Sam Altman’s $7 trillion fundraise, Google Catches OpenAI, The RTO Ploy

Channel: Alex Kantrowitz

Published at: 2024-02-10

YouTube video id: LMoLRGZgvp4

Source: https://www.youtube.com/watch?v=LMoLRGZgvp4

Sam Alman wants to raise trillions for a
new chip company Google's Gemini is on
par with gp4 and that has a heap of
implications for the AI World snap is
doing layoffs and its stock is sinking
Chris Dixon book Chris Dixon's book took
a sketchy route to the bestseller list
Adam Newman wants we work back in his
return to office employed to downsize
and holdback raises we're going to cover
that and plenty more right after this
welcome to Big technology podcast
Friday edition where we break down the
news in our traditional cool-headed and
Nuance format we have a big week of news
to cover with you we're going to talk a
little bit about my experience with the
Vision Pro at the end uh but in before
we get to that we have big AI news
including Sam Altman looking to raise
trillions of dollars for his uh
potential chip business and what that
all means so that's all coming up uh
first of all as always we're joined by
Ronan Roy I want to welcome Ron to the
show billions are no longer cool I'm
only talking trillions this week Alex
well we're going to live that dream very
shortly I also um just want to say a
quick welcome to any new listeners that
are here with us whether you came here
because you saw uh the link to the show
on on daring Fireball and came in
through gruber's interview or
potentially you were here with the um
after listening to our conversation with
on a great quarter guys with the
compound um so I just want to um you
know for for those who are here for the
first time let you know how goes we do
these shows uh news breakdowns on
Fridays and then I have a flagship
interview on the feed every Wednesday so
grber was that Flagship uh interview and
then now here we are breaking down the
week's news next week Arvin civas the
CEO perplexity is coming on and actually
I think we're going to talk a little bit
about that I just did that interview so
we can teased a little bit today um but
but anyway great to be here great to
have Ronan here uh you can find ronan's
work on margins on substack and let's
get to the first big story here which is
that Sam Alman is seeking trillions of
dollars trillions not billions to build
a chip business and according to the
Wall Street Journal the fundraise could
be in the realm of five to7 trillion
dollar uh potentially coming from the
UAE because if you decide that you want
that type of money you cannot go to a
private Market you have to go to
Sovereign wealth funds Ron when you saw
this headline what did you
think I was completely enthralled by the
word trillions cuz I don't think I've
ever seen that in any kind of headline
around a fundraising but it it it's
certainly ambitious again bringing
together the UAE government bringing
together potentially the US government
bringing tsmc Taiwan semiconductor
Manufacturing Corporation everyone into
one fund into one it's still a bit
unclear as as to exactly what it would
be would it be a company would it be a
fund but but I think it it's very
important because trying to re shape the
semiconductor industry around the needs
of AI and generative AI it's Noble it's
important I think it's going to matter
is this the right way to do it we'll see
but but I think having this discussion
is important like marrying public and
private sectors in a way that actually
shapes the industry in the right way
it's not the worst conversation to be
having why do you think it's why do you
think it's Noble okay maybe Noble is a
bit of an overstatement but okay all
right I I take I take back Noble I I'll
say ambitious and important yeah and it
was interesting because I saw that it
was in the trillions of dollars 5 to
seven trillion and I was like okay so
that's like a a very ambitious valuation
I mean like the biggest companies on the
public markets today are in the realm of
three trillion but no that's the amount
he wants to fund raise so I think that
like when I saw this my perspective was
what Sam is doing is thinking that we're
going to get to a world where generative
AI is going to turn into artificial
general intelligence and if you get to
that point then it totally changes the
economy and if you're going to invest in
companies where that exists then you
have to change your equation I just
wonder if this is a little premature do
you think that's the right diagnosis in
terms of what he's telling these
potential investors yeah I think he has
captured a moment he's already captured
a couple of moments so you might as well
try to reshape the entire global economy
in Your Vision in your and in a way that
benefits you so you I mean he might as
well throw this out there right now but
I but I I agree I think it's a bit
premature and I think it's he's become
very good at grabbing headlines and just
kind of making absurdly bold
proclamations and it feels like this is
another one but again I think it's an
important discussion to be having about
what does the semiconductor industry
look like when the needs of computing
are going to become so great as even not
talking AGI but just generally
generative artificial intelligence
embedded in every product we're using
it's going to need to be we're going to
need to think differently about it Ken
who's watching live with us here on
LinkedIn wants to know if the a five to7
trillion dollar raise is preed or series
a Ron John that is the greatest comment
ever can because yeah I I I think you
know nowadays let's still be
conservative and call it a good series A
still precede might be a bit generous
here exactly we don't want to get ahead
of our skis on this one series B is
going to be interesting so talking about
uh taking advantage of the moment so Sam
leson had a who's a early Facebook
employee um and definitely like somebody
who's like in the conversation in Tech I
don't know people are I I think I find
his opinion is always a little bit
provocative and interesting he waited on
this on one of his like screen shot
tweets but I think it's worth reading so
he said I don't Grudge Sam's showman
Showmanship in and of itself he's just
extending the game that Elon has played
with the self-driving cars are just
around the corner or Mars by 2024 making
promises and clearly absurd but exciting
statement which select for meme
propagating cult following loyal
loyalists Sam is just playing a game of
one upmanship start with the
fear-mongering AGI and when that runs
out let's come up with the biggest
number we can think of in an ER where
value is in the eye of Beholder if you
anchor on trillions maybe you get enough
people to believe that hundreds of
billions is the deal of a lifetime to
make it all work and become too big to
fail but on the flip side this does make
me very nerv nervous if capitalism
becomes a game of absurdities versus
discipline it's hard to argue that the
Invisible Hand is guiding us anymore
instead of a broad game of numbero up
with PR campaigns for dollars
materialized by the government from thin
air with nowhere to go other than the
Magnificent Seven I don't know I read
that I thought that was spoton what did
you think I think that's completely
spoton I have to say also I'm a fan of
Sam lon's feed I almost respect the fact
that again as Alex had said he takes
screenshots I think of notes or
something else and has them as images in
the tweet and it's always incredibly
hard to read and even the fact that you
can now do longer tweets he still sticks
to that format so keep doing that Sam I
like it and I think that this is okay
this is really on point this is really
good this idea of absurdities versus
discipline and we talk and we like to
think that we're moving back towards a
world of discipline but maybe this is
another example that the absurdities can
work especially with fundraising and
again I think Sam mman has shown with
the fear mongering of AGI and connecting
it to that and we've talked about this a
lot that fear Mong fear mongering around
artificial general intelligence weirdly
is done by all the people who are
pushing AI the the furthest and stand to
benefit the most economically from it so
it's always felt a little bit
disingenuous when you know trying to
make it seem like this insane
unattainable crazy thing that only we
can save you from so give us money it
feels a little bit like that so I like
that yeah I do really think there
probably truth in him just trying to
throw out this wild number and if you
end up with billions of dollars in
funding you're in good shape like
imagine if he just got the value if you
have A7 trillion dollar investment that
the what do you think the value has to
be like 70 trillion I mean who's going
to invest the type of money and not want
to 10x that so like if you get a few
hundred billion and you're in the realm
of Nvidia to begin with even if it's
private Market that's pretty good yeah I
mean 70 trillion market cap I want to
see I want to see the pressure on
employees to realize that I mean
seriously it's
crazy so by the way speaking of like
coming back to discipline we just hit
5,000 on the S&P 500 uh which is you
know nothing close to what we expected I
mean it's far beyond any prediction
right that we had in the era of rate
raises you would think this is a zero
interest phenomenon and by the way
magnificent 7 is the one carrying it I
think Nvidia is up I heard today 600
billion on the year
already yeah but I I I think what's your
read there I've seen a lot around this
where you know and as someone who's
written about the absurdities of zerp
many times uh
I think the kind of the energy in the
market is still warranted around AI I
think that's what's been pushing it it's
the companies that are the best position
to capture value around artificial
intelligence which For Better or For
Worse are the Magnificent 7 are big tech
companies but the to me it's always the
difference was always again when the
market is going up in again monkey jpegs
and whatever else versus is here's a
potential fundamental reshaping of the
economy that I do think will get
reshaped um and AI is a transformative
once in a generation technology it's not
as weird to see stocks going up so I
think I think a little this is a little
bit more energetic Health than total
Mania right and this was a very chill
week in terms of the way that people
handled the news but it was actually a
Monumental week in terms of advancements
and the type of things that we're going
to see so first of all an important par
part of where AI is going to go because
it can't just all be chatbots right it
has to be the application of this
technology and where it goes beyond the
chatbot and we started to get a look at
where the things are going from this
information article that talked about
how open AI is Shifting the Battleground
to software that operates devices and
automates tasks so instead of just
having a conversation what they're
trying to do is create agents and this
is what the information says openai is
developing a form of agent software to
automate complex tasks by effectively
taking over a customer's device the
customer could then ask chat GPT the
chat GPT agent to transfer data from a
document to a spreadsheet for analysis
or to automatically fill out expense
reports and enter them in accounting
software those kind of requests would
trigger the agents to perform the clicks
cursor movements text typing and other
actions humans take as they work within
different apps what did you think when
you heard this news I think this is
exactly where things have needed to go I
mean again as it's going to be tax
season soon or already is if you're
responsible the absurdity of trying to
fill out your taxes or use Turbo Tax
when all that stuff should be AI like
driven anyways I think embedding AI into
all these existing apps processes tasks
that's where this is supposed to be
going and it should go whether open AI
is going to be able to be the one that
does it I I still and I think we've
covered this a bunch I think it's going
to be the companies themselves the tools
themselves the software themselves that
actually get a handle on being able to
use even potentially open source models
to do this automation rather than one
Central company especially open AI uh
being the one that figured this out be
figures this out because a lot of this
stuff has so much complexity and Nuance
or even getting an autonomous agent from
open AI to work with all of your backend
systems it's it's a tough thing it's not
just AI
it's you know it's it's building
software so I think open AI I think it's
good that they're moving the industry in
this direction but I don't think they're
going to be the ones that actually
figure it out so this is my point of
skepticism here for my book always did
one my first chapter is all about the
rise of robotic process Automation and
how that could change the work world and
I think that's taken off to a certain
extent but not in the way that some of
the companies involved in it like uipath
hoped and basically what robotic process
automation was almost exactly that that
your a robot would take over your
computer and figure out exactly how to
do do your work and you would sit back
and it would it would figure it out for
you and you know what maybe it was that
the actual UI right was too difficult to
train something to build this and if you
could conversationally instruct a bot to
do something that would be different but
I'm curious r on what you think because
I'm sure you've heard about this is
there a way that the AI generative AI
can sort of pick up where this uh
robotic process automation left off and
make it easier for people and hence give
it a chance to be more mainstream oh
100% I think RPA walked so generative AI
could fly I think like I think oh I I
was working on that one um that'll be
the title of the episode of course I
think no but but but RPA or robotic
process automation was you have to
instruct every step and every level of
any kind of process so the work the
uplift and getting that done done I
actually think probably did not create
enough value for people to invest enough
in it but the promise of generative Ai
and already the realization of it is
that it can just with natural language
it can already understand what that
process needs to be it can be trained a
lot easier it can be queried a lot
easier by anyone they don't need to
learn an entire new process they can
just simply ask in natural language
questions um so yeah I think that it's
like such a Le in technology that I I'm
still very very bullish that all those
annoying repetitive automated things
that we all do on a daily basis in our
work those are exactly the things that
are going to get successfully automated
and then I think it's a good thing I
think it certainly opens up lots of
conversations around what jobs look like
and how the economy changes but I think
that's where it's going yeah open AI has
to figure this out not only are they
getting into it but they have uh you
know a bunch of Google employees are
also starting companies around
generative agents like this is
definitely going to be a field that
people concentrate in and I've argued in
the past and I really stand by it that
open AI is in the hits business that it
has to keep developing new initiatives
like these agents otherwise it's just
going to be basically overtaken by the
competition and this week we really saw
that happen where Google released this
Gemini model that we've heard so much
about and they put it into Bard or which
is now called Gemini and this is the big
headline that I took from it which is
that it's not that it exceeded gp4 which
is open ai's model but it equaled it and
this is from Ethan mik former guest of
the show he says um basically his
takeaway is that GPT for spark is not
unique to open AI but it's something
that might often happen with scale right
and that's crucial it's not unique and
it might often happen with scale
effectively there's nothing special
about would open AI built um of course
it's special but there's nothing like
uniquely special about it it can be
replicated and it will be replicated and
Google has replicated it and that means
that this stuff gets commoditized and it
the prices come down and the amount of
money that you can make off of off of it
is limited and it gets diffused through
a bunch of different companies I thought
that was the big part of the Google news
this week how did you read it I this was
a happy moment for me because two things
one we that's exactly what we've been
talking about for months now that the
actual technology is going to get
commoditized so how well it integrates
into wherever you already are working is
the way this is going to go and for
Google that's a natural advantage that
every Google Cloud customer every Google
workspace user is going to much more
easily integrate generative AI into what
they're already doing because there are
it's where they already are so I've
always thought that that's where it's
going to go I'm more excited that for
once Google showed that they can
actually get their together and
instead of having Bard duet AI in Google
workspace duet AI in Google Cloud I
don't even know what other products they
had in the dayi space they're actually
calling everything Gemini it's going to
be Gemini workspace and we talked about
this we said Bard should be renamed
Gemini is so much better it's such a
better name I I could feel confident
being like Oh yeah I Gemini that I saw
that on Gemini saying Bard just was such
a weird thing to try to say so so I
think Google Sundar is is showing he can
make some moves still and uh I think
this is big news for
Google and another interesting thing
that mik pointed out was basically
there's enough differences between the
two and Bard is I me sorry Gemini is
better at some things than gp4 and so
his another takeaway was the AI wave has
en crested and the next move from open
AI might be releasing the rumor gp4 or
GPT 5 so basically you know there's
another oh now he says there's another
company with an llm that can compete
with open ai's most advanced model but
we're we're not at the end and I think
that's that's definitely true that
there's going to be better stuff that
we're going to see maybe they all become
customers of Sam alman's 70 trillion
doll chip company and they can develop
cooler but you know in the near
term at least like we're not done yet
but I I actually disagree with this
because to me the comp it of the model
or how advanced it is isn't where the
the Battleground for me it's again
smaller models that can actually work
and integrate into your existing
software I think I actually think that's
where it's going to go I think it's on
device Computing and which apple is
going to get very interesting around I
think I think getting to GPT 5 almost
doesn't matter to me because I think the
competition can still even a lot of
people are still building on GPT 3.5 and
building really interesting and good
experiences so so I think how advanced
things are it's good that there's
another model on par but I actually
don't even think that's where where it
really matters that sounds yeah that
sounds plausible so plausible I'll take
thing that that Sundar talked about I
mean Sundar Pai spoke a bunch this week
which is unusual for him he's like the
quietest big Tech CEO as far as speaking
publicly and he told wired something
really interesting about what his vision
is for where this thing goes like
whether this is going to replace search
so he said as search evolved as mobile
came in and user interactions changed we
adapted to it in some cases we're
leading users as we are with multimodal
AI but I want to be flexible about the
future because otherwise we'll get it
wrong and I think this is an important
point there there's been a lot of talk
even here about how this is going to
revolutionize search on the web and how
it might replace search on the web and I
think maybe I'm saying this after having
spoken with arvan from perplexity and so
I'm eager for people to listen to that
story that that interview next week but
I really don't and I think Su Sundar is
leaving open the possibility that AI
doesn't change search does not change
search and I'm leaving open that
possibility as well in my mind because
you know we've been talking about this
forever as a search replacement but it
actually could be a completely different
action right whereas searches I need to
find something on the web and this
generative AI is I need to explore my
curiosity or talk with a document like
it's not naturally oneto one a
replacement for searches functionality
and I think it's actually been
overestimated that it is and then if
that's the case what is Google so I'm
curious what you think about that idea
I'm happy they recognize it I would
disagree because I actually I have
started to replace I don't want to say
all of my search but the majority of my
search now starts on I have the chat GPT
mobile app I have perplexity and I have
Microsoft co-pilot next to each other on
the homepage of my phone and I start
almost I basically start every search on
one of those three when I'm on my phone
um I think trying to find information
It's really because and maybe it's a
function of Google search having become
so bad that it actually starts to just
work better um I think in app search
like for shopping Amazon that's that's
kind of like a completely different
animal but I still think it that's
another you know uh problem for Google
that they've already been facing and
that's been developing so I think it
does fundamentally change search I think
the generation side of it versus the
informational retrieval side of it
that's again a whole different area that
is going to create completely new user
experiences and ways of just doing
things but but I I think it's both I
think it both will fundamentally change
search and it's going to create
completely new user behaviors which we
don't understand yet well I I guess like
I'll push back and say I'm let's just
table this and pick it up next week
after the r ofan interview goes live and
we can kind of pick apart some of his
I'm excited for that yeah yeah because
and it just is something where Google
can be left in this like really weird
place even worse than it is now where
it's like you can't be like if they're
two distinct things
you can't be search and and generative
AI at the same time like you you kind of
live in both worlds and if you're trying
to have one foot in both worlds then I
don't know if you have an identity and
that will be I think the biggest
question for Google over the next few
years no matter what happens is what its
identity is because it's getting quite
murky right now oh I I 100% agree with
that I think Google as a traditional
search company is not traditional search
will not be the future and they
recognize it they know it but when that
is the vast vast majority of your
business that you have a monopoly on
it's going to force you to change and
it's going to be really hard to change
internally and it's the classic Clayton
Christensen innovators dilemma so I
think uh I think it's going to be
interesting I think for them I mean you
know you everyone always goes back to
the Reed Hastings and Netflix classic
pivot where you know DVD by mail was the
Cash Cow of their business but they made
the courageous decision to switch to
streaming and go all in on it and it
worked is Google going to make that kind
of s similarly courageous decision they
they don't have the track record of
doing that okay all right you said it
more definitively than I did they don't
have a track record on that but this is
the moment they have to it's not only
going to you know be something that
Google Faces it'll be something that
Apple face that's something I spoke with
Gruber about and something that was in
big technology this week which is that
you really have this incumbency problems
in lots of places where you have
successful products like for Apple you
know we talked about the rabbit R R1
right which was this AI device that sits
on top of apps you know Apple s we um
they tease that they have a big AI
announcement coming later this year and
like analysts like genan moner said oh
Tim Cook has said the magic letters and
you know I'd like to welcome you to the
AI regenerative AI freight train well
Google's also on that generative AI
freight train and it's a freaking bumpy
ride so you know are they gonna then
take the iPhone for instance and make it
all like a Siri large language model
versus the traditional operating system
no you can't do that so there there will
be very interesting challenges for big
Tech incumbents as as this stuff moves
further if Siri became my primary UI and
interface to all Computing I would throw
out every computer and phone I have and
I mean for Apple just fix Siri to start
just get it on par even with Alexa just
I and I say that like that's a priority
for them this year I hope so but as
someone who recently changed my entire
smart home setup to the homod it's a b
it is truly a bumpy ride so just fix
Siri guys that's all I ask I had this in
our document last week after earnings
and it's a little bit of a provocative
thought to share so and we were talking
Vision Pro last week so I didn't want to
bring it up because I could have been a
whole can of worms but I'm just going to
throw it out there for the two of us
right go for it Google's currently
sitting at $1.8 trillion meta is at $1.2
trillion market cap if meta surpasses
Google can Sundar Pai survive as the CEO
of Google I don't think so I think
Sundar is probably in a pretty
precarious situation right now I mean
the the overarching narrative around him
is it's like you know
Optimizer very good at just kind of
growing things from 100 to 150 but not
from zero to one so I think as you as
your reaction was when I said can he
make the courageous pivots needed to uh
to get Google where they are he doesn't
have the reputation for it maybe he will
kind of show that Visionary side of him
but it's also interesting because Tim
Cook had that similar reput reputation
for a while especially after Steve Jobs
that he was an operator and not a
Visionary and I feel he's starting to
get out of that especially we'll see
what the Vision Pro
but but yeah whether I think if meta
continues showing especially in
advertising they're now going to be
bigger than Google potentially I think
that's not a good sign for sundar's job
and here's the thing about Sundar and
Tim Cook maybe they are quite similar in
terms of you know the way that they lead
Optimizer and and you know focus on
efficiency and incremental improvements
the thing is and this is what gromberg
mentioned Tim Cook has not faced a
challenge to his core product the phone
is the phone
the phone is sort of the end product the
end State whereas like now Sundar is
seeing search get challenged by
generative Ai and that is a big
deal yeah no no I think I I completely
agree this is going to be it's funny
because each week we talk about how the
Magnificent s and big technology
companies are are completely entrenched
Ken young here in the comments had
actually ask could the dominance of fang
be shaken up with interest in AI so yeah
I think uh on one hand they're more
entrenched than ever but it's also it's
an interesting time because on the other
their dominance or their incumbency as
you said also poses probably the biggest
kind of organizational challenge for all
these companies now this this again
might be a bit of heresy but in a lot of
private conversations the people who are
plugged in that I speak with when they
talk about Sundar they say that guy
likely isn't long for that job but yet
I've haven't seen any coverage asking
about like how safe suar Pai is like I
not seen one report about that of course
alphabet's doing you know they I just
checked because I was thinking about
about digging into it they did hit their
all-time highs in the stock market
earlier this year so you know that's if
that's the measuring stick they're
they're in good shape but you look at
where the competition's going and you
sort of Wonder I'm curious why you think
we haven't seen any deeper questioning
of sundar's position in this in this
role well but Google Cloud as a business
very strongly responded to Amazon web
services Google workspace very strongly
responded to Microsoft Office so I think
they've shown they can basically copy
very well um but they haven't shown any
kind of like completely new innovation
we are this is I've had a lot of
conversations around this is like you
know like what was their last great
Innovation you know Maps YouTube all
these things just kind of keep going on
as just you know almost relics of their
past self but uh yeah I think that is
interesting I agree maybe it becomes
more of a conversation but it's hard to
have that conversation when a stock is
at an all-time high so exactly yeah
there might be a story to do on it well
we'll see speaking of Google's big
Innovations uh I have a feed drop coming
on on the feed on Monday which is for
for a new podcast called building one by
the chief product officer of LinkedIn to
Marone and he interviews the co-founder
of canva and apparently this guy was an
early uh person working on Google wave
so Google wave remember I love it yes
some of it's not quite Google Plus but
Google wave was definitely one of my
favorite was that like 2011 2012 where
you that feels right in the pocket it
was kind of a Twitter clone if I
remember but you like post this
collaborative place where people could
like type and move images and um put
video
it was a like a basically like a a CK
almost like figma like there was Google
docs for everything collaborative
workspace could have been Google way I
mean that's one of the things you
imagine is pretty tough and it is that
problem of incumbency because you can
totally picture they like Meo or you
know collaborative whiteboarding tools
if you've ever used them but figma even
like that whole idea of like real time
collaborative work which they have
nailed with Google docks and sheets and
stuff being able to work together in
real time but but you can imagine that
kind of product that's a problem when
you have how many billions of users that
to show genuine traction you don't
probably have the time to innovate and
actually find something that's going to
really stick you're either having to hit
insane numbers early on or it just gets
folded into wherever and then gets
killed off eventually yeah so folks stay
tuned for that feed drop coming on
Monday to and I talk for like 10 minutes
right before the episode starts just
about you know what he's trying to do
with the show but also about this Google
wave thing and about how he thinks about
generative uh product product management
with with generative AI so that's
something to keep an eye out for now the
this week was also interesting there was
this um leaked well there was this faked
rooc call from President Biden uh
telling voters that they should abstain
from voting in the in the uh
in the primary elections and um soon on
the heels of that the FCC banned AI
generated rooc calls so it's interesting
that we're we're starting to see some
push back towards this AI generated
stuff I mean I think that there were
already AI generated rooc calls that
were like hitting the market but to see
the government take action on them is
quite interesting what what did you make
of this yeah I
think because again the main difference
is how are they really going to be able
to tell even finding who originally
created and paid for the rooc call is
almost nearly impossible so I think the
more important thing was sending a
signal that you will be prosecuted this
fits into you know uh there's like a
three decade old law aimed at curbing
junk phone calls and it fits under that
it's a clarification around that so I
think we're going to see in this
election year a lot of very very intense
strong action around this kind of stuff
again how easy is it to enforce is
another question but I think at least in
in in the letter of the law it's going
to be spelled out pretty
clearly it's interesting seeing the
government take action on Tech it's like
we've had these two side by side
pictures of Effective Government and
ineffective government the big Tech
hearings and then these smaller moves
from agencies where you're actually
seeing them do things and this is one
example and then there's also the the
FTC which has had a mixed record of
success um but has really been on the
war path trying to block uh mergers and
I don't know if it was them or european
Regulators but basically um there was a
a significant block merger recently that
we've been meaning to talk about which
is that Apple uh Amazon wanted to
acquire iroot which is the maker of
Roomba and then basically decided to
walk away from the deal so what can you
tell us about that yeah I think overall
we've seen the climate has changed and
there's going to be a lot more scrutiny
over all m&a and I think that's a good
thing I think that was you know that's
one of the reasons we're still sitting
here and the Magnificent Seven have just
an incredible amounts of Market power
but I I think it's yeah m&a is
definitely an area where uh the
government has been successful in the
last couple years there's been some big
you know like notable losses but overall
the entire climate has changed and I
think that's a good thing well let's
talk about whether that's successful or
not because um so the CEO of iRobot uh
lost their job because of this iRobot
also took uh they they are going to lay
off 350 employees 31% of the work of the
workforce they are a mess internally now
after being you know waiting to be
acquired and this is a problem for
companies that like make plans they go
through these lengthy processes and they
can't eventually close the deal and the
same is going to happen with figma by
the way which just like got closed out
of this Adobe deal like the company
spent months or more than a year waiting
for it to close both of them and all the
plans put on hold you know people
figuring out what they're going to do
for work maybe just chilling like you
don't want to advance too much you don't
want to change the product too much you
know as you wait for this approval and
so I'm curious if you think the word
success is the right word to use like I
think it's 100% the right word to to use
cuz yeah the New York Times had a long
piece it was really good actually just
yesterday around what the culture and
feel is at figma right now and again
they had it was supposed to be a 20
billion deal and then internally figma
just reset its valuation to 10 billion
so you can imagine you're an employee
sitting there you thought you were going
to just have some insane windfall and
now it's not as insane it's probably
still pretty good for most employees
especially early ones but I agree it it
completely changes the calculations and
the whole culture about how companies
just approach their product and approach
their work and I think it's a success
because I think it's a good thing I
think like if companies were built
around not actually continuing to figure
out how to better serve customers and
innovate and instead we're just trying
to figure out how to cash out you're
seeing it in real time like as you said
if you know people are just kind of
spending months and and then not really
doing anything in the hopes and we all
know if figma was acquired by Adobe it
would just go out to die to go out to
pasture so I mean I think I think it's a
good thing and we it it's a reminder
that a lot of the kind of Downstream
effects of this are longer term because
for each one of those stories that means
that at somewhere some m&a lawyer and
some investment banker talking to some
CEO are not going to start that process
in rather than starting it and I think
that's where you see the like it's you
can't almost measure a lot of the times
with Lena Khan and the FDC or even
around the Department of Justice there's
like kind of like win loss scorecards
but I think unless you look at the
aggregate it's it's tough to paint the
whole picture and then that's
taking shape right now and they will
diverge right because you'll have some
compan like a lot more companies will
decide not to go the m&a route right so
their real chance of an exit is an IPO
and some of them will make it there and
be worth probably three or four or five
times what they were going to make as an
acquisition like think about Instagram
for instance if they had to go the IPO
route they would be worth so much more
than the billion that that uh and social
media might be good right now if
Instagram actually there companies that
will just kind of fizzle because they
can't get there so it's like taking away
this this very important piece you know
potential exit and then will investors
continue to fund so I think there's very
complicated second order effects I think
you just described capitalism to me but
rather than catch and kill m&a well I'm
not advocating for catch and kill okay I
I hear your criticism Ronan all right
I'll give you this
round all right uh speaking of healthy
capitalism snap or an unhealthy
companies want to talk about snap I mean
the company uh not only laid off 10% of
the workforce or said it was going to
but when they reported earnings which
missed in some categories and had light
guidance they blamed the war in the
Middle East which is I think a pretty
poor excuse um given when you saw meta's
numbers right uh they didn't have any
problem with that um anyway the stock
dropped 30% in a
day yes snap I'm gonna say some bullish
things about them in a second but I
think their earnings report did not
clearly did not please the market it's
down over 30% since right before the
earnings though it ran up a good amount
after earning meta's earnings and I
think everyone was hoping that they
would kind of have the same meta had I
believe it was 20 24% ad Revenue growth
the year onye whereas snaps was up
5% um but it's an interesting time like
one thing I wanted to highlight about
snap that was interesting and it was the
first time they really addressed this
and I think this is a really important
thing both for them because they were
kind of the poster child was stock-based
compensation that they were the like in
the first three quarters of last year
they generated $3.2 billion of Revenue
and issued $1 billion in stock based
compensation or SBC and SBC the the
weird part of it is it's a non-cash
expense so it's been used by lots of
tech companies in you know varying
degrees of absurdity where you know you
you have a certain amount amount of cash
outlay and then you give everyone else
shares and it's it's part of the tech
industry in general and it's part of a
lot of job in general that we all expect
now but you use it so aggressively that
you're basically not paying people
you're just issuing stock because that
doesn't come out of your profit like
your eida does not reflect stock-based
compensation so this is the first time
where they actually openly acknowledged
that that is an issue and that they
would be cutting down in the amount of
stock-based compensation they issue and
I think that that at least was a good
sign that they recognized they need to
be more disciplined around it I mean the
whole advertis in business of theirs is
another conversation but I think it was
an important moment because that's the
first time I've seen a company openly
acknowledge it as maybe problematic with
not calling it directly problematic but
at least saying we're working on this is
that your bullish statement on on
Snapchat well clearly I'm in line with
the market on this one but no no okay
what was bullish for me was I think
they're still at a really interesting
position right now cuz they have not
figured out direct response advertising
like Facebook or meta they they haven't
everyone was hoping they had in the same
way in the last year and we it meta has
such an advantage in terms of
first-party data because snap always was
we're not they they have a whole new ad
campaign we're not social media they're
not a data siphoning data collection
thing a machine in the same way Facebook
is so they can't create their own
first-party data driven advertising
model in the same way Facebook can but
again daily active users was up 10%
which I thought was interesting and
still for me to and it was barely
mentioned in the earnings call 7 million
Snapchat Plus subscribers we've talked
about this a lot when you're getting 7
million genz to pay for your product
that is mostly that would be free in any
other platform I think that's
interesting and then the whole idea that
we've talked about that as a generative
AI platform people are paying for quirky
little geni features that if they become
kind of the the gateway to geni for
every single user I think maybe they
start to move as a non-advertised based
platform which starts to get interesting
but they're they're certainly not there
yet right yeah I saw the stock uh the
stock drop and thought like oh man like
this might be a good buying opportunity
for snap and I didn't do it for two
reasons one is I don't invest directly
in the companies that I cover uh but
even if I did they're still
Mark remarkably higher maybe 25% higher
than they were in October so last year
so they they did have this huge drop but
I think you're totally right to point
out that it was uh in front of a runup
but I am bullish on them like I I know
that uh they are getting more serious
about figuring out the ad stuff and I
think that over time they will yeah I
also when you look at the layoffs one
thing that I thought was pretty
interesting was there was like the SVP
of content it was a lot of people who
had content in their title
and if you've used snap Spotlight it's
pretty garbage relative to certainly a
Tik Tok or if meta figured out Instagram
reals really well that I think whatever
they were trying to do with inapp
content apart from the messaging and
they they have big numbers that
Spotlight views are up X percent and I
think it's like 10075 million people a
day engage with Spotlight or whatever it
is but if you use the app you quickly
realize they they have not figured out
content yet so the fact that there were
a lot of the layoffs were around that I
think maybe and competitively trying to
compete on reals and Tik Tok and
everyone else who went into YouTube
shorts maybe they're realizing they're
not going to win that battle yeah I saw
you added me on Snapchat this week were
you just kind exploring the product or
what was what was the story behind that
Ron John no no I I actually use Snapchat
with a few friends I do I think it's
amazing so when I was doing my story on
Snapchat us I redownloaded I hadn't had
it on my phone for a while I
redownloaded I wanted to see what was
all about and uh my wife and I use it
all the time now just sending those
stickers and stuff is fun no it's just a
much better more fun messaging app than
the rest out there which is and and
again I mean I'm old like everyone I
know who's younger they still live on it
so that's where I think again in terms
of user engagement for something that's
not built to be addictive the stickiness
of it the increasing daily active user
side of it like it is a yeah it's a
great product that has a lot of people
who love using it the only difference is
they have not figured out direct
response advertising So speaking of CEOs
Evan Spiegel of course has uh
disproportionate control of that company
um same way that Zuckerberg has of
Facebook meta um snap is down
58.9% from its first day of
trading if Evans Spiegel did not have
that control do you think he would be
out I know this is always the this is a
really interesting question for me
because I still think we were having
this whole conversation in this episode
about kind of operator vers Visionary
CEO he's shown time and time again to be
on the Visionary side of things I think
like snap I mean again oh the whole
metaverse thing they've owned augmented
reality to the point where they no one
even considers them augmented reality
even though everyone's using AR in their
app all day with lenses like at so many
levels even disappearing chats even the
whole stories format they led the way on
every one of those product Innovations
they they just never found their
operator and I I I agree I think the
fact that he's gotten away without
finding that operator is definitely a
problem of super voting power and super
voting structures and Zuckerberg has
always actually found the right way in
the end whereas spiegle has in so yeah I
think his job would have been a lot more
threatened let's say versus uh others if
without that hey well Cheryl samberg's a
free agent so that would be the moveing
that would be the move and she wait no
and she could rehabilitate Her Image
completely because snap's whole thing is
we are not addictive social media so she
could make amends for all the ills that
the addictive social media side caused
and then she'll run for president and
that's the story the snap Snapchat
president all right folks you heard it
here first president of the United
United States United States yeah I know
I'm saying the first Snapchat president
oh yeah yeah okay okay got it could
happen all right let's take a quick
break we have plenty more to cover we'll
be back right after this and we're back
here on big technology podcast Friday
edition we have a bunch of stories left
to cover um let's briefly touch upon
Chris Dixon's book read write own uh um
so this is a book basically extoling the
virtues of crypto and telling die hards
that it ain't over yet folks um so look
I I think I should just share like the
backstory here because I've mentioned it
once or twice on the show but uh Chris
Dixon's reps uh pitched not one but two
of them pitched me on having him on the
show I said yeah bring him on you know
obviously it's not going to be easy
questions uh but we'll do it and they
pulled out
I guess like they went on so many
friendly shows that they decided they
didn't want to face any tough questions
and I'm starting to see why uh because
when you look at some of the reviews
that have come out about this book um
it's pretty rough and he is of course
like the person leading the crypto push
at Andre and Horwitz and I'm going to
say this before I start reading some of
the some of the reviews like I still
think that we can see we already know
that blockchain is is starting to be
used in places I still think that we can
see applications built on top of this uh
technology but I but my bottom line here
is that and is that I think that crypto
just needs better spokespeople than
Andre and Horwitz and Chris Dixon and
that this guy is doing a disservice to
this entire um era like wave of
technology so this is from uh Molly
white who reviewed the book um so she
says there's part four here and now and
and then there's part five uh what's
next the name part four suggests that he
will perhaps lay out a list of
blockchain products projects that are
currently successful solving real
problems that may be why part four is
precisely four and a half pages long and
rather than name any successful projects
Dixon instead Spends His few pages
excoriating the casino projects that he
said has given crypto a bad rap in fact
throughout the entire book Dixon fails
to identify a single blockchain project
that has either successfully provided a
non-speculative service at any kind of
scale the closest he ever comes is when
he speaks about uh how for decades
technologists have dreamed of building a
grassroot uh internet access provider
and that's something called helium that
may or may not be turning out I mean I
like the a whole thing that's going on
in this book is him plugging a16z
projects um which have not had a great
track record basically Molly ties up her
review saying this whole thing should
have been a blog
post always the greatest thing to read
after writing a book I'm sure but yeah I
uh yeah I think for me it's just I want
the only reliable narrators right now on
blockchain are people who did not
absurdly enrich themselves during the
last few run-ups and I think this is
like again another example that it's
difficult to take it seriously when you
know lamenting for the current the past
few years about people you know uh
Casino projects and C crypto getting a
bad rap when you made too much money on
it just makes it difficult and the
moment just just one successful project
that's all I ask now here's my my
favorite part of the whole thing so
Chris Dixon was on X talking about how
well the book did and that it was number
nine on the New York Times bestseller
and number 25 on some other list and if
you look at the bestseller list there's
a dagger next to the book a dagger
symbol and what does the dagger mean
this is from Vice the dagger icon
indicates as the times helpfully
explains that the bulk purchases were
that bulk purchases were included in
that count put that put the book on the
list um and basically it comes out that
a lot of inju in horowits portfolio
companies built and bought uh in some
cases more than a thousand books which
helped this book get on the list um and
I just thought it was kind of poetic
right just this something that appears
to be big and successful on his front
and really want you to get behind it and
it turns out that behind the scenes it
was like a lot of manipulation and
smoking mirrors to make it seemed to be
more than it was just
like a lot of what Andre has been Andre
H has been telling us I I I I learned
about the dagger icon and that was my
favorite thing this week that I learned
about that I didn't know about it either
yeah that uh that would that and I was
just I'd been reading that it's called
the dagger of death in the publishing
industry but basically
basically is a sign to readers that this
is on here but it probably shouldn't be
so I kind of love that the New York
Times has recognized this and is not
afraid to bring the dagger of death to
their own list when they have to base it
on sales yeah now look you know since
we're we are like a nuanced show like
I'll say that you know potentially uh I
don't know my feelings on this could be
influenced by the fact that Dixon
pitched and then decided to bail but I
also think that everything that we're
saying here is like true and I would
have no problem saying it to his face
either well I respect that you
acknowledge that but I think I I have to
agree with you here yeah and there was a
comment uh that that I got on X when I
tweeted the um the Times bestseller
thing it was uh basically this person
saying is it really newsworthy that a
book got on the NY Times bestsellers
list is it newsworthy trying to
discredit book sales there is a real
There's real Tech to report but
technophobes
advice are are Petty I think that that
is a good point however if you look at
the you know all the different frauds
and the pump and dump and the schemes
and the follow follow me everything's
going to work out type of stuff that has
been extolled by you know a lot of the
scam merchants in crypto like the fact
that this big book about the crypto
industry um the the web 3 in particular
you know ended up being kind of scammed
it scamming its way onto the best list
like yeah that's freaking newsworthy man
yeah I think especially given it covers
crypto and how you tied the two together
I think that's newsworthy all right so
look if people have different opinions
like I'm definitely willing to hear them
um just email me at alexb technology.com
and and I'll I'll happily uh H I will
happily read what you have to say
respond and you know potentially read it
on air next week but figured that was
you know worth covering oh my God I'm
just looking at our next story on the
list you see this so so speaking of
crypto FDX is going to um fully repay
customers and basically like they they
will not give them like the additional
gains they would have gotten since the
exchange collapse but they will be able
to repay them in full and I think part
of that is because Bitcoin is now at
45,000 so clearly like this crypto wave
is not oh oh my God it's now
47,000 it's flying it went up two 2,000
so clearly the crypto wave is not over
like there's going to be a second wind
here uh but it is kind of interesting to
see see where this thing is
moving yeah I I'm sitting on the
sidelines and watching closely and wait
also waiting for whatever the next SBF
uh SBF news is oh yeah so I think we'll
probably so we we teased about having
Zeke Fox on uh I think he will come on
uh the week of Sam bankman freed
sentencing so people should keep an eye
out I'm excited about that one that's in
late March um do you own any crypto
no okay I did I have multiple times
multiple iterations but yeah not at the
moment I just bought some Bitcoin for
the first time in a while when I opened
up uh Robin Hood before I interviewed
flad I was like oh crypto let's do that
so all right there you go so I am
up uh another interesting story it feels
like we're like rolling the clock back
but Adam Newman is trying to buy wework
again Adam Newman is trying to buy wew
again his real estate company flow
Global which they'd raised I think yeah
350 million from a16z everything is
connected today is uh had sent a letter
that they're working with third Point
Capital Dan L's fund that would try to
help Finance the tra transaction to get
out of out of bankruptcy to me there's
two great parts of this story one Adam
Newman back looking at wework after
enriching himself to $1 billion or I
think it might have even been
1.7 as the company went into bankruptcy
and that they would have to basically
workout terms with soft Bank who lost
$16 billion I believe it was total um
that was poured into it so that's
already great the other thing that I
found fascinating Alex speiro was the
lawyer involved in this Alex speo is
Elon musk's lawyer whose name and quotes
end up in every single Delaware story
SEC Elon Musk story so and he also
apparently represents Jay-Z I think he
might lowkey be one of the Most
Fascinating People in Tech that no one
has really ever I don't know what he
looks like would be a great profile
honestly yeah maybe I should write that
one I I mean come on Elon he and he's
like Elon musk's attack dog basically in
anything any legal story he's the only
one that's quoted he's always super
aggressive but clearly people I mean
he's doing a good job when you're not
get only getting hired by Elon Musk but
Adam Newman and Jay-Z yeah seems like
these folks really know how to do the
legal stuff pretty well yep do you have
a a couple minutes to talk about the
return to office stuff yeah or do you
have a heart out here let let's do a
couple of minutes on IBM because okay
who better to end a conversation about
big Tech then the original big Tech
right so basically IBM has told managers
you got to move you're an officer you
have to leave the company and uh this is
from Bloomberg IBM delivered a
companywide ultimatum uh yeah basically
telling people that better get back all
us managers must immediately report to
an office or a client location at least
three days a week regardless of current
work location status and that badging
data will be used to assess individual
presence right IBM to me is just the tip
of the spear here there are so many
companies that are telling their
employees they better get back to the
office or they are not going to get
raises they're going to be laid off
they're not going to get promotions all
this stuff and I had a friend I was
talking to about who's going through
this and he goes like we've and they
don't work at meta but like they use the
year of efficiency term basically he
said we've gone from year of efficiency
the year of douchebags and like it I
wonder if this is like the flip side of
earnings Ronan because you know we're
seeing great all-time highs record
profitability companies talking about
how they're making more money with less
people and they are trying to find ways
to find margin and is this a way this
return to office thing a way for them to
like get out of having to pay higher
compensation figuring out who to lay off
uh and trying to make those those Mar
margins higher and deliver for Wall
Street I'm curious if you think it is a
ploy because I I do oh I 100% think I I
wouldn't even use the word Ploy which is
kind of cynical I think it's pretty
direct I think it's it's explained to
people and and I also think that again
the whole work remotely return to office
work from home debate I think especially
bigger firms it's clear which direction
majority of firms are moving and that's
returned to office I tend to end up on
the being in office is a good thing in
many ways um and I think that it it
these companies hired too many people
during covid so all of those the fact
that I mean it is the single worst sign
for for a worker sitting comfortably
remotely um when record profits are up
while layoffs are happening because it
just showed that a lot of the workers
were extraneous and and we talked about
this a lot and I would say this is
probably one of the few times where
normally I might be critical of big
technology companies where I don't feel
bad for them but I think having seen how
comfortable a lot of workers were are at
a lot of these companies over the last
few years there was endless rest invest
stories or people kind of having side
jobs while getting paid 400k or whatever
it was like we all it it was kind of not
even an Unwritten secret but a written
one in the tech industry that these were
very comfortable places to work and then
they're just not going to be as
comfortable right now wait you think the
very Act of being at home is effectively
slacking off no no not at all but I
think that at a lot of these companies
probably too many people took advantage
of that in a way that made it that they
made it so that they realize that it
can't work that way I actually think my
whole I got theories on this but uh I
think like a early to midstage Startup
almost can work better remotely where
everyone is accountable to each other
remotely it's at a the larger the
organization gets the easier it is for
people to kind of skate by and not be
account accountable because you'll just
easily lose yourself in the overall
bureaucracy now let me give you the
wrinkle here right which is that it
seems pretty clear to me that people uh
that these companies are going to apply
an uneven standard to their workforces
right like the high performer will be
able to stay at home and continue
working for Mexico City where the rank
and file are going to have to come in
and I'm curious like if you think that
that's true and what sort of tension
that could cause within a company is
this actually healthy for companies oh
that that's not the way I've been
hearing this for the most part really
what have you been hearing oh no that
this is affecting everyone at every
level and it's actually more often than
not the senior managers that have been
going in more regularly to start and
they're the ones pushing it and that's
actually where you get a lot of the push
back is that you know if someone who's
senior has an easier time you know
finding a place to live in San Francisco
or New York City versus someone who's
Junior so their commutes will
potentially be short hard and life is
easier so they're able to do this so I
think there's potentially
reasonable claims and pushback there but
overall I I don't think this is
something where you know they're laying
off or they're using this to get rid of
rank and file I think it's the opposite
one of uh my my core takeaways here is
that it's time to buy stock in Chipotle
because everyone's going to be back in
the office everyone's going to be back
in theice for lunch and that is I like
this I like this maybe sweet green comes
back maybe sweet green comes back as
well oh my God sweet green is so back it
is a technology company we know it is a
technology we know
this 60 seconds on the Vision Pro I got
a chance to try it this past weekend in
the Apple Store in Brooklyn a few key
observations for me first of all there
was a tremendous amount of open
appointments to come see it I expected
to wait online for hours um did not
happen and that that to me was was
pretty interesting um the actual techn
technology itself better than I expected
uh the actual Fidelity of what you see
being beamed into your eyes is
absolutely incredible uh the
entertainment is amazing and I
personally was like should I buy this
thing until I took it off and remembered
how much it cost and said all right I'll
get the the Next Generation so I know
Rajon you haven't tried it yet um but
very briefly are you are you more or
less bullish on the Vision Pro after
seeing it out for a week I am more
bullish from talking to people who have
bought it I actually had an appointment
on Thursday after talking to Joanna last
week I wasn't able to make it yesterday
but I I think I'm more bullish everyone
I'm talking to the whole idea of like
multiple screens and just working again
I think I'm more my take that it is
should be proudly an isolating device
and that recognize that's what it is I
think is going to it might hold some
water at least in the near future maybe
eventually we end up with you know lean
AR glasses that actually fit comfortably
and aren't weird but yeah I think and
actually I was at a New York Fashion
Week show yesterday and I saw someone in
the front row wearing a Vision Pro so
there's models walking down the runway
and there's just some dude with a hoodie
looking up and sitting with the Vision
Pro so and people were pointing it out
people were laughing a little bit about
it I mean it looked utterly ridiculous
but it did make you wonder is this going
to become kind of normal at some point
and again if they were I don't know if
they're from the company who they were
if they're filming it in spatial video
and that was a whole point of it but it
looked ridiculous but now that it's
happened once maybe it's not going to
look so ridiculous the next time oh I
think it's abely going to be common from
row fashion Events sports games you're
going to see people walk in and watch
these things and then go back and relive
it and some some of those people will be
perverted and some of them will just be
sports fans and business people but that
I I always keep thinking of we had
talked about on the show a while ago uh
there's that iconic Sports photo of uh
everyone holding their phone up when
what was it I think there was some
scoring records that Michael Jordan and
LeBron score setting records and was in
the moment with Jordan but not with
LeBron yeah yeah yeah they showed Jordan
everyone is just looking LeBron
literally everyone has their phone out
and I think that is the that's the
problem to me that I think the Vision
Pro the most interesting part of it is
we've all been living kind of halfway
between reality and our device in a
really uncomfortable way and I think the
Vision Pro is at least a start of
recognizing like either it's going to be
totally seamless and we have nice AR
glasses that fit well and look okay or
you should be isolated and everyone
should look at you as I'm not going to
talk to you because you have a headset
on but you're just recording the moment
so Ron I'll end with this are you going
to drive your cyber truck with the
Vision Pro on or without it on I mean
the only way to oh maybe for next week I
read something really interesting that
Apple The Vision Pro is really a kind of
the tech within it technology within it
is leading to the Apple car and it's
like the way we experience driving is
going to completely change maybe for
next week we should get into this one
that is a good teaser all right ranja
thank you so much long one today but
lots of stuff to cover and and great as
always to get a chance speak with you
thanks for being on have a good weekend
all right you too thanks everybody for
listening again my interview with Arvin
civas is going to be up on Wednesday we
also have that feed drop of building one
on Monday and then Ronan and I will be
back next week to talk about how
potentially we're going to talk about
how the Vision Pro is going to change
the Apple car and then also everything
that happens between now and then thanks
for listening and we'll see you next
time on big technology
podcast