OpenAI and AMD's Megadeal, Sam Altman and Jony Ive’s Bumpy Start. Meta vs. Apple

Channel: Alex Kantrowitz

Published at: 2025-10-06

YouTube video id: NVjKUH2cZEc

Source: https://www.youtube.com/watch?v=NVjKUH2cZEc

Open AI and AMD sign a mega deal where
Open AI could end up owning 10% of AMD.
Sam Altman and Jony Ive run into some
turbulence in their quest to build an AI
god device. And Meta and Apple, and
maybe the rest of the tech world, are on
a collision course. That's coming up
with Spyglass's MG Siegler right after
this. Welcome to Big Technology podcast
where MG Siegler is here to make his
first Monday of the month appearance and
we have so much to talk about. We're
going to cover the tie-up between Open
AI and AMD and the fact that Nvidia and
Open AI's deal is really just a letter
of intent at this point. We also have
Sam Altman and Jony Ive running into
some bumps as they begin to build their
AI device. And Meta and Apple, and maybe
Amazon and Google all are basically on a
collision course to build the same
thing. And we will take a look at how
the progress is going on all fronts and
who's winning. So, great to see you
again, MG. Welcome back to the show.
Great to be back, Alex, and I know we
say it every single time I'm on, but
there's so much happening and as always
there's always more happening. It's just
it's wild how it this is
sort of just playing out. I love how we
catch up every month and I was looking
at the headlines from just this morning
and I said we could do a full show
on that. Last month we were talking
about the rollout of GPT-5 and whether
Open AI has broken ChatGPT with it. That
is a distant memory.
>> ago. Yeah.
So, let's begin, of course, with with
Sam Altman. And a few weeks ago you
called out an interesting line in a post
of his about abundant intelligence and
it was seemingly a wink towards
interesting things to come. First of
all, Sam says in this post, a very short
short post, he says, "Our vision is
simple. We want to create a factory that
can produce a gigawatt gigawatt of new
AI infrastructure every week." Which
crazy. He says, "The execution of this
will be extremely difficult. It will
take us years to get to this milestone
and it will require innovation at every
level of the stack, from chips to power
to building to robotics, but we have
been hard at work at this and believe
it's possible. Over the next couple of
months we'll be talking about some of
our plans and the partners we are
working with to make this a reality.
We have some interesting new ideas." And
he sort of left it at that. And it seems
like now with this deal with AMD, which
we're going to get into the details of,
which by the way,
might have Open AI ending up as a 10%
owner of AMD,
this is part of
the interesting new ideas that Sam
teased. So,
let's just start with the high the high
level here.
Are we starting to see Sam's plan come
to fruition?
It seems like this is part of it, right?
It's it's this is it's so hard to
analyze this in part because of what we
kicked off with, right? Things are
moving so fast and it it's almost hard
it's obviously impossible for us on the
outside to know how much of these deals
are coming together sort of on the fly.
Like there was the reporting about
obviously the the Nvidia $100 deal,
which led presumably to Sam's, you know,
post there that you're talking about,
that that sort of came together while
they were both on the overseas excursion
with
with Trump and and sort of going around
and and they were able to hash out that
deal sort of one-on-one. And so, with a
deal like this now with with AMD you
almost wonder like did a similar thing
play out? Was was Sam with Lisa Su
traveling around somewhere? Did Did she
pick up the phone when she saw that
Nvidia deal and decide like we need to,
you know, figure out a deal basically
over the next few days to sort of be
able to to respond to that in some ways.
And so, it's when when talking about
Sam's post, it's sort of like I'm I'm
unclear if he even knows all of the the
ways that this is going to go from his
sort of nebulous
yeah, talk about these interesting new
ideas for financing. And also that post,
I I felt the need to write about that
both because I like the the Sam Altman
post criminal analogy of it all and
doing breaking those down, especially
when they're as short as this one is.
You know, it's sort of I kicked off
talking about it. Felt like this was
basically written because Sam felt like,
well, we just did a $100 billion deal
with Nvidia. Someone should say
something about it. And then
and then he you know, he goes on for
just a little bit with these
these very again nebulous and grandiose
terms as he often does. Um
but that this was also tied to
you know, some other um
quotes that that were coming out of this
from other companies.
I think one was
was it the oh, it's the new co one of
the new co-CEOs of Oracle
also had, you know, alluded to these
these strange new financing mechanisms.
And of course, Oracle's a big partner
with Open AI, too, as everyone's big
partner with everyone these days. But
but so it's like what what's going on
behind the scenes that all these folks
are getting together and coming up with
with new accounting methods out of the
blue that they that they're hinting at
but not fully coming into. And so, yes,
it's conceivable that this AMD deal is
one of them or it's conceivable that
this AMD deal came together at the last
minute because of the other deals going
on.
I I have to give Sam credit. He's
someone who can write like we're going
to be telling you about some interesting
new ideas we have about financing and
building and most CEOs, I would say, you
you would read that and be like there's
nothing there. But with Sam
we've seen that there is something
there. And that's either and maybe it's
both of these options. I was going to
say it's either a testament to his
ability to turn momentum and ideas into
business reality or a testament into
the entire business world's blindly
following this one man
and putting so many billions of dollars
behind
what he's promising in the future that
it's it's somewhat concerning. But I
think we should just talk a little bit
about the nature of this deal because
it's such an interesting deal between
Open AI and AMD. So, this is from the
Wall Street Journal. Open AI and
chipmaker Advanced Micro Devices
announced a multi-billion dollar
partnership to collaborate on AI data
centers that will run on AMD processors.
Under the terms of the deal, Open AI
committed to purchasing 6 gigawatts
worth of AMD chips
starting next year. The ChatGPT maker
will buy the chips either directly
through it or through its cloud
partners.
AMD chief Lisa Su said in an interview
Sunday that the deal will result in tens
of billions of dollars in new revenue
for the chip company over the next half
decade. Part of this, Open AI will
receive warrants
for up to 160 million AMD shares
worth roughly 10% of the chip company at
1 cent per share, awarded in phases if
Open AI hits certain milestones for
deployment.
I have to admit, MG, this latest one
it's got my head spinning. So, let's
just think I can Can we recap? It is It
It is not an investment in Open AI. It
is Open AI's commitment to buy AMD
chips.
But as it buys these chips, it gets
ownership in AMD. Is this
What makes sense to this right? Is this
AMD giving away the company for Open AI
to buy its chips and is that really a
purchase or is it just like
an in So, It's not even
And you go ahead. I'm struggling here.
And again, this this is sort of
late-breaking news. So, I haven't had
too much time to sort of go over the
details of it, but at a high level from
what, you know, the report is here, it
does seem like there's a there's a
number of things going on, as always.
But so, the 10% thing is super
interesting, right? Because that's also
oddly the number that
you know, Intel
you know, was was supposedly selling
to the government, right? Like for for
their deal and
there's you know, there's other
ownerships trading hands obviously
between Nvidia
and Intel and then
a bunch of other stuff going on. So,
it's like it all feels like the same
sort of general playbook just being
executed in different ways where it's
like now all of a sudden ownership is
sort of table stakes to these deals,
right? Even when it's a company that's a
that's technically still a startup in
Open AI, own would be owning up to 10%
of a very public long-standing public
chip company in AMD. And and what on
earth does that look like from a finance
perspective? Like their books, like how
do
it's from again, from what the reporting
is, like they have the right to buy
those shares, I think in warrants. And
so, like I'm not sure that they
necessarily will or but they could and
um
and obviously, as you noted, it's sort
of dependence on
you know, the business agreements
between these two
companies. And then there's like the
other layer where, as as you just noted,
it doesn't necessarily have to be Open
AI that's buying the chips, right? It
could be one of their partners. And so,
I mean, it could be Nvidia technically.
I guess, you know, that would be buying
AMD chips to help put together one of
the Stargate operation things. Like cuz
that's a layer of this, too, right? That
um
again, stepping back at the highest
level, it seems like Open AI realizes
that they need to control their own
destiny in many ways, but certainly on
the cost front. And to the ultimate
extreme, they probably can't be paying
one of the massive cloud providers, be
it, you know, Microsoft as it's been to
date and then sort of Oracle, too, now.
All of them they need to be able to
control their costs in a better way. And
doing that means eventually at some
point sort of controlling your own data
centers
to some extent. And so it feels like a
lot of these deals are coming together
to allow Open AI to put in place the
building blocks to build their own data
centers quite literally. And this AMD
deal presumably is also a part of that.
But again, the wrinkle of it being one
of the partners doing it again, I think
that that's related just thinking on the
fly here, related to Stargate partners
being able to use it in their own data
center. So like Oracle famously controls
the one right now in in Abilene, Texas
that's that's the only one that's
actually being built right now in the
process of being built while the others
are still just sort of being signed and
and squared away. And so again, like
who gets what rights to purchase, you
know, the the processors, who gets
what's rights to purchase the the shares
in AMD, and is AMD simply doing this
again because it's sort of become like
the table stakes thing. And by the way,
it worked in terms of the narrative of
it, right? Like their stock is up a huge
amount right now, is flying because
>> 27% Yeah, right. So like obviously that
comes into play too. They all see that
these deals get done and then the stock
goes through the roof um
because investors are excited all of a
sudden again about about AMD because
they're doing a similar deal to, you
know, what what Nvidia and and Intel and
all the other players have done.
Just want to pause on the 27%. We've
seen this is the second time we've seen
something like this happen, right? AMD's
up 27% today. Oracle of course blasted
into orbit when it made its deal with
Open AI.
Um
We're going to
we're really not going to focus on the
stock market in this show. We're going
to talk mostly about product and and
partnerships. Uh but it is worth noting,
right? Like
this exuberance in the stock stock
market is based off of infrastructure
spend and not revenue. It's all based
off of revenue projections and those
revenue projections are extremely
aggressive, especially when you consider
the fact that enterprises are moving
exceptionally slow here. This is a red
flag to me. And so that goes back to my
post, the reason I wrote, you know,
again off of riffing off of Sam's
comments because the only thing that I
could think about, you know, in my head
of like what they were
you know, presumably talking about with
this new method of financing or
whatever, it wasn't actually new method
of financing, it's it's basically using
debt in a way to sort of get a flywheel
going so that, um you know, obviously
leveraging debt especially for for data
center build-outs and things of that
nature is not is nothing new. But what
you what you're sort of alluding to here
is exactly what might be the new element
of it in that they these players are all
trading revenue and and, you know,
again, it starts with Open AI agreeing
to do these massive deals with another
partner. But as everyone knows, this has
been widely reported, Open AI doesn't
have the money to do these, you know,
the deals to the extent. They don't have
the money in the bank literally to do
the deals,
you know, to the extent that these these
are talking about. And so now we get
these other deals like the new Nvidia
one where it's like they are promising
to, you know, commit up to 100 billion
dollars. It doesn't have to be that
much. It starts with 10, right? 10 it
sounds like is is maybe committed
depending on how how committed these two
are to actually, you know, finalizing
this deal. But it's like 10 comes in at
first and then another 10 comes in over,
you know, and basically over nine
tranches they would get this 100
billion. But the timing of that all like
is there actual money going into bank
accounts to pay for something, you know,
physically being built at some point or
is it all just being based off of like
lines of credit,
you know, essentially?
>> Maybe Open AI is going to pay for these
AMD chips with Nvidia chips. Maybe
they're just going to take one of
Jensen's trucks of chips, drive it over
to Lisa Su, and be like, "We'll take 10%
of your company right now." I mean, if
these chips are really at the shortage
limits that's everyone's projecting,
like they're worth more than their
weight in gold. And so, you know, like
they are somewhat of a of an actual
value store, I guess, in that in that
way. But but, you know, the thing you're
talking about how this makes you
uncomfortable, the obvious elephant in
the room that again everyone will know
is like
if even the smallest slowdown happens,
not not even like a massive correction,
if a slowdown happens in in several of
on several of these fronts, on any
number of, sorry, I should say, on any
one of these like several fronts that
are going right now, it can start like
it seems like it would start a cascading
effect that would potentially bring down
the entire thing. And then we got debt
being called and we got people unable to
pay and we've got new, you know,
contracts being renegotiated and and
people taking out, you know,
does the bank own, you know, do banks
start owning start some of this stuff
and and and does the government have to
step in as, you know, they basically are
clearly open to doing in deals like with
Intel as we talked about. And so there's
all sorts of weird things that are
happening right now that I don't think
that there's a ton of precedent for in
history. Right. And as we've sort of
danced around or even mentioned so far,
there was a very interesting line in the
Wall Street Journal story where the
reporter writes the Nvidia deal isn't
completed yet. The two companies have
signed a letter of intent and have yet
to disclose specific terms in a
regulatory filing. So
is that is that actually happening? I
mean, we can't say for certain.
So and then so there's a few things
here. One, that what is up with Open
AI's letter of intents
like love now, you know, they did the
Microsoft one, they announced with you
know, a couple dozen words that they
they had a agreement to agree with
Microsoft on new terms, but they have no
actual terms to agree upon yet and so
it's not a done deal. Now this Nvidia
one is also basically an agreement to
agree to, you know, a deal. And
you know, you have to sort of wonder if
AMD didn't see that and think like maybe
we should swoop in here before this is a
done deal and sort of get something else
done.
And and, you know, in the report there
they do say like and and I think Altman
I saw it, maybe it was even a tweet or
or he said it somewhere else, but he
sort of makes it clear that
Nvidia is still like a main partner,
right? This isn't like this isn't them
switching horses, you know, in in the
middle of a deal being done. But there
is, you know, to to continue the
analogy, there is some level of
jockeying that it feels like is
happening here, right? Where it's like
again, maybe Lisa Su saw that this deal
was not finalized and so she could sort
of come in and say, "What can we do, you
know,
alongside this if nothing else, if we
can't take some of this business?" Then
there's a whole like this is apparently
for inference and you know, obviously
Nvidia is in that game too, but wants to
be on that game like they do with with
actual
um model training right now.
You know, and so there's that whole
element, there's the element of the
Broadcom deal that that Open AI has,
which maybe kickstarted some of these
Nvidia deal talks between Open AI and
and Nvidia so that they didn't go down
the path fully of making their own
chips. It sounds like they're still
doing it, but maybe not as fast as they
would have previously because again they
want to own the whole stack as we talked
about. So, yeah, lot lot going on.
Now, I'm not saying it's going to
happen, but I do think that you could in
your mind imagine a scenario where you
connect all these dots
looking backwards from you know, in the
future where there is a collapse here
and you could say how did we not like
think this was a blatant collapse
waiting to happen. Letters of intent,
the losses, the size of the investment,
the fact that enterprises struggling to
implement this stuff. Yes, ChatGPT or
Open AI is going to bring in 13 billion
this year, at least it's on on track to
do that, but it's going to lose
according to reports 120 billion by
2029. Um again, like the caveat we
always say, and I think this is it's a
very freaking important caveat, is that
the technology is real. ChatGPT and and
and all of these GPTs are all these LLMs
are getting getting better as we go, but
the financing definitely is is wonky, to
say the least.
>> Yeah, and it feels a bit like, you know,
when you do slow down for a second and
try to think about this, it feels like a
shock and awe campaign meant to leverage
speed. And I do think that this is
basically what Open AI is running a
playbook of of like leveraging the fact
that as they keep talking about like
this is a unique moment in time. We need
to move as fast as possible. We have
there's so much this is this is the race
to AGI or superintelligence and and we
need to do this right now. We can't
wait. If you're waiting someone else is
going to step in and do these deals like
you're either in or you're out and
just using that time pressure to
basically force
the hands of people into pretty
uncomfort what would normally be pretty
certainly for a CFO a very uncomfortable
calculation to to make in these
situations. Right. And I guess there is
some logic to them doing that, right?
And it is the competition.
>> It's the competition, right? And there's
this there's this account that I follow
on on X or seems to pop up in my
timeline all the time. Can't tell who I
follow anymore because of
our algorithmic overlords, but it's a
person's name is Burkov. And Burkov
says, "Google, Anthropic, and Open AI
are currently fighting a war of
attrition. The problem for the latter
two is their cash comes not from
clients, but from investors, while
Google is profitable and no longer
losing
users. Add this to the fact that among
the three only Google has its own
infinite supply of GPUs for the price of
peanuts, and draw your conclusion on how
this war of attrition will end." Now
obviously this person is is very bullish
on Google winning this this moment. It's
quite possible.
But I think maybe that's the sort of
OpenAI fully understands the fact that
it's matched up against them. By the
way, also OpenAI also I'm sorry, Meta
and Elon and then you sort of see why we
have this rush the way we do. It's a
It's yeah, completely unprecedented to
have this many massive players with this
amount of capital being able to be put
to work. But I totally agree with that
stance and I've written a little bit
about this like the even before um yeah,
the riffing off of Sam's newest post, it
was the the main thing I've been sort of
dancing around and and finally was able
to put this down. But it's like it
really does feel to me at least at this
moment in time
given that Meta obviously is struggling
a bit but is trying to reboot the
system. Elon like they're losing a lot
of people. Like there's a lot of weird
stuff going on there. There's a lot of
spend going on there. He can fundraise
like no other of course. So, you know,
he's he's good for it now. But like
there's weirdness there. Anthropic is a
different beast it feels like, you know,
but their market their new marketing
campaign sort of plays to that. Like are
they going to be now set up as the the
anti-OpenAI type play um but at a lower
level. And then So, to me anyway, it's a
long-winded way of saying it feels like
this is basically right now as it stands
a two-horse race between OpenAI and
Google. And I do think that OpenAI looks
at Google and just says like, "Oh my
god, they have everything that they need
to do this at scale." While as you noted
not having to burn investor capital.
They had they made they're insanely
profitable. They can do this on their
own. And by the way, unlike Meta which
is also profitable and Zuck talks up
like, "Yeah, we can we can fund this via
profits." which is true. But they don't
have the cloud infrastructure that
Google does and they don't have the the
TPUs that Google does. And they don't
have all of the sort of other various
expertise to sort of scale the this type
of um
unprecedented massive build-out scale
that Google is able to do. And so, I
think Sam and and everyone else at
OpenAI just says like
there's a lot going on. All these things
are are varying degrees of of noise um
and some is real competition. But Google
is the one that really has the
opportunity. And so, my headline idea
was basically
OpenAI needs to build Google Cloud
before Google can build ChatGPT. And
that's like how it goes. Yeah.
>> Couple more things on this. It's just so
many interesting aspects to this.
Um and that and speaking of Sam Altman
Kremlinology, let's take a look at the
tweet that you referenced. Excited to
partner with AMD to use their chips to
serve our users. This is from Sam. He
says, "This is all incremental to our
work with Nvidia and we plan to increase
our Nvidia purchasing over time." An
astute X user said, "Everyone is scared
of Jensen. This post mentions Nvidia
more times than AMD despite the deal
being about AMD. Jensen might bump them
down in the preference list due to
this." What do you think about that?
>> Yeah, and I'm glad you found that one.
Cuz yes, that I think I saw that
quickly. And that is a great point about
it. And and that's another thing that's
at play here like and also why it felt
like at least a part of why OpenAI and
Nvidia struck that deal. It's like
right now, if you want to be a main
player in this game, you've obviously
got to work with Nvidia. And as everyone
knows like while they'll they say they
don't play favorites like if they're
going to invest whatever $100 into you
like you're going to get access to their
chips. Like they're not going to screw
you over. But if you did a deal with
AMD, you know, behind their back, like
maybe you're not first in line for those
chips anymore. And so, I think you have
to sort of like you have to do with
President Trump. You got to sort of do
the public uh fealty and and show uh and
show who's really in charge.
Okay, here's my last question about
this.
Why would OpenAI want to own 10% of AMD?
I cannot figure out why it is
advantageous for them other than uh I
don't know. You tell me. What what's the
deal?
I'm sort of at a loss too for that. I I
think like again, the only thing I would
come back to is what I said earlier.
It's like this is now become like a
weird table stakes thing of like these
companies trading ownership, you know,
in quite high percentages of ownership
within, you know, each other.
There's there's going to be subsequent
reporting about this obviously as to why
that part became a a big part of it. But
it does It's like I think Lisa Su has a
quote in there of like saying that it
aligns their interests because OpenAI,
you know, will now obviously have a
potentially have an ownership stake in
AMD. And so, they'll be aligned about
like, you know, making sure that
they're along for the ride, you know,
wherever that ride takes them.
I guess. But like yeah, that's it's a
public company selling up to 10% of of
their shares. Uh it's like And again,
it's a private company buying. It's like
very very strange. I guess OpenAI might
like it because it's like just something
else to have on the balance sheet when
if and when they go public and they can
say like, "Look, we have these shares.
We're 10% of of AMD and it's worth X,
you know, hundreds of
whatever it is billions of dollars." and
uh I I don't know. I'm I'm sort of
drawing a straws here.
Right. And now Microsoft and Nvidia are
going to own AMD as well for the money
that they put in help OpenAI build AGI.
Well, if you don't get AGI, you can get
some AMD shares. It's a not the best
consolation prize but worth worth more
than nothing.
So weird.
Okay. Uh what is this compute going to
be used for? On the other side of this
break, MG and I are going to talk about
Sam Altman and Jony Ive's attempt to
build an AI device. And but why uh that
is running into trouble because of a
lack of among other things compute.
We'll be back right after this.
And we're back here on Big Technology
Podcast with MG Siegler. He's the author
of Spyglass which you can find at
spyglass.org. Lots of great stories in
there. Really a an impressive September
from you, MG. I just like going through
the stories before we talked. And uh I
you are my go-to source for
basically everything that's happening in
this crazy world including this uh very
interesting report that we have coming
out really over the weekend today
uh about how
Sam Altman and Jony Ive are hitting some
uh speed bumps, shall we say, with their
secretive AI device. I'll read from the
FT briefly. OpenAI and star designer
Jony Ive are grappling with a series of
technical issues with their secretive
new AI device as they push to launch a
blockbuster tech product next year.
Their aim is to create a palm-sized
device with a screen that can take audio
and visual and visual cues from the
physical environment and respond to
users' requests.
Uh OpenAI and Ive have yet to solve
critical problems that could delay the
device's release though. These include
uh deciding on the assistant's
personality, privacy issues, uh and
budgeting for the computing power needed
to run OpenAI models on a mass uh
computer device. And there's a person
that tells uh the FT, somebody close to
Ive, that uh compute is a huge factor in
the delay. Amazon has the compute for
Alexa, so does Google. But OpenAI is
struggling to get enough compute for
ChatGPT, let alone an AI device. They
need to fix that first. All right, we're
going to talk about the nature of this
device cuz we're getting like a picture
of what it's going to look like. But
first on the significance of somebody
close to Ive complaining to the FT that
OpenAI doesn't have enough compute for
this device to run.
That to me is is pretty interesting and
I think not a good sign. And this is a
multi-billion dollar tie-up. It's not a
good sign for the fact that somebody
close to Ive is saying this. You know,
for a story about the device hitting
speed speed bumps. What do you think,
MG?
Yeah, um yeah, the behind-the-scenes
element of that is is super interesting.
You have to wonder. It It to me it sort
of
felt almost as if it's um you know,
prob- I'm I I don't want to say it's an
intentional leak, but I do feel like
it's directionally interesting that uh
they're basically telling the market
that this device is not going to be on
time. Like it cuz their original
reports, right, were that it was going
to be probably sometime at the end of
next year, the end of '26. And so, you
know, this to me signals that this is
more like a 2027 type thing now. Um and
I I think that that sort of quote maybe
uh
helps that, you know, get out there so
people aren't expecting, you know, have
a countdown all of a sudden a year for a
year from now when when this device
doesn't hit the market. Um but I also
think like there's a lot in that in that
report including yeah, like what this
device, you know, potentially is. They
don't come out and say it directly, but
you know, a lot I think a lot of us who
read those original like reports when
the when the two sides both started
working together but then obviously when
the acquisition happened, which also
feels like 20 years ago but was only a
few months ago, which is again wild. Um
but I think, you know, we all sort of
zeroed in on it being not necessarily a
wearable even though that was, you know,
what Meta and and, you know, others were
working on.
But that it could be some sort of thing
that's
um you know, a voice-first device that
uh you carry around alongside at least a
smart certainly a smartphone. So, it's a
a complementary device to a smartphone.
And
um so, there's there's that element of
it. And then yeah, the data element of
like what would be required to make this
work. It's sort of
I'm I'm curious why that
compute complaint is in place other than
the general compute complaint that we're
seeing with Sora and everything else
right now, right? Like they're always
compute constrained to some degree. And
you know, right now they're rate
limiting the creation of Sora videos.
They They just jumped it down, I saw
recently, from 100 in 24 hours, cuz I
keep hitting it, to now it's 30.
And so, they're really feeling
constraints, it feels like, or feeling
the the compute pressure on that. And
so,
with this presumed voice-first device,
the
the report is that there will be cameras
involved with it, too. Like, is that
really going to be that big of a data
hog? And maybe the part of it that is is
the fact that it's apparently always
listening, it's always on, always maybe
recording.
So, that's maybe part of it, but it's
it's a curious It's a curious bit of
reporting that that that's like the
issue, one of the main issues. Right. I
And I think what you're getting at is
the compute shouldn't be the main I
mean, obviously, it's an issue. It
shouldn't be the main The main thing
that would stop a rollout, yeah. They
could just limit it.
>> Yeah. Right. And even if it was and you
and someone from Johnny Ive's team
wanted to leak out that we're having
some issues. Um
you know, the fact that they the leak
was not just we're delayed, but
finger-pointing to me points to the idea
that these teams aren't working well. I
mean, like, if you have a sports team
and they collapse, right? A sports team
that loses a couple games, you hear the
athletes and they're always like, we
need to do better as a team, we need to
get better. And then let's say they lose
six games in a row. And I'm familiar
with this, cuz all of my teams lose six
games in a row. That's when they start
finger-pointing. And they say, well, the
defense wasn't holding up, it's part of
the bargain, or, you know, we we really,
you know, our our hitters at the bottom
of the order need to need to come
through. And and for them to say, uh
OpenAI is struggling to get enough
compute for ChatGPT, let alone an AI
device, they need to fix that.
Oof. That is that the fact that someone
would go to the FT with that is is, I
think, fairly concerning. Hearing you
say that now, it sort of brings into my
mind like the idea of sort of what we
were talking about with Sora, cuz that's
like the the prime example of of their
compute constraint at the moment, at
least forward-facing wise. But it sort
of feels like
okay, there's all these different things
going on at at OpenAI at the moment, and
now famously they brought in another CEO
to help to help deal with all that in in
Fiji Simu Simu. And
um so, it feels like there's maybe some
jockeying happening for making sure that
each team gets their level of compute
that they want to get or feel like they
need to get in order to
to fully be able to to bring their
product to market. And again, like, that
happens to be the time when Sora is
really sort of just blowing up their
servers at the moment, but obviously
they're working on other models, and
there's other needs for compute that are
going on behind the scenes. There's
other products, there's all the agentic
work that they're doing.
And you know, it feels like maybe this
is just a way to ensure that like, hey,
you guys spent a lot of money to bring
on the IO team.
We need our to make sure that we have
our our resources, too.
Yeah, I think that's the right
>> feel like they're not getting them for
some reason.
>> Now that you contextualize it, I think
that's that's the exact right read, and
it sort of sparks in my mind the fact
that this has always been an issue at
OpenAI, teams fighting for compute. And
I think the safety teams, you know, of
yesteryear that got upset and left,
got upset mainly over the fact that they
didn't have enough compute to
either steer the product roadmap or do
the checks that they wanted to or the
experiments that they wanted to. So, And
it's also like what what Microsoft You
know, remember like that's what OpenAI's
main complaint about was was with
Microsoft, like that they're not getting
the resources that they need, and they
feel like they're, you know, Microsoft's
working on their own projects, and why
aren't you being fully committed to
helping us? And and, you know, so, now
it's moved internal.
Right. And let's talk a little bit about
what this device is, cuz we we did get
some interesting detail about what it's
going to be. So, this is from the FT
report. It's roughly the size of a
smartphone. Users communicate with it
through a camera, microphone, and
speaker. It is designed to sit on a desk
or table, but it can also be carried
around by the user. The device is always
on. Rather than triggered by word or
prompt, its sensors gather data through
the day that would help it build its
virtual assistant's memory.
One issue
is ensuring the device only chimes in
when useful, preventing it from talking
too much or not knowing when to finish
the conversation, an ongoing issue with
ChatGPT. It's interesting. Um
Sort of reminds me of the the friend.com
pendant.
>> Yeah. Yeah.
>> For sure. Friend, Limitless, there's a
there's a few others, right? And
obviously, Humane, RIP, and
and and Rabbit,
which also feels like decades ago that
that came out.
But yeah, there It does Again, this it
feels a bit obvious that this is the
path that they were going to go down. Um
I I feel like this is And and I'm
somewhat biased, cuz I've like long
written about this, dating back a
decade, where I thought that there would
be like, you know, these vocal computing
devices, not just Alexa, but like, yeah,
on the go and and always on you type
things.
And it hasn't played out exactly that
way yet, but I do Again, I feel like
it's just a matter of time until someone
nails these. And I do think that when
Chat when OpenAI rolled out GPT-4o, and
alongside that they did the voice
element of it, which obviously they fame
infamously got in in trouble with for
the Scarlett Johansson voice, which is
what mainly what people remember now.
But if you remember back then, you know,
it was about a year a little over a year
ago, I think. It was um it was just an
insanely impressive like voice
technology, right? Compared to what the
state of the art had been up until then.
And it's been, you know, getting better,
and now obviously Gemini and everyone
else has it integrated within their
systems as well. But it feels like
Alexa and Siri and the first sort of
versions of these these types of vocal
computing devices they focus so much on
like the individual devices and the sort
of rudimentary utility stuff.
I just triggered all of my devices in my
office here. But
and so, once once they did that, it sort
of held them back from being able to do
like the newfangled versions of these.
Obviously, they couldn't have known at
the time where LLMs would go and and how
this would how this would evolve. But it
feels like with that GPT-4o rollout all
that time ago and now the continued
evolution, the voice computing element
is there where it needs to be for a
device like this to work, but the
hardware part is now the hard part,
which is always the hard part. But, you
know, companies like Amazon or Apple or
Google can figure that out, cuz they
have their massive companies at scale.
Question is if OpenAI can do it with the
team that Johnny Ive they acquired with
Johnny Ive's team, and the team, most
importantly, that he brought over from
Apple, who's done this at scale for
decades.
And this brings me to this idea that
they're all sort of all these products
are consolidating in some way. Like, we
just named a bunch of companies, OpenAI,
Amazon, Google, Facebook, Apple.
They're all It seems like they're all
building the same thing. And and so, the
the hardware might be the tough part,
but then you sort of
you'll eventually probably differentiate
based off of the assistant inside. And
this was your take about what's what's
going on with with the OpenAI device
compared to the Apple's Apple device
that we're going to see. So, so you
write, "Just imagine a world in which
Johnny Ive introduces OpenAI's first
hardware, a small, screenless digital
companion for your life, at the same
time that Apple unveils their next
hardware, a pair of glasses with cameras
on your face, and perhaps a screen in
your eye. One runs on ChatGPT, the other
on Siri. That would be quite the
dichotomy."
And it's sort of angling that way,
right? Like, these the timelines are
sort of starting to line up, especially
with the fact we're talking about with
delays, you know, potentially to
OpenAI's device, and where we know that
Apple, from the, you know, most recent
Mark Gurman report, is
is dropping sort of Vision Pro work to
to go full full steam ahead on these
these smart glasses to compete, you
know, presumably with Meta,
and meet them in market. And there's the
whole subtext thing going on with Johnny
Ive being, you know, perhaps upset about
the world that he helped usher in,
right? With screens and and everything
else with the iPhone. And the fact that
not only is Apple now, you know, going
full steam ahead on on glasses with
cameras, but if they're
you know, again, the reports are that
they're going to go down the path that
Meta just did with with the screen in
the eye. Like, now we have screens in
our eyes. And and Johnny Ive is making
trying to make a device with zero
screens. Um and so, that is a very
interesting budding budding of heads. I
I would The only other thing I would add
to that that I didn't write about in
there, but I would be
I'm slightly concerned that there's too
much focus on it being a screenless
device, perhaps, right? Like, I'm not
saying that it needs to be another
smartphone, certainly. And I do think
that there's probably a world, and I
think there's increasingly a world where
people are maybe, you know, happy to
move a at least a bit away from from
being reliant on a smartphone. But I'm
also worried a little bit that it would
be harder to use with zero screens. You
know, like, there's sometimes when you
just need a screen for something to
showcase versus doing it orally or um
or via another mechanism. Now, maybe
they could say, well, they'll send a
notification to your phone if they if
there's something they need to show you
or something like that. But I'm a little
worried that it's it's it's trying to do
it just to make a point about
anti-screens. At the same time, the
other the flip side of that would be a
screen, as everyone knows, is the
biggest battery draw of any of of
devices. And so, like, if they could do
it without a screen, they could do a lot
better in all day battery life and maybe
week battery life. I think they're all
going to go screen. I remember when
Amazon announced the Echo device and it
was so cool because it glowed at the top
and talked to you. And we had Panos
Panay from Amazon, the head of devices
and services, on the show in March and
he beseeched me to go get the Echo Show
with the screen and said the experience
wasn't going to be the same without. And
I I think all these devices will end up
getting there. And it's it's just kind
of interesting how they're all
converging in their own way.
Let me see if I get this right. You have
OpenAI pushing Apple on the assistant
device. You have Meta pushing Apple
towards glasses. You have
Amazon getting pushed by everybody to
have a better Alexa. You have Google
kind of standing out there to the side,
but it has
ambient Gemini and is also working on
glasses. And Amazon apparently is Amazon
is working on glasses.
>> on glasses. Yep.
Is the is
is the tech world just is are all tech
products and services just converging to
this, you know, eventual yet to be named
singular interface with assistant
inside?
Um that
that actually reminds me of
one one subpoint of my piece, which was
um
while I just said, you know, the the
negative side of like the no screen
thing. I do think it's interesting that
OpenAI is trying to go down at least a
little bit different of a path. Like you
won't see, presumably unless there's
success from it from someone, be it
OpenAI or someone else, I don't think
you'll see Apple do like yeah, like a
screenless AI device. I don't think
you'll see Except for the glasses. They
could do the glasses with no screen.
That's true. That and they it sounds
like the first version will be. But I I
mean like
a
sort of a secondary piece of hardware.
Yeah.
>> exactly what is rumored to be, you know,
what OpenAI is working on. It feels like
they're the only ones besides those
startups as we mentioned that are going
down that path at least right now. Now
you could say Alexa
God, I'm going to trigger it again. Is
sort of like that in a way, right? But
it's obviously meant for to be plugged
in and and you don't take it with you.
But I think you're right. Obviously
everyone is is sort of
coalescing around these same ideas,
including the startups all working on
the things that we noted. Um and the
answer to that is like I just think
everyone is still trying to figure out
like what the next device is. Despite
all of the AI hype and and everything
that we've been talking about and
obviously everyone, you know, we're
we're real believers in it, but we're
we're unsure about the the financing
models for it, but everyone believes in
the technology angle of it. But it's
still at the end of the day people are
looking for the next device because they
think that this can be the next thing
that becomes like the massive platform
and the next iPhone, right? And
I'm still of the mindset that's the more
boring mindset that's like nothing's
ever going to be the scale again of of
what the iPhone achieved and instead
it's going to be all of these devices
all a bunch of different devices,
including glasses, including your
smartphone, and maybe
you know, potentially including a
a chat
pin, walk around thing, desktop device,
whatever it is.
And and several other things, you know,
along those lines.
So
yeah, I think that they all just feel
like they need to have these
initiatives. You mentioned
Amazon cuz they, as you noted, like they
they sounds like per reporting they do
have a glasses project as well, but they
hired the Jay Allard, which was a name I
hadn't heard in years and years out of
Microsoft to work on, you know, these
new some sort of new ideas around
devices and and AI and whatnot. Yep. So
they do have So
here's a plug for for an upcoming
episode. Panos Panay is going to come
on. I just recorded with him in New York
following the Amazon devices event. And
we do talk about that workshop that they
have where they're trying to figure out
the future of the new AI device. And we
had a really interesting interaction.
It's kind of fun where I said, "Well,
what do you think about pendants?" And
he goes, "Oh, you're really trying to go
all over the place here." And he goes,
"Pendants, hmm." You know, so anyway, I
encourage people to tune into that
because
it does seem like they're at least
considering a pendant there. Um but you
know what's going to be interesting?
It's going to be the design philosophy
of all these companies. Like you wrote
in a post about how Amazon said, "Let's
just get it out. Let's get Alexa Plus
out there after they saw that Apple,
you know, didn't
release or or get as much of Apple
intelligence out out there and they got
killed Right. Um I I'd actually I I want
to end with a couple things. First of
all, I want to get your take on Well,
second of all, I want to get your take
on the Vision Pro before we leave
because
we've said it a couple times a couple
times on the show that Apple has
deprioritized that, so we should at
least take a moment to talk about what
that means. Um but before that
it's just very interesting to see Meta
pushing Apple in these directions. And
so I'd be curious to hear your
perspective on like where the you know,
it's really a blood feud in my
perspective. Maybe that's too strong of
a term, but where the Meta versus Apple
uh
product war stands and how you think
each one of those companies product
philosophy will be an advantage or a
disadvantage as they move forward trying
to ship these AI devices.
Yes, so I've written about this a number
of times dating dating back a few years
now.
Basically, you know, once
um once Apple tried to destroy Meta's
advertising business,
it felt like that was the kickoff of a
real cold, you know, not even cold war,
a hot war in in many ways that's that's
been happening. I think at the highest
level for Meta, you know, Zuckerberg has
said it multiple times from on Joe
Rogan's podcast no less, like talking
about how they feel like they're in a
just terrible position because they're
beholden to Apple and to a lesser extent
Google in terms of the smartphone, you
know, needs for their products. And it's
not just for distribution of their apps
anymore, it's now for things like their
glasses where they feel like they can't
have the same level of connectivity that
like an Apple Watch does because they're
not first-party hardware.
You know, and they and they can't tap
into the iPhone the same way that Apple
itself can with, you know, low-level
Bluetooth and all these other things
that they use for connections. And so
I think that Meta has been trying
basically anything
to make, you know, something that could
again replace that smartphone as the
next computing device. And again,
Zuckerberg has not been shy about
talking about that. I'm super skeptical
as we just talked about that anything
will ever get to that scale, but I do
think that Meta has done a good job and
an admirable job, by the way, of
sticking with it, right? Like lots of
companies, famously Google, you know,
with Google Glass and and their own VR
efforts, like they just do something and
then when it's not working, they back
away. And, you know, there's something
to be said for that, too. But a lot of
these newfangled devices, it just feels
like they will never work unless someone
just continually pumps in the billions
required to sort of be in the right
place right time, right? So much of this
is based around timing as as so many
things in in the world. And I just feel
like a lot of these devices have never
worked because they're not right place
right time. And people give up before
they would ever be in the right place
cuz you can't really time the markets,
right? You can't know that it's going to
be the right time for it. You can, you
know, do as much as you can to try to
make it the right time for you. But
but again, Meta, to their credit
has poured almost maybe a hundred
billion dollars now into their efforts,
you know, in terms of the Quest
headsets, but now also with the glasses
and and all the other projects in the AR
glasses that they're working on. So
credit to them for for still trying to
do it. I'm still a little bit skeptical
about what scale they can get to with
that and if they can ever fully truly
break yeah, the the need to be paired up
quite literally with Apple and or
Google. Um
And it feels like it's going to be a
long time at the very least until they
can get to the let that that part. I
haven't used the new glasses yet.
Curious if you have, but like you know,
they're impressive it sounds like
they're impressive. It sounds like the
technology is is impressive, but it also
doesn't sound like the type of thing
that's you know, people are going to
leave their smartphones behind anytime
in the next 5 to 10 years. Yeah, I I
haven't used them yet, but I actually
want to pick up on a on a item that you
put in a recent post about it that I
think Exor Luxottica actually balked at
the idea of naming the latest generation
Ray-Bans because they were bulky and
then Meta sort of floated some money
towards them and all of a sudden Right.
That again, another another tech company
that owns an ownership stake in a in a
public company. Exactly. And and so I
think what I draw from that is
what might be playing in Meta's benefit
here is they don't have a standard.
You know, they don't have to worry about
decades of a design legacy that they
have to uphold to make something feel
Meta-ish. They're just like all right,
if these are ugly as hell Oakley glasses
that, you know, talk back to you and
some people like them, let's just do it.
And that sort of, I guess, spaghetti at
the wall type of approach
I I think is a very interesting contrast
to the it has to be perfect way that
Apple is developing things. Yeah, and
one riff off of that idea is I do think
the smartest thing that they did was
partner with Exor Luxottica because the
the biggest strength that Apple
obviously has beyond all their in-house
expertise is also their retail channels,
right? Like they can move product
because they have stores around the
world and they can ship something and it
be in every single country basically
around the world aside from I guess
Russia and maybe a few other places, but
um but uh Meta has has one store or a
couple stores, right? And even Google
has just a few a handful of stores. Like
no one else has that capability. So Meta
smartly, it's not just the design of the
glasses, which obviously mattered too,
like, you know, in getting to use the
Ray-Ban brand, but it's also the the
foot the retail footprint that they can
get from that partnership is was a
hugely smart thing. And it's something
that I've been wondering about when
thinking through the what Apple does
with smart glasses. Like, do they also
do some sort of partnership there? Not
because they need it from a distribution
perspective, but more because like Meta
has now set a standard in a way that
look, you're wearing the same brand that
you wore for your regular sunglasses or
your regular glasses, but now they have
these these tech-enabled things. And
like Apple, as great as they are at
design, like
do people you know, like there's the
difference between wearing an Apple
Watch, which is you know, well-designed
and stuff, but it sort of resides under
your shirt. Um
and uh there's a very different thing
between something that's right on your
face all the time. And obviously Google
ran into that headfirst,
pun intended, um
you know, with with Google Glass. And I
think again, Meta was very smart in in
out of necessity. They had to be smart
about that partnership. And so what does
Apple do there with uh do they have to
cut a deal
um to do a partnership in a similar
vein?
Okay, a couple more minutes left. Let's
just do the direct room for the Vision
Pro. I I remember back in the day
hearing Apple make lofty promises about
the future of uh spatial computing.
Wasn't the metaverse, it was spatial
computing.
>> It's right. Um this big vision. And now
the Vision Pro's been a disappointment,
but not only that, it seems like it's
going to be deprioritized within Apple's
suite of products. And uh you even
suggested one of your recent posts that
this might be it for
Yeah, and I you know,
uh Gurman and others have said like
look, they're still committed. They're
obviously about to release a new version
with just an upgraded chip. It's
apparently going to have a slightly
better headband, which is nice cuz the
the current one is not any good, but um
but beyond that it'll just be a chip
upgrade. Um the one that you're talking
about, of course, is that they're
they're going to at least put on the
back burner the idea of a Vision Air or
just the Vision without the Pro part of
it, the slighter this the smaller,
lighter, and potentially less expensive,
um you know, version to actually scale
this thing. And I think that they just
probably looked at the market and said
like obviously where we're at right now
with the Vision Pro is not where we want
to be. Um but even if they did a
quote-unquote Vision or Vision Air, and
say it was like even a thousand dollars,
do you think it's going to be a massive
scaled, you know, hit device? I don't
think that it would be. And so I think
that they're being realistic about that.
And you know, as you're talking about,
Meta sort of showed them what the market
is like for at least for the foreseeable
future in terms of a wearable on your
face.
Um and again, others had tried. We
talked about Google Snap, of course, was
was an early mover with Spectacles and
still trying it. Um
but Meta really sort of nailed, I think,
both sort of a technological um
perspective, ease of use, uh the
partnership angle, and timing again. And
I think the the for the Vision Pro, when
we talk about does it ever
ever go anywhere? I don't think that
it's going to go anywhere anytime soon.
And so it's a matter of if Apple does
hit with something like the smart pair
of smart glasses and the next version of
it, I I wouldn't be shocked if they do
just backburner the notion of the Vision
Pro. It's still there as like a legacy
product. It's all roped into this Vision
quote-unquote Vision umbrella of like,
well, this is just the the high end of
what we always wanted to do. And and you
know, we're working at it on on multiple
fronts. It's too bad because I do feel
like they've started to come into their
own and with some of the content. And
they're getting better about it. But the
device itself is just way too bulky, way
too heavy.
Everything about it is just inconvenient
to use. And it's just the time the
market completely wrong. And obviously
they couldn't have known AI was coming
as in as hot as it did, but like
you know, they they went all in on this
product. And they probably shouldn't
have done that.
And you know, we said to start this
episode that the past
month or 30 days or whatever it's been
has been crazy. And so
uh
it's hard to possibly capture all the
action that's happened. And and I I I
think that we'll we'll have the the same
thing repeatedly month month on end
because
uh none of this seems like it's slowing.
And uh MG, it's just great to be able to
break it down with you uh every month.
So So thank you so much for coming on
the show. Of course. Thanks as always,
Alex. And I'll see you in a month. We'll
see what's up.
>> All right. See you in a month. And
folks, uh remember to check out
spyglass.org. You can set up sign up for
MG's newsletter there, become a pro
subscriber like I am, and get the uh
added added articles and added insights,
uh which I highly recommend. All right.
On on Wednesday, uh Anthropic uh chief
product officer Mike Krieger is going to
be on if all goes according to schedule,
talk about the company's latest model,
and and discuss the fact that we've gone
from Sonnet 4.0 to 4.5 in a very short
amount of time, and whether the AI
product release cycle is speeding up.
Thanks again to MG. Thank you all for
listening. And we'll see you next time
on Big Technology Podcast.