New York Times Sues OpenAI, Apple Watch Ban's Implications, Snapchat Rising On AI Success

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) The New York Times' Lawsuit against OpenAI 2) Whether the Times' case stands a chance 3) How the lawsuit will change perceptions of AI 4) How it will also create a strange realignment of the tech culture war 5) Will the New York Times build its own ChatGPT? 6) How much does news really contribute to AI? 7) Who is really at fault when a model generates copyrighted material? 8) Is AI in a trust crisis? 9) Where The Apple Watch ban goes from here 10) Big Tech's year of accountability 11) Is it safe to count on the vision pro 12) Amazon's big advertising move in prime video 13) Snapchat+ is the first successful consumer AI product 14) Year end predictions and thanks! --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  OpenAI sues the New York Times over copyright infringement. Are Apple's problems with the Apple Watch long term or a short blip? Amazon brings ads to Amazon Prime Video. Snapchat Plus keeps adding subscribers thanks to AI features. And what is Tan Mama? All that and more 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,

• 0:43Alex Kantrowitz?

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

• 1:26Alex Kantrowitz?

  our traditional cool-headed and nuanced format, where we're here to round out the year, the last show of 2023, setting up what's going to be a fascinating and massive 2024. We're here, as always, with Ranjan Roy of Margins. Ranjan, happy holidays and a happy new year to you. Great to see you, man. How you doing?

• 1:48Speaker 01

  I'm in historic Lexington, Massachusetts, where I grew up, at my parents' house, the house I grew up in, and thought it would be a slow news week, but I'm actually very excited about today's episode. Some stories, I think, that are going to be very important to set the tone for next year. Where are you right now, Alex?

• 2:07Alex Kantrowitz?

  Absolutely. So I'm going to apologize in advance if I have some sound quality issues. I'm staying at a hostel on top of a lava bed on the big island of Hawaii. It's actually a pretty cool spot, just like in the middle of a lava flow, totally off grid, but they do have some Wi-Fi, so we're going to give this a shot.

• 2:25Speaker 01

  It's not quite suburban Massachusetts, but I guess that'll have to do for you.

• 2:29Alex Kantrowitz?

  I think if you average us together, we're like somewhere in Montana.

• 2:35Alex Kantrowitz?

  Okay, so let's talk about this really fascinating lawsuit that the New York Times is bringing against OpenAI. So, the New York Times is suing OpenAI over copyright infringement for training on many of its news stories and reviews, including that from the Wirecutter. Now, I just want to start by sharing the context of this, and that this is bigger than just one company, right? It's not just the New York Times that's suing OpenAI. There are plenty of other corporations, news corporations that are talking with OpenAI about licensing deals. And the sense that I get, and it's being somewhat, you know, not even winked at, but clearly communicated in the coverage of this, is that there will be a slew of lawsuits against OpenAI by these news publishers if they're not compensated in a way that they find fair.

• 3:19Alex Kantrowitz?

  And this is from a New York Times story. The other companies that are talking to OpenAI about licensing deals are News Corp., the IAC, which owns Daily Beast, the magazine publisher, dot-dash Meredith, and the News Media Alliance, which represents more than 2,200 news organizations in North America, has also been talking to OpenAI about a deal. And so, Ranjan, I'm kind of curious whether you think that this is something that has the chance of working, whether these publishers are going to get their money, how it might differ from the big Google fight. What can you tell us about this?

• 3:53Speaker 01

  I think this is massive. As you said, this is much bigger than one company, than just the New York Times, but I think it's important that it is the New York Times. And Jason Calacanis had an amazing post on this, and it is rare that you will hear me saying that, but he lays out very clearly how in the 2000s, the publishing industry essentially got rolled over by Google, while the music industry was was strong enough and cohesive enough to take on Napster. The New York Times of today is not that organization it was in the 2000s. It's a gigantic company. It's it has a lot of technology underlying everything it's doing. It's a different company right now. And the way they've approached it, I think it's clear that this is going to be a much different effort.

• 4:39Speaker 01

  And it's important because, again, all these large language models have been trained on Common Crawl, at least GPT-3, GPT-4, on Common Crawl, which not only indexed and used every New York Times article, it even gave additional weighting to the newyorktimes.com domain because it is considered a much more valid domain, that the information is more authoritative. So, underlying all the information used to train GPT-3 and 4 was the notion that the New York Times content is more valuable than the average content on the internet. So I think it's right there, that there is value to this. The New York Times, clearly

• 5:19Speaker 01

  there were discussions around licensing already that must have fallen through because OpenAI did, there are some other publications I know, publishers that they did already sign deals with. But I think this is more than just a cash grab. I think this is really important in setting the tone of how large language model-driven companies like OpenAI operate in the future. Because the models are not valuable without the content, and the content up until now has been free.

• 5:47Alex Kantrowitz?

  Yeah, they have signed deals with the Associated Press. By the way, hearing you praise Jason Calacanis, we're just gonna go round the horn with all the L and podcast members.

• 5:55Speaker 01

  It's almost New Year's.

• 5:57Alex Kantrowitz?

  It's the season of giving from Ron John. But I did think the Jason Calacanis post was good. And one of the things that really stood out to me was the fact that, basically, ChatGPT was taking Wirecutter reviews and spitting them out verbatim. And the Wirecutter comes with the Times, which is a paywell publication. So, do you think that this lawsuit, on its face, has some merit? And is there a chance the Times wins?

• 6:22Speaker 01

  Yeah, so I think there's two important parts to this. One, the Wirecutter example is so perfect, because the query that the New York Times used was, what is the top recommended X product from the Wirecutter? It provides you that exact answer, which is what any of us go to the Wirecutter. I've long loved the Wirecutter. That's what we go to it for. It not only provides that information in a condensed format, it strips out any affiliate link, you know, withdrawing, taking out any value to the New York Times for this, for collecting all that information. So there's such a clear business impact on the New York Times that ChatGPT and OpenAI are impacting on them. So I think that one is very clear

• 7:06Speaker 01

  cut. I think the most important part of this lawsuit, though, is going to really be public perception around this. And this is one of the fun things for me to watch because I think this is going to divide and chop up the tech and tech reporting landscape in ways that are just weird. Again, I'm agreeing with Jason Calacanis today. I think Elon Musk is going to come out strongly in favor of the New York Times, which are words I never would have thought I would say, because I think Twitter's repository of information is of equal value, if not even more than the New York Times. I think Reddit, even Quora, if you've been on Quora in the last few years, all these places have these incredibly

• 7:50Speaker 01

  valuable sources of information that should be licensed. They should be able to create their own LLMs and create their own, you know, chatbot experiences. So I think this is going to be so interesting in terms of who ends up on what side and how things get portrayed. But I think to the average person, it's just so easy and clear. You can get into the underlying technology of a large language model and how it works. But when you reproduce near verbatim, you know, content and journalism that the New York Times invested millions of dollars and thousands of man hours into. It's pretty obvious that something is wrong there.

• 8:30Alex Kantrowitz?

  It's interesting that you mentioned Quora among your groups of sites that are gonna need to charge to get paid, to need to charge to get trained on because Adam D'Angelo, who's the CEO of Quora, is on the OpenAI board.

• 8:39Speaker 01

  Oh, yeah.

• 8:41Alex Kantrowitz?

  Going back and forth, being like, what do I do about this? Okay, but here, so you talked about the divide between like tech reporting and or reporting in general, the news industry and OpenAI. And this is where it really gets fascinating because Jason's post ends with that the New York Times is gonna take an open source language model, train it on their data and create a chat GPT competitor. That much is clear. And that is like, there's been this meme, wouldn't you say, within the tech industry that the reporters are competing with tech and that Facebook wants ad dollars and that publishers want ad dollars. And they're showing that that's not brand safe and that we are brand safe. And then therefore they have an incentive to knock down the tech platforms and even

• 9:25Alex Kantrowitz?

  more than that, show that we should be trusted and they shouldn't. And so if they're actually building specific competitors to tech products, not just tech products, but one of the most successful tech products in modern memory, how do you think that changes this fight? Because what I wrote down is that the tech versus tech reporting fight is about to go to 10 here.

• 9:48Speaker 01

  Well, I would like to recall who predicted, I believe it was two weeks ago when we were discussing the hiring of Zach Seard at the New York Times to research general LLM products, that the New York Times could be preparing their own chatbot.

• 10:05Alex Kantrowitz?

  You did.

• 10:06Speaker 01

  We talked about this two weeks ago, and that's why I, that's what I've been thinking. And they should, I 100% think they should. And they're already a tech company when so much of their revenue comes from even gaming right now in other products that live outside of the journalism. They've already become a technology company. So this would just be another product that is even more suited to a journalism company or a publisher than cooking and games, right? Like, this is like the idea of a chatbot querying your body of information. Any company should own that if they have a huge corpus of information. So I think. Yes, they should build it and they will build something like that. And I think that makes sense.

• 10:48Speaker 01

  And they would be able to make it much more reliable relative to their information. But I think the idea, I've never bought the idea that because one's part of the New York Times will be building a tech product that competes with another tech company, that that will affect their journalists', you know, view on technology and make it more negative. This is one thing that's always bugged me because if you read the New York Times tech coverage, there's a lot of fawning coverage over plenty of tech companies that I think is irresponsible and just overly optimistic around it. It's only the few examples that are cherry picked that are negative on very specific companies that everyone runs to. So I think, I don't think it's going to impact that at all.

• 11:32Alex Kantrowitz?

  Well, merit or not, it's going to be something that's going to be used as a cudgel by the critics of tech reporting to sort of amp this war up, a direct competing product with ChatGPT.

• 11:43Speaker 01

  Yeah, but that's why it's going to be so fun next year, especially for us to watch, sitting on the sidelines with popcorn.

• 11:49Alex Kantrowitz?

  We are going to have a good time next year.

• 11:52Speaker 01

  Well, no, because that's again, but Elon Musk cannot make that argument and then claim that Twitter is its own valuable source of information and you should pay for Grok. Right? Like he, because then he is a competitor to ChatGPT and OpenAI as well. So, so I think it's just one of the, and then the citizen journalism on Twitter or whatever is, you know, going to be unbiased. I think that's what makes this just so incredibly interesting because it divides what has, you know, we've called like the tech, whatever technology community. It divides it in ways that it has not been in the last couple of years, when it was very cleanly media versus tech.

• 12:30Alex Kantrowitz?

  So up until this point, we've basically gone under the assumption that the New York Times is going to have a good claim against ChatGPT because it can produce Wirecutter reviews effectively one for one and other types of stories. Let's, let's get more nuanced here, right? Let's do our show mission and go a little bit deeper. So I'll bring up some counterpoints and you tell me what you think. So first of all, there's Actually, the amount of training that the New York Times has been responsible for for OpenAI. So this is from Benedict Evans. He goes, looking at an estimate that the New York Times is approximately point zero zero eight three percent of common crawl, which is the crawling that that some of these trainers use to build their models.

• 13:14Alex Kantrowitz?

  So he says it's point zero eight, point zero zero eight three percent of common crawl and reminded again of the disconnect between the social and political value of professional journalism. And the amount it actually makes up of internet consumption, traffic and revenue. And journalists' recurrent refusal to accept that news is important to society is not the same as Google's ad business needs news. Your response?

• 13:42Speaker 01

  That's exactly the point. Point zero zero eight three percent of common crawl, yet the third most heavily weighted domain in common crawl. I think that's that's exactly the point the New York Times is making, that it is a smaller percentage of overall content, yet it's more heavily weighted because it's important. And that weighting, when you think about how large language models or companies like OpenAI have to think about licensing is clearly going to play a part because if you remove that information and that source from the model, then it becomes of less value. If you have to rewrite the entire model because the top few domains that are not that are from publishers all demand that their content be completely removed. It completely changes the way you operate your business and the underlying technology.

• 14:27Speaker 01

  So so I think that it is a reminder, yeah, that, you know, the overall amount of content is small, but the importance is big.

• 14:35Alex Kantrowitz?

  And here's the thing, I think that looking at the actual percentage misses, it's about the urgency, right? Because we all know that ChatGPT lost users across June, July, August, right? It's not like this ever ascending product. It needs something to keep people coming back. Now, one of that thing, one of those things is assistance with schoolwork, which is why it's seen a resurgence in the fall. But it has to be broader and more interested to people. And what's the thing that's the most vital thing that gets that's really good for engagement? It's news. Hey, ChatGPT, what's going on in the world today? You know, how should I think about this news event? And the news can present that value. And so even though it is a small percentage of the actual training on ChatGPT.

• 15:18Alex Kantrowitz?

  It does seem like the news publishers are going to be able to make this point to say, hey, listen, like, it's not just about the volume, it's about the vitality, the vitality of your product, and we provide a lot, a large part of that vitality.

• 15:32Speaker 01

  Yeah, no, I completely, I completely agree from the consumer standpoint, this is big. What I do think is interesting about this is, and we've covered this a lot, the end monetary value or business value is not going to be from this consumer side, it's going to be from customized models that businesses can actually create their own tools, which right now, a lot of people, I built on GPT three point five and four plenty, like, it's very usable, but I think this stuff ends up becoming a lot more customized, and that's where I think either this should force OpenAI to start really building up that enterprise side of their business and customizability, and just, you know, thinking more from an

• 16:14Speaker 01

  enterprise standpoint, or in a good way, it also opens up the game to the open source community, to other smaller players as well, who are focused more on the business use cases. So I think this is, this is also a reminder that, you know, New York Times versus OpenAI, it's, these are the kind of, you know, the names that represent these tools to the general public, but it's not, to me, where the end value is going to be on this. And, and in a way, maybe this is good to force OpenAI to start thinking about enterprise.

• 16:45Alex Kantrowitz?

  So that was kind of the easy bit of nuance to bat away. This is where it gets a little bit more difficult. So Yann LeCun, Chief AI Scientist at Meta, posts a very interesting question. He says, "Genuine question about image generation. If someone uses generative AI tool, a generative AI tool to produce an image that is substantially similar to copyrighted, to a copyrighted piece, like a drawing, a painting, a movie screenshot, who should be liable for the copyright infringement? Should it be the company producing the tool, the human creator of the piece, the person or entity posting or publishing the piece, the communication platform through which the piece is distributed?" And he adds some bit of nuance here. He says, "When a person distributes..."

• 17:28Alex Kantrowitz?

  A sufficiently similar copy of an art piece. It's a violation of copyright, regardless of the tools and processes used to produce it. The liable person is the person distributing the piece, not the artist and the makers of the tool. Sufficiently detailed prompts will produce images that are substantially similar to images from the training set. It is not at all surprising that a prompt like the Batman movie rooftop scene screenshot 4K will produce an image very similar to an actual actual screenshot from the movie. Okay, that is brings up a very interesting point here, and he posted it right in the aftermath of this New York Times thing. Which makes me to believe makes me believe he was sub tweeting it a bit.

• 18:10Alex Kantrowitz?

  Which is the point, is it the tool that's the problem, or is it the actual distribution? If it's the act of distribution is the fact that you're now, you know, reading a wire cutter review on chat GPT. Not actually a violation of copyright. Is it the point where you actually take that review, copy it and paste it and distribute it on your own? I mean, if that, you know, it's that's a very interesting way of looking at it, a very interesting angle, and it's a wrinkle I expect OpenAI to try to exploit.

• 18:36Speaker 01

  Well, I think the nuance is in where the monetization occurs. In the example Jan LeCoon gives is if I'm creating an image, or even if I'm using OpenAI to create chat GPT to create text. If I am then monetizing that, then it could be more clear that the liability is on me. But remember, the monetization in the examples of the wire cutter is OpenAI is monetizing that user paying 20 bucks a month on chat GPT plus and to get that information. So then clearly the business impact, you know, falls on OpenAI versus the case. One thing that I think is really interesting from the Jan's example is I think the prompts are going to become more important.

• 19:20Speaker 01

  Like if an image ends up very similar and you know, a brand is using it. Being like liable to show the prompt and did you actually include the Batman movie? I think this is going to be really interesting and where copyright law goes on all of this. But but at the moment, I think where is the money going? And I think those people will be held liable for the copyright infringement.

• 19:42Alex Kantrowitz?

  There's another side to this that's also really important to discuss, which is the reputation issue that OpenAI is now opened up to, where people already didn't trust that the material that they're typing into ChatGPT or the material that their agent, their, their company is using as they interact with chatbots. They didn't trust that that was not going to be used to train. And as more and more companies raise their hand and say, hey, they trained on my stuff without my permission, and I'm suing, it's going to create potentially an environment of mistrust, you know, regardless of whether or not they're training on specific use cases. And that's something that this blogger, Simon Wilson, spoke about, saying that AI is facing a crisis of trust. This is an article that you picked out about how Dropbox has this new feature and UI

• 20:27Alex Kantrowitz?

  that companies can communicate with their data and that people are going to be say, and I'll just read it directly, people will say, OpenAI is training from every piece of data they see, even when they say they aren't. It's the new Facebook showing you ads based off of overhearing everything you say on your phone's microphone. Right? So it is this big reputation issue that AI is going to run into, and it's really unclear how it's going to resolve.

• 20:52Speaker 01

  Yeah, so the example he used, and this is a really good piece from Simon Wilson, is that we all still kind of believe, this literally came up over a Christmas vacation for me, that Facebook is listening to you on your phone, and it's a UI feature or maybe, you know, like problem, bug, that ads will show up based on things you just said. But I strongly believe that Facebook is not listening to your phone. I've read a ton about this. And again, they're just so good at triangulating you and where you are and what your other interests are and who, they can figure out who you are around and what their interests are, but they're not actually listening. But as much as they say that they're showing you, that they are not showing your ads,

• 21:37Speaker 01

  no one believes them still to this day. And as much as when Dropbox launches their dash feature that's going to plug into your Slack and Gmail and everything else. Are we really going to believe they're not training on the data? Same with OpenAI. Now with their enterprise tiers, they will say over and over, they're not training on your data, and it will be in the Terms of Service. But do we really believe that? And that's a good point, that that's actually another major impact from this New York Times lawsuit, that it could, going back to the enterprise topic, it could affect how businesses trust them.

• 22:10Alex Kantrowitz?

  We're here on Big Technology Podcast, Friday Edition, joined here with Ron Tenroy of margins. We're going to go to break, and after the break, we're going to talk about Apple. We're going to talk about Snapchat Plus and a few other stories. Before we do, just want to say thank you all for sticking with us and listening to us all through the year. We've seen the audience numbers rise, and it's been amazing speaking with just a growing and engaged community of listeners. So thank you for that. Also, if you're in the holiday spirit and feel like giving us a five-star review on Apple Podcasts or Spotify, we would definitely appreciate that. And yeah, why don't we do more as we come back from the break right after this? This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now: co-pilots, chatbots, agents doing real work.

• 22:54Alex Kantrowitz?

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• 23:35Alex Kantrowitz?

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• 23:47Alex Kantrowitz?

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• 24:32Alex Kantrowitz?

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• 24:47Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday Edition, breaking down all the big news that's happened. Ron, John, at the top, you really mentioned that we are in a, you know, sort of traditionally quiet week of the year, but we have so much news coming out. And one of the biggest stories is the fact that Apple had to temporarily pull, and maybe for a longer term, pull Apple Watches, because it's been accused of taking some of the blood oxygen reading technology from a company called Massimo and doing it without a permission. And this has been such a big issue that it's now effectively been unable to sell these for a very important part of the holiday season.

• 25:31Alex Kantrowitz?

  I'm curious how you read the case right now, whether you think Apple is, you know, in trouble long-term, you know, not only in terms of its ability to sell these current models, but its broader pitch that Apple Watches is like really a health device. And where do you see it going from here?

• 25:46Speaker 01

  Yeah, for me, this was such an interesting story around the intersection of power and technology. And it's one of those topics we usually come up with it around antitrust, but even again, OpenAI versus New York Times. This is one of those weird moments where in real life, I went to the Apple Store on like December 20th or a few days before Christmas, and you could see the Apple Watches were still on display, but you could not buy them. And to see, you know, like the legal nuance of technology battles that you read about in the news, but you actually go to the store and the impact is there. And I think this is a big thing, you know, around 2023 was a major transition in the way we look at power and technology and companies

• 26:30Speaker 01

  actually being held accountable. And when you get into the details, you know, basically Massimo, a number of their engineers early on went over to Apple and then built their blood oxygen level monitoring technology in a very similar way. And the fact that, you know, a court actually demanded that Apple stopped selling during the peak sales season is telling that, you know, we are in a different time right now. And I think it's also a good reminder that me included, I get frustrated with Apple, but I still generally think of them as the good company and Tim Cook, you know, a friendly face versus many other tech CEOs. I think this was a reminder, and if this story

• 27:15Speaker 01

  keeps going, that Apple can play pretty, pretty heavy handed as well.

• 27:21Alex Kantrowitz?

  Absolutely. I mean, they've done this. They've effectively ruined the advertising businesses of companies like Twitter, which may have actually had a, um, an impact in the company's, you know, fire sale, not fire sale, but being forced to sale, to sell. And yeah, it is this big backlash against Apple, which, which is interesting. It seems like it's been a while coming, but the way that it's happening, this sort of moment of accountability for tech power is something that I have kind of felt maybe been a little bit in denial over because of these companies. These companies have effectively had their way for such a long amount of time. But seeing the Apple Watch pulled because of this like trade issue, trade secrets issue in

• 28:03Alex Kantrowitz?

  the middle of holiday season really does sort of make me have to relent and say, yeah, this is real.

• 28:08Speaker 01

  This was unthinkable a few years. Could you imagine like 2017?

• 28:12Alex Kantrowitz?

  I can't even imagine it now.

• 28:14Speaker 01

  Yeah, no, until I saw it, it did not hit home how big of a story this was that Apple, the, you know, the $3 trillion tech giant, actually a small company for unfair business practices actually could hit them. But I'll probably be buying the Vision Pro. I probably will.

• 28:36Alex Kantrowitz?

  So let's get to that in a second. But Reuters has reported that Apple can now resume the sales of the smartwatches after a US appeals court paused this government's this government commissions import ban on the devices. So do you think that that we've seen the end of this story? Or is it possible that the Apple Watch and its current form will effectively be held from sale for a long term?

• 29:03Speaker 01

  I'm not sure the Apple Watch, the interesting part of this story is, will it be able to be fixed via software? Or will it actually require a hardware change in their new generation of watches, the Series 9 and Ultra Watch 2? So I think if it's hardware, that's huge. And if it continues, right now, they're temporarily able to keep selling. But that's the part that we're going to have to see resolved. But another thing I think that's important to note here is, as you said, it was an import ban. It was actually the CBP, the Customs and Border Patrol that were enforcing this, which was weird to me to first read because I assumed, oh, is this coming from the FTC or some other, you know, body that we regularly talk about? So I think another angle that's important to note here is, it's a reminder

• 29:47Speaker 01

  that more and more of just the overall regulatory infrastructure is being used in these battles smartly. And I think that we're going to see a lot more of that. And it's the question, the conversation is no longer going to be, is Lina Khan good or bad? It's going to be, you know, big versus small, Massimo versus Apple, which is a much, a much different conversation.

• 30:10Alex Kantrowitz?

  Okay, you wanted to talk about the Vision Pro. Let's talk about the Vision Pro. But let's do it in context of the really rough, well, not rough year, but complicated year that Apple's had. So first of all, this is from CNBC. Apple's stock underperformed tech peers in 2023 due to the longest revenue slide in 22 years. And it's remarkable that this year, despite going up, what I think 53%, Apple has had four straight quarters of declining revenue. And of course, the bad economy is potentially possible. But the smartphone sales, right? The iPhone is the company. More than 50% of its revenue or right around 50% of its revenue. Those sales were slowest in more than a decade as people hold on to phones for longer.

• 30:55Alex Kantrowitz?

  We also know that there was no iPads in 2023 and iPad revenue has been down. It's been much tougher to sell Macs. And so you look at Apple's 2024 and you say, well, what does this company need to jolt back to, you know, growth again? Or yeah, I mean, yeah, revenue growth. And is it the Vision Pro? I mean, this thing is going to be $3,499. It's going to be, people are saying it's a big test. The company is expected to ship around 500,000 of these devices. So it's not a huge amount of sales, but I think people are going to be looking at Apple and saying, where's the growth going to come from? It's almost counting on this to show that it has this new area, maybe outside of services,

• 31:38Alex Kantrowitz?

  that can grow and can be a new product category. And I like sit back and I say, man, if the Vision Pro is what a company like Apple is counting on, I don't really think that that is the product that you want to be counting on, just given the obscurity still of virtual reality, a mixed reality. What do you think?

• 31:59Speaker 01

  I disagree wholeheartedly because I think the Vision Pro, like massive growth for a $3 trillion company is only going to come from some revolutionary new computing platform or way of just doing things. The same way the iPhone did that for phones and computing and overall just technology. So I think. It has to come from a place like that versus just nickel and diming streaming services. Again, I did, Apple keeps jacking up the price and it's very annoying of their Apple one subscription or music or iCloud, everything else. So I think, and they're making money and they're juicing customers. And I think it's bad for long-term business, but I think

• 32:42Speaker 01

  they have to, it does have to be a hit. I think it very well could be, and we're going to be talking about this a lot next year. But I think like Apple, yeah, versus this idea of services growth has been fine, but the idea that everyone's going to keep buying an iPhone every year is gone. iPads are good technology, so you don't have to buy one every year. So they have to find something new. And I think this could be it versus companies like Amazon that if you saw, I don't know if you saw this, they're going to introduce ads to Prime Video and you're going to have to pay an extra $3 a month to avoid ads. This, given it's the holiday season, I'm at home, I've watched a lot of

• 33:24Speaker 01

  streaming service content and I get very annoyed when I'm watching Hulu and I still pay for like the non-ad free version. And the idea that one by one, all of these companies are going to start injecting ads into it to juice revenue is, is just a reminder that how, I don't know, how they hid this, the long-term business plan, when the idea that it would be a different experience than cable and better than cable, it's just basically moving back to what that was.

• 33:56Alex Kantrowitz?

  Okay, we're going to talk about Amazon's ad play in a moment because I have a different perspective on it, but I just want to go back to the Vision Pro. So you said you're going to buy one?

• 34:06Speaker 01

  I think so. I think so. I'm going to wait for someone else to buy one and out of some trusted friends, if they rave about it, or if I try it and it blows me away, I think I could buy one. Cause again, I've spent probably close to 3K on a loaded MacBook Pro at some point that-

• 34:25Alex Kantrowitz?

  Yeah. So the question is what are you going to do with it? So it's going to be a computer for you?

• 34:30Speaker 01

  That's that's the vision for me. It's gonna be, I can just sit there and have five screens. That's all I've ever wanted in life after working in trading, a huge terminal in front of me. Just a bunch of screens. If I can do that in the comfort of my couch, I think that changes everything.

• 34:47Alex Kantrowitz?

  This is what I think might happen and why I might be wrong about why it's sort of dubious to count on something like the Vision Pro is because it just does seem like such a cool product that people will try to find uses for it, right? It's gonna be like, you know, the Oculus right now for Meta is not like, give me this and let me find a use case that will work for me. I need it like, it's like pretty well defined there. But with the with the Vision Pro, it just seems like it's gonna be a pretty cool device. The one thing, and people will try to find ways that they're gonna make it work, whether it's gonna be this like massive home movie theater or something that will give you these five screens. The one thing that I think is underrated with this Vision Pro is

• 35:28Alex Kantrowitz?

  I think people are underestimating the percentage chance that Apple's gonna actually delay shipping this thing. It's a complicated product. It has to work well. The prototype that it showed in its release event was not complete. And I would not count on Apple to have it ready in time. And if they do, I would not count on Apple to ship it perfect. I think it will be fairly buggy if they do ship it on time. Don't you think this is a potential issue here?

• 35:56Speaker 01

  That's an interesting point because one thing with the iPhone and iPad and watch and everything else, Apple has always done very well is ship things that are lacking features that everyone wants, but that are not buggy. So I think, you know, remember you couldn't even copy and paste on the original iPhone like they're they are very disciplined around shipping products that are tight rather than trying to stuff too many features into them. So I think that'll be that that'll be interesting to watch and and if the if it gets delayed, I think this looks very, very bad for Apple because I think everyone is looking at this as the next major growth vector.

• 36:39Alex Kantrowitz?

  Yeah, I wish I would have listed. I did this post on big technology of my predictions for 2024, and I wish I would have listed that the Vision Pro is gonna be delayed. I'm almost, I mean, I just feel like

• 36:48Speaker 01

  You said it here, it's on the record.

• 36:50Alex Kantrowitz?

  So, put it on the record. We'll check back when they're supposed to ship in early January, what will actually happen. Um, very quickly on the Amazon ad thing. So this is again, what's gonna happen is from NBC, Amazon Prime Video viewers will have to pay an extra $2.99 a month in January to avoid ads. And, you know, part of this, you know, people are talking about how this is gonna be on top of the $1.39 annual cost of Amazon Prime, uh, or the $8.99 per month standalone Amazon Prime Video subscription, um, and that Amazon's been spending so much on content and losing money and eventually people are gonna have to pay. I have a different perspective on this. My perspective on this is in 2023, Amazon's ad business worked so well

• 37:33Alex Kantrowitz?

  that the company just could not resist. It would be, felt it would be irresponsible to not include advertising in Prime Video where it could make insane margins. And in fact, the ad business has been, uh, powering a huge chunk of Amazon's retail business for so many years. And it just, it, it's one of those things where it could not resist any longer. It made zero sense to not introduce ads as including now that Netflix has, has put ads, the, the way has been paved for Amazon, and that is the reason.

• 38:05Speaker 01

  All right. I will agree with you on that one. That's, that's a good, I, I hadn't thought, no, no, I hadn't thought of that one. That's fair, cuz because I, I have been looking at this as just a follower move. Netflix, everyone else is adding ads, so why not just try to squeeze an extra three bucks out of customers? But you're right. You're right. It's more than the $3. It's actually the idea of kinda like interconnecting your entire Amazon ad inventory and business to an entirely new platform. The value is much greater than the three bucks. But then, uh, maybe, I guess, may, you gotta make it more than $3 cuz I feel the incremental like value per customer to watch ads is so great

• 38:48Speaker 01

  that you should be charging people a lot more to not watch ads. So

• 38:51Alex Kantrowitz?

  Exactly.

• 38:52Speaker 01

  Maybe that's just a temporary thing to ease people into this.

• 38:56Alex Kantrowitz?

  Yeah, make them an offer they can't refuse. Uh, so there's another story that you texted me over the break and I kinda, I'll let you run with this one. Uh, the Snapchat Plus story is really fascinating.

• 39:08Speaker 01

  I think this is the most under-covered story of the year. Snapchat Plus, which for those who don't know, you pay $4 a month for things that as not a heavy Snapchat user, because I'm old, I don't even quite understand, but you get access to some generative AI features, some things around streaks and whatever else. Seven million subscribers to Snapchat Plus. This is a world where Twitter blew, I'm not sure what the last estimated count was, but you know, a fraction of that, every social media company was trying to show that they could become freemium and add a subscription tier because subscription revenue is the greatest revenue of all.

• 39:50Speaker 01

  And Snapchat quietly has grown this product to seven million subscribers. I think it's, it's just, and, and no one seems to be talking about it, which is amazing to me. And I know like Snapchat overall users had grown in 2023. It's still a very, very heavily used product. It has never really nailed the actual ad targeting side of the business in the way a meta has. So, I mean, that's always been a shortcoming, but to me, this gets very interesting. Also, when you think about, out of those seven million users, vast majority of them are going to be younger, Gen Z, whatever else. So you're now, you know, training them to be ready to pay for products on your platform.

• 40:33Speaker 01

  So I think that as a gateway to other types of paid monetization, it opens up an entirely new window and we're going to be talking about them a lot more next year.

• 40:43Alex Kantrowitz?

  So we had somebody on LinkedIn post about, um, you know, did like a top 10 podcast they liked over the year and big technology podcast was on the list. And the person was like, uh, basically, I think they said something like, I like Alex's hot takes on CNBC and I really like it when he does long hot takes on the podcast, which I was like, I hope this is more than just hot takes, but in the spirit of that review, let me drop my hot take, which is that Snapchat Plus is more than a social media subscription service. I think Snapchat Plus is the first large scale consumer AI product. And it is the fact that they get this my AI bot, but it's also the other benefits that people get. So this is from, I think this is the verge.

• 41:27Alex Kantrowitz?

  Snapchat plus has given subscribers the ability to use AI tools to create images from text prompts, to send to friends, to expand existing real pictures with AI assumptions of what else should be in the image, and put friends together in fantastical image settings. And you put that together and you're like, wait a second, that's not a chat app necessarily. This is an AI app. And the fact that they have seven million people paying two ninety, no, three ninety nine a month, uh, leaves me to believe that this is the first successful, outside of ChatGPT, the first successful consumer AI app. Snapchat plus.

• 42:01Speaker 01

  Listeners cannot see my jaw on the floor because that, that is, I like this. As you're saying that, what I'm thinking is Snapchat essentially becomes a platform, like Lensa or any one of those AI apps that goes momentarily viral. And I myself for AI avatars early on paid, I don't know, some random app that shot to the top of the app store, ten bucks for that one time, twenty images or whatever, like every new technology that has gone viral and in some other flash in the pan external app can live on Snapchat. And, and you're right, because the thing that has always been impressive to me is from a product standpoint, from a user interface and experience standpoint,

• 42:44Speaker 01

  they've always been ahead of the game, like they've been so far above, beyond their peers. Again, they, they were doing augmented reality long before Facebook became meta and doing it well and making every, everyone use it. So the idea that they could actually productize generative AI in a fun, consumer-like way? I like this. I, I just hate saying any company is really an AI company, hashtag Tesla. But I think you make a solid case there.

• 43:12Alex Kantrowitz?

  Snapchat plus, the first successful non-open AI consumer app. I believe in it. They're doing it. Putting it all together. God bless them. I mean, it's been a very rough couple of years for Snapchat with the ad revenue. I mean, so, you know, maybe this is something that that gives them a chance to come back. They're supposed to make 4.6 billion in 2023, and Snapchat Plus is going to bring in about 7 million users, is expected to bring in 330 million a year. So obviously, still just under 10% of the revenue, but grow that a little bit more, and all of a sudden, you really see that the monetization of Snapchat becomes very different. It becomes a completely different company.

• 43:53Speaker 01

  And one more thing on this, I think why this is a good hot take is Snapchat has always been bad at the ad business. They have been bad at building and serving ads to customers. What they've been good at is building products customers love. So this is much more native to the what they're good at, and the way they do business, and what they seem to like to do than advertising ever was. So this actually seems much more in line with, you know, what makes Snapchat good and what they're good at. So I think I, hot take, mark this one down, put it on the record for 2024.

• 44:29Alex Kantrowitz?

  All right. So let's end this episode and end the year with a couple of moments looking back and looking forward. So Ranjan, when we talked a little bit about your big takeaway, your big prediction last year, all you would do is share this acronym with me, which is TANMAMA. What is TANMAMA?

• 44:45Speaker 01

  All right. So TANMAMA is the acronym that everyone should remember. It's the, in the past, we all had FAANG, which was Facebook, Amazon, Apple, Netflix, and Google. And this year, all we've talked about is how big tech was back. And TANMAMA, if for every stock market follower, is Tesla, Alphabet, Nvidia, Microsoft, Apple, Meta, and Amazon. And these companies, Nvidia was up 237%, Meta was up 195%, Tesla 108%, Amazon 83%, Alphabet 63%, Microsoft 56%. And we had already said, Apple was underperforming and Apple was up forty nine percent.

• 45:28Speaker 01

  In aggregate, they were up seventy four percent, and these are trillion dollar companies. So I think even though we covered Apple and Massimo and how big tech has threats, it was a reminder that in twenty twenty three, big tech dominated. And I actually think it was for a good reason. It wasn't any kind of bubble-ish sort of sentiment. It was that these companies consolidated power, Meta's advertising business came back. All of these companies have shown they can be leaders in AI. So I think this was the story of twenty twenty three that we all did talk about. And it was rightfully so. But I think what happens to these companies in twenty twenty four, that's going to be pretty interesting.

• 46:12Alex Kantrowitz?

  Yeah, I would say, listening to you, I would say it's a fairly, it's a good time to have a publication called Big Technology. I'm not going to rename it to Tan Mama, but I am very glad to be covering the space that we are covering. Because these companies are crucial. They're crucial in the business world. They're crucial when it comes to research and new technology, especially AI. They all played a role in advancing the state of artificial intelligence forward. We obviously are heading into a big election year. They're going to factor a lot there. And so I think just looking ahead to twenty twenty four, when it comes to big technology, these stories, these companies, you know, these firms, these people are at the center of every major story. And it's kind of interesting vertical to cover, right?

• 46:55Alex Kantrowitz?

  It's not necessarily like just the tech or just a business publication, but focused on big technology. And that, to me, seems to be the area to focus. And certainly, twenty twenty three, Ranjan, we have had no shortage of topics to talk about. And I expect it to continue and to only build as we move forward into next year. And I'm super stoked, you know, we kind of started this Friday show as a sort of experiment. We said, hey, like, seems like when we get on the air together, good things happen. Let's try to do it on Fridays. And it's been just super awesome doing these Friday shows with you. And I can't wait to continue them next year.

• 47:29Speaker 01

  Yep. Thank you to our listeners as well because this is my favorite way to end the week and now to end the year. So

• 47:35Alex Kantrowitz?

  Same here, absolutely.

• 47:36Speaker 01

  Talking about tech.

• 47:37Alex Kantrowitz?

  I look forward to it every week and appreciate you being here and appreciate you all the listeners. So thank you so much for that. All right, great. Well, that will end it for us here in 2023. What a year it's been for big technology. I was looking at our downloads stats. We did more than 900,000 downloads this year and it looks like we'll be well over a million next year. So thank you for being here. If you like the show, please rate it. If you've really liked the show, please share it with someone who might appreciate, who might appreciate it. And we look forward to being with you all through 2024, the emergency podcasts, the Friday podcasts, who knows what crazy stuff will show up. But I'll tell you one thing, we're excited to talk about it and bring you the latest news with discussions

• 48:20Alex Kantrowitz?

  with experts and between ourselves and with you. So thanks again for being here. We'll see you next time on Big Technology Podcast.

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