OpenAI’s Crazy Week, Meta’s New Orion AR Glasses, MKBHD’s Wallpaper App

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI changing its corporate structure to for-profit, public benefit corporation, per reports 2) Is this good for OpenAI? 3) Turmoil through the transformation 4) Can you exist outside of 'the system'? 5) OpenAI CTO Mira Murati leaves 6) Further executive departures 7) Sam Altman's compensation 8) 'Elon Musk's revenge' 9) OpenAI will close its oversubscribed funding round next week 10) New York Times covers Goldman's AI critic 11) Hands on with Meta Orion 12) Augmented Reality as a new computing paradigm 13) Snap vs. Meta AR battle 14) MKBHD's less than stellar wallpaper app 15) Diddy and SBF are roommates --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  OpenAI is in chaos as leaders leave SAMI's equity and leaks abound. Meanwhile, I try Meta's new Orion augmented reality glasses and YouTuber Marcus Brownlee, also known as MKBHD, launches a poorly received wallpaper app. All that and more is coming up right after this. This episode is brought to you by Genesis. What does it actually take to put agentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial,

• 0:43Alex Kantrowitz?

  to go inside a large scale agentic CX transformation, including the business decisions, trade offs and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility and peace of mind. That's how companies like Razor were able to cut their inference cost by 15 times. Visit akash.network slash Alex for a free consultation. That's akash.network slash Alex for a free consultation. Welcome to Big Technology Podcast Friday Edition where we break down the news in our

• 1:26Alex Kantrowitz?

  traditional cool headed and nuanced format. Here as always on Fridays with Ron John Roy. Ron John, I have never been more excited to record an episode than I am today.

• 1:37Speaker 01

  This week, we have been texting back and forth and back and forth because there's been so much happening. So I've been waiting for this all week, Alex.

• 1:46Alex Kantrowitz?

  We have, I mean, the dramas continues to unfold at OpenAI and big changes for the corporate structure look like they're coming up. I also, as I mentioned in the intro, got a chance to head down to Meta's Menlo Park headquarters to try their Orion augmented reality glasses, which we'll talk about. And honestly, this story about Marcus Brownlee and his wallpaper app is just like one of the most fascinating things I've seen, just kind of like having. A reviewer ship his own product and then all the people come back and say, hey, it's not that easy, is it? So we have a packed schedule this week. Let's just start with the OpenAI news. There's so much that's happened, but to me, the big story of the week is that OpenAI is moving to basically sideline the nonprofit board and become a

• 2:30Alex Kantrowitz?

  traditional business. This is from Reuters. ChatGPT maker OpenAI is working on a plan to restructure its core business into a for-profit benefit corporation that will no longer be controlled by its nonprofit board. The nonprofit will continue to own a minority stake in the for-profit company. And the move could also have implications for how the company manages AI risks. Now, this is taking place in the context of OpenAI raising about $7 billion at $150 billion valuation. So with that big money coming in and moving to this public benefit for-profit company comes, of course, the important issue of how Sam Altman, who for the entire time has said he's doing this as a benefit to society and he has enough money. Well, he's going to be rewarded.

• 3:16Alex Kantrowitz?

  There were some reports out there this week saying he's going to get 7% of the company or $10 billion. He's since denied it, but that doesn't change the fact that Sam is going to have a lot of money on the line here. And OpenAI is finally moving towards a more normal structure. What did you think about when you heard the news, Ron John?

• 3:36Speaker 01

  I was actually kind of happy about this. And I think normally amidst all this drama, this might have been the kind of thing that I would be questioning and a bit skeptical about, but this needs to happen and I'm at least glad people are talking about it because for probably a couple of years now, every time we talk about OpenAI, we talk about how weird and odd this entire capital structure is. And to actually just recognize this is a for-profit business and this is a business that is making money, is also losing money and needs to make a lot more money. To just make things clean and simple and give Sam equity and make it a for-profit company and people investing billions of dollars

• 4:20Speaker 01

  like actually have a potential financial return that's clear. I think this is a good thing.

• 4:26Alex Kantrowitz?

  I'm with you 100%. I saw the news. People were reacting poorly to this news. Of course, it does make Sam look a little bit hypocritical. We'll get into his financial package in a bit, but it does also solve a lot of the issues, or not completely solve, but start to address a lot of these issues that we've brought up over the past year. And really, since last fall, there's been this glaring problem with OpenAI, which is that it has this nonprofit board, but it's got billions of dollars invested in it. And it just made, like you said, the company strange from so many ways and led to the problem of Altman's ouster and back in his return. And it was clearly operating as a for-profit company with this quote-unquote nonprofit structure. It never made sense.

• 5:08Alex Kantrowitz?

  And this will make the company at least act a lot more in line with a normal business. But if you think about this, this is OpenAI going from what was established as a nonprofit company that was going to do research for the public good to a for-profit, standard style company, maybe a public benefit company, but still as standard as you get. And there's trade-offs here. I mean, the pro is that you're less weird. You get a lot of money, and you can do the work, because the work in AI right now needs that type of money. Like, when Elon Musk and Sam Altman started the company with $50 million from Musk, you

• 5:50Alex Kantrowitz?

  just didn't need as much money. But now, when you have training runs that cost multi-billion dollars to complete, you need the cash. And so they're able to do the work by being a company like this. But then there's the negative. And the negative is that you work for investors, and you're no longer aligned as much as you can be with, I don't know, the public good. Now you're simply working for the bottom line. What do you think about those trade-offs, Ranjan?

• 6:17Speaker 01

  Well, I think that idea that now you're working for investors is at the heart of this. And we talked a lot about this last week and we'll definitely get more into the leadership changes, but that tension at the core of is this a research house that's trying to create a safe AGI that's going to save humanity? Or is this a business that takes investor money and tries to see a return and delivers and ships products and has users? And I think it's good that if at least at the high level, the expectations are set very properly, we'll dig more into whether that actually will or could work. But again, I think at some point, this has to happen. I'm more curious, though, about the actual mechanics of it.

• 7:02Speaker 01

  And I mean, I was trying to read through all the reporting and it's still a bit unclear around what happens to Microsoft's investment? What happens to the capped for-profit model where the cap was set at 100x the initial investment? So if an investor put in $10 million, the potential returns were capped at $1 billion, which obviously sounds dramatic and amazing and everyone would be happy to get 100x return. But I think overall, there's been so much complexity in the initial setup. How they actually unwind that into a straightforward for-profit company, it's still pretty unclear right now.

• 7:42Alex Kantrowitz?

  Yeah, that's going to be fascinating to watch play out. And can I just say, I'm a little bit sad that in some ways, this episode shows that you simply cannot work outside the system, that there is a system and you must work in it. And if you decide that you want to try something different, you can't. And I understand there's a lot of good that's come from the system, but it also sort of saddens me a little bit that the other way was not possible. Is that irrational?

• 8:12Speaker 01

  I think that's highly irrational. As a tried and true capitalist, I mean, I believe the capital markets have evolved and America is a great place to build a business and invest in because of all the structures and rules and and systems that are in place. And I think that's a good thing. And I think that's why all these things work the way that they do. And I think the way they tried to approach this, if it was not actually trying to drive huge financial returns, and they didn't need to raise billions and billions of dollars at a high valuation, they could have taken donations. I don't know. I mean, it could

• 8:54Speaker 01

  have gone in any other direction if you wanted to create this truly hybrid structure. But the fact that they approached this like any other VC business backed business, I think it should be a sign that this, the way VC structures work can be a good thing. The way capital markets work is a good thing. And I think that playing by those rules is a good thing.

• 9:17Alex Kantrowitz?

  Okay, well, look, even if you're right, it isn't going to be clean and it isn't going to be neat as the company makes this transformation because it did begin as this research house. It has that research house DNA. There are a lot of researchers who were attracted to that. And now, as it moves towards more of a business in a traditional sense, as a company that's going to be worth more than $150 billion if this round goes the way that it's hoping, there's going to be some disgruntlement. There's going to be some trade offs. Who's going to get paid? How are they going to get paid? Who's going to have the power? What are they going to work on? You know, these are big questions. And so we saw a lot of this tension come out in the floor this week. That's why we're calling it OpenAI's Mad

• 9:59Alex Kantrowitz?

  Week because, first of all, the chief technology officer, Mira Murati, she's she decided that she's leaving and announced her exit this week. If you remember, she was the person that took off, took over for Sam Altman when he was initially ousted by the board. So she's leaving. Remember, Ilya Sutskever is gone. John Schulman, who was another co-founder, is gone. He's at Anthropic. Yann LeCq, who ran Super alignment there. He's gone. He's also at Anthropic, Greg Brockman, the president. He's on leave. So Murati, she's out. She announces her exit this week and then almost immediately afterward, and the timing was very interesting because it was so abrupt.

• 10:39Alex Kantrowitz?

  Someone named Barrett Soeff, who's the VP of Research and post-training at OpenAI, also said that they were leaving. Right now, Barrett writes, "Feels like a natural point for me to explore opportunities outside of OpenAI. This is a personal decision based on how I wanted to evolve the next phase of my career." Very interesting. And then, of course, Bob Mcgrew. Okay, Bob Mcgrew, we talked about him two weeks ago. When OpenAI released O1, that reasoning model, and he's the person that led research there. And he's also leaving. By the way, Bob Mcgrew is responsible for what I think might be my favorite quote ever coming out of OpenAI. And this is reported in the information.

• 11:23Alex Kantrowitz?

  He had a meeting with colleagues after he said he was going to leave this week. He's been at OpenAI for eight years, and he told them he was feeling tired and he had a pool. He hadn't had a time to swim in. And he's gonna go swim in that pool. But it is just a massive, another massive exodus coming from the top of OpenAI. And this is from the Wall Street Journal story reporting on it, that Murati is one of more than 20 OpenAI researchers and executive who quit this year, including several co-founders. Is this just, you know, normal course of business? It seems like there's a lot of exits. I mean, even Sam Altman, when he addressed it, was like, "Yeah, we are going to just handle this the way that we handle the other high-profile exits." And it's like, everything's okay, but why are you having so many?

• 12:09Speaker 01

  Well, we are a Bob Mcgrew fan club, so let's just recognize that his departure as head of research.

• 12:16Alex Kantrowitz?

  We'll bring the beers. Let us come to the pool. We're down to swim.

• 12:21Speaker 01

  We're ready to take that swim, Bob. But it was funny because the Barrett Zoff quote, who's a VP of Research. Normally, when you see any kind of executive departure quote, especially when people, you know, I'm leaving to spend more time with my family. It always feels a bit contrived. But when he said, right now, it feels like a natural point to explore new opportunities outside, I actually believed it. I really believed it because we, again, we talked about this a lot last week, that tension between researchers and kind of bloodthirsty capitalist business people or just simple business people and business driven people.

• 13:02Speaker 01

  And we are seeing this play out in real time and it's going to be really interesting. And I am, and we've talked about this a lot, I'm generally bearish on OpenAI and especially every development like this makes me feel more bearish. But in a way, this is a moment that maybe Sam Altman can reset the company. Maybe they do have the technology that's good enough to drive the productization and the monetization that needs to happen to actually realize these valuations. Like maybe he goes to hires a bunch of Oracle salespeople and, you know, old school software salespeople and they actually move this thing forward. But it had to happen at some point.

• 13:45Speaker 01

  So if this is that moment, it at least gives them a shot. I think if they continued on the trajectory they were, this would have just gone down and down and down.

• 13:56Alex Kantrowitz?

  And let me just go back to like what I was saying about how I'm kind of sad about how this is the only way to do it because you start to hear some of the reporting that comes out of the company this week in particular about this transition to a for profit. And look, I understand the way the world works. I'm not naive, but just listen to what's happening there. This is from the Wall Street Journal. Current and former employees say OpenAI has rushed product announcements and safety testing and lost its lead over rival AI developers. They say Altman has largely been detached from the day to day, a characterization the company disputes as he has flown around the globe promoting AI and his plans to raise huge sums of money to build chips and data centers for AI to work. So like you hear the dispute from OpenAI and then a couple paragraphs later.

• 14:40Alex Kantrowitz?

  Altman has been in touring Italy at this week's Italian Tech Week.

• 14:46Alex Kantrowitz?

  Yeah, but no, really, the the main issue here for me is just that like there are these rushed product announcements. I'll just give one example. This is again from the Journal Story. I'm just gonna read read straight. This spring tensions flared up internally over the development of a new AI model called GPT-4O, which we know about that would power ChatGPT and business products. Researchers were asked to do more comprehensive safety testing than initially planned, but given only nine days to do it. After the model launched, people familiar with the projects said a subsequent analysis found the model exceeded OpenAI's internal standards for persuasion. By the way, it's amazing they measure this. What is persuasion? It's defined as the ability to create content that can

• 15:29Alex Kantrowitz?

  persuade people to change their beliefs and engage in potentially dangerous or illegal behavior. The team flagged the problem to senior executives and worked on a fix, but some employees were frustrated by the process, saying that if the company had taken more time for safety testing, they could have addressed the problem before it got to users. Now, listen, I'll be the first to tell you that I think some of like these alarmist doomer concerns about AI have been overblown. But that being said, if being a normal quote unquote company and being a for-profit company has people shipping things that is scoring poorly on a test, an internal test about persuade that that find them finds them able to persuade people to do dangerous or illegal behavior, that is an emoji red flag for me.

• 16:14Alex Kantrowitz?

  I'm putting it up. Three emoji red flags.

• 16:17Speaker 01

  Yeah, but I mean, Google told us to eat rocks. Let's not forget. I think all the generative AI test, like these products being shipped, we're coming more and more into the understanding that there's bumpy roads ahead for everybody and that's just gonna be part of it. I think to me, so there's two parts of the rushed product releases. There's the safety element, but then there's also the actual products themselves. And to me, my emoji red flag has been OpenAI, I think what they did better than anyone else was actually let the products tell the story. The magic of ChatGPT wasn't, I mean, at that point, no one even knew what generative AI was or cared. They just saw that this

• 17:00Speaker 01

  thing did things that were unimaginable. And more and more like over the first, you know, call it 2023, the beauty of OpenAI actually shipped things while everyone else gave us demos. Meanwhile, they are now moving towards that model. Sora, I think, was debuted in January or February, still has not shipped, and there's reporting that they're still working to actually improve the model, which to deliver higher quality, which makes me think that those demos that we were shown were not actually for real and were just demos.

• 17:35Alex Kantrowitz?

  And also that it takes a long time. There was, there's reporting that it took like 10 minutes to generate like a 30 second video or something like that, which is just, I think, too long.

• 17:43Speaker 01

  Unusable, exactly, like unusable at any kind of consumer level. But even the way they

• 17:48Alex Kantrowitz?

  How greedy are we, by the way? We're so greedy. It's like, make us a magic AI video, but take one minute, not 10 minutes to do it. But it's just, I don't know.

• 17:57Speaker 01

  I don't think it's greedy. Well, because I don't think it's greedy, because Sam Altman, there's even this Twitter exchange where I think someone was asking about multimodal voice, and he had said something to the effect of, can you please take a minute to thank us for like the magical abilities we've given you? I still, and I've been using their multimodal voice, and it is magical, and it's amazing. And that is letting the product tell the story. But even the, the way they positioned O1 as reasoning, felt like they were just trying to, for their fundraising purposes, latch on to the whole agentic AI thing, reasoning is the next big thing, and trying to just push and shove that into the product when

• 18:38Speaker 01

  it's not that at all at the moment. It just felt like, you know, maybe an incremental advance, but nothing revolutionary. And now it feels like they are playing, I don't want to call out Apple again, but what Apple is doing with Apple Intelligence, what Google's done a bit, like demo first, that's dramatic, exciting, to try to drum up excitement, whereas they were always the ones who actually gave us the product to use.

• 19:03Alex Kantrowitz?

  Well, this is what happens when you're in the system and you play the game that everybody has to play. You sort of have to puff your chest up and make things up like Search GPT, and then hope your, your fundraiser will give you a higher valuation.

• 19:16Speaker 01

  So this week, we're anti-capitalism. Is that what you're saying, Alex?

• 19:21Alex Kantrowitz?

  I know, I'm also pro-capitalism. I'm just pointing out that like, it's so interesting how like going full capitalism incentivizes all these behaviors. There's no happy, there's no, I think the way to think about capitalism is it's the, it's the, what is the least worst or the, the best bad system? I don't know how, how people talk about it. I think that's true. I'm a fan. Obviously wouldn't want to do anything else. But like, yeah, it is to me like a little bit, just like, oh, you, you flip the for-profit company switch on and then all of a sudden you're like doing vaporware demos or not, I don't know, you know, demos where we haven't seen the product, you're making up, you know, these new business lines because you need the money, like, it's different. I'm just highlighting the trade-off.

• 20:04Speaker 01

  No, no, I, I agree, but to me, it's then don't raise billions of dollars. And yes, on one hand,

• 20:11Alex Kantrowitz?

  But you need the billions to operate. If you're going to play at all in AI, you need the billions because it costs so much.

• 20:17Speaker 01

  Okay, I'll, I'll give you, it's, it is a weird, tough balance and I'm, I am always on the side of at least some kind of competition for the big tech companies and the rise of OpenAI. I've been hopeful around because it actually was probably the first time we saw any fear in the last decade from the big tech companies. But it's a tough one. I guess, do you think this is a bad week or a good week for OpenAI?

• 20:45Alex Kantrowitz?

  I mean, short-term, it's, it's bad, but long-term, it's necessary and will be good.

• 20:51Speaker 01

  Yeah, I, okay, I will, I will go with, I think that's a good week. I think if, as I just said, if there is a chance that they're able to regroup, restructure and do what they need to do, all of this has to happen. So the faster it does, the better.

• 21:06Alex Kantrowitz?

  Right. All right. Let's talk quickly about Altman's compensation. So there were some reports that he was going to take 7% stake in the new OpenAI. But on Thursday, he said that that was ludicrous. And he said that investors, this is according to the information. We're pushing for an equity grant to align his financial interests with those of OpenAI. And look, like, people have been criticizing this all week because Sam has said like quite publicly that like he doesn't want to get paid for this and why can't people get it through their small heads that he has enough money. But again, like thinking about like short-term weirdness, long-term benefit. Yes, you want to align his financial interests with OpenAI. That to me just seems like it makes a ton of sense.

• 21:51Speaker 01

  Yeah, the exactly the the compensation, the equity stake is probably the most central part of this whole moment in conversation because exactly the the idea that he was ever doing this for no money at all was ludicrous. So to just be the idea that we can all be honest about it and that he has and 7% sounds nice as a founder diluted after a few big rounds of funding seems about correct. And just that we move in that direction and just go there. But but that's even why rather than just simply owning up to it, denying it at an all hands meeting and then us still having this back and forth. I guess that would be my my next emoji red flag that

• 22:37Speaker 01

  that that they're still not just going all in and just moving on this that they're actually still trying to have it both ways.

• 22:43Alex Kantrowitz?

  Do you know what I view this whole chapter as? It's kind of like Elon Musk's revenge or Elon Musk's time bomb. Because when he set up the company initially with Sam, he was like, basically, it's going to be a nonprofit. And it's going to be research focused. And if it starts to go in any different direction, there will be this sort of time bomb where this very painful moment will take place. And it looks like that's what's happening.

• 23:09Speaker 01

  I would give Peter Thiel that kind of credit to pull off something like that after the great Gawker Hulk Hogan stories of the past. I think if anyone could pull off that long game, carefully meticulously planned and plotted, I think I would definitely think Peter Thiel could do that.

• 23:25Alex Kantrowitz?

  I don't know. I was thinking more like if this thing, basically, it was inevitable that if this thing does end up going to like the more for-profit side, it was going to go through issues sort of baked into the founding agreement of the of the organization. And here it is.

• 23:42Speaker 01

  I look, maybe I'm getting into this a little bit. If Elon Musk is listening.

• 23:48Alex Kantrowitz?

  Musk's revenge, let me tell you.

• 23:49Speaker 01

  If Elon's listening right now, I can see him tweeting this, that that was the plan all along. And that would actually, that would make him look pretty good.

• 23:59Alex Kantrowitz?

  Yeah, and let's just take one moment on Sam, because like, there's been a lot of discussion this week about how OpenAI is cooked without, without, you know, me or Murati and the rest of the research leaders and with all these executives leaving. And I would like to say that that seems outlandish to me. He's gonna raise this money. He still has a tremendous amount of talent. There's more clarity on the direction they're going like we've talked about. And remember, I mean, you know, think about all the quote unquote visionaries in tech. They all knew that the transformer model was out there. They all could have done this, they could have done it at DeepMind, and they didn't do it. And instead, I think under Altman, this company has definitely shown

• 24:43Alex Kantrowitz?

  that it has direction, it has product chops. And it was the one that started this whole thing. The generative AI moment. So I'm not counting him out.

• 24:52Speaker 01

  I'm not counting him out either. I think, especially because, I mean, I've argued this, that to me, even though he is still saying the next big generation of models and AGI is where it's at. To me, this battle is won on being able to productize what you already have. And he has driven that better than anyone else. And ChatGPT and a lot of what they've released actually is the best product, and that's what they had been winning on or have been winning on. So, so yeah, I'm not, I don't think at all researchers leaving at this stage with all the initial research that has been done and that's already done. I agree on that. I don't think, I'm not counting him out at all.

• 25:34Alex Kantrowitz?

  Oh, and just before we went live, we got some news from CNBC. Kate Rooney reported this, that OpenAI is telling investors that this round is going to close next week. So Sarah Fryer, the CFO, said the funding was oversubscribed and would close by next week. And she says, even though there have been these departures, collectively, we remain laser focused on bringing AI to everyone and building sustainable revenue models that fuel our operations and deliver value to investors and employees. And yes, she's been doling out a lot of money to researchers who've like gone and gotten offers and come back and they have to keep them, keep them there. So maybe luckily for the company, you know, it's going to close this round, it's going to restructure. And then maybe, I wouldn't

• 26:18Alex Kantrowitz?

  say all this drama, there's no way that all the drama is behind it, but maybe this chapter of drama is behind it.

• 26:25Speaker 01

  Oh, wait, I had totally forgotten Sarah Fryer had become CFO. I think, yeah, it was probably this summer or maybe, yeah, in May, confirming it. That is interesting to me now, thinking through what's happened in the last few months, because again, she is long term, high level, traditional tech executive, CEO of Nextdoor, CFO of Square. So that is interesting to me now, thinking about that, that like, you know, the, the traditional tech talent has been brought in over the last few months and we're seeing the ramifications of that. We're seeing it's becoming a good old fashioned corporation.

• 27:03Alex Kantrowitz?

  Okay, let's, let's close this out. Well, actually, maybe we have one more thing to talk about. But first, Sarah Fryer knocks on your door and says, Ron, John, I want to offer you a position in this funding round. Give us, give us a thousand dollars. You'll get the same terms as the other investors. It's worth, you know, we're going at $150 billion valuation. You giving her the money?

• 27:23Speaker 01

  Wait, it's not a billion dollars she's asking me for, Alex?

• 27:26Alex Kantrowitz?

  No, this is a hypothetical, of course.

• 27:30Speaker 01

  I would, I'm still a no. I still think I'm calling it a good week, I'm saying, but I still think the probability of success at this stage, at this valuation is a very, very low prospect. Still overall bearish. What about you?

• 27:47Alex Kantrowitz?

  Yeah, I'm giving the money. I don't know, maybe it's

• 27:50Speaker 01

  Alex is in, Alex is in.

• 27:52Alex Kantrowitz?

  I'm in. I can't tell you why. I obviously think it would be a, it's a risky proposition, but you do have a high potential upside, especially if this stuff works out. So I'm in. I mean, I guess that's, that's the thinking for the investors that are there. Although, like, I wouldn't be surprised at all if I flush that cash down the toilet. But one interesting thing that's also happening is the mainstream media sort of catching up to some of our skepticism and some of the people that we've highlighted on the show. Why don't you tell us about that?

• 28:24Speaker 01

  Yeah, The New York Times had a piece this week covering the Goldman report that we called the canary in the coal mine, coal mine, almost two months ago, I think, that really kind of hit hard on generative AI and the economic prospects. And I actually think this is kind of reaffirming what we were saying, because this is the kind of thing that Jim Cavello, the Goldman Sachs head of global equity research, who had, was kind of the central figure in this report that just said, there's, actually, it was amazing that they had said that there's no real future, but still to invest in Gen A infrastructure because people are still going to be spending money on it in the near term, because everyone is,

• 29:08Speaker 01

  that's what everyone's doing no matter what. But I think this is actually a big moment, because when The New York Times is now kind of picking up on this and making it a headline, will AI be a bust? A Wall Street skeptic rings the alarm? This is moving mainstream, and I think there's going to be more and more and more questioning of the economics. And I think that just kind of both affirmed it, but also means it's going to become more mainstream of a topic.

• 29:35Alex Kantrowitz?

  So AI is something that has a huge amount of buzz, but may turn out to be nothing, or maybe not nothing, but not quite what we imagined.

• 29:43Speaker 01

  Not nothing.

• 29:45Alex Kantrowitz?

  Can we go back in time and look at something that had, that, that now seems like it might turn out to be nothing, but actually could be quite big? And what I am talking about is the metaverse. Because this week...

• 29:59Alex Kantrowitz?

  I was down in Silicon Valley and got a chance to try Meta's new augmented reality glasses called Orion. And let me tell you, these are a real technological marvel. They you put them on, they do not feel heavy. You get 70 degree field of view. I use them to watch YouTube, make video calls, play games, scroll through messages. These things are pretty incredible. And all of a sudden, they put like the larger dream of layering computing on top of the real world and like having that in a form factor that makes sense. They make it feasible. They put it into a, a product that makes you

• 30:43Alex Kantrowitz?

  see mainstream augmented reality, mixed reality for the first time. Were you watching when Zuckerberg made these announcements? Or have you read the coverage? And what do you think about these things?

• 30:55Speaker 01

  I am very excited about this. I think the idea that the metaverse could still live on the meta dream, metaverse dream of Mark Zuckerberg is kind of amazing. And augmented reality, I've been very, very excited about for a long time. So if this really becomes that kind of next, like the actual mainstreaming and kind of real innovation around it, that is amazing. I mean, I have to like, was it, I tried the magic leap in pretty early on when it came out and it, I put it up there in like, maybe top 10 technological moments I've ever had of

• 31:35Speaker 01

  just kind of pure in from in terms of gadgets, like just painting around me and seeing all this stuff. And but that still had a huge battery pack and was heavy and didn't work that quickly. So the idea that, and I mean, was it that amazing? Because at least the way they talk about like the miniaturization of computing, this is like one of the greatest advances. Obviously, this is them saying that. But it seems like other people said it really is a technological marvel. Is it that cool?

• 32:09Alex Kantrowitz?

  This is gonna be experience when you use it. It's gonna be an experience that you're gonna be familiar with. Like unlike ChatGPT, which came out of nowhere for a lot of people. Using these Orion glasses is gonna be something people know. Because they've tried the Oculus or they've tried the Vision Pro. So you're in the operating system and you're like, oh, like I have an idea of how to use this. But the real thing that makes this different is the form. Because, and I wrote this in Big Technology today. You can, um, you can't really take a Vision Pro or an Oculus on the road with you. Like you're just not gonna walk around on the street with it. And you're, you're really not gonna wanna pull it out like at the bar. Right?

• 32:53Alex Kantrowitz?

  So it just limits like the functionality uh that you would use. The thing about these that, that make them so interesting is how they've been able to effectively put a real deal mixed reality operating system into a pair of lightweight glasses. I mean, you do not feel the glasses resting on your head. Yes, they're a little bit bulky, but they're gonna get smaller. They're gonna look like a normal pair of glasses eventually. And the technology that they project onto uh the screen is pretty amazing. I mean, they just like use these uh micro LEDs. They go through these like, uh, they, they project pictures. They go through these like uh pipes that like bring them to your, to your eyes, like project them into your eyes. It's nuts. It's so crazy.

• 33:38Alex Kantrowitz?

  And the lenses are made with this silicon carbide that allows that light to travel. So, I mean, those are the product, the product details. Uh, when you're able to get out in the world with them, that's when I think, okay, this is gonna be really interesting. Like a couple of examples we talked about. Where like if you're at the restaurant waiting for somebody, you could just pull up a large screen and watch Netflix straight from your glasses. Um, if you're on a walk, you can video call with your friend and have a hologram of your friend just hanging out with you. Uh, and then one demo that they showed me, uh, and this is sort of gonna get into where I think the real value is, is you can be like looking at a bunch of ingredients and ask what you should, what you should make. And it's like this on, on the, they had some stuff on the table and the glasses suggested, all right, make a smoothie.

• 34:23Alex Kantrowitz?

  Now, that last part I think is critical because.

• 34:28Alex Kantrowitz?

  Because these things are going to be something that you're going to walk around in the world with, you are going to be able to use AI in like totally different ways. And that is going to create the foundation for a whole different slew of apps and experiences that you just wouldn't have otherwise. And that to me is like the real excitement. So yes, there's a cool form factor, but to me, it's really something, you know, far greater than that.

• 34:55Speaker 01

  Yeah, I think so. There's two things on that. First, watching the demo, I actually felt kind of what I used to from an Apple demo, from like a launch announcement. It's like talking about really crazy technology, but actually getting excited and thinking it's cool and having and could have a huge impact. I definitely felt that watching the actual like him announce the technology and what it will do and what it looks like. But exactly what you said, to me, that's why I've been so bullish on the technology because anything that removes the phone from our hand, but still allows us to interact more with the world.

• 35:34Speaker 01

  I think you can only imagine the amount of use cases because even if you think like FaceTiming with a friend while walking is actually, it's interesting, but it's still kind of, you know, reflective of what people are doing now. Unfortunately, in the streets of New York, you see people FaceTiming while they're walking. But yeah, like as you walk around, knowing what's around you, see, finding things, seeing things, getting more informed about your surroundings, that I can't even imagine just how many use cases there are. But then you also figure like, I think there's some cars that already have some kind of augmented reality embedded in the the glass,

• 36:14Speaker 01

  in the windshield, like this just, it opens up a completely new form factor that people can actually build on that I think it's, it can be as big as the smartphone if it actually works.

• 36:28Alex Kantrowitz?

  Yeah, I agree. And I'll tell you, so first of all, let me just quickly tease, I have Meta Chief Technology Officer Andrew Bosworth on the show next Wednesday. And we're going to talk all about this. So I won't get too deep into it now because I do think people should listen to that interview. It was a fascinating interview. We talked about this stuff and, and you know, mixed reality, augmented reality, all this in the first half. And then we get kind of crazy in the second half where we talk about AI consciousness and, you know, merging with brain computer interfaces and AI. It's fun. But like, here's one thing that he told me that I just want to call out here and people will hear it next week. And I'd love to get your reaction, Rajan.

• 37:07Alex Kantrowitz?

  Is that with a wearable, with a pair of glasses that have cameras and have sensors and sort of know your context. You could get much more intelligent and sort of life improving computing if it works according to plan than you could with the phone. Like the phone is in your pocket. It doesn't know your context. It doesn't know when to interrupt, when not to interrupt. So by default, it interrupts. And one thing Bosworth told me was that with a pair of, you know, augmented reality, mixed reality glasses. If they see that you're sitting down, I'm just paraphrasing, sitting down with your family to dinner, maybe it won't interrupt you. Maybe you won't have those work emails come through and you can have that sort of peace of mind that that that will trigger.

• 37:53Alex Kantrowitz?

  You know, as soon as you walk away from the table, which is the first time you would handle this stuff anyway. What do you think about the promise on that front?

• 37:59Speaker 01

  No, no, I, I, I actually love that. To me, that's what makes this so interesting is that the phone is inherently interruptive. Like it, it disassociates you with your surroundings, looking into the screen. It's, it just completely detaches you and is interruptive, yet we've, we use them so much and so often that it feels normal. You know, there, there's all those like memes of like a couple in bed and both people are just like staring at their smartphones and just so much in light has become normalized. You're out at a restaurant, four people all sitting around a family and everyone's looking at their phone. And obviously one could argue, maybe it's better that just no one is having any technology involved.

• 38:43Speaker 01

  But if there can actually be a technology that just Integrates naturally into your everyday life, which I think this could be. That is, I mean, yeah, it just opens up such a world of possibility that that actually excites me as much as generative AI did six months ago.

• 39:03Alex Kantrowitz?

  Yeah. And again, these are internal, they cost about $10,000 to make, so they're not selling them. But I do anticipate that they are going to be released to the public. I was speaking with their, their product team and, you know, I was like, all right, how are you going to make these half as big and, and, you know, a tenth of the cost? And they legitimately believe that they're able to make it about half the size on a variety of components, maybe not all of them. So I do anticipate that this is going to come. And this was like one moment where you just think, okay, augmented reality is going to come. Like it, we like to get to this point or to get to the point that everybody's hoping for. You just needed this one moonshot to work, right? To take this tech fantasy and turn it into reality.

• 39:47Alex Kantrowitz?

  And this week, I think, was the first time we saw that that, that path is, is set. And there is a way there.

• 39:53Speaker 01

  I'll disagree with that because I think it was last week that Snap released their spectacles, which are augmented reality glasses. What I actually want to ask you is, what do you think is the better launch strategy? So on one side, you have Facebook or Meta making this big demo and saying, this will be potentially a few years away. So Snap has taken a very interesting approach, I think. Instead of making it generally consumer available, they're having for developers only, and you actually have to, I think, apply for the program to get access and it's $99 a month, which is also interesting to me that it's a subscription. And you basically pay for access to have the glasses and to be able to develop on them.

• 40:38Speaker 01

  So which do you think, so the, so the idea there is Meta, it's all internal. They're going to keep working on it. Snap, let's actually engage with the developer community, knowing this is not a finished pure consumer product, but let them start building and experimenting on it. Which do you think is the right approach?

• 40:56Alex Kantrowitz?

  Man, I feel bad for Snap. I mean, they're just not going to be able to keep up.

• 41:00Speaker 01

  I disagree because what makes this even more, as listeners can tell, I'm very excited about the whole AR battle right now because why this gets so fun and interesting to watch as an observer is Snap has innovated with augmented reality and actually productized it better than any other company in the world. Like the AR filter, they are the ones and lenses, they're the ones who basically invented it and made it popular. And so if anyone could actually compete on specifically this format, I think they have a shot.

• 41:35Alex Kantrowitz?

  Well, I'm gonna just disagree with you there. I just don't, I just, for a hardware product like this, you just need to be able to burn so much money. And I think Meta has that money and has shown a willingness to burn it. But look, I think Snap's ability to grow to this point has even surprised me. I thought it was kind of toast when it hit the IPO. It's grown a lot. It continues to add users. It has innovative products. So I have to, I, you know, I give kudos to Snap, but I also think that like this eventually will be, will be a war that will be won by the company with the most resources. So that's either a Meta, Google, or an Apple.

• 42:18Speaker 01

  All right. I think, well, we, I still believe in up and coming innovation. I still have, it's not just going to be a resource question to me. I think this kind of thing is not, because it's not just compute, it's actual like, understanding users, creativity, that's what, and augmented reality, and already you see the limitations. I think the Orion glasses had a 70 degree field of view. Snap, I think, was only 40 or 45. So it's like a smaller, in terms of actually the screen you see in front of you. So you see how those limitations are already setting in. But, but again, I think making something that people love and use and actually feels, because when we keep talking about, you know, is

• 43:02Speaker 01

  this, if it really is going to integrate into your everyday life, it has to actually be a fun, natural, human product, and not just, you know, like a technological marvel.

• 43:15Alex Kantrowitz?

  All right, let me just say something that will ensure that Evan Spiegel never comes on this podcast. I think Snapchat will be the world's best developer for Meta's AR glasses.

• 43:25Speaker 01

  Oh, you went there. You went there.

• 43:34Alex Kantrowitz?

  Just telling the truth.

• 43:35Speaker 01

  It's been a decade of it. It's been a decade. It's been a decade of it, but we'll see. This is gonna be a fun one.

• 43:43Alex Kantrowitz?

  So, speaking of upcoming technological advancement that you so love from upstart developers, can we close the week and not mention Marcus Brownlee's or MKBHD's unbelievable wallpaper app called Panels? It's an app where you can subscribe and pay some money or watch some ads and get HD wallpapers that Brownlee has been talking about. He's one of the world's most prolific YouTubers. He's, I would say, the number one tech YouTuber in the world reviewing products. But then he released his own and Panels did not get the reception that he might have been hoping for.

• 44:26Alex Kantrowitz?

  So I'm curious if you followed this and what you think we can learn from it.

• 44:29Speaker 01

  First, that was a wonderful segue. That was an epic one.

• 44:32Alex Kantrowitz?

  Thank you.

• 44:33Speaker 01

  I think, yeah, no, that was good, but this was fun to watch. I am a huge fan. I watch every review that he releases and he does an incredible job. And I think he's always, that's the idea, is, you know, he's been tough but fair and that whole kind of branding he's done and delivered really well.

• 44:54Speaker 01

  This was such a weird thing for me because on one hand, I think, so you, this, as you said, it's a digital wallpaper app. You pay $12 a month or $50 a year for high-quality downloadable images from digital artists to use as wallpaper, which doesn't seem that interesting in any way.

• 45:17Speaker 01

  It's certainly not technologically advanced after we've just been talking about like futuristic technologies. So it feels like kind of a cash grab building on his name. And I think that's how the world seemed to receive it. But it wasn't just the actual product itself. It was like the settings were very extractive of user data, which there is a big, a lot of people called him out, and they already backtracked and said, we're not going to require as much, like as many opt-in settings and as much user data. The pricing is a bit odd. So I think it's, it's very odd to me what they were possibly thinking. And it's kind of, it's kind of fun

• 45:57Speaker 01

  to see, I think, someone who is kind of like with a single review, taken down entire companies, actually just put something out there and, you know, feel the payback. But are you, are you going to download this and pay for it?

• 46:13Alex Kantrowitz?

  Absolutely not. And I do think that it is interesting to see how all of Silicon Valley turned on him. And I just pulled out like a few tweets I enjoyed very much to read. There was one person that said, bashing a premium miniscule AI laser projector becomes less meaningful when you release a half-baked cash grab wallpaper app straight out of 2016. Obviously, that's talking about Humane, which the pain that Marcus Brownlee killed. And not, well, he bashed it and sort of was a disastrous moment for the company. Here's another one. Today, Marcus Brownlee taught us that it's much easier to complain and criticize than to build something that people like. And then one more. The MKBHD app is a masterclass

• 46:57Alex Kantrowitz?

  in how to do the trifecta of user, of user hostile things simultaneously. Charge obnoxious subscriptions, show ads, collect user data. Like even the most big tech apps people rant against typically do one out of two, one or two of the three things above.

• 47:15Alex Kantrowitz?

  Uh, one, one, someone pulled up a tweet from him saying, "The golden rule number one of the internet, never charge for something that was already free." That was from 2016. And someone goes, "Is this in response to something?" And he says, "It's for future reference." Like wallpaper apps are, I mean wallpaper is pretty free. So I do think that like, it kind of shows you, this is sort of why I enjoyed those tweets. Not because I want to beat down on Marquez. I've met him before. He's a good guy. I like watching his reviews. But I just think it kind of shows, um, what happens when, when, how do I put this? When, when builders see someone critical of what they're doing, and then, and then

• 47:59Alex Kantrowitz?

  they watch them go do it, and, uh, and they realize it's not that easy. Like, because Brownlee had taken down these, like, a couple of companies, not fully on himself, like, they probably took themselves down by bad products. I think there was an underlying cadre within Silicon Valley that were just hoping that he would fail as sort of a payback. Because, I'll be honest, like, building stuff is hard. And I worked at a tech company beforehand, you worked at a tech company, and having been part on both sides, working at a tech company and being in the press, the press expects everything to work perfectly, and you know that's just impossible to do when you're actually going out and building things.

• 48:40Alex Kantrowitz?

  And there is that sort of divergence. And I think that this episode just kind of crystallized, uh, that so well, uh, and led to such an emotional response for that reason. And, you know, it's almost like, kind of another thing, like, from the tech press standpoint, like, being a journalist standpoint, it also just goes to show, like, how, how tough it is to, to do criticism and be listened to. Because there becomes this us against them mentality, and I really wish, but I wish it was a more constructive relationship.

• 49:10Speaker 01

  See, I, I completely disagree there. Cause I think the whole- In the whole like building is hard, so the tech press is being too hard on builders. There is so much cheerleading in the tech press, in my opinion. And again, we're just talking about it. Think about the reception Orion got when it's not even going to be available for a few years. With generative AI, there's, I think a part of the problem is that there's been so much unquestioned like hype from the tech press itself, that that's kind of why we are where we are. And I think that the problem is it was so, especially like the 2010s tech crunch like heyday.

• 49:53Speaker 01

  There was so little criticism that that's why the expectations start to become that everyone is just going to love any early stage product. And I think that's not a good thing. And, and actually that's where I feel his reviews, even though they could be scathing, that's the thing, they were always actually that exact middle ground of constructive and fair. So yeah, I, I think, but, but I do agree with you. I think there's probably people who felt that way and were certainly ready to go after him about this.

• 50:25Alex Kantrowitz?

  You know, Rajan, you make a good point. I'm going to agree with you on this one.

• 50:27Speaker 01

  Oh, man, I was hoping you were going to disagree.

• 50:30Alex Kantrowitz?

  No, no, I'm convinced, but I, let me ask you this then. Do you, do you think that the pile on for this app was unfair or fair?

• 50:37Speaker 01

  No, I think that, that part is fine. I mean, he's, he's actually, you know what, from like a comms PR perspective, I actually think he's handled this pretty well. Like he had, you know, posted, we take feedback, building in public is a, is a difficult thing. And we're taking this into account and we're changing the actual data settings and we're going to look at pricing and all these. I think I, I'm not, I don't, the actual pile on, I'm okay with, and he's handling it fine. So I think that part's okay.

• 51:10Alex Kantrowitz?

  Okay, we're basically out of time and we didn't even get to the fact that SBF is now in the same cell as Diddy in Brooklyn, Brooklyn jail. So to me, the, the sort of in a week of crazy headlines, including the mayor of New York City getting indicted, that might be the most wild of all. I've been hooked to this Diddy story. This thing's crazy.

• 51:30Speaker 01

  I too have been following this one very closely and the idea that SBF and the, I mean, Diddy's gonna get into crypto. I think there's no doubt in my mind. We'll just, we'll see where things end up, but the, the idea of the two of them just talking is so incredible in my mind that, uh, I hope it's happening right now. And there is some new coin, Diddy coin is being planned if they're not, if there isn't already a Diddy coin.

• 51:59Alex Kantrowitz?

  Man, just exploiting crimes or alleged crimes. What a strategy. But then, uh, Mayor Eric Adams, who the New York mayor who's just indicted, you know, take his, his first paycheck in Bitcoin, like maybe the three of them will, will hang out there together.

• 52:14Speaker 01

  Oh yeah, you're right. There's the tech angle for Eric Adams, I guess. I totally, oh man.

• 52:21Alex Kantrowitz?

  I do love how when he's in indictment, he's like, first stop Istanbul. I mean, like, that's not a bad strategy, but when, I guess you're taking it illicitly from a foreign government, that that's, that's not good, but it is a beautiful city. Highly recommend people visit Istanbul.

• 52:35Speaker 01

  I concur on that one. Highly recommend visiting Istanbul, but I love the, if, if listeners saw, there's a lot of clips going around where Eric Adams says, New York is the Istanbul of America. It's the Zagreb of the world. It's Zagreb of the United States, um, where, which I'm kind of convinced that every time he said that, he was probably getting paid by that, uh, whatever locale he'd mentioned. So I'll keep an eye on that story. Maybe there'll be more of a tech angle at some point.

• 53:07Alex Kantrowitz?

  Man, if we were just like a local politics show, I think that, you know, we would cover more chaos than we do with OpenAI, but such is our life. Such is our mandate.

• 53:18Speaker 01

  Such is, this is the path we have chosen.

• 53:21Alex Kantrowitz?

  This is the path. All right, Ron, John, it's great speaking with you. Thanks again for coming on.

• 53:26Speaker 01

  Continue on this path next week. See you next Friday.

• 53:29Alex Kantrowitz?

  That's right. See you next Friday. And everybody remember to tune in for my interview with Meta Chief Technology Officer, Andrew Bosworth, AKA Bos. That's coming on Wednesday. Thank you for listening and we'll see you next time on Big Technology Podcast.

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