The Cage Match That Wasn’t, Trouble At Goldman Sachs, Social Algorithms Reality Check

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) How the Zuck v. Musk cage match fell apart. 2) Whether Musk's antics are actually a problem for his business. 3) Why Walter Isaacson writes so positively about his subjects 4) Why Goldman Sachs is running into trouble 5) The issues Goldman is finding with its Apple partnership 6) Ranjan's observations from his trip to Taiwan 7) A bunch of new studies cast new light on social media algorithms 8) Cruise car stuck in the concrete 9) Why you should be able to pick your own 'flavor' of algorithm on social media. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ 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?

  All that cage match buildup and nothing to show for it. Goldman Sachs is in a rut, just as its partnership with Apple is taking off. And have we been overplaying the impact of social media algorithms all this time? All that and more coming up right after this. This episode is brought to you by Genesis. What does it actually take to put agentic 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. 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.

• 0:45Alex Kantrowitz?

  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 Razor were able to cut their inference cost by 15 times. Visit akash.network slash Alex for a free consultation. That's akash.network slash Alex for a free consultation.

• 1:17Alex 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 number of very interesting stories that we plan to go deep on this week. And we're so glad you're here with us. Speaking of which, returning from his vacation here with us today is Ron John Roy. Ron John, welcome back.

• 1:35Speaker 01

  It is great to be back. I'm excited to talk, let's get to the cage match soon because I have been waiting probably three weeks to talk about this.

• 1:45Alex Kantrowitz?

  So, fresh off the plane from Taiwan, he wants to talk about the cage match. We're going to talk about your reflections on Taiwan at the very end of this show. But first, let's talk about the cage match. So it turns out that this thing is now likely not going to happen at all. Elon Musk has been playing some games. Zuck basically said he's not serious and is now saying, I'm going to move on. Ron John, you said you've been wanting to speak about this for a while. I think most people are talked out on the cage match. Why are you still eager to discuss it?

• 2:16Speaker 01

  I am eager to discuss it because if you remember and if listeners remember, over the last few months, every time we do bring it up, I definitely have to shake my head and say, I don't want to talk about it. We shouldn't be talking about it. The reason I'm now ready to talk about it is we are all getting to see another beautiful cycle of Elon Musk. Everyone is a part of it now. Mark Zuckerberg is a part of it. Walter Isaacson, which we'll get to in his new book, is a part of it. This whole idea of, and we've talked about it a lot, you know, is Elon Musk is trying to take, test out different messaging and then run with the ones that he knows will stick. And clearly, everyone got hyped up around this cage match.

• 2:59Speaker 01

  But I think what we're starting to see is him releasing private messages, text messages with Mark Zuckerberg, Walter Isaacson sharing them, then Elon Musk tweeting about, you know, self-driving, leading a self-driving horde of cars to Mark Zuckerberg's front door. I mean, we are definitely, we've escalated and moved past the point of fun to discomfort, I think, for everyone. And that's actually my favorite part to watch of this whole cycle because I, this is always where it ends. This is always where it ends.

• 3:30Alex Kantrowitz?

  Well, not always because, and this is kind of what I always think about with these Musk cycles we've gone through over the past couple of years is that, you know, yes, like he's outlandish and has these wild ideas and doesn't follow through on a lot of things, but he's still running SpaceX and Tesla and doing a pretty good job with those companies. And maybe he has some others on the way, Neuralink. And, you know, there was this article in the New York Times about how like, oh, it's such a big problem that Elon Musk runs Starlink because now the Ukrainians can only rely on him. And it's like, if he didn't build Starlink, the Ukrainians wouldn't have this service. So what are we complaining about here? So I always wonder with these type of situations, is it, is it, is this part of this, this whole personality part of what enabled Elon to sort of press the limits and think about things

• 4:15Alex Kantrowitz?

  that he wouldn't, that, that most entrepreneurs or, and governments for that matter, wouldn't otherwise? And B, like the second side of this is, is some of the things that we're seeing with him and Twitter, the same stuff that got him to where he is? Or is it sort of that, that inflection point of like, oh God, now Elon might be in trouble? What do you think?

• 4:34Speaker 01

  No, I, I think it is exactly the same type of thing that got him to where it is because... This, this cage match saga, to me, has always essentially been capital raising arbitrage for Elon Musk. It's, he has been able to build.

• 4:49Alex Kantrowitz?

  Explain that, yeah.

• 4:49Speaker 01

  Okay, he has been able to build these businesses. Think about Tesla. Its growth trajectory, it becoming at one point, you know, a trillion dollar company, him becoming at times the world's richest man, are all like able to be done because of the narrative he has created around himself and the attention he commands. And I think that was his biggest insight, is understanding that the more attention he's able to bring to himself and the more he can kind of just command the entire state of conversation in the world, that's what allows him to raise the money that he needs or run Tesla in the way he wants to run it or build a new factory and make

• 5:29Alex Kantrowitz?

  Interesting.

• 5:30Speaker 01

  heads of state want to work with him and give him all the incentives and subsidies possible. Again, like every head of state fawning over bringing Tesla to their country and bragging about when

• 5:42Alex Kantrowitz?

  Right.

• 5:43Speaker 01

  it does appear. That's all because of his cult of personality.

• 5:46Alex Kantrowitz?

  And how is this cage match going to pay off for him then?

• 5:49Speaker 01

  Oh, I think, okay, where this all ends up, I'm not trying to predict just yet. But I think in terms of, other than there won't be a cage match,

• 5:59Alex Kantrowitz?

  Right.

• 6:00Speaker 01

  I think, but he's had so many of these moments. I think this is just, you know, his profile only continues to grow, but this is the way he's been acting ever since. Again, for me, and I've written about this many times, I was a big Elon Musk fanboy in the early days of, or call it the middle days of Tesla in the early 2010s. It was really the 420 tweet back, it was at 2018, when he said he was going to take Tesla private and starting to see just how reckless a lot of the behavior was. And it was. And again, think about that. Again, like tweeting that he's going to take the company private. Getting a slap on the hand from the SEC and then bringing more attention to self

• 6:43Speaker 01

  and then turning Tesla into a trillion dollar company based on just insane stock valuations. Like, he has been able to do all of that over and over again. So the cage match, it's a bet for him, I'm sure, that maybe I'll get away with it again.

• 6:59Alex Kantrowitz?

  Okay, but here's the question then. If this is the same behavior that's enabled him to build, which I think, what I think most people would agree are pretty impressive companies, then what's the problem? He's just doing it again.

• 7:09Speaker 01

  Oh, because it's going to run out at some point. At some point, this runs out.

• 7:12Alex Kantrowitz?

  Come on. This is five years running since the 420 tweet and Tesla's building more cars than ever before. SpaceX has been able to like, basically own low earth orbit and get those Starlink satellites in. So with this, and I'm just kind of talking it out with you, right? I want to sort of understand, but with all this attention, he's actually been able to use that for good. So it's sort of like, is this really a problem?

• 7:38Speaker 01

  No, I think we're going to see, again, the idea of like, the narrative SpaceX-Tesla shooting rockets to Mars and electrifying the entire motor vehicle industry. That shine, already you're starting to see cracks. I remember I was reading, I think it was Felix Salmon had a piece recently around a lot of the new data and narratives that are coming out around. Was Tesla, or has it been overall a net positive for electrification of the automotive industry? We take that as an unadulterated truth, right? Like, everyone's like, yeah, Tesla, without it, nothing happens.

• 8:19Speaker 01

  But could hybrids have been a better way to approach this? Could smaller vehicles and making range the central part of the entire discussion has distracted us and potentially made us build batteries that aren't the optimal way? And build transportation infrastructure that isn't the optimal one? So I think there's going to be a lot more questioning of that narrative, because it's that narrative and that unquestioning acceptance of it that has allowed him to build these companies in that way. And I think, I mean, I don't want to call the turning point ever with Elon Musk, because you never know. But again, the cage match, I think, is exposing that kind of behavior to more and more people in more and more ways.

• 9:02Alex Kantrowitz?

  Well, I think we'll just have to wait and see on this one. I mean, I think that Elon, this entire chapter has not been, let's say, impressive, but if it's gonna take the same path that it's taken with Tesla and SpaceX, and he's just gonna command more capital to build more companies, actually, you know, he's figured out the system well.

• 9:22Speaker 01

  Oh, he has. Over the last four to five years, he figured out the system better than anyone else. I definitely agree with that.

• 9:31Alex Kantrowitz?

  And the person who's gonna, speaking of figure out the system, right, the person who's going to go and write a biography of him is Walter, none other than Walter Isaacson, he of the Steve Jobs biography. And it has been interesting watching Walter Isaacson, who's this like luminary author, go out and speak about Elon during this entire process, because he's almost become, he has become Elon's de facto PR person. Elon doesn't, you know, have a lot of, or any public relations officials, pretty much. I mean, there are, there is one guy at Twitter who keeps emailing out the stuff from Linda Iaccarino. So I'm thinking like, okay, maybe PR and function, if not in name. But Elon doesn't really use PR people, but Walter Isaacson has effectively been functioning as that person. And he did

• 10:16Alex Kantrowitz?

  tweet out the private messages between Musk and Zuckerberg about the fight and in a way that served Musk's interests. There was some debate about that, right, where people were like, well, he should not have, you know, tweeted those or shared those texts. And I'm like, come on, you're not, you're a reporter. You share the text with like the appropriate context. But just the total tone of Isaacson towards Musk has been that of, as publicist, and this book that he has, that's gonna come out about Elon, which is coming out in about a month, might put his, I mean, it might put his credibility on the line.

• 10:50Speaker 01

  Yeah, I think, I really am curious how his, how this plays out for Walter Isaacson's legacy as a venerated biographer, like, I mean,

• 11:02Speaker 01

  The idea that, again, 30 days must feel like an eternity for Walter Isaacson right now, because what will Elon Musk do within those 30 days? And what could that mean for when that book comes out and it's glowing and it's praising and it's saying that this is... And again, if anyone who's read the biographies of Steve Jobs or Leonardo da Vinci, which are excellent, they, again, they paint a very, very clear picture of people who are changing the world for good. It might be a little complex, but overall, as you said, it's not quite fawning, but it's certainly complimentary, let's say. And what Elon Musk does before that, I'm very curious to see.

• 11:45Speaker 01

  But then also, as you said, again, for listeners, Walter Isaacson tweeted the text messages between Elon Musk and Mark Zuckerberg, where he's talking about, you know, let's have a cage match practice at your house or something, or I don't know exactly which ones they were. But he is putting mixing himself in this, whether he wants to or not. So to me, I don't think there's any kind of like journalistic duty to tweet the text messages. I think he's doing that, as you said, more on the publicist's side.

• 12:13Alex Kantrowitz?

  I don't know, like, would you prefer reporters who had texts between Zuckerberg and Musk or powerful people in the tech industry, keep those close to the vest as opposed to share them to the public? I mean, I know if I got ahold of those text messages, I'm tweeting those immediately.

• 12:26Speaker 01

  Wait, but that's any source, right? That's someone feeds you some bit of information, why are they doing it? And should I share it or should I not?

• 12:37Alex Kantrowitz?

  So it's the context around it.

• 12:38Speaker 01

  Yeah, it's the context. And clearly Elon Musk is doing that to jab Mark Zuckerberg and using Walter Isaacson as his vessel to jab Mark Zuckerberg. So I think he has to be more cognizant of that. He spent however many hours and days and months with Elon Musk. He's got to know him a little better than that.

• 12:57Alex Kantrowitz?

  I don't know. I would definitely be sharing those messages. And maybe with the context, like, all right, this is what is going on here. But it is interesting, we talk a little bit about, like, you know, is Isaacson going to write this book that makes people, you know, that's effusive about Musk? And it's like... Well, what do people want to read in some ways, right? Like, is a book that's balanced or a book that's like a total hagiography of Elon Musk gonna sell better and gonna be appreciated by the public more? And it almost seems as if the public would rather read a book that's almost entirely positive about a business hero. Like, you know, however much criticism we have of the media, like, actually, readers, they kind of want to read the book that like, ah, this person, you know, faced tough circumstances

• 13:42Alex Kantrowitz?

  and look at what all the good they did in the world. You know, it's one of the categories of books that you want to write is, you know, you want to have something that's aspirational to the reader that's going to make them part with the 30 bucks.

• 13:52Speaker 01

  Yeah.

• 13:52Alex Kantrowitz?

  So I'm curious what you think about that.

• 13:54Speaker 01

  That's exactly, and is Walter Isaacson functioning as a journalist here or a biographer who's trying to sell books? And clearly, it'll be the latter. And yeah.

• 14:04Alex Kantrowitz?

  You could be both, but you know.

• 14:05Speaker 01

  Exactly, exactly. You could be both, and I think a lot of people are. But again, to write the bestsellers that are remembered, I mean, maybe that is the way, that is, I agree, that's what people want to read.

• 14:18Alex Kantrowitz?

  And it's kind of interesting to be discussing this in the same week that Michael Lewis's great book called, or great, in retrospect, who knows, book called The Blind Side, which is about, you know, a boy who was adopted and went on to play football and the adopted family like raised him and it was this very sentimental, beautiful story. And he went on to play for the Baltimore Ravens. And now he's come out and said like, you know, they took him out of tough circumstances and the family now has tried to claim undue control over his finances and awards from the story due to a conservatorship versus adoption. And it's like this Michael Lewis story, this beautiful thread that he's, he's put together is starting to unravel.

• 15:05Alex Kantrowitz?

  And it just goes to show you, it's like, it's one of those things where I like, I do wonder if Michael Lewis actually, and many authors, just, you know, did he actually want to find the real story or was he content telling the story that was, you know, almost, I think they call it in the business, too good to check? It's very interesting.

• 15:22Speaker 01

  Yeah, I think it's tough because. That's where kind of like the things that border between fiction and nonfictional narrative. It's tough because like the blinds and I say this, I'm a huge fan of Michael Lewis and I really hope like more of this does not come to light. And it was a troubling one because again, the the football player, Michael O'Hara, I believe.

• 15:48Alex Kantrowitz?

  Michael O'Hara, yeah.

• 15:50Speaker 01

  Or yeah, he, I mean, and it's kind of sad too. Again, he came out and has said the family tried to control his finances, but also that the movie and his portrayal while he was in the NFL actually negatively impacted him because it, you know, portrayed him.

• 16:07Alex Kantrowitz?

  And exaggerated.

• 16:08Speaker 01

  It exaggerated his like mental capacities. And of course, on the football field, that'll be something that's held against you. And that's, it's kind of like, like sad that, and I loved the movie, I loved the book. But remembering that it was happening while he is alive and while he's playing.

• 16:27Alex Kantrowitz?

  I know.

• 16:28Speaker 01

  And yeah, and it's a beautiful story, but a lot of the times the story is it's.

• 16:34Alex Kantrowitz?

  Yeah, go ahead.

• 16:35Speaker 01

  It's too, too good to check.

• 16:37Alex Kantrowitz?

  He came into the NFL and there were players that were wondering whether he could read the playbook because of the way that this movie portrayed him as this like, you know, guy who'd been just sort of, I mean, he's like, remember like I was an All American before I came into the NFL, but because of this, the way that this story was told, and again, I think that there's a commercial aspect to it, you know, that's how it impacted his real life. So.

• 17:02Speaker 01

  However, the one, one thing I can say again, liar's poker, having worked on a trading floor for eight years, not during that time in the eighties with Solomon Brothers, is, feels and is as real as it can get about, about capturing an industry and an environment.

• 17:21Alex Kantrowitz?

  Yeah, look, we're not going to come on here and say that Michael Lewis and Walter Isaacson are, you know, amateurs, like they obviously have skill and talent, but it is kind of interesting in terms of the commercialization and the way that these things are shaped, you know, the directions that the work go. And part of that's writer, part of that story, but part of that is also audience, which doesn't get talked about very often.

• 17:42Speaker 01

  Yeah, but yeah, sorry. One thing on that, though, I think is interesting is it's also a reminder, and again, the positive side of whether it's social media, whether it's just more people have a voice right now is in the past, it's very likely that, you know, the, that book is written, and then Michael Oher's narrative never really makes it out into the world. Obviously, his was not from like a viral tweet or anything like that, but you do feel there is more accountability in general around these kind of things versus in the past. And I think that's a good thing.

• 18:17Alex Kantrowitz?

  Yeah, I agree. And a lot of it happens on podcasts. I mean, I was watching or on a podcast. So we're doing good for the world, Ron John, is what I'm trying to say.

• 18:25Speaker 01

  We're doing good for the world.

• 18:27Alex Kantrowitz?

  There's, speaking of doing good for the world, Goldman Sachs, no, I'm just kidding. But, you know, they're an interesting institution. And in the run up to this week's show, they have a very interesting partnership with Apple. They've really been trying to make ways into the consumer world. And in the run up to this show, you dropped like a few links in our, we have this collaborative doc that we like trying to drop stories in through the week to talk about them on this show. And you had dropped like a couple Goldman links. And I was like, I don't know, it's a little far afield. They do have that Apple partnership. But as I got deeper into the story, I was like, oh, yeah, this is definitely, you know, something that we need to talk about on the podcast. So not only is their partnership with Apple starting

• 19:10Alex Kantrowitz?

  in a struggle, but their CEO, David Solomon, has, has really come under fire inside the company. And it is kind of interesting as to like, why the folks at Goldman don't like him. It's not necessarily performance, but it's more just like his work on their reputation. I'm just going to tee you up here, Ron John. What about the Goldman news? And, you know, do you find interesting? And how do you think we should view its push into the consumer world, given that its program with Apple is so important, yet they've lost a lot of money there?

• 19:46Speaker 01

  Yeah, so, okay, so to step back, remembering why and when Goldman Sachs got into consumer banking, I think is important here because in 2016, they launched Marcus, which is named after the founder, Marcus Goldman. And this was like the first really consumer-facing product. This is the idea that Goldman Sachs before, only for the ultra-wealthy and exclusive, and only for, you know, Wall Street firms and banking and trading, suddenly is going to try to appeal to at least some larger portion of the entire, like, consumer industry.

• 20:24Speaker 01

  And it was, it was at a time, again, remember, fintech is probably like the promise of fintech mid 2010s is it's going to change everything. It's going to be like in a revolutionary business. Banking will change, so consumer banking will change. It's a wide-open market, so they should get into it. And even from like a standpoint of recruiting engineering talent to have these kind of like really digital first offerings, it was part of it. This is when they were losing lots and lots of talent to investment, oh, sorry, to big tech companies and wanting to make themselves appear more, to be more technology-forward. So there were so many different elements.

• 21:05Speaker 01

  Then you throw in the, the Apple card, which I'm assuming the discussions would have started around that time as well.

• 21:13Speaker 01

  You know, like having such a public-facing partnership, having your logo imprinted on a credit card that's going to be in the wallet of probably a pretty good consumer profile for you, again, still tech-forward, like, probably good credit or reasonable credit. So, so that's like, and it started under Lloyd Blankfein. Then David Solomon comes in and makes it really one of his kind of marquee strategic efforts. And he's like, we are going to, consumer is going to be an area of growth. And, sorry, and then another area, I'd forgotten, is this is also when, because of post-financial crisis regulatory reasons,

• 21:51Speaker 01

  Banking, especially trading within an investment bank, starts to feel like it might become a little more restrained in terms of profit potential. So, so where do you find growth? It's going to be in consumer and kind of digital forward consumer offerings. So all this is happening and basically like a lot, I think it's interesting how it reflects the lost promise of a lot of other fintech offerings and companies and unicorns. It's similar, they, they, the same growing pains, the same inability to actually realize whatever potential was sold in the mid 2010s. Then you have from like a pure loan book standing, they've been losing a ton of money

• 22:34Speaker 01

  on the loans that they actually underwrote on the consumer side and the credit that they issued. So all of this is happening, but why this story gets even better is you have David Solomon, you know, as the face of this push that he is the one. And for those unfamiliar, David Solomon has a DJ name, D Soul. He's, he flies around, he DJs, I think at the Chainsmokers concert during COVID was one of the, one of, one of the big and most controversial ones, but he has, he's created this persona for him in front of everyone totally publicly. And it's been okay, but it's one of those that when it's working, that's good for you.

• 23:18Speaker 01

  The moment any kind of hiccup comes around, you can imagine everyone is going to be coming for you. And that's what we started to see. There was an insane profile in New York Magazine, I recommend everyone reads. It's like, it's a long one, but it's so good. And you can see it happening that all these kinds of intersecting trends are coming together right now. Again, like the lost promise of fintech, people who are executives who over the last few years might've kind of gone a little too far on the personal branding and promotion and being the cool guy side. And now it needing to be just getting back to business. So I think this, this is one definitely to watch.

• 24:01Alex Kantrowitz?

  Right. So just going over the story. So they basically needed to get into consumer stuff because profits on investment banking side might not have been what they would have been pre-regulation. And they also saw an opportunity with fintech, like thinking about like, maybe like a SoFi as a competition. So that's why they decided to expand into consumer.

• 24:24Speaker 01

  Yeah, exactly. Things SoFi, Betterment, Wealthfront, that's one entire area. So imagine-

• 24:30Alex Kantrowitz?

  But why did they need that, though? That's the thing. Like, they are like this prestigious investment bank. They have all the big clients. They probably could still make a ton of money. Like, even the stories talk about how like Goldman can make money when it needs to make money.

• 24:43Speaker 01

  No, but-

• 24:44Alex Kantrowitz?

  So what, what is the purpose of-

• 24:46Speaker 01

  Why does a luxury fashion house ever have like a more mass market sub brand, right?

• 24:52Alex Kantrowitz?

  Right, that's true. But it's not working out for them, though. So what do you think? What do you think has been the cause for them? I mean, they've lost a billion dollars on the Apple Card alone.

• 25:01Speaker 01

  Yeah, no, no. Again, I think it's not working out. But, but if you go back to 2016, I think, or probably 2014, when you can imagine they would have been pitching this strategically internally. Oh, this would have been the greatest pitch deck in the world for a senior executive who wants to kind of move their way up and impress people. And then David, even Lloyd Blankfein at the time, and then David Solomon, like this, it's a dream pitch, right? It just doesn't quite work out. And then you throw in the personal side of jet setting around and DJing with the chain smokers.

• 25:36Alex Kantrowitz?

  It's not only the DJing. He's just a jerk internally, according to this profile. I mean, there was this one line that I pulled out where he didn't like what was happening with, you know, some of his employees. And he goes, I can't wait for the markets to turn so I can start firing you. And it's like, yeah, I guess that's the personality of finance in some ways, not all finance houses, but Goldman in particular seems like one where that's tolerated.

• 26:01Alex Kantrowitz?

  And yeah, I guess there's, there's blowback. So, so do you think that the things that have caused the blowback have been that like fintech is harder than they expected? And then the market did turn?

• 26:11Speaker 01

  Yeah, I think it's exactly those two things. Fintech is harder than expected and the market turned. And I think, and actually on the subject of he's just kind of a jerk, I kind of, I kind of smiled when I was reading a lot of the, the kind of over the top comments made by him or things that are being attributed to him about being a bit abrasive, let's say, is because, I mean, this is investment banking, this is Wall Street, this is like,

• 26:39Alex Kantrowitz?

  That's just the culture.

• 26:41Speaker 01

  That stuff feels, it's been, you know, over a decade that I have not been directly working in it, but like, I mean, that stuff seems pretty tame or peaceful compared to a lot of things you would see, but, but it's a reminder.

• 26:56Alex Kantrowitz?

  Wait, what did you see? Are you able to talk about it?

• 26:59Speaker 01

  Oh, no, I mean, just being berated in front of people and yelled at or.

• 27:04Alex Kantrowitz?

  That happened to you?

• 27:05Speaker 01

  Oh, yeah, yeah. That's, that's easy. Yeah. In front of the whole floor, people, your boss screaming at you, you're, then those are the bad ones. There's good ones too. So I, one of my bosses really loved them and still talk to them regularly now. But that stuff, it's pretty, it was, it was honestly very normal and in a weird way, like, to talk about, and again, 2023 trading floor culture, I imagine it's a bit difficult, different now. But, but I think on that side, but, but again, and David Solomon is kind of like falling into the trap of being allowed to be an asshole for a bit. You're allowed to until you stop performing.

• 27:46Alex Kantrowitz?

  Right.

• 27:46Speaker 01

  And then the knives come out and you can see.

• 27:48Alex Kantrowitz?

  But it's not like being a nice guy would, you know.

• 27:51Speaker 01

  Would have saved him on this one anyways.

• 27:53Alex Kantrowitz?

  Obviously, just the numbers. But the interesting thing is, I mean, I think it's worth talking about this Apple card in particular. So I'm curious why you think they've lost so much money on it. I mean, more than a billion dollars. And then there was another like really interesting. Part of the story where they talk about like,

• 28:10Alex Kantrowitz?

  who their customers are now. So they went from like the highest end type customers. And this is, you know, what's happened recently, talking about what went wrong. Straight from the New York Mag story. Rising interest rates caused defaults on Apple cards to spike. More than a quarter of its credit card borrowers had FICO scores under 660. Most of its personal loan customers were using the money to pay down other debt. Goldman Sachs suddenly had millions of customers who not only weren't as rich as the bank's long time, long time clients, but were struggling to make ends meet. And I think that's sort of the crux of it, right? It just like talks exactly about how tough it is for a long time bank to come in and start to take on some of like the,

• 28:53Alex Kantrowitz?

  you know, down the line risk that fintech companies are willing to take on to grow.

• 28:58Speaker 01

  Yeah. So as you said, it's actually estimated one to three billion dollars over the life of the partnership. It's just, it's bad issuance of credit, essentially. It's like, it's not, it's not. And I could also, I could almost imagine, because remember in the mid 2010s, like there was that promise that you should be able to using data evaluation, like understand a credit score and the credit worthiness of an individual consumer at a far more granular level than a FICO score. Like, you know, using, there's even stuff I remember where it was like, using social media, we will be able to issue credit based on,

• 29:41Speaker 01

  unlike who someone is and what they're talking about. And, you know, like, imagine you're like, posting about your vacation somewhere and that makes you seem more wealthy. So that's going to give you more credit, access to credit. So, so there, there is a lot of promise around being able to issue credit more rapidly to a wider group of customers, but they did not execute well. I think that was the actual quote I read in one of the articles where it was, we did not execute well. And I think they're, they're paying for it now.

• 30:13Alex Kantrowitz?

  And now they're thinking about passing that partnership on to American Express. So quite interesting. All right. Let's take a break, come back, talk a little bit about this, these new studies about social media. Ron Chan Roy is here with us, back from Taiwan. Off of vacation and now it's time for us to get back into the swing of things. So thanks, everybody who's been listening here and we'll be back after this with a discussion of those two topics. This episode is brought to you by App Point. 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.

• 30:58Alex Kantrowitz?

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• 31:43Alex Kantrowitz?

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• 32:26Alex Kantrowitz?

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• 32:41Alex Kantrowitz?

  And we're back here on Big Technology Podcast. Ranjan Roy is back from vacation. We're going to talk a little bit in this section about what he saw in Taiwan. Actually, maybe we can just start with that. Ranjan, do you have any reflections of like the Taiwanese tech culture, anything that you saw just by osmosis there? And then we can move on to these interesting studies about social media algorithms.

• 33:01Speaker 01

  Yeah, the first one, I got two that like really stuck out. First one, a lot of places did not take credit cards as in Visa or AMEX, Visa, Mastercard or AMEX, but it wasn't cash. It was all line pay. Not WeChat Pay, but line for those unfamiliar, another messaging app slash super app that Elon Musk wants to create. And for me, it was, it was pretty fascinating to watch because everything, even like, like roadside vendors and stuff, everyone took line pay. You know, like everyone, the call to action is connect with us online. So seeing the behavior of the super app in, you know, in person.

• 33:45Alex Kantrowitz?

  Did it make you have more faith in Elon's plan?

• 33:51Speaker 01

  No.

• 33:54Alex Kantrowitz?

  I tried.

• 33:55Speaker 01

  Yeah.

• 33:58Speaker 01

  The other one, this was one of my favorite. So in terms of delivery, they had something called La La Move, which apparently is in the Philippines and Southeast Asia, East Asia. And so we were, we were out at dinner and with one of my wife's friends and his wife was at home. So they literally order food to go. And then you can order, it's essentially a courier service, but it's very popular. So rather than having direct relationships with. The restaurant even necessarily, or the restaurant isn't even on the platform, but just calls couriers. So people, because I believe, I mean, it was explained to me, again, because there is an abundance of lower cost labor and people,

• 34:43Speaker 01

  and you can even order like on a moped, on a car, on a truck. So yeah, so the whole delivery infrastructure, it's like, and it's something that in the US I never think about. I know, I mean, Uber had, has or had Uber courier, like, moving stuff around outside of the confines of a food delivery app or a car service, but actually being able to just have someone move around something for you instantly. It was something I saw over and over again, that everyone was using this la la move.

• 35:16Alex Kantrowitz?

  Wow, that's interesting. Could that ever work in the US?

• 35:18Speaker 01

  I think. I don't know. I mean, again, Uber, I know they had the courier service. Couriers, I've always still thought of more for like work. When someone had like some document that has to move around, or some box that has to go from one place to another immediately, but, but it could make sense. Again, you're, you're the restaurant, rather than necessarily contracting to a food delivery startup, but just that same startup that brought them their, like, you know, from a vendor or supplier stuff in the morning, could also be delivering stuff to customers when it works out.

• 35:55Alex Kantrowitz?

  Yeah, I was desperately looking for one of those services in New York recently, where I had like, left my car in a, at a mechanic in Long Island. It was old, folks, but it died. And I was, I sold it to like one of those like parts for hire people. And the repair people, because I didn't have any more repairs, just stopped picking up the phone. And I had to leave the title in the car before, the night before the repair people came, came in. So I ended up going on my own, you know, going out there on my own, taking the plates off, leaving the title in the, in the driver's seat. And it was like 10pm, it was like probably the night before I flew to San Francisco. And because they were not ready for me, because they stopped answering my, answering my calls.

• 36:40Alex Kantrowitz?

  And I needed to get that done that night.

• 36:44Alex Kantrowitz?

  I'm in the parking lot doing the thing and they called the cops like they were monitoring it like remotely. I'm like trying to get this car off my hands and next thing I know there's like some speaker saying you are trespassing. The police have been called. I'm like, ah, this is my car.

• 37:02Speaker 01

  So, so, hold on. So just to confirm, you would like to pass that off to?

• 37:08Alex Kantrowitz?

  No.

• 37:09Speaker 01

  To?

• 37:09Alex Kantrowitz?

  Only for the first half of the story.

• 37:11Speaker 01

  To a courier, yeah.

• 37:12Alex Kantrowitz?

  But you know what I think? Cause I could only get out there at night, but if I were to be able to send a courier during the day, um, there wouldn't have been a problem.

• 37:19Speaker 01

  Okay. No, no, that's fair. And actually, yeah, that exactly. Here is the title to the car. Go and just please put it in the car.

• 37:26Alex Kantrowitz?

  Yeah. Yeah. I mean, I guess it's. Paid a lot of money for that also. Cause like, you know, I mean, it just had to be done in the moment and it would have saved me a drive out to Long Island to do it. So.

• 37:36Speaker 01

  I guess, yeah. I mean, I guess.

• 37:38Alex Kantrowitz?

  Instead, I had to drive out to Long Island, almost got arrested for taking the plates off my own car.

• 37:42Speaker 01

  For trespassing.

• 37:43Alex Kantrowitz?

  That's what have been really awful. So.

• 37:48Alex Kantrowitz?

  Social media algorithms.

• 37:49Speaker 01

  Social media algorithms.

• 37:52Alex Kantrowitz?

  Social media algorithms are having their moment in the sun. Recently, there've been four academic institutions that studied the role of social media algorithms and features of the feed. Uh, and they published their findings in late July and, um, and they've continued to be discussed because they're actually like fairly large studies. Um, and they're covered in places like the New York Times. I don't know. I didn't make too much about them because they came off of like, there wasn't like universal access to Facebook. It was just like Facebook handed over the data. But some of their, uh, their conclusions have been quite interesting, including that, um, that when you were to use a plain reverse

• 38:31Alex Kantrowitz?

  chronological feed versus an algorithm, it doesn't increase polarization, um, among many other things. Uh, and I'm curious, like it seemed overwhelmingly positive for, for Facebook and companies that use algorithms to figure, to filter news. But I was also just like, oh, kind of caveat here, right? Cause look at the source. What was your perspective on, on these studies? What did you learn?

• 38:55Speaker 01

  Two things. One, definitely caveat here because the, the studies were funded by Facebook.

• 39:01Speaker 01

  In 2019, they'd committed $20 million to work with the NORC at the University of Chicago, nonpartisan research organization. But they did not pay the researchers directly, but they did fund the overall research. And they also had control to exactly what access, what data the researchers had access to. So again, yeah, this is still essentially a Facebook study that ends up, at least from a PR standpoint, they leaned heavily into the idea that our algorithms do not affect polarization at all, and this proves everything. I disagree with that. And I dug into this a lot because actually, one of the things I strongly

• 39:46Speaker 01

  believe in, I remember a year, a couple of years ago, in like 2019, one of the earliest margins post was my five-point plan to fix social media. And one of them, and it's number one-

• 39:57Alex Kantrowitz?

  Elon Musk has to just buy Twitter? Is that on the-

• 40:00Speaker 01

  That was it. That was-

• 40:01Alex Kantrowitz?

  Nailed it, Ron, John.

• 40:02Speaker 01

  From the beginning-

• 40:03Alex Kantrowitz?

  Well done.

• 40:03Speaker 01

  And Mark Zuckerberg needs to launch Threads.

• 40:06Alex Kantrowitz?

  Yeah, well-

• 40:06Speaker 01

  Needs to launch Threads.

• 40:08Alex Kantrowitz?

  Very prescient.

• 40:08Speaker 01

  We're there.

• 40:09Alex Kantrowitz?

  Nailed it.

• 40:09Speaker 01

  It's fixed. So, so to me, the idea of a reverse chronological feed instead of an algorithm, I think is one of the most important things that needs to be available. It needs to be very potentially, like, I had half joked, but you, the default should be reverse chronological. And if you want to opt into algorithms, you should have like a warning label like a pack of cigarettes, is what I've said. Is that the idea is like, you just have to be made aware that what is being fed to you in an algorithm is going to be biased towards the more extreme, because that's how algorithms work. This study, and we can definitely get more into

• 40:50Speaker 01

  that, and I think TikTok became this kind of like logical endpoint of what a pure algorithm looks, algorithmic content looks like when there's no social graph, no anything else. So the study found that- When you actually go into a reverse chronological feed that supposedly it does not add to polarization, in fact, it it shows you less political content is what the study found. The thing that was interesting to me, but it also is it also found that it shows you less extreme content, which is obvious. We all know the more viral something is, the more an algorithm will select and show it.

• 41:33Speaker 01

  It's not like that's the thing for me around a lot of this is it's not, you know, rocket science. It's of course, things that are viral or pushed by an algorithm are going to be more extreme. So so to me, Facebook clearly, and like Nick Clegg was everywhere saying this shows that we did not actually, you know, increase polarization during the election, but it took it took like a very small portion of time right before one month before the November 2020 election, when feeds are very heavily political anyways, and then still found that a reverse chronological feed will show you less extreme content.

• 42:14Alex Kantrowitz?

  It's just worse, though. Like even I think about threads, like, you know, I'm on the for you and there's also they just released the following tab a few weeks ago, and I never want the following

• 42:24Speaker 01

  Oh, it's terrible. It's terrible. And here's why that's interesting to me.

• 42:28Alex Kantrowitz?

  So your plan is to just break social media? I mean, there's got to be some algorithmic filtering.

• 42:32Speaker 01

  No, no, it has to be a record. So two things, I still believe, but no, and don't get me wrong, I say this not necessarily tongue in cheek, it would definitely hamper or not maybe destroy a lot of businesses as TikTok would definitely be the most vulnerable. And actually, in Europe, TikTok is now going to have to show as part of the European Digital Services Act, a non algorithmic option. So they've already announced what they're going to do is instead of, but remember, it doesn't have to just be follower based, which is threads, the problem is their reverse chronological feed is only followers, right?

• 43:13Speaker 01

  It's or sorry, the and call it not reverse chronological, but the non algorithmic feed is followers. I will say I went on there the other day. No one I know has threaded in days. I think I then I saw, when was your last thread?

• 43:31Alex Kantrowitz?

  Maybe like I can't recall, but not

• 43:33Speaker 01

  Six days ago, eight days ago.

• 43:35Alex Kantrowitz?

  No, come on.

• 43:35Speaker 01

  Are you doing it just so you can come on this podcast and tell me that you're still threading?

• 43:41Alex Kantrowitz?

  That is the number one reason, but I have a very, I well, I think I used to have an active community on thread. No, my thread is five days ago. Oh my God. Yeah. I really fell off the wagon. Fell off the wagon on threads.

• 43:52Speaker 01

  Start threading again, man.

• 43:53Alex Kantrowitz?

  No, I think that it seems like that network is going to go through a very long struggle. Um, and may never actually get back to what it was that first, that first week. It feels dead right now. I'm just going to say it.

• 44:06Speaker 01

  It, alright.

• 44:07Alex Kantrowitz?

  I'm admitting it.

• 44:08Speaker 01

  Thank you. Thank you.

• 44:09Alex Kantrowitz?

  Another thing I gotta admit, by the way, I'm going to get back to this algorithm thing is, uh, this week, a self-driving cruise, uh, drove directly into wet concrete in San Francisco. This is from the New York Times. On Tuesday in San Francisco, a driverless car somehow drove into a city paving project and got stuck in wet concrete. Uh, the mishap involved the cruise vehicle. According to city officials, he said it was not clear how this car ended up in the concrete. I know I've been very effusive on self-driving cars. I'm not going to be one-sided about it like Wilder Isaacson will be about Elon Musk. I admit it ain't perfect yet. Okay. Just gotta say that. I feel like just for, for, you know, full disclosure reasons. Yes, these cars do sometimes drive into the concrete, but, but back to our story about

• 44:54Speaker 01

  The wet, wet concrete.

• 44:55Alex Kantrowitz?

  Concrete. It was wet. They said they, they had like recovered the car and it wasn't clear like what, what do they leave the wheels in there? They have to pay anyway to figure that out. But, but going back to our discussion of algorithms, I think the thing that's been most interesting about this, that's really picked up speed, whether it's Facebook itself, whether it's, uh, Musk inside Twitter or even advocates.

• 45:16Alex Kantrowitz?

  Like Julia Agwin, who wrote about it this week, is that there's budding momentum for people to be able to sort of choose their own algorithm. As opposed to just go reverse cron or algorithm, you should be able to choose a flavor of your algorithm. You could choose like heavily filtered, lightly filtered, outrage algorithm, chill algorithm, funny algorithm, and just allow that to filter your feed based off of your preferences. I think we're eventually going to get there. It seems like that is definitely like the next stage of social media is just like sort of pick your flavor and then run with it. And I'm curious if you think that, you know, you pointed out that article to me, the Julia one. Is that like the ideal and most pragmatic outcome in one?

• 45:56Speaker 01

  Yeah, I really think and I hope that's where we move to. Cause again, when I'm saying reverse chronological should be the default, I'm not saying that should be the only option. I'm saying that the least extreme and outrageous one should be where everyone starts and then you should be able to go where you want to or like, like rather than passively being fed and told what to look at, you should have to define and do a little bit of work for yourself. And the problem is that friction will obviously change the user growth and like engagement for any platform, right? So obviously, and I'm not saying from a business standpoint, it's the best way to approach

• 46:40Speaker 01

  this, but from an actual informational health standpoint, like having to just say, this is what I want to do. So if you want to get batshit outrageous content, you should have that right. You should have to click, this is what I want.

• 46:54Alex Kantrowitz?

  That's my threads. That's why I die. It was just too crazy for me.

• 46:57Speaker 01

  Give me the absolute craziest stuff out there. I want only lies, only lies. And then I should be able to choose that, but I should have to choose that and not just be fed it because of what I've been profiled at or what I'm clicking on.

• 47:14Alex Kantrowitz?

  Love that. All right, Ron, John, feels good to be back.

• 47:19Speaker 01

  Feels good to be back.

• 47:20Alex Kantrowitz?

  We've got a lot to talk about. Next week, we're gonna have a whole segment on whether generative AI is a dud. And speaking of which, Colin Murdock, the chief business officer of DeepMind, who does not believe it's a dud, is gonna be on the podcast on Wednesday to talk a little bit about Google's efforts in this area. So we managed to do a whole show without any gen AI this week. I think that's great. And we'll get back to it next week, really interrogating, you know, how far it's come and what the opportunity is and where it lacks. Because there have been, you know, a couple of months or almost a year in now, some areas that have definitely emerged and some concerns that have definitely emerged amid the hype. So we will talk about that then. Ron John, welcome back.

• 48:00Speaker 01

  Next week, generative AI.

• 48:02Alex Kantrowitz?

  Yeah, and more.

• 48:04Speaker 01

  And maybe, maybe another Long Island trespassing story?

• 48:08Alex Kantrowitz?

  Well, I'm in Seattle now, so.

• 48:09Speaker 01

  Okay, so that's where the trespassing will take place?

• 48:11Alex Kantrowitz?

  I'm planning to do zero crimes for the next week or so, as I make my way back to San Francisco and then eventually to New York. But no promises, so if, if I end up taking the plates off another car, it ain't gonna be for, for, for good reasons, folks. That I promise you, but I will not be doing that. I left my screwdriver back in the apartment. Thank you, Ron John. Thanks, thanks, everybody for listening. Pleasure to have you back, Ron John. We'll be doing this again every week with our Friday news recap show. And then tune in on Wednesdays for the flagship interview show. Again, Colin Murdock from DeepMind, our first DeepMind interview yet, is gonna be on Wednesday. Don't miss it. Thanks, everybody, for listening. We will see you next time on Big Technology Podcast.

• 49:05Speaker 02

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• 49:47Alex Kantrowitz?

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