Apple announces M2 MacBook Pros, a Mac Mini, and a new HomePod

Today on the flagship podcast of automated content creation: 02:23 - The Verge's Nilay Patel, Alex Cranz, Richard Lawler, and Alex Heath start the show with an overview of what we've learned from Elon Musk running Twitter over the past few months. 24:50 - Inside CNET’s AI-powered SEO money machine 48:34 - Apple's Mac and HomePod announcements from this week Further reading: Inside Elon Musk’s “extremely hardcore” Twitter Twitter Blue arrives on Android for $11 a month Inside CNET’s AI-powered SEO money machine Apple announces MacBook Pros with M2 Pro and M2 Max chips Apple announces a Mac Mini with the M2 and M2 Pro How the new MacBook Pros compare to the rest of Apple's MacBook lineup Apple is reportedly working on an iPad-like smart display Apple announces revamped full-size HomePod two years after discontinuing original Apple’s new HomePod unsurprisingly sounds close to the original Apple reportedly shelved its plans to release AR glasses any time soon Reed Hastings is stepping down as Netflix’s co-CEO Microsoft announces big layoffs that will affect 10,000 employees Email us at [email protected] or call the hotline at 866-VERGE11, we'd love to hear from you. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:00Speaker 00

  Today on The Vergecast, oh boy, where to begin? Reed Hastings, CEO of Netflix, is out. Microsoft might be doing layoffs. Elon Musk is still bad at business. There's new MacBook Pros and a HomePod big in. And CNET's using AI to write their articles. All this, so much more, coming up right after this.

• 0:16Speaker 01

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

• 1:01Speaker 01

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

• 1:57Nilay Patel?

  Hello and welcome to Vergecast, flagship podcast of automated content creation. Can someone make a ChatGPT episode of the Vergecast for us? It would be great. I could use a break. I was on the show last week, but I could use a longer break. You know what I'm saying? That'd be good. I'm your friend Eli. Alex Krantz is here. I'm your friend who wrote this intro from ChatGPT. You didn't know it. It's good. I can't wait to talk about the chat. I can't. I'm like bursting to get to the ChatGPT section of today's episode. Richard Lawler is here.

• 2:26Speaker 03

  And I have not resigned as co-CEO.

• 2:30Nilay Patel?

  A lot of things, you don't know this because you're in your car. You're just like driving along. It's a normal day for you. We are recording later than usual because right when we sat down to record, a flurry of news took place, including Reed Hastings, the co-CEO of Netflix, just dipping. Just screw it. I'm out. So we're a little bit later. Richard, who runs our news team, a little bit of a scramble. If you hear the frenzy in his voice, that's where that came from. We'll get to all of that. But first, Alex Heath is here. Hey, Alex.

• 2:57Speaker 04

  Hey, guys. Good to be here. It's been a minute.

• 2:59Nilay Patel?

  It's been a minute. You have accomplished a lot in that minute. You launched a new paid newsletter called Command Line, full of dish and gossip, industry goings on. I recommend people go subscribe to it immediately.

• 3:10Speaker 04

  Yes, please.

• 3:12Nilay Patel?

  Every couple of days, I get a note from Alex being like, guess who signed up? And I wish I could reveal that information to you.

• 3:18Nilay Patel?

  But I'm just telling you, if you sign up for Command Line, you will be in some pretty good company, I would say.

• 3:24Speaker 04

  Yeah, we can't disclose, you know, GDPR and all that, but just take our word for it.

• 3:29Nilay Patel?

  The European police are outside of Alex's house right now, actually.

• 3:32Speaker 04

  Finally.

• 3:32Nilay Patel?

  Being very European, they're just smoking and grumbling at the ground. They have no authority here. But Alex, you're here because this week, we published a gigantic feature story in collaboration with our sister publication, New York Magazine, and our friends at Platformer, Casey Newton and Zoe Schiffer, about the first 90 days of Twitter under Elon Musk. Just that list of collaborators, you can tell, this is a big story. And then obviously, a lot has happened in 90 days of Elon Musk. Tell us about that story.

• 4:00Speaker 04

  Yeah, this was a fun one. Zoe Schiffer and Casey and I have obviously been reporting on this saga, the many twists and turns of it from the beginning, since Musk walked in with the kitchen sink. And, you know, if you're listening to this, you probably have been following it as well, a lot of the details. We hoped that with this story, we could put together not only all the just, you know, bit by bit crazy moments that unfolded after Musk came in, but also kind of just show thematically what it was like working there during this time, because a lot of the coverage has been centered on Musk and on Twitter as a business and the Apple stuff, which I came on and talked about last time.

• 4:42Speaker 04

  But, you know, with this, we really wanted to focus on the thousands of Twitter employees who lost their jobs as a result of Musk's acquisition. Interviewed several of them, some on the record, some not, to really try to show like, this is what it was like working in this place. And it's, it's crazy. I mean, it's, it's, you can't really, you couldn't write it as a screenplay as ridiculous as it is in real life. And yeah, we hope that it kind of accurately portrays what life has been like inside Twitter. And I, I think we did that. But yeah, it was really fun working with Casey and Zoe. Obviously, they're, they're crushing it on this beat at Platformer and we're all continuing to cover it.

• 5:23Speaker 04

  But yeah, get a, get a copy of Extremely Hardcore wherever magazines are sold near you, I guess. I guess you can also read it online, since people do that. But I actually haven't seen a print copy of it yet, but they exist. I'm told, I'm told magazines are a thing.

• 5:41Nilay Patel?

  Yeah, it's a real, as somebody who has exclusively run a digital publication for over a decade, every, this is our third collaboration with New York Magazine. And obviously, they run a great website too, but they make a print magazine and they have for over 50 years. And so sometimes like whenever we collaborate with them, like, oh, this is a. This is different.

• 6:00Speaker 04

  It's different.

• 6:02Nilay Patel?

  Very different.

• 6:03Speaker 04

  And I'm obviously like kidding about like people don't read. I actually do. New York Mag is low key like a great magazine and and.

• 6:10Nilay Patel?

  Yeah, I don't even low key. They're just a great magazine.

• 6:13Speaker 04

  But like, you know, it's you. You gotta be subtle with like your magazine flexes. You know, you don't want to be too over the top. But yeah, I I highly recommend reading it in print. I haven't gotten to yet, but they did an amazing job and our team did an amazing job on the site too with the wealth meter, which I think was your idea and Eli to kind of.

• 6:32Nilay Patel?

  My only true contribution to the story. So I mean, I'll actually let's talk about that for a minute. So I'm not the wealth meter. It's just very funny.

• 6:40Speaker 04

  That's the rest of the episode, actually.

• 6:42Nilay Patel?

  It's just me taking credit for the gimmick that I put in the story.

• 6:44Speaker 04

  Shout out Graham. Shout out Graham.

• 6:46Nilay Patel?

  Yeah, our engineer Graham built that for me at like the last minute, but the where that came from and really the the story is we were like, we should do a big feature about Elon and Twitter. And then it's like, what? What is the thesis statement of that story? What is the end of that story? Like a great story? It's a kindergarten level writing assignment has a beginning, a middle and an end. We barely have a middle of this story, right? There's this really chaotic beginning period. We think it feels Alex. I mean, this is my question to you really is have we reached a steady state of Twitter? Under Elon? I don't know the answer to that question. We certainly do not have an end, right? It is not a success or a failure.

• 7:30Nilay Patel?

  My instincts tell me it's going in one direction and not the other, but we don't know. So like, how do you even write this story? And so we picked linear time, like here's 90 days. Let's see what happens.

• 7:39Speaker 04

  And we have reached an end, which was Twitter as it was pre Musk, right? So all the employees who are not either basically you fall into the camp of you're there for visa, healthcare, work stability reasons, or you're.

• 7:54Speaker 04

  A kind of a mercenary, you're trying to rise up through the power vacuum. Anyone who doesn't kind of fall into those camps has left by now. So the company's a shell of what it once was, both in terms of scale, size of people, but also the DNA of, of the people who made the company over the last, you know, decade plus. And so, yeah, I think that was the bow on the story was just kind of like, he's flushed everyone out and now they're all suing him. And I think the current, the current stand is there's over 800 individual ex-employees filing an arbitration cases against Twitter right now, which Twitter has to pay those legal fees, which are, can be in the tens of thousands per arbitration.

• 8:37Nilay Patel?

  Yeah. Yeah. So this, this is like a fascinating, I don't know, C plot of the Twitter story is this arbitration thing.

• 8:45Speaker 04

  Yeah. Musk, no stranger to employment disputes, is now finding himself with even more.

• 8:51Nilay Patel?

  Yeah.

• 8:52Speaker 04

  And.

• 8:52Nilay Patel?

  Well, he's, this is like the cutting edge of employment disputes. So the backstory of the arbitration thing is all these companies wrote arbitration, mandatory arbitration clauses into their employment contracts. That went up to the Supreme Court and Supreme Court said, that's fine. And so then the strategy is because of what you're saying, because the companies agree to take on those costs, because the calculation in their minds was, we'll go to arbitration, which is friendlier to the corporation, we'll agree to pay the costs and we'll come out ahead. And so what employment lawyers, like plaintiff employment lawyers have discovered is, oh, we can just find a thousand people who are mad at you and file 1,000 individual

• 9:34Nilay Patel?

  arbitration cases that you have to pay for and that you cannot collect and do a class action or join the cases like you would in a normal court. Now you just have 1,000 cases to pay for, all individually. And that's like.

• 9:49Speaker 03

  When they wrote those policies, they didn't realize that they would be laying off thousands of people at once who were all going to be extremely pissed.

• 9:56Nilay Patel?

  I just think they thought everyone else is like, there's like a level of a giant corporation. It's like, you think everyone's stupid, you know, and that you're smarter than them. And you realize like, oh crap, like this is an unexpected consequence of this thing. And it is very much the cutting edge of employment law. This is a new development that passed like two years, maybe not even. And so Musk is like, at the cutting edge of this style of employment dispute. He's invented a lot of things. The rockets land themselves. I'm not sure that he wants to spend his time inventing an outcome to mass simultaneous arbitration. Yeah. Which is like, there are rich people, there are smart people who are very engaged in inventing it. The end to this, because it's the cutting edge. I don't think that's where Elon wants to be.

• 10:37Speaker 04

  No, uh, he doesn't, I don't know where he definitely doesn't want to be anywhere near San Francisco. As I'm sure you may talk about later, he tried unsuccessfully to get another lawsuit over his Tesla tweeting. Moved out of San Francisco due to apparent, you know, bias. His lawyer argued there in San Francisco, they couldn't find jurors was the argument that didn't, you know, that would have a neutral view of Musk. Yeah. Which, you know, I don't, we could, we need to get into a tangent, but I thought it was, there was a tweet thread of his lawyer arguing in court the other day that the reason the 420 tweet should not be, you know, considered as, you know, something that he has to worry about is that he's a reckless tweeter. And like, this is his personal lawyer being like, this is our legal defense. He is a reckless tweeter, uh, the CEO of Twitter.

• 11:22Speaker 04

  Let's see how that works for him. But yeah, no, I think the current, the current state, so now that we've moved from, you know, the really chaotic him taking over phase to now trying to figure out how to land the plane. I think he drew analogy to like, this is a plane flying into the ground, uh, at, at top speed. Financially is Twitter blue is a dud. I just saw some analysis that, uh, he hasn't even managed to double the subscription count from before he took the company. So there's less than 300,000 Twitter blue subscribers.

• 11:54Nilay Patel?

  You know what he has doubled? He's doubled the number of people who show up in my mentions. Whenever I tweet after having said I'm, I have to break my previous relationship with Twitter. That's like, you're back. And all of those people pay for Twitter Blue.

• 12:07Speaker 04

  Yeah, that's true. There's a nice overlap of like you have 12 followers and some kind of weird like Joe Byron thing in your bio and you're a Twitter Blue subscriber.

• 12:18Nilay Patel?

  If you're one of those like sunglass truck guys, he's got you.

• 12:22Speaker 04

  But yeah, so that's a dud. The company's revenue was down 40% year over year as of this month. So losing hundreds of millions of dollars since he took over and they're auctioning off all the furniture. So that's the current state of Twitter. That's a bad place.

• 12:38Nilay Patel?

  Yes, that's where our story ends.

• 12:40Speaker 04

  Yeah. Did we put, did TC put a bid in on the bird logo?

• 12:44Nilay Patel?

  TC's really thought about spending $18,000 on the bird logo. I'm not sure if he, I mean, he obviously thought about it enough that he did not spend $18,000 on the bird logo. But he, he thought about it more than anyone should. Like I thought about spending $18,000 on the bird logo and the way that you always think about buying anything. Like, oh, that'd be great. And they're like, wait, this is David. TC kept going for a little bit longer than you would expect.

• 13:09Speaker 04

  $18,000, that's going to be the price of a used Tesla in a few months.

• 13:11Nilay Patel?

  Well, that was the open, that was the opening bit. I'm not even sure where it's at now.

• 13:14Speaker 04

  Yeah. Well, um, you know, they need all the money they can get and that's the current state. But yeah, I guess just to like bring it full circle with the piece, like, I think we accurately captured the frank cruelty of how Musk treated the employees there, which like, you can say what you want about Musk as a innovator, as a technologist, his track record does speak for itself there. He treated these people horribly. And, you know, it's not that, we also talk about how in the piece, like Twitter was not run well. People there knew that it needed a reset. It needed a kick in the pants. But I don't think anyone was necessarily expecting just the cruelty of how like the first month unfolded.

• 13:55Nilay Patel?

  Yeah.

• 13:56Speaker 04

  And now the chickens are, are roosting and like, you know, there's 800 arbitration cases. So.

• 14:02Nilay Patel?

  I feel like we have to issue this disclaimer that we do every time we talk about Twitter. Criticizing the Elon Musk regime of Twitter is in no way condoning or saying the previous regime did anything good at any time. Yeah, it was bad, then it was really bad. And now it's still pretty bad. And it's that middle period. It's the transition. This hasn't really happened to any company ever. Where in the middle of the Halloween party, an acquisition closes and the executives get marched out the door. Which is an incredible scene in this.

• 14:31Speaker 04

  Well, to make things even better is that this is how crazy things were that week. Like, there was a scarecrow walking around with a handler at the party and everyone thought it was Musk at first. Because of the handler and the way it was gonna be the emcee for the evening. And they're like, the scarecrow is gonna remove its mask. And it's gonna be Musk after he just escorted RGC out of the building. But yeah, it was, it was an insane time and I don't think it's gonna get less insane. I think it'll probably just get weirder with Twitter. But yeah, you know, Elon's still tweeting through it while we all watch. So, fun story.

• 15:08Nilay Patel?

  So here's the thing that I've been thinking about, the question I've been wanting to ask you. But we needed to wrap this story up, so I don't want to distract you. It feels like the, you know, the window, the chaos is over. Like, the window of the chaos story, everyone gets it. All the people are gone. The people who are left are either people. I think the three of you wrote about it in the story is people who see chaos as a ladder. They see the power vacuum. They see the opportunity to move up. They want to be close to Elon. Or it's people who are stuck there on visas or need health insurance, right? So you've got this weird two classes of people. But the kind of chaos is over, the everyday machinations of chaos have at least simmered down a little bit. Now it's like, what is next? Like, if Twitter Blue isn't working and the advertisers aren't coming back and the revenue is down.

• 15:53Nilay Patel?

  And, you know, the loans are coming due against the Tesla stock and Tesla stock is down. The next turn seems actually way more devastating.

• 16:01Speaker 04

  Yeah, I mean, there is a real, I mean, he's been, he's used, it's hard to separate when Musk is just kind of using a shtick versus what, when he actually means what he's saying. He said before at his other companies that they're on the verge of bankruptcy. And it's been more of a way to motivate people to kind of get through a hard time. He's been saying the same thing now inside Twitter, you know, we could go bankrupt. What a management style. Get through this. I don't think that. That actually happens, you know, I don't, even with how, you know, Musk appears to be going off the rails in some ways, like, I don't think he's actually gonna light forty four billion dollars on fire in under a year.

• 16:36Speaker 04

  He's definitely on the way, but there's a lot of people with a lot of stake in Twitter trying to figure this out that I, I just, I think it would be something he couldn't really come back from necessarily.

• 16:47Alex Cranz?

  But I mean, haven't, that's been like, nobody thought he was gonna light the money on fire, but he still did it. Like, when he said, I'm gonna buy it, YOLO, what was it, forty two, twenty? Or whatever, like, that initial price that he did, fifty four, twenty. Like, he still repeatedly has said, no, it's, it's fine, I'm cool. And then absolutely fallen on his face. So I don't think it's outside the realm of possibility that he's gonna fall on his face again with Twitter.

• 17:15Speaker 04

  No, it's not, it's not. And I think with every passing week, that looks more likely, but for now, it's, you know, he, he said the goal is to be break even this year, and I think he can do that. But, I mean, Twitter as a product, I don't know about you all, like, it's, it's getting worse. It's getting uglier to look at, both in terms of what they're recommending and just like the pixels and the way things are organized. So, yeah, I, I don't know. I, I wanna try to like, you know, I want Twitter to live. I don't, you know, it's, we, I think a lot of us who have fond memories of Twitter don't want it to die.

• 17:52Speaker 04

  So, we'll see, but it's not looking, it's not looking hopeful. I also just like haven't succumbed to the, to Mastodon, and I don't really think there's any other clear alternatives. So, I, I don't know. You know, we all came back on Twitter to promote the, the features, the cover story, like.

• 18:11Speaker 04

  Yeah.

• 18:13Nilay Patel?

  So. I should have made like a TikTok, like one of those TikToks of me, like, on green screened over the story.

• 18:19Speaker 04

  Yeah. Yeah, I don't know. I, I think we did, uh, kinda summarize the chapter that has now ended, and now we're in this uncertain period of can he keep it from totally, you know, burning? And.

• 18:32Nilay Patel?

  You know, you, you mentioned Mastodon. So I have not joined Mastodon either. I don't, I haven't had Twitter on my phone for months now. I only use it at work and I just use it to basically retweet people who tweet Decoder. It's a great way to use Twitter. What I miss, the thing that I miss the most is Twitter during NFL games. And I find myself bringing my laptop to the living room so I can just like read sports writers because they're still using it. That's it. Everything else is like, I come to it and I look at it during the work day. I'm like, another scandal that will come to nothing is written on Twitter. This, it just doesn't, I don't care about the royal family. And I close my laptop and I walk away.

• 19:10Alex Cranz?

  That's fair.

• 19:11Nilay Patel?

  I don't. My people have escaped them twice. Right? I'm an Indian American. That's two times.

• 19:16Alex Cranz?

  Fair.

• 19:16Nilay Patel?

  And I'm, I'm out. It's not for me. That's my go to line. Someone's gonna steal it from me and they're gonna make a million dollars in the back of that line. That person's gonna be Mindy Kaling.

• 19:26Nilay Patel?

  All I'll say is like, it feels like my brain is healing because I don't have feed based social media in my life. And I, I, I think I might need it back. Yeah, like.

• 19:35Speaker 04

  Yeah, you're like, I'm twitchy now.

• 19:37Nilay Patel?

  I'm like jonesing.

• 19:39Speaker 04

  I feel too healthy.

• 19:40Nilay Patel?

  Did I tell this to you? When you guys were, I had massive FOMO at CS. And I actually, I got a text from a dear friend. You, so people can obviously guess who it is. And he's like, I'm jonesing for a vape. And I was like, oh, my body just wants nicotine during the first week of January.

• 19:58Nilay Patel?

  That's what I've been doing for a long time. I've been in Vegas. And like, that's how I feel about, like this weird feed based social media that has been at the center of the media ecosystem for a long time. And I, maybe I'll come back to it. Maybe I'll start a Mastodon. Maybe I'll turn the whole Verge into Mastodon. So like, who knows? But it, right at this second, it's like, oh, I should just let my brain heal. And I feel like a lot of the ecosystem is in that moment where it's not like, we have to immediately go to Mastodon. It's like, oh, we can play with this a little bit, but it's actually better for everyone if we walk away from this for a second.

• 20:30Speaker 04

  Neil, you know, the fans, the readers want a Verge Mastodon. They want, they want us in the Fediverse.

• 20:36Nilay Patel?

  If you are a software developer with a vengeance and you want to turn the entire Verge into a Mastodon instance.

• 20:42Speaker 04

  That's going to happen.

• 20:43Nilay Patel?

  I will hear you out.

• 20:45Speaker 04

  No, it's going to just happen this weekend.

• 20:49Nilay Patel?

  I'm not kidding. Masson is really just a micro blogging platform.

• 20:53Speaker 04

  Yeah.

• 20:53Nilay Patel?

  It's not a Twitter clone, right? You can do a lot with it.

• 20:57Speaker 04

  It's like, it's like WordPress, but harder to understand.

• 21:00Nilay Patel?

  Yeah, it's a, it's just a syndicated blogging platform. They just made the UI look more like Twitter than not. So people think it's a replacement, but that means if you were to start a publication like ours from scratch, you could actually start a Mastodon, which is a fascinating thought experiment.

• 21:15Speaker 04

  Well, Medium, Medium did this. They have a Mastodon instance, and you know that means Mastodon is here to stay.

• 21:24Nilay Patel?

  Soon they will begin paying some writers pennies to publish our Medium, and then they will take that money away.

• 21:30Speaker 04

  We're gonna clap for our toots. Well, I, I should probably go and finish command line, but I, I just wanna plug it shamelessly like you did at the top and say, especially you guys are gonna talk about ChatGPT later. So by the time this comes out, I'll have an interview with the CEO of Notion. They're doing a really interesting implementation of ChatGPT. They have unique visibility into the space. I think people will find that interesting. Already have done interviews with Jack Dorsey, COO of Shopify, CTO of Meta, have had some scoops, some people moves. Yeah, check it out. It's, it's an experiment. I'm having fun. verge.com/commandline.

• 22:10Nilay Patel?

  Yeah.

• 22:10Speaker 04

  Yeah.

• 22:11Nilay Patel?

  It is very fun. I encourage people to go read it. And honestly, if you wanna be ahead of the curve, that's the place to be. I'm trying to sell here. First, I'm selling my idea that we should turn the entire verge into Mastodon server. And now that I've opened the Overton window, I'm like, you should subscribe to your newsletter. You see? It's a tactic, escalating levels of commitment. All right, Alex, it's great to talk to you, man. We'll talk to you soon.

• 22:33Speaker 04

  Thanks, guys.

• 22:34Nilay Patel?

  Thanks to Alex. We're gonna take a quick break. We'll be right back. We have a lot to talk about today. We'll be right back.

• 22:44Speaker 06

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• 23:12Speaker 07

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• 23:45Nilay Patel?

  All right, we're back. There's a lot to talk about. There's obviously new Apple news. There's new MacBook Pros with M2 chips. There's a new HomePod. I'm making the most sarcastic of air quotes possible, but there's a new HomePod.

• 23:59Alex Cranz?

  I could hear him.

• 24:01Nilay Patel?

  There's Microsoft layoffs and this thing about their hardware portfolio.

• 24:06Nilay Patel?

  Netflix just got a new CEO. There's like a lot going on and all this stuff happened like in the minutes before we were set to start recording. But I, can we talk about CNET and AI and ChatGPT and what's going on over there first?

• 24:20Alex Cranz?

  Yes.

• 24:21Speaker 03

  The robots took our jobs. I don't know what else there is to say.

• 24:24Nilay Patel?

  The robots are coming for a job. So, uh, last week, a site called Futurism broke this story. CNET is secretly using AI to write articles. And it was like, I would say it was 90% a secret. Because the byline on the article says CNET money staff. And then if you like clicked it, it would tell you that it was written by AI with a human editor.

• 24:48Alex Cranz?

  Yeah.

• 24:48Nilay Patel?

  I've run a digital news site for a long time. No one's clicking. So it was, it was, it was not hidden, but it was hidden. Right? The story picks up, people go wild. Obviously, in the context of chat GPT, there's just unhinged discourse. The, the robots are coming for our jobs. Journalism is, journalism is over. Why do you even need this? We started looking into it. Mia Sato on our team and James Vincent, who's our AI reporter, he's been on the Verge cast recently. Sign him to go figure out what's going on here. And it came back. We, we just published the story. And we'll, we'll kind of get to the story itself in a minute. But they came back with what I think of as just like a dead ahead Verge creator story. Like there's a platform, it has an algorithm, people try to game the algorithm to make more money. Like

• 25:32Nilay Patel?

  the bones of this story are the same as YouTubers gaming YouTube or TikTokers gaming TikToker, Instagrammers gaming Instagram or whatever. It's just, the platform is Google search in the web and CNET instead of being a TikToker is a voracious private equity money machine.

• 25:53Alex Cranz?

  Well, not CNET.

• 25:54Nilay Patel?

  So it's just not, like, it's just not as in it, but the, the basics of it are the same.

• 25:58Alex Cranz?

  But not CNET. It's Red Ventures, right? That now owns.

• 26:01Nilay Patel?

  Right. So we should, we should say at the top, CNET is our competitor. This is a disclosure. Do I need to disclose that the Verge competes against CNET? The Verge has competed against CNET for a long time. When we were all little babies and we just started the thing, we're like, we're going to get CNET, like, whatever, we did it. Wired and CNET, those are always our competitors. We are friends with a great many people who work at CNET, who have worked at CNET. We just were talking about Casey. Casey came to us from CNET. We've sent people to CNET. So it goes, it's a big industry. CNET in 2008 was worth 1.8 billion dollars. And it was, I know this because CBS bought it for 1.8 billion dollars, which is just a crazy

• 26:43Nilay Patel?

  sentence. Just, you in a car, pull over and I want you to say out loud to yourself, in 2008, one year after the iPhone was released, CBS bought CNET for 1.8 billion dollars.

• 27:00Nilay Patel?

  That's more than Facebook bought Instagram for, Facebook bought Instagram for a billion dollars. That's more than Google bought YouTube for. Google bought YouTube for 1.65 billion dollars. CBS bought CNET for 1.8 billion dollars in 2008.

• 27:18Alex Cranz?

  You don't think that was a good buy?

• 27:20Nilay Patel?

  So I

• 27:22Speaker 03

  It's a content strategy. That makes sense. I understand it.

• 27:26Nilay Patel?

  Fast forward, many things happened between 2008 and 2020. Again, this is one year after the iPhone is released. So one year after the comet hits the earth, they're like 1.8 billion dollars on CNET. The comet, it turned out, had hit the earth, upends the entire media ecosystem, upends the world, right? Mobile upends the world. 2020, CBS flips CNET to a company called Red Ventures for 500 million dollars. I think it is safe to say this was not a good investment for them. They flip it to this company called Red Ventures. Red Ventures is, they're not a secret. They've been profiled in the New York Times. They own a lot of things. They own The

• 28:08Nilay Patel?

  Points Guy. They own bankrate.com. They own creditcards.com. Are you sensing a theme here? They own things that people with credit cards go to visit a lot. And it's a massive portfolio. They own a lot of like, search content farms. Like, when you're searching for some, when you're searching for like, credit card of the best points, and you land on The Points Guy. And The Points Guy is great. We know people who work there, too. Yeah. You land on The Points Guy. How does The Points Guy make money? It's affiliate links to sign up for credit cards. So Red Ventures is buying all of these sites that have lots and lots of search authority, and they're like, pumping them full of affiliate links. Which, again, is a totally, like, well-known content strategy. The Wirecutter, another competitor of ours, I feel like, if it's a website, it

• 28:52Nilay Patel?

  competes with us. Just be honest. The Wirecutter, started by Brian Lam, who started Gizmodo way back in the day. He started it, was basically like, here's the best phone, and I'm just like, one phone, and here's the link to buy it. Totally monetized by affiliate links. He flipped that to the New York Times for 30 million dollars. And then you can ask a lot of people how it's going over there. But whatever.

• 29:13Alex Cranz?

  Now he surfs.

• 29:14Nilay Patel?

  And now Brian mostly surfs. His Instagram is, he's a great carpenter. So CNET gets bought by this private equity company called Red Ventures for $500 million two years ago. And then all of this AI stuff starts showing up. And so they got caught out last week. But me and James go and do the reporting. And it turns out that Red Ventures is pretty much open about the fact that they use AI across their portfolio. They've been doing it on CNET for a while. Every single morning, CNET, again, our competitor, I think it's fair to call them a tech publication, every single morning around nine o'clock, CNET publishes, here are today's mortgage rates and here are today's mortgage refinance rates.

• 29:55Nilay Patel?

  But just imagine if a verge did that. Like, people would kill me. Like, our staff would kill me first.

• 30:01Alex Cranz?

  Quick post.

• 30:02Nilay Patel?

  They're obviously doing that because those people search for that.

• 30:05Alex Cranz?

  Yeah.

• 30:06Nilay Patel?

  And that's a service you can provide people. Here's, here's the information. But why do you do that if you're saying, because you're huge, you have a lot of search authority. And when people go to sign up for a new mortgage or to refinance their mortgage, you collect an affiliate bounty on the back of it.

• 30:19Alex Cranz?

  And I don't think we can overstate how much authority CNET has because it's been around, it was created, what, in the 1990s?

• 30:26Nilay Patel?

  Yeah, it was created so long ago that CBS bought it for $1.8 billion in 2008.

• 30:33Alex Cranz?

  Like, it has a lot of authority. And that's one of the reasons it stayed one of the top ranked tech sites in the world is because it has so much authority. You go and you Google something, you're probably going to find a CNET link and you're probably going to click on it because you're like, I recognize them. And so like, I think that was the reason Red Ventures bought them, right? Was because they wanted that authority?

• 30:55Nilay Patel?

  I mean, if someone's like, hey, this thing is worth 1.8 billion, but you could have it for 500 million.

• 30:59Alex Cranz?

  What a deal. What a deal.

• 31:04Speaker 03

  Sometimes you just gotta Tumblr it, man.

• 31:05Nilay Patel?

  This couch just needs to be reupholstered, you know? You do the thing where you cut the skirts off the bottom, you expose the legs, you sell it on Facebook Marketplace for five times what you bought it. Red Ventures. So, but if that's your game, right? This is your monetization. You're going to buy all these sites with search authority for really high value search terms. And then you're going to put affiliate links on those pages. And when people click on them, you get paid. And this is a real thing, particularly for credit cards. We were doing some research. The number, if you click on a credit card affiliate link on one of these sites and you sign up, the bounty, the affiliate bounty is right now like $250. In the past, for Red Ventures specifically, $900. Wow. Right?

• 31:49Nilay Patel?

  So if you, if they can get you to sign up for one of these crazy credit cards, like, you know, the metal and all the, all the point system is all this stuff, the high end, the top tier ones, the Visa Infinites, and you actually sign up through one of their links, up to $900. So this is a totally lucrative play for them, a totally lucrative play for the points guy and all these other sites that they, that they own. But that means you're not really trying to do anything except get people to click those links on your pages. Right. I will disclose, we also have affiliate links on our pages. We disclose them per the FTC guidelines. They're, they're connected to our reviews program. But like, our reason for being is tech journalism. And we do that stuff to pay for the tech journalism.

• 32:34Nilay Patel?

  I, I think that makes sense. Like, if you read our reviews, a lot of them are like, you shouldn't buy.

• 32:40Speaker 03

  It made a lot more sense before you just told me that they're getting $900 on each referral link.

• 32:45Nilay Patel?

  Right. A lot, a lot of theirs, well, you should sign up for the San Alex card. And that's just across the portfolio. So if, if that's the game you're playing, your private equity, and this is the money machine you're running, and you're just trying to pump Google search with content so you can convert on these links, like, why would you have people do that work? Like, you, you can't, there's no way an actual human being wakes up every day and seen it and like, looks up the mortgage rates, fills out this template and hits publish every single day between nine and 9:30 a.m. for like, two years.

• 33:16Speaker 03

  I bet there's someone on TikTok doing an absolutely unhinged get ready with me every morning, reading nothing but the mortgage rates and putting on makeup. I can find them. I'll, I'll look.

• 33:25Nilay Patel?

  I was just saying, but that's like, you would, you would want a robot to that. You should have a robot do that job. Yeah. If I assigned one of our reporters to do that job, they'd be like, screw you, get a robot to do it.

• 33:35Alex Cranz?

  You would not have that reporter.

• 33:37Nilay Patel?

  They would say they were doing it and figure out how to make a robot do it on their own. Right? Like, if you have an office job in America today and you have not figured out Excel automations, like, you're just robbing yourself of time. That's time you could be on TikTok. It's like, why wouldn't you do this? And the answer is like, oh, you should just do this a lot. Of course, you should have AI write content with a capital C against popular search terms and publish them. Just at mass volume on your site with enormous amount of search authority. So you can convert affiliate links at $250 or $900 a piece. The problem is, one, that that can't be self sustaining, right? At some point, you're just not going to have a staff left to even turn on the robots. Because journalists don't want to be around that. Two, eventually, you're going to destroy your brand, right?

• 34:22Nilay Patel?

  Like, CNET will be known for just being a content farm. And then three, and I think this is like the big story. And honestly, it's like, this is going to be the big story of the year. Eventually, Google's gonna be like, yo, our search results are full of garbage. Right? People will type in, what is the best credit card? And you just get robots trying to get you to sign up for credit cards. And like, why would I use Google then?

• 34:41Alex Cranz?

  And Google hates that. Like, to be clear, Google hates when you try to game the system. Every couple of years, they do like a big panda update. And they're like, our job here is to destroy this gaming. And then you watch a lot of companies who are like, their whole business is gaming the SEO go, oh crap, and trying to figure out how to game it again. And so like, I don't think there's a long runway for this AI. Well, there's a long runway, but I don't think there's a good ending for this AI gaming with, uh, Google.

• 35:10Nilay Patel?

  I think Google, honestly, to me, yes, it's a competitor. I mean, the story itself is great. You should read it. That an editor resigned and wrote a letter to hundreds of people that she had the letter written by ChatGPT. Just like a perfect detail. And in the letter, she accuses CNET slash Red Ventures of sending out a cybersecurity newsletter written by AI without disclosing it and saying like, there was actually bad advice in there. That's a, that's just a straight up scandal, right?

• 35:40Alex Cranz?

  Yeah.

• 35:40Nilay Patel?

  You have this line, the last line of the story is, CNN employees do not fear AI more than they fear the numerous layoffs Red Ventures insists upon. Everyone at CNN is more afraid of Red Ventures than they are of AI. Like, there's a, there's a story here. It's not really about CNN, right? It's about private equity, gaming, Google search, and the affiliate marketing ecosystem ruthlessly. And, you know, they're private. It's like being mad at Tiger for being a Tiger. It's a P company.

• 36:07Alex Cranz?

  Like, this is what they That's their job.

• 36:08Nilay Patel?

  They buy companies and squeeze them for money and then move on. Like, I'm mad at the locust. Like, what are you gonna do? CNN, though, is like this storied news powerhouse, and it's, it's being gutted by these forces. And honestly, it's because Google search is gamable in this way. And yet, they do panda updates. But just compare that to other platforms. Compare that to YouTube. Compare that to Instagram. Compare that to TikTok. Compare that to even Twitter, right? YouTube is like, boy, there's a lot of garbage on our platform. We're just changing the algorithm to de-rank it or demonetize it, and we'll change the incentives so people make this other thing that we want. And then the garbage

• 36:45Alex Cranz?

  I mean, Google struggled with

• 36:46Nilay Patel?

  slowly proliferates, and then it comes back, like, whatever. But all the other platforms do that. Google search is just steadily getting worse, right? It's like, it hasn't, it does not incentivize good stuff in the way that the other platforms at least give, like, lip service to incentivizing good stuff.

• 37:03Alex Cranz?

  I do wonder, is there, is there, like, like, with Google, there's an entire industry. They're called, like, the SEO industry. It's all these people trying to game Google. And it's been around since as long as Google's existed. Is there, like, an SEO industry for TikTok and for YouTube and for these other platforms?

• 37:22Nilay Patel?

  Oh, yeah, dude. Yeah.

• 37:24Alex Cranz?

  But is it as big?

• 37:26Nilay Patel?

  It's, I don't know if it's as big, but the difference is, like, the SEO industry is, it's diffuse, right? It's like copywriters and keyword experts and whatever. Like, there are agencies and they have different, kind of like, pieces of the puzzle. And there's just, like, a lot of, like,

• 37:44Alex Cranz?

  Yeah.

• 37:45Nilay Patel?

  generalized SEO knowledge that exists. Because Google is big, and it's, like, hard to wrap your head around the fact that Google search is a platform, right? You think the web is a platform.

• 37:53Alex Cranz?

  Right.

• 37:54Nilay Patel?

  But, like, Google search is a, is a discovery platform, just like Instagram is a discovery platform. The other platforms, TikTok, whatever, Because there's like a unification there between the creation tool, the distribution tool and the discovery engine, those people are not like SEO experts. They're just like a TikTok creative agency.

• 38:11Alex Cranz?

  Yeah.

• 38:12Nilay Patel?

  Right? Like our audience team is like, here are the TikTok trends that we should do on, on the Verchast and Decoder this week. And then we don't do, we should do more like, you know, there was that one where like, people were like sad on a boat and like the Decoder team was like, you gotta make a decoder.

• 38:25Alex Cranz?

  We're actually doing that next week.

• 38:27Nilay Patel?

  I was like, I don't know if I can do this. I love boats, but I don't like being sad on them. And I, there's, I think that unification of the other platforms makes, makes them easier to perceive, right? You can.

• 38:38Alex Cranz?

  I like that. Yeah.

• 38:39Nilay Patel?

  Instagram is a platform. You can kind of see the beginning and end of it. You can see the whole thing. Google search, like no one can perceive it, right? And it feels organic. And again, these are like very sarcastic air quotes. Like it feels like you ask the robot a question, the robot tells you an answer. But then if you like really poke at it, you're like, oh, it's like better to search Reddit, right? Or it's like, there's a reason people think that ChatGPT will replace Google. It's because it doesn't return SEO spam to you. It just confidently lies to you. And like, it turns out, like, what is, what is the lesson of the world of the media ecosystem from 2016 on? Confident lies are very popular.

• 39:15Alex Cranz?

  I'm sorry, I'm laughing.

• 39:17Speaker 03

  Well, I think something that I've noticed with kind of the way that people are using search engines, and we, sometimes we talk about how especially young people, they'll search TikTok or something instead of searching Google. And I was talking to a friend of mine the other day, and I had a thought that it's not necessarily that they trust the results of when you search on TikTok. Those things are, are black boxes. You, you still don't know why it gave you this result or that result over another. It's, but for us old people, when we used to dial into a, a customer service line and hit zero or we're yelling operator, you just want to hear from a person.

• 39:51Alex Cranz?

  Yeah.

• 39:52Speaker 03

  And that's what TikTok or Instagram can give you isn't, or Reddit especially can give you an answer that appears to come from a person. Now with ChatGPT, who knows? But yeah, it appears to come from a real human being somewhere. And there's, there's something about that, that you probably have, you'd probably rather have that than the correct answer. And, and Google has been promising the correct answer and it's not delivering that anyway.

• 40:12Nilay Patel?

  Yeah. And I, I'm telling you, Google, this is a, gonna be a bad year for Google. They've got, they've got to deal with it from both sides. Right? So first, people are gonna start talking to ChatGPT and Google itself cannot deliver that technology. They invented it. Like that transformer tech, the T in ChatGPT is Google transformer. Like they made it. And they have the big models. They have L L M's that can compete that they like Google will tell you are better than chat G P T, but they can't release it because they know it will confidently lie to people. It will tell people the wrong answer. It will feed people misinformation with such confidence that people will believe it. And if you're Google, that is a that's existential risk for you.

• 40:53Alex Cranz?

  We did a we did a story this week about how this guy had made use chat G P T to make an entire voice assistant. And he was like, yeah, it works really well. It works so much better than Siri. I hope I didn't just say Siri. But the reason he was like, this would never make the mainstream is that this thing will confidently tell you the wrong information or confidently be like, now you're a white supremacist. Like, chat G P T doesn't have all those barriers in place that Google's put up. But Google is also getting so gamed by other people and has like failing to stop that gaming. I keep wondering, is somebody going to make an add on for Google where you just automatically blacklist sites that you know suck and don't actually give you answers?

• 41:37Nilay Patel?

  Right.

• 41:38Alex Cranz?

  Actually, I have to go talk to Graham. Excuse me.

• 41:40Nilay Patel?

  But here's what I'm saying.

• 41:41Alex Cranz?

  Something to do right now?

• 41:42Nilay Patel?

  So Google's got an input problem, right?

• 41:46Alex Cranz?

  Yeah.

• 41:48Nilay Patel?

  I'm gonna get this wrong. If you can do the framing of this better, please let me know. Google has a supply problem. That's the first thing. So Google, it's the suppliers are websites, the the verge, Polygon, whatever it is. And we publish stories and we hope Google searches them. And if you search for inside Twitter's first 90 days, we very much hope that you land on the verge.com. Okay, fair enough. The problem is the supply that is being fed into Google is being overrun by S E O optimized A I garbage.

• 42:20Alex Cranz?

  Right.

• 42:21Nilay Patel?

  And so Google has to deal with that first. Then they've got like a a demand problem. This is where if you have a better framing, let me know. They have a demand problem, which is the people coming to Google are increasingly like, but I could just ask chat G P T and it won't deliver me this garbage. Or I could just ask Alexa, or I could just ask Siri, or Bing actually has, you know, Microsoft has a huge funding deal with OpenAI, being is going to integrate chat G P T. Maybe, maybe people are gonna start asking Bing. Stranger things have happened. Apple came back from the dead, right? CBS bought CNET for $1.8 billion in 2009.

• 43:04Nilay Patel?

  Who knows what's gonna happen? So they've got like this weird supply problem or a demand problem where the people who use Google increasingly think the product is not good. And they're searching Reddit or they're searching TikTok or whatever. And the suppliers of Google's results are increasingly cynical and flooding it with garbage, which makes the demand problem worse, right? And how do you, how does Google get, this is their money. This is what they got.

• 43:29Alex Cranz?

  Yeah.

• 43:29Nilay Patel?

  Right? Like there's not a Google messaging platform that makes money or exists. Or is used, right? Like they have this and they have YouTube. And if this goes away, like Google falls apart. And I think they just gotta, I don't, they have to articulate a path through it and they have not done that yet.

• 43:45Alex Cranz?

  Yeah. Well, and they've, they often refuse to, like, this isn't a new problem. SEO gaming and absolute garbage being the top of the search results is a problem they've been dealing with for the, for the entire time Google's existed. But they never articulate that problem or treat it as what they are. What you said, their platform, they don't view themselves as a platform. They don't view their problem as a platform, as a content moderation problem. They view it as like an engineering, really Twitter, Elon Musk kind of way. They view it as an engineering problem. And as long as they continue to do that, I think we're gonna just have garbage when you go search Google and then you go to Reddit.

• 44:21Speaker 03

  You remember before Google, when there were search engines that weren't Google that people used and they were just indexes.

• 44:27Alex Cranz?

  Mama.

• 44:27Speaker 03

  And it was just some guy who was like, these are the TV websites or these are the websites that you can go to for NFL stuff.

• 44:33Nilay Patel?

  Richard Lawler's TV websites list.

• 44:35Speaker 03

  Down, you could go down folders to the entire end of the internet because someone had listed every single thing. And there was, there was at its heart, a person.

• 44:44Alex Cranz?

  Yeah.

• 44:44Speaker 03

  And now you have Google, which assumed that all the data coming into it was reliable, that all those links, they meant, they meant something that, that if you, if you link something, it must've been a person who put that there because they liked it. And that just isn't true anymore. That is, that that world is gone now.

• 45:00Nilay Patel?

  I like that your future, your prediction of like the future of the web is back to Yahoo. Like OG Yahoo.

• 45:07Speaker 03

  Infoseek, obviously.

• 45:08Nilay Patel?

  Infoseek.

• 45:10Nilay Patel?

  We should make a custom queue. I have so many product ideas. Okay, if you can turn the Verge homepage into a Mass Effect, let me know. We'll just do that on the side and I'll go to the CEO and be like, hey, look at what I did and we'll see how long I stay in this job. Open to it. Hit me up. And if you want to code like a hand curated, like vintage 1999 search engine.

• 45:29Alex Cranz?

  Yeah.

• 45:30Nilay Patel?

  Could be pretty sweet.

• 45:33Alex Cranz?

  Be sick.

• 45:34Nilay Patel?

  But I really do think like, yes, Sina, yes, AI, yes, it's a scandal and you should read that story. Mia and James did a fantastic job with that story. I'm just telling you, that is a scandal that it's like the symptom and the disease is the absolute rot of the web platform and in particular, how Google searches influenced the web platform. And like, I'm telling, this year, I would tell you is it's either up or down. Like something is going to happen in there because all of the other places people make content are effectively closed. Right? And I always joke that the endpoint of every YouTuber's initial life cycle before they become a butterfly is the video where they're like, I'm pissed at YouTube. And then like, yeah, the light bulb goes off and they realize, oh, I'm just playing

• 46:18Nilay Patel?

  the game. Right? That doesn't happen on the web and it's because we don't recognize like Google is the controlling influence of the web. I think it's because its name is Google and it's like logo looks like it was made by a five year old. Like we just don't, we can't perceive it.

• 46:30Alex Cranz?

  Well, I think you have, you have different paths into, into websites than you do. Like, Google is the primary path for the majority of people, for like the vast, vast majority of people. More people than most of our listeners probably fully understand Google is that way. But there's still other ways. You still go and read places like theverge.com and we point you to cool stuff or your mom sends you a cool link. Like there's still other ways to get to this stuff.

• 46:54Nilay Patel?

  That's third product.

• 46:55Alex Cranz?

  Third product.

• 46:56Nilay Patel?

  It's just a distribution system for Alex's mom to send people links.

• 47:00Alex Cranz?

  It would be terrible. You'd get one link a day.

• 47:02Nilay Patel?

  And I guarantee you, we'll be able to game that one better than anyone else, but it'll be honest.

• 47:06Alex Cranz?

  Yeah, you'll know a person did it.

• 47:08Nilay Patel?

  You'll know that I made Alex specifically tell her mom to pick the Verge version of the story.

• 47:15Nilay Patel?

  All right, we gotta take another break. We'll be right back. We gotta talk about this new Apple stuff. M2 chips and new, it's great. We'll be right back.

• 47:26Nilay Patel?

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

• 47:47Speaker 08

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

• 48:12Nilay Patel?

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

• 48:25Speaker 06

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

• 49:16Nilay Patel?

  All right, we're back. A bunch of stuff we have left to talk about, all of which like happened in the last eight seconds. Apple announced a new MacBook Pro with the M2 Pro and M2 Max chip, a new Mac Mini with M2 and M2 Pro chips, a new HomePod. There's a rumor that they're doing some sort of weird Google Homey smart display. Microsoft had layoffs. They're talking about rejiggering a hardware portfolio, which is really interesting. And of course, Netflix, Reed Hastings, founder and CEO, stepped down, new co-CEOs at Netflix. Let's start with Apple. I feel like we have to. We've made people sit through. A long and winding argument about the future of the web. I would say that's why you come here, but I think you also come here for us to complain about the MacBook Pro.

• 50:04Nilay Patel?

  This is more or less what we were expecting. Don't you think that it's the same design? And then the M2 Pro and M2 Max, kind of the same basic idea as the M1 Pro and M1 Max. They just stitched them together.

• 50:17Alex Cranz?

  It's, it's just the M1 faster.

• 50:20Nilay Patel?

  Like, and like linearly faster, right? Like faster by core counts.

• 50:24Alex Cranz?

  Yeah, they're like, we added more cores. Now it's faster. And you're like, thank you. That's what I wanted.

• 50:28Nilay Patel?

  They did say that these are the longest battery life ever in a Mac laptop, which is pretty incredible.

• 50:35Alex Cranz?

  That I'm really excited about because the M2 didn't, when we, when we reviewed the M2 in the MacBook Air, it didn't get better battery life, but it also had a totally different design than the M1 MacBook Air. So I'm really, really curious to see how these M2 14 and 16 inch laptops hold up to the previous version.

• 50:55Nilay Patel?

  It's also interesting to me that Apple is starting to just admit that people use Creative Cloud. So they say the MacBook Pro, M2 Pro is able to process images in Adobe Photoshop up to 40% faster than the M1 Pro and up to 80% faster than MacBook Pro with a Core i9. Okay. I mean, I have an M1 Pro, MacBook Pro 16 inch is the best computer I've ever owned.

• 51:15Alex Cranz?

  Yeah, you love it.

• 51:16Nilay Patel?

  I mean, I don't, I don't use Photoshop enough to need a 40% boost, but that's pretty impressive from one generation to another, I think.

• 51:22Alex Cranz?

  Yeah. Yeah. I like the, the jumps sound really, really impressive. And I think we just have to wait and see because Apple is also still learning how to talk about processors and speed bumps. And they still do lots of charts that have no meaning. And so we still need to.

• 51:38Nilay Patel?

  Oh, can I talk about these fucking charts?

• 51:39Alex Cranz?

  Let's talk about the charts.

• 51:40Speaker 03

  I think they made them just for you.

• 51:42Alex Cranz?

  I was hoping you'd want to talk about the charts.

• 51:44Nilay Patel?

  Okay. So usually I complain about these charts.

• 51:47Alex Cranz?

  You do.

• 51:47Nilay Patel?

  And usually what I complain about is that the Y axes aren't labeled.

• 51:51Alex Cranz?

  Simply good.

• 51:52Nilay Patel?

  Pretty normal. If you're in the, if you're in the business of complaining about charts, like isn't chestnut. You just bring this out of your back pocket. You're like, they didn't label the Y axes and everyone's like, whoa. And like you're playing the hits, you know?

• 52:05Nilay Patel?

  Apple has now gotten to a place where there are effectively no axes at all.

• 52:12Alex Cranz?

  Yes.

• 52:12Nilay Patel?

  And nothing is labeled. So it's like, see how the M2 Pro and M2 Max stack up? And then it's just some lines with no axes and it just, the M2 Max MacBook Pro is purple. And it just says 15.9 X.

• 52:30Alex Cranz?

  I, I want to judge them, but when I was first doing processor benchmarks and I would post charts, I also did that because I was like, people just want to see a line go up. They don't care about the axes.

• 52:41Nilay Patel?

  Yeah. No, dude, who are you talking about? They're chip nerds.

• 52:43Alex Cranz?

  Commenters schooled me on how wrong I was.

• 52:46Nilay Patel?

  These are, their, their brains are graphs.

• 52:48Alex Cranz?

  I, I, I picked up eventually.

• 52:50Nilay Patel?

  It's like an EKG machine.

• 52:52Alex Cranz?

  I don't, but I don't judge them because I personally, I just want to see it go up.

• 52:55Speaker 03

  As long as the one number is higher than the other number. That's all that matters. That is the, the.

• 52:58Nilay Patel?

  I'm just telling you, you look at the chart, go on apple.com slash MacBook Pro 14 and 16. Like that's not quite the URL, but you'll, you'll get there. You'll click on it. You'll understand that I was close enough. And you scroll down and you're like, okay, this purple line is 9.4 X compared to Intel based MacBook Pro. And you're like, what does that mean? Is it in time? Is it in units of performance? Is it in?

• 53:26Alex Cranz?

  Just fast.

• 53:26Nilay Patel?

  Is it in smiles? There's not, there's not a unit. I'm, one assumes it's time, but is it minutes? Is it seconds?

• 53:37Alex Cranz?

  Wait, there's a three, there's a three, there's a, there's a note at the bottom. I'm still scrolling.

• 53:43Nilay Patel?

  Go ahead.

• 53:44Alex Cranz?

  I'm still there. Testing can, oh, this is what it's testing on.

• 53:48Nilay Patel?

  Yeah. No, I read the note, dog. It's not gonna help you.

• 53:53Alex Cranz?

  Doesn't say, no answers there.

• 53:56Nilay Patel?

  It's just a list of specs and the the frame rate of the movie file and the resolution of the file they transcoded. I'm just telling you, it is, it's bold. It's powerful. It's avant garde. It's now to say, you know what? Neela yelled at us about the Y axis for so long. We're taking out the fucking X axis and units. Fine. Like, fine.

• 54:18Alex Cranz?

  It's just fast.

• 54:19Nilay Patel?

  The next, I guarantee you the next time around, it's just gonna be a purple bar with no units. Like, not even this like relative 9.4.

• 54:25Alex Cranz?

  I was just gonna say fast.

• 54:26Nilay Patel?

  I'm sure the chip is very fast. I, again, I have a M1 Pro MacBook Pro. Great computer. Best computer I've ever owned. Every time I look at these on it, every time I look at these charts, I'm just like curious.

• 54:38Alex Cranz?

  I like that the M1 Max is faster than the M2 Pro, but you wouldn't necessarily notice that because it's a different color.

• 54:46Nilay Patel?

  Oh, yeah.

• 54:46Alex Cranz?

  Yeah. And almost the same color as like the back.

• 54:48Nilay Patel?

  I'm just, I'm telling you right now, if you just look at these charts. Oh, that's the other thing. So it's a video, they changed the comparison. So the 16 inch model, which has the M2 Max, is compared against a Core i9 and Radeon Pro 5600M. That is the, that bar is one. And then you click to the 14 inch model and it's a shorter bar. But it's a MacBook Pro with an Intel Core i7 and presumably integrated graphics. There's just no way to know what's going on here.

• 55:20Alex Cranz?

  I'm loving it.

• 55:22Speaker 03

  Probably still bad at gaming.

• 55:24Alex Cranz?

  This is great.

• 55:28Nilay Patel?

  That's brutal. So they're claiming longest battery life ever in a Mac. The 16 inch model with the M2 Pro is supposed to get 22 hours of video playback, which again, we should caveat, you should go watch Joanna Stern's video. That's with all of the radios off and the brightness turned all the way down. And like looping one video in QuickTime. And if that's you. You're getting almost a full day of that experience.

• 55:51Alex Cranz?

  Enjoy.

• 55:52Nilay Patel?

  Let me know if that's you. And then 15 hours of wireless web browsing. That's supposed to be an hour longer than the previous M1 Pro, which we got 16 hours out of when we actually did it, which was longer than their average. So we're very excited to test the battery life on these things, test the performance. Again, the chip seems great. I think the Mac Mini at $599.

• 56:13Alex Cranz?

  That's.

• 56:13Nilay Patel?

  That's it's getting real close to Impulse by territory for me.

• 56:16Alex Cranz?

  That's a good.

• 56:17Nilay Patel?

  I don't need that computer. And I'm like, oh, but that's it's pretty good.

• 56:20Alex Cranz?

  I like, I don't want to bully you into buying things, but you should buy it.

• 56:25Nilay Patel?

  You know, I bullied David Pearson to buying an M1 Mini. He was like complaining about his computer. I was like, dude, it's like $599. He was like, that's a good deal.

• 56:31Alex Cranz?

  Just do it. Well, and this is the first.

• 56:34Nilay Patel?

  So there's a, there's some weirdness here, right? With the Mac Mini, the Mac Studio, the forthcoming Mac Pro, which we're now, you know, German at Bloomberg reported it's going to be in the same case. And there's just some weirdness with that part of the Mac line. But I would tell you that I'm fully accepting of it because Apple's Mac line just be weird in the wrong way.

• 56:54Alex Cranz?

  This is a good weird.

• 56:55Nilay Patel?

  They clearly hated these products and didn't want you to buy them. And now it's weird in the best way and that there are too many good choices. Like, I'll take that.

• 57:03Alex Cranz?

  Yeah. Like, I have no FOMO about my, my Mac Studio.

• 57:07Nilay Patel?

  Yeah.

• 57:07Alex Cranz?

  I feel great. I didn't look at this Mac Mini and go, oh, man, I should have waited another year with my 2012 MacBook Pro.

• 57:15Nilay Patel?

  The second this thing goes on sale or there's like a good refurb. Like, I'll be like, Max, you're not going to college, but the chip in this computer is named after you.

• 57:27Speaker 03

  So that's HDMI 2.1. What were you supposed to do?

• 57:29Nilay Patel?

  No, that's right. Right. And again, AK monitor. What's the only thing I've ever complained about with my MacBook Pro is that I have HDMI 2.1. Do I consistently plug it into a 720p curved TV that I use only for Zoom? I do. But should that be HDMI 2.1? It should.

• 57:45Alex Cranz?

  Yeah. But you can get the Mac Mini.

• 57:47Nilay Patel?

  In general, I mean, these are fine refreshes. Here's the weird thing. So they put them out with just kind of like press releases. They both have like long videos with them about the new Macs, the new chips. It feels like there was supposed to be an event, like this is the cut up of the event video that we would otherwise see. And they just like, did it.

• 58:05Alex Cranz?

  Right.

• 58:06Nilay Patel?

  And like. Was there supposed to be an event and they just didn't have, they didn't have the AR glasses or whatever it is. And they're like, we're just putting them out.

• 58:14Alex Cranz?

  Yeah, because Gurman is saying that there was supposed to be an event and the glasses were going to be there. And now they're like, the glasses aren't ready. Don't worry about the glasses.

• 58:23Nilay Patel?

  I am, I'm right now, I'll tell you what I thought in my heart. I think AR glasses are in the exact same hype timeline as self-driving cars.

• 58:30Alex Cranz?

  I like that.

• 58:31Nilay Patel?

  I think we're going to be a lot older before we see self-driving cars or AR glasses for real.

• 58:35Alex Cranz?

  Yeah. Like, it would be wild if, if Apple had solved the display issues with AR or all of the other myriad of issues with AR glasses.

• 58:44Nilay Patel?

  We've gone through the stack many times in the show. You need to build a display that has sufficient resolution to look like reality, but you can still see through, that mounts on your face and is comfortable to wear. You need to have a processor that can do all of that in real time. You need to put cameras on a display so you can, the processor can see reality, image it and spit out an augmented version of reality on top of it. Then you need to have a battery and then you need to have connectivity and all that can't get too hot and needs to last all day. Like, good luck. We're going to be a lot older. Yeah.

• 59:12Speaker 03

  The coil is never happening. But I don't, I don't know. It seems like they're kind of close with the $3,000 headset that no one's actually going to buy with an M2 chip in it and a VR chip and it's tethered to something that goes to your back pocket. They're going to buy it and do what?

• 59:28Nilay Patel?

  Yeah, they have the Quest Pro.

• 59:29Alex Cranz?

  YouTube videos showing that they bought it.

• 59:32Nilay Patel?

  Pro problem. The Quest Pro is this product.

• 59:34Alex Cranz?

  Yeah.

• 59:34Nilay Patel?

  And maybe it's a little worse than Apple's product. Maybe on some dimension, it's a little bit better. Who knows? But it's basically this product. It has worse software, whatever. But you're like, oh, this is, like, the AR pass-through of that thing isn't, like, not good. And like, the metaverse is no fun. And the children are still looking for it. She was the only girl.

• 59:57Nilay Patel?

  Well, we'll see. But you get the feeling there was supposed to be something else and this was supposed to be an event. And they can't have an event to announce a chip bump in the MacBook Pro. It's like, here we are. They can't have an event to be like, the HomePod's back. So they just like, put it out.

• 1:00:09Speaker 03

  Oh, the HomePod's back and it's still the same speaker, apparently.

• 1:00:12Nilay Patel?

  We should talk about the HomePod. So those are the Macs. We're M2. They seem cool. We're excited to test them when we get them. Cool. The next day, another press release, another video. The HomePod's back, y'all.

• 1:00:29Nilay Patel?

  And I, I think people were expecting it to be changed more than it is. No.

• 1:00:34Alex Cranz?

  I, no, I don't think anybody was because all you wanted was thread and to not feel like you're going to go to jail when you take the cord out. And now you can take the cord out without feeling like you're going to break something.

• 1:00:46Nilay Patel?

  The European police are coming for you.

• 1:00:48Alex Cranz?

  Yeah, they are right now.

• 1:00:49Nilay Patel?

  So it's 299. It looks, we have, we have to see them in person, but it looks the same as the original HomePod. They're saying there's a new color, which they're calling Midnight. It's, yeah, it's the same. It's, they make, there's a white-ish one and there's a blackish one. I don't know what to tell you. Before it was gray. Now it's been, they've added thread and matter support, although Apple's matter support's a little rocky right now.

• 1:01:15Alex Cranz?

  Yeah.

• 1:01:16Nilay Patel?

  It has temperature and humidity sensors. The HomePod Mini also has temperature and humidity sensors. Those are being enabled now.

• 1:01:21Alex Cranz?

  Which got activated. Yeah, like those, those HomePod Mini sensors got activated with this announcement.

• 1:01:26Nilay Patel?

  Okay.

• 1:01:27Alex Cranz?

  If you have the software update.

• 1:01:28Nilay Patel?

  That's cool. It has a worse Wi-Fi for some reason. Deeply confusing, but honestly, who cares?

• 1:01:35Alex Cranz?

  And less tweeters.

• 1:01:36Nilay Patel?

  Right. So the, if you remember the first generation HomePod, I went out to California. I went to Apple's big audio testing facility. It was, it was a cool day, you know? They put, you know, they put me in one of those rooms where like you can't hear anything.

• 1:01:49Alex Cranz?

  Yeah.

• 1:01:49Nilay Patel?

  Are you crazy yet? And I was like, no, it's fine. But you know, like everyone, it's like, you go to enough events like this and people show you that they all have the same room with like the foam spikes and you can't hear anything. You're like, yeah, like people have these and they play the speaker for you. And they always play Hotel California because Apple is at its heart a gamer company. Um, yes, it's just real. And so this time, and but the point of the HomePod at that time was that it was the best sounding speaker, right? All of their emphasis was on speaker stuff and they had the four inch, uh, low excursion woofer. They had seven tweeters. They're doing all this beam forming. They're measuring how far away you were from the wall so they could bounce audio off the wall and

• 1:02:31Nilay Patel?

  send it to you all at the same time and create a bigger stereo sound field. They're getting more bass. It was cool. It sounded fine, I would say. I think I went back and reread my original HomePod review. You should go watch it. It was very fun to do. Uh, I have a lot of speakers in my house. The whole video team came to my house, like set up all the speakers everywhere. It was like fun. And our takeaway was, you know, it's like the HomePod, that whatever high-end Alexa device was back then, the Sonos one, we just had a whole list of it. We had a Bluetooth speaker. And we're like, of the ones that you think of as the competitors, the HomePod and the Sonos, say, they sound different. The HomePod wins some, the Sonos wins some others. If you were not comparing them directly side by side, they're indistinguishable. Like, you will just be happy with either one.

• 1:03:12Alex Cranz?

  They both sound nice.

• 1:03:12Nilay Patel?

  And so you should pick the one that fits into the ecosystem of your life. And for most people, that was not the HomePod. Like, couldn't do two timers at once, didn't recognize multiple users, just, it was weird. It was a weird product. And like, the Sonos products, Alexa products, or whatever else, they're all better, because they were better smartphone products. Now the thing's back, I think the HomePod Mini has been more of a success than, like, Apple thought it was a success, but it's like, doing fine. But the HomePod itself failed. Now it's back, they've cut down the tweeters from seven to five. They've cut down the microphones from seven to five. They say it sounds better than the original, we gotta do a head to head. All the same Beam For Me processing, whatever, we'll see.

• 1:03:55Nilay Patel?

  But the real thing is like, Matter support is there, Thread support is there, HomeKit has been improved, Siri can set two timers at once now, I think. Is that, is that enough?

• 1:04:04Alex Cranz?

  Only when it remembers to be connected to the internet, which it still sometimes is like, I'm not connected to the internet, even while it's playing your music. So it won't stop your music, because it doesn't think it's connected to the internet. That just happened yesterday, sorry, I'm really heated about it.

• 1:04:18Nilay Patel?

  Oh, I'm sorry, it is slightly different in terms of design. It's a little shorter, it's 0.2 inches shorter, and it weighs 5.16 pounds instead of 5.5. But that's what you get when you lose two tweeters and two monitors.

• 1:04:27Speaker 03

  I feel like we saw the same thing with the original Google Home, and then the speaker that they came out with after that. That like, the first one was slightly over-engineered in terms of what they were able to do with the audio, with the hardware that they had in it. And then the second one, they took a lot of that out. They said, yeah, we don't really need all of these parts.

• 1:04:42Nilay Patel?

  Yeah.

• 1:04:43Speaker 03

  We can, we can sell, the people who are going to buy these don't care if it's five or seven. So we'll just go with five.

• 1:04:49Nilay Patel?

  Well, here's what I know. Every tech company, when they sell you, when they sell their first speaker, they're like, people care about sound quality. And then they try really hard, and God bless them. Baby's first speaker, you're gonna try it later. And they ship the speaker, and it turns out, people care about its convenience and price. And people will throw away sound quality at the drop of a hat. And I think that's very much been the experience of the HomePod, and now they're here. There's some TV stuff that's good, Richard. So it can pair with an Apple TV, Apple TV's now support E-ARC, so. In a bizarre signal chain, you can plug your Apple TV into your smart TV, plug your PS5 into your smart TV, have the PS5 send audio to the TV, the TV send audio back out to the Apple TV over EARC.

• 1:05:33Nilay Patel?

  The Apple TV then send the audio to your Apple HomePods and then you listen to your PS5 on your HomePods.

• 1:05:39Alex Cranz?

  Or you could just buy a receiver.

• 1:05:41Speaker 03

  The latency.

• 1:05:44Nilay Patel?

  I mean, yeah, receiver crew rise up, you know, but.

• 1:05:49Alex Cranz?

  With an AirPlay, with AirPlay 2 in it and boom, done.

• 1:05:52Nilay Patel?

  People like using their HomePods with their Apple TVs and now with EARC, you can hear game consoles, even could get, even an Apple TV plugged into your smart TV and you're somehow using a smart TV app, sending the audio out from EARC through an Apple TV to your HomePods.

• 1:06:06Alex Cranz?

  Oh my gosh, that's just nasty.

• 1:06:07Nilay Patel?

  I want to know who you are and how you've come to that position in your life.

• 1:06:13Nilay Patel?

  Dying to know.

• 1:06:14Speaker 03

  There was a discussion about where you were going to put speakers and the only thing that someone would let you put was two HomePods that no one can see.

• 1:06:21Alex Cranz?

  Oh, I know why they would do that because for the longest time you, the Apple TV didn't do like 4K HDR Dolby Vision. I think it was 4K Dolby Vision on Amazon Prime. So you could only do that with the native.

• 1:06:35Nilay Patel?

  But it does it now.

• 1:06:36Alex Cranz?

  Smart TV apps. But maybe that person hasn't updated their Apple TV.

• 1:06:42Nilay Patel?

  But somehow they've updated it to the, only the new ones have EARC.

• 1:06:45Alex Cranz?

  Look, I don't know this person's life.

• 1:06:48Speaker 03

  They've made, they've made some choices.

• 1:06:50Nilay Patel?

  And then lastly, the HomePod supports spatial audio Dolby Atmos. I'm just going to say this out loud, directly, full honesty, full transparency. HomePod announcement comes out, I'm like, oh, HomePod, I love speakers. Read about the speakers, read about spatial audio. Everyone's excited. I have an Atmos, I have a real, I have a receiver, 5.2.2 setup, big, the whole thing. I'm like, I'm gonna listen. Some Atmos music. Cue up Apple Music on the Apple TV. Pick their spatial audio show off playlist. It fucking sucks. Spatial audio sucks. It's horrible and I hate it. It's the worst.

• 1:07:26Alex Cranz?

  Why does it suck?

• 1:07:26Nilay Patel?

  Because it removes all the impact for music because everyone's drunk on having so many channels.

• 1:07:33Alex Cranz?

  Sneaking up on you.

• 1:07:34Nilay Patel?

  And they spread everything out. And so everything that you just have this massive soundstage for no reason. You don't need it. And like all the bottom end, all the impact, all the presence is like deleted. And it just, every single time, it sounds worse. In particular on the low end. It texted somebody who would know. And they're like, oh yeah, you gotta turn your subs way up if you're listening to Atmos. And it's like, what? Because to compensate for like, the drunk sound engineers of Hollywood being like, put it in all the channels, instead of concentrating it into stereo channels. The one Atmos track I listened to yesterday on this person's recommendation was Boom by Tiesto. It was awesome. I will admit, this was awesome, because it is a high-energy dance track with lots of beeps

• 1:08:17Nilay Patel?

  and boops. And it was clearly made to fuck with people on drugs. And the beeps and boops just swirl around you in like, an ever, ever escalating sound field. And I was like, if I was on drugs, this would rule. Like, this would be the best experience of my life. And that was the only one. It sucks. I don't like, why do we have to keep lying about spatial audio being any good? I don't know anybody who likes it.

• 1:08:37Alex Cranz?

  We don't.

• 1:08:38Nilay Patel?

  I ask music executives, do you think it's good? And I'm like, it's getting better.

• 1:08:44Alex Cranz?

  Tim Cook just standing behind them.

• 1:08:46Nilay Patel?

  We had Charlie Harding on Decoder. That's a fun episode. We talked about Music and Street, Taylor Swift, all this stuff. And he was like, the only reason Apple is this invested in Spatial is because they need it for all their AR metaverse play that they're trying to do. Right? So they need all these extra channels in the music. They need spatial audio so that when they put you in the virtual reality, or they put you in AR and all this stuff. And you're moving around, they can manipulate the music properly. And like, maybe I believe that.

• 1:09:17Alex Cranz?

  Wait, is, is Apple's AR killer app gonna be like going to concerts?

• 1:09:24Nilay Patel?

  Yeah. So it's like, if you do, if you have a good spatial mix and Apple puts you in like a metaverse concert or whatever, they already have the content.

• 1:09:31Alex Cranz?

  Yeah.

• 1:09:31Nilay Patel?

  More importantly, they've already built like the spatial audio pipelines and the processing into their consumer devices and AirPods and whatever, right? Like they've built an ecosystem around spatial audio so that when that stuff is there, there's content, there's user experience, there's lots of people know how to use the tools. Like it's primed and ready in the best Apple way. That's Apple's very good at sort of like stepping you up layer by layer and then launching the device that adds it all up. I'm just like, but right now it sucks.

• 1:09:58Nilay Patel?

  It's this is like a, it's like a real deal Atmos system. It's, it's, I was like, this sucks. Like this is making my stereo sound bad.

• 1:10:06Alex Cranz?

  Yeah.

• 1:10:06Nilay Patel?

  And I tried again headphones, like these make my headphones, I don't know. If you love spatial audio, let, let me know, but I, I think there's a reason it's always demoed with like live recordings of the Eagles. Because like one.

• 1:10:17Alex Cranz?

  That's all I listen to.

• 1:10:18Nilay Patel?

  Is the reporters, is the influencers and reporters get younger. They have no idea what they're listening to. And you could just be like, kids, back in the day, Don Henley, you know, Don Henley is. Listen to those guitar tones, man. And they're like a guitar and like, fine. We used to have bands, right? It's like, you can just confuse people by playing the Eagles at them. But I'm just telling you, turn it off and just listen to how much more impact, like literal impact music has when it's off versus on. And you're like, why, what am I gaining? And the answer is nothing. Sorry, I'm just ranting about spatial audio now. It's horrible.

• 1:10:52Alex Cranz?

  I like, I haven't turned it on and off.

• 1:10:53Speaker 03

  Get it out. You, you have, you have feelings about this. We're here for you.

• 1:10:57Nilay Patel?

  It's just therapy.

• 1:11:00Nilay Patel?

  Sigh. All right.

• 1:11:02Alex Cranz?

  How does it make you feel?

• 1:11:03Nilay Patel?

  Oh, Liam says spatial audio sucks. See Liam's, Liam's, Liam wanted us to talk about the home pod. Liam, would you have any thoughts about the home pod to add here? The answer is no. All right, I'm gonna come down. We should talk about two more things. Netflix or Microsoft first? We gotta get through him.

• 1:11:19Alex Cranz?

  Let's do Netflix real fast.

• 1:11:20Nilay Patel?

  Yeah. All right, Richard, tell us what's going on with Netflix.

• 1:11:23Speaker 03

  Netflix, for the first time in, I guess, ever, has a CEO that is not Reed Hastings, in at least as long as I can remember.

• 1:11:30Alex Cranz?

  A co-CEO.

• 1:11:31Speaker 03

  Two co-CEOs, because in 2020, Reed added co-CEO. He added Ted Sarandos, who kind of runs the content business as his co-CEO. And now, today, on Thursday, we're recording this, Reed announced that he's stepping down as co-CEO, and elevating Greg Peters, who was the chief operating officer, who will now be co-CEO around, along with Sarandos. And the timing of this is really interesting, because this is at the exact same time that Netflix is just starting to roll out two things that Reed Hastings does not like: advertisements and kind of their pushback against password sharing, which for the many years of them building up streaming, he's been saying password sharing is not that bad. It doesn't really affect us. He's been saying we won't do ads. Those two things have changed.

• 1:12:16Speaker 03

  And now Reed Hastings is an executive chairman, and kind of some will be in much less of an active role. And now it's relying on these two men. As Netflix becomes a very different company, they now have hundreds of millions of subscribers. They're trying to get into gaming. They maybe can't find new customers. And they're trying to find ways to make more money from the customers that they have. And that is the struggle that they have. And the case they're making to Wall Street is how profitable they are versus their competitors, who are spending and losing money hand over fist, trying to build up a subscriber base and content like Netflix has, and apps. I guess, let's not even get into how all the other apps are. Netflix isn't that great, and every other app is worse. But the tech platform, the content, everything about it,

• 1:13:01Speaker 03

  they haven't really matched up to Netflix yet, and they're spending so, they're setting money on fire to try and catch Netflix. And that is what Netflix brings up every earnings call, is that they're profitable and the others are not. But that's what they've got.

• 1:13:13Alex Cranz?

  I mean, Netflix set money on fire for years.

• 1:13:17Speaker 03

  That that's been their whole thing until now, when that was no longer.

• 1:13:20Alex Cranz?

  Yeah, and and we've we saw that they they've been doing a slew of cancellations. They've been much more mercenary about what shows get extended and what shows don't. And I think they were even doing like unexpected cancellations, like pulling stuff they'd already greenlit and stuff.

• 1:13:36Speaker 03

  Shows that that people really like and that that seem to do well suddenly disappear. And I think it's it's interesting to me thinking about the history of Netflix streaming and where we went from. When Netflix Watch instantly had kind of the B list of shows that no one had ever heard of and movies. And it was really interesting, though. I liked it. And then they started making content. They had that werewolf show and then they had House of Cards. And then it just kind of zoomed from there. And now they have a trillion things and nothing to watch. And you can't start any new show because you know it won't get to a second season. And the algorithm that Netflix was so famous for would find something for you that you would watch. Everyone hates it because you can't just find the thing you're looking for. It won't show you. You can't just go through the categories and no and no one's happy again.

• 1:14:20Speaker 03

  We we all cut the cable and now we have us streaming.

• 1:14:24Nilay Patel?

  Yeah, see, Richard has feelings about Netflix. Like, keep going.

• 1:14:28Alex Cranz?

  I was like, ooh, keep going, Richard.

• 1:14:30Speaker 03

  This is this is my life. This is a it's it's it's a moment, man. This is when I when I saw this come across, I was like, wait, is this really happening? Because I've kind of been anticipating it. We had so many tech execs go away. And I was like, yeah, Reed's gonna be the next one. And now it's here and I don't even know.

• 1:14:44Nilay Patel?

  Yeah, so he in his resignation note, he calls out Bill Gates, Jeff Bezos, right? Moving up to executive chairman, piecing out, handing the reins over. But usually you do that at the top, I want to say, like Netflix is in a challenging position. And the things you call out, the changes it has to make, password sharing, adding advertising, are things that he did not want to do. So you have to wonder if he's just like, yeah, I don't want to do these things.

• 1:15:09Alex Cranz?

  But there are things that the CEO, the new co-CEO was doing, like he was in charge of these these initiatives. And so now he's coming in to like. Finish the job.

• 1:15:20Nilay Patel?

  Yeah, I mean, I do wonder, and we don't know, and I'm sure there'll be more reporting, but fundamentally Ted Sarandos is the content CEO, the Hollywood CEO, and Reed has been the product CEO.

• 1:15:31Alex Cranz?

  Right.

• 1:15:31Nilay Patel?

  And it's interesting that he was like, we still need a product CEO. So it's this person, not we're a Hollywood company that runs a tech platform, which is very Netflix-y in its way. But you have to wonder if the future of the product roadmap around, you know, they have a big partnership with Microsoft to deliver this advertising. The future of their product roadmap is not the recommendation algorithm. It's not this other stuff. It's like adding ads. It's detecting password sharing. It's figuring out how to make people open Netflix on their phones so they can play mobile games. And like, maybe Reed's like, I don't want to do it.

• 1:16:03Alex Cranz?

  It's real tech-heavy stuff.

• 1:16:05Speaker 03

  They've become Comcast.

• 1:16:07Nilay Patel?

  That's brutal.

• 1:16:07Speaker 03

  This is the same stuff that Comcast was doing 10, 12 years ago. They were like, oh, yeah, we're gonna put games in the box.

• 1:16:12Nilay Patel?

  Fine, Richard, I'll do the disclosures.

• 1:16:15Speaker 03

  Oh, disclosure?

• 1:16:16Nilay Patel?

  I am the EP of a Netflix show. It's called The Future of. You should watch it. I'm heavily biased in favor of that show. That's true. And then Comcast's NBC Universal Division is a minority investor in Vox Media, the Verge's parent company. The end. I also read a book about HBO last week. It was good. What do you want?

• 1:16:35Alex Cranz?

  You wrote a book? You read a book?

• 1:16:36Nilay Patel?

  I read a book.

• 1:16:37Alex Cranz?

  I was like, wow.

• 1:16:37Nilay Patel?

  It's called It's Not TV. It's very good. We're gonna have the authors on Decoder soon. It's great. I highly recommend it. Those are all the disclosures. Do we have any more? I invented something called the Go 90 scale of Doom streaming services.

• 1:16:53Alex Cranz?

  I was like, we've cruised through like, most of the big ones.

• 1:16:55Speaker 03

  But you didn't invent it for Quickster, because we should, we should say that. We should, we should bring up Quicksters. It's a day to.

• 1:17:00Nilay Patel?

  All right, go ahead. Talk about Reed's greatest failure.

• 1:17:05Speaker 03

  It's a little mean, isn't it? But we'll go there. It was the last time Netflix messed up, when they decided that they were gonna split up streaming in discs. And I remember, I got a phone call, like 11:00 PM, that they were gonna do this thing. And it was insane. And then they didn't do it. They rolled it all back because everyone hated it. The subscriber numbers dropped. And for 10 years, it was just up, up, up, until last year, when it wasn't. And now Reed is gone.

• 1:17:35Speaker 03

  I just, I don't know what Netflix is gonna feel like, you know, a couple of years down the road. As you're saying, they have a new product lead that is not Reed Hastings, and that just hasn't been the case throughout any of the things that we've talked about for Netflix. Everything, the way that it's organized, the entire kind of idea about how Netflix is and what it is, is now going to be different.

• 1:17:53Alex Cranz?

  Well, I mean, they've been, the, the new co-CEO has been groomed for this. We were seeing him in a lot more of the earnings calls in the last year or so. Like, they knew this was coming. They knew he was probably gonna be taking on this role. So I, I anticipate in the couple, next couple of years, there's not gonna be really significant changes from what we've already seen, which is killing password sharing and adding advertising. I think we're gonna continue to see Netflix do its thing where it struggles with, with its viewers and, and this whole idea of like, we can't like a show because it's gonna get canceled unless it's the most popular show, in which case it'll probably be fine. And they're, they're gonna have to deal with that, but ultimately, like, they're gonna just continue to print money, probably. On the Go90 scale, they're like at a 10.

• 1:18:33Speaker 03

  Yeah, I agree with you, and I think you're probably right, but two years ago, Bob Chapek probably thought the same thing. Where is he now? Seriously, where is he now? Nobody can find him.

• 1:18:44Alex Cranz?

  On the beach, join himself.

• 1:18:45Nilay Patel?

  Iger is facing down an activist investor right now named Nelson Pelts at Disney. We, you should just Google it and read the slide deck that Disney filed to, to beat this activist investor back. They're like, you know nothing about us, you know nothing about television, and you're a dummy. And like, that's the slide deck. It's very, you can tell they had a good time putting it together. But all is not well in streaming world, just like across the board. And I think Reed is like, screw it, I dragged this into existence, and I'll still be around. But I, you know, I, I'm gonna do whatever Bezos is doing. I'm gonna get yoked and do a, and do a rocket. Like, let's do it. And like,

• 1:19:25Alex Cranz?

  Just shredded.

• 1:19:26Nilay Patel?

  I gotta say, I see the appeal.

• 1:19:30Nilay Patel?

  The executive chairman.

• 1:19:31Alex Cranz?

  His suits aren't going to close anymore. He's just going to be so buff. I love.

• 1:19:35Nilay Patel?

  I need to buy a $10,000 black T-shirt that makes my arms look great and then we can move on to the next thing. Speaking of the next thing, big Microsoft news this week, they're laying off 10,000 people, which is very sad.

• 1:19:46Alex Cranz?

  Yeah.

• 1:19:47Nilay Patel?

  Condolences to them. It's the second biggest layoffs in Microsoft history. The first biggest, also Sachin Nadella, he let off 14,000 people when he shuttered the sort of Windows Phone Division and sent 12,500 Nokia employees away. And he got rid of it. So kind of a different context, right? This is the economy's bad second biggest layoffs. The biggest layoffs where he shuttered an entire division and got rid of a company. So a little bit context, but huge.

• 1:20:14Alex Cranz?

  This was across the board.

• 1:20:16Nilay Patel?

  But Microsoft has 220,000 people, so not massive. He published a letter. So there, and there's this paragraph in his note that I think is really interesting and like worth pulling apart and focus on. So he says, we have to continue to invest in strategic areas for our future. These are the kinds of hard choices we have made through our 47 year history to remain a consequential company in this industry that is unforgiving to anyone who does not adapt to platform shifts, which is a really fascinating thing about in the context of Nadella and Microsoft and mobile. And the last platform shift they missed, right? And then he said, this is the very next sentence. We're taking a $1.2 billion charge related to severance costs, changes to our hardware portfolio.

• 1:20:55Nilay Patel?

  And the cost of lease consolidation as we, they do return office. So he's saying, he thinks there's a platform shift. And they have to change something to get there. And then they're changing their hardware portfolio.

• 1:21:07Alex Cranz?

  Which we'd already started to see.

• 1:21:09Nilay Patel?

  I don't know what he thinks the platform shift is. And I asked around and Tom asked around. And you would think that this hardware portfolio change would be shutting down HoloLens. Cause they have effectively shut down HoloLens. And if you'll remember, Nadella was on stage with Zuckerberg saying they were going to put software in the Quest Pro. So you would think that like what they're talking about is shutting down HoloLens. We asked around and it's not, it's more than that, right? Like.

• 1:21:34Alex Cranz?

  Well, they also close, they they're not doing another version of the Duo, right? Like, they got rid of the phone.

• 1:21:40Nilay Patel?

  Yeah. So is it it? That's the Surface line. So are they going to change the Surface line? Are they going to change the Xbox line? Are they going to pare back whatever they're doing in Surface? And then you put that in the context of platform shift, right? We have to adapt to the platform to remain a consequential company that has to adapt to platform shifts. We have to do this thing. Okay. What platform shift? And is selling Surface Windows laptops enough to remain consequential through a platform shift? I'm just telling you, that paragraph, it just jumped off the page at me.

• 1:22:14Alex Cranz?

  It's super weird.

• 1:22:15Nilay Patel?

  That Microsoft is making some kind of bet that we can't see. And maybe that's just AI, right? They have a huge investment in OpenAI. Again, maybe ChatGPT is going to save Bing. Maybe it's cybersecurity. They've talked about that a lot. Maybe it's more Azure work. That's Nadella's favorite thing in the entire world. Like, it might be something more obvious, but they're saying, we think there's a platform shift. And we have to change our hardware. We've preemptively shut down our hardware portfolio. And like I said, Tom and I both went and asked around, did some reporting because we were like, oh, it's hole-ins. Like, let's confirm that. No, it's more than that.

• 1:22:52Speaker 03

  What? The only thing that I can think of that we haven't mentioned is them putting stuff like, obviously, Office has moved to the cloud. We've had the Office 365 huge shift, but Windows is suddenly in the cloud. If they're thinking that, like, the kind of concept of the personal PC license is going away.

• 1:23:10Nilay Patel?

  Yeah. Or Xbox in the cloud, right? They're going to stream the games to you. They've thought about this a lot. They've got it, you know, if they can break through the regulatory barriers and get the European police to let Apple do game streaming. Yeah, like, maybe there's a lot here that you can.

• 1:23:24Alex Cranz?

  If they can get the internet better.

• 1:23:26Nilay Patel?

  The internet's better, they're.

• 1:23:27Alex Cranz?

  Like, they've got a bunch of hurdles.

• 1:23:29Nilay Patel?

  But not in Europe.

• 1:23:29Alex Cranz?

  Yeah.

• 1:23:30Nilay Patel?

  The internet's great in Europe, right? Uh, it's just our country that seems destined to do monopoly internet access. Disclosure Comcast is a minority investor in Fox.

• 1:23:47Nilay Patel?

  I just think it's fascinating, like that line and we've, we've seen it, you know, all these are like, there's lots of tech layoffs across tech industry. Except for Google and no one's, no one's seen that coming for Google. I maintain this is going to be.

• 1:23:57Speaker 03

  Well, Google had like, they have sort of had layoffs. They cut back a lot of those experimental projects. We know that they've put people on kind of these plans where, you know, you need to find another job within Google. They've cut hiring. Apple also has kind of done the same thing where they haven't done the massive layoffs, but they did slow down hiring over the last like year or so. So in, in kind of a stealth way, they, they all have, have gone through that. And, but what this reminds me of is the meta layoffs, just because it was so huge and it was affecting so many departments. And it feels like kind of everything got cut back.

• 1:24:30Nilay Patel?

  Yeah. Well, see again, you know, Microsoft, I think has more focus than Meta. Like Microsoft knows what it's selling right now. It's just this line of platforms. It's just like, what, what's he seeing? No one else sees. I don't see a platform shift. If you were to go up to the average Verchats listener and say, what's the next platform shift? I'm guessing most people in their cars just like yelled out like AR, like VR, like it's, that's what we even told for years. But Microsoft is just divesting from all of that right now. So that, I don't think that's it. And so I, I think it probably looks like cloud operating system or cloud gaming delivery. They, they gotta get that on phones and Apple does not want to let them do that. So we'll see.

• 1:25:11Nilay Patel?

  Totally fascinating line from Microsoft. I do think if there is a platform shift coming. Microsoft, this isn't, I brought up Nadella and the Nokia layoffs at the beginning to be like, this is, that's the fire he was born in as Microsoft CEO. Right? Like Bomber bought Nokia. Our boy Steven Elop just fully eloped the entire nation of Finland, like destroy its national champion.

• 1:25:40Nilay Patel?

  Whatever. And then Nadella became the CEO and he had to just undo it all and be like, "We're going to lose mobile." And that's like, that's the fire that forged it. So I'm very curious to be like, to see what he thinks that platform shift is and how Microsoft can win. Because I very much doubt that he wants to lose again, you know, a platform shift.

• 1:25:58Alex Cranz?

  Are you, are you going to pitch that he should come on Decoder? Are we going to take that opportunity now that if he's listening, he should come on?

• 1:26:04Nilay Patel?

  I mean, we make that, we make asks all the time. I will tell you that CEOs do not want to go on hour-long podcasts after they've laid off 10,000 people.

• 1:26:14Alex Cranz?

  That's fair.

• 1:26:15Nilay Patel?

  The problem with Decoder is you have to want to come on. I can't just be like, "All right, sit down for your deposition."

• 1:26:23Alex Cranz?

  You just unfurl your list of notes, all your questions. It's great.

• 1:26:28Nilay Patel?

  It's like, "All right, where were you on the night of October 11th when Stephen Elop crept back into Microsoft's office and destroyed Nokia? All right. I encourage you to go Google the words burning platform, Stephen Elop, one of the greatest men hosts written of all time."

• 1:26:46Nilay Patel?

  Very good. If you have not read the Zoe Schiffer, Casey New and Alex Heath feature about Twitter, honestly, go buy it on a newsstand and buy a copy. That's cool. It's cool that we get to do that with them. It's cool that we have a company that allows us to do that stuff. It's cool they gave us their cover. That's awesome. It's cool to work with them. So you can read our site, go buy a newsstand. It's very good. We'll be back on Wednesday. Oh, Alex, what are you guys doing on Wednesday?

• 1:27:11Alex Cranz?

  Yeah. So on Wednesday, we are going to be talking with Dr. Margaret Omara, who is a professor and knows a lot more about non-competes than I do, and how they helped build Silicon Valley in really weird and interesting ways. This is on the news that happened with FTC, with the FTC a couple of weeks ago. And then we're going to be talking with Charles Pulliam Moore, all about The Last of Us. And try not to spoil our audience. So if you guys haven't had an opportunity, go watch so you're all primed. And then we're going to be doing a really fun hotline segment. So you should totally call us on the hotline. That's 866-VERGE11. Again, 866-VERGE11. Call now.

• 1:27:48Nilay Patel?

  I keep trying to get Charles to engage with me on the idea that there's a massive backlash against The Rock because of Black Adam, and he just like won't

• 1:27:55Alex Cranz?

  Yeah.

• 1:27:55Nilay Patel?

  Accept it. If you could just sneak that into that episode.

• 1:27:57Alex Cranz?

  He refused.

• 1:27:58Nilay Patel?

  That'd be great.

• 1:27:59Alex Cranz?

  Sorry, I will try. I will try.

• 1:28:01Nilay Patel?

  All right. Thanks to Alex Heath for joining us earlier. That was fun. Thank you for listening. In your cars, drive safe, everyone. The self-driving isn't coming, and neither are the headsets. This is just real. You can tweet at us.

• 1:28:15Alex Cranz?

  But there is a platform shift.

• 1:28:16Nilay Patel?

  There's a platform shift. It's a burning platform, and Stephen A. Lapp wants to push you into the frigid waters of the ocean.

• 1:28:25Nilay Patel?

  I don't know how this episode got to Stephen A. Lapp.

• 1:28:29Nilay Patel?

  You can tweet at us for some reason. Alex is Alex H. Cranz. Alex Heath is Alex E. Heath. Richard is at RJCC. I'm at Reckless. I do open it, and I'll throw you a like. But if you tweet at me, that's like, you're back. Like, I didn't say I was throwing it into the ocean. I just said I wasn't going to tweet as much. I haven't been tweeting as much. That's life. That's the Vergecast. Rock and roll.

• 1:28:55Speaker 00

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

• 1:29:29Nilay Patel?

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

• 1:29:50Speaker 08

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

• 1:30:15Nilay Patel?

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

• 1:30:31Speaker 09

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