Apple Fails to Overreact to the AI Revolution — With M.G. Siegler

M. G. Siegler of Spyglass is back to recap Apple's big AI-themed WWDC event and look ahead to AI's broader potential moving forward. Tune for an in-depth analysis of Apple's new AI features, and what they say about the strengths and limitations of the current AI models. We cover whether the new features will lead to an iPhone upgrade cycle, the stock market's reaction, Elon Musk getting angry about the event, why OpenAI played a smaller role than many anticipated, Apple's potential robotics future, and where Apple stands after the big reveal. Hit play for a timely conversation that goes beyond the hype to examine the real-world implications of Apple's foray into AI. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  With Apple's AI plan now out in the open, we'll assess whether the company met the moment and what its announcements say about the future of AI for, as Apple put it, the rest of us. All that and more is coming up right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya Financial, to go inside a large scale agentic CX transformation, including the business decisions, trade offs, and lessons along the way.

• 0:45Alex Kantrowitz?

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

• 1:17Alex Kantrowitz?

  Welcome to Big Technology Podcast, a show for cool headed and nuanced conversation of the tech world and beyond where we are here, recording in the aftermath of WWDC as Apple has made its big AI announcement. And we have a great show for you today because MG Siegler is back. He's a venture partner at GV, formerly Google Ventures, and the author of Spyglass, a great site covering everything in tech, also some terrific articles in the run up to WWDC and in the aftermath of WWDC. And MG, we previewed Apple's big AI play in April, and here we are, recording right after the announcement. So we're going to talk not only about Apple, but also about sort of what the set of announcements means for the trajectory of AI more broadly.

• 2:01Alex Kantrowitz?

  So it's going to be a great in-depth show. Welcome back.

• 2:04Speaker 01

  Thanks for having me back, Alex. Yeah, I feel like when we talked last, I think we, I was going over that and looking, looking over that episode, and I think we hit a lot of sort of it pretty well on the head. But in the intervening time, I feel like I've gone down these wayward paths of like, trying to figure out how Apple could integrate OpenAI on the backend and do all this crazy stuff and do a brain transplant for Siri. And instead, It ended up being pretty straightforward, what they ended up doing, I believe.

• 2:33Alex Kantrowitz?

  We're going to talk about this, the weird like buildup and it wasn't, I mean, I think everybody thought, I thought, and the reports certainly seemed to indicate that Apple and OpenAI would have a major partnership and it turned out to be pretty minor. So we'll talk about that in a moment. But first, I just want to, you know, I slept on it. I want to get your reaction to this because the aftermath of Apple's WWDC has sort of broken out into two camps, right? Very different camps. There's one group that says this event was Apple's biggest moment in a decade and embracing AI is going to set up a super cycle of upgrades for the iPhone and it was a master stroke. And then there's the other side where, and

• 3:17Alex Kantrowitz?

  this is sort of like reflected in this poll that I did, actually as the event was, was basically wrapping up, asking people what they thought, whether Apple's AI announcements were wow, cool, or meh. And yesterday, you know, right after the event, the poll had like 49% of people saying meh. Now 50, 50.9% say meh. And I, I listen, listeners, I know this is unscientific, but the reaction, it does capture what a lot of people saw. And maybe it was because Germain leaked all this, but basically that it was basic, obvious use cases of AI. I said, you know, bring Sam Altman up and I was looking for more fireworks. And, and so that's camp two. I think, I guess I'm, I'm in camp two. I'm curious, you know,

• 4:01Alex Kantrowitz?

  after having watched this, like, which one is right?

• 4:04Speaker 01

  It's funny you frame it that way because I almost feel like in trying to think about this today, the day after, 25 hours later, after the keynote, I'd written something, you know, immediately afterwards, just trying to, to distill my thoughts really quickly on like the, the gut reaction to it. And I thought, To your points, like overall, it felt pretty right down the middle. In part because, as you mentioned, like Mark Gurman had broken so much of what was going to be announced, and it went pretty much straight down that that line. And it felt like, you know, perhaps a little underwhelming as a result of that for those of us who like, follow this so closely and again, had read all those reports and knew what was coming. Today, I'm a little bit, I'm almost in exactly in between your two camps.

• 4:49Speaker 01

  And I know that because I'm like, trying to think about what my next sort of take to write about will be. And I sort of have these like two paths that that I'm potentially want to go down. And I'm not sure which one I feel more passionately about. I'll probably end up writing both them, to be honest, because I do feel like it's a very nuanced situation. But I do feel like, you know, in one camp, I have sort of the headline in my head of like, Apple failed to overreact to the AI revolution, which I think is, you know, a tongue in cheek way to frame it. Yeah. But I do think that that's, that's sort of what we're looking at right now, right? Like, everyone wants some giant, you know, new feature, some big partnership with OpenAI.

• 5:30Speaker 01

  And instead, they did what Apple often does, which is just sort of go down a very, you know, middle of the road, focus on sort of products and implementations that that are going to hopefully resonate with their very big user base and not focus on the latest and greatest whiz bang features. And instead do stuff that they think the masses will resonate with. At the same time, the other angle that I'm thinking a lot about is what Apple showed off looked good, as it often does, right? Like visually, like appealing. And, you know, I think they made some good product decisions on what they showcased yesterday. But I'm also fairly skeptical about how well they'll actually be able to execute on that,

• 6:13Speaker 01

  simply because they've been in market for years and years with Siri. And we've been told again and again that, you know, this is the year that Siri is better. This is the year that they fix all of the issues.

• 6:26Alex Kantrowitz?

  Exactly.

• 6:27Speaker 01

  In the year of Linux.

• 6:27Alex Kantrowitz?

  Was the year of mobile for like 15 years.

• 6:30Speaker 01

  Yeah, and I am pretty skeptical, having watched the demo, so I watched the demo remotely, you're there, but I was, I'm in London, so I was watching it just on the live stream. And then I went ahead and watched it again this morning, just to see like, you know, if second reaction, if I missed anything. And watching a lot of those demos, again, they look impressive, but I'm just watching them, like, come on, it's not gonna work as well as it is in this demo. And obviously, that's always true of a demo, but I am skeptical of Apple's ability, you know, maybe unfairly, but I don't think so, given the history with Siri, that they'll be able to execute on this. And I think in part, what you're seeing, what you saw yesterday, and especially the announcing that a lot of this stuff, it's not just that it's, you know, not going to

• 7:13Speaker 01

  be available on day one of iOS 18 and macOS and the other operating systems, it's going to roll out over, you know, the course of the next year, basically. They gave these nebulous dates, and in some ways, that's probably right and good, because that's not what Apple normally does, right? Like this iterative approach to software development, they instead focus on these key dates where they, you know, roll stuff out, make a big splash. But I feel like with AI, you have to sort of do it in a much more iterative way, because, you know, models change and, and, and there's always sort of new states of the art. And so again, in some ways, I think that that's good, but I do think it also speaks to, they're rolling this out before they're ready to do it. And I think that, you know, the good news there again is that a lot of us are, we're

• 7:58Speaker 01

  not going to see it for a while, because the betas are out. I downloaded the new iPad OS beta, because I have an iPad, backup iPad, that I'm not using for day-to-day work. And, you know, a lot of stuff's just not there right now. It's just not, literally not in there. So can't even try.

• 8:13Alex Kantrowitz?

  Right. The sort of like, I'm gonna blow up my interview flow for this one, because I was planning to leave this stuff for the end, but, you know, screw it, let's just talk about this. Because one of the things, you know, there's, one of the things I was thinking about all through the day yesterday, is this kind of like saying in Silicon Valley that it's AI until it works, and then it just becomes technology.

• 8:35Speaker 01

  And

• 8:36Alex Kantrowitz?

  On one hand, that's true. And on the other hand, that's not been the promise of AI. The promise of AI has been that it's not just working technology is that, you know, basically, we're going to be in dialogue with these devices and AI is going to be like our own little agent and our bot with us. And, you know, eventually, we're going to reach like maybe human level intelligence and we're going to really feel it in a way that like, you can't really feel, you know, your phone, your phone is a cool device, but it's not like this sort of almost sentient type of thing with you. And, you know, maybe my expectations are too high, but I also think that, is it possible that the sort of basicness of Apple's announcements really show the limitations of artificial intelligence?

• 9:18Alex Kantrowitz?

  There's this, or at least today's generative AI, there's this feeling among people in Silicon Valley and in the tech world that we're really going to need basically 18 more months of model refinement before this stuff reaches like kind of the potential or reaches the point where it meets the hype. Like even though GPT-4 and GPT-4O models, which are the cutting edge are cool, they're not, you know, exactly at the end state or they're not what people have been building around. And so I'm curious if just like what we saw from Apple is just the manifestation of the limits of the current stage of technology. And if so, what does it mean for AI right now?

• 9:57Speaker 01

  I definitely agree with that. I think, and I've written about this in a, from a few different angles, both from sort of the investing in AI perspective, from Apple's perspective.

• 10:08Speaker 01

  We all hear all, all the hype, it's all hype all the time with AI and, and, you know, in some ways justifiably so. There's, there's really cool demos that are out there like the GPT-4O, you know, that OpenAI did a few weeks back. Really, really interesting stuff with vocal computing and sort of the promises there. And, you know, Scarlett Johansson and the her stuff aside, you know, it's a pretty cool demo. And it's sort of, you know, Gives you a sliver of vision into what, um, you know, the future of, uh, at least one aspect of computing could look like. But at the same time, to your points, I feel like everyone's a bit ahead over their skis right now.

• 10:48Speaker 01

  And I think that these models are both changing so fast and there's so many companies being built. Around this space on top of, on top of these models, there's so much funding going in because, you know, every, every investor basically has to believe that this is the next big thing. Um, and there's so much capital out there flowing in where I feel like we're at some point relatively soon going to hit. Not necessarily a wall, but sort of a, a strong headwind of reality. And I feel like to your point that Apple's announcements in some ways are indicative of that, which is that. There is a lot of cool bleeding edge stuff that's going on right now.

• 11:33Speaker 01

  I have no idea how you productize it in a way that's sustainable. There's a lot of cool demos that pop up that are popular for, you know, a day, some, a week, some a month. You know, even, even chat GPT itself, you know, came out of the gates as the strongest adopted, you know, by, by some measures, um, piece of technology ever. And then, you know, it's, it's still an impressive technology. It's still being used in impressive ways, but it's not growing at the way that it was by most accounts, uh, you know, in those early days. And so again, I think that there's a lot of stuff that, that makes for good demos. There's a lot of stuff that, that leads to sort of excitement.

• 12:12Speaker 01

  But ultimately, how are these things going to help users save time, um, get things done? And I think Apple focused on that a lot and that's what Apple does. And I think that that's a very smart thing to focus on for a longer term. Now they could have, again, sort of going back to the, my notion of the headline that they failed to overreact to the AI revolution. I think, you know, and if it was a different company, you can easily see a world in which they go all whiz bang and try to create all these new, um, you know, new features and functionalities based off of AI. But really what they're. It sounded like, you know, the messaging from the top on down was basically like, we're trying to figure out what we can do for our user base that they'll actually use and not just be,

• 12:54Speaker 01

  you know, a great demo. And in some ways, that's underwhelming because again, a lot of this stuff was leaked, but it's also been stuff that has been table stakes. Google and others have been doing a lot of this stuff with Gmail and predictive text and things like that for a long time. And Apple sat back and waited. And I don't think it's ultimately going to be a mistake that they did that. Because again, exactly what we're talking about. I think that we're going to at some point face those headwinds where we realize there's, you know, cool demos you can do, but from a product perspective, there's,

• 13:29Speaker 01

  it's going to take a long time to get to sort of that next echelon of computing.

• 13:34Alex Kantrowitz?

  Yeah, and I didn't, I was kind of holding lots of different feelings at the same time today. I had like very, quite a morning where I just kind of sat with all this stuff. And I had like these feelings of like, this is amazing. Like for instance, being in some of like the Siri stuff is wow. Like you say, you know, when is my mom landing? And it will like search your emails and get her flight data and then check when the flight is coming in. Or you say, this is my favorite one. Find that podcast that my wife texted me or messaged me about the other day and it will find it for you. This stuff is amazing. It makes devices super useful. But then I also like wrote a note here that it sort of gives me a vision of how this fizzles.

• 14:18Alex Kantrowitz?

  And it's like super cool. It's great UI, but is it really just like a better, you know, smart notification? I know that's selling it way short, but it is interesting where it's like, it might be that the hype has been so great. Right? We hear about like AGI and this stuff's going to turn us to paper clips, you know, from anyone working at an AI research lab. But if the, if the height of the product, like the best vision that Apple can show us is that, you know, it will take, and this is cool, right? It will look at like the fact that a meeting has been slapped on your calendar and then check the traffic until you're going to be late to pick up your daughter. Like that's amazing stuff. And I'm still trying to figure out whether that feels evolutionary or revolutionary to me.

• 15:00Speaker 01

  Yeah, I I think that the the stuff that we're going to end up using in the short term, you know, with with regard to what Apple announced in in AI. I feel like the things are almost, you know, the the whimsical things like the generative emoji stuff is is going to be like, you know, the stuff that's actually used, whereas the stuff that you're talking about that they demoed, you know, or previewed because it's not going to come for a while, like the multi-step sort of, yeah, you know, my mom's on a plane type thing. That's the stuff, by the way, that I'm I'm fairly skeptical that Siri will be able to execute upon. And it's like if you if it fails at that once, you're never going to do it again, right? Because you like, it's more of a hassle to get the wrong information

• 15:45Speaker 01

  than it is to just do the laborious work of actually looking up the email manually. All that said, I do believe that there are some, you know, low hanging fruit stuff. But it's a lot like just sort of big data problems. Like I think Aaron Levy talked about this, and I know you did an interview with him recently. And but he had a tweet recently about, you know, on the enterprise side, of course, like why AI is so exciting. And it's just like, we live in a world where there is just an increasing amount of data, both, of course, you know, within the cloud on enterprise side, but in our personal lives. Like, I have forty some thousand pictures on my phone. And, you know, Apple showcased like what you can do, you know, with with those photos now, which is interesting. But

• 16:26Speaker 01

  it's also just like, I know, I remember, you know, in my head, a time with my family like a few years ago. And right now, sort of the way to do that, you can try to do, you know, like a granular search of of a date. But it's it's a little hard to remember the right syntax to do that. The easiest thing I do now is actually use Google Photos and sort of go to a place, because they're all geo-tagged, right? And sort of zoom in on a map and find a photo that I was looking for, which is weird like, and you should be able to do that just by talking, or by typing something in semantically and it being able to find that. And I think that those are, those are the things that are that are going to be low hanging fruit that we're going to be able to accomplish. But again, that sounds like, it sounds boring when you sort of say it out loud like that. But it

• 17:10Speaker 01

  I think it can be sort of profound from a technology perspective. But it's these things that are, you know, again, not not the whiz bang features.

• 17:19Alex Kantrowitz?

  So one way we're going to be able to measure how desirable these features are, right, this predictive assistant that we're going to get with Siri and the the ability to generate emojis and the ability to create images of people in your contacts and have Apple help you write with its assistive tools and there's the smart notification prioritization that they're going to do with AI. We're going to find out really soon like whether this is desirable from a customer base because Apple's had effectively a slowdown in iPhone upgrades. I think you wrote about how they've basically saturated every market. Uh, that is, that lends itself to buying iPhones and people aren't upgrading as fast. And they're going to make this available on just the iPhone 15 Pro and of course, like some of like the

• 18:04Alex Kantrowitz?

  like older laptops with M1 chips, but I mean, it's the phone that matters and we're going to see whether people, A, you know, in the fall, this is, this is going to come out in the fall. And of course it's going to release more iteratively, which is interesting. But um, we're going to see whether people upgrade to 15 Pro and especially the next iPhone event is going to be the 16 and Wall Street's had like a weird, really the kind of the strangest reaction to this. So on actual W W C day, the stock was down 1.91%. And we're recording Tuesday morning, stock's up 5.43% on like no news other than the event.

• 18:38Speaker 01

  And on a major down day for the rest of the market.

• 18:40Alex Kantrowitz?

  Right. So do you think that this is going to drive that upgrade cycle? I know it's hard to predict, but I'm going to ask. And then uh, does this kind of, I mean, Apple's now solidly in second place. It's like really surpassed Nvidia. Does this quote unquote, save Apple's position in the market?

• 18:59Speaker 01

  I think so. First and foremost, you know, what, what I was talking about in um, in what you were alluding to is, is the fact that Apple doesn't necessarily have as direct of a way to monetize off of all this, all the AI capabilities, right? And, and some people were waiting yesterday to see like, would they be selling AI as a part of a services narrative, right? Like, would they be up selling certain features? And it looks like not only is that not the case, from what they were saying, it sounds like, you know, you'll only have access to the free element of, of OpenAI. Um, and you can bring your own premium version if you want, but they're not even necessarily. Going to be upselling you or allowing OpenAI to upsell you on that.

• 19:44Speaker 01

  And so, so the question for Wall Street would have to be how Apple plans to monetize this. And to your point, the most direct way that they can do that now, not sell, not planning to sell this as a service, at least not anytime soon, would be through that upgrade cycle. And yeah, you would hope that, they would hope that these features, because they're restricted to newer phones, the new ones coming out, and also last year's, you know, Pro models, will lead to the quote unquote "super cycle upgrade." To me, I think that that only really happens if there are features that are live when those new phones come out that people want to use.

• 20:27Speaker 01

  And so, again, I looked at like the Gen Moji stuff, how they handle that. They didn't really talk about it. I don't know if any of the other, if you went to another panel or, you know, like the developer State of the Union, I watched some of that, that video online. But like, from what it sounded like, or what I would guess, is that they sort of restrict that to iMessage, and it's not like, you know, you can't cross that to other, you know, WhatsApp or, or text to Android phones. You know, the way that they would do that is obviously, you know, just basically send an image, I guess. But it sounds like technically speaking, it's not, it's not an actual emoji, which is just text that, you know, the consortium puts together every year and rolls these out.

• 21:10Speaker 01

  They're sort of doing this clever, like hacked together version of it, which I think looks good, because I think that they smartly made it look like what their emoji style is. But I think that's the type of feature that might get people, you know, interested in like seeing what their, their friends with the new iPhones are doing. And then the, the only new app, at least that they talked about, was Image Playground, right? And that's like the, the thing to be able to create images, which you can do, it sounds like via some of the other apps themselves, but they have an actual standalone app to be able to do that, too. So it's like those types of things which are forward facing are the ones that are probably most likely to drive, you know, user interest in upgrading. The stuff like predictive text and things like that, I mean, it's hard to see how that

• 21:54Speaker 01

  that would drive someone to, you know, spend, you know, upwards of a thousand dollars to buy a new phone when they don't need one. And so, again, I, I, I have to think that it's going to be the much more forward facing stuff, if, if anything. And It's a little bit hard to see that right now. I do think that that might be what Wall Street is is getting excited about that. Again, they're they're restricting these features to newer generations of phones and the new ones coming out. And so it will certainly lead to some sort of bump, but will it lead to a super cycle? I'm not so sure.

• 22:25Alex Kantrowitz?

  All right. And why don't we talk a little bit about this OpenAI thing? I mean, that to me, the more I thought about it, the more puzzling it was to me that OpenAI was sort of, I mean, of course, in press reports, played up as a major part of this announcement. I don't think they did much to put fire, you know, to try to douse that fire. And it turns out that all of the AI that you're going to see on the iPhone is going to be run with Apple models, a lot of small language models, right? Which is interesting, not the big LLMs, but the small language models running on your devices, which is basically the same, you know, same technology, but smaller, more efficient, doesn't need to have the whole corpus of the world's information to run. And then there are going to be instances where Siri will suggest that you use ChatGPT. Like, that was the extent of the OpenAI

• 23:10Alex Kantrowitz?

  announcement. What's going on there?

• 23:13Speaker 01

  So, and it goes back to when you and I last spoke, because that was around the time when there were several papers were published about Apple's LLMs, right? And, and, you know, they got buzzed at the time, obviously, because it's it's Apple and, you know, it's rare for them to put out sort of a, any sort of look, you know, behind the curtain of what they're doing. But that's sort of the state of of AI and and what they needed to do in order, you know, to attract talent and to keep their talent around the table. And so, in a way, that was interesting, because that is, you know, more or less what they ended up sort of going with, right? They have their own several different sort of flavors of their own LLMs of varying sizes, certain smaller ones, obviously, to run

• 23:54Speaker 01

  on device, and then the cloud ones that can be larger. And their secret sauce there, it sounds like, is basically, you know, some sort of algorithm to determine whether it goes to the on-device LLM, or whether it goes to the cloud, or, you know, and I'm very curious to see how responsive, speedwise this is to know, you know, like, if they can basically instantaneously know if it goes to on-device, to cloud, or to OpenAI, and how they sort of determine, you know, that that level of calculation will be fascinating to sort of see in a from a product perspective again. But, yeah, I mean, again, it was what we talked about.

• 24:36Speaker 01

  In that conversation and I was sort of wondering and trying to talk myself into again, like the idea that maybe this OpenAI partnership was much more deep and what if they even just used GPT-4O as the basis for Siri now, based off of that demo, you know, that was pretty compelling. And again, what we know about the historical version of Siri, which is not good. And so, you know, was Apple willing to do that? And of course, the answer was no. And that probably was always going to be a bridge too far. But it's still like, were they going to augment in some ways? And that's sort of what they're doing, but they're doing it in a very, you know, sort of bound way in that I'm not sure that you're going to need to opt in every single time,

• 25:18Speaker 01

  but it sounds like you might, right? In order to send anything to OpenAI, where you basically have to confirm that you're okay sending it to them. And you are acknowledging that the results you get back are from them and not not from Apple. And so, again, that's a it's a very Apple way to do things, but it all comes down to what the product execution is both in speed, obviously in results, and then, yeah, how they how they do handle the UI, including like, you know, voice and and everything else aspect of the UI.

• 25:47Alex Kantrowitz?

  Yeah. And I actually kind of like the fact, you know, in retrospect, that it was weird for OpenAI that they were so small, but for Apple, I think it's good that they thought well beyond sort of like a chatbot that gives you information and more just like, how do you use GenAI to like, figure out what's going on on your phone, go through all this, all this text, be more useful, like this personalized intelligence, like, I mean, we've talked, I guess, through most of this podcast about how it's like, okay, whatever. But the strategy is, I think it's a good strategy for Apple, even if it's not going to knock our socks off. And it's like something that can get better as the technology gets better, especially if we do see that leap in models in 18 months. So that's the other side of the coin.

• 26:29Speaker 01

  So that's a that's a super, you know, important point because, you know, I guess in, you know, a session afterwards, uh, you know, they they alluded to, they alluded this in the keynote, but then they they more, it sounds like directly at least, uh, you know, suggested that other partners are coming, you know, and they're continuing to have discussions. OpenAI is the first. But even with OpenAI, they'll be able to swap out models and use whatever, you know, if and when GPT-5 comes, like, Apple just flips the switch presumably and will be able to to use that with Siri as the fallback option, which is smart. And basically, you know, all of this stuff at a high level makes sense. It's, uh, Apple acknowledging the current state of things. And there is a lot of

• 27:10Speaker 01

  excitement and hype around chatbots and and and, you know, to your point, maybe it's not like the be all, end all state of everything. And I don't think anyone thinks that, but did Apple really want to go down the path of, um, you know, trying to do that on their own, whereas they could just partner and, you know, check the box, as it were, and, um, and then go down that. The one other thing you said that I think is important in what they were talking about yesterday is the personalization aspect. They played that up time and time again. And that ties it directly into security as well, because they feel like they have a real advantage in, um, being able to be trusted with people giving up their their personal context and their, you know, their the context in which you know people and and the, again, the mom example of in the airplane and

• 27:55Speaker 01

  and being able to access your calendar. And are people going to be okay with giving that to a third party? Um, the answer is probably no. Some people certainly, and people who are early adopters of things, of course, will. But for the masses, I think Apple has a very smart angle there to take. And it's interesting in the context of what Microsoft did recently with their AI announcements, Copilot plus PC, great branding is is always from Microsoft. But, you know, they they got into a a bit of a nightmare situation with the recall feature, which obviously isn't even out yet, but just the privacy fiasco around that because

• 28:34Speaker 01

  Microsoft is is, you know, currently still the largest company in the world until maybe Apple overtakes them again in a few

• 28:41Speaker 02

  Yeah, let's give it to the afternoon, right?

• 28:43Speaker 01

  Until this afternoon, even they're not trusted, clearly from a privacy perspective because of all the mishaps they've had with Windows. And so, Apple didn't talk about this. I was very curious if they were going to have like their recall like feature. And they don't have anything because, you know, harkening back to the days of Time Machine, if you remember that, right? They had like that backup system where you could sort of scroll through time and figure out like old versions of your system and restore those. I was curious if they were going to do something. They didn't explicitly say anything about that, except that sort of a lot of the demos and stuff implied that they like know that, like again, like look up, you know, the podcast my wife sent me, you know, and so how they're actually doing that technically?

• 29:26Alex Kantrowitz?

  Right. Is that very different from Recall?

• 29:26Speaker 01

  Yeah. Is that very different than what Microsoft is doing? Presumably, they're not taking actual screenshots every few seconds, but still, they have all access to that same data, but Apple is trusted in that way. And so I think that that was a very smart angle.

• 29:40Alex Kantrowitz?

  As we're talking, and then again, this is Tuesday morning, so this could be different by the time this goes live Wednesday morning, but Apple is now up 6% on the day. It's worth 3.14 trillion. Microsoft is worth 3.18 trillion. So we might see a flip as we're recording. It'd be another historic moment here on Big Technology Podcast. So, all right, we have some questions from Twitter that I think is going to be worth addressing, including, why didn't Apple just work with a version of Meta's open source Llama? Why did it have to go to ChatGPT? Why didn't they build an AI specific phone? There's also questions about Apple robotics and why Elon's so mad. So, why don't we do that on the other side of this break? This episode is brought to you by App Point. Everyone's racing to roll out AI

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• 32:19Alex Kantrowitz?

  And we're back here on Big Technology Podcast with M. G. Siegler. He's a venture partner at GV, which is formerly Google Ventures, and he writes the great tech news site Spyglass. You can find it at spyglass.org. It's a must-read for me. Definitely recommend it. All right, let's talk a little bit about some of these questions that have sprung up on Twitter, both in response to my solicitation for questions and then also some others that I've found lurking online. Some, this person Bindu Reddy asked, "I don't understand why Apple has to send anything to ChatGPT. It's just bizarre. Why not get Meta to give them a license and just use Llama?" What do you think, M. G.?

• 32:58Speaker 01

  Well, I mean, some of this is intercompany politics, right? Like

• 33:04Alex Kantrowitz?

  Yeah, maybe Apple shouldn't have been so mean to Meta and they could have gotten free.

• 33:08Speaker 01

  They certainly have a contentious relationship in the past. And so I'm not sure that those two would, would, you know, necessarily work together. But even still, to the point like it's open source, so they could use it. But still, to me, that just goes back to the high level notion that everyone knows about Apple, that they want to own and operate everything that they do. And I think, again, what we talked about with ChatGPT is, is checking a box, as it were, right? They know that people are going to want certain functionality that ChatGPT offers right now. And so they're, they're happy to sort of partner in these early days and see how it plays out. Like, maybe, maybe that becomes less compelling over time and they don't need it anymore. Or maybe they do build their own sort of version of what ChatGPT can do and eventually

• 33:52Speaker 01

  swap out for their own. And so that's why I believe that they would do that, like, and, and I think that that's a much easier lift than, yeah, trying to implement Llama, again, someone else's technology and being beholden to them. Could you imagine the, quite the, quite the role reversal if Apple was all of a sudden beholden to whatever Meta was gonna open source or not open source with Llama? I don't think that they want to be in that position.

• 34:17Alex Kantrowitz?

  Yeah, I mean, it's like that, that tweet of like, was it me reaping? Ah, ha, ha, this is so great. And then me sewing. It's like, oh, no. I don't know, I didn't get it exactly right, but it's just like, eventually, like, being a bully.

• 34:32Speaker 01

  It goes back.

• 34:33Alex Kantrowitz?

  Yeah, this tech, tech evolves. Uh, there's another great question that I got, which is, um, would it not be better for Apple to have an AI specific phone device in addition to the Pro and the Pro Max? I mean, let me expand that also to say, does that, you think that could come? Like, is Apple potentially going to build like their own rabbit?

• 34:53Speaker 01

  So that that's interesting in, you know, leading up to this event, one of the things that that I came across, which I remembered but had forgotten about was Apple had this old demo in the, it was actually the post first Jobs days and pre before him coming back, I believe, called the Knowledge Navigator. And you got to look up this old demo on YouTube if you haven't seen it or haven't seen in a long time. But it's basically this sort of very 1980s staged demo of a new pro, a new hypothetical product. Apple used to do these like, like all technology companies did of these like, you know, not real, but

• 35:31Speaker 01

  potential future products, where it was essentially an AI device that you spoke to and it had a little virtual assistant in the face of a virtualized human. So this is way before Siri, of course, which would, you know, answer all these questions like, what's on my calendar for today? And, and oh, you know, someone sent me an email the other day, like, can you look that up for me? It's a lot of like what they're actually doing right now. But again, this was an early take on what, you know, the future might look like in computing. And that did have a standalone device because it was, of course, way before the iPhone existed and way before iPod and way before basically anything besides, besides the Mac and, and

• 36:12Speaker 01

  Apple's older computers. And so I think it's interesting in that context because it is a bit like what the, what Rabbit, you know, R1 ended up being. Could Apple do their own device? The only way that I would see that is through either Apple Watch or AirPods. I don't think that they would do like a new PIN or something like that, because I think that they have the technology that they need there in both of those devices to be able to do this. If they can get an LLM that's small enough to fit on the watch or eventually the AirPods, I think that that's a pretty compelling product for a number of different use cases, not for everything, but for certain, yeah, on the go use cases. And again, maybe they fall back to what they're doing now where they call up to the cloud for other

• 36:55Speaker 01

  things that that are more intense. But I don't see them making their own sort of new fangled product unless, you know, they, they feel like there's, there's something really different that they could do there. But I feel like they already have the tools in place.

• 37:09Alex Kantrowitz?

  Right. Yeah. And in the run up to the event, like Gurman was, I think, throwing a lot of his extra reporting at the wall and seeing what stuck. And he had some very interesting notes about how like this basically sets Apple up. For the future, where like it can build this AI technology into new devices that he says are coming, including like robotic arm with an iPad that's supposed to be looking like a robotic that I guess it has a face in it. Like nods and stuff makes human like gestures and then a bot that might, a robot that might follow you around. And then to me, what I think is the most interesting is the, and I said this on the Friday show, but the fact that they're going to add cameras to the AirPods and like make them almost like the Ray-Ban Metas where like you can kind of,

• 37:52Alex Kantrowitz?

  I imagine, ask them about your environment, stuff like that. So what do you think about this set of, you know, potential hardware and devices and robots that might be coming?

• 38:02Speaker 01

  I do think robots are very interesting from, but a very long-term thing. I don't think that that's something that's like anytime soon. You know, this is like, 10 years away. I'm sure that the recording will say that it can happen sooner, but like most reporting, it's just like, yeah, there's, there's optimistic views and then there's the reality of the situation. I think that we're a long way away from that. I do think that that will be reality someday and, and I think that there's a lot of compelling aspects to that. And, you know, Amazon's done some early work there. And, and others will continue to do early work there. There's some of those fun robot dogs from Abo, Ibo on down, but there's newer ones now that I think are fun. But again, from those being practical, a long way away. The robot arm iPad thing, I read that report too.

• 38:45Speaker 01

  I don't really understand what that is other than if it's sort of, you know, uh, almost like a new HomePod type device, right? Where it has a screen and it can play music and it can do video and, and, uh, yeah, like follow you around, sort of like the, the Facebook's portal device, you know, that, that sort of was popular for a bit during the pandemic. I could see something like that, but how AI plays into that? Yeah. Like machine learning, vision stuff, I guess, but. Just running whatever Apple like announced yesterday. Sure, like eventually I guess all Apple products will run that, but is it really needed or based around that? I don't know the answer to that. And then the AirPods stuff, I also agree is compelling. I'm very curious

• 39:28Speaker 01

  how they would actually do that, though. Like, I look at my own face right now, right? Like, I have a beard and so I'm wearing the AirPods. Like, can they look, do they just look beyond sort of the beard to find? Are they more outward facing? I, and people always, you know, complain about the fit of AirPods and, and, you know, how, having to consider how the camera then would be facing and, and if that it's at the right angle, like, I think these are much harder problems than they might seem like on the face of them. And so it sounds like, yeah, they're probably going to try different things in that, in that world. And especially if Meta continues to have success with what they're doing with the Ray-Bans. But, you know, I think that and Vision Pro and dialing

• 40:12Speaker 01

  that down more into like a glass, like, shape and size might be something there, too.

• 40:17Alex Kantrowitz?

  Yeah, eventually it could converge. I mean, my guess with the AirPods is there's a, the headphone goes in your ear, and then it wraps around your ear, and you have like, kind of like a periscope coming out of the top of your ear.

• 40:29Speaker 01

  Yeah, yeah, that would be strange looking at first, but could, could normalize if it's not too, too weird. But then there's a whole recording aspect of, you know, like, what does that look like?

• 40:42Alex Kantrowitz?

  Yeah. Yeah, the more I think about it, the more I'm just like, okay, that six month pause on that.

• 40:50Alex Kantrowitz?

  So you had a headline about Elon's reaction to this. It was big mad over OpenAI and Apple, and I'll just read the way that Elon reacted and then the community note. He says, "It's patently absurd that Apple isn't smart enough to make their own AI, yet is somehow capable of ensuring that OpenAI will protect your security and privacy. Apple has no clue what's actually going on once they hand over your data to OpenAI. They're selling you down the river." And then he puts that tweet out. He also says he's going to ban Apple devices if this happens from his, his companies. And if you bring an Apple device in, he's going to lock it up in a Faraday cage. This is a community note. "Apple has developed their, their foundational

• 41:35Alex Kantrowitz?

  model, which runs on device." And has approximately 3 billion parameters for tasks that require more compute. Apple either uses private cloud compute or OpenAI with an additional confirmation. Wow, it seems like some Apple fans community noted Elon, but what do you make of his reaction here? And you also in your post talk about how Apple doesn't like Elon. That's kind of something I'm not fully aware of. So I'd love to hear a little bit more about the relationship between the two.

• 42:05Speaker 01

  To me, again, this is inner, inner company dynamics of this dates, you know, and there's, there's been many, many reports on this dating back a decade. I think at this point where there've been, there've been various reports that Apple at various points has been talking to Tesla. Different people at Apple, talking to different people at Tesla about potentially acquiring the company. And, you know, I think all sides have acknowledged that that's sort of was true at differing points. Unclear, you know, just how far along in the process that was, but you know, it was obviously stems from when Apple was working on a car project. And, uh, you know, was there something to be done there with, you know, what at the time was the upstart?

• 42:47Speaker 01

  Car company that was coming in and revolutionizing electric vehicles and everything that Tesla did. And so, you know, I think when that deal didn't materialize, then Apple had their own car project, of course, ramping up over all that time. And there was a lot of just back and forth headlines about how many engineers Apple was poaching for that project from Tesla. And at one point Elon, I think had a, had a soundbite that, uh, all, you know, Apple had hired, uh, everyone that Tesla's fired. Uh, you know, all the worst people like who they didn't want anymore were now working at Apple. And so, you know, they were never going to succeed and, you know, to his credit, he was right. I don't know if it was directly as a result of, of who they hired or not hired, but he was right that they didn't succeed in the, in that space.

• 43:31Speaker 01

  But sort of it all, you know, the, I think the animosity between the two stems from that. There was also of course, the element where Apple, like many companies pulled advertising after some comments, you know, that, that Elon's made. In the past, I think that they, they subsequently came back though. They weren't doing, I was, it was interesting that they weren't advertising, at least as far as I could tell, the W W C stuff. Normally they have a hash flag, is that what it's called, when they do a, you know, special hashtag add. They didn't seem to have one yesterday, so maybe they're, they're at odds again and sort of not advertising there. But anyway, all that stems from, yeah, the bad blood between those two sides in those regards.

• 44:09Speaker 01

  And so the whole thing is just silly, of course, like, you know, yeah, he's, I, I would be very curious if he did actually ban Apple devices from Tesla and all of his various other companies. What the employee reaction to that would be. I would be also curious if, if he tried to pull, you know, what is now called X off of the App Store. Would, what would that do to X's actual business? It feels like that would be sort of a self inflicted wound if, if that were to happen. Of course, I don't think that that's going to happen, but when one person owns, owns the company, you can never sort of rule it out. And one person who's, who has a history of doing some, some pretty volatile things in the past.

• 44:53Alex Kantrowitz?

  Yeah, I've always said Elon can't possibly tell more people to go F themselves, but he might.

• 45:00Speaker 01

  Yep, we're, I put that in there, you know, he, he obviously said that to Bob Iger, who was in the audience of that event. And, and maybe we're, we're inching closer to that, that type of rhetoric with Apple now.

• 45:13Alex Kantrowitz?

  So as we come to a close, you know, as we've talked through this, there's one thing that has kind of stuck out and to my mind, actually from the B to B context, and that is that like, I was at a dinner with Aaron Levy and the CEOs of MongoDB and Datadog. And it was all on the record, so I'm free to share this, but there was a big like, kind of hubbub between some of the journalists that were at the table and these CEOs where the journalists were like, this is the same stuff that has the B to B tech companies have been promising forever. Like basically like simplified workflows and automating tasks that we've heard about. And, and their point was basically like, that was always the goal, we just couldn't build it. And now we have the technology to build it. And I wonder like,

• 45:58Alex Kantrowitz?

  We've been hearing about some of the stuff that Apple has announced, like, you know, from various consumer companies, from like companies like the rabbit and the humane pin, which didn't work from Google forever. And the technology hasn't been there. So when we think about the state of AI and we kind of started kind of like pretty doubtful, I would say about like where it's going. But is it possible that this is kind of the same thing as that B to B context where it's like, yeah, this is the vision that we've been hearing about forever, but now it works? Or is that kind of too optimistic?

• 46:28Speaker 01

  Um, no, I, I feel like, you know, at the highest level, so much of technology is just right place, right time, right? Like, the ideas that people have dating, you know, from science fiction, I think are often come back around when the, the technology is actually there to make them reality. And I think that that comes into play a lot with, with everything that we're talking about here. Um, it's just a matter of sort of time horizons. And, you know, we, we kicked off talking about how Siri has underwhelmed historically. And so do we believe that now is the right time? Like, what, what actually changed within

• 47:10Speaker 01

  Apple where now all of a sudden they're going to make Siri work? Now they would say it's L L Ms. And, and, you know, we sort of have these new models that are able to just handle requests in a different way. And certainly that's true. But are we there to the point where it's true that it's going to work flawlessly all the time? My guess would be no. And then it's a question of sort of granularity of like, will it be so annoying that people stop using it because it doesn't work all the time? And to me, when, when you bring up, yeah, the, the idea that is the technology going to come into focus where all this stuff

• 47:51Speaker 01

  can actually work now? I think that that's more true than it has been in the past. But I don't think that that's still true of everything. And for something like these features that they're touting of Siri. As we've already talked about, like unless they're working 100% of the time and you can fully rely on them to go into your workflow and be there and give you the right results. I think that they're going to have a major sort of churn issue in people using them and they're just going to default back to what they know will work because it's just going to be a waste of time. And so I think that there's, there should be some fear and hopefully, you know, Apple's going to do a lot of work before they release these to the wild where

• 48:36Speaker 01

  they can garner enough trust that people know that that it will actually work in the way that it's intended. But I'm skeptical that we're even there right now.

• 48:46Alex Kantrowitz?

  Right. And then we think about Apple, I mean, five out of the past six quarters, they've had revenue declines. Vision Pro, I think you wrote about it this in, in the run up, the Vision Pro is not selling, you know, as expected, or it's kind of just a non-factor at this point. They don't have a direct way to make money off of this stuff outside of upgrades, unlike let's say, Amazon, Google and Microsoft, which can sell cloud services and Nvidia, which can sell chips. Obviously, a stock market likes what it saw yesterday, given that the company is just shooting up today. But what's your overall view? And yeah, we have a couple of minutes left. So if you could do it briefly, that'd

• 49:30Alex Kantrowitz?

  be great. But just like, what's your overall view of like the state of Apple right now? And, and how has your view of them changed since the beginning of, since before the announcement?

• 49:41Speaker 01

  I think that, you know, the hope again, within both Wall Street and Apple is that this does lead to a super cycle where, where people have to upgrade iPhones. I, as we talked about, I doubt that that happens in a major, major way this fall. It might happen a year from now when they have, you know, potentially a new, new looking hardware, a new form factor, not totally new, but a slightly, you know, more thinner, all the rumors, talking about a different type of new iPhone device, mixed with the fact that a lot of this AI stuff may actually be ready to go. Because remember, as we've talked about, a lot of this stuff is not going to be rolled out, even in the time that the new iPhone. Launches. And so I think that that negates a lot of that, that part of it. The other element that drives Apple's business right now is just services.

• 50:24Speaker 01

  That's the only element of the business that's growing. And I do think that that's, that's very interesting to think about into next year. If this doesn't drive major upgrade cycle for the iPhone and other devices, does Apple start to move more again in the services model? And come up with a way to upsell some of these AI functions as a way to keep the services narrative growing and growing and growing. I think that that is not on the table right now, but it might be next year. And I think that those are, those are the things that play because I, you know, we talked about it. I think that the iPhone is saturated a lot of sort of the, the higher end of the market and they're going to keep sort of raising prices to, to keep sort of driving up the, the average selling price.

• 51:07Speaker 01

  But, you know, do they, do they launch other versions of the iPhone in, in emerging markets? Do they do other types of, you know, tangential devices to try to, yeah, just, just drive that revenue higher, but it's services. That's all, all, all that matters to the company right now. And, and AI, I don't think is going to move the needle really this, in this cycle. And it might next year, but it's, I, I feel like that's, that's going to be the thing that we have to reconcile sort of heading into the end of this year for the company.

• 51:36Alex Kantrowitz?

  Website is Spyglass. You can find it at Spyglass.org. M G Siegler, thanks so much for joining.

• 51:43Speaker 01

  Thanks, Alex. Great to talk.

• 51:44Alex Kantrowitz?

  Great talking. All right, everybody, we'll be back on Friday, breaking down the week's news, Apple and everything else. So thanks so much for listening and we'll see you next time on Big Technology Podcast.

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