ChatGPT explained, the FTC suing Microsoft, and Apple adding encryption to iCloud backups

The Verge's Nilay Patel, Alex Cranz, Richard Lawler, and James Vincent discuss the popularity of ChatGPT. Also: the FTC sues Microsoft to block its Activision Blizzard purchase, Apple is adding end-to-end encryption to iCloud backups, and some gadget news. Further reading: ChatGPT proves AI is finally mainstream — and things are only going to get weirder The FTC is suing Microsoft to block its Activision Blizzard purchase Microsoft reaches 10-year deal with Nintendo for Call of Duty EU sets December 28th, 2024, deadline for all new phones to use USB-C for wired charging The race to build a better Twitter Twitter Blue will reportedly cost more from iPhones to offset ‘hidden 30 percent tax’ Apple is adding end-to-end encryption to iCloud backups Apple claims a new iMessage can alert you if state-sponsored spies are eavesdropping Tim Cook and Joe Biden came to Arizona to announce plans for American-made chips Huawei’s latest smartwatch has hidden earbuds inside The $949 price for Dyson’s air-purifying headphones is more absurd than the device itself Coros Apex 2 and Apex 2 Pro review: slightly short of great Amazon Echo Auto (2nd gen) review: smaller but not smarter How CoinDesk’s FTX scoop left a hole in its corporate overlord Sonos and Ikea made a floor lamp speaker that could be perfect for surround sound Email us at [email protected] or call us at 866-VERGE11, we'd love to hear from you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:01Speaker 00

  Today on The Vergecast, James Vincent and Richard Lawler join us. We get into the GPT-3 chatbot saga, Apple's new security features, and the FTC is coming after Microsoft for buying Activision. All coming up, right after this.

• 0:16Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:01Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:57Nilay Patel?

  Hello, welcome to The Vergecast, the flagship podcast of The Verge, where we talk about absolutely nothing and waste your time.

• 2:06Nilay Patel?

  Now, the robot put an exclamation point at the end of that sentence. Because you see, I asked ChatGPT-3 to write the intro of the show. Usually, you're exuberant. And I said, I said, write the intro of the show, and it said, and ChatGPT-3 said to me, "Hello, and welcome to The Vergecast, the flagship podcast of The Verge." That's, that's wrong. It's, I mean, it's lazy. Yeah. And so I told the robot to make it funnier, and it said, "Hello, and welcome to The Vergecast, where we talk about absolutely nothing and waste your time," which is the robot fully telling me to go F myself. I was like, David would do the exact same if he was here. We basically replaced David. Yeah, done. See you later, buddy.

• 2:48Nilay Patel?

  Anyway, this is The Vergecast. That was the first and last time we're ever gonna let a chatbot write the intro. I'm your friend Neelai. Alex Cranz is here. I'm your friend who doesn't believe in AI. Oh, you will by the end of this episode. Richard Lawler is here. Hey, Richard.

• 3:02Speaker 03

  Hey, I might be an AI.

• 3:05Nilay Patel?

  That's by the end of this episode, we're gonna, we're gonna have to take bets. And our senior Verge reporter covering AI, James Vincent is here. Hey, James.

• 3:14Speaker 04

  Hey, I am, I am pro-AI. I'm pro-worshipping AI and just getting ahead of that. And you know that, that religion that Lewandowski tried to found, I am the guy who carried that on, so.

• 3:27Nilay Patel?

  You still got it. You still got it.

• 3:28Speaker 04

  I, I'm keeping the faith.

• 3:30Nilay Patel?

  Do you have like a, like a blue cube in your house with little electric bolts, like floating around in, you know, like one of those like AI monuments?

• 3:38Speaker 04

  Neelai, do I have a god cube that I, that I worship daily? Jeez, man. That is a very insulting question to ask someone of my faith. I'm gonna go if that's gonna be the tenor of the conversation, obviously.

• 3:51Nilay Patel?

  So, fair warning, it is, I believe, 9:00 PM for James in the UK. And he's just drinking. Man's drinking.

• 4:01Nilay Patel?

  Which honestly, it's, you know, it's only 4:00 PM here in New York.

• 4:04Alex Cranz?

  We could do that.

• 4:05Nilay Patel?

  We could be drinking.

• 4:06Alex Cranz?

  Next week.

• 4:06Nilay Patel?

  It's that, it's that kind of week. So we got to talk about ChatGPT with James. The FTC sued Microsoft to block the Activision deal. The EU did some iPhone charging standard stuff. Elon continues to Elon. There's a bunch of stuff to talk about this week. But we have to start with ChatGPT 3, which has taken the world by storm. If you don't know what it is, it is just a chatbot.

• 4:32Alex Cranz?

  Yeah.

• 4:33Nilay Patel?

  It just happens to be very good.

• 4:34Alex Cranz?

  Yeah.

• 4:35Nilay Patel?

  And I will tell you, I mean, I think it's super fun to play with, but the overheated.

• 4:41Alex Cranz?

  There's some feelings.

• 4:42Nilay Patel?

  People.

• 4:43Alex Cranz?

  People got feelings.

• 4:44Nilay Patel?

  Positive and negative, like all the way from VC saying this will replace Google to like fan fiction communities being like, once again, our art has been plundered by the godless heathens of Silicon Valley and we should shut down the, like, you pick either one of those.

• 5:02Alex Cranz?

  Just the whole gambit. This is the whole gambit of feelings.

• 5:05Nilay Patel?

  So there's a lot of like vergy stuff in here. Fred, we should talk about the technology itself, which is super fascinating. We should talk about OpenAI, the company slash research foundation that has made it and published it. And we should, we should talk about all those downstream effects, the angry artists of the world. We should talk about Lensa in this conversation too, the app that makes profile pictures people all worked up about. But let's just start with what it is. James, what is exactly going on with ChatGPT 3?

• 5:30Speaker 04

  So it, it is just ChatGPT rather than ChatGPT 3.

• 5:34Nilay Patel?

  It's GPT 3.5 is the thing inside it.

• 5:37Speaker 04

  So yeah, it is ChatGPT, which is a fine tuned version of an AI bot called ChatGPT 3.5, which is itself is a version, a sort of an upgrade of Chat, of GPT 3, which is from 2020. So the foundation of this tech has been around for a while. And what OpenAI, the company behind this decided to do is they fine tuned the bot on conversational dialogue. And they fed it a bunch of sort of conversational prompts and they got humans to rank the sort of attractiveness, the responsiveness of those prompts. They fed that back into it and it created a new sort of dialogue mode. And then they took that and they put it into a web demo. And that has been like the huge thing, you know, um, the, the, the baseline technology behind this has sort of been around for a while.

• 6:21Speaker 04

  It's never been as publicly accessible as this before. And that obviously has created this huge reaction where A, people are seeing what this thing can do for the first time, and B, they're finding new things to do with it. Because, you know, you can get a bunch of AI researchers to play around with a model in a lab. They are never going to be as creative or as chaotic as the internet on mass. Suddenly being like, hey, let us talk to this thing and see what it can do. I've got some, I've got some real interesting questions. So that has created this explosion where suddenly this thing is everywhere. And I'm, Neil, I'm with you. I, I do find it quite exciting. Like, there's lots of caveats that need addressing when we talk about this technology. But the, the, the base feeling for me is like, oh, man, this is pretty cool. Like, we couldn't do this before. It is doing interesting stuff.

• 7:06Speaker 04

  I'm into it. Let's see where it goes.

• 7:08Nilay Patel?

  Yeah, that to me is the, the version part of this whole story is what you just described. This underlying technology has been around since 2020. And we have seen very public demos of similar technology. Like at Google I O, Sundar Pichai has demonstrated Google's riff on large language models like this. And you can go back and watch them. They're very funny. He's like, I'm going to have a conversation with a planet now. And then for a few minutes, we all just sit there while Sundar is like, what's it like to be Pluto? And a robot is like, it's weird. And everyone's like, what is the purpose of this? But that is the same L L M idea, right?

• 7:53Nilay Patel?

  Where you feed an AI a massive amount of language data, a massive corpus of text, and it learns how to talk to you. Yeah. OpenAI has a different riff, which GPT we've seen. But that, like, Google's been doing that demo for a while. Then on top of that, we've already experienced like three or four news cycles of serious, meaningful controversy.

• 8:16Alex Cranz?

  Yeah.

• 8:16Nilay Patel?

  Around L L Ms. In particular, again, at Google with Timnit Gibrue. And, and then there was just the researcher who claimed it was sentient. And it was fired for warning Google that their L L M was sentient. Uh, the Timnit Gibrue is much more, I think, important, less funny, but more important, where she was like, I'm publishing papers about the ethics of AI like this. And she claims Google fired her for publishing those papers. This is like a big deal.

• 8:43Speaker 04

  Yeah.

• 8:43Nilay Patel?

  All I'm saying is we have gone through the gamut with the underlying technology. We've seen the big hypey demos. We've seen the ethics controversy. We've seen the engineer who claims it's alive get fired. Like,

• 8:59Nilay Patel?

  there's a lot of peaks and valleys to the story already over the past years. And what has happened now is that the user interface got good.

• 9:07Speaker 04

  Yeah.

• 9:08Nilay Patel?

  Right. The user interface to do this before, right? You had to install a bunch of stuff on your computer or like, you just had to like work hard to get to the place where you could type in a prompt.

• 9:18Speaker 04

  Yeah.

• 9:18Nilay Patel?

  Now it's very much, you can just talk to it.

• 9:21Alex Cranz?

  Yeah, you log in and you start chatting.

• 9:24Nilay Patel?

  Yeah, I mean, it is, it is actually like, that is a remarkable advancement and it's in its own way.

• 9:29Speaker 04

  Yeah.

• 9:30Nilay Patel?

  But the underlying tech is not that different than what it was before, is it?

• 9:33Speaker 04

  No, no. And I think actually even the UI, the making it conversational, is something that we've been able to do for a while. And I think actually the, the sort of the thing that has happened is that AI companies have got a little less scared this year. And that there has been some successes with text to image models, specifically stable diffusion, who disrupted, you know, the status quo within this industry. So you had all these image models like Dolly, which were relatively restricted. Stable diffusion is open source. Anyone can build on it. Anyone can mess around with it. That's had, that is having, will have bad consequences, but it's also created a lot of interest and excitement and people have built on it. And I think that gave AI companies some new confidence.

• 10:16Speaker 04

  I remember speaking earlier this year to Meta about a chatbot that they put out. And one of the things that one of their execs said to me was like, it's not 2016 anymore. When the Microsoft Tay chatbot went online, became a racist asshole in 24 hours and then got pulled off. You know, they, they were saying like, yes, that was bad, but A, we've got more guardrails than we used to. And B, we're kind of thinking that this is the best way we advance this stuff. So I think there has been a period of Timidity, which in many ways is connected to the criticisms that came out of Google with the stochastic parrots paper, which was the one by Timnit Gebru and a few others, Margaret Mitchell, which is incredibly valuable, important stuff.

• 10:59Speaker 04

  They brought up these issues and they are huge, real issues. But I think that made the company stutter for a while. And in 2022, OpenAI particularly has been like, you know what? F it, we're just gonna put it out there and see what happens. And people in OpenAI will be congratulating themselves for this, I'm sure, because they have got so much attention, they've got so much goodwill out of it. They're burning money doing it, but it really has moved the conversation forward, for better or worse.

• 11:29Nilay Patel?

  Can you, before I move on, can you quickly just tell people what a stochastic parrot is and what this paper said? Because I think it underlies the whole controversy.

• 11:37Speaker 04

  Oh, yeah.

• 11:38Nilay Patel?

  To understand this technology, you have to understand that criticism.

• 11:41Speaker 04

  So there are a lot of points that are made within the paper. But I think the big thing about it is, what is a stochastic parrot? It is a probabilistic machine, right? And this is the big thing. In many ways, it's the big thing about the deep learning revolution in general, in that instead of creating a deterministic computer where X does, Y does, Z does, you know, A, B, C, knocks on like that, you take a machine that looks at data, that looks for patterns in that data, learns to replicate that data, and then deals probabilities out to you. And that probabilistic nature of AI and of large language models in particular, creates all sorts of downstream problems, often to do with the data that these systems are trained on.

• 12:24Speaker 04

  Stochastic parrots had a lot of criticisms about, you know, a lot of problems. I don't want to frame these people as critics, because I feel that that, in a way, diminishes what they're saying, because then you get the critics and the proponents and you're either for or against the technology. These aren't people who are against the technology, they're just people who have things to say about it and, you know, write correct observations to make. But so when you have a probabilistic model, when you say, train it on data scraped from the internet, that is going to return all the bad things in that data. And that is stuff like biases, that is, you know, bias against people of color, against women, it has stereotypes within that. And we know that these models, including ChatGPT, these problems are not fixed.

• 13:08Speaker 04

  They are still replicating these bias issues. So yeah, that's one thing within the paper, but there are others, but I'll leave it at that.

• 13:15Nilay Patel?

  Well, so and this gets to very much how it works, which we should also just touch on briefly. We're calling it an AI.

• 13:23Speaker 04

  Yeah.

• 13:23Nilay Patel?

  There and it's made by a company called OpenAI.

• 13:26Alex Cranz?

  But it's not an AI.

• 13:27Nilay Patel?

  But it is.

• 13:28Speaker 04

  It's not an AI.

• 13:29Nilay Patel?

  And this chat client, its main feature is that it appears to have a sense of state.

• 13:36Speaker 04

  Yeah.

• 13:36Nilay Patel?

  Right. You ask it a question, it gives you an answer. You ask it a follow up. It appears to remember what has transpired and answer a follow up question. That is also a mirage. So can talk about how it works and, you know, it's sort of just like guessing the next word of a sentence. And then we should talk about how it's preserving the sense of state to create the impression of a conversation.

• 13:57Speaker 04

  Yeah. I mean, so at the basis, a language model, particularly GPT three is an autocomplete, right? It has looked at this data. It is looked and it is mapped out in these incredible multi dimensional graphs. The proximity of words to one another, essentially. And by doing that, when it looks at how often words appear next to each other, you get this semantic map, which allows you to know that, you know, king is like queen because they're part of this body called monarchy. But king also has this connection with man, while queen has a connection with woman and it, you know, it maps out all this semantic data. And then essentially you feed it a string of words and then it will predict what will come next. What happens when you turn that into a conversation is that there is a lot of clever behind the scenes stuff,

• 14:43Speaker 04

  which honestly, I don't quite understand. I don't understand the basic mechanisms of it, but it essentially, you know, it turns your question into a prompt in which it tries to predict based on, based on what you've asked it, what the answer would or should or could be. Yeah. So that, that is the sort of the underlying, the underlying mechanism there. What, what you've pointed out, the fact that these systems, particularly chat GPT have a sense of state. I think that really changes how you interact with them, as you rightly point out, you know, because you start thinking of it as an entity, not as a sort of a, a function where you ask it to discrete questions and it gives you discrete answers. And I think this sense of state is. What led to the Google engineer Blake Lemoine, Lemoine?

• 15:26Nilay Patel?

  Yeah.

• 15:27Speaker 04

  Lemoine, you know, mistaking this thing for a conscious being of some sort. So a state is very important. It helps the user, right? But it also creates this false sense of personhood. And I think that is going to be a really tricky balance in the future with these models, knowing how to split that divide.

• 15:44Alex Cranz?

  I mean, how different is it from Siri or Alexa or something like that? Because I have to admit, the few times I've used ChatGPT, it hasn't worked for me.

• 15:56Alex Cranz?

  It gave me, it gave me this whole, I asked it for a story.

• 16:00Speaker 04

  Right.

• 16:00Alex Cranz?

  And it gave me an entire story and it was like, and then they killed the dragon and then they fought Thanos.

• 16:05Speaker 04

  Right.

• 16:05Alex Cranz?

  And I was like, is Thanos the dragon? And it was like, I don't know how to respond to that question. And I was like, but

• 16:09Nilay Patel?

  Oh, no.

• 16:10Alex Cranz?

  You just told me all about it. So it felt like, for me so far, my experience with it has been very Alexa, very, very Siri. Which is why I'm like, it seems fine and I haven't been super impressed. But it sounds like you guys have all had like much different.

• 16:21Nilay Patel?

  Well, so I'll tell you, even this little joke about complete the sentence, welcome to the Vergecast. That query, I had to enter specifically that way.

• 16:28Alex Cranz?

  Yeah.

• 16:28Nilay Patel?

  When I said, what is the Vergecast the flagship podcast of? I got a stock answer that says, I cannot search the internet for you.

• 16:36Alex Cranz?

  Right.

• 16:37Nilay Patel?

  Right. And so there are these like dead ends and it's like, I don't, that's a weird.

• 16:41Alex Cranz?

  Yeah, it's kind of like early days of Google where you like, you had to really think about how you worded that question. And I know, James, you were talking, you recently wrote a piece where you had a friend who like, used it to create a whole new macro.

• 16:53Speaker 04

  Yeah, an Excel macro, just, you know, he's a guy, he works in higher education. He does a lot of database wrangling as part of his job, but he's not, he's not a coder. He's never, he's never had a formal training that he studied English at university, you know? And he would, he was just casually saying, I asked it for an Excel macro about how to, you know, extract this, this sort of selection of dates. And it came up with it and it got it, he got it to work in a matter of minutes. And I just thought, well, that is, that really says something about the accessibility of these systems.

• 17:24Alex Cranz?

  Yeah.

• 17:24Nilay Patel?

  There's a piece of the puzzle there that is really important, right? Because the most impressive examples I've seen of the system working are people asking it to write computer programs.

• 17:35Speaker 04

  Right.

• 17:35Nilay Patel?

  Write me code, which we think of as a very difficult thing to do. I'm sure all the people who actually write code for a living, listening to this, like, that's not so hard. But like it. The relationship between human language and computer language is usually mediated by people, like mostly mediated by people and having a robot that can make that connection for you and take your English language query and spit out working, workable code in the language of your choice. All the most impressive ones I've seen have all been in C sharp, which is like a weird Microsoft corner case language, right? Like, that's amazing to me. And it's because the corpus of text on the internet includes so much code.

• 18:20Nilay Patel?

  Exactly. Yeah, yeah. And that to me is like a fascinating reflection of what you're talking about, which is the inputs reflect the outputs. Yeah. It can do this because there is so much code on the internet. If you were to ask it to do other kinds of things that the internet is not so good at.

• 18:37Alex Cranz?

  Like recipes. Quick, somebody ask it to make a cookie. Give me a cookie recipe.

• 18:40Nilay Patel?

  Apparently, it's quite, apparently, it's quite good at recipes. There's a lot of recipe text on the internet.

• 18:45Alex Cranz?

  Yeah, but they usually have the opener where the person has to talk about how the cookies remind them of their grandmother's.

• 18:50Nilay Patel?

  So this is like you get all the way downstream of it to, well, this is like why people think it's going to replace Google.

• 18:56Alex Cranz?

  Yeah.

• 18:56Nilay Patel?

  Right. Which is asking this thing questions returns more interesting answers that are more conversational and are often just the answer. Write me an Excel macro. If you wrote that into Google, you would be flooded with a list of garbage.

• 19:11Alex Cranz?

  Yeah.

• 19:12Nilay Patel?

  Like, Google would basically return to you nothing of value.

• 19:14Alex Cranz?

  Bunch of paywalls.

• 19:16Nilay Patel?

  Yeah, a bunch of paywalls, a bunch of SEO spam texts, a bunch of articles that were like slideshows. And you're like, this actually does not, is not a date sort in Excel.

• 19:25Alex Cranz?

  Yeah.

• 19:25Nilay Patel?

  This is just, you're trying to get me to buy a book.

• 19:28Alex Cranz?

  YouTube results. It's like, actually, you should just watch this 20 minute video. We got you.

• 19:32Nilay Patel?

  And there's a reason that other search products like Stack Overflow and Yelp and all these other things exist. They're more targeted search interfaces to certain kinds of results. And they have built businesses not be game by Google in that way. Chat GPT is like, you ask a question, it just tells you an answer with utter confidence. It's like, here is some code you can type into your computer to do a date sort. And like, maybe it's pure malware. Maybe you're gonna hack like Iranian nuclear reactor like you have no idea what's gonna happen, but it's like, here it is.

• 20:05Alex Cranz?

  You got it.

• 20:06Nilay Patel?

  Here's a recipe for whiskey sour, one cup bleach, please. And it's just like, no, no, like absolutely no hesitation whatsoever. And I think that is why people are reacting to it.

• 20:17Alex Cranz?

  Yeah.

• 20:17Nilay Patel?

  Because there's no business model between you and something that is presented to you confidently like an answer, even if the answer is garbage.

• 20:25Alex Cranz?

  Yeah.

• 20:25Nilay Patel?

  Like, you know, and it's

• 20:26Speaker 03

  There's no business model yet.

• 20:27Nilay Patel?

  Right. Right now, it's burning money. James, how much money does this thing cost to run? Because it seems like they're just lighting VC dollars on fire.

• 20:35Speaker 04

  Well, I think Alex, you, you didn't you do something on this? I remember, I can't remember the figures.

• 20:40Alex Cranz?

  Yeah, they, a guy did, did the math on it. And basically, each query costs like point zero zero zero three cents. And so it's costing them about $3 million a day on average with like, they, they, they assume the number of people using it, the number of queries and stuff, but probably about $3 million on, on average. And that was based on the pricing for AWS, which is where this is all running out of, because it has to use a lot of GPUs to, to do all of this. Like, one, I think they said like, one GPU would maybe present one word in a couple of minutes. So it's having to use like, a ton of processing power, probably way more than Google does for Google search, which might make

• 21:20Nilay Patel?

  Which explains a lot about Google search.

• 21:22Alex Cranz?

  Yeah. Use more GPUs.

• 21:24Speaker 03

  Yeah.

• 21:24Nilay Patel?

  Well, so that, I mean, that to me is really fascinating, right? So as Richard's point, it doesn't make money yet. The costs are high.

• 21:30Speaker 03

  Yeah.

• 21:31Nilay Patel?

  On a long enough timeline, the costs of technology come down, sure. But right now, costs are high. And they're gonna have to somehow make this a product.

• 21:38Alex Cranz?

  Yeah. Well, I mean, we're seeing that with Linza, right? Like, Linza is this other big AI thing that's, that's using, I think, open source engine.

• 21:46Speaker 04

  Yeah.

• 21:46Alex Cranz?

  Yeah.

• 21:47Speaker 04

  It's using stable diffusion, which is an open source text to image AI, but also is monetized by the company that funds it. And I say funds it rather than made it, because there is a very convoluted sort of licensing scheme going on that the company that is associated with it, Stability AI, has put in place in order to avoid future legal liability. So they, they, they fund it, they fund it, but they don't research it, and they don't make it technically.

• 22:16Alex Cranz?

  Right.

• 22:16Speaker 04

  But anyway, yeah.

• 22:17Alex Cranz?

  And so this other company, Prism, is that, is that the name of it?

• 22:20Speaker 04

  Prisma Labs, yeah.

• 22:22Alex Cranz?

  Prisma Labs has taken this engine and they've put it into their app. And so if you pay a certain amount of money, you can have little cute digital portraits of yourself and also help them continue to train this AI. Basically, you're, I mean, effectively, you're paying them to train their AI.

• 22:41Speaker 04

  Well, whether they keep the AI, do they keep the data for training AI? I feel like this is such a meme within Twitter that like, oh, tool X is keeping your data for Y.

• 22:54Alex Cranz?

  Yeah. I mean, because that's happened in the past. Like, we have seen that happen before, where a company is like, yeah, give us your face. Oh, by the way, we're working on facial recognition.

• 23:04Nilay Patel?

  Yeah, Facetune. Wasn't it? It was like the Chinese app.

• 23:07Alex Cranz?

  I think it was Facetune. Yeah. We've definitely seen that. And Prisma Labs, to their credit, has said, they told TechCrunch earlier this week, either this week or last week.

• 23:13Speaker 04

  Yeah.

• 23:14Alex Cranz?

  Anyway, to their credit, Prisma Labs did tell TechCrunch that they aren't keeping a lot of this data. They are deleting it. It's going away from their servers. But isn't it still training stable diffusion? Or are they just like?

• 23:27Speaker 04

  It wouldn't be training stable diffusion. Stable diffusion would be sort of separate from that. And stable diffusion is based on a big database called Lyon, which again is made by a German university. I guess they could be keeping it. I don't know. My feeling on that is that the bad PR of finding out an app is keeping your data in order to train its systems would outweigh the cheapness of just buying that data. You know, if you want to get a million faces downloaded to train a facial recognition system, there exists a database called MegaFace.

• 23:56Nilay Patel?

  You sound like a character from Cyberpunk. You want to get a million faces.

• 24:00Speaker 04

  You want a million faces, my friend.

• 24:02Nilay Patel?

  If you want to get a million faces, I can get you a million faces.

• 24:04Alex Cranz?

  He got a guy.

• 24:05Speaker 04

  I got a guy with a, I got several million faces back here. You take a look. I got what you need. Come on.

• 24:11Nilay Patel?

  That's one that's working at Faces. I get you faces.

• 24:13Speaker 04

  Oh, I got your faces, guy. Come on.

• 24:15Alex Cranz?

  Like Prisma Lab, they they are they found their other ways. I mean, even if they they aren't doing the whole, we're gonna steal all of your facial recognition data so that we can sell it somewhere else. They are saying you have to sign up for a month of our service.

• 24:30Nilay Patel?

  Right, that's just like Apple App Store.

• 24:31Alex Cranz?

  Yeah, yeah, it's just like traditional App Store.

• 24:33Nilay Patel?

  The business model to it.

• 24:34Alex Cranz?

  Yeah.

• 24:35Nilay Patel?

  Which is like, we don't want to sell you an app. We don't want to sell you one in app purchase. We want to make you subscribe to our app and then forget that you're subscribed to our app. So we get at least one more month of money from you.

• 24:45Alex Cranz?

  They're gonna make so much money this next month.

• 24:47Speaker 04

  I think this will be gone pretty soon. This this specific iteration of it. Does anyone remember style transfer? Like, that was like a big AI sort of trend in like 2015, 2016, I want to say. And you know what? Prisma Labs did that. They did that back in the day. I was looking up some old articles I wrote about them because the name was familiar to me. And they used to do these style transfer things where you'd put in a picture and it would make it look like Van Gogh, or it would make it look like stained glass. And, you know, this was a thing for a while. Facebook did it. You'd see it on people's profile pictures and it was gone within a month.

• 25:19Nilay Patel?

  Yeah.

• 25:20Alex Cranz?

  And now it's an Adobe feature.

• 25:21Speaker 04

  Yeah, it's an Adobe feature and it's a boring preset thing. And I think AI portraits will probably go that way pretty quickly. But something next will come.

• 25:30Nilay Patel?

  But there's something underlying all of this, which is kind of the the cultural controversy of it, right? So we've talked about where it came from, how it works, the controversy. Importantly, I think the democratization of the technology with easier to use user interfaces. And in the case of Lensa, right, Stable Diffusion is a thing that you were able, you can today, download it and run it on your computer.

• 25:54Speaker 04

  Yeah.

• 25:54Nilay Patel?

  You can just do it if you want. It's just it's hard. People don't want to do it. Actually, Apple just released an update that makes Stable Diffusion run faster on its phones.

• 26:04Alex Cranz?

  Oh, cool.

• 26:05Speaker 04

  Yeah, which which is big. Yeah.

• 26:07Nilay Patel?

  Right. And it's like a 40% performance boost on the neural engine on it, like an M2. Right. Like, this is it's all happening. But it's here's an app where you can pay four bucks to get some profile pictures. It's actually a much more like democratic. Anybody can use it. That's when I say like, that's the verges part of this story. It's like you give all the people the tools and then you have no idea what's gonna happen. And that's like, that's when I just like, am the happiest.

• 26:33Alex Cranz?

  What's that called again, James? When you give people all the?

• 26:37Speaker 04

  Sorry.

• 26:37Alex Cranz?

  You had a specific, you had a specific word for in the piece you wrote today about AI.

• 26:42Nilay Patel?

  Oh, the overhang.

• 26:43Speaker 04

  Oh, the overhang. Yeah. So that's not necessarily about access. The phrase is capability overhang, which I love it. It sounds like, I don't know, it sounds like a minor character in a Pinchon novel. High capability overhang. But it essentially refers to the hidden capabilities of AI systems. That it's sort of something that AI researchers get quite excited about and stay up late talking about when they, when they, you know, they think about the fact that these models do things that we don't even know that we don't know that they do. Right? That there are, there are unknown unknowns about what these things can do. And the point I made in my piece was that although there exists a capability overhang within the research community, there also exists one within the sort of public awareness of this. And 2022, particularly

• 27:28Speaker 04

  the last couple of months, when we've seen tools like ChatGPT, we've seen, I mean, remember like Crayon, the AI image generator that was everywhere for a little bit and is now already just sort of like part of the background tapestry of the internet?

• 27:42Alex Cranz?

  Yeah, we forgot.

• 27:43Speaker 04

  These tools. Yeah, we've forgotten. But these tools are just becoming part of everyday life now. And we are now climbing that overhang, the public. We're discovering what these capabilities are. And I think 2023 is going to be wild for this stuff. And we're going to see, we're going to see a lot of consequences happen as well.

• 28:01Nilay Patel?

  That, that's where we should kind of wrap this up with. Because to me, the image based AI, in some way, that stuff is harder for a regular person to do. Right? A really good example is, you know, Casey Newton used to work at The Verge, and we would illustrate his newsletter with actual designers and illustrators, like a human being who worked here, most recently Alex Castro.

• 28:27Nilay Patel?

  Uh, who's a great illustrator. We're like, illustrate Casey's newsletter once a week.

• 28:30Alex Cranz?

  Right.

• 28:30Nilay Patel?

  Casey now routinely has Dolly illustrate the newsletter, right? He like types a prompt to do image generator and like, whatever it's done. And there was a moment where that, you know, all the arguments about, there was even like a minor controversy about news publications using these tools.

• 28:46Speaker 06

  Yeah.

• 28:47Nilay Patel?

  For illustrations instead of hiring illustrators. But that stuff seems faddish, even though it's harder.

• 28:52Alex Cranz?

  Yeah.

• 28:53Nilay Patel?

  Even though most people cannot illustrate anything on their own. That stuff, stylistically, it comes and goes. The usages for those things, like images expire in a way that, you know, like other kinds of formats don't. It's the tech side. It's the you wrote me some code, or I've seen the number of advertising people I have seen who are like, we're gonna spam the most marketing text on the most content marketing blogs that you have ever seen. This is a godsend for the agencies. And it's like, first of all, all of you talk about advertising is, is though you're like boning. Like I, there's like, if you're just like in that world,

• 29:34Nilay Patel?

  it's like, you gotta be less horny about ads. Like, that's my advice to all of you.

• 29:39Alex Cranz?

  10% at least.

• 29:40Nilay Patel?

  Just like 10% less horny about advertising, please. And then is like, oh, that's real. Right? Like if you run a small ad agency and you're like hired to sell bottles of water, and you need to make the website that's about how great the bottled water is.

• 29:57Alex Cranz?

  Nobody's reading it anyway.

• 29:59Nilay Patel?

  Right. You're kind of like, what I need is a bunch of keywords for Google.

• 30:02Alex Cranz?

  Yeah.

• 30:03Nilay Patel?

  So when people Google bottled water, they like, Google's like, well, I found this site with a lot of bottled water references on it.

• 30:09Alex Cranz?

  I do wonder if it's gonna like-

• 30:11Nilay Patel?

  They're definitely not gonna hire some like 22 year old kid to do it. They're gonna be like, robot, write me bottled water copy.

• 30:17Alex Cranz?

  Write me my SEO copy.

• 30:18Nilay Patel?

  And they're gonna like edit it a little bit, and they're gonna put it on the website. And they're already, they see it. They see the value of that completely.

• 30:24Alex Cranz?

  Yeah. I wonder if that's actually-

• 30:26Nilay Patel?

  I've seen, um-

• 30:27Alex Cranz?

  Bigger danger to Google.

• 30:28Nilay Patel?

  I will, I will, I will give a little hint about an episode of Decoder that we have on Minds. There's a very famous hustle culture gentleman.

• 30:35Alex Cranz?

  Uh huh.

• 30:35Nilay Patel?

  Out in the world.

• 30:36Alex Cranz?

  Yeah.

• 30:37Nilay Patel?

  I love him. I've I've wanted this gentleman on Decatur for a long time. So I've been following him. And I got recommended a bunch of his staffers. And one of his staffers has a TikTok. It's like, you know, sometimes you need to write 45 tweets for a campaign. Have you met ChatGPT? And he's like, here's 45 tweets that I wrote for this campaign for like our hustle culture product. And it's like, oh, that shit's gonna happen. And that to me is more durable, more interesting, more chaotic, more impactful than the image stuff. And I think the image stuff gets all the press because most people can't make images.

• 31:15Alex Cranz?

  Right.

• 31:16Nilay Patel?

  Obviously, most people can make text, but the part where it's, and maybe I'm biased because I make text for a living. And I also apparently talk about nothing on this podcast.

• 31:26Nilay Patel?

  But the part where it's like, oh, like, most of the text on the internet is like, so Google will find it. And so now we're going to trick the Google robot with our robot.

• 31:34Alex Cranz?

  Yeah.

• 31:34Nilay Patel?

  It's like, oh, we're in the end times. I love it here.

• 31:38Alex Cranz?

  Well, if you was like, I mean, that's what I was like, I think that's where Google has to face the threat. It's not, oh, I can go and chat with this thing and it'll give me results. It's, oh, other people can go chat with it and it will give them results, thus making Google SEO even more worthless.

• 31:52Nilay Patel?

  So James, you have written about Google exploring these models for search. And I feel like the biggest meme of the past week is this is going to replace Google. And you actually wrote, we republished, re-promoted a piece you wrote a year ago about Google exploring this exact idea and kind of walking away from it.

• 32:10Speaker 04

  Well, I mean, I don't think they walked away from it forever because as you have pointed out, they love to demo this stuff. Like the conversations with MUM and Lambda, which are two of their big, large language models, which are sort of their equivalents of GPT-3. But they did write this paper in May or June 2021, I can't remember exactly, where they pointed out a lot of the problems with it. And in my piece, I sort of thought that actually it's problems they faced before. The big one is the confidence in presenting what is potentially false information. Large language models, because of their stochastic, their probabilistic nature, they cannot sort fact from fiction reliably. There are probably ways around that. There's ways to build in, I'm sure, a directory of knowledge that it checks against, that it looks for citations with.

• 32:53Speaker 04

  But there is this problem with confidence, and we saw it, actually, I thought, with Google Home, where you used to ask Google a question and it would not, it was not a Google search, of course. It was just, it would just give you the answer. And that UI, that presentation is, to me, the same as ChatGPT, because there is confidence, there is no outside sources, and there is often a chance that you will give entirely the wrong response. And it is something that happens a lot. I, I, I think these are fixable problems. I think the question is, does a startup come up with a better search engine, which is probably really janky and probably actually causes a lot of trouble? Do they get that out there before Google itself puts out a version which preserves its credibility?

• 33:38Speaker 04

  The thing is, Google has much more to lose in this scenario, whereas a startup can burn a lot of, like, it can create a lot of goodwill, and it can say, we're doing something fast, we're going to the moon with this, and it can put out something that is potentially very dangerous, and get away with it, and maybe scoop Google. I, I think these things will, there are problems with them, but I think they will be incorporated into search in the next couple of years. And the question for me is whether, who gets that first, basically?

• 34:04Nilay Patel?

  What do you think the most interesting use of the technology as it exists today is?

• 34:10Speaker 04

  Just creating psychosis in its users. I think if you just, if you talk to these things for long enough, you will go mad. There is a reason that guy, that Google engineer was like, you know what, it's alive. There's a reason we started the show by joking about an AI religion. One of my favorite, one of my favorite books of the last couple of years, and I don't know why, sorry, I don't know why I'm doing this, this is a podcast.

• 34:34Nilay Patel?

  He's holding up a book, this is great.

• 34:35Speaker 04

  I'm holding up a book. It's, it is called Pharmaco AI, and it's by an artist, the writer, K. Alardo McDowell. And it is an extended conversation with GPT-3, in which Alardo McDowell sort of reimagines GPT-3 as this godhead, as this sort of mythical divine entity.

• 34:56Speaker 04

  That drives them mad, basically, over the course of the book, in my opinion. And I think the weirdest and the most wonderful thing is the conversations we're going to have with what is essentially a really weird mirror of ourselves. You know, for better or worse, these things are scraped from the internet and we can influence them with our feedback. That means they are like us. That it is something that reflects us back to us. And I think that is going to create some really, really strange cultural experiences for everyone.

• 35:25Nilay Patel?

  There's another version of GPT that I'm out, right? GPT four is apparently on the horizon.

• 35:29Speaker 04

  Yeah, it's on the horizon.

• 35:31Nilay Patel?

  What happens with it? What is the improvement?

• 35:33Alex Cranz?

  So excited just.

• 35:34Speaker 04

  I'm sorry, I did, I did that again.

• 35:36Alex Cranz?

  This is great.

• 35:38Nilay Patel?

  He did the Mr. Burns with his fingers.

• 35:43Speaker 04

  That was completely instinctive. I'm so embarrassed by that. I don't know why I did that.

• 35:47Alex Cranz?

  What's exciting? What? Why are you doing this?

• 35:49Speaker 04

  Well, it's.

• 35:50Nilay Patel?

  Well, finally, humankind will block out the sun.

• 35:52Speaker 04

  Yeah.

• 35:54Alex Cranz?

  Don't get shot by a baby.

• 35:55Speaker 04

  Like, finally, I can get it. I can get an AI to do my job finally. And I can just, I can just get drunk on podcasts instead. It's all I've been out trying to do. No, I, I don't know. I, I'm excited because I think it's, it hopefully it will be as much as a leap forward as GPT three was from GPT two, which I use both programs, you know, I, I, I play around with them. And it was quite a step forward, actually. Uh, we don't know when it's going to come out. There were rumors that it would be the end of this year. It's now looking like it will be early next year. And actually, a lot of the rumors were basically about chat GPT. But it's supposed to be much, much bigger, you know, i- i- in terms of the parameters, which is the sort of metric by which you measure the size of these and the complexity of these models. Actually, no one knows anything about it apart from that.

• 36:38Speaker 04

  There is just a lot of sort of like funny rumors going around that, you know, GPT four is, you know, the computational matrix is equal to the complexity of all organic life on earth, which I believe is Douglas Adams, you know, is that sort of joke, basically. But yeah, that should be early next year. And I'm with Neelai. I think this is going to have like a huge influence on jobs. Uh, I think this is actually, we're going to start seeing industries change because of this technology very soon.

• 37:04Nilay Patel?

  We need to wrap this up, but fundamentally interesting about that is I think in the popular imagination, the automation has always replaced the blue collar jobs. And to some extent, that is true. And we're going to, you know, we're going to talk about the TSMC factory that got opened in Arizona this way. Like, yes, there's a bunch of like cars are built by robot arms now.

• 37:21Alex Cranz?

  Yeah.

• 37:22Nilay Patel?

  But it turns out the AI is just like, it's coming for ad agencies. Right? Just like the way that Excel came for accounting firms.

• 37:28Alex Cranz?

  Yeah.

• 37:29Nilay Patel?

  And I don't think that anybody has quite yet reckoned for that. The AI is coming for mid-level Excel macro coders. More than it is coming for factory workers. Right? Because if you can just ask a robot to be like, sort some dates and it spits out the code at you. There's actually just like, kind of like a huge middle class of white collar work that goes away. And no one can check the AI's work because it's so confident.

• 37:53Alex Cranz?

  Well, and it's going to create work too, right? Like all of these, every time you do these queries and stuff, somebody somewhere is probably having to comb through some of them and check them and make sure that things are getting labeled properly and that everything's working. Cause this is a lot of.

• 38:06Nilay Patel?

  You want to be the AI, the semantic AI data checker.

• 38:10Alex Cranz?

  I think that is probably a terrible job.

• 38:13Nilay Patel?

  That's a, that's a job of the future where you just go through and you check the tags on the chat GPT app.

• 38:18Alex Cranz?

  This person's talking about porn with GPT and I'm, I'm here with them.

• 38:23Speaker 04

  I mean, if you guys aren't certainly capture lately, well, you know, we, this is already part of our day to day lives.

• 38:29Nilay Patel?

  Yeah, that's true. We've been doing it for a long time. This is a fire hydrant. So we should, James, we should call out, James has his own very good book called Beyond Measure, which is a delight, soon to be excerpted in The Verge when it comes out in the United States. Tell us about your book, James.

• 38:45Speaker 04

  Oh, it is a history of measurement. It is a sort of, you know, it's a history, it's a science book, it's a sociology book. It's where does, where do measurements come from? What do people do with them? And why do Americans hate the metric system so much? Those are the three big questions I tackle.

• 39:01Nilay Patel?

  It's very good. It's very funny. I bought, I bought, I have a British copy because I'm fancy.

• 39:06Speaker 04

  Oh, damn.

• 39:06Nilay Patel?

  I bought it early.

• 39:08Alex Cranz?

  I see.

• 39:09Nilay Patel?

  I bought an import.

• 39:10Alex Cranz?

  Yeah.

• 39:10Nilay Patel?

  I used to do a seven inches. I bought an import copy. You know, the US version has a bonus edition of Train in Vain at the very end. It's not labeled.

• 39:20Nilay Patel?

  All right, we've gone on too long. James, thank you so much. Always a pleasure.

• 39:24Speaker 04

  Oh, my pleasure. So nice to step in and yeah, speak to you guys later. Bye bye.

• 39:29Nilay Patel?

  We'll be right back. We got to talk about, well, we got to talk about Apple. There's all kinds of stuff. We'll be right back.

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• 40:41Nilay Patel?

  All right, we're back.

• 40:43Alex Cranz?

  Yeah, we're back. You know, Neelai, so we're here in the office, Neelai and I are, and I saw him hunched over his desk earlier today, just muttering FTC and Activision Blizzard. It sounds like there's some stuff happening with the Microsoft Activision Blizzard deal.

• 40:58Nilay Patel?

  Yeah, it's like the least breaking, breaking news of all time. I don't know how else to describe it. So the FTC filed a lawsuit.

• 41:07Alex Cranz?

  Right.

• 41:07Nilay Patel?

  There's some details about it that we should talk about, but Microsoft wants to buy Activision Blizzard.

• 41:12Alex Cranz?

  They've wanted to for a while now.

• 41:13Nilay Patel?

  Or Activiz.

• 41:14Alex Cranz?

  Activiz.

• 41:15Nilay Patel?

  Which makes Call of Duty.

• 41:16Alex Cranz?

  Yeah, they said, we're not going to touch it. We're gonna, we're just gonna let it do its thing. We promise everything.

• 41:22Nilay Patel?

  We'll talk about Call of Duty in a second. So they make Call of Duty, they make Candy Crush. They make all, Activision Blizzard makes all the money on Candy Crush, by the way. Phil Spencer was just on Decoder, talk about why the deal wasn't anti-competitive. Why it's so good. Even though Microsoft keeps buying every studio. Like, this is their third gigantic studio. Right. And they obviously make a bunch of other stuff. And so there's been all this back and forth specifically around Call of Duty. Yes. Right? Sony is like, you're gonna take Call of Duty away from the PlayStation. Gamers rise up, the gamers rose up. Microsoft is like, no. Phil Spencer, to us, to me, has said many times, we're gonna put Call of Duty on PlayStation as long as there's a Call of Duty.

• 42:03Nilay Patel?

  Then there was this, like, sidelight conspiracy theory, which was honestly my favorite conspiracy theory, that they would only do Call of Duty on PlayStation as like an Xbox Game Pass streaming situation. I love it. So Sony would be forced to Trojan horse the Game Pass streaming app on the PlayStation. You gotta support it. Call of Duty. So I asked about that. He got all riled up. He was like, no, native code. And I was like, how long is the deal? Initially, they'd only offered three years. And Phil told me, like, you can't write a contract forever, which is true. Right. Like, this is not legal advice. This is not a legal show. If you're listening to the show without your lawyer, you're making a mistake. Please, please drive immediately to the nearest lawyer's office to continue listening to the show. I'll just ask ChatGPT. Yeah. Yeah.

• 42:47Nilay Patel?

  Should you sign a contract whose term is forever? And I feel like very clearly the answer is no. Even ChatGPT will be like, don't do that. Don't do that. Like, no contracts are forever. So, fine, I get it. So then, Microsoft has been running around these past few weeks, trying to appease regulators in this country and in Europe, by saying, okay, we will commit to Call of Duty for 10 years. Okay. Which is an awful long time. Yeah. Like, they're gonna be out of major world conflicts to mine, and they will be fully in the future. They're already in the future. They're gonna have to get rid of, like, like, all the World War II Call of Duties are done for. Yeah, they're done. They went to the future, and they went back already.

• 43:27Nilay Patel?

  Call of Duty is like, they're just gonna be out of wars, or like, whatever. AI Call of Duty is where we're at. 10 years now. That was not good enough. It was not good enough for the CMA in Europe, which has already said, we're gonna stop it. We're starting an investigation. And then here, the FTC, Federal Trade Commission, has basically been rumbling at this for a long time.

• 43:49Alex Cranz?

  Yeah, just muttering to itself.

• 43:51Nilay Patel?

  Just like, we, and all this happened. So when I say there's some like, there's a little bit of interest.

• 43:55Alex Cranz?

  Yeah.

• 43:56Nilay Patel?

  They filed the suit, the lawsuit. We have not seen the complaint yet. The word on the street is they're not gonna release it until Microsoft is like, God, until Microsoft President Brad Smith is like, sat down with a snifter of brandy and like, read the complaint.

• 44:10Alex Cranz?

  Put his little smoking jacket on.

• 44:11Nilay Patel?

  But today, the day they said they're gonna do this complaint. Oh, and they also filed the complaint in their own administrative court, not in federal court.

• 44:19Alex Cranz?

  Okay.

• 44:20Nilay Patel?

  Which is like, tactically interesting. What do they actually want out of this? Do they actually wanna block the deal, or is it just a lot of bluster to get some concession? Who knows? But today, the same day, is the first day of the trial where the FTC is, has sued to stop Meta, Facebook, from buying Within, which makes Supernatural, which I have called the killer app for VR.

• 44:42Alex Cranz?

  It's, it's pretty killer.

• 44:44Nilay Patel?

  It's very good. So if you have a Quest 2, Supernatural is a fitness app, you like.

• 44:48Alex Cranz?

  It's Beat Saber, but you have to like, sweat.

• 44:50Nilay Patel?

  It's Beat Saber Peloton. Oh, they've added kicking.

• 44:53Alex Cranz?

  They added kicking?

• 44:54Nilay Patel?

  Yeah, knee strikes.

• 44:54Alex Cranz?

  All right, well, I got, I got some, the boxing is great. I like the boxing.

• 44:58Nilay Patel?

  I think I've told this story on the Verchess before. My wife did the boxing in Supernatural one time, grinned the whole time, then took off the headset and said, I'm great at boxing.

• 45:07Nilay Patel?

  That's what you want, right? So this thing's great. It sells a lot of headsets. Chris Milk, the CEO of Within, has been on Decoder. He's like, super, the Supernatural community is like 50/50 men and women, and it's people over 40, which is not a traditional VR base. Like, this is the thing, this app initiates people into buying a Quest 2, because it's good. So Meta said, screw it, we buy every other VR game, we're gonna buy Supernatural. They went and bought it. FTC sued them. This deal is like teeny tiny. They're buying this thing for like 20 bucks.

• 45:36Alex Cranz?

  Yeah.

• 45:36Nilay Patel?

  And it's an app for VR headsets.

• 45:38Alex Cranz?

  Yeah.

• 45:38Nilay Patel?

  A market size of six. Like, they're the biggest fish in a tiny, tiny, tiny pond. If the FTC is gonna block that deal, they basically had no choice.

• 45:49Alex Cranz?

  But to block.

• 45:49Nilay Patel?

  To block the Activision deal. It's like, right, obviously. Console gaming is much bigger. Activision itself is much bigger. Microsoft very opportunistically swept in because Bobby Connick's vision is like.

• 46:04Alex Cranz?

  Activision Blizzard has been facing some bad times.

• 46:08Nilay Patel?

  Like numerous allegations of like weird sexual misconduct across the company.

• 46:12Alex Cranz?

  Yep. A lot of people have been let go for misconduct. There's a lot of union organizing happening because of the misconduct. I would not want to work there right now. It seems really busy.

• 46:22Nilay Patel?

  Yeah.

• 46:23Alex Cranz?

  This is unpleasant.

• 46:25Nilay Patel?

  And so Microsoft very openly, like after this first wave of allegations, they just like showed up and they're like, wouldn't it be great if you didn't run this company anymore?

• 46:32Alex Cranz?

  Just give it to us.

• 46:32Nilay Patel?

  Give it to us. And so like, there's a lot of noise. If you're gonna, if you are the FTC and you have to, and you have sued to block Meta from like Supernatural, and by the way, that complaint, you know, I'm anti, I think mergers are bad, but the FTC's complaining that is like, we've tried Supernatural. It's a very good. You shouldn't have it, right? If you buy Supernatural, you will not turn Beat Saber into a proper competitor for Supernatural. And I think rightfully Meta, the Beat Saber team were like, what are you talking about? Like, in what world is Beat Saber turning into a Peloton?

• 47:07Alex Cranz?

  Yeah.

• 47:08Nilay Patel?

  Like, no, it's like.

• 47:09Alex Cranz?

  In the world of the FTC where they want.

• 47:12Nilay Patel?

  They have to find some reason. So they filed this, we have not read it. They filed it in this administrative court. They have said to Axios, or someone has said to Axios, they're not asking to actually like block the deal at this time. So the deal might still close. So they've sued to block the deal. So it shouldn't happen, but they've not asked their own administrative court to be like,

• 47:33Alex Cranz?

  Yeah.

• 47:34Nilay Patel?

  Don't let them do it. So there's a little nuance in there that I, without having read the complaint, I can't quite tell you about, and the complaint's not out yet, but you just get the sense that like, the Europeans are definitely on firmer ground when it comes to blocking mergers. That's like what they're good at.

• 47:49Alex Cranz?

  Yeah.

• 47:49Nilay Patel?

  And the FTC is like, we're also filing suit, and maybe what we want is some intensely hardcore concessions. And this is like calibrated to achieve that result while they go fight this other battle around Supernatural.

• 48:04Nilay Patel?

  In court where they, you know, Lena Khan's supposed to prove her theory.

• 48:08Alex Cranz?

  Cause the supernatural, that's not in the administrative law court.

• 48:11Nilay Patel?

  That's in court, court, court.

• 48:12Alex Cranz?

  Yeah.

• 48:13Nilay Patel?

  And, you know, there's other cases against Facebook and others that she has filed. She's the chairwoman of the FEC. She's got novel theories about competition. And I, again, completely honest, like, I agree with most of her theories. The courts in this country are like, that's new. New ideas, you say? No, thank you.

• 48:32Alex Cranz?

  They don't understand what a phone is.

• 48:33Nilay Patel?

  They're deeply confused about how some of this technology works. And in particular, like, network effects and like, how you might lock people in. So, and we're seeing this with Apple and Epic, right?

• 48:44Alex Cranz?

  Mm-hmm.

• 48:44Nilay Patel?

  Like, there's just some baseline confusion about what creates lock-in for a consumer.

• 48:50Alex Cranz?

  Yeah.

• 48:50Nilay Patel?

  Or where anti-competitive in these markets might come from. And then there's the real problem, and this is particularly true to Apple and Epic and some of these other cases, where the, our country in particular, for about 40 years, has been like, mergers? Great.

• 49:04Alex Cranz?

  Love a merger.

• 49:05Nilay Patel?

  Love a merger.

• 49:06Alex Cranz?

  Bigger than better.

• 49:07Nilay Patel?

  You should buy some shit.

• 49:08Alex Cranz?

  Yeah.

• 49:08Nilay Patel?

  Right? And so you've got to just overcome a lot of precedent to, to block a merger. So I, I just see, like, I see where this case is calibrated. And I see that the Europeans want to block it too. And what we'll just see, I don't know, do you think it's gonna, like, Microsoft is like, running after it? And again, you should listen to the conversation I had with, with Phil about it on Decoder. He made his case.

• 49:29Alex Cranz?

  Yeah.

• 49:29Nilay Patel?

  Right? And it's very funny when a big company wants to buy something. The case is always, but we suck.

• 49:35Alex Cranz?

  Yeah, we suck so much. Let us buy this.

• 49:38Nilay Patel?

  This market is so competitive, we've been getting our ass kicked. We're nowhere in mobile games. We need to buy Candy Crush.

• 49:44Alex Cranz?

  Yeah.

• 49:44Nilay Patel?

  Call of Duty, you could have Call of Duty, the future's mobile, right? Like, go listen to it, it's, Phil is very good. The man was born to be the CEO of Microsoft. He's very, very good at that job. Yeah, and he's a candid executive, so you'll listen to it. But the argument basically boils down to if we don't grow, we die. And all the growth is in mobile, so we have to buy Activision so we can get mobile games.

• 50:08Alex Cranz?

  Yeah.

• 50:09Nilay Patel?

  And all the stuff we're talking about with our consoles is like kind of a sidelight.

• 50:13Alex Cranz?

  Which is, I mean, I don't because that's not their biggest market, right? Like Xbox is certainly a big part of Microsoft, but cloud computing is a much bigger part of Microsoft.

• 50:25Nilay Patel?

  Yeah.

• 50:26Alex Cranz?

  And so, so for them to say this, it's just like super disingenuous because like, yeah, they're a gaming company, but they're a cloud company first and foremost, even more so than than they're an operating system company or any of these other things like they do cloud computing. So to say this is just like some bullshit. I feel like.

• 50:44Nilay Patel?

  I mean, I honestly don't know where this is going to go. Like this is a, this is a big case. This is a generationally important and interest case.

• 50:52Alex Cranz?

  Yeah.

• 50:52Nilay Patel?

  Because there's, we just have not stopped deals like this as a country.

• 50:57Alex Cranz?

  I thought it was kind of interesting that we've seen Microsoft go on the spree around the same time that we also saw like one of the biggest kind of halts in vertical integration in the entertainment community go away, which was the Paramount decree that was like from the 30s that they, they got rid of a couple of years ago. And that Paramount decree said, if you are making the movies, you cannot own the theaters because that's really hinky because then you get to control where your movie screen.

• 51:22Nilay Patel?

  Yeah.

• 51:23Alex Cranz?

  And the exact like, we're dealing with that issue in streaming and we're dealing with it in gaming. If, if Microsoft is making the game consoles, they probably shouldn't also be making the games because then they control where those games go. And like, it's fundamentally the same thing, but I know that our country has said, yeah, consent Paramount's consent decree, don't need it. We're fine.

• 51:46Nilay Patel?

  Well, so to abstract that out, it's, it's usually like, you know, vertical versus horizontal mergers, right? And so we allow vertical ones or we have for the past 40 years, which is the theaters were the only distribution.

• 51:57Alex Cranz?

  Yeah.

• 51:58Nilay Patel?

  And if you own all the distribution, you have a lot of power over the studios. And so the studio should know the theaters because then the other student, they can unfairly

• 52:05Alex Cranz?

  Right.

• 52:06Nilay Patel?

  discriminate.

• 52:06Alex Cranz?

  Disney can say you will never see another MGM movie at our theaters again.

• 52:10Nilay Patel?

  And we own all the theaters. So they go, no, you can't do that. The theaters have to be competitive. You can like apply that lesson to the iOS App Store.

• 52:18Alex Cranz?

  Yeah.

• 52:18Nilay Patel?

  You can apply that lesson to Comcast, like whatever it is, like whoever owns the pipes of the distribution. Here, I think you're saying like the game consoles are the distribution.

• 52:27Alex Cranz?

  Yeah, the game consoles are the theater, right? Like, and they have a very robust big business there. If they're making the theaters, they probably shouldn't also be making the content that goes into those theaters. In this case, all of the games at Activision Blizzard, one of the largest gaming companies not currently owned by Microsoft, like, or Nintendo, existing.

• 52:48Speaker 03

  One thing that makes it a little more complicated is that generally the consoles are sold at a loss. They're not necessarily profiting on the actual consoles themselves, the

• 52:55Alex Cranz?

  Because they're profiting on those

• 52:56Speaker 03

  analogy.

• 52:57Alex Cranz?

  The game sales.

• 52:58Speaker 03

  They're making the profit on the games. And I guess Microsoft is claiming that they would love to make more money from games. So of course they'll sell Call of Duty on PlayStation or Nintendo or Steam, because everyone wants to play Call of Duty on Switch. That's, that's what you want.

• 53:10Nilay Patel?

  Yeah. By the way, Nintendo happily took the 10-year deal for Call of Duty.

• 53:13Alex Cranz?

  Yeah.

• 53:13Nilay Patel?

  No complaints filed, no, no letters to the senators. They're like, 10 years of Call of Duty on the Switch? We'll take it, because they don't give shit.

• 53:23Alex Cranz?

  Did that specify what kind of Call of Duty? Like, is it just going to be the mobile gross version that's on your phone?

• 53:30Nilay Patel?

  I don't think it matters to Nintendo. I think Nintendo knows

• 53:32Alex Cranz?

  Nintendo doesn't care.

• 53:33Nilay Patel?

  That anybody who owns a console also probably wants to play Mario.

• 53:36Alex Cranz?

  Yeah.

• 53:36Nilay Patel?

  And they've got an absolute rock solid legally defensible monopoly on Mario. And he's never going anywhere except Nintendo consoles.

• 53:45Alex Cranz?

  It is very funny that we're like, oh, I don't know if, if, if Microsoft can own Call of Duty. And Nintendo is like, we own everything on our platform. And we will destroy.

• 53:55Nilay Patel?

  But that's their model. I mean, they're the Apple of this industry and Microsoft is the Microsoft.

• 53:59Speaker 03

  But what I want to know is what kind of concessions could the FTC get? And, and I'm very specific about my needs. I need to be able to use controllers across, across platforms. I don't like buying I don't need dual I don't want to use dual since I just want to use my Xbox Elite Controller everywhere. So we need to fix that.

• 54:16Nilay Patel?

  Lena, if you're listening, step on.

• 54:19Speaker 03

  I need to be able to use my gaming headsets across every single platform. They need to all be compatible. We need to fix this. We need the online accounts and friends list to transfer back and forth.

• 54:27Nilay Patel?

  Just that cross play.

• 54:28Speaker 03

  Blockchain fixes this. I'm not saying that I'm the last person on Crypto Island now. And now that everyone else is running from it, I'm going to die on this hill alone. But the blockchain does fix this, just saying. So I think those are my concerns.

• 54:39Nilay Patel?

  You, okay, look, historically on the Vergecast, I have assigned Dieter many articles based on throwaway comments. Richard, welcome to your role as filling in for David while he's out in print leave. You gotta write the gamers, the gamers bill of rights. Like, what should the FTC ask for from a gamer's perspective?

• 54:58Speaker 03

  Yes.

• 54:59Nilay Patel?

  To make this deal go through. Get really nuanced about the skins.

• 55:06Nilay Patel?

  A gamer's demands.

• 55:07Speaker 03

  You should never have to pay for recolor again, ever. If it's not a new, completely new design, then you can't sell it. I should be able to get whatever colors I want. I'm just saying.

• 55:15Nilay Patel?

  This is great. We gotta, we gotta do this. If you have ideas for Richard, you can tweet it and you can email him. We're gonna put this together. We're send it to the FTC. Yeah. I'm never getting an FTC official on Decoder again. Like, it's never gonna happen. I think they'll see this and be like, oh, they get it. They get it. This is why we put it in an administrative law court. Look, I'm saying this is a generationally important antitrust case. Like, if they get this one through, what it will signal is, if the FTC wins this, let me say it, if the FTC wins this and they block this deal, it will signal competition law in the United States is changing. If they lose it, it means either someone promised Lena Khan controller interop, which maybe that's all we need. Or it means that, like, we live to fight another day. Yeah.

• 55:59Nilay Patel?

  And I will say that in this lame duck period of Congress, the big antitrust bills are on the floor. There's a lot of momentum around them, particularly the App Store interoperability bill. Like, there's, there's stuff, the Digital Markets Act, like, all this stuff. There's more antitrust noise. Yeah. Happening right now than has happened in a while. This lawsuit's a piece of it, the Meta Supernatural case, which again is a very small compared to the Activision deal. But it is a signal of where the government wants to apply pressure. And then there are the bills and huggers. So we'll see.

• 56:31Alex Cranz?

  We'll see. And I mean, other things we saw this week, we should probably talk about kind of related, but I'm gonna, I'm gonna go all the way back to how we talked about the EU is also suing.

• 56:41Nilay Patel?

  They're just nuts, man. They're just like eating cheese and being like, we got ideas.

• 56:44Alex Cranz?

  We got ideas and you will do them, including Apple. You will have USB C on your phones. And they set a deadline for that this week.

• 56:54Nilay Patel?

  December 28th, 2024.

• 56:56Alex Cranz?

  Yeah. So by December 28th, 2024, you will have new phones with the USB C for wired charging, including iPhones theoretically.

• 57:05Nilay Patel?

  Can I just say something about this? They're Europeans. They can't help themselves. Like the EU is so needlessly complicated and we have an amazing international team that is mostly based in Europe. Just heard from James. John Porter is our reporter who's been working on this story.

• 57:21Alex Cranz?

  Yeah.

• 57:22Nilay Patel?

  And like, he has basically written a version of the headline, European Union mandates USB C for phones. 500 times.

• 57:30Alex Cranz?

  And we make him do it again.

• 57:31Nilay Patel?

  And we make him do it again and again, mostly because it's like, interesting. We should track the story. We have a responsibility as journalists to accurately convey. And also because it's traffic gold. Like people see this headline and they lose their minds. Like, how can I click on this twice? And it's like, guys, we've written this story like every other week for five years. So he writes, he's excited.

• 57:53Alex Cranz?

  Yeah.

• 57:54Nilay Patel?

  We finally have a final official deadline for when new phones sold in the European Union, including future iPhones, will have to use USB C. And December 2024. The next paragraph. The new rules will officially enter into force in 20 days times. An individual EU member states will then have a maximum of 24 months to write national laws.

• 58:16Alex Cranz?

  No.

• 58:16Nilay Patel?

  It's like, oh, this still hasn't happened, has it?

• 58:19Alex Cranz?

  He's, we have to make him do one for every single country. Luxembourg, John, we have to know what Luxembourg voted on.

• 58:27Nilay Patel?

  It's like, oh, man, this still hasn't happened.

• 58:30Alex Cranz?

  It hasn't happened in Belgium. All right. It's done.

• 58:34Nilay Patel?

  This is just like fully ridiculous.

• 58:37Alex Cranz?

  He's got like a map in his house.

• 58:38Nilay Patel?

  It's like somewhere, someone in the EU like runs like a, like a traffic bait website. And they're like, let's stretch it out. Like, we know people love this story.

• 58:47Alex Cranz?

  Just as long.

• 58:48Nilay Patel?

  Another 24 months of USB C iPhone clicks.

• 58:52Alex Cranz?

  So good.

• 58:54Nilay Patel?

  It's good. So that's the date.

• 58:56Alex Cranz?

  That's theoretically.

• 58:57Nilay Patel?

  This sort of 2025 iPhone.

• 59:00Alex Cranz?

  iPhone 16? Well, because it says all new phones have to be using it by 2024. So that's not this year.

• 59:09Nilay Patel?

  The iPhone that gets announced in 2024.

• 59:11Alex Cranz?

  Will have to be USB-C.

• 59:13Nilay Patel?

  Right now, we're on the 14, which is the iPhone that was announced.

• 59:16Alex Cranz?

  2022.

• 59:17Nilay Patel?

  Yeah.

• 59:18Alex Cranz?

  So 15.

• 59:20Nilay Patel?

  Is 2023.

• 59:21Alex Cranz?

  And then 16 is 2024. So this will be the iPhone 16, should theoretically be USB-C, unless they decide to be like, you know what, EU? You don't get a phone this year.

• 59:33Alex Cranz?

  Never mind.

• 59:34Nilay Patel?

  We'll see. Importantly, you might recall that the UK is no longer in the European Union. Notably, the United States is not. I don't believe China is in the European Union. All gigantic markets for Apple.

• 59:50Alex Cranz?

  Unclear if China's in the European Union.

• 59:52Nilay Patel?

  Like, I'm not. I'm not a geologist.

• 59:54Alex Cranz?

  Yeah.

• 1:00:01Alex Cranz?

  Who knows what kind of rocks they got going on over there?

• 1:00:04Nilay Patel?

  It's been a long one. And also, I think James is drinking beer rubbed off of me. But I would say those are giant markets for Apple. They could make Lightning iPhones and USB-C iPhones. We don't know what they're gonna do.

• 1:00:14Alex Cranz?

  Just that one, they released like 500 of them, limited edition in Germany.

• 1:00:19Speaker 03

  And in Brazil, they still have to put the charger in the box.

• 1:00:21Nilay Patel?

  That's true. I got a real taste of Careful What You Wish For last week. So I went home for Thanksgiving.

• 1:00:27Alex Cranz?

  Yeah.

• 1:00:27Nilay Patel?

  You know, did the turn motion smoothing off on all TVs.

• 1:00:30Alex Cranz?

  First thing.

• 1:00:31Nilay Patel?

  Ran around fixing stuff in my parents' house, bought them the new Apple TV remotes.

• 1:00:36Alex Cranz?

  Yeah.

• 1:00:36Nilay Patel?

  So they had the old black ones. They were horrible. Whatever.

• 1:00:39Alex Cranz?

  Do they also have Scotch tape on theirs like my mom does?

• 1:00:42Nilay Patel?

  It's a long story. My parents finally shut down their AT&T U-verse cable boxes.

• 1:00:46Alex Cranz?

  Wow.

• 1:00:47Nilay Patel?

  It's a five-year victory. If you've been listening, you know, I've been working on this for five years. And they switched the cable company. Now they're doing all their TV through the Apple TV. Got rid of cable boxes, consolidated through months by the remotes.

• 1:00:56Alex Cranz?

  Yeah.

• 1:00:57Nilay Patel?

  Bought new remotes. Just went to Best Buy, pulled three of them off the shelf, came home, set them up, off we go. Little do I know that I bought two of the older Lightning remotes and one of the new USB-C remotes. So I get this is the most bizarre text from my dad, who's like, I'm using the kitchen TV. Is the plug different? And like, just out of context, they're like, what are you talking about? Like, is the plug in the wall?

• 1:01:26Alex Cranz?

  Did you buy a new TV from Europe?

• 1:01:27Nilay Patel?

  Why are you unplugging the TV? Like, just leave it. Let's stop it. So I'm like, what do you mean? And he's like, the plugs for the other two rooms work fine, but this one doesn't. And it's like, yeah, it's like, I'm at work. I'm like, different planet. I'm like, just call me, send me a picture. And he sends me a picture of the bottom. I'm like, you gotta be kidding. Like, this is, I asked for this. I asked for everything to be USB-C. And now there's one USB-C Apple device in my parents' house.

• 1:01:52Alex Cranz?

  Just one.

• 1:01:53Nilay Patel?

  And it is, it's like, the crime of the century.

• 1:01:56Alex Cranz?

  Did you try to explain to him they could use their phone as a remote? Because it doesn't work.

• 1:02:01Nilay Patel?

  No, absolutely not. And I told him that they could plug in this. When I say this is like a galaxy brain moment, I was like, just use the charger from your Chromebook. And they plugged it in there, and they're like, will, will it explode? Because you're just like, not, you're not supposed to do this.

• 1:02:17Speaker 03

  Benson Leung has a lot of evidence that that might happen. I'm just saying.

• 1:02:24Nilay Patel?

  But it was, I was like, oh, God, I asked, I asked for this.

• 1:02:27Alex Cranz?

  You did.

• 1:02:27Nilay Patel?

  I was like, Apple, make it all USB-C. And they're like, one out of three.

• 1:02:32Alex Cranz?

  That's what's gonna happen with the iPhones. You're gonna get both of them iPhones, and for some reason, one will be USB-C. And the other will not.

• 1:02:38Nilay Patel?

  Dealer's choice.

• 1:02:39Alex Cranz?

  Dad, you can charge with the Chromebook. Mom, you have to go find the remote.

• 1:02:45Nilay Patel?

  Yeah. All right, other stuff. Richard, what's going on with Elon this week? I feel like it's a very, we could go the entire show without talking about Elon and Twitter.

• 1:02:52Alex Cranz?

  Speedrun it, go.

• 1:02:53Speaker 03

  Not nearly as much as there has been before. Everyone else is trying to build their own Twitter. People who used to work for Twitter, other tech engineers, Tumblr, of course, Alex is always ready to be the new Twitter.

• 1:03:07Alex Cranz?

  They're ready.

• 1:03:08Speaker 03

  And so if you're looking for a better Twitter, there are options. I went back to Black Planet. I've had that account for 20 years. I'm never leaving.

• 1:03:17Speaker 03

  Meanwhile, at Twitter, Elon still somehow needs to try and make money from the company that he now owns. And his plan is this Twitter Blue subscription that he thinks everyone will pay for to be verified and to make sure that your tweets actually show up so that people can see them. The latest thing that we've heard is that if you purchase this from your iPhone, it might cost more, that it would cost $7 per month if you subscribe on the web, or $11 via the iOS app, and the one who's mentioned Google Play, I guess, doesn't really matter. But, you know, getting around the Apple commission that way, and that was the whole battle and back and forth that they had, that culminated with Elon going to see Tim Cook and reaching some kind of agreement. So maybe this is the outcome of that.

• 1:03:54Nilay Patel?

  So the public facts of this agreement are now, I think, well-known. So Apple had pulled back on its advertising spend, like most big companies had done, because they didn't know about the trust and safety.

• 1:04:03Alex Cranz?

  And they were the biggest advertiser.

• 1:04:05Nilay Patel?

  And they were the biggest advertiser. Alex Heath has pointed this out, Apple spends no money on Meta, just none. So no Instagram, which makes sense, they don't like each other.

• 1:04:13Alex Cranz?

  Yeah.

• 1:04:14Nilay Patel?

  So where's that money gonna go? It has gone to Twitter, so Apple's one of Twitter's biggest accounts. So Apple pulls back their advertising, Elon tweets, "Don't you support free speech in America?" Then there's this weird issue, which we still kind of don't understand, where Apple's like, "You've got to comply with our moderation rules for the App Store, or we're gonna pull you." Or they just remind, as they often do mafia-style.

• 1:04:36Alex Cranz?

  They just sat there with a baseball bat.

• 1:04:38Nilay Patel?

  They just drove up in front of the store, holding a rock, and they're like, "Mow away those windows, it would sure be a shame."

• 1:04:44Alex Cranz?

  Wouldn't want anything to happen to him.

• 1:04:46Nilay Patel?

  So Elon gets mad, Tim Cook summons Elon. Oh, and Elon gets mad about the 30% tax.

• 1:04:53Alex Cranz?

  Yeah, yeah.

• 1:04:54Nilay Patel?

  Which he's been mad about for a while.

• 1:04:55Alex Cranz?

  He's suddenly discovered, he was like, "Guys, I have brand-new information. There's a 30% tax."

• 1:05:01Nilay Patel?

  But, we talked about this last week, a bunch of Republican congresspeople get all up in arms, anti-trust bill becomes a threat, Tim Cook summons Elon.

• 1:05:09Alex Cranz?

  Say, "Cool it."

• 1:05:10Nilay Patel?

  To the spaceship. We don't know what the deal was.

• 1:05:12Alex Cranz?

  Yeah.

• 1:05:13Nilay Patel?

  He leaves. But now it's publicly revealed, Apple's ad spending has gone back up, and Elon has agreed to up the price of Twitter Blue on iOS, 30%. So it's like, oh, you just, Apple's paying you the money in ads, and then you're gonna pay it back to them in App Store fees. That is the deal that the most genius business people of our time have constructed.

• 1:05:34Alex Cranz?

  Nailed it.

• 1:05:35Nilay Patel?

  Here's what we're gonna do. We're gonna start advertising on Twitter again, increase your revenue. And then when you launch your paid product, which you want to be 50% of Twitter's revenue, 30% of that will come right back to the old spaceship.

• 1:05:45Alex Cranz?

  Yep.

• 1:05:46Nilay Patel?

  Tim's like, "All right, you good? I've gotta go do some supply chain stuff." And Elon left. Like, that appears to be the deal.

• 1:05:53Alex Cranz?

  Yeah.

• 1:05:54Nilay Patel?

  That is all, and that the advertising information is directly from Elon. We will see what the price of Twitter Blue is when it comes out, but all indications are-

• 1:06:02Alex Cranz?

  When it returns.

• 1:06:03Nilay Patel?

  When it returns. But all indications are it will be priced at 30% above the web price to account for that fee. And as we all know, most things, Apple collects that fee because most of the money is made on the phone.

• 1:06:16Alex Cranz?

  Yeah.

• 1:06:17Nilay Patel?

  A beautiful circle.

• 1:06:18Alex Cranz?

  I love it. Like, it's as beautiful a circle as the spaceship itself. I'm sorry.

• 1:06:23Nilay Patel?

  You did it.

• 1:06:24Alex Cranz?

  I did it.

• 1:06:25Nilay Patel?

  The modern economy-

• 1:06:25Alex Cranz?

  You know what? Let's, let's talk about Apple some more. Let's, let's, let's get away from talking about Elon.

• 1:06:30Nilay Patel?

  There's good Apple stuff.

• 1:06:30Alex Cranz?

  There's good Apple stuff. Yeah. We got, so Apple announced a bunch of encryption stuff this week, right? Richard, I think you were watching it, like, in it, in the weeds on this?

• 1:06:39Speaker 03

  Yes, this was a bit of a surprise, but it is major, major news. And I'm not sure if everyone, when you see this, if you understand exactly how big this is. But a lot of the people who pay attention to security and privacy on our devices on the internet, see this as one of the biggest announcements that they'll hear, I guess, around this time of the year. What Apple has done is that they've announced a number of security announcements. And one of the most impactful ones is an optional program that they're calling Advanced Data Protection. If you opt into it, then it expands the number of data categories, as they, they call them, that are protected by end-to-end encryption. And they've always talked about how they have end-to-end encryption on a lot of things, so that no one can really spy on your data, even on Apple's end. If the government asks them to give it up, they can't, because they don't have access to it.

• 1:07:23Speaker 03

  It can only be decrypted on your device.

• 1:07:25Alex Cranz?

  Right.

• 1:07:26Speaker 03

  But that did not apply to iPhone backups. So while something like iMessage might be encrypted end to end, and they they kept saying that it is, if you or the person you're messaging has a backup of their iPhone that is then uploaded to the iCloud servers, if, for example, if somehow someone accessed your account, or if they got a warrant from the government to access it, they could simply access the unencrypted data very easily.

• 1:07:48Alex Cranz?

  Right.

• 1:07:48Speaker 03

  And that won't be possible once this rolls out, because, you know, your iPhone backups will be one of the categories that are now protected by encryption, which is just a very significant change, and one that the FBI, now this has been announced, has said that they are not happy about.

• 1:08:03Nilay Patel?

  Yeah.

• 1:08:04Speaker 03

  Rather predictably.

• 1:08:05Nilay Patel?

  Apple famously fought a huge battle with the FBI in 2016.

• 1:08:08Alex Cranz?

  The San Bernardino shootings, right?

• 1:08:10Nilay Patel?

  Around unlocking the shooter's phone. The FBI has wanted a backdoor to encryption. Apple has famously said no. The most interesting turn of this story, which we need to learn more about, is, was it last year?

• 1:08:23Alex Cranz?

  Were they?

• 1:08:24Nilay Patel?

  Earlier this year.

• 1:08:25Alex Cranz?

  The CSAM thing?

• 1:08:25Nilay Patel?

  The CSAM thing. Apple was announced, it was last year.

• 1:08:28Speaker 03

  Yeah, late last year, they announced these changes to CSAM where if you were backing up a photo on iCloud Photos, it would then scan the photo while it's still on your device, not on Apple's, not on the servers, and, you know, kind of create a hash, a hash of it, and try to match that to known child sexual abuse imagery, and alert someone if it finds that.

• 1:08:48Alex Cranz?

  And everybody was mad about it.

• 1:08:50Speaker 03

  And, yeah, privacy, security, everyone was very upset about this, because it's kind of, A, it's a slippery slope. Now you're doing scanning on people's personal devices. B, if those hashes, if someone somehow gets something into the database, that's like, we're looking for government documents, you know, now suddenly your phone is leaking that information. There are a number of bad outcomes here. And now Apple has said that that program is dead. They're not going to do it.

• 1:09:14Nilay Patel?

  Yeah, and I, I think longtime listeners of this show will recall, Apple was real shady about all of that when it rolled it out. They rolled it out, it wouldn't tell us who the researchers were. All of its communications were like, unsourced.

• 1:09:29Alex Cranz?

  They're like, just enjoy it. It's gonna be great. Just shut up.

• 1:09:32Nilay Patel?

  They were holding these briefings without telling anybody who anybody was talking to.

• 1:09:35Alex Cranz?

  Yeah.

• 1:09:36Nilay Patel?

  And they had basically courted all this controversy. And then they said, we're putting it on pause. And the trade off, I want to be clear, the trade off that Apple was trying to make on paper was a good trade off, which is we want to protect your data as much as we can. We want to keep the government and the cops out of our servers. We want to protect your privacy, but we know that bad people do bad things. And the category of bad things that everybody agrees on without any shadow of a doubt is CSAM. So we're going to build in a somehow privacy respecting feature that scans your phone for this material before it hits our servers. And that that way we can encrypt what's on the servers. We can encrypt iCloud.

• 1:10:21Alex Cranz?

  Yeah.

• 1:10:22Nilay Patel?

  Because Google, Microsoft, every other cloud service is scanning their data stores for CSAM.

• 1:10:28Alex Cranz?

  Right.

• 1:10:28Nilay Patel?

  They're all doing it like, and they should. Everyone agrees that this is a bad thing. Apple's like, we want to go one step farther and encrypt the backup. So we can't read it because our other choice is to do whatever it else does and scan iCloud.

• 1:10:40Alex Cranz?

  Yeah.

• 1:10:41Nilay Patel?

  So they're like, okay, we'll move this scanning to your phone. And again, on paper, this trade off makes some kind of sense.

• 1:10:48Alex Cranz?

  Yeah, I think in a vacuum, I think like if you're sitting in a room with a bunch of people who've been working on this problem for years, which I assume was happening at Apple. You say this and you go, yes, awesome, perfect. And then they didn't actually check with anyone else until right before. I think they like, they reached out to the EFF and a couple of other folks right before they were going to do it. And they're like, we're going to do this. And they were all like, cool, you waited way too late. This is a terrible plan and everything about it is bad. Cause you were still create fundamentally creating a backdoor into people's devices. And anybody with access to this database can really misappropriate it and use it.

• 1:11:24Nilay Patel?

  Yeah. And we have episodes of Decoder and the Verchess like in the controversy of why it was bad. But that was the trade off, right?

• 1:11:31Alex Cranz?

  Right.

• 1:11:31Nilay Patel?

  Everyone assumed that Apple was rolling out the scanning feature so they could get to the desired end state of encrypted iCloud.

• 1:11:39Alex Cranz?

  Yeah.

• 1:11:40Nilay Patel?

  It's a year later, they've rolled out encrypted iCloud and they are canceling the phone scanning.

• 1:11:47Nilay Patel?

  Which is utterly fascinating to me.

• 1:11:49Alex Cranz?

  And they also added another thing, which I thought was really interesting because one of the responses to this was, well, if you create this database that is like managed by the government, then other governments can misuse misuse this database. And one of the things they also announced this week was like, they claimed that iMessage can possibly alert you if state sponsored spies are eavesdropping on you. And it's like, okay, so y'all just went hard in the other direction to say, no, fuck the police.

• 1:12:19Nilay Patel?

  Good. That's Tim Cook.

• 1:12:20Alex Cranz?

  Yeah.

• 1:12:21Nilay Patel?

  When I think of Tim Cook, I think of a man saying, fuck the police.

• 1:12:24Alex Cranz?

  Yeah, immediately. First thing I think of. But that was like, kind of surprising to me that they went that hard in the other direction. And I keep thinking about like, a lot of these conversations we had last year about this was about China and specifically how China could potentially use this database. And now like, we know.

• 1:12:41Nilay Patel?

  So Joanna Stern at the Wall Street Journal, notable Verge expat, Joanna Stern, our mole at the Wall Street Journal.

• 1:12:49Alex Cranz?

  Here's the deets.

• 1:12:50Nilay Patel?

  At the Journal, they're always detecting that they have a, they have a leaker.

• 1:12:55Nilay Patel?

  The Verge has infiltrated us once again. But Joanna Stern got the big exclusive with Craig Federighi. You should go watch her video with him. She asked him a question about China and our man just deferred.

• 1:13:05Alex Cranz?

  Yeah.

• 1:13:05Nilay Patel?

  Did not answer the question about whether iCloud backups in China would be encrypted. In China, the government, the Chinese government effectively controls the iCloud data centers.

• 1:13:14Alex Cranz?

  Yes.

• 1:13:15Nilay Patel?

  So, Apple will always kind of make in its concessions for the, I've been told China's not in the EU, but always making concessions for its large market. Obviously, there's a lot going on in China recently. We've not talked about it on the show very much. There are large scale protests about COVID lockdowns. There are protests at the Foxconn factories where Apple makes the phones, or Apple production slowdowns for its phones. Just quite a lot going on in China.

• 1:13:39Alex Cranz?

  And you've seen, you've also seen Apple make some really deliberate attempts to move away from, from China, particularly in the, in manufacturing. They've asked Foxconn, they've asked these other manufacturers they work with to move, to get out of there, to like, go to India, to, to go to, I think.

• 1:13:56Nilay Patel?

  Arizona.

• 1:13:56Alex Cranz?

  Arizona. Yes, speaking of, and they're asking him to move to these other places. And I'm going to use that as a segue to talk about Arizona. Thank you, Richard, laid that up for me. Because the other big news this week from Apple was that they're going to start making chips for iPhones in Arizona, these new fabs that TSMC just opened.

• 1:14:18Nilay Patel?

  Yeah, so TSMC, I want to give TSMC credit.

• 1:14:20Alex Cranz?

  Yes.

• 1:14:21Nilay Patel?

  Is the person who is dunked on Foxconn lying to the people of Wisconsin the most?

• 1:14:26Alex Cranz?

  They did not build a big globe.

• 1:14:27Nilay Patel?

  They did not. TSMC took a bunch of tax subsidies, lobbied their way into the Chips Act, which is going into effect, and they have actually built fabs in Arizona. The fabs are going to start producing chips in 2024. The ceremony that we saw with AMD, Nvidia, Tim Cook, Biden, they're all there, was the installation of fab equipment. It was not golden shovels.

• 1:14:51Alex Cranz?

  I'd love it.

• 1:14:52Nilay Patel?

  Amazing. And they're going to add a second site in 2026. Liam looks so happy. So just congrats to TSMC for doing a thing they said they were going to do.

• 1:15:00Alex Cranz?

  Yeah.

• 1:15:01Nilay Patel?

  And they're going to do it. And so Tim Cook has promised that the chips, they're going to make M-series and A-series chips there. AMD and Nvidia are going to build chips there. It's a 3-nanometer node.

• 1:15:11Alex Cranz?

  Yeah. Yeah. I mean, this is like, this is the stuff that's really hard to make. You know, Intel has, Intel's trying to get their own fabs online so that they can jump into this space. But TSMC kind of owns the market on these really small nodes. And, and so this is, this is big news because we haven't had a node this small, built in the United States in a while. It's primarily been built in Taiwan. And I'm going to be really, like, it should create jobs theoretically. It should make that, like, the Chips Act make more sense. And, and suddenly you're, instead of like having to, like, Intel will have a new resources for hiring, right?

• 1:15:49Nilay Patel?

  Yeah.

• 1:15:49Alex Cranz?

  If this TSMC fab goes online.

• 1:15:53Nilay Patel?

  It's cool news. We sent our reporter Andy Bly down to cover it, took photos, whole thing. Go read the report. They actually did it.

• 1:15:59Alex Cranz?

  Yeah, they did.

• 1:16:00Nilay Patel?

  Now, is it as fun to cover as an empty dome and lies?

• 1:16:05Alex Cranz?

  We'll see.

• 1:16:06Nilay Patel?

  More important to the global economy.

• 1:16:07Speaker 03

  From a content perspective, it was pretty much a film. I think.

• 1:16:11Nilay Patel?

  I'm like, where's your dome, bro?

• 1:16:13Alex Cranz?

  Yeah. Failure of content, but you know.

• 1:16:16Speaker 03

  Before we get off of Apple, I do want to mention, they made other security announcements. Like you can use, you'll be able to use hardware keys to secure your iCloud account. You'll be able to do this kind of key verification, which you're referencing Alex, that will enable that or potentially enable that ability to see if someone's trying to spy on your conversation. It makes it a lot more like Signal or like using PGP and email or something like that. So there are other, there are also other important security announcements that they made that are there. And they also made a very strange change. They're going to roll out globally this change that rolled out in China during the protests where when you turn on airdrop, I think to receive files, you'll only be able to do it for 10 minutes, which makes it a little bit harder to use this strategy that people have been using

• 1:17:01Speaker 03

  to distribute, you know, information that the government doesn't want to get passed around.

• 1:17:05Alex Cranz?

  I just share gritty photos.

• 1:17:06Nilay Patel?

  Oh my God. That's it. We were so, we're already over.

• 1:17:09Alex Cranz?

  We gotta cut to break. We gotta, we gotta.

• 1:17:11Nilay Patel?

  Liam's losing his mind back here. Don't be nice to Liam.

• 1:17:15Alex Cranz?

  Everyone be nice to Liam.

• 1:17:16Nilay Patel?

  There's no clock this time. There's just a sense of shame that pervades this room because we are at 90 minutes already and we have another second to go.

• 1:17:25Alex Cranz?

  We're having a great time.

• 1:17:25Nilay Patel?

  We're gonna be right back. We got a gadget lightning round. We'll be right back.

• 1:17:32Speaker 06

  If you're looking to hire, you need Indeed. With Indeed sponsored jobs, you can spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. And listeners of this show will get a $75 sponsored job credit to help your job get the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed sponsored jobs.

• 1:18:16Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. This week, as part of our special series on the future of business, I talked with Matthew Prince, co-founder and CEO of Cloudflare, about how AI bots and agents are remaking the business model of the web, and how Cloudflare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 1:18:37Speaker 08

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, "You won't believe it, but automated traffic is now past human traffic online." And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be 1,000 times human traffic online.

• 1:19:02Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts. This series is presented by EY.

• 1:19:21Nilay Patel?

  All right, we're back. This is gonna be a lightning gadget.

• 1:19:24Alex Cranz?

  Lightning of lightning rounds. It's all right. There wasn't a lot of gadgets this week.

• 1:19:27Nilay Patel?

  Go for it.

• 1:19:28Alex Cranz?

  Okay, so first up, this is my favorite thing ever released in the history of the world, Huawei's latest smartwatch.

• 1:19:34Nilay Patel?

  This is so tough.

• 1:19:36Alex Cranz?

  Has earbuds in it. So you can be like, "Oh, I gotta listen to this call," and just go boop, and flip the top of your smartwatch.

• 1:19:43Nilay Patel?

  This is just a digital watch. It's not a smartwatch. This is a black and white segment LCD display.

• 1:19:49Alex Cranz?

  You know, it's got weather, it's got heart rate. I'm calling it smart. It's smart.

• 1:19:56Nilay Patel?

  No, no, no, that's just a face. That's just a face.

• 1:19:58Alex Cranz?

  And what is smarter than having built-in earbuds? Wireless earbuds that you can just pop out, stick in your ear. They announced it on Weibo, which is a Chinese network and they're called the Huawei WatchBuds. They've already launched, just not in America.

• 1:20:17Nilay Patel?

  Wait, okay. First of all, WatchBuds is an incredible name. Second, why would they demo this with this face that's like a 1982 Casio segmented?

• 1:20:27Alex Cranz?

  Cause it's sick.

• 1:20:29Nilay Patel?

  I will admit, they got me.

• 1:20:30Speaker 03

  Because, because they know that I'm the person.

• 1:20:34Alex Cranz?

  Richard, have you already imported it?

• 1:20:35Speaker 03

  And directly at me. They were like, yes. They knew, they knew.

• 1:20:38Nilay Patel?

  Can we talk about the most important gadget of the week, which is the $950 Dyson Combo Platter Headphones and Air Purifier like mask?

• 1:20:47Alex Cranz?

  Liam and I immediately looked, V Song was in the office today and we looked at her and we're like, you're getting it, right? She's like, I'm gonna try. I want nothing to be reviewed more.

• 1:20:55Nilay Patel?

  Okay, my favorite kinds of companies in the world are companies that have like one piece of technology and they're like, what can we do with it?

• 1:21:04Alex Cranz?

  Dyson's like wind.

• 1:21:06Nilay Patel?

  Yeah, Dyson's like, here's what we did. We made a fan.

• 1:21:08Alex Cranz?

  Sick ass fan.

• 1:21:09Nilay Patel?

  The fan can both suck and blow. And for like 10 years, so like we're deeply focused on suck. Like what have you guys seen in our vacuums? That's just a fan going this way. And then kind of like recently.

• 1:21:24Alex Cranz?

  Went the other way.

• 1:21:25Nilay Patel?

  Switch that motherfucker to blow.

• 1:21:27Alex Cranz?

  Reverse, baby.

• 1:21:31Nilay Patel?

  Fan, here's the hair dryer.

• 1:21:33Alex Cranz?

  I used it today before the show. It's great.

• 1:21:38Nilay Patel?

  They're like, here's what we do fans. They, for a minute, they're like, we're gonna do cars. And then I think they realized like.

• 1:21:46Alex Cranz?

  Cars don't run on fans.

• 1:21:47Nilay Patel?

  They're like, well, it's not a climate control fan. Does anyone know how to do any other part of the car?

• 1:21:53Alex Cranz?

  They should start doing the hover, the hover.

• 1:21:55Nilay Patel?

  They should do the hovercraft.

• 1:21:58Nilay Patel?

  And now they're like, all right, what's what can we put a fan into? And they're like headphones.

• 1:22:06Nilay Patel?

  Like, it has to be. There was a meeting where they're like, what else can we put fans into? The car didn't work. We need an idea.

• 1:22:13Alex Cranz?

  And you know what's really sad? Party speakers were right there.

• 1:22:19Nilay Patel?

  They're coming. And someone was like, I got it. Headphones. And there was a blank stare in the room. And they're like, you just wait and see.

• 1:22:26Alex Cranz?

  But with a mask on the front.

• 1:22:28Nilay Patel?

  And it's, I mean, you just have to see, I'm buying these so much.

• 1:22:33Alex Cranz?

  You're gonna spend $949?

• 1:22:36Nilay Patel?

  The best problem with them is that they're vaporware. The best part of them is that they're vaporware.

• 1:22:42Alex Cranz?

  Says, it says you'll be able to preorder.

• 1:22:44Nilay Patel?

  You can only, they went out like a year ago.

• 1:22:47Alex Cranz?

  But you can start pre-ordering next year. Not even there. No, next year. I, I think, I think they've, they've got a shot.

• 1:22:56Nilay Patel?

  They're, I mean, they're, they're great. This is the only gadget worth buying. I'm just excited to see what else Dyson can put a fan into. I mean, the fact they were like, we're gonna do cars. And then they're like, mm, not enough fans.

• 1:23:08Alex Cranz?

  Not enough fans.

• 1:23:09Nilay Patel?

  Or plan for a wind powered car.

• 1:23:11Alex Cranz?

  Like, air conditioners? Have you considered the air conditioner? No, no, they just, they're like headphones?

• 1:23:17Nilay Patel?

  Yeah, headphones.

• 1:23:18Alex Cranz?

  This is it. What about shoes?

• 1:23:20Nilay Patel?

  Very good, very good. Uh, what else you got?

• 1:23:23Alex Cranz?

  All right. What else do we got? Uh, we, I believe Allison did a review of the Amazon Echo Auto. I refuse to say it the other way. Uh, she wasn't a fan.

• 1:23:35Nilay Patel?

  This thing still makes no sense to me. I don't know why you would want an Echo Auto.

• 1:23:39Alex Cranz?

  One of the bad things was Alexa isn't very helpful in a car. Because yeah, Alexa isn't very helpful in a car. There's no smart lights in a car to control. You can just hit a button to play music.

• 1:23:52Nilay Patel?

  Well, so I think what they know is that people have a lot of ideas in cars while they're driving around. Right, like, again, on paper, imagine the meeting. Like, what do people want to do in the car? They want to play music? What is the number one use of Alexa? People ask for music.

• 1:24:05Alex Cranz?

  Yes.

• 1:24:06Nilay Patel?

  I don't know how many timers people set in their cars. This is number two.

• 1:24:10Alex Cranz?

  Every time I'm trying to like make that, that, that, get the miles, right? You know, I'm like, all right, set a timer.

• 1:24:16Nilay Patel?

  Set a timer for five minutes.

• 1:24:17Alex Cranz?

  They gun it.

• 1:24:18Nilay Patel?

  All right, fair. We're all different.

• 1:24:20Alex Cranz?

  Never done that.

• 1:24:21Nilay Patel?

  You should start.

• 1:24:21Alex Cranz?

  I'm going to.

• 1:24:22Nilay Patel?

  So like, okay, people want to ask for music. We can add the thing for music. And then maybe when they're driving around, they'll be like, you should buy some paper towels. Oh, I forgot to buy paper towels. Alexa, buy some paper. Like you, you can see the thought process.

• 1:24:32Alex Cranz?

  Yeah. And then they remember that nobody actually will ever do that.

• 1:24:37Nilay Patel?

  It's a real problem.

• 1:24:38Alex Cranz?

  It's a real, like, it's just bad. I love like all of her, her problems with it, where it's like, yeah, Alexa's just stupid to have in a car.

• 1:24:49Nilay Patel?

  They gotta add chat GPT to it.

• 1:24:51Alex Cranz?

  Yeah.

• 1:24:51Nilay Patel?

  Or a fan.

• 1:24:53Speaker 03

  It's, it's also like that weird Spotify thing in that you still pretty much need your phone, but you can just do this stuff with your phone.

• 1:25:00Alex Cranz?

  But the Spotify one, you can at least like connect to your computer and make a new controller.

• 1:25:04Speaker 03

  It had a knob. It had a knob.

• 1:25:05Alex Cranz?

  Yeah, it had the knob. Put a knob on this. I bet it would have gone up to a seven. Allison would have loved it.

• 1:25:11Nilay Patel?

  Anything with a giant rotary knob always wins for us.

• 1:25:14Alex Cranz?

  Anything.

• 1:25:15Nilay Patel?

  Okay, what are these watches? The Coros Apex 2?

• 1:25:19Alex Cranz?

  Yeah, so V reviewed some, some new multi-sport watches. She, she liked them. They didn't have a knob on them, but she still gave them a seven. They're, they're pretty expensive, but I think the big thing here is that really good battery life. They're, they're really for runners. They're really for people who are like, they go outdoors. I'm not familiar with these kinds of people, so I can't say if this is a good purchase for people, but Victoria does in fact go outside on a regular basis and, and she, she seemed to like them.

• 1:25:48Nilay Patel?

  All right, we gotta talk about the Symphoniesque floor lamp.

• 1:25:51Alex Cranz?

  Symphoniesque.

• 1:25:52Nilay Patel?

  It's amazing that they just added legs to it and changed the shade.

• 1:25:56Alex Cranz?

  What if it was taller?

• 1:25:57Nilay Patel?

  I'm so ready to get these.

• 1:25:58Alex Cranz?

  Yeah.

• 1:25:59Nilay Patel?

  And just be like, everywhere in my home, there are tiny lamp speakers. And I don't know why. I don't know why I feel this way.

• 1:26:06Alex Cranz?

  Cause you want your home to be like, one of those really fancy rich people's homes where you're like, where's that music coming from? Like when you go to the Apple campus?

• 1:26:14Nilay Patel?

  It's these lamps!

• 1:26:15Alex Cranz?

  And you're like, where is that? Is that music coming from a rock? Now it's your lamps.

• 1:26:18Nilay Patel?

  So it's 260 bucks. The standard lamp seeker is $179. So it's an $80 premium for some legs.

• 1:26:26Alex Cranz?

  So you could just put it on something tall?

• 1:26:28Nilay Patel?

  Yes, this is a choice that you have.

• 1:26:30Alex Cranz?

  Okay.

• 1:26:30Nilay Patel?

  I'm very excited about just the idea. I, I think the CES is gonna be, Richard, I, Richard and I used to cover like, see, like we were in the weeds of CES together. Like back in the day.

• 1:26:41Alex Cranz?

  Yeah.

• 1:26:41Nilay Patel?

  Right? Like I remember, like when Panasonic, like Pioneer and Panasonic would like demo plasma TVs to us. Like that's how Richard and I came up. Right? I remember the HD DVD Blu-ray format war that Richard and I covered together.

• 1:26:54Alex Cranz?

  Aww.

• 1:26:55Nilay Patel?

  And so see. When we were on, I was on the plane on the way to CES, when they announced that it was over.

• 1:27:02Nilay Patel?

  We were like, we were like, gear is trumped. This is the year of the format war. And they're like, uh, HD DVD is dead. They had to tear down the booth. At CES is a real thing that happened. In the dead of night.

• 1:27:12Alex Cranz?

  While you were there?

• 1:27:13Nilay Patel?

  Yeah, they were gonna, it was gonna be the year of the format war.

• 1:27:16Alex Cranz?

  And it's.

• 1:27:17Nilay Patel?

  Between HD DVD and, and Blu-ray.

• 1:27:19Alex Cranz?

  And Toshiba said, no, we're done.

• 1:27:21Nilay Patel?

  And then Toshiba just. They were just like, they got there, they looked around, they're like, what if we just like hung out in Vegas?

• 1:27:28Alex Cranz?

  Same. Honestly, same. I do not judge you one bit.

• 1:27:32Nilay Patel?

  Since then, there's not been a lot of drama at CES, I would say. But I, CES is always a TV show. I would say this is the year where I'm expecting to see like some interesting TVs and a lot of like really wild atmos, like film theater ideas. It's coming.

• 1:27:46Alex Cranz?

  I, I would like that.

• 1:27:47Nilay Patel?

  And these like Sonos wireless rears as lamps is like, it's just the beginning. It's just the drop.

• 1:27:54Alex Cranz?

  It works with Sonos, but it's Ikea lamps.

• 1:27:56Nilay Patel?

  Yeah. They're out ahead of the flood.

• 1:27:59Alex Cranz?

  Yeah.

• 1:28:00Nilay Patel?

  Like this is

• 1:28:01Speaker 03

  Well, I think what we're gonna see is we've got these engineers who they we obviously had the pandemic and everybody suddenly was stuck at home. You have these engineers who were at their house all the time. The stuff that they built is finally coming. It's going to get strange. Just roll with it.

• 1:28:14Alex Cranz?

  And not a single one of them knows what a good lamp looks like.

• 1:28:18Nilay Patel?

  And I'm just saying, this is like they're out ahead of the CS rush. They announced some stuff. You can't buy it now. It's not until January. So this isn't like stocking stuff or stuff. Although the idea of a speaker lamp in your stocking is incredible.

• 1:28:28Alex Cranz?

  What's that giant eight foot tall box in my

• 1:28:31Nilay Patel?

  Christmas.

• 1:28:33Alex Cranz?

  What could it be?

• 1:28:34Nilay Patel?

  So they're just out ahead of the flood.

• 1:28:35Alex Cranz?

  Yeah.

• 1:28:36Nilay Patel?

  And I'm telling you, this is the first drop of CES crazy. It's coming.

• 1:28:40Alex Cranz?

  The speakers, the year of the speakers in chat GPT.

• 1:28:43Nilay Patel?

  Richard, do you know anything about this DJI mini three drone? I'm in the market for another drone that I'll never use, and this feels like it.

• 1:28:49Speaker 03

  I that that's the only thing I think about is buying drones that I never actually fly because I bought a DJI. I don't even remember what the name of it is. I have a phantom.

• 1:28:58Nilay Patel?

  Oh, my God. You're like a phantom three or phantom four. You're a maniac.

• 1:29:03Speaker 03

  Three.

• 1:29:03Nilay Patel?

  I I bought a phantom four that I never flew. I sold it when I had a kid. I was like, I gotta get ready for this baby. And Peggy's like, I read on the house. And I was like, I sold the drone.

• 1:29:15Alex Cranz?

  That's the verge equivalent of I got rid of the motorcycle for you. These fingers are safe now. I can pick up our child.

• 1:29:23Nilay Patel?

  She's like, great. Are you gonna help?

• 1:29:27Nilay Patel?

  She's like, I am making the child.

• 1:29:29Speaker 03

  But you can buy and never actually fly anywhere.

• 1:29:32Alex Cranz?

  Well, this is an expensive drone, though. Eight hundred fifty nine.

• 1:29:35Nilay Patel?

  Yeah, but it's kind of the remote has a screen. It's a little guy. I have the original mini, which is like just not quite good enough.

• 1:29:43Alex Cranz?

  Yeah.

• 1:29:43Nilay Patel?

  I'm sort of shocked that DJI is still selling stuff in the United States. Like, remember, they were on the Euro Chinese company hit list for the long time, for the longest time.

• 1:29:51Alex Cranz?

  Because this is a DJI is a Chinese company, but they're also the only company that makes like good drones.

• 1:29:57Nilay Patel?

  I'm just saying, they're a Chinese company whose product is flying cameras. Like of all the companies, like, huh, this seems like a problem.

• 1:30:04Alex Cranz?

  And the American government went, yeah, but I want to fly my drones.

• 1:30:07Nilay Patel?

  Yeah, they're like, yes, but Hollywood needs these. Have you seen car commercials? What are we gonna do?

• 1:30:11Alex Cranz?

  Like helicopters? Absolutely not.

• 1:30:13Nilay Patel?

  Stable diffusion. Uh, we gotta wrap this up. It's we've we're so far over.

• 1:30:18Alex Cranz?

  I mean, wait. Important, important news. Somebody just let me know that the Amazon Kindle Scribe is getting a software update. So you will no longer just have to email files to yourself when you want to put them on the scribe.

• 1:30:32Nilay Patel?

  What can you do instead?

• 1:30:34Alex Cranz?

  You can use an app.

• 1:30:35Nilay Patel?

  Cool.

• 1:30:36Alex Cranz?

  I thought, I know everybody was really concerned about this. I got a lot of emails. So that's, that's for you guys.

• 1:30:42Nilay Patel?

  All right, a little scoop on the Vergecast for the Kindle Scribe community.

• 1:30:45Alex Cranz?

  All four of you.

• 1:30:46Nilay Patel?

  Excited for the scribe blog. You know, back in the day, like, there would have been a dedicated gadget blog for the Kindle Scribe.

• 1:30:51Alex Cranz?

  Yes, 100%. All the things you can do.

• 1:30:53Nilay Patel?

  Bring it back. All right, that's it. Thanks to James Vincent for joining us. Thanks to Richard for joining us. With David out on baby leave, I wonder if he had to sell his drone to have a baby. That's really not how that connection works, but that's how I'm gonna start thinking about it. You'll be hearing a lot from Richard. It's gonna be a lot of fun. That's it. That's, by the way, a bunch of cool stuff on the site this week. Liz has a big piece about FTX. Not what you would expect, though. The FTX store is broken by a really actually great crypto news outlet called CoinDesk. CoinDesk is owned by a crypto exchange. So they might have just like knifed themselves. Great story about the politics of tech and journalism and crypto. I mean, it's like a perfect.

• 1:31:34Alex Cranz?

  It's wonderful.

• 1:31:35Speaker 03

  But for the FTX story, if you believe what the government might be accusing SBF of, shooting yourself in the foot is kind of on brand.

• 1:31:42Nilay Patel?

  It's very, it's very good. There's actually a great week on the site. Go check it all out. We'll be back on Wednesday. We did, Alex and I talked to Charles Plame more about winners and losers and streamings. We basically did the go 90 scale.

• 1:31:56Alex Cranz?

  Yeah.

• 1:31:57Nilay Patel?

  We thought we were gonna go 30 minutes. We went 90, which is perfect. Makes sense.

• 1:32:02Alex Cranz?

  It was beautiful. It was great.

• 1:32:03Nilay Patel?

  So we'll hear ya. We'll see you on Wednesday. You can tweet at us. Alex is Alex H. Krantz. Richard is at RJCC. James is at JJ Vincent. I'm at Reckless. We love hearing from you for as long as Twitter's gonna last. Tweet at us. We love it. That's it. That's Vergecast. Back on.

• 1:32:23Speaker 00

  And that's a wrap for Vergecast this week. Thanks for listening. If you enjoy the show, subscribe in the podcast app of your choice, or tell a friend. You can send us feedback at [email protected]. This show is produced by me, Liam James, and our senior audio director, Andrew Marino. This episode was edited and mixed by Amanda Rose Smith. Our editorial director is Brooke Minter, and our executive producer is Eleanor Donovan. The Vergecast is a production of The Verge and Vox Media Podcast Network. And that's it. We'll see you next week.

• 1:32:56Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. This week is part of our special series on the future of business. I talked with Matthew Prince, co-founder and CEO of CloudFlare, about how AI bots and agents are remaking the business model of the web, and how CloudFlare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 1:33:18Speaker 08

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, you won't believe it, but automated traffic is now past human traffic online. And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be a thousand times human traffic online.

• 1:33:42Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts.

• 1:33:55Speaker 00

  This series is presented by EY.

• 1:33:59Speaker 09

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