event.
And then Ron and I will be back on
Friday to break down the week's news.
Thanks for listening and we'll see you
next time on Big Technology Podcast.
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