Dario’s Choice and Anthropic’s Future, Apple’s AI Devices, Netflix Loses WBD
Channel: Alex Kantrowitz
Published at: 2026-03-04
YouTube video id: Pzhr1_MwmBk
Source: https://www.youtube.com/watch?v=Pzhr1_MwmBk
Anthropic's war with the Pentagon hits another level. Apple's preparing three AI devices, but the iPhone might be the killer feature, and Netflix will have to go forward without Warner Brothers Discovery. We'll dig into what it all means with Spy Glasses, MG Seedler, right after this. Welcome to Big Technology Podcast. It's the first Monday of the month, which means MG Seagler from Spy Glass is here to break down month's news with us. And boy am I glad that we have an episode for you today because it feels like a year's worth of news has happened over the weekend since we last left you on Friday. The Pentagon declared Anthropic a supply chain risk, making it clear that Anthropic was not able to work with the government or its contractors on government work, which is going to be a major hit to the business if it holds up. We also have OpenAI coming in and signing a very similar deal to the one Anthropic was just about to sign with the Pentagon. So, we're going to dig into the latest in that story and what the implications might be for Anthropic and the rest of the AI industry. We'll also talk about Apple's forthcoming AI devices. It's a set of them and Netflix, of course, losing the deal with Warner Brothers. Discovery is paramount. Swoops in and pays a lot of money for that shrinking property. All right, MG, great to see you. Thank you for being here. >> Great to see you, Alex. As you know, I'm happy to be here. As a week ago, I was in Dubai. So, uh this is uh you know uh my family was lucky in the timing of of getting out of there, but uh you know, obviously thoughts with all the people over there and it's a it's a terrible situation. Of course, >> definitely. No, I'm I'm very glad that you and your family made it out and um yeah, it seems like it's not just military infrastructure um but civilian hotels, airports, even a data center, I think an anthropic data center was hit. So, we we will talk about Oh, right. an Amazon data center that may or may not have been serving Anthropic. Um, let's let's pick up because uh let's pick up on this story of Anthropic and the Pentagon because we now have some more news about what exactly led to the dispute and what the fallout might be. We have we have movement, right? Anthropics lost the deal. Not only that, they can't work with the government anymore, maybe. Uh and OpenAI has now picked up that uh that deal. So, let me just uh take you all through what exactly happened because there's this Atlantic story inside Anthropic's killer robot dispute with the Pentagon. They say on Friday morning, Anthropic received word that Pete Hexath, Secretary of War, his team was going to make a major concession. pledge not to use Anthropics AI for mass domestic surveillance or fully autonomous killing machines, but then qualify those pledges with loopholey phrases like as appropriate, suggesting that the terms would be subject to change based on the administration's interpretation of the given situation. And here's where it goes off the rails. But on Friday afternoon, Anthropic learned that the Pentagon still wanted to use the company's AI to analyze bulk data collected from Americans. This could include information such as questions you ask your favorite chatbot, your Google search history, your GPS tracked movement, and your credit card transactions. All of which would be cross referenced with other details about your life. Anthropic told uh Anthropic's leadership told Hegs the team uh that told Hegs team that was a bridge too far and the deal fell apart. Um, just to pick up my perspective from Friday where I said maybe there's not really a there there and this is, you know, likely, you know, positioning in marketing. Um, I think there's more of a there there. It does seem like this is a good line for Anthropic to draw. However, you know, as I kept reading more about this, it just seemed to me like this is a deal that did not need to fall apart, that there were ways to word the deal, that you could basically include the carveouts that everybody had agreed to, uh, and it would have been fine. But the Pentagon just set this deadline for Friday at 5:00 p.m. and it stuck with it. Basically, Daario didn't return their calls in the way that they wanted. uh and then they went nuclear, substituted them out with open AI and declared them a supply chain risk. That's that's sort of my perspective on on where we stand today. Do these details uh change your have have any change for you MG in the way that you see the story and what's your general read on where it is and where it's going. So, I haven't actually written about this in part because I'm still feel like yeah, it's obviously we're all digesting it a bit in real time and it's a delicate situation given what we just talked about sort of with the the situation in the Middle East going down. Uh it does seem I mean obviously the timing of that you note the Friday deadline. It's w the most wild thing to me about all of this is that uh you know Secretary Hegsith is going through with um these negotiations in the middle of major preparations for war. Obviously, I mean, we didn't necessarily know that at the time, though, you know, clearly there was the buildup happening and and you know, in the middle of getting ready for these these strikes, they are going back and forth with a, you know, an AI technology provider um to try to get them, you know, to agree to to terms. And so, you know, part of me, a cynical part of me wonders if you know, they weren't using that. Not that they would disclose anything like that to to Anthropic necessarily, but like that they knew that this was sort of coming and so they knew like we need to both we need to get something done now because we're probably going to be using some of this technology in the forthcoming you know war preparations and execution of the of the war strategy. um and or you know is this going to be the best position for us to sort of lay down the terms that we want and and maybe Anthropic will have to sort of yeah just yield a bit easier but uh maybe he hadn't done enough uh research on on on Daario listen to your interviews and and many other interviews to know like what uh what the his response was likely to be to sort of these types of ultimatums. Um, and so yeah, it it does feel like a bit that they probably could have hashed this out, but I do wonder again if the timing of the macro stuff of of the actual war and attack situation uh just added the time pressure um necessarily to some of this. >> Well, this is interesting because they actually did end up using anthropic in these strikes, >> right? And uh and last week on Friday I said uh it actually anthropics use was limited because I was reading the reports saying that Palunteer has Anthropic involved and that was what started this entire discussion because Palunteer systems were used in the capture of Maduro and Anthropic had some questions about how they were used. I think uh I got I I won't say I got that wrong but I had an incomplete picture of of how deeply integrated anthropic already is in the US government and this stunned me. Uh this is from this is from the Wall Street Journal. US strikes in the Middle East use anthropic hours after Trump ban. So by the way the ban and we'll talk about this is going to be six months from now right that they can't use it. But um already at within with the Iran strikes they are using anthropic. Here's the Wall Street Journal story. Within hours of declaring that the federal government will end use of its artificial intelligence tools made by tech company Anthropic, President Trump launched a major air attack in Iran with the help of those very same tools. Commands around the world, including US Central Command in the Middle East, use Anthropic's Claude's AI cloud AI tool. The command uses the tool for intelligence assessments, target identification, and simulating battle scenarios. uh even as tension between the company and the Pentagon ratcheted up, highlighting how embedded the AI tools are in military operations. This was uh this isn't just military analysts like asking Claude questions. It seems like you have war games going on with Claude, which was much more than I expected. And it I mean I I'd love to get your reaction a to uh to what your reaction is now that we're learning how deeply it is integrated and b why would the military risk having to substitute it out uh over you know language that they could have agreed to anthropic with and they just didn't. Again, I I sort of come back to the notion of was this sort of a it's just like the worst possible timing in in ways for both sides, right? Like whereas if it were a more stable situation, um you know, maybe the two sides could have sat down and hashed things out a little bit more, but given the buildup to this, like it seemed like the administration got very fast was very fast to get exacer exacerbated by uh or sorry, exasperated by anthropic. And now again, you might see why. It's like, look, we don't have time for this guys. We are we are preparing for uh some military action right now. If you guys are not on board, unfortunately, like you know, we already have the systems in place. We're we're using those right now. And um you know, we'd love for you guys to be on board, but if you're not, like uh that's something we can discuss, I guess, down the road to your point, like 6 months later. Um and also to your points, like it's not just that they're Yeah. using like clawed chatbot stuff. This is directly related it seems like to their uh you know their um contracts with Palunteer and and also Amazon which has their own sort of government cloud stuff right that that allows uh these things to operate behind um you know their own firewalls and insecure uh centers and whatnot. And so it's again this is not something they could swap out overnight. It's not something that even if they give clearance to OpenAI um or anyone else that they can just yeah put put in there because again these things have to be test like how would you know to trust that um you know if you're all of a sudden swapping out your main model and you're running like literal war games uh on there like how do you know like you know what what to trust and what not. And so again, it just feels like this this timing of it. Uh maybe it it's like uh guys, we need to make sure all of our our our eyes are dotted and tees are crossed before we go ahead with this operation. Uh as you know, we're we're going to be using um some new technology this go around. Uh so has anyone talked to Anthropic about like you know the latest uh with with what they're thinking about it? Then as as you noted the the Madora situation and obviously that Palanteer it seems like was involved in that as well and so that came to the forefront there and so uh it is this is this is all sorts of in in snarled and and weird uh entanglement going on right now. We I feel like uh I feel like all the talk that we've been doing about circular deals and all this like we're we're now at new stakes now in terms of uh of where this is all getting in integrated within these systems, >> right? these like science fiction papers of AI potentially being used in the military somewhere down the line like in future years like oh wait a second it's already being used but it is interesting because they do have this six-month deadline to um to disentangle themselves from the federal government or really the federal government has the six-month deadline disentangle them from anthropic u are you are you suggesting because of the timing that basically it was like we it's not that we need this Friday you to meet this Friday deadline because we're going to swap out another model. It's like we're going to give you this Friday deadline cuz we got some other that we need to handle. And >> I mean, doesn't it feel like that? Obviously, I have no idea. I have no inside sources at the Pentagon to know that they were giving this ultimatum given their timeline for uh for war preparations. But it does feel like, you know, they're they must have been at some level thinking like, we don't have time for this right now. Uh you know, if if you if we want to hash out something like great. uh here's here's X Y and Z partner on the team that can sort of talk you through it. Um but if not like sorry we're uh we'll revisit this at some other point. >> But that's the thing I don't understand because you're about to fight a major operation, right? Like this is a war and >> you're not going to be able to swap out Anthropic. So if Anthropic like comes in like before the war starts, right? Like you're not going to like switch to Deep Seek or OpenAI on Friday afternoon. >> Deepse. Can you imagine that? That would go over really well. I could I could I could I mean at this point anything's possible, right? Um I mean I wouldn't do it but I wouldn't be stunned. I mean give look look what they just did to an American company. But I guess it's interesting because like if you fight that war and you say all right anthropic gave us problems during the war that's maybe when you start the process of thinking about you're going to find out one way or the other. So right and by the way the the attack was quite successful in the early going. I mean, I'm not not sure if this is like all Anthropic's doing. That would be I think a bridge too far to to put it all on anthropic. But if that's the AI tool you're using, you're having a pretty successful campaign early on uh militarily at least. Like >> I don't know. Is that is that when you want to start subbing them out? >> So, two things to that. One, again, I do think the Maduro the the Maduro thing situation um obviously played a role in this. It's sort of it weirdly like hinted at what was to come, right? because all of a sudden we we learned that maybe it was being used. The reporting had uh there's conflicting reports, but some of the reports had uh you know the notion that Anthropic learned about how Palanteer was using it potentially for that raid and they didn't like that maybe too much and sort of that's why they raised raised the uh you know raised it up the chain a little bit and maybe the the administration didn't like the fact and Palanter didn't like the fact that they were doing that. Um, and so fast forward to now, again, we know, you know, the government obviously knows that they're they're heading into this new situation. Either maybe they wanted to try to get it squared away before they did that or again to my earlier to my first point, like it's possible that they used it as like a point of leverage over anthropic, right? to say like look um we understand you know that there's been this back and forth about how we're potentially using using the technology here but like look we're uh you know we're going to be using these things going forward your models uh we'd love to keep doing that and um uh like dot dot dot by the way like you know again they wouldn't they wouldn't tip their hands but let's just look in a week from now and see uh what you think like how this is uh how this is playing out and if you really you know want to to be on sort of the wrong side of this from their advant vantage point, >> right? And look, the more I think about this, the more it just seems to me like like I shared on Friday that this is sort of an ultimate culture clash. And we'll get into the opening ideal in a moment, but um you look at Emil Michael, the under secretary of war who's been working on this, clearly doesn't like Daario, clearly doesn't like the Antropic team, and I wouldn't be surprised knowing about him and knowing about them that there would be a culture clash there. And in fact, so I read that basically at the beginning that Anthropic stood up against what they thought was going to be domestic surveillance. Uh and uh they had seemingly both agreed on the autonomous warfare part. Uh this is what Emil Michael said. He he just, you know, it's like one of those like I reported it for years and he just tweeted it out. He just tweeted it out sort of like what what what happened behind closed doors. He says wanted language that would prevent all Department of War employees from doing a LinkedIn search. They wanted to stop the Department of War from using any public database that would enable us to, for example, recruit military service members, hire new employees. When I called to discuss cutting off the Department of War from using publicly available information that would hurt our military readiness, uh Daario didn't have the courage to answer. Right? This is the now sort of infamous Emil called him before the deadline and Daario was in a meeting and then by the time he got out of the meeting, this whole thing was blown up. Now, this is really where it gets wild. He says, "We agreed in writing to act according to the National Security Act of 1947 and the Foreign Intern Intelligence Surveillance Act of 1978 and all other applicable laws." They wanted the word pursuant versus consistent with and wanted to delete all applicable laws, which was less protective of Americans. Can't make this up. We also agreed to human oversight of all weapons uh weapon systems by saying the department of war will use the AI systems for all lawful uses use case in accordance with all applicable laws of the um US law and the department of war directives. Um and we wanted to to retain the ability to override or disable the AI system as appropriate. He goes he didn't like this is talking about Dario. He didn't like the word he didn't like as appropriate. Would he prefer inappropriate? I agreed. I even agreed to take that out. He knows it. His investors, customers, and employees should know about his lies. Risking the safety and security of our country and our troops are a marketing vehicle for him. I mean, again, like this is I'm just going to say it. If you have two adults in the room, I think you should be able to work out this language. The other explanation is that the Department of Defense really did want to be able to override these systems. really did want to be able to conduct domestic surveillance. But again, we're talking about a tool that's so important to the military today that's being used in the use cases we described to blow it up over these terms to me seems like complete like a ridiculous thing. I think there's a few things going on here. So, first and foremost, like hearing you talk through those exact quotes, it's like I'm sure you've been involved with them. I've been involved in on you know in a deal side on a number of times like with lawyer when lawyers get involved and want to use very explicit language to to make sure that everything is drilled down and there's no wiggle room like lawyers themselves for lack of a better phrase go to war over these little terms right and it's like no we can't say it this way we have to say it exactly this way and the other side's lawyers will say no we can't let them say it this way so like there's definitely some level of that I I I know that you know they're they're talking about this on like the the Emil and Daario level. Um, certainly, but like the legal ease stuff just seems like it's it's lawyers like, you know, going back and forth on both sides to try to cover their own asses, right? And the company's asses uh in the in the case of the downside scenario. That said, I think you hit on it earlier where it's like obviously these two sides just don't like each other from a philosophical level, right? There's long been the the charge against Anthropic from the Trump administration that maybe Anthropic is the more quote unquote woke AI company that they have all this you know effective uh altruism stuff going on that they don't like and that um you know David Sax has come out strongly on these on these issues and um that they just feel like that they're misaligned uh philosophically and I do think it's an awkward situation because they didn't I'm not I don't know this for sure but I wouldn't be shocked if they didn't necessar necessarily know just how vital anthropic was to some of the systems they're using again with with regard to Palunteer. Um obviously they they use Palunteer for a lot of different things and and government famously has for a while for different services and the fact that you know anthropic cuz everyone I think across the board loves their models for different reasons uh regardless of sort of your philosophical bent about the team uh that's building them you know they have great technology and so the fact that Palunteer and then Amazon um obviously and a bunch of others have used uh anthropic services like maybe the government just wasn't savvy enough to know just how integrated Anthropic itself was and that they can't just again like we were talking about swap it out overnight for everyone makes you know Frontier models we can use OpenAI we can use Google we can use anyone like let's just get someone else in there it's like it's not going to be that simple and so um I think you know all of these things sort of coming to a head leading up to the situation that we're talking about with the attacks uh last weekend it just feels like there's a boiling point and again there's maybe some points of leverage that Emil and some others like thought about and obviously we didn't even talk about the Trump tweet. He tweeted like, you know, to basically tried to to, you know, end anthropic as we know it. Uh, you know, saying that like we're we're done dealing with them. Uh, you know, best of luck with whatever you do. We're not working with you anymore. And, um, none of our partners are working with you and, um, obviously the government has partnerships with Google, with with every with Amazon, with everyone else. And it's like, you know, it felt like it was an existential potentially threat to to anthropic itself. And so there's so many layers going on into this. And obviously the reporting every single day comes up with more and more uh layers to it um to unravel. And it's just weird to think that again all this is unraveling while there's actually attacks going on. Um crazy >> like yeah, insane. >> Here's General Jack Shanahan who's no friend to the sort of woke wing of the the tech industry. He's the general behind the Maven program uh that uh you know Google uh Google employees uh rebelled against which was a partnership between Google and the Department of Defense. Um he said you might expect him to be sympathetic to the Department of Wars uh uh position. He's not. He says I'm sympathetic to anthropics position. No LLM anywhere in its current form should be considered for use in fully lethal autonomous in a fully lethal autonomous weapon system. Despite the hype, frontier models are not ready for prime time in national security settings. Over reliance on them at this stage is a recipe for catastrophe. Mass surveillance of US citizens, no thanks. Seems like a reasonable second red line. That's it. Those are the two showstoppers. Painting a bullseye on anthropic garner spicy headlines, but everyone loses in the end. This should never have been such a public spat. um should have been handled quietly behind the scenes, scratching my head over why there was such a misunderstanding on both sides about terms and conditions of use. Something went very wrong during uh the rush to roll out the models. Let reason and sanity prevail. I mean, that seems like a pretty reasonable take. >> It does. But again, I think that maybe it was a trickle down effect of the Maduro situation coming into this knowing that the government knowing that they're going into this situation and not wanting to, you know, for this to come up like say that the these attacks started and Anthropic got wind that their models were being used via Palunteer or whatnot and you know they just start to raise like this giant PR campaign against against the government um for doing that. Um, now you might say that that would backfire against them and it could have, but it's sort of a who knows how it would have exactly played out in that case, but I'm just trying to game through like what the government was thinking here in terms of like why engage this ahead of time. Again, either it's that they viewed it as a point of leverage over Anthropic leading up to this, that they knew um that they could they could get maybe or they thought that they could get more of what they wanted out of out of Daario leading up to this or again that they wanted to sort of cover themselves for if and when they went forward with this and and using these models. But again, you point to the other stuff which is, you know, there's there's the multi-layers here. It's not just war game scenarios and things like that. It is the mass surveillance stuff which obviously Anthropic cares about and you would be hardressed to find people who would be on the other side of that right like um to your point on on the general's comments like everyone sort of is on the not everyone of course but like a lot of people I think would be on the side but the government's push back against that at least to date has been like we just don't want anthropic to have um de facto say over anything. It's not like that they're saying like we want to mass surveil the you know the the American populate and they would say like the laws are already in place against that like obviously there's gray areas with all of this stuff but like um they just their stance is we do not think that a company should have uh de facto say over what you know what we would do um in situations and again we're not going to the plan is not to mass surveil the US but again these are they're slippery slopes which is what uh anthropic would argue I would assume and so you could just go back and forth and continually will go back and forth over those issues, >> right? And and I would I would still hold that they they should have come to a deal, but they didn't. And so now the question is what happens next? So, as I mentioned earlier, the Pentagon has labeled Anthropic a supply chain risk, which as I understand it means no federal government uh uh agency can work with Anthropic uh after this six-month deadline. Not only that, private companies working with the government on uh certain contracting work cannot use anthropic for that work. Um so by the way, like if let's say you're a Boeing, >> you may not want to have a a certain model that your engineers use for uh you know government work and a different model that they use maybe for for commercial work. You want to have standardization. So, this is a potentially very big hit for Anthropic. Not just the $200 million contract that it had with the Pentagon, but this is a potential billion dollar multi-billion dollar hit uh if the Pentagon uh does go through with this designation. Would you agree? >> Oh, I totally agree. It's it's not just, as you said, the contract itself. It is the the trickle down effects and the broader ramifications of if they lose that distinction. And it might and again like it might just yeah it puts a chilling effect on new contracts that are signed right because it's like what if um some other company is thinking about like oh we might do a government contract one day um and to your point of like would we rather just use one model like you know to sort of do all of our work or would we really want to have to swap out anthropic for open AAI if um if we do go forward with this government contract. And to that point, like I do think that the two sides you you hear, you know, there's been subsequent reporting that like there's still some talk that they want to, you know, figure out how to make this work again for nothing else. Maybe if if we still have this six-month window like where they're going to be using uh the anthropic models like you, the 6 months are probably going to be pretty intense in terms of uh what's going down um from the war perspective. Yeah. a lot of tokens being used and so they probably do want to find a way to hash things out. So like the hope obviously is that cooler heads prevail maybe once this initial wave of of the of this you know these attacks are are sort of behind us hopefully um that they can you know sit down again and maybe hash out uh the legal ease as we were talking about and like the exact wording of like how to go forward with this because yes it's it's bad for anthropic if if they get ripped out of the US government as they're talking about >> right and we should say that this supply chain threat is not something that's typically used for domestic companies Right. It's typically >> right. It's Chinese. It's like all the threats that were used against Huawei and all the Chinese companies and it's wild that this is and it's like so it's the the sort of backdrop behind all of this right now. Um I noted this earlier um but you know a number of people have seen this like Claude is now the number one app in the app store which is wild and it's it's very clearly related to some of this. Yeah. Like right like it's not just that um obviously it's been doing well. Anthropic's been doing well with the new with the new Opus models that have rolled out um and and co-work and cloud code and whatnot. But like some of this is certainly, you know, virtue signaling if nothing else, right? Like people are saying like, "Oh yeah, we want to be on the side of the AI company that is pushing back against the government that's trying to mass surveil or or in the headlines at least, right?" Like that's the way that it's being portrayed. And so >> and who does that remind you of? >> Tim Cook 10 years ago. one month 10 years and one month ago was the the time that he sent that memo out about uh standing up to the FBI and Apple's basically capitalized on that for the last decade. >> Yeah. And so, you know, is Anthropic running a similar playbook to that? I mean, maybe not explicitly, at least right now, like not doing PR campaigns. That would be pretty uh you know, not in great taste to do that at the moment. But still like again it doesn't seem like it's completely unrelated that claude is shooting up um and people and they're sort of yeah thinking of that this might be anthropic is positioned as the AI company that's going to be the quote unquote moral one and you know that's a whole obviously hornets nest of of of a topic as well. >> That's right. Uh I will give my hot take here which is that this supply chain risk threat is never uh never manifests just never takes takes effect. Uh again it's a six-month uh deadline. We've seen sex six-month deadlines a lot uh from the US government. Often it's been around Tik Tok. Oh we'll ban Tik Tok in six months. Yeah we'll extend it for another six months. If if anthropic is this pivotal uh for um for the government uh then they will just continue to use it and extend this or rescend it or it will won't hold up in court. So that's hot take one. The other side of it though is I've already heard some rumblings from government like big companies that are government contractors that they will preemptively take anthropic out of uh their workflow or at least are highly considering it because they don't want to bank on the fact that this will get extended. So even if this isn't going to go through completely uh I do anticipate that that it will hurt Anthropic uh when it comes to these private companies. I agree with you, but I would also just say like I wouldn't fully discount the notion that we talked about already, but that um these two sides just don't like each other from the personnel involved, right? Like it every indication seems that way. And so like is there are they going to be able to get past sort of the grudge between the Trump administration and and Daario basically? um or is there some intermediary that has to come in to sort of assuage that um in some ways because yeah like the Tik Tok thing and everything else like um you know the sort of the taco stuff right like Trump always chickens out of like the things that he threatens and and goes back upon. Um is this another one of those? And again, it feels like yes, it probably will be except if they view it like that they want to make a sort of, you know, makes make some sort of points about of more philosophical points and highle point about um, you know, quote unquote woke companies or companies that are that are misaligned or or that they view as misaligned with sort of the American public and the electorate and all that. And um, you know, they might dig in their heels a little bit more because of that. Yeah, I I do think Taco really did apply uh with the tariffs, but maybe after this Iran thing, it's going to be tougher for that that label to stick. >> Um maybe the inter intermediary that comes in is Sam Alman, or maybe not. I mean, >> he he swooped right in. Uh this is from the times, you know, as these discussions were breaking down with Anthropic, Emil Michael had an ace up his sleeve on the side. He had been hammering out an alternative to Anthropic with its rival OpenAI. Um, a framework between the Pentagon and OpenAI had already been reached. Mr. Altman of OpenAI got a call got on a call with Mr. Michael to discuss a deal for his company. Within a day, they had drafted the framework. OpenAI agreed to the Pentagon's requirement that its AI could be used for all lawful purposes, but it also negotiated the right to put technical guardrails on its system systems to adhere to its safety principles. At 10 p.m. on Friday, as Anthropic's lawyers began working on a lawsuit against the Pentagon, Mr. Alman was on the phone with Mr. Michael, finalizing the details of OpenAI's deal with the Department of Defense. Mr. Alman then posted the news of the agreement on social media on Saturday. Alman invited people to ask him questions on X about the deal as OpenAI faced a backlash for swooping in. He goes, "Uh, we don't want the ability to opine on a specific legal military action, but we do really want the ability to use our expertise to design a safe system." Basically the same, very similar deal uh to the one that Anthropic could not agree on with the Pentagon. Your thoughts on OpenAI's role in this whole situation? Classic, I guess. >> I mean, this could 100% this could have been predicted, right? like you uh you see you see the opening. Sam Alman sees the opening. Sam Alman's going to take that opening and he is going to to immediately ring up Emil Michael and get get him on the get him on the line and figure out a way to sort of uh swoop in there and not only potentially take over all these contracts, but also obviously he's positioning he's trying to position this as like they are the peace broker here, right? like that they are the ones who are who are going to sort of uh iron out these differences between anthropic and the US government by cutting their own deal that paves the path uh to sort of do a new deal going forward but I think that they wouldn't mind if say they got all those contracts instead of Anthropic got all those contracts going forward as well and so you know that part was maybe left out but uh but they're the peace broker and and they're going to come in here and and make everything I mean again this was so predictable and it was also predictable the backlash to it, right? Because like no one believes that like two blood rivals that won't hold hands on stage uh at a at an event are going to uh you know, one is going to help out the other in a major way. Now, to be fair to to Samman, like he might think at a high level, like yeah, I think we should probably take a stand on this that's more in line with what Anthropic is is trying to project at least at the highest level. But still, we're going to do that in a way uh that's that's good for the business um at the end of the day. And so, you know, both things can probably be true. But again, the the optics around this are just not great. And uh you know, again, to be expected there. >> I got a text uh as this was all unfolding where Sam had said something like, "We don't want Anthropic to you know, not be able to work with the government." Uh, and someone sent me like this text like, "Oh, uh, well, looks like OpenAI is really changing their tune on Anthropic." And I was like, "I don't think so. Wait and see." >> And there they were. So, >> yeah. >> Uh, could be could be a potential very lucrative deal for uh, Opening Eye and especially if this thing goes through and Opening Eye, by the way, in the middle of a year where they're really emphasizing enterprise, uh, they could potentially swoop in and get much more than just that one contract. I would just one last thing I would add to this because I was going over it today trying to look through some of the numbers for ownership stakes as I like to do as like a hobby uh of these these AI companies. um given the ownership stakes in anthropic from that we know obviously from Google and Amazon but now Microsoft bought in right famously and and Nvidia too and so you know don't don't necessarily uh underplay those elements to it as well especially someone like Amazon right um who has lots of government contracts as well and Google too um if they can sort of step in and be a bit of an intermediate intermediary here and say you know like look cool we got to pause on this like we can all work together, we can all get along. Um we you can figure out how to use these models in ways that both sides sort of figure out. Um because again like it does ding also their businesses, those big players if if all of this gets ripped out. >> Yeah. By the way, I mean Amazon just did this $50 billion funding deal with OpenAI. So >> I don't think that that was related >> 35 next. So maybe they they might just say, "All right, >> they're always hedging." So, uh, so they're fine either way, I guess. But yeah, wild. >> All right. So, could Amazon and OpenAI work on a potential device together to go against the Apple and Google alliance? And where is Apple's AI device bet going? That's what we're going to where we will pick up when we come back right after this. And we're back here on Big Technology Podcast with MG Seagler of Spyglass. You can find it at spyglass.org. or highly recommend signing up for it, getting the newsletter. One of my favorite tech reads. Uh, all right, MG, let's talk a little bit about switching gears from this big >> blow up. Nice. Let's talk about Siri >> or or or more, let's talk about the devices that Apple might be um developing that will have Siri or Gemini or Gemini powered Siri baked in. So, uh, recently we've gotten news that Apple is going to release maybe three devices all at once. Smart glasses, a pendant, and AirPods with expanded AI capabilities. Uh, I've thought that I think we've both discussed actually that this is going to be a pretty good year for Apple. And, uh, when this news hit, I was like, I got to go to Spy Glass to get MG's perspective. and you started with a very surprising line at the beginning that maybe we're seeing the beginning of Apple, if not pulling ahead of the AI race, really starting to assert itself and make a strong play here. Let's talk a little bit about what you're seeing. >> Yeah, so this there's a few things that I think lead into fuel that idea. Um, and you know, this this dates back to obviously when um when Apple at WWDC two years ago now was gearing up to to talk about AI in a real way for the first time. And obviously they ended up doing that and falling flat on their face because they couldn't execute upon it. But now in a way it's almost like are they going to run basically the same game plan but now that they have the Google partnership for Gemini building these models like they can actually do it and execute on it execute on it in the right way. I wouldn't put it past them to sort of basically do that do everything that they promised and then to your point on these devices extend it a bit to sort of the the world that we're entering now. Um I do think that they are potentially in a good position. We've talked about it before that that if um if we believe that models are getting commoditized and if um if there's going to be diminishing returns and sort of spending billions and billion hundreds of billions of dollars on uh on training these large language models like what's the next sort of step after that and if you and if you're Apple and you believe that um that is the case that they don't need to train necessarily their own massive frontier models that they instead can partner as they're doing with Google on then the value might, you know, on from their eyes come from the way that they implement them. And obviously their a lot of their value has always been derived from selling devices um the best devices, you know, many would say uh to the to the public. And so if they can create these devices that leverage that, and by the way, like I do think the one key device to all of these things remains the iPhone. And I think that what you're seeing with these three devices that are being talked about that you put out there, you know, AirPods and and and glasses and appendants, all of them, you know, per the report, per Mark Gurman's reporting, like would likely be reliant uh to some degree upon the iPhone. And that's where Apple has this unique advantage. You know, maybe you could say that Google and Samsung have similar uh capabilities because of their device, their smartphones. Um but Apple has has a very unique advantage um in you know certainly ahead of the metas of the world and others that are trying to create these types of new fangled devices let alone any startup that's trying to do so and open AAI in that bucket. Um, Apple has this unique uh position where they have the iPhone in billions of pockets and now they're going to have these devices that rely upon that as sort of at least for the foreseeable future as basically, you know, the central processing unit of those uh devices potentially. And so you can close your eyes and not it's not too hard to imagine a world in which Apple is sort of the device leader again uh in this new AI world. And if if they're the device leader, who's to say they're not the overall leader? if they're the the way that everyone's interfacing with AI, at least. >> Yeah. So, I want to talk through this because, you know, I've recently start I've gotten like the first wearable that I actually use frequently, which is this Garmin watch, which is not an Apple product, >> uh, but actually works quite well with the iPhone. There's this Garmin app. It mostly connects. Only had one situation where I've had to like reset the whole thing because the Bluetooth connection was off. Um, and and this is basically like these AI devices probably wouldn't exist in their own like their own ecosystem. For instance, when you want to set up the metagasses, you set it up with the smartphone. >> Um, but it's still it syncs pretty well and there's technologies that have uh come out that lets you like sync data through Wi-Fi that have made it much more seamless. So, if the iPhone is going to give an advantage to Apple's AI devices, how does its interoperability, which has always been Apple's calling card, how does that help uh in a way that would be that much better than um you know, the ways that these current wearables are connected? >> So, it's a good question. It's hard to know for sure without obviously seeing what Apple's going to release out there. But I would just point to, you know, comments made by no less than Mark Zuckerberg over and over again about complaining nonstop about how they don't get the full level of interoperability that they would like with with Apple's products, right? And some of that is obviously just a little bit of posturing because those two sides don't like one another. And um obviously Metaphamously doesn't have a smartphone play. So, you know, they're telling regulators that look, you need to make sure that the iPhone is as open as can be to uh to third party products like perhaps the ones we're making and others are making. And obviously, Europe is very open to that notion. They've they've basically installed some laws in various places to to make it so that they have to be more interoperable and allow thing low-level um system integrations that Apple may not want to. And again, your question though, like what's going to be all that different? Um, from the, you know, at the day-to-day level, it might not be all that different, but I do think that there's lots of low-lying under under the hood stuff. Um, you know, potentially as as as boring as like slightly longer battery life because Apple is able to, you know, more tightly uh hone the way that the connection is made between their device um and the iPhone. And I think there's all different sorts of things, background syncing, contact syncing, all this type of stuff that can come into play that you might not think on a on a day-to-day level as you're using it is like that big of a deal. But there are advantages that Apple has. And the question will become probably both certainly in Europe, but I think it will ultimately become true also in the US of like how much of that is uh too much of a competitive advantage and that they're um hurting competition as a result of that. And that's we're going to hear a lot from Mark Zuckerberg and probably some others, maybe Sam Alman as well about that uh going forward. >> So, we're going to have it seems like these are all coming at the same time. Smart glasses, a pin, and uh and these enhanced AirPods. Uh what what do you give the chance of being the most successful of those three? >> Um I would imagine I mean I do think that they'll all be slight for slightly different uh purposes. I would imagine price will be a key factor in that as it always is. But like if I had to guess, I would think that the AirPods would probably be the most successful just because you and I are wearing them right now. Everyone's wearing them out and about. Like they're a known thing. As long as they don't look uh entirely ridiculous and different with some sort of camera sensor on them, I think that they will uh continue to be obviously a very popular product. It's a matter of again how much do they cost if they add a camera sensor to it. Is it a $500 product all of a sudden? Do they can they keep it like at $300 or something around there? I think that will matter a lot. Glasses obviously Meta has already sort of proven somewhat of a market, but relative to Apple's other products like it's a drop in the bucket. It's not very big. Uh you know the Meta Rayband products are not huge compared to say AirPods or Apple Watch or anything else. And so can Apple take that to to another level? Um, I think that, you know, I think that they'll have success with it, but um, you know, we're now seeing already there's starting to be backlash uh, preemptively against Meta because they're talking about using um, facial recognition within the glasses, right? Adding that after the fact and so we're all of a sudden right thrown right back into the glass hole situation from Google Glass a few years ago and and Meta has has to their credit sort of avoided that to date and now we're getting thrown back into that. And how does Apple deal with something like that if Meta is, you know, for lack of a better word, sort of poisoning the well or the market um by thinking like I don't want any glasses with any sort of camera on your face. And obviously Apple's product will have that to some degree. And then the pen in itself obviously you you think to humane and uh you know expple um engineers and and designers who were working on that uh didn't end up being successful of course and sold to HP and a fire sale it seems like. Um, but Apple has that unique advantage of having the the iPhone itself. And it sounds like this would maybe be more of a the I think German even said it was like uh an internal phrasing of it as the eyes and ears maybe of the uh of the iPhone going forward. And so you wear it around and it's constantly um just looking at things. Again, this is a privacy thing though, but Apple's, as we're, you know, talking about, Apple is in the the unique position to be more trusted than probably any other tech company certainly um from a privacy angle. And so, um yeah, there's all those all those elements to it, >> right? Yeah, I think the AirPods, that's my bet. I think we're going to see a battle of these AI devices in the in the earbuds space, but it does seem you're right like we're just kind of we are sort of doomed to just be videotaped by everybody at all. Although we kind of already are. So >> I I still like like looking at us, you know, right now wearing these AirPods like I'm I've always been curious like how they're actually going to do that though from a pure product perspective. It's like so I have a beard. uh if like there's stems, you know, feature the camera, like does it just record my beard like looking forward or do they have to stick out more then as results and that will look ridiculous? You know, everyone joked when AirPods first came out how ridiculous, you know, they thought they look cuz they're sticking out of your ears. But like ultimately they're pretty streamlined and you can't really, you know, tell all that often, you know, when you're looking at people and we got used to it very quickly. But if you got cameras sticking out of them and then there was like talk where it wasn't like uh it wasn't necessarily camera cameras but was more IR cameras and was used like um you know to potentially capture motion and things like that to to help with gesture control of of different devices and things and that made a little bit more sense to me. But I am very curious like how they end up doing that. There was also talk that they were going to put a camera in the watch and that you would have like yeah like almost like a you know Dick Tracy style like uh uh camera that you would like shoot people with like looking at uh looking at your wrist and and so all these things are going to create situations where you just need new cultural norms to come in and again Apple has done much better than any other company but to Meta's credit they have done well with the Ray-B band so far >> that's right and I think that the battle will definitely fall on whose assistant is better and Siri has to get better. I mean, it's we we it feels like beating a dead horse at this point, but we didn't even talk about it because it's so regular uh that Siri got postponed again or features within Siri got postponed again. You had a really funny funny piece about that. You said it's almost like Apple's having some major issues with their AI implementation and strategy. They should probably look into that, but it just keeps happening, right? that that this keeps getting delayed and you know you start to lose faith over time even with the Google partnership that they're going to be able to figure this out. >> Yeah. I was always like a little bit skeptical. I mean I've obviously been super skeptical of Siri over the past 15 having used it over the past 15 years but like when they announced the Google partnership I was always a little bit skeptical of the initial rollout cuz it's like how are they going to it's sort of what we're talking about with the government like right like you can't just swap these things in. It may seem like it's it's that simple, but like there's a lot of like underlying things that need to be connected. Look at Amazon for an example of that, right? Like look how long it took them to to rework Alexa to be able to to work with things like anthropics models and and all the models that they're using behind the scenes to sort of upgrade Alexa. It took over a year and and they promised something and they couldn't deliver on the timing of it. And now we're seeing the same thing. We've seen the same thing play out with Apple. It just takes a long time to get like all of the little pieces uh in place because the last thing Apple can afford to do right now is put something out there even in beta I think even in some sort of you know like thing where it's any any forward- facing userfacing um uh service um and just have it flop again. That would be just a death nail I think to they would have to change the Siri name at that point. You would have like Siri, we we might have the Microsoft style like funeral um where they would be like yeah walking down Certino with um with a coffin and series in it because they would need a new a new branding if they fail one more time with this. >> Yeah, I think it's long past past time to do that. Could Amazon and Open AAI be the competition here? I mean, we talked about it before the break, but Amazon's going to invest 50 billion uh in OpenAI. Now, of course, OpenAI has a device program underway. Apple has I mean know Amazon has the Echo. Um I think Alex Plus is actually already pretty good. Uh could you see as part of that deal because uh OpenAI will be helping Amazon develop some of some specialized AI technology um that this could also be part of a counter could be a like team team battle open AAI and Amazon against Google and Apple. >> Yeah, that's that's sort of the where my mind went when I was reading about yeah these reporting and and again like $50 billion. Yes, it's over like two tanches it sounds like, you know, 15 and then 35, but still $50 billion that that Amazon is investing um in a time when they're making cuts. They're famously doing layoffs, right? Like and and they're getting dinged left and right for their for their capex spend. Like $50 $50 billion is no joke. And they're spending that for a reason obviously with with OpenAI. And so you you have to my mind again went to wondering is this some sort of massive play to get sort of all of the models inhouse to you know a lot of there's a lot of talk right now about orchestration and the idea that like um like perplexity and others are now trying to like move their businesses into being these layers on top of the LLMs to be able to do whatever you you as a user shouldn't have to worry about which model picker and and things like that. you should just let it uh say what you want and let a service pick the best one for you. And obviously that's harder within Amazon because as you noted they make their own product in in Alexa, but given that they have the anthropic partnership and now given that they have the OpenAI partnership, is there a world in which they're using all those models behind the scenes and sort of they can use that to counter both Apple and Google potentially where they say like look if you're using those products you're only going to get in this in both cases Google as a as a result because they're both using Gemini but um you know they're using their in-house house models whereas if you use Amazon if you Alexa maybe uh going forward um you know you will have the power of claude you will have the power of chat GBT and you'll have the power of Alexa all three um um you know on top of maybe some others that they add in there as well um and it's sort of a playbook that they've run right with the cloud in a way too right so it's like they view it as like you can pick which um which you want to use and um or let us pick which you which you think we should use um from a product perspective and so no no you know indications that that necessarily is going to be what happens, but I wouldn't be shocked about that. >> Okay, before we leave, I definitely want to talk briefly about this Netflix Warner Brothers Paramount deal. Uh you've written about it. We haven't talked about it on the show in depth really yet. Uh but the the cliffnotes here was that Netflix had agreed to buy Warner Brothers Discovery which has CNN and HBO and was going to build this sort of powerhouse streaming company that maybe the streaming company of the future by adding these old school assets. Uh Netflix is obviously in the lead. No one really comes close to it in streaming. So this might just have solidified it as the dominant uh service. It reaches a deal with Warner Brothers Discovery. Paramount comes in and says, "Nope. uh we want to uh make the deal instead. We weren't given a fair chance to bid and uh just keeps throwing out these bids until it decides that it's going to end up uh or that both companies decide that Paramount will be the buyer and not Netflix. uh Warner Brothers Discovery is going to have to pay Netflix about a $3 billion breakup fee and the final deal is going to be 110 billion or so uh that Paramount will pay for Warner Brothers Discovery whose market cap as you note in Spy Glass was $20 billion a year ago. So just give us the the your perspective on what happened here and what the implications are. Uh yeah. Um so it does seem like uh on one level at the highest level this is uh just a master a masterful job by David Zazlov who's uh the CEO of of Warner Brothers Discovery because he was able to take a company as you noted that a year ago was a fraction of of what this offer is in terms of market cap and still is right now um and turn it into this offer. And they basically did that, you know, by at first it was uh Paramount that came out with with an offer, much lower offer uh than what these current offers are uh I believe $19 a share and we're up to $31 a share now with the newest one. And um I think the wild card there, you know, was Netflix coming in because Netflix was viewed as as a obviously a big player and the biggest sort of if you want to call it a media company, the biggest one, it's market cap is roughly double that of Disney. Um, and so they obviously have the capital to be able to do whatever they want in a deal like this, but they had not historically done anything like this. And so I think that, you know, Paramount basically felt like they came in and stole this from under their nose. And there was a question of was this the you know Master Stroke by David Zazov sort of orchestrating this whole thing knowing perhaps that uh Netflix that Paramount basically needed this more than Netflix did. And so they were going to drive up the price um to make it so that Netflix would walk away with their $3 billion allcash consolation prize. Uh which is a pretty nice uh you know offer to >> Yeah. It's about what they make in profit a quarter. And so uh they just got that in one fell swoop. But still, yeah, this um this deal has has gone back and forth and back and forth. And now the fact that Netflix walked away relatively quickly once the Paramont offer came in, you know, kudos to Netflix for it seems like had good discipline. They weren't going to get into some sort of bidding war and go outside of of their bounds. But also like I I'm just overall sort of sad for Hollywood because I do feel like that they they didn't like either of these deals, but I think that they're going to be in for a bigger world of pain with the Paramont deal than they would have been with Netflix. Um and we talk, you know, you could talk about yeah, the streaming dominance of Netflix and whatnot, but the reality in my view at least is that uh this is much more about like the future going forward and the future is going to be Netflix versus YouTube and a few other you know key players. I think Prime Video will be in there. Um Disney Plus obviously, but like it's not just and Tik Tok and which uh has uh interesting new ownership given this uh this paramount structure as well. And so all of these players in there is really the battle going forward. And we're talking about like this decaying sort of industry that in in movie going, which is an industry I love, but is not like a giant growth industry. And so we're talking about like these players uh battling over these assets. And it feels like, you know, Netflix would have been a good safe haven for a for a studio that's like been owned by conglomerates for a hundred years. This isn't like a new thing. Everyone's all afraid because we're in the world of tech now and and AI is coming and all of this, but like Netflix would have been a pretty good safe haven, I feel like, for this. And instead, we're just going to get a straight down the middle sort of combination of two studios and that's just going to mean a lot of layoffs and it's going to be just this brutal sort of, you know, decline over a longer period of time, >> right? All right. And I'll note that Netflix is up 26% in the past 5 days. Uh so clearly the market has really digested this and said, "Yeah, probably better that you didn't do the deal." I thought maybe it would be good. Like maybe it would be nice to roll all this content up. Obviously, as a consumer, you're not happy about that because you have you have less choices. But from a business perspective, I understand why Netflix was interested. Uh but obviously different way market likes it and everyone will just move forward. Yeah, we'll see until until like there's going to be a lot of fallout from this. Uh, and I think it's going to happen both both from, you know, the antitrust perspective because, you know, of the the relationship with with Trump and the Ellison's and and there's going to be a lot of different hearings on this type of stuff. And I think it'll play out over years and years because then they'll look back on it after it's approved and say like, was it approved for, you know, less than above board reasons? And so I I think we're gonna just hear about this for years and years and years. And the reality is it's like it is a bit sad. It just feels like uh you know obviously Paramount's play is going to be to try to bulk up to compete with the the Disney Pluses and the Netflixes of the world. But are they really realistically going to be able to do that? Maybe if they can leverage Tik Tok or something in some way uh you know now now owned in in no small part by Oracle. Um maybe. But like it it feels more like that this is a still a slow decay story and and you know they'll just sell their their products ultimately uh the the content itself to Netflix just as they've been doing. >> All right folks the website is spyglass.org mg always great to speak with you. I'm so glad we got a chance to speak today especially just I mean an incredible weekend of news that I think we're all still trying to wrap our heads around and I'm I'm so glad we got a chance to digest it here together. >> Indeed. Good as always, Alex. >> All right. Thank you so much. Thanks everybody for listening and watching. If you haven't, if you could rate us five stars on Spotify or Apple Podcast, it will go a long way to helping the podcast reach new audiences, which would help us, you know, recruit guests, and that would always be great. So, hope you do that. Hope you have a great Monday and the rest of your week. And we'll be back here on Wednesday with another new interview. I'm not quite sure who it will be, but we'll hopefully touch more on the anthropic Pentagon saga. So, thank you again for being here and we'll see you next time on Big Technology Podcast.