OpenAI and Microsoft Tension Boils, Amazon’s Job Automation, Zuck’s Spending Spree

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) OpenAI and Microsoft's tension boils as business relationship grows complex 2) Is Microsoft being anticompetitive? 3) How much money OpenAI owes Microsoft 4) Who holds the power in the relationship? 5) OpenAI discounts ChatGPT enterprise 6) New study shows using ChatGPT leads to eroding critical thinking skills 7) Does ChatGPT help or hurt education? 8) Andy Jassy says AI will replace Amazon workers 9) Is this really just a ploy to get workers using AI tools? 10) Zuck hires more AI execs 11) Waymo arrives in NYC.... kinda --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b 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?

  Microsoft and OpenAI have some major differences and things are getting heated as OpenAI moves to its next stage. Amazon CEO Andy Jassy says AI will reduce his workforce and Mark Zuckerberg keeps spending for top talent. That's coming up on a Big Technology Podcast Friday edition, right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya 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 our

• 1:26Alex Kantrowitz?

  traditional cool-headed and nuanced format. We have so much to speak with you about this week because the AI news cycle just rolls on with bigger stories each week. We have a fascinating battle between Microsoft and OpenAI that's just really heating up and might eventually prevent OpenAI's for-profit conversion. I also have this very interesting memo from Andy Jassy about generative AI and what it might mean for Amazon's workforce. And of course, Mark Zuckerberg is spending that cash and doesn't seem like he's stopping, so we'll pick up that thread from last week. Joining us as always on Fridays to do this is Ranjan Roy of Margins. Ranjan, good to see you.

• 2:03Speaker 01

  Good to see you. AI news doesn't sleep another week.

• 2:08Alex Kantrowitz?

  Sure doesn't. Never a dull moment. And leading this week is this really interesting conversation that we've had on the show and we will continue to have because it could influence the future of the AI industry. And that is what's going to happen with OpenAI and Microsoft. This is from the Wall Street Journal. OpenAI and Microsoft tensions are reaching a boiling point. Tensions between OpenAI and Microsoft over the future of their famed AI partnership are flaring up. OpenAI wants Microsoft's grip on its AI products and computing resources to loosen. And it also wants to secure the tech giant's blessing for its conversion into a for-profit company. Microsoft's approval of the conversion is

• 2:50Alex Kantrowitz?

  key to OpenAI's ability to raise more money and go public. But the negotiations have been so difficult in recent weeks that OpenAI's executives have discussed what they view as a nuclear option accusing Microsoft of anti-competitive behavior during their partnership. That effort could involve seeking federal regulatory review of the terms of the contract for potential violations of antitrust laws, as well as a public campaign. Well, what do we call this? The not so gentle singularity? I mean, this escalated in a hurry.

• 3:26Speaker 01

  So a few points on this. I think we'll definitely get into the for-profit company conversion, which is incredibly complex. We've talked about for months and months and months. Like, let's not even forget, remember Elon Musk sued over this conversion. They're getting hit from many different sides. And the fact that Microsoft is actually kind of acting as a hurdle is definitely a big issue. And that can prevent them from $20 billion of that sweet Masasun SoftBank money. So that's going to be a huge issue for OpenAI this year. But the federal regulatory review of anti-competitive behavior, I love

• 4:07Speaker 01

  this. I mean, they are saying that the deal that they struck is anti-competitive. From what I understand, like, what else could it mean? They're saying the money we took from Microsoft, and then that whole arrangement is bad for the industry and us, OpenAI as well. But can you read it another way?

• 4:30Alex Kantrowitz?

  It is bananas. I mean, it's one of those things where OpenAI needed a partner like Microsoft to be able to get to the place where it is today because of course, the most important ingredient in growing its products up until this point has been compute. And what did Microsoft had? It had that compute. What was OpenAI? It was a nonprofit. I mean, it's interesting because the ambitions were artificial general intelligence. So it wasn't like OpenAI wasn't thinking big. But it's almost like the company surprised itself with how successful it's been. It's almost like it wrote in that clause in the contract that both entities wrote in that clause in the contract that OpenAI and Microsoft's deal dissolves once OpenAI hits AGI, not really thinking that that would ever be possible because now

• 5:13Alex Kantrowitz?

  it's really coming into a place where they are going to, they're gonna have to work through these issues. And we right now have OpenAI owing, I think, 20% of its profits to Microsoft. This is coming from the information. OpenAI wants Microsoft to have roughly a 33% stake in the reshaped unit in exchange for foregoing its rights to future profits. If the companies don't change the 20% cut OpenAI owes to Microsoft, Microsoft could be in line to get 35 billion in payments in 2030. When OpenAI has projected, it will generate 174 billion in revenue. Now, OpenAI is on track to generate 10 billion in revenue this year.

• 5:57Alex Kantrowitz?

  So that's one hell of a projection.

• 5:59Speaker 01

  It's a good projection. It's a good extrapolation. You gotta extrapolate in this. Yeah.

• 6:04Alex Kantrowitz?

  Kudos to the person who put together the spreadsheet and kudos to whichever investor believed the PowerPoint.

• 6:10Speaker 01

  Yeah.

• 6:12Alex Kantrowitz?

  It really does come down to this. It's like OpenAI, again, they made the deal. They needed what Microsoft had. They agreed to like, all right, if we're doing really well, you're gonna do really well. I don't see where OpenAI has the wiggle room to back out of this.

• 6:25Speaker 01

  Well, they certainly have the wiggle room when Waymo comes to New York City and we declare AGI, which we'll get into later. But, but no, no, I, I, I agree that from a pure financial standpoint, or a pure contractual standpoint, they don't have a lot of wiggle room. They don't even have leverage, which is why I think that hail mary of the, whether it's through the FTC or that anti-competitive review, it feels like a hail mary, but it is because I don't think OpenAI has much standing in any other direction. But again, I think going back to, as you said, they're on track to make 10 billion, they're losing tons of money. Microsoft's share is in the profit, not revenue, and there's no sign

• 7:08Speaker 01

  that they're going to be turning a profit, even though they're projecting one by 2029. So I think in a certain way, a lot of this is moot anyways, other that, like from a financial standpoint, because the money is not going to actually change hands based on any kind of like current trajectory of revenue and profit. So it really is about control. And I think like, it's telling that they are, they're competing incredibly directly. Like, we're, we're seeing it more and more. They're going after the same use cases, customers, audiences.

• 7:41Alex Kantrowitz?

  I want to talk a little bit about the control part, because that is, I think, crucial. So this is also a new detail that emerged in the reporting this week. The deal with Microsoft is that Microsoft gets the right to use OpenAI's IP through 2030, which, by the way, if you do the math, is like, well beyond a lot of these lab leaders' predictions for when we get artificial general intelligence. I don't, I don't, I don't know. I'm, I'm not bought in that AGI is going to be here by 2030, but we'll, luckily, hopefully, we'll be doing the show. And if it does, I'll, you know, eat crow on the air and. Put together my army of millions of agents to shame me on Twitter or whatever it is. But, um, but.

• 8:22Speaker 01

  Well, I'm going to create an agentic workflow just to shame Alex for when AGI is declared.

• 8:28Alex Kantrowitz?

  I really wouldn't be very different from all the bots on Twitter that came after me for my perplexity acquisition take. But anyway, I digress, but there's another, this control is important because it's not just OpenAI's IP. The areas that OpenAI is expanding to also will end up competing with Microsoft and also are of interest to Microsoft to control. So here's another detail from the Journal story. OpenAI and Microsoft are at a standoff over the terms of the startup's $3 billion acquisition of the coding startup Windsurf. Microsoft currently has access to all of OpenAI's IP, but it offers its own AI coding product, GitHub Copilot, that competes with OpenAI.

• 9:09Alex Kantrowitz?

  And OpenAI doesn't want Microsoft to have access to Windsurf's intellectual property. I mean, if we think that coding is going to be one of the big applications of Gen AI in the near term. This is really bad for OpenAI because it effectively, the deal that it struck again, serves to put it in service of Microsoft and not expand its own offer.

• 9:33Speaker 01

  You know what? Maybe I am starting to feel this anti-competitive posturing a little bit because I guess it's true. They are competing incredibly directly, like right now, even Microsoft Copilot across the entire like 365 ecosystem competes very directly with ChatGPT Enterprise, like basically this kind of always on assistant and agent. It's a direct competitor and I'm sure in like when salespeople are going in and there's been more reporting that salespeople at Microsoft have been complaining that they charge $30 per user per month. ChatGPT Enterprise, it's competing directly, but they could be discounting it, meaning

• 10:16Speaker 01

  they're trying to undercut Microsoft's pricing, which is kind of hilarious because they're heavily invested and part owned by Microsoft. But I think overall. It does present a good amount of problems in terms of they're trying to do the same things, going after the same customers, probably indirect competition when going through any kind of enterprise sales cycle. So at some point, something has to give. And one could argue that Microsoft, by giving its compute because of its size as this tech giant, is acting in an anti-competitive bullying fashion. So maybe if Lina Khan was still here, she might, uh, she might agree.

• 10:58Alex Kantrowitz?

  But she's not. And let me point again to the fact that OpenAI signed the deal. This is your deal. You signed it. You wouldn't be here without it.

• 11:08Speaker 01

  Wait, I want, I'm trying to think of an example where a company ever took a lot of money and then called that funding or acquisition anti-competitive. I mean, it actually, I, how could it happen?

• 11:22Alex Kantrowitz?

  You know what you call that? It's the Sam Altman special.

• 11:25Speaker 01

  Yeah, the Sam Altman special. Give me money and then I'm going to go and say that you're bullying me for giving me that money in investment.

• 11:33Alex Kantrowitz?

  But also, if you think about it, Microsoft holds OpenAI's financial future in its hands as well, because it's a capital-intensive field, shall we say, to put it lightly. AI, you need money to build servers, to grow. We have this Stargate thing that OpenAI is trying to build. Your funders are not going to really be into giving you all that money if Microsoft really has control over your future or control over your, a good chunk of your sizable profits. That's why I think SoftBank told OpenAI, you better convert to a for-profit, or we're not gonna, or we have the right to withdraw our money. So I just want to ask you this, Ranjan. I mean, what does OpenAI have to

• 12:12Alex Kantrowitz?

  stand on here? Again, funded by Microsoft, really built by Microsoft, competing with Microsoft. What, am I crazy that OpenAI shouldn't be able to dictate the terms to Microsoft? Like, where in Microsoft's interest is it to change this deal?

• 12:29Speaker 01

  No, no, okay, I agree. In any normal like flow of logic, they would have no right to dictate the terms, given they they took not only took the deal, they probably pushed the deal themselves to work like this, because it basically, rather than kind of like traditional venture funding, where they would have had to be growing even faster, seeing more returns more immediately, it really was this sweetheart deal, where it was just kind of a lot of compute, a lot of like future looking projections and possible financial returns. But I mean, it was a pretty sweet

• 13:09Speaker 01

  deal for them. And to try to say that it was problematic or back out of it now, again, is ridiculous, the Sam Altman special, but it is becoming more, I don't want to say existential, but it's becoming more problematic right now, the way this is unfolding.

• 13:27Alex Kantrowitz?

  Do you think Microsoft may just say to OpenAI, sorry, I know this is important to your future, but this is what we agreed upon. So even if you're worth a little less in the future because of your your inability to spend the money you need to get bigger, we're just going to keep it as is. Thanks for playing.

• 13:45Speaker 01

  Yeah, I think they're going to have to. And again, like, there's been a lot of chatter around in terms like the success of co-pilot products and whether they're actually working or how happy people are using them versus ChatGPT Enterprise and OpenAI on the product side keeps swimming along. So at a certain point, maybe Microsoft does start to be a little bit anti-competitive and a little bit bullying, and they have the deal in the contract to allow them to, and OpenAI signed that deal. So I could definitely see it start to, yeah, explode. I think this, the more I'm thinking about this, this is going to explode in some direction this year.

• 14:30Alex Kantrowitz?

  And again, like, I don't see how this is anti-competitive. I mean, it's simply a company trying to hold another company to the deal that it signed. And if you think about it, Microsoft has already been more than generous in allowing OpenAI to go and work with other companies for compute. It's allowed it to work with Oracle for Stargate. And there's recently news that it's going to work with Google to build the infrastructure it needs to run.

• 14:54Speaker 01

  I'm trying, I'm trying here to, to take the other, in the interest of nuanced conversation, trying to figure out what could be anti-competitive, but I mean, I don't think it is in this context. In another context where like, like Microsoft, again, Microsoft using its ecosystem to push its own products in a preferential way. In any other context, you can start to see how that's kind of like classic anti-competitive behavior, but not when it's the company that you funded and gave them all the good terms and sweetheart and like, I don't know, like we will take, you know, projected profits down the road, even though you're losing billions of dollars and

• 15:39Speaker 01

  that's all we're asking in exchange for giving you billions of dollars of compute and, and cash. Like, I mean, yeah, I tried, I tried.

• 15:50Alex Kantrowitz?

  I'm just imagining the meeting between Sam Altman, Sam Altman and Adela, where Sam goes, Satya, you helped OpenAI become what it is today. We owe you billions of dollars, but here is a different idea. How about we owe you less billions of dollars?

• 16:05Speaker 01

  I mean, that is exactly what this is. If anyone somehow could pull that off. I don't know. Sam Altman's pulled off a lot over the last few years, though. Who knows?

• 16:17Alex Kantrowitz?

  I can just imagine Satya and Adela just like hating this guy right now.

• 16:20Speaker 01

  Yeah, but also let's not forget, there is a political element of this that could kind of start to filter in. If this, if they're serious and this really starts to kind of move into the realm of like federal review, let's not forget that Sam Altman and the Stargate announcement got some, got some good press for the administration is, I'm not sure at this exact moment where he stands with the administration, but like overall, he's had some good moments. Satya, I don't think Satya was at the inauguration, right?

• 16:56Alex Kantrowitz?

  Correct.

• 16:57Speaker 01

  Yeah, yeah, yeah, exactly. So like, maybe starting to use that as a, as a lever in this negotiation could be one way.

• 17:05Alex Kantrowitz?

  Maybe, but I think we like, we started the Trump administration with like, Zuck and Sundar and Bezos and Musk, all behind Trump and the inauguration, but he, you know, as tends to happen in politics, he has bigger things to worry about right now. The tariff stuff, the trade war, Iran. I don't think he even remembers who Sam Altman is. And

• 17:26Speaker 01

  I think that's fair.

• 17:28Alex Kantrowitz?

  And now imagine, you know, you mentioned OpenAI and Microsoft selling the same thing, whether it's ChatGPT Enterprise or Copilot, right? Very similar. Imagine you're OpenAI and you are going to

• 17:41Alex Kantrowitz?

  go into federal court to argue or make some plea to argue Microsoft is anti-competitive. And you're doing this. This is from, this is from the information. A software company that has, that had purchased OpenAI models through Microsoft over the past years was in talks to sign a new agreement to spend eight million on the models over the next three years. According to a Microsoft salesperson involved in the talks. But that firm notified Microsoft that OpenAI had offered it a 20% discount on the same models, reducing the cost over three years by $1 million. Microsoft salespeople asked the company's finance department if they could match the discount, but were rebuffed.

• 18:22Alex Kantrowitz?

  As a result, the firm told Microsoft that it was choosing to buy the models through OpenAI instead.

• 18:28Speaker 01

  I mean, this is exactly, this is exactly what must be happening now and is going to only grow in scale. These exact kind of negotiations. And again, Microsoft is a publicly traded company that has to show like certain projected financial metrics. OpenAI can light cash on fire right now. So they can, they can be pretty aggressive and literally undercut at every step of the way. Using Microsoft's capital and cash and compute.

• 18:57Alex Kantrowitz?

  Can you imagine being that salesperson? I mean, that's a pretty nice commission on an $8 million deal, I would imagine.

• 19:03Speaker 01

  Yeah.

• 19:04Alex Kantrowitz?

  Have that taken from underneath you, same model from OpenAI. His partnership is in trouble. So let's just look ahead. Ranjum, what do you think is going to happen with OpenAI and Microsoft? Like, what are the scenarios you're thinking about?

• 19:18Speaker 01

  I somehow still think OpenAI comes out ahead, mainly because the product at the consumer level, like, it's not going to just be crushed by Microsoft in that conventional way anytime soon. I think from like a courtroom contractual legal standpoint, I think Microsoft certainly has both like standing and like the legal firepower to, you know, hold this over OpenAI. But I don't know. I don't see what Microsoft can do to stop this at this moment. Like, they can't be like, just shut it down. They can't be like, don't, you have a separate sales force,

• 20:03Speaker 01

  but you are not allowed to undercut our pricing. So what could they do?

• 20:08Alex Kantrowitz?

  I think that they just say, we're not making, we're not going to budge an inch. And we're not going to let you get this money. We're not going to let you IPO unless we get some better terms, stuff that like holds to the earlier agreements that we had. And maybe they end up owning 40% of the company or something like that. And everybody just has to go about their business. But I don't think Microsoft, you know, made the, what some people called like the tech bet of the century in OpenAI, only to lose it because OpenAI worked.

• 20:37Speaker 01

  Oh, that's a, okay. I can, I can agree with that. I think it's, uh, yeah, I think that's a good way to put it.

• 20:47Alex Kantrowitz?

  I have an idea why Sam Altman may have thought this would work with Microsoft.

• 20:53Speaker 01

  Go on, go on.

• 20:55Alex Kantrowitz?

  That is that he is using ChatGPT too much. Because there was a study this week and written up in time that ChatGPT may be eroding critical thinking skills. Here's the story. Does ChatGPT harm critical thinking abilities? A new study from researchers at MIT Media Lab has returned some concerning results. The study divided fifty-four subjects, eighteen to thirty-nine-year-olds from the Boston area into three groups and asked them to write several SAT essays using OpenAI's ChatGPT, Google's search engine, and nothing at all. Researchers used an EEG, I guess that's, yeah, it's a machine that records writers' brain activities across thirty-two regions, and found that of the three groups, ChatGPT users

• 21:40Alex Kantrowitz?

  had the lowest brain engagement and consistently underperformed at neuro-linguistic and behavioral levels. Over the course of several months, ChatGPT users got lazier with each subsequent essay and often resorted to copy and paste by the end of the study. There were some people on X that were being like, look at the way that these people designed this study, they hate AI, they were trying to set traps for people to fall into, it's studies garbage. My reaction here is totally not surprising. I mean, are we, are we even gonna debate that this is happening?

• 22:12Speaker 01

  Well, one, if Microsoft investing in OpenAI was the tech bed of the century, I think you just nailed the segue of the century with that transition right there.

• 22:21Alex Kantrowitz?

  I'm trying, man.

• 22:22Speaker 01

  But, okay, so this study, I was thinking about a lot, because like, how or if generative AI will totally alter our brains is something I have wondered about. Like, I always think of maps, and I literally, like, I grew up in the Boston area, and when I was first driving and before any kind of Google Maps, I literally knew how to get all over the city, all around my town, just by memory. I've been in New York for many years now and have a car now, and I cannot get to JFK or LaGuardia driving without Google Maps. Like, I don't know directions from driving.

• 23:03Speaker 01

  But I think that's okay. I mean, if if if the entire like internet collapsed, I might be in a little trouble there. But the way I learned kind of location is completely changed. But I can now do it at a scale that was unimaginable before. I can go into a new locate locality and like just move around and navigate. So it's a different way of using the brain. I think this is, again, writing an SAT essay was already, it's such a specific kind of mindless thing, I think. Like, in reality, the act of doing it is not actual like intelligence in my mind.

• 23:42Speaker 01

  And I say this as someone who went through the process, it's like, it's, so to use that really specific thing, I do think is kind of misleading. Because taking a very mindless task, and then, of course, the person using ChatGPT, it's not going to trigger the level of brain activity because it was already a mindless task anyways, and it's perfect for generative AI. So for me, I think our brains, the way we learn is going to change. I think that's good. We have to adapt the way like learning is done for generative AI. But I don't think people are going to get dumber. Maybe that's optimistic.

• 24:21Alex Kantrowitz?

  But I think this is one of the points is a lot of the stuff, let's say you're thinking about using this for work. A lot of the stuff that you're doing at work will get your brain sort of deep into the material and help you think critically about a broader business activity. I'm just saying this for this sake sake of argument, because I do believe LLMs could be like really useful in the workplace. I don't, I think less of that in education, like if people are going home, not just writing their SATs, but like writing like essays for class, they're not going to retain anything. Because you actually, the pain that you endure in that writing is where you retain. But I actually like, just to sort of move from education to work, I wonder if this will make better workplaces if people are using more AI and whether it will make more competitive companies if people are using more AI

• 25:07Alex Kantrowitz?

  because of the impact that it could have on the brain.

• 25:09Speaker 01

  Hold on, hold on. Just quickly on the education thing. I think it really is going to demand like rethinking how the classroom works. And I think that's good, like writing essays. As you said, it was the enduring the pain of writing is where you learned in the past. That potentially goes away, but like presenting the essay, having to be able to defend it. Like more Socratic learning, like, do you, do you think this is going to be net bad for education? Or do you think we just have to update the way we teach?

• 25:44Alex Kantrowitz?

  I think we've had this discussion before. I am, I'm hopeful that we can find a way to teach better. But I think if you marry this style of learning with our current education system, you end up getting a disaster.

• 25:56Speaker 01

  I won't argue with that, I guess. The flip side, then you also get into, to me, the most optimistic part of this is the democratization of learning and like access to knowledge, learning tools. Like now the fact that anyone in the world can, anywherever you are, just with an internet connection, can actually like create entire curriculum tailored to you. Like, I think it's going to really be good for learning at a large scale. I think in isolated cases, couple of 18 to 39 year olds in Boston, writing an SAT essay, yes, that format is not going to be good and it's going to be changed.

• 26:40Speaker 01

  Like people will just cheat their way out of it and not actually develop their brain. But I, I kind of look at this like what YouTube did for learning. This is going to be at like a thousand X scale.

• 26:52Alex Kantrowitz?

  Yeah. So Dwarkesh, after we turned the cameras off for our conversation on Wednesday, it was like, yeah, I just basically drop stuff like papers I'm trying to learn and have chat GPT use the Socratic method and help teach me that way. So I think, yeah, hopefully we will develop new modes of learning. But I also think we're living at a time where we've known we need new modes of learning for a long ass time. And we're still doing the rote memorization and spit back stuff that we've been doing forever. Now, I'm sure there are going to be education professionals who are listening to this, who are going to know much more than me and say that there are areas where this is improving. I don't doubt that, but by and large, I think. My generalization about the education system really across the globe holds true.

• 27:34Alex Kantrowitz?

  So let's talk about work because we have limited time today and we should definitely get it to this Andy Jassy message to Amazon employees about AI in the workplace. He says, "We have strong convictions that AI agents will change how we all work and live. Agents let you tell them what you want, often in natural language, and do things like scour the web and various data sources, summarize results, engage in deep research, write code, find anomalies, highlight interesting insights, translate language and code into other variants, and automate a lot of tasks that consume our time. There will be billions of these agents across every company and in every imaginable field. There will also be agents that routinely do things for you outside of work,

• 28:18Alex Kantrowitz?

  from shopping to travel to daily chores and tasks. Many of these agents have yet to be built, but make no mistake, they're coming and coming fast." Can I just pause here before we get to the fact that he's gonna sort of now, you know, soon pledge to decrease Amazon's workforce to be like, "Come on." I mean, we've heard this promise for how many years now? And it's not there? And what makes him so confident? And of course, he's closer to the technology than I am. But what does he make it? What makes him so confident to think that this is going to happen?

• 28:50Speaker 01

  I would, I would push back. I think the vision that's being presented is going to happen. In terms of like time scale, when that happens, I think, like, again, the same way, learning has to change. Work is definitely gonna change. A lot of the repetitive things that we've all done over and over again start to be automated in some way. I mean, even thinking about like this podcast, being able to upscale our audio, being able to edit very quickly, getting video clips from Riverside. Like, this is something that would not have been possible a few years ago, even like two years ago at the scale that we're able and quality we're able to do for our listeners.

• 29:35Speaker 01

  Little plug there. But, uh, you know, like overall, I think it's definitely gonna happen. I think I'll agree that it's in every CEO's interest to say this, especially if you're a publicly traded company. It just is kinda easy to say we're gonna be getting efficiency gains and stuff. But, but I do think- From a messaging standpoint, it's important because this will force the workforce to actually start learning how to use these tools. And I think, I think that's whoever, whichever companies like figure that out. And I've thought about this a lot, like, are the winners of the next like decade going to be AI-first, AI-native companies?

• 30:17Speaker 01

  Or is it going to be giants that actually are able to transform themselves? And right now, it feels like it could be AI-native, AI-first companies. So I think the giants gotta get moving a bit more.

• 30:31Alex Kantrowitz?

  Yeah, you're hitting on it. So here's, here's Jassy's, another paragraph from him. He says, "As we roll out more generative, more generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today and more people doing other types of jobs. It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company." Wall Street Journal comments on this, "The real message Andy Jassy is sending to employees on AI. Jassy's memo likely has another aim. More tech leaders are propagating the view that job security in the age of AI means learning to use it fast. Jassy echoed this belief in his memo to workers this week, imploring them to be curious

• 31:16Alex Kantrowitz?

  about the technology. Those who do will be well-positioned to have a high impact and help us reinvent the company by effectively threatening a pink slip to those who don't, Jassy at least guaranteed that the AI workshops at Amazon's offices will be humming." A little cynical.

• 31:31Speaker 01

  Well, actually, you, you left out, I was thinking about this when you dropped in this quote. So the quote, "You're not going to lose your job to an AI, but you're going to lose your job to someone who uses AI." It's attributed here to Jensen Huang, who's told the Milken Institute in late May. I was saying, I feel I've been hearing that for years now, haven't you?

• 31:54Alex Kantrowitz?

  Yeah, that's not like a Jensen exclusive.

• 31:56Speaker 01

  I know. I was trying to figure out. I was actually looking up like who the original, like who we can actually give that quote to, but because I feel that if you want to sound smart in AI conversation, just look at someone very seriously and say it's people aren't going to lose their jobs to an AI. They're going to lose their jobs to somebody who uses AI and you will sound like the smartest person in the room. So.

• 32:19Alex Kantrowitz?

  Sounds right to me.

• 32:20Speaker 01

  It's right. It's brilliant. It's brilliant. It's the future.

• 32:23Alex Kantrowitz?

  So I guess like going, let's just tie this section up. Do you think that, do you really feel that Amazon is gonna contract because of AI? And if it does, will it be AI in the headquarters or will it be AI sort of in the form of robots in the warehouses? I think he's talking to headquarters employees here, but I think it's still a better chance that you'll get like robots with better dexterity that replace people in the fulfillment centers versus reducing workforce.

• 32:53Speaker 01

  See, I would actually disagree that Amazon in the frontline side of it had brought AI and automation at such a level that like is unparalleled versus other companies. So they already got this out into the frontline workers. So I think this, I think this is more geared at HQ and maybe he's just telling them to roll out Alexa plus because I bought an echo show after your episode and I'm still waiting for Alexa plus. I think you are as well. So maybe that's the real message here.

• 33:26Alex Kantrowitz?

  I mean, he mentioned Alexa plus in his memo and I was like, well.

• 33:29Speaker 01

  Well, well.

• 33:30Alex Kantrowitz?

  But I do think that we're going to see more CEOs with messages like this. And I think this Wall Street Journal writer is totally right, that more than a imminent downsizing, it's just going to be like, please use the tools because like you meant, you hinted at earlier, it's a lot of these co-pilots or whatever are just kind of sitting dormant. And that's why like I read Jesse's like big like vision setting paragraph about the agent. And he also talks about how agents will help work, you know, the work workforce and therefore. You know, you won't need as many people and I'm just like, I'll believe it when I see it at this point. It's like Apple Intelligence for me.

• 34:04Speaker 01

  Ah, okay. See, I'm still gonna, to me, if you have an AI illiterate workforce, you're not gonna see it. The technology is not gonna be enough to actually make it successful. So maybe again, the like, the, the implicit message in this is just become AI literate, because then you'll be able to actually build these agents, build these workflows, do all of this.

• 34:28Alex Kantrowitz?

  You know, I'm gonna agree with you here. I do think, I think we both agree. There's a tremendous amount of power in AI today, if you learn how to use it right. And if I was a CEO of a big company like that, I would definitely be imploring the workforce to, you know, get their hands dirty and, and get using these products. Now, would I say I'm gonna fire you if you don't? Probably not. But I do think that it's a good thing to be like, hey, you should, you should start using these. And there are ways to do it. Maybe, I mean, if you have to get, go to the workshop if you need to. Uh, but they, they can already help tremendously in, in certain workflows.

• 35:00Speaker 01

  Yeah, dude, learn how to use it. Otherwise, we're gonna do an aqua-hire-ization of your biggest enemy and nemesis and, uh, and be wary.

• 35:12Alex Kantrowitz?

  That's right. All right. So we're gonna go to break and come back and talk about Mark Zuckerberg's latest on his hiring spree. Before we do, I just wanted to say that, um, we've seen some ratings come in and I definitely appreciate everybody rating the show. I know I ask often, but again, it's the only publicly available metric to show, uh, our, our size and the fact that we have an engaged listenership. So if you could rate five stars on Apple Podcasts or Spotify, that would be much appreciated. Uh, I try not to ask too often. Sometimes we get someone that will listen to the show once and come in and drop a one-star review. And obviously, it's never fun to see that. So we know we have engaged listeners. If you're listening on Apple Podcasts or Spotify, uh, and can rate us, that would be great. And, uh, either way, we appreciate you being here. All right. We'll be back right after this.

• 35:56Alex Kantrowitz?

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• 36:40Alex Kantrowitz?

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• 37:23Alex Kantrowitz?

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• 37:56Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday Edition, where we are happy or intrigued to report that Mark Zuckerberg is still spending the money. And this week, last week, we had the $14 billion aqua-hirezition of Alexander Wang and the Scale AI, I don't know, leadership talent crew. This week, the money doubles. Zuckerberg tried to spend $32 billion on Elias Sutskever's AI startup Safe Superintelligence. Sutskever ultimately turned Meta down. This is according to the information. But the company is now in talks to hire Safe Superintelligence's co-founder and CEO, Daniel Gross.

• 38:37Alex Kantrowitz?

  And earlier this week, there were also reports that Meta was in talks to hire Gross as well as former GitHub CEO Nat Friedman. Meta is also reportedly talking to taking a stake in Friedman and Gross's joint venture firm, NFDG, which was invested in prominent AI startups such as Perplexity and Character AI. Gross and Friedman could significantly beef up Meta's AI superintelligence lab. So this idea that I brought up last week, that it's about the talent, you can, now you're getting to the point where compute matters, but talent is starting to matter more. It seems like, you know, this is really coming to fruition and Zuck is just gonna spend until he has this team of all-stars.

• 39:19Speaker 01

  I think aqua-hirezition, while said in a bit of jest last week by you, is going to go down as one of the bigger trends of the year. We're seeing it again. And, and I mean, in a way, even like the DeepMind acquisitions of, long ago, in AI with the big tech giants, maybe aqua-hirezition has been the modus operandi this entire time and is gonna continue to be like, rather than we're gonna buy your customers, your product, it's actually, we're just buying the talent and that's all that matters. So yeah, I think we, we could see more of this. It's gonna be interesting, but also at a certain point, when do you have enough talent?

• 40:00Speaker 01

  Like, what's the inflection point that you're like, okay, we, we got everyone we need. We're like 100 billion down. We have a team of AI Avengers. What do we do now?

• 40:15Alex Kantrowitz?

  I mean, you you optimize the models and you try to come up with new techniques. And all these talented leaders will have people working underneath them that will be able to execute. You would think the new strategies that they try to pull off. But I think it's kind of notable that he wasn't able to get Ilya. I mean, it's a moonshot.

• 40:34Speaker 01

  Thirty two billion for a pre-product startup.

• 40:37Alex Kantrowitz?

  Right.

• 40:37Speaker 01

  Not a bad deal.

• 40:38Alex Kantrowitz?

  That's a moonshot to try to get him because we know that he's definitely, I would say, like fairly ideological. Left Google to go to OpenAI because of the promise of the safety work. Left OpenAI after some weird stuff happened with Sam. And I think Kevin Roos from The Times has a pretty interesting take on this. He says, "The problem with trying to buy your way into the AGI race in 2025 is that top-tier AI researchers are already rich. Think we have like one to four years before superintelligence and don't want to spend those years building AI companions for Instagrams." For Instagram.

• 41:10Speaker 01

  Actually, okay, that's a good point. I mean, first of all, I think Ilya is worth thirty two billion just for the branding of superintelligence and bringing ASI to market and letting us move past AGI. But I think that's fair that, yeah, I mean, if you're already a researcher by like disposition and you are worth a couple hundred mil, you don't want to build it like an ad optimizer for Facebook, an Instagram fake companion, a Khloe Kardashian like replica. You would like to be getting to your ASI. So that makes sense. It's going to be a bit harder, which makes more sense that like Nat Friedman, GitHub CEO, that persona of like a true business builder,

• 41:55Speaker 01

  they're the ones who actually are going to be more open to this kind of thing, I think.

• 42:01Alex Kantrowitz?

  Now, in theory, there is a separation between the research side of Meta's AI efforts and the product side. And I believe there is, but it's clear that in companies like Meta, like companies like Google, the research and product sides are coming closer together. So it could be like, yeah, you come, come in, like even to the researchers that he's going after, come in and we'll give you money and you can try to build the best AI model. I think there'll probably be some reluctance, at least at the beginning, to, to believe that. I mean, especially you saw what ads came to WhatsApp after the promise. I think there was a promise never to bring ads onto WhatsApp. They're there now. I'll just say this one thing. The best way to make this work is to build a product that works.

• 42:45Alex Kantrowitz?

  If they can really start advancing the status quo, then they'll get more people involved. And, you know, it snowballs, but I think, yeah, you have to do that with talent and he's doing, going after the talent. So I, I think the strategy is smart.

• 42:59Speaker 01

  I will agree that they have the distribution in place. So that's not going to be an issue. So maybe it is fair that they, they're have to put their entire bet on just improving the model significantly in the short term and definitely not falling behind. And then they can win solely on distribution.

• 43:18Alex Kantrowitz?

  Okay.

• 43:19Speaker 01

  One, one quick rant on WhatsApp.

• 43:21Alex Kantrowitz?

  WhatsApp, yeah, do the WhatsApp ads thing.

• 43:23Speaker 01

  All over New York, last, like in the High Line in New York, there's these huge out of home marketing activation of like, it was just kind of ridiculous. It was like WhatsApp, we don't read your messages. WhatsApp, we can't see anything. Like there was a kind of these blurred out, I don't know, big like it was plastic things that you would stand behind and they would take a picture of you. It was just weird. First of all, anytime you're told over and over, we don't read your messages. I'm just asking, why are you having to shout this repeatedly? Are you reading my messages? My other favorite thing is they also just in the corner had a little waiver that by taking

• 44:06Speaker 01

  part of this activation, you are releasing the rights to be filmed for marketing purposes, which is classic Meta. But what I loved was, so I started seeing this, a number of podcasts I listened to, they, these ads started showing up. There was like big billboards in Times Square showing this. And then a week later WhatsApp announces it's going to be launching advertising within the app for the first time in its life. So

• 44:34Alex Kantrowitz?

  There you go.

• 44:35Speaker 01

  Yeah, yeah. Never change Meta, never change.

• 44:39Alex Kantrowitz?

  Okay, one more thing I want to talk about. I just saw a report that Meta discussed buying perplexity before investing in Scale AI. Hey, get off Apple's lawn. All right.

• 44:47Speaker 01

  Yeah.

• 44:47Alex Kantrowitz?

  This is Tim Cook's deal to do and Tim Cook's alone.

• 44:50Speaker 01

  You lose your finder's fee if Meta gets them.

• 44:54Alex Kantrowitz?

  That's true. I know. I actually been DMing with the chief business officer of perplexity, who told me that the deal is not likely, but the Meta scale deal was so unlikely that I feel we and I feel we aren't living in a world of likelies. I read that as a as a maybe, but also he told me that Apple and perplexity haven't had no M and A discussions. So if this Meta thing is true, Mark Zuckerberg has done more M and A discussions with perplexity than anybody else. I think if Meta can get perplexity, it should do it. I think that would be smart.

• 45:23Speaker 01

  I think it would. I mean, speaking of anti-competitive, though, I mean.

• 45:28Alex Kantrowitz?

  Meta doesn't have any search.

• 45:31Speaker 01

  Actually, that's that's a fair point. And suddenly, search becomes more competitive and this pushes back against Google. All right. Approved.

• 45:39Alex Kantrowitz?

  Okay, thank you. That was a very easy approval process. And I expect that it would be the same level of ease as we would see with the federal regulators. Okay, sorry, I said one last thing. One last thing on this. I got a text from someone who listens, who said, What is Facebook doing? These assholes couldn't get along at OpenAI as it was. I think they're going to get along with Meta. I mean, of course, it's it's it's a disparate group, right? It's not exactly all OpenAI alumni, but there, you know, that's that is one of the biggest risks when you bring in big personalities is that they will they will be too big to like someone on Twitter floated like, wait, Ilya is going to report to Alexander Wang. What's what's the idea here?

• 46:19Speaker 01

  Oh, my God. I would love to. That's just the reality show and podcast worthy content to give us material alone would be worth the 32 billion.

• 46:30Alex Kantrowitz?

  Oh, yeah. I mean, I would love to. I mean, I think our our numbers would double immediately weekly reports of how things are going.

• 46:37Speaker 01

  Do it, Mark.

• 46:38Alex Kantrowitz?

  On inside. Do it, please. For the sake of big technology listenership. Thank you, everybody for listening. All right. Let's end here with the closest sign that we are nearing. AGI Waymo is about to start testing. In New York City, we also have Tesla starting to roll out its pilot in Austin. I think that's coming in the coming days. It's going to be with safety drivers and Waymo will also be with drivers in the front seat until they until they get approval to drive. But like we said, if if Waymo starts rolling around New York without any drivers, you and I here on the show will declare AGI.

• 47:12Speaker 01

  Yeah, we said there's there's currently the ARC AGI benchmark, which is one of the industry standards. We've proposed the WIN AGI, W I N, Waymo in New York benchmark. You roll through like Broadway and 34th on a in a driverless Waymo, AGI is here, cancel the Microsoft OpenAI contract, AGI is declared, it's done.

• 47:38Alex Kantrowitz?

  And what a storyline that would be if we see Waymo's going down Fifth Avenue and then Sam Altman follows along and says, I'm free. See you later, son. Yeah. ChatGPT is half off this week.

• 47:53Speaker 01

  Greatest marketing stunt of all time.

• 47:56Alex Kantrowitz?

  I could see it happening. All right, Ranjan, great to speak with you as always. Thanks for coming on.

• 48:01Speaker 01

  All right, see you next week.

• 48:02Alex Kantrowitz?

  All right, everybody, thank you for listening. Next week on Wednesday, we should have legendary investment analyst Tom Lee coming on. So stay tuned for that. And then Ranjan and I will be back next Friday. Thanks for listening and we'll see you next time on Big Technology Podcast.

• 48:53Speaker 02

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