OpenAI’s Raising At $100B Valuation, Telegram’s Pavel Durov Arrested, NVIDIA's Just Okay Earnings

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI Raising at a $100 billion valuation 2) Is Investing in OpenAI a good bet? 3) Why is Thrive leading the round? 4) ChatGPT usage doubles 5) MetaAI reaches 40 billion daily active users 6) Amazon leadership says coding will soon be done by bots and not humans 7) Telegram founder Pavel Durov arrested and charged 8) Should Durov have been arrested or fined? 9) NVIDIA's earnings are just okay --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  OpenAI is fundraising at a $100 billion valuation. Telegram CEO Pavel Durov has been arrested and charged in France. And Nvidia earnings have come in. They're impressive, but are they impressive enough to sustain the AI boom? All that and more coming up on a special Big Technology Podcast Friday edition, right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya

• 0:43Alex Kantrowitz?

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

• 1:27Alex Kantrowitz?

  our traditional cool-headed and nuanced format. We have a big week of news, including massive OpenAI fundraising news. We said it was coming, and it is on the way, along with Nvidia earnings, which we'll get to at the end of the show, and very big news in France, where the CEO of Telegram, Pavel Durov, has been arrested in connection with facilitating or having some terrible stuff happen on the platform, including child exploitative materials. So it's a hot-button issue in Silicon Valley, and we'll discuss whether it was merited or not. Joining me, as always, on Fridays is Ranjan Roy of Margins. Ranjan, great to see you, bright and early. Welcome to the show. Last weekend of summer. That's right. We're up bright and early.

• 2:11Alex Kantrowitz?

  We're making a road trip edition, so if you're on the way to somewhere, on the way back, or... You're just sitting at home and saying, where have all my friends gone to? This is the right show for you. Put it on, play it in full. One company that's gonna have a very busy Labor Day or busy summer is OpenAI. Now, we've been saying on the show for a while that some of the things they've been doing, like SearchGPT, have sort of been winking at the fact that they might be fundraising and they might be struggling to raise money. Well, this week, we actually got the news that that fundraising is indeed underway. It looks like it's gonna be about $100 billion in valuation. I've seen numbers up to 125. But what I find interesting here is a few things. First of all, it's taken them this long, right?

• 2:53Alex Kantrowitz?

  We, right around the time when Sam Altman was ousted, this was also the number they were talking about. There was also discussion that they were fundraising. So they've waited up until now to actually like have it leak out, which is, which is quite interesting. And then it's also not your traditional fundraise because OpenAI remains a nonprofit. And if you invest in OpenAI, you're really just entitled to a percentage of the profits they make, not a percentage of the company. It's very untraditional. So Ranjan, I want to turn it over to you. I'm curious what you make of this, the timing, the number, and whether it's actually a good investment to put money into OpenAI.

• 3:31Speaker 01

  I mean, this funding round has it all. It has Apple potentially investing, Nvidia looking at it. The, the numbers are just astounding at $100 billion for a private market round. And as you called it, SearchGPT, they started positioning themselves for this, another gigantic funding round. And also, this is at a time where we saw articles from Ed Zitron and others starting to question, could this ever be a profitable company? You know, what is that actual line to profitability? So I think, I think this is a very, very important funding round. And as you said, not from a purely financial perspective, but more from a big technology

• 4:15Speaker 01

  strategic perspective. If Apple is actually involved and Apple is now building a tighter connection with OpenAI, I think this could be very interesting. And obviously, when we see Kinsiri actually work in the upcoming iOS 18 results and, you know, I think this is gonna be. The relationship between OpenAI and other technology firms, this is potentially going to outline what it looks like for the next few years.

• 4:44Alex Kantrowitz?

  And so you mentioned it, that we do have Apple involved in this round, potentially. We also have Nvidia potentially involved in this round, and of course, Microsoft. So there's like four big players here. There's Apple, Nvidia, Microsoft, and Thrive, which is Josh Kushner's venture capital firm. And Thrive is expected to lead this round. Do you read anything into the fact that Microsoft has sort of gone from the big funder to one that might take not necessarily a backseat, but at least the the copilot seat on this one, to use one of their favorite phrases?

• 5:21Speaker 01

  Cheeky there, Alex. I think, well, first of all, I do. Thrive leading the round was very interesting to me because, you know, I haven't seen them making headlines necessarily in the past few years. And only from this announcement did I go back and look that they went from, it was only a billion under management a few years ago to now 14 billion under management, that they just raised a gigantic $5 billion fund last year. So clearly, they're ready to deploy it. And seeing the Kushners back in the news in some kind of capacity is always an interesting thing. But yeah, I think this is going to be, the Apple connection is the most important one because it's clear that Microsoft is no longer

• 6:06Speaker 01

  the investor and partner of OpenAI, but still does have more specific economic interest than any other company will ever be able to have with them. And all that was outlined in that early $10 billion round back in January 2023. So this company, it just becomes messier and more complicated and more unclear of what is the financial structure? What, this isn't even a traditional cap table. Who is investing and why? I don't know. I think, yeah, it's less clear with all of the news that came out than I think even before the headlines started to leak.

• 6:44Alex Kantrowitz?

  And here's my hot take on Microsoft's position in the funding, and I know nothing about this. I expect Microsoft to be of those four, the company that puts the least amount of money in, if all four go in. I think this is something that Microsoft understands that it needs to continue to invest in, to show adjacency to OpenAI, but is really working hard to build its own AI ecosystem and research house and product organization. And it sees that a lot of this has become commoditized. And therefore, it's not going to continue to put the amount of money that it did into OpenAI as it has in the past. Now, there's one other interesting thing that's happened here, which is that Thrive, right?

• 7:23Alex Kantrowitz?

  So Thrive Capital, they led the sort of, well, it's not really a funding. It's the buyout of employee shares at an $86 billion valuation last year. And now they're going to be, you know, they're said to be leading this one. And there's an item in the information that talks about how, this is from Corey Weinberg, "These inside rounds usually signal that smart investors are not banging down companies' doors to invest at that price. There are exceptions, of course. Thrive's doubling or doubling or tripling down on OpenAI has been raising eyebrows among competitors. The prospect of OpenAI raising billions or trillions more directly from sovereign

• 8:04Alex Kantrowitz?

  wealth funds in the Middle East may raise eyebrows even higher with an important constituency, the UN's government." So basically what Corey's saying is like, if you have something like a Thrive going in, basically against the grain, buying shares and then leading, you know, the next round, the indication is that the rest of Silicon Valley isn't so eager to put as much money into OpenAI as perhaps OpenAI is seeking. Is this a red flag here?

• 8:33Speaker 01

  I think it's definitely a red flag, especially the idea of, at a certain point, where do you get more money? When you get into numbers this astronomical, there's still only a somewhat finite capital base that could actually, you know, feed this continued need. And as it's, as he said, Middle Eastern sovereign wealth funds are one of those commonly associated funding sources. And with something sensitive like generative AI, that could be a problem. So I think, but, but the question around... You know, again, buying out employee shares rather than investing more in a company that is losing $5 billion is insane to me.

• 9:13Speaker 01

  Like, rather than just continued investment into products that can grow and will grow and will kind of be that source of revenue that will actually justify these insane valuations. So, yeah, I think it definitely should raise eyebrows. And where else do you go from here? I mean, again, $100 billion valuation as a private company. I think there's ByteDance is somewhere around there or was around there. There's only a very, Stripe is one of the only other ones that, and these are in ByteDance and Stripe, again, are companies with very, very mature revenue products and they're mature businesses, whereas OpenAI is still this crazy bet that does not have any clear

• 9:57Speaker 01

  path to actually becoming a great business. So, yeah, I think it should raise red flags.

• 10:02Alex Kantrowitz?

  Right, so here's a question for you then. Is this a good investment? Like, all right, you could say that Microsoft made a great investment in OpenAI back in the day when OpenAI was pioneering all these new techniques and released ChatGPT, started the generative AI wave. I think we can agree, great money spent by Microsoft. But then you look at some of the numbers, and you mentioned one of them, that are coming out around this funding round. So, first of all, the information has that OpenAI could lose up to $5 billion this year. This is based off of an information analysis. We also know that ChatGPT, they say the ChatGPT usage has doubled. So now this is the first official new number that we've gotten.

• 10:44Alex Kantrowitz?

  It opened, that ChatGPT is doing 200 million weekly active users. But we also know that OpenAI spent 100 million, actually, this might be good numbers. OpenAI spent more than 100 billion, million to build GPT-4. And this year, OpenAI said its revenue was 3.4 billion on an annualized basis. So, put that all together. I mean, it does seem like, wait, hold on a second. How are they losing $5 billion if GPT-4 only cost 100 million to build? Do you think that's all inference costs? Like, where are they losing this money? Or is it just training the next model?

• 11:24Speaker 01

  Yeah, I think, I mean, combination of the actual ongoing compute for every single ChatGPT query, especially for unpaid members of people like non-subscribers using ChatGPT, training the next model. I think it's, I mean, I don't think that's an unreasonable thing, again, around just the overall compute required to operate a service like this. I mean, every Dolly image you're creating, every, every API call. So, so I think that's, that's definitely not unreasonable. It is interesting to me, though, that, I mean, in terms of the way these funding announcements leak, I think is worth bringing up because one thing that happened that in the last few years, especially during COVID, especially

• 12:07Speaker 01

  with these kind of high-octane funding rounds, is this idea that the leak happens during the fundraising itself in order to sell, set that target valuation, that once the leak happens and they say $100 billion in everyone's mind, it's $100 billion. Whereas in the past, you know, the news was the funding is done and here's what it was done at. And a lot of the times, people protected the valuation of that fundraising round with all of their heart, like every banker involved, every VC involved would never give up the actual valuation. So I think it's clear that this game of trying to create signaling around

• 12:50Speaker 01

  where this, where these numbers are in order to drive interest at those numbers is still happening and I think is never a good sign.

• 12:58Alex Kantrowitz?

  Right. And also, one of the things that I've heard about OpenAI is that they're just not trying to sell anything at a profit now. So basically, they're trying to show that the engagement numbers are going up, that they're entrenched as far as every AI business. And if you're building, they want you building an OpenAI and they're not really putting profit at, at the forefront. But again, I think the main issue here is that you're only entitled to a certain percentage of OpenAI's profits. You don't even own part of the company. So like, let's say they convert and they become, you know, some sort of traditional structure and you've invested in this nonprofit and then they IPO, you don't even have a stake in that. Like that to me is like, why would you ever want to invest in that unless you're

• 13:40Alex Kantrowitz?

  trying to make this strategic bridge like Apple obviously is, like Microsoft has in the past. Maybe Nvidia has some interest there, but the thrive putting all this money in it and leading the round. I think is really it's it's an interesting business play. I don't see how it aligns with the traditional AI, sorry, the traditional VC investing unless what it's trying to do is say, hey, we have OpenAI in our portfolio company and it believes that AI is going to be big enough. That that will be sort of like this flagship investment that will attract others, but it's still a lot of money to pay for marketing.

• 14:17Speaker 01

  Well, no, you're right. This is this is the weirdest company in existence. The more we're digging into this, and I'm actually surprised that most of the reporting treats it like a traditional funding round. But remember, this is a company where the fundraising in the past, a lot of was in cloud credits. And then now even you see a lot of it is strategic considerations for an Apple. I mean, Apple can't give them cloud credits. Maybe they'll give them, I don't know, free iPhones or MacBooks or something else like. I mean, at every level, this is a company where nothing is normal. Nothing is standard or in terms of its structure and and we still know so little about

• 15:00Speaker 01

  exactly what are the terms of these different deals? What are the terms of whose financial interest lies where? Because again, even that that structure of what is it? It's like up until a certain percentage of profits that it still gets cast at a certain point. Yeah, exactly. Like we we know that from, I think, two years ago. So from any subsequent funding round, were there different stipulations? Were there some cloud credits? How much is cash? Yeah, there's remains a lot unknown about OpenAI and its business structure.

• 15:32Alex Kantrowitz?

  Do you think Meta is a threat to ChatGPT? I mean, we talked about in the past about how Mark Zuckerberg saw ChatGPT take off massive consumer product. He needs to build his own. Of course, he's built his own. And now Met they had they've released this Meta AI, which is built on top of their Lama model. And this week they put out some numbers with the information. They say it has at least 400 million monthly active users, which is double OpenAI's ChatGPT weekly active, which again is comparing apples to oranges, but there's just the the difference, the comparison, and 40 million daily active users. This is according to two current employees, but then Meta had an executive comment. So interesting media strategy there.

• 16:16Alex Kantrowitz?

  But 40 million daily active users of Meta AI, which is baked into like almost all of Meta's messaging products. Is that good? I would tend to think it's not.

• 16:28Speaker 01

  I think that's actually terrible. And it's clear that that number leaked because actually I got a I don't know. Do you do you follow Mark Zuckerberg on Instagram?

• 16:37Alex Kantrowitz?

  Yes.

• 16:37Speaker 01

  Because, yeah, he gets I get I got a broadcast channel message. I don't know if you know the broadcast channels is something Meta is really trying to push. The idea that you can have like one to many message push from for influencers and creators. And Zuckerberg is one of the more active ones. But basically, he was saying he sent a message saying that Lama is growing even faster than I expected. Almost 350 million downloads and a 10x jump in monthly usage since the start of the year. So he's pushing this message. And again, we need to separate out Lama from Meta AI. And Meta AI, I the only time I've used it is when I've accidentally ended up in it for with an Instagram search.

• 17:20Speaker 01

  And it actually it and it returns results that are worse because I want to actually search on Instagram. And instead, it gives me a more half baked generative AI response. So I am guessing that the Meta AI usage, and you can only imagine on Facebook and the average Facebook user ending up in some weird rabbit hole of generative AI accidentally. So I think the Meta AI side is probably being oversold a little bit.

• 17:50Speaker 01

  It's still certainly very well positioned when you can start properly banging it into consumer products, but I think Llama is the bigger threat to OpenAI. And especially, I mean, in the context of this giant funding, potential funding round, Llama is such a brilliant strategic move, and we've talked about it, to go open source and say, basically, we're not going to charge you for every API call. Here's the model hosted on your own compute and servers. I think that to the OpenAI business is a much, much bigger threat than Meta AI is to ChatGPT as a consumer product.

• 18:28Alex Kantrowitz?

  Yep, that totally makes sense, but it's also sort of goes to show that this stuff just still has like limited appeal, I think, to consumers. I think mostly because they're just overwhelmed, like regular people are just overwhelmed in terms of what do I do with this? Like, okay, you couldn't sort of speak with these agents and have like interesting conversations, but people just don't know where to go. And I think in most of them, including perplexity and ChatGPT, you're starting to see some of these like prompts that sort of push you towards different activities that you should try to sort of engage with within them. But I do love the one line from the information story. After it gives these new updated numbers and has like proud quotes from Meta executives,

• 19:10Alex Kantrowitz?

  it says, it's unclear how many people are using Meta AI unintentionally. I'm like, well, yeah. That's a pretty important caveat, wouldn't you say?

• 19:20Speaker 01

  As we said, I mean, and that's the only way I've used it, but I think we got it. We have to distinguish perplexity from Meta AI because perplexity is going after search and search is a function that we all know how to use and use in our daily lives all the time versus the Meta AI products, again.

• 19:40Speaker 01

  Have been jammed into where your people regularly do search and search on social platforms has become huge like TikTok. There's been endless coverage that it could be cutting into Google search itself and it's become the search engine for Gen Z. So I actually was more surprised because again, when someone searches on Instagram, especially when they're searching more for reels and other content like that, they want an output of a reel or a photo. They don't want a generative AI answer. So it's almost the most backwards way to try to release this kind of product to your consumer base. And I think it's actually bad for the users.

• 20:19Alex Kantrowitz?

  Yeah, it's really weird. Do you think that Meta AI and threads have kind of a similar feel to them, which is that you sort of get it having seen it work elsewhere, but it still just doesn't really work in the setting that they exist in?

• 20:35Speaker 01

  Well, no, the thing I wonder, and I think Zuckerberg is peaking right now and certainly like the days of just trying, you know, everyone going after him are a few years past, but I do wonder these kind of products at a company like that, do they believe they're successful? Are they still sitting there like high fiving each other saying threads is a massive success? Because these numbers, 400 million, 100, whatever threads is it now, 100, or I think they said 200 million monthly active. When you just jam it into a product, the three products that 3.2 billion people use every month, you can get those numbers easily, even with a bad

• 21:18Speaker 01

  product that is not actually working and will not grow. Even again, on Instagram, every fifth scroll, I get a row of threads that is trying to encourage me to link out to, which if I didn't know what it was, I could very accidentally click on those. So I do think that, yeah, I think it feels similar to threads in that it's, it's very easy to hit those numbers that seem really big without a product that is necessarily doing great. So I wonder how realistically they actually do evaluate these internally.

• 21:53Alex Kantrowitz?

  Oh, I'm sure they view it with like real science and they have like so many metrics that we've never heard of before, looking at like the momentum, the acceleration, the retention, all these things. But I do think that they also, like everybody in Silicon Valley, know that you need to hype something a little bit before it's real to make it real, because this is just like network effects on both of these. With threads, it's like you need people to be posting and then interesting stuff circulating in the timeline. And with Meta AI, you need people to have good experiences with it so that it spreads with word of mouth. And like, you're like calling Meta AI into a group chat, which you can do.

• 22:31Speaker 01

  No, no, I disagree. I think it's actually the opposite, because I think Meta AI does not need network effects, it just needs good output. Because again, the word of mouth, this was cool, this was interesting, is almost not needed. It was needed for ChatGPT, but for Meta, just make it good, make it actually make sense in the product. And when you have that, you know, committed user base, that's all you need to do. So I think actually versus threads, yeah, that pure network effect type product. But I think, again, Meta AI has become only more confusing for me as it's been developed. But the llama strategy, I

• 23:12Speaker 01

  think, is vicious in terms of the whole landscape, the way Zuckerberg and the company have unleashed that on the whole ecosystem.

• 23:23Alex Kantrowitz?

  Right. So, look, I think we could both agree that there's still a lot of time before we can both believe that AI for consumers is going to work. But it does seem like every week, there's a new headline about how it's making inroads in enterprise. And one of the stories that you picked out was how, and within Amazon, there's a belief now that you're really not going to need to code anymore pretty soon. So you want to talk a little bit more about that?

• 23:48Speaker 01

  Yeah, so Amazon's website, the AWS CEO Matt Garman, there's a recording that I believe was leaked in terms of like an internal chat. But he said, if you go for 24 months from now, or some amount of time, I can't exactly predict where it is. It's possible that most developers are not coding. Coding is just kind of the language that we talk to computers and it's not necessarily the skill in and of itself. I think that is exactly correct. A couple of months ago, we talked about my Claude coding journey, where literally went and built a React app and deployed it to GitHub pages. And these are things that I don't do and I don't know how to do.

• 24:33Speaker 01

  But just talking and in conversation using natural language, was able to build a small app experience for the first time in my life. And that is exactly it is that coding was always just a way to translate communication to computers. So now, if you can actually just speak in natural language to computers, the actual coding side of it, you don't need to be able to do. And I don't think this is a, it's interesting because there's a few different ways people approach this. It's either coding is now like developers are going to lose their jobs. Or then you have the opposite, more optimistic take. Satya Nadella is saying, now we're going to have 1 billion developers.

• 25:17Speaker 01

  And I actually think that's the more correct take. The idea that building software to actually solve problems, there's going to be, this is going to now be accessible to so many more people. But that role of a traditional coder that just creates code is going to significantly change.

• 25:37Alex Kantrowitz?

  Did you use the artifacts function on Claude to build the app that you're typing?

• 25:40Speaker 01

  Yeah, exactly. I mean, it's insane. Like you literally, I'm like, wait, actually, you're doing this wrong. Can you just change this? And then it shows the code being generated and then it shows the output in the window to the right screen. It's a split screen. I mean, it was incredible to be able to see it, see the code being generated, see the app being built just by writing sentences as though you're talking to a developer friend who's doing this for you.

• 26:11Alex Kantrowitz?

  Yeah, it's interesting. It's like, we got the iPhone because we had the BlackBerry first, right? Like, I mean, maybe not a direct causality thing, but like, you get what I'm saying. Like, smartphones, the first use case was enterprise, then we went to consumer. And maybe we're gonna have a similar thing with AI, where it's just can take a little bit longer to figure out the perfect consumer use case first, because with business stuff and with enterprise stuff, you can, you can find a lot of broken things to fix before the obvious example comes through in consumer.

• 26:45Speaker 01

  I still, I disagree with that a bit, because I think businesses, the hype is there, but the actual, like, getting things operational is still incredibly difficult, whereas, it's funny, everyone I know now is using ChatGPT or some other equivalent, and like, not the most, like, hardcore tech-forward friends. It's getting more and more incorporated just into people's daily lives, especially non-native English speakers, for any kind of writing output are using it, everyone I know. So it's become, I do think it's become incredibly commonplace, and it's just not one of those things. It's almost that people are embarrassed

• 27:29Speaker 01

  when their output is actually from a chatbot, but I think, I don't know, I've seen it much, much more ingrained into just every day. I don't want even to say workflows, because it's just life, but in terms of people just doing stuff day to day. So I think the consumer adoption and use case side of it, aside from Meta AI jamming it into Instagram, is actually there.

• 27:55Alex Kantrowitz?

  But don't you think that you're then talking about a skewed sample? Because we only have 200 million weekly active users of ChatGPT, or is that number bigger than I'm giving you credit for?

• 28:05Speaker 01

  I thought you were gonna be talking about weekly listeners to the Big Technology Podcast.

• 28:09Alex Kantrowitz?

  Well, we know that we're mainstream, for sure.

• 28:11Speaker 01

  Of course.

• 28:14Speaker 01

  Well, no, that's the thing. But so, yes, it's skewed, I'm sure, in my my network a bit towards people who are in that 200 million monthly active user or weekly active user cohort. I recognize this. I'm sure for big technology podcast listeners, we everyone is probably skewing into that that cohort as well. But it's one of those things that it's gone far past only early adopters. We're way, way past the early adopter phase. And actually, I think one of the most interesting things to me is in the latest Chrome update, you can now search from you can now interact with Gemini directly from the input bar.

• 28:57Speaker 01

  And I remember Chrome, one of the most powerful things Google did, and which probably is relevant in the whole antitrust conversation is by pushing Chrome to the whole world and then creating the behavior that you no longer had to go to google.com, but you could just type your search query directly into the input bar instead of just only typing in a web address in there, I think was one of the most powerful ways to get people searching even more. So if every single Chrome user starts almost by default using Gemini in their search bar in the search bar of the browser, I think that opens it up to make it even more mainstream.

• 29:39Alex Kantrowitz?

  Right. And I mean, there's an interesting part of that story, which is that Google saw what Microsoft was going to do because the when Google built Chrome, the predominant browser at the time was Internet Explorer owned by Microsoft. And Google was like, oh, they're going to build their own search engine. It's inevitable because this is the space. And that's why they initially designed this toolbar for Internet Explorer and then just went, All right, we got to do a full blown browser as a defensive move. So again, like having Chrome leaves Google in a pretty good position moving forward if they're going to try to fend off challenges from, let's say, perplexity, even though it might take a while, or the chat GPTs.

• 30:20Speaker 01

  Yeah, actually, to go back into a little bit of tech history, Internet Explorer, I remember learning about this recently, was 94% market share in 2004. 94%. They owned the entire browser market. Chrome did not exist. Netscape was dead. And you're Google, and that's exactly it, that the browser was the battleground. But I wonder, is the browser... So now, it is interesting, because I don't think they even... I just happened to notice in the new Chrome update, that Gemini, you can now say, like, chat with Gemini, or type in just Gemini. They're not making a big push on it. What are the next big strategic moves? And actually, I think

• 31:03Speaker 01

  the equivalent to me of Google launching Chrome and winning on search because of things like that, and moves, strategic moves like that. I mean, if Siri gets better, the voice assistance built on phones. I still think that's where... Keep dreaming, bro. Hold on. I am not promising. I am recognizing, I'm hoping. But I've been thinking a lot about, and we had Alexa, and Amazon Echoes in the house. Now I have HomePods. But natural language is how these models work and how you interact with them. And the most natural way to do that is with voice. I've even seen myself, or even with other people I've been

• 31:47Speaker 01

  kind of working with on these kind of projects, when you're typing in a prompt, you overthink it, you probably do it more ineffectively because you're trying to think through it, versus when someone is just talking, that is the way that these models respond best. So I actually think, and that's why, I mean, OpenAI was smart with the whole push towards voice, and for better or for worse, with the whole Scarlett Johansson issue. They've recognized that voice is going to be one of the primary modes of interaction with these models. So the phone seems to be the most natural place. Maybe it's smart speakers, but I think there's going to be some kind of like... Thing we look back at 20 years from now, the way we can with Chrome and Search,

• 32:30Speaker 01

  that will be that move by one of these companies.

• 32:35Alex Kantrowitz?

  Yeah, no, I really like that idea. I think that makes a ton of sense. Okay. We should talk a little bit about Pavel Durov, or a bunch about him, the CEO of Telegram, or Telegram founder, who has been arrested and charged in France for a bunch of different things, which we'll talk about right after this. So more on Pavel Durov and Nvidia earnings coming up after the break. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Copilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data, and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what Avpoint does. For 25 years, they've been

• 33:19Alex Kantrowitz?

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• 34:01Alex Kantrowitz?

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• 34:42Alex Kantrowitz?

  to lock it down before a threat reaches their front door. That's ironwall.com/bigtechnology. Learn how to stop online threats before they become real world attacks. The link's in the show notes. And we're back here on Big Technology Podcast Friday Edition. So it's been a very interesting week with the arrest of the Telegram founder Pavel Durov. The French authorities arrested him for a host of crimes, says The Wall Street Journal, including, and this is some really bad stuff, complicity in distributing child pornography, illegal drugs, and hacking software on the messaging app. And they call it a stunning blow for an entrepreneur who became

• 35:22Alex Kantrowitz?

  a hero for internet libertarians over the past decades, over the past decade. The authorities also charged Durov with refusing to cooperate with investigations into illegal activity on Telegram. And basically, the prosecutor said that he's been in almost complete absence of response from Telegram to judicial demands. So this has sparked a big discussion online in terms of like the, there's the free speech libertarians on one side who believe Durov should never have been arrested, not have been charged. And then there's a bunch of other folks on the other side who say this is a merited arrest. And then many folks in

• 36:04Alex Kantrowitz?

  the middle trying to figure out what to, what to make of it because the precedent of arresting internet entrepreneurs for what goes on on their platforms is tough. There's so much that goes on on these massive, massive platforms that it's tough for them to keep their finger on the pulse of all of it. However, they should, I think, at least be making an attempt. And it was clear that Telegram was not. So Rajan, you've been following the story. What's your read on what happened?

• 36:30Speaker 01

  Yeah, I think this is very important in terms of

• 36:35Speaker 01

  Responsibility and accountability for any owner of a platform. Because Telegram was by far the most extreme in terms of not even responding to child safety watchdogs who said that they could not even get a hold of anyone or a message or response when they presented clear cases of child pornography being distributed or child exploitation channels that and human trafficking and drug dealing and all these kinds of things like and Telegram, I believe, has reportedly thirty employees with nine hundred million odd users. So, I mean, obviously, these kinds of things, the the defense has

• 37:16Speaker 01

  always been, it's just a platform, we're not responsible for what's on the platform. But I think every other, even the Facebooks of the world, even probably the Twitters of the world, make some effort, will respond to some email when very, very serious allegations are made. And it's clear Telegram has taken the approach that they just won't. I think there it it will set a very important precedent. And I think it's it's it's understandable why more libertarian leaning folks are making a big deal about it. Because I think first, the last twenty years of the development of the Internet, whether it's hiding under section two thirty in the US, the idea that you are accountable for what ends up on the

• 38:01Speaker 01

  platform that you build is something everyone has tried to shy away from. And this can be a very, very clear case where you are responsible for what is on your platform.

• 38:12Alex Kantrowitz?

  Yeah, I think that like this idea that everybody is a, you know, that that free speech libertarianism on the Internet is widespread and complete and absolute is wrong. Like, nobody would be in favor of allowing somebody to set up a site that's like a child sexual exploitative material trading site. Like, no one would be in favor of that. And that should be illegal. It is illegal, right? So you're going to get your stuff taken down. You're going to get in trouble if you set up a site like that. Now, what if that type of stuff is only a portion of your site? Well, I think there's still a belief. If you believe that you shouldn't be able to set up the first site,

• 38:53Alex Kantrowitz?

  then you also believe that you shouldn't be able to have that second part of your broader site. And so therefore, like, I think that there's this broad agreement among everyone that this stuff has no place on the internet. I think the worry is maybe you're going to get to a point where the government is going to start influencing more content decisions than like the very clear ones that everybody agrees on. And I think that's interesting to me because could there be spillover to other platforms? I think that's a worthy question to debate. And on that note, doesn't the arrest of Durov seem extreme to you? As opposed to doing things that have been done in the past,

• 39:38Alex Kantrowitz?

  such as a fine? Or even if your country has a problem with a website or an app that's not based in your country, why don't you just shut it down in the country? So many countries have done this. So I'm curious what you think about the tactics.

• 39:53Speaker 01

  I think a fine we recognize will not be effective unless said fine is, you know, at such a level that it will impact the person. And I actually do think one of the really interesting parts of this story is Pavel Durov himself, who, if anyone had followed from VKontakte, I never know how to pronounce it, but the Russian-

• 40:15Alex Kantrowitz?

  We just call it VK.

• 40:16Speaker 01

  VK, Russian Facebook, that he made some money on, I believe, like a couple billion. But his net worth now is, I think it was estimated, I saw like $15.2 billion. And I think that feeds into the whole narrative around this, how the public will perceive this and how it will push against it. Because when you create such astonishing levels of wealth, and you're able to do that because you can run a platform with only 30 engineers and 900 million users, because you actually have zero moderation, which then leads to child exploitative channels. And, you know, like, and you're very clearly, you're making money.

• 41:01Speaker 01

  By avoiding responsibility and accountability. And then you get into, I mean, just the kind of optics of the whole thing. I don't know if you saw, I mean, he is a buff dude who's doing posting videos of himself doing.

• 41:14Alex Kantrowitz?

  He is so jacked. I couldn't believe it. Some of the Wall Street Journal was like, they were saying he took some pictures with his shirt off on Instagram and I was like, oh, okay, so what? And then I went to his Instagram and I was like, this guy does not build apps. I, I mean, he's not just in good shape. Okay. He is in perfect shape. This guy is a beast.

• 41:39Speaker 01

  That, that's what makes it actually relevant to this story. Because, and here's why, here's why, hear me out. I see Alex looking a little.

• 41:47Alex Kantrowitz?

  You got us into this. I wanted to talk about it.

• 41:49Speaker 01

  Well, no, well, it's just not, he's doing cold plunges. He's got this like insta, as Instagram model girlfriend as it gets, who also was giving away their location by posting everywhere they go. So like, I mean, he is living this kind of like, you know, movie star lifestyle that feeds into the idea that that is funded by the fact that he does not have to actually run a business that's accountable for horrible things happening on that business. And so that's why it is relevant and like in the public eye and in terms of how things are perceived.

• 42:30Speaker 01

  When you are jacked, global jet setting tech billionaire because your platform allows child pornography on it. I think that's going to be a problem in the public eye. And I think, I mean, maybe that's why the French authorities were able to choose him for this. Cause and kind of targeted him on this because he's actually, if you're ever going to try to set a precedent and pursue a case, this guy is definitely not going to be publicly sympathetic other than to a very, very few strongly libertarian tech leaders that we saw posting about it.

• 43:10Alex Kantrowitz?

  So you're saying that he was able to get this ripped and listeners, just for your understanding, this guy is, the body is crazy. He has like an eight pack perfect biceps. So you're saying this is because he doesn't do content moderation as opposed to he's been using anthropic clod artifacts.

• 43:29Speaker 01

  I think if it's because he does not do content moderate. I mean, no, but in reality, again, it's relevant. It's because he does not have to spend time building an accountable platform that any other business leader would need to do in the same way.

• 43:45Alex Kantrowitz?

  No, jokes aside, it's a great point and it's, it is like, you know, you have a responsibility when you build a platform like that to make sure that that stuff does not appear on your platform. You cannot have people trading pictures of, of, you know, sexually exploited kids on your platform and do nothing about it. And the level of reckless disregard for that Telegram had is, is crazy and it's come out in the reporting this week. This is from platformer Telegram stands out for the way it simply ignores police altogether while hosting illegal activity that anyone can see in its public channels. Child safety watchdogs can't get a hold of anyone there, even in cases of ongoing abuse of children.

• 44:29Alex Kantrowitz?

  And makers of apps that create non-consensual nude images of people advertise openly in Telegram's public channels where one person said that they found 11 channels with great ease, including one with 300,000 subscribers. So yes, there should be consequences for that. Let me just come back to it though. Again, thinking about this sort of I don't know, I guess you, you have to give like founders a little bit of latitude. You like, don't want them to like start over censoring out of fear that they might be arrested. So why not just shut down the app in France?

• 45:08Speaker 01

  Yeah, but that's what you can either find, you can either shut down or if it reaches such extreme levels, people are accountable. I mean, this, this is one thing that the, even during the financial crisis, I remember. Executives not actually being put through the criminal system was something that everyone was angry about and led to Occupy Wall Street and is something that's commonly like

• 45:31Alex Kantrowitz?

  That's a good point.

• 45:32Speaker 01

  Like in any other area of business, if you do something a bit untoward, there can certainly be criminal ramifications around it. And it's not, I mean, it's, so this seems to me like a pretty extreme level of problematic behavior and definitely criminal, borderline criminal behavior. And again, I think it goes back to being important, like, like for 8chan, there the founder is not a globe trotting billionaire, or maybe, maybe they are.

• 46:05Alex Kantrowitz?

  No, no, they're not. There's a great documentary about 8chan on HBO about 8chan and QAnon. And even the founders of 8chan are believing in content moderation and are pissed of what they created.

• 46:19Speaker 01

  Okay, see, even they are. So, so I think that this question around accountability and platforms, it's something that's been going on since, I mean, certainly the COVID days and long before that, even the election of 2016. So, and it's an important one that certainly has not resolved itself, especially globally. Like, on your platform, what are you responsible, especially as apps like Telegram become the default mode of communication in a number of countries, the same way WhatsApp has been all around the world. And Meta and Zuckerberg have played this reasonably well over the, since 2016, I think,

• 47:00Speaker 01

  like in terms of at least paying some attention, making some inroads, explaining, we have hired X number of content moderators and built systems and blocked 100 million queries or whatever, posts or whatever it is, like, I mean, I think they have done something, whether it's enough is another question, but, but I think to not do anything. Sets a horrible precedent, a much worse precedent than a founder getting arrested.

• 47:29Alex Kantrowitz?

  Yeah, I agree. And it's also interesting because even with Twitter, with Elon Musk, like Mr. Hands Off himself, Musk has said that if something is illegal on Twitter, they're going to remove it. So this isn't like, we talk about content moderation, we're not like getting into the broader, like, should like, you know, Hunter Biden's laptop be censored, right? Like, because obviously, like, that went overboard. This is more like, very clearly, like, illegal activity should not be on these platforms. Everybody agrees on it, from Elon Musk to Mark Zuckerberg, et cetera, et cetera. And Pavel Durov didn't, and allowed some really nasty stuff to fester on that platform, and he's, he's going to pay a price for it. Now, there's, there's one thing that's interesting,

• 48:11Alex Kantrowitz?

  that's worth talking about as well on this, which has been Russia's reaction here. So I'm just going to read a little bit of the reporting here. So Durov left Russia in 2014 and went to Dubai, and he had complained about pressure from the Kremlin to crack down on its opponents' use of VK and to give encrypted data of users. But now that he's been arrested in France, the Russian officials who have used, Russia has used Telegram as like, a very important propaganda tool around the Ukraine war. They've reacted angrily to his arrest. The Foreign Minister

• 48:51Alex Kantrowitz?

  said they demanded consular access to Durov, and then the Kremlin spokesperson Dmitry Peskov said the case against Durov could be considered political and a direct attempt to restrict the freedom of communication if France doesn't present serious evidence of his guilt. So what do you think is going on with his relationship with Russia? And they're like, very interest, very serious interest in, you know, sort of putting pressure on France to stop it?

• 49:23Speaker 01

  No, no, it's interesting because I think it was 2014. He left Russia almost as an anti Kremlin hero that I think they forced the sale of VK at the time away from him and he did not potentially get as much money as he could have and he kind of was an anti Kremlin figurehead. So he, it definitely sits in a weird way, weird place, just in terms of geopolitics. And I mean, I think we still know so little about what's, I'm sure, behind the scenes. You have the criminal side of it and CSAM and whatever other bad straightforward thing or bad things are happening on the platform.

• 50:06Speaker 01

  But I have to imagine there's a many, many more layers to the onion here in terms of like what exactly has happened on the platform, what information could potentially be available? Because actually, one thing we did not address is the end to end encryption of Telegram, supposedly from a number of things I read, is not as strong and secure as Signal or even WhatsApp. And that a lot of it was almost kind of smoke and mirrors. So suddenly you imagine if all of the messages that are being exchanged that people think are completely secure could actually be accessible by authorities, that has to have people a bit scared and scrambling.

• 50:51Alex Kantrowitz?

  Yeah, it's a very interesting saga and I think we're gonna see more and more of this play out over time and it will escalate globally between these two governments. And it is interesting, I think also, that Russians have held citizens from the West for their speech and their sort of activities online. And now the West is holding a Russian guy and Russia's mad. So we'll see what happens. I don't think it's a tit for tat type of thing, but it adds a wrinkle for sure. Okay, so before we head out, we should talk about Nvidia's earnings this week. I mean, people were saying this is the most anticipated earnings in years. I didn't really think that, but they did well. They doubled.

• 51:33Alex Kantrowitz?

  Their sales and profit over the most recent quarter. So they didn't crush their guidance is getting a lot closer. So their performance is getting a lot closer to their guidance. So this quarter, they're expecting thirty two point five billion of revenue, which is two percent ahead of what Wall Street was is expecting. And they, in the same period last year, they beat the consensus by twenty eight percent. They also have narrowing margins because this next generation Blackwell chip is a little bit more expensive to produce and the design is very intricate, which we will get into. Do we think that it's just, I mean, I think it's clearly impossible for Nvidia to sustain the level of growth

• 52:17Alex Kantrowitz?

  that it reached. And so, okay, they've obviously, they're obviously hitting that. Is there anything else that we should be concerned about here? Or what do you think about the results that Nvidia has posted?

• 52:31Speaker 01

  And I think it's simply starting to normalize a bit in terms of expectations. And as you said, it's not, it's not only not bad, it's still good. But everything has been not just great, but insane for the past few quarters. So it starts to make the company again, just a, a very strong, very good company that is the most important technology company in the world that is positioned incredibly well. But the numbers behind it and the expectations valuation had to slow down at some point. And I mean, again, the optimistic take would be it's actually good for the company to

• 53:15Speaker 01

  almost calm down a little bit and for the stock to calm down because Jensen Huang signing that woman's chest. Did you see the Nvidia watch party in Midtown Manhattan?

• 53:28Alex Kantrowitz?

  Yes, I did.

• 53:29Speaker 01

  The attention. So for, someone had posted, let's have a watch party at a bar for Nvidia earnings. This was kind of ridiculous, I felt, because like it got every financial journalist in New York started. Tweeting about it. I think some of them showed up. And then in the end, you see some pictures of like, I think, like 20, 30 people sitting with laptops and beers at a midtown Manhattan bar watching the earnings. But, but the hype cycle overall has gotten to such a ridiculous place when everyone and their grandmother is talking about Nvidia. So I think it's a strong company. It's not going anywhere. Things might just calm down a little bit, and that's good.

• 54:09Alex Kantrowitz?

  You don't think we should have a big technology Nvidia earnings watch party for the next one?

• 54:13Speaker 01

  Let's pick, let's pick a more under the radar company for the earnings watch.

• 54:18Alex Kantrowitz?

  Super micro. Let's get everybody together for super micro.

• 54:23Alex Kantrowitz?

  Okay, one last thing on Nvidia, which is interesting that so their margins are shrinking and it's partly due to these Blackwell chips. So this is from the Wall Street Journal, which has been excellent on Nvidia this week.

• 54:37Alex Kantrowitz?

  They say that the Blackwell chips require a significant departure in design instead of one big piece of silicon. Blackwell, Blackwell consists of two advanced new Nvidia processors and numerous memory components joined in a single delicate mesh of silicon, metal and plastic. And basically, any significant defect can render a $40,000 Blackwell chip useless and damage the overall manufacturing yield, which is a critical measurement of the usable percentage of output. We already know that a design malfunction has caused at least a three month delay in these Blackwell chips. Is the, is it sort of the end of the easy pickings with Nvidia now that they're going to these much more

• 55:22Alex Kantrowitz?

  intricate chips that again, one defect and there's 40 grand out the, out the window?

• 55:28Speaker 01

  I don't think it's the, the end of the easy money or the easy pickings because, because whatever works out of these innovations are going to drive the next wave of growth and they have to find that next innovation. So I think this is how the company's always operated. And I think it's exciting. I think it's like, I mean, in a, in some way it is good that the company, this energy behind Nvidia and maybe even the 20 odd people at the midtown Manhattan earnings watch party, bringing some more energy to the company. It allows for them to keep investing in this kind of innovation and some of these will be the breakthrough that, you know, drive the next wave of. Growth.

• 56:09Alex Kantrowitz?

  Definitely. And of course, we should state that Nvidia had 75% margins and it just continued to expect and continues to expect that type of margin coming through. So it's not like its margins are shrinking in any dramatic way. And I don't know, these chips, they are, if they are what Nvidia advertises, they're going to sell a lot of them. So I think, I think we will look across the way from our Super Micro watch party at the Nvidia watch party and drink our beers with sadness at how much fun they're having over there.

• 56:47Speaker 01

  I think it's Super Micro, our Super Micro watch party will be having a great time. I kind of like this idea, though. Under the radar earnings parties at bars, just to build some hype for the less appreciated stocks.

• 57:02Alex Kantrowitz?

  I love it. Let's, let's get drunk and watch US Steel turn in, you know, two cents above expectation. I'm into it.

• 57:09Speaker 01

  And new dividend and everyone cheers.

• 57:12Alex Kantrowitz?

  Dude.

• 57:13Speaker 01

  Raise the dividend.

• 57:14Alex Kantrowitz?

  New dividend, round of shots on the bar on us. Yeah.

• 57:20Alex Kantrowitz?

  Well, great speaking with you as always, Ranjan. We'll be back next week. And on Wednesday, I have Yohan Hari coming in. He wrote a great book about Ozempic, which has so much connection to our economy and basically the stock market and our bodies. And I think it's a fascinating story. So I'm glad to have some coverage of Ozempic coming up next week. Ranjan, great to see you. Thanks so much for being here.

• 57:45Speaker 01

  All right. See you next week.

• 57:47Alex Kantrowitz?

  See you next week and safe travels to everybody on this holiday weekend. All right. See you next time on Big Technology Podcast.

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