Spotify picks Joe Rogan over Neil Young / Intel’s $20 billion bet on Ohio / Q4 earnings for Big Tech

The Verge's Nilay Patel, Alex Cranz, and Tom Warren discuss Q4 earnings for the big tech companies like Microsoft, Samsung, Intel, and Tesla. Casey Newton joins the show to discuss Spotify's controversy regarding Joe Rogan's podcast, leading to musician Neil Young removing his music from the platform. Further reading: Windows 11 is getting Android apps, taskbar improvements, and more next month Microsoft got a whole lot of people to play Halo and Forza Call of Duty’s next three games will hit PlayStation despite Microsoft’s Activision deal It’s 2022, and the Surface Duo is finally getting Android 11 Microsoft is making its Xbox subscriptions more flexible after UK regulator steps in Samsung sets revenue records with stronger product sales What to expect from Samsung’s February Unpacked Samsung’s next Unpacked event is set for February 9th What we know about Intel’s $20 billion bet on Ohio The chip shortage didn’t stop Intel from having its ‘best year ever’ Tesla hails its second profitable year as a ‘breakthrough’ Elon Musk says ‘don’t forget about my robots’ as Roadster, Semi, Cybertruck deadlines slip Tesla Cybertruck delayed until at least next year, Elon Musk confirms Tesla Cybertruck walkaround video shows the absurdly huge windshield wiper in detail The self-driving car industry is abandoning the term ‘self-driving’ and leaving it to Tesla Spotify picks Joe Rogan over Neil Young Why Spotify can’t afford to lose Joe Rogan 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?

  Today on the Vergecast, Tom Warren joins the show. We talk about Microsoft, Samsung, Intel earnings, a little bit of Tesla. Then Casey Newton joins the show. We talk about what is going on at Shorur and Spotify with a little Apple earnings at the end. That's coming up on the Vergecast next.

• 0:15Speaker 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.

• 1:00Speaker 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.

• 1:49Nilay Patel?

  Hello and welcome to the Vergecast, the flagship podcast of the Optimum robot, soon to be Tesla's most important product. It is day 3,000 of Dieter being on vacation. Every day, my heart grows a little, a little smaller, but he'll be back, he'll be back soon. He's just on vacation. You can like, look at his Instagram. I know where he is. He's tearing down a tree in the backyard.

• 2:12Speaker 02

  All I know of Dieter's vacation is a tree.

• 2:15Nilay Patel?

  Yeah, exactly. It's been it's been a big project to tear down one tree for Dieter. But Alex Trans is here.

• 2:21Alex Cranz?

  Yes, I've torn down no trees.

• 2:23Nilay Patel?

  Tom Warren is here.

• 2:24Speaker 02

  Hello, I have returned.

• 2:26Nilay Patel?

  Aren't you in Texas, Alex? I feel like you could you could chainsaw a tree at any.

• 2:29Alex Cranz?

  No, I'm back.

• 2:30Nilay Patel?

  Oh, you're back.

• 2:31Alex Cranz?

  Yeah, I think that I think they will get very upset if I go to a park and chop down a tree. I don't think it'll go well.

• 2:36Nilay Patel?

  Well, it's like the two the two epicenters of Carhartt in America are Texas and Brooklyn.

• 2:41Alex Cranz?

  I'm wearing Carhartt right now.

• 2:43Nilay Patel?

  There you go, seamless transition.

• 2:47Nilay Patel?

  Far more expensive to buy in Brooklyn.

• 2:49Alex Cranz?

  So much more.

• 2:50Nilay Patel?

  Anyhow, Dieter's on vacation, but Alex is here. Tom's gonna join us to talk about Microsoft stuff, Samsung, Intel earnings, and a little bit later, Casey Newton is gonna join us. We gotta talk about Neil Young and Spotify with Casey, which we'll just see where that goes. We'll just see where that takes us. All right, let's start with earnings. It was a big week of earnings and it's earnings season yet again. A little inside baseball for like verge stuff. Jake Kastenakis runs our earnings for us, and I feel like every quarter when he has to send the email, that's like it's earnings again, he has to he has to perform an amount of enthusiasm that is getting increasingly desperate.

• 3:26Speaker 02

  He started putting emojis in the subject line now. Spicy fix up.

• 3:31Nilay Patel?

  One truth of tech reporting is that every three months you have to do earnings coverage. So here we are again. Let's start with Microsoft. Microsoft is they're they're having a moment, right? They're Tom, they're buying Activision, their numbers are great, that cloud services gone gangbusters. What what's going up with Microsoft? How did how did you earnings wise?

• 3:49Speaker 02

  Pretty much the same as, you know, the same as normal. It's like the cloud services, Office, all that sort of stuff is contributing heavily to their bottom line. But there was some surprise elements this time, and it was obviously Windows. I mean, you might call it a surprise, but over the past year, the PC market has been booming as it was in 2020 with a pandemic. So surprising, not surprising. I don't know. Depends on your stance, really. But that was, I think it was like something like 25% up on Windows OEM revenue, which is quite a jump for for Windows, considering the position it was in before the pandemic as well. So and then they they actually predicted that Surface would be down, down in, I think it was single digits of revenue percentage, but that didn't happen.

• 4:32Speaker 02

  It was actually up. So that was kind of surprising as well. So maybe they found some chips there to be able to ship. More than they were expecting.

• 4:39Alex Cranz?

  Did people just love the plinth? It's just enthusiasm for the shape?

• 4:43Nilay Patel?

  Who doesn't love a plinth?

• 4:44Speaker 02

  Everyone hated it apart from some people bought it and it raised their ASP maybe.

• 4:50Nilay Patel?

  Pennas Penne, who is Chief Product Officer for Windows and Devices, which encompasses Surface, he had a blog post. A blog post is, you know, it's like, it's a corporate blog post. It's very polite, but you can see that the genesis of it was like, I gotta figure out why people keep buying PCs. And so he just like wrote down all of his thoughts, because it's unusual. No one was expecting this. Obviously now we're into the pandemic and

• 5:12Speaker 02

  Yeah.

• 5:13Nilay Patel?

  I think a lot of people expected a snapback, right? Everyone bought the PCs early to work from home, but then they just kept buying more PCs and that hasn't seemed to have stopped.

• 5:22Speaker 02

  Yeah. And I think his blog post is obviously, you know, it was just a bunch of like stats that they pull off of, of, you know, all the usage numbers that they have. But it was kind of interesting because it does show that people perhaps using PCs more than they were before in sort of different ways. I know for sure that I pick up my phone less now because I'm just stuck indoors. So it's like, I don't have that time where I'm traveling to an office as much anymore. So I'm not listening to podcasts on my phone. I'm not, you know, doing these sort of tasks that I was using my phone for a lot more. So I can see where it's true with some of the stats that they've backed up with. But yeah, like the whole blog post was like full of all these stats and interesting figures about usage, you know, just percentage stuff that doesn't really mean anything, really.

• 6:06Speaker 02

  Because you don't really know what it's all based on.

• 6:09Nilay Patel?

  The worst, by the way, is when I'm looking at Twitter on my laptop and then I pick up my phone and then I open Twitter and I I don't know what I've accomplished.

• 6:18Speaker 02

  You're just chasing the notifications, right? Just make sure I haven't missed anything.

• 6:21Nilay Patel?

  Yeah.

• 6:22Speaker 02

  Yeah.

• 6:22Nilay Patel?

  Well, he called out three trends. It's the three trends in the blog post that I think are interesting because you would have called them at the beginning of pandemic, but it's interesting to hear Microsoft say they're real. The rise in hybrid work and learning, shifts in entertainment habits and distribution models, which is just dreaming, and changing consumer habits for everyday tasks, which Is a little fuzzier, but I think it means Tom's at home and picking up his phone less.

• 6:47Speaker 02

  Pretty much, yeah.

• 6:48Nilay Patel?

  Like, I'm pretty sure that's what that means, right?

• 6:51Speaker 02

  Yeah.

• 6:51Nilay Patel?

  So you would have predicted that at the beginning of a pandemic. Is the sort of like ongoing increase in PC sales surprising to you?

• 6:59Speaker 02

  Yes and no, like I think there's still that ongoing reality for a lot of businesses, especially like that we're probably thinking last year before Omicron arrived, you know, we're probably going to go back into the office and now they're like, yeah.

• 7:13Alex Cranz?

  That was two years ago. Just.

• 7:16Speaker 02

  Feels like it.

• 7:18Nilay Patel?

  Oh, boy.

• 7:18Speaker 02

  Is that staggered, you know, like businesses thinking, oh, we're probably going to go back to normal. And then the reality hitting that things aren't going to go back to normal, right? Like, who knows, there's probably going to be another variant and who knows what's going to happen, basically. And I think that reality is hitting again, was hitting last year. And it's definitely going to hit again this year. So I think I wouldn't be surprised if sales dip off a little bit this year because you just because of the Windows 11 refresh stuff. You know, I think everyone who's needed a PC has probably bought one by now. I would expect between 2020 and 2021, so I think 2022 will be a bit different. But yeah, I'm not that surprised that 2021 was still a big year for PC sales, to be honest.

• 7:59Alex Cranz?

  So you think it was more driven by the companies and not as much by like people at home?

• 8:05Speaker 02

  Yeah, I think it's a mixture, isn't it? Because you also got a lot of people, I think at the beginning of the pandemic, it was the realities that like schools obviously don't have these devices for one per pupil, right? So there's a reality of like people having to scramble and get to those particular sort of consumer devices. And then it's probably the reality of like, oh, I've got some crusty old laptop at home. How am I supposed to remote work? And then then the real core of reality is that businesses are looking, oh, are we, you know, are we still using desktops? A lot of people are using laptops, they have been for over the past decade. But some shops are still, you know, like desktops. Do we ship those to our employees or do we upgrade them to laptops? There's all these sort of difficult decisions to make.

• 8:47Speaker 02

  And I think that creates a new sort of like cycle of buying from from businesses. And they are the main consumers really of PCs right now. They they drive like any sort of growth in PCs, really. So I think that that's pretty much what's been happening.

• 9:04Nilay Patel?

  You know, it's interesting, Monica had that great piece about how all PC, like the notebook market is totally reshuffled. Like our old categories of enterprise laptops or consumer laptop, like it's all just, they're all this, they're all just one thing now. The gaming PCs are gonna have webcams.

• 9:18Speaker 02

  Yeah, because everyone, everyone wants to do a bunch of stuff on the same device, right?

• 9:22Nilay Patel?

  And what strikes me is the most interesting PCs are at the high end now, right? Like, there's just a lot of really nice premium PCs. And you were talking about how Surface was surprisingly up. The whole point of the Surface line was to like, drive the high end of the market and prove that they could compete with Apple at above a thousand dollars. And now I'm not sure they need to. Like, that thesis isn't the point anymore, which is maybe why they were like forecasting down. But they're still selling a lot. It's like, what's the next plan for Surface? Because the market has sorted out that there's a lot of action above a thousand dollars now.

• 9:59Speaker 02

  Yeah, that's a really interesting question. And it's, it's, it's hard to answer really because they've experimented a lot with Surface and some stuff hasn't worked. I would say, like, you know, the point into the Duo is something that hasn't really worked so far. And maybe the third iteration might work, but.

• 10:15Nilay Patel?

  No, it just got Android 11. It took, it's just like a minute ago.

• 10:18Speaker 02

  Just got to wait another two years for Android 12.

• 10:20Nilay Patel?

  The next time Sachin Adala performatively pulls out a Duo in the corner of a room, which she loves doing, it'll be running Android 11.

• 10:29Speaker 02

  Or 12, maybe, hopefully. And in this, the Surface Studio, right? Like, that was a cool sort of experiment to really, and that was very, you know, going off the Apple base of creatives and stuff. And I don't think that's, that's not really hit off. But I don't think it ever necessarily was supposed to. But their core is kind of like the Surface Laptop and the Surface Pro, those two products, and whatever, you know, different models they do to target different sort of sections of the market. But it's like, do they carry on just iterating on those, like, like a MacBook Book would? Or do they try and do something new? Like, the Surface Laptop Studio, I think that's what it's called, yeah, the plinth? It was like.

• 11:08Alex Cranz?

  Well, wasn't there a dual screen laptop for a while? I could have sworn they announced one. Like, I feel like I wrote about one.

• 11:14Nilay Patel?

  Oh, the Neo. It came and it went away.

• 11:17Alex Cranz?

  Then they killed it again.

• 11:17Speaker 02

  Yeah, but that's cancelled, basically. Yeah. Like, that that sort of stuff was definitely so pre pandemic, right? It was like, you know, everyone's on the move and we're all super busy and how can we work whilst, you know, on our laps and all that sort of stuff? But like, that's just out the window now. So maybe your device like that might come back eventually.

• 11:36Alex Cranz?

  So what's like the big question for them, I guess? Like, what is that like?

• 11:41Nilay Patel?

  This is what I'm saying. So the initial thesis was, don't make garbage. We're gonna make not garbage. And you'll see that people like it.

• 11:48Alex Cranz?

  Right.

• 11:49Nilay Patel?

  And they did it. Like, I mean, you have to, you put yourself back then, they were like, don't use garbage 16 by nine screens.

• 11:57Speaker 02

  Yeah.

• 11:58Nilay Patel?

  Surface laptops will have a nice four by three screens. Like, they were, it was just fish in a barrel improvements, right?

• 12:05Alex Cranz?

  Yeah.

• 12:05Nilay Patel?

  To compete with Apple at the high end of the market. They did that. Then they were like into form factors, right? They're like, this one has a kickstand, this one flips over. This one, the studio looks beautiful, but what if it didn't have a GPU that was any good? Like, they were in it, you know? And now they're kind of like, the whole market is doing that. And I think my question is like, maybe the next thesis was dual screens.

• 12:26Alex Cranz?

  Right.

• 12:26Speaker 02

  Yeah.

• 12:27Nilay Patel?

  Right? Like, Microsoft's idea was, we will push the market, we'll take the risk.

• 12:31Alex Cranz?

  But nobody wants to do dual screens.

• 12:33Nilay Patel?

  And there just, there doesn't seem to be one of those anymore.

• 12:35Speaker 02

  I think that their next experimentation phase will probably be, like, they've pushed a lot about repairability, so like modularity, perhaps, that sort of stuff. But also like chip experimentation, like, because they're going into doing ARM stuff. So potentially with AMD, there's rumors about that. So they'll want to experiment more with that on certain devices. And we've, obviously, they've already shipped an ARM Surface Pro X, a couple of those.

• 13:02Alex Cranz?

  So they want to ship like a good ARM product is the next experiment?

• 13:05Speaker 02

  That would be a good idea.

• 13:08Speaker 02

  Maybe something that doesn't have a Qualcomm chip.

• 13:10Alex Cranz?

  Yeah.

• 13:12Nilay Patel?

  Uh, well, I was gonna say this Cristiano Aman from Qualcomm was on Decoder and he was like, next year, the good ARM chip is coming.

• 13:19Alex Cranz?

  Okay, buddy.

• 13:20Speaker 02

  I've heard that for like 10 years.

• 13:22Nilay Patel?

  I mean, he makes a good ARM chip for phones, but he meant the laptop one.

• 13:25Speaker 02

  The repairability stuff is super interesting because they launched that super, I think it's like $249 Surface Laptop SE. I think that that's gonna be an interesting market for them if they can push other OEMs to go that way as well. Obviously, and try and push Apple to sort of do it.

• 13:41Alex Cranz?

  What about gaming? Like, they they just bought, like, they've gone real hardcore into gaming. They were always hardcore into gaming, but like.

• 13:50Speaker 02

  It's it's one, it's one thing that's definitely missing.

• 13:52Alex Cranz?

  Yeah.

• 13:53Speaker 02

  Yeah, it's definitely missing from their lineup. They've they've kind of experimented with GPUs on the on the laptop side, but never really gone.

• 13:59Alex Cranz?

  But like terribly, right? Like, all the GPUs have been horribly underpowered in like a year or two.

• 14:05Speaker 02

  Yeah, they've always been old models.

• 14:06Alex Cranz?

  Yeah.

• 14:07Speaker 02

  Exactly. So maybe that that's that's definitely a hole that they need to fill, but.

• 14:11Nilay Patel?

  Is it Microsoft's gaming? If you want to buy a Windows PC from Microsoft that runs games really well, you buy an Xbox, right? Like.

• 14:17Alex Cranz?

  And then you put Project X Cloud or whatever it's called now.

• 14:20Nilay Patel?

  Yeah.

• 14:21Alex Cranz?

  Load it up, get some Halo.

• 14:23Nilay Patel?

  We should actually talk about gaming. So that's the Windows side. You know, the one thing we were talking ARM, you know, Windows 11 is supposed to be getting the Android app support next month.

• 14:31Speaker 02

  Yeah.

• 14:31Nilay Patel?

  It feels like that it was announced with a huge kaboom. And now, you know, we're just kind of in that that middle period where it's like, oh, boy. We've we've talked about the problems a lot. Have you heard any developments there? Is it going better than we anticipated?

• 14:45Speaker 02

  So like, I think the problem with Android apps on Windows is like, do you need them? I think that's that's the big question, right? And and and how they implement it and all that sort of stuff kind of is a secondary thing, really. But I I think it runs pretty well if you've got the hardware. And obviously, you need a, you know, a Windows 10, 11, sorry, officially supported device for it and all that sort of stuff. But you've also got Google, who are also doing their own thing where they're trying to bring games to it. So and at least they've actually focused on a specific segment of the market. That makes sense. Like you might want Android games on your on your PC because there are there's actually use cases for that. So that kind of makes sense. But whereas Microsoft stuff with Amazon is a bit, I don't know.

• 15:28Speaker 02

  It still feels a bit like who needs this and where's where's the use case? Like if they if they focus squarely on games, like it could be, you know, it makes sense, but I don't know. We'll see if people use it. I'm not I'm not convinced they will.

• 15:42Nilay Patel?

  I feel like Google focused on games because they can do in-app purchases in games on Windows. And no one can get mad at them because you could also just ship your game on Windows.

• 15:53Speaker 02

  Yeah.

• 15:53Nilay Patel?

  It's like go to the place that's competitive and then but it's so easy to pour. We'll see. I don't we'll see if any of that works out for Google, but certainly the idea that you'll play casual games on your PC. And they'll get the game revenue that they get on Android without the regulatory troubles that all the mobile platforms are getting into is very clever. It's like maybe one step away from like Galaxy brain thinking, but it is very clever.

• 16:17Speaker 02

  It is. And they have competition there. Obviously, BlueStacks have, you know, built out a platform that ships on OEM devices and stuff. But, you know, they've got the Google Play advantage, haven't they? So they, you know, they they can.

• 16:31Alex Cranz?

  How many people actually use it, though? Like, how many people are firing up Android games?

• 16:36Speaker 02

  Yeah, I'm not sure on the BlueStacks numbers, but I think they have like a relatively healthy business as far as I as far as I know. And and they're actually taking like their model of, you know, having these apps running on Windows. They're actually just taking it into the cloud. So it's just on ARM servers in the cloud using Amazon servers. So that is kind of interesting because then you can run Android apps within a browser. And then it's like, where does this?

• 16:58Alex Cranz?

  Fallout shelter.

• 16:59Speaker 02

  Where does this end?

• 17:00Alex Cranz?

  Forever.

• 17:01Speaker 02

  I don't I don't I can't remember exactly how many we use BlueStacks, but I think it's like that, you know, that they have a healthy business for sure. So I don't think it's like a small amount.

• 17:10Nilay Patel?

  I do love that there's three competing ways to get Android apps onto your Windows PC. And you have started with, but why would anyone want this? And it's like, I don't know, but if you do, infinite ways to do it. We'll see. I'm very excited for like Microsoft and Amazon to provide some sort of like app distribution competition to Google. We just haven't seen it, right? Like we've not seen it on any platform in so long. I'm just very curious, Cecho's, even though I suspect having used Amazon's App Store.

• 17:42Alex Cranz?

  It's gonna go badly.

• 17:43Speaker 02

  Nothing that you actually want will be there.

• 17:46Alex Cranz?

  Just evernote.

• 17:47Nilay Patel?

  Do you want a six year old version of the sound player? And Amazon's here for you. Okay, we gotta talk about Activision with you. You weren't around last week when the steel went down. Microsoft said it's gonna buy Activision. That deal is already facing regulatory scrutiny. It's a massive deal. Their game, the Xbox division, I guess it's now Microsoft Gaming. They did really well this this quarter. It seems like they're poised to keep growing.

• 18:10Speaker 02

  Yeah, like I think they they're having like record cores and they're growing. Obviously, I think even with this deal, they're still saying that the revenue will still be in third spot behind Tencent and Sony. So this doesn't immediately, you know, bank them into a sort of monopoly position or whatever. But like the the the deal is just super interesting in the terms of the way that Microsoft sort of like structured it and announced it. They're like, it could take us 12 to 18 months, which is kind of an unusually long time.

• 18:44Speaker 02

  And I wonder if like part of that is obviously they're expecting a lot of regulatory, you know, pushback on this. It's also Activision just operates in so many markets as well. But also I feel like they've left themselves some cushion to like get Activision to clean up. I feel like that is a part of this as well. Like, I don't think they want to fully take Activision on until some of those gross issues with that company's culture are sort of rectified. So you can see they've been doing that over the past six months. And there's there's a reason why we heard about some of those firings a day before Microsoft announced this acquisition.

• 19:21Nilay Patel?

  So sweep that under the rug.

• 19:23Speaker 02

  Yeah, like so I think there's part of that. But in terms of the deal, it's, you know, it's consolidation in a in an industry that is just from the pandemic side of things, it's just been booming, hasn't it? Like gaming, it's just exploding in all different directions. It's a super interesting industry. You've got handhelds growing now, you've got cloud gaming on the horizon. It's just a big battle. And I think Microsoft's in there with Game Pass trying to, you know, they want exclusive content and all that sort of stuff, just as Netflix does, just as Disney does. And it's just a battle for your attention, isn't it? And how much you can keep that person on that subscription and paying that ongoing revenue. So Activision, Blizzard, Call of Duty, it all makes it all makes sense, but so it's a lot of money.

• 20:07Alex Cranz?

  It feels like Sony's like path to exclusives and it's done really well. Like historically, it's had the better exclusives. Halo. Accepted. Their path has always been kind of like make deals with studios. Occasionally buy studios, but make deals with studios. And Microsoft was like, no, no, we just buy the studios now. Is that accurate? Like, are they just like buying their way to exclusivity?

• 20:27Speaker 02

  Yeah, I mean, they just need the content, right?

• 20:29Alex Cranz?

  Yeah.

• 20:30Speaker 02

  Like, they have a lot of aging IPs, really.

• 20:33Alex Cranz?

  Yeah.

• 20:33Speaker 02

  Like, obviously Forza and Halo and Gears of War. You know, you can only churn out so many of those games before.

• 20:41Alex Cranz?

  Like, I need a Ball's energy drink and like one of those Puka Shell necklaces to play a lot of these franchises. And, yeah, it's, but it just seems like a really, I mean, this is the antitrust person in me horrible way to get the exclusives.

• 21:00Nilay Patel?

  So Microsoft said they're gonna do the next three Call of Duties on PlayStation, which there are so many Call of Duties and infinite variations within any one Call of Duty that like, not entirely sure what that promise means, but when Microsoft was announced the deal, Phil Spencer said, I want to keep Call of Duty on PlayStation, and they intend to honor existing agreements. And then Bloomberg had reported that Activision had already signed a deal for those three games.

• 21:27Speaker 02

  Yeah.

• 21:27Nilay Patel?

  So it's like really unclear what Sony, what Microsoft does at the next turn of the screen.

• 21:32Alex Cranz?

  And it's hard, like, after, we've been talking a lot about antitrust in the last few weeks, feels like, and all these investigations into Facebook and stuff, and everybody does, when they're going to buy a bunch of other companies, they're like, yeah, don't worry, we're gonna be super good about it. And it's like, there's nothing to stop you, besides like irate guys on Twitter, from making the next Call of Duty after you're contractually obligated to make them for Sony, just making it Microsoft exclusive. And it's like, you gotta, you gotta give us more than just your, your, your good handshake. Phil Spencer.

• 22:05Speaker 02

  Yeah, and I think, I think a lot of that will obviously, we've got 18 months until this all closes. So it's going to be a long time until we really figure out what they're doing. But the, the, the more interesting part is they, they made this Microsoft Gaming Division and now Phil's the CEO of it. So not just a, you know, that's a, that's a special title at Microsoft to be a CEO of a separate business for sure. Cause it's usually they acquire stuff in and then keep a CEO in place to run that business. So it shows you the intent of what they're, what they're doing here. So, um, and now obviously that's going to mean Bobby's gone. Like, I know there was some confusion around that, um, and the way they worded it.

• 22:39Nilay Patel?

  Oh, you're calling it.

• 22:40Speaker 02

  Oh yeah, he's gone, like a hundred percent. Yeah. Like you can read it in the way that he, he sent the email. So employees, the way that Microsoft kind of wrote around it, but this is his exit, right?

• 22:52Alex Cranz?

  Well, he couldn't.

• 22:52Speaker 02

  And it makes him a lot of money and.

• 22:54Nilay Patel?

  Well, if not for the flagrant cultural issues, I would take that exit.

• 22:58Alex Cranz?

  Yeah.

• 22:59Speaker 02

  Yeah. I mean, it's like an ideal exit if you've had shitty culture issues at your company that you've ignored and perhaps participated in. So, but that's, that's, that's capitalism, I guess.

• 23:11Nilay Patel?

  So we'll see. We, like Tom, like you said, this deal is a long way out. A lot of things could happen between here and now, including the deal getting blocked. So we'll see, but it just seems like, you know, when Adela took over, he was all in on Microsoft as a cloud services company. We're going to serve mobile developers. We're going to de-emphasize Windows. I don't really know what's going on with games, but it seems important. And we've just come all the way to, gosh, we're selling a lot of PCs and we're going to be the third biggest gaming company in the world. And that, doesn't that feel a little full circle to you? Like obviously the cloud, like Azure's doing amazing, but it just.

• 23:46Speaker 02

  Yeah.

• 23:47Nilay Patel?

  Emphasis wise, we're kind of back to, boy, we sell a lot of Windows licenses and this Xbox thing is going gangbusters.

• 23:54Speaker 02

  Yeah. It's, it's wild that they're, that they're going to be the third biggest gaming company and have all these franchises under their control. Like, yeah, it's, if you'd asked me that a couple of years ago, I wouldn't have thought that they would be in the position of buying out division or Bethesda. Like both of those are massive. We, we thought Bethesda was big. This is, this is bigger, you know? Is there, is there more? I mean, they still have a lot of cash on hand, so. They could still be doing some, I don't think this is the end.

• 24:23Nilay Patel?

  Sony, just buy Sony.

• 24:24Alex Cranz?

  Buy Nintendo, give us like proper cloud storage.

• 24:28Speaker 02

  Yeah.

• 24:29Nilay Patel?

  Well, actually, you brought up cloud gaming. Like, it's interesting that almost none of the Activision deal points, they brought up the metaverse more than they brought up prod, like, cloud gaming. Like, it's crazy to, like, that's actually the very clear future. They're gonna do the Xbox app on smart TVs, like, it's, it's all coming. Do you think they would ever put an Xbox app on a PlayStation? Because that's how you get Call of Duty on a PlayStation.

• 24:55Speaker 02

  Yeah, this is the main thing that, that, because obviously Netflix is on all of these consoles and, and if you want to parallel that with Xbox Game Pass, which obviously we do a lot. So you would naturally want your service to be on PlayStation, right, to, to stream. But the problem with it is that there's Xbox Game Pass and then there's Xbox Cloud Gaming. They're two kind of separate things. So Xbox Game Pass allows you to download games and play them, which is why a lot of people like it. It's not, currently, anyway. They, they don't like it because they can get Xcloud and, and stream games. Like, that's still something that's very niche. And I think a lot of gamers aren't particularly impressed with because of the latency and everything else.

• 25:35Alex Cranz?

  It's weird because of what games are on it. I say this mainly because I really wanted to play Age of Empires when I went to Texas.

• 25:42Speaker 02

  Right, and it's not that.

• 25:43Alex Cranz?

  And I could not, I was like, well, I can play all the Halo I want. I just want to play Age of Empires badly.

• 25:49Speaker 02

  Yeah, they're, they're still, like, figuring out the sort of PC side of, like, streaming games. And I think that'll come this year and, and next. But, yeah, like, there's still, I don't think there's still a great demand for streaming it. But whereas to get Xbox Game Pass, or whatever you want to call it, onto PlayStation, you're only going to do that from streaming. You're not going to get those native Xbox games on PlayStation. Like, they have to rewrite them or port them, all that sort of stuff. That's just, it's just not going to happen. So. But I do believe that. Xbox Game Pass will probably be on PlayStation at some point. Like, I didn't see that that's

• 26:23Nilay Patel?

  Another line in the sand. That's another bold prediction.

• 26:26Speaker 02

  It's a big, it's a big.

• 26:27Nilay Patel?

  There's no way Sony lets that happen. Are you nuts?

• 26:30Speaker 02

  Well, like, don't forget that Sony and Microsoft want to work together more than they want Amazon, Google, and whoever else to enter the market and take a slice of the money that they make, right?

• 26:42Alex Cranz?

  I have a horrible question.

• 26:44Nilay Patel?

  Are you collusion? That's what you're, you're collusion.

• 26:47Speaker 02

  I mean, you want to keep the top, the top two or do you want to keep the top two, right? And we've seen.

• 26:51Alex Cranz?

  Is the Xbox hardware gonna one day be like the surface of gaming consoles? Where it's like, this is Microsoft, big fancy Microsoft's idea of what this should look like. And also Sony and, and Steam, I guess, I don't, however you feel about the Steam Deck and Nintendo, make their other access points to our giant cloud gaming empire. Like, is that an endgame?

• 27:17Speaker 02

  I mean, it's entirely feasible that that could be the future, yeah, for sure. Like, the way things are going and the investment in the chips, especially on the server side is, it does mean that in a decade, we, you know, the idea that there's an Xbox app on the PlayStation Store is not that crazy, you know?

• 27:36Alex Cranz?

  It's terrible.

• 27:36Speaker 02

  It does seem crazy right now.

• 27:37Alex Cranz?

  Yeah.

• 27:39Nilay Patel?

  Collusion!

• 27:41Speaker 02

  Well, no, but it's also they, they had a strategic partnership between Microsoft and Sony to co-develop streaming solutions for gaming and entertainment services. We don't even know exactly what that means and like what's shaping up there. But that's an endured deal, you know, like on, on, on the backend that that's like, there's a definite, there's a definite business partnership there. Obviously Xbox and PlayStation still compete individually. But like, I don't know, like, I, I wouldn't be surprised if, if, if Sony does enter into, you know, it gets a bit more serious about PlayStation now. That they have an app on Xbox and Xbox has an app.

• 28:16Alex Cranz?

  Wild.

• 28:17Nilay Patel?

  Man.

• 28:17Speaker 02

  It wouldn't, it wouldn't surprise me, but.

• 28:20Nilay Patel?

  I don't know, man. I just like the amount of revenue sharing they'd have to agree to.

• 28:24Speaker 02

  Yeah.

• 28:25Nilay Patel?

  Netflix is there because if you're watching TV on your PlayStation, like at least you're still using your PlayStation.

• 28:31Speaker 02

  Yeah.

• 28:32Nilay Patel?

  And there's a chance you're going to light up a game and play a game. And like Sony makes a lot of TV shows, so there's a chance you're just watching a Sony TV show. Like it all kind of works. I think the same is largely true for Microsoft. Maybe you're just watching MSNBC on your Xbox and Bill Gates's dream. That M is still at MSNBC. It's very funny to me that it's.

• 28:51Alex Cranz?

  I love it.

• 28:51Nilay Patel?

  They just don't know what to do with it. But I, I think once you get to, we've turned your PS5 into a dumb terminal for Xbox Game Pass. Like someone's going to be like, hey, did you run this by anyone? Did you, does the CEO know about this decision?

• 29:07Speaker 02

  But if we truly believe that cloud gaming is the future, then, you know, like we, we like probably most of us subscribe to Netflix and Disney, right? And probably not much else.

• 29:18Alex Cranz?

  So many other things.

• 29:20Speaker 02

  Subscribe to PlayStation and Xbox in the future and maybe Nintendo.

• 29:24Nilay Patel?

  Fair enough.

• 29:25Speaker 02

  Like, you know, like it's not, it's not out of the realms for it to.

• 29:28Alex Cranz?

  Yeah.

• 29:29Speaker 02

  To, to happen.

• 29:30Nilay Patel?

  Collusion. All right. Let's talk about Samsung quickly and then take a break. Alex, Samsung seems like it had a great quarter. They, they were in the doldrums last year and they've bounced all the way back.

• 29:41Alex Cranz?

  Yeah, yeah. They, they, they actually, they sold, it seemed to me they were mainly driven by like TV sales. Cause people like to buy TVs and, and surprisingly phones. I mean, surprisingly for me, I guess. Especially being here, we've talked a lot about how everybody likes to buy laptops. And I keep thinking, okay, well that means they're not buying phones. And no, Samsung is, people are buying phones. They saw like 24%, 24% year over year growth. So like, it's kind of incredible.

• 30:08Nilay Patel?

  It's 24% year over year revenue growth total.

• 30:11Alex Cranz?

  Right.

• 30:11Nilay Patel?

  And that is attributed to phones and TVs and appliances.

• 30:14Alex Cranz?

  And then they also saw a big drive in semiconductor business. So. Despite there being like, nobody actually able to make them and ship them to people to put into phones and other devices, they did a really good job. Like, I think it was 52% year on year for profit growth in that business. So just really, really huge, wonderful time for them to go and announce a brand new phone that may or may not have some Samsung chips in it.

• 30:44Nilay Patel?

  In a couple of weeks.

• 30:45Alex Cranz?

  Yeah, in a couple of weeks.

• 30:45Speaker 02

  I always have an ongoing argument with Thomas Ricker.

• 30:48Alex Cranz?

  Uh huh.

• 30:49Speaker 02

  That he predicted that Samsung would be like dead at some point in the next five years.

• 30:56Alex Cranz?

  Well, like, the family that runs it was trying that, but it's too big to fail.

• 31:02Speaker 02

  They just, yeah, they've got so many different businesses. Yeah.

• 31:06Nilay Patel?

  So the chip thing is like, interesting, right? So they, they could not produce, Samsung makes a lot of RAM, they make a lot of flash storage. They were not able to produce as much as people wanted. But it like makes sense, like the chip shortage is all on the demand side. Like, if you got a chip right now, someone will buy it.

• 31:22Alex Cranz?

  You just.

• 31:23Nilay Patel?

  Like, if you, you're just walking down the streets, like, I had chips, like, someone will come.

• 31:27Alex Cranz?

  You can crank those prices.

• 31:28Nilay Patel?

  And buy, like, desperate for them. So that, I think, makes sense. We just didn't see the, Samsung was not able to deliver phones last year.

• 31:35Alex Cranz?

  Yeah.

• 31:36Nilay Patel?

  Like, they just weren't able to do it. It was, like, hard to buy a Samsung phone. And we saw Apple just, like, scoop all that up.

• 31:43Alex Cranz?

  Yeah.

• 31:44Nilay Patel?

  Right? Like, the carriers are in the midst of this endless, stupid 5G transition. They're now fighting with airplanes, like, whatever.

• 31:52Alex Cranz?

  Tom's gonna be on 6G before we get there with them.

• 31:56Nilay Patel?

  Do you see Walt Mossberg was tweeting about, uh, he was doing a 5G speed test. He's like, I prefer my planes to work. This is garbage.

• 32:05Speaker 02

  It was like 5 meg or something like that.

• 32:07Nilay Patel?

  It's horrible. Uh, it was very good. Yeah, it seems like the carriers are still heavily subsidizing 5G phones. Samsung was able to pick some of that up. And then, you know, people are at home, so they're just buying a ton of TVs and appliances, and Samsung, like, makes a lot of refrigerators. And I think they've just kind of, like, gotten back on track. The big question is whether the S22 is gonna be any good. And how they're gonna talk about it in a way, I mean, it's, February 9th, they've confirmed that, well, they've confirmed a Galaxy Unpacked event. And then, everything else is leaked, so we know it'll be the S22.

• 32:41Speaker 02

  Put it on their website next week by mistake.

• 32:45Nilay Patel?

  They're gonna mail us all one before, but it's gonna have a stylus. It'll have a 6.1 inch display. It just seems like an iterative upgrade in adding a stylus. And the question is like, is that gonna be enough?

• 32:57Alex Cranz?

  It's the notice back.

• 32:58Speaker 02

  It's gonna have a fingerprint reader in the screen though, right?

• 33:00Alex Cranz?

  Yeah.

• 33:01Nilay Patel?

  That is one of the leaks.

• 33:03Alex Cranz?

  Right, ultrasonic fingerprint reader.

• 33:06Speaker 02

  So that's cool, if it works.

• 33:07Nilay Patel?

  So it'll have a slow fingerprint reader.

• 33:09Alex Cranz?

  I think the first one of those was like in 2016. So it took us seven years to get to like an in-screen reader that on a flagship device that people would actually buy in the United States.

• 33:22Speaker 02

  And isn't there rumors that the iPhone is going that way potentially?

• 33:26Nilay Patel?

  The iPhone rumors, not to segue a Samsung conversation, Apple, the iPhone rumors right now are out of control in terms of like, it'll have a dot and a dash and then it'll have it in, it's like, all of this makes no sense.

• 33:37Alex Cranz?

  It's gonna cuddle you at night and make you feel better when you wake up every morning. Like, it's just magic.

• 33:42Nilay Patel?

  But it's, the point I was trying to make on Samsung is, it seems like they were able to deliver phones, which was very challenging for them a year ago. But I, I really believe all of that phone demand is carriers just giving phones away so they can turn off their 3G and 4G networks, right? Which they're in no position to do right now. Maybe they're gonna turn off 3G networks. There's a lot of like, arguing with T-Bone and Sprint around that stuff right now. But they've gotta upgrade the phones so they can like re-farm the spectrum. And so I think the phone companies are like, yeah, here's some phones, here's some 5G phones.

• 34:17Alex Cranz?

  Just ride this way.

• 34:18Nilay Patel?

  I think Samsung's here, but I just don't, I think, the big question for Samsung is, how are they gonna differentiate this phone from?

• 34:25Alex Cranz?

  From the S21.

• 34:27Nilay Patel?

  Everything else in the market right now, and then in particular, from the S21. It's got a stylus type. And like importantly, because Apple has shipped so many phones in this market and sold so many phones because they were able to deliver these 5G upgrades. Like, that's a lot of people who just bought an expensive phone. So, like, I just think it's gonna be a challenging time for them with the S22. And then, of course, there's like the green bubble discourse happening everywhere.

• 34:54Alex Cranz?

  I think like the guys counting the numbers, cutting the beans over there at Samsung are really excited that they just announced that QD TV because they're not gonna be selling a lot of phones this quarter. It's all about that TV business, I bet for them.

• 35:09Speaker 02

  Yeah, the TV stuff at CES was pretty cool though.

• 35:12Alex Cranz?

  It's pretty do-

• 35:12Speaker 02

  Like, we've been waiting a few years for them to really-

• 35:15Alex Cranz?

  I really, really wanna see one in person. I wanna like drive out to Jersey and just bang on the door at their little TV testing lab. They'll be like, "Please let me in." They won't. They'll be like, "Please leave."

• 35:25Nilay Patel?

  "Can I see your TV?" That's like a classic little kid move. Like, "Can I see your TV?" Amazing. So, yeah, February 9th is Unpacked. We're all assuming it's the S22. The TVs are gonna be, what, this summer? It's usually when new TVs come out.

• 35:40Alex Cranz?

  Yeah, yeah, yeah. They won't. They will not actually affect this quarter. They'll come out this summer slowly but surely. You'll only see reviews of the giant ones.

• 35:50Speaker 02

  But, but once again, Samsung is not a Mobile World Congress, right?

• 35:54Alex Cranz?

  Right.

• 35:54Speaker 02

  With its announcement. Mobile World Congress is still going ahead, apparently.

• 35:58Alex Cranz?

  Apparently.

• 35:59Nilay Patel?

  Very good.

• 36:00Speaker 02

  We don't know what's gonna be there.

• 36:02Alex Cranz?

  Or who.

• 36:02Nilay Patel?

  Do you remember like Mobile World Congress is like way back in the day, Tom? When like Microsoft would announce an entirely new operating system and then 20 minutes later, like, like Sony Ericsson would announce 500 phones. Like, those days are over. Like, now it is definitely carrier executives just doing carrier stuff. Yeah. We'll see. By the way, at Unpacked, we are sort of expecting a new Galaxy Tab S8, which I only bring up because Google has a new head of Android tablets, Rich Miner, who's like an old school Google executive. And he's come back to run a tablet team.

• 36:39Alex Cranz?

  He's gonna make it happen this time.

• 36:40Speaker 02

  Is that, is that the tablet with the notch?

• 36:43Alex Cranz?

  Yeah.

• 36:43Nilay Patel?

  Uh, the S8?

• 36:45Alex Cranz?

  Yeah, it's got, all the renders, I've seen the notch is so tiny as to have me going, "Where is the notch?" But-

• 36:52Speaker 02

  That's the notch that Samsung spent, spent millions of marketing dollars on hitting Apple over the head for.

• 37:00Nilay Patel?

  I think notches are the future. I just think it's interesting. Okay, we are hearing about Samsung has sort of like been the only player in Android tablets for a long time. Right? Apart from the very, very cheap ones. I did see a TikTok of a guy who bought all of the hundred dollar tablets at a Walmart to try to mine Bitcoin with. And then like, it was like a long video and you like built this whole thing. And then like the next video was like, that cost me so much money and I made five cents. It's like, what did you think was going to happen?

• 37:28Nilay Patel?

  There was a GPU shortage, man. Like, um, it was very good. And he's like, running his like tablet farm of hundred dollar Android tablets. So there's obviously a market there, but Samsung has pretty much been alone at the high end. I think it's interesting that they put out another one with this notch, but the idea that Google is going to bring in a, like a powerful executive to do it is somewhat fascinating to me. Just based on everything we've talked about with laptops and changing consumption in the home and all, like the fight for Chromebooks, like they've just ignored their tablet plans. And I don't even know where that slots in.

• 38:02Alex Cranz?

  Well, they didn't ignore it. They were like, it's gonna be Chromebook. No, never mind, never mind, never mind. Ignore that, ignore that. Like, they definitely, they were, they've been thinking about tablets, except for maybe last year. Was it the year before that, that they did the terrible tablet, the Pixel?

• 38:16Nilay Patel?

  It's the Pixel. Oh, yeah, the Go. The Go.

• 38:18Alex Cranz?

  Oh, yeah. Like, yeah, they, they, they keep flirting with it and trying to make it in Chrome OS. I think I called it Chromecast a second ago. But they keep trying to make it and Chrome OS work together. And now maybe they will not and just respect their different markets.

• 38:36Nilay Patel?

  It was the Pixel Slate and it was very bad and Dieter hated it. That's why. Pixel Slate. And then Google was gonna make a Pixel tablet and they, they canceled it.

• 38:44Alex Cranz?

  Everybody hated it. I think I was the only person who liked it. And that was because mine was one of the few that wasn't terrible. Like, it kind of actually worked and I just played a lot of Fallout Shelter on it.

• 38:56Nilay Patel?

  I remember when we were hiring you, I was like, Dieter.

• 38:59Alex Cranz?

  She, she liked that Pixel Slate.

• 39:01Nilay Patel?

  It's a real red flag.

• 39:03Alex Cranz?

  It was definitely a moment of being like, what did I do? I did a different thing than everyone else reviewing this.

• 39:09Nilay Patel?

  Everyone hates. I've ruined my life. It was not great. I remember Dieter, like Dieter, he was like, oh, man. He was furious. I remember that. I'm gonna kill this thing. He was very upset. Okay, that's Samsung. We're seeing some stuff. We're hopefully we'll see some Google tablet tablet stuff. We gotta take a break because there's a lot of Intel news we need to talk about. They're they're building some buildings. There might be stuff in them, which is a big deal. We'll be right back.

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• 40:45Nilay Patel?

  Okay, we're back. So there's a lot going on with this Intel announcement, but like we've been covering Foxconn for a long time. So I feel bad for Intel because everyone was like tweeting at me being like, is Intel in Ohio another Fox? I'm like, no, I think they're actually. They're gonna make chips. Alex, you wanna walk us through this deal?

• 41:03Alex Cranz?

  Yeah, I just want everyone to know, last week I drove through Ohio and I looked at my friend and I said, "What is the point of Ohio?" I'm sorry to all of you listening in Ohio.

• 41:12Nilay Patel?

  Wow, we're trying to grow the audience, man.

• 41:15Alex Cranz?

  I'm so sorry.

• 41:16Nilay Patel?

  We just turned one state off.

• 41:18Alex Cranz?

  You've all turned off. It's okay. It was really snowy and gross and I was upset driving. And then I get back to New York, I pop open my computer and I'm like, wow, I just got slapped in the face. This was karma for this bad joke because Intel is planning to spend $20 billion on this huge fab in Ohio. It's their largest fab in decades. They kept calling it the Silicon Heartland. It's being built in Ohio.

• 41:46Nilay Patel?

  I don't know what's going on.

• 41:47Alex Cranz?

  As someone from the Silicon Prairie, no, just don't put silicon in front of things. It always sounds stupid.

• 41:53Nilay Patel?

  Well, someone from the Wisconsin Valley, I'm just, don't, don't brand the places.

• 41:57Alex Cranz?

  Don't brand it. Please don't.

• 41:59Nilay Patel?

  That's why I did it too.

• 42:00Alex Cranz?

  You know, they're planning to, they're gonna invest $20 billion there. They're gonna be investing in the universities there to try to create a whole new talent pool. The idea is that it's gonna all kick off in around 2025 and they'll be building actually the terrifically terribly named Intel 18A like chips there, which is technically gonna be like a two nanometer chip, even though it's called an 18A. Don't get me started. But they're gonna, they're gonna build it there and the idea is just build this whole new like center for chip manufacturing in general, which has historically been in like Arizona. So it's massive.

• 42:42Nilay Patel?

  Obviously, Ohio put in some tax subsidies. They did not offer the biggest package, which I think is interesting. They are deferring some employment taxes. They, one town had to annex land from another town, which is, if you're into Ohio local politics, it's very spicy, but they did it. What was really interesting to me, so this is great. I'm happy they're building chips in America. I'm happy they're making this investment. I believe Intel when it says it's going to manufacture chips. In a way that Foxon saying it was gonna manufacture LCD TVs in America when there are no LCD fabrication plants in America, like it would just doesn't see, there's a reality to this. I know I'm like the person who brought vaporware back, but there's a reality to this that I can see is real, but it's if you just look at the way they're talking about it

• 43:28Nilay Patel?

  and the way that the politicians are talking about it, there's massive disconnect from reality, right? They're like, we need to solve the chip shortage. The automakers and suppliers in and around Ohio will use chips. And like Sean did this whole rundown. He's like, well, it's not gonna be online anytime soon to stop the chip shortage.

• 43:49Alex Cranz?

  2025, maybe.

• 43:50Nilay Patel?

  Intel doesn't make any chips for cars. And why would they make like their most cutting edge chips for car? Like, that's definitely not gonna happen.

• 43:59Alex Cranz?

  Well, he kind of like in his piece, he kind of theorizes why they're all suggest like why they're they're using all this huge bombastic language. And it's that Biden specifically is trying to push through a bill right now that will get more chip funding. And so this is kind of like the taste, the tease of saying, hey, look, look, Ohio gave them a little money and then now they're gonna change the world. Think of how much world changing can happen if you give them a lot of money.

• 44:26Nilay Patel?

  I just love the idea that to ship like a Silverado with heated seats, you need a two nanometer chip. Like, what are we talking about? Like, that's the problem with the car industry. Like, their old process nodes do not have enough supply. Full stop. I've talked to lots of car CEOs now. They're very clear on what the problem is. And they all say it's gonna be over by like the middle of the summer, maybe into next year, if things, if there's another supply shock like, like, but they're all like, we're managing through it.

• 44:55Alex Cranz?

  Yeah.

• 44:56Nilay Patel?

  The cars are coming off the trucks. It's just, I, I agree with you. I think there's some political expediency here. The Chips Act is floating around. McKenna is covering every twist and turn of it right now. Anyway, I think it's great. It's just gonna be a long time.

• 45:11Speaker 02

  We still, we still don't know exactly what they're gonna build there, do we?

• 45:14Alex Cranz?

  No, no, they, they said that they're planning to build like the Angstrom line there. So like the, the 18A that like they are planning. Like, that's the kind of thing they would want to be building there. But my favorite part of this was the the size comparison, which is that Intel says, oh, yeah, ours is going to be huge. It's going to be thirty football fields in size.

• 45:34Nilay Patel?

  Oh, my God.

• 45:35Alex Cranz?

  Then Samsung had said, well, our, uh, they built one recently in in 2020, and theirs was sixteen soccer fields inside. I'm so sorry, Tom. I'm so sorry for doing this to you.

• 45:48Speaker 02

  Soccer fields are better than football fields.

• 45:50Alex Cranz?

  And then now, like, there's a third Samsung fab that will allegedly be twenty-five soccer fields. And I just love that everything is measured in sports fields and not even the same one. Like, we can't even agree on the sports field.

• 46:05Speaker 02

  It's the Super Bowl World Cup of chips.

• 46:09Nilay Patel?

  When Sean was writing this all down, he just had to put in this note being like, soccer fields are larger than football fields.

• 46:17Nilay Patel?

  But we know how large they are. It's very good.

• 46:21Alex Cranz?

  Very good.

• 46:21Nilay Patel?

  So and then the other thing is Intel's already spending twenty billion on two new fabs in Arizona.

• 46:26Alex Cranz?

  Right.

• 46:27Nilay Patel?

  And then TSMC is gonna build factories in Texas and Arizona, I believe. Like, chip manufacturing is coming to the United States. And then there's this bill in Congress, which would fund even more of it. So like, I buy that they're, the way they're talking about it is just to put some capital around it. Like, when the chip shortage eases up, people like, oh, I remember when they announced all those football fields.

• 46:52Nilay Patel?

  And like, maybe like, vote for whoever was on stage at that that point in time.

• 46:55Alex Cranz?

  Pat Gelsinger.

• 46:56Nilay Patel?

  But this is years away from reality. Pat Gelsinger, CEO of Intel, was on CNBC today.

• 47:02Alex Cranz?

  Yeah.

• 47:03Nilay Patel?

  And he was like, we had great earnings. We're excited. You can see we're a little bit ahead of schedule. The Action Around the Chips Act is A-OK. And like he's doing the politician stuff.

• 47:12Alex Cranz?

  Yeah.

• 47:13Nilay Patel?

  Cause I think, you know, he runs the biggest chipmaker in the United States. So if the chips act like he gets the money.

• 47:19Alex Cranz?

  He's like, you don't need it for the trucks.

• 47:20Nilay Patel?

  It's just interesting to see Intel. I think Pat has a, he's got a good plan. I keep asking him to come on Decoder. We'll make it happen. He's got a good plan, but it's the amount of politics he's doing is sort of unlike most of the other CEOs that we encounter. Like he's fully into invest in Intel, pass some bills, give us money, we will shore up the American high tech supply chain because we're Intel. Your other choices are Samsung and TSMC.

• 47:47Alex Cranz?

  I think it's because he's also a different kind of company, right? Like, like Intel has always been building a lot of their chips here in the United States. They've, they've always been kind of a manufacturer on top of all the R and D and other things we associate with giant technology company. The Googles and the, the Microsofts and stuff of the world aren't doing that. They're not manufacturing, especially at that scale. And when they do, it's always been outsourced manufacturing. So it's a very different kind of, it makes sense that he would come at this from like the car CEO angle of things, wheeling and dealing, rather than the, the way we've seen Google and Microsoft and Facebook and other large tech companies interact with Washington.

• 48:30Speaker 02

  No, he, he's, he's an engineer at heart, right? So he, he's definitely engineering Intel out of whatever they were doing before, which was, I don't know what they were trying to do, drones and, and all sorts of weird stuff.

• 48:43Alex Cranz?

  He's engineering them into a big pile of money from DC. I respect it.

• 48:48Nilay Patel?

  Yeah. Not getting to the next process now.

• 48:51Speaker 02

  I think a lot of people wrote off Intel and, and their ambitions years ago, cause they, they kind of went a bit strange at CES for a few good years.

• 49:00Alex Cranz?

  A lot of drone light shows.

• 49:02Speaker 02

  A lot of drone shows, just, I don't know. It was just a bit crazy. A lot of like, we've missed mobile, you know?

• 49:09Alex Cranz?

  Yeah. They, they seem like a place without purpose and.

• 49:12Speaker 02

  Yeah. But having Pat back is, I think it's gonna be super interesting, especially with these two new fabs and who knows if they get to eight. I don't know. We'll, we'll see there, but. I think just the stuff that they're doing, they're back on the PC side as well, for sure. Like on the laptop side. So it's, it's good to have competition and to be pushed by MD and everything and TSMC. So I'm, I'm intrigued to see where they go in the next five years.

• 49:39Alex Cranz?

  Yeah.

• 49:39Nilay Patel?

  I will say this, and this is my last in till now, they had earnings, they did okay. They beat some estimates, their client group, which is their sort of like consumer chip group is down. But their next generation server chip, Pat says, is on schedule to start. And the only reason I bring it up is because that chip is code named Sapphire Rapids.

• 49:57Alex Cranz?

  Yes.

• 49:58Nilay Patel?

  Which absolutely sounds like a nightclub.

• 50:00Alex Cranz?

  That's incredible. Whoever's doing that stuff, get them on the, the consumer side.

• 50:06Nilay Patel?

  Yeah, they should just go straight to nightclub names to the next generation of trips.

• 50:09Speaker 02

  It sounds like a Disney like ride or something.

• 50:15Nilay Patel?

  Well, there's a specific kind of nightclub, I think it sounds like, but I won't say on this or family friendly show.

• 50:22Nilay Patel?

  I'm just saying, it would be, it would be one way to get some heat back on these names. Okay, let's talk about Tesla real quick. They had another profitable year. They called a breakthrough. They're selling a lot of cars, just like every car they make. They're actually getting very efficient in making the cars. Build quality issues aside, but some of the noise around them, right, the rest of the.

• 50:47Nilay Patel?

  I was gonna do like a vaporware. Let's do the vaporware segment first.

• 50:50Alex Cranz?

  Go for it.

• 50:50Nilay Patel?

  So the Tesla vaporware situation is like increasingly hilarious. So the Cybertruck is delayed until next year. There's a, there, there is a Cybertruck floating around the, the factory in Texas that Elon says he's driving. There's, there's like videos, just like random people walking up to it and being like, damn, that looks like a triangle, like a hilarious video. It's on our site. You can go, it's just like a random dude, just like security guards or something being like, that's the wiper? Huh? Like, it's very good. So that's delayed until next year. You know how I feel about vaporware cars? By the way, I'm pretty confident, just based on the, the, the use of the word vaporware in my timeline, since we started talking about vaporware cars in the show, that that is us. We did that.

• 51:34Alex Cranz?

  Yes.

• 51:34Nilay Patel?

  We brought the nineties back.

• 51:36Alex Cranz?

  Love it.

• 51:36Nilay Patel?

  Anyhow, so I think the Cybertruck is vapor till it ships, just like I think the Rivian and the F-150 Lightning, all the Silverado, all vapor till they ship. But then the Roadster is pure vapor. The Semi is pure vapor. And then Elon's like, the most important thing we're gonna do is the Optimum robot, which right now is a guy in a onesie dancing on stage. It's the most vapor that's ever vapored.

• 52:07Speaker 02

  And I've seen headlines that just like have absolutely no scrutiny of this thing.

• 52:12Alex Cranz?

  The robot's coming.

• 52:13Nilay Patel?

  That's just a guy. No, no, you guys, it's, it's just a guy.

• 52:19Alex Cranz?

  He's got like the Neuralink. Maybe he's got that like in his, in his, in his brain.

• 52:23Nilay Patel?

  Oh yeah, he said he's gonna do Neuralink this year too. Look, Elon has done amazing things. The rockets take off, they land, the electrification is all him. He misses a lot of deadlines, you know, I'm just saying. It's a guy in a suit.

• 52:38Speaker 02

  Yeah, but don't forget about him. Don't forget about the robots.

• 52:41Nilay Patel?

  I won't forget about the robots. But Tesla had a second profitable year. They are selling an awful lot of cars. You know, if you want to buy an EV right now, you have Tesla is your choice. If you can get a Mach-E, you can find one. Andy Hawkins, our transportation editor, has an Ioniq 5, a Hyundai Ioniq 5. It is a vanishingly small list of like practical EVs on the market right now. So I see why Tesla's doing great. It's just the, the vaporware car situation is bad. And like with Tesla, it's like kind of getting worse.

• 53:15Alex Cranz?

  I just, I hope they announce a plane next. They just, they need like bigger and bigger things to be announced that never happen.

• 53:23Speaker 02

  I just, I'm just waiting for the robot to drive me around.

• 53:26Alex Cranz?

  Oh, that's, that's how they're gonna get there.

• 53:27Nilay Patel?

  No, so, so being this, the robot, you know, Tesla's very committed to the phrase full self-driving, which is deeply problematic for a variety of reasons. And now the rest of the car industry has decided to abandon the term self-driving because it has such a bad rep. So the, uh, the self-driving Coalition for Safer Streets has renamed itself to the Autonomous Vehicle Industry Association to distance itself from Tesla. And so that group is Waymo, Ford, Lyft, Uber, Volvo, like, uh, and then the software companies, Cruise, Aurora, Argo, like, Zooks. They're all like, yeah, we're, we're done with self-driving. We're like, we're not using that word anymore.

• 54:08Speaker 02

  I look on Twitter, early morning on the European time, so you get a lot of West Coast, and there's always just like a bunch of people with these, because they're, they're on the full self-driving beta thing. And like, it's just some, some wild things. Like, the car trying to turn in front of a truck and...

• 54:25Nilay Patel?

  Elon, by the way, speaking of vapor, he said full self-driving will be completely operational this year, which he's been saying for many years now.

• 54:32Alex Cranz?

  Let's see it.

• 54:33Nilay Patel?

  But that's what he said.

• 54:34Alex Cranz?

  I'm really excited.

• 54:35Nilay Patel?

  I don't know, man. Again, I, all credit to the accomplishments. The rockets take off and they land. That's a big accomplishment. But the, the vapor situation around Tesla and like, the whole car industry right now is all vapor. It's just fake cars. It's a render of a Mercedes where they didn't center the logo. And that, just like, all the way down the stack, like, everything. It's a guy in a suit. We'll see. Uh, all right, we gotta take a break. Tom, thank you so much for joining us.

• 55:02Speaker 02

  No worries.

• 55:03Nilay Patel?

  We gotta go. We're gonna come back and then Casey and Alex and I are gonna figure out what's going on with Neil Young. It's gonna be emotional. But Tom, thanks so much. We'll be right back.

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• 56:22Nilay Patel?

  We're back. Casey Newton is here. Hey, Casey. Hey, Eli. Casey, when I think of the most complicated, annoying moderation problems, I think of you, so that's why we're having you on. So the baseline here is there's a guy named Joe Rogan, who our listeners may know is the guy who poisoned and corrupted my hero, Aaron Rodgers. But he's a very famous podcaster. He's got exclusive Spotify, I believe it's a $100 million deal. If you even so much as whisper that Joe Rogan is Spotify's employee, a Spotify PR person will like leap out of the bushes and remind you that it's not. It's just a distribution, exclusive distribution deal, and Spotify does not employ Joe Rogan, but it is an exclusive distribution deal.

• 57:06Nilay Patel?

  On his show, he often expresses an enormous amount of skepticism about vaccines to the point where he says they don't work. A lot of people are always mad at him about this. Doctors wrote a letter, and then this week Neil Young said, you know what, I'm out. Take my music off of Spotify. He put up an open letter. The open letter went down. And then something, there were machinations and then Spotify took Neil Young's music off. It just all seems like a mess, Casey.

• 57:30Speaker 06

  It is a mess. It has been a mess since Spotify hired Joe Rogan. On some level, you have to believe they knew exactly what they were getting into, right? They'd listened to the show. Uh, Joe Rogan is very good at being an edgelord. He often stops just short of saying, don't get the vaccine, for example. Like, that's not a thing that he says, but he loves being in this mode of, I'm just asking questions. And as a result, he has platformed a lot of conspiracy theorists and, and some really awful folks. And on one hand, Spotify has said that they prohibit their hosts from sharing COVID misinformation that is likely to harm public health. And yet, on the Joe Rogan subject, they have taken no action whatsoever.

• 58:14Speaker 06

  So it really does feel like, at least to me, like this is a case where Spotify has said one thing and done another.

• 58:19Nilay Patel?

  So this is why I say when I think of troublesome moderation issues, I think of you. You've covered content moderation a lot. We know at the big social platforms, we know how their moderation teams work by and large. It's actually pretty remarkable. We might not agree with what those moderation teams do, but you have been to several Facebook moderation centers. As you've reported at the conditions that those people work in. You've been to their war room about election moderation, which I believe you like it's a conference room. Right? Neil Mohan, uh, who's the, the chief product officer at YouTube runs moderation. He came on Decoder. We talked about moderation.

• 59:00Nilay Patel?

  We know how Twitter, like just down the line, social platforms know they have to be at least somewhat transparent. Here Spotify, like the, the level of just opacity is out of control. I can't think of a, a single analog to it.

• 59:12Speaker 06

  It's quite high and I think we should keep in mind that Spotify is relatively young in this phase, right? Like Facebook what didn't have moderation centers two or three years into its existence. Spotify only started to sign these exclusive distribution deals two or three years ago. Um, and I don't think- Think that they have really made it a priority to spin up a set of like publishing standards. Essentially, they have not told us much about how they moderate content. You know, I think up until now, we have wanted these platforms, the podcast platforms in particular, to take a very light hand when it comes to moderation, because most podcasting

• 59:56Speaker 06

  clients are just RSS readers, right? And no matter how bad a thing is on the internet, for the most part, we're not calling on, you know, RSS feed readers to remove feeds. It's it just sort of is above the level where we want to see content moderated. But something changes when you pay someone $100 million, right? And I think Spotify has just sort of willfully ignored that. But then Neil Young came along and I think revealed that they are going to have to change their approach.

• 1:00:25Nilay Patel?

  So Spotify has only sort of willfully ignored it. We, I mean, Joe has said other extremely right on the border vaccine skeptical things. And we've asked Spotify, we actually, I got into a fight with Spotify over a story Ashley published. But Ashley, we would have had her on, she's traveling. But Ashley covers Spotify a lot with Hot Pod, her newsletter. She wrote a story about how they were okay with something Rogan had said. And we had this debate. They were like, no, it just doesn't cross our line. And I was like, but you draw the line. That means that you're, you have drawn the line in such a place that this speech is okay. Like, that's how this works.

• 1:01:06Alex Cranz?

  It just looks like someone's signature.

• 1:01:08Nilay Patel?

  Yeah, it's just like, well, you drew the line. Who drew the line? It's you. There's no one else. There's no like global standards, right? Like, there's a First Amendment in this country, and that means the government can't draw the line. So it's you. And I just don't think they've contended with it as they've bought up all of these podcast studios.

• 1:01:24Speaker 06

  They have it. Now, of course, you know, I always think it's just fun to put yourself in the shoes of Spotify as they're thinking through acquiring the Joe Rogan podcast. And we can assume that at no point during that meeting, was there someone in the room saying, well, you know, this means we're going to have to develop domain expertise on science and medicine, because Joe is going to be making a lot of claims. Related to that, and we want to make sure that he is not going too far outside the bounds of what is known to be true. And yet, in practice, I think when you put yourself into a publisher role, the way Spotify has, you kind of have to do that. You have to take a position on something like, do you think the vaccines are effective, which they are? And if so, do you want to pay people to tell them the opposite?

• 1:02:09Speaker 06

  I don't think we should pay people to tell them that the vaccines don't work, but Spotify has chosen to do that. And so it's only natural that you're starting to see folks in the artist community rise up and say, the hell with this.

• 1:02:20Nilay Patel?

  So the other problem here is the dynamics of Spotify's money, which are unlike YouTube or whatever, right? You're a YouTuber or an Instagram influencer, whatever. You put the content on the platform, they monetize it in some way, they cut you a check. That check is almost not as much as you want it to be. And then they make a video about why you're quitting YouTube, and then you don't quit YouTube. That's the pattern. We know it well. Spotify, right, it's effectively renting the music that you listen to. So it has some pot of money that it makes. And then it has a bunch of deals with major labels and artists to pay them per stream, which those numbers are not high. You might have some other deal.

• 1:03:04Nilay Patel?

  But basically, every time you pay Spotify for music, it has pre-allocated some of your subscription fee to the labels every time you stream music. And then it obviously layers on advertising. With podcasts, it just owns a bunch of studios and it paid Rogan all this money. And every time you stream an episode of a podcast, the cost, they don't have to pay for it again, right? Which is a very different model than every time you stream a song, someone gets paid.

• 1:03:29Speaker 06

  And also, they can keep all the ad revenue.

• 1:03:31Nilay Patel?

  And they keep all the ad revenue. So they have a huge economic incentive to make this work. And they're, I think that they are trying to lump the two things together. Right, Daniel Ek has said, "Well, I don't want to moderate rap music."

• 1:03:43Speaker 06

  Right.

• 1:03:43Nilay Patel?

  Which are you fair, right? But they did try for a while to like, de-list R. Kelly songs.

• 1:03:50Speaker 06

  And by the way, I think this is a really hard problem. Like, I don't want to sit here smugly and tell you that I think the question of, "What do you do about R. Kelly on a streaming service?" is really easy. My basic feeling is, it should be okay to search for these people. But again, if you are going to put yourself in a publisher role and say, "We're gonna put together a list of R&B hits," I think it's actually okay for people who work at the company to say, "Well, I don't know if we want to feature this person." And I can understand other people saying, "That's ridiculous. If you're gonna start policing the behavior of every artist, we're gonna have to delete the platform." Right? So, these are just hard, unsatisfying problems. But, you know, all that said, I have been fairly critical of Spotify on the broken stuff.

• 1:04:31Alex Cranz?

  Do you think Young's gonna be the only one doing this? Like, are we gonna see other musicians? And is there any musician who could actually get Spotify to be like, "Actually, never mind."

• 1:04:40Speaker 06

  So, uh, yeah. Somebody on Twitter today was like, was asking me, "How different is this if it's Taylor Swift or BTS?" And I'm like, "Oh, I think it'd be really different." I think Spotify would have to say a lot more. If for no other reason than where Taylor and BTS go, others will presumably follow. And again, I do think people will follow Neil Young here. But, you know, something I've been thinking about today is, on one hand, I think most artists want to be on Spotify because it's good for their exposure. And I do think, once you hit some kind of threshold, Neil Young apparently had 6 million monthly listeners. I bet he's making some, you know, meaningful amount of money off of that, although I don't know how much. I think there are probably also a lot of artists who are already rich.

• 1:05:22Speaker 06

  And if they want to make a stand by losing their Spotify streaming revenue, which is nothing compared to what they already have, it's probably a choice they could make. Now, it's not always gonna be their call. It's gonna be the call of the record labels, right? So like, my understanding is that Warner Brothers essentially had to go along with Neil Young when he made this decision. So it won't just be as simple as, you know, Taylor deciding she doesn't want to be on the platform, although Taylor has been rerecording all of her own music. You know, this would give her the flexibility to do that. So, look, artists, you know, throughout all of history have made political stands. And to the extent that Spotify's podcasters want to take political stands and to, you know, spread nonsense.

• 1:06:04Speaker 06

  I think it's just only natural that we're going to see an ever increasing number of conflicts between those two sides.

• 1:06:10Nilay Patel?

  So the really, the fascinating thing about can some artists leave? If you're Warner Brothers and you've got Neil Young, who is not releasing a ton of new music and is like a catalog artist. And you're always also in negotiations about rates with Spotify and Apple Music and Tidal. This is great for you, right? He's going to quit Spotify. Some people will switch to Tidal. Like Jack Dorsey is like tweeting, like you should join Tidal. Because he bought it for some reason. It's amazing. Some people are going to switch to Apple Music. Neil Young gets to say, Apple Music and Tidal have high quality audio, which is all he cares about. So, right? So maybe, maybe you'll cause some rebalancing on streaming.

• 1:06:55Nilay Patel?

  But you're also going to cause a bunch of sales of like Neil Young vinyl or CDs or whatever. Everyone keeps trying to claim that CDs are coming back and I, I just promise you it's, it's not true, but. It's tapes. It's a meme out there. If you're in the hi-fi world, people want CDs to come back. But that's, that's great for Warner. And then everyone's paying attention to like to boost his physical sales where he makes way more money than streaming. And then to potentially cause a wedge between Spotify and Apple Music that has never existed before. If I was Warner, I'd be like, who else can we get to quit this platform? Let's like do one a week for like six months.

• 1:07:35Speaker 06

  Yeah, I, I mean, I, I'm not confident enough in my knowledge of the music industry to know how that plays out. But is that what, does that outcome sound at least somewhat plausible to me? Like, yeah, sort of. Like I do think if you're like an up and coming pop star and you want to get way more famous than you are today. And you're going to cut off Spotify as an access point. I think that really does hurt. You right? Because I think that Spotify has a huge imprint on the millennials and the Gen Z kids. And it's gonna be hard to really dominate the charts if they just cannot find your music there. You know, even amid all of the unhappiness over their streaming rates, you know, the only two really long term holdouts among the pop stars were Taylor Swift and Beyonce.

• 1:08:20Speaker 06

  And they got on board eventually, right? Like, they essentially had really long windows. But they all said yes. So that just sort of tells me that overall, the dynamics for these artists are such that they want to be on Spotify, even if Joe Rogan is there too.

• 1:08:35Nilay Patel?

  I think it's more true of established artists than new ones. I think new artists are getting discovered on TikTok. And I actually, that's a dynamic here.

• 1:08:42Speaker 06

  They're getting discovered on TikTok, but like, I can't like, you know, go for a run to their music on TikTok, right?

• 1:08:51Nilay Patel?

  Well, because all the TikTok songs are only two and a half minutes long.

• 1:08:55Nilay Patel?

  It's like a real, a real pressure on the music.

• 1:08:58Speaker 06

  How, how long do you think I want to run, you lie?

• 1:09:03Nilay Patel?

  Look, that's just all conspiracy theory for me. I, I pay a lot of attention to that dynamic because I think whatever happens to music industry tends to happen to the rest of the tech industry in short order. Like, it is always upheaval. It's always drama. And because artists cycle so fast, there's always a new cast of like unhappy characters taking stands. Like, the music industry just moves faster than every other industry and tech is always at the center of it. But back to the moderation front. Spotify released this statement that I have just been puzzling over for a day now. They said, "We have clear policies in place and we've removed 20,000 podcast episodes since the beginning of the pandemic for COVID misinformation." That's nuts to me.

• 1:09:48Nilay Patel?

  Like, how? Who pressed delete 20,000 times? Is it, is it a room full of monkeys with typewriters? Do you, is it like Facebook? Is it Accenture contractors? They said, "Our, our in-house team sometimes goes to outside experts." Who are the outside experts? Podcasts are long. Like, do you have to listen to the whole? Do they have to, like, if this gets reported to Spotify, do they have to listen to the full hour and a half of, like, Intel chip fab subsidy news before they get to this part? It just seems like the most challenging moderation problem.

• 1:10:22Speaker 06

  It's a hugely, hugely challenging moderation problem. And I would note, too, that Spotify, the way that they're disclosing it, it's a very sort of outdated way of doing it. Like, if you look at what the big platforms are doing, I mean, I mean, specifically YouTube, Twitter, Facebook, they're reporting what they call prevalence, which is essentially of the bad stuff that was on the platform, like, how likely were people to actually see it? You actually can't figure that out if you know that Spotify removed 20,000 episodes, right? Like, what you actually want to know is, well, how many people listen to those episodes, right? It might, that number might not be much higher than 20,000, because I'm

• 1:11:04Speaker 06

  assuming that a lot of these, these things that were removed may have been created on Anchor, which is Spotify's user-generated content platform, right? Like, I would be surprised if Spotify had removed a lot of episodes of the content that it itself is producing. So there's just so many question marks here, and Spotify has to share more to build trust.

• 1:11:23Alex Cranz?

  How do they know what to remove? Like, are there people having to listen to everything? Is there a warehouse somewhere where people are being forced to listen to these horrible podcasts?

• 1:11:33Speaker 06

  You can flag stuff on Spotify. Like, you can report stuff. And my guess is, they just have a queue of reports that is handled by a mix of in-house people and external contractors, and they're reviewing that queue. My guess is they're not doing a lot of proactive moderation. They might be doing some keyword searching. You know, my guess is if you go to upload a podcast to Spotify, and the title is just a bunch of, like, slurs, like, that probably won't go through, right? So, like, my guess is that they've built, like, some of these, sort of more rudimentary systems. But, you know, again, it's like, it doesn't matter what, it doesn't matter what the process is, or what your systems are, if, when your most famous employee says, "Do you really need to get vaccinated?"

• 1:12:18Nilay Patel?

  They're gonna come into your house, man. He's not an employee. They're very, there's big sticklers about this. I think right now because of his exclusive, people think he's an employee.

• 1:12:28Alex Cranz?

  Yeah.

• 1:12:28Nilay Patel?

  The way that, you know, the Gimlet staff is employees or whatever else.

• 1:12:32Speaker 06

  Well, so let's drill down on this, right? You know, podcast episodes in a world before giants were distributing them on exclusive deals, they were delivered via RSS feeds. And I personally am comfortable with really bad stuff being distributed over RSS feeds. If you're a bad person and you want to listen to terrible things and you want to search for those things and listen to them on your own time, I'm basically fine with that because that's the price for me living in a free society, right? I think where it changes is a big corporation comes in and says, we're going to give this our stamp of approval. We're going to pay a huge sum of money for it and then we're going to promote it across various surfaces of our app.

• 1:13:12Speaker 06

  Now, I know how aggressively Spotify promotes podcasts to me, but it's also personalized. So I have no idea how aggressively it's showing Joe Rogan to people. I can tell you it's not showing Joe Rogan to me. It sees what I listen to and I think it just knows. But I think it's important to highlight some of those differences because I think some people will listen to this and it'll just be, oh, well, here goes the left again with cancel culture and they're afraid of ideas that they are mad at, like whatever. And it's like, no, we're talking about at what level do we want companies to intervene and be moderators? And I'm saying it's at the level where you have decided to pay someone a huge sum of money and actively promote them because then it's actually not just about what Joe Rogan believes, it's about what Spotify is actively supporting.

• 1:13:56Speaker 06

  And that's what I think we're really talking about here.

• 1:13:59Alex Cranz?

  I was gonna say, there's a lot of precedent in the entertainment industry for these companies being the moderators. Oftentimes, like, you know, Disney is an example of one who's a moderator in a bad way. And then, you know, a lot of TV companies are putting these people on their, on the airways and then like, oh, wait a minute, actually scale back. And they just cancel them, like literally cancel them because it's not, it doesn't jive with what they want to do on their, their network. So like, there's a ton of precedence to just be like, actually, no, this isn't working out. You've gone too far. We pay you so much money to be here exclusively. And if you look at like the TV model, there's so much precedence and it really highlights

• 1:14:42Alex Cranz?

  the cowardice, I think, of Spotify in this situation.

• 1:14:47Speaker 06

  Yeah, I think you're exactly right. These are decisions that we ask entertainment companies to make all the time. I mean, like, God help any, you know, movie star who accidentally says that Taiwan is an independent country, right? Like, you're gonna be apologizing for the rest of your life. You know, I think the vaccines are a much more consequential issue. So, you know, I mean, but look, you know, I mean, like, we have seen this story so many times before where a platform wants it both ways, right? They want to say, we're just a clearinghouse for content. Come and get what you want, right? We're not gonna put our thumb on the scale, or if we do, it's only gonna be based on what we think that you will like, and we want all of the riches that will come with with building

• 1:15:29Speaker 06

  that platform. But then, we also want to inhabit the role of a traditional publisher, and we want to go and support the kinds of content that we think, you know, are the most engaging. And when they inhabit that second role, they never want to take the responsibility that other people who are in that role, you know, in the media business, for example, sort of already play. So, you know, like, for all that I'm like, running my mouth, I'm very confident Spotify will figure this out eventually. Like, I think these, this is just like, kind of a growing pains thing. You know, when Spotify bought Joe Rogan, I had a long conversation with with Nick Quah, who was then running Hot Pod for New York Magazine, and just kind of like, predicted that these dynamics were

• 1:16:11Speaker 06

  gonna happen. I didn't predict Neil Young, but it's like, conflict is coming, and like, and conflict will be resolved when you start to answer some of the questions that we're bringing up on on this podcast. So, you know, I wish Spotify had addressed some of this stuff a little sooner, and I wish that they would give us better answers than they're giving us today. But in my experience, most platforms do get there eventually.

• 1:16:35Nilay Patel?

  We'll see. I think Spotify has, if you assume, and I think it's a fair assumption, that the 20,000 episodes that's deleted are mostly user-generated content uploaded through Anchor, and they're not policing individual RSS feeds that get ingested into Spotify, which is Frankly, how we ingest our show into Spotify. Like, I don't know if Daniel Ek is sitting around with his thumb on the big red button, waiting to delete this Vergecast. If he is, that would be a hell of a story. So, Daniel, like, I mean, that'd be great. But to do anything like that at scale, they have to build a huge team to do it. Eventually, those people are gonna, they're gonna have to put up job listings. Like, you can't even find the job listings, right? Like, they've got to, like, hire the people

• 1:17:17Nilay Patel?

  and do the work and become a moderation company. And like, Facebook is a great example. Like, they're a moderation company to the point now where they fund a court system. And they're like, this is the only way to do this fairly, is an independent judiciary that we have created. And it's like, well, this is nuts, but it might also just be the end of the road for everyone. And they all have to publish their rules. Like, it's really unfair to participate in a platform that will moderate you and delete your shit if you don't even know the rules that platform expects you to follow.

• 1:17:48Speaker 06

  You know, it's true. And like, and I agree with that. But to be a little bit glib, how many podcasts does Spotify own? Is it 10? Is it 20? Is it 30? We're talking about something that fits on like, two pages of a Google Doc is basically like, the number of shows that I think that Spotify is producing. That's actually an extremely manageable content moderation, right? That's basically asking, how does Vox Media moderate what Vox Media produces? Like, that is the, that is the scale of the challenge that Spotify actually has. And they effed it up, man.

• 1:18:22Alex Cranz?

  Well, it's a, it's a lot like Netflix. And I think it's Netflix with the whole thing with Dave Chappelle, the same, same situation of like, oh, no, we can't moderate. And it's like, no, you're not Facebook. You're, you're an entertainment company. You have commissioned this person to make this product. You can absolutely say, apps actually, like, if I go and write a blog, 4,000 words on why I love E Ink, Neel has every right to be like, actually, Alex, no, we're not gonna publish that on The Verge.

• 1:18:51Nilay Patel?

  8,000 words.

• 1:18:52Alex Cranz?

  8,000. Shit.

• 1:18:53Nilay Patel?

  Let's get to 12.

• 1:18:56Alex Cranz?

  But like, you ha- they have that right and they keep acting like, oh, no, no, you know, it's just like Facebook. No, you're not Facebook. Yes, you're a technology company, but you're not Facebook. I mean, Facebook, that's another whole other story of like, their whole publishing thing, but you are very fundamentally an entertainment company and you have every, you're entirely within your right, presumably contractually to, to stop this. And instead, they're like, oh, who can, who can do it? Who knows? You can.

• 1:19:23Speaker 06

  Yeah. And like, you know, here, here we are getting into a debate over free speech, which, which can get really tedious and it's impossible and it's obviously, you know, very unsatisfying. Um, I'm, I, I am surprised as a journalist who grew up very much in that free speech tradition, at how far we are moving away to like, actually like, we do want to get rid of a lot of speech. We're seeing it from the right right now, all across these elementary school districts that like, want to ban, you know, wonderful literature about like, the Holocaust and like slavery and everything. And so I feel like I, I do want to stand up for platforms

• 1:20:03Speaker 06

  that want to welcome a wide variety of views, including views that I find upsetting, you know, that, that sort of thing. But at the same time, I do think there are just sort of a handful of issues where I am going to judge you for what you promote. And public health and safety is, is just at the top of that list for me.

• 1:20:22Nilay Patel?

  You just said platforms that publish things, even if you don't support them or they make you uncomfortable. You're on Substack, that's an obvious reference to Substack, which published a little moderation manifesto this week. I don't know if they knew Neil Young was going to get in a fight with Spotify, but certainly these things lined up perfectly for you to write a sparkling issue of your newsletter. Substack is like, look, all no holds barred. Like, we, we're not going to let you do hate speech. Apart from that, like, we think the answer is, you know that everything on this platform is a direct relationship between you and the writer. We trust writers, we trust our audiences. Have at it. That, that's fine. Yeah, Substack like takes a cut. I think there's a little bit of, at the end of the day, like, what if the, what if the most highly paid writer on Substack is like, I don't know,

• 1:21:05Nilay Patel?

  thinks your IQ is determined by your race, for example. That is true right now. Like, there's, there's a lot of uncomfortability there, but I get it from that perspective. I think on the other perspective, it's like, there's just not a lot of competition for these platforms. I think that the heart of like the Substack thing is, well, if you don't like, you could just not pay them. And you can pay another Substacker. And like, that feels competitive in a way that the internet is very good at making you feel competitive. If you want to leave Spotify, you can go to Apple Music, which probably has the exact same set of restrictions. Maybe even more knowing Apple, right? And then you get into, do they want to censor the music industry, which we already talked about a little bit? Which is the most problematic.

• 1:21:50Nilay Patel?

  And like, I grew up in the 90s with Tipper Gore putting parental advisory labels on CDs at the Sam Goody, which I thought was ridiculous when I was younger, and I still think is ridiculous. Like, yeah, I'm with you. I think it's a very odd time for speech in America, but here, it's like, they're just paying the money. And that, that changes the dynamic in a real way.

• 1:22:09Alex Cranz?

  I think it's different conversations about speech, like, I'm with you on Tipper Gore and, and obviously like, saying, oh, you need to go shut this down is a slippery slope because then you have Disney being like, whoa, gay people? No, no, they don't appear in Marvel films until we feel they're marketable in China, like.

• 1:22:26Nilay Patel?

  Until several years later, when we say that that person, that one, there's a guy in the background.

• 1:22:30Alex Cranz?

  When the director plays an unnamed crying man. Like, it's, you know, I, I think that, that's obviously like, I feel a little bad for just being like, yeah, shut them down, Spotify. But at the same time, like, I get really annoyed with their, their aggressive, we don't know what to do, there's no precedent here. When they absolutely is a lot of precedence on, on both from the technology side and from the entertainment side for solutions. And it's always going to be tricky because we don't want to be, you know, we don't want to be TikTok saying lesbians don't exist in the hashtags and then saying, oops, we, we turned on the wrong switch again, and which happens consistently.

• 1:23:12Alex Cranz?

  But we also don't want them seeing a lot of other really bad hashtags and like. They just need to stop washing their hands of the situation. They need to take a stand one way or the other. And right now, they're, they're taking Joe Rogan's side, but also in like, the lamest way possible.

• 1:23:31Speaker 06

  Yeah, I, I think there's like, I, most of this is like, impression based, because like, Spotify really has not wanted to talk to me about any of this stuff. But I feel like for the past couple of years, their stance, whenever there's been a controversy, has sort of been like, give it a day, it will pass, like, this will blow over, you know, every once in a while, Joe's gonna say something a little cuckoo, but, uh, we will weather the storm, and we can just sort of proceed business as usual. And the reason I think the Neil Young thing was a big deal, was I think this shows that there, like, the pressure is going to escalate, right? Like, it's not gonna be a little bump, little bump, but like, everything is basically chill. Like, it's gonna be escalating pressure on

• 1:24:16Speaker 06

  them to not necessarily dump Rogan, but to publish some publishing standards, right? And enforce them. You know, I, it's, you know, Neil, I brought up Substack earlier, and I think what Spotify actually believes is spiritually way closer to what Substack posted yesterday than what Spotify has said so far. Because what Substack said was like, "We don't want to police misinformation because we don't think it works." Like, we don't think it's helpful to crack down on misinformation. Misinformation is gonna be out there, whatever. Um, I do think that Substack sort of went overboard trying to wash their hands of that subject. But I think it's reasonable for a platform to say in some cases, "We're just not gonna bother to try to go after this stuff," based on

• 1:25:00Speaker 06

  the kind of tech platform we are, and based on the way that people get content from us, right? Like, Substack is a tool that writers pay to use, right? More often than it is the opposite. So like, Substack is a service provider, and generally, it's like, we don't pressure payment processors or domain hosts too much when it comes to questions of content moderation. Because again, most of us feel like, well, the price of living in a free society is a bunch of people make money in horrible ways and post stupid stuff on the internet.

• 1:25:30Nilay Patel?

  All right, here's my bold prediction for, for all of this. And I said this at Case last night. Next to all of this is Pat McAfee, that, who I listen to, especially because Aaron Rodgers was on his show every Tuesday, who just signed like a $140 million sponsorship deal with FanDuel, which is- Gambling company and he his stuff's on RSS. He just streams it on YouTube. He got his bag from a sponsorship. I could see Joe Rogan being like, because he Joe Rogan could definitely get that bag from a gambling company. I could see him be like, this is dumb. I hate Spotify. Ashley Carmen at The Verge has reported that guests get a smaller bump from appearing on my show after I went exclusive than before. My relevance is declining. I'm gonna just like,

• 1:26:14Nilay Patel?

  pay out my deal and I don't know, Jamie Foxx is doing MGM ads with the fire. MGM, do you got some money for me? And he bails. And he reclaimed, right? That's a that's a winning move for him. So that's my prediction is that he takes a bag from one of the gambling companies and just goes independent again.

• 1:26:33Speaker 06

  And I I think that might be a good outcome, right? Like, again, if people want to listen to Joe Rogan, like, listen to Joe Rogan, right? I come at this from the perspective of a paying Spotify customer and somebody who worries about what the largest platforms promote to audiences of hundreds of millions of people. And I feel like things are a little bit easier for me if Spotify is not promoting anti-vax content in its app. But if Joe wants to like, go run his RSS feed from his ranch in Texas and take like gambling money to do it, I have no issue with that.

• 1:27:08Nilay Patel?

  That's it. Gambling, sports gambling and crypto gambling will solve every problem in America all at once. We have gone way over. Casey, thank you for coming on. I do have to note that while we have been talking, Apple earnings came out. Apple made all of the money in the world. Biggest quarter ever in its history, largest revenue and profit.

• 1:27:27Speaker 06

  I thought this was the one when it was gonna break and they were gonna have to go dip into their savings just to make it through the next quarter.

• 1:27:35Nilay Patel?

  Anyway, 34.6 billion in profits, up 20% from last year. The iPhone was the big growth engine as always, and then the Macs are doing great. So that's Apple earnings. It literally, while we are talking about this, crossed the wire. And then Tim Cook is talking. He's very proud of his company. In case you were wondering if Tim Cook was proud of Apple.

• 1:27:56Speaker 06

  I mean, we have to say, Apple, famously successful company. There's if you're running that company, you're having a good day.

• 1:28:04Nilay Patel?

  It's always a party over there in the spaceship. Uh, okay. We have gone way over. Uh, thank you for listening. You can tweet at us. Casey is Casey Newton. Alex is Alex H. Krantz. Tom is at Tom Warren. I'm at Reckless. Uh, I want to call out a couple of stories. Becca put out a full frame video, which is amazing about how to take better night photos and astro photos, uh, with the Pixel, the iPhone, or any camera. It is just the funnest video. I highly recommend it. Uh, we have a big feature about Susie Thunder, who's like a forgotten hacker figure from the seventies. That's great. And then McKenna actually interviewed Amy Klobuchar about the antitrust bills. Great interview. Really great photos too, actually. Uh, check that out. It's on the

• 1:28:44Nilay Patel?

  site. Decoder next week. CEO of Career Karma, Ruben Harris, who is super fun to talk to. Uh, so let's come up on Tuesday. That's it. Rock and roll.

• 1:29:14Speaker 07

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