Pod Insights Big Technology Podcast Bluesky Takes Off, Big Tech Earnings Blowout, Do We Want Human Writers About this episode Ranjan Roy of Margins is back for our weekly discussion of the week's tech news. We cover: 1) The rise of Bluesky 2) What we want from a social network 3) Big Tech's strong earnings 4) What Big Tech's performance says about the broader economy 5) UK blocks Microsoft Activision 6) Clubhouse layoffs 7) End of the pandemic economy 8) Do we want humans to disclose when AI writes for them?
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1:09 Alex Kantrowitz? Welcome to Big Technology Podcast Friday Edition, where we recap the news in our typical cool-headed nuanced manner. We have so much to talk about this week. There's a new social app on the block. It's called Blue Sky. We'll talk to you about Blue Sky. We'll also go through big tech earnings this week. We had Amazon, Facebook, Google, and Microsoft report, also Snapchat. Not big tech anymore, we'll touch on that. And then finally, we have the UK regulator blocking the Microsoft Activision deal. What does that mean for the future of tech mergers? Not just here, well, not just in the UK, but all over the globe and the policy that we have in New York. A lot to touch on, so stay tuned.
1:53 Alex Kantrowitz? It's going to be very quick, very fun moving. I feel like this week is going to get spicy. Joining us as always is Ron John Roy. Ron, John, welcome.
2:02 Speaker 01 Happy Friday.
2:03 Alex Kantrowitz? Happy Friday. Welcome to Blue Sky. I think you just joined within the hour. What's your immediate impression of what is Blue Sky from your perspective and what's your immediate impression of Blue Sky?
2:13 Speaker 01 All right. So first of all, I got the handle at Ranjan, which is the single most important thing and which I never could get on Twitter.
2:24 Alex Kantrowitz? You couldn't even get your full name on Twitter. You have an X in there in between, right?
2:28 Speaker 01 Yeah, no, exactly. I had to. I couldn't even get Ranjan Roy. So, so I have to stay on Blue Sky, I guess. But, but for a bit of background, Blue Sky is Jack Dorsey's comeback tour where he has launched a social app. And from what I understand, the biggest distinction from Twitter is that the data is stored on individualized servers right now. If you get an invite and if you log on, you'll likely default to the main server, but you'll have a lot more control over how your data lives where it's stored. And that's, that's definitely the bigger vision. It looks just like Twitter. It acts just like Twitter and it feels just like Twitter. So, so in terms of what, whether
3:12 Speaker 01 it can now become the new Twitter, I mean, it remains to be seen. I'll admit I had my Mastodon handle in my Twitter profile for a little bit. It was a lot more complicated and a lot different, a lot more different than the standard Twitter experience. So, so I don't know. How have you been enjoying Blue Sky so far?
3:31 Alex Kantrowitz? I think it's terrific. And, okay, so I'll explain a little bit also. So first of all, Jack Dorsey did give them money, but he's not involved in the day to day operation as far as I can tell. Also, what's interesting about this system is it is distributed. So there can be a number of different clients built on top of it. So you could effectively see someone, anyone, build like a maps app on top of Blue Sky and you could like, you know, go region by region and see the different skeets, which is their word for tweets that are coming from that region. You could also have different apps built with different moderation policies eventually. But they started in a very smart way. They started centralized. So this whole idea of a federated
4:12 Alex Kantrowitz? network, it doesn't exist yet. All that exists right now is effectively them demoing the technology and the protocol in this one app. And I think that's what's actually helped it take off the way that it has because it is not difficult to sign up like Mastodon is. It is akin to Twitter. It is letting users in at a fairly high pace. And when you do all of that, you start to build energy and people start to move over. And we've seen this flood of people coming in from Twitter going to Blue Sky and a Blue Sky invite has become like the hottest ticket on the entire internet. I can't go five minutes without my phone buzzing for someone asking for an invite. By the way, do
4:55 Alex Kantrowitz? not have any. They're being very methodical in the way they distribute. But the cool thing is, is that there's been this initial surge of energy and so many people have gone on and used it that used to be power users of or are power users of Twitter, but don't really care very much about what they're posting because they don't have any followers. And it has this like really irreverent fun and wild energy that is, it's pretty amazing to watch. And you know, I think we should talk about this idea of like what the next Twitter might be, whether something can be the next Twitter, whether we want something to be the next Twitter. I'm curious like what you think, seriously, like what do you think the next social network should be?
5:35 Speaker 01 I go back and forth because I tried to spend time on Mastodon and I did for a couple of weeks and then I went back to Twitter. I, that question of does there have to be a next Twitter? I think this is where Elon Musk and his relationship at the world and what they see him for and how he's changing the platform has definitely made it feel like there needs to be. But by the same token, you know, you go on Twitter, there's still incredible amounts of information, entertainment, and everything else that's always provided. So, so I think like the, there's, there's two parts of it. There's the Elon Musk factor and whether just essentially aligning with him, what he's doing to the platform, especially from a business model standpoint.
6:21 Speaker 01 Is crazy and how that plays out at any point, you don't know what's going to happen. But then there is the bigger vision. And yeah, as you said, the decentralized aspect of it, which also amazingly, the fact that the word blockchain and crypto have not made it into that, into the kind of the way it's being spoken about is a good thing and amazing. But yeah, I think that idea of can this be a platform that starts to give you more control over your own data and the way you interact with the internet? And how you can build on things clearly. I mean, Twitter was kind of the poster child for, you know, in the early 2010s, the developer community around it, that things built on top of it were amazing.
7:04 Speaker 01 Even Facebook for a while, that was a big part of it. And then all these platforms, when they're centralized at their core, start cutting things off and then that that energy goes away and everything gets kind of condensed into the platform. So, so again, I've been on the platform for about 45 minutes and I think I posted one skeet. And yeah, we'll see. I'll admit, there's also the part of me that just, you know, the next Twitter has been coming for a long time and Twitter is still Twitter.
7:37 Alex Kantrowitz? And I think it is worth pausing on what the next Twitter should be. So obviously there's like, part of it comes from like the data practices, part of it comes from the advertising, but also part of it is just simple network dynamics, right? And Twitter did have this Goldilocks moment where at one point it got big enough that it was vibrant and fun and interesting. And even I would say somewhat magical at times. And then it grew to the point where it became, I think it just hit a size where if you hit this size and if you're a live feed, and maybe that's 100 million users a day, I don't know, maybe 150.
8:14 Alex Kantrowitz? But certainly not 75, but eventually you hit this point where people inevitably resort to flame wars because the stakes of winning arguments and performing your side become so high that you don't really find another path other than doing that type of stuff. And that I think is part of what's happened with Twitter turning so toxic. And I think that it would be great if the next Twitter is not maybe one Twitter, maybe it's a few Twitters, but they are big enough that they're vibrant and filled with information and useful, but also small enough that you don't see this sort of toxicity that we've seen on Twitter main.
8:50 Speaker 01 I disagree. I disagree. Twitter lost its magic for the same reason, and the toxicity, it comes from the algorithmic curation. When it's a follow-based timeline, when it's, you know, who you follow, that's really what the only tweets you see, it's not what's going viral, then it's just a much cleaner experience. I mean, I've written about this a lot and I really believe it, that the moment the entire default becomes algorithmic, then being toxic rewards you. Being outlandish rewards you. Going in and like screaming at people will push you up into other people's timelines and gain you followers. So the
9:31 Speaker 01 game becomes being as ridiculous as possible. And one thing I did note that was interesting from a UI standpoint was now on Twitter, the for you tab, the algorithmic tab is the first one, it's the default. And then your following is second. At least Blue Sky is starting with the following is your first tab and the for you slash algorithmic tab as the second. So maybe they will really try to push it more in terms of the follow-based non-algorithmic curation, but I don't know, I feel that's still to me the danger of all of this. And their for you tab, it was in Blue Sky, was definitely a bit Twitter-y in my feed, or it was people all complaining about Twitter for me, so.
10:15 Alex Kantrowitz? Well, that is how every new network starts, by people only talking about how it's differentiated and comparing it to the last thing. That's it. But I'm going to give you the counterpoint here. All right. So what everybody would say back to you on this one, everyone that works on these products is, if you have just the following feed, you're going to miss a lot of the important. Uh, tweets or, or skeets or posts, whatever you want to call them, you'll miss them. You miss them and the algorithm helps people end up seeing the stuff they want to see. Now that's argument one. Argument two is without an algorithm, you end up living uh, in a following tab where people see that the incentive is just to keep posting and posting and posting and posting and posting and posting. And eventually it just rewards spam. So what is the counter?
11:00 Speaker 01 Yeah, but it, but exactly, but it doesn't. It, if you keep posting and posting, people will unfollow you. I think the problem with the follower based model is scale. It's that not everyone's going to put in the time. It's why, I mean, in the, I remember before Twitter switched to algorithmic. That's why most of my normal friends did not use it because they would sign up. What didn't want, not want to invest the time into actually, uh, into actually figuring out who to follow, how to follow, where to find the good, best information. And so they, that they didn't use it and that's why Twitter did not explode like a Facebook, where there's a built in network from your friends and family.
11:41 Speaker 01 Um, so I think, but in a way that's why Twitter rewarded people who spent the time and put in the work. Um, and that's why I think to me, my, my dream social network is definitely one that's more, it requires a little effort and a little work and a little thought. It's not going to just spoon feed you because the moment it spoons feeds you, uh, that's where we end up with the toxicity.
12:02 Alex Kantrowitz? Oh, and I think that your, your sort of roundabout way of coming to my point, which is that if you have to put that work in, a network can't grow, not to the same extent that if you use the algorithms. You have a very different type of trajectory.
12:15 Speaker 01 Twitter did grow.
12:16 Alex Kantrowitz? But very slowly and the big narrative around it for, for years was that, you know, you'd look at Twitter and it was just stagnating with growth, stuck in a two to 300 monthly active user range. Uh, two, two to 300 million monthly active user range and not going anywhere. Where everybody else, I mean, look at Tik Tok, with the algorithm, you go bananas. And I think that's what's behind Elon's attempt to use this, use this algorithm is to say, hey, we really need some real growth trying to get to that billion users. Otherwise this, this purchase is going to look dumb. I mean.
12:46 Speaker 01 Yeah, that, that's what, no, but that's my point. Maybe there's like a optimal ceiling on a social network. And two to 300 million monthly active users is a pretty robust network, you know? I think, imagine a world where Facebook didn't exist. And the idea of you have to get to a billion didn't exist. And which is kind of where Reddit for a long time got to live. Like Reddit's kind of this beautiful case where, you know, for those who don't know, it was sold, I think in 2006 or '07 by the founders to Advanced Publications. And then it just kind of lived to the side without any real revenue pressure. Is this kind of like digital stepchild in a larger traditional publisher?
13:29 Speaker 01 And that's why it never exploded in growth, but why it continued to grow to hundreds of millions of people using it, but still staying very, very high quality.
13:40 Alex Kantrowitz? Okay, I think that that's a good, that's a good example to leave on. And this is a discussion that we're going to keep coming back to. Should we touch on the big tech earnings that we had this week?
13:52 Speaker 01 Yeah, this one, big tech has taken over the world again. Uh, when you look.
13:57 Alex Kantrowitz? That was your takeaway?
13:58 Speaker 01 Yeah. Well, from a stock market perspective, you know, this market, this week, markets were selling off and then Facebook was up, what, 15% yesterday on a, you know, a company of that size is crazy. You know, the company had $28.6 billion in revenue daily active, over 2 billion people use it every day. It's the first quarter that their year-on-year revenue actually grew after three consecutive quarters of declining. So, so it's definitely Meta is back. Google, Google's results were pretty funny because, you know, revenue was up, it's still slowing, earnings beat a little bit.
14:39 Speaker 01 But for them, the stock exploded because, uh, didn't explode, it went up because they authorized a $70 billion share buyback. That to me with Google was a bit ridiculous in the sense of like at this moment where big tech is competing with each other on their traditional moats more aggressively than ever, especially for a Google with Microsoft coming after search in a way they haven't had to deal with, to be using your cash for share buybacks right now rather than going all in and investing in the future, I think, I think was a bit questionable.
15:16 Alex Kantrowitz? Yeah, and so it's interesting because you do have, you did see these really nice numbers from big tech and like the subtitle I have for this section is this is fine. Fire emojis around it because at times it does seem like big tech is this island sitting amid the chaos and of course these companies had a very tumultuous 2022 but have largely come out of that and are racing toward new highs again. They're not there yet, but they might get there, which is unbelievable to think about, given like where they were last year. You think about the comeback that Meta has had, for instance, just unbelievable. We talked about it with Josh Brown on Wednesday, but just like, wow, such a yo-yo situation in terms of what they're doing on the market. But I'm, I'm reading these numbers and I'm trying to figure out, well, is the market in a good place or is it, is the market slash
16:01 Alex Kantrowitz? is the economy really in a good place or, or is it not? Because, okay, so I see Meta crushing its earnings, right? We talk about the fact that it made a lot more than expected. It has 3 billion users now. It returned to revenue growth. Then you look at the, so you're like, oh, okay, we're, we're rip roaring back. But then you look at Google, right? And Google grew 1.87% in search in Q1 after 24% growth last year. And then you look at Microsoft's slowest cloud growth ever. Okay, it was 27%, but is that a sign of worry? And then you have Amazon go on its earnings call afterwards and say, our troubles in
16:43 Alex Kantrowitz? cloud are not over. And in fact, they're going to extend beyond where we are now. So I know I've just thrown a lot of data at you, but I put it all together and I say, well, does, are we, I still can't quite put a finger on whether our economy is heading in the right direction or not.
17:01 Speaker 01 Yeah, I don't think big tech is or has been reflective of the economy at large in a long, for a long time, if ever. I think they...
17:13 Speaker 01 Like, Amazon's results are very interesting because they beat on revenue and earnings and the stock aftermarket shot up 9% and then on the earnings call, once they started outlining troubles in the cloud business. And by troubles, it's still a $21 billion business. It's just growth is slowing. As you pointed out, Microsoft, 27% growth, but that's the slowest ever. That these are still just kind of like juggernauts of business, but they're just not going to be able to in perpetuity grow 20, 30%. I think like, everyone's kind of coming to the realization around that. Then I think that's why, you know, but, but still investors, a lot of the momentum around their stocks are where else are you going to go right now? They're really starting to
17:58 Speaker 01 concentrate power again, especially around the whole AI hype cycle. They're so well positioned from a compute standpoint, from a technology standpoint, from a product standpoint, that I think, and for the economy at large, I think that worries me again, is that suddenly you have five economy, five companies that are going to become the majority of the stock market. After there was a brief period, we thought the world might get diversified a little bit.
18:26 Alex Kantrowitz? Let me, again, make the counterpoint here, which is that you might be able to read something about the bigger economy when you look at big tech companies. I'll tell you why I think that might be the case. You look at search, right? Search is sort of foundational digital advertising spend. If you can, you know, if you're healthy at all, you're probably making some search spend. And cloud is the infrastructure side of many of the burgeoning companies in our economy. So, when search growth slows, when cloud, when cloud growth slows, you're going to end up seeing much less of a downstream growth inside the rest of the economy potentially. And so maybe you can read a little bit into what's happening on the outside from the inside of big tech.
19:08 Speaker 01 Yeah, but but also it was natural that cloud growth would slow when you know you go from an economy where the vast majority of businesses, you know, are not on the cloud. And then they all start moving into the cloud. And then at a certain point, more people or most people already have their infrastructure in the cloud. So I think it was inevitable that the growth of those businesses would slow. I do agree. I think advertising is always kind of the best bellwether for the economy at large. And obviously, Google slowing on the search side, YouTube ad revenue down. I think like, yeah, there's certainly, everything is not perfect. That's why you had the fire emojis around this is fine in the caption.
19:53 Speaker 01 I think that that's probably the best way to look at it. And it's true that like, we're at this moment right now, everything like the numbers, even you know, GDP came in, we're still growing. It's a little slower, but it's actually, we're not in a recession. Inflation is starting to trend down. It feels like at the headline, you know, the Fed might have just done their soft landing. But then there's still yet, there's still plenty of warning signs all over the place that we're not out of it yet.
20:23 Alex Kantrowitz? Let's do a lightning round, just quickly going through some of the interesting, a couple of interesting tidbits that we saw this week. First of all, Google Cloud is profitable for the first time. But the company, and I'm not saying this is entirely responsible for it. The company did some creative accounting measures to move costs away from Google Cloud. So there's a part of their filing, you see changes in segment cost allocation. And they say, more, more of certain previously allocated costs are allocated to our consumer facing Google services products, and less to Google Cloud enterprise products. I mean, I know you have to show profitability. This is the time. What do you think about the fact that there's been
21:05 Speaker 01 I mean, that wasn't, that wasn't the only thing they now deep mind is no longer reported in their other bets, kind of like the moonshot category and now is part of their corporate costs. At first I read that and I'm like, what? That's ridiculous. Then maybe they're trying to spin the idea that now AI is so integrate and deep learning is so integrated across all business functions. So now it's kind of like a core cost of the overall business and I'm literally trying to stretch my own mind to how they got there. Um, yeah, I think, yeah, I think Google definitely, Google is a company that, and I think we talked about this last week.
21:47 Speaker 01 You know, what's been the great innovation, the great kind of like really standout thing that they've done in the last 10 years? Again, Chrome, Maps, YouTube, all these things are
21:58 Alex Kantrowitz? We did have a comment.
21:59 Speaker 01 Well, over a decade. Yeah.
22:01 Alex Kantrowitz? We did the, the answer that someone gave was Alpha Fold, which maybe you could say decoding proteins is, is actually a real breakthrough.
22:10 Speaker 01 All right, that, that's, that is a very good one. No revenue yet, but, but definitely.
22:17 Alex Kantrowitz? Yeah.
22:17 Speaker 01 Yeah. Yeah. All right. I'll, I'll give it that one. So maybe there are other bets. They still are quietly being the big innovator that we hope they are. But yeah, I don't know. The, the biggest thing for Google, as we talked about last week, search is being threatened more than it ever has been with Microsoft. So I think as a company, I mean, it's clear that the, what do they call it? A red alert moment or something?
22:44 Alex Kantrowitz? Code red.
22:45 Speaker 01 Code red, code red. Yeah. I think they are in their code red moment.
22:50 Alex Kantrowitz? Okay, let's talk about Meta. Obviously year of efficiency, but not that efficient. I mean, they still lost 3.99.
22:57 Alex Kantrowitz? Billion in the quarter on Meta's Reality Labs unit. And on the call, Mark Zuckerberg took this moment and he's like, I need a moment to tell you all that I'm still doing the Metaverse. There's a narrative that I'm not all in on the Metaverse. I just need to let you know I am. No.
23:13 Speaker 01 I.
23:14 Alex Kantrowitz? You.
23:14 Speaker 01 Okay, here's my.
23:15 Alex Kantrowitz? You might have been part of that narrative on the other side. So what's your perspective?
23:19 Speaker 01 No, no, no. Here's my theory. Here's my Zuckerbergian, like, art of war theory right now. So one thing, and I've been trying to understand is, like, the generative AI research spending, I believe, falls under Reality Labs. From what I've read, from like digging in, because it was, for a long time, it was not considered this core thing. It was another part of the overall, Reality Labs was all about experimentation and the future. We don't know exactly how much of that big loss is going towards the generative AI stuff. And in our mind, everyone's still thinking it's all Metaverse.
23:59 Speaker 01 Imagine if Mark Zuckerberg and them really internally are going all in on generative AI. And maybe the Metaverse is quietly disappeared, but they still are saying it publicly to throw off competitors. That's my secret theory, that they have gone all hands in and they're actually moving away. Because I just can't imagine that they're still really investing in the Metaverse vision that they outlined anymore. They can't. And he's a competitor. He's a ruthless competitor at heart.
24:33 Alex Kantrowitz? Well, we'll see. If that proves to be true, we'll see what the SEC has to say about it. I feel like there's a bit of a securities violation waiting to happen if you go on your earnings and you throw everybody off the scent by calling. But hey, look. And this era of Un creatively. Right. And look, in this era of of regulation, you could basically get away with with anything, except perhaps if you are Microsoft trying to buy Activision. We will touch on the UK's blocking of that deal in the second half here on Big Technology Podcast. Stay with us. Ron Janroy is here with us from margins, talking about big tech, talking about mergers or would be mergers and the blocking of such. We'll be back right after this.
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27:17 Alex Kantrowitz? And we're back here on Big Technology Podcast, second half with Ron John Roy of Margins. You can get his newsletter, Margins, at readmargins.com. Ron John, let's talk a little bit about the fact that the UK has blocked the Microsoft Activision acquisition. So this is a big acquisition, many millions of dollars Microsoft was going to spend to buy this gaming company. And the UK says, no, you don't. So is this the end of the story here? Or is it just really the beginning?
27:45 Speaker 01 Well, okay, but let's go back to the actual beginning of the story in 2021. So this acquisition to me was always troubling. And I had actually like argued with friends. I thought it would get blocked somewhere because to me it was outlandish, but I definitely got pushed back on that. End of 2021, Activision is mired in scandal with their CEO. And, you know, this was again, remember the last half of 2021, when the world was just out of control. Great, you know, they offered $68.7 billion to buy Activision. And the price, I mean, the price was very aggressive. It wasn't insane, but it was definitely aggressive.
28:29 Speaker 01 Now, you know, fast forward a year and a half, the UK regulator has blocked it. And this is why I think this is one of the biggest deals in antitrust. One of the biggest things has just happened. It was funny, there's Mike Isaac of the New York Times. I saw this tweet, he's like, I have no opinion on whether this deal should have been blocked or not, but using a potential monopoly in cloud gaming as a stumbling block is funny. Who the fuck is cloud gaming? Basically, like, what is cloud gaming? Why is that, why are we talking about this? This is the first time that I've seen a regulator going after a potential market where they see the world going. This has been one of the things that's happened in antitrust.
29:11 Speaker 01 It at every juncture, the reason regulators have fallen behind is we typically regulate, what is the market size currently? How much of the market do you own today? They are going after where the market is going. And I think we can all agree that cloud gaming is the future. I would hope, or at least to me, that seems so obvious. So this is the first time I've seen a regulator really going after a potential market as opposed to existing, an existing one. And I think that completely changes the way we think about antitrust.
29:45 Alex Kantrowitz? Yeah, what, how does it change the way we think about antitrust?
29:48 Speaker 01 No, instead of market side, instead of what percentage of the, cause like if you look at the overall console market, mobile gaming market as a whole, like a mobile app down that you download that you own versus cloud gaming is such a tiny percentage of that right now. Microsoft's gaming and Activision together would still be a big part of larger console gaming and overall gaming, but not such a large percentage that, you know, like antitrust regulators would necessarily block it. But again, the argument is this merger going together, going through will completely dominate and transform the way cloud-based gaming moves. And I think that's
30:29 Speaker 01 the right insight and the right prediction. And the fact that they are recognizing that right now, I think is, is really important.
30:37 Alex Kantrowitz? Yeah. And just to add some data around that. So this is from Polygon. Microsoft accounts for an estimated 60 to 70% of global cloud gaming services already. This is the argument that the CMA is making out of the UK, thanks to advantages of owning Xbox, Windows and the Azure platform. So yeah, you put Activision in there and you're like, okay, all of a sudden you corner the market. So it's a very interesting rationale to block. Do you, do you think that this is the right move to make to block this acquisition?
31:08 Speaker 01 No, no, a hundred percent. That's why it's now we're looking at for antitrust. We have to think about where the markets are going as opposed to where they are today. And think about like, what would that future of cloud gaming with this joint deal done look like? I mean, you, you own the market. We move towards a world where X, the Xbox Game Pass basically becomes the entry point to cloud gaming. They have all the titles, they have said.
31:37 Speaker 01 That it won't be exclusive, at least the big titles coming from Activision. They can say that now, a few years from now, we don't know. But even then, at a certain point, when they own every single game that everyone plays, in terms of even hiking rates on consumers, they can do anything. That market power just completely changes the way the entire market will will develop, not is today. And honestly, one of the things that I found funny is like, there was an op ed in the New York Times, which was just from Jay Clayton, the former SEC Commissioner, writing with Gary Cohn, the Goldman Sachs slash Trump Economic Council Chair. Like, you know, and then there was the Brad Smith of Microsoft when on BBC.
32:21 Speaker 01 Everyone is literally saying this kills innovation. Nowhere did anyone outline a vision of what innovation is created by this merger? Like, how this is going to be good for consumers? How is this going to develop the market in a way that's going to benefit the overall ecosystem? Nowhere did I see that. And I can't even think of how it would. So, so I think this is definitely a net good.
32:46 Alex Kantrowitz? But they do make an interesting point. I'm curious what you think about it. Just talking about how the United States is going to effectively cede its anti-competitive policymaking to Europe. And it seems like that's what's happened with big tech legislation. It seems like Europe is the stronger parliament on that front. Congress is getting nothing done. And here we have them stepping in on trade as well. It's a pretty interesting argument that they make, and I'm curious what you think about it.
33:13 Speaker 01 Yeah, I think it's definitely, it was a well-structured argument in terms of trying to like, know exactly how they want to position something or what to trigger. But, I mean, the FTC was already investigating the merger. The FTC, we clearly has become much more aggressive on antitrust. The UK acted first, but I think the idea that they were outsourcing trade policy to Europe and stuff, I think is a bit ridiculous. They mention around environmental regulation, and that's another area that we're following Europe.
33:49 Speaker 01 I don't think that's the worst thing. I think Europe is actually ahead in in areas of environmental regulation on business. So so I I think that was definitely really trying to trigger people with the whole like America first, don't outsource trade policy, where in reality, I think the this completely fits into the way the FTC currently has been moving anyways.
34:13 Alex Kantrowitz? Maybe you can help enlighten me on this one because it is something that I'm kind of foggy on. So how can you have a regulator in England block an acquisition of a company in the US is making? And can that hold consistently? Can they decide not to operate in England and still go through with it? I mean, what are those particulars here? And and again, is this the final step? Or we we're going to see a lot of maneuvering and legal stuff go on until this is
34:39 Speaker 01 No, no, that's why this does not. This does not kill the deal instantly. The deal is not over. I mean, I think that's why you're seeing the Activision CEO on CNBC and Brad Smith and the BBC, like the Microsoft president going on the air in the UK saying the innovation is dead there. It's closed for business. They're going to fight it. And that's exactly why it still has to be blocked in the US as well. They can't operate or close it in the UK right now. But this just starts the battle. As you said, this is a new chapter. It's not the beginning of the story, but it's the beginning of a new chapter in the story.
35:18 Alex Kantrowitz? So a new chapter here, maybe the end of the book on another story. This is the pandemic economy. Clubhouse this week announced that it was going to lay off about 50% of its staff. And it is, you know, it's kind of interesting to hear this announcement in a week when Blue Sky is taking off. Like, Blue Sky has a little bit of that Clubhouse energy, like where it's, oh, it's tough to get an invite, got to get in. And, you know, Clubhouse had that feel during the pandemic. I think that, like, it also went from something that was kind of cool and broke down barriers to something that became a little bit toxic. But that's, you know, maybe a story for another time, because it's now really, it's done. And There was a story that last October, the co-founder of Clubhouse, Paul Davidson,
36:03 Alex Kantrowitz? said the company had about 100 employees and still had years of cash in the bank. Well, the decline has been so swift that now they had to cut half the staff. And I don't know about usage, but the only time I remember Clubhouse is when I get an email saying someone's followed me there. And then I remember that I used to have an account there. It's already off my phone. I don't know about you. So I'm curious what you think about the demise of Clubhouse. You know, is this a moment to finally put a pin in the pandemic economy? That was, you know, seemed to be so ever-present and so impossible to ignore. And now it just is like a figment of the imagination at this point.
36:41 Speaker 01 Well, first of all, that was the most beautiful segue there, Alex. With the end of the chat, that end of the chapter on the different story. Yeah, that worked. I think-
36:52 Alex Kantrowitz? I was thinking, man, I was just like, how am I going to transition from antitrust blocking to the end of Clubhouse? But you set it up perfectly.
36:59 Speaker 01 You nailed it. You landed it.
37:00 Alex Kantrowitz? This is how it's supposed to work. Exactly. Okay, go ahead.
37:04 Speaker 01 Back to Clubhouse. If people on Clubhouse did that, maybe people would have stayed there. Now, I think, to me, Clubhouse, during the rise of it, I will admit, I was skeptical. I did think it was a feature more than a business. And I think it shows. Twitter Spaces, I still end up on sometimes, especially like around economic indicator releases, there's amazing Twitter Spaces where you get like really in-depth analysis. So that idea of live audio is alive and well. We are doing live audio right now on LinkedIn. Like, if that didn't go anywhere.
37:43 Speaker 01 It's again, Clubhouse was the poster child. They hit a $4 billion valuation. You had all the usual suspects of Tiger and DST, like the late-stage inflated valuation investors. So I think Clubhouse, they are definitely going to be the case study for the pandemic, or one of the case studies for pandemic economy absurdity. And I think, again, like the idea that during the pandemic, I don't know, like, did you ever think we were all really going to just be sitting at home? All like listening to live audio for hours?
38:25 Alex Kantrowitz? Definitely not. No, I think the red flag for me was when some of the investors started talking about how they had built a new media and disintermediated journalism. I was just like, huh? This is
38:38 Speaker 01 I mean, speaking of the new media, thinking back, I will never forget how these things explode. If you remember, it was Elon Musk went on there. I think. And then I remember that was like the first time I was like, okay, must hear moment. And then there was like, I think maybe millions of people on there. So like, there were these like little inflection points where
39:02 Alex Kantrowitz? Maxed out at like 300, 3,000, but people kept creating these, these other 5,000. Kept creating overflow rooms where they would broadcast the must
39:12 Speaker 01 Oh, no, maybe. Okay, maybe that maybe that's what it was. Was that was the one moment I'm like, oh, my God, I need to get on. I need to hear what's being said. But yeah, the idea that I mean, remember that was part of the overall, I think, A16Z. Create a new media, create new platforms to like
39:34 Alex Kantrowitz? Et cetera, et cetera.
39:34 Speaker 01 Yeah. And don't forget Future, the A16Z blog that was supposed to become its own media entity.
39:43 Alex Kantrowitz? It's toast now. Yeah. Blocking is hard.
39:45 Speaker 01 I think so. Yeah. Yeah. Yeah. But yeah, no, the, the, speaking of the pandemic economy, I have a I think I'm going to sell my Peloton bike. This is like the final stage. I have a gym membership again. And it's sitting there and I was like, I bought it in 2017, I think. I was one of the biggest fans throughout the pandemic. It was incredible, but now it just sits here. And I think like and you've written about this, like the idea, it's such a tension where the companies that invested in the pandemic economy and extrapolate those trends and growth rates out five to 10 years. Looking back, it's insane and stupid, but
40:29 Speaker 01 at that moment, did you have to do it as a company? If you didn't do it, would you, you know, like, would investors not be happy? Were you playing the wrong game? And I still think about it because again, when you look at Clubhouse, when you look at Peloton, Zoom, everything. In hindsight, it certainly looks ridiculous, but.
40:49 Alex Kantrowitz? Exactly. Yeah, I think I think that it's it's finished and it is interesting like looking back there like you almost you put yourself in this mindset of like you were on Clubhouse. You know, you were doing Zooms and maybe on that Peloton bike. And to me, that all right, that's a chapter of life that, you know, we did the best we could. Let's move on. Like you talked about having your own gym membership, let's move on like let's let's live life post pandemic. It's much better that way. All right, let's let's end with this story. There's a great newsletter in in Bloomberg by Rachel Metz and it talks about. Is it important who writes what you read? Right? And there is these this amazing quotes.
41:28 Alex Kantrowitz? These amazing quotes from Mike Nunez from VentureBeat, talking about how like they are having AI help with their. Stories and they're not going to disclose it and they don't care. And he he says. VentureBeat is encouraging reporters to use powerful AI tools that are currently available. And it doesn't attribute an article with sentences and fragments from a chatbot as long as it's truthful and independently verified. And this is my favorite quote from the whole story. Nunez says, I don't think our readers care, to be totally honest. Tweet that out if you want. So I am curious. How great of a quote is that?
42:07 Speaker 01 He said it.
42:08 Alex Kantrowitz? It's a great quote. It's a great, great quote. But I, you know, I'm curious like what you think like. Do you think that anyone should disclose when they're using AI in their writing? And do you think people will care?
42:21 Speaker 01 I don't think people need to. I kind of agree with him and I think like. I don't know. I mean, as someone who writes, I think like the pressure of writing is you need to be original anyways. I think news reporting is in a is such an interesting space because. A lot of it is formulaic on the writing side, which is not the worst thing. Again, doing the. Journalism, doing the research, doing the interviews, doing the analysis. That's the real value, right? That's the stuff that like the way I think about AI created content, especially text. If it existed before, it can then be replicated, right?
43:05 Speaker 01 But if it has not existed before, if it is new, if it's insightful or original, it cannot be created because it hasn't existed before. So. So I still think like. You know, as a reader, if I just want to know what's happening about something, I think it's okay. And I don't really care or need to know, was this an AI or a person?
43:27 Alex Kantrowitz? So I've done some experimenting. I've done some experimenting around this where like I've asked Bing or ChatGPT to write a paragraph for me, write a line for me. I fed it my stories and then said, hey, what's your analysis of this? And it's not good. It's just not good.
43:46 Speaker 01 Yeah, it's not good.
43:48 Alex Kantrowitz? And so I think that like, I'm less concerned about the need to disclose it and more concerned about the quality. And I think that like, at the end of the day, if you're a publication that cares about your readers, it's not whether you necessarily disclose or you don't. It's do you care enough about the copy that's going on that website? That eventually, that's your way that you're communicating with people to make sure that that is not written by AI. Because AI might get there at some point. And in which case, I think this conversation becomes far more pertinent. But in the meantime, if you really care about your audience, you don't use this stuff. You might use it to jog ideas, which I do. You know, maybe help you with phrasing and stuff, but to copy and paste from one of these bots is just going to deliver an article
44:33 Alex Kantrowitz? that's just far below the quality of what a professional writer, a professional reporter or journalist will ever deliver to you. And that's why I think that like, that to enthusiastically embrace it and put it in your website is foolhardy.
44:46 Speaker 01 Well, or it's implicitly accepting and acknowledging that your content is average. It's saying it's pretty average. I think if you do that, that's exactly what you're saying. Like it's a, this is not original or insightful or has any kind of creative voice. You're just saying, this is pretty average. I mean, this is something years ago, I remember like actually speaking with a company. What was it called? They do the sports scores and financial earnings automated articles. I think it's called Automated Insights. I mean, it was like,
45:22 Alex Kantrowitz? Right.
45:23 Speaker 01 Yeah, it was like Mad Libs style, fill in the blanks, if then statements. If team one wins, say this. If earnings are higher than estimated, say this. And it was fine. And for like, if all you want to do is read who won the game and who, you know, had the most points and rebounds and stuff, then then it's fine. And you expect that content to be average. And yeah, I think that's if it's good, it should be good. And AI is not going to replace that.
45:53 Alex Kantrowitz? Okay, well.
45:54 Speaker 01 Has any, has any, has any AI created content filled in the the pages of your newsletter ever?
46:05 Alex Kantrowitz? No. I mean,
46:06 Speaker 01 No.
46:07 Alex Kantrowitz? No.
46:07 Speaker 01 What about, what about a rewrite and like make this? Yeah.
46:12 Alex Kantrowitz? Yeah, I'll I'll admit like I'll I will feed the thesis of my stories in and say, tell me all the angles that I should be thinking about. And I will take that into context. But I'm not copy pasting. So I go ahead.
46:22 Speaker 01 All right. No, no, no. That's what I was gonna, what about like, uh, uh, clean up this writing type of stuff? Or, uh, I mean, if you think about it, even grammar and spell checking was a kind of an early version of this.
46:37 Alex Kantrowitz? Right. For sure. Look, maybe one day I can feed it in all big technology stories and it can start writing in my voice. But when I say, hey, you know, take this article and improve it, it does what what a a below amateur writer would do to a story, which is that it adds lots of clutter and flourish words. And
46:57 Speaker 01 Yeah.
46:58 Alex Kantrowitz? That's the stuff I've worked so hard in my career to take out of my writing, the cliches, the clutter, you know, those little flourishes that would be much better off as being written straightforward. I mean, you know what I'm talking about because your writing is like very like straightforward and and good to read because of that. And so I think that, you know, I maybe one day I'll be able to upload big technology and it will really learn the way that I'm writing and then translate it and be able to write my stories. But not not this current iteration. And this current iteration is pretty advanced.
47:30 Speaker 01 Yep, I think the takeaway, if it's average, then if your content is average, then you can replace it and it's okay. And if it's good, it's good.
47:40 Alex Kantrowitz? Yeah, but, but I mean, we'll talk about this next week because next week we have Ben Smith coming on with us and that's going to be a real fun conversation.
47:47 Speaker 01 Two weeks.
47:48 Alex Kantrowitz? Oh, no, no, in two weeks, we have Ben Smith coming on. But I mean, I will stand on the table to say, if you're producing average content, get out of the game. And we've seen so many of these digital news startups who like had lots of average content just fall by the wayside. And we just had it like, I mean, Vice has done some good journalism, but we had another one fall, fall by the wayside this week. And that's my, my thing that like, if you're, if you're gonna post average content on the internet, you're not really trying and you're eventually gonna fail. My perspective.
48:19 Speaker 01 Yep. I think the death of the average is a good place to end.
48:23 Alex Kantrowitz? Yes. Okay, so we're, we're two weeks from Ben Smith, who just had this book, Traffic, come out. If you're a listener to the show, you know, I've had a conversation with Ben. You can go back and listen to that. We talked a lot about the themes that would eventually, I end up reading his book afterwards and a lot of these themes came up. So that'll be good. And then he's going to be on with Rajan and I in a couple of weeks, talking about,
48:43 Alex Kantrowitz? well, all, all different things and going on in the news, digital media, et cetera, et cetera. Maybe we'll have some more information about Tucker Carlson and Don Lemon by then, who knows? Next week, we have a really fun episode coming up. We're going to be together with Brian McCullough from Tech Meme Ride Home for a crossover episode. We might even be doing this in person. So stay tuned for that. That's going to be next Friday at 2:00 PM, oh, yeah, 2:00 PM Eastern and 11:00 AM Pacific. And so we hope you can join for that. Been great speaking with you this week, Rajan. Thank you for coming on.
49:19 Speaker 01 Yeah, this was fun.
49:21 Alex Kantrowitz? I told you guys, it was gonna get spicy, lots of disagreement. So hopefully, hopefully productive disagreement, no yelling, which is good. We're the blue sky to normal podcast Twitter or something.
49:32 Speaker 01 To Tucker Carlson's Twitter.
49:34 Alex Kantrowitz? Exactly. Do you know what you're not telling you, Rajan? Okay.
49:40 Alex Kantrowitz? Thanks, everybody, for listening. Thanks again, Ron John, for coming on. Thanks, everybody who rated and reviewed the podcast over the past couple of days. I've definitely seen that nice response, and I appreciate it. And we are, we're definitely starting to look like a podcast that lots of people are listening to, which is very, very cool, and I appreciate it. All right. Next week, join me for a conversation with Ellis Hamburger. He's a former Snapchat employee. We hardly touched on Snap today also. But he's a former Snapchat employee who wrote this great story about how social media is doomed to die, and he put it out on the verge. And we're going to talk about why and what he's seen. And it's going to be fun. So stay tuned for that. Thanks again for listening, and we'll see you next time on Big Technology Podcast.
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Previous What Exactly Is The Market Telling Tech To Do? — With Josh Brown Next Is Social Media Doomed To Die? — With Ellis Hamburger Page updated October 13, 2026 · transcript and summary are machine-generated
