EV startup Rivian goes public / Judge orders Apple to allow external payment options / Microsoft announces Windows 11 SE

The Verge's Nilay Patel, Dieter Bohn, Alex Cranz, and Sean O'Kane discuss electric vehicle startup Rivian becoming a publicly traded company after executing one of the biggest initial public offerings in history. The crew also cover multiple stories about Apple from this week, Microsoft's Windows 11 SE release, and a new Surface Laptop for schools. Further reading: Rivian goes public in one of the biggest IPOs ever Rivian’s mega IPO is a good test of the meme stock craze Judge orders Apple to allow external payment options for App Store by December 9th, denying stay Apple must allow other forms of in-app purchase, rules judge in Epic v. Apple Apple backs off of breaking Face ID after DIY iPhone 13 screen replacements Tim Cook says he owns cryptocurrency Apple hires Tesla’s former Autopilot software director Johnson & Johnson’s CEO joins Apple’s board iPhone 13 Pro vs. Pixel 6 Pro: what 2,000 photos tell us Microsoft announces Windows 11 SE, a new Chrome OS competitor Microsoft’s new $249 Surface Laptop SE is its first true Chromebook competitor Microsoft partners with Meta to integrate Teams into its Facebook-like Workplace Microsoft fixes Windows 11 features failing due to an expired certificate Updating The Verge’s background policy 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.

• 0:00Nilay Patel?

  This week on The Vergecast, Alex Krantz and Sean O'Kane join the show. We talk about Rivian, the new electric car company that just had one of the hottest IPOs ever. We get into buttons and links, of course, and we talk about some Microsoft news. It's coming up on The Vergecast now.

• 0:14Speaker 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.

• 0:59Speaker 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.

• 1:47Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of Zoom enthusiasts.

• 1:53Nilay Patel?

  There's one of you out there who saw the photo.

• 1:55Speaker 02

  Explain the joke.

• 1:56Nilay Patel?

  There's 35 more, if I get, but we have the numbers right, which we don't because podcast statistics are bad.

• 2:02Speaker 02

  But according to those statistics, 36 of you are listening to this show on a Zune.

• 2:07Nilay Patel?

  And we're very proud of you. And one of you sent us a photo. The rest of you sent us a photo. We're very into it. Anyway, I'm Neil. I'm your friend. Dieter Bohn is here.

• 2:14Speaker 02

  I am, actually, I am the host of a run of special Tuesday Verge casts that I hope you're listening to. We just did over an hour on USB C and next week we've got a really cool subject to talk about.

• 2:30Nilay Patel?

  Wild, Dieter.

• 2:31Alex Cranz?

  Absolute hype. I'm so hyped now.

• 2:34Nilay Patel?

  I was gonna say that, you know, we've, we've often used the second episode of the Verge cast to pilot formats, right? We like piloted an interview show that became Decoder. Ashley did a mini series about AI. Dieter was doing holiday spectaculars.

• 2:47Speaker 02

  Yeah.

• 2:47Nilay Patel?

  That's USB C. But now instead of teasing another one, you're like, a cool subject.

• 2:51Speaker 02

  No, it's a really cool subject.

• 2:54Nilay Patel?

  Is it refrigerators?

• 2:55Alex Cranz?

  Freezers.

• 2:56Speaker 02

  Our listeners understand what I'm getting at, even if you don't.

• 3:00Nilay Patel?

  I believe you. Alex Cranz is here.

• 3:02Alex Cranz?

  I'm still trying to figure out what an NFT is.

• 3:06Nilay Patel?

  Who would send? And Sean O'Kane is here.

• 3:08Speaker 04

  I am telling Alex Cranz to go to our website to read our very good NFT explainer.

• 3:13Alex Cranz?

  Oh, I'm the only one who hasn't read it in the whole world.

• 3:16Speaker 04

  That's definitely true. You and the Zune owner.

• 3:21Nilay Patel?

  Desperately trying to, I will tell you this, the incoming traffic to our NFT explainer, it is now like maybe the, the sixth or fifth most popular article in Verge history because so many people are confused about what NFTs are. They just are landing on that page every day.

• 3:38Alex Cranz?

  Just every day.

• 3:39Nilay Patel?

  It's like every day. It's one of our top stories and we keep updating it because it keeps changing, but it's, it is very entertaining and it's probably a signal that we need to do more coverage there. We just all have to stop laughing.

• 3:49Alex Cranz?

  Every time.

• 3:50Nilay Patel?

  Like it's, it's hard. We're gonna get there. We're gonna do it. I believe in it. We've actually got an NFT Decoder episode coming up that I think it's a cool subject.

• 4:01Nilay Patel?

  It's not, it's not the same.

• 4:02Speaker 02

  The joke is it's a really cool subject.

• 4:11Speaker 04

  Oh my God.

• 4:14Speaker 04

  We're off to a rollicking start. A lot to talk about. There's some news from Apple and Epic that we need to get to. There's a bunch of Microsoft stuff going on, but Sean is here because there's a new car company, like a big deal car company. It's having a moment and it's a good time to just like talk about what's going on in cars. The EV revolution is like in full early swing, I would say. You might notice car company CEOs keep coming on Decoder to convince me that, you know, they're going to be good at batteries. It's true. But Rivian just had its IPO. Rivian, if you haven't been keeping track, is a new electric car company. They make, what's the R1T is the pickup truck, the R1S is the SUV. They are now worth more than Ford and GM after

• 4:55Speaker 04

  this IPO. They've not shipped one car. Sean, what is going on with Rivian? They've started shipping the first few pickup trucks. Where are those exactly went? You know, did they go to employees? They have a couple out there, but yes, in appreciable quantities, they haven't started shipping. Rivian is, you know, in many ways, it's a new company, but it also really isn't. It was founded in 2009. The founders and, you know, like this super brainy guy who, you know, you think back to 2009, it was that first sort of big clean tech boom and he was looking at Tesla and wanted to do something similar. And they actually originally set out to make an electric sports car that was kind of similar in some ways to the Tesla Roadster. And, you know, as Tesla

• 5:40Speaker 04

  proved, that was an extremely hard thing to do, even in Tesla's case where it was basically borrowing the Lotus Elise to build off of. And so this founder, RJ Scaringe, eventually decided a couple of years down the road to pivot it to something a little more focused, you know, a brand, an electric vehicle brand that was more about adventuring, outdoorsy people, affluent people who are interested in those things and at the very least like to think that they're outdoorsy and has likened it in the past to wanting to become like the Patagonia of EV makers and even to the point that they even have a Patagonia executive on their board.

• 6:20Speaker 04

  Can I just say, like, that's a good, that's all good. It's also just from a more abstract business sense.

• 6:28Nilay Patel?

  Trucks and SUVs are the biggest market.

• 6:30Speaker 04

  Sure.

• 6:30Nilay Patel?

  Right. It's like remarkable that Tesla has a success selling sedans.

• 6:33Speaker 04

  Biggest market and also make the most money for automakers. In the case of an EV startup, you know, that's not necessarily going to be true right away. But what that gives you is, you know, the biggest cost is the battery. The higher you, you know, the more money you charge right out the gate, the more you can absorb that cost of the battery and not just take a total bath on the cost of actually building these vehicles. So, so that's what really helps them there by going down that, that route of SUV and, and pickup truck. And, you know, they also, by doing that, they put themselves in this position to essentially get to this point now where they have become, you know, for all intents and purposes, the first company to ship an electric pickup truck. There are a lot of other ones in the works and it will, it will not be as much of a rarity in a couple of years.

• 7:16Speaker 04

  But they are, you know, they beat Ford, which has the F-150 Lightning to market. They beat Lordstown Motors, which is a, you know, a much smaller, kind of struggling startup that's focused on building pickup trucks for fleets. They beat them to the market. So, so they, they are going to be in this position where they can sort of make themselves become known as the electric pickup truck in the way that, you know, Tesla became the electric car company for a lot of people. And that's, that's sort of what they want to do. So they're able to get to the IPO, you know, there's, it's interesting, like their, their inflection point was they debuted at the 2018 LA Auto Show and everybody saw these vehicles and were really wowed by them. They're a little polarizing, but for the most part, I think people were really interested in how specifically

• 8:01Speaker 04

  they tailored it to like outdoorsy lifestyles, you know, all wheel drive, all these sorts of cool little compartments and things where you can stow gear and everything. And, and so that got them a lot of buzz. And then a couple of months later, Amazon led a $700 million investment round into them. And then. A couple of months later, Ford followed with a $500 million investment round. And they had, you know, they were courting GM. There was a good Wall Street Journal piece the other day about how close GM actually got to making that investment. And it was like, everybody should go read it. It's, it's a really good scene about like RJ Scorinj flying back with this Ford executive on his jet. And like basically Ford stealing Rivian out from underneath GM, which is really funny. And, uh, and from there, they've just taken off.

• 8:45Speaker 04

  There, there are 9,000 people around the world now. They have offices all around the U.S. They've been building service and delivery centers. And then on top of those two vehicles, they're also going to be building up to 100,000 electric delivery vans that they designed with Amazon. So the interesting thing about them is not just the products that they built that look really cool. And we can talk about, but they will be a lot of people's probably first touch point for electric vehicles. Because we've all seen these Amazon vans circulating our neighborhoods every day. And, uh, and there's a good chance that that might be the first time you actually notice an electric vehicle near you.

• 9:22Speaker 02

  The thing that really gets me about Rivian is, I mean, Sean, you've been reporting on like the electric car companies that, I mean, you're reporting on Tesla, but those companies that aren't Tesla trying to like make it. You mentioned Lordstown, uh, I'm going to bring up Faraday. For the past five years, it's like, oh, electric car company. Yeah, sure. Well, we'll believe it when you actually make something and ship it. And I feel like Rivian sort of went from that category to holy crap, they're doing it. They're actually shipping something and they're making something really compelling almost overnight. Like, how do they get over that ledge of we are actually real, we actually have capital, we're actually, you know, staffing factories and making trucks?

• 10:01Speaker 04

  I think one thing that actually hasn't gotten a lot of attention in, in the run up to this IPO, that I think played such an outsized role in their success so far is that, you know, it's easy to sort of scoff at the like Patagonia of electric vehicles kind of vibe. But what they did that was so smart that a lot of, pretty much arguably all other electric vehicle startups haven't is they picked a customer. They said, you know, they think throughout the sports car idea, they said, let's get as like kind of narrow. As possible, an idea and they really like chiseled out a brand that like is more cohesive than anything else. Fairly Future, Biton, all these other companies that have struggled and/or gone out of business or fallen by the wayside.

• 10:44Speaker 04

  They all wanted to be the next Tesla in the sense that they wanted to be a mass market electric vehicle. And that's a really hard thing to do if you're trying to be a product for everybody. And what Rivian did that was so smart was realized, you know, halfway through that they wanted to make something specific. And if it didn't work out, you know, the chances are it's not going to work out. So why not take the risk on making something that could appeal to a more niche group of buyers? Even though, again, we're talking trucks and SUVs, but they really built a cohesive brand around it. And I think that really helped. And then honestly, the, in the run up to the IPO recently, one of the things that we learned when they filed their S1 with the Securities and Exchange Commission is that, you know, they got a lot of help.

• 11:26Speaker 04

  Like not only sort of, you know, obviously they're getting a lot of help from Amazon on building the delivery van and figuring out how that's going to work. But Ford built the body and whites for them for all their prototypes. So basically everything that sits above like the electric vehicle platform that powers the cars. Ford actually built all of that. So I think they had a lot of work done before they came out of stealth in 2018, which showed at the, at the LA Auto Show, you know, they didn't show like cardboard cutouts that, that fell over.

• 11:56Speaker 04

  But, you know, at, at that point, they would have probably taken a little bit longer to get to here. If it hadn't been for the sort of, you know, big companies, one automotive, one tech, that came in and really sort of saw the potential there and partnered with them and started sort of pushing them forward.

• 12:13Nilay Patel?

  You and I obviously talk a lot about the car industry. Big companies are trying to do this, right? Like Ram is trying to ship an electric 1500 pickup truck. Chevy has announced an electric Silverado. Ford is presumably within the next few months, shipping the Lightning. They're like saying it. It just took them forever to get on the board. Why do you think it took a startup with, obviously with help? Why do you think it's a startup to get there first?

• 12:37Speaker 04

  There's a, there's definitely at the very least, one big technical reason, which is when you're talking about making larger electric vehicles, you start to run into this problem where to get the kind of range that people want in order to consider buying them, you need a certain amount of batteries, the more batteries that you need to get that range to power what are bigger, heavier vehicles. You are making them bigger and heavier, which means you start to get into this sort of like chicken and egg problem. And they actually have some, it's a little wonky, but if you look at how they build their battery pack, that whole part of the equation, they made like a really big advancement there in trying to figure out that

• 13:16Speaker 04

  problem, which I think has, I think, you know, isn't going to, that's not the reason that like GMC's pickup trucks aren't going electric just yet, but it was a reason that people were hesitant to think about going further than a sedan for a while. So I think that's a part of it. And then, you know, it is, you know, we hear this explanation a lot, but I think there's some validity to it, which is like, there's just this idea of a large like corporation like the automakers are, it's just harder for them to do something new and, and cut ties to certain baggage that they have, like the Mustang Mach-E is a really good example. The only reason the Mustang Mach-E

• 13:59Speaker 04

  exists and that Ford is like now actually sort of in the game is that the CEO at the time went to whoever, you know, the team that was working on what was essentially the next Focus Electric, like a small electric vehicle that they were going to make and was like, we're going to get killed with this. No one's going to buy this thing, make something better. And that turned into the Mustang Mach-E. And not only turned into something more interesting, but on a much quicker time scale. They turned that around in like two years, two and a half years for that debut in November 2019. So I think those are two of the big reasons why Rivian's here now. Also money, money, a lot of money.

• 14:35Speaker 02

  They have a lot of money, yes.

• 14:36Speaker 04

  They've raised $10 billion to date, and that's not counting the IPO. They've raised more than $10 billion.

• 14:42Speaker 02

  When you said that they picked a customer and the customer was like people that wear Patagonia vests or whatever, isn't the customer they picked Jeff Bezos?

• 14:50Speaker 04

  Well, he is, he definitely is a customer because not only is Amazon buying vans, we've seen during Blue Origin's launches, Rivian, Blue Origin branded Rivian pickup trucks and SUVs pull up to the launch sites and stuff and they won't say, they won't tell us, we keep bugging them. They won't tell us if they bought those vehicles or not, but.

• 15:10Nilay Patel?

  I want to talk about the money aspect real quick, but then I actually want to talk about the cars. But the money aspect is interesting. You have covered a lot of EV companies that have raised a bunch of money in a bunch of strange ways. And they like Faraday Future is like the prime example, especially for Sean.

• 15:28Alex Cranz?

  Wait, how did Faraday Future do it? I vaguely remember this disaster.

• 15:33Speaker 04

  I'll do this as quickly as possible, I promise. Faraday Future was founded by the guy who ran the Netflix of China and also Le Echo, which was like a mobile phone company.

• 15:43Alex Cranz?

  And TV company.

• 15:44Speaker 04

  And TV company and at one point Android Bike Company. He had, you know, he had those successes in China, but the problem that he had over there was that he would, he would build something up, he would borrow a lot of money against it. And then when that thing started to fall apart, whatever he built up next, he would borrow money against that to pay off basically Ponzi scheme style.

• 16:05Alex Cranz?

  Hell, yeah.

• 16:06Speaker 04

  Uh, moving money around to the point that he got chased out of China. He founded Faraday Future with a bunch of that money when things were starting to get really heated for the first time in China. So he put like close to $2 billion of that money into Faraday Future. That was how they originally got founded. When they first ran into their biggest cash crunch a couple of years ago, they actually got bailed out by Evergrande, which is the massive Chinese real estate conglomerate that is currently facing a $300 billion debt load of its own and is maybe going to collapse unless the Chinese government saves it. And so they survived for a while off of that. They got in a fight with Evergrande that they settled at the end of 2018. Evergrande kind of walked away with a piece of the company.

• 16:48Speaker 04

  Faraday Future just sort of stayed in stasis mode until the end of last year or beginning of this year, they announced that they were going to do a SPAC merger.

• 16:58Nilay Patel?

  Oh, no, of course. Yes.

• 17:00Speaker 04

  And this year in July, they completed the SPAC merger and they are now a public, publicly traded company with.

• 17:06Nilay Patel?

  That sells no cars.

• 17:07Speaker 04

  That sells no cars. Yes.

• 17:08Alex Cranz?

  Is their stock price like $8, $5?

• 17:11Speaker 04

  I don't know. It's not, it's not as high as Rivian's. I can tell you that much.

• 17:15Nilay Patel?

  Well, so but here's my like, I just to back out of all this because we could probably do the whole hour on Faraday shenanigans.

• 17:21Speaker 04

  No one wants it. Trust me, I know.

• 17:23Nilay Patel?

  Trust me. Well, if you want it, it's all on the website. Sean has broken more news about Faraday Future than anybody. But right, they raised all the money. They had the resources. They had the big companies behind them.

• 17:33Speaker 04

  Faraday.

• 17:34Nilay Patel?

  They never shipped a car and it's a disaster, right?

• 17:36Speaker 04

  Yeah.

• 17:37Nilay Patel?

  Faraday.

• 17:37Speaker 04

  Yes.

• 17:38Nilay Patel?

  Faraday. Yes. Faraday had the money. They had the tech companies. They They had everything. They were just bad. They had all the same puzzle pieces. They just never made a car.

• 17:47Speaker 04

  Yeah.

• 17:47Nilay Patel?

  Like, what in the Rivian story made them actually get to this point? Is it they're just better executives? Less Ponzi schemes. Less Ponzi schemes, right? Like, because there's a lot of electric car companies are just a hope and a prayer, even though they have tons of money.

• 18:04Speaker 04

  Yeah. Well, I mean, one of the problems here is like, tons of money is super relative because when you're talking about the automotive space, like, you need this amount of money that Rivian has raised to really actually get there. Lucid Motors is another good example. They just started shipping their first luxury electric sedan and it took them getting well over a billion dollars from Saudi Arabia to be able to get to the point where they that amount of money barely just got them to production. But then they also just went public in a SPAC merger that raised four more billion dollars. So the amount of money, even though Faraday had spent 2 billion, that's still like, kind of not enough, especially at one point, they wanted to build their own factory. That's definitely not enough. And if you look at Rivian's filings so far, as they've become a public company, even they

• 18:46Speaker 04

  say they're going to spend another 8 billion dollars in the next two years. So like, that's definitely part of this. They were just able to corral the right amount of capital from sources that were, you know, less problematic, I guess you could say. And so, and then, you know, I'm sure there's some sort of leadership part of this as well. You know, they definitely have poached from a lot of companies. They took a bunch of people from McLaren and they took a bunch of people from, I mean, they take, everybody kind of hops around at this point with all these different startups. But so I think they probably hired well and it seems like RJ Skringe seems like a very intelligent person, a very focused person.

• 19:28Speaker 04

  He doesn't seem to have the sort of parts of a personality that we've seen from people like Elon Musk and even Faraday Future's founder that, you know, work against that that part that you need to be successful.

• 19:43Nilay Patel?

  Yeah, essentially, they've got a plant in what Normal, Illinois is where they're building the cars.

• 19:47Alex Cranz?

  They're gonna do another one in Texas.

• 19:48Speaker 04

  Well, maybe.

• 19:49Alex Cranz?

  Maybe.

• 19:49Speaker 04

  They built a, uh, yes, they, they bought this factory in Normal, Illinois on the extreme cheap. It's a former Mitsubishi factory that had been empty for a little while, and it was one that Faraday Future actually passed over in, in search of building their own, uh, in Nevada instead. And so there's a connection there, too.

• 20:08Nilay Patel?

  But it's just funny, like, all, I know a lot of people in Wisconsin, Illinois, and Rivian is the hot job to get.

• 20:13Speaker 04

  Yeah.

• 20:14Nilay Patel?

  Like, all, a bunch of people I know who used to like work for Harley and like Miller Coors and like various sales, like, they all wanna go work for Rivian. And that is like, you can't buy that.

• 20:26Speaker 04

  Yeah.

• 20:26Nilay Patel?

  Right? To be the place where all the talent in an area wants to go, I think. It's int- it's just interesting to see this company. They've, it's been a slow road, and they're about to start shipping at scale. And like, all, all the pieces have aligned for them in a way that everything else is wreckage, basically.

• 20:41Alex Cranz?

  It also feels like there's a little bit of like self fulfilling prophecy in this one, too. Like, honestly, I didn't know what Rivian was until they announced that they were maybe building a factory in my hometown in Texas. And I was like, oh, my God, I have to learn all about this now. I gotta get in on this. But it was really interesting to be like, the confidence of everybody I was reading about talking about this company. Like, there wasn't like, even with Tesla, we still get the, oh, all right, when they ship the car to you. But with this company, it's like,

• 21:09Nilay Patel?

  Cybertruck.

• 21:09Alex Cranz?

  Yeah, cyber, even just the three, the Model 3. But with this company, it's like, no, they're doing it. It's happening. It's coming.

• 21:15Nilay Patel?

  If Rivian can ship these cars, and they don't have the panel gaps that newer Model 3s have, like,

• 21:20Alex Cranz?

  Put your whole hand in there.

• 21:22Nilay Patel?

  It like, Tesla ships a lot of cars and people love them and I, right? Like, there are Teslas in my family, people like, I've got Tesla evangelists who are related to me. You don't have to tell me how great Tesla is. Trust me, I can just, it's at home. It's already in my house. But like, the cars are just not well made. Like, there's, you, there's no getting around it. If Rivian can like, surpass that, and they're in the biggest category in the country.

• 21:46Alex Cranz?

  Lowest bar.

• 21:47Nilay Patel?

  Well, but it's still a bar.

• 21:48Alex Cranz?

  It's still, yeah, yeah, for new car, it is.

• 21:50Nilay Patel?

  I mean, the Ford shipped the, the Mach-E, and they had to recall it like three times. And the last time they recalled it was cause like, cause the roof was getting unglued. Like, new cars are hard.

• 21:59Speaker 04

  Yeah.

• 21:59Nilay Patel?

  So let's say they ship the car, let's talk about the actual car. The R1T is really interesting. Mitchell got to drive one. The inside of it is more Tesla like than not, I would say. It's got the big screen and they've built a custom software stack. Can we just talk about the headlights first?

• 22:16Speaker 04

  Yeah, I mean, it's it's definitely, if you haven't seen it, you should go look at a photo. Pull over your car and and take a look at a photo.

• 22:24Nilay Patel?

  Turn off your gas engine.

• 22:25Speaker 04

  Yeah, yeah. I mean, a lot of electric vehicles, whereas 10 years ago, all of the hybrids and like early electrics were like, let's make a really funky body type and put blue accents on everything. You know, now, a lot of electric vehicle startups are trying to signal that something's different about the car by going with continuous light bars in the front and in the back. And Rivian sort of mixes that up a little bit by using these two like pill shaped headlights that go perpendicular to the light bar. So it gives it, yeah, it gives it, I don't know what you even call it. It looks like a A bug. It's it's definitely interesting. Like, it takes some getting used to.

• 23:04Nilay Patel?

  There are people out there who are trying to call them snake eyes to make it sound tough.

• 23:08Speaker 04

  No.

• 23:10Nilay Patel?

  No, it it just looks very friendly. Like, it looks like it wants to give you a hug.

• 23:14Speaker 04

  Yeah. And like, I think that probably works to what they're going for.

• 23:18Nilay Patel?

  Yeah, it's the it's the it's the blocker for me, but go look at it.

• 23:21Speaker 04

  Yeah.

• 23:21Nilay Patel?

  And then on the inside, right, one of the things about all these car companies is utterly fascinating to me is the inside of the car is, at this point, more important than the outside. And like, the software experience of the car is, I would say, in disarray around the industry in general. But they've had to build their own stack from the ground up, and it's all of their own stuff. What does that look like?

• 23:43Speaker 04

  Yeah, I mean, it's it's still very Tesla style, you know, like, you look at the interface. If you if you go look at Mitchell's piece, or there are definitely a lot of good videos on YouTube from the press drives, like, the interface is very, it's very similar to what Tesla has done. It's a very, like, clean looking, maybe almost a little too sort of overdone UI as far as like, some features may be hidden. It's all touchscreen based. And so that's, it's something that they, that and the software that actually manages the car is something that they made a lot of hires around earlier on. And I think that's probably, the hope is that it's going to pay off for them, because like, that is one of the things that can be really difficult once these cars get on the road.

• 24:27Speaker 04

  Everybody talks about wanting to have over the air updates and how that's transformative. You know, Tesla uses it to make its cars better. But there are a lot of things that can go wrong with that stuff, too. And so they're really trying to go for I think what Tesla offers, which is this idea of like a living car, something that can sort of change and get better in a way that like the traditional automakers are kind of promising something similar. But you're never going to get in as like fluid. Like the traditional automakers are going to be like the Samsung phone that never gets the Android update faster than the Google phone, right? Like whereas like this is, the Rivian is the Google Play edition of electric vehicles.

• 25:08Speaker 02

  Oh my God. But it does need some software updates, doesn't it? Just from watching a bunch of the videos, it seems like there's a little bit still of lag and bugginess and they're really upfront about it too. Like the, uh, who is this? Quinn Nelson was, was talking in his, his video about it that he would go and talk to the engineers and be like, I don't know about this and they'd be like, yeah, we don't, we don't like it either. Like it was a trade off and we're working on it. Like they're like refreshingly honest, but like they're not, they're not shipping a perfect software experience yet.

• 25:37Speaker 04

  I think, you know, one of the problems you run into with this stuff too is like because software is something you can change, it's harder to agree upon what it should do, you know, whereas like you gotta lock in the body type and the frame and like, like the mechanics of the car have to be set and you can't really tinker with those. So I think that you, you probably run into a situation like that. Like I've heard from someone recently at another EV startup that was just about to ship that is like uh, running into a similar problem, but worse than Rivian where like there are big disagreements about how even UI elements should work uh, at a very late stage in the game that shouldn't be happening. And I think, you know, for all of the money that it's raised and all of the things that it's been able to accomplish so far,

• 26:21Speaker 04

  something Rivian is going to have to deal with is like, I said, it's got 9,000 people already. It is a very big company now and trying to manage all that and keep all of those people together and aim them sort of at the same like success target that you, you know, RJ Scing was aiming them at a couple of years ago when they were a much smaller team has got to be really hard. So I feel like that's probably one of those places where it shows up. And it's also like, you're taking advantage of the fact that you can change it up until and maybe even after you ship the car. So like, I don't know, I feel like, I feel like that's just going to keep happening with this stuff when we're talking about the software of the cars, which is kind of, doesn't sound great.

• 27:00Nilay Patel?

  Yeah, I mean, this, I mean, like I, the amount of bad car software that you can interact with as a regular person, like just go to a car, go to any car.

• 27:09Speaker 02

  If you're in your car right now, you're still pulled over, just, just play with your software for a minute. And just think about how, would you accept this on your phone?

• 27:17Alex Cranz?

  I'm buying a car right now and I seriously like looked at used cars. I was like, actually I need to go up a year because the UI changes and I just can't deal with like that very old looking UI. Cause UIs always also look like at least 10 years older than anything on your phone. It's just like time warp.

• 27:34Nilay Patel?

  Well, no, it's like you watch any YouTube car review and like, no one wants to admit it. So they're all like, and this screen has CarPlay and Android Auto and they just like move on. And it's like, no, wait, hold on.

• 27:44Alex Cranz?

  Show it.

• 27:45Nilay Patel?

  Like, uh, many other things happen on the screen. Tesla's pretty good at it. People love Tesla. They're good at over the updates. The other car makers are now setting goals for themselves in terms of number of over the updates they deliver in a year. So like both Ford and GM and Stellantis, dear sweet Stellantis, they all talk about, like as though that that is the thing that people want.

• 28:09Speaker 02

  Yeah.

• 28:10Nilay Patel?

  Like, I don't, I don't know if they've ever talked to like a regular person, like no one is like, I love my phone because it gets so many updates a year. But because Tesla is delivering so many updates a year, they think that's the thing they have to compete with. So like, if we just like screw with your car multiple times a year, you'll be happy is like, kind of where their heads are at. But all that is related to the fact that they have none of the systems to do it, right? So saying we want to deliver 20 updates a year requires them to build a system such that they can even do it. And so you just see how a corporation takes something like make the computer good and backs it into a metric that has no relationship to human beings, but you understand why.

• 28:52Nilay Patel?

  The question for me is like, Rivian has to do that. They have to fix the software in the car. They have to ship the cars, cars have to be good. They have to service cars. They have to charge the cars. They want to build a charging network.

• 29:03Speaker 02

  Yeah. Can we talk about that for just a minute before we move on to the rest of it?

• 29:07Nilay Patel?

  This is just a lot to put, like the truck is like, Mitchell really loved the truck and the feature of the drive tunnel in the middle where he like crawled into the space between the bed and the body. All that stuff is cool. Go watch YouTube. They've done a good job giving them to YouTubers. Like they've done excellent marketing around this truck, but you just like, kind of look at that universe of other stuff they have to do. And I, it's still a lot of question marks.

• 29:30Speaker 04

  What they have working for them in their favor, in a weird way, because this sort of may sound like a problem, is that they are going to be so focused on this Amazon contract and building these Amazon delivery vehicles, that they, they've said they've collected 55,000 something pre-orders for the pickup truck and the SUV combined, and they've said it's going to take them until the end of 2023 just to make those vehicles.

• 29:57Nilay Patel?

  Wow.

• 29:57Speaker 04

  So they, instead of being like, you know, jumping in, like Ford, for instance, actually made more than the 50,000 Mustang Mach-Es this year than they had planned, like only a couple thousand more, not like an insane amount more, but Rivian's looking at only doing that within the next two years. So they have a little bit of breathing room in that sense, that there isn't going to be 200,000 of their vehicles out there to get right. They can control what's out there a little better, but they also have to throw a ton of focus on the delivery vehicle side of things. And then, and then also, yes, do these other efforts, like build out a charging network, which they're trying to do, which, you know, if no one else is going to do it, and there's going to be part of this in the infrastructure bill, so like, there is going to be more charging stations coming, but

• 30:42Speaker 04

  like, that's, that's a tall task. That's even someone like EVGO, which is like a company that's been around for a while, that's dedicated to making electric vehicle chargers, knows what it needs to do to build them, even it's having trouble, and is well capitalized, it's having trouble hitting the targets that it's setting for how many it wants to build, because like the permitting process in this country differs every different place that you go to build a charger, and there's all this. So like, they, they have created a lot of work for themselves. And so, so even with the, the consumer products, the two vehicles that they're ostensibly selling under their brand to people. You know, you gotta hope that that they're they're going to be able to address those as products

• 31:25Speaker 04

  in a like a totally whole sense while also managing all this other stuff and maintaining 9,000 employees.

• 31:32Nilay Patel?

  What is their overall charging strategy? Is it just?

• 31:35Speaker 04

  They're basically building out their own kind of network like Tesla's supercharging network that will be proprietary at first, you know, maybe open up after that. They're also tapping into this idea of doing some more like destination chargers that are near trailheads and things like that.

• 31:51Nilay Patel?

  Yeah, they're like, they're like, we're gonna put all our chargers next to like off-road trails. So you're gonna you're gonna go and charge up out in the wilderness is their idea?

• 31:58Speaker 04

  Yeah.

• 31:59Alex Cranz?

  That's my plan.

• 32:00Speaker 04

  The idea that the founder told me back when I first interviewed him in 2018, that like the galaxy brain idea for the company was and probably still is in some ways, but they you if you notice, they're not talking as much about autonomy as they used to. The galaxy brain idea for Rivian was you go, you know, you drive with your Rivian to the put-in spot, you drop your kayaks in the water, you go down the river, your Rivian automatically drives down to where you're getting out of the water and piss you off.

• 32:30Alex Cranz?

  Oh, that's cute.

• 32:31Speaker 04

  Yeah.

• 32:32Nilay Patel?

  I love that.

• 32:32Alex Cranz?

  I love that.

• 32:33Nilay Patel?

  I thought it was gonna be like, then the Rivian lowers a wheel into the river and charges itself like an old timey.

• 32:41Speaker 04

  It's a good idea.

• 32:41Nilay Patel?

  Cause that would be, they should do that.

• 32:43Speaker 04

  Yeah, you should have hit up their investor relations team.

• 32:46Nilay Patel?

  I've got, I've got a great water wheel idea that you just have to hear. Zoom out, right? So Rivian, I think, is the first new electric car company. It's hit, it's at this moment, it's IPO'd, it is starting to ship the cars. There is, I would say, just a level of confidence, they're gonna hit the first mark, which is like shipping a bunch of cars, being a real company, not a bunch of financial shenanigans and a 3D render, which is like what most EV startups have been for a while. They're gonna get there. But if you just zoom out, we are in this moment of electrification. You, Sean, you and I have talked to this, like, Alex, maybe you feel this way too. I don't want to buy a car without a battery ever again. Same. And whether it's a hybrid or an EV, like, I just feel like I should, my next car should definitely have a battery in it.

• 33:30Alex Cranz?

  I mean, I live in New York City, so where there are no chargers that are like freely available. So it's like just unreasonable here.

• 33:38Nilay Patel?

  Yeah, but you could get like a Prius. Like, there's like a number of ways to get like-

• 33:41Alex Cranz?

  Like a hybrid. I want, yeah.

• 33:42Nilay Patel?

  So I'm just like there. I feel like a lot of people are there, but the actual number of cars you can buy to meet that demand outside of the chip shortage and all the other stuff that's going on, the actual number of cars that are available to me, that demand is shockingly low. Right? Like, every car company will show you a concept car. Cadillac, the Lyric is coming. And you're like, can I buy it? And they're like, get on this waiting list. Yeah. Tesla's like, a Cybertruck? This waiting list is even more of a spiritual idea.

• 34:12Nilay Patel?

  What is, why is there such a gap? Why, it's, it's rare that consumer demand is so far ahead of where the industry is. And I can't quite, I can't quite figure it out.

• 34:22Alex Cranz?

  Is it the oil and gas companies? Is there a conspiracy?

• 34:25Nilay Patel?

  They're just running around handing out cash.

• 34:28Alex Cranz?

  I mean, they could.

• 34:29Speaker 04

  I mean, and what's made it even worse is you mentioned the chip shortage. It's like, finding a new car right now is really hard because there are so few of them that the demand is just taking them right off the lot as soon as they arrive. And finding a used car, it means you're spending way more than you need to on a car that is not worth that much. So on top of all that, the, you know, people are turning even more to electric vehicle sales. Like, electric vehicles are actually making up far more of the market right now. Still, single-digit percentage points, but more than we thought they were going to this year, based on like how they were growing before. So, yeah, there's, there's definitely a lack of it. It doesn't help that GM had to pull the Chevy Bolt off of,

• 35:10Speaker 04

  off of dealer lots because of the recall related to the battery fires that they experienced with that. That's definitely, that's hurt them, especially because they just launched two new versions of it that were- A little more capable, a little more modern.

• 35:23Nilay Patel?

  A little less ugly.

• 35:24Speaker 04

  Yeah, a little, yeah, a little less ugly. But, you know, that, so that's not helped. And then, you know, I, the Mustang Mach-E's done really well, but we're just still in that weird sort of valley between the promises that were made. The way I always think about it is like mid 2010s was when we started to see all these startups show up and say, we're going to be the next Tesla. Automakers are still not maybe taking it as seriously as they should. A couple of years later, those first startups were starting to really fall apart and the automakers were like, let's do it. And so we're just, we're just about to round that corner of how long it takes an automaker to put a vehicle on the road from when it was originally conceived.

• 36:05Speaker 04

  And, and the startups are, have reignited with all this new money that's come into the space the last two years. And so they're actually kind of arriving at a similar point, which is why we have Rivian now, Lucid Motors shipping, and a couple other ones, you know, potentially shipping next year. So it's like sort of an unfortunate series of events.

• 36:26Nilay Patel?

  I just can't imagine, if you back out to, I don't know, smartphones, right? There weren't just a lot of people walking around being like, my next phone's going to have a touchscreen. And the industry was like, next year.

• 36:36Speaker 04

  Yeah.

• 36:36Nilay Patel?

  It was the industry being like, touchscreens are here. And everyone's like, oh, that's a really good idea. We got to catch up to it. And here it just really feels to me like a lot of people, and maybe it's because I mostly hear from like Virgus fans or whatever, but a lot of people are like, I want my next car to have a battery in it, whether it's a hybrid or a full EV. Like I'm, I feel this way about climate. I, I want my car to accelerate really fast, which is, a lot of people really want their cars to accelerate really fast. But there's a lot of reasons you want a battery in your car. And like, your choices are a number of compact crossovers and that is it.

• 37:09Speaker 02

  Well, I mean, you just described the US auto industry, Neelai. Your choices are a number of compact crossovers and big ass trucks and, and there's like two sedans. You have, there's two sedans you can buy right now. That's it.

• 37:19Nilay Patel?

  Yeah, but it's nuts to me that like, not every car is a hybrid, right? Like that, that feels like a miss from the auto industry that they could have gotten there. They, you know, most car companies are like, at this point, like Taco Belling their platforms. Right. They have three engines and like they're just like mixing and matching the parts.

• 37:37Alex Cranz?

  It feels like it's like that the battery and the infrastructure is the hesitancy there. Right. Like the batteries are still limited. They're the limited distance and a lot of people live far away, especially you get to the rural folks and everything. They they're further away. Like they need they they need to be able to charge quickly. The charging experience is still garbage. Like I thought about getting an electric car and then I was like, okay, first I have to pay for whatever a place to charge it here in the city. Yikes. And then like if I ever want to, you know, go back to Texas and visit family, I've added a lot more hours on my drive just to get my car there. And it's like, that's, that's no good. Like, that's, that's a really bad situation. It feels like, like the desire is there and everybody else is behind, like the

• 38:20Alex Cranz?

  industries, like the car industry is behind and then like those supporting industries like, you know, mobile and Shell and all of these companies, they could be putting charging stations in there and they're.

• 38:30Nilay Patel?

  It's funny because you said mobile and I was gonna go, I thought you meant mobile phones.

• 38:34Alex Cranz?

  Sorry.

• 38:34Nilay Patel?

  And I was like, for example, no one is like, I want 5G and the industry is like, you desperately.

• 38:39Alex Cranz?

  4K, 4K TVs. Nobody wanted a 4K TV or a smart TV.

• 38:44Nilay Patel?

  I did. I definitely want. And nobody, I didn't want a smart TV.

• 38:46Alex Cranz?

  Nobody wanted a smart TV. They're like, I want to figure that out myself. And the TV companies were like, no, you're smart.

• 38:51Nilay Patel?

  I'm just saying, there's a lot of people listening to this show who are like, I, yeah, no, I did want more pixels. That's actually a thing that I wanted.

• 38:56Alex Cranz?

  Sorry, guys.

• 38:57Speaker 04

  Speaking of 5G, do you know who's gonna come in and save the, solve this problem? Foxconn, baby.

• 39:05Nilay Patel?

  Yeah. Do you want to, do you want to talk about Lordstown and Foxconn and what's going on there real quick?

• 39:08Speaker 04

  Yeah, as briefly as, as anyone will tolerate. Foxconn announced yesterday, they announced this in September, but they kind of like finalized it yesterday. They're buying a former General Motors plant in Lordstown, Ohio, which had famously shut down, you know, while Trump was in office and he got very mad about it. And then he actually really touted the sale of it a couple of months later to this new startup, Lordstown Motors, which is an electric vehicle startup with no history. And they've been trying to make, get that factory ready to make a pickup truck over the last couple of years and have just run into a ton of problems of their own. And now Foxconn is buying that factory. Foxconn has spent the last year.

• 39:50Speaker 04

  Plus talking about how it wants to get into electric vehicles. It's made its own electric vehicle platform. It has bought up or partnered with a whole bunch of other companies, including, you know, startups like Fisker or big companies like Stellantis. And so now they have, you know, unless the deal doesn't close by, it's supposed to close in April. And who knows with Foxconn, but Foxconn is going to have an automotive factory, an electric vehicle factory in Ohio, where it will make the pickup truck for Lordstown Motors. It'll make some new vehicle that they haven't announced yet with Fisker. And who knows what else? There's a lot of space there. Six million square feet. So.

• 40:28Nilay Patel?

  Foxconn loves a big empty building.

• 40:30Speaker 04

  Can't get enough of it.

• 40:31Nilay Patel?

  How long is the drive from Racine to Lordstown? No, this is, actually, this is really funny. Right? So they announced they were gonna look for a factory. And everyone thought, oh, they're gonna use the one in Wisconsin. That they built. To build cars for Fisker. Sure. And then Henrik Fisker was like, no, we're not gonna do that. Straight up. It was either Wisconsin or Mexico. And like, we're deciding. And they kept visiting the Wisconsin facility. And like, you're like, oh, these are just photo ops. What Fisker was actually doing was he was lobbying to change the rule in Wisconsin that says all cars have to be sold by a dealer. Right. Okay, well, I'm just gonna tell you, the Wisconsin GOP, which is, you know, the group

• 41:14Nilay Patel?

  that put the Foxconn deal in place, is captured by the Wisconsin auto dealers. So to save their own project, they had to, they had to go against one of their biggest constituencies. Yeah. I mean, it's just, it's like a hilarious. So they didn't change the law. So Fisker like walked and went to Ohio where they can sell the cars direct. I mean, all of this is just like, like, it's hilarious. And we still don't understand that.

• 41:37Speaker 04

  I love the idea. It's really, it's really wonderful that Foxconn maybe had a total out there to like, fill its empty buildings in Wisconsin with something and say like, hey, we're gonna do this here now. We're gonna make EVs. And instead, they've now wound up in the situation where they have two currently very empty large sites in the United States.

• 41:58Alex Cranz?

  I mean, they built a building like they built buildings. That's they built something.

• 42:02Nilay Patel?

  It's also funny that Fisker like blew up this chance to get really good press and like do this in Wisconsin because they insisted on selling the cars direct.

• 42:10Speaker 04

  Yeah.

• 42:11Nilay Patel?

  Like, I don't know, Tesla's building plants in Texas. People in Texas, when they buy a Tesla, they have to import, they have to go to another place. It's like hilarious.

• 42:18Alex Cranz?

  And they're totally okay with it. They're like, yeah. Driving to Oklahoma, see y'all in an hour.

• 42:25Nilay Patel?

  I mean, that's just funny to me. I don't have any strong feelings on whether cars need to be sold through dealers or not, but I do think that the fact that people in Texas have to do a round trip out of state to get a car is hilarious. And the fact that Fisker blew up their own chance to rescue the Foxconn plant in Wisconsin over this rule is deeply hilarious. But what were we expecting? When they announced like, we might build cars in Wisconsin, I think Sean and Josh and I were like, no, you won't.

• 42:51Nilay Patel?

  Before we even knew the details.

• 42:53Speaker 02

  Can we just, just very briefly, we've gone way far afield and we haven't talked about the kitchen in a tube that could fit inside the Rivian pickup truck. Like, is that a real thing? Do you think, or is that just a really cool gimmick? Do they actually intend to sell any of those? Because if you don't know, the truck has this pass through chamber and you can buy like a camping kit that's got like a working sink and a grill that like slides out of your truck.

• 43:17Nilay Patel?

  That's what you meant by kitchen in a tube.

• 43:18Alex Cranz?

  I would buy that tube in a heartbeat.

• 43:21Speaker 04

  Add that to your email to their investor relations people, Neil. That's great.

• 43:26Speaker 04

  I mean, here's, here's my answer. They're charging $5,000 for it. So yeah, they're going to try and sell it to people.

• 43:32Nilay Patel?

  Yeah, okay. Fair enough.

• 43:33Speaker 04

  Not every vehicle is going to come with it, but yeah, if they can charge $5,000 for someone.

• 43:38Alex Cranz?

  I mean, every vehicle, like right now, the only, the only versions, the only trim levels sold are the most expensive trim levels.

• 43:46Nilay Patel?

  Yeah, I just priced one out. It's $83,000.

• 43:48Speaker 04

  Yeah. Yeah. The base price we should, should have said on both of these vehicles is like 67 grand, but you'll be waiting a while for that.

• 43:55Alex Cranz?

  You'll be getting the 90,000.

• 43:57Speaker 02

  Sorry, Neil, there's a new trend. Instead of buying a Pixel phone on the Vergecast, you buy an electric vehicle on the Vergecast? Is that what's happening here?

• 44:02Alex Cranz?

  Do it.

• 44:02Nilay Patel?

  I could, I can put a hundred dollars down on any number of cars that aren't shipping.

• 44:08Nilay Patel?

  It's, it is absolutely the weirdest time to be, I mean, Alex knows she's actually buying a car. I'm addicted to car shopping, like, and.

• 44:17Nilay Patel?

  It's just amazing how many cars don't currently exist. Yeah. Like you can look at webpages for cars for days.

• 44:23Alex Cranz?

  Then you go to buy and it's like, no, no, no, you have to wait four months. And then we're, we're not, we're not going to get the one you want in. We're going to get the one that's $20,000 more. Give us your money.

• 44:33Speaker 04

  You've got all those phone mounts, you know, you need cars for all those.

• 44:39Nilay Patel?

  I gotta, yeah, that's, it really start, you start small and you go big. I don't know, I'm just going to start buying like 90s Escalades. They're cheap, they're available. No one wants them. There's no, there's all that used car demand is not pointed at 90s Escalades. Technically they have a battery in them, I guess. There was a, there was a brief ill fated Escalade hybrid. It is not a good car, but I'm at the point where I'm like, well, that has a battery.

• 45:04Alex Cranz?

  This seems fine.

• 45:05Nilay Patel?

  All right, Sean, thank you so much. We got to take a break. Thanks for coming on, man.

• 45:09Speaker 04

  Yeah, of course.

• 45:09Nilay Patel?

  All right, we're going to take a break. We'll be right back.

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• 46:28Nilay Patel?

  Okay, we're back. There's kind of a lot of Apple stuff going on.

• 46:31Speaker 02

  Yeah, like just a smorgasbord. And on the smorgasbord is just different apples.

• 46:37Nilay Patel?

  Should we start with buttons and links?

• 46:39Speaker 02

  I think we have to.

• 46:40Nilay Patel?

  Okay, so, Apple versus Epic, big court case. Epic loses on most of its charges of Apple being a monopoly and the iPhone being a monopoly in its own operating system. Okay, they win one very important concession from the judge. The judge says Apple's anti-steering rules are bad, anti-competitive under California law, writes an order saying, basically crossing out the anti-steering rule that Apple has. Right, saying you strike this language, now apps in their metadata and in the applications themselves must allow buttons and links pointing to external payment systems.

• 47:12Speaker 02

  Right.

• 47:13Nilay Patel?

  This led to some discussion about buttons and links mean. More importantly, it led to Apple saying, hold up, that's bad. We want to stay this order until we appeal the case and we can win again.

• 47:25Speaker 02

  Right.

• 47:25Nilay Patel?

  So they go to the judge and request a stay. They had oral, and they filed their motions and stuff. They had oral argument in front of the same judge. Judge said, no, I don't like this. Like if I grant you the stay, nothing will change for three to five years while you do these appeals that you're gonna do.

• 47:40Speaker 02

  Right.

• 47:40Nilay Patel?

  We thought, okay, they had oral argument. She yelled at Apple a bunch, which was really interesting. Okay, it's gonna take another week or two. Like 30 minutes later, she puts out the order saying, no, stay granted. And she like dunks on Apple a lot.

• 47:53Speaker 02

  Yeah.

• 47:53Nilay Patel?

  Right? The anti-steering provisions are one of the key provisions upon which Apple has been able to successfully charge super-competitive commissions untethered to its intellectual property. Apple's commission rates depress royalties and suppress competition in the industry generally. She's like, no, I think you're anti-competitive.

• 48:09Speaker 02

  Yeah. Well, and one of the, one of the key points here was, Apple's like, man, changing this rule is gonna take years. It's gonna be so hard. And the judge is like, no, I gave you 90 days. You could, you could figure it out. I'm not even gonna give you a 10-day extension because I gave you 90 days and why didn't you get started by now? It's like, it's like, why didn't you get your homework done? You should have started it by now. It's not my fault you waited till the last minute.

• 48:34Nilay Patel?

  Apple also said it would cost significant engineering resources to comply with this rule, which no one knows what that means.

• 48:40Speaker 02

  Yeah.

• 48:40Nilay Patel?

  Okay, so she says no. She clarifies buttons and links.

• 48:44Speaker 02

  Yep.

• 48:44Nilay Patel?

  But then, I'm pretty sure the order has a typo in it, so now we have to talk about something else. But she does clarify buttons and links. She says... With respect to the alleged need for clarification, because some developers do not understand the scope of the injunction, the developer agreement prohibits third-party in-app purchasing systems other than Apple IAP in-app purchases. The court did not enjoy that provision, didn't say other payment systems, but rather said you have to be able to communicate external alternatives and allow links to those external sites. I'm just going to tell you, I don't think she actually clarified anything because I don't know what happens if you have a button in an app that opens an in-app browser that already has your login info and billing info in it, and that's how you buy Fortnite dances.

• 49:24Speaker 02

  Yeah. Is that an in-app purchase or is that a separate browser? Earlier in the ruling, the judge writes, consumers are quite used to linking from app to a web browser. So it's like, we're in the weeds.

• 49:35Nilay Patel?

  So the Kindle app, if it has a button that says buy book and it opens a browser, what are they going to do? They definitely still have to put the other button there, I think, the Apple button.

• 49:46Speaker 02

  Probably.

• 49:47Nilay Patel?

  Yep. They have to, right? The court doesn't say so, but I think Apple might say so.

• 49:52Speaker 02

  Yeah. And the court doesn't say, the court says Apple could say, could demand it if it wanted to, I think.

• 49:57Nilay Patel?

  Yeah. So I just, I love the judge is like, I'm clarifying this and she doesn't clarify it, which is very important. So still, we're still in the world of buttons and links. Apple says they're going to appeal this again. It is, every time you appeal it now, it's like getting dicier that it'll get stayed, but we'll see, it's happened before. But that's where we are with buttons and links is, Apple has won a lot of this war. This very important battle is still not won. And by December 9th, they have to allow developers to tell you places to buy things that are not Apple's and communicate the prices, which means the pricing pressure on the App Store is going to get really incredible.

• 50:35Speaker 02

  Yeah. And actually, the judge specifically talked about this. Apple maintains convenience by IP. If it can compete on pricing, developers may opt to capitalize on that convenience, including any reassure, I think she means reassurance, that Apple provides customers it may provide safer blah, blah, blah. But then here's the dunk. The fact remains, it should be their choice. Consumer information transparency and consumer choice is in the interest of the public.

• 50:59Nilay Patel?

  Yeah. Love it. Yeah. Can we talk about this typo real quick? So she puts out the, the, she puts out the opinion denying this day. And the line, the, you know, the order says apps in their metadata, comma, buttons and links. And I'm pretty sure there's a typo in it. And so now the order actually reads apps in their meta buttons.

• 51:20Alex Cranz?

  No.

• 51:20Nilay Patel?

  And I just like lost my mind. Like, what is a meta button? Where did this come from? I can't, we have to stop using this word. It's very bad. But I'm pretty sure it's a typo and that she was copying and pasting. But we figured it out.

• 51:32Alex Cranz?

  Is Apple gonna avoid doing what they're supposed to?

• 51:37Nilay Patel?

  Because they've redefined meta buttons.

• 51:39Alex Cranz?

  Yeah. I have really hopes. I mean, I don't hope so, but I hope so.

• 51:43Speaker 02

  Here's the thing, though. The word meta button appears twice in the ruling.

• 51:47Nilay Patel?

  Yeah.

• 51:48Speaker 02

  Yeah.

• 51:49Nilay Patel?

  It's real bad. I will say that it's still not clear. If you push a button and it opens a web view. We know what Apple's gonna say, but we still don't know what it means to push a link to go to a website in the context of the App Store.

• 52:02Speaker 02

  Is a meta button a button in the metaverse?

• 52:05Nilay Patel?

  I don't want, I can't, I can't be talking about the metaverse. The CEO of Disney this week did his earnings call and he was like, Disney Plus is a metaverse. And we're like.

• 52:12Alex Cranz?

  Is it?

• 52:13Nilay Patel?

  Is it now?

• 52:14Speaker 02

  I think it was Benedict Evans who said that we're in, in two years, where all this metaverse talk is gonna sound like what the information superhighway sounded in like the late 2000s. Remember like in the 90s, Bill Clinton was like, we're gonna, we're gonna get on the information superhighway right after there's a bridge to the future or something, something, something. And no one talks about the information superhighway now because that's a ridiculous metaphor for the internet.

• 52:35Nilay Patel?

  You know, it's a fun thing to say if you just like, if you really wanna like push it, don't say information superhighway. Just tell someone you were surfing the web. Just like, be like, what'd you do last night? And you're like, I surfed the web and people will look at you like you are crazy.

• 52:47Alex Cranz?

  Are we not supposed to say that one anymore?

• 52:49Nilay Patel?

  Do you talk, do you, try it. Do it tonight.

• 52:52Alex Cranz?

  I'm gonna do it tonight. I'm going to the bar after this.

• 52:53Nilay Patel?

  One of my favorite activities is surfing the web.

• 52:56Alex Cranz?

  What were you doing this evening? Surfing the web? Waiting for you to get here. Surfing the web on my phone.

• 53:01Speaker 02

  Can I have feelings about surfing the web? Because that, that means that like people aren't clicking links between websites. Everyone's just going to Google. It's a sign of monopoly power that we can't surf anymore. Bring back the wave of information.

• 53:13Nilay Patel?

  The worst, the worst Point Break sequel of all time is being pitched right now.

• 53:20Nilay Patel?

  I'm just putting it out there. Uh, there's a bunch of other Apple stuff. Tim Cook gave an interview at the Dealbook conference this week with Andrew Osorkin. He said he owned cryptocurrency. He didn't think that Apple would, like, he personally is invested in cryptocurrency. He said he thought it was a good idea. He said Apple wasn't interested in it because it's so volatile.

• 53:39Speaker 02

  Yeah.

• 53:39Nilay Patel?

  He doesn't think people buy Apple stock to get exposure to crypto volatility, which is just, you can see where Tim Cook's head is at, right? Like, he gave the deep answer on crypto volatility, and then Andrew Osorkin was like, "What about the metaverse?" He's like, "No, no further..."

• 53:53Alex Cranz?

  Nope.

• 53:54Nilay Patel?

  "No further comments from me."

• 53:56Alex Cranz?

  Done here.

• 53:56Nilay Patel?

  He did say that he thinks side-loading is bad, the usual comments on that stuff. Can you explain this Face ID right-to-repair situation?

• 54:05Speaker 02

  So, uh, when you replace a screen on an iPhone 13 and you put it onto another iPhone, there's a chip that makes Face ID work, and that stops working if you swap screens. And there's no reason it should. There's not the, the secure enclave and all that stuff isn't there. So iFixit did the teardown and they investigated that, like, if you, like, learn micro soldering and you manage to get the chip off the board, you know, some way and move it to the other thing, it'll continue to work. But functionally, what it does is it takes a huge category of phone repairs and puts it in a place where independent repair shops just cannot do it. Because if Face ID breaks, you're not going to get your screen

• 54:48Speaker 02

  replaced from the place that breaks your Face ID. Just, you're not going to do it. And they, iOS was putting up various warnings about it, and it was clear that Apple, like, had some idea of what was going on here. And they gave us, you know, the information. They're like, "Actually, no, we're gonna, we're gonna fix that. You're gonna be able to not have to micro solder a chip from one screen to the other screen in order to make your screen swap work or replace your screen." So they actually backed off a thing that improved your right to repair, uh, which I don't believe happens without, you know, the current push for right-to-repair and the current regulatory pressures that are being put on big tech.

• 55:28Alex Cranz?

  Didn't they do this with the Touch ID too? Like, the Touch ID, you had to switch things over, otherwise your Touch ID would break.

• 55:35Speaker 02

  Yeah, it's, it's very, it's very, very similar. So you'd think conceptually it's the same thing, but I'm, I'm pretty sure the chip didn't perform the exact same function.

• 55:42Nilay Patel?

  Well, also, Touch ID was not connected to the screen.

• 55:45Alex Cranz?

  Right, but when you were replacing the front of it... If you replace the front of it wrong, the Touch ID would break.

• 55:51Speaker 02

  Yes.

• 55:51Alex Cranz?

  Because it would be like, oh, you have a new Touch ID. We hate you.

• 55:55Speaker 02

  But yeah, like, but the part on the 13, like, it's connected to the screen. Face ID and the screen are basically one piece.

• 56:01Alex Cranz?

  Okay.

• 56:01Speaker 02

  Like, some of that stuff. And so swapping that stuff out is really difficult, uh, because you got to get into micro soldering. And so you need to be able to just buy that part that has all that stuff on it and put it on when your screen breaks.

• 56:14Alex Cranz?

  Right.

• 56:15Speaker 02

  And only an Apple authorized dealer had the software jiggery pokery to authorize Face ID on that screen replacement. And they have now stepped back and it no longer will break Face ID if you replace your screen that also has those Face ID bits on it.

• 56:30Alex Cranz?

  Was this like a bug or was this intentional and oh, they got caught? So?

• 56:35Speaker 02

  That's an excellent question, Alex. What do you think?

• 56:38Alex Cranz?

  Hmm, I sure have opinions on that subject.

• 56:43Nilay Patel?

  I think, I think Dieter is right. I think basically the rights are, there are bills, there are people in Congress. It's all part of the antitrust stuff. Like, this is going to be one of those, any member of Congress can be like, and big tech won't even let you fix your phone anymore.

• 56:59Speaker 02

  Yeah.

• 56:59Nilay Patel?

  If you break the screen, like, why walk into that?

• 57:02Speaker 02

  Yeah. No, I think that there's a, there's an entire category of problems now for Apple where Tim Cook is like, you know what? I don't want to think about it. Like, make that go away. Where normally they'd be like, nope, we're gonna, we're gonna hold the line here. But I think right now, there's just a category of things where Tim Cook's like, nope, that, that's not worth our time.

• 57:19Alex Cranz?

  We're gonna hold the line on the definition of button, but this, this just let it happen.

• 57:25Nilay Patel?

  I think anything that's, anything that is easy for a politician to explain is not a battle worth fighting. It's like a very simple, like.

• 57:33Alex Cranz?

  Oh, I love it.

• 57:34Nilay Patel?

  You want to get deep in the weeds on buttons and links and whether or not IAP should be 30% or 15%, like, whatever. Like, no one in a town hall meeting can do, we, we've been trying to do it on the show for 10 years. It's very hard. You want to do blue bubbles. That's my, that's still like over the head of most people and people can feel it and they understand it. Apple made it impossible for you to cheaply repair your screen when you crack your phone. Like, that's just gold. That's political gold. And like, why, why give them the gold? And you force them to do RCS. That's all I'm saying.

• 58:10Speaker 02

  Good luck.

• 58:11Nilay Patel?

  Okay, more, more quick Apple stuff. Two kind of interesting hires. One, I think, makes sense, like, conceptually. So they, the CEO of Johnson & Johnson has now joined Apple's board.

• 58:23Speaker 02

  Yep.

• 58:23Alex Cranz?

  It's great.

• 58:24Nilay Patel?

  Presumably because Apple just wants to do health stuff all the time and they think Johnson & Johnson will help them.

• 58:28Speaker 02

  Yeah, well, and like, they, they've been, they've been trying so long to get health right. Their efforts really need a booster.

• 58:35Alex Cranz?

  Oh.

• 58:35Nilay Patel?

  Very good.

• 58:36Speaker 02

  They've got one shot to, to get it right this time.

• 58:39Nilay Patel?

  Oh, my God, that's the Vergecast, everybody.

• 58:41Alex Cranz?

  It'll only work 60% of the time.

• 58:44Nilay Patel?

  Shut it down. It's brutal, Alex. Wow. It is interesting how Apple invests in health, right? And like, they've run into a lot of problems with health. Okay, they're, they're adding an executive into the board to, to bring some rigor to that.

• 59:00Speaker 02

  Well, and I think bring some rigor to their goals, to like, what are, what is, what are we planning on doing besides Tim Cook saying health is going to be our most important contribution? Well, like, specify the contribution a little bit more clearly. I think having this CEO in particular on the board helps them do that.

• 59:14Alex Cranz?

  So does this mean they're not gonna, because for a while, they were like, maybe we'll do our own, like, internal clinics and hospitals. And they realized that was bad. And so now they're like, pivoting maybe away from that?

• 59:25Nilay Patel?

  We'll see. So this brings me into the second hire, right? So you add the CEO of the healthcare company to bring some rigor and some goals and some direction. Okay, that makes sense. They've also hired yet another Tesla executive, the director, the former director of Autopilot, to do question marks.

• 59:43Alex Cranz?

  Unrealistic things.

• 59:45Nilay Patel?

  Well, I, I mean, I don't know. The Apple car situation, I mean, and Sorkin did ask Cook about this, and there was just more. When Tim Cook shuts down, man, it is like a robot turn. It's like, boop, boop, boop, boop, boop. Like, it's like, I'm not talking about that. So they, they've added yet another car executive to do something. They have spun this program up, they have spun it down 500 times. We still don't know what's happening, but they continue to hire car executives, specifically ex-Tesla executives.

• 1:00:13Speaker 02

  Yeah.

• 1:00:13Alex Cranz?

  It's all for car play. You guys think there's a car coming. It's all car play.

• 1:00:19Speaker 02

  The thing Sean talked about earlier, about how like, electric car people and like, just people that are doing high-end car software are just bouncing around between the companies is very real.

• 1:00:28Nilay Patel?

  It is very real. What's interesting is you can break the software. There's two big chunks. There's the stuff on the screen in front of you, which is sort of uniformly bad. Then there's the stuff that runs the car, which is not allowed to be bad. Right. At a deeply fundamental level and they operate in very different.

• 1:00:45Alex Cranz?

  We need to survive.

• 1:00:46Nilay Patel?

  Yeah, like, yeah, if your car, if the body control module of your car fails, like, bad things happen to you. And they're on wildly different development timelines. And then there's self-driving, which is supposed to connect a lot of these things, right? You need to tell a map where you want to go and then the car has to operate another wildly different development cycle and timeline. One of the most interesting things about Apple, like, in terms of the mystery, is we have no idea where they want to play. Right. Like, for a while, they were going to build their own car, which, and they were going to build all of it. Then they were just going to build self-driving for other carmakers or a user experience for other carmakers. Still totally unclear what they want to do.

• 1:01:26Alex Cranz?

  Telling you, it's our all-car play. The best music experience. It's coming.

• 1:01:31Nilay Patel?

  Spatial audio in the car. Oh, God. But to, what Sean was mentioning earlier, right? To succeed, you need to have a lot of money. Apple is kind of at the point where they have so much money that they can't be like, you know what we're gonna do? We're gonna, um, we're gonna make a TV.

• 1:01:45Alex Cranz?

  Yeah.

• 1:01:45Nilay Patel?

  Which is something I think they should do. They're like, that doesn't cost enough money. It doesn't move the needle enough. Like, they could just buy Samsung. We now make TVs. And they're like, yeah, that was the pocket change. They can spend enough money to make a car. And I think part of the reason they keep chasing after it is it's because it's one of the few places where the, where like, they, they have them, they're one of the few companies that just has the cash balance to do it.

• 1:02:12Alex Cranz?

  Yeah.

• 1:02:13Nilay Patel?

  Yep. And I think you can see that as an opportunity. You can also see it as like, man, you, you should decide what you want. Like, the Apple midsize crossover is a deeply funny thing to consider.

• 1:02:24Alex Cranz?

  Costs a hundred thousand dollars. Can't repair it yourself.

• 1:02:28Nilay Patel?

  Yeah, if the windshield falls off, you have to call Apple. Okay, lastly, Becca and Maria made a great video comparing the iPhone 13 Pro and the Pixel 6 Pro, the full frame than Becca. I'm not going to tell you, like, it is a great video, it's super fun to watch. It is remarkable where these cameras have landed.

• 1:02:44Speaker 02

  Yeah.

• 1:02:45Nilay Patel?

  And what they're good and bad at. I'm not going to tell you the results, you should go watch it. And particularly, the Maria segment is very funny, because Maria is hilarious. But go watch it, it's really good. Becca had to take a lot of photos, like, literally the end card of this video is Becca being like, I don't know if I can do this again. 2,000 photos, 1,000 each from each camera.

• 1:03:02Alex Cranz?

  We were talking about before, she doesn't have a dog, she doesn't have a cat, she doesn't have children, she doesn't have, like, naturally photogenic things around her, and she went out and took 2,000 photos. That's like, that's incredible.

• 1:03:13Nilay Patel?

  Yeah, amazing. Okay, one more quick break, we'll be back, let's wrap this thing up, we'll be right back.

• 1:03:22Speaker 01

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• 1:03:59Speaker 06

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• 1:04:29Nilay Patel?

  We're back.

• 1:04:30Speaker 02

  Yeah.

• 1:04:31Nilay Patel?

  Dieter, there's a bunch of Microsoft news.

• 1:04:33Speaker 02

  So, uh, they have announced another version of Windows.

• 1:04:37Nilay Patel?

  Oh, God.

• 1:04:40Speaker 02

  It's another S version. It's Windows 11 SE. And if we know anything about SE, it's that it's a very clearly defined thing, right? Like the iPhone SE? It is a special edition, I suppose, of Windows that's aimed really just at education. And so it's optimized for low-cost devices. It's not going to ship with the Microsoft Store, which is interesting. But they are going to allow third-party apps, including Zoom and Chrome, because you can't get into schools without Zoom and Chrome, because that's how they run schools.

• 1:05:17Speaker 02

  And yeah, so it's like, that's interesting. But it's, you know, it's easy to dunk on Microsoft to keep trying to make lightweight versions of Windows. But they really do need to get into the education market, and this is another shot at it. So, fine. To me, the more interesting thing in some ways is alongside Windows 11 SE, they announced the $249 Surface Laptop SE.

• 1:05:43Alex Cranz?

  With a garbage display. It could be pretty. I, we haven't seen it, so I don't want to say it's garbage, but,

• 1:05:52Speaker 02

  Yeah.

• 1:05:53Alex Cranz?

  But when your resolution is 1366 by 768 in 2021, that's not pretty.

• 1:06:02Speaker 02

  That's a classic. That's like, it's like a mid 2000s iBook.

• 1:06:06Alex Cranz?

  Yeah, that's just rough.

• 1:06:09Speaker 02

  It is wild that they can't. It's the opposite of pixel density.

• 1:06:13Alex Cranz?

  Microsoft, invest in displays, please.

• 1:06:17Speaker 02

  Well, there are Chromebooks at this price range that are doing better on the display front. But in terms of making it, other than the display, in terms of making a low-cost device for schools, they're making it repairable. They're going to have parts. It's relatively easy to open up. So that's actually incredibly good news. Hopefully, the thing is relatively durable. It's a bummer that they're using an Intel Celeron processor.

• 1:06:41Alex Cranz?

  Bummer, it's four gigabytes of RAM. That's like, that's the real.

• 1:06:46Speaker 02

  Yeah. So here's the thing, like, can Windows 11 SE get lightweight enough where things can actually run well on this processor and this much RAM? Because you can get a Chromebook that can like, not be the worst at the, at these specs. But more importantly, you can get a Chromebook with slightly better specs for not that much more money. And I don't know, I don't know what Microsoft's goal here. Do they actually want to sell this thing in bulk to schools? Or is there hope that they can prove to the rest of the Windows market that they need to try harder at making Windows machines to compete with Chromebooks instead of just making Chromebooks?

• 1:07:22Alex Cranz?

  I feel like it's both, especially like when you look at this, because I used to have to cover like, these really cheap laptops for a while. And once you get under $500, you're in garbage territory for Windows, or you're in like Chromebooks. And even the Chromebooks start to get pretty, pretty dicey. But like, there's just nothing in that space that's usable as far as Windows goes. And it's always like, I think the recommendation was always like, save your money. Like, put yourself in debt before you buy one of these, which is not a good recommendation. And it's not realistic. And the idea that like, they're gonna tempt it is great. Like, the Surface Go was nice and kind of forced everybody else to say, okay, we can think, we can be a little more thoughtful. We can actually do a nice display. So like,

• 1:08:07Alex Cranz?

  it's nice that they're doing it. And hopefully it forces people. But oof, that display is just, that's just upsetting.

• 1:08:16Speaker 02

  We've heard a lot about different companies trying to compete with Chromebooks, like, Apple keeps, that's why they make a cheap iPad. You know, if you offered, if you'd said you've got about $250, $300 to spend, I would take an iPad over this Chromebook, I think, because the iPad has a much nicer display. But then you'd have to spend a bunch of money on like keyboard cases and whatever. But the Chromebooks, like centrality to the, the education market right now is like, one of those things we don't talk about enough. Like, every kid just gets like handed a Chromebook in school right now, because there's just a handful of Google products they use to all talk to each other and like, do the work. And that-

• 1:08:50Alex Cranz?

  They somehow get hangouts running on those Chromebooks.

• 1:08:56Nilay Patel?

  Taylor Lawrence once had a great story about how kids were flirting in the comments of Google Docs. Just like, very good. It's, they can keep trying to make the entry point, but they've got to, once a school district is bought in, switching them over is really hard. And like, the schools are pretty bought into the Google stuff right now.

• 1:09:13Speaker 02

  Well, I mean, this is, this is why they were explicit that Windows 11 SE can run Chrome. Like, it lets you install it. It's administered by the school, like, it's, it's run by, like, the IT department, like, what software is available, that there's no Windows Store.

• 1:09:29Nilay Patel?

  But like, is, is a strategy there that, like, your school gives you this instead of a Chromebook, and you, like, accidentally click on Teams, and you're like, ooh, I love this. Oh, wait, this is way better. Amazing. We'll see. Speaking of Teams, we actually, I think we were talking about this last week, how Microsoft has all the workplace stuff, and Facebook has the hardware. Well, here they are. Microsoft partners with Meta to bring Teams into Facebook's Horizon workplace. Woo.

• 1:09:58Nilay Patel?

  The Metaverse. I rewatched the Microsoft Metaverse keynote.

• 1:10:03Speaker 02

  Yeah.

• 1:10:04Nilay Patel?

  And the moment when the guy clicks the button to send their, their legless bodies into the lobby of an Accenture office, I was like, this isn't, like, at least the Matrix was cool. You know, like, at least when Keanu was like, woke up and he was in the battery facility, and he was like, this is the real world, this sucks. Like, there were some people who were like, put me back in the battery. That's a plot point in The Matrix. It's like, get me back there. No one is like, get me back to Accenture. Put me in Cartoon Land.

• 1:10:39Nilay Patel?

  Zero people are like, I want to go to this Accenture office. But it's happening, you can see it coming together. And then lastly, this Windows expired certificate, expired certificate stories are always good.

• 1:10:50Speaker 02

  So I was like, I, I actually had a tweet, I was like, it actually makes me feel nice that, like, giant companies still have expired certificate, like, things that break their software. Cause like, you know, I forget to go to the dentist. So like, even everybody can forget things. But actually, if you just take a step back, it is really stupid that, like, this basic fundamental thing broke, and that Microsoft wasn't on top of it, because

• 1:11:12Nilay Patel?

  And Windows stuff.

• 1:11:13Speaker 02

  Many companies have solved this problem of, like, remembering to make sure your certificates don't expire.

• 1:11:18Nilay Patel?

  All right. Want to end with, just, people ask me this. I did not expect this to be a big deal. It turned into a huge deal. So we updated our background policy, which I'll explain in a second. And we didn't put it on the front page. I just tweeted it and it like blew up. And so some people ask, can you spend five minutes explaining what you mean? And I, it was just, this was a note for PR people and mostly other reporters. So here's the thing that happens to me all the time. I talk to Dieter, Dieter talks to me, I'm a reporter, Dieter, I get to write down what Dieter said and said that Dieter said it. And so on the record, this is the standard, how it should work all the time. Then if you watched any movie with newspaper people, and I, I love movies with newspaper people. They're super accurate. I could watch The Post all day.

• 1:12:01Nilay Patel?

  My old Michael Keaton movie, The Paper, very good. Just go check it out. If you've watched any of those movies, you've watched any of the Watergate movies, you know, people are off the record. That means you can't use what they say. And this is like a fun thing you can do with your friends. You used to be like, off the record? And like, no, that doesn't mean, but you can just say it and it means you can't use it.

• 1:12:19Speaker 02

  Right.

• 1:12:19Nilay Patel?

  Yeah. Then there's this gray area in the middle where I say, hey, Dieter, can I tell you something on background? Dieter's like, maybe. Define on background. Yeah. And then I tell him something and he, he can use the information. Dieter, I'm buying a Rivian R1T. And he can say, sources say Neelai is buying an R1T, right?

• 1:12:40Speaker 02

  Or I could say Neelai is buying a Rivian R1T, but I don't quote him.

• 1:12:45Nilay Patel?

  I just know it.

• 1:12:46Speaker 02

  Neelai gives me a long, complicated explanation of why. And then I could paraphrase that explanation and source it to Neelai. And so some companies, when they say on background, what they mean is that we don't want you to tell anybody that we're the ones that told you. Some companies do the right thing and say, yeah, we're on background, but you could tell people what we told you. But the definitions are all over the place. And there's a potential confusion there that can gum up the works, let's say.

• 1:13:14Nilay Patel?

  Yeah. And I, and I would say our responsibility as journalists and reporters is to not, is not for us to know things. It's to tell you what the companies are doing. Right? So when I, when I just like magically know, I'll just keep picking on Rivian. If I just magically know what Rivian is doing, you have no idea why I know this information. You have no idea where it came from. And if they have lied to me. I'm on the hook for it and they are not. Right. Yeah. Which sucks. We're only picking on Rivian because they were earlier on the show. Yeah, yeah, whatever. With Rivian. I'm trying to, what's the, what's the fake Contoso? Is that the fake company that Microsoft always uses? Yeah, Contoso, yeah. Whatever. It doesn't matter. Any company you can think of, they all do it now.

• 1:13:56Nilay Patel?

  So a thing that has really happened with tech companies in particular is they tell everything to everyone on background. And they just tell you this is true, like all the time. And you're like, well, who said it? Is it real? Is it, it's you. You were saying like, no, it's on background. So we just reset our policy to back where it was. Like, if you look at the replies to my tweet about this, there's like so many like grizzled old newspaper reporters who are like, well, those are, those have always been the rules. Yeah. And it's like, great. I understand that those are, those are the rules in 1970 at your local paper when you were like beating down the doors of City Hall. Here in 2021, the boundaries have actually moved for tech companies and the companies that cover them.

• 1:14:38Nilay Patel?

  And we're just resetting the boundaries to, yes, where they were before, which is everything's on the record. And if you want to be on background, you have to ask us and we have to agree. Right. And I will tell you that like, there's a bunch of stuff, there are a bunch of times when, when Google, actually, we had a story yesterday where Netflix, I don't know if you saw this. Netflix is switching to AV1 as its codec. Oh, how did we not spend the entire Vergecast on this? So, um, right. And so we were like, great. What, what devices are going to use AV1? And they sent us the list. The list is hilarious. It's just like, select 2020 8K TVs. And it's like, well, that's not a list of supported devices. Select Amazon Fire devices. Cool. Which ones? Anyway, so they sent us this list.

• 1:15:23Nilay Patel?

  We attributed the list to Netflix because all we need to do is tell people where the information is coming from. And now we've satisfied our responsibility. So we are happy to have this conversation as long as at the end of it, we understand and can clearly communicate to our readers where the information that we're reporting is coming from. And it's all we want to do is say, here's the default. If you want to change the default, you have to ask us and we will have a conversation. Yeah. And by the way, ask us like that. Yeah. Just ask us. And I just was not expecting it to blow. I mean, I, it was a little salty. The post is a little salty because I'm a little salty about it. It's, we've been thinking about this and Dieter, Dieter and I have been talking about this for maybe a year.

• 1:16:06Nilay Patel?

  We've, we've been talking about changing the policy for months. And what finally, after all of our 10 year stuff, after this last cycle of reviews, our reporters are like, yeah, when are you rolling out this policy you've been talking about? Like, because I'm, you know, when, when you don't have a policy to point to, whenever anybody wants to push back, like, I end up on the phone.

• 1:16:25Alex Cranz?

  Right.

• 1:16:25Nilay Patel?

  Right? They're like, my editor will talk to you. And so then I'm like, but we have this policy, we can't do it. And we keep having a conversation. Now it's just like written down. Everybody can just like tap the sign.

• 1:16:34Alex Cranz?

  You need to start see, like, counting. See if it drops the number of calls you have to do, explain it on background.

• 1:16:41Nilay Patel?

  We'll see. But are the examples, like, you know, the tech companies that email us their own website, like links to their own websites on background. It's like, guys, like, what does this even mean?

• 1:16:53Alex Cranz?

  I've asked like,

• 1:16:53Nilay Patel?

  Are we supposed to not source your own website now?

• 1:16:56Alex Cranz?

  It's wild, like, what people will just say on background in front of you. You'll ask a PR person, oh, did you see that movie last night? On background, yes. Yeah. I wasn't going to report, like, that you saw a movie. It's unrelated to this laptop we're discussing. Thank you.

• 1:17:10Nilay Patel?

  Yeah. So anyway, that's, that's just a little color. It's very inside baseball. All of it is pointed at two things. One, we want to be transparent in how we work. So now there's an explanation of how we work and how we're thinking about it. Two, this problem is out of control. So we wanted to give cover to other reporters and newsrooms to say they use the same policy as us, which, for example, our ethics policy, right? Our ethics policy, we lifted from All Things D. We lifted from Walt Mossberg and Kara Swisher. It was a model they had printed. They were super loud about their ethics policy. When we were starting out and we were new, we were like, we're going to use that one. So we hope people, you know, now we're 10 years old, we hope people can look at our policy and build on it and use it and refer to it,

• 1:17:52Nilay Patel?

  have it be a little bit of a standard. And third, most importantly, We just want our readers to know where the information comes from. That's it. We think that's an important part of our job. And I have, I have told many PR people, because people say to me or other reporters, well, you look really smart if you just know this. No. And I'm like, no, I already look, I already look so smart all the time. Like, I don't need your help. Like, I just want to tell them where I came from. The other thing I'll connect it all to is, and Dieter, I know you have been thinking about this as much as I have. When people cheer for us because we say disclosure, right? Like, yeah, that's our brand is being transparent. Like, we believe in that. Like, that's who we are.

• 1:18:36Nilay Patel?

  We want you to know, like, here's where we're coming from. Here's what we believe. Here's how we do our work. And so we're just always going to hold the line on that. And sometimes, like this week, we're going to do it a little more loudly than not, and we're a little more publicly than not. But just, trust me, we're kind of always doing. It's always in the background. So that's the explanation. If you have more questions, you know, we'll do our best to explain ourselves because we believe in transparency. All right, that's it. I think that's it. That is the show. We've gone over. Just a little. Just a little bit. Thank you for listening. Dieter's got the Tuesday episodes. Yeah, still, still something cool. It's that really cool. Really cool subjects. I see. All right. Yeah. What could it be?

• 1:19:20Nilay Patel?

  Decoder this week was the CEO of Anchor, which was actually, do you know Anchor has 100 people who just think about Amazon Marketplace all day long? It's 3% of the company. That's incredible. It's 3% of my brain too, but it's amazing that they hire so many. So Stephen Yang from Anchor. Next week, next week, it's Brian Chesky, the CEO of Airbnb. That conversation was wild. That was, it's a rocking one. So that's Decoder, Tuesday episodes. You can tweet at us. I'm at Reckless. Dieter's at Backlon. Alex is Alex H. Krantz. Sean is S. Okane 1. Correct. That's it. That's for a chest. Rock and roll.

• 1:20:13Speaker 07

  Support for this show comes from CoreWeave. Everywhere you look, AI is expanding what we thought was possible. And at the center of it all is CoreWeave. Medical research and diagnosis, education, complex visual effects for movies, science and technology breakthroughs. CoreWeave powers AI pioneers around the world with purpose-built tech, building what's never been built before. CoreWeave is the essential cloud for AI. Ready for anything, ready for AI. To learn more about how CoreWeave powers the world's best AI, go to CoreWeave.com/ReadyForAnything.

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