Jack Dorsey steps down from Twitter / The future of the blockchain / FTC is suing to block Nvidia’s purchase of Arm

Nilay Patel and Dieter Bohn chat with Alex Heath and Casey Newton about Jack Dorsey stepping down as CEO of Twitter and what's going in the world of crypto. Managing editor Alex Cranz stops by to share news that the FTC is suing to block Nvidia's $40 billion purchase of Arm. Stories referenced: Jack Dorsey steps down as Twitter CEO Twitter CTO Parag Agrawal replaces Jack Dorsey as CEO Jack steps back An introduction to Parag Agrawal, Twitter’s new CEO Big tech’s first generation of founders starts to step aside As tech founders resign, Congress loses its favorite targets Jack Dorsey’s Square is changing its name to Block The leader of Facebook’s stalled cryptocurrency project is leaving the company Macy’s is auctioning off Thanksgiving Day Parade NFTs, including this creepy elf Almost buying a copy of the Constitution is easy, but giving the money back is hard ConstitutionDAO will shut down after losing bid for Constitution Is the music industry’s future on the blockchain? US banking regulators are looking to clarify crypto rules in 2022 The FTC is suing to block Nvidia’s $40 billion purchase of Arm Qualcomm is updating its Snapdragon branding to try and simplify its chip names Qualcomm’s new Snapdragon 8 Gen 1 chip is here to power the Android flagships of 2022 Qualcomm’s new always-on smartphone camera is a privacy nightmare Qualcomm’s Snapdragon 8cx Gen 3 is its latest attempt to hit a Windows on Arm home run Microsoft’s Qualcomm exclusivity deal for Windows on Arm reportedly ending soon Qualcomm’s new G3x platform could usher in a new wave of Nintendo Switch-alikes Razer’s Qualcomm-powered handheld console leaks Meta ordered to sell Giphy by UK regulator Barnes & Noble announces new Nook GlowLight 4, says it cares for real this time Alex's tablet Tile is selling its Bluetooth tracking business to Life360 for $205 million Elizabeth Holmes admits that she was CEO of Theranos, the company she founded 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 Heath and Casey Newton join the show to talk about Jack Dorsey stepping down from Twitter, what's next for his company Block, that's renamed Square, and a bunch of crypto conversation. Then Alex Krantz joins the show. We talk about the FTC suing to stop Nvidia from buying ARM and all of Qualcomm's news. That's coming up on The Vergecast now.

• 0:20Speaker 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.

• 1:05Speaker 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.

• 1:53Nilay Patel?

  Hello and welcome to Vergecast, the flagship podcast of the blockchain.

• 2:00Nilay Patel?

  Did you like it, Dieter? Right before we started, Dieter was like, "We're gonna piss off someone." And I thought, "We should do it from the start." Anyway, I'm Neil, I'm your friend. Dieter Bohn is here. I am a proponent of Web 4. Get there. We have an all-star lineup today. Casey Newton is here.

• 2:16Speaker 02

  Hey, Neil.

• 2:18Nilay Patel?

  And Alex Heath is here.

• 2:19Speaker 03

  Hi, I'm a bearded Bitcoin maximalist with only one job.

• 2:24Nilay Patel?

  That's a success. And a little bit later, Alex Cranz is gonna join us. We're gonna talk about processors and Apple and all that stuff. But we wanted to start with Alex and Casey. You know, it's sort of that slow-ish holiday period. We had Thanksgiving, we gave thanks. I went home to Wisconsin, I gazed upon the Foxconn Dome, just a mile and a half away from my parents' house. My niece said to me, "What happens in there?" And I was like, "It's either a two-hour story, or I'm just not gonna tell you." And she chose not to be told. Anyhow, it's that holiday period, not a lot of news. And then this week opened with a bang, a block. Jack Dorsey stepped down as Twitter CEO. Prag Agarwal is the new CEO.

• 3:09Nilay Patel?

  He was the former CTO, Chief Technical Officer of Twitter. Jack, as Alex hinted at, now only has one job, which is to run Square, his payments company. He also renamed Square to Block to focus on the blockchain. There's quite a lot going on here. Casey, let's start with you. Why did Jack leave?

• 3:28Speaker 02

  So, Jack's story is that now was just the right time to step away and focus on other things. I suspect there was more going on. Last year, Elliott Management Corporation, which is sometimes called the most feared investor in America, took a large position in Twitter. And one of their express goals was to get Jack out of the CEO chair. They were really agitated by the fact that he had two jobs and Twitter's stock performance has been totally stagnant, basically since the time that it IPO'd. So, last year, it looked like Twitter had actually... Navigated that okay, they basically immediately caved, they gave in to every one of Elliot's

• 4:09Speaker 02

  demands, except for Jack leaving instantly. And earlier this year, the board member that they had appointed to Twitter actually stepped off the board. And so at that point, I thought, all right, maybe Jack actually did survive this. But then he leaves and you start sort of talking to people in the back channel. And there's definitely some speculation that Elliot got what it wanted in the end. Twitter's stock has not been performing well at all this fall. And I think there's just sort of renewed pressure to turn this thing into a real growth stock again. So if you ask me what my guess is, I think it's mostly that. But then it's also Jack Dorsey. He's an enigmatic unpredictable person. And it's very possible that he just woke up one day and decided, okay, I'm done now. And that that was part of it, too.

• 4:49Nilay Patel?

  So we don't spend a lot of time on stock prices and financial performance on the show, outside of noting that it's earnings seasons again, and Apple set another record for smart watch sales or whatever it is to do. But we usually keep score, right? Like, are the companies doing well, or are the products selling or not? But overall, the story of the pandemic is the tech companies have done extraordinarily well. They are minting money. They have become just absolute bedrock services in our lives. And every one of the big tech companies you can think of has been on just an incredible run of financial performance, except Twitter.

• 5:29Speaker 02

  Yeah, I mean, they have an ad business that has just been not that great compared to what Google and Facebook built, and now to what Amazon is building. They're not great for display advertising. They're not great for direct response advertising. I think the business does okay. But given that Twitter is the beating heart of the global news cycle and has the attention of the entire elite of Earth, basically, it's always been crazy that they can't capture more of that value. And so you have started to see them diversify a little bit this year. They're testing this subscription offering right now, Twitter Blue. They're testing a sort of revived API that would let them charge developers to

• 6:12Speaker 02

  use Twitter. But they just have not built a massive advertising engine or some other money printing business, the way that their peers have.

• 6:21Speaker 03

  Well, I think this puts the kind of bow on this is that Twitter IPO'd eight years ago at about $44 a share. It's currently at $42 a share. And that was after a massive run up with COVID. All the tech stocks went way up. Twitter cratered this year and now it's trading below its IPO price eight years ago. And I mean, I think that says everything we've been saying in a concise way.

• 6:49Nilay Patel?

  So one of the things I would say about Twitter in the past six months is they have had a run of product introductions and actual investment in the product at a faster pace than ever before. I think we have all sort of attributed that to their head of product, Kayvon Bakpor. He has come on Decoder. He's talked about how he's reset the product culture there. And what he really talked to me about was people at Twitter didn't believe that leadership was stable. So they wouldn't invest in long-term thinking and like ship on a roadmap.

• 7:21Speaker 03

  Well, that explains why they hired the CTO as the new CEO. But at the same time, it's like, oh, well, I guess the leadership still isn't stable. Why do you think they picked Agarwal?

• 7:32Speaker 02

  I think there are a couple of answers. One is he is really well-liked among the technical side of Twitter. He started there as an engineer. He's been there for 10 years. He has really good relationships with a lot of the individual contributors who are high up at Twitter. And when you think about what happens during a big CEO changeover like this, one of the things you look for is a lot of people quit, right? They say like, I'm out of here. And it'd be a really scary thing if Jack left and all of a sudden, everybody who knew how to actually keep Twitter up and running decided to lock up the door along with him. So I think there was kind of a continuity purpose. And then I think the other thing is people believe that he has some vision and that he's good at executing on it. So like, what's been the biggest knock about Jack Dorsey's leadership? He's not a full-time

• 8:15Speaker 02

  CEO. It's not even clear how much he works on the product at all. Now they're going to have somebody who's clearly devoted to it and has a proven track record of shipping things.

• 8:25Speaker 04

  I want to talk about that vision a little bit. When we talk about stock price, they need to start printing money. I get worried that the product is going to get worse, right? But it seems like they're doing a bunch of random stuff and I have no idea what's going to lead to money. And I will, in particular, has been in charge of Blue Sky, right? Like, and that's their, we promise we're going to make the decentralized future of social media, something, something, hand wavy, something. Is my understanding of what Blue Sky is? Do you actually think that there is a, like, a vision beyond continuity for what Twitter is trying to become?

• 9:00Speaker 02

  Yes, I mean, the idea behind Blue Sky is that you create a protocol, not unlike email, that any client could plug into if it wanted. Twitter's idea is that it would build that protocol and then itself would become a client of it. And the hope is that this would generate a lot of innovation and excitement in the social networking world. It would also mean that Twitter didn't have to make every decision about what speech was appropriate on the internet. You could have different variations of Twitter, some that were much more strict, some that were much more lenient. And maybe there would be kind of a big revenue opportunity in there somewhere. So that's the basic idea, but this project has been moving very slowly. It basically took them a year just to write a white paper about what this thing might look like.

• 9:46Speaker 02

  I assume we'll see it start to move faster next year.

• 9:48Speaker 04

  And then it took them like six months to make their first hire.

• 9:51Speaker 02

  Yeah.

• 9:51Speaker 04

  Yeah, which Parag led, and I think it's safe to say like the Blue Sky team, which Blue Sky is separate from Twitter. It's like a trust setup, doesn't actually know what Blue Sky is either. And yeah, I mean, Parag is super crypto, web three enthusiastic, as is Jack. And, you know, I think we should also note that Jack spoke at a Bitcoin conference in Miami a few months ago and basically said, if he could pick anything to be working on with his entire, you know, schedule, it would be Bitcoin.

• 10:21Speaker 03

  And so when you're already running a company like Twitter where you're about, you almost got pushed out by an activist, I think that kind of put the writing on the wall. I mean, like back to Casey's earlier point about why now and why did he leave? I think multiple things can be true at the same time. I think Casey's right that Elliot played a huge role. That's what I've heard. But Jack said publicly, and then again to employees and in all hands the other day, that it was his decision. He made that very clear. And it can be your decision if you know that someone's about to make the decision for you.

• 10:55Speaker 03

  And also, like you have, you're super excited about Bitcoin, Square is much more, Block is much more aligned with that. And so, yeah, so you leave and you get to help put your friends, someone who sees eye to eye on kind of where the internet is headed with Web 3 in your role. Even though, and I'm sure Casey, you've heard this too, I don't think Parag was considered to be the obvious choice. I've heard from several people that everyone's kind of scratching their heads going, wait, what? And then when you think about it, it makes sense, but no one expected him. He's got a pretty low profile internally and he didn't have a lot of reports. So definitely a bit of an odd choice.

• 11:32Speaker 02

  I had honestly lost track of who Twitter's CTO was because they had, you know, they had cycled through a bunch of them over the past five years, like they'd cycled through a lot of people in their C-suite. And then one day I just happened upon his, his profile and saw that he was the Twitter CTO. I thought, oh, I better like throw this guy a follow. And then it turns out to be the CEO. But I've never interacted with him. He's never spoken at any of the Twitter press briefings that I've been to. Like the guy really did have a low profile. When I thought, you know, because there was this brief time period where we heard that Jack was stepping down, but we didn't know who the CEO was going to be. Then I thought it's either going to be Kavon, uh, who runs product or Vijaya who runs legal and policy. And then it was Parag and I was definitely surprised. But then I immediately started talking to people inside Twitter who said, oh no, like this makes a lot of sense. Like Parag is definitely the guy, super smart, brilliant executor. So I heard way more positive stuff about him than

• 12:17Speaker 02

  I heard negative stuff.

• 12:18Speaker 03

  Yeah, I heard all positive and also that he's the least controversial choice. I think Kavon is loved by many and also is, has been a little bit divisive, um, in terms of just, you know, product at Twitter is such a, it's a messy, um, thing that people feel very strongly about. And he had to kind of roll some heads to, to get things where he wanted them to be. And I think that Parag was kind of the left field, safe, not well-known choice.

• 12:45Nilay Patel?

  A product executive who irritated people in order to get them to ship? What a surprise. Well, no one's ever heard of that paradigm before.

• 12:52Speaker 03

  They are shipping, but can, I mean, can we acknowledge that? And I think they would probably say this too. Nothing has really hit, right? So like fleets, I was told was the top product priority. Fleets was before spaces. They killed fleets. I don't think spaces is doing that well. I would be shocked if it's like doing what they expected it to do. And then, you know, what else is there? The Twitter subscription thing, I'm paying for it. I'm not really sure why I've got a new app icon on my home screen. Can turn it into a holiday one. Uh, I get to.

• 13:23Nilay Patel?

  You can read the version without ads.

• 13:25Speaker 03

  Yeah, yeah. Which like, you know, I mean, I just don't really, nothing has really hit for them in terms of new products yet.

• 13:32Nilay Patel?

  Actually, you know, it's funny that that part of it, the read the version that adds, many sites are participating in this. But that was from an acquisition of a company called Scroll. And they actually reduced the functionality of Scroll.

• 13:44Speaker 03

  Yep.

• 13:44Nilay Patel?

  So Scroll used to let you just like, it was a, you would install an extension to Safari on your phone. And then all the participating sites would be without ads. Now it only works if you come through Twitter, which is, you know, fine. Like I read a lot of sites through Twitter, but it's also like, why don't you just keep it good? I really quite liked the way that it was working before. All that to me, this stuff hasn't hit, right? There was a time when Clubhouse had like a $4 billion valuation.

• 14:11Speaker 03

  Oh, it still does.

• 14:12Nilay Patel?

  It's still a private company, right? Like on paper, it's still worth quite a lot of money. But there wasn't the excitement about Twitter Spaces, even though Twitter Spaces appears to have just destroyed whatever social value Clubhouse had. Why don't you think the products are hitting?

• 14:28Speaker 02

  Well, I think Twitter Spaces is doing a lot better than Clubhouse. I maybe.

• 14:32Speaker 03

  Is that not, not a low bar?

• 14:34Speaker 02

  It is, it is a low bar, but we, I don't know. We typically have a pretty low bar for Twitter too. And I do think that they managed to clone Clubhouse at impressive speed. I mean, like, this is sort of one of my favorite things to laugh about this year is if you're the people running Clubhouse, the only thing that had to go right for you is that Twitter did not successfully clone your product, which throughout the entirety of human history would be the safest bet you could ever make. And guess what? You pulled the Joker card. So I think Spaces definitely has problems. There's actually a lot of great people in my Discord server this week have been posting just images of what they see at the top of their Spaces feed, and it's a lot of white nationalism. So that's very bad. But I do think it's a much more natural fit inside the Twitter product. And

• 15:19Speaker 02

  you know, speaking for myself, I am using it about once a week. We're, you know, I've with my friend Kara Swisher, like, we have thousands of people showing up on a weekly basis to hear whoever we're interviewing. So I do think there is some juice there, and it's a promising area for them to explore.

• 15:33Speaker 03

  I agree with Casey that there is something there. I'm just saying, what Spaces will be in the context of Twitter broader, we do not know yet. And it also, I don't know, I've just talked to some people on product there who have said it feels like kind of throwing spaghetti at the wall. And they saw Clubhouse, and they were like, oh, this is something we need to throw at the wall because of Clubhouse. And you're right, they did it. They executed faster than they ever have, which is maybe showing that they have some hope and they can, even if it's copying, maybe it'll work.

• 15:58Speaker 02

  Also, like, we want Twitter to throw spaghetti at the wall. The problem with Twitter for 10 years is it tried nothing. And now it's trying something. And we want to encourage them. And we want to say, try more things.

• 16:08Speaker 03

  Do you guys remember when they were gonna make tweets 10,000 characters? Do you remember this?

• 16:12Speaker 04

  Yes.

• 16:12Speaker 03

  And then Jack Dorsey went on like a morning show, and he was like, actually, we're not gonna do, we're not gonna change it at all. And then I know for a fact that the product team that was working on that was like, wait, what?

• 16:23Speaker 03

  And then they finally do 280. And that's arguably the biggest change Twitter has made at like a core layer in like, what, eight years?

• 16:31Nilay Patel?

  Yeah.

• 16:31Speaker 04

  I don't.

• 16:34Nilay Patel?

  Well, so actually, on Spaces, Kavon told me on Decoder that Spaces is just Periscope rebranded.

• 16:39Speaker 02

  Yeah.

• 16:40Nilay Patel?

  Yeah. So like, they'd already built it, and they just turned off the video.

• 16:43Speaker 04

  Yeah.

• 16:43Nilay Patel?

  Which is very good.

• 16:45Speaker 04

  By the way, it's just, it's just Space, my Spaces, maybe it's like, who I follow, the people that I follow, is just nonstop people pushing crypto.

• 16:56Nilay Patel?

  Yeah.

• 16:56Speaker 04

  Just, just not discussing crypto. Like, it's pretty clear that a bunch of these are like, some kind of pump and dump. Anyway.

• 17:02Nilay Patel?

  Did you, I mean, have you, have you pumped and dumped?

• 17:04Speaker 04

  I've not, I, I do not.

• 17:05Nilay Patel?

  Have you bought any Tupperware? Have you bought any Tupperware on Twitter?

• 17:10Nilay Patel?

  Anyway, so Casey, you've brought up the two execs, right? Kavon, who runs product, Vijaya, who runs policy, and then obviously the sort of unknown in Prague, who became the CEO. I would guess that if you had to look at the choices in front of Twitter, the actual Twitter problems are, one, the product needs to move faster, and then, two, the regulators are constantly and forever swarming, right? And the speech, policy, content moderation, there was a Francis Haugen 230 hearing on the Hill this week. Like, those are the problems. Whether or not you're going to successfully decentralize the protocol and have everybody

• 17:51Nilay Patel?

  do a CryptoPunk avatar, you'll never get there unless you solve the problems of today, right? Which is make it safer for advertisers and grow the revenue base, or build some new products that grow the revenue base, and then somehow navigate this thicket of angry regulators around the world.

• 18:09Speaker 04

  Yeah, but Eli, those problems are super boring. Crypto is fun.

• 18:13Nilay Patel?

  I assure you those problems, I agree, those problems are boring. But like, the most telling moment of all of the hearings you've ever covered are, I don't remember who it was, but some senator was yelling at Mark Zuckerberg, and Zuckerberg had to remind him that he was in charge of Facebook and not Twitter, because what the senator wanted to yell about was Twitter.

• 18:31Speaker 04

  Oh, yeah.

• 18:32Nilay Patel?

  And he was like, I don't actually run Twitter. This, I mean, but those are the problems. Like, you can't solve Twitter, you can't make Elliot more money, you can't grow the revenue, you can't build, unless you solve the two fundamental issues. So why not pick one of the people that is most directly engaged with the two fundamental issues?

• 18:52Speaker 02

  So, in terms of like, why not Vijay? It's like, there's just never been a policy legal person appointed head of a big tech platform. So even though I think to me, it made a lot of sense, like, people who care about Wall Street said that that one was a nonstarter, you know, with Kavon, I do think he was divisive. I've also heard, like Alex has, that, uh, yeah, he has ruffled some feathers by, you know, making them ship on a more regular cadence. But I also think that Wall Street doesn't really just see this as a A product problem. I think they want somebody who takes a bigger view. And I think whoever was pushing for Parag, whether it was on the board or whether it was Jack himself, I think was making the case that Parag had a really big vision.

• 19:32Speaker 02

  And, you know, if you want to sell a story to a board, I think saying, "We're going to crypto all the things," probably goes over a lot better now than like, "We're really going to optimize spaces."

• 19:45Speaker 03

  Yeah, Neil, I hear you on the policy thing. I think, and I think people at Twitter would probably agree, that the policy thing is actually maybe a third or fourth or even fifth order foundational problem for them. I think the two biggest problems that Twitter has always struggled with, they have never figured out, is that they can't get normal people who don't live their lives consuming news or politics or whatever, to use Twitter beyond passively checking it. They can't make the timeline interesting for them. They can't get them to tweet. It's a big problem for inventory. And they can't make money. And those are the two things that that's the reason Elliot came in, that they gave them this absurd user growth target that I was told everyone internally laughed at, thinking they're going to hit over 300 million day use in like 2023.

• 20:29Speaker 03

  It's like more than double, you know, growth that they've had. And so that's why they've been throwing spaghetti with product stuff. And they're just trying to figure out how to get normal people to care about Twitter. And I'm not sure that a decentralized protocol is going to do that. Normal people don't understand this at all. And also, like, someone was, an employee was pointing this out to me, like, "The ad model relies on centralized data. That's how ad targeting works." And so how in the world are you going to continue having an ads business if you're trying to decentralize yourself? So these are all problems they haven't figured out, but I would argue those are like, kind of the top two.

• 21:04Nilay Patel?

  Well, the decentralization conversation, it all started because Mike Masnick at Tech Dirt wrote "Protocols, Not Platforms," which everyone should go read. It's very good. And Jack Dorsey was like, "This. This is what I'm doing." And then he was like, "I'm going to decentralize Twitter." And the reason that all stemmed from how do you solve the regulatory problem? Right? You decentralize the protocol, you let everybody have clients. If you want to run NaziTwitter.com, you're good to go. If you would want to run brand-safe, no-Nazi Twitter, that's what most people will pick, and Twitter will run that and probably be the dominant player in that space. Right? Like, you see the thinking, but that's, it's a long way away.

• 21:44Nilay Patel?

  And it's still just Twitter, like instantiations of Twitter itself. It is not what every other tech company does, which is launch another product or another category or buy something.

• 21:58Speaker 02

  But the other tech platforms are in a better position, right? Like if you're Facebook and you launch a new ad unit like that could, you know, tack on billions of dollars in revenue, whereas Twitter needs to make a big change. And so I think for them, the idea of having a North Star that is far enough away that they might not hit it, what we used to call a moonshot here in Silicon Valley, is a really good thing for them. You know, I'm not saying necessarily this will be the thing, but they actually have to do something ambitious for a change.

• 22:27Nilay Patel?

  Do you think, do you think Proggs has got to do it?

• 22:30Speaker 02

  I don't, I don't know him well enough. Like what I can say is the people who work with him are all telling me that he's the real deal. And that's not like comms people, you know? But we just don't know, you know? I mean, my hope is that sometime in the next couple of months, like he starts giving interviews and starts telling us a little bit more about his way of thinking. I hope he launches some products, right? Hope he comes on Decoder, you know, like we need to hear more from this person.

• 22:53Speaker 03

  He told employees in his first all hands as CEO, I was told that he's going to share more about kind of company vision in the next couple of months. It was pretty light on it, but I think the vibe I got from a couple of people who listened is that he has a different vision, at least slightly different than what's been in place. And so, yeah, I do expect him to share more. He is speaking at a banking conference, I think it's Morgan Stanley next week as first time as CEO. So I think he is going to get out there, but he has had a very low profile. He's done like maybe less than five interviews, so.

• 23:23Nilay Patel?

  And his two public things are both content moderation related, right? He has like two blog posts.

• 23:28Speaker 03

  Oh, you mean blog posts? He did an interview with the information about kind of fixing Twitter's technical debt and scaling them with like relying on third party cloud providers. That's been a big focus of his because Twitter has actually has had a lot of problems with that. So I know he's been focused on that, but yeah, the couple of things have been policy related as well. Yeah.

• 23:47Nilay Patel?

  Yeah, they fixed the image cropping and they, and then.

• 23:50Speaker 03

  Which was an AI problem that he worked on.

• 23:52Nilay Patel?

  Yeah.

• 23:52Speaker 03

  And so it's, you can see the intersection of policy and AI and his world there for sure.

• 23:57Nilay Patel?

  Yeah. And then.

• 23:59Nilay Patel?

  Like the same day or the day after Twitter rolled out a new policy about posting media private individuals, which we could probably spend an hour on. Everyone hates it is like the sum total of what you need to know about this policy. And I anticipate it will change in some way. But I just keep coming back to the public perception of Twitter, even more so than maybe the public perception of Facebook now, because they've changed their name and they're running a lot of ads of people dancing in Oculus headsets. The public perception of Twitter is that it still has a content moderation problem. And if you're gonna, I think if you're the CEO, you either have to provide something new and shiny and distracting from it, or you have to solve that problem, which might be unsolvable, or you get a lot

• 24:41Nilay Patel?

  of people in Casey's Discord posting white nationalists based screenshots. Like, that's just a big problem that I'm very curious to hear what his perspective on it will be. Because Jack's perspective in every hearing and every conversation was, gosh, that seems tough.

• 24:59Nilay Patel?

  Right. And which might be the right perspective.

• 25:01Speaker 03

  Let's give Jack a little more credit.

• 25:03Nilay Patel?

  To just look at it and be like, this is very difficult and I'm gonna make sure. I think he was good at communicating about it. But he was never like, I'm gonna make hard decisions in favor of some values. He was like, I'm aware of the trade offs and we're gonna try to balance them as best we can. It's very hard.

• 25:17Speaker 03

  Jack is a Bitcoin stan. Like, like, I think, like, what he has been saying more towards the end of his tenure is that Twitter shouldn't be making these decisions. And so that's the whole idea of like a marketplace of algorithms, a marketplace of protocols. It's more like, can we create a platform where we do not make these decisions, which is similar to what Zuckerberg says, but applied in a very different context that's informed by his Bitcoin maximalism. So, I mean, yes, he's been saying it's hard, but he's also been saying like, this is why we're doing all this decentralized stuff is like, we don't want to be involved in this. We shouldn't be, which, you know, whatever you want to believe there.

• 25:54Nilay Patel?

  I want to talk about Jack and Block and crypto. We'll take a break and do that. But before we do that, I just want to acknowledge this somewhat odd moment we're in, where all of the founders are either looking at something else than the products they made that made them rich, or just quitting. Right, Bezos stepped back from Amazon. He's now, he thinks he's a cowboy, from what I can tell. Space cowboy. He's a space cowboy. Obviously Zuckerberg rebranded the company into Meta. He's very focused on the Metaverse and not necessarily the Facebook problems. We'll see if that works out. But he obviously made a change in focus. Jack has stepped back. Before that, you had Larry and Sergey

• 26:37Nilay Patel?

  stepped back from Google, restructured the company into Alphabet. Sundar is now the CEO of both Google and its holding company, which I think reveals something very important about the status of the holding company. Obviously, Sachin Adella is at Microsoft. None of the founders are there anymore. This does seem like a pretty big moment, right? Where the big players in tech have reached their levels. The founders are off onto the next thing. It's Evan Spiegel left, who cares about the products he made. That's about it.

• 27:08Speaker 03

  Well, and Evan's really focused on AR and spectacles and like hardware, which is not how Snap makes money. Like he, like he's not really focused on the ads business. So yeah, I guess you can get to a point as a founder where if you build a scaled network, I guess you have the luxury of deciding I'm going to focus on the thing that I don't make money on. It seems to be the trend.

• 27:27Nilay Patel?

  Yeah. And I would also, Tim Cook also very focused on AR and whatever cars hobby he's doing. He's now in the textile business. Alex, I don't know if you got a cloth yet. Yeah, where's my cloth review?

• 27:38Speaker 03

  It's still on the port, man. Come on. Still in Long Beach.

• 27:42Nilay Patel?

  But Karrick Swisher did an interview with Cook on Sway, maybe a month ago now, two months ago. And he's like, I'm not going to be the CEO of Apple in 10 years. Like even he is looking at the finish line. So we're just, I think it's an odd moment. And I think the wave of excitement is all around Web 3 and blockchain and crypto, which is fascinating.

• 28:03Speaker 02

  So I mean, a couple of things. One, I think it makes sense that, you know, these kings would not wish to rule forever. These are very hard, all consuming jobs. I think if you put it in 20 years, it's something like Bezos did, it makes sense. Do you want to go do something else? I also just think when like the kind of person that founds a company like this is just not well suited to running it for like 20 25 or 30 years, right? Because like the whole reason that you won is you're sort of smart and shrewd and always thinking like 40 steps ahead. And now we are in a moment, to your point, Neelai, where a lot of the questions are intractable and cannot be solved by technological innovation. Right? We're not going to AI our way out of content moderation problems. The third thing that I think these people just pay attention to each other, right?

• 28:47Speaker 02

  Like, I think when Jeff Bezos stepped away, like Mark Zuckerberg is probably like, yeah, I guess like I'm probably going to do that too. Right? You know, maybe he did that before, but like it, it just sort of makes sense to me. And also just like, okay, I guess I said that was, I was only going to say three things, but a fourth one is you look at where all the energy is right now, like in Silicon Valley, and it is not around making these platforms the best versions of themselves. It's about starting from scratch on the blockchain.

• 29:13Nilay Patel?

  Yeah, it's just, I think the plot of succession would be a lot different if after 20 years later, I was like, screw it. Blockchain, right? Like there's another conception of business leaders that we have traditionally had, which is that especially the ones with dynastic control of their companies, which Zuckerberg has, which Bezos has.

• 29:33Speaker 02

  Spiegel has, yeah.

• 29:35Nilay Patel?

  They tend to not just like bail. Dorsey didn't have it, so maybe that's why he's out, but all the rest, like they, they control these companies in ways that, short of, I don't know, like kidnapping, you cannot make them relinquish. And even that, I think probably it wouldn't go well. I think it's, it's notable, maybe to your point, Casey, like their personalities are pointing at the next hardest problem and not milking the thing they made forever. All right, we need to take a break. We're going to talk about Jack Dorsey, Block and Web 3. We're doing, I'm, we're saying it out loud on the show. I think that's the first time. We've said it like 10 times already. This is the episode. We took a break, went to Thanksgiving. Now we're saying Web 3. We'll be right back.

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• 31:23Speaker 04

  All right, we're back. Let's talk about the other thing Jack Dorsey did. He left Twitter. He's like, it's my decision. Super proud of this guy. Good luck to you. I'm off the board too. And then the next day, he changed the name of his other company, Square, to Block. There is a great meme today about Block leadership page and what the avatars look like.

• 31:45Nilay Patel?

  Turn yourself into a Block head.

• 31:48Speaker 04

  It's a lot. Alex, what is going on with Block?

• 31:51Speaker 03

  Yeah, Block is the new holding company that was once Square. It includes Square, Cash App, and a couple of their kind of Bitcoin crypto moon shots to keep that word going.

• 32:05Speaker 04

  Wait, can we, can we just, hold on. Is it a holding company like Alphabet's a holding company? Or a holding company like Meta is a holding company?

• 32:12Speaker 03

  Neither? I don't, I don't know. I mean, I think they're going to be reporting things the same on earnings. So if that answers the question, then I think it's more like Meta, even though Meta is going to change how it reports things a little bit on the next earnings.

• 32:26Speaker 04

  They also have title under this holding company, which is like-

• 32:29Speaker 03

  A title, which is like, why? Right? Yeah, like title's there.

• 32:34Speaker 04

  I think this, I think this makes sense. If you're going to get into Bitcoin, you actually want to have a little bit of distance between your crypto stuff and Square, which needs to be rock solid, reliable. Don't think about it. Safe for small businesses, just use it. So like you want those, those ideas separated out from each other a little bit. The Cash App is there and having that feel a little bit more separate from Square also makes a kind of sense. It's sort of a different thing. And yeah, you got title, which obviously-

• 33:03Nilay Patel?

  Look, I saw a piece this week about how crypto can change music. Sure. There you go. I mean, I will say the Block homepage, which is block.xyz, like at the top is a playlist curated by Jay-Z.

• 33:15Speaker 03

  Oh, that was sick. First corporate tech rebrand with a Jay-Z playlist.

• 33:19Nilay Patel?

  Like, alright, maybe that's why they bought Tidal.

• 33:23Speaker 03

  Also, Jay-Z has way too much time on his hands. My read on that situation.

• 33:27Nilay Patel?

  Well, I mean, he's also a billionaire. He's like on to the next thing. He's like, I'm good with this. Like, making dad rap is like not where I need to be in my life.

• 33:37Speaker 02

  Talk about content moderation. How about putting out a better album, Jay?

• 33:41Speaker 03

  Ooh.

• 33:42Nilay Patel?

  Wow.

• 33:43Speaker 03

  Hey, 444 is great. Um, I think the, so my favorite conspiracy theory with all this, with Block rebranding and Twitter looking at decentralized social media is that this is all a giant, and Jack stepping off the board, by the way, of Twitter, which is notable. He's not just, he's relinquishing his board seat, which is highly unusual for a founder, um, to do a clean break. Is that this is all set up for Block to buy Twitter and it become this decentralized social media version of.

• 34:12Nilay Patel?

  Wow.

• 34:13Speaker 03

  And, and like, Jack has wanted to do this before, I've heard. He's like floated the idea of like, how can Square and Twitter work closer together? Potentially merge. It's obviously never gotten serious, but I could see it.

• 34:26Speaker 02

  Okay, so, yes, so I have considered this too, and it is the fact.

• 34:32Speaker 03

  Buying Twitter, you mean? You've considered it also, just like Jack?

• 34:35Speaker 02

  Buying Twitter, but like Disney, I find the content too toxic.

• 34:39Speaker 03

  That's what I'm doing very well.

• 34:42Speaker 02

  But, uh, I think the, the fact that Jack left the board lends credence to the idea that Elliot pushed him out. Because Alex and you all will probably remember that the way that Jack was able to finagle his way back into the CEO role was that the first time he was fired as CEO, he was able to maintain his board seat. So if you're Elliot, you know that history and you're saying, fool me once, shame on me, but not again. You're out of here, buddy. Right? So I'm sure that Jack does want to do this, but I think it would be easier if he were still on the Twitter board and now he won't be. Now, that's not to say that he won't continue to have good relationships with a lot of people there, that it's still not possible. But I do think it would be easier if he had some formal role left in Twitter. So if that's what, if that's what he wanted and he were actually empowered to do it, he would still be on that board.

• 35:25Speaker 03

  Right, that's fair. He's definitely not empowered to do it. I'm just saying it's a great conspiracy theory.

• 35:30Nilay Patel?

  Well, no, this is like when Stephen Elope was sent out of Microsoft to Nokia and then sold himself back to Microsoft. Jack leaves, he appoints his guy, you know, and eventually they're going to release a Windows mobile cellphone.

• 35:45Speaker 04

  I mean, keep your eye out for a burning platform memo out of Twitter. I mean, it is literally a platform that they're trying to build here.

• 35:51Speaker 03

  There's a lot of weird stuff happening. We haven't even talked about Brett Taylor, the new board chair of Twitter, which unlike Meta, actually has significance and like governance power being the board chair of Twitter because it's not a dual-class control company. He was also, so he gets named, he's, he's, he's been the COO of Salesforce, super like connected guy in Silicon Valley, been on the Twitter board for a while. He gets named board chair on Monday. On Tuesday, he gets named co-CEO of Salesforce and then the information puts out a story saying he's actually still reporting to Marc Benioff.

• 36:22Speaker 02

  So embarrassing. Can you imagine telling your, telling your parents that you actually still report to Marc Benioff after you've just been announced as the co-CEO? I would be mortified.

• 36:34Speaker 03

  Well, I'm sure Brett is, he's, he's laughing to the bank, but like the idea that maybe there's something connected with all this. Like what was going on? Like, why did he get this random co-CEO role that's kind of like a fake role? And then the Twitter board chair, like, there's drama here that we do not fully know. And that's just my way of saying, I wish I knew it. And if you know it, reach out.

• 37:00Nilay Patel?

  So we don't quite know what Block is going to do, except put out a great webpage. But they own a bunch of stuff. It is true, they bought Tidal, they never really told anyone why they bought Tidal. It is also true that a lot of music people are very excited about blockchain ideas.

• 37:18Nilay Patel?

  And like NFT tickets to concerts are like already the thing that you can see happening because it's a big database and you can sell tickets on it like, but musicians are very excited because their revenues on platforms like Spotify and Apple Music are so low. So all kinds of artists are very excited. You can see there's some swirl there. At the same time, David Marcus, who was in charge of Facebook's cryptocurrency project, just like bailed this week as well. It was called Libra. We have dunked on a thing called Libra many times on the show, but they changed the name to Novi.

• 37:56Speaker 03

  There's been five name changes, Neil, I swear to God. Like it's, it's like Meta, the company formerly known as Novi, the crypto formerly known as, that was formerly known as, that was formerly known as. I mean, it's literally like four revisions, but yeah, Novi, no.

• 38:10Nilay Patel?

  So David Marcus leaves, he puts out a bunch of tweets. It's like, I'm still really interested in this. In terms of the drama, we don't know. It feels like, are you just going to end up at Block? The company that wants to do this thing in a successful way that Facebook doesn't seem like it will ever get its head around. And then on top of all of that, Mark Zuckerberg is on and on about the metaverse. And to me, the only compelling NFT story that I've heard is you will travel from virtual realm to virtual realm and your stuff will come with you. Cause it, that's already how like Meta mask works, right? Like you have an Ethereum address and then you can like log into another website. It just like reads the blockchain and all your stuff comes with you. And that's like a core principle

• 38:54Nilay Patel?

  of the metaverse at this time. It's just, there's just like a swirl of stuff going on here that I, with Facebook that I like, kind of don't understand. Like they desperately need this to happen for their metaverse play to work, but their one and only crypto initiative has been a.

• 39:10Speaker 03

  Like an epic disaster and the guy just left.

• 39:12Speaker 02

  I think a good question that I would like to see more reporting on and could presumably do myself, if I could rouse myself to the occasion, is how much of the Facebook crypto failure is on David Marcus and the leadership team and how much is on just the regulatory crap storm that they wandered into because people hate Facebook? I think the latter was definitely very real as they engaged with regulators around the world, they found a lot of skepticism, they were sort of engaging at what may, looking back, have been the peak of people freaking out about Facebook's size and anti-competitive practices. And so the idea that it was going to take over all of global payments, they just basically ran into brick walls everywhere and that sort of helps explain why they had to rebrand

• 39:56Speaker 02

  it several times. You know, but at the same time, under Marcus, like they would bring these people into their partnership, their little consortium, and then those people would just bail. And I think that actually does sort of speak to leadership there, right? It seems like these companies were not getting what they were promised when they, when they signed up to be part of this thing. And that chain of departures from the consortium really just made this thing look like it was snake bitten from the beginning. So, look, Facebook still wants to own payments. I don't think there's any reason why they have to do payments on the blockchain. Like, they could just do frickin' payments and it would probably be fine, even though they would also probably run into some regulatory headwinds and they can't talk about how it's innovative and how they're, you know, bringing economic freedom to the developing world. So, I don't know.

• 40:41Speaker 02

  I think it's definitely been one of their biggest failures of the past like five years that doesn't involve democratic erosion.

• 40:49Speaker 03

  Yeah, definitely. And like, you know, what, in terms of what Marcus can do next, you know, he was the former president of PayPal. He is a, you know, very early crypto believer, probably has untold personal wealth in crypto himself. And I had a couple, like, Facebook execs joke to me that he could just go raise like a billion dollar seed round off of a paper napkin for like, pretty much any company he wanted to go start. So I imagine he'll probably start a company. And I imagine this was a little bit of like hitting your head against a wall repeatedly for three years and also seeing all the kind of hot activity in crypto and Web 3 startups and having some FOMO. I imagine it was a combo of that.

• 41:28Nilay Patel?

  So Casey, even covering a lot of the crypto startups, a lot of the Web 3 stuff, I will just tell everyone, Casey has looked me directly in my eyes and told me crypto was a blind spot for me. Which I don't disagree with. But over the past couple of weeks, the Constitution Dow happened. Macy's sold a horribly ugly gif of a dragon for $310,000 on Thanksgiving as an NFT. I would say there's a break here between the traditional crypto stuff, which is financial services and decentralized financial services and Bitcoin taking over for the US dollar or whatever.

• 42:11Nilay Patel?

  And then, oh, you can buy a bunch of stuff. And if we all just like close our eyes and make believe, we'll pretend that that counts as ownership of things. Because underneath the NFT, there's a lot of belief that maybe isn't represented by the thing you're buying, right? Like, that's the core of my skepticism.

• 42:31Speaker 04

  Before the Vergecast, I demanded that we not let this turn into a freshman jam session in the dorm room. But Deli, if you think about it all, ownership is just belief.

• 42:40Nilay Patel?

  That's true. Fine. The question I was leading to with Casey is you've been talking to a lot of these folks. We have mentioned several times now that this is where the energy is. This is where the executives who have built the previous generation of big tech companies seem to be turning their attention to. I'm just like, why do you think that is? Besides the dollar amounts?

• 43:01Speaker 02

  Yes. So besides just pure greed, I think one is the sense that there's not that much left to be built on the internet that we have, that all of the white space has been carved up by five big platforms and nobody else can get anywhere meaningful. And so if you're an entrepreneur and you want to have a big impact, you want to look somewhere else. And I do think that explains some of the religious fervor that you see for these crypto projects is we're determined to invent something that doesn't look like this current generation of companies that we have. But what gives them the sense of purpose and the sense that they're doing something really positive for the world? Well, it's when you look at the big platforms that we have, for the most part, while we benefit from some of the services that they provide, we don't really share in any of

• 43:46Speaker 02

  the economic benefits that they have enjoyed, right? Live at a time of massively increasing inequality around the world. And it seems like five companies are capturing most of that value. So what these crypto folks want to do is to, by giving out these tokens and, um, you know, hanging on to these beliefs that might be somewhat, you know, based on mostly on faith. They're hoping that folks like you and me, just as we transact business on the internet, by where we put our time and attention and by what we think is credible and valuable, we ourselves will reclaim some of that value. So they see it fundamentally as a way to reduce inequality on the internet. And that is the story they are telling themselves as they tweet 4,000 times a day about, you know,

• 44:30Speaker 02

  their, their latest NFT.

• 44:33Nilay Patel?

  It is a good story. I think you could recapitulate that story using different words that make the trade off more obvious. And I think the trade off is really, really complex. So basically like Ethereum and NFTs, right? Is here's a big decentralized database that uses an awful lot of power. I saw a study yesterday that said, uh, the Ethereum blockchain uses five coal plants at full power worth of power, like that's its emissions output. I will say this study was not totally convincing because at the bottom it was like, the US dollar is backed by the US military, which emits more pollution. I was like, I don't, that's not, those aren't the same thing.

• 45:13Speaker 04

  But like, actually, just to like, finish the, the discussion on emissions. It's really frustrating because it's like, hey, I am not sure about this because of environmental stuff. And then it's like, well, we'll fix it next year. It's like, well, no, you won't. Well, you're just, you're just, you actually don't care about the environment. You're actually just a hater. Well, no, actually I do care about the environment and, but I am interested in this, but I have reservations. Well, we're going to fix it next year. Like this cycle of pro anti crypto stuff, like every time you try and go into any, any particular nuance of it, like just starts spinning up. And like, that is where I'm at with the emission stuff is like, yeah, uh, uh,

• 45:51Speaker 04

  but there's no way to like, finish that thought because it just, it gets sucked into the discourse so fast.

• 45:59Nilay Patel?

  Oh yeah. Here, I'll give you a dead ahead example. We had Scott Balsky, the chief product officer of Adobe on Decoder. And he was excited and he was like, Photoshop is going to give you the ability to mint NFTs and, or prepare for NFTs. And like, The amount of people who like our feedback was, why didn't you ask him about the environment? And I was like, because we know, like, we then we talked about other things. He just was announcing his new feature. Like, I don't know, like, maybe those NFTs are going to be on the Solana blockchain, which uses far less power. Maybe by the time this ships Ethereum, we'll go to the other system that they've been proposing for years. Like, there's something there that I agree with. It is a another kind of religious fervor, but it is crashing into the religious fervor

• 46:42Nilay Patel?

  around the blockchain, and nothing about that is productive. But I would just say to everyone, we know about the environmental thing. We cover it a lot. I think the emissions problem is huge. That said, you just look at it, in particular with NFTs and the things I've heard about NFTs. It's if we take the database away from Mark Zuckerberg and we make it this big, power-hungry, like, trustless database that runs on the blockchain, then we can all build applications that use this database. Okay, I still haven't seen an application that's really great. Like, that's where I'm still at, right? Like, I've heard a lot of proposals, but none of them actually implicate needing the big decentralized database.

• 47:24Speaker 02

  Sure, and waiting until someone builds one of those is a great way to not make any money and venture capital. So, I mean, this is sort of where we're at, right? Is that, you know, I have taken to calling Ethereum the world's worst computer for like all of the reasons you mentioned and others. I think it can handle like 15 transactions a minute or like something absurd like that.

• 47:43Nilay Patel?

  And it's very expensive when it does that. It's like hundreds of dollars.

• 47:46Speaker 02

  Yeah, you pay hundreds of dollars to do a single transaction, which is not a exaggeration, right? So like, all of this stuff sucks, but what the crypto religionists will come back and say is like, well, did you ever use a 14.4 bod modem, bro? And I'd be like, yeah, I did, and it did suck, you know, but we kind of kept doing it. Now, I would argue that the internet was more useful to me on my 14.4 modem than crypto is today in my crypto wallet, but I don't know. I'm a tech reporter. You have to believe some of this stuff is going to work. Like, if you're a tech reporter and you're just like, hmm, this thing that everyone in Silicon Valley is doing, I'm just going to stake out a position against it forever? You're not a reporter anymore, you're a historian.

• 48:25Nilay Patel?

  I believe you. And I, after Casey told me this was a blind spot, I've, I've worked hard to make it not a blind spot. I just keep coming back to, at the end of it all, the fees are high to transact on this inefficient database, world's worst computer. And that is the thing that will A, keep people away from it, or B, when it becomes more widespread or mainstream, it will lead to the financialization of more things, which I am not in love with. So musicians are really in love with NFTs because they can sell products directly in a way that they cannot sell music directly. But then you look at all the proposals about what musicians

• 49:06Nilay Patel?

  might be able to do with their NFTs, or selling fractional ownership of their singles. And you're like, oh, we're just creating a stock market for art. And like, some people are very excited about that. And honestly, the music industry is not the most pure, uncorrupt, like, fine.

• 49:24Speaker 02

  No.

• 49:24Nilay Patel?

  Uh, but it, there's just something, financializing everything is kind of icky. And that's every, every blockchain proposal involves some amount of financialization because you're trading against tokens.

• 49:35Speaker 02

  Yeah. And, and I, I agree with you. It's not that great.

• 49:38Nilay Patel?

  Yeah. Alex is like, everything is gross.

• 49:39Speaker 03

  Everything is financial already, though. Like, and the music industry has historically not been equitable in how it pays artists, right? So I think the hope with crypto is that you can have more equity and that you can actually make money off of like how people engage with your content, not just like how labels arbitrage you, which I think is a good thing. But yeah, like, I, hearing you guys talk about this, I'm just like, where are we at in this cycle? Are we like pre BlackBerry in the mobile phone era? Or are we farther along than that? Because there's going to be a huge trough of like disillusionment again, and like busts and people losing a lot of money. These NFTs are like, probably 99% of these are going to go to zero. Right? So it's like,

• 50:22Nilay Patel?

  Whoever bought the Macy's dragon for $300,000, if you're that person,

• 50:28Nilay Patel?

  Call me. I'll give you, I'll give you the full hour of Decoder to explain that investment. Right? Like, I'm dying to understand the psychology of that, or alternatively, the extremely corrupt financial scam that you just ran against Macy's on Thanksgiving. Like, either way, it's a great story.

• 50:46Speaker 03

  I mean, did you guys see the Matrix Resurrections thing where they did an NFT thing and like 250,000 people were in the waitlist to buy this like NFT and the site crashed and like, I don't think, a lot of people didn't even get theirs after they paid and like, the gas fees are more than the NFT. I'm just like, what is happening here? Like, a lot of people want this. Again, like 250 plus thousand people lining up for a Matrix NFT. But like, why? I don't.

• 51:12Speaker 02

  Well, the why is because there's a lot of value that has been created on the internet in the form of culture that is not captured by the person creating it, right? Like, if you want to sort of rewind back five years, remember all the conversations about black creators on Vine and how they would create these amazing memes and they would inspire dances that would go viral. We saw this story on TikTok too, and they captured none of it. And often their work was erased, you know, by, by the platforms or by white people stealing their work, that sort of thing. This is the place where I think this stuff merits exploration, right? Imagine being a creator and doing a dance and using some sort of financialization to ensure that you're able to keep a piece of that. If we want to talk

• 51:55Speaker 02

  about justice and equality, financialization may actually play a role in that. So, I agree. Like, I grew up on an internet that was free and where like my heroes like Andy Baio and Jason Kotke were just like putting cool stuff that I could enjoy like after high school. And I love that so much, right? Everybody just like doing unpaid labor on Tumblr, like making my life in my twenties. Amazing. But should people not be paid by their, for their labor, right? Like, people doing work demanding to be paid for it is one of the mega trends of the 2020s and it only makes sense that it's going to come to the internet.

• 52:31Nilay Patel?

  Yeah, I think there's, I mean, we're gonna, we are trying to program like 90 Decoder episodes about this. There's a lot there, right? Like, the interaction between that and copyright law is like fraught and tense. The interaction between copyright law and people believing everything on the internet should be free is fraught and tense. And you loop it right back to the right-click mentality, which is my favorite phrase, in the entire world, where people are just copying the NFTs and should be like, I stole your JPEG. Like, there's a lot of normative and legal change that has to come to make any of this work. And at the end of the day, even if you're like, here's a fractional token share of the Renegade Dance,

• 53:15Nilay Patel?

  TikTok's revenue model is not selling the dance. It is selling advertising around the dance. And so the platform revenue models have to change in like, meaningful ways. I think this is the story of the next five years. But I just think we're at this moment where A, all the founders of the, the social media companies and the other, the big tech companies, the platform companies are shifting their attention to this. And I would argue that financializing things creates the opportunity for more equity, because more people can get rich in a different way. But the history of the financial system in the United States is not like, oh, this democratized it for everyone. Right? It is, the people who figure out how to win the game tend to win the game.

• 53:58Speaker 02

  Right. But I think another big trend on the internet is that the internet hates a middleman, right? It's the Jeff Bezos, your margin is my opportunity thing. And that's why I think that the music industry probably is a place where we will see something like this take off. The record labels for the top stars capture so much of that value. And in fact, their business models essentially demand that they, they, they stake out those deals because they're going to take so many swings and miss so many times on people that they think are going to be the next big thing and then turn out not to be. Whereas, if you're already Taylor Swift, you don't need a record label, right? And so then maybe the blockchain becomes interesting to you. And if you're a creator, this may be the best way for you to realize the value that you're creating. So

• 54:37Nilay Patel?

  Yeah, I just, I don't know if I have a ton of faith that the technologies that we're creating are Eliminating middlemen, or if they say they're eliminating middlemen, but they're creating just a different kind of middleman. I know Alex earlier asked, like, what era are we in? Like, what's the right analogy for this? And are we like pre BlackBerry? I think we're like, pre.com. Like, there is no way that you can rationally look at the prices that NFTs are going for and not say that there is some sort of mania happening here. Right? And so there's going to be some kind of crash. And the question that I'm trying to answer is, after that crash, what technologies exist today? What things exist today that are going to like, persist and not get destroyed by the crash that are going to be interesting and create new things?

• 55:19Speaker 02

  Well, I think the idea of digital scarcity will survive. Like, what have we learned from the surge in crypto attention? It's that there are a lot of reasons why scarce objects on the internet can have interesting uses. I do still think we're in the dial-up modem stage of all of it. But I think digital scarcity is the idea that's going to endure.

• 55:40Nilay Patel?

  Yeah, it's funny, we have now, like all conversations, we've arrived at Taylor Swift.

• 55:46Speaker 02

  My number one on Spotify rap this year.

• 55:48Nilay Patel?

  She's a really interesting example, right? Not only because she is re-releasing all of her music, despite the sale of her catalog to another record label, but because famously, she did not want to have her music on streaming services. Right? She was like, very convinced that Spotify and Apple were devaluing the music. She wrote a long essay in the Wall Street Journal in like, 2014. And at that time, the argument was, you're never going to be able to sell your music. Like, people want streaming. If you don't, if you don't give into this, like, you will actually just disappear. And she held out for a while, and then she like, completely gave in. And now she like, has Spotify marketing events. I'm sure she gets a better rate than everybody else. But that's the thing I'm coming to, is the thing that makes Taylor Swift valuable,

• 56:31Nilay Patel?

  is in large part, now just Taylor Swift. She's just, there's only one of her. But it's the music, and her asset is no longer the music. And all of the stuff we're talking about does not actually make the music more valuable or create more money from listening to the music because you're still on Spotify. And that's the model that has to change.

• 56:49Speaker 02

  Yes, I think that the people that I've been talking to in the music industry about this stuff are only nibbling around the edges of it, but they're helping to inspire a new generation of artists with the idea of, you know, you don't actually have to give away 80% of everything when you sign your first record deal. And in fact, if you have a social following, you could just release it on the blockchain right now and maybe you can make a few million dollars. And I think that that could actually unleash some really great creativity, right? Think about the people who are signing these A and R deals. There aren't that many of them. I bet we're going to get a more, a much more diverse and fascinating selection of artists in a world where people can just use their social followings and the blockchain to create new stuff.

• 57:31Nilay Patel?

  All right. We only have a few minutes left with Mr. Heath. So Dieter, I'm going to allow you to troll him about the Pixel Watch.

• 57:38Speaker 04

  So there's a Pixel Watch. They're working on it. And Alex, you've been, you've been reporting on this as well. You've actually got more info than I've ever gotten. Tell us what we, what we heard today.

• 57:47Speaker 03

  Yeah. Insider put out a report angrily before I could get to it. Then we quickly corroborated that there is indeed a Google Pixel Watch in the works coming next year, unless they delay it. It's pretty high end, geared to compete with the Apple Watch, looks pretty sleek, has health features, connectivity features, and is totally separate from Fitbit, for better or worse.

• 58:13Speaker 04

  Yeah. Separate from Fitbit is really fascinating. Like, I don't know what that means.

• 58:18Speaker 03

  Well, Dieter, you know, Google likes to just kind of have like parallel competing projects that's pouring hundreds of millions of dollars into.

• 58:24Speaker 04

  That they're nesting Fitbit is really something. That should actually be the term from now on when Google buys a company and then like just lets it like flail for a while that it's being, it's being nested inside Google. I just wanted, the fact that the thing is codenamed Rohan, like, things did not go well for Rohan. Like, maybe in the end, I suppose, like they had, they had a win there, but like, a lot of people died, a lot of, a lot of kings didn't make it. Like, that was, that's, that, I don't know if I'd, if I'd name my, my big savior project Rohan. I'm just saying.

• 58:58Speaker 02

  Is there any word yet on whether this watch has its own dedicated messaging app?

• 59:05Speaker 03

  RCS, baby.

• 59:06Nilay Patel?

  I could address that. There is, there is a problem with RCS working on multiple devices, uh, cause it's got the WhatsApp model, you know?

• 59:13Speaker 02

  Yeah.

• 59:13Nilay Patel?

  But they are actually working on fixing that. And there's no architectural reason that they couldn't do that.

• 59:19Speaker 02

  Just to be on the safe side, I would start spinning up Google Watch Messenger and require a separate login for that.

• 59:25Nilay Patel?

  Yeah. Yeah.

• 59:26Speaker 03

  Made by Allo. Yeah. And then like, so Meta, you know, I reported as also putting out a smartwatch next year that is like a little different. You can detach it and it's like a GoPro as well. So it's more communication focused, I guess. It'll be like, you know, Dick Tracy video calling on the wrist. I'm not sure if Pixel is going that direction. But what do we think about 2022 being the year of, um, the two dominant internet ad platforms trying to compete with the Apple Watch?

• 59:53Speaker 02

  Well, I mean, my number one question, when I go to make my purchase is going to be like, when I wear each of these watches, which one by wearing it, will I more improve my targeted ad recommendations? Who will get, who will get the better sense of my life and then use it to target ads at me? That's the nut that I hope they crack.

• 1:00:11Nilay Patel?

  How do you get past Apple blocking cookies? You just strap one of their devices to your wrist.

• 1:00:17Speaker 03

  Often, baby.

• 1:00:20Nilay Patel?

  Oh, man. I, if this is anything like the Pixel, they're going to release it. It's going to cost two thirds as much as the Apple product and then reflect it.

• 1:00:27Speaker 03

  It's going to be expensive. Yeah. Yeah.

• 1:00:29Nilay Patel?

  Yeah. We'll see. All right. Thank you very much, gentlemen. We got to take a break. We'll be back with Alex. There's actually breaking news to talk about when Alex sits here. So we got to, we got to take a break.

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• 1:02:04Nilay Patel?

  We're back. Alex Krantz is here.

• 1:02:06Alex Cranz?

  Hello.

• 1:02:07Nilay Patel?

  Krantz, there's a lot to talk about.

• 1:02:09Alex Cranz?

  There's so much.

• 1:02:11Nilay Patel?

  Just before you came on, there's breaking news.

• 1:02:14Alex Cranz?

  Absolutely.

• 1:02:14Nilay Patel?

  Do you want to break the news?

• 1:02:16Alex Cranz?

  Yeah, you will not hear it here first. You've probably already read it on the verge by the time you're listening to this, but the FTC is suing to block Nvidia's purchase of ARM, which is, I don't think, super surprising.

• 1:02:33Nilay Patel?

  It's not. The Europeans have hated it. Big companies have disliked this idea. Google, Microsoft, Qualcomm notably have said, don't let Nvidia buy ARM. There's a little backstory here. So ARM is an English company. They make processor designs famously. They don't make processors. ARM processors, the core designs are used by Apple, by Qualcomm, by everybody can think of. The, right? The reason we call them ARM chips is because they use the designs. There are many kinds of licenses you can have to ARM chips. Apple famously has an architecture license. Lots. You can just be in the weeds of what ARM is as a company, but they design the architecture of the processors. And a lot of people license those designs in various ways and they actually build them.

• 1:03:16Nilay Patel?

  Okay, ARM was SoftBank, the big Japanese company.

• 1:03:22Speaker 04

  Yep.

• 1:03:23Alex Cranz?

  Spent a lot of money.

• 1:03:24Nilay Patel?

  Huge investment ARM.

• 1:03:25Speaker 04

  Well, that was during the time when like SoftBank was like, it seemed like they were just investing in everything and might eventually own everything. And then like that period just ended like really fast. It was like everybody was getting a ton of money from SoftBank and then all of a sudden, no, just kidding.

• 1:03:38Nilay Patel?

  Right. So famously, the big, big SoftBank vision fund investment was WeWork.

• 1:03:44Speaker 04

  Yep.

• 1:03:44Nilay Patel?

  You can watch any number of documentaries on how that went. Anytime you want.

• 1:03:48Alex Cranz?

  ARM is a little different.

• 1:03:50Nilay Patel?

  ARM is a little different, but they, so but ARM was like this

• 1:03:52Alex Cranz?

  They make money.

• 1:03:53Nilay Patel?

  Functional, money-making, very important, central company to the tech industry.

• 1:04:00Nilay Patel?

  SoftBank is going through its troubles. They're going to sell ARM, they're going to sell to Nvidia for $40 billion.

• 1:04:05Speaker 04

  Yep. Not a, not a small amount of money.

• 1:04:07Alex Cranz?

  Big chunk of change.

• 1:04:08Nilay Patel?

  It seems like no one wants that to, to happen.

• 1:04:11Speaker 04

  Yeah.

• 1:04:12Nilay Patel?

  And so now there's the European block and now there's, uh, the FTC is going to block it.

• 1:04:17Alex Cranz?

  Yeah.

• 1:04:18Speaker 04

  I think one of the reasons it seems slightly surprising is it's hard to think of Nvidia as like a tech giant. And so it's like, oh yeah, Nvidia, they make chips, they're going to buy ARM. That seems fine. But the structure of what ARM is, that they make the architecture that everybody uses, like fundamentally, you like thinking of them as Switzerland, right? And Nvidia is not Switzerland. Nvidia competes with Qualcomm and, you know, Google and Microsoft as well. Like they're making their own chips too, based off Qualcomm stuff and based off their own stuff. So that I think is like fundamentally why you wouldn't want ARM to be owned by a tech company that also makes chips.

• 1:04:53Alex Cranz?

  And that, that's the FTC's complaint is that Nvidia is already using ARM chips and a bunch of stuff. And now it's going to be able to, like, the FTC is worried that, okay, you, you'll have an unfair advantage. You'll be able to get this, access to these designs and stuff before everybody else, or you have them tweak it so it works better with Nvidia. Cuda instead of whatever. No, um, they are not using it with with ARM chips. But yeah, so that's, that's kind of the, the major complaint. And I think that was a smart way to, to frame it for them. As like, you guys are already in the ARM business. You can't own the company that you're in the business with, building the chips that directly compete with other chips using ARM architecture.

• 1:05:38Nilay Patel?

  Yeah. So it's interesting though, because there's a, a number of parallels in the tech industry to that model. For example, Google makes Android and sells, or sells licenses with onerous terms, Android to other phone makers. Uh, that's true. They also make Pixel phones. It's not like the Pixel phones have a notable advantage over the Samsung phones. Like, they haven't been able to do it. Uh, Microsoft makes Windows licenses, Windows to laptop makers. They obviously have their own line of Windows computers. The other laptop makers seem to be doing fine. We could go all the way to Palm, Dieter. That was much more of a failure. No, no success was had by anyone in that situation.

• 1:06:23Speaker 04

  I would like credit for not making a WebOS joke when we were discussing Web three, because I was definitely working on one. I was workshopping it in my head about a phone running on Web three, and it was going to be the successor to the Palm Pre. And I didn't do it, but now I have, so you're welcome.

• 1:06:35Nilay Patel?

  Yeah. I think the big question I have for all of this is, there was a time when consolidation seemed inevitable and like everything needed to get bought. But ARM is a successful company that makes a lot of money.

• 1:06:46Alex Cranz?

  Yeah.

• 1:06:47Nilay Patel?

  It was never clear why they needed to get bought, other than.

• 1:06:51Alex Cranz?

  SoftBank needs to make money.

• 1:06:53Nilay Patel?

  SoftBank needs to make money, or like, only big things survive. And they're big, but not big enough.

• 1:06:59Speaker 04

  Well, and Nvidia, there was never clear what Nvidia needed ARM for. And I think that's one of the reasons people kind of got, I don't know, hives about it. Is it was, they were gonna, they were gonna, it was for AI and cloud stuff. And they were gonna, they were gonna bring AI down to the edge, you know, the intelligent edge, as, as Microsoft likes to do it. And they're just, it felt like there was a lot of hand waving about why, and why owning ARM would be so valuable to Nvidia that they would spend $40 billion. And if you don't have like, the most clear, obvious reason to buy a company, then you start to worry about the less clear nefarious reasons that they might want to own the company. And it's no surprise that Qualcomm and Google and Microsoft and a whole bunch of other people lined up saying, don't do this.

• 1:07:41Nilay Patel?

  Yeah.

• 1:07:42Alex Cranz?

  Right.

• 1:07:42Nilay Patel?

  Also, not for nothing, do you know who, you know, what companies hate each other? Just like deeply hate each other? Apple and Nvidia.

• 1:07:51Alex Cranz?

  It's so good.

• 1:07:52Nilay Patel?

  They just, they, I just never, it's weird. They usually not, but it, once upon a time Nvidia made some GPUs that went bad in Apple laptops.

• 1:08:00Speaker 04

  Yeah.

• 1:08:01Nilay Patel?

  And Apple just never forgave them. And that is the end of that story. And they, and 50 years from now, new Apple employees will sit down at orientation and be like, you can't trust Nvidia.

• 1:08:11Speaker 04

  Yeah.

• 1:08:11Nilay Patel?

  And that is just the lore of that company.

• 1:08:14Speaker 04

  Like, the garage is actually hardcoded into the M1 chip.

• 1:08:18Nilay Patel?

  We're not doing this. So, I mean, but this is like, I just think fundamentally interesting. It is unusual that most of the most interesting chips all use an instruction set. And it, Apple has, like, the core ARM designs, Apple has wildly diverged from them.

• 1:08:37Alex Cranz?

  Right.

• 1:08:38Nilay Patel?

  But there's just something that relates all of these products from all these companies. It is good for the industry. It means a lot of things can work together.

• 1:08:46Speaker 04

  Yeah.

• 1:08:47Nilay Patel?

  But this company seems to want to sell itself. And I, I think that all this pressure, we've talked so much about antitrust on the show. All this pressure is like, maybe everything shouldn't be consolidated. And I'm, I think this is like a good outcome.

• 1:09:03Alex Cranz?

  Yes.

• 1:09:03Nilay Patel?

  That this company needs to figure itself out. And Nvidia can't beat Qualcomm by giving itself access to the next generation of ARM designs first. Or like, doing weird licensing deals.

• 1:09:16Speaker 04

  Yeah.

• 1:09:16Nilay Patel?

  That ARM just has to like, sit at the center and remain like, a good supplier to these, these companies.

• 1:09:22Speaker 04

  The thing I don't want is a consent decree where they, they like, they're suing, but the end result is that they let it happen, but Nvidia has to promise to be nice for five years or whatever.

• 1:09:32Nilay Patel?

  Yeah. Cause that doesn't seem like this FTC.

• 1:09:34Alex Cranz?

  Four and a half years. That's how far they're going.

• 1:09:36Nilay Patel?

  I don't, that doesn't seem like this FTC. The Linacon FTC is not doing that. But we'll see what happens. The suits filed, you know, Nvidia could win, right? Like, that's an outcome. It's not blocked yet, but they're facing this scrutiny in EU, in the UK and the United States. So we'll see how it goes. Okay, speaking of chip news, there's yet more chip news, Alex. It was Qualcomm Day. Can I just say this? So Qualcomm had an invest, Qualcomm Week, they had their big event, announced a bunch of stuff. They let it out, they're gonna change the Snapdragon branding.

• 1:10:10Nilay Patel?

  Which is a big deal.

• 1:10:11Alex Cranz?

  Yeah.

• 1:10:12Nilay Patel?

  Right? I was like, oh, man, they're walking away from Snapdragon. No. The the new branding is that it's called instead of Snapdragon eight eighty eight. It's Snapdragon eight Gen one. And I'm just gonna put it out there that if you're pre announcing that you're making your branding more confusing. Like, maybe you should rethink that whole situation. Anyhow, tell us what Snapdragon eight Gen one is.

• 1:10:36Alex Cranz?

  All right. Every year Qualcomm has this really big event where they announce their new processor that's going to go in the phones for the next year.

• 1:10:44Nilay Patel?

  Yep.

• 1:10:44Alex Cranz?

  And and that's that's essentially what we got today, which is a Snapdragon eight Gen one. Like, they they looked at Intel and they said, this will be fine. Intel's got it on lock how to name processors. Yeah, let's follow.

• 1:10:59Nilay Patel?

  At least there aren't any lakes involved, right?

• 1:11:01Alex Cranz?

  Yeah, there are no lakes.

• 1:11:02Nilay Patel?

  Yeah.

• 1:11:03Alex Cranz?

  No lakes.

• 1:11:04Nilay Patel?

  Ponds.

• 1:11:05Alex Cranz?

  And it's interesting.

• 1:11:06Nilay Patel?

  Can I just contextualize the name real quick? There's also a Snapdragon eight CX Gen three. Yes. Okay. So it's just different from the the Snapdragon G three X, just to be clear. Okay.

• 1:11:24Alex Cranz?

  So this is this is going to be the first, speaking of ARM, we're going to go back to ARM. This is going to be the first Qualcomm chip that's using the the newest ARM processor. And in a lot of ways, like, forgive me, I think the Qualcomm like upgrades every year are kind of boring. Like, every year, it's it's generally Qualcomm Snapdragon phone processors have gotten faster. And then they announce a whole lot of really cool things that these chips can do that no one ever uses. Like, no company will will use any of the really cool things announced in these chips, like the ability to automatically mute weird loud noises that are happening when you're on a call. Um, I mean, I would like them to use that one.

• 1:12:08Alex Cranz?

  Everybody adopt that particular thing, but, but yeah.

• 1:12:12Speaker 04

  Let me make the case that maybe this will be good. So it's using the new ARM V9 architecture.

• 1:12:17Alex Cranz?

  Right.

• 1:12:17Speaker 04

  It's got new, uh, the new prime core, X2. It's got better performance cores, three of them. And it's got four high efficiency cores, plus it has a new GPU and they're promising 30% faster graphics at 25, with a 25% improvement on power efficiency. So the story with Qualcomm chips.

• 1:12:35Alex Cranz?

  I think it's 20% better performance and then 30% better power efficiency.

• 1:12:40Speaker 04

  Well, either way.

• 1:12:41Alex Cranz?

  Either way, it's gonna be faster.

• 1:12:43Speaker 04

  More efficient. The knock on Android chips is always that they, you know, Qualcomm is they're, they're getting smoked by the iPhone. Um, I suspect that when we get the next version of an A series chip, it will smoke the Snapdragon H N1. But these improvements and the fact that their power improvements seems promising. And I think that one of the reasons Qualcomm's improvements the last few years has been, uh, felt boring is they've had so much of their attention focused on getting 5G to not be a battery destroying monster. Right?

• 1:13:16Alex Cranz?

  Yeah.

• 1:13:16Speaker 04

  They've been trying to get, they've been pushing 5G nonstop. And so the focus on the APU and the, the core processor stuff, I think they, they needed to get 5G right. And so there's a new 5G modem, you know, blah, blah, blah, blah. So.

• 1:13:27Alex Cranz?

  The X65.

• 1:13:29Speaker 04

  Is that, oh, and then the last thing is that this is on the four nanometer process instead of the five, I believe. So they're making a nanometer jump. So my hope is that like, we will actually see some real performance gains here. But, you know.

• 1:13:40Alex Cranz?

  Yeah. Yeah. I like, I want to be optimistic. I'm going to be optimistic. This, this was probably the biggest, you know, this, the Snapdragon summit that, that Qualcomm does every year. This is probably one of the most eventful that they've had in the last couple of years is first, certainly the first one where I went, oh, I kind of wish I'd gone this year. Whereas usually I'm like, I'm fine. There, there was a lot that, that happened there. But we got, we got this new chip. We got their new developer kit that they're working on with Razor. That's like their version of the Switch slash the, the new Steam deck. So there was, they're, they're clearly thinking, we didn't get as much news on the competing with X86 front though.

• 1:14:24Speaker 04

  I mean, there's the eight CX gen three for Windows and ARM, but we're all expecting like the bigger leap to happen next year.

• 1:14:30Alex Cranz?

  Yeah.

• 1:14:31Speaker 04

  I gotta tell you, I, until I see something radically exciting or different with ARM, Windows on ARM, I'm just gonna be writing it off. I'm sorry. I want to believe, but I don't anymore.

• 1:14:43Alex Cranz?

  Well, and they're ending their deal with Qualcomm, who is essentially the biggest

• 1:14:49Alex Cranz?

  ARM, Windows on ARM maker, like, Apple's not gonna be licensing in ones. I mean, wow, that would be great. I'd be excited. Make a new Hackintosh. But, but yeah, so this is gonna be like, I think we're gonna see a little lull in, in Windows on ARM.

• 1:15:06Nilay Patel?

  Panos was at the Qualcomm event. He showed up.

• 1:15:09Speaker 04

  Yeah.

• 1:15:10Nilay Patel?

  Waved a laptop around.

• 1:15:11Speaker 04

  He said he was pumped. He did. So I mean, there's that. Yeah.

• 1:15:16Alex Cranz?

  He's super excited.

• 1:15:17Speaker 04

  Having, having spent my own personal money on Surface Pro Xs, I just can't be hurt again until I see some real improvement.

• 1:15:26Nilay Patel?

  Are we at the point with Qualcomm that Intel was at, well, continues to be at, but in particular, like five years ago, Intel would have events like this and they would show us a bunch of products that you could make with Intel processors.

• 1:15:38Alex Cranz?

  Yeah.

• 1:15:38Nilay Patel?

  And like, none of them had any partners or any plans to arrive. And he was like, why are you showing me this? And he'd be like, to show you the power of Intel's compute engine, or whatever nonsense they had to say that day. That's where Qualcomm is, right? They're like, we're, here's another Windows on ARM chip or a laptop. Here's Panos. Here's our chip to make Nintendo switches. Here's this weird Nintendo Switch thing that we made.

• 1:16:05Alex Cranz?

  Chunky, chunky boy.

• 1:16:07Nilay Patel?

  We're just at the point where they're like, here's cool stuff you can do with processors.

• 1:16:11Speaker 04

  Yeah.

• 1:16:11Alex Cranz?

  Yeah.

• 1:16:12Nilay Patel?

  And they're not at the point where they're like, here's our processor outperforming Apple.

• 1:16:17Alex Cranz?

  Yeah. I think that is what we needed to see. Like, everybody knows Apple does incredible ARM chips. I think it's like universally understood. Apple is really, really good at ARM. And now Apple has not only smoked them in phones where it was hard to like, compare. Like, you could say, oh, yeah, the, you know, what's happening in an iPhone is way, way better than what's happening in a Samsung Galaxy phone. And then they did these, these new M1 processors. And it's like, oh, no, Apple is really good at ARM processors. They have done what? Qualcomm has been failing to do for years now. And I really would have liked to hear Qualcomm like have a nice counterpoint to that at this event. And instead they're like, here's some really cool stuff we could do.

• 1:17:03Alex Cranz?

  That is unrelated to that entirely. Look, we put it in a little console.

• 1:17:06Nilay Patel?

  This is what Intel, Intel will be like, look at these drones we made. The drones have spelled the Pepsi logo in the sky. And I'd be like, I don't, are the computers gonna overheat and blow up? Like that's.

• 1:17:15Alex Cranz?

  That's what I care about. They're like, yeah, but data.

• 1:17:19Nilay Patel?

  You, you can't ship a chip for a phone. Like, yeah, there were years at CS where we'd be like, we're going to the Intel thing. And they'd be like, here's the latest Intel advanced cable box. Like whatever nonsense they were doing. They did show me a cable box once. That's why it's on my mind. And I'd be like, are you gonna make a chip for phones? And they'd be like, no, no, no, the drones. And I'd be like, no. And we would just do this dance. And the answer was they didn't have it. And they ended up where Intel is. Like, I feel like Qualcomm might be in that zone.

• 1:17:49Speaker 04

  Maybe, but like, the, the problem is like, they're gonna be, you know, how many hundreds of millions of phones based on this new Snapdragon? Right? Yeah. The, the difference between where Intel has been at, you know, they, they've got their core chip line for PCs. And then a bunch of stuff that they promised will be important. That, so Qualcomm is, they have their core chip for phones, then a bunch of stuff that they promised will be important. So that seems really parallel. The difference is that the phone market is an order of magnitude bigger than the PC market. And so they've got, they could just ride that for as long as they want until bringing it back to ARM. Other companies pull a Google or perhaps pull a Microsoft. Microsoft thing is Microsoft ARM chip was based on Qualcomm's.

• 1:18:31Alex Cranz?

  Or Samsung.

• 1:18:33Speaker 04

  Right. Or a Samsung, you know, like maybe Exynos actually like becomes a thing in the US. So if a bunch of people figure out, oh, wait, it's actually not that hard to build our own ARM chip and not pay Qualcomm quite as many licensing fees, like just a little bit less of licensing fees. They'll always be paying patent fees to Qualcomm because that's their core business. That they actually may need to have these like other things that they're promising there to distract from like people over the next five years slipping away out of their, their core phone business to make their own.

• 1:19:05Nilay Patel?

  That's true. And I'll say that, um, no one makes a 5G modem in America except for Qualcomm at this point in time. Apple, the rumors that Apple's, you know, they bought the Intel modem division. Rumors are testing it, but it's all Qualcomm all the time right now. So yeah, I'm not, I'm not saying it's exactly the same. Also Qualcomm doesn't like the Intel disaster was Intel's commitment to manufacturing its own chips and not being able to get to, you just pick a number of nanometers and it'll get there.

• 1:19:35Nilay Patel?

  So like Qualcomm is doing the other thing. So they're, they're fine. But it just, the parallels are there, right? Like this was a long event. They showed a lot of stuff. They talked about 8K video 10,000 times. And all of it was like, right, Apple just shipped the M1 Pro and M1 Max. Those, those computers are amazing. Like where's your product that enables that? And that story is still pretty hazy.

• 1:20:00Speaker 04

  Yeah.

• 1:20:01Alex Cranz?

  It's coming.

• 1:20:01Speaker 04

  Talk about the camera thing?

• 1:20:03Nilay Patel?

  Yes.

• 1:20:04Speaker 04

  Okay. So here's, here's the story. Qualcomm has a thing where the front facing camera on your phone will be always on looking for a face. And if it sees a face, then the OS can like spin up, grab the camera, do its facial, facial recognition. And then, you know, unlock. So it's like, and always on camera seems super bad. Qualcomm's claim here, and they, they talked to Dan about it is, it's like a separate pipeline. So it's only like a super low resolution and the main OS and like, you can't code to it. It's completely firewall off. And all it does at the end of this completely secure chain is kick out, yes, I see a face or no, I don't see a face in real time.

• 1:20:47Speaker 04

  And so it's like, if, if it were a separate camera module, it's like, I'm looking for a face. It would feel a little bit less creepy maybe. But it's just, they're using the same camera module because people don't want to put two cameras on the front of the phone. So the question is, all of that sounds terrible. But we all already have always on microphones on our phones. If we leave our like hot word detection on for Siri or Google. So is it different than that?

• 1:21:13Nilay Patel?

  I mean, is it different than the infrared camera on the iPhone?

• 1:21:16Alex Cranz?

  Well, I mean, you're more likely to capture a picture of a butt.

• 1:21:20Alex Cranz?

  Like, like, like, there's, there's, there's the potential to the, the data you could gather might be for many people more sensitive and they might be more concerned about that data being grasped. I'm just curious if like the people who the, the phone makers will enable this technology. Cause a lot of the stuff-

• 1:21:39Nilay Patel?

  Carriers, right? At the end of the day Verizon asked me like, are always on camera in the store, right? Like, yeah, there are a lot of gatekeepers along the way.

• 1:21:46Alex Cranz?

  So I think it's an interesting thing and it might be something we have to start talking about more if the phone makers and if the carriers adopt it, if other people start using it, if we start seeing it in Windows computers and never enough. When will we get Face ID and then I, and then Mac? But-

• 1:22:04Speaker 04

  But like, here's the thing, it's built into the chip, right? Like the capability is just there.

• 1:22:09Alex Cranz?

  That's true.

• 1:22:10Speaker 04

  You can't, you can't like, you know, pick and choose whether or not it goes in the chip to go in your phone. It's there. So they just have to like turn it on.

• 1:22:15Nilay Patel?

  Yeah. But I feel like if you're, if you're the bad actor and you're like, I'm going to turn on this camera, like the camera's on your phone. Like the camera's actually the vulnerable part, right? And you're like trying to read it. If you're Qualcomm, you're just like lit it up. You've got the camera lit up all the time. Maybe it makes it easier. But if you're, maybe I'm just saying like the iPhone right now has an IR camera on the front of it that is looking for a face quite often.

• 1:22:40Speaker 04

  Yeah. It's like, but it, it, you, it wants it to text movement. It's like, hey, I'm, I'm on. So it's like, if it's sitting there, it's not on. If it detects it's in a pocket, it's not on.

• 1:22:49Nilay Patel?

  So what, what I don't think anyone has ever really seen is the, um, the output of the IR camera from the iPhone. Cause it's all in a secure enclave. It's like, right? That's not video you can get.

• 1:23:00Speaker 04

  Right. Well, so in theory, that's the, that's the same story with this Qualcomm system.

• 1:23:04Nilay Patel?

  Yeah. And they're just using their regular camera. So I don't know. A fun game you can play if you're out and about. It's Friday. You're probably listening to Friday. You're at the bar tonight, right? You're out. You've, you're vaxxed, get your shots, but you're out. Ask people if they would put a camera in their bathroom and then be like, your phone has five cameras on it and you always take it to the bathroom if you-

• 1:23:27Nilay Patel?

  It's just a weird fact that we're like, this is so useful. I'm just going to ignore this part. And Dieter, your point like, yep, everything's always listening for a wake word and we

• 1:23:36Alex Cranz?

  We're fine with it for the most part.

• 1:23:39Nilay Patel?

  Yeah.

• 1:23:40Alex Cranz?

  Our parents might not be, but.

• 1:23:42Nilay Patel?

  No, there I would say at this point, the boomer relationship to technology is like, they're way more fine with it than I want them to be. I kind of wish they would back it up a little bit and be like, maybe a little more thoughtful about how it's going. I think Qualcomm has to show that they can do a bunch of stuff. I think the question of whether any phone maker will want to ship it, whether any carrier will allow this feature to hit like, because as bring it back to Palm, like the carriers often get to determine what features make it on the shelves. And this is one that's a little twitchy.

• 1:24:12Alex Cranz?

  Yeah. Yeah.

• 1:24:13Nilay Patel?

  Okay. There's some other news we should hit quickly. Um, we were

• 1:24:17Alex Cranz?

  Crucial news.

• 1:24:18Nilay Patel?

  Crucial news.

• 1:24:19Alex Cranz?

  Only important news.

• 1:24:22Nilay Patel?

  Well, we were just talking about the FCC Nvidia and ARM. It's funny because Meta bought Giphy. Do you remember Giphy? Facebook, the company formerly known as Facebook, bought Giphy. The UK has ordered them to sell Giphy because it's an antitrust problem, which is very funny, but good on everyone. Less consolidation, more competition. That's, that's the thesis of the show. Uh, there's a line here with no link. It just says Alex's tablet.

• 1:24:47Alex Cranz?

  This is what I'm talking about. This is the good stuff.

• 1:24:51Nilay Patel?

  Buckle up. We're going to be on the merge cast for another hour.

• 1:24:53Alex Cranz?

  We've got another hour. It's all e Ink. You know, first of all,

• 1:24:57Nilay Patel?

  It's all

• 1:24:58Alex Cranz?

  Barnes and Noble came back and they announced for the first time in years that they're doing a Nook Glowlight 4. And the big difference is it's got USB C and it's slightly less chunky. And it is not waterproof and it is $150. And for twice that, you could be like me and get an e Ink Android tablet.

• 1:25:21Nilay Patel?

  Yes.

• 1:25:22Alex Cranz?

  I have more than one, but this is, this is, I'm going to show it to you guys. Nobody, you can go look at my Twitter account if you want to look at it. Maybe I'll do a review of it. But look at this, look at this guy. It's beautiful, isn't it? Aren't you just so enchanted?

• 1:25:36Nilay Patel?

  You can't see it. It looks like a big e-ink screen.

• 1:25:39Alex Cranz?

  It's just a big e-ink screen. It looks exactly like a Nook or Kindle.

• 1:25:44Nilay Patel?

  Can I run the Kindle app?

• 1:25:46Alex Cranz?

  Yes. I was, I was, it can, what I love about an Android e-ink tablet is it's like a Kindle, but I can use all the other e-readers. Oh, you use, you read books from a library? I can just do that. Oh, you read books on the internet? You can just do that. I even found like, there's a browser called e-ink bro.

• 1:26:08Nilay Patel?

  Oh, my God. Yes.

• 1:26:09Alex Cranz?

  And it's just meant for e-ink reading on your Android tablet. And somebody today was like, I figured out how to get the buttons on the case to work with this thing. And I was doing it right before I came on for the podcast, was like figuring out how to get the buttons on my tablet to work.

• 1:26:26Nilay Patel?

  Have you rooted your e-ink Android tablet yet?

• 1:26:29Alex Cranz?

  I haven't rooted it, but I just, I added Google Play to it. Like you have to go through the whole process because it's a Chinese company and it's called the Onyx Books Leaf. I should probably talk about the name of the company, like what this thing is.

• 1:26:43Nilay Patel?

  Yeah.

• 1:26:43Alex Cranz?

  It's the Onyx Books Leaf. It is a seven inch Android e-ink tablet. Onyx Books makes a wide range of e-ink products and they have for years. I have more than one because I have a problem.

• 1:26:58Alex Cranz?

  There's like four of us. There are dozens of us who buy these tablets.

• 1:27:02Nilay Patel?

  Dozens.

• 1:27:04Alex Cranz?

  Dozens of us. And the second one I got was the Note Air, which was a 10 inch Android e-ink tablet. And I was like, oh, this will be great because I'll get it instead of the Remarkable because it's got a, it's got like a walk-on layer on it. So I can use like a pen and write on it. This one doesn't have that. And I thought that would be fine. It's cheaper. It's smaller. That's great. I'm not going to be writing on it. That wasn't a good idea on my part. I should have spent a hundred bucks more and gotten the digitized layer because the touch on this is a nightmare right now. Like anytime I try to type anything, I'm like, I'm going to go to a website and read something. It takes me four hours, you know? It doesn't take me four hours. It just feels like it. So, so the touch,

• 1:27:49Alex Cranz?

  the responsiveness of the touchscreen is terrible, but it's so good. I don't care. Like it's just the perfect size for reading books and I can read all of my books and it's got USB-C. And Bluetooth.

• 1:28:01Nilay Patel?

  Oh, my God.

• 1:28:02Alex Cranz?

  It's great.

• 1:28:03Nilay Patel?

  The Alex tablet hour is over.

• 1:28:07Nilay Patel?

  She's like, I have a tablet with a bad touchscreen.

• 1:28:10Alex Cranz?

  Thank you, all five people who are really interested in it.

• 1:28:15Nilay Patel?

  Well, that's very exciting. There is a new Nook. Barnes and Noble says it cares.

• 1:28:19Alex Cranz?

  I mean, I think as like, somebody who got this, spent so much money on this because I wanted to get out of the Amazon Kindle ecosystem and stop relying on it entirely.

• 1:28:31Alex Cranz?

  This is good news, but Barnes and Noble is still also kind of a monopoly, still kind of a huge company, still not like letting you put your library books and stuff on these products. It's also still not waterproof. So this is like a nice step and it's nice that they're thinking about it and saying, we really care about E Ink, but like care harder.

• 1:28:52Nilay Patel?

  The next bit of news, actually, we keep talking about buying and selling things. Tile, which makes the tracker, is selling its Bluetooth tracking business to a company called Life360.

• 1:29:04Alex Cranz?

  Isn't that just its business?

• 1:29:06Nilay Patel?

  It's just the, yeah.

• 1:29:08Alex Cranz?

  Is there anything left of Tile after that?

• 1:29:10Nilay Patel?

  It's, yeah, it's gonna be part of it. I don't know. There's like a very confusing bit of here, but Life360 is acquiring Tile, mostly because Tile got crushed by Apple's Find My, which is like, Tile's VPs were in front of Congress being like, we're about to get crushed because we don't have access to the phone. And Apple was like, just compete. And it sounds like being owned by a company called Life360 is how they're gonna compete. It's just like one of those things, like if you make a product that can get integrated into the operating system of a phone, eventually the operating system will crush you. I don't know if that's good or bad, but it's the, it's the way things are going. Dieter, there's a Google Pixel 6A.

• 1:29:49Speaker 04

  Yeah, it's confusing. It looks like it's not gonna have a headphone jack, but it's gonna have the same design language as the 6, which that's good. It's basically like, take a 6A, different, probably crappier screen, and put the old camera on it. So that's all fine, but it's confusing just because, I don't know. I kind of, I'm gonna end up missing the design language that like, we got from like the 3 and stuck around all the way through the 5 in one way, shape or form. And I also feel like, I like that the A series had headphone jacks. And it makes me sad that they're finally going away, even on the cheaper phones.

• 1:30:26Nilay Patel?

  It's time for everyone to get proprietary Bluetooth headphones. That's what we have now. Something you get ingrained around the operating system, they're just gonna take it away from you. They're gonna come to your house. That's why I need web three headphones. Please invest in my new web three headphone Dow. Okay. And lastly, I just want to call out, because we are way over. I want to call out that Liz Lopato has been in the courtroom.

• 1:30:49Alex Cranz?

  Yeah.

• 1:30:50Nilay Patel?

  At the Theranos trial, the trial of Elizabeth Holmes for fraud. She has to get to the courtroom at 4am because there's like a press feeding frenzy every morning to get seats in the courtroom. But Liz has won almost every day, because she's getting there so early. But she's been in that courtroom. She's in live tweeting. She's been filing coverage from the trial. We haven't talked about it a lot in the show, but the coverage has been incredible from Liz. The trial is bonkers.

• 1:31:16Speaker 04

  Yeah.

• 1:31:17Nilay Patel?

  Right? Like, it's, it's, I mean, it's, it's a story about just incredible.

• 1:31:22Alex Cranz?

  Got incredibly dark this week. Holmes actually like testified herself, which I think surprised everyone.

• 1:31:29Nilay Patel?

  Yeah.

• 1:31:30Alex Cranz?

  And she's been, yeah, but yeah, Liz has been doing our Liz, not Elizabeth Holmes. Our Liz has been doing a great, great job.

• 1:31:39Nilay Patel?

  Yeah. So I just want to call out that coverage because it's been happening. So lots of people are reading it. We just haven't talked about it on the show. But Liz has been doing great. When it's all over, we'll have her back and talk about what's happening. My money is, this case is like open and shut. But we'll see how it goes. So I want to call that out. And then Dieter, you've been doing Tuesday Verge Cast. You've had a good one this week.

• 1:32:01Speaker 04

  Yeah. So this week, we are going to air, this coming week, we're going to air the discussion you and I had after the Springboard documentary on Tuesday. There's a reason that we're doing that on that day, which I'll just tell y'all. If you haven't managed to watch the Springboard documentary on a smart TV app, it will be available on another platform that is more widely available pretty soon. So stay, stay tuned for that.

• 1:32:28Nilay Patel?

  Twitter video.

• 1:32:30Nilay Patel?

  Garbage compression, it'll be three pixels wide. There's also a little scoop in that episode, which will be pretty good. And then Decoder this week, I talked to Kat Norton, who is a Microsoft Excel influencer. I feel this episode of the show, in many ways, is the culmination of my career. I don't have anywhere else to go. That episode's great. I encourage you all to listen to it. It made me really rethink the creator economy in ways, big and small. And also, I manifested a lot of energy. Got to manifest it. That's it. Thanks to Casey and Heath. You can tweet at all of us. Casey is at Casey Newton. Alex is Alex E. Heath. Alex Cranz is Alex H. Krantz. Hi. Dieter is Backlon. I am at Reckless. We love hearing from you. By the way, thank

• 1:33:14Nilay Patel?

  you to everybody who sent us their Spotify unwrapped, where we're at the top of the charts. We love you. That's just so cool. It was fun to see. And we're gonna keep doing the show. It's not like over. Or is it? What? What? I just thought I had some tension. No, it's, we're gonna have some holiday breaks. But I assure you, because no one else will employ us, we have to keep doing this show. It's the only option we have. Say rock and roll. That's it. That's the Vergecast. Rock and roll. Get a boost.

• 1:34:05Speaker 08

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• 1:34:51Speaker 09

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