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

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) Anthropic CEO Dario Amodei's prophesy that 50% of entry level work will disappear 2) Hype or true: Is mass AI-driven unemployment just marketing? 3) How Amodei's prediction could come true 4) How work might shift even before job loss, as in the case of Amazon's engineers 5) NVIDIA's business is booming 6) Are export restrictions on China working? 7) DeepSeek's updated R1 model is here 8) Meta's AI problems 9) Meta teams up with Anduril 10) Did Mark call Palmer? 11) Grammarly's unique funding model 12) Elon Musk gets out of DOGE 13) CEOs using AI avatars on earnings calls --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  Is AI going to drive mass unemployment? Or are urgent warnings about job loss just marketing? Nvidia meanwhile turns in stellar earnings. Mark Zuckerberg and Palmer Lucky team up to build war goggles. And CEOs are using AI avatars for their earnings calls. We'll cover it all on a big technology podcast Friday edition right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era.

• 0:42Alex Kantrowitz?

  Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial to go inside a large scale agentic CX transformation, including the business decisions, trade offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:27Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition where we break down the news in our traditional cool headed and nuanced format. We have a big week of news to speak with you about today, starting with the prophecies of Anthropic CEO Dario Amode that we're about to see mass unemployment due to AI. We'll also touch on Nvidia earnings. We'll talk about this partnership between Meta and Anduril to build these war VR goggles, which is quite interesting and might signal a shift in Silicon Valley. And of course, we're going to talk about CEOs dispatching their AI avatars to their earnings calls, and maybe they will come to a meeting near you. Joining us as always on Fridays to break down the news with us is Ron John Roy of Margins. Ron John, good to see you. Welcome.

• 2:09Speaker 01

  Well, at least when I lose my job to an AI avatar, I will have war goggles. So this week makes me feel better.

• 2:16Alex Kantrowitz?

  It is interesting. Every time we talk about AI technology, there's this combination of will it work, won't it work? And this is going to be great, and this is going to be terrible. And I think we're just kind of hitting all of those emotions in one this week. And so let's start with this prophecy from Dario Amode, the CEO of Anthropic, about what is going to happen to white collar jobs. He tells Axios that there's going to be a white collar bloodbath. He says AI could wipe out half of all entry level white collar jobs and spike unemployment to 10 to 20% in the next one to five years. He said AI

• 2:59Alex Kantrowitz?

  companies and governments need to stop sugar coating what's coming, the possible mass elimination of jobs across technology, finance, law, consulting, and other white collar professions, especially entry level gigs. So let me just turn it to you right away, Aron, John. I mean, 50% of all entry level jobs within five years. I don't think that this is entirely out of the realm of possibility, but wouldn't you agree that this would have to just be like, it's weird to say best case, but the best case scenario for this technology, in order to come anywhere close to that, would have to meet and exceed all of our expectations to actually be able to do something like this?

• 3:42Speaker 01

  Yeah, this still feels a bit like marketing hype for me. And I think, to me, if we break it down to a couple of different pieces, yes, I think the jobs of today are fundamentally going to change. I'm a big believer that especially white collar work, which was not threatened in the same way as more blue collar or manufacturing type work in the last 30 years, is going to be threatened. I actually, my theory on this is, entry level jobs are actually going to be safer because they're going to become different. And the type of workforce that's going to be entering the market is going to be a lot more AI native than a lot of existing, especially more senior people. So if I'm junior, if I'm entering

• 4:26Speaker 01

  the workforce, I would much rather be entering now than 10 to 15 years ago.

• 4:32Alex Kantrowitz?

  Okay, I hear some music in the background. Is this the, it can't be. It's the hype or true jingle?

• 4:51Speaker 01

  Listeners cannot see my jaw is on the floor. Alex just took the worst name game of all time. And I guess we're doing this. I guess we're making a thing out of it.

• 5:03Alex Kantrowitz?

  I ran it through

• 5:03Speaker 01

  Thanks to AI.

• 5:04Alex Kantrowitz?

  And we are in the thick of it. Hype or true? Dario Amode's prediction that 50% of entry level jobs will be wiped out. So let me take the other side that this isn't marketing just for the sake of conversation, right? I mean, we are seeing this technology improve dramatically. And we're also already seeing some evidence that it's harder for people coming out of grad school to get jobs today. And AI is definitely in the workplace, especially in areas like coding, for instance. And we're going to talk about it in a moment. But Amazon, for instance, is a company that has smaller teams responsible for the same amount of code,

• 5:47Alex Kantrowitz?

  just with like, less people to do it. So this idea that if the technology keeps improving the way that it is, and we go into this world where we do get agentic technology, and we do get AI that can go out and do the deep research for us with fewer hallucinations, maybe it's not so crazy that Dario, who sees the trajectory is going out there and telling us that, hey, listen, this might be an issue.

• 6:14Speaker 01

  No, but again, I still look at this as it's self interested in the idea that Anthropic is a company that directly benefits if that is the truth. But to me, I mean, we just mentioned coders or software engineers or developers, that job at that the scale that it is today didn't exist nearly in the same way 20 years ago. So to me, it's just going to be a shift. And maybe it's a little bit overly optimistic. I do think his call that like, Governments or the civil civil society needs to recognize that things are going to change is important. And I do think there needs to be genuine conversations around

• 6:53Speaker 01

  this. But again, jobs change, people adapt, and I don't know, maybe, maybe I'm too hyped up from that song that you just played. But if we're talking about innovation, in what other world could we have a hyper true jingle that quickly? That's, that's a net positive for society. That's all I'm saying.

• 7:13Alex Kantrowitz?

  I think it's already, just because we have that jingle, it's already outweighed all the negatives of all time that we might see with AI. But Dario, in his conversation with Axios, actually goes through step by step how he sees this happening. And yes, innovation always creates job loss and job creation. But the idea is that this technology is potentially so powerful that it just puts this process on steroids, or as he said last week, on acid. Okay, so here's the step by step. Number one, OpenAI, Google, Anthropic, and other large AI companies keep vastly improving the capabilities of their large language models to meet and beat human performance with more and more tasks. This is happening

• 7:57Alex Kantrowitz?

  and accelerating. The US government, worried about losing ground to China or spooking workers with preemptive warning, says little. The administration and Congress neither regulate AI nor caution the American public. This is happening and showing no signs of changing. Most Americans, unaware of the growing power of AI and its threat to their jobs, pay little attention. This is happening too. So do you have an argument that any of those three steps are incorrect?

• 8:23Speaker 01

  I would actually still, again, argue with number one, but that's more of a just improvements in large language models. I don't think is going to actually see adoption in implementation. I don't think that's the issue or the problem. I think there's a lot of other points of resistance. So I disagree with that one. I like number two, the idea that to avoid spooking the population. I mean, it's a good little conspiracy theory that

• 8:49Alex Kantrowitz?

  That is a great conspiracy theory.

• 8:50Speaker 01

  Yeah. And I mean, again, it seems completely plausible in the political climate. But

• 8:57Speaker 01

  Again, in number three, I think unaware of the growing power of AI. This is where I would actually vehemently disagree that AI, the promises made by the industry are at such a scale that it's my, again, my mom, whenever I go home, she's like, so what do I do with AI? And she's retired and like, I mean, it's to me, it's not that there's a lack of awareness. It's just there is a lack of actually adoption and implementation. I do think it's not because of a lack of awareness. I think it's because of a lack of how focused these tools are. We've been talked last week about how Anthropic and Claude are going to potentially move much more towards coding and software development, which shows that it's not working in other areas.

• 9:42Speaker 01

  So overall, I don't know, maybe I, as regular listeners know, I can be a bit cynical about a lot of topics, but I genuinely don't think it's as much of a threat as he's making it out to be.

• 9:54Alex Kantrowitz?

  Yeah, this is the part where I started to veer more into the hype side, where he says, then almost overnight, business leaders see the savings of replacing humans with AI, and they do this en masse. They stop opening up new jobs, stop backfilling existing ones, and then replace human workers with agents or related automated alternatives. I think this just completely underestimates how change management works in most companies and how slow most companies are at implementing even the most helpful software. And this idea that this could happen almost overnight, to me, is far fetched. Now, is this something that you could see happen over 20, 30 years? If the technology keeps accelerating at the pace it's been accelerating, which is an open question, maybe.

• 10:39Alex Kantrowitz?

  But this idea that we're going to see it within one to five years, that just doesn't really seem to meet the reality test for me.

• 10:48Speaker 01

  Yeah, no, I completely agree because Dario came from, he had his PhD at Princeton, I think, worked-

• 10:54Alex Kantrowitz?

  One of his two PhDs, yes.

• 10:56Speaker 01

  Yeah, I mean, two PhDs, that's not, in terms of not needing to learn about change management at organizations, I think that's like a pretty clear idea. And then the other thing-

• 11:07Alex Kantrowitz?

  Oh, he's the CEO of a multi-billion dollar company right now, so I won't take that away from him, but, but yes.

• 11:11Speaker 01

  Okay, fair, fair, I won't. But the, the, the part that he's missing in that whole thesis is growth, that it's, it assumes kind of like a steady state of economic output, and then underlying that, there's fewer jobs. But if we take the other side, and again, the more optimistic side, that this actually unleashes new waves of growth and new types of companies, I think, then new jobs are created, there's different types of jobs are created. I never thought I'd be this optimistic, but on this one, I still believe, still believe.

• 11:47Alex Kantrowitz?

  It is interesting to me that he is taking that pessimistic perspective, given where he sits. Like, he doesn't believe that if you are an entry-level developer, rather than a company like not hiring you, his tooling could help make you a 10x developer and then help the company grow much further than if you weren't there. So, I think that is pretty telling, telling in terms of it falling on the hype perspective. And there's this kind of great slash funny CNN article by this woman, Alison Morrow. She says, "The CEO of a soda company declared that soda-making technology is getting so good, it's going to ruin the global economy. You'd be forgiven for thinking that person is either lying

• 12:28Alex Kantrowitz?

  or fully detached from reality. Yet when tech CEOs do the same thing, people tend to perk up." She says, "The point is that Amode is a salesman, and it's in his interest to make his product appear inevitable and so, and so powerful, it's scary. He stands to profit off the very technology he claims will gut the labor market. But here he is, telling everyone the truth and sounding the alarm. He's trying to warn us. He's one of the good ones."

• 12:53Speaker 01

  Yeah, actually, that's a really good point. I think if you have this technology and you're generally worried about it and you are the CEO of a multi-billion dollar company, either you are the most altruistic person alive, or you're doing it for self-interested reason. Again, soda CEOs did not tell the world that our soda will become so addictive, it will unleash a wave of obesity. It just happened and people made money. Like, I think the idea that I'm going to, I don't know, is he trying to risk the entire business of Anthropic by saying this? I think it's good. We've seen this for three years now.

• 13:33Speaker 01

  AGI, ASI, AI, like killing all of humanity is a threat. Now white collar bloodbath. I think that it works from a marketing perspective. So we'll keep seeing this.

• 13:46Alex Kantrowitz?

  Okay, let me one more time try to make the case for Amade and then we can move on. I think if you're being super charitable to his perspective, you would say he's interested in building AI that's going to have a big impact on the world. Things like he talked about in this interview with CNN, curing cancer and helping us with medical applications, creating abundance. But he also sees that there's going to be a downside. And maybe he truly believes, and I don't know, is there 100% chance that he's wrong in this? That he believes that his technology will have an impact? And if you do believe that, then maybe it is in your interest to go out and say, yeah, there could be problems. And in terms of being the one that's developing it, well, I think maybe there is something

• 14:28Alex Kantrowitz?

  to be said about being the person who wants to develop, develop the technology and steer it in a way that's impactful versus destructive.

• 14:35Speaker 01

  All right, I will actually, I'll end on a charitable note as well. I think on the topic of regulation, Amade came out when there's this proposed 10-year moratorium on any kind of AI regulation. And he said, that's not a good idea. So in fairness, He is advocating for at least some kind of steering the industry in the right direction.

• 15:01Alex Kantrowitz?

  And I think we should talk about what happens in the near term, which is not necessarily going to be job loss, but in some companies, and I think in some companies that aren't really viewing this the right way, it will be a change of job, one that will require harsher requirements on employees versus one that will sort of free them to do higher impact work. And this is the thing that I hinted at at the beginning of our discussion about Amazon. This is from the New York Times, very interesting story. At Amazon, some coders say their jobs have begun to resemble warehouse work. And the article says, "The more immediate downside of AI for software engineers appears to be the change in the quality of their

• 15:44Alex Kantrowitz?

  work. Some say it's becoming more routine, less thoughtful, and crucially, much faster paced." Three Amazon engineers said that managers had increasingly pushed them to use AI in their work over the past year. The engineers said that the company had raised output goals and had become less forgiving about deadlines, and had even encouraged coders to gin up new AI productivity tools at an upcoming hackathon. One Amazon engineer said his team was roughly half the size it had been last year, but was expected to produce roughly the same amount of code using AI. So is this kind of what the world looks like

• 16:24Alex Kantrowitz?

  where companies say you no longer have these long timelines to build the thing that you want to build because effectively I know that you can use AI to build it? We've seen similar things from Shopify, for instance, you know, the AI first company episode we did a couple of weeks ago kind of hits on this idea.

• 16:44Speaker 01

  I have a hard time feeling sympathy. I know Amazon is a rough culture, so like an aggressive culture and many often in a good way. So I'm not, I'm guessing those were not cushy jobs, but yes, work is changing. This is happening. Like even the idea, it's like they were encouraged to come up with AI tools at an upcoming hackathon. That's not bad. That's like people, like in your interview with Sergey Brin the other day, he said this is the most, if you're a computer scientist, this should be the most exciting time for you. I actually would expand that, that if you're at all in interest in technology, this should be the most exciting time for you. And yes, for software developers and coders,

• 17:27Speaker 01

  work will look vastly different. It was a good 20 to 30 year run. It's not going to be the same for the next 20 and that's okay.

• 17:36Alex Kantrowitz?

  Yeah, I think that's, that's a very good perspective. Okay. So, but what about this? Maybe you don't have time to think as deeply about projects as you did. This is again from the story, the new approach to coding at many companies has in effect eliminated much of the time the developer spends reflecting on his or her work. This is when developers say, or no, this is an analyst. It used to be that you had a lot of slack because you were doing a complicated project. It would take a month, maybe two months and no one can monitor. Now you have the whole thing monitored and it can be done quickly. So maybe this idea can, can we end up seeing less deep work or less reflection and then bigger thinking because you have to do things so quickly and be so reliant on the AI to program for you.

• 18:18Speaker 01

  I, I think that conflates two different things because on one side, almost by definition, this should allow for more deep work. This is taking care of the more monotonous repetitive things people did instead of having to rewrite an entire code base from scratch, that like that kind of work you're able to do. The question of monitoring work, that's to me, not an AI question. That's a culture question. That's a technology question that's increased dramatically, especially since the pandemic and when more work is being done on and digital surfaces. So I think, I think those are two different things. And I think some companies like an Amazon will very closely monitor and

• 19:04Speaker 01

  that's, that's how it works and other companies will work differently. But, but again, to me, AI almost by definition. Should free up more time for reflective deep work.

• 19:15Alex Kantrowitz?

  And it is kind of interesting that I guess a company like Amazon will just say, okay, now you're kind of like, you know, the delivery driver with the AI systems monitoring your every move and every second optimized to a T.

• 19:27Speaker 01

  I mean, probably the people who built those systems to monitor the delivery drivers are the ones anonymously being quoted. Yeah.

• 19:38Speaker 01

  Sorry.

• 19:38Alex Kantrowitz?

  Can't say you're surprised. But meanwhile, we're going to have an opportunity to really figure out what's going to happen because the surge in infrastructure building shows no sign of slowing down. We saw this in Nvidia's earnings that came out this week. This is from the Wall Street Journal. Nvidia's business is booming despite being shut out of China. The company's revenue reached 44 billion for the first fiscal quarter, for its first fiscal quarter, a 69% increase that was curtailed, so limited to just a 69% increase that was curtailed by Washington's new limits on China chip sales.

• 20:15Alex Kantrowitz?

  The company was unable to ship 2.5 billion of its H20 processors and projected an $8 billion in lost revenue for the current quarter due to that policy. So that's lots of money lost to China and or lost to not selling to China. And the company is still growing, yet we still see a tremendous amount of spending coming in from the tech giants, Microsoft, Amazon, Alphabet, Google, and Meta. They are all going to be boosting their spending on AI. And analysts expect combined spending by those four companies to alone top 345 billion this year, up 41% from last year.

• 20:58Alex Kantrowitz?

  And the data center business is going to be up a surge to 73% over last year to 39.1 billion. So two things here, Ranjan. Obviously Nvidia is healthy, no doubt about that. Even with the China stuff, it's still growing tremendously. And then second, like if scale is going to be one of the ingredients that makes these models better, we're still in the finding out stage. Like this infrastructure is still just booming.

• 21:24Speaker 01

  Jevon's paradox, welcome. It appears to still be the reality. I think that the we've seen more and more about, again, to reference the Sergey Brin interview again, I really liked, he said, it's going to be algorithms rather than compute than create the next round of advances. So I think like how the actual modeling works and how these things are built could change, and it appears to be changing. But as of today, May 30th, 2025, everyone's playing the same game and it's a compute game. So that's definitely not changing. And deep sea, but that this is a six to 12 to 24 month thing that we'll

• 22:08Speaker 01

  see rather than deep sea happened. And then it's gonna, you're gonna see a cut in spending the next day.

• 22:15Alex Kantrowitz?

  Do you think that the export restrictions that I just mentioned are working when it comes to restricting the exports to China? Now Jensen, of course, is going to be against them because there's lots of money to be made if he can sell to China. But this is from Bloomberg. He said, the Chinese competitors have evolved. They've become quite formidable. So speaking specifically of Huawei, he says, the latest AI chip is similar to the performance of Nvidia's H200 chip, a component that was state of the art until its replacement in recent months. You cannot underestimate the importance of the China market, Wang said. This is home to of the world's largest population of AI researchers. And he basically says,

• 22:58Alex Kantrowitz?

  like, you know, it's important for the US to at least be in there and be steering the way that they do it as opposed to restrict them. And then they're going to go ahead and do what they want anyway on almost as good technology. What is your perspective here?

• 23:12Speaker 01

  Yeah, I think, again, the the details of our export restrictions working are difficult for me to like, I mean, very directly say. But I think overall, I mean, that idea that, I mean, Nvidia to expand, seeing increased competition from Chinese suppliers, it's definitely going to be, it's, it's going to evolve pretty rapidly.

• 23:39Alex Kantrowitz?

  And now we have a new DeepSeek model, speaking of which. So this came out this week. There's a new upgrade to DeepSeek's R1 model that the company says reasons better and hallucinates less. The Chinese startup DeepSeek said Thursday that it up its upgraded artificial intelligence model can perform mathematics, programming and general logic better than previous versions. Its overall performance is now approaching that of leading models like OpenAI's O3 and Google's Gemini 2.5 Pro. This is according to DeepSeek in a post on the AI model platform Hugging Face. So DeepSeek's still keeping keeping pace, it seems like.

• 24:19Speaker 01

  DeepSeek's still deep seeking. I think it's a reminder, like the competitive dynamics of what's going to happen are still completely in flux in a good way. I think we're going to see more and more competition at the foundation model level. And I think this is just a reminder that like we just came off a couple of good weeks of Google I/O and OpenAI announcements and all these kinds of things. But the competition is going to be there and only increase. As long as those Nvidia earnings are so juicy, their margins are, what's the Jeff Bezos thing again? Oh, their margins are our opportunity, all of our opportunity. Yeah.

• 24:58Alex Kantrowitz?

  Yeah, that's right. So just to sum up this this segment. So I think we both agree that Nvidia still has a lot of room left to run in terms of being able to sell its chips and produce them. And there's no sign of slowing down. Like if you're thinking just about the hardware side of the AI trade, and of course Nvidia has software that you use to train the models. But like, thinking about the thing that makes them the most money, that's in good shape.

• 25:23Speaker 01

  It's in great shape. It's in incredible shape. That has not slowed down. And I know there's a lot of talk after DeepSeek that it would, but it hasn't yet. So. There will be more deep seeks and I think I I feel very confident in saying that.

• 25:39Alex Kantrowitz?

  Okay, let me ask you this, as deep seek continues to rise, is there going to be any value in building these proprietary models? Returning to one of our old questions.

• 25:48Speaker 01

  Yeah, that's a, I still believe that overall increased competition will see a commoditization at the model layer. I believe that the one model to rule them all, one giant model is going to wipe out 20% or 50% of white collar jobs. Like, I I just don't see that happening. So yeah, I I think the model layer will get commoditized. What about you?

• 26:16Alex Kantrowitz?

  Yes, for sure.

• 26:18Speaker 01

  So what you're saying is it's not the model, it's the product.

• 26:22Alex Kantrowitz?

  No, I think better, no, this there's nuance here. Better commoditized models will lead to better products. It's not about, it's it's so interesting. We have this debate all the time. Actually, I think we're just going to converge here. You want better models and better products. I guess the question is what drives the improvement in the AI industry? I think, yeah, even if the models are commoditized, then better models are going to matter more.

• 26:45Speaker 01

  What leads to the white collar bloodbath?

• 26:47Alex Kantrowitz?

  Yeah, exactly.

• 26:48Speaker 01

  Better models and better products.

• 26:49Alex Kantrowitz?

  It's coming. Okay. By the way, just one quick, no, I mean, Lord almighty, Meta, there was a story this week how Meta's lost lots of of its AI researchers as deep sea continues to surge. The conversation around Meta's llama models has certainly fallen off in a big way. And I, I mean, they've made some changes to their organization this week, minor ones, but I would watch that space very, very closely.

• 27:16Speaker 01

  Yeah, I think, I mean, yeah, where Metal still lives in this is, it's interesting because.

• 27:24Speaker 01

  They actually managed to be, maybe I have to support it, more product focused, it sounds like. They separate out the research conversation from the product conversation, which is kind of a reminder, there is, they're a pure consumer company. And they're able to separate the two. So Meta AI, Meta Ray Bans, all these things. You don't really see or hear as much hype around. I don't even know, what llama are we on now? I can tell you. Four? Okay. Yeah, like.

• 27:54Alex Kantrowitz?

  But don't we think that if their models were better, then people would be using their chatbots more? I mean, they have bet a lot on voice and their voice AI is just not as on par with.

• 28:05Speaker 01

  Meta AI is pretty good. Meta AI is pretty good. And I say that with a, like, it's a, I think it's on par.

• 28:13Alex Kantrowitz?

  You're the first person I've heard, I've heard say that, so.

• 28:16Speaker 01

  Really?

• 28:17Alex Kantrowitz?

  But maybe I'm not asking enough people.

• 28:19Speaker 01

  All right. Yeah, you're, you're not asking the meta crap. See, this is why, maybe they're going after the everyday consumer while we're talking to the, the people who actually use and stress test anthropic. Open AI.

• 28:33Alex Kantrowitz?

  That's true.

• 28:34Speaker 01

  Gemini.

• 28:35Alex Kantrowitz?

  Uh, yeah, it's, it's a great reminder for, for reporting on this stuff, it's important to look outside of New York and, and San Francisco.

• 28:43Speaker 01

  And to the people using Meta AI.

• 28:45Alex Kantrowitz?

  But I still think that the Meta AI is not as good. So.

• 28:49Speaker 01

  Okay.

• 28:49Alex Kantrowitz?

  Uh, all right. So we're going to talk a little bit about this very interesting grammarly story, but before that, let's just talk a little bit about this other area that Meta is going down, which is that they are going into, uh, defense tech with a very unusual alliance, shall we say? This is from the Wall Street Journal, Meta fired Palmer Lucky. Now they're teaming up on a defense contract with him. Meta Platforms had a messy split with its virtual reality chief Palmer Lucky. Now the two have reconnected to build high-tech headsets for the US Army. Lucky's defense company Androl and Meta said Thursday that they will together build a line of new rugged helmets, glasses, and other wearables that provide a virtual reality or augmented reality experience.

• 29:32Alex Kantrowitz?

  Kind of the details of these system is crazy here. I'm just going to read this. The system called Eagle Eye will carry sensors that enhance soldiers' hearing and vision, detecting drones flying miles away or sighting hidden targets, for instance. It will also let soldiers operate and interact with AI-powered weapon systems. Androl's autonomy software and Meta's AI models will underpin the devices. I think this is a very interesting story. It shows, of course, Silicon Valley getting like fully getting back and or getting into war technology in a way that you wouldn't see from like, say, Meta or Google years back. And this device itself is kind of interesting to me as well. What do you make of this partnership, Ron John?

• 30:12Speaker 01

  Well, first, is this the first mention of the term war goggles on this podcast ever?

• 30:17Alex Kantrowitz?

  This is our first. Well, we had Palmer Lucky on, so I have to check the transcript for the, you know, just to see that. We've definitely talked about defense tech, but this is

• 30:27Speaker 01

  War goggles are a whole another war goggles. It's a good term.

• 30:31Alex Kantrowitz?

  War goggles, baby.

• 30:32Speaker 01

  Yeah, war goggles. I like it. I like it. I mean, the question of, this is another one where Silicon Valley was founded on like defense technology. So much of our American innovation was founded on defense technology. And to me, I guess I, yeah, I don't have a hard time stomaching this. I think it's not a bad thing to have the technology industry close to the defense industry and companies like Androl and others are definitely, you know, defense first. So, yeah, I think I'm genuinely curious of like how crazy and cool this technology is. And I mean, I know it is for war, but yeah,

• 31:14Speaker 01

  I think innovations often has started in the defense sector. And if we're going back to that, it's not the worst thing.

• 31:22Alex Kantrowitz?

  Yeah. Who do you think made the first call? Palmer or Zuckerberg?

• 31:26Speaker 01

  That is the more important question, I think.

• 31:29Alex Kantrowitz?

  I have a feeling.

• 31:30Speaker 01

  What do you think?

• 31:32Alex Kantrowitz?

  I think it had to have been Zuckerberg. I think Palmer clearly did not like what happened to him at Facebook at the end there. And he wasn't gonna go pitch Zuckerberg on this idea. I think Zuckerberg saw that he had lost tens of billions on Reality Labs and sort of needed a new way to do it. He's also had this like sort of political rebirth Zuckerberg and is now someone who seems like he'd be open to this stuff more than he was previously. I have to say it was, I almost certainly believe that it was Zuckerberg who made the call. And Palmer gives him some edge or cool factor that he, he wouldn't have without Palmer. I think he needed Palmer more than Palmer needed him.

• 32:15Speaker 01

  Okay, I buy that. What?

• 32:19Alex Kantrowitz?

  Again.

• 32:20Speaker 01

  Oh, again, yeah, yeah. No, no, actually, that's, that's a good point. I think, actually, have we seen cool Zuckerberg in any kind of virality or memes recently? Has he not been posting less? I feel there was like a, a wave of time where he was just, you know, the handsome Mark Zuckerberg with a chain, singing with T-Pain, all these things were just like every week. Has that died down or?

• 32:44Alex Kantrowitz?

  I think that probably coincided with the ascent of Meta's Lama project. And after DeepSeek, we haven't seen anything like that or less, we've seen less of that. So I think he's feeling himself less these days than he was before.

• 32:58Speaker 01

  Okay, okay. Well, either way, I, I will agree with your who called who theory. I think Zuck had to call Palmer.

• 33:08Alex Kantrowitz?

  Okay, so I definitely want to get to this grammarly story that you mentioned. So let's talk about that. We might have time to talk about Elon Musk leaving the Trump administration. And we definitely want to get to this story about CEOs using their avatars to deliver their earnings reports. So let's do that right after this. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what Avpoint does. For 25 years, they've been the trusted layer beneath the world's most demanding data,

• 33:53Alex Kantrowitz?

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• 35:27Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday Edition, breaking down the week's news. So many fascinating stories to talk about this week. And one that popped into our document just as we started to record, courtesy of Mr. Rajan Roy, is a new, interesting story about Grammarly's funding and a new funding model. Very interesting. Rajan, why don't you lead us, lead that story for us?

• 35:50Speaker 01

  Okay, so I see the headline, Grammarly has raised $1 billion, which is still surprising, but not, not like inconceivable in the current market. They definitely have been positioning themselves as more AI. But then the more you read about it, I realized all this talk about AI and technology, we're forgetting about America's greatest innovation, financial engineering. Because this story was, I did not know this model existed. So Grammarly did not raise $1 billion in the traditional sense we all talk about of equity. They secured

• 36:29Speaker 01

  a $1 billion commitment from General Catalyst's Customer Value Fund, CVF. The way this money works is it's non-dilutive, it's not equity, it does not affect the cap table at all. And basically, they are allowed to now use this $1 billion to spend on customer acquisition, on sales and marketing. And then any revenue they generate from the money that they put in from this, this pot of money, the return goes back to General Catalyst up to a certain point. And those details weren't leaked. But again, it's basically a loan for your marketing budget, which any online business, the customer acquisition cost or CAC, and

• 37:11Speaker 01

  then payback periods, these are the things everyone talks about all the time. And if you have a relatively predictable model like that, it's so fascinating to me. And it actually like is one of those that I think will catch on. Because the more businesses have like very predictable cash flow models like this, or acquisition models and payback models, it makes sense that we want to scale our revenue dramatically. Rather than diluting our cap table more, we'll take money in from General Catalyst. What's interesting, though, is apparently the they do not have to pay general, Grammarly does not have to pay back the money if it does not see the return. So it's quite a

• 37:53Speaker 01

  bet, but it's capped up to, in previous examples, Lemonade, the insurance company, they had public filings on this, that they had received similar money and it was that they were able to pay up to 1.4X the initial investment, so a 40% return.

• 38:14Alex Kantrowitz?

  That's fascinating.

• 38:15Speaker 01

  Yeah, basically, funding is changing. This is like, I've never seen this before. I really think this kind of funding model could be used at so many different companies. And it just made me remember America's greatest innovation. For all the large language model stuff, this is where we're the best.

• 38:36Alex Kantrowitz?

  So do you think Grammarly has their marketing operation so dialed in that they could legitimately go $1 spent, $1.40 made, and put a billion dollars in to increase? I mean, it's, the TAM is, like, must be crazy. How many people need AI tools to correct their grammar?

• 38:54Speaker 01

  Well, so they've definitely evolved into more general AI, I believe. I'm sure they're going to be like, kind of like, moving more into overall just AI solutions for companies. Like, I mean, you're not taking in that kind of money, which is riskier because it's a less predictable revenue stream. But in terms of do they have a predictable model for this? They've been around for 14 years. I, the amount of like, upsell, and if you've ever installed it and didn't pay for it, the number of emails you get from them, and they're very good at that entire lifecycle marketing. So I think for the traditional product, they probably

• 39:38Speaker 01

  have a really, really good model. I think whatever direction they're going to try to move in this new AI world, it's going to be interesting. But to me, again, they don't have to pay it back, so that's up to general catalyst if it doesn't work.

• 39:54Alex Kantrowitz?

  Yeah, I think it's a very risky bet. And here's my hot take on Grammarly. I think they're gonna go extinct. I think I wouldn't call them a rapper because they were around before large language models. But all this logic that they painstakingly built into their program and all the AI development that they did. You could legitimately just drop an article into ChatGPT and ask it for grammar and usage. And spelling checks and it does a marvelous job. I am no longer using Grammarly. I'm just using ChatGPT for this and it's even better than Grammarly was.

• 40:30Speaker 01

  Yeah, well, I completely agree with that. So apart from the fascinating element to the financing. I do agree that a grammar checker, I don't see how that remains, how it still works. But again, they, I'm sure they're expanding into new like content generation efforts and stuff. If you have it plugged in, if it's already evaluated your writing. I would hope that there's, there's other areas on productivity, but it's a risky one. But I'm glad to see some, some activity in the whole financing space. Innovation, not even activity.

• 41:06Alex Kantrowitz?

  Man, well, they're 14 years old, but they're gonna raise a billion. I don't know. Don't you think at a certain point you gotta figure it out?

• 41:14Speaker 01

  They were valued at $13 billion in 2021. Off of a $300 million raise or $200 million, they had some insane multiple. So to their credit, they, they stick around. They, they got the COVID bump. Things came off a bit. Now they're doing this. So this is a company, it's like a, it's a financial vehicle disguised as a grammar checking tool. My favorite kind of thing.

• 41:42Alex Kantrowitz?

  That is your favorite company. Absolutely. All right, let's do a couple of minutes about Elon leaving the Trump administration. His time to be a special government employee is coming to an end. That's 130 days. He's leaving. He's gonna focus more on his businesses. He wrote the Doge mission will only strengthen over time as it becomes a way of life throughout government. But he also said that the spending bill making its way through Congress undermines the work that Doge is doing. Since it's adding, I think. Well, it's adding billions, at least billions to the deficit, or trillions even. The New York Post writes, so gonna go to a conservative outlet to sort of touch on this. How did the New York Post cover this?

• 42:25Alex Kantrowitz?

  With a story that Tesla shareholders are demanding Elon Musk work 40 hours per week amid a crisis. And they sent a letter to the Tesla board chair saying that the board must require Musk to spend a minimum of 40 hours per week at the company and adopt new governance policies that would limit directors' external commitments. They also called for a formal CEO succession plan. I guess, look, it's indisputable that Elon Musk's time in the government did not really end up being a good thing for his companies. So Ranjan, I guess the question for you is twofold. One, did it work inside the government? Did Doge work in any capacity?

• 43:09Alex Kantrowitz?

  And two, can he now reverse the damage he's done to the companies?

• 43:14Speaker 01

  On number one, I think I have to imagine most people are in agreement that it did not work. To me, the more fascinating part is how just anticlimactic the exit was. Like, I mean, if just if we go back to the days of February and March, I mean, the level of intensity and energy around the Doge conversation, and then it just kind of fizzled away, doing a lot of damage along the way. But, you know, like, certainly in terms of the savings that were promised, the trillions, none of that happened. I think the interesting question is what happens now to the Teslas of the world and

• 43:59Speaker 01

  SpaceX and stuff? I think I don't see the brand and reputational damage you can't just undo, especially with Tesla being a, like, if it was a more progressive brand before, the typical owner at least was more progressive and environmentally focused. I don't see how you get that back. If they're to just kind of actually launch some just wildly industry-leading products, I think that's interesting. But I don't know, I think there's long-term damage that's going to be tough to undo. What about you?

• 44:34Alex Kantrowitz?

  Yeah, I definitely think there's going to be long-term damage at the companies and but we'll see. I think that we tend, people tend to be quickly forgiving. I don't know, not always when it comes to a business leader entering politics in this way. But to me, I think one of the interesting things is the way that this did come to an end. It was a fizzle, not a breakup with Trump, if you know what I'm saying. Like, a lot of people expected this to blow up, but Musk has also said that he plans to keep his small office at the White House. Trump said he's going to be involved. So I think that the thing that really did Musk's effort in was politics. Like, it turns out that politics is political.

• 45:16Alex Kantrowitz?

  And there's a, you know, when you're trying to change a system, the way that he tried to change it, there are certain people you have to win favor with. And he ended up sort of sparring with a lot of cabinet secretaries in a way that sort of ended up dooming the initiative. Now, we're going to have Bill Vasson, who's the CTO of Booz Allen in a couple of weeks, and he's going to talk a little bit about the way that these Doge priorities live on in terms of getting the government to use technology to be more efficient. But ultimately, the Doge era, Elon's Doge era, fell far short of the goals that even he set. And I think that is just the bow you tie on it.

• 45:57Speaker 01

  The bow you tie on it, I think. That's the best interpretation of this.

• 46:02Alex Kantrowitz?

  All right, let's close this week with a discussion of CEOs sending their AI avatars to deliver their earnings report. So Sebastian Shimiakowski, who's been on the show, the CEO of Klarna, he, this is from TechCrunch, he's leaning all the way into the idea that his buy-now-pay-later IPO-bound startup is an AI company. When Klarna delivered updated quarterly earnings on Monday, it was his AI avatar that presented the highlights, according to the company's YouTube video. And then after him, Zoom CEO Eric Wan, he followed suit, using his avatar for initial comments. He deployed his custom avatar via Zoom Clips, the company's asynchronous video creation tool. He says, "I am proud to be among the

• 46:47Alex Kantrowitz?

  first CEOs to use an AI avatar in earnings calls," he said, or rather, his avatar said, "it's just one example of how Zoom is pushing the boundaries of communication and collaboration." Is this like just a sign that all business communication is sort of worthless? And most of it is sort of worthless and we're just going to end up having people send their avatars to meetings instead of themselves?

• 47:12Speaker 01

  Well, okay, I think three things. One, I think I got to respect Klarna's CEO more because he just did it even. And it obviously helps with the overall AI branding a bit, but it's not like product related. Where Zoom tried to make it more of a product demo, saying that we're using Zoom clips to actually make this. It's just one example of how Zoom is pushing the boundaries of communication and collaboration. So that was a little bit too salesy and promo-y. I think that your point that does this show that business communication, a lot of it, was pointless anyways? I think yes.

• 47:51Speaker 01

  To me, earnings calls, the CEO reading out the scripted part never made sense to me. Just send out the scripts and take the extra 15 minutes for the questions. That's the only important part. So this actually, I actually kind of love it because it shows the uselessness of the CEO ever actually delivering those remarks. So I think I'm, I'm, I'm not pro avatar. I'm pro make business communication worthwhile for everyone and don't waste our time.

• 48:23Alex Kantrowitz?

  I mean, did you see some of those VO news clips? Like what else could you AI avatarize? Like, is it going to be news anchors? I mean, if it can be a CEO reading the earnings report, can it just be news anchors as well? Like, where does this end?

• 48:38Speaker 01

  No, but to me scripted language maybe does not need to be. Yeah, no, no, but it does not need to be video necessarily. The earnings calls are the perfect example. News reports as well. Maybe if it's a scripted news report and not an actual interview or conversation or kind of like genuinely valuable piece of information that has like emotion tied to it, then it, to me, it's more if you can do that with an avatar, maybe it did not need to be done in the first place. I think the same thing with like generative AI overall. I think we're going to find a lot of written communication that starts to get be, you know, generated by AI.

• 49:21Speaker 01

  In reality, the discovery will be we didn't actually need that communication.

• 49:25Alex Kantrowitz?

  Yeah, a lot of this was kind of like proof of work, right? It's like you write a recommendation letter. Who cares what the recommendation letter says? You took the time to write it. And that's what AI sort of minimizes now is that it's just like, okay, well, here's a letter of recommendation. It took me one second to prompt on ChatGPT, and I may or may not care about this person. Or, you know, here's an update to the company, like a CEO's weekly update to the company, delivered by its VR, their VR avatar. This is the world we're moving toward.

• 49:54Speaker 01

  Wait, wait. So that is such a good point, that like, a recommendation letter was less about the letter and more, as you said, this person took 30 to minutes to an hour to invest in this person's future. CEO's communication to the company was about them connecting personally with their company rather than like, the actual words being said. It's a lot more than the actual content. And, and if we lose those things, then maybe very quickly, we realize a lot of that stuff was wasting all of our time anyway. So, so apparently, this is the most optimistic Friday I've had in a long time. There's no white collar bloodbath. Communications

• 50:35Speaker 01

  will improve. Financial innovation is alive and well in America. It's gonna be a good weekend.

• 50:42Alex Kantrowitz?

  I was gonna say, if the CEO no longer reads the earnings calls, then what does the rest of the white collar workforce get rid of? And then you do eventually lead to an entry level bloodbath. Maybe Dario was right in the end. See, we can both twist that exactly the way we want to. So, this is the beauty of media.

• 51:03Speaker 01

  Beauty of media.

• 51:04Alex Kantrowitz?

  All right, Ron, John, thanks so much for joining. Great to see you as always.

• 51:07Speaker 01

  Good to see you next week.

• 51:09Alex Kantrowitz?

  Thank you, everybody, for listening. If everything goes according to plan, we're gonna have Anthony Scaramucci on the show next Wednesday. And why don't we have a classic hit play us out, the famous and much beloved Hype or True theme song. Thank you, everybody. Have a good one, and we'll see you next time on Big Technology Podcast.

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