The Case Against SBF, Temu vs. Amazon, AI Therapy

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) Plans to attend the SBF Trial 2) Welcome to Compound and Friends listeners 3) The legal case against SBF 4) The environment in the court 5) How SBF might win? 6) Michael Lewis update 6) Over 40% of Amazon users now use Temu 7) Blue Apron, once valued at $2 billion, sold for $103 million 8) Anthropic's potential $2 billion raise from Google 9) Should we use AI for therapy 10) Brief update on Twitter numbers. --- 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/ 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?

  SBF is in New York and on trial. New data shows Timu is gaining steam on Amazon quickly. And would you use AI technology as your therapist? Coming up right after this. This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way.

• 0:44Alex Kantrowitz?

  You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razor were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:15Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool-headed and nuanced format. We have so much to talk about with you today, including the early rumblings of the SBF trial. He's here in New York and the arguments are getting going. And it's actually seems like quite a lively courtroom. And then we'll get to other stuff regarding Temu, AI therapy, some stuff with Anthropic, and even maybe some Twitter news. It's going to be quick. Right after this, Ronjohn and I are going to hop over to another link and we're going to talk to Chris Leonard, who wrote The Lords of Easy Money. Fascinating book. That interview is going to air on Wednesday, but for now, we're here to break down the week's news. Ronjohn, welcome to the show.

• 1:54Speaker 01

  I believe I am currently in downtown Manhattan in New York, and I think SBF is maybe A quarter mile from me, so I'm pretty excited right now.

• 2:04Alex Kantrowitz?

  So this gets at a question I wanted to ask you to start, right? We are so close to this court case. Are you not tempted at all to go? I mean, it's open to the public.

• 2:13Speaker 01

  It is, and I will not deny I was tempted to go over there. But then I was seeing on Twitter, a bunch of people who actually follow this very closely, were apparently stuck in an overflow room and not able to get in. So I'll just, I'll just follow it along with, with what Michael Lewis is saying, wherever he is.

• 2:32Alex Kantrowitz?

  So I'll tell you this, there's a more than 50% chance that I'm going to go next week. Caroline Ellison is supposed to be testifying. This is, of course, the head of Alameda Research and the former girlfriend of SBF. And I will be going. I'm pretty sure I'm going to go. The overflow is starting to become diminished because they're allowing people inside now that some of the government officials are out. And apparently the press is supposed to be able to make it in. So hopefully next week I'll have a report back on what it's actually like in the courtroom.

• 3:02Speaker 01

  All right, maybe I'll see you over there then. This could be fun.

• 3:05Alex Kantrowitz?

  That's right. All right, let's do.

• 3:10Alex Kantrowitz?

  Also, before we get, so we're going to talk first about this SBF trial and the fact that he's being prosecuted here in New York. I want to quickly welcome anybody who is over here from the Compound and Friends. I was on the Compound and Friends on Friday with Josh Brown and Michael Batnick. It's one of my favorite podcasts, definitely my favorite financial podcast. And I had a great time talking with the guys over there. If you're a big technology listener, I would say, go ahead and check it out. And if you're here trying out the podcast, Ranjan and I break down the news every week on Friday, and then Wednesday we do flagship interviews. You're actually going to hear us both Wednesday, both Friday and Wednesday, because we're going to do this interview with Chris Leonard. But anyway, very grateful to have you here and thanks for giving Big Technology Podcast a try. So let's talk about the case against SBF.

• 3:54Alex Kantrowitz?

  So this is from the Wall Street Journal. The long awaited criminal trial of FTX founder Sam Bankman Fried kicked off Wednesday with the defense and prosecution clashing over whether the fallen crypto leader was a deeply flawed company manager or the architect of one of the biggest. Financial frauds in US history. So the prosecution is basically arguing that he stole 10 billion from thousands of FTX customers while defrauding lenders and investors from the company's sister hedge fund, which is Alameda Research, and that he stole the money to buy lavish beachfront property in the Bahamas, make political donations to curry influence in Washington, and cover risky bets by Alameda.

• 4:34Alex Kantrowitz?

  Alameda, the second half of this, right, the defense is saying that he is being painted, that SBF is, Sam Bankman Fried is being painted as a cartoonish villain. And in reality, he's a math nerd who doesn't drink or party and acted in good faith, building this crypto exchange. And, you know, he's a little bit of all over the place and the lawyer says that as a result, some things got overlooked. I mean, some things is doing a lot of work there. Ron, John, how do you read this case? What do you think is going to happen here?

• 5:03Speaker 01

  Okay, so first of all, the way the defense has already started this idea, math nerd who didn't drink or party. I've written about this previously. I cannot stand this defense or this idea that if he drank or partied somehow, this would make it any different. This is a very clear cut case. Alameda and FTX were completely intertwined when they were supposed to be separated. You have an exchange that's supposed to be a neutral place where anyone has equal access to transact cryptocurrency. And then you have a crypto hedge fund. The idea that they were ever separated or distinct was always kind of ridiculous anyways. But to me, the most interesting part of this, and I will go straight to Michael Lewis on

• 5:45Speaker 01

  this because I have to, and we had talked about this a few weeks ago.

• 5:49Alex Kantrowitz?

  We called that, by the way. We spent weeks before this whole thing happened. We were here talking about Michael Lewis and Walter Isaacson were going to get a lot of egg on their face. Lo and behold, that egg is there.

• 6:00Speaker 01

  Walter Isaacson, you knew the egg was coming. I was, we both were hoping what Michael Lewis did not go down this path, and he completely went down this path. And what I don't understand is, so, and this is, I think, central to the entire case. Michael Lewis is like, well, there was this great business FTX that is generating profits. It's not a Ponzi scheme. And then unfortunately, Alameda Research, this hedge fund, which was connected to it, maybe in a little way, got run over. It got, you know, Binance CZ came after them, and then there was a run on the bank. And then it was just, you know, out of their control, and it was just the wildness of cryptocurrency. That is absolutely not the case. And I'd actually written about this a while back.

• 6:44Speaker 01

  What happens here is you have FTX as a marketplace, as an exchange that makes markets in any kind of wild cryptocurrency you want. And then what Alameda Research would do is actually act as the market maker. When I come in and I say, I want to buy or sell some random coin, Alameda Research would take the other side and do it at a good price, a better price than Binance or any other exchange. And it'd be willing to take the loss and show tight spreads, which is the hallmark of a good market maker and is what makes, attracts people to an exchange. The two were so intertwined about what made either one work that you can't differentiate them at all. And the idea that Michael Lewis is saying, like FTX is never an exchange if Alameda does not exist.

• 7:29Speaker 01

  And I can't believe that he does not recognize that, given he wrote a book on exchanges with flash boys.

• 7:35Alex Kantrowitz?

  Right. And it's, I mean, we can talk a little bit about Michael Lewis, but, but just going into like the, the details of the case, like the defense of Sam Bankman Fried looks even more ridiculous with the details that are starting to come out now. And this is from the Wall Street Journal. We talked a little bit about this on the compound, but it's worth bringing up here. FTX employees found Alameda's secret backdoor months before the collapse. And this is a story where you basically had employees seeing that the crime was able to go on and baked into the code. And they've brought it up to the, some of the highest levels of FTX. And not only did nothing happen, but the people who blew the whistle got fired. And this is how crazy this stuff is. So this is from again, from the journal.

• 8:18Alex Kantrowitz?

  Court filings have revealed a line buried deep in FTX code allowed Alameda to have a negative balance of as much as 65 billion on the exchange. I mean, 65 billion, like that stuff doesn't happen by accident. And, you know, this defense that, you know, as a result, some things got overlooked. I mean, come on, like I'm totally with you. The, the defense is going to have an impossible time trying to exonerate SBF because all the factors are there. I mean, it's in the code of the exchange that this crime was able to be committed and low and behold, they used.

• 8:54Speaker 01

  And not only that, again, the idea that FTX is down the hall or in the same room on a different desk where Sam Bankman-Fried is, but he has nothing to do with Alameda Research, which is sitting on the other desk and it's Caroline Ellison, to me was always just incredibly ridiculous. And to me, still, the thing that always blew my mind is, how did they lose money? When you own both sides of the trade, when you own the exchange and the hedge fund side of it, Alameda could see what every other trader was doing at any time. They had so much information about the entire market and of a lot of illiquid markets. I

• 9:34Speaker 01

  think, to me, not only did he commit all types of fraud, wire fraud, securities fraud, commodities fraud, they were also pretty bad traders as well on this.

• 9:45Alex Kantrowitz?

  Well, the interesting thing about this case is we're going to start to learn how a lot of this stuff went down because I have a whole category of people I'm keeping an eye on, who I call the flippers, right? There are people who are deep within FTX and they're going to be witnesses for the prosecutions. They've pled guilty to one or many counts and are basically there to talk about exactly how this went down. I mean, here, this is one from FTX co-founder Gary Wang. This went down today, which is Friday. Okay, so the prosecution says, "Did you commit financial crimes while working at FTX?" He says, "Yes." "What type of crimes did you commit? Wire fraud, securities fraud, and commodities fraud. Did you commit those crimes by yourself or with other people?" "With other people."

• 10:29Alex Kantrowitz?

  "Who were the main people you committed these crimes with?" "Sam Bankman-Fried, Nishad Singh, and Caroline Ellison." I mean, there's going to be just a conga line of people admitting to these crimes and then helping the prosecution unpack how they happened. There's another person, Adam Yedidio, who is apparently a longtime friend of Bankman-Fried, and he says, "I was concerned that as a developer of FTX, I may have unwittingly written code that contributed to the commission of a crime," and apparently he quit as well. So this is really must-watch court testimony as we start to see how this thing was built up and then eventually unraveled.

• 11:04Speaker 01

  How do you think he might get out of this? What do you think is

• 11:09Alex Kantrowitz?

  I don't know. I don't know. Do you think it's possible?

• 11:10Speaker 01

  I mean, this is the thing, though, that it seems so glaring. Everyone he worked with has flipped on him. So yeah, what's the to try to bring a little nuance and balance to it? What could be the what could be be play the role of SBF's defense?

• 11:28Alex Kantrowitz?

  All right. So first of all, Ranjan, thank you for helping restore the central purpose of the podcast. Bring some nuances to the conversation. So I think it might be the jury, right? You know, the folks who are in the jury are, you know, they're not people who are obsessed with crypto. They're people who are trying to figure out what crypto is, and they're people who like they hear the complexity. This is a point that Teddy Schleifer from Puck made on Squawk Box today. They see the complexity of the case and they stop, they stop being able to really understand the arguments of the prosecution. So this is again from the Wall Street Journal. I mean, dude, this courtroom sounds like an amazing place to be in. It's the Wall Street Journal says, "The first witness was a cocoa trader who testified that he had lost money in FTX.

• 12:12Alex Kantrowitz?

  Several jurors yawned and a few looked blankly around the room." That's how

• 12:17Speaker 01

  Hold on. I like this because, okay, so yeah, two things. Even as I started this conversation, talking about the complexity of a market making hedge fund interacting with an exchange. Already one could get lost as I'm trying to talk about this. I worked in this for eight years. So obviously for me, it's almost emotional and personal how ridiculous that arrangement was. But also the when the victims are a cocoa trader or crypto traders or crypto bros. And like when the victims are not potentially the most sympathetic people in the world. Maybe the jurors don't feel as emotionally struck as if it was, you know, a very compelling victim.

• 13:03Speaker 01

  So maybe that can be the way that they can wiggle out of this one.

• 13:07Alex Kantrowitz?

  And it does seem like they've picked the perfect judge for this, this Judge Kaplan. The Wall Street Journal says Judge Kaplan is known for telling it like it is. He's an experienced jurist who has presided over prominent cases. Okay. Then his computer beeps in the courtroom and he says, "I don't speak computer." He had one of the prospective jurists tell him, I still don't understand how it works of crypto. And the judge goes, you probably have a lot of company in this court. I mean, it's unbelievable. It must, it's unbelievable.

• 13:37Speaker 01

  That's a good.

• 13:38Alex Kantrowitz?

  That's what it will hinge on.

• 13:39Speaker 01

  Yeah, that's a good point, though, that it could. It's not any more complicated just because it is crypto versus any other kind of bank fraud, wire fraud, securities fraud, as Gary Wang admitted to. But once you throw in names like Dogecoin or things that other people have never heard of. And I mean, FTX traded everything. That's what they were known for.

• 14:02Alex Kantrowitz?

  Right.

• 14:02Speaker 01

  That's how they attracted people by it's, we will make you a competitive price in whatever random shitcoin you have. That, I mean, even imagine in the courtroom, the word shitcoin coming up and Judge Kaplan trying to take it seriously. So, all right, I can see, maybe that's how this moves in a different direction.

• 14:21Alex Kantrowitz?

  Yes, that's the only way, but the prosecution is doing a good job. I mean, did you commit financial crimes while working at FTX? Yes, I mean, that's basically what you need to tell the jury. Okay, one minute on Michael Lewis. So we were also talking on the compound. This, this guy has gone from a journalist that was a little bit too taken by his subject to like someone who's now become more hated by then SBF himself. And there are rumors that he's been paid off. I started reading the book, by the way, I'm actually kind of enjoying it. It's just clear that he was way too taken by the subject. What's, what's your, I mean, obviously, since last week, we've seen the 60 Minutes interview, there have been more excerpts, more interviews.

• 14:58Speaker 01

  So for me, I am so saddened by this, just because.

• 15:03Alex Kantrowitz?

  Yeah, I think that's the right.

• 15:04Speaker 01

  Having worked on a trading floor, I remember when I started in 2002, Liar's Poker was like the first thing circulated around the floor when you join. It was actually, I worked at Bank of America and there were certain desks that we called Equities in Dallas, which if anyone has read the book, that's kind of like the desk you don't want to end up on from Liar's Poker. That's what they referred to it as, that that term was still used in a trading floor. It was so well-written and it's captured so perfectly all the absurdity of what happened and the ridiculous things that would happen. And so, obviously, this is so similar in that way that, you know, like, you know, I can only imagine how entertaining and absurd and ridiculous this crypto world is.

• 15:47Speaker 01

  But, but I think what happened, I mean, I read one piece on this, is that Michael Lewis has really dug into the idea, and I'm sympathetic to this, you know, loves the little guy against the big financial establishment story. And so, still crypto against big banking, Wall Street, whatever, is where he's gonna lean towards the kind of, you know, nerdy, you know, crypto guy that

• 16:15Alex Kantrowitz?

  It was like a perfect mark for SBF.

• 16:17Speaker 01

  Yeah, exactly. So, so I can see how he ended up taken, but still, he's, he wrote a book on exchanges, knowing the actual business of how an exchange works, out of everything else. And he wrote a book about bank trading floors. So, the two of those things interacting, anyone who should know how this kind of crime would work, it should be him. But I, it's disappointing, and especially in the context, another thing I was reading was, you know, the blindside controversy, which we covered

• 16:45Alex Kantrowitz?

  Which we talked about, correct?

• 16:47Speaker 01

  Is that on one side, you know, someone is silent and doesn't communicate well, and that means that they're not smart and need help and need to be saved versus someone is silent and doesn't communicate well, and that means they're a genius and misunderstood by society.

• 17:05Alex Kantrowitz?

  Oh, that's very interesting.

• 17:07Speaker 01

  I know, no, I mean, I couldn't, after I read that, I couldn't stop thinking about just how different the portrayals were.

• 17:14Alex Kantrowitz?

  Right. The, the, well, even Satter is that he goes out and he's continuing to do like

• 17:20Speaker 01

  Why?

• 17:21Alex Kantrowitz?

  Free PR for Sam. So, this is from Molly Ball. Michael Lewis at his book launch event says, "Sam Bankman-Fried watched his 60 Minutes interview with his cellmates, the former president of Ecuador," okay, this is funny, "and the former AG of Mexico." And this is what Lewis said, "They all love it, and afterwards, the prison guards were asking them for crypto investment advice." No, no, don't celebrate the fact that people are asking Sam Bankman-Fried for investment advice in crypto.

• 17:48Speaker 01

  Why do you think he's doing this? Even, I have a question. Do you think, like you having written a book that I can see behind you always day one, like, does a publisher ask the author to continue going around? I mean, it's probably potentially selling more books because it keeps it in the conversation. Is he like, why would he go around and continue doing this? Is he this oblivious to the reaction, do you think? Or?

• 18:18Alex Kantrowitz?

  I mean, I think he's just taken by Sam.

• 18:20Speaker 01

  Still? Still?

• 18:21Alex Kantrowitz?

  Still.

• 18:22Speaker 01

  Yeah. Yeah. I mean, he got Tom Brady, the greatest of all time. So Michael Lewis, after that, easy.

• 18:30Alex Kantrowitz?

  Goat and then, yeah, goat of all business books, I guess. Two goats.

• 18:34Speaker 01

  Two goats.

• 18:34Alex Kantrowitz?

  In Sam's pen. So Ranjan, did you see the, I sent you over this chart about Amazon versus Temu. So it's amazing data from Aptopia. I don't think it's been revealed publicly before, but it shows the percentage of Amazon users that are using Timo, Temu, which is the Chinese shopping app that we've talked about a few times on this page. And for those who don't know it, I mean, it really is having a surge and there's tons of issues with it. Obviously, the labor issues are at the forefront. It obviously also ignores every anti spam marketing law on the books, but its growth has been absolutely phenomenal. So it's gone from, it looks like, you know, maybe 4% of Amazon users used Temu in October 2022,

• 19:19Alex Kantrowitz?

  and now it's 40%. And it has accelerated rapidly to the point where, you know, building off our discussion last year, last week with Bill Kovacic, you know, even if you were trying to define Amazon as a monopoly, you see the surge that Temu has achieved and you're like, wow, okay, maybe it's not a monopoly. But just like, talk a little bit about the growth that you see with Temu. And, you know, having looked at that chart, what are the implications there? And what do you think it says about Temu?

• 19:48Speaker 01

  Yeah. So, okay, let's separate this out into two things. First, Temu, and then second, Amazon and antitrust. So Temu specifically, the growth in this chart that you had, and you had in your newsletter is spectacular. But let's not forget, Temu is owned by Pinduoduo, one of the largest Chinese e-commerce sites. I think it's like a couple hundred billion dollar market cap. They are ready to invest and lose plenty of money in the rollout on this. They've invested massively in Facebook advertising and platform advertising. They're willing to take huge losses on every first purchase, which you buying your phone case last week, me buying I found that out.

• 20:31Speaker 01

  an $8 drone like a year ago. You know, like they're willing to take huge losses on people buying. So, so when you think of it that way. It's artificial. It's artificial and it's not, there's no way it's sustainable. Obviously, the bull case, and this is like, you know, you lose money upfront and then you get the customer into your ecosystem and then you start having them spend. But clearly Uber and others and many, many companies have made that attempt and haven't really succeeded with it. So I think in, on the, on the actual success side, I'm very curious to see how long T-Mu lasts, especially in the US. Because as you have seen, their emails are terrible. Awful.

• 21:13Speaker 01

  Like, there's only so far you can go with, again, you give me something for like 90% what I would pay on Amazon. I'll take it the first time, but once you go to even, you're only 10% cheaper, I'm probably not shopping as much. But then the other thing, the antitrust, this is one thing I think got lost, has been lost in a lot of the conversation is we only look at the customer, but the sellers of Amazon are customers. And, and what the central argument, and I actually think this is really smart that Lina Khan and the FTC have taken in their lawsuit, is focusing on what happens to the sellers, that it went from, I believe it was like 20 cents out of every $2

• 21:55Speaker 01

  to $1 out of every $2 now goes to Amazon when you sell on their platform. And that they leverage. Big tax. Yeah, that they leveraged massive power over sellers in order to sell on the platform and continue raising prices. So they are increasing prices, but the customer is not just you or I, the end customer. It's also the sellers on Amazon. And again, the argument is that overall that defl, or inflates prices across the economy. Now, obviously you have a player like T-Mu that comes in and deflates very temporarily massively. But, but again, that deflation is not going to last too long. So, so I don't think this significantly affects the antitrust story, especially the way the FTC has presented it.

• 22:40Alex Kantrowitz?

  Yeah, that's some terrific context and definitely helps me see the Tmoo data in a new light, which I wasn't thinking about this could all becoming artificial promoted growth. Okay, moving very quickly, I wanted to briefly touch on the Blue Apron story. Ron, Jen, you're like very knowledgeable about D to C in this whole era. Blue Apron was worth about $2 billion in 2015, and it got 135 million in funding from, you know, big names, this from CNBC, big name backers, including Fidelity Investments, and it turned a profit in the first two quarters of 2016, setting up a nice IPO, and it just sold to

• 23:19Alex Kantrowitz?

  Wonder Group for 103 million. So, I mean, it's one twentieth of what it was supposed to, I mean, what it was at six weeks, I mean, six years ago. What happened at Blue Apron? Is this a Blue Apron specific story, or is this a broader D to C story?

• 23:36Speaker 01

  No, this is, I mean, following on the Tmoo conversation, it's a perfect example of a company that scaled massively by discounting. I'm sure if you're listening to this, you listen to podcasts, and if you listen to podcasts in the mid 2010s, you are-

• 23:52Alex Kantrowitz?

  Are you gonna offer 15 free meals?

• 23:53Speaker 01

  You are undoubtedly bombarded with Blue Apron ads wherever you were, whatever podcast you were listening to, and promised six free meals, eight free meals, 10 free meals. So, remember, in those early growth stages, they were just giving away product in order to scale. Some number of customers would stick around, but most people would then churn away. But still, they were able to show growth initially, and with that growth, raise more money, invest more money. In that cycle, it was incredible, and they managed to IPO around, I think the last valuation was $2 billion, they IPOed around 1.6, and then right away, once the public markets opened up their books and took a look, it

• 24:36Speaker 01

  was just straight downhill after that. And it was kind of a weird company over the last, have you used it? Anytime

• 24:43Alex Kantrowitz?

  Uh, once on a date back in the day.

• 24:45Speaker 01

  Yeah, back in the day. It's, it's, it's a great time capsule of like mid 2010s tech. I don't know anyone who's even talked about it. I'm sure there's customers somewhere. Again, they sold for a hundred, three million, but, but I think it's just, it's a, it's a bookend. And especially as we will be getting into the Zerp conversation with Christopher Leonard in just a bit. And that'll be airing next on Wednesday. Like, I think it's like a perfect bookend to that entire era that, you know, two billion to a hundred million for a business that maybe it's worth a hundred million. Maybe the, the addressable market of people who want to make these ready-made meal things are, there's some people out there, but it wasn't what they promised it to be.

• 25:29Alex Kantrowitz?

  Are we in another moment like that right now, except with AI? Another story that happened since we spoke last is Anthropic, which I thought was all in on Amazon, right? Had this deal of 1.25 billion, uh, that Amazon was investing up to four billion. It's now, there's now some rumors that it's pursuing $2 billion in funding from Google. Is this, are we going to look back at this and say this is ridiculous? Or do we think that this is actually going to materialize?

• 25:54Speaker 01

  Okay, so the AI bubble.

• 25:57Alex Kantrowitz?

  Anthropic, isn't it strange, by the way, to have Anthropic do uh, up to $4 million raise and like three days later, like $2 billion? Like, did Sundar see the headline and be like, what the hell are we doing? Let's go put the money in.

• 26:09Speaker 01

  Yes, yes, that is exactly.

• 26:12Alex Kantrowitz?

  You believe this?

• 26:12Speaker 01

  No, no, no.

• 26:13Alex Kantrowitz?

  It totally makes sense.

• 26:14Speaker 01

  That is what happened. He saw the headline. He said, I thought they were ours. I mean, come on, like that you, that had to be the way this works, but.

• 26:22Alex Kantrowitz?

  Which is crazy. How do you operate a company like that? Go ahead.

• 26:24Speaker 01

  I mean, hey, but it's, it's such a wild time right now, but to me, the difference between meal kits and generative AI leaders is,

• 26:34Alex Kantrowitz?

  Right.

• 26:34Speaker 01

  It's a different time. And to me, that's actually the difference between the Zerpy era versus right now. Like, do we have a technology that I believe will be transformative across all business? Yes. Is, are things a little bit frothy right now and a little, a little bit within this very narrow segment, probably a little stupid? Yes. Will there be certain winners within this that actually do, you know, turn into the greatest investments of the next decade? Yes, like, so, so I think the AI, I mean, it's funny because that we just talked about blue apron against this context, like, again, like, meal kits being bubbly is a Zerp era, like, thing.

• 27:16Speaker 01

  Again, the idea that, like, somehow you're going to scale massively meal kits was, it was always ridiculous.

• 27:24Alex Kantrowitz?

  Right, when you say it out loud.

• 27:25Speaker 01

  Yeah, the idea that one of these, one anthropic OpenAI, maybe it's someone else, it could be the next Google or Amazon or Microsoft. That actually makes it seem like, you know, maybe you need to get in right now and someone will win.

• 27:41Alex Kantrowitz?

  So here's the question. Would you use AI for therapy? So this is from Ilya Sutskever, right? This is, let's really see if this is more than a blue apron when you answer this question, okay? So Ilya Sutskever is the chief scientist for OpenAI, tweeted, "In the future, once the robustness of our models will exceed some threshold, we will have wildly effective," with the asterisks around it, like, to emphasize it, "wildly effective and dirt-cheap AI therapy will lead to a radical improvement in people's experience of life. One of the applications I'm most eagerly awaiting."

• 28:17Speaker 01

  Yeah, you are eagerly awaiting?

• 28:19Alex Kantrowitz?

  No, that's what he says.

• 28:20Speaker 01

  Okay.

• 28:21Alex Kantrowitz?

  He is. Personally, no. I think it's dangerous.

• 28:24Speaker 01

  So...

• 28:25Alex Kantrowitz?

  I understand the appeal, it's definitely a need, but I think it's dangerous to let AI do therapy to people.

• 28:29Speaker 01

  I'm gonna take the other side of this one because

• 28:32Alex Kantrowitz?

  Okay.

• 28:32Speaker 01

  journaling, I use Day1, that amazing app on the, I, the Apple ecosystem. Simply just writing what you do during a day is actually pretty awesome. Like, it's pretty amazing and it's a great thing to do. So the idea that you could knowingly have, what is a machine, as long as it's clear that it's a machine, interacting with you, you know, talking back, understanding what you have been writing over the last 10 years, monitoring your mood over time, this stuff actually seems pretty reasonable to me. And honestly, like, That over talking to a real person, it almost feels like it could be more private. So, so I actually think, and then if you get into bringing that type of, that, that type

• 29:17Speaker 01

  of good, societal good to such a mass audience, I don't know, I'm bullish on this one. I think obviously if it turns into something where it's like, you know, hiding the fact that it's a machine or trying to be purposefully manipulative, obviously these are bad things, but I don't know, I like this one.

• 29:37Alex Kantrowitz?

  When, when you do therapy, and I've done it, you really open your heart up and you, in conversation, you know, I, I understand that the access, it's really not accessible in this country and that's a problem that needs to be solved, but the therapist can steer the person that's getting the therapy in very different ways. And when, when you're that vulnerable and that malleable, to turn that over to the machine, I mean, it's one thing if it's just listening and saying, share and like, talk about all this stuff, but the second it becomes sort of proactive as opposed to reactive, that's where you might get into trouble, is my perspective.

• 30:13Speaker 01

  All right, then maybe you think of this as, as an ongoing daily check-in type thing, these kind of things are perfect for it.

• 30:22Alex Kantrowitz?

  And it is interesting because the, the very first like mass market or first big experiment with a chatbot was a therapy bot. So, we're just kind of coming around to it.

• 30:32Speaker 01

  I think I remember this.

• 30:33Alex Kantrowitz?

  I'm gonna get the name of it.

• 30:34Speaker 01

  Yeah, no, no, it was like a Stanford research, I remember, and it was one of the first where they claimed to use a transformer model to actually generate language.

• 30:42Alex Kantrowitz?

  Eliza.

• 30:43Speaker 01

  Eliza.

• 30:43Alex Kantrowitz?

  It was called Eliza.

• 30:44Speaker 01

  Yep, yep. And, and it always made sense, because again, speaking honestly to, on your phone to something, you know, and getting an answer that's somewhat structured and repetitive and predictable, I mean, these things, it's somewhat made for this.

• 31:02Alex Kantrowitz?

  Right, exactly. And I think the fact that we're even here and having these conversations, to me, just kind of shows how far the technology's actually come. It's pretty wild, like the fact that this can even be in the realm of would you or wouldn't you, as opposed to is it capable?

• 31:17Speaker 01

  It's crazy, yeah.

• 31:17Alex Kantrowitz?

  It's nuts. We didn't, we didn't get, have time to get to the Twitter stuff. It's actually quite interesting. I'll just read it and then we can sign off. But so, so Lynda Yaccarino has been speaking to bankers this week and talking about how they're going to introduce potentially three different tiers of Twitter subscriptions, including for those who don't want to be all in on the current product now. And she's also talking about how that advertisers have come back, 90% of advertisers have come back to Twitter, but they're not spending the same amount of money that they were previously. And that sort of squares with the Reuters story that came out.

• 31:58Alex Kantrowitz?

  I'm pretty sure this week that Twitter has had a 55% year over year decline each month since Musk bought the platform. And in August, it was down 60%. So last week, when I said that Lynda Yaccarino, her number one job was winning the money back, you know, there was one detail I left out is it's not just advertisers, it's also the amount that they're spending.

• 32:18Speaker 01

  Spending and debt servicing.

• 32:20Alex Kantrowitz?

  Yep.

• 32:22Alex Kantrowitz?

  All right, folks, more to come next week. Raja and I will be back on Wednesday with our interview with Chris Leonard. We'll also have our weekly breakdown of the news on Friday. Thank you so much for joining us. Please make sure to subscribe if it's your first time here with the show and hit five stars if you're a regular listener. Can't wait to bring you the Chris Leonard Show. So much is happening in the economy right now that's tied to the Fed. We are going to go into depth with him about that. Again, he's the author of The Lords of Easy Money. That's coming up Wednesday. Hope you have a great weekend. If you're here again from the compound, it's been a more abbreviated ad free show. We do these typically 45 to 50 minutes on Fridays and we hope to see you next time. So thanks again for joining. We'll see you next time on Big Technology Podcast.

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