Anthropic’s Potential, AI Video Gets Crazy, Market Bubble Approaching?

Channel: Alex Kantrowitz

Published at: 2025-08-06

YouTube video id: zLdOx7GjLxs

Source: https://www.youtube.com/watch?v=zLdOx7GjLxs

Anthropic is raising at a new $170
billion valuation. Let's talk about the
company and its potential. Plus, OpenAI
hits 700 million Chat GPT users. Is AI
video actually underhyped? And is the
stock market in bubble territory? That's
coming up on a Big Technology Podcast
Friday edition right after this. Welcome
to Big Technology Podcast Friday edition
where we break down the news in our
traditional, coolheaded, and nuanced
format. We have a great show for you
today. We're going to talk about
Anthropic's new massive funding round
and big valuation. We'll also cover my
interview with Daario Ammoday this past
week and talk a little bit about the
takeaways there, where Anthropic is
positioned and what the company's
promises. We'll also talk about OpenAI's
700 million chat GPT users, a great
section on AI video and whether that uh
format is underhyped, and also the stock
market rip roaring. Microsoft joins
Nvidia as a $4 trillion company. Is it
in bubble territory? Joining us as
always on Fridays to do it is Ranjan Roy
of Margins. Ranjan, great to see you.
Welcome back to the show.
>> Good to see you again, man. I just uh
got back from Tokyo in Taiwan. And I
think I had my first AI vacation.
I mean,
>> did you use AI or you did use AI?
>> No, no, I did.
>> That could be interpreted in two ways.
>> Uh that's true. You're right. A virtual
vacation. No, no. This was the first
time that every single bit of planning
was done in chat GPT perplexity even in
real time kind of talking to it and this
made me completely think in terms of and
we always talk about this like searching
as we knew it before I really think more
is dead.
>> Okay, great. So on that note, I just
want to welcome all of our new
subscribers who've come in. We have a
bunch of new people here this week who
have uh come in after listening to that
interview with Daario. Uh just to give
you a rundown of what we do here on
Wednesday we have a big uh flagship
interview with people like Daario. Uh
next week Amjad Msad the CEO of Replet
is coming on and then on Fridays Ranjon
and I show up here and break down all
the week's tech news. Uh so we're very
very glad to have you here. Uh all
right, I actually thought it would be
good to start this week just to talk a
little bit about my takeaways uh after
doing a couple months of reporting on
Anthropic and then we can get into their
fundraising. So let me just start here.
I think that Anthropic is a very
impressive company. Like the one thing
that I kept coming back to uh when
writing the story about Daario and the
company is just that you have this
competition coming from all sides.
competition obviously from OpenAI but
also from Meta um places like Google
with Deep Mind and Anthropic has found a
way to sort of make its way into this
conversation starting really uh later
than OpenAI and without the resources of
the big companies and I think there was
a great a great quote uh from Eric
Schmidt that I uh didn't include in my
story. I had a conversation with the
former Google CEO uh for this profile of
Daario um and he says this. He says, "My
best description of this is that it is
an allout brawl." So, it's really a
brawl between very well- capitalized
companies, including my friend Daario's
startup. The fact that Daario is in the
brawl is extraordinary. And if you ask
me what I predicted, if I predicted he'd
get there, the answer is no. How would
he raise the money? How would he get how
would he get the partnerships?
And somehow he did. So when I say it's a
brawl, the brawl means it's the most
brutally competitive market you've ever
seen. And I think it is interesting
despite the fact that Anthropic has 11
billion plus dollars in funding from big
tech that it's been able to compete in
this market. What do you think?
>> No, I think I love this allout brawl. I
guess I'm not s as surprised that
Anthropic has uh been able to kind of
compete and raise in this market because
again from a product perspective, we
were Claude Boys back in the day. Claude
uh Pro maybe not subscribing right now
but they may
>> we were Claude heads and big boys heads
big boys details.
>> These are the we I I I thrive on
accuracy here but but I think the most
impressive thing that Anthropic has done
is actually pivot into where they see
opportunity. We've been talking about
this the last few weeks and and I'm
curious kind of your takeaway after the
conversation around anthropic is making
the pivot towards coding software
engineering going after technical folks
and I think they're they're they're
strong everything you see about cloud
code and this is not me which is why I'm
not using it as much anymore and I can
tell but move finding that very large
market opportunity and niche and trying
to win there rather than trying to do
everything. I think they're do they're
they're pretty impressive right now.
>> So, I think when you're not as well
capitalized as a company like Meta, for
instance, you have to make really
strategic decisions. And I think
speaking with Daario and those around
him, I think Anthropic has made a couple
of really good decisions in terms of
where it's going to compete, really
strategic areas in terms of where it
wants to build its models uh and its
businesses. So, first of all, I think
one interesting thing Dario said was
that they are uh all in on the business
use case for two reasons. Um, I think
maybe the first one I'll just impute a
little bit is that if you're very good
at business, you're going to make a lot
of money and you need money to run in
this type of industry. Uh, but the thing
that Dario said that was interesting is
that if you focus on business use cases,
you have an incentive to make your
models a lot better. Uh, for instance,
if you're building a chatbot, he didn't
say this, but I'll just say it. If
you're building a chatbot, um, you just
need to sort of cater to the standard
uses. Um, and what he said was basically
that if you make your model um, move
from, let's say, undergraduate biology
to graduate student biology level, the
average chatbot user isn't going to see
that. Um, but the average business
customer in, let's say, the
pharmaceutical industry really will. And
so that incentivizes them to build
better models and it's also good
business. And I just found that to be
really smart. Well, so it's clear Dario
is team model here. Uh for for new
listeners,
>> he is the most hardcore on all of all on
team model. But go ahead.
>> For for for newer listeners, uh a
regular debate between Alex and myself
is I still believe the model is
important, but the overall product and
experience actually is where you see the
real differentiation. So, so that's
interesting to me that that is how
they're kind of approaching this because
remember claude artifacts predated
chatpt canvas like like they kind of
invented that. So, so to me they've they
have innovated on the product side. So,
it's it's interesting to me that he's
still all in on the model is where this
brawl is going to take place.
>> Definitely. And it's also where you
direct the model. So, I asked him about
the coding use case which as you
mentioned is an exploding use case for
Anthropic. Although we'll see what
happens with G G G G G G G G G G G G G G
G G G G G G GPT5 and we're going to get
into that in a bit. But his answer on
coding was also really interesting and
that was that a if we build great coding
tools every all the engineers in
anthropic are going to use them we're
going to get faster as a company and b
if you have engineers uh if you provide
a useful AI tool to engineers uh they're
going to adopt it really fast and that's
proven to be the case. So it's not just
the model, it's sort of the way that you
train the model and how that outputs the
in product. And I think that's also a
very wise bet for anthropic that's
paying off.
>> Yeah. I mean, I think that's the success
of cursor. Like the whole uh you know,
epithet that something is a rapper has
always been wrong to me. Cursor
skyrocketed because it just was a better
experience. it it it provided better
output relative to the competition at
the time, but overall for software
developers, it just was an overall
better way to develop and code and
engineer. So, so I think it I think that
yeah, the two are inextricably linked,
but but I'm curious, what did you take
away in terms of where Anthropic is
going? And we're going to talk about the
funding in just a moment. Clearly
there's momentum but but what does he
see really see as the future in your
takeaway?
>> I mean I think that one thing that's
clear is that Dario and this sort of
does link to the funding believes that
he's the firmst believer in the scaling
laws which is that if you add more
compute data and increase the model size
you're going to get predictable
exponential results. And so I think
that's basically the way that they want
to move is they have some near-term
business interests to get them to a
point where they can build bigger models
and more efficient models and
effectively trying to build a supermodel
like I think everybody is like it's one
thing that's going to come up. Uh I have
MG Seagler coming on. We have MG on the
first Monday of uh the month and he
writes this great newsletter called Spy
Glass. Um and we're going to talk about
the fact that all these companies are
effectively working towards the same
thing like call it super intelligence
call it you know AGI effectively they're
working on scaling up large language
models and adding sort of the
scaffolding around them to make them
useful. So I think that's really where
they want to go is they believe that
they can build the b the models best.
They want to raise the money and build
the biggest and best models and then
sort of
>> does anybody get guess what happens from
there? But we've seen these predictions
from Daario that he he has a belief that
there's going to be like real economic
value there. Um and also some like
potentially scary outcomes. He became
somewhat famous for saying that AI in
the next couple years could wipe out 50%
of white collar entry level jobs. I
don't agree with that. Maybe that's a
little bit of marketing for anthropic
like we talked about. Uh but I really
think labor augmentation and labor
replacement is going to be where their
business is. Well, after the interview,
do you feel that was marketing or did
you walk away that he truly believes
this, is worried about it, is trying to
do something about it?
>> So, yeah, and I'll note it wasn't just
the interview. There were 24 plus
interviews that I did leading up to this
story about him. Um, I I do believe that
yeah, he both does really truly believe
this. He's seen these scaling laws work
in places like BYU and OpenAI and now at
Anthropic. Um so the data that Dario is
looking at all points to this continuing
to improve and in fact like Demis from
DeepMind said yes scaling is really
helpful but we're seeing some
diminishing returns or the words that he
used is it's slowing and the people that
I spoke with at anthropic like Jared
Kaplan the chief science off uh chief
scientist there uh said no it's not if
scaling is slowing it's just because
you're building it wrong most probably.
So, uh, I really think that they do
really believe in this stuff that this
is going to continue on this
exponential. I believe that's an
earnestly held belief. Uh, I also think
that it's undeniable that being loud
about that is great marketing because if
you're like the firmst believer in where
the technology is going to go and you're
talking about like, you know, how it's,
you know, potentially like capable of
bio uh bioweapons, then if you're a bio,
you know, if you're a pharmaceutical
company, you're going to be like, well,
I'm talking with some I can't leave
these anthropic guys out of the
conversation.
>> They're making bioweapons. I'm just
trying to make uh the next ompic here.
Exactly. Epic plus lose lose twice the
weight in half the time. Yeah, I'm going
to use AI for that.
>> I'm in. I'm in.
>> But yeah, so so that is so it can be
both. I really think it's both. I think
everybody around who's been around them,
you know, pro or con, thinks that it's
both. But I think the big issue, and
this is sort of like takeaway number two
for me, is that there's going to be an
issue with inference. And running these
models is very expensive. Um many of the
startups who I've spoken with uh have
said that like they like using
anthropics models but they're down too
often. U as the models get bigger,
right? Because like if the scaling laws
are a thing, the models are going to get
bigger, they're going to be more
expensive to run. And if they're more
expensive to run, are they more
expensive to use? And if they're more
expensive to use, does this industry
work? I think that's the big open
question. Here's Daario. He says, "We
make improvements all the time uh that
make the models 50% more efficient than
they were before. We're just at the
beginning of optimizing inference.
Inference has improved a huge amount
from where it was a couple years ago to
where it is now. And I think whether
they're able to continue that trend of
improving inference and making it more
efficient. That's the key question or
another key question shall we say here.
Uh because that if you're building for
the business use case, you have to make
your model fit into their ROI
calculations. And that's really the
bottom line. Yeah, I think that is the
more I've been thinking about it, it it
has to become more of a conversation
because right now again, you know, most
of these companies are just bleeding
money right now. The economics of it as
you try to make the model more powerful
and powerful and saying that's how
you're going to get to the eventual
productivity that is promised. But in
the meantime, no one has modeled out
what this costs a business or even an
individual. We're all I mean this is
like the mid2010s when we were all
getting free Uber rides. Now we're all
just getting as I was traveling around
Asia. I'm sure what chat I was costing
chat GPT in all my searches was not what
I was paying for for the 1995 or
whatever it was for chat 20 bucks for
chat GPT plus. So I think the economics
of the industry and you had Ed Citron on
a couple weeks ago. I firmly stand
differently than him in terms of I do
believe generative AI and AI is going to
completely transform everything. But
what that looks like, what it costs,
what cost structures look like for
people and businesses, I I think like
this it's certainly not been figured out
yet.
>> Yeah. And by the way, like in the
conversation again, just to point back
to it, I brought that up to Daario and
was like, "What's going on? you're going
to potentially lose money on your most
enthusiastic customers. Uh and he said,
"Well, that's going to change." And then
of course uh this week, Anthropic
introduced uh stricter rate limits for
claude code users. So the company is
real and I think all AI companies at
this point, they're trying to or they're
going to have to navigate the boundaries
between like, you know, get it's like
the opposite of social media. Social
media, you want people to be like super
engaged and never leave your product.
And with generative AI, because it is
expensive to run, um you have to be
careful about the amount of use you try
to sort of incentivize.
>> Yeah. I mean, we've talked about this
plenty. Generative AI is not traditional
software economics. It's not like
essentially zero marginal cost. It's not
certainly not social media, but not even
traditional software. It's a completely
different cost structure. It's more
industrial in my opinion than
traditional software. So it which is
actually I would say like intellectually
one of the more interesting things for
me that what the entire world is going
to look like in terms of how it
leverages generative AI what these
companies are going to look like and to
me even for Google that is actually one
of the more interesting parts that the
entire business has been built around
kind of like fast adoption slow like
Gmail and Google workspace in the past
was just get it in front everyone's
hands and start building out more
experiences and give them as much usage
as possible. Whereas now Gemini is is
different and and you can see that in
the way they're all trying to figure out
how to price this stuff. Can I say we
have a pretty intense debate going on in
our big technology discord about this.
There are like two sides of this
equation. Um, one side is that just get
the usage and all costs will fall to
zero because there's so much investment
in this space and the other is um
talking about how like you know I'm
losing money on every product I make.
I'm just making that up in volume. So,
you know,
>> we tale
time. Yeah.
>> But I think that's one of the big open
questions that I walked away with.
>> Yeah. No, agreed. When venture is
involved, that's the eternal debate.
>> Exactly. All right. Let me give uh one
last quick thing. Um and that is that
one of the main things that I wanted to
go into this interview and this
conversation was trying to investigate
whether Anthropics rise in revenue. We
all know they've gone from like 1
billion last year. They're projecting 9
billion this year which we're going to
get to in a moment. I just wanted to
know is the thing that is buoying the
revenue is that all coding or is it uh
broader? And I learned it's much
broader. So they are working with
companies in industries like travel,
healthcare, financial services,
insurance, companies like Fizer, United
Airlines and AIG to implement this
technology within their workflows and
it's not just coding. So I think that
the fact that it is broader than coding
is a bullish sign for the company.
>> Yeah. I mean listen regular listeners
will know this to me is the ultimate
battleground is is actual business
implementation and use cases and within
the enterprise and and for all the talk
this is not real yet especially for the
anthropics of the world. So, so I think
they're clearly moving into the space,
but to me, I don't know, like they have
these use cases. They're starting to
build out their teams in these spaces,
but on the other hand, like does that
decrease focus from the pure software
development where they could win? And I
think that's the the question all these
companies are going to have to face.
They have to do everything. Again, we're
going to talk about the funding in just
a second, but they will anyone truly is
this winner takes all or will certain
competitive certain people win niches
within this space?
>> That is a great question. So, I'm
curious what your answer is to that and
where you would put anthropic in sort of
the ranking of these companies.
>> Well, no. So, I'm a firm believer that
no, no one is going to win it all. That
consumer and enterprise are different.
that uh different you know like the act
of software engineering is different
than the act of marketing and and I'm
definitely not a god model one model
will win and be able to do everything do
everything well and that company will
also have the best product for all types
of use cases and for everyone so so I
definitely think like that is not going
to happen I mean we we've seen in tech
like social media for a long time
Facebook dominated then you start to see
some level of competition but but the
network effects within something like
social media I think are very different
than the network effects from like
scaling.
Let me ask you this is the risk that
there are some economically clearly
economically valuable areas of this
world and all these big model companies
end up directing their attention there
and then splitting the market and then
just not having the return on
investment. uh that they expected. Let
me just give coding as an example. Uh
Anthropic obviously has the lead in
coding. It's been a good business for
them. Google uh just brought the
leadership of Windsurf in um apparently
in an attempt to get better at AI
coding. GPT5, which we're going to talk
about in a moment, uh is expected to be
much better at coding. If you have these
three multi-billion dollar efforts going
at the same market dividing it up, is it
a pot is it potential? Is there a
potential risk that like no one wins?
Right? Because if there's not going to
be one taking all, um is it possible
that you just end up getting this like
spoiler effect where like nobody really
sees the return they want?
>> I think you just defined free market
capitalism and competition, Alex, and I
like that. I think that's a good thing.
I think by no one wins this just goes
back to the question around the econ
what do the economics of this look like
eventually and to me Mark Zuckerberg
doing out 100 million per engineer which
we talked about last week and said it is
justifiable but I think we start to move
away from that arms race mentality and
people have to hire sales teams and go
to market teams and build good product
and keep like prevent churn and we just
get back to the normal way business
works. And you started this episode
saying if you're good at business, you
make money. And I think uh if there's
ever a takeaway, if you're good at
business, you make money. And I think
that's what it'll come back to rather
than the idea given the rate of
competition that it will make the idea
that any one company is going to be so
far ahead purely from a model standpoint
that you'll have to win on the other
parts of uh again like Salesforce didn't
win cloud early on because it just was
the best at cloud. it won cloud because
it was just like a powerhouse in the
rest of doing business. So I think uh
again this goes back to like social like
Facebook even Google they created
software monopolies solely on incredible
software but these types of businesses
have to have the rest of the like Google
wouldn't have without its advertising
model wouldn't have been that
interesting. So, it's still not it's
still going to require more.
>> That's right. And just as that
requirement shows up, we're starting to
see the stakes increase again. So, this
is from Bloomberg Anthropic nearest
funding at 170 billion value as revenue
surges surges. Um the investment is
going to be they want to raise as much
as 5 billion in a new round. By the way,
they just raised most recently in
January. uh they've been in discussions
with Iconic Capital to lead the Canar
Investment Authority in Singapore
sovereign fund about participating. Um
and then the company was generating
about 4 billion in annual recurring
revenue or annualized recurring revenue
earlier this month. Um but it now
expects that revenue could hit 9 billion
by the end of the year. This is a new
stat from the Bloomberg story. Uh one
thing that stuck out Daario was like
listen I am surprised but we've seen re
revenue 10x uh from zero to 100 million
from 100 million to a billion and from 1
billion we're now at four he said 4
billion annualized or maybe 4.5
um so they're going to have to like
seriously like the the run rates are
going to have to look like they're in
the 20s I think at the end of this year
if they're going to hit 9 billion um
because they're going to have to make up
for those months they weren't on the $4
billion run rate, but um I don't know,
maybe it's possible they're going to get
the money to find out.
>> Yeah. What are they going to do with the
money? That's again going back to is it
I'm so curious and I I know even with 24
interviews and diligent reporting
getting a true answer of how does that
investment look like on a proportional
level between investment on the model
side and investment on the like business
side let's say is uh is an answer that's
almost impossible to get but I don't
know did you get any sense around that
>> oh yeah I don't think it's that hard to
figure out I think it's going to go
toward towards uh infrastructure and
getting larger data center.
>> So all right then you just answered the
question. Yeah.
>> Yeah. I mean I think that's one of the
things that's coming up here and why
Mark Zuckerberg has been offering all
this money.
>> It's actually like a pretty smart thing.
It's like all right well if I'm spending
you know 100 billion on data centers
just like throwing a number out there.
Why can't I spend onetenth of that or uh
1/100th of that on talent?
>> Yeah. Okay. So then if that's the case,
I I mean the assumption there is you're
scaling revenue solely on I mean
virality essentially or just like highle
brand marketing by saying things like
bioweapons I guess but but to me I I
mean I guess I will say this with a
grain of salt because they have shown
they're able to scale revenue already
with this philosophy and this strategy
but to me does it keep going or at a
certain point especially at that scale
are you going to start running into the
Googles of the world or or the
hyperscalers more more regularly versus
you every individual software engineer
is ready to pay you 200 bucks a month um
on their bank on their work credit card
versus uh versus that's a whole other
level of competition.
Well, you would imagine that um it would
be harder to 10x every time you 10x just
because the law of large numbers comes
into play like going from
unless you're
>> unless you're Nvidia in which case that
law doesn't really apply. You just
substitute Jevans paradox or whatever
>> fun madeup economic term you want and
you just keep printing money. U but
>> I don't know if they get to 10 billion
this year, are we going to getting from
10 to 100 billion is is much much
harder. I don't think there's any
If they get to 10, I'm I will tip my hat
to uh Dario and team.
>> Yes, I I will too. And speaking of 10,
OpenAI is expected to surpass that this
year actually. So uh OpenAI hits 12
billion in annualized revenue, breaks
700 million Chat GPT uh weekly active
users. This is from Bloomberg. They
roughly doubled their revenue in the
first seven months of the year, reaching
12 billion in annualized revenue. U says
OpenAI. And I think there's this big
stat. This is a big stat. ChachiT has
700 million weekly active users. I mean,
for a product to come on the market in
November 2022
and potentially be on the road to a
billion users by, let's say, mid 2026,
that is insane. From a company with no
footprint beforehand.
>> Yeah. It to me the most impressive part
of that is there's no entrenched
virality in the product. Like yes,
there's share your conversation which
actually I saw this post today and it
was really interesting that apparently
Google is now indexing shared chat GPT
conversations and they're searchable
conversation for another day perhaps.
But
>> no, let's talk about that now actually
because I found that to be kind of weird
and and concerning that like
>> I mean maybe because there's also been
issues with like Meta's conversations
showing up and you can like there's
almost nothing weirder than like getting
a chance to access people's private
conversations or seemingly thinking
private conversations with these bots.
They people will say the weirdest things
to these chat bots talking about their
problems, their marriage, and the fact
that like you can you can you know I
guess when you hit that share button
there is there any clear messaging that
this is like sharing to the entire I
mean you should you should intuitively
know that you're going to share this to
the entire internet cuz if you drop it
to somebody else it's going to show up
but like uh the idea that this could end
up being blasted to you know indexable
Google is kind of crazy to me. Well,
there's two points on that. One, it also
it just kind of brings me back to I love
the brawl as as you know like Google
being like let's index that stuff like
realizing oh well we'll take some of
their information right now and make it
available and interesting through our
own platform. But I think yeah the other
part so so again like if you create a
public share URL it gets indexed. If
you're like sharing the conversation by
itself and not creating that URL, it
does not. Same with Meta. Uh there was
like a big uh brewhaha like a month ago
and it was terrifying. Like I was going
through Meta AI and seeing some really
weird conversations that were being
publicly posted in feed. But again,
people had meta even more so it felt
like accidentally hit share. But I think
but but but I think so two parts of
that. There's getting to 700 million
where virality is not entrenched is
incredibly impressive. But this is where
still how this stuff lives in our life
especially at the individual and
consumer level. I think there's so much
that's going to happen and so much that
needs to be figured out at the business
and enterprise level even more so. I
think these things are a constant
reminder from open AAI that like chat
GPT suddenly imagine here if your
conversations that your employees are
sharing or suddenly index but even
remember there's a story a few weeks ago
where I forget which company was IPOing
and someone asked for like internal
financial documents and chatbt made up
this entire uh you know like I have
these documents I got them from an
investor who was part of the like uh
testing waters discussions and then you
know the company denied it that they
were real so seemingly was hallucinated
but what's getting indexed where what's
getting trained on where what's going to
show up where I think that there's
there's definitely at the speed we're
moving a lot that's going to need to be
figured out.
>> Okay. So this brings me we talked a lot
about GPT5 last week but I'm actually I
haven't gotten your perspective on it
yet since you were out. Um, it seems
like GPT5 is going to come pretty soon.
My guess is
I don't know, sooner rather than later.
So, what do you think about GPT5? Are
you're obviously the product guy, not
the model guy. Are you excited at all
here?
>> No. No. No.
>> You're the only person who who has been
focused on AI who doesn't have any bit
of anticipation for this new model. I
think like uh I I just I don't know what
step change to expect or see. The last
few model releases have felt like iPhone
releases for me. So I think and again
this is going back to team product over
team model but I'm just I don't know
what do what will what do you dream of
or expect that will just happen that
will blow your mind to a point that uh
you you're like we've hit ASI right now
wait is it is it advance have we left
the advanced and now it's just super
intelligence as per Mark Zuckerberg is
it now just SI no ASI
>> no A is artificial, not advanced. But I
>> artificial. Yeah. Yeah. Yeah. Yeah.
>> I know it's tough to keep track of all
the buzzwords. But
>> AGI, ASI, but but do you think GBT is
going to be our AGI? And what does that
mean to you?
>> Well, last week on the show, I said I
think that once they release this, Sam
Alman is going to call it AGI. Uh, of
course I've since I mean maybe it
happens, maybe it does, but I've since
sort of taken a step back and thought
about like what could be the downsides
here because it is going to be this very
big swing that they've been waiting to
take and waiting to release for a long
time. And Sam has also inflated the
expectations I would say quite
dramatically. So clearly they think they
have a better model that they're going
to hand over which is which is I think
interesting and um would be cool to see.
Uh but the other side is like maybe the
expectations are too high and people
will sort of put this up as like a test
for whether they're following the
scaling laws and whether the improvement
is as exponential or even linear uh that
you know in the way that they've been
talking about. And um I read a post this
week by Ryan Greenblat who is a
researcher an AI researcher who uh who
asked should we update against seeing
relatively fast AI progress in 2025 and
2026. It's a very simple post. He's
basically saying GPT5 is expected to be
released within 3 weeks and rumors f
focused that is it is substantially more
focused on practical agentic software
engineering. Um my expectation is that
GPT5 will be a decent amount better than
03 on agentic software engineering but
won't be substantially above trend. So
we could end up getting a situation
where we see a better model. It seems
clear that this model is going to focus
on an economically valuable area which
is coding. Um but if it doesn't continue
the trend, I think we're going to see a
secondary news cycle here, which is that
um people will be like, well, you know,
we were promised a AGI. Uh it is not
following the trend. It is showing those
diminishing returns. Uh and therefore,
we're going to, you know, go all of a
sudden into skeptic mode for the rest of
2025 and 2026 that things will
dramatically improve from here. And so
I'm curious what you think about that.
>> Yeah, I think it's it's going to be like
kind of a seminal moment. There's some
been something around the like allure of
GPT5 because it's been dangled in
cryptic tweets for and like code names
for so long by Sam Alman that they have
to deliver something magical and agentic
software engineering step up versus step
change and also seeing the word software
engineering there again isn't as
interesting to me like is this another
Sora or is this GPT T3. I I don't know.
Like I I still am trying to envision
because they've never given us an idea
or a picture of what it will be. And I
get it that that kind of helps create
the hype. But by not kind of clearly
defining that direction for everyone and
just trying to make it this kind of like
mystical thing, it I think it inflates
expectations too much and I think it
could certainly lead to skeptic mode.
So, here's my uh prediction. Um, there's
going to be an overreaction and maybe
two overreactions. I'm almost 100% sure
that we'll see at least one and maybe
two overreactions to whatever happens.
>> Wait, what are the two overreactions?
>> The first one is The first one is while
we reached ASI or AGI and the second one
is like, oh, this does not actually
continue the trend.
>> Do you think he's going to say ASI?
>> No, definitely not. Too early for that.
I' I'd still I still would be uh maybe
>> uh surprised but not shocked if they say
it's AGI, but I think super intelligence
is not going to be uh
>> just to go after Ilia a bit. He just
made his whole new startup safe super
intelligence.
>> Be like, well, we've released unsafe
super intelligence.
>> USI and we're okay with it.
>> USI that's the future. Well, one thing I
think may not be overhyped because
there's almost little hype about it is
AI video and the rapid capabilities that
are advancing in that area. So, let's
talk about that and whether we're in a
market bubble right after this. And
we're back here on Big Technology
Podcast Friday edition with Ranjan Roy
of Margins talking about all things AI
this week. And Ranjan, one of the
interesting things that happened this
week is you and I both dropped pretty
fun stories about uh actual progress
with AI video or dreams of AI video uh
in our doc independently. So why don't
you lead with yours and then I'll tell
you mine.
>> All right. So the first thing I had come
across and and again what you had just
mentioned the lack of AI hype in this
space I think really is fascinating.
Fable Studio, an Emmy-winning startup,
uh just raised money including from
Amazon uh for it's they have an AI
platform called Showrunner. So the idea
here is you pay $10 to $40 per month and
you get to create your own animated
shows or build on others existing IP and
you can do things like insert yourself
as a character into the show or actually
define the entire direction of the show.
I think this is incredibly fascinating
because I even for my son like two years
ago or a year and a half ago or whenever
Chat GBT released voice mode, we started
doing stories and I would be like you
know inserting him into it and telling
me a story about a magical land and
dragons and use the name John J and he
loved it and I like this whole world of
kind of created entertainment and what
kind of opportunities and experiences
it'll open. I think this is where you'll
see how to use like you know it's one
thing to just use chat GPT and become a
slightly like more productive in life
but to actually create these kind of
things I think is incredibly fascinating
but the other interesting part of this
though is Fable is pitching studios to
put their IP on its own platform and
even in the article that was on Business
Insider you know they claimed that
Disney might be interested and like the
idea that you know will they ever give
you certainly Disney I cannot imagine
would be but but you know like imagine
having access to making my own little
South Park character and then making a
story around it. It seems like that kind
of creative energy that's the fun stuff
that will really push this technology to
the mainstream or just create things
that you know would have been
unimaginable before. Do you think this
is real?
>> Yes.
>> And do you think it's going to work in
this model?
Yes, but I will make a prediction here
and that is that this is people are
going to say this is going to displace
Hollywood and I think this is just an
entirely new category in and of itself
because I think one of the things one of
the great enjoyments of watching good
entertainment is not being too involved
in the creation process, sitting back
and being surprised by the brilliance of
the people that are creating the content
that you're watching. Uh same with video
games. Like part of the enjoyment of
video games is you know not necessarily
like creating your own path is just like
following the you know brilliant output
of thousands of game designers if you're
playing something like Assassin's Creed
and not having to really worry about
doing that yourself. Like I think our
brains have two different modes. We have
like kind of doing and consuming so to
speak. And um this type of AI creation
actually puts uh the consuming bucket in
a more of a creation place if that makes
sense. So I think that if we're going to
basically transpose the entertainment
side of our uh lives into the creation
part of our lives, it doesn't displace
entertainment. It just creates a new
category that sits maybe right between
those two.
>> Okay. I I'm I'm in. I buy that. I think
because if you think about like the
entire creator economy, even the idea in
like 20 years ago that you could
essentially create your own two to three
minute TV show that would get
distributed to millions of people was
unimaginable. And now every single reel
on your Instagram feed is that and
that's like someone giving access, given
tools, given distribution to do that.
And so you're right, but it hasn't
displaced movies. I all of us watch more
like high production Netflix than ever
before. So yeah, I I think that's a fair
idea that it it's a different category.
Maybe to me it's almost the more it'll
displace like creators and like or it's
a new category creator and it'll compete
with kind of like influencer type reels
versus it's it's not going to ruin
Avengers 26. But no, it's very
interesting the way that you're thinking
about this cuz the way that I came at
this is like are you going to want to
create your own personalized stuff and
watch that as opposed to do you want to
take these tools and create derivative
work that is viewed by lots of people
and that is actually I think more of a
threat uh to the traditional
entertainment industry than the first
use case uh because it is something
that's created by someone else but
viewed by viewed by many. The one thing
I'll say is um creating content is like
really hard and you might be able to
entertain yourself on these platforms
for a while, but it's much more
difficult to again like have that
storytelling capability. Um even if you
could like legitimately just prompt a
Disney movie um to have that story
capabil telling capability that will uh
sort of engage so many people. Now,
maybe you wrote an amazing prompt and
the AI is good enough that it can, you
know, have a can be like a oneline
prompt that turns into a blockbuster
hit, but I'm less bullish that that is
something that we're going to see
anytime soon. Well, I'll add the caveat.
Creating good content is incredibly
hard. In reality, creating content has
gotten easier and easier and easier that
it's like harder to find that good
content. But okay, I think I'm now kind
of after talking about this, maybe this
lives in that like you can get
personalized books or engraved or
monogrammed like gifts or maybe it lives
in that realm more so than having any
other major impact. But I still I don't
know. Do do you know what's nuts? In
2009,
Electronic Arts had a feature for FIFA
where you could take a photo of yourself
from like five different angles and
upload it and create a player that
actually was on the field. And I still
actually this was one of my first blog
posts ever
>> um back May 2009. Deep cut. Yeah. No,
but I literally it was magical. I was
like on the field with Fernando Torres
in Liverpool and like scored a goal and
was like hugging the team and these like
pixelated faces in the background are
and it's crazy to me that that never
took off. So clearly I was in the niche
and not everyone was asking for that but
I don't I still remember that and that's
why like there has to be some things
that are just really fun and cool and
make people excited to kind of
experiment and do stuff like Yeah. in
the video game. Imagine you are the
player. You see yourself in there.
That's that's kind of fun.
>> Let me give you a crazy stat. So
streaming over the past year has been up
6%. Netflix has been flat
in terms of wait. It's the share of
streaming that it or Netflix growth has
been no Netflix has not increased share
despite the fact that streaming as a as
a percentage of all TV or screen viewing
has gone up and the thing that is
growing is YouTube.
>> So that's maybe a counterargument to my
earlier stand statement.
>> Yeah. Yeah. Yeah. Yeah. I think even
more so. Yeah. You don't have to still
creating good content that gets
discovered and surfaced is it's probably
harder than ever if you're actually if
that's the model. But I don't know. I'm
actually I am excited about this. I
think like this is just going to be fun.
This is and maybe it lives in the world
of you're buying some credits and
sending it to your friends and like
doing stupid stuff and or funny stuff or
stuff with your family and it's
emotional, but I still think there's
something here that's going to really
define entertainment 5 years from now in
ways that we didn't expect.
>> You might be right. And I'll just share
my cool video AI video story of the
week. This is from TechCrunch. Google's
notebook LM rolls out video overviews.
Google announced on Tuesday that it's
rolling out video overviews to Notebook
LM. It's AI based notetaking and
research assistant. Uh with the new
capability, Notebook LM is taking more
of a visual approach to helping users
understand different topics and the
ideas. The feature creates new visuals
while pulling in diagrams, images,
quotes, and numbers from uploaded
documents to explain the content. Google
says the feature is good for explaining
data, demonstrating processes, and
making abstract concepts easier to
understand. I don't think people
understand how freaking crazy this
product is. You legitimately upload
documents, articles, whatever it is, and
it will make you a video filled with
like little animations and visuals that
breaks down the topic you're trying to
understand and like will like show it to
you visually. Just the amount of it just
doesn't even seem like a real product.
It's crazy to me.
>> Well, and remember Notebook LM kind of
went viral at the for the first time
with basically making a podcast out of
the content the text content that you
feed it. And what was so
like I'm just going to say incredible
about it is is like the inflections of
and we say this as two guys talking on a
podcast to each other like like it
almost made a mockery of us and everyone
else podcasting cuz it it really felt
like a podcast and two people talking to
each other and their inflection and
their the the the pauses and the kind of
language that they were using. And so
that's what went viral there. So I'm
very interested in what it's going to do
on the video side. But to me, one of the
more interesting questions I'm really
curious what you think about is is like
I saw Joe Wezzenthal, I saw a tweet uh
around it was like the general trend is
clear that all forms of passive media
consumption are dying. Everything is
some kind of conversation. With Notebook
LM, you don't read a PDF. You create an
AI generated podcast to listen to. you
ask questions. He's saying oral culture
accelerates. Like do you think
>> actually going back to our previous
conversation is passive media I'm
guessing you're going to say not dead
but so much of Instagram I guess has
become more passive. Twitter s is very
interactive. Like where do you see this
going?
>> I think Joe is so wrong on this take for
the reason that I said earlier.
>> Hear that Joe?
>> Yeah
>> Joe if you're listening. Uh totally
wrong take here. Um, why do people go to
entertainment? It's it's escapism in a
way. It's like I want to just like take
leave my world for a moment and go into
this crazy world that I would never be
able to visit except the fact that like
Netflix has made this game about like
you know this video about the Squid Game
and I want to watch that and that you
transport yourself there. You imagine
yourself as a character as you watch.
You're entertained. You get like
adrenaline boosts by watching these
things maybe. Um, so yeah, I don't I
don't think people are gonna want to let
that go.
>> No, but but see this is actually when I
watch now, I go to Reddit after and read
threads. I like ask Google or Chat GBT
in real time, who are the characters,
who are the actors, and what else have
they been in? You know, like it's no
longer unless I'm in the theater
completely passive. there's always kind
of like ancillary actions or activities
taking place around the content which is
good which kind of like deep more deeply
immerses you in it at least for me maybe
I have attention span problems at home I
think that's a common behavior now
>> I think you're right and I think this is
why our society is unhappy
>> okay
>> let's talk about let's talk about uh the
market um we are in the thick of big
tech earnings we have about five minutes
left but I definitely want to touch on
Bloomberg, the S&P 500 is a touch away
from triggering sell signal. Bank of
America says, um, this is from Bank of
America's Michael Hartnet. Overbought
markets can stay overbought as greed is
harder to conquer than fear. He says
that 80 88% of uh the country's stock
indexes are above their 50 to 200 day
moving averages. Um, oh, when when they
are 88% above these moving averages,
it's time to sell. Currently 82% of them
are above their moving averages which is
of course this technical behavior or a
technical tracking uh that they do of
the markets but obviously like it would
seem like we have a lot of froth. We
have Nvidia at 4 trillion. We have
Microsoft which just became the second
$4 trillion company which is crazy. Uh
but then again you do have earnings from
these companies and everybody's beating
earnings expectations by a lot this
quarter. Uh what do you think uh this
all means? these no everyone is Nvidia
now like I mean like and as we speak
Facebook is a Meta is up 11% pre-market
uh Microsoft is up 9% and these are
multi-trillion
companies but Microsoft's Q4 revenue was
up 18% at 76 billion 18% like I mean
having been in the business world a long
time like hitting near 20% growth grow
when you're a a startup or you're like a
mid level midscale company is hard. It's
hard as hell. So like to do that at that
scale is is shocking and I mean it makes
it not unreasonable that and when your
net income and your profit margin is 24%
27 billion like these numbers are nearly
unfathomable the same way I would feel
when uh when you would see those Nvidia
earnings about a year ago. So things are
things are humming. I mean, there's no
taking that away. Do Do you see this
continuing?
>> Well, every time I said I don't know if
they can continue to grow, they've
continued to grow and it looks like the
tariff threat is uh not going to be
anywhere near as bad. And remember, the
economy was humming coming into that.
So, I think that it will continue. Now,
um it's funny cuz like I read
>> death blow right there. Death blow.
>> Yeah. Right. I read that. But the thing
is that I read that headline and I was
like, did the people in 2000 know that
the, you know, massive growth that they
were seeing um was the beginning of a,
you know, a crash, a bubble and a crash?
Probably not. But then again, the
earnings are there like the money is
coming in and it is like the entire
economy basically spending money on
these services to try to get better at
what they do, right? cloud revenue at
Microsoft, I think we might have
mentioned this, 30 39% year-over-year.
Azure 39%
um and the fullear revenue topping 75
billion and Microsoft's cloud revenue
for the quarter reaching 46.7 billion.
It's real money. It's real money. So, it
seems like this can keep going, but
maybe we're missing something. Yeah, I
think
I think those are the only words to put
it. I'm near speechless. It seems like
it can keep going and maybe we're
missing something. What could we be
missing? I'm curious if others have
thoughts, but it's uh they're good
numbers. They're good numbers and
they're not slowing down. Again, Meta as
well up 22% on topline, up 36% on the uh
bottom line. Yeah, these are these are
good numbers for any company at any
scale, much less a multi-t trillion
dollar company.
>> Yeah. And capital expenditures are going
up across the board. Big tech is
expected to spend 330 billion this year
building largely data centers.
>> Got to spend money to make money, right?
>> That's right. So,
>> if you're good at business,
>> if you're good at business, you make
money.
>> Good at business, you make money. Folks,
if if you you know, I've heard we don't
learn things on Big Technology Podcast.
We've just, you know, given one of the
best business lessons I would say in the
history of the show. If you're good at
business, you're going to make money.
>> I think that's the only way to end right
there.
>> Put this thing on master class. Put it
in the books. All right. It's worth the
subscription. Anyway, Ron, it's great to
see you as always. Thanks for coming on
the show.
>> All right. See you next week.
>> All right. See you next week. Thank you
everybody for listening. Thanks again to
all of our new and existing listeners
and viewers. It's always great to be on
this journey with you and thanks again
for listening. On Wednesday, Replet CEO
Amjad Masad is coming in to talk all
about vibe coding. So I hope you'll
stick with us for that. And also MG
Seagler will be here on Monday for his
monthly Monday spot to talk about Mark
Zuckerberg's personal super
intelligence. Thank you Ron John. Thank
you everybody for listening and we'll
see you next time on Big Technology
Podcast.
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