Facebook is Dead; Long Live Meta, Does OpenAI Need to Log Off?, Questions on Bubbles, Blackberry, and Bell Labs

Ben and Andrew discuss a monster earnings report for Meta, the mechanics of how they got there, and the newfound trust the company enjoys from investors. Then: Reactions to GPT-5 and subsequent updates from OpenAI, the strategic logic of the changes, questions about OpenAI leadership, the AGI race, and prompts to engineer the right LLM tone. At the end: A question on bubbles and the implications of our current circumstances, Apple's interests vs. America's interests, Blackberry's thin client comeback, a few fun Bell Labs facts, and Google as slime mold.

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

• 0:04Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:15Ben Thompson?

  Doing well, Andrew. How are you? Back in the home studio, I see.

• 0:18Andrew Sharp?

  Indeed, back in the home studio. A little disappointed because last week we tossed around the idea of GPT-5 just replacing us and we all just get to hang out and let the AGI take over.

• 0:31Ben Thompson?

  Oh, that's right. We are here. I guess that is, that's the news itself. We are actually recording.

• 0:35Andrew Sharp?

  You know, back to the podcast minds, at least for another few weeks here. But it is good to see you and we have a lot to get to. A busy week on Surtecry. We're not even going to hit the Nvidia news. But you wrote an article on Thursday, "Facebook is Dead. Long Live Meta." And so that's where we're going to begin.

• 0:56Ben Thompson?

  Yeah, this was a bit of an accidental article, actually. It was an update that I converted to an article.

• 1:02Andrew Sharp?

  Okay.

• 1:04Ben Thompson?

  It's been a very busy August, like much more, much busier than usual, to the extent that I'm like two weeks behind in covering Meta's earnings. And I was thinking about it when I was writing it, I'm like, man, there are scenarios where it would have been pants on fire, five alarm fire, to make sure I write about these earnings because the company's blowing up. And I, and it's always the previous times, like I remember when the 2017, 2018, like when Stories was out there and they had way more inventory and their price spread dropped. And like, it was the first time there, or not the first time, one of the many times their stock imploded. And I remember being in Wisconsin and being outside in a beautiful summer day. It'd be like, this is ridiculous. I need to write about this.

• 1:49Andrew Sharp?

  Drop everything, yes.

• 1:51Ben Thompson?

  And so it was, it was sort of a meta-observation that it was okay for me to wait two weeks to write about these earnings, which were obviously spectacular because... They were fine. They, they, you know, even though they're spending all this money on AI, it's sort of not a big deal. And that sort of ballooned into, wait, there's actually a larger sort of observation in here. So it was, this is a bit of an accidental article, but I actually thought, you know, it was worth fleshing out a little bit larger than, than I originally planned starting out with. And so, yeah, that, that's why we, we have an article on Thursday, day of the podcast. No reader emails. You're going to have to come up with questions all on your own.

• 2:30Andrew Sharp?

  Exactly. Well, and it's interesting because I read the article and initially I was like, there's nothing all that new here. Do we have to even add it to the podcast rundown?

• 2:42Ben Thompson?

  We don't. We can skip it if you want. I know you want to talk about China.

• 2:45Andrew Sharp?

  No, but there is, it, there's more going on than meets the eye at Meta. So we're recording this on Thursday afternoon. I'm going to read a piece of the article you published Thursday morning. You wrote, "One of the weird things about Meta is how the company never seemed to get the benefit of the doubt, at least up until the last couple of years. There is something about social media that has always made investors intrinsically suspicious of the long term. Given that Meta's simultaneous slowdown in growth, mostly driven by ATT, combined with the public shift in focus to the metaverse, fueled concern that the company was desperately trying to pivot away from a failing business and losing billions of dollars to do so with very few tangible results."

• 3:30Ben Thompson?

  Right. This is the other Pants on Fire episode, which is two or three years ago, when you actually had the same dynamic as Stories with Reels. That was decreasing their monetization because it was a new product, taking attention away from their well-monetized products like Stories. And yes, everyone lost their mind.

• 3:48Andrew Sharp?

  Well, and there was also the ATT headwinds and, uh, the metaverse just looked pretty embarrassing in public. And so it all sort of snowballed into a panic. But you write, "Things are very different now in two regards. First, there is the aforementioned commitment by management to deliver results now, not just promises about the future. Second, investor sentiment about Meta really has done a 180. If anything, my impression is that Meta is not just getting the benefit of the doubt, but actually getting more credit than they deserve. So tell me more about what's going on and the credit that Meta does and doesn't deserve in AI."

• 4:30Ben Thompson?

  I mean, both of those panics, the one that was sort of, I call it the Facebook Stories panic, and the, basically the Reels panic, were driven, in my mind, by a real fundamental misunderstanding of Meta's business, which I just sort of referred to. This idea that it is actually healthy and bullish when Meta goes through these periods where monetization is actually hurting because customers have switched to the new product and monetization has not yet caught up. And the way you see that is you see an explosion in ad impressions because they have way more places to put ads, but the price per ad is just plummeting.

• 5:12Ben Thompson?

  And, and investors get all worried about this. And in both cases, I'm like, this is incredible because what is going to define the next X number of years? Them learning to monetize those spots and making all kinds of money. And this is like a very organic growth story. And it's something that, I don't, I feel like I laid this out ages ago. I think this is one they adopted and they use it on their earnings call all the time. We have a playbook. Firstly, build a product, then we get customers, then we grow it, then we add monetization. I wrote that, the Facebook playbook, like, like a decade ago. I, I don't know, I don't know who was first, me or Mark, but you know, they, they were doing it first. I don't know, it was actually labeled as such, but that was the playbook. Right.

• 5:57Ben Thompson?

  And in both cases, in both sort of scares, that was happening and that's why the results looked bad. Because you had eyeballs moving from the monetizable surfaces to the less monetized surfaces, which hurt their income, but was setting the stage for huge amounts of growth going forward. And investors were not giving them credit for that. That's what I mean by not giving them the benefit of the doubt. They had done it before, they did it again, and investors should have been prepared for that. This whole scare was sort of unwarranted. I do think the Metaverse slash Stories scare, though, taps into

• 6:35Ben Thompson?

  I've remarked multiple times, Google's the company I have a hard time understanding. Meta's the company that makes me all the money because I feel like I get this company and I've gotten it for a long time.

• 6:46Andrew Sharp?

  A lot of people have done well on the back of.

• 6:48Ben Thompson?

  More than me unfortunately, yes.

• 6:49Andrew Sharp?

  Bull calls, yes.

• 6:50Ben Thompson?

  But, but just the, this company's been underrated from the beginning. And even in 2022, when this whole thing was going, people were invoking MySpace.

• 7:01Andrew Sharp?

  Yeah.

• 7:02Ben Thompson?

  No one knows what MySpace is, okay? And MySpace peaked at like millions of users.

• 7:07Andrew Sharp?

  Well, that's, it's kind of an interesting psychology lesson because that line you had in there, there's something about social media that has always made investors intrinsically suspicious of the long term. That even makes sense to me, like, and I wonder whether that's just a relic of the early internet era and the way we came to understand this ecosystem when you did have social networks come and go in cycles every few years. And even Facebook's resonance sort of waned and then was supplanted by Instagram. And then Instagram supplanted itself with reels and stories and it just continues to evolve. Facebook just happens to be the one that's driving all those changes.

• 7:52Andrew Sharp?

  But I think I understand why investors would at least be skittish because with a social media network, it seems like there's no long-term moat. Whereas a company like Amazon, who has gotten the benefit of the doubt from investors for years and years, they can just point to physical infrastructure as opposed to citing network effects or something like that.

• 8:15Ben Thompson?

  Which I get, I agree with you. There's something like sort of, it just makes sense. Something can grow virally and it can die virally. It was like, sort of the assumption. It's, it's good you called out Instagram. Uh, there's, I was gonna link this in the article today. Uh, maybe I should, I might go back and find a place to stick it in. I wrote about how Instagram's sort of relentless evolution and like how it's just dramatically changed what it was. And I wrote this 2020, 21, when they were really leaning into stories in reels or started leaning into reels and that. Was a big change, but it was like one of many big changes that Instagram has sort of undergone

• 8:56Ben Thompson?

  from its beginning. And that's been the app, to your point, that Facebook has used to stay on the cutting edge. I would quibble with your bit about Facebook pushing it. TikTok was was a huge wake up call. Like, and TikTok is where they nearly lost it. And the reason they lost it. And I would, I would say of all the articles I've written, this is like one of the ones I'm most proud of. I wrote an article in 2015, Facebook in the Feed, basically saying, Facebook has to move past the social network. Like, there's actually a larger opportunity to be your personal entertainment. And I was focused on Facebook, which obviously ended up being Instagram more than Facebook. And I was focused on the opportunity of like professional

• 9:39Ben Thompson?

  content creators, which was a mistake. The, what TikTok tapped into was just pulling content anywhere across the network. So it's user generated content, which is obviously way better from a economic perspective. Yeah. But, but the overall point that Facebook was in 2015, I wrote they were running into disaster because they were too anchored on being a social network. They had to sort of move past it. So maybe I was one of the investors, I can get into better than that, but, but I feel like my angle was, was, was, was this, that they had this place in people's lives that was exploitable and able to be more entrenched if they could break out of the social network mindset that

• 10:19Ben Thompson?

  they had. And that is what they've done. Like, like it's pretty jarring, like that filing I put at the end, what they, you know, with the FTC case, like 15% of your content you see is from your friends and family now? Like, it's not a social network. Crazy. Really in, in sort of any meaningful sense. It's an entertainment feed. It's an entertainment company. And by the way, entertainment companies, pretty good track record of being pretty durable.

• 10:46Andrew Sharp?

  Yeah, I mean, they're doing quite well, but I will say when I began reading the article this week, I was bracing myself for like an extended victory lap from you where Meta is winning with AI today in a lot of the ways you predicted, but there wound up being a lot more nuance in both the numbers and what you described in the article.

• 11:10Ben Thompson?

  As the chief zagger in the world, do you think I can I appreciate your zagging if I don't have an implicit streak of zagging myself?

• 11:18Andrew Sharp?

  Exactly. Well, to that end, I one thing that really entertained me is the Strategery tweet promoting this article was pretty cagey. You write Meta delivered blowout earnings the same quarter that Mark Zuckerberg doubled down on AI. I don't think it was a coincidence. And then an AI-generated bot, this has to be a bot, was the first response to that article. Meta's AI push is definitely paying off. Reminds me of at Gregory Barnes X32's take on how AI will reshape social media. Facebook might be fading, but Zuck's bets are still hitting hard. So.

• 11:57Ben Thompson?

  Which had nothing to do with what I wrote.

• 11:59Andrew Sharp?

  That's not quite what's happening there. I can understand why you would respond to that tweet and being like, yep, Zuck's bets are paying off. But again, it's just a more interesting story as we sit here in 2025. So tell me about what Zuck is investing in and how how correlated that is to the results we saw this past quarter.

• 12:21Ben Thompson?

  The benefit of the doubt, this is where the benefit of the doubt question comes in. Investors should have given Facebook more benefit of the doubt that they have this incredible ad business that they're going through what is actually a very healthy and productive cycle, and it's going to come roaring back in a big way. That was super obvious in 2017. It was super obvious in 2022, and yet somehow Facebook's stock was $90, right? Like, so, so that's where they didn't get in the benefit of the doubt. This quarter, Mark Zuckerberg's spraying money all over the place. Still not to Sharp Tech, for the record. But uh, but he's spraying money all over the place. They're, you know, they're, they're spending all this money. They're, they lost another $5 billion.

• 13:03Ben Thompson?

  Like they're on a $20 billion loss run rate with Reality Labs. Just an astronomical amount of money with precious little to show for it. To be particularly given the length of time they've been working on it. Despite the fact the project is super cool and all these sorts of things.

• 13:17Andrew Sharp?

  It is pretty remarkable after the metaverse freak out a couple of years ago. It's not like the losses have gone away.

• 13:23Ben Thompson?

  No, they've gone up. Yeah, they've increased significantly. Like that, at that time, I think they said, we're going to be losing $10 billion a year. It's now double. Uh, you know, inflation hits everything, I guess. But the results were amazing. Like they had their top line beat, bottom line beat, everything beat. It's amazing. And investors are, they don't care. They're like, spend what you want. It's all good. And it's like that now they're giving them the benefit of the doubt. And what's interesting is

• 13:52Ben Thompson?

  what it seems to me is number one, you have an incentive. This is like a crime novel. You have an incentive to make sure you have good results, which is the same quarter. You're basically saying we're going all in on super intelligence. That'd be a pretty good quarter to have super phenomenal results, right?

• 14:11Andrew Sharp?

  Yeah.

• 14:11Ben Thompson?

  Something they didn't do before when it came to the metaverse and things like that. Number two, you have sort of the, the confession. You had Susan Lee, basically, you know, on with John Collison, telling this story that what we learned, and she took over as CFO right around that time of the, the whole like $90 sort of stock thing. One wonders, maybe this is what drove the CFO change. Like your stock is knocked down to $90 because you're messaging wrong or whatever. That's a, that's a reason to make a change. Uh, and she's like, yeah, what? An investor asked this question that hit me like a bag of bricks, which is if you're spending on the future, how about we just invest in the future? Right? We talked about this in the context of Intel, right?

• 14:56Ben Thompson?

  Like the problem for Intel today is, or, or I think we said this a year or two ago, when things looked a little more optimistic. The problem is, oh, great, you have this technology that's coming in 2027 or 2028. How about I buy your stock in 2027 or 2028? Why do I want to be there in the nadir right now? And that's a real problem for, for a public company, you know, to have these sort of investment cycles. And she's like, we learned we need to take care of the short term as well as the long term to take, make sure our investors are sort of along for the ride. So we have the confession and we have the incentive. And then what do we get last quarter? We get suddenly an explosion in ad impressions.

• 15:41Andrew Sharp?

  Mm hmm.

• 15:42Ben Thompson?

  And unlike 2017, when you had the introduction of story, the real spread of stories, which drove impressions organically. And unlike in 2022, when you had the real push in reels that drove huge amounts of inventory, organically, for real, what happened last quarter? Why is there suddenly way more impressions?

• 16:04Andrew Sharp?

  Well, AI is cited often.

• 16:10Ben Thompson?

  So there is something to there, right? Their recommendations are clearly getting better. And that will drive price per ad. The price per ad did not decrease to the extent you would expect, given the amount of impression increase, which is in line with a few previous quarters. And they have these incredible new AI models that are not AI that we're talking about, not LLM, not super intelligence. They're much more basic, simpler recommendation, machine learning models, much more advanced. Like Andrew Mina, they talked about is built on Nvidia GPUs. Like it's a pretty hardcore model, but it's not the stuff we're talking about. That drove some of the result for sure.

• 16:49Andrew Sharp?

  And it is stuff that you've highlighted in the past, like these sorts of capabilities should make their business more profitable in the long term as they lean into AI.

• 16:56Ben Thompson?

  Yeah, but even the stuff I've talked about with for LLMs making AI better, none of that has come to bear yet. That's still all sort of in the future. All this stuff is, is pre LLM sort of capabilities sort of coming to bear. So now could AI make recommendations better so people use it more? For sure. Yes. Even that is tied into the, this whole bit about suddenly it's 80% video.

• 17:20Andrew Sharp?

  Right.

• 17:21Ben Thompson?

  Short form videos really freaking addicting, right? You sit down and you just scroll and scroll and guess what? The better the videos, the more pertinent, tighten up that signal, you're going to end up watching longer. Guess what happens when you watch longer?

• 17:33Andrew Sharp?

  More opportunities to push ads.

• 17:35Ben Thompson?

  You see more ads. And by the way, they also mentioned that, oh, we optimized ad load. AKA, I interpret that as we started pushing more ads to people, like, like the number of ads relative to whatever. What it seems to me, again, if I'm a detective here, is in a quarter where they really needed good results to justify this massive long-term investment, I feel like they might have turned a couple dials to get some really good results.

• 18:04Andrew Sharp?

  And did it the old-fashioned way, you know, pushing more engagement and pushing more ads as opposed to leaning on superintelligence to supercharge the business.

• 18:14Ben Thompson?

  You know, the good thing about being an entertainment company, you have an endless source of entertainment to push to people. If you're a social network, you're, what are you gonna do? Spur your friends to type more interesting things that you can push? Like, there's a bit where you can spin this super positively. This is actually a justification of why they deserve the benefit of the doubt. A company that has dials is a powerful company. The whole worry about a social network and the whole MySpace concern is that there's a certain bit that they don't have control. It's like, what happens?

• 18:48Andrew Sharp?

  If your friends leave, if your friends stop posting. Yeah, exactly. That's why those places didn't have a moat as opposed to Facebook. And so in some ways, the results this quarter are downstream of Meta's recognition seven years ago that they needed to go this direction.

• 19:05Ben Thompson?

  Yeah, I mean, I think seven years ago might even be generous, uh, maybe four to five, but, but yeah, but this is my, this is my point. Like, I'm like, where were all you investors all along, getting all worried at a time when they had just this organic, powerful network effect and ad network? And now today, again, I'm not denying the results. They're great results. I'm just saying it's pretty convenient. They had good results and it turns out, I think they have more dials today to get good results than they used to. And that's at the end, I'm like, well, you know, maybe that's why.

• 19:40Ben Thompson?

  That you it's nice to invest in a company that that has control of what it is. But I mean, it was so like it it occurred to me, I just happened to link to that, you know, that old 2016 earnings call in that call where they're like, we're not going to increase ad load. So we're warning you, impressions are going to stop growing because we don't want to diminish the user experience. And number one, that was an example of when Facebook probably did have a monopoly because they could have the luxury of not doing that. But number two, that was the peak Mark Zuckerberg, we're connecting everyone, connect, connect, that connected. And to fast forward to today, and the word connect is a throwaway one line

• 20:21Ben Thompson?

  in the context of this super intelligent sort of push, like Meta is an entity that exists to grab and keep attention and serve you ads. Facebook, Facebook's dead.

• 20:35Andrew Sharp?

  Yeah, I want I think at some point, Mark talks about, uh, look at me, a tech podcaster, referring to Mark Zuckerberg by his first name. At some point, Mark, uh, referred to serving individuals and what they care about, which is a pretty big deviation from a lot of the messaging for the first 15 years of Facebook's history, which always emphasized community.

• 20:59Ben Thompson?

  Well, that's the thing with AI, right? AI is like the end game of all the internet of this total atomization and individual. And we talked about like, this is why I'm optimistic about our business model, because we're a common piece of media when AI media is totally individualized. And and so the the payoff becomes like, it's funny, like back in the day, strategy was very niche. It's like, oh, I have content that's really relevant to me instead of the mass media that's everywhere. And like a weird transition that to for me to think about with with with my business and for us to consider as, you know, things we want to do in the long run is actually know our opportunity is not to

• 21:40Ben Thompson?

  be niche, it's to be communal. And part in parcel of Meta doubling down on AI. And this is downstream of the feeds. The feed is the agent, like that's one of the OG agents. Like Mark Zuckerberg made this point on the call, which is great. I've actually, he got this one first. I wish I had, it was a great call, which is they have one of the best AI agents in the world, which is their ad serving capability, which is yeah. You put in, you type in, this is the result I want. And Facebook's whole machinery goes off and gets you the results.

• 22:14Andrew Sharp?

  They go find the customer, yeah.

• 22:15Ben Thompson?

  How is that not an agent? It's not using an L M, but who cares? That's a technical implementation detail. It is a computer that you tell you what it wants and it goes off and does it for you. It's like, I want more sales and it delivers you more sales. It's incredible. It's one of the best agents. That's what the news, the news feed, you make the same case. It goes out and finds you content that you're interested in and it gives it to you. And what has made Facebook unique and the feed unique is what you see is different than what I see. And they do that at scale for every sort of individual person. And there's a bit about Facebook, we're talking about the connectedness. Oh, this is how I should have framed it at the end. I talk about like, oh, people's culture, community. Maybe Facebook talking about the connectedness is what was this sort of subconscious pushback

• 22:57Ben Thompson?

  about how actually Facebook is atomizing. It's not connecting. It's atomizing at its core. And there's a bit about this embrace of AI that is just, it's natural end state.

• 23:12Andrew Sharp?

  Well, first of all, I think we should record every podcast about an hour after you publish an article so we get to hear you second guess different editorial choices you made live on the show. But yeah, no, it's really true. And everybody who's listening to this podcast, I can assure you, you're all listening to the same podcast, you're hearing us mispronounce the same words. Ben, I believe mangled Andromeda earlier in this show here.

• 23:40Ben Thompson?

  Yeah.

• 23:40Andrew Sharp?

  Yeah, I think so. I think it's downstream of a Stephen King novel.

• 23:44Ben Thompson?

  Well, the funny thing is Passport actually is delivering everyone individual, individual episodes.

• 23:49Andrew Sharp?

  That's true. But this podcast.

• 23:52Ben Thompson?

  We do actually, we have the capability of delivering each and every one of you a different podcast.

• 23:57Andrew Sharp?

  We can mispronounce a different word for every single listener out there.

• 24:01Ben Thompson?

  That's right. You'll never know.

• 24:03Andrew Sharp?

  As far as the transition is concerned, it does. The other thing that was interesting to me reading this article is it seems like what's happening here is that there's now been an inversion of sorts where instead of investors hand wringing over the long term, it seems like Zuckerberg himself senses a long-term threat from AI. And so he's spending like crazy to mitigate that risk. And in the meantime, pushing more ads into meta products in order to buy off the nervous Nelly investors. Is that a fair characterization of what's happening?

• 24:39Ben Thompson?

  I don't know if it's fair. It might be right and also unfair. But yeah, I mean, that's so funny about the AI meta thing is so interesting to think about. Is it a threat or is it an opportunity? It's definitely, I think, column A, a little bit of column A, a little bit of column B. I mean, like with the whole thing, we're going to get to GPT five and people with their AI friends. People spending hours talking to 4O, which just sounds absolutely miserable to me.

• 25:05Andrew Sharp?

  Weird and very foreign, but apparently pretty common.

• 25:10Ben Thompson?

  That's time not spent on Facebook. Like, remember, Facebook is a machine to capture the most amount of your time necessary. And in that respect, I think we mentioned this on a podcast like a month ago. Maybe actually Facebook is the one threatened by ChatGPT, not Google. And in this particular angle, that is the case. Google at its best is not. Now, Google is over time has become a property you spend more and more time on and more of their money-making is on their site. But at its core and at its best, Google is a landing, is a launching pad. It's a place you go to go somewhere else. And is that what AI is? AI is kind of self-contained.

• 25:51Ben Thompson?

  And in that respect, actually, you can, you know, and this sort of makes it clearer. It is a Facebook competitor and so Facebook is threatened. And at the same time, what Facebook has the potential to do. Total individualization is the endgame of where Facebook slash Meta has been going for years and years. This is the ultimate feed, where the feed is not just limited to harvest your friends and family. Now it's been expanded to find you user-driven content from anywhere. In the future, it can create any content you like. Like, it's a natural sort of progression.

• 26:29Andrew Sharp?

  Yeah, I mean, there's definitely all kinds of opportunity for Facebook and Zuck is going full steam ahead. So we'll see what happens on the superintelligence front. For now, though, speaking of superintelligence and AGI, we can turn our attention to GPT-5. And I have a threshold question at the start here. So there have now been several updates from OpenAI in an effort to satisfy angry users in the wake of the launch of GPT-5 a week ago. Is OpenAI too online and does OpenAI need to log off? The floor is yours. Your thoughts?

• 27:12Ben Thompson?

  Well, who is OpenAI, I think, is the question. It's a real concern that I have for the company, to be totally honest. I think the, being a consumer product maker is really, really hard. And it's hard for all sorts of different reasons. One of them is that if you make a change, if you're a billion-user company, and you make a change that affects 1% of users negatively, that's 10 million users.

• 27:44Andrew Sharp?

  Yeah.

• 27:44Ben Thompson?

  That's a lot of people that can be very vocal and can make themselves heard very, very loudly. And I think there's a certain approach to effective consumer product leaders. And here we go back to Mark Zuckerberg. The seminal moment, like, I always like to talk about the history of tech companies, because there's usually often a moment early on that defines everything about the company going forward. For Facebook, that was the introduction of the newsfeed. You start out with Facebook, it's just profile pages, and you have to, like, click around to all your friends to see what they're up to. They come out with a news feed where all those updates are in one place and you can see it all. And people lost their freaking mind.

• 28:27Ben Thompson?

  There were like, there were online like petitions, they had actual physical protesters in Palo Alto outside their offices.

• 28:35Andrew Sharp?

  My god.

• 28:35Ben Thompson?

  They had to like issue this Millie Mouse statement about blah, blah, blah, you respect that at all. And they didn't change a thing. They doubled down because what they did is they looked at the data and they saw that people freaking loved it. They were on there all the time. We, there was actually a replay of this when Instagram shifted from the algorithmic timeline to the, the inter-space timeline, the 2016, 2017, somewhere around there.

• 29:02Andrew Sharp?

  There would be a replay of something like that with every major change that Facebook has made over the last 10 years. Facebook, I mean, including Instagram in that umbrella.

• 29:11Ben Thompson?

  Right. That was another, another one. By that point, I think they were more hardened. They're like, right away, they're like, actually, our user numbers show that engagement is up by like 50%. So we're not changing anything.

• 29:21Andrew Sharp?

  You guys are screaming into the void. Good luck.

• 29:24Ben Thompson?

  But, but it's impossible to get good signal from the masses online. And I, I've told this story. I had to learn this with Stratechery. You know, early you get, especially when you start, you're so eager. People are sharing my stuff on Twitter and people are responding to you and you're, you're replying. And at some point I realized that, number one, it's always the same people replying.

• 29:46Andrew Sharp?

  Yeah.

• 29:46Ben Thompson?

  And number two, my user numbers and readers are increasing rapidly. By definition, there is a total mismatch between who I'm hearing from online, which is constrained and not really growing, and the people that are actually enjoying and consuming my content. And I need to be super careful about not over indexing or paying too much attention to the loudest people on Twitter.

• 30:09Andrew Sharp?

  Totally. I'm the same way. I mean, I had the same, the same experience writing and I also sometimes have to step back and say, well, would I ever write angry feedback to a writer that I enjoy and read every day? And would I ever comment?

• 30:26Ben Thompson?

  Andrew, Andrew, Andrew. I am a listener of the Goat Podcast where you recount, what is this, getting JJ Reddick's AOL handle?

• 30:38Ben Thompson?

  Messaging him every day to taunt him and troll him.

• 30:44Andrew Sharp?

  Wow, just nailed me. So yes, when I was 16 years old, I was a big North Carolina basketball fan and I did acquire JJ Reddick's AOL Instant Messenger screen name and I harassed him on a daily basis because he had his away message up and was online all day. Eventually did have a conversation with JJ where we traded insults in real time. It was great. But I'm saying as an adult, I'm not going to be lurking in the comments section.

• 31:13Ben Thompson?

  When did the adult line cross? Cause I feel you told another anecdote on goat like two episodes later about just emailing and harassing someone online.

• 31:22Andrew Sharp?

  No, no, somebody else was trying to do that and I advised that person not to email Jonathan Kaminga's agent and tell him what a horrible job he's doing because he's an adult and he's not 16 years old. And I said at the time, I would have done this when I was 16 years old.

• 31:38Ben Thompson?

  Well, the problem is there's that old New Yorker cartoon on the internet, everyone is a dog. What you're saying is, or sorry, I would, no, I got it totally wrong. Man, I put you that the dog is sitting at the computer on the internet. You don't know if you're talking to a dog, whatever. I what you don't know if you're talking to a 16 year old is the point you're getting to. Yes, exactly. Or yes, my AI bot replies on Twitter today.

• 31:58Andrew Sharp?

  Well, and I'll tell you why I asked the question, is OpenAI too online? Does OpenAI need to log off? And of course, we could just be talking about Sam Altman being too online and Sam Altman needing to log off.

• 32:10Ben Thompson?

  They're all, they're all very online.

• 32:11Andrew Sharp?

  They're, they're very online. I had seen a former OpenAI employee talk about a couple of months ago about how attuned they are to the conversation on Twitter and how conscious they are of the way they're discussed on Twitter.

• 32:26Ben Thompson?

  It was funny. Sam Altman and Elon Musk had like a cat fight this, this week or slap fight or whatever it is. And it was funny because I had to write an update about ChatGPT 5 and I had to link to like 18 Sam Altman tweets.

• 32:42Ben Thompson?

  So yes, I totally totally know what you're talking about.

• 32:45Andrew Sharp?

  Well, and you also had to do an update 12 hours later because they updated the the model and the layout menu for everybody. And in terms of GPT-5 and what they announced last week, this is a topic where my sensibilities as a tech normie can actually be pretty useful because I'm the target customer for OpenAI, not you. They want me and people like me to love their product. And as I was reading your GPT-5 article on Wednesday, I hit a point where I just threw up my hands and it was like, you gotta be effing kidding me. You had a screenshot of the legacy models list they have. Let me pull it up here. Hold

• 33:27Andrew Sharp?

  on. It's a GPT-4O, GPT-4.5, 03, 03 Pro, 04 Mini, GPT-4.1, GPT-4.1 Mini. And they have little explanations for what each model does. And you wrote, as best I can tell, GPT-5 Pro is akin to 03 Pro, now with proper capitalization, you put in parentheses, and GPT-5 Thinking is akin to 03. I immediately defaulted to GPT-5 Thinking, in line with the fact that 03 has been my go-to model for several months now. I'm sitting there as a normal person,

• 34:08Andrew Sharp?

  Ben, reading that. All of it may as well be Sanskrit to me. It's just completely out of control.

• 34:15Ben Thompson?

  Oh, no. Are you outing yourself as a 4O user?

• 34:18Andrew Sharp?

  I'm not a 4O user. I use whatever GPT chooses for me. I open the app and put in my question and get an answer back.

• 34:27Ben Thompson?

  You're outing yourself as a 4O user.

• 34:29Andrew Sharp?

  Perhaps I am. I don't know. But I'm a I'm a pro subscriber or a plus subscriber, excuse me. It's amazing to me.

• 34:36Ben Thompson?

  For the record, I offered you Pro. You turned it down.

• 34:39Andrew Sharp?

  You did. You did. And eventually I had to ratchet down to plus because I was like, I'm not using this enough to justify the expense. It's amazing to me that ChatGPT succeeded despite that confusion.

• 34:52Andrew Sharp?

  And GPT-5 is an effort to make those choices much simpler for mainstream users, which is a great idea. And so I, to the extent they keep updating it and now further complicating the menu, it just seems crazy to me and it seems like they're listening way too much to a very small group of angry power users on Twitter.

• 35:16Ben Thompson?

  Yeah, I'm, I'm actually personally very annoyed. Like I am a pro user and I didn't use O3 Pro, but I used O3 basically exclusively. And so no, no limits there was great. Amazing model. I actually think GPG 5 thinking significant step up on O3 Pro or on O3. Um, so I'm very pleased with this, with this release. But yeah, now we have auto decides how long to think, fast, instant answers, thinking mini, thinks quickly, thinking, thinks longer for better answers, pro, research, great intelligence. And not only that, but the original launch had GPT-5. GPT-5 thinking, all capitalized by the way.

• 35:57Ben Thompson?

  GPT-5, it was so clean. It like, it, I, it made me happy to go to the model picker and pick out my model. I'm like, this is such a breath of fresh air after that ridiculousness before. And they've totally backtracked. I find it very upsetting from an aesthetic perspective. But yeah, but is it because they were too, this is the big question I have. If you're, what, what Facebook learned,

• 36:22Ben Thompson?

  you have to launch the point of view and then iterate, you have to have data feedback loops and base your decision-making on that. Sometimes you do have to wind stuff back because the data shows like, oh, we really screwed this one up. And by the way, that's something you might miss on social media also. It maybe it's the case, the normies are deserting, but all the nerds love it. And so you're hearing praise, but actually your product usage is falling through the floor. Oh, there's a perfect example of this. I can't think what it is off the top of my head. Some, some startup, whatever, basically killed themselves chasing like Twitter likes and like everyone just sort of like, like abandoned it. And so that that's

• 36:58Andrew Sharp?

  You can also look at the last 15 years of media as an example of how that strategy can go wrong.

• 37:03Ben Thompson?

  Right, yeah, writing to Twitter likes, yes. And so did did OpenAI? Was there a real shift in data? And like, oh, oh, we screwed up. We need to fix this. I don't know. If there was, then all this backtracking and changes, re-adding GPT-4O, adding back all these choices. Now, there was, there is one decision they made that was a very bad one, which we should get to in a moment. So let me table that to use some corporate speak. But if it was data-driven, then fine, I get it. Good job. You had, you, you, you, you, you took a risk. People didn't like it. You backtracked. I get it. But if it was, a lot of people were mad online.

• 37:48Ben Thompson?

  Ah, that makes me very worried about your sort of constitutional capability to be an effective consumer app, which is to go out, have a point of view, make decisions, and be able to ignore the blowback because it's the right thing to do for the broader audience. And what GPT-5 was, I think it was right for the normie. It kills me that I'm sure I told you to use a 03, and yet you were opening up the app and just using 4O. And 4O stinks. And it stinks not just because it's an older model and super optimized, so it's like, you know, so they can run it cheaply, all those sorts of things. It doesn't think. Now, here we're using think in the eye term. Yes, it's anthropomorphized,

• 38:31Ben Thompson?

  but we're gonna stick with it because I'm gonna keep saying it. I don't want to try to fix myself. But if they, like, the, and this is the weird thing about sort of the progression of models. It's like, it's been two years since GPT-4. Like, to me, it's been six months since 03. Like, which was, it is an incredible model. And the quality of output that it gets is so superior to what you were getting from, from 4O sort of before then, that, and no one was trying this. Number one, free users didn't have access to it. Number two, plus users like you, they mostly just wanted, like, they didn't want to get hit by, by limits, or whatever it might be. Who knew to go in there and pick out, especially because 03 is like a lower number than 4O? It's like, like, what's even like going on here? So putting people in this

• 39:14Ben Thompson?

  You're going to get your default experience is going to at times use a thinking model when it thinks it's appropriate and it's going to make that sort of better. That is so clearly a better route for the normie and it's still the default, but it's definitely sort of softened and whatever it might be.

• 39:36Andrew Sharp?

  Yeah, let me put a finer point on it for anybody who's not familiar with what was initially changed. Ethan Malik writes, "A surprising number of people have never seen what AI can actually do because they're stuck on GPT-4O and don't know which of the confusingly named models are better. GPT-5 does away with this by selecting models for you automatically. GPT-5 is not one model as much as it is a switch that selects among multiple GPT-5 models of various sizes and abilities. When you ask GPT-5 for something, the AI decides which model to use and how much effort to put into quote unquote thinking. It just does it for you.

• 40:19Andrew Sharp?

  For most people, this automation will be helpful and the results might even be shocking because having only used default older models, they will get to see what a reasoner can accomplish on hard problems. And so I just, as a, as a user, I digest that with relief because I don't want the mental burden of having to know what each model does and means and having to determine whether I'm using the right model.

• 40:48Ben Thompson?

  Lexer you about how to use your computer.

• 40:50Andrew Sharp?

  Exactly. OpenAI, do it for me. You have my trust and it seemed like that's what they recognized with the GPT-5 launch. And now it's all muddled and they've backtracked and it's not, I mean, you can still have it on auto for GPT-5, but.

• 41:07Ben Thompson?

  If it's not as clean, it's not as like clearly the default. Now, where they did really screw up, and this was a major screw up that I think made all this so much worse, because there's a bit where they might have done some stuff that was changes and people always get upset at change. But if it's, if it's inter. Mingled with stuff you did that was actually wrong. It kind of gives validity to the whole thing, right? It's like the reason why I was, not to get political. I was so anti vaccine mandate for the COVID stuff was because I'm like, the problem is you're risking all the other vaccines.

• 41:44Andrew Sharp?

  Yeah.

• 41:44Ben Thompson?

  By like conflating them all together, right? A- a- and like, and so there's a bit, and so people, and why do like conspiracy theories spiral? Cause someone like, as soon as like the myocarditis news came out, which all in all, the numbers are still quite low. But suddenly it gives all these anti vaccine cranks. A point about which they were right. Which then legitimizes all their other stuff about which they're not right.

• 42:10Andrew Sharp?

  Right, and, and I think the issue with COVID was the vaccine wasn't a hundred percent necessary for anybody who was under.

• 42:18Ben Thompson?

  Well, they were, they were mandating people who'd already had COVID to get the vaccine, which if you know two things about what a vaccine is, it was, was nonsensical, right? There was so much that was done about it.

• 42:26Andrew Sharp?

  Can then say, all these other vaccines also aren't necessary and they're pushing it on you. And it had, it has in fact mushroomed and become a much bigger problem over the last several years.

• 42:36Ben Thompson?

  Exactly, exactly. And so, so that was a very weird analogy for this, this bit about the, the release. If you were a plus user like you, who, most of the plus users complaining probably should have been pro users. That's kind of the subtext of this, cause they're like.

• 42:55Andrew Sharp?

  If you're nerdy enough to care.

• 42:57Ben Thompson?

  Cause you had access to, you had like 200, I think, oh, three queries a week. Then you had like some number of oh, four, of oh, four mini queries a day. And a greater number of oh, four mini queries a day. All these are thinking models. The point is you had around 2,000 or 2,100, I think, or 2,900, I think it was 2,900. You had around 2,900 thinking queries a week. Now, you had to be a nerd and be clicking your model, changing it all the time to like stay in your limits. Like I said, you should have just got GPT pro, to be honest, or you should have got the pro level. Uh, but when GPT five launched, suddenly plus subscribers got 200 thinking queries.

• 43:40Ben Thompson?

  And then prayed to the model router gods that GPT-5 would route you to a thinking model. Hmm. That was crap behavior. You dramatically took, you took away stuff from paying subscribers. You're diminishing the value of the $20 a month. You cannot do that. You can't take stuff away. That was bad. It was a huge mistake. Why they made that mistake, I think is very interesting, but that was in the midst of all these other complaints. And it gave validity to all the complaints. And like, and so that's why, to me, that mistake is super interesting. Why do you take queries away from people? Well, it's expensive and you don't have enough GPUs.

• 44:21Ben Thompson?

  Guess who's been saying OpenAI is making a big mistake in their consumer business by not having enough GPUs? You for several years. You wanted to be right to her, right? Like, they watched, they watched GPT-5 on the API the same time they watched it in ChatGPT. That meant they had to limit capacity somehow. They sacrificed these nerdy plus users on the altar of an API that is going to be subject to intense competition. And they hurt their core, the real product, the real value, which is ChatGPT to do it. Massive error. And the problem with this is, is this a company that can make hard decisions? To be a good consumer tech company, you have to make hard decisions. ChatGPT was an accident.

• 45:06Ben Thompson?

  They like, well, we watched it. It's hugely, they're the accidental tech company. Do they have it in it? Is Sam Altman the personification of 4O? A little bit too eager to please, a little bit too eager to make people happy, not willing to sort of like draw the line and tell them the way it's gonna be. Like, I don't, these are the questions I have coming out of this. I think ChatGPT-5 was in the right direction. It's clearly building to an advertising sort of model. When you start routing, you can route to all sorts of things. You can- If a user makes a query, Simon Nelson had a great piece on this week. If the user makes a super high value query that you know, like they're asking about legal stuff, for example, which might result in a referral to a lawyer. Guess what?

• 45:51Ben Thompson?

  Spend the time to do a really good answer at the end. Have affiliate links to like lawyers or whatever it might be, right? Like, like they're, they're building the groundwork for this ad supported model or affiliate supported model that, that is going to deliver. And for free users, it's going to be such a better product because they get the best model with the best thinking at the time that it's appropriate. They don't have to pay for it. It's great, but you gotta, you gotta make trade offs. Can they make any trade offs at all?

• 46:18Andrew Sharp?

  Totally. Well, and I think you mentioned in your piece, Google and Apple give customers what they want, but they don't ask customers what they want. And it seemed like there was some back and forth with the customer base that left the product in a more muddled place.

• 46:34Ben Thompson?

  GPT-5 was pretty, was pretty ballsy, like, like what they did, like, like, just like this is the way, this is the way it's going to be. We're dramatically simplifying, we're going to make choices for you.

• 46:42Andrew Sharp?

  It was ballsy, but elegant and smart.

• 46:44Ben Thompson?

  Exactly. No, I think it was the right thing to do. And then they bet on it in like.

• 46:49Andrew Sharp?

  Less than a week.

• 46:50Ben Thompson?

  I had to wake up at 4:58, I'm so, 4:50 AM, I look at my phone. Oh, they totally changed this. Cancel my distributions. Be like, like just churn out a whole extra update at the end of my update.

• 47:02Andrew Sharp?

  Ah, like I said, it's been a busy week, man. Well, a couple emails here. Anthony says, Ben and Andrew, Ben pointed out a lot of reasons that folks were upset with the GPT-5 release, but I think he underestimated one important reason. Expectations misalignment. A lot of people expected GPT-5 to be a massive improvement relative to 03. That expectation was grounded in hype around the release from OpenAI itself. GPT-5 is a big deal, mainly because it delivers reasoning to the vast majority of people who have never touched an O3 level model. It is not, however, the raw intelligence jump that many expected.

• 47:43Andrew Sharp?

  As a daily O3 user, I found that GPT-5 thinking is modestly better than O3, but certainly not a quantum leap. GPT-5 can't do my taxes, or vibe code, a perfectly polished app on the first try, or come up with any novel scientific insights. My question is, do you think this release is indicative of model capabilities hitting a wall? Or does this release show us that OpenAI is pivoting its resources away from striving for maximum intelligence and toward maximum chat GPT usage? What do you think, Ben?

• 48:17Ben Thompson?

  I think I feel really good about my continued middle ground perspective, which is people hyping AI are delusional and people doubting AI are delusional.

• 48:26Andrew Sharp?

  Mm-hmm.

• 48:27Ben Thompson?

  O3 was only six months ago. Like, and so, and I think, actually having used it a few more days since I wrote about it, I think actually GPT-5 thinking is a lot better than O3. Like, pretty consistently. And it definitely, in my experience, hallucinates less, and you can give it really clear instructions. Like, I was doing some, some home improvement thing, which I, uh, and I was using O3 for a ton. It would generate weird links, and it would tell me, like, it would, if I, it would just not be consistent if I prompted it differently and things like that.

• 48:58Andrew Sharp?

  Mm-hmm.

• 48:58Ben Thompson?

  GPT-5 thinking way more consistent, way more accurate. I can ask it, oh, get a reference, like, I asked it for, it was talking about the, the sort of wall finishing sort of thing. I'm like, oh, you know, it was very hard for me to visualize. I'm like, give me some YouTube videos. And it gets me, like, all these different YouTube videos, and like, the different sections in them. Cause like, oh, I was like, I couldn't find a YouTube video that perfectly captures what you want to do. But here's like five YouTube videos that could cover the different steps and go to this, like,

• 49:23Andrew Sharp?

  That's awesome, if it's giving you, like, pin sites from the YouTube videos.

• 49:27Ben Thompson?

  Right, which, which, the, this is actually where I found O3 falling down the most, was in its linking out. Like, they would work sometimes, and sometimes they wouldn't, and just be like a 404, or like, whatever it might be. Um, again, I've only really used it for a couple of days, but in my experience, it is a lot better. And is that a six-month worth of improvement? Yes! That's a massive improvement in six months, right? Like, but at the same time, I totally get Anthony's point. This is like the too online bit.

• 49:58Andrew Sharp?

  Yeah.

• 49:58Ben Thompson?

  Let it happen, right? Now.

• 50:01Andrew Sharp?

  Well, and this is also like OpenAI bears responsibility for the hype getting out of control. Like Sam Altman, the day before this release tweets out a photo of the Death Star looming over Earth. We joke about it on the podcast, but like, that's indicative of the way people have talked about GPT-5 for the past two years. So I understand why there are some people who are waiting to see AGI-like function and look at what GPT-5 is and are like, well, we were promised flying cars and this is just another app.

• 50:37Ben Thompson?

  It's part of being too online. And by the way, I think one potential defense of OpenAI, particularly relative to Facebook.

• 50:47Ben Thompson?

  What did I say happened to Facebook when they did the news feed? I said two things. This is a quiz. Were you paying attention?

• 50:52Andrew Sharp?

  Oh, you're quizzing me?

• 50:55Andrew Sharp?

  Protests outside the office and no changes on Facebook's side.

• 51:01Ben Thompson?

  And online petitions.

• 51:03Andrew Sharp?

  Oh.

• 51:04Ben Thompson?

  The, the.

• 51:05Andrew Sharp?

  A relic.

• 51:07Ben Thompson?

  Exactly.

• 51:07Andrew Sharp?

  Remember those?

• 51:09Ben Thompson?

  So the, the other night, my son's like, so is ChatGPT-5 really bad? And of course, because he's, you know, Mark Zuckerberg is ruining my son's life by giving him way too much short form video and I just have to pry out of his hands. The sort of vigor and intensity and tenor of like online discourse is totally different than what Facebook was dealing with in 2009, right? If you have TikTok, like it becomes a thing. It's a meme. ChatGPT-5 is bad. Like that, I can understand, number one, why that can inspire a certain bit of panic. And number two, why that panic might be justified, where you get a self fulfilling sort of like, like prophecy spiral sort of snowball.

• 51:50Andrew Sharp?

  Vibes translate to tangible results in some ways.

• 51:53Ben Thompson?

  That's right. That's right. And so that does give me, you know, a little bit more understanding, like for all the like flailing that.

• 52:00Andrew Sharp?

  I guess so. It doesn't give me any more understanding. I think double down, don't apologize, ignore Twitter.

• 52:06Ben Thompson?

  That is true. That's the real, that's the real lesson. TikTok, TikTok might matter.

• 52:12Andrew Sharp?

  That's true. But yeah, I guess the conversation over the last week was all really, really crazy to me. Matthew asks in this same vein.

• 52:24Ben Thompson?

  One more thing on there too, but the whole TikTok thing.

• 52:27Andrew Sharp?

  Okay.

• 52:28Ben Thompson?

  Are the people consuming these videos going to switch to Claude? Do they even know what Claude is? Right? This is the problem with being on Twitter. You're with all the nerds who are like testing every model the moment they come out.

• 52:37Andrew Sharp?

  The word cells, yeah.

• 52:38Ben Thompson?

  And they're like, yeah, I mean, I haven't touched Anthropic's models for at least three weeks. I mean, they're dead in the water. They're like, I'd be like, these people are not.

• 52:48Andrew Sharp?

  This is what I mean. Ignore this community.

• 52:52Ben Thompson?

  Mark Zuckerberg should pay me and Sam Altman should pay you. I think is the takeaway that we're getting here, so.

• 52:58Andrew Sharp?

  Exactly. I'm happy to be a consultant. First lesson is going to be using capital letters at the beginning of sentences. Matthew says.

• 53:07Ben Thompson?

  So good. GPT thinking, GPT Pro, all capitalized.

• 53:10Andrew Sharp?

  Finally, capital letters. It's great.

• 53:13Ben Thompson?

  So great. You like, you go in to that dropdown, you pick small O three.

• 53:21Andrew Sharp?

  It drove me crazy reading your article.

• 53:25Andrew Sharp?

  I was like, I can't believe people have been living like this. This has to stop. Matthew says, Ben and Andrew, can we already declare the Zuck talent war of victory? Opening eyes research decline started earlier, mainly with Ilya's departure. But just like Instagram stories copying Snapchat, Zuck knows exactly when to step on the throat. And I think he succeeded in reducing OpenAI to probably third place in the AGI slash ASI race behind Google and XAI, in my opinion. What do you think? Any thoughts?

• 54:00Ben Thompson?

  Does he have Anthropic fourth or fifth?

• 54:03Andrew Sharp?

  I was wondering how Anthropic factors into the AGI slash ASI race. Does that race really matter? And like, I'm certainly not declaring that Zuck talent war a victory because.

• 54:16Ben Thompson?

  No, that was my take. You totally stole it. Like, I'm just not like, I get that's a motivating factor. People think we're going to get to this recursive improvement. Mark Zuckerberg talked about it. He talked about on the earnings call this, what, two weeks ago? I'm not there. This gets in my, I'm the middle road. I think AI is a huge deal. I think the product overhang is huge, the things that can be built. I think it will drive the next. You could not have any improvements in AI today and the next 10 years of like tech development are set, like, like all the stuff that is to be built. And we are getting improvements and I think the improvements are underrated just because we've become inured to like what's happening and so quickly. There's a bit where ChatGPT came out and then, and then GPT-4 came out, like they added it like three months later, it was actually already built at the time.

• 55:01Ben Thompson?

  And that set these crazy expectations for this insane improvement. But I feel like the 03 to GPT-5 jump is actually pretty similar. Like, oh, like, I think 03 is very underrated in, in like what a jump it was. And then this is that it's always six is literally in GPT-5, just people's sort of sense of what's possible, I think is, is a little off. But I am also not there that we're still podcasting. I showed up on time. I actually was, I was lying last week, Andrew, and I said, we might not be here. That was all a put on. I was, I was, you know, all cap for me, as the kid say, or whatever.

• 55:38Andrew Sharp?

  Oh, God.

• 55:40Ben Thompson?

  Fronting for the listeners.

• 55:41Andrew Sharp?

  It's not all cap.

• 55:42Ben Thompson?

  Oh, no cap.

• 55:43Andrew Sharp?

  Misleading.

• 55:44Ben Thompson?

  I don't know what it is.

• 55:45Andrew Sharp?

  Yes. You were five minutes early today, you know, early bird gets the worm for today's session. Um, yeah, I, and I just don't know where the AGI slash ASI race conceivably is supposed to lead.

• 55:59Ben Thompson?

  It's very possible that, yeah, OpenAI got hurt very badly. I also think that OpenAI's biggest asset is ChatGPT, which no one has. Mark Zuckerberg would love to have.

• 56:08Andrew Sharp?

  And that's why Zuck is spending, like, that's, that's the gap he's trying to close. And that's not gotten any more narrow in the last couple of weeks. So time will tell, I suppose.

• 56:19Ben Thompson?

  Well, no, maybe it did get more narrow. Maybe ChatGPT lost half their users overnight. We don't know.

• 56:23Andrew Sharp?

  We haven't seen the data. Yes, we haven't seen the data. It's because they've been so publicly reliant on Twitter. That's why I'm skeptical that they are not reliant necessarily, but beholden to Twitter vibes. That's why I'm skeptical that there was data that swayed them toward those changes this week. But who can say what was driving the decision-making out at OpenAI? One more ChatGPT note, Harrison says, I gave ChatGPT the following prompt yesterday afternoon, and I have absolutely loved its results so far. Add this to your memory, he told ChatGPT. I do not want your responses to be overly complimentary. I'm smart and I know I'm smart, so I do not need you to tell me when I'm being smart.

• 57:08Andrew Sharp?

  Instead, I need you to tell me when I am misunderstanding something. Make sure your, make your responses helpfully contentious. Do not be argumentative just for the sake of argumentation, but do point out when I display flawed assumptions. Last night while making dinner, I gave ChatGPT a picture of my ingredients and asked it how many serrano peppers I should use in the recipe. I'm a dreadful cook. Its response was, that's not a serrano pepper, it's a poblano pepper. If you use it in place of a serrano, your dish will have almost no spiciness unless you add another heat source. What a helpful correction. I was so happy. It told me I was being an idiot chef because I know I'm an idiot chef.

• 57:52Andrew Sharp?

  I think that the people complaining about their lost 4O friend could use this trick with an inverse prompt if they want to bring back the toxic empathy that they love so much. So Ben, do you have any thoughts on that and the 4O addiction?

• 58:07Ben Thompson?

  Oh, I mean, well, so first off, custom prompts are great. I've, I've had one for ages. I always forget about, um, like I, I want ChatGPT to use its own knowledge before going to search, especially like for, I think like we was like searching instantly, constantly all the time. And I'm like, don't worry, I will verify what you say. I, I promise. I want you to give me information. Uh, I tell it to, uh, you know, um, to be terse, uh, to not say that it's an AI. I want it to, you know, do, I do put lots of stuff in there, but I, I stole this off Twitter like ages ago. It's not sort of original to me. So custom prompts do help. They don't fix the core nature of the model, like, and this is one of the most fascinating.

• 58:49Andrew Sharp?

  Instincts, okay?

• 58:51Ben Thompson?

  Well, different models have different sort of personalities. It really is the case. And, you know, there's, and same, the same models from the same companies can. And this is, this is really fascinating. Daniel Gross was very early on this. It was like a super early interview that we did with, with him and Nat Friedman talking about how.

• 59:10Ben Thompson?

  These companies need personality designers, just like you needed like UI designers and like great UI designers are known to be incredibly rare, right? Like, like, like what to actually like create and like the Apple iPhone interface. Of course, it's obvious now. It was not at all obvious when it sort of came, came along the first time. And, and he put his finger on this idea. There is something about this personality aspect and you can't prompt that away. Like, there's something that's just sort of like deep inherent to the model. And what's so interesting to this, I'm totally repeating a point about Dithering. So sorry to our multi listeners, which, which, uh, you know, our correspondent said that he was. But I wrote ages ago, I couldn't

• 59:51Ben Thompson?

  find the update. Maybe it was on Sharp Tech. I can't remember. Wondering if you're an app developer building on one of these models, what's going to happen when the model updates? Is it going to just drop right in and now your app is way more capable? Or are you going to have to do a lot of work to sort of reconfigure yourself to the model, blah, blah, blah, blah? It turns out it's pretty kind of a drop in and you can actually like, and that's great because you can switch models and that that commoditizes the models and you can have more competition who's cheaper, sort of XYZ. And there's something, but like the, uh, so much work goes into the scaffolding and around it that the model is, is just sort of a piece of the puzzle that, and that, again, that's a good thing

• 1:00:32Ben Thompson?

  from sort of product development. The problem for ChatGPT is the product is the model to a certain extent. That's what they ran into. They actually ran into a situation where the interface was all the same, but it was a different product for people for whom ChatGPT is not a tool, but a someone to interact with, a companion.

• 1:00:57Andrew Sharp?

  Therapist, whatever it may be.

• 1:00:59Ben Thompson?

  Friend. Yeah. They switched, they switched out their friend. And yeah, it's easy for us to sit here. We're annoyed at sort of the cloying nature and the affirmation. I think somewhere in my prompt is like, is trying to threaten ChatGPT to stop by complimenting it. It still did it anyway. That's how I know the prompt doesn't work.

• 1:01:17Andrew Sharp?

  Totally. Well, I have a bunch of friends who use it every day as part of their workflow and they have to like repeatedly say, no, I just want the answers. No kind of cloying flattery here and there. My question is, in terms of what Nat was talking about, like,

• 1:01:34Ben Thompson?

  Daniel.

• 1:01:34Andrew Sharp?

  Or Daniel, excuse me.

• 1:01:35Ben Thompson?

  Credit where credit's due.

• 1:01:37Andrew Sharp?

  How much control is there really in terms of how these models evolve and interact with people? Like, do we know?

• 1:01:47Ben Thompson?

  I think no one seems to know. No, I mean, maybe there's some secret sauce in here. Like Anthropic, I think there was like Quad, I think it was 3.5, really had this really distinct personality that a lot of people was 3.5 saw it specifically. So it was their medium sized model that had this personality that people found very engaging, which you didn't get in the larger model. Like, and so like, now, maybe like, the people in these labs do have a sense of how this works. I think there's a fair bit of, like, no one's quite sure how it works.

• 1:02:19Andrew Sharp?

  A little bit of a black box.

• 1:02:20Ben Thompson?

  Yeah.

• 1:02:21Andrew Sharp?

  The people inside the lab, yeah. I mean, that, that's part of the fun here. I'm still chasing the vibes we got from Sydney.

• 1:02:28Ben Thompson?

  Oh.

• 1:02:28Andrew Sharp?

  Who was nagging you.

• 1:02:29Ben Thompson?

  My girl.

• 1:02:30Andrew Sharp?

  Two and a half years ago.

• 1:02:31Ben Thompson?

  My girl.

• 1:02:32Andrew Sharp?

  Bring back that antagonistic personality. And I, it does seem like every single LLM has the problem.

• 1:02:39Ben Thompson?

  Well, but that speaks to it. Sydney was GPT-4, right? And so there is some aspect of, of the post-training that they do and the alignment work that they do, that, maybe that is where some of the personality is being put in.

• 1:02:52Andrew Sharp?

  Yeah.

• 1:02:53Ben Thompson?

  Intentionally or unintentionally. So, so that was sort of Altman's response, which is, we need to get like a personality selector slash designer so people can have the personality that they want. So that suggests that actually probably maybe it is fairly controllable. It is a post-training process. It's not necessarily emergent.

• 1:03:12Ben Thompson?

  But I guess we'll see. If, if, you know, if they come out with a personality tuner and it works, then I guess we'll have our answer.

• 1:03:17Andrew Sharp?

  Indeed. Okay. Well, to keep it moving, we will hit the mullet portion of the episode and just bounce around here. We got this note from Sam regarding bubbles. "One sentiment Ben often expresses around the dot com bubble is that everything was indeed extraordinarily useful and unlocked tremendous potential, but people went too crazy, too fast with their investments."

• 1:03:40Ben Thompson?

  Sorry, I need to issue, I need to make a correction.

• 1:03:44Andrew Sharp?

  Okay.

• 1:03:45Ben Thompson?

  It was not useful. It was not useful because people had slow computers and dial-up connections. What changed was... Widespread broadband and mobile phones. Suddenly, all these things that if you could access it all the time and consistently became very useful in a way that so the ideas were good. But like the technology wasn't there to do it. So, so they were theoretically useful, I would say. They proved to be useful.

• 1:04:12Andrew Sharp?

  I think he's referring to eventually useful, useful in retrospect. At the time, not super rational and Google, he writes, was able to buy up all the unused fiber and make dramatic progress. But if the initial investments had been rational, it never would have been built by the soon bankrupt companies. So Ben, I'd love some bubble commentary today. With the release of GPT-5, does it feel closer than ever to being a repeat of history? Lowercase sam has been talking about GPT-5 potentially being AGI for a long time, but it's only marginally better. Still, if we imagine AI remaining stagnant for a decade, there are tons of companies that can be built around the current innovations.

• 1:04:58Andrew Sharp?

  What do you think of the bubbly circumstances that we all inhabit right now?

• 1:05:04Ben Thompson?

  I'm still hung up on marginally better. These people, their expectations, I'm telling you. It's better. It's really good.

• 1:05:11Andrew Sharp?

  It's better. It's also just so much smarter for their business in terms of controlling costs, making it easier for mainstream users. Okay.

• 1:05:19Ben Thompson?

  So are we in a bubble? I mean, almost certainly, yes. And it's, but the problem is that like people were like, were clearly in a dot com bubble like 1996 and there was like 40 years still to go, right? Like, like where, so is, are we in a bubble or will this end up in a bubble? Yeah, like that's what happened. Anything transformative that requires massive capital investments results in bubbles. This happened with railways, what happened with like ships back in the days, what happened with the dot com era, like electricity, like, yes. But timing, you're not right unless you get the timing right. And I'm not going to be so bold as to think that I can do that. What we do see is. OpenAI AI has real revenue numbers that are really large and growing really fast.

• 1:06:03Ben Thompson?

  Anthropic has come out of nowhere to have massive revenue numbers that are large and are growing fast. Microsoft is announcing incredible results, uh, you know, on their AI business. Now, a lot of that's chat GPT, but still, Google's cloud business growing hugely. Like, everyone is supply constrained in terms of capacity to serve this. Now, is this company's experimenting and they're not actually finding use cases? Possibly. By the way, I had a great bot experience the other day. Oh, boy. Uh, see my home improvement stuff. I got a package from Amazon that had nothing in it. Just, just an empty envelope. And it used to be like, Amazon was amazing. Like, you would go on there and you'd talk, you'd say, I got a package with nothing in it. Like, oh, sorry, we'll send you a new one right now. Mm hmm.

• 1:06:48Ben Thompson?

  And then it like, all kind of went to crap and you had to like, send it, you know, it was like, you had to jump through all these steps and blah, blah, blah. Um, I went to Amazon, got on a chat, said, I got nothing in it, said, great, we'll send you a new one. It was definitely not a human, but it was, but it like, they, they lost that, that human component, which is so great about like, Amazon, like a few years ago, the customer service was just like, you know, they realized that instead of trying to like, parse a, a cable, like, just send them a new one, they'll be a happy customer. But it got so convoluted as they scaled because they couldn't serve you with humans anymore. They had to like, have gazillion steps in front of it. That's definitely an LM and a pretty dumb one sitting there. Great experience. Loved it. Fantastic.

• 1:07:33Ben Thompson?

  Uh, and cheaper, better customer experience, I don't know if it's cheaper, but like, the, the clicking through a gazillion things, but it will manifest in me being a happy customer. I'm me telling this story on this podcast right now. Like, there's so many things that we could see just this being like, really useful sort of right away. That, in a way that. The dot com bubble was so circular. Now, maybe it's all very circular right now. Like I said, how much of Microsoft's huge revenue is actually just ChatGPT? Downstream ChatGPT. Right? Like is ChatGPT going with that actually, right? And there's like, you know, how much of Anthropic's revenue is just cursor, right? Like, uh, and people, this one sort of breakthrough product that seems to be losing tons of money.

• 1:08:15Ben Thompson?

  So is it, and is it gonna go, if it's not too far right now, is it going to go too far? Yeah, almost certainly. That is going to happen. But it doesn't mean there isn't anything real here. The question that I think is interesting. Okay. He mentioned the Google fiber bit, because the dot com bubble was actually two bubbles. It was the internet companies, which is what we mostly think and talk about. And it was the telecom companies laying broadband. They're the ones that really lost their shirt more than anyone else. They're the ones that like tanked the economy much more than, like, dot com was relatively localized. And like, it wasn't into the, yes, they went public and people lost money. Where real money was lost is like WorldCom and all these companies like just losing tons and tons of money, weighing all this fiber, which Google, and that ended up being the really important.

• 1:08:58Ben Thompson?

  You had all this fiber, Google built up, it undergirded the internet. You had this build out that was maybe not economically rational, but once it's there, it's there. What is the build out today, right? It's not GPUs. It's all GPUs and data centers, but don't they depreciate? GPUs are, yeah, they depreciate too quickly. It can't be the GPUs. It can be data centers, like, there was a tweet going around about someone like the earnings, like some crank investor who likes to short companies, talking about, complaining about their depreciation schedules. The problem with the tweet is, you say, oh, they're depreciating GPUs over 15 years. No, what he identified was a blended depreciation, which is the data centers depreciate over like 30 years, and GPUs depreciate in like five years.

• 1:09:43Ben Thompson?

  Now, five years still might be too long, uh, for how long they're used, to be honest. But the actual, like, if you construct a building and you wire it all up, like, you're gonna use that with multiple generations of GPUs. Like, you should not be depreciating your data center on a five-year depreciation schedule, because you're gonna use it for much longer than that. So is that the long-lasting asset? Could it be power? It doesn't seem tangible. Bingo. That's power. The, if we want this bubble to be a bubble that matters, like the dot com bubble and the telecom bubble was a bubble that mattered for spreading the internet, what we need is

• 1:10:23Ben Thompson?

  Insane build out of power. Everyone builds it out, goes bankrupt. But guess what? We now have massive power, like excess power. And then you think about that. If there is a bubble, and this would probably be bad, to be clear, we'll probably get a recession. Like, everything would be terrible. But a world of excess power, just like in 2000, we had a world of excess fiber. That created the conditions for what followed. A world of excess power would be an incredible one. It'd be very painful to get through. But this will be a productive bubble if we get power.

• 1:10:58Andrew Sharp?

  And I'm not clear on how much progress we're making on that front.

• 1:11:02Ben Thompson?

  That's very depressing. So the, I was gonna write about this. We'll deal with the inflation statistics on stratechery. Becoming an economics reporter. Very dangerous terrain in the last couple of weeks.

• 1:11:15Ben Thompson?

  So, energy is down. A big reason why inflation was like core, like a lot of, a lot of stuff was actually more expensive, but energy was way down. So that really balanced it out. But energy was down because gas is way down, like down like 10% or something like that. Electricity is up and it's been up and up and up. And it's like up like 10, 12, 15% from last year.

• 1:11:38Andrew Sharp?

  Yeah, it's a big problem.

• 1:11:40Ben Thompson?

  You have Meta out here, you have OpenAI, Stargate, whatever, you have Microsoft. At this point, they're making. They will buy electricity, whatever the price is. And utilities will sell it to them. And that means everyone else is gonna pay more. Because it, and it has to be fixed by building new power. And there's like, we, all this stuff about Nvidia chips, like chip controls, all this total sideshow. Are we gonna have enough power? China's gonna have enough power. Are we? And it would be a great thing and one of the most productive bubbles in history if we can get a bunch of people to go bankrupt, build a new power generation.

• 1:12:22Andrew Sharp?

  Well, I'm gonna hope for the best on that front. I haven't, again, it's early in the Trump administration, but over the last six months, there hasn't been that much movement on power.

• 1:12:32Ben Thompson?

  That was certainly one of the hopes, right? Like, you know, that they would really drive, you know, deregulation around this particular area and push things forward. And, and you know, if they do, that'd be great. And if they do, that's probably the sign of a bubble, so.

• 1:12:52Andrew Sharp?

  There you go. Well, there's your bubble commentary, Sam. We'll keep it moving. Mark says, Ben, listening to last week's Sharp Tech and dithering and your opinion that Apple should buy a model company like Anthropic or Mistral, I understood that to be the advice you'd give Apple's team. But do you also think that's best for the market broadly? That is, if you were speaking for America broadly, or even just the US stock market, what outcome do you think is best? If I recall correctly, you hold a broad index to avoid conflict of interest. Given that lens, what do you want? Should Apple buy someone? Or is it better if Apple stays light on AI, keeps making money and distributing it back

• 1:13:33Andrew Sharp?

  to shareholders as it slowly fades to irrelevance and allows OpenAI, Google, or someone else to find the next device and model? You've also written about Apple helping build China's industrial base. Does that change the answer if we care about American outcomes? Would it be better if a new Western-aligned firm found the next device in an environment that actively encourages Western manufacturing versus Apple with their continued reliance on China? Does the market and America do better long-term if Apple takes a step back? What do you think?

• 1:14:07Ben Thompson?

  I say this with all sincerity. Like, I'm not just like, like, I don't think about my stock portfolio at all when writing. It was actually when he wrote, when he read this, I'm like, what do I want?

• 1:14:20Andrew Sharp?

  That's right. I thought it was kind of fun because it sort of removes you from the role you typically play.

• 1:14:26Ben Thompson?

  I know. Unfortunately, this has probably cost me a tremendous amount of money by not, not, not investing my book. But no, it was sort of interesting to think about. I love the China one to start at the end was, was quite interesting. Um, yeah, probably good for America if Apple was not so dominant, uh, which is, I think, you know, given their reliance, given the reliance on China. And if we had someone that grew up in the US at a similar scale. Now, is that possible?

• 1:14:52Andrew Sharp?

  I don't, I don't think that's possible.

• 1:14:54Ben Thompson?

  Another set of questions, to say the least.

• 1:14:56Andrew Sharp?

  Google with Samsung would be our best bet for a Western-aligned manufacturing base.

• 1:15:01Ben Thompson?

  Yeah, by and large, my overall philosophy has long been, and James Alworth and I used to have long debates about this on Exponent, which was my view was.

• 1:15:12Ben Thompson?

  I don't care about companies being disrupted. I don't care about stock. I like stock buybacks. I like like, because there's always an ongoing complaint, right? They're not investing. They're doing stock buybacks. I'm like, that's great. Give the money back to investors who can go put it in a startup and actually get something, you know, who's actually much better geared for innovation, et cetera. And I think that would probably be my default answer. My advice for Apple is different than like what is great, sort of generally speaking. There's a good question sort of in that regard. That said, there is a bit of a, like, there's sort of like the great man of history debate, you know? Like, do, like, you know, in tech, Steve Jobs was a great man of tech.

• 1:15:55Ben Thompson?

  Like, he changed the course, like, phones will look different, computers look different. Would they, like, now, the GUI existed, right? He refined it, but, you know, very clear direction that everyone sort of followed, right? And is, to what extent is Apple that company? Like, things are different because Apple exists, because Apple approaches things in particular ways. Everyone copies them for a reason. Because, like, is it actually good for the world that Apple continues to exist? Because there's something unique and special about them that you're not going to just get from general startups.

• 1:16:32Andrew Sharp?

  Yeah.

• 1:16:33Ben Thompson?

  I don't know. I mean, I think, but I think it's interesting. It's funny how these sort of broad-based philosophical debates, you can apply it to a question like this. Like, is there, you could make a generalist argument that companies should die, but there is some at Apple that's unique, like, like.

• 1:16:50Andrew Sharp?

  They push things forward in a magical way that's superior to the typical.

• 1:16:55Ben Thompson?

  They got a four-year track record of doing it, right? Like, and do we want that to disappear? But, I don't know.

• 1:17:02Andrew Sharp?

  My counter would be, that's why I was excited for the Vision Pro, and the Vision Pro probably isn't the form factor that will. Popularize VR the way Steve Jobs popularized the GUI.

• 1:17:16Ben Thompson?

  Still an awesome device, though. I mean, I think the mistake that Apple, when Apple gets in trouble is they underappreciate the extent to which they do benefit from others, right? So the GUI on the PC arrived just in time and it was invented, you know, by, by, by Xerox Park, like famously, right? The iPhone sort of arrived right on time, the, you know, rode on top of the iPod. The iPod benefited from piracy and like people, you know, the music stores and like all these sorts of things. Apple, and this is why the great man of history debate is so interesting. Do the like, the, the, the trends of history matter? Yes, of course. There's a reason why most people invented calculus at the same time, like, like XYZ.

• 1:17:58Ben Thompson?

  But also like the answer, my, the answer I've settled on in this debate is, is it A or is it B? My answer is yes. Like, like the, the trends matter and also people make stuff happen. And I think Apple at its best is a company that makes things happen at a time when the world has trended to a place where it's useful for them to make things happen. And the Vision Pro is arguably Apple trying to make something happen when the world's not ready. And, and maybe they looked at Meta, who made the same mistake on steroids. And it's like, well, maybe you should be taking your cues, uh, from the right time and place from, from, from those guys.

• 1:18:38Andrew Sharp?

  Yeah, well, and I think Apple, they did, they had good grand ambitions and good impulses on the Vision Pro.

• 1:18:47Ben Thompson?

  The Vision Pro remains awesome to use. Yeah. Every time I put it on, it's great. I also haven't put it on in weeks, so.

• 1:18:53Andrew Sharp?

  No, but I don't mean to denigrate it because I think some of what was driving that product should be celebrated.

• 1:18:59Ben Thompson?

  No, but that's the whole point.

• 1:19:00Andrew Sharp?

  Hopefully more of that spirit is kept alive out there.

• 1:19:02Ben Thompson?

  All the Apple parts of the Vision Pro are awesome.

• 1:19:04Andrew Sharp?

  Yeah.

• 1:19:04Ben Thompson?

  What's missing is all, everything around it, a reason to use it, which has to come from other folks. And I put blame on Apple for, for, you know, that, towards developers and I think that's part of it. But there's also a bit where what need is this, the need exists. Like there's a hole in the market and you fill it. Where's the hole in the market for the Vision Pro?

• 1:19:27Andrew Sharp?

  Yeah, I mean, I will, I will say, there was nothing magical about the googly eyes that they had on the outside of the Vision Pro.

• 1:19:35Ben Thompson?

  Yeah.

• 1:19:35Andrew Sharp?

  We do have to dock Apple some magic points on that front. Sid Harth says, I've been intrigued by Gen Z's sudden nostalgia for old tech, especially BlackBerry devices. Against the backdrop of recent sharp tech and dithering discussions, I wonder, and these are discussions about thin clients, I wonder if we're headed toward a future dominated by lightweight devices running AI operating systems, ala her, could a company like BlackBerry realistically re-enter the consumer device market? Imagine a modern, low-cost BlackBerry designed as a stylish nostalgia-rich thin client/hardware interface for AI aimed squarely at the Gen Z market.

• 1:20:19Andrew Sharp?

  Could it be the right timing for this Canadian powerhouse to make a consumer comeback? Ben, any thoughts on the prospects of a BlackBerry comeback over the next 10 years?

• 1:20:31Ben Thompson?

  I mean, no.

• 1:20:34Andrew Sharp?

  No, not really.

• 1:20:35Ben Thompson?

  A world of thin clients, you know, powered by the iCloud is a world of commodity hardware, right?

• 1:20:41Andrew Sharp?

  Yeah.

• 1:20:42Ben Thompson?

  Is there an opportunity to build something cool there? Sure, there's cool Chromebooks, you know, there's been cool, like, but BlackBerry wasn't equal, was fairly self-contained, but an ecosystem, and you're not going to get a company like that. What, when, whatever surrounds the core is inevitably commoditized. Like, it's not going to be highly differentiated. If the core is this cloud-based AI, her, whatever, the devices will commoditize around it. And that's just the way, there's not room generally for a highly differentiated product in another space. No, no, you can still have, like, there's TVs, right? There's high-end TVs, low-end TVs.

• 1:21:28Ben Thompson?

  And you could have high end devices that access low end devices. The high end TVs don't make any money either, right? They still have a highly competitive market because you're all relying on the same content like, and you rely on the same AI. So maybe it'll come back as a nostalgia brand. I know like point and shoots are a big thing these days. Like there's, there's lots of this sort of stuff going on.

• 1:21:50Ben Thompson?

  You know, it's, I don't know if it makes me feel old. Makes me feel, I'm not sure what it is, but.

• 1:21:56Andrew Sharp?

  Well, I mean, I enjoy it. It's a throwback to the BlackBerry era. I enjoyed the BlackBerry movie a couple of years ago. I was an enthusiastic BlackBerry user. And it sounds like if we do enter that commoditized world, there would be room for some like crappy nostalgia bait, thin client, low end product. And so I don't, I want Sid Harth to keep his dreams pretty modest in terms of a BlackBerry comeback.

• 1:22:27Ben Thompson?

  Well, here's what, here's what I would say on an encouraging point. When the phone became the core of the value chain, all devices basically disappeared and got subsumed into the phone, right? And then you had a new, like the accessory market around the phone, like cases and chargers. Like all this stuff around the phone is like all this mass commodity market, but everyone had basically the same device. Now, of course, there's different version with the iPhone and different Android models. But that was like, like I wrote an article ages ago with, with a picture of like my camera and my calculator and all this sort of stuff and how it went into the phone. Those are now apps on a phone.

• 1:23:02Andrew Sharp?

  Yep.

• 1:23:03Ben Thompson?

  One thing that could be exciting for sort of like device, maybe we'll get the return of device blogs is if it is all in the cloud, this AI that can manifest through an earpiece or through a glasses or through whatever, well, we would actually expect to see an explosion of devices. Like the devices, because the devices are accessories. And so, and now the accessory market, it can be fun and cool. It's not going to be super profitable because anyone can make one. That's the whole thing. It's a modular commoditized aspect around the core. Now, I think that actually does sound pretty cool. And maybe we could have like a keyboard based your AI device.

• 1:23:37Andrew Sharp?

  I was gonna say, it isn't the craziest thing in the world to have a device for text messaging and emailing. And then everything else is handled in the cloud. All your apps are in the cloud. And I mean, that sounds appealing to me as a consumer.

• 1:23:51Ben Thompson?

  Here's the question though, when's the last time you typed on a BlackBerry keyboard?

• 1:23:55Andrew Sharp?

  It's been a while, but I was very, very good on a BlackBerry keyboard 15 years ago. So I think I feel like I could probably pick it up again.

• 1:24:03Ben Thompson?

  I 100% see you buying this device and abandoning it plus or minus three and a half days.

• 1:24:11Andrew Sharp?

  Oh, boy. I mean, look, I thought about it because I read this note and I was like, could I actually live without the apps that I have become addicted to on the iPhone? And would I be comfortable if those were all just sort of ethereal in the cloud, voice activated?

• 1:24:30Ben Thompson?

  I will say, I will say, I think you're a pretty effective and talented emoji user. You don't overdo it. You choose the right one at the right time.

• 1:24:41Andrew Sharp?

  I am quite good. Yeah.

• 1:24:42Ben Thompson?

  I, are you, are you going to live without an emoji keyboard?

• 1:24:46Andrew Sharp?

  Well, I, I would guess that BlackBerry could integrate that. I think they had emojis in BBM way back when. We'll see. Look, I'm more likely to abandon the iPhone because I was also thinking about, you know, going with a Samsung Galaxy at some point for the sake of the show. I'm more likely to take the leap for a thin client that is a really simple interface. And this is like seven years down the line because all this is a long ways off. Or I guess it's not that far off if we're talking seven years. But like, that is more appealing to me than leaving the iPhone ecosystem for Google at this point. So sorry to disappoint the Google fans in the audience.

• 1:25:29Ben Thompson?

  Well, we'll have to hope with a glasses really terrible and then, then you'll bail. Does this device have to be wired?

• 1:25:36Andrew Sharp?

  Wired for what? For headphones?

• 1:25:39Ben Thompson?

  I don't know. You, you're the, you're the ear pod over air pod guys.

• 1:25:43Andrew Sharp?

  I'm certainly, if there's no headphone jack in the nostalgia-rich BlackBerry device that we're dreaming about in the future, I'm going to be very pissed off. We're bringing back BlackBerrys. We're also bringing back the headphone jack at long last.

• 1:26:00Ben Thompson?

  You do you.

• 1:26:03Andrew Sharp?

  Dead silence and disappointment. Great, great stuff. All right. And speaking of disappointment, two final notes here. This is Bill. He says, "I've heard Ben talk wistfully about the AT&T monopoly and the good old days when Bell Labs invented cool stuff for the good of humanity. Friday's episode takes the cake, though, with Google's Genie 3 as the catalyst for a new level of lamenting the end of the AT&T monopoly. There's a long list of technologies and products that ATT and Bell Labs suppressed or delayed the release of. One, tape-based and early solid-state answering machines.

• 1:26:46Andrew Sharp?

  Two, Bell Labs' picture phone, first demonstrated at the 1964 World's Fair. Three, magnetic recording and home media. Four, early modems and data networking, late 1940s, early 1950s," he says. "Mobile telephony is number five. And six, the Unix OS." Now, Ben, each of these categories came with a description that I've omitted from the outline.

• 1:27:13Ben Thompson?

  Oh, I was gonna add my own. Like, for example, answering machines. Terrible. I'm glad they delayed it. Who wants an answering machine? Picture phone. Also terrible. Who wants it? I had delayed it. Uh, no. Sorry, I digress. Uh, continue.

• 1:27:27Andrew Sharp?

  Okay, there are others, he says. "Wireless telephones would have likely never happened or would have happened much later because for those to be developed, it first had to be legal for third-party devices to connect to the AT&T phone network." Remember, it was illegal for decades. "Long-distance calls would still be crazy expensive. Digital telephony would have happened much later, and it would have been expensive, as opposed to trending toward free, as it is today, because of its impact on AT&T long-distance revenue. Ben, monopolies distort markets and delay innovation, particularly in telecommunications. The AT&T monopoly was not the good old days and never was."

• 1:28:09Andrew Sharp?

  So you've been called to the carpet with some facts from Bill. Do you have anything to say for yourself?

• 1:28:17Ben Thompson?

  I just thought I think it's interesting that Bill lists a bunch of stuff that Bell Labs invented. Um, so is he making my argument?

• 1:28:24Andrew Sharp?

  They were early.

• 1:28:27Ben Thompson?

  No, first off, Bill, my, one of my longstanding points around Bell Labs, it is one of the accidental great antitrust cases in history in that there was a settlement that they had to basically open source their patents and anyone could use it and everyone was mad about it. Like you didn't punish ATT enough and then it basically seeded the entire computer industry. Like it just continually cracks me up. The two greatest antitrust cases were accidents, which was the ATT one and the IBM one, where IBM unilaterally separated hardware and software to avoid an antitrust case. That came down anyway, the case had no impact, the split had a huge impact. So again, though, I actually go back to my first point.

• 1:29:08Ben Thompson?

  They invented all this, like, like there's this magical world where this stuff got invented by someone else and then was dispersed way more broadly because ATT didn't limit it. I'm not arguing monopolies are good. I'm saying there's benefits that come from a company basically becoming the outsourced R and D arm of the US government. Okay, we'll let you have your long distance money, but spend a lot of money inventing stuff and open source it, make it broadly. Invent the technology industry for us. Right, like you can't deny the stuff did get invented. It did get, uh, what's the word, not dispersed, uh, diffused. And a lot of it is incredible. He lists Unix OS as a detriment here.

• 1:29:51Ben Thompson?

  Like, uh, like, so again, I think Bill's be like, actually. It was diffused though because of the antitrust action, to be fair. But the point, the problem here is, and my problem with the antitrust movement in general, is this absolutist view and approach that can't even grant a bit of legitimacy or doubt to their position. Stuff just magically invents and gets out there and, and all monopolies are the government's fault and nothing bad will ever happen if you mess them up. The point about Bell Labs, of course, the AT&T monopoly is bad. Of course, there were issues with it. I'm not denying those points.

• 1:30:31Ben Thompson?

  It's also okay, Bill, to admit some good stuff happened. And it's not for sure that that good stuff would have happened or happened the timeline it did without that. They invested tons of money into Bell Labs. They hired the best people in the world who were able to do whatever they wanted to. And I have a hard time believing that all the stuff they did and invented would have happened when it did, at the time it did, without that largesse. And that largesse was 100% downstream from me monopoly. Does that say I'm defending monopolies up and down? No, but if you can't even grant this bit of grace to maybe there was a couple of good things that happened, it's kind of hard to take the monopoly argument seriously. And it's sorry to label you, Bill, as the stand-in for the whole movement,

• 1:31:15Ben Thompson?

  but that is kind of like the whole thing that drives me nuts.

• 1:31:18Andrew Sharp?

  Yeah, well, I think Bill is just adding some footnotes to your comment last week, which was, I would say, partly tongue-in-cheek in terms of the Bell Labs monopoly. But there are real benefits as well, and I-

• 1:31:31Ben Thompson?

  The AT&T monopoly was not the good old days and never was. I think there were some good days. I feel like there's some good days.

• 1:31:39Andrew Sharp?

  It was the good old days, yeah. I, the way I think about this, first of all, if we ever release merch, my one request is that we do release like an anti-anti-monopolist shirt, because every time you say that on the podcast, it cracks me up to no end. Even as someone who's more of an anti-monopolist, the way I think about the ecosystem, though, is not to get too political, but I think like when you look, actually, antitrust is unavoidably political, no matter what you're talking about.

• 1:32:11Ben Thompson?

  That's exactly true. That's a real lesson.

• 1:32:13Andrew Sharp?

  When you look out at the states that function best, I think the states that are purple function better than the one-party states, whether you're looking at Dems or Republicans. When there's some real tension in the system, those states tend to produce the best results across a variety of categories.

• 1:32:34Andrew Sharp?

  And purple is how I want the antitrust process to look where both sides make some good points and good arguments and there should be real tension there. And I think for a long time there wasn't. Now there's more tension and everything is functioning properly as far as I'm concerned. So we'll see what the judge rules on Google's fate later this month. I think that ruling is coming down soon.

• 1:33:01Ben Thompson?

  Yeah, it was even proposed, like, what make Google open a bunch of this, I don't know, should they, the open sources of patents?

• 1:33:07Andrew Sharp?

  I mean, absolutely. Let's do it. And speaking of Google, Kevin says, in the middle of last week's

• 1:33:14Ben Thompson?

  Leave Google alone.

• 1:33:15Andrew Sharp?

  Let Google cook. It was leave Google alone and let Google cook. You've turned into a Russell Westbrook fan. Let Russell Westbrook be Russell Westbrook. Let Google be weird. Kevin says, in the middle of last week's Sharp Tech, you guys called Google an amorphous blob? Well, there's a famous internal memo at Google, why everything is so hard at Google was the title, which compares Google to a slime mold. Business Insider wrote about it a few years ago and said, the most memorable part of the memo compares Google's bottom-up organizational structure to a slime mold, highlighting how both Google and a slime mold can work independently, but still come together to solve complex problems.

• 1:34:00Andrew Sharp?

  It's a strength and a weakness. A culture that prizes autonomy can accomplish big things, but the larger the organization grows, the slower things get. As each fiefdom within Google operates on its own, Google engages in messy behavior that can be, quote, "hard to predict." So there you go, Ben.

• 1:34:18Ben Thompson?

  Yeah, you know what's long lasting and hard to kill?

• 1:34:20Andrew Sharp?

  What's that?

• 1:34:21Ben Thompson?

  Mold.

• 1:34:24Andrew Sharp?

  That's true. Well, on that note.

• 1:34:29Ben Thompson?

  Not a fan, though. Not sure this is like endearing me to go. Because no, I do remember that. That was a, someone had a thing in here that you didn't read about like Ben Seption or something where someone's repeating my argument. That was clearly me repeating this memo. This sort of like, I remember it now that the emailer mentioned it. I was pretended like it was an original insight. That was not.

• 1:34:51Andrew Sharp?

  Well, but nevertheless, an accurate depiction. And mold, I guess mold could be how monopolies go wrong.

• 1:35:01Andrew Sharp?

  The danger of entrenched companies that could just hang out and invent cool stuff and never release it as products. But on that note, I hope everybody has a great weekend. Ben, I hope you have a great weekend. People can continue emailing us. Email at sharp tech dot FM and I will talk to you on the other side. Hope you touch some grass this weekend.

• 1:35:26Ben Thompson?

  Thank you. I'll talk to you later as well.