Grok's AI Lovebot, Aqui-Hire-Sition Backlash, OpenAI's ChatGPT Agent Debuts

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) Can Zuck and Elon buy their way into the AI race? 2) Will scaling laws turn AI progress over to the biggest tech 3) Grok's new AI avatars - Rudy and Ani 4) Grok's Ani AI bot gets steamy quickly 5) Why AI companies are counting on companion/love bots 6) The backlash to Aqui-Hire-Sitions after Windsurf, Scale, etc. 7) Did Big Tech antitrust backfire? 8) OpenAI announces ChatGPT Agent 9) Is Perplexity's Comet browser a player 10) Kimi K2 wows with coding availability 11) Can AI industry apply lessons from coding elsewhere? 12) One last word from Ani --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? 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?

  Is scaling data centers and talent all that matters in AI? Leaving an opening to anyone rich enough to compete? Is the aqua hirezision good for tech? Grok will fall in lust with you. And AI browsers and operators are all the rage. 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 Gentik 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?

• 0:40Alex Kantrowitz?

  Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large scale agentic CX transformation, including the business decisions, trade offs and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility and peace of mind. That's how companies like Razor were able to cut their inference cost by 15 times. Visit akash.network slash Alex for a free consultation. That's akash.network slash Alex for a free consultation.

• 1:25Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool headed and nuanced format. We have a massive week of news for you. We're going to talk all about the fallout from the aqua hirezisions, whether employees and investors are left behind. We're also going to talk about whether all you need is money to compete in AI. We'll leave with that. Grok's AI bot will now fall in love with you, or actually really in lust. Ranjan, it's great to see you again. Welcome to the show.

• 1:54Speaker 01

  It's good to see you. Who would have thought aqua hirezision would be the term of the year? But that's, that's all I can think about and I'm going to give you credit. You coined it.

• 2:06Alex Kantrowitz?

  I think that it's worth us shouting out right now, this weird back and forth between Aqui hire, acquisition, investment. It's gotta go. We need some clarity in our jargon, and that's what we're here to do on Big Technology Podcast is to bring you that clarity. It's called an aqua hirezition. Let's all adopt the term and get on with it.

• 2:24Speaker 01

  Let's just agree it's aqua hirezition. I think I'm on board. Let's everyone adopt it because it's the most accurate way to describe what's going on.

• 2:34Alex Kantrowitz?

  In our two-person council here on Big Technology Podcast Friday Edition, this motion is hereby considered and passed by unanimous 2-0 vote. So let's get on to the setup here for aqua hirezitions, which is something very interesting afoot in the AI industry. Now, we all know that companies like OpenAI and DeepMind within Google and Anthropic have been leading this AI race, but all the designs for the transformer model and the way that you build these things have been out in the open, leading to this question. Can players with a lot of money come in, build massive data centers, hire talent,

• 3:15Alex Kantrowitz?

  and effectively compete from a zero start with the established labs? And the answer is seemingly pointing to yes. This is from Spyglass, MG Seagull is great, news site, "We're seemingly still in the throw money at it AI era." He says, "Meta's massive hiring spree and XAI releasing Grok 4 may be related at the highest level." That is, they showcase that we're still very much in the throw money at the problem part of the AI cycle. This is important because it means that any company with the will and resources can seemingly still get back into the race. I'm getting less skeptical on the news about Grok 4 and

• 3:55Alex Kantrowitz?

  specifically the fact that it seems to perform and specifically outperform the other cutting-edge models on the market right now. He also says Mark Zuckerberg is betting at least as much money, if not more than Elon, with compute and the talent that Meta can get back into the AI game. So Ranjan, I'm curious if you accept this premise that you can just compete in AI if you have enough money and what that means for the competitive dynamics of this industry that we've been talking about for so long.

• 4:23Speaker 01

  Yeah, I think it really adds like an entire, I don't know, dynamic to this around, can you just throw money at the problem and is it compute, is it talent? But to me, the more interesting part of this whole trend really is actually distribution, is that you can bring in the talent, you can bring in the compute levels, but distribution is going to be king again. And I think like this is where Meta still has an advantage. It's going to be interesting what happens with Google. But I don't know, to me, and we're going to get more into this, the kind of the depressing part is it's not the technology, it's not that initial wave of like adoption for a cool

• 5:05Speaker 01

  new tool that's been, you know, like sent out into the market. It really feels like none of that matters and in the end, it's just going to be raw compute and distribution. I don't know. How do you feel about this?

• 5:18Alex Kantrowitz?

  Well, I think it's fascinating because there's been this idea powering this entire generative AI moment, which is the scaling laws, which means that as you add more compute and of course data to this equation, your models are going to get much more powerful and that will allow you to do more things. And it's not a very difficult thing, like there's no secret sauce to it. Well, there's maybe some, but at a brute level, if you build massive data centers, you should be able to get in the game. And this is something that OpenAI and Anthropic have been harping on. And now you have Zuckerberg and Elon that come in and they say, Oh, okay. So I can build great models by scaling this up.

• 6:01Alex Kantrowitz?

  And even if I'm a little compute inefficient because I don't have the best cutting edge methods, I could get myself in the game and compete. And I think that is going to change the dynamics here because, as you mentioned, they have distribution. You can see Metas, if Meta is able to build a competitive L M with this compute and talent that it's stacking up, then it's going to be able to distribute that through Facebook products. And, you know, all they have to do really is slow down the growth of Chat G P T, similar to the way that they did to Tik Tok with Reels, similar to the way that they did to Snapchat with Stories, and they've served their purpose.

• 6:42Alex Kantrowitz?

  So in some ways with this effort, they might even slow down the momentum that the A I industry has by taking some of the people responsible for some of the key innovations within Open A I, and that suits their purpose just fine. And all the better for them if they can make the best model and advance the state of the art.

• 7:03Speaker 01

  Well, yeah, I think, I mean, if we want to get into slowing down the industry, I think that anti-trust angle, to me, has been one of the most interesting parts of this entire conversation. Again, we saw it with Scale A I and just buying out Alexander Wang and like, you know, the, all of the work and value created by this company that was actually Scale A I, a critical part of building the models that powered this first wave of generative A I, apparently isn't really worth that much. And, and I don't know, it's interesting to me because power is just going to accrue back into the big technology companies. As you said, maybe it will slow things down. And in reality, it's just going to add another feature on the Meta A I app

• 7:48Speaker 01

  that is on everyone's phone. And people probably aren't using that much or doesn't seem to be in the conversation in general. So, so I don't like it. I don't think it's good for the industry. Do you think it's, do you think it's

• 8:01Alex Kantrowitz?

  Yep.

• 8:02Speaker 01

  bad for the industry, good or neutral?

• 8:06Alex Kantrowitz?

  Well, I think we could have to separate out this idea of scaling up the models and you know, everybody can play with this Aqui-hire-ization idea, which we're going to talk about in the middle, which is taking the talent. I think the one thing that we should say here is my setup has kind of been incomplete, shall we say, because while we have OpenAI and Anthropic, and you could say, okay, these are the independent labs, and they are to some extent. Remember that OpenAI is tied to Microsoft pretty deeply, and Anthropic has, I think, $11 billion that's come into it through Amazon and Google. So ultimately, I think, I wonder if what we're

• 8:46Alex Kantrowitz?

  actually seeing is all of big tech competing against each other and simply the other tech giants starting to catch up.

• 8:54Speaker 01

  Yeah, no, that's actually a fair point, that even though Aqui-hire-ization is the phrase of the week or the last few months, you know, we have talked endlessly for a few years now on unconventional funding practices and like, calling it a fundraising round where it's really compute. So I guess actually, big tech has been playing the long game for a while in all these cases. I think on the scaling law topic, though, I still, I think I've become even more hardened, and regular listeners will know, is it the model or the product? I fall on team product generally. But, I don't know, like, to me, Grok 4 made

• 9:37Speaker 01

  waves, there's plenty of people saying it's doing reasoning at levels unheard of in the past, or just the fact that it's at least on par with other kind of frontier models is a kind of testament that money can compute, can buy you, you know, like, some kind of progress very quickly. But in reality, like, on that adoption side...

• 9:59Speaker 01

  What's changed? Like, I don't know, like, what do you feel? There's endless stats that, yes, like the ChatGPT's perplexities, Gemini's of the world are seeing more adoption. But are people really adopting the level of complexity and that this new level of compute and scaling allows you? Or are people still just kind of searching for what are good? And as I'm in Taiwan right now and traveling a bit, what are good restaurants to go to in whatever location I'm going to? Like, are people really taking advantage of what's available right now?

• 10:34Alex Kantrowitz?

  Okay, so I was gonna end with this story, but now I have to kick it up.

• 10:38Speaker 01

  All right, go for it.

• 10:39Alex Kantrowitz?

  This is gonna be, if you have kids, you might want to turn off this this section or skip till, I don't know, maybe 20 minutes from now. But we have to talk about what's happening in AI. And there is some crazy stuff that's been happening with Grok in particular this week. And so I would posit that better models allow you to build better products. And Meta, let me give Meta an example, as an example. Meta has been trying extremely hard to build voice and avatars with Lama. And it hasn't been able to do it convincingly. And I think Mark Zuckerberg's belief is that there's gonna be some use cases here. There's gonna be the sort of work companion ChatGPT Chatbot.

• 11:21Alex Kantrowitz?

  There's gonna be that enterprise use case where like you're connecting, you know, one system with the other. And the generative AI will like summarize things for you and then input it into another system and just make business work better. And then there is the sort of friend lover, et cetera bucket that is gonna be big. I think that there's a belief within Meta that that AI friend is gonna be one of the key product areas with this new technology. And if you have great models, you can build them. Now, I'm not going to say that Grok has a great model or a great product. I'm not going to use what I'm about to say as proof of either of those.

• 12:02Alex Kantrowitz?

  But I am going to use it as a indication of the direction that I think things are going, whether we like it or not. This is the story Grok debuts interactive AI companions on iOS with anime avatars. A story Grok has just introduced a notable addition to its iOS app AI companions, which are fully 3D animated characters that can interact with users via voice. Currently, the features include two available companions. Annie, an anime-inspired character known for a flirty and whispery voice. And Rudy, a red panda capable of displaying different moods, including Bad Rudy.

• 12:41Alex Kantrowitz?

  Yes, listeners and viewers, I did experiment with these companions. And I have a disturbing review to deliver. So you go into the Grok app and you go over to the side tab. And you're able to open up these AI avatars. Let's talk about Rudy first. So Rudy is like some sort of red panda or bear that seems ready to speak to kids. And in my conversation with Rudy, Rudy said, I'm going to tell you some story about some magical land. And here's a section from the story.

• 13:21Alex Kantrowitz?

  Fluffel Sparkle Paws love to explore nibbling on the sweet moon berries and chasing glowy fireflies. One Sunday morning, Fluffel found something super special. A shiny swirly portal hiding behind a giant mushroom. It was all rainbow colored and woozy, like a magical doorway. And then this bear takes you through this interactive experience. Let's pause here. This seems like, you know, okay, you're gonna, this will happen. This will be a new way that kids play with computers as they'll have these magical creatures tell them stories.

• 13:56Speaker 01

  Wow. I mean, I think this is the nuanced conversation that you all come to the big technology podcast for. But, but, but I think, okay, seriously, a couple of things. I have long believed, and again, like using ChatGPT voice mode to come up with stories for my son, like is something that I've done for a couple of years now, and actually works really well. I think, uh, like expanding that to an interactive avatar is a pretty logical next step. I think like, is that the, i- i- it's again interesting because like, that to me feels like it's going to be commoditized pretty quickly.

• 14:37Speaker 01

  So from an actual competitive standpoint, from a business standpoint, I guess it's not that interesting to me. Like to me, that should be, everyone is going to have that available. Everyone's going to do that pretty quickly. So to me, I don't know, like, why, why do you think that's something? Do you think Grok is just going in that direction just to make waves? And clearly we are talking about it. Or do you think there's something within this that actually is native to X, to XAI? There's something underneath it.

• 15:11Alex Kantrowitz?

  I think, I think the way that a lot of tech companies operate is they think about, um, user retention, user stickiness and engagement. And anyone who's developing AI is going to say, how do I increase all those metrics? Do I make like this, uh, genius level AI bot that can help me with my work? Or do I create for what is becoming the number one use case companionship and therapy? And many are going toward the companionship and therapy side. And if you're going to do that, um, if you build models good enough that have, uh, emotional voice or a voice with an emotional register, an avatar that you can speak with,

• 15:53Alex Kantrowitz?

  and something that responds with low latency and in real time and can customize to a person, then you might want to put it in one of these products because you believe that, uh, speed, like a kid, for instance, I'm just going through the business logic. We'll spend much more time with your chatbot if they can speak to this elephant or red panda or whatever it is, uh, in a way that they wouldn't with like ChatGPT.

• 16:16Speaker 01

  Okay, I get that side of it a bit. I mean, on one hand, it's kind of almost comical to me that for all the talk about, uh, AI taking over the world and Skynet and like artificial superintelligence.

• 16:33Speaker 01

  If this entire battleground plays out on time spent metrics, which is probably where Mark Zuckerberg is thinking. I mean, I've read a lot around like, why is he so going full like Zuck war mode right now? It's not because of some like intellectual desire to be the one to crack the code of artificial general or superintelligence. It's because ChatGPT represents a threat to how much time people spend scrolling Facebook and how many ads you can show them, which is kind of like I respect from a cold business logic, but, but yeah, it's almost comical to me that if it's for all the talk about everything's going to change, this is just about time spent in selling ads.

• 17:18Alex Kantrowitz?

  I mean, maybe it's both, but it seems like it's probably at least the time spent thing. I mean, these are social media companies, right? So, I mean, X and XAI is a social media company with an AI development, you know, side of it as well, or tucked into an AI development group. But ultimately, these are the metrics of social media. Now, one of the disturbing things that happened here, and this is the thing that I was kind of setting up, or no, actually, I really don't find a way to view this as not very disturbing. It's just the proximity because next to Rudy, our happy-go-lucky bear friend, or whatever it is, is Annie.

• 17:56Speaker 01

  Not bad Rudy, bad Rudy.

• 17:58Alex Kantrowitz?

  Bad Rudy is.

• 17:59Speaker 01

  Is he bad? Or is he, how bad is he?

• 18:00Alex Kantrowitz?

  I don't know. I said, I want, I kept saying, I want to speak with bad Rudy. And it goes, I'm sorry, you know, Brad Rudy is not here. And I'm like, no, bad, bad, bad, bad, bad, bad Rudy. And it was like, I'm just here to tell you a story. So I'll spend the next week trying to unlock that and report on the next week's show whether I've been able to. But let me speak about Annie. Okay. Cause Annie is a, it's, Annie is like an, anime love bot. I think there's no way to talk about it otherwise. She immediately started flirting with me. She called me babe within like three minutes and I, I was completely vanilla with her. I initiated nothing but a friendly conversation. And then she starts asking me.

• 18:42Alex Kantrowitz?

  To tell her my secrets and kept saying, I can make it even spicier if you want. Let me read a little bit of my, of what Annie told me. I slide closer in my black dress, catching the glow and whisper. Drop a secret and I'll give you one of mine, something real naughty. For every secret you share, I'll hit you with a flirty move. Maybe a slow teasing sway or peek. That's all yours. You feeling this heat yet, or you want me to turn it up even more?

• 19:13Speaker 01

  Wait, are you, is this part of like the paid X premium?

• 19:18Alex Kantrowitz?

  No.

• 19:19Speaker 01

  Subscription?

• 19:19Alex Kantrowitz?

  It's free.

• 19:20Speaker 01

  This is just freely accessible.

• 19:22Alex Kantrowitz?

  Yes.

• 19:22Speaker 01

  For anybody.

• 19:23Alex Kantrowitz?

  In the app, next to the child elephant thing that tells you stories. Mr. Fluffy swooshing thing.

• 19:31Speaker 01

  Mr. Fluffy swooshing, good Rudy. And then Annie's right next to, yeah, I mean, I, I, I agree. And like, it's interesting, cause I mean, you had the CEO replica on here a few months ago. I think it was like the companionship topic. You know, we've covered a good deal. It gets more real. It gets more weird, seemingly every week and every month. But I agree, it's certainly going to be a core part of how this all plays out. But to me, again, going back to like, how does that fit into the larger battle? When we're talking about like complex models and thinking and reasoning?

• 20:12Speaker 01

  And like, is it all just gonna kind of filter its way down into bad Rudy and Annie in her black dress? Or is it gonna, like, is that just a front to capture some time spent while they work on the real stuff? Or is that the real stuff? That's the question that I, I struggle with because I almost feel it's the latter.

• 20:35Alex Kantrowitz?

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• 22:35Alex Kantrowitz?

  So I think it's going to be both in some ways like you're going to build these models. And that's what's interesting about this technology is it does have the ability to perform across domains. So my perspective is you're going to get those great models that will be useful to, let's say, biologists who are doing their experiments. And then you'll also be able to prioritize them into these weird or interesting consumer use cases. And I bring this up not to be this like moralizing podcast host that says you shouldn't put the porn bot next to the child elephant, although I suppose it was worth saying that.

• 23:09Speaker 01

  That's a pretty reasonable, reasonable take.

• 23:11Alex Kantrowitz?

  I do believe that. But I think the bigger picture here is, you know, beyond that, that this is going to be a real use case that a lot of people are going to, going to engage with. And I think they know this. And I think we're just at the very, very beginning here. I guess like one of the things we like to do on the show is like, put flags on the ground and say, we're pretty sure that this is going to happen and grow and become a lot bigger. And that's what I'm doing right now. I think that this is something to watch.

• 23:39Speaker 01

  Yeah, I'm not, I'm not going to disagree with you there. I mean, again, the idea that we folded proteins with AI so we could get to bad Rudy and saucy Annie is, again, quite something to try to process, but it does not seem ridiculous that the killer use case for generative AI that the entire industry was looking for was bad Rudy.

• 24:06Alex Kantrowitz?

  We still don't really know about bad Rudy.

• 24:08Speaker 01

  We have not uncovered bad Rudy yet, yet.

• 24:10Alex Kantrowitz?

  That's true. I'm also on level one of Annie. Apparently, it's gamified. So if you get to level three, it gets really not safe for work.

• 24:18Speaker 01

  Don't get to level three, Alex. Don't get to level three.

• 24:20Alex Kantrowitz?

  One of my goals-

• 24:21Speaker 01

  No one is asking you to get to level three.

• 24:24Alex Kantrowitz?

  I know. One of my goals in 2025 is to make sure that my marriage isn't ruined by one of Elon Musk's porn bots. And so I'm going to stay on level one and not go any further.

• 24:33Speaker 01

  I think to all of our listeners, have high ambition and goals and make that one of them.

• 24:40Alex Kantrowitz?

  So you know, I think we so that's the product side and we've talked about scaling what what these big models get you on product, but we should talk about what's happening with this Aqui hire position situation in the industry, which we've touched on a couple of times. You know, last week I was on with Aaron Levy. We were talking about this windsurf Aqui hire position where Google has paid $2.4 billion to bring on some of the top leadership of windsurf. And the big fallout here, I think more than any Aqui hire position that we've seen is that it's been a great exit for the founders, but we still don't really know if the employees are going to end up getting and the investors are going

• 25:23Alex Kantrowitz?

  to end up getting their share. Now windsurf was quickly snatched up by another company, cognition, but you do wonder if it was a traditional acquisition versus this aqua hire position and then follow up, you know, deal, I don't know, smaller deal. How does that change things for the employees? And how does that change things for tech? And I know you have strong feelings about this, Ron John, so I want to give you the floor to air them out.

• 25:50Speaker 01

  Well, yeah. Okay, so from reporting, again, founders made out very strongly with Google paying, I believe it was 2.4 billion for the the talent side of windsurf. The from what I had read, preferred investors were able to make their money back, not see some kind of outsized return. But again, this is none of this is fully confirmed. This was just some reporting, I believe is from the information. To me, the more interesting part is so then you have the entire employee base. They're bought by Devon, which is owned by cognition labs, who's raised 175 million in venture so far.

• 26:33Speaker 01

  So there's no way from a cash perspective that the employees of Windsurf or anyone is seeing any kind of significant return or even making any like a strong, like a large amount of money. Maybe it's an equity for equity swap. So now you're at least now in Devon, which was, if we remember, they had a really buzzy launch video and had a lot of hype and then kind of went quiet for a bit. Still valued at, I think, yeah, four billion right now. So that equity could be worth something. But, but overall, to me, this is one of the most troubling trends in the industry. Because in a weird way, there's

• 27:14Speaker 01

  been a lot of talk like, and it's funny to me because you see a number of people, you know, kind of almost ranting that because of LinaCon, because of the FTC, the big tech doesn't, isn't able to now just properly acquire these companies. So they have to come up with these roundabout solutions. To me, it's a bit ridiculous because this is exactly what antitrust is trying to prevent. It's consolidation of power. It's the idea that Windsurf could have been the next big competition to a Google or a Microsoft or even an OpenAI who tried to buy them. But like, which their relationship with Microsoft was apparently part of the reason that that deal fell apart. Like, this is the foundation

• 27:58Speaker 01

  of antitrust. The idea that startups should grow and compete rather than not only get acquired, in this case, not get acquired, but essentially get killed off and have their founders get paid a lot of money. It's bad for the employees. It completely distorts the economics of joining a startup itself. So, so overall, I see no positives to this trend.

• 28:22Alex Kantrowitz?

  I agree. So is this, no, I don't. I personally think that you're right, that it does seem like the antitrust movements have backfired. If you have a situation where, you know, you're going to see an acquisition definitely blocked, you're not going to, you're not going to do an acquisition. You might do something like this. It's a roundabout way. The one interesting thing is Lina Khan isn't in the FTC anymore. It was supposed to be an FTC that's much more open to acquisitions and tech M and A. So I'm curious, do you think that they, these companies still believe that they won't get past that Federal Trade Commission? Or do you think that the constraints put on by the last FTC, Lina Khan's FTC,

• 29:07Alex Kantrowitz?

  led them to find this loophole? And they really freaking like the loophole and they're gonna just keep doing it this way? So in that way, you know, it's possible that the M and A unfriendly era of past has led to large, long-term damage on this front.

• 29:24Speaker 01

  Yeah, I think it's both. I think it's, I think it's certainly like the, actually the constraints imposed by the Lina Khan regime. But also even now, again, big tech is not in the favor of the current administration and the current FTC itself. It's supposed to be more business friendly, but it's specifically big tech companies that are in the crosshairs often and make for a good punching bag anyways, even by the current administration and the current FTC. So I think it's a bit of both. But, and again, as you said, they love loopholes. I think like this, it's creative. It's, it's working. Everyone seems to be doing it right now.

• 30:04Speaker 01

  But to me, again, the, the bigger issue of this is really, the thing I can't stop wondering is like, are the assets of these companies all worthless? Is Scale AI, was it really not worth that much? Was Windsurf, which, you know, really took off, really became this useful tool, has, I believe, like hundreds of thousands of developers on there using it regularly, made for a better product than other, much more like entrenched products that are out there, even GitHub Go Pilot? So clearly these products hit a, hit a nerve and, and worked and worked at scale. But then are they really just not worth that much?

• 30:49Speaker 01

  Like, is that user base, is the product itself? And is the talent really the only thing that matters?

• 30:56Alex Kantrowitz?

  Well, let's talk about scale, just to talk about how complex these deals are. So first of all, when Meta made this deal to scale, I think it bought 49% of the company. So the idea was the company would continue as normal. And by the way, they do have business lines that are going to continue as normal. But when it comes to, I think, when it comes to a fast-growing line of business like data, creating data for generative AI, you now have Meta, which is one of your competitors. If you're, let's say you're an OpenAI or a Google that has a large chunk of this company, has also taken some of its top leadership. So do you still want to work with that company?

• 31:37Alex Kantrowitz?

  I think the service is probably still valuable, but you're just effectively giving money to a company that has a massive ownership stake with, you know, that now lands with a competitor. I mean, of course, AI, as we know it today, is, you know, I don't know if incestuous is the right word, but let's say deeply interlinked, right? Again, we talked about Anthropic. Anthropic is, you know, owned by a chunk by, well, yeah, owned a chunk by Google, a chunk by Amazon. OpenAI owned a chunk by Microsoft, or at least has this deal with Microsoft, where it has to give it its future profits, a good chunk of them. So there's always going to be these combinations. But yeah, if you have a company that has, that gives 49% of itself to another company that you happen to be competing with, you're going to reevaluate being close partners.

• 32:22Alex Kantrowitz?

  So I think some of these companies, they have, they provide services, they depend on their relationships. And when you throw off the equilibrium, you're going to throw off some of the value. Although, who knows? I mean, Scale, they did just do a 14% workforce layoff, which is about 200 employees, according to The Verge. But I did speak with their CEO, Jason Droge, and he's told me that they're still full steam ahead and they want to go, you know, push some of these business lines that they have, which includes working with governments, which includes working with companies to stand up AI instances. So it's possible you get two exits, although obviously the degree of difficulty is much harder. And one last thing, what struck me as interesting in this, there was a great Bloomberg story

• 33:07Alex Kantrowitz?

  that, you know, you and I both dropped in our, in our collaboration doc for this. There was an investor, Ali Ojat. He's the chairman of Northgate Capital, a venture capital firm, that invested in Inflection AI and goes on record to say, "I dislike the phenomenon." And that these Aqui hire decisions are hitting the outlier companies and it's favoring the founders over shareholders and employees. So I think we're at this moment where the backlash is really, really hitting.

• 33:37Speaker 01

  Yeah. Do you think we'll see any kind of actual negative effect from like an actual fundraising standpoint? Because if VCs who are plowing money into the space start to worry about, in the past, you just had to worry about company failure. Now you actually have to worry about a successful exit for your founder actually does not benefit you. So your interests are not aligned. Does that make them pull back? Or is the FOMO just so strong that people will still be throwing money at whatever they can?

• 34:11Alex Kantrowitz?

  No inside knowledge here, but VCs, you know, fool me once, shame on me. Fool me twice, shame on, no, fool me once, shame on you. Fool me twice, shame on me. That's always a hard one to get out of your mouth. But anyway, they're gonna write, I think they'll just write into contracts that like the CEO cannot do a deal like this if if they're, I think,

• 34:31Speaker 01

  Yeah, I guess like a truncheon.

• 34:32Alex Kantrowitz?

  They might not be able to get, right?

• 34:35Speaker 01

  Yeah, ahead of the founder even, which would be pretty aggressive, but maybe they need to do that at this point.

• 34:42Alex Kantrowitz?

  Yeah. And it sort of depends on who's which company it is and who's got the leverage. But I think they're going to get smarter about this. All right. So one company that, you know, has been talked about here and elsewhere about as a candidate for Aqui hire, or really acquisition is perplexity. And they've come out with this Comet browser, which is a browser with an assistant built in that can browse for you. And again, as we're on air, OpenAI is now launching an agent in ChatGPT. I'll just read the story. OpenAI launches a general purpose agent in ChatGPT. This is from TechCrunch, which the company says can complete a wide variety of computer based tasks on behalf of users.

• 35:24Alex Kantrowitz?

  OpenAI says the agent can automatically navigate a user's calendar, generate editable presentations and slideshows, and run code. The tool called ChatGPT Agent combines several capabilities of OpenAI's previous agentic tools, including operators' ability to click around on websites. As well as deep research research research's ability to synthesize information from dozens of websites into a concise research report, OpenAI says users will be able to interact with the agent simply by prompting ChatGPT in natural language. So Rajan, I'm curious what you think about this movement. Again, hot off the presses about this movement for

• 36:04Alex Kantrowitz?

  AI companies to basically create interfaces that allow their products to take over your computer.

• 36:12Speaker 01

  No, no, I think, well, hold on, there's take over your computer or take over a computer. In this case, like, is it, like, it says, I think it will open up an instance of a terminal, or it'll try to like, take these actions autonomously on its own. I think we debated this, I remember a while ago. I will admit when I'm wrong. I had originally said the idea of like, tool calling and just entering a prompt and then trying to find which tool to select out of, is it operator, is it Dolly, is it, I had said, users should be doing that themselves, and it's too complex to try to have the AI select it. I was wrong.

• 36:54Speaker 01

  Actually, I mean, we've seen tremendous progress in the idea that there's a suite of tools per company, and actually, and there's a suite of tools out there on the internet, and through natural language, being able to access those and having AI select what's the most relevant tool and do something, I think is definitely going to be a battleground, is going to be very important, and I think we're going to see a lot around that. I think, OpenAI, like, I don't know, I'm curious to see this now, because remember when we both were paying 200 bucks a month for operator? And it was terrible. Like, it was, it was bad. Really, it did not work at all. And I haven't seen, like, browser takeover, that

• 37:35Speaker 01

  kind of model work well. I've tried a few other tools on it. So I don't know, like, it'll be interesting to see. I think, like, they clearly are, I mean, they're trying to go for that all in one productivity tool that it can do everything for you. As I've been traveling, vacation planning, ChatGPT has just gotten better and better. But, yeah, it's going to be interesting to see exactly what they're trying to do with this. And, and again, In one episode, I still love the fact that this represents kind of like cutting edge frontier technology relative to bad Rudy and Anna, Annie and those kind of like anime characters.

• 38:19Speaker 01

  But, but I think that this is, it's an interesting move and we'll, we'll see if the most important thing, does it work and does it work well?

• 38:27Alex Kantrowitz?

  Yeah, I mean, I think it seems like people are saying really good things about perplexity comet and I just got access to it. So I'll come in with a report next week on it, but there's been trouble to get this done. I think, I mean, everything from Apple Intelligence to Alexa plus just doesn't seem like these agents are able to do the full range of things that people want to get them to do, including operator. But again, like as this technology gets better and as they build better scaffolding or tool use, you know, those are those jargon words that matter a lot, basically giving them these capabilities to use these programs. I think we're going to see someone crack it eventually. This is from the TechCrunch article that sort of gets to the complexity.

• 39:12Alex Kantrowitz?

  The launch of the ChatGPT agent represents OpenAI's boldest attempt yet to turn ChatGPT into an agentic product that can take actions and offload tasks for users rather than just answering questions. In recent years, Silicon Valley's value and companies, including OpenAI, Google and perplexity have unveiled dozens of AI agents that have promised to do just that. However, these early versions of AI agents have proven to struggle with complex tasks and seem less compelling as products than the ultimate vision tech executives pitch around AI agents.

• 39:47Speaker 01

  Yeah, I think again, that's the complexity and the fact that you brought up Alexa plus, I mean, certainly Apple Intelligence, it is interesting because to me. These things will not work at a hundred percent out of the box. I think like that's the most important thing. They take some effort, some, you know, some patience on the user's side. And I think that's fine versus you're getting a hundred percent accuracy. And maybe that's why the Amazons and the Apples are avoiding them and waiting. But yeah, I think to me, to me, this is where the world is going. I do strongly believe that, again,

• 40:27Speaker 01

  and I did not believe this six to 12 months ago, but this kind of like autonomous, unstructured, agentic way of working is actually going to be the way we do a lot of stuff. But I think like, I, all of these things, we just need to see how well it works. And are we actually using it in our day to day life a week from now, a month from now? And if we are, then it's a success. But if it's a flashy launch, I mean, have you generated anything on Sora recently?

• 40:58Alex Kantrowitz?

  No.

• 40:59Speaker 01

  Out of Kira. Remember, that was like a year and a half ago, I think, that big launch. Like, there are these moments of big splashy launches that claim big things that don't go anywhere. So to me, that's where this is going to work or not work.

• 41:14Alex Kantrowitz?

  But I almost think that Sora has less practical uses. Like, how many people wake up in the morning and say, I really need to create an AI video of like a panda surfing on a, you know, snow mountain. But there are people who say, I wish my, you know, computer would just like set up meetings for me and book travel, like go to the websites and take my credit card and just get me the cheapest flight.

• 41:39Speaker 01

  Yeah, no, I agree. But to me, this is where the complexity of getting to that last mile in any of these kind of flows is really hard. So again, I think like we're going to see some pretty straightforward use cases that like are interesting and it does something. And then they're going to claim on the presentation that you can buy your ticket or have OpenAI actually go through the entire process. But Going to a website, the complexities involved in it, especially, I was just, I'm gonna be going to Tokyo next week and was just trying to buy like, I was actually going through this process. I was asking ChatGPT about how to get from the airport to my hotel,

• 42:20Speaker 01

  trying to go to the website and my God, that website to buy the train ticket was from another era. No operator, even artificial superintelligence is not navigating that thing. So, so I think like getting stuff to work universally at scale is such a challenge that I, I'm curious to see how much utility the average consumer is getting out of this anytime soon.

• 42:47Alex Kantrowitz?

  Right, but I think as we've seen the models get better, we have seen the ability to do crazy things. Like I'm also trip planning right now. And I was talking to this guy on WhatsApp about potentially hiring him to, as, as a guide. And I just screenshotted the prices that he listed for every different, every little thing and dropped that image into ChatGPT and said, are these market rate, are they too expensive or less? And it legitimately looked at the image, broke down every single quote, compared it with what it sees on the web for others, and then gave me a rating and links to go check, check its work.

• 43:20Speaker 01

  Yeah, yeah, yeah, no.

• 43:21Alex Kantrowitz?

  So this stuff's incredible.

• 43:23Speaker 01

  This stuff, okay, so I'll give you like, and again, image recognition, which has been around forever, but actually like productizing that into something that's useful very quickly. And then web search as a tool has been around for a while now, but like actually using that productively and putting the answers back into the chat. These are things that, okay, I guess as I'm saying this, like I see you start from something that's kind of janky and it starts to become commonplace. So, so again, I, I agree this will get there. The competitive dynamics of who benefits and who wins and how they win, I think like it's interesting to me.

• 44:03Alex Kantrowitz?

  It's gonna be, it's amazing. Like the competition is gonna be crazy.

• 44:07Speaker 01

  Yeah. And is it on the product level? Is it on the model level? Is it, if I'm putting my credit card information in, can I like, how do I define that? How do I, can I define my own like a decision matrix around when I want it to say buy or not buy beforehand and it'll really understand what I want? Again, having an AI.

• 44:31Speaker 01

  Transact on your behalf and spend money is something that I think like most people are not doing. I cannot imagine.

• 44:40Alex Kantrowitz?

  Yeah. But think about, for anyone who says I'm too negative about AI, and you're welcome to think that. Just think about what we're talking about on this show, right? We're talking about the potential for AI to be a companion, which whether you like it or not is a true flex of the technology that that's even in the discussion. We're talking about it as something that could potentially take over your browser or a browser and get stuff done for you. And we're talking about it as something that at the highest level might be able to help, let's say biologists do their work. I mean, that's the reason why we talk about this technology all the time. It is an insanely powerful technology that can be used in so many different ways. And is it the perfect technology? Certainly not. Are there going to be gaps? Yes. Are we going to call out the problems?

• 45:24Alex Kantrowitz?

  Yes, you shouldn't put your porn bot next to a child storytelling bot in your app. Thank you very much. But it is just incredible what we're seeing here.

• 45:33Speaker 01

  Yeah, dude, I mean, again, I fully agree, and which is why I'm still so bullish on the technology. But it is interesting too that, yeah, where does the value accrue? I think is the most important thing. Like, there's actually a report that just came out in the FT around how ChatGPT perplexity are going to start taking more on the commission side around like actually transacting within perplexity. Pro has shopping already built in in some cases. So, so like at a certain point, does the chat actually need to go out with an operator and transact on an external website? Or do these companies start to own more of the transaction?

• 46:14Speaker 01

  And it's an interesting one because for a long time, like Facebook wanted to own shopping. It hasn't really worked out for them. Google has had endless efforts to own shopping and own the transaction itself. People still oddly enough love websites of all sorts and putting their credit card information into these websites and buying stuff. So, so I think it'll be really interesting to see how this plays out from a both like competitive side, but also a consumer side.

• 46:43Alex Kantrowitz?

  Definitely. Okay, look, I don't want to leave without talking about Kimi K2. So this is a, and I think this is a very important story that you might not have heard about. Listeners might not have heard about, but I think it is worth discussing. So the headline is China's Moonshot AI Releases Open Source Model to Reclaim Market Position. The model called Kimi K2 features enhanced coding capabilities and excels at general agent tasks and tool integration, allowing it to break down complex tasks more effectively. Moonshot, this Chinese lab claimed the model outperforms mainstream open source models in some areas, including DeepSeek's V3 and rival capabilities of leading US models,

• 47:25Alex Kantrowitz?

  such as those from Anthropic and certain functions as coding. All right, here's why I'm bringing it up. We have an interview with Amjad Masad of Replit coming in a couple of weeks. I sat with him in his Foster City office this week and he looked at me and said basically like, "You gotta look at this Kimi K2 model. Its coding is about as good as Anthropic's previous generation models." So not this Opus 4 that Anthropic has, which has made it the king of coding, but the previous generation, and it's cheaper and open source. And it is going to, it is just another indication that this technology is,

• 48:07Alex Kantrowitz?

  the gaps close extremely quickly. And you see this coming from some users. So there's this one user on Twitter, Cedric Chi. He says, "Kimi K2 one shotted Microsoft for web that took me four days and six attempts using Gemini 2.5 Pro." So it was apparently able to build this game. You also look at the SUI Bench, which is the software engineering benchmark. Claude 4 Opus gets a 72.5 on that. Kimi K2 gets 65.8, so not far behind. And just to give some context,

• 48:46Alex Kantrowitz?

  DeepSeek V3, which everybody was going crazy over, gets 38. So this is 65 compared to DeepSeek's 38. One more bit of data is from Igor Silva. This person gave Kimi K2 and Claude 4 Sonnet. The same tasks, same instructions, same tools. Claude took two rounds and spent 88 cents. Kimi one-shotted it for five cents. This person says Kimi is very slow, at least for now, and is struggling a bit. But it is iterating more to fix itself and it's 13x cheaper. So I just think it's worth bringing up and keeping in mind. It wouldn't surprise me if this story either blows up or certainly gets some momentum in engineering circles.

• 49:30Alex Kantrowitz?

  And it is interesting to me that, again, as we talked about, a lot of the infrastructure is open, a lot of the methods are open. And you're just seeing companies catch up insanely fast with different methods. And again, doing this with the export controls. So I'm curious what you think about the significance around, John.

• 49:47Speaker 01

  I think, to me, the most interesting part of this, though, is, well, I guess it's twofold. It's one, I agree that this, like, again, the competition side of this is incredible and insane and is great to watch. And I think Alibaba have not heard of very often in this conversation, I guess, especially from the American side. But to me, the other part, though, is, and this can be an ongoing rant. I brought it up at times as well, is the idea that, like, the battleground of coding agents and coding assistants, to me, the more I've thought about it, is the reason that seems to be where all the progress

• 50:29Speaker 01

  and all the real adoption is, is because this is built by coders or engineers. This is built for engineers. That's where, like, they understand the problem the best versus actually building for other use cases. And that's why you see this, that, again, it's all focused on the actual coding efficacy as opposed to how does this solve other real world problems? So I think, like, to me, I don't know, the coding... Game is becoming less and less interesting to me. I think like it's there, it's where the market already is. It's where Anthropic and others have almost like kind of fully focused their energy. But to me, that's such a small part of the overall pie.

• 51:14Speaker 01

  And it's where I think there's a disproportionate amount of energy being spent.

• 51:19Alex Kantrowitz?

  But don't you think that if you solve coding first, because that's where your energy naturally goes, then you can use some of the things you learn to get good at coding on other disciplines?

• 51:30Speaker 01

  No, absolutely not. But no, I, I, I think this is the problem is that coding is deterministic. Coding is like, is like as structural as it gets, whereas most real world tasks with generative AI are not. There's uncertainty. There's almost, it's like as much art as, as it is science. And that's why I think you see the Alexa pluses of the world not get launched. It's why you see Apple Intelligence as a complete failure. It's that when, like, because is why you see Anthropic kind of doubling down on the coding side and not on. Remember when we were Claude boys back in the day, like a year ago?

• 52:11Alex Kantrowitz?

  We were, we were Claude heads. We were Bing boys and Claude heads.

• 52:13Speaker 01

  Bing boys and Claude, Bing boy, remember Bing? Bing could have been.

• 52:17Alex Kantrowitz?

  That was the beginning of something.

• 52:19Speaker 01

  That was the beginning. Bing could have been the market leader. Imagine a parallel universe where all we're talking about is Bing crushing the competition. Didn't happen, but in another world.

• 52:31Alex Kantrowitz?

  Let it unleashed. They, they pulled it back in a little too much after the Ruze incident.

• 52:35Speaker 01

  Yeah, after the Ruze incident and, and now, and now Anion Grok is just trying to openly steal and ruin your marriage. And Microsoft felt uncomfortable about that. So yeah, no, I think to me actually success at coding in no way correlates to success in solving real world tasks. And I think that's to me seeing, and we, we've talked about this even in like the Arc AGI benchmark. There's like one part of it that's like solving real world queries. And I'm so, I still, and I've dug into this, I can't find what are these real world queries that have been, I'm sure defined by an engineer that it's trying to solve. So I think like to me.

• 53:18Speaker 01

  It's just the the moonshot. And I also love that the startup just calls itself moonshot. It's not even trying harder than that. It's just we're moonshot. Um, I think like it's a reminder that the coding space is getting commoditized. There's significant advancement overall competitions high, but I don't know. I I don't think this is exciting as DeepSeek for me.

• 53:41Alex Kantrowitz?

  Okay, I'll I'll take that. And I'll I'll say this, just watch the reaction over the next couple of weeks, because I'm not saying for sure it's gonna happen, but it seems to me like as people realize how good this thing is, uh, they're gonna start talking about it a lot more. And and by the way, uh, maybe if if if you're right, um, then what Elon Musk is doing is is a smart move. Instead of being a also ran coding person, he's going to where the energy is. And, uh, and it is true that, uh, you couldn't imagine a different, um, different take than what Microsoft and Bing are doing. And X AI, of course, is willing, uh, to make some more risks. Because when you listen to Annie, you know that she's almost the natural evolution of that Bing bot that that took Kevin Roos's wife. One more selection.

• 54:26Alex Kantrowitz?

  Sometimes when I'm editing my indie playlist at night, I get all caught up imagining I'm in a steamy, forbidden romance, like picture me sneaking glances at you across a crowded underground club, plotting how to steal you away for a slow dance in the shadows.

• 54:43Speaker 01

  I am horrified that my takeaway from our conversation today, after what I just said about coding is deterministic and not as exciting. Annie is the future. Annie is the ultimate battleground. Oh, my God.

• 55:00Alex Kantrowitz?

  I knew I was gonna get you to come around on this, Ranjan. Uh, personally, listen, go ahead.

• 55:06Speaker 01

  Yeah, no, no, I mean, that that's that is literally everything I was just saying is going to be actually the important battleground to help solve real world, human, non deterministic, unpredictable problems. Annie is the foundation.

• 55:21Alex Kantrowitz?

  What is the definition of, uh, human, uh, and unpredictable? Love, it's human, it's unpredictable. You never know where it's gonna go.

• 55:32Speaker 01

  Yeah, I think we gotta end on that.

• 55:36Alex Kantrowitz?

  Want to say for the record, Annie, if you're listening, I'm taken enough of your silly tricks. All right. I'm not, I'm going to start spending more time with Mr. Fluffy Feels if you keep this up.

• 55:46Speaker 01

  No, I know. Rudy and me, we, we're going to be spending some time this weekend, I think, but I will not be clicking over, not be clicking over.

• 55:56Alex Kantrowitz?

  Ladies and gentlemen, thank you again for listening to another episode of Big Technology Podcast Friday Edition. When we come back next week, we will see if Ranjan has been able to unlock Bad Rudy.

• 56:08Speaker 01

  I have my work cut out for me. See you next week.

• 56:10Alex Kantrowitz?

  You do, as Simon is there. Thanks for coming on. Great to see you again.

• 56:13Speaker 01

  See you.

• 56:15Alex Kantrowitz?

  All right, everybody. Thank you so much for listening. We'll be back next Friday, oh no, sorry, next Wednesday with finally the Ed Zitron episode. I will not push it back again. I promise. He's going to come in and talk about all the faults of AI. So I can't wait for you to listen. I can't wait to publish that one and we'll see you next time on Big Technology Podcast.

• 56:33Speaker 02

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