Mass AI-Driven Unemployment, NVIDIA Surges, CEOs' AI Avatars Unleashed

Channel: Alex Kantrowitz

Published at: 2025-06-03

YouTube video id: GGbo7yAdOuU

Source: https://www.youtube.com/watch?v=GGbo7yAdOuU

Welcome to Big Technology Podcast Friday
edition where we break down the news in
our traditional coolheaded and nuanced
format. We have a big week of news to
speak with you about today starting with
the prophecies of anthropic CEO Dario
Ammoday that we're about to see mass
unemployment due to AI. We'll also touch
on Nvidia earnings. We'll talk about
this partnership between Meta and Andrew
to build these war VR goggles which is
quite interesting and might signal a
shift in Silicon Valley. And of course,
we're going to talk about CEOs
dispatching their AI avatars to their
earnings calls and maybe they will come
to a meeting near you. Joining us as
always on Fridays to break down the news
with us is Ranjan Roy of Margins.
Ranjan, good to see you. Welcome. Well,
at least when I lose my job to an AI
avatar, I will have war goggles. So,
this week makes me feel better. It is
interesting. Every time we talk about AI
technology, there's this combination of
will it work, won't it work, and this is
going to be great and this is going to
be terrible. And I think we're just kind
of hitting all of those emotions in one
uh this week. And so let's start with
this prophecy from Dario Ammoday, the
CEO of Anthropic about what is going to
happen uh to white collar jobs. He tells
um he tells Axios that there's going to
be a white collar bloodbath. Uh he says
AI could wipe out half of all
entry-level white collar jobs and spike
unemployment to 10 to 20% in the next 1
to 5 years. He said AI companies and
governments need to stop sugarcoating
what's coming. The possible mass
elimination of jobs across technology,
finance, law, consulting, and other
white collar professions, especially
entrylevel gigs. So let me just turn
this to you uh right away Ranjan. I mean
50% of all entry-level jobs within 5
years. I don't think that this is
entirely out of the realm of
possibility, but wouldn't you agree that
this would have to just be like it's
weird to say best case, but the best
case for this technology, the best case
scenario for this technology in order to
come anywhere close to that would have
to, you know, meet and exceed all of our
expectations to actually be able to do
something like this. Yeah, this still
feels a bit like marketing hype for me
and I think to me if we break it down to
a couple of different pieces. Yes, I
think the jobs of today are
fundamentally going to change. I'm a big
believer that especially white collar
work which was not threatened in the
same way as more bluecollar or
manufacturing type work in the last 30
years is going to be threatened. I
actually my my theory on this is
entry-level jobs are actually going to
be safer because they're going to become
different and the type of workforce
that's going to be entering the market
is going to be a lot more AI native than
a lot of existing especially more senior
people. So if I'm junior if I'm entering
the workforce I would much rather be
entering now than uh 10 to 15 years ago.
Okay. And I think uh I hear some music
in the background. What is it? It might
be.
[Music]
Oh, is it hype or is it true? We got the
facts. We'll talk to you. Turn it up.
Now, we'll show you
how. We got the scoop. It all What's
that? that we're hearing. Oh, is this
the It can't be. It's the hype or true
jingle.
Uh, listeners cannot see. My jaw is on
the floor. Alex just took the worst name
game of all time. And I guess we're
doing this. I guess we're making a thing
out of it. I ran it through AI. And we
are in the thick of it. Hype or true.
Dario Ammoday's prediction that 50% of
entry-level jobs will be wiped out. So
let me take the other side that this
isn't marketing just for the sake of
conversation, right? I mean we are
seeing this technology improve
dramatically. Um and we're also already
seeing some evidence that it's harder
for um people coming out of grad school
to get jobs today. Uh, and AI is
definitely in the workplace, especially
in areas like coding for instance, and
we're going to talk about it in a
moment, but Amazon, for instance, is a
company that has smaller teams
responsible for the same amount of code,
um, just with like less people to do it.
So this idea that if the technology
keeps improving the way that it is and
we go into this world where we do get
agentic technology um then and we do get
AI that can go out and do the deep
research for us with fewer
hallucinations. Uh maybe it's not so
crazy that Daario who sees the
trajectory is going out there and
telling us that hey listen this might be
an issue. No, but again, I still look at
this as it self-interested in the idea
that Anthropic is a company that
directly benefits if that is the truth.
But to me, I mean, we just mentioned
coders or software engineers or
developers. That job at that the scale
that it is today didn't exist nearly in
the same way 20 years ago. So, to me,
it's just going to be a shift. And maybe
it's a little bit overly optimistic. I
do think his call that like governments
or the civil civil society needs to
recognize that things are going to
change is important and I do think there
needs to be genuine conversations around
this but again jobs change people adapt
and I don't know maybe maybe I'm too
hyped up from that song that you just
played but uh if we're talking about
innovation in what other world could we
have a hypertrue jingle that quickly
that's that's a net positive for
society. That's all I'm saying. I think
it's already just because we have that
jingle, it's already outweighed all the
negatives of all time um that we might
see with AI. But Dario uh in his
conversation with Axios actually goes
through step by step how he sees this
happening. And yes, innovation always
creates job loss and job creation. But
the idea is that this technology is
potentially so powerful uh that it just
puts this process on steroids or as you
said last week on acid. Okay. So here's
the step by step. Number one, OpenAI,
Google, Anthropic, and other a large AI
companies keep vastly improving the
capabilities of their large language
models to meet and beat human
performance with more and more tasks.
this is happening and accelerating. The
US government worried about losing
ground to China or spooking workers with
preemptive warning uh says little. The
administration and Congress neither
regulate AI nor caution the American
public. This is happening and showing no
signs of changing. Most Americans
unaware of the growing power of AI and
its threat to their jobs pay little
attention. This is happening too. So, do
you have an argument that any of those
three steps are uh incorrect?
I would actually still again argue with
number one, but that's more of a just
improvements in large language models I
don't think is going to actually see
adoption in implementation. I don't
think that's the issue or the problem. I
think there's a lot of other points of
resistance. So, I disagree with that
one. I like number two, the idea that to
avoid spooking the population. I mean,
it's a good little conspiracy theory.
That's a great conspiracy theory. Yeah.
And I mean again it seems completely
plausible in the political climate. But
again in number three I think unaware of
the growing power of AI. This is where I
would actually vehemently disagree that
AI the promises made by the industry are
at such a scale that it's my again my
mom whenever I go home she's like so
what do I do with AI? And she's retired.
And like I mean it's to me it's not that
there's a lack of awareness. It's just
there is a lack of actually adoption and
implementation. I do think it's not
because of a lack of awareness. I think
it's because of a lack of how focused
these tools are. We've been talked last
week about how anthropic and claude are
going to potentially move much more
towards coding and software development
which shows that it's not working in
other areas. So overall, I don't know.
May I, as regular listeners know, I can
be a bit cynical about a lot of topics,
but I genuinely don't think it's as much
of a threat as he's making it out to be.
Yeah, this is the part where I started
to veer more into the hype side. Uh,
where he says, "Then almost overnight,
business leaders see the savings of
replacing humans with AI and they do
this in mass. They stop opening up new
jobs, stop backfilling existing ones,
and then replace human workers with
agents or uh related automated
alternatives. Uh I think this just
completely underestimates how uh change
management works in most companies and
how slow most companies are at
implementing even the most helpful
software. And this idea that this could
happen almost overnight to me is
far-fetched. Now, is this something that
you could see happen over 20, 30 years?
If the technology keeps accelerating at
the pace it's been accelerating, which
is an open question, maybe. But this
idea that we're going to see it within 1
to 5 years, that just doesn't really
seem to meet the reality test for me.
Yeah. No, I completely agree because
Daario came from he had his PhD at
Princeton, I think, working one of his
two PhDs. Yes. Yeah. I mean, two PhDs,
that's not in terms of not needing to
learn about change management in
organizations. I think that's like a
pretty clear idea. And then the other
he's the CEO of a multi-billion dollar
company right now, so I won't take that
away from him, but Okay, fair. Fair. I I
won't. But the the the part that he's
missing in that whole thesis is growth.
that it's it assumes kind of like a a
steady state of economic output and then
underlying that there's fewer jobs. But
if we take the other side and again the
more optimistic side that this actually
unleashes new waves of growth and new
types of companies, I think uh then new
jobs are created. There's different
types of jobs are created. So I think I
never thought I'd be this optimistic but
uh on this one I I still believe still
believe it is interesting to me that he
is taking that pessimistic
uh perspective given where he sits like
he doesn't believe that if you are an
entry-level developer rather than a
company like not hiring you his tooling
could help make you a 10x developer and
then help the the company grow uh much
further than if you weren't there. So,
uh I think that is pretty telling and um
there was a great telling in terms of it
falling on the hype uh perspective. And
there's this uh kind of great/funny CNN
article uh by this woman Allison Morrow.
She says the white color blood bath is
all part of the AI hype machine. Uh she
says, "If a CEO of a soda company
declared that soda making technology is
getting so good it's going to ruin the
global economy, you'd be forgiven for
thinking that person is either lying or
fully detached from reality. Yet when
tech CEOs do the same thing, people tend
to uh perk up." She says, "The point is
that Amod is a salesman and it's in his
interest to make his product appear
inevitable and so and so powerful it's
scary." and Axios framed the economic
pred prediction as a white collar uh
bloodbath. He stands to profit off the
very technology he claims will gut the
the labor market. But here he is telling
everyone the truth and sounding the
alarm. He's trying to warn us he's one
of the good ones. Yeah, actually that's
a really good point. I think if you have
this technology and you're genuinely
worried about it and you are the CEO of
a multi-billion dollar company, either
you are the most altruistic person alive
or you're doing it for self-interested
reason. Again, soda CEOs did not tell
the world that our soda will become so
addictive it will unleash a wave of
obesity. It just happened and people
made money. Like I think the idea that
I'm going to I don't know is he trying
to risk the entire business of anthropic
by saying this. I think it's it's good.
We've seen this for three years now.
AGI, ASI, AI like killing all of
humanity is a threat now white collar
blood bath. I think that that it works
from a marketing perspective. So we'll
keep seeing this. Okay, let me one more
time try to make the case for Ammo Day
and then we can move on. I think if
you're being super charitable to his
perspective, you would say he's
interested in building AI that's going
to have a big impact on the world.
Things like he talked about in this
interview with CNN, curing cancer and
helping us with uh medical applications,
creating abundance, but he also sees
that there's going to be a downside. and
maybe he truly believes and I don't know
does is there 100% chance that he's
wrong in this that he believes that his
technology will have uh an impact and if
you do believe that then maybe it is in
your interest to go out and say yeah
there could be problems and in terms of
being the one that's developing it well
uh I think maybe there is something to
be said about being the person who wants
to develop develop the technology and
steer it in a way that's impactful
versus destructive all right I I I will
actually I'll end on a charitable note
as well. I think on the topic of
regulation, Amade came out when there's
this proposed 10-year moratorum on any
kind of AI regulation and he said that's
not a good idea. So, in fairness, he is
uh he is advocating for at least some
kind of steering the industry in the
right direction. Okay. And I think we
should talk about what happens in the
near term, which is not necessarily
going to be uh job loss. Uh but in some
companies, and I think in some companies
that aren't really viewing this the
right way, it will be a change of job.
Uh one that will require put like
harsher requirements on employees uh
versus um one that will sort of free
them to do higher impact work. And this
is the thing that I hinted at at the
beginning of our discussion about
Amazon. Uh this is from the New York
Times. Very interesting story at Amazon.
Some coders say their jobs have begun to
resemble warehouse work. And the article
says the more immediate downside of AI
for software engineers appears to be the
change in the quality of their work.
Some say it's becoming more routine,
less thoughtful, and crucially much
faster paced. Three Amazon engineers
said that managers had increasingly
pushed them to use AI in their work over
the past year. The engineers said that
the company had raised output goals and
had become less forgiving about
deadlines. It had even encouraged coders
to jin up new AI productivity tools uh
at an at an upcoming hackathon. One
Amazon engineer said his team was
roughly half the size it had been last
year but was expected to produce roughly
the same amount of code using AI. So is
this kind of what the world looks like
where companies say you no longer have
these long timelines to build the thing
that you want to build uh because
effectively I know that you can use AI
to build it. We've seen similar things
from Shopify, for instance. You know,
the AI first company episode we did a
couple weeks ago kind of hits on this
idea.
I I have a hard time feeling sympathy. I
know Amazon is a rough culture, so like
an aggressive culture and many often in
a good way. So, I'm not I'm guessing
those were not cushy jobs, but yes, work
is changing. This is happening. Like
even the idea it's like they were
encouraged to come up with the AI tools
at an upcoming hackathon. That's not
bad. That's like people like in your
interview where with Sergey Bin the
other day, he said this is the most if
you're a computer scientist, this should
be the most exciting time for you. I
actually would expand that that if
you're at all in interested in
technology, this should be the most
exciting time for you. And yes, for
software developers and coders, work
will look vastly different. It was a
good 20 to 30 year run. It's not going
to be the same for the next 20. And
that's okay. Yeah, I think that's that's
a very good perspective. And definitely
as someone who's following this stuff,
it is definitely the most exciting time
uh I've experienced covering this stuff.
Uh okay. So, but but what about this? um
maybe about maybe you don't have time to
think as deeply about projects as you
did. This is again from the story. The
new approach to coding at many companies
has in effect eliminated much of the
time the developer spends reflecting on
his or her work. This is when developers
say or no sorry this is a an analyst. It
used to be that you had a lot of slack
because you were doing a complicated
project. It would take a month maybe two
months and no one can monitor. Now you
have the whole thing monitored and it
can be done quickly. So maybe this idea
can can we end up seeing less deep work
or less reflection and then bigger
thinking because uh you have to do
things so quickly uh and be so reliant
on the AI to program for you. I I think
that conflates two different things cuz
on one side almost by definition this
should allow for more deep work. This is
taking care of the more monotonous
repetitive things people did instead of
having to rewrite an entire codebase
from scratch. that like that kind of
work you're able to do the question of
monitoring work that that's to me not an
AI question that's a culture question
that's a technology question that's
increased dramatically especially since
the pandemic and when more work is being
done on and digital surfaces so I think
uh I I think those are two different
things and I think some companies like
in Amazon will very closely monitor And
that's that's how it works. And other
companies will work differently. But but
again, to me, AI almost by definition
should free up more time for reflective
deep work. Yeah. And it is kind of
interesting that I guess a company like
Amazon will just say, "Okay, now you're
kind of like um you know, the delivery
driver with the AI systems monitoring
your every move and every second
optimized to a te." I mean, yeah,
probably the people who built those
systems to monitor the delivery drivers
are now getting are the ones anonymously
being quoted. Yeah. Yeah. Uh can't say
you're surprised. Uh so, but meanwhile,
we're going to have an opportunity to
really figure out uh what's going to
happen because the surge in
infrastructure building shows no sign of
slowing down. We saw this in Nvidia's
earnings that came out this week. This
is from the Wall Street Journal.
Nvidia's business is booming despite
being shut out of China. The company's
revenue reached 44 billion for the first
fiscal quarter. For its first fiscal
quarter, a 69% increase that was
curtailed. So limited to just a 69%
increase that was curtailed by
Washington's new limits on China chip
sales. Uh the company was unable to ship
$2.5 billion of its uh H20 processors
and projected an 8 billion uh $8 billion
in loss revenue for the current quarter
due to that policy. So that's lots of
money uh lost to China and uh and or
lost to not selling to China and the
company is still growing yet uh we still
see a tremendous amount of spending
coming in from the tech giants
Microsoft, Amazon, Alphabet, Google and
Meta. uh they are all going to be
boosting their spending on AI and
analysts expect combined spending by
those four companies uh so yeah four
wait Microsoft Amazon Alphabet and Meta
those four companies uh to alone top 345
billion this year up 41% from last year
and the data center business is going to
be up uh surged 73% over last year to
39.1 billion so two things here Ranjan
and obviously Nvidia is healthy no doubt
about that uh even with the China stuff
it's still growing uh tremendously and
then second like if scale is going to be
one of the ingredients that make these
model makes these models better we're
still in the finding out stage like this
infrastructure is still just booming
Javon's paradox welcome it it it appears
to still be the reality I think the the
we've seen more and more about again to
reference the Sergey Brin interview
again I really liked he said it's going
to be algorithms rather than compute
that create the next round of advances.
So I think like how the actual modeling
works and how these things are built
could change and it appears to be
changing but as of today May 30th
2025 everyone's playing the same game
and it's a compute game so that's
definitely not changing and deep seek
but that this is a 6 to 12 to
24month thing that we'll see rather than
deepseek happened and then uh it's going
to you're going to see a cut in spending
the next day. Do you think that the
export restrictions that I just
mentioned are working uh when it comes
to restricting the exports to China?
Now, Jensen, of course, is going to be
against them because there's lots of
money to be made if he can sell to
China. But this is from Bloomberg. He
said, uh the Chinese competitors have
evolved and um they've become quite
formidable. Speaking specifically of
Huawei, uh he's talking about uh uh you
cannot wait. So, so speaking of uh
specifically of Huawei, he says the
latest AI chip is similar to the
performance of Nvidia's H200 chip, a
component that was state-of-the-art
until its replacement in recent months.
You cannot underestimate the importance
of the China market. Wong said this is
home to the of the world's largest
population of AI researchers. Uh and he
basically says like you know it's
important for the US to at least be in
there and be steering the way that they
do it as opposed to restrict them and
then they're going to go ahead and do
what they want anyway on almost as good
technology. What what is your
perspective here? Yeah, I think again
the the details of our export
restrictions working are difficult for
me to like I mean very directly say but
I think overall I mean that idea that I
mean Nvidia to expand seeing in
increased competition from Chinese
suppliers it's definitely going to be
it's it's going to evolve pretty rapidly
and now we have a new deepseek model
speaking of English. So, this uh came
out this week. There's a new upgrade to
Deepseek's R1 model that the company
says uh reasons better and hallucinates
less. The Chinese start of Deepseek said
Thursday that it up its upgraded
artificial intelligence model can
perform mathematics, programming, and
general logic better than previous
versions. Its overall performance is now
approaching that of leading models like
OpenAI's 03 and Google's Gemini 2.5 Pro.
This is according to Deepseek in a post
on the AI model platform Hugging Face.
So Deepseek still keeping keeping pace.
It seems like Deep Seek's still
deepseeking. I think it's a reminder
like the competitive dynamics of what's
going to happen are still completely in
flux in a good way. I think we're going
to see more and more competition at the
foundation model level. And I think this
is just a reminder that like we just
came off a couple of good weeks of
Google IO and uh OpenAI announcements
and all these kind of things, but uh the
competition is going to be there and
only increase as long as those Nvidia
earnings are so juicy. Their margins are
uh what's the Jeff Bezos thing again?
Oh, their margins are our opportunity.
Exactly. All of our opportunity. Yeah.
Yeah, that's right. So, just to sum up
this this uh segment, so um I think we
both agree that Nvidia still has a lot
of room left to run in terms of being
able to sell its chips and produce them
and there's no sign of slowing down.
Like if you're thinking just about the
hardware uh side of the AI trade, uh and
of course Nvidia has software that you
use to train the models, but like
thinking about the thing that makes them
the most money, that's in good shape.
It's in great shape. It's in incredible
shape. That has not slowed down. And I
know there's a lot of talk after
Deepseek that it would, but it hasn't
yet. So there will be more Deep Seeks
and I think I I I feel very confident in
saying that. Okay. And let me ask you
this. As Deepse seek um continues to
rise, is there going to be any value in
building these proprietary
models? Returning to one of our old
questions. Yeah, that's uh I still
believe that overall increased
competition will see uh commoditization
at the model layer. I believe that uh
the one model to rule them all, one
giant model is going to wipe out 20% or
50% of white collar jobs. Like I I just
don't see that happening. So yeah, I I I
think the model air will get
commoditized. What about you? Yes, for
sure. And maybe that's why we see these
big statements. It's not the model, it's
the product. No, I think better. No,
this there's nuance here. Better
commoditized models will lead to better
products. It's not about it's so
interest. We have this debate all the
time actually. I think we're just going
to converge here. You want better models
and better products. I guess the
question is what drives the improvement
in the AI industry. I think yeah, even
if the models are commoditized, then
better models are going to matter more.
What leads to the white collar blood
bath? Yeah, exactly. Better models and
better products. Okay. Uh, by the way,
just one quick note, I mean, Lord
Almighty, Meta, there was a story this
week how Meta's lost lots of u of its AI
researchers and um and yeah, as Deep Sea
continues to surge, the conversation
around Meta Lama models has certainly
fallen off in a big way. And I I mean,
they've made some changes to their
organization this week, minor ones. Uh
but I would watch that space very very
closely. Yeah, I think uh I mean yeah
where metal still lives in this is it's
interesting because they actually
managed to be maybe I have to support it
more product focused it sounds like they
separate out the research conversation
from the product conversation which is
kind of a reminder there is they're a
pure consumer company and they're able
to separate the two. So meta AI, meta
ray bands, all these things you don't
really see or hear as much hype around.
I don't even What llama are we on now? I
can tell you four. Okay. Yeah. But don't
we think that if their models were
better then people would be using their
chatbots more. I mean they have bet a
lot on voice and their voice AI is just
not as on par with meta is pretty good.
Meta AI is pretty good. And I say that
with a like it's I think it's on par. I
You're the first person I've heard I've
heard say that. So, uh but maybe I'm not
asking enough people. All right. Yeah.
You're you're not asking the Metacrat.
See, this is why maybe they're going
after the everyday consumer while we're
uh talking to the the people who
actually use and stress test anthropic
open AI. True. Gemini. Yeah. It's a
great reminder for for reporting on this
stuff. It's important to look outside of
New York and and San Francisco. Um, so
to the people using meta AI, but I still
think that the meta AI is not as good.
So, yeah. Okay. Uh, all right. So, we're
going to talk a little bit about this
very interesting Grammarly story. But
before that, let's just talk a little
bit about this other area that Meta is
going down, which is that they are going
into uh defense tech with a very unusual
alliance, shall we say? This is from the
Wall Street Journal. Meta fired Palmer
Lucky. Now they're teaming up on a
defense contract with him. Uh Meta
Platforms had a messy split with its
virtual reality chief Palmer Lucky. Now
the two have reconnected to build
high-tech headsets for the US Army. Ly's
defense company Andreal and Meta said
Thursday that they will together build a
line of new rugged helmets, glasses, and
other wearables that provide a virtual
reality or augmented reality experience.
Kind of the details of the system is
crazy. Here, I'm just going to read
this. The system called Eagle-Eye will
carry sensors that enhance soldiers
hearing and vision, detecting drones
flying miles away or citing hidden
targets, for instance. will also let
soldiers operate and interact with AI
powered weapon systems. Android's uh
autonomy software and Meta's AI models
will underpin the devices. I think this
is a very interesting story. It shows of
course Silicon Valley getting like fully
getting back in or getting into war
technology uh in a way that you wouldn't
see from like let's say Meta or Google
years back. Uh and this device itself is
kind of interesting to me as well. What
do you make of this partnership RJ?
Well, first, is this the first mention
of the term war goggles on this podcast
ever? This is our first Well, we had
Polymer Lucky on, so I have to check the
transcript for that, you know, just to
see that. Um, we've definitely talked
about defense tech, but uh this is this
is definitely a new product. Another war
goggle war goggles. It's a war goggles,
baby. Yeah, war goggles. I like it. I
like it. I mean the question of this is
another one where Silicon Valley was
founded on like defense technology. So
much of our American innovation was
founded on defense technology. And to me
I guess I yeah I don't have a hard time
stomaching this. I think it's not a bad
thing to have the technology industry
close to the defend defense industry and
companies like Anderl and others are
definitely you know defense first. So
yeah, I think I'm genuinely curious of
like how crazy and cool this technology
is and I mean I know it is for war, but
yeah, I think innovation often has
started in the defense sector and if
we're going back to that, it's not the
worst thing. Yeah. Who do you think made
the first call, Palmer or Zuckerberg?
That is the more important question I
think. I I have a feeling on this one.
Oh, no. You You have an answer. Um, no.
No. You go first. You go first. I think
it had to have been Zuckerberg. I think
Palmer uh clearly did not like what
happened to him at Facebook at the end
there and he wasn't going to go pitch
Zuckerberg on this idea. I think
Zuckerberg saw that he had lost tens of
billions on Reality Labs and sort of
needed a new way to do it. He's also had
this like sort of uh political rebirth
Zuckerberg and is now uh someone who
seems like he'd be open to this stuff
more than he was previously. I have to
say it was I almost certainly believe
that it was uh Zuckerberg uh who made
the call and Palmer gives him uh some
edge or cool factor that he he wouldn't
have without Palmer. I think he needed
Palmer more than Palmer needed him.
Okay, I I buy that.
What? Again? Oh, again. Yeah. Yeah. No,
no. Actually, that's that's a good
point. I think
uh actually, have we seen Cool
Zuckerberg in any kind of virality or
memes recently? Has he not been posting
less? I feel there was like a a wave of
time where he was just, you know, the
handsome Mark Zuckerberg with a chain
singing with T Payne. All these things
were just like every week. has that died
down or I think that probably coincided
with the ascent of Meta's Llama project
and after Deepseek we haven't seen
anything like that or less we've seen
less of that so I think he's feeling
himself less these days than he was
before. Okay. Okay. Well either way I I
will agree with your who called who
theory. I think uh Zuck had to call
Palmer. Okay. So, I definitely want to
um get to this Grammarly story that you
mentioned. U so let's talk about that.
We might have time to talk about Elon
Musk leaving the Trump administration
and we definitely want to get to this
story about CEOs using their avatars to
deliver their earnings reports. So,
let's do that right after this. And
we're back here on Big Technology
Podcast Friday edition breaking down the
week's news. So many fascinating stories
to talk about this week and one that
popped into our document just as we
started to record courtesy of Mr. Ranjan
Roy is a new interesting story about
Grammarly's funding and a new funding
model that they are uh deploying.
Grammarly of course the AI uh related uh
or the AI grammar
correction or uh clarification tool. Uh
very interesting. Raj, why don't you
lead us lead that story for us? Okay, so
I see the headline. Grammarly has raised
$1 billion, which is still surprising,
but not not like inconceivable in the
current market. They definitely have
been positioning themselves as more AI.
But then the more you read about it, I
realize all this talk about AI and
technology, we're forgetting about
America's greatest innovation, financial
engineering. because this
story was I I I did not know this model
existed. So, Grammarly did not raise $1
billion in the traditional sense we all
talk about of equity. They secured a $1
billion commitment from General
Catalysts Customer Value Fund, CVF. The
way this money works is it's
non-dilutive. It's not equity. It does
not affect the cap table at all. And
basically they are allowed to now use
this $1 billion to spend on customer
acquisition on sales and marketing. And
then any revenue they generate from the
money that they put in from this this
pot of money, the return goes back to
General Catalyst up to a certain point.
And those details weren't leaked. But
again, it's basically a loan for your
marketing budget, which any online
business, the customer acquisition cost
or CAC and then payback periods. These
are the things everyone talks about all
the time. And that if you have a
relatively predictable model like that,
it's so fascinating to me and it
actually like is one of those that I
think will catch on because the more
businesses have like very predictable uh
cash flow models like this or
acquisition models and payback models,
it makes sense that we want to scale our
revenue dramatically. Rather than
diluting our cap table more, we'll take
money in from general catalyst. What's
interesting though is apparently the
they do not have to pay general
Grammarly does not have to pay back the
money if it does not see the return. So
it's quite a bet but it's capped up to
in previous examples Lemonade the
insurance company they had public
filings on this that they had received
similar money and uh it was that they
were able to pay up to 1.4x 4x the
initial uh investment. So a 40% return.
That's fascinating. Basically, yeah,
basically funding is changing. This is
like I've never seen this before. I I
really think this kind of funding model
could be used at so many different
companies and it just made me remember
America's greatest innovation. For all
the large language model stuff, this is
where we're the best. So do you think
Grammarly has their marketing
operations? so dialed in that they could
like legitimately go $1 spent, $140 made
and put a billion dollars in to
increase. I mean, it's the TAM is like
must be crazy. How many people need AI
tools to correct their grammar? Well, so
they they've definitely evolved into
more general AI, I believe. I'm sure
they're going to be like kind of like
moving more into overall just uh AI
solutions for companies like I mean
you're not taking in that kind of money
which is riskier because it's a less
predictable revenue stream but uh but in
terms of do they have a predictable uh
model for this they've been around for
14 years I the amount of like upsell and
if you've ever installed it and didn't
pay for it the number of emails you get
from them and uh that they're they're
very good at that uh entire life cycle
marketing. So I think for the
traditional product, they probably have
a really really good uh model. I think
whatever direction they're going to try
to move in this new AI world, it's going
to be interesting. But to me, again,
they don't have to pay it back. So
that's up to General Catalyst if it
doesn't work. Yeah, I think it's a very
risky bet. And here's my hot take on
Grammarly. I think they're going to go
extinct. I think I wouldn't call them a
rapper because they were around before
large language models, but all this
logic that they painstakingly built into
their programming, all the AI
development that they did, you could
legitimately just drop an article into
Chat GPT and ask it for grammar and
usage uh and spelling uh uh checks and
it does a marvelous job. I am no longer
using Grammarly. I'm just using chat GPT
for this and it's even better than
Grammarly was. Yeah. Well, I completely
agree with that. So, apart from the
fascinating element of the financing, I
do agree that a grammar checker, I don't
see how that remains, how it still
works. But again, they I'm sure they're
expanding into new like content
generation efforts and stuff. if you
have it plugged in, if it's already
evaluated your writing. I would hope
that there's there's other areas on
productivity, but it's a risky one, but
I'm glad to see some uh some activity in
the whole financing space. Yeah, this is
definitely interesting. Not even
activity, man. What they're 14 years
old, but they're going to raise a
billion. I don't know. I actually
certain point you got to figure it out.
They were valued at $13 billion in 2021.
uh off of a $300 million raise or $200
million. They had some insane multiple.
Um so to their credit, they they stick
around. They they got the COVID bump
things came off a bit. Now they're doing
this. So this is a company. It's like a
it's a financial vehicle disguised as a
as a grammar checking tool. My favorite
kind of thing. That is your favorite
company. Absolutely. All right, let's do
a couple minutes about Elon leaving the
Trump administration. Um, he his time to
be a special government employee is
coming to an end. That's 130 days. Uh,
he's leaving. He's going to focus more
on his businesses. He wrote the Doge uh
mission will only strengthen over time
as it becomes a way of life throughout
government. But he also said that the
spending bill making its way through
Congress undermines the work that Doge
is doing. uh since it's adding I think a
lot well it's adding billions at least
billions to the deficit or trillions
even
um the New York Post writes so going to
go to a conservative outlet to sort of
touch on this how did the New York Post
cover this with a story that Tesla
shoulder shareholders are demanding uh
Elon Musk work 40 hours per week uh amid
a crisis and they sent a letter to uh
the Tesla board chair saying that the
board must require must to spend a
minimum of 40 hours per week at the
company and adopt new governance
policies that would limit uh director's
external commitments. They also called
for a formal CEO succession plan. I
guess look, it's indisputable that um
Elon Musk's time in the government uh
did not really end up being a good thing
for his companies. So, Ranjan, I guess
the question for you is twofold. One,
did it work inside the government? to
Doge work in any capacity. Uh, and two,
can he now reverse the damage he's done
to the companies? On number one, I think
I have to imagine most people are in
agreement that it did not work. Um, I to
me the more fascinating part is
how just antilimactic the exit was. Like
I mean if just if we go back to the the
days of February and March, I mean the
level of intensity and energy around the
Doge conversation and then it just kind
of fizzled away with doing a lot of
damage along the way but you know like
certainly in terms of the savings that
were promised the trillions none of that
happened. I think I the interesting
question is what happens now to the
Teslas of the world and uh SpaceX and
stuff. I think I don't see the reput the
brand and reputational damage you can't
just undo especially with uh with Tesla
being a like if it was a more
progressive brand before the typical
owner at least was more progressive and
environmentally focused. I don't see how
you get that back. If they're to just
kind of actually launch some just wildly
industryleading products, I think that's
interesting. But I don't know. I think
there's long-term damage that's going to
be tough to undo. What about you? Yeah,
I definitely think there's going to be
long-term damage at the companies and
but we'll see. I think that we tend
people tend to be quickly forgiving. I
don't know, not always when it comes to
a business leader uh entering politics
in this way. Uh but to me, I think one
of the interesting things is the way
that this did come to an end. It was a
fizzle, not a breakup with Trump, if you
know what I'm saying. Like a lot of
people expected this to blow up, but
Musk has also said that he plans to keep
his small office at the White House.
Trump said he's going to be involved. So
I think that the thing that really did
Musk's uh effort in uh was politics.
Like it turns out that politics is
political. And there's a you know when
you're trying to change a system the way
that he tried to change it. There are
certain people you have to win favor
with. And he ended up sort of sparring
with a lot of cabinet secretaries in a
way that sort of ended up dooming uh the
the initiative. Now, we're going to have
Bill Vass on who's the CTO of Booze
Allen in a couple weeks, and he's going
to talk a little bit about the way that
these Doge priorities live on in terms
of getting the government to use
technology to be more efficient. Uh, but
ultimately, uh, the the Doge era, Elon's
Doge era fell far short of the goals
that even he set. And I think that is
just the bow you tie on it.
The bow you tie on it. I think that's
the uh best interpretation of this.
All right, let's close this week with a
discussion of CEOs sending their AI
avatars uh to deliver the earnings
report. So, uh Sebastian Shimanowski
who's been on the show, the CEO of CLA,
he this is from Techrunch, he's leaning
all the way into the idea that his buy
now pay later IPO bound startup uh is an
AI company. When Clara delivered updated
quarterly earnings on Monday, it was his
AI avatar that presented the highlights
according to the company's YouTube
video. And then after him, Zoom CEO uh
Eric Juan uh he followed suit using his
avatar for initial comments. He deployed
his custom avatar via Zoom clips, the
company's asynchronous video creation
tool. He says, "I am proud to be among
the first CEOs to use an AI avatar uh in
earnings calls." He said, or rather his
avatar said it's just one example of how
Zoom is pushing the boundaries of
communication and collaboration. Is this
like just a sign that all business
communication is sort of worthless and
most of it is sort of worthless and
we're just going to end up having people
send their avatars to meetings instead
of themselves? Well, okay. I think three
things. One, I think uh I got to respect
Clara CEO more because he just did it
even and it obviously helps with the
overall AI branding a bit, but it's not
like product related where Zoom tried to
make it more of a product demo saying
that we're using Zoom clips to actually
make this. It's just one example of how
Zoom is pushing the boundaries of
communication and collaboration. So,
that was a little bit too salesy and
promoy. I think that uh your point that
does this show that business
communication a lot of it was pointless
anyways. I think yes to me earnings
calls the CEO reading out the scripted
part never made sense to me. Just send
out the scripts and take the extra 15
minutes for the questions. That's the
only important part. So, this actually I
actually kind of love it because it
shows the uselessness of the CEO ever
actually delivering those remarks. So, I
think uh I'm I'm I'm not pro Avatar. I'm
pro make business communication
worthwhile for everyone and don't waste
our time. I mean, did you see some of
those VO news clips? Like, what else
could you AI avatarize? Like, is it
going to be news anchors? I mean, if it
can be a CEO reading uh reading the
earnings report, can it just be news
anchors as well? Like, where does this
end? No, but to me, scripted
language maybe.
Yeah. No, no, but it does not need to be
video necessarily. The earnings calls
are the perfect example. News reports as
well. Maybe if it's a scripted news
report, not natural interview or
conversation or kind of like genuinely
valuable uh piece of information that
has like emotion tied to it, then it to
me it's more if you can do that with an
avatar, maybe it did not need to be done
in the first place. I think the same
thing with like generative AI overall. I
think we're going to find a lot of
written communication that starts to get
be uh you know generated by AI. In
reality, the discovery will be we didn't
actually need that communication. Yeah.
A lot of this was kind of like proof of
work, right? It's like you write a
recommendation letter. Who cares what
the recommendation letter says? You took
the time to write it. And that's what AI
sort of minimizes now is that it's just
like, okay, well here's a letter of
recommendation. and it took me 1 second
to prompt on chat GPT and I may or may
not care about this person or you know
here's an update to the company like a
CEO's weekly update to the company
delivered by its VR their VR avatar this
is the world we're moving toward wait so
that is such a good point that like a
recommendation letter was less about the
letter and more as you said this person
took 30 to minutes to an hour to invest
in this person's future CEO's
communication to the company was about
them connecting personally with their
company rather than uh like the actual
words being said. It's a lot more than
the actual content and uh and if we lose
those things then maybe very quickly we
realize a lot of that stuff was wasting
all of our time anyway. So so apparently
this is the most optimistic Friday I've
had in a long time. There's no white
collar bloodbath. Communications will
improve. Financial innovation is alive
and well in America. It's going to be a
good weekend. I was going to say if the
CEO no longer reads the earnings calls,
uh, then what does the rest of the white
collar workforce get rid of? And then
you do eventually lead to an entry-level
bloodbath. Maybe Dario was right in the
end. See, we can both twist that exactly
the way we want to. Um, so this is the
the beauty of media. beauty of media
while we're still human. All right, Ron
John, thanks so much for joining. Great
to see you as always. Good to see you
next week. All right, thank you
everybody for listening. If everything
goes according to plan, we're going to
have Anthony Scaramucci on the show next
Wednesday. So, hope to uh basically
record that interview and share it with
you. And um and why don't we have a
classic hit play us out the uh famous
and muchbeloved hype or true theme song.
Thank you everybody. Have a good one and
we'll see you next time on Big
Technology Podcast.
[Music]